-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, WXeWNYdvmI3RZdO+FVQslAplOUQUxLXMZPxpaWyYPsNqncKKK2ZlAqxPi8AcfmWz eRT1ubQKDMTafSvhcka/Pw== 0000900092-94-000573.txt : 19941227 0000900092-94-000573.hdr.sgml : 19941227 ACCESSION NUMBER: 0000900092-94-000573 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19941031 FILED AS OF DATE: 19941223 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MUNIYIELD NEW YORK INSURED FUND INC CENTRAL INDEX KEY: 0000882150 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] STATE OF INCORPORATION: NJ FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-06500 FILM NUMBER: 94566068 BUSINESS ADDRESS: STREET 1: 800 SCUDDERS MILL RD CITY: PLAINSBORO STATE: NJ ZIP: 08536 BUSINESS PHONE: 6092822800 MAIL ADDRESS: STREET 1: PO BOX 9011 STREET 2: C/O MERRILL LYNCH ASSET MANAGEMENT CITY: PRINCETON STATE: NJ ZIP: 08543-9011 FORMER COMPANY: FORMER CONFORMED NAME: NEW YORK MUNIYIELD FUND INC DATE OF NAME CHANGE: 19600201 N-30D 1 ANNUAL REPORT MUNIYIELD NEW YORK INSURED FUND, INC. FUND LOGO Annual Report October 31, 1994 This report, including the financial information herein, is transmitted to the shareholders of MuniYield New York 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. MuniYield New York Insured Fund, Inc. Box 9011 Princeton, NJ 08543-9011 MuniYield New York Insured Fund, Inc. TO OUR SHAREHOLDERS For the year ended October 31, 1994, the Common Stock of MuniYield New York Insured Fund, Inc. earned $0.971 per share income dividends, which includes earned and unpaid dividends of $0.082. This represents a net annualized yield of 6.85%, based on a month-end net asset value of $14.17 per share. Over the same period, the total investment return on the Fund's Common Stock was -9.94%, based on a change in per share net asset value from $16.85 to $14.17, and assuming reinvestment of $0.974 per share income dividends and $0.046 per share capital gains distributions. For the six-month period ended October 31, 1994, the total investment return on the Fund's Common Stock was -2.17%, based on a change in per share net asset value from $15.00 to $14.17, and assuming reinvestment of $0.490 per share income dividends. For the six-month period ended October 31, 1994, the Fund's Auction Market Preferred Stock had an average yield of 2.98% for Series A and 2.78% for Series B. The Environment As discussed in our last report to shareholders, the Federal Reserve Board moved to counteract inflationary pressures by tightening monetary policy. This trend continued during the May--October period. Despite the series of preemptive strikes against inflation by the central bank, concerns of increasing inflationary pressures continued to prompt volatility in the US capital markets during the period. In addition, the weakness of the US dollar in foreign exchange markets prolonged stock and bond market declines. Ongoing strength in the manufacturing sector and better-than- expected economic results continue to fuel speculation that the Federal Reserve Board will continue to raise short-term interest rates in the months ahead. However, although consumer spending is increasing, it is doing so at a lower rate than has been the case in recent economic recoveries. In the weeks ahead, investors will continue to assess economic data and inflationary trends in order to gauge whether further increases in short-term interest rates are imminent. Continued indications of moderate and sustainable levels of economic growth would be positive for the US capital markets. At the same time, greater US dollar stability in foreign exchange markets would help to dampen expectations of significantly higher short-term interest rates. The Municipal Market The long-term tax-exempt market continued to erode throughout the three months ended October 31, 1994. As measured by the Bond Buyer Revenue Bond Index, yields on A-rated municipal revenue bonds maturing in 30 years rose by almost 50 basis points (0.50%) to 6.95% during the October 31, 1994 quarter. This represents the highest level in tax-exempt bond yields in over two years. US Treasury bonds suffered even greater declines during the quarter as Treasury bond yields rose approximately 60 basis points to end the quarter at 8.00%. The tax-exempt bond market reacted negatively throughout the October quarter to indications that, despite a series of interest rate increases by the Federal Reserve Board, the strength of the domestic economy seen in recent quarters has not yet been significantly reduced. While inflationary pressures have remained well contained, additional Federal Reserve Board actions have been expected both to ensure that domestic economic growth is eventually confined to current levels and to assure nervous financial markets of its anti-inflationary intentions. Fortunately, while the demand for tax-exempt bonds has declined somewhat in recent months, new bond issuance has remained greatly reduced. During the quarter ended October 31, 1994, only $32 billion in long-term tax-exempt securities were issued, a decline of over 50% versus the October 31, 1993 quarter. Similarly, for the six months ended October 31, 1994, only $75 billion in municipal securities were underwritten, a decline of over 50% versus the comparable period a year earlier. This reduction in issuance in recent quarters has allowed the municipal bond market to react to both the decline in investor demand and the rise in fixed-income yields in a more orderly fashion than in similar situations in the past, particularly during 1987. Long-term tax-exempt revenue bonds currently yield approximately 7%, or almost 11.5% on an after-tax equivalent basis, to an investor in the 39.6% Federal income tax bracket. As inflation has only marginally increased in the past year, real tax-exempt interest rates have risen dramatically. The Federal Reserve Board appears committed to maintaining inflation at or below its current levels. Indeed, most forecasts expect inflation to remain in its present range of 3%--4% throughout 1995 and, potentially, for the remainder of the 1990s. Real after-tax equivalent interest rates exceeding 7% represent historically attractive municipal investments for long-term investors. Federal Reserve Board actions taken thus far have yet to fully impact US domestic growth and expected additional actions should promote only a modest economic expansion within a benign inflationary context beginning sometime early in 1995. Within such an environment, it is unlikely that tax-exempt interest rates will remain at their current attractive levels. Tax-exempt bond issuance is unlikely to return to the historic high levels seen in 1992 and 1993, while investor demand should return as markets stabilize. As we have discussed in earlier reports, the total number of tax-exempt bonds outstanding is scheduled to decline dramatically in 1994 and 1995 as a result of both regular bond maturities and early redemptions. Investors seeking tax-advantaged issues are likely to find it very difficult to obtain currently available tax-exempt yields as the current supply/demand balance is unlikely to be maintained in the coming quarters. Portfolio Strategy During the beginning of the fourth quarter of 1993, as long-term interest rates declined to cyclical lows, we increased the Fund's cash position to take advantage of the potential for a reversal in the event of a stronger-than-anticipated economic recovery. As the first quarter of 1994 unfolded, it appeared that the latter scenario would take place. In fact, tax-exempt interest rates increased from 5.6% at year-end to 6.4% by the end of the quarter. During this period, we continued to raise cash reserves by selling discounted holdings and purchasing higher coupon, shorter maturity bonds. During the second quarter of 1994, the municipal market was relatively stable, although a brief decline in interest rates in May gave us an opportunity to continue our strategy of switching to higher coupon, shorter maturity bonds. We increased the Fund's cash position at the end of the October quarter in anticipation of a surge in issuance pending the state legislature's delayed passage of the annual budget. Issuance did surge at the start of the third quarter but the increase was short lived. Recently we have maintained a relatively low cash position of about 7% of net assets for two reasons. First, the decline in new issuance has been dramatic both for the overall municipal market and especially for the New York market, which declined by 43%. As anticipated, there was a surge of volume when the state legislature passed the annual budget on June 8 of this year. We also anticipated a more severe decline in issuance in the third quarter of 1994. For the three-month period ended September 30, 1994, volume declined over 50% from the prior year. The other reason for a relatively low cash position is the steepness of the yield curve. With short-term interest rates at 3.00% for one-month commercial paper and long-term interest rates in excess of 6.50%, we believe it is beneficial to maintain longer-term investments for income purposes. To offset market volatility, we have only added holdings in the 15-year maturity range. We expect these bonds to be less volatile than the typical 30-year maturities purchased in the past. Our focus for the past year was to maintain an attractive yield income for Common Stock shareholders. By keeping our cash position at lower levels and by purchasing higher coupon, shorter maturity issues, we were able to do so. Sincerely, (Arthur Zeikel) Arthur Zeikel President (Vincent R. Giordano) Vincent R. Giordano Vice President and Portfolio Manager December 7, 1994 THE BENEFITS AND RISKS OF LEVERAGING MuniYield New York 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. In this case, the dividends paid to Preferred Stock shareholders are significantly lower than the income earned on the fund's long-term investments, and therefore the Common Stock shareholders are the beneficiaries of the incremental yield. However, if short-term interest rates rise, narrowing the differential between short-term and long-term interest rates, the incremental yield pick-up on the Common Stock will be reduced. At the same time, the market value of the fund's Common Stock (that is, its price as listed on the New York Stock Exchange) may, as a result, decline. Furthermore, if long- term interest rates rise, the Common Stock's net asset value will reflect the full decline in the price of the portfolio's investments, since the value of the fund's Preferred Stock does not fluctuate. In addition to the decline in net asset value, the market value of the fund's Common Stock may also decline. PORTFOLIO ABBREVIATIONS To simplify the listings of New York MuniYield Insured Fund Inc.'s portfolio holings in the Schedule of Investments, we have abbreviated the names of many of the securites according to the list at right. AMT Alternative Minimum Tax (subject to) COP Certificates of Participation GO General Obligation Bonds HFA Housing Finance Authority IDA Industrial Development Authority IDR Industrial Development Revenue Bonds PCR Pollution Control Revenue Bonds UT Unlimited Tax VRDN Variable Rate Demand Notes SCHEDULE OF INVESTMENTS (in Thousands)
S&P Moody's Face Value Ratings Ratings Amount Issue (Note 1a) New York--96.2% Babylon, New York, IDA, Resource Recovery Revenue Bonds (Ogden Martin Systems): BBB+ Baa1 $ 4,940 Series A, 8.50% due 1/01/2019 $ 5,324 BBB+ Baa1 1,000 Series B, 8.50% due 1/01/2019 1,078 AA A1 2,000 Battery Park City Authority, New York, Revenue Refunding Bonds (Senior Lien), Series A, 5.70% due 11/01/2020 1,699 AAA Aaa 3,905 Broome County, New York, COP, Public Safety Facility, 5.25% due 4/01/2022 (d) 3,132 AAA Aaa 1,880 Clifton Park, New York, Water Authority, Water System Revenue Refunding Bonds, 5% due 10/01/2018 (c) 1,479 AAA Aaa 1,000 Metropolitan Transportation Authority, New York, Commuter Facilities Revenue Refunding Bonds, Series B, 6.25% due 7/01/2017 (d) 952 Metropolitan Transportation Authority, New York, Transportation Facilities Revenue Bonds, Series J (c): AAA Aaa 4,000 6.375% due 7/01/2010 3,986 AAA Aaa 25,620 6.50% due 7/01/2018 24,953 Monroe County, New York, GO: AAA Aaa 2,825 6.10% due 3/01/2010 (d) 2,783 AAA Aaa 2,175 6.10% due 3/01/2011 (d) 2,126 AAA Aaa 1,850 6.10% due 3/01/2012 (d) 1,796 AAA Aaa 1,000 UT, 5.10% due 6/01/2009 (b) 869 AAA Aaa 2,995 New York City, New York, Educational Construction Revenue Bonds, Series A, 6.25% due 10/01/2003 (d) 3,073 New York City, New York, GO, UT: A- Aaa 2,485 Refunding, Series A, 8% due 8/15/2001 (e) 2,859 AAA Aaa 16,080 Refunding, Series C, Subseries C-1, 6.625% due 8/01/2002 (d)(e) 17,155 A- Baa1 1,650 Series C, Subseries C-1, 7.50% due 8/01/2021 1,700 AAA Aaa 1,665 Series I, 7.25% due 8/15/2015 (b) 1,721 A1+ NR* 1,000 New York City, New York, IDA, IDR (Japan Airlines Company Ltd. Project), VRDN, AMT, 3.75% due 11/01/2015 (a) 1,000
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
S&P Moody's Face Value Ratings Ratings Amount Issue (Note 1a) New York (continued) New York City, New York, Municipal Water Finance Authority, Water and Sewer System Revenue Bonds: AAA Aaa $ 2,000 Refunding, Series A, 5.75% due 6/15/2018 (c) $ 1,742 AAA Aaa 1,285 Series A, 7.25% due 6/15/2000 (d)(e) 1,413 AAA Aaa 2,520 Series A, 7% due 6/15/2001 (b)(e) 2,745 AAA Aaa 2,500 Series A, 6.75% due 6/15/2006 (b) 2,584 AAA Aaa 2,480 Series A, 7% due 6/15/2015 (b) 2,518 AAA Aaa 7,500 Series A, 7% due 6/15/2015 (c) 7,836 AAA Aaa 2,000 Series A, 6.75% due 6/15/2016 (c) 1,993 AAA Aaa 1,000 Series C, 7% due 6/15/2001 (c)(e) 1,093 A1+ VMIG1 9,000 New York City, New York, Trust for Cultural Resources Revenue Bonds (Soloman R. Guggenheim), VRDN, Series B, 3.20% due 12/01/2015 (a) 9,000 New York State Dormitory Authority Revenue Bonds: AAA Aaa 4,400 (City University System), Series C, 7.50% due 7/01/2010 (c) 4,833 AAA Aaa 7,070 (City University System), Series C, 7% due 7/01/2014 (c) 7,182 AAA Aaa 2,000 (Colgate University), 5.625% due 7/01/2023 (c) 1,723 AAA Aaa 3,990 (College and University Educational), 6.30% due 7/01/2002 (d) 4,122 A1+ VMIG1 3,500 (Cornell University), VRDN, Series B, 3.20% due 7/01/2025 (a) 3,500 BBB+ Baa1 5,215 Refunding (University Educational Facilities), Series B, 7.375% due 5/15/2014 5,328 NR* VMIG1 3,200 (Saint Francis Center at the Knolls), VRDN, 3.55% due 7/01/2023 (a) 3,200 AAA Aaa 3,000 (University of Rochester), 6.50% due 7/01/2009 (d) 3,011 AAA Aaa 7,500 New York State Energy Research and Development Authority, Electric Facilities Revenue Bonds (Consolidated Edison Company, Inc.), AMT, Series A, 6.75% due l/15/2027 (d) 7,392 New York State Energy Research and Development Authority, Gas Facilities Revenue Bonds (Brooklyn Union Gas Company), AMT (d): AAA Aaa 3,000 Series A, 6.75% due 2/01/2024 2,958 AAA Aaa 11,535 Series B, 6.75% due 2/01/2024 11,374 AAA Aaa 5,000 New York State Energy Research and Development Authority, PCR, Refunding (Niagara Mohawk Corporation Project), Series A, 6.625% due 10/01/2013 (c) 5,008 A Aa 3,000 New York State Environmental Facilities Corporation, PCR (Water Revolving Fund), Series E, 6.50% due 6/15/2014 2,935 BBB Baa1 1,585 New York State, HFA, Service Contract Obligation Revenue Bonds, Series D, 5.375% due 3/15/2011 1,353 A A 5,000 New York State Local Government Assistance Corporation, Series B, 6% due 4/01/2012 4,648 New York State Medical Care Facilities Finance Agency Revenue Bonds: AAA Aaa 8,335 (Mental Health Services), Series A, 6.375% due 8/15/2017 (c) 8,038 BBB+ Baa1 420 (Mental Health Services), Series A, 7.50% due 2/15/2021 438 AAA Aaa 1,230 (Mental Health Services), Series C, 7.30% due 8/15/2001 (e) 1,371 BBB+ Baa1 420 (Mental Health Services), Series C, 7.30% due 2/15/2021 433 AAA Aaa 10,000 Refunding (Hospital and Nursing Home), Series C, 6.375% due 8/15/2029 (d) 9,550 BBB Baa 5,000 (Security Hospital), Series A, 7.40% due 8/15/2021 5,182
SCHEDULE OF INVESTMENTS (concluded) (in Thousands)
S&P Moody's Face Value Ratings Ratings Amount Issue (Note 1a) New York (concluded) NR* Aa $ 4,220 New York State Mortgage Agency, Homeowner Mortgage Revenue Bonds, Series 29-A, 5.25% due 4/01/2015 $ 3,483 AAA Aaa 5,000 New York State Power Authority, General Purpose and Revenue Refunding Bonds, Series Z, 6.50% due l/01/2019 (b) 4,875 AAA Aaa 8,000 New York State Thruway Authority Revenue Bonds (Highway and Bridge Trust Fund ), Series B, UT, 6.25% due 4/01/2012 (c) 7,801 AAA Aaa 4,000 North Hempstead, New York, Solid Waste Management Authority, Revenue Refunding Bonds, Series B, 5% due 2/01/2012 (d) 3,275 Port Authority of New York and New Jersey, Consolidated Revenue Bonds: AAA Aaa 2,000 AMT, 73rd Series, 6.75% due 4/15/2026 (d) 2,006 AAA Aaa 2,000 71st Series, 6.50% due 1/15/2026 (c) 1,955 A1+ VMIG1 1,100 Port Authority of New York and New Jersey, Special Obligation Revenue Bonds (Versatile Structure Obligations), VRDN, Series 1, 3.50% due 8/01/2028 (a) 1,100 AAA Aaa 5,700 Syracuse, New York, COP (Syracuse Hancock International Airport), AMT, 6.50% due 1/01/2017 (c) 5,518 A1+ VMIG1 1,700 Syracuse, New York, IDA, Multi-Modal Civic Facilities Revenue Bonds (Syracuse University Project), VRDN, 3.20% due 3/01/2023 (a) 1,700 Triborough Bridge and Tunnel Authority, New York, Special Obligation Revenue Refunding Bonds: AAA Aaa 4,500 Series A, 6.625% due 1/01/2017 (d) 4,481 AAA Aaa 1,000 Series B, 6.875% due 1/01/2015 (b) 1,016 AAA Aaa 6,440 Series B, 6.875% due 1/01/2015 (c) 6,546 Total Investments (Cost--$248,177)--96.2% 245,944 Other Assets Less Liabilities--3.8% 9,726 -------- Net Assets--100.0% $255,670 ======== *Not Rated. (a)The interest rate is subject to change periodically based upon prevailing market rates. The interest rate shown is the rate in effect at October 31, 1994. (b)AMBAC Insured. (c)FGIC Insured. (d)MBIA Insured. (e)Prerefunded. Ratings of issues shown have not been audited by Deloitte & Touche LLP. See Notes to Financial Statements.
FINANCIAL INFORMATION Statement of Assets, Liabilities and Capital as of October 31, 1994
Assets: Investments, at value (identified cost--$248,176,559) (Note 1a) $245,943,845 Cash 9,420 Receivables: Securities sold $ 6,308,682 Interest 4,177,441 10,486,123 ------------ Deferred organization expenses (Note 1e) 14,748 Prepaid expenses and other assets 23,470 ------------ Total assets 256,477,606 ------------ Liabilities: Payables: Dividends to shareholders (Note 1g) 591,546 Investment adviser (Note 2) 109,991 701,537 ------------ Accrued expenses and other liabilities 105,754 ------------ Total liabilities 807,291 ------------ Net Assets: Net assets $255,670,315 ============ Capital: Capital Stock (200,000,000 shares authorized) (Note 4): Preferred Stock, par value $.10 per share (1,700 shares of AMPS* issued and outstanding at $50,000 per share liquidation preference) $ 85,000,000 Common Stock, par value $.10 per share (12,046,743 shares issued and outstanding) $ 1,204,674 Paid-in capital in excess of par 168,007,202 Undistributed investment income--net 2,214,526 Undistributed realized capital gains on investments--net 1,476,627 Unrealized depreciation on investments--net (2,232,714) ------------ Total--Equivalent to $14.17 net asset value per share of Common Stock (market price--$12.25) 170,670,315 ------------ Total capital $255,670,315 ============ *Auction Market Preferred Stock. See Notes to Financial Statements.
FINANCIAL INFORMATION (continued) Statement of Operations
For the Year Ended October 31, 1994 Investment Interest and amortization of premium and discount earned $ 16,440,328 Income (Note 1d): Expenses: Investment advisory fees (Note 2) $ 1,371,532 Commission fees (Note 4) 212,747 Professional fees 77,901 Accounting services (Note 2) 56,861 Transfer agent fees 51,430 Printing and shareholder reports 29,794 Listing fees 25,475 Directors' fees and expenses 22,980 Custodian fees 21,558 Pricing fees 10,050 Amortization of organization expenses (Note 1e) 6,310 Other 35,281 ------------ Total expenses 1,921,919 ------------ Investment income--net 14,518,409 ------------ Realized & Realized gain on investments--net 1,476,631 Unrealized Change in unrealized appreciation/depreciation on investments--net (33,776,781) Gain (Loss) ------------ on Investments Net Decrease in Net Assets Resulting from Operations $(17,781,741) - --Net (Notes ============ 1d & 3): See Notes to Financial Statements.
FINANCIAL INFORMATION (continued) Statements of Changes in Net Assets
For the Year Ended October 31, Increase (Decrease) in Net Assets: 1994 1993 Operations: Investment income--net $ 14,518,409 $ 14,765,970 Realized gain on investments--net 1,476,631 684,053 Change in unrealized appreciation/depreciation on investments--net (33,776,781) 27,491,003 ------------ ------------ Net increase (decrease) in net assets resulting from operations (17,781,741) 42,941,026 ------------ ------------ Dividends & Investment income--net: Distributions to Common Stock (11,737,889) (11,932,621) Shareholders Preferred Stock (2,151,911) (2,207,569) (Note 1g): Realized gain on investments--net: Common Stock (558,029) -- Preferred Stock (98,090) -- ------------ ------------ Net decrease in net assets resulting from dividends and distributions to shareholders (14,545,919) (14,140,190) ------------ ------------ Capital Stock Value of shares issued to Common Stock shareholders in reinvestment Transactions of dividends -- 2,610,375 (Note 4): ------------ ------------ Net increase in net assets derived from stock capital transactions -- 2,610,375 ------------ ------------ Net Assets: Total increase (decrease) in net assets (32,327,660) 31,411,211 Beginning of year 287,997,975 256,586,764 ------------ ------------ End of year* $255,670,315 $287,997,975 ============ ============ *Undistributed investment income--net $ 2,214,526 $ 1,585,917 ============ ============ See Notes to Financial Statements.
FINANCIAL INFORMATION (concluded) Financial Highlights
For the Period The following per share data and ratios have been derived February 28, from information provided in the financial statements. For the Year Ended 1992++ to October 31, October 31, Increase (Decrease) in Net Asset Value: 1994 1993 1992 Per Share Net asset value, beginning of period $ 16.85 $ 14.45 $ 14.18 Operating ------------ ------------ ------------ Performance: Investment income--net 1.20 1.23 .75 Realized and unrealized gain (loss) on investments--net (2.67) 2.34 .36 ------------ ------------ ------------ Total from investment operations (1.47) 3.57 1.11 ------------ ------------ ------------ Less dividends and distributions to Common Stock shareholders: Investment income--net (.97) (.99) (.55) Realized gain on investments--net (.05) -- -- ------------ ------------ ------------ Total dividends and distributions to Common Stock shareholders (1.02) (.99) (.55) ------------ ------------ ------------ Capital charge resulting from issuance of Common Stock -- -- (.02) ------------ ------------ ------------ Effect of Preferred Stock activity: Dividends and distributions to Preferred Stock shareholders: Investment income--net (.18) (.18) (.12) Realized gain on investments--net (.01) -- -- Capital charge resulting from issuance of Preferred Stock -- -- (.15) ------------ ------------ ------------ Total effect of Preferred Stock activity (.19) (.18) (.27) ------------ ------------ ------------ Net asset value, end of period $ 14.17 $ 16.85 $ 14.45 ============ ============ ============ Market price per share, end of period $ 12.25 $ 16.50 $ 14.75 ============ ============ ============ Total Based on market price per share (20.49%) 19.04% 2.05%+++ Investment ============ ============ ============ Return:** Based on net asset value per share (9.94%) 24.09% 5.76%+++ ============ ============ ============ Ratios to Expenses, net of reimbursement .70% .69% .54%* Average ============ ============ ============ Net Assets:*** Expenses .70% .69% .71%* ============ ============ ============ Investment income--net 5.28% 5.36% 5.56%* ============ ============ ============ Supplemental Net assets, net of Preferred Stock, end of period Data: (in thousands) $ 170,670 $ 202,998 $ 171,587 ============ ============ ============ Preferred Stock outstanding, end of period (in thousands) $ 85,000 $ 85,000 $ 85,000 ============ ============ ============ Portfolio turnover 41.26% 1.63% 18.10% ============ ============ ============ Dividends Per Series A--Investment income--net $ 1,346 $ 1,276 $ 884 Share on Series B--Investment income--net 1,186 1,301 851 Preferred Stock Outstanding: *Annualized. **Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, result in substantially different returns. Total investment returns exclude the effects of sales loads. ***Do not reflect the effect of dividends to Preferred Stock shareholders. ++Commencement of Operations. +++Aggregate total investment return. See Notes to Financial Statements.
NOTES TO FINANCIAL STATEMENTS 1. Significant Accounting Policies: MuniYield New York 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 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 MYN. 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, which are traded on exchanges, are valued at their closing prices as of the close of such exchanges. Options, which are traded on exchanges, are valued at their last sale price as of the close of such exchanges or, lacking any sales, at the last available bid price. Securities with remaining maturities of sixty days or less are valued at amortized cost, which approximates market value. Securities for which market quotations are not readily available are valued at their fair value as determined in good faith by or under the direction of the Board of Directors of the Fund. (b) 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. (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)Non-income producing investments--Written and purchased options are non-income producing investments. (g)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"). Effective January 1, 1994, the investment advisory business of FAM was reorganized from a corporation to a limited partnership. Both prior to and after the reorganization, ultimate control of FAM was vested with Merrill Lynch & Co., Inc. ("ML & Co."). The general partner of FAM is Princeton Services, Inc. ("PSI"), an indirect wholly-owned subsidiary of ML & Co. The limited partners are ML & Co. and Fund Asset Management, Inc. ("FAMI"), which is also an indirect wholly-owned subsidiary of ML & Co. FAM is responsible for the management of the Fund's portfolio and provides the necessary personnel, facilities, equipment and certain other services necessary to the operations of the Fund. For such services, the Fund pays a monthly fee at an annual rate of 0.50% of the Fund's average weekly net assets. Accounting services are provided to the Fund by FAM at cost. Certain officers and/or directors of the Fund are officers and/or directors of FAM, FAMI, PSI, Merrill Lynch, Pierce, Fenner & Smith Inc. ("MLPF&S"), and/or ML & Co. NOTES TO FINANCIAL STATEMENTS (concluded) 3. Investments: Purchases and sales of investments, excluding short-term securities, for the year ended October 31, 1994 were $107,938,577 and $132,068,905, respectively. Net realized and unrealized gains (losses) as of October 31, 1994 were as follows: Realized Unrealized Gains Losses Long-term investments $ 1,170,815 $ (2,232,714) Short-term investments 112 -- Financial futures contracts 305,704 -- ------------ ------------ Total $ 1,476,631 $ (2,232,714) ============ ============ As of October 31,1994, net unrealized depreciation for Federal income tax purposes aggregated $2,232,714, of which $2,957,889 related to appreciated securities and $5,190,603 related to depreciated securities. The aggregate cost of investments at October 31, 1994 for Federal income tax purposes was $248,176,559. 4. Capital Stock Transactions: The Fund is authorized to issue 200,000,000 shares of capital stock, including Preferred Stock, par value $.10 per share, all of which were initially classified as Common Stock. The Board of Directors is authorized, however, to reclassify any unissued shares of capital stock without approval of the holders of Common Stock. Common Stock For the year ended October 31, 1994, shares issued and outstanding remained constant at 12,046,743. At October 31,1994, total paid-in capital amounted to $169,211,876. Preferred Stock Auction Market Preferred Stock ("AMPS") are shares of Preferred Stock of the Fund that entitle their holders to receive cash dividends at an annual rate that may vary for the successive dividend periods. The yields in effect at October 31, 1994 were as follows: Series A, 3.14% and Series B, 2.75%. For the year ended October 31, 1994, there were 1,700 AMPS shares authorized, issued and outstanding with a liquidation preference of $50,000 per share, plus accumulated and unpaid dividends of $51,212. Effective December 1, 1994, as a result of a two-for-one stock split, there will be 3,400 AMPS shares 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 year ended October 31, 1994, MLPF&S, an affiliate of FAMI, earned $179,912 as commissions. 5. Subsequent Event: On November 8, 1994, the Fund's Board of Directors declared an ordinary income dividend to Common Stock shareholders in the amount of $0.081534 per share, payable on November 29, 1994 to shareholders of record as of November 18, 1994. INDEPENDENT AUDITORS' REPORT The Board of Directors and Shareholders of MuniYield New York Insured Fund, Inc.: We have audited the accompanying statement of assets, liabilities and capital, including the schedule of investments, of MuniYield New York Insured Fund, Inc. as of October 31, 1994, the related statements of operations for the year then ended and changes in net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the two-year period then ended and the period February 28, 1992 (commencement of operations) to October 31, 1992. These financial statements and the financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and the financial highlights based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and the financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned at October 31, 1994 by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such financial statements and financial highlights present fairly, in all material respects, the financial position of MuniYield New York Insured Fund, Inc. as of October 31, 1994, the results of its operations, the changes in its net assets, and the financial highlights for the respective stated periods in conformity with generally accepted accounting principles. Deloitte & Touche LLP Princeton, New Jersey December 5, 1994 IMPORTANT TAX INFORMATION (unaudited) All of the net investment income distributions paid monthly by MuniYield New York Insured Fund, Inc. during its taxable year ended October 31, 1994 qualify as tax-exempt interest dividends for Federal income tax purposes. Additionally, the following table summarizes the per share capital gains distributions paid by the Fund during the year. Payable Short-Term Long-Term Date Capital Gains Capital Gains Common Stock Shareholders 12/30/93 -- $ 0.046322 Preferred Stock Shareholders: Series A 11/30/93 -- $57.17 Series B 11/23/93 -- $42.23 11/30/93 -- $16.00 Please retain this information for your records.
PER SHARE INFORMATION (unaudited) Per Share Selected Quarterly Financial Data*
Net Realized Unrealized Dividends/Distributions Investment Gains Gains Net Investment Income Capital Gains For the Quarter Income (Losses) (Losses) Common Preferred Common Preferred November 1, 1992 to January 31, 1993 $.30 -- $ .78 $.25 $.05 -- -- February 1, 1993 to April 30, 1993 .31 -- .67 .25 .04 -- -- May 1, 1993 to July 31, 1993 .31 -- .32 .24 .04 -- -- August 1, 1993 to October 31, 1993 .31 $ .06 .51 .25 .05 -- -- November 1, 1993 to January 31, 1994 .31 .45 (.20) .24 .03 $.05 $.01 February 1, 1994 to April 30, 1994 .29 .05 (2.13) .24 .04 -- -- May 1, 1994 to July 31, 1994 .30 -- .23 .24 .05 -- -- August 1, 1994 to October 31, 1994 .30 (.37) (.70) .25 .06 -- -- Net Asset Value Market Price** For the Quarter High Low High Low Volume*** November 1, 1992 to January 31, 1993 $15.23 $14.45 $15.625 $14.25 861 February 1, 1993 to April 30, 1993 16.33 15.22 16.25 15.375 1,442 May 1, 1993 to July 31, 1993 16.48 15.94 16.50 15.375 1,019 August 1, 1993 to October 31, 1993 17.15 16.07 17.125 16.125 1,014 November 1, 1993 to January 31, 1994 17.07 16.38 16.75 15.25 870 February 1, 1994 to April 30, 1994 17.02 14.46 16.875 14.125 1,048 May 1, 1994 to July 31, 1994 15.67 14.70 15.25 14.00 853 August 1, 1994 to October 31, 1994 15.28 14.16 14.75 12.375 1,227 *Calculations are based upon shares of Common Stock outstanding at the end of each quarter. **As reported in the consolidated transaction reporting system. ***In thousands.
OFFICERS AND DIRECTORS Arthur Zeikel, President and Director Kenneth S. Axelson, Director Herbert I. London, Director Robert R. Martin, Director Joseph L. May, Director Andre F. Perold, Director 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 The Bank of New York 90 Washington Street New York, New York 10286 Transfer Agents Common Stock: The Bank of New York 101 Barclay Street New York, New York 10286 Preferred Stock: IBJ Schroder Bank & Trust Company One State Street New York, New York 10004 NYSE Symbol MYN -----END PRIVACY-ENHANCED MESSAGE-----