MUNIYIELD
PENNSYLVANIA
FUND
FUND LOGO
Semi-Annual Report
April 30, 1995
This report, including the financial information herein, is
transmitted to the shareholders of MuniYield Pennsylvania Fund 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 Shares by issuing Preferred Shares to provide the Common
Shareholders with a potentially higher rate of return. Leverage
creates risks for Common Shareholders, including the likelihood of
greater volatility of net asset value and market price of shares of
the Common Shares, and the risk that fluctuations in the short-term
dividend rates of the Preferred Shares may affect the yield to
Common Shareholders.
MuniYield
Pennsylvania Fund
Box 9011
Princeton, NJ
08543-9011
<PAGE>
MuniYield Pennsylvania Fund
TO OUR SHAREHOLDERS
For the six months ended April 30, 1995, the Common Shares of
MuniYield Pennsylvania Fund earned $0.482 per share income
dividends, which included earned and unpaid dividends of $0.074.
This represents a net annualized yield of 6.63%, based on a month-
end net asset value of $14.65 per share. Over the same period, the
total investment return on the Fund's Common Shares was +9.87%,
based on a change in per share net asset value from $13.86 to
$14.65, and assuming reinvestment of $0.485 per share income
dividends and $0.014 per share capital gains distributions.
The average yield of the Fund's Auction Market Preferred Shares for
the six months ended April 30, 1995 was 3.69%.
The Environment
During the six months ended April 30, 1995, the perception that the
US economy was overheating and inflationary pressures were
increasing gave way to a more benign economic outlook. With more
signs of slowing growth, investors now appear to be forecasting a
"soft landing" for the US economy. Although gross domestic product
was reported to have increased at a revised 5.1% rate during the
final quarter of 1994, declines in other indicators such as new home
sales and durable goods orders registered thus far in 1995 have led
investors to anticipate that the economy is losing enough momentum
to keep inflation under control and preclude further significant
monetary policy tightening by the Federal Reserve Board. A further
indication of a slowing economy was the reported decline in the
Index of Leading Economic Indicators for March.
As US stock and bond markets have risen on more positive economic
news, the value of the US dollar has reached new lows relative to
the yen and the Deutschemark. Persistent trade deficits and exports
of capital from the United States have kept the US currency in a
decade-long decline relative to the Japanese and German currencies.
Over the longer term, since the United States has the highest
productivity among industrialized nations and among the lowest labor
costs, demand for US dollar-denominated assets may improve. However,
a reduction of the still-widening US trade deficit may be necessary
before the US dollar appreciates substantially relative to the yen
and the Deutschemark.
The first months of 1995 have been very positive for the stock and
bond markets. Continued signs of a moderating expansion and well-
contained inflationary pressures would provide further assurance
that the peak in interest rates is behind us. On the other hand,
indications of reaccelerating growth and further significant
monetary policy tightening by the Federal Reserve Board would be a
decided negative for the US financial markets.
<PAGE>
The Municipal Market
During the six-month period ended April 30, 1995, the tax-exempt
bond market gradually recouped much of the losses sustained during
1994. Signs of a weakening domestic economy and ongoing moderate
inflationary pressures have fostered an environment of declining
interest rates. Since October 31, 1994, A-rated, uninsured municipal
revenue bond yields, as measured by the Bond Buyer Revenue Bond
Index, have declined over 65 basis points (0.65%) to close the six-
month period ended April 30, 1995 at 6.29%. Tax-exempt bond yields
initially continued to climb in late 1994, reaching a high of 7.37%
in late November 1994. Municipal bond yields have since declined
over 100 basis points from their recent highs and are presently
lower than they were a year ago. US Treasury bond yields have
experienced similar declines over the last six months to end the
April period at 7.34%.
Much of the recent improvement in the tax-exempt bond market,
however, has occurred over the last three months. During this most
recent quarter, municipal bond yields have fallen approximately 50
basis points, while US Treasury bond yields declined only 35 basis
points. Tax-exempt bond yields declined more than their taxable
counterparts in recent months, largely in response to the
significant decline in new bond issuance in recent quarters. Over
the last six months, less than $60 billion in new long-term
municipal securities were underwritten, a decline of nearly 45%
versus the comparable period a year earlier. Issuance was
particularly low this past January and February, with monthly volume
of less than $8 billion. These levels are the lowest monthly totals
since the mid-1980s.
To compound the municipal market's already strong technical posture,
both institutional and individual investors have seen significant
cash inflows in recent months. These assets were derived from
regular coupon payments, bond maturities and the proceeds from early
bond calls and redemptions. It has been estimated that investors
received over $20 billion in principal redemptions and coupon income
in January 1995 alone. With monthly issuance in the $10 billion
range thus far this year, the current supply/demand imbalance has
dominated the municipal market and bond prices have risen
accordingly. The tax-exempt bond market's technical position is
likely to remain very strong throughout most of 1995. Investors are
expected to receive almost $40 billion in principal and coupon
payments on July 1, 1995. Investor proceeds from all sources have
been estimated to exceed $200 billion for all of 1995. Estimates of
total new bond issuance for 1995 have continued to be lowered with
most estimates now in the $125 billion range. Investors should find
it increasingly difficult to replace existing holdings as they
mature and to reinvest coupon income in such an environment.
<PAGE>
The municipal bond market's outperformance thus far this year caused
the tax-exempt market to become temporarily expensive relative to
its taxable counterpart in late April. Investor concerns regarding
the international currency situation and the future impact of
proposed revisions to US tax-ation policies upon the tax advantage
inherent to municipal bonds have combined to cause tax-exempt bond
yields to increase marginally in recent weeks. Municipal bond yields
have risen approximately 15 basis points from their lows in mid-
April 1995. Long-term US Treasury bond yields have remained
essentially stable.
Such an underperformance by the tax-exempt bond market is likely to
be limited in duration. The recent increase in tax-exempt bond
yields has already begun to attract institutional investors since
some municipal bonds yielding in excess of 85% of US Treasury bond
yields are again available. Also, concerns regarding the implication
for municipal bonds' tax advantage resulting from various proposed
tax law changes (for example, flat-tax, value-added tax or national
sales tax) are all likely to quickly recede as investors realize
that such, if any, changes are unlikely to be enacted before late
1996 at the earliest. Long-term investors will also recall 1986 when
similar tax proposals were made and tax-exempt bond yields initially
rose and then quickly fell. Investors are likely to view the current
situation as an opportunity to purchase very attractively priced tax-
advantaged products. This should cause municipal bond yields to
quickly return to their more historic relationship.
Portfolio Strategy
MuniYield Pennsylvania Fund began the six-month period ended April
30, 1995 defensively postured in response to the extreme volatility
that plagued the fixed-income markets during most of 1994. However,
since early 1995, we have become more positive on the markets'
prospects for several reasons. First, we saw signs of an apparent
economic slowdown in the United States just as inflationary
pressures were reaching critical levels, thus reducing concern among
fixed-income investors. At the same time, municipal issuance
continued to plunge, which aggravated an already troublesome
situation and propelled municipal bonds to significantly outperform
Treasury securities during the April period. In fact, for the six
months ended April 30, 1995, Pennsylvania tax-exempt issuance
declined by about 40% compared to the same period in 1994.
Initially, we reacted to the changing environment by reducing cash
reserves from approximately 10% of net assets in November 1994 to
nearly zero by early 1995, and then maintaining a fully invested
posture for the balance of the April period. We also restructured
the portfolio to give the Fund a more aggressive stance in the
marketplace. Therefore, we selectively sold par bonds with limited
room for price appreciation and replaced them with discount coupon
bonds. As credit quality is always a priority, approximately 85% of
the Fund's portfolio holdings were rated A or better by at least one
of the major rating agencies.
<PAGE>
In Conclusion
We appreciate your ongoing interest in MuniYield Pennsylvania Fund,
and we look forward to assisting you with your financial needs in
the months and years ahead.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Vincent R. Giordano)
Vincent R. Giordano
Vice President and Portfolio Manager
May 26, 1995
THE BENEFITS AND RISKS OF LEVERAGING
MuniYield Pennsylvania Fund utilizes leveraging to seek to enhance
the yield and net asset value of its Common Shares. However, these
objectives cannot be achieved in all interest rate environments. To
leverage, the Fund issues Preferred Shares, which pay 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 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 Shares. However, in order to
benefit Common 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 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 Share
capitalization of $100 million and the issuance of Preferred Shares
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 Shares 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 Shares.
In this case, the dividends paid to Preferred Shareholders are
significantly lower than the income earned on the fund's long-term
investments, and therefore the Common 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 Shares will be reduced or eliminated completely. At the same
time, the market value of the fund's Common Shares (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
Shares' net asset value will reflect the full decline in the price
of the portfolio's investments, since the value of the fund's
Preferred Shares do not fluctuate. In addition to the decline in net
asset value, the market value of the fund's Common Shares may also
decline.
PORTFOLIO ABBREVIATIONS
To simplify the listings of MuniYield Pennsylvania Fund's portfolio
holdings in the Schedule of Investments, we have abbreviated the
names of many of the securities according to the list at right.
AMT Alternative Minimum Tax (subject to)
GO General Obligation Bonds
HFA Housing Finance Agency
IDA Industrial Development Agency
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
Ratings Ratings Amount Issue (Note 1a)
Pennsylvania--97.5%
<S> <S> <C> <S> <C>
AAA Aaa $1,000 Allegheny County, Pennsylvania, Hospital Development Authority, Health Center
Revenue Bonds (Presbyterian University Hospital), Series A, 6.25% due
11/01/2023 (c) $ 1,002
NR* A 3,000 Allegheny County, Pennsylvania, Hospital Development Authority Revenue Bonds
(South Hills Health System), Series A, 6.50% 5/01/2014 2,984
NR* A1 500 Allegheny County, Pennsylvania, IDA, Revenue Refunding Bonds (Commercial
Development Parkway Center Project), VRDN, Series A, 4.95% due 5/01/2009 (a) 500
AAA Aaa 5,000 Beaver County, Pennsylvania, Hospital Authority, Revenue Refunding Bonds
(Medical Center Beaver County, Inc.), 6.625% due 7/01/2010 (b) 5,263
AAA Aaa 3,000 Bethlehem, Pennsylvania, Water Authority, Revenue Refunding Bonds,
6.25% due 11/15/2001 (c)(e) 3,195
AAA Aaa 2,750 Bucks County, Pennsylvania, Water and Sewer Authority Revenue Bonds
(Water System), Series B, 6.50% due 12/01/2002 (d)(e) 2,988
NR* P1 1,300 Delaware County, Pennsylvania, IDA, PCR, VRDN, 4.85% due 10/01/2019 (a) 1,300
A1 P1 1,000 Delaware County, Pennsylvania, IDA, Solid Waste Revenue Bonds (Scott Paper
Company), VRDN, Series C, 4.80% due 12/01/2018 (a) 1,000
NR* Baa1 1,785 Latrobe, Pennsylvania, IDA, Revenue Bonds (Saint Vincent College Project),
6.75% due 5/01/2014 1,807
AAA Aaa 3,750 Lehigh County, Pennsylvania, IDA, PCR, Refunding (Pennsylvania Power and
Light Company Project), Series A, 6.40% due 11/01/2021 (c) 3,809
Luzerne County, Pennsylvania, IDA, Exempt Facilities Revenue Bonds
(Pennsylvania Gas and Water Company Project), AMT:
BBB- Baa3 2,500 Refunding, Series A, 7.20% due 10/01/2017 2,527
AAA Aaa 2,000 Refunding, Series A, 7% due 12/01/2017 (b) 2,153
BBB- Baa3 1,500 Series B, 7.125% due 12/01/2022 1,508
BBB NR* 2,050 Montgomery County, Pennsylvania, Higher Education and Health Authority,
Revenue Bonds (Northwestern Corporation), 7.125% due 6/01/2018 2,017
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<CAPTION>
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
Pennsylvania (continued)
<S> <S> <C> <S> <C>
Montgomery County, Pennsylvania, Higher Education and Health Authority,
Revenue Refunding Bonds (Saint Joseph University)(f):
AAA NR* $1,800 6.50% due 12/15/2012 $ 1,869
AAA NR* 2,500 6.50% due 12/15/2022 2,554
Montgomery County, Pennsylvania, IDA, PCR, Refunding (Philadelphia Electric
Company):
BBB+ Baa2 1,800 AMT, Series A, 7.60% due 4/01/2021 1,897
AAA Aaa 4,400 Series B, 6.70% due 12/01/2021 (c) 4,598
AAA Aaa 1,260 North Penn, Pennsylvania, Water Authority Revenue Bonds, 6.875% due
11/01/2019 (d) 1,364
AAA Aaa 1,000 North Wales, Pennsylvania, Water Authority Revenue Bonds, 6.75% due
11/01/2017 (d) 1,060
BBB- Baa2 1,500 Pennsylvania Economic Development Financing Authority, Exempt Facilities Revenue
Bonds (MacMillan Limited Partnership Project), AMT, 7.60% due 12/01/2020 1,580
BBB+ Baa1 4,000 Pennsylvania Economic Development Financing Authority, Wastewater Treatment
Revenue Bonds (Sun Company Inc., R & M Project), AMT, Series A, 7.60% due
12/01/2024 4,217
AAA Aaa 5,000 Pennsylvania HFA, Revenue Refunding Bonds (Rental Housing), 6.50% due
7/01/2023 (g) 5,041
Pennsylvania HFA, S/F Mortgage Revenue Bonds, AMT:
AA Aa 2,630 Series 34B, 7% due 4/01/2024 2,709
AA Aa 3,000 Series 41B, 6.65% due 4/01/2025 3,014
NR* Aaa 3,965 Pennsylvania Intergovernmental Co-op Authority, Special Tax Revenue Bonds
(City of Philadelphia Funding Program), 6.80% due 6/15/2002 (e) 4,356
A NR* 2,000 Pennsylvania State Finance Authority, Revenue Refunding Bonds
(Municipal Capital Improvements Program), 6.60% due 11/01/2009 2,070
AA- A1 5,000 Pennsylvania State, GO, UT, Second Series A, 6.60% due 11/01/2011 5,271
<PAGE>
Pennsylvania State Higher Educational Assistance Agency, Student Loan
Revenue Bonds, AMT:
AAA Aaa 2,000 Series C, 7.15% due 9/01/2021 (b) 2,101
AAA Aaa 5,100 Series C, 6.40% due 3/01/2022 (b) 5,086
A1+ VMIG1++ 300 VRDN, Series B, 4.60% due 7/01/2018 (a) 300
Pennsylvania State Higher Educational Facilities Authority, College and
University Revenue Bonds:
AAA Aaa 1,255 Refunding (Duquesne University), Series A, 6.75% due 4/01/2020 (c) 1,301
NR* VMIG1++ 2,000 (Temple University), VRDN, 4.75% due 10/01/2009 (a) 2,000
A+ Aa 5,000 Pennsylvania State Higher Educational Facilities Authority, Revenue Refunding
Bonds (Thomas Jefferson University), Series A, 6.625% due 8/15/2009 5,231
A- A 2,050 Pennsylvania State, IDA, Revenue Bonds (Economic Development), Series A,
7% due 7/01/2001 (e) 2,284
Pennsylvania State University Revenue Refunding Bonds:
AA- A1 3,500 6.25% due 3/01/2011 3,585
AA- A1 1,750 Series A, 5.10% due 3/01/2018 1,531
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in Thousands)
<CAPTION>
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
Pennsylvania (concluded)
<S> <S> <C> <S> <C>
Philadelphia, Pennsylvania, Hospital and Higher Educational Facilities
Authority, Hospital Revenue Bonds:
A- NR* $1,000 (Children's Seashore House), Series B, 7% due 8/15/2022 $ 1,011
A- NR* 3,000 Refunding (Presbyterian Medical Center), 6.65% due 12/01/2019 2,918
A- Baa1 3,500 Refunding (Temple University Hospital), Series A, 6.625% due 11/15/2023 3,414
BBB NR* 1,630 Philadelphia, Pennsylvania, Hospital and Higher Educational Facilities
Authority Revenue Bonds (Northwestern Corporation), 7% due 6/01/2012 1,651
Philadelphia, Pennsylvania, Water and Wastewater Revenue Bonds:
A- NR* 1,000 5.50% due 8/01/2014 922
AAA Aaa 2,000 5.60% due 8/01/2018 (c) 1,870
AAA Aaa 1,405 Punxsutawney, Pennsylvania, Area School District, UT, 5.90% due 4/15/2020 (c) 1,369
A1 NR* 500 Schuylkill County, Pennsylvania, IDA, Resource Recovery Revenue Bonds
(Northeastern Power Company), VRDN, 4.90% due 12/01/2011 (a) 500
A- NR* 2,520 Scranton-Lackawanna, Pennsylvania, Health and Welfare Authority, Revenue
Refunding Bonds (University of Scranton Project), Series B, 6.50% due 3/01/2015 2,562
BBB+ NR* 1,000 Sharon, Pennsylvania, Regional Health System Authority, Hospital Revenue
Refunding Bonds (Sharon Regional Health System Project), Series A, 6.875% due
12/01/2009 1,014
<PAGE>
AAA Aaa 4,500 Southeastern, Pennsylvania, Transportation Authority, Pennsylvania Special
Revenue Bonds, Series A, 5.75% due 3/01/2020 (d) 4,283
AAA Aaa 1,550 Washington County, Pennsylvania, Hospital Authority Revenue Bonds
(The Washington Hospital Project), 5.625% due 7/01/2023 (b) 1,434
A1 NR* 1,000 Washington County, Pennsylvania, Lease Authority Revenue Bonds (Eye & Ear),
VRDN, Series B-1, Sub-Series D, 4.70% due 12/15/2018 (a) 1,000
Puerto Rico--1.7%
Puerto Rico Commonwealth, Highway and Transportation Authority,
Highway Revenue Bonds (e):
AAA NR* 900 Series S, 6.50% due 7/01/2002 986
AAA NR* 1,000 Series T, 6.50% due 7/01/2002 1,095
Total Investments (Cost--$118,883)--99.2% 123,101
Other Assets Less Liabilities--0.8% 1,041
--------
Net Assets--100.0% $124,142
========
<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, 1995.
(b)AMBAC Insured.
(c)MBIA Insured.
(d)FGIC Insured.
(e)Prerefunded.
(f)Insured by Connie Lee.
(g)FNMA Insured.
++Highest short-term rating by Moody's Investors Service, Inc.
*Not Rated.
See Notes to Financial Statements.
</TABLE>
<PAGE>
FINANCIAL INFORMATION
<TABLE>
Statement of Assets, Liabilities and Capital as of April 30, 1995
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$118,882,699) (Note 1a) $123,100,811
Cash 13,837
Receivables:
Securities sold $ 3,053,854
Interest 2,477,544 5,531,398
------------
Deferred organization expense (Note 1e) 21,681
Prepaid expenses and other assets 50,315
------------
Total assets 128,718,042
------------
Liabilities: Payables:
Securities purchased 4,228,802
Dividends to shareholders (Note 1f) 211,981
Investment adviser (Note 2) 48,127 4,488,910
------------
Accrued expenses and other liabilities 87,607
------------
Total liabilities 4,576,517
------------
Net Assets: Net assets $124,141,525
============
Capital: Capital Shares (unlimited number of shares of beneficial
interest authorized) (Note 4):
Preferred Shares, par value $.10 per share (1,600 shares of
AMPS* issued and outstanding at $25,000 per share liquidation
preference) $ 40,000,000
Common Shares, par value $.10 per share (5,743,422 shares
issued and outstanding) $ 574,342
Paid-in capital in excess of par 80,027,116
Undistributed investment income--net 775,989
Accumulated realized capital losses on investments--net (1,454,034)
Unrealized appreciation on investments--net 4,218,112
------------
Total--Equivalent to $14.65 net asset value per Common Share
(market price--$13.75) 84,141,525
------------
Total capital $124,141,525
============
<FN>
*Auction Market Preferred Shares.
See Notes to Financial Statements.
</TABLE>
<PAGE>
FINANCIAL INFORMATION (continued)
<TABLE>
Statement of Operations
<CAPTION>
For the Six Months
Ended April 30, 1995
<S> <S> <C> <C>
Investment Income Interest and amortization of premium and discount earned $ 3,808,953
(Note 1d):
Expenses: Investment advisory fees (Note 2) $ 297,830
Commission fees (Note 4) 57,362
Professional fees 36,117
Transfer agent fees 23,822
Printing and shareholder reports 23,311
Accounting services (Note 2) 15,540
Trustees' fees and expenses 11,331
Listing fees 9,501
Custodian fees 3,777
Amortization of organization expenses (Note 1e) 3,560
Pricing fees 3,521
Other 8,872
------------
Total expenses 494,544
------------
Investment income--net 3,314,409
------------
Realized & Realized loss on investments--net (1,103,230)
Unrealized Gain Change in unrealized appreciation/depreciation on investments--net 5,907,893
(Loss ) on ------------
Investments Net Increase in Net Assets Resulting from Operations $ 8,119,072
- --Net (Notes 1b, ============
1d & 3):
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (continued)
<TABLE>
Statements of Changes in Net Assets
<CAPTION>
For the Six For the
Months Ended Year Ended
Increase (Decrease) in Net Assets: April 30, 1995 Oct. 31, 1994
<S> <S> <C> <C>
Operations: Investment income--net $ 3,314,409 $ 6,517,937
Realized loss on investments--net (1,103,230) (13,177)
Change in unrealized appreciation/depreciation on investments--net 5,907,893 (13,727,541)
------------ ------------
Net increase (decrease) in net assets resulting from operations 8,119,072 (7,222,781)
------------ ------------
<PAGE>
Dividends & Investment income--net:
Distributions to Common Shares (2,582,294) (5,185,019)
Shareholders Preferred Shares (666,200) (1,099,664)
(Note 1f): Realized gain on investments--net:
Common Shares (280,658) (699,225)
Preferred Shares (56,968) (137,128)
------------ ------------
Net decrease in net assets resulting from dividends and
distributions to shareholders (3,586,120) (7,121,036)
------------ ------------
Capital Share Value of shares issued to Common Shareholders in reinvestment
Transactions of dividends and distributions -- 1,297,939
(Note 4): ------------ ------------
Net increase in net assets derived from capital share
transactions -- 1,297,939
------------ ------------
Net Assets: Total increase (decrease) in net assets 4,532,952 (13,045,878)
Beginning of period 119,608,573 132,654,451
------------ ------------
End of period* $124,141,525 $119,608,573
============ ============
<FN>
*Undistributed investment income--net $ 775,989 $ 710,074
============ ============
See Notes to Financial Statements.
</TABLE>
<PAGE>
FINANCIAL INFORMATION (concluded)
<TABLE>
Financial Highlights
<CAPTION>
For the
For the Six Period
The following per share data and ratios have been derived Months October 30,
from information provided in the financial statements. Ended For the Year Ended 1992++ to
April 30, October 31, October 31,
Increase (Decrease) in Net Asset Value: 1995 1994 1993 1992
<S> <S> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 13.86 $ 16.37 $ 14.13 $ 14.18
Operating --------- --------- --------- ---------
Performance: Investment income--net .58 1.15 1.12 --
Realized and unrealized gain (loss) on invest-
ments--net .84 (2.41) 2.30 --
--------- --------- --------- ---------
Total from investment operations 1.42 (1.26) 3.42 --
--------- --------- --------- ---------
Less dividends and distributions to Common
Shareholders:
Investment income--net (.45) (.91) (.85) --
Realized gain on investments--net (.05) (.12) -- --
--------- --------- --------- ---------
Total dividends and distributions to Common
Shareholders (.50) (1.03) (.85) --
--------- --------- --------- ---------
Capital charge resulting from issuance of
Common Shares -- -- -- (.05)
--------- --------- --------- ---------
Effect of Preferred Share activity++++:
Dividends and distributions to Preferred
Shareholders:
Investment income--net (.12) (.20) (.18) --
Realized gain on investments--net (.01) (.02) -- --
Capital charge resulting from issuance of
Preferred Shares -- -- (.15) --
--------- --------- --------- ---------
Total effect of Preferred Share activity (.13) (.22) (.33) --
--------- --------- --------- ---------
Net asset value, end of period $ 14.65 $ 13.86 $ 16.37 $ 14.13
========= ========= ========= =========
Market price per share, end of period $ 13.75 $ 11.00 $ 16.375 $ 15.00
========= ========= ========= =========
Total Investment Based on market price per share 29.93%+++ (27.82%) 15.30% .00%+++
Return:** ========= ========= ========= =========
Based on net asset value per share 9.87%+++ (9.02%) 22.36% (.35%)+++
========= ========= ========= =========
<PAGE>
Ratios to Expenses, net of reimbursement .83%* .82% .64% --%*
Average ========= ========= ========= =========
Net Assets:*** Expenses .83%* .82% .78% --%*
========= ========= ========= =========
Investment income--net 5.58%* 5.12% 5.20% --%*
========= ========= ========= =========
Supplemental Net assets, net of Preferred Shares,
Data: end of period (in thousands) $ 84,142 $ 79,609 $ 92,654 $ 78,315
========= ========= ========= =========
Preferred Shares outstanding, end of period
(in thousands) $ 40,000 $ 40,000 $ 40,000 $ --
========= ========= ========= =========
Portfolio turnover 18.78% 18.64% 14.03% --%
========= ========= ========= =========
Dividends Investment income--net $ 416 $ 688 $ 644 $ --
Per Share on
Preferred Shares
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 Shareholders.
++Commencement of Operations.
++++The Fund's Preferred Shares were issued on November 30, 1992.
++++++Dividends per share have been adjusted to reflect a two-for-
one stock split.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
MuniYield Pennsylvania Fund (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 Shares on a weekly basis. The Fund's
Common Shares are listed on the New York Stock Exchange under the
symbol MPA. 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 Trustees of the Fund.
(b) Derivative financial instruments--The Fund may engage in various
portfolio strategies to seek to increase its return by hedging its
portfolio against adverse movements in the debt markets. Losses may
arise due to changes in the value of the contract or if the
counterparty does not perform under the contract.
* Financial futures contracts--The Fund may purchase or sell
interest rate futures contracts and options on such futures
contracts for the purpose of hedging the market risk on existing
securities or the intended purchase of securities. Futures contracts
are contracts for delayed delivery of securities at a specific
future date and at a specific price or yield. Upon entering into a
contract, the Fund deposits and maintains as collateral such initial
margin as required by the exchange on which the transaction is
effected. Pursuant to the contract, the Fund agrees to receive from
or pay to the broker an amount of cash equal to the daily
fluctuation in value of the contract. Such receipts or payments are
known as variation margin and are recorded by the Fund as unrealized
gains or losses. When the contract is closed, the Fund records a
realized gain or loss equal to the difference between the value of
the contract at the time it was opened and the value at the time it
was closed.
<PAGE>
* Options--The Fund is authorized to write covered call options and
purchase put options. When the Fund writes an option, an amount
equal to the premium received by the Fund is reflected as an asset
and an equivalent liability. The amount of the liability is
subsequently marked to market to reflect the current market value of
the option written. When a security is purchased or sold through an
exercise of an option, the related premium paid (or received) is
added to (or deducted from) the basis of the security acquired or
deducted from (or added to) the proceeds of the security sold. When
an option expires (or the Fund enters into a closing transaction),
the Fund realizes a gain or loss on the option to the extent of the
premiums received or paid (or gain or loss to the extent the cost of
the closing transaction exceeds the premium paid or received).
Written and purchased options are non-income producing investments.
(c) Income taxes--It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute substantially all of its
taxable income to its shareholders. Therefore, no Federal income tax
provision is required.
(d) Security transactions and investment income--Security
transactions are recorded on the dates the transactions are entered
into (the trade dates). Interest income is recognized on the accrual
basis. Discounts and market premiums are amortized into interest
income. Realized gains and losses on security transactions are
determined on the identified cost basis.
(e) Deferred organization expenses--Deferred organization expenses
are amortized on a straight-line basis over a five-year period.
(f) Dividends and distributions--Dividends from net investment
income are declared and paid monthly. Distributions of capital gains
are recorded on the ex-dividend dates.
2. Investment Advisory Agreement and
Transactions with Affiliates:
The Fund has entered into an Investment Advisory Agreement with Fund
Asset Management, L.P. ("FAM"). The general partner of FAM is
Princeton Services, Inc. ("PSI"), an indirect wholly-owned
subsidiary of Merrill Lynch & Co., Inc. ("ML & Co."), which is the
limited partner.
<PAGE>
FAM is responsible for the management of the Fund's portfolio and
provides the necessary personnel, facilities, equipment and certain
other services necessary to the operations of the Fund. For such
services, the Fund pays a monthly fee at an annual rate of 0.50% of
the Fund's average weekly net assets.
Accounting services are provided to the Fund by FAM at cost.
Certain officers and/or trustees 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, 1995 were $28,253,110 and
$21,391,607, respectively.
Net realized and unrealized gains (losses) as of April 30, 1995 were
as follows:
Realized Unrealized
Losses Gains
Long-term investments $ (663,296) $4,218,112
Financial futures contracts (439,934) --
----------- ----------
Total $(1,103,230) $4,218,112
=========== ==========
As of April 30, 1995, unrealized appreciation for Federal income tax
purposes aggregated $4,218,112, of which $4,430,871 related to
appreciated securities and $212,759 related to depreciated
securities. The aggregate cost of investments at April 30, 1995 for
Federal income tax purposes was $118,882,699.
4. Capital Share Transactions:
The Fund is authorized to issue an unlimited number of shares of
beneficial interest, including Preferred Shares, par value $.10 per
share, all of which were initially classified as Common Shares. The
Board of Trustees is authorized, however, to reclassify any unissued
shares of beneficial interest without approval of the holders of
Common Shares.
Common Shares
For the six months ended April 30, 1995, shares issued and
outstanding remained constant at 5,743,422. At April 30, 1995, total
paid-in capital amounted to $80,601,458.
<PAGE>
Preferred Shares
Auction Market Preferred Shares ("AMPS") are Preferred Shares of the
Fund that entitle their holders to receive cash dividends at an
annual rate that may vary for the successive dividend periods. The
yield in effect at April 30, 1995 was 4.15%.
A two-for-one stock split occurred on December 1, 1994. As a result,
at April 30, 1995, there were 1,600 AMPS shares authorized, issued
and outstanding with a liquidation preference of $25,000 per share,
plus accumulated and unpaid dividends of $18,946.
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, 1995, MLPF&S, an affiliate of FAM, earned $17,187 as
commissions.
5. Subsequent Event:
On May 9, 1995, the Fund's Board of Trustees declared an ordinary
income dividend to holders of Common Shares in the amount of
$0.073525 per share, payable on May 30, 1995 to shareholders of
record as of May 19, 1995.
PER SHARE INFORMATION
<TABLE>
Per Share Selected Quarterly Financial Data*
<CAPTION>
Dividends/Distributions
Net Realized Unrealized
Investment Gains Gains Net Investment Income Capital Gains
For the Quarter Income (Losses) (Losses) Common Preferred Common Preferred
<S> <C> <C> <C> <C> <C> <C> <C>
May 1, 1993 to July 31, 1993 $.29 $ .09 $ .32 $.24 $.05 -- --
August 1, 1993 to October 31, 1993 .29 .04 .70 .24 .04 -- --
November 1, 1993 to January 31, 1994 .30 -- .10 .24 .05 $.12 $.02
February 1, 1994 to April 30, 1994 .28 .06 (1.84) .24 .05 -- --
May 1, 1994 to July 31, 1994 .28 .07 2.30 .27 .05 -- --
August 1, 1994 to October 31, 1994 .29 (.14) (2.96) .16 .05 -- --
November 1, 1994 to January 31, 1995 .34 (.09) .57 .23 .05 .05 .01
February 1, 1995 to April 30, 1995 .24 (.10) .46 .22 .07 -- --
<PAGE>
<CAPTION>
Net Asset Value Market Price**
For the Quarter High Low High Low Volume***
<S> <C> <C> <C> <C> <C>
May 1, 1993 to July 31, 1993 $15.78 $15.18 $14.875 $14.875 288
August 1, 1993 to October 31, 1993 16.66 15.63 15.625 15.625 593
November 1, 1993 to January 31, 1994 16.35 15.89 15.00 15.00 370
February 1, 1994 to April 30, 1994 16.32 14.03 13.50 13.50 354
May 1, 1994 to July 31, 1994 15.13 14.26 14.375 13.125 357
August 1, 1994 to October 31, 1994 14.85 13.86 13.375 11.125 668
November 1, 1994 to January 31, 1995 14.29 13.03 12.875 10.50 1,090
February 1, 1995 to April 30, 1995 14.94 14.32 13.75 12.75 487
<FN>
*Calculations are based upon Common Shares outstanding at the end of
each quarter.
**As reported in the consolidated transaction reporting system.
***In thousands.
</TABLE>
OFFICERS AND TRUSTEES
Arthur Zeikel, President and Trustee
Donald Cecil, Trustee
M. Colyer Crum, Trustee
Edward H. Meyer, Trustee
Jack B. Sunderland, Trustee
J. Thomas Touchton, Trustee
Terry K. Glenn, Executive Vice President
Donald C. Burke, Vice President
Vincent R. Giordano, Vice President
Kenneth A. Jacob, Vice President
Gerald M. Richard, Treasurer
Mark B. Goldfus, Secretary
Custodian
State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts 02110
<PAGE>
Transfer Agents
Common Shares:
State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts 02110
Preferred Shares:
IBJ Schroder Bank & Trust Company
One State Street
New York, New York 10004
NYSE Symbol
MPA
