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 811-06692

 

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

 

Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809

 

Name and address of agent for service: Anne F. Ackerley, Chief Executive Officer, BlackRock MuniYield California Insured Fund, Inc., 55 East 52nd Street, New York, NY 10055

 

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

 

Date of fiscal year end: 07/31/2010

 

Date of reporting period: 07/31/2010

 

Item 1 – Report to Stockholders

 


 

 

(BLACKROCK LOGO)

July 31, 2010

Annual Report

BlackRock MuniHoldings Insured Fund II, Inc. (MUE)

BlackRock MuniYield California Insured Fund, Inc. (MCA)

BlackRock MuniYield Insured Fund, Inc. (MYI)

BlackRock MuniYield Michigan Insured Fund II, Inc. (MYM)

BlackRock MuniYield New York Insured Fund, Inc. (MYN)

 

 

Not FDIC Insured § No Bank Guarantee § May Lose Value

 




 


 

Table of Contents


 

 

 

 


 

 

Page


Dear Shareholder

 

3

 

Annual Report:

 

 

 

Fund Summaries

 

4

 

The Benefits and Risks of Leveraging

 

9

 

Derivative Financial Instruments

 

9

 

Financial Statements:

 

 

 

Schedules of Investments

 

10

 

Statements of Assets and Liabilities

 

32

 

Statements of Operations

 

33

 

Statements of Changes in Net Assets

 

34

 

Statements of Cash Flows

 

37

 

Financial Highlights

 

38

 

Notes to Financial Statements

 

43

 

Report of Independent Registered Public Accounting Firm

 

51

 

Important Tax Information

 

52

 

Disclosure of Investment Advisory Agreements and Sub-Advisory Agreements

 

53

 

Automatic Dividend Reinvestment Plans

 

57

 

Officers and Directors

 

58

 

Additional Information

 

61

 


 

 

 


2

ANNUAL REPORT

JULY 31, 2010




 


 

Dear Shareholder

The global economy is continuing to slowly improve, with the United States and emerging markets leading the way; however global and US economic statistics show that the pace of economic growth has trailed off in recent months. Market volatility has remained elevated over the past several months as investors remain uncertain about the future direction of economic growth. The sovereign debt crisis in Europe, slowing growth in China and concerns over the possibility that the United States and other developed markets are heading for a double-dip recession have all acted to depress investor sentiment. It is our view that the recent soft patch of economic data is just that — a slowdown in the pace of recovery and not an indication that the economy is sliding back into recession. In the United States, we expect to see slightly slower economic growth over the next several quarters; however, true double-dip recessions are quite rare, and unless there is a major shock to the economy, we believe the recovery will continue.

Global equity markets have moved unevenly higher since bottoming out in early 2009 as investors were enticed by depressed valuations, improved corporate earnings, and their desire for higher yields. Several significant downturns, however, have occurred — primarily as a result of mixed economic data and concerns about the possibility of prolonged deflation (especially in Europe). As the period drew to a close, equity markets were staging a muted recovery. On a 12-month basis global equities were still showing positive returns thanks to improving corporate revenues and profits and a reasonably strong macro backdrop. From a geographic perspective, US equities have significantly outpaced their international counterparts over the past six and twelve months, as the domestic economic recovery has been more pronounced and credit-related issues have held European markets down. Within the United States, smaller cap stocks have outperformed large caps year-to-date.

In fixed income markets, yields have fluctuated significantly over the past year as economic data has been mixed. Over recent months, risk aversion and credit issues kept interest rates low and US Treasury yields have fallen significantly as investors favored “safe haven” assets. As the period drew to a close, higher-risk fixed income assets performed well due to strong earnings announcements and better-than-expected results on European bank stress tests. Meanwhile, tax-exempt municipal bonds slightly outperformed US investment grade bonds on a 12-month basis, but underperformed year-to-date as investors rotated to the relative safety of Treasuries.

Regarding cash investments, yields on money market securities remain near all-time lows (producing returns only marginally above zero percent), with the Federal Open Market Committee reiterating that economic circumstances are likely to necessitate an accommodative interest rate stance for an “extended period.”

Against this backdrop, the major market averages posted the following returns:

 

 

 

 

 

 

 

 

Total Returns as of July 31, 2010

 

6-month

 

12-month

 


US large cap equities (S&P 500 Index)

 

3.61

%

 

13.84

%

 









US small cap equities (Russell 2000 Index)

 

8.79

 

 

18.43

 

 









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

 

(0.62

)

 

6.26

 

 









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

 

0.06

 

 

0.16

 

 









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

 

7.67

 

 

8.34

 

 









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

 

4.85

 

 

8.91

 

 









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

 

4.06

 

 

9.15

 

 









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

 

6.72

 

 

23.69

 

 









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

Although conditions are certainly better than they were a couple of years ago, global financial markets continue to face high volatility while questions about the strength and sustainability of the recovery abound. Through periods of uncertainty, as ever, BlackRock’s full resources are dedicated to the management of our clients’ assets. 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. 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




 

 



 

 

Fund Summary as of July 31, 2010

BlackRock MuniHoldings Insured Fund II, Inc.


 


Fund Overview


BlackRock MuniHoldings Insured Fund II, Inc.’s (MUE) (the “Fund”) investment objective is to provide shareholders with current income exempt from federal income taxes. The Fund seeks to achieve its investment objective by investing primarily in long-term, investment grade municipal obligations exempt from federal income taxes (except that the interest may be subject to the federal alternative minimum tax). Under normal market conditions, the Fund invests at least 80% of its assets in municipal obligations with remaining maturities of one year or more that are covered by insurance guaranteeing the timely payment of principal at maturity and interest 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 July 31, 2010, the Fund returned 33.51% based on market price, and 18.04% based on net asset value (“NAV”). For the same period, the closed-end Lipper Insured Municipal Debt Funds (Leveraged) category posted an average return of 24.23% based on market price, and 15.41% 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 market price and performance based on NAV. The following discussion relates to performance based on NAV. The Fund held health and housing bonds with maturities of 20 years and longer, which benefited performance as the municipal yield curve flattened over the last 12 months. The Fund’s exposure to insured issues with weak underlying credits detracted from performance as investor confidence in monoline insurers waned.

 

 

 

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”)

 

MUE

Initial Offering Date

 

February 26, 1999

Yield on Closing Market Price as of July 31, 2010 ($14.26)1

 

6.19%

Tax Equivalent Yield2

 

9.52%

Current Monthly Distribution per Common Share3

 

$0.0735

Current Annualized Distribution per Common Share3

 

$0.8820

Leverage as of July 31, 20104

 

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 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 9.

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


















 

 

7/31/10

 

7/31/09

 

Change

 

High

 

Low

 













Market Price

 

$

14.26

 

$

11.40

 

 

25.09

%

$

14.32

 

$

11.40

 

Net Asset Value

 

$

13.57

 

$

12.27

 

 

10.59

%

$

13.88

 

$

12.26

 


















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

 


Sector Allocations



 

 

 

 

 

 

 

 

 

 

7/31/10

 

7/31/09

 







County/City/Special District/School District

 

28

%

 

29

%

 

Utilities

 

23

 

 

21

 

 

Transportation

 

23

 

 

23

 

 

State

 

11

 

 

10

 

 

Health

 

9

 

 

9

 

 

Housing

 

5

 

 

5

 

 

Corporate

 

1

 

 

2

 

 

Education

 

 

 

1

 

 



 


Credit Quality Allocations5



 

 

 

 

 

 

 

 

 

 

7/31/10

 

7/31/09

 







AAA/Aaa

 

54

%

 

50

%

 

AA/Aa

 

24

 

 

19

 

 

A

 

20

 

 

27

 

 

BBB/Baa

 

1

 

 

2

 

 

Not Rated6

 

1

 

 

2

 

 










 

 

 

 

5

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

 

 

 

 

6

The investment advisor has deemed certain of these non-rated securities to be of investment grade quality. As of July 31, 2010 and July 31, 2009, the market value of these securities was $3,925,265, representing 1% and $10,104,059, representing 2%, respectively, of the Fund’s long-term investments.


 

 

 

 





4

ANNUAL REPORT

JULY 31, 2010

 




 

 



 

 

Fund Summary as of July 31, 2010

BlackRock MuniYield California Insured Fund, Inc.


 


Fund Overview


BlackRock MuniYield California Insured Fund, Inc.’s (MCA) (the “Fund”) investment objective is to provide shareholders with as high a level of current income exempt from federal and California income taxes as is consistent with its investment policies and prudent investment management. The Fund seeks to achieve its investment objective by investing at least 80% of its assets in municipal obligations exempt from federal income taxes (except that the interest may be subject to the federal alternative minimum tax) and California income taxes. Under normal market conditions, the Fund invests primarily in long-term municipal obligations that are investment grade quality at the time of investment and at least 80% of its assets in municipal obligations that are covered by insurance guaranteeing the timely payment of principal at maturity and interest when due. 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 July 31, 2010, the Fund returned 23.00% based on market price, and 15.69% based on NAV. For the same period, the closed-end Lipper Single-State Insured Municipal Debt Funds category posted an average return of 21.26% based on market price, and 14.03% based on NAV. All returns reflect reinvestment of dividends. The Fund’s discount to NAV, which narrowed during the period, accounts for the difference between performance based on market price and performance based on NAV. The following discussion relates to performance based on NAV. The Fund maintains a relatively generous degree of income accrual, which was a positive factor. The tightening of credit quality spreads in the uninsured basket of the Fund’s holdings also aided results. A fully-invested and slightly longer relative duration posture were additive, too, as rates declined over the period. The municipal market benefited from the Build America Bond Program, which effectively moved supply to the taxable market and, thus, alleviated supply pressure in the tax-exempt space. Management’s focus on the quality of underlying credits while the market placed less value on monoline insurance also aided relative performance. Secondary market demand for insured municipals weakened, resulting in limited liquidity and widening spreads on some sectors of insured bonds. Cash reserves held in the Fund during the period also detracted from performance as cash underperformed longer maturity coupon bonds in an environment of falling interest rates and tightening spreads.

 

 

 

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

 

MCA

Initial Offering Date

 

October 30, 1992

Yield on Closing Market Price as of July 31, 2010 ($14.02)1

 

5.82%

Tax Equivalent Yield2

 

8.95%

Current Monthly Distribution per Common Share3

 

$0.068

Current Annualized Distribution per Common Share3

 

$0.816

Leverage as of July 31, 20104

 

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 Monthly Distribution per Common Share declared on September 1, 2010 was increased to $0.0705. The Yield on Closing Market Price, Current Monthly Distribution per Common Share and Current Annualized Distribution per Common Share do not reflect the new distribution rate. The new distribution rate is not constant and is subject to change in the future.

 

 

 

 

4

Represents 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 9.

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 













 

 

7/31/10

 

7/31/09

 

Change

 

High

 

Low

 













Market Price

 

$

14.02

 

$

12.08

 

 

16.06

%

$

14.05

 

$

12.03

 

Net Asset Value

 

$

14.66

 

$

13.43

 

 

9.16

%

$

14.92

 

$

13.42

 


















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

 


Sector Allocations



 

 

 

 

 

 

 

 

 

 

7/31/10

 

7/31/09

 







County/City/Special District/School District

 

55

%

 

44

%

 

Utilities

 

22

 

 

25

 

 

Transportation

 

11

 

 

13

 

 

Education

 

7

 

 

10

 

 

State

 

2

 

 

3

 

 

Health

 

2

 

 

3

 

 

Corporate

 

1

 

 

 

 

Housing

 

 

 

2

 

 











Credit Quality Allocations5



 

 

 

 

 

 

 

 

 

 

7/31/10

 

7/31/09

 







AAA/Aaa

 

57

%

 

44

%

 

AA/Aa

 

29

 

 

28

 

 

A

 

14

 

 

27

 

 

BBB/Baa

 

 

 

1

 

 








 

 

 

 

5

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


 

 

 

 





 

ANNUAL REPORT

JULY 31, 2010

5




 

 



 

 

Fund Summary as of July 31, 2010

BlackRock MuniYield Insured Fund, Inc.


 


Fund Overview


BlackRock MuniYield Insured Fund, Inc.’s (MYI) (the “Fund”) investment objective is to provide shareholders with as high a level of current income exempt from federal income taxes as is consistent with its investment policies and prudent investment management. The Fund seeks to achieve its investment objective by investing at least 80% of its assets in municipal obligations exempt from federal income taxes (except that the interest may be subject to the federal alternative minimum tax). Under normal market conditions, the Fund invests primarily in long-term municipal obligations that are investment grade quality at the time of investment and at least 80% of its assets in municipal obligations that are covered by insurance guaranteeing the timely payment of principal at maturity and interest when due. 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 July 31, 2010, the Fund returned 24.03% based on market price, and 18.19% based on NAV. For the same period, the closed-end Lipper Insured Municipal Debt Funds (Leveraged) category posted an average return of 24.23% based on market price, and 15.41% 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 market price and performance based on NAV. The following discussion relates to performance based on NAV. Overall the tax-exempt municipal market benefited from the Build America Bond Program, which made the taxable market accessible to municipal issuers. This alleviated supply pressure in the tax-exempt space, which, coupled with increased investor demand for municipals, resulted in a favorable supply-demand paradigm and strong performance. The Fund benefited from its modestly long duration positioning as interest rates declined over the period. The Fund’s exposure to the long end of the yield curve made a positive impact as prices of longer-dated bonds are most sensitive to declining interest rates. The Fund’s holdings of insured bonds with lower-rated underlying credits also aided results as credit quality spreads tightened over the period. Detracting from performance was the Fund’s exposure to zero-coupon bonds, which underperformed relative to the broader municipal bond market as spreads in this sector generally widened. The Fund’s exposure to bonds with shorter maturities and/or call dates also detracted as declining interest rates had less of an impact on the shorter end of the yield curve.

 

 

 

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

 

MYI

Initial Offering Date

 

March 27, 1992

Yield on Closing Market Price as of July 31, 2010 ($14.17)1

 

6.01%

Tax Equivalent Yield2

 

9.25%

Current Monthly Distribution per Common Share3

 

$0.071

Current Annualized Distribution per Common Share3

 

$0.852

Leverage as of July 31, 20104

 

38%





 

 

 

 

1

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

 

 

 

 

2

Tax equivalent yield assumes the maximum federal tax rate of 35%.

 

 

 

 

3

The Monthly Distribution per Common Share declared on September 1, 2010 was increased to $0.072. The Yield on Closing Market Price, Current Monthly Distribution per Common Share and Current Annualized Distribution per Common Share do not reflect the new distribution rate. The new distribution rate is not constant and is subject to change in the future.

 

 

 

 

4

Represents 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 9.

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 













 

 

7/31/10

 

7/31/09

 

Change

 

High

 

Low

 













Market Price

 

$

14.17

 

$

12.12

 

 

16.91

%

$

14.26

 

$

11.46

 

Net Asset Value

 

$

13.67

 

$

12.27

 

 

11.41

%

$

13.88

 

$

12.25

 


















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

 


Sector Allocations



 

 

 

 

 

 

 

 

 

 

7/31/10

 

7/31/09

 







Transportation

 

27

%

 

31

%

 

County/City/Special District/School District

 

21

 

 

24

 

 

Utilities

 

17

 

 

17

 

 

Education

 

8

 

 

7

 

 

State

 

8

 

 

8

 

 

Health

 

7

 

 

6

 

 

Housing

 

6

 

 

5

 

 

Corporate

 

6

 

 

2

 

 










 


Credit Quality Allocations5



 

 

 

 

 

 

 

 

 

 

7/31/10

 

7/31/09

 







AAA/Aaa

 

46

%

 

47

%

 

AA/Aa

 

29

 

 

23

 

 

A

 

20

 

 

25

 

 

BBB/Baa

 

5

 

 

5

 

 










 

 

 

 

5

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


 

 

 

 





6

ANNUAL REPORT

JULY 31, 2010

 




 

 


 

Fund Summary as of July 31, 2010

BlackRock MuniYield Michigan Insured Fund II, Inc.


 


Fund Overview


BlackRock MuniYield Michigan Insured Fund II, Inc.’s (MYM) (the “Fund”) investment objective is to provide shareholders with as high a level of current income exempt from federal and Michigan income taxes as is consistent with its investment policies and prudent investment management. The Fund seeks to achieve its investment objective by investing at least 80% of its assets in municipal obligations exempt from federal income taxes (except that the interest may be subject to the federal alternative minimum tax) and Michigan income taxes. Under normal market conditions, the Fund invests primarily in long-term municipal obligations that are investment grade quality at the time of investment and at least 80% of its assets in municipal obligations that are covered by insurance guaranteeing the timely payment of principal at maturity and interest when due. 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 July 31, 2010, the Fund returned 26.01% based on market price, and 14.62% based on NAV. For the same period, the closed-end Lipper Single-State Insured Municipal Debt Funds category posted an average return of 21.26% based on market price, and 14.03% based on NAV. All returns reflect reinvestment of dividends. The Fund’s discount to NAV, which narrowed during the period, accounts for the difference between performance based on market price and performance based on NAV. The following discussion relates to performance based on NAV. The Fund benefited from its allocation to the health sector, which performed well during the period. Positive investment income coupled with a low cost of leverage enabled the Fund to increase its dividend twice in 2010. Overall the Fund benefited from increasing bond prices in the declining interest rate environment, however, its exposure to pre-refunded and escrowed issues detracted from performance as the shorter maturity structure of these issues limited their upward price movement.

 

 

 

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

 

MYM

Initial Offering Date

 

February 28, 1992

Yield on Closing Market Price as of July 31, 2010 ($13.67)1

 

6.28%

Tax Equivalent Yield2

 

9.66%

Current Monthly Distribution per Common Share3

 

$0.0715

Current Annualized Distribution per Common Share3

 

$0.8580

Leverage as of July 31, 20104

 

37%



 

 

1

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

 

 

2

Tax equivalent yield assumes the maximum federal tax rate of 35%.

 

 

3

The distribution 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 9.

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 













 

 

7/31/10

 

7/31/09

 

Change

 

High

 

Low

 













Market Price

 

$ 13.67

 

$ 11.58

 

18.05%

 

$ 13.69

 

$ 11.45

 

Net Asset Value

 

$ 13.82

 

$ 12.87

 

  7.38%

 

$ 14.11

 

$ 12.85

 













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

 

 

 

 

 

 

 

 









Sector Allocations

 

 

 

 

 

 

 









 

 

 

 

 

 

 

 

 

 

7/31/10

 

7/31/09

 







County/City/Special District/School District

 

26

%

 

23

%

 

Health

 

15

 

 

16

 

 

State

 

13

 

 

11

 

 

Transportation

 

12

 

 

11

 

 

Utilities

 

12

 

 

12

 

 

Corporate

 

12

 

 

15

 

 

Education

 

8

 

 

10

 

 

Housing

 

2

 

 

2

 

 









 

 

 

 

 

 

 

 









Credit Quality Allocations5

 

 

 

 

 

 

 









 

 

 

 

 

 

 

 

 

 

7/31/10

 

7/31/09

 







AAA/Aaa

 

40

%

 

28

%

 

AA/Aa

 

27

 

 

27

 

 

A

 

28

 

 

40

 

 

BBB/Baa

 

2

 

 

2

 

 

Not Rated

 

3

6

 

3

 

 










 

 

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 July 31, 2010, the market value of these securities was $4,382,645, representing 2% of the Fund’s long-term investments.


 

 

 




ANNUAL REPORT

JULY 31, 2010

7




 

 


 

Fund Summary as of July 31, 2010

BlackRock MuniYield New York Insured Fund, Inc.


 


Fund Overview


BlackRock MuniYield New York Insured Fund, Inc.’s (MYN) (the “Fund”) investment objective is to provide shareholders with as high a level of current income exempt from federal income taxes and New York State and New York City personal income taxes as is consistent with its investment policies and prudent investment management. The Fund seeks to achieve its investment objective by investing at least 80% of its assets in municipal obligations exempt from federal income taxes (except that the interest may be subject to the federal alternative minimum tax) and New York State and New York City personal income taxes. Under normal market conditions, the Fund invests primarily in long-term municipal obligations that are investment grade quality at the time of investment and at least 80% of its assets in municipal obligations that are covered by insurance guaranteeing the timely payment of principal at maturity and interest when due. 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 July 31, 2010, the Fund returned 26.36% based on market price, and 16.15% based on NAV. For the same period, the closed-end Lipper Single-State Insured Municipal Debt Funds category posted an average return of 21.26% based on market price, and 14.03% based on NAV. All returns reflect reinvestment of dividends. The Fund’s discount to NAV, which narrowed during the period, accounts for the difference between performance based on market price and performance based on NAV. The following discussion relates to performance based on NAV. The Fund’s outperformance relative to its peer group resulted more from its price appreciation than its distributions, which were below average for the period. On average, the Fund had a neutral-to-positive duration bias over the period. This positioning along with a low cash balance resulted in positive capital appreciation. Overall the tax-exempt municipal market benefited from the Build America Bond Program, which made the taxable market accessible to municipal issuers. This alleviated supply pressure in the tax-exempt space, which, coupled with increased investor demand for municipals, resulted in a favorable supply-demand paradigm and strong performance. Many of the Fund’s holdings began the period with depressed valuations resulting from their underperformance during the periods of dislocations in the credit market, which positioned them for more upward price movement potential as the market continued its recovery. We purchased a number of new issues structured with the goal of creating greater potential for price appreciation in response to declining interest rates. The Fund’s exposure to the health and housing sectors and Puerto Rico credits also added to performance. Detracting from performance was the Fund’s exposure to zero-coupon bonds, which underperformed as investors continued to favor the liquidity and defensiveness of current coupon bonds. The Fund’s concentration in the longer end of the yield curve benefited the portfolio while the Fund’s modest exposure to the short-term, high-grade, pre-refunded sector hindered 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 NYSE

 

MYN

Initial Offering Date

 

February 28, 1992

Yield on Closing Market Price as of July 31, 2010 ($13.57)1

 

6.19%

Tax Equivalent Yield2

 

9.52%

Current Monthly Distribution per Common Share3

 

$0.07

Current Annualized Distribution per Common Share3

 

$0.84

Leverage as of July 31, 20104

 

37%





 

 

1

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

 

 

2

Tax equivalent yield assumes the maximum federal tax rate of 35%.

 

 

3

The Monthly Distribution per Common Share declared on September 1, 2010 was increased to $0.071. The Yield on Closing Market Price, Current Monthly Distribution per Common Share and Current Annualized Distribution per Common Share do not reflect the new distribution rate. The new distribution rate is not constant and is subject to change in the future.

 

 

4

Represents 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 9.

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 













 

 

7/31/10

 

7/31/09

 

Change

 

High

 

Low

 













Market Price

 

$ 13.57

 

$ 11.36

 

19.45%

 

$ 13.57

 

$ 11.32

 

Net Asset Value

 

$ 13.89

 

$ 12.65

 

 9.80%

 

$ 13.98

 

$ 12.64

 













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

 

 

 

 

 

 

 

 









Sector Allocations

 

 

 

 

 

 

 









 

 

 

 

 

 

 

 

 

 

7/31/10

 

7/31/09

 







Transportation

 

31

%

 

29

%

 

County/City/Special District/School District

 

29

 

 

31

 

 

State

 

11

 

 

11

 

 

Utilities

 

10

 

 

10

 

 

Education

 

7

 

 

5

 

 

Corporate

 

5

 

 

6

 

 

Health

 

4

 

 

4

 

 

Housing

 

2

 

 

3

 

 

Tobacco

 

1

 

 

1

 

 









 

 

 

 

 

 

 

 









Credit Quality Allocations5

 

 

 

 

 

 

 









 

 

 

 

 

 

 

 

 

 

7/31/10

 

7/31/09

 







AAA/Aaa

 

44

%

 

45

%

 

AA/Aa

 

17

 

 

16

 

 

A

 

34

 

 

32

 

 

BBB/Baa

 

2

 

 

7

 

 

BB/Ba

 

3

 

 

 

 










 

 

5

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


 

 

 


8

ANNUAL REPORT

JULY 31, 2010




 


 

The Benefits and Risks of Leveraging

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

To leverage, the Funds issue 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 financing cost of assets to be obtained from leverage will be based on short-term interest rates, which normally will 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 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 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 tender option bond (“TOB”) programs, 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 returns 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’ NAV, market price and dividend rate than a comparable portfolio 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, the Funds’ 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 at distressed values in order to comply with regulatory requirements applicable to the use of leverage or as required by the terms of leverage instruments, which may cause 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 TOBs will not exceed 50% of its total managed assets at the time such leverage is incurred. As of July 31, 2010, the Funds had economic leverage from Preferred Shares and/or TOBs as a percentage of their total managed assets as follows:

 

 

 




 

 

Percent of
Leverage




MUE

 

39%

MCA

 

40%

MYI

 

38%

MYM

 

37%

MYN

 

37%





 


 

Derivative Financial Instruments

The Funds may invest in various derivative 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 instruments involve risks, including the imperfect correlation between the value of a derivative instrument and the underlying asset, possible default of the counterparty to the transaction or illiquidity of the derivative instrument. Each Fund’s ability to successfully use a derivative instrument depends on the investment advisor’s ability to accurately predict pertinent market movements, which cannot be assured. The use of derivative instruments may result in losses greater than if they had not been used, may require a Fund to sell or purchase portfolio securities at inopportune times or for distressed values, may limit the amount of appreciation a Fund can realize on an investment, may result in lower dividends paid to shareholders or may cause a Fund to hold a security that it might otherwise sell. The Funds’ investments in these instruments are discussed in detail in the Notes to Financial Statements.

 

 

 




ANNUAL REPORT

JULY 31, 2010

9




 

 


 

 

Schedule of Investments July 31, 2010

BlackRock MuniHoldings Insured Fund II, Inc. (MUE)

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 









Alabama — 2.9%

 

 

 

 

 

 

 

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

 

$

5,225

 

$

5,705,647

 

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

 

 

3,580

 

 

3,101,569

 

 

 

 

 

 



 

 

 

 

 

 

 

8,807,216

 









Arizona — 0.5%

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

5.25%, 10/01/28

 

 

1,175

 

 

1,221,730

 

5.00%, 10/01/29

 

 

305

 

 

309,688

 

 

 

 

 

 



 

 

 

 

 

 

 

1,531,418

 









Arkansas — 4.1%

 

 

 

 

 

 

 

Arkansas Development Finance Authority, Refunding RB,
Series C (NPFGC):

 

 

 

 

 

 

 

5.35%, 12/01/11 (a)

 

 

1,050

 

 

1,129,380

 

5.35%, 12/01/35

 

 

11,115

 

 

11,235,598

 

 

 

 

 

 



 

 

 

 

 

 

 

12,364,978

 









California — 14.5%

 

 

 

 

 

 

 

City of Vista California, COP, Refunding, Community
Projects (NPFGC), 5.00%, 5/01/37

 

 

5,400

 

 

5,124,978

 

County of Sacramento California, RB, Senior Series A
(AGC), 5.50%, 7/01/41

 

 

3,500

 

 

3,695,055

 

Dixon Unified School District California, GO, Election of
2002 (AGM), 5.20%, 8/01/44

 

 

1,890

 

 

1,902,833

 

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

 

 

5,000

 

 

5,121,600

 

Modesto Schools Infrastructure Financing Agency,
Special Tax Bonds (AMBAC), 5.50%, 9/01/36

 

 

4,240

 

 

3,925,265

 

Oceanside Unified School District California, GO,
Series A (AGC), 5.25%, 8/01/33

 

 

3,175

 

 

3,292,507

 

Port of Oakland, RB, Series K, AMT (NPFGC), 5.75%,
11/01/21

 

 

2,975

 

 

2,976,993

 

Port of Oakland, Refunding RB, Series M, AMT (NPFGC),
5.38%, 11/01/27

 

 

2,220

 

 

2,221,909

 

Roseville Joint Union High School District California,
GO, Election of 2004, Series A (NPFGC), 5.00%,
8/01/29

 

 

2,985

 

 

3,055,565

 


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 









California (concluded)

 

 

 

 

 

 

 

Sacramento City Financing Authority California, RB,
Capital Improvement (AMBAC), 5.00%, 12/01/27

 

$

150

 

$

151,457

 

San Francisco City & County Airports Commission,
RB, Special Facility Lease, SFO Fuel, Series A,
AMT (AGM), 6.10%, 1/01/20

 

 

1,250

 

 

1,252,288

 

State of California, GO, Refunding, Veterans, Series
BZ, AMT (NPFGC), 5.35%, 12/01/21

 

 

9,350

 

 

9,354,301

 

Stockton Public Financing Authority California, RB,
Redevelopment Projects, Series A (Radian),
5.25%, 9/01/34

 

 

2,430

 

 

1,871,027

 

 

 

 

 

 



 

 

 

 

 

 

 

43,945,778

 









Colorado — 1.3%

 

 

 

 

 

 

 

Colorado Health Facilities Authority, RB, Hospital,
NCMC Inc. Project, Series B (AGM), 6.00%,
5/15/26

 

 

3,300

 

 

3,706,857

 

Colorado Housing & Finance Authority, Refunding
RB, S/F Program, Senior Series A-2, AMT, 7.50%,
4/01/31

 

 

155

 

 

164,787

 

 

 

 

 

 



 

 

 

 

 

 

 

3,871,644

 









District of Columbia — 0.8%

 

 

 

 

 

 

 

District of Columbia, RB, Deed Tax, Housing
Production Trust Fund, Series A (NPFGC),
5.00%, 6/01/32

 

 

2,500

 

 

2,519,975

 









Florida — 20.3%

 

 

 

 

 

 

 

City of Miami Florida, RB (NPFGC), 5.00%, 1/01/37

 

 

300

 

 

303,510

 

City of Orlando Florida, RB, Senior, 6th Cent Contract
Payments, Series A (AGC), 5.25%, 11/01/38

 

 

675

 

 

663,235

 

County of Miami-Dade Florida, RB:

 

 

 

 

 

 

 

CAB, Sub-Series A (NPFGC), 5.24%,
10/01/37 (b)

 

 

1,980

 

 

323,275

 

Miami International Airport, Series A, AMT (AGM),
5.25%, 10/01/41

 

 

13,785

 

 

13,838,486

 

Miami International Airport, Series A, AMT (AGM),
5.50%, 10/01/41

 

 

6,700

 

 

6,836,345

 

Series A, AMT (AGM), 5.00%, 10/01/33

 

 

6,730

 

 

6,567,134

 

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

 

 

11,010

 

 

11,327,749

 


 


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

Federal 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

IDRB

Industrial Development Revenue Bonds

ISD

Independent School District

MRB

Mortgage Revenue Bonds

NPFGC

National Public Finance Guarantee Corp.

PILOT

Payment in Lieu of Taxes

PSF-GTD

Permanent School Fund Guaranteed

RB

Revenue Bonds

S/F

Single Family

SBPA

Stand-by Bond Purchase Agreement

SONYMA

State of New York Mortgage Agency

VRDN

Variable Rate Demand Notes


 

 

 

 

See Notes to Financial Statements.


10

ANNUAL REPORT

JULY 31, 2010

 




 

 


 

 

Schedule of Investments (continued)

BlackRock MuniHoldings Insured Fund II, Inc. (MUE)

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 









Florida (concluded)

 

 

 

 

 

 

 

County of Miami-Dade Florida, Refunding RB, Water &
Sewer System (AGM), 5.00%, 10/01/29

 

$

3,000

 

$

3,151,140

 

County of St. John’s Florida, RB, CAB (AMBAC), 5.36%,
6/01/31 (b)

 

 

4,940

 

 

1,575,662

 

Jacksonville Port Authority, RB, AMT (AGC), 6.00%,
11/01/38

 

 

3,625

 

 

3,714,972

 

Orange County School Board, COP, Series A (AGC),
5.50%, 8/01/34

 

 

12,375

 

 

13,254,367

 

 

 

 

 

 



 

 

 

 

 

 

 

61,555,875

 









Georgia — 2.8%

 

 

 

 

 

 

 

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

 

 

3,425

 

 

3,504,803

 

Metropolitan Atlanta Rapid Transit Authority, RB, Third
Indenture, Series B (AGM), 5.00%, 7/01/34

 

 

4,830

 

 

5,050,924

 

 

 

 

 

 



 

 

 

 

 

 

 

8,555,727

 









Idaho — 0.1%

 

 

 

 

 

 

 

Idaho Housing & Finance Association, RB, S/F Mortgage,
Series E, AMT, 6.00%, 1/01/32

 

 

260

 

 

274,760

 









Illinois — 7.6%

 

 

 

 

 

 

 

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

 

 

2,080

 

 

2,371,158

 

Chicago Transit Authority, RB, Federal Transit
Administration Section 5309, Series A (AGC),
6.00%, 6/01/26

 

 

3,400

 

 

3,927,340

 

City of Chicago Illinois, GO, Refunding, Projects,
Series A (AGM):

 

 

 

 

 

 

 

5.00%, 1/01/28

 

 

2,315

 

 

2,467,049

 

5.00%, 1/01/29

 

 

3,585

 

 

3,794,651

 

5.00%, 1/01/30

 

 

1,430

 

 

1,502,287

 

City of Chicago Illinois, RB, General, Third Lien, Series C
(AGM), 5.25%, 1/01/35

 

 

2,085

 

 

2,161,749

 

City of Chicago Illinois, Refunding RB, Second Lien
(NPFGC), 5.50%, 1/01/30

 

 

2,270

 

 

2,520,994

 

State of Illinois, RB, Build Illinois, Series B, 5.25%,
6/15/28

 

 

4,000

 

 

4,247,360

 

 

 

 

 

 



 

 

 

 

 

 

 

22,992,588

 









Indiana — 3.5%

 

 

 

 

 

 

 

Indiana Municipal Power Agency, RB, Series A (NPFGC),
5.00%, 1/01/42

 

 

8,000

 

 

8,087,200

 

Indianapolis Local Public Improvement Bond Bank,
Refunding RB, Waterworks Project, Series A (AGC),
5.50%, 1/01/38

 

 

2,370

 

 

2,583,016

 

 

 

 

 

 



 

 

 

 

 

 

 

10,670,216

 









Iowa — 1.0%

 

 

 

 

 

 

 

Iowa Finance Authority, Refunding RB, Iowa Health
System (AGC), 5.25%, 2/15/29

 

 

2,915

 

 

3,070,690

 









Kansas — 0.5%

 

 

 

 

 

 

 

Sedgwick & Shawnee Counties Kansas, MRB,
Series A-2, AMT (Ginnie Mae), 6.20%, 12/01/33

 

 

1,585

 

 

1,609,631

 









Kentucky — 0.9%

 

 

 

 

 

 

 

Kentucky Economic Development Finance Authority,
RB, Louisville Arena, Sub-Series A-1 (AGC), 6.00%,
12/01/38

 

 

1,000

 

 

1,091,170

 

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

 

 

1,525

 

 

1,660,115

 

 

 

 

 

 



 

 

 

 

 

 

 

2,751,285

 










 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 









Louisiana — 1.3%

 

 

 

 

 

 

 

Louisiana State Citizens Property Insurance Corp., RB,
Series C-3 (AGC), 6.13%, 6/01/25

 

$

3,550

 

$

3,951,682

 









Maine — 0.9%

 

 

 

 

 

 

 

City of Portland Maine, RB, General (AGM), 5.25%,
1/01/35

 

 

2,795

 

 

2,891,427

 









Michigan — 11.0%

 

 

 

 

 

 

 

City of Detroit Michigan, RB:

 

 

 

 

 

 

 

Second Lien, Series B (NPFGC), 5.50%, 7/01/29

 

 

4,170

 

 

4,274,625

 

Senior Lien, Series B (AGM), 7.50%, 7/01/33

 

 

2,500

 

 

3,010,175

 

City of Detroit Michigan, Refunding RB:

 

 

 

 

 

 

 

Second Lien, Series C (BHAC), 5.75%, 7/01/27

 

 

2,600

 

 

2,841,566

 

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

 

 

5,060

 

 

5,407,723

 

Senior Lien, Series C-1 (AGM), 7.00%, 7/01/27

 

 

4,180

 

 

4,886,963

 

Senior Lien, Series C-2 (BHAC), 5.25%, 7/01/29

 

 

1,860

 

 

1,926,923

 

Michigan State Building Authority, Refunding RB,
Facilities Program, Series I (AGC):

 

 

 

 

 

 

 

5.25%, 10/15/24

 

 

1,440

 

 

1,568,621

 

5.25%, 10/15/25

 

 

750

 

 

809,580

 

Michigan Strategic Fund, Refunding RB, AMT, Detroit
Edison Co. (Syncora):

 

 

 

 

 

 

 

Pollution, Series C, 5.65%, 9/01/29

 

 

2,935

 

 

2,939,432

 

Project, Series A, 5.50%, 6/01/30

 

 

2,000

 

 

1,950,360

 

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

 

 

3,115

 

 

3,719,559

 

 

 

 

 

 



 

 

 

 

 

 

 

33,335,527

 









Minnesota — 0.7%

 

 

 

 

 

 

 

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

 

 

1,975

 

 

2,220,947

 









Nevada — 2.0%

 

 

 

 

 

 

 

County of Clark Nevada, RB, Las Vegas-McCarran
International Airport, Series A (AGC), 5.25%, 7/01/39

 

 

5,765

 

 

5,880,646

 

Nevada Housing Division, Refunding RB, S/F Mortgage,
Mezzanine, Series A-2, AMT (NPFGC), 6.30%, 4/01/22

 

 

95

 

 

96,516

 

 

 

 

 

 



 

 

 

 

 

 

 

5,977,162

 









New Jersey — 6.0%

 

 

 

 

 

 

 

New Jersey EDA, RB, Motor Vehicle Surcharge, Series A
(NPFGC), 5.25%, 7/01/33

 

 

11,000

 

 

11,209,880

 

New Jersey Health Care Facilities Financing Authority,
RB, Virtua Health (AGC), 5.50%, 7/01/38

 

 

3,400

 

 

3,629,364

 

New Jersey Transportation Trust Fund Authority, RB,
Transportation System, Series A (AGC), 5.63%,
12/15/28

 

 

2,930

 

 

3,292,470

 

 

 

 

 

 



 

 

 

 

 

 

 

18,131,714

 









New York — 0.8%

 

 

 

 

 

 

 

New York City Transitional Finance Authority, RB, Fiscal
2009, Series S-3, 5.25%, 1/15/39

 

 

2,300

 

 

2,460,264

 









North Carolina — 0.3%

 

 

 

 

 

 

 

North Carolina HFA, RB, Home Ownership, Series 14A,
AMT (AMBAC), 5.35%, 1/01/22

 

 

1,060

 

 

1,067,314

 









Pennsylvania — 2.0%

 

 

 

 

 

 

 

Delaware River Port Authority, RB, Series D (AGC),
5.00%, 1/01/40

 

 

3,000

 

 

3,083,850

 

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

 

 

3,000

 

 

3,151,200

 

 

 

 

 

 



 

 

 

 

 

 

 

6,235,050

 










 

 

 

 

See Notes to Financial Statements.


 

ANNUAL REPORT

JULY 31, 2010

11




 

 


 

 

Schedule of Investments (continued)

BlackRock MuniHoldings Insured Fund II, Inc. (MUE)

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 









Puerto Rico — 1.3%

 

 

 

 

 

 

 

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

 

$

3,500

 

$

3,864,140

 









South Carolina — 5.5%

 

 

 

 

 

 

 

South Carolina State Housing Finance & Development
Authority, Refunding RB, Series A-2, AMT (AGM),
6.35%, 7/01/19

 

 

960

 

 

973,920

 

South Carolina State Public Service Authority, RB,
Series A (AMBAC), 5.00%, 1/01/42

 

 

15,000

 

 

15,600,150

 

 

 

 

 

 



 

 

 

 

 

 

 

16,574,070

 









Texas — 19.1%

 

 

 

 

 

 

 

City of Austin Texas, Refunding RB, Series A (AGM):

 

 

 

 

 

 

 

5.00%, 11/15/28

 

 

1,795

 

 

1,921,637

 

5.00%, 11/15/29

 

 

2,270

 

 

2,414,486

 

City of Dallas Texas, Refunding RB (AGC), 5.25%,
8/15/38

 

 

2,100

 

 

2,181,102

 

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

 

 

6,700

 

 

7,711,365

 

County of Bexar Texas, RB, Venue Project, Motor Vehicle
Rental (BHAC), 5.00%, 8/15/39

 

 

1,805

 

 

1,867,760

 

Harris County Health Facilities Development Corp.,
Refunding RB, Memorial Hermann Healthcare System,
Series B, 7.25%, 12/01/35

 

 

1,000

 

 

1,137,870

 

Lower Colorado River Authority, Refunding RB, LCRA
Transmission Services Project (AGC), 5.50%, 5/15/36

 

 

2,935

 

 

3,124,043

 

Lubbock Cooper ISD Texas, GO, School Building (AGC),
5.75%, 2/15/42

 

 

1,250

 

 

1,348,738

 

North Texas Tollway Authority, RB, System, First Tier,
Series K-2 (AGC), 6.00%, 1/01/38

 

 

1,000

 

 

1,113,750

 

North Texas Tollway Authority, Refunding RB System,
First Tier (NPFGC):

 

 

 

 

 

 

 

5.75%, 1/01/40

 

 

14,750

 

 

15,353,865

 

Series A, 5.13%, 1/01/28

 

 

3,950

 

 

4,066,446

 

Series A, 5.63%, 1/01/33

 

 

10,975

 

 

11,471,399

 

Series B, 5.75%, 1/01/40

 

 

1,000

 

 

1,040,940

 

Tarrant County Cultural Education Facilities Finance
Corp., Refunding RB, Christus Health, Series A (AGC),
6.50%, 7/01/37

 

 

3,000

 

 

3,293,040

 

 

 

 

 

 



 

 

 

 

 

 

 

58,046,441

 









Utah — 1.4%

 

 

 

 

 

 

 

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

 

 

4,085

 

 

4,180,385

 









Virginia — 0.8%

 

 

 

 

 

 

 

Virginia Public School Authority, RB, School Financing,
6.50%, 12/01/35

 

 

2,195

 

 

2,548,505

 









Washington — 1.9%

 

 

 

 

 

 

 

Chelan County Public Utility District No. 1, RB,
Chelan Hydro System, Series A, AMT (AMBAC),
5.45%, 7/01/37

 

 

3,840

 

 

3,839,808

 

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

 

 

1,830

 

 

1,916,687

 

 

 

 

 

 



 

 

 

 

 

 

 

5,756,495

 









Total Municipal Bonds — 115.8%

 

 

 

 

 

351,762,904

 









 

 

 

 

 

 

 

 









 

 

 

 

 

 

 

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (c)

 

 

 

 

 

 

 









Alabama — 1.3%

 

 

 

 

 

 

 

Mobile Board of Water & Sewer Commissioners, RB
(NPFGC), 5.00%, 1/01/31

 

 

3,750

 

 

3,821,100

 










 

 

 

 

 

 

 

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (c)

 

Par
(000)

 

Value

 









California — 3.6%

 

 

 

 

 

 

 

City of San Jose California, GO, Libraries, Parks, and
Public Safety Project (NPFGC), 5.00%, 9/01/30

 

$

3,805

 

$

3,932,669

 

San Diego Community College District California,
GO, Election of 2002 (AGM), 5.00%, 5/01/30

 

 

1,486

 

 

1,531,262

 

Sequoia Union High School District California, GO,
Refunding, Election of 2004, Series B (AGM),
5.50%, 7/01/35

 

 

5,189

 

 

5,450,384

 

 

 

 

 

 



 

 

 

 

 

 

 

10,914,315

 









Colorado — 3.1%

 

 

 

 

 

 

 

Colorado Health Facilities Authority, RB, Catholic
Health, Series C-3 (AGM), 5.10%, 10/01/41

 

 

9,410

 

 

9,535,435

 









District of Columbia — 0.6%

 

 

 

 

 

 

 

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

 

 

1,700

 

 

1,921,227

 









Florida — 7.9%

 

 

 

 

 

 

 

City of St. Petersburg Florida, Refunding RB (NPFGC),
5.00%, 10/01/35

 

 

6,493

 

 

6,560,241

 

County of Miami-Dade Florida, GO, Building
Better Communities Program, Series B-1,
6.00%, 7/01/38

 

 

12,500

 

 

13,966,375

 

Lee County Housing Finance Authority, RB,
Multi-County Program, Series A-2, AMT
(Ginnie Mae), 6.00%, 9/01/40

 

 

3,000

 

 

3,309,570

 

 

 

 

 

 



 

 

 

 

 

 

 

23,836,186

 









Georgia — 2.2%

 

 

 

 

 

 

 

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

 

 

6,290

 

 

6,564,307

 









Illinois — 6.4%

 

 

 

 

 

 

 

City of Chicago Illinois, RB, Series A, (AGM), 5.00%,
1/01/33

 

 

15,000

 

 

15,179,175

 

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

 

 

3,969

 

 

4,230,986

 

 

 

 

 

 



 

 

 

 

 

 

 

19,410,161

 









Kentucky — 0.8%

 

 

 

 

 

 

 

Kentucky State Property & Building Commission,
Refunding RB, Project No. 93 (AGC),
5.25%, 2/01/27

 

 

2,304

 

 

2,519,346

 









Massachusetts — 1.7%

 

 

 

 

 

 

 

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

 

 

4,994

 

 

5,238,548

 









Nevada — 6.7%

 

 

 

 

 

 

 

Clark County Water Reclamation District, GO:

 

 

 

 

 

 

 

Limited Tax, 6.00%, 7/01/38

 

 

10,000

 

 

11,237,500

 

Series B, 5.50%, 7/01/29

 

 

8,247

 

 

9,128,661

 

 

 

 

 

 



 

 

 

 

 

 

 

20,366,161

 









New Jersey — 1.4%

 

 

 

 

 

 

 

New Jersey State Housing & Mortgage Finance Agency,
RB, S/F Housing, Series CC, 5.25%, 10/01/29

 

 

3,941

 

 

4,102,214

 









New York — 2.4%

 

 

 

 

 

 

 

Sales Tax Asset Receivable Corp., RB, Series A
(AMBAC), 5.25%, 10/15/27

 

 

6,751

 

 

7,349,069

 









Washington — 2.5%

 

 

 

 

 

 

 

City of Bellevue Washington, GO, Refunding (NPFGC),
5.50%, 12/01/39

 

 

6,883

 

 

7,601,709

 









Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 40.6%

 

 

 

 

 

123,179,778

 









Total Long-Term Investments
(Cost — $460,007,768) — 156.4%

 

 

 

 

 

474,942,682

 










 

 

 

 

See Notes to Financial Statements.


12

ANNUAL REPORT

JULY 31, 2010

 




 

 


 

 

Schedule of Investments (concluded)

BlackRock MuniHoldings Insured Fund II, Inc. (MUE)

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Short-Term Securities

 

Par
(000)

 

Value

 









Florida — 0.4%

 

 

 

 

 

 

 

Jacksonville Health Facilities Authority VRDN, 0.25%,
8/02/10 (d)

 

$

1,115

 

$

1,115,000

 









 

 

 

 

 

 

 

 

 

Shares

 

 

 

 









Money Market Fund — 5.7%

 

 

 

 

 

 

 

FFI Institutional Tax-Exempt Fund, 0.21% (e)(f)

 

 

17,366,850

 

 

17,366,850

 









Total Short-Term Securities
(Cost — $18,481,850) — 6.1%

 

 

 

 

 

18,481,850

 









Total Investments (Cost — $478,489,618*) — 162.5%

 

 

 

 

 

493,424,532

 

Other Assets Less Liabilities — 1.3%

 

 

 

 

 

3,986,834

 

Liability for Trust Certificates, Including
Interest Expense and Fees Payable — (20.7)%

 

 

 

 

 

(62,737,649

)

Preferred Shares, at Redemption Value — (43.1)%

 

 

 

 

 

(131,006,425

)

 

 

 

 

 



 

Net Assets Applicable to Common Shares — 100.0%

 

 

 

 

$

303,667,292

 

 

 

 

 

 



 


 

 

 


*

The cost and unrealized appreciation (depreciation) of investments as of July 31, 2010, as computed for federal income tax purposes, were as follows:


 

 

 

 

 

Aggregate cost

 

$

415,974,538

 

 

 



 

Gross unrealized appreciation

 

$

17,911,774

 

Gross unrealized depreciation

 

 

(3,154,714

)

 

 



 

Net unrealized appreciation

 

$

14,757,060

 

 

 



 


 

 

(a)

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.

 

 

(b)

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

 

 

(c)

Securities represent bonds transferred to a tender option bond trust 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 tender option bond trusts.

 

 

(d)

Variable rate security. Rate shown is as of report date and maturity shown is the date the principal owed can be recovered through demand.

 

 

(e)

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 at
July 31,
2009

 

Net
Activity

 

Shares at
July 31,
2010

 

Income

 















FFI Institutional
Tax-Exempt Fund

 

 

17,593,090

 

 

(226,240

)

 

17,366,850

 

$

20,203

 
















 

 

(f)

Represents the current yield as of report date.


 

 

 

Fair Value Measurements — Various inputs are used in determining the fair value of investments, which are 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)

 

 

 

 

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 other significant accounting policies, please refer to Note 1 of the Notes to Financial Statements.

 

 

 

 

The following table summarizes the inputs used as of July 31, 2010 in determining the fair valuation of the Fund’s investments:


 

 

 

 

 

 

 

 

 

 

 

 

 

 











Valuation Inputs

 

Level 1

 

Level 2

 

Level 3

 

Total

 















Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments in
Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-Term
Investments1

 

 

 

$

474,942,682

 

 

 

$

474,942,682

 

Short-Term
Securities

 

$

17,366,850

 

 

1,115,000

 

 

 

 

18,481,850

 

 

 













Total

 

$

17,366,850

 

$

476,057,682

 

 

 

$

493,424,532

 

 

 














 

 

 

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


 

 

 

 

See Notes to Financial Statements.


 

ANNUAL REPORT

JULY 31, 2010

13




 

 


 

 

Schedule of Investments July 31, 2010

BlackRock MuniYield California Insured Fund, Inc. (MCA)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 









California — 90.1%

 

 

 

 

 

 

 









Corporate — 0.9%

 

 

 

 

 

 

 

City of Chula Vista California, Refunding RB, San Diego
Gas & Electric, Series A, 5.88%, 2/15/34

 

$

2,435

 

$

2,691,674

 

University of California, RB, Limited Project, Series B
(AGM), 5.00%, 5/15/33

 

 

1,740

 

 

1,774,765

 

 

 

 

 

 



 

 

 

 

 

 

 

4,466,439

 









County/City/Special District/
School District — 50.2%

 

 

 

 

 

 

 

Arcadia Unified School District California, GO,
Election of 2006, Series A (AGM), 5.00%, 8/01/37

 

 

9,000

 

 

9,200,340

 

Bay Area Governments Association, Refunding RB,
California Redevelopment Agency Pool, Series A
(AGM), 6.00%, 12/15/24

 

 

255

 

 

259,452

 

Brentwood Infrastructure Financing Authority California,
Special Assessment Bonds, Refunding, Series A
(AGM), 5.20%, 9/02/29

 

 

3,980

 

 

4,032,417

 

Central Unified School District, GO, Election of 2008,
Series A (AGC), 5.50%, 8/01/29

 

 

2,000

 

 

2,186,960

 

Chabot-Las Positas Community College District
California, GO, CAB, Election of 2004, Series 4-B
(AMBAC), 5.17%, 8/01/26 (a)

 

 

6,705

 

 

2,608,245

 

Chino Basin Desalter Authority, Refunding RB, Series A
(AGC), 5.00%, 6/01/35

 

 

1,305

 

 

1,322,644

 

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

 

 

3,000

 

 

3,064,770

 

City of Riverside California, COP (AMBAC), 5.00%,
9/01/28

 

 

3,000

 

 

3,025,440

 

City of San Jose California, GO, Libraries, Parks, and
Public Safety Project (NPFGC), 5.00%, 9/01/27

 

 

7,910

 

 

8,239,847

 

County of Kern California, COP, Capital Improvements
Projects, Series A (AGC), 6.00%, 8/01/35

 

 

2,000

 

 

2,227,960

 

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

 

 

2,500

 

 

2,647,225

 

Fontana Unified School District California, GO, Series A
(AGM), 5.25%, 8/01/31

 

 

3,000

 

 

3,144,840

 

Fremont Unified School District Alameda County
California, GO, Series A (NPFGC), 5.50%, 8/01/26

 

 

10,755

 

 

11,381,049

 

Fresno Joint Powers Financing Authority California, RB,
Series A (AGM), 5.75%, 6/01/26

 

 

3,295

 

 

3,389,336

 

Glendora Unified School District California, GO,
Election of 2005, Series A (NPFGC):

 

 

 

 

 

 

 

5.00%, 8/01/27

 

 

1,350

 

 

1,430,271

 

5.25%, 8/01/30

 

 

2,730

 

 

2,889,596

 

Los Angeles Community Redevelopment Agency
California, RB, Bunker Hill Project, Series A (AGM),
5.00%, 12/01/27

 

 

10,000

 

 

10,166,800

 

Los Angeles County Metropolitan Transportation
Authority, Refunding RB, Proposition A, First Tier,
Senior Series A (AMBAC):

 

 

 

 

 

 

 

5.00%, 7/01/27

 

 

5,240

 

 

5,546,068

 

5.00%, 7/01/35

 

 

6,825

 

 

7,062,100

 

Los Angeles Municipal Improvement Corp., Refunding
RB, Real Property, Series B (AGC), 5.50%, 4/01/39

 

 

1,500

 

 

1,585,635

 

Los Angeles Unified School District California, GO:

 

 

 

 

 

 

 

Election of 2002, Series C (AGM), 5.00%, 7/01/32

 

 

10,000

 

 

10,204,700

 

Election of 2004, Series F (FGIC), 5.00%, 7/01/30

 

 

5,000

 

 

5,066,200

 

Los Gatos Union School District California, GO,
Election of 2001, Series C (NPFGC), 5.13%, 8/01/32

 

 

1,075

 

 

1,103,832

 

Merced Community College District California, GO,
School Facilities Improvement District No. 1 (NPFGC),
5.00%, 8/01/31

 

 

6,850

 

 

6,906,512

 

 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 









California (continued)

 

 

 

 

 

 

 









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

 

 

 

 

 

 

 

Murrieta Valley Unified School District Public Financing
Authority, Special Tax Bonds, Refunding, Series A
(AGC), 5.13%, 9/01/26

 

$

8,000

 

$

8,477,200

 

Orange County Water District, COP, Refunding, 5.25%,
8/15/34

 

 

9,045

 

 

9,671,004

 

Orchard School District California, GO, Election of 2001,
Series A (AGC), 5.00%, 8/01/34

 

 

7,490

 

 

7,658,899

 

Oxnard Union High School District California, GO,
Refunding, Series A (NPFGC), 6.20%, 8/01/30

 

 

9,645

 

 

10,422,483

 

Peralta Community College District California, GO,
Peralta Community College (AGM), 5.00%, 8/01/37

 

 

6,195

 

 

6,341,945

 

Pittsburg Unified School District, GO, Election of 2006,
Series B (AGM):

 

 

 

 

 

 

 

5.50%, 8/01/34

 

 

2,000

 

 

2,131,780

 

5.63%, 8/01/39

 

 

4,500

 

 

4,830,795

 

Port of Oakland, Refunding RB, Series M, AMT (NPFGC),
5.38%, 11/01/27

 

 

16,930

 

 

16,944,560

 

Redlands Unified School District California, GO,
Election of 2008 (AGM), 5.25%, 7/01/33

 

 

5,000

 

 

5,210,100

 

Riverside Unified School District California, GO,
Series C (AGC), 5.00%, 8/01/32

 

 

5,010

 

 

5,126,082

 

Saddleback Valley Unified School District California,
GO (AGM), 5.00%, 8/01/29

 

 

2,565

 

 

2,634,178

 

San Bernardino City Unified School District California,
GO, Series A (AGM), 5.00%, 8/01/28

 

 

5,000

 

 

5,131,150

 

San Diego Community College District California, GO,
Election of 2006 (AGM), 5.00%, 8/01/32

 

 

7,090

 

 

7,356,938

 

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

 

 

1,115

 

 

1,152,542

 

San Jose Redevelopment Agency California, Tax
Allocation Bonds, Housing Set Aside Merged Area,
Series E, AMT (NPFGC), 5.85%, 8/01/27

 

 

7,300

 

 

7,325,404

 

San Juan Unified School District California, GO,
Election of 2002:

 

 

 

 

 

 

 

(AGM), 5.00%, 8/01/34

 

 

6,475

 

 

6,654,617

 

(NPFGC), 5.00%, 8/01/28

 

 

4,250

 

 

4,362,030

 

San Mateo County Transportation District California,
Refunding RB, Series A (NPFGC), 5.00%, 6/01/29

 

 

4,350

 

 

4,547,099

 

Santa Rosa High School District California, GO,
Election of 2002 (NPFGC), 5.00%, 8/01/28

 

 

2,500

 

 

2,526,350

 

Snowline Joint Unified School District, COP, Refunding,
Refining Project (AGC), 5.75%, 9/01/38

 

 

5,600

 

 

6,240,864

 

South Tahoe Joint Powers Financing Authority, RB,
South Tahoe Redevelopment Project Area No. 1,
Series A (AGM), 5.00%, 10/01/29

 

 

1,645

 

 

1,661,516

 

Ventura County Community College District, GO,
Refunding, Series A (NPFGC), 5.00%, 8/01/27

 

 

3,395

 

 

3,562,170

 

Vista Unified School District California, GO,
Series B (NPFGC), 5.00%, 8/01/28

 

 

2,550

 

 

2,617,218

 

West Contra Costa Unified School District
California, GO, Election of 2002, Series B
(AGM), 5.00%, 8/01/32

 

 

6,690

 

 

6,693,746

 

Westminster Redevelopment Agency California,
Tax Allocation Bonds, Subordinate,
Commercial Redevelopment Project No. 1
(AGC), 6.25%, 11/01/39

 

 

4,300

 

 

4,918,985

 

 

 

 

 

 



 

 

 

 

 

 

 

252,891,894

 










 

 

 

See Notes to Financial Statements.

 




14

ANNUAL REPORT

JULY 31, 2010




 

 


 

 

Schedule of Investments (continued)

BlackRock MuniYield California Insured Fund, Inc. (MCA)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 









California (continued)

 

 

 

 

 

 

 









Education — 4.4%

 

 

 

 

 

 

 

Chaffey Community College District, GO, Election
of 2002, Series C (NPFGC):

 

 

 

 

 

 

 

5.00%, 6/01/27

 

$

1,000

 

$

1,041,630

 

5.00%, 6/01/32

 

 

1,600

 

 

1,639,904

 

Escondido Union High School District, COP (AGM),
5.00%, 6/01/37

 

 

1,250

 

 

1,238,975

 

Riverside Community College District, GO, Election
of 2004, Series C (AGM), 5.00%, 8/01/32

 

 

8,750

 

 

9,010,313

 

University of California, RB, Limited Project, Series D:

 

 

 

 

 

 

 

(AGM), 5.00%, 5/15/37

 

 

2,775

 

 

2,871,653

 

(NPFGC), 5.00%, 5/15/37

 

 

5,340

 

 

5,510,186

 

(NPFGC), 5.00%, 5/15/41

 

 

1,000

 

 

1,026,560

 

 

 

 

 

 



 

 

 

 

 

 

 

22,339,221

 









Health — 2.6%

 

 

 

 

 

 

 

California Health Facilities Financing Authority,
Refunding RB, Catholic Healthcare West, Series A:

 

 

 

 

 

 

 

6.00%, 7/01/34

 

 

2,130

 

 

2,295,970

 

6.00%, 7/01/39

 

 

5,500

 

 

5,895,725

 

California Statewide Communities Development
Authority, RB, Health Facility, Memorial Health
Services, Series A, 6.00%, 10/01/23

 

 

3,685

 

 

3,853,146

 

California Statewide Communities Development
Authority, Refunding RB, Catholic Healthcare West,
Series D (BHAC), 5.50%, 7/01/31

 

 

1,010

 

 

1,067,600

 

 

 

 

 

 



 

 

 

 

 

 

 

13,112,441

 









Housing — 0.1%

 

 

 

 

 

 

 

California Rural Home Mortgage Finance Authority,
RB, AMT, Mortgage-Backed Securities
Program (Ginnie Mae):

 

 

 

 

 

 

 

Series A, 6.35%, 12/01/29

 

 

100

 

 

108,923

 

Series B, 6.25%, 12/01/31

 

 

70

 

 

70,773

 

County of San Bernardino California, Refunding RB,
Home Mortgage-Backed Securities, Series A-1, AMT
(Ginnie Mae), 6.25%, 12/01/31

 

 

140

 

 

146,070

 

 

 

 

 

 



 

 

 

 

 

 

 

325,766

 









State — 4.0%

 

 

 

 

 

 

 

California State Public Works Board, RB, Department
of Education, Riverside Campus Project, Series B,
6.50%, 4/01/34

 

 

3,500

 

 

3,768,450

 

State of California, GO, Various Purpose:

 

 

 

 

 

 

 

6.00%, 3/01/33

 

 

5,000

 

 

5,412,500

 

6.50%, 4/01/33

 

 

9,875

 

 

11,105,524

 

 

 

 

 

 



 

 

 

 

 

 

 

20,286,474

 









Transportation — 11.2%

 

 

 

 

 

 

 

City of San Jose California, RB, Series D (NPFGC),
5.00%, 3/01/28

 

 

4,575

 

 

4,610,639

 

County of Orange California, RB, Series B, 5.75%,
7/01/34

 

 

5,000

 

 

5,445,350

 

County of Sacramento California, RB:

 

 

 

 

 

 

 

Senior-Series B AMT (AGM), 5.25%, 7/01/33

 

 

7,500

 

 

7,514,100

 

Subordinated and PFC/Grant, Series C (AGC),
5.75%, 7/01/39

 

 

5,380

 

 

5,786,567

 

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

 

 

11,405

 

 

11,405,570

 

 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 









California (concluded)

 

 

 

 

 

 

 









Transportation (concluded)

 

 

 

 

 

 

 

San Francisco City & County Airports Commission, RB:

 

 

 

 

 

 

 

Series E, 6.00%, 5/01/39

 

$

9,650

 

$

10,657,556

 

Special Facility Lease, SFO Fuel, Series A AMT
(AGM), 6.10%, 1/01/20

 

 

1,000

 

 

1,001,830

 

Special Facility Lease, SFO Fuel, Series A AMT
(AGM), 6.13%, 1/01/27

 

 

985

 

 

986,015

 

San Francisco City & County Airports Commission,
Refunding RB, Second Series 34E, AMT (AGM):

 

 

 

 

 

 

 

5.75%, 5/01/24

 

 

5,000

 

 

5,411,650

 

5.75%, 5/01/25

 

 

3,500

 

 

3,762,080

 

 

 

 

 

 



 

 

 

 

 

 

 

56,581,357

 









Utilities — 16.7%

 

 

 

 

 

 

 

Castaic Lake Water Agency, COP, Refunding, 2001
Project, Series A (AGM), 5.00%, 8/01/30

 

 

1,000

 

 

1,030,160

 

City of Glendale California, RB (NPFGC), 5.00%,
2/01/32

 

 

4,390

 

 

4,431,047

 

City of Santa Clara California, RB, Sub-Series A
(NPFGC), 5.00%, 7/01/28

 

 

5,500

 

 

5,556,265

 

Contra Costa Water District, Refunding RB:

 

 

 

 

 

 

 

Series L (AGM), 5.00%, 10/01/32

 

 

4,135

 

 

4,269,718

 

Series O (AMBAC), 5.00%, 10/01/24

 

 

1,735

 

 

1,866,201

 

East Bay Municipal Utility District, RB, Series A (NPFGC),
5.00%, 6/01/37

 

 

6,500

 

 

6,813,755

 

East Bay Municipal Utility District, Refunding RB,
Sub-Series A (AMBAC), 5.00%, 6/01/33

 

 

4,125

 

 

4,344,161

 

El Centro Financing Authority California, RB, Series A
(AGM), 5.25%, 10/01/35

 

 

1,100

 

 

1,106,248

 

Fortuna Public Financing Authority, RB (AGM), 5.00%,
10/01/36

 

 

1,500

 

 

1,507,005

 

Los Angeles Department of Water & Power, RB, Power
System, Sub-Series A-1 (AGM):

 

 

 

 

 

 

 

5.00%, 7/01/35

 

 

3,000

 

 

3,088,110

 

5.00%, 7/01/37

 

 

13,500

 

 

13,937,535

 

Metropolitan Water District of Southern California, RB,
Series B-1 (NPFGC), 5.00%, 10/01/33

 

 

7,175

 

 

7,384,079

 

Oxnard Financing Authority, RB, Redwood Trunk Sewer &
Headworks, Series A (NPFGC), 5.25%, 6/01/34

 

 

13,000

 

 

13,210,990

 

Sacramento Regional County Sanitation District, RB,
Sacramento Regional County Sanitation (NPFGC),
5.00%, 12/01/27

 

 

7,070

 

 

7,408,158

 

San Diego County Water Authority, COP, Series A (AGM),
5.00%, 5/01 /31

 

 

3,000

 

 

3,080,130

 

Turlock Public Financing Authority California, RB,
Series A (NPFGC), 5.00%, 9/15/33

 

 

3,000

 

 

3,041,370

 

Vallecitos Water District California, COP, Refunding,
Series A (AGM), 5.00%, 7/01/27

 

 

2,000

 

 

2,082,960

 

 

 

 

 

 



 

 

 

 

 

 

 

84,157,892

 









Total Municipal Bonds — 90.1%

 

 

 

 

 

454,161,484

 










 

 

 

See Notes to Financial Statements.

 


ANNUAL REPORT

JULY 31, 2010

15




 

 


 

 

Schedule of Investments (continued)

BlackRock MuniYield California Insured Fund, Inc. (MCA)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (b)

 

Par
(000)

 

Value

 









California — 67.7%

 

 

 

 

 

 

 









Corporate — 5.6%

 

 

 

 

 

 

 

San Francisco Bay Area Rapid Transit District, Refunding
RB, Series A (NPFGC), 5.00%, 7/01/30

 

$

19,630

 

$

20,596,385

 

University of California, RB, Series L, 5.00%, 5/15/40

 

 

7,398

 

 

7,620,716

 

 

 

 

 

 



 

 

 

 

 

 

 

28,217,101

 









County/City/Special District/
School District — 32.4%

 

 

 

 

 

 

 

Desert Community College District California, GO,
Series C (AGM), 5.00%, 8/01/37

 

 

12,150

 

 

12,387,168

 

Fremont Unified School District Alameda County
California, GO, Election of 2002, Series B (AGM),
5.00%, 8/01/30

 

 

15,997

 

 

16,452,840

 

Lodi Unified School District California, GO, Election of
2002 (AGM), 5.00%, 8/01/29

 

 

10,260

 

 

10,428,469

 

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

 

 

 

 

 

 

 

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

 

 

12,000

 

 

12,313,440

 

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

 

 

26,438

 

 

27,080,496

 

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

 

 

9,596

 

 

10,826,270

 

Los Angeles Unified School District California, GO,
Series I, 5.00%, 1/01/34

 

 

5,000

 

 

5,104,400

 

Ohlone Community College District, GO, Ohlone,
Series B (AGM), 5.00%, 8/01/30

 

 

19,998

 

 

20,567,660

 

Poway Unified School District, GO, Election of 2002,
Improvement District 02, Series 1-B (AGM), 5.00%,
8/01/30

 

 

10,000

 

 

10,297,600

 

San Bernardino Community College District California,
GO, Election of 2002, Series C (AGM), 5.00%, 8/01/31

 

 

7,550

 

 

7,770,687

 

San Diego County Water Authority, COP, Series A (AGM),
5.00%, 5/01/30

 

 

7,350

 

 

7,565,355

 

San Francisco Bay Area Transit Financing Authority,
Refunding RB, Series A (NPFGC), 5.00%, 7/01/34

 

 

10,497

 

 

10,904,287

 

San Jose Financing Authority, Refunding RB, Civic
Center Project, Series B (AMBAC), 5.00%, 6/01/32

 

 

11,400

 

 

11,456,772

 

 

 

 

 

 



 

 

 

 

 

 

 

163,155,444

 









Education — 6.7%

 

 

 

 

 

 

 

California State University, RB, Systemwide, Series A
(AGM), 5.00%, 11/01/39

 

 

4,860

 

 

4,911,905

 

Los Angeles Community College District California, GO,
Election of 2003, Series E (AGM), 5.00%, 8/01/31

 

 

7,497

 

 

7,692,763

 

University of California, RB:

 

 

 

 

 

 

 

Limited Project, Series D (AGM), 5.00%, 5/15/41

 

 

8,000

 

 

8,236,000

 

Series O, 5.75%, 5/15/34

 

 

11,190

 

 

12,637,538

 

 

 

 

 

 



 

 

 

 

 

 

 

33,478,206

 









Utilities — 23.0%

 

 

 

 

 

 

 

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

 

 

3,568

 

 

3,585,381

 

City of Napa California, RB (AMBAC), 5.00%, 5/01/35

 

 

9,070

 

 

9,336,295

 

East Bay Municipal Utility District, RB, Sub-Series A
(NPFGC), 5.00%, 6/01/35

 

 

15,000

 

 

15,546,000

 

East Bay Municipal Utility District, Refunding RB,
Sub-Series A (AMBAC), 5.00%, 6/01/37

 

 

7,990

 

 

8,375,677

 

Los Angeles Department of Water & Power, RB:

 

 

 

 

 

 

 

Power System, Sub-Series A-1 (AGM), 5.00%,
7/01/31

 

 

5,007

 

 

5,192,815

 

Power System, Sub-Series A-1 (AMBAC), 5.00%,
7/01/37

 

 

5,029

 

 

5,192,301

 

System, Sub-Series A-2 (AGM), 5.00%, 7/01/35

 

 

7,500

 

 

7,720,200

 

 

 

 

 

 

 

 

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (b)

 

Par
(000)

 

Value

 









California (concluded)

 

 

 

 

 

 

 









Utilities (concluded)

 

 

 

 

 

 

 

Los Angeles Department of Water & Power,
Refunding RB, Power System, Sub-Series A-2
(NPFGC), 5.00%, 7/01/27

 

$

16,000

 

$

16,688,640

 

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

 

 

15,000

 

 

15,796,500

 

Rancho Water District Financing Authority,
Refunding RB, Series A (AGM), 5.00%, 8/01/34

 

 

9,277

 

 

9,566,845

 

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

 

 

8,510

 

 

8,836,103

 

San Diego County Water Authority, COP, Series A
(AGM), 5.00%, 5/01/31

 

 

10,000

 

 

10,267,100

 

 

 

 

 

 



 

 

 

 

 

 

 

116,103,857

 









Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 67.7%

 

 

 

 

 

340,954,608

 









Total Long-Term Investments
(Cost — $778,127,360) — 157.8%

 

 

 

 

 

795,116,092

 









 

 

 

 

 

 

 

 


 

 

 

 

 

 

 

 

Short-Term Securities

 

Shares

 

 

 

 









BIF California Municipal Money Fund, 0.04%, (c)(d)

 

 

39,049,939

 

 

39,049,939

 









Total Short-Term Securities
(Cost — $39,049,939) — 7.8%

 

 

 

 

 

39,049,939

 









Total Investments (Cost — $817,177,299*) — 165.6%

 

 

 

 

 

834,166,031

 

Other Assets Less Liabilities — 1.5%

 

 

 

 

 

7,479,248

 

Liability for Trust Certificates, Including
Interest Expense and Fees Payable — (34.0)%

 

 

 

 

 

(171,228,214

)

Preferred Shares, at Redemption Value — (33.1)%

 

 

 

 

 

(166,548,530

)

 

 

 

 

 



 

Net Assets Applicable to Common Shares — 100.0%

 

 

 

 

$

503,868,535

 

 

 

 

 

 



 


 

 

 


*

The cost and unrealized appreciation (depreciation) of investments as of July 31, 2010, as computed for federal income tax purposes, were as follows:


 

 

 

 

 

Aggregate cost

 

$

646,442,072

 

 

 



 

Gross unrealized appreciation

 

$

19,105,839

 

Gross unrealized depreciation

 

 

(2,519,301

)

 

 



 

Net unrealized appreciation

 

$

16,586,538

 

 

 



 


 

 

(a)

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

 

 

(b)

Securities represent bonds transferred to a tender option bond trust 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 tender option bond trusts.

 

 

(c)

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 at
July 31,
2009

 

Net
Activity

 

Shares at
July 31,
2010

 

Income

 











BIF California Municipal
Money Fund

 

 

21,941,944

 

 

17,107,995

 

 

39,049,939

 

$

5,332

 
















 

 

(d)

Represents the current yield as of report date.


 

 

 

See Notes to Financial Statements.

 




16

ANNUAL REPORT

JULY 31, 2010




 

 


 

 

Schedule of Investments (concluded)

BlackRock MuniYield California Insured Fund, Inc. (MCA)


 

 

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

 

 

Financial futures contracts sold as of July 31, 2010 were as follows:


 

 

 

 

 

 

 

 

 

 

 

 











Contracts

 

Issue

 

Expiration
Date

 

Notional
Value

 

Unrealized
Depreciation

 











     42

 

10-Year U.S.
Treasury Bond

 

September 2010

 

$

5,110,126

 

$

(89,999

)














 

 

 

Fair Value Measurements — Various inputs are used in determining the fair value of investments and derivatives, which are 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 derivatives)

 

 

 

 

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 other significant accounting policies, please refer to Note 1 of the Notes to Financial Statements.

 

 

 

 

The following tables summarize the inputs used as of July 31, 2010 in determining the fair valuation of the Fund’s investments and derivatives:


 

 

 

 

 

 

 

 

 

 

 

 

 

 















Valuation Inputs

 

Level 1

 

Level 2

 

Level 3

 

Total

 















Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments in
Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-Term
Investments1

 

 

 

$

795,116,092

 

 

 

$

795,116,092

 

Short-Term
Securities

 

$

39,049,939

 

 

 

 

 

 

39,049,939

 

 

 













Total

 

$

39,049,939

 

$

795,116,092

 

 

 

$

834,166,031

 

 

 














 

 

 

 

1

See above Schedule of Investments for values in each sector.


 

 

 

 

 

 

 

 

 

 

 

 

 

 



Derivative Financial Instruments2

 



Valuation Inputs

 

Level 1

 

Level 2

 

Level 3

 

Total

 











Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate
contracts

 

$

(89,999

)

 

 

 

 

$

(89,999

)

 

 














 

 

 

 

2

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


 

 

 

See Notes to Financial Statements.

 


ANNUAL REPORT

JULY 31, 2010

17




 

 



 

 

Schedule of Investments July 31, 2010

BlackRock MuniYield Insured Fund, Inc. (MYI)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 







Alabama — 0.4%

 

 

 

 

 

 

 

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

 

$

3,605

 

$

3,936,624

 









Alaska — 1.3%

 

 

 

 

 

 

 

Borough of Matanuska-Susitna Alaska, RB, Goose Creek
Correctional Center (AGC), 6.00%, 9/01/28

 

 

10,150

 

 

11,758,775

 









Arizona — 2.8%

 

 

 

 

 

 

 

Downtown Phoenix Hotel Corp., RB, Senior Series A
(FGIC), 5.00%, 7/01/36

 

 

21,355

 

 

17,882,463

 

Maricopa County & Phoenix Industrial Development
Authorities, Refunding RB, S/F, Series A-2, AMT
(Ginnie Mae), 5.80%, 7/01/40

 

 

2,430

 

 

2,476,826

 

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

 

 

 

 

 

 

 

5.00%, 10/01/27

 

 

3,725

 

 

3,835,223

 

5.25%, 10/01/28

 

 

1,600

 

 

1,663,632

 

 

 

 

 

 



 

 

 

 

 

 

 

25,858,144

 









California — 13.7%

 

 

 

 

 

 

 

Alameda Corridor Transportation Authority, Refunding
RB, CAB, Subordinate Lien, Series A (AMBAC),
5.47%, 10/01/24 (a)

 

 

10,000

 

 

8,232,400

 

California HFA, RB, Home Mortgage, Series K, AMT,
5.50%, 2/01/42

 

 

5,835

 

 

5,971,422

 

California Health Facilities Financing Authority,
Refunding RB, St. Joseph Health System, Series A,
5.75%, 7/01/39

 

 

1,550

 

 

1,621,409

 

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

 

 

9,865

 

 

9,980,519

 

California State University, Refunding RB, Systemwide,
Series A (AGM), 5.00%, 11/01/37

 

 

3,545

 

 

3,579,103

 

California Statewide Communities Development
Authority, RB (AGM):

 

 

 

 

 

 

 

St. Joseph Health System, Series E,
5.25%, 7/01/47

 

 

10,000

 

 

10,150,300

 

Sutter Health, Series D, 5.05%, 8/15/38

 

 

3,750

 

 

3,809,362

 

City of Redding California, COP, Refunding, Series A
(AGM), 5.00%, 6/01/30

 

 

1,900

 

 

1,950,673

 

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

 

 

11,965

 

 

12,155,722

 

County of Sacramento California, RB, Senior Series A
(AGM), 5.00%, 7/01/41

 

 

15,000

 

 

15,116,400

 

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

 

 

5,800

 

 

6,141,562

 

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

 

 

15,000

 

 

14,340,600

 

Mendocino-Lake Community College District, GO,
Election of 2006, Series A (NPFGC), 5.00%, 8/01/31

 

 

1,485

 

 

1,498,974

 

Norwalk-La Mirada Unified School District California,
GO, Refunding, CAB, Election of 2002, Series E
(AGC), 6.47%, 8/01/38 (b)

 

 

7,620

 

 

1,298,524

 

Oceanside Unified School District California, GO,
Series A (AGC), 5.25%, 8/01/33

 

 

2,500

 

 

2,592,525

 

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

 

 

3,645

 

 

3,645,182

 

Port of Oakland, Refunding RB, Series M, AMT (NPFGC),
5.38%, 11/01/27

 

 

7,530

 

 

7,536,476

 

Riverside County Public Financing Authority, Tax
Allocation Bonds, Redevelopment Projects (Syncora),
5.00%, 10/01/35

 

 

10,000

 

 

8,270,500

 

State of California, GO, Series 2007-2 (NPFGC),
5.50%, 4/01/30

 

 

10

 

 

10,132

 

Stockton Public Financing Authority California, RB,
Parking & Capital Projects (NPFGC), 5.25%, 9/01/34

 

 

5,000

 

 

4,899,350

 

West Valley-Mission Community College District, GO,
Election of 2004, Series A (AGM), 5.00%, 8/01/30

 

 

3,600

 

 

3,720,528

 

 

 

 

 

 



 

 

 

 

 

 

 

126,521,663

 









 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 







District of Columbia — 1.1%

 

 

 

 

 

 

 

Metropolitan Washington Airports Authority, RB,
Series B, AMT (AMBAC), 5.00%, 10/01/32

 

$

10,000

 

$

10,077,200

 









Florida — 16.4%

 

 

 

 

 

 

 

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

 

 

15,000

 

 

15,489,600

 

City of Orlando Florida, RB, Senior, 6th Cent Contract
Payments, Series A (AGC), 5.25%, 11/01/38

 

 

14,250

 

 

14,001,623

 

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

 

 

3,300

 

 

3,385,701

 

Collier County School Board, COP (AGM), 5.00%,
2/15/23

 

 

5,000

 

 

5,215,450

 

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

 

 

2,250

 

 

2,354,760

 

County of Miami-Dade Florida, GO, Building Better
Communities Program:

 

 

 

 

 

 

 

Series B, 6.38%, 7/01/28

 

 

6,000

 

 

6,882,120

 

Series B-1, 5.75%, 7/01/33

 

 

3,700

 

 

3,999,996

 

County of Miami-Dade Florida, RB:

 

 

 

 

 

 

 

Jackson Health System (AGC), 5.75%, 6/01/39

 

 

5,200

 

 

5,508,204

 

Miami International Airport, AMT (NPFGC),
5.38%, 10/01/25

 

 

10,650

 

 

10,719,438

 

Miami International Airport, AMT (NPFGC),
5.38%, 10/01/27

 

 

1,000

 

 

1,003,270

 

Miami International Airport, Series A, AMT
(AGM), 5.50%, 10/01/41

 

 

19,020

 

 

19,407,057

 

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

 

 

11,700

 

 

12,037,662

 

County of Miami-Dade Florida, Refunding RB:

 

 

 

 

 

 

 

(AGM), 5.00%, 7/01/35

 

 

2,800

 

 

2,866,052

 

Miami International Airport, AMT, (AGC), 5.00%,
10/01/40

 

 

11,000

 

 

10,715,100

 

Miami International Airport, AMT, Series A (AGC),
5.00%, 10/01/35

 

 

2,100

 

 

2,052,792

 

Series C (BHAC), 6.00%, 10/01/23

 

 

20,095

 

 

23,613,233

 

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

 

 

2,000

 

 

2,026,440

 

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

 

 

4,125

 

 

4,284,266

 

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

 

 

5,135

 

 

5,344,713

 

 

 

 

 

 



 

 

 

 

 

 

 

150,907,477

 









Georgia — 1.6%

 

 

 

 

 

 

 

City of Atlanta Georgia, RB, General, Series B (AGM),
5.25%, 1/01/33

 

 

12,500

 

 

12,846,500

 

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

 

 

2,275

 

 

2,328,008

 

 

 

 

 

 



 

 

 

 

 

 

 

15,174,508

 









Illinois — 15.0%

 

 

 

 

 

 

 

Chicago Board of Education Illinois, GO, Refunding,
CAB, School Reform, Series A (NPFGC), 5.39%,
12/01/22 (b)

 

 

10,515

 

 

5,865,582

 

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

 

 

 

 

 

 

 

5.25%, 1/01/27

 

 

16,685

 

 

16,850,348

 

6.00%, 1/01/27

 

 

26,230

 

 

27,286,020

 

City of Chicago Illinois, GO, CAB, City Colleges (NPFGC),
5.55%, 1/01/29 (b)

 

 

5,000

 

 

1,894,100

 

City of Chicago Illinois, GO, Refunding, Series B (AGM),
5.00%, 1/01/24

 

 

12,950

 

 

13,736,324

 

City of Chicago Illinois, Refunding ARB, General,
Third Lien, Series C-2, AMT (AGM), 5.25%, 1/01/30

 

 

16,400

 

 

16,455,104

 

County of Cook Illinois, GO, Refunding, Series A,
5.25%, 11/15/33

 

 

3,700

 

 

3,898,246

 

Illinois Finance Authority, Refunding RB, Northwestern
Memorial Hospital, Series A, 6.00%, 8/15/39

 

 

5,250

 

 

5,743,868

 


See Notes to Financial Statements.

 

 

 


18

ANNUAL REPORT

JULY 31, 2010




 

 



 

 

Schedule of Investments (continued)

BlackRock MuniYield Insured Fund, Inc. (MYI)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 







Illinois (concluded)

 

 

 

 

 

 

 

Illinois Municipal Electric Agency, RB, Series A (NPFGC):

 

 

 

 

 

 

 

5.00%, 2/01/35

 

$

21,200

 

$

21,636,084

 

5.25%, 2/01/35

 

 

15,000

 

 

15,406,950

 

Kane, Kendall, Etc. Counties Community College
District No. 516 Illinois, GO, CAB, Series E (NPFGC),
5.21%, 12/15/25 (b)

 

 

8,750

 

 

4,037,950

 

Regional Transportation Authority, RB, Series C (NPFGC),
7.75%, 6/01/20

 

 

1,000

 

 

1,300,980

 

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

 

 

3,500

 

 

3,617,635

 

 

 

 

 

 



 

 

 

 

 

 

 

137,729,191

 









Indiana — 1.7%

 

 

 

 

 

 

 

City of Indianapolis Indiana, Refunding RB,
Second Lien, Series B (AGC), 5.25%, 8/15/27

 

 

5,000

 

 

5,397,550

 

Indiana Municipal Power Agency, RB:

 

 

 

 

 

 

 

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

 

 

9,200

 

 

9,330,732

 

Series B, 5.75%, 1/01/34

 

 

1,050

 

 

1,120,235

 

 

 

 

 

 



 

 

 

 

 

 

 

15,848,517

 









Iowa — 1.5%

 

 

 

 

 

 

 

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

 

 

12,650

 

 

13,379,399

 









Kentucky — 1.6%

 

 

 

 

 

 

 

Kentucky State Property & Buildings Commission,
Refunding RB, Project No. 93 (AGC), 5.25%,
2/01/28

 

 

4,000

 

 

4,366,440

 

Louisville & Jefferson County Metropolitan Sewer
District Kentucky, RB, Series A (NPFGC), 5.25%,
5/15/37

 

 

10,000

 

 

10,549,100

 

 

 

 

 

 



 

 

 

 

 

 

 

14,915,540

 









Louisiana — 1.5%

 

 

 

 

 

 

 

New Orleans Aviation Board Louisiana, RB, New
Orleans Aviation, Series A, AMT (AGM), 5.25%,
1/01/32

 

 

13,335

 

 

13,383,139

 









Maryland — 0.5%

 

 

 

 

 

 

 

Maryland Community Development Administration,
Refunding RB, Residential, Series A, AMT, 5.75%,
9/01/39

 

 

4,650

 

 

4,936,301

 









Massachusetts — 5.3%

 

 

 

 

 

 

 

Massachusetts HFA, RB:

 

 

 

 

 

 

 

S/F Housing, Series 128 AMT (AGM), 4.88%,
12/01/38 (c)

 

 

12,405

 

 

11,934,354

 

Series B, 7.00%, 12/01/38

 

 

3,440

 

 

3,851,768

 

Massachusetts HFA, Refunding RB:

 

 

 

 

 

 

 

Housing Development, Series B (NPFGC), 5.40%,
12/01/28

 

 

1,835

 

 

1,803,438

 

Rental Housing, Series A, AMT (AGM), 5.15%,
7/01/26

 

 

18,245

 

 

18,540,387

 

Massachusetts Port Authority, Refunding RB, BOSFUEL
Project, AMT (NPFGC), 5.00%, 7/01/38

 

 

12,925

 

 

12,583,004

 

 

 

 

 

 



 

 

 

 

 

 

 

48,712,951

 









Michigan — 7.9%

 

 

 

 

 

 

 

City of Detroit Michigan, RB, Series B (AGM):

 

 

 

 

 

 

 

Second Lien, 6.25%, 7/01/36

 

 

1,075

 

 

1,178,802

 

Second Lien, 7.00%, 7/01/36

 

 

500

 

 

577,850

 

Senior Lien, 7.50%, 7/01/33

 

 

1,800

 

 

2,167,326

 

City of Detroit Michigan, Refunding RB:

 

 

 

 

 

 

 

Senior Lien, Series C-1 (AGM), 7.00%, 7/01/27

 

 

1,500

 

 

1,753,695

 

Senior Lien, Series D (AGM), 5.00%, 7/01/23

 

 

9,085

 

 

9,370,814

 

Series C (NPFGC), 5.00%, 7/01/22

 

 

5,540

 

 

5,695,286

 

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

 

 

5,000

 

 

4,929,350

 

 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 







Michigan (concluded)

 

 

 

 

 

 

 

Michigan Higher Education Student Loan Authority, RB,
Student Loan, Series XVII-Q, AMT (AMBAC), 5.00%,
3/01/31

 

$

4,325

 

$

4,126,915

 

Michigan State Building Authority, Refunding RB,
Facilities Program, Series I:

 

 

 

 

 

 

 

6.25%, 10/15/38

 

 

3,125

 

 

3,460,438

 

(AGC), 5.25%, 10/15/24

 

 

1,750

 

 

1,906,310

 

(AGC), 5.25%, 10/15/25

 

 

3,250

 

 

3,508,180

 

Michigan Strategic Fund, Refunding RB, AMT,
Detroit Edison Co. (Syncora):

 

 

 

 

 

 

 

Pollution, Series C, 5.65%, 9/01/29

 

 

2,935

 

 

2,939,432

 

Project, Series A, 5.50%, 6/01/30

 

 

8,000

 

 

7,801,440

 

State of Michigan, RB, GAN (AGM):

 

 

 

 

 

 

 

5.25%, 9/15/22

 

 

10,000

 

 

11,016,500

 

5.25%, 9/15/26

 

 

6,650

 

 

7,118,027

 

Wayne County Airport Authority, Refunding RB, AMT
(AGC), 5.38%, 12/01/32

 

 

5,000

 

 

4,759,400

 

 

 

 

 

 



 

 

 

 

 

 

 

72,309,765

 









Minnesota — 0.7%

 

 

 

 

 

 

 

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

 

 

5,500

 

 

6,184,915

 









Missouri — 0.00%

 

 

 

 

 

 

 

Missouri Housing Development Commission, RB, S/F
Homeowner Loan, Series C-1, AMT (Ginnie Mae),
7.15%, 3/01/32

 

 

75

 

 

77,133

 









Nevada — 5.5%

 

 

 

 

 

 

 

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

 

 

2,250

 

 

2,491,605

 

County of Clark Nevada, RB:

 

 

 

 

 

 

 

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

 

 

5,170

 

 

5,273,710

 

Southwest Gas Corp. Project, Series A, AMT
(AMBAC), 5.25%, 7/01/34

 

 

12,675

 

 

11,542,489

 

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

 

 

20,000

 

 

20,133,400

 

Subordinate Lien, Series A2 (BHAC),
5.00%, 7/01/30

 

 

750

 

 

768,450

 

Las Vegas Convention & Visitors Authority, RB (AMBAC),
5.00%, 7/01/37

 

 

10,000

 

 

9,984,900

 

 

 

 

 

 



 

 

 

 

 

 

 

50,194,554

 









New Jersey — 3.3%

 

 

 

 

 

 

 

New Jersey EDA, RB, Cigarette Tax, 5.75%, 6/15/34

 

 

4,000

 

 

3,903,360

 

New Jersey EDA, Refunding RB, School Facilities
Construction, Series N-1:

 

 

 

 

 

 

 

(AMBAC), 5.50%, 9/01/24

 

 

10,000

 

 

11,463,300

 

(NPFGC), 5.50%, 9/01/28

 

 

2,165

 

 

2,425,147

 

New Jersey Transportation Trust Fund Authority, RB,
Transportation System:

 

 

 

 

 

 

 

CAB, Series C (AGC), 5.70%, 12/15/25 (b)

 

 

15,735

 

 

7,222,837

 

Series A (NPFGC), 5.75%, 6/15/25

 

 

4,400

 

 

5,207,708

 

 

 

 

 

 



 

 

 

 

 

 

 

30,222,352

 









New York — 2.6%

 

 

 

 

 

 

 

City of New York New York, GO:

 

 

 

 

 

 

 

Series J, 5.25%, 5/15/24

 

 

10,000

 

 

10,914,500

 

Series M (AGC), 5.00%, 4/01/30

 

 

5,000

 

 

5,236,850

 

New York City Transitional Finance Authority, RB,
Fiscal 2009, Series S-4, 5.50%, 1/15/34

 

 

7,250

 

 

7,958,325

 

 

 

 

 

 



 

 

 

 

 

 

 

24,109,675

 










See Notes to Financial Statements.

 

 

 


ANNUAL REPORT

JULY 31, 2010

19




 

 



 

 

Schedule of Investments (continued)

BlackRock MuniYield Insured Fund, Inc. (MYI)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 







Ohio — 0.3%

 

 

 

 

 

 

 

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

 

$

2,775

 

$

2,800,808

 









Pennsylvania — 3.0%

 

 

 

 

 

 

 

Pennsylvania HFA, RB, S/F Mortgage, Series 70A, AMT,
5.80%, 4/01/27

 

 

4,740

 

 

4,742,844

 

Pennsylvania Turnpike Commission, RB:

 

 

 

 

 

 

 

Series A (AMBAC), 5.50%, 12/01/31

 

 

15,600

 

 

16,551,444

 

Sub-Series C (AGC), 6.25%, 6/01/38

 

 

5,695

 

 

6,541,277

 

 

 

 

 

 



 

 

 

 

 

 

 

27,835,565

 









Puerto Rico — 2.7%

 

 

 

 

 

 

 

Puerto Rico Public Buildings Authority, Refunding RB,
Government Facilities, Series M-3 (NPFGC):

 

 

 

 

 

 

 

6.00%, 7/01/26

 

 

3,325

 

 

3,526,694

 

6.00%, 7/01/27

 

 

4,235

 

 

4,480,588

 

6.00%, 7/01/28

 

 

2,750

 

 

2,902,130

 

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

 

 

10,195

 

 

11,255,688

 

Puerto Rico Sales Tax Financing Corp., Refunding RB:

 

 

 

 

 

 

 

CAB, Series A (NPFGC), 5.70%, 8/01/41 (b)

 

 

7,500

 

 

1,128,675

 

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

 

 

1,180

 

 

1,273,916

 

 

 

 

 

 



 

 

 

 

 

 

 

24,567,691

 









South Carolina — 1.0%

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

5.25%, 12/01/28

 

 

3,895

 

 

4,097,968

 

5.25%, 12/01/29

 

 

3,215

 

 

3,365,301

 

5.25%, 12/01/30

 

 

1,160

 

 

1,209,729

 

South Carolina State Housing Finance & Development
Authority, Refunding RB, Series A-2, AMT (AGM),
6.35%, 7/01/19

 

 

505

 

 

512,323

 

 

 

 

 

 



 

 

 

 

 

 

 

9,185,321

 









Tennessee — 0.2%

 

 

 

 

 

 

 

Tennessee Housing Development Agency, Refunding RB,
Homeownership Program, Series A, AMT (AGM),
5.35%, 1/01/26

 

 

1,605

 

 

1,613,490

 









Texas — 16.0%

 

 

 

 

 

 

 

City of Houston Texas, RB, Combined, First Lien,
Series A (AGM), 5.00%, 11/15/36

 

 

10,000

 

 

10,344,900

 

City of Houston Texas, Refunding RB, Combined,
First Lien, Series A (AGC):

 

 

 

 

 

 

 

6.00%, 11/15/35

 

 

5,700

 

 

6,560,415

 

5.38%, 11/15/38

 

 

3,650

 

 

3,973,536

 

Dallas ISD, GO, School Building (PSF-GTD),
6.38%, 2/15/34

 

 

10,000

 

 

12,078,600

 

Dallas-Fort Worth International Airport Facilities
Improvement Corp., Refunding RB, Joint Series A,
AMT (NPFGC), 5.63%, 11/01/26

 

 

15,000

 

 

15,171,150

 

Grand Prairie ISD Texas, GO, Refunding, CAB, 6.58%,
8/15/28 (b)

 

 

10,000

 

 

3,386,700

 

Harris County Hospital District, RB, Senior Lien,
Series A (NPFGC), 5.25%, 2/15/37

 

 

9,650

 

 

9,636,007

 

Harris County-Houston Sports Authority, Refunding RB,
Senior Lien, Series G (NPFGC):

 

 

 

 

 

 

 

5.75%, 11/15/19

 

 

265

 

 

270,348

 

5.75%, 11/15/20

 

 

3,500

 

 

3,561,880

 

5.25%, 11/15/30

 

 

9,800

 

 

9,306,668

 

Judson ISD Texas, GO, School Building (AGC), 5.00%,
2/01/37

 

 

10,000

 

 

10,290,500

 

Matagorda County Navigation District No. 1 Texas,
Refunding RB, Central Power & Light Co. Project, AMT
(NPFGC), 5.20%, 5/01/30 (c)

 

 

6,150

 

 

6,059,902

 

 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 







Texas (concluded)

 

 

 

 

 

 

 

North Texas Tollway Authority, Refunding RB, First Tier:

 

 

 

 

 

 

 

Series A, 6.00%, 1/01/28

 

$

6,275

 

$

6,859,391

 

System, Series A (NPFGC), 5.13%, 1/01/28

 

 

21,750

 

 

22,391,190

 

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

 

 

10,000

 

 

10,409,400

 

Texas Department of Housing & Community Affairs,
MRB, Series A, AMT (NPFGC), 5.45%, 9/01/23

 

 

4,045

 

 

4,097,464

 

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

 

 

 

 

 

 

 

5.50%, 8/15/39

 

 

5,500

 

 

5,555,770

 

5.00%, 8/15/42

 

 

8,000

 

 

7,667,360

 

 

 

 

 

 



 

 

 

 

 

 

 

147,621,181

 









Utah — 2.2%

 

 

 

 

 

 

 

Utah Transit Authority, Refunding RB, CAB,
Sub-Series A (b):

 

 

 

 

 

 

 

(AGC), 5.38%, 6/15/20

 

 

15,930

 

 

10,453,107

 

(NPFGC), 4.88%, 6/15/23

 

 

5,000

 

 

2,709,600

 

(NPFGC), 5.21%, 6/15/24

 

 

13,930

 

 

7,086,330

 

 

 

 

 

 



 

 

 

 

 

 

 

20,249,037

 









Vermont — 0.3%

 

 

 

 

 

 

 

Vermont HFA, HRB, Series 12B, AMT (AGM), 6.30%,
11/01/19

 

 

305

 

 

311,292

 

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

 

 

2,695

 

 

2,760,327

 

 

 

 

 

 



 

 

 

 

 

 

 

3,071,619

 









Washington — 4.5%

 

 

 

 

 

 

 

Chelan County Public Utility District No. 1, RB,
Chelan Hydro System, Series A, AMT (AMBAC),
5.45%, 7/01/37

 

 

3,030

 

 

3,029,849

 

Chelan County Public Utility District No. 1,
Refunding RB, Chelan Hydro System, Series C, AMT
(NPFGC), 5.65%, 7/01/32

 

 

6,000

 

 

6,047,340

 

Radford Court Properties Washington, RB (NPFGC),
5.75%, 6/01/32

 

 

10,000

 

 

10,124,800

 

Seattle Housing Authority Washington, RB, Capital Fund
Program, High Rise Rehabilitation, Series III, AMT
(AGM), 5.15%, 11/01/27

 

 

6,255

 

 

6,391,109

 

Washington Health Care Facilities Authority, Series A, RB:

 

 

 

 

 

 

 

Providence Health & Services, 5.00%, 10/01/39

 

 

1,125

 

 

1,134,371

 

Providence Health & Services, 5.25%, 10/01/39

 

 

2,725

 

 

2,799,665

 

Providence Health System (NPFGC),
5.25%, 10/01/21

 

 

5,575

 

 

5,778,933

 

Washington Health Care Facilities Authority,
Refunding RB, Catholic Health Initiatives, Series D,
6.38%, 10/01/36

 

 

5,400

 

 

5,968,782

 

 

 

 

 

 



 

 

 

 

 

 

 

41,274,849

 









Wisconsin — 0.8%

 

 

 

 

 

 

 

Wisconsin Health & Educational Facilities Authority, RB:

 

 

 

 

 

 

 

Ascension Health Senior Credit Group, 5.00%,
11/15/33

 

 

3,745

 

 

3,809,077

 

SynergyHealth Inc., 6.00%, 11/15/32

 

 

3,395

 

 

3,495,254

 

 

 

 

 

 



 

 

 

 

 

 

 

7,304,331

 









Total Municipal Bonds — 115.4%

 

 

 

 

 

1,061,761,715

 










See Notes to Financial Statements.

 

 

 


20

ANNUAL REPORT

JULY 31, 2010




 

 



 

 

Schedule of Investments (continued)

BlackRock MuniYield Insured Fund, Inc. (MYI)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (d)

 

Par
(000)

 

Value

 







Arizona — 1.2%

 

 

 

 

 

 

 

Arizona School Facilities Board, COP (AGC), 5.13%,
9/01/21

 

$

10,000

 

$

10,849,500

 









California — 12.3%

 

 

 

 

 

 

 

Alameda County Joint Powers Authority, Refunding RB,
Lease (AGM), 5.00%, 12/01/34

 

 

6,990

 

 

6,989,511

 

California State University, RB, Systemwide, Series A
(AGM), 5.00%, 11/01/33

 

 

7,996

 

 

8,113,924

 

California State University, Refunding RB, Systemwide,
Series A (AGM), 5.00%, 11/01/37

 

 

18,435

 

 

18,612,386

 

City of Riverside California, RB, Issue D (AGM), 5.00%,
10/01/38

 

 

20,000

 

 

20,212,400

 

Foothill-De Anza Community College District, GO,
Election of 1999, Series C (NPFGC), 5.00%,
8/01/36

 

 

7,500

 

 

7,662,975

 

Las Virgenes Unified School District California, GO,
Series A (AGM), 5.00%, 8/01/31

 

 

10,000

 

 

10,292,444

 

Los Angeles Community College District California, GO,
Election of 2008, Series A, 6.00%, 8/01/33

 

 

5,248

 

 

5,920,617

 

Orange County Sanitation District, COP, Series B (AGM),
5.00%, 2/01/37

 

 

10,780

 

 

11,247,636

 

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

 

 

1,047

 

 

1,115,888

 

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

 

 

9,370

 

 

9,729,058

 

San Francisco Bay Area Rapid Transit District, RB
(AGM), 5.00%, 7/01/36

 

 

10,000

 

 

10,304,350

 

University of California, RB, Series O, 5.75%, 5/15/34

 

 

2,205

 

 

2,490,239

 

 

 

 

 

 



 

 

 

 

 

 

 

112,691,428

 









Colorado — 0.3%

 

 

 

 

 

 

 

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

 

 

2,469

 

 

2,634,118

 









Connecticut — 0.6%

 

 

 

 

 

 

 

Connecticut State Health & Educational Facility
Authority, RB, Yale University, Series T-1, 4.70%,
7/01/29

 

 

5,010

 

 

5,291,311

 









District of Columbia — 0.8%

 

 

 

 

 

 

 

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

 

 

2,595

 

 

2,938,864

 

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

 

 

4,281

 

 

4,836,971

 

 

 

 

 

 



 

 

 

 

 

 

 

7,775,835

 









Florida — 0.4%

 

 

 

 

 

 

 

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

 

 

3,299

 

 

3,439,475

 









Georgia — 1.1%

 

 

 

 

 

 

 

Metropolitan Atlanta Rapid Transit Authority, RB, Third
Indenture, Series B (AGM), 5.00%, 7/01/37

 

 

10,000

 

 

10,433,214

 









Hawaii — 1.1%

 

 

 

 

 

 

 

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

 

 

9,830

 

 

10,075,455

 









Illinois — 2.6%

 

 

 

 

 

 

 

City of Chicago Illinois, GO, Refunding, Series A (AGC),
5.25%, 1/01/24

 

 

11,000

 

 

12,187,340

 

Illinois Finance Authority, RB, University of Chicago,
Series B, 6.25%, 7/01/38

 

 

10,000

 

 

11,580,100

 

 

 

 

 

 



 

 

 

 

 

 

 

23,767,440

 









 

 

 

 

 

 

 

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (d)

 

Par
(000)

 

Value

 







Kentucky — 0.7%

 

 

 

 

 

 

 

Kentucky State Property & Building Commission,
Refunding RB, Project No. 93 (AGC), 5.25%,
2/01/27

 

$

5,985

 

$

6,543,756

 









Louisiana — 1.1%

 

 

 

 

 

 

 

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

 

 

10,000

 

 

10,327,000

 









Nevada — 0.6%

 

 

 

 

 

 

 

Clark County Water Reclamation District, GO, Series B:

 

 

 

 

 

 

 

5.50%, 7/01/29

 

 

510

 

 

564,317

 

5.75%, 7/01/34

 

 

4,813

 

 

5,371,174

 

 

 

 

 

 



 

 

 

 

 

 

 

5,935,491

 









New Jersey — 1.3%

 

 

 

 

 

 

 

Garden State Preservation Trust, RB, Election of 2005,
Series A (AGM), 5.75%, 11/01/28

 

 

10,000

 

 

12,280,400

 









New York — 4.7%

 

 

 

 

 

 

 

New York City Municipal Water Finance Authority, RB,
Series DD, 5.00%, 6/15/37

 

 

17,567

 

 

18,392,724

 

Port Authority of New York & New Jersey, RB,
Consolidated, 155th Series, AMT (AGM), 5.13%,
7/15/30

 

 

19,500

 

 

19,966,635

 

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

 

 

4,500

 

 

4,860,360

 

 

 

 

 

 



 

 

 

 

 

 

 

43,219,719

 









North Carolina — 1.1%

 

 

 

 

 

 

 

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

 

 

9,996

 

 

10,047,310

 









Ohio — 0.7%

 

 

 

 

 

 

 

County of Montgomery Ohio, RB, Catholic Health,
Series C-1 (AGM), 5.00%, 10/01/41

 

 

4,990

 

 

5,024,680

 

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

 

 

1,520

 

 

1,622,190

 

 

 

 

 

 



 

 

 

 

 

 

 

6,646,870

 









South Carolina — 0.6%

 

 

 

 

 

 

 

South Carolina State Housing Finance & Development
Authority, Refunding RB, Series B-1, 5.55%, 7/01/39

 

 

4,928

 

 

5,103,551

 









Texas — 3.8%

 

 

 

 

 

 

 

Friendswood ISD Texas, GO, Schoolhouse (PSF-GTD),
5.00%, 2/15/37

 

 

12,955

 

 

13,670,389

 

Houston ISD, GO, Schoolhouse (PSF-GTD), 5.00%,
2/15/33

 

 

10,000

 

 

10,541,000

 

Texas State University Systems, Refunding RB, 5.25%,
3/15/26

 

 

10,000

 

 

11,000,300

 

 

 

 

 

 



 

 

 

 

 

 

 

35,211,689

 









Virginia — 0.5%

 

 

 

 

 

 

 

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

 

 

3,950

 

 

4,205,052

 









Washington — 6.0%

 

 

 

 

 

 

 

Central Puget Sound Regional Transit Authority, RB,
Series A (AGM), 5.00%, 11/01/34

 

 

16,770

 

 

17,906,754

 

County of King Washington, RB (AGM), 5.00%,
1/01/37

 

 

15,785

 

 

16,468,702

 

Port of Seattle Washington, Refunding RB, Series B,
AMT (NPFGC), 5.20%, 7/01/29

 

 

20,565

 

 

20,630,198

 

 

 

 

 

 



 

 

 

 

 

 

 

55,005,654

 










See Notes to Financial Statements.

 

 

 


ANNUAL REPORT

JULY 31, 2010

21




 

 



 

 

Schedule of Investments (concluded)

BlackRock MuniYield Insured Fund, Inc. (MYI)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (d)

 

Par
(000)

 

Value

 







Wisconsin — 0.4%

 

 

 

 

 

 

 

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

 

$

3,959

 

$

4,072,662

 









Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 41.9%

 

 

 

 

 

385,556,930

 









Total Long-Term Investments
(Cost — $1,404,553,836) — 157.3%

 

 

 

 

 

1,447,318,645

 









 

 

 

 

 

 

 

 









 

 

 

 

 

 

 

 

Short-Term Securities

 

Shares

 

 

 

 








FFI Institutional Tax-Exempt Fund, 0.21% (e)(f)

 

 

11,426,470

 

 

11,426,470

 









Total Short-Term Securities
(Cost — $11,426,470) — 1.2%

 

 

 

 

 

11,426,470

 









Total Investments (Cost — $1,415,980,306*) — 158.5%

 

 

 

 

 

1,458,745,115

 

Other Assets Less Liabilities — 1.5%

 

 

 

 

 

13,772,404

 

Liability for Trust Certificates, Including
Interest Expense and Fees Payable — (21.3)%

 

 

 

 

 

(195,779,820

)

Preferred Shares, at Redemption Value — (38.7)%

 

 

 

 

 

(356,503,871

)

 

 

 

 

 



 

Net Assets Applicable to Common Shares — 100.0%

 

 

 

 

$

920,233,828

 

 

 

 

 

 



 


 

 

 


 

 

*

The cost and unrealized appreciation (depreciation) of investments as of July 31, 2010, as computed for federal income tax purposes, were as follows:


 

 

 

 

 

 

 

 

Aggregate cost

 

 

 

 

$

1,225,558,409

 

 

 

 

 

 



 

Gross unrealized appreciation

 

 

 

 

$

53,451,438

 

Gross unrealized depreciation

 

 

 

 

 

(15,927,953

)

 

 

 

 

 



 

Net unrealized appreciation

 

 

 

 

$

37,523,485

 

 

 

 

 

 



 


 

 

(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)

Securities represent bonds transferred to a tender option bond trust 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 tender option bond trusts.

 

 

(e)

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 at
July 31,
2009

 

Net
Activity

 

Shares at
July 31,
2010

 

Income

 











FFI Institutional
Tax-Exempt Fund

 

 

33,611,786

 

 

(22,185,316

)

 

11,426,470

 

$

40,593

 
















 

 

(f)

Represents the current yield as of report date.


 

 

Financial futures contracts sold as of July 31, 2010 were as follows:


 

 

 

 

 

 

 

 

 

 

 

 













Contracts

 

Issue

 

Expiration
Date

 

 

Notional
Value

 

 

Unrealized
Depreciation

 













     185

 

10-Year U.S.
Treasury Bond

 

September 2010

 

$

22,505,999

 

$

(399,313

)














 

 

 

Fair Value Measurements — Various inputs are used in determining the fair value of investments and derivatives, which are 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 derivatives)

 

 

 

 

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 other significant accounting policies, please refer to Note 1 of Notes to Financial Statements.

 

 

 

 

The following table summarizes the inputs used as of July 31, 2010 in determining the fair valuation of the Fund’s investments and derivatives:


 

 

 

 

 

 

 

 

 

 

 

 

 

 











Valuation Inputs

 

Level 1

 

Level 2

 

Level 3

 

Total

 











Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments in
Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-Term
Investments1

 

 

 

$

1,447,318,645

 

 

 

$

1,447,318,645

 

Short-Term
Securities

 

$

11,426,470

 

 

 

 

 

 

11,426,470

 

 

 













Total

 

$

11,426,470

 

$

1,447,318,645

 

 

 

$

1,458,745,115

 

 

 














 

 

 

 

1

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


 

 

 

 

 

 

 

 

 

 

 

 

 

 





 

 

Derivative Financial Instruments2

 





Valuation Inputs

 

Level 1

 

Level 2

 

Level 3

 

Total

 











Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate
contracts

 

$

(399,313

)

 

 

 

 

$

(399,313

)

 

 














 

 

 

 

2

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


See Notes to Financial Statements.

 

 

 


22

ANNUAL REPORT

JULY 31, 2010



 

 



 

 

Schedule of Investments July 31, 2010

BlackRock MuniYield Michigan Insured Fund II, Inc. (MYM)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 







Michigan — 132.3%

 

 

 

 

 

 

 









Corporate — 13.4%

 

 

 

 

 

 

 

Delta County EDC, Refunding RB, Mead Westvaco-
Escanaba, Series A, 6.25%, 4/15/12 (a)

 

$

2,420

 

$

2,660,645

 

Dickinson County EDC Michigan, Refunding RB,
International Paper Co. Project, Series A,
5.75%, 6/01/16

 

 

2,500

 

 

2,566,525

 

Michigan Strategic Fund, Refunding RB, Detroit Edison
Co. Project, Series A, AMT (NPFGC), 5.55%, 9/01/29

 

 

9,500

 

 

9,512,350

 

Monroe County EDC Michigan, Refunding RB, Detroit
Edison Co. Project, Series AA (NPFGC),
6.95%, 9/01/22

 

 

6,500

 

 

7,697,560

 

 

 

 

 

 



 

 

 

 

 

 

 

22,437,080

 









County/City/Special District/
School District — 35.2%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adrian City School District Michigan, GO (AGM),
5.00%, 5/01/14 (a)

 

 

2,400

 

 

2,766,408

 

Allendale Public School District Michigan, GO, School
Building and Site, Series A (AGM), 5.50%, 5/01/16

 

 

1,000

 

 

1,168,770

 

Bay City School District Michigan, GO, School Building
& Site (AGM), 5.00%, 5/01/36

 

 

2,915

 

 

2,980,529

 

Charter Township of Canton Michigan, GO, Capital
Improvement (AGM):

 

 

 

 

 

 

 

5.00%, 4/01/25

 

 

1,250

 

 

1,323,225

 

5.00%, 4/01/26

 

 

1,250

 

 

1,315,000

 

5.00%, 4/01/27

 

 

500

 

 

530,490

 

City of Oak Park Michigan, GO, Street Improvement
(NPFGC), 5.00%, 5/01/30

 

 

600

 

 

619,314

 

County of Genesee Michigan, GO, Refunding, Series A
(NPFGC), 5.00%, 5/01/19

 

 

400

 

 

428,752

 

County of Genesee Michigan, GO, Water Supply System
(NPFGC), 5.13%, 11/01/33

 

 

500

 

 

505,100

 

County of Wayne Michigan, GO, Airport Hotel, Detroit
Metropolitan Airport, Series A (NPFGC),
5.00%, 12/01/30

 

 

1,180

 

 

1,100,020

 

Dearborn Brownfield Redevelopment Authority, GO,
Limited Tax, Redevelopment, Series A (AGC),
5.50%, 5/01/39

 

 

2,000

 

 

2,115,040

 

Detroit City School District Michigan, GO, School
Building & Site Improvement (FGIC):

 

 

 

 

 

 

 

Series A, 5.38%, 5/01/13 (a)

 

 

1,480

 

 

1,669,292

 

Series B, 5.00%, 5/01/28

 

 

1,900

 

 

1,901,311

 

Eaton Rapids Public Schools Michigan, GO, School
Building & Site (AGM), 5.25%, 5/01/23

 

 

2,000

 

 

2,160,360

 

Gibraltar School District Michigan, GO, School Building
& Site:

 

 

 

 

 

 

 

(FGIC), 5.00%, 5/01/14 (a)

 

 

3,065

 

 

3,524,352

 

(NPFGC), 5.00%, 5/01/28

 

 

585

 

 

598,198

 

Grand Blanc Community Schools Michigan, GO (NPFGC):

 

 

 

 

 

 

 

5.63%, 5/01/17

 

 

1,000

 

 

1,051,240

 

5.63%, 5/01/18

 

 

1,000

 

 

1,049,950

 

5.63%, 5/01/19

 

 

1,100

 

 

1,153,537

 

Grand Rapids Building Authority Michigan, RB, Series A (AMBAC) (a):

 

 

 

 

 

 

 

5.50%, 10/01/12

 

 

535

 

 

593,631

 

5.50%, 10/01/12

 

 

130

 

 

144,247

 


 

 

 

 

 

 

 

 

Municipal Bonds

 

 

Par
(000)

 

Value

 








Michigan (continued)

 

 

 

 

 

 

 









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

 

 

 

 

 

 

 

Harper Creek Community School District Michigan, GO,
Refunding (AGM), 5.00%, 5/01/22

 

$

1,000

 

$

1,080,300

 

Harper Woods School District Michigan, GO, Refunding,
School Building & Site:

 

 

 

 

 

 

 

(FGIC), 5.00%, 5/01/14 (a)

 

 

215

 

 

247,824

 

(NPFGC), 5.00%, 5/01/34

 

 

10

 

 

10,122

 

Haslett Public School District Michigan, GO, Building &
Site (NPFGC), 5.63%, 11/01/11 (a)

 

 

1,275

 

 

1,359,545

 

Jonesville Community Schools Michigan, GO, Refunding
(NPFGC), 5.00%, 5/01/29

 

 

1,085

 

 

1,106,971

 

L’Anse Creuse Public Schools Michigan, GO, School
Building & Site (AGM):

 

 

 

 

 

 

 

5.00%, 5/01/12

 

 

400

 

 

428,212

 

5.00%, 5/01/25

 

 

1,000

 

 

1,057,020

 

5.00%, 5/01/26

 

 

1,050

 

 

1,104,253

 

5.00%, 5/01/35

 

 

2,000

 

 

2,046,520

 

Lincoln Consolidated School District Michigan, GO,
Refunding (NPFGC), 4.63%, 5/01/28

 

 

2,325

 

 

2,348,831

 

Livonia Public Schools School District Michigan, GO,
Refunding, Series A (NPFGC), 5.00%, 5/01/24

 

 

500

 

 

521,535

 

Ludington Area School District Michigan, GO (NPFGC),
5.25%, 5/01/23

 

 

1,440

 

 

1,558,382

 

Michigan State Building Authority, RB, Facilities Program,
Series H (AGM), 5.00%, 10/15/26

 

 

3,000

 

 

3,121,050

 

Michigan State Building Authority, Refunding RB,
Facilities Program, Series I (AGM):

 

 

 

 

 

 

 

5.50%, 10/15/10

 

 

4,110

 

 

4,153,525

 

5.50%, 10/15/10 (b)

 

 

390

 

 

394,286

 

New Haven Community Schools Michigan, GO,
Refunding, School Building & Site (AGM),
5.00%, 5/01/23

 

 

500

 

 

531,590

 

New Lothrop Area Public Schools Michigan, GO, School
Building & Site (AGM), 5.00%, 5/01/35

 

 

1,200

 

 

1,222,092

 

Pontiac Tax Increment Finance Authority Michigan, Tax
Allocation Bonds, Refunding, Tax Increment
Development (ACA), 5.38%, 6/01/12 (a)

 

 

640

 

 

702,502

 

Reed City Public Schools Michigan, GO, School Building
& Site (AGM), 5.00%, 5/01/14 (a)

 

 

1,000

 

 

1,152,670

 

Southfield Public Schools Michigan, GO, School
Building & Site, Series B (AGM), 5.00%, 5/01/14 (a)

 

 

1,000

 

 

1,145,480

 

Sparta Area Schools Michigan, GO, School Building &
Site (FGIC), 5.00%, 5/01/14 (a)

 

 

1,000

 

 

1,147,870

 

Thornapple Kellogg School District Michigan, GO,
School Building & Site (NPFGC), 5.00%, 5/01/32

 

 

1,500

 

 

1,537,890

 

Van Dyke Public Schools Michigan, GO, School Building
& Site (AGM), 5.00%, 5/01/28

 

 

750

 

 

787,283

 

Zeeland Public Schools Michigan, GO, School Building
& Site (NPFGC), 5.00%, 5/01/29

 

 

1,230

 

 

1,256,039

 

 

 

 

 

 



 

 

 

 

 

 

 

58,720,558

 









Education — 8.4%

 

 

 

 

 

 

 

Ferris State University, Refunding RB, General (AGM):

 

 

 

 

 

 

 

4.50%, 10/01/23

 

 

1,360

 

 

1,430,652

 

4.50%, 10/01/24

 

 

1,595

 

 

1,660,762

 

4.50%, 10/01/25

 

 

1,405

 

 

1,452,489

 

Michigan Higher Education Facilities Authority, RB,
Limited Obligation, Hillsdale College Project,
5.00%, 3/01/35

 

 

1,125

 

 

1,086,356

 

Michigan Higher Education Facilities Authority,
Refunding RB, Limited Obligation, Creative Studies (a):

 

 

 

 

 

 

 

5.85%, 6/01/12

 

 

550

 

 

603,037

 

5.90%, 6/01/12

 

 

1,000

 

 

1,097,340

 


See Notes to Financial Statements.

 

 

 

 





 

ANNUAL REPORT

JULY 31, 2010

23




 

 



 

 

Schedule of Investments (continued)

BlackRock MuniYield Michigan Insured Fund II, Inc. (MYM)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 







Michigan (continued)

 

 

 

 

 

 

 









Education (concluded)

 

 

 

 

 

 

 

Michigan Higher Education Student Loan Authority, RB,
Student Loan, AMT (AMBAC):

 

 

 

 

 

 

 

Series XVII-B, 5.40%, 6/01/18

 

$

3,000

 

$

3,002,460

 

Series XVII-Q, 5.00%, 3/01/31

 

 

500

 

 

477,100

 

Michigan State Building Authority, RB, Facilities Program,
Series II (AMBAC), 4.84%, 10/15/10 (b)(c)

 

 

1,675

 

 

1,673,442

 

Saginaw Valley State University Michigan, Refunding
RB, General (NPFGC), 5.00%, 7/01/24

 

 

1,450

 

 

1,502,069

 

 

 

 

 

 



 

 

 

 

 

 

 

13,985,707

 









Health — 23.6%

 

 

 

 

 

 

 

Dickinson County Healthcare System, Refunding RB,
Series A (ACA), 5.80%, 11/01/24

 

 

2,170

 

 

2,146,998

 

Flint Hospital Building Authority Michigan, Refunding
RB, Hurley Medical Center (ACA):

 

 

 

 

 

 

 

6.00%, 7/01/20

 

 

695

 

 

689,336

 

Series A, 5.38%, 7/01/20

 

 

385

 

 

364,048

 

Kent Hospital Finance Authority Michigan, RB,
Spectrum Health, Series A (NPFGC), 5.50%,
7/15/11 (a)

 

 

3,000

 

 

3,177,480

 

Michigan State Hospital Finance Authority, RB:

 

 

 

 

 

 

 

Ascension Health Senior Credit Group,
5.00%, 11/15/25

 

 

2,300

 

 

2,443,842

 

Hospital, MidMichigan Obligation Group, Series A
(AMBAC), 5.50%, 4/15/18

 

 

1,000

 

 

1,024,470

 

McLaren Health Care, Series C, 5.00%, 8/01/35

 

 

1,585

 

 

1,558,340

 

Mercy Health Services, Series R (AMBAC), 5.38%,
8/15/26 (b)

 

 

2,000

 

 

2,006,700

 

Michigan State Hospital Finance Authority,
Refunding RB:

 

 

 

 

 

 

 

Hospital, Crittenton, Series A, 5.63%, 3/01/27

 

 

1,300

 

 

1,303,172

 

Hospital, Oakwood Obligation Group, Series A,
5.00%, 7/15/25

 

 

2,470

 

 

2,451,697

 

Hospital, Oakwood Obligation Group, Series A,
5.00%, 7/15/37

 

 

3,340

 

 

3,054,130

 

Hospital, Sparrow Obligated, 5.00%, 11/15/31

 

 

1,595

 

 

1,528,345

 

McLaren Health Care, 5.75%, 5/15/38

 

 

1,500

 

 

1,557,030

 

Trinity Health Credit, Series C, 5.38%, 12/01/23

 

 

1,000

 

 

1,016,470

 

Trinity Health Credit, Series C, 5.38%, 12/01/30

 

 

1,950

 

 

1,954,719

 

Trinity Health Credit, Series D, 5.00%, 8/15/34

 

 

1,650

 

 

1,618,287

 

Trinity Health, Series A, 6.00%, 12/01/20

 

 

1,400

 

 

1,424,248

 

Trinity Health, Series A, 6.13%, 12/01/23

 

 

940

 

 

1,047,207

 

Trinity Health, Series A, 6.25%, 12/01/28

 

 

570

 

 

634,467

 

Trinity Health, Series A, 6.50%, 12/01/33

 

 

1,400

 

 

1,564,976

 

Trinity Health, Series A (AMBAC), 6.00%,
12/01/10 (a)

 

 

65

 

 

66,789

 

Trinity Health, Series A (AMBAC), 6.00%, 12/01/27

 

 

5,435

 

 

5,517,123

 

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

 

 

1,000

 

 

1,194,080

 

 

 

 

 

 



 

 

 

 

 

 

 

39,343,954

 









Housing — 3.3%

 

 

 

 

 

 

 

Michigan State HDA, RB:

 

 

 

 

 

 

 

Deaconess Tower, AMT (Ginnie Mae),
5.25%, 2/20/48

 

 

1,000

 

 

1,009,840

 

Series A, 6.00%, 10/01/45

 

 

4,280

 

 

4,444,609

 

Series A, AMT (NPFGC), 5.30%, 10/01/37

 

 

20

 

 

20,030

 

 

 

 

 

 



 

 

 

 

 

 

 

5,474,479

 










 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 







Michigan (concluded)

 

 

 

 

 

 

 









State — 14.2%

 

 

 

 

 

 

 

Michigan Municipal Bond Authority, Refunding RB,
Local Government, Charter County Wayne,
Series B (AGC):

 

 

 

 

 

 

 

5.00%, 11/01/14

 

$

1,500

 

$

1,703,205

 

5.00%, 11/01/15

 

 

1,000

 

 

1,124,410

 

5.00%, 11/01/16

 

 

500

 

 

568,605

 

5.38%, 11/01/24

 

 

125

 

 

138,175

 

Michigan State Building Authority, Refunding RB:

 

 

 

 

 

 

 

Facilities Program, Series I, 6.25%, 10/15/38

 

 

2,350

 

 

2,602,249

 

Facilities Program, Series I (AGC),
5.25%, 10/15/24

 

 

2,000

 

 

2,178,640

 

Facilities Program, Series I (AGC),
5.25%, 10/15/25

 

 

1,500

 

 

1,619,160

 

Facilities Program, Series I (AGC),
5.25%, 10/15/26

 

 

400

 

 

428,616

 

Facilities Program, Series II (NPFGC),
5.00%, 10/15/29

 

 

2,000

 

 

2,014,580

 

Series IA (NPFGC), 5.00%, 10/15/32

 

 

2,500

 

 

2,513,050

 

State of Michigan, COP, Refunding, New Center
Development Inc. (NPFGC), 5.75%, 9/01/11 (b)

 

 

5,045

 

 

5,343,311

 

State of Michigan, RB, GAN (AGM), 5.25%, 9/15/27

 

 

3,250

 

 

3,443,732

 

 

 

 

 

 



 

 

 

 

 

 

 

23,677,733

 









Transportation — 16.4%

 

 

 

 

 

 

 

County of Wayne Michigan, RB, Detroit Metropolitan,
Wayne County, Series A, AMT (NPFGC),
5.38%, 12/01/15

 

 

6,500

 

 

6,545,175

 

State of Michigan, Refunding RB (AGM),
5.25%, 5/15/19

 

 

1,000

 

 

1,167,060

 

Wayne County Airport Authority, RB, Detroit Metropolitan
Wayne County Airport, AMT (NPFGC):

 

 

 

 

 

 

 

5.25%, 12/01/25

 

 

4,475

 

 

4,364,288

 

5.25%, 12/01/26

 

 

3,700

 

 

3,566,097

 

5.00%, 12/01/34

 

 

5,200

 

 

4,520,568

 

Wayne County Airport Authority, Refunding RB,
AMT (AGC):

 

 

 

 

 

 

 

5.75%, 12/01/26

 

 

3,060

 

 

3,143,263

 

5.38%, 12/01/32

 

 

4,300

 

 

4,093,084

 

 

 

 

 

 



 

 

 

 

 

 

 

27,399,535

 









Utilities — 17.8%

 

 

 

 

 

 

 

City of Detroit Michigan, RB:

 

 

 

 

 

 

 

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

 

 

2,000

 

 

2,311,400

 

Second Lien, Series B (NPFGC), 5.00%,
7/01/13 (a)

 

 

1,780

 

 

1,998,032

 

Second Lien, Series B (NPFGC), 5.00%, 7/01/34

 

 

2,620

 

 

2,573,260

 

Senior Lien, Series A (AGM), 5.00%, 7/01/25

 

 

3,460

 

 

3,527,297

 

Senior Lien, Series A (FGIC), 5.75%, 7/01/11 (a)

 

 

1,000

 

 

1,056,420

 

Senior Lien, Series A (NPFGC), 5.00%, 7/01/34

 

 

4,600

 

 

4,505,516

 

City of Detroit Michigan, Refunding RB, Second Lien,
Series C (AGM), 5.00%, 7/01/29

 

 

6,475

 

 

6,540,786

 

City of Grand Rapids Michigan, Refunding RB, Series A
(NPFGC), 5.50%, 1/01/22

 

 

1,500

 

 

1,746,525

 

City of Wyoming Michigan, RB (NPFGC),
5.00%, 6/01/30

 

 

5,300

 

 

5,397,573

 

 

 

 

 

 



 

 

 

 

 

 

 

29,656,809

 









Total Municipal Bonds in Michigan

 

 

 

 

 

220,695,855

 









 









Guam — 0.6%

 

 

 

 

 

 

 









Utilities — 0.6%

 

 

 

 

 

 

 

Guam Power Authority, Refunding RB, Series A (AGM),
5.00%, 10/01/37

 

 

955

 

 

956,442

 










See Notes to Financial Statements.

 

 

 

 





24

ANNUAL REPORT

JULY 31, 2010

 




 

 



 

 

Schedule of Investments (continued)

BlackRock MuniYield Michigan Insured Fund II, Inc. (MYM)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 







Puerto Rico — 9.6%

 

 

 

 

 

 

 









County/City/Special District/
School District — 2.1%

 

 

 

 

 

 

 

Puerto Rico Sales Tax Financing Corp., Refunding RB,
First Sub-Series C (AGM), 5.13%, 8/01/42

 

$

3,400

 

$

3,516,994

 









State — 5.5%

 

 

 

 

 

 

 

Puerto Rico Public Buildings Authority, Refunding RB,
Government Facilities, Series M-3 (NPFGC),
6.00%, 7/01/27

 

 

4,200

 

 

4,443,558

 

Puerto Rico Sales Tax Financing Corp., Refunding RB,
CAB, Series A (NPFGC) (c):

 

 

 

 

 

 

 

5.19%, 8/01/43

 

 

12,500

 

 

1,610,750

 

4.99%, 8/01/46

 

 

30,000

 

 

3,153,300

 

 

 

 

 

 



 

 

 

 

 

 

 

9,207,608

 









Transportation — 2.0%

 

 

 

 

 

 

 

Puerto Rico Highway & Transportation Authority,
Refunding RB, Series CC (AGC), 5.50%, 7/01/31

 

 

3,000

 

 

3,225,570

 









Total Municipal Bonds in Puerto Rico

 

 

 

 

 

15,950,172

 









Total Municipal Bonds — 142.5%

 

 

 

 

 

237,602,469

 









 

 

 

 

 

 

 

 









 

 

 

 

 

 

 

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (d)

 

 

 

 

 

 

 









Michigan — 10.8%

 

 

 

 

 

 

 









Corporate — 4.9%

 

 

 

 

 

 

 

Wayne State University, Refunding RB, General (AGM),
5.00%, 11/15/35

 

 

7,790

 

 

8,111,260

 









County/City/Special District/
School District — 2.6%

 

 

 

 

 

 

 

Lakewood Public Schools Michigan, GO, School
Building & Site (AGM), 5.00%, 5/01/37

 

 

3,970

 

 

4,291,054

 









Education — 3.3%

 

 

 

 

 

 

 

Portage Public Schools Michigan, GO, School Building
& Site (AGM), 5.00%, 5/01/31

 

 

2,850

 

 

2,972,521

 

Saginaw Valley State University, Refunding RB, General
(AGM), 5.00%, 7/01/31

 

 

2,500

 

 

2,602,700

 

 

 

 

 

 



 

 

 

 

 

 

 

5,575,221

 









Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 10.8%

 

 

 

 

 

17,977,535

 









Total Long-Term Investments
(Cost — $251,641,200) — 153.3%

 

 

 

 

 

255,580,004

 









 

 

 

 

 

 

 

 









 

 

 

 

 

 

 

 

Short-Term Securities

 

 

 

 

 

 

 









Puerto Rico — 3.0%

 

 

 

 

 

 

 









State — 3.0%

 

 

 

 

 

 

 

Commonwealth of Puerto Rico, GO, Refunding, VRDN,
Series B-4 (AGM, Dexia Credit Local SBPA), 0.25%,
8/09/10 (e)

 

 

5,000

 

 

5,000,000

 










 

 

 

 

 

 

 

 

Short-Term Securities

 

Shares

 

Value

 







Money Market Fund — 0.3%

 

 

 

 

 

 

 

BIF Michigan Municipal Money Fund, 0.00% (f)(g)

 

 

605,019

 

$

605,019

 









Total Short-Term Securities
(Cost — $5,605,019) — 3.3%

 

 

 

 

 

5,605,019

 









Total Investments (Cost — $257,246,219*) — 156.6%

 

 

 

 

 

261,185,023

 

Other Assets Less Liabilities — 1.2%

 

 

 

 

 

1,979,760

 

Liability for Trust Certificates, Including
Interest Expense and Fees Payable — (5.4)%

 

 

 

 

 

(9,035,192

)

Preferred Shares, at Redemption Value — (52.4)%

 

 

 

 

 

(87,356,716

)

 

 

 

 

 



 

Net Assets Applicable to Common Shares — 100.0%

 

 

 

 

$

166,772,875

 

 

 

 

 

 



 


 

 

 


*

The cost and unrealized appreciation (depreciation) of investments as of July 31, 2010, as computed for federal income tax purposes, were as follows:


 

 

 

 

 

Aggregate cost

 

$

247,994,088

 

 

 



 

Gross unrealized appreciation

 

$

9,077,356

 

Gross unrealized depreciation

 

 

(4,916,421

)

 

 



 

Net unrealized appreciation

 

$

4,160,935

 

 

 



 


 

 

(a)

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.

 

 

(b)

Security is collateralized by Municipal or US Treasury obligations.

 

 

(c)

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

 

 

(d)

Securities represent bonds transferred to a tender option bond trust 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 tender option bond trusts.

 

 

(e)

Variable rate security. Rate shown is as of report date and maturity shown is the date the principal owed can be recovered through demand.

 

 

(f)

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, are as follows:


 

 

 

 

 

 

 

 

 

 

 












Affiliate

 

Shares at
July 31,
2009

 

Net
Activity

 

Shares at
July 31,
2010

 

Income

 












BIF Michigan Municipal
Money Fund

 

4,115,561

 

(3,510,542)

 

605,019

 

$

607

 













 

 

(g)

Represents the current yield as of report date.


See Notes to Financial Statements.

 

 

 

 





 

ANNUAL REPORT

JULY 31, 2010

25




 

 



 

 

Schedule of Investments (concluded)

BlackRock MuniYield Michigan Insured Fund II, Inc. (MYM)


 

 

 

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

 

 

Fair Value Measurements — Various inputs are used in determining the fair value of investments, which are 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)


 

 

 

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 other significant accounting policies, please refer to Note 1 of the Notes to Financial Statements.

 

 

 

The following table summarizes the inputs used as of July 31, 2010 in determining the fair valuation of the Fund’s investments:


 

 

 

 

 

 

 

 

 

 

 

 

 

 











Valuation Inputs

 

Level 1

 

Level 2

 

Level 3

 

Total

 











Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments in Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-Term
Investments1

 

 

 

$

255,580,004

 

 

 

$

255,580,004

 

Short-Term
Securities

 

$

605,019

 

 

5,000,000

 

 

 

 

5,605,019

 

 

 













Total

 

$

605,019

 

$

260,580,004

 

 

 

$

261,185,023

 

 

 














 

 

 

 

 

 

1

See above Schedule of Investments for values in each sector.


See Notes to Financial Statements.

 

 

 

 





26

ANNUAL REPORT

JULY 31, 2010

 




 

 



 

 

Schedule of Investments July 31, 2010

BlackRock MuniYield New York Insured Fund, Inc. (MYN)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 







New York — 112.0%

 

 

 

 

 

 

 









Corporate — 8.4%

 

 

 

 

 

 

 

New York City Industrial Development Agency,
Refunding RB, Terminal One Group Association
Project, AMT, 5.50%, 1/01/24 (a)

 

$

1,500

 

$

1,537,305

 

New York Liberty Development Corp., RB, Goldman
Sachs Headquarters, 5.25%, 10/01/35

 

 

900

 

 

918,306

 

New York State Energy Research & Development
Authority, RB, Lilco Project, Series A (NPFGC),
5.15%, 3/01/16

 

 

3,000

 

 

3,088,230

 

New York State Energy Research & Development
Authority, Refunding RB, Brooklyn Union
Gas/Keyspan, Series A, AMT (FGIC), 4.70%, 2/01/24

 

 

10,750

 

 

10,864,165

 

Suffolk County Industrial Development Agency New York,
RB, KeySpan, Port Jefferson, AMT, 5.25%, 6/01/27

 

 

4,625

 

 

4,588,925

 

Suffolk County Industrial Development Agency New York,
Refunding RB, Ogden Martin System Huntington,
AMT (AMBAC):

 

 

 

 

 

 

 

6.00%, 10/01/10

 

 

8,530

 

 

8,600,628

 

6.15%, 10/01/11

 

 

9,170

 

 

9,669,031

 

6.25%, 10/01/12

 

 

6,470

 

 

7,041,172

 

 

 

 

 

 



 

 

 

 

 

 

 

46,307,762

 









County/City/Special District/
School District — 34.4%

 

 

 

 

 

 

 

Amherst Development Corp., RB, UBF Faculty-Student
Housing Corp., Series A (AGM), 4.63%, 10/01/40

 

 

2,000

 

 

1,974,240

 

City of Buffalo New York, GO, School, Series D (NPFGC):

 

 

 

 

 

 

 

5.50%, 12/15/14

 

 

1,250

 

 

1,315,263

 

5.50%, 12/15/16

 

 

1,500

 

 

1,560,180

 

City of New York New York, GO, Refunding, Series 02-B
(AMBAC), 7.00%, 2/01/18

 

 

70

 

 

70,333

 

City of New York New York, GO, Series B (NPFGC):

 

 

 

 

 

 

 

5.75%, 8/01/10 (b)

 

 

915

 

 

924,287

 

5.75%, 8/01/13

 

 

365

 

 

370,172

 

City of Niagara Falls New York, GO, Water Treatment
Plant, AMT (NPFGC), 7.25%, 11/01/10

 

 

1,000

 

 

1,017,410

 

Dutchess County Resource Recovery Agency New York,
RB, Solid Waste System, Series A (NPFGC),
5.40%, 1/01/13

 

 

1,700

 

 

1,749,096

 

Erie County Industrial Development Agency, RB, City of
Buffalo Project (AGM), 5.75%, 5/01/20

 

 

1,900

 

 

2,033,741

 

Hudson Yards Infrastructure Corp., RB, Series A:

 

 

 

 

 

 

 

(FGIC), 5.00%, 2/15/47

 

 

12,150

 

 

11,757,798

 

(NPFGC), 4.50%, 2/15/47

 

 

17,525

 

 

16,066,044

 

New York City Industrial Development Agency, RB, PILOT:

 

 

 

 

 

 

 

CAB, Yankee Stadium (AGC), 6.50%, 3/01/39 (c)

 

 

5,000

 

 

935,550

 

CAB, Yankee Stadium, (AGC), 6.45%, 3/01/43 (c)

 

 

5,830

 

 

828,035

 

Queens Baseball Stadium, (AGC), 6.38%, 1/01/39

 

 

1,000

 

 

1,107,980

 

Queens Baseball Stadium, (AMBAC),
5.00%, 1/01/36

 

 

11,800

 

 

10,610,088

 

Queens Baseball Stadium, (AMBAC),
5.00%, 1/01/39

 

 

5,250

 

 

4,681,583

 

Queens Baseball Stadium, (AMBAC),
5.00%, 1/01/46

 

 

8,050

 

 

7,064,116

 

Yankee Stadium, (FGIC), 5.00%, 3/01/46

 

 

9,650

 

 

9,231,286

 

Yankee Stadium, (NPFGC), 5.00%, 3/01/36

 

 

3,500

 

 

3,474,870

 

New York City Transit Authority/Metropolitan Transit
Authority/Triborough Bridge & Tunnel Authority, COP,
Series A (AMBAC), 5.63%, 1/01/12

 

 

1,020

 

 

1,033,831

 

 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 









New York (continued)

 

 

 

 

 

 

 









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

 

 

 

 

 

 

 

New York City Transitional Finance Authority, RB:

 

 

 

 

 

 

 

Fiscal 2008, Series S-1, 4.50%, 1/15/38

 

$

1,700

 

$

1,686,723

 

Fiscal 2009, Series S-1 (AGC), 5.50%, 7/15/38

 

 

6,000

 

 

6,565,380

 

Fiscal 2009, Series S-4 (AGC), 5.50%, 1/15/39

 

 

1,500

 

 

1,648,800

 

Future Tax Secured, Series C (FGIC),
5.00%, 2/01/33

 

 

12,395

 

 

12,759,661

 

Future Tax Secured, Series E (NPFGC),
5.25%, 2/01/22

 

 

2,500

 

 

2,684,700

 

Series S-2 (AGM), 5.00%, 1/15/37

 

 

5,000

 

 

5,184,050

 

Series S-2 (NPFGC), 4.25%, 1/15/34

 

 

5,980

 

 

5,863,211

 

New York City Transitional Finance Authority, Refunding
RB, Series A (FGIC), 5.00%, 11/15/26

 

 

1,000

 

 

1,049,370

 

New York Convention Center Development Corp., RB,
Hotel Unit Fee Secured (AMBAC):

 

 

 

 

 

 

 

5.00%, 11/15/30

 

 

1,500

 

 

1,517,955

 

5.00%, 11/15/35

 

 

33,000

 

 

33,180,180

 

5.00%, 11/15/44

 

 

13,470

 

 

13,512,430

 

North Country Development Authority, Refunding RB
(AGM), 6.00%, 5/15/15

 

 

980

 

 

1,088,525

 

Sales Tax Asset Receivable Corp., RB, Series A (AMBAC),
5.00%, 10/15/32

 

 

11,200

 

 

11,770,416

 

Syracuse Industrial Development Agency New York, RB,
Carousel Center Project, Series A, AMT (Syncora),
5.00%, 1/01/36

 

 

11,500

 

 

8,233,655

 

Town of Huntington New York, GO, Refunding (AMBAC):

 

 

 

 

 

 

 

5.50%, 4/15/12

 

 

460

 

 

500,204

 

5.50%, 4/15/13

 

 

455

 

 

513,854

 

Town of North Hempstead New York, GO, Refunding,
Series B (NPFGC):

 

 

 

 

 

 

 

6.40%, 4/01/13

 

 

1,745

 

 

1,999,299

 

6.40%, 4/01/17

 

 

555

 

 

690,076

 

 

 

 

 

 



 

 

 

 

 

 

 

188,254,392

 









Education — 8.7%

 

 

 

 

 

 

 

City of Troy New York, Refunding RB, Rensselaer
Polytechnic, Series A, 5.13%, 9/01/40

 

 

1,225

 

 

1,244,723

 

Madison County Industrial Development Agency New
York, RB, Colgate University Project, Series A (AMBAC):

 

 

 

 

 

 

 

5.00%, 7/01/30

 

 

5,410

 

 

5,614,985

 

5.00%, 7/01/35

 

 

2,675

 

 

2,754,742

 

New York City Industrial Development Agency,
Refunding RB:

 

 

 

 

 

 

 

Nightingale-Bamford School (AMBAC),
5.25%, 1/15/18

 

 

1,275

 

 

1,374,679

 

Polytechnic University Project (ACA),
5.25%, 11/01/37

 

 

2,480

 

 

2,278,252

 

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

 

 

5,500

 

 

6,099,500

 

New York State Dormitory Authority, RB:

 

 

 

 

 

 

 

Mount Sinai School of Medicine, 5.13%, 7/01/39

 

 

2,500

 

 

2,518,575

 

Mount Sinai School of Medicine at New York
University (NPFGC), 5.00%, 7/01/35

 

 

7,100

 

 

7,107,952

 

New York University, Series 1 (AMBAC),
5.50%, 7/01/40

 

 

4,580

 

 

5,472,413

 

Rensselaer County Industrial Development Agency
New York, RB, Polytechnic Institute, Series B (AMBAC),
5.50%, 8/01/22

 

 

1,255

 

 

1,265,542

 


See Notes to Financial Statements.

 

 

 


ANNUAL REPORT

JULY 31, 2010

27




 

 



 

 

Schedule of Investments (continued)

BlackRock MuniYield New York Insured Fund, Inc. (MYN)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 









New York (continued)

 

 

 

 

 

 

 









Education (concluded)

 

 

 

 

 

 

 

Trust for Cultural Resources, RB, Carnegie Hall, Series A:

 

 

 

 

 

 

 

4.75%, 12/01/39

 

$

3,550

 

$

3,579,110

 

5.00%, 12/01/39

 

 

2,150

 

 

2,209,619

 

Trust for Cultural Resources, Refunding RB, American
Museum of Natural History, Series A (NPFGC):

 

 

 

 

 

 

 

5.00%, 7/01/36

 

 

5,250

 

 

5,436,270

 

5.00%, 7/01/44

 

 

500

 

 

511,395

 

 

 

 

 

 



 

 

 

 

 

 

 

47,467,757

 









Health — 6.2%

 

 

 

 

 

 

 

New York City Industrial Development Agency, RB, Royal
Charter, New York Presbyterian (AGM),
5.75%, 12/15/29

 

 

7,970

 

 

8,493,151

 

New York State Dormitory Authority, MRB, Montefiore
Hospital (NPFGC), 5.00%, 8/01/33

 

 

1,500

 

 

1,517,460

 

New York State Dormitory Authority, RB:

 

 

 

 

 

 

 

Hudson Valley Hospital (BHAC), 5.00%, 8/15/36

 

 

6,000

 

 

6,304,800

 

New York & Presbyterian Hospital (AGM),
5.25%, 2/15/31

 

 

3,000

 

 

3,148,890

 

New York & Presbyterian Hospital (AGM),
5.00%, 8/15/36

 

 

5,000

 

 

5,095,050

 

New York State Rehabilitation Association, Series A
(CIFG), 5.25%, 7/01/19

 

 

1,180

 

 

1,218,739

 

New York State Rehabilitation Association, Series A
(CIFG), 5.13%, 7/01/23

 

 

1,000

 

 

1,010,890

 

North Shore-Long Island Jewish Health System,
Series A, 5.50%, 5/01/37

 

 

2,075

 

 

2,144,678

 

Series B (NPFGC), 6.50%, 2/15/11 (d)

 

 

1,000

 

 

1,034,140

 

New York State Dormitory Authority, Refunding RB,
St. Luke’s Roosevelt Hospital (FHA), 4.90%, 8/15/31

 

 

2,900

 

 

2,878,105

 

Oneida County Industrial Development Agency New York,
RB, Civic Facility, Mohawk Valley, Series a (AGM),
5.20%, 2/01/13

 

 

1,050

 

 

1,067,168

 

 

 

 

 

 



 

 

 

 

 

 

 

33,913,071

 









Housing — 2.9%

 

 

 

 

 

 

 

Monroe County Industrial Development Agency, IDRB,
Southview Towers Project, AMT (SONYMA):

 

 

 

 

 

 

 

6.13%, 2/01/20

 

 

1,125

 

 

1,137,971

 

6.25%, 2/01/31

 

 

1,125

 

 

1,137,195

 

New York City Housing Development Corp., RB, AMT:

 

 

 

 

 

 

 

Series C, 5.00%, 11/01/26

 

 

1,500

 

 

1,519,230

 

Series C, 5.05%, 11/01/36

 

 

2,000

 

 

1,926,640

 

Series H-1, 4.70%, 11/01/40

 

 

1,340

 

 

1,253,208

 

New York Mortgage Agency, Refunding RB, AMT:

 

 

 

 

 

 

 

Homeowner Mortgage, Series 97, 5.50%, 4/01/31

 

 

1,020

 

 

1,023,040

 

Series 133, 4.95%, 10/01/21

 

 

520

 

 

529,350

 

Series 143, 4.90%, 10/01/37

 

 

990

 

 

959,577

 

Series 143 (NPFGC), 4.85%, 10/01/27

 

 

2,485

 

 

2,493,275

 

New York State HFA, RB, St. Philip’s Housing, Series A,
AMT (Fannie Mae), 4.65%, 11/15/38

 

 

1,500

 

 

1,480,140

 

Yonkers Industrial Development Agency New York, RB,
Monastery Manor Associates LP Project, AMT
(SONYMA), 5.25%, 4/01/37

 

 

2,445

 

 

2,420,575

 

 

 

 

 

 



 

 

 

 

 

 

 

15,880,201

 









 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 









New York (continued)

 

 

 

 

 

 

 









State — 8.3%

 

 

 

 

 

 

 

New York State Dormitory Authority, RB:

 

 

 

 

 

 

 

Master BOCES Program Lease (AGC),
5.00%, 8/15/28

 

$

1,750

 

$

1,838,252

 

Mental Health Facilities, Series B, 5.25%,
2/15/14 (b)

 

 

1,570

 

 

1,782,217

 

Mental Health Services Facilities, Series C, AMT
(AGM), 5.40%, 2/15/33

 

 

6,460

 

 

6,552,313

 

School Districts Financing Program, Series A (AGM),
5.00%, 10/01/35

 

 

550

 

 

569,388

 

School Districts Financing Program, Series C (AGM),
5.00%, 10/01/37

 

 

4,050

 

 

4,187,700

 

School Districts Financing Program, Series E
(NPFGC), 5.75%, 10/01/30

 

 

6,900

 

 

7,316,277

 

New York State Dormitory Authority, Refunding RB,
School Districts Financing Program, Series B (AGM),
5.00%, 4/01/36

 

 

5,000

 

 

5,183,300

 

New York State Thruway Authority, RB:

 

 

 

 

 

 

 

Second General, Series B, 5.00%, 4/01/27

 

 

1,500

 

 

1,610,985

 

Series A (AMBAC), 5.00%, 4/01/26

 

 

4,380

 

 

4,661,678

 

New York State Urban Development Corp., RB (NPFGC):

 

 

 

 

 

 

 

Personal Income Tax, Series C-1, 5.00%,
3/15/13 (b)

 

 

3,000

 

 

3,356,130

 

State Personal Income Tax, State Facilities,
Series A-1, 5.00%, 3/15/29

 

 

5,000

 

 

5,196,050

 

New York State Urban Development Corp., Refunding
RB, Correctional Capital Facilities, Series A (AGM),
6.50%, 1/01/11

 

 

3,190

 

 

3,269,654

 

 

 

 

 

 



 

 

 

 

 

 

 

45,523,944

 









Tobacco — 1.8%

 

 

 

 

 

 

 

Tobacco Settlement Financing Corp. New York, RB,
Asset-Backed:

 

 

 

 

 

 

 

Series A-1 (AMBAC), 5.25%, 6/01/20

 

 

5,000

 

 

5,435,900

 

Series A-1 (AMBAC), 5.25%, 6/01/22

 

 

2,000

 

 

2,161,180

 

Series B-1C, 5.50%, 6/01/22

 

 

1,900

 

 

2,078,999

 

 

 

 

 

 



 

 

 

 

 

 

 

9,676,079

 









Transportation — 30.2%

 

 

 

 

 

 

 

Hudson Yards Infrastructure Corp., RB:

 

 

 

 

 

 

 

(AGC), 5.00%, 2/15/47

 

 

4,300

 

 

4,389,311

 

Series A (AGC), 5.00%, 2/15/47

 

 

550

 

 

561,424

 

Series A (AGM), 5.00%, 2/15/47

 

 

3,000

 

 

3,062,310

 

Metropolitan Transportation Authority, RB:

 

 

 

 

 

 

 

Series 2008-C, 6.50%, 11/15/28

 

 

3,200

 

 

3,735,008

 

Transportation, Series A (NPFGC),
5.00%, 11/15/32

 

 

1,295

 

 

1,309,387

 

Metropolitan Transportation Authority, Refunding RB:

 

 

 

 

 

 

 

Series A, 5.13%, 1/01/29

 

 

1,450

 

 

1,492,790

 

Series A (AGM), 5.00%, 11/15/32

 

 

1,015

 

 

1,051,012

 

Series A (AGM), 5.75%, 11/15/32

 

 

29,300

 

 

31,183,990

 

Series A (NPFGC), 5.13%, 11/15/22

 

 

1,390

 

 

1,472,580

 

Series A (NPFGC), 5.00%, 11/15/30

 

 

6,600

 

 

6,839,118

 

Series A (NPFGC), 5.25%, 11/15/31

 

 

2,500

 

 

2,574,500

 

Series C (AGM), 5.13%, 7/01/12 (b)

 

 

1,640

 

 

1,791,995

 

Transportation, Series F (NPFGC), 5.25%,
11/15/12 (b)

 

 

6,235

 

 

6,926,399

 

Transportation, Series F (NPFGC),
5.00%, 11/15/31

 

 

5,000

 

 

5,052,450

 


See Notes to Financial Statements.

 

 

 


28

ANNUAL REPORT

JULY 31, 2010




 

 



 

 

Schedule of Investments (continued)

BlackRock MuniYield New York Insured Fund, Inc. (MYN)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 









New York (concluded)

 

 

 

 

 

 

 









Transportation (concluded)

 

 

 

 

 

 

 

New York State Thruway Authority, RB:

 

 

 

 

 

 

 

Series F (AMBAC), 5.00%, 1/01/30

 

$

6,000

 

$

6,184,260

 

Series G (AGM), 4.75%, 1/01/29

 

 

7,250

 

 

7,457,785

 

Series G (AGM), 4.75%, 1/01/30

 

 

9,000

 

 

9,217,620

 

Series G (AGM), 5.00%, 1/01/30

 

 

2,000

 

 

2,084,820

 

Series G (AGM), 5.00%, 1/01/32

 

 

1,030

 

 

1,066,709

 

Niagara Falls Bridge Commission, Refunding RB, Bridge
System, Series A (AGC), 4.00%, 10/01/19

 

 

3,900

 

 

4,217,967

 

Niagara Frontier Transportation Authority New York, RB,
Buffalo Niagara International Airport, Series B
(NPFGC), 5.50%, 4/01/19

 

 

2,705

 

 

2,722,528

 

Port Authority of New York & New Jersey, RB:

 

 

 

 

 

 

 

Consolidated, 116th Series, 4.13%, 9/15/32

 

 

2,700

 

 

2,657,880

 

Consolidated, 161st Series, 4.50%, 10/15/37

 

 

1,000

 

 

1,012,740

 

Special Project, JFK International Air Terminal,
Series 6, AMT (NPFGC), 6.25%, 12/01/10

 

 

14,750

 

 

14,888,060

 

Special Project, JFK International Air Terminal,
Series 6, AMT (NPFGC), 6.25%, 12/01/11

 

 

7,175

 

 

7,409,049

 

Special Project, JFK International Air Terminal,
Series 6, AMT (NPFGC), 6.25%, 12/01/13

 

 

4,425

 

 

4,712,846

 

Special Project, JFK International Air Terminal,
Series 6, AMT (NPFGC), 6.25%, 12/01/14

 

 

7,380

 

 

7,898,076

 

Special Project, JFK International Air Terminal,
Series 6, AMT (NPFGC), 5.75%, 12/01/22

 

 

10,160

 

 

10,170,770

 

Special Project, JFK International Air Terminal,
Series 6, AMT (NPFGC), 5.75%, 12/01/25

 

 

3,500

 

 

3,505,005

 

Triborough Bridge & Tunnel Authority, RB:

 

 

 

 

 

 

 

Sub-Series A (NPFGC), 5.25%, 11/15/30

 

 

6,000

 

 

6,355,260

 

Subordinate Bonds (AMBAC), 5.00%, 11/15/28

 

 

2,465

 

 

2,556,353

 

 

 

 

 

 



 

 

 

 

 

 

 

165,560,002

 









Utilities — 11.1%

 

 

 

 

 

 

 

Buffalo Sewer Authority New York, Refunding RB,
Series F (NPFGC), 6.00%, 7/01/13

 

 

3,315

 

 

3,541,050

 

Long Island Power Authority, RB, Series A (AMBAC),
5.00%, 9/01/29

 

 

7,000

 

 

7,176,260

 

Long Island Power Authority, Refunding RB:

 

 

 

 

 

 

 

General, Series A (AGC), 6.00%, 5/01/33

 

 

1,500

 

 

1,724,385

 

General, Series B (AGM), 5.00%, 12/01/35

 

 

4,000

 

 

4,128,360

 

Series A (AGC), 5.75%, 4/01/39

 

 

1,015

 

 

1,140,028

 

New York City Municipal Water Finance Authority, RB:

 

 

 

 

 

 

 

Series A (AMBAC), 5.00%, 6/15/35

 

 

3,500

 

 

3,587,325

 

Series A (NPFGC), 5.75%, 6/15/11 (b)

 

 

24,650

 

 

25,840,841

 

Series DD (AGM), 4.50%, 6/15/39

 

 

1,000

 

 

999,950

 

New York City Municipal Water Finance Authority,
Refunding RB:

 

 

 

 

 

 

 

Fiscal 2004, Series C (NPFGC), 5.00%, 6/15/35

 

 

975

 

 

1,007,156

 

Series A (AGM), 4.25%, 6/15/39

 

 

500

 

 

490,030

 

Series A (NPFGC), 5.13%, 6/15/34

 

 

1,250

 

 

1,298,225

 

Series D (AGM), 5.00%, 6/15/37

 

 

9,000

 

 

9,309,960

 

Series F (AGM), 5.00%, 6/15/29

 

 

500

 

 

504,750

 

 

 

 

 

 



 

 

 

 

 

 

 

60,748,320

 









Total Municipal Bonds in New York

 

 

 

 

 

613,331,528

 









 

 

 

 

 

 

 

 









Guam — 1.3%

 

 

 

 

 

 

 









Transportation — 0.8%

 

 

 

 

 

 

 

Guam International Airport Authority, Refunding RB,
General, Series C, AMT (NPFGC):

 

 

 

 

 

 

 

5.25%, 10/01/21

 

 

2,240

 

 

2,242,912

 

5.25%, 10/01/22

 

 

2,050

 

 

2,052,009

 

 

 

 

 

 



 

 

 

 

 

 

 

4,294,921

 









 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 









Guam (concluded)

 

 

 

 

 

 

 









Utilities — 0.5%

 

 

 

 

 

 

 

Guam Power Authority, Refunding RB, Series A (AGM),
5.00%, 10/01/37

 

$

2,730

 

$

2,734,122

 









Total Municipal Bonds in Guam

 

 

 

 

 

7,029,043

 









 

 

 

 

 

 

 

 









Puerto Rico — 15.2%

 

 

 

 

 

 

 









County/City/Special District/
School District — 0.7%

 

 

 

 

 

 

 

Puerto Rico Sales Tax Financing Corp., RB, First
Sub-Series A (AGM), 5.00%, 8/01/40

 

 

2,100

 

 

2,147,838

 

Puerto Rico Sales Tax Financing Corp., Refunding RB,
CAB, Series A (NPFGC), 5.78%, 8/01/41 (c)

 

 

12,800

 

 

1,926,272

 

 

 

 

 

 



 

 

 

 

 

 

 

4,074,110

 









Housing — 0.7%

 

 

 

 

 

 

 

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

 

 

4,000

 

 

4,038,920

 









State — 7.3%

 

 

 

 

 

 

 

Commonwealth of Puerto Rico, GO, Refunding:

 

 

 

 

 

 

 

Public Improvement, Series A (NPFGC),
5.50%, 7/01/20

 

 

2,000

 

 

2,162,700

 

Public Improvement, Series A (NPFGC),
5.50%, 7/01/21

 

 

3,000

 

 

3,203,040

 

Public Improvement, Series A-4 (AGM),
5.25%, 7/01/30

 

 

2,150

 

 

2,212,522

 

Sub-Series C-7 (NPFGC), 6.00%, 7/01/27

 

 

2,000

 

 

2,136,120

 

Sub-Series C-7 (NPFGC), 6.00%, 7/01/28

 

 

4,775

 

 

5,083,895

 

Puerto Rico Commonwealth Infrastructure Financing
Authority, RB, CAB, Series A (c):

 

 

 

 

 

 

 

(AMBAC), 4.67%, 7/01/35

 

 

3,900

 

 

744,354

 

(AMBAC), 5.02%, 7/01/43

 

 

8,000

 

 

848,880

 

(FGIC), 4.62%, 7/01/31

 

 

22,030

 

 

5,615,447

 

Puerto Rico Convention Center Authority, RB, Series A
(AMBAC), 5.00%, 7/01/31

 

 

4,000

 

 

3,888,600

 

Puerto Rico Highway & Transportation Authority,
Refunding RB, Series CC (AGM):

 

 

 

 

 

 

 

5.50%, 7/01/31

 

 

5,000

 

 

5,375,950

 

5.25%, 7/01/32

 

 

1,000

 

 

1,035,730

 

Puerto Rico Public Buildings Authority, Refunding RB,
Government Facilities, Series M-3 (NPFGC),
6.00%, 7/01/28

 

 

2,850

 

 

3,007,662

 

Puerto Rico Sales Tax Financing Corp., RB, First
Sub-Series A, 5.75%, 8/01/37

 

 

4,500

 

 

4,709,070

 

 

 

 

 

 



 

 

 

 

 

 

 

40,023,970

 









Transportation — 3.9%

 

 

 

 

 

 

 

Puerto Rico Highway & Transportation Authority, RB:

 

 

 

 

 

 

 

Series G (FGIC), 5.25%, 7/01/13 (b)

 

 

655

 

 

745,259

 

Series G (FGIC), 5.25%, 7/01/19

 

 

2,265

 

 

2,345,679

 

Series G (FGIC), 5.25%, 7/01/21

 

 

345

 

 

349,778

 

Series Y (AGM), 6.25%, 7/01/21

 

 

6,275

 

 

7,109,073

 

Puerto Rico Highway & Transportation Authority,
Refunding RB:

 

 

 

 

 

 

 

Series AA-1 (AGM), 4.95%, 7/01/26

 

 

1,250

 

 

1,294,563

 

Series CC (AGM), 5.25%, 7/01/33

 

 

1,000

 

 

1,035,220

 

Series CC (AGM), 5.25%, 7/01/36

 

 

4,750

 

 

4,935,345

 

Series D, 5.75%, 7/01/12 (b)

 

 

3,000

 

 

3,296,820

 

 

 

 

 

 



 

 

 

 

 

 

 

21,111,737

 










See Notes to Financial Statements.

 

 

 


ANNUAL REPORT

JULY 31, 2010

29




 

 



 

 

Schedule of Investments (continued)

BlackRock MuniYield New York Insured Fund, Inc. (MYN)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 









Puerto Rico (concluded)

 

 

 

 

 

 

 









Utilities — 2.6%

 

 

 

 

 

 

 

Puerto Rico Aqueduct & Sewer Authority, RB, Senior
Lien, Series A (AGC), 5.13%, 7/01/47

 

$

10,980

 

$

11,084,859

 

Puerto Rico Electric Power Authority, Refunding RB,
Series VV (NPFGC), 5.25%, 7/01/30

 

 

3,000

 

 

3,109,170

 

 

 

 

 

 



 

 

 

 

 

 

 

14,194,029

 









Total Municipal Bonds in Puerto Rico

 

 

 

 

 

83,442,766

 









Total Municipal Bonds — 128.5%

 

 

 

 

 

703,803,337

 









 

 

 

 

 

 

 

 







 

 

 

 

 

 

 

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (e)

 

 

 

 

 

 

 









New York — 28.3%

 

 

 

 

 

 

 









County/City/Special District/
School District — 11.2%

 

 

 

 

 

 

 

City of New York New York, GO:

 

 

 

 

 

 

 

Series J, 5.00%, 5/15/23

 

 

6,750

 

 

7,259,017

 

Sub-Series C-3 (AGC), 5.75%, 8/15/28

 

 

14,400

 

 

16,397,712

 

New York State Dormitory Authority, RB, State University
Dormitory Facilities, Series A, 5.25%, 7/01/29

 

 

6,000

 

 

6,553,080

 

Sales Tax Asset Receivable Corp., RB, Series A (AMBAC):

 

 

 

 

 

 

 

5.25%, 10/15/27

 

 

13,000

 

 

14,007,435

 

5.00%, 10/15/32

 

 

16,000

 

 

17,239,920

 

 

 

 

 

 



 

 

 

 

 

 

 

61,457,164

 









Education — 1.3%

 

 

 

 

 

 

 

New York State Dormitory Authority, RB, New York
University, Series A, 5.00%, 7/01/38

 

 

6,498

 

 

6,791,687

 









State — 1.6%

 

 

 

 

 

 

 

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

 

 

7,850

 

 

8,935,419

 









Transportation — 12.8%

 

 

 

 

 

 

 

Metropolitan Transportation Authority, RB, Series A
(NPFGC), 5.00%, 11/15/31

 

 

3,901

 

 

4,045,583

 

Metropolitan Transportation Authority, Refunding RB,
Series A (AGM), 5.00%, 11/15/30

 

 

8,460

 

 

8,710,585

 

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

 

 

16,000

 

 

16,570,240

 

New York State Thruway Authority, Refunding RB,
Series H (AGM), 5.00%, 1/01/37

 

 

10,000

 

 

10,388,800

 

Port Authority of New York & New Jersey, RB,
Consolidated, 155th Series, AMT (AGM),
5.13%, 7/15/30

 

 

2,500

 

 

2,559,825

 

Triborough Bridge & Tunnel Authority, Refunding
RB (NPFGC):

 

 

 

 

 

 

 

5.25%, 11/15/23

 

 

7,000

 

 

7,472,430

 

5.00%, 11/15/32

 

 

19,677

 

 

20,541,906

 

 

 

 

 

 



 

 

 

 

 

 

 

70,289,369

 









Utilities — 1.4%

 

 

 

 

 

 

 

New York City Municipal Water Finance Authority, RB:

 

 

 

 

 

 

 

Fiscal 2009, Series A, 5.75%, 6/15/40

 

 

4,094

 

 

4,635,821

 

Series FF-2, 5.50%, 6/15/40

 

 

2,759

 

 

3,081,134

 

 

 

 

 

 



 

 

 

 

 

 

 

7,716,955

 









Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 28.3%

 

 

 

 

 

155,190,594

 









Total Long-Term Investments
(Cost — $842,256,608) — 156.8%

 

 

 

 

 

858,993,931

 









 

 

 

 

 

 

 

 

Short-Term Securities

 

Shares

 

Value

 







BIF New York Municipal Money Fund, 0.00% (f)(g)

 

 

8,174,307

 

$

8,174,307

 









Total Short-Term Securities
(Cost — $8,174,307) — 1.5%

 

 

 

 

 

8,174,307

 









Total Investments (Cost — $850,430,915*) — 158.3%

 

 

 

 

 

867,168,238

 

Other Assets Less Liabilities — 1.3%

 

 

 

 

 

7,039,770

 

Liability for Trust Certificates, Including
Interest Expense and Fees Payable — (14.4)%

 

 

 

 

 

(78,668,293

)

Preferred Shares, at Redemption Value — (45.2)%

 

 

 

 

 

(247,727,761

)

 

 

 

 

 



 

Net Assets Applicable to Common Shares — 100.0%

 

 

 

 

$

547,811,954

 

 

 

 

 

 



 


 

 

 


 

*

The cost and unrealized appreciation (depreciation) of investments as of July 31, 2010, as computed for federal income tax purposes, were as follows:


 

 

 

 

 

 

 

 

 

 

Aggregate cost

 

 

 

 

$

772,433,192

 

 

 

 

 

 

 



 

 

Gross unrealized appreciation

 

 

 

 

$

32,025,791

 

 

Gross unrealized depreciation

 

 

 

 

 

(15,905,549

)

 

 

 

 

 

 



 

 

Net unrealized appreciation

 

 

 

 

$

16,120,242

 

 

 

 

 

 

 



 


 

 

(a)

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

 

 

(b)

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.

 

 

(c)

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

 

 

(d)

Security is collateralized by Municipal or US Treasury obligations.

 

 

(e)

Securities represent bonds transferred to a tender option bond trust 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 tender option bond trusts.

 

 

(f)

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, are as follows:


 

 

 

 

 

 

 

 

 

 

 

 











 

Affiliate

 

Shares at
July 31,
2009

 

Net
Activity

 

Shares at
July 31,
2010

 

Income

 

 











 

BIF New York Municipal
Money Fund

 

12,807,239

 

(4,632,932)

 

8,174,307

 

$1,864

 

 











 

 

 

 

 

 

 

 

 

 

 

(g)

Represents the current yield as of report date.


See Notes to Financial Statements.

 

 

 


30

ANNUAL REPORT

JULY 31, 2010




 

 



 

 

Schedule of Investments (concluded)

BlackRock MuniYield New York Insured Fund, Inc. (MYN)


 

 

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

 

 

Financial futures contracts sold as of July 31, 2010 were as follows:


 

 

 

 

 

 

 

 

 

 

 










 

Contracts

 

Issue

 

Expiration
Date

 

Notional
Value

 

Unrealized
Depreciation

 










 

110

 

10-Year U.S.
Treasury Bond

 

September 2010

 

$13,478,196

 

$(141,179)

 











 

 

 

Fair Value Measurements — Various inputs are used in determining the fair value of investments and derivatives, which are 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 derivatives) 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 other significant accounting policies, please refer to Note 1 of the Notes to Financial Statements.

 

 

 

 

The following table summarize the inputs used as of July 31, 2010 in determining the fair valuation of the Fund’s investments and derivatives:


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 











 

Valuation Inputs

 

Level 1

 

Level 2

 

Level 3

 

Total

 

 











 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments in Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-Term Investments1

 

 

 

$

858,993,931

 

 

 

$

858,993,931

 

 

Short-Term Securities

 

$

8,174,307

 

 

 

 

 

 

8,174,307

 

 

 

 













 

Total

 

$

8,174,307

 

$

858,993,931

 

 

 

$

867,168,238

 

 

 

 














 

 

 

 

1

See above Schedule of Investments for values in each sector.


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





 

 

 

Derivative Financial Instruments2

 

 





 

Valuation Inputs

 

Level 1

 

Level 2

 

Level 3

 

Total

 

 











 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate contracts

 

$

(141,179

)

 

 

 

 

$

(141,179

)

 

 

 














 

 

 

 

2

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


See Notes to Financial Statements.

 

 

 


ANNUAL REPORT

JULY 31, 2010

31




 


 

Statements of Assets and Liabilities


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

July 31, 2010

 

BlackRock
MuniHoldings
Insured
Fund II, Inc.
(MUE)

 

BlackRock
MuniYield
California
Insured
Fund, Inc.
(MCA)

 

BlackRock
MuniYield
Insured
Fund, Inc.
(MYI)

 

BlackRock
MuniYield
Michigan
Insured
Fund II, Inc.
(MYM)

 

BlackRock
MuniYield
New York
Insured
Fund, Inc.
(MYN)

 













Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


















Investments at value — unaffiliated1

 

$

476,057,682

 

$

795,116,092

 

$

1,447,318,645

 

$

260,580,004

 

$

858,993,931

 

Investments at value — affiliated2

 

 

17,366,850

 

 

39,049,939

 

 

11,426,470

 

 

605,019

 

 

8,174,307

 

Interest receivable

 

 

5,178,163

 

 

10,200,712

 

 

16,926,873

 

 

2,989,970

 

 

9,799,144

 

Investments sold receivable

 

 

728,642

 

 

 

 

3,269,094

 

 

 

 

416,126

 

Cash pledged as collateral for financial futures contracts

 

 

 

 

72,000

 

 

288,600

 

 

 

 

160,000

 

Income receivable — affiliated

 

 

 

 

298

 

 

538

 

 

 

 

322

 

Prepaid expenses

 

 

17,761

 

 

32,868

 

 

52,110

 

 

9,639

 

 

30,216

 

Other assets

 

 

 

 

81,449

 

 

147,199

 

 

 

 

87,939

 

 

 
















Total assets

 

 

499,349,098

 

 

844,553,358

 

 

1,479,429,529

 

 

264,184,632

 

 

877,661,985

 

 

 
















 


















Accrued Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


















Income dividends payable — Common Shares

 

 

1,644,855

 

 

2,336,562

 

 

4,781,213

 

 

862,985

 

 

2,761,217

 

Investment advisory fees payable

 

 

207,323

 

 

349,684

 

 

640,858

 

 

114,720

 

 

380,120

 

Interest expense and fees payable

 

 

44,715

 

 

90,793

 

 

116,599

 

 

5,192

 

 

53,489

 

Bank overdraft

 

 

1,580

 

 

 

 

 

 

 

 

257

 

Officer’s and Directors’ fees payable

 

 

517

 

 

83,233

 

 

149,541

 

 

555

 

 

90,156

 

Investments purchased payable

 

 

 

 

 

 

1,035,157

 

 

 

 

 

Margin variation payable

 

 

 

 

30,188

 

 

132,970

 

 

 

 

79,063

 

Other affiliates payable

 

 

3,036

 

 

4,888

 

 

9,190

 

 

1,652

 

 

5,496

 

Other accrued expenses payable

 

 

80,421

 

 

103,524

 

 

163,081

 

 

39,937

 

 

137,668

 

 

 
















Total accrued liabilities

 

 

1,982,447

 

 

2,998,872

 

 

7,028,609

 

 

1,025,041

 

 

3,507,466

 

 

 
















 


















Other Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


















Trust certificates3

 

 

62,692,934

 

 

171,137,421

 

 

195,663,221

 

 

9,030,000

 

 

78,614,804

 

 

 
















Total Liabilities

 

 

64,675,381

 

 

174,136,293

 

 

202,691,830

 

 

10,055,041

 

 

82,122,270

 

 

 
















 


















Preferred Shares at Redemption Value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


















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

 

 

131,006,425

 

 

166,548,530

 

 

356,503,871

 

 

87,356,716

 

 

247,727,761

 

 

 
















Net Assets Applicable to Common Shareholders

 

$

303,667,292

 

$

503,868,535

 

$

920,233,828

 

$

166,772,875

 

$

547,811,954

 

 

 
















 


















Net Assets Applicable to Common Shareholders Consist of

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


















Paid-in capital6

 

$

298,489,577

 

$

497,660,786

 

$

950,073,268

 

$

163,265,826

 

$

550,614,764

 

Undistributed net investment income

 

 

5,775,447

 

 

7,131,653

 

 

15,893,163

 

 

2,891,775

 

 

9,642,252

 

Accumulated net realized loss

 

 

(15,532,646

)

 

(17,822,637

)

 

(88,098,099

)

 

(3,323,530

)

 

(29,041,206

)

Net unrealized appreciation/depreciation

 

 

14,934,914

 

 

16,898,733

 

 

42,365,496

 

 

3,938,804

 

 

16,596,144

 

 

 
















Net Assets Applicable to Common Shareholders

 

$

303,667,292

 

$

503,868,535

 

$

920,233,828

 

$

166,772,875

 

$

547,811,954

 

 

 
















Net asset value per Common Share

 

$

13.57

 

$

14.66

 

$

13.67

 

$

13.82

 

$

13.89

 

 

 
















1

Investments at cost — unaffiliated

 

$

461,122,768

 

$

778,127,360

 

$

1,404,553,836

 

$

256,641,200

 

$

842,256,608

 

 

 
















2

Investments at cost — affiliated

 

$

17,366,850

 

$

39,049,939

 

$

11,426,470

 

$

605,019

 

$

8,174,307

 

 

 
















3

Represents short-term floating rate certificates issued by tender option bond trusts.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4

Preferred Shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Par value $0.05 per share

 

 

 

 

 

 

 

 

1,941

 

 

9,908

 

 

 
















 

Par value $0.10 per share

 

 

5,240

 

 

6,661

 

 

14,258

 

 

1,553

 

 

 

 

 
















5

Preferred Shares authorized

 

 

8,180

 

 

11,000

 

 

22,800

 

 

3,960

 

 

12,160

 

 

 
















6

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

 

 

22,378,982

 

 

34,361,200

 

 

67,341,031

 

 

12,069,721

 

 

39,445,962

 

 

 

















 

 

 

 

See Notes to Financial Statements.


32

ANNUAL REPORT

JULY 31, 2010

 




 


 

Statements of Operations


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended July 31, 2010

 

BlackRock
MuniHoldings
Insured
Fund II, Inc.
(MUE)

 

BlackRock
MuniYield
California
Insured
Fund, Inc.
(MCA)

 

BlackRock
MuniYield
Insured
Fund, Inc.
(MYI)

 

BlackRock
MuniYield
Michigan
Insured
Fund II, Inc.
(MYM)

 

BlackRock
MuniYield
New York
Insured
Fund, Inc.
(MYN)

 













Investment Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


















Interest

 

$

23,861,814

 

$

35,367,445

 

$

69,970,645

 

$

12,754,991

 

$

41,487,339

 

Income — affiliated

 

 

20,203

 

 

11,158

 

 

51,026

 

 

607

 

 

8,102

 

 

 
















Total income

 

 

23,882,017

 

 

35,378,603

 

 

70,021,671

 

 

12,755,598

 

 

41,495,441

 

 

 
















 


















Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


















Investment advisory

 

 

2,685,496

 

 

3,830,077

 

 

7,110,537

 

 

1,297,170

 

 

4,265,789

 

Commissions for Preferred Shares

 

 

197,045

 

 

247,092

 

 

533,484

 

 

125,357

 

 

369,631

 

Accounting services

 

 

129,214

 

 

202,931

 

 

364,022

 

 

61,220

 

 

250,156

 

Professional

 

 

71,025

 

 

77,278

 

 

107,444

 

 

49,599

 

 

80,898

 

Transfer agent

 

 

48,842

 

 

73,197

 

 

130,330

 

 

42,117

 

 

79,992

 

Officer and Directors

 

 

32,850

 

 

67,581

 

 

122,074

 

 

18,420

 

 

72,701

 

Custodian

 

 

25,659

 

 

36,692

 

 

59,255

 

 

15,045

 

 

38,665

 

Printing

 

 

16,882

 

 

26,841

 

 

50,309

 

 

10,382

 

 

32,866

 

Registration

 

 

9,330

 

 

11,926

 

 

23,358

 

 

9,330

 

 

13,690

 

Miscellaneous

 

 

97,105

 

 

114,688

 

 

166,388

 

 

69,576

 

 

121,334

 

 

 
















Total expenses excluding interest expense and fees

 

 

3,313,448

 

 

4,688,303

 

 

8,667,201

 

 

1,698,216

 

 

5,325,722

 

Interest expense and fees1

 

 

476,296

 

 

778,231

 

 

1,246,969

 

 

60,661

 

 

562,878

 

 

 
















Total expenses

 

 

3,789,744

 

 

5,466,534

 

 

9,914,170

 

 

1,758,877

 

 

5,888,600

 

Less fees waived by advisor

 

 

(377,122

)

 

(41,394

)

 

(18,525

)

 

(11,844

)

 

(22,804

)

 

 
















Total expenses after fees waived

 

 

3,412,622

 

 

5,425,140

 

 

9,895,645

 

 

1,747,033

 

 

5,865,796

 

 

 
















Net investment income

 

 

20,469,395

 

 

29,953,463

 

 

60,126,026

 

 

11,008,565

 

 

35,629,645

 

 

 
















 


















Realized and Unrealized Gain (Loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


















Net realized gain (loss) from:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments

 

 

813,164

 

 

235,183

 

 

(353,293

)

 

999,481

 

 

94,856

 

Financial futures contracts

 

 

35,900

 

 

(89,360

)

 

336,701

 

 

(45,754

)

 

5,668

 

 

 
















 

 

 

849,064

 

 

145,823

 

 

(16,592

)

 

953,727

 

 

100,524

 

 

 
















Net change in unrealized appreciation/depreciation on:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments

 

 

27,313,334

 

 

39,486,177

 

 

88,362,379

 

 

9,751,120

 

 

42,259,782

 

Financial futures contracts

 

 

 

 

(89,999

)

 

(399,313

)

 

 

 

(141,179

)

 

 
















 

 

 

27,313,334

 

 

39,396,178

 

 

87,963,066

 

 

9,751,120

 

 

42,118,603

 

 

 
















Total realized and unrealized gain

 

 

28,162,398

 

 

39,542,001

 

 

87,946,474

 

 

10,704,847

 

 

42,219,127

 

 

 
















 


















Dividends to Preferred Shareholders From

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


















Net investment income

 

 

(546,058

)

 

(982,980

)

 

(2,350,328

)

 

(458,167

)

 

(1,419,084

)

 

 
















Net Increase in Net Assets Applicable to Common Shareholders Resulting from Operations

 

$

48,085,735

 

$

68,512,484

 

$

145,722,172

 

$

21,255,245

 

$

76,429,688

 

 

 

















 

 

1

Related to tender option bond trusts.


 

 

 

 

See Notes to Financial Statements.


 

ANNUAL REPORT

JULY 31, 2010

33




 

 



 

 

Statements of Changes in Net Assets

BlackRock MuniHoldings Insured Fund II, Inc. (MUE)


 

 

 

 

 

 

 

 

 

 

Year Ended July 31,

 

 

 



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

 

2010

 

2009

 







Operations

 

 

 

 

 

 

 









Net investment income

 

$

20,469,395

 

$

20,160,412

 

Net realized gain (loss)

 

 

849,064

 

 

(11,811,410

)

Net change in unrealized appreciation/depreciation

 

 

27,313,334

 

 

(4,009,106

)

Dividends to Preferred Shareholders from net investment income

 

 

(546,058

)

 

(2,736,892

)

 

 







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

 

 

48,085,735

 

 

1,603,004

 

 

 







 

 

 

 

 

 

 

 









Dividends to Common Shareholders From

 

 

 

 

 

 

 









Net investment income

 

 

(19,116,579

)

 

(14,193,791

)

 

 







 

 

 

 

 

 

 

 









Capital Share Transactions

 

 

 

 

 

 

 









Net increase in net assets derived from capital share transactions

 

 

355,807

 

 

 

 

 







 

 

 

 

 

 

 

 









Net Assets Applicable to Common Shareholders

 

 

 

 

 

 

 









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

 

 

29,324,963

 

 

(12,590,787

)

Beginning of year

 

 

274,342,329

 

 

286,933,116

 

 

 







End of year

 

$

303,667,292

 

$

274,342,329

 

 

 







Undistributed net investment income

 

$

5,775,447

 

$

4,985,202

 

 

 







BlackRock MuniYield California Insured Fund, Inc. (MCA)

 

 

 

 

 

 

 

 

 

 

Year Ended July 31,

 

 

 



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

 

2010

 

2009

 







Operations

 

 

 

 

 

 

 









Net investment income

 

$

29,953,463

 

$

29,423,972

 

Net realized gain (loss)

 

 

145,823

 

 

(7,354,130

)

Net change in unrealized appreciation/depreciation

 

 

39,396,178

 

 

(10,184,886

)

Dividends to Preferred Shareholders from net investment income

 

 

(982,980

)

 

(4,039,487

)

 

 







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

 

 

68,512,484

 

 

7,845,469

 

 

 







 

 

 

 

 

 

 

 









Dividends to Common Shareholders From

 

 

 

 

 

 

 









Net investment income

 

 

(26,148,873

)

 

(22,575,308

)

 

 







 

 

 

 

 

 

 

 









Net Assets Applicable to Common Shareholders

 

 

 

 

 

 

 









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

 

 

42,363,611

 

 

(14,729,839

)

Beginning of year

 

 

461,504,924

 

 

476,234,763

 

 

 







End of year

 

$

503,868,535

 

$

461,504,924

 

 

 







Undistributed net investment income

 

$

7,131,653

 

$

4,323,219

 

 

 








 

 

 

 

See Notes to Financial Statements.


34

ANNUAL REPORT

JULY 31, 2010

 




 

 



 

 

Statements of Changes in Net Assets

BlackRock MuniYield Insured Fund, Inc. (MYI)


 

 

 

 

 

 

 

 

 

 

Year Ended July 31,

 

 

 



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

 

2010

 

2009

 









Operations

 

 

 

 

 

 

 









Net investment income

 

$

60,126,026

 

$

58,754,948

 

Net realized loss

 

 

(16,592

)

 

(45,344,504

)

Net change in unrealized appreciation/depreciation

 

 

87,963,066

 

 

793,742

 

Dividends to Preferred Shareholders from net investment income

 

 

(2,350,328

)

 

(8,128,538

)

 

 







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

 

 

145,722,172

 

 

6,075,648

 

 

 







 

 

 

 

 

 

 

 









Dividends to Common Shareholders From

 

 

 

 

 

 

 









Net investment income

 

 

(51,624,188

)

 

(45,900,731

)

 

 







 

 

 

 

 

 

 

 









Capital Share Transactions

 

 

 

 

 

 

 









Net increase in net assets derived from capital share transactions

 

 

514,005

 

 

 

 

 







 

 

 

 

 

 

 

 









Net Assets Applicable to Common Shareholders

 

 

 

 

 

 

 









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

 

 

94,611,989

 

 

(39,825,083

)

Beginning of year

 

 

825,621,839

 

 

865,446,922

 

 

 







End of year

 

$

920,233,828

 

$

825,621,839

 

 

 







Undistributed net investment income

 

$

15,893,163

 

$

9,882,417

 

 

 







BlackRock MuniYield Michigan Insured Fund II, Inc. (MYM)

 

 

 

 

 

 

 

 

 

 

Year Ended July 31,

 

 

 



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

 

2010

 

2009

 







Operations

 

 

 

 

 

 

 









Net investment income

 

$

11,008,565

 

$

11,238,595

 

Net realized gain

 

 

953,727

 

 

129,790

 

Net change in unrealized appreciation/depreciation

 

 

9,751,120

 

 

(5,910,336

)

Dividends to Preferred Shareholders from net investment income

 

 

(458,167

)

 

(1,734,047

)

 

 







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

 

 

21,255,245

 

 

3,724,002

 

 

 







 

 

 

 

 

 

 

 









Dividends to Common Shareholders From

 

 

 

 

 

 

 









Net investment income

 

 

(9,842,858

)

 

(8,122,923

)

 

 







 

 

 

 

 

 

 

 









Net Assets Applicable to Common Shareholders

 

 

 

 

 

 

 









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

 

 

11,412,387

 

 

(4,398,921

)

Beginning of year

 

 

155,360,488

 

 

159,759,409

 

 

 







End of year

 

$

166,772,875

 

$

155,360,488

 

 

 







Undistributed net investment income

 

$

2,891,775

 

$

2,181,937

 

 

 








 

 

 

 

See Notes to Financial Statements.


 

ANNUAL REPORT

JULY 31, 2010

35




 

 



 

 

Statements of Changes in Net Assets

BlackRock MuniYield New York Insured Fund, Inc. (MYN)


 

 

 

 

 

 

 

 

 

 

Year Ended July 31,

 

 

 



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

 

2010

 

2009

 









Operations

 

 

 

 

 

 

 









Net investment income

 

$

35,629,645

 

$

34,156,457

 

Net realized gain (loss)

 

 

100,524

 

 

(4,120,078

)

Net change in unrealized appreciation/depreciation

 

 

42,118,603

 

 

(19,596,751

)

Dividends to Preferred Shareholders from net investment income

 

 

(1,419,084

)

 

(5,209,900

)

 

 







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

 

 

76,429,688

 

 

5,229,728

 

 

 







 

 

 

 

 

 

 

 









Dividends to Common Shareholders From

 

 

 

 

 

 

 









Net investment income

 

 

(27,710,788

)

 

(25,048,659

)

 

 







 

 

 

 

 

 

 

 









Net Assets Applicable to Common Shareholders

 

 

 

 

 

 

 









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

 

 

48,718,900

 

 

(19,818,931

)

Beginning of year

 

 

499,093,054

 

 

518,911,985

 

 

 







End of year

 

$

547,811,954

 

$

499,093,054

 

 

 







Undistributed net investment income

 

$

9,642,252

 

$

3,184,321

 

 

 








 

 

 

 

See Notes to Financial Statements.


36

ANNUAL REPORT

JULY 31, 2010

 




 


 

Statements of Cash Flows


 

 

 

 

 

 

 

 

 

 

 

Year Ended July 31, 2010

 

BlackRock
MuniHoldings
Insured
Fund II, Inc.
(MUE)

 

BlackRock
MuniYield
California
Insured
Fund, Inc.
(MCA)

 

BlackRock
MuniYield
Insured
Fund, Inc.
(MCA)

 









Cash Provided by Operating Activities

 

 

 

 

 

 

 

 

 

 












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

 

$

48,631,793

 

$

69,495,464

 

$

148,072,500

 

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

 

 

 

 

 

 

 

 

 

 

(Increase) decrease in interest receivable

 

 

164,089

 

 

753,339

 

 

(485,312

)

Decrease in prepaid expenses

 

 

17,188

 

 

25,218

 

 

43,579

 

Increase in other assets

 

 

 

 

(33,932

)

 

(61,854

)

(Increase) decrease in income receivable — affiliated

 

 

 

 

319

 

 

(163

)

Increase in investment advisory fees payable

 

 

16,171

 

 

32,985

 

 

42,175

 

Increase in other affiliates payable

 

 

213

 

 

509

 

 

1,171

 

Increase in margin variation payable

 

 

 

 

30,188

 

 

132,970

 

Increase in cash held as collateral in connection with futures

 

 

 

 

(72,000

)

 

(288,600

)

Increase in other accrued expenses payable

 

 

15,518

 

 

13,888

 

 

9,516

 

Increase (decrease) in Officer’s and Directors’ fees payable

 

 

(94

)

 

34,454

 

 

62,369

 

Decrease in interest expense and fees payable

 

 

(145,569

)

 

(163,943

)

 

(313,504

)

Net realized and unrealized gain

 

 

(28,126,498

)

 

(39,755,292

)

 

(88,070,940

)

Amortization of premium and discount on investments

 

 

954,398

 

 

2,297,142

 

 

(131,853

)

Proceeds from sales of long-term investments

 

 

98,950,625

 

 

222,234,751

 

 

183,988,829

 

Purchases of long-term investments

 

 

(103,200,092

)

 

(283,799,792

)

 

(255,616,070

)

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

 

 

2,411,240

 

 

(17,107,995

)

 

32,185,316

 

 

 










Cash provided by operating activities

 

 

19,688,982

 

 

(46,014,697

)

 

19,570,129

 

 

 










 

 

 

 

 

 

 

 

 

 

 












Cash Used for Financing Activities

 

 

 

 

 

 

 

 

 

 












Payments on redemption of Preferred Shares

 

 

 

 

 

 

(2,175,000

)

Cash receipts from trust certificates

 

 

3,846,106

 

 

80,436,952

 

 

36,873,984

 

Cash payments for trust certificates

 

 

(4,440,000

)

 

(7,575,000

)

 

(3,633,309

)

Cash dividends paid to Common Shareholders

 

 

(18,624,706

)

 

(25,908,344

)

 

(50,434,461

)

Cash dividends paid to Preferred Shareholders

 

 

(548,428

)

 

(987,633

)

 

(2,358,248

)

Increase in bank overdraft

 

 

1,580

 

 

 

 

 

 

 










Cash used for financing activities

 

 

(19,765,448

)

 

45,965,975

 

 

(21,727,034

)

 

 










 

 

 

 

 

 

 

 

 

 

 












Cash

 

 

 

 

 

 

 

 

 

 












Net decrease in cash

 

 

(76,466

)

 

(48,722

)

 

(2,156,905

)

Cash at beginning of year

 

 

76,466

 

 

48,722

 

 

2,156,905

 

 

 










Cash at end of year

 

 

 

 

 

 

 

 

 










 

 

 

 

 

 

 

 

 

 

 












Cash Flow Information

 

 

 

 

 

 

 

 

 

 












Cash paid during the year for interest

 

$

621,865

 

$

942,174

 

$

1,560,473

 

 

 










 

 

 

 

 

 

 

 

 

 

 












Noncash Financing Activities

 

 

 

 

 

 

 

 

 

 












Capital shares issued in reinvestment of dividends paid to Common Shareholders

 

$

355,807

 

 

 

$

514,005

 

 

 











 

 

 

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


 

 

 

 

See Notes to Financial Statements.

 

 


 

ANNUAL REPORT

JULY 31, 2010

37




 

 



 

 

Financial Highlights

BlackRock MuniHoldings Insured Fund II, Inc. (MUE)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Period
October 1,
2007
to July 31,
2008

 

 

 

 

 

 

 

 

 

Year Ended

 

 

 

 

 

 

July 31,

 

 

Year Ended September 30,

 

 

 


 

 



 

 

2010

 

2009

 

 

2007

 

2006

 

2005

 





















Per Share Operating Performance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Net asset value, beginning of period

 

$

12.27

 

$

12.84

 

$

13.72

 

$

14.15

 

$

14.23

 

$

14.41

 

 

 



















Net investment income1

 

 

0.92

 

 

0.90

 

 

0.78

 

 

0.97

 

 

0.93

 

 

0.97

 

Net realized and unrealized gain (loss)

 

 

1.26

 

 

(0.71

)

 

(0.91

)

 

(0.45

)

 

0.03

 

 

(0.09

)

Dividends to Preferred Shareholders from net investment income

 

 

(0.02

)

 

(0.12

)

 

(0.25

)

 

(0.33

)

 

(0.29

)

 

(0.18

)

 

 



















Net increase (decrease) from investment operations

 

 

2.16

 

 

0.07

 

 

(0.38

)

 

0.19

 

 

0.67

 

 

0.70

 

 

 



















Dividends to Common Shareholders from net investment income

 

 

(0.86

)

 

(0.64

)

 

(0.50

)

 

(0.62

)

 

(0.75

)

 

(0.88

)

 

 



















Net asset value, end of period

 

$

13.57

 

$

12.27

 

$

12.84

 

$

13.72

 

$

14.15

 

$

14.23

 

 

 



















Market price, end of period

 

$

14.26

 

$

11.40

 

$

11.30

 

$

12.39

 

$

12.96

 

$

13.90

 

 

 



















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Total Investment Return2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Based on net asset value

 

 

18.04

%

 

1.58

%

 

(2.41

)%3

 

1.73

%

 

5.19

%

 

5.35

%

 

 



















Based on market price

 

 

33.51

%

 

7.24

%

 

(4.89

)%3

 

0.31

%

 

(1.37

)%

 

11.92

%

 

 



















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Ratios to Average Net Assets Applicable to Common Shareholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Total expenses4

 

 

1.28

%

 

1.66

%

 

1.55

%5

 

1.61

%

 

1.64

%

 

1.38

%

 

 



















Total expenses after fees waived and paid indirectly4

 

 

1.15

%

 

1.45

%

 

1.45

%5

 

1.54

%

 

1.57

%

 

1.32

%

 

 



















Total expenses after fees waived and paid indirectly and excluding interest expense and fees4,6

 

 

0.99

%

 

1.04

%

 

1.15

%5

 

1.17

%

 

1.16

%

 

1.15

%

 

 



















Net investment income4

 

 

6.92

%

 

7.61

%

 

6.74

%5

 

6.94

%

 

6.70

%

 

6.72

%

 

 



















Dividends to Preferred Shareholders

 

 

0.18

%

 

1.03

%

 

2.19

%5

 

2.37

%

 

2.10

%

 

1.27

%

 

 



















Net investment income to Common Shareholders

 

 

6.74

%

 

6.58

%

 

4.55

%5

 

4.57

%

 

4.60

%

 

5.45

%

 

 



















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Supplemental Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















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

 

$

303,667

 

$

274,342

 

$

286,933

 

$

306,769

 

$

316,216

 

$

318,044

 

 

 



















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

 

$

131,000

 

$

131,000

 

$

145,300

 

$

204,500

 

$

204,500

 

$

204,500

 

 

 



















Portfolio turnover

 

 

20

%

 

37

%

 

43

%

 

43

%

 

35

%

 

46

%

 

 



















Asset coverage, end of period per $1,000

 

$

3,3188

7

$

3,094

7

$

2,975

7

$

2,500

7

$

2,546

7

$

2,555

 

 

 




















 

 

 

 

1

Based on average Common Shares outstanding.

 

 

 

 

2

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

 

 

 

 

3

Aggregate total investment return.

 

 

 

 

4

Do not reflect the effect of dividends to Preferred Shareholders.

 

 

 

 

5

Annualized.

 

 

 

 

6

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

 

 

 

 

7

Asset coverage per preferred share at $25,000 liquidation preference for the periods ended 2010, 2009, 2008, 2007 and 2006 were $82,953, $77,357, $74,376, $62,514 and $63,667, respectively.


 

 

 

See Notes to Financial Statements.

 




38

ANNUAL REPORT

JULY 31, 2010




 

 


 

 

Financial Highlights

BlackRock MuniYield California Insured Fund, Inc. (MCA)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Period
November 1,
2007
to July 31,
2008

 

 

 

 

 

 

 

 

 

Year Ended

 

 

 

 

 

 

July 31,

 

 

Year Ended October 31,

 

 

 


 

 



 

 

2010

 

2009

 

 

2007

 

2006

 

2005

 





















Per Share Operating Performance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Net asset value, beginning of period

 

$

13.43

 

$

13.86

 

$

14.63

 

$

15.09

 

$

14.82

 

$

15.23

 

 

 



















Net investment income1

 

 

0.87

 

 

0.86

 

 

0.68

 

 

0.92

 

 

0.96

 

 

0.95

 

Net realized and unrealized gain (loss)

 

 

1.15

 

 

(0.51

)

 

(0.75

)

 

(0.42

)

 

0.35

 

 

(0.33

)

Dividends to Preferred Shareholders from net investment income

 

 

(0.03

)

 

(0.12

)

 

(0.20

)

 

(0.28

)

 

(0.24

)

 

(0.13

)

 

 



















Net increase (decrease) from investment operations

 

 

1.99

 

 

0.23

 

 

(0.27

)

 

0.22

 

 

1.07

 

 

0.49

 

 

 



















Dividends to Common Shareholders from net investment income

 

 

(0.76

)

 

(0.66

)

 

(0.50

)

 

(0.68

)

 

(0.80

)

 

(0.88

)

 

 



















Capital charges with respect to issuance of Preferred Shares

 

 

 

 

 

 

 

 

 

 

(0.00

)2

 

(0.02

)

 

 



















Net asset value, end of period

 

$

14.66

 

$

13.43

 

$

13.86

 

$

14.63

 

$

15.09

 

$

14.82

 

 

 



















Market price, end of period

 

$

14.02

 

$

12.08

 

$

12.33

 

$

13.16

 

$

14.64

 

$

14.16

 

 

 



















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Total Investment Return3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Based on net asset value

 

 

15.69

%

 

3.03

%

 

(1.54

)%4

 

1.76

%

 

7.57

%

 

3.55

%

 

 



















Based on market price

 

 

23.00

%

 

4.17

%

 

(2.63

)%4

 

(5.65

)%

 

9.22

%

 

9.75

%

 

 



















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Ratios to Average Net Assets Applicable to Common Shareholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Total expenses5

 

 

1.11

%

 

1.40

%

 

1.38

%6

 

1.53

%

 

1.60

%

 

1.27

%

 

 



















Total expenses after fees waived and paid indirectly5

 

 

1.10

%

 

1.38

%

 

1.36

%6

 

1.53

%

 

1.59

%

 

1.27

%

 

 



















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

 

 

0.95

%

 

1.02

%

 

1.04

%6

 

1.03

%

 

1.03

%

 

0.96

%

 

 



















Net investment income5

 

 

6.10

%

 

6.60

%

 

6.15

%6

 

6.22

%

 

6.46

%

 

6.29

%

 

 



















Dividends to Preferred Shareholders

 

 

0.20

%

 

0.91

%

 

1.78

%6

 

1.87

%

 

1.62

%

 

0.84

%

 

 



















Net investment income to Common Shareholders

 

 

5.90

%

 

5.69

%

 

4.37

%6

 

4.35

%

 

4.84

%

 

5.45

%

 

 



















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Supplemental Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















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

 

$

503,869

 

$

461,505

 

$

476,235

 

$

502,855

 

$

518,667

 

$

509,066

 

 

 



















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

 

$

166,525

 

$

166,525

 

$

192,300

 

$

275,000

 

$

275,000

 

$

275,000

 

 

 



















Portfolio turnover

 

 

30

%

 

25

%

 

25

%

 

25

%

 

27

%

 

39

%

 

 



















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

 

$

100,648

 

$

94,289

 

$

86,933

 

$

70,733

 

$

72,170

 

$

71,280

 

 

 




















 

 

 

 

1

Based on average Common Shares outstanding.

 

 

 

 

2

Amount is less than $(0.01) per share.

 

 

 

 

3

Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. 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 tender option bond trusts. See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to tender option bond trusts.


 

 

 

See Notes to Financial Statements.

 

 




ANNUAL REPORT

JULY 31, 2010

39




 

 


 

 

Financial Highlights

BlackRock MuniYield Insured Fund, Inc. (MYI)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Period
November 1,
2007
to July 31,
2008

 

 

 

 

 

 

 

 

 

Year Ended
July 31,

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended October 31,

 

 

 


 

 



 

 

2010

 

2009

 

 

2007

 

2006

 

2005

 





















Per Share Operating Performance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Net asset value, beginning of period

 

$

12.27

 

$

12.86

 

$

14.57

 

$

15.30

 

$

15.27

 

$

15.59

 

 

 



















Net investment income1

 

 

0.89

 

 

0.87

 

 

0.70

 

 

1.04

 

 

0.98

 

 

1.04

 

Net realized and unrealized gain (loss)

 

 

1.31

 

 

(0.66

)

 

(1.69

)

 

(0.79

)

 

0.46

 

 

(0.22

)

Dividends and distributions to Preferred Shareholders from:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net investment income

 

 

(0.03

)

 

(0.12

)

 

(0.22

)

 

(0.31

)

 

(0.25

)

 

(0.16

)

Net realized gain

 

 

 

 

 

 

 

 

 

 

(0.04

)

 

(0.02

)

 

 



















Net increase (decrease) from investment operations

 

 

2.17

 

 

0.09

 

 

(1.21

)

 

(0.06

)

 

1.15

 

 

0.64

 

 

 



















Dividends and distributions to Common Shareholders from:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net investment income

 

 

(0.77

)

 

(0.68

)

 

(0.50

)

 

(0.67

)

 

(0.78

)

 

(0.95

)

Net realized gain

 

 

 

 

 

 

 

 

 

 

(0.34

)

 

(0.01

)

 

 



















Total dividends and distributions to Common Shareholders

 

 

(0.77

)

 

(0.68

)

 

(0.50

)

 

(0.67

)

 

(1.12

)

 

(0.96

)

 

 



















Capital charges with respect to issuance of Preferred Shares

 

 

 

 

 

 

 

 

 

 

 

 

(0.00

)2

 

 



















Net asset value, end of period

 

$

13.67

 

$

12.27

 

$

12.86

 

$

14.57

 

$

15.30

 

$

15.27

 

 

 



















Market price, end of period

 

$

14.17

 

$

12.12

 

$

12.22

 

$

13.04

 

$

14.36

 

$

14.70

 

 

 



















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Total Investment Return3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Based on net asset value

 

 

18.19

%

 

1.70

%

 

(8.22

)%4

 

(0.06

)%

 

8.09

%

 

4.54

%

 

 



















Based on market price

 

 

24.03

%

 

5.72

%

 

(2.55

)%4

 

(4.70

)%

 

5.38

%

 

7.69

%

 

 



















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Ratios to Average Net Assets Applicable to Common Shareholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Total expenses5

 

 

1.11

%

 

1.46

%

 

1.64

%6

 

1.71

%

 

1.67

%

 

1.60

%

 

 



















Total expenses after fees waived and paid indirectly5

 

 

1.11

%

 

1.45

%

 

1.63

%6

 

1.71

%

 

1.67

%

 

1.60

%

 

 



















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

 

 

0.97

%

 

1.06

%

 

1.06

%6

 

1.03

%

 

1.02

%

 

1.01

%

 

 



















Net investment income5

 

 

6.73

%

 

7.52

%

 

6.51

%6

 

6.94

%

 

6.52

%

 

6.62

%

 

 



















Dividends to Preferred Shareholders

 

 

0.26

%

 

1.04

%

 

2.03

%6

 

2.06

%

 

1.67

%

 

1.05

%

 

 



















Net investment income to Common Shareholders

 

 

6.47

%

 

6.48

%

 

4.48

%6

 

4.88

%

 

4.85

%

 

5.57

%

 

 



















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Supplemental Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















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

 

$

920,234

 

$

825,622

 

$

865,447

 

$

980,741

 

$

1,030,048

 

$

1,028,022

 

 

 



















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

 

$

356,450

 

$

358,625

 

$

377,175

 

$

570,000

 

$

570,000

 

$

570,000

 

 

 



















Portfolio turnover

 

 

13

%

 

30

%

 

70

%

 

117

%

 

95

%

 

105

%

 

 



















Asset coverage, end of period per $1,000

 

$

3,581

8

$

3,302

8

$

3,295

8

$

2,721

8

$

2,807

8

$

2,804

 

 

 




















 

 

 

 

1

Based on average Common Shares outstanding.

 

 

 

 

2

Amount is less than $(0.01) per share.

 

 

 

 

3

Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. 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 Stock shareholders.

 

 

 

 

6

Annualized.

 

 

 

 

7

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

 

 

 

 

8

Asset coverage per preferred share at $25,000 liquidation preference for the periods ended 2010, 2009, 2008, 2007 and 2006 were $89,545, $82,559, $82,381, $68,039 and $70,198, respectively.


 

 

 

See Notes to Financial Statements.

 




40

ANNUAL REPORT

JULY 31, 2010




 

 



 

 

Financial Highlights

BlackRock MuniYield Michigan Insured Fund II, Inc. (MYM)


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Period
November 1,
2007
to July 31,
2008

 

 

 

 

 

 

 

 

 

Year Ended
July 31,

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended October 31,

 

 

 


 

 


 

 

 

2010

 

2009

 

 

2007

 

2006

 

2005

 





















Per Share Operating Performance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Net asset value, beginning of period

 

$

12.87

 

$

13.24

 

$

14.13

 

$

14.60

 

$

14.54

 

$

15.21

 

 

 



















Net investment income1

 

 

0.91

 

 

0.93

 

 

0.70

 

 

0.97

 

 

0.97

 

 

0.99

 

Net realized and unrealized gain (loss)

 

 

0.90

 

 

(0.49

)

 

(0.88

)

 

(0.47

)

 

0.13

 

 

(0.58

)

Dividends to Preferred Shareholders from net investment income

 

 

(0.04

)

 

(0.14

)

 

(0.21

)

 

(0.29

)

 

(0.26

)

 

(0.15

)

 

 



















Net increase (decrease) from investment operations

 

 

1.77

 

 

0.30

 

 

(0.39

)

 

0.21

 

 

0.84

 

 

0.26

 

 

 



















Dividends to Common Shareholders from net investment income

 

 

(0.82

)

 

(0.67

)

 

(0.50

)

 

(0.68

)

 

(0.78

)

 

(0.91

)

 

 



















Capital charges with respect to issuance of Preferred Shares

 

 

 

 

 

 

 

 

 

 

0.00

2

 

(0.02

)

 

 



















Net asset value, end of period

 

$

13.82

 

$

12.87

 

$

13.24

 

$

14.13

 

$

14.60

 

$

14.54

 

 

 



















Market price, end of period

 

$

13.67

 

$

11.58

 

$

11.63

 

$

12.61

 

$

13.97

 

$

14.41

 

 

 



















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Total Investment Return3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Based on net asset value

 

 

14.62

%

 

3.81

%

 

(2.48

)%4

 

1.78

%

 

6.09

%

 

1.73

%

 

 



















Based on market price

 

 

26.01

%

 

6.34

%

 

(4.01

)%4

 

(5.07

)%

 

2.42

%

 

5.47

%

 

 



















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Ratios to Average Net Assets Applicable to Common Shareholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Total expenses5

 

 

1.08

%

 

1.28

%

 

1.48

%6

 

1.69

%

 

1.65

%

 

1.47

%

 

 



















Total expenses after fees waived5

 

 

1.07

%

 

1.26

%

 

1.45

%6

 

1.68

%

 

1.64

%

 

1.46

%

 

 



















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

 

 

1.03

%

 

1.12

%

 

1.14

%6

 

1.14

%

 

1.13

%

 

1.07

%

 

 



















Net investment income5

 

 

6.74

%

 

7.43

%

 

6.61

%6

 

6.77

%

 

6.72

%

 

6.57

%

 

 



















Dividends to Preferred Shareholders

 

 

0.28

%

 

1.15

%

 

1.98

%6

 

2.05

%

 

1.78

%

 

0.97

%

 

 



















Net investment income to Common Shareholders

 

 

6.46

%

 

6.28

%

 

4.63

%6

 

4.72

%

 

4.94

%

 

5.60

%

 

 



















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Supplemental Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















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

 

$

166,773

 

$

155,360

 

$

159,759

 

$

170,559

 

$

176,216

 

$

175,264

 

 

 



















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

 

$

87,350

 

$

87,350

 

$

87,350

 

$

99,000

 

$

99,000

 

$

99,000

 

 

 



















Portfolio turnover

 

 

18

%

 

9

%

 

20

%

 

10

%

 

14

%

 

19

%

 

 



















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

 

$

72,733

 

$

69,467

 

$

70,730

 

$

68,076

 

$

69,507

 

$

69,269

 

 

 




















 

 

 

 

1

Based on average Common Shares outstanding.

 

 

 

 

2

Amount is less than $0.01 per share.

 

 

 

 

3

Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. 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 tender option bond trusts. See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to tender option bond trusts.


See Notes to Financial Statements.

 

 

 

 





 

ANNUAL REPORT

JULY 31, 2010

41




 

 



 

 

Financial Highlights

BlackRock MuniYield New York Insured Fund, Inc. (MYN)


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Period
November 1,
2007
to July 31,
2008

 

 

 

 

 

 

 

 

 

Year Ended
July 31,

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended October 31,

 

 

 


 

 


 

 

 

2010

 

2009

 

 

2007

 

2006

 

2005

 















Per Share Operating Performance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Net asset value, beginning of period

 

$

12.65

 

$

13.16

 

$

13.94

 

$

14.40

 

$

14.26

 

$

14.81

 

 

 



















Net investment income1

 

 

0.90

 

 

0.87

 

 

0.66

 

 

0.84

 

 

0.92

 

 

0.94

 

Net realized and unrealized gain (loss)

 

 

1.08

 

 

(0.61

)

 

(0.77

)

 

(0.38

)

 

0.23

 

 

(0.50

)

Dividends to Preferred Shareholders from net investment income

 

 

(0.04

)

 

(0.13

)

 

(0.19

)

 

(0.27

)

 

(0.24

)

 

(0.13

)

 

 



















Net increase (decrease) from investment operations

 

 

1.94

 

 

0.13

 

 

(0.30

)

 

0.19

 

 

0.91

 

 

0.31

 

 

 



















Dividends to Common Shareholders from net investment income

 

 

(0.70

)

 

(0.64

)

 

(0.48

)

 

(0.65

)

 

(0.77

)

 

(0.84

)

 

 



















Capital charges with respect to issuance of Preferred Shares

 

 

 

 

 

 

 

 

 

 

(0.00

)2

 

(0.02

)

 

 



















Net asset value, end of period

 

$

13.89

 

$

12.65

 

$

13.16

 

$

13.94

 

$

14.40

 

$

14.26

 

 

 



















Market price, end of period

 

$

13.57

 

$

11.36

 

$

11.80

 

$

12.80

 

$

14.10

 

$

13.17

 

 

 



















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Total Investment Return3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Based on net asset value

 

 

16.15

%

 

2.29

%

 

(1.86

)%4

 

1.66

%

 

6.71

%

 

2.53

%

 

 



















Based on market price

 

 

26.36

%

 

2.44

%

 

(4.16

)%4

 

(4.67

)%

 

13.13

%

 

6.24

%

 

 



















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Ratios to Average Net Assets Applicable to Common Shareholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Total expenses5

 

 

1.11

%

 

1.34

%

 

1.48

%6

 

1.64

%

 

1.56

%

 

1.31

%

 

 



















Total expenses after fees waived5

 

 

1.10

%

 

1.32

%

 

1.46

%6

 

1.63

%

 

1.56

%

 

1.31

%

 

 



















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

 

 

1.00

%

 

1.06

%

 

1.04

%6

 

1.04

%

 

1.03

%

 

0.96

%

 

 



















Net investment income5

 

 

6.69

%

 

7.11

%

 

6.36

%6

 

5.96

%

 

6.50

%

 

6.37

%

 

 



















Dividends to Preferred Shareholders

 

 

0.27

%

 

1.09

%

 

1.82

%6

 

1.88

%

 

1.68

%

 

0.87

%

 

 



















Net investment income to Common Shareholders

 

 

6.42

%

 

6.02

%

 

4.54

%6

 

4.08

%

 

4.82

%

 

5.50

%

 

 



















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Supplemental Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















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

 

$

547,812

 

$

499,093

 

$

518,912

 

$

549,910

 

$

567,954

 

$

562,474

 

 

 



















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

 

$

247,700

 

$

247,700

 

$

259,475

 

$

304,000

 

$

304,000

 

$

304,000

 

 

 



















Portfolio turnover

 

 

7

%

 

22

%

 

17

%

 

25

%

 

43

%

 

35

%

 

 



















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

 

$

80,293

 

$

75,376

 

$

75,011

 

$

70,242

 

$

71,725

 

$

71,259

 

 

 




















 

 

 

 

1

Based on average Common Shares outstanding.

 

 

 

 

2

Amount is less than $(0.01) per share.

 

 

 

 

3

Total investment returns based on market value, which can be significantly greater or lesser than 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 tender option bond trusts. See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to tender option bond trusts.


 

 

 

See Notes to Financial Statements.

 




42

ANNUAL REPORT

JULY 31, 2010



 


 

Notes to Financial Statements

1. Organization and Significant Accounting Policies:

BlackRock MuniHoldings Insured Fund II, Inc. (“MUE”), BlackRock MuniYield California Insured Fund, Inc. (“MCA”), BlackRock MuniYield Insured Fund, Inc. (“MYI”), BlackRock MuniYield Michigan Insured Fund II, Inc. (“MYM”) and BlackRock MuniYield New York Insured Fund, Inc. (“MYN”) (collectively, the “Funds” or individually as a “Fund”), 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 Maryland 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 value of their Common Shares on a daily basis.

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

Valuation: The Funds fair value their financial instruments at market value using independent dealers or pricing services under policies approved by the 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 purchaser is 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 counter-party, the Funds’ maximum amount of loss is the unrealized appreciation of unsettled when-issued transactions, which is shown on the Schedules of Investments, if any.

Municipal Bonds Transferred to Tender Option Bond Trusts: The Funds leverage their assets through the use of tender option bond trusts (“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.

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.

 

 

 




ANNUAL REPORT

JULY 31, 2010

43




 


 

Notes to Financial Statements (continued)

Interest income 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 July 31, 2010, 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

 











MUE

 

$

123,179,778

 

$

62,692,934

 

 

0.27% – 0.43%

 

MCA

 

$

340,954,608

 

$

171,137,421

 

 

0.27% – 0.30%

 

MYI

 

$

385,556,930

 

$

195,663,221

 

 

0.27% – 0.43%

 

MYM

 

$

17,977,535

 

$

9,030,000

 

 

0.28% – 0.31%

MYN

 

$

155,190,594

 

$

78,614,804

 

 

0.28% – 0.41%












For the year ended July 31, 2010, 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

 







MUE

 

$

62,311,240

 

 

0.76%

 

MCA

 

$

108,937,028

 

 

0.71%

 

MYI

 

$

174,492,447

 

 

0.71%

 

MYM

 

$

9,030,000

 

 

0.67%

 

MYN

 

$

73,663,074

 

 

0.76%

 









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.

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.

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 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 of premium and accretion of discount 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 each of the four periods ended July 31, 2010, 2009, 2008 and October 31, 2007 (September 30, 2007 for MUE). The statutes of limitations on the Funds’ state and local tax returns may remain open for an additional year depending upon the jurisdiction. There are no 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, non-interested 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 other certain 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 other certain BlackRock Closed-End Funds.

The deferred compensation plan is not funded and obligations thereunder represent general unsecured claims against the general assets of each Fund. Each Fund may, however, elect to invest in common shares of other certain 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.

 

 

 




44

ANNUAL REPORT

JULY 31, 2010




 


 

Notes to Financial Statements (continued)

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 arrangement with the custodian 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 custodian imposes 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 is minimal because of the protection against defaults by the exchange on which they 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 contracts for delayed delivery of securities at a specific future date and at a specific price or yield. 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 recognized by the Funds as unrealized gains or losses. 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 transactions involves the risk of an imperfect correlation in the movements in the price of financial futures contracts, interest rates and the underlying assets.

Derivative Instruments Categorized by Risk Exposure:

 

 

 

 

 

 

 

 

 

 

 

 

 



 

Fair Values of Derivative Instruments as of July 31, 2010



 

 

Liabilities Derivatives

 

 

 



 

 

 

 

MCA

 

MYI

 

MYN

 

 

 









 

 

Statement of Assets and
Liabilities Location

 

 

 

 

Value

 

 

 

 













Interest rate
contracts

 

Net unrealized
appreciation/depreciation*

 

$

89,999

 

$

399,313

 

$

141,179

 















 

 

 

 

*

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


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


The Effect of Derivative Instruments on the Statement of Operations
Year Ended July 31, 2010


 

 

Net Realized Gain (Loss) from

 

 


 

 

MUE

 

MCA

 

MYI

 

MYM

 

MYN

 













Interest rate contracts:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial futures
contracts

 

$

35,900

 

$

(89,360

)

$

336,701

 

$

(45,754

)

$

5,668

 



















 

 

 

 

 

 

 

 

 

 

 

 

 

Net Change in Unrealized
Appreciation/Depreciation on

 

 


 

 

MCA

 

MYI

 

MYN

 









Interest rate contracts:

 

 

 

 

 

 

 

 

 

 

Financial futures contracts

 

$

(89,999

)

$

(399,313

)

$

(141,179

)












For the year ended July 31, 2010, the average quarterly balance of outstanding derivative financial instruments was as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


















 

 

MUE

 

MCA

 

MYI

 

MYM

 

MYN

 













Financial futures
contracts:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average number
of contracts
purchased

 

 

6

 

 

 

 

 

 

3

 

 

 

Average number
of contracts sold

 

 

6

 

 

11

 

 

46

 

 

42

 

 

28

 

Average notional
value of contracts
purchased

 

$

632,512

 

 

 

 

 

$

373,757

 

 

 

Average notional
value of contracts
sold

 

$

670,129

 

$

1,277,532

 

$

5,626,500

 

$

5,070,098

 

$

3,369,549

 


















3. Investment Advisory Agreement and Other Transactions with Affiliates:

The PNC Financial Services Group, Inc. (“PNC”), Bank of America Corporation (“BAC”) and Barclays Bank PLC (“Barclays”) are 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.

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 the following annual rates of each Fund’s average daily net assets as follows:

 

 

 

 

 






MUE

 

 

0.55

%

MCA

 

 

0.50

%

MYI

 

 

0.50

%

MYM

 

 

0.50

%

MYN

 

 

0.50

%






Average daily net assets is the average daily value of each Fund’s total assets minus the sum of its accrued liabilities.

 

 

 


ANNUAL REPORT

JULY 31, 2010

45




 


 

Notes to Financial Statements (continued)

For MUE, the Manager voluntarily agreed to waive its investment advisory fee on the proceeds of Preferred Shares and TOBs that exceeds 35% of the Fund’s average daily net assets. This amount is included in fees waived by advisor in the Statements of Operations. For the year ended July 31, 2010, the waiver was $368,396.

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 its investment in other affiliated investment companies, if any. These amounts are shown as, or included in, fees waived by advisor in the Statements of Operations. For the year ended July 31, 2010, the amounts waived were as follows:

 

 

 

 

 






MUE

 

$

8,726

 

MCA

 

$

41,394

 

MYI

 

$

18,525

 

MYM

 

$

11,844

 

MYN

 

$

22,804

 






The Manager entered into a separate 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 year ended July 31, 2010, the Funds reimbursed the Manager for certain accounting services, which are included in accounting services in the Statements of Operations. The reimbursements were as follows:

 

 

 

 

 






MUE

 

$

9,590

 

MCA

 

$

15,113

 

MYI

 

$

28,199

 

MYM

 

$

4,938

 

MYN

 

$

16,265

 






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 July 31, 2010, were as follows:

 

 

 

 

 

 

 

 







 

 

Purchases

 

Sales

 







MUE

 

$

97,003,104

 

$

99,398,108

 

MCA

 

$

283,799,792

 

$

222,234,751

 

MYI

 

$

241,360,523

 

$

176,754,714

 

MYM

 

$

45,479,053

 

$

45,724,194

 

MYN

 

$

94,690,816

 

$

54,633,250

 









5. Income Tax Information:

Reclassifications: US GAAP require 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 July 31, 2010 attributable to amortization methods on fixed income securities, the expiration of capital loss carryforwards, distributions received from a regulated investment company and the sale of bonds received from tender option bond trusts were reclassified to the following accounts:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 













 

 

MUE

 

MCA

 

MYI

 

MYM

 

MYN

 













Paid-in capital

 

$

(44,491

)

 

 

$

(92,735

)

$

(587,859

)

$

(3,007,157

)

Undistributed net investment income

 

$

(16,513

)

$

(13,176

)

$

(140,764

)

$

2,298

 

$

(41,842

)

Accumulated net realized loss

 

$

61,004

 

$

13,176

 

$

233,499

 

$

585,561

 

$

3,048,999

 

 

 
















The tax character of distributions paid during the fiscal years ended July 31, 2009 and July 31, 2010 were as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 













 

 

MUE

 

MCA

 

MYI

 

MYM

 

MYN

 


















Tax-exempt income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7/31/2010

 

$

19,662,637

 

$

27,131,853

 

$

53,974,516

 

$

10,301,025

 

$

29,129,872

 

7/31/2009

 

 

16,930,683

 

 

26,614,795

 

 

54,029,269

 

 

9,856,970

 

 

29,967,696

 

Ordinary income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7/31/2009

 

 

 

 

 

 

 

 

 

 

290,863

 

 

 
















Total distributions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7/31/2010

 

$

19,662,637

 

$

27,131,853

 

$

53,974,516

 

$

10,301,025

 

$

29,129,872

 

 

 
















7/31/2009

 

$

16,930,683

 

$

26,614,795

 

$

54,029,269

 

$

9,856,970

 

$

30,258,559

 

 

 

















 

 

 




46

ANNUAL REPORT

JULY 31, 2010




 


 

Notes to Financial Statements (continued)

As of July 31, 2010, the tax components of undistributed gains (accumulated losses) were as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


















 

 

MUE

 

MCA

 

MYI

 

MYM

 

MYN

 


















Undistributed tax-exempt income

 

$

5,692,712

 

$

7,067,574

 

$

13,280,572

 

$

2,575,139

 

$

9,421,599

 

Undistributed ordinary income

 

 

647

 

 

5,122

 

 

9,177

 

 

2,538

 

 

6,184

 

Capital loss carryforwards

 

 

(15,255,658

)

 

(17,153,861

)

 

(80,247,305

)

 

(2,365,850

)

 

(27,686,923

)

Net unrealized gains*

 

 

14,740,014

 

 

16,288,914

 

 

37,118,116

 

 

3,295,222

 

 

15,456,330

 

 

 
















Total

 

$

5,177,715

 

$

6,207,749

 

$

(29,839,440

)

$

3,507,049

 

$

(2,802,810

)

 

 

















 

 

 

 

*

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

As of July 31, 2010, the Funds had capital loss carryforwards available to offset future realized capital gains through the indicated expiration dates:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 













Expires July 31,

 

MUE

 

MCA

 

MYI

 

MYM

 

MYN

 


















2011

 

 

 

$

4,417,434

 

 

 

 

 

 

 

2012

 

$

306,103

 

 

2,675,948

 

 

 

$

1,288,851

 

$

16,583,200

 

2014

 

 

 

 

 

$

1,489,118

 

 

 

 

3,107,506

 

2015

 

 

 

 

1,362,395

 

 

5,979,955

 

 

 

 

 

2016

 

 

 

 

 

 

25,066,903

 

 

823,067

 

 

2,330,288

 

2017

 

 

8,936,425

 

 

2,753,866

 

 

21,251,301

 

 

253,932

 

 

2,295,738

 

2018

 

 

6,013,130

 

 

5,944,218

 

 

26,460,028

 

 

 

 

3,370,191

 

 

 
















Total

 

$

15,255,658

 

$

17,153,861

 

$

80,247,305

 

$

2,365,850

 

$

27,686,923

 

 

 
















6. Concentration, Market and Credit Risk:

MCA, MYM, and MYN invest 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 counterparty credit risk, or the risk that an entity with which the Funds have unsettled or open transactions may default. 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.

MUE invests a significant portion of its assets in the County/City/Special District/School District, Utilities and Transportation sectors. MCA invests a significant portion of its assets in securities in the County/City/Special District/School District and Utilities sectors. MYI and MYN invest a significant portion of their assets in securities in the County/City/Special District/School District and Transportation sectors. MYM invests a significant portion of its assets in securities in the County/City/Special District/School District sector. Changes in economic conditions affecting the County/City/Special District/School District, Transportation and Utilities sectors would have a greater impact on the Funds, and could affect the value, income and/or liquidity of positions in such securities.

 

 

 




ANNUAL REPORT

JULY 31, 2010

47




 


 

Notes to Financial Statements (continued)

7. Capital Share Transactions:

Each Fund is authorized to issue 200 million shares, including Preferred Shares, par value $0.10 for MUE, MCA, MYI and MYM and par value $0.05 for MYM and MYN, all of which were initially classified as Common Shares. Each Fund’s Board is authorized, however, to reclassify any unissued shares of Common Shares without approval of Common Shareholders.

Common Shares

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

 

 

 

 

 

 

 

 







 

 

Year Ended
July 31,
2010

 

Year Ended
July 31,
2009

 







MUE

 

 

26,556

 

 

 

MYI

 

 

37,906

 

 

 









Shares issued and outstanding remained constant for MCA, MYM and MYN for the years ended July 31, 2010 and 2009.

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 Supplementary Statement of Preferences (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.

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 July 31, 2010:

 

 

 

 

 

 

 

 

 

 

 

 












 

 

Series

 

Preferred
Shares

 

Effective
Yield

 

Reset
Frequency
Days

 












MUE

 

 

A

 

1,345

1

0.41

%

7

 

 

 

 

 

B

 

1,345

1

0.43

%

7

 

 

 

 

 

C

 

2,550

1

0.43

%

7

 

 













MCA

 

 

A

 

1,090

1

0.41

%

28

 

 

 

 

 

B

 

1,090

1

0.41

%

7

 

 

 

 

 

C

 

969

1

0.43

%

7

 

 

 

 

 

D

 

1,211

1

0.37

%

28

 

 

 

 

 

E

 

1,211

1

0.41

%

7

 

 

 

 

 

F

 

1,090

2

1.49

%

7

 

 













MYI

 

 

A

 

1,376

1

0.44

%

28

 

 

 

 

 

B

 

1,376

1

0.43

%

28

 

 

 

 

 

C

 

1,376

1

0.38

%

28

 

 

 

 

 

D

 

1,376

1

0.40

%

28

 

 

 

 

 

E

 

2,502

1

0.43

%

7

 

 

 

 

 

F

 

1,501

1

0.35

%

28

 

 

 

 

 

G

 

1,501

1

0.44

%

7

 

 

 

 

 

H

 

1,625

2

1.47

%

7

 

 

 

 

 

I

 

1,625

2

1.47

%

7

 

 













MYM

 

 

A

 

1,941

1

0.44

%

7

 

 

 

 

 

B

 

1,200

1

0.43

%

7

 

 

 

 

 

C

 

353

2

1.49

%

7

 

 













MYN

 

 

A

 

1,385

1

0.40

%

28

 

 

 

 

 

B

 

1,385

1

0.44

%

7

 

 

 

 

 

C

 

2,282

1

0.41

%

7

 

 

 

 

 

D

 

1,597

1

0.43

%

7

 

 

 

 

 

E

 

1,793

1

0.40

%

28

 

 

 

 

 

F

 

1,466

2

1.47

%

7

 

 














 

 

 

 

1

The maximum applicable rate on this series of Preferred Shares is the higher of 110% of the AA commercial paper rate or 110% of 90% of the Kenny S&P 30-day High Grade Index rate divided by 1.00 minus the marginal tax rate.

 

 

 

 

2

The maximum applicable rate on this series of Preferred Shares is the higher of 110% plus or times (i) the Telerate/BAA LIBOR or (ii) 90% of Kenny S&P 30-day High Grade Index rate divided by 1.00 minus the marginal tax rate.


 

 

 

 





48

ANNUAL REPORT

JULY 31, 2010

 




 


 

Notes to Financial Statements (continued)

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 is footnoted as applicable on the above chart. The low, high and average dividend rates on the Preferred Shares for each Fund for the year ended July 31, 2010 were as follows:

 

 

 

 

 

 

 

 

 

 

 











 

 

Series

 

Low

 

High

 

 

Average











MUE

 

A

 

0.24

%

0.58

%

 

0.41

%

 

 

B

 

0.26

%

0.58

%

 

0.42

%

 

 

C

 

0.26

%

0.58

%

 

0.42

%












MCA

 

A

 

0.26

%

0.58

%

 

0.44

%

 

 

B

 

0.24

%

0.58

%

 

0.41

%

 

 

C

 

0.26

%

0.58

%

 

0.42

%

 

 

D

 

0.34

%

0.50

%

 

0.43

%

 

 

E

 

0.24

%

0.58

%

 

0.41

%

 

 

F

 

1.34

%

1.63

%

 

1.48

%












MYI

 

A

 

0.27

%

0.55

%

 

0.42

%

 

 

B

 

0.26

%

0.58

%

 

0.42

%

 

 

C

 

0.32

%

0.50

%

 

0.43

%

 

 

D

 

0.32

%

0.53

%

 

0.42

%

 

 

E

 

0.26

%

0.58

%

 

0.42

%

 

 

F

 

0.26

%

0.58

%

 

0.42

%

 

 

G

 

0.24

%

0.58

%

 

0.42

%

 

 

H

 

1.32

%

1.63

%

 

1.48

%

 

 

I

 

1.32

%

1.63

%

 

1.48

%












MYM

 

A

 

0.24

%

0.58

%

 

0.42

%

 

 

B

 

0.26

%

0.58

%

 

0.42

%

 

 

C

 

1.34

%

1.63

%

 

1.48

%












MYN

 

A

 

0.31

%

0.53

%

 

0.42

%

 

 

B

 

0.24

%

0.52

%

 

0.42

%

 

 

C

 

0.26

%

0.58

%

 

0.42

%

 

 

D

 

0.26

%

0.58

%

 

0.42

%

 

 

E

 

0.32

%

0.53

%

 

0.42

%

 

 

F

 

1.32

%

1.63

%

 

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 0.24% to 1.63% for the year ended July 31, 2010. 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. It is impossible to predict how long this imbalance will last. A successful auction for the Funds’ Preferred Shares may not occur for some time, if ever, and even if liquidity does resume, holders of the Preferred Shares 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 0.25% on the aggregate principal amount of all shares that successfully clear their auctions and 0.15% on the aggregate principal amount of all shares that fail to clear their auctions. Certain broker dealers have individually agreed to reduce commissions for failed auctions.

Preferred Shares issued and outstanding remained constant for the year ended July 31, 2010 for MUE, MCA, MYM and MYN. Preferred Shares issued and outstanding decreased by 87 shares for MYI for the year ended July 31, 2010.

During the year ended July 31, 2009, certain 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

 











MUE

 

A

 

7/06/09

 

147

 

 

$

3,675,000

 

 

 

B

 

7/09/09

 

147

 

 

$

3,675,000

 

 

 

C

 

7/08/09

 

278

 

 

$

6,950,000

 













MCA

 

A

 

7/31/09

 

169

 

 

$

4,225,000

 

 

 

B

 

7/13/09

 

169

 

 

$

4,225,000

 

 

 

C

 

7/08/09

 

150

 

 

$

3,750,000

 

 

 

D

 

7/10/09

 

187

 

 

$

4,675,000

 

 

 

E

 

7/06/09

 

187

 

 

$

4,675,000

 

 

 

F

 

7/09/09

 

169

 

 

$

4,225,000

 













MYI

 

A

 

7/23/09

 

80

 

 

$

2,000,000

 

 

 

B

 

7/30/09

 

80

 

 

$

2,000,000

 

 

 

C

 

7/09/09

 

80

 

 

$

2,000,000

 

 

 

D

 

7/16/09

 

80

 

 

$

2,000,000

 

 

 

E

 

7/09/09

 

145

 

 

$

3,625,000

 

 

 

F

 

8/04/09

 

87

 

 

$

2,175,000

 

 

 

G

 

7/14/09

 

87

 

 

$

2,175,000

 

 

 

H

 

7/06/09

 

95

 

 

$

2,375,000

 

 

 

I

 

7/06/09

 

95

 

 

$

2,375,000

 













MYN

 

A

 

7/21/09

 

66

 

 

$

1,650,000

 

 

 

B

 

6/30/09

 

66

 

 

$

1,650,000

 

 

 

C

 

7/06/09

 

108

 

 

$

2,700,000

 

 

 

D

 

7/08/09

 

76

 

 

$

1,900,000

 

 

 

E

 

7/16/09

 

85

 

 

$

2,125,000

 

 

 

F

 

7/06/09

 

70

 

 

$

1,750,000

 













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

Preferred Shares outstanding remained constant for MYM during the year ended July 31, 2009.

 

 

 

 





 

ANNUAL REPORT

JULY 31, 2010

49




 


 

Notes to Financial Statements (concluded)

8. Restatement Information:

During the year ended September 30, 2006 for MUI and October 31, 2006 for MYI, the Funds determined that the criteria for sale accounting in ASC 860 (formerly FAS 140) had not been met for certain transfers of municipal bonds related to investments in TOB Residuals, and that these transfers should have been accounted for as secured borrowings rather than as sales. As a result, certain financial highlights for the period ended September 30, 2005 with respect to MUE, and for the period ended October 31, 2005 with respect to MYI, have been restated to give effect to recording the transfers of the municipal bonds as secured borrowings, including recording interest on the bonds as interest income and interest on the secured borrowings as interest expense.

 

 

 

 

 

 

 

 

Financial Highlights for MUE
For the Year Ended September 30, 2005

 

 

 

 





 

 

2005

 

 

 



 

 

Previously
Reported

 

Restated

 







Total expenses, net of waiver1

 

 

1.15

%

 

1.32

%

Total expenses1

 

 

1.21

%

 

1.38

%

Portfolio turnover

 

 

58.19

%

 

46

%










 

 

 

 

1

Do not reflect the effect of dividends to Preferred Shareholders.


 

 

 

 

 

 

 

 









 

Financial Highlights for MYI
For the Year Ended October 31, 2005

 

 

 

 

 

 







 

 

2005

 

 

 



 

 

Previously
Reported

 

Restated

 







Total expenses, net of waiver1

 

 

1.01

%

 

1.60

%

Total expenses1

 

 

1.01

%

 

1.60

%

Portfolio turnover

 

 

123.85

%

 

105

%










 

 

 

 

1

Do not reflect the effect of dividends to Preferred Shareholders.

9. 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 September 1, 2010 to Common Shareholders of record on August 16, 2010 as follows:

 

 

 

 

 





 

 

Common
Dividend
Per Share

 





MUE

 

$

0.0735

 

MCA

 

$

0.0680

 

MYI

 

$

0.0710

 

MYM

 

$

0.0715

 

MYN

 

$

0.0700

 






On September 1, 2010, the following Funds declared a dividend to Common Shareholders of record on September 15, 2010 in the following amounts:

 

 

 

 

 





 

 

Common
Dividend
Per Share

 





MUE

 

$

0.0735

 

MCA

 

$

0.0705

 

MYI

 

$

0.0720

 

MYM

 

$

0.0715

 

MYN

 

$

0.0710

 






The dividends declared on Preferred Shares for the period August 1, 2010 to August 31, 2010 were as follows:

 

 

 

 

 

 

 







 

 

Series

 

Dividends
Declared

 








MUE

 

A

 

$

11,475

 

 

 

B

 

$

11,662

 

 

 

C

 

$

22,165

 








MCA

 

A

 

$

9,269

 

 

 

B

 

$

9,196

 

 

 

C

 

$

8,423

 

 

 

D

 

$

9,108

 

 

 

E

 

$

10,331

 

 

 

F

 

$

33,212

 








MYI

 

A

 

$

12,685

 

 

 

B

 

$

12,220

 

 

 

C

 

$

10,777

 

 

 

D

 

$

11,190

 

 

 

E

 

$

21,695

 

 

 

F

 

$

12,657

 

 

 

G

 

$

12,860

 

 

 

H

 

$

49,332

 

 

 

I

 

$

49,195

 








MYM

 

A

 

$

16,630

 

 

 

B

 

$

10,431

 

 

 

C

 

$

10,756

 








MYN

 

A

 

$

11,690

 

 

 

B

 

$

11,866

 

 

 

C

 

$

19,253

 

 

 

D

 

$

13,881

 

 

 

E

 

$

14,582

 

 

 

F

 

$

44,505

 









 

 

 

 





50

ANNUAL REPORT

JULY 31, 2010

 




 


 

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of
BlackRock MuniHoldings Insured Fund II, Inc.
BlackRock MuniYield California Insured Fund, Inc.
BlackRock MuniYield Insured Fund, Inc.
BlackRock MuniYield Michigan Insured Fund II, Inc.
BlackRock MuniYield New York Insured Fund, Inc.
(collectively the “Funds”):

We have audited the accompanying statement of assets and liabilities of BlackRock MuniHoldings Insured Fund II, Inc., including the schedule of investments, as of July 31, 2010, 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 ended July 31, 2010, for the period October 1, 2007 to July 31, 2008, and for each of the two years in the period ended September 30, 2007. We have also audited the accompanying statement of assets and liabilities of BlackRock MuniYield California Insured Fund, Inc., including the schedule of investments, as of July 31, 2010, 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 the periods presented. We have also audited the accompanying statement of assets and liabilities of BlackRock MuniYield Insured Fund, Inc., including the schedule of investments, as of July 31, 2010, 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 ended July 31, 2010, for the period November 1, 2007 to July 31, 2008, and for each of the two years in the period ended October 31, 2007. We have also audited the accompanying statements of assets and liabilities of BlackRock MuniYield Michigan Insured Fund II, Inc. and BlackRock MuniYield New York Insured Fund, Inc., including the schedules of investments, as of July 31, 2010, the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for the periods presented. 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. The financial highlights of BlackRock MuniHoldings Insured Fund II, Inc. for the year ended September 30, 2005 (before the restatement described in Note 8) were audited by other auditors whose report, dated November 9, 2005, expressed a qualified opinion on those financial highlights because of the errors described in Note 8. The financial highlights of BlackRock MuniYield Insured Fund, Inc. for the year ended October 31, 2005 (before the restatement described in Note 8) were audited by other auditors whose report, dated December 9, 2005, expressed a qualified opinion on those financial highlights because of the errors described in Note 8.

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 July 31, 2010, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of BlackRock MuniHoldings Insured Fund II, Inc. as of July 31, 2010, the results of its operations and its cash flows for the year then ended, the changes in its 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, for the period October 1, 2007 to July 31, 2008 and for each of the two years in the period ended September 30, 2007, in conformity with accounting principles generally accepted in the United States of America. Additionally, in our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of BlackRock MuniYield California Insured Fund, Inc. as of July 31, 2010, the results of its operations and its cash flows for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for the periods presented, in conformity with accounting principles generally accepted in the United States of America. Additionally, in our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of BlackRock MuniYield Insured Fund, Inc. as of July 31, 2010, the results of its operations and its cash flows for the year then ended, the changes in its 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, for the period November 1, 2007 to July 31, 2008 and for each of the two years in the period ended October 31, 2007, in conformity with accounting principles generally accepted in the United States of America. Additionally, in our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial positions of BlackRock MuniYield Michigan Insured Fund II, Inc. and BlackRock MuniYield New York Insured Fund, Inc. as of July 31, 2010, the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for the periods presented, in conformity with accounting principles generally accepted in the United States of America.

We have audited the adjustments, applied by management, to restate certain BlackRock MuniHoldings Insured Fund II, Inc. (“Insured Fund II”) financial highlights for the period ended September 30, 2005 to correct the errors described in Note 8. We have also audited the adjustments, applied by management, to restate certain BlackRock MuniYield Insured Fund, Inc. (“Insured Fund”) financial highlights for the period ended October 31, 2005

 

 

 

 


 

ANNUAL REPORT

JULY 31, 2010

51




 


 

Report of Independent Registered Public Accounting Firm (concluded)

to correct the errors described in Note 8. These adjustments are the responsibility of the Funds’ management. The audit procedures that we performed with respect to the adjustments included such tests as we considered necessary in the circumstances and were designed to obtain reasonable assurance about whether the adjustments are appropriate and have been properly applied, in all material respects, to the restated information in Insured Fund II’s financial highlights for the year ended September 30, 2005 and Insured Fund’s financial highlights for the year ended October 31, 2005. We did not perform any audit procedures designed to assess whether any additional adjustments or disclosures to Insured Fund II’s or Insured Fund’s financial highlights for the years ended September 30, 2005 and October 31, 2005, respectively, might be necessary in order for such financial highlights to be presented in conformity with accounting principles generally accepted in the United States of America. In our opinion, the adjustments to the financial highlights of Insured Fund II’s or Insured Fund’s financial highlights for the years ended September 30, 2005 and October 31, 2005, respectively, for the restatements described in Note 8 are appropriate and have been properly applied, in all material respects. However, we were not engaged to audit, review, or apply any procedures to the Insured Fund II’s or Insured Fund’s financial highlights for the years ended September 30, 2005 and October 31, 2005, respectively, other than with respect to the adjustments described in Note 8 and, accordingly, we do not express an opinion or any other form of assurance on the Insured Fund II’s or Insured Fund’s financial highlights for the years ended September 30, 2005 and October 31, 2005, respectively.

Deloitte & Touche LLP
Princeton, New Jersey
September 27, 2010

 


Important Tax Information (Unaudited)


All of the net investment income distributions paid by MUE, MCA, MYI, MYM and MYN during the taxable year ended July 31, 2010 qualify as tax-exempt interest dividends for federal income tax purposes.

 

 

 

 


52

ANNUAL REPORT

JULY 31, 2010

 




 


 

Disclosure of Investment Advisory Agreements and Sub-Advisory Agreements

The Board of Directors (each, a “Board,” and, collectively, the “Boards,” and the members of which are referred to as “Board Members”) of each of BlackRock MuniHoldings Insured Fund II, Inc. (“MUE”), BlackRock MuniYield California Insured Fund, Inc. (“MCA”), BlackRock MuniYield Insured Fund, Inc. (“MYI”), BlackRock MuniYield Michigan Insured Fund II, Inc. (“MYM”) and BlackRock New York Insured Fund, Inc. (“MYN” and, together with MUE, MCA, MYI and MYM, each a “Fund,” and, collectively, the “Funds”) met on April 8, 2010 and May 13 – 14, 2010 to consider the approval of each Fund’s investment advisory agreement (each, an “Advisory Agreement”) with BlackRock Advisors, LLC (the “Manager”), each Fund’s investment advisor. Each Board also considered the approval of the sub-advisory agreement (each, a “Sub-Advisory Agreement”) between the Manager and BlackRock Investment Management, LLC (the “Sub-Advisor”) with respect to its Fund. The Manager and the Sub-Advisor are referred to herein as “BlackRock.” The Advisory Agreements and the Sub-Advisory Agreements are referred to herein as the “Agreements.”

Activities and Composition of the Board

The Board of each Fund consists of ten individuals, eight of whom are not “interested persons” of such Fund as defined in the Investment Company Act of 1940 (the “1940 Act”) (the “Independent Board Members”). The Board Members are responsible for the oversight of the operations of each Fund and perform the various duties imposed on the directors of investment companies by the 1940 Act. The Independent Board Members have retained independent legal counsel to assist them in connection with their duties. The Chairman of the Boards is an Independent Board Member. The Boards have established five standing committees: an Audit Committee, a Governance and Nominating Committee, a Compliance Committee, a Performance Oversight Committee and an Executive Committee, each of which is composed of Independent Board Members (except for the Executive Committee, which also has one interested Board Member) and is chaired by an Independent Board Member. The Boards also have two ad hoc committees, the Joint Product Pricing Committee, which consists of Independent Board Members and the directors/trustees of the boards of certain other BlackRock-managed funds, who are not “interested persons” of their respective funds, and the Ad Hoc Committee on Auction Market Preferred Shares.

The Agreements

Pursuant to the 1940 Act, the Boards are required to consider the continuation of the Agreements on an annual basis. In connection with this process, the Boards assessed, among other things, the nature, scope and quality of the services provided to the Funds by the personnel of BlackRock and its affiliates, including investment management, administrative and shareholder services, oversight of fund accounting and custody, marketing services and assistance in meeting applicable legal and regulatory requirements.

From time to time throughout the year, each Board, acting directly and through its committees, considered at each of its meetings factors that are relevant to its annual consideration of the renewal of the Agreements, including the services and support provided by BlackRock to the respective Fund and its shareholders. Among the matters the Board considered were: (a) investment performance for one-, three- and five-year periods, as applicable, against peer funds, and applicable benchmarks, if any, as well as senior management’s and portfolio managers’ analysis of the reasons for any over performance or underperformance against a Fund’s peers and/or benchmark, as applicable; (b) fees, including advisory, and other amounts paid to BlackRock and its affiliates by each Fund for services such as call center and fund accounting; (c) each Fund’s operating expenses; (d) the resources devoted to and compliance reports relating to each Fund’s investment objective, policies and restrictions; (e) each Fund’s compliance with its Code of Ethics and compliance policies and procedures; (f) the nature, cost and character of non-investment management services provided by BlackRock and its affiliates; (g) BlackRock’s and other service providers’ internal controls; (h) BlackRock’s implementation of the proxy voting policies approved by the Boards; (i) execution quality of portfolio transactions; (j) BlackRock’s implementation of each Fund’s valuation and liquidity procedures; (k) an analysis of contractual and actual management fees for products with similar investment objectives across the open-end fund, closed-end fund and institutional account product channels, as applicable; and (l) periodic updates on BlackRock’s business.

Board Considerations in Approving the Agreements

The Approval Process: Prior to the April 8, 2010 meeting, the Boards requested and received materials specifically relating to the Agreements. The Boards are engaged in a process with BlackRock to periodically review the nature and scope of the information provided to better assist their deliberations. The materials provided in connection with the April meeting included: (a) information independently compiled and prepared by Lipper, Inc. (“Lipper”) on Fund fees and expenses, and the investment performance of each Fund as compared with a peer group of funds as determined by Lipper and a customized peer group selected by BlackRock, as applicable (collectively, “Peers”); (b) information on the profitability of the Agreements to BlackRock and a discussion of fall-out benefits to BlackRock and its affiliates and significant shareholders; (c) a general analysis provided by BlackRock concerning investment advisory fees charged to other clients, such as institutional clients and open-end funds, under similar investment mandates; (d) the impact of economies of scale; (e) a summary of aggregate amounts paid by each Fund to BlackRock; and (f) if applicable, a comparison of management fees to similar BlackRock closed-end funds, as classified by Lipper.

At an in-person meeting held on April 8, 2010, the Boards reviewed materials relating to their consideration of the Agreements. As a result of the discussions that occurred during the April 8, 2010 meeting, the Boards presented BlackRock with questions and requests for additional information and BlackRock responded to these requests with additional written information in advance of the May 13 – 14, 2010 Board meeting.

At an in-person meeting held on May 13 – 14, 2010, each Fund’s Board, including the Independent Board Members, unanimously approved the continuation of the Advisory Agreement between the Manager and each respective Fund and the Sub-Advisory Agreement between the Manager and the Sub-Advisor with respect to each Fund, each for a one-year term ending June 30, 2011. In approving the continuation of the Agreements, the Boards considered: (a) the nature, extent and quality of the services provided by BlackRock; (b) the investment performance of each Fund and BlackRock; (c) the advisory fee and the cost of the services and profits to be realized by BlackRock and its affiliates from their relationship with each Fund; (d) economies of scale; and (e) other factors deemed relevant by the Board Members.

 

 

 

 


 

ANNUAL REPORT

JULY 31, 2010

53




 


 

Disclosure of Investment Advisory Agreements and Sub-Advisory Agreements (continued)

The Boards also considered other matters they deemed important to the approval process, such as services related to the valuation and pricing of each Fund’s portfolio holdings, direct and indirect benefits to BlackRock and its affiliates and significant shareholders from their relationship with each Fund and advice from independent legal counsel with respect to the review process and materials submitted for the Boards’ review. The Boards noted the willingness of BlackRock personnel to engage in open, candid discussions with the Boards. The Boards did not identify any particular information as controlling, and each Board Member may have attributed different weights to the various items considered.

A. Nature, Extent and Quality of the Services Provided by BlackRock: The Boards, including the Independent Board Members, reviewed the nature, extent and quality of services provided by BlackRock, including the investment advisory services and the resulting performance of each Fund. Throughout the year, the Boards compared each Fund’s performance to the performance of a comparable group of closed-end funds, and the performance of a relevant benchmark, if any. The Boards met with BlackRock’s senior management personnel responsible for investment operations, including the senior investment officers. The Boards also reviewed the materials provided by each Fund’s portfolio management team discussing each Fund’s performance and each Fund’s investment objective, strategies and outlook.

The Boards considered, among other factors, the number, education and experience of BlackRock’s investment personnel generally and each Fund’s portfolio management team, investments by portfolio managers in the funds they manage, BlackRock’s portfolio trading capabilities, BlackRock’s use of technology, BlackRock’s commitment to compliance, BlackRock’s credit analysis capabilities, BlackRock’s risk analysis capabilities and BlackRock’s approach to training and retaining portfolio managers and other research, advisory and management personnel. The Boards also reviewed a general description of BlackRock’s compensation structure with respect to each Fund’s portfolio management team and BlackRock’s ability to attract and retain high-quality talent.

In addition to advisory services, the Boards considered the quality of the administrative and non-investment advisory services provided to each Fund. BlackRock and its affiliates and significant shareholders provide each Fund with certain administrative and other services (in addition to any such services provided to each Fund by third parties) and officers and other personnel as are necessary for the operations of each Fund. In addition to investment advisory services, BlackRock and its affiliates provide each Fund with other services, including: (i) preparing disclosure documents, such as the prospectus and the statement of additional information in connection with the initial public offering and periodic shareholder reports; (ii) preparing communications with analysts to support secondary market trading of each Fund; (iii) assisting with daily accounting and pricing; (iv) preparing periodic filings with regulators and stock exchanges; (v) overseeing and coordinating the activities of other service providers; (vi) organizing Board meetings and preparing the materials for such Board meetings; (vii) providing legal and compliance support; and (viii) performing other administrative functions necessary for the operation of each Fund, such as tax reporting, fulfilling regulatory filing requirements, and call center services. The Boards reviewed the structure and duties of BlackRock’s fund administration, accounting, legal and compliance departments and considered BlackRock’s policies and procedures for assuring compliance with applicable laws and regulations.

B. The Investment Performance of the Funds and BlackRock: The Boards, including the Independent Board Members, also reviewed and considered the performance history of each Fund. In preparation for the April 8, 2010 meeting, the Boards were provided with reports, independently prepared by Lipper, which included a comprehensive analysis of each Fund’s performance. The Boards also reviewed a narrative and statistical analysis of the Lipper data that was prepared by BlackRock, which analyzed various factors that affect Lipper’s rankings. In connection with their review, the Boards received and reviewed information regarding the investment performance of each Fund as compared to a representative group of similar funds as determined by Lipper and to all funds in each Fund’s applicable Lipper category and in the case of MCA and MYN, a customized peer group selected by BlackRock. The Boards were provided with a description of the methodology used by Lipper to select peer funds. The Boards regularly review the performance of each Fund throughout the year.

The Board of MUE noted that MUE performed below the median of its Lipper Performance Composite in the three- and five-year periods reported, but that MUE performed better than or equal to the median of its Lipper Performance Composite in the one-year period reported. The Board of MUE and BlackRock reviewed the reasons for MUE’s underperformance during the three- and five-year periods compared with its Peers. The Board of MUE was informed that, among other things, MUE’s performance was hindered by its short duration posture during a period when interest rates were decreasing.

The Board of MCA noted that MCA performed below the median of its Customized Lipper Peer Group Composite in each of the one-, three- and five-year periods reported. The Board of MCA and BlackRock reviewed the reasons for MCA’s underperformance during these periods compared with its Peers. The Board of MCA was informed that, among other things, performance detractors for MCA have included exposure to lesser rated underlying holdings and specific exposure to zero coupon structures.

The Board of MYI noted that MYI performed below the median of its Lipper Performance Composite in the three- and five-year periods reported, but that MYI performed better than or equal to the median of its Lipper Performance Composite in the one-year period reported. The Board of MYI and BlackRock reviewed the reasons for MYI’s underperformance during the three- and five-year periods compared with its Peers. The Board of MYI was informed that, among other things, there were four primary factors that impacted performance: constructive positioning with respect to the market during a period of increasing yields; above average exposure to the long-end of the municipal curve, which underperformed as the yield curve steepened out; an overweight of spread product during a period of significant widening of credit spreads (specifically insured bonds now trading to their underlying value); and the underperformance of municipal cash relative to MYI’s Bond Market Association hedges (which were completely unwound in the 4th quarter of 2008).

 

 

 

 


54

ANNUAL REPORT

JULY 31, 2010

 




 


 

Disclosure of Investment Advisory Agreements and Sub-Advisory Agreements (continued)

The Board of MYN noted that MYN performed below the median of its Customized Lipper Peer Group Composite in the three- and five-year periods reported, but that MYN performed better than or equal to the median of its Customized Lipper Peer Group Composite in the one-year period reported. The Board of MYN and BlackRock reviewed the reasons for MYN’s underperformance during the three- and five-year periods compared with its Peers. The Board of MYN was informed that, among other things, MYN’s heavy weighting in longer dated and discount coupon bonds detracted from performance.

The Boards of MUE, MCA, MYI and MYN and BlackRock discussed BlackRock’s strategy for improving each respective Fund’s performance and BlackRock’s commitment to providing the resources necessary to assist each Fund’s portfolio managers and to improve each Fund’s performance.

The Board of MYM noted that, in general, MYM performed better than its Peers in that MYM’s performance was at or above the median of its Lipper Performance Composite in two of the one-, three- and five-year periods reported.

The Boards noted that BlackRock has made changes to the organization of the overall fixed income group management structure designed to result in a strengthened leadership team with clearer accountability.

C. Consideration of the Advisory Fees and the Cost of the Services and Profits to be Realized by BlackRock and its Affiliates from their Relationship with the Funds: The Boards, including the Independent Board Members, reviewed each Fund’s contractual advisory fee rate compared with the other funds in its Lipper category. The Boards also compared each Fund’s total expenses, as well as actual management fees, to those of other funds in its Lipper category. The Boards considered the services provided and the fees charged by BlackRock to other types of clients with similar investment mandates, including separately managed institutional accounts.

The Boards received and reviewed statements relating to BlackRock’s financial condition and profitability with respect to the services it provided each Fund. The Boards were also provided with a profitability analysis that detailed the revenues earned and the expenses incurred by BlackRock for services provided to each Fund. The Boards reviewed BlackRock’s profitability with respect to each Fund and other funds the Boards currently oversee for the year ended December 31, 2009 compared to available aggregate profitability data provided for the year ended December 31, 2008. The Boards reviewed BlackRock’s profitability with respect to other fund complexes managed by the Manager and/or its affiliates. The Boards reviewed BlackRock’s assumptions and methodology of allocating expenses in the profitability analysis, noting the inherent limitations in allocating costs among various advisory products. The Boards recognized that profitability may be affected by numerous factors including, among other things, fee waivers and expense reimbursements by the Manager, the types of funds managed, expense allocations and business mix, and the difficulty of comparing profitability as a result of those factors.

The Boards noted that, in general, individual fund or product line profitability of other advisors is not publicly available. Nevertheless, to the extent such information was available, the Boards considered BlackRock’s overall operating margin, in general, compared to the operating margin for leading investment management firms whose operations include advising closed-end funds, among other product types. That data indicates that operating margins for BlackRock with respect to its registered funds are generally consistent with margins earned by similarly situated publicly traded competitors. In addition, the Boards considered, among other things, certain third party data comparing BlackRock’s operating margin with that of other publicly traded asset management firms. That third party data indicates that larger asset bases do not, in themselves, translate to higher profit margins.

In addition, the Boards considered the cost of the services provided to each Fund by BlackRock, and BlackRock’s and its affiliates’ profits relating to the management and distribution of each Fund and the other funds advised by BlackRock and its affiliates. As part of their analysis, the Boards reviewed BlackRock’s methodology in allocating its costs to the management of each Fund. The Boards also considered whether BlackRock has the financial resources necessary to attract and retain high-quality investment management personnel to perform its obligations under the Agreements and to continue to provide the high quality of services that is expected by the Boards.

The Board of each Fund noted that its Fund’s contractual management fee rate was lower than or equal to the median contractual management fee rate paid by the Fund’s Peers, in each case, before taking into account any expense reimbursements or fee waivers.

D. Economies of Scale: The Boards, including the Independent Board Members, considered the extent to which economies of scale might be realized as the assets of each Fund increase. The Boards also considered the extent to which each Fund benefits from such economies and whether there should be changes in the advisory fee rate or structure in order to enable each Fund to participate in these economies of scale, for example through the use of breakpoints in the advisory fee based upon the asset level of each Fund.

The Boards noted that most closed-end fund complexes do not have fund level breakpoints because closed-end funds generally do not experience substantial growth after the initial public offering and each fund is managed independently consistent with its own investment objectives. The Boards noted that only one closed-end fund in the Fund Complex has breakpoints in its fee structure. Information provided by Lipper also revealed that only one closed-end fund complex with total closed-end fund nets assets exceeding $10 billion, as of December 31, 2009, used a complex level breakpoint structure.

 

 

 

 


 

ANNUAL REPORT

JULY 31, 2010

55




 


 

Disclosure of Investment Advisory Agreements and Sub-Advisory Agreements (concluded)

E. Other Factors Deemed Relevant by the Board Members: The Boards, including the Independent Board Members, also took into account other ancillary or “fall-out” benefits that BlackRock or its affiliates and significant shareholders may derive from their respective relationships with the Funds, both tangible and intangible, such as BlackRock’s ability to leverage its investment professionals who manage other portfolios, an increase in BlackRock’s profile in the investment advisory community, and the engagement of BlackRock’s affiliates and significant shareholders as service providers to each Fund, including for administrative and distribution services. The Boards also considered BlackRock’s overall operations and its efforts to expand the scale of, and improve the quality of, its operations. The Boards also noted that BlackRock may use and benefit from third party research obtained by soft dollars generated by certain mutual fund transactions to assist in managing all or a number of its other client accounts. The Boards further noted that BlackRock completed the acquisition of a complex of exchange-traded funds (“ETFs”) on December 1, 2009, and that BlackRock’s funds may invest in such ETFs without any offset against the management fees payable by the funds to BlackRock.

In connection with its consideration of the Agreements, the Boards also received information regarding BlackRock’s brokerage and soft dollar practices. The Boards received reports from BlackRock which included information on brokerage commissions and trade execution practices throughout the year.

The Boards noted the competitive nature of the closed-end fund marketplace, and that shareholders are able to sell their respective Fund’s shares in the secondary market if they believe that the Fund’s fees and expenses are too high or if they are dissatisfied with the performance of the Fund.

Conclusion

The Boards, including the Independent Board Members, unanimously approved the continuation of the Advisory Agreement between the Manager and each Fund for a one-year term ending June 30, 2011 and the Sub-Advisory Agreement between the Manager and the Sub-Advisor with respect to each Fund for a one-year term ending June 30, 2011. As part of its approval, each Board considered the discussions of BlackRock’s fee structure, as it applies to its respective Fund, being conducted by the ad hoc Joint Product Pricing Committee. Based upon its evaluation of all of the aforementioned factors in their totality, the Boards, including the Independent Board Members, were satisfied that the terms of the Agreements were fair and reasonable and in the best interest of each Fund and its shareholders. In arriving at a decision to approve the Agreements, the Boards did not identify any single factor or group of factors as all-important or controlling, but considered all factors together, and different Board Members may have attributed different weights to the various factors considered. The Independent Board Members were also assisted by the advice of independent legal counsel in making this determination. The contractual fee arrangements for each Fund reflect the results of several years of review by the Board Members and predecessor Board Members, and discussions between such Board Members (and predecessor Board Members) and BlackRock. Certain aspects of the arrangements may be the subject of more attention in some years than in others, and the Board Members’ conclusions may be based in part on their consideration of these arrangements in prior years.

 

 

 

 


56

ANNUAL REPORT

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Automatic Dividend Reinvestment Plans

Pursuant to each Fund’s Dividend Reinvestment Plan (the “Plan”), common shareholders are automatically enrolled to have all distributions of dividends and capital gains reinvested by BNY Mellon Shareowner Services for MYM and MYN and Computershare Trust Company, N.A. for MUE, MCA and MYI (individually, the “Plan Agent” or together, the “Plan Agents”) in the respective Fund’s shares pursuant to the Plan. Shareholders who do not participate in the 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 Plan Agent, which serves as agent for the shareholders in administering the Plan.

After the Funds declare a dividend or determine to make a capital gain distribution, the 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 or on the Fund’s primary exchange (“open-market purchases”). If, on the dividend payment date, the net asset value per share (“NAV”) 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 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 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 is greater than the market value per share plus estimated brokerage commissions (such condition often referred to as a “market discount”), the Plan Agent will invest the dividend amount in shares acquired on behalf of the participants in open-market purchases. If the Plan Agents are unable to invest the full dividend amount in open market purchases, or if the market discount shifts to a market premium during the purchase period, the Plan Agents will invest any un-invested portion in newly issued shares.

Participation in the Plan is completely voluntary and may be terminated or resumed at any time without penalty by notice if received and processed by the Plan Administrator 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 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 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 Plan. There is no direct service charge to participants in the Plan; however, each Fund reserves the right to amend the 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 Plan should be directed to the respective Plan Agent: BNY Mellon Shareowner Services, P.O. Box 358035, Pittsburgh, PA 15252-8035, Telephone: (866) 216-0242 for shareholders of MYM and MYN 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 Plan Agent at 250 Royall Street, Canton, MA 02021 for shareholders of MUE, MCA and MYI.

 

 

 

 


 

ANNUAL REPORT

JULY 31, 2010

57




 


 

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












Non-Interested Directors1












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

 

Chairman 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.

 

99 RICs consisting of
97 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.

 

99 RICs consisting of
97 Portfolios

 

AtriCure, Inc. (medical devices)












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.

 

99 RICs consisting of
97 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.

 

99 RICs consisting of
97 Portfolios

 

The McClatchy Company (publishing); BellSouth (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.

 

99 RICs consisting of
97 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.

 

99 RICs consisting of
97 Portfolios

 

BlackRock Kelso Capital Corp. (business development)













 

 

 

 


58

ANNUAL REPORT

JULY 31, 2010

 



 


 

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












Non-Interested 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, US 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.

 

99 RICs consisting of
97 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; Unit Head, Finance, 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; Independent Consultant since 1978.

 

99 RICs consisting of
97 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, Inc. (“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 directors as joining the Fund’s 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.

 

169 RICs consisting of
292 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.

 

169 RICs consisting of
292 Portfolios

 

None

 

 

 

 



 

3

Mr. Davis is an “interested person,” as defined in the Investment Company Act of 1940, of the Funds based on his positions 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

JULY 31, 2010

59




 


 

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








Funds Officers1








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

 

President and Chief Executive Officer

 

Since
20092

 

Managing Director of BlackRock, Inc. since 2000; Vice President of the BlackRock-advised Funds from 2007 to 2009; Chief Operating Officer of BlackRock’s Global Client Group (GCG) since 2009; Chief Operating Officer of BlackRock’s US 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 US 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 (US) 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 Merrill Lynch Investment Managers, L.P. (“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; Director and Senior Counsel of BlackRock Advisors, LLC from 2001 to 2004.








Howard Surloff
55 East 52nd Street
New York, NY 10055
1965

 

Secretary

 

Since
2007

 

Managing Director of BlackRock, Inc. and General Counsel of US Funds at BlackRock, Inc. since 2006; General Counsel (US) of Goldman Sachs Asset Management, L.P. from 1993 to 2006.


 

 

 

 



 

1

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

 

 

 

 

2

Ms. Ackerley has been President and Chief Executive Officer since 2009 and was Vice President from 2007 to 2009.

 

 

 




 

Investment Advisor

BlackRock Advisors, LLC

Wilmington, DE 19809

 

Sub-Advisor

BlackRock Investment Management, LLC

Plainsboro, NJ 08536

 

Custodians

State Street Bank and Trust Company3

Boston, MA 02101

 

The Bank of New York Mellon4

New York, NY 10286

 

Transfer Agents

Common Shares

Computershare Trust Company, N.A. 3

Providence, RI 02490

 

BNY Mellon Shareowner Services4

Jersey City, NJ 07310

 

Auction Agent

Preferred Shares

BNY Mellon Shareowner Services

Jersey City, NJ 07310

 

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 MUE, MCA and MYI.

 

4 For MYM and MYN.


Effective March 31, 2010, G. Nicholas Beckwith, III, a Director of the Funds, resigned. The Funds’ Board extends its best wishes to Mr. Beckwith.


 

 

 

 


60

ANNUAL REPORT

JULY 31, 2010

 




 


 

Additional Information

 


Board Approvals


On September 1, 2010, the Board of Directors (the “Boards”) of MUE, MCA, MYI, MYM and MYN (the “Funds”) have 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 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 Policy.

As a result, on September 1, 2010, the Manager recommended, and the Boards approved, the removal of the Insurance Policy. As a result of this investment policy change, the Funds would 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, the 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 the Fund invests. The Boards believe 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. Of course, 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 Policy. Accordingly, a notice describing the changes discussed above was mailed to shareholders of record as of September 1, 2010. The new investment policy is expected to take effect on November 9, 2010. After the amended policy takes effect, the Manager anticipates that it will gradually reposition each Fund’s portfolios over time, and that during such period, each Fund may continue to hold a substantial portion of its assets in insured municipal bonds. At this time, it is uncertain how long it may take to reposition each Fund’s portfolio once the amended policy takes effect, and the Funds may 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.

In connection with this change in non-fundamental policy, each of the Funds will undergo a name change to reflect its new portfolio characteristics. The new names of the Funds will be announced at or prior to the expiration of the 60-day notice period. Each Fund will continue to trade on New York Stock Exchange under its current ticker symbol.

The approved changes will not alter any Fund’s investment objective.

 


Dividend Policy


The Funds’ dividend policy is to distribute all or a portion of their net investment income to their shareholders on a monthly basis. In order to provide shareholders with a more stable level of dividend distributions, the Funds may at times pay out less than the entire amount of net investment income earned in any particular month and may at times in any particular month pay out such accumulated but undistributed income in addition to net investment income earned in that month. As a result, the dividends paid by the Funds for any particular month may be more or less than the amount of net investment income earned by the Funds during such month. The Funds’ current accumulated but undistributed net investment income, if any, is disclosed in the Statements of Assets and Liabilities, which comprises part of the financial information included in this report.

 

 

 


ANNUAL REPORT

JULY 31, 2010

61




 


 

Additional Information (continued)

 


General Information


On June 10, 2010, BlackRock Advisors, LLC, the Trusts’ investment advisor (the “Manager”), announced that MUE received a demand letter from a law firm on behalf of MUE’s common shareholders. The demand letter alleges that the Manager and MUE’s officers and Board of Directors (the “Board”) breached their fiduciary duties by redeeming at par certain of MUE’s Preferred Shares, and demanded that the Board take action to remedy those alleged breaches. In response to the demand letter, the Board established a Demand Review Committee (the “Committee”) of the independent Directors to investigate the claims made in the demand letter with the assistance of independent counsel. Based upon its investigation, the Committee recommended that the Board reject the demand specified in the demand letter. After reviewing the findings of the Committee, the Board unanimously adopted the Committee’s recommendation and unanimously voted to reject the demand.

On August 11, 2010, BlackRock Advisors, LLC, the Trusts’ investment advisor (the “Manager”), announced that a shareholder derivative complaint was filed on August 3, 2010 in the Supreme Court of the State of New York, New York County with respect to MCA and MYI, which had previously received a demand letter from a law firm on behalf of each fund’s common shareholders. The complaint was filed against the Manager, BlackRock, Inc., MCA, MYI and certain of the directors, officers and portfolio managers (collectively, the “BlackRock Parties”) in connection with the redemption of auction-market preferred shares, auction rate preferred securities, auction preferred shares and auction rate securities (collectively, “AMPS”). The complaint alleges, among other things, that the BlackRock Parties breached their fiduciary duties to the common shareholders of MCA and MYI (the “Shareholders”) by redeeming AMPS at their liquidation preference and alleges that such redemptions caused losses to the Shareholders. The plaintiffs are seeking monetary damages for the alleged losses suffered and to enjoin MCA and MYI from future redemptions of AMPS at their liquidation preference. The BlackRock Parties believe that the claims asserted in the complaint are without merit and intend to vigorously defend themselves in the litigation.

Electronic Delivery

Electronic copies of most financial reports are available on the Funds’ website 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 Portfolio Schedule of Investments

Each Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (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, DC. Information on the operation of the Public Reference Room 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.

 


Fund Certification


The Funds are listed for trading on the New York Stock Exchange (“NYSE”) and have filed with the NYSE their annual chief executive officer certification regarding compliance with the NYSE’s listing standards. The Funds filed with the SEC the certification of their chief executive officer and chief financial officer required by section 302 of the Sarbanes-Oxley Act.

 

 

 




62

ANNUAL REPORT

JULY 31, 2010




 


 

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.

 

 

 


ANNUAL REPORT

JULY 31, 2010

63



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)

 

 

#MHMYINS5-7/10

(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 and principal accounting officer, 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 or trustees, as applicable (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:

 

Kent Dixon (retired effective December 31, 2009)

 

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.

 


Item 4 –

Principal Accountant Fees and Services

 

 

(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 California Insured Fund, Inc.

$35,400

$35,400

$3,500

$3,500

$6,100

$6,100

$0

$1,028

 

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 registrant’s audit committee (the “Committee”) has adopted policies and procedures with regard to the pre-approval of services. Audit, audit-related and tax compliance services provided to the registrant on an annual basis require specific pre-approval by the Committee. The Committee also must approve other non-audit services provided to the registrant and those non-audit services provided to the registrant’s affiliated service providers that relate directly to the operations and the financial reporting of the registrant. Certain of these non-audit services that the Committee believes are a) consistent with the SEC’s auditor independence rules and b) routine and recurring services that will not impair the independence of the independent accountants may be approved by the Committee without consideration on a specific case-by-case basis (“general pre-approval”). 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 operation 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 audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.

 

 

 

(f) Not Applicable

 


 

(g) Affiliates’ Aggregate Non-Audit Fees:

 

Entity Name

Current Fiscal Year
End

Previous Fiscal Year
End

 

 

 

BlackRock MuniYield California Insured Fund, Inc.

$20,377

$413,128

 

 

(h) The registrant’s audit committee has considered and determined that the provision of non-audit services that were rendered to the registrant’s investment adviser (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 any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant’s independence.

 

 

 

Regulation S-X Rule 2-01(c)(7)(ii) – $10,777, 0%

 

 

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)):

 

 

Kent Dixon (retired effective December 31, 2009)

 

 

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 securities to the Fund’s investment adviser (“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 July 31, 2010.

 

    

(a)(1)

The registrant is managed by a team of investment professionals comprised of Theodore R. Jaeckel, Jr., CFA, Managing Director at BlackRock, Inc., and Walter O’Connor, Managing Director at BlackRock, Inc. Each is a member of BlackRock, Inc.’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. Jaeckel and O’Connor have been members of the registrant’s portfolio management team since 2006 and 1997, respectively.

 

Portfolio Manager

Biography

Theodore R. Jaeckel, Jr.

Managing Director at BlackRock, Inc. since 2006; Managing Director of Merrill Lynch Investment Managers, L.P. (“MLIM”) from 2005 to 2006; Director of MLIM from 1997 to 2005.

Walter O’Connor

Managing Director of BlackRock, Inc. since 2006; Managing Director of MLIM from 2003 to 2006; Director of MLIM from 1998 to 2003.

 

 

(a)(2)

As of July 31, 2010:

 

 

(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 

Theodore R. Jaeckel, Jr.

72

0

0

0

0

0

 

$19.74 Billion

$0

$0

$0

$0

$0

Walter O’Connor

72

0

0

0

0

0

 

$19.74 Billion

$0

$0

$0

$0

$0

 

 

(iv)

Potential Material Conflicts of Interest

 

    

BlackRock and its affiliates (collectively, herein “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, stockholder or employee may or may not have an interest in the securities whose purchase and sale BlackRock recommends to the Fund.  BlackRock, or any of its affiliates or significant shareholders, or any officer, director, stockholder, employee or any member of their families may take different actions than those recommended to the Fund by BlackRock with respect to the same securities.  Moreover, BlackRock may refrain from rendering any advice or services concerning securities of companies of which any of BlackRock’s (or its affiliates’ 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.  Each portfolio manager also may manage accounts whose investment strategies may at times be opposed to the strategy utilized for a fund.  In this connection, it should be noted that a portfolio manager may currently manage certain accounts that are subject to performance fees.  In addition, a portfolio manager 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 a policy that is intended to ensure that investment opportunities are allocated fairly and equitably among client accounts over time.  This policy also seeks to achieve reasonable efficiency in client transactions and provide BlackRock with sufficient flexibility to allocate investments in a manner that is consistent with the particular investment discipline and client base.

 

 

(a)(3)

As of July 31, 2010:

 

 

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 such as its Long-Term Retention and Incentive Plan and Restricted Stock Program.

 

 

 


 

Base compensation. Generally, portfolio managers receive base compensation based on their seniority and/or their position with the firm. Senior portfolio managers who perform additional management functions within the portfolio management group or within BlackRock may receive additional compensation for serving in these other capacities.

 

 

 

Discretionary Incentive Compensation

 

Discretionary incentive compensation is a function of several components: the performance of BlackRock, Inc., 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 seniority, role within the portfolio management team, teamwork and contribution to the overall performance of these portfolios and BlackRock.  In most cases, including for the portfolio managers of the Fund, 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.

 

 

 

BlackRock’s Chief Investment Officers make a subjective determination with respect to the portfolio managers’ compensation based on the performance of the funds and other accounts managed by each portfolio manager relative to the various benchmarks noted above.  Performance 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. 

 

 

 

Distribution of Discretionary Incentive Compensation

 

Discretionary incentive compensation is distributed to portfolio managers in a combination of cash and BlackRock, Inc. restricted stock units which vest ratably over a number of years. The BlackRock, Inc. restricted stock units, if properly vested, 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.

 

 

Long-Term Retention and Incentive Plan (“LTIP”) — 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, Inc. restricted stock units that, once vested, settle in BlackRock, Inc. common stock. Messrs. Jaeckel and O’Connor have each received awards under the LTIP.

 

 

 

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 the various investment options. Messrs. Jaeckel and O’Connor have each 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 6% of eligible pay contributed to the plan capped at $4,000 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 managed by the firm. BlackRock contributions follow the investment direction set by participants for their own contributions or, absent employee investment direction, are invested into a balanced portfolio.  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 July 31, 2010.

 

Portfolio Manager

Dollar Range of Equity Securities Beneficially Owned

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 –

On September 17, 2010, the Board of Directors of the Fund amended and restated in its entirety the bylaws of the Fund (the "Amended and Restated Bylaws"). The Amended and Restated Bylaws were deemed effective as of September 17, 2010 and set forth, among other things, the processes and procedures that shareholders of the Fund must follow, and specifies additional information that shareholders of the Fund must provide, when proposing director nominations at any annual meeting or special meeting in lieu of an annual meeting or other business to be considered at an annual meeting or special meeting.

 

 

Item 11 –

Controls and Procedures

 

 

11(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.

 


11(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

 

 

12(a)(1) –

Code of Ethics – See Item 2

 

 

12(a)(2) –

Certifications – Attached hereto

 

 

12(a)(3) –

Not Applicable

 

 

12(b) –

Certifications – Attached hereto

 

 

 


   

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

 

BlackRock MuniYield California Insured Fund, Inc.

   
  By: /s/ Anne F. Ackerley  
    Anne F. Ackerley
    Chief Executive Officer of
    BlackRock MuniYield California Insured Fund, Inc.
   
  Date: October 6, 2010
   
  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/ Anne F. Ackerley  
    Anne F. Ackerley
    Chief Executive Officer (principal executive officer) of
    BlackRock MuniYield California Insured Fund, Inc.
   
  Date: October 6, 2010
   
  By: /s/ Neal J. Andrews  
    Neal J. Andrews
    Chief Financial Officer (principal financial officer) of
    BlackRock MuniYield California Insured Fund, Inc.
   
  Date: October 6, 2010