MUNIHOLDINGS
CALIFORNIA
INSURED
FUND, INC.
[GRAPHIC OMITTED]
STRATEGIC
Performance
Annual Report
June 30, 2000
<PAGE>
MuniHoldings California Insured Fund, Inc.
The Benefits and Risks of Leveraging
MuniHoldings California Insured Fund, Inc. utilizes leverage to seek to enhance
the yield and net asset value of its Common Stock. However, these objectives
cannot be achieved in all interest rate environments. To leverage, the Fund
issues Preferred Stock, which pays dividends at prevailing short-term interest
rates, and invests the proceeds in long-term municipal bonds. The interest
earned on these investments is paid to Common Stock shareholders in the form of
dividends, and the value of these portfolio holdings is reflected in the per
share net asset value of the Fund's Common Stock. However, in order to benefit
Common Stock shareholders, the yield curve must be positively sloped; that is,
short-term interest rates must be lower than long-term interest rates. At the
same time, a period of generally declining interest rates will benefit Common
Stock shareholders. If either of these conditions change, then the risks of
leveraging will begin to outweigh the benefits.
To illustrate these concepts, assume a fund's Common Stock capitalization of
$100 million and the issuance of Preferred Stock 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 approximately 3%
and long-term interest rates are approximately 6%, the yield curve has a
strongly positive slope. The fund pays dividends on the $50 million of Preferred
Stock 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. Of course, increases in short-term interest rates would reduce (and even
eliminate) the dividends on the Common Stock.
In this case, the dividends paid to Preferred Stock shareholders are
significantly lower than the income earned on the fund's long-term investments,
and therefore the Common Stock shareholders are the beneficiaries of the
incremental yield. However, if short-term interest rates rise, narrowing the
differential between short-term and long-term interest rates, the incremental
yield pickup on the Common Stock will be reduced or eliminated completely. At
the same time, the market value of the fund's Common Stock (that is, its price
as listed on the New York Stock Exchange) may, as a result, decline.
Furthermore, if long-term interest rates rise, the Common Stock's net asset
value will reflect the full decline in the price of the portfolio's investments,
since the value of the fund's Preferred Stock does not fluctuate. In addition to
the decline in net asset value, the market value of the fund's Common Stock may
also decline.
As a part of its investment strategy, the Fund may invest in certain securities
whose potential income return is inversely related to changes in a floating
interest rate ("inverse floaters"). In general, income on inverse floaters will
decrease when short-term interest rates increase and increase when short-term
interest rates decrease. Investments in inverse floaters may be characterized as
derivative securities and may subject the Fund to the risks of reduced or
eliminated interest payments and losses of invested principal. In addition,
inverse floaters have the effect of providing investment leverage and, as a
result, the market value of such securities will generally be more volatile than
that of fixed rate, tax-exempt securities. To the extent the Fund invests in
inverse floaters, the market value of the Fund's portfolio and the net asset
value of the Fund's shares may also be more volatile than if the Fund did not
invest in these securities.
<PAGE>
MuniHoldings California Insured Fund, Inc., June 30, 2000
DEAR SHAREHOLDER
We are pleased to provide this annual report to shareholders. As a result of the
Fund's recent reorganization, the Fund has changed its name from MuniHoldings
California Insured Fund II, Inc. to MuniHoldings California Insured Fund, Inc.
For complete information about the Fund's reorganization, see Note 6 on pages 19
and 20 of this report to shareholders.
For the year ended June 30, 2000, the Common Stock of MuniHoldings California
Insured Fund, Inc. earned $0.808 per share income dividends, which included
earned and unpaid dividends of $0.062. This represents a net annualized yield of
6.07%, based on a month-end net asset value of $13.31 per share. Over the same
period, the Fund's Common Stock had a total investment return of -1.23%, based
on a change in per share net asset value from $14.38 to $13.31, and assuming
reinvestment of $0.815 per share income dividends.
For the six-month period ended June 30, 2000, the Fund's Common Stock had a
total investment return of +10.03%, based on a change in per share net asset
value from $12.49 to $13.31, and assuming reinvestment of $0.395 per share
income dividends.
For the year ended June 30, 2000, the Fund's Preferred Stock had an average
yield as follows: Series A, 3.76%; Series B, 3.47%; Series C, 3.54%; Series D,
3.59%; and Series E, 3.91%.
The Municipal Market Environment
At the start of the year, fixed-income bond yields were initially pushed higher
as US economic growth remained robust. After growing at a 7.3% rate during the
fourth quarter of 1999 and a 4.2% annual rate for all of 1999, first quarter of
2000 gross domestic product growth was 5.5%. However, despite these significant
growth rates, few price measures showed any meaningful signs of future price
pressures at the consumer level, despite the lowest unemployment rates since
January 1970 and rising energy prices. With few signs of any economic slowdown,
the Federal Reserve Board continued to raise short-term interest rates in
February, March and May 2000. The Federal Reserve Board cited both the continued
growth of US employment and the continued strength of US equity markets as
reasons for attempting to moderate US economic growth before inflationary price
increases can be realized. By late January 2000, US Treasury bond yields rose
more than 25 basis points (0.25%) to 6.75%. Similarly, as measured by the Bond
Buyer Revenue Bond Index, long-term, tax-exempt bond yields rose approximately
15 basis points to 6.35%.
Since then, however, fixed-income markets have largely ignored strong economic
fundamentals and concentrated upon very positive technical supply factors.
Declining bond issuance--both current, and more importantly, expected future
issuance--helped push bond yields lower from late-January to mid-April 2000. In
late January and early February 2000, the US Treasury announced its intention to
reduce the amounts to be auctioned in quarterly Treasury note and bond auctions.
Furthermore, budgetary surpluses allowed the US Treasury to repurchase
outstanding, higher-couponed Treasury issues, primarily in the 15-year and
longer maturity sector. Both of these actions resulted in a significant
reduction in the outstanding supply of longer-dated maturity US Treasury debt.
Domestic and international investors quickly began to accumulate what was
expected to become a scarce commodity and bond prices quickly rose.
By mid-April 2000, US Treasury bond yields had declined more than 100 basis
points to 5.67%. However, bond yields rose somewhat during the remainder of the
period as economic statistics were released indicating that the economic
strength seen in late 1999 was continuing into early 2000. The domestic decline
in long-term US Treasury yields resulted in an inverted yield curve as
short-term and intermediate-term interest rates did not fall proportionately to
long-term interest rates as the Federal Reserve Board was expected to continue
to raise short-term interest rates. The current inversion has had much more to
do with debt reduction and Treasury buy-backs than with market expectations of
slower economic growth. During the last six months, long-term US Treasury bond
yields have fallen almost 60 basis points to end the period at 5.90%.
Tax-exempt bond yields also have declined in recent months. The decline has
largely been in response to the rally in US Treasury securities, as well as a
continued positive technical supply environment. States such as California and
Maryland have announced that their large current and anticipated future budget
surpluses will permit the cancellation or postponement of expected bond
issuance. Additionally, some issuers have initiated tenders to repurchase
existing debt, reducing the supply of tax-exempt bonds in the secondary market
as well. Since their recent peak in January 2000, long-term municipal bond
yields have declined more than 30 basis points to finish the six-month period
ended June 30, 2000 at 5.90%.
The relative underperformance of the municipal bond market in recent months has
been especially disappointing given the strong technical position the tax-exempt
bond market has enjoyed. The issuance of long-term, tax-exempt securities has
dramatically declined. During the last year, $199 billion in new long-term
municipal securities was issued, a decline of almost 20% versus the same period
a year earlier. For the six months ended June 30, 2000, approximately $90
billion in new tax-exempt bonds was underwritten, a decline of more than 20%
compared to the same period in 1999.
Although investors received over $30 billion in coupon payments, bond maturities
and the proceeds from early bond redemptions during January and February, and
expect to receive a similar amount on June 1 and July 1, 2000, along with the
highest municipal bond yields in three years, overall investor demand has
diminished. Long-term municipal bond mutual funds have seen consistent outflows
in recent months as the yields of individual securities have risen faster than
those of larger, more diverse mutual funds. Thus far this year, tax-exempt
mutual funds have had net redemptions of more than $12 billion. Also, the demand
from property and casualty insurance companies has weakened as a result of the
losses incurred from a series of damaging storms across much of the eastern
United States. Additionally, many institutional investors who have in recent
years been drawn to the municipal bond market by historically attractive
tax-exempt bond yield ratios of more than 90% have found other asset classes
even more compelling. Even with a favorable supply position, tax-exempt
municipal bond yields have underperformed their taxable counterparts.
Significantly lower municipal bond yields are still likely to require weaker US
employment growth and consumer spending. The actions taken in recent months by
the Federal Reserve Board, as well as the expected action in August 2000, will
eventually slow US economic growth. Recent declines in US new home sales are
perhaps among the first signs that consumer spending is being slowed by higher
interest rates. Until further signs develop, it is likely that the municipal
bond market's current favorable technical position will dampen significant
tax-exempt interest rate volatility and provide a stable environment for
eventual improvement in municipal bond prices.
Portfolio Strategy
MuniHoldings California Insured Fund, Inc. has been structured to seek to
deliver a high current return of tax-exempt income to California residents by
maintaining a fully invested and leveraged position. The effects of leverage
benefited the Fund's Common Stock yield because of the positive slope of the
municipal yield curve. However, should the spread between long-term and
short-term interest rates narrow, the benefits of leverage will decline and the
yield on the Fund's Common Stock will decline. (For a complete explanation of
the benefits and risks of leveraging, see page 1 of this report to
shareholders.) Our primary investment strategy has been to increase the average
level of couponing in the Fund, while taking advantage of a relatively flat
municipal yield curve to shorten average maturity. During periods of rising
interest rates, primary issuance provides us with opportunities to restructure
the Fund. These holdings can provide a higher current yield with less exposure
to the longer maturity range of the municipal marketplace. However, credit
quality has been one of our primary concerns. We are purposely underutilizing
the portion of assets that can be committed to uninsured securities. This helped
the Fund's performance during the recent period of widening credit quality
spreads. We expect to continue the process of raising average coupon structure
and reducing duration in an effort to temper the Fund's volatility and exposure
to long-term interest rate swings.
In Conclusion
We appreciate your ongoing interest in MuniHoldings California Insured Fund,
Inc., and we look forward to assisting you with your financial needs in the
months and years ahead.
Sincerely,
/s/ Terry K. Glenn
Terry K. Glenn
President and Director
/s/ Vincent R. Giordano
Vincent R. Giordano
Senior Vice President
/s/ Walter C. O'Connor
Walter C. O'Connor
Vice President and Portfolio Manager
August 1, 2000
2 & 3
<PAGE>
MuniHoldings California Insured Fund, Inc., June 30, 2000
PROXY RESULTS
During the six-month period ended June 30, 2000, MuniHoldings California Insured
Fund II, Inc.'s Common Stock shareholders voted on the following proposal. The
proposal was approved at a shareholders' meeting on February 16, 2000. A
description of the proposal and number of shares voted are as follows:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
Shares Voted Shares Voted Shares Voted
For Against Abstain
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. To approve the Agreement and Plan of Reorganization among
the Fund, MuniHoldings California Insured Fund, Inc.,
MuniHoldings California Insured Fund III, Inc. and
MuniHoldings California Insured Fund IV, Inc. 5,128,504 146,130 386,203
------------------------------------------------------------------------------------------------------------
</TABLE>
During the six-month period ended June 30, 2000, MuniHoldings California Insured
Fund II, Inc.'s Preferred Stock (Series A and B) shareholders voted on the
following proposal. The proposal was approved at a shareholders' meeting on
February 16, 2000. A description of the proposal and number of shares voted are
as follows:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
Shares Voted Shares Voted Shares Voted
For Against Abstain
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. To approve the Agreement and Plan of
Reorganization among the Fund, MuniHoldings
California Insured Fund, Inc., MuniHoldings
California Insured Fund III, Inc. and
MuniHoldings California Insured Fund IV, Inc.: Series A 1,561 143 5
Series B 1,791 27 27
------------------------------------------------------------------------------------------------------------
</TABLE>
The Funds listed below are the Funds acquired in the reorganization of the Fund
at a shareholders' meeting on March 6, 2000.
During the six-month period ended June 30, 2000, MuniHoldings California Insured
Fund, Inc.'s Common Stock shareholders voted on the following proposal. The
proposal was approved at a shareholders' meeting on January 20, 2000. A
description of the proposal and number of shares voted are as follows:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
Shares Voted Shares Voted Shares Voted
For Against Abstain
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. To approve the Agreement and Plan of Reorganization among
the Fund, MuniHoldings California Insured Fund II, Inc.,
MuniHoldings California Insured Fund III, Inc. and
MuniHoldings California Insured Fund IV, Inc. 4,394,208 84,349 203,032
------------------------------------------------------------------------------------------------------------
</TABLE>
During the six-month period ended June 30, 2000, MuniHoldings California Insured
Fund, Inc.'s Preferred Stock (Series A and B) shareholders voted on the
following proposal. The proposal was approved at a shareholders' meeting on
February 16, 2000. A description of the proposal and number of shares voted are
as follows:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
Shares Voted Shares Voted Shares Voted
For Against Abstain
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. To approve the Agreement and Plan of
Reorganization among the Fund, MuniHoldings
California Insured Fund II, Inc., MuniHoldings
California Insured Fund III, Inc. and
MuniHoldings California Insured Fund IV, Inc.: Series A 1,501 0 60
Series B 1,379 21 69
------------------------------------------------------------------------------------------------------------
</TABLE>
During the six-month period ended June 30, 2000, MuniHoldings California Insured
Fund III, Inc.'s Common Stock shareholders voted on the following proposal. The
proposal was approved at a shareholders' meeting on February 16, 2000. A
description of the proposal and number of shares voted are as follows:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
Shares Voted Shares Voted Shares Voted
For Against Abstain
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. To approve the Agreement and Plan of Reorganization among
the Fund, MuniHoldings California Insured Fund, Inc.,
MuniHoldings California Insured Fund II, Inc. and
MuniHoldings California Insured Fund IV, Inc. 3,780,142 91,296 3,618,724
------------------------------------------------------------------------------------------------------------
</TABLE>
During the six-month period ended June 30, 2000, MuniHoldings California Insured
Fund III, Inc.'s Preferred Stock (Series A and B) shareholders voted on the
following proposal. The proposal was approved at a shareholders' meeting on
February 16, 2000. A description of the proposal and number of shares voted are
as follows:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
Shares Voted Shares Voted Shares Voted
For Against Abstain
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. To approve the Agreement and Plan of
Reorganization among the Fund, MuniHoldings
California Insured Fund, Inc., MuniHoldings
California Insured Fund II, Inc. and
MuniHoldings California Insured Fund IV, Inc.: Series A 1,009 15 407
Series B 882 21 399
------------------------------------------------------------------------------------------------------------
</TABLE>
During the six-month period ended June 30, 2000, MuniHoldings California Insured
Fund IV, Inc.'s Common Stock shareholders voted on the following proposal. The
proposal was approved at a shareholders' meeting on February 16, 2000. A
description of the proposal and number of shares voted are as follows:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
Shares Voted Shares Voted Shares Voted
For Against Abstain
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. To approve the Agreement and Plan of Reorganization among
the Fund, MuniHoldings California Insured Fund, Inc.,
MuniHoldings California Insured Fund II, Inc. and
MuniHoldings California Insured Fund III, Inc. 5,054,613 114,890 4,729,207
------------------------------------------------------------------------------------------------------------
</TABLE>
During the six-month period ended June 30, 2000, MuniHoldings California Insured
Fund IV, Inc.'s Preferred Stock (Series A and B) shareholders voted on the
following proposal. The proposal was approved at a shareholders' meeting on
February 16, 2000. A description of the proposal and number of shares voted are
as follows:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
Shares Voted Shares Voted Shares Voted
For Against Abstain
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. To approve the Agreement and Plan of
Reorganization among the Fund, MuniHoldings
California Insured Fund, Inc., MuniHoldings
California Insured Fund II, Inc. and
MuniHoldings California Insured Fund III, Inc.: Series A 1,683 27 0
Series B 1,815 0 0
------------------------------------------------------------------------------------------------------------
</TABLE>
4 & 5
<PAGE>
MuniHoldings California Insured Fund, Inc., June 30, 2000
SCHEDULE OF INVESTMENTS (in Thousands)
<TABLE>
<CAPTION>
S&P Moody's Face
STATE Ratings Ratings Amount Issue Value
======================================================================================================================
<C> <C> <C> <C> <S> <C>
California--97.5% AAA Aaa $ 3,345 ABC California Unified School District, GO, Series A, 5.625%
due 8/01/2020 (f) $ 3,353
----------------------------------------------------------------------------------------------------------------------
AAA Aaa 4,000 Acalanes, California, Unified High School District, GO, 5.80%
due 8/01/2024 (f) 4,036
----------------------------------------------------------------------------------------------------------------------
Alameda County, California, COP (g):
AAA Aaa 3,600 (Alameda County Medical Center Project), 5.30% due 6/01/2026 3,415
AAA Aaa 4,985 (Financing Project), 6% due 9/01/2021 5,157
----------------------------------------------------------------------------------------------------------------------
AAA Aaa 4,280 Alameda County, California, COP, Refunding (Capital Projects),
5% due 6/01/2022 (a) 3,913
----------------------------------------------------------------------------------------------------------------------
AAA Aaa 4,535 Bakersfield, California, COP, Refunding (Convention Center
Expansion Project), 5.875% due 4/01/2022 (g) 4,601
----------------------------------------------------------------------------------------------------------------------
Berkley, California, Unified School District, GO, Series I (f):
AAA Aaa 1,000 5.75% due 8/01/2019 1,017
AAA Aaa 1,000 5.75% due 8/01/2020 1,012
AAA Aaa 2,520 5.875% due 8/01/2024 2,561
----------------------------------------------------------------------------------------------------------------------
California Educational Facilities Authority, Revenue Refunding
Bonds (g):
AAA Aaa 2,900 (Occidental College), 5.625% due 10/01/2017 2,943
AAA Aaa 2,000 (Occidental College), 5.70% due 10/01/2027 2,000
AAA Aaa 11,500 (University of San Francisco), Series A, 6% due 10/01/2026 11,777
----------------------------------------------------------------------------------------------------------------------
California HFA, Home Mortgage Revenue Bonds:
AAA Aaa 4,125 AMT, Series E, 6.10% due 8/01/2029 (a) 4,156
AAA Aaa 2,000 Series A, 5.85% due 8/01/2016 (d)(g) 2,027
AA- Aa2 5,000 Series D, 5.85% due 8/01/2017 5,081
----------------------------------------------------------------------------------------------------------------------
California HFA, S/F Mortgage Revenue Bonds, AMT (g):
AAA Aaa 3,590 Series A1, Class II, 6% due 8/01/2020 3,616
AAA Aaa 5,810 Series C2, Class II, 5.625% due 8/01/2020 (d) 5,610
----------------------------------------------------------------------------------------------------------------------
California Health Facilities Finance Authority, Revenue
Refunding Bonds:
A1+ VMIG1+ 9,900 (Adventist Hospital), VRDN, Series A, 4.20% due 9/01/2028 (g)(h) 9,900
A1+ VMIG1+ 5,100 (Adventist Hospital), VRDN, Series B, 4.20% due 9/01/2028 (g)(h) 5,100
AAA Aaa 2,500 (Catholic Healthcare West), Series A, 5.75% due 7/01/2015 (a) 2,564
AAA Aaa 2,500 (Catholic Healthcare West), Series A, 6% due 7/01/2025 (g) 2,549
AAA Aaa 4,500 (Children's Hospital), 5.375% due 7/01/2020 (g) 4,332
AAA Aaa 6,500 (Sutter Health), Series A, 5.35% due 8/15/2028 (g) 6,088
----------------------------------------------------------------------------------------------------------------------
California Pollution Control Financing Authority, PCR,
Refunding (Pacific Gas and Electric), VRDN (h):
A1+ NR* 1,100 AMT, Series B, 4.35% due 11/01/2026 1,100
A1+ NR* 100 Series A, 4.20% due 12/01/2018 100
A1+ VMIG1+ 1,300 Series E, 2.75% due 11/01/2026 1,300
A1+ NR* 1,000 Series F, 4.20% due 11/01/2026 1,000
----------------------------------------------------------------------------------------------------------------------
A+ A1 800 California Pollution Control Financing Authority, PCR,
Refunding (Southern California Edison
Company), VRDN, Series D, 4.60% due 2/28/2008 (h) 800
----------------------------------------------------------------------------------------------------------------------
AAA NR* 2,000 California State, GO, 5.50% due 6/01/2025 (c) 1,955
----------------------------------------------------------------------------------------------------------------------
AAA Aaa 5,000 California State, GO, Refunding, 4.25% due 10/01/2026 (g) 3,939
----------------------------------------------------------------------------------------------------------------------
California State Public Works Board, Lease Revenue Bonds (a):
AAA Aaa 4,450 (Department of Corrections), Series A, 5.25% due 1/01/2021 4,241
AAA Aaa 24,370 (Various University of California Projects), Series C,
5.125% due 9/01/2022 22,704
----------------------------------------------------------------------------------------------------------------------
California State Public Works Board, Lease Revenue Refunding
Bonds:
AAA Aaa 5,025 (California State University), Series A, 5.50% due 10/01/2014 (g) 5,135
AAA Aaa 7,500 (Department of Corrections), Series B, 5.625% due 11/01/2019 (g) 7,551
AAA Aaa 5,980 (Department of Corrections), Series B, 5% due 9/01/2021 (g) 5,496
AAA Aaa 2,625 (Various Community College Projects), Series B, 5.625% due
3/01/2019 (a) 2,642
----------------------------------------------------------------------------------------------------------------------
AAA Aaa 3,500 California State Veterans Bonds, GO, Refunding, AMT, Series
BH, 5.50% due 12/01/2024 (f) 3,359
----------------------------------------------------------------------------------------------------------------------
California Statewide Communities Development Authority, COP:
BBB+ Baa1 7,000 (Catholic Healthcare West), 6.50% due 7/01/2020 6,930
NR* VMIG1+ 1,200 (Continuing Care/University Project), VRDN, 4.20% due
11/15/2028 (h) 1,200
AAA Aaa 10,000 (Kaiser Permanente), 5.30% due 12/01/2015 (f) 9,962
AAA Aaa 5,000 (Sutter Health Obligation Group), 6% due 8/15/2025 (g) 5,095
----------------------------------------------------------------------------------------------------------------------
California Statewide Communities Development Authority, COP,
Refunding:
AAA NR* 2,500 (Huntington Memorial Hospital), 5.80% due 7/01/2026 (i) 2,505
AAA NR* 2,035 (San Diego State University Foundation), 5.30% due 3/01/2017 (a) 2,003
----------------------------------------------------------------------------------------------------------------------
AAA Aaa 4,735 Calleguas--Las Virgines, California, Public Financing Authority,
Installment Purchase Revenue Refunding Bonds (Las Virgines
Municipal Water District), 5% due 11/01/2023 (f) 4,310
----------------------------------------------------------------------------------------------------------------------
Capistrano, California, Unified Public Financing Authority,
Special Tax Revenue Refunding Bonds, First Lien, Series A (a):
AAA Aaa 16,770 5.70% due 9/01/2016 17,178
AAA Aaa 10,640 5.70% due 9/01/2020 10,704
----------------------------------------------------------------------------------------------------------------------
AAA Aaa 1,395 Capistrano, California, Unified School District, Community
Facility District, Special Tax Refunding Bonds (Las Flores),
Number 92-1, 5% due 9/01/2023 (g) 1,270
----------------------------------------------------------------------------------------------------------------------
AAA Aaa 8,705 Castaic Lake, California, Water Agency Revenue Bonds, COP
(Water System Improvement Project),5.50% due 8/01/2023 (a) 8,526
----------------------------------------------------------------------------------------------------------------------
AAA Aaa 18,000 Central Coast Water Authority, California, Regional Facilities
Revenue Refunding Bonds (State Water Project), Series A, 5% due
10/01/2022 (a) 16,634
----------------------------------------------------------------------------------------------------------------------
AAA Aaa 2,060 Chaffey Community College District, California, COP, Refunding,
5.20% due 9/01/2023 (g) 1,934
----------------------------------------------------------------------------------------------------------------------
AAA Aaa 6,995 Chino, California, Unified School District, COP, Refunding,
6.125% due 9/01/2026 (f) 7,200
----------------------------------------------------------------------------------------------------------------------
Contra Costa County, California, COP, Refunding:
AAA Aaa 4,570 (Capital Projects Program), 5.25% due 2/01/2021 (a) 4,365
AAA Aaa 3,690 (Merrithew Memorial Hospital Project), 5.50% due 11/01/2022 (g) 3,593
----------------------------------------------------------------------------------------------------------------------
AAA Aaa 6,450 Contra Costa County, California, Public Financing, Lease
Revenue Refunding Bonds (Various Capital Facilities), Series
1999A, 5% due 6/01/2028 (g) 5,798
----------------------------------------------------------------------------------------------------------------------
</TABLE>
Portfolio Abbreviations
To simplify the listings of MuniHoldings California Insured 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 and at right.
AMT Alternative Minimum Tax (subject to)
COP Certificates of Participation
GO General Obligation Bonds
HFA Housing Finance Agency
M/F Multi-Family
PCR Pollution Control Revenue Bonds
RIB Residual Interest Bonds
S/F Single-Family
VRDN Variable Rate Demand Notes
6 & 7
<PAGE>
MuniHoldings California Insured Fund, Inc., June 30, 2000
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<TABLE>
<CAPTION>
S&P Moody's Face
STATE Ratings Ratings Amount Issue Value
======================================================================================================================
<C> <C> <C> <C> <S> <C>
California Contra Costa, California, Water District, Water Revenue Bonds,
(continued) Series G (g):
AAA Aaa $ 4,600 5.75% due 10/01/2014 $ 4,743
AAA Aaa 6,140 5% due 10/01/2024 5,578
---------------------------------------------------------------------------------------------------
AAA Aaa 1,870 Davis, California, Joint Unified School District, Community
Facilities District, Special Tax Refunding Bonds, Number One,
5.50% due 8/15/2021 (g) 1,842
---------------------------------------------------------------------------------------------------
AAA Aaa 4,655 Delta County, California, Home Mortgage Finance Authority, S/F
Mortgage Revenue Bonds, AMT, Series A, 5.35% due 6/01/2024 (e)(g) 4,294
---------------------------------------------------------------------------------------------------
AAA Aaa 6,205 East Side Union High School District, California, Santa Clara
County, GO, 5% due 9/01/2022 (c) 5,676
---------------------------------------------------------------------------------------------------
AAA Aaa 5,655 East Side Union High School District, California, Santa Clara
County, GO, Series E, 5% due 9/01/2023 (c) 5,149
---------------------------------------------------------------------------------------------------
AAA Aaa 7,000 El Dorado County, California, Public Agency Financing
Authority, Revenue Refunding Bonds, 5.50% due 2/15/2021 (c) 6,881
---------------------------------------------------------------------------------------------------
AAA Aaa 5,000 Fontana, California, Redevelopment Agency, Tax Allocation
Refunding Bonds (Southwest Industrial Park Project), 5%
due 9/01/2022 (g) 4,574
---------------------------------------------------------------------------------------------------
AAA Aaa 3,000 Fremont, California, Unified School District, Alameda County,
GO, Refunding, 5.25% due 9/01/2019 (g) 2,898
---------------------------------------------------------------------------------------------------
AAA Aaa 4,455 Fresno, California, Airport Revenue Bonds, AMT, Series B,
5.50% due 7/01/2020 (f) 4,407
---------------------------------------------------------------------------------------------------
AAA Aaa 5,200 Glendale, California, Unified School District, GO, Series B,
5.125% due 9/01/2023 (f) 4,824
---------------------------------------------------------------------------------------------------
AAA Aaa 1,700 Inglewood, California, Unified School District, GO, Series A,
5.60% due 10/01/2024 (c) 1,686
---------------------------------------------------------------------------------------------------
AAA Aaa 6,000 Irvine, California, Public Facilities and Infrastructure
Authority, Assessment Revenue Refunding Bonds, Series A, 5.05%
due 9/02/2022 (a) 5,529
---------------------------------------------------------------------------------------------------
AAA Aaa 2,300 Irvine, California, Unified School District, Special Tax
(Community Facilities District Number 86-1), 5.375% due
11/01/2020 (a) 2,240
---------------------------------------------------------------------------------------------------
AAA Aaa 4,665 Irvine, California, Unified School District, Special Tax
Refunding Bonds (Community Facilities District Number 86-1),
5.80% due 11/01/2020 (a) 4,732
---------------------------------------------------------------------------------------------------
AAA Aaa 7,500 La Quinta, California, Redevelopment Agency, Housing Tax
Allocation Bonds (Redevelopment Project Areas Number One & Two),
6% due 9/01/2025 (g) 7,661
---------------------------------------------------------------------------------------------------
Long Beach, California, Bond Finance Authority, Lease Revenue
Bonds (Rainbow Harbor Refinancing Project), Series A (a):
AAA Aaa 2,750 5.125% due 5/01/2020 2,582
AAA Aaa 4,000 5.25% due 5/01/2024 3,787
---------------------------------------------------------------------------------------------------
AAA Aaa 3,740 Long Beach, California, Harbor Revenue Bonds, AMT, 5.375% due
5/15/2020 (g) 3,579
---------------------------------------------------------------------------------------------------
AAA Aaa 3,590 Long Beach, California, Water Revenue Refunding Bonds, Series
A, 5% due 5/01/2024 (g) 3,264
---------------------------------------------------------------------------------------------------
AAA Aaa 10,650 Los Altos, California, School District GO, Series A, 5% due
8/01/2023 (f) 9,699
---------------------------------------------------------------------------------------------------
AAA Aaa 24,500 Los Angeles, California, Convention and Exhibition Center
Authority, Lease Revenue Refunding Bonds, Series A, 5.375%
due 8/15/2018 (g) 24,095
---------------------------------------------------------------------------------------------------
Los Angeles, California, Department of Water and Power,
Electric Plant Revenue Refunding Bonds:
A+ Aa3 2,000 5.875% due 2/15/2020 2,021
A+ Aa3 2,500 6% due 2/15/2028 2,538
---------------------------------------------------------------------------------------------------
AAA Aaa 4,230 Los Angeles, California, M/F Housing Revenue Refunding Bonds,
Senior Series G, 5.65% due 1/01/2014 (f) 4,191
---------------------------------------------------------------------------------------------------
Los Angeles, California, Unified School District, GO (c):
AAA Aaa 3,000 Series A, 5% due 7/01/2021 2,759
AAA Aaa 6,415 Series B, 5% due 7/01/2023 5,843
---------------------------------------------------------------------------------------------------
AAA Aaa 12,000 Los Angeles, California, Wastewater System Revenue Bonds,
Series A, 5% due 6/01/2023 (c) 10,918
---------------------------------------------------------------------------------------------------
AAA Aaa 7,370 Los Angeles County, California, Metropolitan Transportation
Authority, Sales Tax Revenue Bonds, Proposition C, Second Senior
Series B, 5.25% due 7/01/2023 (a) 6,984
---------------------------------------------------------------------------------------------------
Los Angeles County, California, Metropolitan Transportation
Authority, Sales Tax Revenue Refunding Bonds, Proposition A,
First Tier:
AAA Aaa 3,305 Senior Series A, 5.25% due 7/01/2027 (g) 3,110
AAA Aaa 1,700 Senior Series C, 5% due 7/01/2026 (a) 1,538
---------------------------------------------------------------------------------------------------
A1+ VMIG1+ 5,600 M-S-R Public Power Agency, California, Revenue Refunding Bonds
(San Juan Project), VRDN, Sub-Lien, Series D, 4.25%
due 7/01/2018 (g)(h) 5,600
---------------------------------------------------------------------------------------------------
AAA NR* 2,000 Madera County, California, COP, Refunding (Valley Children's
Hospital Project), 5% due 3/15/2023 (g) 1,820
---------------------------------------------------------------------------------------------------
AAA Aaa 2,000 Menlo Park, California, Community Development Agency, Tax
Allocation Refunding Bonds (Las Pulgas Community Development
Project), 5.375% due 6/01/2016 (a) 2,002
---------------------------------------------------------------------------------------------------
AAA Aaa 3,500 Mojave, California, Water Agency, GO, Refunding (Improvement
District--Morongo Basin), 5.80% due 9/01/2022 (c) 3,527
---------------------------------------------------------------------------------------------------
AAA Aaa 2,000 Montebello, California, Community Redevelopment Agency,
Housing Tax Allocation Bonds, Series A, 5.45% due 9/01/2019 (f) 1,952
---------------------------------------------------------------------------------------------------
AAA Aaa 16,000 Norco, California, Redevelopment Agency, Tax Allocation
Refunding Bonds (Norco Redevelopment Project--Area Number One),
5.75% due 3/01/2026 (g) 16,069
---------------------------------------------------------------------------------------------------
AAA Aaa 2,140 North City West, California, School Facilities Financing
Authority, Special Tax Refunding Bonds, Series B, 6% due
9/01/2019 (f) 2,212
---------------------------------------------------------------------------------------------------
AAA Aaa 14,450 Northern California Power Agency, Public Power Revenue
Refunding Bonds (Hydroelectric Project Number One), Series A,
5.125% due 7/01/2023 (g) 13,392
---------------------------------------------------------------------------------------------------
AAA Aaa 7,400 Northern California, Transmission Revenue Refunding Bonds
(California--Oregon Transmission Project), Series A, 5.25%
due 5/01/2020 (g) 7,074
---------------------------------------------------------------------------------------------------
AAA Aaa 9,995 Oakland, California, Alameda County Unified School District,
GO, Refunding, Series C, 5.50% due 8/01/2019 (c) 9,948
---------------------------------------------------------------------------------------------------
AAA Aaa 5,245 Oakland, California, Alameda County Unified School District,
GO, Series F, 5.625% due 8/01/2021 (g) 5,251
---------------------------------------------------------------------------------------------------
AAA Aaa 1,300 Oakland, California, GO, Measure K, Series C, 5.80% due
12/15/2018 (g) 1,326
---------------------------------------------------------------------------------------------------
AAA Aaa 7,105 Oakland, California, Joint Powers Financing Authority, Lease
Revenue Bonds (Oakland Administration Buildings), 5.75%
due 8/01/2021 (a) 7,159
---------------------------------------------------------------------------------------------------
AAA Aaa 4,500 Oakland, California, State Building Authority, Lease Revenue
Bonds (Elihu M. Harris), Series A, 5% due 4/01/2023 (a) 4,101
---------------------------------------------------------------------------------------------------
AAA Aaa 5,000 Olivenhain Municipal Water District, California, Water Revenue
Refunding Bonds, COP (Capital Projects), 5.125% due 6/01/2028 (c) 4,581
---------------------------------------------------------------------------------------------------
AAA Aaa 5,750 Palm Desert, California, Financing Authority, Tax Allocation
Revenue Refunding Bonds (Project Area Number One), 5.45%
due 4/01/2018 (g) 5,727
---------------------------------------------------------------------------------------------------
AAA Aaa 1,000 Palm Springs, California, COP, Refunding (Multiple Capital
Facilities Project), 5.75% due 4/01/2017 (a) 1,023
---------------------------------------------------------------------------------------------------
AAA Aaa 4,000 Pittsburg, California, Public Financing Authority, Water
Revenue Bonds, 5.50% due 6/01/2027 (g) 3,902
---------------------------------------------------------------------------------------------------
</TABLE>
8 & 9
<PAGE>
MuniHoldings California Insured Fund, Inc., June 30, 2000
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<TABLE>
<CAPTION>
S&P Moody's Face
STATE Ratings Ratings Amount Issue Value
======================================================================================================================
<C> <C> <C> <C> <S> <C>
California Pomona, California, Public Financing Authority, Revenue
(concluded) Refunding Bonds:
AAA Aaa $ 4,350 (Southwest Pomona Redevelopment Project), Series W, 5% due
2/01/2024 (g) $ 3,958
AAA Aaa 2,000 (Water Facilities Project), Series AA, 5% due 5/01/2029 1,795
---------------------------------------------------------------------------------------------------
AAA Aaa 2,000 Port Oakland, California, Port Revenue Bonds, AMT, Series G,
5.375% due 11/01/2025 (g) 1,883
---------------------------------------------------------------------------------------------------
AAA Aaa 5,000 Port Oakland, California, Port Revenue Refunding Bonds, Series
I, 5.40% due 11/01/2017 (g) 4,988
---------------------------------------------------------------------------------------------------
AAA Aaa 1,800 Rancho Cucamonga, California, Redevelopment Agency, Tax
Allocation Bonds (Rancho Redevelopment Project), 5.25%
due 9/01/2026 (g) 1,695
---------------------------------------------------------------------------------------------------
AAA Aaa 2,000 Roseville, California, Electric System Revenue Bonds, COP,
5.50% due 2/01/2024 (f) 1,956
---------------------------------------------------------------------------------------------------
AAA NR* 13,920 Sacramento, California, Cogeneration Authority, Cogeneration
Project Revenue Refunding Bonds, 5.20% due 7/01/2021 (g) 13,178
---------------------------------------------------------------------------------------------------
AAA Aaa 6,000 Sacramento, California, Municipal Utility District, Electric
Revenue Bonds, Series K, 5.70% due 7/01/2017 (a) 6,287
---------------------------------------------------------------------------------------------------
AAA Aaa 10,825 Sacramento, California, Municipal Utility District, Electric
Revenue Refunding Bonds, Series L, 5.125% due 7/01/2022 (g) 10,089
---------------------------------------------------------------------------------------------------
AAA Aaa 3,500 Sacramento, California, Power Authority Revenue Bonds
(Cogeneration Project), 5.875% due 7/01/2015 (g) 3,632
---------------------------------------------------------------------------------------------------
AA Aa3 3,750 Sacramento County, California, Sanitation District, Financing
Authority Revenue Refunding Bonds, Series A, 6% due 12/01/2020 3,842
---------------------------------------------------------------------------------------------------
AAA Aaa 7,000 Salida, California, Area Public Facilities Financing Agency,
Community Facilities District Special Tax Refunding Bonds
(No. 1988-1), 5.25% due 9/01/2028 (f) 6,570
---------------------------------------------------------------------------------------------------
AAA Aaa 2,800 San Bernardino, California, Joint Powers Financing Authority,
Lease Revenue Bonds (Department of Transportation Lease),
Series A, 5.50% due 12/01/2020 (g) 2,759
---------------------------------------------------------------------------------------------------
AAA NR* 1,480 San Bernardino County, California, COP, Refunding (Medical
Center Financing Project), 5.50% due 8/01/2019 (g) 1,454
---------------------------------------------------------------------------------------------------
AAA Aaa 2,000 San Diego, California, Certificates of Undivided Interest,
Water Utility Fund, Net System Revenue Bonds, 5% due
8/01/2021 (c) 1,839
---------------------------------------------------------------------------------------------------
San Diego, California, Public Facilities Financing Authority,
Sewer Revenue Bonds (c):
AAA Aaa 5,000 5% due 5/15/2020 4,609
AAA Aaa 5,055 Series A, 5.25% due 5/15/2027 4,766
---------------------------------------------------------------------------------------------------
AAA Aaa 1,740 San Diego County, California, Water Authority, Water Revenue
Bonds, COP, Series A, 5% due 5/01/2022 (c) 1,591
---------------------------------------------------------------------------------------------------
AAA Aaa 6,795 San Francisco, California, Bay Area Rapid Transit District,
Sales Tax Revenue Bonds, 5.50% due 7/01/2026 (c) 6,639
---------------------------------------------------------------------------------------------------
AAA Aaa 3,000 San Francisco, California, Bay Area Rapid Transit District,
Sales Tax Revenue Refunding Bonds, 5% due 7/01/2028 (a) 2,696
---------------------------------------------------------------------------------------------------
San Francisco, California, City and County Airport Commission,
International Airport Revenue Bonds:
AAA Aaa 5,750 AMT, Second Series, Issue 12A, 5.80% due 5/01/2021 (c) 5,756
AAA Aaa 12,660 Second Series, Issue 15B, 5% due 5/01/2024 (g) 11,496
AAA Aaa 5,540 Special Facilities Lease (SFO Fuel Co. LLC), AMT, Series A,
5.25% due 1/01/2022 (a) 5,181
---------------------------------------------------------------------------------------------------
AAA Aaa 3,500 San Francisco, California, City and County Redevelopment
Agency, Hotel Tax Revenue Refunding Bonds, 5% due 7/01/2025 (f) 3,171
---------------------------------------------------------------------------------------------------
AAA Aaa 9,000 San Francisco, California, State Building Authority, Lease
Revenue Bonds (San Francisco Civic Center Complex), Series A,
5.25% due 12/01/2021 (a) 8,588
---------------------------------------------------------------------------------------------------
San Jose, California, Redevelopment Agency, Tax Allocation
Bonds (Merged Area Redevelopment Project) (a):
AAA Aaa 3,000 5% due 8/01/2021 2,758
AAA Aaa 14,835 5% due 8/01/2026 13,414
---------------------------------------------------------------------------------------------------
AAA Aaa 2,000 San Jose-Santa Clara, California, Water Financing Authority,
Sewer Revenue Bonds, Series A, 5.375% due 11/15/2020 (c) 1,941
---------------------------------------------------------------------------------------------------
San Mateo-Foster City, California, School District, GO (c):
AAA NR* 1,000 5% due 8/01/2023 911
AAA Aaa 5,000 5.30% due 8/01/2029 4,724
---------------------------------------------------------------------------------------------------
AAA Aaa 5,000 Santa Ana, California, Financing Authority, Revenue Refunding
Bonds (South Harbor Boulevard), Series A, 5% due 9/01/2019 (g) 4,633
---------------------------------------------------------------------------------------------------
NR* Aaa 2,000 Santa Clara, California, Redevelopment Agency, Tax Allocation
Bonds, RIB, Series 164, 6.35% due 6/01/2023 (a)(b) 1,923
---------------------------------------------------------------------------------------------------
AAA NR* 5,000 Santa Clara, California, Unified School District, GO, 5% due
8/01/2022 (c) 4,575
---------------------------------------------------------------------------------------------------
AAA Aaa 21,750 Santa Clara County, California, Financing Authority, Lease
Revenue Refunding Bonds, Series A, 5% due 11/15/2022 (a) 19,888
---------------------------------------------------------------------------------------------------
AAA Aaa 12,500 Santa Clara Valley, California, Water District, COP, Refunding
and Improvement Bonds, Series A, 6% due 2/01/2024 (c) 12,730
---------------------------------------------------------------------------------------------------
AAA Aaa 9,000 Santa Fe Springs, California, Community Development,
Commission Tax Allocation Refunding Bonds (Consolidated
Redevelopment Project), Series A, 5% due 9/01/2022 (g) 8,233
---------------------------------------------------------------------------------------------------
AAA Aaa 2,500 South County, California, Regional Wastewater Authority,
Revenue Refunding Bonds (Regional Wastewater Facilities Project),
Series A, 5% due 8/01/2022 (g) 2,279
---------------------------------------------------------------------------------------------------
A1+ VMIG1+ 300 Southern California Public Power Authority, Power Project
Revenue Refunding Bonds (Palo Verde Project), VRDN, Series C,
4.30% due 7/01/2017 (a)(h) 300
---------------------------------------------------------------------------------------------------
AAA Aaa 3,370 Tahoe Truckee, California, Unified School District, GO
(Improvement District Number One), Series A, 5.75% due
8/01/2020 (c) 3,408
---------------------------------------------------------------------------------------------------
AAA Aaa 13,250 Tracy, California, Area Public Facilities Financing Agency,
Special Tax Refunding Bonds (Community Facilities District
Number 87-1), Series H, 5.875% due 10/01/2019 (g) 13,557
---------------------------------------------------------------------------------------------------
AAA Aaa 7,250 Turlock, California, Irrigation District Revenue Refunding
Bonds, Series A, 5% due 1/01/2026 (g) 6,563
---------------------------------------------------------------------------------------------------
AAA Aaa 3,000 University of California Revenue Bonds (Research Facilities),
Series D, 5% due 9/01/2024 (f) 2,726
---------------------------------------------------------------------------------------------------
University of California, Revenue Refunding Bonds:
AAA Aaa 15,200 (Multiple Purpose Projects), Series E, 5.125% due 9/01/2020 (g) 14,280
AAA Aaa 2,000 (Research Facilities), Series C, 5% due 9/01/2021 (f) 1,838
---------------------------------------------------------------------------------------------------
University of California, COP, Series A (a):
AAA Aaa 2,000 5.125% due 11/01/2020 1,876
AAA Aaa 10,410 5.25% due 11/01/2024 9,836
AAA Aaa 3,000 5.30% due 11/01/2029 2,830
---------------------------------------------------------------------------------------------------
AAA Aaa 9,875 University of California, Hospital Revenue Bonds (University
of California Medical Center), 5.75% due 7/01/2015 (a) 10,155
---------------------------------------------------------------------------------------------------
</TABLE>
10 & 11
<PAGE>
MuniHoldings California Insured Fund, Inc., June 30, 2000
SCHEDULE OF INVESTMENTS (concluded) (in Thousands)
<TABLE>
<CAPTION>
S&P Moody's Face
STATE Ratings Ratings Amount Issue Value
======================================================================================================================
<C> <C> <C> <C> <S> <C>
Puerto Rico--1.5% AAA Aaa $ 5,000 Puerto Rico Commonwealth, GO, 5% due 7/01/2027 (f) $ 4,497
A Baa1 5,670 Puerto Rico Commonwealth Highway and Transportation Authority,
Transportation Revenue Bonds, Series B, 6% due 7/01/2026 5,735
---------------------------------------------------------------------------------------------------
AAA Aaa 1,000 Puerto Rico Industrial Tourist Educational, Medical and
Environmental Control Facilities Revenue Refunding Bonds
(Inter-American University), Series A, 5% due 10/01/2022 (g) 912
---------------------------------------------------------------------------------------------------
AAA Aaa 1,100 Puerto Rico Municipal Finance Agency, GO, Series A, 5.50% due
8/01/2017 (f) 1,105
======================================================================================================================
Total Investments (Cost--$800,660)--99.0% 801,670
Other Assets Less Liabilities--1.0% 7,690
--------
Net Assets--100.0% $809,360
========
======================================================================================================================
</TABLE>
(a) AMBAC Insured.
(b) 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 June 30,
2000.
(c) FGIC Insured.
(d) FHA Insured.
(e) FNMA/GNMA Collateralized.
(f) FSA Insured.
(g) MBIA Insured.
(h) The interest rate is subject to change periodically
based upon prevailing market rates. The interest rate
shown is the rate in effect at June 30, 2000.
(i) Connie Lee Insured.
* Not Rated.
+ Highest short-term rating by Moody's Investors Service,
Inc.
Ratings of issues shown have not been audited by Deloitte &
Touche LLP.
See Notes to Financial Statements.
Quality Profile (unaudited)
The quality ratings of securities in the Fund as of June 30, 2000 were as
follows:
--------------------------------------------------------------------------------
Percent of
S&P Rating/Moody's Rating Net Assets
--------------------------------------------------------------------------------
AAA/Aaa ................................................................ 92.5%
AA/Aa .................................................................. 1.7
A/A .................................................................... 0.7
BBB/Baa ................................................................ 0.8
Other+ ................................................................. 3.3
--------------------------------------------------------------------------------
+ Temporary investments in short-term municipal securities.
STATEMENT OF ASSETS, LIABILITIES AND CAPITAL
<TABLE>
<CAPTION>
As of June 30, 2000
================================================================================================
<C> <S> <C> <C>
Assets: Investments, at value (identified cost--$800,660,049) . $801,670,549
Cash .................................................. 111,794
Receivables:
Interest ............................................ $ 14,054,182
Securities sold ..................................... 2,205,954 16,260,136
------------
Prepaid expenses and other assets ..................... 85,150
------------
Total assets .......................................... 818,127,629
------------
================================================================================================
Liabilities: Payables:
Securities purchased ................................ 7,767,061
Dividends to shareholders ........................... 457,151
Investment adviser .................................. 294,842 8,519,054
------------
Accrued expenses and other liabilities ................ 248,353
------------
Total liabilities ..................................... 8,767,407
------------
================================================================================================
Net Assets: Net assets ............................................ $809,360,222
============
================================================================================================
Capital: Capital Stock (200,000,000 shares authorized):
Preferred Stock, par value $.10 per share (13,640
shares of AMPS* issued and outstanding at $25,000
per share liquidation preference) ................... $341,000,000
Common Stock, par value $.10 per share (35,194,726
shares issued and outstanding) ...................... $ 3,519,473
Paid-in capital in excess of par ...................... 525,412,138
Undistributed investment income--net .................. 2,523,567
Accumulated realized capital losses on investments--net (64,105,456)
Unrealized appreciation on investments--net ........... 1,010,500
------------
Total--Equivalent to $13.31 net asset value per share
of Common Stock (market price--$12.3125) .............. 468,360,222
------------
Total capital ......................................... $809,360,222
============
================================================================================================
</TABLE>
* Auction Market Preferred Stock.
See Notes to Financial Statements.
12 & 13
<PAGE>
MuniHoldings California Insured Fund, Inc., June 30, 2000
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
For the Year Ended June 30, 2000
===================================================================================================
<C> <S> <C> <C>
Investment Income: Interest and amortization of premium and
discount earned ................................. $ 23,274,097
===================================================================================================
Expenses: Investment advisory fees ........................ $ 2,266,567
Commission fees ................................. 452,568
Reorganization expenses ......................... 447,161
Transfer agent fees ............................. 85,935
Accounting services ............................. 80,441
Professional fees ............................... 63,023
Directors' fees and expenses .................... 30,187
Listing fees .................................... 24,558
Custodian fees .................................. 20,785
Printing and shareholder reports ................ 19,968
Organization expenses ........................... 11,898
Pricing fees .................................... 10,488
Other ........................................... 25,312
------------
Total expenses before reimbursement ............. 3,538,891
Reimbursement of expenses ....................... (265,093)
------------
Total expenses after reimbursement .............. 3,273,798
------------
Investment income--net .......................... 20,000,299
------------
===================================================================================================
Realized & Unrealized Realized loss on investments .................... (28,432,990)
Gain (Loss) on Change in unrealized appreciation/depreciation
Investments--Net: on investments--net ............................. 36,259,129
------------
Net Increase in Net Assets Resulting from Operations $ 27,826,438
============
===================================================================================================
</TABLE>
See Notes to Financial Statements.
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the Year Ended June 30,
------------------------------
Increase (Decrease) in Net Assets: 2000 1999
=======================================================================================================================
<C> <S> <C> <C>
Operations: Investment income--net ........................................... $ 20,000,299 $ 11,147,488
Realized gain (loss) on investments--net ......................... (28,432,990) 867,427
Change in unrealized appreciation/depreciation on
investments--net ................................................. 36,259,129 (6,471,307)
------------- -------------
Net increase in net assets resulting from operations ............. 27,826,438 5,543,608
------------- -------------
=======================================================================================================================
Dividends & Investment income--net:
Distributions to Common Stock ................................................... (12,675,535) (7,892,730)
Shareholders: Preferred Stock ................................................ (6,252,855) (2,898,760)
Realized gain on investments--net:
Common Stock ................................................... -- (276,968)
Preferred Stock ................................................ -- (118,829)
------------- -------------
Net decrease in net assets resulting from dividends and
distributions to shareholders .................................... (18,928,390) (11,187,287)
------------- -------------
=======================================================================================================================
Capital Stock Proceeds from issuance of Common Stock resulting from
Transactions: reorganization ................................................... 318,244,965 --
Proceeds from issuance of Preferred Stock resulting from
reorganization ................................................... 245,000,000 --
Value of shares issued to Common Stock shareholders in
reinvestment of dividends ........................................ 144,287 --
------------- -------------
Net increase in net assets derived from capital stock transactions 563,389,252 --
------------- -------------
=======================================================================================================================
Net Assets: Total increase (decrease) in net assets .......................... 572,287,300 (5,643,679)
Beginning of year ................................................ 237,072,922 242,716,601
------------- -------------
End of year* ..................................................... $ 809,360,222 $ 237,072,922
============= =============
=======================================================================================================================
*Undistributed investment income--net ............................. $ 2,523,567 $ 1,004,497
============= =============
=======================================================================================================================
</TABLE>
See Notes to Financial Statements.
14 & 15
<PAGE>
MuniHoldings California Insured Fund, Inc., June 30, 2000
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
The following per share data and ratios have been derived For the Period
from information provided in the financial statements. For the Year Ended June 30, Feb. 27, 1998+
-------------------------- to June 30,
Increase (Decrease) in Net Asset Value: 2000 1999 1998
===============================================================================================================================
<C> <S> <C> <C> <C>
Per Share Net asset value, beginning of period ............................... $ 14.38 $ 14.96 $ 15.00
Operating -------- ------- --------
Performance: Investment income--net ............................................. 1.11 1.13 .38
Realized and unrealized gain (loss) on investments--net ............ (1.03) (.57) .01
-------- ------- --------
Total from investment operations ................................... .08 .56 .39
-------- ------- --------
Less dividends and distributions to Common Stock shareholders:
Investment income--net ........................................... (.81) (.80) (.21)
Realized gain on investments--net ................................ -- (.03) --
-------- ------- --------
Total dividends and distributions to Common Stock shareholders ..... (.81) (.83) (.21)
-------- ------- --------
Capital charge resulting from issuance of Common Stock ............. -- -- (.03)
-------- ------- --------
Effect of Preferred Stock activity:+++
Dividends and distributions to Preferred Stock
shareholders:
Investment income--net ......................................... (.34) (.30) (.10)
Realized gain on investments--net .............................. -- (.01) --
Capital charge resulting from issuance of Preferred Stock ........ -- -- (.09)
-------- ------- --------
Total effect of Preferred Stock activity ........................... (.34) (.31) (.19)
-------- ------- --------
Net asset value, end of period ..................................... $ 13.31 $ 14.38 $ 14.96
======== ======= ========
Market price per share, end of period .............................. $12.3125 $ 13.00 $ 15.00
======== ======= ========
===============================================================================================================================
Total Investment Based on market price per share .................................... 1.06% (8.34%) 1.42%@@
Return:** ======== ======= ========
Based on net asset value per share ................................. (1.23%) 1.66% 1.15%@@
======== ======= ========
===============================================================================================================================
Ratios Based on Total expenses, net of reimbursement and excluding reorganization
Average Net Assets expenses***......................................................... 1.20% 1.09% .38%*
Of Common Stock: ======== ======= ========
Total expenses, excluding reorganization expenses*** ............... 1.31% 1.23% 1.19%*
======== ======= ========
Total expenses*** .................................................. 1.50% 1.23% 1.19%*
======== ======= ========
Total investment income--net*** .................................... 8.50% 7.42% 8.00%*
======== ======= ========
Amount of dividends to Preferred Stock shareholders ................ 2.66% 1.93% 2.15%*
======== ======= ========
Investment income--net, to Common Stock shareholders ............... 5.84% 5.49% 5.85%*
======== ======= ========
===============================================================================================================================
Ratios Based on Total expenses, net of reimbursement and excluding reorganization
Total Average Net expenses ........................................................... .69% .67% .24%*
Assets:++*** ======== ======= ========
Total expenses, excluding reorganization expenses .................. .75% .75% .75%*
======== ======= ========
Total expenses ..................................................... .86% .75% .75%*
======== ======= ========
Total investment income--net ....................................... 4.85% 4.53% 5.05%*
======== ======= ========
===============================================================================================================================
Ratios Based on Dividends to Preferred Stock shareholders .......................... 3.54% 3.02% 3.65%*
Average Net Assets ======== ======= ========
Of Preferred Stock:
===============================================================================================================================
Supplemental Data: Net assets, net of Preferred Stock, end of period (in thousands) ... $468,360 $41,073 $146,717
======== ======= ========
Preferred Stock outstanding, end of period (in thousands) .......... $341,000 $96,000 $ 96,000
======== ======= ========
Portfolio turnover ................................................. 105.22% 82.36% 64.17%
======== ======= ========
===============================================================================================================================
Leverage: Asset coverage per $1,000 .......................................... $ 2,373 $ 2,470 $ 2,528
======== ======= ========
===============================================================================================================================
Dividends Per Series A--Investment income--net ................................... $ 915 $ 775 $ 262
Share on Preferred ======== ======= ========
Stock Outstanding: Series B--Investment income--net ................................... $ 830 $ 735 $ 257
======== ======= ========
Series C--Investment income--net ................................... $ 284 -- --
======== ======= ========
Series D--Investment income--net ................................... $ 288 -- --
======== ======= ========
Series E--Investment income--net ................................... $ 314 -- --
======== ======= ========
===============================================================================================================================
</TABLE>
* Annualized.
** 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. The Fund's Investment Adviser voluntarily waived a portion of its
management fee. Without such waiver, the Fund's performance would have
been lower.
*** Do not reflect the effect of dividends to Preferred Stock shareholders.
+ Commencement of operations.
++ Includes Common and Preferred Stock average net assets.
+++ The Fund's Preferred Stock was issued on March 19, 1998 for Series A and
Series B, and on March 6, 2000 for Series C, Series D and Series E.
@@ Aggregate total investment return.
See Notes to Financial Statements.
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
MuniHoldings California Insured Fund, Inc. (the "Fund") (formerly MuniHoldings
California Insured Fund II, Inc.) is registered under the Investment Company Act
of 1940 as a non-diversified, closed-end management investment company. The
Fund's financial statements are prepared in accordance with accounting
principles generally accepted in the United States of America, which may require
the use of management accruals and estimates. The Fund determines and makes
available for publication the net asset value of its Common Stock on a weekly
basis. The Fund's Common Stock is listed on the New York Stock Exchange under
the symbol MUC. The following is a summary of significant accounting policies
followed by the Fund.
(a) Valuation of investments -- Municipal bonds are traded primarily in the
over-the-counter markets and are valued at the most recent bid price or yield
equivalent as obtained by the Fund's pricing service from dealers that make
markets in such securities. Financial futures contracts and options thereon,
which are traded on exchanges, are valued at their closing prices as of the
close of such exchanges. Options written or purchased are valued at the last
sale price in the case of exchange-traded options. In the case of options traded
in the over-the-counter market, valuation is the last asked price (options
written) or the last bid price (options purchased). Securities with remaining
maturities of sixty days or less are valued at amortized cost, which
approximates market value. Securities and assets for which market quotations are
not readily available are valued at fair value as determined in good faith by or
under the direction of the Board of Directors of the Fund, including valuations
furnished by a pricing service retained by the Fund, which may utilize a matrix
system for valuations. The procedures of the pricing service and its valuations
are reviewed by the officers of the Fund under the general supervision of the
Board of Directors.
(b) Derivative financial instruments -- The Fund may engage in various portfolio
investment strategies to increase or decrease the level of risk to which the
Fund is exposed more quickly and
16 & 17
<PAGE>
MuniHoldings California Insured Fund, Inc., June 30, 2000
NOTES TO FINANCIAL STATEMENTS (continued)
efficiently than transactions in other types of instruments. Losses may arise
due to changes in the value of the contract or if the counterparty does not
perform under the contract.
o Financial futures contracts -- The Fund may purchase or sell financial futures
contracts and options on such futures contracts for the purpose of hedging the
market risk on existing securities or the intended purchase of securities.
Futures contracts are contracts for delayed delivery of securities at a specific
future date and at a specific price or yield. Upon entering into a contract, the
Fund deposits and maintains as collateral such initial margin as required by the
exchange on which the transaction is effected. 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 variation margin and are recorded 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.
o Options -- The Fund is authorized to write covered call options and purchase
put options. When the Fund writes an option, an amount equal to the premium
received by the Fund is reflected as an asset and an equivalent liability. The
amount of the liability is subsequently marked to market to reflect the current
market value of the option written. When a security is purchased or sold through
an exercise of an option, the related premium paid (or received) is added to (or
deducted from) the basis of the security acquired or deducted from (or added to)
the proceeds of the security sold. When an option expires (or the Fund enters
into a closing transaction), the Fund realizes a gain or loss on the option to
the extent of the premiums received or paid (or gain or loss to the extent the
cost of the closing transaction exceeds the premium paid or received).
Written and purchased options are non-income producing investments.
(c) Income taxes -- It is the Fund's policy to comply with the requirements of
the Internal Revenue Code applicable to regulated investment companies and to
distribute substantially all of its taxable income to its shareholders.
Therefore, no Federal income tax provision is required.
(d) Security transactions and investment income -- Security transactions are
recorded on the dates the transactions are entered into (the trade dates).
Interest income is recognized on the accrual basis. Discounts and market
premiums are amortized into interest income. Realized gains and losses on
security transactions are determined on the identified cost basis.
(e) Organization and offering expenses -- In accordance with Statement of
Position 98-5, unamortized organization expenses of $11,898 were expensed during
the year ended June 30, 2000. This is considered to be a change in accounting
principle and had no material impact on the operations of the Fund. Direct
expenses relating to the public offering of the Fund's Common and Preferred
Stock were charged to capital at the time of issuance of the shares.
(f) Dividends and distributions -- Dividends from net investment income are
declared and paid monthly. Distributions of capital gains are recorded on the
ex-dividend dates.
(g) Reclassification -- Generally accepted accounting principles require that
certain components of net assets be adjusted to reflect permanent differences
between financial and tax reporting. Accordingly, current year's permanent
book/tax differences of $447,161 have been reclassified between paid-in capital
in excess of par and undistributed net investment income. These
reclassifications have no effect on net assets or net asset value per share.
2. Investment Advisory Agreement and Transactions with Affiliates:
The Fund has entered into an Investment Advisory Agreement with Fund Asset
Management, L.P. ("FAM"). The general partner of FAM is Princeton Services, Inc.
("PSI"), an indirect wholly-owned subsidiary of Merrill Lynch & Co., Inc. ("ML &
Co."), which is the limited partner.
FAM is responsible for the management of the Fund's portfolio and provides the
necessary personnel, facilities, equipment and certain other services necessary
to the operations of the Fund. For such services, the Fund pays a monthly fee at
an annual rate of .55% of the Fund's average weekly net assets, including
proceeds from the issuance of Preferred Stock. For the year ended June 30, 2000,
FAM earned fees of $2,266,567, of which $265,093 was voluntarily waived.
Accounting services are provided to the Fund by FAM at cost.
Certain officers and/or directors of the Fund are officers and/or directors of
FAM, PSI, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities, for the
year ended June 30, 2000 were $457,794,859 and $409,507,014, respectively.
Net realized losses for the year ended June 30, 2000 and net unrealized gains as
of June 30, 2000 were as follows:
--------------------------------------------------------------------------------
Realized Unrealized
Losses Gains
--------------------------------------------------------------------------------
Long-term investments ................... $(26,888,388) $ 1,010,500
Financial futures contracts ............. (1,544,602) --
------------ ------------
Total $(28,432,990) $ 1,010,500
============ ============
--------------------------------------------------------------------------------
As of June 30, 2000, net unrealized appreciation for Federal income tax purposes
aggregated $10,744, of which $12,508,853 related to appreciated securities and
$12,498,109 related to depreciated securities. The aggregate cost of investments
at June 30, 2000 for Federal income tax purposes was $801,659,805.
4. Capital Stock Transactions:
The Fund is authorized to issue 200,000,000 shares of capital stock, including
Preferred Stock, par value $.10 per share, all of which were initially
classified as Common Stock. The Board of Directors is authorized, however, to
reclassify any unissued shares of capital stock without approval of holders of
Common Stock.
Common Stock
Shares issued and outstanding during the year ended June 30, 2000 increased by
25,375,893 as a result of issuance of Common Stock from reorganization and by
11,885 as a result of dividend reinvestment. Shares issued and outstanding
during the year ended June 30, 1999 remained constant.
Preferred Stock
Auction Market Preferred Stock ("AMPS") are shares of Preferred Stock of the
Fund, with a par value of $.10 per share and a liquidation preference of $25,000
per share that entitle their holders to receive cash dividends at an annual rate
that may vary for the successive dividend periods. The yields in effect at June
30, 2000 were: Series A, 3.50%; Series B, 3.50%; Series C, 3.50%; Series D,
4.70%; and Series E, 4.70%.
Shares issued and outstanding during the year ended June 30, 2000 increased by
9,800 as a result of issuance of Preferred Stock from reorganization. Shares
issued and outstanding during the year ended June 30, 1999 remained constant.
The Fund pays commissions to certain broker-dealers at the end of each auction
at an annual rate ranging from .25% to .375%, calculated on the proceeds of each
auction. For the year ended June 30, 2000, MLPF&S earned $216,658 as
commissions.
5. Capital Loss Carryforward:
At June 30, 2000, the Fund had a net capital loss carryforward of approximately
$21,908,000, of which $4,346,000 expires in 2006, $11,359,000 expires in 2007
and $6,203,000 expires in 2008. This amount will be available to offset like
amounts of any future taxable gains.
6. Acquisition of Other FAM-Managed Investment Companies:
On March 6, 2000, the Fund acquired all of the net assets of MuniHoldings
California Insured Fund, Inc., MuniHoldings California Insured Fund III, Inc.
and MuniHoldings California Insured Fund IV, Inc. pursuant to a plan of
reorganization. The acquisition was accomplished by a tax-free exchange of the
following capital shares:
--------------------------------------------------------------------------------
Common Stock AMPS Shares
Shares Exchanged Exchanged
--------------------------------------------------------------------------------
MuniHoldings California Insured
Fund, Inc. ........................... 8,327,187 3,200
MuniHoldings California Insured
Fund III, Inc. ....................... 7,521,774 2,960
MuniHoldings California Insured
Fund IV, Inc. ........................ 9,912,397 3,640
--------------------------------------------------------------------------------
18 & 19
<PAGE>
MuniHoldings California Insured Fund, Inc., June 30, 2000
NOTES TO FINANCIAL STATEMENTS (concluded)
In exchange for these shares, the Fund issued 25,375,893 Common Stock shares and
9,800 AMPS shares. As of that date, net assets of the acquired funds, including
unrealized depreciation and accumulated net realized capital losses, were as
follows:
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------
Accumulated
Net Unrealized Net Realized
Assets Depreciation Capital Losses
-------------------------------------------------------------------------------------------
<S> <C> <C> <C>
MuniHoldings California
Insured Fund, Inc. .... $188,528,087 $5,223,694 $10,105,785
MuniHoldings California
Insured Fund III, Inc. $164,636,543 $7,819,213 $13,489,489
MuniHoldings California
Insured Fund IV, Inc. . $210,080,335 $6,968,128 $11,438,533
-------------------------------------------------------------------------------------------
</TABLE>
The aggregate net assets of the Fund immediately after the acquisition amounted
to $782,385,120.
7. Subsequent Event:
On July 6, 2000, the Fund's Board of Directors declared an ordinary income
dividend to Common Stock shareholders in the amount of $.061918 per share,
payable on July 28, 2000 to shareholders of record as of July 19, 2000. In
addition, effective July 17, 2000, the Fund changed its name to MuniHoldings
California Insured Fund, Inc.
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders
MuniHoldings California Insured Fund, Inc.:
We have audited the accompanying statement of assets, liabilities and capital,
including the schedule of investments, of MuniHoldings California Insured Fund,
Inc. (the "Fund") (formerly MuniHoldings California Insured Fund II, Inc.) as of
June 30, 2000, the related statements of operations for the year then ended,
changes in net assets for each of the years in the two-year period then ended
and the financial highlights for each of the years in the two-year period then
ended and for the period February 27, 1998 (commencement of operations) to June
30, 1998. These financial statements and the financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and the financial highlights based on our
audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements and the financial highlights are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned at June 30, 2000 by correspondence with the custodian and
brokers. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of MuniHoldings
California Insured Fund, Inc. as of June 30, 2000, the results of its
operations, the changes in its net assets, and the financial highlights for the
respective stated periods in accordance with accounting principles generally
accepted in the United States of America.
Deloitte & Touche LLP
Princeton, New Jersey
August 10, 2000
20 & 21
<PAGE>
MuniHoldings California Insured Fund, Inc.
IMPORTANT TAX INFORMATION (unaudited)
All of the net investment income distributions paid by MuniHoldings California
Insured Fund, Inc. during its taxable year ended June 30, 2000 qualify as
tax-exempt interest dividends for Federal income tax purposes. Additionally,
there were no capital gains distributions paid by the Fund during the year.
Please retain this information for your records.
MANAGED DIVIDEND POLICY
The Fund's dividend policy is to distribute all or a portion of its net
investment income to its shareholders on a monthly basis. However, in order to
provide shareholders with a more consistent yield to the current trading price
of shares of Common Stock of the Fund, the Fund 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 Fund for any particular month may be more or less than
the amount of net investment income earned by the Fund during such month. The
Fund's current accumulated but undistributed net investment income, if any, is
disclosed in the Statement of Assets, Liabilities and Capital, which comprises
part of the financial information included in this report.
OFFICERS AND DIRECTORS
Terry K. Glenn, President and Director
James H. Bodurtha, Director
Herbert I. London, Director
Joseph L. May, Director
Andre F. Perold, Director
Roberta Cooper Ramo, Director
Arthur Zeikel, Director
Vincent R. Giordano, Senior Vice President
Robert A. DiMella, Vice President
Kenneth A. Jacob, Vice President
Walter C. O'Connor, Vice President
Donald C. Burke, Vice President and Treasurer
Alice A. Pellegrino, Secretary
Custodian
The Bank of New York
90 Washington Street
New York, NY 10286
Transfer Agents
Common Stock:
The Bank of New York
101 Barclay Street
New York, NY 10286
Preferred Stock:
The Bank of New York
100 Church Street
New York, NY 10286
NYSE Symbol
MUC
22 & 23
<PAGE>
MuniHoldings California Insured Fund, Inc. seeks to provide shareholders with
current income exempt from Federal and California income taxes by investing
primarily in a portfolio of long-term investment grade municipal obligations the
interest of which, in the opinion of bond counsel to the issuer, is exempt from
Federal and California income taxes.
This report, including the financial information herein, is transmitted to
shareholders of MuniHoldings California Insured Fund, Inc. for their
information. It is not a prospectus. Past performance results shown in this
report should not be considered a representation of future performance. The Fund
has the ability to leverage its Common Stock by issuing Preferred Stock to
provide the Common Stock shareholders with a potentially higher rate of return.
Leverage creates risks for Common Stock shareholders, including the likelihood
of greater volatility of net asset value and market price of shares of the
Common Stock, and the risk that fluctuations in the short-term dividend rates of
the Preferred Stock may affect the yield to Common Stock shareholders.
Statements and other information herein are as dated and are subject to change.
MuniHoldings California
Insured Fund, Inc.
Box 9011
Princeton, NJ
08543-9011 #HOLDCA--6/00
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