MUNIYIELD
NEW YORK
INSURED
FUND II, INC.
FUND LOGO
Semi-Annual Report
April 30, 1996
Officers and Directors
Arthur Zeikel, President and Director
James H. Bodurtha, Director
Herbert I. London, Director
Robert R. Martin, Director
Joseph L. May, Director
Andre F. Perold, Director
Terry K. Glenn, Executive Vice President
Vincent R. Giordano, Senior Vice President
Donald C. Burke, Vice President
Kenneth A. Jacob, Vice President
Gerald M. Richard, Treasurer
Mark B. Goldfus, Secretary
<PAGE>
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
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. Statements and other information
herein are as dated and are subject to change.
<PAGE>
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 six months ended April 30, 1996, the Common Stock of
MuniYield New York Insured Fund II, Inc. earned $0.408 per share
income dividends, which included earned and unpaid dividends of
$0.066. This represents a net annualized yield of 5.77%, based on a
month-end net asset value of $14.18 per share. Over the same
period, the total investment return on the Fund's Common Stock was
- -0.09%, based on a change in per share net asset value from $14.63 to
$14.18, and assuming reinvestment of $0.412 per share income
dividends.
For the six-month period ended April 30, 1996, the Fund's Auction
Market Preferred Stock had an average yield of 3.71%.
The Environment
Investor perceptions regarding the US economy changed over the
course of the six-month period ended April 30, 1996. As 1995 drew to
a close and 1996 began, it appeared that the US economy was losing
momentum. Lackluster retail sales, increases in initial unemployment
claims (along with weak job and income growth), and evidence of
slowing in the manufacturing sector all suggested that the rate of
economic growth was decelerating, with some forecasters even
suggesting the possibility of an imminent recession.
However, the consensus outlook for the rate of future economic
growth changed dramatically with the report of stronger-than-
expected employment data for February and March. As a result,
investors began to anticipate renewed economic growth. Long-term
interest rates rose, and the Federal Reserve Board left monetary
policy on hold. Adding to investor concerns was the report that the
Knight Ridder-Commodity Research Bureau Index was near an eight-year
high, largely because of an increase in agricultural prices and an
upward spike in the price of crude oil.
<PAGE>
Investors are likely to continue to focus on the probable direction
of economic activity and Federal Reserve Board monetary policy in
the weeks ahead. At this time, inflationary pressures do not seem to
be building and the capital spending, housing and consumption
sectors are still relatively weak, which suggest that the economy is
not on the verge of overheating. Nevertheless, it is likely that
further indications of stronger economic activity in the weeks ahead
may add to investor concerns that accelerating economic activity
could lead to higher inflation and interest rates.
The Municipal Market
During the six months ended April 30, 1996, tax-exempt bond yields
rose as investors became increasingly concerned that recent economic
growth would reignite inflationary pressures. Through early February
1996, municipal bond yields continued their earlier declines
supported by continued moderate economic growth and favorable
inflationary expectations. As measured by the Bond Buyer Revenue
Bond Index, yields on uninsured, A-rated municipal revenue bonds
declined an additional 30 basis points (0.30%) to 5.70% by early
February. As signs of emerging economic growth became more numerous,
particularly with the release of the strong March employment
figures, inflation fears increased and bond yields rose in response
for the remainder of the six-month period ended April 30, 1996. At
April 30, 1996, long-term municipal bond yields were approximately
6.30%, an increase of approximately 30 basis points over the last
six months. The rise in US Treasury bond yields was more
substantial. Over the last six months, yields on US Treasury
securities rose approximately 60 basis points to 6.90%. During the
April period, the municipal bond market reversed the trend seen
throughout much of 1995 and significantly outperformed the US
Treasury bond market.
The municipal bond market's recent outperformance was largely the
result of two principal factors. First, and perhaps more important,
much of the earlier concern regarding proposed changes in Federal
income tax codes and their effect on the tax treatment of tax-exempt
bond income has dissipated. As the negative revenue impact of the
various proposals, such as the flat tax, became apparent, the
likelihood of immediate reform quickly diminished. When the Kemp
Commission dealing with Federal income tax reform released its
findings early in 1996, the obvious need for reform was highlighted.
However, no specific recommendations of a flat tax, value-added tax
or any other reform were made. Consequently, fears of losing the
favored tax treatment of municipal bond income declined even
further. As a percentage of Treasury bond yields, tax-exempt bond
yield ratios quickly declined from 95% to approximately 90%. This
allowed the municipal bond market to maintain much of the gains made
since early 1995.
<PAGE>
The second major factor leading to the municipal bond market's
recent improvement was the return of a more favorable technical
environment. Over the past six months, approximately $90 billion in
municipal securities were underwritten, an increase of approximately
45% versus the comparable period a year earlier. However, much of
this increase was biased by recent underwritings dedicated toward
refinancing. Like individual homeowners, municipal issuers sought to
refinance their existing higher-couponed debt as tax-exempt bond
yields declined from their highs in 1995. In recent months such
refinancings were estimated to represent at least 50%
of total issuance. However, the recent rise in tax-exempt interest
rates slowed the pace of such refinancings. Over the last three
months approximately $40 billion in long-term tax-exempt securities
were underwritten, an increase of 35% compared to the same period a
year ago. At current interest rate levels large amounts of
refundings are unlikely and the rate of new bond issuance should
continue to decline.
Additionally, investors continue to receive significant amounts of
assets derived from coupon income, bond maturities, and proceeds
from early redemptions. In recent months investors received over $30
billion in such assets. These cash flows helped maintain individual
retail investor demand in recent months. Additionally, major
institutional investors, such as certain insurance companies whose
underwriting profits were cyclically high, demonstrated significant
ongoing interest in the tax-exempt bond market, particularly on
higher-quality securities. Individual and institutional investor
demand was strong enough during the six-month period ended April 30,
1996 to absorb the relative increase in bond issuance.
Looking ahead, we believe the municipal bond market is likely to
continue to outperform the US Treasury market. Investor demand
should remain adequate to absorb new bond issuance. It is also
unlikely that the rapid pace of issuance seen thus far in 1996 will
be maintained. The recent rise in yields made further bond
refinancings economically unfeasible. Since these refinancings were
the driving force of recent bond issuance, as the amount of these
refundings decline, overall issuance should decline. This should
allow the current demand/supply balance to be easily maintained in
upcoming months.
Additionally, as a percentage of US Treasury bond yields, long-term
municipal bond yields remain historically attractive. It is likely
that recent interest rate increases will have a negative impact on
economic growth, perhaps as early as late summer 1996. With long-
term mortgage rates above 8%, the domestic housing sector has
already indicated signs of slower growth. If other interest rate
sectors of the economy, such as the automobile industry, begin to
show similar adverse effects, taxable interest rates would be poised
to resume their decline. With long-term tax-exempt revenue bonds
yielding approximately 90% of their taxable counterparts, municipal
bond yields are poised to decline further.
<PAGE>
Portfolio Strategy
The six-month period ended April 30, 1996 was a volatile one for the
fixed-income markets. Long-term interest rates rose quickly and
dramatically as investors perceived that economic growth was
strengthening, suggesting that the Federal Reserve Board might
initiate a tighter monetary policy. MuniYield New York Insured Fund
II, Inc. entered the six-month period ended April 30, 1996 fully
invested, with an aggressive portfolio strategy. Earlier in the
year, the consensus market scenario focused on a low inflation, slow
and stable gross domestic product growth environment, which would be
positive for fixed-income investments.
As it became clear that there were forces undermining the stable
outlook for bonds, we took steps to help cushion the portfolio from
the effects of a negative bond market. We raised cash reserves to
approximately 10% of total assets and increased the coupon level of
the portion of assets committed to non-insured issues. Those issues
with higher coupon structures are less sensitive to further price
erosion. As we reach interest rate levels that historically have
proved attractive to traditional retail municipal bond investors, we
intend to recommit the Fund's cash reserves to long-term, higher-
yielding securities to seek to enhance current return. With long-
term US Treasury securities currently yielding over 7% and quality
municipal bonds yielding above 6%, we anticipate returning the Fund
to an aggressive portfolio strategy in order to participate in any
future price appreciation as the market recovers.
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
<PAGE>
(Vincent R. Giordano)
Vincent R. Giordano
Senior Vice President
(Walter C. O'Connor)
Walter C. O'Connor
Portfolio Manager
May 29, 1996
We are pleased to announce that Walter C. O'Connor is responsible
for the day-to-day management of MuniYield New York Insured Fund II,
Inc. Mr. O'Connor has been employed by Merrill Lynch Asset
Management, L.P. (an affiliate of the Fund's investment adviser)
since 1993 as Vice President and Portfolio Manager and was Assistant
Vice President from 1991 to 1993. Prior thereto, he was Assistant
Vice President with Prudential Securities from 1984 to 1991.
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.
<PAGE>
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 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
IDA Industrial Development Authority
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--100.9%
<S> <S> <C> <S> <C>
AAA Aaa $ 4,000 Battery Park City Authority, New York, Revenue Refunding Bonds, Senior
Series A, 5.25% due 11/01/2017 (c) $ 3,636
Metropolitan Transportation Authority, New York, Commuter Facilities
Revenue Refunding Bonds, Series B (c):
AAA Aaa 10,000 6.25% due 7/01/2017 10,282
AAA Aaa 8,650 6.25% due 7/01/2022 8,877
AAA Aaa 5,500 Metropolitan Transportation Authority, New York, Transportation
Facilities Revenue Bonds, Series O, 6% due 7/01/2024 (c) 5,520
Monroe County, New York, Public Improvement, UT (d):
AAA Aaa 1,850 6.15% due 6/01/2016 1,918
AAA Aaa 1,000 6.15% due 6/01/2017 1,027
AAA Aaa 3,250 Nassau County, New York, GO, UT, Series P, 6.50% due 11/01/2010 (b) 3,560
AAA Aaa 1,100 New Rochelle, New York, GO, UT, Series B, 6.15% due 8/15/2018 (c) 1,130
A1+ VMIG1++ 1,500 New York City, New York, Cultural Resource Trust Revenue Bonds
(Solomon R. Guggenheim), VRDN, Series B, 3.90% due 12/01/2015 (a) 1,500
New York City, New York, GO, UT:
BBB+ Baa1 10,000 Series F, 6.625% due 2/15/2014 10,157
AAA Aaa 2,660 Series J, 6% due 2/15/2005 (c) 2,832
BBB+ Baa1 5,450 Series K, 6.25% due 4/01/2016 5,334
AAA Aaa 5,000 New York City, New York, IDA, Civic Facilities Revenue Bonds
(USTA National Tennis Center Project), 6.375% due 11/15/2014 (f) 5,220
New York City, New York, Municipal Water Finance Authority, Water
and Sewer System Revenue Bonds:
AAA Aaa 1,760 Series A, 7% due 6/15/2001 (b)(g) 1,962
AAA Aaa 2,480 Series A-1994, 7% due 6/15/2015 (b) 2,678
AAA Aaa 9,000 Series B, 5.50% due 6/15/2019 (c) 8,473
A1+ VMIG1++ 200 VRDN, Series C, 4% due 6/15/2022 (a)(b) 200
AAA VMIG1++ 1,600 VRDN, Series C, 4% due 6/15/2023 (a)(b) 1,600
<PAGE>
New York State Dormitory Authority Revenue Bonds:
AAA Aaa 3,640 (City University), 6.25% due 7/01/2020 (d) 3,776
AAA Aaa 2,825 (Consolidated City University System), Second Generation
Series A, 5.75% due 7/01/2013 (b) 2,834
AAA Aaa 7,000 (Consolidated City University System), Third Generation Reserves,
Series 1, 5.375% due 7/01/2025 (d) 6,418
AAA Aaa 1,000 (Consolidated City University System), Third Generation Reserves,
Series 2, 6.875% due 7/01/2014 (c) 1,084
A1+ VMIG1++ 1,400 (Cornell University), VRDN, Series B, 4.10% due 7/01/2025 (a) 1,400
BBB Baa1 5,000 (Department of Health), 5.75% due 7/01/2017 4,636
AAA Aaa 3,650 (Mount Sinai School of Medicine), Series A, 5% due 7/01/2016 (c) 3,246
AAA Aaa 6,000 (Mount Sinai School of Medicine), Series A, 5.15% due 7/01/2024 (c) 5,370
AAA Aaa 1,750 Refunding (Mount Sinai School of Medicine), 6.75% due 7/01/2009 (c) 1,912
BBB+ Baa1 2,000 Refunding (State University Educational Facilities), Series B, 7%
due 5/15/2016 2,121
AAA Aaa 1,050 (Saint John's University), 6.875% due 7/01/2011 (d) 1,133
New York State Energy Research and Development Authority, Facilities
Revenue Bonds (Consolidated Edison Company Inc.), AMT, Series A:
AAA Aaa 4,450 6.75% due 1/15/2027 (c) 4,650
AAA Aaa 3,250 6.75% due 1/15/2027 (d) 3,396
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in Thousands)
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
New York (concluded)
<S> <S> <C> <S> <C>
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) $ 10,571
A1+ NR* 200 New York State Environmental Facilities Corporation, Resource Recovery
Revenue Bonds (OFS Equity Huntington Project), VRDN, AMT, 4.10% due
11/01/2014 (a) 200
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) 1,348
New York State Local Government Assistance Corporation, VRDN (a):
A1+ VMIG1++ 7,000 Series B, 4.10% due 4/01/2025 7,000
A1+ VMIG1++ 5,500 Series F, 3.90% due 4/01/2025 5,500
New York State Medical Care Facilities Finance Agency Revenue Bonds:
AAA Aaa 2,330 (Mental Health), Series F, 6.50% due 8/15/2012 (f) 2,442
AAA Aaa 3,390 (Montefiore Medical Center), Series A, 5.75% due 2/15/2025 (d)(e) 3,265
AAA Aaa 6,250 (New York Hospital Mortgage), Series A, 6.80% due 8/15/2024 (d)(e) 6,699
AAA Aaa 8,500 (New York Hospital Mortgage), Series A, 6.50% due 8/15/2029 (d)(e) 8,835
AAA Aaa 5,200 Refunding (Hospital and Nursing Home), Series C, 6.375% due 8/15/2029 (c) 5,370
<PAGE>
AAA Aaa 7,125 New York State Thruway Authority, General Revenue Bonds, Series B, 5%
due 1/01/2020 (c) 6,246
New York State Thruway Authority, Highway and Bridge Trust Fund:
AAA Aaa 7,500 Series B, 5.125% due 4/01/2015 (c) 6,842
AAA Aaa 8,000 UT, Series B, 6.25% due 4/01/2012 (b) 8,429
AAA Aaa 8,675 New York State Urban Development Corporation, Revenue Refunding Bonds
(Correctional Facilities), 5.375% due 1/01/2012 (c) 8,367
North Hempstead, New York, Refunding, Series B, UT (b):
AAA Aaa 1,745 6.40% due 4/01/2013 1,896
AAA Aaa 555 6.40% due 4/01/2017 595
Port Authority of New York and New Jersey, Consolidated Revenue Bonds:
AA- A1 5,000 72nd Series, 7.35% due 10/01/2002 (g) 5,735
AAA Aaa 5,000 104th Series, Third Installment, 4.75% due 1/15/2026 (d) 4,162
Syracuse, New York, COP, Revenue Bonds (Syracuse Hancock International
Airport), AMT (b):
AAA Aaa 3,650 6.625% due 1/01/2012 3,795
AAA Aaa 3,120 6.50% due 1/01/2017 3,191
A1+ VMIG1++ 2,400 Syracuse, New York, IDA, Civic Facility Revenue Bonds (Multi-Modal
Syracuse University Project), VRDN, 3.90% due 3/01/2023 (a) 2,400
Triborough Bridge and Tunnel Authority, New York, Special Obligation
Refunding Bonds:
AAA Aaa 6,575 6.25% due 1/01/2012 (d) 6,821
AAA Aaa 2,000 Series B, 6.875% due 1/01/2015 (c) 2,151
Total Investments (Cost--$223,919)--100.9% 229,742
Liabilities in Excess of Other Assets--(0.9%) (2,121)
--------
Net Assets--100.0% $227,621
========
<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, 1996.
(b)FGIC Insured.
(c)MBIA Insured.
(d)AMBAC Insured.
(e)FHA Insured.
(f)FSA Insured.
(g)Prerefunded.
*Not Rated.
++Highest short-term rating by Moody's Investors Service, Inc.
<PAGE>
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION
<TABLE>
Statement of Assets, Liabilities and Capital as of April 30, 1996
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$223,918,739) (Note 1a) $229,741,844
Receivables:
Securities sold $ 14,099,097
Interest 3,726,356 17,825,453
------------
Deferred organization expenses (Note 1e) 11,523
Prepaid registration fees and other assets 9,630
------------
Total assets 247,588,450
------------
Liabilities: Payables:
Securities purchased 19,479,545
Dividends to shareholders (Note 1f) 290,321
Investment adviser (Note 2) 99,931 19,869,797
------------
Accrued expenses and other liabilities 97,955
------------
Total liabilities 19,967,752
------------
Net Assets: Net assets $227,620,698
============
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 825,026
Accumulated realized capital losses on investments--net
(Note 5) (4,931,254)
Unrealized appreciation on investments--net 5,823,105
------------
Total--Equivalent to $14.18 net asset value per share of
Common Stock (market price--$13.125) 157,620,698
------------
Total capital $227,620,698
============
<FN>
*Auction Market Preferred Stock.
<PAGE>
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (continued)
<TABLE>
Statement of Operations
<CAPTION>
For the Six Months Ended
April 30, 1996
<S> <S> <C> <C>
Investment Income Interest and amortization of premium and discount earned $ 6,667,867
(Note 1d):
Expenses: Investment advisory fees (Note 2) $ 582,804
Commission fees (Note 4) 88,965
Professional fees 40,793
Accounting services (Note 2) 28,451
Transfer agent fees 25,427
Printing and shareholder reports 24,753
Listing fees 12,344
Directors' fees and expenses 11,990
Custodian fees 6,660
Pricing fees 4,782
Amortization of organization expenses (Note 1e) 3,482
Other 7,519
------------
Total expenses 837,970
------------
Investment income--net 5,829,897
------------
<PAGE>
Realized & Realized gain on investments--net 510,550
Unrealized Gain Change in unrealized appreciation on investments--net (5,506,942)
(Loss) on ------------
Investments--Net Net Increase in Net Assets Resulting from Operations $ 833,505
(Notes 1b, ============
1d & 3):
See Notes to Financial Statements.
</TABLE>
<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: 1996 1995
<S> <S> <C> <C>
Operations: Investment income--net $ 5,829,897 $ 11,832,196
Realized gain (loss) on investments--net 510,550 (3,600,834)
Change in unrealized appreciation/depreciation on investments
--net (5,506,942) 20,296,119
------------ ------------
Net increase in net assets resulting from operations 833,505 28,527,481
------------ ------------
Dividends to Investment income--net:
Shareholders Common Stock (4,574,298) (9,302,093)
(Note 1f): Preferred Stock (1,293,264) (2,547,832)
------------ ------------
Net decrease in net assets resulting from dividends
to shareholders (5,867,562) (11,849,925)
------------ ------------
Net Assets: Total increase (decrease) in net assets (5,034,057) 16,677,556
Beginning of period 232,654,755 215,977,199
------------ ------------
End of period* $227,620,698 $232,654,755
============ ============
<FN>
*Undistributed investment income--net $ 825,026 $ 862,691
============ ============
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (concluded)
<PAGE>
<TABLE>
Financial Highlights
<CAPTION>
For the For the Period
The following per share data and ratios have been derived Six Months June 26,
from information provided in the financial statements. Ended 1992++ to
April 30, For the Year Ended October 31, Oct. 31,
Increase (Decrease) in Net Asset Value: 1996 1995 1994 1993 1992
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 14.63 $ 13.13 $ 15.89 $ 13.43 $ 14.18
Operating -------- -------- -------- -------- --------
Performance: Investment income--net .52 1.07 1.07 1.11 .27
Realized and unrealized gain (loss) on
investments--net (.44) 1.50 (2.76) 2.46 (.66)
-------- -------- -------- -------- --------
Total from investment operations .08 2.57 (1.69) 3.57 (.39)
-------- -------- -------- -------- --------
Less dividends and distributions to
Common Stock shareholders:
Investment income--net (.41) (.84) (.87) (.91) (.18)
Realized gain on investments--net -- -- (.01) -- --
-------- -------- -------- -------- --------
Total dividends and distributions to
Common Stock shareholders (.41) (.84) (.88) (.91) (.18)
-------- -------- -------- -------- --------
Capital charge resulting from issuance
of Common Stock -- -- -- -- (.03)
-------- -------- -------- -------- --------
Effect of Preferred Stock activity:++++
Dividends and distributions to Preferred
Stock shareholders:
Investment income--net (.12) (.23) (.19) (.20) (.02)
Realized gain on investments--net -- -- (.00)+++++ -- --
Capital charge resulting from issuance of
Preferred Stock -- -- -- -- (.13)
-------- -------- -------- -------- --------
Total effect of Preferred Stock activity (.12) (.23) (.19) (.20) (.15)
-------- -------- -------- -------- --------
Net asset value, end of period $ 14.18 $ 14.63 $ 13.13 $ 15.89 $ 13.43
======== ======== ======== ======== ========
Market price per share, end of period $ 13.125 $ 13.25 $ 11.00 $ 15.25 $ 13.75
======== ======== ======== ======== ========
Total Investment Based on market price per share 2.11%+++ 28.61% (22.96%) 17.90% (7.17%)+++
Return:** ======== ======== ======== ======== ========
Based on net asset value per share (0.09%)+++ 18.96% (11.75%) 25.77% (4.09%)+++
======== ======== ======== ======== ========
<PAGE>
Ratios to Average Expenses, net of reimbursement .72%* .74% .74% .62% .13%*
Net Assets:*** ======== ======== ======== ======== ========
Expenses .72%* .74% .74% .70% .68%*
======== ======== ======== ======== ========
Investment income--net 4.98%* 5.27% 5.09% 5.25% 5.05%*
======== ======== ======== ======== ========
Supplemental Net assets, net of Preferred Stock, end
Data: of period(in thousands) $157,621 $162,655 $145,977 $176,595 $146,633
======== ======== ======== ======== ========
Preferred Stock outstanding, end of
period (in thousands) $ 70,000 $ 70,000 $ 70,000 $ 70,000 $ 70,000
======== ======== ======== ======== ========
Portfolio turnover 76.12% 110.76% 36.79% 3.33% 19.40%
======== ======== ======== ======== ========
Leverage: Asset coverage per $1,000 $ 3,252 $ 3,324 $ 3,085 $ 3,523 $ 3,095
======== ======== ======== ======== ========
Dividends Investment income--net $ 462 $ 910 $ 759 $ 809 $ 92
Per Share ======== ======== ======== ======== ========
On Preferred
Stock
Outstanding:++++++
<FN>
++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 that occurred on December 1, 1994.
+++Aggregate total investment return.
+++++Amount is less than $.01 per share.
*Annualized.
**Total investment returns based on market value, which can be
significantly greater or lesser than the net asset value, may result
in substantially different returns. Total investment returns exclude
the effects of sales loads.
***Do not reflect the effect of dividends to Preferred Stock
shareholders.
See Notes to Financial Statements.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
<PAGE>
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. These unaudited financial
statements reflect all adjustments which are, in the opinion of
management, necessary to a fair statement of the results for the
interim period presented. All such adjustments are of a normal
recurring nature. The Fund determines and makes available for
publication the net asset value of its Common Stock on a weekly
basis. The Fund's Common Stock is listed on the New York Stock
Exchange under the symbol MYT. The following is a summary of
significant accounting policies followed by the Fund.
(a) Valuation of investments--Municipal bonds are traded primarily
in the over-the-counter markets and are valued at the most recent
bid price or yield equivalent as obtained by the Fund's pricing
service from dealers that make markets in such securities. Financial
futures contracts and options thereon, which are traded on
exchanges, are valued at their closing prices as of the close of
such exchanges. Options, which are traded on exchanges, are valued
at their last sale price as of the close of such exchanges or,
lacking any sales, at the last available bid price. Securities with
remaining maturities of sixty days or less are valued at amortized
cost, which approximates market value. Securities 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.
<PAGE>
* Options--The Fund is authorized to write covered call options and
purchase put options. When the Fund writes an option, an amount
equal to the premium received by the Fund is reflected as an asset
and an equivalent liability. The amount of the liability is
subsequently marked to market to reflect the current market value of
the option written.
When a security is purchased or sold through an exercise of an
option, the related premium paid (or received) is added to (or
deducted from) the basis of the security acquired or deducted from
(or added to) the proceeds of the security sold. When an option
expires (or the Fund enters into a closing transaction), the Fund
realizes a gain or loss on the option to the extent of the premiums
received or paid (or gain or loss to the extent the cost of the
closing transaction exceeds the premium paid or received).
Written and purchased options are non-income producing investments.
(c) Income taxes--It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute substantially all of its
taxable income to its shareholders. Therefore, no Federal income tax
provision is required.
(d) Security transactions and investment income--Security
transactions are recorded on the dates the transactions are entered
into (the trade dates). Interest income is recognized on the accrual
basis. Discounts and market premiums are amortized into interest
income. Realized gains and losses on security transactions are
determined on the identified cost basis.
(e) Deferred organization expenses--Deferred organization expenses
are amortized on a straight-line basis over a five-year period.
(f) Dividends and distributions--Dividends from net investment
income are declared and paid monthly. Distributions of capital gains
are recorded on the ex-dividend dates.
2. Investment Advisory Agreement and
Transactions with Affiliates:
The Fund has entered into an Investment Advisory Agreement with Fund
Asset Management, L.P. ("FAM"). The general partner of FAM is
Princeton Services, Inc. ("PSI"), an indirect wholly-owned
subsidiary of Merrill Lynch & Co., Inc. ("ML & Co."), which is the
limited partner.
<PAGE>
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 six months ended April 30, 1996 were $169,530,640 and
$171,674,292, respectively.
Net realized and unrealized gains as of April 30, 1996 were as
follows:
Realized Unrealized
Gains Gains
Long-term investments $ 77,525 $5,823,105
Financial futures contracts 433,025 --
---------- ----------
Total $ 510,550 $5,823,105
========== ==========
As of April 30, 1996, net unrealized appreciation for Federal income
tax purposes aggregated $5,823,105, of which $7,336,234 related to
appreciated securities and $1,513,129 related to depreciated
securities. The aggregate cost of investments as of April 30, 1996
for Federal income tax purposes was $223,918,739.
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, 1996, shares issued and
outstanding remained constant at 11,114,832. At April 30, 1996,
total paid-in capital amounted to $155,903,821.
<PAGE>
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, 1996 was 3.85%.
As of April 30, 1996, 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 $14,768.
The Fund pays commissions to certain broker-dealers at the end of
each auction at an annual rate ranging from 0.25% to 0.375%,
calculated on the proceeds of each auction. For the six months ended
April 30, 1996, MLPF&S, an affiliate of FAM, earned $58,275 as
commissions.
5. Capital Loss Carryforward:
At October 31, 1995, the Fund had a net 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 May 10, 1996, the Fund's Board of Directors declared an ordinary
income dividend to Common Stock shareholders in the amount of
$0.066419 per share, payable on May 30, 1996 to shareholders of
record as of May 21, 1996.
