UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-Q
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT
INVESTMENT COMPANY
Investment Company Act file number 811-7083
Name of Fund: MuniYield Arizona Fund, Inc.
Fund Address: P.O. Box 9011
Princeton, NJ 08543-9011
Name and address of agent for service: Terry K. Glenn, President,
MuniYield Arizona Fund, 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: (609) 282-2800
Date of fiscal year end: 10/31/04
Date of reporting period: 05/01/04 - 07/31/04
Item 1 - Schedule of Investments
MuniYield Arizona Fund, Inc.
Schedule of Investments as of July 31, 2004 (in Thousands)
S&P Moody's Face
Ratings Ratings Amount Municipal Bonds Value
Arizona - 122.6%
NR* NR* $1,650 Arizona Educational Loan Marketing Corporation, Educational Loan Revenue
Refunding Bonds, AMT, Junior Sub-Series, 6.30% due 12/01/2008 $ 1,685
Arizona Health Facilities Authority, Hospital System Revenue Bonds (John C.
Lincoln Health Network):
BBB NR* 500 6.875% due 12/01/2020 542
BBB NR* 625 7% due 12/01/2025 669
BBB+ Baa1 1,785 Arizona Health Facilities Authority Revenue Bonds (Catholic Healthcare West),
Series A, 6.625% due 7/01/2020 1,947
AAA Aaa 3,000 Arizona School Facilities Board, State School Improvement Revenue Bonds,
5.50% due 7/01/2017 3,310
Arizona State University Revenue Bonds(e):
AAA Aaa 1,500 5.75% due 7/01/2027 1,620
AAA NR* 4,335 DRIVERS, Series 270, 9.641% due 7/01/2021(l) 5,119
Arizona Student Loan Acquisition Authority, Student Loan Revenue Refunding
Bonds, AMT:
NR* A2 3,285 Junior Subordinated Series B-1, 6.15% due 5/01/2029 3,483
NR* Aaa 1,000 Senior-Series A-1, 5.90% due 5/01/2024 1,052
Arizona Tourism and Sports Authority, Tax Revenue Bonds:
NR* Baa1 1,000 (Baseball Training Facilities Project), 5% due 7/01/2016 1,014
NR* Aaa 2,000 (Multi-Purpose Stadium Facility), Series A, 5.375% due 7/01/2023(b) 2,127
AAA NR* 500 Glendale, Arizona, Development Authority, Educational Facilities Revenue
Refunding Bonds (American Graduate School International), 5.875% due
7/01/2015(c) 533
BBB Baa1 2,405 Maricopa County, Arizona, Hospital Revenue Refunding Bonds (Sun Health
Corporation), 6.125% due 4/01/2018 2,499
AAA Aaa 2,400 Maricopa County, Arizona, IDA, Hospital Facility Revenue Refunding Bonds
(Samaritan Health Services), Series A, 7% due 12/01/2016(b)(d) 2,987
Maricopa County, Arizona, IDA, M/F Housing Revenue Bonds:
AAA Aaa 1,000 (Metro Gardens - Mesa Ridge Apartments Project), Series 1999A, 5.15% due
7/01/2029(b) 1,005
AAA NR* 2,395 (Place Five and Greenery Apartments), Series A, 6.625% due 1/01/2027(d) 2,723
Portfolio Abbreviations
To simplify the listings of MuniYield Arizona Fund, Inc.'s portfolio
holdings in the Schedule of Investments, we have abbreviated the
names of many of the securities according to the list below.
AMT Alternative Minimum Tax (subject to)
DRIVERS Derivative Inverse Tax-Exempt Receipts
GO General Obligation Bonds
IDA Industrial Development Authority
IDR Industrial Development Revenue Bonds
M/F Multi-Family
PCR Pollution Control Revenue Bonds
RIB Residual Interest Bonds
RITR Residual Interest Trust Receipts
S/F Single-Family
MuniYield Arizona Fund, Inc.
Schedule of Investments as of July 31, 2004 (concluded) (in Thousands)
S&P Moody's Face
Ratings Ratings Amount Municipal Bonds Value
Arizona (concluded)
AAA NR* $ 955 Maricopa County, Arizona, IDA, S/F Mortgage Revenue Bonds, AMT, Series 1B,
6.25% due 9/01/2032(f)(i) $ 973
Maricopa County, Arizona, Pollution Control Corporation, PCR, Refunding,
Series A:
BB+ Ba1 1,000 (El Paso Electric Company Project), 6.25% due 5/01/2037 1,031
BBB Baa2 500 (Public Service Company of New Mexico Project), 5.75% due 11/01/2022 503
BBB Baa2 1,485 (Public Service Company of New Mexico Project), 6.30% due 12/01/2026 1,547
AAA NR* 2,250 Maricopa County, Arizona, Public Finance Corporation, Lease Revenue Bonds,
RIB, Series 511X, 9.64% due 7/01/2014(a)(l) 2,725
AA Aa2 1,825 Maricopa County, Arizona, Scottsdale Unified School District Number 48, GO,
6.60% due 7/01/2012 2,196
AAA Aaa 500 Maricopa County, Arizona, Tempe Elementary Unified School District Number 3,
GO, Refunding, 7.50% due 7/01/2010(e) 610
NR* Baa2 1,000 Maricopa County, Arizona, Unified School District Number 090, School
Improvement, GO (Saddle Mountain), Series A, 5% due 7/01/2014 1,030
Mesa, Arizona, IDA, Revenue Bonds (Discovery Health Systems), Series A(b):
AAA Aaa 1,000 5.875% due 1/01/2014 1,118
AAA Aaa 1,500 5.625% due 1/01/2015 1,648
AAA Aaa 1,000 Mesa, Arizona, Utility System Revenue Bonds, 6.125% due 7/01/2007(e)(k) 1,115
NR* NR* 1,000 Navajo County, Arizona, IDA, IDR (Stone Container Corporation Project), AMT,
7.40% due 4/01/2026 1,006
AAA Aaa 4,500 Northern Arizona University System Revenue Bonds, 5.50% due 6/01/2034(e) 4,774
AAA Aaa 2,500 Phoenix, Arizona, Civic Improvement Corporation, Water System Revenue
Refunding Bonds, Junior Lien, 5.50% due 7/01/2020(e) 2,719
AA+ NR* 1,750 Phoenix, Arizona, GO, Refunding, DRIVERS, Series 173, 13.62% due
7/01/2008(l) 2,352
NR* Aaa 2,500 Phoenix, Arizona, IDA, Revenue Bonds (Camelback Crossing), 6.35% due
9/20/2035(i) 2,674
AAA NR* 775 Phoenix, Arizona, IDA, S/F Mortgage Revenue Bonds, AMT, Series 1A, 6.25%
due 9/01/2032(f)(i) 790
Pima County, Arizona, IDA, Education Revenue Bonds (Arizona Charter Schools
Project), Series C:
NR* Baa3 750 6.70% due 7/01/2021 767
NR* Baa3 1,000 6.75% due 7/01/2031 1,014
AAA Aaa 1,000 Pima County, Arizona, IDA, Revenue Refunding Bonds (Health Partners), Series
A, 5.625% due 4/01/2014(b) 1,090
AAA NR* 705 Pima County, Arizona, IDA, S/F Mortgage Revenue Refunding Bonds, AMT, Series
A-1, 6.20% due 11/01/2030(f)(g) 743
AAA Aaa 3,050 Pima County, Arizona, Unified School District Number 1, Tucson, GO,
Refunding, 7.50% due 7/01/2009(e) 3,651
AAA Aaa 1,000 Scottsdale, Arizona, GO, 6.25% due 7/01/2009(k) 1,149
BBB+ A3 2,250 Scottsdale, Arizona, IDA, Hospital Revenue Bonds (Scottsdale Healthcare),
5.80% due 12/01/2031 2,270
AAA Aaa 1,500 South Campus Group LLC, Arizona, Student Housing Revenue Bonds (Arizona State
University South Campus Project), Series 2003, 5.625% due 9/01/2035(b) 1,598
Tucson and Pima County, Arizona, IDA, S/F Mortgage Revenue Refunding Bonds
(Mortgage-Backed Securities Program), AMT, Series A-1(g):
AAA NR* 1,025 6% due 7/01/2021(f) 1,043
AAA NR* 420 6.20% due 1/01/2034 425
AA NR* 1,500 Tucson, Arizona, IDA, Senior Living Facilities Revenue Bonds (Christian Care
Tucson Inc. Project), Series A, 6.125% due 7/01/2024(j) 1,643
NR* NR* 1,000 Vistancia, Arizona, Community Facilities District, GO, 6.75% due 7/15/2022 1,020
NR* Baa2 2,000 Yavapai County, Arizona, IDA, Hospital Facility Revenue Bonds (Yavapai
Regional Medical Center), Series A, 6% due 8/01/2033 2,018
Puerto Rico - 18.5%
AAA Aaa 500 Puerto Rico Commonwealth, GO, Refunding, RITR, Class R, Series 3, 10.09% due
7/01/2016(b)(l) 629
Puerto Rico Commonwealth, Highway and Transportation Authority,
Transportation Revenue Refunding Bonds:
A Baa1 1,000 Series D, 5.75% due 7/01/2041 1,056
A Aaa 1,000 Series J, 5.50% due 7/01/2023 1,061
Puerto Rico Electric Power Authority, Power Revenue Bonds:
A- A3 1,000 Series NN, 5.125% due 7/01/2024 1,014
A- A3 1,500 Series NN, 5.125% due 7/01/2029 1,502
AAA Aaa 695 Trust Receipts, Class R, Series 16 HH, 10.07% due 7/01/2013(h)(l) 893
NR* Aaa 750 Puerto Rico Electric Power Authority, Power Revenue Refunding Bonds, RIB, 825
Series 449X, 9.69% due 7/01/2016(a)(l)
NR* Baa3 2,000 Puerto Rico Industrial, Tourist, Educational, Medical and Environmental Control
Facilities Revenue Bonds (Cogeneration Facility-AES Puerto Rico Project), AMT,
6.625% due 6/01/2026 2,075
A- Baa1 2,000 Puerto Rico Public Buildings Authority, Government Facilities Revenue Refunding
Bonds, Series I, 5.25% due 7/01/2033 2,018
BBB+ Baa2 835 Puerto Rico Public Finance Corporation Revenue Bonds, Commonwealth
Appropriation, Series E, 5.70% due 2/01/2010(k) 942
Virgin Islands - 1.8%
BBB NR* 1,000 Virgin Islands Public Finance Authority, Revenue Refunding Bonds (Gross
Receipts Taxes Loan Note), Series A, 6.375% due 10/01/2019 1,118
Total Municipal Bonds (Cost - $88,161) - 142.9% 92,690
Shares
Held Short-Term Securities
1,712 CMA Arizona Municipal Money Fund(m) 1,712
Total Short-Term Securities (Cost - $1,712) - 2.6% 1,712
Total Investments (Cost - $89,873**) - 145.5% 94,402
Other Assets Less Liabilities - 1.2% 789
Preferred Stock, at Redemption Value - (46.7%) (30,301)
----------
Net Assets Applicable to Common Stock - 100.0% $ 64,890
==========
(a) AMBAC Insured.
(b) MBIA Insured.
(c) Connie Lee Insured.
(d) Escrowed to maturity.
(e) FGIC Insured.
(f) FHLMC Collateralized.
(g) FNMA/GNMA Collateralized.
(h) FSA Insured.
(i) GNMA Collateralized.
(j) Radian Insured.
(k) Prerefunded.
(l) The interest rate is subject to change periodically and
inversely based upon prevailing market rates. The interest rate
shown is the rate in effect at July 31, 2004.
(m) Investments in companies considered to be an affiliate of the
Fund (such companies are defined as "Affiliated Companies" in
Section 2(a)(3) of the Investment Company Act of 1940) were as
follows:
(in Thousands)
Net Dividend
Affiliate Activity Income
CMA Arizona Municipal Money Fund 910 $ 6
* Not Rated.
** The cost and unrealized appreciation/depreciation of investments
as of July 31, 2004, as computed for federal income tax purposes,
were as follows:
(in Thousands)
Aggregate cost $ 89,882
===========
Gross unrealized appreciation $ 4,760
Gross unrealized depreciation (240)
-----------
Net unrealized appreciation $ 4,520
===========
Item 2 - Controls and Procedures
2(a) - The registrant's certifying officers have reasonably designed
such disclosure controls and procedures to ensure material
information relating to the registrant is made known to us by others
particularly during the period in which this report is being
prepared. The registrant's certifying officers have determined that
the registrant's disclosure controls and procedures are effective
based on our evaluation of these controls and procedures as of a
date within 90 days prior to the filing date of this report.
2(b) - There were no changes in the registrant's internal control
over financial reporting (as defined in Rule 30a-3(d) under the Act
(17 CFR 270.30a-3(d)) that occurred during the last fiscal quarter
of the period covered by this report that has materially affected,
or is reasonably likely to materially affect, the registrant's
internal control over financial reporting.
Item 3 - Exhibits
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.
MuniYield Arizona Fund, Inc.
By: _/s/ Terry K. Glenn________
Terry K. Glenn,
President of
MuniYield Arizona Fund, Inc.
Date: September 17, 2004
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/ Terry K. Glenn________
Terry K. Glenn,
President of
MuniYield Arizona Fund, Inc.
Date: September 17, 2004
By: _/s/ Donald C. Burke________
Donald C. Burke,
Chief Financial Officer of
MuniYield Arizona Fund, Inc.
Date: September 17, 2004