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: 07/31/2019

Date of reporting period: 10/31/2018

 

Item 1 – Schedule of Investments

 

Schedule of Investments  (unaudited) 

October 31, 2018

   

BlackRock MuniYield Michigan Quality Fund, Inc. (MIY)

(Percentages shown are based on Net Assets)

 

Security   Par
(000)		     Value  

Municipal Bonds — 140.4%

 

Michigan — 140.4%

 

Corporate — 3.9%  

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

   $ 14,500     $ 16,773,455  
   

 

 

  
County/City/Special District/School District — 29.1%  

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

    

4.38%, 05/01/27

     1,600       1,664,688  

4.50%, 05/01/29

     1,505       1,564,086  

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

    

5.00%, 05/01/35

     1,100       1,209,505  

5.00%, 05/01/36

     1,500       1,644,135  

5.00%, 05/01/37

     1,170       1,280,003  

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

     2,965       3,243,087  

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

    

5.00%, 05/01/43

     4,475       4,899,275  

5.00%, 05/01/47

     740       802,293  

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

     5,185       5,627,799  

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

    

5.50%, 05/01/21

     1,200       1,296,012  

5.50%, 05/01/21

     2,185       2,359,822  

Country of Saginaw Michigan, GO,
4.00%, 11/01/42

     2,000       2,001,500  

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

     1,000       1,014,620  

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

     5,300       5,381,779  

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

    

5.00%, 05/01/32

     1,500       1,652,160  

5.00%, 05/01/33

     1,600       1,756,048  

5.00%, 05/01/34

     1,200       1,313,520  

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

     1,140       1,233,936  

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

    

5.00%, 05/01/35

     700       780,416  
Security   Par
(000)		     Value  
County/City/Special District/School District (continued)  

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

    

5.00%, 05/01/36

   $ 550     $ 611,039  

5.00%, 05/01/37

     550       607,635  

5.00%, 05/01/39

     740       810,722  

5.00%, 05/01/42

     1,000       1,087,960  

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

    

5.00%, 05/01/33

     1,500       1,653,555  

5.00%, 05/01/34

     1,500       1,649,865  

5.00%, 05/01/35

     1,000       1,099,300  

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

     4,950       5,314,270  

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

    

5.00%, 05/01/38

     750       819,960  

5.00%, 05/01/43

     2,000       2,166,860  

5.00%, 05/01/47

     3,225       3,484,322  

Gibraltar School District, GO, (Q-SBLF):

    

5.00%, 05/01/35

     1,000       1,112,620  

5.00%, 05/01/36

     750       832,553  

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

    

5.50%, 05/01/21(a)

     1,540       1,661,275  

5.50%, 05/01/36

     460       493,552  

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

    

5.50%, 05/01/21(a)

     2,575       2,781,026  

5.50%, 05/01/32

     1,000       1,077,480  

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

     1,000       1,131,410  

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

     3,250       3,493,977  

Gull Lake Community School District, GO, School Building & Site, Series I (Q-SBLF), 5.00%, 05/01/45

     4,000       4,366,360  

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

     6,750       7,257,802  

Hudsonville Public Schools, GO, Refunding Unlimited Tax (Q-SBLF):

    

5.00%, 05/01/38

     1,835       2,008,976  

5.00%, 05/01/40

     2,450       2,669,226  
 

 

 

     1  

Schedule of Investments  (unaudited) (continued)

October 31, 2018

   

BlackRock MuniYield Michigan Quality Fund, Inc. (MIY)

(Percentages shown are based on Net Assets)

 

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

Jackson Michigan Public Schools, GO, School Building & Site (Q-SBLF), 5.00%, 05/01/42

   $ 4,000     $ 4,409,880  

Kentwood Public Schools, GO, School Building & Site:

    

5.00%, 05/01/41

     1,120       1,209,242  

5.00%, 05/01/44

     1,815       1,955,935  

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

     5,000       5,428,750  

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

     3,375       3,652,661  

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

    

5.00%, 11/01/36

     1,000       1,103,710  

5.00%, 11/01/37

     1,250       1,376,163  

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

     2,150       2,327,160  

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

     2,000       2,223,580  

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

    

5.00%, 05/01/37

     2,850       3,109,920  

5.00%, 05/01/40

     2,630       2,866,043  

5.00%, 05/01/43

     1,530       1,663,615  

West Bloomfield School District, GO, School Building & Site (AGM), 5.00%, 05/01/35

     1,800       1,991,394  

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

    

5.00%, 05/01/33

     1,000       1,102,370  

5.00%, 05/01/34

     1,000       1,099,910  

5.00%, 05/01/35

     1,000       1,099,300  
   

 

 

  
      125,536,062  
Education — 24.3%  

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

     760       803,654  

Eastern Michigan University, Refunding RB, Series A (BAM), 5.00%, 03/01/36

     500       548,085  

Ferris State University, Refunding RB:

    

5.00%, 10/01/41

     2,250       2,445,795  

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

     1,595       1,598,126  

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

     1,405       1,407,796  
Security   Par
(000)		     Value  
Education (continued)  

Lake Superior State University, RB, General (AGM), 5.00%, 01/15/48

   $ 3,750     $ 4,027,163  

Michigan Finance Authority, Refunding RB:

    

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

     1,720       1,639,212  

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

     1,550       1,606,870  

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

     2,900       2,986,333  

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

     4,400       4,520,868  

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

     5,900       5,958,646  

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

     2,850       2,872,002  

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

     3,150       3,167,357  

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

    

5.00%, 02/15/40

     8,470       8,722,999  

5.00%, 02/15/44

     1,000       1,030,510  

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

     1,800       1,971,432  

Northern Michigan University, Refunding RB, General, Series A,
5.00%, 12/01/35

     1,245       1,383,008  

Oakland University, RB:

    

5.00%, 03/01/41

     3,635       3,921,256  

General, 5.00%, 03/01/32

     400       426,996  

General, Series A, 5.00%, 03/01/38

     5,490       5,907,130  

General, Series A, 5.00%, 03/01/43

     16,845       18,103,658  

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

     3,425       3,819,218  

Wayne State University, GRB, Series A,
5.00%, 11/15/43

     6,030       6,607,915  

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

     3,000       3,282,870  

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

    

5.25%, 11/15/40

     3,500       3,796,800  

5.25%, 11/15/43

     8,475       9,397,673  

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

     1,000       1,111,350  

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

     1,750       1,915,865  
   

 

 

  
      104,980,587  
 

 

 

2   

Schedule of Investments  (unaudited) (continued)

October 31, 2018

   

BlackRock MuniYield Michigan Quality Fund, Inc. (MIY)

(Percentages shown are based on Net Assets)

 

Security   Par
(000)		     Value  
Health — 32.1%  

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

    

5.00%, 07/01/44

   $ 4,230     $ 4,477,413  

5.00%, 07/01/47

     2,200       2,325,246  

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

    

5.25%, 05/15/20(a)

     4,140       4,327,749  

5.25%, 05/15/36

     3,360       3,475,181  

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

     7,500       7,999,500  

Michigan Finance Authority, RB:

    

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

     1,025       973,617  

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

     2,500       2,673,000  

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

     3,750       3,988,162  

Michigan Finance Authority, Refunding RB:

    

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

     3,000       3,242,940  

Henry Ford Health System, 5.00%, 11/15/41

     1,000       1,073,110  

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

     1,145       939,003  

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

     8,500       8,046,950  

Hospital, McLaren Health Care, 5.00%, 05/15/32

     1,000       1,096,120  

Hospital, McLaren Health Care, 5.00%, 05/15/33

     2,000       2,183,660  

Hospital, McLaren Health Care, 5.00%, 05/15/34

     5,000       5,440,800  

Hospital, McLaren Health Care, 5.00%, 05/15/34

     1,500       1,632,240  

Hospital, McLaren Health Care, 5.00%, 05/15/35

     4,945       5,359,935  

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

     4,980       5,249,816  

MidMichigan Health, 5.00%, 06/01/39

     1,500       1,610,760  

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

     20       21,609  

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

     5,000       5,331,550  

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

     6,500       6,891,430  
Security   Par
(000)		     Value  
Health (continued)  

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

   $ 6,000     $ 6,161,760  

Michigan State Hospital Finance Authority, Refunding RB:

    

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

     2,750       2,980,615  

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

     3,165       3,284,099  

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

     4,000       4,310,200  

McLaren Health Care, Series A,
5.00%, 06/01/35

     2,250       2,396,137  

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

     425       426,573  

Trinity Health, 6.50%, 12/01/33

     80       80,300  

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

     1,895       1,902,012  

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

     940       943,205  

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

     1,500       1,505,265  

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

     5,300       5,390,100  

Royal Oak Hospital Finance Authority Michigan, Refunding RB:

    

Beaumont Health Credit Group, Series D, 5.00%, 09/01/39

     27,365       29,179,573  

William Beaumont Hospital, Series W,
6.00%, 08/01/19(a)

     1,500       1,543,545  
   

 

 

  
      138,463,175  
Housing — 7.2%  

Michigan State HDA, RB:

    

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

     1,000       1,022,480  

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

     3,490       3,543,467  

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

     5,000       5,077,350  

Series A, 4.00%, 10/01/43

     7,420       7,270,561  

Williams Pavilion, AMT (Ginnie Mae),
4.75%, 04/20/37

     3,190       3,191,914  

Michigan State Housing Development Authority, RB, M/F Housing, Series A, 4.30%, 10/01/40

     3,320       3,337,131  
 

 

 

     3  

Schedule of Investments  (unaudited) (continued)

October 31, 2018

   

BlackRock MuniYield Michigan Quality Fund, Inc. (MIY)

(Percentages shown are based on Net Assets)

 

Security   Par
(000)		     Value  
Housing (continued)  

State of Michigan Housing Development Authority, RB, S/F Housing, Series C, 4.13%, 12/01/38(b)

   $ 7,500     $ 7,508,250  
   

 

 

  
      30,951,153  
State — 16.6%  

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

     5,400       5,880,330  

Michigan Finance Authority, RB, Charter County of Wayne Criminal Justice Center Project:

    

5.00%, 11/01/38

     2,500       2,762,925  

5.00%, 11/01/43

     4,000       4,389,160  

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

     1,000       1,060,840  

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

     3,000       3,280,800  

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

     7,000       7,569,520  

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

     3,000       2,749,500  

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

     8,595       9,157,715  

State of Michigan Building Authority, Refunding RB:

    

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

     6,000       6,175,560  

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

     3,500       3,601,395  

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

     1,000       1,028,490  

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

     2,000       2,151,400  

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

     7,500       7,697,550  

Series I, 5.00%, 04/15/41

     4,750       5,182,250  

State of Michigan Trunk Line Fund, RB:

    

5.00%, 11/15/33

     3,000       3,211,590  

5.00%, 11/15/36

     5,345       5,704,237  
   

 

 

  
      71,603,262  
Transportation — 10.1%  

County of Wayne Airport Authority, Refunding RB, AMT (AGC), 5.38%, 12/01/32

     13,000       13,029,510  
Security   Par
(000)		     Value  
Transportation (continued)  

Wayne County Airport Authority, RB:

    

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

   $ 1,475     $ 1,585,168  

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

     1,000       1,069,980  

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

     1,250       1,332,588  

Series D, 5.00%, 12/01/35

     3,850       4,232,112  

Series D, 5.00%, 12/01/45

     5,000       5,424,200  

Wayne County Airport Authority, Refunding RB, AMT:

    

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

     4,000       4,011,760  

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

     4,060       4,071,936  

Series F, 5.00%, 12/01/34

     8,000       8,673,520  
   

 

 

  
      43,430,774  
Utilities — 17.1%  

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

     2,655       2,810,530  

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

    

Senior Lien, 5.25%, 07/01/41

     4,325       4,580,175  

(NPFGC), 5.00%, 07/01/34

     10       10,022  

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

     1,050       1,109,220  

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

     10,000       10,597,600  

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

    

5.00%, 07/01/27

     3,180       3,386,923  

5.00%, 07/01/31

     6,830       7,259,880  

5.00%, 07/01/37

     3,335       3,530,764  

5.50%, 07/01/41

     5,000       5,380,050  

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

    

5.25%, 10/01/31

     500       534,615  

5.63%, 10/01/40

     1,500       1,627,830  

Downriver Utility Wastewater Authority, Refunding RB, (AGM), 5.00%, 04/01/43

     1,000       1,074,520  

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

     10,000       10,701,600  
 

 

 

4   

Schedule of Investments  (unaudited) (continued)

October 31, 2018

   

BlackRock MuniYield Michigan Quality Fund, Inc. (MIY)

(Percentages shown are based on Net Assets)

 

Security   Par
(000)		     Value  
Utilities (continued)  

Karegnondi Water Authority, Refunding RB:

    

5.00%, 11/01/41

   $ 2,750     $ 2,941,070  

5.00%, 11/01/45

     3,000       3,199,110  

Michigan Finance Authority, Refunding RB:

    

Government Loan Program,
5.00%, 07/01/34

     2,000       2,158,340  

Government Loan Program,
5.00%, 07/01/35

     750       807,083  

Senior Lien, Detroit Water and Sewer, Series C-3 (AGM), 5.00%, 07/01/31

     1,000       1,092,530  

Senior Lien, Detroit Water and Sewer, Series C-3 (AGM), 5.00%, 07/01/32

     5,250       5,721,555  

Senior Lien, Detroit Water and Sewer, Series C-3 (AGM), 5.00%, 07/01/33

     3,000       3,261,390  

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

     2,000       2,103,960  
   

 

 

  
      73,888,767  
   

 

 

  

Total Municipal Bonds — 140.4%
(Cost — $590,462,211)

 

     605,627,235  
   

 

 

  

Municipal Bonds Transferred to Tender Option Bond Trusts(e)

 

Michigan — 25.3%

    
Education — 14.5%  

Eastern Michigan University, RB, General ,Series A (AGM), 4.00%, 03/01/44

     10,000       9,689,500  

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

     10,000       10,930,550  

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

     10,000       11,075,005  

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

     10,000       10,937,700  

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

    

5.00%, 11/15/18

     8,880       8,890,213  

5.00%, 11/15/18

     11,120       11,132,790  
   

 

 

  
      62,655,758  
Security   Par
(000)		     Value  
Health — 7.4%  

Michigan Finance Authority, RB, Beaumont Health Credit Group, Series A,
5.00%, 11/01/44

   $ 10,002     $ 10,651,260  

Michigan Finance Authority, Refunding RB:

    

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

     190       200,220  

Trinity Health Corp., Series 2016,
5.00%, 12/01/45

     19,735       21,147,220  
   

 

 

  
      31,998,700  
State — 3.4%  

Michigan State Finance Authority, Refunding RB, Student Loan, AMT, Series A,
4.00%, 11/01/28

     8,750       8,862,927  

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

     5,150       5,638,606  
   

 

 

  
      14,501,533  
   

 

 

  

Total Municipal Bonds Transferred to Tender Option Bond Trusts — 25.3%
(Cost — $110,072,446)

       109,155,991  
   

 

 

  

Total Long-Term Investments — 165.7%
(Cost — $700,534,657)

       714,783,226  
   

 

 

  
     Shares         
Short-Term Securities — 1.5%  

BlackRock Liquidity Funds, MuniCash, Institutional Class,
1.45% (f)(g)

     6,482,640     $ 6,483,288  

Total Short-Term Securities — 1.5%
(Cost — $6,483,288)

 

     6,483,288  
   

 

 

  

Total Investments — 167.2%
(Cost — $707,017,945)

 

   $ 721,266,514  

Other Assets Less Liabilities — 0.5%

 

     1,844,519  

Liability for TOB Trust Certificates, Including Interest Expense and Fees Payable — (14.0)%

 

     (60,209,100 ) 

VRDP Shares at Liquidation Value, Net of Deferred Offering Costs — (53.7)%

 

     (231,478,134 ) 
   

 

 

  

Net Assets Applicable to Common Shares — 100.0%

 

   $ 431,423,799  
   

 

 

  
 

 

 

     5  

Schedule of Investments  (unaudited) (continued)

October 31, 2018

   

BlackRock MuniYield Michigan Quality Fund, Inc. (MIY)

 

(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, 2018, 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
07/31/18		      Net
Activity		      Shares
Held at
10/31/18		      Value at
10/31/18		      Income     

Net

Realized Gain

(Loss) (a)

      Change in
Unrealized
Appreciation
(Depreciation)		  

BlackRock Liquidity Funds, MuniCash, Institutional Class

      3,335,566        3,147,074        6,482,640      $ 6,483,288      $ 11,131      $ 91      $ (425 ) 
           

 

 

     

 

 

     

 

 

     

 

 

  

 

  (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.

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.

Q-SBLF — Qualified School Bond Loan Fund

RB — Revenue Bonds

S/F — Single-Family

 

 

6   

Schedule of Investments  (unaudited) (continued)

October 31, 2018

   

BlackRock MuniYield Michigan Quality Fund, Inc. (MIY)

 

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:

                  

10-Year U.S. Treasury Note

      31          12/19/18        $ 3,672        $ 39,111  

Long U.S. Treasury Bond

      98          12/19/18          13,536          556,814  

5-Year U.S. Treasury Note

      48          12/31/18          5,394          47,350  
                 

 

 

  
                  $ 643,275  
                 

 

 

  

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 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 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 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)

    $ —        $ 714,783,226        $ —        $ 714,783,226  

Short-Term Securities

     6,483,288          —          —          6,483,288  
  

 

 

       

 

 

       

 

 

       

 

 

  
   $ 6,483,288        $ 714,783,226        $ —        $ 721,266,514  
  

 

 

       

 

 

       

 

 

       

 

 

  

Derivative Financial Instruments(b)

                  

Assets:

                 

Interest rate contracts

   $ 643,275        $ —        $ —        $ 643,275  
  

 

 

       

 

 

       

 

 

       

 

 

  

 

  (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.

 

 

 

     7  

Schedule of Investments  (unaudited) (continued)

October 31, 2018

   

BlackRock MuniYield Michigan Quality Fund, Inc. (MIY)

 

The Fund may hold assets and/or liabilities in which the fair value approximates the carrying amount for financial reporting 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

   $ —        $ (60,002,056 )       $ —        $ (60,002,056 ) 

VRDP Shares at Liquidation Value

     —          (231,900,000 )         —          (231,900,000 ) 
  

 

 

       

 

 

       

 

 

       

 

 

  
   $             —        $ (291,902,056 )       $             —        $ (291,902,056 ) 
  

 

 

       

 

 

       

 

 

       

 

 

  

During the period ended October 31, 2018, there were no transfers between levels.

 

 

8   

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 19, 2018  

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 19, 2018  
By:  

/s/ Neal J. Andrews

  
  Neal J. Andrews  
  Chief Financial Officer (principal financial officer) of
  BlackRock MuniYield Michigan Quality Fund, Inc.
Date: December 19, 2018