MUNIYIELD
NEW JERSEY
FUND, INC.
FUND LOGO
Annual Report
November 30, 1996
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.
<PAGE>
MuniYield
New Jersey
Fund, Inc.
Box 9011
Princeton, NJ
08543-9011
MuniYield New Jersey Fund, Inc.
TO OUR SHAREHOLDERS
For the year ended November 30, 1996, the Common Stock of MuniYield
New Jersey Fund, Inc. earned $0.914 per share income dividends,
which included earned and unpaid dividends of $0.074. This
represents a net annualized yield of 5.91%, based on a month-end net
asset value of $15.46 per share. Over the same period, total
investment return on the Fund's Common Stock was +5.84%, based on a
change in per share net asset value from $15.56 to $15.46, and
assuming reinvestment of $0.912 per share income dividends.
<PAGE>
For the six-month period ended November 30, 1996, total investment
return on the Fund's Common Stock was +7.58%, based on a change in
per share net asset value from $14.83 to $15.46, and assuming
reinvestment of $0.454 per share income dividends.
For the six months ended November 30, 1996, the average yield on the
Fund's Auction Market Preferred Stock was 3.20%.
The Municipal Market Environment
Municipal bond yields generally moved lower during the six months
ended November 30, 1996. Long-term tax-exempt revenue bond yields,
as measured by the Bond Buyer Revenue Bond Index, declined
approximately 35 basis points (0.35%) to close the six-month period
ended November 30, 1996 at approximately 5.80%. The municipal bond
market exhibited considerable weekly yield volatility over the last
six months with bond yields vacillating as much as 20 basis points.
This ongoing volatility was in response to fluctuating evidence
regarding the degree to which recent economic growth would result in
any significant increase in inflationary pressures. Much of the
evidence supporting stronger growth centered around the strong
employment growth seen in April and June with bond yields rising in
response. Other, more recent, economic indicators suggested that
economic growth will not be excessive and inflationary pressures
will remain well-contained. This continued benign inflationary
environment supported lower tax-exempt bond yields in recent months.
US Treasury bond yields have exhibited similar, albeit greater,
volatility during the six-month period ended November 30, 1996,
falling more than 60 basis points to end the period at 6.35%.
Much of the tax-exempt bond market's strong technical position, one
of the primary reasons for the improvement in municipal bond yields
seen throughout 1996, remained intact. Over the last year,
approximately $180 billion in long-term municipal securities was
issued, an increase of approximately 20% versus the same period a
year ago. Much of this increase was the result of issuers seeking to
refinance their existing higher-couponed debt as interest rates
declined in 1995 and early 1996. As interest rates rose, these
financings became increasingly economically impractical and issuance
declined. Over the last six months, approximately $80 billion in
long-term tax-exempt securities was underwritten, essentially
unchanged versus the comparable period a year earlier. Only $43
billion in tax-exempt securities was issued in the last three
months, also unchanged versus the November 30, 1995 quarter.
The municipal bond market's recent underperformance relative to
Treasury issues was the result of a number of other factors. Among
other things, as tax-exempt bond yields declined below 6%, in the
past some investors temporarily have lost interest in the municipal
bond market. As interest rates continue to decline, as they did in
1994, investors quickly adjust to the new levels. The inherent
attractiveness of the tax-advantaged products quickly outweighs low
nominal yields and investor demand increases.
<PAGE>
Finally, the Presidential and Congressional elections earlier this
month resurrected some investor concerns regarding continued Federal
deficit reduction and potential legislative restrictions upon the
municipal bond market. This situation was similar to that at the
beginning of 1996 when tax-exempt bond yields were negatively
impacted by fears that legislation reducing the tax advantage of
municipal bonds would be introduced to aid further deficit
reductions. Also, earlier fears that the Democratic party could
regain control of both houses of Congress, as well as maintain the
White House, may have caused some investors to delay any asset
allocations into the municipal bond market until after the
elections.
Currently, the future direction of interest rates remains unclear.
The Federal Reserve Board's decision to hold interest rates steady
in late September temporarily relieved mounting fears of rising
interest rates for the remainder of 1996. Should economic growth
slow further in upcoming months, as expected by the Federal Reserve
Board, and inflation remain well-contained, interest rates are
poised to decline further. Under such a scenario, municipal bond
yields are also likely to decline.
Portfolio Strategy
During the 12 months ended November 30, 1996, the municipal bond
market was extremely volatile. As measured by the Bond Buyer Revenue
Bond Index, long-term tax-exempt bond yields ranged from a low of
5.63% on January 4, 1996 to a high of 6.34% on June 13, 1996. At
year-end November 30, 1996, the Index was roughly back to the levels
at which we began the period, having retraced the losses associated
with a surge in economic growth during the first six months of the
calendar year. The change in direction of long-term interest rates
occurred as a result of the slower economic pace exhibited during
the third quarter of 1996. The change of pace led investors to alter
the consensus view of future monetary policy from that of a
tightening to no change. Since August, prices of long-term fixed-
income securities have risen modestly while short-term securities
have reacted more dramatically.
For the 12 months ended November 30, 1996, we sought to emphasize
tax-exempt income for shareholders without sacrificing the strong
credit quality characteristics of the portfolio. We ended the prior
year constructive on the interest rate environment and extended the
duration of the portfolio by purchasing securities which we believed
could enhance total return to shareholders in a period of declining
interest rates. However, strong job growth led an economic revival
from February through July which forced a major change in investor
psychology. We shifted the portfolio to a more defensive posture in
an effort to seek to protect the Fund's net asset value as yields on
long-term municipal bonds surged approximately 0.75% between January
and mid-June. Since peaking in June, interest rates have declined
somewhat as the economy has shown early signs of cooling, and we
shifted the Fund to a more neutral posture once again. By remaining
fully invested, we were able to provide an attractive dividend while
limiting interest rate risk during this period.
<PAGE>
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
(Vincent R. Giordano)
Vincent R. Giordano
Senior Vice President
(William M. Petty)
William M. Petty
Vice President and Portfolio Manager
January 2, 1996
<PAGE>
PROXY RESULTS
During the six-month period ended November 30, 1996, MuniYield New
Jersey Fund, Inc. Common Stock shareholders voted on the following
proposals. The proposals were approved at a special shareholders'
meeting on September 19, 1996. The description of each proposal and
number of shares voted are as follows:
<TABLE>
<CAPTION>
Shares Shares Voted
Voted For Without Authority
<S> <S> <C> <C>
1. To elect the Fund's Board of Directors: James H. Bodurtha 8,501,533 168,957
Herbert I. London 8,501,264 169,226
Robert R. Martin 8,501,218 169,272
Arthur Zeikel 8,500,170 170,320
<CAPTION>
Shares Shares Voted Shares Voted
Voted For Against Abstain
<S> <C> <C> <C>
2. To ratify the selection of Deloitte
& Touche LLP as the Fund's independent
auditors for the current fiscal year. 8,442,470 97,083 130,937
</TABLE>
During the six-month period ended November 30, 1996, MuniYield New
Jersey Fund, Inc. Preferred Stock shareholders voted on the
following proposals. The proposals were approved at the annual
special shareholders' meeting on September 19, 1996. The description
of each proposal and number of shares voted are as follows:
<TABLE>
<CAPTION>
Shares Shares Voted
Voted For Without Authority
<S> <S> <C> <C>
1. To elect the Fund's Board of Directors: James H. Bodurtha 2,249 0
Herbert I. London 2,249 0
Robert R. Martin 2,249 0
Joseph L. May 2,249 0
Andre F. Perold 2,249 0
Arthur Zeikel 2,249 0
<PAGE>
<CAPTION>
Shares Shares Voted Shares Voted
Voted For Against Abstain
<S> <C> <C> <C>
2. To ratify the selection of Deloitte
& Touche LLP as the Fund's independent
auditors for the current fiscal year. 2,249 0 0
</TABLE>
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.
<PAGE>
PORTFOLIO ABBREVIATIONS
To simplify the listings of MuniYield New Jersey Fund, Inc.'s
portfolio holdings in the Schedule of Investments, we have
abbreviated the names of many of the securities according to the
list at right.
AMT Alternative Minimum Tax (subject to)
COP Certificates of Participation
EDA Economic Development Authority
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)
New Jersey--89.3%
<S> <S> <C> <S> <C>
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) $ 2,332
AAA Aaa 1,000 Highland Park, New Jersey, School District, GO, UT, 6.55% due 2/15/2021 (b) 1,116
AAA Aaa 7,880 Hudson County, New Jersey, COP, Refunding (Correctional Facilities), 6.60%
due 12/01/2021 (b) 8,650
AA A 3,200 Jersey City, New Jersey, School, GO, Refunding, UT, 6.65% due 2/15/2002 (g) 3,577
NR* Aa1 3,500 Mercer County, New Jersey, Improvement Authority Revenue Bonds (County
Courthouse Project), 6.60% due 11/01/2000 (g) 3,848
NR* VMIG1++ 300 New Jersey EDA, Dock Facility Revenue Refunding Bonds (Bayonne/IMTT Project),
VRDN, Series A, 4.05% due 12/01/2027 (a) 300
<PAGE>
New Jersey EDA, Natural Gas Facilities Revenue Refunding Bonds, Series A (e):
A1+ VMIG1++ 200 (New Jersey Natural Gas Co.), VRDN, 3.85% due 8/01/2030 (a) 200
AAA Aaa 5,000 (NUI Corp.), 6.35% due 10/01/2022 5,436
AAA Aaa 4,000 New Jersey EDA, Revenue Bonds (Clara Maass Health Systems), 5% due 7/01/2025 (f) 3,774
AAA Aaa 2,500 New Jersey EDA, Revenue Refunding Bonds (RWJ Health Care Corporation), 6.50%
due 7/01/2024 (f) 2,752
NR* Aa1 10,750 New Jersey EDA, Solid Waste Disposal Facilities Revenue Bonds (Garden State
Paper Company), AMT, 7.125% due 4/01/2022 11,566
AAA Aaa 2,000 New Jersey EDA, Water Facilities Revenue Bonds (American Water Company Inc.
Project), AMT, 6% due 5/01/2036 (c) 2,072
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 6,573
AAA Aaa 2,000 Refunding (Hackensack Medical Center), 6.625% due 7/01/2011 (c) 2,184
BBB- Baa 3,875 (Saint Elizabeth Hospital), Series B, 8.25% due 7/01/2020 4,308
</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 Sports and Exposition Authority Revenue Bonds (State Contract):
A+ Aa $ 7,820 Series A, 6.50% due 3/01/2019 $ 8,371
A1+ VMIG1++ 1,100 VRDN, Series C, 3.15% due 9/01/2024 (a)(b) 1,100
New Jersey State Educational Facilities Authority Revenue Bonds:
BBB+ NR* 6,250 Higher Education (Drew University), Series E, 6.25% due 7/01/2017 6,475
AA+ Aaa 5,435 Higher Education (Princeton University), Series C, 6.375% due 7/01/2022 5,847
BBB+ Baa 3,355 Higher Education (Saint Peter's College), Series B, 6.80% due 7/01/2008 3,690
BBB+ Baa 3,600 Higher Education (Saint Peter's College), Series B, 6.85% due 7/01/2012 3,974
AAA Aaa 1,500 (New Jersey Institute of Technology), Series 95-E, 5.375% due 7/01/2025 (b) 1,482
A- Baa1 6,030 (Stevens Institute of Technology), Series A, 6.80% due 7/01/2008 6,638
New Jersey State, GO:
AA+ NR* 3,000 6.75% due 9/15/2001 (g) 3,356
AA+ Aa1 2,105 AMT, 7.05% due 7/15/2015 2,420
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) 4,281
<PAGE>
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) 2,708
AAA Aaa 2,000 New Jersey State Transportation Corporation, COP (Raymond Plaza East,
Incorporated), 6.50% due 10/01/2016 (f) 2,218
AAA Aaa 10,550 New Jersey State Transportation Trust Fund Authority, GO (Transportation
System), Series A, 4.75% due 12/15/2016 (b) 9,741
BBB+ Baa1 7,000 New Jersey State Turnpike Authority, Turnpike Revenue Refunding Bonds,
Series A, 6.75% due 1/01/2008 7,500
North Brunswick Township, New Jersey, Revenue Bonds, UT:
NR* A1 1,190 6.50% due 5/15/2012 1,304
NR* A1 1,400 6.50% due 5/15/2013 1,534
AAA Aaa 8,250 North Hudson, New Jersey, Sewer Authority Revenue Bonds, 5.125% due
8/01/2022 (c) 7,925
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) 2,214
AAA Aaa 6,230 Passaic Valley, New Jersey, Water Commission, Water Supply Revenue Bonds,
Series A, 6.40% due 12/15/2002 (c)(g) 6,984
Port Authority of New York and New Jersey, Consolidated Revenue Bonds:
AA- A1 2,465 67th Series, 6.90% due 7/01/2011 2,648
AA- A1 1,000 69th Series, 7.125% due 6/01/2025 1,091
AA- A1 9,500 72nd Series, 7.35% due 10/01/2002 (g) 10,991
AAA Aaa 1,000 104th Series, 3rd Installment, 4.75% due 1/15/2026 (e) 901
</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>
Port Authority of New York and New Jersey, Special Obligation Revenue Bonds
(Versatile Structure Obligation), VRDN (a):
A1+ VMIG1++ $ 1,800 Series 2, 4.05% due 5/01/2019 $ 1,800
A1+ VMIG1++ 100 Series 3, 4.10% due 6/01/2020 100
A1+ VMIG1++ 700 Series 5, 4.10% due 8/01/2024 700
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 2,463
<PAGE>
Union County, New Jersey, Improvement Authority, Revenue Refunding Bonds
(County Guaranteed--Lease):
AA+ Aaa 615 4.90% due 11/15/2002 634
AA+ Aaa 650 5% due 11/15/2003 674
AA+ Aaa 725 5.20% due 11/15/2005 758
AA+ Aaa 760 5.30% due 11/15/2006 798
AA A3 3,100 University of Medicine and Dentistry, New Jersey, Revenue Bonds, Series E,
6.50% due 12/01/2001 (g) 3,456
Puerto Rico--8.9%
A Baa1 2,000 Puerto Rico Commonwealth, GO, 5.40% due 7/01/2025 1,927
A Baa1 10,200 Puerto Rico Commonwealth, Highway and Transportation Authority, Highway
Revenue Bonds, Series Y, 5.50% due 7/01/2026 9,952
BBB+ Aaa 5,000 Puerto Rico Electric Power Authority, Power Revenue Bonds, Series P, 7% due
7/01/2001 (g) 5,672
Total Investments (Cost--$179,099)--98.2% 193,015
Other Assets Less Liabilities--1.8% 3,468
--------
Net Assets--100.0% $196,483
========
<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 November 30, 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.
Ratings of issues shown have not been audited by Deloitte & Touche
LLP.
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION
<PAGE>
<TABLE>
Statement of Assets, Liabilities and Capital as of November 30, 1996
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$179,099,490) (Note 1a) $193,014,990
Cash 85,380
Interest receivable 3,790,472
Deferred organization expenses (Note 1e) 2,674
Prepaid expenses and other assets 5,974
------------
Total assets 196,899,490
------------
Liabilities: Payables:
Dividends to shareholders (Note 1f) $ 241,719
Investment adviser (Note 2) 82,576 324,295
------------
Accrued expenses and other liabilities 92,115
------------
Total liabilities 416,410
------------
Net Assets: Net assets $196,483,080
============
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 994,556
Accumulated realized capital losses on investments--net (Note 5) (2,506,234)
Unrealized appreciation on investments--net 13,915,500
------------
Total--Equivalent to $15.46 net asset value per share of
Common Stock (market price--$14.50) 136,483,080
------------
Total capital $196,483,080
============
<FN>
*Auction Market Preferred Stock.
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (continued)
<PAGE>
<TABLE>
Statement of Operations
<CAPTION>
For the Year Ended
November 30, 1996
<S> <S> <C> <C>
Investment Income Interest and amortization of premium and discount earned $ 11,504,979
(Note 1d):
Expenses: Investment advisory fees (Note 2) $ 971,972
Commission fees (Note 4) 154,718
Professional fees 75,861
Accounting services (Note 2) 55,212
Transfer agent fees 41,248
Printing and shareholder reports 23,690
Directors' fees and expenses 22,951
Listing fees 17,893
Custodian fees 16,376
Pricing fees 6,693
Amortization of organization expenses (Note 1e) 6,355
Other 19,215
------------
Total expenses 1,412,184
------------
Investment income--net 10,092,795
------------
Realized & Realized loss on investments--net (330,513)
Unrealized Change in unrealized appreciation on investments--net (568,391)
Loss on ------------
Investments--Net Net Increase in Net Assets Resulting from Operations $ 9,193,891
(Notes 1b, 1d & 3): ============
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (continued)
<TABLE>
Statements of Changes in Net Assets
<CAPTION>
For the Year Ended
November 30,
Increase (Decrease) in Net Assets: 1996 1995
<S> <S> <C> <C>
Operations: Investment income--net $ 10,092,795 $ 10,245,518
Realized loss on investments--net (330,513) (132,854)
Change in unrealized appreciation/depreciation on investments--net (568,391) 20,674,959
------------ ------------
Net increase in net assets resulting from operations 9,193,891 30,787,623
------------ ------------
<PAGE>
Dividends to Investment income--net:
Shareholders Common Stock (8,056,059) (7,926,660)
(Note 1f): Preferred Stock (2,009,280) (2,252,160)
------------ ------------
Net decrease in net assets resulting from dividends to
shareholders (10,065,339) (10,178,820)
------------ ------------
Net Assets: Total increase (decrease) in net assets (871,448) 20,608,803
Beginning of year 197,354,528 176,745,725
------------ ------------
End of year* $196,483,080 $197,354,528
============ ============
<FN>
*Undistributed investment income--net $ 994,556 $ 967,100
============ ============
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (concluded)
<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, 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 1.14 1.17 1.15 1.17 .62
Realized and unrealized gain (loss) on
investments--net. (.10) 2.33 (2.67) 1.49 .31
-------- -------- -------- -------- --------
Total from investment operations 1.04 3.50 (1.52) 2.66 .93
-------- -------- -------- -------- --------
Less dividends and distributions to Common
Stock shareholders:
Investment income--net (.91) (.90) (.93) (.96) (.44)
Realized gain on investments--net -- -- (.01) (.01) --
-------- -------- -------- -------- --------
Total dividends and distributions to Common
Stock shareholders (.91) (.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 (.23) (.26) (.20) (.21) (.10)
Capital charge resulting from issuance
of Preferred Stock -- -- -- -- (.14)
-------- -------- -------- -------- --------
Total effect of Preferred Stock activity (.23) (.26) (.20) (.21) (.24)
-------- -------- -------- -------- --------
Net asset value, end of period $ 15.46 $ 15.56 $ 13.22 $ 15.88 $ 14.40
======== ======== ======== ======== ========
Market price per share, end of period $ 14.50 $ 13.75 $ 12.125 $ 15.625 $ 14.875
======== ======== ======== ======== ========
<PAGE>
Total Investment Based on market price per share 12.34% 21.26% (16.87%) 11.78% 2.19%+++
Return:** ======== ======== ======== ======== ========
Based on net asset value per share 5.84% 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 5.18% 5.40% 5.30% 5.26% 5.51%*
======== ======== ======== ======== ========
Supplemental Net assets, net of Preferred Stock, end
Data: of period (in thousands) $136,483 $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 49.76% 32.79% 15.06% 5.14% 27.13%
======== ======== ======== ======== ========
Leverage: Asset coverage per $1,000 $ 3,275 $ 3,289 $ 2,946 $ 3,337 $ 3,064
======== ======== ======== ======== ========
Dividends Per Share Investment income--net $ 837 $ 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 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
<PAGE>
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 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.
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.
<PAGE>
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 year ended November 30, 1996 were $92,604,454 and
$95,525,786, respectively.
Net realized and unrealized gains (losses) as of November 30, 1996
were as follows:
Realized
Gains Unrealized
(Losses) Gains
Long-term investments $ 462,402 $13,915,500
Financial futures contracts (792,915) --
----------- -----------
Total $ (330,513) $13,915,500
=========== ===========
As of November 30, 1996, net unrealized appreciation for Federal
income tax purposes aggregated $13,915,500, of which $13,933,335
related to appreciated securities and $17,835 related to depreciated
securities. The aggregate cost of investments at November 30, 1996
for Federal income tax purposes was $179,099,490.
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 year ended November 30, 1996, shares issued and outstanding
remained constant at 8,829,651. At November 30, 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 November 30, 1996 was
3.65%.
<PAGE>
As of November 30, 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 year ended
November 30, 1996, MLPF&S, an affiliate of FAM, earned $116,934 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 December 10, 1996, the Fund's Board of Directors declared an
ordinary income dividend to Common Stock shareholders in the amount
of $.074133 per share, payable on December 30, 1996 to shareholders
of record as of December 20, 1996.
<AUDIT-REPORT>
INDEPENDENT AUDITORS' REPORT
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, 1996, 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 four-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.
<PAGE>
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, 1996 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, 1996, 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
January 3, 1996
</AUDIT-REPORT>
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, 1996 qualify as tax-exempt interest dividends for
Federal income tax purposes. Additionally, there were no capital
gains distributed by the Fund during the year.
Please retain this information for your records.
<PAGE>
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
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
Preferred Stock:
IBJ Schroder Bank & Trust Company
One State Street
New York, New York 10004
NYSE Symbol
MYJ
