BLACKROCK MUNIYIELD MICHIGAN QUALITY FUND, INC.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT INVESTMENT COMPANY

Investment Company Act file number 811-07080

Name of Fund:    BlackRock MuniYield Michigan Quality Fund, Inc. (MIY)

Fund Address:     100 Bellevue Parkway, Wilmington, DE 19809

Name and address of agent for service: John M. Perlowski, Chief Executive Officer, BlackRock MuniYield Michigan Quality Fund, Inc., 55 East 52nd Street, New York, NY 10055

Registrant’s telephone number, including area code: (800) 882-0052, Option 4

Date of fiscal year end: 07/31/2018

Date of reporting period: 10/31/2017

 


Item 1 – Schedule of Investments

 


Schedule of Investments  (unaudited)

October 31, 2017

  

BlackRock MuniYield Michigan Quality Fund, Inc. (MIY)

(Percentages shown are based on Net Assets)

 

     Par
(000)
    Value  

Municipal Bonds

 

Michigan — 137.5%  
Corporate — 3.9%  

County of Monroe Michigan EDC, Refunding RB, Detroit Edison Co. Project, Series AA (NPFGC), 6.95%, 09/01/22

  $ 14,500     $ 17,886,620  
   

 

 

 
County/City/Special District/School District — 26.6%  

Anchor Bay School District, GO, Refunding, (Q-SBLF):

   

4.38%, 5/01/27

    1,600       1,741,872  

4.50%, 5/01/29

    1,505       1,639,999  

Battle Creek School District Michigan, GO, Refunding, (Q-SBLF):

   

5.00%, 5/01/35

    1,100       1,266,606  

5.00%, 5/01/36

    1,500       1,721,130  

5.00%, 5/01/37

    1,170       1,339,650  

Berkley School District, GO, School Building & Site (Q-SBLF), 5.00%, 05/01/35

    2,965       3,366,876  

Byron Center Public Schools, GO, School Building & Site, Series I (Q-SBLF):

   

5.00%, 5/01/43

    1,580       1,797,471  

5.00%, 5/01/47

    3,635       4,122,635  

Columbia Michigan School District, GO, Unlimited Tax, School Building & Site (Q-SBLF), 5.00%, 05/01/38

    5,185       5,850,391  

Comstock Park Michigan Public Schools, GO, School Building & Site, Series B (Q-SBLF)(a):

   

5.50%, 5/01/21

    2,185       2,496,952  

5.50%, 5/01/21

    1,200       1,371,324  

County of Genesee Michigan, GO, Refunding, Series A (NPFGC), 5.00%, 05/01/19

    1,000       1,018,380  

County of Saginaw Michigan, GO, 4.00%, 11/01/42(b)

    2,000       2,085,040  

Dearborn Brownfield Redevelopment Authority, GO, Limited Tax, Redevelopment, Series A (AGC), 5.50%, 05/01/39

    5,300       5,590,016  

Dearborn School District, GO, School Building & Site, Series A (Q-SBLF):

   

5.00%, 5/01/32

    1,500       1,718,430  

5.00%, 5/01/33

    1,600       1,824,352  

5.00%, 5/01/34

    1,200       1,362,540  

Dowagiac Union School District, GO, (Q-SBLF), 5.00%, 05/01/41

    1,140       1,294,333  
     Par
(000)
    Value  
County/City/Special District/School District (continued)  

East Lansing School District, GO, School Building & Site, Series I (Q-SBLF):

   

5.00%, 5/01/34

  $ 600     $ 698,532  

5.00%, 5/01/35

    700       811,188  

5.00%, 5/01/36

    550       634,915  

5.00%, 5/01/37

    550       633,446  

5.00%, 5/01/39

    740       847,692  

5.00%, 5/01/42

    1,000       1,139,380  

Farmington Public School District, GO, Refunding, School Building & Site (AGM):

   

5.00%, 5/01/33

    1,500       1,731,645  

5.00%, 5/01/34

    1,500       1,725,060  

5.00%, 5/01/35

    1,000       1,147,850  

Flint EDC, RB, Michigan Department of Human Services Office Building Project, 5.25%, 10/01/41

    4,950       5,479,749  

Fraser Public School District, Refunding, GO, School Building & Site (Q-SBLF):

   

5.00%, 5/01/38

    750       861,135  

5.00%, 5/01/43

    2,000       2,275,280  

5.00%, 5/01/47

    3,225       3,657,634  

Goodrich Area School District Michigan, GO, School Building & Site (Q-SBLF):

   

5.50%, 5/01/21(a)

    2,575       2,881,657  

5.50%, 5/01/32

    1,000       1,119,090  

5.50%, 5/01/36

    2,000       2,237,460  

Grand Rapids Public Schools, GO, Refunding Unlimited Tax (AGM), 5.00%, 05/01/29

    1,000       1,203,620  

Grandville Public Schools, GO, School Building & Site, Series II (AGM), 5.00%, 05/01/40

    3,250       3,623,458  

Hudsonville Michigan Public Schools, GO, School Building & Site (Q-SBLF), 5.25%, 05/01/21(a)

    6,750       7,514,032  

Kentwood Public Schools, GO, School Building & Site:

   

5.00%, 5/01/41

    1,120       1,268,064  

5.00%, 5/01/44

    1,815       2,047,737  

Livonia Public Schools School District Michigan, GO, Series I (AGM), 5.00%, 05/01/43

    5,000       5,583,850  

Mattawan Consolidated School District, GO, Series I (Q-SBLF), 5.00%, 05/01/39

    3,375       3,796,234  
 

 

 

SCHEDULE OF INVESTMENTS      1  


Schedule of Investments  (unaudited) (continued)

October 31, 2017

  

BlackRock MuniYield Michigan Quality Fund, Inc. (MIY)

(Percentages shown are based on Net Assets)

 

     Par
(000)
    Value  
County/City/Special District/School District (continued)  

Portage Public Schools, GO, Refunding School Building & Site:

   

5.00%, 11/01/34

  $ 1,000     $ 1,155,520  

5.00%, 11/01/36

    1,000       1,147,420  

5.00%, 11/01/37

    1,250       1,431,250  

5.00%, 11/01/35

    1,340       1,542,956  

Romeo Community School District, GO, Refunding School Building & Site, Series 1 (Q-SBLF), 5.00%, 05/01/41

    2,250       2,554,605  

Troy School District, GO, School Building & Site (Q-SBLF), 5.00%, 05/01/28

    2,000       2,325,220  

Walled Lake Consolidated School District, GO, School Building & Site (Q-SBLF):

   

5.00%, 5/01/37

    2,850       3,219,132  

5.00%, 5/01/40

    2,630       2,958,198  

5.00%, 5/01/43

    1,530       1,713,753  

Waterford School District, GO, (Q-SBLF), 3.00%, 05/01/37

    2,000       1,917,020  

West Bloomfield School District, GO, School Building & Site (AGM):

   

5.00%, 5/01/34

    1,285       1,493,710  

5.00%, 5/01/35

    1,800       2,085,912  

Zeeland Public Schools, GO, School Building & Site, Series A (AGM):

   

5.00%, 5/01/33

    1,000       1,154,430  

5.00%, 5/01/34

    1,000       1,150,040  

5.00%, 5/01/35

    1,000       1,147,850  
   

 

 

 
      121,523,721  
Education — 26.0%  

City of Grand Rapids Michigan, EDC, RB, Ferris State University Project, Series A, 5.50%, 10/01/35

    760       829,722  

Eastern Michigan University, Refunding RB, Series A (BAM):

   

5.00%, 3/01/36

    500       574,695  

3.25%, 3/01/37

    1,075       1,055,252  

Ferris State University, Refunding RB:

   

5.00%, 10/01/41

    2,250       2,569,365  

General (AGM), 4.50%, 10/01/24

    1,595       1,643,424  

General (AGM), 4.50%, 10/01/25

    1,405       1,447,782  
     Par
(000)
    Value  
Education (continued)  

Grand Valley State University, RB, (NPFGC), 5.50%, 02/01/18

  $ 390     $ 391,314  

Michigan Finance Authority, Refunding RB:

   

College for Creative Studies, 4.00%, 12/01/33

    1,720       1,715,906  

College for Creative Studies, 5.00%, 12/01/36

    1,550       1,689,283  

College for Creative Studies, 5.00%, 12/01/40

    2,900       3,079,017  

College for Creative Studies, 5.00%, 12/01/45

    4,400       4,646,092  

Series 25 A, AMT, Student Loan Revenue, 4.00%, 11/01/28

    8,750       9,124,325  

Series 25 A, AMT, Student Loan Revenue, 4.00%, 11/01/29

    5,900       6,130,218  

Series 25 A, AMT, Student Loan Revenue, 4.00%, 11/01/30

    2,850       2,951,859  

Series 25 A, AMT, Student Loan Revenue, 4.00%, 11/01/31

    3,150       3,252,281  

Michigan State University, Refunding RB, General, Series C:

   

5.00%, 2/15/40

    8,470       9,068,236  

5.00%, 2/15/44

    1,000       1,070,630  

Michigan Technological University, RB, General, Series A, 5.00%, 10/01/45

    1,800       2,047,806  

Oakland University, RB:

   

5.00%, 3/01/41

    3,635       4,121,363  

General, 5.00%, 3/01/32

    400       445,308  

General, Series A, 5.00%, 3/01/38

    5,490       6,121,460  

General, Series A, 5.00%, 3/01/43

    16,845       18,685,316  

University of Michigan, RB, Series A, 5.00%, 04/01/39

    3,425       3,936,010  

University of Michigan, Refunding RB, 5.00%, 04/01/46

    10,000       11,581,900  

Wayne State University, RB, General, Series A, 5.00%, 11/15/40

    3,000       3,390,840  
 

 

 

2    2017 BLACKROCK QUARTERLY REPORT TO SHAREHOLDERS


Schedule of Investments  (unaudited) (continued)

October 31, 2017

  

BlackRock MuniYield Michigan Quality Fund, Inc. (MIY)

(Percentages shown are based on Net Assets)

 

     Par
(000)
    Value  
Education (continued)            

Western Michigan University, Refunding RB, General, University and College Improvements:

   

5.25%, 11/15/40

  $ 3,500     $ 3,936,030  

5.25%, 11/15/43

    8,475       9,711,842  

(AGM), 5.25%, 11/15/33

    1,000       1,156,820  

(AGM), 5.00%, 11/15/39

    1,750       1,981,123  
   

 

 

 
      118,355,219  
Health — 34.3%            

Grand Traverse County Hospital Finance Authority, RB, Series A:

   

5.00%, 7/01/44

    4,230       4,620,514  

5.00%, 7/01/47

    2,200       2,400,376  

Kalamazoo Hospital Finance Authority, RB, Bronson Methodist Hospital (AGM):

   

5.25%, 5/15/20(a)

    4,140       4,545,554  

5.25%, 5/15/36

    3,360       3,589,488  

Kent Hospital Finance Authority Michigan, Refunding RB, Spectrum Health, Series A, 5.00%, 11/15/29

    7,500       8,250,975  

Michigan Finance Authority, RB:

   

Beaumont Health Credit Group, 4.00%, 11/01/46

    1,025       1,044,014  

Sparrow Obligated Group, 5.00%, 11/15/36

    2,500       2,774,725  

Sparrow Obligated Group, 5.00%, 11/15/45

    3,750       4,164,937  

Michigan Finance Authority, Refunding RB:

   

Henry Ford Health System, 5.00%, 11/15/37

    3,000       3,368,730  

Henry Ford Health System, 3.25%, 11/15/42

    1,145       1,047,286  

Henry Ford Health System, 4.00%, 11/15/46

    8,500       8,674,760  

Hospital, McLaren Health Care, 5.00%, 5/15/32

    1,000       1,133,480  

Hospital, McLaren Health Care, 5.00%, 5/15/33

    2,000       2,306,340  

Hospital, McLaren Health Care, 5.00%, 5/15/34

    5,000       5,747,500  

Hospital, McLaren Health Care, 5.00%, 5/15/34

    1,500       1,687,290  

Hospital, McLaren Health Care, 5.00%, 5/15/35

    4,945       5,669,739  

Hospital; Trinity Health Credit Group, 5.00%, 12/01/39

    4,980       5,489,105  
     Par
(000)
    Value  
Health (continued)            

Michigan Finance Authority, Refunding RB (continued):

 

MidMichigan Health, 5.00%, 6/01/39

  $ 1,500     $ 1,683,960  

Trinity Health Credit Group, 5.00%, 12/01/21(a)

    20       22,812  

Trinity Health Credit Group, 5.00%, 12/01/31

    5,000       5,557,900  

Trinity Health Credit Group, 5.00%, 12/01/35

    6,500       7,174,375  

Michigan State Hospital Finance Authority, RB, Ascension Health Senior Credit Group, 5.00%, 11/15/25

    6,000       6,412,140  

Michigan State Hospital Finance Authority, Refunding RB:

   

Ascension Senior Credit Group, 5.00%, 11/15/47

    2,750       3,119,490  

Henry Ford Health System,
5.75%, 11/15/19(a)

    3,165       3,455,800  

Hospital, Oakwood Obligated Group, 5.00%, 11/01/32

    4,000       4,408,760  

Hospital, Sparrow Obligated Group, 5.00%, 11/15/17(a)

    3,330       3,334,895  

Hospital, Sparrow Obligated Group, 5.00%, 11/15/31

    1,365       1,367,007  

McLaren Health Care, Series A,
5.75%, 5/15/18(a)

    6,000       6,150,660  

McLaren Health Care, Series A, 5.00%, 6/01/35

    2,250       2,451,825  

Trinity Health, 6.50%, 12/01/18(a)

    425       449,437  

Trinity Health, 6.50%, 12/01/33

    80       84,329  

Trinity Health Credit Group,
6.50%, 12/01/18(a)

    1,895       2,003,962  

Trinity Health Credit Group, Series A, 6.13%, 12/01/18(a)

    940       990,798  

Trinity Health Credit Group, Series A, 6.25%, 12/01/18(a)

    1,500       1,583,070  

Trinity Health Credit Group, Series C, 4.00%, 12/01/32

    5,300       5,488,945  

Royal Oak Hospital Finance Authority Michigan, Refunding RB:

   

Beaumont Health Credit Group, Series D, 5.00%, 9/01/39

    27,365       30,204,940  
 

 

 

SCHEDULE OF INVESTMENTS      3  


Schedule of Investments  (unaudited) (continued)

October 31, 2017

  

BlackRock MuniYield Michigan Quality Fund, Inc. (MIY)

(Percentages shown are based on Net Assets)

 

     Par
(000)
    Value  
Health (continued)  

Royal Oak Hospital Finance Authority Michigan, Refunding RB (continued):

 

William Beaumont Hospital, Series V, 8.25%, 9/01/18(a)

  $ 2,000     $ 2,118,200  

William Beaumont Hospital, Series W, 6.00%, 8/01/19(a)

    1,500       1,624,095  
   

 

 

 
      156,202,213  
Housing — 5.3%  

Michigan State HDA, RB:

   

M/F Housing, Rental Housing Revenue, Series A, 4.45%, 10/01/34

    1,000       1,053,400  

M/F Housing, Rental Housing Revenue, Series A, 4.63%, 10/01/39

    3,490       3,638,639  

M/F Housing, Rental Housing Revenue, Series A, 4.75%, 10/01/44

    5,000       5,201,050  

M/F Housing, Series A, 4.30%, 10/01/40

    3,320       3,418,172  

S/F Housing, Series A, 4.75%, 12/01/25

    2,260       2,392,911  

Williams Pavilion, AMT (Ginnie Mae), 4.75%, 4/20/37

    3,290       3,292,566  

Michigan State HDA, Refunding RB, M/F Housing, Series A, 6.05%, 10/01/41

    4,875       5,264,513  
   

 

 

 
      24,261,251  
State — 16.1%  

Michigan Finance Authority, Refunding RB, Detroit Regional Convention Facility Authority Local Project Bonds, 5.00%, 10/01/39

    5,400       6,001,992  

Michigan State Finance Authority, RB, Local Government Loan Program, Series F, 5.00%, 04/01/31

    1,000       1,079,450  

Michigan Strategic Fund, RB, Michigan Senate Offices Project, Series A, 5.25%, 10/15/40

    3,000       3,383,850  

Michigan Strategic Fund, Refunding RB, Cadillac Place Office Building Project, 5.25%, 10/15/31

    7,000       7,986,370  

State of Michigan, COP, (AMBAC), 0.00%, 06/01/22(c)(d)

    3,000       2,788,800  
     Par
(000)
    Value  
State (continued)  

State of Michigan Building Authority, RB, Local Government Loan Program, Series F, 5.25%, 10/01/41

  $ 8,595     $ 9,270,911  

State of Michigan Building Authority, Refunding RB:

   

Facilities Program, Series I, 6.25%, 10/15/18(a)

    6,040       6,332,215  

Facilities Program, Series I, 6.25%, 10/15/38

    210       219,994  

Facilities Program, Series I (AGC), 5.25%, 10/15/24

    6,000       6,457,920  

Facilities Program, Series I (AGC), 5.25%, 10/15/25

    3,500       3,765,685  

Facilities Program, Series I (AGC), 5.25%, 10/15/26

    1,000       1,075,710  

Facilities Program, Series I-A, 5.50%, 10/15/45

    2,000       2,275,360  

Facilities Program, Series II (AGM), 5.00%, 10/15/26

    7,500       8,030,325  

Series I, 5.00%, 4/15/41

    4,750       5,406,973  

State of Michigan Trunk Line Fund, RB:

   

5.00%, 11/15/33

    3,000       3,375,840  

5.00%, 11/15/36

    5,345       5,994,631  
   

 

 

 
      73,446,026  
Transportation — 10.0%  

Wayne County Airport Authority, RB:

   

Detroit Metropolitan Wayne County Airport, AMT (NPFGC), 5.00%, 12/01/39

    1,475       1,650,908  

Series B, AMT, 5.00%, 12/01/42

    1,000       1,138,310  

Series B, AMT, 5.00%, 12/01/47

    1,250       1,416,025  

Series D, 5.00%, 12/01/35

    3,850       4,449,599  

Series D, 5.00%, 12/01/45

    5,000       5,685,800  

Wayne County Airport Authority, Refunding RB, AMT:

   

(AGC), 5.75%, 12/01/25

    4,000       4,193,440  

(AGC), 5.75%, 12/01/26

    4,060       4,256,342  

(AGC), 5.38%, 12/01/32

    13,000       13,475,020  
 

 

 

4    2017 BLACKROCK QUARTERLY REPORT TO SHAREHOLDERS


Schedule of Investments  (unaudited) (continued)

October 31, 2017

  

BlackRock MuniYield Michigan Quality Fund, Inc. (MIY)

(Percentages shown are based on Net Assets)

 

     Par
(000)
    Value  
Transportation (continued)  

Wayne County Airport Authority, Refunding RB, AMT (continued):

   

Series F, 5.00%, 12/01/34

  $ 8,000     $ 9,152,720  
   

 

 

 
      45,418,164  
Utilities — 15.3%  

City of Detroit Michigan Sewage Disposal System, Refunding RB, Senior Lien, Series A, 5.25%, 07/01/39

    2,655       2,943,572  

City of Detroit Michigan Water Supply System Revenue, RB, Series A:

   

Senior Lien, 5.25%, 7/01/41

    4,325       4,705,557  

(NPFGC), 5.00%, 7/01/34

    10       10,029  

City of Grand Rapids Michigan Sanitary Sewer System, Refunding RB, Series A (NPFGC), 5.50%, 01/01/22

    1,280       1,402,534  

City of Holland Michigan Electric Utility System, RB, Series A, 5.00%, 07/01/39

    10,000       11,178,500  

City of Lansing Michigan, RB, Board of Water & Light Utilities System, Series A:

   

5.00%, 7/01/27

    3,180       3,568,024  

5.00%, 7/01/31

    6,830       7,642,702  

5.00%, 7/01/37

    3,335       3,694,146  

5.50%, 7/01/41

    5,000       5,656,800  

City of Port Huron Michigan, RB, Water Supply System:

   

5.25%, 10/01/31

    500       553,510  

5.63%, 10/01/40

    1,500       1,684,425  

Great Lakes Water Authority Water Supply System Revenue, RB, Second Lien, Series B, 5.00%, 07/01/46

    10,000       11,143,900  

Michigan Finance Authority, Refunding RB:

   

Government Loan Program, 5.00%, 7/01/34

    2,000       2,251,560  

Government Loan Program, 5.00%, 7/01/35

    750       842,160  

Senior Lien, Detroit Water and Sewer, Series C-3 (AGM), 5.00%, 7/01/31

    1,000       1,136,760  

Senior Lien, Detroit Water and Sewer, Series C-3 (AGM), 5.00%, 7/01/32

    5,250       5,944,102  

Senior Lien, Detroit Water and Sewer, Series C-3 (AGM), 5.00%, 7/01/33

    3,000       3,383,010  
     Par
(000)
    Value  
Utilities (continued)  

Michigan Municipal Bond Authority, RB, State Clean Water Revolving Fund, Pooled Project, 5.00%, 10/01/20(a)

  $ 2,000     $ 2,210,900  
   

 

 

 
      69,952,191  
   

 

 

 

Total Municipal Bonds — 137.5%

 

    627,045,405  
   

 

 

 

Municipal Bonds Transferred to Tender Option Bond Trusts(e)

 

Michigan — 22.1%            
County/City/Special District/School District — 1.7%  

Portage Public Schools Michigan, GO, School Building & Site (AGM), 5.00%, 05/01/18(a)

    7,500       7,646,525  
   

 

 

 
Education — 11.8%            

Saginaw Valley State University, Refunding RB, General (AGM), 5.00%, 07/01/18(a)

    10,000       10,256,800  

State of Michigan University, Refunding RB, Series A, 5.00%, 08/15/38

    10,000       11,477,750  

Wayne State University, RB, General, Series A, 5.00%, 11/15/40

    10,000       11,294,200  

Wayne State University, Refunding RB, General (AGM):

   

5.00%, 11/15/18(a)

    8,880       9,198,611  

5.00%, 11/15/35

    11,120       11,518,981  
   

 

 

 
      53,746,342  
Health — 7.3%            

Michigan Finance Authority, RB, Beumont Health Credit Group, 5.00%, 11/01/44

    10,002       11,144,010  

Michigan Finance Authority, Refunding RB, Hospital, Trinity Health Credit Group, 5.00%, 12/01/39

    190       209,251  
 

 

 

SCHEDULE OF INVESTMENTS      5  


Schedule of Investments  (unaudited) (continued)

October 31, 2017

  

BlackRock MuniYield Michigan Quality Fund, Inc. (MIY)

(Percentages shown are based on Net Assets)

 

     Par
(000)
    Value  
Health (continued)            

Michigan Finance Authority, Refunding RB: Trinity Health Group, Series 2016, 5.00%, 12/01/45

  $ 19,735     $ 22,269,179  
   

 

 

 
      33,622,440  
State — 1.3%            

Michigan State Building Authority, Refunding RB, Facilities Program, Series I, 5.00%, 10/15/45

    5,150       5,858,975  
   

 

 

 

Total Municipal Bonds Transferred to Tender Option Bond Trusts — 22.1%

      100,874,282  
   

 

 

 

Total Long-Term Investments
(Cost — $686,961,490) — 159.6%

      727,919,687  
   

 

 

 

    

Short-Term Securities

 

    

Shares

   

    

Value

 

BlackRock Liquidity Funds, MuniCash, Institutional Class,
0.74%(f)(g)

    5,655,889     $ 5,657,586  
   

 

 

 

Total Short-Term Securities
(Cost — $5,657,242) — 1.2%

 

    5,657,586  
   

 

 

 

Total Investments
(Cost — $692,618,732) — 160.9%

 

    733,577,273  

Other Assets Less Liabilities — 1.4%

 

    6,569,017  

Liability for TOB Trust Certificates, Including Interest Expense and Fees Payable — (11.3)%

 

    (51,682,147

Loan for TOB Trust Certificates — (0.2)%

 

    (939,764

VRDP Shares at Liquidation Value, Net of Deferred Offering Costs — (50.8)%

 

    (231,468,547
   

 

 

 

Net Assets Applicable to Common Shares — 100.0%

 

  $ 456,055,832  
   

 

 

 
 

Notes to Schedule of Investments

 

(a)  U.S. Government securities, held in escrow, are used to pay interest on this security, as well as to retire the bond in full at the date indicated, typically at a premium to par.
(b)  When-issued security.
(c)  Zero-coupon bond.
(d)  Security is collateralized by municipal bonds or U.S. Treasury obligations.
(e)  Represent bonds transferred to a TOB Trust in exchange of cash and residual certificates received by the Fund. These bonds serve as collateral in a secured borrowing.
(f)  Annualized 7-day yield as of period end.
(g)  During the period ended October 31, 2017, investments in issuers considered to be an affiliate of the Fund for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:

 

Affiliate    Shares
Held at
July 31, 2017
     Net Activity      Shares
Held at
October 31, 2017
     Value at
October 31, 2017
     Income      Net Realized
Gain (Loss)(a)
     Change in
Unrealized
Appreciation
(Depreciation)
 

BlackRock Liquidity Funds, MuniCash, Institutional Class

     4,666,675        989,214        5,655,889      $ 5,657,586      $ 6,669      $ 475      $ (632

 

  (a)  Includes net capital gain distributions, if applicable.  

For Fund compliance purposes, the Fund’s sector classifications refer to one or more of the sector sub-classifications used by one or more widely recognized market indexes or rating group indexes, and/or as defined by the investment adviser. These definitions may not apply for purposes of this report, which may combine such sector sub-classifications for reporting ease.

 

 

6    2017 BLACKROCK QUARTERLY REPORT TO SHAREHOLDERS


Schedule of Investments  (unaudited) (continued)

October 31, 2017

  

BlackRock MuniYield Michigan Quality Fund, Inc. (MIY)

(Percentages shown are based on Net Assets)

 

Derivative Financial Instruments Outstanding as of Period End

Futures Contracts

 

Description    Number of
Contracts
       Expiration
Date
       Notional
Amount (000)
  Value /
Unrealized
Appreciation
(Depreciation)
 

Short Contracts

              

5-Year U.S. Treasury Note

     (95        December 2017        $11,133   $ 102,194  

10-Year U.S. Treasury Note

     (109        December 2017        13,618     195,211  

Long U.S. Treasury Bond

     (88        December 2017        13,417     241,917  

Ultra Long U.S. Treasury Bond

     (26        December 2017        4,284     83,804  
              

 

 

 

Total

               $ 623,126  
              

 

 

 

 

Portfolio Abbreviations
AGC    Assured Guarantee Corp.
AGM    Assured Guaranty Municipal Corp.
AMBAC    American Municipal Bond Assurance Corp.
AMT    Alternative Minimum Tax (subject to)
BAM    Build America Mutual Assurance Co.
COP    Certificates of Participation
EDC    Economic Development Corp.
GO    General Obligation Bonds
HDA    Housing Development Authority
M/F    Multi-Family
NPFGC    National Public Finance Guarantee Corp.
RB    Revenue Bonds
S/F    Single-Family

    

 

 

 

SCHEDULE OF INVESTMENTS      7  


Schedule of Investments  (unaudited) (continued)

October 31, 2017

  

BlackRock MuniYield Michigan Quality Fund, Inc. (MIY)

(Percentages shown are based on Net Assets)

 

Fair Value Hierarchy as of Period End

Various inputs are used in determining the fair value of investments and derivative financial instruments. These inputs to valuation techniques are categorized into a fair value hierarchy consisting of three broad levels for financial reporting purposes as follows:

 

    Level 1 — Unadjusted price quotations in active markets/exchanges for identical assets or liabilities that the Fund has the ability to access

 

    Level 2 — Other observable inputs (including, but not limited to, quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs)

 

    Level 3 — Unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the Fund’s own assumptions used in determining the fair value of investments and derivative financial instruments)

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the fair value hierarchy classification is determined based on the lowest level input that is significant to the fair value measurement in its entirety. Investments classified within Level 3 have significant unobservable inputs used by the BlackRock Global Valuation Methodologies Committee (the “Global Valuation Committee”) in determining the price for Fair Valued Investments. Level 3 investments include equity or debt issued by privately held companies or funds. There may not be a secondary market, and/or there are a limited number of investors. Level 3 investments may also be adjusted to reflect illiquidity and/or non-transferability, with the amount of such discount estimated by the Global Valuation Committee in the absence of market information.

Changes in valuation techniques may result in transfers into or out of an assigned level within the hierarchy. In accordance with the Fund’s policy, transfers between different levels of the fair value hierarchy are deemed to have occurred as of the beginning of the reporting period. The categorization of a value determined for investments and derivative financial instruments is based on the pricing transparency of the investments and derivative financial instruments and is not necessarily an indication of the risks associated with investing in those securities. For information about the Fund’s policy regarding valuation of investments and derivative financial instruments, refer to the Fund’s most recent financial statements as contained in its semi-annual report.

The following tables summarize the Fund’s investments and derivative financial instruments categorized in the disclosure hierarchy:

 

      Level 1        Level 2        Level 3        Total  

Assets:

                 

Investments:

                 

Long-Term Investments(a)

   $        $ 727,919,687                 $ 727,919,687  

Short-Term Securities

     5,657,586                            5,657,586  
  

 

 

      

 

 

      

 

 

      

 

 

 

Total

   $ 5,657,586        $ 727,919,687                 $ 733,577,273  
  

 

 

      

 

 

      

 

 

      

 

 

 
                 

Derivative Financial Instruments(b)

                 

Assets:

                 

Interest rate contracts

   $ 623,126                               —        $ 623,126  
  

 

 

      

 

 

      

 

 

      

 

 

 

 

  (a) See above Schedule of Investments for values in each sector.  
  (b) Derivative financial instruments are futures contracts which are valued at the unrealized appreciation (depreciation) on the instrument.  

 

 

8    2017 BLACKROCK QUARTERLY REPORT TO SHAREHOLDERS


Schedule of Investments  (unaudited) (continued)

October 31, 2017

  

BlackRock MuniYield Michigan Quality Fund, Inc. (MIY)

(Percentages shown are based on Net Assets)

 

The Fund may hold assets and/or liabilities in which the fair value approximates the carrying amount for financial statements purposes. As of period end, such assets and/or liabilities are categorized within the disclosure hierarchy as follows:

 

      Level 1        Level 2        Level 3        Total  

Liabilities:

 

TOB Trust Certificates

   $             —        $ (51,562,292      $             —        $ (51,562,292

Loan for TOB Trust Certificates

              (939,764                 (939,764

VRDP Shares at Liquidation Value

              (231,900,000                 (231,900,000
  

 

 

      

 

 

      

 

 

      

 

 

 

Total

            $ (284,402,056               $ (284,402,056
  

 

 

      

 

 

      

 

 

      

 

 

 

During the period ended October 31, 2017, there were no transfers between levels.

 

 

SCHEDULE OF INVESTMENTS      9  


Item 2 – Controls and Procedures

 

2(a) – The registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”)) are effective as of a date within 90 days of the filing of this report based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended.

 

2(b) – There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the registrant’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

 

Item 3 – Exhibits

 

     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.

 

BlackRock MuniYield Michigan Quality Fund, Inc.
By:      

/s/ John M. Perlowski

      
  John M. Perlowski
  Chief Executive Officer (principal executive officer) of
  BlackRock MuniYield Michigan Quality Fund, Inc.

Date: December 21, 2017

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/ John M. Perlowski

      
  John M. Perlowski
  Chief Executive Officer (principal executive officer) of
  BlackRock MuniYield Michigan Quality Fund, Inc.

Date: December 21, 2017

 

By:      

/s/ Neal J. Andrews

      
  Neal J. Andrews
  Chief Financial Officer (principal financial officer) of
  BlackRock MuniYield Michigan Quality Fund, Inc.

Date: December 21, 2017