MUNIYIELD
NEW JERSEY
FUND, INC.
[GRAPHIC OMITTED]
STRATEGIC
Performance
Annual Report
November 30, 2000
<PAGE>
MUNIYIELD NEW JERSEY FUND, INC.
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.
<PAGE>
MuniYield New Jersey Fund, Inc., November 30, 2000
DEAR SHAREHOLDER
For the year ended November 30, 2000, the Common Stock of MuniYield New Jersey
Fund, Inc. earned $0.806 per share income dividends, which included earned and
unpaid dividends of $0.067. This represents a net annualized yield of 5.76%,
based on a month-end per share net asset value of $13.99. Over the same period,
the total investment return on the Fund's Common Stock was +9.71%, based on a
change in per share net asset value from $13.60 to $13.99, and assuming
reinvestment of $0.806 per share income dividends.
For the six-month period ended November 30, 2000, the total investment return on
the Fund's Common Stock was +10.56%, based on a change in per share net asset
value from $13.05 to $13.99, and assuming reinvestment of $0.398 per share
income dividends.
For the six-month period ended November 30, 2000, the Fund's Auction Market
Preferred Stock had an average yield of 3.72% for Series A and 3.84% for Series
B.
The Municipal Market Environment
During the six-month period ended November 30, 2000, long-term US Treasury bond
yields generally drifted lower. A number of economic indicators, particularly
employment, new home sales and consumer spending, have suggested that US
economic growth, while still strong, has moderated from 1999's robust levels.
Revised third-quarter 2000 US gross domestic product growth was 2.4%, well below
the first-quarter 2000 rate of 4.8% and the second-quarter 2000 rate of 5.6%.
This decline in economic growth suggested to some analysts that the Federal
Reserve Board was finished raising interest rates for its current interest rate
cycle. The Federal Reserve Board increased short-term interest rates at its May
meeting and has kept monetary policy steady at its subsequent meetings. (After
the close of the period, the Federal Reserve Board cut interest rates by 0.50%).
Given the potential for stable short-term interest rates in the coming months,
investor emphasis focused on the continuing US Treasury debt reduction program
and forecasts of sizeable Federal budgetary surpluses going forward. Many
investors have concluded that there will be a significant future shortage of
longer-dated maturity US Treasury securities. By late August, US Treasury bond
yields declined 30 basis points (0.30%) to 5.66%.
However, during September and early October, bond prices were unable to maintain
their earlier gains. Rising oil prices were the major impetus, as many investors
feared that higher oil prices would result in increased inflationary pressures.
Additionally, US corporations issued large amounts of taxable debt in order to
take advantage of the current low interest rate environment. During the last
three months, US corporations issued more than $100 billion in investment-grade
securities, offering yields in the 7.25%-8.50% range. Many investors found these
taxable issues an attractive and more plentiful alternative to US Treasury
bonds. As the demand for US Treasury issues weakened, US bond yields rose. By
early October 2000, US Treasury bond yields had risen to 5.90%.
Declining oil prices and, more importantly, a dramatic decline in US equity
prices, particularly among NASDAQ issues, allowed the bond rally to resume in
late October. Bond yields declined for the remainder of the period as further
evidence of a moderating domestic economy were released. In particular, labor
conditions appeared to have loosened as weekly unemployment claims rose
consistently during the month. A further series of significant declines on
various US equity exchanges also caused bond prices to rise. By November 30,
2000, US Treasury bond yields declined to 5.61%, their lowest level for the
year.
The six-month period ended November 30, 2000 was one of the few periods in
recent years in which the tax-exempt bond market outperformed its taxable
counterpart, the US Treasury bond market. While municipal bond yields followed
the similar, seesaw pattern of Treasury bond yields, tax-exempt bond price
volatility was significantly reduced. Municipal bond yields traded in a
relatively narrow range during much of November 2000. Overall investor demand
for municipal bonds remained strong, allowing tax-exempt bond yields, as
measured by the Bond Buyer Revenue Bond Index, to decline more than 45 basis
points to end the period at 5.74%.
New long-term tax-exempt issuance has continued to decline, although in recent
months the rate of this decline has slowed. Over the past three months, more
than $50 billion in new long-term municipal bonds was issued, a decline of 8.5%
compared to the same three-month period in 1999. During the last six months,
approximately $106 billion in tax-exempt bonds was issued, representing a
similar decline of 8.5%. Approximately $195 billion in new municipal securities
was issued during the last 12 months, a decline of 16% compared to the same
12-month period in 1999. This reduction in tax-exempt bond issuance helped
provide a solid technical support for the municipal bond market.
The demand for municipal bonds came from a number of non-traditional and
conventional sources. Derivative/arbitrage programs and insurance companies have
remained the dominant institutional buyers, while individual retail purchases
also remained strong. Traditional, open-end tax-exempt mutual funds have
continued to see significant disintermediation. It was recently reported that
thus far during the 2000 calendar year, long-term municipal bond mutual funds
experienced net cash outflows of more than $15 billion. Fortunately, the
combination of reduced new bond issuance and ongoing demand from non-traditional
sources has been able to more than offset the decline in demand from tax-exempt
mutual funds. This favorable balance has fostered a significant decline in
municipal bond yields in recent months.
Currently, there is no reason to expect that the positive technical position of
the municipal bond market will significantly deteriorate. The steeply positive
yield curve and the relatively high credit quality that the tax-exempt bond
market offers should continue to attract different classes of institutional
buyers. Strong state and local governmental financial conditions also suggest
that issuance should remain manageable into next year. Recently, research
analysts suggested that issuance in 2001 is likely to be in the $200 billion
range, which implies that next year's issuance is unlikely to exert any
significant pressure on the tax-exempt bond market.
However, the presidential election may affect the tax-exempt bond market.
Various tax and spending programs proposed by President-elect Bush have obvious
implications for state and local governments as well as for corporate and
individual taxpayers. Recent congressional elections resulted in very narrow
majorities in both the House and the Senate, making significant legislative
changes difficult in the coming session. Political history has shown that the
enactment of campaign promises, Republican and Democratic, has very often been a
long, laborious process. This suggests that over the next few months US economic
factors will likely have a greater impact upon bond yields than political
considerations.
Portfolio Strategy
For the six months ended November 30, 2000, we maintained a fully invested
strategy throughout much of the period, which produced solid returns for
shareholders as the tax-exempt bond market rebounded from depressed levels. We
took steps earlier in the year to reduce the Fund's duration. This served to
diminish the Fund's sensitivity to interest rate fluctuations, but may also have
reduced its total return. However, a renewed focus on strategies designed to
enhance the Fund's dividend income appears to have compensated for the
difference in market appreciation. Significantly, the very competitive
distribution yield provided to shareholders remains the Fund's most appealing
attribute, especially within the context of its conservative investment
parameters. Overall, almost 90% of the securities held by the portfolio are
rated in the top three rating categories by at least one of the major rating
agencies. This emphasis on quality proved to be especially beneficial in recent
months as credit spreads remained under pressure, causing valuations of
lower-quality securities to lag the overall market.
The technical backdrop for New Jersey municipal issuance has remained favorable,
supported by strong demand from individual investors and reduced supply. In
comparison to an 8% decline in national municipal new-issue volume for the last
six months,
Pages 2 & 3
<PAGE>
MuniYield New Jersey Fund, Inc., November 30, 2000
New Jersey issuance tumbled roughly 19% from year-ago levels. While this dynamic
has contributed to strong performance for this sector compared to the general
market, reduced volume both in terms of new and seasoned issues hampered our
ability to successfully implement certain aspects of our portfolio strategy.
With year end approaching, these challenges are unlikely to abate soon; however,
issuance is likely to accelerate during the first and second quarters of 2001,
providing a more flexible environment for managing the portfolio.
New Jersey continues to exhibit solid credit fundamentals, as the state's
financial profile remains healthy in the wake of robust economic conditions.
General Fund revenue collections rose 12.5% during fiscal year 1999, while the
rate of increase in expenditures was kept slightly below 2%. This marks the
second consecutive year of running an operating surplus, which, in conjunction
with a flush Rainy Day Fund and a moderate debt burden, demonstrates the
conservative approach used to manage the state's finances. The New Jersey State
Legislature recently passed an $8.6 billion bill for school construction, which
is expected to be financed largely through bonds issued by the Economic
Development Authority. Although not a general obligation debt of the state, this
new financing will be considered an annual appropriation-backed obligation. The
ensuing increase in the state's debt service burden bears watching as a less
favorable economic environment may limit budget flexibility in subsequent years.
The Fund's cost of borrowing remained relatively stable throughout the period,
reflecting the pause in Federal Reserve Board policy actions since May.
Long-term tax-exempt interest rates, as previously noted, declined modestly,
causing the municipal yield curve to flatten. While this flattening has reduced
the incremental yield enhancement resulting from leveraging the Fund's Common
Stock, it is important to note that, in contrast to the inverted shape of the
Treasury curve, the municipal yield curve remains positively sloped. Historical
analysis of the municipal yield curve demonstrates this resiliency throughout a
number of economic cycles. Furthermore, with expectations mounting that monetary
policy may soon become less restrictive, the benefits of leverage could increase
as short-term interest rates decline in response, effectively lowering market
rates on the Fund's outstanding Preferred Stock. However, should the spread
between short-term and long-term interest rates narrow, the benefits of leverage
will decline and, as a result, reduce the yield on the Fund's Common Stock. (For
a complete explanation of the benefits and risks of leveraging, see page 1 of
this report to shareholders.)
In Conclusion
We appreciate your ongoing interest in MuniYield New Jersey Fund, Inc., and we
look forward to assisting you with your financial needs in the months and years
ahead.
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
January 5, 2001
SCHEDULE OF INVESTMENTS (in Thousands)
<TABLE>
<CAPTION>
S&P Moody's Face
STATE Ratings Ratings Amount Issue Value
====================================================================================================================================
<S> <C> <C> <C> <C> <C>
New Jersey--94.9% AAA Aaa $ 2,500 Camden County, New Jersey, Improvement Authority, Lease Revenue Bonds
(County Guaranteed), 6.15% due 10/01/2004 (d)(g) $ 2,688
----------------------------------------------------------------------------------------------------------------
AAA Aaa 3,815 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) 4,159
----------------------------------------------------------------------------------------------------------------
AAA Aaa 1,000 Carteret, New Jersey, Board of Education, COP, Refunding, 4.75% due
4/15/2019 (d) 923
----------------------------------------------------------------------------------------------------------------
NR* Aaa 3,930 Delaware River Port Authority of Pennsylvania and New Jersey Revenue
Bonds, RIB, Series 396, 7.65% due 1/01/2019 (c)(e) 4,404
----------------------------------------------------------------------------------------------------------------
East Orange, New Jersey, Board of Education, COP (c):
AAA Aaa 1,425 5.32%** due 8/01/2017 577
AAA Aaa 1,000 5.34%** due 2/01/2019 368
AAA Aaa 2,845 5.202%** due 8/01/2026 672
----------------------------------------------------------------------------------------------------------------
AAA Aaa 750 Essex County, New Jersey, Improvement Authority, Parking Facility
Revenue Refunding Bonds, 5% due 10/01/2022 (a) 712
----------------------------------------------------------------------------------------------------------------
Gloucester County, New Jersey, Improvement Authority, Solid Waste
Resource Recovery Refunding Bonds (Waste Management Inc. Project):
BBB NR* 1,180 AMT, Series B, 7% due 12/01/2029 1,215
BBB NR* 2,000 Series A, 6.85% due 12/01/2029 2,059
----------------------------------------------------------------------------------------------------------------
AAA Aaa 4,880 Hudson County, New Jersey, COP, Refunding (Correctional Facilities),
6.60% due 12/01/2021 (d) 5,082
----------------------------------------------------------------------------------------------------------------
AAA NR* 14,550 Hudson County, New Jersey, Improvement Authority, Facility Lease
Revenue Refunding Bonds (Hudson County Lease Project),
5.375% due 10/01/2024 (b) 14,462
----------------------------------------------------------------------------------------------------------------
AA Aa2 2,600 Jersey City, New Jersey, School, GO, 6.65% due 2/15/2002 (g) 2,717
----------------------------------------------------------------------------------------------------------------
AAA NR* 835 Metuchen, New Jersey, School District, GO, 5.15% due 9/15/2019 (b) 820
----------------------------------------------------------------------------------------------------------------
AAA Aaa 1,750 Middlesex County, New Jersey, COP, 4.85% due 6/15/2023 (d) 1,605
----------------------------------------------------------------------------------------------------------------
Middlesex County, New Jersey, Improvement Authority, Utility System
Revenue Bonds (Perth Amboy Project), Series B (a):
AAA Aaa 2,350 5.86%** due 9/01/2023 658
AAA Aaa 500 5.16%** due 9/01/2024 132
AAA Aaa 1,000 5.16%** due 9/01/2025 249
AAA Aaa 1,300 5.16%** due 9/01/2026 306
----------------------------------------------------------------------------------------------------------------
</TABLE>
Portfolio Abbreviations
To simplify the listings of MuniYield New Jersey Fund, Inc.'s portfolio holdings
in the Schedule of Investments, we have abbreviated the names of many of the
securities according to the list at right.
AMT Alternative Minimum Tax (subject to)
COP Certificates of Participation
EDA Economic Development Authority
GO General Obligation Bonds
M/F Multi-Family
RIB Residual Interest Bonds
VRDN Variable Rate Demand Notes
Pages 4 & 5
<PAGE>
MuniYield New Jersey Fund, Inc., November 30, 2000
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<TABLE>
<CAPTION>
S&P Moody's Face
STATE Ratings Ratings Amount Issue Value
====================================================================================================================================
<S> <C> <C> <C> <C> <C>
New Jersey AAA Aaa $ 4,000 New Brunswick, New Jersey, Housing Authority, Lease Revenue
(continued) Refunding Bonds, 4.625% due 7/01/2024 (b) $ 3,532
----------------------------------------------------------------------------------------------------------------
NR* Aa3 1,500 New Jersey EDA, Economic Development Revenue Refunding Bonds
(Burlington Coat Factory), 6.125% due 9/01/2010 1,596
----------------------------------------------------------------------------------------------------------------
BBB- NR* 1,500 New Jersey EDA, First Mortgage Revenue Bonds (Fellowship Village),
Series C, 5.50% due 1/01/2028 1,162
----------------------------------------------------------------------------------------------------------------
New Jersey EDA, First Mortgage Revenue Refunding Bonds (Fellowship
Village), Series A:
BBB- NR* 1,250 5.50% due 1/01/2018 1,026
BBB- NR* 5,000 5.50% due 1/01/2025 3,920
----------------------------------------------------------------------------------------------------------------
A1+c VMIG1+ 200 New Jersey EDA, Natural Gas Facilities Revenue Bonds (NUI
Corporation Project), VRDN, AMT, Series A, 4% due 6/01/2026 (a)(f) 200
----------------------------------------------------------------------------------------------------------------
NR* Aaa 5,575 New Jersey EDA, Natural Gas Facilities Revenue Refunding Bonds
(NUI Corporation), RIB, Series 371, 8.35% due 10/01/2022 (a)(e) 6,223
----------------------------------------------------------------------------------------------------------------
New Jersey EDA Revenue Bonds:
AAA Aaa 2,400 (Educational Testing Service), Series B, 6.25% due 5/15/2005 (d)(g) 2,602
AAA Aaa 10,000 (Transportation Project), Sublease, Series A, 5.875% due 5/01/2015 (c) 10,525
----------------------------------------------------------------------------------------------------------------
New Jersey EDA, Revenue Bonds (Saint Barnabas Medical Center Project),
Series A (d):
NR* Aaa 5,435 5.47%** due 7/01/2018 2,075
NR* Aaa 7,385 5.57%** due 7/01/2022 2,214
NR* Aaa 1,000 5.18%** due 7/01/2023 283
NR* Aaa 7,445 6.30%** due 7/01/2024 1,987
----------------------------------------------------------------------------------------------------------------
AAA Aaa 2,500 New Jersey EDA Revenue Refunding Bonds (RWJ Health Care Corporation),
6.50% due 7/01/2024 (c) 2,681
----------------------------------------------------------------------------------------------------------------
NR* Aa3 15,250 New Jersey EDA, Solid Waste Disposal Facilities Revenue Bonds (Garden
State Paper Company), 7.125% due 4/01/2022 16,054
----------------------------------------------------------------------------------------------------------------
New Jersey EDA, Water Facilities Revenue Bonds, AMT:
AAA Aaa 3,200 (Middlesex Water Company Project), 5.35% due 2/01/2038 3,051
NR* Aaa 3,335 RIB, Series 417, 9.30% due 11/01/2034 (b)(e) 3,786
----------------------------------------------------------------------------------------------------------------
A1+c VMIG1+ 200 New Jersey EDA, Water Facilities Revenue Refunding Bonds (United Water
of New Jersey Inc. Project), VRDN, Series B, 4.10% due 11/01/2025 (a)(f) 200
----------------------------------------------------------------------------------------------------------------
AAA Aaa 5,975 New Jersey Environmental Infrastructure Trust Revenue Bonds (Environmental
Infrastructure), Series A, 5.25% due 9/01/2017 5,980
----------------------------------------------------------------------------------------------------------------
New Jersey Health Care Facilities Financing Authority Revenue Bonds:
AAA Aaa 4,000 (Robert Wood University), 5.70% due 7/01/2020 (a) 4,086
NR* Baa1 4,200 (Southern Ocean County Hospital), Series A, 6.25% due 7/01/2023 3,867
----------------------------------------------------------------------------------------------------------------
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 6,325
BBB NR* 2,000 (Christian Health Care Center), Series A, 5.25% due 7/01/2013 1,725
AAA Aaa 2,150 (Hackensack University Medical Center), Series B, 5.20%
due 1/01/2028 (d) 2,045
BBB+ NR* 5,500 (Holy Name Hospital), 6% due 7/01/2025 4,830
AAA NR* 2,845 (Jersey Shore Medical Center), 6.75% due 7/01/2004 (a)(g) 3,098
AAA Aaa 2,155 (Jersey Shore Medical Center), 6.75% due 7/01/2019 (a) 2,328
AAA Aaa 1,500 (Meridian Health System Obligation Group), 5.25% due 7/01/2019 (c) 1,474
AAA Aaa 2,250 (Meridian Health System Obligation Group), 5.375% due 7/01/2024 (c) 2,213
AAA Aaa 2,945 (Meridian Health System Obligation Group), 5.25% due 7/01/2029 (c) 2,823
AAA Aaa 1,000 (Monmouth Medical Center), Series C, 6.25% due 7/01/2004 (c)(g) 1,074
AAA Aaa 3,075 (Saint Barnabas Health Center), Series B, 5% due 7/01/2024 2,857
AAA Aaa 2,000 (Saint Barnabas Health Center), Series B, 4.75% due 7/01/2028 (d) 1,757
AAA Aaa 1,700 (Saint Barnabas Hospital), Series B, 5.035%** due 7/01/2018 (d) 646
AAA Aaa 1,970 (Saint Barnabas Hospital), Series B, 5.044%** due 7/01/2020 (d) 663
AAA Aaa 2,365 (Saint Barnabas Hospital), Series B, 5.044%** due 7/01/2021 (d) 748
AAA Aaa 5,500 (Saint Barnabas Hospital), Series B, 5.05%** due 7/01/2023 (d) 1,550
BBB- Baa3 2,450 (Saint Elizabeth Hospital Obligation Group), 6% due 7/01/2020 2,137
BBB- Baa3 2,075 (Saint Elizabeth Hospital Obligation Group), 6% due 7/01/2027 (d) 1,764
AAA Aaa 2,300 (Virtua Health Issue), 4.75% due 7/01/2018 (c) 2,122
----------------------------------------------------------------------------------------------------------------
AAA Aaa 2,205 New Jersey Sports and Exposition Authority, Convention Center,
Luxury Tax Revenue Refunding Bonds, 5% due 9/01/2019 (d) 2,113
----------------------------------------------------------------------------------------------------------------
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 3,538
BBB Baa3 3,600 6.85% due 7/01/2002 3,799
----------------------------------------------------------------------------------------------------------------
New Jersey State Educational Facilities Authority Revenue Bonds
(Rowan University), Series B (b):
AAA Aaa 1,730 5.25% due 7/01/2017 1,728
AAA Aaa 1,620 5.25% due 7/01/2018 1,609
----------------------------------------------------------------------------------------------------------------
New Jersey State Educational Facilities Authority, Revenue Refunding
Bonds:
AA+ Aaa 1,000 (Institute for Advanced Study), Series F, 5% due 7/01/2018 966
AAA Aaa 2,225 (Ramapo College), Series G, 4.625% due 7/01/2022 (a) 1,969
A A3 6,030 (Stevens Institute of Technology), Series A, 6.80% due 7/01/2002 (g) 6,359
----------------------------------------------------------------------------------------------------------------
New Jersey State, GO:
AA+ Aa1 4,410 4.50% due 2/01/2016 4,024
AA+ Aa1 2,105 AMT, 7.05% due 7/15/2005 (g) 2,347
----------------------------------------------------------------------------------------------------------------
AAA Aaa 10,000 New Jersey State Higher Education Assistance Authority, Student Loan
Revenue Bonds, AMT, Series A, 5.30% due 6/01/2017 (a) 9,849
----------------------------------------------------------------------------------------------------------------
AA- A1 2,500 New Jersey State Highway Authority, Garden State Parkway, General
Revenue Refunding Bonds, 5.625% due 1/01/2030 2,530
----------------------------------------------------------------------------------------------------------------
New Jersey State Housing and Mortgage Finance Agency, Home Buyer
Revenue Bonds, AMT (d):
AAA Aaa 5,350 Series CC, 5.80% due 10/01/2020 5,361
AAA Aaa 5,035 Series M, 7% due 10/01/2026 5,306
AAA Aaa 3,335 Series U, 5.60% due 10/01/2012 3,456
----------------------------------------------------------------------------------------------------------------
AAA Aaa 2,000 New Jersey State Housing and Mortgage Finance Agency, M/F Housing
Revenue Refunding Bonds, Series A, 6.05% due 11/01/2020 (a) 2,035
----------------------------------------------------------------------------------------------------------------
AAA Aaa 7,150 New Jersey State Transit Corporation, COP, 6.50% due 10/01/2016 (c) 7,810
----------------------------------------------------------------------------------------------------------------
AAA Aaa 4,710 New Jersey State Transportation Trust Fund Authority, Transportation
System Revenue Bonds, Series A, 5% due 6/15/2018 (c) 4,536
----------------------------------------------------------------------------------------------------------------
AAA Aaa 5,000 New Jersey State Turnpike Authority, Turnpike Revenue Refunding
Bonds, Series A, 5.75% due 1/01/2019 (d) 5,175
----------------------------------------------------------------------------------------------------------------
AA- Aa 1,865 New Jersey Wastewater Treatment Trust Revenue Bonds, Series A, 6.50%
due 4/01/2004 (g) 2,011
----------------------------------------------------------------------------------------------------------------
</TABLE>
Page 6 & 7
<PAGE>
MuniYield New Jersey Fund, Inc., November 30, 2000
SCHEDULE OF INVESTMENTS (concluded) (in Thousands)
<TABLE>
<CAPTION>
S&P Moody's Face
STATE Ratings Ratings Amount Issue Value
====================================================================================================================================
<S> <C> <C> <C> <C> <C>
New Jersey North Brunswick Township, New Jersey, GO:
(concluded) NR* A1 $ 1,190 6.50% due 5/15/2012 $ 1,242
NR* A1 1,400 6.50% due 5/15/2013 1,462
----------------------------------------------------------------------------------------------------------------
Port Authority of New York and New Jersey, Consolidated Revenue Bonds:
AA- A1 5,000 93rd Series, 6.125% due 6/01/2094 5,430
AAA Aaa 2,300 104th Series, 4.75% due 1/15/2026 (a) 2,072
----------------------------------------------------------------------------------------------------------------
NR* Aaa 4,435 Port Authority of New York and New Jersey, Revenue Bonds, Trust
Receipts, AMT, Class R, Series 10, 7.05% due 1/15/2017 (c)(e) 4,772
----------------------------------------------------------------------------------------------------------------
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 12/01/2022 (d) 2,555
----------------------------------------------------------------------------------------------------------------
AA A1 5,485 Rutgers State University, New Jersey, Revenue Bonds, Series A, 4.75%
due 5/01/2029 4,849
----------------------------------------------------------------------------------------------------------------
AA A1 1,000 Rutgers State University, New Jersey, Revenue Refunding Bonds (State
University of New Jersey), Series A, 6.50% due 5/01/2018 1,040
----------------------------------------------------------------------------------------------------------------
AAA Aaa 8,750 South Jersey Transportation Authority, New Jersey, Transportation
System Revenue Refunding Bonds, 5% due 11/01/2029 (a) 8,168
----------------------------------------------------------------------------------------------------------------
Union County, New Jersey, Utilities Authority, Senior
Lease Revenue Refunding Bonds (Ogden Martin System of
Union), AMT, Series A (a)(e):
AAA Aaa 1,585 5.375% due 6/01/2017 1,584
AAA Aaa 1,175 5.375% due 6/01/2018 1,166
----------------------------------------------------------------------------------------------------------------
West Windsor-Plainsboro, New Jersey, Regional School District, GO,
Refunding (b):
AAA Aaa 2,500 4.75% due 9/15/2020 2,284
AAA Aaa 2,500 4.75% due 9/15/2021 2,269
AAA Aaa 2,500 4.75% due 9/15/2024 2,243
====================================================================================================================================
Puerto Rico--2.8% AAA Aaa 2,610 Puerto Rico Electric Power Authority, Power Revenue Bonds, Series HH,
5.25% due 7/01/2029 (c) 2,564
----------------------------------------------------------------------------------------------------------------
AAA Aaa 6,000 Puerto Rico Public Buildings Authority Revenue Bonds (Government
Facilities), Series B, 5% due 7/01/2027 (a) 5,700
====================================================================================================================================
Total Investments (Cost--$282,979)--97.7% 288,958
Other Assets Less Liabilities--2.3% 6,949
--------
Net Assets--100.0% $295,907
========
====================================================================================================================================
</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 November 30, 2000.
(f) 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, 2000.
(g) Prerefunded.
* Not Rated.
** Represents a zero coupon bond; 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.
Ratings of issues shown have not been audited by Deloitte & Touche LLP.
See Notes to Financial Statements.
================================================================================
Quality Profile
The quality ratings of securities in the Fund as of November 30, 2000 were as
follows:
--------------------------------------------------------------------------------
Percent of
S&P Rating/Moody's Rating Net Assets
--------------------------------------------------------------------------------
AAA/Aaa ................................................ 67.4%
AA/Aa .................................................. 14.4
A/A .................................................... 5.3
BBB/Baa ................................................ 10.5
Other+ ................................................. 0.1
--------------------------------------------------------------------------------
+ Temporary investments in short-term municipal securities.
STATEMENT OF ASSETS, LIABILITIES AND CAPITAL
<TABLE>
<CAPTION>
As of November 30, 2000
===================================================================================================================================
<S> <C> <C> <C>
Assets: Investments, at value (identified cost--$282,978,956) ........................ $288,957,932
Cash ......................................................................... 90,673
Receivables:
Interest .............................................................. $ 4,791,229
Securities sold ....................................................... 2,476,658 7,267,887
------------
Prepaid expenses and other assets ............................................ 9,869
------------
Total assets ................................................................. 296,326,361
------------
===================================================================================================================================
Liabilities: Payables:
Dividends to shareholders ............................................. 189,880
Investment adviser .................................................... 100,280 290,160
------------
Accrued expenses and other liabilities ....................................... 129,193
------------
Total liabilities ............................................................ 419,353
------------
===================================================================================================================================
Net Assets: Net assets ................................................................... $295,907,008
============
===================================================================================================================================
Capital: Capital Stock (200,000,000 shares authorized):
Preferred Stock, par value $.05 per share (3,900 shares of AMPS*
issued and outstanding at $25,000 per share liquidation preference) ... $ 97,500,000
Common Stock, par value $.10 per share (14,182,113 shares issued
and outstanding) ...................................................... $ 1,418,211
Paid-in capital in excess of par ............................................. 203,993,525
Undistributed investment income--net ......................................... 1,461,925
Accumulated realized capital losses on investments--net ...................... (11,262,359)
Accumulated distributions in excess of realized capital gains on investments . (3,183,270)
Unrealized appreciation on investments--net .................................. 5,978,976
------------
Total--Equivalent to $13.99 net asset value per share of Common Stock
(market price--$12.8125) ..................................................... 198,407,008
------------
Total capital ................................................................ $295,907,008
============
===================================================================================================================================
</TABLE>
* Auction Market Preferred Stock.
See Notes to Financial Statements.
Pages 8 & 9
<PAGE>
MuniYield New Jersey Fund, Inc., November 30, 2000
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
For the Year Ended November 30, 2000
===================================================================================================================================
<S> <C> <C> <C>
Investment Interest and amortization of premium and discount earned............... $ 15,902,305
Income:
===================================================================================================================================
Expenses: Investment advisory fees............................................... $ 1,345,833
Reorganization expenses................................................ 348,830
Commission fees........................................................ 234,375
Professional fees...................................................... 88,750
Accounting services.................................................... 83,066
Transfer agent fees.................................................... 76,048
Printing and shareholder reports....................................... 40,132
Directors' fees and expenses........................................... 23,379
Custodian fees......................................................... 20,387
Listing fees........................................................... 17,762
Pricing fees........................................................... 12,816
Other ................................................................ 21,436
-----------
Total expenses......................................................... 2,312,814
------------
Investment income--net................................................. 13,589,491
------------
===================================================================================================================================
Realized & Realized loss on investments--net...................................... (6,776,905)
Unrealized Gain (Loss) Change in unrealized appreciation/depreciation on investments--net..... 15,787,427
On Investments--Net: ------------
Net Increase in Net Assets Resulting from Operations .................. $ 22,600,013
============
===================================================================================================================================
</TABLE>
See Notes to Financial Statements.
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the Year Ended November 30,
--------------------------------
Increase (Decrease) in Net Assets: 2000 1999
================================================================================================================================
<S> <C> <C> <C>
Operations: Investment income--net................................................... $ 13,589,491 $ 9,663,671
Realized loss on investments--net........................................ (6,776,905) (1,543,155)
Change in unrealized appreciation/depreciation on investments--net....... 15,787,427 (16,500,165)
------------ ------------
Net increase (decrease) in net assets resulting from operations.......... 22,600,013 (8,379,649)
------------ ------------
================================================================================================================================
Dividends & Investment income--net:
Distributions to Common Stock...................................................... (10,342,123) (7,926,649)
Shareholders: Preferred Stock................................................... (3,418,395) (1,687,968)
In excess of realized gain on investments--net:
Common Stock...................................................... -- (2,790,654)
Preferred Stock................................................... -- (392,616)
Net decrease in net assets resulting from dividends and ------------ ------------
distributions to shareholders............................................ (13,760,518) (12,797,887)
------------ ------------
================================================================================================================================
Capital Stock Proceeds from issuance of Common Stock resulting from reorganization..... 65,807,130 --
Transactions: Proceeds from issuance of Preferred Stock resulting from
reorganization........................................................... 37,500,000 --
Value of shares issued to Common Stock shareholders in reinvestment
of dividends and distributions........................................... -- 1,678,698
------------ ------------
Net increase in net assets derived from capital stock transactions....... 103,307,130 1,678,698
------------ ------------
================================================================================================================================
Net Assets: Total increase (decrease) in net assets.................................. 112,146,625 (19,498,838)
Beginning of year........................................................ 183,760,383 203,259,221
------------ ------------
End of year*............................................................. $295,907,008 $183,760,383
============ ============
================================================================================================================================
*Undistributed investment income--net..................................... $ 1,461,925 $ 1,284,122
============ ============
================================================================================================================================
</TABLE>
See Notes to Financial Statements.
Pages 10 & 11
<PAGE>
MuniYield New Jersey Fund, Inc., November 30, 2000
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
The following per share data and ratios have been derived
from information provided in the financial statements. For the Year Ended November 30,
----------------------------------------------------
Increase (Decrease) in Net Asset Value: 2000 1999 1998 1997 1996
==================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of year ................... $ 13.60 $ 15.93 $ 15.51 $ 15.46 $ 15.56
Operating -------- -------- -------- -------- --------
Performance: Investment income--net ............................... 1.01 1.06 1.13 1.14 1.14
Realized and unrealized gain (loss) on
investments--net ..................................... .45 (1.98) .42 .05 (.10)
-------- -------- -------- -------- --------
Total from investment operations ..................... 1.46 (.92) 1.55 1.19 1.04
-------- -------- -------- -------- --------
Less dividends and distributions to Common Stock
shareholders:
Investment income--net ........................... (.81) (.87) (.89) (.91) (.91)
In excess of realized gain on investments--net ... -- (.31) -- -- --
-------- -------- -------- -------- --------
Total dividends and distributions to Common Stock
shareholders ......................................... (.81) (1.18) (.89) (.91) (.91)
-------- -------- -------- -------- --------
Effect of Preferred Stock activity:
Dividends and distributions to Preferred Stock
shareholders:
Investment income--net ...................... (.26) (.19) (.21) (.23) (.23)
In excess of realized gain on
investments--net ............................ -- (.04) (.03) -- --
-------- -------- -------- -------- --------
Total effect of Preferred Stock activity ............. (.26) (.23) (.24) (.23) (.23)
-------- -------- -------- -------- --------
Net asset value, end of year ......................... $ 13.99 $ 13.60 $ 15.93 $ 15.51 $ 15.46
======== ======== ======== ======== ========
Market price per share, end of year .................. $12.8125 $ 12.25 $ 16.75 $15.5625 $ 14.50
======== ======== ======== ======== ========
==================================================================================================================================
Total Investment Based on market price per share ...................... 11.55% (20.75%) 13.89% 13.96% 12.34%
Return:* ======== ======== ======== ======== ========
Based on net asset value per share ................... 9.71% (7.48%) 8.68% 6.52% 5.84%
======== ======== ======== ======== ========
==================================================================================================================================
Ratios Based on Total expenses, excluding reorganization expenses** .. 1.10% 1.05% 1.02% 1.04% 1.04%
Average Net Assets ======== ======== ======== ======== ========
Of Common Stock: Total expenses** ..................................... 1.29% 1.05% 1.02% 1.04% 1.04%
======== ======== ======== ======== ========
Total investment income--net** ....................... 7.59% 7.16% 7.24% 7.48% 7.41%
======== ======== ======== ======== ========
Amount of dividends to Preferred Stock shareholders .. 1.91% 1.25% 1.37% 1.50% 1.48%
======== ======== ======== ======== ========
Investment income--net, to Common Stock shareholders . 5.68% 5.91% 5.87% 5.98% 5.93%
======== ======== ======== ======== ========
==================================================================================================================================
Ratios Based on Total expenses, excluding reorganization expenses .... .73% .73% .71% .72% .72%
Total Average Net ======== ======== ======== ======== ========
Assets:**+ Total expenses ....................................... .86% .73% .71% .72% .72%
======== ======== ======== ======== ========
Total investment income--net ......................... 5.04% 4.95% 5.03% 5.14% 5.18%
======== ======== ======== ======== ========
==================================================================================================================================
Ratios Based on Dividends to Preferred Stock shareholders ............ 3.77% 2.81% 3.19% 3.35% 3.35%
Average Net Assets ======== ======== ======== ======== ========
Of Preferred Stock:
==================================================================================================================================
Supplemental Net assets, net of Preferred Stock, end of year
Data: (in thousands) ....................................... $198,407 $123,760 $143,259 $137,633 $136,483
======== ======== ======== ======== ========
Preferred Stock outstanding, end of year
(in thousands) ....................................... $ 97,500 $ 60,000 $ 60,000 $ 60,000 $ 60,000
======== ======== ======== ======== ========
Portfolio turnover ................................... 54.78% 57.94% 46.83% 30.50% 49.76%
======== ======== ======== ======== ========
==================================================================================================================================
Leverage: Asset coverage per $1,000 ............................ $ 3,035 $ 3,063 $ 3,388 $ 3,294 $ 3,275
======== ======== ======== ======== ========
==================================================================================================================================
Dividends Per Share Series A--Investment income--net ..................... $ 962 $ 703 $ 798 $ 838 $ 837
On Preferred Stock ======== ======== ======== ======== ========
Outstanding:++ Series B--Investment income--net ..................... $ 739 -- -- -- --
======== ======== ======== ======== ========
==================================================================================================================================
</TABLE>
* 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
charges.
** Do not reflect the effect of dividends to Preferred Stock shareholders.
+ Includes Common and Preferred Stock average net assets.
++ The Fund's Preferred Stock was issued on November 30, 1992 for Series A
and on February 7, 2000 for Series B.
See Notes to Financial Statements.
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 conformity with
accounting principles generally accepted in the United States of America, which
may require the use of management accruals and estimates. 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
investment strategies to increase or decrease the level of risk to which the
Fund is exposed more quickly and efficiently than transactions in other types of
instruments. Losses may arise due to changes in the value of the contract or if
the counterparty does not perform under the contract.
Pages 12 & 13
<PAGE>
MuniYield New Jersey Fund, Inc., November 30, 2000
NOTES TO FINANCIAL STATEMENTS (concluded)
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).
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) Dividends and distributions--Dividends from net investment income are
declared and paid monthly. Distributions of capital gains are recorded on the
ex-dividend dates. Distributions in excess of realized capital gains are due
primarily to differing tax treatments for futures transactions.
(f) Reclassification--Accounting principles generally accepted in the United
States of America require that certain components of net assets be adjusted to
reflect permanent differences between financial and tax reporting. Accordingly,
the current year's permanent book/tax differences of $348,830 have been
reclassified between paid-in capital in excess of par and undistributed net
investment income and $16,620 has been reclassified between accumulated net
realized capital losses and paid-in capital in excess of par. These
reclassifications have no effect on net assets or net asset value per share.
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 .50% of the Fund's average weekly net assets, including
proceeds from the issuance of Preferred Stock.
Accounting services were provided to the Fund by FAM.
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
year ended November 30, 2000 were $249,428,080 and $139,270,964, respectively.
Net realized losses for the year ended November 30, 2000 and net unrealized
gains as of November 30, 2000 were as follows:
--------------------------------------------------------------------------------
Realized Unrealized
Losses Gains
--------------------------------------------------------------------------------
Long-term investments .................... $(6,200,815) $5,978,976
Financial futures contracts .............. (576,090) --
----------- ----------
Total .................................... $(6,776,905) $5,978,976
=========== ==========
--------------------------------------------------------------------------------
As of November 30, 2000, net unrealized appreciation for Federal income tax
purposes aggregated $5,414,778, of which $10,598,727 related to appreciated
securities and $5,183,949 related to depreciated securities. The aggregate cost
of investments at November 30, 2000 for Federal income tax purposes was
$283,543,154.
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 year ended November 30, 2000 increased
by 5,081,330 as a result of issuance of Common Stock from reorganization. Shares
issued and outstanding during the year ended November 30, 1999 increased by
106,361, 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 yields in effect at
November 30, 2000 were as follows: Series A, 4.00% and Series B, 4.00%.
Shares issued and outstanding during the year ended November 30, 2000 increased
by 1,500 as a result of issuance of Preferred Stock from reorganization. Shares
issued and outstanding during the year ended November 30, 1999 remained
constant.
The Fund pays commissions to certain broker-dealers at the end of each auction
at an annual rate ranging from .25% to .375%, calculated on the proceeds of each
auction. For the year ended November 30, 2000, Merrill Lynch, Pierce, Fenner &
Smith Incorporated, an affiliate of FAM, earned $105,214 as commissions.
5. Capital Loss Carryforward:
At November 30, 2000, the Fund had a net capital loss carryforward of
approximately $12,151,000, of which $265,000 expires in 2001; $2,331,000 expires
in 2002; $2,699,000 expires in 2007; and $6,856,000 expires in 2008. This amount
will be available to offset like amounts of any future taxable gains.
6. Reorganization Plan:
On February 7, 2000, the Fund acquired all of the net assets of MuniVest New
Jersey Fund, Inc. pursuant to a plan of reorganization. The acquisition was
accomplished by a tax-free exchange of 5,519,681 Common Stock shares and 1,500
AMPS shares of MuniVest New Jersey Fund, Inc. for 5,081,330 Common Stock shares
and 1,500 AMPS shares of the Fund. MuniVest New Jersey Fund, Inc.'s net assets
on that date of $103,307,130, including $7,177,939 of unrealized depreciation
and $4,410,040 of accumulated net realized capital losses, were combined with
those of the Fund. The aggregate net assets of the Fund immediately after the
acquisition amounted to $281,169,154.
7. Subsequent Event:
On December 7, 2000, the Fund's Board of Directors declared an ordinary income
dividend to Common Stock shareholders in the amount of $.066606 per share,
payable on December 28, 2000 to shareholders of record as of December 20, 2000.
Pages 14 & 15
<PAGE>
MuniYield New Jersey Fund, Inc., November 30, 2000
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders,
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, 2000, 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 five-year
period then ended. These financial statements and the financial highlights are
the responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and the financial highlights based on our
audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. 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, 2000 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, 2000, the results of its operations, the changes
in its net assets, and the financial highlights for the respective stated
periods in conformity with accounting principles generally accepted in the
United States of America.
Deloitte & Touche LLP
Princeton, New Jersey
January 9, 2001
MANAGED DIVIDEND POLICY
The Fund's dividend policy is to distribute all or a portion of its net
investment income to its share holders on a monthly basis. 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.
Pages 16 & 17
<PAGE>
MuniYield New Jersey Fund, Inc., November 30, 2000
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, 2000 qualify as
tax-exempt interest dividends for Federal income tax purposes.
Additionally, there were no capital gains distributions paid by the Fund during
the year.
Please retain this information for your records.
OFFICERS AND DIRECTORS
Terry K. Glenn, President and Director
James H. Bodurtha, Director
Herbert I. London, Director
Joseph L. May, Director
Andre F. Perold, Director
Roberta Cooper Ramo, 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
--------------------------------------------------------------------------------
Arthur Zeikel, Director of MuniYield New Jersey Fund, Inc. has recently retired.
The Fund's Board of Directors wishes Mr. Zeikel well in his retirement.
--------------------------------------------------------------------------------
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:
The Bank of New York
100 Church Street
New York, NY 10286
NYSE Symbol
MYJ
Pages 18 & 19
<PAGE>
MuniYield New Jersey Fund, Inc. seeks to provide shareholders with as high a
level of current income exempt from Federal and New Jersey income taxes as is
consistent with its investment policies and prudent investment management by
investing primarily in a portfolio of long-term, investment-grade municipal
obligations the interest on which, in the opinion of bond counsel to the issuer,
is exempt from Federal and New Jersey income taxes.
This report, including the financial information herein, is transmitted to
shareholders of MuniYield New Jersey Fund, Inc. for their information. It is not
a prospectus. 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--11/00
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