MUNIYIELD
NEW YORK
INSURED
FUND II, INC.
FUND LOGO
Annual Report
October 31, 1995
<PAGE>
Officers and Directors
Arthur Zeikel, President and Director
James H. Bodurtha, Director
Herbert I. London, Director
Robert R. Martin, Director
Joseph L. May, Director
Andre F. Perold, Director
Terry K. Glenn, Executive Vice President
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, MA 02110
Transfer Agents
Common Stock:
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
Preferred Stock:
IBJ Schroder Bank & Trust Company
One State Street
New York, NY 10004
NYSE Symbol
MYT
<PAGE>
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
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.
MuniYield New York
Insured Fund II, Inc.
Box 9011
Princeton, NJ
08543-9011
MuniYield New York Insured Fund II, Inc.
TO OUR SHAREHOLDERS
For the year ended October 31, 1995, the Common Stock of MuniYield
New York Insured Fund II, Inc. earned $0.834 per share income
dividends, which included earned and unpaid dividends of $0.070.
This represents a net annualized yield of 5.70%, based on a month-
end net asset value of $14.63 per share. Over the same period, the
total investment return on the Fund's Common Stock was +18.96%,
based on a change in per share net asset value from $13.13 to
$14.63, and assuming reinvestment of $0.837 per share income
dividends.
<PAGE>
For the six-month period ended October 31, 1995, the total
investment return on the Fund's Common Stock was +8.07%, based on a
change in per share net asset value from $13.97 to $14.63, and
assuming reinvestment of $0.410 per share income dividends.
For the six-month period ended October 31, 1995, the Fund's Auction
Market Preferred Stock had an average yield of 3.79%.
The Environment
After losing momentum through the second calendar quarter of 1995,
it now appears that the US economic expansion has resumed. Gross
domestic product growth for the three months ended September 30 was
reported to be 4.2%, higher than generally expected. September
durable goods orders increased a surprisingly strong 3%, and
existing home sales rose to a near-record level. At the same time,
there is evidence that inflationary pressures remain subdued.
Reflecting the trend of renewed economic growth--and continued good
news on the inflation front--the Federal Reserve Board signaled no
near-term shift in monetary policy following its September meeting.
Thus, official interest rates may not be reduced further in the
immediate future.
Another significant development has been the strengthening of the US
dollar relative to the yen and the Deutschemark. Improving interest
rate differentials favoring the US currency, combined with
coordinated central bank intervention and more positive investor
sentiment, have helped to bolster the dollar in foreign exchange
markets. Other factors that appear to be improving the US dollar's
outlook in the near term are a pick-up in capital flows to the
United States and the prospect of increased capital outflows from
Japan. However, it remains to be seen if the US dollar's
strengthening trend can continue without significant improvements in
the US budget and trade deficits.
In the weeks ahead, investor interest will continue to focus on US
economic activity. Clear signs of a moderate, noninflationary
expansion could further benefit the US stock and bond markets. In
addition, should the current Federal budget deficit reduction
efforts now underway in Washington prove successful, the
implications would likely be positive for the US financial markets.
<PAGE>
The Municipal Market
Tax-exempt bond yields continued to decline during the six-month
period ended October 31, 1995. As measured by the Bond Buyer Revenue
Bond Index, the yield on uninsured, long-term municipal revenue
bonds fell 30 basis points (0.30%) to end the October period at
approximately 6.00%. While tax-exempt bond yields have declined
dramatically from their highs one year ago, municipal bond yields
have exhibited considerable yield volatility on a weekly basis. In
recent months, tax-exempt bond yields have fluctuated by as much as
20 basis points on a week-to-week basis. US Treasury bond yields
have displayed similar volatility, but the extent of their decline
has been greater. By the end of October, long-term US Treasury bond
yields had declined almost 100 basis points to 6.33%. Proposed
Federal tax restructuring continued to weigh heavily on the tax-
exempt bond market. Thus far in 1995, US Treasury bond yields have
declined approximately 150 basis points. Municipal bond yields have
fallen approximately 95 basis points as the uncertainty surrounding
any changes to the existing Federal income tax structure has
prevented the municipal bond market from rallying as strongly as its
taxable counterpart.
A general view of a moderately expanding domestic economy, supported
by a very favorable inflationary environment, allowed interest rates
to significantly decline from their recent highs in November 1994.
However, this decline was not a smooth downward curve. Conflicting
economic indicators were released during recent months that have
prevented a clear consensus regarding the near-term direction of
interest rates from being reached. The resultant uncertainty has
promoted more of a saw-toothed pattern as interest rate declines
were repeatedly interrupted by indications of stronger-than-expected
economic growth. As these concerns were overcome by subsequent
weaker economic releases, interest rate declines have resumed. These
periods of volatility are likely to continue for the remainder of
1995, or until proposed Federal budget deficit reduction packages
are resolved and any resultant responses by the Federal Reserve
Board have occurred.
However, the municipal bond market's technical position remained
supportive throughout recent quarters. Approximately $82 billion in
long-term municipal securities were issued during the six months
ended October 31, 1995. While this issuance is virtually identical
to underwritings during the October 31, 1994 quarter, tax-exempt
bond issuance over the last 12 months remained approximately 25%
below comparable 1994 levels. The municipal bond market should
maintain this positive technical position well into 1996. Annual
issuance for 1995 is now projected to be approximately $140 billion,
significantly less than last year's already low level of $162
billion. Projected maturities and early redemptions for the
remainder of 1995 and throughout 1996 will lead to a continued
decline in the total outstanding municipal bond supply throughout
1996 and, perhaps, into 1998 should new bond issuance remain at
historically low levels.
Despite the municipal bond market's relative underperformance
compared to the US Treasury market thus far in 1995, the extent of
the tax-exempt bond market's rally was nonetheless quite impressive.
Municipal bond yields have fallen 135 basis points from their highs
reached in November 1994 and municipal bond prices rose accordingly.
Most tax-exempt products recouped almost all of the losses incurred
in 1994 and are well on their way to posting double-digit total
returns for all of 1995. This relative underperformance so far in
1995 provided long-term investors with the rare opportunity to
purchase tax-exempt securities at yield levels near those of taxable
securities.
<PAGE>
Additionally, many of the factors that led to the relative
underperformance of the tax-exempt bond market thus far in 1995,
namely investor concern regarding Federal budget deficit reductions
and proposed changes in the Federal income tax structure, are
nearing resolution. The Federal budget reconciliation process has
already begun, and may be essentially completed by year-end. Recent
public opinion polls suggest that the majority of American taxpayers
prefer the existing Federal income tax system compared to proposed
changes, such as the flat tax or national sales tax. In an upcoming
election year, neither party is likely to advocate a clearly
unpopular position, particularly one that can be expected to
negatively impact the Federal budget deficit reduction program
through reduced tax revenues. As these factors are resolved, we
believe that much of the resistance that the municipal bond market
met this year should dissipate. This should allow municipal bond
yields to significantly decline from current levels in order to
return to more normal historic yield relationships.
Portfolio Strategy
As interest rates continued to move lower at the beginning of May,
our strategy of adding lower-coupon, longer-maturity issues to the
portfolio continued to enhance the Fund's net asset value. Economic
releases during the second quarter of 1995 confirmed our belief that
the economy was indeed slowing and the potential of an ease in
interest rates by the Federal Reserve Board was a real possibility.
In July, the Federal Reserve Board cut the Federal Fund's target
rate by 25 basis points. While the cut was not significant in size,
it did indicate the probable end to any further interest rate
increases which had taken a severe toll on the performance of the
credit markets during the preceding twelve months.
The economic soft landing that investors hoped for came into
question during the third quarter of this year as the economy
produced stronger-than-expected results. This caused a temporary
rise in yields as investors feared renewed inflationary pressure
along with renewed growth.
The bounce back in economic growth seems to be waning as we move
into the fourth quarter of 1995. Consumers have curtailed their
spending and continue to be extremely price conscious in the
purchase of goods, which has produced the lowest level of inflation
in many years. As a result, we are anticipating a continued decline
in interest rates during the remainder of 1995.
<PAGE>
While New York experienced a record delay in approving a budget
agreeable to the legislature and the Governor, the surge of issuance
expected by the delay was well received by investors. The main
reason for the more orderly disbursement of the financings was a
result of the close attention the new administration spent in
reviewing the financing needs of the various authorities. This
renewed fiscal responsibility helped the perception of New York
issues in the marketplace and aided their relative value.
Prior to the budget resolution, issuance in New York was well below
1994 levels. The third quarter of this year saw volume increase by
30% over 1994 but on a year-over-year basis, New York issuance is
down 25%, slightly higher than the volume declines on a national
level.
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 ahead.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Vincent R. Giordano)
Vincent R. Giordano
Vice President
(James C. Cahill)
James C. Cahill
Portfolio Manager
November 29, 1995
<PAGE>
We are pleased to announce that James C. Cahill is responsible for
the day-to-day management of MuniYield New York Insured Fund II,
Inc. Mr. Cahill has been employed by Merrill Lynch Asset Management,
L.P. (an affiliate of the Fund's investment adviser) since 1994 as
Vice President and Portfolio Manager. Prior thereto, he was employed
by the Prudential Insurance Company.
PROXY RESULTS
During the six-month period ended October 31, 1995, MuniYield New
York Insured Fund II, Inc. Common Stock shareholders voted on the
following proposals. The proposals were approved at a special
shareholders' meeting on June 16, 1995. The description of each
proposal and number of shares voted are as follows:
<TABLE>
<CAPTION>
Shares Voted Shares Voted
For Without Authority
<S> <S> <C> <C>
1. To elect the Fund's Board of Directors: Herbert I. London 10,107,837 456,835
Robert R. Martin 10,118,057 446,615
Arthur Zeikel 10,119,634 445,038
<CAPTION>
Shares Voted Shares Voted Shares Voted
For Against Abstain
<S> <C> <C> <C>
2. To ratify the selection of Deloitte & Touche LLP as the Fund's independent
auditors for the current fiscal year. 10,165,407 113,177 286,088
</TABLE>
During the six-month period ended October 31, 1995, MuniYield New
York Insured Fund II, Inc. Preferred Stock shareholders voted on the
following proposals. The proposals were approved at a special
shareholders' meeting on June 16, 1995. The description of each
proposal and number of shares voted are as follows:
<PAGE>
<TABLE>
<CAPTION>
Shares Voted Shares Voted
For Without Authority
<S> <S> <C> <C>
1. To elect the Fund's Board of Directors: Herbert I. London 2,050 0
Robert R. Martin 2,050 0
Joseph L. May 2,050 0
Andre F. Perold 2,050 0
Arthur Zeikel 2,050 0
<CAPTION>
Shares Voted Shares Voted Shares Voted
For Against Abstain
<S> <C> <C> <C>
2. To ratify the selection of Deloitte & Touche LLP as the Fund's independent
auditors for the current fiscal year. 1,944 0 106
</TABLE>
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 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.
<PAGE>
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 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.
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 Agency
IDA Industrial Development Agency
M/F Muli-Family
PCR Pollution Control Revenue Bonds
UT Unlimited Tax
VRDN Variable Rate Demand Notes
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (in Thousands)
<CAPTION>
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
New York--100.6%
<S> <S> <C> <S> <C>
Metropolitan Transportation Authority, New York, Commuter Facilities Revenue
Refunding Bonds, Series B (c):
AAA Aaa $10,000 6.25% due 7/01/2017 $ 10,371
AAA Aaa 8,650 6.25% due 7/01/2022 8,941
Monroe County, New York, Public Improvement, UT (d):
AAA Aaa 2,000 6.15% due 6/01/2016 2,103
AAA Aaa 1,000 6.15% due 6/01/2017 1,048
AAA Aaa 3,250 Nassau County, New York, GO, UT, Series P, 6.50% due 11/01/2010 (b) 3,563
AAA Aaa 1,100 New Rochelle, New York, GO, UT, Series B, 6.15% due 8/15/2018 (c) 1,154
BBB+ Baa1 5,000 New York City, New York, GO, Series D, 6% due 2/15/2025 4,832
New York City, New York, IDA, Civic Facilities Revenue Bonds:
A1+ NR* 1,800 (National Audobon Society), VRDN, 3.90% due 12/01/2014 (a) 1,800
AAA Aaa 5,000 (USTA National Tennis Center Project), 6.375% due 11/15/2014 (f) 5,295
New York City, New York, Municipal Water Finance Authority, Water and Sewer
System Revenue Bonds:
AAA Aaa 3,500 Series A, 6.25% due 6/15/2021 (b) 3,589
AAA Aaa 2,480 Series A-1994, 7% due 6/15/2015 (b) 2,742
AAA Aaa 2,520 Series A-1994, 7% due 6/15/2001 (b)(h) 2,865
AAA Aaa 5,000 Series B, 5.50% due 6/15/2019 (c) 4,896
A1+ VMIG1++ 7,900 New York City, New York, Trust Cultural Resource Revenue Bonds (Solomon R.
Guggenheim), VRDN, Series B, 3.90% due 12/01/2015 (a) 7,900
New York State Dormitory Authority Revenue Bonds:
AAA Aaa 1,000 (City University), Third Generation Reserves, Series 2, 6.875% due 7/01/2014 (c) 1,105
AAA Aaa 2,825 (Consolidated City University System), Second Generation, Series A, 5.75%
due 7/01/2013 (b) 2,901
A1+ VMIG1++ 1,000 (Cornell University), VRDN, Series B, 3.90% due 7/01/2025 (a) 1,000
AAA Aaa 1,750 Refunding (Mount Sinai School of Medicine), 6.75% due 7/01/2009 (c) 1,926
BBB+ Baa1 2,000 Refunding (State University Educational Facilities), Series B, 7% due 5/15/2016 2,137
AAA Aaa 1,050 (Saint John's University), 6.875% due 7/01/2011 (d) 1,161
AA- Aa 2,400 (Vassar College), 7.25% due 7/01/2015 2,668
</TABLE>
<PAGE>
<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 State Energy Research and Development Authority, Facilities Revenue Bonds
(Con Edison Company Inc.), AMT, Series A:
AAA Aaa $ 4,450 6.75% due 1/15/2027 (c) $ 4,668
AAA Aaa 3,250 6.75% due 1/15/2027 (d) 3,409
AAA Aaa 10,000 New York State Energy Research and Development Authority, Gas Facilities Revenue Bonds
(Brooklyn Union Gas Company), AMT, Series A, 6.75% due 2/01/2024 (c) 10,669
A1+ NR* 3,800 New York State Energy Research and Development Authority, PCR (Niagara
Mohawk Power Corporation Project), VRDN, AMT, Series B, 3.95% due 7/01/2027 (a) 3,800
A1+ NR* 700 New York State Environmental Facilities Corporation, Resource Recovery Revenue Bonds
(OFS Equity Huntington Project), VRDN, AMT, 4.10% due 11/01/2014 (a) 700
AAA Aaa 1,325 New York State Environmental Facilities Corporation, Water Facilities Revenue Bonds
(New Rochelle Water Company Inc. Project), AMT, 6.40% due 12/01/2024 (d) 1,381
AAA Aa 1,000 New York State HFA, M/F Mortgage Housing Insured Revenue Refunding Bonds,
Series C, 6.45% due 8/15/2014 (e) 1,032
A A 3,250 New York State Local Government Assistance Corporation, Revenue Refunding Bonds,
Series B, 5.50% due 4/01/2021 3,125
New York State Medical Care Facilities, Finance Agency Revenue Bonds:
AAA Aaa 2,330 (Mental Health), Series F, 6.50% due 8/15/2012 (g) 2,472
AAA Aaa 9,805 (Mental Health Services Facilities Improvement), Series D, 5.90% due 8/15/2022 (d) 9,844
AAA Aaa 10,765 (Montefiore Medical Center), Series A, 5.75% due 2/15/2025 (d)(e) 10,629
AAA Aaa 6,250 (New York Hospital Mortgage), Series A, 6.80% due 8/15/2024 (d)(e) 6,823
AAA Aaa 8,500 (New York Hospital Mortgage), Series A, 6.50% due 8/15/2029 (d)(e) 9,045
AAA Aaa 5,200 Refunding (Hospital and Nursing Home), Series C, 6.375% due 8/15/2029 (c) 5,407
AAA Aaa 4,000 Refunding (Mental Health Services), Series F, 5.375% due 2/15/2014 (b) 3,836
AAA Aaa 1,290 Refunding (Mental Health Services), Series F, 5.375% due 2/15/2014 (c) 1,237
AAA Aaa 6,990 Refunding (Mental Health Services), Series F, 5.25% due 2/15/2019 (b) 6,510
AAA Aaa 4,715 New York State Power Authority, General Purpose and Revenue Bonds, Series Y, 6%
due 1/01/2020 (d) 4,764
New York State Thruway Authority, General Revenue Bonds:
AAA Aaa 4,000 Series A, 5.50% due 1/01/2023 (b) 3,895
AAA Aaa 2,125 Series B, 5% due 1/01/2020 (c) 1,936
AAA Aaa 8,000 New York State Thruway Authority, General Revenue Bonds (Highway and Bridge Trust Fund),
UT, Series B, 6.25% due 4/01/2012 (b) 8,457
New York State Urban Development Corporation Revenue Bonds:
AAA Aaa 8,675 (Correctional Facilities), 5.375% due 1/01/2012 (c) 8,541
BBB Baa1 12,375 (Correctional Facilities), Series 4, 5.375% due 1/01/2023 11,236
BBB Baa1 3,250 Refunding (Onondaga County Convention Project), 6.25% due 1/01/2020 3,272
NR* Baa 1,870 North Country, New York, Development Authority Revenue Bonds (Solid Waste
Management System), Series A, 6.75% due 7/01/1999 (h) 2,054
<PAGE>
North Hempstead, New York, Revenue Refunding Bonds, Series B, UT (b):
AAA Aaa 1,745 6.40% due 4/01/2013 1,932
AAA Aaa 555 6.40% due 4/01/2017 617
</TABLE>
<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>
Port Authority of New York and New Jersey, Consolidated Revenue Bonds:
AA- A1 $ 5,000 69th Series, 7.125% due 6/01/2025 $ 5,464
AA- A1 5,000 72nd Series, 7.35% due 10/01/2027 5,725
Syracuse, New York, COP, Revenue Bonds (Syracuse Hancock International
Airport), AMT (b):
AAA Aaa 3,650 6.625% due 1/01/2012 3,875
AAA Aaa 3,120 6.50% due 1/01/2017 3,266
A1+ VMIG1++ 1,400 Syracuse, New York, IDA, Civic Facility Revenue Bonds (Multi-Modal Syracuse University
Project), VRDN, 3.90% due 3/01/2023 (a) 1,400
Triborough Bridge and Tunnel Authority, New York, Special Obligation Revenue
Refunding Bonds:
AAA Aaa 6,575 6.25% due 1/01/2012 (d) 6,925
AAA Aaa 2,000 Series B, 6.875% due 1/01/2015 (c) 2,194
Total Investments (Cost--$222,807)--100.6% 234,137
Liabilities in Excess of Other Assets--(0.6%) (1,482)
--------
Net Assets--100.0% $232,655
========
<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 October 31, 1995.
(b)FGIC Insured.
(c)MBIA Insured.
(d)AMBAC Insured.
(e)FHA Insured.
(f)FSA Insured.
(g)CGIC Insured.
(h)Prerefunded.
*Not Rated.
++Highest short-term rating by Moody's Investors Service, Inc.
Ratings of issues shown have not been audited by Deloitte & Touche LLP.
<PAGE>
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION
<TABLE>
Statement of Assets, Liabilities and Capital as of October 31, 1995
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$222,806,570) (Note 1a) $234,136,617
Cash 111,046
Interest receivable 3,687,706
Deferred organization expenses (Note 1e) 11,523
Prepaid expenses and other assets 9,311
------------
Total assets 237,956,203
------------
Liabilities: Payables:
Securities purchased $ 4,832,400
Dividends to shareholders (Note 1f) 303,021
Investment adviser (Note 2) 101,521 5,236,942
------------
Accrued expenses and other liabilities 64,506
------------
Total liabilities 5,301,448
------------
Net Assets: Net assets $232,654,755
============
Capital: Capital Stock (200,000,000 shares authorized) (Note 4):
Preferred Stock, par value $.10 per share (2,800 shares of
AMPS* issued and outstanding at $25,000 per 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 154,792,338
Undistributed investment income--net 862,691
Accumulated realized capital losses on investments--net (Note 5) (5,441,804)
Unrealized appreciation on investments--net 11,330,047
------------
Total--Equivalent to $14.63 net asset value per Common Stock
(market price--$13.25) 162,654,755
------------
Total capital $232,654,755
============
<FN>
*Auction Market Preferred Stock.
<PAGE>
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (continued)
<TABLE>
Statement of Operations
<CAPTION>
For the Year Ended
October 31, 1995
<S> <S> <C> <C>
Investment Income Interest and amortization of premium and discount earned $ 13,490,414
(Note 1d):
Expenses: Investment advisory fees (Note 2) $ 1,123,249
Commission fees (Note 4) 198,848
Professional fees 80,927
Accounting services (Note 2) 67,618
Printing and shareholder reports 50,149
Transfer agent fees 49,734
Listing fees 24,726
Directors' fees and expenses 23,759
Custodian fees 12,091
Pricing fees 9,748
Amortization of organization expenses (Note 1e) 6,929
Other 10,440
------------
Total expenses 1,658,218
------------
Investment income--net 11,832,196
------------
Realized & Realized loss on investments--net (3,600,834)
Unrealized Change in unrealized appreciation/depreciation on investments--net 20,296,119
Gain (Loss) on ------------
Investments--Net Net Increase in Net Assets Resulting from Operations $ 28,527,481
(Notes 1b, ============
1d & 3):
</TABLE>
<PAGE>
<TABLE>
Statements of Changes in Net Assets
<CAPTION>
For the Year Ended October 31,
Increase (Decrease) in Net Assets: 1995 1994
<S> <S> <C> <C>
Operations: Investment income--net $ 11,832,196 $ 11,939,369
Realized loss on investments--net (3,600,834) (1,840,959)
Change in unrealized appreciation/depreciation on investments
--net 20,296,119 (28,784,232)
------------ ------------
Net increase (decrease) in net assets resulting from operations 28,527,481 (18,685,822)
------------ ------------
Dividends & Investment income--net:
Distributions to Common Stock (9,302,093) (9,707,305)
Shareholders Preferred Stock (2,547,832) (2,124,906)
(Note 1f): Realized gain on investments--net:
Common Stock -- (81,339)
Preferred Stock -- (18,298)
------------ ------------
Net decrease in net assets resulting from dividends and
distributions to shareholders (11,849,925) (11,931,848)
------------ ------------
Net Assets: Total increase (decrease) in net assets 16,677,556 (30,617,670)
Beginning of year 215,977,199 246,594,869
------------ ------------
End of year* $232,654,755 $215,977,199
============ ============
<FN>
*Undistributed investment income--net $ 862,691 $ 880,420
============ ============
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (concluded)
<PAGE>
<TABLE>
Financial Highlights
<CAPTION>
For the
Period
The following per share data and ratios have been derived June 26,
from information provided in the financial statements. 1992++ to
For the Year Ended October 31, October 31,
Increase (Decrease) in Net Asset Value: 1995 1994 1993 1992
<S> <S> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 13.13 $ 15.89 $ 13.43 $ 14.18
Operating -------- -------- -------- --------
Performance: Investment income--net 1.07 1.07 1.11 .27
Realized and unrealized gain (loss) on
investments--net 1.50 (2.76) 2.46 (.66)
-------- -------- -------- --------
Total from investment operations 2.57 (1.69) 3.57 (.39)
-------- -------- -------- --------
Less dividends and distributions to Common Stock
shareholders:
Investment income--net . (.84) (.87) (.91) (.18)
Realized gain on investments--net -- (.01) -- --
-------- -------- -------- --------
Total dividends and distributions to Common Stock
shareholders (.84) (.88) (.91) (.18)
-------- -------- -------- --------
Capital charge resulting from issuance of
Preferred Stock -- -- -- (.03)
-------- -------- -------- --------
Effect of Preferred Stock activity:++++
Dividends to Preferred Stock shareholders:
Investment income--net (.23) (.19) (.20) (.02)
Capital charge resulting from issuance of
Preferred Stock -- -- -- (.13)
-------- -------- -------- --------
Total effect of Preferred Stock activity (.23) (.19) (.20) (.15)
-------- -------- -------- --------
Net asset value, end of period $ 14.63 $ 13.13 $ 15.89 $ 13.43
======== ======== ======== ========
Market price per share, end of period $ 13.25 $ 11.00 $ 15.25 $ 13.75
======== ======== ======== ========
Total Investment Based on market price per share 28.61% (22.96%) 17.90% (7.17%)+++
Return:** ======== ======== ======== ========
Based on net asset value per share 18.96% (11.75%) 25.77% (4.09%)+++
======== ======== ======== ========
Ratios to Expenses, net of reimbursement .74% .74% .62% .13%*
Average ======== ======== ======== ========
Net Assets:*** Expenses .74% .74% .70% .68%*
======== ======== ======== ========
Investment income--net 5.27% 5.09% 5.25% 5.05%*
======== ======== ======== ========
<PAGE>
Supplemental Net assets, net of Preferred Stock, end of period
Data: (in thousands) $162,655 $145,977 $176,595 $146,633
======== ======== ======== ========
Preferred Stock outstanding, end of period
(in thousands) $ 70,000 $ 70,000 $ 70,000 $ 70,000
======== ======== ======== ========
Portfolio turnover 110.76% 36.79% 3.33% 19.40%
======== ======== ======== ========
Dividends Per Investment income--net $ 910 $ 759 $ 809 $ 92
Share On
Preferred Stock
Outstanding:++++++
<FN>
*Annualized.
**Total investment returns based on market value, which can be
significantly greater or lesser than the net asset value, may result
in substantially different returns. Total investment returns exclude
the effects of sales loads.
***Do not reflect the effect of dividends to Preferred Stock
shareholders.
++Commencement of Operations.
++++The Fund's Preferred Stock was issued on September 16, 1992.
++++++Dividends per share have been adjusted to reflect a two-for-
one stock split.
+++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 registered
under the Investment Company Act of 1940 as a non-diversified,
closed-end management investment company. The Fund determines and
makes available for publication the net asset value of its Common
Stock on a weekly basis. The Fund's Common Stock is listed on the
New York Stock Exchange under the symbol MYT. The following is a
summary of significant accounting policies followed by the Fund.
<PAGE>
(a) Valuation of investments--Municipal bonds are traded primarily
in the over-the-counter markets and are valued at the most recent
bid price or yield equivalent as obtained by the Fund's pricing
service from dealers that make markets in such securities. Financial
futures contracts and options thereon, which are traded on
exchanges, are valued at their closing prices as of the close of
such exchanges. Options, which are traded on exchanges, are valued
at their last sale price as of the close of such exchanges or,
lacking any sales, at the last available bid price. Securities with
remaining maturities of sixty days or less are valued at amortized
cost, which approximates market value. Securities 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, including valuations furnished by a
pricing service retained by the Fund, which may utilize a matrix
system for valuations. The procedures of the pricing service and its
valuations are reviewed by the officers of the Fund under the
general supervision of the Board of Directors.
(b) Derivative financial instruments--The Fund may engage in various
portfolio strategies to seek to increase its return by hedging its
portfolio against adverse movements in the debt markets. Losses may
arise due to changes in the value of the contract or if the
counterparty does not perform under the contract.
* Financial futures contracts--The Fund may purchase or sell
interest rate futures contracts and options on such futures
contracts for the purpose of hedging the market risk on existing
securities or the intended purchase of securities. Futures contracts
are contracts for delayed delivery of securities at a specific
future date and at a specific price or yield. Upon entering into a
contract, the Fund deposits and maintains as collateral such initial
margin as required by the exchange on which the transaction is
effected. Pursuant to the contract, the Fund agrees to receive from
or pay to the broker an amount of cash equal to the daily
fluctuation in value of the contract. Such receipts or payments are
known as variation margin and are recorded by the Fund as unrealized
gains or losses. When the contract is closed, the Fund records a
realized gain or loss equal to the difference between the value of
the contract at the time it was opened and the value at the time it
was closed.
* Options--The Fund is authorized to write covered call options and
purchase put options. When the Fund sells 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.
<PAGE>
When a security is purchased or sold through an exercise of an
option, the related premium paid (or received) is added to (or
deducted from) the basis of the security acquired or deducted from
(or added to) the proceeds of the security sold. When an option
expires (or the Fund enters into a closing transaction), the Fund
realizes a gain or loss on the option to the extent of the premiums
received or paid (or gain or loss to the extent the cost of the
closing transaction exceeds the premium paid or received).
Written and purchased options are non-income producing investments.
(c) Income taxes--It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute substantially all of its
taxable income to its shareholders. Therefore, no Federal income tax
provision is required.
(d) Security transactions and investment income--Security
transactions are recorded on the dates the transactions are entered
into (the trade dates). Interest income is recognized on the accrual
basis. Discounts and market premiums are amortized into interest
income. Realized gains and losses on security transactions are
determined on the identified cost basis.
(e) Deferred organization expenses--Deferred organization expenses
are amortized on a straight-line basis over a five-year period.
(f) Dividends and distributions--Dividends from net investment
income are declared and paid monthly. Distributions of capital gains
are recorded on the ex-dividend dates.
2. Investment Advisory Agreement and
Transactions with Affiliates:
The Fund has entered into an Investment Advisory Agreement with Fund
Asset Management, L.P. ("FAM"). The general partner of FAM is
Princeton Services, Inc. ("PSI"), an indirect wholly-owned
subsidiary of Merrill Lynch & Co., Inc. ("ML & Co."), which is the
limited partner.
FAM is responsible for the management of the Fund's portfolio and
provides the necessary personnel, facilities, equipment and certain
other services necessary to the operations of the Fund. For such
services, the Fund pays a monthly fee at an annual rate of 0.50% of
the Fund's average weekly net assets.
Accounting services are provided to the Fund by FAM at cost.
Certain officers and/or directors of the Fund are officers and/or
directors of FAM, PSI, Merrill Lynch, Pierce, Fenner & Smith Inc.
("MLPF&S"), and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the year ended October 31, 1995 were $250,525,811 and
$230,683,792, respectively.
<PAGE>
Net realized and unrealized gains (losses) as of October 31, 1995
were as follows:
Realized Unrealized
Losses Gains
Long-term investments $(1,834,897) $11,330,047
Financial futures contracts (1,765,937) --
----------- -----------
Total $(3,600,834) $11,330,047
=========== ===========
As of October 31, 1995, net unrealized appreciation for Federal
income tax purposes aggregated $11,292,235, of which $11,309,819
related to appreciated securities and $17,584 related to depreciated
securities. The aggregate cost of investments at October 31, 1995
for Federal income tax purposes was $222,844,382.
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 year ended October 31, 1995, shares issued and outstanding
remained constant at 11,114,832. At October 31, 1995, total paid-in
capital amounted to $155,903,821.
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 October 31, 1995 was 3.75%.
A two-for-one stock split occurred on December 1, 1994. As a result,
as of October 31, 1995, there were 2,800 AMPS shares authorized,
issued and outstanding with a liquidation preference of $25,000 per
share, plus accumulated and unpaid dividends of $14,384.
The Fund pays commissions to certain broker-dealers at the end of
each auction at an annual rate ranging from 0.25% to 0.375%,
calculated on the proceeds of each auction. For the year ended
October 31, 1995, MLPF&S, an affiliate of FAM, earned $66,149 as
commissions.
<PAGE>
5. Capital Loss Carryforward:
At October 31, 1995, the Fund had a capital loss carryforward of
approximately $3,616,000, of which $1,841,000 expires in 2002 and
$1,775,000 expires in 2003. This amount will be available to offset
like amounts of any future taxable gains.
6. Subsequent Event:
On November 13, 1995, the Fund's Board of Directors declared an
ordinary income dividend to Common Stock shareholders in the amount
of $0.069842 per share, payable on November 29, 1995 to shareholders
of record as of November 24, 1995.
<AUDIT-REPORT>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders of
MuniYield New York Insured Fund II, Inc.:
We have audited the accompanying statement of assets, liabilities
and capital, including the schedule of investments, of MuniYield New
York Insured Fund II, Inc. as of October 31, 1995, 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 three-year
period then ended and the period June 26, 1992 (commencement of
operations) to October 31, 1992. These financial statements and the
financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these
financial statements and the financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements and the financial highlights are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements.
Our procedures included confirmation of securities owned at October
31, 1995 by correspondence with the custodian and brokers. 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 York Insured Fund II, Inc. as of October 31, 1995,
the results of its operations, the changes in its net assets, and
the financial highlights for the respective stated periods in
conformity with generally accepted accounting principles.
<PAGE>
Deloitte & Touche LLP
Princeton, New Jersey
December 1, 1995
</AUDIT-REPORT>
IMPORTANT TAX INFORMATION (UNAUDITED)
All of the net investment income distributions paid monthly by
MuniYield New York Insured Fund II, Inc. during its taxable year
ended October 31, 1995 qualify as tax-exempt interest dividends for
Federal income tax purposes. Additionally, there were no capital
gains distributed by the Fund during the year.
Please retain this information for your records.
PER SHARE INFORMATION (UNAUDITED)
<TABLE>
Per Share Selected Quarterly Financial Data*
<CAPTION>
Dividends/Distributions
Net Realized Unrealized
Investment Gains Gains Net Investment Income Capital Gains
For the Quarter Income (Losses) (Losses) Common Preferred Common Preferred
<S> <C> <C> <C> <C> <C> <C> <C>
November 1, 1993 to January 31, 1994 $.28 $(.20) $ (.05) $.22 $.05 $.01 --
February 1, 1994 to April 30, 1994 .25 (.07) (2.04) .22 .05 -- --
May 1, 1994 to July 31, 1994 .27 -- 2.00 .21 .04 -- --
August 1, 1994 to October 31, 1994 .27 .10 (2.50) .22 .05 -- --
November 1, 1994 to January 31, 1995 .27 (.50) .93 .22 .05 -- --
February 1, 1995 to April 30, 1995 .26 .03 .39 .21 .06 -- --
May 1, 1995 to July 31, 1995 .27 .05 .16 .20 .06 -- --
August 1, 1995 to October 31, 1995 .27 .10 .34 .21 .06 -- --
<PAGE>
<CAPTION>
Net Asset Value Market Price**
For the Quarter High Low High Low Volume***
<S> <C> <C> <C> <C> <C>
November 1, 1993 to January 31, 1994 $16.03 $15.42 $15.375 $14.125 901
February 1, 1994 to April 30, 1994 16.00 13.47 15.625 12.625 851
May 1, 1994 to July 31, 1994 14.67 13.74 13.75 12.625 787
August 1, 1994 to October 31, 1994 14.30 13.13 13.25 11.00 1,128
November 1, 1994 to January 31, 1995 13.57 12.21 12.375 10.125 2,271
February 1, 1995 to April 30, 1995 14.34 13.58 13.00 12.375 774
May 1, 1995 to July 31, 1995 14.79 13.97 13.00 12.375 992
August 1, 1995 to October 31, 1995 14.72 13.95 13.25 12.50 749
<FN>
*Calculations are based upon shares of Common Stock outstanding at
the end of each quarter.
**As reported in the consolidated transaction reporting system.
***In thousands.
</TABLE>
