MUNIYIELD
NEW YORK
INSURED
FUND, INC.
[FUND LOGO]
STRATEGIC
Performance
Annual Report
October 31, 1997
This report, including the financial information herein, is transmitted
to the shareholders of MuniYield New York Insured 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.
MuniYield New York
Insured Fund, Inc.
Box 9011
Princeton, NJ
08543-9011 #16159 -- 10/97
[RECYCLE LOGO]
Printed on post-consumer recycled paper
MuniYield New York Insured Fund, Inc.
TO OUR SHAREHOLDERS
For the year ended October 31, 1997, the Common Stock of MuniYield New
York Insured Fund, Inc. earned $0.914 per share income dividends,
which included earned and unpaid dividends of $0.079. This represents
a net annualized yield of 5.75%, based on a month-end net asset value
of $15.89 per share. Over the same period, the total investment return
on the Fund's Common Stock was +9.37%, based on a change in per share
netasset value from $15.49 to $15.89, and assuming reinvestment of
$0.912 per share income dividends and $0.066 per share capital gains
distributions.
For the six-month period ended October 31, 1997, the total investment
return on the Fund's Common Stock was +7.93%, based on a change in per
share net asset value from $15.16 to $15.89, and assuming reinvestment
of $0.458 per share income dividends.
For the six-month period ended October 31, 1997, the Fund's Auction
Market Preferred Stock had an average yield of 3.75% for Series A and
3.51% for Series B.
The Municipal Market Environment
Long-term interest rates generally declined during the six-month
period ended October 31, 1997. The general financial environment has
remained one of solid economic growth tempered by few or no
inflationary pressures. While economic growth has been conducive to
declining bond yields, it has remained strong enough to suggest that
the Federal Reserve Board (FRB) might find it necessary to raise
short-term interest rates. This would be intended to slow economic
growth and ensure that any incipient inflationary pressures would be
curtailed. There were investor concerns that the FRB would be forced
to raise interest rates prior to year-end, thus preventing an even
more dramatic decline in interest rates. Long-term tax-exempt revenue
bonds, as measured by the Bond Buyer Revenue Bond Index, declined over
50 basis points (0.50%) to end the six-month period ended October 31,
1997 at 5.60%.
Similarly, long-term US Treasury bond yields generally moved lower
during most of the six-month period ended October 31, 1997. However,
the turmoil in the world's equity markets during the last week in
October has resulted in a significant rally in the Treasury bond
market. The US Treasury bond market was the beneficiary of a flight to
quality mainly by foreign investors whose own domestic markets have
continued to be very volatile. Prior to the initial decline in Asian
equity markets, long-term US Treasury bond yields were essentially
unchanged. By the end of October, US Treasury bond yields declined 80
basis points to 6.15%, their lowest level of 1997.
The tax-exempt bond market's continued underperformance as compared to
its taxable counterpart has been largely in response to its ongoing
weakening technical position. As municipal bond yields have declined,
municipalities have hurriedly rushed to refinance outstanding
highercouponed debt with new issues financed at present low rates.
During the last six months, over $118 billion in new long-term tax-
exempt issues were underwritten, an increase of over 25% versus the
comparable period a year ago. As interest rates have continued to
decline, these refinancings have intensified municipal bond issuance.
During the past three months, approximately $60 billion in new long-
term municipal securities were underwritten, an increase of over 34%
as compared to the October 31, 1996 quarter.
The recent trend toward larger and larger bond issues has also
continued. However, issues of such magnitude usually must be
attractively priced to ensure adequate investor interest. Obviously,
the yields of other municipal bond issues are impacted by the yield
premiums such large issuers have been required to pay. Much of the
municipal bond market's recent underperformance can be traced to
market pressures that these large bond issuances have exerted.
In our opinion, the recent correction in world equity markets has
enhanced the near-term prospects for continued low, if not declining,
interest rates in the United States. It is likely that the recent
correction will result in slower US domestic growth in the coming
months. This decline is likely to be generated in part by reduced US
export growth. Additionally, some decline in consumer spending also
can be expected in response to reduced consumer confidence. Perhaps
more importantly, it is likely that barring a dramatic and unexpected
resurgence in domestic growth, the FRB may be unwilling to raise
interest rates until the full impact of the equity market's
corrections can be established.
All of these factors suggest that for at least the near term, interest
rates, including tax-exempt bond yields, are unlikely to rise by any
appreciable amount. It is probable that municipal bond yields will
remain under some pressure as a result of continued strong new-issue
supply. However, the recent pace of municipal bond issuance is likely
to be unsustainable. Continued increases in bond issuance will require
lower tax-exempt bond yields to generate the economic savings
necessary for additional municipal bond refinancing. With tax-exempt
bond yields at already attractive yield ratios relative to US Treasury
bonds (approximately 90% at the end of October), any further pressure
on the municipal market may represent an attractive investment
opportunity.
Portfolio Strategy
During the 12-month period ended October 31, 1997, we managed the Fund
with the intention of seeking to provide a generous level of tax-
exempt income while providing an attractive total return. We began the
12-month period with an optimistic outlook that interest rates could
decline as a result of the attractive value of a 6.75% yield on US
Treasury bonds and the relatively high yields on New York insured
municipal bonds. This optimism on interest rates proved well founded
as interest rates declined about 60 basis points throughout the fiscal
year ended October 31, 1997.
While the overall trend in interest rates was down for the year,
market volatility created a fairly well-defined trading range in which
we shifted our investment strategy in response to rapidly changing
market conditions. From October 1996 to December 1996, good domestic
and global inflation scenarios caused interest rates to decline about
35 basis points. During that time, we scaled back the Fund's
aggressive posture to a more neutral stance in response to investor
concerns that interest rates had declined too rapidly for prevailing
economic conditions. This strategy proved correct as interest rates
increased nearly 80 basis points from December 1996 to April 1997 on
investor beliefs that the US economy was expanding at an excessive
pace which could result in inflation and ultimately lead to FRB
interest rate tightenings. At that time, we once again held a more
aggressive posture for the Fund with interest rates having rebounded
to 7.15% for long-term US Treasury issues and New York insured revenue
bonds yielding close to 6%. In our opinion, these were levels where
retail investors saw value in debt securities and returned to the
marketplace as buyers. This restructuring benefited the Fund as
interest rates ultimately declined nearly 100 basis points during the
second half of the year.
The Fund's performance during the past year was mainly achieved by our
investment strategies of capturing the relevant trading ranges
provided by what became an extremely volatile fixed-income
marketplace. While enhancing net asset valuation is important, we also
focused on maintaining an attractive average current return of tax-
exempt income to the Fund's Common Stock shareholders. The fiscal year
concluded with interest rates at the lower end of the trading range,
yet our outlook for bonds remains positive. Therefore, we expect to
maintain a fully invested posture in the Fund until economic
conditions would dictate a more cautious stance.
In Conclusion
We appreciate your ongoing interest in MuniYield New York Insured
Fund, Inc., and we look forward to assisting you with your financial
needs in the months and years to come.
Sincerely,
/S/ARTHUR ZEIKEL
Arthur Zeikel
President
/S/VINCENT R. GIORDANO
Vincent R. Giordano
Senior Vice President
/S/WALTER C. O'CONNOR
Walter C. O'Connor
Vice President and Portfolio Manager
December 3, 1997
PROXY RESULTS
<TABLE>
<CAPTION>
During the six-month period ended October 31, 1997, MuniYield New York Insured Fund, Inc. Common Stock shareholders
voted on the following proposals. The proposals were approved at a special shareholders' meeting on September 17, 1997.
The description of each proposal and number of shares voted are as follows:
Shares Shares Withheld
Voted For From Voting
<S> <C> <C> <C>
1. To elect the Fund's Board of Directors: James H. Bodurtha 11,103,675 194,150
Herbert I. London 11,056,785 241,040
Robert R. Martin 11,079,168 218,657
Arthur Zeikel 11,085,191 212,634
<CAPTION>
Shares Shares Voted Shares Voted
Voted For Against Abstain
<S> <C> <C> <C>
2. To ratify the selection of Deloitte & Touche LLP as the
Fund's independent auditors for the current fiscal year. 11,088,449 48,790 160,586
During the six-month period ended October 31, 1997, MuniYield New York Insured Fund, Inc. Preferred Stock shareholders
(Series A and Series B) voted on the following proposals. The proposals were approved at the annual shareholders'
meeting on September 17, 1997. The description of each proposal and number of shares voted are as follows:
<CAPTION>
Shares Shares Withheld
Voted For From Voting
<S> <C> <C> <C>
1. To elect the Fund's Board of Directors:
James H. Bodurtha, Herbert I. London,
Robert R. Martin, Joseph L. May, Andre F. Perold
and Arthur Zeikel as follows: Series A 1,679 0
Series B 1,627 3
<CAPTION>
Shares Shares Voted Shares Voted
Voted For Against Abstain
<S> <C> <C> <C> <C>
2. To ratify the selection of Deloitte & Touche LLP
as the Fund's independent auditors for the current
fiscal year as follows: Series A 1,679 0 0
Series B 1,617 13 0
</TABLE>
THE BENEFITS AND RISKS OF LEVERAGING
MuniYield New York Insured Fund, 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
longterm 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.
<TABLE>
<CAPTION>
MuniYield New York Insured Fund, Inc. October 31, 1997
Schedule of Investments (in Thousands)
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
<S> <C> <C> <C> <C>
New York -- 98.5%
AAA Aaa $6,095 Albany County, New York, Airport Authority, Airport Revenue Bonds, RITR, AMT,
Series RI-97-7, 7.92% due 12/15/2023 (g)(h) $6,811
AAA Aaa 8,200 Buffalo and Fort Erie, New York, Public Bridge Authority, Toll Bridge System
Revenue Bonds, 5.75% due 1/01/2025 (d) 8,440
AAA Aaa 1,000 Metropolitan Transportation Authority, New York, Commuter Facilities Revenue
Refunding Bonds, Series B, 6.25% due 7/01/2002 (d)(e) 1,102
Metropolitan Transportation Authority, New York, Transportation Facilities
Revenue Bonds, Series J (c)(e):
AAA Aaa 4,000 6.375% due 7/01/2002 4,429
AAA Aaa 20,620 6.50% due 7/01/2002 22,940
Monroe County, New York, Public Improvement Bonds, GO (d):
AAA Aaa 1,040 6.10% due 3/01/2012 1,109
AAA Aaa 2,825 AMT, 6.10% due 3/01/2010 3,014
AAA Aaa 2,175 AMT, 6.10% due 3/01/2011 2,320
A1+ VMIG1+ 1,400 New York City, New York, Cultural Resource Trust Revenue Bonds (Carnegie Hall),
VRDN, 3.50% due 12/01/2015 (a) 1,400
BBB+ Baa1 5,000 New York City, New York, GO, UT, Refunding, Series B, 6.375% due 8/15/2012 5,336
A1+ NR* 1,200 New York City, New York, Municipal Assistance Corporation, VRDN, Sub-Series K-1,
3.65% due 7/01/2008 (a) 1,200
New York City, New York, Municipal Water Finance Authority, Water and Sewer System
Revenue Bonds:
A - A2 4,000 RITR, 7.625% due 6/15/2025 (h) 4,405
A-1 A2 2,000 RITR, Series RI-2, 7.625% due 6/15/2025 (h) 2,202
AAA Aaa 1,100 Series A, 6.75% due 6/15/2001 (c)(e) 1,205
AAA Aaa 3,700 Series A, 7% due 6/15/2001 (c)(e) 4,086
AAA Aaa 900 Series A, 6.75% due 6/15/2016 (c) 977
AAA Aaa 1,590 Series A-1994, 7% due 6/15/2001 (c)(e) 1,756
AAA Aaa 2,480 Series A-1994, 7% due 6/15/2015 (b) 2,714
AAA Aaa 700 Series A-1994, 7% due 6/15/2015 (c) 766
AAA Aaa 22,500 Series B, 5.75% due 6/15/2026 (d) 23,186
A1+ VMIG1+ 400 VRDN, Series C, 3.75% due 6/15/2023 (a)(c) 400
A1+ VMIG1+ 100 New York City, New York, VRDN, UT, Series B, Sub-Series B-5, 3.65% due
8/15/2022 (a)(d) 100
New York State Dormitory Authority Revenue Bonds:
AAA Aaa 2,260 (City University System), Series 1, 5.125% due 7/01/2027 (d) 2,201
AAA Aaa 4,400 (City University System), Series C, 7.50% due 7/01/2010 (c) 5,484
AAA Aaa 7,070 (City University System), Series C, 7% due 7/01/2014 (c) 7,681
AAA Aaa 2,365 (City University System), Third Resolution - Series 1, 6.25% due 7/01/2016 (b) 2,579
AAA Aaa 4,000 (City University System), Third Resolution - Series 1, 6.25% due 7/01/2020 (b) 4,342
A1+ VMIG1+ 9,000 (Cornell University), VRDN, Series B, 3.60% due 7/01/2025 (a) 9,000
AAA Aaa 2,000 (New School for Social Research), 5.75% due 7/01/2026 (d) 2,070
AAA Aaa 6,000 Refunding (Siena College), 5.75% due 7/01/2026 (d) 6,211
AAA Aaa 10,500 New York State Energy Research and Development Authority, Facilities
Revenue Bonds (Consolidated Edison Company, Inc.), AMT, Series A, 6.75%
due 1/15/2027 (d) 11,236
AAA Aaa 10,250 New York State Energy Research and Development Authority, Gas Facilities
Revenue Bonds (Brooklyn Union Gas Company), AMT, Series B, 6.75% due
2/01/2024 (d) 11,203
AAA Aaa 3,600 New York State Energy Research and Development Authority, PCR,
Refunding (Rochester Gas and Electric Project), AMT, Series B, 6.50%
due 5/15/2032 (d) 3,890
AAA Aaa 2,975 New York State Enviromental Facilities Corporation, Special Obligation Revenue
Refunding Bonds (Riverbank State Park), 5.50% due 4/01/2016 (b) 3,036
New York State Medical Care Facilities Finance Agency Revenue Bonds:
AAA Aaa 2,790 (Health Center Project - Second Mortgage), Series A, 6.375% due 11/15/2019 (b) 3,052
AAA Aaa 1,865 (Long-Term Health Care), Series B, 6.45% due 11/01/2014 (g) 2,027
AAA Aaa 1,000 (Long-Term Health Care), Series D, 6.50% due 11/01/2015 (g) 1,098
AAA Aaa 8,335 (Mental Health Services Facilities), Series A, 6.375% due 8/15/2017 (c) 9,011
AAA Aaa 1,000 (New York Hospital Mortgage), Series A, 6.75% due 8/15/2014 (b)(f) 1,123
AAA Aaa 7,250 (New York Hospital Mortgage), Series A, 6.80% due 8/15/2024 (b)(f) 8,168
AAA Aaa 10,000 Refunding (Hospital and Nursing Home), Series C, 6.375% due 8/15/2029 (d) 10,875
BBB+ Baa 5,000 Series A, 7.40% due 8/15/2021 5,573
NR* Aaa 7,900 New York State Mortgage Agency Revenue Bonds, RITR, AMT, Series 24, 7.47%
due 10/01/2028 (h) 8,107
AAA Aaa 5,000 New York State Power Authority, General Purpose and Revenue Refunding Bonds,
Series Z, 6.50% due 1/01/2019 (b) 5,461
New York State Thruway Authority, Highway and Bridge Trust Fund, UT, Series B (c):
AAA Aaa 8,000 6.25% due 4/01/2012 8,775
AAA Aaa 3,000 6% due 4/01/2014 3,179
Port Authority of New York and New Jersey, Consolidated Revenue Bonds:
AA - A1 5,000 69th Series, 7.125% due 6/01/2025 5,395
AA - A1 5,000 72nd Series, 7.35% due 10/01/2002 (e) 5,719
AAA Aaa 2,180 Refunding, AMT, UT, 97th Series, 6.50% due 7/15/2019 (c) 2,366
A1+ VMIG1+ 1,000 Port Authority of New York and New Jersey, Special Obligation Revenue Bonds
(Versatile Structure Obligation), VRDN, Series 5, 3.65% due 8/01/2024 (a) 1,000
AAA Aaa 5,700 Syracuse, New York, COP (Syracuse Hancock International Airport), AMT, 6.50% due
1/01/2017 (c) 6,133
A1+ VMIG1+ 2,300 Syracuse, New York, IDA, Civic Facility Revenue Bonds (Multi-Modal Syracuse
University Project), VRDN, 3.60% due 3/01/2023 (a) 2,300
Triborough Bridge and Tunnel Authority, New York, Special Obligation Refunding
Bonds:
AAA Aaa 4,500 Series A, 6.625% due 1/01/2017 (d) 4,870
AAA Aaa 1,000 Series B, 6.875% due 1/01/2015 (b) 1,089
AAA Aaa 6,440 Series B, 6.875% due 1/01/2015 (c) 7,016
AAA Aaa 1,765 Yonkers, New York, UT, GO, Series A, 5% due 9/01/2016 (c) 1,694
----------
Total Investments (Cost -- $254,203) -- 98.5% 272,862
Other Assets Less Liabilities -- 1.5% 4,245
----------
Net Assets -- 100.0% $277,107
==========
(a) The interest rate is subject to change periodically based upon prevailing market rates. The interest rate
shown is the rate in effect at October 31, 1997.
(b) AMBAC Insured.
(c) FGIC Insured.
(d) MBIA Insured.
(e) Prerefunded.
(f) FHA Insured.
(g) FSA Insured.
(h) The interest rate is subject to change periodically and inversely prevailing based upon market rates. The
interest rate shown is the rate in effect at October 31, 1997.
* Not Rated.
+ Highest short-term rating by Moody's Investors Service, Inc.
Ratings of issues shown have not been audited by Deloitte & Touche LLP.
PORTFOLIO ABBREVIATIONS
To simplify the listings of MuniYield New York Insured Fund, Inc.'s
portfolio holdings in the Schedule of Investments, we have abbreviated
the names of many of the securities according to the list at right.
AMT Alternative Minimum Tax (subject to)
COP Certificates of Participation
GO General Obligation Bonds
IDA Industrial Development Authority
PCR Pollution Control Revenue Bonds
RITR Residual Interest Trust Receipts
UT Unlimited Tax
VRDN Variable Rate Demand Notes
See Notes to Financial Statements.
</TABLE>
<TABLE>
<CAPTION>
FINANCIAL INFORMATION
Statement of Assets, Liabilities and Capital as of October 31, 1997
<S> <C> <C> <C>
Assets: Investments, at value (identified cost -- $254,202,610) (Note 1a) $272,861,820
Cash 62,126
Receivables:
Interest $4,660,309
Securities sold 4,080,328 8,740,637
------------
Prepaid expenses and other assets 13,178
------------
Total assets 281,677,761
------------
Liabilities: Payables:
Securities purchased 3,993,566
Dividends to shareholders (Note 1f) 345,496
Investment adviser (Note 2) 124,699 4,463,761
------------
Accrued expenses and other liabilities 107,253
------------
Total liabilities 4,571,014
------------
Net Assets: Net assets $277,106,747
============
Capital: Capital Stock (200,000,000 shares authorized) (Note 4):
Preferred Stock, par value $.05 per share (3,400 shares of AMPS*
issued and outstanding at $25,000 per share liquidation preference) $85,000,000
Common Stock, par value $.10 per share (12,088,435 shares issued
and outstanding) $1,208,844
Paid-in capital in excess of par 168,661,547
Undistributed investment income -- net 2,576,708
Undistributed realized capital gains on investments -- net 1,000,438
Unrealized appreciation on investments -- net 18,659,210
------------
Total -- Equivalent to $15.89 net asset value per share of Common Stock
(market price -- $15.875) 192,106,747
------------
Total capital $277,106,747
============
* Auction Market Preferred Stock.
See Notes to Financial Statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of Operations
For the Year Ended
October 31, 1997
<S> <C> <C> <C>
Investment Income Interest and amortization of premium and discount earned $15,842,512
(Note 1d):
Expenses: Investment advisory fees (Note 2) $1,368,639
Commission fees (Note 4) 215,254
Professional fees 83,797
Accounting services (Note 2) 60,333
Transfer agent fees 56,675
Listing fees 24,349
Directors' fees and expenses 22,920
Custodian fees 20,627
Printing and shareholder reports 20,198
Pricing fees 9,760
Amortization of organization expenses (Note 1e) 2,109
Other 19,939
----------
Total expenses 1,904,600
------------
Investment income -- net 13,937,912
------------
Realized & Realized gain on investments -- net 4,164,812
Unrealized Gain on Change in unrealized appreciation on investments -- net 1,553,036
Investments -- Net ------------
(Notes 1b, 1d & 3): Net Increase in Net Assets Resulting from Operations $19,655,760
============
See Notes to Financial Statements.
</TABLE>
<TABLE>
<CAPTION>
Statements of Changes in Net Assets
For the Year Ended
October 31,
Increase (Decrease) in Net Assets: 1997 1996
<S> <C> <C> <C>
Operations: Investment income -- net $13,937,912 $13,884,530
Realized gain (loss) on investments -- net 4,164,812 (565,697)
Change in unrealized appreciation on investments -- net 1,553,036 272,623
------------- -------------
Net increase in net assets resulting from operations 19,655,760 13,591,456
------------- -------------
Dividends & Investment income -- net:
Distributions to Common Stock (10,993,544) (10,991,979)
Shareholders Preferred Stock (2,826,998) (2,764,285)
(Note 1f): Realized gain on investments -- net:
Common Stock (799,349) --
Preferred Stock (198,679) --
In excess of realized gain on investments -- net:
Common Stock -- (1,232,695)
Preferred Stock -- (345,678)
------------- -------------
Net decrease in net assets resulting from dividends and distributions
to shareholders (14,818,570) (15,334,637)
------------- -------------
Capital Stock Value of shares issued to Common Stock shareholders in reinvestment of
Transactions dividends and distributions 658,515 --
(Note 4): ------------- -------------
Net Assets: Total increase (decrease) in net assets 5,495,705 (1,743,181)
Beginning of year 271,611,042 273,354,223
------------- -------------
End of year* $277,106,747 $271,611,042
============= =============
* Undistributed investment income -- net $2,576,708 $2,459,338
============= =============
See Notes to Financial Statements.
</TABLE>
<TABLE>
<CAPTION>
Financial Highlights
The following per share data and ratios have been derived
from information provided in the financial statements. For the Year Ended October 31,
1997 1996 1995 1994 1993
Increase (Decrease) in Net Asset Value:
<S> <C> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of year $15.49 $15.64 $14.17 $16.85 $14.45
Operating --------- --------- --------- --------- ---------
Performance: Investment income -- net 1.15 1.15 1.19 1.20 1.23
Realized and unrealized gain (loss) on
investments -- net .48 (.03) 1.58 (2.67) 2.34
--------- --------- --------- --------- ---------
Total from investment operations 1.63 1.12 2.77 (1.47) 3.57
--------- --------- --------- --------- ---------
Less dividends and distributions to Common
Stock shareholders:
Investment income -- net (.91) (.91) (.92) (.97) (.99)
Realized gain on investments -- net (.07) -- (.10) (.05) --
In excess of realized gain on investments -- net -- (.10) -- -- --
--------- --------- --------- --------- ---------
Total dividends and distributions to Common
Stock shareholders (.98) (1.01) (1.02) (1.02) (.99)
--------- --------- --------- --------- ---------
Effect of Preferred Stock activity:
Dividends and distributions to Preferred
Stock shareholders:
Investment income -- net (.23) (.23) (.26) (.18) (.18)
Realized gain on investments -- net (.02) -- (.02) (.01) --
In excess of realized gain on investments -- net -- (.03) -- -- --
--------- --------- --------- --------- ---------
Total effect of Preferred Stock activity (.25) (.26) (.28) (.19) (.18)
--------- --------- --------- --------- ---------
Net asset value, end of year $15.89 $15.49 $15.64 $14.17 $16.85
========= ========= ========= ========= =========
Market price per share, end of year $15.875 $14.875 $14.375 $12.25 $16.50
========= ========= ========= ========= =========
Total Investment Based on market price per share 13.79% 10.79% 26.40% (20.49%) 19.04%
Return:* ========= ========= ========= ========= =========
Based on net asset value per share 9.37% 6.04% 18.89% (9.94%) 24.09%
========= ========= ========= ========= =========
Ratios to Average Expenses .70% .70% .71% .70% .69%
Net Assets:** ========= ========= ========= ========= =========
Investment income -- net 5.09% 5.11% 5.42% 5.28% 5.36%
========= ========= ========= ========= =========
Supplemental Net assets, net of Preferred Stock, end of year
Data: (in thousands) $192,107 $186,611 $188,354 $170,670 $202,998
========= ========= ========= ========= =========
Preferred Stock outstanding, end of year
(in thousands) $85,000 $85,000 $85,000 $85,000 $85,000
========= ========= ========= ========= =========
Portfolio turnover 81.73% 80.59% 88.17% 41.26% 1.63%
========= ========= ========= ========= =========
Leverage: Asset coverage per $1,000 $3,260 $3,195 $3,216 $3,008 $3,388
========= ========= ========= ========= =========
Dividends Per Share Series A -- Investment income -- net $826 $819 $935 $673 $638
On Preferred Stock ========= ========= ========= ========= =========
Outstanding:+ Series B -- Investment income -- net $837 $807 $904 $593 $651
========= ========= ========= ========= =========
* Total investment returns based on market value, which can be significantly greater or lesser than the net
asset value, may result in substantially different returns. Total investment returns exclude the effects
of sales loads.
** Do not reflect the effect of dividends to Preferred Stock shareholders.
+ Dividends per share have been adjusted to reflect a two-for-one stock split that occurred on December 1,
1994.
See Notes to Financial Statements.
</TABLE>
MuniYield New York Insured Fund, Inc. October 31, 1997
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
MuniYield New York Insured Fund, Inc. (the "Fund") is registered under
the Investment Company Act of 1940 as a non-diversified, closed-end
management investment company. 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 MYN. 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, 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. Securities with remaining maturities 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 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.
[bullet] 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 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.
[bullet] 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) Deferred organization expenses -- Deferred organization expenses
are amortized on a straight-line basis over a five-year period.
(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. Distributions in excess of
realized capital gains are due primarily to differing tax treatments
for futures transactions.
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.
Certain officers and/or directors of the Fund are officers and/or
directors of FAM, PSI, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the year ended October 31, 1997 were $209,369,026 and
$223,348,046, respectively.
Net realized and unrealized gains (losses) as of October 31, 1997 were
as follows:
Realized Unrealized
Gains (Losses) Gains
Long-term investments $4,507,980 $18,659,210
Short-term investments (363,356) --
Financial futures contracts 20,188 --
------------- -------------
Total $4,164,812 $18,659,210
============= =============
As of October 31, 1997, net unrealized appreciation for Federal income
tax purposes aggregated $18,659,210, of which $18,715,078 related to
appreciated securities and $55,868 related to depreciated securities.
The aggregate cost of investments at October 31, 1997 for Federal
income tax purposes was $254,202,610.
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
Shares issued and outstanding during the year ended October 31, 1997
increased by 41,692 as a result of dividend reinvestment and during
the year ended October 31, 1996 remained constant.
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
yields in effect at October 31, 1997 were: Series A, 3.20% and Series
B, 3.625%.
As of October 31, 1997, there were 3,400 AMPS shares authorized,
issued and outstanding with a liquidation preference of $25,000 per
share.
The Fund pays commissions to certain broker-dealers at the end of each
auction at an annual rate ranging from 0.25% to 0.375%, calculated on
the proceeds of each auction. For the year ended October 31, 1997,
Merrill Lynch, Pierce, Fenner & Smith Inc., an affiliate of FAM,
earned $97,023 as commissions.
5. Subsequent Event:
On November 6, 1997, the Fund's Board of Directors declared an
ordinary income dividend to Common Stock shareholders in the amount of
$.079024 per share, payable on November 26, 1997 to shareholders of
record as of November 17, 1997.
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders of MuniYield New York Insured
Fund, Inc.:
We have audited the accompanying statement of assets, liabilities and
capital, including the schedule of investments, of MuniYield New York
Insured Fund, Inc. as of October 31, 1997, the related statements of
operations for the year then ended and changes in net assets for each
of the years in the two-year period then ended, and the financial
highlights for each of the years in the five-year period then ended.
These financial statements and the financial highlights are the
responsibility of the Fund's management. Our responsibility is to
express an opinion on these financial statements and the financial
highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
and the financial highlights are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. Our procedures
included confirmation of securities owned at October 31, 1997 by
correspondence with the custodian and brokers. An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights
present fairly, in all material respects, the financial position of
MuniYield New York Insured Fund, Inc. as of October 31, 1997, the
results of its operations, the changes in its net assets, and the
financial highlights for the respective stated periods in conformity
with generally accepted accounting principles.
Deloitte & Touche LLP
Princeton, New Jersey
December 5, 1997
<TABLE>
<CAPTION>
IMPORTANT TAX INFORMATION (unaudited)
All of the net investment income distributions paid by MuniYield New York Insured Fund, Inc. during its taxable year
ended October 31, 1997 qualify as tax-exempt interest dividends for Federal income tax purposes. Additionally, the
following table summarizes the per share capital gains distributions paid by the Fund during the year:
Payable Short-Term Long-Term
Date Capital Gains Capital Gains
<S> <C> <C> <C> <C>
Common Stock Shareholders 12/30/96 $0.000054 $0.066300
Preferred Stock Shareholders: Series A 11/26/96 $0.05 $59.97
Series B 11/19/96 $0.02 $29.45
11/26/96 $0.03 $27.35
Please retain this information for your records.
</TABLE>
OFFICERS AND DIRECTORS
Arthur Zeikel, President and Director
James H. Bodurtha, Director
Herbert I. London, Director
Robert R. Martin, Director
Joseph L. May, Director
Andre F. Perold, Director
Terry K. Glenn, Executive Vice President
Vincent R. Giordano, Senior Vice President
Donald C. Burke, Vice President
Kenneth A. Jacob, Vice President
Walter C. O'Connor, Vice President
Gerald M. Richard, Treasurer
Philip M. Mandel, Secretary
Custodian
The Bank of New York
90 Washington Street
New York, NY 10286
Transfer Agents
Common Stock:
The Bank of New York
101 Barclay Street
New York, NY 10286
Preferred Stock:
IBJ Schroder Bank & Trust Company
One State Street
New York, NY 10004
NYSE Symbol
MYN
