MUNIYIELD
NEW JERSEY
FUND, INC.
FUND LOGO
Semi-Annual Report
May 31, 1996
Officers and Directors
Arthur Zeikel, President and Director
James H. Bodurtha, Director
Herbert I. London, Director
Robert R. Martin, Director
Joseph L. May, Director
Andre F. Perold, Director
Terry K. Glenn, Executive Vice President
Vincent R. Giordano, Senior Vice President
Donald C. Burke, Vice President
Kenneth A. Jacob, Vice President
William M. Petty, Vice President
Gerald M. Richard, Treasurer
Mark B. Goldfus, Secretary
<PAGE>
Custodian
The Bank of New York
90 Washington Street
New York, NY 10286
Transfer Agents
Common Stock:
The Bank of New York
101 Barclay Street
New York, NY 10286
Preferred Stock:
IBJ Schroder Bank & Trust Company
One State Street
New York, NY 10004
NYSE Symbol
MYJ
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. Statements and other information
herein are as dated and are subject to change.
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, 1996, the Common Stock of
MuniYield New Jersey Fund, Inc. earned $0.463 per share income
dividends, which included earned and unpaid dividends of $0.077.
This represents a net annualized yield of 6.23%, based on a per
share net asset value of $14.83 as of May 31, 1996. Over the same
period, the total investment return on the Fund's Common Stock was
- -1.61%, based on a change in per share net asset value from $15.56
to $14.83, and assuming reinvestment of $0.458 per share income
dividends.
For the six months ended May 31, 1996, the average yield of the
Fund's Auction Market Preferred Stock was 3.46%.
The Environment
Conflicting economic indicators began to create greater uncertainty
in the investment outlook during the six-month period ended May 31,
1996. Although there were expectations of a slowing economy early in
the period, with the release of stronger-than-expected employment
data in February and March investors began to anticipate renewed
economic growth. Interest rates rose, and the Federal Reserve Board
left monetary policy on hold. However, revised data indicate the US
economy actually grew more slowly in the first quarter of 1996 than
had been originally reported. In addition, consumer sentiment does
not appear to be improving markedly.
Investors also became concerned that inflationary pressures are
increasing because of higher prices for agricultural commodities and
a sharp upturn in the price of crude oil. Nevertheless, other
wholesale and consumer price increases remain subdued. More
important, wage increases--a significant factor in the inflation
outlook--continue to be well-contained.
Investors are likely to continue to focus on the probable direction
of economic activity and Federal Reserve Board monetary policy in
the weeks ahead. At this time, it appears that the economy is not on
the verge of overheating. Nevertheless, it is likely that any
further near-term indication of stronger-than-expected economic
activity may increase investor apprehension concerning the outlook
for higher inflation and interest rates.
<PAGE>
The Municipal Market
During the six months ended May 31, 1996, tax-exempt bond yields
rose as investors became increasingly concerned that recent economic
growth would reignite inflationary pressures. Through early February
1996, municipal bond yields continued their earlier declines
supported by continued moderate economic growth and favorable
inflationary expectations. As measured by the Bond Buyer Revenue
Bond Index, yields on uninsured, A-rated municipal revenue bonds
declined an additional 30 basis points (0.30%) to 5.70% by early
February. As signs of emerging economic growth became more numerous,
particularly with the release of the strong March employment
figures, inflation fears increased and bond yields rose in response
for the remainder of the six-month period ended May 31, 1996. At May
31, 1996, long-term municipal bond yields were approximately 6.20%,
an increase of approximately 40 basis points for the last six
months. The rise in US Treasury bond yields was more substantial.
Over the last six months, yields on US Treasury securities rose
approximately 90 basis points to 7.00%. During the May period, the
municipal bond market reversed the trend seen throughout much of
1995 and significantly outperformed the US Treasury bond market.
The municipal bond market's recent outperformance was largely the
result of two principal factors. First, and perhaps the more
important, much of the earlier concern regarding proposed changes in
Federal income tax codes and their effect on the tax treatment of
tax-exempt bond income has dissipated. As the negative revenue
impact of the various proposals, such as the flat tax, became
apparent, the likelihood of immediate reform quickly diminished.
When the Kemp Commission dealing with Federal income tax reform
released its findings early in 1996, the obvious need for reform was
highlighted. However, no specific recommendations of a flat tax,
value-added tax or any other reform were made. Consequently, fears
of losing the favored tax treatment of municipal bond income
declined even further. As a percentage of Treasury bond yields, tax-
exempt bond yield ratios quickly declined from 95% to below 90%.
This allowed the municipal bond market to maintain much of the gains
made since early 1995.
The second major factor leading to the municipal bond market's
recent outperformance was the return of a more favorable technical
environment. Over the past six months approximately $90 billion in
municipal securities were underwritten, an increase of approximately
40% versus the comparable period a year earlier. However, much of
this increase was biased by recent underwritings dedicated toward
refinancing. Like individual homeowners, municipal issuers sought to
refinance their existing higher-couponed debt as tax-exempt bond
yields declined from their highs in 1995. In recent months such
refinancings were estimated to represent at least 50% of total
issuance. However, the recent rise in tax-exempt interest rates
slowed the pace of such refinancings. Over the last three months
approximately $45 billion in long-term tax-exempt securities were
underwritten, an increase of nearly 25% compared to the same period
a year ago. At current interest rate levels, large amounts of
refundings are unlikely and the rate of new bond issuance should
continue to decline.
<PAGE>
Additionally, investors continue to receive significant amounts of
assets derived from coupon income, bond maturities, and proceeds
from early redemptions. In June and July, investors are expected to
receive over $50 billion in such assets. Annual new bond issuance
has declined in recent years and is expected to remain below levels
seen in the early 1990s. Consequently, as the higher-couponed bonds
issued in the early-to-mid 1980s have been redeemed at their first
optional call dates, the number of total outstanding tax-exempt
bonds has continued to decline as well. This combination of a
declining total supply and significant amounts of new assets has
helped to maintain investor demand in recent months. Additionally,
major institutional investors, such as certain property/casualty
insurance companies whose underwriting profits were cyclically high,
demonstrated ongoing interest in the tax-exempt bond market,
particularly on higher-quality issues. Individual and institutional
investor demand was strong enough during the six-month period ended
May 31, 1996 to easily absorb the relative increase in bond
issuance.
Looking ahead, we believe the municipal bond market is likely to
continue to outperform the US Treasury market. Investor demand
should remain adequate to absorb new bond issuance. It is also
unlikely that the rapid pace of issuance seen thus far in 1996 will
be maintained. The recent rise in yields has made further bond
refinancings economically unfeasible. Since these refinancings were
the driving force of recent bond issuance, as the amount of these
refundings decline, overall issuance should decline. This should
allow the current demand/supply balance to be easily maintained in
the coming months.
Additionally, as a percentage of US Treasury bond yields, long-term
municipal bond yields remain historically attractive. It is likely
that recent interest rate increases will have a negative impact on
economic growth, perhaps as early as late summer 1996. With long-
term mortgage rates above 8%, the domestic housing sector has
already indicated some signs of slower growth. If other interest
rate sectors of the economy, like the automobile industry, begin to
show similar adverse effects, taxable interest rates would be poised
to resume their decline. With long-term tax-exempt revenue bonds
yielding approximately 90% of their taxable counterparts, municipal
bond yields are poised to decline further.
<PAGE>
Portfolio Strategy
We entered the six-month period ended May 31, 1996 optimistic that
interest rates would decline. This optimism was based on the belief
that the economy was slowing and that advances on a balanced Federal
budget agreement would be beneficial to the fixed-income markets. To
take advantage of this anticipated decline in interest rates, we
reduced the Fund's cash reserve position to a low level and
increased the Fund's duration. This strategy benefited the Fund's
performance as long-term interest rates declined over 50 basis
points through the end of December. Through mid-January, the economy
appeared sluggish enough that the Federal Reserve Board lowered the
Federal Funds rate by 0.50% to 5.25%, and investors priced in
further easings of monetary policy.
The new year brought the beginning of a reversal in the trend of
lower interest rates. By late February signs of a strengthening
economy began to undermine the confidence in the fixed-income
market. In March an explosive employment report seemed to confirm a
surge in the growth of the US economy, and yields rose rapidly.
Prior to the back up in yields, we gradually increased the Fund's
cash reserves while shortening its duration. This strategy made the
Fund less sensitive to the back up in yields experienced in the
fixed-income markets.
Looking ahead, we remain cautious toward long-term interest rates.
We believe this stance is warranted as economic releases so far in
1996 continue to show strength while inflationary pressures appeared
in the form of higher commodity prices. However, with the swift
increase in yields this year, we recently decreased the Fund's cash
reserve position by purchasing long-term securities at attractive
yields. We will maintain a cautious approach to the municipal bond
market until a clearer direction of interest rates emerges during
the balance of the year.
In Conclusion
We appreciate your ongoing interest in MuniYield New Jersey Fund,
Inc., and we look forward to serving your investment needs in the
months and years to come.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
<PAGE>
(Vincent R. Giordano)
Vincent R. Giordano
Senior Vice President
(William M. Petty)
William M. Petty
Vice President and Portfolio Manager
June 26, 1996
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. Of course, increases in
short-term interest rates would reduce (and even eliminate) the
dividends on the Common Stock.
<PAGE>
In this case, the dividends paid to Preferred Stock shareholders are
significantly lower than the income earned on the fund's long-term
investments, and therefore the Common Stock shareholders are the
beneficiaries of the incremental yield. However, if short-term
interest rates rise, narrowing the differential between short-term
and long-term interest rates, the incremental yield pick-up on the
Common Stock will be reduced or eliminated completely. At the same
time, the market value of the fund's Common Stock (that is, its
price as listed on the New York Stock Exchange) may, as a result,
decline. Furthermore, if long-term interest rates rise, the Common
Stock's net asset value will reflect the full decline in the price
of the portfolio's investments, since the value of the fund's
Preferred Stock does not fluctuate. In addition to the decline in
net asset value, the market value of the fund's Common Stock may
also decline.
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
<TABLE>
SCHEDULE OF INVESTMENTS (in Thousands)
<CAPTION>
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
<PAGE>
New Jersey--91.9%
<S> <S> <C> <S> <C>
NR* Ba $ 550 Atlantic County, New Jersey, Utilities Authority, Solid Waste Revenue Bonds,
7.125% due 3/01/2016 $ 537
AAA Aaa 2,000 Cape May County, New Jersey, Industrial Pollution Control Financing Authority
Revenue Bonds (Atlantic City Electric Company Project), AMT, Series A, 7.20%
due 11/01/2029 (b) 2,223
AAA Aaa 3,505 Delaware River and Bay Authority, Delaware, Revenue Refunding Bonds, 4.75%
due 1/01/2024 (b) 2,897
AAA Aaa 1,000 Highland Park, New Jersey, School District, GO, UT, 6.55% due 2/15/2021 (b) 1,057
AAA Aaa 7,880 Hudson County, New Jersey, COP, Refunding (Correctional Facilities), 6.60%
due 12/01/2021 (b) 8,337
AA A 3,200 Jersey City, New Jersey, School, GO, UT, 6.65% due 2/15/2015 3,444
NR* Aa1 3,500 Mercer County, New Jersey, Improvement Authority Revenue Bonds (County Courthouse
Project), 6.60% due 11/01/2000 (g) 3,817
AA- Aa 1,100 New Jersey Building Authority, State Building Revenue Refunding Bonds, 5% due
6/15/2019 959
NR* VMIG1++ 300 New Jersey EDA, Dock Facility Revenue Refunding Bonds (Bayonne/IMTT Project),
VRDN, Series A, 3.50% due 12/01/2027 (a) 300
AAA Aaa 2,715 New Jersey EDA, Educational Testing Services Revenue Bonds, Series B, 6.25%
due 5/15/2025 (b) 2,784
New Jersey EDA, Natural Gas Facilities Revenue Bonds (e):
A1+ VMIG1++ 1,600 (New Jersey Natural Gas Company Project), VRDN, Series B, 3.40% due 8/01/2030 (a) 1,600
A1+ VMIG1++ 200 Refunding (New Jersey Natural Gas Company), VRDN, Series A, 3.60% due 8/01/2030 (a) 200
AAA Aaa 5,000 Refunding (NUI Corp.), Series A, 6.35% due 10/01/2022 5,160
AAA Aaa 2,500 New Jersey EDA, Revenue Refunding Bonds (RWJ Health Care Corporation), 6.50%
due 7/01/2024 (f) 2,601
NR* Aa1 10,750 New Jersey EDA, Solid Waste Disposal Facilities Revenue Bonds (Garden State
Paper Company), AMT, 7.125% due 4/01/2022 11,532
AAA Aaa 2,500 New Jersey EDA, Water Facilities Revenue Refunding Bonds (Hackensack Water Co.
Project), AMT, Series B, 5.90% due 3/01/2024 (b) 2,440
New Jersey Health Care Facilities Financing Authority Revenue Bonds:
A- A 6,060 Refunding (Atlantic City Medical Center), Series C, 6.80% due 7/01/2011 6,394
AAA Aaa 4,160 Refunding (Berkeley Heights Convalescent Center), 5% due 7/01/2026 (e) 3,615
AAA Aaa 2,000 Refunding (Hackensack Medical Center), 6.625% due 7/01/2011 (c) 2,139
BBB- Baa 3,875 (Saint Elizabeth Hospital), Series B, 8.25% due 7/01/2020 4,170
AAA Aaa 1,000 (Somerset Medical Center), Series A, 5.20% due 7/01/2024 (c) 892
New Jersey Sports and Exposition Authority Revenue Bonds (State Contract):
A+ Aa 7,820 Series A, 6.50% due 3/01/2019 8,242
A1+ VMIG1++ 300 VRDN, Series C, 3.50% due 9/01/2024 (a)(b) 300
New Jersey State Educational Facilities Authority Revenue Bonds:
BBB+ NR* 6,250 Higher Education (Drew University), Series E, 6.25% due 7/01/2017 6,251
AA+ Aaa 5,435 Higher Education (Princeton University), Series C, 6.375% due 7/01/2022 5,652
BBB+ Baa 3,355 Higher Education (Saint Peter's College), Series B, 6.80% due 7/01/2008 3,615
BBB+ Baa 3,600 Higher Education (Saint Peter's College), Series B, 6.85% due 7/01/2012 3,888
AAA Aaa 3,455 (New Jersey Institute of Technology), Series 95-E, 5.375% due 7/01/2025 (b) 3,195
A- Baa1 6,030 (Stevens Institute of Technology), Series A, 6.80% due 7/01/2008 6,501
New Jersey State, GO:
AA+ NR* 3,000 6.75% due 9/15/2001 (g) 3,305
AA+ Aa1 2,105 AMT, 7.05% due 7/15/2015 2,354
</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 $ 4,000 New Jersey State Housing and Mortgage Finance Agency, Home Buyer Revenue Bonds,
AMT, Series M, 7% due 10/01/2026 (b) $ 4,153
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) 2,615
AAA Aaa 2,000 New Jersey State Transportation Corporation, COP (Raymond Plaza East,
Incorporated), 6.50% due 10/01/2016 (f) 2,096
AAA Aaa 10,550 New Jersey State Transportation Trust Fund Authority, GO (Transportation
System), Series A, 4.75% due 12/15/2016 (b) 9,071
BBB+ Baa1 7,000 New Jersey State Turnpike Authority, Turnpike Revenue Refunding Bonds, Series A,
6.75% due 1/01/2008 7,512
North Brunswick Township, New Jersey, Revenue Bonds, UT:
NR* Aa 2,405 6.50% due 5/15/2012 2,588
NR* Aa 2,710 6.50% due 5/15/2013 2,917
<PAGE>
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) 2,113
AAA Aaa 6,230 Passaic Valley, New Jersey, Water Commission, Water Supply Revenue Bonds,
Series A, 6.40% due 12/15/2002 (c)(g) 6,849
Port Authority of New York and New Jersey, Consolidated Revenue Bonds:
AA- A1 2,465 67th Series, 6.90% due 7/01/2011 2,622
AA- A1 1,000 69th Series, 7.125% due 6/01/2025 1,079
AA- A1 9,500 72nd Series, 7.35% due 10/01/2002 (g) 10,836
AAA Aaa 1,000 104th Series, 3rd Installment, 4.75% due 1/15/2026 (e) 823
Port Authority of New York and New Jersey, Special Obligation Revenue Bonds
(Versatile Structure Obligation), VRDN (a):
A1+ VMIG1++ 1,200 AMT, Series 1, 3.85% due 8/01/2028 1,200
A1+ VMIG1++ 2,800 Series 3, 3.70% due 6/01/2020 2,800
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 2,389
AA A 3,100 University of Medicine and Dentistry, New Jersey, Revenue Bonds, Series E,
6.50% due 12/01/2001 (g) 3,400
Puerto Rico--6.4%
A Baa1 7,200 Puerto Rico Commonwealth, Highway and Transportation Authority, Highway Revenue
Bonds, Series Y, 5.50% due 7/01/2026 6,589
A- Aaa 5,000 Puerto Rico Electric Power Authority, Power Revenue Bonds, Series P, 7% due
7/01/2001 (g) 5,593
Total Investments (Cost--$179,738)--98.3% 187,646
Other Assets Less Liabilities--1.7% 3,290
--------
Net Assets--100.0% $190,936
========
<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, 1996.
(b)MBIA Insured.
(c)FGIC Insured.
(d)FHA Insured.
(e)AMBAC Insured.
(f)FSA Insured.
(g)Prerefunded.
*Not Rated.
++Highest short-term rating by Moody's Investors Service, Inc
<PAGE>
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION
<TABLE>
Statement of Assets, Liabilities and Capital as of May 31, 1996
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$179,738,405) (Note 1a) $187,646,462
Cash 96,363
Interest receivable 3,542,667
Deferred organization expenses (Note 1e) 9,029
Prepaid expenses and other assets 13,445
------------
Total assets 191,307,966
------------
Liabilities: Payables:
Dividends to shareholders (Note 1f) $ 245,276
Investment adviser (Note 2) 80,995 326,271
------------
Accrued expenses and other liabilities 46,093
------------
Total liabilities 372,364
------------
Net Assets: Net assets $190,935,602
============
Capital: Capital Stock (200,000,000 shares authorized) (Note 4):
Preferred Stock, par value $.10 per share (2,400 shares of AMPS*
issued and outstanding at $25,000 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 967,424
Accumulated realized capital losses on investments--net (Note 5) (2,019,137)
Unrealized appreciation on investments--net 7,908,057
------------
Total--Equivalent to $14.83 net asset value per share of
Common Stock (market price--$14.00) 130,935,602
------------
Total capital $190,935,602
============
<FN>
*Auction Market Preferred Stock.
See Notes to Financial Statements.
</TABLE>
<PAGE>
FINANCIAL INFORMATION (continued)
<TABLE>
Statement of Operations
<CAPTION>
For the Six Months Ended
May 31, 1996
<S> <S> <C> <C>
Investment Income Interest and amortization of premium and discount earned $ 5,793,443
(Note 1d):
Expenses: Investment advisory fees (Note 2) $ 488,079
Commission fees (Note 4) 75,045
Professional fees 39,691
Accounting services (Note 2) 25,213
Transfer agent fees 19,966
Printing and shareholder reports 14,204
Directors' fees and expenses 11,572
Listing fees 8,889
Custodian fees 8,236
Pricing fees 3,656
Amortization of organization expenses (Note 1e) 3,179
Other 8,376
------------
Total expenses 706,106
------------
Investment income--net 5,087,337
------------
Realized & Realized gain on investments--net 156,584
Unrealized Change in unrealized appreciation on investments--net (6,575,834)
Gain (Loss) on ------------
Investments--Net Net Decrease in Net Assets Resulting from Operations $ (1,331,913)
(Notes 1b, 1d & 3): ============
See Notes to Financial Statements.
</TABLE>
<PAGE>
<TABLE>
Statements of Changes in Net Assets
<CAPTION>
For the
Six Months For the
Ended Year Ended
Increase (Decrease) in Net Assets: May 31, 1996 Nov. 30, 1995
<S> <S> <C> <C>
Operations: Investment income--net $ 5,087,337 $ 10,245,518
Realized gain (loss) on investments--net 156,584 (132,854)
Change in unrealized appreciation on investments--net (6,575,834) 20,674,959
------------ ------------
Net increase (decrease) in net assets resulting from operations (1,331,913) 30,787,623
------------ ------------
Dividends to Investment income--net:
Shareholders Common Stock (4,044,837) (7,926,660)
(Note 1f): Preferred Stock (1,042,176) (2,252,160)
------------ ------------
Net decrease in net assets resulting from dividends to
shareholders (5,087,013) (10,178,820)
------------ ------------
Net Assets: Total increase (decrease) in net assets (6,418,926) 20,608,803
Beginning of period 197,354,528 176,745,725
------------ ------------
End of period* $190,935,602 $197,354,528
============ ============
<FN>
*Undistributed investment income--net $ 967,424 $ 967,100
============ ============
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (concluded)
<PAGE>
<TABLE>
Financial Highlights
<CAPTION>
For the For the
Six Period
The following per share data and ratios have been derived Months May 1,
from information provided in the financial statements. Ended For the Year Ended 1992++ to
May 31, November 30, Nov. 30,
Increase (Decrease) in Net Asset Value: 1996 1995 1994 1993 1992
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 15.56 $ 13.22 $ 15.88 $ 14.40 $ 14.18
Operating -------- -------- -------- -------- --------
Performance: Investment income--net .58 1.17 1.15 1.17 .62
Realized and unrealized gain (loss) on
investments--net. (.73) 2.33 (2.67) 1.49 .31
-------- -------- -------- -------- --------
Total from investment operations (.15) 3.50 (1.52) 2.66 .93
-------- -------- -------- -------- --------
Less dividends to Common Stock
shareholders:
Investment income--net (.46) (.90) (.93) (.96) (.44)
Realized gain on investments--net -- -- (.01) (.01) --
-------- -------- -------- -------- --------
Total dividends and distributions to Common
Stock shareholders (.46) (.90) (.94) (.97) (.44)
-------- -------- -------- -------- --------
Capital charge resulting from issuance of
Common Stock -- -- -- -- (.03)
-------- -------- -------- -------- --------
Effect of Preferred Stock activity:++++
Dividends to Preferred Stock shareholders:
Investment income--net (.12) (.26) (.20) (.21) (.10)
Capital charge resulting from issuance of
Preferred Stock -- -- -- -- (.14)
-------- -------- -------- -------- --------
Total effect of Preferred Stock activity (.12) (.26) (.20) (.21) (.24)
-------- -------- -------- -------- --------
Net asset value, end of period $ 14.83 $ 15.56 $ 13.22 $ 15.88 $ 14.40
======== ======== ======== ======== ========
Market price per share, end of period $ 14.00 $ 13.75 $ 12.125 $ 15.625 $ 14.875
======== ======== ======== ======== ========
Total Investment Based on market price per share 5.11%+++ 21.26% (16.87%) 11.78% 2.19%+++
Return:** ======== ======== ======== ======== ========
Based on net asset value per share (1.61%)+++ 25.85% (10.82%) 17.35% 4.65%+++
======== ======== ======== ======== ========
Ratios to Average Expenses, net of reimbursement .72%* .73% .74% .69% .43%*
Net Assets:*** ======== ======== ======== ======== ========
Expenses .72%* .73% .74% .69% .69%*
======== ======== ======== ======== ========
Investment income--net 5.19%* 5.40% 5.30% 5.26% 5.51%*
======== ======== ======== ======== ========
<PAGE>
Supplemental Net assets, net of Preferred Stock, end of
Data: period (in thousands) $130,936 $137,355 $116,746 $140,214 $123,833
======== ======== ======== ======== ========
Preferred Stock outstanding, end of period
(in thousands) $ 60,000 $ 60,000 $ 60,000 $ 60,000 $ 60,000
======== ======== ======== ======== ========
Portfolio turnover 33.78% 32.79% 15.06% 5.14% 27.13%
======== ======== ======== ======== ========
Leverage: Asset coverage per $1,000 $ 3,182 $ 3,289 $ 2,946 $ 3,337 $ 3,064
======== ======== ======== ======== ========
Dividends Per Share Investment income--net $ 434 $ 938 $ 741 $ 774 $ 341
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.
++++++Dividends per share have been adjusted to reflect a two-for-
one stock split that occurred on December 1, 1994.
+++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. These unaudited financial statements
reflect all adjustments which are, in the opinion of management,
necessary to a fair statement of the results for the interim period
presented. All such adjustments are of a normal recurring nature.
The Fund determines and makes available for publication the net
asset value of its Common Stock on a weekly basis. The Fund's Common
Stock is listed on the New York Stock Exchange under the symbol 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 markets and are valued at the most recent
bid price or yield equivalent as obtained by the Fund's pricing
service from dealers that make markets in such securities. Financial
futures contracts and options thereon, which are traded on
exchanges, are valued at their closing prices as of the close of
such exchanges. Options, which are traded on exchanges, are valued
at their last sale price as of the close of such exchanges or,
lacking any sales, at the last available bid price. Securities with
remaining maturities of sixty days or less are valued at amortized
cost, which approximates market value. Securities and assets for
which market quotations are not readily available are valued at fair
value as determined in good faith by or under the direction of the
Board of Directors of the Fund, including valuations furnished by a
pricing service retained by the Fund, which may utilize a matrix
system for valuations. The procedures of the pricing service and its
valuations are reviewed by the officers of the Fund under the
general supervision of the Board of Directors.
(b) Derivative financial instruments -- The Fund may engage in
various portfolio strategies to seek to increase its return by
hedging its portfolio against adverse movements in the debt markets.
Losses may arise due to changes in the value of the contract or if
the counterparty does not perform under the contract.
* Financial futures contracts -- The Fund may purchase or sell
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.
<PAGE>
* Options -- The Fund is authorized to write covered call options and
purchase put options. When the Fund writes an option, an amount
equal to the premium received by the Fund is reflected as an asset
and an equivalent liability. The amount of the liability is
subsequently marked to market to reflect the current market value of
the option written. When a security is purchased or sold through an
exercise of an option, the related premium paid (or received) is
added to (or deducted from) the basis of the security acquired or
deducted from (or added to) the proceeds of the security sold. When
an option expires (or the Fund enters into a closing transaction),
the Fund realizes a gain or loss on the option to the extent of the
premiums received or paid (or gain or loss to the extent the cost of
the closing transaction exceeds the premium paid or received).
Written and purchased options are non-income producing investments.
(c) Income taxes -- It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute substantially all of its
taxable income to its shareholders. Therefore, no Federal income tax
provision is required.
(d) Security transactions and investment
income -- Security transactions are recorded on the dates the
transactions are entered into (the trade dates). Interest income is
recognized on the accrual basis. Discounts and market premiums are
amortized into interest income. Realized gains and losses on
security transactions are determined on the identified cost basis.
(e) Deferred organization expenses -- Deferred organization expenses
are amortized on a straight-line basis over a five-year period.
(f) Dividends and distributions -- Dividends from net investment
income are declared and paid monthly. Distributions of capital gains
are recorded on the ex-dividend dates.
2. Investment Advisory Agreement and
Transactions with Affiliates:
The Fund has entered into an Investment Advisory Agreement with Fund
Asset Management, L.P. ("FAM"). The general partner of FAM is
Princeton Services, Inc. ("PSI"), an indirect wholly-owned
subsidiary of Merrill Lynch & Co., Inc. ("ML & Co."), which is the
limited partner.
<PAGE>
FAM is responsible for the management of the Fund's portfolio and
provides the necessary personnel, facilities, equipment and certain
other services necessary to the operations of the Fund. For such
services, the Fund pays a monthly fee at an annual rate of 0.50% of
the Fund's average weekly net assets.
Accounting services are provided to the Fund by FAM at cost.
Certain officers and/or directors of the Fund are officers and/or
directors of FAM, PSI, Merrill Lynch, Pierce, Fenner & Smith Inc.
("MLPF&S"), and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the six months ended May 31, 1996 were $ 63,265,373 and
$67,565,968, respectively.
Net realized and unrealized gains (losses) as of May 31, 1996 were
as follows:
Realized Unrealized
Gains (Losses) Gains
Long-term investments $233,612 $7,908,057
Financial futures contracts (77,028) --
-------- ----------
Total $156,584 $7,908,057
======== ==========
As of May 31, 1996, net unrealized appreciation for Federal income
tax purposes aggregated $7,908,057, of which $9,059,048 related to
appreciated securities and $1,150,991 related to depreciated
securities. The aggregate cost of investments at May 31, 1996 for
Federal income tax purposes was $179,738,405.
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 holders of Common Stock.
Common Stock
For the six months ended May 31, 1996, shares issued and outstanding
remained constant at 8,829,651. At May 31, 1996, 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 May 31, 1996 was 2.50%.
<PAGE>
As of May 31, 1996, there were 2,400 AMPS shares authorized, issued
and outstanding 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 six months ended
May 31, 1996, MLPF&S, an affiliate of FAM, earned $57,385 as
commissions.
5. Capital Loss Carryforward:
At November 30, 1995, the Fund had a net capital loss carryforward
of approximately $1,344,000, all of which expires in 2002. This
amount will be available to offset like amounts of any future
taxable gains.
6. Subsequent Event:
On June 7, 1996, the Fund's Board of Directors declared an ordinary
income dividend to Common Stock shareholders in the amount of
$0.077343 per share, payable on June 27, 1996 to shareholders of
record as of June 18, 1996.
