MUNIYIELD
QUALITY
FUND, INC.
FUND LOGO
Semi-Annual Report
April 30, 1996
This report, including the financial information herein, is
transmitted to the shareholders of MuniYield Quality Fund, Inc. for
their information. It is not a prospectus, circular or
representation intended for use in the purchase of shares of the
Fund or any securities mentioned in the report. Past performance
results shown in this report should not be considered a
representation of future performance. The Fund has leveraged its
Common Stock by issuing Preferred Stock to provide the Common Stock
shareholders with a potentially higher rate of return. Leverage
creates risks for Common Stock shareholders, including the
likelihood of greater volatility of net asset value and market price
of shares of the Common Stock, and the risk that fluctuations in the
short-term dividend rates of the Preferred Stock may affect the
yield to Common Stock shareholders. Statements and other information
herein are as dated and are subject to change.
<PAGE>
MuniYield
Quality Fund, Inc.
Box 9011
Princeton, NJ
08543-9011
MuniYield Quality Fund, Inc.
TO OUR SHAREHOLDERS
For the six-month period ended April 30, 1996, the Common Stock of
MuniYield Quality Fund, Inc. earned $0.452 per share income
dividends, which included earned and unpaid dividends of $0.073.
This represents a net annualized yield of 6.33%, based on a month-
end per share net asset value of $14.31. Over the same period, the
total investment return on the Fund's Common Stock was +1.54%, based
on a change in per share net asset value from $14.58 to $14.31, and
assuming reinvestment of $0.454 per share income dividends.
The average yields of the Fund's Auction Market Preferred Stock for
the six months ended April 30, 1996 were as follows: Series A,
3.93%; Series B, 3.66%; Series C, 3.36%; and Series D, 3.55%.
<PAGE>
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.
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 unlikely 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.
<PAGE>
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.
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.
<PAGE>
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.
Portfolio Strategy
We entered the six-month period ended April 30, 1996 expecting
interest rates to continue to decline as they had done for much of
1995 since the economy was showing continued signs of sluggishness
and it appeared that an agreement to balance the Federal budget was
imminent. The Federal Reserve Board saw these signs as well and
reduced the Federal Funds rate by 50 basis points to 5.25% by
January 31, 1996. The fixed-income markets rallied on this news and
anticipated further interest rate cuts.
To take advantage of this positive environment for bonds, we reduced
the Fund's cash reserve position and extended its duration so that
it could fully participate in the ensuing increase in bond prices.
However, with the higher-than-expected rate of job growth reported
in March, fixed-income prices declined sharply. We quickly reversed
our investment strategy to seek to preserve capital. To do this we
cut the Fund's exposure to the bond market by raising cash. As the
municipal market started to settle in at higher yields, we have
begun to invest in quality bonds at much higher yield levels than
was possible only a short time ago.
Looking ahead, we will continue to focus on signs of growth and
possible inflation in the economy. Absent growth and inflation, the
municipal market may be poised for a substantial rally.
<PAGE>
In Conclusion
We appreciate your ongoing interest in MuniYield Quality Fund, Inc.,
and we look forward to serving your investment needs in the months
and years to come.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Vincent R. Giordano)
Vincent R. Giordano
Senior Vice President
(Hugh T. Hurley III)
Hugh T. Hurley III
Vice President and Portfolio Manager
June 5, 1996
THE BENEFITS AND RISKS OF LEVERAGING
MuniYield Quality Fund, Inc. utilizes leveraging to seek to enhance
the yield and net asset value of its Common Stock. However, these
objectives cannot be achieved in all interest rate environments. To
leverage, the Fund issues Preferred Stock, which pays dividends at
prevailing short-term interest rates, and invests the proceeds in
long-term municipal bonds. The interest earned on these investments
is paid to Common Stock shareholders in the form of dividends, and
the value of these portfolio holdings is reflected in the per share
net asset value of the Fund's Common Stock. However, in order to
benefit Common Stock shareholders, the yield curve must be
positively sloped; that is, short-term interest rates must be lower
than long-term interest rates. At the same time, a period of
generally declining interest rates will benefit Common Stock
shareholders. If either of these conditions change, then the risks
of leveraging will begin to outweigh the benefits.
<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 on 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 listings of MuniYield Quality Fund, Inc.'s portfolio
holdings in the Schedule of Investments, we have abbreviated the
names of many of the securities according to the list below and at
right.
ACES SM Adjustable Convertible Extendable Securities
AMT Alternative Minimum Tax (subject to)
DATES Daily Adjustable Tax-Exempt Securities
EDA Economic Development Authority
GO General Obligation Bonds
HDA Housing Development Authority
HFA Housing Finance Agency
IDA Industrial Development Authority
IDB Industrial Development Board
IDR Industrial Development Revenue Bonds
PCR Pollution Control Revenue Bonds
S/F Single-Family
UT Unlimited Tax
VRDN Variable Rate Demand Notes
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (in Thousands)
<CAPTION>
S&P Moody's Face Value
State Ratings Ratings Amount Issue (Note 1a)
<S> <S> <S> <C> <S> <C>
Alabama--1.1% BBB Baa1 $ 3,000 Courtland, Alabama, IDB, IDR, Refunding (Champion
International Corporation), Series A, 7.20% due 12/01/2013 $ 3,261
BBB Baa1 3,640 Courtland, Alabama, IDB, Solid Waste Disposal Revenue Bonds
(Champion International Corporation Project), AMT, 7% due
6/01/2022 3,789
Alaska--1.7% A- A 5,000 Alaska Industrial Development and Export Authority (Revolving
Fund), AMT, Series A, 6.50% due 4/01/2014 5,114
NR* NR* 6,000 Valdez, Alaska, Marine Terminal Revenue Refunding Bonds
(Amerada Hess Pipeline Corporation), 6.10% due 2/01/2024 5,663
Arizona--1.0% A1+ P1 400 Coconino County, Arizona, Pollution Control Corporation Revenue
Bonds (Arizona Public Service--Navajo Project), VRDN, AMT,
Series A, 4.30% due 10/01/2029 (a) 400
Maricopa County, Arizona, Pollution Control Corporation, PCR,
Refunding (Arizona Public Service Company), VRDN (a):
A1+ P1 1,000 Series B, 4.10% due 5/01/2029 1,000
A1+ P1 400 Series C, 4.15% due 5/01/2029 400
A1+ P1 2,000 Series F, 4.20% due 5/01/2029 2,000
AA Aa 1,825 Maricopa County, Arizona, Unified School District No. 48
(Scottsdale School Improvement), UT, 6.60% due 7/01/2012 2,038
AA P1 500 Pinal County, Arizona, IDA, PCR (Magma Copper/Newmont Mining
Corporation), VRDN, 4.05% due 12/01/2009 (a) 500
Arkansas--0.4% AAA NR* 2,315 Arkansas State Development Finance Authority, S/F Mortgage
Revenue Bonds, AMT, Series A, 7.30% due 3/01/2013 (h) 2,392
A1+ P1 100 Clark County, Arkansas, Solid Waste Disposal Revenue Bonds
(Reynolds Metals Company Project), VRDN, AMT, 4.10%
due 8/01/2022 (a) 100
California--2.4% California State Public Works Board, Lease Revenue Bonds,
Series A:
A- A 6,800 (Department of Corrections, Monterey County--Soledad II),
7% due 11/01/2019 7,401
AAA Aaa 7,000 (Various University of California Projects), 6.60% due
12/01/2002 (i) 7,861
<PAGE>
Colorado--11.7% Adams and Arapahoe Counties, Colorado, Joint School
District No. 28-J (Aurora), UT, Series C:
A+ A1 3,000 5.75% due 12/01/2005 3,139
A+ A1 2,000 5.75% due 12/01/2006 2,082
AA Aa 6,650 Arapahoe County, Colorado, School District No. 005 (Cherry
Creek), UT, Series B, 5.15% due 12/15/2015 6,221
AA Aa 4,520 Arapahoe County, Colorado, School District No. 006 (Littleton),
UT, Series A, 5.125% due 12/01/2009 4,372
NR* Aaa 1,350 Colorado Health Facilities Authority, Hospital Revenue Bonds
(P/SL Healthcare System Project), Series A, 6.875% due
2/15/2003 (i) 1,525
NR* Aaa 4,550 Colorado Health Facilities Authority Revenue Bonds (Swedish
Medical Center Project), Series A, 6.80% due 1/01/2003 (i) 5,115
Colorado HFA, S/F Program:
NR* Aa 2,500 AMT, Senior Series A-1, 7.40% due 11/01/2027 2,723
NR* Aa 7,000 AMT, Senior Series D-1, 7.375% due 6/01/2026 7,558
NR* Aa 4,485 Refunding, AMT, Senior Series B-1, 7.90% due 12/01/2025 4,971
NR* Aa 1,500 Senior Series C-2, 7.45% due 6/01/2017 1,630
A+ A1 845 Colorado Springs, Colorado, Revenue Bonds (Colorado College
Project), 5.125% due 6/01/2016 777
AA Aa 11,245 Colorado Springs, Colorado, Utilities Revenue Refunding and
Improvement Bonds, Series A, 5.125% due 11/15/2023 9,940
Denver, Colorado, City and County Airport Revenue Bonds, AMT:
BBB Baa 10,000 Series B, 7.25% due 11/15/2023 10,512
BBB Baa 5,000 Series D, 7.75% due 11/15/2013 5,775
BBB Baa 7,250 Series D, 7.75% due 11/15/2021 7,945
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<CAPTION>
S&P Moody's Face Value
State Ratings Ratings Amount Issue (Note 1a)
<S> <S> <S> <C> <S> <C>
District of A+ A1 $ 2,500 District of Columbia, Revenue Bonds (Georgetown University),
Columbia--0.4% Series B, 7.15% due 4/01/2021 $ 2,655
Florida--0.7% AA- VMIG1++ 200 Dade County, Florida, IDA, Exempt Facilities, Revenue Refunding
Bonds (Florida Power and Light Company), VRDN, 4.10%
due 6/01/2021 (a) 200
NR* Baa 3,405 Palm Bay, Florida, Lease Revenue Refunding Bonds (Florida
Education & Research Foundation Project), Series A,
7% due 9/01/2024 3,547
A-1 VMIG1++ 500 Pinellas County, Florida, Health Facilities Authority,
Revenue Refunding Bonds (Pooled Hospital Loan Program),
DATES, 4.05% due 12/01/2015 (a) 500
<PAGE>
Georgia--1.7% AA+ Aaa 5,000 Georgia State, GO, Series F, 6.50% due 12/01/2001 5,473
A+ A3 4,785 Monroe County, Georgia, Development Authority, PCR, Refunding
(Oglethorpe Power Scherer), Series A, 6.80% due 1/01/2011 5,154
Hawaii--1.5% AA Aa 8,820 Honolulu, Hawaii, City and County, UT, Series A, 6.25%
due 4/01/2014 9,319
Illinois--7.7% AAA Aaa 17,000 Chicago, Illinois, Metropolitan Housing Development Corporation,
Mortgage Revenue Refunding Bonds (Housing Development),
Series A, 6.85% due 7/01/2022 (b)(f) 17,665
AAA Aaa 4,970 Chicago, Illinois, Refunding, Series B, 5.125% due 1/01/2025 (e) 4,341
BBB Baa2 21,000 Illinois Development Finance Authority, PCR, Refunding
(Illinois Power Company Project), Series A, 7.375% due
7/01/2021 23,153
NR* A 3,750 Illinois Student Assistance Commission, Student Loan Revenue
Bonds, AMT, Sub-Series CC, 6.875% due 3/01/2015 3,860
Indiana--5.2% De Kalb County, Indiana, Redevelopment Authority (Mini-Mill
Local Public Improvement Project), Series A:
A NR* 3,000 6.50% due 1/15/2014 3,081
A NR* 3,220 6.625% due 1/15/2017 3,313
A NR* 2,500 Indiana Bond Bank Revenue Guarantee (State Revolving Fund
Program), Series A, 6.875% due 2/01/2012 2,702
BBB Baa2 7,800 Indianapolis, Indiana, Airport Authority, Special Facilities
Revenue Bonds (Federal Express Corporation Project), AMT,
7.10% due 1/15/2017 8,214
A+ NR* 15,000 Indianapolis, Indiana, Local Public Improvement Bond Bank,
Refunding, Series D, 6.75% due 2/01/2020 15,902
Iowa--0.7% NR* A 4,070 Iowa Student Loan Liquidity Corporation, Student Loan Revenue
Bonds (Iowa Partnership), AMT, 6.60% due 7/01/2008 4,175
Kansas--0.7% AAA Aaa 4,000 Kansas City, Kansas, Utility System Revenue Refunding and
Improvement Bonds, 6.375% due 9/01/2023 (e) 4,142
Kentucky NR* Baa1 5,000 Ashland, Kentucky, PCR, Refunding (Ashland Oil Incorporated
- --4.4% Project), 6.65% due 8/01/2009 5,196
AAA Aaa 5,000 Kentucky Housing Corporation, Housing Revenue Bonds, AMT,
Series B, 6.625% due 7/01/2026 (f) 5,085
AAA Aaa 6,570 Lexington--Fayette Urban County Government, Kentucky,
Governmental Project, Revenue Bonds (University of Kentucky
Alumni Association Incorporated Project), 6.75% due 11/01/2020 (c) 7,104
NR* NR* 5,250 Perry County, Kentucky, Solid Waste Disposal Revenue Bonds
(TJ International Project), AMT, 7% due 6/01/2024 5,306
AA Aa2 5,000 Trimble County, Kentucky, PCR (Louisville Gas and Electric
Company), AMT, Series B, 6.55% due 11/01/2020 5,220
<PAGE>
Louisiana NR* Baa2 11,115 Lake Charles, Louisiana, Harbor and Terminal District, Port
- --2.0% Facilities Revenue Refunding Bonds (Trunkline Long Company
Project), 7.75% due 8/15/2022 12,358
A1+ P1 600 Louisiana State Offshore Terminal Authority, Deepwater Port
Revenue Refunding Bonds (Loop Inc.--First Stage), ACES, 4.10%
due 9/01/2006 (a) 600
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<CAPTION>
S&P Moody's Face Value
State Ratings Ratings Amount Issue (Note 1a)
<S> <S> <S> <C> <S> <C>
Maryland NR* VMIG1++ $ 900 Maryland State Health and Higher Educational Facilities
- --0.5% Authority Revenue Bonds (Pooled Loan Program), VRDN,
Series A, 4.05% due 4/01/2035 (a) $ 900
NR* Aaa 1,950 Prince Georges County, Maryland, Hospital Revenue Bonds
(Dimensions Health Corporation), 7% due 7/01/2002 (i) 2,208
Massachusetts Massachusetts Bay Transportation Authority, General
- --4.6% Transportation Systems, Revenue Refunding Bonds, UT,
Series A:
A+ A1 3,730 7% due 3/01/2011 4,215
A+ A1 3,550 7% due 3/01/2014 4,002
BBB+ Aaa 1,045 Massachusetts Municipal Wholesale Electric Company, Power
Supply System Revenue Bonds, Series B, 6.75% due 7/01/2002 (i) 1,171
A A1 3,595 Massachusetts State Health and Educational Facilities
Authority Revenue Bonds (Brigham and Women's Hospital),
Series C, 7% due 6/01/2018 3,798
AAA Aaa 3,000 Massachusetts State HFA, Residential Development, Series D,
6.80% due 11/15/2012 (j) 3,142
Massachusetts State HFA, S/F Housing Revenue Bonds:
A+ Aa 4,090 Series 33, 6.35% due 6/01/2017 4,146
A+ Aa 3,035 Series 37, 6.35% due 6/01/2017 3,077
AAA Aaa 5,000 Massachusetts State Water Resource Authority, Series A,
6.50% due 12/01/2001 (i) 5,515
Michigan--3.5% BBB Baa1 12,650 Dickinson County, Michigan, Economic Development Corporation,
PCR, Refunding (Champion International Corporation Project),
5.85% due 10/01/2018 11,913
A A 4,375 Michigan State Hospital Finance Authority, Revenue Refunding
Bonds (Detroit Medical Center Obligation Group), Series A,
6.50% due 8/15/2018 4,420
NR* P1 700 Michigan State Strategic Fund, PCR, Refunding (Consumers
Power Project), VRDN, Series A, 4.10% due 4/15/2018 (a) 700
AA Aa 5,000 Royal Oak, Michigan, Hospital Finance Authority, Hospital Revenue
Bonds (William Beaumont Hospital), Series D, 6.75% due 1/01/2020 5,211
<PAGE>
Missouri--0.9% AAA Aaa 2,000 Kansas City, Missouri, Municipal Assistance Corporation,
Revenue Refunding Bonds (Leasehold--H. Roe Bartle), Series A,
5% due 4/15/2020 (c) 1,768
AA- Aa3 4,000 Saint Louis, Missouri, Parking Facility Revenue Bonds,
6.625% due 12/15/2021 4,088
Nebraska--3.2% Nebraska Public Power District Revenue Bonds:
AAA Aaa 7,600 Electric System, Series A, 5.25% due 1/01/2028(c) 6,895
AAA Aaa 9,400 Power Supply, Series A, 5.25% due 1/01/2028(c) 8,528
A+ A1 5,000 Refunding, Power Supply, 6.125% due 1/01/2015 5,031
New NR* Baa1 4,290 New Hampshire Higher Educational and Health Facilities
Hampshire--0.6% Authority, Revenue Refunding Bonds (Saint Anselm College),
6.20% due 7/01/2013 4,106
New A1+ P1 2,500 Farmington, New Mexico, PCR (Arizona Public Service Company),
Mexico--1.2% VRDN, AMT, Series C, 4.25% due 9/01/2024 (a) 2,500
A A2 5,000 Lordsburg, New Mexico, PCR, Refunding (Phelps Dodge
Corporation Project), 6.50% due 4/01/2013 5,142
New York New York City, New York, GO, UT, Series A:
- --5.1% BBB+ NR* 3,535 7.75% due 8/15/2001 (i) 4,081
BBB+ Baa1 1,465 7.75% due 8/15/2017 1,624
A Aa 2,500 New York State Environmental Facilities Corporation, PCR
(State Water Revolving Fund), Series E, 6.50% due 6/15/2014 2,633
A A 13,450 New York State Local Government Assistance Corporation,
Series A, 6.50% due 4/01/2020 13,787
New York State Urban Development Corporation Revenue Bonds:
BBB Baa1 5,000 Refunding (Correctional Capital Facilities), 5.75% due 1/01/2013 4,704
BBB Aaa 5,000 (State Facilities), 7.50% due 4/01/2001 (i) 5,695
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<CAPTION>
S&P Moody's Face Value
State Ratings Ratings Amount Issue (Note 1a)
<S> <S> <S> <C> <S> <C>
North A A2 $ 4,500 Martin County, North Carolina, Industrial Facilities and
Carolina--1.0% Pollution Control Financing Authority Revenue Bonds (Solid
Waste--Weyerhaeuser Company), AMT, 5.65% due 12/01/2023 $ 4,129
NR* VMIG1++ 1,500 North Carolina Educational Facilities Finance Agency Revenue
Bonds (Bowman Grey School of Medicine Project), VRDN,
4.20% due 9/01/2020 (a) 1,500
Raleigh--Durham, North Carolina, Airport Authority, Special
Facility Revenue Refunding Bonds (American Airlines), VRDN (a):
A1+ NR* 500 Series A, 4.10% due 11/01/2015 500
A1+ NR* 100 Series B, 4.10% due 11/01/2015 100
<PAGE>
Ohio--2.0% AA- Aa3 10,000 Ohio State Air Quality Development Authority, Revenue
Refunding Bonds (Dayton Power and Light Project),
Series B, 6.40% due 8/15/2027 10,224
AA Aa 2,500 Ohio State, Infrastructure Improvement Bonds, 6.65%
due 8/01/2004 2,799
Oregon--0.1% A1+ VMIG1++ 800 Port Saint Helens, Oregon, PCR (Portland General Electric
Company Project), VRDN, Series B, 4.10% due 6/01/2010 (a) 800
South A A1 12,000 Fairfield County, South Carolina, PCR (South Carolina
Carolina--7.6% Electric and Gas Company), 6.50% due 9/01/2014 12,701
A- A1 8,000 Richland County, South Carolina, Solid Waste Disposal
Facilities Revenue Bonds (Union Camp Corporation Project),
AMT, Series A, 6.75% due 5/01/2022 8,312
BBB Baa1 5,000 South Carolina Jobs, EDA, Economic Development Revenue
Bonds (Saint Francis Hospital--Franciscan Sisters),
7% due 7/01/2015 5,206
South Carolina State, Public Service Authority Revenue
Bonds (Santee Cooper), Series D (i):
AAA Aaa 6,590 6.50% due 7/01/2002 (b) 7,287
AAA Aaa 9,500 6.625% due 7/01/2002 10,574
NR* NR* 3,800 Spartanburg County, South Carolina, Solid Waste Disposal
Facilities Revenue Bonds (BMW Project), AMT, 7.55% due
11/01/2024 4,091
South AAA Aa1 5,500 South Dakota, HDA, Homeownership Mortgage, Refunding,
Dakota--0.9% Series A, 6.45% due 5/01/2022 5,555
Tennessee BBB Baa1 2,500 McMinn County, Tennessee, IDB, Solid Waste Revenue
- --0.4% Bonds (Recycling Facility--Calhoun Newsprint--Bowater),
AMT, 7.40% due 12/01/2022 2,675
Texas--8.4% BB+ Baa2 5,000 Alliance Airport Authority Incorporated, Texas, Special
Facilities Revenue Bonds (AMR/American Airlines Incorporated
Project), AMT, 7.50% due 12/01/2029 5,311
NR* Aaa 1,000 Bell County, Texas, Health Facilities Development Corporation
Revenue Bonds (Lutheran General Health Care System--
Parkside Medical Services Corporation), 6.50% due 7/01/2019 (g) 1,041
Brazos River Authority, Texas, PCR, Refunding (Texas Utilities
Electric Company), VRDN, AMT (a):
A-1 VMIG1++ 1,400 Series 96-A, 4.25% due 3/01/2026 (b) 1,400
A1+ VMIG1++ 3,100 Series C, 4.25% due 6/01/2030 3,100
BBB Baa1 1,840 Gulf Coast Waste Disposal Authority, Texas, Revenue Bonds
(Champion International Corporation), AMT, 7.45% due 5/01/2026 1,973
AA Aa 2,500 Harris County, Texas, GO, UT, 7% due 10/01/2001 2,772
Harris County, Texas, Health Facilities Development
Corporation, Hospital Revenue Bonds:
A- A 5,000 (Memorial Hospital System Project), Series A, 6.60%
due 6/01/2014 5,058
A1+ NR* 3,400 (Methodist Hospital), VRDN, 4.20% due 12/01/2025 (a) 3,400
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in Thousands)
<CAPTION>
S&P Moody's Face Value
State Ratings Ratings Amount Issue (Note 1a)
<S> <S> <S> <C> <S> <C>
Texas A1+ VMIG1++ $ 1,400 Harris County, Texas, Health Facilities Development
(concluded) Corporation, Special Facilities Revenue Bonds (Texas
Medical Center Project), VRDN, 4.20% due 2/15/2022 (a)(c) $ 1,400
AA Aa 5,000 Harris County, Texas, Toll Road Revenue Refunding
Bonds, Sub-Lien, UT, 6.75% due 8/01/2014 5,366
A+ Aa 7,165 Texas Housing Agency, Residential Development Mortgage
Revenue Bonds, Series A, 7.50% due 7/01/2015 (h) 7,566
AAA Aaa 16,815 Texas State Turnpike Authority, Dallas North Thruway
Revenue Bonds (President George Bush Turnpike), 5% due
1/01/2025 (e) 14,712
Utah--2.5% AA Aa 15,000 Salt Lake City, Utah, Hospital Revenue Refunding Bonds
(IHC Hospitals Inc.), 6.30% due 2/15/2015 15,302
NR* P1 400 Salt Lake County, Utah, PCR, Refunding (Service Station
Holdings Project), VRDN, 4.10% due 2/01/2008 (a) 400
Vermont--0.4% AAA Aaa 2,500 Vermont State Student Assistance Corporation Revenue Bonds
(Education Loan Financing Program), AMT, Series B, 6.70%
due 12/15/2012 (d) 2,566
Virginia--8.5% AA Aa 10,500 Chesapeake, Virginia, Water and Sewer, UT, Series A,
5.375% due 12/01/2020 9,789
Norfolk, Virginia, GO, UT, Series 1996:
AA Aa 3,000 5.25% due 6/01/2015 2,821
AA Aa 3,000 5.25% due 6/01/2016 2,809
Virginia State HDA, Commonwealth Mortgage:
AA+ Aa1 22,000 Series A, 7.15% due 1/01/2033 23,053
AA+ Aa1 5,000 Series B, Sub-Series B-1, 6.875% due 7/01/2011 5,248
AA Aa 10,000 Virginia State, Transportation Board, Transportation Contract
Revenue Refunding Bonds (Route 28 Project), 6.50%
due 4/01/2018 10,387
Washington AA Aaa 6,250 Lewis County, Washington, Public Utility District No. 001
- --1.1% Revenue Bonds (Cowlitz Falls Hydroelectric Project),
7% due 10/01/2001 (i) 7,028
West A P1 5,000 Braxton County, West Virginia, Solid Waste Disposal
Virginia--1.7% Revenue Bonds (Weyerhaeuser Company Project), AMT,
6.50% due 4/01/2025 5,107
BBB+ A3 5,600 Putnam County, West Virginia, PCR, Refunding (Appalachian
Power Company Project), Series C, 6.60% due 7/01/2019 5,723
<PAGE>
Wisconsin A A1 3,800 Wisconsin Housing and EDA, Housing Revenue Bonds, AMT,
- --0.8% Series D, 7.20% due 11/01/2013 3,986
NR* A 1,100 Wisconsin State Health and Educational Facilities
Authority Revenue Bonds (Mercy Hospital of Janesville
Incorporated), 6.60% due 8/15/2022 1,122
Total Investments (Cost--$606,696)--98.3% 624,362
Other Assets Less Liabilities--1.7% 11,062
--------
Net Assets--100.0% $635,424
========
<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)AMBAC Insured.
(c)MBIA Insured.
(d)FSA Insured.
(e)FGIC Insured.
(f)FHA Insured.
(g)Escrowed to Maturity.
(h)GNMA Collateralized.
(i)Prerefunded.
(j)FNMA Collateralized.
++Highest short-term rating by Moody's Investors Service, Inc.
*Not Rated.
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--$606,695,643) (Note 1a) $624,362,411
Cash 102,276
Receivables:
Interest $ 11,811,499
Securities sold 92,250 11,903,749
------------
Deferred organization expenses (Note 1e) 12,478
Prepaid expenses and other assets 19,106
------------
Total assets 636,400,020
------------
<PAGE>
Liabilities: Payables:
Dividends to shareholders (Note 1f) 624,094
Investment adviser (Note 2) 278,935 903,029
------------
Accrued expenses and other liabilities 72,502
------------
Total liabilities 975,531
------------
Net Assets: Net assets $635,424,489
============
Capital: Capital Stock (200,000,000 shares authorized) (Note 4):
Preferred Stock, par value $.10 per share (8,000 shares of AMPS*
issued and outstanding at $25,000 per share
liquidation preference) $200,000,000
Common Stock, par value $.10 per share (30,425,258 shares
issued and outstanding) $ 3,042,526
Paid-in capital in excess of par 423,867,420
Undistributed investment income--net 3,797,895
Accumulated realized capital losses on investments--net (Note 5) (12,871,234)
Accumulated distributions in excess of realized capital
gains--net (78,886)
Unrealized appreciation on investments--net 17,666,768
------------
Total--Equivalent to $14.31 net asset value per share of
Common Stock (market price--$13.125) 435,424,489
------------
Total capital $635,424,489
============
<FN>
*Auction Market Preferred Stock.
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (continued)
<PAGE>
<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 $ 19,231,633
(Note 1d):
Expenses: Investment advisory fees (Note 2) $ 1,615,522
Commission fees (Note 4) 249,230
Transfer agent fees 55,972
Professional fees 42,340
Printing and shareholder reports 28,969
Accounting services (Note 2) 26,936
Custodian fees 19,038
Listing fees 18,747
Directors' fees and expenses 11,545
Pricing fees 7,313
Amortization of organization expenses (Note 1e) 3,732
Other 21,155
------------
Total expenses 2,100,499
------------
Investment income--net 17,131,134
------------
Realized & Realized gain on investments 1,234,206
Unrealized Gain Change in unrealized appreciation on investments--net (9,241,781)
(Loss) on ------------
Investments--Net Net Increase in Net Assets Resulting from Operations $ 9,123,559
(Notes 1b, ============
1d & 3):
</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 $ 17,131,134 $ 35,119,813
Realized gain (loss) on investments--net 1,234,206 (14,104,541)
Change in unrealized appreciation/depreciation on investments--net (9,241,781) 57,751,325
------------ ------------
Net increase in net assets resulting from operations 9,123,559 78,766,597
------------ ------------
<PAGE>
Dividends & Investment income--net:
Distributions to Common Stock (13,804,001) (27,222,513)
Shareholders Preferred Stock (3,613,320) (7,552,050)
(Note 1f): Realized gain on investments--net:
Common Stock -- (501,333)
Preferred Stock -- (80,648)
In excess of realized gain--net:
Common Stock -- (67,954)
Preferred Stock -- (10,932)
------------ ------------
Net decrease in net assets resulting from dividends and
distributions to shareholders (17,417,321) (35,435,430)
------------ ------------
Net Assets: Total increase (decrease) in net assets (8,293,762) 43,331,167
Beginning of period 643,718,251 600,387,084
------------ ------------
End of period* $635,424,489 $643,718,251
============ ============
<FN>
*Undistributed investment income--net $ 3,797,895 $ 4,084,082
============ ============
</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 $ 14.58 $ 13.16 $ 15.95 $ 13.38 $ 14.18
Operating -------- -------- -------- -------- --------
Performance: Investment income--net .56 1.15 1.16 1.18 .32
Realized and unrealized gain (loss) on
investments--net (.26) 1.43 (2.57) 2.58 (.75)
-------- -------- -------- -------- --------
Total from investment operations .30 2.58 (1.41) 3.76 (.43)
-------- -------- -------- -------- --------
Less dividends and distributions to
Common Stock shareholders:
Investment income--net (.45) (.89) (.96) (.99) (.20)
Realized gain on investments--net -- (.02) (.22) -- --
In excess of realized gain--net -- (.00)+++++ -- -- --
-------- -------- -------- -------- --------
Total dividends and distributions to
Common Stock shareholders (.45) (.91) (1.18) (.99) (.20)
-------- -------- -------- -------- --------
Capital charge resulting from issuance
of Common Stock -- -- -- -- (.01)
-------- -------- -------- -------- --------
Effect of Preferred Stock activity:++++
Dividends and distributions to Preferred
Stock shareholders:
Investment income--net (.12) (.25) (.16) (.20) (.03)
Realized gain on investments--net -- (.00)+++++ (.04) -- --
In excess of realized gains--net -- (.00)+++++ -- -- --
Capital charge resulting from issuance
of Preferred Stock -- -- -- -- (.13)
-------- -------- -------- -------- --------
Total effect of Preferred Stock activity (.12) (.25) (.20) (.20) (.16)
-------- -------- -------- -------- --------
Net asset value, end of period $ 14.31 $ 14.58 $ 13.16 $ 15.95 $ 13.38
======== ======== ======== ======== ========
Market price per share, end of period $ 13.125 $ 12.625 $ 11.00 $ 15.25 $ 13.625
======== ======== ======== ======== ========
<PAGE>
Total Investment Based on market price per share 7.55%+++ 23.63% (21.32%) 19.68% (7.83%)+++
Return:** ======== ======== ======== ======== ========
Based on net asset value per share 1.54%+++ 19.34% (10.00%) 27.46% (4.25%)+++
======== ======== ======== ======== ========
Ratios to Average Expenses, net of reimbursement .65%* .66% .66% .60% .14%*
Net Assets:*** ======== ======== ======== ======== ========
Expenses .65%* .66% .66% .61% .59%*
======== ======== ======== ======== ========
Investment income--net 5.29%* 5.65% 5.50% 5.52% 5.71%*
======== ======== ======== ======== ========
Supplemental Net assets, net of Preferred Stock,
Data: end of period (in thousands) $435,424 $443,718 $400,387 $485,376 $403,538
======== ======== ======== ======== ========
Preferred Stock outstanding, end of
period (in thousands) $200,000 $200,000 $200,000 $200,000 $200,000
======== ======== ======== ======== ========
Portfolio turnover 35.27% 57.56% 42.31% 66.14% 10.12%
======== ======== ======== ======== ========
Leverage: Asset coverage per $1,000 $ 3,177 $ 3,219 $ 3,002 $ 3,427 $ 3,018
======== ======== ======== ======== ========
Dividends Per Series A--Investment income--net $ 489 $ 961 $ 571 $ 713 $ 94
Share on ======== ======== ======== ======== ========
Preferred Stock Series B--Investment income--net $ 456 $ 917 $ 627 $ 685 $ 97
Outstanding:++++++ ======== ======== ======== ======== ========
Series C--Investment income--net $ 418 $ 977 $ 577 $ 747 $ 100
======== ======== ======== ======== ========
Series D--Investment income--net $ 443 $ 921 $ 698 $ 832 $ 103
======== ======== ======== ======== ========
<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 that occurred on December 1, 1994.
+++Aggregate total investment return.
+++++Amount is less than $.01 per share.
See Notes to Financial Statements.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
MuniYield Quality Fund, 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 MQY.
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.
<PAGE>
* 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 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.
NOTES TO FINANCIAL STATEMENTS (concluded)
(e) Deferred organization expenses--Deferred organization expenses
are amortized on a straight-line basis over a five-year period.
<PAGE>
(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. Distributions in excess of
realized capital gains are due primarily to differing tax treatments
for futures transactions and post-October losses.
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 six months ended April 30, 1996 were $222,198,199 and
$241,568,160, respectively.
Net realized and unrealized gains as of April 30, 1996 were as
follows:
Realized Unrealized
Gains Gains
Long-term investments $ 648,176 $17,666,768
Short-term investments 6,911 --
Financial futures contracts 579,119 --
---------- -----------
Total $1,234,206 $17,666,768
========== ===========
As of April 30, 1996, net unrealized appreciation for Federal income
tax purposes aggregated $17,666,768, of which $23,277,676 related to
appreciated securities and $5,610,908 related to depreciated
securities. The aggregate cost of investments at April 30, 1996 for
Federal income tax purposes was $606,695,643.
<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, 1996, shares issued and
outstanding remained constant at 30,425,258. At April 30, 1996,
total paid-in capital amounted to $426,909,946.
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 yields in effect at April 30, 1996 were as
follows: Series A, 3.73%; Series B, 3.70%; Series C, 3.55%; and
Series D, 3.538%.
As of April 30, 1996, there were 8,000 AMPS shares authorized,
issued and outstanding with a liquidation preference of $25,000 per
share.
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 $123,318 as
commissions.
5. Capital Loss Carryforward:
At October 31, 1995, the Fund had a net capital loss carryforward of
approximately $7,048,000, all of which 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
$0.073305 per share, payable on May 30, 1996 to shareholders of
record as of May 21, 1996.
<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
Vincent R. Giordano, Senior Vice President
Donald C. Burke, Vice President
Hugh T. Hurley III, 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
MQY
