MUNIYIELD
CALIFORNIA
FUND, INC.
FUND LOGO
Semi-Annual Report
April 30, 1995
This report, including the financial information herein, is
transmitted to the shareholders of MuniYield California 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 volatil-ity 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.
MuniYield
California Fund, Inc.
Box 9011
Princeton, NJ
08543-9011
<PAGE>
MuniYield California Fund, Inc.
TO OUR SHAREHOLDERS
For the six-month period ended April 30, 1995, the Common Stock of
MuniYield California Fund, Inc. earned $0.455 per share income
dividends, which included earned and unpaid dividends of $0.072.
This represents a net annualized yield of 6.31%, based on a month-
end per share net asset value of $14.54. Over the same period, the
total investment return on the Fund's Common Stock was +10.54%,
based on a change in per share net asset value from $13.91 to
$14.54, and assuming reinvestment of $0.466 per share income
dividends and $0.246 per share capital gains distributions.
For the six-month period ended April 30, 1995, the Fund's Auction
Market Preferred Stock had an average yield of 4.23% for Series A
and 4.41% for Series B.
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.
<PAGE>
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.
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 taxation policies upon the tax advantage
inherent to municipal bonds have combined to cause tax-exempt bond
yields to increase marginally in recent weeks. Municipal bond yields
have risen approximately 15 basis points 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
Over the past six months, MuniYield California Fund, Inc. benefited
from a fully invested posture of long-term California revenue bonds
that appreciated handsomely during a very potent rally for municipal
securities in general. We positioned the Fund with higher-quality
securities that participated actively when the market moved in
response to the general slowing of the US economy. However, as the
price of municipal securities reached a historically high
relationship to taxable debt, we began taking some profits by
selling a portion of our holdings into an increasingly thin
secondary market.
Recently, market technicals have been conducive to raising cash
reserves since demand has remained relatively constant in the face
of declining new issuance. Our strategy going forward is to raise
cash reserves to approximately 15% of total assets in anticipation
that renewed economic growth later this year combined with
uncertainty of new tax legislation's effect on municipal securities
could cause future price volatility. When available, we will
recommit a portion of these proceeds to higher-couponed cushion
securities, a strategy designed to serve the dual purpose of
providing high current return with a greater degree of price
stability.
In Conclusion
We appreciate your ongoing interest in MuniYield California Fund,
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
May 23, 1995
<PAGE>
THE BENEFITS AND RISKS OF LEVERAGING
MuniYield California 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 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 MuniYield California 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
HFA Housing Finance Agency
RIB Residual Interest Bonds
SAVRS Select Auction Variable Rate
Securities
S/F Single-Family
TRAN Tax Revenue Anticipation Notes
UT Unlimited Tax
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--92.5%
<S> <S> <C> <S> <C>
California Health Facilities Financing Authority Revenue Bonds:
A1+ VMIG1++ $ 1,500 (Catholic Health Care), VRDN, Series C, 4.35% due 7/01/2020 (a)(c) $ 1,500
AA Aa3 1,000 (Kaiser Permanente), Series A, 7% due 12/01/2010 1,053
AAA Aaa 2,000 (Kaiser Permanente), Series A, 7% due 10/01/2018 (c) 2,128
AAA Aaa 1,000 Refunding (Adventist Health), Series A, 6.50% due 3/01/2014 (c) 1,028
AAA Aaa 4,085 (San Diego Hospital Association), Series A, 6.70% due 10/01/2010 (c) 4,316
NR* A 2,835 (Scripps Research Institute), Series A, 6.625% due 7/01/2018 2,854
A+ A1 3,600 (Sutter Health), Series 89A, 6.70% due 1/01/2013 3,649
California HFA, Home Mortgage Revenue Bonds:
AA- Aa 2,880 AMT, Series C, 7.45% due 8/01/2011 3,022
AA- Aa 5,000 AMT, Series F-1, 7% due 8/01/2026 5,128
AA- Aa 1,275 Series D, 7.25% due 8/01/2017 1,339
AA- Aa 920 Series F, 7.875% due 8/01/2019 969
AA- Aa 3,000 California HFA, Revenue Bonds, AMT, Linked SAVRS and RIB, 7.59% due 8/01/2023 2,981
California Pollution Control Financing Authority, Resource Recovery Revenue
Bonds, VRDN, AMT (a):
A1 VMIG1++ 400 (Atlantic Richfield Company Project), Series A, 5% due 12/01/2024 400
NR* P1 600 (Delano Project), 5.20% due 8/01/2019 600
NR* P1 1,500 Refunding (Ultra Power Malaga Project), Series A, 5.25% due 4/01/2017 1,500
<PAGE>
California Pollution Control Financing Authority, Solid Waste Disposal
Revenue Bonds (Shell Oil Co.--Martinez Project), VRDN, AMT (a):
A1+ VMIG1++ 1,100 Series A, 4.95% due 10/01/2024 1,100
A1+ VMIG1++ 1,000 Series B, 4.95% due 12/01/2024 1,000
California Public Works Board, Lease Revenue Bonds:
A- A 3,000 (California Community Colleges), Series A, 6.75% due 9/01/2011 3,084
A- A 6,800 (Department of Corrections-Monterey County), Series A, 7% due 11/01/2019 7,151
A- A 5,100 (Various California State University Projects), Series A, 6.625% due
10/01/2010 5,202
A- A 9,800 (Various California State University Projects), Series A, 6.70% due
10/01/2017 10,068
A- A 1,550 (Various Community College Projects), 7% due 3/01/2014 1,630
A- A 3,535 (Various Community College Projects), 7% due 3/01/2019 3,710
AA Aa 5,180 California State Department of Water Resources Revenue Bonds (Central
Valley Project), Series K, 6% due 12/01/2021 5,026
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<CAPTION>
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
California (continued)
<S> <S> <C> <S> <C>
California Statewide Community Development Authority Revenue Bonds, COP:
A1+ NR* $ 3,445 Refunding (House of Ear Institute), VRDN, 4.85% due 12/01/2018 (a) $ 3,445
A1+ VMIG1++ 4,500 Refunding (Saint Joseph Health System), VRDN, 4.55% due 7/01/2008 (a) 4,500
AA Aa 4,750 (Saint Joseph Health System Group), 6.625% due 7/01/2021 4,872
NR* Baa1 5,895 Concord, California, Redevelopment Agency, Tax Allocation Refunding Bonds
(Central Concord Redevelopment Project), Sub-Series A, 6% due 7/01/2019 5,655
A+ A1 3,000 Contra Costa County, California, COP (Merrithew Memorial Hospital), 6.60%
due 11/01/2012 3,019
BBB NR* 1,000 Contra Costa County, California, Public Financing Authority, Tax Allocation
Revenue Refunding Bonds, Series A, 7.10% due 8/01/2022 1,020
AAA Aaa 395 Culver City, California, Redevelopment Finance Authority Revenue Bonds
(Senior Lien Project Loans), Series A, 6.75% due 11/01/2015 (b) 416
AAA Aaa 2,150 Culver City, California, Wastewater Facilities Revenue Bonds, Series A,
6.75% due 9/01/2016 (d) 2,262
<PAGE>
AAA Aaa 3,500 East Bay, California, Municipal Utility District Water System, Subordinated
Revenue Refunding Bonds, 6% due 6/01/2012 (c) 3,492
AAA Aaa 1,000 El Cajon, California, Redevelopment Agency, Tax Allocation Bonds (El Cajon
Redevelopment Project), 6.60% due 10/01/2022 (b) 1,043
BBB NR* 1,500 Fresno, California, Joint Powers Financing Authority, Local Agency Revenue
Refunding Bonds, Series A, 6.55% due 9/02/2012 1,480
AAA Aaa 5,000 Fresno, California, Sewer Revenue Bonds, Series A-1, 6.25% due 9/01/2014 (b) 5,176
BBB Baa 1,955 Inglewood, California, Public Financing Authority Revenue Bonds (Manchester
-Prairie-North Inglewood Industrial Park Project), Series B, 7% due 5/01/2022 1,982
AA Aa 5,535 Long Beach, California, Water Revenue Refunding Bonds, 6.25% due 5/01/2024 5,535
AAA Aaa 3,645 Los Angeles, California, Community Redevelopment Agency, Tax Allocation
Refunding Bonds (Bunker Hill), Series H, 6.50% due 12/01/2015 (f) 3,749
AA Aa 2,200 Los Angeles, California, Department of Water and Power, Electric Plant Revenue
Refunding Bonds, 6.375% due 2/01/2020 2,222
Los Angeles, California, Department of Water and Power, Waterworks Revenue
Bonds:
AAA Aaa 3,925 6.30% due 7/01/2024 (c) 3,956
AA Aa 1,750 6.50% due 4/15/2032 1,776
AA Aa 3,000 Los Angeles, California, Harbor Department Revenue Bonds, AMT, Series B,
6.625% due 8/01/2019 3,059
AAA Aaa 3,000 Los Angeles, California, Wastewater System Revenue Bonds, Series D, 6.625% due
12/01/2012 (c) 3,126
AAA Aaa 12,400 Los Angeles County, California, COP (Correctional Facilities Project), 6.50%
due 9/01/2013 (c) 12,740
A1+ VMIG1++ 8,900 Los Angeles County, California, Metropolitan Transportation Authority, Sales
Tax Revenue Refunding Bonds (Proposition C--Second Senior), VRDN, Series A,
4.55% due 7/01/2020 (a)(c) 8,900
SP1+ MIG1++ 2,900 Los Angeles County, California, TRAN, UT, 4.50% due 6/30/1995 2,900
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued)) (in Thousands)
<CAPTION>
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
California (continued)
<S> <S> <C> <S> <C>
Los Angeles County, California, Transportation Commission, Sales Tax Revenue
Bonds, Series A:
AA- Aaa $ 6,500 6.75% due 7/01/2001 (g) $ 7,160
AAA Aaa 1,500 Proposition C, Second Series A, 6.25% due 7/01/2013 (c) 1,518
AA- A1 2,000 Refunding, 7% due 7/01/2019 2,085
M-S-R Public Power Agency, California, Revenue Bonds (San Juan Project):
A A 5,000 Series C, 6.875% due 7/01/2019 5,157
AAA Aaa 2,955 Series E, 6.50% due 7/01/2017 (c) 3,038
AA Aa 8,000 Metropolitan Water District, Southern California, Waterworks Revenue Bonds,
6.625% due 7/01/2012 8,297
AAA Aaa 2,500 Northern California Power Agency, Multiple Capital Facilities Revenue Bonds,
RIB, 8.544% due 9/02/2025 (c)(h) 2,669
AAA Aaa 1,985 Northern California Power Agency, Public Power Revenue Bonds
(Hydroelectric Project 1), Series E, 7.15% due 7/01/2024 (c) 2,135
AAA Aaa 16,000 Orange County, California, Local Transportation Authority, Sales Tax
Revenue Bonds, Second Series, Linked SAVRS and RIB, 6.10% due 2/14/2011 (d) 16,241
AAA Aaa 1,360 Orchard, California, School District Bonds, Series A, 6.50% due 8/01/2019 (d) 1,413
A NR* 5,000 Palmdale, California, Civic Authority Revenue Refunding Bonds (Merged
Redevelopment Project Areas), Series A, 6.60% due 9/01/2034 5,113
AAA Aaa 3,905 Rancho Cucamonga, California, Redevelopment Agency, Tax Allocation Bonds
(Rancho Redevelopment Project), 6.75% due 9/01/2020 (c) 4,078
NR* A 3,750 Rancho Mirage, California, Joint Powers Financing Authority, COP (Eisenhower
Memorial Hospital), 7% due 3/01/2022 3,887
Redwood City, California, Public Financing Authority, Local Agency Revenue
Bonds:
AAA Aaa 5,025 Refunding, Series A, 6.50% due 7/15/2011 (b) 5,222
A- NR* 1,500 Series B, 7.25% due 7/15/2011 1,592
A+ Aaa 18,000 Sacramento, California, City Financing Authority Revenue Bonds, 6.80%
due 11/01/2001 (g) 20,031
<PAGE>
Sacramento, California, Municipal Utility District, Electric Revenue
Bonds, Series B (c):
AAA Aaa 3,180 6.25% due 8/15/2011 3,242
AAA Aaa 3,400 6.375% due 8/15/2022 3,444
San Francisco, California, City and County Airport Commission, International
Airport Revenue Bonds, Second Series:
AAA Aaa 1,500 Issue 5, AMT, 6.50% due 5/01/2019 (d) 1,527
AAA Aaa 4,525 Issue 6, AMT, 6.60% due 5/01/2020 (b) 4,653
AAA Aaa 11,000 Refunding, Issue 1, 6.50% due 5/01/2013 (b) 11,355
AA A1 5,480 San Francisco, California, City and County, GO, UT (Variable Purpose
Projects), Series A, 6.50% due 12/15/2010 5,643
AA Aa 5,000 San Francisco, California, City and County Public Utilities Commission, Water
Revenue Bonds, Series A, 6.50% due 11/01/2017 5,098
AAA Aaa 4,715 San Francisco, California, City and County Redevelopment Agency, Lease
Revenue Bonds (George R. Moscone Convention Center), 6.80% due 7/01/2019 5,026
</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 $ 3,180 Santa Clara, California, Electric Revenue Bonds, Series A, 6.50% due
7/01/2021 (c) $ 3,263
AAA Aaa 9,525 Santa Clara County, California, Financing Authority, Lease Revenue Bonds
(VMC Facility Replacement Project), Series A, 6.75% due 11/15/2020 (b) 10,089
AA A1 5,000 Santa Clara County, California, Transportation District, Sales Tax
Revenue Bonds, Series A, 6.75% due 6/01/2011 5,213
AAA Aaa 3,000 Santa Fe Springs, California, Redevelopment Agency, Tax Allocation Bonds
(Conservation Redevelopment Project), Series A, 6% due 9/01/2014 (c) 2,936
AAA Aaa 7,750 Santa Rosa, California, Wastewater Revenue Bonds (Sub-Regional Wastewater
Project), Series A, 6.50% due 9/01/2022 (d) 7,973
AAA NR* 1,145 Southern California Home Financing Authority, S/F Mortgage Revenue Bonds,
AMT, Series A, 6.75% due 9/01/2022 (e) 1,161
A A 3,460 Southern California Public Power Authority, Power Revenue Bonds (Multiple
Projects), 6.75% due 7/01/2012 3,622
<PAGE>
AA- Aa 1,000 Southern California Public Power Authority, Transmission Project, Revenue
Refunding Bonds (Southern Transmission Project), 6.125% due 7/01/2018 987
AAA Aaa 5,000 Stockton, California, COP, Revenue Bonds (Wastewater Treatment Plant
Expansion), Series A, 6.80% due 9/01/2024 (d) 5,325
University of California Revenue Bonds (Multiple Purpose Projects):
A- NR* 3,300 Refunding, Series A, 6.875% due 9/01/2002 (g) 3,695
AAA Aaa 3,010 Refunding, Series C, 5% due 9/01/2023 (b) 2,523
AAA Aaa 3,765 Series D, 6.375% due 9/01/2019 (c) 3,813
Puerto Rico--3.9%
A Baa1 4,850 Puerto Rico Commonwealth, GO, UT, 6.50% due 7/01/2023 4,919
A Baa1 5,500 Puerto Rico Commonwealth, Highway and Transportation Authority, Highway
Revenue Refunding Bonds, Series V, 6.625% due 7/01/2012 5,661
A- Baa1 2,985 Puerto Rico Electric Power Authority, Power Revenue Bonds, Series P, 7%
due 7/01/2021 3,198
Total Investments (Cost--$339,881)--96.4% 350,765
Other Assets Less Liabilities--3.6% 13,161
--------
Net Assets--100.0% $363,926
========
<FN>
(a)The interest rate is subject to change periodically based upon
prevailing market rates. The interest rate shown is the rate in
effect at April 30, 1995.
(b)AMBAC Insured.
(c)MBIA Insured.
(d)FGIC Insured.
(e)FNMA/GNMA Collateralized.
(f)FSA Insured.
(g)Prerefunded.
(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.
*Not Rated.
++Highest short-term rating by Moody's Investors Service, Inc.
See Notes to Financial Statements.
</TABLE>
<PAGE>
FINANCIAL INFORMATION
<TABLE>
Statement of Assets, Liabilities and Capital as of April 30, 1995
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$339,881,104)
(Note 1a) $350,764,845
Cash 6,604,585
Receivables:
Interest $ 6,396,352
Securities sold 3,668,698 10,065,050
------------
Deferred organization expenses (Note 1e) 13,469
Prepaid expenses 26,778
------------
Total assets 367,474,727
------------
Liabilities: Payables:
Securities purchased 2,985,752
Dividends to shareholders (Note 1f) 371,756
Investment adviser (Note 2) 141,003 3,498,511
------------
Accrued expenses and other liabilities 49,728
------------
Total liabilities 3,548,239
------------
Net Assets: Net assets $363,926,488
============
Capital: Capital Stock (200,000,000 shares authorized) (Note 4):
Preferred Stock, par value $.10 per share (4,800 shares
of AMPS* issued and outstanding at $25,000 per share
liquidation preference) $120,000,000
Common Stock, par value $.10 per share (16,781,559 shares
issued and outstanding) $ 1,678,156
Paid-in capital in excess of par 233,789,721
Undistributed investment income--net 3,142,331
Accumulated realized capital losses on investments--net (5,567,461)
Unrealized appreciation on investments--net 10,883,741
------------
Total--Equivalent to $14.54 net asset value per share of
Common Stock (market price--$13.125) 243,926,488
------------
Total capital $363,926,488
============
<FN>
*Auction Market Preferred Stock.
See Notes to Financial Statements.
</TABLE>
<PAGE>
FINANCIAL INFORMATION (continued)
<TABLE>
Statement of Operations
<CAPTION>
For the Six
Months Ended
April 30, 1995
<S> <S> <C> <C>
Investment Income Interest and amortization of premium and discount earned. $ 11,080,995
(Note 1d):
Expenses: Investment advisory fees (Note 2) $ 867,524
Commission fees (Note 4) 145,576
Professional fees 37,992
Accounting services (Note 2) 30,639
Printing and shareholder reports 30,214
Transfer agent fees 24,005
Custodian fees 14,212
Listing fees 12,233
Directors' fees and expenses 11,105
Pricing fees 6,416
Amortization of organization expenses (Note 1e) 2,809
Other 13,981
------------
Total expenses 1,196,706
------------
Investment income--net 9,884,289
------------
Realized & Realized loss on investments (5,568,529)
Unrealized Gain Change in unrealized appreciation/depreciation on invest
(Loss) on ments--net 20,672,724
Investments ------------
- --Net (Notes Net Increase in Net Assets Resulting from Operations $ 24,988,484
1b, 1d & 3): ============
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (continued)
<PAGE>
<TABLE>
Statements of Changes in Net Assets
<CAPTION>
For the Six For the
Months Ended Year Ended
Increase (Decrease) in Net Assets: April 30, 1995 Oct. 31, 1994
<S> <S> <C> <C>
Operations: Investment income--net $ 9,884,289 $ 20,668,758
Realized gain (loss) on investments--net (5,568,529) 4,877,369
Change in unrealized appreciation/depreciation on investments
--net 20,672,724 (49,417,622)
------------ ------------
Net increase (decrease) in net assets resulting from operations 24,988,484 (23,871,495)
------------ ------------
Dividends & Investment income--net:
Distributions to Common Stock (7,814,132) (16,790,151)
Shareholders Preferred Stock (1,796,928) (3,140,796)
(Note 1f): Realized gain on investments--net:
Common Stock (4,134,976) (1,122,166)
Preferred Stock (741,300) (171,888)
------------ ------------
Net decrease in net assets resulting from dividends and
distributions to shareholders (14,487,336) (21,225,001)
------------ ------------
Net Assets: Total increase (decrease) in net assets 10,501,148 (45,096,496)
Beginning of period 353,425,340 398,521,836
------------ ------------
End of period* $363,926,488 $353,425,340
============ ============
<FN>
*Undistributed investment income--net $ 3,142,331 $ 2,869,102
============ ============
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (concluded)
<PAGE>
<TABLE>
Financial Highlights
<CAPTION>
For the
For the Period
The following per share data and ratios have been derived Six Months For the Feb. 28,
from information provided in the financial statements. Ended Year Ended 1992++ to
April 30, October 31, October 31,
Increase (Decrease) in Net Asset Value: 1995 1994 1993 1992
<S> <S> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 13.91 $ 16.60 $ 14.03 $ 14.18
Operating -------- -------- -------- --------
Performance: Investment income--net .60 1.23 1.22 .77
Realized and unrealized gain (loss) on investments
--net .91 (2.65) 2.62 (.07)
-------- -------- -------- --------
Total from investment operations 1.51 (1.42) 3.84 .70
-------- -------- -------- --------
Less dividends and distributions to Common Stock
shareholders:
Investment income--net (.47) (1.00) (.99) (.55)
Realized gain on investments--net (.25) (.07) (.08) --
-------- -------- -------- --------
Total dividends and distributions to Common Stock
shareholders (.72) (1.07) (1.07) (.55)
-------- -------- -------- --------
Capital charge resulting from issuance of Common
Stock -- -- -- (.02)
-------- -------- -------- --------
Effect of Preferred Stock activity:++++
Dividends and distributions to Preferred Stock
shareholders:
Investment income--net (.11) (.19) (.18) (.14)
Realized gain on investments--net (.05) (.01) (.02) --
Capital charge resulting from issuance of
Preferred Stock -- -- -- (.14)
-------- -------- -------- --------
Total effect of Preferred Stock activity (.16) (.20) (.20) (.28)
-------- -------- -------- --------
Net asset value, end of period $ 14.54 $ 13.91 $ 16.60 $ 14.03
======== ======== ======== ========
Market price per share, end of period $ 13.125 $ 12.125 $ 15.625 $ 14.50
======== ======== ======== ========
Total Based on market price per share 14.47%+++ (16.36%) 15.56% .43%+++
Investment ======== ======== ======== ========
Return:** Based on net asset value per share 10.54%+++ (9.69%) 26.88% 2.79%+++
======== ======== ======== ========
Ratios to Expenses, net of reimbursement .69%* .66% .69% .54%*
Average ======== ======== ======== ========
Net Assets:*** Expenses .69%* .66% .69% .71%*
======== ======== ======== ========
Investment income--net 5.70%* 5.44% 5.35% 5.65%*
======== ======== ======== ========
<PAGE>
Supplemental Net assets, net of Preferred Stock, end of period
Data: (in thousands) $243,926 $233,425 $278,522 $233,502
======== ======== ======== ========
Preferred Stock outstanding, end of period (in
thousands) $120,000 $120,000 $120,000 $120,000
======== ======== ======== ========
Portfolio turnover 23.13% 78.89% 21.68% 28.75%
======== ======== ======== ========
Dividends Per Series A--Investment income--net $ 353 $ 694 $ 547 $ 449
Share on Series B--Investment income--net 396 615 688 481
Preferred Stock
Outstand-
ing:++++++
<FN>
*Annualized.
**Total investment returns based on market value, which can be
significantly greater or lesser than the net asset value, may result
in substantially different returns. Total investment returns exclude
the effects of sales loads.
***Do not reflect the effect of dividends to Preferred Stock
shareholders.
++Commencement of Operations.
++++The Fund's Preferred Stock was issued on April 10, 1992.
++++++Dividends per share have been adjusted to reflect a two-for-
one stock split.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
MuniYield California Fund, 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 MYC.
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 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.
(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 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).
<PAGE>
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.
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, 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 $76,880,484 and
$113,008,312, respectively.
Net realized and unrealized gains (losses) as of April 30, 1995 were
as follows:
<PAGE>
Realized
Gains Unrealized
(Losses) Gains
Long-term investments $(3,417,012) $10,883,741
Short-term investments 24,139 --
Financial futures contracts (2,175,656) --
----------- -----------
Total $(5,568,529) $10,883,741
=========== ===========
As of April 30, 1995, net unrealized appreciation for Federal income
tax purposes aggregated $10,883,741, of which $11,409,415 related to
appreciated securities and $525,674 related to depreciated
securities. The aggregate cost of investments at April 30, 1995 for
Federal income tax purposes was $339,881,104.
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 16,781,559. At April 30, 1995,
total paid-in capital amounted to $235,467,877.
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 April 30, 1995 were:
Series A, 4.05% and Series B, 4.50%.
A two-for-one stock split occurred on December 1, 1994. As a result,
for the six months ended April 30, 1995, there were 4,800 AMPS
shares authorized, issued and outstanding with a liquidation
preference of $25,000 per share, plus accumulated and unpaid
dividends of $604,923.
The Fund pays commissions to certain broker-dealers at the end of
each auction at the annual rate ranging from 0.25% to 0.375%,
calculated on the proceeds of each auction. For the six months ended
April 30, 1995, MLPF&S, an affiliate of FAM, earned $130,088 as
commissions.
<PAGE>
5. 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
$0.071961 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 $.30 $ .01 $ .22 $.24 $.04 -- --
August 1, 1993 to October 31, 1993 .31 .03 .77 .26 .05 -- --
November 1, 1993 to January 31, 1994 .31 .13 .02 .26 .04 $.07 $.01
February 1, 1994 to April 30, 1994 .30 .36 (2.24) .24 .05 -- --
May 1, 1994 to July 31, 1994 .31 .03 .23 .25 .05 -- --
August 1, 1994 to October 31, 1994 .31 (.22) (.96) .25 .05 -- --
November 1, 1994 to January 31, 1995 .31 (.34) .74 .24 .04 .25 .05
February 1, 1995 to April 30, 1995 .29 .01 .50 .23 .07 -- --
<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 $15.96 $15.49 $15.50 $14.625 1,329
August 1, 1993 to October 31, 1993 16.80 15.80 16.375 15.125 2,021
November 1, 1993 to January 31, 1994 16.68 16.07 15.875 15.00 1,867
February 1, 1994 to April 30, 1994 16.62 14.35 15.875 13.125 2,112
May 1, 1994 to July 31, 1994 15.41 14.40 14.00 13.00 1,478
August 1, 1994 to October 31, 1994 15.11 13.90 13.875 12.00 1,818
November 1, 1994 to January 31, 1995 14.02 12.77 12.75 11.25 4,025
February 1, 1995 to April 30, 1995 14.82 14.03 13.625 12.625 1,160
<FN>
*Calculations are based upon Common Stock outstanding at the end of
each quarter.
**As reported in the consolidated transaction reporting system.
***In thousands.
</TABLE>
<PAGE>
OFFICERS AND DIRECTORS
Arthur Zeikel, President and Director
Herbert I. London, Director
Robert R. Martin, Director
Joseph L. May, Director
Andre F. Perold, 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 NewYork
90 Washington Street
New York, New York 10286
Transfer Agents
Common Stock:
The Bank of NewYork
101 Barclay Street
New York, New York 10286
Preferred Stock:
IBJ Schroder Bank & Trust Company
One State Street
New York, New York 10004
<PAGE>
NYSE Symbol
MYC
