MuniYield New Jersey Fund, Inc.
Semi-Annual
Report
May 31, 1994
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 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.
MuniYield New Jersey Fund, Inc.
Box 9011
Princeton, NJ
08543-9011
<PAGE>
MuniYield New Jersey Fund, Inc.
TO OUR SHAREHOLDERS
For the six-month period ended May 31, 1994, MuniYield New Jersey
Fund, Inc. earned $0.469 per share income dividends, which includes
earned and unpaid dividends of $0.080. This represents a net
annualized yield of 6.39%, based on a per share net asset value of
$14.72 as of May 31, 1994. Over the same period, the Fund's total
investment return was -4.23%, based on a change in per share net
asset value from $15.88 to $14.72, and assuming reinvestment of
$0.482 per share income dividends.
For the six months ended May 31, 1994, the average yield on the
Fund's Auction Market Preferred Stock was 2.98%.
The Environment
Inflationary concerns persisted during the three-month period ended
May 31, 1994. The Federal Reserve Board followed up its initial
increase in the Federal Funds rate with three subsequent monetary policy
tightening moves. At the same time, investors viewed signs of economic
strength as an indication that the rate of inflation would soon accelerate.
Among the most troublesome statistics released was the mid-May rise in the
Commodity Research Bureau's inflation index. However, by quarter-end this
index had declined back to the levels at which it began the year.
Despite an upward revision in gross domestic product growth to 3.0% for
the first quarter of the year, later economic data releases suggest a
moderating trend. Disposable income fell 0.5% in April, consumer spending
dropped 0.4% after adjusting for inflation, and sales of new homes also
fell. Consumer confidence declined for the first time in three months,
reflected in sluggish retail sales. However, employment data for May sent
somewhat conflicting signals. The unemployment rate dropped sharply in May
from 6.4% to 6.0%, but at the same time business payrolls grew only modestly.
In the weeks ahead, investors are likely to continue to focus their
attention on the direction of the economy and inflationary trends.
Evidence of stable and moderate economic growth, combined with subdued
inflationary pressures, would be a positive development for the financial
markets. The absence of these trends, along with continued monetary policy
tightening by the central bank, would likely lead to continued volatility
in stock and bond prices over the near term.
<PAGE>
The Municipal Market
During the six months ended May 31, 1994, tax-exempt bond yields
exhibited considerable volatility as they rose to their highest
level in two years. As measured by the Bond Buyer Revenue Bond
Index, the yield on a newly issued municipal bond maturing in 30
years rose during the period by approximately 70 basis points
(0.70%) to 6.41% by the end of May. Yields on seasoned municipal
revenue issues rose by over 80 basis points in sympathy with the
even more dramatic rise in US Treasury bond yields. By the end of
May, yields on US Treasury securities had risen by over 110 basis
points to 7.42%.
Long-term tax-exempt interest rates gradually declined from the
end of November 1993 into early February. However, on a weekly basis,
municipal bond yields fluctuated by as much as 15 basis points as
investors were unable to reconcile the rapid economic growth seen
in the last quarter of 1993 and into early 1994 with continued weak
inflationary pressures. Following the Federal Reserve Board's initial
interest rate increase in early February, municipal bond prices began
to erode in concert with taxable bond prices as investors began to sell
securities in anticipation of further interest rate increases. As the
Federal Reserve Board continued to raise short-term interest rates in
subsequent months, municipal bond yields rose further to a high of
6.60% in mid-May before declining somewhat at May month-end.
The magnitude of the rise in tax-exempt bond yields during the
past six months has not been seen since 1987 when municipal bond
yields rose 250 basis points from March to October of that year.
It is very important to note that the municipal bond price declines
during the past six months, while certainly damaging, were essentially
much different than the 1987 episode. Recent price declines have been
largely the result of consistent and insistent selling pressures during
the past four months. In 1987, the tax-exempt bond market was much more
volatile and, at times, chaotic as investors sought to liquidate
positions without much concern for fundamental value. The recent price
deterioration, for the most part, has been orderly, and the municipal
bond market's liquidity and integrity have not been challenged or
jeopardized.
<PAGE>
To a large extent, the municipal bond market has continued to be
supported by its strong technical position. New-issue volume during
the past six months has totaled approximately $100 billion. This
represents a decline of approximately 40% versus the comparable
period one year ago. This reduction has been even more pronounced
during the past three months when only $41 billion in long-term
securities were issued, representing over a 50% decline in issuance
from the level a year ago. This decline has been expected and
discussed in earlier shareholder reports. This reduced issuance
has minimized potential selling pressures in recent months as
institutional investors have been wary of selling appreciable
amounts of securities that they may be unable to replace later this
year at any price level. We expect this decline in new bond issuance
to continue this year and into 1995.
Despite recent price declines, tax-exempt securities remain among
the most attractive investment alternatives available. Longer-term
municipal securities, after the recent yield increases, yield
approximately 85% of comparable US Treasury issues. Purchasers of
these municipal bonds also accrue substantial after-tax yield
advantages. For example, to investors in the 39% marginal Federal
income tax bracket, the purchase of a tax-exempt product yielding
6.35% represents an after-tax equivalent of 10.40%. With prevailing
estimates of 1994 inflation at no more than 3%--4%, real after-tax
rates in excess of 6.25% easily compensate longer-term investors for
much of the price volatility recently experienced.
We continue to look for municipal bond yields to decline late
this year and into 1995 as inflationary pressures remain low and
as the domestic economy is further slowed by the impact of
higher interest rates. As this scenario unfolds, currently available
tax-exempt products should generate attractive returns for long-term
investors.
Portfolio Strategy
The New Jersey sector of the tax-exempt arena closely mirrored the
volatility experienced within the municipal market in general during
the six months ended May 31, 1994. While New Jersey municipal
bonds remained a relatively scarce commodity throughout the period,
as the outlook for fixed-income investments became more uncertain and
investors appeared to assume a more defensive posture, these securities
were repriced to reflect the rise in yields witnessed throughout the
municipal bond market. Further exacerbating this adjustment was the
fact that New Jersey municipal bonds entered the period at relatively
expensive levels because of the formidable technical dynamic which has
served as the foundation for the trading of these securities throughout
much of the past year. While national issuance during the past 12
months had experienced a decrease of 7% when compared to the same
period of the prior year, New Jersey tax-exempt issuance had contracted
by more than 32%. Consequently, as yields began their adjustment during
the period, New Jersey municipal bonds began the process from some of
the market's most aggressive levels.
<PAGE>
Portfolio decisions throughout the period were guided by a decidedly
conservative posture. While we maintained a near fully invested stance
throughout the period, the Fund's structure at the start of the
period was less aggressive than general market fundamentals may have
warranted. As the outlook for interest rates in general became more
uncertain, trading activity sought to capitalize on the opportunities
inherent in such an environment by drawing down the average maturity
of the portfolio and shifting its focus away from principal volatility
and more toward the generation of tax-exempt income. Issues used to
facilitate this objective were those deemed to possess strong qualities
of protection from redemption prior to maturity and superior qualities
of creditworthiness relative to the universe of New Jersey tax-exempt
bonds.
The yield on the Fund's Preferred Stock was locked in on January 5,
1994 for one year at a rate of 2.99%. These short-term interest
rates have continued to generate attractive yield benefits to the
Fund's Common Stock shareholders as a result of leveraging in a
steep yield curve environment. 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's 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. During the six-month period ended May 31, 1994,
long-term interest rates rose, reflected in the decline in the net
asset value of the Fund's Common Stock. For a complete explanation
of leveraging, see page 4 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
June 21, 1994
<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 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. 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--93.8%
<S> <S> <C> <S> <C>
Atlantic County, New Jersey, Utilities Authority, Solid Waste Revenue Bonds:
NR Baa $ 1,375 7% due 3/01/2008 $ 1,313
NR Baa 2,400 7.125% due 3/01/2016 2,273
NR A1 3,545 Camden County, New Jersey, Improvement Authority, Lease Revenue Bonds (Property and
Equipment Program), 6% due 12/01/2012 3,475
AAA Aaa 3,145 Delaware River Joint Toll Bridge Commission, Revenue Refunding
Bonds (Pennsylvania Bridge), 6.25% due 7/01/2012 (c) 3,189
NR A1 1,120 Essex County, New Jersey, Improvement Authority, Parking Facility Revenue Bonds,
6.20% due 7/01/2022 1,124
AAA Aaa 1,500 Hamilton Township, Atlantic County, New Jersey, Municipal Utilities Authority Revenue
Bonds, 6% due 8/15/2017 (c) 1,492
AAA Aaa 5,380 Hudson County, New Jersey, COP, Refunding (Correctional Facilities), 6.60% due
12/01/2021 (b) 5,615
Mercer County, New Jersey, Improvement Authority Revenue Bonds:
NR Aa1 5,000 (County Courthouse Project), 6.60% due 11/01/2014 5,172
AAA Aaa 7,185 Refunding (Solid Waste Project), Series A, AMT, 6.70% due 4/01/2013 (c) 7,603
NR Baa1 1,550 Refunding (Solid Waste Project), Series B, AMT, 6.80% due 4/01/2005 1,550
<PAGE>
AAA Aaa 3,000 New Brunswick, New Jersey, Housing and Urban Development Authority, Lease Revenue
Bonds, 6% due 7/01/2012 (b) 3,007
AA- Aa 3,250 New Jersey Building Authority, State Building Revenue Refunding Bonds, 5% due
6/15/2013 2,871
New Jersey EDA, Dock Facility, Revenue Refunding Bonds (Bayonne Improvement
Project), Series A, VRDN (a):
NR VMIG1 1,400 3.05% due 12/01/2027 1,400
NR VMIG1 100 3.10% due 12/01/2027 100
AA- Aa 6,000 New Jersey EDA, Revenue Bonds (Trenton Office Complex), 6% due 6/15/2012 5,954
</TABLE>
<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 $ 11,695
New Jersey Health Care Facilities Financing Authority Revenue Bonds:
A- NR 1,000 (Pascack Valley Hospital Association), 6.90% due 7/01/2021 1,034
A- A 6,060 Refunding (Atlantic City Medical Center), Series C, 6.80% due 7/01/2011 6,269
AAA Aaa 2,000 Refunding (Hackensack Medical Center), 6.625% due 7/01/2011 (c) 2,089
BBB- Baa 3,875 (Saint Elizabeth Hospital), Series B, 8.25% due 7/01/2020 4,178
New Jersey Sports and Exposition Authority, State Contract Revenue Bonds:
A+ Aa 5,965 Series A, 6.50% due 3/01/2019 6,107
A-1 VMIG 400 Series C, VRDN, 2.60% due 9/01/2024 (a)(b) 400
New Jersey State Educational Facilities Authority Revenue Bonds:
A- NR 8,255 Higher Education (Drew University), Series E, 6.25% due 7/01/2017 8,267
AA+ Aa1 5,435 Higher Education (Princeton University), Series C, 6.375% due 7/01/2022 5,554
A- Baa 3,355 Higher Education (Saint Peter's College), Series B, 6.80% due 7/01/2008 3,566
A- Baa 3,600 Higher Education (Saint Peter's College), Series B, 6.85% due 7/01/2012 3,776
A- Baa1 6,030 (Stevens Institute of Technology), Series A, 6.80% due 7/01/2008 6,409
New Jersey State Highway Authority, Senior Parkway General Revenue Bonds (Garden
State Parkway):
AAA Aaa 2,500 6.15% due 1/01/2007 (e) 2,610
AA- A1 7,000 6.25% due 1/01/2014 7,090
AA- A1 2,390 6% due 1/01/2016 2,354
<PAGE>
AAA Aaa 8,000 New Jersey State Housing and Mortgage Finance Agency, Home Buyer Revenue Bonds,
AMT, 6.30% due 4/01/2025 (b) 7,860
AAA NR 2,520 New Jersey State Housing and Mortgage Finance Agency, M/F Housing Revenue Refunding
Bonds (Presidential Plaza), 7% due 5/01/2030 (d) 2,611
New Jersey State Turnpike Authority, Turnpike Revenue Refunding Bonds:
A A 7,000 Series A, 6.75% due 1/01/2008 7,454
A A 5,000 Series C, 5.75% due 1/01/2011 4,849
New Jersey Wastewater Treatment Trust, Loan Revenue Bonds, Series A:
AA Aa 2,375 6% due 7/01/2010 2,390
AA Aa 2,485 6% due 7/01/2011 2,492
North Brunswick Township, New Jersey, Revenue Bonds, UT:
NR Aa 2,405 6.50% due 5/15/2012 2,532
NR Aa 2,710 6.50% due 5/15/2013 2,844
</TABLE>
<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 $ 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) $ 2,095
AA- Aa 5,000 Ocean County, New Jersey, Utilities Authority, Wastewater Revenue Refunding Bonds,
Series A, 5.75% due 1/01/2018 4,794
Passaic Valley, New Jersey, Water Commission, Water Supply Revenue Bonds, Series A (c):
AAA Aaa 6,230 6.40% due 12/15/2002 (f) 6,798
AAA Aaa 510 6.40% due 12/15/2022 523
Port Authority of New York and New Jersey, Consolidated Revenue Bonds:
AA- A1 2,465 67th Series, 6.90% due 7/01/2011 2,617
AA- A1 1,000 69th Series, 7.125% due 6/01/2025 1,076
A1+ VMIG1 200 Port Authority of New York and New Jersey, Special Obligation Revenue Bonds (Versatile
Structure Obligation), Series l, VRDN, 3% due 8/01/2028 (a) 200
<PAGE>
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 2,349
AA A1 3,150 Series R, 5.75% due 5/01/2018 3,039
A+ NR 1,000 South Jersey Port Corporation, New Jersey, Revenue Refunding Bonds (Marine Terminal),
Series G, 5.60% due l/01/2023 905
AA A 3,100 University of Medicine and Dentistry, New Jersey, Revenue Bonds, Series E, 6.50% due
12/01/2018 3,183
<CAPTION>
Puerto Rico--2.8%
<S> <S> <C> <S> <C>
A- Baa1 5,000 Puerto Rico Electric Power Authority, Power Revenue Bonds, Series P, 7% due 7/01/2021 5,274
Total Investments (Cost--$178,183)--96.6% 183,421
Other Assets Less Liabilities--3.4% 6,522
--------
Net Assets--100.0% $189,943
========
<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 May 31, 1994.
(b) MBIA Insured.
(c) FGIC Insured.
(d) FHA Insured.
(e) AMBAC Insured.
(f) Prerefunded.
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
FINANCIAL INFORMATION
<CAPTION>
Statement of Assets, Liabilities and Capital as of May 31, 1994
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$178,182,773) (Note 1a) $183,421,194
Cash 10,706
Receivables:
Interest $ 3,859,501
Securities sold 3,071,052 6,930,553
------------
Deferred organization expenses (Note 1e) 21,704
Prepaid expenses 48,722
------------
Total assets 190,432,879
------------
Liabilities: Payables:
Distribution to shareholders (Note 1g) 407,458
Investment adviser (Note 2) 82,629 490,087
------------ ------------
Total liabilities 490,087
------------
Net Assets: Net assets $189,942,792
============
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 123,196,294
Undistributed investment income--net 898,932
Accumulated realized capital losses--net (273,820)
Unrealized appreciation on investments--net 5,238,421
------------
Total capital--Equivalent to $14.72 net asset value per share of Common
Stock (market price $13.125) 129,942,792
------------
Total capital $189,942,792
============
<FN>
*Auction Market Preferred Stock.
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
FINANCIAL INFORMATION (continued)
<CAPTION>
Statement of Operations
For the Six Months Ended
May 31, 1994
<S> <S> <C> <C>
Investment Income Interest and amortization of premium and discount $ 5,885,134
(Note 1d):
Expenses: Investment advisory fees (Note 2) $ 489,808
Commission fees 101,256
Professional fees 34,540
Transfer agent fees 19,711
Printing and shareholder reports 12,003
Directors' fees and expenses 10,224
Accounting services (Note 2) 9,397
Listing fees 7,184
Custodian fees 6,347
Amortization of organization expenses (Note 1e) 2,813
Pricing fees 2,296
Other 4,784
------------
Total expenses 700,363
------------
Investment income--net 5,184,771
------------
Realized & Realized loss on investments--net (273,810)
Unrealized Loss on Change in unrealized appreciation/depreciation on investments--net (10,093,395)
Investments--Net ------------
(Notes 1d & 3): Net Decrease in Net Assets Resulting from Operations $ (5,182,434)
============
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
FINANCIAL INFORMATION (continued)
<CAPTION>
Statements of Changes in Net Assets
For the Six For the Year
Months Ended Ended
Increase (Decrease) in Net Assets: May 31, 1994 Nov. 30, 1993
<S> <S> <C> <C>
Operations: Investment income--net $ 5,184,771 $ 10,275,094
Realized gain (loss) on investments--net (273,810) 153,572
Change in unrealized appreciation/depreciation on investments--net (10,093,395) 12,791,096
------------ ------------
Net increase (decrease) in net assets resulting from operations (5,182,434) 23,219,762
------------ ------------
Dividends to Investment income--net:
Shareholders Common Stock (4,126,387) (8,382,854)
(Note 1g): Preferred Stock (878,208) (1,856,268)
Realized gain on investments--net:
Common Stock (127,659) (82,212)
Preferred Stock (25,896) (18,028)
------------ ------------
Net decrease in net assets resulting from dividends and distributions
to shareholders (5,158,150) (10,339,362)
------------ ------------
Capital Stock Offering and underwriting costs resulting from issuance of Common Stock 48,307 --
Transactions Offering and underwriting costs resulting from issuance of Preferred Stock 21,198 --
(Notes 1e & 4): Value of shares issued to Common Stock shareholders in reinvestment
of dividends -- 3,490,914
------------ ------------
Net increase in net assets derived from capital stock transactions 69,505 3,490,914
------------ ------------
Net Assets: Total increase (decrease) in net assets (10,271,079) 16,371,314
Beginning of period 200,213,871 183,842,557
------------ ------------
End of period* $189,942,792 $200,213,871
============ ============
<FN>
*Undistributed investment income--net $ 898,932 $ 718,756
============ ============
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
FINANCIAL INFORMATION (concluded)
<CAPTION>
Financial Highlights
For the
For the Six Period
The following per share data and ratios have been derived Months For the May 1,
from information provided in the financial statements. Ended Year Ended 1992++ to
May 31, November 30, November 30,
Increase (Decrease) in Net Asset Value: 1994 1993 1992
<S> <S> <C> <C> <C>
Per Share Net asset value, beginning of period $ 15.88 $ 14.40 $ 14.18
Operating ---------- ---------- ----------
Performance: Investment income--net .59 1.17 .62
Realized and unrealized gain (loss) on investments--net (1.17) 1.49 .31
---------- ---------- ----------
Total from investment operations (.58) 2.66 .93
---------- ---------- ----------
Less dividends:
Investment income--net (.47) (.96) (.44)
Realized gain on investments--net (.01) (.01) --
---------- ---------- ----------
Total dividends and distributions to Common Stock
shareholders (.48) (.97) (.44)
---------- ---------- ----------
Capital charge resulting from issuance of Common Stock -- -- (.03)
---------- ---------- ----------
Effect of Preferred Stock activity:++++
Dividends and distributions to Preferred Stock
shareholders:
Investment income (loss)--net (.10) (.21) (.10)
Capital charge resulting from issuance of Preferred Stock -- -- (.14)
---------- ---------- ----------
Total effect of Preferred Stock activity (.10) (.21) (.24)
---------- ---------- ----------
Net asset value, end of period $ 14.72 $ 15.88 $ 14.40
========== ========== ==========
Market price per share, end of period $ 13.125 $ 15.625 $ 14.875
========== ========== ==========
Total Investment Based on market value per share (13.21%)+++ 11.78% 2.19%+++
Return:** ========== ========== ==========
Based on net asset value per share (4.23%)+++ 17.35% 4.65%+++
========== ========== ==========
<PAGE>
Ratios to Average Expenses, net of reimbursement .71%* .69% .43%*
Net Assets:*** ========== ========== ==========
Expenses .71%* .69% .69%*
========== ========== ==========
Investment income--net 5.28%* 5.26% 5.51%*
========== ========== ==========
Supplemental Net assets, end of period (in thousands) $ 129,943 $ 140,214 $ 123,843
Data: ========== ========== ==========
Preferred Stock outstanding, end of period (in thousands) $ 60,000 $ 60,000 $ 60,000
========== ========== ==========
Portfolio turnover 2.99% 5.14% 27.13%
========== ========== ==========
Dividends Per Investment income--net $ 732 $ 1,547 $ 681
Share on Preferred
Stock Outstanding:
<FN>
*Annualized.
**Total investment returns exclude the effects of sales loads. Total investment returns
based on market value, which can be significantly greater or lesser than the net asset
value, result in substantially different returns.
***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.
<PAGE>
(a) Valuation of investments--Municipal bonds are traded primarily
in the over-the-counter market and are valued at the most recent
bid price or yield equivalent as obtained by the Fund's pricing
service from dealers that make markets in such securities. Financial
futures contracts, 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 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.
(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 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 stock.
<PAGE>
(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, L.P. ("FAM"). Effective January 1, 1994, the
investment advisory business of FAM was reorganized from a corporation
to a limited partnership. Both prior to and after the reorganization,
ultimate control of FAM was vested with Merrill Lynch & Co., Inc.
("ML & Co."). The general partner of FAM is Princeton Services, Inc.,
an indirect wholly-owned subsidiary of ML & Co. The limited partners
are ML & Co. and Merrill Lynch Investment Management, Inc. ("MLIM"),
which is also an indirect wholly-owned subsidiary of ML & Co.
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, MLIM, 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 May 31, 1994 were $5,747,660 and $10,316,228,
respectively.
Net realized and unrealized gains (losses) as of May 31, 1994 were
as follows:
Realized Unrealized
Losses Gains
Long-term investments $ (268,979) $ 5,238,421
Short-term investments (4,831) --
---------- -----------
Total $ (273,810) $ 5,238,421
========== ===========
<PAGE>
As of May 31, 1994, net unrealized appreciation for Federal income
tax purposes aggregated $5,238,421, of which $6,163,591 related to
appreciated securities and $925,170 related to depreciated securities.
The aggregate cost of investments at May 31, 1994 for Federal income
tax purposes was $178,182,773.
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 May 31, 1994, shares outstanding remained
constant at 8,829,651. At May 31, 1994, total paid-in capital
amounted to $124,079,259.
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 May 31, 1994 was 2.99%.
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 May 31, 1994, 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 $14,544.
The Fund pays commissions to certain broker-dealers at the end of
each auction at the annual rate of one-quarter of 1% calculated on
the proceeds of each auction. For the six months ended May 31, 1994,
MLPF&S, an affiliate of MLAM, earned $51,996 as commissions.
5. Subsequent Event:
On June 10, 1994, the Fund's Board of Directors declared an ordinary
income dividend to Common Stock shareholders in the amount of $0.079574
per share, payable on June 29, 1994 to shareholders of record as of
June 20, 1994.
<PAGE>
<TABLE>
PER SHARE INFORMATION
<CAPTION>
Per Share Selected Quarterly Financial Data*
Net Realized Unrealized Dividends/Distributions
Investment Gains Gains Net Investment Income Capital
For the Quarter Income (Losses) (Losses) Common Preferred Gains
<S> <C> <C> <C> <C> <C> <C>
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 --
December 1, 1993 to February 28, 1994 .29 -- (.12) .24 .05 --
March 1, 1994 to May 31, 1994 .30 (.03) (1.02) .23 .05 .01
<CAPTION>
Net Asset Value Market Price**
For the Quarter High Low High Low Volume***
<S> <C> <C> <C> <C> <C>
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
December 1, 1993 to February 28, 1994 16.39 15.71 16.50 14.50 701
March 1, 1994 to May 31, 1994 15.56 14.08 15.375 13.00 677
<FN>
*Calculations are based upon shares of Common Stock outstanding at the end of each quarter.
**As reported in the consolidated transaction reporting system.
***In thousands.
OFFICERS AND DIRECTORS
Arthur Zeikel, President and Director
Kenneth S. Axelson, 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
<PAGE>
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
</TABLE>
