MUNIHOLDINGS
NEW YORK
FUND, INC.
FUND LOGO
Semi-Annual Report
December 31, 1999
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. 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 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, 1999
DEAR SHAREHOLDER
For the six months ended December 31, 1999, the Common Stock of
MuniHoldings New York Fund, Inc. earned $0.405 per share income
dividends, which included earned and unpaid dividends of $0.064.
This represents a net annualized yield of 6.62%, based on a month-
end net asset value of $12.13 per share. Over the same period, the
Fund's total investment return was -11.32%, based on a change in per
share net asset value from $14.14 to $12.13, and assuming
reinvestment of $0.408 per share income dividends.
For the six-month period ended December 31, 1999, the Fund's
Preferred Stock had an average yield of 3.71% for Series A and 3.38%
for Series B.
The Municipal Market
Environment
The combination of steady strong domestic economic growth,
improvement in foreign economies (most notably in Japan) and
increasing investor concerns regarding potential increases in US
inflation put upward pressure on bond yields throughout the six-
month period ended December 31, 1999. Continued strong US employment
growth and consumer spending were among the reasons the Federal
Reserve Board cited for raising short-term interest rates in late
June, August and November. US Treasury bond yields reacted by
climbing above 6.375% by late October and generally rising for the
remainder of the year. During the period, yields on 30-year US
Treasury bonds increased over 50 basis points (0.50%).
Long-term tax-exempt bond yields also rose during the six months
ended December 31, 1999. For much of the first half of 1999, the
municipal bond market was able to withstand much of the upward
pressure on bond yields. However, investor concerns of additional
moves by the Federal Reserve Board to moderate US economic growth
and, more importantly, the loss of the strong technical support that
the tax-exempt market enjoyed in early 1999 helped push municipal
bond yields significantly higher for the remainder of the period.
The yields on long-term tax-exempt revenue bonds rose over 60 basis
points to 6.23% by December 31, 1999, as measured by the Bond Buyer
Revenue Bond Index.
In recent months, the significant decline in new tax-exempt bond
issuance has remained a positive factor within the municipal bond
market, as it had been for much of the past year. Over the last
year, more than $225 billion in long-term municipal bonds was
issued, a decline of nearly 20% compared to the same period a year
ago. During the past six months, over $100 billion in long-term tax-
exempt bonds was underwritten, representing a decline of nearly 18%
compared to the corresponding period in 1998. Over the past three
months, approximately $55 billion in securities was issued by
municipalities nationally. This quarterly issuance also represented
a decline of over 20% when compared to the same period in 1998. It
is likely that many tax-exempt issuers accelerated their financings
in recent months or decided to postpone issuance into early 2000 to
avoid any potential Year 2000 (Y2K)-related disruptions at year-end.
Consequently, December 1999 volume of issuance of approximately $14
billion declined more than 40% compared to 1998 levels. We expect
decreased tax-exempt bond issuance to continue. Early estimates
suggest that annual tax-exempt issuance in 2000 will be in the $210
billion--$215 billion range.
Although tax-exempt bond yields are at their highest level in over
two years and have attracted significant retail investor interest,
institutional demand has declined sharply. Long-term municipal
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. In addition, the demand from
property/casualty insurance companies has weakened as a result of
the losses, and anticipated losses, incurred as a result of the
series of damaging storms across much of the eastern United States.
Additionally, many institutional investors who were attracted to the
municipal bond market in recent years by historically attractive tax-
exempt bond yield ratios of over 90% have found other asset classes
even more attractive. Even with a reduced supply position, tax-
exempt issuers have been forced to repeatedly raise municipal bond
yields in the attempt to attract adequate demand.
The recent relative underperformance of the municipal bond market
has resulted in an opportunity for long-term investors to purchase
tax-exempt issues whose yields are nearly identical with taxable US
Treasury securities. At December 31, 1999, long-term uninsured
municipal revenue bond yields were more than 96% of comparable US
Treasury securities. In recent months, many taxable asset classes,
such as corporate bonds, mortgage-backed securities and US agency
debt, have all accelerated debt issuance. This acceleration was
initiated largely to avoid issuing securities at year-end and to
minimize any associated Y2K problems that could possibly develop.
However, this increased issuance also resulted in higher yield
levels in the various asset classes, as lower bond prices became
necessary to attract sufficient investor demand. Going forward, it
is believed that the pace of non-US Government debt issuance is
likely to slow significantly. As the supply of this debt declines,
we would expect many institutional investors to return to the
municipal bond market and the attractive yield ratios available.
Looking ahead, it appears to us that long-term tax-exempt bond
yields will remain under pressure, trading in a broad range centered
near current levels. Investors are likely to remain concerned about
future action by the Federal Reserve Board. Any improvement in bond
prices will probably be contingent upon weakening in both US
employment growth and consumer spending. The over 100 basis point
rise in US Treasury bond yields seen thus far this year may
negatively impact US economic growth. The US housing market will be
among the first sectors likely to be affected, as some declines have
already been evidenced in response to higher mortgage rates. We
believe that it is also unrealistic to expect double-digit returns
in US equity markets to continue indefinitely. Much of the US
consumer's wealth is tied to recent stock market appreciation. Any
slowing in these incredible growth rates is likely to reduce
consumer spending. We believe that these factors suggest that the
worst of the recent increase in bond yields has passed and stable,
if not slightly improving, bond prices may be expected.
MuniHoldings New York Fund, Inc., December 31, 1999
In Conclusion
On September 23, 1999, the Fund's Board of Directors approved a plan
of reorganization, subject to shareholder approval and certain other
conditions, whereby MuniHoldings New York Insured Fund, Inc. would
acquire substantially all of the assets and liabilities of the Fund,
MuniHoldings New York Insured Fund II, Inc. and MuniHoldings New
York Insured Fund III, Inc. in exchange for newly issued shares of
MuniHoldings New York Insured Fund, Inc. These Funds are registered,
non-diversified, closed-end managed investment companies. All four
entities have a similar investment objective and are managed by Fund
Asset Management, L.P.
We appreciate your interest in MuniHoldings New York Fund, Inc.
Sincerely,
(Terry K. Glenn)
Terry K. Glenn
President and Director
(Vincent R. Giordano)
Vincent R. Giordano
Senior Vice President
(Robert A. DiMella)
Robert A. DiMella
Vice President and
Portfolio Manager
(Robert D. Sneeden)
Robert D. Sneeden
Vice President and
Portfolio Manager
February 7, 2000
PROXY RESULTS
During the six-month period ended December 31, 1999 MuniHoldings New
York Fund, Inc.'s Common Stock shareholders voted on the following
proposals. With respect to Proposal 1, the meeting was adjourned
until January 20, 2000. Proposals 2 and 3 were approved at a
shareholders' meeting on December 15, 1999. The description of each
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 New York Insured Fund, Inc., MuniHoldings New York
Insured Fund II, Inc. and MuniHoldings New York Insured Fund III, Inc. Adjourned Adjourned Adjourned
<CAPTION>
Shares Voted Shares Withheld
For From Voting
<S> <S> <C> <C>
2. To elect the Fund's Board
of Directors: Terry K. Glenn 7,164,522 136,388
Herbert I. London 7,161,187 139,723
Robert R. Martin 7,163,522 137,388
Andre F. Perold 7,163,522 137,388
Arthur Zeikel 7,164,522 136,388
<CAPTION>
Shares Voted Shares Voted Shares Voted
For Against Abstain
<S> <C> <C> <C>
3. To ratify the selection of Deloitte & Touche LLP as the Fund's
independent auditors for the current fiscal year. 7,069,702 53,268 177,940
</TABLE>
During the six-month period ended December 31, 1999, MuniHoldings
New York Fund, Inc.'s Preferred Stock shareholders voted on the
following proposals. With respect to Proposal 1, the meeting was
adjourned until January 20, 2000. Proposals 2 and 3 were approved at
a shareholders' meeting on December 15, 1999. The description of
each 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 New York Insured Fund, Inc., MuniHoldings
New York Insured Fund II, Inc. and MuniHoldings New York Insured
Fund III, Inc. Adjourned Adjourned Adjourned
<CAPTION>
Shares Voted Shares Withheld
For From Voting
<S> <C> <C>
2. To elect the Fund's Board of Directors: James H. Bodurtha, Terry K. Glenn,
Herbert I. London, Robert R. Martin, Joseph L. May, Andre F. Perold,
Arthur Zeikel as follows:
Series A 1,138 329
Series B 1,358 2
<CAPTION>
Shares Voted Shares Voted Shares Voted
For Against Abstain
<S> <C> <C> <C>
3. To ratify the selection of Deloitte & Touche LLP as the Fund's independent
auditors for the current fiscal year as follows:
Series A 1,138 2 327
Series B 1,335 18 7
</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)
DATES Daily Adjustable Tax-Exempt Securities
GO General Obligation Bonds
IDA Industrial Development Authority
PCR Pollution Control Revenue Bonds
RITR Residual Interest Trust Receipts
VRDN Variable Rate Demand Notes
MuniHoldings New York Fund, Inc., December 31, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (in Thousands)
<CAPTION>
S&P Moody's Face
STATE Ratings Ratings Amount Issue Value
<S> <S> <S> <C> <S> <C>
New York NR* Aaa $ 5,000 Battery Park City Authority, New York, Revenue Bonds, RITR,
- --93.6% Series 25, 4.92% due 11/01/2026 (a)(f) $ 4,104
Buffalo, New York, GO, Series E (d):
AAA Aaa 1,035 6% due 12/01/2015 1,054
AAA Aaa 1,165 6% due 12/01/2017 1,175
AAA Aaa 1,310 6% due 12/01/2019 1,307
AAA Aaa 2,000 Buffalo, New York, Municipal Water Finance Authority, Water
System Revenue Bonds, 5% due 7/01/2025 (c) 1,699
Erie County, New York, GO, Public Improvement, Series A (c):
AAA Aaa 1,025 5.75% due 10/01/2013 1,049
AAA Aaa 1,450 5.75% due 10/01/2014 1,470
AAA Aaa 5,750 Long Island Power Authority, New York, Electric System Revenue
Refunding Bonds, Series A, 5.50% due 12/01/2029 (e) 5,248
AAA Aaa 1,000 Metropolitan Transportation Authority, New York, Commuter
Facilities Revenue Refunding Bonds, Series D, 5.125% due
7/01/2022 (e) 875
AAA Aaa 2,690 Nassau County, New York, IDA, Civic Facility Revenue
Refunding Bonds (Hofstra University Project), 5% due
7/01/2023 (e) 2,302
AAA Aaa 2,200 Nassau Health Care Corporation, New York, Health System
Revenue Bonds, 5.75% due 8/01/2029 (d) 2,089
New York City, New York, City Municipal Water Finance
Authority, Water and Sewer System Revenue Refunding Bonds (c):
AAA Aaa 7,250 Series A, 5.50% due 6/15/2023 6,702
AAA Aaa 4,750 Series B, 5.25% due 6/15/2029 4,148
New York City, New York, City Transitional Finance Authority
Revenue Bonds, Future Tax Secured:
AA Aa3 2,500 Series A, 6% due 8/15/2029 2,456
AA Aa3 5,000 Series C, 5% due 5/01/2026 4,213
VMIG1++ Aa3 1,800 VRDN, Series C, 4.50% due 5/01/2028 (g) 1,800
A- A3 5,000 New York City, New York, GO, Refunding, Series H, 5.125%
due 8/01/2025 4,247
New York City, New York, GO, Series J:
A- A3 1,000 5.50% due 2/15/2026 903
AAA Aaa 7,500 5.125% due 5/15/2029 (e) 6,380
A1+ NR* 3,800 New York City, New York, Housing Development Corporation,
Residential Mortgage Revenue Bonds (East 17th Street), VRDN,
Series A, 4.45% due 1/01/2023 (g) 3,800
New York City, New York, IDA, Civic Facilities Revenue Bonds:
BBB NR* 1,000 (College of Aeronautics Project), 5.45% due 5/01/2018 893
A A3 5,765 (Nightingale-Bamford School Project), 5.85% due 1/15/2020 5,529
A A2 6,750 New York City, New York, IDA, Special Facilities Revenue Bonds
(British Airways PLC Project), AMT, 5.25% due 12/01/2032 5,536
New York State Dormitory Authority Revenue Bonds:
AAA Aaa 2,200 (853 Schools Program), Issue 2, Series D, 5% due 7/01/2018 (a) 1,925
AAA Aaa 1,340 (853 Schools Program), Issue 2, Series E, 5.75% due
7/01/2019 (a) 1,299
AAA NR* 3,470 (Court Facilities Lease Program), Series A, 5.625% due
5/15/2013 (e) 3,477
AAA Aaa 7,550 (Court Facilities Lease Program), Series A, 5.25%
due 5/15/2021 (e) 6,772
AAA Aaa 4,500 (Library Facilities--Service Contract), 5.25% due
7/01/2019 (b) 4,034
AAA A3 5,485 (Mental Health Services Facilities Improvement), Series D,
5.125% due 8/15/2027 (d) 4,665
A- Baa1 6,750 (Secured Hospital--Interfaith Medical Center), Series D,
5.40% due 2/15/2028 5,826
A- Baa1 1,750 (Secured Hospital--Saint Agnes Hospital), Series A, 5.40%
due 2/15/2025 1,527
New York State Dormitory Authority, Revenue Refunding Bonds:
AAA Aaa 5,000 (City University), Series F, 5.50% due 7/01/2012 (c) 5,012
NR* Aaa 2,920 (Culinary Institute of America), 5.375% due 7/01/2015 (e) 2,794
A A3 2,000 (State University Educational Facilities), 5.125% due 5/15/2021 1,728
AAA Aaa 1,455 (University of Rochester), Series A, 5.125% due 7/01/2022 (e) 1,273
AAA Aaa 3,500 (University of Rochester), Series A, 5% due 7/01/2023 (e) 2,995
AA Aa3 4,000 (Vassar College), 5% due 7/01/2025 3,389
A- Baa3 5,000 New York State Energy Research and Development Authority,
Electric Facilities Revenue Bonds (LILCO Project), AMT,
Series B, 5.30% due 11/01/2023 4,312
AAA Aaa 3,500 New York State Energy Research and Development Authority,
Facilities Revenue Refunding Bonds (Consolidated Edison
Company of New York), Series A, 6.10% due 8/15/2020 (e) 3,517
New York State Energy Research and Development Authority, PCR:
AAA NR* 2,000 (New York State Electric and Gas Co. Project), AMT, Series A,
6.15% due 7/01/2026 (e) 1,977
A1+ NR* 500 (Niagara Mohawk Power Corporation Project), DATES, Series A,
4.25% due 7/01/2015 (g) 500
A1+ NR* 1,500 (Niagara Mohawk Power Corporation Project), VRDN, AMT, Series B,
4.40% due 7/01/2027 (g) 1,500
AAA Aaa 2,000 New York State Energy Research and Development Authority, PCR,
Refunding (Niagara Mohawk Power Corporation Project), Series A,
5.15% due 11/01/2025 (a) 1,737
New York State Mortgage Agency Revenue Bonds, Homeowner Mortgage:
NR* Aa2 7,435 AMT, Series 69, 5.40% due 10/01/2019 6,738
AAA Aaa 3,000 Series 89, 6% due 10/01/2017 (e) 2,996
NR* Aaa 4,900 New York State Mortgage Agency Revenue Bonds, Series 41-A, 6.45%
due 10/01/2014 5,068
NR* Aaa 1,500 New York State Thruway Authority, Service Contract Revenue Bonds
(Local Highway and Bridge), 5.75% due 4/01/2015 (e) 1,497
New York State Urban Development Corporation Revenue Bonds:
AAA Aaa 5,000 (Correctional Capital Facilities), Series 5, 5.50% due
1/01/2025 (e) 4,594
AAA Aaa 2,500 (Correctional Facilities Service Contract), Series C, 6%
due 1/01/2029 (a) 2,459
NR* Aaa 2,500 RITR, Series 26, 4.92% due 1/01/2025 (e)(f) 2,094
AAA NR* 1,000 Niagara, New York, Frontier Authority, Airport Revenue Bonds
(Buffalo Niagara International Airport), AMT, 5% due
4/01/2018 (c) 867
AAA Aaa 1,700 Oneida County, New York, IDA, Civic Facilities Revenue Bonds
(Mohawk Valley), Series A, 5.20% due 2/01/2013 (d) 1,603
Puerto AAA NR* 8,920 Puerto Rico Public Buildings Authority Revenue Bonds (Government
Rico--4.8% Facilities), Series B, 5.25% due 7/01/2021 (d) 8,138
Total Investments (Cost--$180,377)--98.4% 165,292
Other Assets Less Liabilities--1.6% 2,643
---------
Net Assets--100.0% $ 167,935
=========
*Not Rated.
++Highest short-term rating by Moody's Investors Service, Inc.
(a)AMBAC Insured.
(b)CAPMAC Insured.
(c)FGIC Insured.
(d)FSA Insured.
(e)MBIA Insured.
(f)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 December 31, 1999.
(g)The interest rate is subject to change periodically based upon
prevailing market rates. The interest rate shown is the rate in
effect at December 31, 1999.
See Notes to Financial Statements.
</TABLE>
MuniHoldings New York Fund, Inc., December 31, 1999
<TABLE>
STATEMENT OF ASSETS, LIABILITIES AND CAPITAL
<CAPTION>
As of December 31, 1999
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$180,377,100) $165,292,157
Cash 139,798
Interest receivable 2,867,620
Prepaid expenses 11,656
------------
Total assets 168,311,231
------------
Liabilities: Payables:
Dividends to shareholders $ 199,113
Investment adviser 80,113
Offering costs 13,443 292,669
------------
Accrued expenses 83,171
------------
Total liabilities 375,840
------------
Net Assets: Net assets $167,935,391
============
Capital: Capital Stock (200,000,000 shares authorized):
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 600,927
Accumulated realized capital losses on investments--net (6,313,676)
Unrealized depreciation on investments--net (15,084,943)
------------
Total--Equivalent to $12.13 net asset value per share of Common
Stock (market price--$11.125) 91,935,391
------------
Total capital $167,935,391
============
*Auction Market Preferred Stock.
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENT OF OPERATIONS
<CAPTION>
For the Six Months Ended December 31, 1999
<S> <S> <C> <C>
Investment Interest and amortization of premium and discount earned $ 5,044,219
Income:
Expenses: Investment advisory fees $ 492,935
Commission fees 96,787
Professional fees 38,351
Accounting services 26,137
Transfer agent fees 22,957
Organization expenses 11,899
Directors' fees and expenses 11,657
Listing fees 8,115
Custodian fees 7,625
Printing and shareholder reports 6,629
Pricing fees 3,232
Other 8,832
------------
Total expenses before reimbursement 735,156
Reimbursement of expenses (51,582)
------------
Total expenses after reimbursement 683,574
------------
Investment income--net 4,360,645
------------
Realized & Realized loss on investments--net (5,968,040)
Unrealized Change in unrealized depreciation on investments--net (9,146,037)
Loss on ------------
Investments Net Decrease in Net Assets Resulting from Operations $(10,753,432)
- --Net: ============
See Notes to Financial Statements.
</TABLE>
MuniHoldings New York Fund, Inc., December 31, 1999
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
<CAPTION>
For the Six For the
Months Ended Year Ended
December 31, June 30,
Increase (Decrease) in Net Assets: 1999 1999
<S> <S> <C> <C>
Operations: Investment income--net $ 4,360,645 $ 8,663,073
Realized gain (loss) on investments--net (5,968,040) 1,039,531
Change in unrealized appreciation/depreciation on investments--net (9,146,037) (7,804,850)
------------ ------------
Net increase (decrease)in net assets resulting from operations (10,753,432) 1,897,754
------------ ------------
Dividends & Investment income--net:
Distributions to Common Stock (3,094,820) (6,180,250)
Shareholders: Preferred Stock (1,373,381) (2,290,033)
Realized gain on investments--net:
Common Stock -- (388,828)
Preferred Stock -- (168,735)
------------ ------------
Net decrease in net assets resulting from dividends and
distributions to shareholders (4,468,201) (9,027,846)
------------ ------------
Capital Stock Value of shares issued to Common Stock shareholders in
Transactions: reinvestment of dividends and distributions -- 368,635
------------ ------------
Net Assets: Total decrease in net assets (15,221,633) (6,761,457)
Beginning of period 183,157,024 189,918,481
------------ ------------
End of period* $167,935,391 $183,157,024
============ ============
*Undistributed investment income--net $ 600,927 $ 708,483
============ ============
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 For the Period
from information provided in the financial statements. Months Ended Year Ended Feb. 27, 1998++
December 31, June 30, to June 30,
Increase (Decrease) in Net Asset Value: 1999 1999 1998
<S> <S> <C> <C> <C>
Per Share Net asset value, beginning of period $ 14.14 $ 15.08 $ 15.00
Operating ------------ ------------ ------------
Performance: Investment income--net .58 1.14 .36
Realized and unrealized gain (loss) on
investments--net (2.00) (.89) .14
------------ ------------ ------------
Total from investment operations (1.42) .25 .50
------------ ------------ ------------
Less dividends and distributions to Common Stock
shareholders:
Investment income--net (.41) (.82) (.22)
Realized gain on investments--net -- (.05) --
------------ ------------ ------------
Total dividends and distributions to Common
Stock shareholders (.41) (.87) (.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 (.18) (.30) (.07)
Realized gain on investments--net -- (.02) --
Capital charge resulting from issuance of Preferred
Stock -- -- (.09)
------------ ------------ ------------
Total effect of Preferred Stock activity (.18) (.32) (.16)
------------ ------------ ------------
Net asset value, end of period $ 12.13 $ 14.14 $ 15.08
============ ============ ============
Market price per share, end of period $ 11.125 $ 13.25 $ 14.5625
============ ============ ============
Total Investment Based on market price per share (13.20%)+++ (3.55%) (1.47%)+++
Return:** ============ ============ ============
Based on net asset value per share (11.32%)+++ (.60%) 2.03%+++
============ ============ ============
Ratios Based on Total expenses, net of reimbursement*** 1.34%* 1.15% .43%*
Average Net ============ ============ ============
Assets of Total expenses*** 1.44%* 1.29% 1.25%*
Common Stock: ============ ============ ============
Total investment income--net*** 8.57%* 7.50% 8.42%*
============ ============ ============
Amount of dividends to Preferred Stock
shareholders 2.70%* 1.98% 2.29%*
============ ============ ============
Investment income--net, to Common Stock
shareholders 5.87%* 5.52% 6.13%*
============ ============ ============
Ratios Based on Total expenses, net of reimbursement .76%* .69% .26%*
Total Average ============ ============ ============
Net Total expenses .82%* .78% .77%*
Assets:++++++*** ============ ============ ============
Total investment income--net 4.87%* 4.52% 5.22%*
============ ============ ============
Ratios Based on Dividends to Preferred Stock shareholders 3.55%* 3.01% 3.73%*
Average Net ============ ============ ============
Assets of
Preferred
Stock:
Supplemental Net assets, net of Preferred Stock, end of
Data: period (in thousands) $ 91,935 $ 107,157 $ 113,918
============ ============ ============
Preferred Stock outstanding, end of period
(in thousands) $ 76,000 $ 76,000 $ 76,000
============ ============ ============
Portfolio turnover 49.09% 100.06% 28.25%
============ ============ ============
Leverage: Asset coverage per $1,000 $ 2,210 $ 2,410 $ 2,499
============ ============ ============
Dividends Series A--Investment income--net $ 473 $ 745 $ 286
Per Share on ============ ============ ============
Preferred Stock Series B--Investment income--net $ 430 $ 762 $ 245
Outstanding: ============ ============ ============
*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.
***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.
++++++Includes Common and Preferred Stock average net assets.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
MuniHoldings New York Fund, Inc., December 31, 1999
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) Organization and offering expenses--In accordance with Statement
of Position 98-5, unamortized organization expenses of $11,899 were
expensed during the six months ended December 31, 1999. 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.
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 six months ended December 31,
1999, FAM earned fees of $492,935, of which $51,582 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 six months ended December 31, 1999 were $81,671,550 and
$86,056,273, respectively.
Net realized gains (losses) for the six months ended December 31,
1999 and net unrealized losses as of December 31, 1999 were as
follows:
Realized Unrealized
Gains (Losses) Losses
Long-term investments $ (6,091,251) $(15,084,943)
Financial futures contracts 123,211 --
-------------- ------------
Total $ (5,968,040) $(15,084,943)
============== ============
As of December 31, 1999, net unrealized depreciation for Federal
income tax purposes aggregated $15,084,943, all of which related to
depreciated securities. The aggregate cost of investments at
December 31, 1999 for Federal income tax purposes was $180,377,100.
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, 1999 remained constant and during the year ended June 30, 1999
increased by 24,031 as a result of dividend reinvestment.
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
December 31, 1999 were as follows: Series A, 4.85% and Series B,
4.80%.
Shares issued and outstanding during the six months ended December
31, 1999 and 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 six months ended
December 31, 1999, Merrill Lynch, Pierce, Fenner & Smith
Incorporated, an affiliate of FAM, earned $48,524 as commissions.
5. Reorganization Plan:
On September 23, 1999, the Fund's Board of Directors approved a plan
of reorganization, subject to shareholder approval and certain other
conditions, whereby MuniHoldings New York Insured Fund, Inc. would
acquire substantially all of the assets and liabilities of the Fund,
MuniHoldings New York Insured Fund II, Inc. and MuniHoldings New
York Insured Fund III, Inc. in exchange for newly issued shares of
MuniHoldings New York Insured Fund, Inc. These Funds are registered,
non-diversified, closed-end management investment companies. All
four entities have a similar investment objective and are managed by
FAM.
6. Subsequent Event:
On January 6, 2000, the Fund's Board of Directors declared an
ordinary income dividend to Common Stock shareholders in the amount
of $.064000 per share, payable on January 28, 2000 to shareholders
of record as of January 18, 2000.
MuniHoldings New York Fund, Inc., December 31, 1999
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. 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,
1999 were as follows:
Percent of
S&P Rating/Moody's Rating Net Assets
AAA/Aaa 65.8%
AA/Aa 10.0
A/A 17.6
BBB/Baa 0.5
Other++ 4.5
++Temporary investments in short-term municipal securities.
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
Kenneth A. Jacob, Vice President
Robert A. DiMella, Vice President
Robert D. Sneeden, 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
MUN
Robert R. Martin, Director of MuniHoldings New York Fund, Inc. has
recently retired. The Fund's Board of Directors wishes Mr. Martin
well in his retirement.
