MUNIYIELD
PENNSYLVANIA
FUND
FUND LOGO
Semi-Annual Report
April 30, 1997
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 repre-
sentation 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 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. Statements and other information herein are as dated
and are subject to change.
<PAGE>
MuniYield
Pennsylvania Fund
Box 9011
Princeton, NJ
08543-9011
MuniYield Pennsylvania Fund
TO OUR SHAREHOLDERS
For the six-month period ended April 30, 1997, the Common Shares of
MuniYield Pennsylvania Fund earned $0.441 per share income
dividends, which included earned and unpaid dividends of $0.072.
This represents a net annualized yield of 5.91%, based on a month-
end per share net asset value of $15.07. Over the same period, the
total investment return on the Fund's Common Shares was +2.13%,
based on a change in per share net asset value from $15.32 to
$15.07, and assuming reinvestment of $0.445 per share income
dividends.
For the six-month period ended April 30, 1997, the Fund's Auction
Market Preferred Shares had an average yield of 3.07%.
<PAGE>
The Municipal Market Environment
Long-term tax-exempt revenue bonds traded in a relatively narrow
range throughout much of the six months ended April 30, 1997. By mid-
January 1997, municipal bond yields had risen to over 6% as
investors reacted negatively to reports of progressively stronger
domestic economic growth. However, a continued lack of any material
inflationary pressures allowed bond yields to decline to their prior
levels by late February. Bond yields rose again as investors became
increasingly concerned that the US domestic economic strength seen
thus far in 1997 would continue and that the increase in short-term
interest rates administered by the Federal Reserve Board (FRB) in
late March would be the first in a series of such moves designed to
slow the US economy before any dormant inflationary pressures were
awakened. Long-term tax-exempt bond yields rose approximately 15
basis points (0.15%) to almost 6.15% by mid-April. Similarly, long-
term US Treasury bond yields rose over 35 basis points over the same
period to 7.16%. However, in late April economic indicators were
released showing that despite considerable economic growth, any
inflationary pressures, particularly those associated with wage
increases, were well-contained and of no immediate concern. Fixed-
income bond prices staged a significant rally during the last week
of April with long-term US Treasury bond yields falling nearly 20
basis points to end the month at 6.95%. Municipal bond yields, as
measured by the Bond Buyer Revenue Bond Index, declined nearly 15
basis points to stand at 6.01% by April 30, 1997.
As in recent quarters, the relative stability of long-term tax-
exempt bond yields was supported by low levels of new municipal bond
issuance. Over the past six months, approximately $90 billion in
long-term tax-exempt bonds was underwritten, a decline of more than
6% versus the corresponding period a year earlier. During the three
months ended April 30, 1997, $41 billion in new long-term municipal
bonds was issued, also a 6% decline in issuance as compared to the
same three-month period ended April 30, 1996. Overall investor
demand has remained strong, particularly from property and casualty
insurance companies and individual retail investors. In recent
years, investor demand has increased whenever tax-exempt bond yields
have approached or exceeded the 6% level as they have in the past
few months.
Additionally, in recent months much of the new bond issuance was
dominated by a number of larger issues. These included $710 million
in New York City water bonds, $600 million in state of California
bonds, $1 billion in New York City general obligation bonds, $435
million in Dade County, Florida water and sewer revenue bonds, $450
million in Puerto Rico Electric Authority issues, and $930 million
in Port Authority of New York and New Jersey issues. These bonds
have typically been issued in states with relatively high state
income taxes and consequently generally were underwritten at yields
that were relatively unattractive to residents in other states. This
has exacerbated the general decline in overall issuance in recent
years, making the decrease in supply even more dramatic for general
market investors.
<PAGE>
The present economic situation remains nearly ideal. The domestic
economy continues to grow steadily with little, if any, sign of a
resurgence in inflation. Recent economic growth generated
considerable unexpected tax revenues for the Federal government.
Forecasts for the 1997 Federal fiscal deficit were reduced to under
$100 billion, a level not seen since the early 1980s. Such a reduced
Federal deficit enhances the prospect for a balanced Federal budget.
All of these factors support a scenario of steady, or even falling,
interest rates in the coming years. Present annual estimates of
future municipal bond issuance remain centered around $175 billion,
indicating that the current relative scarcity of tax-exempt bonds
should continue for at least the remainder of the year. Should
interest rates begin to decline later this year, either as the
result of a balanced Federal budget or continued benign inflation,
investors are unlikely to be able to purchase long-term municipal
bonds at their currently attractive levels.
Portfolio Strategy
During the past six months, we generally maintained a cautious
approach toward the fixed-income market since powerful economic
growth was effectively neutralized by tame inflationary reports.
However, this strong growth/low inflation scenario may have ended in
late March as the FRB decided to strike preemptively against a
future rise in inflation by tightening monetary policy.
Historically, once the FRB chooses to see economic growth slow down,
it is reasonable to expect several additional increases in short-
term interest rates over the following six months--twelve months.
This is referred to as a tightening cycle, and long-term interest
rates typically rise along with short-term interest rates until
economic growth falters. Although taxable yields could rise as high
as 7.50% from the current level of 6.90% during the tightening
cycle, we expect the impact on municipal bond yields to be muted in
response to the combination of scarce Pennsylvania supply and
increasing retail investor demand as municipal bonds yield 6% or
higher.
The Fund is currently well-positioned for such a turn of events as a
substantial portion of its holdings are in bonds which traditionally
appeal to individual or retail investors and therefore are likely to
outperform other issues in a declining market. As tax-exempt
interest rates rise toward 6%, we are prepared to swap these retail
bonds for aggressively structured and higher-yielding securities.
This will allow us to more fully participate in the bond market
rally we expect later in the year should economic growth finally
begin to falter as a result of tighter monetary policy. If a Federal
budget agreement which is deemed to be credible by bond market
investors is enacted, the decline in yields could happen sooner than
anticipated as further FRB tightenings may not then be needed.
Should this occur, we are prepared to quickly adopt a more
aggressive stance in the bond market. We would expect the Fund to
benefit from a sharp drop in interest rates as many of the
portfolio's higher-coupon bonds can be advance refunded, providing a
boost to the Fund's total return.
<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
Senior Vice President
(William M. Petty)
William M. Petty
Vice President and Portfolio Manager
May 22, 1997
<PAGE>
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.
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 Pre-ferred 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 pickup 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 does not fluctuate. In addition to the decline in
net asset value, the market value of the fund's Common Shares may
also decline.
<PAGE>
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 Authority
PCR Pollution Control Revenue Bonds
S/F Single-Family
UPDATES Unit Priced Demand Adjustable
Tax-Exempt Securities
UT Unlimited Tax
VRDN Variable Rate Demand Notes
<TABLE>
SCHEDULE OF INVESTMENTS (In Thousands)
<CAPTION>
S&P Moody's Face Value
Ratings Ratings Amount Issue (Note 1a)
Pennsylvania--95.1%
<S> <S> <C> <S> <C>
Allegheny County, Pennsylvania, Hospital Development Authority Revenue Bonds:
AAA Aaa $2,000 (Allegheny General Hospital Project), Series A, 6.25% due 9/01/2020 (c) $ 2,075
A-1 VMIG1++ 100 (Presbyterian Health Center), VRDN, Series B, 4.60% due 3/01/2020 (a)(c) 100
NR* A3 3,000 (South Hills Health System), Series A, 6.50% due 5/01/2014 3,078
AAA Aaa 5,000 Beaver County, Pennsylvania, Hospital Authority, Revenue Refunding Bonds
(Medical Center of Beaver County, Inc.), 6.625% due 7/01/2010 (b) 5,339
AAA Aaa 4,275 Bethlehem, Pennsylvania, Water Authority, Revenue Refunding Bonds, 6.25% due
11/15/2001 (c)(e) 4,534
NR* Aa1 3,000 Chester County, Pennsylvania, Great Valley School District, Refunding, UT,
5.10% due 2/15/2016 2,791
BBB+ NR* 1,000 Cumberland County, Pennsylvania, Municipal Authority Revenue Bonds
(Presbyterian Homes Inc. Project), 6% due 12/01/2026 968
AAA NR* 3,845 Delaware County, Pennsylvania, Authority Revenue Refunding Bonds (Elwyn Inc.
Project), 6% due 6/01/2011 (f) 3,961
<PAGE>
AAA NR* 1,380 Delaware County, Pennsylvania, College Authority Revenue Bonds (Neumann
College), 5.625% due 10/01/2025 (f) 1,328
A- NR* 2,250 Delaware County, Pennsylvania, Hospital Authority Revenue Bonds (Riddle
Memorial, Hospital) 6.50% due 1/01/2022 2,302
A1+ P1 2,800 Delaware County, Pennsylvania, IDA, PCR (BP Oil Inc. Project), UPDATES,
4.40% due 12/01/2009 (a) 2,800
A Baa1 2,000 Delaware County, Pennsylvania, IDA, Revenue Refunding Bonds (Resource
Recovery Facility), Series A, 6.10% due 7/01/2013 2,009
A-1 NR* 1,200 Emmaus, Pennsylvania, General Authority Revenue Bonds, VRDN, Sub-Series B-12,
4.65% due 3/01/2024 (a) 1,200
A1+ NR* 1,700 Geisinger, Pennsylvania, Health Systems Authority Revenue Bonds, VRDN,
Series B, 4.40% due 7/01/2022 (a) 1,700
NR* Baa1 1,785 Latrobe, Pennsylvania, IDA, College Revenue Bonds (Saint Vincent College
Project), 6.75% due 5/01/2014 1,872
AAA Aaa 3,000 Lehigh County, Pennsylvania, IDA, PCR, Refunding (Pennsylvania Power and
Light Company Project), Series A, 6.40% due 11/01/2021 (c) 3,136
AAA Aaa 4,570 Lower Providence Township, Pennsylvania, Sewer Authority, Sewer Revenue
Refunding Bonds, 5.25% due 5/01/2022 (c) 4,240
Luzerne County, Pennsylvania, IDA, Exempt Facilities Revenue Bonds
(Pennsylvania Gas and Water Company Project), AMT:
BBB A3 2,500 Refunding, Series A, 7.20% due 10/01/2017 2,665
AAA Aaa 2,000 Refunding, Series A, 7% due 12/01/2017 (b) 2,199
BBB A3 1,500 Series B, 7.125% due 12/01/2022 1,580
BBB NR* 2,050 Montgomery County, Pennsylvania, Higher Education and Health Authority
Revenue Bonds (Northwestern Corporation), 7.125% due 6/01/2018 2,121
Montgomery County, Pennsylvania, IDA, PCR, Refunding (Philadelphia Electric
Company):
BBB+ Baa2 1,800 AMT, Series A, 7.60% due 4/01/2021 1,924
AAA Aaa 4,400 Series B, 6.70% due 12/01/2021 (c) 4,732
A- NR* 2,000 Montgomery County, Pennsylvania, IDA, Retirement Community Revenue Refunding
Bonds (Adult Communities Total Services), Series A, 5.875% due 11/15/2022 1,925
AAA Aaa 1,260 North Penn, Pennsylvania, Water Authority, Water Revenue Bonds, 6.875% due
11/01/2004 (d)(e) 1,418
AAA Aaa 1,000 North Wales, Pennsylvania, Water Authority, Water Revenue Bonds, 6.75% due
11/01/2004 (d)(e) 1,111
<PAGE>
AAA Aaa 2,000 Northeastern, Pennsylvania, Hospital and Education Authority, Health Care
Revenue Bonds (Wyoming Valley Health Care), Series A, 5.25% due 1/01/2026 (b) 1,837
BBB- Baa2 1,500 Pennsylvania Economic Development Financing Authority, Exempt Facilities
Revenue Bonds (MacMillan Limited Partnership Project), AMT, 7.60% due
12/01/2020 1,665
</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>
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 $ 4,438
AAA Aaa 4,000 Pennsylvania HFA, Refunding (Rental Housing), 6.50% due 7/01/2023 (g) 4,115
Pennsylvania HFA, S/F Mortgage, AMT:
AA+ Aa 2,630 Series 34B, 7% due 4/01/2024 2,741
AA+ Aa 3,000 Series 41B, 6.65% due 4/01/2025 3,104
A NR* 2,000 Pennsylvania State Finance Authority, Revenue Refunding Bonds (Municipal
Capital Improvements Program), 6.60% due 11/01/2009 2,131
AA- A1 5,000 Pennsylvania State, GO, UT, Second Series A, 6.60% due 11/01/2001 (e) 5,425
AAA Aaa 2,000 Pennsylvania State Higher Education Assistance Agency, Student Loan Revenue
Bonds, AMT, Series C, 7.15% due 9/01/2021 (b) 2,107
AAA Aaa 1,255 Pennsylvania State Higher Educational Facilities Authority, College and
University Revenue Refunding Bonds (Duquesne University), Series A, 6.75%
due 4/01/2020 (c) 1,328
NR* NR* 2,050 Pennsylvania State, IDA, Revenue Bonds (Pooled Loan), Series A, 7% due
7/01/2001 (e) 2,246
AA- A1 2,500 Pennsylvania State University, Refunding, 6.25% due 3/01/2011 2,630
AA+ Aa1 4,900 Pennsylvania, Swarthmore Boro Authority, College Revenue Refunding Bonds, 6%
due 9/15/2020 4,960
Philadelphia, Pennsylvania, Hospitals and Higher Education Facilities
Authority, Hospital Revenue Bonds:
A1+ VMIG1++ 800 (Children's Hospital of Philadelphia Project), VRDN, Series A, 4.40% due
3/01/2027 (a) 800
A- NR* 1,000 (Children's Seashore House), Series B, 7% due 8/15/2022 1,057
A- Baa1 2,000 Refunding (Chestnut Hill Hospital), 6.50% due 11/15/2022 2,039
AAA NR* 3,000 Refunding (Presbyterian Medical Center), 6.65% due 12/01/2019 (h) 3,361
<PAGE>
BBB NR* 1,630 Philadelphia, Pennsylvania, Hospitals and Higher Education Facilities
Authority Revenue Bonds (Northwestern Corporation), 7% due 6/01/2012 1,691
A1+ NR* 1,200 Philadelphia, Pennsylvania, IDA, Revenue Bonds (Institute for Cancer Research
Project), VRDN, Series A, 4.40% due 7/01/2013 (a) 1,200
AAA Aaa 4,000 Philadelphia, Pennsylvania, Industrial Development Lease Authority Revenue
Bonds, Series A, 5.375% due 2/15/2027 (c) 3,749
AAA Aaa 1,000 Philadelphia, Pennsylvania, Water and Wastewater Revenue Bonds, 5.50% due
8/01/2014 (c) 976
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 2,630
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 1,049
Puerto Rico--4.4%
Puerto Rico Commonwealth, Highway and Transportation Authority, Highway Revenue
Bonds (e):
AAA NR* 900 Series S, 6.50% due 7/01/2002 983
AAA NR* 1,000 Series T, 6.50% due 7/01/2002 1,092
AAA Aaa 3,530 Puerto Rico Municipal Finance Agency, UT, Series A, 5.50% due 7/01/2021 (i) 3,429
Total Investments (Cost--$120,552)--99.5% 125,891
Other Assets Less Liabilities--0.5% 644
--------
Net Assets--100.0% $126,535
========
<PAGE>
<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, 1997.
(b)AMBAC Insured.
(c)MBIA Insured.
(d)FGIC Insured.
(e)Prerefunded.
(f)Connie Lee Insured.
(g)FNMA Collateralized.
(h)Escrowed to maturity.
(i)FSA Insured.
++Highest short-term rating by Moody's Investors Service, Inc.
*Not Rated.
(e)Prerefunded.
(f)Connie Lee Insured.
(g)FNMA Collateralized.
(h)Escrowed to maturity.
++Highest short-term rating by Moody's Investors Service, Inc.
*Not Rated.
Ratings of issues shown have not been audited by Deloitte & Touche
LLP.
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION
<TABLE>
Statement of Assets, Liabilities and Capital as of April 30, 1997
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$120,551,717) (Note 1a) $125,890,982
Cash 27,053
Receivables:
Interest $ 2,459,505
Securities sold 1,788,709 4,248,214
------------
Deferred organization expense (Note 1e) 7,260
Prepaid expenses and other assets 6,769
------------
Total assets 130,180,278
------------
<PAGE>
Liabilities: Payables:
Securities purchased 3,399,718
Dividends to shareholders (Note 1f) 144,460
Investment adviser (Note 2) 51,671 3,595,849
------------
Accrued expenses and other liabilities 49,689
------------
Total liabilities 3,645,538
------------
Net Assets: Net assets $126,534,740
============
Capital: Capital Shares (unlimited number of shares of beneficial
interest authorized) (Note 4):
Preferred Shares, par value $.05 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 836,262
Accumulated realized capital losses on investments--net (242,245)
Unrealized appreciation on investments--net 5,339,265
------------
Total--Equivalent to $15.07 net asset value per Common
Share (market price--$14.25) 86,534,740
------------
Total capital $126,534,740
============
<FN>
*Auction Market Preferred Shares.
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (continued)
<TABLE>
Statement of Operations
<CAPTION>
For the Six Months Ended
April 30, 1997
<S> <S> <C> <C>
Investment Income Interest and amortization of premium and discount earned $ 3,724,097
(Note 1d):
<PAGE>
Expenses: Investment advisory fees (Note 2) $ 315,903
Commission fees (Note 4) 50,452
Professional fees 34,974
Transfer agent fees 26,602
Accounting services (Note 2) 21,713
Printing and shareholder reports 18,471
Trustees' fees and expenses 11,261
Listing fees 8,037
Custodian fees 4,147
Pricing fees 3,872
Amortization of organization expenses (Note 1e) 3,609
Other 7,734
------------
Total expenses 506,775
------------
Investment income--net 3,217,322
------------
Realized & Realized gain on investments--net 881,069
Unrealized Gain Change in unrealized appreciation on investments--net (1,708,206)
(Loss) on ------------
Investments--Net Net Increase in Net Assets Resulting from Operations $ 2,390,185
(Notes 1b, 1d & 3): ============
See Notes to Financial Statements.
</TABLE>
<TABLE>
Statements of Changes in Net Assets
<CAPTION>
For the Six For the
Months Ended Year Ended
April 30, October 31,
Increase (Decrease) in Net Assets: 1997 1996
<S> <S> <C> <C>
Operations: Investment income--net $ 3,217,322 $ 6,597,091
Realized gain on investments--net 881,069 865,693
Change in unrealized appreciation on investments--net (1,708,206) (993,735)
------------ ------------
Net increase in net assets resulting from operations 2,390,185 6,469,049
------------ ------------
Dividends & Investment income--net:
Distributions to Common Shares (2,551,521) (5,252,664)
Shareholders Preferred Shares (608,128) (1,441,936)
(Note 1f): Realized gain on investments--net:
Common Shares (544,212) --
Preferred Shares (152,208) --
------------ ------------
Net decrease in net assets resulting from dividends and
distributions to shareholders (3,856,069) (6,694,600)
------------ ------------
<PAGE>
Net Assets: Total decrease in net assets (1,465,884) (225,551)
Beginning of period 128,000,624 128,226,175
------------ ------------
End of period* $126,534,740 $128,000,624
============ ============
<FN>
*Undistributed investment income--net $ 836,262 $ 778,589
============ ============
See Notes to Financial Statements.
</TABLE>
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 For the
April 30, Year Ended October 31,
Increase (Decrease) in Net Asset Value: 1997 1996 1995 1994 1993
<S> <S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 15.32 $ 15.36 $ 13.86 $ 16.37 $ 14.13
Operating -------- -------- -------- -------- --------
Performance: Investment income--net .56 1.15 1.17 1.15 1.12
Realized and unrealized gain (loss) on
investments--net (.14) (.03) 1.53 (2.41) 2.30
-------- -------- -------- -------- --------
Total from investment operations .42 1.12 2.70 (1.26) 3.42
-------- -------- -------- -------- --------
Less dividends and distributions to Common
Shareholders:
Investment income--net (.44) (.91) (.89) (.91) (.85)
Realized gain on investments--net (.09) -- -- (.12) --
In excess of realized gain on investments
--net -- -- (.05) -- --
-------- -------- -------- -------- --------
Total dividends and distributions to Common
Shareholders (.53) (.91) (.94) (1.03) (.85)
-------- -------- -------- -------- --------
Effect of Preferred Share activity:++++
Dividends and distributions to Preferred
Shareholders:
Investment income--net (.11) (.25) (.25) (.20) (.18)
Realized gain on investments--net (.03) -- -- (.02) --
In excess of realized gain on investments
--net -- -- (.01) -- --
Capital charge resulting from issuance of
Preferred Shares -- -- -- -- (.15)
-------- -------- -------- -------- --------
Total effect of Preferred Share activity (.14) (.25) (.26) (.22) (.33)
-------- -------- -------- -------- --------
Net asset value, end of period $ 15.07 $ 15.32 $ 15.36 $ 13.86 $ 16.37
======== ======== ======== ======== ========
Market price per share, end of period $ 14.25 $ 14.125 $ 13.75 $ 11.00 $ 16.375
======== ======== ======== ======== ========
<PAGE>
Total Investment Based on market price per share 4.74%++ 9.48% 34.17% (27.82%) 15.30%
Return:** ======== ======== ======== ======== ========
Based on net asset value per share 2.13%++ 6.30% 18.95% (9.02%) 22.36%
======== ======== ======== ======== ========
Ratios to Average Expenses, net of reimbursement .80%* .78% .82% .82% .64%
Net Assets:*** ======== ======== ======== ======== ========
Expenses .80%* .78% .82% .82% .78%
======== ======== ======== ======== ========
Investment income--net 5.09%* 5.14% 5.44% 5.12% 5.20%
======== ======== ======== ======== ========
Supplemental Net assets, net of Preferred Shares, end of
Data: period (in thousands) $ 86,535 $ 88,001 $ 88,226 $ 79,609 $ 92,654
======== ======== ======== ======== ========
Preferred Shares outstanding, end of
period (in thousands) $ 40,000 $ 40,000 $ 40,000 $ 40,000 $ 40,000
======== ======== ======== ======== ========
Portfolio turnover 33.75% 75.83% 43.59% 18.64% 14.03%
======== ======== ======== ======== ========
Leverage: Asset coverage per $1,000 $ 3,163 $ 3,200 $ 3,206 $ 2,990 $ 3,316
======== ======== ======== ======== ========
Dividends Investment income--net $ 380 $ 901 $ 902 $ 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.
++Aggregate total investment return.
++++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 that occurred on December 1, 1994.
See Notes to Financial Statements.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
<PAGE>
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, 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 Trustees.
(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.
NOTES TO FINANCIAL STATEMENTS (concluded)
(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, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the six months ended April 30, 1997 were $40,396,029 and
$41,181,960, respectively.
Net realized and unrealized gains as of April 30, 1997 were as
follows:
Realized Unrealized
Gains Gains
Long-term investments $ 881,069 $5,339,265
---------- ----------
Total $ 881,069 $5,339,265
========== ==========
As of April 30, 1997, net unrealized appreciation for Federal income
tax purposes aggregated $5,339,265, of which $5,560,870 related to
appreciated securities and $221,605 related to depreciated
securities. The aggregate cost of investments at April 30, 1997 for
Federal income tax purposes was $120,551,717.
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, 1997, shares issued and
outstanding remained constant at 5,743,422. At April 30, 1997, 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, 1997 was 4.05%.
As of April 30, 1997, there were 1,600 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, 1997, Merril Lynch, Pierce, Fenner & Smith Inc., an
affiliate of FAM, earned $23,365 as commissions.
5. Subsequent Event:
On May 9, 1997, the Fund's Board of Trustees declared an ordinary
income dividend to holders of Common Shares in the amount of
$.072174 per share, payable on May 29, 1997 to shareholders of
record as of May 19, 1997.
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
Vincent R. Giordano, Senior Vice President
Donald C. Burke, Vice President
Kenneth A. Jacob, Vice President
William M. Petty, Vice President
Gerald M. Richard, Treasurer
Patrick D. Sweeney, Secretary
Custodian
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
Transfer Agents
Common Shares:
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
<PAGE>
Preferred Shares:
IBJ Schroder Bank & Trust Company
One State Street
New York, NY 10004
NYSE Symbol
MPA
