MUNIYIELD
NEW JERSEY
FUND, INC.
STRATEGIC
Performance
[GRAPHIC OMITTED]
Semi-Annual Report
May 31, 1999
<PAGE>
MuniYield New Jersey Fund, Inc.
DEAR SHAREHOLDER
For the six-month period ended May 31, 1999, the Common Stock of MuniYield New
Jersey Fund, Inc. earned $0.433 per share income dividends, which included
earned and unpaid dividends of $0.069. This represents a net annualized yield of
5.76%, based on a month-end per share net asset value of $15.09. Over the same
period, total investment return on the Fund's Common Stock was -0.59%, based on
a change in per share net asset value from $15.93 to $15.09, and assuming
reinvestment of $0.447 per share ordinary income dividends and $0.309 per share
capital gains distributions.
For the six months ended May 31, 1999, the average yield on the Fund's Auction
Market Preferred Stock was 3.58%.
The Municipal Market Environment
Long-term bond yields generally moved higher during the six-month period ended
May 31, 1999. Investor concern that increasingly strong domestic economic growth
would eventually trigger inflationary pressures gradually pushed yields higher,
despite the absence of visible increases in producer or retail prices. However,
in May the combination of an unexpectedly strong consumer price report and a
warning from the Federal Reserve Board that it was considering an eventual
increase in short-term interest rates pushed long-term bond yields appreciably
higher. By the end of May, US Treasury bond yields stood at 5.83%, an increase
of 75 basis points (0.75%) during the six-month period. Long-term municipal bond
yields followed a similar although muted pattern, as measured by the Bond Buyer
Revenue Bond Index. Through April, tax-exempt bond yields traded in a relatively
narrow range, at approximately 5.25%. During May, long-term municipal bond
yields rose to end the month at 5.41%. During the six-month period ended May 31,
1999, tax-exempt bond yields rose just over 15 basis points.
The tax-exempt bond market's strong technical position has prevented municipal
bond yields from increasing as much as their taxable counterparts in recent
months. The principal factor promoting this technical support has been the
decline of municipal bond issuance. During the six months ended May 31, 1999,
less than $120 billion in new long-term tax-exempt securities was underwritten,
a decline of over 12% compared to the same period a year ago. During the three
months ended May 31, 1999, municipalities issued less than $60 billion in
long-term tax-exempt securities, a decline of nearly 20% compared to the May 31,
1998 quarter. During May 1999, municipalities issued $15 billion in long-term
securities, a decline of nearly 40% compared to May 1998 levels. This represents
the lowest May issuance since 1995. Additionally, retail and institutional
demand remained positive, easily absorbing avail-able issuance. Investor demand
is likely to remain positive going forward since June and July usually are
seasonally strong months. Traditionally, investors receive significant cash
inflows from bond maturities and coupon payments during these months. Generally,
$15 billion-$20 billion becomes available for reinvestment each month.
Recent outperformance by the municipal bond market has come at the expense of
the very attractive yield ratios available in late 1998. At year-end 1998,
long-term municipal revenue bond yields were 102% of comparable US Treasury bond
yields. This ratio has declined as US Treasury bond yields have risen faster
than tax-exempt bond yields. At the end of May, the yield ratio was
approximately 92%, still well above the historic average of 86%-88%. This yield
ratio may rise somewhat in the coming months if issue supply were to suddenly
increase. However, yield ratios in excess of 100% are unlikely in the near
future.
Further increases in bond yields are likely to be dependent on an acceleration
in US economic growth. However, it is also likely that the increases in interest
rates seen over recent months have yet to fully impact the US economy. For
example, recent
1
<PAGE>
MuniYield New Jersey Fund, Inc. May 31, 1999
increases in mortgage rates have yet to slow home purchases or construction.
Additionally, economic indicators of future price inflation, such as the price
of gold or world commodity prices, all remain well contained. In such an
environment, any moves by the Federal Reserve Board to slow economic growth are
likely to be gradual and limited. Furthermore, any Federal Reserve Board action
is also likely to keep inflation low in the United States for the remainder of
1999 and into 2000. This suggests that while interest rates may have further to
rise, any increases are not likely to be major but are likely to be temporary
should the US economy slow later this year.
Portfolio Strategy
During the six-month period ended May 31, 1999, relative stability within the
municipal market enabled the Fund to weather the volatility that characterized
other fixed-income markets. Our aggressive investment strategy last fall was
designed to capitalize on further declines in long-term interest rates. We
changed our strategy when these declines failed to materialize, and investors
began to expect that bond prices were unlikely to soon revisit the highs of last
fall. We adopted an outlook that called for steady-to-somewhat higher yields
bounded by a fairly broad trading range. Reduced volume, in conjunction with
vigorous investor demand, suggested a continuation of the relative
outperformance experienced by the tax-exempt market. Given this likely
environment, we shifted our emphasis to seek to generate income for the Fund.
Recent purchases reflected this shift. For example, during the May quarter we
purchased coupon bonds that enhanced income for the Fund.
In our last report to shareholders, we described how the technical constraints
within the New Jersey municipal market had hampered our ability to execute our
portfolio strategy in a timely manner. With national and state new-issue volume
continuing to decline from year ago levels, the environment has become even more
difficult. Barring a major reversal in the supply outlook, it appears likely
that both retail and institutional investors will be forced to compete more
aggressively for a shrinking pool of New Jersey tax-exempt bonds. This prospect
bodes well for current Common Stock shareholders, since valuations are likely to
remain favorable on a relative basis. However, our ability to successfully
execute investment strategies will remain limited by the constraints of the
current environment.
For much of the six-month period ended May 31, 1999, the Fund benefited from an
ongoing shortage of product in the short-term tax-exempt market. Tax-exempt
money market funds experienced unprecedented growth in an environment of
declining supply as the improved financial condition of many state and local
municipalities reduced the need for short-term funding. The resulting imbalance
between supply and demand drove short-term tax-exempt interest rates to
historically low levels relative to their taxable counterparts. Thus, the Fund
enjoyed very favorable borrowing costs in comparison to what might be the case
under more normal market conditions. (For a complete explanation of the benefits
and risks of leveraging, see page 4 of this report to shareholders.)
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,
/s/ Terry K. Glenn
Terry K. Glenn
President and Director
/s/ Vincent R. Giordano
Vincent R. Giordano
Senior Vice President
/s/ Theodore R. Jaeckel Jr.
Theodore R. Jaeckel Jr.
Vice President and Portfolio Manager
June 30, 1999
2
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MuniYield New Jersey Fund, Inc. May 31, 1999
PROXY RESULTS
During the six-month period ended May 31, 1999, MuniYield New Jersey Fund,
Inc.'s Common Stock shareholders voted on the following proposals. Proposals 1
and 2 were approved at a shareholders' meeting on April 21, 1999. The meeting
was adjourned with respect to proposal 3. Proposal 3 was approved at the May 27,
1999 meeting. The description of each proposal and number of shares voted are as
follows:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
Shares Voted Shares Withheld
For From Voting
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. To elect the Fund's Directors: Terry K. Glenn 8,798,844 75,234
James H. Bodurtha 8,794,764 79,314
Herbert I. London 8,794,764 79,314
Robert R. Martin 8,785,685 88,393
Arthur Zeikel 8,779,542 94,536
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
Shares Voted Shares Voted Shares 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. 8,754,036 46,722 73,320
- --------------------------------------------------------------------------------------------------------------------
3. To approve an amendment to the Articles Supplementary of the Fund. 4,623,979 261,645 229,362
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
During the six-month period ended May 31, 1999, MuniYield New Jersey Fund,
Inc.'s Preferred Stock shareholders voted on the following proposals.
Proposals 1 and 2 were approved at a shareholders' meeting on April 21, 1999.
The meeting was adjourned with respect to proposal 3. Proposal 3 was approved
at the May 27, 1999 meeting. The description of each proposal and number of
shares voted are as follows:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
Shares Voted Shares Withheld
For From Voting
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. To elect the Fund's Board of Directors: Terry K. Glenn, James H. Bodurtha,
Herbert I. London, Robert R. Martin, Joseph L. May, Andre F. Perold and
Arthur Zeikel. 2,227 89
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
Shares Voted Shares Voted Shares 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. 2,317 0 0
- ---------------------------------------------------------------------------------------------------------------------------------
3. To approve an amendment to the Articles Supplementary of the Fund. 1,769 463 84
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</TABLE>
MANAGED DIVIDEND POLICY
The Fund's dividend policy is to distribute substantially all of its net
investment income to its share holders on a monthly basis. However, in order to
provide shareholders with a more consistent yield to the current trading price
of shares of Common Stock of the Fund, the Fund may at times pay out less than
the entire amount of net investment income earned in any particular month and
may at times in any month pay out such accumulated but undistributed income in
addition to net investment income earned in that month. As a result, the
dividends paid by the Fund for any particular month may be more or less than the
amount of net investment income earned by the Fund during such month. The Fund's
current accumulated but undistributed net investment income, if any, is
disclosed in the Statement of Assets, Liabilities and Capital, which comprises
part of the Financial Information included in this report.
3
<PAGE>
MuniYield New Jersey Fund, Inc. May 31, 1999
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.
As a part of its investment strategy, the Fund may invest in certain securities
whose potential income return is inversely related to changes in a floating
interest rate ("inverse floaters"). In general, income on inverse floaters will
decrease when short-term interest rates increase and increase when short-term
interest rates decrease. Investments in inverse floaters may be characterized as
derivative securities and may subject the Fund to the risks of reduced or
eliminated interest payments and losses of invested principal. In addition,
inverse floaters have the effect of providing investment leverage and, as a
result, the market value of such securities will generally be more volatile than
that of fixed-rate, tax-exempt securities. To the extent the Fund invests in
inverse floaters, the market value of the Fund's portfolio and the net asset
value of the Fund's shares may also be more volatile than if the Fund did not
invest in these securities.
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
RIB Residual Interest Bonds
RITR Residual Interest Trust Receipts
UT Unlimited Tax
VRDN Variable Rate Demand Notes
4
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MuniYield New Jersey Fund, Inc. May 31, 1999
SCHEDULE OF INVESTMENTS (in Thousands)
<TABLE>
<CAPTION>
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S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
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New Jersey--100.6%
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<S> <C> <C> <C> <C>
AA A1 $ 2,000 Bernards Township, New Jersey, School District, GO, 5.30% due 1/01/2019 $ 2,028
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AAA Aaa 1,100 Camden County, New Jersey, Municipal Utilities Authority, Sewer Revenue Refunding Bonds,
County Agreement, 5.25% due 7/15/2017 (b) 1,114
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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 (d) 2,273
- -----------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 2,500 Casino Reinvestment Development Authority, New Jersey, Parking Fee Revenue Bonds,
Series A, 5.25% due 10/01/2015 (c) 2,533
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East Orange, New Jersey, Board of Education, COP, Capital Appreciation (c):
AAA Aaa 1,420 5.30%** due 8/01/2016 588
AAA Aaa 1,000 5.34%** due 2/01/2019 359
AAA Aaa 2,845 5.202%** due 8/01/2026 683
- -----------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 750 Essex County, New Jersey, Improvement Authority, Parking Facility Revenue Refunding
Bonds, 5% due 10/01/2022 (a) 736
- -----------------------------------------------------------------------------------------------------------------------------------
NR* Aaa 2,000 Essex County, New Jersey, Utilities Authority, Solid Waste Revenue Refunding Bonds,
Series A, 5% due 4/01/2022 (c) 1,962
- -----------------------------------------------------------------------------------------------------------------------------------
AA Aa2 1,000 Gloucester County, New Jersey, Industrial Pollution Control Financing Authority, Revenue
Refunding Bonds (Mobil Oil Refining Corp. Project), 5.625% due 12/01/2028 1,027
- -----------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 4,880 Hudson County, New Jersey, COP, Refunding (Correctional Facilities), 6.60% due 12/01/2021 (d) 5,267
- -----------------------------------------------------------------------------------------------------------------------------------
AAA NR* 5,000 Hudson County, New Jersey, Improvement Authority, Facility Lease Revenue Refunding
Bonds, Residual Certificates, RIB, Series 34, 7.175% due 10/01/2024 (b)(e) 5,286
- -----------------------------------------------------------------------------------------------------------------------------------
AA Aa3 2,600 Jersey City, New Jersey, School, GO, 6.65% due 2/15/2002 (g) 2,830
- -----------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 1,750 Middlesex County, New Jersey, COP, 4.85% due 6/15/2023 (d) 1,680
- -----------------------------------------------------------------------------------------------------------------------------------
Middlesex County, New Jersey, Improvement Authority, Utility System Revenue
Bonds, Capital Appreciation (Perth Amboy Project), Series B (a):
AAA Aaa 1,000 5.16%** due 9/01/2023 280
AAA Aaa 500 5.16%** due 9/01/2024 133
AAA Aaa 1,000 5.16%** due 9/01/2025 251
AAA Aaa 1,300 5.16%** due 9/01/2026 309
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NR* VMIG1+ 100 Monmouth County, New Jersey, Improvement Authority Revenue Bonds (Pooled Government
Loan Program), ACES, 3.10% due 8/01/2016 (f) 100
- -----------------------------------------------------------------------------------------------------------------------------------
New Jersey EDA, First Mortgage Revenue Refunding Bonds, Series A:
BBB- NR* 1,250 (Fellowship Village), 5.50% due 1/01/2018 1,225
BBB- NR* 3,000 (Fellowship Village), 5.50% due 1/01/2025 2,881
- -----------------------------------------------------------------------------------------------------------------------------------
A1+ VMIG1+ 1,200 New Jersey EDA, Natural Gas Facilities Revenue Bonds (NUI Corporation Project), VRDN,
AMT, Series A, 3.25% due 6/01/2026 (a)(f) 1,200
- -----------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 5,000 New Jersey EDA, Natural Gas Facilities, Revenue Refunding Bonds (NUI Corporation Project),
Series A, 6.35% due 10/01/2022 (a) 5,523
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New Jersey EDA, Revenue Bonds, Capital Appreciation (Saint Barnabas Project), Series A (d):
NR* Aaa 4,000 5.55%** due 7/01/2017 1,566
NR* Aaa 5,435 5.47%** due 7/01/2018 2,013
NR* Aaa 6,000 5.19%** due 7/01/2019 2,102
NR* Aaa 1,000 5.18%** due 7/01/2023 283
NR* Aaa 8,350 5.20%** due 7/01/2025 2,118
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</TABLE>
5
<PAGE>
MuniYield New Jersey Fund, Inc. May 31, 1999
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
- -----------------------------------------------------------------------------------------------------------------------------------
New Jersey (continued)
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<S> <C> <C> <C> <C>
New Jersey EDA, Revenue Refunding Bonds:
AAA Aaa $ 2,000 (Educational Testing Service), Series A, 4.75% due 5/15/2018 (d) $ 1,920
AAA Aaa 2,500 (RJW Health Care Corporation), 6.50% due 7/01/2024 (c) 2,765
- -----------------------------------------------------------------------------------------------------------------------------------
NR* Aa3 10,750 New Jersey EDA, Solid Waste Disposal Facilities Revenue Bonds (Garden State Paper
Company), 7.125% due 4/01/2022 11,686
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New Jersey EDA, Water Facilities Revenue Bonds, AMT (b):
AAA Aaa 2,000 (American Water Company Inc. Project), 6% due 5/01/2036 2,154
AAA Aaa 2,500 RITR, Series 34, 6.92% due 5/01/2032 (e) 2,543
- -----------------------------------------------------------------------------------------------------------------------------------
A1+ VMIG1+ 1,300 New Jersey EDA, Water Facilities Revenue Refunding Bonds (United Water
New Jersey Inc. Project), VRDN, Series A, 3.35% due 11/01/2026 (a)(f) 1,300
- -----------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 2,800 New Jersey Health Care Facilities Financing Authority Revenue Bonds
(Catholic Health East), Series E, 4.75% due 11/15/2029 (a) 2,592
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New Jersey Health Care Facilities Financing Authority, Revenue Refunding Bonds:
A- A3 6,060 (Atlantic City Medical Center), Series C, 6.80% due 7/01/2011 6,538
BBB NR* 2,000 (Christian Health Care Center), Series A, 5.25% due 7/01/2013 1,946
AAA Aaa 1,000 (Community Medical Center/Kimball), 5.25% due 7/01/2011 (c) 1,026
AAA Aaa 1,000 (Community Medical Center/Kimball), 5.25% due 7/01/2012 (c) 1,022
AAA Aaa 2,135 (Community Medical Center/Kimball, 5.25% due 7/01/2013 (c) 2,173
BBB+ NR* 3,500 (Holy Name Hospital), 6% due 7/01/2025 3,611
A NR* 1,750 (Palisades Medical Center Obligation Group), 5.25% due 7/01/2028 1,707
AAA Aaa 2,550 (Saint Barnabas Health Center), Series B, 4.75% due 7/01/2028 (d) 2,364
BBB Baa2 2,450 (Saint Elizabeth Hospital Obligation Group), 6% due 7/01/2020 2,532
AAA Aaa 1,555 (Virtua Health Issue), 4.50% due 7/01/2028 (c) 1,378
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New Jersey Sports and Exposition Authority, Convention Center, Luxury Tax Revenue
Refunding Bonds (d):
AAA Aaa 3,200 5% due 9/01/2015 3,193
AAA Aaa 4,000 5% due 9/01/2019 3,949
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New Jersey State Educational Facilities Authority, Higher Educational Revenue Bonds
(Saint Peters College), Series B (g):
BBB Baa3 3,355 6.80% due 7/01/2002 3,692
BBB Baa3 3,600 6.85% due 7/01/2002 3,967
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AAA Aaa 4,935 New Jersey State Educational Facilities Authority, Higher Educational Revenue
Refunding Bonds (Princeton University), Series C, 6.375% due 7/01/2002 (g) 5,384
- -----------------------------------------------------------------------------------------------------------------------------------
New Jersey State Educational Facilities Authority Revenue Bonds:
BBB+ A3 6,250 (Drew University), Series E, 6.25% due 7/01/2002 (g) 6,779
AA+ Aaa 1,000 (Institute for Advanced Study), Series G, 5% due 7/01/2028 980
A A3 6,030 (Stevens Institute of Technology), Series A, 6.80% due 7/01/2002 (g) 6,636
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AAA Aaa 2,240 New Jersey State Educational Facilities Authority, Revenue Refunding Bonds
(Seton Hall University Project), 5.25% due 7/01/2013 (a) 2,318
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</TABLE>
6
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MuniYield New Jersey Fund, Inc. May 31, 1999
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
- -----------------------------------------------------------------------------------------------------------------------------------
New Jersey (concluded)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
AA+ Aa1 $ 2,105 New Jersey State, GO, AMT, 7.05% due 7/15/2015 $ 2,414
- -----------------------------------------------------------------------------------------------------------------------------------
NR* Aaa 5,000 New Jersey State Higher Education Assistance Authority, Student Loan Revenue
Bonds, RIB, AMT, Series 18, 6.925% due 6/01/2017 (a)(e) 5,050
- -----------------------------------------------------------------------------------------------------------------------------------
New Jersey State Housing and Mortgage Finance Agency, Home Buyer Revenue
Bonds, AMT (d):
AAA Aaa 3,640 Series M, 7% due 10/01/2026 3,949
AAA Aaa 1,940 Series U, 5.55% due 10/01/2011 2,022
AAA Aaa 3,335 Series U, 5.60% due 10/01/2012 3,476
- -----------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 2,000 New Jersey State Transit Corporation, COP, 6.50% due 10/01/2016 (c) 2,249
- -----------------------------------------------------------------------------------------------------------------------------------
AA- Aa2 7,500 New Jersey State Transportation Trust Fund Authority Revenue Bonds
(Transportation System), Series A, 5.125% due 6/15/2015 7,544
- -----------------------------------------------------------------------------------------------------------------------------------
North Brunswick Township, New Jersey, GO, UT:
NR* A1 1,190 6.50% due 5/15/2012 1,290
NR* A1 1,400 6.50% due 5/15/2013 1,517
- -----------------------------------------------------------------------------------------------------------------------------------
AA- A1 4,000 Port Authority of New York and New Jersey, Consolidated Revenue Bonds, 93rd
Series, 6.125% due 6/01/2094 4,520
- -----------------------------------------------------------------------------------------------------------------------------------
NR* Aaa 4,325 Port Authority of New York and New Jersey, RITR, AMT, 108th Series, 8.085%
due 1/15/2017 (c)(e) 4,864
- -----------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 2,500 Port Authority of New York and New Jersey, Special Obligation Revenue Bonds
(JFK International Air Terminal Project), AMT, Series 6, 5.75% due 12/01/2025 (d) 2,611
- -----------------------------------------------------------------------------------------------------------------------------------
Port Authority of New York and New Jersey, Special Obligation Revenue Refunding Bonds
(Versatile Structure Obligation), VRDN (f):
A1+ VMIG1+ 200 AMT, Series 4, 3.30% due 4/01/2024 200
A1+ VMIG1+ 800 Series 3, 3.35% due 6/01/2020 800
A1+ VMIG1+ 3,000 Series 5, 3.35% due 8/01/2024 3,000
- -----------------------------------------------------------------------------------------------------------------------------------
AA A1 2,700 Rutgers State University, New Jersey, Revenue Bonds, Series A, 4.75%
due 5/01/2029 2,524
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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 2,451
- -----------------------------------------------------------------------------------------------------------------------------------
AAA Aaa 4,750 South Jersey Transportation Authority, New Jersey, Transportation System Revenue
Bonds, 5% due 11/01/2029 (a) 4,620
- -----------------------------------------------------------------------------------------------------------------------------------
AA+ Aaa 635 Union County, New Jersey, Improvement Authority, Revenue Refunding Bonds
(County Guaranteed Lease), 5.30% due 11/15/2006 677
- -----------------------------------------------------------------------------------------------------------------------------------
NR* Aaa 3,440 Union County, New Jersey, Utilities Authority, RITR, Series 38, 7.07%
due 6/01/2020 (e) 3,582
- -----------------------------------------------------------------------------------------------------------------------------------
West Windsor-Plainsboro, New Jersey, Regional School District, GO, Refunding:
AAA Aaa 2,500 4.75% due 9/15/2022 2,382
AAA Aaa 2,500 4.75% due 9/15/2023 2,376
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
7
<PAGE>
MuniYield New Jersey Fund, Inc. May 31, 1999
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
- -----------------------------------------------------------------------------------------------------------------------------------
Puerto Rico--1.2%
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
AAA Aaa $ 2,500 Puerto Rico Electric Power Authority, Power Revenue Refunding Bonds, Series EE,
4.50% due 7/01/2018 (d) $ 2,318
- -----------------------------------------------------------------------------------------------------------------------------------
Total Investments (Cost--$193,353)--101.8% 200,941
Liabilities in Excess of Other Assets--(1.8%) (3,630)
--------
Net Assets--100.0% $197,311
========
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) AMBAC Insured.
(b) FGIC Insured.
(c) FSA Insured.
(d) MBIA Insured.
(e) 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, 1999.
(f) 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,
1999.
(g) Prerefunded.
* Not Rated.
** Represents a zero coupon; the interest rate shown reflects the effective
yield at the time of purchase by the Fund.
+ Highest short-term rating by Moody's Investors Service, Inc.
See Notes to Financial Statements.
QUALITY PROFILE
The quality ratings of securities in the Fund as of May 31, 1999 were as
follows:
- -----------------------------------------------------------------------------
Percent of
S&P Rating/Moody's Rating Net Assets
- -----------------------------------------------------------------------------
AAA/Aaa....................................................... 57.3%
AA/Aa......................................................... 18.8
A/A........................................................... 12.4
BBB/Baa....................................................... 10.0
Other+........................................................ 3.3
- -----------------------------------------------------------------------------
+ Temporary investments in short-term municipal securities.
8
<PAGE>
MuniYield New Jersey Fund, Inc. May 31, 1999
FINANCIAL INFORMATION
Statement of Assets, Liabilities and Capital as of May 31, 1999
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Assets: Investments, at value (identified cost--$193,353,114) (Note 1a) ......... $200,940,955
Cash..................................................................... 92,507
Interest receivable...................................................... 3,419,292
Prepaid expenses and other assets........................................ 7,648
------------
Total assets ............................................................ 204,460,402
------------
- --------------------------------------------------------------------------------------------------------------------------
Liabilities: Payables:
Securities purchased................................................. $ 6,874,439
Dividends to shareholders (Note 1e).................................. 179,344
Investment adviser (Note 2).......................................... 78,741 7,132,524
------------
Accrued expenses and other liabilities................................... 16,783
------------
Total liabilities ....................................................... 7,149,307
------------
- --------------------------------------------------------------------------------------------------------------------------
Net Assets: Net assets............................................................... $197,311,095
============
- --------------------------------------------------------------------------------------------------------------------------
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 (9,100,783 shares issued
and outstanding)..................................................... $ 910,078
Paid-in capital in excess of par......................................... 127,439,164
Undistributed investment income--net .................................... 1,329,756
Undistributed realized capital gains on investments--net................. 44,256
Unrealized appreciation on investments--net.............................. 7,587,841
------------
Total--Equivalent to $15.09 net asset value per share of Common Stock
(market price--$14.5625)................................................. 137,311,095
------------
Total capital............................................................ $197,311,095
============
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Auction Market Preferred Stock.
See Notes to Financial Statements.
9
<PAGE>
MuniYield New Jersey Fund, Inc. May 31, 1999
FINANCIAL INFORMATION (continued)
Statement of Operations
<TABLE>
<CAPTION>
For the Six Months Ended
May 31, 1999
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Investment Income Interest and amortization of premium and discount earned $ 5,537,561
(Note 1d):
- ----------------------------------------------------------------------------------------------------------------------------------
Expenses: Investment advisory fees (Note 2)........................................ $ 499,819
Commission fees (Note 4)................................................. 76,201
Professional fees........................................................ 37,317
Accounting services (Note 2)............................................. 32,749
Transfer agent fees...................................................... 16,610
Printing and shareholder reports......................................... 12,778
Directors' fees and expenses............................................. 11,635
Listing fees............................................................. 8,323
Custodian fees........................................................... 7,993
Pricing fees............................................................. 6,139
Other.................................................................... 8,917
----------
Total expenses .......................................................... 718,481
------------
Investment income--net.................................................... 4,819,080
------------
- ----------------------------------------------------------------------------------------------------------------------------------
Realized & Realized gain on investments--net ........................................ 1,741,499
Unrealized Change in unrealized appreciation on investments--net .................... (6,281,812)
Gain (Loss) on ------------
Investments--Net Net Increase in Net Assets Resulting from Operations .................... $ 278,767
(Notes 1b, 1d & 3): ============
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
For the Six For the
Months Ended Year Ended
Increase (Decrease) in Net Assets: May 31, 1999 Nov. 30, 1998
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operations: Investment income--net........................................... $ 4,819,080 $ 10,090,941
Realized gain on investments--net................................ 1,741,499 3,971,836
Change in unrealized appreciation on investments--net............ (6,281,812) (242,972)
------------ ------------
Net increase in net assets resulting from operations............. 278,767 13,819,805
------------ ------------
- ---------------------------------------------------------------------------------------------------------------------------------
Dividends & Investment income--net:
Distributions to Common Stock................................................... (4,044,465) (7,921,213)
Shareholders Preferred Stock................................................ (677,856) (1,914,624)
(Note 1e): Realized gain on investments--net:
Common Stock................................................... (2,790,654) --
Preferred Stock................................................ (392,616) (260,736)
------------ ------------
Net decrease in net assets resulting from dividends and
distributions to shareholders ................................... (7,905,591) (10,096,573)
------------ ------------
- ---------------------------------------------------------------------------------------------------------------------------------
Capital Stock Value of shares issued to Common Stock shareholders in
Transactions reinvestment of dividends and distributions...................... 1,678,698 1,902,991
(Note 4): ------------ ------------
- ---------------------------------------------------------------------------------------------------------------------------------
Net Assets: Total increase (decrease) in net assets.......................... (5,948,126) 5,626,223
Beginning of period.............................................. 203,259,221 197,632,998
------------ ------------
End of period*................................................... $197,311,095 $203,259,221
============ ============
- ---------------------------------------------------------------------------------------------------------------------------------
* Undistributed investment income--net............................. $ 1,329,756 $ 1,232,997
============ ============
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
10
<PAGE>
MuniYield New Jersey Fund, Inc. May 31, 1999
FINANCIAL INFORMATION (concluded)
Financial Highlights
<TABLE>
<CAPTION>
For the
The following per share data and ratios have been derived Six Months
from information provided in the financial statements. Ended
May 31,
Increase (Decrease) in Net Asset Value: 1999
- -------------------------------------------------------------------------------------------
<S> <C> <C>
Per Share Net asset value, beginning of period .............. $ 15.93
Operating ---------
Performance: Investment income--net ............................ .53
Realized and unrealized gain (loss) on
investments--net .................................. (.50)
---------
Total from investment operations .................. .03
---------
Less dividends and distributions to Common Stock
shareholders:
Investment income--net .......................... (.45)
Realized gain on investments--net ............... (.31)
---------
Total dividends and distributions to Common
Stock shareholders ................................ (.76)
---------
Effect of Preferred Stock activity:
Dividends and distributions to Preferred
Stock shareholders:
Investment income--net ........................ (.07)
Realized gain on investments--net ............. (.04)
---------
Total effect of Preferred Stock activity .......... (.11)
---------
Net asset value, end of period .................... $ 15.09
=========
Market price per share, end of period ............. $ 14.5625
=========
- -------------------------------------------------------------------------------------------
Total Investment Based on market price per share ................... (8.77%)++
Return:** =========
Based on net asset value per share ................ (.59%)++
=========
- -------------------------------------------------------------------------------------------
Ratios Based on Total expenses*** ................................. 1.02%*
Average Net Assets =========
Of Common Stock: Total investment income--net*** ................... 6.87%*
=========
Amount of dividends to Preferred Stock shareholders .97%*
=========
Investment income--net, to Common Stock
shareholders ...................................... 5.90%*
=========
- -------------------------------------------------------------------------------------------
Ratios Based on Total expenses .................................... .72%*
Total Average Net =========
Assets:+*** Total investment income--net ...................... 4.82%*
=========
- -------------------------------------------------------------------------------------------
Ratios Based on Dividends to Preferred Stock shareholders ......... 2.27%*
Average Net Assets =========
Of Preferred Stock:
- -------------------------------------------------------------------------------------------
Supplemental Net assets, net of Preferred Stock, end of period
Data: (in thousands) .................................... $ 137,311
=========
Preferred Stock outstanding, end of period
(in thousands) .................................... $ 60,000
=========
Portfolio turnover ................................ 30.96%
=========
- -------------------------------------------------------------------------------------------
Leverage: Asset coverage per $1,000 ......................... $ 3,289
=========
- -------------------------------------------------------------------------------------------
Dividends Per Share Investment income--net ............................ $ 282
On Preferred Stock =========
Outstanding:
- -------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
The following per share data and ratios have been derived For the Year Ended
from information provided in the financial statements. November 30,
----------------------------------------------------
Increase (Decrease) in Net Asset Value: 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period .............. $ 15.51 $ 15.46 $ 15.56 $ 13.22
Operating --------- --------- --------- ---------
Performance: Investment income--net ............................ 1.13 1.14 1.14 1.17
Realized and unrealized gain (loss) on
investments--net .................................. .42 .05 (.10) 2.33
--------- --------- --------- ---------
Total from investment operations .................. 1.55 1.19 1.04 3.50
--------- --------- --------- ---------
Less dividends and distributions to Common Stock
shareholders:
Investment income--net .......................... (.89) (.91) (.91) (.90)
Realized gain on investments--net ............... -- -- -- --
--------- --------- --------- ---------
Total dividends and distributions to Common
Stock shareholders ................................ (.89) (.91) (.91) (.90)
--------- --------- --------- ---------
Effect of Preferred Stock activity:
Dividends and distributions to Preferred
Stock shareholders:
Investment income--net ........................ (.21) (.23) (.23) (.26)
Realized gain on investments--net ............. (.03) -- -- --
--------- --------- --------- ---------
Total effect of Preferred Stock activity .......... (.24) (.23) (.23) (.26)
--------- --------- --------- ---------
Net asset value, end of period .................... $ 15.93 $ 15.51 $ 15.46 $ 15.56
========= ========= ========= =========
Market price per share, end of period ............. $ 16.75 $ 15.5625 $ 14.50 $ 13.75
========= ========= ========= =========
- ------------------------------------------------------------------------------------------------------------------------------
Total Investment Based on market price per share ................... 13.89% 13.96% 12.34% 21.26%
Return:** ========= ========= ========= =========
Based on net asset value per share ................ 8.68% 6.52% 5.84% 25.85%
========= ========= ========= =========
- ------------------------------------------------------------------------------------------------------------------------------
Ratios Based on Total expenses*** ................................. 1.02% 1.04% 1.04% 1.07%
Average Net Assets ========= ========= ========= =========
Of Common Stock: Total investment income--net*** ................... 7.24% 7.48% 7.41% 7.86%
========= ========= ========= =========
Amount of dividends to Preferred Stock shareholders 1.37% 1.50% 1.48% 1.73%
========= ========= ========= =========
Investment income--net, to Common Stock
shareholders ...................................... 5.86% 5.98% 5.94% 6.13%
========= ========= ========= =========
- ------------------------------------------------------------------------------------------------------------------------------
Ratios Based on Total expenses .................................... .71% .72% .72% .73%
Total Average Net ========= ========= ========= =========
Assets:+*** Total investment income--net ...................... 5.03% 5.14% 5.18% 5.40%
========= ========= ========= =========
- ------------------------------------------------------------------------------------------------------------------------------
Ratios Based on Dividends to Preferred Stock shareholders ......... 3.19% 3.35% 3.35% 3.75%
Average Net Assets ========= ========= ========= =========
Of Preferred Stock:
- ------------------------------------------------------------------------------------------------------------------------------
Supplemental Net assets, net of Preferred Stock, end of period
Data: (in thousands) .................................... $ 143,259 $ 137,633 $ 136,483 $ 137,355
========= ========= ========= =========
Preferred Stock outstanding, end of period
(in thousands) .................................... $ 60,000 $ 60,000 $ 60,000 $ 60,000
========= ========= ========= =========
Portfolio turnover ................................ 46.83% 30.50% 49.76% 32.79%
========= ========= ========= =========
- ------------------------------------------------------------------------------------------------------------------------------
Leverage: Asset coverage per $1,000 ......................... $ 3,388 $ 3,294 $ 3,275 $ 3,289
========= ========= ========= =========
- ------------------------------------------------------------------------------------------------------------------------------
Dividends Per Share Investment income--net ............................ $ 798 $ 838 $ 837 $ 938
On Preferred Stock ========= ========= ========= =========
Outstanding:
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Includes Common and Preferred Stock average net assets.
++ Aggregate total investment return.
* 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.
See Notes to Financial Statements.
11
<PAGE>
MuniYield New Jersey Fund, Inc. May 31, 1999
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
MuniYield New Jersey Fund, Inc. (the "Fund") is registered under the Investment
Company Act of 1940 as a non-diversified, closed-end management investment
company. The Fund's financial statements are prepared in accordance with
generally accepted accounting principles which may require the use of management
accruals and estimates. 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 written or purchased are valued at the last
sale price in the case of exchange-traded options. In the case of options traded
in the over-the-counter market, valuation is the last asked price (options
written) or the last bid price (options purchased). 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.
o Financial futures contracts--The Fund may purchase or sell financial 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.
o 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).
12
<PAGE>
MuniYield New Jersey Fund, Inc. May 31, 1999
Interest income is recognized on the accrual basis. Discounts and market
premiums are amortized into interest income. Realized gains and losses on secu
rity transactions are determined on the identified cost basis.
(e) 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, including
proceeds from the issuance of Preferred Stock.
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, 1999 were $59,618,608 and $59,608,172, respectively.
Net realized gains for the six months ended May 31, 1999 and net unrealized
gains as of May 31, 1999 were as follows:
- --------------------------------------------------------------------------------
Realized Unrealized
Gains Gains
- --------------------------------------------------------------------------------
Long-term investments..... $1,741,499 $7,587,841
---------- ----------
Total..................... $1,741,499 $7,587,841
========== ==========
- --------------------------------------------------------------------------------
As of May 31, 1999, net unrealized appreciation for Federal income tax purposes
aggregated $7,587,841, of which $8,698,339 related to appreciated securities and
$1,110,498 related to depreciated securities. The aggregate cost of investments
at May 31, 1999 for Federal income tax purposes was $193,353,114.
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
Shares issued and outstanding during the six months ended May 31, 1999 and the
year ended November 30, 1998 increased by 106,361 and 120,384, respectively, as
a result of dividend reinvestment.
Preferred Stock
Auction Market Preferred Stock ("AMPS") are shares of Preferred Stock of the
Fund, with a par value of $.05 per share and a liquidation preference of $25,000
per share, 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, 1999 was 3.23%.
Shares issued and outstanding during the six months ended May 31, 1999 and the
year ended November 30, 1998 remained constant.
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, 1999, Merrill Lynch, Pierce,
Fenner & Smith Incorporated, an affiliate of FAM, earned $50,924 as commissions.
5. Subsequent Event:
On June 9, 1999, the Fund's Board of Directors declared an ordinary income
dividend to Common Stock shareholders in the amount of $.069000 per share,
payable on June 29, 1999 to shareholders of record as of June 23, 1999.
13
<PAGE>
MuniYield New Jersey Fund, Inc. May 31, 1999
YEAR 2000 ISSUES
Many computer systems were designed using only two digits to designate years.
These systems may not be able to distinguish the Year 2000 from the Year 1900
(commonly known as the "Year 2000 Problem"). The Fund could be adversely
affected if the computer systems used by the Fund's management or other Fund
service providers do not properly address this problem before January 1, 2000.
The Fund's management expects to have addressed this problem before then, and
does not anticipate that the services it provides will be adversely affected.
The Fund's other service providers have told the Fund's management that they
also expect to resolve the Year 2000 Problem, and the Fund's management will
continue to monitor the situation as the Year 2000 approaches. However, if the
problem has not been fully addressed, the Fund could be negatively affected. The
Year 2000 Problem could also have a negative impact on the securities in which
the Fund invests and this could hurt the Fund's investment returns.
14
<PAGE>
MuniYield New Jersey Fund, Inc. May 31, 1999
OFFICERS AND DIRECTORS
Terry K. Glenn, President and Director
James H. Bodurtha, Director
Herbert I. London, Director
Robert R. Martin, Director
Joseph L. May, Director
Andre F. Perold, Director
Arthur Zeikel, Director
Vincent R. Giordano, Senior Vice President
Kenneth A. Jacob, Vice President
Theodore R. Jaeckel Jr., Vice President
Donald C. Burke, Vice President and Treasurer
Alice A. Pellegrino, Secretary
- --------------------------------------------------------------------------------
Gerald M. Richard, Treasurer and Philip M. Mandel, Secretary of MuniYield New
Jersey Fund, Inc. have recently retired. Their colleagues at Merrill Lynch Asset
Management, L.P. join the Fund's Board of Directors in wishing Mr. Richard and
Mr. Mandel well in their retirements.
- --------------------------------------------------------------------------------
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 Whitehall Bank & Trust Company
One State Street
New York, NY 10004
NYSE Symbol
MYJ
15
<PAGE>
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--5/99
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