UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-07136
Name of Fund: BlackRock MuniYield Pennsylvania Insured Fund
Fund Address: P.O. Box 9011
Princeton, NJ 08543-9011
Name and address of agent for service: Robert C. Doll, Jr., Chief Executive
Officer, BlackRock MuniYield Pennsylvania Insured Fund, 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: 10/31/06
Date of reporting period: 11/01/05 - 10/31/06
Item 1 - Report to Stockholders
ALTERNATIVES BLACKROCK SOLUTIONS EQUITIES FIXED INCOME LIQUIDITY
REAL ESTATE
Annual Reports
OCTOBER 31, 2006
(BLACKROCK logo)
BlackRock MuniYield Florida Insured Fund
BlackRock MuniYield Michigan Insured Fund, Inc.
BlackRock MuniYield New Jersey Insured Fund, Inc.
BlackRock MuniYield Pennsylvania Insured Fund
NOT FDIC INSURED
MAY LOSE VALUE
NO BANK GUARANTEE
These reports, including the financial information herein, are transmitted to
shareholders of BlackRock MuniYield Florida Insured Fund, BlackRock MuniYield
Michigan Insured Fund, Inc., BlackRock MuniYield New Jersey Insured Fund, Inc.
and BlackRock MuniYield Pennsylvania Insured Fund for their information. This
is not a prospectus. Past performance results shown in these reports should
not be considered a representation of future performance. The Funds have
leveraged their Common Shares or Stock and intend to remain leveraged by
issuing Preferred Shares or Stock to provide the Common Shareholders or Common
Stock Shareholders with potentially higher rates of return. Leverage creates
risks for Common Shareholders or Common Stock Shareholders, including the
likelihood of greater volatility of net asset value and market price of the
Common Shares or Stock, and the risk that fluctuations in the short-term
dividend rates of the Preferred Shares or Stock may affect the yield to Common
Shareholders or 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 Funds use to determine
how to vote proxies relating to portfolio securities is available (1)
without charge, upon request, by calling toll-free 1-800-441-7762; (2) at
www.blackrock.com; and (3) on the Securities and Exchange Commission's Web
site at http://www.sec.gov. Information about how the Funds vote proxies
relating to securities held in the Funds' portfolios during the most recent
12-month period ended June 30 is available (1) at www.blackrock.com; and
(2) on the Securities and Exchange Commission's Web site at http://www.sec.gov.
BlackRock MuniYield Florida Insured Fund
BlackRock MuniYield Michigan Insured Fund, Inc.
BlackRock MuniYield New Jersey Insured Fund, Inc.
BlackRock MuniYield Pennsylvania Insured Fund
P.O. Box 9011
Princeton, NJ 08543-9011
(GO PAPERLESS...logo)
It's Fast, Convenient, & Timely!
BlackRock MuniYield Florida Insured Fund
BlackRock MuniYield Michigan Insured Fund, Inc.
BlackRock MuniYield New Jersey Insured Fund, Inc.
BlackRock MuniYield Pennsylvania Insured Fund
Change in Fund's Independent Registered Public Accounting Firm
On August 28, 2006, Ernst & Young LLP ("E&Y") resigned as the Independent
Registered Public Accounting Firm of BlackRock MuniYield Michigan Insured
Fund, Inc.
E&Y's reports on the financial statements of the Fund for the past two
fiscal years did not contain an adverse opinion or a disclaimer of opinion
and were not qualified or modified as to uncertainty, audit scope or
accounting principles.
In connection with its audits for the two most recent fiscal years and through
August 28, 2006, (1) there were no disagreements with E&Y on any matter of
accounting principle or practice, financial statement disclosure or auditing
scope or procedure, whereby such disagreements, if not resolved to the
satisfaction of E&Y, would have caused them to make reference to the subject
matter of the disagreements in connection with their report on the financial
statements for such years; and (2) there have been no reportable events (as
defined in item 304(a)(1)(v) of Regulation S-K).
The Audit Committee of the Fund's Board of Directors approved the engagement
of Deloitte & Touche LLP as the Fund's Independent Registered Public
Accounting Firm for the fiscal year ended October 31, 2006.
Announcement of Annual Stockholders Meeting
Each Fund has determined that its annual stockholders meeting originally
scheduled to be held in April 2007 will be postponed until and will be held in
June 2007. Proposals of stockholders intended to be presented at the meeting
must be received by each Fund by February 15, 2007 for inclusion in the Fund's
proxy statement and form of proxy for that meeting. The persons named as
proxies in the proxy materials for each Fund's 2007 Annual meeting of
stockholders may exercise discretionary authority with respect to any
stockholder proposal presented at such meeting if written notice of such
proposal has not been received by the Funds by April 1, 2007. Written
proposals and notices should be sent to the Secretary of the Fund, 800
Scudders Mill Road, Plainsboro, New Jersey 08536.
Swap Agreements
The Funds may 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. Swap agreements involve the risk that the
party with whom each Fund has entered into a swap will default on its
obligation to pay the Fund and the risk that the Fund will not be able to meet
its obligation to pay the other party to the agreement.
ANNUAL REPORTS OCTOBER 31, 2006
A Letter to Shareholders
Dear Shareholder
Ten months into 2006, we are able to say it has been an interesting year for
investors. After a volatile start and far-reaching mid-year correction, the
financial markets regained some positive momentum through late summer and
fall. For the six- and 12-month periods ended October 31, 2006, most major
market indexes managed to post positive returns:
Total Returns as of October 31, 2006 6-month 12-month
U.S. equities (Standard & Poor's 500 Index) +6.11% +16.34%
Small cap U.S. equities (Russell 2000 Index) +0.90 +19.98
International equities (MSCI Europe, Australasia, Far East Index) +3.77 +27.52
Fixed income (Lehman Brothers Aggregate Bond Index) +4.60 + 5.19
Tax-exempt fixed income (Lehman Brothers Municipal Bond Index) +4.12 + 5.75
High yield bonds (Credit Suisse High Yield Index) +4.66 +10.29
The Federal Reserve Board (the Fed), after raising the target short-term
interest rate 17 times between June 2004 and June 2006, finally opted to pause
on August 8, 2006. This left the federal funds rate at 5.25%, where it
remained through the September and October Fed meetings. In interrupting its
two-year rate-hiking campaign, the Fed acknowledged that economic growth is
slowing, led by softness in the housing market. However, the central bankers
continue to take a cautionary position on inflation, despite a decline in
energy prices in recent months. At the time of this writing, the price of oil
had settled into the $60-per-barrel range after reaching nearly $78 per barrel
earlier in the year.
Notwithstanding the mid-year correction, equity markets generally found
support in solid corporate earnings reports in the first three quarters of the
year. Overall corporate health, including strong company balance sheets,
helped to sustain robust dividend-distribution, share-buyback and merger-and-
acquisition activity. Many international equity markets fared equally well or
better, thanks in part to higher economic growth rates and low inflation.
In the U.S. bond market, prices declined for much of the year as investors
focused on decent economic activity and inflation concerns. Bond prices began
to improve in late June as the economy showed signs of weakening and inflation
pressures subsided. Notably, the Treasury curve inverted periodically, a
phenomenon typically associated with periods of economic weakness. At the end
of October, the one-month Treasury bill offered the highest yield on the curve
at 5.18%, while the 30-year Treasury bond had a yield of 4.72%.
Amid the uncertainty inherent in the financial markets, we encourage you to
review your goals periodically with your financial professional and to make
portfolio changes, as needed. For additional insight and timely "food for
thought" for investors, we also invite you to visit Shareholder magazine at
www.blackrock.com/shareholdermagazine. We are pleased to make our investor-
friendly magazine available to you online. We thank you for trusting BlackRock
with your investment assets, and we look forward to continuing to serve your
investment needs.
Sincerely,
(Robert C. Doll, Jr.)
Robert C. Doll, Jr.
President and Director/Trustee
ANNUAL REPORTS OCTOBER 31, 2006
A Discussion With Your Funds' Portfolio Managers
The Funds continued to focus on the dual goals of providing a generous current
income accrual and muting price volatility, while maintaining a high degree of
credit quality within each portfolio.
Describe the recent market environment relative to municipal bonds.
Supported by a positive technical backdrop, municipal bonds managed to
significantly outperform their taxable counterparts for the 12-month period
ended October 31, 2006. Despite considerable volatility, taxable bond yields
were little changed over the past year. Tax-exempt bonds, in the meantime, saw
their yields decline (as prices, which move opposite of yields, rose).
For much of the first half of the fiscal period, longer-maturity U.S. Treasury
bond yields rose (and prices declined) as investors focused on strong U.S.
economic activity and inflationary concerns triggered by rising oil prices. By
mid-May 2006, the yield on 30-year U.S. Treasury bonds rose more than 70 basis
points (.70%) to 5.31%. Bond prices began to improve in late June as economic
activity weakened and inflationary pressures subsided. Bond price improvement
accelerated after the Federal Reserve Board (the Fed) refrained from raising
the target interest rate at its August 8 meeting, a move that came after 17
consecutive interest rate hikes since June 2004. Recent declines in oil
prices, and especially gasoline prices, helped to reverse earlier inflationary
concerns and support higher bond prices. Over the 12-month period, 30-year
U.S. Treasury bond yields fell four basis points to 4.72%, while 10-year
Treasury yields rose four basis points to 4.61%.
Meanwhile, the municipal bond market found support in declining new-issue
volume and increasing investor demand. As reported by Municipal Market Data,
yields on AAA-rated municipal issues maturing in 30 years declined 52 basis
points to 4.07% over the past 12 months. Shorter maturities experienced
smaller yield declines, with yields on AAA-rated municipal issues maturing in
10 years falling 28 basis points to 3.64%.
Demand for municipal product by retail and institutional investors has
remained very strong despite the recent decline in bond yields. The strong
demand is reflected in continued flows into long-term, tax-exempt mutual
funds. As reported by the Investment Company Institute, long-term municipal
bond funds saw net new cash inflows of more than $1.3 billion during September
2006, a material increase from $344 million in July and $283 million in June.
During the first nine months of 2006, long-term tax-exempt bond funds had net
new cash flows of over $9.6 billion, a 43% increase compared to the same
period a year earlier. Recent weekly fund flows, reported by AMG Data,
averaged $416 million in October 2006, well above the July average of $247
million and the year-to-date weekly average of $315 million.
Also supporting municipal bond price improvement has been a decline in new
issuance. In the first 10 months of 2006, more than $295 billion in new long-
term municipal bonds was underwritten, a decline of over 12.5% versus the same
period a year ago. Notably, after declining for much of the year, refunding
activity increased slightly in October as the lower interest rate environment
sparked an increase in refinancing activity. On a year-to-date basis, however,
refunding activity has declined over 50% relative to last year's refunding
issuance.
Looking ahead, the positive technical framework in the municipal marketplace
suggests that the tax-exempt market should continue to perform well. New
supply is expected to remain manageable and tax-exempt bond yield ratios
remain in their recent range of 86% - 89% of comparable long-term U.S.
Treasury yields, well within their recent historic norms. These ratios argue
for continued strong demand from non-traditional, arbitrage-related accounts,
which continue to be attracted to the municipal bond market given its
relatively steep yield curve. Taken together, these factors suggest that
the municipal market is poised to continue to perform well as we approach
year-end.
BlackRock MuniYield Florida Insured Fund
Describe conditions in the State of Florida.
Florida maintains credit ratings of Aa1, AAA and AA+ from Moody's, Standard &
Poor's and Fitch, respectively. The state's consistently strong financial
performance has been the result of a robust service-oriented economy, prudent
budget decisions and a moderate debt profile. Florida's budget for fiscal year
2007 grew 7% to $74 billion and reflects continued spending constraints,
conservative revenue projections and additional deposits to the state's
reserve funds. Florida has adhered to strict budget guidelines in recent
history and we expect that trend to continue, as many of the state's budget
practices have been made into law.
ANNUAL REPORTS OCTOBER 31, 2006
Solid economic growth has allowed the state to build revenue reserves to an
estimated $8 billion and to offer its residents some tax relief in the form of
tax credits, tax-free shopping days and the repeal of the intangible tax.
Overall sales tax growth, which has averaged more than 8% per year in recent
history, should be sufficient to cover any revenue losses associated with the
repeal of the intangible tax, although no new revenue streams have been
created. Spending at the state level remains dominated by education, with over
50% of the budget dedicated to primary and secondary education needs. The
state also faces significant additional spending requirements as a result of
the recent Class Size Initiative and an overall desire to increase the quality
of public education in Florida. In addition to education, we expect that
population growth will increase demand on the government to provide more money
for transportation, public safety, health services and emergency relief.
Overall, Florida's economy continues to outperform on both a national and
regional basis. Job creation has surpassed the national average, leading to
low unemployment and rising personal incomes. The most recent data reflects an
unemployment rate of 3.2%, compared to a national average of 4.4%. These
trends, coupled with a relatively low cost of living, have encouraged
migration into Florida and led to a more diversified demographic base.
Although the demands of a growing population will put pressure on the state's
finances, we continue to believe that Florida is well-positioned given its
financial flexibility and record of proactive management.
How did the Fund perform during the fiscal year?
For the 12-month period ended October 31, 2006, the Common Shares of BlackRock
MuniYield Florida Insured Fund (formerly MuniYield Florida Insured Fund) had
net annualized yields of 4.97% and 5.21%, based on a year-end per share net
asset value of $14.91 and a per share market price of $14.21, respectively,
and $.741 per share income dividends. Over the same period, the total
investment return on the Fund's Common Shares was +6.87%, based on a change in
per share net asset value from $14.72 to $14.91, and assuming reinvestment of
all distributions.
The Fund's return, based on net asset value, modestly lagged the +7%
average return of the Lipper Florida Municipal Debt Funds category for the
12-month period. (Funds in this Lipper category limit their investment to
securities exempt from taxation in Florida or a city in Florida.) The Fund's
underperformance occurred primarily in the first half of the fiscal year when
the yield curve flattened dramatically and short and intermediate maturities
underperformed. We had exposure to these sectors through bonds that had been
prerefunded in prior periods, thereby transforming several of our longer-dated
issues into intermediate-maturity issues. Despite their underperformance on a
total return basis, these bonds were acquired in a higher interest rate
environment and, as such, contribute meaningfully to the Fund's yield. This
supports our long-term commitment to providing shareholders with an attractive
level of income and allowed the Fund to maintain an above-average yield versus
its peers. We intend to reduce some of the Fund's concentration in prerefunded
bonds over time; however, their high acquisition yields would be difficult to
replace in the current environment.
To a lesser extent, the Fund's total return performance was affected by its
conservative investment parameters. This prohibited us from investing in non-
investment grade issues, which outperformed the high-grade market as credit
spreads narrowed during the year.
For the six-month period ended October 31, 2006, the total investment return
on the Fund's Common Shares was +5.09%, based on a change in per share net
asset value from $14.57 to $14.91, and assuming reinvestment of all
distributions.
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 Shares (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 of 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 Shares can vary significantly from total investment return
based on changes in the Fund's net asset value.
ANNUAL REPORTS OCTOBER 31, 2006
A Discussion With Your Funds' Portfolio Managers (continued)
What changes were made to the portfolio during the period?
For most of the year, we generally focused on premium-coupon bonds in the
20-year - 25-year maturity range whenever they became available. This was
consistent with our goal of increasing the income provided to shareholders and
muting the Fund's net asset value volatility, particularly as the yield curve
flattened. However, as the year progressed, we began to see some opportunity
in the 10-year - 20-year area of the curve. This maturity range had suffered
most under the weight of the Fed's interest rate hikes and, we believe, could
be poised for strong relative performance as the yield curve resteepens.
Issuance of Florida municipal bonds increased approximately 41% during the
period compared to the same 12 months a year ago. However, as has been the
case for some time, few new issues met our desired investment characteristics.
Much of the supply came in the form of refinancings, and the majority of the
new issues offered coupons below 5%. In general, the cost of obtaining 5.25%
coupons in the new-issue market remained prohibitive. Importantly, we remained
fully invested throughout the year in order to augment yield.
For the six-month period ended October 31, 2006, the Fund's Auction Market
Preferred Shares had an average yield of 3.48% for Series A and 3.47% for
Series B. The fed raised short-term interest rates six times during the
12-month reporting period, but opted to keep the target rate on hold at 5.25%
in August, September and October 2006. As such, the Fund's borrowing costs
began to stabilize and even move slightly lower late in the period. Despite
the interest rate increases during the period, the tax-exempt yield curve
maintained a positive slope, allowing us to borrow at a lower rate than where
we invest. This continued to generate an income benefit to the holders of
Common Shares from the leveraging of Preferred Shares. 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 Shares. (For a more complete explanation of the benefits and risks of
leveraging, see page 12 of this report to shareholders.)
How would you characterize the Fund's position at the close of the period?
We would characterize the Fund's position as fairly neutral in terms of
interest rate risk. We are continuing in our efforts to increase the Fund's
exposure to bonds with maturities in the 10-year - 20-year range. At the same
time, to enhance yield, we are looking to add some 20-year - 30-year bonds
with coupons in the area of 5.25%, without paying a premium to the AAA scale.
Although the Fed paused in its interest rate-hiking campaign, leaving the
federal funds rate at 5.25%, the central bank has indicated that it will
continue to look to the economic and inflationary data for signposts in
determining future monetary policy. As such, we would expect the U.S. equity
and bond markets to remain volatile as investors continue to anticipate and
react to economic data and Fed actions. Against this backdrop, we will
continue to maintain a fully invested portfolio and intend to use periods of
volatility to pursue higher-coupon bonds whenever they are attractively priced.
BlackRock MuniYield Michigan Insured Fund, Inc.
Describe conditions in the State of Michigan.
The State of Michigan maintained credit ratings of Aa2, AA and AA from Moody's,
Standard & Poor's (S&P) and Fitch, respectively. Troubles in the automotive
sector (in particular, at General Motors/Delphi) have caused stagnant revenue
growth that could be indicative of a more structural or long-term economic
problem. These lingering concerns triggered two rating downgrades during the
annual period. Fitch assigned a negative rating outlook to the state in
mid-April, and S&P followed suit in August. Without marked fiscal improvements,
further rating downgrades are possible later in 2006 or in 2007.
The key to future ratings actions remains the performance of the state's
economy, which continues to lag national trends as well as that of the Great
Lakes region. State employment continued to descend in fiscal year 2006,
albeit at a slower pace when compared to the previous five years. Future job
cuts in the automotive industry threaten to further undermine revenue
collections, and could result in additional state aid commitments. Compounding
that, the legislature's repeal of the single-business income tax is expected
to cost the state $1.9 billion annually beginning in fiscal year 2009, and
will likely produce significant structural deficits. To maintain current
rating levels will require employment stability and continued budget balancing.
How did the Fund perform during the fiscal year?
For the 12-month period ended October 31, 2006, the Common Stock of BlackRock
MuniYield Michigan Insured Fund, Inc. (formerly MuniYield Michigan Insured
Fund, Inc.) had net annualized yields of 5.30% and 5.58%, based on a year-end
per share net asset value of $15.45 and a per share market price of $14.67,
respectively, and $.819 per share income dividends. Over the same period, the
total investment return on the Fund's Common Stock was +6.64%, based on a
change in per share net asset value from $15.32 to $15.45, and assuming
reinvestment of all distributions.
ANNUAL REPORTS OCTOBER 31, 2006
The Fund's total return, based on net asset value, lagged the +7.46% average
return of the Lipper Michigan Municipal Debt Funds category for the 12-month
period. (Funds in this Lipper category limit their investment to securities
exempt from taxation in Michigan or a city in Michigan.) As an insured fund,
at least 80% of the Fund's holdings must be insured or rated AAA. This above-
average credit quality profile put the Fund at a disadvantage relative to some
of its more aggressive peers, as lower-rated issues experienced consistently
strong price appreciation throughout the period. We had also retained some
seasoned, higher-couponed issues with maturities and call features that became
very responsive to yield movements in the intermediate maturity sector, and
this detracted from performance as the municipal yield curve flattened and the
intermediate sector underperformed. Nevertheless, these bonds came with
attractive book yields and contributed meaningfully to the Fund's distribution
rate. We chose to maintain our positions given that the sale of these bonds
would likely result in both material capital gain distributions and an overall
reduction in the Fund's coupon income distribution. As a result, the Fund
ended the fiscal year with one of the highest distribution yields among its
peers.
For the six-month period ended October 31, 2006, the total investment return
on the Fund's Common Stock was +5.20%, based on a change in per share net
asset value from $15.08 to $15.45, and assuming reinvestment of all
distributions.
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 of 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 returns
based on changes in the Fund's net asset value.
What changes were made to the portfolio during the period?
A decline in new-issue volume, coupled with low nominal bond yields, offered
limited trading opportunities throughout the fiscal year. During the 12-month
period, $10.53 billion in Michigan municipal bonds was underwritten, a decline
of more than 26% versus the same period a year ago. This compared to the
national average decline in issuance of 6.8%.
For the most part, recent purchases have focused on AA-rated and A-rated
hospital revenue bonds, which offered good value given their incremental
yield and significant market liquidity. The Fund's credit quality profile
remained largely unchanged during the period, with more than 85% of net
assets rated AAA.
For the six-month period ended October 31, 2006, the Fund's Auction Market
Preferred Stock had average yields of 3.41% for Series A, 3.30% for Series B,
3.31% for Series C and 3.29% for Series D. The Fed raised short-term interest
rates six times during the 12-month reporting period, but opted to keep the
target rate on hold at 5.25% in August, September and October 2006. As such,
the Fund's borrowing costs began to stabilize and even move slightly lower
late in the period. Despite the Fed's interest rate increases during the
period, the municipal yield curve remained positively sloped and continued to
generate an income benefit to the Common Stock shareholder from the leveraging
of Preferred Stock. However, should the spread between short-term and long-
term interest rates narrow, the benefits of leverage will decline and, as a
result, reduce the yield on the Fund's Common Stock. (For a more complete
explanation of the benefits and risks of leveraging, see page 12 of this
report to shareholders.)
How would you characterize the Fund's position at the close of the period?
The Fund ended the annual period with a slightly defensive stance, as current
yield levels appear to be lower than economic and inflation fundamentals alone
would support. Ongoing positive technical factors - particularly the
significant amount of excess liquidity-driven demand seen in recent months -
prevent taking a more defensive duration posture.
ANNUAL REPORTS OCTOBER 31, 2006
A Discussion With Your Funds' Portfolio Managers (continued)
We will continue to monitor economic trends, notably employment and housing,
to ensure that the Fund's current structure is appropriate. Future portfolio
activity is expected to support our ongoing efforts to enhance shareholder
income and maintain the Fund's higher-than-average distribution yield.
BlackRock MuniYield New Jersey Insured Fund, Inc.
Describe conditions in the State of New Jersey.
The $31 billion fiscal year 2007 budget adopted by the New Jersey legislature
generally kept Governor John Corzine's original proposals intact, although a
stalemate over the budget initially resulted in a government shutdown in early
July. A 1% sales tax hike, expected to generate roughly $1.2 billion, and
approximately $2 billion in spending reductions and freezes are the key
factors in reducing a projected $4.5 billion budget gap. However, to end the
budget stalemate, Governor Corzine agreed to an allocation of one-half of the
new sales tax receipts to property tax rebates. On November 7, New Jersey
voters made this allocation permanent by means of a ballot proposal. The
budget also includes tax increases and surcharges on various items, such as
cigarettes, car rentals and luxury goods.
On the expense side, state aid to municipalities and school districts is
essentially flat for yet another year, but $1.1 billion will go into the state
pension system, exceeding the entire amount allocated in the last 10 years.
The budget significantly reduces reliance on one-time revenues and, therefore,
is the most structurally balanced budget in several years. This is a favorable
credit rating factor for New Jersey's general obligation bonds, which are
currently rated Aa3, AA and AA- by Moody's, Standard & Poor's and Fitch,
respectively. All three agencies have a stable outlook on the state.
New Jersey's high and growing net tax-supported debt as a percentage of
personal income is 7.9%, well above the 2.4% median of similarly rated states.
In addition, the state recently started a five-year, $6 billion debt financing
program for transportation projects, and the funding of billions of dollars of
court-mandated school construction projects is yet to be determined.
New Jersey's credit strength lies in its very broad, diverse economy and high
wealth level. Recovery from the last recession was fairly quick, although
employment growth has slowed. The September 2006 (preliminary) employment
growth figure was up .6% from the same month last year. Average annual
employment grew 1.1% in 2005 from the previous year. New Jersey ranks first
among the 50 states in median household income and second in per capita
personal income.
How did the Fund perform during the fiscal year?
For the 12-month period ended October 31, 2006, the Common Stock of BlackRock
MuniYield New Jersey Insured Fund, Inc. (formerly MuniYield New Jersey Insured
Fund, Inc.) had net annualized yields of 4.65% and 4.79%, based on a year-end
per share net asset value of $15.42 and a per share market price of $14.96,
respectively, and $.717 per share income dividends. Over the same period, the
total investment return on the Fund's Common Stock was +7.50%, based on a
change in per share net asset value from $15.07 to $15.42, and assuming
reinvestment of all distributions.
The Fund's total return, based on net asset value, trailed the +8.57% average
return of the Lipper New Jersey Municipal Debt Funds category for the 12-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.)
Notably, the Fund was disadvantaged relative to many of its peers by its
conservative investment parameters. Specifically, the Fund is limited in its
ability to invest in lower-quality issues, which outperformed during the
period as credit spreads (versus higher-quality issues of comparable maturity)
tightened dramatically in the first six months of the reporting period.
Spreads tightened in the latter six months, but to a much lesser degree than
in the earlier period, which benefited from relative performance. Per its
investment parameters, over 80% of the portfolio is invested in AAA-rated,
insured bonds.
Another factor that weighed heavily on the Fund's performance was the fact that
a number of seasoned holdings with higher coupons were called by their issuers.
Given our limited flexibility to buy lower-rated issues and a limited new-issue
supply during the 12-month period, particularly in the first quarter of 2006,
it was especially difficult to compensate for the income lost to calls.
For the six-month period ended October 31, 2006, the total investment return
on the Fund's Common Stock was +6.03%, based on a change in per share net
asset value from $14.90 to $15.42, and assuming reinvestment of distributions.
ANNUAL REPORTS OCTOBER 31, 2006
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 of 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 may vary significantly from total investment returns
based on changes in the Fund's net asset value.
What changes were made to the portfolio during the period?
Activity early in the reporting period was extremely limited, due in large
part to a lack of opportunities in both the primary and secondary markets. In
May, however, $2.8 billion worth of new issues came to market as the first
installment of a $6 billion, five-year New Jersey Transportation Trust Fund
refinancing deal. Consequently, supply in the state was down only 6% in the
last six months of the period compared to the same period one year earlier,
and nearly matched the nationwide decline of 5%. The net result for the 12-
month period was a decline of 28% in New Jersey compared to a nationwide
decline of roughly 7%.
As it became more evident that the Fed was likely to pause in its monetary
tightening campaign, and that much of the yield curve flattening trend had
run its course, our yield curve strategy shifted to a focus on the 10-year -
15-year maturity range as the area of greatest value. The Transportation Trust
Fund deal provided a number of 15-year issues that were attractively priced
and helped us to achieve a shift toward the intermediate part of the yield
curve. Financing for these purchases came primarily from the sale of shorter-
maturity bonds, such as prerefunded bonds that we expected to be called within
five years. We have also started looking for opportunities to sell issues on
the long end of the curve, as these issues add a large amount of interest rate
risk for very little additional yield.
For the six-month period ended October 31, 2006, the Fund's Auction Market
Preferred Stock (AMPS) had average yields of: 3.18% for Series A and 3.16% for
Series B.
The Fed raised short-term interest rates six times during the 12-month
reporting period, but opted to keep the target rate on hold at 5.25% in
August, September and October 2006. As such, the Fund's borrowing costs began
to stabilize and even move slightly lower late in the period. Despite the
Fed's interest rate increases during the period, the municipal yield curve
remained positively sloped and continued to generate an income benefit to the
Common Stock shareholder from the leveraging of Preferred Stock. However,
should the spread between short-term and long-term interest rates narrow, the
benefits of leverage will decline and, as a result, reduce the yield on the
Fund's Common Stock. (For a more complete explanation of the benefits and
risks of leveraging, see page 12 of this report to shareholders.)
How would you characterize the Fund's position at the close of the period?
Throughout the period, the Fund remained relatively neutral with respect to
interest rate risk, and with a high-quality credit profile. Our yield curve
outlook changed during the period as it became likely that the Fed would pause
in its monetary tightening program, which it did in the third quarter of 2006.
Given the extraordinary flatness of the yield curve and the likelihood that
much of the flattening trend is behind us, we expect to continue moving assets
to the 10-year - 15-year portion of the curve, where we see the most value.
These purchases will increasingly be financed by sales on the long end of the
curve that no longer provide a sufficient yield advantage for their interest
rate risk.
BlackRock MuniYield Pennsylvania Insured Fund
Describe conditions in the Commonwealth of Pennsylvania.
Pennsylvania continued to protect its credit ratings of Aa2, AA and AA from
Moody's, Standard & Poor's and Fitch, respectively, by maintaining conservative
budgeting practices, a relatively low debt burden and a more diversified
service economy. Following a difficult period at the start of the decade, the
commonwealth's finances have improved and stabilized.
Importantly, Governor Edward Rendell's economic stimulus plans over the next
several years include $2 billion in debt issuance to fund programs ranging
from venture capital guarantees and real estate development to initiatives
aimed at strengthening the tourism and agricultural bases. While planned debt
issuance is substantial and appropriation-backed financing will be a departure
from historical practice, the commonwealth's financial policy is to keep debt
service to no more than 4% of revenues.
ANNUAL REPORTS OCTOBER 31, 2006
A Discussion With Your Funds' Portfolio Managers (concluded)
Pennsylvania's General Fund budget of $26.1 billion for fiscal year 2006-2007
is an increase of 5.8% over the 2005-2006 budget. The budget has no new taxes
or tax increases, not a surprise in a gubernatorial election year, but does
include some small business tax cuts and a property tax rebate program for
senior citizens. Under new legislation, expanded property tax rebates
initially will be financed by state lottery surplus. After revenue is realized
from newly legalized slot machine gambling, perhaps in 2008, homeowners will
see reductions in their school property tax bills estimated at an average of
roughly $200. The law also requires most school districts to ask voters next
year whether they want to cut property taxes further by increasing local
income taxes. It also requires school boards to obtain voter approval for tax
increases that exceed inflation, except for certain reasons.
Overall, job growth in Pennsylvania was flat year-over-year and trailed the
national growth rate. Pennsylvania's unemployment rate was 4.8% in July 2006
and on a seasonally adjusted basis remained below the 5% full employment
benchmark of most economists for the 13th consecutive month. Personal income
growth of 1.7% matched the U.S. average growth rate in the second quarter, and
on a per capita basis, wealth levels ranked 18th in the nation.
How did the Fund perform during the fiscal year?
For the 12-month period ended October 31, 2006, the Common Shares of BlackRock
MuniYield Pennsylvania Insured Fund (formerly MuniYield Pennsylvania Insured
Fund) had net annualized yields of 4.83% and 5.26%, based on a year-end per
share net asset value of $15.89 and a per share market price of $14.60,
respectively, and $.768 per share income dividends. Over the same period, the
total investment return on the Fund's Common Shares was +7.52%, based on a
change in per share net asset value from $15.57 to $15.89, and assuming
reinvestment of all distributions.
The Fund's total return, based on net asset value, surpassed the +7.39%
average return of the Lipper Pennsylvania Municipal Debt Funds category for
the 12-month period. (Funds in this Lipper category limit their investment to
those securities exempt from taxation in Pennsylvania or a city in
Pennsylvania.) The Fund also provided an above-average yield during the
period, consistent with our efforts to provide an attractive level of income
for our shareholders.
Contributing most to performance was our relatively long duration bias for
the majority of the fiscal year. Generally speaking, we favored the 25-year -
30-year maturity range, and this proved advantageous as longer-dated
securities outperformed shorter-dated issues. Performance also benefited from
the Fund's portion of assets committed to inverse floater product. These
securities take advantage of the relative steepness of the municipal yield
curve and delivered above-average accruals. We preferred these AAA-rated
securities during this period of historically tight credit quality spreads.
For the six-month period ended October 31, 2006, the total investment return
on the Fund's Common Shares was +5.27%, based on a change in per share net
asset value from $15.48 to $15.89, and assuming reinvestment of distributions.
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 Shares (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 of 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 Shares can vary significantly from total investment returns
based on changes in the Fund's net asset value.
What changes were made to the portfolio during the period?
Portfolio activity was rather muted during the year, largely reflecting the
scarcity of new issuance in the Pennsylvania market and the low-interest-rate
environment. Supply of new Pennsylvania municipal bonds declined 14% on a year-
over-year basis. Those bonds that were issued generally came with shorter
maturities and lower yields than we were targeting. While this put
Pennsylvania bonds in an extraordinarily strong technical position, it made
for few compelling investment opportunities.
ANNUAL REPORTS OCTOBER 31, 2006
Under these circumstances, we maintained our focus on protecting the Fund's
net asset value and providing shareholders with an above-average level of
income. To that end, we continued to seek incremental yield through investment
in longer-dated bonds and maintained a fully invested portfolio. The Fund
maintained its slightly long duration for most of the year.
For the six-month period ended October 31, 2006, the Fund's Auction Market
Preferred Shares had average yields of 3.31% for Series A, 3.38% for Series B
and 3.29% for Series C. The Fed raised short-term interest rates six times
during the 12-month reporting period, but opted to keep the target rate on
hold at 5.25% in August, September and October 2006. As such, the Fund's
borrowing costs began to stabilize and even move slightly lower late in the
period. Despite the interest rate increases during the period, the tax-exempt
yield curve maintained a positive slope, allowing us to borrow at a lower rate
than where we invest. This continued to generate an income benefit to the
holders of Common Shares from the leveraging of Preferred Shares. 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 Shares. (For a more complete explanation of the benefits and
risks of leveraging, see page 12 of this report to shareholders.)
How would you characterize the Fund's position at the close of the period?
We ended the period with a fully invested portfolio and a slightly long
duration relative to our peers. Municipal yields and credit spreads are near
their all-time lows and the slope of the yield curve is historically very
flat. However, a favorable supply/demand environment should continue to be
supportive of present valuations in the municipal market.
Against this backdrop, we intend to continue our efforts to enhance yield for
shareholders while also protecting the Fund's underlying value. To that end,
we continue to look for maturities in the 25-year area and to favor a neutral
to slightly long portfolio duration, which we believe offers the benefit of
incremental yield. Recently, we started looking down the yield curve slightly
at opportunities in the 15-year - 17-year area. Ultimately, we believe that
above-average yields can provide for competitive Fund returns over time.
Robert D. Sneeden
Vice President and Portfolio Manager
BlackRock MuniYield Florida Insured Fund
Fred K. Stuebe
Vice President and Portfolio Manager
BlackRock MuniYield Michigan Insured Fund, Inc.
Theodore R. Jaeckel Jr., CFA
Vice President and Portfolio Manager
BlackRock MuniYield New Jersey Insured Fund, Inc.
William R. Bock
Vice President and Portfolio Manager
BlackRock MuniYield Pennsylvania Insured Fund
November 28, 2006
Effective October 2, 2006, Timothy T. Browse assumed responsibility for the
day-to-day management of BlackRock MuniYield New Jersey Insured Fund, Inc's
portfolio. Mr. Browse is a Vice President of BlackRock, Inc. Previously, he
was a Vice President in the Municipal Tax-Exempt Fund Management group of
Merrill Lynch Investment Managers (MLIM) from 2004 to 2006. Prior to joining
MLIM, Mr. Browse was a Vice President, portfolio manager and team leader of
the Municipal Investments Team with Lord Abbett & Co. from 2000 to 2003, and
Vice President and portfolio manager in the municipal fund management group of
Eaton Vance Management, Inc. from 1992 to 2000.
ANNUAL REPORTS OCTOBER 31, 2006
The Benefits and Risks of Leveraging
The Funds utilize leveraging to seek to enhance the yield and net asset value
of their Common Shares or Common Stock. However, these objectives cannot be
achieved in all interest rate environments. To leverage, the Funds issue
Preferred Shares or 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 Shares or
Stock, is paid to Common Shareholders or 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 Shares or Stock. However, in
order to benefit Common Shareholders or 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 Shareholders or 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 Shares or Stock
capitalization of $100 million and the issuance of Preferred Shares or 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 Shares or Stock based on the lower
short-term interest rates. At the same time, the fund's total portfolio of
$150 million earns the income based on long-term interest rates.
In this case, the dividends paid to Preferred Shareholders or Preferred Stock
shareholders are significantly lower than the income earned on the fund's long-
term investments, and therefore the Common Shareholders or 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 Shares or
Stock will be reduced or eliminated completely. At the same time, the market
value of the fund's Common Shares or 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 Shares' or 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 Shares or Stock does not fluctuate. In
addition to the decline in net asset value, the market value of the fund's
Common Shares or Stock may also decline.
As of October 31, 2006, BlackRock MuniYield Florida Insured Fund, BlackRock
MuniYield Michigan Insured Fund, Inc., BlackRock MuniYield New Jersey Insured
Fund, Inc. and BlackRock Pennsylvania Insured Fund had leverage amounts, due
to Auction Market Preferred Shares or Stock, of 36.36%, 36.97%, 35.12% and
35.86% of total net assets, respectively, before the deduction of Preferred
Shares or Stock.
As a part of their investment strategy, the Funds 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 Funds 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 Funds invest in inverse floaters, the market value of each
Fund's portfolio and the net asset value of each Fund's shares may also be
more volatile than if the Funds did not invest in these securities.
ANNUAL REPORTS OCTOBER 31, 2006
Portfolio Information
Quality Profiles as of October 31, 2006
BlackRock MuniYield Florida Percent of
Insured Fund Total
By S&P/Moody's Rating Investments
AAA/Aaa 90.3%
AA/Aa 0.9
A/A 4.9
BBB/Baa 1.5
Other* 2.4
* Includes portfolio holdings in short-term investments.
BlackRock MuniYield Michigan Percent of
Insured Fund, Inc. Total
By S&P/Moody's Rating Investments
AAA/Aaa 85.9%
AA/Aa 2.5
A/A 7.3
BBB/Baa 2.8
Other* 1.5
* Includes portfolio holdings in short-term investments.
BlackRock MuniYield New Jersey Percent of
Insured Fund, Inc. Total
By S&P/Moody's Rating Investments
AAA/Aaa 84.5%
AA/Aa 2.7
A/A 3.4
BBB/Baa 8.8
Other* 0.6
* Includes portfolio holdings in short-term investments.
BlackRock MuniYield Pennsylvania Percent of
Insured Fund Total
By S&P/Moody's Rating Investments
AAA/Aaa 81.5%
AA/Aa 3.3
A/A 2.9
BBB/Baa 7.7
NR 2.8
Other* 1.8
* Includes portfolio holdings in short-term investments and
variable rate demand notes.
Dividend Policy
The Funds' dividend policy is to distribute all or a portion of their net
investment income to their shareholders on a monthly basis. In order to
provide shareholders with a more stable level of dividend distributions, the
Funds 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
Funds for any particular month may be more or less than the amount of net
investment income earned by the Funds during such month. The Funds' 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 these reports.
ANNUAL REPORTS OCTOBER 31, 2006
Proxy Results
BlackRock MuniYield Florida Insured Fund
During the six-month period ended October 31, 2006, BlackRock
MuniYield Florida Insured Fund's shareholders voted on the following
proposals, which were approved at a special shareholders' meeting on
July 31, 2006. A description of the proposals and number of shares
voted were as follows:
Shares Voted Shares Voted Shares Voted
For Against Abstain
To approve a new investment advisory agreement with
BlackRock Advisors, Inc. 4,389,251 128,869 170,280
To approve a contingent subadvisory agreement with
BlackRock Advisors, Inc. 4,375,864 148,119 164,417
BlackRock MuniYield Michigan Insured Fund, Inc.
During the six-month period ended October 31, 2006, BlackRock MuniYield
Michigan Insured Fund, Inc.'s shareholders voted on the following proposals,
which were approved at a special shareholders' meeting on August 15, 2006. A
description of the proposals and number of shares voted were as follows:
Shares Voted Shares Voted Shares Voted
For Against Abstain
To approve a new investment advisory agreement with
BlackRock Advisors, Inc. 9,830,778 329,113 475,390
To approve a contingent subadvisory agreement with
BlackRock Advisors, Inc. 9,833,994 321,356 479,931
ANNUAL REPORTS OCTOBER 31, 2006
Proxy Results (concluded)
BlackRock MuniYield New Jersey Insured Fund, Inc.
During the six-month period ended October 31, 2006, BlackRock MuniYield New
Jersey Insured Fund, Inc.'s shareholders voted on the following proposals,
which were approved at a special shareholders' meeting on August 15, 2006. A
description of the proposals and number of shares voted were as follows:
Shares Voted Shares Voted Shares Voted
For Against Abstain
To approve a new investment advisory agreement with
BlackRock Advisors, Inc. 4,668,751 162,654 270,118
To approve a contingent subadvisory agreement with
BlackRock Advisors, Inc. 4,643,429 163,000 295,094
BlackRock MuniYield Pennsylvania Insured Fund
During the six-month period ended October 31, 2006, BlackRock MuniYield
Pennsylvania Insured Fund's shareholders voted on the following proposals,
which were approved at a special shareholders' meeting on July 31, 2006. A
description of the proposals and number of shares voted were as follows:
Shares Voted Shares Voted Shares Voted
For Against Abstain
To approve a new investment advisory agreement with
BlackRock Advisors, Inc. 6,466,667 136,551 262,432
To approve a contingent subadvisory agreement with
BlackRock Advisors, Inc. 6,477,175 135,232 253,243
ANNUAL REPORTS OCTOBER 31, 2006
Schedule of Investments as of October 31, 2006
BlackRock MuniYield Florida Insured Fund (In Thousands)
Face
Amount Municipal Bonds Value
District of Columbia--0.8%
$ 1,000 Metropolitan Washington Airports Authority, D.C.,
Airport System Revenue Bonds, AMT, Series A,
5.25% due 10/01/2032 (c) $ 1,050
Florida--137.9%
1,300 Alachua County, Florida, School Board, COP, 5.25%
due 7/01/2029 (a) 1,395
1,430 Bay County, Florida, Sales Tax Revenue Bonds, 5%
due 9/01/2027 (a) 1,530
700 Boynton Beach, Florida, Utility System Revenue
Refunding Bonds, 6.25% due 11/01/2020 (b)(c) 839
1,720 Broward County, Florida, Educational Facilities
Authority Revenue Bonds (Nova Southeastern
University), 5% due 4/01/2031 (e) 1,818
1,545 Cape Coral, Florida, Special Obligation Revenue
Bonds, 5% due 10/01/2033 (h) 1,643
1,000 Daytona Beach, Florida, Utility System Revenue
Refunding Bonds, Series B, 5% due 11/15/2027 (c) 1,050
1,000 Deltona, Florida, Transportation Capital Improvement
Revenue Bonds, 5.125% due 10/01/2026 (h) 1,079
1,000 Emerald Coast, Florida, Utilities Authority, System
Revenue Bonds, 5.25% due 1/01/2036 (c) 1,085
2,110 First Florida Governmental Financing Commission
Revenue Bonds, 5.70% due 7/01/2017 (h) 2,159
1,000 Flagler County, Florida, Capital Improvement
Revenue Bonds, 5% due 10/01/2035 (h) 1,059
1,150 Florida HFA, Housing Revenue Bonds (Brittany
Rosemont Apartments), AMT, Series C-1, 6.75%
due 8/01/2014 (a) 1,155
405 Florida Housing Finance Corporation, Homeowner
Mortgage Revenue Refunding Bonds, AMT, Series 4,
6.25% due 7/01/2022 (f) 414
1,000 Florida State Board of Education, Capital Outlay, GO,
Public Education, Series B, 5% due 6/01/2031 (c) 1,048
6,190 Florida State Board of Education, Lottery Revenue
Bonds, Series A, 6% due 7/01/2010 (c)(i) 6,732
1,000 Florida State Governmental Utility Authority, Utility
Revenue Bonds (Lehigh Utility System), 5.125%
due 10/01/2033 (a) 1,059
Face
Amount Municipal Bonds Value
Florida (continued)
$ 1,860 Florida State Turnpike Authority, Turnpike Revenue
Bonds (Department of Transportation), Series B, 5%
due 7/01/2030 $ 1,922
1,400 Fort Myers, Florida, Utility System Revenue Refunding
Bonds, 5% due 10/01/2031 (h) 1,495
3,000 Hernando County, Florida, School Board, COP, 5%
due 7/01/2035 (h) 3,174
Highlands County, Florida, Health Facilities Authority,
Hospital Revenue Bonds (Adventist Health System):
3,700 Series A, 6% due 11/15/2011 (i) 4,128
1,000 Series C, 5.25% due 11/15/2036 1,067
1,780 Hillsborough County, Florida, Port District Revenue
Bonds (Tampa Port Authority Project), AMT, 5%
due 6/01/2026 (h) 1,866
Hillsborough County, Florida, School Board, COP (h):
6,000 5.375% due 7/01/2009 (i) 6,279
1,000 5% due 7/01/2029 1,045
2,000 Jacksonville Electric Authority, Florida, Water and
Sewer System Revenue Bonds, Series A, 5.375%
due 10/01/2030 (h) 2,012
Jacksonville, Florida, Economic Development
Commission, Health Care Facilities Revenue Bonds
(Mayo Clinic--Jacksonville) (h):
1,000 Series A, 5.50% due 11/15/2036 1,084
750 Series B, 5.50% due 11/15/2036 813
1,140 Jacksonville, Florida, Economic Development
Commission, IDR (Metropolitan Parking Solutions
Project), AMT, 5.50% due 10/01/2030 (l) 1,223
1,455 Jacksonville, Florida, Guaranteed Entitlement
Revenue Refunding and Improvement Bonds, 5.25%
due 10/01/2032 (c) 1,555
1,225 Jacksonville, Florida, Port Authority, Seaport Revenue
Bonds, AMT, 5.625% due 11/01/2026 (h) 1,299
2,280 Jacksonville, Florida, Sales Tax Revenue Bonds, 5%
due 10/01/2027 (h) 2,395
2,000 Lakeland, Florida, Electric and Water Revenue
Refunding Bonds, Series A, 5% due 10/01/2028 (h) 2,064
1,000 Lee County, Florida, Airport Revenue Bonds, AMT,
Series A, 6% due 10/01/2029 (f) 1,086
2,285 Lee County, Florida, Capital Revenue Bonds, 5.25%
due 10/01/2023 (a) 2,479
Portfolio Abbreviations
To simplify the listings of portfolio holdings in the Schedules 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
EDR Economic Development Revenue Bonds
GO General Obligation Bonds
HDA Housing Development Authority
HFA Housing Finance Agency
IDA Industrial Development Authority
IDR Industrial Development Revenue Bonds
M/F Multi-Family
PCR Pollution Control Revenue Bonds
RIB Residual Interest Bonds
S/F Single-Family
VRDN Variable Rate Demand Notes
ANNUAL REPORTS OCTOBER 31, 2006
Schedule of Investments (continued)
BlackRock MuniYield Florida Insured Fund (In Thousands)
Face
Amount Municipal Bonds Value
Florida (continued)
$ 1,525 Lee County, Florida, School Board, COP, Series A,
5% due 8/01/2024 (f) $ 1,633
1,000 Leesburg, Florida, Capital Improvement Revenue
Bonds, 5.25% due 10/01/2034 (c) 1,078
1,000 Marco Island, Florida, Utility System Revenue Bonds,
5% due 10/01/2033 (h) 1,051
1,000 Martin County, Florida, Utilities System Revenue
Bonds, 5.125% due 10/01/2033 (a) 1,059
2,000 Miami Beach, Florida, Water and Sewer Revenue
Bonds, 5.75% due 9/01/2025 (a) 2,163
Miami-Dade County, Florida, Aviation Revenue
Bonds, AMT, Series A:
7,500 5% due 10/01/2033 (f) 7,736
5,000 (Miami International Airport), 6%
due 10/01/2024 (c) 5,434
2,000 Miami-Dade County, Florida, Educational Facilities
Authority Revenue Bonds (University of Miami),
Series A, 5.75% due 4/01/2029 (a) 2,149
Miami-Dade County, Florida, Expressway Authority,
Toll System Revenue Bonds, Series B (c):
1,000 5.25% due 7/01/2027 1,079
3,875 5% due 7/01/2033 4,079
1,655 Miami-Dade County, Florida, IDA, IDR (BAC
Funding Corporation Project), Series A, 5.375%
due 10/01/2030 (a) 1,776
2,000 Miami-Dade County, Florida, School Board COP,
Series A, 5.50% due 10/01/2009 (f)(i) 2,108
1,865 Miami-Dade County, Florida, Solid Waste System
Revenue Bonds, 5.25% due 10/01/2030 (h) 2,027
Miami-Dade County, Florida, Subordinate Special
Obligation Revenue Bonds, Series A (h)(k):
4,375 5.186% due 10/01/2031 1,280
5,735 5.203% due 10/01/2033 1,502
4,765 Orange County, Florida, Educational Facilities
Authority, Educational Facilities Revenue
Refunding Bonds (Rollins College Project), 5.50%
due 12/01/2032 (a) 5,212
Orange County, Florida, Health Facilities Authority,
Hospital Revenue Bonds:
600 (Adventist Health System), 6.25%
due 11/15/2024 670
1,835 (Orlando Regional Healthcare), 6%
due 12/01/2012 (i) 2,060
1,000 Orange County, Florida, Sales Tax Revenue Refunding
Bonds, Series A, 5.125% due 1/01/2023 (c) 1,067
6,500 Orange County, Florida, School Board, COP, Series A,
5.25% due 8/01/2009 (h)(i) 6,849
Orlando and Orange County, Florida, Expressway
Authority Revenue Bonds, Series B (a):
4,000 5% due 7/01/2030 4,194
6,815 5% due 7/01/2035 7,137
1,530 Osceola County, Florida, Infrastructure Sales Surplus
Tax Revenue Bonds, 5.25% due 10/01/2025 (a) 1,635
2,000 Osceola County, Florida, School Board, COP, Series A,
5.25% due 6/01/2027 (a) 2,132
Face
Amount Municipal Bonds Value
Florida (continued)
$ 1,100 Osceola County, Florida, Tourist Development Tax
Revenue Bonds, Series A, 5.50% due 10/01/2027 (c) $ 1,192
1,500 Palm Beach County, Florida, Criminal Justice Facilities
Revenue Bonds, 7.20% due 6/01/2015 (c) 1,882
2,000 Palm Beach County, Florida, School Board, COP,
Refunding, Series D, 5.25% due 8/01/2021 (f) 2,141
Palm Beach County, Florida, School Board, COP,
Series A:
5,000 6% due 8/01/2010 (c)(i) 5,457
1,300 5% due 8/01/2031 (f) 1,381
1,000 Palm Coast, Florida, Utility System Revenue Bonds,
5% due 10/01/2027 (h) 1,049
1,500 Panama City, Florida, Water and Sewer Revenue
Bonds, Series B, 5.25% due 10/01/2022 (h) 1,631
1,000 Pembroke Pines, Florida, Public Improvement
Revenue Bonds, Series A, 5% due 10/01/2034 (a) 1,055
Polk County, Florida, Public Facilities Revenue
Bonds (h):
1,000 5% due 12/01/2025 1,068
1,340 5% due 12/01/2033 1,421
1,000 Polk County, Florida, Utility System Revenue Bonds,
5.25% due 10/01/2022 (c) 1,084
1,055 Port St. Lucie, Florida, Utility Revenue Bonds, 5.25%
due 9/01/2024 (h) 1,152
2,190 Port St. Lucie, Florida, Utility System Revenue
Refunding Bonds, Series A, 5% due 9/01/2029 (h) 2,335
1,000 Saint Johns County, Florida, Ponte Vedra Utility
System Revenue Bonds, 5% due 10/01/2035 (f) 1,059
1,400 Saint Johns County, Florida, Sales Tax Revenue Bonds,
Series A, 5.25% due 10/01/2031 (a) 1,507
1,000 Saint Lucie, Florida, West Services District, Utility
Revenue Bonds, 5.25% due 10/01/2034 (h) 1,085
South Florida Water Management District, COP (a):
745 5% due 10/01/2031 792
1,430 5% due 10/01/2036 1,518
1,000 South Lake County, Florida, Hospital District
Revenue Bonds (South Lake Hospital Inc.), 5.80%
due 10/01/2034 1,046
1,240 Stuart, Florida, Public Utilities Revenue
Refunding and Improvement Bonds, 5.25%
due 10/01/2024 (c) 1,344
2,280 University of Central Florida (UCF) Athletics
Association Inc., COP, Series A, 5.25%
due 10/01/2034 (c) 2,450
Village Center Community Development District,
Florida, Recreational Revenue Bonds, Series A (h):
1,640 5.375% due 11/01/2034 1,793
1,000 5.125% due 11/01/2036 1,070
Village Center Community Development District,
Florida, Utility Revenue Bonds (h):
2,585 5.25% due 10/01/2023 2,801
4,030 5.125% due 10/01/2028 4,273
Volusia County, Florida, IDA, Student Housing Revenue
Bonds (Stetson University Project), Series A (g):
1,000 5% due 6/01/2025 1,066
1,000 5% due 6/01/2035 1,059
ANNUAL REPORTS OCTOBER 31, 2006
Schedule of Investments (concluded)
BlackRock MuniYield Florida Insured Fund (In Thousands)
Face
Amount Municipal Bonds Value
New Jersey--1.7%
$ 2,000 New Jersey EDA, Cigarette Tax Revenue Bonds,
5.50% due 6/15/2024 $ 2,120
Puerto Rico--3.5%
1,970 Puerto Rico Electric Power Authority, Power Revenue
Bonds, Series II, 5.375% due 7/01/2019 (h) 2,150
1,000 Puerto Rico Public Buildings Authority, Government
Facilities Revenue Refunding Bonds, Series I, 5%
due 7/01/2036 1,042
1,145 Puerto Rico Public Finance Corporation,
Commonwealth Appropriation Revenue Bonds,
Series E, 5.70% due 2/01/2010 (i) 1,220
Total Municipal Bonds
(Cost--$171,999)--143.9% 181,454
Municipal Bonds Held in Trust (m)
Florida--11.2%
6,960 Miami-Dade County, Florida, Health Facilities
Authority, Hospital Revenue Refunding Bonds
(Miami Children's Hospital), Series A, 5.625%
due 8/15/2011 (a)(i) 7,539
Face
Amount Municipal Bonds Held in Trust (m) Value
Florida (concluded)
$ 2,000 Santa Rosa County, Florida, School Board, COP,
Revenue Refunding Bonds, Series 2, 5.25%
due 2/01/2026 (c) $ 2,167
4,000 South Broward, Florida, Hospital District, Hospital
Revenue Bonds, 5.625% due 5/01/2032 (h) 4,367
Puerto Rico--6.1%
7,100 Puerto Rico Public Finance Corporation,
Commonwealth Appropriation Revenue Bonds,
Series A, 5.375% due 8/01/2011 (h)(i) 7,675
Total Municipal Bonds Held in Trust
(Cost--$20,680)--17.3% 21,748
Shares
Held Short-Term Securities
5,050 CMA Florida Municipal Money Fund 2.88% (d)(j) 5,050
Total Short-Term Securities
(Cost--$5,050)--4.0% 5,050
Total Investments (Cost--$197,729*)--165.2% 208,252
Liabilities in Excess of Other Assets--(0.1%) (65)
Liability for Trust Certificates,
Including Interest Expense Payable--(8.0%) (10,133)
Preferred Shares, at Redemption Value--(57.1%) (72,012)
---------
Net Assets Applicable to Common Shares--100.0% $ 126,042
=========
* The cost and unrealized appreciation (depreciation) of investments
as of October 31, 2006, as computed for federal income tax purposes,
were as follows:
Aggregate cost $ 188,044
=============
Gross unrealized appreciation $ 10,178
Gross unrealized depreciation --
-------------
Net unrealized appreciation $ 10,178
=============
(a) AMBAC Insured.
(b) Escrowed to maturity.
(c) FGIC Insured.
(d) Represents the current yield as of October 31, 2006.
(e) Assured Guaranty Insured.
(f) FSA Insured.
(g) CIFG Insured.
(h) MBIA Insured.
(i) Prerefunded.
(j) Investments in companies considered to be an affiliate of the Fund,
for purposes of Section 2(a)(3) of the Investment Company Act of 1940,
were as follows:
Net Dividend
Affiliate Activity Income
CMA Florida Municipal Money Fund 5,050 $67
Merrill Lynch Institutional Tax-Exempt Fund (2,600) --++
++ Amount is less than $1,000.
(k) Represents a zero coupon bond; the interest rate shown reflects the
effective yield at the time of purchase.
(l) ACA Insured.
(m) Securities represent underlying bonds transferred to a separate
securitization trust established in a tender option bond transaction
in which the Fund acquired the residual interest certificates. These
securities serve as collateral in a financing transaction. See Note 1(c)
to Financial Statements for details of Municipal Bonds Held in Trust.
o Forward interest rate swaps outstanding as of October 31, 2006
were as follows:
Notional Unrealized
Amount Depreciation
Pay a fixed rate of 3.856% and
receive a floating rate based on
1-week USD Bond Market
Association rate
Broker, JPMorgan Chase
Expires December 2016 $11,000 $ (190)
See Notes to Financial Statements.
ANNUAL REPORTS OCTOBER 31, 2006
Schedule of Investments as of October 31, 2006
BlackRock MuniYield Michigan Insured Fund, Inc. (In Thousands)
Face
Amount Municipal Bonds Value
Michigan--136.4%
Adrian, Michigan, City School District, GO (d):
$ 2,000 5% due 5/01/2029 $ 2,109
1,600 5% due 5/01/2034 1,682
1,000 Allegan, Michigan, Public School District, GO, 5.75%
due 5/01/2010 (d)(e) 1,072
1,000 Ann Arbor, Michigan, Public School District, School
Building and Site, GO, 5% due 5/01/2027 1,056
3,725 Bay City, Michigan, School District, School Building &
Site, GO, 5% due 5/01/2031 (d) 3,965
1,000 Birmingham, Michigan, City School District, School
Building and Site, GO, 5% due 11/01/2033 (d) 1,056
1,000 Central Montcalm, Michigan, Public Schools, GO,
5.90% due 5/01/2009 (b)(e) 1,056
Delta County, Michigan, Economic Development
Corporation, Environmental Improvement Revenue
Refunding Bonds (Mead Westvaco-Escanaba) (e):
1,500 AMT, Series B, 6.45% due 4/15/2012 1,673
2,000 Series A, 6.25% due 4/15/2012 2,260
Detroit, Michigan, City School District, GO (School
Building and Site Improvement):
3,000 Refunding, Series A, 5% due 5/01/2021 (d) 3,203
1,000 Series A, 5.50% due 5/01/2012 (d)(e) 1,094
2,300 Series A, 5.375% due 5/01/2013 (c)(e) 2,532
3,100 Series B, 5% due 5/01/2028 (c) 3,231
2,725 Detroit, Michigan, GO, 5.50% due 4/01/2011 (b)(e) 2,939
Detroit, Michigan, Water Supply System Revenue
Bonds:
1,025 DRIVERS, Series 200, 7.605%
due 7/01/2011 (c)(e)(i) 1,234
1,550 Second Lien, Series B, 5% due 7/01/2013 (b)(e) 1,675
2,420 Second Lien, Series B, 5% due 7/01/2034 (b) 2,524
1,250 Senior Lien, Series A, 5.875%
due 1/01/2010 (c)(e) 1,347
6,900 Senior Lien, Series A, 5% due 7/01/2034 (b) 7,197
14,790 Series B, 5.25% due 7/01/2013 (b)(e) 16,197
1,415 Detroit, Michigan, Water Supply System, Revenue
Refunding Bonds, 6.25% due 7/01/2012 (c)(h) 1,522
3,900 Dickinson County, Michigan, Economic Development
Corporation, Environmental Improvement Revenue
Refunding Bonds (International Paper Company
Project), Series A, 5.75% due 6/01/2016 4,184
3,100 Dickinson County, Michigan, Healthcare System,
Hospital Revenue Refunding Bonds, 5.80%
due 11/01/2024 (g) 3,255
East Grand Rapids, Michigan, Public School District,
GO (d):
1,610 5.75% due 5/01/2009 (e) 1,694
1,575 5% due 5/01/2031 1,677
Eastern Michigan University, General Revenue
Refunding Bonds (a):
590 6% due 6/01/2010 (e) 643
435 6% due 6/01/2020 473
Eastern Michigan University Revenue Bonds,
Series B (c)(e):
1,500 5.60% due 6/01/2010 1,602
1,310 5.625% due 6/01/2010 1,400
Face
Amount Municipal Bonds Value
Michigan (continued)
Eaton Rapids, Michigan, Public Schools, School
Building and Site, GO (d):
$ 1,325 5.25% due 5/01/2020 $ 1,443
1,675 5.25% due 5/01/2021 1,823
1,700 5% due 5/01/2026 1,797
3,600 5% due 5/01/2029 3,795
Flint, Michigan, Hospital Building Authority,
Revenue Refunding Bonds (Hurley Medical Center),
Series A (g):
615 5.375% due 7/01/2020 628
1,375 6% due 7/01/2020 1,499
2,200 Fowlerville, Michigan, Community Schools, School
District, GO, 5% due 5/01/2030 (c) 2,318
1,000 Frankenmuth, Michigan, School District, GO, 5.75%
due 5/01/2010 (c)(e) 1,072
3,650 Gibraltar, Michigan, School District, School Building
and Site, GO, 5% due 5/01/2028 (c) 3,851
1,100 Grand Blanc, Michigan, Community Schools, GO,
5.625% due 5/01/2020 (c) 1,196
Grand Rapids, Michigan, Building Authority Revenue
Bonds, Series A (a):
1,035 5.50% due 10/01/2012 (e) 1,139
665 5.50% due 10/01/2019 727
900 5.50% due 10/01/2020 984
2,070 Grand Valley, Michigan, State University Revenue
Bonds, 5.50% due 2/01/2018 (c) 2,325
Gulf Lake, Michigan, Community School District,
School Building and Site, GO (d):
2,000 5% due 5/01/2028 2,110
3,625 5% due 5/01/2030 3,819
4,775 Harper Woods, Michigan, City School District,
School Building and Site, GO, Refunding, 5%
due 5/01/2034 (c) 5,019
9,325 Hartland, Michigan, Consolidated School District,
GO, 6% due 5/01/2010 (c)(e) 10,066
3,990 Hudsonville, Michigan, Public Schools, School
Building and Site, GO, 5% due 5/01/2029 (d) 4,207
1,575 Jenison, Michigan, Public Schools, Building and Site,
GO, 5.50% due 5/01/2019 (c) 1,713
650 Kalamazoo, Michigan, Hospital Finance Authority,
Hospital Facility Revenue Refunding Bonds (Bronson
Methodist Hospital), 5.50% due 5/15/2008 (b)(e) 675
4,000 Kent, Michigan, Hospital Finance Authority, Hospital
Revenue Refunding Bonds (Butterworth Hospital),
Series A, 7.25% due 1/15/2013 (b) 4,465
Kent, Michigan, Hospital Finance Authority Revenue
Bonds (Spectrum Health), Series A (e):
3,000 5.50% due 7/15/2011 (b) 3,269
1,000 5.50% due 7/15/2011 1,090
1,510 Lansing, Michigan, Building Authority, GO, Series A,
5.375% due 6/01/2023 (b) 1,644
ANNUAL REPORTS OCTOBER 31, 2006
Schedule of Investments (continued)
BlackRock MuniYield Michigan Insured Fund, Inc. (In Thousands)
Face
Amount Municipal Bonds Value
Michigan (continued)
$ 1,015 Lowell, Michigan, Area Schools, GO, Refunding, 5%
due 5/01/2024 (b) $ 1,081
1,875 Michigan Higher Education Facilities Authority,
Limited Obligation Revenue Bonds (Hillsdale
College Project), 5% due 3/01/2035 1,940
2,250 Michigan Higher Education Facilities Authority,
Limited Obligation Revenue Refunding Bonds
(Hope College), Series A, 5.90% due 4/01/2032 2,380
Michigan Higher Education Facilities Authority,
Revenue Refunding Bonds (College for Creative
Studies):
1,235 5.85% due 12/01/2022 1,320
1,145 5.90% due 12/01/2027 1,221
2,500 Michigan Higher Education Student Loan Authority,
Student Loan Revenue Bonds, AMT, Series XVII-B,
5.40% due 6/01/2018 (a) 2,569
1,065 Michigan Municipal Bond Authority Revenue Bonds
(Local Government Loan Program), Group A, 5.50%
due 11/01/2020 (a) 1,137
Michigan Municipal Bond Authority, Revenue
Refunding Bonds (Local Government Loan Program)
Series A:
75 6.50% due 11/01/2012 (b) 75
1,000 6% due 12/01/2013 (c) 1,002
7,000 6.125% due 12/01/2018 (c) 7,014
Michigan State Building Authority, Revenue
Refunding Bonds (Facilities Program):
2,500 Series I, 5.50% due 10/15/2018 (b) 2,702
3,500 Series II, 5% due 10/15/2029 (b) 3,672
2,500 Series II, 5% due 10/15/2033 (a) 2,654
1,250 RIB, Series 517X, 7.17% due 10/15/2010 (d)(i) 1,446
Michigan State, COP (a):
3,000 5.50% due 6/01/2010 (e) 3,189
3,000 5.40% due 6/01/2022 (h)(l) 1,544
4,240 Michigan State, Comprehensive Transportation
Revenue Refunding Bonds, 5% due 5/15/2026 (d) 4,535
1,000 Michigan State, HDA, Limited Obligation M/F
Housing Revenue Bonds (Deaconess Towers
Apartments), AMT, 5.25% due 2/20/2048 (f) 1,031
835 Michigan State, HDA, Rental Housing Revenue
Bonds, AMT, Series A, 5.30% due 10/01/2037 (b) 852
Michigan State Hospital Finance Authority, Hospital
Revenue Bonds (Mid-Michigan Obligation Group),
Series A:
2,530 5.50% due 4/15/2018 (a) 2,722
5,580 5% due 4/15/2036 5,780
Michigan State Hospital Finance Authority, Hospital
Revenue Refunding Bonds:
2,200 (Crittenton Hospital), Series A, 5.625%
due 3/01/2027 2,355
2,000 (Sparrow Obligation Group), 5.625%
due 11/15/2031 2,124
Face
Amount Municipal Bonds Value
Michigan (continued)
Michigan State Hospital Finance Authority, Revenue
Refunding Bonds:
$ 8,465 5% due 11/15/2036 (b) $ 8,903
2,715 (Ascension Health Credit), Series A, 5.75%
due 11/15/2009 (b)(e) 2,907
12,000 (Ascension Health Credit), Series A, 6.125%
due 11/15/2009 (b)(e) 12,972
2,500 (Ascension Health Credit), Series A, 6.25%
due 11/15/2009 (b)(e) 2,711
7,200 (Henry Ford Health System), Series A, 5.25%
due 11/15/2032 7,710
3,000 (Henry Ford Health System), Series A, 5%
due 11/15/2038 3,120
2,200 (Mercy Health Services), Series X, 5.75%
due 8/15/2009 (b)(e) 2,345
2,000 (Mercy Health Services), Series X, 6%
due 8/15/2009 (b)(e) 2,146
4,930 (Mercy-Mount Clemens), Series A, 6%
due 5/15/2014 (b) 5,229
3,000 (Saint John Hospital), Series A, 6%
due 5/15/2013 (a)(h) 3,130
6,400 (Trinity Health), Series A, 6%
due 12/01/2027 (a) 6,985
1,000 (Trinity Health Credit), Series C, 5.375%
due 12/01/2023 1,064
5,255 (Trinity Health Credit), Series C, 5.375%
due 12/01/2030 5,586
3,100 (Trinity Health Credit), Series D, 5%
due 8/15/2034 3,247
Michigan State Strategic Fund, Limited Obligation
Revenue Refunding Bonds:
10,250 (Detroit Edison Company Pollution Control
Project), AMT, Series A, 5.55% due 9/01/2029 (b) 10,810
6,000 (Detroit Edison Company Pollution Control
Project), Series AA, 6.95% due 5/01/2011 (c) 6,787
3,300 (Detroit Edison Company Pollution Control
Project), Series C, 5.45% due 9/01/2029 3,461
2,175 (Dow Chemical Company Project), AMT, 5.50%
due 12/01/2028 2,338
15,000 Monroe County, Michigan, Economic Development
Corp., Limited Obligation Revenue Refunding Bonds
(Detroit Edison Co. Project), Series AA, 6.95%
due 9/01/2022 (c) 19,821
1,000 Montrose Township, Michigan, School District, GO,
6.20% due 5/01/2017 (b) 1,196
1,830 Muskegon Heights, Michigan, Water System Revenue
Bonds, Series A, 5.625% due 11/01/2010 (b)(e) 1,970
235 Northview, Michigan, Public School District, GO,
Refunding, 5.80% due 5/01/2021 (b) 239
1,100 Norway Vulcan, Michigan, Area Schools, GO, 5.90%
due 5/01/2009 (c)(e) 1,163
1,000 Oak Park, Michigan, Street Improvement, GO, 5%
due 5/01/2030 (b) 1,065
5,320 Orchard View, Michigan, Schools, School Building
and Site, GO, 5% due 5/01/2029 (b) 5,592
ANNUAL REPORTS OCTOBER 31, 2006
Schedule of Investments (continued)
BlackRock MuniYield Michigan Insured Fund, Inc. (In Thousands)
Face
Amount Municipal Bonds Value
Michigan (continued)
$ 2,425 Oxford, Michigan, Area Community School District,
GO, 5.50% due 11/01/2011 (d)(e) $ 2,639
1,370 Pennfield, Michigan, School District, School Building
and Site, GO, 5% due 5/01/2029 (c) 1,444
1,000 Plainwell, Michigan, Community Schools, School
District, School Building and Site, GO, 5.50%
due 11/01/2012 (d)(e) 1,102
3,905 Plymouth-Canton, Michigan, Community School
District, GO, 5% due 5/01/2029 (c) 4,117
700 Pontiac, Michigan, Tax Increment Finance Authority,
Revenue Refunding Bonds (Development Area
Number 2), 5.625% due 6/01/2022 (g) 748
1,425 Reed, Michigan, City Public Schools, School Building
and Site, GO, 5% due 5/01/2014 (d)(e) 1,548
2,000 Roseville, Michigan, School District, School Building
and Site, GO, Refunding, 5% due 5/01/2031 (d) 2,129
2,500 Saginaw, Michigan, Hospital Finance Authority
Revenue Refunding Bonds (Covenant Medical
Center), Series E, 5.625% due 7/01/2013 (b) 2,635
Saginaw Valley State University, Michigan, General
Revenue Refunding Bonds (c):
2,100 5% due 7/01/2024 2,226
1,445 5% due 7/01/2034 1,520
1,500 Saint Clair County, Michigan, Economic Revenue
Refunding Bonds (Detroit Edison Company), RIB,
Series 282, 8.92% due 8/01/2024 (a)(i) 1,694
1,300 Southfield, Michigan, Library Building Authority, GO,
5.50% due 5/01/2010 (b)(e) 1,383
Southfield, Michigan, Public Schools, School Building
and Site, GO, Series B (d):
2,900 5.25% due 5/01/2027 3,127
3,500 5% due 5/01/2029 3,690
1,325 Sparta, Michigan, Area Schools, School Building and
Site, GO, 5% due 5/01/2030 (c) 1,396
1,100 Waverly, Michigan, Community School, GO, 5.50%
due 5/01/2010 (c)(e) 1,170
10,660 Wayne Charter County, Michigan, Airport Revenue
Bonds (Detroit Metropolitan Wayne County), AMT,
Series A, 5.375% due 12/01/2015 (b) 11,074
1,750 Wayne Charter County, Michigan, Detroit
Metropolitan Airport, GO, Airport Hotel, Series A, 5%
due 12/01/2030 (b) 1,830
9,160 Wayne County, Michigan, Airport Authority
Revenue Bonds (Detroit Metropolitan Wayne County
Airport), AMT, 5% due 12/01/2034 (b) 9,540
West Bloomfield, Michigan, School District, GO,
Refunding (c):
1,710 5.50% due 5/01/2017 1,862
1,225 5.50% due 5/01/2018 1,333
2,405 West Branch-Rose City, Michigan, Area School
District, GO, 5.50% due 5/01/2009 (c)(e) 2,517
Face
Amount Municipal Bonds Value
Michigan (concluded)
$ 6,075 Western Michigan University Revenue Bonds, 5%
due 11/15/2035 (c) $ 6,416
1,600 Zeeland, Michigan, Public Schools, School Building
and Site, GO, 5% due 5/01/2029 (b) 1,687
Puerto Rico--3.7%
2,900 Puerto Rico Commonwealth Highway and
Transportation Authority, Transportation Revenue
Refunding Bonds, Series K, 5% due 7/01/2040 3,024
1,250 Puerto Rico Commonwealth, Public Improvement,
GO, Series A, 5.25% due 7/01/2026 1,350
3 Puerto Rico Electric Power Authority, Power Revenue
Bonds, Trust Receipts, Class R, Series 16 HH, 7.553%
due 7/01/2013 (d)(i) 3
2,790 Puerto Rico Municipal Finance Agency Revenue
Bonds, Series A, 5% due 8/01/2027 (d) 2,925
1,000 Puerto Rico Public Finance Corporation,
Commonwealth Appropriation Revenue Bonds,
Series E, 5.70% due 2/01/2010 (e) 1,066
2,150 University of Puerto Rico, University Revenue
Refunding Bonds, Series O, 5.375%
due 6/01/2030 (b) 2,160
Total Municipal Bonds
(Cost--$367,688)--140.2% 394,423
Municipal Bonds Held in Trust (m)
Michigan--27.6%
6,700 Detroit, Michigan, Water Supply System, Senior Lien
Revenue Bonds, Series A, 5.75%, due 7/01/2011 (c)(e) 7,382
Greater Detroit Resource Recovery Authority,
Michigan, Revenue Refunding Bonds (a):
11,250 Series A, 6.25% due 12/13/2008 11,845
5,600 Series B, 6.25% due 12/13/2008 5,896
Michigan State Building Authority, Revenue Refunding
Bonds (Facilities Program), Series I (d):
4,750 5.50% due 10/15/2010 5,122
15,030 5.50% due 10/15/2011 16,207
15,500 Saint Clair County, Michigan, Economic Revenue
Refunding Bonds (Detroit Edison Co. Project),
Series AA, 6.40% due 8/01/2024 (a) 16,503
Wayne County, Michigan, Airport Authority Revenue
Bonds (Detroit Metropolitan Wayne County Airport),
AMT (b):
7,525 5.25% due 12/01/2025 8,067
6,295 5.25% due 12/01/2026 6,749
ANNUAL REPORTS OCTOBER 31, 2006
Schedule of Investments (concluded)
BlackRock MuniYield Michigan Insured Fund, Inc. (In Thousands)
Face
Amount Municipal Bonds Held in Trust (m) Value
Puerto Rico--1.0%
$ 2,535 Puerto Rico Electric Power Authority, Power
Revenue Bonds Series HH, 5.75%
due 7/01/2010 (d)(e) $ 2,746
Total Municipal Bonds Held in Trust
(Cost--$80,892)--28.6% 80,517
Shares
Held Short-Term Securities Value
7,384 CMA Michigan Municipal Money Fund, 2.96% (j)(k) $ 7,384
Total Short-Term Securities
(Cost--$7,384)--2.6% 7,384
Total Investments (Cost--$455,964*)--171.4% 482,324
Other Assets Less Liabilities--0.7% 2,075
Liability for Trust Certificates,
Including Interest Expense Payable--(13.5%) (37,988)
Preferred Stock, at Redemption Value--(58.6%) (165,061)
----------
Net Assets Applicable to Common Stock--100.0% $ 281,350
==========
* The cost and unrealized appreciation (depreciation) of investments
as of October 31, 2006, as computed for federal income tax purposes,
were as follows:
Aggregate cost $ 418,863
=============
Gross unrealized appreciation $ 25,474
Gross unrealized depreciation --
-------------
Net unrealized appreciation $ 25,474
=============
(a) AMBAC Insured.
(b) MBIA Insured.
(c) FGIC Insured.
(d) FSA Insured.
(e) Prerefunded.
(f) GNMA Collateralized.
(g) ACA Insured.
(h) Escrowed to maturity.
(i) The rate disclosed is that currently in effect. This rate changes
periodically and inversely based upon prevailing market rates.
(j) Investments in companies considered to be an affiliate of the Fund,
for purposes of Section 2(a)(3) of the Investment Company Act of 1940,
were as follows:
Net Dividend
Affiliate Activity Income
CMA Michigan Municipal
Money Fund 6,363 $ 155
(k) Represents the current yield as of October 31, 2006.
(l) Represents a zero coupon bond; the interest rate shown reflects the
effective yield at the time of purchase.
(m) Securities represent underlying bonds transferred to a separate
securitization trust established in a tender option bond transaction
in which the Fund acquired the residual interest certificates. These
securities serve as collateral in a financing transaction. See Note 1(c)
to Financial Statements for details of Municipal Bonds Held in Trust.
o Forward interest rate swaps outstanding as of October 31, 2006
were as follows:
Notional Unrealized
Amount Depreciation
Pay a fixed rate of 3.881% and receive
a floating rate based on 1-week Bond
Market Association rate
Broker, JPMorgan Chase
Expires November 2016 $ 7,250 $ (140)
See Notes to Financial Statements.
ANNUAL REPORTS OCTOBER 31, 2006
Schedule of Investments as of October 31, 2006
BlackRock MuniYield New Jersey Insured Fund, Inc. (In Thousands)
Face
Amount Municipal Bonds Value
New Jersey--133.7%
$ 1,000 Delaware River and Bay Authority of New Jersey and
Delaware Revenue Bonds, 5% due 1/01/2033 (e) $ 1,046
Delaware River Joint Toll Bridge Commission of
New Jersey and Pennsylvania, Bridge Revenue
Refunding Bonds:
1,875 5% due 7/01/2023 1,967
1,000 5% due 7/01/2028 1,043
540 Essex County, New Jersey, Improvement Authority
Revenue Bonds, Series A, 5% due 10/01/2028 (c) 568
6,925 Garden State Preservation Trust of New Jersey,
Capital Appreciation Revenue Bonds, Series B, 5.12%
due 11/01/2023 (d)(k) 3,377
Garden State Preservation Trust of New Jersey, Open
Space and Farmland Preservation Revenue Bonds,
Series A (d):
2,605 5.80% due 11/01/2022 2,998
3,300 5.75% due 11/01/2028 4,073
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 2,149
2,700 Hopatcong, New Jersey, GO, Sewer Refunding Bonds,
4.50% due 8/01/2033 (a) 2,727
1,000 Hudson County, New Jersey, COP, Refunding, 6.25%
due 12/01/2016 (e) 1,190
7,500 Hudson County, New Jersey, Improvement Authority,
Facility Lease Revenue Refunding Bonds (Hudson
County Lease Project), 5.375% due 10/01/2024 (c) 7,796
5,200 Jackson Township, New Jersey, School District, GO,
5% due 4/15/2012 (c)(h) 5,565
3,750 Jersey City, New Jersey, Sewer Authority, Sewer
Revenue Refunding Bonds, 6.25% due 1/01/2014 (a) 4,237
3,000 Middlesex County, New Jersey, COP, Refunding, 5%
due 8/01/2022 (e) 3,140
Monmouth County, New Jersey, Improvement
Authority, Governmental Loan Revenue Bonds (a):
735 5.20% due 12/01/2014 777
2,305 5.25% due 12/01/2015 2,437
Monmouth County, New Jersey, Improvement
Authority, Governmental Loan Revenue Refunding
Bonds (a):
1,695 5% due 12/01/2017 1,794
1,520 5% due 12/01/2018 1,607
1,540 5% due 12/01/2019 1,628
New Jersey EDA, Cigarette Tax Revenue Bonds:
1,060 5.625% due 6/15/2019 1,117
785 5.75% due 6/15/2029 854
225 5.50% due 6/15/2031 240
465 5.75% due 6/15/2034 503
1,000 New Jersey EDA, First Mortgage Revenue Bonds
(Fellowship Village), Series C, 5.50% due 1/01/2028 1,023
1,700 New Jersey EDA, First Mortgage Revenue Refunding
Bonds (Fellowship Village), Series A, 5.50%
due 1/01/2018 1,740
Face
Amount Municipal Bonds Value
New Jersey (continued)
New Jersey EDA, Motor Vehicle Surcharge Revenue
Bonds, Series A (e):
$ 3,325 4.95% due 7/01/2021 (k) $ 1,805
3,900 5% due 7/01/2029 4,118
8,500 5.25% due 7/01/2033 9,154
1,765 5% due 7/01/2034 1,860
3,500 New Jersey EDA, School Facilities Construction
Revenue Bonds, Series L, 5% due 3/01/2030 (d) 3,703
New Jersey EDA, School Facilities Construction,
Revenue Refunding Bonds, Series K:
2,000 5.25% due 12/15/2016 (a) 2,224
6,500 5.25% due 12/15/2017 (c) 7,211
5,070 New Jersey EDA, Water Facilities Revenue Bonds
(New Jersey--American Water Company, Inc. Project),
Series A, 6.875% due 11/01/2034 (c) 5,083
New Jersey Health Care Facilities Financing Authority
Revenue Bonds:
2,100 (RWJ Healthcare Corporation), Series B, 5%
due 7/01/2035 (f) 2,201
1,125 (Somerset Medical Center), 5.50%
due 7/01/2033 1,175
4,000 (South Jersey Hospital), 6.0% due 7/01/2012 (h) 4,451
New Jersey Health Care Facilities Financing Authority,
Revenue Refunding Bonds:
615 (Atlantic City Medical Center), 6.25%
due 7/01/2017 687
1,315 (Atlantic City Medical Center), 5.75%
due 7/01/2025 1,414
2,425 (Holy Name Hospital), 6% due 7/01/2025 2,498
2,250 (Meridian Health System Obligation Group),
5.25% due 7/01/2019 (d) 2,355
New Jersey Sports and Exposition Authority,
Luxury Tax Revenue Refunding Bonds (Convention
Center) (e):
2,000 5% due 9/01/2017 2,069
1,540 5.50% due 3/01/2021 1,786
1,000 5.50% due 3/01/2022 1,166
3,200 New Jersey State Educational Facilities Authority,
Higher Education, Capital Improvement Revenue
Bonds, Series A, 5.125% due 9/01/2012 (a)(h) 3,458
New Jersey State Educational Facilities Authority
Revenue Bonds:
1,600 (Montclair State University), Series A, 5%
due 7/01/2021 (a) 1,732
1,315 (Rowan University), Series C, 5.125%
due 7/01/2028 (e) 1,405
1,185 (Rowan University), Series C, 5%
due 7/01/2034 (e) 1,250
New Jersey State Educational Facilities Authority,
Revenue Refunding Bonds:
3,185 (Montclair State University), Series L, 5%
due 7/01/2034 (e) 3,360
555 (Rowan University), Series C, 5%
due 7/01/2031 (c) 579
1,725 (William Paterson University), Series E, 5%
due 7/01/2021 (g) 1,830
ANNUAL REPORTS OCTOBER 31, 2006
Schedule of Investments (continued)
BlackRock MuniYield New Jersey Insured Fund, Inc. (In Thousands)
Face
Amount Municipal Bonds Value
New Jersey (continued)
$ 3,500 New Jersey State, GO, Refunding, Series H, 5.25%
due 7/01/2015 (d) $ 3,896
4,305 New Jersey State Higher Education Assistance
Authority, Student Loan Revenue Bonds, AMT,
Series A, 5.30% due 6/01/2017 (a) 4,309
4,425 New Jersey State Housing and Mortgage Finance
Agency, Capital Fund Program Revenue Bonds,
Series A, 4.70% due 11/01/2025 (d) 4,540
3,150 New Jersey State Housing and Mortgage Finance
Agency, Home Buyer Revenue Bonds, AMT,
Series CC, 5.80% due 10/01/2020 (e) 3,279
1,000 New Jersey State Housing and Mortgage Finance
Agency, M/F Revenue Bonds, AMT, Series A, 4.90%
due 11/01/2035 (c) 1,014
New Jersey State Transportation Trust Fund
Authority, Transportation System Revenue Bonds:
2,760 Series C, 5.05% due 12/15/2035 (a)(k) 777
3,240 Series D, 5% due 6/15/2019 (d) 3,493
New Jersey State Transportation Trust Fund Authority,
Transportation System Revenue Refunding Bonds:
4,250 Series A, 5.25% due 12/15/2020 (d) 4,838
3,600 Series B, 5.50% due 12/15/2021 (e) 4,208
3,005 New Jersey State Turnpike Authority, Turnpike
Revenue Bonds, Series B, 5.15% due 1/01/2035 (a)(k) 2,126
1,835 New Jersey State Turnpike Authority, Turnpike
Revenue Refunding Bonds, Series C-1, 4.50%
due 1/01/2031 (a) 1,839
1,710 North Hudson Sewage Authority, New Jersey,
Sewer Revenue Refunding Bonds, 5.125%
due 8/01/2020 (e) 1,925
1,000 Port Authority of New York and New Jersey,
Consolidated Revenue Bonds, 93rd Series, 6.125%
due 6/01/2094 1,221
6,355 Port Authority of New York and New Jersey,
Consolidated Revenue Refunding Bonds, AMT,
119th Series, 5.25% due 9/15/2014 (c) 6,426
4,100 Rahway Valley Sewerage Authority, New Jersey,
Sewer Revenue Bonds (Capital Appreciation),
Series A, 4.74% due 9/01/2026 (e)(k) 1,743
2,200 South Jersey Port Corporation of New Jersey,
Revenue Refunding Bonds, 5% due 1/01/2023 2,296
1,715 Tobacco Settlement Financing Corporation of
New Jersey, Asset-Backed Revenue Bonds, 7%
due 6/01/2041 1,984
Union County, New Jersey, Utilities Authority, Senior
Lease Revenue Refunding Bonds (Ogden Martin
System of Union, Inc.), AMT, Series A (a):
1,590 5.375% due 6/01/2017 1,638
1,670 5.375% due 6/01/2018 1,720
University of Medicine and Dentistry of New Jersey,
Revenue Bonds, Series A (a):
570 5.50% due 12/01/2018 625
1,145 5.50% due 12/01/2019 1,255
1,130 5.50% due 12/01/2020 1,239
865 5.50% due 12/01/2021 948
Face
Amount Municipal Bonds Value
Puerto Rico--6.2%
Puerto Rico Commonwealth Highway and
Transportation Authority, Transportation Revenue
Refunding Bonds:
$ 1,500 Series J, 5% due 7/01/2029 (e) $ 1,591
1,380 Series K, 5% due 7/01/2040 1,439
2,000 Puerto Rico Electric Power Authority, Power Revenue
Bonds, Series RR, 5% due 7/01/2028 (b) 2,127
740 Puerto Rico Electric Power Authority, Power Revenue
Refunding Bonds, Series PP, 5% due 7/01/2025 (c) 788
2,110 Puerto Rico Industrial, Tourist, Educational, Medical
and Environmental Control Facilities Revenue
Bonds (Ascension Health), RIB, Series 377, 8.41%
due 11/15/2030 (i) 2,497
Total Municipal Bonds
(Cost--$179,097)--139.9% 189,951
Municipal Bonds Held in Trust (m)
New Jersey--4.0%
Delaware River Port Authority of New Jersey
and Pennsylvania Revenue Bonds (d):
2,500 6% due 1/01/2018 2,675
2,500 6% due 1/01/2019 2,676
New York--6.1%
8,150 Port Authority of New York and New Jersey,
Consolidated Revenue Bonds, AMT, 108th
Series, 5.875% due 1/15/2017 (d) 8,266
Puerto Rico--8.3%
11,000 Puerto Rico Public Buildings Authority Revenue
Bonds (Government Facilities), Series B, 5.25%
due 7/01/2007 (e)(h) 11,296
Total Municipal Bonds Held in Trust
(Cost--$24,389)--18.4% 24,913
Shares
Held Short-Term Securities
1,361 CMA New Jersey Municipal Money
Fund, 2.92% (i)(j) 1,361
Total Short-Term Securities
(Cost--$1,361)--1.0% 1,361
Total Investments (Cost--$204,847*)--159.3% 216,225
Other Assets Less Liabilities--4.0% 5,512
Liability for Trust Certificates,
Including Interest Expense Payable--(9.2%) (12,453)
Preferred Stock, at Redemption Value--(54.1%) (73,517)
----------
Net Assets Applicable to Common Stock--100.0% $ 135,767
==========
ANNUAL REPORTS OCTOBER 31, 2006
Schedule of Investments (concluded)
BlackRock MuniYield New Jersey Insured Fund, Inc. (In Thousands)
* The cost and unrealized appreciation (depreciation) of investments
as of October 31, 2006, as computed for federal income tax purposes,
were as follows:
Aggregate cost $ 192,630
============
Gross unrealized appreciation $ 11,257
Gross unrealized depreciation --
------------
Net unrealized appreciation $ 11,257
============
(a) AMBAC Insured.
(b) CIFG Insured.
(c) FGIC Insured.
(d) FSA Insured.
(e) MBIA Insured.
(f) Radian Insured.
(g) XL Capital Insured.
(h) Prerefunded.
(i) The rate disclosed is that currently in effect. This rate changes
periodically and inversely based upon prevailing market rates.
(j) Investments in companies considered to be an affiliate of the Fund,
for purposes of Section 2(a)(3) of the Investment Company Act of 1940,
were as follows:
Net Dividend
Affiliate Activity Income
CMA New Jersey Municipal Money Fund 846 $42
(k) Represents a zero coupon bond; the interest rate shown reflects the
effective yield at the time of purchase.
(l) Represents the current yield as of October 31, 2006.
(m) Securities represent underlying bonds transferred to a separate
securitization trust established in a tender option bond transaction
in which the Fund acquired the residual interest certificates. These
securities serve as collateral in a financing transaction. See Note 1(c)
to Financial Statements for details of Municipal Bonds Held in Trust.
See Notes to Financial Statements.
ANNUAL REPORTS OCTOBER 31, 2006
Schedule of Investments as of October 31, 2006
BlackRock MuniYield Pennsylvania Insured Fund (In Thousands)
Face
Amount Municipal Bonds Value
Pennsylvania--125.2%
$ 2,000 Allegheny County, Pennsylvania, Hospital
Development Authority, Health Center Revenue
Bonds (University of Pittsburgh Medical Center
Health System), Series B, 6% due 7/01/2026 (f) $ 2,478
1,000 Allegheny County, Pennsylvania, Residential Finance
Authority, S/F Mortgage Revenue Bonds, AMT,
Series TT, 5% due 5/01/2035 (d) 1,020
5,000 Allegheny County, Pennsylvania, Sanitation Authority,
Sewer Revenue Refunding Bonds, Series A, 5%
due 12/01/2030 (f) 5,303
1,750 Chester County, Pennsylvania, Health and Education
Facilities Authority, Revenue Refunding Bonds
(Devereux Foundation), 5% due 11/01/2031 1,826
5,500 Delaware County, Pennsylvania, IDA Revenue Bonds
(Pennsylvania Suburban Water Company Project),
AMT, Series A, 5.15% due 9/01/2032 (a) 5,758
4,770 Delaware County, Pennsylvania, IDA, Water Facilities
Revenue Refunding Bonds (Aqua Pennsylvania Inc.
Project), AMT, Series B, 5% due 11/01/2036 (c) 4,982
1,500 Delaware Valley Regional Finance Authority,
Pennsylvania, Local Government Revenue Bonds,
5.75% due 7/01/2032 1,817
5,000 Erie County, Pennsylvania, Hospital Authority
Revenue Bonds (Hamot Health Foundation), 5%
due 11/01/2035 (h) 5,303
4,000 Gettysburg, Pennsylvania, Municipal Authority,
College Revenue Refunding Bonds, 5%
due 8/15/2023 (f) 4,113
4,000 Lancaster County, Pennsylvania, Hospital Authority
Revenue Bonds (Lancaster General Hospital Project),
5.50% due 3/15/2026 4,288
3,000 Lehigh County, Pennsylvania, General Purpose
Authority, Hospital Revenue Refunding Bonds
(Saint Lukes Hospital of Bethlehem), 5.375%
due 8/15/2033 3,161
5,000 Lehigh County, Pennsylvania, IDA, PCR, Refunding
(Pennsylvania Power and Light Utilities Corporation
Project), Series A, 4.70% due 9/01/2029 (c) 5,108
2,675 North Allegheny, Pennsylvania, School District, GO,
Series C, 5.25% due 5/01/2027 (e) 2,888
5,000 Northampton Borough, Pennsylvania, Municipal
Authority, Water Revenue Bonds, 5%
due 5/15/2034 (f) 5,266
6,000 Northumberland County, Pennsylvania, IDA, Water
Facilities Revenue Refunding Bonds (Aqua
Pennsylvania Inc. Project), AMT, 5.05%
due 10/01/2039 (c) 6,247
Face
Amount Municipal Bonds Value
Pennsylvania (continued)
$ 3,055 Pennsbury, Pennsylvania, School District, GO,
Refunding, 5.50% due 1/15/2020 (c) $ 3,334
1,200 Pennsylvania Economic Development Financing
Authority, Solid Waste Disposal Revenue Bonds
(Waste Management Inc. Project), AMT, Series A,
5.10% due 10/01/2027 1,242
2,500 Pennsylvania HFA, Revenue Bonds, DRIVERS, AMT,
Series 1248Z, 6.591% due 10/01/2009 (f)(i) 2,624
5,000 Pennsylvania HFA, S/F Mortgage Revenue Refunding
Bonds, AMT, Series 92-A, 4.75% due 4/01/2031 5,024
Pennsylvania State Higher Educational Facilities
Authority Revenue Bonds:
3,000 (UPMC Health System), Series A, 6%
due 1/15/2022 3,283
4,305 (York College of Pennsylvania Project),
Series EE1, 5% due 11/01/2033 (g) 4,558
8,845 Pennsylvania State Higher Educational Facilities
Authority, State System Revenue Bonds, Series AE,
4.75% due 6/15/2032 (f) 9,148
7,000 Pennsylvania State IDA, EDR, Refunding, 5.50%
due 7/01/2020 (a) 7,692
Pennsylvania State Public School Building Authority,
Revenue Bonds (Lehigh Career and Technical
Institute) (c):
3,085 5.125% due 10/01/2028 3,260
2,000 5.25% due 10/01/2032 2,134
Pennsylvania State Public School Building Authority,
School and Capital Appreciation Revenue Bonds
(Corry Area School District) (e)(m):
1,980 4.85% due 12/15/2022 988
1,980 4.87% due 12/15/2023 941
1,980 4.89% due 12/15/2024 898
1,980 4.92% due 12/15/2025 857
Pennsylvania State Public School Building Authority,
School Lease Revenue Bonds (The School District of
Philadelphia Project) (e):
10,000 5.25% due 6/01/2025 10,795
10,300 5% due 6/01/2033 10,793
870 Pennsylvania State Turnpike Commission, Oil
Franchise Tax Revenue Refunding Bonds,
Sub-Series B, 5% due 12/01/2023 (a) 939
5,000 Philadelphia, Pennsylvania, Airport Revenue Bonds,
Series A, AMT, 4.75% due 6/15/2035 (f) 5,074
Philadelphia, Pennsylvania, Authority for Industrial
Development, Airport Revenue Refunding Bonds
(Philadelphia Airport System Project), AMT,
Series A (c):
4,000 5.50% due 7/01/2017 4,291
3,655 5.50% due 7/01/2018 3,921
ANNUAL REPORTS OCTOBER 31, 2006
Schedule of Investments (continued)
BlackRock MuniYield Pennsylvania Insured Fund (In Thousands)
Face
Amount Municipal Bonds Value
Pennsylvania (concluded)
Philadelphia, Pennsylvania, Authority for Industrial
Development, Lease Revenue Bonds (e):
$ 9,125 (City of Philadelphia Project), Series A, 5.375%
due 2/15/2027 (f) $ 9,347
3,000 Series B, 5.50% due 10/01/2020 3,263
4,680 Series B, 5.50% due 10/01/2021 5,075
10,000 Philadelphia, Pennsylvania, Gas Works Revenue
Bonds, 1998 General Ordinance, 4th Series, 5%
due 8/01/2032 (e) 10,465
Philadelphia, Pennsylvania, Hospitals and Higher
Education Facilities Authority, Hospital Revenue
Refunding Bonds:
100 (Children's Hospital Project), VRDN, Series D,
3.61% due 7/01/2031 (f)(l) 100
3,000 (Presbyterian Medical Center), 6.65%
due 12/01/2019 (b) 3,660
3,000 Philadelphia, Pennsylvania, Housing Authority
Revenue Bonds (Capital Fund Program), Series A,
5.50% due 12/01/2018 (e) 3,280
4,645 Philadelphia, Pennsylvania, Qualified Redevelopment
Authority Revenue Bonds, AMT, Series B, 5%
due 4/15/2027 (c) 4,843
1,750 Philadelphia, Pennsylvania, Redevelopment Authority
Revenue Bonds (Neighborhood Transformation),
Series A, 5.50% due 4/15/2022 (c) 1,891
Philadelphia, Pennsylvania, School District, GO (c):
5,000 Series D, 5.125% due 6/01/2034 5,299
4,000 Series D, 5.25% due 6/01/2034 4,292
5,300 Philadelphia, Pennsylvania, Water and Wastewater
Revenue Refunding Bonds, VRDN, Series B, 3.55%
due 8/01/2018 (e)(l) 5,300
8,245 Pittsburgh, Pennsylvania, Water and Sewer
Authority, Water and Sewer System Revenue Bonds,
First Lien, 5% due 9/01/2033 (f) 8,733
6,000 Reading, Pennsylvania, School District, GO, 5%
due 1/15/2029 (e) 6,396
2,600 Sayre, Pennsylvania, Health Care Facilities Authority,
Revenue Refunding Bonds (Guthrie Healthcare
System), Series A, 5.875% due 12/01/2031 2,823
6,145 Shaler Area School District, Pennsylvania, Capital
Appreciation, GO, 4.765% due 9/01/2030 (g)(m) 2,148
Southeastern Pennsylvania Transportation Authority,
Special Revenue Bonds (c):
4,500 5.375% due 3/01/2017 4,614
2,525 5.375% due 3/01/2022 2,588
2,570 Westmoreland County, Pennsylvania, Municipal
Authority, Municipal Service Revenue Bonds, 5.25%
due 8/15/2028 (e) 2,790
Face
Amount Municipal Bonds Value
Guam--1.4%
$ 2,500 A.B. Won Guam International Airport Authority,
General Revenue Refunding Bonds, AMT, Series C,
5% due 10/01/2023 (f) $ 2,598
Puerto Rico--10.6%
10,795 Puerto Rico Commonwealth, Public Improvement,
GO, Series A, 5% due 7/01/2034 11,251
Puerto Rico Public Buildings Authority, Government
Facilities Revenue Refunding Bonds, Series I:
2,500 5.50% due 7/01/2025 2,747
5,000 5.375% due 7/01/2034 5,397
Total Municipal Bonds
(Cost--$237,407)--137.2% 250,254
Municipal Bonds Held in Trust (o)
Pennsylvania--32.7%
7,000 Luzerne County, Pennsylvania, IDA, Water Facility
Revenue Refunding Bonds (Pennsylvania American
Water Company Project), AMT, Series A, 5.10%
due 9/01/2034 (a) 7,325
15,000 Pennsylvania State Public School Building Authority,
School Lease Revenue Bonds (The School District of
Philadelphia Project), 5.25% due 6/01/2013 (e)(n) 16,066
15,000 Pennsylvania State Turnpike Commission, Oil
Franchise Tax Revenue Bonds, Sub-Series B, 5.50%
due 12/01/2013 (f)(n) 16,472
7,800 Pennsylvania State Turnpike Commission, Turnpike
Revenue Bonds, Series A, 5.50% due 12/01/2031 (a) 8,652
10,000 Philadelphia, Pennsylvania, School District, GO,
Series B, 5.625% due 8/01/2012 (c)(n) 11,043
Total Municipal Bonds Held in Trust
(Cost--$56,503)--32.7% 59,558
Shares
Held Short-Term Securities
66 CMA Pennsylvania Municipal Money Fund, 2.96% (j)(k) 66
Total Short-Term Securities
(Cost--$66)--0.0% 66
Total Investments (Cost--$293,976*)--169.9% 309,878
Other Assets Less Liabilities--1.3% 2,316
Liability for Trust Certificates,
Including Interest Expense Payable--(15.2%) (27,750)
Preferred Shares, at Redemption Value--(56.0%) (102,042)
----------
Net Assets Applicable to Common Shares--100.0% $ 182,402
==========
ANNUAL REPORTS OCTOBER 31, 2006
Schedule of Investments (concluded)
BlackRock MuniYield Pennsylvania Insured Fund (In Thousands)
* The cost and unrealized appreciation (depreciation) of investments
as of October 31, 2006, as computed for federal income tax purposes,
were as follows:
Aggregate cost $ 267,108
=============
Gross unrealized appreciation $ 15,370
Gross unrealized depreciation --
-------------
Net unrealized appreciation $ 15,370
=============
(a) AMBAC Insured.
(b) Escrowed to maturity.
(c) FGIC Insured.
(d) FNMA/GNMA Collateralized.
(e) FSA Insured.
(f) MBIA Insured.
(g) XL Capital Insured.
(h) CIFG Insured.
(i) The rate disclosed is that currently in effect. This rate changes
periodically and inversely based upon prevailing market rates.
(j) Represents the current yield as of October 31, 2006.
(k) Investments in companies considered to be an affiliate of the Fund,
for purposes of Section 2(a)(3) of the Investment Company Act of 1940,
were as follows:
Net Dividend
Affiliate Activity Income
CMA Pennsylvania Municipal Money Fund (2,648) $50
(l) Security may have a maturity of more than one year at time of issuance,
but has variable rate and demand features that qualify it as a short-term
security. The rate disclosed is that currently in effect. This rate
changes periodically based upon prevailing market rates.
(m) Represents a zero coupon bond; the interest rate shown reflects the
effective yield at the time of purchase.
(n) Prerefunded.
(o) Securities represent underlying bonds transferred to a separate
securitization trust established in a tender option bond transaction
in which the Fund acquired the residual interest certificates. These
securities serve as collateral in a financing transaction. See Note 1(c)
to Financial Statements for details of Municipal Bonds Held in Trust.
o Forward interest rate swaps outstanding as of October 31, 2006
were as follows:
Notional Unrealized
Amount Depreciation
Pay a fixed rate of 3.901% and
receive a floating rate based on
1-week USD Bond Market
Association rate
Broker, JPMorgan Chase
Expires December 2016 $ 9,000 $ (184)
Pay a fixed rate of 3.856% and
receive a floating rate based on
1-week Bond Market Association rate
Broker, JPMorgan Chase
Expires December 2016 $15,000 (259)
Pay a fixed rate of 3.804% and
receive a floating rate based on
1-week Bond Market Association rate
Broker, JPMorgan Chase
Expires January 2017 $38,600 (482)
--------
Total $ (925)
========
See Notes to Financial Statements.
ANNUAL REPORTS OCTOBER 31, 2006
Statements of Net Assets
BlackRock BlackRock BlackRock BlackRock
MuniYield MuniYield MuniYield MuniYield
Florida Michigan New Jersey Pennsylvania
Insured Insured Insured Insured
As of October 31, 2006 Fund Fund, Inc. Fund, Inc. Fund
Assets
Investments in unaffiliated securities, at value* $ 203,202,611 $ 474,940,123 $ 214,863,938 $ 309,812,460
Investments in affiliated securities, at value** 5,049,682 7,384,269 1,361,381 65,868
Cash 48,824 11,826 19,875 30,259
Interest receivable 2,488,866 8,564,255 3,398,699 4,419,535
Receivable for securities sold 1,243,324 75,000 2,331,820 --
Prepaid expenses 8,413 10,250 6,984 8,732
------------- ------------- ------------- -------------
Total assets 212,041,720 490,985,723 221,982,697 314,336,854
------------- ------------- ------------- -------------
Liabilities
Trust certificates 10,030,000 37,987,818 12,338,455 27,400,000
Unrealized depreciation on forward interest rate swaps 189,761 139,794 -- 924,775
Payable for securities purchased 3,493,602 5,731,943 -- 928,090
Interest expense payable 102,659 317,235 115,075 349,916
Dividends payable to Common Stock/Shareholders 40,340 134,737 106,583 103,385
Payable to investment adviser 78,484 180,916 85,030 115,564
Payable to other affiliates 1,276 2,872 1,340 1,824
Accrued expenses 51,784 79,885 52,289 69,050
------------- ------------- ------------- -------------
Total liabilities 13,987,906 44,575,200 12,698,772 29,892,604
------------- ------------- ------------- -------------
Preferred Stock/Shares
Preferred Stock/Shares, at redemption value, of
AMPS+++ at $25,000 per share liquidation preference++*** 72,012,036 165,060,906 73,517,337 102,042,310
------------- ------------- ------------- -------------
Net Assets Applicable to Common Stock/Shares
Net assets applicable to Common Stock/Shares $ 126,041,778 $ 281,349,617 $ 135,766,588 $ 182,401,940
============= ============= ============= =============
Analysis of Net Assets Applicable to Common Stock/Shares
Undistributed investment income--net $ 635,928 $ 1,401,171 $ 1,086,101 $ 650,149
Accumulated realized capital losses--net (3,349,426) (16,872,143) (830,381) (4,307,412)
Unrealized appreciation--net 10,333,687 26,212,624 11,374,094 14,977,344
------------- ------------- ------------- -------------
Total accumulated earnings--net 7,620,189 10,741,652 11,629,814 11,320,081
------------- ------------- ------------- -------------
Common Stock/Shares, par value $.10 per share++++ 845,181 1,820,630 880,210 1,148,057
Paid-in capital in excess of par 117,576,408 268,787,335 123,256,564 169,933,802
------------- ------------- ------------- -------------
Net Assets $ 126,041,778 $ 281,349,617 $ 135,766,588 $ 182,401,940
============= ============= ============= =============
Net asset value per share of Common Stock/Shares $ 14.91 $ 15.45 $ 15.42 $ 15.89
============= ============= ============= =============
Market Price $ 14.21 $ 14.67 $ 14.96 $ 14.60
============= ============= ============= =============
* Identified cost of unaffiliated securities $ 192,679,163 $ 449,850,058 $ 203,486,114 $ 293,910,341
============= ============= ============= =============
** Identified cost of affiliated securities $ 5,049,682 $ 7,384,269 $ 1,361,381 $ 65,868
============= ============= ============= =============
*** Preferred Stock/Shares issued and outstanding:
Series A, par value of $.05 per share 2,400 2,000 2,240 1,600
============= ============= ============= =============
Series B, par value of $.05 per share 480 2,000 -- 1,920
============= ============= ============= =============
Series B, par value of $.10 per share -- -- 700 --
============= ============= ============= =============
Series C, par value of $.05 per share -- 1,600 -- 560
============= ============= ============= =============
Series D, par value of $.10 per share -- 1,000 -- --
============= ============= ============= =============
++ Preferred Stock/Shares authorized 1,000,000 6,600 2,940 1,000,000
============= ============= ============= =============
++++ Common Stock/Shares issued and outstanding 8,451,814 18,206,301 8,802,099 11,480,567
============= ============= ============= =============
+++ Auction Market Preferred Stock/Shares.
See Notes to Financial Statements.
ANNUAL REPORTS OCTOBER 31, 2006
Statements of Operations
BlackRock BlackRock BlackRock BlackRock
MuniYield MuniYield MuniYield MuniYield
Florida Michigan New Jersey Pennsylvania
Insured Insured Insured Insured
For the Year Ended October 31, 2006 Fund Fund, Inc. Fund, Inc. Fund
Investment Income
Interest and amortization of premium and discount $ 9,897,507 $ 23,243,218 $ 10,638,422 $ 14,601,944
Dividends from affiliates 67,175 154,834 42,392 50,349
------------- ------------- ------------- -------------
Total income 9,964,682 23,398,052 10,680,814 14,652,293
------------- ------------- ------------- -------------
Expenses
Investment advisory fees 980,331 2,210,828 1,030,931 1,404,987
Interest expense and fees 346,320 1,384,180 579,291 1,008,056
Commission fees 185,606 422,218 186,365 260,760
Accounting services 87,757 151,121 90,470 109,552
Transfer agent fees 35,021 76,347 47,425 63,562
Professional fees 50,672 60,174 49,641 54,684
Printing and shareholder reports 18,864 31,415 19,125 24,504
Directors'/Trustees' fees and expenses 24,474 24,474 24,474 24,474
Listing fees 16,612 16,572 16,692 16,572
Pricing fees 13,763 19,505 11,811 11,526
Custodian fees 13,139 24,681 12,573 17,026
Other 41,423 56,954 41,925 47,151
------------- ------------- ------------- -------------
Total expenses before reimbursement 1,813,982 4,478,469 2,110,723 3,042,854
Reimbursement of expenses (11,855) (28,212) (7,389) (9,355)
------------- ------------- ------------- -------------
Total expenses after reimbursement 1,802,127 4,450,257 2,103,334 3,033,499
------------- ------------- ------------- -------------
Investment income--net 8,162,555 18,947,795 8,577,480 11,618,794
------------- ------------- ------------- -------------
Realized and Unrealized Gain (Loss)--Net
Realized gain (loss) on:
Investments--net 137,241 1,050,493 910,969 221,766
Forward interest rate swaps--net (88,344) (284,274) 71,694 (187,040)
------------- ------------- ------------- -------------
Total realized gain--net 48,897 766,219 982,663 34,726
------------- ------------- ------------- -------------
Change in unrealized appreciation/depreciation on:
Investments--net 2,387,466 3,330,906 2,184,848 5,823,364
Forward interest rate swaps--net (343,913) (139,794) (46,507) (1,695,227)
------------- ------------- ------------- -------------
Total change in unrealized appreciation/depreciation--net 2,043,553 3,191,112 2,138,341 4,128,137
------------- ------------- ------------- -------------
Total realized and unrealized gain--net 2,092,450 3,957,331 3,121,004 4,162,863
------------- ------------- ------------- -------------
Dividends to Preferred Stock/Shareholders
Investment income--net (2,323,697) (5,190,018) (2,163,956) (3,155,383)
------------- ------------- ------------- -------------
Net Increase in Net Assets Resulting from Operations $ 7,931,308 $ 17,715,108 $ 9,534,528 $ 12,626,274
============= ============= ============= =============
See Notes to Financial Statements.
ANNUAL REPORTS OCTOBER 31, 2006
Statements of Changes in Net Assets (As Restated for 2005. See Note 6)
BlackRock MuniYield
Florida Insured Fund
For the Year Ended October 31,
Increase (Decrease) in Net Assets: 2006 2005
Operations
Investment income--net $ 8,162,555 $ 8,290,264
Realized gain--net 48,897 1,559,111
Change in unrealized appreciation/depreciation--net 2,043,553 (4,774,619)
Dividends to Preferred Shareholders (2,323,697) (1,442,962)
------------- -------------
Net increase in net assets resulting from operations 7,931,308 3,631,794
------------- -------------
Dividends to Common Shareholders
Investment income--net (6,338,731) (7,564,939)
------------- -------------
Net decrease in net assets resulting from dividends to Common Shareholders (6,338,731) (7,564,939)
------------- -------------
Share Transactions
Value of shares issued to Common Shareholders in reinvestment of dividends 27,237 144,662
Offering and underwriting costs resulting from the issuance of Preferred Shares -- (244,177)
------------- -------------
Net increase (decrease) in net assets derived from share transactions 27,237 (99,515)
------------- -------------
Net Assets Applicable to Common Shares
Total increase (decrease) in net assets applicable to Common Shares 1,619,814 (4,032,660)
Beginning of year 124,421,964 128,454,624
------------- -------------
End of year* $ 126,041,778 $ 124,421,964
============= =============
* Undistributed investment income--net $ 635,928 $ 1,135,801
============= =============
See Notes to Financial Statements.
ANNUAL REPORTS OCTOBER 31, 2006
Statements of Changes in Net Assets
BlackRock MuniYield
Michigan Insured Fund, Inc.
For the Year Ended October 31,
Increase (Decrease) in Net Assets: 2006 2005
Operations
Investment income--net $ 18,947,795 $ 19,600,893
Realized gain--net 766,219 4,103,542
Change in unrealized appreciation/depreciation--net 3,191,112 (13,931,894)
Dividends to Preferred Stock shareholders (5,190,018) (3,245,894)
------------- -------------
Net increase in net assets resulting from operations 17,715,108 6,526,647
------------- -------------
Dividends to Common Stock Shareholders
Investment income--net (15,230,229) (17,757,326)
------------- -------------
Net decrease in net assets resulting from dividends to Common Stock shareholders (15,230,229) (17,757,326)
------------- -------------
Stock Transactions
Value of shares issued to Common Stock shareholders in reinvestment of dividends 614,402 159,122
Offering and underwriting costs resulting from the issuance of Preferred Stock -- (373,118)
------------- -------------
Net increase (decrease) in net assets derived from stock transactions 614,402 (213,996)
------------- -------------
Net Assets Applicable to Common Stock
Total increase (decrease) in net assets applicable to Common Stock 3,099,281 (11,444,675)
Beginning of year 278,250,336 289,695,011
------------- -------------
End of year* $ 281,349,617 $ 278,250,336
============= =============
* Undistributed investment income--net $ 1,401,171 $ 2,873,508
============= =============
See Notes to Financial Statements.
ANNUAL REPORTS OCTOBER 31, 2006
Statements of Changes in Net Assets (As Restated for 2005. See Note 6)
BlackRock MuniYield
New Jersey Insured Fund, Inc.
For the Year Ended October 31,
Increase (Decrease) in Net Assets: 2006 2005
Operations
Investment income--net $ 8,577,480 $ 8,428,036
Realized gain--net 982,663 2,961,559
Change in unrealized appreciation/depreciation--net 2,138,341 (5,381,010)
Dividends to Preferred Stock shareholders (2,163,956) (1,395,905)
------------- -------------
Net increase in net assets resulting from operations 9,534,528 4,612,680
------------- -------------
Dividends to Common Stock Shareholders
Investment income--net (6,390,415) (8,036,760)
------------- -------------
Net decrease in net assets resulting from dividends to Common Stock shareholders (6,390,415) (8,036,760)
------------- -------------
Stock Transactions
Value of shares issued to Common Stock shareholders in reinvestment of dividends -- 675,155
Offering and underwriting costs, including adjustments, resulting from the
issuance of Preferred Stock -- 1,285
------------- -------------
Net increase in net assets derived from stock transactions -- 676,440
------------- -------------
Net Assets Applicable to Common Stock
Total increase (decrease) in net assets applicable to Common Stock 3,144,113 (2,747,640)
Beginning of year 132,622,475 135,370,115
------------- -------------
End of year* $ 135,766,588 $ 132,622,475
============= =============
* Undistributed investment income--net $ 1,086,101 $ 1,116,478
============= =============
See Notes to Financial Statements.
ANNUAL REPORTS OCTOBER 31, 2006
Statements of Changes in Net Assets (As Restated for 2005. See Note 6)
BlackRock MuniYield
Pennsylvania Insured Fund
For the Year Ended October 31,
Increase (Decrease) in Net Assets: 2006 2005
Operations
Investment income--net $ 11,618,794 $ 12,056,700
Realized gain--net 34,726 4,805,185
Change in unrealized appreciation/depreciation--net 4,128,137 (8,856,726)
Dividends to Preferred Shareholders (3,155,383) (2,146,454)
------------- -------------
Net increase in net assets resulting from operations 12,626,274 5,858,705
------------- -------------
Dividends to Common Shareholders
Investment income--net (8,977,803) (10,967,433)
------------- -------------
Net decrease in net assets resulting from dividends to Common Shareholders (8,977,803) (10,967,433)
------------- -------------
Share Transactions
Value of shares issued to Common Shareholders in reinvestment of dividends -- 269,585
Offering and underwriting costs, including adjustments, resulting from the
issuance of Preferred Shares (17,729) (266,553)
------------- -------------
Net increase (decrease) in net assets derived from share transactions (17,729) 3,032
------------- -------------
Net Assets Applicable to Common Shares
Total increase (decrease) in net assets applicable to Common Shares 3,630,742 (5,105,696)
Beginning of year 178,771,198 183,876,894
------------- -------------
End of year* $ 182,401,940 $ 178,771,198
============= =============
* Undistributed investment income--net $ 650,149 $ 1,164,541
============= =============
See Notes to Financial Statements.
ANNUAL REPORTS OCTOBER 31, 2006
Financial Highlights (As Restated for 2005, 2004, 2003 and 2002. See Note 6)
BlackRock MuniYield Florida Insured Fund
The following per share data and ratios have been derived For the Year Ended October 31,
from information provided in the financial statements. 2006 2005 2004 2003 2002
Per Share Operating Performance
Net asset value, beginning of year $ 14.72 $ 15.22 $ 15.04 $ 15.04 $ 14.94
---------- ---------- ---------- ---------- ----------
Investment income--net .97** .98** .98** 1.05** 1.04
Realized and unrealized gain (loss)--net .24 (.38) .20 (.06) .06
Dividends and distributions to Preferred Shareholders:
Investment income--net (.27) (.17) (.07) (.07) (.10)
Realized gain--net -- -- -- -- --++
---------- ---------- ---------- ---------- ----------
Total from investment operations .94 .43 1.11 .92 1.00
---------- ---------- ---------- ---------- ----------
Less dividends and distributions to Common Shareholders:
Investment income--net (.75) (.90) (.93) (.92) (.90)
Realized gain--net -- -- -- -- --++
---------- ---------- ---------- ---------- ----------
Total dividends and distributions to Common Shareholders (.75) (.90) (.93) (.92) (.90)
---------- ---------- ---------- ---------- ----------
Offering and underwriting costs resulting from the
issuance of Preferred Shares -- (.03) -- -- --
---------- ---------- ---------- ---------- ----------
Net asset value, end of year $ 14.91 $ 14.72 $ 15.22 $ 15.04 $ 15.04
========== ========== ========== ========== ==========
Market price per share, end of year $ 14.21 $ 14.18 $ 14.98 $ 14.18 $ 14.30
========== ========== ========== ========== ==========
Total Investment Return*
Based on net asset value per share 6.87% 2.72% 7.98% 6.45% 7.22%
========== ========== ========== ========== ==========
Based on market price per share 5.73% .54% 12.73% 5.56% 7.19%
========== ========== ========== ========== ==========
Ratios Based on Average Net Assets Applicable to Common Shares
Total expenses, net of reimbursement and excluding
interest expense*** 1.17% 1.20% 1.09% 1.08% 1.11%
========== ========== ========== ========== ==========
Total expenses, net of reimbursement*** 1.45% 1.38% 1.27% 1.25% 1.33%
========== ========== ========== ========== ==========
Total expenses*** 1.46% 1.38% 1.28% 1.25% 1.33%
========== ========== ========== ========== ==========
Total investment income--net*** 6.58% 6.50% 6.54% 6.86% 7.02%
========== ========== ========== ========== ==========
Amount of dividends to Preferred Shareholders 1.87% 1.13% .48% .47% .67%
========== ========== ========== ========== ==========
Investment income to Common Shareholders--net 4.71% 5.37% 6.06% 6.39% 6.35%
========== ========== ========== ========== ==========
Ratios Based on Average Net Assets Applicable to Preferred Shares
Dividends to Preferred Shareholders 3.23% 2.02% 1.02% 1.00% 1.39%
========== ========== ========== ========== ==========
Supplemental Data
Net assets applicable to Common Shares,
end of year (in thousands) $ 126,042 $ 124,422 $ 128,455 $ 126,915 $ 126,947
========== ========== ========== ========== ==========
Preferred Shares outstanding at liquidation
preference, end of year (in thousands) $ 72,000 $ 72,000 $ 60,000 $ 60,000 $ 60,000
========== ========== ========== ========== ==========
Portfolio turnover 34% 52% 28% 40% 37%
========== ========== ========== ========== ==========
Leverage
Asset coverage per $1,000 $ 2,751 $ 2,728 $ 3,141 $ 3,115 $ 3,116
========== ========== ========== ========== ==========
Dividends Per Share on Preferred Shares Outstanding
Series A--Investment income--net $ 805 $ 505 $ 255 $ 251 $ 348
========== ========== ========== ========== ==========
Series B++++--Investment income--net $ 814 $ 482 -- -- --
========== ========== ========== ========== ==========
* 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.
** Based on average shares outstanding.
*** Do not reflect the effect of dividends to Preferred Shareholders.
++ Amount is less than $(.01) per share.
++++ Series B was issued on November 22, 2004.
See Notes to Financial Statements.
ANNUAL REPORTS OCTOBER 31, 2006
Financial Highlights (As Restated for 2005, 2004, 2003 and 2002. See Note 6)
BlackRock MuniYield Michigan Insured Fund, Inc.
The following per share data and ratios have been derived For the Year Ended October 31,
from information provided in the financial statements. 2006 2005 2004 2003 2002
Per Share Operating Performance
Net asset value, beginning of year $ 15.32 $ 15.96 $ 15.94 $ 15.74 $ 15.81
---------- ---------- ---------- ---------- ----------
Investment income--net** 1.04 1.08 1.06 1.10 1.10
Realized and unrealized gain (loss)--net .22 (.54) .03 .15 (.12)
Dividends to Preferred Stock shareholders from
investment income--net (.29) (.18) (.07) (.07) (.11)
---------- ---------- ---------- ---------- ----------
Total from investment operations .97 .36 1.02 1.18 .87
---------- ---------- ---------- ---------- ----------
Less dividends to Common Stock shareholders from
investment income--net (.84) (.98) (1.00) (.98) (.94)
---------- ---------- ---------- ---------- ----------
Offering and underwriting costs resulting from the
issuance of Preferred Stock -- (.02) -- -- --
---------- ---------- ---------- ---------- ----------
Net asset value, end of year $ 15.45 $ 15.32 $ 15.96 $ 15.94 $ 15.74
========== ========== ========== ========== ==========
Market price per share, end of year $ 14.67 $ 15.31 $ 15.37 $ 14.69 $ 13.95
========== ========== ========== ========== ==========
Total Investment Return*
Based on net asset value per share 6.64% 2.24% 7.04% 8.26% 6.33%
========== ========== ========== ========== ==========
Based on market price per share 1.32% 6.10% 11.85% 12.57% 4.77%
========== ========== ========== ========== ==========
Ratios Based on Average Net Assets Applicable to Common Stock
Total expenses, net of reimbursement and excluding
interest expense*** 1.11% 1.10% 1.00% 1.01% 1.04%
========== ========== ========== ========== ==========
Total expenses, net of reimbursement*** 1.61% 1.42% 1.19% 1.20% 1.28%
========== ========== ========== ========== ==========
Total expenses*** 1.62% 1.42% 1.22% 1.21% 1.28%
========== ========== ========== ========== ==========
Total investment income--net*** 6.84% 6.84% 6.69% 6.83% 7.10%
========== ========== ========== ========== ==========
Amount of dividends to Preferred Stock shareholders 1.87% 1.13% .46% .45% .70%
========== ========== ========== ========== ==========
Investment income to Common Stock shareholders--net 4.97% 5.71% 6.23% 6.38% 6.40%
========== ========== ========== ========== ==========
Ratios Based on Average Net Assets Applicable to Preferred Stock
Dividends to Preferred Stock shareholders 3.15% 1.98% .95% .94% 1.40%
========== ========== ========== ========== ==========
Supplemental Data
Net assets applicable to Common Stock,
end of year (in thousands) $ 281,350 $ 278,250 $ 289,695 $ 289,364 $ 285,802
========== ========== ========== ========== ==========
Preferred Stock outstanding at liquidation
preference, end of year (in thousands) $ 165,000 $ 165,000 $ 140,000 $ 140,000 $ 140,000
========== ========== ========== ========== ==========
Portfolio turnover 15% 25% 32% 29% 25%
========== ========== ========== ========== ==========
Leverage
Asset coverage per $1,000 $ 2,705 $ 2,686 $ 3,069 $ 3,067 $ 3,041
========== ========== ========== ========== ==========
Dividends Per Share on Preferred Stock Outstanding
Series A--Investment income--net $ 795 $ 505 $ 250 $ 240 $ 354
========== ========== ========== ========== ==========
Series B--Investment income--net $ 780 $ 480 $ 232 $ 230 $ 362
========== ========== ========== ========== ==========
Series C--Investment income--net $ 786 $ 482 $ 226 $ 240 $ 333
========== ========== ========== ========== ==========
Series D++--Investment income--net $ 782 $ 505 -- -- --
========== ========== ========== ========== ==========
* 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.
** Based on average shares outstanding.
*** Do not reflect the effect of dividends to Preferred Stock shareholders.
++ Series D was issued on November 22, 2004.
See Notes to Financial Statements.
ANNUAL REPORTS OCTOBER 31, 2006
Financial Highlights (As Restated for 2005, 2004, 2003 and 2002. See Note 6)
BlackRock MuniYield New Jersey Insured Fund, Inc.
The following per share data and ratios have been derived For the Year Ended October 31,
from information provided in the financial statements. 2006 2005 2004 2003 2002
Per Share Operating Performance
Net asset value, beginning of year $ 15.07 $ 15.46 $ 15.25 $ 15.14 $ 15.17
---------- ---------- ---------- ---------- ----------
Investment income--net .97** .96** 1.03** 1.06** 1.07
Realized and unrealized gain (loss)--net .36 (.27) .21 .06 (.06)
Dividends and distributions to Preferred Stock
shareholders:
Investment income--net (.25) (.16) (.06) (.06) (.09)
Realized gain--net -- -- -- --++ --++
---------- ---------- ---------- ---------- ----------
Total from investment operations 1.08 .53 1.18 1.06 .92
---------- ---------- ---------- ---------- ----------
Less dividends and distributions to Common Stock
shareholders:
Investment income--net (.73) (.92) (.94) (.94) (.94)
Realized gain--net -- -- -- (.01) (.01)
---------- ---------- ---------- ---------- ----------
Total dividends and distributions to Common
Stock shareholders (.73) (.92) (.94) (.95) (.95)
---------- ---------- ---------- ---------- ----------
Offering and underwriting costs, including adjustments,
resulting from the issuance of Preferred Stock -- --++++++ (.03) -- --
---------- ---------- ---------- ---------- ----------
Net asset value, end of year $ 15.42 $ 15.07 $ 15.46 $ 15.25 $ 15.14
========== ========== ========== ========== ==========
Market price per share, end of year $ 14.96 $ 14.65 $ 15.16 $ 14.39 $ 14.45
========== ========== ========== ========== ==========
Total Investment Return*
Based on net asset value per share 7.50% 3.49% 7.99% 7.24% 6.27%
========== ========== ========== ========== ==========
Based on market price per share 7.28% 2.60% 12.23% 6.02% 2.30%
========== ========== ========== ========== ==========
Ratios Based on Average Net Assets Applicable to Common Stock
Total expense, net of reimbursement and excluding
interest expense*** 1.15% 1.16% 1.06% 1.03% 1.07%
========== ========== ========== ========== ==========
Total expenses, net of reimbursement*** 1.59% 1.52% 1.33% 1.29% 1.39%
========== ========== ========== ========== ==========
Total expenses*** 1.59% 1.52% 1.35% 1.30% 1.39%
========== ========== ========== ========== ==========
Total investment income--net*** 6.46% 6.21% 6.79% 6.89% 7.04%
========== ========== ========== ========== ==========
Amount of dividends to Preferred Stock shareholders 1.63% 1.03% .42% .38% .57%
========== ========== ========== ========== ==========
Investment income to Common Stock shareholders--net 4.83% 5.18% 6.37% 6.51% 6.47%
========== ========== ========== ========== ==========
Ratios Based on Average Net Assets Applicable to Preferred Stock
Dividends to Preferred Stock shareholders 2.94% 1.90% .95% .91% 1.32%
========== ========== ========== ========== ==========
Supplemental Data
Net assets applicable to Common Stock,
end of year (in thousands) $ 135,767 $ 132,622 $ 135,370 $ 133,240 $ 132,146
========== ========== ========== ========== ==========
Preferred Stock outstanding at liquidation
preference, end of year (in thousands) $ 73,500 $ 73,500 $ 73,500 $ 56,000 $ 56,000
========== ========== ========== ========== ==========
Portfolio turnover 11% 29% 16% 21% 25%
========== ========== ========== ========== ==========
Leverage
Asset coverage per $1,000 $ 2,847 $ 2,804 $ 2,842 $ 3,379 $ 3,360
========== ========== ========== ========== ==========
Dividends Per Share on Preferred Stock Outstanding
Series A--Investment income--net $ 736 $ 492 $ 232 $ 228 $ 330
========== ========== ========== ========== ==========
Series B++++--Investment income--net $ 735 $ 420 $ 57 -- --
========== ========== ========== ========== ==========
* 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.
** Based on average shares outstanding.
*** Do not reflect the effect of dividends to Preferred Stock shareholders.
++ Amount is less than $(.01) per share.
++++ Series B was issued on August 25, 2004.
++++++ Amount is less than $.01 per share.
See Notes to Financial Statements.
ANNUAL REPORTS OCTOBER 31, 2006
Financial Highlights (As Restated for 2005, 2004, 2003 and 2002. See Note 6)
BlackRock MuniYield Pennsylvania Insured Fund
The following per share data and ratios have been derived For the Year Ended October 31,
from information provided in the financial statements. 2006 2005 2004 2003 2002
Per Share Operating Performance
Net asset value, beginning of year $ 15.57 $ 16.04 $ 15.56 $ 15.34 $ 15.19
---------- ---------- ---------- ---------- ----------
Investment income--net 1.01** 1.05** 1.08** 1.11** 1.11
Realized and unrealized gain (loss)--net .36 (.35) .48 .16 .13
Dividends to Preferred Shareholders from investment
income--net (.27) (.19) (.08) (.07) (.11)
---------- ---------- ---------- ---------- ----------
Total from investment operations 1.10 .51 1.48 1.20 1.13
---------- ---------- ---------- ---------- ----------
Less dividends to Common Shareholders from investment
income--net (.78) (.96) (1.00) (.98) (.98)
---------- ---------- ---------- ---------- ----------
Offering and underwriting costs, including adjustments,
resulting from the issuance of Preferred Shares --++++ (.02) -- -- --
---------- ---------- ---------- ---------- ----------
Net asset value, end of year $ 15.89 $ 15.57 $ 16.04 $ 15.56 $ 15.34
========== ========== ========== ========== ==========
Market price per share, end of year $ 14.60 $ 14.91 $ 15.61 $ 14.81 $ 14.37
========== ========== ========== ========== ==========
Total Investment Return*
Based on net asset value per share 7.52% 3.16% 10.15% 8.33% 7.84%
========== ========== ========== ========== ==========
Based on market price per share 3.16% 1.51% 12.63% 10.07% 2.57%
========== ========== ========== ========== ==========
Ratios Based on Average Net Assets Applicable to Common Shares
Total expenses, net of reimbursement and excluding
interest expense*** 1.13% 1.13% 1.05% 1.07% 1.12%
========== ========== ========== ========== ==========
Total expenses, net of reimbursement*** 1.69% 1.69% 1.32% 1.29% 1.35%
========== ========== ========== ========== ==========
Total expenses*** 1.70% 1.70% 1.33% 1.30% 1.35%
========== ========== ========== ========== ==========
Total investment income--net*** 6.49% 6.56% 6.89% 7.08% 7.30%
========== ========== ========== ========== ==========
Amount of dividends to Preferred Shareholders 1.76% 1.17% .51% .47% .70%
========== ========== ========== ========== ==========
Investment income to Common Shareholders--net 4.73% 5.39% 6.38% 6.61% 6.60%
========== ========== ========== ========== ==========
Ratios Based on Average Net Assets Applicable to Preferred Shares
Dividends to Preferred Shareholders 3.09% 2.12% 1.04% .95% 1.37%
========== ========== ========== ========== ==========
Supplemental Data
Net assets applicable to Common Shares,
end of year (in thousands) $ 182,402 $ 178,771 $ 183,877 $ 178,337 $ 175,720
========== ========== ========== ========== ==========
Preferred Shares outstanding at liquidation
preference, end of year (in thousands) $ 102,000 $ 102,000 $ 88,000 $ 88,000 $ 88,000
========== ========== ========== ========== ==========
Portfolio turnover 25% 42% 41% 41% 37%
========== ========== ========== ========== ==========
Leverage
Asset coverage per $1,000 $ 2,788 $ 2,753 $ 3,090 $ 3,027 $ 2,997
========== ========== ========== ========== ==========
Dividends Per Share on Preferred Shares Outstanding
Series A--Investment income--net $ 773 $ 531 $ 254 $ 242 $ 338
========== ========== ========== ========== ==========
Series B--Investment income--net $ 773 $ 530 $ 261 $ 235 $ 346
========== ========== ========== ========== ==========
Series C++--Investment income--net $ 775 $ 501 -- -- --
========== ========== ========== ========== ==========
* 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.
** Based on average shares outstanding.
*** Do not reflect the effect of dividends to Preferred Shareholders.
++ Series C was issued on November 22, 2004.
++++ Amount is less than $(.01) per share.
See Notes to Financial Statements.
ANNUAL REPORTS OCTOBER 31, 2006
Notes to Financial Statements
1. Significant Accounting Policies:
On September 29, 2006, MuniYield Florida Insured Fund, MuniYield Michigan
Insured Fund, Inc., MuniYield New Jersey Insured Fund, Inc. and MuniYield
Pennsylvania Insured Fund were renamed BlackRock MuniYield Florida Insured
Fund, BlackRock MuniYield Michigan Insured Fund, Inc., BlackRock MuniYield New
Jersey Insured Fund, Inc. and BlackRock MuniYield Pennsylvania Insured Fund
(the "Funds" or individually, the "Fund"), respectively. The Funds are
registered under the Investment Company Act of 1940, as amended, as non-
diversified, closed-end management investment companies. The Funds' financial
statements are prepared in conformity with U.S. generally accepted accounting
principles, which may require the use of management accruals and estimates.
Actual results may differ from these estimates. The Funds determine and make
available for publication the net asset value of their Common Stock/Shares on
a daily basis. The Fund's Common Stock/Shares are listed on the New York Stock
Exchange under the symbol MFT for BlackRock MuniYield Florida Insured Fund,
MIY for BlackRock MuniYield Michigan Insured Fund, Inc., MJI for BlackRock
MuniYield New Jersey Insured Fund, Inc. and MPA for BlackRock MuniYield
Pennsylvania Insured Fund. The following is a summary of significant
accounting policies followed by the Funds.
(a) Valuation of investments--Municipal bonds are traded primarily in the over-
the-counter ("OTC") markets and are valued at the last available bid price in
the OTC markets or on the basis of values as obtained by a pricing service.
Pricing services use valuation matrixes that incorporate both dealer-supplied
valuations and valuation models. The procedures of the pricing service and its
valuations are reviewed by the officers of the Funds under the general
direction of each Fund's Board of Directors/Trustees. Such valuations and
procedures are reviewed periodically by each Fund's Board of Directors/
Trustees. 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. Options traded in the OTC market are
valued at 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 Funds' pricing service. Short-term investments with a remaining
maturity of 60 days or less are valued at amortized cost, which approximates
market value, under which method the investment is valued at cost and any
premium or discount is amortized on a straight line basis to maturity.
Investments in open-end investment companies are valued at their net asset
value each business day. Securities and other 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 each Fund's Board of
Directors/Trustees.
(b) Derivative financial instruments--Each 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--Each Fund may purchase or sell financial
futures contracts and options on such financial futures contracts. Financial
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--Each Fund may purchase and write call and 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).
ANNUAL REPORTS OCTOBER 31, 2006
Notes to Financial Statements (continued)
Written and purchased options are non-income producing investments.
* Forward interest rate swaps--Each 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.
* Swaps--Each Fund may enter into swap agreements, which are OTC contracts in
which the Fund and a counterparty agree to make periodic net payments on a
specified notional amount. The net payments can be made for a set period of
time or may be triggered by a predetermined credit event. The net periodic
payments may be based on a fixed or variable interest rate; the change in
market value of a specified security, basket of securities, or index; or the
return generated by a security. These periodic payments received or made by
the Fund are recorded in the accompanying Statement of Operations as realized
gains or losses, respectively. Gains or losses are also realized upon
termination of the swap agreements. Swaps are marked-to-market daily and
changes in value are recorded as unrealized appreciation (depreciation). Risks
include changes in the returns of the underlying instruments, failure of the
counterparties to perform under the contracts' terms and the possible lack of
liquidity with respect to the swap agreements.
(c) Municipal bonds held in trust--Certain Funds invest in leveraged residual
certificates ("TOB Residuals") issued by tender option bond trusts ("TOBs"). A
TOB is established by a third party sponsor forming a special purpose entity,
into which a Fund, or an agent on behalf of the Fund, transfers municipal
securities. A TOB typically issues two classes of beneficial interests: short-
term floating rate certificates, which are sold to third party investors, and
residual certificates, which are generally issued to the Fund which made the
transfer or to affiliates of the Fund. Each Fund's transfers of the municipal
securities to a TOB do not qualify for sale treatment under Statement of
Financial Accounting Standards No. 140 "Accounting for Transfers and Servicing
of Financial Assets and Extinguishments of Liabilities," therefore the
municipal securities deposited into a TOB are presented in the Funds'
schedules of investments and the proceeds from the transactions are reported
as a liability for trust certificates. Similarly, proceeds from residual
certificates issued to affiliates, if any, from the transaction are included
in the liability for trust certificates. Interest income from the underlying
security is recorded by the Funds on an accrual basis. Interest expense
incurred on the secured borrowing and other expenses related to remarketing,
administration and trustee services to a TOB are reported as expenses of a
Fund. The floating rate certificates have interest rates that generally reset
weekly and their holders have the option to tender certificates to the TOB for
redemption at par at each reset date. The residual interests held by the Funds
include the right of the Funds (1) to cause the holders of a proportional
share of floating rate certificates to tender their certificates at par, and
(2) to transfer a corresponding share of the municipal securities from the TOB
to the Funds. At October 31, 2006, the aggregate value of the underlying
municipal securities transferred to TOBs and the liability for trust
certificates were:
Underlying
Municipal
Liability for Range of Bonds
Trust Interest Transferred
Certificates Rates to TOBs
BlackRock MuniYield
Florida Insured
Fund $10,030,000 3.60% $21,748,171
Blackrock MuniYield
Michigan Insured 3.60% -
Fund, Inc. $37,987,818 3.63% $80,516,756
BlackRock MuniYield
New Jersey Insured 3.55% -
Fund, Inc. $12,338,455 5.25% $24,913,323
BlackRock MuniYield
Pennsylvania 3.60% -
Insured Fund $27,400,000 3.63% $59,558,680
Financial transactions executed through TOBs generally will under perform the
market for fixed rate municipal bonds in a rising interest rate environment,
but tend to outperform the market for fixed rate municipal bonds when interest
rates decline or remain relatively stable. Should short-term interest rates
rise, the Funds' investment in TOB Residuals likely will adversely affect the
Funds' investment income-net and distributions to shareholders. Fluctuations
in the market value of municipal securities deposited into the TOB may
adversely affect the Funds' net asset values per share.
ANNUAL REPORTS OCTOBER 31, 2006
Notes to Financial Statements (continued)
While the Funds' investment policies and restrictions expressly permit
investments in inverse floating rate securities such as TOB Residuals, they
generally do not allow the Funds to borrow money for purposes of making
investments. The Funds' management believes that the Funds' restrictions on
borrowings do not apply to the secured borrowings deemed to have occurred for
accounting purposes.
(d) Income taxes--It is each 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.
(e) Security transactions and investment income--Security transactions are
recorded on the dates the trans-actions 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 Funds amortize all
premiums and discounts on debt securities.
(f) Dividends and distributions--Dividends from net investment income are
declared and paid monthly. Distributions of capital gains are recorded on the
ex-dividend dates.
(g) Offering expenses--Direct expenses relating to the public offering of
certain Fund's Preferred Stock/Shares were charged to Common Shares/Stock
capital. Any adjustments to estimates of offering costs were recorded to
capital.
(h) Recent accounting pronouncements--In July 2006, the Financial Accounting
Standards Board ("FASB") issued Interpretation No. 48 ("FIN 48"), "Accounting
for Uncertainty in Income Taxes - an interpretation of FASB Statement No.
109." FIN 48 prescribes the minimum recognition threshold a tax position must
meet in connection with accounting for uncertainties in income tax positions
taken or expected to be taken by an entity including mutual funds before being
measured and recognized in the financial statements. Adoption of FIN 48 is
required for fiscal years beginning after December 15, 2006. The impact on the
Funds' financial statements, if any, is currently being assessed.
In addition, in September 2006, Statement of Financial Accounting Standards
No. 157, "Fair Value Measurements" ("FAS 157"), was issued and is effective
for fiscal years beginning after November 15, 2007. FAS 157 defines fair
value, establishes a framework for measuring fair value and expands
disclosures about fair value measurements. Management is currently evaluating
the implications of FAS 157. At this time its impact on the Funds' financial
statements has not been determined.
(i) Reclassifications--U.S. generally accepted accounting principles require
that certain components of net assets be adjusted to reflect permanent
differences between financial and tax reporting. Accordingly, the current
year's permanent book/tax differences have been reclassified as follows:
BlackRock MuniYield Michigan Insured Fund, Inc.
$115 has been reclassified between accumulated net realized capital losses on
investments and undistributed net investment income as a result of permanent
differences attributable to the amortization methods for premiums and
discounts on fixed income securities. This reclassification has no effect on
net assets or net asset values per share.
BlackRock MuniYield New Jersey Insured Fund, Inc.
$53,486, has been reclassified between undistributed net investment income and
accumulated net realized capital losses as a result of permanent differences
attributable to amortization methods on fixed income securities. This
reclassification has no effect on net asset values per share.
2. Investment Advisory Agreement and Transactions with Affiliates:
On September 29, 2006, BlackRock, Inc. and Merrill Lynch & Co., Inc. ("Merrill
Lynch") combined Merrill Lynch's investment management business, Merrill Lynch
Investment Managers, L.P. ("MLIM") and its affiliates, including Fund Asset
Management, L.P. ("FAM") with BlackRock, Inc. to create a new independent
company. Merrill Lynch has a 49.8% economic interest and a 45% voting interest
in the combined company and The PNC Financial Services Group, Inc. has
approximately a 34% economic and voting interest. The new company operates
under the BlackRock name and is governed by a board of directors with a
majority of independent members.
ANNUAL REPORTS OCTOBER 31, 2006
Notes to Financial Statements (continued)
Each of the Funds approved a new Investment Advisory Agreement with BlackRock
Advisors, Inc. (the "Manager"), an indirect, wholly owned subsidiary of
BlackRock, Inc. on the following dates:
Shareholder
Approval Date
BlackRock MuniYield Florida Insured Fund 7/31/2006
BlackRock MuniYield Michigan Insured Fund, Inc. 8/15/2006
BlackRock MuniYield New Jersey Insured Fund, Inc. 8/15/2006
BlackRock MuniYield Pennsylvania Insured Fund 7/31/2006
BlackRock Advisors, Inc. was recently reorganized into a limited liability
company and renamed BlackRock Advisors, LLC. The new Investment Advisory
Agreement between each Fund and the Manager became effective on September 29,
2006. Prior to September 29, 2006, FAM was the Investment Adviser. The general
partner of FAM is Princeton Services, Inc. ("PSI"), an indirect, wholly owned
subsidiary of Merrill Lynch, which is the limited partner.
The Manager is responsible for the management of each Fund's portfolio and
provides the necessary personnel, facilities, equipment and certain other
services necessary to the operations of the Fund. For such services, each Fund
pays a monthly fee at an annual rate of .50% of the Fund's average daily net
assets, including proceeds from the issuance of Preferred Stock/Shares. The
Manager (and formerly FAM) has agreed to reimburse its management fee by the
amount of management fees each Fund pays to the Manager and/or FAM indirectly
through its investment(s) described below:
For the Period
Nov. 1, 2005 to
Sept. 29, 2006
Reimbursement
Investment(s) by FAM
BlackRock MuniYield Merrill Lynch
Florida Insured Fund Institutional Tax-Exempt
Fund and
CMA Florida
Municipal Money Fund $ 9,418
BlackRock MuniYield CMA Michigan
Michigan Insured Municipal Money
Fund, Inc. Fund $26,652
BlackRock MuniYield CMA New Jersey
New Jersey Insured Municipal Money
Fund, Inc. Fund $ 7,033
BlackRock MuniYield CMA Pennsylvania
Pennsylvania Insured Municipal Money
Fund Fund $ 8,753
For the Period
Sept. 30, 2006 to
Oct. 31, 2006
Reimbursement
Investment(s) by the Manager
BlackRock MuniYield Merrill Lynch
Florida Insured Fund Institutional Tax-Exempt
Fund and
CMA Florida
Municipal Money Fund $ 2,437
BlackRock MuniYield CMA Michigan
Michigan Insured Municipal Money
Fund, Inc. Fund $ 1,560
BlackRock MuniYield CMA New Jersey
New Jersey Insured Municipal Money
Fund, Inc. Fund $ 356
BlackRock MuniYield CMA Pennsylvania
Pennsylvania Insured Municipal Money
Fund Fund $ 602
In addition, the Manager has entered into a sub-advisory agreement with
BlackRock Investment Management, LLC, an affiliate of the Manager, under which
the Manager pays the Sub-Adviser for services it provides a fee equal to 59%
of the management fee paid to the Manager.
Each of the Funds reimbursed the Manager and/or FAM for certain accounting
services. The reimbursements were as follows:
For the Period For the Period
Nov. 1, 2005 to Sept. 30, 2006
Sept. 29, 2006 to Oct. 31, 2006
Reimbursement Reimbursement
to FAM to the Manager
BlackRock MuniYield
Florida Insured Fund $4,000 $319
BlackRock MuniYield
Michigan Insured Fund, Inc. $9,012 $718
BlackRock MuniYield
New Jersey Insured Fund, Inc. $4,376 $335
BlackRock MuniYield
Pennsylvania Insured Fund $5,720 $456
Prior to the closing, certain officers and/or trustees of each Fund
were officers and/or directors of MLIM, FAM, PSI, and/or Merrill
Lynch.
Commencing September 29, 2006, certain officers and/or trustees of
each Fund are officers and/or directors of BlackRock, Inc. or its
affiliates.
ANNUAL REPORTS OCTOBER 31, 2006
Notes to Financial Statements (continued)
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the year ended October 31, 2006 were as follows:
Total Total
Purchases Sales
BlackRock MuniYield Florida
Insured Fund $ 69,197,923 $ 70,757,143
BlackRock MuniYield Michigan
Insured Fund, Inc. $ 72,365,066 $ 75,687,037
BlackRock MuniYield New
Jersey Insured Fund, Inc. $ 23,896,981 $ 35,156,600
BlackRock MuniYield
Pennsylvania Insured Fund $ 78,503,033 $ 76,129,870
4. Stock/Share Transactions:
BlackRock MuniYield Florida Insured Fund and BlackRock MuniYield Pennsylvania
Insured Fund are authorized to issue an unlimited number of Common Shares of
beneficial interest, par value $.10 per share together with 1,000,000
Preferred Shares of beneficial interest, par value of $.05 per share. Each
Fund's Board of Trustees is authorized, however, to reclassify any unissued
shares of beneficial interest without approval of the holders of Common
Shares.
BlackRock MuniYield Michigan Insured Fund, Inc. and BlackRock MuniYield New
Jersey Insured Fund, Inc. are authorized to issue 200,000,000 shares of stock,
including Preferred Stock, par value $.10 per share or $.05 per share, all of
which were initially classified as Common Stock. Each Fund's Board of
Directors is authorized, however, to classify any unissued shares of stock
without approval of holders of Common Stock.
Common Stock/Shares
BlackRock MuniYield Florida Insured Fund
Shares issued and outstanding during the years ended October 31, 2006 and
October 31, 2005 increased by 1,851 and 9,507, respectively, as a result of
dividend reinvestments.
BlackRock MuniYield Michigan Insured Fund, Inc.
Shares issued and outstanding during the years ended October 31, 2006 and
October 31, 2005 increased by 40,195 and 10,174, respectively, as a result of
dividend reinvestments.
BlackRock MuniYield New Jersey Insured Fund, Inc.
Shares issued and outstanding during the year ended October 31, 2006 remained
constant. Shares issued and outstanding during the year ended October 31, 2005
increased by 43,611 as a result of dividend reinvestments.
BlackRock MuniYield Pennsylvania Insured Fund
Shares issued and outstanding during the year ended October 31, 2006 remained
constant. Shares issued and outstanding during the year ended October 31, 2005
increased by 16,822 as a result of dividend reinvestments.
Preferred Stock/Shares
Auction Market Preferred Stock/Shares are redeemable Preferred Stock/Shares of
the respective Funds, with 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.
BlackRock MuniYield Florida Insured Fund and BlackRock MuniYield Pennsylvania
Insured Fund have a par value of $.05 per share. BlackRock MuniYield Michigan
Insured Fund, Inc. has a par value of $.05 per share on Series A Shares,
Series B Shares and Series C Shares, and $.10 per share on Series D Shares.
BlackRock MuniYield New Jersey Insured Fund, Inc. has a par value of $.05 per
share for Series A Shares and $.10 per share for Series B Shares. The yields
in effect at October 31, 2006 were as follows:
BlackRock BlackRock
MuniYield MuniYield
Florida Michigan
Insured Insured
Fund Fund, Inc.
Series A 3.50% 3.45%
Series B 3.183% 2.80%
Series C -- 2.70%
Series D -- 3.50%
BlackRock BlackRock
MuniYield MuniYield
New Jersey Pennsylvania
Insured Insured
Fund, Inc. Fund
Series A 3.15% 3.50%
Series B 3.20% 3.45%
Series C -- 3.50%
BlackRock MuniYield Florida Insured Fund
Shares issued and outstanding during the year ended October 31, 2006 remained
constant. Shares issued and outstanding during the year ended October 31, 2005
increased by 480 shares from the issuance of an additional series of Preferred
Shares.
ANNUAL REPORTS OCTOBER 31, 2006
Notes to Financial Statements (continued)
BlackRock MuniYield Michigan Insured Fund, Inc.
Shares issued and outstanding during the year ended October 31, 2006 remained
constant. Shares issued and outstanding during the year ended October 31, 2005
increased by 1,000 from the issuance of an additional series of Preferred
Stock.
BlackRock MuniYield New Jersey Insured Fund, Inc.
Shares issued and outstanding during the years ended October 31, 2006 and
October 31, 2005 remained constant.
BlackRock MuniYield Pennsylvania Insured Fund
Shares issued and outstanding during the year ended October 31, 2006 remained
constant. Shares issued and outstanding during the year ended October 31, 2005
increased by 560 shares from the issuance of an additional series of Preferred
Shares.
Each 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 year ended October 31, 2006, Merrill Lynch,
Pierce, Fenner & Smith Incorporated earned commissions as follows:
Commissions
BlackRock MuniYield Florida Insured Fund $ 104,224
BlackRock MuniYield Michigan Insured Fund, Inc. $ 196,562
BlackRock MuniYield New Jersey Insured Fund, Inc. $ 111,986
BlackRock MuniYield Pennsylvania Insured Fund $ 154,812
5. Distribution to Shareholders:
Each Fund paid a tax-exempt income dividend to holders of Common Stock/Shares
on November 29, 2006 to stock/shareholders of record on November 14, 2006.
The amount of the tax-exempt income dividend was as follows:
Per Share Amount
BlackRock MuniYield Florida Insured Fund $.061000
BlackRock MuniYield Michigan Insured Fund, Inc. $.063000
BlackRock MuniYield New Jersey Insured Fund, Inc. $.059000
BlackRock MuniYield Pennsylvania Insured Fund $.061000
BlackRock MuniYield Florida Insured Fund
The tax character of distributions paid during the fiscal years ended
October 31, 2006 and October 31, 2005 was as follows:
10/31/2006 10/31/2005
Distributions paid from:
Tax-exempt income $ 8,662,428 $ 9,007,901
-------------- --------------
Total distributions $ 8,662,428 $ 9,007,901
============== ==============
As of October 31, 2006, the components of accumulated earnings on a
tax basis were as follows:
Undistributed tax-exempt income--net $ 538,765
Undistributed long-term capital gains--net --
--------------
Total undistributed earnings--net 538,765
Capital loss carryforward (2,897,649)*
Unrealized gains--net 9,979,073**
--------------
Total accumulated earnings--net $ 7,620,189
==============
* On October 31, 2006, the Fund had a net capital loss carryforward
of $2,897,649, of which $815,924 expires in 2008 and $2,081,725
expires in 2012. This amount will be available to offset like amounts
of any future taxable gains.
** The difference between book-basis and tax-basis net unrealized
gains is attributable primarily to the tax deferral of losses on wash
sales, the tax deferral of losses on straddles, the difference between
book and tax amortization methods for premiums and discounts on
fixed income securities and the difference between book and tax
treatment of residual interests in tender option bond trusts.
BlackRock MuniYield Michigan Insured Fund, Inc.
The tax character of distributions paid during the fiscal years ended
October 31, 2006 and October 31, 2005 was as follows:
10/31/2006 10/31/2005
Distributions paid from:
Tax-exempt income $ 20,420,247 $ 21,003,220
-------------- --------------
Total distributions $ 20,420,247 $ 21,003,220
============== ==============
As of October 31, 2006, the components of accumulated earnings on a
tax basis were as follows:
Undistributed tax-exempt income--net $ 1,201,387
Undistributed long-term capital gains--net --
--------------
Total undistributed earnings--net 1,201,387
Capital loss carryforward (13,286,531)*
Unrealized gains--net 22,826,796**
--------------
Total accumulated earnings--net $ 10,741,652
==============
* On October 31, 2006, the Fund had a net capital loss carryforward
of $13,286,531, of which $374,297 expires in 2007, $7,574,733
expires in 2008, $10,914 expires in 2009, $1,124,652 expires in
2010 and $4,201,935 expires in 2012. This amount will be available
to offset like amounts of any future taxable gains.
** The difference between book-basis and tax-basis net unrealized
gains is attributable primarily to the tax deferral of losses on wash
sales, the tax deferral of losses on straddles, the difference between
book and tax amortization methods for premiums, discounts on fixed
income securities and the difference between book and tax treatment
of residual interests in tender option bond trusts.
ANNUAL REPORTS OCTOBER 31, 2006
Notes to Financial Statements (continued)
BlackRock MuniYield New Jersey Insured Fund, Inc.
The tax character of distributions paid during the fiscal years ended
October 31, 2006 and October 31, 2005 was as follows:
10/31/2006 10/31/2005
Distributions paid from:
Tax-exempt income $ 8,554,371 $ 9,432,665
-------------- --------------
Total distributions $ 8,554,371 $ 9,432,665
============== ==============
As of October 31, 2006, the components of accumulated earnings on a
tax basis were as follows:
Undistributed tax-exempt income--net $ 847,100
Undistributed ordinary income--net 53,486
Undistributed long-term capital gains--net --
--------------
Total undistributed earnings--net 900,586
Capital loss carryforward (77,635)*
Unrealized gains--net 10,806,863**
--------------
Total accumulated earnings--net $ 11,629,814
==============
* On October 31, 2006, the Fund had a net capital loss carryforward
of $77,635, all of which expires in 2012. This amount will be available
to offset like amounts of any future taxable gains.
** The difference between book-basis and tax-basis net unrealized
gains is attributable primarily to the tax deferral of losses on
straddles, the difference between book tax amortization
methods for premiums and discounts on fixed income securities
and the difference between book and tax treatment of residual
interests in tender option bond trusts.
BlackRock MuniYield Pennsylvania Insured Fund
The tax character of distributions paid during the fiscal years ended
October 31, 2006 and October 31, 2005 was as follows:
10/31/2006 10/31/2005
Distributions paid from:
Tax-exempt income $ 12,133,186 $ 13,113,887
-------------- --------------
Total distributions $ 12,133,186 $ 13,113,887
============== ==============
As of October 31, 2006, the components of accumulated earnings on a
tax basis were as follows:
Undistributed tax-exempt income--net $ 575,134
Undistributed long-term capital gains--net --
--------------
Total undistributed earnings--net 575,134
Capital loss carryforward (3,450,773)*
Unrealized gains--net 14,195,720**
--------------
Total accumulated earnings--net $ 11,320,081
==============
* On October 31, 2006, the Fund had a net capital loss carryforward
of $3,450,773, all of which expires in 2008. This amount will be
available to offset like amounts of any future taxable gains.
** The difference between book-basis and tax-basis net unrealized
gains is attributable primarily to the tax deferral of losses on wash
sales, tax deferral of losses on straddles, the difference between
book and tax amortization methods for premiums and discounts on
fixed income securities and the difference between book and tax
treatment of residual interests in tender option bond trusts.
6. Restatement Information:
During the year ended October 31, 2006, each of the Funds determined that the
criteria for sale accounting in Statement of Financial Accounting Standards
No. 140 had not been met for certain transfers of municipal bonds and that
these transfers should have been accounted for as secured borrowings rather
than as sales. Accordingly, BlackRock MuniYield Florida Insured Fund,
BlackRock MuniYield New Jersey Insured Fund, Inc., and BlackRock MuniYield
Pennsylvania Insured Fund each has restated its statement of changes in net
assets for the year ended October 31, 2005 to give effect to offsetting
changes in realized gain--net and in the change in unrealized appreciation/
depreciation--net on the transferred municipal securities. Additionally,
each of the Funds, including BlackRock MuniYield Michigan Insured Fund, Inc.,
has restated its financial highlights for the years ended October 31, 2005,
2004, 2003 and 2002 to give effect to recording the transfers of the municipal
bonds as secured borrowings, including recording interest on the bonds as
interest income and interest on the secured borrowings as interest expense.
Statements of Changes in Net Assets
For the Year Ended October 31, 2005
BlackRock MuniYield BlackRock MuniYield
BlackRock MuniYield New Jersey Insured Pennsylvania Insured
Florida Insured Fund Fund, Inc. Fund
Previously Previously Previously
Reported Restated Reported Restated Reported Restated
Realized gain--net $ 1,562,411 $ 1,559,111 $ 2,729,125 $ 2,961,559 $ 4,069,175 $ 4,805,185
Change in unrealized appreciation/
depreciation--net $ (4,777,919) $ (4,774,619) $ (5,148,576) $ (5,381,010) $ (8,120,716) $ (8,856,726)
ANNUAL REPORTS OCTOBER 31, 2006
Notes to Financial Statements (continued)
Financial Highlights for BlackRock MuniYield Florida Insured Fund
For the Years Ended October 31, 2005, 2004, 2003 and 2002
2005 2004 2003 2002
Previously Previously Previously Previously
Reported Restated Reported Restated Reported Restated Reported Restated
Total expenses, net of
reimbursement*** 1.20% 1.38% 1.09% 1.27% 1.08% 1.25% 1.11% 1.33%
Total expenses*** 1.20% 1.38% 1.10% 1.28% 1.08% 1.25% 1.11% 1.33%
Portfolio turnover 51.33% 52% 31.22% 28% 47.21% 40% 40.55% 37%
*** Do not reflect the effect of dividends to Preferred Shareholders.
Financial Highlights for BlackRock MuniYield Michigan Insured Fund, Inc.
For the Years Ended October 31, 2005, 2004, 2003 and 2002
2005 2004 2003 2002
Previously Previously Previously Previously
Reported Restated Reported Restated Reported Restated Reported Restated
Total expenses, net of
reimbursement*** 1.10% 1.42% 1.00% 1.19% 1.01% 1.20% 1.04% 1.28%
Total expenses*** 1.10% 1.42% 1.02% 1.22% 1.03% 1.21% 1.04% 1.28%
Portfolio turnover 30.16% 25% 36.63% 32% 33.39% 29% 32.68% 25%
*** Do not reflect the effect of dividends to Preferred Stock shareholders.
Financial Highlights for BlackRock MuniYield New Jersey Insured Fund, Inc.
For the Years Ended October 31, 2005, 2004, 2003 and 2002
2005 2004 2003 2002
Previously Previously Previously Previously
Reported Restated Reported Restated Reported Restated Reported Restated
Total expenses, net of
reimbursement*** 1.16% 1.52% 1.06% 1.33% 1.03% 1.29% 1.07% 1.39%
Total expenses*** 1.16% 1.52% 1.07% 1.35% 1.04% 1.30% 1.07% 1.39%
Portfolio turnover 37.31% 29% 18.25% 16% 24.70% 21% 28.45% 25%
*** Do not reflect the effect of dividends to Preferred Stock shareholders.
Financial Highlights for BlackRock MuniYield Pennsylvania Insured Fund
For the Years Ended October 31, 2005, 2004, 2003 and 2002
2005 2004 2003 2002
Previously Previously Previously Previously
Reported Restated Reported Restated Reported Restated Reported Restated
Total expenses, net of
reimbursement*** 1.13% 1.69% 1.05% 1.32% 1.07% 1.29% 1.12% 1.35%
Total expenses*** 1.14% 1.70% 1.07% 1.33% 1.08% 1.30% 1.12% 1.35%
Portfolio turnover 46.42% 42% 50.00% 41% 55.57% 41% 51.37% 37%
*** Do not reflect the effect of dividends to Preferred Shareholders.
ANNUAL REPORTS OCTOBER 31, 2006
Notes to Financial Statements (concluded)
While the Statements of Net Assets for each of the Funds as of October 31,
2005, 2004, 2003 and 2002, not presented herein, have not been reissued to give
effect to the restatement, the principal effects of the restatement would be to
increase investments and liability for trust certificates by corresponding
amounts at each year, with no effect on previously reported net assets.
The Statements of Operations for each of the Funds for the years ended October
31, 2005, 2004, 2003 and 2002, not presented herein, have not been reissued to
give effect to the restatement. However, the principal effects of the
restatement would be to increase interest income and interest expense and fees
by corresponding amounts each year, and, where applicable, to revise realized
gain (loss) on investments--net, and the change in unrealized appreciation/
depreciation on investments--net, by corresponding and offsetting amounts.
The Statements of Changes in Net Assets for each of the Funds for the years
ended October 31, 2004, 2003 and 2002, not presented herein, have not been
reissued to give effect to the restatement, but the principal effects of a
restatement, where applicable, would be to revise previously reported realized
gain (loss)--net, and change in unrealized appreciation/depreciation--net, by
corresponding and offsetting amounts.
ANNUAL REPORTS OCTOBER 31, 2006
Report of Independent Registered Public Accounting Firm
To the Shareholders and Boards of Directors/Trustees of BlackRock MuniYield
Florida Insured Fund, BlackRock MuniYield Michigan Insured Fund, Inc.,
BlackRock MuniYield New Jersey Insured Fund, Inc. and BlackRock MuniYield
Pennsylvania Insured Fund:
We have audited each of the accompanying statements of net assets, including
the schedules of investments, of BlackRock MuniYield Florida Insured Fund
(formerly MuniYield Florida Insured Fund), BlackRock MuniYield New Jersey
Insured Fund, Inc. (formerly MuniYield New Jersey Insured Fund, Inc.), and
BlackRock MuniYield Pennsylvania Insured Fund (formerly MuniYield Pennsylvania
Insured Fund), as of October 31, 2006, and the related statements of
operations for the year then ended, the statements of changes in net assets
for each of the two years in the period then ended, and the financial
highlights for each of the five years in the period then ended for each of the
respective funds. We have also audited the accompanying statement of net
assets, including the schedule of investments, of BlackRock MuniYield Michigan
Insured Fund, Inc. (formerly MuniYield Michigan Insured Fund, Inc.) as of
October 31, 2006, and the related statements of operations, changes in net
assets and the financial highlights for the year then ended. The above-
referenced funds are hereinafter referred to collectively as the "Funds."
These financial statements and financial highlights are the responsibility of
the Funds' management. Our responsibility is to express an opinion on the
financial statements and financial highlights of each of the funds based on
our audits. The statement of changes in net assets of BlackRock MuniYield
Michigan Insured Fund, Inc. for the year ended October 31, 2005, and its
financial highlights (before the restatement described in Note 6) for each of
the four years in the period ended October 31, 2005, were audited by other
auditors whose report, dated December 9, 2005, expressed an unqualified
opinion on that financial statement and a qualified opinion on the financial
highlights because of the errors described in Note 6.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material
misstatement. The Funds are not required to have, nor were we engaged to
perform, audits of their internal control over financial reporting. Our audits
included consideration of internal control over financial reporting as a basis
for designing audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the
Funds' internal control over financial reporting. Accordingly, we express no
such opinion. An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. Our procedures
included confirmation of securities owned as of October 31, 2006 by
correspondence with the custodian and brokers; where replies were not received
from brokers, we performed other auditing procedures. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights of BlackRock
MuniYield Florida Insured Fund, BlackRock MuniYield New Jersey Insured Fund,
Inc. and BlackRock MuniYield Pennsylvania Insured Fund referred to above
present fairly, in all material respects, the respective financial positions
of each of those funds as of October 31, 2006, the results of their operations
for the year then ended, the changes in their net assets for each of the two
years in the period then ended and their financial highlights for each of the
five years in the period then ended, in conformity with accounting principles
generally accepted in the United States of America. Additionally, in our
opinion, the financial statements and financial highlights of BlackRock
MuniYield Michigan Insured Fund, Inc. as of and for the year ended October 31,
2006, present fairly, in all material respects, its financial position as of
October 31, 2006, and the results of its operations, changes in its net assets
and its financial highlights for the year then ended, in conformity with
accounting principles generally accepted in the United States of America.
As discussed in Note 6, the statements of changes in net assets of BlackRock
MuniYield Florida Insured Fund, BlackRock MuniYield New Jersey Insured Fund,
Inc., and BlackRock MuniYield Pennsylvania Insured Fund for the year ended
October 31, 2005, and their respective financial highlights for each of the
four years in the period then ended, have been restated.
ANNUAL REPORTS OCTOBER 31, 2006
Report of Independent Registered Public Accounting Firm (concluded)
We also have audited the adjustments, applied by management, to restate
certain financial highlights of BlackRock MuniYield Michigan Insured Fund,
Inc. (the "Michigan Insured Fund") for each of the four years in the period
ended October 31, 2005, to correct the errors described in Note 6. These
adjustments are the responsibility of the Michigan Insured Fund's management.
The audit procedures that we performed with respect to the adjustments
included such tests as we considered necessary in the circumstances and were
designed to obtain reasonable assurance about whether the adjustments are
appropriate and have been properly applied, in all material respects, to the
restated information in the financial highlights of the Michigan Insured Fund
for each of the four years in the period ended October 31, 2005. We did not
perform any audit procedures designed to assess whether any additional
adjustments or disclosures to Michigan Insured Fund's financial statements or
financial highlights as of October 31, 2005, and for each of the four years in
the period then ended, might be necessary in order for such financial
statements or financial highlights to be presented in conformity with
generally accepted accounting principles. In our opinion, the adjustments to
Michigan Insured Fund's financial highlights for the restatement described in
Note 6 are appropriate and have been properly applied, in all material
respects. However, we were not engaged to audit, review, or apply any
procedures to Michigan Insured Fund's financial statements or its financial
highlights as of October 31, 2005, and for each of the four years in the
period then ended, other than with respect to the adjustments to the financial
highlights of Michigan Insured Fund for the restatement described in Note 6
and, accordingly, we do not express an opinion or any other form of assurance
on Michigan Insured Fund's financial statements as of October 31, 2005, or on
its financial highlights for each of the four years in the period then ended.
Deloitte & Touche LLP
Princeton, New Jersey
January 16, 2007
Fund Certifications (unaudited)
In May 2006, BlackRock MuniYield Florida Insured Fund, BlackRock MuniYield
Michigan Insured Fund, Inc., BlackRock MuniYield New Jersey Insured Fund, Inc.
and Blackrock MuniYield Pennsylvania Insured Fund filed their Chief Executive
Officer Certification for the prior year with the New York Stock Exchange
pursuant to Section 303A.12(a) of the New York Stock Exchange Corporate
Governance Listing Standards.
The Funds' Chief Executive Officer and Chief Financial Officer Certifications
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 were filed with the
Funds' Form N-CSR and are available on the Securities and Exchange
Commission's Web site at http://www.sec.gov.
ANNUAL REPORTS OCTOBER 31, 2006
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors of
MuniYield Michigan Insured Fund, Inc.:
We have audited, before the effects of the adjustments for the correction of
the error described in Note 6, the accompanying statement of changes in net
assets of MuniYield Michigan Insured Fund, Inc., for the year ended October
31, 2005, and financial highlights for each of the four years in the period
then ended (the 2005 financial statement and financial highlights referred to
above before the effects of the adjustments discussed in Note 6 are not
presented herein). This financial statement and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on this financial statement and financial highlights based on our
audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material
misstatement. We were not engaged to perform an audit of the Fund's internal
control over financial reporting. Our audits included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose
of expressing an opinion on the effectiveness of the Fund's internal control
over financial reporting. Accordingly, we express no such opinion. An audit
also includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements and financial highlights, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statement and financial highlights referred to
above present fairly, in all material respects, the changes in net assets of
MuniYield Michigan Insured Fund, Inc. for the year ended October 31, 2005, and
the financial highlights, except for the error described in Note 6, for each
of the four years in the period then ended, in conformity with U.S. generally
accepted accounting principles.
We were not engaged to audit, review, or apply any procedures to the
adjustments for the correction of the error described in Note 6 and,
accordingly, we do not express an opinion or any other form of assurance about
whether such adjustments are appropriate and have been properly applied. Those
adjustments were audited by Deloitte & Touche LLP.
(Ernst & Young LLP)
Philadelphia, Pennsylvania
December 9, 2005
Important Tax Information (unaudited)
All of the net investment income distributions paid by BlackRock Muniyield
Florida Insured Fund, BlackRock MuniYield New Jersey Insured Fund, Inc.,
BlackRock Muniyield Michigan Insured Fund, Inc. and BlackRock MuniYield
Pennsylvania Insured Fund during the taxable year ended October 31, 2006
qualify as tax-exempt interest dividends for Federal income tax purposes.
ANNUAL REPORTS OCTOBER 31, 2006
Automatic Dividend Reinvestment Plan
How the Plan Works--The Funds offer a Dividend Reinvestment Plan (the "Plan")
under which income and capital gains dividends paid by each Fund are
automatically reinvested in additional shares of Common Stock of each Fund.
The Plan is administered on behalf of the shareholders by The Bank of New York
for BlackRock MuniYield Florida Insured Fund, BlackRock MuniYield Michigan
Insured Fund, Inc. and BlackRock MuniYield New Jersey Insured Fund, Inc. and
Computershare Trust Company, N.A. for BlackRock MuniYield Pennsylvania Insured
Fund (individually, the "Plan Agent" or together, the "Plan Agents"). Under
the Plan, whenever the Funds declare a dividend, participants in the Plan will
receive the equivalent in shares of Common Stock of each Fund. The Plan Agents
will acquire the shares for the participant's account either (i) through
receipt of additional unissued but authorized shares of each Fund ("newly
issued shares") or (ii) by purchase of outstanding shares of Common Stock on
the open market on the New York Stock Exchange or elsewhere. If, on the
dividend payment date, each Fund's net asset value per share is equal to or
less than the market price per share plus estimated brokerage commissions (a
condition often referred to as a "market premium"), the Plan Agents will
invest the dividend amount in newly issued shares. If the Funds' net asset
value per share is greater than the market price per share (a condition often
referred to as a "market discount"), the Plan Agents will invest the dividend
amount by purchasing on the open market additional shares. If the Plan Agents
are unable to invest the full dividend amount in open market purchases, or if
the market discount shifts to a market premium during the purchase period, the
Plan Agents will invest any uninvested portion in newly issued shares. The
shares acquired are credited to each shareholder's account. The amount
credited is determined by dividing the dollar amount of the dividend by either
(i) when the shares are newly issued, the net asset value per share on the
date the shares are issued or (ii) when shares are purchased in the open
market, the average purchase price per share.
Participation in the Plan--Participation in the Plan is automatic, that is, a
shareholder is automatically enrolled in the Plan when he or she purchases
shares of Common Stock of the Funds unless the shareholder specifically elects
not to participate in the Plan. Shareholders who elect not to participate will
receive all dividend distributions in cash. Shareholders who do not wish to
participate in the Plan must advise their Plan Agent in writing (at the
address set forth below) that they elect not to participate in the Plan.
Participation in the Plan is completely voluntary and may be terminated or
resumed at any time without penalty by writing to the Plan Agent.
Benefits of the Plan--The Plan provides an easy, convenient way for
shareholders to make additional, regular investments in the Funds. The Plan
promotes a long-term strategy of investing at a lower cost. All shares
acquired pursuant to the Plan receive voting rights. In addition, if the
market price plus commissions of each Fund's shares is above the net asset
value, participants in the Plan will receive shares of the Funds for less than
they could otherwise purchase them and with a cash value greater than the
value of any cash distribution they would have received. However, there may
not be enough shares available in the market to make distributions in shares
at prices below the net asset value. Also, since each Fund does not redeem
shares, the price on resale may be more or less than the net asset value.
Plan Fees--There are no enrollment fees or brokerage fees for participating in
the Plan. The Plan Agents' service fees for handling the reinvestment of
distributions are paid for by the Funds. However, brokerage commissions may be
incurred when the Funds purchase shares on the open market and shareholders
will pay a pro rata share of any such commissions.
Tax Implications--The automatic reinvestment of dividends and distributions
will not relieve participants of any federal, state or local income tax that
may be payable (or required to be withheld) on such dividends. Therefore,
income and capital gains may still be realized even though shareholders do not
receive cash. The value of shares acquired pursuant to the Plan will generally
be excluded from gross income to the extent that the cash amount reinvested
would be excluded from gross income. If, when the Funds' shares are trading at
a market premium, the Funds issue shares pursuant to the Plan that have a
greater fair market value than the amount of cash reinvested, it is possible
that all or a portion of the discount from the market value (which may not
exceed 5% of the fair market value of each Fund's shares) could be viewed as a
taxable distribution. If the discount is viewed as a taxable distribution, it
is also possible that the taxable character of this discount would be allocable
to all the shareholders, including shareholders who do not participate in the
Plan. Thus, shareholders who do not participate in the Plan might be required
to report as ordinary income a portion of their distributions equal to their
allocable share of the discount.
Contact Information--All correspondence concerning the Plan, including any
questions about the Plan, should be directed to the Plan Agent at The Bank of
New York, Church Street Station, P.O. Box 11258, New York, NY 10286-1258,
Telephone: 800-432-8224 for BlackRock MuniYield Florida Insured Fund,
BlackRock MuniYield Michigan Insured Fund, Inc. and BlackRock MuniYield New
Jersey Insured Fund, Inc. and Computershare Trust Company, N.A., P.O. Box
43010, Providence, RI 02940-3010, Telephone: 800-426-4523 for BlackRock
MuniYield Pennsylvania Insured Fund.
ANNUAL REPORTS OCTOBER 31, 2006
Disclosure of Investment Advisory Agreement
Disclosure of FAM Investment Advisory Agreements
The Board of Directors or the Board of Trustees, as pertinent, of each Fund
met in June 2006 to consider approval of the Fund's investment advisory
agreement with Fund Asset Management, L.P. ("FAM"), each Fund's investment
adviser at that time.
Activities and Composition of the Boards
All but one member of each Board is an independent director/trustee, whose
only affiliation with FAM or other Merrill Lynch affiliates was as a director/
trustee of each Fund and as a director or trustee of certain other funds
advised by FAM or its affiliates. The Chairman of each Board is an independent
director/trustee. New director/trustee nominees are chosen by a Nominating
Committee comprised entirely of independent directors/trustees. All independent
directors/trustees also are members of each Board's Audit Committee, and the
independent directors/trustees meet in executive session at each in-person
Board meeting. Each Board and each Board's Audit Committee meet in person for
at least two days each quarter and conduct other in-person and telephone
meetings throughout the year, some of which are formal Board meetings and some
of which are informational meetings. Independent counsel to the independent
directors/trustees attends all in-person Board and Audit Committee meetings and
other meetings at the independent directors'/trustees' request.
FAM Investment Advisory Agreements--Matters Considered by the Boards
Every year, each Fund's Board considers approval of the Fund's investment
advisory agreement. Each Board assesses the nature, scope and quality of the
services provided to the Fund by the personnel of the investment adviser and
its affiliates, including administrative services, shareholder services,
oversight of fund accounting, marketing services and assistance in meeting
legal and regulatory requirements. Each Board also receives and assesses
information regarding the services provided to the Fund by certain
unaffiliated service providers.
At various times throughout the year, each Board also considers a range of
information in connection with its oversight of the services provided by the
investment adviser and its affiliates. Among the matters considered are: (a)
fees (in addition to management fees) paid to the investment adviser and its
affiliates by the Fund; (b) Fund operating expenses paid to third parties; (c)
the resources devoted to and compliance reports relating to each Fund's
investment objective, policies and restrictions, and its compliance with its
Code of Ethics and compliance policies and procedures; and (d) the nature,
cost and character of non-investment management services provided by the
investment adviser and its affiliates.
Each Board noted its view of FAM as one of the most experienced global asset
management firms and considered the overall services provided by FAM to be of
high quality. Each Board also noted its view of FAM as financially sound and
well managed and noted FAM's affiliation with one of America's largest
financial firms. Each Board works closely with the investment adviser in
overseeing the investment adviser's efforts to achieve good performance. As
part of this effort, each Board discusses portfolio manager effectiveness and,
when performance is not satisfactory, discusses with the investment adviser
taking steps such as changing investment personnel.
Annual Consideration of Approval by the Boards
In the period prior to the Board meeting to consider renewal of the pertinent
investment advisory agreement, each Board requests and receives materials
specifically relating to the investment advisory agreement. These materials
are prepared separately for each Fund and include (a) information compiled by
Lipper Inc. ("Lipper") on the fees and expenses, investment performance and
leverage of the Fund as compared to a comparable group of funds as classified
by Lipper; (b) information comparing each Fund's market price with its net
asset value per share; (c) a discussion by the Fund's portfolio management
team regarding investment strategies used by the Fund during its most recent
fiscal year; (d) information on the profitability to the investment adviser
and its affiliates of the investment advisory agreement and other relationships
with the Fund; and (e) information provided by the investment adviser
concerning investment advisory fees charged to other clients, such as retail
closed-end funds, under similar investment mandates. Each Board also considers
other matters it deems important to the approval process, such as payments made
for services related to the valuation and pricing of Fund portfolio holdings,
the Fund's portfolio turnover statistics, and direct and indirect benefits to
the investment adviser and its affiliates from their relationship with the
Fund. No Board identified any particular information as controlling, and each
member of the Boards may have attributed different weights to the various items
considered.
ANNUAL REPORTS OCTOBER 31, 2006
Certain Specific Renewal Data
In connection with the most recent renewal of each Fund's investment advisory
agreement with FAM (each, a "FAM Investment Advisory Agreement") in June 2006,
the independent directors'/trustees' and the Board's review included the
following:
Services Provided by the Investment Adviser--Each Board reviewed the nature,
extent and quality of services provided by FAM, including the investment
advisory services and the resulting performance of each Fund. Each Board
focused primarily on FAM's investment advisory services and the Fund's
investment performance. Each Board compared Fund performance - both including
and excluding the effects of the Fund's fees and expenses - to the performance
of a comparable group of funds and the performance of a relevant index or
combination of indexes. While each Board reviews performance data at least
quarterly, consistent with the investment adviser's investment goals, each
Board attaches more importance to performance over relatively long periods of
time, typically three to five years.
For the periods ended February 28, 2006, the Boards noted that MuniYield
Florida Insured Fund's performance after fees and expenses ranked in the
fourth quintile for each of the one-, three- and five-year periods; MuniYield
Michigan Insured Fund, Inc.'s performance after fees and expenses ranked in
the fifth quintile for the one- and three-year periods and ranked fourth out
of five funds for the five-year period; MuniYield New Jersey Insured Fund,
Inc.'s performance after fees and expenses ranked in the fifth quintile for
the one-year period, in the fourth quintile for the three-year period and in
the third quintile for the five-year period; and MuniYield Pennsylvania
Insured Fund's performance ranked in the fourth quintile for the one-year
period, in the second quintile for the three-year period and in the first
quintile for the five-year period. The Boards noted the overall turnaround in
the Funds' performance. The Boards also considered FAM management's belief
that there is a relatively small universe of comparable funds for each of the
Funds and that each Fund was doing well against the funds FAM management
believed to be its competitors. The Boards also noted that the yields of the
Funds were generally in the middle range. Considering these factors, each
Board concluded that the respective Fund's performance supported the
continuation of the Fund's FAM Investment Advisory Agreement, but determined
to monitor the performance of MuniYield Florida Insured Fund, MuniYield
Michigan Insured Fund, Inc. and MuniYield New Jersey Insured Fund, Inc.
FAM's Personnel and Investment Process--Each Fund's Board reviewed the Fund's
investment objectives and strategies. Each Board discussed with FAM's senior
management responsible for investment operations and the senior management of
FAM's municipal investing group the strategies being used to achieve the
stated objectives. Among other things, each Board considered the size,
education and experience of FAM's investment staff, its use of technology, and
FAM's approach to training and retaining portfolio managers and other
research, advisory and management personnel. Each Board also reviewed FAM's
compensation policies and practices with respect to the Fund's portfolio
manager. Each Board also considered the experience of the Fund's portfolio
manager. The Board of MuniYield Florida Insured Fund noted that Mr. Sneeden
has more than 10 years of experience in portfolio management. The Board of
MuniYield Michigan Insured Fund, Inc. noted that Mr. Stuebe has more than 15
years of experience in portfolio management. The Board of MuniYield New Jersey
Insured Fund, Inc. noted that Mr. Jaeckel has more than 15 years of experience
in portfolio management. The Board of MuniYield Pennsylvania Insured Fund
noted that Mr. Bock has more than 15 years of experience in portfolio
management. Moreover, the Boards considered the extensive experience of FAM
and its investment staff in analyzing and managing the types of investments
used by the Funds. Each Board concluded that the Fund benefits from that
experience.
ANNUAL REPORTS OCTOBER 31, 2006
Disclosure of Investment Advisory Agreement (concluded)
Management Fees and Other Expenses--Each Fund's Board reviewed the Fund's
contractual management fee rate and actual management fee rate as a percentage
of total assets at common asset levels - the actual rate includes advisory and
administrative service fees and the effects of any fee waivers - compared to
the other funds in its Lipper category. Each Board also compared the Fund's
total expenses to those of other comparable funds. Each Board considered the
services provided to and the fees charged by FAM to other types of clients
with similar investment mandates, including, for each of MuniYield Florida
Insured Fund, MuniYield Michigan Insured Fund, Inc. and MuniYield New Jersey
Insured Fund, Inc., a retail closed-end fund. The Boards noted that the fees
charged for these accounts exceeded those being charged to the respective
Fund. The Board of MuniYield Pennsylvania Insured Fund noted that FAM had
advised the Board that it had no other comparable accounts with similar
investment mandates. With respect to MuniYield Florida Insured Fund, the
Fund's Board noted that the contractual management fee rate was lower than and
the actual management fee rate was higher than the median of such fees charged
by comparable funds, as determined by Lipper, while the Fund's total expenses
were slightly higher than the median of total expenses for comparable funds.
With respect to MuniYield Michigan Insured Fund, Inc., the Fund's Board noted
that the contractual management fee rate and actual management fee rate were
somewhat higher than the median of such fees charged by comparable funds, as
determined by Lipper, and the Fund's total expenses were also somewhat higher
than the median of total expenses for comparable funds. With respect to
MuniYield New Jersey Insured Fund, Inc., the Fund's Board noted that the
contractual management fee rate and the actual management fee rate were higher
than the median of such fees charged by comparable funds, as determined by
Lipper, while the Fund's total expenses were close to the median of total
expenses for comparable funds. With respect to MuniYield Pennsylvania Insured
Fund, the Fund's Board noted that the contractual management fee rate and the
actual management fee rate were higher than the median of such fees charged by
comparable funds, as determined by Lipper, and the Fund's total expenses were
higher than the median of total expenses for comparable funds. Each Fund's
Board concluded that the Fund's management fee rate and overall expense ratio
were reasonable compared to those of other comparable funds.
Profitability--Each Board considers the cost of the services provided to the
Fund by the investment adviser and the investment adviser's and its
affiliates' profits relating to the management and distribution of the Fund
and the funds advised by the investment manager and its affiliates. As part of
its analysis, each Fund's Board reviewed FAM's methodology in allocating its
costs to the management of the Fund and concluded that there was a reasonable
basis for the allocation. Each Board concluded that the profits of FAM and its
affiliates were acceptable in relation to the nature and quality of services
provided and given the level of fees and expenses overall.
Economies of Scale--Each Fund's Board considered the extent to which economies
of scale might be realized as the assets of the Fund increase and whether
there should be changes in the management fee rate or structure in order to
enable the Fund to participate in these economies of scale. Because each Fund
is a closed-end fund, each Fund's Board concluded that the assets of the Fund
are unlikely to increase significantly and that the current advisory fee
appropriately reflects any economies of scale. Each Board determined that the
management fee structure was reasonable and that no changes were currently
necessary.
Conclusion
After the independent directors/trustees of each Board deliberated in
executive session, the entire Board of each Fund, including all of the
independent directors/trustees, approved the renewal of the pertinent FAM
Investment Advisory Agreement, concluding that the advisory fee was reasonable
in relation to the services provided and that a contract renewal was in the
best interests of the shareholders.
ANNUAL REPORTS OCTOBER 31, 2006
Disclosure of New Investment Advisory Agreement
New BlackRock Investment Advisory Agreements--Matters Considered by the Boards
In connection with the combination of Merrill Lynch's investment advisory
business, including Fund Asset Management, L.P. (the "Previous Investment
Adviser"), with that of BlackRock, Inc. ("BlackRock") to create a new
independent company ("New BlackRock") (the "Transaction"), each Fund's Board
of Directors or Board of Trustees, as pertinent, considered and approved a new
investment advisory agreement (each, a "BlackRock Investment Advisory
Agreement") between the Fund and BlackRock Advisors, LLC ("BlackRock
Advisors"). Each Fund's shareholders subsequently approved the Fund's
BlackRock Investment Advisory Agreement and it became effective on September
29, 2006, replacing the Fund's investment advisory agreement with the Previous
Investment Adviser (each, a "Previous Investment Advisory Agreement").
Each Fund's Board discussed the Fund's BlackRock Investment Advisory Agreement
at telephonic and in-person meetings held during April and May 2006. Each
Fund's Board, including the independent directors/trustees, approved the
Fund's BlackRock Investment Advisory Agreement at an in-person meeting held on
May 8, 2006.
To assist each Fund's Board in its consideration of the Fund's BlackRock
Investment Advisory Agreement, BlackRock provided materials and information
about BlackRock, including its financial condition and asset management
capabilities and organization, and Merrill Lynch provided materials and
information about the Transaction. Each Fund's independent directors/trustees,
through their independent legal counsel, also requested and received
additional information from Merrill Lynch and BlackRock in connection with
their consideration of the Fund's BlackRock Investment Advisory Agreement. The
additional information was provided in advance of the May 8, 2006 meetings. In
addition, each Fund's independent directors/trustees consulted with their
counsel and Fund counsel on numerous occasions, discussing, among other
things, the legal standards and certain other considerations relevant to the
directors'/trustees' deliberations.
At each Fund's Board meetings, the directors/trustees discussed with Merrill
Lynch management and certain BlackRock representatives the Transaction, its
strategic rationale and BlackRock's general plans and intentions regarding the
Fund. At these Board meetings, representatives of Merrill Lynch and BlackRock
made presentations to and responded to questions from the Boards. The
directors/trustees also inquired about the plans for and anticipated roles and
responsibilities of certain employees and officers of the Previous Investment
Adviser, and of its affiliates, to be transferred to BlackRock in connection
with the Transaction. The independent directors/trustees also conferred
separately and with their counsel about the Transaction and other matters
related to the Transaction on a number of occasions, including in connection
with the April and May 2006 meetings. After the presentations and after
reviewing the written materials provided, each Fund's independent directors/
trustees met in executive sessions with their counsel to consider the Fund's
BlackRock Investment Advisory Agreement.
In connection with the directors'/trustees' review of each Fund's BlackRock
Investment Advisory Agreement, Merrill Lynch and/or BlackRock advised the
directors/trustees about a variety of matters. The advice included the
following, among other matters:
* that there was not expected to be any diminution in the nature, quality and
extent of services provided to any of the Funds or their shareholders by
BlackRock Advisors, including compliance services;
* that operation of New BlackRock as an independent investment management
firm would enhance its ability to attract and retain talented
professionals;
* that each Fund was expected to benefit from having access to BlackRock's
state of the art technology and risk management analytic tools, including
investment tools, provided under the BlackRock Solutions (R) brand name;
* that BlackRock had no present intention to alter any applicable expense
waivers or reimbursements that were currently in effect and, while it
reserved the right to do so in the future, it would seek Board approval
before making any changes;
* that in connection with the Transaction, Merrill Lynch and BlackRock had
agreed to conduct, and use reasonable best efforts to cause their
respective affiliates to conduct, their respective businesses in compliance
with the conditions of Section 15(f) of the Investment Company Act of 1940
(the "1940 Act") in relation to any public funds advised by BlackRock or
the Previous Investment Adviser (or affiliates), respectively; and
ANNUAL REPORTS OCTOBER 31, 2006
Disclosure of New Investment Advisory Agreement (continued)
* that Merrill Lynch and BlackRock would derive benefits from the Transaction
and that, as a result, they had a financial interest in the matters being
considered that was different from that of Fund shareholders.
The directors/trustees considered the information provided by Merrill Lynch
and BlackRock above, and, among other factors, the following:
* the potential benefits to each Fund's shareholders from being part of a
combined fund family with BlackRock-sponsored funds, including possible
economies of scale and access to investment opportunities;
* the reputation, financial strength and resources of BlackRock and its
investment advisory subsidiaries and the anticipated financial strength and
resources of New BlackRock;
* the compliance policies and procedures of BlackRock Advisors;
* the terms and conditions of each Fund's BlackRock Investment Advisory
Agreement, including the fact that no Fund's schedule of total advisory
fees would increase under the pertinent BlackRock Investment Advisory
Agreement, but would remain the same;
* that in May 2005, each Fund's Board had performed a full annual review of
the pertinent Previous Investment Advisory Agreement, as required by the
1940 Act, and had determined that the Previous Investment Adviser had the
capabilities, resources and personnel necessary to provide the advisory and
administrative services that were then being provided to the Fund; and that
the advisory and/or management fees paid by the Fund, taking into account
any applicable agreed-upon fee waivers and breakpoints, had represented
reasonable compensation to the Previous Investment Adviser in light of the
services provided, the costs to the Previous Investment Adviser of
providing those services, economies of scale, the fees and other expenses
paid by similar funds (including information provided by Lipper Inc.
["Lipper"]), and such other matters as the directors/trustees had
considered relevant in the exercise of their reasonable judgment; and
* that Merrill Lynch had agreed to pay all expenses of each Fund in
connection with the consideration by the Board of the Fund's BlackRock
Investment Advisory Agreement and related agreements and all costs of
shareholder approval of the BlackRock Investment Advisory Agreement and, as
a result, the Fund would bear no costs in obtaining shareholder approval of
the BlackRock Investment Advisory Agreement.
Certain of these considerations are discussed in more detail below.
In its review of the Fund's BlackRock Investment Advisory Agreement, each
Fund's Board assessed the nature, quality and scope of the services to be
provided to the Fund by the personnel of BlackRock Advisors and its
affiliates, including administrative services, shareholder services, oversight
of fund accounting and assistance in meeting legal and regulatory
requirements. In its review of the Fund's BlackRock Investment Advisory
Agreement, each Fund's Board also considered a range of information in
connection with its oversight of the services to be provided by BlackRock
Advisors and its affiliates. Among the matters considered for each Fund were:
(a) fees (in addition to management fees) to be paid to BlackRock Advisors and
its affiliates by the Fund; (b) Fund operating expenses paid to third parties;
(c) the resources devoted to and compliance reports relating to the Fund's
investment objective, policies and restrictions, and its compliance with its
Code of Ethics and BlackRock Advisors' compliance policies and procedures; and
(d) the nature, cost and character of non-investment management services to be
provided by BlackRock Advisors and its affiliates.
In the period prior to each Fund's Board meeting to consider renewal of the
Fund's Previous Investment Advisory Agreement, the Board had requested and
received materials specifically relating to the Previous Investment Advisory
Agreement. For each Fund, these materials included (a) information compiled by
Lipper on the fees and expenses and the investment performance of the Fund as
compared to a comparable group of funds as classified by Lipper; (b)
information comparing the Fund's market price with its net asset value per
share; (c) a discussion by the Fund's portfolio management team on investment
strategies used by the Fund during its most recent fiscal year; (d)
information on the profitability to the Previous Investment Adviser of the
Fund's Previous Investment Advisory Agreement and other payments received by
the Previous Investment Adviser and its affiliates from the Fund; and (e)
information provided by the Previous Investment Adviser concerning services
related to the valuation and pricing of Fund portfolio holdings, the Fund's
portfolio turnover statistics, and direct and indirect benefits to the
Previous Investment Adviser and its affiliates from their relationship with
the Fund.
ANNUAL REPORTS OCTOBER 31, 2006
In their deliberations, each Fund's directors/trustees considered information
received in connection with their most recent approval of the continuance of
the Fund's Previous Investment Advisory Agreement, in addition to information
provided by BlackRock and BlackRock Advisors in connection with their
evaluation of the terms and conditions of the Fund's BlackRock Investment
Advisory Agreement. None of the Funds' directors/trustees identified any
particular information that was all-important or controlling, and each
director/trustee attributed different weights to the various factors. Each
Fund's directors/trustees, including a majority of the independent directors/
trustees, concluded that the terms of the Fund's BlackRock Investment Advisory
Agreement are appropriate, that the fees to be paid are reasonable in light of
the services to be provided to the Fund, and that the BlackRock Investment
Advisory Agreement should be approved and recommended to Fund shareholders.
Nature, Quality and Extent of Services Provided--Each Fund's Board reviewed
the nature, quality and scope of services provided by the Previous Investment
Adviser, including the investment advisory services and the resulting
performance of the Fund, as well as the nature, quality and extent of services
expected to be provided by BlackRock Advisors. Each Fund's Board focused
primarily on the Previous Investment Adviser's investment advisory services
and the Fund's investment performance, but also considered certain areas in
which both the Previous Investment Adviser and the Fund received services as
part of the Merrill Lynch complex. Each Fund's Board compared the Fund's
performance - both including and excluding the effects of fees and expenses -
to the performance of a comparable group of funds, and the performance of a
relevant index or combination of indexes. While each Board reviews performance
data at least quarterly, consistent with the Previous Investment Adviser's
investment goals, the Board attaches more importance to performance over
relatively long periods of time, typically three to five years.
In evaluating the nature, quality and extent of the services to be provided by
BlackRock Advisors under each Fund's BlackRock Investment Advisory Agreement,
the directors/trustees considered, among other things, the expected impact of
the Transaction on the operations, facilities, organization and personnel of
BlackRock Advisors and how it would affect the Fund; the ability of BlackRock
Advisors to perform its duties after the Transaction; and any anticipated
changes to the investment and other practices of the Fund.
Each Fund's directors/trustees were given information with respect to the
potential benefits to the Fund and its shareholders from having access to
BlackRock's state of the art technology and risk management analytic tools,
including the investment tools provided under the BlackRock Solutions brand
name.
Each Fund's directors/trustees were advised that, as a result of Merrill
Lynch's equity interest in BlackRock after the Transaction, the Fund would
continue to be subject to restrictions concerning certain transactions
involving Merrill Lynch affiliates (for example, transactions with a Merrill
Lynch broker-dealer acting as principal) absent revised or new regulatory
relief. Each Fund's directors/trustees were advised that a revision of
existing regulatory relief with respect to these restrictions was being sought
from the Securities and Exchange Commission and were advised of the
possibility of the receipt of such revised regulatory relief.
Based on their review of the materials provided and the assurances they had
received from the management of Merrill Lynch and of BlackRock, each Fund's
directors/trustees determined that the nature and quality of services to be
provided to the Fund under the Fund's BlackRock Investment Advisory Agreement
were expected to be as good as or better than that provided under the Fund's
Previous Investment Advisory Agreement. The directors/trustees were advised
that BlackRock Advisors did not plan to change any of the Funds' portfolio
management team upon the closing of the transaction. It was noted, however,
that other changes in personnel were expected to follow the Transaction and
the combination of the operations of the Previous Investment Adviser and its
affiliates with those of BlackRock. Each Fund's directors/trustees noted that
if current portfolio managers or other personnel were to cease to be available
prior to the closing of the Transaction, the Board would consider all available
options, including seeking the investment advisory or other services of
BlackRock affiliates. Accordingly, each Fund's directors/trustees concluded
that, overall, they were satisfied at the present time with assurances from
BlackRock and BlackRock Advisors as to the expected nature, quality and extent
of the services to be provided to the Fund under the Fund's BlackRock
Investment Advisory Agreement.
ANNUAL REPORTS OCTOBER 31, 2006
Disclosure of New Investment Advisory Agreement (concluded)
Costs of Services Provided and Profitability--It was noted that, in
conjunction with their recent review of the Fund's Previous Investment
Advisory Agreement, each Fund's directors/trustees had received, among other
things, a report from Lipper comparing the Fund's fees and expenses to those
of a peer group selected by Lipper, and information as to the fees charged by
the Previous Investment Adviser or its affiliates to other registered
investment company clients for investment management services. Each Fund's
Board reviewed the Fund's contractual management fee rate and actual
management fee rate as a percentage of total assets at common asset levels -
the actual rate includes advisory fees and the effects of any fee waivers -
compared to the other funds in its Lipper category. Each Fund's Board also
compared the Fund's total expenses to those of other comparable funds. The
information showed that each Fund had fees and expenses within the range of
fees and expenses of comparable funds. Each Fund's Board considered the
services to be provided by and the fees to be charged by BlackRock Advisors to
other funds with similar investment mandates and noted that the fees charged
by BlackRock Advisors in those cases, including fee waivers and expense
reimbursements, were generally comparable to those being charged to the Fund.
Each Fund's Board concluded that the Fund's management fee and fee rate and
overall expense ratio are reasonable compared to those of other comparable
funds.
In evaluating the costs of the services to be provided by BlackRock Advisors
under the Fund's BlackRock Investment Advisory Agreement, each Fund's
directors/trustees considered, among other things, whether advisory fees or
other expenses would change as a result of the Transaction. Based on their
review of the materials provided and the fact that the Fund's BlackRock
Investment Advisory Agreement is substantially similar to the Fund's Previous
Investment Advisory Agreement in all material respects, including the rate of
compensation, each Fund's directors/trustees determined that the Transaction
should not increase the total fees payable, including any fee waivers and
expense reimbursements, for advisory and administrative services. Each Fund's
directors/trustees noted that it was not possible to predict with certainty
New BlackRock's future profitability from its relationship with the Fund.
Each Fund's directors/trustees discussed with BlackRock Advisors its general
methodology to be used in determining New BlackRock's profitability with
respect to its relationship with the Fund. Each Fund's directors/trustees
noted that they expect to receive profitability information from New BlackRock
on at least an annual basis and thus be in a position to evaluate whether any
adjustments in Fund fees and/or fee breakpoints would be appropriate.
Fees and Economies of Scale--Each Fund's Board considered the extent to which
economies of scale might be realized as the assets of the Fund increase and
whether there should be changes in the management fee rate or structure in
order to enable the Fund to participate in these economies of scale. Each
Board determined that changes were not currently necessary and that the Fund
appropriately participated in these economies of scale.
In reviewing the Transaction, the directors/trustees considered, among other
things, whether advisory fees or other expenses would change as a result of
the Transaction. Based on the fact that each Fund's BlackRock Investment
Advisory Agreement is substantially similar to the Fund's Previous Investment
Advisory Agreement in all material respects, including the rate of
compensation, the Fund's directors/trustees determined, that as a result of
the Transaction, the Fund's total advisory fees would be no higher than the
fees under the Fund's Previous Investment Advisory Agreement. Each Fund's
directors/trustees noted that, in conjunction with their most recent
deliberations concerning the Fund's Previous Investment Advisory Agreement,
they had determined that the total fees for advisory and administrative
services for the Fund were reasonable in light of the services provided. It
was noted that in conjunction with the most recent review of each Fund's
Previous Investment Advisory Agreement, the Fund's directors/trustees had
received, among other things, a report from Lipper comparing the Fund's fees,
expenses and performance to those of a peer group selected by Lipper, and
information as to the fees charged by the Previous Investment Adviser to other
registered investment company clients for investment management services. Each
Fund's directors/trustees concluded that because the rates for advisory fees
for the Fund would be no higher than the fee rates in effect at the time, the
proposed management fee structure, including any fee waivers, was reasonable
and that no additional changes were currently necessary.
Fall-Out Benefits--In evaluating the fall-out benefits to be received by
BlackRock Advisors under the Fund's BlackRock Investment Advisory Agreement,
each Fund's directors/trustees considered whether BlackRock Advisors would
experience such benefits to the same extent that the Previous Investment
Adviser was experiencing such benefits under the Fund's Previous Investment
Advisory Agreement. Based on their review of the materials provided, including
materials received in connection with their most recent approval of the
continuance of the Fund's Previous Investment Advisory Agreement, and their
discussions with management of the Previous Investment Adviser and BlackRock,
each Fund's directors/trustees determined that BlackRock Advisors' fall-out
benefits could include increased ability for BlackRock to distribute shares of
its funds and other investment products. The directors/trustees noted that any
fall-out benefits were difficult to quantify with certainty at this time, and
indicated that they would continue to evaluate them going forward.
ANNUAL REPORTS OCTOBER 31, 2006
Investment Performance--Each Fund's Board considered investment performance
for the Fund. Each Fund's directors/trustees compared the Fund's performance -
both including and excluding the effects of fees and expenses - to the
performance of a comparable group of funds, and the performance of a relevant
index or combination of indexes. The comparative information received from
Lipper showed each Fund's performance at various levels within the range of
performance of comparable funds over different time periods. While each Board
reviews performance data at least quarterly, consistent with the Previous
Investment Adviser's investment goals, each Board attaches more importance
over relatively long periods of time, typically three to five years. Each
Fund's directors/ trustees believed the Fund's performance was satisfactory.
Also, each Board took into account the investment performance of funds advised
by BlackRock Advisors. Each Board considered comparative information from
Lipper which showed that the performance of the funds advised by BlackRock
Advisors was within the range of performance of comparable funds over
different time periods. Each Fund's Board noted BlackRock's considerable
investment management experience and capabilities, but was unable to predict
what effect, if any, consummation of the Transaction would have on the future
performance of the Fund.
Conclusion--After the independent directors/trustees of each Fund deliberated
in executive session, the Fund's entire Board, including the independent
directors/trustees, approved the Fund's BlackRock Investment Advisory
Agreement, concluding that the advisory fee rate was reasonable in relation to
the services provided and that the BlackRock Investment Advisory Agreement was
in the best interests of the shareholders. In approving the Fund's BlackRock
Investment Advisory Agreement, each Fund's Board noted that it anticipated
reviewing the continuance of the agreement in advance of the expiration of the
initial two-year period.
New BlackRock Sub-Advisory Agreements--Matters Considered by the Boards
At an in-person meeting held on August 16 - 17, 2006, each Fund's Board of
Directors or Board of Trustees, as pertinent, including the independent
directors/trustees, discussed and approved the Fund's sub-advisory agreement
(each, a "BlackRock Sub-Advisory Agreement") between BlackRock Advisors and
its affiliate, BlackRock Investment Management, LLC (the "Sub-Adviser"). Each
Fund's BlackRock Sub-Advisory Agreement became effective on September 29,
2006, at the same time the Fund's BlackRock Investment Advisory Agreement
became effective.
Pursuant to each Fund's BlackRock Sub-Advisory Agree-ment, the Sub-Adviser
receives a monthly fee from BlackRock Advisors equal to 59% of the advisory
fee received by BlackRock Advisors from the Fund. BlackRock Advisors pays the
Sub-Adviser out of its own resources, and there is no increase in the expenses
of any of the Funds as a result of the Fund's BlackRock Sub-Advisory
Agreement.
In approving the Fund's BlackRock Sub-Advisory Agreement at the August in-
person meeting, each Fund's Board reviewed its considerations in connection
with its approval of the Fund's BlackRock Investment Advisory Agreement in May
2006. Each Fund's Board relied on the same information and considered the same
factors as those discussed above in connection with the approval of the Fund's
BlackRock Investment Advisory Agreement. In reviewing the sub-advisory fee
rate provided in each Fund's BlackRock Sub-Advisory Agreement, the Fund's
Board noted the fact that both BlackRock Advisors and the Sub-Adviser have
significant responsibilities under their respective advisory agreements.
BlackRock Advisors remains responsible for oversight of each Fund's operations
and administration, and the Sub-Adviser provides advisory services to the Fund
and is responsible for the day-to-day management of the Fund's portfolio under
the Fund's BlackRock Sub-Advisory Agreement. Each Fund's Board also took into
account the fact that there is no increase in total advisory fees paid by the
Fund as a result of the Fund's BlackRock Sub-Advisory Agreement. Under all of
the circumstances, each Fund's Board concluded that it was a reasonable
allocation of fees for the Sub-Adviser to receive 59% of the advisory fee paid
by the Fund to BlackRock Advisors.
After each Fund's independent directors/trustees deliberated in executive
session, each Fund's entire Board, including the independent directors/
trustees, approved the Fund's BlackRock Sub-Advisory Agreement, concluding
that the sub-advisory fee was reasonable in relation to the services provided
and that the BlackRock Sub-Advisory Agreement was in the best interests of
shareholders.
ANNUAL REPORTS OCTOBER 31, 2006
Officers and Directors/Trustees
Number of
Funds and
Portfolios in Other Public
Fund Complex Directorships
Position(s) Length of Overseen by Held by
Held with Time Director/ Director/
Name, Address & Age Funds Served Principal Occupation(s) During Past 5 Years Trustee Trustee
Interested Director
Robert C. Doll, Jr.* President 2005 to Vice Chairman and Director of BlackRock, Inc., 122 Funds None
P.O. Box 9011 and present Global Chief Investment Officer for Equities, 168 Portfolios
Princeton, Director/ Chairman of the BlackRock Retail Operating
NJ 08543-9011 Trustee Committee, and member of the BlackRock Executive
Age: 52 Committee since 2006; President of the Funds
advised by Merrill Lynch Investment Managers, L.P.
("MLIM") and its affiliates ("MLIM/FAM-advised
funds") from 2005 to 2006 and Chief Investment
Officer thereof from 2001 to 2006; President of
MLIM and Fund Asset Management, L.P. ("FAM")
from 2001 to 2006; Co-Head (Americas Region)
thereof from 2000 to 2001 and Senior Vice
President from 1999 to 2001; President and Director
of Princeton Services, Inc. ("Princeton Services")
since 2001; President of Princeton Administrators,
L.P. ("Princeton Administrators") from 2001 to 2006;
Chief Investment Officer of OppenheimerFunds, Inc.
in 1999 and Executive Vice President thereof from
1991 to 1999.
* Mr. Doll is a director, trustee or member of an advisory board of certain other
investment companies for which BlackRock acts as investment adviser. Mr. Doll is
an "interested person," as described in the Investment Company Act, of the Fund
based on his current and former positions with BlackRock, Inc. and its affiliates.
Directors or Trustees serve until their resignation, removal or death, or until
December 31 of the year in which they turn 72. As Fund President, Mr. Doll serves
at the pleasure of the Board of Directors or Trustees.
Independent Directors/Trustees*
Donald W. Burton Director/ 2002 to General Partner of The Burton Partnership, 21 Funds Knology, Inc.
P.O. Box 9095 Trustee present Limited Partnership (an investment partnership) 38 Portfolios (telecommuni-
Princeton, since 1979; Managing General Partner of The cations); and
NJ 08543-9095 South Atlantic Venture Funds since 1983; Member Symbion, Inc.
Age: 62 of the Investment Advisory Council of the (healthcare)
Florida State Board of Administration since 2001.
John Francis O'Brien Director/ 2005 to President and Chief Executive Officer of 21 Funds Cabot
P.O. Box 9095 Trustee present Allmerica Financial Corporation (financial 38 Portfolios Corporation
Princeton, services holding company) from 1995 to 2002 (chemicals),
NJ 08543-9095 and Director from 1995 to 2003; President of LKQ Corporation
Age: 63 Allmerica Investment Management Co., Inc. (auto parts
(investment adviser) from 1989 to 2002, Director manufacturing)
from 1989 to 2002 and Chairman of the Board from and TJX Com-
1989 to 1990; President, Chief Executive Officer panies, Inc.
and Director of First Allmerica Financial Life (retailer)
Insurance Company from 1989 to 2002 and Director
of various other Allmerica Financial companies
until 2002; Director from 1989 to 2006, Member of
the Governance Nominating Committee from 2004 to
2006, Member of the Compensation Committee from
1989 to 2006 and Member of the Audit Committee
from 1990 to 2004 of ABIOMED; Director, Member
of the Governance and Nomination Committee and
Member of the Audit Committee of Cabot Corporation
since 1990; Director and Member of the Audit
Committee and Compensation Committee of LKQ
Corporation since 2003; Lead Director of TJX
Companies, Inc. since 1999; Trustee of the Woods
Hole Oceanographic Institute since 2003.
ANNUAL REPORTS OCTOBER 31, 2006
Officers and Directors/Trustees (continued)
Number of
Funds and
Portfolios in Other Public
Fund Complex Directorships
Position(s) Length of Overseen by Held by
Held with Time Director/ Director/
Name, Address & Age Funds Served Principal Occupation(s) During Past 5 Years Trustee Trustee
Independent Directors/Trustees (concluded)*
David H. Walsh Director/ 2003 to Consultant with Putnam Investments from 1993 21 Funds None
P.O. Box 9095 Trustee present to 2003, and employed in various capacities 38 Portfolios
Princeton, therewith from 1973 to 1992; Director,
NJ 08543-9095 Massachusetts Audubon Society from 1990
Age: 65 to 1997; Director, The National Audubon Society
from 1998 to 2005; Director, The American
Museum of Fly Fishing since 1997.
Fred G. Weiss** Director/ 1998 to Managing Director of FGW Associates since 21 Funds Watson
P.O. Box 9095 Trustee present 1997; Vice President, Planning, Investment and 38 Portfolios Pharmaceuticals,
Princeton, Development of Warner Lambert Co. from 1979 to Inc.
NJ 08543-9095 1997; Director of the Michael J. Fox Foundation (pharmaceutical
Age: 65 for Parkinson's Research since 2000; Director company)
of BTG International PLC (a global technology
commercialization company) since 2001.
* Directors/Trustees serve until their resignation, removal or death,
or until December 31 of the year in which they turn 72.
** Chairman of the Board of Directors/Trustees and the Audit Committee.
Position(s) Length of
Held with Time
Name, Address & Age Funds Served Principal Occupation(s) During Past 5 Years
Fund Officers*
Donald C. Burke Vice 1993 to Managing Director of BlackRock since 2006; Managing Director of MLIM and FAM
P.O. Box 9011 President present in 2006; First Vice President of MLIM and FAM from 1997 to 2005 and Treasurer
Princeton, and and thereof from 1999 to 2006; Vice President of MLIM and FAM from 1990 to 1997.
NJ 08543-9011 Treasurer 1999 to
Age: 46 present
John M. Loffredo Senior 2002 to Managing Director of BlackRock since 2006; Managing Director (Tax-Exempt Fund
P.O. Box 9011 Vice present Management) of MLIM from 2000 to 2006; Director of MLIM from 1997 to 2000.
Princeton, President
NJ 08543-9011
Age: 42
William R. Bock Vice 1997 Director of BlackRock since 2006; Director of MLIM (Tax-Exempt Fund Management)
P.O. Box 9011 President (MPA) from 2005 to 2006; Vice President of MLIM from 1989 to 2005.
Princeton, to
NJ 08543-9011 present
Age: 70
Theodore R. Jaeckel, Jr. Vice 1997 Managing Director of BlackRock since 2006; Managing Director (Municipal
P.O. Box 9011 President (MJI) Tax-Exempt Fund Management) of MLIM from 2005 to 2006; Director of MLIM
Princeton, to from 1997 to 2005; Vice President of MLIM from 1991 to 1997.
NJ 08543-9011 present
Age: 47
Robert D. Sneeden Vice 2002 Director of BlackRock since 2006; Director (Municipal Tax-Exempt Fund Management)
P.O. Box 9011 President (MFT) of MLIM from 2005 to 2006; Vice President of MLIM from 1998 to 2005; Assistant
Princeton, to Vice President of MLIM from 1994 to 1998.
NJ 08543-9011 present
Age: 53
Fred K. Steube Vice 1995 Director of BlackRock since 2006; Director (Municipal Tax-Exempt Fund Management)
P.O. Box 9095 President (MYI) of MLIM from 2000 to 2006; Vice President of MLIM from 1994 to 2000.
Princeton, to
NJ 08543-9011 present
Age: 56
ANNUAL REPORTS OCTOBER 31, 2006
Officers and Directors/Trustees (concluded)
Position(s) Length of
Held with Time
Name, Address & Age Funds Served Principal Occupation(s) During Past 5 Years
Fund Officers (concluded)*
Jeffrey Hiller Fund Chief 2004 to Managing Director of BlackRock and Fund Chief Compliance Officer since 2006;
P.O. Box 9095 Compliance present Chief Compliance Officer of the MLIM/FAM-advised funds and First Vice President
Princeton, Officer and Chief Compliance Officer of MLIM (Americas Region) from 2004 to 2006; Chief
NJ 08543-9011 Compliance Officer of the IQ Funds since 2004; Global Director of Compliance at
Age: 55 Morgan Stanley Investment Management from 2002 to 2004; Managing Director and
Global Director of Compliance at Citigroup Asset Management from 2000 to 2002;
Chief Compliance Officer at Soros Fund Management in 2000; Chief Compliance
Officer at Prudential Financial from 1995 to 2000; Senior Counsel in the
Securities and Exchange Commission's Division of Enforcement in Washington, D.C.
from 1990 to 1995.
Alice A. Pellegrino Secretary 2004 to Director of BlackRock since 2006; Director (Legal Advisory) of MLIM from 2002 to
P.O. Box 9011 present 2006; Vice President of MLIM from 1999 to 2002; Attorney associated with MLIM
Princeton, from 1997 to 2006; Secretary of MLIM, FAM, FAM Distributors, Inc. and Princeton
NJ 08543-9011 Services from 2004 to 2006.
Age: 46
* Officers of the Funds serve at the pleasure of the Board of Directors or Trustees.
BlackRock MuniYield Florida Insured Fund
BlackRock MuniYield Michigan Insured Fund, Inc.
BlackRock MuniYield New Jersey Insured Fund, Inc.
Custodian
The Bank of New York
100 Church Street
New York, NY 10286
Transfer Agents
Common Shares or Stock:
The Bank of New York
101 Barclay Street - 11 East
New York, NY 10286
Preferred Shares or Stock:
The Bank of New York
101 Barclay Street - 7 West
New York, NY 10286
BlackRock MuniYield Pennsylvania Insured Fund
Custodian
State Street Bank and
Trust Company
P.O. Box 351
Boston, MA 02101
Transfer Agents
Common Shares:
Computershare Trust
Company, N.A.
P.O. Box 43010
Providence, RI 02940-3010
Preferred Shares:
The Bank of New York
101 Barclay Street - 7 West
New York, NY 10286
Investment Objectives
NYSE Symbol BlackRock MuniYield Florida Insured Fund seeks to provide
MFT shareholders with as high a level of current income exempt
from federal income taxes as is consistent with its investment
policies and prudent investment management by investing primarily
in a portfolio of long-term, investment grade municipal
obligations the interest on which, in the opinion of bond counsel
to the issuer, is exempt from federal income taxes and which
enables shares of the Fund to be exempt from Florida intangible
personal property taxes.
NYSE Symbol BlackRock MuniYield Michigan Insured Fund, Inc. seeks to provide
MIY shareholders with as high a level of current income exempt from
federal income tax and Michigan 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 Michigan
income taxes.
NYSE Symbol BlackRock MuniYield New Jersey Insured Fund, Inc. seeks to provide
MJI 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.
NYSE Symbol BlackRock MuniYield Pennsylvania Insured Fund seeks to provide
MPA shareholders with as high a level of current income exempt from
federal and Pennsylvania 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 and Pennsylvania income taxes.
ANNUAL REPORTS OCTOBER 31, 2006
BlackRock Privacy Principles
BlackRock is committed to maintaining the privacy of its current and former
fund investors and individual clients (collectively, "Clients") and to
safeguarding their nonpublic personal information. The following information
is provided to help you understand what personal information BlackRock
collects, how we protect that information and why in certain cases we share
such information with select parties.
If you are located in a jurisdiction where specific laws, rules or regulations
require BlackRock to provide you with additional or different privacy-related
rights beyond what is set forth below, then BlackRock will comply with those
specific laws, rules or regulations.
BlackRock obtains or verifies personal nonpublic information from and about
you from different sources, including the following: (i) information we
receive from you or, if applicable, your financial intermediary, on
applications, forms or other documents; (ii) information about your
transactions with us, our affiliates, or others; (iii) information we receive
from a consumer reporting agency; and (iv) from visits to our Web sites.
BlackRock does not sell or disclose to nonaffiliated third parties any
nonpublic personal information about its Clients, except as permitted by law
or as is necessary to service Client accounts. These nonaffiliated third
parties are required to protect the confidentiality and security of this
information and to use it only for its intended purpose.
We may share information with our affiliates to service your account or to
provide you with information about other BlackRock products or services that
may be of interest to you. In addition, BlackRock restricts access to
nonpublic personal information about its Clients to those BlackRock employees
with a legitimate business need for the information. BlackRock maintains
physical, electronic and procedural safeguards that are designed to protect
the nonpublic personal information of its Clients, including procedures
relating to the proper storage and disposal of such information.
Availability of Quarterly Schedule of Investments
The Funds file their complete schedules of portfolio holdings with the
Securities and Exchange Commission ("SEC") for the first and third quarters
of each fiscal year on Form N-Q. The Funds' Forms N-Q are available on the
SEC's Web site at http://www.sec.gov. The Funds' Forms N-Q may also be
reviewed and copied at the SEC's Public Reference Room in Washington, DC.
Information on the operation of the Public Reference Room may be obtained by
calling1-800-SEC-0330.
Electronic Delivery
Electronic copies of most financial reports and prospectuses are available on
the Funds' Web site. Shareholders can sign up for e-mail notifications of
quarterly statements, annual and semi-annual reports and prospectuses by
enrolling in the Funds' electronic delivery program.
To enroll:
Shareholders Who Hold Accounts with Investment Advisers, Banks or Brokerages:
Please contact your financial adviser. Please note that not all investment
advisers, banks or brokerages may offer this service.
ANNUAL REPORTS OCTOBER 31, 2006
Item 2 - Code of Ethics - The registrant has adopted a code of ethics, as of
the end of the period covered by this report, that applies to the
registrant's principal executive officer, principal financial
officer and principal accounting officer, or persons performing
similar functions. A copy of the code of ethics is available without
charge at www.blackrock.com.
Item 3 - Audit Committee Financial Expert - The registrant's board of
directors has determined that (i) the registrant has the following
audit committee financial experts serving on its audit committee and
(ii) each audit committee financial expert is independent: (1)
Donald W. Burton, (2) Laurie Simon Hodrick (resigned as of May 1,
2006), (3) John F. O'Brien, (4) David H. Walsh and (5) Fred G.
Weiss.
The registrant's board of directors has determined that Laurie Simon
Hodrick qualifies as a financial experts pursuant to Item 3(c)(4) of
Form N-CSR.
Ms. Hodrick has a thorough understanding of generally accepted
accounting principals, financial statements, and internal controls
and procedures for financial reporting. Ms. Hodrick earned a Ph.D.
in economics and has taught courses in finance for over 15 years.
Her M.B.A.-level course centers around the evaluation and analysis
of firms' corporate financial statements. She has also taught in
financial analysts' training programs. Ms. Hodrick has also worked
with several prominent corporations in connection with the analysis
of financial forecasts and projections and analysis of the financial
statements of those companies, serving on the Financial Advisory
Council of one of these major corporations. She has also served as
the Treasurer and Finance Chair of a 501(c)(3) organization. Ms.
Hodrick has published a number of articles in leading economic and
financial journals and is the associate editor of two leading
finance journals.
Item 4 - Principal Accountant Fees and Services
(a) Audit Fees - Fiscal Year Ending October 31, 2006 - $26,500
Fiscal Year Ending October 31, 2005 - $26,000
(b) Audit-Related Fees -
Fiscal Year Ending October 31, 2006 - $3,500
Fiscal Year Ending October 31, 2005 - $19,400
The nature of the services include professional services rendered in
connection with the registration and issuance of new AMP series of
the Fund, and compliance procedures associated with the Fund's AMPS.
(c) Tax Fees - Fiscal Year Ending October 31, 2006 - $6,000
Fiscal Year Ending October 31, 2005 - $5,700
The nature of the services include tax compliance, tax advice and
tax planning.
(d) All Other Fees - Fiscal Year Ending October 31, 2006 - $0
Fiscal Year Ending October 31, 2005 - $0
(e)(1) The registrant's audit committee (the "Committee") has
adopted policies and procedures with regard to the pre-approval of
services. Audit, audit-related and tax compliance services provided
to the registrant on an annual basis require specific pre-approval
by the Committee. The Committee also must approve other non-audit
services provided to the registrant and those non-audit services
provided to the registrant's affiliated service providers that
relate directly to the operations and the financial reporting of the
registrant. Certain of these non-audit services that the Committee
believes are a) consistent with the SEC's auditor independence rules
and b) routine and recurring services that will not impair the
independence of the independent accountants may be approved by the
Committee without consideration on a specific case-by-case basis
("general pre-approval"). However, such services will only be deemed
pre-approved provided that any individual project does not exceed
$5,000 attributable to the registrant or $50,000 for all of the
registrants the Committee oversees. Any proposed services exceeding
the pre-approved cost levels will require specific pre-approval by
the Committee, as will any other services not subject to general pre-
approval (e.g., unanticipated but permissible services). The
Committee is informed of each service approved subject to general
pre-approval at the next regularly scheduled in-person board
meeting.
(e)(2) 0%
(f) Not Applicable
(g) Fiscal Year Ending October 31, 2006 - $3,204,783
Fiscal Year Ending October 31, 2005 - $6,277,749
(h) The registrant's audit committee has considered and determined
that the provision of non-audit services that were rendered to the
registrant's investment adviser and any entity controlling,
controlled by, or under common control with the investment adviser
that provides ongoing services to the registrant that were not pre-
approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation
S-X is compatible with maintaining the principal accountant's
independence.
Regulation S-X Rule 2-01(c)(7)(ii) - $1,739,500, 0%
Item 5 - Audit Committee of Listed Registrants - The following individuals
are members of the registrant's separately-designated standing audit
committee established in accordance with Section 3(a)(58)(A) of the
Exchange Act (15 U.S.C. 78c(a)(58)(A)):
Donald W. Burton
Laurie Simon Hodrick (resigned as of May 1, 2006)
John F. O'Brien
David H. Walsh
Fred G. Weiss
Item 6 - Schedule of Investments - Not Applicable
Item 7 - Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies -
Proxy Voting Policies and Procedures
Each Fund's Board of Directors has delegated to the Manager
authority to vote all proxies relating to the Fund's portfolio
securities. The Manager has adopted policies and procedures (the
"Proxy Voting Procedures") with respect to the voting of proxies
related to the portfolio securities held in the account of one or
more of its clients, including a Fund. Pursuant to these Proxy
Voting Procedures, the Manager's primary objective when voting
proxies is to make proxy voting decisions solely in the best
interests of each Fund and its shareholders, and to act in a manner
that the Manager believes is most likely to enhance the economic
value of the securities held by the Fund. The Proxy Voting
Procedures are designed to ensure that the Manager considers the
interests of its clients, including each Fund, and not the interests
of the Manager, when voting proxies and that real (or perceived)
material conflicts that may arise between the Manager's interest and
those of the Manager's clients are properly addressed and resolved.
In order to implement the Proxy Voting Procedures, the Manager has
formed a Proxy Voting Committee (the "Committee"). The Committee,
which is a subcommittee of the Manager's Equity Investment Policy
Oversight Committee ("EIPOC"), is comprised of a senior member of
the Manager's equity management group who is also a member of EIPOC,
one or more other senior investment professionals appointed by
EIPOC, portfolio managers and investment analysts appointed by EIPOC
and any other personnel EIPOC deems appropriate. The Committee will
also include two non-voting representatives from the Manager's Legal
Department appointed by the Manager's General Counsel. The
Committee's membership shall be limited to full-time employees of
the Manager. No person with any investment banking, trading, retail
brokerage or research responsibilities for the Manager's affiliates
may serve as a member of the Committee or participate in its
decision making (except to the extent such person is asked by the
Committee to present information to the Committee on the same basis
as other interested knowledgeable parties not affiliated with the
Manager might be asked to do so). The Committee determines how to
vote the proxies of all clients, including a Fund, that have
delegated proxy voting authority to the Manager and seeks to ensure
that all votes are consistent with the best interests of those
clients and are free from unwarranted and inappropriate influences.
The Committee establishes general proxy voting policies for the
Manager and is responsible for determining how those policies are
applied to specific proxy votes, in light of each issuer's unique
structure, management, strategic options and, in certain
circumstances, probable economic and other anticipated consequences
of alternate actions. In so doing, the Committee may determine to
vote a particular proxy in a manner contrary to its generally stated
policies. In addition, the Committee will be responsible for
ensuring that all reporting and recordkeeping requirements related
to proxy voting are fulfilled.
The Committee may determine that the subject matter of a recurring
proxy issue is not suitable for general voting policies and requires
a case-by-case determination. In such cases, the Committee may elect
not to adopt a specific voting policy applicable to that issue. The
Manager believes that certain proxy voting issues require investment
analysis - such as approval of mergers and other significant
corporate transactions - akin to investment decisions, and are,
therefore, not suitable for general guidelines. The Committee may
elect to adopt a common position for the Manager on certain proxy
votes that are akin to investment decisions, or determine to permit
the portfolio manager to make individual decisions on how best to
maximize economic value for a Fund (similar to normal buy/sell
investment decisions made by such portfolio managers). While it is
expected that the Manager will generally seek to vote proxies over
which the Manager exercises voting authority in a uniform manner for
all the Manager's clients, the Committee, in conjunction with a
Fund's portfolio manager, may determine that the Fund's specific
circumstances require that its proxies be voted differently.
To assist the Manager in voting proxies, the Committee has retained
Institutional Shareholder Services ("ISS"). ISS is an independent
adviser that specializes in providing a variety of fiduciary-level
proxy-related services to institutional investment managers, plan
sponsors, custodians, consultants, and other institutional
investors. The services provided to the Manager by ISS include in-
depth research, voting recommendations (although the Manager is not
obligated to follow such recommendations), vote execution, and
recordkeeping. ISS will also assist the Fund in fulfilling its
reporting and recordkeeping obligations under the Investment Company
Act.
The Manager's Proxy Voting Procedures also address special
circumstances that can arise in connection with proxy voting. For
instance, under the Proxy Voting Procedures, the Manager generally
will not seek to vote proxies related to portfolio securities that
are on loan, although it may do so under certain circumstances. In
addition, the Manager will vote proxies related to securities of
foreign issuers only on a best efforts basis and may elect not to
vote at all in certain countries where the Committee determines that
the costs associated with voting generally outweigh the benefits.
The Committee may at any time override these general policies if it
determines that such action is in the best interests of a Fund.
From time to time, the Manager may be required to vote proxies in
respect of an issuer where an affiliate of the Manager (each, an
"Affiliate"), or a money management or other client of the Manager,
including investment companies for which the Manager provides
investment advisory, administrative and/or other services (each, a
"Client"), is involved. The Proxy Voting Procedures and the
Manager's adherence to those procedures are designed to address such
conflicts of interest. The Committee intends to strictly adhere to
the Proxy Voting Procedures in all proxy matters, including matters
involving Affiliates and Clients. If, however, an issue representing
a non-routine matter that is material to an Affiliate or a widely
known Client is involved such that the Committee does not reasonably
believe it is able to follow its guidelines (or if the particular
proxy matter is not addressed by the guidelines) and vote
impartially, the Committee may, in its discretion for the purposes
of ensuring that an independent determination is reached, retain an
independent fiduciary to advise the Committee on how to vote or to
cast votes on behalf of the Manager's clients.
In the event that the Committee determines not to retain an
independent fiduciary, or it does not follow the advice of such an
independent fiduciary, the Committee may pass the voting power to a
subcommittee, appointed by EIPOC (with advice from the Secretary of
the Committee), consisting solely of Committee members selected by
EIPOC. EIPOC shall appoint to the subcommittee, where appropriate,
only persons whose job responsibilities do not include contact with
the Client and whose job evaluations would not be affected by the
Manager's relationship with the Client (or failure to retain such
relationship). The subcommittee shall determine whether and how to
vote all proxies on behalf of the Manager's clients or, if the proxy
matter is, in their judgment, akin to an investment decision, to
defer to the applicable portfolio managers, provided that, if the
subcommittee determines to alter the Manager's normal voting
guidelines or, on matters where the Manager's policy is case-by-
case, does not follow the voting recommendation of any proxy voting
service or other independent fiduciary that may be retained to
provide research or advice to the Manager on that matter, no proxies
relating to the Client may be voted unless the Secretary, or in the
Secretary's absence, the Assistant Secretary of the Committee
concurs that the subcommittee's determination is consistent with the
Manager's fiduciary duties.
In addition to the general principles outlined above, the Manager
has adopted voting guidelines with respect to certain recurring
proxy issues that are not expected to involve unusual circumstances.
These policies are guidelines only, and the Manager may elect to
vote differently from the recommendation set forth in a voting
guideline if the Committee determines that it is in a Fund's best
interest to do so. In addition, the guidelines may be reviewed at
any time upon the request of a Committee member and may be amended
or deleted upon the vote of a majority of Committee members present
at a Committee meeting at which there is a quorum.
The Manager has adopted specific voting guidelines with respect to
the following proxy issues:
* Proposals related to the composition of the board of directors of
issuers other than investment companies. As a general matter, the
Committee believes that a company's board of directors (rather than
shareholders) is most likely to have access to important, nonpublic
information regarding a company's business and prospects, and is,
therefore, best-positioned to set corporate policy and oversee
management. The Committee, therefore, believes that the foundation
of good corporate governance is the election of qualified,
independent corporate directors who are likely to diligently
represent the interests of shareholders and oversee management of
the corporation in a manner that will seek to maximize shareholder
value over time. In individual cases, the Committee may look at a
nominee's number of other directorships, history of representing
shareholder interests as a director of other companies or other
factors, to the extent the Committee deems relevant.
* Proposals related to the selection of an issuer's independent
auditors. As a general matter, the Committee believes that corporate
auditors have a responsibility to represent the interests of
shareholders and provide an independent view on the propriety of
financial reporting decisions of corporate management. While the
Committee will generally defer to a corporation's choice of auditor,
in individual cases, the Committee may look at an auditors' history
of representing shareholder interests as auditor of other companies,
to the extent the Committee deems relevant.
* Proposals related to management compensation and employee
benefits. As a general matter, the Committee favors disclosure of an
issuer's compensation and benefit policies and opposes excessive
compensation, but believes that compensation matters are normally
best determined by an issuer's board of directors, rather than
shareholders. Proposals to "micro-manage" an issuer's compensation
practices or to set arbitrary restrictions on compensation or
benefits will, therefore, generally not be supported.
* Proposals related to requests, principally from management, for
approval of amendments that would alter an issuer's capital
structure. As a general matter, the Committee will support requests
that enhance the rights of common shareholders and oppose requests
that appear to be unreasonably dilutive.
* Proposals related to requests for approval of amendments to an
issuer's charter or by-laws. As a general matter, the Committee
opposes poison pill provisions.
* Routine proposals related to requests regarding the formalities of
corporate meetings.
* Proposals related to proxy issues associated solely with holdings
of investment company shares. As with other types of companies, the
Committee believes that a fund's board of directors (rather than its
shareholders) is best positioned to set fund policy and oversee
management. However, the Committee opposes granting boards of
directors authority over certain matters, such as changes to a
fund's investment objective, which the Investment Company Act
envisions will be approved directly by shareholders.
* Proposals related to limiting corporate conduct in some manner
that relates to the shareholder's environmental or social concerns.
The Committee generally believes that annual shareholder meetings
are inappropriate forums for discussion of larger social issues, and
opposes shareholder resolutions "micromanaging" corporate conduct or
requesting release of information that would not help a shareholder
evaluate an investment in the corporation as an economic matter.
While the Committee is generally supportive of proposals to require
corporate disclosure of matters that seem relevant and material to
the economic interests of shareholders, the Committee is generally
not supportive of proposals to require disclosure of corporate
matters for other purposes.
Information about how a Fund voted proxies relating to securities
held in the Fund's portfolio during the most recent 12 month period
ended October 31 is available without charge (1) at
www.blackrock.com and (2) on the Commission's web site at
http://www.sec.gov.
Item 8 - Portfolio Managers of Closed-End Management Investment Companies -
as of October 31, 2006.
(a)(1) BlackRock MuniYield Pennsylvania Insured Fund is managed by a
team of investment professionals comprised of William R. Bock,
Director at BlackRock, Theodore R. Jaeckel, Jr., CFA, Managing
Director at BlackRock, and Walter O'Connor, Managing Director at
BlackRock. Each is a member of BlackRock's municipal tax-exempt
management group. Mr. Jaeckel and Mr. O'Connor are responsible for
setting the Fund's overall investment strategy and overseeing the
management of the Fund. Mr. Bock is the Fund's lead portfolio
manager and is responsible for the day-to-day management of the
Fund's portfolio and the selection of its investments. Messrs.
Jaeckel and O'Connor have been members of the Fund's management team
since 2006 and Mr. Bock has been the Fund's portfolio manager since
1997.
Mr. Jaeckel joined BlackRock in 2006. Prior to joining BlackRock, he
was a Managing Director (Municipal Tax-Exempt Fund Management) of
Merrill Lynch Investment Managers, L.P. ("MLIM") from 2005 to 2006
and a Director of MLIM from 1997 to 2005. He has been a portfolio
manager with BlackRock or MLIM since 1991.
Mr. O'Connor joined BlackRock in 2006. Prior to joining BlackRock,
he was a Managing Director (Municipal Tax-Exempt Fund Management) of
MLIM from 2003 to 2006 and was a Director of MLIM from 1997 to 2002.
He has been a portfolio manager with BlackRock or MLIM since 1991.
Mr. Bock joined BlackRock in 2006. Prior to joining BlackRock, he
was a Director (Municipal Tax-Exempt Fund Management) of MLIM from
2005 to 2006. He has been the portfolio manager with BlackRock or
MLIM since 1989.
(a)(2)As of October 31, 2006:
(iii) Number of Other Accounts and
(ii) Number of Other Accounts Managed Assets for Which Advisory Fee is
and Assets by Account Type Performance-Based
Other Other
(i) Name of Registered Other Pooled Registered Other Pooled
Portfolio Investment Investment Other Investment Investment Other
Manager Companies Vehicles Accounts Companies Vehicles Accounts
William R.
Bock 3 0 0 0 0 0
$ 2,285,519,677 $ 0 $ 0 $ 0 $ 0 $ 0
Theodore R.
Jaeckel, Jr. 82 0 0 0 0 0
$ 30,231,183,109 $ 0 $ 0 $ 0 $ 0 $ 0
Walter
O'Connor 82 0 0 0 0 0
$ 30,231,183,109 $ 0 $ 0 $ 0 $ 0 $ 0
(iv) Potential Material Conflicts of Interest
BlackRock has built a professional working environment, firm-wide
compliance culture and compliance procedures and systems designed to
protect against potential incentives that may favor one account over
another. BlackRock has adopted policies and procedures that address
the allocation of investment opportunities, execution of portfolio
transactions, personal trading by employees and other potential
conflicts of interest that are designed to ensure that all client
accounts are treated equitably over time. Nevertheless, BlackRock
furnishes investment management and advisory services to numerous
clients in addition to the Fund, and BlackRock may, consistent with
applicable law, make investment recommendations to other clients or
accounts (including accounts which are hedge funds or have
performance or higher fees paid to BlackRock, or in which portfolio
managers have a personal interest in the receipt of such fees),
which may be the same as or different from those made to the Fund.
In addition, BlackRock, its affiliates and any officer, director,
stockholder or employee may or may not have an interest in the
securities whose purchase and sale BlackRock recommends to the Fund.
BlackRock, or any of its affiliates, or any officer, director,
stockholder, employee or any member of their families may take
different actions than those recommended to the Fund by BlackRock
with respect to the same securities. Moreover, BlackRock may refrain
from rendering any advice or services concerning securities of
companies of which any of BlackRock's (or its affiliates') officers,
directors or employees are directors or officers, or companies as to
which BlackRock or any of its affiliates or the officers, directors
and employees of any of them has any substantial economic interest
or possesses material non-public information. Each portfolio manager
also may manage accounts whose investment strategies may at times be
opposed to the strategy utilized for the Fund. In this connection,
it should be noted that certain portfolio managers currently manage
certain accounts that are subject to performance fees. In addition,
certain portfolio managers assist in managing certain hedge funds
and may be entitled to receive a portion of any incentive fees
earned on such funds and a portion of such incentive fees may be
voluntarily or involuntarily deferred. Additional portfolio managers
may in the future manage other such accounts or funds and may be
entitled to receive incentive fees.
As a fiduciary, BlackRock owes a duty of loyalty to its clients and
must treat each client fairly. When BlackRock purchases or sells
securities for more than one account, the trades must be allocated
in a manner consistent with its fiduciary duties. BlackRock attempts
to allocate investments in a fair and equitable manner among client
accounts, with no account receiving preferential treatment. To this
end, BlackRock has adopted a policy that is intended to ensure that
investment opportunities are allocated fairly and equitably among
client accounts over time. This policy also seeks to achieve
reasonable efficiency in client transactions and provide BlackRock
with sufficient flexibility to allocate investments in a manner that
is consistent with the particular investment discipline and client
base.
(a)(3) As of October 31, 2006:
Portfolio Manager Compensation
The portfolio manager compensation program of BlackRock and its affiliates,
including the Investment Adviser, is critical to BlackRock's ability to attract
and retain the most talented asset management professionals. This program
ensures that compensation is aligned with maximizing investment returns and it
provides a competitive pay opportunity for competitive performance.
Compensation Program
The elements of total compensation for certain BlackRock and its affiliates
portfolio managers are a fixed base salary, annual performance-based cash and
stock compensation (cash and stock bonus) and other benefits. BlackRock has
balanced these components of pay to provide portfolio managers with a powerful
incentive to achieve consistently superior investment performance. By design,
portfolio manager compensation levels fluctuate--both up and down--with the
relative investment performance of the portfolios that they manage.
Base Salary
Under the BlackRock approach, like that of many asset management firms,
base salaries represent a relatively small portion of a portfolio manager's
total compensation. This approach serves to enhance the motivational value of
the performance-based (and therefore variable) compensation elements of the
compensation program.
Performance-Based Compensation
BlackRock believes that the best interests of investors are served by
recruiting and retaining exceptional asset management talent and managing their
compensation within a consistent and disciplined framework that emphasizes pay
for performance in the context of an intensely competitive market for talent.
To that end, certain BlackRock and its affiliates portfolio manager incentive
compensation is based on a formulaic compensation program.
BlackRock's formulaic portfolio manager compensation program includes:
investment performance relative to a subset of general closed-end, Pennsylvania
municipal debt funds over 1-, 3- and 5-year performance periods and a measure
of operational efficiency. Portfolio managers are compensated based on the pre-
tax performance of the products they manage. If a portfolio manager's tenure is
less than 5-years, performance periods will reflect time in position. Portfolio
managers are compensated based on the products they manage. A discretionary
element of portfolio manager compensation may include consideration of:
financial results, expense control, profit margins, strategic planning and
implementation, quality of client service, market share, corporate reputation,
capital allocation, compliance and risk control, leadership, workforce
diversity, supervision, technology and innovation. All factors are considered
collectively by BlackRock management.
Cash Bonus
Performance-based compensation is distributed to portfolio managers in a
combination of cash and stock. Typically, the cash bonus, when combined with
base salary, represents more than 60% of total compensation for portfolio
managers.
Stock Bonus
A portion of the dollar value of the total annual performance-based bonus
is paid in restricted shares of BlackRock stock. Paying a portion of annual
bonuses in stock puts compensation earned by a portfolio manager for a given
year "at risk" based on the Company's ability to sustain and improve its
performance over future periods.
The ultimate value of stock bonuses is dependent on future BlackRock stock
price performance. As such, the stock bonus aligns each portfolio manager's
financial interests with those of BlackRock shareholders and encourages a
balance between short-term goals and long-term strategic objectives. Management
strongly believes that providing a significant portion of competitive
performance-based compensation in stock is in the best interests of investors
and shareholders. This approach ensures that portfolio managers participate as
shareholders in both the "downside risk" and "upside opportunity" of the
Company's performance. Portfolio managers therefore have a direct incentive to
protect BlackRock's reputation for integrity.
Other Compensation Programs
Portfolio managers who meet relative investment performance and financial
management objectives during a performance year are eligible to participate in
a deferred cash program. Awards under this program are in the form of deferred
cash that may be benchmarked to a menu of certain BlackRock mutual funds
(including their own funds) during a five-year vesting period. The deferred
cash program aligns the interests of participating portfolio managers with the
investment results of BlackRock products and promotes continuity of successful
portfolio management teams.
Other Benefits
Portfolio managers are also eligible to participate in broad-based plans
offered generally to BlackRock employees, including broad-based retirement,
401(k), health, and other employee benefit plans.
(a)(4) Beneficial Ownership of Securities. As of October 31, 2006,
neither of Messrs. Bock, Jaeckel and O'Connor beneficially
owns any stock issued by the Fund.
Item 9 - Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers - Not Applicable
Item 10 - Submission of Matters to a Vote of Security Holders - Not Applicable
Item 11 - Controls and Procedures
11(a) - The Registrant's principal executive and principal financial
officers have evaluated the Registrant's disclosure controls and
procedures, including internal control over financial reporting,
within 90 days of this filing. Such principal officers have
concluded that the Registrant's disclosure controls and procedures
were effective in design and operation to reasonably ensure that
information required to be disclosed by the Registrant in this Form
N-CSR was recorded, processed, summarized, and reported within the
required time periods, and were sufficient to form the basis of the
certifications required by Rule 30a-(2) of the Investment Company
Act of 1940, as amended. Prior to reaching that conclusion, such
principal officers had become aware of matters relating to the
Registrant's participation in certain inverse floater structures
that necessitated adjustments to financial information included in
Item 1 of this filing. As a result, management of the Registrant has
reevaluated certain disclosure controls and procedures determined
not to be effective, as discussed more fully below.
Management of the Registrant is responsible for establishing and
maintaining effective internal control over financial reporting. In
fulfilling this responsibility, estimates and judgments by
management are required to assess the expected benefits and related
costs of controls. The Registrant's internal control over financial
reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with
U.S. generally accepted accounting principles. Such internal
control includes policies and procedures that provide reasonable
assurance regarding prevention or timely detection of unauthorized
acquisition, use or disposition of a registrant's assets that could
have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial
reporting may not prevent or detect misstatements. Also, projections
of any evaluation of effectiveness to future periods are subject to
the risk that controls may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or
procedures may deteriorate.
A control deficiency exists when the design or operation of a
control does not allow management or employees, in the normal course
of performing their assigned functions, to prevent or detect
misstatements on a timely basis. A significant deficiency is a
control deficiency, or combination of control deficiencies, that
adversely affects the Registrant's ability to initiate, authorize,
record, process or report financial data reliably in accordance with
generally accepted accounting principles such that there is more
than a remote likelihood that a misstatement of the Registrant's
annual or interim financial statements that is more than
inconsequential will not be prevented or detected. A material
weakness is a significant deficiency, or combination of significant
deficiencies, that results in more than a remote likelihood that a
material misstatement of the annual or interim financial statements
will not be prevented or detected.
Prior to the filing of this Form N-CSR, the Registrant identified
the following control deficiency, that was determined to be a
material weakness, as defined above, in the Registrant's internal
control over financial reporting. The Registrant's controls related
to the review and analysis of relevant terms and conditions of
transfers of certain assets pertaining to inverse floater structures
were not operating effectively to appropriately determine whether
the transfers of assets qualified for sale accounting under the
provisions of Statement of Financial Accounting Standards No. 140,
"Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities" ("SFAS 140"). Accordingly, the
Registrant's financial statements as of and for the period ended
October 31, 2006, including prior periods where applicable, were
adjusted prior to being issued to appropriately reflect transfers of
such securities as secured borrowings and to report the related
income and expense. These adjustments had no impact on net assets,
net asset value per share or total return.
Management of the Registrant believes that subsequent to the
adjustments, the Registrant's accounting treatment of such transfers
is appropriate under SFAS 140. Additionally, management of the
Registrant is taking such further actions as are necessary to
enhance its internal control over financial reporting, and in doing
so, increase the effectiveness of such controls, so that such
transfers of assets are reviewed and evaluated appropriately under
the provisions of SFAS 140.
11(b) - There have been no changes in the Registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the
Investment Company Act of 1940, as amended) that occurred during the
second half of the Registrant's fiscal year that have materially
affected, or are reasonably likely to materially affect, the
Registrant's internal control over financial reporting. However, as
discussed above, subsequent to October 31, 2006, the Registrant is
further enhancing controls related to the application of SFAS 140.
Item 12 - Exhibits attached hereto
12(a)(1) - Code of Ethics - See Item 2
12(a)(2) - Certifications - Attached hereto
12(a)(3) - Not Applicable
12(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.
BlackRock MuniYield Pennsylvania Insured Fund
By: /s/ Robert C. Doll, Jr.
-----------------------
Robert C. Doll, Jr.,
Chief Executive Officer of
BlackRock MuniYield Pennsylvania Insured Fund
Date: January 18, 2007
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/ Robert C. Doll, Jr.
-----------------------
Robert C. Doll, Jr.,
Chief Executive Officer of
BlackRock MuniYield Pennsylvania Insured Fund
Date: January 18, 2007
By: /s/ Donald C. Burke
-----------------------
Donald C. Burke,
Chief Financial Officer of
BlackRock MuniYield Pennsylvania Insured Fund
Date: January 18, 2007