MUNIYIELD
NEW JERSEY
FUND, INC.
[FUND LOGO]
STRATEGIC
Performance
Semi-Annual Report
May 31, 1997
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
Gerald M. Richard, Treasurer
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 #16381 -- 5/97
MuniYield New Jersey Fund, Inc.
TO OUR SHAREHOLDERS
For the six-month period ended May 31, 1997, the Common Stock of
MuniYield New Jersey Fund, Inc. earned $0.449 per share income
dividends, which included earned and unpaid dividends of $0.069. This
represents a net annualized yield of 5.93%, based on a per share net
asset value of $15.19 as of May 31, 1997. Over the same period, the
total investment return on the Fund's Common Stock was +1.29%, based on
a change in per share net asset value from $15.46 to $15.19, and
assuming reinvestment of $0.453 per share income dividends.
For the six months ended May 31, 1997, the average yield on the Fund's
Auction Market Preferred Stock was 3.31%.
The Municipal Market Environment
Long-term municipal bond yields rose slightly during the six months
ended May 31, 1997. However, both taxable and tax-exempt bond yields
exhibited considerable volatility during the six-month period. By mid-
January 1997, municipal bonds yields had risen over 20 basis points
(0.20%) to over 6% as investors reacted negatively to reports of
progressively stronger domestic economic growth. However, a continued
lack of any material inflationary pressures allowed bond yields to
decline to their prior levels by late February. Bond yields rose again
as investors became increasingly concerned that the US domestic economic
strength seen thus far in 1997 would continue and that the increase in
short-term interest rates administered by the Federal Reserve Board
(FRB) in late March would be the first in a series of such moves
designed to slow the US economy before any dormant inflationary
pressures were awakened. Long-term tax-exempt bond yields rose approxi-
mately 35 basis points to almost 6.15% by mid-April. Similarly, long-
term US Treasury bond yields rose over 55 basis points over the same
period to 7.16%. However, in late April economic indicators were
released showing that, despite considerable economic growth, any
inflationary pressures, particularly those associated with wage
increases, were well-contained and of no immediate concern. Fixed-income
bond prices staged a significant rally for the remainder of the six-
month period ended May 31, 1997 with long-term US Treasury bond yields
falling nearly 25 basis points to end the month at 6.90%. Municipal bond
yields, as measured by the Bond Buyer Revenue Bond Index, declined over
20 basis points to stand at 6.01% by May 31, 1997.
As in recent quarters, the relative stability of long-term tax-exempt
bond yields was supported by low levels of new municipal bond issuance.
Over the past six months, approximately $90 billion in long-term tax-
exempt bonds was underwritten, a decline of more than 3% versus the
corresponding period a year earlier. During the last three months, $45
billion in new long-term municipal bonds was issued, a 5% decline in
issuance as compared to the three months ended May 31, 1996. Overall
investor demand has remained strong, particularly from property and
casualty insurance companies and individual retail investors. In recent
years, investor demand has increased whenever tax-exempt bond yields
have approached or exceeded the 6% level as they have in the past few
months. Additionally, during the coming June and July, municipal bond
market investors are expected to receive over $50 billion in payment
from tax-exempt bond maturities, coupon payments, and the proceeds from
advance and current refundings. It is likely that, despite the continued
allure of the US equity market, much of the assets will be reinvested in
tax-advantaged products suggesting that investor demand will remain
strong in the coming months.
Additionally, in recent months much of the new bond issuance was
dominated by a number of larger issues. These included $710 million in
New York City water bonds, $600 million in state of California bonds, $1
billion in New York City general obligation bonds, $435 million in Dade
County, Florida water and sewer revenue bonds, $450 million in Puerto
Rico Electric Authority issues, and $930 million in Port Authority of
New York and New Jersey issues. These bonds have typically been issued
in states with relatively high state income taxes and consequently
generally were underwritten at yields that were relatively unattractive
to residents in other states. This has exacerbated the general decline
in overall issuance in recent years, making the decrease in supply even
more dramatic for general market investors.
The present economic situation remains nearly ideal. The domestic
economy continues to grow steadily with little, if any, sign of a
resurgence in inflation. Recent economic growth generated considerable
unexpected tax revenues for the Federal government. Forecasts for the
1997 Federal fiscal deficit were reduced to under $100 billion, a level
not seen since the early 1980s. Such a reduced Federal deficit enhances
the prospect for a balanced Federal budget. All of these factors support
a scenario of steady, or even falling, interest rates in the coming
years. Present annual estimates of future municipal bond issuance remain
centered around $175 billion, indicating that the current relative
scarcity of tax-exempt bonds should continue for at least the remainder
of the year. Should interest rates begin to decline later this year,
either as the result of a balanced Federal budget or continued benign
inflation, investors are unlikely to be able to purchase long-term
municipal bonds at their currently attractive levels.
Portfolio Strategy
During the six months ended May 31, 1997, we generally maintained a
cautious approach toward the fixed-income market since powerful economic
growth was effectively neutralized by tame inflation reports. However,
this strong growth/low inflation scenario may have ended in late March
as the FRB decided to strike preemptively against a future rise in
inflation by tightening monetary policy.
Historically, once the FRB chooses to see economic growth slow down, it
is reasonable to expect several additional increases in short-term
interest rates over the following six months - twelve months. This is
referred to as a tightening cycle, and long-term interest rates
typically rise along with short-term interest rates until economic
growth falters. Although taxable yields could rise from the current
level of 6.90% during the tightening cycle, we expect the impact on
municipal bond yields to be muted in response to the combination of
scarce New Jersey supply and increasing retail investor demand as
municipal bonds yield 6% or higher.
The Fund is currently well-positioned for such a turn of events as a
substantial portion of its holdings are in bonds which traditionally
appeal to individual or retail investors and therefore are likely to
outperform other issues in a declining market. As long-term tax-exempt
interest rates rise toward 6%, we are prepared to swap these retail
bonds for aggressively structured and higher-yielding securities. This
will allow us to more fully participate in the bond market rally we
expect later in the year should economic growth finally begin to falter
as a result of tighter monetary policy. We would expect the Fund to
benefit from a sharp drop in interest rates as many of the portfolio's
higher-coupon bonds can be advance refunded, providing a boost to the
Fund's total return.
Sincerely,
/S/ARTHUR ZEIKEL
Arthur Zeikel
President
/S/VINCENT R. GIORDANO
Vincent R. Giordano
Senior Vice President
/S/THEODORE R. JAECKEL JR.
Theodore R. Jaeckel Jr.
Portfolio Manager
June 26, 1997
We are pleased to announce that, as of June 3, 1997, Theodore R. Jaeckel
Jr. is responsible for the day-to-day management of MuniYield New Jersey
Fund, Inc. Mr. Jaeckel has been employed by Merrill Lynch Asset
Management, L.P. (an affiliate of the Fund's investment adviser) since
1991 as Vice President and Portfolio Manager.
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.
In this case, the dividends paid to Preferred Stock shareholders are
significantly lower than the income earned on the fund's long-term
investments, and therefore the Common Stock shareholders are the
beneficiaries of the incremental yield. However, if short-term interest
rates rise, narrowing the differential between short-term and long-term
interest rates, the incremental yield pickup on the Common Stock will be
reduced or eliminated completely. At the same time, the market value of
the fund's Common Stock (that is, its price as listed on the New York
Stock Exchange) may, as a result, decline. Furthermore, if long-term
interest rates rise, the Common Stock's net asset value will reflect the
full decline in the price of the portfolio's investments, since the
value of the fund's Preferred Stock does not fluctuate. In addition to
the decline in net asset value, the market value of the fund's Common
Stock may also decline.
<TABLE>
<CAPTION>
MuniYield New Jersey Fund, Inc. May 31, 1997
SCHEDULE OF INVESTMENTS (in Thousands)
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
<S> <C> <C> <C> <C>
New Jersey -- 95.7%
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) $2,237
AAA Aaa 5,000 Casino Reinvestment Development Authority, New Jersey, Parking Fee
Revenue Bonds, Series A, 5.25% due 10/01/2015 (f) 4,834
AAA Aaa 1,000 Highland Park, New Jersey, School District, GO, UT, 6.55% due
2/15/2005 (b)(g) 1,123
AAA Aaa 4,880 Hudson County, New Jersey, COP, Refunding (Correctional Facilities),
6.60% due 12/01/2021 (b) 5,263
AA A3 3,200 Jersey City, New Jersey, School, GO, Refunding, UT, 6.65% due
2/15/2002 (g) 3,521
NR* Aa2 3,500 Mercer County, New Jersey, Improvement Authority Revenue Bonds
(County Courthouse Project), 6.60% due 11/01/2000 (g) 3,794
NR* VMIG1+ 200 Monmouth County, New Jersey, Improvement Authority Revenue Bonds
(Pooled Government Loan Program), ACES, 3.75% due 8/01/2016 (a) 200
AAA Aaa 5,000 New Jersey EDA, Natural Gas Facilities Revenue Refunding Bonds
(NUI Corp.), Series A, 6.35% due 10/01/2022 (e) 5,318
AAA Aaa 4,000 New Jersey EDA, Revenue Bonds (Clara Maass Health Systems), 5% due
7/01/2025 (f) 3,678
AAA Aaa 2,500 New Jersey EDA, Revenue Refunding Bonds (RJW Health Care Corporation),
6.50% due 7/01/2024 (f) 2,690
NR* Aa1 10,750 New Jersey EDA, Solid Waste Disposal Facilities Revenue Bonds
(Garden State Paper Company), AMT, 7.125% due 4/01/2022 11,540
New Jersey EDA, Water Facilities Revenue Bonds, AMT:
AAA Aaa 2,000 (American Water Company Inc. Project), 6% due 5/01/2036 (c) 2,033
A1 Aaa 1,200 (United Water of New Jersey, Inc. Project), VRDN, Series A,
3.70% due 11/01/2026 (a)(e) 1,200
New Jersey Health Care Facilities Financing Authority Revenue Bonds:
A- A3 6,060 Refunding (Atlantic City Medical Center), Series C, 6.80% due 7/01/2011 6,494
AAA Aaa 2,000 Refunding (Hackensack Medical Center), 6.625% due 7/01/2011 (c) 2,151
BBB+ NR* 3,500 Refunding (Holy Name Hospital), 6% due 7/01/2025 3,497
BBB Baa2 3,300 Refunding (Saint Elizabeth Hospital Obligation Group), 6% due 7/01/2020 3,315
AAA Aaa 1,570 Refunding (Shoreline Behavioral Health Center), 5.50% due 7/01/2017 (b) 1,553
AAA Aaa 3,875 (Saint Elizabeth Hospital), Series B, 8.25% due 7/01/2000 (g) 4,334
A+ Aa 7,820 New Jersey Sports and Exposition Authority Revenue Bonds (State
Contract), Series A, 6.50% due 3/01/2019 8,341
New Jersey State Educational Facilities Authority Revenue Bonds:
BBB+ NR* 6,250 Higher Education (Drew University), Series E, 6.25% due 7/01/2017 6,400
NR* Aaa 5,435 Higher Education (Princeton University), Series C, 6.375% due 7/01/2022 5,798
BBB+ Baa2 3,355 Higher Education (Saint Peter's College), Series B, 6.80% due 7/01/2008 3,639
BBB+ Baa2 3,600 Higher Education (Saint Peter's College), Series B, 6.85% due 7/01/2012 3,913
A- Baa1 6,030 (Stevens Institute of Technology), Series A, 6.80% due 7/01/2008 6,554
New Jersey State, GO:
AA+ NR* 3,000 6.75% due 9/15/2001 (g) 3,289
AA+ Aa1 2,105 AMT, 7.05% due 7/15/2015 2,382
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) 4,247
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) 2,700
AAA Aaa 2,000 New Jersey State Transportation Corporation, COP (Raymond Plaza East,
Incorporated), 6.50% due 10/01/2016 (f) 2,165
New Jersey State Transportation Trust Fund Authority Revenue Bonds
(Transportation System), Series A (b):
AAA Aaa 10,550 4.75% due 12/15/2016 9,562
AAA Aaa 2,000 Refunding, 5% due 6/15/2015 1,893
North Brunswick Township, New Jersey, GO, UT:
NR* A1 1,190 6.50% due 5/15/2012 1,288
NR* A1 1,400 6.50% due 5/15/2013 1,515
AAA Aaa 8,250 North Hudson, New Jersey, Sewer Authority Revenue Bonds, 5.125% due
8/01/2022 (c) 7,787
AAA Aaa 2,010 North Jersey District Water Supply Commission, New Jersey, Revenue
Refunding Bonds (Wanaque North Project), Series B, 6.50% due 11/15/2011
(b) 2,176
AAA Aaa 6,230 Passaic Valley, New Jersey, Water Commission, Water Supply Revenue Bonds,
Series A, 6.40% due 12/15/2002 (c)(g) 6,866
Port Authority of New York and New Jersey, Consolidated Revenue Bonds:
AA- A1 2,465 67th Series, 6.90% due 7/01/2011 2,620
AA- A1 1,000 69th Series, 7.125% due 6/01/2025 1,077
AA- A1 9,500 72nd Series, 7.35% due 10/01/2002 (g) 10,793
AAA Aaa 4,325 Port Authority of New York and New Jersey, RITR, 108th Series, AMT,
7.385% due 1/15/2017 (f)(h) 4,487
AAA Aaa 6,230 Port Authority of New York and New Jersey, Special Obligation Revenue
Bonds (JFK International Air Terminal Project), AMT, Series 6, 4th
Installment, 5.75% due 12/01/2025 (b) 6,170
Port Authority of New York and New Jersey, Special Obligation Revenue
Bonds (Versatile Structure Obligation), VRDN (a):
A1+ VMIG1+ 2,400 Series 3, 4.05% due 6/01/2020 2,400
A1+ VMIG1+ 2,200 Series 4, 4.10% due 4/01/2024 2,200
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 2,437
AA+ Aaa 760 Union County, New Jersey, Improvement Authority, Revenue Refunding
Bonds (County Guaranteed Lease), 5.30% due 11/15/2006 784
AA- A3 3,100 University of Medicine and Dentistry, New Jersey, Revenue Bonds, Series
E, 6.50% due 12/01/2001 (g) 3,392
Puerto Rico -- 5.1%
A Baa1 1,000 Puerto Rico Commonwealth, Highway and Transportation Authority, Highway
Revenue Bonds, Series Y, 5.50% due 7/01/2026 965
BBB+ Aaa 5,000 Puerto Rico Electric Power Authority, Power Revenue Bonds, Series P, 7%
due 7/01/2001 (g) 5,559
AAA Aaa 3,610 University of Puerto Rico Revenue Bonds, Series M, 5.25% due 6/01/2025 (b) 3,447
Total Investments (Cost -- $184,989) -- 100.8% 195,621
Liabilities in Excess of Other Assets -- (0.8%) (1,530)
---------
Net Assets -- 100.0% $194,091
=========
(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, 1997.
(b) MBIA Insured.
(c) FGIC Insured.
(d) FHA Insured.
(e) AMBAC Insured.
(f) FSA Insured.
(g) Prerefunded.
(h) The interest rate is subject to change periodically and inversely based upon prevailing market rates.
The interest rate shown is the rate in effect at May 31, 1997.
* Not Rated.
+ Highest short-term rating by Moody's Investors Service, Inc.
See Notes to Financial Statements.
</TABLE>
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 below and at right.
ACES SM Adjustable Convertible Extendable Securities
AMT Alternative Minimum Tax (subject to)
COP Certificates of Participation
EDA Economic Development Authority
GO General Obligation Bonds
M/F Multi-Family
RITR Residual Interest Trust Receipts
UT Unlimited Tax
VRDN Variable Rate Demand Notes
<TABLE>
<CAPTION>
FINANCIAL INFORMATION
Statement of Assets, Liabilities and Capital as of May 31, 1997
<S> <C> <C> <C>
Assets: Investments, at value (identified cost -- $184,989,403) (Note 1a) $195,621,400
Cash 66,081
Interest receivable 3,535,902
Deferred organization expenses (Note 1e) 2,674
Prepaid expenses and other assets 6,074
-------------
Total assets 199,232,131
-------------
Liabilities: Payables:
Securities purchased $4,801,329
Dividends to shareholders (Note 1f) 225,309
Investment adviser (Note 2) 84,718 5,111,356
-------------
Accrued expenses and other liabilities 29,371
-------------
Total liabilities 5,140,727
-------------
Net Assets: Net assets $194,091,404
=============
Capital: Capital Stock (200,000,000 shares authorized) (Note 4): Preferred Stock,
par value $.05 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 1,005,728
Accumulated realized capital losses on investments -- net (Note 5) (1,625,579)
Unrealized appreciation on investments -- net 10,631,997
-------------
Total -- Equivalent to $15.19 net asset value per share of Common Stock
(market price -- $15.00) 134,091,404
-------------
Total capital $194,091,404
=============
* Auction Market Preferred Stock.
See Notes to Financial Statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of Operations
For the Six Months Ended
May 31, 1997
<S> <C> <C> <C>
Investment Income Interest and amortization of premium and discount earned $5,708,035
(Note 1d):
Expenses: Investment advisory fees (Note 2) $483,054
Commission fees (Note 4) 78,167
Professional fees 39,920
Accounting services (Note 2) 29,861
Transfer agent fees 22,784
Directors' fees and expenses 11,774
Listing fees 8,301
Printing and shareholder reports 7,751
Custodian fees 7,504
Pricing fees 3,457
Amortization of organization expenses (Note 1e) 1,373
Other 8,666
-----------
Total expenses 702,612
-----------
Investment income -- net 5,005,423
-----------
Realized & Realized gain on investments -- net 880,655
Unrealized Change in unrealized appreciation on investments -- net (3,283,503)
Gain (Loss) on -----------
Investments -- Net Net Increase in Net Assets Resulting from Operations $2,602,575
(Notes 1b, 1d & 3): ===========
See Notes to Financial Statements.
</TABLE>
<TABLE>
<CAPTION>
Statements of Changes in Net Assets
For the Six For the
Months Ended Year Ended
May 31, November 30,
Increase (Decrease) in Net Assets: 1997 1996
<S> <C> <C> <C>
Operations: Investment income -- net $5,005,423 $10,092,795
Realized gain (loss) on investments -- net 880,655 (330,513)
Change in unrealized appreciation on investments -- net (3,283,503) (568,391)
------------ ------------
Net increase in net assets resulting from operations 2,602,575 9,193,891
------------ ------------
Dividends to Investment income -- net:
Shareholders Common Stock (4,003,867) (8,056,059)
(Note 1f): Preferred Stock (990,384) (2,009,280)
------------ ------------
Net decrease in net assets resulting from dividends to shareholders (4,994,251) (10,065,339)
------------ ------------
Net Assets: Total decrease in net assets (2,391,676) (871,448)
Beginning of period 196,483,080 197,354,528
------------ ------------
End of period* $194,091,404 $196,483,080
============ ============
* Undistributed investment income -- net $1,005,728 $994,556
============ ============
See Notes to Financial Statements
</TABLE>
<TABLE>
<CAPTION>
Financial Highlights
For the
Six Months
The following per share data and ratios have been derived Ended For the Year Ended
from information provided in the financial statements. May 31, November 30,
1997 1996 1995 1994 1993
Increase (Decrease) in Net Asset Value:
<S> <C> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $15.46 $15.56 $13.22 $15.88 $14.40
Operating ---------- ---------- ---------- ---------- ---------
Performance: Investment income -- net .56 1.14 1.17 1.15 1.17
Realized and unrealized gain (loss) on
investments -- net (.27) (.10) 2.33 (2.67) 1.49
---------- ---------- ---------- ---------- ---------
Total from investment operations .29 1.04 3.50 (1.52) 2.66
---------- ---------- ---------- ---------- ---------
Less dividends and distributions to Common
Stock shareholders:
Investment income -- net (.45) (.91) (.90) (.93) (.96)
Realized gain on investments -- net -- -- -- (.01) (.01)
---------- ---------- ---------- ---------- ---------
Total dividends and distributions to Common
Stock shareholders (.45) (.91) (.90) (.94) (.97)
---------- ---------- ---------- ---------- ---------
Effect of Preferred Stock activity:
Dividends to Preferred Stock shareholders:
Investment income -- net (.11) (.23) (.26) (.20) (.21)
---------- ---------- ---------- ---------- ---------
Net asset value, end of period $15.19 $15.46 $15.56 $13.22 $15.88
========== ========== ========== ========== =========
Market price per share, end of period $15.00 $14.50 $13.75 $12.125 $15.625
========== ========== ========== ========== =========
Total Investment Based on market price per share 6.64%++ 12.34% 21.26% (16.87%) 11.78%
Return:** ========== ========== ========== ========== =========
Based on net asset value per share 1.29%++ 5.84% 25.85% (10.82%) 17.35%
========== ========== ========== ========== =========
Ratios to Average Expenses .73%* .72% .73% .74% .69%
Net Assets:*** ========== ========== ========== ========== =========
Investment income -- net 5.18%* 5.18% 5.40% 5.30% 5.26%
========== ========== ========== ========== =========
Supplemental Net assets, net of Preferred Stock, end
Data: of period (in thousands) $134,091 $136,483 $137,355 $116,746 $140,214
========== ========== ========== ========== =========
Preferred Stock outstanding, end of period
(in thousands) $60,000 $60,000 $60,000 $60,000 $60,000
========== ========== ========== ========== =========
Portfolio turnover 19.56% 49.76% 32.79% 15.06% 5.14%
========== ========== ========== ========== =========
Leverage: Asset coverage per $1,000 $3,235 $3,275 $3,289 $2,946 $3,337
========== ========== ========== ========== =========
Dividends Per Investment income -- net $413 $837 $938 $741 $774
Share on Preferred ========== ========== ========== ========== =========
Stock Outstanding:+
* 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.
+ Dividends 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>
MuniYield New Jersey Fund, Inc. May 31, 1997
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.
(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.
[bullet] 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.
[bullet] 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.
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, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities, for
the six months ended May 31, 1997 were $37,252,655 and $38,485,328,
respectively.
Net realized and unrealized gains as of May 31, 1997 were as follows:
Realized Unrealized
Gains Gains
Long-term investments $880,655 $10,631,997
--------- ------------
Total $880,655 $10,631,997
========= ============
As of May 31, 1997, net unrealized appreciation for Federal income tax
purposes aggregated $10,631,997, all of which related to appreciated
securities. The aggregate cost of investments at May 31, 1997 for
Federal income tax purposes was $184,989,403.
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 was
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, 1997, shares issued and outstanding
remained constant at 8,829,651. At May 31, 1997, 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, 1997 was 2.75%.
As of May 31, 1997, 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 brokerdealers 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, 1997,
Merrill Lynch, Pierce, Fenner & Smith Inc., an affiliate of FAM, earned
$12,080 as commissions.
5. Capital Loss Carryforward:
At November 30, 1996, the Fund had a net capital loss carryforward of
approximately $972,000, 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 9, 1997, the Fund's Board of Directors declared an ordinary
income dividend to Common Stock shareholders in the amount of $.079281
per share, payable on June 27, 1997 to shareholders of record as of June
19, 1997.
