MUNIYIELD
NEW JERSEY
FUND, INC.
FUND LOGO
Annual Report
November 30, 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 year ended November 30, 1994, the Common Stock of MuniYield
New Jersey Fund, Inc. earned $0.929 per share income dividends,
which included earned and unpaid dividends of $0.076. This
represents a net annualized yield of 7.03%, based on a month-end net
asset value of $13.22 per share. Over the same period, total
investment return on the Fund's Common Stock was -10.82%, based on a
change in per share net asset value from $15.88 to $13.22, and
assuming reinvestment of $0.946 per share income dividends.
For the six-month period ended November 30, 1994, total investment
return on the Fund's Common Stock was -6.88%, based on a change in
per share net asset value from $14.72 to $13.22, and assuming
reinvestment of $0.464 per share income dividends.
For the six months ended November 30, 1994, the average yield on the
Fund's Auction Market Preferred Stock was 2.99%.
The Environment
Volatility in the US financial markets continued during the period,
largely prompted by concerns of increasing inflationary pressures.
The possibility of continued monetary policy tightening by the
Federal Reserve Board was predominant in the minds of investors
throughout most of the period. Therefore, there was little surprise
when the central bank continued to raise short-term interest rates.
The weakness of the US dollar in foreign exchange markets also
prompted declines in US stock and bond prices, but some
strengthening of the US currency has occurred recently.
Despite widespread inflationary expectations, recently released data
show that the rate of inflation remains near a 30-year low, as
consumer prices barely rose in October. Other economic results show
little evidence of an overheating economy. Housing starts fell
during October, and higher interest rates will likely continue to
weaken housing demand. Although retail sales are rising, the real
strength in the economy is still in the manufacturing sector.
<PAGE>
In the weeks ahead, investors will continue to assess economic data
and inflationary trends in order to gauge whether further increases
in short-term interest rates are likely. In addition, investor
interest will also be focused on the progress that the new Congress
makes on both reducing the Federal budget deficit and providing tax
cuts that promote savings and investment. Legislative progress,
combined with continued indications of moderate and sustainable
levels of economic growth, would be positive for the US capital
markets.
The Municipal Market
The long-term tax-exempt market continued to erode throughout the
six months ended November 30, 1994. As measured by the Bond Buyer
Revenue Bond Index, yields on A-rated municipal revenue bonds
maturing in 30 years rose by over 90 basis points (0.90%) to 7.32%
during the period ended November 30, 1994. This represents the
highest level of tax-exempt bond yields in over two years. US
Treasury bonds suffered even greater declines during the six-month
period as Treasury bond yields rose approximately 60 basis points to
end the period at 8.00%.
The tax-exempt bond market reacted negatively throughout the period
to indications that, despite a series of interest rate increases by
the Federal Reserve Board, the strength of the domestic economy seen
in recent quarters has not yet been significantly reduced. While
inflationary pressures have remained well contained, additional
Federal Reserve Board actions have been expected both to ensure that
domestic economic growth is eventually confined to current levels
and to assure nervous financial markets of its anti-inflationary
intentions. Within this context, institutional investors have
largely withdrawn from the municipal market to await a more stable
environment. At the same time, retail investors have been redeeming
mutual fund shares, largely in anticipation of continued price
declines. Investor withdrawals were particularly heavy in October
and early November, with tax-exempt mutual fund outflows exceeding
$3 billion during the last quarter.
<PAGE>
Fortunately, while the demand for tax-exempt bonds has declined
somewhat in recent months, new bond issuance has remained greatly
reduced. During the three months ended November 30, 1994, only $32
billion in long-term tax-exempt securities were issued, a decline of
over 50% compared to the November 30, 1993 quarter. Similarly, for
the six months ended November 30, 1994, only $75 billion in
municipal securities were underwritten, a decline of over 50%
compared to the comparable period a year earlier. This reduction in
issuance in recent quarters has allowed the municipal bond market to
react to both the decline in investor demand and the rise in
fixed-income yields in a more orderly fashion than in similar
situations in the past particularly during 1987.
Long-term tax-exempt revenue bonds currently yield approximately 7%,
or almost 11.5% on an after-tax equivalent basis, to an investor in
the 39.6% Federal income tax bracket. As inflation has only
marginally increased in the past year, real tax-exempt interest
rates have risen dramatically. The Federal Reserve Board appears
committed to maintaining inflation at or below its current levels.
Indeed, most forecasts expect inflation to remain in its present
range of 3%--4% throughout 1995 and, potentially, for the remainder
of the 1990s. Real after-tax equivalent interest rates exceeding 7%
represent historically attractive municipal investments for
long-term investors.
Federal Reserve Board actions taken thus far have yet to fully
impact US domestic growth and expected additional actions should
promote only a modest economic expansion within a benign
inflationary context beginning sometime early in 1995. Within such
an environment, it is unlikely that tax-exempt interest rates will
remain at their current attractive levels. Tax-exempt bond issuance
is unlikely to return to the historic high levels seen in 1992 and
1993, while investor demand should return as markets stabilize. As
we have discussed in earlier reports, the total number of tax-exempt
bonds outstanding is scheduled to decline dramatically in 1994 and
1995 as a result of both regular bond maturities and early
redemptions. Investors seeking tax-advantaged issues are likely to
find it very difficult to obtain currently available tax-exempt
yields as the current supply/demand balance is unlikely to be
maintained in the coming quarters.
Portfolio Strategy
During the past 12 months, the municipal bond market has been
extremely volatile. As measured by the Bond Buyer Revenue Bond
Index, long-term tax-exempt bond yields ranged from a low of 5.49%
on February 3, 1994 to a high of 7.37% on November 17, 1994. At
fiscal year-end November 30, 1994, the Index was near the peak for
the period and reached the highest level in more than two and
one-half years. The change in direction of long-term interest rates
occurred as a result of the US economy heating up during the fourth
quarter of 1993 and generating momentum which carried forward
throughout 1994. This led the Federal Reserve Board to begin
tightening monetary policy in February, which was an attempt to
prevent an increase in inflationary pressures. Prices of long-term
fixed-income securities have fallen sharply in response to the
rapidly changing investment climate.
<PAGE>
We shifted our portfolio strategy during the past 12 months as
market psychology changed. The Fund started the year fully invested
and took advantage of the decline in interest rates through the
start of 1994. However, as evidence of a booming economy emerged
early in 1994, we became cautious on the market. Our strategy
centered on raising cash reserves to approximately 10% of net assets
and restructuring the portfolio's holdings to include a greater
percentage of defensive bonds. This entailed selling discount
coupons and buying higher coupon bonds which are priced to call. As
a result, we were able to mute some of the volatility that occurred
during this very difficult period.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Vincent R. Giordano)
Vincent R. Giordano
Vice President and Portfolio Manager
December 29, 1994
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.
<PAGE>
To illustrate these concepts, assume a fund's Common Stock
capitalization of $100 million and the issuance of Preferred Stock
for an additional $50 million, creating a total value of $150
million available for investment in long-term municipal bonds. If
prevailing short-term interest rates are approximately 3% and long-
term interest rates are approximately 6%, the yield curve has a
strongly positive slope. The fund pays dividends on the $50 million
of Preferred Stock based on the lower short-term interest rates. At
the same time, the fund's total portfolio of $150 million earns the
income based on long-term interest rates. Of course, increases in
short-term interest rates would reduce (and even eliminate) the
dividends on the Common Stock.
In this case, the dividends paid to Preferred Stock shareholders are
significantly lower than the income earned on the fund's long-term
investments, and therefore the Common Stock shareholders are the
beneficiaries of the incremental yield. However, if short-term
interest rates rise, narrowing the differential between short-term
and long-term interest rates, the incremental yield pick-up on the
Common Stock shares 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.
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
GO General Obligation Bonds
M/F Multi-Family
UT Unlimited Tax
VRDN Variable Rate Demand Notes
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (in Thousands)
<CAPTION>
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
New Jersey--93.1%
<S> <S> <C> <S> <C>
Atlantic County, New Jersey, Utilities Authority, Solid Waste Revenue Bonds:
NR* Baa $ 1,375 7% due 3/01/2008 $ 1,290
NR* Baa 2,400 7.125% due 3/01/2016 2,240
NR* A1 3,545 Camden County, New Jersey, Improvement Authority, Lease Revenue Bonds
(Property and Equipment Program), 6% due 12/01/2012 3,212
AAA Aaa 3,145 Delaware River Joint Toll Bridge Commission, Revenue Refunding Bonds
(Pennsylvania Bridge), 6.25% due 7/01/2012 (c) 2,984
NR* A1 1,120 Essex County, New Jersey, Improvement Authority, Parking Facility Revenue
Bonds, 6.20% due 7/01/2022 1,010
AAA Aaa 5,380 Hudson County, New Jersey, COP, Refunding Bonds (Correctional Facilities),
6.60% due 12/01/2021 (b) 5,183
AA A 3,200 Jersey City, New Jersey, School, UT, 6.65% due 2/15/2015 3,020
Mercer County, New Jersey, Improvement Authority Revenue Bonds:
NR* Aa1 5,000 (County Courthouse Project), 6.60% due 11/01/2014 4,859
AAA Aaa 7,185 Refunding (Solid Waste Project), AMT, Series A, 6.70% due 4/01/2013 (c) 7,043
NR* Baal 1,550 Refunding (Solid Waste Project), AMT, Series B, 6.80% due 4/01/2005 1,500
NR* VMIG1 600 New Jersey EDA, Dock Facility Revenue Refunding Bonds (Bayonne International
Matex Tank Terminal Project), VRDN, Series A, 3.45% due 12/01/2027 (a) 600
NR* P1 300 New Jersey EDA, Economic Development Revenue Refunding Bonds (Dow Chemical--
El Dorado Term--1984), VRDN, Series A, 3.40% due 5/01/2001 (a) 300
AAA Aaa 5,500 New Jersey EDA, Natural Gas Facilities Revenue Refunding Bonds (NUI Corp.),
Series A, 6.35% due 10/01/2022 (e) 5,108
</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>
New Jersey EDA, Revenue Bonds:
NR* Aaa $ 1,300 (Hoffman--La Roche Incorporated Project), VRDN, AMT, 3.45% due 11/01/2011 (a) $ 1,300
AA- Aa 6,000 (Trenton Office Complex), 6% due 6/15/2012 5,478
AAA Aaa 2,500 New Jersey EDA, Revenue Refunding Bonds (RWJ Health Care Corporation), 6.50%
due 7/01/2024 (f) 2,356
<PAGE>
NR* Aa1 10,750 New Jersey EDA, Solid Waste Disposal Facilities Revenue Bonds (Garden State
Paper Company), AMT, 7.125% due 4/01/2022 10,928
New Jersey Health Care Facilities Financing Authority Revenue Bonds:
AAA Aaa 2,600 (Newark Beth Israel Medical Center), 6% due 7/01/2024 (f) 2,280
A- NR* 965 (Pascack Valley Hospital Association), 6.90% due 7/01/2021 888
A- A 6,060 Refunding (Atlantic City Medical Center), Series C, 6.80% due 7/01/2011 5,844
AAA Aaa 2,000 Refunding (Hackensack Medical Center), 6.625% due 7/01/2011 (c) 1,977
BBB- Baa 3,875 (Saint Elizabeth Hospital), Series B, 8.25% due 7/01/2020 3,993
New Jersey Sports and Exposition Authority, State Contract Revenue Bonds:
A+ Aa 5,965 Series A, 6.50% due 3/01/2019 5,702
A1 VMIG1 1,000 VRDN, Series C, 3.65% due 9/01/2024 (a)(b) 1,000
AA+ Aa1 2,105 New Jersey State, AMT, GO, 7.05% due 7/15/2015 2,118
New Jersey State Educational Facilities Authority Revenue Bonds:
A- NR* 7,755 Higher Education (Drew University), Series E, 6.25% due 7/01/2017 6,970
AA+ Aa1 5,435 Higher Education (Princeton University), Series C, 6.375% due 7/01/2022 5,041
A- Baa 3,355 Higher Education (Saint Peter's College), Series B, 6.80% due 7/01/2008 3,343
A- Baa 3,600 Higher Education (Saint Peter's College), Series B, 6.85% due 7/01/2012 3,485
A- Baal 6,030 (Stevens Institute of Technology), Series A, 6.80% due 7/01/2008 6,008
AAA Aaa 2,500 New Jersey State Highway Authority, Senior Parkway General Revenue Bonds
(Garden State Parkway), 6.15% due l/01/2007 (e) 2,453
New Jersey State Housing and Mortgage Finance Agency, Home Buyer Revenue
Bonds, AMT (b):
AAA Aaa 8,000 6.30% due 4/01/2025 6,984
AAA Aaa 4,000 Series M, 7% due 10/01/2026 3,852
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) 2,494
AAA Aaa 2,000 New Jersey State Transportation Corporation, COP (Raymond Plaza East,
Incorporated), 6.50% due 10/01/2016 (f) 1,939
New Jersey State Turnpike Authority, Turnpike Revenue Refunding Bonds:
A A 7,000 Series A, 6.75% due 1/01/2008 7,069
AAA VMIG1 5,500 VRDN, Series D, 3.25% due 1/01/2018 (a)(c) 5,500
New Jersey Wastewater Treatment Trust, Loan Revenue Bonds, Series A:
AA Aa 2,375 6% due 7/01/2010 2,209
AA Aa 2,485 6% due 7/01/2011 2,287
</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>
North Brunswick Township, New Jersey, Revenue Bonds, UT:
NR* Aa $ 2,405 6.50% due 5/15/2012 $ 2,374
NR* Aa 2,710 6.50% due 5/15/2013 2,667
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) 1,984
AAA Aaa 6,230 Passaic Valley, New Jersey, Water Commission, Water Supply Revenue Bonds,
Series A, 6.40% due 12/15/2002 (c)(g) 6,456
Port Authority of New York and New Jersey, Consolidated Revenue Bonds:
AA- A1 2,465 67th Series, 6.90% due 7/01/2011 2,481
AA- A1 1,000 69th Series, 7.125% due 6/01/2025 1,003
A1+ VMIG1 500 Port Authority of New York and New Jersey, Special Obligation Revenue Bonds
(Versatile Structure Obligation), VRDN, Series 1, 3.45% due 8/01/2028 (a) 500
AA A1 2,275 Rutgers State University, New Jersey, Revenue Refunding Bonds (State
University of New Jersey), Series A, 6.50% due 5/01/2018 2,183
AA A 3,100 University of Medicine and Dentistry, New Jersey, Revenue Bonds, Series E,
6.50% due 12/01/2018 3,008
Puerto Rico--2.8%
A- Baal 5,000 Puerto Rico Electric Power Authority, Power Revenue Bonds, Series P, 7% due
7/01/2021 4,976
Total Investments (Cost--$175,670)--95.9% 169,479
Other Assets Less Liabilities--4.1% 7,267
--------
Net Assets--100.0% $176,746
========
<FN>
*Not Rated.
(a)The interest rate is subject to change periodically
based upon prevailing market rates. The interest
rate shown is the rate in effect at November 30, 1994.
(b)MBIA Insured.
(c)FGIC Insured.
(d)FHA Insured.
(e)AMBAC Insured.
(f)FSA Insured.
(g)Prerefunded.
Ratings of issues shown have not been audited by Deloitte & Touche LLP.
See Notes to Financial Statements.
</TABLE>
<PAGE>
FINANCIAL INFORMATION
<TABLE>
Statement of Assets, Liabilities and Capital as of November 30, 1994
<CAPTION>
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$175,670,388) (Note 1a) $169,479,321
Cash 12,341
Receivables:
Securities sold $ 4,206,948
Interest 3,582,296 7,789,244
------------
Deferred organization expenses (Note 1e) 15,366
Prepaid expenses 37,598
------------
Total assets 177,333,870
------------
Liabilities: Payables:
Dividends to shareholders (Note 1g) 464,562
Investment adviser (Note 2) 72,160 536,722
------------
Accrued expenses 51,423
------------
Total liabilities 588,145
------------
Net Assets: Net assets $176,745,725
============
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 123,196,293
Undistributed investment income--net 900,402
Accumulated realized capital losses--net (Note 5) (2,042,868)
Unrealized depreciation on investments--net (6,191,067)
------------
Total capital--Equivalent to $13.22 net asset value per share of
Common Stock (market price--$12.125) 116,745,725
------------
Total capital $176,745,725
============
<FN>
*Auction Market Preferred Stock.
See Notes to Financial Statements.
</TABLE>
<PAGE>
FINANCIAL INFORMATION (continued)
<TABLE>
Statement of Operations
<CAPTION>
For the Year Ended
November 30, 1994
<S> <S> <C> <C>
Investment Interest and amortization of premium and discount earned $ 11,609,580
Income
(Note 1d):
Expenses: Investment advisory fees (Note 2) $ 957,768
Commission fees (Note 4) 228,122
Professional fees 72,063
Transfer agent fees 39,866
Printing and shareholder reports 30,982
Accounting services (Note 2) 27,558
Directors' fees and expenses 23,110
Listing fees 16,185
Custodian fees 14,031
Amortization of organization expenses (Note 1e) 6,337
Pricing fees 5,811
Other 5,126
------------
Total expenses 1,426,959
------------
Investment income--net 10,182,621
------------
Realized & Realized loss on investments--net (2,042,858)
Unrealized Change in unrealized depreciation on investments--net (21,522,883)
Loss on ------------
Investments Net Decrease in Net Assets Resulting from Operations $(13,383,120)
- --Net (Notes 1d ============
& 3):
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (continued)
<PAGE>
<TABLE>
Statements of Changes in Net Assets
<CAPTION>
For the Year Ended
November 30,
Increase (Decrease) in Net Assets: 1994 1993
<S> <S> <C> <C>
Operations: Investment income--net $ 10,182,621 $ 10,275,094
Realized gain (loss) on investments--net (2,042,858) 153,572
Change in unrealized appreciation/depreciation on investments--net (21,522,883) 12,791,096
------------ ------------
Net increase (decrease) in net assets resulting from operations (13,383,120) 23,219,762
------------ ------------
Dividends & Investment income--net:
Distributions Common Stock (8,223,319) (8,382,854)
to Shareholders Preferred Stock (1,777,656) (1,856,268)
(Note 1g): Realized gain on investments--net:
Common Stock (127,660) (82,212)
Preferred Stock (25,896) (18,028)
------------ ------------
Net decrease in net assets resulting from dividends and
distributions to shareholders (10,154,531) (10,339,362)
------------ ------------
Capital Stock Offering and underwriting costs resulting from the issuance of
Transactions Common Stock 48,307 --
(Notes 1e & 4): Offering and underwriting costs resulting from the issuance of
Preferred Stock 21,198 --
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 (23,468,146) 16,371,314
Beginning of year 200,213,871 183,842,557
------------ ------------
End of year* $176,745,725 $200,213,871
============ ============
*Undistributed investment income--net $ 900,402 $ 718,756
============ ============
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (concluded)
<PAGE>
<TABLE>
Financial Highlights
<CAPTION>
For the
Period
The following per share data and ratios have been derived May 1,
from information provided in the financial statements. For the Year Ended 1992++ to
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 1.15 1.17 .62
Realized and unrealized gain (loss) on investments--net (2.67) 1.49 .31
---------- ---------- ----------
Total from investment operations (1.52) 2.66 .93
---------- ---------- ----------
Less dividends and distributions:
Investment income--net (.93) (.96) (.44)
Realized gain on investments--net (.01) (.01) --
---------- ---------- ----------
Total dividends and distributions (.94) (.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--net (.20) (.21) (.10)
Capital charge resulting from issuance of Preferred Stock -- -- (.14)
---------- ---------- ----------
Total effect of Preferred Stock activity (.20) (.21) (.24)
---------- ---------- ----------
Net asset value, end of period $ 13.22 $ 15.88 $ 14.40
========== ========== ==========
Market price per share, end of period $ 12.125 $ 15.625 $ 14.875
========== ========== ==========
Total Based on market price per share (16.87%) 11.78% 2.19%+++
Investment ========== ========== ==========
Return:** Based on net asset value per share (10.82%) 17.35% 4.65%+++
========== ========== ==========
Ratios to Expenses, net of reimbursement .74% .69% .43%*
Average ========== ========== ==========
Net Assets:*** Expenses .74% .69% .69%*
========== ========== ==========
Investment income--net 5.30% 5.26% 5.51%*
========== ========== ==========
<PAGE>
Supplemental Net assets, net of Preferred Stock, end of period
Data: (in thousands) $ 116,746 $ 140,214 $ 123,833
========== ========== ==========
Preferred Stock outstanding, end of period (in thousands) $ 60,000 $ 60,000 $ 60,000
========== ========== ==========
Portfolio turnover 15.06% 5.14% 27.13%
========== ========== ==========
Dividends Per Investment income--net $ 1,481 $ 1,547 $ 681
Share On
Preferred Stock
Outstanding:
<FN>
*Annualized.
**Total investment returns based on market value, which can be significantly greater
or lesser than the net asset value, may result in substantially different returns. Total
investment returns exclude the effects of sales loads.
***Do not reflect the effect of dividends to Preferred Stock shareholders.
++Commencement of Operations.
++++The Fund's Preferred Stock was issued on 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.
<PAGE>
(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.
(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.
<PAGE>
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. ("PSI"), an indirect wholly-owned
subsidiary of ML & Co. The limited partners are ML & Co. and Fund
Asset Management, Inc. ("FAMI"), 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.
NOTES TO FINANCIAL STATEMENTS (concluded)
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, FAMI, PSI, Merrill Lynch, Pierce, Fenner & Smith
Inc. ("MLPF&S"), and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the year ended November 30, 1994 were $27,520,737 and
$40,577,091, respectively.
Net realized and unrealized losses as of November 30, 1994 were as
follows:
Realized Unrealized
Losses Losses
Long-term investments $(1,372,622) $(6,191,067)
Short-term investments (4,871) --
Financial futures contracts (665,365) --
----------- -----------
Total $(2,042,858) $(6,191,067)
=========== ===========
As of November 30, 1994, net unrealized depreciation for Federal
income tax purposes aggregated $6,191,067, of which $395,156 related
to appreciated securities and $6,586,223 related to depreciated
securities. The aggregate cost of investments at November 30, 1994
for Federal income tax purposes was $175,670,388.
<PAGE>
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, 1994, shares outstanding remained
constant at 8,829,651. At November 30, 1994, total paid-in capital
amounted to $124,079,258.
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, 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 November 30, 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.
Effective December 1, 1994, as a result of a two-for-one stock
split, there will be 2,400 AMPS shares with a liquidation preference
of $25,000 per share.
The Fund pays commissions to certain broker-dealers at the end of
each auction at an annual rate ranging from 0.25% to 0.375%,
calculated on the proceeds of each auction. For the year ended
November 30, 1994, MLPF&S, an affiliate of FAMI, earned $38,106 as
commissions.
5. Capital Loss Carryforward:
At November 30, 1994, the Fund had a capital loss carryforward of
approximately $2,043,000, all of which expires in 2002. This amount
will be available to offset like amounts of any future taxable
gains.
6. Subsequent Event:
On December 9, 1994, the Fund's Board of Directors declared an
ordinary income dividend to Common Stock shareholders in the amount
of $.075822 per share, payable on December 29, 1994 to shareholders
of record as of December 19, 1994.
<AUDIT-REPORT>
INDEPENDENT AUDITORS' REPORT
<PAGE>
The Board of Directors and Shareholders of
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, 1994, 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 two-year period
then ended and the period May 1, 1992 (commencement of operations)
to November 30, 1992. 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 November
30, 1994 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, 1994, 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 30, 1994
</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, 1994 qualify as tax-exempt interest dividends for
Federal income tax purposes. Additionally, the following table
summarizes the per share capital gains distributions paid by the
Fund during the year.
<TABLE>
Payable Short-Term Long-Term
Date Capital Gains Capital Gains
<S> <C> <C> <C>
Common Stock Shareholders 12/30/93 $ 0.014458 $ --
Preferred Stock Shareholders 12/30/93 $21.58 $ --
Please retain this information for your records.
</TABLE>
PER SHARE INFORMATION (unaudited)
<TABLE>
Per Share Selected Quarterly Financial Data*
<CAPTION>
Dividends/Distributions
Net Realized Unrealized
Investment Gains Gains Net Investment Income Capital Gains
For the Quarter Income (Losses) (Losses) Common Preferred Common
<S> <C> <C> <C> <C> <C> <C>
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 .01
March 1, 1994 to May 31, 1994 .30 (.03) (1.02) .23 .05 --
June 1, 1994 to August 31, 1994 .28 -- .12 .23 .05 --
September 1, 1994 to November 30, 1994 .28 (.20) (1.42) .23 .05 --
<PAGE>
<CAPTION>
Net Asset Value Market Price**
For the Quarter High Low High Low Volume***
<S> <C> <C> <C> <C> <C>
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 15.80 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
June 1, 1994 to August 31, 1994 15.15 14.43 14.125 12.875 747
September 1, 1994 to November 30, 1994 14.87 12.86 13.25 10.50 1,573
<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.
</TABLE>
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
Custodian
The Bank of New York
90 Washington Street
New York, New York 10286
Transfer Agents
Common Stock:
The Bank of New York
101 Barclay Street
New York, New York 10286
<PAGE>
Preferred Stock:
IBJ Schroder Bank & Trust Company
One State Street
New York, New York 10004
NYSE Symbol
MYJ
