MUNIYIELD
CALIFORNIA
FUND, INC.
FUND LOGO
Annual Report
October 31, 1998
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 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
California Fund, Inc.
Box 9011
Princeton, NJ
08543-9011
Printed on post-consumer recycled paper
MuniYield California Fund, Inc.
TO OUR SHAREHOLDERS
For the year ended October 31, 1998, the Common Stock of MuniYield
California Fund, Inc. earned $0.936 per share income dividends,
which included earned and unpaid dividends of $0.082. This
represents a net annualized yield of 5.76%, based on a month-end net
asset value of $16.23 per share. Over the same period, the total
investment return on the Fund's Common Stock was +8.10%, based on a
change in per share net asset value from $15.98 to $16.23, and
assuming reinvestment of $0.934 per share income dividends and
$0.065 per share capital gains distributions.
For the six-month period ended October 31, 1998, the total
investment return on the Fund's Common Stock was +6.75%, based on a
change in per share net asset value from $15.64 to $16.23, and
assuming reinvestment of $0.454 per share income dividends.
The average yields of the Fund's Auction Market Preferred Stock for
the six months ended October 31, 1998 were as follows: Series A,
3.32%; Series B, 3.59%; and Series C, 3.08%.
The Municipal Market Environment
During the six months ended October 31, 1998, long-term bond yields
declined significantly. The near absence of any inflationary
pressures in the United States continued to support historic low
interest rates. Additionally, foreign economic factors have
continued to outweigh US domestic fundamentals, as they have for
much of 1998. The economic crisis that began in Asia over a year ago
has spread both to Russia and South America. However, economic
factors in these countries have begun to negatively impact US
growth. For example, employment in the US manufacturing sector
declined in recent months as a result of reduced demand for export
goods. Concern that the modest decline in US economic growth seen
thus far would spread and intensify led the Federal Reserve Board to
lower short-term interest rates in late September, in mid-October
and in mid-November. These actions were taken to offset the drag of
foreign economies on future US growth.
US Treasury bond yields continued to benefit from a strong "flight
to quality" as foreign investors were drawn to the relative safe
haven of US Government securities. Additionally, the sharp equity
market correction, which began at the end of August, triggered a
further flight into US Treasury securities. Long-term US Treasury
bond yields fell over 90 basis points (0.90%) to approximately 5% by
the end of September. This is the lowest level since the US Treasury
reintroduced 30-year maturity bond auctions in 1977.
By early October, worldwide investor confidence began to rise,
reducing the demand for the safety and liquidity of US Treasury
securities. Investor confidence was restored by the belief that
major world governments, as well as the International Monetary Fund,
would take the necessary action to support weak domestic economies
in Asia and Latin America. Additionally, rapid recovery in US and
world equity markets caused some investors to reallocate funds from
US debt instruments back to various world equity markets. US
Treasury security yields rose for the remainder of the month to end
October at 5.15%. During the six-month period ended October 31,
1998, long-term Treasury security yields declined approximately 80
basis points.
During the past 12 months, the tax-exempt bond market has contended
with significant new-issue supply pressures. Over the past year,
more than $277 billion in new long-term tax-exempt bonds were
underwritten, an increase of almost 30% compared to the same period
a year ago. During the most recent six-month period, approximately
$140 billion in new long-term municipal bonds were underwritten,
representing an increase of more than 15% over the same six-month
period last year. This increased supply, coupled with the high
returns the US equity market generated for much of 1998, was one of
the major reasons municipal bond yields declined less than their
taxable counterparts during the period.
The continued increase in new bond issuance has required ever-lower
tax-exempt bond yields to generate the economic savings necessary
for additional municipal bond financings. Consequently, the pace of
new bond issuance has slowed in recent months. In fact, the trend
may be reversing. During the three months ended October 31, 1998,
just over $60 billion in new long-term municipal bonds were
underwritten, a decline of 4% compared to the same quarter a year
ago. During the month of October, there were less than $20 billion
in new municipal bond securities issued, a decline of over 10%
compared to October 1997. We will monitor this trend closely in the
coming months to determine if the supply pressures exerted thus far
in 1998 are abating and fostering a more balanced supply/demand
environment.
MuniYield California Fund, Inc.
October 31, 1998
Throughout the six-month period ended October 31, 1998, municipal
bond yields followed a pattern that was similar to US Treasury
securities, although the yield declines were more muted. As measured
by the unmanaged Bond Buyer Revenue Bond Index, long-term, uninsured
tax-exempt revenue bond yields declined over 40 basis points to
5.09% by the end of September, their lowest level since the early
1970s. Municipal bond yields rose during October to end the period
at 5.24%. Over the past six months, long-term tax-exempt bond yields
declined almost 30 basis points.
Although municipal bond yields declined during the six-month period,
recent supply pressures and the absence of the safe haven status
enjoyed by US securities caused municipal bond yields to rise
relative to US Treasury bond yields. At October 31, 1998, long-term
tax-exempt bond yield spreads were attractive relative to US
Treasury securities of comparable maturities (over 100%), well in
excess of their historic range of 85%--88%. Tax-exempt bond yield
ratios have rarely exceeded 90% in the 1980s and 1990s.
Historically, yield spreads have been wider than these levels when
there have been potential changes in Federal tax codes that would
have adversely affected the tax-favored status of municipal bonds.
Currently, municipal bond investors find themselves in a unique
investment environment. Previous opportunities to purchase tax-
exempt bonds with yields exceeding that of comparable US Treasury
issues have been limited to relatively brief episodes and then
further limited to a few municipal credits undergoing specific
financial pressures. At present, almost the entire municipal bond
universe, across nearly all maturity and credit sectors, can be
purchased at yields greater than their taxable counterparts.
However, the current opportunity may quickly disappear should tax-
exempt bond supply pressures diminish or the safe-haven status of US
Treasury securities become less desirable. Under these conditions,
municipal bond ratios should quickly revert to more normal historic
percentages, certainly well below their presently attractive levels.
Portfolio Strategy
In general, we have continuously managed MuniYield California Fund,
Inc. with a focus on seeking to enhance current income. As a result
of this strategy, during the six months ended October 31, 1998, the
Fund had an above-industry average yield, largely because it is one
of the more mature leveraged California municipal tax-exempt
portfolios.
Recently, we have made an effort to balance the Fund's high-coupon
structure by adding performance-based positions that are more
sensitive to interest rate moves. We believe these additions offer
greater total return potential if the general level of interest
rates resumes its decline later this year. The Fund's portfolio
includes a significant position in securities with call features
that may be exercised within the next three years--four years.
We have begun extending the portfolio's call protection in order to
seek to secure the Fund's income stream. A growing Federal budget
surplus, a corresponding reduction of US Treasury bond issuance and a
historically low level of inflation lead us to believe that interest
rates will continue to trend lower. Also, as the California
municipal calendar of new issuance subsides, the technical position
of the municipal market is likely to improve, possibly leading to
significant price appreciation. California municipal bonds are
currently at historically attractive yield spreads relative to their
taxable counterparts. Therefore, we believe a more aggressive
portfolio strategy is warranted. However, we will not lower the
credit quality of our investments. With the inordinately tight
credit quality spreads, over 90% of the Fund's net assets was
invested in securities rated AA or better by at least one of the
major rating agencies as of October 31, 1998.
In Conclusion
We appreciate your ongoing interest in MuniYield California Fund,
Inc., and we look forward to assisting you with your financial needs
in the months and years to come.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Vincent R. Giordano)
Vincent R. Giordano
Senior Vice President
(Walter C. O'Connor)
Walter C. O'Connor
Vice President and Portfolio Manager
December 11, 1998
MuniYield California Fund, Inc.
October 31, 1998
PROXY RESULTS
During the six-month period ended October 31, 1998, MuniYield
California Fund, Inc. Common Stock shareholders voted on the
following proposals. The proposals were approved at a shareholders'
meeting on September 24, 1998. The description of each proposal and
number of shares voted are as follows:
<TABLE>
<CAPTION>
Shares Shares Withheld
Voted For From Voting
<S> <S> <C> <C>
1. To elect the Fund's Board of Directors: James H. Bodurtha 20,152,467 415,497
Herbert I. London 20,153,708 414,256
Robert R. Martin 20,145,567 422,397
Arthur Zeikel 20,149,396 418,568
<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. 19,985,317 124,309 458,338
</TABLE>
During the six-month period ended October 31, 1998, MuniYield
California Fund, Inc. Preferred Stock shareholders (Series A, B and
C) voted on the following proposals. The proposals were approved at
a shareholders' meeting on September 24, 1998. The description of
each proposal and number of shares voted are as follows:
<TABLE>
<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 2,400 0
Series B 2,014 0
James H. Bodurtha, Robert R. Martin
Andre F. Perold and Arthur Zeikel: Series C 800 0
Herbert I. London and Joseph L. May: Series C 796 4
<CAPTION>
Shares Shares Voted Shares Voted
Voted For Against Abstain
<S> <S> <C> <C> <C>
2. To ratify the selection of Deloitte &
Touche LLP as the Fund's independent
auditors for the fiscal year as follows: Series A 2,400 0 0
Series B 2,005 0 8
Series C 800 0 0
</TABLE>
MuniYield California Fund, Inc.
October 31, 1998
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 pickup on the
Common Stock will be reduced or eliminated completely. At the same
time, the market value of the fund's Common Stock (that is, its
price as listed on the New York Stock Exchange) may, as a result,
decline. Furthermore, if long-term interest rates rise, the Common
Stock's net asset value will reflect the full decline in the price
of the portfolio's investments, since the value of the fund's
Preferred Stock does not fluctuate. In addition to the decline in
net asset value, the market value of the fund's Common Stock may
also decline.
As a part of its investment strategy, the Fund may invest in certain
securities whose potential income return is inversely related to
changes in a floating interest rate ("inverse floaters"). In
general, interest rates on inverse floaters will decrease when short-
term interest rates increase and increase when short-term interest
rates decrease. Investments in inverse floaters may be characterized
as derivative securities and may subject the Fund to the risks of
reduced or eliminated interest payments and losses of invested
principal. In addition, inverse floaters have the effect of
providing investment leverage and, as a result, the market value of
such securities will generally be more volatile than that of fixed-
rate, tax-exempt securities. To the extent the Fund invests in
inverse floaters, the market value of the Fund's portfolio and the
net asset value of the Fund's shares may also be more volatile than
if the Fund did not invest in such securities.
MuniYield California Fund, Inc.
October 31, 1998
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 below and at right.
AMT Alternative Minimum Tax (subject to)
COP Certificates of Participation
GO General Obligation Bonds
HFA Housing Finance Agency
IDR Industrial Development Revenue Bonds
PCR Pollution Control Revenue Bonds
RIB Residual Interest Bonds
RITR Residual Interest Trust Receipts
S/F Single-Family
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--98.4%
<S> <S> <C> <S> <C>
AA Aa2 $ 4,500 California Educational Facilities Authority Revenue Bonds (University
of Southern California), Series A, 5% due 10/01/2028 $ 4,486
California HFA, Home Mortgage Revenue Bonds, AMT:
AA- Aa2 395 Series C, 7.60% due 8/01/2030 (c) 414
AA- Aa2 410 Series D, 7.75% due 8/01/2010 (c) 433
AAA Aaa 5,000 Series E, 6.10% due 8/01/2029 (a) 5,350
AA- Aa2 2,550 Series E-1, 6.70% due 8/01/2025 (c) 2,746
AA- Aa2 6,930 Series F-1, 7% due 8/01/2026 (c) 7,533
AAA Aaa 3,000 Series J-2, 5.30% due 8/01/2016 (f) 3,039
AA- Aa2 5,670 Series N, 6.375% due 2/01/2027 (c) 6,132
AA- Aa2 2,180 California HFA, Home Mortgage Revenue Bonds, Series D, 7.25% due 8/01/2017 (c) 2,300
A+ Aa2 3,750 California HFA, Revenue Bonds, RIB, AMT, 9.061% due 8/01/2023 (g) 4,322
A1+ VMIG1++ 1,400 California Health Facilities Finance Authority, Revenue Refunding Bonds
(Adventist Hospital), VRDN, Series B, 3.60% due 9/01/2028 (h) 1,400
California Health Facilities Financing Authority Revenue Bonds:
A1+ VMIG1++ 3,500 (Adventist Health Systems), VRDN, Series A, 3.60% due 9/01/2028 (h) 3,500
AAA Aaa 10,000 RITR, Series 14, 7.02% due 8/15/2030 (f)(g) 10,750
AAA Aaa 4,085 (San Diego Hospital Association), Series A, 6.70% due 10/01/2001 (f)(j) 4,523
NR* A1 2,835 (Scripps Research Institute), Series A, 6.625% due 7/01/2018 3,159
AAA Aaa 5,435 California Health Facilities Financing Authority, Revenue Refunding Bonds
(Children's Hospital), 5.375% due 7/01/2016 (f) 5,657
A1+ NR* 2,900 California Pollution Control Financing Authority, PCR, Refunding (Pacific
Gas & Electric), Series B, VRDN, 3.70% due 11/01/2026 (h) 2,900
NR* Aaa 1,215 California Rural Home Mortgage Finance Authority, S/F Mortgage Revenue Bonds
(Mortgage-Backed Securities Program), AMT Series A-1, 6.90% due 12/01/2024 (i) 1,355
AAA Aaa 10,000 California State, Department of Water Resources, Water Systems Revenue
Refunding Bonds (Central Valley Project), Series Q, 5.375% due 12/01/2027 (f) 10,391
California State Economic Development Financing Authority Revenue Bonds
(California Independent Systems Project), VRDN (h):
A1+ VMIG1++ 100 Series B, 3.45% due 4/01/2008 100
A1+ VMIG1++ 8,800 Series C, 3.60% due 4/01/2008 8,800
A+ Aa3 9,000 California State, GO, UT, 5.75% due 10/01/2008 10,184
</TABLE>
MuniYield California Fund, Inc.
October 31, 1998
<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 State Public Works Board, Lease Revenue Bonds (j):
A Aaa $ 1,000 (Department of Corrections--Monterey County--Soledad II), Series A,
6.875% due 11/01/2004 $ 1,184
A Aaa 6,800 (Department of Corrections--Monterey County-Soledad II), Series A, 7%
due 11/01/2004 8,095
A Aaa 3,600 (Various California State University Projects), Series A, 6.625%
due 10/01/2002 4,069
AAA Aaa 10,000 (Various California State University Projects), Series A, 6.70% due
10/01/2002 11,331
A Aaa 3,535 (Various Community College Projects), Series B, 7% due 3/01/2004 4,153
California State Public Works Board, Lease Revenue Refunding Bonds:
A A1 4,265 (California Community Colleges), Series D, 5.375% due 3/01/2012 4,510
AAA Aaa 7,125 (California State University Project), Series A, 5.375% due 10/01/2017 (a) 7,456
A+ Aa3 2,500 (Regents University of California), Series B, 5.25% due 11/01/2012 2,649
AAA Aaa 2,625 (Various Community College Project), Series B, 5.625% due 3/01/2019 (a) 2,796
AAA Aaa 10,000 California State, Refunding, GO, UT, 4.25% due 10/01/2026 (f) 8,933
AA Aa3 4,750 California Statewide Community Development Authority Revenue Bonds, COP
(Saint Joseph Health System Group), 6.625% due 7/01/2004 (j) 5,510
AAA Aaa 3,000 Cerritos, California, Public Financing Authority Revenue Bonds (Los Coyotes
Redevelopment Project Loan), Series A, 6.50% due 11/01/2023 (a) 3,698
NR* Aaa 3,000 Contra Costa County, California, COP (Merrithew Memorial Hospital), 6.60% due
11/01/2002 (j) 3,395
AAA Aaa 6,185 Contra Costa County, California, Public Financing Authority, Lease Revenue
Refunding Bonds (Various Capital Facilities), Series A, 5.35% due 8/01/2024 (f) 6,431
BBB NR* 3,000 Contra Costa County, California, Public Financing Authority, Tax Allocation
Revenue Bonds, Series A, 7.10% due 8/01/2022 3,288
NR* NR* 810 Cypress, California, S/F Residential Mortgage Revenue Refunding Bonds, Series B,
7.25% due 1/01/2012 (k) 1,017
AAA Aaa 20,000 East Bay, California, Municipal Utilites District, Water System Revenue Bonds,
4.75% due 6/01/2028 (f) 19,261
AAA Aaa 2,010 Fresno, California, Sewer Revenue Bonds, Series A-1, 6.25% due 9/01/2014 (a) 2,383
BBB Baa 1,845 Inglewood, California, Public Financing Authority Revenue Bonds, Series B,
7% due 5/01/2022 2,001
AAA Aaa 3,645 Los Angeles, California, Community Redevelopment Agency, Tax Allocation
Refunding Bonds (Bunker Hill), Series H, 6.50% due 12/01/2015 (e) 4,109
AAA Aaa 4,000 Los Angeles, California, Convention and Exhibition Center Authority, Lease
Revenue Bonds, RITR, Series 21, 7.02% due 8/15/2018 (f)(g) 4,226
AAA Aaa 6,200 Los Angeles, California, Department of Water and Power, Electric Plant
Revenue Bonds, RITR, Series 18, 7.07% due 11/15/2031 (b)(g) 6,557
A+ Aa3 7,300 Los Angeles, California, Department of Water and Power, Electric Plant
Revenue Refunding Bonds, 6.375% due 2/01/2020 7,917
AAA Aaa 3,925 Los Angeles, California, Department of Water and Power, Waterworks Revenue
Bonds, 6.30% due 7/01/2024 (f) 4,450
AAA Aaa 11,875 Los Angeles, California, Department of Water and Power, Waterworks Revenue
Refunding Bonds, 4.25% due 10/15/2034 (f) 10,449
Los Angeles, California, Harbor Department Revenue Bonds, AMT:
AAA Aaa 4,000 RITR, 8.645% due 11/01/2026 (f)(g) 4,936
AA Aa3 4,240 Series B, 6.60% due 8/01/2015 4,693
AA Aa3 8,855 Series B, 6.625% due 8/01/2019 9,774
AA Aa3 11,000 Series B, 5.375% due 11/01/2023 11,383
</TABLE>
MuniYield California Fund, Inc.
October 31, 1998
<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>
AAA NR* $ 180 Los Angeles, California, S/F Home Mortgage Revenue Bonds (Mortgage-Backed
Securities Program), AMT, Issue A, 7.55% due 12/01/2023 (c)(d) $ 188
AAA Aaa 12,000 Los Angeles, California, Unified School District, Series B, 5% due 7/01/2023 (b) 11,999
AAA Aaa 14,200 Los Angeles, California, Wastewater System Revenue Bonds, Series A, 5% due
6/01/2028 (b) 14,199
Los Angeles, California, Wastewater System, Revenue Refunding Bonds,
Series C (f):
AAA Aaa 6,605 4% due 6/01/2015 6,055
AAA Aaa 6,675 4% due 6/01/2019 5,893
AAA Aaa 5,000 Los Angeles County, California, Metropolitan Transportation Authority,
Sales Tax Revenue Bonds, RITR, Series 30, 6.77% due 7/01/2023 (a)(g) 5,173
AAA Aaa 3,000 Los Angeles County, California, Metropolitan Transportation Authority, Sales
Tax Revenue Refunding Bonds, Proposition A, First Tier, Senior Series A,
5.25% due 7/01/2027 (f) 3,073
AA Aa2 1,250 Metropolitan Water District, Southern California Waterworks Revenue Bonds,
Series A, 5.50% due 7/01/2009 1,385
Northern California Power Agency, Multiple Capital Facilities Revenue
Bonds, RIB (f)(g):
AAA Aaa 1,080 9.192% due 9/03/2002 (j) 1,330
AAA Aaa 1,420 9.192% due 8/01/2025 1,711
Oakland, California, Joint Powers Financing Authority, Lease Revenue Bonds
(Oakland Administration Buildings)(a):
AAA Aaa 2,000 5.90% due 8/01/2016 2,218
AAA Aaa 6,000 5.75% due 8/01/2021 6,502
AAA Aaa 5,395 5.75% due 8/01/2026 5,846
AAA Aaa 2,345 Richmond, California, Redevelopment Agency, Tax Allocation, Refunding Bonds
(Harbour Redevelopment Project), Series A, 5.50% due 7/01/2018 (f) 2,505
AAA Aaa 1,720 San Diego, California, IDR, RITR, Series 97-1, 8.435% due 9/01/2018 (f)(g) 2,037
BBB+ Baa1 1,300 San Diego, California, Redevelopment Agency, Tax Allocation, Refunding
Bonds (Horton Project), Series B, 6.625% due 11/01/2017 1,460
AAA Aaa 10,760 San Diego County, California, Water Authority, Water Revenue Bonds, COP,
Series A, 5% due 5/01/2022 (b) 10,760
San Francisco, California, Bay Area Rapid Transit District, Sales Tax Revenue
Refunding Bonds:
AA- Aa3 4,000 5.25% due 7/01/2010 4,334
AA- Aa3 5,120 5.25% due 7/01/2013 5,422
AAA Aaa 20,000 5% due 7/01/2028 (a) 19,999
San Francisco, California, City and County Airport Commission, International
Airport Revenue Bonds, Second Series:
AAA Aaa 3,000 AMT, Issue 5, 6.50% due 5/01/2019 (b) 3,337
AAA Aaa 4,525 AMT, Issue 6, 6.60% due 5/01/2020 (a) 5,054
AAA Aaa 13,000 Issue 15-B, 4.50% due 5/01/2028 (f) 12,059
AAA Aaa 12,000 Refunding, Issue 1, 6.50% due 5/01/2013 (a) 13,243
AAA Aaa 2,000 Refunding, Issue 2, 6.75% due 5/01/2013 (f) 2,263
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 (e) 5,412
AA+ NR* 105 San Francisco, California, City and County S/F Mortgage Revenue Bonds
(Mortgage-Backed Securities Program), AMT, 7.45% due 1/01/2024 (d) 110
</TABLE>
MuniYield California Fund, Inc.
October 31, 1998
<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>
Santa Clara County, California, Financing Authority, Lease Revenue Bonds (VMC
Facility Replacement Project), Series A (a)(j):
AAA Aaa $ 9,525 6.75% due 11/15/2004 $ 11,226
AAA Aaa 2,000 6.875% due 11/15/2004 2,370
AAA Aaa 3,000 Santa Fe Springs, California, Redevelopment Agency, Tax Allocation Bonds
(Conservation Redevelopment Project), Series A, 6% due 9/01/2014 (f) 3,280
AAA Aaa 7,750 Santa Rosa, California, Wastewater Revenue Bonds (Sub-Regional Wastewater
Project), Series A, 6.50% due 9/01/2002 (b)(j) 8,675
Southern California Home Financing Authority, S/F Mortgage Revenue Bonds, AMT
(Mortgage-Backed Securities Program):
AAA NR* 1,020 Series A, 6.75% due 9/01/2022 (d) 1,076
AAA NR* 1,945 Series A, 7.625% due 10/01/2023 (i) 2,039
AAA NR* 155 Series B, 7.75% due 3/01/2024 (d) 163
AAA Aaa 5,000 Stockton, California, COP, Bonds (Wastewater Treatment Plant Expansion),
Series A, 6.80% due 9/01/2004 (b)(j) 5,881
A NR* 1,365 Torrance, California, Hospital Revenue Refunding Bonds (Little Company of
Mary Hospital), 6.875% due 7/01/2015 1,489
AAA Aaa 6,645 University of California Revenue Bonds, RITR, Series 13, 9.02% due
9/01/2019 (f)(g) 8,222
AA- NR* 3,300 University of California, Revenue Refunding Bonds (Multiple Purpose
Projects), Series A, 6.875% due 9/01/2002 (j) 3,749
Puerto Rico--2.1%
A Baa1 5,500 Puerto Rico Commonwealth, Highway and Transportation Authority, Highway
Revenue Refunding Bonds, Series V, 6.625% due 7/01/2012 6,024
BBB+ Baa1 2,600 Puerto Rico Electric Power Authority, Power Revenue Bonds, Series T, 6.375% due
7/01/2004 (j) 2,973
BBB+ Baa1 1,000 Puerto Rico Electric Power Authority, Power Revenue Refunding Bonds, Series U,
6% due 7/01/2014 1,098
Total Investments (Cost--$454,152)--100.5% 481,960
Liabilities in Excess of Other Assets--(0.5%) (2,615)
--------
Net Assets--100.0% $479,345
========
<FN>
(a)AMBAC Insured.
(b)FGIC Insured.
(c)FHA Insured.
(d)FNMA/GNMA Collateralized.
(e)FSA Insured.
(f)MBIA Insured.
(g)The interest rate is subject to change periodically and inversely
based upon prevailing market rates. The interest rate shown is the
rate in effect at October 31, 1998.
(h)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, 1998.
(i)GNMA Collateralized.
(j)Prerefunded.
(k)Escrowed to maturity.
*Not Rated.
++Highest short-term rating by Moody's Investors Service, Inc.
Ratings of issues shown have not been audited by Deloitte &
Touche LLP.
See Notes to Financial Statements.
</TABLE>
MuniYield California Fund, Inc.
October 31, 1998
FINANCIAL INFORMATION
<TABLE>
Statement of Assets, Liabilities and Capital as of October 31, 1998
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$454,151,767) (Note 1a) $481,960,015
Cash 61,195
Receivables:
Interest $ 8,155,584
Securities sold 6,330,913 14,486,497
------------
Prepaid expenses and other assets 21,068
------------
Total assets 496,528,775
------------
Liabilities: Payables:
Securities purchased 16,814,833
Investment adviser (Note 2) 211,423 17,026,256
------------
Accrued expenses and other liabilities 157,393
------------
Total liabilities 17,183,649
------------
Net Assets: Net assets $479,345,126
============
Capital: Capital Stock (200,000,000 shares authorized) (Note 4):
Preferred Stock, par value $.05 per share (5,600 shares
of AMPS* issued and outstanding at $25,000 per share
liquidation preference) $140,000,000
Common Stock, par value $.10 per share (20,910,434 shares
issued and outstanding) $ 2,091,043
Paid-in capital in excess of par 294,084,121
Undistributed investment income--net 3,679,209
Undistributed realized capital gains on investments--net 11,682,505
Unrealized appreciation on investments--net 27,808,248
------------
Total--Equivalent to $16.23 net asset value per Common
Stock (market price--$16.5625) 339,345,126
------------
Total capital $479,345,126
============
<FN>
*Auction Market Preferred Stock.
See Notes to Financial Statements.
</TABLE>
MuniYield California Fund, Inc.
October 31, 1998
FINANCIAL INFORMATION (continued)
<TABLE>
Statement of Operations
<CAPTION>
For the Year Ended
October 31, 1998
<S> <S> <C> <C>
Investment Income Interest and amortization of premium and discount earned $ 25,150,047
(Note 1d):
Expenses: Investment advisory fees (Note 2) $ 2,250,888
Commission fees (Note 4) 338,832
Professional fees 89,627
Accounting services (Note 2) 65,472
Transfer agent fees 46,061
Custodian fees 34,039
Directors' fees and expenses 23,062
Listing fees 18,494
Pricing fees 11,163
Printing and shareholder reports 7,648
Other 17,721
------------
Total expenses 2,903,007
------------
Investment income--net 22,247,040
------------
Realized & Realized gain on investments--net 14,829,943
Unrealized Gain Change in unrealized appreciation on investments--net (7,832,939)
(Loss) on ------------
Investments--Net Net Increase in Net Assets Resulting from Operations $ 29,244,044
(Notes 1b, 1d & 3): ============
See Notes to Financial Statements.
</TABLE>
MuniYield California Fund, Inc.
October 31, 1998
FINANCIAL INFORMATION (continued)
<TABLE>
Statements of Changes in Net Assets
<CAPTION>
For the Year Ended October 31,
Increase (Decrease) in Net Assets: 1998 1997
<S> <S> <C> <C>
Operations: Investment income--net $ 22,247,040 $ 19,726,136
Realized gain on investments--net 14,829,943 4,361,725
Change in unrealized appreciation on investments--net (7,832,939) 4,684,387
------------ ------------
Net increase in net assets resulting from operations 29,244,044 28,772,248
------------ ------------
Dividends & Investment income--net:
Distributions to Common Stock (17,763,984) (15,659,702)
Shareholders Preferred Stock (3,786,536) (4,036,776)
(Note 1f): Realized gain on investments--net:
Common Stock (1,382,438) --
Preferred Stock (936,720) --
------------ ------------
Net decrease in net assets resulting from dividends and
distributions to shareholders (23,869,678) (19,696,478)
------------ ------------
Capital Stock Value of shares issued to Common Stock shareholders in
Transactions reinvestment of dividends and distributions 3,578,320 139,682
(Note 1e & 4): Proceeds from issuance of Common Stock resulting from
reorganization 62,338,657 --
Offering costs from issuance of Common Stock resulting from
reorganization (243,170) --
Proceeds from issuance of Preferred Stock resulting from
reorganization 20,000,000 --
------------ ------------
Net increase in net assets derived from capital stock
transactions 85,673,807 139,682
------------ ------------
Net Assets: Total increase in net assets 91,048,173 9,215,452
Beginning of year 388,296,953 379,081,501
------------ ------------
End of year* $479,345,126 $388,296,953
============ ============
<FN>
*Undistributed investment income--net (Note 1g) $ 3,679,209 $ 2,982,280
============ ============
See Notes to Financial Statements.
</TABLE>
MuniYield California Fund, Inc.
October 31, 1998
FINANCIAL INFORMATION (concluded)
<TABLE>
Financial Highlights
<CAPTION>
The following per share data and ratios have been derived
from information provided in the financial statements.
For the Year Ended October 31,
Increase (Decrease) in Net Asset Value: 1998 1997 1996 1995 1994
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of year $ 15.98 $ 15.44 $ 15.18 $ 13.91 $ 16.60
Operating -------- -------- -------- -------- --------
Performance: Investment income--net 1.11 1.17 1.16 1.18 1.23
Realized and unrealized gain (loss) on
investments--net .39 .54 .28 1.53 (2.65)
-------- -------- -------- -------- --------
Total from investment operations 1.50 1.71 1.44 2.71 (1.42)
-------- -------- -------- -------- --------
Less dividends and distributions to Common
Stock shareholders:
Investment income--net (.92) (.93) (.93) (.90) (1.00)
Realized gain on investments--net (.08) -- -- (.25) (.07)
-------- -------- -------- -------- --------
Total dividends and distributions to Common
Stock shareholders (1.00) (.93) (.93) (1.15) (1.07)
-------- -------- -------- -------- --------
Capital charge resulting from issuance
of Common Stock (.01) -- -- -- --
-------- -------- -------- -------- --------
Effect of Preferred Stock activity:++
Dividends and distributions to Preferred
Stock shareholders:
Investment income--net (.19) (.24) (.25) (.25) (.19)
Realized gain on investments--net (.05) -- -- (.04) (.01)
-------- -------- -------- -------- --------
Total effect of Preferred Stock activity (.24) (.24) (.25) (.29) (.20)
-------- -------- -------- -------- --------
Net asset value, end of year $ 16.23 $ 15.98 $ 15.44 $ 15.18 $ 13.91
======== ======== ======== ======== ========
Market price per share, end of year $16.5625 $ 15.875 $ 14.875 $ 13.375 $ 12.125
======== ======== ======== ======== ========
Total Investment Based on market price per share 8.10% 13.44% 18.68% 20.62% (16.36%)
Return:* ======== ======== ======== ======== ========
Based on net asset value per share 11.04% 10.01% 8.54% 19.33% (9.69%)
======== ======== ======== ======== ========
Ratios to Average Expenses .65% .67% .67% .69% .66%
Net Assets:** ======== ======== ======== ======== ========
Investment income--net 4.94% 5.14% 5.16% 5.48% 5.44%
======== ======== ======== ======== ========
Supplemental Net assets, net of Preferred Stock,
Data: end of year (in thousands) $339,345 $268,297 $259,082 $254,742 $233,425
======== ======== ======== ======== ========
Preferred Stock outstanding, end of year
(in thousands) $140,000 $120,000 $120,000 $120,000 $120,000
======== ======== ======== ======== ========
Portfolio turnover 136.88% 88.68% 67.48% 69.59% 78.89%
======== ======== ======== ======== ========
Leverage: Asset coverage per $1,000 $ 3,424 $ 3,236 $ 3,159 $ 3,123 $ 2,945
======== ======== ======== ======== ========
Dividends Series A--Investment income--net $ 729 $ 852 $ 875 $ 882 $ 694
Per Share on ======== ======== ======== ======== ========
Preferred Shares Series B--Investment income--net $ 693 $ 830 $ 860 $ 864 $ 615
Outstanding:++++ ======== ======== ======== ======== ========
Series C--Investment income--net $ 466 -- -- -- --
======== ======== ======== ======== ========
<FN>
*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.
++The Fund's Preferred Stock was issued on April 10, 1992 (Series A
and B) and February 9, 1998 (Series C).
++++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 California Fund, Inc.
October 31, 1998
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. 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.
(a) Valuation of investments--Municipal bonds are traded primarily
in the over-the-counter markets and are valued at the most recent
bid price or yield equivalent as obtained by the Fund's pricing
service from dealers that make markets in such securities. Financial
futures contracts and options thereon, which are traded on
exchanges, are valued at their closing prices as of the close of
such exchanges. Options written or purchased are valued at the last
sale price in the case of exchange-traded options. In the case of
options traded in the over-the-counter market, valuation is the last
asked price (options written) or the last bid price (options
purchased). Securities with remaining maturities of sixty days or
less are valued at amortized cost, which approximates market value.
Securities and assets for which market quotations are not readily
available are valued at fair value as determined in good faith by or
under the direction of the Board of Directors of the Fund, including
valuations furnished by a pricing service retained by the Fund,
which may utilize a matrix system for valuations. The procedures of
the pricing service and its valuations are reviewed by the officers
of the Fund under the general supervision of the Board of Directors.
(b) Derivative financial instruments--The Fund may engage in various
portfolio strategies to seek to increase its return by hedging its
portfolio against adverse movements in the debt markets. Losses may
arise due to changes in the value of the contract or if the
counterparty does not perform under the contract.
* Financial futures contracts--The Fund may purchase or sell
financial futures contracts and options on such futures contracts
for the purpose of hedging the market risk on existing securities or
the intended purchase of securities. Futures contracts are contracts
for delayed delivery of securities at a specific future date and at
a specific price or yield. Upon entering into a contract, the Fund
deposits and maintains as collateral such initial margin as required
by the exchange on which the transaction is effected. Pursuant to
the contract, the Fund agrees to receive from or pay to the broker
an amount of cash equal to the daily fluctuation in value of the
contract. Such receipts or payments are known as variation margin
and are recorded by the Fund as unrealized gains or losses. When the
contract is closed, the Fund records a realized gain or loss equal
to the difference between the value of the contract at the time it
was opened and the value at the time it was closed.
* Options--The Fund is authorized to write covered call options and
purchase put options. When the Fund writes an option, an amount
equal to the premium received by the Fund is reflected as an asset
and an equivalent liability. The amount of the liability is
subsequently marked to market to reflect the current market value of
the option written. When a security is purchased or sold through an
exercise of an option, the related premium paid (or received) is
added to (or deducted from) the basis of the security acquired or
deducted from (or added to) the proceeds of the security sold. When
an option expires (or the Fund enters into a closing transaction),
the Fund realizes a gain or loss on the option to the extent of the
premiums received or paid (or gain or loss to the extent the cost of
the closing transaction exceeds the premium paid or received).
Written and purchased options are non-income producing investments.
(c) Income taxes--It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute substantially all of its
taxable income to its shareholders. Therefore, no Federal income tax
provision is required.
(d) Security transactions and investment income--Security
transactions are recorded on the dates the transactions are entered
into (the trade dates). Interest income is recognized on the accrual
basis. Discounts and market premiums are amortized into interest
income. Realized gains and losses on security transactions are
determined on the identified cost basis.
MuniYield California Fund, Inc.
October 31, 1998
NOTES TO FINANCIAL STATEMENTS (concluded)
(e) Offering costs--Direct expenses relating to the issuance of
Common Stock resulting from reorganization were charged to capital.
(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.
(g) Reclassification--Generally accepted accounting principles
require that certain components of net assets be adjusted to reflect
permanent differences between financial and tax reporting.
Accordingly, current year's permanent book/tax differences of $409
have been reclassified between undistributed net realized capital
gains and undistributed net investment income and $328,094 has been
reclassified between undistributed net realized capital gains and
paid-in capital in excess of par. These reclassifications have no
effect on net assets or net asset value per share.
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, including proceeds from the
issuance of Preferred Stock.
Accounting services are provided to the Fund by FAM at cost.
Certain officers and/or directors of the Fund are officers and/or
directors of FAM, PSI, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the year ended October 31, 1998 were $612,702,213 and
$589,614,520, respectively.
Net realized gains (losses) for the year ended October 31, 1998 and
net unrealized gains as of October 31, 1998 were as follows:
Realized Unrealized
Gains (Losses) Gains
Long-term investments $14,934,743 $27,808,248
Financial futures contracts (104,800) --
----------- -----------
Total $14,829,943 $27,808,248
=========== ===========
As of October 31, 1998, net unrealized appreciation for Federal
income tax purposes aggregated $27,639,140, of which $28,464,341
related to appreciated securities and $825,201 related to
depreciated securities. The aggregate cost of investments at October
31, 1998 for Federal income tax purposes was $454,320,875.
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, 1998
increased by 3,896,657 pursuant to a plan of reorganization and by
223,455 as a result of dividend reinvestment and during the year
ended October 31, 1997 increased by 8,763 as a result of dividend
reinvestment.
Preferred Stock
Auction Market Preferred Stock ("AMPS") are shares of Preferred
Stock of the Fund, with a par value of $.05 per share and a
liquidation preference of $25,000 per share, that entitle their
holders to receive cash dividends at an annual rate that may vary
for the successive dividend periods. The yields in effect at October
31, 1998 were: Series A, 3.15%, Series B, 3.30% and Series C, 3.10%.
Shares issued and outstanding during the year ended October 31, 1998
increased by 800 pursuant to a plan of reorganization and during the
year ended October 31, 1997 remained constant.
MuniYield California Fund, Inc.
October 31, 1998
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, 1998, Merrill Lynch, Pierce, Fenner & Smith Inc.
("MLPF&S"), an affiliate of FAM, earned $176,110 as commissions.
5. Acquisition of Taurus MuniCalifornia
Holdings, Inc.
On February 9, 1998, the Fund acquired all of the net assets of
Taurus MuniCalifornia Holdings, Inc. pursuant to an agreement and
plan of reorganization. The acquisition was accomplished by a tax-
free exchange of 5,189,572 Common Stock shares and 800 AMPS shares
of Taurus MuniCalifornia Holdings, Inc. for 3,896,657 Common Stock
shares and 800 AMPS shares of the Fund. Taurus MuniCalifornia
Holdings, Inc.'s net assets on that date of $82,338,657, including
$6,378,266 of unrealized appreciation and $944,239 of accumulated
net realized capital losses, were combined with those of the Fund.
The aggregate net assets of the Fund immediately after the
acquisition amounted to $472,188,749.
6. Subsequent Event:
On November 5, 1998, the Fund's Board of Directors declared an
ordinary income dividend to Common Stock shareholders in the amount
of $.081762 per share, payable on November 27, 1998 to shareholders
of record as of November 20, 1998.
<AUDIT-REPORT>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders,
MuniYield California Fund, Inc.:
We have audited the accompanying statement of assets, liabilities
and capital, including the schedule of investments, of MuniYield
California Fund, Inc. as of October 31, 1998, 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, 1998 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 California Fund, Inc. as of October 31, 1998, 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 4, 1998
</AUDIT-REPORT>
MuniYield California Fund, Inc.
October 31, 1998
IMPORTANT TAX INFORMATION (unaudited)
All of the net investment income distributions paid by MuniYield
California Fund, Inc. during its taxable year ended October 31, 1998
qualify as tax-exempt interest dividends for Federal Income tax
purposes. Additionally, the following table summarizes the taxable
distributions paid by the Fund during the year:
<TABLE>
<CAPTION>
Payable Ordinary Long-Term
Date Income Capital Gains
<S> <S> <C> <C> <C>
Common Stock Shareholders 12/30/97 $ .016847 $ .065392*
Preferred Stock Shareholders: Series A 12/11/97 $15.39 $ 59.72*
10/15/98 -- $112.80**
Series B 11/28/97 $ 6.55 $ 23.53*
12/04/97 $ 4.40 $ 16.74*
12/11/97 $ 4.02 $ 17.85**
10/08/98 -- $ 27.91**
10/15/98 -- $ 26.55**
10/22/98 -- $ 24.67**
10/29/98 -- $ 21.04**
Series C 10/08/98 -- $ 87.39**
<FN>
*Of this distribution, 98.82% is subject to the 28% tax rate and
1.18% is subject to the 20% tax rate.
**The entire distribution is subject to the 20% tax rate.
Please retain this information for your records.
</TABLE>
MuniYield California Fund, Inc.
October 31, 1998
QUALITY PROFILE
The quality ratings of securities in the Fund as of October 31, 1998
were as follows:
Percent of
S&P Rating/Moody's Rating Net Assets
AAA/Aaa 71.5%
AA/Aa 19.4
A/A 3.7
BBB/Baa 2.2
NR (Not Rated) 0.2
Other++ 3.5
[FN]
++Temporary investments in short-term municipal securities.
MANAGED DIVIDEND POLICY
The Fund's dividend policy is to distribute substantially all of its
net investment income to its shareholders on a monthly basis.
However, in order to provide shareholders with a more consistent
yield to the current trading price of shares of Common Stock of the
Fund, the Fund may at times pay out less than the entire amount of
net investment income earned in any particular month and may at
times in any month pay out such accumulated but undistributed income
in addition to net investment income earned in that month. As a
result, the dividends paid by the Fund for any particular month may
be more or less than the amount of net investment income earned by
the Fund during such month. The Fund's current accumulated but
undistributed net investment income, if any, is disclosed in the
Statement of Assets, Liabilities and Capital, which comprises part
of the Financial Information included in this report.
MuniYield California Fund, Inc.
October 31, 1998
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
MYC
