MUNIYIELD
NEW JERSEY
INSURED
FUND, INC.
FUND LOGO
Semi-Annual Report
April 30, 1999
This report, including the financial information herein, is
transmitted to the shareholders of MuniYield New Jersey Insured
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.
MuniYield New Jersey
Insured Fund, Inc.
Box 9011
Princeton, NJ
08543-9011
Printed on post-consumer recycled paper
MuniYield New Jersey Insured Fund, Inc.
TO OUR SHAREHOLDERS
For the six months ended April 30, 1999, the Common Stock of
MuniYield New Jersey Insured Fund, Inc. earned $0.438 per share
income dividends, which included earned and unpaid dividends of
$0.069. This represents a net annualized yield of 5.69%, based on a
month-end per share net asset value of $15.51. Over the same period,
the total investment return on the Fund's Common Stock was +1.33%,
based on a change in per share net asset value from $15.96 to
$15.51, and assuming reinvestment of $0.484 per share ordinary
income dividends and $0.186 per share capital gains distributions.
For the six-month period ended April 30, 1999, the Fund's Auction
Market Preferred Stock had an average yield of 3.25%.
The Municipal Market Environment
During the six months ended April 30, 1999, long-term bond yields
generally moved higher. From November 1998 through mid-January 1999,
long-term bond yields traded in a relatively narrow range. How-ever,
during February, a number of economic indicators were released that
suggested that economic growth in the United States would likely
remain strong throughout most of 1999. Consequently, long-term US
Treasury bond yields rose more than 60 basis points (0.60%) to 5.70%
by early March. During the remainder of the six-month period, US
Treasury bond yields traded between 5.50% and 5.70% as the lack of
inflationary pressures offset much of the concerns generated by
continued strong economic growth. During most of the period, long-
term, uninsured tax-exempt bond yields exhibited far less volatility
and were largely stable. Also, long-term municipal bond yields rose
just 5 basis points to 5.29% at the end of April 1999, as measured
by the Bond Buyer Revenue Bond Index.
In recent months, the tax-exempt market was better able to withstand
much of the upward pressure on bond yields because of its stronger
technical position. While the continued positive inflationary
environment limited some of the recent increases in taxable bond
yields, a deteriorating supply/demand position helped push taxable
bond yields significantly higher than municipal bond yields. Much of
the US Treasury bond market's underperformance in recent months can
be attributed to the large amounts of taxable corporate issuance.
Large taxable corporate underwritings reduced the demand for US
Government securities in recent months, pushing US Treasury bond
yields higher.
On the other hand, the tax-exempt bond market enjoyed only limited
new-issue supply. During the six months ended April 30, 1999, more
than $123 billion in new long-term tax-exempt securities was
underwritten, a decline of 10% compared to the same period a year
ago. Municipalities issued less than $60 billion in long-term tax-
exempt securities during the three months ended April 30, 1999, a
decline of 25% compared to the April 30, 1998 quarter. More
recently, the rate of new tax-exempt issuance has declined even
further. During April 1999, just over $15 billion in long-term tax-
exempt securities was marketed, a decline of over 33% compared to
April 1998 levels. As municipal bond yields fell and stabilized in
recent quarters, the ability of municipalities to refinance existing
higher-couponed debt declined. This led to a significant decrease in
refunding issuance and an overall drop in new municipal bond supply.
When coupled with ongoing, moderate retail and institutional demand,
the tax-exempt bond market was able to avoid much of the yield
volatility exhibited by US Treasury securities.
Looking ahead, the expected combination of moderate economic growth
in the United States and continued negligible inflation suggests a
relatively stable interest rate environment. However, in recent
years, bond yields reached their annual peaks in early May and
declined for the remainder of the year. A meaningful decline in
fixed-income bond yields would require either evidence of a
significant slowdown in the US economy or the resumption of concerns
regarding renewed shocks to the world's economic system. Currently,
neither condition exists or seems likely in the immediate future. In
our opinion, this suggests a continuation of the narrow trading
ranges seen in recent months.
MuniYield New Jersey Insured Fund, Inc.
April 30, 1999
Portfolio Strategy
During the six-month period ended April 30, 1999, relative stability
within the municipal market enabled the Fund to weather the
volatility that characterized other fixed-income markets. Our
aggressive investment strategy last fall was designed to capitalize
on further declines in long-term interest rates. We changed our
strategy when these declines failed to materialize, and investors
began to expect that bond prices were unlikely to soon revisit the
highs of last fall. Reduced volume, in conjunction with vigorous
investor demand, suggested a continuation of the relative
outperformance experienced by the tax-exempt market. Given this
likely environment, we shifted our emphasis to seek to generate
income for the Fund. Portfolio activity generally reflected this
shift as recent acquisitions exhibited qualities that provided the
Fund with performance characteristics commensurate with our
expectations.
In our last report to shareholders, we described how the technical
constraints within the New Jersey municipal market had hampered our
ability to execute portfolio strategy in a timely manner. With
national and state new-issue volume continuing to decline from year-
ago levels, the environment has become even more difficult. Barring
a major reversal in the supply outlook, it appears likely that
investors will be forced to compete more aggressively for a
shrinking pool of New Jersey tax-exempt bonds. This prospect bodes
well for existing shareholders, since valuations are likely to
remain favorable on a relative basis. However, our ability to
successfully execute investment strategies will remain limited by
the constraints of the current environment.
For much of the six-month period ended April 30, 1999, the Fund
benefited from an ongoing shortage of product in the short-term tax-
exempt market. Tax-exempt money market funds experienced
unprecedented growth in an environment of declining supply as the
improved financial condition of many state and local municipalities
reduced the need for short-term funding. The resulting imbalance
between supply and demand drove short-term tax-exempt interest rates
to historically low levels relative to their taxable counterparts.
Thus, the Fund enjoyed very favorable borrowing costs in comparison
to what might be the case under more normal market conditions. (For
a complete explanation of the benefits and risks of leveraging, see
page 4 of this report to shareholders.)
In Conclusion
We appreciate your ongoing interest in MuniYield New Jersey Insured
Fund, Inc., and we look forward to serving your investment needs in
the months and years to come.
Sincerely,
(Terry K. Glenn)
Terry K. Glenn
President and Director
(Vincent R. Giordano)
Vincent R. Giordano
Senior Vice President
(Theodore R. Jaeckel Jr.)
Theodore R. Jaeckel Jr.
Vice President and Portfolio Manager
June 2, 1999
After more than 20 years of service, Arthur Zeikel recently retired
as Chairman of Merrill Lynch Asset Management, L.P. (MLAM). Mr.
Zeikel served as President of MLAM from 1977 to 1997 and as Chairman
since December 1997. Mr. Zeikel is one of the country's most
respected leaders in asset management and presided over the growth
of Merrill Lynch's asset management business. During his tenure,
client assets under management grew from $300 million to over $500
billion. Mr. Zeikel will remain on MuniYield New Jersey Insured
Fund, Inc.'s Board of Directors. We are pleased to announce that
Terry K. Glenn has been elected President and Director of the Fund.
Mr. Glenn has held the position of Executive Vice President of MLAM
since 1983.
Mr. Zeikel's colleagues at MLAM join the Fund's Board of Directors
in wishing him well in his retirement from Merrill Lynch and are
pleased that he will continue as a member of the Fund's Board of
Directors.
MuniYield New Jersey Insured Fund, Inc.
April 30, 1999
April 30, 1999
PROXY RESULTS
During the six-month period ended April 30, 1999, MuniYield New
Jersey Insured Fund, Inc.'s Common Stock shareholders voted on the
following proposals. Proposals 1 and 2 were approved at a
shareholders' meeting on April 21, 1999. The meeting was adjourned
with respect to Proposal 3. The description of each proposal and
number of shares voted are as follows:
<TABLE>
<CAPTION>
Shares Shares Withheld
Voted For From Voting
<S> <S> <C> <C>
1. To elect the Fund's Directors: Terry K. Glenn 7,892,283 191,422
Edward H. Meyer 7,891,305 192,400
Jack B. Sunderland 7,892,813 190,892
J. Thomas Touchton 7,892,305 191,400
Fred G. Weiss 7,893,813 189,892
Arthur Zeikel 7,887,874 195,831
<CAPTION>
Shares Shares Voted Shares Voted
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. 7,869,237 93,446 121,022
3. To approve an amendment to the Articles Supplementary of the Fund. Adjourned Adjourned Adjourned
</TABLE>
During the six-month period ended April 30, 1999, MuniYield New
Jersey Insured Fund, Inc.'s Preferred Stock shareholders voted on
the following proposals. Proposals 1 and 2 were approved at a
shareholders' meeting on April 21, 1999. The meeting was adjourned
with respect to Proposal 3. The description of each proposal and
number of shares voted are as follows:
<TABLE>
<CAPTION>
Shares Shares Withheld
Voted For From Voting
<S> <C> <C>
1. To elect the Fund's Board of Directors: Terry K. Glenn,
Donald Cecil, M. Colyer Crum, Edward H. Meyer,
Jack B. Sunderland, J. Thomas Touchton, Fred G. Weiss
and Arthur Zeikel. 1,907 176
<CAPTION>
Shares Shares Voted Shares Voted
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. 1,907 176 0
3. To approve an amendment to the Articles Supplementary of the Fund. Adjourned Adjourned Adjourned
</TABLE>
MuniYield New Jersey Insured Fund, Inc.
April 30, 1999
THE BENEFITS AND RISKS OF LEVERAGING
MuniYield New Jersey Insured Fund, Inc. utilizes leveraging to seek
to enhance the yield and net asset value of its Common Stock.
However, these objectives cannot be achieved in all interest rate
environments. To leverage, the Fund issues Preferred Stock, which
pays dividends at prevailing short-term interest rates and invests
the proceeds in long-term municipal bonds. The interest earned on
these investments is paid to Common Stock shareholders in the form
of dividends, and the value of these portfolio holdings is reflected
in the per share net asset value of the Fund's Common Stock.
However, in order to benefit Common Stock shareholders, the yield
curve must be positively sloped; that is, short-term interest rates
must be lower than long-term interest rates. At the same time, a
period of generally declining interest rates will benefit Common
Stock shareholders. If either of these conditions change, then the
risks of leveraging will begin to outweigh the benefits.
To illustrate these concepts, assume a fund's Common Stock
capitalization of $100 million and the issuance of Preferred Stock
for an additional $50 million, creating a total value of $150
million available for investment in long-term municipal bonds. If
prevailing short-term interest rates are approximately 3% and long-
term interest rates are approximately 6%, the yield curve has a
strongly positive slope. The fund pays dividends on the $50 million
of Preferred Stock based on the lower short-term interest rates. At
the same time, the fund's total portfolio of $150 million earns the
income based on long-term interest rates. Of course, increases in
short-term interest rates would reduce (and even eliminate) the
dividends on the Common Stock.
In this case, the dividends paid to Preferred Stock shareholders are
significantly lower than the income earned on the fund's long-term
investments, and therefore the Common Stock shareholders are the
beneficiaries of the incremental yield. However, if short-term
interest rates rise, narrowing the differential between short-term
and long-term interest rates, the incremental yield pickup on the
Common Stock will be reduced or eliminated completely. At the same
time, the market value of the fund's Common Stock (that is, its
price as listed on the New York Stock Exchange) may, as a result,
decline. Furthermore, if long-term interest rates rise, the Common
Stock's net asset value will reflect the full decline in the price
of the portfolio's investments, since the value of the fund's
Preferred Stock does not fluctuate. In addition to the decline in
net asset value, the market value of the fund's Common Stock may
also decline.
As a part of its investment strategy, the Fund may invest in certain
securities whose potential income return is inversely related to
changes in a floating interest rate ("inverse floaters"). In
general, income on inverse floaters will decrease when short-term
interest rates increase and increase when short-term interest rates
decrease. Investments in inverse floaters may be characterized as
derivative securities and may subject the Fund to the risks of
reduced or eliminated interest payments and losses of invested
principal. In addition, inverse floaters have the effect of
providing investment leverage and, as a result, the market value of
such securities will generally be more volatile than that of fixed-
rate, tax-exempt securities. To the extent the Fund invests in
inverse floaters, the market value of the Fund's portfolio and the
net asset value of the Fund's shares may also be more volatile than
if the Fund did not invest in these securities.
MuniYield New Jersey Insured Fund, Inc.
April 30, 1999
PORTFOLIO ABBREVIATIONS
To simplify the listings of MuniYield New Jersey Insured 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.
AMT Alternative Minimum Tax (subject to)
COP Certificates of Participation
EDA Economic Development Authority
GO General Obligation Bonds
M/F Multi-Family
RIB Residual Interest Bonds
RITR Residual Interest Trust Receipts
VRDN Variable Rate Demand Notes
<TABLE>
SCHEDULE OF INVESTMENTS (in Thousands)
<CAPTION>
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
New Jersey--100.7%
<S> <S> <C> <S> <C>
AAA Aaa $6,600 Atlantic City, New Jersey, Board of Education, GO, 6.15% due 12/01/2002 (a)(e) $ 7,268
AAA Aaa 4,875 Cape May County, New Jersey, Industrial Pollution Control Financing Authority Revenue
Bonds (Atlantic City Electric Company Project), AMT, Series A, 7.20% due 11/01/2029 (d) 5,597
AAA Aaa 3,010 Carteret, New Jersey, Board of Education, COP, 6.75% due 10/15/2004 (d)(e) 3,480
AAA Aaa 1,000 Carteret, New Jersey, Board of Education COP, Refunding Bonds, 4.75% due 4/15/2019 (d) 966
East Orange, New Jersey, Board of Education COP (c):
AAA Aaa 1,000 5.22%** due 8/01/2014 474
AAA Aaa 1,045 5.25%** due 2/01/2017 429
AAA Aaa 2,845 5.28%** due 8/01/2024 775
AAA Aaa 1,000 5.30%** due 8/01/2024 280
AAA Aaa 1,845 5.36%** due 8/01/2027 426
AAA Aaa 2,850 5.38%** due 2/01/2028 641
AAA Aaa 1,120 Essex County, New Jersey, Improvement Authority, Parking Facility Revenue Bonds,
6.20% due 7/01/2002 (d)(e) 1,215
AAA Aaa 2,245 Essex County, New Jersey, Improvement Authority Revenue Bonds (Orange School
District), Series B, 6.95% due 7/01/2005 (d)(e) 2,640
AAA Aaa 3,630 Hoboken, Union City, Weehawken, New Jersey, Sewer Authority, Sewer Revenue Refunding
Bonds, 6.20% due 8/01/2019 (d) 3,943
AAA Aaa 7,600 Hudson County, New Jersey, COP, Refunding (Correctional Facilities), 6.60% due
12/01/2021 (d) 8,250
AAA NR* 4,625 Hudson County, New Jersey, Improvement Authority, Facility Lease Revenue Refunding
Bonds, RIB, Series 34, 6.485% due 10/01/2024 (b)(f) 5,021
AAA Aaa 4,750 Jersey City, New Jersey, Sewer Authority, Sewer Revenue Refunding Bonds, 6.25%
due 1/01/2014 (a) 5,529
Metuchen, New Jersey, School District, GO (b):
AAA NR* 1,010 5.15% due 9/15/2020 1,021
AAA NR* 1,065 5.20% due 9/15/2021 1,080
AAA Aaa 1,250 Middlesex County, New Jersey, COP, 4.85% due 6/15/2028 (d) 1,210
NR* NR* 5,750 Middlesex County, New Jersey, Pollution Control Financing Authority, Revenue Refunding
Bonds (Amerada Hess), 6.875% due 12/01/2022 6,210
AAA Aaa 1,735 Middlesex County, New Jersey, Utilities Authority, Sewer Revenue Refunding Bonds,
Series A, 5.25% due 12/01/2011 (b) 1,835
AAA Aaa 1,475 Monmouth County, New Jersey, Improvement Authority Revenue Bonds (Pooled
Governmental Loan), 4.75% due 12/01/2014 (a) 1,470
A1+ P1 1,200 New Jersey EDA, Economic Development Revenue Refunding Bonds (Stolthaven Project),
VRDN, Series A, 4.20% due 1/15/2018 (g) 1,200
</TABLE>
MuniYield New Jersey Insured Fund, Inc.
April 30, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<CAPTION>
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
New Jersey (continued)
<S> <S> <C> <S> <C>
New Jersey EDA, First Mortgage Revenue Refunding Bonds (Fellowship Village),
Series A:
BBB- NR* $1,700 5.50% due 1/01/2018 $1,678
BBB- NR* 2,000 5.50% due 1/01/2025 1,936
A1+ VMIG1++ 200 New Jersey EDA, Natural Gas Facilities Revenue Bonds (NUI Corporation Project), VRDN,
AMT, Series A, 4% due 6/01/2026 (a)(g) 200
AAA Aaa 4,500 New Jersey EDA, Natural Gas Facilities Revenue Refunding Bonds (NUI Corporation),
Series A, 6.35% due 10/01/2022 (a) 5,022
AAA Aaa 2,305 New Jersey EDA, Revenue Bonds (Educational Testing Service), Series B, 6.125% due
5/15/2005 (d)(e) 2,603
New Jersey EDA, Revenue Bonds (Saint Barnabas Project), Series A (d):
NR* Aaa 5,195 5.60%** due 7/01/2020 1,752
NR* Aaa 6,665 5.60%** due 7/01/2021 2,124
NR* Aaa 7,445 5.17%** due 7/01/2024 2,018
New Jersey EDA, Revenue Refunding Bonds:
AAA Aaa 2,000 (Educational Testing Service), Series A, 4.75% due 5/15/2018 (d) 1,937
NR* Aaa 3,800 (Hillcrest Health Service), 5.07%** due 1/01/2018 (a) 1,468
AAA Aaa 2,835 (RWJ Health Care Corporation), 6.50% due 7/01/2024 (c) 3,165
AAA Aaa 1,150 New Jersey EDA, State Contract Revenue Bonds (Economic Recovery), Series A, 6% due
3/15/2021 (c) 1,241
New Jersey EDA, Water Facilities Revenue Bonds (b):
AAA Aaa 2,000 (American Water Company Inc.), Series B, 5.375% due 5/01/2032 2,044
AAA Aaa 2,500 RITR, AMT, Series 34, 6.27% due 5/01/2032 (f) 2,615
A1+ VMIG1++ 2,300 New Jersey EDA, Water Facilities Revenue Refunding Bonds (United Water New Jersey Inc.
Project), VRDN, Series A, 4.05% due 11/01/2026 (a)(g) 2,300
New Jersey Health Care Facilities Financing Authority, Revenue Refunding Bonds:
BBB Baa2 1,200 (Englewood Hospital and Medical Center), 6.70% due 7/01/2015 1,300
BBB+ NR* 3,500 (Holy Name Hospital), 6% due 7/01/2025 3,625
AAA Aaa 5,445 (Mercer Medical Center), 6.50% due 7/01/2021 (d) 5,829
AAA Aaa 2,710 (Saint Barnabas Hospital), Series B, 5.09%** due 7/01/2019 (d) 974
AAA Aaa 1,110 (Saint Barnabas Hospital), Series B, 5.10%** due 7/01/2020 (d) 378
BBB Baa2 4,000 (Saint Elizabeth Hospital Obligation Group), 6% due 7/01/2027 4,135
AAA Aaa 3,700 (Virtua Health Issue), 4.50% due 7/01/2028 (c) 3,354
New Jersey Sports and Exposition Authority, Convention Center, Luxury Tax Revenue Bonds,
Series A (d)(e):
AAA Aaa 8,630 6.25% due 7/01/2002 9,452
AAA Aaa 2,000 6.60% due 7/01/2002 2,211
New Jersey Sports and Exposition Authority, Convention Center, Luxury Tax Revenue
Refunding Bonds (d):
AAA Aaa 3,195 5% due 9/01/2015 3,233
AAA Aaa 4,000 5% due 9/01/2019 3,985
AA+ Aaa 1,990 New Jersey State Educational Facilities Authority Revenue Bonds (Institute of Advanced
Study), Series G, 5% due 7/01/2018 1,993
AAA Aaa 2,465 New Jersey State Educational Facilities Authority, Revenue Refunding Bonds (Seton Hall
University Project), 5.25% due 7/01/2014 (a) 2,560
NR* Aaa 5,000 New Jersey State Higher Education Assistance Authority, Student Loan Revenue Bonds,
RIB, Series 18, 6.235% due 6/01/2017 (a)(f) 5,100
</TABLE>
MuniYield New Jersey Insured Fund, Inc.
April 30, 1999
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in Thousands)
<CAPTION>
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
New Jersey (concluded)
<S> <S> <C> <S> <C>
AAA Aaa $4,750 New Jersey State Housing and Mortgage Finance Agency, M/F Housing Revenue Refunding
Bonds, Series A, 6.05% due 11/01/2020 (a) $ 5,037
AAA Aaa 3,520 New Jersey State Housing and Mortgage Finance Agency Revenue Bonds (Home Buyer),
AMT, Series M, 7% due 10/01/2026 (d) 3,831
AAA Aaa 1,300 New Jersey State Housing and Mortgage Finance Agency, Revenue Refunding Bonds
(Home Buyer), AMT, Series X, 5.35% due 4/01/2029 (d) 1,313
AAA Aaa 5,350 New Jersey State Transit Corporation, COP, 6.50% due 10/01/2016 (c) 6,098
AAA Aaa 1,000 New Jersey State Transportation Trust Fund Authority, Revenue Refunding Bonds
(Transportation System), Series A, 5% due 6/15/2015 (d) 1,011
Ocean County, New Jersey, Utilities Authority, Wastewater Revenue Refunding Bonds, GO:
NR* Aa2 500 5% due 1/01/2013 493
NR* Aa2 1,340 5% due 1/01/2018 1,279
Port Authority of New York and New Jersey, Consolidated Revenue Bonds:
AA- A1 1,000 93rd Series, 6.125% due 6/01/2094 1,144
AAA Aaa 4,000 AMT, 97th Series, 6.65% due 1/15/2023 (b) 4,459
AAA Aaa 3,500 Port Authority of New York and New Jersey, Consolidated Revenue Refunding Bonds, AMT,
96th Series, 6.60% due 10/01/2023 (b) 3,902
NR* Aaa 4,000 Port Authority of New York and New Jersey, RITR, AMT, 108th Series, 7.235% due
1/15/2017 (c)(f) 4,597
Port Authority of New York and New Jersey, Special Obligation Revenue Refunding Bonds
(Versatile Structure Obligation), VRDN (g):
A1+ VMIG1++ 700 AMT, Series 1R, 4.25% due 8/01/2028 700
A1+ VMIG1++ 400 Series 2, 4.20% due 5/01/2019 400
A1+ VMIG1++ 600 Series 3, 4.20% due 6/01/2020 600
A1+ VMIG1++ 4,700 Series 5, 4.20% due 8/01/2024 4,700
AAA Aaa 1,180 South Brunswick Township, New Jersey, Board of Education, GO, 6.40% due
8/01/2005 (b)(e) 1,336
NR* Aaa 3,440 Union County, New Jersey, Utilities Authority, RITR, Series 38, 6.27% due
6/01/2020 (a)(f) 3,664
West Windsor-Plainsboro, New Jersey, Regional School District, GO,
Refunding (b):
AAA Aaa 2,500 4.75% due 9/15/2020 2,415
AAA Aaa 2,500 4.75% due 9/15/2021 2,408
Puerto Rico--1.3%
AAA Aaa 2,500 Puerto Rico Electric Power Authority, Power Revenue Refunding Bonds, Series EE,
4.50% due 7/01/2002 (d) 2,359
Total Investments (Cost--$181,650)--102.0% 192,938
Liabilities in Excess of Other Assets--(2.0%) (3,763)
--------
Net Assets--100.0% $189,175
========
<FN>
(a)AMBAC Insured.
(b)FGIC Insured.
(c)FSA Insured.
(d)MBIA Insured.
(e)Prerefunded.
(f)The interest rate is subject to change periodically and inversely
based upon prevailing market rates. The interest rate shown is the
rate in effect at April 30, 1999.
(g)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, 1999.
*Not Rated.
**Represents a zero coupon or step bond; the interest rate shown
reflects the effective yield at the time of purchase by the Fund.
++Highest short-term rating by Moody's Investors Service, Inc.
See Notes to Financial Statements.
</TABLE>
MuniYield New Jersey Insured Fund, Inc.
April 30, 1999
FINANCIAL INFORMATION
<TABLE>
Statement of Assets, Liabilities and Capital as of April 30, 1999
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$181,649,507) (Note 1a) $192,937,949
Cash 86,132
Interest receivable 3,138,717
Prepaid expenses and other assets 7,523
------------
Total assets 196,170,321
------------
Liabilities: Payables:
Securities purchased $ 6,668,158
Dividends payable to shareholders (Note 1e) 218,179
Investment adviser (Note 2) 83,189 6,969,526
------------
Accrued expenses and other liabilities 25,924
------------
Total liabilities 6,995,450
------------
Net Assets: Net assets $189,174,871
============
Capital: Capital Stock (200,000,000 shares authorized) (Note 4):
Preferred Stock, par value $.05 per share (2,240 shares of
AMPS* issued and outstanding at $25,000 per share
liquidation preference) $ 56,000,000
Common Stock, par value $.10 per share (8,586,560 shares
issued and outstanding) $ 858,656
Paid-in capital in excess of par 120,317,344
Undistributed investment income--net 1,212,577
Accumulated realized capital losses on investments--net (502,148)
Unrealized appreciation on investments--net 11,288,442
------------
Total--Equivalent to $15.51 net asset value per share of Common
Stock (market price--$15.25) 133,174,871
------------
Total capital $189,174,871
============
<FN>
*Auction Market Preferred Stock.
See Notes to Financial Statements.
</TABLE>
MuniYield New Jersey Insured Fund, Inc.
April 30, 1999
FINANCIAL INFORMATION (continued)
<TABLE>
Statement of Operations
<CAPTION>
For the Six
Months Ended
April 30, 1999
<S> <S> <C> <C>
Investment Income Interest and amortization of premium and discount earned $ 5,295,223
(Note 1d):
Expenses: Investment advisory fees (Note 2) $ 474,459
Commission fees (Note 4) 68,794
Professional fees 31,596
Accounting services (Note 2) 22,079
Transfer agent fees 18,987
Directors' fees and expenses 13,219
Printing and shareholder reports 12,019
Listing fees 8,055
Custodian fees 6,291
Pricing fees 5,295
Other 7,727
------------
Total expenses 668,521
------------
Investment income--net 4,626,702
------------
Realized & Realized gain on investments--net 1,725,898
Unrealized Change in unrealized appreciation on investments--net (3,620,680)
Gain (Loss) on ------------
Investments--Net Net Increase in Net Assets Resulting from Operations $ 2,731,920
(Notes 1b, ============
1d & 3):
See Notes to Financial Statements.
</TABLE>
MuniYield New Jersey Insured Fund, Inc.
April 30, 1999
FINANCIAL INFORMATION (continued)
<TABLE>
Statements of Changes in Net Assets
<CAPTION>
For the Six For the
Months Ended Year Ended
April 30, October 31,
Increase (Decrease) in Net Assets: 1999 1998
<S> <S> <C> <C>
Operations: Investment income--net $ 4,626,702 $ 9,328,952
Realized gain on investments--net 1,725,898 2,419,720
Change in unrealized appreciation on investments--net (3,620,680) 1,783,953
------------ ------------
Net increase in net assets resulting from operations 2,731,920 13,532,625
------------ ------------
Dividends & Investment income--net:
Distributions to Common Stock (3,864,196) (7,378,943)
Shareholders Preferred Stock (713,530) (1,713,847)
(Note 1e): Realized gain on investments--net:
Common Stock (1,849,703) (173,351)
Preferred Stock (192,752) (262,640)
------------ ------------
Net decrease in net assets resulting from dividends and
distributions to shareholders (6,620,181) (9,528,781)
------------ ------------
Capital Stock Value of shares issued to Common Stock shareholders in
Transactions reinvestment of dividends and distributions 1,484,733 1,806,843
(Note 4): ------------ ------------
Net Assets: Total increase (decrease) in net assets (2,403,528) 5,810,687
Beginning of period 191,578,399 185,767,712
------------ ------------
End of period* $189,174,871 $191,578,399
============ ============
<FN>
*Undistributed investment income--net $ 1,212,577 $ 1,163,601
============ ============
See Notes to Financial Statements.
</TABLE>
MuniYield New Jersey Insured Fund, Inc.
April 30, 1999
FINANCIAL INFORMATION (concluded)
<TABLE>
Financial Highlights
<CAPTION>
The following per share data and ratios have been derived For the Six
from information provided in the financial statements. Months Ended
April 30, For the Year Ended October 31,
Increase (Decrease) in Net Asset Value: 1999 1998 1997 1996 1995
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 15.96 $ 15.49 $ 15.10 $ 15.12 $ 13.60
Operating -------- -------- -------- -------- --------
Performance: Investment income--net .53 1.11 1.13 1.12 1.13
Realized and unrealized gain (loss) on
investments--net (.21) .49 .38 (.03) 1.52
-------- -------- -------- -------- --------
Total from investment operations .32 1.60 1.51 1.09 2.65
-------- -------- -------- -------- --------
Less dividends and distributions to Common
Stock shareholders:
Investment income--net (.45) (.88) (.91) (.88) (.87)
Realized gain on investments--net (.22) (.02) -- -- --
-------- -------- -------- -------- --------
Total dividends and distributions to Common
Stock shareholders (.67) (.90) (.91) (.88) (.87)
-------- -------- -------- -------- --------
Effect of Preferred Stock activity:
Dividends and distributions to Preferred
Stock shareholders:
Investment income--net (.08) (.20) (.21) (.23) (.26)
Realized gain on investments--net (.02) (.03) -- -- --
-------- -------- -------- -------- --------
Total effect of Preferred Stock activity (.10) (.23) (.21) (.23) (.26)
-------- -------- -------- -------- --------
Net asset value, end of period $ 15.51 $ 15.96 $ 15.49 $ 15.10 $ 15.12
======== ======== ======== ======== ========
Market price per share, end of period $ 15.25 $ 16.75 $15.8125 $ 14.75 $ 14.125
======== ======== ======== ======== ========
Total Investment Based on market price per share (5.07%)++ 12.13% 13.77% 10.93% 33.88%
Return:** ======== ======== ======== ======== ========
Based on net asset value per share 1.33%++ 9.07% 8.87% 6.09% 18.55%
======== ======== ======== ======== ========
Ratios to Average Expenses .70%* .72% .72% .72% .72%
Net Assets:*** ======== ======== ======== ======== ========
Investment income--net 4.87%* 4.96% 5.12% 5.13% 5.36%
======== ======== ======== ======== ========
Supplemental Net assets, net of Preferred Stock, end
Data: of period (in thousands) $133,175 $135,578 $129,768 $124,948 $124,639
======== ======== ======== ======== ========
Preferred Stock outstanding, end
of period (in thousands) $ 56,000 $ 56,000 $ 56,000 $ 56,000 $ 56,000
======== ======== ======== ======== ========
Portfolio turnover 24.04% 46.23% 26.16% 37.08% 39.36%
======== ======== ======== ======== ========
Leverage: Asset coverage per $1,000 $ 3,378 $ 3,421 $ 3,317 $ 3,231 $ 3,226
======== ======== ======== ======== ========
Dividends Investment income--net $ 319 $ 765 $ 771 $ 860 $ 956
Per 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.
++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
MuniYield New Jersey Insured Fund, Inc.
April 30, 1999
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
MuniYield New Jersey Insured Fund, Inc. (the "Fund") is registered
under the Investment Company Act of 1940 as a non-diversified,
closed-end management investment company. The Fund's financial
statements are prepared in accordance with generally accepted
accounting principles which may require the use of management
accruals and estimates. 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 MJI. The
following is a summary of significant accounting policies followed
by the Fund.
(a) Valuation of investments--Municipal bonds are traded primarily
in the over-the-counter markets and are valued at the most recent
bid price or yield equivalent as obtained by the Fund's pricing
service from dealers that make markets in such securities. Financial
futures contracts and options thereon, which are traded on
exchanges, are valued at their closing prices as of the close of
such exchanges. Options written or purchased are valued at the last
sale price in the case of exchange-traded options. In the case of
options traded in the over-the-counter market, valuation is the last
asked price (options written) or the last bid price (options
purchased). Securities with remaining maturities of sixty days or
less are valued at amortized cost, which approximates market value.
Securities and assets for which market quotations are not readily
available are valued at fair value as determined in good faith by or
under the direction of the Board of Directors of the Fund, including
valuations furnished by a pricing service retained by the Fund,
which may utilize a matrix system for valuations. The procedures of
the pricing service and its valuations are reviewed by the officers
of the Fund under the general supervision of the Board of Directors.
(b) Derivative financial instruments--The Fund may engage in various
portfolio 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
financial futures contracts and options on such futures contracts
for the purpose of hedging the market risk on existing securities or
the intended purchase of securities. Futures contracts are contracts
for delayed delivery of securities at a specific future date and at
a specific price or yield. Upon entering into a contract, the Fund
deposits and maintains as collateral such initial margin as required
by the exchange on which the transaction is effected. Pursuant to
the contract, the Fund agrees to receive from or pay to the broker
an amount of cash equal to the daily fluctuation in value of the
contract. Such receipts or payments are known as variation margin
and are recorded by the Fund as unrealized gains or losses. When the
contract is closed, the Fund records a realized gain or loss equal
to the difference between the value of the contract at the time it
was opened and the value at the time it was closed.
* 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.
MuniYield New Jersey Insured Fund, Inc.
April 30, 1999
(d) Security transactions and investment income--Security
transactions are recorded on the dates the transactions are entered
into (the trade dates). Interest income is recognized on the accrual
basis. Discounts and market premiums are amortized into interest
income. Realized gains and losses on security transactions are
determined on the identified cost basis.
(e) Dividends and distributions--Dividends from net investment
income are declared and paid monthly. Distributions of capital gains
are recorded on the ex-dividend dates.
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, including proceeds from the
issuance of Preferred Stock.
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, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the six months ended April 30, 1999 were $44,908,567 and
$48,096,148, respectively.
Net realized gains for the six months ended April 30, 1999 and net
unrealized gains as of April 30, 1999 were as follows:
Realized Unrealized
Gains Gains
Long-term investments $1,725,898 $11,288,442
---------- -----------
Total $1,725,898 $11,288,442
========== ===========
As of April 30, 1999, net unrealized appreciation for Federal income
tax purposes aggregated $11,288,442, of which $11,580,944 related to
appreciated securities and $292,502 related to depreciated
securities. The aggregate cost of investments at April 30, 1999 for
Federal income tax purposes was $181,649,507.
4. Capital Stock Transactions:
The Fund is authorized to issue 200,000,000 shares of capital stock,
including Preferred Stock, par value $.10 per share, all of which
were initially classified as Common Stock. The Board of Directors is
authorized, however, to reclassify any unissued shares of capital
stock without approval of holders of Common Stock.
Common Stock
Shares issued and outstanding during the six months ended April 30,
1999 and the year ended October 31, 1998, increased by 92,658 and
114,706, respectively, as a result of dividend reinvestment.
Preferred Stock
Auction Market Preferred Stock ("AMPS") are shares of Preferred
Stock of the Fund, with a par value of $.05 per share and a
liquidation preference of $25,000 per share, that entitle their
holders to receive cash dividends at an annual rate that may vary
for the successive dividend periods. The yield in effect at April
30, 1999 was 3.35%.
Shares issued and outstanding during the six months ended April 30,
1999 and the year ended October 31, 1998 remained constant.
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, 1999, Merrill Lynch, Pierce, Fenner & Smith Incorporated,
an affiliate of FAM, earned $33,329 as commissions.
5. Subsequent Event:
On May 6, 1999, the Fund's Board of Directors declared an ordinary
income dividend to Common Stock shareholders in the amount of
$.068540 per share, payable on May 27, 1999 to shareholders of
record as of May 21, 1999.
MuniYield New Jersey Insured Fund, Inc.
April 30, 1999
MANAGED DIVIDEND POLICY
The Fund's dividend policy is to distribute substantially all of its
net investment income to its shareholders on a monthly basis.
However, in order to provide shareholders with a more consistent
yield to the current trading price of shares of Common Stock of the
Fund, the Fund may at times pay out less than the entire amount of
net investment income earned in any particular month and may at
times in any month pay out such accumulated but undistributed income
in addition to net investment income earned in that month. As a
result, the dividends paid by the Fund for any particular month may
be more or less than the amount of net investment income earned by
the Fund during such month. The Fund's current accumulated but
undistributed net investment income, if any, is disclosed in the
Statement of Assets, Liabilities and Capital, which comprises part
of the Financial Information included in this report.
YEAR 2000 ISSUES
Many computer systems were designed using only two digits to
designate years. These systems may not be able to distinguish the
Year 2000 from the Year 1900 (commonly known as the "Year 2000
Problem"). The Fund could be adversely affected if the computer
systems used by the Fund's management or other Fund service
providers do not properly address this problem before January 1,
2000. The Fund's management expects to have addressed this problem
before then, and does not anticipate that the services it provides
will be adversely affected. The Fund's other service providers have
told the Fund's management that they also expect to resolve the Year
2000 Problem, and the Fund's management will continue to monitor the
situation as the Year 2000 approaches. However, if the problem has
not been fully addressed, the Fund could be negatively affected. The
Year 2000 Problem could also have a negative impact on the
securities in which the Fund invests and this could hurt the Fund's
investment returns.
MuniYield New Jersey Insured Fund, Inc.
April 30, 1999
QUALITY PROFILE
The quality ratings of securities in the Fund as of April 30, 1999
were as follows:
Percent of
S&P Rating/Moody's Rating Net Assets
AAA/Aaa 85.1%
AA/Aa 1.6
BBB/Baa 6.7
NR(Not Rated) 3.3
Other++ 5.3
[FN]
++Temporary investments in short-term municipal securities.
OFFICERS AND DIRECTORS
Terry K. Glenn, President and Director
Donald Cecil, Director
M. Colyer Crum, Director
Edward H. Meyer, Director
Jack B. Sunderland, Director
J. Thomas Touchton, Director
Fred G. Weiss, Director
Arthur Zeikel, Director
Vincent R. Giordano, Senior Vice President
Kenneth A. Jacob, Vice President
Theodore R. Jaeckel Jr., Vice President
Donald C. Burke, Vice President and Treasurer
Alice A. Pellegrino, Secretary
Gerald M. Richard, Treasurer of MuniYield New Jersey Insured Fund,
Inc. has recently retired. His colleagues at Merrill Lynch Asset
Management, L.P. join the Fund's Board of Directors in wishing Mr.
Richard well in his retirement.
Custodian
The Bank of New York
90 Washington Street
New York, NY 10286
Transfer Agents
Common Stock:
The Bank of New York
101 Barclay Street
New York, NY 10286
Preferred Stock:
IBJ Whitehall Bank & Trust Company
One State Street
New York, NY 10004
NYSE Symbol
MJI
