-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MExMmZEH52LIZXI6TouiewxfSyQPyOx0AL7g80unXhAswuePjane5/dZY8rQijzV tETpV6RsVz9AwJUBpw3z5w== 0000900092-04-000075.txt : 20040628 0000900092-04-000075.hdr.sgml : 20040628 20040625174512 ACCESSION NUMBER: 0000900092-04-000075 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040430 FILED AS OF DATE: 20040628 EFFECTIVENESS DATE: 20040628 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MUNIYIELD NEW JERSEY INSURED FUND INC CENTRAL INDEX KEY: 0000891037 IRS NUMBER: 223196059 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-07138 FILM NUMBER: 04882959 BUSINESS ADDRESS: STREET 1: 800 SCUDDERS MILL RD CITY: PLAINSBORO STATE: NJ ZIP: 08536 BUSINESS PHONE: 6092822800 MAIL ADDRESS: STREET 1: P O BOX 9011 CITY: PRINCETON STATE: NJ ZIP: 08543-9011 FORMER COMPANY: FORMER CONFORMED NAME: MUNIYIELD NEW JERSEY FUND II INC DATE OF NAME CHANGE: 19600201 N-CSR 1 ml7148.txt MUNIYIELD NEW JERSEY INSURED UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSRS CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-7138 Name of Fund: MuniYield New Jersey Insured Fund, Inc. Fund Address: P.O. Box 9011 Princeton, NJ 08543-9011 Name and address of agent for service: Terry K. Glenn, President, MuniYield New Jersey Insured Fund, Inc., 800 Scudders Mill Road, Plainsboro, NJ, 08536. Mailing address: P.O. Box 9011, Princeton, NJ, 08543-9011 Registrant's telephone number, including area code: (609) 282-2800 Date of fiscal year end: 10/31/04 Date of reporting period: 11/01/03 - 04/30/04 Item 1 - Report to Stockholders (BULL LOGO) Merrill Lynch Investment Managers www.mlim.ml.com MuniYield New Jersey Insured Fund, Inc. Semi-Annual Report April 30, 2004 MuniYield New Jersey Insured Fund, Inc. seeks to provide shareholders with as high a level of current income exempt from Federal income tax and New Jersey personal income taxes as is consistent with its investment policies and prudent investment management by investing primarily in a portfolio of long-term municipal obligations the interest on which, in the opinion of bond counsel to the issuer, is exempt from Federal income tax and New Jersey personal income taxes. This report, including the financial information herein, is transmitted to shareholders of MuniYield New Jersey Insured Fund, Inc. for their information. It is not a prospectus. Past performance results shown in this report should not be considered a representation of future performance. The Fund has leveraged its Common Stock and intends to remain leveraged by issuing Preferred Stock to provide the Common Stock shareholders with a potentially higher rate of return. Leverage creates risks for Common Stock shareholders, including the likelihood of greater volatility of net asset value and market price of shares of the Common Stock, and the risk that fluctuations in the short-term dividend rates of the Preferred Stock may affect the yield to Common Stock shareholders. Statements and other information herein are as dated and are subject to change. A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available (1) without charge, upon request, by calling toll-free 1-800-MER-FUND (1-800-637-3863; (2) on www.mutualfunds.ml.com; and (3) on the Securities and Exchange Commission's website at http://www.sec.gov. MuniYield New Jersey Insured Fund, Inc. Box 9011 Princeton, NJ 08543-9011 (GO PAPERLESS LOGO) It's Fast, Convenient, & Timely! To sign up today, go to www.icsdelivery.com/live. MuniYield New Jersey Insured Fund, Inc. The Benefits and Risks of Leveraging MuniYield New Jersey Insured Fund, Inc. utilizes leveraging to seek to enhance the yield and net asset value of its Common Stock. However, these objectives cannot be achieved in all interest rate environments. To leverage, the Fund issues Preferred Stock, which pays dividends at prevailing short-term interest rates, and invests the proceeds in long-term municipal bonds. The interest earned on these investments, net of dividends to Preferred Stock, is paid to Common Stock shareholders in the form of dividends, and the value of these portfolio holdings is reflected in the per share net asset value of the Fund's Common Stock. However, in order to benefit Common Stock shareholders, the yield curve must be positively sloped; that is, short-term interest rates must be lower than long-term interest rates. At the same time, a period of generally declining interest rates will benefit Common Stock shareholders. If either of these conditions change, then the risks of leveraging will begin to outweigh the benefits. To illustrate these concepts, assume a fund's Common Stock capitalization of $100 million and the issuance of Preferred Stock for an additional $50 million, creating a total value of $150 million available for investment in long-term municipal bonds. If prevailing short-term interest rates are approximately 3% and long-term interest rates are approximately 6%, the yield curve has a strongly positive slope. The fund pays dividends on the $50 million of Preferred Stock based on the lower short-term interest rates. At the same time, the fund's total portfolio of $150 million earns the income based on long-term interest rates. Of course, increases in short-term interest rates would reduce (and even eliminate) the dividends on the Common Stock. In this case, the dividends paid to Preferred Stock shareholders are significantly lower than the income earned on the fund's long-term investments, and therefore the Common Stock shareholders are the beneficiaries of the incremental yield. However, if short-term interest rates rise, narrowing the differential between short-term and long-term interest rates, the incremental yield pickup on the Common Stock will be reduced or eliminated completely. At the same time, the market value of the fund's Common Stock (that is, its price as listed on the New York Stock Exchange) may, as a result, decline. Furthermore, if long-term interest rates rise, the Common Stock's net asset value will reflect the full decline in the price of the portfolio's investments, since the value of the fund's Preferred Stock does not fluctuate. In addition to the decline in net asset value, the market value of the fund's Common Stock may also decline. As a part of its investment strategy, the Fund may invest in certain securities whose potential income return is inversely related to changes in a floating interest rate ("inverse floaters"). In general, income on inverse floaters will decrease when short-term interest rates increase and increase when short-term interest rates decrease. Investments in inverse floaters may be characterized as derivative securities and may subject the Fund to the risks of reduced or eliminated interest payments and losses of invested principal. In addition, inverse floaters have the effect of providing investment leverage and, as a result, the market value of such securities will generally be more volatile than that of fixed-rate, tax-exempt securities. To the extent the Fund invests in inverse floaters, the market value of the Fund's portfolio and the net asset value of the Fund's shares may also be more volatile than if the Fund did not invest in these securities. As of April 30, 2004, the percentage of the Fund's total net assets invested in inverse floaters was 15.55%. Swap Agreements The Fund may also invest in swap agreements, which are over-the- counter contracts in which one party agrees to make periodic payments based on the change in market value of a specified bond, basket of bonds, or index in return for periodic payments based on a fixed or variable interest rate or the change in market value of a different bond, basket of bonds or index. Swap agreements may be used to obtain exposure to a bond or market without owning or taking physical custody of securities. MUNIYIELD NEW JERSEY INSURED FUND, INC., APRIL 30, 2004 A Letter From the President Dear Shareholder For the six-month and 12-month periods ended April 30, 2004, the Lehman Brothers Municipal Bond Index posted returns of +1.19% and +2.68%, respectively. Its taxable counterpart, the Lehman Brothers Aggregate Bond Index, had returns of +1.25% and +1.82% for the same periods. Amid considerable month-to-month volatility, tax-exempt bond yields rose over the past year, although not to the same extent as 10-year U.S. Treasury yields. In all, tax-exempt securities continued to be an attractive fixed income investment alternative. As of April month-end, the Federal Reserve Board maintained its accommodative policy stance, although a better-than-expected employment report for the month of March prompted speculation that an interest rate increase could come sooner than many had expected. On April 2, 2004, the good news on the employment front - previously the one dim spot in an otherwise bright economic picture - helped prompt the yield on the 10-year Treasury bond to spike nearly 25 basis points (.25%) from 3.91% to 4.15%. Market watchers continue to monitor the economic data and Federal Reserve Board language for indications of interest rate direction. If economic growth maintains its recent pace and employment figures continue to improve, many believe it is just a matter of time before interest rates move upward. Equity markets, in the meantime, gleaned support from the improving economic environment and provided attractive returns. For the six-month and 12-month periods ended April 30, 2004, the Standard & Poor's 500 Index returned +6.27% and +22.88%, respectively. Significant fiscal and monetary stimulus in 2003, including low interest rates and tax cuts, has opened the door to consumer spending, capital spending, increases in exports and long-awaited job growth. As expected, these developments have led the way to improvements in corporate earnings - a positive for stock markets. The events and efforts of the past year leave us with a much stronger economy today. Of course, markets will always fluctuate, and there are many uncertainties - not the least of which are geopolitical in nature - which can translate into negative market movements. Keeping this in mind, we encourage you to revisit your portfolio and your asset allocation strategy to ensure you are well positioned to take advantage of the opportunities that lie ahead. Importantly, your financial advisor can help you develop a strategy most suitable for your circumstances through all types of market and economic cycles. We thank you for trusting Merrill Lynch Investment Managers with your investment assets, and we look forward to serving you in the months and years ahead. Sincerely, (Terry K. Glenn) Terry K. Glenn President and Director MUNIYIELD NEW JERSEY INSURED FUND, INC., APRIL 30, 2004 A Discussion With Your Fund's Portfolio Manager Interest rates remained at historic lows during the period, and we found it prudent to maintain our focus on generating yield and limiting the Fund's sensitivity to future interest rate changes. Describe the market environment relative to municipal bonds during the fiscal year. For much of the six-month period, a positive economic backdrop helped bond prices to move higher as yields, which typically move opposite of prices, declined. In early April, however, a surprisingly strong monthly employment report triggered fears that the long-accommodative Federal Reserve Board might raise interest rates sooner than many had expected. As a result, bond yields rose (prices fell) for the remainder of the period. At the end of April, long-term U.S. Treasury bond yields had climbed to 5.13%, an increase of approximately 15 basis points (.15%) over the past six months. Ten-year U.S. Treasury note yields stood at 4.30% as of period-end, an increase of more than 20 basis points. Tax-exempt bond yields generally mimicked the movement of their taxable counterparts, although volatility in the municipal market was more subdued. Long-term revenue bond yields, as measured by the Bond Buyer Revenue Bond Index, rose just four basis points over the past six months. For the same period, yields on AAA-rated issues maturing in 30 years increased approximately 10 basis points to 4.93% while yields on 10-year, AAA-rated issues increased more than 16 basis points to nearly 4%, according to Municipal Market Data. The more marked increase in 10-year bond yields may be attributed to the fact that recent issuance has been heavily concentrated in the 10-year - 20-year range. The resulting supply imbalance prompted higher intermediate bond yields (and lower prices). Longer-maturity and lower-rated issues continued to benefit from more favorable supply/demand factors and, therefore, have seen less price depreciation. For the six-month period as a whole, municipal bond supply declined approximately 5% compared to the same period a year ago. Overall, demand for tax-exempt municipal bonds has remained positive. Data from the Investment Company Institute indicates that, in just the first three months of 2004, tax-exempt bond funds have seen net new cash flows of almost $640 million. Describe conditions in State of New Jersey during the period. At period-end, New Jersey had credit ratings of AA from Standard & Poor's, Aa2 from Moody's and AA from Fitch. In early March, however, Moody's placed the state's credit rating under review for a possible downgrade. Following two years of tax-revenue shortfalls, New Jersey's projected revenues for the current fiscal year, ending June 30, 2004, were more optimistic than forecasted, thanks primarily to better-than-expected income tax and sales tax receipts - both signs of a recovering economy. Underscoring the economy's recovery was a substantial decline in the state's unemployment rate, which was 5.4% in February 2004, down from 6.0% the prior year and below the national average of 5.6%. In February, Governor James McGreevey introduced his 2005 state budget. Despite projecting a modest general fund surplus, the new budget remains out of balance because it relies on the use of a number of one-time revenues - including an expected $1.5 billion in bonds backed by cigarette tax revenues and revenues from a proposed vehicle surcharge for "unsafe driving." Measured as a percentage of general fund revenues, New Jersey's projected 2005 budget deficit is one of the nation's highest. For the third straight year, the budget does not include any proposed increases in state income tax or sales tax rates. However, the state authorized higher corporate taxes, effective in 2003, and a hotel occupancy tax that takes effect this year. Governor McGreevey's 2005 budget also proposes an increase in state cigarette taxes, already the highest in the nation. In recent months, New Jersey has authorized a significant amount of new debt issuance, including $6.2 billion worth of school construction bonds and $650 million annually for transportation trust bonds. How did the Fund perform during the period in light of the existing market conditions? For the six-month period ended April 30, 2004, the Common Stock of MuniYield New Jersey Insured Fund, Inc. had net annualized yields of 6.32% and 6.85%, based on a period-end per share net asset value of $14.86 and a per share market price of $13.70, respectively, and $.468 per share income dividends. Over the same period, the total investment return on the Fund's Common Stock was +.52%, based on a change in per share net asset value from $15.25 to $14.86, and assuming reinvestment of $.468 per share ordinary income dividends. MUNIYIELD NEW JERSEY INSURED FUND, INC., APRIL 30, 2004 For the six-month period ended April 30, 2004, the Fund's Auction Market Preferred Stock (AMPS) had an average yield of .86%. The Fund's total return, based on net asset value, lagged that of its comparable Lipper category of New Jersey Municipal Debt Funds, which had an average return of +2.00% for the six-month period. (Funds in this Lipper category limit their investment to those securities exempt from taxation in New Jersey, or a city in New Jersey.) The Fund's relative underperformance is primarily attributed to three factors. First was the portfolio's defensive positioning. Given our concerns about the market environment - specifically, the negative price effect associated with rising interest rates - we sought to shorten the Fund's duration relative to our peers in order to limit the Fund's sensitivity to interest rate moves. Interest rates, however, remained low for much of the period, which hurt performance compared to the Fund's more aggressive peers. Second, several Funds within the Lipper category use leverage (borrowing) to a greater extent than we do. Leverage benefits shareholders when interest rates are falling or stable, as was the case during the past six months, but can hinder results when interest rates are rising. Finally, unlike many of its peers, the Fund is an insured product and, therefore, is precluded from investing widely in speculative grade bonds, which were among the market's best performers during the period. For a description of the Fund's total investment return based on a change in the per share market value of the Fund's Common Stock (as measured by the trading price of the Fund's shares on the New York Stock Exchange), and assuming reinvestment of dividends, please refer to the Financial Highlights section included in this report. As a closed-end fund, the Fund's shares may trade in the secondary market at a premium or discount to the Fund's net asset value. As a result, total investment returns based on changes in the market value of the Fund's Common Stock can vary significantly from total investment return based on changes in the Fund's net asset value. What changes were made to the portfolio during the period? A significant decline in the issuance of New Jersey tax-exempt bonds restricted our ability to make substantial changes to the portfolio. Over the past six months, approximately $5.5 billion in bonds was issued by New Jersey municipalities, representing a decline of roughly 26% compared to the same period a year ago. We kept the Fund's cash reserves at minimal levels while maintaining above-average allocations to general obligation and other tax-backed issues. In addition, because of our favorable assessment of credit spreads, we invested close to the Fund's allowable limit in uninsured securities, which we believed offered a compelling balance of risk and reward. Nevertheless, the Fund continued to be at a competitive disadvantage; this is typical of insured portfolios in an environment in which speculative grade and non-rated bonds are among the market's best performers. In terms of leverage, the Fund's borrowing costs remained below 1% throughout most of the six-month period. These attractive funding levels, in combination with the steep municipal yield curve, continued to generate significant income to the Fund's Common Stock shareholders. The Federal Reserve Board appears poised to begin raising short-term interest rates, most likely later in 2004. The increase, however, is expected to be gradual and should not have a material impact on the positive advantage leverage has had on the Fund's Common Stock yield. However, should the spread between short- term and long-term interest rates narrow, the benefits of leveraging will decline and, as a result, reduce the yield on the Fund's Common Stock. At the end of the period, the Fund's leverage amount, due to AMPS, was 30.08% of total assets. (For a more complete explanation of the benefits and risks of leveraging, see page 2 of this report to shareholders.) How would you characterize the portfolio's position at the close of the period? Late in the period, as interest rates rose modestly, we elected to moderate the portfolio's defensive stance and position the Fund more neutrally. We also remained fully invested in an effort to enhance investment income for our shareholders. Against a backdrop of continuing geopolitical and economic uncertainty, we anticipate significant market volatility ahead. Until some of this uncertainty dissipates, we believe that maintaining the Fund's generally conservative investment strategy remains appropriate. Theodore R. Jaeckel Jr. Vice President and Portfolio Manager May 13, 2004 MUNIYIELD NEW JERSEY INSURED FUND, INC., APRIL 30, 2004 Schedule of Investments (In Thousands)
S&P Moody's Face Ratings Ratings Amount Municipal Bonds Value New Jersey--127.6% AAA Aaa $ 4,765 Cape May County, New Jersey, Industrial Pollution Control Financing Authority Revenue Bonds (Atlantic City Electric Company Project), AMT, Series A, 7.20% due 11/01/2029 (d) $ 4,980 AAA Aaa 3,010 Carteret, New Jersey, Board of Education, COP, 6.75% due 10/15/2004 (d)(e) 3,146 Delaware River Joint Toll Bridge Commission of Pennsylvania and New Jersey, Bridge Revenue Refunding Bonds: A- A2 1,875 5% due 7/01/2023 1,878 A- A2 1,000 5% due 7/01/2028 991 Delaware River Port Authority of Pennsylvania and New Jersey Revenue Bonds: AAA Aaa 3,000 5.40% due 1/01/2016 (b) 3,195 NR* Aaa 2,500 RIB, Series 396, 10.603% due 1/01/2019 (c)(f) 3,118 NR* Aaa 790 Essex County, New Jersey, Improvement Authority Revenue Bonds, Series A, 5% due 10/01/2028 (b) 796 AAA Aaa 6,925 Garden State Preservation Trust, New Jersey, Capital Appreciation Revenue Bonds, Series B, 5.12%** due 11/01/2023 (c) 2,482 AAA Aaa 3,365 Garden State Preservation Trust, New Jersey, Revenue Bonds, Series A, 5% due 11/01/2020 (c) 3,486 BBB NR* 2,000 Gloucester County, New Jersey, Improvement Authority, Solid Waste Resource Recovery Revenue Refunding Bonds (Waste Management Inc. Project), Series A, 6.85% due 12/01/2029 2,277 AAA Aaa 1,000 Hudson County, New Jersey, COP, Refunding, 6.25% due 12/01/2016 (d) 1,184 AAA NR* 8,250 Hudson County, New Jersey, Improvement Authority, Facility Lease Revenue Refunding Bonds (Hudson County Lease Project), 5.375% due 10/01/2024 (b) 8,567 Jackson Township, New Jersey, School District, GO (b): AAA Aaa 2,880 5% due 4/15/2017 3,012 AAA Aaa 5,200 5% due 4/15/2020 5,362 AAA Aaa 3,750 Jersey City, New Jersey, Sewer Authority, Sewer Revenue Refunding Bonds, 6.25% due 1/01/2014 (a) 4,385 AAA Aaa 2,000 Middlesex County, New Jersey, COP, Refunding, 5% due 8/01/2022 (d) 2,047 Monmouth County, New Jersey, Improvement Authority, Governmental Loan Revenue Bonds (a): AAA Aaa 735 5.20% due 12/01/2014 790 AAA Aaa 2,305 5.25% due 12/01/2015 2,468 Monmouth County, New Jersey, Improvement Authority, Governmental Loan Revenue Refunding Bonds (a): AAA Aaa 1,695 5% due 12/01/2017 1,763 AAA Aaa 1,520 5% due 12/01/2018 1,574 AAA Aaa 1,540 5% due 12/01/2019 1,589 BBB- NR* 1,000 New Jersey EDA, First Mortgage Revenue Bonds (Fellowship Village), Series C, 5.50% due 1/01/2028 947 BBB- NR* 1,700 New Jersey EDA, First Mortgage Revenue Refunding Bonds (Fellowship Village), Series A, 5.50% due 1/01/2018 1,703 NR* Aaa 3,000 New Jersey EDA, Natural Gas Facilities Revenue Refunding Bonds (NUI Corporation), RIB, Series 371, 11.32% due 10/01/2022 (a)(f) 3,232 New Jersey EDA, Revenue Bonds: AAA Aaa 3,390 (School Facilities Construction), Series 2003F, 5% due 6/15/2024 (b) 3,442 AAA Aaa 9,080 (Transportation Project Sublease), Series A, 5.875% due 5/01/2009 (c)(e) 10,291
Portfolio Abbreviations To simplify the listings of MuniYield New Jersey Insured Fund, Inc.'s portfolio holdings in the Schedule of Investments, we have abbreviated the names of many of the securities according to the list at right. AMT Alternative Minimum Tax (subject to) COP Certificates of Participation DRIVERS Derivative Inverse Tax-Exempt Receipts EDA Economic Development Authority GO General Obligation Bonds M/F Multi-Family RIB Residual Interest Bonds MUNIYIELD NEW JERSEY INSURED FUND, INC., APRIL 30, 2004 Schedule of Investments (continued) (In Thousands)
S&P Moody's Face Ratings Ratings Amount Municipal Bonds Value New Jersey (continued) NR* Aaa $ 2,535 New Jersey EDA, Water Facilities Revenue Bonds, RIB, AMT, Series 417, 12.35% due 11/01/2034 (b)(f) $ 2,755 AAA Aaa 2,515 New Jersey EDA, Water Facilities Revenue Refunding Bonds (American Water), AMT, Series B, 5.125% due 4/01/2022 (a) 2,553 New Jersey Health Care Facilities Financing Authority Revenue Bonds: NR* Baa2 1,125 (Somerset Medical Center), 5.50% due 7/01/2033 1,093 NR* Baa1 4,000 (South Jersey Hospital), 6% due 7/01/2026 4,132 New Jersey Health Care Facilities Financing Authority, Revenue Refunding Bonds: A- A3 615 (Atlantic City Medical Center), 6.25% due 7/01/2017 672 A- A3 1,315 (Atlantic City Medical Center), 5.75% due 7/01/2025 1,363 BBB+ NR* 2,425 (Holy Name Hospital), 6% due 7/01/2025 2,467 AAA Aaa 2,250 (Meridian Health System Obligation Group), 5.25% due 7/01/2019 (c) 2,358 New Jersey Sports and Exposition Authority, Luxury Tax Revenue Refunding Bonds (Convention Center) (d): AAA Aaa 2,000 5% due 9/01/2017 2,075 AAA Aaa 1,000 5.50% due 3/01/2022 1,095 AAA Aaa 3,200 New Jersey State Educational Facilities Authority, Higher Education, Capital Improvement Revenue Bonds, Series A, 5.125% due 9/01/2022 (a) 3,304 New Jersey State Educational Facilities Authority, Revenue Refunding Bonds (William Paterson University), Series E (g): AAA Aaa 1,440 5.375% due 7/01/2017 1,549 AAA Aaa 1,725 5% due 7/01/2021 1,766 AAA Aaa 7,105 New Jersey State Higher Education Assistance Authority, Student Loan Revenue Bonds, AMT, Series A, 5.30% due 6/01/2017 (a) 7,363 AAA Aaa 3,150 New Jersey State Housing and Mortgage Finance Agency, Home Buyer Revenue Bonds, AMT, Series CC, 5.80% due 10/01/2020 (d) 3,304 AAA Aaa 2,530 New Jersey State Housing and Mortgage Finance Agency, M/F Housing Revenue Refunding Bonds, Series A, 6.05% due 11/01/2020 (a) 2,609 AAA Aaa 5,350 New Jersey State Transit Corporation, COP, 6.50% due 4/01/2007 (c)(e) 6,039 New Jersey State Transportation Trust Fund Authority, Transportation System Revenue Bonds: AAA Aaa 1,500 Series A, 5% due 6/15/2018 (c) 1,551 AAA Aaa 2,750 Series B, 5% due 6/15/2013 (a) 2,916 AAA Aaa 2,160 New Jersey State Transportation Trust Fund Authority, Transportation System Revenue Refunding Bonds, Series B, 6% due 12/15/2011 (d)(e) 2,511 AAA Aaa 2,500 New Jersey State Turnpike Authority, Turnpike Revenue Refunding Bonds, Series A, 5.75% due 1/01/2019 (d) 2,764 Port Authority of New York and New Jersey, Consolidated Revenue Bonds: AAA Aaa 4,000 AMT, 97th Series, 6.65% due 1/15/2023 (b) 4,163 AA- A1 1,000 93rd Series, 6.125% due 6/01/2094 1,104 AAA Aaa 3,500 Port Authority of New York and New Jersey, Consolidated Revenue Refunding Bonds, AMT, 96th Series, 6.60% due 10/01/2023 (b) 3,602 AAA Aaa 4,075 Port Authority of New York and New Jersey, Revenue Bonds, Trust Receipts, AMT, Class R, Series 10, 10.34% due 1/15/2017 (c)(f) 4,710 AAA Aaa 3,180 Port Authority of New York and New Jersey, Revenue Refunding Bonds, DRIVERS, AMT, Series 153, 9.10% due 9/15/2012 (b)(f) 3,432 A NR* 2,200 South Jersey, New Jersey, Revenue Refunding Bonds (Port Corporation), 5% due 1/01/2023 2,203 Tobacco Settlement Financing Corporation of New Jersey Revenue Bonds: BBB Baa3 1,870 6.75% due 6/01/2039 1,751 BBB Baa3 2,845 7% due 6/01/2041 2,789
MUNIYIELD NEW JERSEY INSURED FUND, INC., APRIL 30, 2004 Schedule of Investments (concluded) (In Thousands)
S&P Moody's Face Ratings Ratings Amount Municipal Bonds Value New Jersey (concluded) Union County, New Jersey, Utilities Authority, Senior Lease Revenue Refunding Bonds (Ogden Martin System of Union), AMT, Series A (a)(f): AAA Aaa $ 1,590 5.375% due 6/01/2017 $ 1,640 AAA Aaa 1,670 5.375% due 6/01/2018 1,716 University of Medicine and Dentistry, New Jersey, Revenue Bonds, Series A (a): AAA Aaa 570 5.50% due 12/01/2018 621 AAA Aaa 1,145 5.50% due 12/01/2019 1,244 AAA Aaa 1,130 5.50% due 12/01/2020 1,226 AAA Aaa 865 5.50% due 12/01/2021 936 Guam--1.0% AAA Aaa 1,210 A.B. Won Guam International Airport Authority, General Revenue Refunding Bonds, Series A, 5.25% due 10/01/2022 (d) 1,263 Puerto Rico--9.9% AAA Aaa 1,020 Puerto Rico Commonwealth, GO, Refunding, 5.50% due 7/01/2013 (b) 1,148 AAA Aaa 1,500 Puerto Rico Commonwealth Highway and Transportation Authority, Transportation Revenue Refunding Bonds, Series J, 5% due 7/01/2029 (d) 1,524 AAA Aaa 1,830 Puerto Rico Electric Power Authority, Power Revenue Bonds, Series HH, 5.25% due 7/01/2029 (c) 1,874 NR* Aa2 2,110 Puerto Rico Industrial, Tourist, Educational, Medical and Environmental Control Facilities Revenue Bonds (Ascension Health), RIB, Series 377, 10.86% due 11/15/2030 (f) 2,462 AAA NR* 5,250 Puerto Rico Public Buildings Authority Revenue Bonds, DRIVERS, Series 211, 9.157% due 7/01/2021 (d)(f) 5,874 Total Municipal Bonds (Cost--$170,959 )--138.5% 180,226 Shares Held Short-Term Securities 720 CMA New Jersey Municipal Money Fund (h) 720 Total Short-Term Securities (Cost--$720)--0.5% 720 Total Investments (Cost--$171,679)--139.0% 180,946 Other Assets Less Liabilities--4.0% 5,229 Preferred Stock, at Redemption Value--(43.0%) (56,010) --------- Net Assets Applicable to Common Stock--100.0% $ 130,165 ========= (a)AMBAC Insured. (b)FGIC Insured. (c)FSA Insured. (d)MBIA Insured. (e)Prerefunded. (f)The interest rate is subject to change periodically and inversely based upon prevailing market rates. The interest rate shown is the rate in effect at April 30, 2004. (g)XL Capital Insured. (h)Investments in companies considered to be an affiliate of the Fund (such companies are defined as "Affiliated Companies" in Section 2(a)(3) of the Investment Company Act of 1940) are as follows: (in Thousands) Net Dividend Affiliate Activity Income CMA New Jersey Municipal Money Fund (6,383) $13 *Not Rated. **Represents a zero coupon or step bond; the interest rate shown reflects the effective yield at the time of purchase by the Fund. See Notes to Financial Statements.
MUNIYIELD NEW JERSEY INSURED FUND, INC., APRIL 30, 2004 Statement of Net Assets
As of April 30, 2004 Assets Investments in unaffiliated securities, at value (identified cost--$170,958,781) $ 180,225,874 Investments in affiliated securities, at value (identified cost--$719,964) 719,964 Cash 1,138,510 Receivables: Securities sold $ 3,221,725 Interest 3,213,722 Dividends from affiliates 9 6,435,456 --------------- Prepaid expenses 4,400 --------------- Total assets 188,524,204 --------------- Liabilities Payables: Securities purchased 2,100,144 Dividends to Common Stock shareholders 144,236 Investment adviser 89,034 Other affiliates 1,311 2,334,725 --------------- Accrued expenses 14,795 --------------- Total liabilities 2,349,520 --------------- Preferred Stock Preferred Stock, at redemption value, par value $.05 per share (2,240 Series A Shares of AMPS* issued and outstanding at $25,000 per share liquidation preference) 56,009,677 --------------- Net Assets Applicable to Common Stock Net assets applicable to Common Stock $ 130,165,007 =============== Analysis of Net Assets Applicable to Common Stock Common Stock, par value $.10 per share (8,758,488 shares issued and outstanding) $ 875,849 Paid-in capital in excess of par 122,888,953 Undistributed investment income--net $ 1,982,665 Accumulated realized capital losses on investments--net (4,849,553) Unrealized appreciation on investments--net 9,267,093 --------------- Total accumulated earnings--net 6,400,205 --------------- Total--Equivalent to $14.86 net asset value per share of Common Stock (market price--$13.70) $ 130,165,007 =============== *Auction Market Preferred Stock. See Notes to Financial Statements.
MUNIYIELD NEW JERSEY INSURED FUND, INC., APRIL 30, 2004 Statement of Operations
For the Six Months Ended April 30, 2004 Investment Income Interest $ 5,125,194 Dividends from affiliates 13,276 --------------- Total income 5,138,470 --------------- Expenses Investment advisory fees $ 475,310 Commission fees 69,620 Accounting services 40,426 Professional fees 27,918 Printing and shareholder reports 21,249 Transfer agent fees 19,944 Directors' fees and expenses 12,607 Listing fees 10,414 Custodian fees 5,123 Pricing fees 4,376 Other 13,316 --------------- Total expenses before reimbursement 700,303 Reimbursement of expenses (13,817) --------------- Total expenses after reimbursement 686,486 --------------- Investment income--net 4,451,984 --------------- Realized & Unrealized Loss on Investments--Net Realized loss on investments--net (683,404) Change in unrealized appreciation on investments--net (2,800,972) --------------- Total realized and unrealized loss on investments--net (3,484,376) --------------- Dividends to Preferred Stock Shareholders Investment income--net (238,918) --------------- Net Increase in Net Assets Resulting from Operations $ 728,690 =============== See Notes to Financial Statements.
MUNIYIELD NEW JERSEY INSURED FUND, INC., APRIL 30, 2004 Statements of Changes in Net Assets
For the For the Six Months Year Ended Ended April 30, October 31, Increase (Decrease) in Net Asset Value: 2004 2003 Operations Investment income--net $ 4,451,984 $ 9,256,714 Realized gain (loss) on investments--net (683,404) 351,871 Change in unrealized appreciation on investments--net (2,800,972) 3,424 Dividends and distributions to Preferred Stock shareholders (238,918) (514,304) --------------- --------------- Net increase in net assets resulting from operations 728,690 9,097,705 --------------- --------------- Dividends & Distributions to Common Stock Shareholders Investment income--net (4,093,110) (8,172,716) Realized gain on investments--net -- (46,866) --------------- --------------- Net decrease in net assets resulting from dividends and distributions to Common Stock shareholders (4,093,110) (8,219,582) --------------- --------------- Common Stock Transactions Value of shares issued to Common Stock shareholders in reinvestment of dividends and distributions 289,289 216,321 --------------- --------------- Net Assets Applicable to Common Stock Total increase (decrease) in net assets applicable to Common Stock (3,075,131) 1,094,444 Beginning of period 133,240,138 132,145,694 --------------- --------------- End of period* $ 130,165,007 $ 133,240,138 =============== =============== *Undistributed investment income--net $ 1,982,665 $ 1,862,709 =============== =============== See Notes to Financial Statements.
MUNIYIELD NEW JERSEY INSURED FUND, INC., APRIL 30, 2004 Financial Highlights
The following per share data and ratios have been derived For the Six from information provided in the financial statements. Months Ended April 30, For the Year Ended October 31, Increase (Decrease) in Net Asset Value: 2004 2003 2002 2001++++ 2000++++ Per Share Operating Performance Net asset value, beginning of period $ 15.25 $ 15.14 $ 15.17 $ 13.96 $ 13.48 ---------- ---------- ---------- ---------- ---------- Investment income--net .51+++++ 1.06+++++ 1.07 1.04 1.03 Realized and unrealized gain (loss) on investments--net (.40) .06 (.06) 1.21 .51 Dividends and distributions to Preferred Stock shareholders: Investment income--net (.03) (.06) (.09) (.20) (.25) Realized gain on investments--net -- --++ --++ -- -- ---------- ---------- ---------- ---------- ---------- Total from investment operations .08 1.06 .92 2.05 1.29 ---------- ---------- ---------- ---------- ---------- Less dividends and distributions to Common Stock shareholders: Investment income--net (.47) (.94) (.94) (.84) (.81) Realized gain on investments--net -- (.01) (.01) -- -- ---------- ---------- ---------- ---------- ---------- Total dividends and distributions to Common Stock shareholders (.47) (.95) (.95) (.84) (.81) ---------- ---------- ---------- ---------- ---------- Net asset value, end of period $ 14.86 $ 15.25 $ 15.14 $ 15.17 $ 13.96 ========== ========== ========== ========== ========== Market price per share, end of period $ 13.70 $ 14.39 $ 14.45 $ 15.04 $ 13.375 ========== ========== ========== ========== ========== Total Investment Return** Based on market price per share (1.79%)+++ 6.02% 2.30% 19.04% 12.80% ========== ========== ========== ========== ========== Based on net asset value per share. .52%+++ 7.24% 6.27% 15.04% 10.27% ========== ========== ========== ========== ========== Ratios Based on Average Net Assets of Common Stock Total expenses, net of reimbursement*** 1.02%* 1.03% 1.07% 1.11% 1.11% ========== ========== ========== ========== ========== Total expenses*** 1.04%* 1.04% 1.07% 1.11% 1.11% ========== ========== ========== ========== ========== Total investment income--net*** 6.61%* 6.89% 7.04% 7.01% 7.56% ========== ========== ========== ========== ========== Amount of dividends to Preferred Stock shareholders .35%* .38% .57% 1.33% 1.86% ========== ========== ========== ========== ========== Investment income--net, to Common Stock shareholders 6.26%* 6.51% 6.47% 5.68% 5.70% ========== ========== ========== ========== ========== Ratios Based on Average Net Assets of Common & Preferred Stock*** Total expenses, net of reimbursement .72%* .73% .75% .77% .75% ========== ========== ========== ========== ========== Total expenses .74%* .73% .75% .77% .75% ========== ========== ========== ========== ========== Total investment income--net 4.67%* 4.85% 4.93% 4.86% 5.10% ========== ========== ========== ========== ========== Ratios Based on Average Net Assets of Preferred Stock Dividends to Preferred Stock shareholders .86%* .91% 1.32% 3.01% 3.85% ========== ========== ========== ========== ==========
MUNIYIELD NEW JERSEY INSURED FUND, INC., APRIL 30, 2004 Financial Highlights (concluded)
For the Six Months Ended The following per share data and ratios have been derived April 30, For the Year Ended October 31, from information provided in the financial statements. 2004 2003 2002 2001++++ 2000++++ Supplemental Data Net assets applicable to Common Stock, end of period (in thousands) $ 130,165 $ 133,240 $ 132,146 $ 131,012 $ 119,885 ========== ========== ========== ========== ========== Preferred Stock outstanding, end of period (in thousands) $ 56,000 $ 56,000 $ 56,000 $ 56,000 $ 56,000 ========== ========== ========== ========== ========== Portfolio turnover 2.19% 24.70% 28.45% 57.25% 50.65% ========== ========== ========== ========== ========== Leverage Asset coverage per $1,000 $ 3,324 $ 3,379 $ 3,360 $ 3,340 $ 3,141 ========== ========== ========== ========== ========== Dividends Per Share on Preferred Stock Outstanding Investment income--net $ 107 $ 228 $ 330 $ 753 $ 966 ========== ========== ========== ========== ========== *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 charges. ***Do not reflect the effect of dividends to Preferred Stock shareholders. ++Amount is less than $(.01) per share. ++++Certain prior year amounts have been reclassified to conform to current year presentation. +++Aggregate total investment return. +++++Based on average shares outstanding. See Notes to Financial Statements.
MUNIYIELD NEW JERSEY INSURED FUND, INC., APRIL 30, 2004 Notes to Financial Statements 1. Significant Accounting Policies: MuniYield New Jersey Insured Fund, Inc. (the "Fund") is registered under the Investment Company Act of 1940, as amended, as a non- diversified, closed-end management investment company. The Fund's financial statements are prepared in conformity with accounting principles generally accepted in the United States of America, which may require the use of management accruals and estimates. Actual results may differ from these estimates. These unaudited financial statements reflect all adjustments, which are, in the opinion of management, necessary to a fair statement of the results for the interim period presented. All such adjustments are of a normal, recurring nature. The Fund determines and makes available for publication the net asset value of its Common Stock on a weekly basis. The Fund's Common Stock is listed on the New York Stock Exchange under the symbol MJI. The following is a summary of significant accounting policies followed by the Fund. (a) Valuation of investments--Municipal bonds are traded primarily in the over-the-counter markets and are valued at the last available bid price in the over-the-counter market or on the basis of yield equivalents as obtained by the Fund's pricing service from one or more dealers that make markets in the securities. Financial futures contracts and options thereon, which are traded on exchanges, are valued at their closing prices as of the close of such exchanges. Options written or purchased are valued at the last sale price in the case of exchange-traded options. In the case of options traded in the over-the-counter market, valuation is the last asked price (options written) or the last bid price (options purchased). Swap agreements are valued by quoted fair values received daily by the Fund from the counterparty. Short-term investments with a remaining maturity of sixty days or less are valued at amortized cost, which approximates market value. Securities and assets for which market quotations are not readily available are valued at fair value as determined in good faith by or under the direction of the Board of Directors of the Fund, including valuations furnished by a pricing service retained by the Fund, which may utilize a matrix system for valuations. The procedures of the pricing service and its valuations are reviewed by the officers of the Fund under the general supervision of the Board of Directors. (b) Derivative financial instruments--The Fund may engage in various portfolio investment strategies both to increase the return of the Fund and to hedge, or protect, its exposure to interest rate movements and movements in the securities markets. Losses may arise due to changes in the value of the contract or if the counterparty does not perform under the contract. * Financial futures contracts--The Fund may purchase or sell financial futures contracts and options on such futures contracts. 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 may 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. MUNIYIELD NEW JERSEY INSURED FUND, INC., APRIL 30, 2004 Notes to Financial Statements (continued) * Forward interest rate swaps--The Fund may enter into forward interest rate swaps. In a forward interest rate swap, the Fund and the counterparty agree to make periodic net payments on a specified notional contract amount, commencing on a specified future effective date, unless terminated earlier. When the agreement is closed, the Fund records a realized gain or loss in an amount equal to the value of the agreement. (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). Realized gains and losses on security transactions are determined on the identified cost basis. Dividend income is recorded on the ex-dividend dates. Interest income is recognized on the accrual basis. The Fund amortizes all premiums and discounts on debt securities. (e) Dividends and distributions--Dividends from net investment income are declared and paid monthly. Distributions of capital gains are recorded on the ex-dividend dates. 2. Investment Advisory Agreement and Transactions with Affiliates: The Fund has entered into an Investment Advisory Agreement with Fund Asset Management, L.P. ("FAM"). The general partner of FAM is Princeton Services, Inc. ("PSI"), an indirect, wholly-owned subsidiary of Merrill Lynch & Co., Inc. ("ML & Co."), which is the limited partner. FAM is responsible for the management of the Fund's portfolio and provides the necessary personnel, facilities, equipment and certain other services necessary to the operations of the Fund. For such services, the Fund pays a monthly fee at an annual rate of .50% of the Fund's average weekly net assets, including proceeds from the issuance of Preferred Stock. For the six months ended April 30, 2004, FAM reimbursed the Fund in the amount of $13,817. For the six months ended April 30, 2004, the Fund reimbursed FAM $1,925 for certain accounting services. Certain officers and/or directors of the Fund are officers and/or directors of FAM, PSI, and/or ML & Co. 3. Investments: Purchases and sales of investments, excluding short-term securities, for the six months ended April 30, 2004 were $8,385,900 and $3,989,600, respectively. Net realized gains (losses) for the six months ended April 30, 2004 and net unrealized appreciation as of April 30, 2004 were as follows: Realized Unrealized Gains (Losses) Appreciation Long-term investments $ 147,841 $ 9,267,093 Forward interest rate swaps (831,245) -- ------------- ------------- Total $ (683,404) $ 9,267,093 ============= ============= As of April 30, 2004, net unrealized appreciation for Federal income tax purposes aggregated $9,463,150, of which $9,982,342 related to appreciated securities and $519,192 related to depreciated securities. The aggregate cost of investments at April 30, 2004 for Federal income tax purposes was $171,482,688. 4. Stock Transactions: The Fund is authorized to issue 200,000,000 shares of 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 stock without approval of holders of Common Stock. Common Stock Shares issued and outstanding during the six months ended April 30, 2004 and the year ended October 31, 2003 increased by 18,785 and 13,926, respectively, as a result of dividend reinvestment. MUNIYIELD NEW JERSEY INSURED FUND, INC., APRIL 30, 2004 Notes to Financial Statements (concluded) Preferred Stock Auction Market Preferred Stock are redeemable shares of Preferred Stock of the Fund, with a par value of $.05 per share and a liquidation preference of $25,000 per share, plus accrued and unpaid dividends, 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, 2004 was .90%. The Fund pays commissions to certain broker-dealers at the end of each auction at an annual rate ranging from .25% to .375%, calculated on the proceeds of each auction. For the six months ended April 30, 2004, Merrill Lynch, Pierce, Fenner & Smith Incorporated, an affiliate of FAM, earned $42,694 as commissions. 5. Capital Loss Carryforward: On October 31, 2003, the Fund had a net capital loss carryforward of $1,570,772, of which $492,522 expires in 2008 and $1,078,250 expires in 2010. This amount will be available to offset like amounts of any future taxable gains. 6. Subsequent Event: The Fund paid a tax-exempt income dividend to holders of Common Stock in the amount of $.078000 per share on May 27, 2003 to shareholders of record on May 14, 2003. Proxy Results
During the six-month period ended April 30, 2004, MuniYield New Jersey Insured Fund, Inc.'s Common Stock shareholders voted on the following proposal. The proposal was approved at a shareholders' meeting on April 27, 2004. A description of the proposal and number of shares voted are as follows: Shares Voted Shares Withheld For From Voting 1. To elect the Fund's Directors: Donald W. Burton 8,084,026 378,183 David H. Walsh 8,097,381 364,828 Fred G. Weiss 8,097,344 364,865 During the six-month period ended April 30, 2004, MuniYield New Jersey Insured Fund, Inc.'s Preferred Stock shareholders voted on the following proposal. The proposal was approved at a shareholders' meeting on April 27, 2004. A description of the proposal and number of shares voted are as follows: Shares Voted Shares Withheld For From Voting 1. To elect the Fund's Board of Directors: Donald W. Burton, M. Colyer Crum, Laurie Simon Hodrick, David H. Walsh and Fred G. Weiss 1,982 185
MUNIYIELD NEW JERSEY INSURED FUND, INC., APRIL 30, 2004 Quality Profile The quality ratings of securities in the Fund as of April 30, 2004 were as follows: Percent of Total S&P Rating/Moody's Rating Investments AAA/Aaa 84.2% AA/Aa 2.0 A/A 3.9 BBB/Baa 9.5 NR (Not Rated) 0.4 Dividend Policy The Fund's dividend policy is to distribute all or a portion of its net investment income to its shareholders on a monthly basis. In order to provide shareholders with a more stable level of dividend distributions, the Fund may at times pay out less than the entire amount of net investment income earned in any particular month and may at times in any particular month pay out such accumulated but undistributed income in addition to net investment income earned in that month. As a result, the dividends paid by the Fund for any particular month may be more or less than the amount of net investment income earned by the Fund during such month. The Fund's current accumulated but undistributed net investment income, if any, is disclosed in the Statement of Net Assets, which comprises part of the financial information included in this report. MUNIYIELD NEW JERSEY INSURED FUND, INC., APRIL 30, 2004 Officers and Directors Terry K. Glenn, President and Director Donald W. Burton, Director M. Colyer Crum, Director Laurie Simon Hodrick, Director David H. Walsh, Director Fred G. Weiss, Director Kenneth A. Jacob, Senior Vice President John M. Loffredo, Senior Vice President Theodore R. Jaeckel Jr., Vice President Donald C. Burke, Vice President and Treasurer Phillip S. Gillespie, Secretary Custodian The Bank of New York 100 Church Street New York, NY 10286 Transfer Agents Common Stock: The Bank of New York 101 Barclay Street New York, NY 10286 Preferred Stock: The Bank of New York 101 Barclay Street - 7 West New York, NY 10286 NYSE Symbol MJI MUNIYIELD NEW JERSEY INSURED FUND, INC., APRIL 30, 2004 Electronic Delivery The Fund offers electronic delivery of communications to its shareholders. In order to receive this service, you must register your account and provide us with e-mail information. To sign up for this service, simply access this website http://www.icsdelivery.com/live and follow the instructions. When you visit this site, you will obtain a personal identification number (PIN). You will need this PIN should you wish to update your e-mail address, choose to discontinue this service and/or make any other changes to the service. This service is not available for certain retirement accounts at this time. MUNIYIELD NEW JERSEY INSURED FUND, INC., APRIL 30, 2004 Item 2 - Code of Ethics - Not Applicable to this semi-annual report Item 3 - Audit Committee Financial Expert - Not Applicable to this semi-annual report Item 4 - Principal Accountant Fees and Services - Not Applicable to this semi-annual report Item 5 - Audit Committee of Listed Registrants - Not Applicable to this semi-annual report Item 6 - Schedule of Investments - Not Applicable Item 7 - Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies - Not Applicable to this semi-annual report Item 8 - Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers - Not Applicable Item 9 - Submission of Matters to a Vote of Security Holders - Not Applicable Item 10 - Controls and Procedures 10(a) - The registrant's certifying officers have reasonably designed such disclosure controls and procedures to ensure material information relating to the registrant is made known to us by others particularly during the period in which this report is being prepared. The registrant's certifying officers have determined that the registrant's disclosure controls and procedures are effective based on our evaluation of these controls and procedures as of a date within 90 days prior to the filing date of this report. 10(b) - There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Act (17 CFR 270.30a-3(d)) that occurred during the last fiscal half-year of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. Item 11 - Exhibits attached hereto 11(a)(1) - Code of Ethics - Not Applicable to this semi-annual report 11(a)(2) - Certifications - Attached hereto 11(a)(3) - Not Applicable 11(b) - Certifications - Attached hereto Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. MuniYield New Jersey Insured Fund, Inc. By: _/s/ Terry K. Glenn_______ Terry K. Glenn, President of MuniYield New Jersey Insured Fund, Inc. Date: June 18, 2004 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By: _/s/ Terry K. Glenn________ Terry K. Glenn, President of MuniYield New Jersey Insured Fund, Inc. Date: June 18, 2004 By: _/s/ Donald C. Burke________ Donald C. Burke, Chief Financial Officer of MuniYield New Jersey Insured Fund, Inc. Date: June 18, 2004 EX-99.CERT 2 ex99cert.txt EX-99 CERT EX-99. CERT CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Terry K. Glenn, President of MuniYield New Jersey Insured Fund, Inc., certify that: 1. I have reviewed this report on Form N-CSR of MuniYield New Jersey Insured Fund, Inc. (the "Fund"); 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the Fund as of, and for, the periods presented in this report; 4. The Fund's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the Fund and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Fund, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) evaluated the effectiveness of the Fund's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and c) disclosed in this report any change in the Fund's internal control over financial reporting that occurred during the Fund's most recent fiscal half-year (the Fund's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Fund's internal control over financial reporting; and 5. The Fund's other certifying officer(s) and I have disclosed to the Fund's auditors and the audit committee of the Fund's board of directors (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Fund's ability to record, process, summarize, and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Fund's internal control over financial reporting. Date: June 18, 2004 /s/ Terry K. Glenn Terry K. Glenn, President of MuniYield New Jersey Insured Fund, Inc. EX-99. CERT CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Donald C. Burke, Chief Financial Officer of MuniYield New Jersey Insured Fund, Inc., certify that: 1. I have reviewed this report on Form N-CSR of MuniYield New Jersey Insured Fund, Inc. (the "Fund"); 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the Fund as of, and for, the periods presented in this report; 4. The Fund's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the Fund and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Fund, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) evaluated the effectiveness of the Fund's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and c) disclosed in this report any change in the Fund's internal control over financial reporting that occurred during the Fund's most recent fiscal half-year (the Fund's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Fund's internal control over financial reporting; and 5. The Fund's other certifying officer(s) and I have disclosed to the Fund's auditors and the audit committee of the Fund's board of directors (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Fund's ability to record, process, summarize, and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Fund's internal control over financial reporting. Date: June 18, 2004 /s/ Donald C. Burke Donald C. Burke, Chief Financial Officer of MuniYield New Jersey Insured Fund, Inc. Exhibit 99.1350CERT Certification Pursuant to Section 906 of the Sarbanes Oxley Act I, Terry K. Glenn, President of MuniYield New Jersey Insured Fund, Inc. (the "Fund"), certify that: 1. The N-CSR of the Fund (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Fund. Dated: June 18, 2004 /s/ Terry K. Glenn Terry K. Glenn, President of MuniYield New Jersey Insured Fund, Inc. A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to MuniYield New Jersey Insured Fund, Inc. and will be retained by MuniYield New Jersey Insured Fund, Inc. and furnished to the Securities and Exchange Commission or its staff upon request. Exhibit 99.1350CERT Certification Pursuant to Section 906 of the Sarbanes Oxley Act I, Donald C. Burke, Chief Financial Officer of MuniYield New Jersey Insured Fund, Inc. (the "Fund"), certify that: 1. The N-CSR of the Fund (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Fund. Dated: June 18, 2004 /s/ Donald C. Burke Donald C. Burke, Chief Financial Officer of MuniYield New Jersey Insured Fund, Inc. A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to MuniYield New Jersey Insured Fund, Inc. and will be retained by MuniYield New Jersey Insured Fund, Inc. and furnished to the Securities and Exchange Commission or its staff upon request. -----END PRIVACY-ENHANCED MESSAGE-----