MuniYield New Jersey Fund, Inc.
Annual
Report
November 30, 1993
This report, including the financial information herein, is
transmitted to the shareholders of MuniYield New Jersey 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 re-
presentation of future performance. The Fund has leveraged its
Common Stock by issuing Preferred Stock to provide 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.
MuniYield New Jersey Fund, Inc.
Box 9011
Princeton, NJ
08543-9011
MuniYield New Jersey Fund, Inc.
TO OUR SHAREHOLDERS
For the year ended November 30, 1993, the Common Stock of MuniYield
New Jersey Fund, Inc. earned $0.972 per share income dividends,
representing a net annualized yield of 6.12%, based on a month-end
net asset value of $15.88 per share. Over the same period, total
investment return on the Fund's Common Stock was +17.35%, based on
a change in per share net asset value from $14.40 to $15.88, and
assuming reinvestment of $0.969 per share income dividends.
For the six-month period ended November 30, 1993, total invest-
ment return on the Fund's Common Stock was +5.93%, based on a
change in per share net asset value from $15.45 to $15.88, and
assuming reinvestment of $0.485 per share income dividends.
For the six months ended November 30, 1993, the average yield
on the Fund's Auction Market Preferred Stock was 2.96%.
<PAGE>
The Environment
The US economy began to show some signs of improvement during the
six-month period ended November 30, 1993, with little evidence of
an appreciable increase in the rate of inflation. The industrial
sector is demonstrating growing strength, yet capacity utilization
is still well below the levels associated with rising inflation.
Consumer spending has improved, but the labor market remains soft.
Despite the areas of economic weakness that persist, concerns arose
during the quarter that the rate of business activity might increase
inflationary pressures.
Other developments during the November period had significant
long-term implications for the US financial markets. Although
Boris Yeltsin's swift and apparently decisive victory over his
hard-line opponents in Russia created little immediate disruption
in the world financial markets, the future of political and
economic reform in the former Soviet Union is far from certain.
Evidence of greater progress toward a free-market economy and
democratic government in Russia would have more positive
implications for the US financial markets over the longer term.
The outline for proposed healthcare reform is also very important
for the US economy. As the various healthcare reform proposals
are debated, investors will focus on their potential effects on
the Federal budget, the US economy and the quality of healthcare
delivery in the United States. Finally, the ratification of the
North American Free Trade Agreement by the US Congress was
important not only for the prospect of expanding trade with
Canada and Mexico, but also as a positive influence on the recent-
ly concluded round of negotiations on the General Agreement on
Tariffs and Trade. Further economic integration and growth through
trade liberalization would be positive for the capital markets in
the United States and around the world.
The Municipal Market
The municipal bond market exhibited considerable volatility
during the quarter ended November 30, 1993. From September through
mid-October, municipal bond yields continued their earlier decline.
By mid-October, yields on tax-exempt revenue bonds maturing in 30
years, as reflected by the Bond Buyer Revenue Bond Index, had
declined an additional 15 basis points (0.15%) to another record
low of 5.41%. However, the municipal bond market then reacted
sympathetically to a nervous US Treasury bond market during the
remainder of the quarter, and tax-exempt bond yields rose to end
the quarter at 5.47%. Despite the increase in bond yields late in
the quarter, it is important to note that tax-exempt bond yields
have declined approximately 70 basis points since the beginning of
1993.
<PAGE>
The pace of new municipal bond issuance slowed during the November
quarter. More than $62 billion in tax-exempt securities were issued
over the last three months, an increase of more than 5% versus the
November 1992 quarter's issuance. In recent quarters, however, new
bond issuance had been increasing at a rate of approximately 25%.
Even this relative decline in supply was unable to provide any
technical support for the municipal bond market as investors became
extremely concerned that economic growth would dramatically
accelerate during the last calendar quarter of 1993 and continue
into early 1994. This projected growth and expected associated
inflationary pressures combined to cause yields to rise significant-
ly in late October and November.
A number of additional factors have been involved in the recent
increase in tax-exempt bond yields. Individual investors have
demonstrated only limited interest in the municipal bond market over
the last month. This probably has been related to a combination of
seasonal factors and the desire to avoid the tax liability resulting
from the large capital gains expected to be declared by most bond
funds this year. Also, many larger institutional investors have been
reluctant participants in the markets in order not to jeopardize their
already strong year-to-date performances. Consequently, recent in-
terest rate volatility has been intensified by this decline in
demand.
By early 1994, however, it is likely that demand will increase
significantly. The proceeds from bond maturities, bond calls and
coupon payments beginning in January will all need to be reinvested.
The new higher marginal Federal tax rates will also go into effect
in January. Given the ongoing attractive after-tax benefits municipal
bonds provide, it is likely that both individual and institutional
investors will return to the tax-exempt bond market. This increased
demand should serve to stabilize the market in early 1994.
Portfolio Strategy
The New Jersey sector of the tax-exempt arena experienced a similar,
though more muted, period of volatility as that experienced by the
municipal market in general during the quarter ended November 30,
1993. This relative outperformance is largely attributable to the
extremely favorable technical dynamic which has supported the market
for New Jersey tax-exempt issues throughout the last year. While
national issuance of tax-exempt debt increased by more than 22%
when compared with 1992's issuance, New Jersey tax-exempt issuance
experienced a striking decrease of 9.2%. When combined with the re-
cord levels of demand exhibited by individuals via direct purchase
and mutual fund participation, this trend has made New Jersey municipal
bonds among the market's best-performing securities.
As such, when prices moved higher during the early portion of the
three-month period ended November 30, 1993, New Jersey issues were
propelled to the forefront of the market. Conversely, the rise in
yields experienced during the later portion of the quarter proved
to be much more muted within the New Jersey sector.
<PAGE>
To capitalize on the opportunities inherent in such an environ-
ment, the portfolio maintained a constructive posture through-
out the November quarter. We maintained assets in those issues
offering attractive levels of tax-exempt income, good qualities
of protection from redemption prior to maturity and strong
characteristics for potential price appreciation should the
secular trend toward lower interest rates continue in the weeks
and months ahead. We placed additional emphasis on an ongoing
review of the creditworthiness of individual issuers within the
universe of New Jersey tax-exempt debt in order to maintain the
integrity of our holdings.
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. Should the interest rate differential
between short-term and long-term interest rates narrow because of
a rise in short-term interest rates, the incremental yield "pick
up" on the Common Stock will be reduced. Furthermore, if long-
term interest rates rise, the Common Stock net asset value will
reflect the full decline in the entire portfolio holdings, since
the value of the Fund's Preferred Stock does not fluctuate. For a
complete explanation, see page 3 of this report to shareholders.
We appreciate your ongoing interest in MuniYield New Jersey Fund,
Inc., and we look forward to serving your investment needs and
objectives in the months and years to come.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Vincent R. Giordano)
Vincent R. Giordano
Vice President and Portfolio Manager
December 29, 1993
<PAGE>
THE BENEFITS AND RISKS OF LEVERAGING
MuniYield New Jersey 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.
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 share-
holders 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. 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 New Jersey 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
EDA Economic Development Authority
M/F Multi-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)
New Jersey--96.1%
<S> <S> <C> <S> <C>
Atlantic County, New Jersey, Utilities Authority Solid Waste Revenue Bonds:
NR Baa $ 1,375 7% due 3/01/2008 $ 1,470
NR Baa 2,400 7.125% due 3/01/2016 2,579
NR A1 3,545 Camden County, New Jersey, Improvement Authority, Lease Revenue Bonds (Property &
Equipment Program), 6% due 12/01/2012 3,720
AAA Aaa 3,145 Delaware River Joint Toll Bridge Commission, Revenue Refunding Bonds (Pennsylvania
Bridge), 6.25% due 7/01/2012 (c) 3,344
NR A1 1,120 Essex County, New Jersey, Improvement Authority, Parking Facility Revenue Bonds,
6.20% due 7/01/2022 1,174
AAA Aaa 1,500 Hamilton Township, Atlantic County, New Jersey, Municipal Utilities Authority Revenue
Bonds, 6% due 8/15/2017 (c) 1,592
AAA Aaa 5,380 Hudson County, New Jersey, COP, Refunding (Correctional Facilities), 6.60% due
12/01/2021 (b) 5,921
A1+ NR 800 Hudson County, New Jersey, Improvement Authority Revenue Bonds (Various Solid Waste
Resource Recovery Projects), VRDN, Series A, 2.45% due 12/01/2019 (a) 800
Mercer County, New Jersey, Improvement Authority Revenue Bonds:
NR Aa1 5,000 (County Courthouse Project), 6.60% due 11/01/2014 5,433
AAA Aaa 7,185 Refunding (Solid Waste Project), Series A, AMT, 6.70% due 4/01/2013 (c) 7,953
NR Baa1 1,550 Refunding (Solid Waste Project), Series B, AMT, 6.80% due 4/01/2005 1,682
AAA Aaa 3,000 New Brunswick, New Jersey, Housing and Urban Development Authority, Lease Revenue
Bonds, 6% due 7/01/2012 (b) 3,191
NR VMG1 100 New Jersey EDA, Dock Facility, Revenue Refunding Bonds (Bayonne Improvement
Project), Series A, VRDN, 1.95% due 12/01/2027 (a) 100
AAA Aaa 1,545 New Jersey EDA, Revenue Bonds (St. Barnabas Realty Project), 5.25% due 7/01/2013 (b) 1,512
AA- Aa 6,000 New Jersey EDA, Revenue Bonds (Trenton Office Complex), 6% due 6/15/2012 6,231
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<CAPTION>
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
New Jersey (continued)
<S> <S> <C> <S> <C>
NR Aa1 $10,750 New Jersey EDA, Solid Waste Disposal Facilities Revenue Bonds (Garden State Paper
Company), AMT, 7.125% due 4/01/2022 $ 12,049
New Jersey Health Care Facilities Financing Authority Revenue Bonds:
A- NR 1,000 (Pascack Valley Hospital Association), 6.90% due 7/01/2021 1,093
A- A 6,060 Refunding (Atlantic City Medical Center), Series C, 6.80% due 7/01/2011 6,660
AAA Aaa 2,000 Refunding (Hackensack Medical Center), 6.625% due 7/01/2011 (c) 2,198
BBB- Baa 3,875 (Saint Elizabeth Hospital), Series B, 8.25% due 7/01/2020 4,405
New Jersey Sports and Exposition Authority, State Contract Revenue Bonds:
A+ Aa 5,965 Series A, 6.50% due 3/01/2019 6,503
A-1 VMG1 800 Series C, VRDN, 2.15% due 9/01/2024 (a)(b) 800
New Jersey State Educational Facilities Authority Revenue Bonds:
A- NR 8,255 Higher Education (Drew University), Series E, 6.25% due 7/01/2017 8,815
AA+ Aa1 5,435 Higher Education (Princeton University), Series C, 6.375% due 7/01/2022 5,844
A- Baa 3,355 Higher Education (Saint Peter's College), Series B, 6.80% due 7/01/2008 3,729
A- Baa 3,600 Higher Education (Saint Peter's College), Series B, 6.85% due 7/01/2012 4,005
AAA Aaa 3,740 Refunding (Rider College), Series D, 6.20% due 7/01/2017 (e) 4,029
A- Baa1 6,030 (Stevens Institute of Technology), Series A, 6.80% due 7/01/2008 6,702
New Jersey State Highway Authority, General Revenue Senior Parkway Bonds (Garden
State Parkway):
AA- A1 7,000 6.25% due 1/01/2014 7,452
AA- A1 2,390 6% due 1/01/2016 2,473
AAA Aaa 8,000 New Jersey State Housing & Mortgage Finance Agency, Home Buyer Revenue Bonds, AMT,
6.30% due 4/01/2025 (b) 8,408
AAA NR 2,520 New Jersey State Housing & Mortgage Finance Agency, M/F Housing Revenue Refunding
Bonds (Presidential Plaza), 7% due 5/01/2030 (d) 2,769
New Jersey State Turnpike Authority, Turnpike Revenue Refunding Bonds:
A A 7,000 Series A, 6.75% due 1/01/2008 7,795
A A 5,000 Series C, 5.75% due 1/01/2011 5,093
AAA Aaa 3,485 New Jersey Wastewater Treatment Trust, Loan Revenue Bonds, 4.80% due 3/01/2012 (e) 3,306
New Jersey Wastewater Treatment Trust, Loan Revenue Bonds, Series A:
AA Aa 2,375 6% due 7/01/2010 2,528
AA Aa 2,485 6% due 7/01/2011 2,637
North Brunswick Township, New Jersey, Revenue Bonds, UT:
NR Aa 2,405 6.50% due 5/15/2012 2,665
NR Aa 2,710 6.50% due 5/15/2013 3,013
AAA Aaa 2,010 North Jersey District Water Supply, New Jersey, Community Revenue Refunding Bonds
(Wanaque North Project), Series B, 6.50% due 11/15/2011 (b) 2,209
AA- Aa 5,000 Ocean County, New Jersey, Utilities Authority, Wastewater Revenue Refunding Bonds,
Series A, 5.75% due 1/01/2018 5,034
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in Thousands)
<CAPTION>
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
New Jersey (concluded)
<S> <S> <C> <S> <C>
AAA Aaa $ 7,740 Passaic Valley, New Jersey, Water Commission, Water Supply Revenue Bonds, Series A,
6.40% due 12/15/2022 (c) $ 8,494
Port Authority of New York and New Jersey, Consolidated Revenue Bonds:
AA- A1 2,465 67th Series, 6.90% due 7/01/2011 2,762
AA- A1 1,000 69th Series, 7.125% due 6/01/2025 1,139
AA- A1 1,000 91st Series, 5.20% due 11/15/2015 971
Rutgers State University, New Jersey, Revenue Refunding Bonds (State University of
New Jersey):
AA A1 2,275 Series A, 6.50% due 5/01/2018 2,470
AA A1 3,150 Series R, 5.75% due 5/01/2018 3,211
A+ NR 1,000 South Jersey Port Corporation, New Jersey, Revenue Refunding Bonds (Marine Terminal),
Series G, 5.60% due 1/01/2023 975
AA A 3,100 University Medicine and Dentistry, New Jersey, Revenue Bonds, Series E, 6.50% due
12/01/2018 3,370
Puerto Rico--2.8%
A- Baa1 5,000 Puerto Rico Electric Power Authority, Power Revenue Bonds, Series P, 7% due 7/01/2021 5,656
Total Investments (Cost--$182,633)--98.9% 197,964
Other Assets Less Liabilities--1.1% 2,250
--------
Net Assets--100.0% $200,214
<FN> ========
(a) The interest rate is subject to change periodically based upon the prevailing market rate. The interest rate shown is the rate
in effect at November 30, 1993.
(b) MBIA Insured.
(c) FGIC Insured.
(d) FHA Insured.
(e) AMBAC Insured.
Ratings of issues shown have not been audited by Deloitte & Touche.
See Notes to Financial Statments.
</TABLE>
<PAGE>
<TABLE>
FINANCIAL INFORMATION
<CAPTION>
Statement of Assets, Liabilities and Capital as of November 30, 1993
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$182,632,619)(Note 1a) $197,964,435
Interest receivable 3,878,010
Deferred organization expenses (Note 1e) 21,704
Prepaid expenses and other assets 48,722
------------
Total assets 201,912,871
------------
Liabilities: Payables:
Distribution to shareholders (Note 1g) $ 551,240
Investment adviser (Note 2) 87,839 639,079
------------
Accrued expenses and other liabilities 1,059,921
------------
Total liabilities 1,699,000
------------
Net Assets: Net assets $200,213,871
============
Capital: Capital Stock (200,000,000 shares authorized) (Note 4):
Preferred Stock, par value $.10 per share (1,200 shares of AMPS*
issued and outstanding at $50,000 per share liquidation preference) $ 60,000,000
Common Stock, par value $.10 per share (8,829,651 shares issued and
outstanding) $ 882,965
Paid-in capital in excess of par 123,126,788
Undistributed investment income--net 718,756
Undistributed realized capital gains--net 153,546
Unrealized appreciation on investments--net 15,331,816
------------
Total--Equivalent to $15.88 net asset value per share of Common Stock
(market price--$15.625) 140,213,871
------------
Total capital $200,213,871
<FN> ============
* Auction Market Preferred Stock.
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
FINANCIAL INFORMATION (continued)
<CAPTION>
Statement of Operations
For the Year
Ended November 30, 1993
<S> <S> <C> <C>
Investment Income Interest and amortization of premium and discount earned $ 11,616,160
(Note 1d):
Expenses: Investment advisory fees (Note 2) $ 977,866
Commission fees 108,755
Professional fees 73,781
Accounting services (Note 2) 40,450
Transfer agent fees 37,233
Printing and shareholder reports 24,498
Directors' fees and expenses 18,677
Listing fees 16,349
Custodian fees 13,020
Amortization of organization expenses (Note 1e) 6,337
Pricing fees 2,961
Other 21,139
------------
Total expenses 1,341,066
------------
Investment income--net 10,275,094
------------
Realized & Realized gain on investments--net 153,572
Unrealized Gain on Change in unrealized appreciation on investments--net 12,791,096
Investments--Net ------------
(Notes 1d & 3): Net Increase in Net Assets Resulting from Operations $ 23,219,762
============
<FN>
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
FINANCIAL INFORMATION (continued)
<CAPTION>
Statements of Changes in Net Assets
For the
Period
For the May 1,
Year Ended 1992++ to
November 30, November 30,
Increase (Decrease) in Net Assets: 1993 1992
<S> <S> <C> <C>
Operations: Investment income--net $ 10,275,094 $ 5,230,276
Realized gain on investments--net 153,572 100,214
Change in unrealized appreciation on investments--net 12,791,096 2,540,720
------------ ------------
Net increase in net assets resulting from operations 23,219,762 7,871,210
------------ ------------
Dividends & Investment income--net:
Distributions to Common Stock (8,382,854) (3,730,088)
Shareholders Preferred Stock (1,856,268) (817,404)
(Note 1g): Realized gain on investments--net:
Common Stock (82,212) --
Preferred Stock (18,028) --
------------ ------------
Net decrease in net assets resulting from dividends and distributions
to shareholders (10,339,362) (4,547,492)
------------ ------------
Capital Stock Net proceeds from issuance of Common Stock -- 117,756,607
Transactions Proceeds from issuance of Preferred Stock -- 60,000,000
(Notes 1e & 4): Value of shares issued to Common Stock shareholders in reinvestment
of dividends 3,490,914 2,662,227
------------ ------------
Net increase in net assets derived from capital stock transactions 3,490,914 180,418,834
------------ ------------
Net Assets: Total increase in net assets 16,371,314 183,742,552
Beginning of period 183,842,557 100,005
------------ ------------
End of period* $200,213,871 $183,842,557
============ ============
<FN>
* Undistributed investment income--net $ 718,756 $ 682,784
============ ============
++Commencement of Operations.
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
FINANCIAL INFORMATION (concluded)
Financial Highlights
<CAPTION>
For the
Period
The following per share data and ratios have been derived For the May 1,
from information provided in the financial statements. Year Ended 1992++ to
November 30, November 30,
Increase (Decrease) in Net Asset Value: 1993 1992
<S> <S> <C> <C>
Per Share Net asset value, beginning of period $ 14.40 $ 14.18
Operating ------------ ------------
Performance: Investment income--net 1.17 .62
Realized and unrealized gain on investments--net 1.49 .31
------------ ------------
Total from investment operations 2.66 .93
------------ ------------
Less dividends and distributions to Common Stock shareholders:
Investment income--net (.96) (.44)
Realized gain on investments--net (.01) --
------------ ------------
Total dividends and distributions to Common Stock shareholders (.97) (.44)
------------ ------------
Capital charge resulting from issuance of Common Stock -- (.03)
------------ ------------
Effect of Preferred Stock activity:++++
Dividends to Preferred Stock shareholders:
Investment income--net (.21) (.10)
Capital charge resulting from issuance of Preferred Stock -- (.14)
------------ ------------
Total effect of Preferred Stock activity (.21) (.24)
------------ ------------
Net asset value, end of period $ 15.88 $ 14.40
============ ============
Market price per share, end of period $ 15.625 $ 14.875
============ ============
Total Investment Based on market price per share 11.78% 2.19%+++
Return:** ============ ============
Based on net asset value per share 17.35% 4.65%+++
============ ============
Ratios to Average Expenses, net of reimbursement .69% .43%*
Net Assets:*** ============ ============
Expenses .69% .69%*
============ ============
Investment income--net 5.26% 5.51%*
============ ============
Supplemental Net assets, net of Preferred Stock, end of period (in thousands) $ 140,214 $ 123,833
Data: ============ ============
Preferred Stock outstanding, end of period (in thousands) $ 60,000 $ 60,000
============ ============
Portfolio turnover 5.14% 27.13%
============ ============
Dividends Per Investment income--net $ 1,547 $ 681
Share on Preferred
Stock Outstanding:
<PAGE> <FN>
* Annualized.
** Total investment returns based on market value, which can be significantly greater
or lesser than the net asset value, 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 July 1, 1992.
+++ Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
MuniYield New Jersey 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 MYJ. 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 market and are valued at the
most recent bid price or yield equivalent as obtained by the
Fund's pricing service from dealers that make markets in such
securities. Financial futures contracts, 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) 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 con-
tracts 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.
<PAGE>
(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. Original issue 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 and offering expenses--
Deferred organization expenses are amortized on a straight-line
basis over a five-year period beginning with the commencement of
operations of the Fund. Direct expenses relating to the public
offering of the Common and Preferred Stock were charged to
capital at the time of issuance of the stocks.
(f) Non-income producing investments--Written and purchased
options are non-income producing investments.
(g) 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, Inc. ("FAMI"), a wholly-owned subsidiary
of Merrill Lynch Investment Management, Inc. ("MLIM"), an in-
direct wholly-owned subsidiary of Merrill Lynch & Co., Inc.
NOTES TO FINANCIAL STATEMENTS (concluded)
FAMI 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 FAMI at cost.
Certain officers and/or directors of the Fund are officers and/or
directors of FAMI, MLIM, Merrill Lynch, Pierce, Fenner & Smith
Incorporated ("MLPF&S") and/or Merrill Lynch & Co., Inc.
<PAGE>
3. Investments:
Purchases and sales of investments, excluding short-term
securities, for the year ended November 30, 1993 were
$14,356,286 and $9,746,623, respectively.
Net realized and unrealized gains as of November 30, 1993 were
as follows:
Realized Unrealized
Gains Gains
Long-term investments $ 153,228 $15,331,816
Short-term investments 344 --
----------- -----------
Total $ 153,572 $15,331,816
=========== ===========
As of November 30, 1993, net unrealized appreciation for Federal
income tax purposes aggregated $15,331,816, of which $15,360,533
related to appreciated securities and $28,717 related to depreciated
securities. The aggregate cost of investments at November 30, 1993
for Federal income tax purposes was $182,632,619.
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 year ended November 30, 1993, shares outstanding increased
by 230,022 to 8,829,651 as a result of dividend reinvestment. At
November 30, 1993, total paid-in capital amounted to $124,009,753.
Preferred Stock
Auction Market Preferred Stock ("AMPS") are shares of Preferred
Stock of the Fund that entitle their holders to receive cash
dividends at an annual rate that may vary for the successive
dividend periods. The yield in effect at November 30, 1993 was
2.96%.
In connection with the offering of AMPS, the Board of Directors
reclassified 1,200 shares of unissued capital stock as AMPS. For
the year ended November 30, 1993, there were 1,200 AMPS shares
authorized, issued and outstanding with a liquidation preference
of $50,000 per share, plus accumulated and unpaid dividends of
$10,777.
The Fund pays commissions to certain broker-dealers at the end of
each auction at the annual rate of one-quarter of 1% calculated
on the proceeds of each auction. For the year ended November 30,
1993, MLPF&S, an affiliate of FAMI, earned $81,918 as commissions.
<PAGE>
5. Subsequent Event:
On December 10, 1993, the Fund's Board of Directors declared an
ordinary income dividend to Common Stock shareholders in the amount
of $.077696 per share, payable on December 30, 1993 to shareholders
of record as of December 20, 1993.
<AUDIT-REPORT>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders, MuniYield New Jersey
Fund, Inc.:
We have audited the accompanying statement of assets, liabilities
and capital, including the schedule of investments, of MuniYield
New Jersey Fund, Inc. as of November 30, 1993, the related statements
of operations for the year then ended and changes in net assets and
the financial highlights for the year then ended and the period
May 1, 1992 (commencement of operations) to November 30, 1992. These
financial statements and the financial highlights are the re-
sponsibility 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 November 30, 1993 by correspondence with the
custodian. An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, such financial statements and financial highlights
present fairly, in all material respects, the financial position of
MuniYield New Jersey Fund, Inc. as of November 30, 1993, 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
Princeton, New Jersey
December 31, 1993
</AUDIT-REPORT>
<PAGE>
IMPORTANT TAX INFORMATION (unaudited)
All of the net investment income distributions paid monthly by
MuniYield New Jersey Fund, Inc. during its taxable year ended
November 30, 1993 qualify as tax-exempt interest dividends for
Federal income tax purposes.
Additionally, the following summarizes the per-share capital gain
distributions declared by the Fund during the year:
<TABLE>
<CAPTION>
Record Payable Short-Term Long-Term
Date Date Capital Gains Capital Gains
<S> <C> <C> <C> <C>
Common Stock Shareholders 12/18/92 12/30/92 $ 0.009560 --
Preferred Stock Shareholders: Series A 12/31/92 01/04/93 $15.02 --
Please retain this information for your records.
</TABLE>
<TABLE>
PER SHARE INFORMATION
<CAPTION>
Per Share Selected Quarterly Financial Data* (unaudited)
Net Realized Unrealized Dividends/Distributions
Investment Gains Gains Net Investment Income Capital
For the Period Income (Losses) (Losses) Common Preferred Gains
<S> <C> <C> <C> <C> <C> <C>
May 1, 1992++ to May 31, 1992 $.05 -- $ .10 -- -- --
June 1, 1992 to August 31, 1992 .27 $.01 .36 $.20 $.04 --
September 1, 1992 to November 30, 1992 .30 -- (.16) .24 .06 --
December 1, 1992 to February 28, 1993 .28 (.01) 1.07 .24 .05 $.01
March 1, 1993 to May 31, 1993 .29 -- .01 .23 .06 --
June 1, 1993 to August 31, 1993 .31 .01 .66 .24 .05 --
September 1, 1993 to November 30, 1993 .29 .02 (.27) .25 .05 --
<CAPTION>
Net Asset Value Market Price**
For the Period High Low High Low Volume***
<S> <C> <C> <C> <C> <C>
May 1, 1992++ to May 31, 1992 $14.29 $14.14 $15.25 $15.00 86
June 1, 1992 to August 31, 1992 15.12 14.27 15.625 15.00 727
September 1, 1992 to November 30, 1992 14.81 13.70 15.625 14.00 352
December 1, 1992 to February 28, 1993 15.44 14.39 15.75 14.875 446
March 1, 1993 to May 31, 1993 15.65 15.01 15.875 15.00 487
June 1, 1993 to August 31, 1993 16.13 15.50 16.25 15.125 634
September 1, 1993 to November 30, 1993 16.56 15.71 16.375 15.00 714
<FN>
++Commencement of Operations.
*Calculations are based upon Common Stock outstanding at the
end of each period.
**As reported in the consolidated transaction reporting system.
***In thousands.
</TABLE>
<PAGE>
OFFICERS AND DIRECTORS
Arthur Zeikel, President and Director
Kenneth S. Axelson, Director
Herbert I. London, 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 New York
110 Washington Street
New York, New York 10286
Transfer Agents
Common Stock:
The Bank of New York
101 Barclay Street
New York, New York 10286
Preferred Stock:
IBJ Schroder Bank & Trust Company
One State Street
New York, New York 10004
NYSE Symbol
MYJ
