MUNIHOLDINGS
NEW YORK
FUND, INC.
FUND LOGO
Semi-Annual Report
December 31, 1998
This report, including the financial information herein, is
transmitted to the shareholders of MuniHoldings New York Fund, Inc.
for their information. It is not a prospectus, circular or
representation intended for use in the purchase of shares of the
Fund or any securities mentioned in the report. Past performance
results shown in this report should not be considered a
representation of future performance. The Fund has leveraged 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
New York
Fund, Inc.
Box 9011
Princeton, NJ
08543-9011
Printed on post-consumer recycled paper
MUNIHOLDINGS NEW YORK FUND, INC.
The Benefits and
Risks of
Leveraging
MuniHoldings New York Fund, Inc. has the ability to 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 net
asset value of the Fund's shares may also be more volatile than if
the Fund did not invest in these securities.
MuniHoldings New York Fund, Inc., December 31, 1998
DEAR SHAREHOLDER
For the six-month period ended December 31, 1998, the Common Stock
of MuniHoldings New York Fund, Inc. earned $0.417 per share income
dividends, which included earned and unpaid dividends of $0.070.
This represents a net annualized yield of 5.39%, based on a month-
end per share net asset value of $15.35. Over the same period, the
total investment return on the Fund's Common Stock was +4.96%, based
on a change in per share net asset value from $15.08 to $15.35, and
assuming reinvestment of $0.461 per share ordinary income dividends
and $0.003 per share capital gains distributions.
For the six-month period ended December 31, 1998, the Fund's Auction
Market Preferred Stock had an average yield of 3.36% for Series A
and 3.40% for Series B.
The Municipal Market
Environment
During the six months ended December 31, 1998, long-term bond yields
generally declined. Modest domestic economic growth coupled with a
continued lack of inflationary pressures has allowed bond yields to
continue the decline seen for most of 1998. The US Treasury market
has also continued to benefit from its "safe-haven" status. The
earlier turmoil in foreign markets, especially in Russia and Brazil,
remains unresolved. The declines in foreign economies also have led
to reduced demand for US exports. This reduction has forced some US
manufacturers to scale back production and initiate significant
contractions in employment. Concerns that the declines in the US
manufacturing sector seen thus far would intensify and spread to the
service sector of the US economy led the Federal Reserve Board to
lower short-term interest rates in September, October and November.
These actions were taken in large part to ensure that US economic
growth would remain at least at its current level of growth. During
the six months ended December 31, 1998, US Treasury bond yields
declined over 50 basis points (0.50%) to end the year at 5.09%. Long-
term uninsured municipal revenue bond yields, as measured by the
Bond Buyer Revenue Bond Index, fell 10 basis points to end the six-
month period at 5.26%.
One of the two principal themes characterizing the municipal bond
market for much of the past year has been the significant increase
in new municipal bond issuance. Over $285 billion in new long-term
tax-exempt bonds were underwritten in 1998, an increase of almost
30% relative to 1997 levels. As tax-exempt bond yields declined in
recent years, increasingly lower municipal bond yields were required
to refinance existing debt. Consequently, the rate of increase in
municipal bond issuance has begun to slow in recent quarters. During
the last six months of 1998, nearly $135 billion in new tax-exempt
bonds were issued, an increase of nearly 10% as compared to the same
period a year earlier. During the three months ended December 31,
1998, $68 billion in new municipal bonds were underwritten, an
increase of just over 5% as compared to the quarter ended December
31, 1997. Unless municipal bond yields decline dramatically in 1999,
new bond issuance in 1999 seems unlikely to match 1998 levels.
The second and perhaps more striking theme during the past year has
been the dramatic underperformance of the municipal bond market. At
the end of 1998, long-term tax-exempt bond yields were at attractive
yield ratios relative to US Treasury securities of comparable
maturities (103%), matching their least expensive level of the year.
Municipal bond yield ratios have averaged approximately 95% for the
last six months and 92% for all of 1998. During 1997, tax-exempt
bond yield ratios averaged 84%. It is likely that the combination of
the increase in new-issue volume and the safe-haven status of US
Treasury securities has driven municipal bond yield ratios to their
present attractive levels. Should new-issue volume decline or
foreign financial markets regain stability in 1999, tax-exempt bond
yield ratios could be expected to quickly return to their more
historic levels (85%--88%).
Looking ahead, the expected combination of moderate economic growth
in the United States and continued negligible inflation suggest a
relatively stable interest rate environment into early 1999.
However, it is likely that foreign financial markets will again be a
critical factor in determining US bond yields. At this time, it
appears that there is little immediate risk of any significant
increase in long-term bond yields.
Portfolio Strategy
During the six months ended December 31, 1998, we maintained the
Fund's constructive portfolio position. We believed that a
continuation of current equity market volatility would have a
negative impact on economic growth, thereby constricting global
inflation and forcing interest rates lower during the next several
months. This proved to be the case as turmoil increased in various
parts of the world, including Brazil and Russia. While the US
economy had performed much better than anticipated, inflation
remained quite benign. Our constructive strategy enabled the Fund to
participate in the bond market rally as well as realize an
attractive total return.
Looking ahead, we will maintain our constructive position toward
interest rates. We expect to remain fully invested in order to seek
to maintain a high level of tax-exempt income, as we expect New York
new-issuance supply to remain moderate and demand to remain quite
strong.
In Conclusion
We appreciate your ongoing interest in MuniHoldings New York Fund,
Inc., and we look forward to assisting you with your financial needs
in the months and years ahead.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Vincent R. Giordano)
Vincent R. Giordano
Senior Vice President
(Robert A. DiMella)
Robert A. DiMella
Vice President and
Portfolio Manager
(Roberto Roffo)
Roberto Roffo
Vice President and
Portfolio Manager
February 3, 1999
MuniHoldings New York Fund, Inc., December 31, 1998
PROXY RESULTS
<TABLE>
During the six-month period ended December 31, 1998, MuniHoldings
New York Fund, Inc. Common Stock shareholders voted on the following
proposals. The proposals were approved at a shareholders' meeting on
December 16, 1998. The description of each proposal and number of
shares voted are as follows:
<CAPTION>
Shares Voted Shares Withheld
For From Voting
<S> <S> <C> <C>
1. To elect the Fund's Directors: Herbert I. London 7,445,026 73,652
Robert R. Martin 7,449,027 69,651
Andre F. Perold 7,449,077 69,601
Arthur Zeikel 7,441,556 77,122
<CAPTION>
Shares Voted Shares Voted Shares Voted
For Against Abstain
<S> <C> <C> <C>
2. To ratify the selection of Deloitte & Touche LLP as the Fund's independent
auditors for the current fiscal year. 7,400,308 25,493 92,877
During the six-month period ended December 31, 1998, MuniHoldings
New York Fund, Inc. Preferred Stock shareholders voted on the
following proposals. The proposals were approved at a shareholders'
meeting on December 16, 1998. The description of each proposal and
number of shares voted are as follows:
<CAPTION>
Shares Voted Shares Withheld
For From Voting
<S> <C> <C>
1. To elect the Fund's Board of Directors: James H. Bodurtha, Herbert I. London,
Robert R. Martin, Joseph L. May, Andre F. Perold, Arthur Zeikel as follows:
Series A 957 0
Series B 1,493 0
<CAPTION>
Shares Voted Shares Voted Shares Voted
For Against Abstain
<S> <C> <C> <C>
2. To ratify the selection of Deloitte & Touche LLP as the Fund's independent
auditors for the current fiscal year as follows:
Series A 957 0 0
Series B 1,493 0 0
</TABLE>
OFFICERS AND DIRECTORS
Arthur Zeikel, President and Director
James H. Bodurtha, Director
Herbert I. London, Director
Robert R. Martin, Director
Joseph L. May, Director
Andre F. Perold, Director
Terry K. Glenn, Executive Vice President
Vincent R. Giordano, Senior Vice President
Donald C. Burke, Vice President
Kenneth A. Jacob, Vice President
Robert A. DiMella, Vice President
Roberto Roffo, Vice President
Gerald M. Richard, Treasurer
Philip M. Mandel, 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:
IBJ Schroder Bank &Trust Company
One State Street
New York, NY 10004
NYSE Symbol
MUN
MuniHoldings New York Fund, Inc., December 31, 1998
<TABLE>
SCHEDULE OF INVESTMENTS (in Thousands)
<CAPTION>
S&P Moody's Face Value
STATE Ratings Ratings Amount Issue (Note 1a)
<S> <S> <S> <C> <S> <C>
New York--93.4% AAA Aaa $ 5,000 Battery Park City Authority, New York, Revenue Bonds,
RITR, Series 25, 6.62% due 11/01/2026 (b) (c) $ 5,518
AAA Aaa 2,000 Buffalo, New York, Municipal Water Finance Authority,
Water System Revenue Bonds, 5% due 7/01/2025 (d) 1,974
Long Island Power Authority, New York, Electric System
Revenue Refunding Bonds, Series A:
AAA Aaa 2,500 5.125% due 12/01/2016 (f) 2,549
AAA Aaa 7,000 5.25% due 12/01/2026 (e) 7,157
A- Baa1 3,150 5.50% due 12/01/2029 3,251
AAA Aaa 2,600 5.50% due 12/01/2029 (e) 2,696
AAA Aaa 1,000 Metropolitan Transportation Authority, New York, Commuter
Facilities Revenue Refunding Bonds, Series D, 5.125%
due 7/01/2022 (e) 1,000
AAA Aaa 2,000 Nassau County, New York, Industrial Development Agency,
Civic Facilities Revenue Refunding Bonds (Hofstra University
Project), 4.75% due 7/01/2028 (e) 1,903
New York City, New York, GO:
A- A3 5,000 Refunding, Series H, 5.125% due 8/01/2025 4,918
A- A3 7,500 Refunding, Series J, 5.125% due 8/01/2014 7,657
A- A3 2,000 Series J, 5.50% due 2/15/2026 2,053
New York City, New York, Industrial Development Agency,
Civic Facilities Revenue Bonds:
A A2 6,750 (British Airways PLC Project), AMT, 5.25% due 12/01/2032 6,697
BBB NR* 1,000 (College of Aeronautics Project), 5.45% due 5/01/2018 1,026
A1+ NR* 300 (National Audubon Society), VRDN, 4.10% due 12/01/2014 (a) 300
A A3 5,765 (Nightingale-Bamford School Project), 5.85% due 1/15/2020 6,082
New York City, New York, Municipal Water Finance Authority,
Water and Sewer System Revenue Refunding Bonds:
AAA Aaa 7,250 Series A, 5.50% due 6/15/2023 (d) 7,541
A A1 4,750 Series B, 5.25% due 6/15/2029 4,782
AA Aa3 2,840 New York City, New York, Transitional Finance Authority
Revenue Bonds (Future Tax Secured), Series C, 5% due 5/01/2016 2,855
New York State Dormitory Authority Revenue Bonds:
AAA Aaa 2,200 (835 Schools Program), Issue 2, Series D, 5% due 7/01/2018 (c) 2,196
BBB+ A3 7,550 (Court Facilities Lease), Series A, 5.25% due 5/15/2021 7,570
NR* Aaa 2,960 (Culinary Institute), 5% due 7/01/2027 (e) 2,920
AAA Aaa 4,500 (Liberal Facilities--Service Contract), 5.25% due 7/01/2019 (g) 4,588
AAA Aaa 5,000 (Mental Health Services Facilities), Series B, 5%
due 2/15/2028 (f) 4,932
A- A3 2,370 (Mental Health Services Facilities Improvement), Series B,
5.375% due 2/15/2026 2,422
AAA Aaa 2,255 (Mental Health Services Facilities Improvement), Series D,
5% due 8/15/2017 (e) 2,248
AAA Aaa 5,485 (Mental Health Services Facilities Improvement), Series D, 5.
125% due 8/15/2027 (f) 5,487
AAA Aaa 4,000 (Municipal Health Facilities Improvement Program), Series 1,
4.75% due 1/15/2029 (f) 3,792
BBB+ Baa1 3,000 Refunding (Secured Hospital--North General Hospital),
Series G, 5.30% due 2/15/2019 3,015
A- A3 2,000 Refunding (State University Educational Facilities), 5.125%
due 5/15/2021 1,983
AAA Aaa 1,455 Refunding (University of Rochester), Series A, 5.125% due
7/01/2022 (e) 1,456
BBB+ Baa1 7,000 (Secured Hospital--Interfaith Medical Center), Series D,
5.40% due 2/15/2028 7,075
BBB+ Baa1 1,750 (Secured Hospital--Saint Agnes Hospital), Series A, 5.40%
due 2/15/2025 1,770
BBB+ Baa1 1,000 (Secured Hospital--Saint Clare's Hospital), Series B,
5.30% due 2/15/2019 1,005
BBB+ Baa1 6,500 (Secured Hospital--Saint Clare's Hospital), Series B,
5.40% due 2/15/2025 6,576
BBB+ Baa1 7,500 (Secured Hospital--Wyckoff Heights), Series H, 5.30%
due 8/15/2021 7,531
AA Aa 4,000 (Vassar College), 5% due 7/01/2025 3,925
New York State Energy Research and Development Authority, PCR:
AAA Aaa 2,000 (New York State Electric and Gas Project), AMT,
Series A, 6.15% due 7/01/2026 (e) 2,189
A1+ NR* 500 (Niagara Power Corporation Project), VRDN, AMT,
Series B, 4.15% due 7/01/2027 (a) 500
AAA Aaa 2,000 Refunding (Niagara Mohawk Power Project), Series A,
5.15% due 11/01/2025 (c) 2,010
AAA Aaa 5,065 New York State Local Government Assistance Corporation,
RITR, Series 27, 6.62% due 4/01/2021 (b)(e) 5,459
New York State Mortgage Agency Revenue Bonds:
NR* Aa2 3,900 5.50% due 10/01/2028 3,981
NR* Aa2 7,435 (Homeowner Mortgage), AMT, Series 69, 5.40% due 10/01/2019 7,584
NR* Aa2 4,900 Series 41-A, 6.45% due 10/01/2014 5,320
AAA Aaa 3,955 New York State, Refunding, GO, Series D, 5% due 7/15/2018 (c) 3,964
AAA Aaa 5,000 New York State Urban Development Corporation Revenue Bonds,
RITR, Series 26, 6.62% due 1/01/2025 (b)(e) 5,446
AAA Aaa 1,000 Niagara, New York Frontier Authority Airport Revenue Bonds
(Buffalo Niagara International Airport), AMT, 5% due
4/01/2018 (d) 991
AAA Aaa 1,700 Oneida County, New York, Industrial Development Agency,
Civic Facilities Revenue Bonds (Mohawk Valley), Series A,
5.20% due 2/01/2013 (f) 1,764
Puerto Rico--4.9% A Baa1 9,420 Puerto Rico Public Buildings Authority, Guaranteed
Government Facilities Revenue Bonds, Series B, 5.25%
due 7/01/2021 9,526
Total Investments (Cost--$186,203)--98.3% 189,184
Other Assets Less Liabilities--1.7% 3,178
---------
Net Assets--100.0% $ 192,362
=========
<FN>
(a)The interest rate is subject to change periodically based upon
prevailing market rates. The interest rate shown is the interest
rate in effect at December 31, 1998.
(b)The interest rate is subject to change periodically and inversely
based upon prevailing market rates. The interest rate shown is the
interest rate in effect at December 31, 1998.
(c)AMBAC Insured.
(d)FGIC Insured.
(e)MBIA Insured.
(f)FSA Insured.
(g)CAPMAC Insured.
*Not Rated.
See Notes to Financial Statements.
</TABLE>
Portfolio Abbreviations
To simplify the listings of MuniHoldings New York Fund, Inc.'s
portfolio holdings in the Schedule of Investments, we have
abbreviated the names of many of the securities according to the
list at right.
AMT Alternative Minimum Tax (subject to)
GO General Obligation Bonds
PCR Pollution Control Revenue Bonds
RITR Residual Interest Trust Receipts
VRDN Variable Rate Demand Notes
MuniHoldings New York Fund, Inc., December 31, 1998
<TABLE>
STATEMENT OF ASSETS, LIABILITIES AND CAPITAL
<CAPTION>
As of December 31, 1998
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$186,202,994) (Note 1a) $189,183,805
Cash 91,136
Receivables:
Interest $ 3,230,549
Securities sold 120,000 3,350,549
------------
Deferred organization expenses (Note 1e) 15,147
Prepaid expenses and other assets 4,113
------------
Total assets 192,644,750
------------
Liabilities: Payables:
Investment adviser (Note 2) 90,025
Distributor (Note 2) 76,475
Dividends and distributions to shareholders (Note 1f) 32,809 199,309
------------
Accrued expenses and other liabilities 83,625
------------
Total liabilities 282,934
------------
Net Assets: Net assets $192,361,816
============
Capital: Capital Stock (200,000,000 shares authorized) (Note 4):
Preferred Stock, par value $.10 per share (3,040 shares of
AMPS* issued and outstanding at $25,000
per share liquidation preference) $ 76,000,000
Common Stock, par value $.10 per share (7,580,698 shares
issued and outstanding) $ 758,070
Paid-in capital in excess of par 111,975,013
Undistributed investment income--net 665,507
Accumulated realized capital losses on investments--net (Note 5) (17,585)
Unrealized appreciation on investments--net 2,980,811
------------
Total--Equivalent to $15.35 net asset value per share
of Common Stock (market price--$15.4375) 116,361,816
------------
Total capital $192,361,816
============
<FN>
*Auction Market Preferred Stock.
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENT OF OPERATIONS
<CAPTION>
For the Six Months Ended December 31, 1998
<S> <S> <C> <C>
Investment Interest and amortization of premium and discount earned $ 5,072,066
Income (Note 1d):
Expenses: Investment advisory fees (Note 2) $ 541,262
Commission fees (Note 4) 101,688
Professional fees 34,341
Accounting services (Note 2) 21,403
Transfer agent fees 21,085
Directors' fees and expenses 12,011
Printing and shareholder reports 10,836
Custodian fees 8,052
Listing fees 5,929
Pricing fees 3,650
Amortization of organization expenses (Note 1e) 1,697
Other 8,313
------------
Total expenses before reimbursement 770,267
Reimbursement of expenses (Note 2) (118,654)
------------
Total expenses after reimbursement 651,613
------------
Investment income--net 4,420,453
------------
Realized & Realized gain on investments--net 1,367,624
Unrealized Change in unrealized appreciation on investments--net 1,114,867
Gain on ------------
Investments--Net Net Increase in Net Assets Resulting from Operations $ 6,902,944
(Notes 1b, 1d & 3): ============
See Notes to Financial Statements.
</TABLE>
MuniHoldings New York Fund, Inc., December 31, 1998
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
<CAPTION>
For the Six For the Period
Months Ended Feb. 27, 1998++
Dec. 31, to June 30,
Increase (Decrease) in Net Assets: 1998 1998
<S> <S> <C> <C>
Operations: Investment income--net $ 4,420,453 $ 2,967,254
Realized gain (loss) on investments--net 1,367,624 (827,645)
Change in unrealized appreciation on investments--net 1,114,867 1,865,944
------------ ------------
Net increase in net assets resulting from operations 6,902,944 4,005,553
------------ ------------
Dividends & Investment income--net:
Distributions to Common Stock (3,121,848) (1,644,233)
Shareholders Preferred Stock (1,148,832) (807,287)
(Note 1f): Realized gain on investments--net:
Common Stock (388,829) --
Preferred Stock (168,735) --
------------ ------------
Net decrease in net assets resulting from dividends
and distributions to shareholders (4,828,244) (2,451,520)
------------ ------------
Capital Stock Proceeds from issuance of Common Stock -- 113,250,000
Transactions Proceeds from issuance of Preferred Stock -- 76,000,000
(Notes 1e & 4): Value of shares issued to Common Stock shareholders in
reinvestment of dividends 368,635 --
Offering costs resulting from the issuance of Common Stock -- (278,202)
Offering and underwriting costs resulting from the
issuance of Preferred Stock -- (707,355)
------------ ------------
Net increase in net assets derived from capital
stock transactions 368,635 188,264,443
------------ ------------
Net Assets: Total increase in net assets 2,443,335 189,818,476
Beginning of period 189,918,481 100,005
------------ ------------
End of period* $192,361,816 $189,918,481
============ ============
<FN>
*Undistributed investment income--net $ 665,507 $ 515,734
============ ============
++Commencement of operations.
See Notes to Financial Statements.
</TABLE>
<TABLE>
FINANCIAL HIGHLIGHTS
<CAPTION>
The following per share data and ratios have been derived For the Six For the Period
from information provided in the financial statements. Months Ended Feb. 27, 1998++
Dec. 31, to June 30,
Increase (Decrease) in Net Asset Value: 1998 1998
<S> <S> <C> <C>
Per Share Net asset value, beginning of period $ 15.08 $ 15.00
Operating ------------ ------------
Performance: Investment income--net .58 .36
Realized and unrealized gain on investments--net .32 .14
------------ ------------
Total from investment operations .90 .50
------------ ------------
Less dividends and distributions to Common Stock shareholders:
Investment income--net (.41) (.22)
Realized gain on investments--net (.05) --
------------ ------------
Total dividends and distributions to Common Stock (.46) (.22)
------------ ------------
Capital charge resulting from issuance of Common Stock -- (.04)
------------ ------------
Effect of Preferred Stock activity++++:
Dividends and distributions to Preferred Stock shareholders:
Investment income--net (.15) (.07)
Realized gain on investments--net (.02) --
Capital charge resulting from issuance of Preferred Stock -- (.09)
------------ ------------
Total effect of Preferred Stock activity (.17) (.16)
------------ ------------
Net asset value, end of period $ 15.35 $ 15.08
============ ============
Market price per share, end of period $ 15.4375 $ 14.5625
============ ============
Total Investment Based on market price per share 9.31%+++ (1.47%)+++
Return:** ============ ============
Based on net asset value per share 4.96%+++ 2.03%+++
============ ============
Ratios to Average Expenses, net of reimbursement .66%* .26%*
Net Assets:*** ============ ============
Expenses .78%* .77%*
============ ============
Investment income--net 4.49%* 5.22%*
============ ============
Supplemental Net assets, net of Preferred Stock, end of period (in thousands) $ 116,362 $ 113,918
Data: ============ ============
Preferred Stock outstanding, end of period (in thousands) $ 76,000 $ 76,000
============ ============
Portfolio turnover 65.33% 28.25%
============ ============
Leverage: Asset coverage per $1,000 $ 2,531 $ 2,499
============ ============
Dividends Series A--Investment income--net $ 377 $ 286
Per Share on ============ ============
Preferred Stock Series B--Investment income--net $ 379 $ 245
Outstanding: ============ ============
<FN>
*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 loads.
***Do not reflect the effect of dividends to Preferred Stock
shareholders.
++Commencement of operations.
++++The Fund's Preferred Stock was issued on March 19, 1998.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
MuniHoldings New York Fund, Inc., December 31, 1998
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
MuniHoldings New York Fund, Inc. (the "Fund") 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 generally accepted accounting principles
which may require the use of management accruals and estimates.
These unaudited financial statements reflect all adjustments which
are, in the opinion of management, necessary to a fair statement of
the results for the interim period presented. All such adjustments
are of a normal recurring nature. 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 MUN. 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 strategies to seek to increase its return by hedging its
portfolio against adverse movements in the debt markets. Losses may
arise due to changes in the value of the contract or if the
counterparty does not perform under the contract.
* 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.
* Options--The Fund is authorized to write covered call options and
purchase call and 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) Deferred organization and offering expenses--Deferred
organization expenses are amortized on a straight-line basis over a
period not exceeding five years. In accordance with Statement of
Position 98-5, any unamortized organization expenses will be
expensed on the first day of the next fiscal year beginning after
December 15, 1998. This charge will not have any 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.
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 0.55% of
the Fund's average weekly net assets, including proceeds from the
issuance of Preferred Stock. For the six months ended December 31,
1998, FAM earned fees of $541,262, of which $118,654 was reimbursed.
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 six months ended December 31, 1998 were $132,033,092 and
$122,250,044, respectively.
Net realized gains (losses) for the six months ended December 31,
1998 and net unrealized gains as of December 31, 1998 were as
follows:
Realized Unrealized
Gains (Losses) Gains
Long-term investments $ 1,405,161 $ 2,980,811
Financial futures contracts (37,537) --
------------ ------------
Total $ 1,367,624 $ 2,980,811
============ ============
As of December 31, 1998, net unrealized appreciation for Federal
income tax purposes aggregated $2,980,811, of which $3,081,821
related to appreciated and $101,010 related to depreciated
securities. The aggregate cost of investments at December 31, 1998
for Federal income tax purposes was $186,202,994.
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 six months ended December
31, 1998 increased by 24,031 as a result of dividend reinvestment
and during the period February 27, 1998 to June 30, 1998 increased
by 7,550,000 as a result of the initial offering.
Preferred Stock
Auction Market Preferred Stock ("AMPS") are shares of Preferred
Stock of the Fund, with a par value of $.05 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
December 31, 1998 were as follows: Series A, 4.50% and Series B,
4.49%.
Shares issued and outstanding during the six months ended December
31, 1998 remained constant and during the period February 27, 1998
to June 30, 1998 increased by 3,040 as a result of the initial
offering.
The Fund pays commissions to certain broker-dealers at the end of
each auction at an annual rate ranging from 0.25% to 0.375%,
calculated on the proceeds of each auction. For the six months ended
December 31, 1998, Merrill Lynch, Pierce, Fenner & Smith
Incorporated, an affiliate of FAM, earned $77,973 as commissions.
5. Capital Loss Carryforward:
At June 30, 1998, the Fund had a net capital loss carryforward of
approximately $827,000, all of which expires in 2006. This amount
will be available to offset like amounts of any future taxable
gains.
6. Subsequent Event:
On January 7, 1999, the Fund's Board of Directors declared an
ordinary income dividend to Common Stock shareholders in the amount
of $.069637 per share, payable on January 28, 1999 to shareholders
of record as of January 22, 1999.
MuniHoldings New York Fund, Inc., December 31, 1998
MANAGED DIVIDEND POLICY
The Fund's dividend policy is to distribute substantially all 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 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.
QUALITY PROFILE
The quality ratings of securities in the Fund as of December 31,
1998 were as follows:
Percent of
S&P Rating/Moody's Rating Net Assets
AAA/Aaa 41.5%
AA/Aa 12.3
A/A 29.6
BBB/Baa 14.5
Other++ 0.4
[FN]
++Temporary investments in short-term municipal securities.
