TAURUS
MUNICALIFORNIA
HOLDINGS, INC.
FUND LOGO
Semi-Annual Report
April 30, 1995
This report, including the financial information herein, is
transmitted to the shareholders of Taurus MuniCalifornia Holdings,
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.
<PAGE>
Taurus MuniCalifornia
Holdings, Inc.
Box 9011
Princeton, NJ
08543-9011
Taurus MuniCalifornia Holdings, Inc.
TO OUR SHAREHOLDERS
For the six-month period ended April 30, 1995, the Common Stock of
Taurus MuniCalifornia Holdings, Inc. earned $0.333 per share income
dividends, which included earned and unpaid dividends of $0.053.
This represents a net annualized yield of 6.23%, based on a month-
end per share net asset value of $10.77. Over the same period, the
total investment return on the fund's Common Stock was +8.90%, based
on a change in per share net asset value from $10.25 to $10.77, and
assuming reinvestment of $0.340 per share income dividends.
For the six-month period ended April 30, 1995, the fund's Auction
Market Preferred Stock had an average yield of 4.17%.
The Environment
During the six months ended April 30, 1995, the perception that the
US economy was overheating and inflationary pressures were
increasing gave way to a more benign economic outlook. With more
signs of slowing growth, investors now appear to be forecasting a
"soft landing" for the US economy. Although gross domestic product
was reported to have increased at a revised 5.1% rate during the
final quarter of 1994, declines in other indicators such as new home
sales and durable goods orders registered thus far in 1995 have led
investors to anticipate that the economy is losing enough momentum
to keep inflation under control and preclude further significant
monetary policy tightening by the Federal Reserve Board. A further
indication of a slowing economy was the reported decline in the
Index of Leading Economic Indicators for March.
As US stock and bond markets have risen on more positive economic
news, the value of the US dollar has reached new lows relative to
the yen and the Deutschemark. Persistent trade deficits and exports
of capital from the United States have kept the US currency in a
decade-long decline relative to the Japanese and German currencies.
Over the longer term, since the United States has the highest
productivity among industrialized nations and among the lowest labor
costs, demand for US dollar-denominated assets may improve. However,
a reduction of the still-widening US trade deficit may be necessary
before the US dollar appreciates substantially relative to the yen
and the Deutschemark.
<PAGE>
The first months of 1995 have been very positive for the stock and
bond markets. Continued signs of a moderating expansion and well-
contained inflationary pressures would provide further assurance
that the peak in interest rates is behind us. On the other hand,
indications of reaccelerating growth and further significant
monetary policy tightening by the Federal Reserve Board would be a
decided negative for the US financial markets.
The Municipal Market
During the six-month period ended April 30, 1995, the tax-exempt
bond market gradually recouped much of the losses sustained during
1994. Signs of a weakening domestic economy and ongoing moderate
inflationary pressures have fostered an environment of declining
interest rates. Since October 31, 1994, A-rated, uninsured municipal
revenue bond yields, as measured by the Bond Buyer Revenue Bond
Index, have declined over 65 basis points (0.65%) to close the six-
month period ended April 30, 1995 at 6.29%. Tax-exempt bond yields
initially continued to climb in late 1994, reaching a high of 7.37%
in late November 1994. Municipal bond yields have since declined
over 100 basis points from their recent highs and are presently
lower than they were a year ago. US Treasury bond yields have
experienced similar declines over the last six months to end the
April period at 7.34%.
Much of the recent improvement in the tax-exempt bond market,
however, has occurred over the last three months. During this most
recent quarter, municipal bond yields have fallen approximately 50
basis points, while US Treasury bond yields declined only 35 basis
points. Tax-exempt bond yields declined more than their taxable
counterparts in recent months, largely in response to the
significant decline in new bond issuance in recent quarters. Over
the last six months, less than $60 billion in new long-term
municipal securities were underwritten, a decline of nearly 45%
versus the comparable period a year earlier. Issuance was
particularly low this past January and February, with monthly volume
of less than $8 billion. These levels are the lowest monthly totals
since the mid-1980s.
<PAGE>
To compound the municipal market's already strong technical posture,
both institutional and individual investors have seen significant
cash inflows in recent months. These assets were derived from
regular coupon payments, bond maturities and the proceeds from early
bond calls and redemptions. It has been estimated that investors
received over $20 billion in principal redemptions and coupon income
in January 1995 alone. With monthly issuance in the $10 billion
range thus far this year, the current supply/demand imbalance has
dominated the municipal market and bond prices have risen
accordingly. The tax-exempt bond market's technical position is
likely to remain very strong throughout most of 1995. Investors are
expected to receive almost $40 billion in principal and coupon
payments on July 1, 1995. Investor proceeds from all sources have
been estimated to exceed $200 billion for all of 1995. Estimates of
total new bond issuance for 1995 have continued to be lowered with
most estimates now in the $125 billion range. Investors should find
it increasingly difficult to replace existing holdings as they
mature and to reinvest coupon income in such an environment.
The municipal bond market's outperformance thus far this year caused
the tax-exempt market to become temporarily expensive relative to
its taxable counterpart in late April. Investor concerns regarding
the international currency situation and the future impact of
proposed revisions to US taxa-tion policies upon the tax advantage
of municipal bonds have combined to cause tax-exempt bond yields to
increase marginally in recent weeks. Municipal bond yields rose
approximately 15 basis points by April 30, 1995 from their lows in
mid-April 1995. Long-term US Treasury bond yields have remained
essentially stable.
Such an underperformance by the tax-exempt bond market is likely to
be limited in duration. The recent increase in tax-exempt bond
yields has already begun to attract institutional investors since
some municipal bonds yielding in excess of 85% of US Treasury bond
yields are again available. Also, concerns regarding the implication
for municipal bonds' tax advantage resulting from various proposed
tax law changes (for example, flat-tax, value-added tax or national
sales tax) are all likely to quickly recede as investors realize
that such, if any, changes are unlikely to be enacted before late
1996 at the earliest. Long-term investors will also recall 1986 when
similar tax proposals were made and tax-exempt bond yields initially
rose and then quickly fell. Investors are likely to view the current
situation as an opportunity to purchase very attractively priced tax-
advantaged products. This should cause municipal bond yields to
quickly return to their more historic relationship.
<PAGE>
Portfolio Strategy
For the six-month period ended April 30, 1995, our portfolio
strategy shifted slightly on the belief that bond yields were
attractive. Cash reserves, which averaged 5% of net assets during
the six-month period ended October 31, 1994, were drawn down to an
average of 1% by April 30, 1995. We did this to seek to enhance
income for shareholders while slightly extending duration to better
capture any market appreciation. Another factor in the decision to
lower cash reserves was the 61% decrease in municipal issuance of
California bonds for this six-month period versus the same six-month
period last year. This decline in issuance raised concerns that it
would be difficult to buy bonds when the market becomes more active.
However, the fund's credit quality remained high, with 80% of long-
term assets rated AA or better by at least one of the major rating
agencies. Looking forward, our strategy will consist of seeking to
enhance the total return of the fund as yields begin their expected
downward path.
The fund's Preferred Stock, which is auctioned on a 28-day schedule,
averaged 3.92% for the six-month period. These short-term interest
rates have continued to provide generous yield benefits to the
fund's Common Stock shareholders as a result of leveraging in a
steep yield curve environment. However, should the spread between
short-term and long-term interest rates narrow, the benefits of the
leverage will diminish and reduce the yield of the Common Stock.
(For a complete explanation of the benefits and risks of leveraging,
see the information provided below.)
In Conclusion
We appreciate your ongoing interest in Taurus MuniCalifornia
Holdings, Inc., and we look forward to serving your investment needs
in the months and years to come.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Vincent R. Giordano)
Vincent R. Giordano
Vice President and Portfolio Manager
<PAGE>
May 24, 1995
THE BENEFITS AND RISKS OF LEVERAGING
Taurus MuniCalifornia Holdings, Inc. utilizes leveraging 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 pick-up 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.
<PAGE>
PORTFOLIO ABBREVIATIONS
To simplify the listings of Taurus MuniCalifornia Holdings, 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)
COP Certificates of Participation
HFA Housing Finance Agency
RIB Residual Interest Bonds
RITR Residual Interest Trust Receipts
SAVRS Select Auction Variable Rate Securities
S/F Single-Family
VRDN Variable Rate Demand Notes
<TABLE>
SCHEDULE OF INVESTMENTS (in Thousands)
<CAPTION>
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
California--95.6%
<S> <S> <C> <S> <C>
California Health Facilities Financing Authority Revenue Bonds, Series A:
BB Baa1 $1,500 Refunding (Good Samaritan Health System), 7.50% due 5/01/2015 $ 1,481
AAA Aaa 2,180 (San Francisco Children's Hospital), 7.50% due 10/01/2020 (d) 2,400
California HFA, Home Mortgage Revenue Bonds:
AA- Aa 580 AMT, Series C, 7.60% due 8/01/2030 607
AA- Aa 1,165 AMT, Series D, 7.75% due 8/01/2010 1,231
AA- Aa 2,000 AMT, Series F-1, 7% due 8/01/2026 2,051
AA- Aa 1,750 Series A, 8.20% due 8/01/2017 1,850
AA- Aa 1,775 Series D, 7.25% due 8/01/2017 1,865
AA- Aa 1,000 California HFA, Revenue Bonds, AMT, Linked SAVRS and RIB, 7.59% due 8/01/2023 994
A1+ VMIG1++ 800 California Pollution Control Financing Authority, Solid Waste Disposal Revenue
Bonds (Shell Oil Co.--Martinez Project), VRDN, AMT, Series A, 4.95% due
10/01/2024 (g) 800
<PAGE>
California Rural Home Mortgage Finance Authority, S/F Mortgage Revenue Bonds
(Mortgage-Backed Securities Program), AMT (e):
NR* Aaa 1,215 Series A-1, 6.90% due 12/01/2024 1,250
NR* Aaa 695 Series A-2, 7.95% due 12/01/2024 841
California State Public Works Board, Lease Revenue Bonds (Department of
Corrections), Series A:
A- A 1,200 (Calipatria State Prison--Imperial County), 5.75% due 9/01/2021 1,100
A- A 1,000 (Monterey County), 6.875% due 11/01/2014 1,037
A- A 2,500 (Monterey County), 7% due 11/01/2019 2,629
AA Aa 1,750 California Statewide Community Development Authority Revenue Bonds, COP
(Saint Joseph Health System Group), 6.50% due 7/01/2015 1,785
AAA Aaa 3,000 Cerritos, California, Public Financing Authority, Revenue Refunding Bonds
(Los Coyotes Redevelopment Project Loan), Series A, 6.50% due 11/01/2023 (a) 3,174
NR* Baa 1,000 Clovis, California, COP, 7.20% due 8/01/2011 1,029
AAA Aaa 2,200 Compton, California, Community Redevelopment Agency, Tax Allocation Refunding
Bonds (Walnut Industrial Park), Series A, 7.50% due 8/01/2013 (a) 2,410
BBB NR* 2,000 Contra Costa County, California, Public Financing Authority, Tax Allocation
Revenue Refunding Bonds, Series A, 7.10% due 8/01/2022 2,040
NR* A 810 Cypress, California, S/F Residential Mortgage Revenue Refunding Bonds, Series
B, 7.25% due 1/01/2012 (i) 901
Fresno, California, Sewer Revenue Bonds, Series A-1 (a):
AAA Aaa 2,010 6.25% due 9/01/2014 2,081
AAA Aaa 500 5.25% due 9/01/2019 442
AAA Aaa 1,500 Los Angeles, California, Community Redevelopment Agency, Tax Allocation
Refunding Bonds (Bunker Hill), Series H, 6.50% due 12/01/2015 (c) 1,543
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in Thousands)
<CAPTION>
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
California(concluded)
<S> <S> <C> <S> <C>
AAA Aaa $3,000 Los Angeles, California, Convention and Exhibition Center Authority, Lease
Revenue Refunding Bonds, Series A, 5.125% due 8/15/2021 (d) $ 2,577
<PAGE>
AA Aa 1,350 Los Angeles, California, Department of Water and Power, Electric Plant
Revenue Bonds, RITR, 7.229% due 2/01/2020 (h) 1,389
Los Angeles, California, Harbor Department Revenue Bonds, AMT, Series B:
AA Aa 2,000 6.625% due 8/01/2019 2,039
AA Aa 2,000 6.625% due 8/01/2025 2,032
AAA NR* 280 Los Angeles, California, S/F Home Mortgage Revenue Bonds, AMT, Series A,
7.55% due 12/01/2023 (e) 291
AAA Aaa 5,000 Los Angeles, California, Wastewater System Revenue Refunding Bonds, Series C,
5.60% due 6/01/2020 (d) 4,614
AA Aa 2,000 Metropolitan Water District, Southern California, Waterworks Revenue
Refunding Bonds, Series A, 5.75% due 7/01/2021 1,903
Orange County, California, Local Transportation Authority, Sales Tax Revenue
Bonds, Linked SAVRS and RIB:
AAA Aaa 2,000 6.20% due 2/14/2011 (a) 2,061
AAA Aaa 4,000 Second Series, 6.10% due 2/14/2011 (b) 4,060
AAA Aaa 1,885 Palmdale, California, Civic Authority Revenue Refunding Bonds (Redevelopment
Project No. 1), Series A, 5.50% due 7/01/2023 (d) 1,708
A+ A1 2,000 Pasadena, California, COP, Refunding (Old Pasadena Package Facility Project),
6.25% due 1/01/2018 2,022
A+ Aa 3,000 Sacramento, California, City Financing Authority, Lease Revenue Refunding
Bonds, Series B, 5% due 11/01/2014 2,611
AAA NR* 115 San Francisco, California, City and County, S/F Mortgage Revenue Bonds (Mortgage-
Backed Securities Program), AMT, 7.45% due 1/01/2024 (e)(f) 120
A+ A1 2,000 San Jose, California, Financing Authority, Revenue Refunding Bonds (Convention
Center Project), Series C, 6.40% due 9/01/2022 1,972
AAA Aaa 500 San Mateo County, California, Joint Powers Financing Authority, Lease Revenue
Refunding Bonds (Capital Projects Program), 5% due 7/01/2021 (d) 425
AAA Aaa 2,000 Santa Clara County, California, Financing Authority, Lease Revenue Bonds
(VMC Facility Replacement Project), Series A, 6.875% due 11/15/2014 (a) 2,163
Southern California Home Financing Authority, S/F Mortgage Revenue Bonds,
AMT (e):
AAA NR* 3,035 (Mortgage-Backed Securities Program), Series A, 7.625% due 10/01/2023 3,204
AAA NR* 175 Series B, 7.75% due 3/01/2024 (f) 183
BBB+ NR* 1,480 Stanislaus, California, Waste-to-Energy Financing Agency, Solid Waste Facility
Revenue Refunding Bonds (Ogden Martin System Inc. Project), COP, 7.625% due
1/01/2010 1,548
<PAGE>
Total Investments (Cost--$70,378)--95.6% 72,463
Other Assets Less Liabilities--4.4% 3,301
-------
Net Assets--100.0% $75,764
=======
<FN>
(a)AMBAC Insured.
(b)FGIC Insured.
(c)FSA Insured.
(d)MBIA Insured.
(e)GNMA Collateralized.
(f)FNMA Collateralized.
(g)The interest rate is subject to change periodically based upon
the prevailing market rates. The interest rate shown is the rate in
effect at April 30, 1995.
(h)The interest rate is subject to change periodically and inversely
to the prevailing market rate. The interest rate shown is the rate
in effect at April 30, 1995.
(i)Escrowed to Maturity.
*Not Rated.
++Highest short-term rating by Moody's Investors Service, Inc.
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION
<TABLE>
Statement of Assets, Liabilities and Capital as of April 30, 1995
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$70,378,328) (Note 1a) $72,462,902
Cash 61,650
Receivables:
Securities sold $ 1,952,001
Interest 1,387,084 3,339,085
-----------
Deferred organization expenses (Note 1e) 3,068
Prepaid expenses 3,958
-----------
Total assets 75,870,663
-----------
Liabilities: Payables:
Dividends to shareholders (Note 1f) 54,344
Investment adviser (Note 2) 29,504 83,848
-----------
Accrued expenses and other liabilities 22,830
-----------
Total liabilities 106,678
-----------
<PAGE>
Net Assets: Net assets $75,763,985
===========
Capital: Capital Stock (200,000,000 shares authorized) (Note 4):
Preferred Stock, par value $.10 per share (800 shares of
AMPS* issued and outstanding at $25,000 per share
liquidation preference) $20,000,000
Common Stock, par value $.10 per share (5,175,539 shares
issued and outstanding) $ 517,554
Paid-in capital in excess of par 56,540,120
Undistributed investment income--net 608,476
Accumulated realized capital losses on investments--net
(Note 5) (3,986,739)
Unrealized appreciation on investments--net 2,084,574
-----------
Total--Equivalent to $10.77 net asset value per share of
Common Stock (market price--$9.50) 55,763,985
-----------
Total capital $75,763,985
===========
<FN>
*Auction Market Preferred Stock.
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (continued)
<TABLE>
Statement of Operations
<CAPTION>
For the Six Months Ended
April 30, 1995
<S> <S> <C> <C>
Investment Interest and amortization of premium and discount earned $ 2,426,955
Income (Note 1d):
<PAGE>
Expenses: Investment advisory fees (Note 2) $ 181,424
Professional fees 37,075
Commission fees (Note 4) 24,770
Accounting services (Note 2) 21,638
Printing and shareholder reports 21,590
Transfer agent fees 19,736
Directors' fees and expenses 9,557
Listing fees 8,022
Custodian fees 4,411
Pricing fees 2,637
Amortization of organization expenses (Note 1e) 1,470
Other 8,901
-----------
Total expenses 341,231
-----------
Investment income--net 2,085,724
-----------
Realized & Unreal- Realized loss on investments--net (1,634,701)
ized Gain (Loss) Change in unrealized appreciation/depreciation on
on Investments investments--net 4,448,085
- --Net (Notes 1b, -----------
1d & 3): Net Increase in Net Assets Resulting from Operations $ 4,899,108
===========
</TABLE>
<TABLE>
Statements of Changes in Net Assets
<CAPTION>
For the Six For the
Months Ended Year Ended
April 30, October 31,
Increase (Decrease) in Net Assets: 1995 1994
<S> <S> <C> <C>
Operations: Investment income--net $ 2,085,724 $ 4,353,977
Realized loss on investments--net (1,634,701) (2,347,373)
Change in unrealized appreciation/depreciation on invest-
ments--net 4,448,085 (8,442,214)
----------- -----------
Net increase (decrease) in net assets resulting from operations 4,899,108 (6,435,610)
----------- -----------
Dividends & Investment income--net:
Distributions to Common Stock (1,758,322) (3,697,586)
Shareholders Preferred Stock (408,960) (445,660)
(Note 1f): Realized gain on investments--net:
Common Stock -- (1,023,588)
Preferred Stock -- (85,836)
----------- -----------
Net decrease in net assets resulting from dividends and
distributions to shareholders (2,167,282) (5,252,670)
----------- -----------
<PAGE>
Net Assets: Total increase (decrease) in net assets 2,731,826 (11,688,280)
Beginning of period 73,032,159 84,720,439
----------- -----------
End of period* $75,763,985 $73,032,159
=========== ===========
<FN>
*Undistributed investment income--net $ 608,476 $ 690,034
=========== ===========
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (concluded)
<TABLE>
Financial Highlights
<CAPTION>
For the
The following per share data and ratios have been derived Six Months
from information provided in the financial statements. Ended
April 30, For the Year Ended October 31,
Increase (Decrease) in Net Asset Value: 1995 1994 1993 1992 1991
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 10.25 $ 12.51 $ 11.53 $ 11.66 $ 11.05
Operating -------- -------- -------- -------- --------
Performance: Investment income--net .41 .84 .91 .99 1.01
Realized and unrealized gain (loss)
on investments--net .53 (2.08) 1.13 (.05) .62
-------- -------- -------- -------- --------
Total from investment operations .94 (1.24) 2.04 .94 1.63
-------- -------- -------- -------- --------
Less dividends and distributions to
Common Stock shareholders:
Investment income--net (.34) (.71) (.82) (.88) (.82)
Realized gain on investments--net -- (.20) (.14) (.06) (.01)
-------- -------- -------- -------- --------
Total dividends and distributions to
Common Stock shareholders (.34) (.91) (.96) (.94) (.83)
-------- -------- -------- -------- --------
Effect of Preferred Stock activity:
Dividends and distributions to
Preferred Stock shareholders:
Investment income--net (.08) (.09) (.08) (.12) (.19)
Realized gain on invest-
ments--net -- (.02) (.02) (.01) --
-------- -------- -------- -------- --------
Total effect of Preferred Stock
activity (.08) (.11) (.10) (.13) (.19)
======== ======== ======== ======== ========
Net asset value, end of period $ 10.77 $ 10.25 $ 12.51 $ 11.53 $ 11.66
======== ======== ======== ======== ========
Market price per share, end of
period $ 9.50 $ 9.25 $ 13.00 $ 12.50 $ 12.25
======== ======== ======== ======== ========
<PAGE>
Total Investment Based on market price per share 6.44%++ (22.57%) 12.52% 10.18% 18.41%
Return:** ======== ======== ======== ======== ========
Based on net asset value per
share 8.90%++ (10.84%) 17.39% 6.77% 13.47%
======== ======== ======== ======== ========
Ratios to Expenses .94%* .89% .94% .88% .91%
Average ======== ======== ======== ======== ========
Net Assets:*** Investment income--net 5.76%* 5.49% 5.76% 6.36% 6.60%
======== ======== ======== ======== ========
Supplemental Net assets, net of Preferred Stock,
Data: end of period (in thousands) $ 55,764 $ 53,032 $ 64,720 $ 59,030 $ 58,543
======== ======== ======== ======== ========
Preferred Stock outstanding, end
of period (in thousands) $ 20,000 $ 20,000 $ 20,000 $ 20,000 $ 20,000
======== ======== ======== ======== ========
Portfolio turnover 45.95% 87.83% 52.04% 50.50% 27.89%
======== ======== ======== ======== ========
<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 effect of sales loads.
***Do not reflect the effect of dividends to Preferred Stock
shareholders.
++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
Taurus MuniCalifornia Holdings, Inc. (the "Fund") is registered
under the Investment Company Act of 1940 as a non-diversified,
closed-end management investment company. 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 MCF. The following is a summary of
significant accounting policies followed by the Fund.
<PAGE>
(a) Valuation of investments--Municipal bonds are traded primarily
in the over-the-counter market 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, which are traded on exchanges, are valued at their last
sale price as of the close of such exchanges or, lacking any sales,
at the last available bid price. Short-term securities with a
remaining maturity of sixty days or less are valued at amortized
cost, which approximates market value. Securities for which market
quotations are not readily available are valued at their 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 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
interest rate 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
margins 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.
<PAGE>
* 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 amount of the liability is subsequently marked to
market to reflect the current market value of the option. 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 expenses--Deferred organization expenses
are amortized on a straight-line basis over a five-year period.
NOTES TO FINANCIAL STATEMENTS (concluded)
(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 0.50% of
the Fund's average weekly net assets.
Accounting services are provided to the Fund by FAM at cost.
<PAGE>
Certain officers and/or directors of the Fund are officers and/or
directors of FAM, PSI, Merrill Lynch, Pierce, Fenner & Smith Inc.
("MLPF&S"), and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the six months ended April 30, 1995 were $32,771,345 and
$36,308,314, respectively.
Net realized and unrealized gains (losses) as of April 30, 1995 were
as follows:
Realized Gains Unrealized
(Losses) Gains
Long-term investments $ (844,130) $2,084,574
Short-term investments 638 --
Financial futures contracts (791,209) --
----------- ----------
Total $(1,634,701) $2,084,574
=========== ==========
As of April 30, 1995, net unrealized appreciation for Federal income
tax purposes aggregated $2,084,574, of which $2,474,164 related to
appreciated securities and $389,590 related to depreciated
securities. The aggregate cost of investments at April 30, 1995 for
Federal income tax purposes was $70,378,328.
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 the holders of Common Stock.
Common Stock
For the six months ended April 30, 1995, shares issued and
outstanding remained constant at 5,175,539. At April 30, 1995, total
paid-in capital amounted to $57,057,674.
Preferred Stock
Auction Market Preferred Stock ("AMPS") are shares of Preferred
Stock of the Fund 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 April 30, 1995 was 4.05%.
<PAGE>
A two-for-one stock split occurred on December 1, 1994. As a result,
at April 30, 1995, there were 800 AMPS shares authorized, issued and
outstanding with a liquidation preference of $25,000 per share plus
accumulated and unpaid dividends of $39,670.
The Fund pays commissions to certain broker-dealers at the end of
each auction at the annual rate of one-quarter of 1% calculated on
the proceeds of each auction.
For the six months ended April 30, 1995, MLPF&S, an affiliate of
FAM, earned $26,255 as commissions.
5. Capital Loss Carryforward:
At October 31, 1994, the Fund had a capital loss carryforward of
approximately $2,352,000, all of which expires in 2002. This amount
will be available to offset like amounts of any future taxable
gains.
6. Subsequent Event:
On May 9, 1995, the Fund's Board of Directors declared an ordinary
income dividend to Common Stock shareholders in the amount of
$.052797 per share, payable on May 30, 1995 to shareholders of
record as of May 19, 1995.
PER SHARE INFORMATION
<TABLE>
Per Share Selected Quarterly Financial Data*
<CAPTION>
Dividends/Distributions
Net Realized Unrealized
Investment Gains Gains Net Investment Income Capital Gains
For the Quarter Income (Losses) (Losses) Common Preferred Common Preferred
<S> <C> <C> <C> <C> <C> <C> <C>
May 1, 1993 to July 31, 1993 $0.23 $ 0.05 $ 0.04 $0.20 $0.02 -- --
August 1, 1993 to October 31, 1993 0.21 0.08 0.22 0.20 0.02 -- --
November 1, 1993 to January 31, 1994 0.22 0.22 (0.16) 0.18 0.02 $0.20 $0.01
February 1, 1994 to April 30, 1994 0.21 (0.25) (1.25) 0.18 0.02 -- 0.01
May 1, 1994 to July 31, 1994 0.20 (0.26) 0.38 0.17 0.03 -- --
August 1, 1994 to October 31, 1994 0.21 (0.16) (0.60) 0.18 0.02 -- --
November 1, 1994 to January 31, 1995 0.21 (0.31) 0.62 0.18 0.04 -- --
February 1, 1995 to April 30, 1995 0.20 (0.01) 0.23 0.16 0.04 -- --
<PAGE>
<CAPTION>
Net Asset Value Market Price**
For the Quarter High Low High Low Volume***
<S> <C> <C> <C> <C> <C>
May 1, 1993 to July 31, 1993 $12.34 $12.07 $13.625 $12.125 267
August 1, 1993 to October 31, 1993 12.66 12.20 13.00 12.375 207
November 1, 1993 to January 31, 1994 12.46 12.11 12.875 11.25 381
February 1, 1994 to April 30, 1994 12.33 10.56 12.25 10.00 307
May 1, 1994 to July 31, 1994 11.23 10.60 10.875 9.50 369
August 1, 1994 to October 31, 1994 11.02 10.23 9.875 8.875 535
November 1, 1994 to January 31, 1995 10.56 9.56 9.50 8.125 901
February 1, 1995 to April 30, 1995 11.05 10.57 10.00 9.25 274
<FN>
*Calculations are based upon shares of Common Stock outstanding at
the end of each quarter.
**As reported in the consolidated transaction reporting system.
***In thousands.
</TABLE>
OFFICERS AND DIRECTORS
Arthur Zeikel, President and Director
Ronald W. Forbes, Director
Cynthia A. Montgomery, Director
Charles C. Reilly, Director
Kevin A. Ryan, Director
Richard R. West, Director
Terry K. Glenn, Executive Vice President
Donald C. Burke, Vice President
Vincent R. Giordano, Vice President
Kenneth A. Jacob, Vice President
Gerald M. Richard, Treasurer
Mark B. Goldfus, Secretary
Custodian
The Bank of New York
90 Washington Street
New York, New York 10286
Transfer Agents
<PAGE>
Common Stock:
The Bank of New York
110 Washington Street
New York, New York 10286
Preferred Stock:
IBJ Schroder Bank & Trust Company
One State Street
New York, New York 10004
NYSE Symbol
MCF
