UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM N-Q

 

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANY

 

 

Investment Company Act file number 811-06499

 

Name of Fund:  BlackRock MuniYield California Fund, Inc. (MYC)

 

Fund Address:   100 Bellevue Parkway, Wilmington, DE 19809

 

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

 

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

 

Date of fiscal year end: 07/31/2015

 

Date of reporting period: 10/31/2014

 

Item 1 – Schedule of Investments


  
 
Schedule of Investments October 31, 2014 (Unaudited) BlackRock MuniYield California Fund, Inc. (MYC)
  (Percentages shown are based on Net Assets)

 

Municipal Bonds Par
(000)		   Value  
 

California — 101.0%

Corporate — 1.7%  
City of Chula Vista California, Refunding RB, San Diego Gas & Electric:          
  Series A, 5.88%, 2/15/34 $ 975 $ 1,161,264  
  Series D, 5.88%, 1/01/34   4,000   4,764,160  
   
    5,925,424  
County/City/Special District/School District — 36.3%  
Campbell Union High School District, GO, Election of 2006, Series C, 5.75%, 8/01/40   4,000   4,777,200  
City of Los Angeles California, COP, Senior, Sonnenblick Del Rio West Los Angeles (AMBAC), 6.20%, 11/01/31   2,000   2,008,620  
City of Los Angeles California Municipal Improvement Corp., RB, Real Property, Series E, 6.00%, 9/01/34   2,635   3,125,321  
City of San Jose California Hotel Tax, RB, Convention Center Expansion & Renovation Project:          
  6.50%, 5/01/36   1,520   1,877,534  
  6.50%, 5/01/42   1,860   2,277,533  
County of San Joaquin California Transportation Authority, Refunding RB, Limited Tax, Measure K, Series A, 6.00%, 3/01/36   2,440   2,996,613  
County of Santa Clara California Financing Authority, Refunding LRB, Series L, 5.25%, 5/15/36   16,000   17,780,160  
El Monte Union High School District, GO, Election of 2002, Series C, 5.25%, 6/01/32   9,620   10,725,338  
Garden Grove Unified School District, GO, Election of 2010, Series C, 5.25%, 8/01/40   5,500   6,358,825  
Grossmont Healthcare District, GO, Election of 2006, Series B, 6.13%, 7/15/40   2,000   2,479,800  
Los Angeles Community College District California, GO:          
  Election of 2003, Series E (AGM), 5.00%, 8/01/31   10,000   10,683,700  
  Election of 2008, Series C, 5.25%, 8/01/39   7,485   8,673,468  
Los Angeles Municipal Improvement Corp., RB, Real Property, Series E, 5.75%, 9/01/34   1,215   1,420,408  
Municipal Bonds Par
(000)		   Value  
 

California (continued)

County/City/Special District/School District (concluded)  
Los Rios Community College District, GO, Election of 2002, Series D, 5.38%, 8/01/34 $ 4,625 $ 5,338,267  
Norris School District, GO, Election of 2012, Series B, 5.25%, 11/01/40   3,110   3,579,206  
Oak Grove School District California, GO, Election of 2008, Series A, 5.50%, 8/01/33   4,000   4,659,240  
Ohlone Community College District, GO, Election of 2010, Series A, 5.25%, 8/01/41   7,135   8,048,637  
Pico Rivera Public Financing Authority, RB, 5.75%, 9/01/39   6,035   6,727,395  
Riverside Community Properties Development, Inc., RB, Riverside County Law Building Project, 6.00%, 10/15/38   5,000   5,966,500  
San Diego Regional Building Authority, RB, County Operations Center & Annex, Series A, 5.38%, 2/01/36   4,100   4,702,700  
San Francisco Bay Area Rapid Transit District, Refunding RB, Series A (NPFGC), 5.00%, 7/01/34   4,935   5,081,076  
Santa Ana Unified School District, GO, Election of 2008, Series A, 5.13%, 8/01/33   6,210   6,978,612  
West Contra Costa California Unified School District, GO, Election of 2012, Series A, 5.50%, 8/01/39   2,500   2,912,850  
   
    129,179,003  
Education — 8.3%  
California Educational Facilities Authority, Refunding RB:          
  Pitzer College, 6.00%, 4/01/40   2,500   2,979,750  
  San Francisco University, 6.13%, 10/01/36   1,745   2,132,058  
California Municipal Finance Authority, RB, Emerson College, 6.00%, 1/01/42   2,750   3,203,118  
California School Finance Authority, RB:          
  Alliance College-Ready Public Schools - 2023 Union LLC Project, Series A, 6.00%, 7/01/33   1,500   1,680,465  


BLACKROCK MUNIYIELD CALIFORNIA FUND, INC.OCTOBER 31, 2014          1
 
Schedule of Investments (continued) BlackRock MuniYield California Fund, Inc. (MYC)
  (Percentages shown are based on Net Assets)

 

Municipal Bonds Par
(000)		   Value  
 

California (continued)

Education (concluded)  
California School Finance Authority, RB (concluded):          
  Alliance College-Ready Public Schools - 2023 Union LLC Project, Series A, 6.30%, 7/01/43 $ 3,000 $ 3,402,210  
  Value Schools, 6.65%, 7/01/33   595   646,741  
  Value Schools, 6.90%, 7/01/43   1,330   1,455,911  
University of California, RB, Series AM, 5.25%, 5/15/44   11,950   13,939,317  
   
    29,439,570  
Health — 18.3%  
ABAG Finance Authority for Nonprofit Corps., Refunding RB, Sharp Healthcare, Series A, 6.00%, 8/01/30   2,270   2,785,880  
California Health Facilities Financing Authority, RB:          
  Children's Hospital, Series A, 5.25%, 11/01/41   11,090   12,249,459  
  St. Joseph Health System, Series A, 5.75%, 7/01/39   1,000   1,164,330  
  Sutter Health, Series A (BHAC), 5.00%, 11/15/42   10,000   10,725,300  
  Sutter Health, Series B, 6.00%, 8/15/42   7,530   9,104,372  
California Health Facilities Financing Authority, Refunding RB:          
  Catholic Healthcare West, Series A, 6.00%, 7/01/39   10,000   11,690,800  
  Stanford Hospital and Clinics, Series A-2, 5.25%, 11/15/40   2,500   2,913,125  
California Statewide Communities Development Authority, RB:          
  Kaiser Permanente, Series B, 5.25%, 3/01/45   2,590   2,672,725  
  Sutter Health, Series A, 6.00%, 8/15/42   7,995   9,666,595  
Municipal Bonds Par
(000)		   Value  
 

California (continued)

Health (concluded)  
Washington Township Health Care District, GO, Series B, 5.50%, 8/01/38 $ 1,625 $ 1,949,399  
   
    64,921,985  
Housing — 1.0%  
County of Santa Clara California Housing Authority, RB, John Burns Gardens Apartments Project, Series A, AMT, 6.00%, 8/01/41   3,500   3,502,485  
State — 11.8%  
State of California, GO, Various Purposes:          
  6.00%, 4/01/38   13,575   16,265,972  
  6.00%, 11/01/39   3,355   4,086,893  
State of California Public Works Board, LRB:          
  Department of Developmental Services, Poterville, Series C, 6.25%, 4/01/34   1,505   1,814,759  
  Department of Education, Riverside Campus Project, Series B, 6.50%, 4/01/34   10,000   12,164,900  
  Trustees of the California State University, Series D, 6.00%, 4/01/27   215   257,998  
  Various Capital Project, Sub-Series I-1, 6.38%, 11/01/34   4,400   5,433,516  
  Various Capital Projects, Series I, 5.50%, 11/01/33   1,510   1,821,830  
   
    41,845,868  
Tobacco — 1.5%  
Golden State Tobacco Securitization Corp., Refunding RB, Asset Backed, Senior, Series A-1, 5.75%, 6/01/47   6,525   5,300,323  
Transportation — 9.4%  
City & County of San Francisco California Airports Commission, ARB, Series E, 6.00%, 5/01/39   5,215   6,201,730  
City & County of San Francisco California Airports Commission, Refunding ARB, 2nd Series A, AMT, 5.25%, 5/01/33   1,440   1,650,096  


BLACKROCK MUNIYIELD CALIFORNIA FUND, INC.OCTOBER 31, 2014          2
 
Schedule of Investments (continued) BlackRock MuniYield California Fund, Inc. (MYC)
  (Percentages shown are based on Net Assets)

 

Municipal Bonds Par
(000)		   Value  
 

California (continued)

Transportation (concluded)  
City of Los Angeles California Department of Airports, Refunding ARB, Los Angeles International Airport, Series A:          
  5.25%, 5/15/39 $ 3,605 $ 4,121,561  
  Senior, 5.00%, 5/15/40   3,750   4,266,600  
City of San Jose California, RB, Series A-1, AMT (AGM):          
  5.50%, 3/01/30   1,000   1,133,310  
  5.75%, 3/01/34   1,000   1,148,180  
City of San Jose California, Refunding ARB, Series A-1, AMT, 6.25%, 3/01/34   1,400   1,643,838  
County of Orange California, ARB, Series B, 5.75%, 7/01/34   3,000   3,354,210  
County of Sacramento California, ARB:          
  PFC/Grant, Sub-Series D, 6.00%, 7/01/35   3,000   3,441,660  
  Senior Series B, 5.75%, 7/01/39   900   1,025,244  
San Francisco Port Commission California, RB, Series A, 5.13%, 3/01/40   5,075   5,493,332  
   
    33,479,761  
Utilities — 12.7%  
City of Los Angeles California Department of Water & Power, Refunding RB, Series A, 5.25%, 7/01/39   4,000   4,510,280  
City of Petaluma California Wastewater, Refunding RB, 6.00%, 5/01/36   2,645   3,220,235  
Dublin-San Ramon Services District, Refunding RB, 6.00%, 8/01/41   2,420   2,932,120  
Eastern Municipal Water District, COP, Series H, 5.00%, 7/01/35   8,430   9,411,589  
Los Angeles Department of Water & Power, RB, Power System, Sub-Series A-1, 5.25%, 7/01/38   3,035   3,415,255  
Metropolitan Water District of Southern California, RB, Series A, 5.00%, 7/01/37   5,595   6,169,159  
Oceanside Public Financing Authority, Refunding RB, Series A:          
  5.25%, 5/01/30   1,245   1,474,304  
  5.25%, 5/01/33   2,810   3,292,758  
Municipal Bonds Par
(000)		   Value  
 

California (concluded)

Utilities (concluded)  
San Diego Public Facilities Financing Authority, Refunding RB, Senior Series A, 5.38%, 5/15/34 $ 3,920 $ 4,541,712  
San Diego Public Facilities Financing Authority Sewer, Refunding RB, Senior Series A, 5.25%, 5/15/34   3,070   3,532,956  
San Francisco City & County California Public Utilities Commission, Refunding RB, Series A, 5.13%, 11/01/39   2,480   2,851,653  
   
    45,352,021  
Total Municipal Bonds — 101.0%   358,946,440  
 
 
Municipal Bonds Transferred to Tender Option Bond (TOB) Trusts (a)  
 

California — 49.4%

County/City/Special District/School District — 21.4%  
City of Los Angeles California, Refunding RB, Series A, 5.00%, 6/01/39   9,870   11,141,256  
Los Angeles Community College District California, GO:          
  Election of 2001, Series E-1, 5.00%, 8/01/33   14,850   16,655,315  
  Election of 2008, Series C, 5.25%, 8/01/39 (b)   9,680   11,217,184  
Los Angeles Community College District California, GO, Refunding, Series A, 6.00%, 8/01/33   3,828   4,623,369  
San Diego Community College District California, GO, Election of 2002, 5.25%, 8/01/33   7,732   8,953,672  
San Francisco Bay Area Rapid Transit District, Refunding RB, Series A (NPFGC), 5.00%, 7/01/30   6,000   6,180,660  


BLACKROCK MUNIYIELD CALIFORNIA FUND, INC.OCTOBER 31, 2014          3
 
Schedule of Investments (continued) BlackRock MuniYield California Fund, Inc. (MYC)
  (Percentages shown are based on Net Assets)

 

Municipal Bonds Transferred to Tender Option Bond (TOB) Trusts (a) Par
(000)		   Value  
 

California (continued)

County/City/Special District/School District (concluded)  
San Marcos Unified School District, GO, Election of 2010, Series A, 5.00%, 8/01/38 $ 15,520 $ 17,223,010  
   
    75,994,466  
Education — 11.4%  
California Educational Facilities Authority, RB, University of Southern California, Series B, 5.25%, 10/01/39 (b)   13,845   15,660,218  
University of California, RB:          
  Series L, 5.00%, 5/15/36   8,500   9,084,120  
  Series L, 5.00%, 5/15/40   11,597   12,393,863  
  Series O, 5.75%, 5/15/34   2,805   3,298,390  
   
    40,436,591  
Utilities — 16.6%  
Eastern Municipal Water District, COP, Series H, 5.00%, 7/01/33   4,748   5,301,024  
Los Angeles Department of Water & Power, RB, Power System:          
  Sub-Series A-1 (AMBAC), 5.00%, 7/01/37   15,098   16,484,315  
  Sub-Series A-2 (AGM), 5.00%, 7/01/35   7,250   7,741,188  
Metropolitan Water District of Southern California, RB:          
  Series A, 5.00%, 7/01/37   20,000   22,052,400  
  Series C, 5.00%, 7/01/35   7,145   7,576,894  
   
    59,155,821  
Total Municipal Bonds Transferred to Tender Option Bond (TOB) Trusts — 49.4%   175,586,878  
Total Long-Term Investments
(Cost — $481,904,099) — 150.4%		   534,533,318  

 

Short-Term Securities

 Shares   Value  
 

California (concluded)

Money Market — 0.5%        
BIF California Municipal Money Fund, 0.00% (c)(d)   1,834,578 $ 1,834,578  
 
 
Short-Term Securities – 0.5%

Par

(000)

      
California School Cash Reserve Program Authority, RB, Series G, 2.00%, 2/27/15 $ 1,665   1,673,254  
Total Short-Term Securities
(Cost — $3,507,832) — 1.0%		   3,507,832  
Total Investments
(Cost — $485,411,931*) — 151.4%		   538,041,150  
Other Assets Less Liabilities — 1.8%   6,590,293  
Liability for TOB Trust Certificates, Including Interest Expense and Fees Payable — (23.4%)   (83,297,714 )
VRDP Shares, at Liquidation Value — (29.8%)   (105,900,000 )
   
Net Assets Applicable to Common Shares — 100.0% $ 355,433,729  
   
             

 

* As of October 31, 2014, gross unrealized appreciation and depreciation based on cost for federal income tax purposes were as follows:

  
Tax cost $ 402,115,087  
       
Gross unrealized appreciation $ 52,629,219  
Gross unrealized depreciation   (13,552 )
       
Net unrealized appreciation $ 52,615,667  
       
         


Notes to Schedule of Investments

(a) Represent bonds transferred to a TOB. In exchange for which the Fund received cash and residual interest certificates. These bonds serve as collateral in a financing transaction.
(b) All or a portion of security is subject to a recourse agreement, which may require the Fund to pay the liquidity provider in the event there is a shortfall between the TOB trust certificates and proceeds received from the sale of the security contributed to the TOB trust. In the case of a shortfall, the aggregate maximum potential amount the Fund could ultimately be required to pay under the agreement, which expire from October 1, 2016 to August 1, 2018 is $14,709,685.

 

 

BLACKROCK MUNIYIELD CALIFORNIA FUND, INC.OCTOBER 31, 2014          4
 
Schedule of Investments (continued) BlackRock MuniYield California Fund, Inc. (MYC)

 

(c) Investments in issuers considered to be an affiliate of the Fund during the period ended October 31, 2014, for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:
 
  Affiliate   Shares
Held at
July 31, 2014		   Net
Activity		   Shares
Held at
October 31, 2014		   Income  
 
  BIF California Municipal Money Fund   1,241,527   593,051   1,834,578   —  
 
                                           
(d) Represents the current yield as of report date.
   

 

Portfolio Abbreviations

   
AGM Assured Guaranty Municipal Corp.
AMBAC American Municipal Bond Assurance Corp.
AMT Alternative Minimum Tax (subject to)
ARB Airport Revenue Bonds
BHAC Berkshire Hathaway Assurance Corp.
COP Certificates of Participation
GO General Obligation Bonds
LRB Lease Revenue Bonds
NPFGC National Public Finance Guarantee Corp.
RB Revenue Bonds
     
• Financial futures contracts outstanding as of October 31, 2014 were as follows:  
Contracts
Sold		 Issue Exchange Expiration Notional
Value		   Unrealized
Depreciation		  
(220) 10-Year U.S. Treasury Note Chicago Board of Trade December
2014		 $ 27,799,063 $ (168,746)  
                 
•

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

 

 
• Fair Value Measurements -  Various inputs are used in determining the fair value of investments and derivative financial instruments. These inputs to valuation techniques are categorized into a disclosure hierarchy consisting of three broad levels for financial reporting] purposes. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the fair value hierarchy classification is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The categorization of a value determined for investments and derivative financial instruments is based on the pricing transparency of the investment and derivative financial instrument and is not necessarily an indication of the risks associated with investing in those securities. The three levels of the fair value hierarchy are as follows:

  • Level 1 — unadjusted quoted prices in active markets/exchanges for identical assets or liabilities that the Fund has the ability to access
 
  • Level 2 — other observable inputs (including, but not limited to, quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs)
 
  • Level 3 — unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the Fund’s own assumptions used in determining the fair value of investments and derivative financial instruments)

 

BLACKROCK MUNIYIELD CALIFORNIA FUND, INC.OCTOBER 31, 2014          5
 
Schedule of Investments (concluded) BlackRock MuniYield California Fund, Inc. (MYC)

 

Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. In accordance with the Fund's policy, transfers between different levels of the fair value disclosure hierarchy are deemed to have occurred as of the beginning of the reporting period. For information about the Fund’s policy regarding valuation of investments and derivative financial instruments, please refer to the Fund’s most recent financial statements as contained in its annual report.


The following tables summarize the Fund's investments and derivative financial instruments categorized in the disclosure hierarchy as of October 31, 2014:

   

 

 
  Level 1   Level 2   Level 3   Total  
 
Assets:    
Investments:  
  Municipal Bonds 1   — $ 534,533,318   — $ 534,533,318  
  Short-Term Securities $ 1,834,578   1,673,254   —   3,507,832  
Total $ 1,834,578 $ 536,206,572   — $ 538,041,150  
1 See above Schedule of Investments for values in each sector.
   
 
  Level 1   Level 2   Level 3   Total  
 
Derivative Financial Instruments 2  
Liabilities:  
Interest rate contracts $ (168,746 ) —   — $ (168,746 )

 

2 Derivative financial instruments are financial futures contracts, which are valued at the unrealized appreciation/depreciation on the instrument.
 
The Fund may hold assets and/or liabilities in which the fair value approximates the carrying amount for financial reporting purposes. As of October 31, 2014, such assets and/or liabilities are categorized within the disclosure hierarchy as follows:
  

 

 
  Level 1   Level 2   Level 3   Total  
 
Assets:    
  Cash pledged for financial futures contracts $ 302,000   —   — $ 302,000  
Liabilities:    
  TOB trust certificates   — $ (83,283,292 ) —   (83,283,292 )
  VRDP Shares   —   (105,900,000 ) —   (105,900,000 )
Total $ 302,000 $ (189,183,292 ) — $ (188,881,292 )
                                   
There were no transfers between levels during the period ended October 31, 2014.

 

 

BLACKROCK MUNIYIELD CALIFORNIA FUND, INC.OCTOBER 31, 2014          6
 

Item 2 – Controls and Procedures

2(a) – The registrant's principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the ″1940 Act″)) are effective as of a date within 90 days of the filing of this report based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended.
   
2(b) – There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the registrant's last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting.
   
Item 3 – Exhibits
   
Certifications – Attached hereto
   
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

  BlackRock MuniYield California Fund, Inc.
   
  By: /s/ John M. Perlowski
    John M. Perlowski
    Chief Executive Officer (principal executive officer) of
    BlackRock MuniYield California Fund, Inc.

 

  Date: December 23, 2014
   
  Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

  By: /s/ John M. Perlowski
    John M. Perlowski
    Chief Executive Officer (principal executive officer) of
    BlackRock MuniYield California Fund, Inc.
   
  Date: December 23, 2014
   
  By: /s/ Neal J. Andrews
    Neal J. Andrews
    Chief Financial Officer (principal financial officer) of
    BlackRock MuniYield California Fund, Inc.
   
  Date: December 23, 2014