MuniYield New York Insured Fund II, Inc.
Semi-Annual
Report
April 30, 1994
This report, including the financial information
herein, is transmitted to the shareholders of
MuniYield New York Insured Fund II, 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 repre-
sentation of future performance. The Fund has lev-
eraged 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 divi-
dend rates of the Preferred Stock may affect the
yield to Common Stock shareholders.
MuniYield New York Insured Fund II, Inc.
Box 9011
Princeton, NJ
08543-9011
<PAGE>
MuniYield New York Insured Fund II, Inc.
TO OUR SHAREHOLDERS
For the six-month period ended April 30, 1994, the Common Stock
of MuniYield New York Insured Fund II, Inc. earned $0.438 per
share income dividends, which includes earned and unpaid divi-
dends of $0.069. This represents a net annualized yield of
6.28%, based on a month-end per share net asset value of $14.06.
Over the same period, the total investment return on the Fund's
Common Stock was -8.72%, based on a change in per share net
asset value from $15.89 to $14.06, and assuming reinvestment of
$0.444 per share income dividends.
For the six-month period ended April 30, 1994, the Fund's Auction
Market Preferred Stock had an average yield of 3.06%.
The Environment
Inflationary expectations and investor sentiment changed for the
worse during the three-month period ended April 30, 1994. Follow-
ing stronger-than-expected economic results through year-end 1993,
the Federal Reserve Board broke with tradition on February 4, 1994
and publicly announced a modest 25 basis point (0.25%) increase in
short-term interest rates. At the March 22, 1994 meeting of the Fed-
eral Open Market Committee, the Federal Reserve Board again raised
the Federal Funds rate by 25 basis points, followed by another 25
basis point increase on April 18, 1994.
Rather than view the Federal Reserve Board's first tightening
move as a preemptive strike against inflation, fixed-income in-
vestors focused on Chairman Greenspan's implicit promise of fur-
ther tightening should the rate of inflation accelerate, and
bond prices declined sharply. The setback in the bond market was
also reflected in greater stock market volatility. While the sec-
ond and third increases in the Federal Funds rate were less of
a surprise, investors remained concerned that interest rates
would trend upward sharply as the central bank aggressively
attempted to contain the inflationary pressures of an improving
economy. At the same time, highly leveraged investors were forced
to liquidate positions in the face of declining stock and bond
prices. Investor confidence was not restored with the announce-
ment of the surprisingly slow 2.6% gross domestic product growth
rate for the first calendar quarter of 1994. Instead, investors
focused on the higher-than-expected (but still moderate) broad
inflation measures and became concerned that business activity
was beginning to stagnate as inflationary pressures were in-
creasing.
<PAGE>
The volatility in the US capital markets was mirrored in inter-
national markets during the period. Political and economic develop-
ments, along with concerns of heightened global inflationary
pressures, led to a sell-off in most capital markets, especially
the emerging markets that had appreciated strongly in 1993.
The Municipal Market
During the six months ended April 30, 1994, tax-exempt bond
yields exhibited considerable volatility as they rose to their
highest level in the past two years. As measured by the Bond
Buyer Revenue Bond Index, the yield on newly issued municipal
bonds maturing in 30 years rose over 90 basis points to 6.42% by
the end of April. Yields on seasoned municipal revenue bonds rose
by over 100 basis points in sympathy with the equally dramatic
increase in long-term US Treasury bond yields. By the end of
April, yields on US Treasury securities rose by over 95 basis
points to approximately 7.30%.
Long-term tax-exempt bond yields were essentially unchanged from
the end of October 1993 to the end of January 1994. However, on a
weekly basis, tax-exempt bond yields fluctuated by as much as 15
basis points as investors were unable to reconcile the rapid
economic growth seen late last year with continued low inflation.
Following the initial interest rate increase by the Federal
Reserve Board in early February, municipal bond prices began to
erode in concert with taxable bond prices as investors began to
sell securities in anticipation of further interest rate in-
creases. This fear led investors to withdraw from the tax-exempt
market. From early February to the end of March, total assets of
all tax-exempt bond funds declined by $14 billion to $247 billion.
This decline in investor demand, coupled with fears that the ro-
bust economic recovery seen during the fourth quarter of 1993
would continue well into 1994, helped push municipal bond yields
higher in February and March. Attracted by tax-exempt yields in
excess of 6.25%, investor demand returned in April, allowing
yields to decline approximately 15 basis points to end the April
period at approximately 6.40%.
A rise in tax-exempt bond yields the magnitude of that exper-
ienced over the past six months has not been seen since 1987
when municipal bond rates rose 250 basis points between March
and October of that year. It is very important to note that the
recent municipal bond price declines were largely the result of
consistent and insistent selling pressures over the last two
months. In 1987, the tax-exempt bond market was much more vol-
atile and, at times, chaotic as investors sought to liquidate
positions without concern for fundamental value. For the most
part, the recent price deterioration has been orderly, and the
municipal bond market's liquidity and integrity have not been
challenged or jeopardized.
<PAGE>
To a large extent, the municipal bond market has continued to be
supported by its strong technical position. New-issue volume for
the last six months has been less than $105 billion. This rep-
resents a decline of approximately 20% versus the comparable
period a year ago. This decline was expected and has been dis-
cussed in previous shareholder reports. This reduced issuance
has minimized potential selling pressure in recent months since
institutional investors have been wary of selling appreciable
amounts of securities that they may be unable to replace later
this year at any price level. We expect this decline in issuance
to continue since we anticipate recent yield increases to sig-
nificantly impact future municipal bond issuance. Just as higher
mortgage rates slow home mortgage refinancings, the recent rise
in bond yields will prevent bond refinancings from becoming the
driving force in bond issuance in 1994 as they were in 1993.
Despite recent price declines, tax-exempt securities remain among
the most attractive investment alternatives available. After the
recent yield increases, longer-term municipal securities yielded
approximately 90% of comparable US Treasury yields. Purchasers
of these municipal bonds also accrue substantial after-tax yield
advantages. To investors in the 39% marginal Federal income tax
bracket, the purchase of a municipal bond yielding 6.50% repre-
sents an after-tax equivalent of 10.65%. With prevailing esti-
mates of 1994 inflation at no more than 3%--4%, real after-tax
rates in excess of 6.50% easily compensate longer-term investors
for much of the price volatility recently experienced.
Portfolio Strategy
During the six months ended April 30, 1994, the New York sector
of the tax-exempt arena closely mirrored, and in some instances
exceeded, the volatility witnessed in the municipal market in
general. Faced with the same factors that weighed on the market
as a whole, the relative performance of New York tax-exempt
issues was further hindered by a significant increase in the
volume of securities offered for sale by New York State, New York
City and each of their respective political subdivisions. While
national issuance during the period contracted by more than 19%
as compared to the same period of last year, volume of New York
tax-exempt securities increased by more than 45%, soaring to over
$16 billion and representing the largest single-state issuer of
debt in the nation. As such, while general market municipal bonds
found a certain measure of price support in the positive tech-
nical foundation underlying their trading, New York tax-exempt
issues were forced to adjust at various points to levels which
enabled both local and national investors to absorb the supply.
Mitigating these adjustments in yields was the adoption on the
part of investors of a more positive outlook for the fundamental
credit prospects within the State as both the national and re-
gional economies continue to show signs of improvement.
<PAGE>
Portfolio decisions throughout the six months were guided by a
decidedly conservative posture. While the Fund maintained an al-
most fully invested stance throughout the period, its structure
at the start of the period was less aggressive than general mar-
ket fundamentals may have warranted. As the issuance witnessed
during the period began and the forward outlook for interest
rates in general became more uncertain, our trading activity
sought to capitalize on the opportunities inherent in such an en-
vironment by drawing down the Fund's average portfolio maturity
and shifting its focus toward the generation of tax-exempt in-
come. Issues used to facilitate this objective were those deemed
to possess strong qualities of protection from redemption prior
to maturity and superior qualities of creditworthiness relative
to the universe of New York tax-exempt bonds.
In Conclusion
We appreciate your ongoing interest in MuniYield New York Insured
Fund II, Inc., and we look forward to assisting you with your
financial needs in the months and years to come.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Vincent R. Giordano)
Vincent R. Giordano
Vice President and Portfolio Manager
June 3, 1994
<PAGE>
THE BENEFITS AND RISKS OF LEVERAGING
MuniYield New York Insured Fund II, 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 Pre-
ferred 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 cap-
italization 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.
In this case, the dividends paid to Preferred Stock shareholders
are significantly lower than the income earned on the fund's
long-term investments, and therefore the Common Stock shareholders
are the beneficiaries of the incremental yield. However, if short-
term interest rates rise, narrowing the differential between
short-term and long-term interest rates, the incremental yield
pick-up on the Common Stock will be reduced. At the same time, the
market value of the fund's Common Stock (that is, its price as lis-
ted on the New York Stock Exchange) may, as a result, decline.
Furthermore, if long-term interest rates rise, the Common Stock's
net asset value will reflect the full decline in the price of the
portfolio's investments, since the value of the fund's Preferred
Stock does not fluctuate. In addition to the decline in net asset
value, the market value of the fund's Common Stock may also decline.
<PAGE>
PORTFOLIO ABBREVIATIONS
To simplify the listing of MuniYield New York Insured Fund II,
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
GO General Obligation Bonds
HFA Housing Finance Authority
IDA Industrial Development Authority
M/F Multi-Family
PCR Pollution Control Revenue Bonds
UT Unlimited Tax
VRDN Variable Rate Demand Notes
<TABLE>
SCHEDULE OF INVESTMENTS (in Thousands)
<CAPTION>
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
New Jersey--1.7%
<S> <S> <C> <S> <C>
A1+ VMIG1 $ 3,900 Port Authority of New York and New Jersey, Special Obligation Revenue Bonds
(Versatile Structure Obligations), VRDN, Series 1, 3% due 8/01/2028 (a) $ 3,900
<CAPTION>
New York--97.0%
<S> <S> <C> <S> <C>
A+ A2 3,000 Allegany County, New York, IDA, Solid Waste Disposal Facility Revenue Bonds
(Atlantic Richfield Co.), AMT, 6.625% due 9/01/2016 3,068
AAA Aaa 1,500 Broome County, New York, COP, Public Safety Facility, 5.25% due 4/01/2015 (c) 1,329
Metropolitan Transportation Authority, New York, Commuter Facilities Revenue Refunding
Bonds, Series B (c):
AAA Aaa 1,620 6.125% due 7/01/2012 1,634
AAA Aaa 12,250 6.25% due 7/01/2017 12,276
AAA Aaa 8,650 6.25% due 7/01/2022 8,668
AAA Aaa 2,825 New York City Educational Construction Fund Revenue Bonds, Senior Series A, 6.25%
due 4/01/2003 (c) 2,985
<PAGE>
New York City, New York, GO:
AAA Aaa 2,715 Refunding, Series A, UT, 5.75% due 8/01/2009 (b) 2,674
A- Baa1 100 Refunding, VRDN, Series D, UT, 2.90% due 8/01/2021 (a) 100
AAA Aaa 3,000 Series C, Subseries C-1, 6.625% due 8/01/2013 (c) 3,252
AAA Aaa 2,000 Series C, Subseries C-1, 6.625% due 8/01/2015 (d) 2,165
A- Baa1 3,000 Series H, UT, 7% due 2/01/2021 3,124
A- Baa1 1,900 Series H, UT, 7% due 2/01/2022 1,979
A- VMIG1 100 VRDN, UT, Subseries A-4, 3% due 8/01/1995 (a) 100
AAA Aaa 3,325 New York City, New York, Health and Hospital Authority, Local Government Revenue
Refunding Bonds, Series A, 5.75% due 2/15/2022 (d) 3,090
NR NR 100 New York City, New York, Industrial Development Revenue Bonds, VRDN, AMT, 3.05% due
11/01/2015 (a) 100
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<CAPTION>
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
New York (continued)
<S> <S> <C> <S> <C>
New York City, New York, Municipal Water Finance Authority, Water and Sewer System
Revenue Bonds:
AAA Aaa $ 3,300 Refunding, Series A, 5.75% due 6/15/2018 (d) $ 3,092
AAA Aaa 5,000 Series A, 7% due 6/15/2015 (b) 5,331
AAA Aaa 3,500 Series A, 6.25% due 6/15/2021 (b) 3,502
AAA Aaa 1,150 Series C, 6.50% due 6/15/1997 (d)(g) 1,226
AAA Aaa 7,955 Series C, 6.50% due 6/15/2021 (d) 8,095
A1+ VMIG1 100 VRDN, Series C, 2.75% due 6/15/2022 (a) 100
AAA VMIG1 1,900 VRDN, Series C, 2.75% due 6/15/2023 (a)(b) 1,900
New York State Dormitory Authority Revenue Bonds:
AAA Aaa 1,750 (Mount Sinai School of Medicine), 6.75% due 7/01/2009 (c) 1,863
AAA Aaa 7,515 Refunding (Marist College), 6% due 7/01/2022 (c) 7,276
AAA Aaa 5,000 Refunding (New York University), Series A, 5% due 7/01/2009 (c) 4,557
BBB+ Baa1 2,000 Refunding (State University Educational Facilities), Series B, 7% due 5/15/2016 2,112
AAA Aaa 1,050 (Saint John's University), 6.875% due 7/01/2011 (d) 1,107
New York State Energy Research and Development Authority, Electric Facilities Revenue
Bonds, Series A, AMT:
AAA Aaa 4,450 (Consolidated Edison Co.), 6.75% due 1/15/2027 (c) 4,570
BB+ Baa3 2,000 (Long Island Lighting Co.), 7.15% due 2/01/2022 2,015
AAA Aaa 4,500 New York State Energy Research and Development Authority, Gas Facilities Revenue
Bonds (Brooklyn Union Gas Co.), AMT, Series B, 6.75% due 2/01/2024 (c) 4,688
<PAGE>
New York State Energy Research and Development Authority, PCR:
A1+ NR 100 (Niagara Power Corporation Project), Series B, VRDN, AMT, 3.15% due 7/01/2027 (a) 100
AAA Aaa 2,500 Refunding (Niagara Mohawk Corporation Project), Series A, 6.625% due 10/01/2013 (b) 2,586
NR NR 200 Refunding (Niagara Mohawk Power Corporation), Series A, VRDN, 2.90% due
3/01/2027 (a) 200
AAA Aaa 9,200 Refunding (Rochester Gas and Electric Project), AMT, Series B, 6.50% due 5/15/2032
(c) 9,308
AAA Aaa 5,000 Solid Waste Disposal (New York State Electric and Gas Co. Project), Series A, AMT,
5.70% due 12/01/2028 (c) 4,515
A Aa 2,900 New York State Environmental Facilities Corporation, PCR (State Water Revolving Fund),
Series E, 6.50% due 6/15/2014 2,984
A- A3 1,325 New York State Environmental Facilities Corporation, Water Facilities Revenue Bonds
(New Rochelle Water Co. Project), AMT, 6.40% due 12/01/2024 1,304
A- A 1,210 New York State GO, 6.70% due 11/01/2010 1,269
New York State HFA, M/F Mortgage Housing Insured Revenue Refunding Bonds,
Series C (e):
AAA Aa 1,000 6.45% due 8/15/2014 1,001
AAA Aa 2,000 6.50% due 8/15/2024 1,984
New York State HFA, Service Contract Obligation Revenue Bonds:
BBB Baa1 1,000 Refunding, Series F, 5.375% due 9/15/2011 889
AAA Aaa 1,000 Series A, 5.50% due 9/15/2022 (f) 900
A A 3,500 New York State Local Government Assistance Corporation, Revenue Refunding Bonds,
Series E, 6% due 4/01/2014 3,397
New York State Medical Care Facilities Finance Agency Revenue Bonds:
AAA Aaa 2,500 (Mental Health Services Facility), Series A, 6.375% due 8/15/2010 (b) 2,567
AAA Aaa 2,970 (Mental Health Services Facility), Series A, 5.50% due 8/15/2021 (b) 2,676
AAA Aaa 2,220 (Mental Health Services Facility), Series B, 6.25% due 8/15/2010 (d) 2,255
AAA Aaa 2,000 (Mental Health Service Facilities Improvement), Series D, 5.90% due 8/15/2022 (d) 1,905
AAA NR 4,000 Refunding (Hospital and Nursing Home), Series B, 6.20% due 8/15/2022 3,901
AAA Aaa 8,275 Refunding (Hospital and Nursing Home), Series C, 6.375% due 8/15/2029 (c) 8,364
AAA Aaa 2,610 (Saint Peter's Hospital), Series A, 5.375% due 11/01/2013 (d) 2,385
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in Thousands)
<CAPTION>
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
New York (concluded)
<S> <S> <C> <S> <C>
NR Aa $ 3,000 New York State Mortgage Agency, Homeowner Mortgage Revenue Bonds, Series 31-A,
5.375% due 10/01/2017 $ 2,603
New York State Power Authority, General Purpose and Revenue Bonds:
AAA Aaa 7,000 Refunding, Series CC, 5.25% due 1/01/2018 (c) 6,132
AAA Aaa 4,715 Series Y, 6% due 1/01/2020 (d) 4,576
New York State Thruway Authority, General Revenue Bonds:
AAA Aaa 5,500 Series A, 5.50% due 1/01/2023 (b) 4,952
AAA Aaa 2,450 Series B, 5% due 1/01/2014 (c) 2,131
AAA Aaa 4,000 New York State Urban Development Corporation, Revenue Refunding Bonds (Correctional
Facilities), 5.25% due 1/01/2018 (d) 3,495
NR Baa 3,500 North Country, New York, Development Authority Revenue Bonds (Solid Waste Management
System), Series A, 6.75% due 7/01/2012 3,529
North Hempstead, New York, Revenue Refunding Bonds, Series B (b):
AAA Aaa 1,745 6.40% due 4/01/2013 1,837
AAA Aaa 555 6.40% due 4/01/2017 584
Suffolk County, New York, Water Authority, Waterworks Revenue Bonds:
AAA Aaa 2,050 5% due 6/01/2012 (c) 1,817
AAA Aaa 10,000 Refunding, Series B, 5.625% due 6/01/2016 (d) 9,313
Syracuse, New York, COP, Revenue Bonds (Syracuse Hancock International Airport),
AMT (b):
AAA Aaa 3,650 6.625% due 1/01/2012 3,829
AAA Aaa 3,120 6.50% due 1/01/2017 3,178
Triborough Bridge and Tunnel Authority, New York, Special Obligation Revenue
Refunding Bonds:
AAA Aaa 3,230 6.20% due 1/01/2008 (b) 3,305
AAA Aaa 6,575 6.25% due 1/01/2012 (d) 6,665
AAA Aaa 7,025 6% due 1/01/2015 (d) 6,902
AAA Aaa 2,000 Series B, 6.875% due 1/01/2015 (c) 2,092
Total Investments (Cost--$226,749)--98.7% 223,308
Other Assets Less Liabilities--1.3% 2,952
--------
Net Assets--100.0% $226,260
========
<PAGE>
<FN>
(a) The interest rate is subject to change periodically based
upon prevailing market rates. The interest rate shown is the
rate in effect at April 30, 1994.
(b) FGIC Insured.
(c) MBIA Insured.
(d) AMBAC Insured.
(e) FHA Insured.
(f) CAPMAC Insured.
(g) Prerefunded.
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Statement of Assets, Liabilities and Capital as of April 30, 1994
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$226,749,048) (Note 1a) $223,307,627
Cash 44,876
Interest receivable 4,182,288
Deferred organization expenses (Note 1e) 94,339
Prepaid expenses and other assets 57,726
------------
Total assets 227,686,856
------------
Liabilities: Payables:
Securities purchased $ 910,257
Dividends to shareholders (Note 1g) 426,789
Investment adviser (Note 2) 89,713 1,426,759
------------ ------------
Total liabilities 1,426,759
------------
Net Assets: Net assets $226,260,097
============
<PAGE>
Capital: Capital Stock (200,000,000 shares authorized) (Note 4):
Preferred Stock, par value $.10 per share (1,400 shares of AMPS*
issued and outstanding at $50,000 per share liquidation preference) $ 70,000,000
Common Stock, par value $.10 per share (11,114,832 shares issued
and outstanding) $ 1,111,483
Paid-in capital in excess of par 154,792,339
Undistributed investment income--net 822,438
Undistributed realized capital gains--net 2,975,258
Unrealized depreciation on investments--net (3,441,421)
------------
Total--Equivalent to $14.06 net asset value per share of Common Stock
(market price--$13.125) 156,260,097
------------
Total capital $226,260,097
============
<FN>
* Auction Market Preferred Stock.
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (continued)
<TABLE>
Statement of Operations
<CAPTION>
For the
Six Months Ended
April 30, 1994
<S> <S> <C> <C>
Investment Income Interest and amortization of premium and discount earned $ 6,844,186
(Note 1d):
Expenses: Investment advisory fees (Note 2) $ 597,538
Commission fees (Note 4) 126,287
Professional fees 38,435
Transfer agent fees 24,708
Accounting services (Note 2) 21,963
Printing and shareholder reports 19,218
Listing fees 10,982
Directors' fees and expenses 10,982
Custodian fees 5,491
Pricing fees 2,745
Amortization of organization expenses (Note 1e) 2,745
Other 10,982
------------
Total expenses 872,076
------------
Investment income--net 5,972,110
------------
Realized & Realized gain on investments--net 2,975,269
Unrealized Gain Change in unrealized appreciation/depreciation on investments--net (23,259,581)
(Loss) on ------------
Investments--Net Net Decrease in Net Assets Resulting from Operations $(14,312,202)
(Notes 1d & 3): ============
See Notes to Financial Statements.
</TABLE>
<PAGE>
FINANCIAL INFORMATION (continued)
<TABLE>
Statements of Changes in Net Assets
<CAPTION>
For the Six For the
Months Ended Year Ended
April 30, October 31,
Increase (Decrease) in Net Assets: 1994 1993
<S> <S> <C> <C>
Operations: Investment income--net $ 5,972,110 $ 12,334,091
Realized gain on investments--net 2,975,269 618,793
Change in unrealized appreciation/depreciation on investments--net (23,259,581) 26,508,494
------------ ------------
Net increase (decrease) in net assets resulting from operations (14,312,202) 39,461,378
------------ ------------
Dividends & Investment income--net:
Distributions to Common Stock (4,856,148) (10,100,378)
Shareholders Preferred Stock (1,066,786) (2,264,794)
(Note 1g): Realized gain on investments--net:
Common Stock (81,338) --
Preferred Stock (18,298) --
------------ ------------
Net decrease in net assets resulting from dividends and distributions
to shareholders (6,022,570) (12,365,172)
------------ ------------
Capital Stock Value of shares issued to Common Stock shareholders in reinvestment of
Transactions dividends -- 2,865,812
(Notes 1e & 4): ------------ ------------
Net increase in net assets derived from capital stock transactions -- 2,865,812
------------ ------------
Net Assets: Total increase (decrease) in net assets (20,334,772) 29,962,018
Beginning of period 246,594,869 216,632,851
------------ ------------
End of period* $226,260,097 $246,594,869
============ ============
<FN>
* Undistributed investment income--net $ 822,438 $ 773,262
============ ============
See Notes to Financial Statements.
</TABLE>
<PAGE>
FINANCIAL INFORMATION (concluded)
<TABLE>
Financial Highlights
<CAPTION>
For the
For the For the Period
The following per share data and ratios have been derived Six Months Year June 26,
from information provided in the financial statements. Months Ended Ended 1992++ to
April 30, October 31, October 31,
Increase (Decrease) in Net Asset Value: 1994 1993 1992
<S> <S> <C> <C> <C>
Per Share Net asset value, beginning of period $ 15.89 $ 13.43 $ 14.18
Operating ---------- ---------- ----------
Performance: Investment income--net .54 1.11 .27
Realized and unrealized gain (loss) on investments--net (1.82) 2.46 (.66)
---------- ---------- ----------
Total from investment operations (1.28) 3.57 (.39)
---------- ---------- ----------
Less dividends and distributions to Common Stock shareholders:
Investment income--net (.44) (.91) (.18)
Realized gain on investments--net (.01) -- --
---------- ---------- ----------
Total dividends and distributions to Common Stock shareholders (.45) (.91) (.18)
---------- ---------- ----------
Capital charge resulting from issuance of Common Stock -- -- (.03)
---------- ---------- ----------
Effect of Preferred Stock activity:++++
Dividends to Preferred Stock shareholders:
Investment income--net (.10) (.20) (.02)
Capital charge resulting from issuance of Preferred Stock -- -- (.13)
---------- ---------- ----------
Total effect of Preferred Stock activity (.10) (.20) (.15)
---------- ---------- ----------
Net asset value, end of period $ 14.06 $ 15.89 $ 13.43
========== ========== ==========
Market price per share, end of period $ 13.125 $ 15.25 $ 13.75
========== ========== ==========
Total Investment Based on market value per share (11.21%)+++ 17.90% (7.17%)+++
Return:** ========== ========== ==========
Based on net asset value per share (8.72%)+++ 25.77% (4.09%)+++
========== ========== ==========
Ratios to Average Expenses, net of reimbursement .73%* .62% .13%*
Net Assets:*** ========== ========== ==========
Expenses .73%* .70% .68%*
========== ========== ==========
Investment income--net 4.98%* 5.25% 5.05%*
========== ========== ==========
<PAGE>
Supplemental Net assets, net of Preferred Stock, end of period (in thousands) $ 156,260 $ 176,595 $ 146,633
Data: ========== ========== ==========
Preferred Stock outstanding, end of period (in thousands) $ 70,000 $ 70,000 $ 70,000
========== ========== ==========
Portfolio turnover 25.14% 3.33% 19.40%
========== ========== ==========
Dividends Per Share Investment income--net $ 762 $ 1,618 $ 184
On Preferred Stock
Outstanding:
<FN>
* Annualized.
** Total investment returns based on market value, which can be significantly greater or
lesser than the net asset value, result in substantially different returns. Total investment
returns exclude the effects of sales loads.
*** Do not reflect the effect of dividends to Preferred Stock shareholders.
++ Commencement of Operations.
++++ The Fund's Preferred Stock was issued on September 16, 1992.
+++ Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
MuniYield New York Insured Fund II, Inc. (the "Fund") is reg-
istered under the Investment Company Act of 1940 as a non-diver-
sified, closed-end management investment company. The Fund de-
termines 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 MYT.
The following is a summary of significant accounting policies
followed by the Fund.
(a) Valuation of investments--Municipal bonds are traded pri-
marily 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, which are traded on
exchanges, are valued at their closing prices as of the close
of such exchanges. Options, which are traded on exchanges, are
valued at their last sale price as of the close of such exchanges
or, lacking any sales, at the last available bid price. Secur-
ities with remaining maturities of sixty days or less are val-
ued at amortized cost, which approximates market value. Secur-
ities for which market quotations are not readily available
are valued at their fair value as determined in good faith by
or under the direction of the Board of Directors of the Fund.
<PAGE>
(b) Financial futures contracts--The Fund may purchase or sell
interest rate futures contracts and options on such futures
contracts for the purpose of hedging the market risk on existing
securities or the intended purchase of securities. Futures con-
tracts 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.
(c) Income taxes--It is the Fund's policy to comply with the re-
quirements 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 trans-
actions 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 trans-
actions are determined on the identified cost basis.
(e) Deferred organization expenses--Deferred organization ex-
penses are amortized on a straight-line basis over a five-year
period.
(f) Non-income producing investments--Written and purchased
options are non-income producing investments.
(g) Dividends and distributions--Dividends from net investment
income are declared and paid monthly. Distributions of capital
gains are recorded on the ex-dividend dates.
<PAGE>
2. Investment Advisory Agreement and Transactions with
Affiliates:
The Fund has entered into an Investment Advisory Agreement with
Fund Asset Management, L.P. ("FAM"). Effective January 1, 1994,
the investment advisory business of FAM was reorganized from a
corporation to a limited partnership. Both prior to and after the
reorganization, ultimate control of FAM was vested with Merrill
Lynch & Co., Inc. ("ML & Co."). The general partner of FAM is
Princeton Services, Inc., an indirect wholly-owned subsidiary of
ML & Co. The limited partners are ML & Co. and Merrill Lynch
Investment Management, Inc. ("MLIM"), which is also an indirect
wholly-owned subsidiary of ML & Co.
FAM is responsible for the management of the Fund's portfolio and
provides the necessary personnel, facilities, equipment and cer-
tain other services necessary to the operations of the Fund. For
such services, the Fund pays a monthly fee at an annual rate of
0.50% of the Fund's average weekly net assets.
Accounting services are provided to the Fund by FAM at cost.
Certain officers and/or trustees of the Fund are officers and/or
directors of FAM, MLIM, Merrill Lynch, Pierce, Fenner & Smith
Inc. ("MLPF&S"), and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term secur-
ities, for the six months ended April 30, 1994 were $58,340,003
and $63,554,492, respectively.
Net realized and unrealized gains (losses) as of April 30, 1994
were as follows:
Realized
Gains Unrealized
(Losses) Losses
Long-term investments $3,785,595 $(3,441,421)
Short-term investments (810,326) --
---------- -----------
Total $2,975,269 $(3,441,421)
========== ===========
As of April 30, 1994, net unrealized depreciation for Federal
income tax purposes aggregated $3,441,421, of which $2,078,690
related to appreciated securities and $5,520,111 related to
depreciated securities. The aggregate cost of investments at
April 30, 1994 for Federal income tax purposes was $226,749,048.
<PAGE>
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 the holders of Common
Stock.
Common Stock
For the six months ended April 30, 1994, shares issued and out-
standing remained constant at 11,114,832. At April 30, 1994,
total paid-in capital amounted to $155,903,822.
Preferred Stock
Auction Market Preferred Stock ("AMPS") are shares of Preferred
Stock of the Fund that entitle their holders to receive cash
dividends at an annual rate that may vary for the successive
dividend periods. The yield in effect at April 30, 1994 was
2.90%.
In connection with the offering of AMPS, the Board of Directors
reclassified 1,400 shares of unissued capital stock as AMPS. For
the six months ended April 30, 1994, there were 1,400 AMPS shares
authorized, issued and outstanding with a liquidation preference
of $50,000 per share, plus accumulated and unpaid dividends of
$15,202.
The Fund pays commissions to certain broker-dealers at the end
of each auction at the annual rate of one-quarter of 1% calcu-
lated on the proceeds of each auction. For the six months ended
April 30, 1994, MLPF&S, an affiliate of MLIM, earned $128,923 as
commissions.
5. Subsequent Event:
On May 6, 1994, the Fund's Board of Directors declared an ordin-
ary income dividend to Common Stock shareholders in the amount
of $.069429 per share, payable on May 27, 1994 to shareholders
of record as of May 17, 1994.
<PAGE>
PER SHARE INFORMATION
<TABLE>
Per Share Selected Quarterly Financial Data*
<CAPTION>
Net Realized Unrealized Dividends/Distributions
Investment Gains Gains Net Investment Income Capital Gains
For the Period Income (Losses) (Losses) Common Preferred Common Preferred
<S> <C> <C> <C> <C> <C> <C> <C>
June 26, 1992++ to July 31, 1992 $.04 $(.01) $ .20 -- -- -- --
August 1, 1992 to October 31, 1992 .23 (.04) (.81) $.18 $.02 -- --
November 1, 1992 to January 31, 1993 .29 -- .91 .24 .05 -- --
February 1, 1993 to April 30, 1993 .28 -- .69 .23 .05 -- --
May 1, 1993 to July 31, 1993 .27 .04 .25 .22 .05 -- --
August 1, 1993 to October 31, 1993 .27 .02 .55 .22 .05 -- --
November 1, 1993 to January 31, 1994 .28 .20 (.05) .22 .05 $.01 --
February 1, 1994 to April 30, 1994 .26 .07 (2.04) .22 .05 -- --
<CAPTION>
Net Asset Value Market Price**
For the Period High Low High Low Volume***
<S> <C> <C> <C> <C> <C>
June 26, 1992++ to July 31, 1992 $14.43 $14.14 $15.375 $15.00 91
August 1, 1992 to October 31, 1992 14.35 13.25 15.50 13.75 426
November 1, 1992 to January 31, 1993 14.35 13.44 15.00 13.75 739
February 1, 1993 to April 30, 1993 15.43 14.35 15.75 14.50 811
May 1, 1993 to July 31, 1993 15.49 15.00 15.375 14.50 664
August 1, 1993 to October 31, 1993 16.16 15.33 15.75 15.00 799
November 1, 1993 to January 31, 1994 16.08 15.42 15.375 14.125 901
February 1, 1994 to April 30, 1994 16.00 13.47 15.625 12.625 851
<FN>
++ Commencement of Operations.
* Calculations are based upon shares of Common Stock outstanding
at the end of each period.
** As reported in the consolidated transaction reporting system.
*** In thousands.
</TABLE>
<PAGE>
OFFICERS AND DIRECTORS
Arthur Zeikel, President and Director
Kenneth S. Axelson, Director
Herbert I. London, Director
Robert R. Martin, Director
Joseph L. May, Director
Andre F. Perold, Director
Terry K. Glenn, Executive Vice President
Donald C. Burke, Vice President
Vincent R. Giordano, Vice President
Kenneth A. Jacob, Vice President
Gerald M. Richard, Treasurer
Mark B. Goldfus, Secretary
Custodian
State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts 02110
Transfer Agents
Common Stock:
State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts 02110
Preferred Stock:
IBJ Schroder Bank & Trust Company
One State Street
New York, New York 10004
NYSE Symbol
MYT
