MUNIHOLDINGS
NEW JERSEY
INSURED
FUND IV, INC.
FUND LOGO
Semi-Annual Report
November 30, 1999
This report, including the financial information herein, is
transmitted to the shareholders of MuniHoldings New Jersey Insured
Fund IV, 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. 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. Past performance
results shown in this report should not be considered a
representation of future performance. Statements and other
information herein are as dated and are subject to change.
MuniHoldings New Jersey
Insured Fund IV, Inc.
Box 9011
Princeton, NJ
08543-9011
Printed on post-consumer recycled paper
MUNIHOLDINGS NEW JERSEY INSURED FUND IV, INC.
The Benefits and
Risks of
Leveraging
MuniHoldings New Jersey Insured Fund IV, 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 American 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 Jersey Insured Fund IV, Inc., November 30, 1999
DEAR SHAREHOLDER
We are pleased to provide you with this first semi-annual report for
MuniHoldings New Jersey Insured IV, Inc. In this and future reports
to shareholders, we will highlight the Fund's performance, describe
the recent investment environment and outline investment activities.
The Fund seeks to provide shareholders with current income exempt
from Federal income tax and New Jersey personal income taxes by
investing in a portfolio of long-term, investment-grade municipal
obligations.
Since inception (July 23, 1999) through November 30, 1999,
MuniHoldings New Jersey Insured Fund IV, Inc. earned $0.293 per
share income dividends, which included earned and unpaid dividends
of $0.067. This represents a net annualized yield of 5.89%, based on
a month-end net asset value of $13.84 per share. Over the same
period, the Fund's total investment return was -6.11%, based on a
change in per share net asset value from $15.00 to $13.84, and
assuming reinvestment of $0.226 per share income dividends.
For the period July 23, 1999 through November 30, 1999, the Fund's
Auction Market Preferred Stock had an average yield of 3.25%.
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 November 30, 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 into November. During the
period, yields on 30-year US Treasury bonds increased over 45 basis
points (0.45%).
Long-term tax-exempt bond yields also rose during the six months
ended November 30, 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 70 basis
points to 6.14% by November 30, 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 $230 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 $115 billion in long-term tax-
exempt bonds was underwritten, representing a decline of nearly 15%
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 represented a
decline of over 5% when compared to the same period in 1998. It is
likely that many tax-exempt issuers have accelerated their
financings in recent months to avoid any potential Year 2000
(Y2K)-related disruptions at year-end. It is likely that this increased
new-issue volume in October and November is at the expense of future
bond issuance, particularly in early 2000. Consequently, the
municipal market's positive technical position is likely to continue
into early next year.
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 November 30, 1999, long-term uninsured
municipal revenue bond yields were almost 98% 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 may develop. However, this
increased issuance has also resulted in higher yield levels in the
various asset classes as lower bond prices became necessary to
attract sufficient investor demand. Going forward, we believe 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. We believe Y2K
considerations have prohibited any further Federal Reserve Board
moves from the end of the year and the beginning of 2000. Any
improvement in bond prices will probably be contingent upon
weakening in both US employment growth and consumer spending. The
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.
Portfolio Strategy
MuniHoldings New Jersey Insured Fund IV, Inc. was initially
structured during the four-month period ended November 30, 1999. Our
main priority during this period was to invest the Fund so that
dividend payments could begin as soon as possible. We attempted to
structure the Fund with the highest coupons available in the market
to seek to generate a higher level of tax-exempt income for
shareholders.
Since the Fund's inception on July 23, 1999 to November 30, 1999,
long-term municipal interest rates rose about 45 basis points. While
this was not beneficial to the Fund's total return, it allowed us to
structure the Fund with an even higher average coupon than was
available when the Fund was established. This further supported our
effort to enhance tax-exempt income.
Looking ahead, we believe that the rise in interest rates has been
excessive relative to the amount of inflation that is evident in the
economy. Therefore, with interest rates at attractive levels, we
expect to invest the remainder of the Fund's cash reserves in an
effort to increase the Fund's tax-exempt income before interest
rates return to levels consistent with the current inflationary
environment.
In Conclusion
We appreciate your investment in MuniHoldings New Jersey Insured
Fund IV, Inc., and we look forward to assisting you with your
financial needs in the months and years ahead.
Sincerely,
(Terry K. Glenn)
Terry K. Glenn
President and Director
(Vincent R. Giordano)
Vincent R. Giordano
Senior Vice President
(Roberto Roffo)
Roberto Roffo
Vice President and Portfolio Manager
December 28, 1999
MuniHoldings New Jersey Insured Fund IV, Inc., November 30, 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 Jersey--97.3% NR* Aaa $ 4,400 Essex County, New Jersey, Utilities Authority, Solid
Waste Revenue Refunding Bonds, Series A, 4.80%
due 4/01/2014 (c) $ 4,024
AAA Aaa 3,800 Essex County, New Jersey, Utility System Improvement
Authority Revenue Bonds (Orange Franchise), Series A,
5.75% due 7/01/2027 (d) 3,748
AAA NR* 1,500 Hudson County, New Jersey, Improvement Authority,
Lease Revenue Refunding Bonds (Hudson County Lease Project),
5.40% due 10/01/2025 (b) 1,414
Jersey City, New Jersey, Quality Public Improvement,
GO, Refunding, Series B (d):
AAA Aaa 1,990 5.375% due 9/01/2017 1,927
AAA Aaa 1,545 5.375% due 9/01/2018 1,486
AAA NR* 1,120 Metuchen, New Jersey, School District, GO, 5.20% due
9/15/2022 (b) 1,034
AAA Aaa 1,400 Moorestown Township, New Jersey, School District, GO,
5% due 1/01/2024 (b) 1,251
AAA Aaa 2,804 Mount Laurel Township, New Jersey, Board of Education,
GO, 5.60% due 8/01/2019 (b) 2,758
BBB- NR** 3,500 New Jersey EDA, First Mortgage Revenue Refunding Bonds
(Fellowship Village), Series A, 5.50% due 1/01/2018 3,092
NR* Aaa 3,155 New Jersey EDA, Natural Gas Facilities Revenue Refunding
Bonds, RIB, AMT, Series 161, 7.20% due 6/01/2032 (d)(e) 2,926
New Jersey EDA, Parking Facility Revenue Bonds (Elizabeth
Development Company Project) (b):
AAA Aaa 1,430 5.60% due 10/15/2019 1,393
AAA Aaa 1,000 5.60% due 10/15/2026 966
AAA Aaa 2,000 New Jersey EDA, Water Facilities Revenue Bonds (American
Water Company Inc.), AMT, Series A, 5.25% due 7/01/2038 (b) 1,778
New Jersey EDA, Water Facilities Revenue Refunding
Bonds, Series A:
AAA Aaa 850 (Middlesex Water Company Project), AMT, 5.25% due
2/01/2029 (d) 770
AAA VMIG1++ 1,800 (United Water New Jersey Inc. Project), VRDN, 3.70%
due 11/01/2026 (a)(f) 1,800
New Jersey Health Care Facilities Financing Authority,
Revenue Refunding Bonds:
AAA Aaa 2,500 (Hackensack University Medical Center), Series B, 5.20%
due 1/01/2028 (d) 2,249
AAA Aaa 5,750 (Meridan Health System Obligation Group), 5.375%
due 7/01/2024 (c) 5,361
AAA Aaa 2,000 New Jersey State Educational Facilities Authority Revenue
Bonds (Princeton Theological), Series B, 5.90% due 7/01/2026 2,008
New Jersey State Housing and Mortgage Finance Agency,
Home Buyer Revenue Bonds, AMT (d):
AAA Aaa 4,000 Series K, 6.375% due 10/01/2026 4,107
AAA Aaa 5,000 Series M, 7% due 10/01/2026 5,291
AAA Aaa 3,000 New Jersey State Transportation Trust Fund Authority,
Transportation System Revenue Bonds, Series A, 4.50%
due 6/15/2019 (c) 2,489
NR* Aaa 3,165 Port Authority of New York and New Jersey, Special
Obligation Revenue Bonds (JFK International Air Terminal
LLC), RIB, AMT, Series 157, 7.25% due 12/01/2022 (d)(e) 3,023
AAA Aaa 2,000 Salem County, New Jersey, Industrial Pollution Control
Financing Authority, Revenue Refunding Bonds (Public Service
Electric & Gas), Series C, 5.55% due 11/01/2033 (d) 1,903
AAA Aaa 3,035 South Jersey Transportation Authority, New Jersey,
Transportation System, Revenue Refunding Bonds, 5.125%
due 11/01/2022 (a) 2,766
AAA NR* 3,000 Sparta Township, New Jersey, School District, GO,
Refunding, 5% due 9/01/2026 (d) 2,653
Stafford Township, New Jersey, GO, Refunding (b):
NR* Aaa 1,010 4.80% due 2/01/2021 878
NR* Aaa 1,070 4.80% due 2/01/2023 921
NR* Aaa 1,097 4.80% due 2/01/2024 941
Wall Township, New Jersey, School District, GO (c):
AAA Aaa 2,235 4.50% due 7/15/2020 1,857
AAA Aaa 1,000 4.75% due 7/15/2023 852
Puerto Rico--1.3% AAA NR* 1,000 Puerto Rico Electric Power Authority, Power Revenue
Bonds, Series DD, 5% due 7/01/2028 (c) 877
Total Investments (Cost--$71,384)--98.6% 68,543
Other Assets Less Liabilities--1.4% 959
---------
Net Assets--100.0% $ 69,502
=========
<FN>
(a)AMBAC Insured.
(b)FGIC Insured.
(c)FSA Insured.
(d)MBIA Insured.
(e)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 November 30, 1999.
(f)The interest rate is subject to change periodically based upon
prevailing market rates. The interest rate shown is the rate in
effect at November 30, 1999.
*Not Rated.
++Highest short-term rating by Moody's Investors Service, Inc.
See Notes to Financial Statements.
</TABLE>
Portfolio Abbreviations
To simplify the listings of MuniHoldings New Jersey Insured Fund IV,
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)
EDA Economic Development Authority
GO General Obligation Bonds
RIB Residual Interest Bonds
VRDN Variable Rate Demand Notes
MuniHoldings New Jersey Insured Fund IV, Inc., November 30, 1999
<TABLE>
STATEMENT OF ASSETS, LIABILITIES AND CAPITAL
<CAPTION>
As of November 30, 1999
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$71,383,912) $ 68,543,362
Cash 96,077
Receivables:
Interest receivable $ 1,153,760
Investment adviser 13,410 1,167,170
------------ ------------
Total assets 69,806,609
------------
Liabilities: Payables:
Offering costs 90,995
Dividends to shareholders 85,263 176,258
------------
Accrued expenses and other liabilities 128,391
------------
Total liabilities 304,649
------------
Net Assets: Net assets $ 69,501,960
============
Capital: Capital Stock (200,000,000 shares authorized):
Preferred Stock, par value $.10 per share (1,120 shares of
AMPS* issued and outstanding at $25,000
per share liquidation preference) $ 28,000,000
Common Stock, par value $.10 per share (2,997,815 shares
issued and outstanding) $ 299,782
Paid-in capital in excess of par 44,187,431
Undistributed investment income--net 260,596
Accumulated realized capital losses on investments--net (405,299)
Unrealized depreciation on investments--net (2,840,550)
------------
Total--Equivalent to $13.84 net asset value per share
of Common Stock (market price--$12.125) 41,501,960
------------
Total capital $ 69,501,960
============
<FN>
*Auction Market Preferred Stock.
See Notes to Financial Statements.
</TABLE>
<TABLE>
STATEMENT OF OPERATIONS
<CAPTION>
For the Period July 23, 1999++ to November 30, 1999
<S> <S> <C> <C>
Investment Interest and amortization of premium and discount earned $ 1,294,420
Income:
Expenses: Investment advisory fees $ 126,263
Commission fees 22,586
Accounting services 16,175
Professional fees 13,535
Transfer agent fees 9,617
Directors' fees and expenses 7,182
Custodian fees 2,890
Listing fees 2,869
Printing and shareholder reports 2,243
Pricing fees 1,771
Other 1,852
------------
Total expenses before reimbursement 206,983
Reimbursement of expenses (116,278)
------------
Total expenses after reimbursement 90,705
------------
Investment income--net 1,203,715
------------
Realized & Realized loss on investments--net (405,299)
Unrealized Loss on Unrealized depreciation on investments--net (2,840,550)
Investments--Net: ------------
Net Decrease in Net Assets Resulting from Operations $ (2,042,134)
============
<FN>
++Commencement of operations.
See Notes to Financial Statements.
</TABLE>
MuniHoldings New Jersey Insured Fund IV, Inc., November 30, 1999
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<CAPTION>
For the Period
July 23, 1999++ to
Increase (Decrease) in Net Assets: November 30, 1999
<S> <S> <C>
Operations: Investment income--net $ 1,203,715
Realized loss on investments--net (405,299)
Unrealized depreciation on investments--net (2,840,550)
------------
Net decrease in net assets resulting from operations (2,042,134)
------------
Dividends to Investment income--net:
Shareholders: Common Stock (676,190)
Preferred Stock (266,929)
------------
Net decrease in net assets resulting from dividends to shareholders (943,119)
------------
Capital Stock Proceeds from issuance of Common Stock 44,867,220
Transactions: Proceeds from issuance of Preferred Stock 28,000,000
Offering costs resulting from the issuance of Common Stock (131,258)
Offering and underwriting costs resulting from the issuance of Preferred Stock (348,754)
------------
Net increase in net assets derived from capital stock transactions 72,387,208
------------
Net Assets: Total increase in net assets 69,401,955
Beginning of period 100,005
------------
End of period* $ 69,501,960
============
<FN>
*Undistributed investment income--net $ 260,596
============
++Commencement of operations.
See Notes to Financial Statements.
</TABLE>
<TABLE>
FINANCIAL HIGHLIGHTS
<CAPTION>
The following per share data and ratios have been derived
from information provided in the financial statements. For the Period
July 23, 1999++ to
Increase (Decrease) in Net Asset Value: November 30, 1999
<S> <S> <C>
Per Share Net asset value, beginning of period $ 15.00
Operating ---------
Performance: Investment income--net .41
Realized and unrealized loss on investments--net (1.09)
---------
Total from investment operations (.68)
---------
Less dividends to Common Stock shareholders:
Investment income--net (.23)
---------
Total dividends to Common Stock shareholders (.23)
---------
Capital charge resulting from issuance of Common Stock (.04)
---------
Effect of Preferred Stock activity:++++
Dividends to Preferred Stock shareholders:
Investment income--net (.09)
Capital charge resulting from issuance of Preferred Stock (.12)
---------
Total effect of Preferred Stock activity (.21)
---------
Net asset value, end of period $ 13.84
=========
Market price per share, end of period $ 12.125
=========
Total Investment Based on market price per share (17.74%)+++
Return:** =========
Based on net asset value per share (6.11%)+++
=========
Ratios Based on Total expenses, net of reimbursement*** .62%*
Average Net Assets =========
Of Common Stocks: Total expenses*** 1.40%*
=========
Total investment income--net*** 8.16%*
=========
Amount of dividends to Preferred Stock shareholders 1.81%*
=========
Investment income--net, to Common Stock shareholders 6.35%*
=========
Ratios Based on Total expenses, net of reimbursement .40%*
Total Average =========
Net Assets:++++++*** Total expenses .90%*
=========
Total investments income--net 5.24%*
=========
Ratios Based on Dividends to Preferred Stock shareholders 3.25%*
Average Net =========
Assets of
Preferred Stocks:
Supplemental Net assets, net of Preferred Stock, end of period (in thousands) $ 41,502
Data: =========
Preferred Stock outstanding, end of period (in thousands) $ 28,000
=========
Portfolio turnover 40.34%
=========
Leverage: Asset coverage per $1,000 $ 2,482
=========
Dividends Per Investment income--net $ 238
Share on =========
Preferred Stock
Outstanding:
<FN>
*Annualized.
**Total investment returns based on market value, which can be
significantly greater or less 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 August 16, 1999.
++++++Includes Common and Preferred Stock average net assets.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
MuniHoldings New Jersey Insured Fund IV, Inc., November 30, 1999
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
MuniHoldings New Jersey Insured Fund IV, 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. Prior to commencement of operations on July 23,
1999, the Fund had no operations other than those relating to
organizational matters and the sale of 6,667 shares of Common Stock
on June 15, 1999, to Fund Asset Management, L.P. ("FAM") for
$100,005. 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 American Stock Exchange under
the symbol MHJ. 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 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) Offering expenses--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 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 period July 23, 1999 to
November 30, 1999, FAM earned fees of $126,263, of which $101,836
was voluntarily waived. FAM also reimbursed the Fund additional
expenses of $14,442.
During the period July 23, 1999 to November 30, 1999, Merrill Lynch,
Pierce, Fenner & Smith Incorporated (MLPF&S) received underwriting
fees of $210,000 in connection with the issuance of the Fund's
Preferred Stock.
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 period July 23, 1999 to November 30, 1999 were $93,867,089
and $23,841,974, respectively.
Net realized losses for the period July 23, 1999 to November 30,
1999 and net unrealized losses as of November 30, 1999 were as
follows:
Realized Unrealized
Losses Losses
Long-term investments $ (405,299) $(2,840,550)
------------ -----------
Total $ (405,299) $(2,840,550)
============ ===========
As of November 30, 1999, net unrealized depreciation for Federal
income tax purposes aggregated $2,840,550, of which $50,120 related
to appreciated securities and $2,890,670 related to depreciated
securities. The aggregate cost of investments at November 30, 1999
for Federal income tax purposes was $71,383,912.
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 period July 23, 1999 to
November 30, 1999 increased by 2,991,148 from shares sold.
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 yield in effect at November
30, 1999 was 4.25%.
In connection with the offering of AMPS, the Board of Directors
reclassified 1,120 shares of unissued capital stock as AMPS. Shares
issued and outstanding during the period July 23, 1999 to November
30, 1999 increased by 1,120 as a result of the AMPS offering.
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 period July 23,
1999 to November 30, 1999, MLPF&S, an affiliate of FAM, earned
$18,782 as commissions.
5. Subsequent Event:
On December 8, 1999, the Fund's Board of Directors declared an
ordinary income dividend to shareholders in the amount of $.067000
per share, payable on December 30, 1999 to shareholders of record as
of December 23, 1999.
MuniHoldings New Jersey Insured Fund IV, Inc., November 30, 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 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.
QUALITY PROFILE
The quality ratings of securities in the Fund as of November 30,
1999 were as follows:
Percent of
S&P Rating/Moody's Rating Net Assets
AAA/Aaa 91.6%
BBB/Baa 4.4
Other++ 2.6
[FN]
++Temporary investments in short-term securities.
MuniHoldings New Jersey Insured Fund IV, Inc., November 30, 1999
OFFICERS AND DIRECTORS
Terry K. Glenn, President and Director
Ronald W. Forbes, Director
Cynthia A. Montgomery, Director
Charles C. Reilly, Director
Kevin A. Ryan, Director
Richard R. West, Director
Arthur Zeikel, Director
Vincent R. Giordano, Senior Vice President
Robert A. DiMella, Vice President
Kenneth A. Jacob, Vice President
Roberto W. Roffo, Vice President
Donald C. Burke, Vice President and Treasurer
William E. Zitelli, Secretary
Custodian
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
Transfer Agents
Common Stock:
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
Preferred Stock:
The Bank of New York
100 Church Street
New York, NY 10286
AMEX Symbol
MHJ
