-----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, WKlLBtNBgYtsKij62HyoiH2RJlvwgmvkwC5z0D7e234/URTebGY8abe/tj8R8tHt qkIyf71iw+5L+w7yri3J9g== 0000900092-95-000182.txt : 19950620 0000900092-95-000182.hdr.sgml : 19950620 ACCESSION NUMBER: 0000900092-95-000182 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19950430 FILED AS OF DATE: 19950619 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: 95547889 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 SEMI-ANNUAL REPORT MUNIYIELD NEW YORK INSURED FUND, INC. FUND LOGO Semi-Annual Report April 30, 1995 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 six months ended April 30, 1995, the Common Stock of MuniYield New York Insured Fund, Inc. earned $0.455 per share income dividends, which included earned and unpaid dividends of $0.739. This represents a net annualized yield of 6.17%, based on a month-end net asset value of $14.85 per share. Over the same period, the total investment return on the Fund's Common Stock was +9.34%, based on a change in per share net asset value from $14.17 to $14.85, and assuming reinvestment of $0.462 per share income dividends and $0.104 per share capital gains distributions. For the six-month period ended April 30, 1995, the Fund's Auction Market Preferred Stock had an average yield of 3.97% for Series A and 4.01% for Series B. 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. 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. 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 taxation 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 We continued to take advantage of the declining interest rate environment by adding lower coupon, longer maturity issues to the Fund's portfolio. As interest rates continued to decline throughout the April quarter, these holdings appreciated accordingly. Evidence of a slowing economy caused a general decline in interest rates. Many of the Government's recent data releases indicate that the Federal Reserve Board's monetary policy has slowed economic growth. Along with the apparent slowing of growth, there was no significant increase in inflationary pressures at the retail level, indicating that the Federal Reserve Board may have mastered a soft landing for the domestic economy. Other world economies also kept prices under control in an effort to maintain their own growth. With that as a backdrop, investors believe additional interest rate increases may not be needed. Economic data for the second quarter of 1995 will give us a better indication as to whether the Federal Reserve Board was successful. The New York municipal market performed as well as the national market in spite of the absence of a new state budget. Negotiations continue between Governor Pataki and the legislature, and passage of a new budget is expected soon. Once the budget is ratified, we expect a surge of issuance. Since issuance in New York is more than 50% below 1994, this supply should present no problem for the municipal market as demand has far exceeded supply. In Conclusion We appreciate your ongoing interest in MuniYield New York Insured Fund, Inc., and we look forward to assisting you with your financial needs in the months and years to come. Sincerely, (Arthur Zeikel) Arthur Zeikel President (Vincent R. Giordano) Vincent R. Giordano Vice President and Portfolio Manager May 31, 1995 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. Of course, increases in short-term interest rates would reduce (and even eliminate) the dividends on the Common Stock. In this case, the dividends paid to Preferred Stock shareholders are significantly lower than the income earned on the fund's long-term investments, and therefore the Common Stock shareholders are the beneficiaries of the incremental yield. However, if short-term interest rates rise, narrowing the differential between short-term and long-term interest rates, the incremental yield pick-up on the Common Stock will be reduced or eliminated completely. At the same time, the market value 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 MuniYield New York Insured Fund, Inc.'s portfolio holdings in the Schedule of Investments, we have abbreviated the names of many of the securities according to the list below and at right. AMT Alternative Minimum Tax (subject to) BAN Bond Anticipation Notes COP Certificates of Participation GO General Obligation Bonds HFA Housing Finance Agency 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--95.0% Babylon, New York, IDA, Resource Recovery Revenue Bonds (Ogden Martin Systems): BBB+ Baa1 $ 4,940 Series A, 8.50% due 1/01/2019 $ 5,375 BBB+ Baa1 1,000 Series B, 8.50% due 1/01/2019 1,088 AAA Aaa 1,000 Metropolitan Transportation Authority, New York, Commuter Facilities Revenue Refunding Refunding Bonds, Series B, 6.25% due 7/01/2017 (d) 1,007 Metropolitan Transportation Authority, New York, Transportation Facilities Revenue Bonds, Series J (c): AAA Aaa 4,000 6.375% due 7/01/2010 4,138 AAA Aaa 20,620 6.50% due 7/01/2018 21,249 Monroe County, New York, GO (d): AAA Aaa 2,825 6.10% due 3/01/2010 2,920 AAA Aaa 2,175 6.10% due 3/01/2011 2,241 AAA Aaa 1,850 6.10% due 3/01/2012 1,902 A1+ NR* 800 Nassau County, New York, IDA, Civic Facilities Revenue Bonds (Cold Spring Harbor Laboratory Project), VRDN, 4.90% due 7/01/2019 (a) 800 New York City, New York, GO, UT: A- Baa1 1,650 Series C, Sub-series C-1, 7.50% due 8/01/2021 1,754 AAA Aaa 1,665 Series I, 7.25% due 8/15/2015 (b) 1,785 AAA Aaa 6,745 New York City, New York, IDA, Civic Facilities Revenue Bonds (USTA National Tennis Center Project), Series P, 6.50% due 11/15/2009 (e) 7,086 A1+ NR* 1,100 New York City, New York, IDA, IDR (Japan Airlines Company Ltd. Project), VRDN, AMT, 5.25% due 11/01/2015 (a) 1,100 New York City, New York, Municipal Water Finance Authority, Water and Sewer System Revenue Bonds: AAA Aaa 2,480 Series A, 7% due 6/15/2015 (b) 2,676 AAA Aaa 7,500 Series A, 7% due 6/15/2015 (c) 8,128 AAA Aaa 2,000 Series A, 6.75% due 6/15/2016 (c) 2,119 AAA Aaa 5,000 Series B, 5.50% due 6/15/2019 (d) 4,629
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
S&P Moody's Face Value Ratings Ratings Amount Issue (Note 1a) New York (continued) New York State Dormitory Authority Revenue Bonds: AAA Aaa $ 4,400 (City University System), Series C, 7.50% due 7/01/2010 (c) $ 5,167 AAA Aaa 7,070 (City University System), Series C, 7% due 7/01/2014 (c) 7,631 A1+ VMIG1++ 500 (Cornell University), VRDN, Series B, 4.85% due 7/01/2025 (a) 500 AAA Aaa 3,105 (Mt. Sinai School of Medicine), Series A, 5% due 7/01/2011 (d) 2,813 AAA Aaa 3,000 (University of Rochester), 6.50% due 7/01/2009 (d) 3,134 AAA Aaa 10,500 New York State Energy Research and Development Authority, Electric Facilities Revenue Bonds (Consolidated Edison Company, Inc.), AMT, Series A, 6.75% due 1/15/2027 (d) 10,758 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 3,123 AAA Aaa 11,535 Series B, 6.75% due 2/01/2024 12,018 New York State Energy Research and Development Authority, PCR (Niagara Mohawk Corporation Project): AAA Aaa 5,000 Refunding, Series A, 6.625% due 10/01/2013 (c) 5,238 A1+ NR* 1,000 VRDN, AMT, Series B, 5.40% due 7/01/2027 (a) 1,000 NR* NR* 700 VRDN, Series A, 4.90% due 3/01/2027 (a) 700 AAA Aaa 5,500 New York State Environmental Facilities Corporation, Water Facilities Revenue Bonds (Spring Valley Water Company, Inc. Project), AMT, Series A, 5.65% due 11/01/2023 (b) 4,996 BBB Baa1 1,585 New York State, HFA, Service Contract Obligation Revenue Bonds, Series D, 5.375% due 3/15/2011 1,428 New York State Local Government Assistance Corporation: A A 5,000 Refunding, Series E, 5% due 4/01/2021 4,214 A A 6,000 Series D, 5% due 4/01/2023 4,974 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) 8,474 AAA Aaa 7,250 (New York Hospital Mortgage), Series A, 6.80% due 8/15/2024 (b) 7,728 AAA Aaa 10,000 Refunding (Hospital and Nursing Home), Series C, 6.375% due 8/15/2029 (d) 10,079 AAA Aaa 5,000 Refunding (Mental Health Services), Series F, 5.25% due 2/15/2019 (d) 4,390 BBB Baa 5,000 (Security Hospital), Series A, 7.40% due 8/15/2021 5,146 AAA Aaa 2,000 New York State Mortgage Agency Revenue Bonds, Series 41-A, 6.45% due 10/01/2014 (d) 2,039 New York State Power Authority, General Purpose and Revenue Refunding Bonds: AAA Aaa 3,475 Series CC, 5.125% due 1/01/2010(b) 3,206 AA- Aa 1,000 Series CC, 5.125% due 1/01/2010 920 AAA Aaa 5,000 Series Z, 6.50% due 1/01/2019(b) 5,153 AAA Aaa 6,000 New York State Thruway Authority, General Revenue Bonds, Series B, 5% due 1/01/2020 (d) 5,116
SCHEDULE OF INVESTMENTS (concluded) (in Thousands)
S&P Moody's Face Value Ratings Ratings Amount Issue (Note 1a) New York (concluded) AAA Aaa $ 8,000 New York State Thruway Authority Revenue Bonds (Highway and Bridge Trust Fund), UT, Series B, 6.25% due 4/01/2012 (c) $ 8,164 AAA Aaa 2,250 New York State Urban Development Corporation Revenue Bonds (Higher Education Technology Grants), 5.75% due 4/01/2015 (d) 2,142 New York State Urban Development Corporation, Revenue Refunding Bonds (Correctional Facilities): AAA Aaa 2,700 5.375% due 1/01/2012 (d) 2,521 BBB Baa1 3,125 5.50% due 1/01/2015 2,765 AAA Aaa 3,000 Series A, 6.50% due 1/01/2011 (e) 3,214 AAA Aaa 7,500 Series A, 5% due 1/01/2017 (b) 6,482 Port Authority of New York and New Jersey, Consolidated Revenue Bonds: AAA Aaa 1,500 65th Series, 7% due 9/01/2024 (c) 1,568 AA- A1 5,000 69th Series, 7.125% due 6/01/2025 5,365 AAA Aaa 2,000 71st Series, 6.50% due 1/15/2026 (c) 2,062 AA- A1 5,000 72nd Series, 7.35% due 10/01/2027 5,523 AAA Aaa 2,000 AMT, 73rd Series, 6.75% due 4/15/2026 (d) 2,071 NR* MIG1++ 300 Saranac, New York, Central School District Revenue Bonds, BAN, 5% due 6/30/1995 300 AAA Aaa 5,700 Syracuse, New York, COP (Syracuse Hancock International Airport), AMT, 6.50% due 1/01/2017 (c) 5,813 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) 4,706 AAA Aaa 1,000 Series B, 6.875% due 1/01/2015 (b) 1,068 AAA Aaa 6,440 Series B, 6.875% due 1/01/2015 (c) 6,879 Total Investments (Cost--$241,767)--95.0% 250,585 Other Assets Less Liabilities--5.0% 13,263 -------- Net Assets--100.0% $263,848 ======== (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)FGIC Insured. (d)MBIA Insured. (e)FSA Insured. *Not Rated. ++Highest short-term rating by Moody's Investors Service, Inc. See Notes to Financial Statements.
FINANCIAL INFORMATION Statement of Assets, Liabilities and Capital as of April 30, 1995 Assets: Investments, at value (identified cost--$241,767,006) (Note 1a) $250,585,015 Cash 5,712,003 Receivables: Securities sold $ 6,320,974 Interest 4,324,396 10,645,370 ------------ Deferred organization expenses (Note 1e) 14,747 Prepaid expenses and other assets 23,470 ------------ Total assets 266,980,605 ------------ Liabilities: Payables: Securities purchased 2,536,697 Dividends to shareholders (Note 1f) 440,717 Investment adviser (Note 2) 102,527 3,079,941 ------------ Accrued expenses and other liabilities 52,767 ------------ Total liabilities 3,132,708 ------------ Net Assets: Net assets $263,847,897 ============ Capital: Capital Stock (200,000,000 shares authorized) (Note 4): Preferred Stock, par value $.10 per share (3,400 shares of AMPS* issued and outstanding at $25,000 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 2,245,091 Accumulated realized capital losses on investments--net (1,427,079) Unrealized appreciation on investments--net 8,818,009 ------------ Total--Equivalent to $14.85 net asset value per share of Common Stock (market price--$13.875) 178,847,897 ------------ Total capital $263,847,897 ============ *Auction Market Preferred Stock. See Notes to Financial Statements.
FINANCIAL INFORMATION (continued) Statement of Operations
For the Six Months Ended April 30, 1995 Investment Income Interest and amortization of premium and discount earned $ 7,949,607 (Note 1d): Expenses: Investment advisory fees (Note 2) $ 632,709 Commission fees (Note 4) 111,443 Professional fees 43,974 Transfer agent fees 26,863 Accounting services (Note 2) 23,087 Printing and shareholder reports 17,981 Listing fees 11,924 Directors' fees and expenses 11,408 Custodian fees 8,610 Pricing fees 4,536 Amortization of organization expenses (Note 1e) 3,096 Other 8,692 ------------ Total expenses 904,323 ------------ Investment income--net 7,045,284 ------------ Realized & Realized loss on investments--net (1,427,092) Unrealized Change in unrealized appreciation/depreciation on investments--net 11,050,723 Gain (Loss) ------------ on Investments Net Increase in Net Assets Resulting from Operations $ 16,668,915 - --Net (Notes 1b, ============ 1d & 3): See Notes to Financial Statements.
FINANCIAL INFORMATION (continued) Statements of Changes in Net Assets
For the Six For the Months Ended Year Ended April 30, October 31, Increase (Decrease) in Net Assets: 1995 1994 Operations: Investment income--net $ 7,045,284 $ 14,518,409 Realized gain (loss) on investments--net (1,427,092) 1,476,631 Change in unrealized appreciation/depreciation on investments --net 11,050,723 (33,776,781) ------------ ------------ Net increase (decrease) in net assets resulting from operations 16,668,915 (17,781,741) ------------ ------------ Dividends & Investment income--net: Distributions to Common Stock (5,569,149) (11,737,889) Shareholders Preferred Stock (1,445,570) (2,151,911) (Note 1f): Realized gain on investments--net: Common Stock (1,257,764) (558,029) Preferred Stock (218,850) (98,090) ------------ ------------ Net decrease in net assets resulting from dividends and distributions to shareholders (8,491,333) (14,545,919) ------------ ------------ Net Assets: Total increase (decrease) in net assets 8,177,582 (32,327,660) Beginning of period 255,670,315 287,997,975 ------------ ------------ End of period* $263,847,897 $255,670,315 ============ ============ *Undistributed investment income--net $ 2,245,091 $ 2,214,526 ============ ============ See Notes to Financial Statements.
FINANCIAL INFORMATION (concluded) Financial Highlights
For the For the Six Period The following per share data and ratios have been derived Months For the Feb. 28 from information provided in the financial statements. Ended Year Ended 1992++ to April 30, October 31, Oct. 31, Increase (Decrease) in Net Asset Value: 1995 1994 1993 1992 Per Share Net asset value, beginning of period $ 14.17 $ 16.85 $ 14.45 $ 14.18 Operating -------- -------- -------- -------- Performance: Investment income--net .58 1.20 1.23 .75 Realized and unrealized gain (loss) on investments-- net .80 (2.67) 2.34 .36 -------- -------- -------- -------- Total from investment operations 1.38 (1.47) 3.57 1.11 -------- -------- -------- -------- Less dividends and distributions to Common Stock shareholders: Investment income--net (.46) (.97) (.99) (.55) Realized gain on investments--net (.10) (.05) -- -- -------- -------- -------- -------- Total dividends and distributions to Common Stock shareholders (.56) (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 (.12) (.18) (.18) (.12) Realized gain on investments--net (.02) (.01) -- -- Capital charge resulting from issuance of Preferred Stock -- -- -- (.15) -------- -------- -------- -------- Total effect of Preferred Stock activity (.14) (.19) (.18) (.27) -------- -------- -------- -------- Net asset value, end of period $ 14.85 $ 14.17 $ 16.85 $ 14.45 ======== ======== ======== ======== Market price per share, end of period $ 13.875 $ 12.25 $ 16.50 $ 4.75 ======== ======== ======== ======== Total Investment Based on market price per share 18.21%+++ (20.49%) 19.04% 2.05%+++ Return:** ======== ======== ======== ======== Based on net asset value per share 9.34%+++ (9.94%) 24.09% 5.76%+++ ======== ======== ======== ======== Ratios to Average Expenses, net of reimbursement .72%* .70% .69% .54%* Net Assets:*** ======== ======== ======== ======== Expenses .72%* .70% .69% .71%* ======== ======== ======== ======== Investment income--net 5.58%* 5.28% 5.36% 5.56%* ======== ======== ======== ======== Supplemental Net assets, net of Preferred Stock, end of period Data: (in thousands) $178,848 $170,670 $202,998 $171,587 ======== ======== ======== ======== Preferred Stock outstanding, end of period (in thousands) $ 85,000 $ 85,000 $ 85,000 $ 85,000 ======== ======== ======== ======== Portfolio turnover 46.58% 41.26% 1.63% 18.10% ======== ======== ======== ======== Dividends Per Series A--Investment income--net $ 419 $ 673 $ 638 $ 442 Share on Series B--Investment income--net 432 593 651 426 Preferred Stock Outstanding:++++++ *Annualized. **Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Total investment returns exclude the effects of sales loads. ***Do not reflect the effect of dividends to Preferred Stock shareholders. ++Commencement of Operations. ++++The Fund's Preferred Stock was issued on September 16, 1992. ++++++Dividends per share have been adjusted to reflect a two-for- one stock split. +++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. These unaudited financial statements reflect all adjustments which are, in the opinion of management, necessary to a fair statement of the results for the interim period presented. All such adjustments are of a normal recurring nature. The Fund determines and makes available for publication the net asset value of its Common Stock on a weekly basis. The Fund's Common Stock is listed on the New York Stock Exchange under the symbol 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 and options thereon, which are traded on exchanges, are valued at their closing prices as of the close of such exchanges. Options, which are traded on exchanges, are valued at their last sale price as of the close of such exchanges or, lacking any sales, at the last available bid price. Securities with remaining maturities of sixty days or less are valued at amortized cost, which approximates market value. Securities for which market quotations are not readily available are valued at their fair value as determined in good faith by or under the direction of the Board of Directors of the Fund. (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. * 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. FAM is responsible for the management of the Fund's portfolio and provides the necessary personnel, facilities, equipment and certain other services necessary to the operations of the Fund. For such services, the Fund pays a monthly fee at an annual rate of 0.50% of the Fund's average weekly net assets. Accounting services are provided to the Fund by FAM at cost. Certain officers and/or directors of the Fund are officers and/or directors of FAM, PSI, Merrill Lynch, Pierce, Fenner & Smith Inc. ("MLPF&S"), and/or ML & Co. 3. Investments: Purchases and sales of investments, excluding short-term securities, for the six months ended April 30, 1995 were $120,963,711 and $112,375,047, respectively. Net realized and unrealized gains (losses) as of April 30, 1995 were as follows: Realized Unrealized Gains Gains (Losses) (Losses) Long-term investments $ 159,363 $8,818,018 Short-term investments (6,393) (9) Financial futures contracts (1,580,062) -- ----------- ---------- Total $(1,427,092) $8,818,009 =========== ========== As of April 30, 1995, net unrealized appreciation for Federal income tax purposes aggregated $8,818,009, of which $9,128,670 related to appreciated securities and $310,661 related to depreciated securities. The aggregate cost of investments at April 30, 1995 for Federal income tax purposes was $241,767,006. 4. Capital Stock Transactions: The Fund is authorized to issue 200,000,000 shares of capital stock, including Preferred Stock, par value $.10 per share, all of which were initially classified as Common Stock. The Board of Directors is authorized, however, to reclassify any unissued shares of capital stock without approval of the holders of Common Stock. Common Stock For the six months ended April 30, 1995, shares issued and outstanding remained constant at 12,046,743. At April 30, 1995, 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 April 30, 1995 were: Series A, 4.09% and Series B, 4.15%. A two-for-one stock split occurred on December 1, 1994. As a result, at April 30, 1995, there were 3,400 AMPS shares authorized, issued and outstanding with a liquidation preference of $25,000 per share, plus accumulated and unpaid dividends of $152,753. 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 $87,873 as commissions. 5. Subsequent Event: On May 9, 1995, the Fund's Board of Directors declared an ordinary income dividend to Common Stock shareholders in the amount of $0.073882 per share, payable on May 30, 1995 to shareholders of record as of May 19, 1995. PER SHARE INFORMATION Per Share Selected Quarterly Financial Data*
Dividends/Distributions Net Realized Unrealized Investment Gains Gains Net Investment Income Capital Gains For the Quarter Income (Losses) (Losses) Common Preferred Common Preferred 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 -- -- November 1, 1994 to January 31, 1995 .29 (.28) .63 .23 .06 .10 .02 February 1, 1995 to April 30, 1995 .29 .16 .29 .23 .06 -- -- Net Asset Value Market Price** For the Quarter High Low High Low Volume*** 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 1,104 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 November 1, 1994 to January 31, 1995 14.40 13.23 13.50 11.25 2,321 February 1, 1995 to April 30, 1995 15.21 14.43 14.25 13.00 972 *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 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-----