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 811-06728

 

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

 

Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809

 

Name and address of agent for service: Donald C. Burke, Chief Executive Officer, BlackRock MuniYield Quality Fund II, Inc., 800 Scudders Mill Road, Plainsboro, NJ, 08536. Mailing address: P.O. Box 9011, Princeton, NJ, 08543-9011

 

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

 

Date of fiscal year end: 04/30/2009

 

Date of reporting period: 04/30/2009

 

Item 1 – Report to Stockholders


EQUITIES  FIXED INCOME  REAL ESTATE  LIQUIDITY  ALTERNATIVES  BLACKROCK SOLUTIONS

 

 

Annual Report

(BLACKROCK LOGO)

 

 

APRIL 30, 2009

 

BlackRock MuniYield Fund, Inc. (MYD)

BlackRock MuniYield Quality Fund, Inc. (MQY)

BlackRock MuniYield Quality Fund II, Inc. (MQT)

NOT FDIC INSURED
MAY LOSE VALUE
NO BANK GUARANTEE


 


 

Table of Contents


 

 

 

 





 

 

Page

 





 

Dear Shareholder

 

3

 

Annual Report:

 

 

 

Fund Summaries

 

4

 

The Benefits and Risks of Leveraging

 

7

 

Derivative Instruments

 

7

 

Financial Statements:

 

 

 

Schedules of Investments

 

8

 

Statements of Assets and Liabilities

 

25

 

Statements of Operations

 

26

 

Statements of Changes in Net Assets

 

27

 

Statements of Cash Flows

 

29

 

Financial Highlights

 

30

 

Notes to Financial Statements

 

33

 

Report of Independent Registered Public Accounting Firm

 

40

 

Important Tax Information (Unaudited)

 

40

 

Automatic Dividend Reinvestment Plans

 

41

 

Officers and Directors

 

42

 

Additional Information

 

45

 


 

 

 


2

ANNUAL REPORT

APRIL 30, 2009



 


 

Dear Shareholder

The past 12 months reveal a tale of two markets — one of investor pessimism and decided weakness, and another of optimism and some early signs of recovery. The majority of the past year was characterized by the former as the global financial crisis erupted into the worst recession in decades. Economic data were uniformly poor and daily headlines recounted the downfalls of storied financial firms, volatile swings in global financial markets, and monumental government actions that included widespread (and globally coordinated) monetary and quantitative easing by central banks and large-scale fiscal stimuli. Sentiment improved noticeably in March 2009, however, on the back of new program announcements by the Treasury and Federal Reserve Board, as well as signs of improved economic performance, such as in retail sales, consumer confidence and select areas of the housing market.

Against this backdrop, US equities contended with unprecedented levels of volatility, posting steep declines early, and then pared some of those losses in March and April. The experience in international markets was similar to that in the United States, though there was a marked divergence in regional performance. Notably, emerging economies, which lagged most developed regions through the downturn, were among the market leaders during the late-period rally.

In fixed income markets, while risk aversion remained a dominant theme overall, relatively attractive yields and distressed valuations, alongside a more favorable macro environment, eventually captured investor attention, leading to a modest recovery in non-Treasury assets. A notable example from the opposite end of the credit spectrum was the high yield sector, which generally outperformed in the first four months of 2009 after extraordinary challenges and severe underperformance last year. At the same time, the new year ushered in a return to normalcy for the tax-exempt market, which had registered one of its worst years on record in 2008.

All told, the major benchmark indexes posted mixed results for the current reporting period, reflective of a bifurcated market.

 

 

 

 

 

 

 

 

Total Returns as of April 30, 2009

 

6-month

 

12-month

 









US equities (S&P 500 Index)

 

(8.53

)%

 

(35.31

)%

 









Small cap US equities (Russell 2000 Index)

 

(8.40

)

 

(30.74

)

 









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

 

(2.64

)

 

(42.76

)

 









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

 

8.98

 

 

9.30

 

 









Taxable fixed income (Barclays Capital US Aggregate Bond Index)

 

7.74

 

 

3.84

 

 









Tax-exempt fixed income (Barclays Capital Municipal Bond Index)

 

8.20

 

 

3.11

 

 









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

 

16.39

 

 

(12.55

)

 









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

On June 16, 2009, BlackRock, Inc. announced that it received written notice from Barclays PLC (“Barclays”) in which Barclays’ Board of Directors had accepted BlackRock’s offer to acquire Barclays Global Investors (“BGI”). Barclays also notified BlackRock that its Board will recommend the transaction to Barclays’ shareholders for approval at a special meeting to be held in early August 2009. The combination of BlackRock and BGI will bring together market leaders in active and index strategies to create the preeminent asset management firm. The transaction is expected to close in the fourth quarter 2009 following approval by Barclays’ shareholders, the receipt of client consents and regulatory approvals, and satisfaction of customary closing conditions.

Through periods of market turbulence, as ever, BlackRock’s full resources are dedicated to the management of our clients’ assets. We thank you for entrusting BlackRock with your investments and look forward to continuing to serve you 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 April 30, 2009

BlackRock MuniYield Fund, Inc.


 


Investment Objective


BlackRock MuniYield Fund, Inc. (MYD) (the “Fund”) seeks 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 by investing primarily in a portfolio of long-term, investment grade municipal obligations the interest on which, in the opinion of bond counsel to the issuer, is exempt from federal income taxes. No assurance can be given that the Fund’s investment objective will be achieved.

The Fund’s year end was changed to April 30.

 


Performance


For the six months ended April 30, 2009, the Fund returned 22.93% based on market price and 11.76% based on net asset value (“NAV”). For the same period, the closed-end Lipper General Municipal Debt Funds (Leveraged) category posted an average return of 16.50% on a market price basis and 9.58% on a NAV basis. 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 price and performance based on NAV. Portfolio positioning with respect to duration and yield curve has generally been neutral relative to the Fund’s peer group. In general, the Fund’s credit profile has consistently reflected a high level of exposure to the lower end of the ratings spectrum. While this strategy generates an above-average dividend yield, it also subjects the portfolio to additional volatility during periods when credit spreads are fluctuating. As a consequence, performance tended to suffer late last year when spreads widened, but, more recently, the strong rebound in lower-rated bonds has allowed the Fund to generate a strong competitive return, while maintaining the historically attractive dividend.

 

 

 

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

 

MYD

Initial Offering Date

 

November 29, 1991

Yield on Closing Market Price as of April 30, 2009 ($11.45)1

 

6.71%

Tax Equivalent Yield2

 

10.32%

Current Monthly Distribution per Common Share3

 

$0.064

Current Annualized Distribution per Common Share3

 

$0.768

Leverage as of April 30, 20094

 

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 Monthly Distribution per Share, declared on June 1, 2009, was increased to $0.069. 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 further change in the future.

 

 

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 7.

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 




























 

 

4/30/09

 

10/31/08

 

Change

 

High

 

Low

 













Market Price

 

 

$

11.45

 

 

 

$

9.66

 

 

 

 

18.53

%

 

 

$

11.68

 

 

 

$

7.57

 

 

Net Asset Value

 

 

$

11.53

 

 

 

$

10.70

 

 

 

 

7.76

%

 

 

$

11.55

 

 

 

$

9.39

 

 




























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

 

 

 

 

 

 

 

 


Sector Allocations


 

 

 

4/30/09

 

10/31/08

 







State

 

24

%

 

22

%

 

Health

 

18

 

 

19

 

 

Corporate

 

12

 

 

13

 

 

Education

 

10

 

 

9

 

 

County/City/Special District/School District

 

9

 

 

10

 

 

Housing

 

9

 

 

8

 

 

Utilities

 

8

 

 

7

 

 

Transportation

 

6

 

 

8

 

 

Tobacco

 

4

 

 

4

 

 









 

 

 

 

 

 

 

 


Credit Quality Allocations5


 

 

 

 

 

 

 

 

 

 

4/30/09

 

10/31/08

 







AAA/Aaa

 

28

%

 

32

%

 

AA/Aa

 

26

 

 

24

 

 

A/A

 

20

 

 

15

 

 

BBB/Baa

 

9

 

 

8

 

 

BB/Ba

 

1

 

 

2

 

 

B/B

 

2

 

 

3

 

 

CCC/Caa

 

2

 

 

2

 

 

Not Rated6

 

12

 

 

14

 

 










 

 

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 securities as investment grade quality. As of April 30, 2009 and October 31, 2008, the market value of these securities was $18,072,535 representing 2% and $21,126,114 representing 3%, respectively, of the Fund’s long-term investments.


 

 

 


4

ANNUAL REPORT

APRIL 30, 2009



 

 


 

 

Fund Summary as of April 30, 2009

BlackRock MuniYield Quality Fund, Inc.


 


Investment Objective


BlackRock MuniYield Quality Fund, Inc. (MQY) (the “Fund”) seeks 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 by investing primarily in a portfolio of long-term, high-grade municipal obligations the interest on which, in the opinion of bond counsel to the issuer, is exempt from federal income taxes. No assurance can be given that the Fund’s investment objective will be achieved.

The Fund’s year end was changed to April 30.

 


Performance


For the six months ended April 30, 2009, the Fund returned 16.47% based on market price and 17.07% based on NAV. For the same period, the closed-end Lipper Insured Municipal Debt Funds (Leveraged) category posted an average return of 19.11% on a market price basis and 13.36% on a NAV basis. All returns reflect reinvestment of dividends. The Fund’s discount to NAV, which widened during the period, accounts for the difference between performance based on price and performance based on NAV. Benefiting Fund performance was our constructive market positioning during a period of declining yields and the stabilization of credit spreads, which began to tighten toward the end of the period. The Fund is more sensitive to credit spreads, in general, since the downgrades of the monoline insurers and, in particular, because of its more-than-average exposure to weaker underlying insured bonds. The municipal market generally returned to more typical functioning after an extended period of volatility. This allowed us to continue upgrading the Fund’s overall credit quality, which we believe is warranted given the general economic weakness.

 

 

 

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

 

MQY

Initial Offering Date

 

June 26, 1992

Yield on Closing Market Price as of April 30, 2009 ($12.32)1

 

5.55%

Tax Equivalent Yield2

 

8.54%

Current Monthly Distribution per Common Share3

 

$0.057

Current Annualized Distribution per Common Share3

 

$0.684

Leverage as of April 30, 20094

 

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 Share, declared on June 1, 2009, was increased to $0.067. 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 further 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 7.

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

 

4/30/09

 

10/31/08

 

Change

 

High

 

Low

 


Market Price

 

 

$

12.32

 

 

 

$

10.90

 

 

 

 

13.03

%

 

 

$

12.74

 

 

 

$

8.51

 

 

Net Asset Value

 

 

$

13.27

 

 

 

$

11.68

 

 

 

 

13.61

%

 

 

$

13.49

 

 

 

$

10.32

 

 




























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

 

 

 

 

 

 

 

 


Sector Allocations

 

 

 

 

 

 

 


 

 

 

 

 

 

 

 

 

 

4/30/09

 

10/31/08

 







Transportation

 

26

%

 

27

%

 

County/City/Special District/ School District

 

20

 

 

17

 

 

State

 

18

 

 

20

 

 

Utilities

 

16

 

 

12

 

 

Health

 

7

 

 

8

 

 

Tobacco

 

5

 

 

5

 

 

Corporate

 

4

 

 

5

 

 

Housing

 

2

 

 

3

 

 

Education

 

2

 

 

3

 

 









 

 

 

 

 

 

 

 


Credit Quality Allocations5

 

 

 

 

 

 

 


 

 

 

4/30/09

 

10/31/08

 







AAA/Aaa

 

39

%

 

36

%

 

AA/Aa

 

42

 

 

50

 

 

A/A

 

14

 

 

5

 

 

BBB/Baa

 

5

 

 

6

 

 

B/B

 

 

 

3

 

 










 

 

5

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


 

 

 




ANNUAL REPORT

APRIL 30, 2009

5



 

 


 

 

Fund Summary as of April 30, 2009

BlackRock MuniYield Quality Fund II, Inc.


 


Investment Objective


BlackRock MuniYield Quality Fund II, Inc. (MQT) (the “Fund”) seeks 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 by investing primarily in a portfolio of long-term, high-grade municipal obligations the interest on which, in the opinion of bond counsel to the issuer, is exempt from federal income taxes. The Fund invests primarily in insured municipal bonds. No assurance can be given that the Fund’s investment objective will be achieved.

The Fund’s year end was changed to April 30.

 


Performance


For the six months ended April 30, 2009, the Fund returned 19.90% based on market price and 17.27% based on NAV. For the same period, the closed-end Lipper Insured Municipal Debt Funds (Leveraged) category posted an average return of 19.11% on a market price basis and 13.36% on a NAV basis. 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 price and performance based on NAV. During the period, the Fund benefited from its above-average yield. Performance also was aided by our constructive market positioning during a period of declining yields and the stabilization of credit spreads, which began to tighten toward the end of the period. The Fund is more sensitive to credit spreads, in general, since the downgrades of the monoline insurers and, in particular, because of its more-than-average exposure to weaker underlying insured bonds. The municipal market generally returned to more typical functioning after an extended period of volatility. This allowed us to continue upgrading the Fund’s overall credit quality, which we believe is warranted given the general economic weakness.

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

 

MQT

Initial Offering Date

 

August 28, 1992

Yield on Closing Market Price as of April 30, 2009 ($10.16)1

 

5.91%

Tax Equivalent Yield2

 

9.09%

Current Monthly Distribution per Common Share3

 

$0.05

Current Annualized Distribution per Common Share3

 

$0.60

Leverage as of April 30, 20094

 

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 Share, declared on June 1, 2009, was increased to $0.0575. 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 further 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 7.

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

 

4/30/09

 

10/31/08

 

Change

 

High

 

Low

 


Market Price

 

 

$

10.16

 

 

 

$

8.75

 

 

 

 

16.11

%

 

 

$

10.33

 

 

 

$

6.60

 

 

Net Asset Value

 

 

$

11.55

 

 

 

$

10.17

 

 

 

 

13.57

%

 

 

$

11.74

 

 

 

$

8.87

 

 


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

 

 

 

 

 

 

 

 


Sector Allocations


 

 

 

4/30/09

 

10/31/08

 









Transportation

 

29

%

 

28

%

 

County/City/Special District/School District

 

23

 

 

19

 

 

State

 

18

 

 

22

 

 

Utilities

 

13

 

 

13

 

 

Housing

 

7

 

 

7

 

 

Corporate

 

3

 

 

4

 

 

Health

 

3

 

 

2

 

 

Education

 

2

 

 

3

 

 

Tobacco

 

2

 

 

2

 

 









 

 

 

 

 

 

 

 


Credit Quality Allocations5


 

 

 

 

 

 

 

 

 

 

4/30/09

 

10/31/08

 









AAA/Aaa

 

46

%

 

36

%

 

AA/Aa

 

36

 

 

54

 

 

A/A

 

15

 

 

7

 

 

BBB/Baa

 

3

 

 

3

 

 










 

 

5

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


 

 

 


6

ANNUAL REPORT

APRIL 30, 2009



 


 

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, each Fund issues Preferred Shares, which pay dividends at prevailing short-term interest rates, and invests the proceeds in long-term municipal bonds. In general, the concept of leveraging is based on the premise that the cost of assets to be obtained from leverage 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 yield.

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 Fund’s total portfolio of $150 million earns the income based on long-term interest rates. In this case, the dividends paid to Preferred Shareholders are significantly lower than the income earned on the Trust’s long-term investments, and therefore the Common Shareholders are the beneficiaries of the incremental yield.

Conversely, 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. If short-term interest rates rise, narrowing the differential between short-term and long-term interest rates, the incremental yield pickup on the Common Shares will be reduced or eliminated completely.

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

The Funds may also, from time to time, 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 securities deposited into the TOB trust may adversely affect each Fund’s NAVs 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. The Funds may be required to sell portfolio securities at inopportune times or below fair market values in order to comply with regulatory requirements applicable to the use of leverage or as required by the terms of leverage instruments, which may cause the Funds to incur losses. The use of leverage may limit the Funds’ 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. The Funds will incur expenses in connection with the use of leverage, all of which are borne by the holders of the Common Shares and may reduce returns on 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 April 30, 2009, the Funds had economic leverage from Preferred Shares and TOBs as a percentage of their total managed assets as follows:

 

 

 




 

 

Percent of
Leverage




BlackRock MuniYield Fund, Inc.

 

39%

BlackRock MuniYield Quality Fund, Inc.

 

40%

BlackRock MuniYield Quality Fund II, Inc.

 

40%





 


Derivative Instruments


The Funds may invest in various derivative instruments, including swap agreements and futures and other instruments specified in the Notes to Financials Statements, which 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 other party to the transaction and illiquidity of the derivative instrument. The Funds’ ability to successfully use a derivative instrument depends on the 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 the Funds to sell or purchase portfolio securities at inopportune times or for prices other than current market values, may limit the amount of appreciation the Funds can realize on an investment or may cause the Funds 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

APRIL 30, 2009

7



 

 



 

 

Schedule of Investments April 30, 2009

BlackRock MuniYield Fund, Inc. (MYD)
(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 









Alabama — 1.3%

 

 

 

 

 

 

 

Jefferson County, Alabama, Limited Obligation School
Warrants, Series A, 5.50%, 1/01/22

 

$

5,250

 

$

3,259,620

 

Tuscaloosa, Alabama, Special Care Facilities
Financing Authority, Residential Care Facility
Revenue Bonds (Capstone Village, Inc. Project),
Series A (a)(b):

 

 

 

 

 

 

 

5.625%, 8/01/25

 

 

2,200

 

 

1,049,488

 

5.875%, 8/01/36

 

 

6,425

 

 

2,739,556

 

 

 

 

 

 




 

 

 

 

 

 

7,048,664

 









Arizona — 13.1%

 

 

 

 

 

 

 

Arizona State Transportation Board, Highway Revenue
Bonds, Sub-Series A:

 

 

 

 

 

 

 

5%, 7/01/21

 

 

5,825

 

 

6,190,810

 

5%, 7/01/22

 

 

7,030

 

 

7,469,656

 

5%, 7/01/23

 

 

5,240

 

 

5,533,597

 

Maricopa County, Arizona, IDA, Education Revenue
Bonds (Arizona Charter Schools Project 1),
Series A, 6.75%, 7/01/29

 

 

3,300

 

 

2,202,321

 

Maricopa County, Arizona, IDA, M/F Housing Revenue
Refunding Bonds (CRS Pine Ridge Housing
Corporation), Series A-1 (c)(d):

 

 

 

 

 

 

 

6%, 10/20/31

 

 

5,000

 

 

5,139,050

 

6.05%, 10/20/36

 

 

5,000

 

 

4,973,350

 

Phoenix, Arizona, IDA, Airport Facility, Revenue
Refunding Bonds (America West Airlines Inc.
Project), AMT:

 

 

 

 

 

 

 

6.25%, 6/01/19

 

 

3,000

 

 

1,992,690

 

6.30%, 4/01/23

 

 

5,090

 

 

3,130,299

 

Phoenix, Arizona, IDA, M/F Housing Revenue Bonds
(Summit Apartments LLC Project) (d):

 

 

 

 

 

 

 

6.25%, 7/20/22

 

 

1,610

 

 

1,668,701

 

6.45%, 7/20/32

 

 

1,425

 

 

1,452,104

 

6.55%, 7/20/37

 

 

1,305

 

 

1,328,033

 

Pima County, Arizona, IDA, Education Revenue
Refunding Bonds (Arizona Charter Schools
Project II), Series A:

 

 

 

 

 

 

 

6.75%, 7/01/11 (e)

 

 

565

 

 

631,421

 

6.75%, 7/01/31

 

 

765

 

 

537,390

 

Pima County, Arizona, IDA, Revenue Bonds
(Tucson Electric Power Company), Series A,
6.375%, 9/01/29

 

 

3,000

 

 

2,705,010

 

Salt Verde Financial Corporation, Arizona, Senior Gas
Revenue Bonds:

 

 

 

 

 

 

 

5%, 12/01/32

 

 

10,020

 

 

6,957,788

 

5%, 12/01/37

 

 

11,525

 

 

7,764,854

 


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 









Arizona (concluded)

 

 

 

 

 

 

 

Vistancia Community Facilities District, Arizona, GO:

 

 

 

 

 

 

 

5.50%, 7/15/20

 

$

3,000

 

$

2,605,620

 

5.75%, 7/15/24

 

 

2,125

 

 

1,800,959

 

Yavapai County, Arizona, IDA, Hospital Facility
Revenue Bonds (Yavapai Regional Medical Center),
Series A, 6%, 8/01/33

 

 

5,900

 

 

4,654,687

 

 

 

 

 

 




 

 

 

 

 

 

68,738,340

 









California — 14.5%

 

 

 

 

 

 

 

California Educational Facilities Authority Revenue
Bonds (University of Southern California),
Series A, 5.25%, 10/01/39

 

 

5,310

 

 

5,521,816

 

California State, GO:

 

 

 

 

 

 

 

5%, 4/01/31 (f)

 

 

10

 

 

9,343

 

6.50%, 4/01/33

 

 

14,075

 

 

15,375,671

 

California State, GO, Refunding, 5%, 6/01/32

 

 

11,335

 

 

10,514,686

 

California State Public Works Board, Lease
Revenue Bonds:

 

 

 

 

 

 

 

(Department of Corrections), Series C,
5%, 6/01/25

 

 

2,000

 

 

1,874,960

 

(Department of Mental Health — Coalinga State
Hospital), Series A, 5.125%, 6/01/29

 

 

4,500

 

 

4,063,095

 

California State, Various Purpose, GO,
5.25%, 11/01/25

 

 

6,800

 

 

6,822,168

 

Golden State Tobacco Securitization Corporation of
California, Tobacco Settlement Revenue Bonds (e):

 

 

 

 

 

 

 

Series A-3, 7.875%, 6/01/13

 

 

5,500

 

 

6,658,245

 

Series A-4, 7.80%, 6/01/13

 

 

7,500

 

 

9,058,650

 

Golden State Tobacco Securitization Corporation of
California, Tobacco Settlement Revenue Refunding
Bonds, Senior Series A-1, 5.125%, 6/01/47

 

 

2,090

 

 

1,073,445

 

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

 

 

2,160

 

 

2,180,282

 

Santa Clara, California, Subordinated Electric
Revenue Bonds, Series A, 5%, 7/01/22 (g)

 

 

5,145

 

 

5,150,402

 

University of California Revenue Bonds (Multiple
Purpose Projects), Series Q, 5%, 9/01/21 (h)

 

 

7,465

 

 

7,743,221

 

 

 

 

 

 




 

 

 

 

 

 

76,045,984

 









Colorado — 7.4%

 

 

 

 

 

 

 

Colorado Educational and Cultural Facilities Authority,
Revenue Refunding Bonds (University of Denver
Project), Series B, 5.25%, 3/01/16 (e)(i)

 

 

3,245

 

 

3,852,659

 

Colorado HFA, Revenue Refunding Bonds
(S/F Program), AMT, Series D-2,
6.90%, 4/01/29

 

 

210

 

 

222,394

 


 

 


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 list on the right.

 

 

AMT

Alternative Minimum Tax (subject to)

CABS

Capital Appreciation Bonds

COP

Certificates of Participation

EDA

Economic Development Authority

EDR

Economic Development Revenue Bonds

GAN

Grant Anticipation Notes

GO

General Obligation Bonds

HDA

Housing Development Authority

HFA

Housing Finance Agency

IDA

Industrial Development Authority

IDR

Industrial Development Revenue Bonds

M/F

Multi-Family

PCR

Pollution Control Revenue Bonds

PILOT

Payment in Lieu of Taxes

S/F

Single-Family

VRDN

Variable Rate Demand Notes


 

 

 

See Notes to Financial Statements.




8

ANNUAL REPORT

APRIL 30, 2009



 

 



 

 

Schedule of Investments (continued)

BlackRock MuniYield Fund, Inc. (MYD)
(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 









Colorado (concluded)

 

 

 

 

 

 

 

Colorado Health Facilities Authority, Revenue
Refunding Bonds (Poudre Valley Health Care) (h):

 

 

 

 

 

 

 

Series B, 5.25%, 3/01/36

 

$

2,840

 

$

2,680,051

 

Series C, 5.25%, 3/01/40

 

 

5,000

 

 

4,678,050

 

Denver, Colorado, City and County Airport Revenue
Bonds, AMT, Series D, 7.75%, 11/15/13 (f)

 

 

6,195

 

 

6,666,873

 

Elk Valley, Colorado, Public Improvement Revenue
Bonds (Public Improvement Fee), Series A:

 

 

 

 

 

 

 

7.10%, 9/01/14

 

 

1,105

 

 

1,089,210

 

7.35%, 9/01/31

 

 

5,065

 

 

4,027,384

 

Platte River Power Authority, Colorado, Power
Revenue Bonds, Series HH:

 

 

 

 

 

 

 

5%, 6/01/26

 

 

2,500

 

 

2,627,275

 

5%, 6/01/27

 

 

1,130

 

 

1,177,223

 

Plaza Metropolitan District Number 1, Colorado,
Tax Allocation Revenue Bonds (Public
Improvement Fees):

 

 

 

 

 

 

 

8%, 12/01/25

 

 

6,850

 

 

5,808,869

 

8.125%, 12/01/25

 

 

1,885

 

 

1,448,623

 

University of Colorado, Enterprise System Revenue
Bonds, Series A:

 

 

 

 

 

 

 

5.25%, 6/01/30

 

 

2,250

 

 

2,331,923

 

5.375%, 6/01/32

 

 

1,250

 

 

1,301,800

 

5.375%, 6/01/38

 

 

830

 

 

858,369

 

 

 

 

 

 




 

 

 

 

 

 

38,770,703

 









Connecticut — 0.0%

 

 

 

 

 

 

 

Connecticut State Development Authority, IDR
(AFCO Cargo BDL-LLC Project), AMT,
7.35%, 4/01/10

 

 

125

 

 

123,097

 









Florida — 5.4%

 

 

 

 

 

 

 

Broward County, Florida, Water and Sewer Utility
Revenue Bonds, Series A, 5.25%, 10/01/34

 

 

2,155

 

 

2,153,405

 

Greater Orlando Aviation Authority, Florida, Airport
Facilities Revenue Bonds (JetBlue Airways Corp.),
AMT, 6.50%, 11/15/36

 

 

2,500

 

 

1,482,625

 

Hillsborough County, Florida, IDA, Exempt Facilities
Revenue Bonds (National Gypsum Company), AMT:

 

 

 

 

 

 

 

Series A, 7.125%, 4/01/30

 

 

11,500

 

 

5,907,205

 

Series B, 7.125%, 4/01/30

 

 

5,000

 

 

2,568,350

 

Lee County, Florida, Revenue Bonds,
5%, 10/01/22 (f)

 

 

4,705

 

 

4,711,446

 

Miami-Dade County, Florida, Aviation Revenue
Refunding Bonds (Miami International Airport),
AMT, Series A, 5.25%, 10/01/38 (j)

 

 

5,150

 

 

4,645,248

 

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

 

 

5,330

 

 

3,526,168

 

Orange County, Florida, Health Facilities Authority,
Health Care Revenue Refunding Bonds (Orlando
Lutheran Towers), 5.375%, 7/01/20

 

 

1,100

 

 

819,434

 

Santa Rosa Bay Bridge Authority, Florida, Revenue
Bonds, 6.25%, 7/01/28

 

 

4,620

 

 

2,642,409

 

 

 

 

 

 




 

 

 

 

 

 

28,456,290

 










 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 









Georgia — 1.5%

 

 

 

 

 

 

 

Main Street Natural Gas, Inc., Georgia, Gas Project
Revenue Bonds, Series A, 6.375%, 7/15/38 (a)(b)

 

$

3,445

 

$

1,283,297

 

Private Colleges and Universities Authority, Georgia,
Revenue Refunding Bonds (Emory University
Project), Series C, 5%, 9/01/38

 

 

6,400

 

 

6,499,840

 

 

 

 

 

 




 

 

 

 

 

 

7,783,137

 









Idaho — 1.6%

 

 

 

 

 

 

 

Idaho Housing Agency, S/F Mortgage Revenue
Refunding Bonds, AMT, Senior Series C-2,
7.15%, 7/01/23

 

 

30

 

 

30,043

 

Power County, Idaho, Industrial Development
Corporation, Solid Waste Disposal Revenue Bonds
(FMC Corporation Project), AMT, 6.45%, 8/01/32

 

 

10,000

 

 

8,626,500

 

 

 

 

 

 




 

 

 

 

 

 

8,656,543

 









Illinois — 1.5%

 

 

 

 

 

 

 

Bolingbrook, Illinois, Special Services Area Number 1,
Special Tax Bonds (Forest City Project),
5.90%, 3/01/27

 

 

1,000

 

 

688,160

 

Illinois State Finance Authority Revenue Bonds,
Series A:

 

 

 

 

 

 

 

(Friendship Village of Schaumburg),
5.625%, 2/15/37

 

 

1,750

 

 

987,385

 

(Landing At Plymouth Place Project),
6%, 5/15/37

 

 

2,155

 

 

1,369,395

 

(Monarch Landing, Inc. Project),
7%, 12/01/37

 

 

1,445

 

 

875,395

 

Metropolitan Pier and Exposition Authority, Illinois,
Dedicated State Tax Revenue Bonds (McCormick
Place Expansion), Series A, 5.50%, 6/15/23 (g)

 

 

4,000

 

 

4,179,280

 

 

 

 

 

 




 

 

 

 

 

 

8,099,615

 









Indiana — 0.4%

 

 

 

 

 

 

 

Indiana Municipal Power Agency, Power Supply
System Revenue Bonds, Series B, 6%, 1/01/39

 

 

2,230

 

 

2,297,368

 









Kansas — 0.3%

 

 

 

 

 

 

 

Lenexa, Kansas, Health Care Facility Revenue Bonds
(Lakeview Village Inc.), Series C, 6.875%,
5/15/12 (e)

 

 

1,250

 

 

1,459,950

 









Kentucky — 0.8%

 

 

 

 

 

 

 

Kentucky Economic Development Finance Authority,
Health System Revenue Refunding Bonds (Norton
Healthcare, Inc.), Series A:

 

 

 

 

 

 

 

6.625%, 10/01/10 (e)

 

 

2,350

 

 

2,555,131

 

6.625%, 10/01/28

 

 

650

 

 

598,474

 

Kentucky Economic Development Financing Authority,
Louisville Arena Project Revenue Bonds (Louisville
Arena Authority, Inc.), Sub-Series A-1, 6%,
12/01/38 (j)

 

 

800

 

 

824,224

 

 

 

 

 

 




 

 

 

 

 

 

3,977,829

 









Louisiana — 7.6%

 

 

 

 

 

 

 

East Baton Rouge, Louisiana, Sewer Commission
Revenue Refunding Bonds, 5.25%, 2/01/39

 

 

1,610

 

 

1,564,324

 

Louisiana Local Government Environmental Facilities
and Community Development Authority Revenue
Bonds (Westlake Chemical Corporation),
6.75%, 11/01/32

 

 

10,000

 

 

6,960,500

 


 

 

 

See Notes to Financial Statements.

 

 




ANNUAL REPORT

APRIL 30, 2009

9



 

 



 

 

Schedule of Investments (continued)

BlackRock MuniYield Fund, Inc. (MYD)
(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 









Louisiana (concluded)

 

 

 

 

 

 

 

Louisiana Public Facilities Authority, Hospital
Revenue Bonds (Franciscan Missionaries of
Our Lady Health System, Inc.), Series A,
5.25%, 8/15/36

 

$

6,750

 

$

5,746,073

 

Louisiana State Citizens Property Insurance
Corporation, Assessment Revenue Bonds,
Series B, 5%, 6/01/20 (f)

 

 

10,000

 

 

9,208,900

 

Port New Orleans, Louisiana, IDR, Refunding
(Continental Grain Company Project),
6.50%, 1/01/17

 

 

19,000

 

 

16,152,090

 

 

 

 

 

 




 

 

 

 

 

 

39,631,887

 









Maryland — 3.0%

 

 

 

 

 

 

 

Baltimore, Maryland, Convention Center Hotel
Revenue Bonds, Sub-Series B, 5.875%, 9/01/39

 

 

1,920

 

 

1,151,962

 

Maryland State Community Development
Administration, Department of Housing and
Community Development, Residential Revenue
Refunding Bonds, AMT, Series A, 4.65%, 9/01/32

 

 

2,580

 

 

2,203,578

 

Maryland State Energy Financing Administration,
Limited Obligation Revenue Bonds (Cogeneration —
AES Warrior Run), AMT, 7.40%, 9/01/19

 

 

3,000

 

 

2,277,630

 

Maryland State Health and Higher Educational
Facilities Authority, Revenue Refunding Bonds:

 

 

 

 

 

 

 

(Peninsula Regional Medical Center),
5%, 7/01/36

 

 

5,000

 

 

4,250,750

 

(University of Maryland Medical System),
6%, 7/01/12 (e)

 

 

4,000

 

 

4,563,040

 

Maryland State Industrial Development Financing
Authority, EDR (Our Lady of Good Counsel School),
Series A, 6%, 5/01/35

 

 

500

 

 

345,775

 

Prince Georges County, Maryland, Special Obligation
Bonds (National Harbor Project), 5.20%, 7/01/34

 

 

1,500

 

 

832,155

 

 

 

 

 

 




 

 

 

 

 

 

15,624,890

 









Massachusetts — 3.2%

 

 

 

 

 

 

 

Massachusetts State Development Finance Agency,
Human Service Provider Revenue Bonds (Seven
Hills Foundation & Affiliates), 5%, 9/01/35 (k)

 

 

3,500

 

 

2,656,185

 

Massachusetts State Development Finance Agency,
Revenue Refunding Bonds (Western New England
College), Series A, 5%, 9/01/33 (j)

 

 

2,750

 

 

2,663,292

 

Massachusetts State Special Obligation Dedicated
Tax Revenue Bonds, 5.25%, 1/01/14 (e)(i)

 

 

10,000

 

 

11,298,700

 

 

 

 

 

 




 

 

 

 

 

 

16,618,177

 









Michigan — 2.6%

 

 

 

 

 

 

 

Macomb County, Michigan, Hospital Finance Authority,
Hospital Revenue Bonds (Mount Clemens General
Hospital), Series B, 5.875%, 11/15/13 (e)

 

 

3,015

 

 

3,542,836

 

Michigan State Hospital Finance Authority, Revenue
Refunding Bonds (Henry Ford Health System),
Series A, 5.25%, 11/15/32

 

 

1,000

 

 

793,650

 

Royal Oak, Michigan, Hospital Finance Authority,
Hospital Revenue Refunding Bonds (William
Beaumont Hospital):

 

 

 

 

 

 

 

8%, 9/01/29

 

 

2,000

 

 

2,223,540

 

8.25%, 9/01/39

 

 

6,365

 

 

7,082,717

 

 

 

 

 

 




 

 

 

 

 

 

13,642,743

 










 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 









Minnesota — 0.7%

 

 

 

 

 

 

 

Eden Prairie, Minnesota, M/F Housing Revenue
Bonds (Rolling Hills Project), Series A (d):

 

 

 

 

 

 

 

6%, 8/20/21

 

$

420

 

$

451,269

 

6.20%, 2/20/43

 

 

2,000

 

 

2,122,940

 

Minneapolis, Minnesota, M/F Housing Revenue
Bonds (Gaar Scott Loft Project), AMT,
5.95%, 5/01/30

 

 

905

 

 

921,426

 

 

 

 

 

 




 

 

 

 

 

 

3,495,635

 









Mississippi — 0.5%

 

 

 

 

 

 

 

University of Southern Mississippi Education Building
Corporation Revenue Bonds (Campus Facilities
Improvements Project), 5.375%, 9/01/36

 

 

2,780

 

 

2,836,156

 









Missouri — 4.2%

 

 

 

 

 

 

 

Missouri State Highways and Transportation
Commission, First Lien State Road Revenue
Bonds, Series A:

 

 

 

 

 

 

 

5%, 5/01/20

 

 

5,000

 

 

5,531,900

 

5%, 5/01/21

 

 

15,000

 

 

16,445,250

 

 

 

 

 

 




 

 

 

 

 

 

21,977,150

 









Nebraska — 0.3%

 

 

 

 

 

 

 

Lincoln, Nebraska, Sanitation and Sewer
Revenue Bonds:

 

 

 

 

 

 

 

4.25%, 6/15/24

 

 

865

 

 

877,127

 

4.25%, 6/15/25

 

 

905

 

 

911,027

 

 

 

 

 

 




 

 

 

 

 

 

1,788,154

 









New Hampshire — 0.7%

 

 

 

 

 

 

 

New Hampshire Health and Education Facilities
Authority, Revenue Refunding Bonds (Elliot Hospital),
Series B, 5.60%, 10/01/22

 

 

3,425

 

 

3,431,439

 









New Jersey — 16.9%

 

 

 

 

 

 

 

New Jersey EDA, Cigarette Tax Revenue Bonds,
5.50%, 6/15/24

 

 

11,435

 

 

8,909,466

 

New Jersey EDA, First Mortgage Revenue Bonds,
Series A:

 

 

 

 

 

 

 

(Lions Gate Project), 5.75%, 1/01/25

 

 

710

 

 

548,127

 

(Lions Gate Project), 5.875%, 1/01/37

 

 

230

 

 

160,485

 

(The Presbyterian Home), 6.375%, 11/01/31

 

 

3,000

 

 

2,033,490

 

New Jersey EDA, Motor Vehicle Surcharge Revenue
Bonds, Series A, 5%, 7/01/29 (g)

 

 

20,000

 

 

19,308,600

 

New Jersey EDA, School Facilities Construction
Revenue Bonds, Series O, 5.25%, 3/01/23

 

 

8,825

 

 

9,110,577

 

New Jersey EDA, Special Facility Revenue Bonds
(Continental Airlines Inc. Project), AMT:

 

 

 

 

 

 

 

6.25%, 9/15/19

 

 

3,905

 

 

2,850,689

 

6.25%, 9/15/29

 

 

14,000

 

 

8,953,000

 

New Jersey Health Care Facilities Financing Authority
Revenue Bonds (Pascack Valley Hospital
Association) (a)(b):

 

 

 

 

 

 

 

6%, 7/01/13

 

 

1,335

 

 

34,576

 

6.625%, 7/01/36

 

 

1,835

 

 

47,526

 


 

 

 

See Notes to Financial Statements.


10

ANNUAL REPORT

APRIL 30, 2009



 

 


 

 

Schedule of Investments (continued)

BlackRock MuniYield Fund, Inc. (MYD)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 









New Jersey (concluded)

 

 

 

 

 

 

 

New Jersey State Transportation Trust Fund Authority,
Transportation System Revenue Bonds:

 

 

 

 

 

 

 

CABS, Series C, 5.05%, 12/15/35 (f)(l)

 

$

13,110

 

$

2,513,974

 

Series A, 5.50%, 12/15/21

 

 

3,975

 

 

4,340,024

 

Series A, 5.50%, 12/15/22

 

 

6,600

 

 

7,149,318

 

Series D, 5%, 6/15/19

 

 

5,425

 

 

5,748,655

 

Series D, 5%, 6/15/20

 

 

9,410

 

 

9,737,374

 

Series D, 5%, 6/15/20 (h)

 

 

7,000

 

 

7,289,380

 

 

 

 

 

 




 

 

 

 

 

 

88,735,261

 









New York — 11.1%

 

 

 

 

 

 

 

Dutchess County, New York, IDA, Civic Facility
Revenue Refunding Bonds (Saint Francis
Hospital), Series A, 7.50%, 3/01/29

 

 

2,200

 

 

1,973,092

 

Metropolitan Transportation Authority, New York,
Dedicated Tax Fund Revenue Bonds, Series B,
5%, 11/15/34

 

 

4,910

 

 

4,765,155

 

New York City, New York, City IDA, PILOT Revenue
Bonds (Queens Baseball Stadium Project) (f):

 

 

 

 

 

 

 

5%, 1/01/22

 

 

2,000

 

 

1,852,580

 

5%, 1/01/23

 

 

2,175

 

 

2,012,136

 

New York City, New York, City IDA, Special Facility
Revenue Bonds (British Airways Plc Project), AMT,
7.625%, 12/01/32

 

 

1,250

 

 

840,675

 

New York City, New York, City Municipal Water Finance
Authority, Second General Resolution, Water and
Sewer System Revenue Bonds, Series FF-2,
5.50%, 6/15/40

 

 

3,200

 

 

3,365,984

 

New York City, New York, City Transitional Finance
Authority, Building Aid Revenue Refunding Bonds,
Series S-1, 4.50%, 1/15/38

 

 

1,970

 

 

1,702,356

 

New York City, New York, GO, Refunding,
Series A (g)(i):

 

 

 

 

 

 

 

6.375%, 5/15/14

 

 

1,020

 

 

1,079,976

 

6.375%, 5/15/15

 

 

95

 

 

100,586

 

New York City, New York, GO, Series O, 5%, 6/01/33

 

 

2,500

 

 

2,457,950

 

New York State Dormitory Authority, Non-State
Supported Debt, Revenue Refunding Bonds,
Series A:

 

 

 

 

 

 

 

(Mount Sinai Health), 6.75%, 7/01/10 (e)

 

 

3,145

 

 

3,372,667

 

(Mount Sinai-NYU Medical Center Health
System), 6.75%, 7/01/20

 

 

1,855

 

 

1,901,746

 

New York State Dormitory Authority, State Personal
Income Tax Revenue Bonds (Education), Series F,
5%, 3/15/35

 

 

5,000

 

 

5,027,500

 

Suffolk County, New York, IDA, IDR, Refunding
(Nissequogue Cogeneration Partners Facility),
AMT, 5.50%, 1/01/23

 

 

2,500

 

 

1,765,725

 

Tobacco Settlement Financing Corporation of
New York Revenue Bonds, Series C-1,
5.50%, 6/01/21

 

 

9,400

 

 

9,615,542

 

Triborough Bridge and Tunnel Authority, New York,
Subordinate Revenue Bonds, 5.25%, 11/15/30

 

 

10,000

 

 

10,132,600

 

Westchester County, New York, IDA, Continuing Care
Retirement, Mortgage Revenue Bonds (Kendal on
Hudson Project), Series A:

 

 

 

 

 

 

 

6.50%, 1/01/13 (e)

 

 

2,895

 

 

3,374,846

 

6.375%, 1/01/24

 

 

3,450

 

 

2,708,043

 

 

 

 

 

 




 

 

 

 

 

 

58,049,159

 










 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 









North Carolina — 2.0%

 

 

 

 

 

 

 

North Carolina Eastern Municipal Power Agency,
Power System Revenue Bonds, Series D,
6.75%, 1/01/26

 

$

4,750

 

$

4,799,257

 

North Carolina HFA, Home Ownership Revenue
Bonds, AMT, Series 8-A, 6.20%, 7/01/16

 

 

145

 

 

146,315

 

North Carolina, HFA, S/F Revenue Bonds, Series II,
6.20%, 3/01/16 (c)

 

 

550

 

 

551,056

 

North Carolina Medical Care Commission, Health
Care Facilities, First Mortgage Revenue Bonds:

 

 

 

 

 

 

 

(Arbor Acres Community Project),
6.375%, 3/01/12 (e)

 

 

1,000

 

 

1,138,410

 

(Presbyterian Homes Project), 5.40%, 10/01/27

 

 

5,000

 

 

3,829,000

 

 

 

 

 

 




 

 

 

 

 

 

10,464,038

 









Ohio — 3.3%

 

 

 

 

 

 

 

American Municipal Power, Inc., Ohio, Revenue
Refunding Bonds (Prairie State Energy Campus
Project), Series A, 5%, 2/15/38

 

 

2,995

 

 

2,905,839

 

Buckeye Tobacco Settlement Financing Authority,
Ohio, Tobacco Settlement Asset-Backed Bonds,
Series A-2, 6.50%, 6/01/47

 

 

7,460

 

 

4,608,042

 

Hamilton County, Ohio, Sewer System Improvement
Revenue Bonds (The Metropolitan Sewer District of
Greater Cincinnati), Series B, 5%, 12/01/28 (g)

 

 

5,065

 

 

5,138,544

 

Lucas County, Ohio, Health Care Facility Revenue
Refunding and Improvement Bonds (Sunset
Retirement Communities), Series A,
6.625%, 8/15/30

 

 

2,175

 

 

2,006,285

 

Port of Greater Cincinnati Development Authority,
Ohio, Special Assessment Revenue Bonds
(Cooperative Public Parking Infrastructure
Project), 6.30%, 2/15/24

 

 

825

 

 

646,693

 

Toledo-Lucas County, Ohio, Port Authority Revenue
Bonds (Saint Mary Woods Project), Series A:

 

 

 

 

 

 

 

6%, 5/15/24

 

 

750

 

 

546,338

 

6%, 5/15/34

 

 

2,250

 

 

1,452,510

 

 

 

 

 

 




 

 

 

 

 

 

17,304,251

 









Oregon — 1.6%

 

 

 

 

 

 

 

Oregon State Department of Administrative Services,
COP, Series A, 6%, 5/01/10 (e)(f)

 

 

4,405

 

 

4,675,026

 

Oregon State, GO, Refunding (Veterans Welfare),
Series 80A, 5.70%, 10/01/32

 

 

2,170

 

 

2,190,897

 

Portland, Oregon, Housing Authority, Housing
Revenue Bonds (Pine Square and University
Place), Series A, 5.875%, 1/01/22

 

 

1,610

 

 

1,287,887

 

 

 

 

 

 




 

 

 

 

 

 

8,153,810

 









Pennsylvania — 4.9%

 

 

 

 

 

 

 

Pennsylvania Economic Development Financing
Authority, Exempt Facilities Revenue Bonds
(National Gypsum Company), AMT, Series A,
6.25%, 11/01/27

 

 

5,270

 

 

2,735,446

 

Pennsylvania HFA, S/F Mortgage Revenue Refunding
Bonds, AMT, Series 97A, 4.60%, 10/01/27

 

 

2,450

 

 

2,128,340

 

Pennsylvania State Higher Educational Facilities
Authority, Health Services Revenue Refunding
Bonds (Allegheny Delaware Valley Obligation),
Series C, 5.875%, 11/15/16 (g)

 

 

16,270

 

 

13,489,294

 


 

 

 

See Notes to Financial Statements.

 




ANNUAL REPORT

APRIL 30, 2009

11



 

 


 

 

Schedule of Investments (continued)

BlackRock MuniYield Fund, Inc. (MYD)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 









Pennsylvania (concluded)

 

 

 

 

 

 

 

Philadelphia, Pennsylvania, Authority for IDR,
Commercial Development, 7.75%, 12/01/17

 

$

1,265

 

$

1,079,374

 

Sayre, Pennsylvania, Health Care Facilities Authority,
Revenue Bonds (Guthrie Healthcare System),
Series B, 7.125%, 12/01/11 (e)

 

 

5,000

 

 

6,088,350

 

 

 

 

 

 




 

 

 

 

 

 

25,520,804

 









Puerto Rico — 1.4%

 

 

 

 

 

 

 

Puerto Rico Electric Power Authority, Power Revenue
Refunding Bonds, Series UU, 5%, 7/01/23 (h)

 

 

7,100

 

 

7,194,572

 









Rhode Island — 1.0%

 

 

 

 

 

 

 

Central Falls, Rhode Island, Detention Facility
Corporation, Revenue Refunding Bonds,
7.25%, 7/15/35

 

 

4,240

 

 

2,904,485

 

Woonsocket, Rhode Island, GO (g)(i):

 

 

 

 

 

 

 

6%, 10/01/17

 

 

1,225

 

 

1,275,715

 

6%, 10/01/18

 

 

1,195

 

 

1,241,019

 

 

 

 

 

 




 

 

 

 

 

 

5,421,219

 









South Dakota — 0.9%

 

 

 

 

 

 

 

South Dakota State Health and Educational
Facilities Authority Revenue Bonds (Sanford
Health), 5%, 11/01/40

 

 

5,210

 

 

4,555,885

 









Tennessee — 0.7%

 

 

 

 

 

 

 

Hardeman County, Tennessee, Correctional Facilities
Corporation Revenue Bonds, 7.75%, 8/01/17

 

 

3,775

 

 

3,439,100

 









Texas — 13.7%

 

 

 

 

 

 

 

Alliance Airport Authority, Inc., Texas, Special Facilities
Revenue Refunding Bonds (American Airlines Inc.
Project), AMT, 5.75%, 12/01/29

 

 

3,500

 

 

1,330,035

 

Austin, Texas, Convention Center Revenue Bonds
(Convention Enterprises Inc.), First Tier, Series A,
6.70%, 1/01/11 (e)

 

 

5,000

 

 

5,465,300

 

Bexar County, Texas, Housing Finance Corporation,
M/F Housing Revenue Bonds (Water at Northern
Hills Apartments), Series A (g):

 

 

 

 

 

 

 

5.80%, 8/01/21

 

 

1,300

 

 

886,652

 

6%, 8/01/31

 

 

2,460

 

 

1,490,760

 

6.05%, 8/01/36

 

 

1,000

 

 

590,030

 

Brazos River Authority, Texas, PCR, Refunding
(TXU Energy Company Project), AMT, Series C,
5.75%, 5/01/36 (p)

 

 

7,600

 

 

4,484,000

 

Dallas-Fort Worth, Texas, International Airport Facility
Improvement Corporation, Revenue Refunding
Bonds (American Airlines, Inc.), AMT,
5.50%, 11/01/30

 

 

12,500

 

 

4,750,000

 

Gregg County, Texas, Health Facilities Development
Corporation, Hospital Revenue Bonds (Good
Shepherd Medical Center Project) (e)(k):

 

 

 

 

 

 

 

6.375%, 10/01/10

 

 

2,000

 

 

2,145,960

 

6.875%, 10/01/10

 

 

3,000

 

 

3,239,610

 

Guadalupe-Blanco River Authority, Texas, Sewage
and Solid Waste Disposal Facility Revenue Bonds
(E. I. du Pont de Nemours and Company Project),
AMT, 6.40%, 4/01/26

 

 

5,000

 

 

4,752,300

 

Gulf Coast, Texas, IDA, Solid Waste Disposal Revenue
Bonds (Citgo Petroleum Corporation Project),
AMT, 7.50%, 5/01/25

 

 

3,900

 

 

3,785,925

 


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 









Texas (concluded)

 

 

 

 

 

 

 

Houston, Texas, Airport System, Special Facilities
Revenue Bonds (Continental Airlines), AMT,
Series E:

 

 

 

 

 

 

 

7.375%, 7/01/22

 

$

3,500

 

$

2,707,635

 

7%, 7/01/29

 

 

3,000

 

 

2,107,410

 

Houston, Texas, Industrial Development
Corporation Revenue Bonds (Air Cargo), AMT,
6.375%, 1/01/23

 

 

1,590

 

 

1,257,308

 

Lower Colorado River Authority, Texas, PCR (Samsung
Austin Semiconductor), AMT, 6.95%, 4/01/30

 

 

3,330

 

 

3,085,112

 

North Texas Tollway Authority, System Revenue
Refunding Bonds, Second Tier, Series F,
6.125%, 1/01/31

 

 

12,140

 

 

12,168,286

 

San Antonio Energy Acquisition Public Facilities
Corporation, Texas, Gas Supply Revenue Bonds:

 

 

 

 

 

 

 

5.50%, 8/01/23

 

 

6,955

 

 

5,948,820

 

5.50%, 8/01/25

 

 

6,365

 

 

5,369,196

 

Texas State Turnpike Authority, Central Texas Turnpike
System Revenue Bonds, First Tier, Series A,
5.50%, 8/15/39 (f)

 

 

6,500

 

 

6,206,655

 

 

 

 

 

 




 

 

 

 

 

 

71,770,994

 









U.S. Virgin Islands — 0.9%

 

 

 

 

 

 

 

Virgin Islands Public Finance Authority, Refinery
Facilities Revenue Bonds (Hovensa Refinery),
AMT, 6.125%, 7/01/22

 

 

6,250

 

 

4,678,813

 









Virginia — 1.8%

 

 

 

 

 

 

 

Fairfax County, Virginia, IDA, Health Care Revenue
Refunding Bonds (Inova Health System Project),
Series A, 5.50%, 5/15/35

 

 

6,270

 

 

6,342,168

 

James City County, Virginia, EDA, Residential Care
Facility, First Mortgage Revenue Refunding Bonds
(Williamsburg Landing, Inc.), Series A:

 

 

 

 

 

 

 

5.35%, 9/01/26

 

 

1,500

 

 

1,060,020

 

5.50%, 9/01/34

 

 

2,000

 

 

1,315,520

 

Winchester, Virginia, IDA, Residential Care Facilities,
Revenue Bonds (Westminster-Canterbury), Series A,
5.20%, 1/01/27

 

 

1,000

 

 

732,660

 

 

 

 

 

 




 

 

 

 

 

 

9,450,368

 









Washington — 0.3%

 

 

 

 

 

 

 

Vancouver, Washington, Housing Authority, Housing
Revenue Bonds (Teal Pointe Apartments
Project), AMT:

 

 

 

 

 

 

 

6%, 9/01/22

 

 

945

 

 

766,291

 

6.20%, 9/01/32

 

 

1,250

 

 

930,000

 

 

 

 

 

 




 

 

 

 

 

 

1,696,291

 









Wisconsin — 4.1%

 

 

 

 

 

 

 

Milwaukee, Wisconsin, Revenue Bonds (Air Cargo),
AMT, 6.50%, 1/01/25

 

 

660

 

 

519,235

 

Wisconsin State Health and Educational Facilities
Authority, Revenue Refunding Bonds (Franciscan
Sisters Healthcare), 5%, 9/01/26

 

 

7,425

 

 

5,717,473

 

Wisconsin State, General Fund Annual Appropriation
Bonds, Series A, 6%, 5/01/36

 

 

14,300

 

 

15,069,483

 

 

 

 

 

 




 

 

 

 

 

 

21,306,191

 










 

 

 

See Notes to Financial Statements.

 


12

ANNUAL REPORT

APRIL 30, 2009



 

 


 

 

Schedule of Investments (continued)

BlackRock MuniYield Fund, Inc. (MYD)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 







Wyoming — 0.9%

 

 

 

 

 

 

 

Wyoming Community Development Authority,
Housing Revenue Bonds, AMT, Series 3,
4.75%, 12/01/37

 

$

5,315

 

$

4,514,083

 









Total Municipal Bonds — 136.1%

 

 

 

 

 

712,758,590

 










 

 

 

 

 

 

 

 


Municipal Bonds Transferred to
Tender Option Bond Trusts (m)

 

 

 

 

 

 

 









Alabama — 0.8%

 

 

 

 

 

 

 

Birmingham, Alabama, Special Care Facilities
Financing Authority, Revenue Refunding Bonds
(Ascension Health Credit), Series C-2,
5%, 11/15/36

 

 

4,538

 

 

4,392,975

 









Colorado — 2.3%

 

 

 

 

 

 

 

Colorado Health Facilities Authority Revenue Bonds
(Catholic Health) (h):

 

 

 

 

 

 

 

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

 

 

7,490

 

 

7,180,663

 

Series C-7, 5%, 9/01/36

 

 

4,800

 

 

4,606,368

 

 

 

 

 

 




 

 

 

 

 

 

11,787,031

 









Connecticut — 3.6%

 

 

 

 

 

 

 

Connecticut State Health and Educational Facilities
Authority Revenue Bonds (Yale University):

 

 

 

 

 

 

 

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

 

 

9,130

 

 

9,385,183

 

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

 

 

9,270

 

 

9,463,743

 

 

 

 

 

 




 

 

 

 

 

 

18,848,926

 









North Carolina — 3.7%

 

 

 

 

 

 

 

North Carolina Capital Facilities Finance Agency,
Revenue Refunding Bonds (Duke University
Project), Series A, 5%, 10/01/41

 

 

18,898

 

 

19,248,469

 









South Carolina — 3.3%

 

 

 

 

 

 

 

Charleston Educational Excellence Financing
Corporation, South Carolina, Revenue Bonds
(Charleston County School District) (j):

 

 

 

 

 

 

 

5.25%, 12/01/28

 

 

7,795

 

 

7,855,022

 

5.25%, 12/01/29

 

 

6,920

 

 

6,938,753

 

5.25%, 12/01/30

 

 

2,510

 

 

2,500,236

 

 

 

 

 

 




 

 

 

 

 

 

17,294,011

 









Tennessee — 2.2%

 

 

 

 

 

 

 

Shelby County, Tennessee, Health, Educational and
Housing Facility Board, Hospital Revenue
Refunding Bonds (Saint Jude Children’s Research
Hospital), 5%, 7/01/31

 

 

11,240

 

 

11,239,213

 









Virginia — 9.3%

 

 

 

 

 

 

 

University of Virginia, Revenue Refunding Bonds,
5%, 6/01/40

 

 

10,620

 

 

10,963,982

 

Virginia State, HDA, Commonwealth Mortgage
Revenue Bonds, Series H, Sub-Series H-1 (g):

 

 

 

 

 

 

 

5.35%, 7/01/31

 

 

6,720

 

 

6,754,944

 

5.375%, 7/01/36

 

 

30,930

 

 

31,012,274

 

 

 

 

 

 




 

 

 

 

 

 

48,731,200

 










 

 

 

 

 

 

 

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (m)

 

Par
(000)

 

Value

 









Washington — 1.0%

 

 

 

 

 

 

 

Central Puget Sound Regional Transportation
Authority, Washington, Sales and Use Tax Revenue
Bonds, Series A, 5%, 11/01/32 (h)

 

$

5,384

 

$

5,432,166

 









Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 26.2%

 

 

 

 

 

136,973,991

 









Total Long-Term Investments
(Cost — $937,908,162) — 162.3%

 

 

 

 

 

849,732,581

 










 

 

 

 

 

 

 

 


Short-Term Securities

 

Shares

 

 

 

 









Money Market Fund — 0.4%

 

 

 

 

 

 

 

FFI Institutional Tax-Exempt Fund, 0.72% (n)(o)

 

 

2,105,032

 

 

2,105,032

 









Total Short-Term Securities
(Cost — $2,105,032) — 0.4%

 

 

 

 

 

2,105,032

 









Total Investments (Cost — $940,013,194*) — 162.7%

 

 

 

 

 

851,837,613

 

Other Assets Less Liabilities — 2.6%

 

 

 

 

 

13,612,483

 

Liability for Trust Certificates, Including
Interest Expense and Fees Payable — (13.4)%

 

 

 

 

 

(70,313,115

)

Preferred Shares, at Redemption Value — (51.9)%

 

 

 

 

 

(271,547,261

)

 

 

 

 

 




Net Assets Applicable to Common Shares — 100.0%

 

 

 

 

$

523,589,720

 

 

 

 

 

 





 

 


*

The cost and unrealized appreciation (depreciation) of investments as of April 30, 2009, as computed for federal income tax purposes, were as follows:


 

 

 

 

 

Aggregate cost

 

$

867,869,792

 

 

 




Gross unrealized appreciation

 

$

19,457,667

 

Gross unrealized depreciation

 

 

(105,626,922

)

 

 




Net unrealized depreciation

 

$

(86,169,255

)

 

 





 

 

(a)

Non-income producing security.

 

 

(b)

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

 

 

(c)

FHA Insured.

 

 

(d)

GNMA Collateralized.

 

 

(e)

US government securities, held in escrow, are used to pay interest on this security as well as to retire the bond in full at the date indicated, typically at a premium to par.

 

 

(f)

AMBAC Insured.

 

 

(g)

NPFGC Insured.

 

 

(h)

FSA Insured.

 

 

(i)

FGIC Insured.

 

 

(j)

Assured Guaranty Insured.

 

 

(k)

Radian Insured.

 

 

(l)

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

 

 

(m)

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.

 

 

(n)

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


 

 

 

 

 

 

 

 







Affiliate

 

Net
Activity

 

Income

 







FFI Institutional Tax-Exempt Fund

 

 

(5,352,245

)

$

236,612

 










 

 

(o)

Represents the current yield as of report date.

 

 

(p)

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


 

 

 

See Notes to Financial Statements.

 




ANNUAL REPORT

APRIL 30, 2009

13



 

 


 

Schedule of Investments (concluded)

BlackRock MuniYield Fund, Inc. (MYD)


 

 

 

Effective November 1, 2008, the Fund adopted Financial Accounting Standards Board Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (“FAS 157”). FAS 157 clarifies the definition of fair value, establishes a framework for measuring fair values and requires additional disclosures about the use of 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 securities

 

 

 

 

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 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 circumstance, 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 methodology 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 April 30, 2009 in determining the fair valuation of the Fund’s investments:


 

 

 

 

 





Valuation Inputs

 

Investments in
Securities

 





 

 

Assets

 

 

 



Level 1

 

$

2,105,032

 

Level 2

 

 

849,732,581

 

Level 3

 

 

 






Total

 

$

851,837,613

 

 

 





 

 

 

See Notes to Financial Statements.

 


14

ANNUAL REPORT

APRIL 30, 2009



 

 



 

 

Schedule of Investments April 30, 2009

BlackRock MuniYield Quality Fund, Inc. (MQY)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 









Alabama — 2.2%

 

 

 

 

 

 

 

Jefferson County, Alabama, Limited Obligation School
Warrants, Series A, 4.75%, 1/01/25

 

$

3,000

 

$

1,805,100

 

University of Alabama, General Revenue Bonds,
Series A, 5%, 7/01/34 (a)

 

 

7,125

 

 

7,205,370

 

 

 

 

 

 




 

 

 

 

 

 

9,010,470

 









Alaska — 1.0%

 

 

 

 

 

 

 

Matanuska-Susitna, Alaska, Lease Revenue Bonds
(Goose Creek Correctional Center Project),
6%, 9/01/32 (b)

 

 

3,925

 

 

4,215,529

 









Arizona — 0.5%

 

 

 

 

 

 

 

Salt Verde Financial Corporation, Arizona, Senior Gas
Revenue Bonds, 5%, 12/01/32

 

 

2,970

 

 

2,062,338

 









California — 17.9%

 

 

 

 

 

 

 

Alameda Corridor Transportation Authority, California,
CABS, Subordinate Lien, Series A, 5.45%,
10/01/25 (c)(d)

 

 

4,150

 

 

3,033,028

 

Arcadia, California, Unified School District, GO
(Election of 2006), CABS, Series A, 4.961%,
8/01/39 (e)(f)

 

 

2,200

 

 

309,144

 

Cabrillo, California, Community College District, GO
(Election of 2004), Series B (a)(f):

 

 

 

 

 

 

 

5.188%, 8/01/37

 

 

3,250

 

 

526,825

 

4.87%, 8/01/38

 

 

7,405

 

 

1,123,264

 

California State, GO, 5.50%, 4/01/28

 

 

5

 

 

5,038

 

California State, GO, Refunding, 5.125%, 6/01/27

 

 

30

 

 

29,564

 

California State University, Systemwide Revenue
Bonds, Series A, 5%, 11/01/35 (a)(g)

 

 

3,450

 

 

3,308,274

 

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

 

 

1,200

 

 

1,193,820

 

Coast Community College District, California, CABS,
(Election of 2002), Series C, 5.448%,
8/01/13 (d)(e)

 

 

2,800

 

 

2,271,528

 

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

 

 

6,110

 

 

6,247,047

 

Fresno, California, Unified School District, GO
(Election of 2001), Series E, 5%, 8/01/30 (e)

 

 

1,230

 

 

1,218,782

 

Golden State Tobacco Securitization Corporation of
California, Tobacco Settlement Revenue Bonds,
Series B, 5.50%, 6/01/13 (h)(i)

 

 

10,000

 

 

11,210,300

 

Los Angeles, California, Community College District,
GO, Refunding (Election of 2008), Series A,
6%, 8/01/33

 

 

2,635

 

 

2,815,761

 

Los Angeles, California, Municipal Improvement
Corporation, Lease Revenue Bonds, Series B1,
4.75%, 8/01/37 (a)(g)

 

 

3,210

 

 

2,961,450

 

Metropolitan Water District of Southern California,
Waterworks Revenue Bonds, Series B-1 (a)(g):

 

 

 

 

 

 

 

5%, 10/01/29

 

 

4,000

 

 

4,050,400

 

5%, 10/01/36

 

 

2,275

 

 

2,280,278

 

Mount Diablo, California, Unified School District, GO
(Election of 2002), 5%, 7/01/27 (a)(g)

 

 

2,000

 

 

1,981,020

 

Orange County, California, Sanitation District, COP:

 

 

 

 

 

 

 

5%, 2/01/33 (a)(g)

 

 

2,750

 

 

2,723,380

 

Series B, 5%, 2/01/30 (e)

 

 

3,500

 

 

3,517,605

 

Series B, 5%, 2/01/31 (e)

 

 

1,200

 

 

1,201,440

 

Port of Oakland, California, Revenue Bonds, AMT,
Series K, 5.75%, 11/01/29 (a)(g)

 

 

2,405

 

 

2,162,143

 


 

 

 

 

 

 

 

 

Municipal Bonds

 

 

Par
(000)

 

 

Value

 









California (concluded)

 

 

 

 

 

 

 

Poway, California, Redevelopment Agency, Tax Allocation
Refunding Bonds (Paguay Redevelopment Project),
5.125%, 6/15/33 (c)

 

$

2,000

 

$

1,648,260

 

Sacramento, California, Unified School District, GO
(Election of 2002), 5%, 7/01/30 (a)

 

 

2,500

 

 

2,467,675

 

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

 

 

500

 

 

504,695

 

San Jose, California, Airport Revenue Refunding
Bonds, AMT, Series A, 5.50%, 3/01/32 (c)

 

 

5,100

 

 

4,660,737

 

San Jose, California, Unified School District, Santa
Clara County, GO (Election of 2002), Series B,
5%, 8/01/29 (a)(g)

 

 

2,825

 

 

2,830,791

 

San Mateo County, California, Community College
District, GO (Election of 2001), Series A,
5%, 9/01/26 (a)(g)

 

 

2,725

 

 

2,755,656

 

Ventura County, California, Community College
District, GO (Election of 2002), Series B,
5%, 8/01/30 (a)

 

 

3,150

 

 

3,121,272

 

 

 

 

 

 




 

 

 

 

 

 

72,159,177

 









Colorado — 0.9%

 

 

 

 

 

 

 

Colorado Health Facilities Authority Revenue Bonds
(Covenant Retirement Communities Inc.), Series A (j):

 

 

 

 

 

 

 

5.50%, 12/01/27

 

 

1,600

 

 

1,208,688

 

5.50%, 12/01/33

 

 

900

 

 

627,489

 

E-470 Public Highway Authority, Colorado, CABS,
Series B, 5.506%, 9/01/29 (a)(f)

 

 

9,000

 

 

1,685,250

 

 

 

 

 

 




 

 

 

 

 

 

3,521,427

 









District of Columbia — 0.5%

 

 

 

 

 

 

 

District of Columbia, Income Tax Revenue Bonds,
Series A, 5.50%, 12/01/30

 

 

1,325

 

 

1,403,480

 

District of Columbia, Revenue Refunding Bonds
(Catholic University of America), 5.625%,
10/01/29 (c)

 

 

570

 

 

576,851

 

 

 

 

 

 




 

 

 

 

 

 

1,980,331

 









Florida — 5.8%

 

 

 

 

 

 

 

Beacon Tradeport Community Development District,
Florida, Special Assessment Revenue Refunding
Bonds (Commercial Project), Series A, 5.625%,
5/01/32 (j)

 

 

2,235

 

 

1,844,322

 

Duval County, Florida, School Board, COP (Master
Lease Program), 5%, 7/01/33 (e)

 

 

3,100

 

 

2,929,500

 

Florida State Department of Environmental Protection,
Preservation Revenue Bonds, Series B, 5%,
7/01/27 (a)

 

 

2,545

 

 

2,491,300

 

Miami-Dade County, Florida, Aviation Revenue
Refunding Bonds (Miami International Airport), AMT:

 

 

 

 

 

 

 

5%, 10/01/40 (b)(i)

 

 

8,200

 

 

7,070,942

 

Series A, 5%, 10/01/38 (k)

 

 

2,900

 

 

2,371,446

 

Miami-Dade County, Florida, GO (Building Better
Communities Program), Series B, 6.375%, 7/01/28

 

 

3,300

 

 

3,660,954

 

Miami, Florida, Special Obligation Revenue Bonds
(Street and Sidewalk Improvement Program),
5%, 1/01/37 (a)

 

 

1,100

 

 

1,010,515

 

Orange County, Florida, Sales Tax Revenue Refunding
Bonds, Series B, 5.125%, 1/01/32 (a)(g)

 

 

2,200

 

 

2,118,490

 

 

 

 

 

 




 

 

 

 

 

 

23,497,469

 










 

 

 

See Notes to Financial Statements.

 


ANNUAL REPORT

APRIL 30, 2009

15



 

 



 

 

Schedule of Investments (continued)

BlackRock MuniYield Quality Fund, Inc. (MQY)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 







Georgia — 2.0%

 

 

 

 

 

 

 

Atlanta, Georgia, Water and Wastewater
Revenue Bonds:

 

 

 

 

 

 

 

5%, 11/01/34 (e)

 

$

2,020

 

$

1,997,033

 

Series A, 5%, 11/01/33 (a)

 

 

1,200

 

 

1,063,812

 

Series A, 5%, 11/01/39 (a)

 

 

2,525

 

 

2,192,432

 

Augusta, Georgia, Water and Sewer Revenue Bonds,
5.25%, 10/01/39 (e)

 

 

2,820

 

 

2,858,324

 

 

 

 

 

 




 

 

 

 

 

 

8,111,601

 









Hawaii — 0.5%

 

 

 

 

 

 

 

Hawaii State, GO, Series CX, 5.50%, 2/01/21 (e)

 

 

2,000

 

 

2,119,640

 









Illinois — 20.8%

 

 

 

 

 

 

 

Chicago, Illinois, O’Hare International Airport, General
Airport Revenue Bonds, Third Lien, AMT, Series B-2:

 

 

 

 

 

 

 

5.75%, 1/01/23 (e)

 

 

3,400

 

 

3,449,640

 

5.75%, 1/01/24 (e)

 

 

4,000

 

 

4,046,920

 

6%, 1/01/29 (i)

 

 

3,300

 

 

3,232,581

 

Chicago, Illinois, O’Hare International Airport, General
Airport Revenue Refunding Bonds, Third Lien, AMT:

 

 

 

 

 

 

 

Series A, 5.75%, 1/01/21 (a)

 

 

13,665

 

 

13,629,334

 

Series A, 5.50%, 1/01/22 (a)

 

 

5,000

 

 

4,857,550

 

Series A, 5.375%, 1/01/32 (a)

 

 

12,500

 

 

11,099,625

 

Series A-2, 5.75%, 1/01/21 (e)

 

 

2,665

 

 

2,705,002

 

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

 

 

5,080

 

 

5,800,039

 

Illinois Sports Facilities Authority, State Tax Supported
CABS, 5.348%, 6/15/30 (c)(d)

 

 

28,525

 

 

25,973,439

 

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

 

 

2,000

 

 

2,072,360

 

Metropolitan Pier and Exposition Authority, Illinois,
Dedicated State Tax Revenue Refunding Bonds
(McCormick Place Expansion Project), 5.50%,
12/15/24 (a)(g)

 

 

7,000

 

 

7,174,230

 

 

 

 

 

 




 

 

 

 

 

 

84,040,720

 









Indiana — 1.8%

 

 

 

 

 

 

 

Indiana Municipal Power Agency, Power Supply System
Revenue Bonds, Series B, 5.75%, 1/01/34

 

 

550

 

 

552,854

 

Indianapolis, Indiana, Local Public Improvement Bond
Bank, Revenue Refunding Bonds (Indianapolis
Airport Authority Project), AMT, Series B (a):

 

 

 

 

 

 

 

5.25%, 1/01/28

 

 

2,470

 

 

2,255,678

 

5.25%, 1/01/30

 

 

5,055

 

 

4,581,144

 

 

 

 

 

 




 

 

 

 

 

 

7,389,676

 









Louisiana — 4.2%

 

 

 

 

 

 

 

East Baton Rouge, Louisiana, Sewage Commission
Revenue Refunding Bonds Series B,
5.25%, 2/01/39

 

 

300

 

 

291,489

 

Louisiana Local Government Environmental Facilities
and Community Development Authority, Revenue
Bonds (Capital Projects and Equipment Acquisition
Program), Series A, 6.30%, 7/01/30 (c)

 

 

5,100

 

 

4,604,484

 

Louisiana Public Facilities Authority, Revenue
Refunding Bonds (CHRISTUS Health), Series B,
6.50%, 7/01/30 (b)

 

 

2,000

 

 

2,159,140

 

Louisiana State Citizens Property Insurance
Corporation, Assessment Revenue Bonds,
Series C-2, 6.75%, 6/01/26 (b)

 

 

5,000

 

 

5,358,850

 


 

 

 

 

 

 

 

 

Municipal Bonds

 

 

Par
(000)

 

 

Value

 









Louisiana (concluded)

 

 

 

 

 

 

 

Louisiana State Gas and Fuels Tax Revenue Bonds,
Series A, 4.75%, 5/01/39 (e)

 

$

2,550

 

$

2,440,019

 

Louisiana State Transportation Authority, Senior Lien
Toll Revenue CABS, Series B, 5.31%,
12/01/27 (c)(f)

 

 

4,675

 

 

1,468,090

 

Rapides Financing Authority, Louisiana, Revenue
Bonds (Cleco Power LLC Project), AMT, 4.70%,
11/01/36 (c)

 

 

800

 

 

538,704

 

 

 

 

 

 




 

 

 

 

 

 

16,860,776

 









Maryland — 0.4%

 

 

 

 

 

 

 

Maryland State Community Development
Administration, Department of Housing and
Community Development, Residential Revenue
Refunding Bonds, AMT, Series A, 5.75%, 9/01/39

 

 

1,725

 

 

1,736,765

 









Massachusetts — 2.0%

 

 

 

 

 

 

 

Massachusetts State, HFA, Rental Housing Mortgage
Revenue Bonds, AMT, Series C, 5.60%, 1/01/45 (e)

 

 

4,000

 

 

3,873,800

 

Massachusetts State, HFA, S/F Housing Revenue
Bonds, AMT, Series 128, 4.80%, 12/01/27 (e)

 

 

2,200

 

 

2,003,408

 

Massachusetts State Port Authority, Special Facilities
Revenue Bonds (Delta Air Lines Inc. Project), AMT,
Series A, 5.50%, 1/01/19 (c)

 

 

3,825

 

 

2,407,570

 

 

 

 

 

 




 

 

 

 

 

 

8,284,778

 









Michigan — 7.6%

 

 

 

 

 

 

 

Detroit, Michigan, Sewage Disposal System, Second
Lien Revenue Bonds, Series B, 5%, 7/01/36 (a)(g)

 

 

4,650

 

 

3,889,027

 

Detroit, Michigan, Sewage Disposal System, Second
Lien Revenue Refunding Bonds, Series E, 5.75%,
7/01/31 (g)(l)

 

 

8,300

 

 

8,507,251

 

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

 

 

2,140

 

 

1,829,764

 

Michigan State Revenue Bonds, GAN, 5.25%,
9/15/26 (e)

 

 

3,350

 

 

3,365,578

 

Michigan State Strategic Fund, Limited Obligation
Revenue Refunding Bonds (Detroit Edison Company
Pollution Control Project), AMT (i):

 

 

 

 

 

 

 

Series A, 5.50%, 6/01/30

 

 

1,700

 

 

1,479,901

 

Series C, 5.65%, 9/01/29

 

 

3,300

 

 

2,965,083

 

Series C, 5.45%, 12/15/32

 

 

5,800

 

 

4,921,300

 

Royal Oak, Michigan, Hospital Finance Authority,
Hospital Revenue Refunding Bonds (William
Beaumont Hospital), 8.25%, 9/01/39

 

 

3,510

 

 

3,905,788

 

 

 

 

 

 




 

 

 

 

 

 

30,863,692

 









Minnesota — 1.2%

 

 

 

 

 

 

 

Dakota County, Minnesota, Community Development
Agency, S/F Mortgage Revenue Bonds (Mortgage-
Backed Securities Program), Series B, 5.15%,
12/01/38 (m)(n)(o)

 

 

173

 

 

172,111

 

Minneapolis, Minnesota, Health Care System,
Revenue Refunding Bonds (Fairview Health
Services), Series B, 6.50%, 11/15/38 (b)

 

 

4,265

 

 

4,624,369

 

 

 

 

 

 




 

 

 

 

 

 

4,796,480

 









Nebraska — 0.6%

 

 

 

 

 

 

 

Washington County, Nebraska, Wastewater Facilities
Revenue Bonds (Cargill Inc. Project), AMT,
5.90%, 11/01/27

 

 

2,300

 

 

2,244,409

 










 

 

 

See Notes to Financial Statements.

 




16

ANNUAL REPORT

APRIL 30, 2009



 

 



 

 

Schedule of Investments (continued)

BlackRock MuniYield Quality Fund, Inc. (MQY)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 







Nevada — 10.4%

 

 

 

 

 

 

 

Carson City, Nevada, Hospital Revenue Bonds
(Carson-Tahoe Hospital Project), Series A,
5.50%, 9/01/33 (j)

 

$

4,100

 

$

 

2,957,166

 

Clark County, Nevada, Airport System Subordinate
Lien Revenue Bonds, Series A-2 (a)(g):

 

 

 

 

 

 

 

5%, 7/01/30

 

 

2,000

 

 

1,890,020

 

5%, 7/01/36

 

 

19,100

 

 

17,608,290

 

Clark County, Nevada, IDR (Southwest Gas Corporation
Project), AMT (g):

 

 

 

 

 

 

 

Series A, 4.75%, 9/01/36

 

 

45

 

 

29,572

 

Series D, 5.25%, 3/01/38 (a)

 

 

12,000

 

 

8,612,640

 

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

 

 

2,425

 

 

2,570,403

 

Las Vegas, Nevada, Limited Tax, GO
(Performing Arts Center):

 

 

 

 

 

 

 

6%, 4/01/34

 

 

1,150

 

 

1,183,707

 

6%, 4/01/39

 

 

5,000

 

 

5,151,500

 

Las Vegas Valley Water District, Nevada, GO, Refunding,
Series A, 5%, 6/01/24 (a)(g)

 

 

2,050

 

 

2,071,341

 

 

 

 

 

 




 

 

 

 

 

 

42,074,639

 









New Hampshire — 1.1%

 

 

 

 

 

 

 

New Hampshire State Business Finance Authority, PCR,
Refunding (Public Service Company), AMT, Series D,
6%, 5/01/21 (a)

 

 

4,600

 

 

4,458,688

 









New Jersey — 7.9%

 

 

 

 

 

 

 

New Jersey EDA, Cigarette Tax Revenue Bonds (j):

 

 

 

 

 

 

 

5.75%, 6/15/29

 

 

710

 

 

524,314

 

5.50%, 6/15/31

 

 

1,285

 

 

899,346

 

New Jersey EDA, Motor Vehicle Surcharge Revenue
Bonds, Series A, 5.25%, 7/01/31 (a)

 

 

20,065

 

 

20,037,310

 

New Jersey EDA, School Facilities Construction
Revenue Bonds, Series O:

 

 

 

 

 

 

 

5.125%, 3/01/28

 

 

2,660

 

 

2,697,958

 

5.125%, 3/01/30

 

 

7,500

 

 

7,569,075

 

 

 

 

 

 




 

 

 

 

 

 

31,728,003

 









New York — 6.6%

 

 

 

 

 

 

 

Metropolitan Transportation Authority, New York,
Transportation Revenue Bonds, Series A, 5%,
11/15/32 (a)(g)

 

 

8,990

 

 

8,688,026

 

New York City, New York, City Municipal Water Finance
Authority, Water and Sewer System Revenue Bonds,
Series A, 5.75%, 6/15/40

 

 

3,500

 

 

3,757,845

 

New York City, New York, GO, Series B, 5.875%,
8/01/10 (a)(h)

 

 

10,000

 

 

10,764,400

 

Tobacco Settlement Financing Corporation of New York
Revenue Bonds, Series A-1, 5.25%, 6/01/22 (c)

 

 

3,570

 

 

3,605,200

 

 

 

 

 

 




 

 

 

 

 

 

26,815,471

 









Oklahoma — 0.2%

 

 

 

 

 

 

 

Tulsa, Oklahoma, Airports Improvement Trust, General
Revenue Bonds (Tulsa International Airport), AMT,
Series B, 6.125%, 6/01/26 (a)(g)

 

 

680

 

 

680,823

 










 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 









Pennsylvania — 1.0%

 

 

 

 

 

 

 

Pennsylvania HFA, S/F Mortgage Revenue Refunding
Bonds, AMT:

 

 

 

 

 

 

 

Series 73A, 5.45%, 10/01/32

 

$

2,120

 

$

2,049,192

 

Series 99A, 5.25%, 10/01/32

 

 

2,000

 

 

1,881,880

 

 

 

 

 

 




 

 

 

 

 

 

3,931,072

 









Puerto Rico — 0.6%

 

 

 

 

 

 

 

Puerto Rico Electric Power Authority, Power Revenue
Refunding Bonds, Series VV, 5.25%, 7/01/30 (a)(g)

 

 

2,400

 

 

2,229,024

 









South Carolina — 2.9%

 

 

 

 

 

 

 

Berkeley County, South Carolina, School District,
Installment Lease Revenue Bonds (Securing Assets
for Education Project), 5.125%, 12/01/30

 

 

3,750

 

 

3,684,937

 

Kershaw County, South Carolina, Public Schools
Foundation, Installment Power Revenue Refunding
Bonds, 5%, 12/01/29 (k)

 

 

3,000

 

 

2,928,270

 

South Carolina State Public Service Authority,
Revenue Refunding Bonds, Series A,
5.50%, 1/01/38

 

 

4,700

 

 

4,933,261

 

 

 

 

 

 




 

 

 

 

 

 

11,546,468

 









Tennessee — 1.4%

 

 

 

 

 

 

 

Memphis-Shelby County, Tennessee, Airport Authority,
Airport Revenue Bonds, AMT, Series D, 6.25%,
3/01/18 (c)

 

 

2,500

 

 

2,542,000

 

Tennessee Energy Acquisition Corporation, Gas
Revenue Bonds, Series A, 5.25%, 9/01/26

 

 

4,035

 

 

3,259,998

 

 

 

 

 

 




 

 

 

 

 

 

5,801,998

 









Texas — 16.6%

 

 

 

 

 

 

 

Bell County, Texas, Health Facilities Development
Revenue Bonds (Lutheran General Health Care
System), 6.50%, 7/01/19 (p)

 

 

1,000

 

 

1,250,770

 

Dallas-Fort Worth, Texas, International Airport, Joint
Revenue Bonds, AMT, Series B, 6%, 11/01/23 (a)

 

 

800

 

 

801,408

 

Dallas-Fort Worth, Texas, International Airport Revenue
Refunding and Improvement Bonds, AMT,
Series A (a)(g):

 

 

 

 

 

 

 

5.875%, 11/01/17

 

 

1,835

 

 

1,866,599

 

5.875%, 11/01/18

 

 

2,145

 

 

2,172,906

 

5.875%, 11/01/19

 

 

2,385

 

 

2,413,525

 

Gregg County, Texas, Health Facilities Development
Corporation, Hospital Revenue Bonds (Good
Shepherd Medical Center Project) (h)(j):

 

 

 

 

 

 

 

6.375%, 10/01/10

 

 

2,600

 

 

2,789,748

 

6.875%, 10/01/10

 

 

3,000

 

 

3,239,610

 

Harris County-Houston Sports Authority, Texas,
Revenue Refunding Bonds, Senior Lien, Series G,
5.75%, 11/15/20 (a)

 

 

3,900

 

 

3,786,042

 

Houston, Texas, Combined Utility System, First Lien
Revenue Refunding Bonds, Series A,
6%, 11/15/35 (b)

 

 

2,850

 

 

3,033,397

 

Lewisville, Texas, Independent School District, Capital
Appreciation and School Building, GO, Refunding,
4.671%, 8/15/24 (a)(f)(g)

 

 

6,150

 

 

2,702,187

 

Lone Star College System, Texas, GO, 5%, 8/15/33

 

 

4,800

 

 

4,810,272

 

Mansfield, Texas, Independent School District, GO,
5%, 2/15/33

 

 

2,300

 

 

2,344,413

 

North Harris County, Texas, Regional Water Authority,
Senior Lien Revenue Bonds, 5.125%, 12/15/35 (a)

 

 

7,150

 

 

6,982,047

 


 

 

 

See Notes to Financial Statements.

 


ANNUAL REPORT

APRIL 30, 2009

17



 

 



 

 

Schedule of Investments (continued)

BlackRock MuniYield Quality Fund, Inc. (MQY)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 







Texas (concluded)

 

 

 

 

 

 

 

North Texas Tollway Authority, System Revenue
Refunding Bonds, First Tier:

 

 

 

 

 

 

 

5.75%, 1/01/40 (a)

 

$

12,300

 

$

12,340,467

 

Series A, 6%, 1/01/25

 

 

450

 

 

472,905

 

Texas State Turnpike Authority, Central Texas Turnpike
System Revenue Bonds, First Tier, Series A (c):

 

 

 

 

 

 

 

5.75%, 8/15/38

 

 

7,200

 

 

7,118,856

 

5%, 8/15/42

 

 

10,000

 

 

8,785,600

 

 

 

 

 

 




 

 

 

 

 

 

66,910,752

 









Utah — 4.4%

 

 

 

 

 

 

 

Salt Lake City, Utah, Hospital Revenue Refunding
Bonds (IHC Hospitals Inc.), 6.30%, 2/15/15 (a)(p)

 

 

15,000

 

 

17,585,250

 









Vermont — 0.5%

 

 

 

 

 

 

 

Vermont HFA, Revenue Refunding Bonds, AMT,
Series C, 5.50%, 11/01/38 (e)

 

 

1,975

 

 

1,907,969

 









Virginia — 0.1%

 

 

 

 

 

 

 

Fairfax County, Virginia, IDA, Health Care Revenue
Refunding Bonds (Inova Health System Project),
Series A, 5.50%, 5/15/35

 

 

450

 

 

455,179

 









Washington — 2.0%

 

 

 

 

 

 

 

King County, Washington, Sewer, GO, 5%,
1/01/35 (a)(g)

 

 

100

 

 

100,091

 

Port of Tacoma, Washington, Revenue Refunding
Bonds, Series A, 5.25%, 12/01/14 (c)(h)

 

 

2,400

 

 

2,807,640

 

Tacoma, Washington, Regional Water Supply System,
Water Revenue Bonds, 5%, 12/01/32 (a)

 

 

5,100

 

 

5,113,056

 

 

 

 

 

 




 

 

 

 

 

 

8,020,787

 









Total Municipal Bonds — 125.6%

 

 

 

 

 

507,041,401

 










 

 

 

 

 

 

 

 









Municipal Bonds Transferred to
Tender Option Bond Trusts (q)

 

 

 

 

 

 

 









California — 8.2%

 

 

 

 

 

 

 

Anaheim, California, Public Financing Authority,
Electric System Distribution Facilities Revenue Bonds,
Series A, 5%, 10/01/31 (e)

 

 

1,244

 

 

1,224,518

 

Golden State Tobacco Securitization Corporation of
California, Tobacco Settlement Revenue Bonds,
Series B, 5.625%, 6/01/38 (k)(h)

 

 

14,160

 

 

15,942,319

 

San Diego County, California, Water Authority, Water
Revenue Refunding Bonds, COP, Series A:

 

 

 

 

 

 

 

5%, 5/01/32 (a)

 

 

9,003

 

 

9,009,626

 

5%, 5/01/33 (e)

 

 

5,170

 

 

5,084,850

 

Tamalpais, California, Union High School District, GO
(Election of 2001), 5%, 8/01/28 (e)

 

 

1,950

 

 

1,905,287

 

 

 

 

 

 




 

 

 

 

 

 

33,166,600

 










 

 

 

 

 

 

 

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (q)

 

Par
(000)

 

Value

 







Florida — 3.9%

 

 

 

 

 

 

 

Jacksonville Electric Authority, Florida, Electric System
Revenue Refunding Bonds, Series A,
5.63%, 10/01/32

 

$

4,310

 

$

4,460,979

 

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

 

 

11,350

 

 

11,290,526

 

 

 

 

 

 




 

 

 

 

 

 

15,751,505

 









Georgia — 3.7%

 

 

 

 

 

 

 

Atlanta, Georgia, Airport Passenger Facility Charge
and Subordinate Lien General Revenue Refunding
Bonds, Series C, 5%, 1/01/33 (e)

 

 

10,000

 

 

9,903,400

 

Augusta, Georgia, Water and Sewer Revenue Bonds,
5.25%, 10/01/34 (e)

 

 

5,000

 

 

5,079,800

 

 

 

 

 

 




 

 

 

 

 

 

14,983,200

 









Illinois — 4.5%

 

 

 

 

 

 

 

Chicago, Illinois, Water Revenue Refunding Bonds,
Second Lien, 5.25%, 11/01/33 (e)

 

 

14,429

 

 

14,590,067

 

Metropolitan Pier and Exposition Authority, Illinois,
Dedicated State Tax Revenue Refunding Bonds
(McCormick Place Expansion Project), Series B,
5.75%, 6/15/23 (a)

 

 

3,499

 

 

3,684,146

 

 

 

 

 

 




 

 

 

 

 

 

18,274,213

 









Massachusetts — 4.2%

 

 

 

 

 

 

 

Massachusetts State School Building Authority,
Dedicated Sales Tax Revenue Bonds, Series A,
5%, 8/15/30 (e)

 

 

16,500

 

 

16,810,272

 









New Hampshire — 2.5%

 

 

 

 

 

 

 

New Hampshire Health and Education Facilities
Authority Revenue Bonds (Dartmouth-Hitchcock
Obligation Group), 5.5%, 8/01/27 (e)

 

 

10,000

 

 

10,081,900

 









New Jersey — 2.3%

 

 

 

 

 

 

 

New Jersey EDA, Cigarette Tax Revenue Bonds (b):

 

 

 

 

 

 

 

5.50%, 6/15/24

 

 

7,150

 

 

7,062,842

 

5.50%, 6/15/31

 

 

2,400

 

 

2,339,904

 

 

 

 

 

 




 

 

 

 

 

 

9,402,746

 









New York — 3.4%

 

 

 

 

 

 

 

Erie County, New York, IDA, School Facility Revenue
Bonds (City of Buffalo Project), Series A, 5.75%,
5/01/28 (e)

 

 

2,007

 

 

2,065,860

 

New York State Dormitory Authority, State Personal
Income Tax Revenue Bonds (Education), Series B,
5.75%, 3/15/36

 

 

1,545

 

 

1,668,090

 

New York State Thruway Authority, General Revenue
Refunding Bonds, Series G, 5%, 1/01/32 (e)

 

 

10,000

 

 

10,015,100

 

 

 

 

 

 




 

 

 

 

 

 

13,749,050

 









Texas — 2.7%

 

 

 

 

 

 

 

Clear Creek, Texas, Independent School District, GO,
Refunding, 5%, 2/15/33

 

 

5,900

 

 

6,070,894

 

Cypress-Fairbanks, Texas, Independent School District,
GO, 5%, 02/15/32

 

 

4,750

 

 

4,847,945

 

 

 

 

 

 




 

 

 

 

 

 

10,918,839

 









Virginia — 0.8%

 

 

 

 

 

 

 

Virginia State, HDA, Commonwealth Mortgage
Revenue Bonds, Series H, Sub-Series H-1, 5.35%,
7/01/31 (a)

 

 

3,195

 

 

3,211,614

 










 

 

 

See Notes to Financial Statements.

 




18

ANNUAL REPORT

APRIL 30, 2009



 

 



 

 

Schedule of Investments (concluded)

BlackRock MuniYield Quality Fund, Inc. (MQY)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (q)

 

Par
(000)

 

Value

 









Washington — 0.6%

 

 

 

 

 

 

 

Central Puget Sound Regional Transportation Authority,
Washington, Sales and Use Tax Revenue Bonds,
Series A, 5%, 11/01/32 (e)

 

$

2,504

 

$

2,526,941

 









Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 36.8%

 

 

 

 

 

148,876,880

 









Total Long-Term Investments
(Cost — $679,347,089) — 162.4%

 

 

 

 

 

655,918,281

 









 

 

 

 

 

 

 

 









Short-Term Securities

 

Shares

 

 

 

 









Money Market Fund — 2.7%

 

 

 

 

 

 

 

FFI Institutional Tax-Exempt Fund, 0.72% (r)(s)

 

 

10,909,154

 

 

10,909,154

 









Total Short-Term Securities
(Cost — $10,909,154) — 2.7%

 

 

 

 

 

10,909,154

 









Total Investments (Cost — $690,256,243*) — 165.1%

 

 

 

 

 

666,827,435

 

Other Assets Less Liabilities — 1.4%

 

 

 

 

 

5,610,700

 

Liability for Trust Certificates, Including
Interest Expense and Fees Payable — (19.0)%

 

 

 

 

 

(76,607,433

)

Preferred Shares, at Redemption Value — (47.5)%

 

 

 

 

 

(192,034,629

)

 

 

 

 

 




Net Assets Applicable to Common Shares — 100.0%

 

 

 

 

$

403,796,073

 

 

 

 

 

 





 

 



*

The cost and unrealized appreciation (depreciation) of investments as of April 30, 2009, as computed for federal income tax purposes, were as follows:


 

 

 

 

 

Aggregate cost

 

$

613,911,222

 

 

 




Gross unrealized appreciation

 

$

13,815,767

 

Gross unrealized depreciation

 

 

(37,231,140

)

 

 




Net unrealized depreciation

 

$

(23,415,373

)

 

 





 

 

(a)

NPFGC Insured.

 

 

(b)

Assured Guaranty Insured.

 

 

(c)

AMBAC Insured.

 

 

(d)

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.

 

 

(e)

FSA Insured.

 

 

(f)

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

 

 

(g)

FGIC Insured.

 

 

(h)

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.

 

 

(i)

XL Capital Insured.

 

 

(j)

Radian Insured.

 

 

(k)

CIFG Insured.

 

 

(l)

BHAC Insured.

 

 

(m)

FNMA Collateralized.

 

 

(n)

FHLMC Collateralized.

 

 

(o)

GNMA Collateralized.

 

 

(p)

Security is collateralized by Municipal or U.S. Treasury Obligations.

 

 

(q)

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.

 

 

(r)

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


 

 

 

 

 

 

 

 









Affiliate

 

 

Net
Activity

 

Income

 








FFI Institutional Tax-Exempt Fund

 

 

(3,155,502)

 

$225,371

 










 

 

 

(s)

Represents the current yield as of report date.

 

 

Effective November 1,2008,the Fund adopted Financial Accounting Standards Board Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (“FAS 157”). FAS 157 clarifies the definition of fair value, establishes a framework for measuring fair values and requires additional disclosures about the use of 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 securities

 

 

 

 

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 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 circumstance, 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 methodology 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 April 30, 2009 in determining the fair valuation of the Fund’s investments:

 

 

 

 

 





Valuation Inputs

 

Investments in
Securities

 





 

 

Assets

 

 

 



Level 1

 

$

10,909,154

 

Level 2

 

 

655,918,281

 

Level 3

 

 

 






Total

 

$

666,827,435

 

 

 





 

 

 

See Notes to Financial Statements.

 


ANNUAL REPORT

APRIL 30, 2009

19



 

 



 

 

Schedule of Investments April 30, 2009

BlackRock MuniYield Quality Fund II, Inc. (MQT)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 









Alabama — 0.5%

 

 

 

 

 

 

 

Jefferson County, Alabama, Limited Obligation
School Warrants, Series A, 4.75%, 1/01/25

 

$

2,000

 

$

1,203,400

 









Arizona — 1.3%

 

 

 

 

 

 

 

Salt Verde Financial Corporation, Arizona, Senior
Gas Revenue Bonds, 5%, 12/01/37

 

 

5,000

 

 

3,368,700

 









California — 21.5%

 

 

 

 

 

 

 

Alameda Corridor Transportation Authority, California,
CABS, Subordinate Lien, Series A, 5.348%,
10/01/25 (a)(b)

 

 

7,150

 

 

5,225,578

 

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

 

 

550

 

 

546,651

 

Arcadia, California, Unified School District, GO
(Election of 2006), CABS, Series A, 4.961%,
8/01/39 (d)(e)

 

 

1,400

 

 

196,728

 

Cabrillo, California, Community College District,
GO (Election of 2004), Series B (c)(e):

 

 

 

 

 

 

 

5.188%, 8/01/37

 

 

2,100

 

 

340,410

 

4.870%, 8/01/38

 

 

4,800

 

 

728,112

 

California Health Facilities Financing Authority
Revenue Bonds (Kaiser Permanente), Series A,
5.50%, 6/01/22 (d)(f)

 

 

5,000

 

 

5,063,600

 

California State, GO, Refunding, 5.125%, 6/01/27

 

 

20

 

 

19,709

 

California State University, Systemwide Revenue
Bonds, Series A, 5%, 11/01/35 (c)(g)

 

 

1,200

 

 

1,150,704

 

Coast Community College District, California, CABS,
(Election of 2002), Series C, 5.448%,
8/01/13 (b)(d)

 

 

1,800

 

 

1,460,268

 

East Side Union High School District, California,
Santa Clara County, Capital Appreciation, GO
(Election of 2002), Series E, 5.151%,
8/01/29 (e)(h)

 

 

15,000

 

 

4,199,400

 

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

 

 

4,000

 

 

4,089,720

 

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

 

 

2,770

 

 

2,838,197

 

Fresno, California, Unified School District, GO
(Election of 2001), Series E, 5%, 8/01/30 (d)

 

 

800

 

 

792,704

 

John Swett Unified School District, California, GO,
Series A, 5.50%, 8/01/26 (d)

 

 

2,815

 

 

2,907,698

 

Los Angeles, California, Community College District,
GO, Refunding (Election of 2008), Series A,
6%, 8/01/33

 

 

1,700

 

 

1,816,620

 

Metropolitan Water District of Southern California,
Waterworks Revenue Bonds, Series B-1 (c)(g):

 

 

 

 

 

 

 

5%, 10/01/29

 

 

2,600

 

 

2,632,760

 

5%, 10/01/36

 

 

1,475

 

 

1,478,422

 

Monterey Peninsula Community College District,
California, GO, CABS, Series C, 5.081%,
8/01/28 (d)(e)

 

 

11,975

 

 

3,697,521

 

Orange County, California, Sanitation District, COP,
5%, 2/01/33 (c)(g)

 

 

2,300

 

 

2,277,736

 

Palm Springs, California, Financing Authority, Lease
Revenue Refunding Bonds (Convention Center
Project), Series A, 5.50%, 11/01/29 (c)

 

 

2,900

 

 

2,851,019

 


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 









California (concluded)

 

 

 

 

 

 

 

Port of Oakland, California, Revenue Bonds, AMT,
Series K, 5.75%, 11/01/29 (c)(g)

 

$

2,000

 

$

1,798,040

 

Poway, California, Redevelopment Agency, Tax
Allocation Refunding Bonds (Paguay
Redevelopment Project), 5.125%, 6/15/33 (a)

 

 

1,250

 

 

1,030,163

 

Sacramento, California, Municipal Utility District,
Electric Revenue Bonds, Series N, 5%, 8/15/28 (c)

 

 

4,400

 

 

4,340,732

 

Sacramento, California, Unified School District, GO
(Election of 2002), 5%, 7/01/30 (c)

 

 

1,600

 

 

1,579,312

 

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

 

 

350

 

 

353,287

 

Ventura County, California, Community College
District, GO (Election of 2002), Series B, 5%,
8/01/30 (c)

 

 

2,025

 

 

2,006,532

 

 

 

 

 

 




 

 

 

 

 

 

55,421,623

 









Colorado — 1.0%

 

 

 

 

 

 

 

Colorado Health Facilities Authority Revenue Bonds
(Covenant Retirement Communities Inc.),
Series A (i):

 

 

 

 

 

 

 

5.50%, 12/01/27

 

 

1,200

 

 

906,516

 

5.50%, 12/01/33

 

 

675

 

 

470,617

 

E-470 Public Highway Authority, Colorado,
CABS, Series B, 5.62%, 9/01/32 (c)(e)

 

 

7,500

 

 

1,087,875

 

 

 

 

 

 




 

 

 

 

 

 

2,465,008

 









District of Columbia — 0.4%

 

 

 

 

 

 

 

District of Columbia, Income Tax Revenue Bonds,
Series A, 5.50%, 12/01/30

 

 

850

 

 

900,345

 









Florida — 9.2%

 

 

 

 

 

 

 

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

 

 

1,400

 

 

1,369,886

 

Duval County, Florida, School Board, COP (Master
Lease Program), 5%, 7/01/33 (d)

 

 

2,000

 

 

1,890,000

 

Hillsborough County, Florida, Aviation Authority
Revenue Bonds, AMT, Series A, 5.375%,
10/01/33 (j)

 

 

3,250

 

 

3,030,527

 

Miami, Florida, Special Obligation Revenue Bonds
(Street and Sidewalk Improvement Program),
5%, 1/01/37 (c)

 

 

730

 

 

670,614

 

Miami-Dade County, Florida, Aviation Revenue
Refunding Bonds (Miami International Airport),
AMT, 5%, 10/01/40 (h)(j)

 

 

12,550

 

 

10,821,990

 

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

 

 

1,625

 

 

1,622,887

 

Orange County, Florida, Sales Tax Revenue Refunding
Bonds, Series B, 5.125%, 1/01/32 (c)(g)

 

 

1,575

 

 

1,516,646

 

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

 

 

2,850

 

 

2,867,043

 

 

 

 

 

 




 

 

 

 

 

 

23,789,593

 










 

 

 

See Notes to Financial Statements.

 




20

ANNUAL REPORT

APRIL 30, 2009



 

 



 

 

Schedule of Investments (continued)

BlackRock MuniYield Quality Fund II, Inc (MQT)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 







Georgia — 5.4%

 

 

 

 

 

 

 

Atlanta, Georgia, Airport Revenue Refunding Bonds,
Series A, 5.875%, 1/01/17 (c)(g)

 

$

5,000

 

$

5,115,200

 

Atlanta, Georgia, Water and Wastewater
Revenue Bonds:

 

 

 

 

 

 

 

5%, 11/01/34 (d)

 

 

2,100

 

 

2,076,123

 

Series A, 5%, 11/01/33 (c)

 

 

800

 

 

709,208

 

Series A, 5%, 11/01/39 (c)

 

 

4,610

 

 

4,002,817

 

Augusta, Georgia, Water and Sewer Revenue Bonds,
5.25%, 10/01/39 (d)

 

 

1,880

 

 

1,905,549

 

 

 

 

 

 




 

 

 

 

 

 

13,808,897

 









Illinois — 16.5%

 

 

 

 

 

 

 

Chicago, Illinois, O’Hare International Airport,
General Airport Revenue Bonds, Third Lien, AMT,
Series B-2:

 

 

 

 

 

 

 

5.75%, 1/01/23 (d)

 

 

5,200

 

 

5,275,920

 

6%, 1/01/29 (h)

 

 

2,200

 

 

2,155,054

 

Chicago, Illinois, O’Hare International Airport,
General Airport Revenue Refunding Bonds, Third
Lien, AMT, Series A, 5.50%, 1/01/22 (c)

 

 

9,400

 

 

9,132,194

 

Cook County, Illinois, Capital Improvement, GO,
Series C, 5.50%, 11/15/12 (a)(k)

 

 

2,460

 

 

2,808,680

 

Illinois Sports Facilities Authority, State Tax Supported
CABS, 5.391%, 6/15/30 (a)(b)

 

 

21,675

 

 

19,736,171

 

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

 

 

3,500

 

 

3,626,630

 

 

 

 

 

 




 

 

 

 

 

 

42,734,649

 









Indiana — 0.1%

 

 

 

 

 

 

 

Indiana Municipal Power Agency, Power Supply System
Revenue Bonds, Series B, 5.75%, 1/01/34

 

 

350

 

 

351,816

 









Kentucky — 0.8%

 

 

 

 

 

 

 

Kentucky State Property and Buildings Commission,
Revenue Refunding Bonds (Project Number 93),
5.25%, 2/01/29 (j)

 

 

2,000

 

 

2,061,420

 









Louisiana — 5.1%

 

 

 

 

 

 

 

East Baton Rouge, Louisiana, Sewage Commission
Revenue Refunding Bonds Series B,
5.25%, 2/01/39

 

 

200

 

 

194,326

 

Jefferson Parish, Louisiana, Home Mortgage Authority,
S/F Mortgage Revenue Bonds, AMT, Series B-1,
6.65%, 12/01/33 (c)(l)(m)

 

 

1,355

 

 

1,425,514

 

Louisiana Local Government Environmental Facilities
and Community Development Authority, Revenue
Bonds (Capital Projects and Equipment Acquisition
Program), Series A, 6.30%, 7/01/30 (a)

 

 

2,300

 

 

2,076,532

 

Louisiana Public Facilities Authority, Revenue
Refunding Bonds (CHRISTUS Health), Series B,
6.50%, 7/01/30 (j)

 

 

1,300

 

 

1,403,441

 

Louisiana State Gas and Fuels Tax Revenue Bonds,
Series A (d):

 

 

 

 

 

 

 

5%, 5/01/36

 

 

4,600

 

 

4,610,764

 

4.75%, 5/01/39

 

 

1,430

 

 

1,368,324

 

Louisiana State Transportation Authority, Senior Lien
Toll Revenue CABS, Series B, 5.31%,
12/01/27 (a)(e)

 

 

3,185

 

 

1,000,186

 

Rapides Financing Authority, Louisiana, Revenue Bonds
(Cleco Power LLC Project), AMT, 4.70%, 11/01/36 (a)

 

 

1,750

 

 

1,178,415

 

 

 

 

 

 




 

 

 

 

 

 

13,257,502

 










 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 









Maryland — 0.4%

 

 

 

 

 

 

 

Maryland State Community Development
Administration, Department of Housing and
Community Development, Residential Revenue
Refunding Bonds, AMT, Series A, 5.75%, 9/01/39

 

$

1,130

 

$

1,137,707

 









Massachusetts — 9.1%

 

 

 

 

 

 

 

Massachusetts State, HFA, Rental Housing Mortgage
Revenue Bonds, AMT, Series F, 5.25%, 1/01/46 (d)

 

 

20,000

 

 

18,194,600

 

Massachusetts State, HFA, S/F Housing Revenue
Bonds, AMT, Series 128, 4.80%, 12/01/27 (d)

 

 

1,500

 

 

1,365,960

 

Massachusetts State Port Authority, Special Facilities
Revenue Bonds (Delta Air Lines Inc. Project), AMT,
Series A (a):

 

 

 

 

 

 

 

5.50%, 1/01/16

 

 

2,900

 

 

2,262,522

 

5.50%, 1/01/19

 

 

2,570

 

 

1,617,635

 

 

 

 

 

 




 

 

 

 

 

 

23,440,717

 









Michigan — 4.0%

 

 

 

 

 

 

 

Detroit, Michigan, Sewage Disposal System, Second
Lien Revenue Bonds, Series B, 5%, 7/01/36 (c)(g)

 

 

3,000

 

 

2,509,050

 

Detroit, Michigan, Sewage Disposal System, Second
Lien Revenue Refunding Bonds, Series E, 5.75%,
7/01/31 (g)(n)

 

 

2,200

 

 

2,254,934

 

Detroit, Michigan, Water Supply System Revenue
Bonds, Second Lien, Series B (d):

 

 

 

 

 

 

 

6.25%, 7/01/36

 

 

350

 

 

365,218

 

7%, 7/01/36

 

 

200

 

 

220,974

 

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

 

 

1,000

 

 

855,030

 

Michigan State Strategic Fund, Limited Obligation
Revenue Refunding Bonds (Detroit Edison
Company Pollution Control Project), AMT (h):

 

 

 

 

 

 

 

Series A, 5.50%, 6/01/30

 

 

1,000

 

 

870,530

 

Series C, 5.45%, 12/15/32

 

 

3,900

 

 

3,309,150

 

 

 

 

 

 




 

 

 

 

 

 

10,384,886

 









Minnesota — 1.3%

 

 

 

 

 

 

 

Dakota County, Minnesota, Community Development
Agency, S/F Mortgage Revenue Bonds (Mortgage-
Backed Securities Program), Series B, 5.15%,
12/01/38 (l)(m)(o)

 

 

111

 

 

110,643

 

Minneapolis, Minnesota, Health Care System,
Revenue Refunding Bonds (Fairview Health
Services), Series B, 6.50%, 11/15/38 (j)

 

 

2,900

 

 

3,144,354

 

 

 

 

 

 




 

 

 

 

 

 

3,254,997

 

Missouri — 2.2%

 

 

 

 

 

 

 

Saint Louis County, Missouri, Pattonville R-3 School
District, GO (Missouri Direct Deposit Program) (g)(k):

 

 

 

 

 

 

 

5.75%, 3/01/10

 

 

4,000

 

 

4,214,240

 

6%, 3/01/10

 

 

1,500

 

 

1,583,460

 

 

 

 

 

 




 

 

 

 

 

 

5,797,700

 










 

 

 

See Notes to Financial Statements.

 


ANNUAL REPORT

APRIL 30, 2009

21



 

 



 

 

Schedule of Investments (continued)

BlackRock MuniYield Quality Fund II, Inc. (MQT)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

 

Par
(000)

 

 

Value

 









Nevada — 4.8%

 

 

 

 

 

 

 

Carson City, Nevada, Hospital Revenue Bonds
(Carson-Tahoe Hospital Project), Series A, 5.50%,
9/01/33 (i)

 

$

2,800

 

$

2,019,528

 

Clark County, Nevada, Airport System Subordinate Lien
Revenue Bonds, Series A-2 (c)(g):

 

 

 

 

 

 

 

5%, 7/01/30

 

 

1,500

 

 

1,417,515

 

5%, 7/01/36

 

 

2,700

 

 

2,489,130

 

Clark County, Nevada, IDR (Southwest Gas
Corporation Project), AMT, Series A, 4.75%,
9/01/36 (g)

 

 

40

 

 

26,286

 

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

 

 

1,575

 

 

1,669,437

 

Las Vegas, Nevada, Limited Tax, GO (Performing Arts
Center), 6%, 4/01/39

 

 

3,300

 

 

3,399,990

 

Las Vegas Valley Water District, Nevada, GO,
Refunding, Series A, 5%, 6/01/24 (c)(g)

 

 

1,350

 

 

1,364,053

 

 

 

 

 

 




 

 

 

 

 

 

12,385,939

 









New Jersey — 6.4%

 

 

 

 

 

 

 

New Jersey EDA, Cigarette Tax Revenue Bonds (i):

 

 

 

 

 

 

 

5.75%, 6/15/29

 

 

870

 

 

642,469

 

5.50%, 6/15/31

 

 

400

 

 

279,952

 

New Jersey EDA, Motor Vehicle Surcharge Revenue
Bonds, Series A, 5.25%, 7/01/33 (c)

 

 

8,200

 

 

8,177,122

 

New Jersey EDA, School Facilities Construction
Revenue Bonds:

 

 

 

 

 

 

 

Series O, 5.125%, 3/01/28

 

 

3,380

 

 

3,428,233

 

Series P, 5.125%, 9/01/28

 

 

4,000

 

 

4,054,760

 

 

 

 

 

 




 

 

 

 

 

 

16,582,536

 









New Mexico — 2.6%

 

 

 

 

 

 

 

New Mexico State Highway Commission, Tax
Revenue Bonds, Senior Sub-Lien, Series A, 6%,
6/15/2010 (d)(k)

 

 

6,295

 

 

6,674,211

 









New York — 5.6%

 

 

 

 

 

 

 

Metropolitan Transportation Authority, New York,
Transportation Revenue Bonds, Series A, 5%,
11/15/32 (c)(g)

 

 

1,800

 

 

1,739,538

 

New York City, New York, City Municipal Water Finance
Authority, Water and Sewer System Revenue Bonds,
Series A, 5.75%, 6/15/40

 

 

1,050

 

 

1,127,353

 

New York State Dormitory Authority, Revenue
Refunding Bonds (State University Educational
Facilities), 5.75%, 5/15/10 (g)(k)

 

 

5,000

 

 

5,321,850

 

Tobacco Settlement Financing Corporation of New
York Revenue Bonds, Series A-1, 5.25%,
6/01/22 (a)

 

 

6,115

 

 

6,175,294

 

 

 

 

 

 



 

 

 

 

 

 

 

14,364,035

 










 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 









Ohio — 2.7%

 

 

 

 

 

 

 

Plain, Ohio, Local School District, GO, Refunding (g):

 

 

 

 

 

 

 

6%, 6/01/11 (k)

 

$

5,120

 

$

5,642,240

 

6%, 12/01/20 (c)

 

 

1,170

 

 

1,244,833

 

 

 

 

 

 




 

 

 

 

 

 

6,887,073

 









Pennsylvania — 1.0%

 

 

 

 

 

 

 

Delaware River Port Authority of Pennsylvania and
New Jersey Revenue Bonds, 6%, 1/01/17 (d)

 

 

5

 

 

5,143

 

Pennsylvania HFA, S/F Mortgage Revenue Refunding
Bonds, AMT, Series 99A, 5.25%, 10/01/32

 

 

1,340

 

 

1,260,860

 

Philadelphia, Pennsylvania, School District, GO,
Series E, 6%, 9/01/38

 

 

1,300

 

 

1,374,074

 

 

 

 

 

 




 

 

 

 

 

 

2,640,077

 









Puerto Rico — 0.6%

 

 

 

 

 

 

 

Puerto Rico Electric Power Authority, Power Revenue
Refunding Bonds, Series VV, 5.25%, 7/01/30 (c)(g)

 

 

1,600

 

 

1,486,016

 









South Carolina — 4.1%

 

 

 

 

 

 

 

Berkeley County, South Carolina, School District,
Installment Lease Revenue Bonds (Securing Assets
for Education Project), 5.125%, 12/01/30

 

 

2,450

 

 

2,407,493

 

Kershaw County, South Carolina, Public Schools
Foundation, Installment Power Revenue Refunding
Bonds, 5%, 12/01/29 (p)

 

 

1,875

 

 

1,830,169

 

Scago Educational Facilities Corporation for Pickens
County School District, South Carolina, Revenue
Bonds, 5%, 12/01/31 (d)

 

 

3,000

 

 

2,897,460

 

South Carolina State Public Service Authority,
Revenue Refunding Bonds, Series A, 5.50%,
1/01/38

 

 

1,125

 

 

1,180,834

 

South Carolina Transportation Infrastructure Bank
Revenue Bonds, Series A, 5%, 10/01/33 (a)

 

 

2,250

 

 

2,237,355

 

 

 

 

 

 




 

 

 

 

 

 

10,553,311

 









Tennessee — 1.6%

 

 

 

 

 

 

 

Tennessee Energy Acquisition Corporation, Gas
Revenue Bonds:

 

 

 

 

 

 

 

Series A, 5.25%, 9/01/26

 

 

3,920

 

 

3,167,086

 

Series C, 5%, 2/01/27

 

 

1,400

 

 

1,083,432

 

 

 

 

 

 




 

 

 

 

 

 

4,250,518

 









Texas — 13.6%

 

 

 

 

 

 

 

Corpus Christi, Texas, Utility System Revenue
Refunding Bonds, Series A, 6%, 7/15/10 (d)(k)

 

 

2,000

 

 

2,129,720

 

Dallas-Fort Worth, Texas, International Airport
Revenue Bonds, AMT, Series A, 5.50%,
11/01/33 (c)

 

 

5,000

 

 

4,742,550

 

Dallas-Fort Worth, Texas, International Airport, Joint
Revenue Bonds, AMT, Series B, 6%, 11/01/23 (c)

 

 

600

 

 

601,056

 

Lewisville, Texas, Independent School District, Capital
Appreciation and School Building, GO, Refunding,
4.671%, 8/15/24 (c)(e)(g)

 

 

3,915

 

 

1,720,173

 

Lone Star College System, Texas, GO, 5%, 8/15/33

 

 

3,000

 

 

3,006,420

 

Mansfield, Texas, Independent School District, GO,
5%, 2/15/33

 

 

1,065

 

 

1,085,565

 

Matagorda County, Texas, Navigation District
Number 1, PCR, Refunding (Central Power and
Light Company Project), AMT, 5.20%, 5/01/30 (c)

 

 

1,800

 

 

1,408,302

 

North Harris County, Texas, Regional Water Authority,
Senior Lien Revenue Bonds, 5.125%, 12/15/35 (c)

 

 

4,825

 

 

4,711,661

 


 

 

 

See Notes to Financial Statements.

 




22

ANNUAL REPORT

APRIL 30, 2009



 

 


 

 

Schedule of Investments (continued)

BlackRock MuniYield Quality Fund II, Inc. (MQT)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 







Texas (concluded)

 

 

 

 

 

 

 

North Texas Tollway Authority, System Revenue
Refunding Bonds, First Tier:

 

 

 

 

 

 

 

5.75%, 1/01/40 (c)

 

$

3,600

 

$

3,611,844

 

Series A, 6%, 1/01/25

 

 

525

 

 

551,723

 

Series K-1, 5.75%, 1/01/38 (j)

 

 

3,400

 

 

3,553,578

 

Texas State Turnpike Authority, Central Texas Turnpike
System Revenue Bonds, First Tier, Series A (a):

 

 

 

 

 

 

 

5.75%, 8/15/38

 

 

4,800

 

 

4,745,904

 

5.50%, 8/15/39

 

 

3,500

 

 

3,342,045

 

 

 

 

 

 




 

 

 

 

 

 

35,210,541

 









Vermont — 1.9%

 

 

 

 

 

 

 

Vermont HFA, Revenue Refunding Bonds, AMT,
Series C, 5.50%, 11/01/38 (d)

 

 

2,670

 

 

2,579,380

 

Vermont HFA, S/F Housing Revenue Bonds, AMT,
Series 27, 4.85%, 11/01/32 (d)

 

 

2,670

 

 

2,350,161

 

 

 

 

 

 




 

 

 

 

 

 

4,929,541

 









Virginia — 0.1%

 

 

 

 

 

 

 

Fairfax County, Virginia, IDA, Health Care Revenue
Refunding Bonds (Inova Health System Project),
Series A, 5.50%, 5/15/35

 

 

300

 

 

303,453

 









Washington — 4.1%

 

 

 

 

 

 

 

Port of Seattle, Washington, Revenue Bonds, AMT,
Series B, 6%, 2/01/16 (c)

 

 

7,470

 

 

7,583,544

 

Port of Tacoma, Washington, GO, AMT, Series B,
4.875%, 12/01/38 (j)

 

 

1,375

 

 

1,161,628

 

Port of Tacoma, Washington, Revenue Refunding
Bonds, Series A, 5.25%, 12/01/14 (a)(k)

 

 

1,600

 

 

1,871,760

 

 

 

 

 

 




 

 

 

 

 

 

10,616,932

 









Total Municipal Bonds — 127.9%

 

 

 

 

 

330,263,143

 










 

 

 

 

 

 

 

 


Municipal Bonds Transferred to
Tender Option Bond Trusts (q)

 

 

 

 

 

 

 









California — 3.1%

 

 

 

 

 

 

 

Anaheim, California, Public Financing Authority,
Electric System Distribution Facilities Revenue
Bonds, Series A, 5%, 10/01/31 (d)

 

 

3,808

 

 

3,747,319

 

San Diego County, California, Water Authority, Water
Revenue Refunding Bonds, COP, Series A, 5%,
5/01/33 (d)

 

 

3,030

 

 

2,980,096

 

Tamalpais, California, Union High School District, GO
(Election of 2001), 5%, 8/01/28 (d)

 

 

1,320

 

 

1,289,732

 

 

 

 

 

 




 

 

 

 

 

 

8,017,147

 










 

 

 

 

 

 

 

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (q)

 

Par
(000)

 

Value

 









District of Columbia — 0.7%

 

 

 

 

 

 

 

District of Columbia, Water and Sewer Authority, Public
Utility Revenue Refunding Bonds, 6%, 10/01/35

 

$

1,580

 

$

1,705,110

 









Georgia — 7.7%

 

 

 

 

 

 

 

Atlanta, Georgia, Airport General Revenue Refunding
Bonds, Series B, 5.25%, 1/01/33 (d)

 

 

4,999

 

 

5,032,230

 

Atlanta, Georgia, Airport Passenger Facility Charge
and Subordinate Lien General Revenue Refunding
Bonds, Series C, 5%, 1/01/33 (d)

 

 

15,000

 

 

14,855,100

 

 

 

 

 

 




 

 

 

 

 

 

19,887,330

 









Illinois — 10.0%

 

 

 

 

 

 

 

Chicago, Illinois, Water Revenue Refunding Bonds,
Second Lien, 5.25%, 11/01/33 (d)

 

 

2,549

 

 

2,577,692

 

Metropolitan Pier and Exposition Authority, Illinois,
Dedicated State Tax Revenue Bonds (McCormick
Place Expansion), Series A, 5%, 12/15/28 (c)

 

 

3,500

 

 

3,517,920

 

Metropolitan Pier and Exposition Authority, Illinois,
Dedicated State Tax Revenue Refunding Bonds
(McCormick Place Expansion Project), Series B,
5.75%, 6/15/23 (c)

 

 

7,250

 

 

7,633,960

 

Illinois Regional Transportation Authority Revenue
Bonds, 6.50%, 7/01/26 (c)

 

 

10,000

 

 

12,064,630

 

 

 

 

 

 




 

 

 

 

 

 

25,794,202

 









Massachusetts — 2.8%

 

 

 

 

 

 

 

Massachusetts State School Building Authority,
Dedicated Sales Tax Revenue Bonds, Series A,
5%, 8/15/30 (d)

 

 

7,195

 

 

7,330,201

 









New Jersey — 2.4%

 

 

 

 

 

 

 

New Jersey EDA, Cigarette Tax Revenue Bonds (j)

 

 

 

 

 

 

 

5.50%, 6/15/24

 

 

4,600

 

 

4,528,672

 

5.50%, 6/15/31

 

 

1,600

 

 

1,575,190

 

 

 

 

 

 




 

 

 

 

 

 

6,103,862

 









New York — 0.4%

 

 

 

 

 

 

 

New York State Dormitory Authority, State Personal
Income Tax Revenue Bonds (Education), Series B,
5.75%, 3/15/36

 

 

1,005

 

 

1,085,068

 









South Carolina — 2.3%

 

 

 

 

 

 

 

Charleston Educational Excellence Financing
Corporation, South Carolina, Revenue Bonds
(Charleston County School District) (j):

 

 

 

 

 

 

 

5.25%, 12/01/28

 

 

2,725

 

 

2,745,982

 

5.25%, 12/01/29

 

 

2,425

 

 

2,431,572

 

5.25%, 12/01/30

 

 

880

 

 

876,577

 

 

 

 

 

 




 

 

 

 

 

 

6,054,131

 










 

 

 

See Notes to Financial Statements.

 




ANNUAL REPORT

APRIL 30, 2009

23



 

 


 

Schedule of Investments (concluded)

BlackRock MuniYield Quality Fund II, Inc. (MQT)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (q)

 

Par
(000)

 

Value

 







Texas — 2.8%

 

 

 

 

 

 

 

Clear Creek, Texas, Independent School District, GO,
Refunding, 5%, 2/15/33

 

$

1,900

 

$

1,955,033

 

Cypress-Fairbanks, Texas, Independent School
District, GO, 5%, 02/15/32

 

 

5,250

 

 

5,358,255

 

 

 

 

 

 




 

 

 

 

 

 

7,313,288

 









Virginia — 0.8%

 

 

 

 

 

 

 

Virginia State, HDA, Commonwealth Mortgage
Revenue Bonds, Series H, Sub-Series H-1,
5.35%, 7/01/31 (c)

 

 

1,995

 

 

2,005,374

 









Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 33.0%

 

 

 

 

 

85,295,713

 









Total Long-Term Investments
(Cost — $435,103,355) — 160.9%

 

 

 

 

 

415,558,856

 










 

 

 

 

 

 

 

 









Short-Term Securities

 

 

 

 

 

 

 









Oklahoma — 1.1%

 

 

 

 

 

 

 

Oklahoma State Development Finance Authority,
Revenue Refunding Bonds (Integris Health Obligated
Group), VRDN, Series A3, 0.60%, 5/07/09 (j)(r)

 

 

2,800

 

 

2,800,000

 









Pennsylvania — 1.9%

 

 

 

 

 

 

 

Philadelphia, Pennsylvania, GO, Refunding, VRDN,
Series B, 3.50%, 5/07/09 (d)(r)

 

 

5,000

 

 

5,000,000

 










 

 

 

 

 

 

 

 

 

 

Shares

 

 

 

 









Money Market Fund — 0.4%

 

 

 

 

 

 

 

FFI Institutional Tax-Exempt Fund, 0.72% (s)(t)

 

 

900,863

 

 

900,863

 









Total Short-Term Securities
(Cost — $8,700,863) — 3.4%

 

 

 

 

 

8,700,863

 









Total Investments (Cost — $443,804,218*) — 164.3%

 

 

 

 

 

424,259,719

 

Other Assets Less Liabilities — 2.7%

 

 

 

 

 

7,031,491

 

Liability for Trust Certificates, Including
Interest Expense and Fees Payable — (17.3)%

 

 

 

 

 

(44,751,004

)

Preferred Shares, at Redemption Value — (49.7)%

 

 

 

 

 

(128,277,658

)

 

 

 

 

 




Net Assets Applicable to Common Shares — 100.0%

 

 

 

 

$

258,262,548

 

 

 

 

 

 





 

 


*

The cost and unrealized appreciation (depreciation) of investments as of April 30, 2009, as computed for federal income tax purposes, were as follows:


 

 

 

 

 

Aggregate cost

 

$

400,352,506

 

 

 




Gross unrealized appreciation

 

$

11,536,370

 

Gross unrealized depreciation

 

 

(32,185,207

)

 

 




Net unrealized depreciation

 

$

(20,648,837

)

 

 





 

 

(a)

AMBAC Insured.

 

 

(b)

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.

 

 

(c)

NPFGC Insured.

 

 

(d)

FSA Insured.

 

 

(e)

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

 

 

(f)

Security is collateralized by Municipal or US Treasury Obligations.

 

 

(g)

FGIC Insured.

 

 

(h)

XL Capital Insured.

 

 

(i)

Radian Insured.

 

 

(j)

Assured Guaranty Insured.

 

 

(k)

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.

 

 

(l)

GNMA Collateralized.

 

 

(m)

FNMA Collateralized.

 

 

(n)

BHAC Insured.

 

 

(o)

FHLMC Collateralized.

 

 

(p)

CIFG Insured.

 

 

(q)

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.

 

 

(r)

Security may have a maturity of more than one year at the time of issuance, but has variable rate and demand features that qualify it as a short-term security. Rate shown is as of report date and maturity shown is the date the principal owed can be recovered through demand.

 

 

(s)

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


 

 

 

 

 

 

 

 







Affiliate

 

Net
Activity

 

Income

 







FFI Institutional Tax-Exempt Fund

 

 

(6,070,187

)

$

156,296

 










 

 

 

(t)

Represents the current yield as of report date.

 

 

Effective November 1,2008,the Fund adopted Financial Accounting Standards Board Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (“FAS 157”). FAS 157 clarifies the definition of fair value, establishes a framework for measuring fair values and requires additional disclosures about the use of 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 securities

 

 

 

 

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 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 circumstance, 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 methodology 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 April 30, 2009 in determining the fair valuation of the Fund’s investments:


 

 

 

 

 





Valuation Inputs

 

Investments in
Securities

 





 

 

Assets

 

 

 



Level 1

 

$

900,863

 

Level 2

 

 

423,358,856

 

Level 3

 

 

 






Total

 

$

424,259,719

 

 

 





 

 

 

See Notes to Financial Statements.

 


24

ANNUAL REPORT

APRIL 30, 2009



 


 

Statements of Assets and Liabilities


 

 

 

 

 

 

 

 

 

 

 

April 30, 2009

 

BlackRock
MuniYield
Fund, Inc.
(MYD)

 

BlackRock
MuniYield
Quality
Fund, Inc.
(MQY)

 

BlackRock
MuniYield
Quality
Fund II, Inc.
(MQT)

 












Assets

 

 

 

 

 

 

 

 

 

 












Investments at value — unaffiliated1

 

$

849,732,581

 

$

655,918,281

 

$

423,358,856

 

Investments at value — affiliated2

 

 

2,105,032

 

 

10,909,154

 

 

900,863

 

Cash

 

 

4,839,185

 

 

72,347

 

 

43,607

 

Investments sold receivable

 

 

5,332,505

 

 

2,941,909

 

 

3,846,136

 

Interest receivable

 

 

15,384,596

 

 

10,103,410

 

 

6,577,689

 

Income receivable — affiliated

 

 

296

 

 

173

 

 

 

Prepaid expenses

 

 

61,769

 

 

45,580

 

 

31,813

 

Other assets

 

 

39,248

 

 

28,576

 

 

 

 

 










Total assets

 

 

877,495,212

 

 

680,019,430

 

 

434,758,964

 

 

 










 

 

 

 

 

 

 

 

 

 

 












Accrued Liabilities

 

 

 

 

 

 

 

 

 

 












Investments purchased payable

 

 

8,597,526

 

 

5,408,673

 

 

2,079,619

 

Income dividends payable — Common Shares

 

 

2,905,083

 

 

1,734,240

 

 

1,118,347

 

Investment advisory fees payable

 

 

348,163

 

 

270,856

 

 

175,364

 

Interest expense and fees payable

 

 

176,039

 

 

275,847

 

 

194,954

 

Officer’s and Directors’ fees payable

 

 

40,908

 

 

29,817

 

 

652

 

Other affiliates payable

 

 

4,876

 

 

4,052

 

 

2,344

 

Other accrued expenses payable

 

 

148,560

 

 

133,657

 

 

91,428

 

 

 










Total accrued liabilities

 

 

12,221,155

 

 

7,857,142

 

 

3,662,708

 

 

 










 

 

 

 

 

 

 

 

 

 

 












Other Liabilities

 

 

 

 

 

 

 

 

 

 












Trust certificates3

 

 

70,137,076

 

 

76,331,586

 

 

44,556,050

 

 

 










Total Liabilities

 

 

82,358,231

 

 

84,188,728

 

 

48,218,758

 

 

 










 

 

 

 

 

 

 

 

 

 

 












Preferred Shares at Redemption Value

 

 

 

 

 

 

 

 

 

 












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

 

 

271,547,261

 

 

192,034,629

 

 

128,277,658

 

 

 










Net Assets Applicable to Common Shareholders

 

$

523,589,720

 

$

403,796,073

 

$

258,262,548

 

 

 










 

 

 

 

 

 

 

 

 

 

 












Net Assets Applicable to Common Shareholders Consist of

 

 

 

 

 

 

 

 

 

 












Paid-in capital

 

$

622,897,949

 

$

426,282,532

 

$

287,766,740

 

Undistributed net investment income

 

 

4,628,987

 

 

3,770,892

 

 

2,756,513

 

Accumulated net realized loss

 

 

(15,761,635

)

 

(2,828,543

)

 

(12,716,206

)

Net unrealized appreciation/depreciation

 

 

(88,175,581

)

 

(23,428,808

)

 

(19,544,499

)

 

 










Net Assets Applicable to Common Shareholders

 

$

523,589,720

 

$

403,796,073

 

$

258,262,548

 

 

 










Net asset value per Common Share5

 

$

11.53

 

$

13.27

 

$

11.55

 

 

 










1 Investments at cost — unaffiliated

 

$

937,908,162

 

$

679,347,089

 

$

442,903,355

 

 

 










2 Investments at cost — affiliated

 

$

2,105,032

 

$

10,909,154

 

$

900,863

 

 

 










3 Represents short-term floating rate certificates issued by tender option bond trusts.

 

 

 

 

 

 

 

 

 

 

4 Preferred Shares outstanding:

 

 

 

 

 

 

 

 

 

 

Par value $0.05 per share

 

 

10,860

 

 

7,680

 

 

4,809

 

 

 










Par value $0.10 per share

 

 

 

 

 

321

 

 

 










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

 

 

45,391,929

 

 

30,425,258

 

 

22,366,930

 

 

 











 

 

 

See Notes to Financial Statements.

 

 




ANNUAL REPORT

APRIL 30, 2009

25



 


 

Statements of Operations


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BlackRock MuniYield
Fund, Inc. (MYD)

 

BlackRock MuniYield
Quality Fund, Inc. (MQY)

 

BlackRock MuniYield
Quality Fund II, Inc. (MQT)

 

 

 


 


 


 

 

 

Period
November 1,
2008 to
April 30,
2009

 

Year Ended
October 31,
2008

 

Period
November 1,
2008 to
April 30,
2009

 

Year Ended
October 31,
2008

 

Period
November 1,
2008 to
April 30,
2009

 

Year Ended
October 31,
2008

 





















Investment Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Interest

 

$

24,935,459

 

$

54,499,895

 

$

16,263,005

 

$

36,606,404

 

$

10,770,968

 

$

24,016,074

 

Income — affiliated

 

 

238,927

 

 

323,839

 

 

227,061

 

 

316,424

 

 

156,296

 

 

258,553

 

 

 



















Total income

 

 

25,174,386

 

 

54,823,734

 

 

16,490,066

 

 

36,922,828

 

 

10,927,264

 

 

24,274,627

 

 

 



















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Investment advisory

 

 

2,022,266

 

 

4,800,850

 

 

1,565,972

 

 

3,500,327

 

 

1,010,781

 

 

2,270,129

 

Commissions for Preferred Shares

 

 

241,593

 

 

801,863

 

 

170,127

 

 

583,072

 

 

117,605

 

 

376,946

 

Accounting services

 

 

110,656

 

 

260,941

 

 

93,183

 

 

177,895

 

 

51,706

 

 

138,062

 

Professional

 

 

86,635

 

 

230,923

 

 

85,813

 

 

181,662

 

 

75,534

 

 

136,702

 

Officer and Directors

 

 

36,255

 

 

56,554

 

 

26,634

 

 

39,896

 

 

17,081

 

 

29,273

 

Transfer agent

 

 

36,051

 

 

57,599

 

 

31,960

 

 

69,148

 

 

24,882

 

 

42,019

 

Printing

 

 

23,633

 

 

39,129

 

 

20,676

 

 

23,300

 

 

13,341

 

 

17,138

 

Custodian

 

 

13,528

 

 

45,960

 

 

15,330

 

 

36,504

 

 

9,698

 

 

26,139

 

Registration

 

 

5,398

 

 

15,516

 

 

3,458

 

 

9,973

 

 

3,055

 

 

8,811

 

Miscellaneous

 

 

64,165

 

 

130,054

 

 

66,441

 

 

112,688

 

 

53,262

 

 

84,629

 

 

 



















Total expenses excluding interest expense and fees

 

 

2,640,180

 

 

6,439,389

 

 

2,079,594

 

 

4,734,465

 

 

1,376,945

 

 

3,129,848

 

Interest expense and fees1

 

 

364,108

 

 

1,955,374

 

 

540,912

 

 

2,769,072

 

 

397,825

 

 

1,867,535

 

 

 



















Total expenses

 

 

3,004,288

 

 

8,394,763

 

 

2,620,506

 

 

7,503,537

 

 

1,774,770

 

 

4,997,383

 

Less fees waived by advisor

 

 

(15,095

)

 

(27,274

)

 

(17,403

)

 

(26,832

)

 

(5,296

)

 

(20,677

)

Less fees paid indirectly

 

 

 

 

 

 

 

 

(321

)

 

 

 

 

 

 



















Total expenses after fees waived and paid indirectly

 

 

2,989,193

 

 

8,367,489

 

 

2,603,103

 

 

7,476,384

 

 

1,769,474

 

 

4,976,706

 

 

 



















Net investment income

 

 

22,185,193

 

 

46,456,245

 

 

13,886,963

 

 

29,446,444

 

 

9,157,790

 

 

19,297,921

 

 

 



















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Realized and Unrealized Gain (Loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Realized gain (loss) from:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments

 

 

(3,920,385

)

 

(2,918,788

)

 

(794,982

)

 

(728,016

)

 

(3,531,158

)

 

230,594

 

Futures and forward interest rate swaps

 

 

 

 

(3,382,607

)

 

 

 

(581,500

)

 

(716,133

)

 

(1,388,073

)

 

 



















 

 

 

(3,920,385

)

 

(6,301,395

)

 

(794,982

)

 

(1,309,516

)

 

(4,247,291

)

 

(1,157,479

)

 

 



















Net change in unrealized appreciation/depreciation on:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments

 

 

38,914,225

 

 

(157,567,039

)

 

46,913,056

 

 

(93,034,192

)

 

33,389,485

 

 

(66,011,447

)

Futures and forward interest rate swaps

 

 

 

 

 

 

 

 

(59,400

)

 

(82,940

)

 

(48,875

)

 

 



















 

 

 

38,914,225

 

 

(157,567,039

)

 

46,913,056

 

 

(93,093,592

)

 

33,306,545

 

 

(66,060,322

)

 

 



















Total realized and unrealized gain (loss)

 

 

34,993,840

 

 

(163,868,434

)

 

46,118,074

 

 

(94,403,108

)

 

29,059,254

 

 

(67,217,801

)

 

 



















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Dividends and Distributions to Preferred Shareholders From

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Net investment income

 

 

(1,788,996

)

 

(12,071,923

)

 

(1,262,709

)

 

(8,220,460

)

 

(795,547

)

 

(5,769,792

)

Net realized gain

 

 

 

 

 

 

 

 

(984,160

)

 

 

 

 

 

 



















Total dividends and distributions to Preferred Shareholders

 

 

(1,788,996

)

 

(12,071,923

)

 

(1,262,709

)

 

(9,204,620

)

 

(795,547

)

 

(5,769,792

)

 

 



















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

 

$

55,390,037

 

$

(129,484,112

)

$

58,742,328

 

$

(74,161,284

)

$

37,421,497

 

$

(53,689,672

)

 

 




















 

 

 

 

1

Related to tender option bond trusts.


 

 

 

See Notes to Financial Statements.

 




26

ANNUAL REPORT

APRIL 30, 2009



 

 



 

 

Statements of Changes in Net Assets

BlackRock MuniYield Fund, Inc. (MYD)


 

 

 

 

 

 

 

 

 

 

 

 

 

Period
November 1,
2008 to
April 30,
2009

 

 

 

 

 

 

 

 

 

 

Year Ended
October 31,

 

 

 

 







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

 

 

2008

 

2007

 












Operations

 

 

 

 

 

 

 

 

 

 












Net investment income

 

$

22,185,193

 

$

46,456,245

 

$

47,245,298

 

Net realized gain (loss)

 

 

(3,920,385

)

 

(6,301,395

)

 

7,332,422

 

Net change in unrealized appreciation/depreciation

 

 

38,914,225

 

 

(157,567,039

)

 

(33,393,239

)

Dividends to Preferred Shareholders from net investment income

 

 

(1,788,996

)

 

(12,071,923

)

 

(12,440,786

)

 

 










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

 

 

55,390,037

 

 

(129,484,112

)

 

8,743,695

 

 

 





















Dividends to Common Shareholders From

 

 

 

 

 

 

 

 

 

 












Net investment income

 

 

(17,560,799

)

 

(36,001,360

)

 

(37,039,818

)

 

 





















Capital Share Transactions

 

 

 

 

 

 

 

 

 

 












Reinvestment of common dividends

 

 

815,938

 

 

2,855,713

 

 

3,503,564

 

 

 





















Net Assets Applicable to Common Shareholders

 

 

 

 

 

 

 

 

 

 












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

 

 

38,645,176

 

 

(162,629,759

)

 

(24,792,559

)

Beginning of period

 

 

484,944,544

 

 

647,574,303

 

 

672,366,862

 

 

 










End of period

 

$

523,589,720

 

$

484,944,544

 

$

647,574,303

 

 

 










End of period undistributed net investment income

 

$

4,628,987

 

$

1,916,633

 

$

3,865,248

 

 

 










BlackRock MuniYield Quality Fund, Inc. (MQY)

 

 

 

 

 

 

 

 

 

 

 

 

 

Period
November 1,
2008 to
April 30,
2009

 

 

 

 

 

 

 

 

Year Ended
October 31,

 

 

 





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

 

 

2008

 

2007

 












Operations

 

 

 

 

 

 

 

 

 

 












Net investment income

 

$

13,886,963

 

$

29,446,444

 

$

29,581,364

 

Net realized gain (loss)

 

 

(794,982

)

 

(1,309,516

)

 

3,782,218

 

Net change in unrealized appreciation/depreciation

 

 

46,913,056

 

 

(93,093,592

)

 

(16,584,007

)

Dividends and distributions to Preferred Shareholders from:

 

 

 

 

 

 

 

 

 

 

Net investment income

 

 

(1,262,709

)

 

(8,220,460

)

 

(9,191,938

)

Net realized gain

 

 

 

 

(984,160

)

 

 

 

 










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

 

 

58,742,328

 

 

(74,161,284

)

 

7,587,637

 

 

 





















Dividends and Distributions to Common Shareholders From

 

 

 

 

 

 

 

 

 

 












Net investment income

 

 

(10,405,438

)

 

(20,810,877

)

 

(20,932,577

)

Net realized gain

 

 

 

 

(2,225,942

)

 

 

 

 










Decrease in net assets resulting from dividends and distributions to Common Shareholders

 

 

(10,405,438

)

 

(23,036,819

)

 

(20,932,577

)

 

 





















Net Assets Applicable to Common Shareholders

 

 

 

 

 

 

 

 

 

 












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

 

 

48,336,890

 

 

(97,198,103

)

 

(13,344,940

)

Beginning of period

 

 

355,459,183

 

 

452,657,286

 

 

466,002,226

 

 

 










End of period

 

$

403,796,073

 

$

355,459,183

 

$

452,657,286

 

 

 










End of period undistributed net investment income

 

$

3,770,892

 

$

1,484,576

 

$

1,287,484

 

 

 











 

 

 

See Notes to Financial Statements.

 


ANNUAL REPORT

APRIL 30, 2009

27



 

 



 

 

Statements of Changes in Net Assets

BlackRock MuniYield Quality Fund II, Inc. (MQT)


 

 

 

 

 

 

 

 

 

 

 

 

 

Period
November 1,
2008 to
April 30,
2009

 

 

 

 

 

 

Year Ended
October 31,

 

 

 

 




 

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

 

 

2008

 

2007

 












Operations

 

 

 

 

 

 

 

 

 

 












Net investment income

 

$

9,157,790

 

$

19,297,921

 

$

19,161,647

 

Net realized gain (loss)

 

 

(4,247,291

)

 

(1,157,479

)

 

523,278

 

Net change in unrealized appreciation/depreciation

 

 

33,306,545

 

 

(66,060,322

)

 

(10,662,734

)

Dividends to Preferred Shareholders from net investment income

 

 

(795,547

)

 

(5,769,792

)

 

(5,918,044

)

 

 










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

 

 

37,421,497

 

 

(53,689,672

)

 

3,104,147

 

 

 





















Dividends to Common Shareholders From

 

 

 

 

 

 

 

 

 

 












Net investment income

 

 

(6,710,079

)

 

(13,420,158

)

 

(13,554,360

)

 

 





















Net Assets Applicable to Common Shareholders

 

 

 

 

 

 

 

 

 

 












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

 

 

30,711,418

 

 

(67,109,830

)

 

(10,450,213

)

Beginning of period

 

 

227,551,130

 

 

294,660,960

 

 

305,111,173

 

 

 










End of period

 

$

258,262,548

 

$

227,551,130

 

$

294,660,960

 

 

 










End of period undistributed net investment income

 

$

2,756,513

 

$

1,161,024

 

$

1,064,864

 

 

 











 

 

 

See Notes to Financial Statements.

 




28

ANNUAL REPORT

APRIL 30, 2009



 


 

Statements of Cash Flows


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BlackRock MuniYield
Quality Fund, Inc. (MQY)

 

BlackRock MuniYield
Quality Fund II, Inc. (MQT)

 

 

 


 


 

 

 

Period
November 1,
2008 to
April 30,
2009

 

Year Ended
October 31,
2008

 

Period
November 1,
2008 to
April 30,
2009

 

Year Ended
October 31,
2008

 











Cash Provided by Operating Activities

 

 

 

 

 

 

 

 

 

 

 

 

 















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

 

$

60,005,037

 

$

(64,956,664

)

$

38,217,044

 

$

(47,919,880

)

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

 

 

 

 

 

 

 

 

 

 

 

 

 

(Increase) decrease in receivables

 

 

390,304

 

 

622,613

 

 

(18,292

)

 

532,251

 

(Increase) decrease in prepaid expenses and other assets

 

 

5,962

 

 

(77,189

)

 

1,194

 

 

(30,772

)

Decrease in accrued liabilities

 

 

(369,432

)

 

(266,541

)

 

(250,396

)

 

(137,263

)

Net realized and unrealized gain (loss)

 

 

(46,118,074

)

 

93,821,608

 

 

(29,775,387

)

 

65,829,728

 

Amortization of premium and discount on investments

 

 

(167,487

)

 

(550,835

)

 

(591,547

)

 

(1,209,214

)

Proceeds from sales of long-term investments

 

 

81,054,485

 

 

221,730,070

 

 

42,610,700

 

 

134,512,803

 

Purchases of long-term investments

 

 

(89,269,507

)

 

(143,508,247

)

 

(43,452,302

)

 

(89,234,847

)

Net proceeds from sales (net purchases) of short-term investments

 

 

3,155,502

 

 

(13,056,607

)

 

4,270,187

 

 

(11,663,624

)

 

 













Net cash provided by operating activities

 

 

8,686,790

 

 

93,758,208

 

 

11,011,201

 

 

50,679,182

 

 

 



























Cash Used for Financing Activities

 

 

 

 

 

 

 

 

 

 

 

 

 















Payments on redemption of Preferred Shares

 

 

 

 

(58,000,000

)

 

 

 

(31,750,000

)

Cash receipts from trust certificates

 

 

11,385,000

 

 

97,637,131

 

 

2,410,258

 

 

52,118,519

 

Cash payments for trust certificates

 

 

(8,314,247

)

 

(101,061,298

)

 

(5,670,000

)

 

(52,027,727

)

Cash dividends and distributions paid to Common Shareholders

 

 

(10,405,438

)

 

(23,036,819

)

 

(6,710,079

)

 

(13,420,158

)

Cash dividends and distributions paid to Preferred Shareholders

 

 

(1,492,362

)

 

(9,104,146

)

 

(1,091,012

)

 

(5,601,035

)

 

 













Net cash used for financing activities

 

 

(8,827,047

)

 

(93,565,132

)

 

(11,060,833

)

 

(50,680,401

)

 

 



























Cash

 

 

 

 

 

 

 

 

 

 

 

 

 















Net decrease in cash

 

 

(140,257

)

 

193,076

 

 

(49,632

)

 

(1,219

)

Cash at beginning of period

 

 

212,604

 

 

19,528

 

 

93,239

 

 

94,458

 

 

 













Cash at end of period

 

$

72,347

 

$

212,604

 

$

43,607

 

$

93,239

 

 

 



























Cash Flow Information

 

 

 

 

 

 

 

 

 

 

 

 

 















Cash paid during the period for interest

 

$

916,823

 

$

3,037,765

 

$

632,235

 

$

1,993,190

 

 

 














 

 

 

See Notes to Financial Statements.

 


ANNUAL REPORT

APRIL 30, 2009

29



 

 


 

Financial Highlights

BlackRock MuniYield Fund, Inc. (MYD)


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Period
November 1,
2008 to
April 30,
2009

 

 

 

 

 

 

 

 

 

 

 

Year Ended October 31,

 

 

 

 


 

 

 

2008

 

2007

 

2006

 

2005

 

2004

 





















Per Share Operating Performance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Net asset value, beginning of period

 

$

10.70

 

$

14.36

 

$

14.98

 

$

14.48

 

$

14.31

 

$

13.85

 

 

 



















Net investment income1

 

 

0.49

 

 

1.03

 

 

1.05

 

 

1.08

 

 

1.11

 

 

1.09

 

Net realized and unrealized gain (loss)

 

 

0.77

 

 

(3.62

)

 

(0.57

)

 

0.61

 

 

0.21

 

 

0.41

 

Dividends and distributions to Preferred Shareholders from:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net investment income

 

 

(0.04

)

 

(0.27

)

 

(0.28

)

 

(0.25

)

 

(0.16

)

 

(0.07

)

Net realized gain

 

 

 

 

 

 

 

 

(0.00

)2

 

 

 

 

 

 



















Net increase (decrease) from investment operations

 

 

1.22

 

 

(2.86

)

 

0.20

 

 

1.44

 

 

1.16

 

 

1.43

 

 

 



















Dividends and distributions to Common Shareholders from:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net investment income

 

 

(0.39

)

 

(0.80

)

 

(0.82

)

 

(0.94

)

 

(0.99

)

 

(0.96

)

Net realized gain

 

 

 

 

 

 

 

 

(0.00

)2

 

 

 

 

 

 



















Total dividends and distributions to Common Shareholders

 

 

(0.39

)

 

(0.80

)

 

(0.82

)

 

(0.94

)

 

(0.99

)

 

(0.96

)

 

 



















Capital charges with respect to issuance of Preferred Shares

 

 

 

 

 

 

 

 

0.00

3

 

(0.00

)2

 

(0.01

)

 

 



















Net asset value, end of period

 

$

11.53

 

$

10.70

 

$

14.36

 

$

14.98

 

$

14.48

 

$

14.31

 

 

 



















Market price, end of period

 

$

11.45

 

$

9.66

 

$

13.72

 

$

15.76

 

$

14.20

 

$

13.74

 

 

 



















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Total Investment Return4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Based on net asset value

 

 

11.76

%5

 

(20.69

)%

 

1.40

%

 

10.30

%

 

8.38

%

 

11.04

%

 

 



















Based on market price

 

 

22.93

%5

 

(25.06

)%

 

(7.91

)%

 

18.33

%

 

10.69

%

 

11.11

%

 

 



















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Ratios to Average Net Assets Applicable to Common Shareholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Total expenses after fees waived and excluding interest expense and fees6,7

 

 

1.09

%8

 

1.06

%

 

1.01

%

 

1.01

%

 

1.02

%

 

0.97

%

 

 



















Total expenses after fees waived6

 

 

1.24

%8

 

1.38

%

 

1.22

%

 

1.29

%

 

1.26

%

 

1.13

%

 

 



















Total expenses6

 

 

1.25

%8

 

1.38

%

 

1.23

%

 

1.29

%

 

1.26

%

 

1.14

%

 

 



















Net investment income6

 

 

9.20

%8

 

7.65

%

 

7.14

%

 

7.35

%

 

7.55

%

 

7.75

%

 

 



















Dividends to Preferred Shareholders

 

 

0.74

%8

 

1.99

%

 

1.88

%

 

1.71

%

 

1.10

%

 

0.51

%

 

 



















Net investment income to Common Shareholders

 

 

8.46

%8

 

5.66

%

 

5.26

%

 

5.64

%

 

6.45

%

 

7.24

%

 

 



















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Supplemental Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















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

 

$

523,590

 

$

484,945

 

$

647,574

 

$

672,367

 

$

644,825

 

$

636,019

 

 

 



















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

 

$

271,500

 

$

271,500

 

$

343,000

 

$

343,000

 

$

343,000

 

$

343,000

 

 

 



















Portfolio turnover

 

 

7

%

 

20

%

 

18

%

 

32

%

 

30

%

 

22

%

 

 



















Asset coverage per Preferred Share, end of period

 

$

73,217

 

$

69,695

 

$

72,218

9

$

74,0349

 

$

72,008

9

$

71,358

9

 

 




















 

 

 

 

1

Based on average shares outstanding.

 

 

 

 

2

Amount is less than $(0.01) per share.

 

 

 

 

3

Amount is less than $0.01 per share.

 

 

 

 

4

Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Total investment returns exclude the effects of sales charges.

 

 

 

 

5

Aggregate total investment return.

 

 

 

 

6

Do not reflect the effect of dividends to Preferred Shareholders.

 

 

 

 

7

Interest expense and fees related 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

Annualized.

 

 

 

 

9

Amounts have been recalculated to conform with current period presentation.


 

 

 

See Notes to Financial Statements.

 




30

ANNUAL REPORT

APRIL 30, 2009



 

 


 

Financial Highlights

BlackRock MuniYield Quality Fund, Inc. (MQY)


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Period
November 1,
2008 to
April 30,
2009

 

 

 

 

 

 

 

 

 

 

 

Year Ended October 31,

 

 

 

 


 

 

 

2008

 

2007

 

2006

 

2005

 

2004

 















Per Share Operating Performance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Net asset value, beginning of period

 

$

11.68

 

$

14.88

 

$

15.32

 

$

15.02

 

$

15.54

 

$

15.36

 

 

 



















Net investment income1

 

 

0.46

 

 

0.97

 

 

0.97

 

 

0.99

 

 

0.99

 

 

1.03

 

Net realized and unrealized gain (loss)

 

 

1.51

 

 

(3.12

)

 

(0.42

)

 

0.37

 

 

(0.39

)

 

0.19

 

Dividends and distributions to Preferred Shareholders from:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net investment income

 

 

(0.04

)

 

(0.27

)

 

(0.30

)

 

(0.27

)

 

(0.14

)

 

(0.07

)

Net realized gain

 

 

 

 

(0.03

)

 

 

 

 

 

 

 

 

 

 



















Net increase (decrease) from investment operations

 

 

1.93

 

 

(2.45

)

 

0.25

 

 

1.09

 

 

0.46

 

 

1.15

 

 

 



















Dividends and distributions to Common Shareholders from:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net investment income

 

 

(0.34

)

 

(0.68

)

 

(0.69

)

 

(0.79

)

 

(0.96

)

 

(0.97

)

Net realized gain

 

 

 

 

(0.07

)

 

 

 

 

 

 

 

 

 

 



















Total dividends and distributions to Common Shareholders

 

 

(0.34

)

 

(0.75

)

 

(0.69

)

 

(0.79

)

 

(0.96

)

 

(0.97

)

 

 



















Capital charges with respect to issuance of Preferred Shares

 

 

 

 

 

 

 

 

(0.00

)2

 

(0.02

)

 

 

 

 



















Net asset value, end of period

 

$

13.27

 

$

11.68

 

$

14.88

 

$

15.32

 

$

15.02

 

$

15.54

 

 

 



















Market price, end of period

 

$

12.32

 

$

10.90

 

$

13.20

 

$

14.48

 

$

14.27

 

$

14.83

 

 

 



















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Total Investment Return3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Based on net asset value

 

 

17.07

%4

 

(16.79

)%

 

2.00

%

 

7.78

%

 

3.10

%

 

8.26

%

 

 



















Based on market price

 

 

16.47

%4

 

(12.47

)%

 

(4.26

)%

 

7.22

%

 

2.64

%

 

10.58

%

 

 



















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Ratios to Average Net Assets Applicable to Common Shareholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Total expenses after fees waived and paid indirectly and excluding interest expense and fees5,6

 

 

1.13

%7

 

1.10

%

 

1.04

%

 

1.04

%

 

0.96

%

 

0.94

%

 

 



















Total expenses after fees waived and paid indirectly5

 

 

1.42

%7

 

1.75

%

 

1.71

%

 

1.75

%

 

1.44

%

 

1.25

%

 

 



















Total expenses5

 

 

1.43

%7

 

1.76

%

 

1.71

%

 

1.76

%

 

1.45

%

 

1.25

%

 

 



















Net investment income5

 

 

7.58

%7

 

6.89

%

 

6.46

%

 

6.61

%

 

6.46

%

 

6.74

%

 

 



















Dividends to Preferred Shareholders

 

 

0.69

%7

 

1.92

%

 

2.01

%

 

1.80

%

 

0.93

%

 

0.45

%

 

 



















Net investment income to Common Shareholders

 

 

6.89

%7

 

4.97

%

 

4.45

%

 

4.81

%

 

5.53

%

 

6.29

%

 

 



















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Supplemental Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















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

 

$

403,796

 

$

355,459

 

$

452,657

 

$

466,002

 

$

456,886

 

$

472,848

 

 

 



















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

 

$

192,000

 

$

192,000

 

$

250,000

 

$

250,000

 

$

250,000

 

$

200,000

 

 

 



















Portfolio turnover

 

 

13

%

 

20

%

 

24

%

 

33

%

 

29

%

 

28

%

 

 



















Asset coverage per Preferred Share, end of period

 

$

77,582

 

$

71,318

 

$

70,282

8

$

71,614

8

$

70,701

8

$

84,114

8

 

 




















 

 

 

 

1

Based on average 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. Total investment returns exclude the effects of sales charges.

 

 

 

 

4

Aggregate total investment return.

 

 

 

 

5

Do not reflect the effect of dividends to Preferred Shareholders.

 

 

 

 

6

Interest expense and fees related 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

Annualized.

 

 

 

 

8

Amounts have been recalculated to conform with current period presentation.


 

 

 

See Notes to Financial Statements.

 




ANNUAL REPORT

APRIL 30, 2009

31



 

 


 

Financial Highlights

BlackRock MuniYield Quality Fund II, Inc. (MQT)


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Period
November 1,
2008 to
April 30,
2009

 

 

 

 

 

 

 

 

 

 

 

Year Ended October 31,

 

 

 

 


 

 

 

2008

 

2007

 

2006

 

2005

 

2004

 















Per Share Operating Performance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Net asset value, beginning of period

 

$

10.17

 

$

13.17

 

$

13.64

 

$

13.36

 

$

13.72

 

$

13.44

 

 

 



















Net investment income1

 

 

0.41

 

 

0.86

 

 

0.86

 

 

0.86

 

 

0.89

 

 

0.94

 

Net realized and unrealized gain (loss)

 

 

1.31

 

 

(3.00

)

 

(0.46

)

 

0.37

 

 

(0.25

)

 

0.27

 

Dividends to Preferred Shareholders from net investment income

 

 

(0.04

)

 

(0.26

)

 

(0.26

)

 

(0.24

)

 

(0.14

)

 

(0.07

)

 

 



















Net increase (decrease) from investment operations

 

 

1.68

 

 

(2.40

)

 

0.14

 

 

0.99

 

 

0.50

 

 

1.14

 

 

 



















Dividends to Common Shareholders from net investment income

 

 

(0.30

)

 

(0.60

)

 

(0.61

)

 

(0.71

)

 

(0.85

)

 

(0.86

)

 

 



















Capital charges with respect to issuance of Preferred Shares

 

 

 

 

 

 

 

 

0.002

 

 

(0.01

)

 

 

 

 



















Net asset value, end of the period

 

$

11.55

 

$

10.17

 

$

13.17

 

$

13.64

 

$

13.36

 

$

13.72

 

 

 



















Market price, end of the period

 

$

10.16

 

$

8.75

 

$

11.60

 

$

12.93

 

$

12.86

 

$

12.69

 

 

 



















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Total Investment Return3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Based on net asset value

 

 

17.27

%4

 

(18.42

)%

 

1.39

%

 

7.98

%

 

3.98

%

 

9.32

%

 

 



















Based on market price

 

 

19.90

%4

 

(20.31

)%

 

(5.79

)%

 

6.34

%

 

8.21

%

 

11.57

%

 

 



















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Ratios to Average Net Assets Applicable to Common Shareholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Total expenses after fees waived and excluding interest expense and fees5,6

 

 

1.18

%7

 

1.12

%

 

1.06

%

 

1.05

%

 

1.03

%

 

1.01

%

 

 



















Total expenses after fees waived5

 

 

1.52

%7

 

1.79

%

 

1.72

%

 

1.66

%

 

1.49

%

 

1.21

%

 

 



















Total expenses5

 

 

1.52

%7

 

1.80

%

 

1.73

%

 

1.66

%

 

1.49

%

 

1.22

%

 

 



















Net investment income5

 

 

7.86

%7

 

6.96

%

 

6.39

%

 

6.44

%

 

6.51

%

 

7.00

%

 

 



















Dividends to Preferred Shareholders

 

 

0.68

%7

 

2.08

%

 

1.97

%

 

1.78

%

 

1.03

%

 

0.51

%

 

 



















Net investment income to Common Shareholders

 

 

7.18

%7

 

4.88

%

 

4.42

%

 

4.66

%

 

5.48

%

 

6.49

%

 

 



















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Supplemental Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















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

 

$

258,263

 

$

227,551

 

$

294,661

 

$

305,111

 

$

298,722

 

$

306,764

 

 

 



















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

 

$

128,250

 

$

128,250

 

$

160,000

 

$

160,000

 

$

160,000

 

$

150,000

 

 

 



















Portfolio turnover

 

 

9

%

 

17

%

 

20

%

 

37

%

 

29

%

 

27

%

 

 



















Asset coverage per Preferred Share, end of period

 

$

75,349

 

$

69,420

 

$

71,065

8

$

72,693

8

$

71,676

8

$

76,139

8

 

 




















 

 

 

 

1

Based on average 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. Total investment returns exclude the effects of sales charges.

 

 

 

 

4

Aggregate total investment return

 

 

 

 

5

Do not reflect the effect of dividends to Preferred Shareholders.

 

 

 

 

6

Interest expense and fees related 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

Annualized.

 

 

 

 

8

Amounts have been recalculated to conform with current period presentation.


 

 

 

See Notes to Financial Statements.

 




32

ANNUAL REPORT

APRIL 30, 2009



 


 

Notes to Financial Statements

1. Organization and Significant Accounting Policies:

BlackRock MuniYield Fund, Inc., (“MuniYield”), BlackRock MuniYield Quality Fund, Inc. (“MuniYield Quality”) and BlackRock MuniYield Quality Fund II, Inc. (MuniYield Quality II) (the “Funds” or individually as the “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, which may require the use of management accruals and estimates. Actual results may differ from these estimates. The Funds’ year ends were changed to April 30. 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 of Investments: 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 selected under the supervision of each Fund’s Board of Directors (the “Board”). 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. Swaps agreements are valued by utilizing quotes received daily by each Fund’s pricing service or through brokers which are derived using daily swap curves and trades of underlying securities. Short-term securities with maturities less than 60 days may be valued at amortized cost, which approximates market 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, the investment will be valued by a method approved by each Fund’s Board as reflecting fair value (“Fair Value Assets”). When determining the price for Fair Value Assets, the investment advisor and/or sub-advisor seeks to determine the price that the Funds 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.

Derivative Financial Instruments: Each Fund may engage in various portfolio investment strategies both to increase the return of the Fund and to hedge, or protect, its exposure to interest rate movements and movements in the securities markets. Losses may arise if the value of the contract decreases due to an unfavorable change in the price of the underlying security or if the counterparty does not perform under the contract.

 

 

Financial futures contracts — Each Fund may purchase or sell financial futures contracts and options on futures contracts for investment purposes or to manage its interest rate risk. Futures are contracts for delayed delivery of securities at a specific future date and at a specific price or yield. Pursuant to the contract, the Fund agrees to receive from, or pay to, the broker an amount of cash equal to the daily fluctuation in value of the contract. Such receipts or payments are known as margin variation and are recognized by the Fund as unrealized gains or losses. When the contract is closed, the Fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. The use of futures transactions involves the risk of an imperfect correlation in the movements in the price of futures contracts, interest rates and the underlying assets, and the possible inability of counterparties to meet the terms of their contracts.

 

 

Forward interest rate swaps — Each Fund may enter into forward interest rate swaps for investment purposes. The Funds may enter into swap agreements, in which each Fund and a counterparty agree to make periodic net payments on a specified notional amount. In a forward interest rate swap, a Fund and the counterparty agree to make periodic net payments on a specified notional contract amount, commencing on a specified future effective date, unless terminated earlier. These periodic payments received or made by the Funds are recorded in the accompanying Statements of Operations as realized gains or losses, respectively. Swaps are marked-to-market daily and changes in value are recorded as unrealized appreciation (depreciation). When the swap is terminated, the Funds will record a realized gain or loss equal to the difference between the proceeds from (or cost of) the closing transaction and the Funds’ basis in the contract, if any. The Funds generally intend to close each forward interest rate swap before the effective date specified in the agreement and therefore avoid entering into the interest rate swap underlying each forward interest rate swap. Swap transactions involve, to varying degrees, elements of credit and market risk in excess of the amounts recognized on the Statements of Assets and Liabilities. Such risks involve the possibility that there will be no liquid market for these agreements, that the counterparty to the agreements may default on its obligation to perform or disagree as to the meaning of the contractual terms in the agreements, and that there may be unfavorable changes in interest rates and/or market values associated with these transactions.

Forward Commitments and When-Issued Delayed Delivery Securities: Each Fund 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

 

 

 




ANNUAL REPORT

APRIL 30, 2009

33



 


 

Notes to Financial Statements (continued)

conditions only with the intention of actually buying 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. Upon making a commitment to purchase a security on a delayed-delivery basis, a Fund assumes the rights and risks of ownership of the security, including the risk of price and yield fluctuations.

Municipal Bonds Transferred to Tender Option Bond Trusts: Each Fund leverages its 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 each Fund has contributed securities. A TOB typically issues two classes of beneficial interests: short-term floating rate certificates, which are sold to third party investors, and residual certificates (“TOB Residuals”), which are generally issued to the participating funds that made the transfer. The TOB Residuals held by the Funds include the right of the Funds (1) to cause the holders of a proportional share of the floating rate certificates to tender their certificates at par, and (2) to transfer, within seven days, a corresponding share of the municipal bonds from the TOB to the Funds. The TOB may also be terminated without the consent of the Funds 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 each Fund, which typically invests the cash in additional municipal bonds. The Funds’ 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 shown on the Statements of Assets and Liabilities as trust certificates.

Interest income from the underlying securities is recorded by the Funds on an accrual basis. Interest expense incurred on the secured borrowing and other expenses related to remarketing, administration and trustee services to a TOB are reported as expenses of the Funds. The floating rate certificates have interest rates that generally reset weekly and their holders have the option to tender certificates to the TOB for redemption at par at each reset date. At April 30, 2009, the aggregate value of the underlying municipal bonds transferred to TOBs, the related liability for trust certificates and the range of interest rates for trust certificates were as follows:

 

 

 

 

 

 

 

 

 

 









 

 

Underlying
Municipal
Bonds
Transferred
to TOBs

 

Liability
for Trust
Certificates

 

Range of
Interest
Rates
for Trust
Certificates

 









MuniYield

 

$

136,973,991

 

$

70,137,076

 

0.624% – 1.239

%

MuniYield Quality

 

$

148,876,880

 

$

76,331,586

 

0.504% – 2.242

%

MuniYield Quality II

 

$

85,295,713

 

$

44,556,050

 

0.578% – 2.282

%











Financial transactions executed through TOBs generally will underperform the market for fixed rate municipal bonds when short-term interest rates rise, but tend to outperform the market for fixed rate bonds when short-term interest rates decline or remain relatively stable. Should short-term interest rates rise, the Funds’ investment in TOBs may adversely affect the Funds’ investment income and distributions to shareholders. Also, fluctuations in the market value of municipal bonds deposited into the TOB may adversely affect the Funds’ net asset value per share.

Zero-Coupon Bonds: Each Fund 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 each Fund segregates assets in connection with certain investments (e.g., swaps or financial futures contracts), each Fund will, consistent with certain interpretive letters issued by the SEC, designate on its 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, the Funds may also be required to deliver or deposit securities as collateral for certain investments (e.g., financial futures contracts and swaps).

Investment Transactions and Investment Income: Investment transactions are recorded on the dates the transactions are entered into (the trade dates). Realized gains and losses on security transactions are determined on the identified cost basis. Dividend income is recorded on the ex-dividend dates. Interest income is recognized on the accrual method. Each Fund amortizes all premiums and discounts on debt securities.

Dividends and Distributions: Dividends from net investment income are declared and paid monthly. Distributions of capital gains are recorded on the ex-dividend dates. Dividends and distributions to Preferred Shareholders are accrued and determined as described in Note 5.

Income Taxes: It is each Fund’s policy to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies

 

 

 


34

ANNUAL REPORT

APRIL 30, 2009



 


 

Notes to Financial Statements (continued)

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 statutes of limitations on each of the Fund’s US federal tax returns remain open for each of the three years ended October 31, 2008 and the period ended April 30, 2009. The statutes of limitations on each of the Fund’s state and local tax returns may remain open for an additional year depending upon the jurisdiction.

Recent Accounting Pronouncement: In March 2008, Statement of Financial Accounting Standards No. 161, “Disclosures about Derivative Instruments and Hedging Activities — an amendment of FASB Statement No. 133” (“FAS 161”), was issued. FAS 161 is intended to improve financial reporting for derivative instruments by requiring enhanced disclosure that enables investors to understand how and why an entity uses derivatives, how derivatives are accounted for, and how derivative instruments affect an entity’s results of operations and financial position. FAS 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. The impact on the Funds’ financial statement disclosures, if any, is currently being assessed.

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”) defer a portion of their annual complex-wide compensation. Deferred amounts earn an approximate return as though equivalent dollar amounts have 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 there-under represent general unsecured claims against the general assets of the Funds. 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 are included in other assets on the Statements of Assets and Liabilities, if any. Dividends and distributions from the BlackRock Closed-End Fund investments under the plan are included in income — affiliated on the Statements of Operations.

Other: Expenses directly related to each 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. Custodian fees may be reduced by amounts calculated on uninvested cash balances, which are shown on the Statements of Operations as fees paid indirectly.

2. Investment Advisory Agreement and Other Transactions with Affiliates:

Each Fund entered into an Investment Advisory Agreement with BlackRock Advisors, LLC (the “Advisor”), an indirect, wholly owned subsidiary of BlackRock, Inc., to provide investment advisory and administration services. The PNC Financial Services Group, Inc. (“PNC”) and Bank of America Corporation (“BAC”) are the largest stockholders of BlackRock, Inc. (“BlackRock”). BAC became a stockholder of BlackRock following its acquisition of Merrill Lynch & Co., Inc. (“Merrill Lynch”) on January 1, 2009. Prior to that date, both PNC and Merrill Lynch were considered affiliates of the Funds under the 1940 Act. Subsequent to the acquisition, PNC remains an affiliate, but due to the restructuring of Merrill Lynch’s ownership interest of BlackRock, BAC is not deemed to be an affiliate under the 1940 Act.

The Advisor 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 a monthly fee at an annual rate of 0.50% of the respective Fund’s average daily net assets. Average daily net assets is the average daily value of the Funds’ total assets minus the sum of its accrued liabilities.

The Advisor has agreed to waive its advisory fees by the amount of investment advisory fees each Fund pays to the Advisor indirectly through its investment in affiliated money market funds. These amounts are shown as fees waived by advisor on the Statements of Operations.

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

For the period November 1, 2008 to April 30, 2009 and the year ended October 31, 2008, the Funds reimbursed the Advisor for certain accounting services, which are included in accounting services on the Statements of Operations as follows:

 

 

 

 

 

 

 

 







 

 

Reimbursement

 

 

 


 

 

 

November 1,
2008 to
April 30,
2009

 

Year
Ended
October 31,
2008

 







MuniYield

 

$

7,501

 

$

15,900

 

MuniYield Quality

 

$

6,058

 

$

9,323

 

MuniYield Quality II

 

$

3,638

 

$

7,377

 









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

 

 

 




ANNUAL REPORT

APRIL 30, 2009

35



 


 

Notes to Financial Statements (continued)

3. Investments:

Purchases and sales of investments, excluding short-term securities, for the period November 1, 2008 to April 30, 2009, were as follows:

 

 

 

 

 

 

 

 









 

 

 

Purchases

 

 

Sales

 









MuniYield

 

$

83,106,741

 

$

59,688,715

 

MuniYield Quality

 

$

89,907,635

 

$

78,724,616

 

MuniYield Quality II

 

$

38,514,542

 

$

41,098,066

 









4. Concentration, Market and Credit Risk:

Each Fund invests a substantial amount of its 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 reduces the risk of loss due to issuer default. 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 (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 credit risk, the Funds may be exposed to counterparty risk, or the risk that an entity with which the Funds have unsettled or open transactions may default. Financial assets, which potentially expose the Funds to credit and counterparty risks, consist principally of investments and cash due from counterparties. The extent of the Funds’ exposure to credit and counterparty risks with respect to these financial assets is approximated by their value recorded in the Funds’ Statements of Assets and Liabilities.

5. Capital Share Transactions:

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

Common Shares

Shares issued and outstanding for MuniYield during the period November 1, 2008 to April 30, 2009 and the years ended October 31, 2008 and October 31, 2007 increased by 73,715, 210,884 and 236,501, respectively, as a result of dividend reinvestment and remained constant for MuniYield Quality and MuniYield Quality II.

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

From time to time in the future, the Funds that have issued Preferred Shares may effect repurchases of such shares at prices below their liquidation preferences as agreed upon by the Funds and seller. The Funds also may redeem their respective Preferred Shares from time to time as provided in the applicable Governing Instrument. The Funds intend 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, 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 at April 30, 2009:

 

 

 

 

 

 

 

 

 

 

 

 

 

 















 

 

Series

 

Preferred
Shares

 

Effective
Yield

 

Reset
Frequency Days

 















MuniYield

 

 

A

 

1,425

 

 

0.716

%

 

28

 

 

 

 

 

B

 

1,425

 

 

0.746

%

 

28

 

 

 

 

 

C

 

1,425

 

 

0.792

%

 

28

 

 

 

 

 

D

 

1,425

 

 

0.792

%

 

28

 

 

 

 

 

E

 

2,216

 

 

0.792

%

 

7

 

 

 

 

 

F

 

1,361

 

 

0.792

%

 

7

 

 

 

 

 

G

 

1,583

 

 

1.820

%

 

7

 

 















MuniYield Quality

 

 

A

 

1,536

 

 

0.716

%

 

28

 

 

 

 

 

B

 

1,536

 

 

0.792

%

 

7

 

 

 

 

 

C

 

1,536

 

 

0.792

%

 

28

 

 

 

 

 

D

 

1,536

 

 

0.762

%

 

7

 

 

 

 

 

E

 

1,536

 

 

1.820

%

 

7

 

 















MuniYield Quality II

 

 

A

 

1,603

 

 

0.716

%

 

28

 

 

 

 

 

B

 

1,603

 

 

0.731

%

 

28

 

 

 

 

 

C

 

1,603

 

 

0.792

%

 

7

 

 

 

 

 

D

 

321

 

 

1.820

%

 

7

 

 
















 

 

 


36

ANNUAL REPORT

APRIL 30, 2009



 


 

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 (except MuniYield Series G, MuniYield Quality Series E and MuniYield Quality II Series D) 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. The maximum applicable rate on the Preferred Shares of MuniYield Series G, MuniYield Quality Series E and MuniYield Quality II Series D is the higher of 110% of the Telerate/BBA LIBOR or 110% of 90% of the Kenney S&P 30-day High Grade Index rate divided by 1.00 minus the marginal tax rate. The low, high and average dividend rates on the Preferred Shares for each Fund for the period ended April 30, 2009 were as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 















 

 

 

Series

 

Low

 

High

 

Average

 












MuniYield

 

 

A

 

0.685

%

 

3.945

%

 

1.275

%

 

 

 

 

B

 

0.594

%

 

3.087

%

 

1.349

%

 

 

 

 

C

 

0.640

%

 

6.473

%

 

1.256

%

 

 

 

 

D

 

0.731

%

 

7.844

%

 

1.361

%

 

 

 

 

E

 

0.594

%

 

3.087

%

 

1.062

%

 

 

 

 

F

 

0.640

%

 

2.988

%

 

1.089

%

 

 

 

 

G

 

1.640

%

 

3.495

%

 

2.045

%

 















MuniYield Quality

 

 

A

 

0.594

%

 

3.474

%

 

1.299

%

 

 

 

 

B

 

0.594

%

 

3.474

%

 

1.076

%

 

 

 

 

C

 

0.716

%

 

7.158

%

 

1.337

%

 

 

 

 

D

 

0.594

%

 

2.999

%

 

1.069

%

 

 

 

 

E

 

1.640

%

 

3.495

%

 

2.045

%

 















MuniYield Quality II

 

 

A

 

0.594

%

 

3.305

%

 

1.232

%

 

 

 

 

B

 

0.655

%

 

2.635

%

 

1.310

%

 

 

 

 

C

 

0.594

%

 

2.635

%

 

1.052

%

 

 

 

 

D

 

1.640

%

 

3.357

%

 

2.073

%

 















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 0.594% to 7.158% for the period ended April 30, 2009. 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%.

Prior to December 22, 2008, the Funds paid commissions to certain broker-dealers at the end of each auction at an annual rate of 0.25%, calculated on the aggregate principal amount. As of December 22, 2008, commissions paid to broker-dealers on Preferred Shares that experienced a failed auction were reduced to 0.15% on the aggregate principal amount. The Funds will pay commissions of 0.25% on the aggregate principal amount if all shares successfully clear their auctions. Merrill Lynch, Pierce, Fenner & Smith Incorporated, a wholly owned subsidiary of Merrill Lynch, earned commissions for the period November 1, 2008 to December 31, 2008 (after which Merrill Lynch was no longer considered an affiliate) and the year ended October 31, 2008 as follows:

 

 

 

 

 

 

 

 









 

 

November 1,
2008 to
December 31,
2008

 

Year
Ended
October 31,
2008

 









MuniYield

 

$

45,606

 

$

335,369

 

MuniYield Quality

 

$

41,648

 

$

326,490

 

MuniYield Quality II

 

$

31,042

 

$

206,989

 









Between June 4, 2008 and June 18, 2008, the Funds announced the following redemptions of Preferred Shares at a price of $25,000 per share plus any accrued and unpaid dividends through the redemption date:

 

 

 

 

 

 

 

 

 

 

 

 

 

 















 

 

Series

 

Redemption
Date

 

Shares
Redeemed

 

Aggregate
Principal

 















MuniYield

 

 

A

 

 

7/02/2008

 

375

 

 

$

9,375,000

 

 

 

 

B

 

 

7/09/2008

 

375

 

 

$

9,375,000

 

 

 

 

C

 

 

6/25/2008

 

375

 

 

$

9,375,000

 

 

 

 

D

 

 

6/18/2008

 

375

 

 

$

9,375,000

 

 

 

 

E

 

 

6/18/2008

 

584

 

 

$

14,600,000

 

 

 

 

F

 

 

6/26/2008

 

359

 

 

$

8,975,000

 

 

 

 

G

 

 

6/23/2008

 

417

 

 

$

10,425,000

 















MuniYield Quality

 

 

A

 

 

7/08/2008

 

464

 

 

$

11,600,000

 

 

 

 

B

 

 

6/24/2008

 

464

 

 

$

11,600,000

 

 

 

 

C

 

 

7/18/2008

 

464

 

 

$

11,600,000

 

 

 

 

D

 

 

6/27/2008

 

464

 

 

$

11,600,000

 

 

 

 

E

 

 

6/23/2008

 

464

 

 

$

11,600,000

 















MuniYield Quality II

 

 

A

 

 

7/07/2008

 

397

 

 

$

9,925,000

 

 

 

 

B

 

 

7/14/2008

 

397

 

 

$

9,925,000

 

 

 

 

C

 

 

6/30/2008

 

397

 

 

$

9,925,000

 

 

 

 

D

 

 

6/24/2008

 

79

 

 

$

1,975,000

 















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

Preferred Shares issued and outstanding for the period November 1, 2008 to April 30, 2009 and the year ended October 31, 2007 remained constant.

 

 

 


ANNUAL REPORT

APRIL 30, 2009

37



 


 

Notes to Financial Statements (continued)

6. Income Tax Information:

Reclassifications: Accounting principles generally accepted in the United States of America require that certain components of net assets be adjusted to reflect permanent differences between financial and tax reporting. The following permanent differences as of April 30, 2009 attributable to the difference between book and tax amortization methods on fixed income securities, the expiration of capital loss carryforwards, reclassifications of distributions and the difference between the book and tax treatment of residual interests in tender option bond trusts, were reclassified to the following accounts:

 

 

 

 

 

 

 

 

 

 

 












 

 

MuniYield

 

MuniYield
Quality

 

MuniYield
Quality II

 












Paid-in capital

 

$

(6,000,238

)

$

23,073

 

 

 

Undistributed net investment income

 

$

(123,044

)

$

67,500

 

$

(56,675

)

Accumulated net realized loss

 

$

6,123,282

 

$

(90,573

)

$

56,675

 









The tax character of distributions paid during the period November 1, 2008 to April 30, 2009 and the years ended October 31, 2008 and October 31, 2007 were as follows:

 

 

 

 

 

 

 

 

 

 

 












 

 

MuniYield

 

MuniYield
Quality

 

MuniYield
Quality II

 












Tax-exempt income

 

 

 

 

 

 

 

 

 

 

4/30/09

 

$

19,158,960

 

$

11,668,147

 

$

7,505,626

 

10/31/08

 

$

48,073,283

 

$

29,031,337

 

$

19,189,950

 

10/31/07

 

$

49,480,604

 

$

30,124,515

 

$

19,472,404

 

Ordinary income

 

 

 

 

 

 

 

 

 

 

4/30/09

 

$

190,835

 

 

 

 

 

Long-term capital gains

 

 

 

 

 

 

 

 

 

 

10/31/08

 

 

 

$

3,210,102

 

 

 

 

 










Total

 

 

 

 

 

 

 

 

 

 

4/30/09

 

$

19,349,795

 

$

11,668,147

 

$

7,505,626

 

 

 










10/31/08

 

$

48,073,283

 

$

32,241,439

 

$

19,189,950

 

 

 










10/31/07

 

$

49,480,604

 

$

30,124,515

 

$

19,472,404

 

 

 










As of April 30, 2009, the tax components of accumulated losses were as follows:

 

 

 

 

 

 

 

 

 

 

 












 

 

MuniYield

 

MuniYield
Quality

 

MuniYield
Quality II

 












Undistributed tax-exempt income

 

$

3,765,828

 

$

3,898,253

 

$

2,281,185

 

Capital loss carryforwards

 

 

(15,998,955

)

 

(2,933,646

)

 

(10,886,471

)

Net unrealized losses*

 

 

(87,075,102

)

 

(23,451,066

)

 

(20,898,906

)

 

 










Total accumulated net losses

 

$

(99,308,229

)

$

(22,486,459

)

$

(29,504,192

)













 

 

 

 

*

The difference between book-basis and tax-basis net unrealized losses is attributable primarily to the tax deferral of losses on wash sales, the tax deferral of losses on straddles, the difference between book and tax amortization methods for premiums and discounts on fixed income securities, book/tax differences in the accrual of income on securities in default, the difference between the book and tax treatment of residual interest in tender option bond trusts and the deferral of compensation to directors.

As of April 30, 2009, the Funds had capital loss carryforwards available to offset future realized capital gains through the indicated expiration dates:

 

 

 

 

 

 

 

 

 

 











Expires April 30,

 

MuniYield

 

MuniYield
Quality

 

MuniYield
Quality II











2010

 

$

189,274

 

 

 

$

1,105,212

2012

 

 

 

 

 

 

5,561,802

2016

 

 

11,743,926

 

$

2,229,309

 

 

493,401

2017

 

 

4,065,755

 

 

704,337

 

 

3,726,056

 

 









Total

 

$

15,998,955

 

$

2,933,646

 

$

10,886,471

 

 









7. Subsequent Events:

The Funds paid a net investment income dividend to Common Shareholders in the following amounts per share on June 1, 2009 to shareholders of record on May 15, 2009:

 

 

 

 

 






 

 

Per Share
Amount

 






MuniYield

 

$

0.064

 

MuniYield Quality

 

$

0.057

 

MuniYield Quality II

 

$

0.050

 






The dividends declared on Preferred Shares for the period May 1, 2009 to May 31, 2009 were as follows:

 

 

 

 

 

 

 






 

 

Series

 

Amount






MuniYield

 

 

A

 

$

20,494

 

 

 

B

 

$

20,314

 

 

 

C

 

$

22,925

 

 

 

D

 

$

21,646

 

 

 

E

 

$

30,465

 

 

 

F

 

$

18,664

 

 

 

G

 

$

57,092








MuniYield Quality

 

 

A

 

$

21,750

 

 

 

B

 

$

21,691

 

 

 

C

 

$

23,591

 

 

 

D

 

$

20,603

 

 

 

E

 

$

55,397








MuniYield Quality II

 

 

A

 

$

22,615

 

 

 

B

 

$

22,776

 

 

 

C

 

$

22,409

 

 

 

D

 

$

11,615









 

 

 




38

ANNUAL REPORT

APRIL 30, 2009



 


 

Notes to Financial Statements (concluded)

The Funds’ distribution rates declared on June 1, 2009 were as follows:

 

 

 

 

 






 

 

Per Share
Amount

 






MuniYield

 

$

0.0690

 

MuniYield Quality

 

$

0.0670

 

MuniYield Quality II

 

$

0.0575

 






On June 15, 2009, the Funds’ Boards approved 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 to be
Redeemed

 

Aggregate
Principal














MuniYield

 

 

A

 

 

7/29/09

 

 

105

 

$

2,625,000

 

 

 

B

 

 

7/08/09

 

 

105

 

$

2,625,000

 

 

 

C

 

 

7/22/09

 

 

105

 

$

2,625,000

 

 

 

D

 

 

7/15/09

 

 

105

 

$

2,625,000

 

 

 

E

 

 

7/08/09

 

 

164

 

$

4,100,000

 

 

 

F

 

 

7/09/09

 

 

101

 

$

2,525,000

 

 

 

G

 

 

7/06/09

 

 

117

 

$

2,925,000














MuniYield Quality

 

 

A

 

 

8/04/09

 

 

123

 

$

3,075,000

 

 

 

B

 

 

7/14/09

 

 

123

 

$

3,075,000

 

 

 

C

 

 

7/17/09

 

 

123

 

$

3,075,000

 

 

 

D

 

 

7/10/09

 

 

123

 

$

3,075,000

 

 

 

E

 

 

7/06/09

 

 

123

 

$

3,075,000














MuniYield Quality II

 

 

A

 

 

8/03/09

 

 

146

 

$

3,650,000

 

 

 

B

 

 

7/13/09

 

 

146

 

$

3,650,000

 

 

 

C

 

 

7/13/09

 

 

146

 

$

3,650,000

 

 

 

D

 

 

7/07/09

 

 

29

 

$

725,000














The Funds will finance the Preferred Share redemptions with cash received from tender option bond transactions (See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to tender option bond trusts).

 

 

 


ANNUAL REPORT

APRIL 30, 2009

39



 


 

Report of Independent Registered Public Accounting Firm

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

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

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Funds are not required to have, nor were we engaged to perform, an audit of their internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Funds’ internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of April 30, 2009, 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 MuniYield Fund, Inc., BlackRock MuniYield Quality Fund, Inc., and BlackRock MuniYield Quality Fund II, Inc. as of April 30, 2009, the results of their operations for the period November 1, 2008 to April 30, 2009 and the year ended October 31, 2008, the changes in their net assets for the period November 1, 2008 to April 30, 2009 and for each of the two years in the period ended October 31, 2008, the financial highlights for the period of November 1, 2008 to April 30, 2009 and for each of the five years in the period ended October 31, 2008, and the cash flows for BlackRock MuniYield Quality Fund, Inc. and BlackRock MuniYield Quality Fund II, Inc. for the period November 1, 2008 to April 30, 2009 and for the year ended October 31, 2008, in conformity with accounting principles generally accepted in the United States of America.

Deloitte & Touche LLP
Princeton, New Jersey

June 26, 2009

 


Important Tax Information (Unaudited)


The following table summarizes the taxable per share distributions paid by BlackRock MuniYield Fund, Inc. during the period ended April 30, 2009:

 

 

 

 

 

 

 

 









 

 

 

Payable Date

 

 

Ordinary

 









Common Shareholders

 

 

12/31/2008

 

$

0.003133

 









Preferred Shareholders:

 

 

 

 

 

 

 

Series A

 

 

12/17/2008

 

$

4.71

 

Series B

 

 

12/24/2008

 

$

4.54

 

Series C

 

 

12/10/2008

 

$

4.15

 

Series D

 

 

12/31/2008

 

$

3.98

 

Series E

 

 

12/17/2008

 

$

4.45

 

Series F

 

 

12/26/2008

 

$

4.52

 

Series G

 

 

12/22/2008

 

$

5.10

 









All other net investment income distributions paid by the Fund during the taxable period ended April 30, 2009 qualify as tax-exempt interest dividends for federal income tax purposes.

All of the net investment income distributions paid by BlackRock MuniYield Quality Fund, Inc. and BlackRock MuniYield Quality Fund II, Inc. during the taxable period ended April 30, 2009 qualify as tax-exempt interest dividends for federal income tax purposes.

 

 

 




40

ANNUAL REPORT

APRIL 30, 2009



 


 

Automatic Dividend Reinvestment Plans

How the Plan Works — The Funds offer a Dividend Reinvestment Plan (the “Plan”) under which income and capital gains dividends paid by each Fund are automatically reinvested in additional Common Shares of each Fund. The Plan is administered on behalf of the shareholders by BNY Mellon Shareowner Services for BlackRock MuniYield Fund, Inc. and BlackRock MuniYield Quality Fund II, Inc. and Computershare Trust Company, N.A. for BlackRock MuniYield Quality Fund, Inc. (individually, the “Plan Agent” or together, the “Plan Agents”). Under the Plan, whenever the Funds declare a dividend, participants in the Plan will receive the equivalent in shares of Common Shares of the Fund. The Plan Agents will acquire the shares for the participant’s account either (i) through receipt of additional unissued but authorized shares of the Fund (“newly issued shares”) or (ii) by purchase of outstanding Common Shares on the open market on the New York Stock Exchange or elsewhere. If, on the dividend payment date, a Fund’s net asset value per share is equal to or less than the market price per share plus estimated brokerage commissions (a condition often referred to as a “market premium”), the Plan Agents will invest the dividend amount in newly issued shares. If a Fund’s net asset value per share is greater than the market price per share (a condition often referred to as a “market discount”), the Plan Agents will invest the dividend amount by purchasing on the open market additional shares. If the Plan Agents are unable to invest the full dividend amount in open market purchases, or if the market discount shifts to a market premium during the purchase period, the Plan Agents will invest any uninvested portion in newly issued shares. The shares acquired are credited to each shareholder’s account. The amount credited is determined by dividing the dollar amount of the dividend by either (i) when the shares are newly issued, the net asset value per share on the date the shares are issued or (ii) when shares are purchased in the open market, the average purchase price per share.

Participation in the Plan — Participation in the Plan is automatic, that is, a shareholder is automatically enrolled in the Plan when he or she purchases Common Shares of a Fund unless the shareholder specifically elects not to participate in the Plan. Shareholders who elect not to participate will receive all dividend distributions in cash. Shareholders who do not wish to participate in the Plan, must advise their Plan Agent in writing (at the address set forth below) that they elect not to participate in the Plan. Participation in the Plan is completely voluntary and may be terminated or resumed at any time without penalty by writing to the Plan Agent.

Benefits of the Plan — The Plan provides an easy, convenient way for shareholders to make additional, regular investments in a Fund. The Plan promotes a long-term strategy of investing at a lower cost. All shares acquired pursuant to the Plan receive voting rights. In addition, if the market price plus commissions of a Fund’s shares is above the net asset value, participants in the Plan will receive shares of the Fund for less than they could otherwise purchase them and with a cash value greater than the value of any cash distribution they would have received. However, there may not be enough shares available in the market to make distributions in shares at prices below the net asset value. Also, since the Funds do not redeem shares, the price on resale may be more or less than the net asset value.

Plan Fees — There are no enrollment fees or brokerage fees for participating in the Plan. The Plan Agents’ service fees for handling the reinvestment of distributions are paid for by each Fund. However, brokerage commissions may be incurred when a Fund purchase shares on the open market and shareholders will pay a pro rata share of any such commissions.

Tax Implications — The automatic reinvestment of dividends and distributions will not relieve participants of any federal, state or local income tax that may be payable (or required to be withheld) on such dividends. Therefore, income and capital gains may still be realized even though shareholders do not receive cash. The value of shares acquired pursuant to the Plan will generally be excluded from gross income to the extent that the cash amount reinvested would be excluded from gross income. If, when a Fund’s shares are trading at a market premium, a Fund issues shares pursuant to the Plan that have a greater fair market value than the amount of cash reinvested, it is possible that all or a portion of the discount from the market value (which may not exceed 5% of the fair market value of a Fund’s shares) could be viewed as a taxable distribution. If the discount is viewed as a taxable distribution, it is also possible that the taxable character of this discount would be allocable to all the shareholders, including shareholders who do not participate in the Plan. Thus, shareholders who do not participate in the Plan might be required to report as ordinary income a portion of their distributions equal to their allocable share of the discount.

Contact Information — All correspondence concerning the Plan, including any questions about the Plan, should be directed to the Plan Agent at the following addresses: Shareholders of BlackRock MuniYield Fund, Inc. and BlackRock MuniYield Quality Fund II, Inc. should contact BNY Mellon Shareowner Services, P.0. Box 358035, Pittsburgh, PA 15252-8035, Telephone: (866) 212-0242 and shareholders of BlackRock MuniYield Quality Fund, Inc. should contact 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.

 

 

 


ANNUAL REPORT

APRIL 30, 2009

41



 


 

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 Funds
and Portfolios
Overseen

 

Public Directorships












Non-Interested Directors1

 

 

 

 

 

 

 

 












Richard E. Cavanagh
40 East 52nd Street
New York, NY 10022
1946

 

Chairman of
the Board
and Director

 

Since 2007

 

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

 

106 Funds
103 Portfolios

 

Arch Chemical (chemical and allied products)












Karen P. Robards
40 East 52nd Street
New York, NY 10022
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; Formerly Director of Enable Medical Corp. from 1996 to 2005; Formerly an investment banker at Morgan Stanley from 1976 to 1987.

 

106 Funds
103 Portfolios

 

AtriCure, Inc. (medical devices); Care Investment Trust, Inc. (health care real estate investment trust)












G. Nicholas Beckwith, III
40 East 52nd Street
New York, NY 10022
1945

 

Director

 

Since 2007

 

Chairman and Chief Executive Officer, Arch Street Management, LLC (Beckwith Family Foundation) and various Beckwith property companies since 2005; Chairman of the Board of Directors, University of Pittsburgh Medical Center since 2002; Board of Directors, Shady Side Hospital Foundation since 1977; Board of Directors, Beckwith Institute for Innovation In Patient Care since 1991; Member, Advisory Council on Biology and Medicine, Brown University since 2002; Trustee, Claude Worthington Benedum Foundation (charitable foundation) since 1989; Board of Trustees, Chatham University since 1981; Board of Trustees, University of Pittsburgh since 2002; Emeritus Trustee, Shady Side Academy since 1977; Formerly Chairman and Manager, Penn West Industrial Trucks LLC (sales, rental and servicing of material handling equipment) from 2005 to 2007; Formerly Chairman, President and Chief Executive Officer, Beckwith Machinery Company (sales, rental and servicing of construction and equipment) from 1985 to 2005; Formerly Member of the Board of Directors, National Retail Properties (REIT) from 2006 to 2007.

 

106 Funds
103 Portfolios

 

None












Kent Dixon
40 East 52nd Street
New York, NY 10022
1937

 

Director and
Member of
the Audit
Committee

 

Since 2007

 

Consultant/Investor since 1988.

 

106 Funds
103 Portfolios

 

None












Frank J. Fabozzi
40 East 52nd Street
New York, NY 10022
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; Formerly Adjunct Professor of Finance and Becton Fellow, Yale University from 1994 to 2006.

 

106 Funds
103 Portfolios

 

None












Kathleen F. Feldstein
40 East 52nd Street
New York, NY 10022
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. since 2005; 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.

 

106 Funds
103 Portfolios

 

The McClatchy Company (publishing)












James T. Flynn
40 East 52nd Street
New York, NY 10022
1939

 

Director and
Member of
the Audit
Committee

 

Since 2007

 

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

 

106 Funds
103 Portfolios

 

None












Jerrold B. Harris
40 East 52nd Street
New York, NY 10022
1942

 

Director

 

Since 2007

 

Trustee, Ursinus College since 2000; Director, Troemner LLC (scientific equipment) since 2000.

 

106 Funds
103 Portfolios

 

BlackRock Kelso Capital Corp.


 

 

 




42

ANNUAL REPORT

APRIL 30, 2009



 


 

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 Funds
and Portfolios
Overseen

 

Public Directorships












Non-Interested Directors1 (concluded)

 

 

 

 

 

 

 












R. Glenn Hubbard
40 East 52nd Street
New York, NY 10022
1958

 

Director

 

Since 2007

 

Dean of Columbia Business School since 2004; Columbia faculty member since 1988; Formerly Co-Director of Columbia Business School’s Entrepreneurship Program from 1997 to 2004; Visiting Professor at the John F. Kennedy School of Government at Harvard University and the Harvard Business School since 1985 and at the University of Chicago since 1994; Formerly Chairman of the U.S. Council of Economic Advisers under the President of the United States from 2001 to 2003.

 

106 Funds
103 Portfolios

 

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












W. Carl Kester
40 East 52nd Street
New York, NY 10022
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 since 2006; 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.

 

106 Funds
103 Portfolios

 

None


 

 



1

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

 

 

2

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: G. Nicholas Beckwith, III, 1999; Richard E. Cavanagh, 1994; Kent Dixon, 1988; Frank J. Fabozzi, 1988; Kathleen F. Feldstein, 2005; James T. Flynn, 1996; Jerrold B. Harris, 1999; R. Glenn Hubbard, 2004; W. Carl Kester, 1998 and Karen P. Robards, 1998.


 

 

 

 

 

 

 

 

 

 

 












Interested Directors3

 

 

 

 

 

 

 

 

 

 












Richard S. Davis
40 East 52nd Street
New York, NY 10022
1945

 

Director

 

Since 2007

 

Managing Director, BlackRock, Inc. since 2005; Formerly Chief Executive Officer, State Street Research & Management Company from 2000 to 2005; Formerly Chairman of the Board of Trustees, State Street Research Mutual Funds from 2000 to 2005; Formerly Chairman, SSR Realty from 2000 to 2004.

 

175 Funds
285 Portfolios

 

None












Henry Gabbay
40 East 52nd Street
New York, NY 10022
1947

 

Director

 

Since 2007

 

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

 

175 Funds
285 Portfolios

 

None


 

 



3

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


 

 

 

 

 

 

 

Effective January 1, 2009, Robert S. Salomon, Jr. retired as Director of the Funds. The Board wishes Mr. Salomon well in his retirement.

 

 

 

 


 

 

 




ANNUAL REPORT

APRIL 30, 2009

43



 


 

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








Fund Officers1

 

 

 

 

 

 








Donald C. Burke
40 East 52nd Street
New York, NY 10022
1960

 

President
and Chief
Executive
Officer

 

Since 2007

 

Managing Director of BlackRock, Inc. since 2006; Formerly Managing Director of Merrill Lynch Investment Managers, L.P. (“MLIM”) and Fund Asset Management, L.P. (“FAM”) in 2006, First Vice President thereof from 1997 to 2005, Treasurer thereof from 1999 to 2006 and Vice President thereof from 1990 to 1997.








Anne F. Ackerley
40 East 52nd Street
New York, NY 10022
1962

 

Vice
President

 

Since 2007

 

Managing Director of BlackRock, Inc. since 2000; Chief Operating Officer of BlackRock’s U.S. Retail Group since 2006; Formerly Head of BlackRock’s Mutual Fund Group from 2000 to 2006.








Neal J. Andrews
40 East 52nd Street
New York, NY 10022
1966

 

Chief
Financial
Officer

 

Since 2007

 

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








Jay M. Fife
40 East 52nd Street
New York, NY 10022
1970

 

Treasurer

 

Since 2007

 

Managing Director of BlackRock, Inc. since 2007 and Director in 2006; Formerly Assistant Treasurer of the MLIM/FAM-advised Funds from 2005 to 2006; Director of MLIM Fund Services Group from 2001 to 2006.








Brian P. Kindelan
40 East 52nd Street
New York, NY 10022
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; Formerly Director and Senior Counsel of BlackRock Advisors, Inc. from 2001 to 2004.








Howard B. Surloff
40 East 52nd Street
New York, NY 10022
1965

 

Secretary

 

Since 2007

 

Managing Director of BlackRock, Inc. and General Counsel of U.S. Funds at BlackRock, Inc. since 2006; Formerly General Counsel (U.S.) 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.


 


Accounting Agent
State Street Bank and
Trust Company
Princeton, NJ 08540

Custodian

The Bank of New York Mellon2
New York, NY 10286

State Street Bank and Trust Company3
Boston, MA 02101

Funds Address

BlackRock Closed-End Funds
c/o BlackRock Advisors, LLC
100 Bellevue Parkway

Wilmington, DE 19809

 

Independent Registered Public
Accounting Firm
Deloitte & Touche LLP
Princeton, NJ 08540

 

Legal Counsel
Skadden, Arps, Slate, Meagher & Flom LLP
New York, NY 10036

Transfer Agent and Auction Agent2
Common Shares and Preferred Shares:
BNY Mellon Shareowner Services
Jersey City, NJ 07310

Transfer Agent3
Common Shares:
Computershare Trust Company, N.A.
Providence, RI 02940

Auction Agent3
Preferred Shares:
BNY Mellon Shareowner Services
Jersey City, NJ 07310


 

 

2

For BlackRock MuniYield Fund, Inc. and BlackRock MuniYield Quality Fund II, Inc.

 

 

3

For BlackRock MuniYield Quality Fund, Inc.


 

 

 




44

ANNUAL REPORT

APRIL 30, 2009



 


 

Additional Information

 


Dividend Policy


The Funds dividend policy is to distribute all or a portion of their net investment income to their shareholders on a monthly basis. In order to provide shareholders with a more stable level of dividend distributions, the Funds may at times pay out less than the entire amount of net investment income earned in any particular month and may at times in any particular month pay out such accumulated but undistributed income in addition to net investment income earned in that month. As a result, the dividends paid by the Funds for any particular month may be more or less than the amount of net investment income earned by the Funds during such month. The Funds’ current accumulated but undistributed net investment income, if any, is disclosed in the Statement of Assets and Liabilities, which comprises part of the financial information included in this report.

 


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. Each Fund filed with the Securities and Exchange Commission (“SEC”) the certification of their chief executive officer and chief financial officer required by section 302 of the Sarbanes-Oxley Act.

 


Section 19 Notices


The amounts and sources of distributions reported are only estimates and are not being provided for tax reporting purposes. The actual amounts and sources for tax reporting purposes will depend upon each Fund’s investment experience during the year and may be subject to changes based on the tax regulations. Each Fund will send you a Form 1099-DIV each calendar year that will tell you how to report these distributions for federal income tax purposes.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



























 

 

Total Fiscal Year-to-Date
Cumulative Distributions by Character

 

Percentage of Fiscal Year-to-Date
Cumulative Distributions by Character

 

 

 


 


 

 

 

Net
Investment
Income

 

Net
Realized
Capital
Gains

 

Return
of
Capital

 

Total Per
Common
Share

 

Net
Investment
Income

 

Net
Realized
Capital
Gains

 

Return
of
Capital

 

Total Per
Common
Share

 



















BlackRock MuniYield Fund, Inc.

 

$0.387

 

 

 

$0.387

 

100%

 

0%

 

0%

 

100%

 




























 

 

 




ANNUAL REPORT

APRIL 30, 2009

45



 


 

Additional Information (continued)

 


General Information


The Funds do not make available copies of their Statements of Additional Information because the Funds’ shares are not continuously offered, which means that the Statement of Additional Information of each Fund has not been updated after completion of the respective Fund’s offerings and the information contained in each Fund’s Statement of Additional Information may have become outdated.

During the period, there were no material changes in the Funds’ investment objectives or policies or to the Funds’ charters or by-laws that were not approved by the shareholders or in the principal risk factors associated with investment in the Funds. There have been no changes in the persons who are primarily responsible for the day-to-day management of the Funds’ portfolio.

Quarterly performance, semi-annual and annual reports and other information regarding the Funds may be found on BlackRock’s website, which can be accessed at http://www.blackrock.com. This reference to BlackRock’s website is intended to allow investors public access to information regarding the Funds and does not, and is not intended to, incorporate BlackRock’s website into this report.

Electronic Delivery

Electronic copies of most financial reports are available on the Funds’ websites or shareholders can sign up for e-mail notifications of quarterly statements, annual and semi-annual reports by enrolling in the Funds’ electronic delivery program.

Shareholders Who Hold Accounts with Investment Advisors, Banks or Brokerages:

Please contact your financial advisor to enroll. Please note that not all investment advisors, banks or brokerages may offer this service.

Householding

The Funds will mail only one copy of shareholder documents, including annual and semi-annual reports and proxy statements, to shareholders with multiple accounts at the same address. This practice is commonly called “householding” and it 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 contact the Funds at (800) 441-7762.

Availability of Quarterly Schedule of Investments

Each Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the SEC’s website at http://www.sec.gov and may also be reviewed and copied at the SEC’s Public Reference Room in Washington, 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 toll-free (800) 441-7762; (2) at www.blackrock.com; and (3) on the Securities and Exchange Commission’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 www.blackrock.com or by calling (800) 441-7762 and (2) on the Securities and Exchange Commission’s website at http://www.sec.gov.

 

 

 




46

ANNUAL REPORT

APRIL 30, 2009



 


 

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

APRIL 30, 2009

47



(GO PAPERLESS LOGO)

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. Leverage 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 affect the yield to Common Shareholders. Statements and other information herein are as dated and are subject to change.

BlackRock MuniYield Fund, Inc.

BlackRock MuniYield Quality Fund, Inc.

BlackRock MuniYield Quality Fund II, Inc.

(BLACKROCK LOGO)

#MYQII-4/09


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

Frank J. Fabozzi

James T. Flynn

W. Carl Kester

Karen P. Robards

Robert S. Salomon, Jr. (retired effective December 31, 2008)

  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 Quality Fund II, Inc.

$34,800

$33,900

$3,500

$3,500

$6,100

$6,100

$1,028

$1,049

 

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 for all of the registrants the Committee oversees. 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 one or more of its members 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 Quality Fund II, Inc.

$418,128

$415,649


  (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) – $407,500, 0%
   

Item 5 –

Audit Committee of Listed Registrants – The following individuals are members of the registrant’s separately-designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(58)(A)):

 

Kent Dixon

Frank J. Fabozzi

James T. Flynn

W. Carl Kester

Karen P. Robards

Robert S. Salomon, Jr. (retired effective December 31, 2008)

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 April 30, 2009.
   

 

(a)(1)

The registrant (or “Fund”) is managed by a team of investment professionals comprised of Theodore R. Jaeckel, Jr., CFA, Managing Director at BlackRock, Walter O’Connor, Managing Director at BlackRock and Michael A. Kalinoski, Director at BlackRock. Each is a member of BlackRock’s municipal tax-exempt management group. Each is jointly responsible for the day-to-day management of the registrant’s portfolio, which includes setting the registrant’s overall investment strategy, overseeing the management of the registrant and/or selection of its investments. Messrs. Jaeckel, O’Connor and Kalinoski have been members of the registrant’s portfolio management team since 2006, 2006 and 2000, 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.

Michael A. Kalinoski

Director of BlackRock, Inc. since 2006; Director of MLIM from 1999 to 2006.

 

 

(a)(2)

As of April 30, 2009:

 

(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.

76

0

0

0

0

0

 

$17.19 Billion

$0

$0

$0

$0

$0

Walter O’Connor

76

0

0

0

0

0

 

$17.19 Billion

$0

$0

$0

$0

$0

Michael A. Kalinoski

6

0

0

0

0

0

 

$2.66 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 April 30, 2009:

  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.

   
  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 for the Fund 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”) — The LTIP is a long-term incentive plan that seeks to reward certain key employees. Beginning in 2006, awards are granted under the LTIP in the form of BlackRock, Inc. restricted stock units that, if properly vested and subject to the attainment of certain performance goals, will be settled 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, O’Connor and Kalinoski 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.  Messrs. Jaeckel, O’Connor and Kalinoski are eligible to participate in these plans.

   

 

(a)(4)

Beneficial Ownership of Securities – April 30, 2009.    

Portfolio Manager

Dollar Range of Equity Securities Beneficially Owned

Theodore R. Jaeckel, Jr.

None

Walter O’Connor

None

Michael A. Kalinoski

None

   

Item 9 –

Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers – Not Applicable due to no such purchases during the period covered by this report.

   
Item 10 – Submission of Matters to a Vote of Security Holders – The registrant’s Nominating and Governance Committee will consider nominees to the board of directors recommended by shareholders when a vacancy becomes available. Shareholders who wish to recommend a nominee should send nominations that include biographical information and set forth the qualifications of the proposed nominee to the registrant’s Secretary. There have been no material changes to these procedures.
   
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 13(a)-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 Quality Fund II, Inc.
   
 

By:

/s/ Donald C. Burke  
    Donald C. Burke
    Chief Executive Officer of
    BlackRock MuniYield Quality Fund II, Inc.
   
  Date: June 19, 2009
   
  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/ Donald C. Burke  
    Donald C. Burke
    Chief Executive Officer (principal executive officer) of
    BlackRock MuniYield Quality Fund II, Inc.
   
  Date: June 19, 2009
   
 

By:

/s/ Neal J. Andrews  
    Neal J. Andrews
    Chief Financial Officer (principal financial officer) of
    BlackRock MuniYield Quality Fund II, Inc.
   
  Date: June 19, 2009