UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSRS
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-08621
Name of Fund: BlackRock MuniHoldings New Jersey Insured Fund, Inc.
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 MuniHoldings New Jersey Insured Fund, Inc., 800
Scudders Mill Road, Plainsboro, NJ, 08536. Mailing address: P.O. Box
9011, Princeton, NJ, 08543-9011
Registrant's telephone number, including area code: (609) 282-2800
Date of fiscal year end: 07/31/07
Date of reporting period: 08/01/06 - 01/31/07
Item 1 - Report to Stockholders
ALTERNATIVES BLACKROCK SOLUTIONS EQUITIES FIXED INCOME LIQUIDITY
REAL ESTATE
Semi-Annual Reports
(Unaudited)
JANUARY 31, 2007
BlackRock MuniHoldings Fund II, Inc.
BlackRock MuniHoldings New Jersey Insured Fund, Inc.
(BLACKROCK logo)
NOT FDIC INSURED
MAY LOSE VALUE
NO BANK GUARANTEE
These reports, including the financial information herein, are transmitted to
shareholders of BlackRock MuniHoldings Fund II, Inc. and BlackRock MuniHoldings
New Jersey Insured Fund, Inc. 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
Stock and intend to remain leveraged by issuing Preferred Stock to provide the
Common Stock shareholders with a potentially higher rate of return. Leverage
creates risks for Common Stock shareholders, including the likelihood of
greater volatility of net asset value and market price of shares of the Common
Stock, and the risk that fluctuations in the short-term dividend rates of the
Preferred Stock may affect the yield to Common Stock shareholders. Statements
and other information herein are as dated and are subject to change.
A description of the policies and procedures that the 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 Securitiesand Exchange Commission's Web site
at http://www.sec.gov. Information about how the Funds voted 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 MuniHolidngs Fund II, Inc.
BlackRock MuniHoldings New Jersey Insured Fund, Inc.
P.O. Box 9011
Princeton, NJ 08543-9011
(GO PAPERLESS... logo)
It's Fast, Convenient, & Timely!
BlackRock MuniHoldings Fund II, Inc.
BlackRock MuniHoldings New Jersey Insured Fund, Inc.
Quality Profiles as of January 31, 2007
Percent of
BlackRock MuniHoldings Fund II, Inc. Total
By S&P/Moody's Rating Investments
AAA/Aaa 44.3%
AA/Aa 9.2
A/A 12.8
BBB/Baa 13.7
BB/Ba 0.5
B/B 0.8
CCC/Caa 2.6
NR (Not Rated) 15.3
Other* 0.8
* Includes portfolio holdings in short-term investments and
variable rate demand notes.
BlackRock MuniHoldings New Jersey Percent of
Insured Fund, Inc. Total
By S&P/Moody's Rating Investments
AAA/Aaa 88.0%
AA/Aa 2.6
A/A 3.6
BBB/Baa 3.8
BB/Ba 0.4
Other* 1.6
* Includes portfolio holdings in short-term investments.
Announcement of Annual Stockholders Meeting
The Funds have determined that their annual stockholders meeting originally
scheduled to be held in April 2007 will be postponed and will be held in
September 2007. Proposals of stockholders intended to be presented at the
meeting must be received by the Funds by May 15, 2007 for inclusion in each
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 July 1, 2007. Written Proposals
and notices should be sent to the Secretary of the Fund, 800 Scudders Mill
Road, Plainsboro, New Jersey 08536.
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.
SEMI-ANNUAL REPORTS JANUARY 31, 2007
A Letter to Shareholders
Dear Shareholder
The new year began on a positive note for most financial markets, continuing
the momentum from the fourth quarter of 2006. Returns for the annual and semi-
annual periods ended January 31, 2007 were as follows:
Total Returns as of January 31, 2007 6-month 12-month
U.S. equities (Standard & Poor's 500 Index) +13.75% +14.51%
Small cap U.S. equities (Russell 2000 Index) +14.95 +10.44
International equities (MSCI Europe, Australasia, Far East Index) +14.33 +19.84
Fixed income (Lehman Brothers Aggregate Bond Index) + 3.65 + 4.28
Tax-exempt fixed income (Lehman Brothers Municipal Bond Index) + 3.06 + 4.29
High yield bonds (Credit Suisse High Yield Index) + 8.45 +11.76
After raising the target short-term interest rate 17 times between June 2004
and June 2006, the Federal Reserve Board (the Fed) finally opted to pause on
August 8, 2006. This left the target rate at 5.25%, where it remained through
period-end. In interrupting its interest rate-hiking campaign, the Fed
initially acknowledged that economic growth was slowing, but maintained a
cautionary view on inflation. Most recently, the central bankers have pointed
to a firming in economic data and moderation in inflation, causing many to
believe the Fed will likely remain on hold for the time being.
Overall, 2006 was a good year for U.S. equities, despite a mid-year correction
that was largely triggered by rising interest rates, inflation fears, elevated
oil prices and geopolitical uncertainties. Nevertheless, strong corporate
earnings, abundant liquidity and record merger-and-acquisition activity
provided a solid backdrop for stocks. Many international markets (with the
notable exception of Japan) performed even better, outpacing U.S. stocks for
the fifth consecutive year. European equities and select emerging markets
fared particularly well. This broad equity strength carried into January.
For much of 2006, bond yields moved higher as their prices declined. Prices
began to improve (yields fell) in the summer as the economy showed signs of
weakening and the Fed paused. Notably, the Treasury curve remained inverted
for much of 2006 and into 2007. The 30-year Treasury yield stood at 4.93% at
January 31, 2007, while the six-month Treasury offered the highest yield on
the curve at 5.16% - both still below the federal funds rate.
As 2007 began, investors were left with a few key questions: Will the U.S.
economy achieve a soft landing, will the Fed reverse its prior policy and cut
interest rates, and how might these outcomes impact the investment climate. As
you navigate these and other uncertainties inherent in the financial markets,
we encourage you to review your investment goals with your financial
professional and to make portfolio changes, as needed. For more reflection on
2006 and our 10 predictions for 2007, please ask your financial professional
for a copy of "What's Ahead in 2007: An Investment Perspective," or view it
online at www.blackrock.com/funds. We thank you for trusting BlackRock with
your investment assets, and we look forward to continuing to serve you in the
months and years ahead.
Sincerely,
(Robert C. Doll, Jr.)
Robert C. Doll, Jr.
Fund President and Director
SEMI-ANNUAL REPORTS JANUARY 31, 2007
A Discussion With Your Fund's Portfolio Managers
Portfolio activity was centered on maintenance of a neutral investment posture
and competitive yield amid the prevailing low interest rate environment.
Describe the recent market environment relative to municipal bonds.
Long-term bond yields moved slightly lower during the past six months as their
prices, which move in the opposite direction, increased. The municipal
market's strong technical position allowed municipal bond yields to decline
more than taxable yields.
The strength in bond prices came amid a slowdown in U.S. economic growth and
the Federal Reserve Board's (the Fed) decision at its August 8, 2006 meeting
to refrain from raising its target interest rate after 17 consecutive
increases since June 2004. Bond prices found additional support in moderating
oil prices. By November 30, 2006, 30-year Treasury bond yields had declined 51
basis points (.51%) to 4.56%. However, stronger-than-expected economic
releases and year-end profit taking pushed yields higher during December and
January. For the six-month period overall, 30-year U.S. Treasury bond yields
fell 14 basis points to 4.93% and 10-year Treasury note yields declined 16
basis points to 4.83%.
By and large, the tax-exempt bond market outperformed comparable U.S. Treasury
issues as investor demand for municipal product outstripped a resurgent new-
issue calendar. For the six months ended January 31, 2007, as reported by
Municipal Market Data, yields on 30-year, AAA-rated municipal issues declined
30 basis points to 4.17%. During the same period, yields on 10-year, AAA-rated
tax-exempt bonds declined 16 basis points to 3.86%.
Investor demand for municipal product remained strong throughout the reporting
period. According to statistics from the Investment Company Institute, in 2006,
long-term municipal bond funds had net new cash flows of over $15 billion, a
200% increase versus 2005. At the same time, new-issue volume has surged in
recent months as municipalities rushed to take advantage of low market yields
and higher demand levels. In the three months ended January 31, more than
$117 billion in new long-term municipal bonds was issued, an increase of over
30% versus the same period a year ago. Issuance in January, which totaled
$29 billion, was the highest January volume on record. For all of 2006, new
bond underwritings totaled nearly $385 billion, just 6% below 2005's record
issuance and close to initial estimates. The recent increase in issuance
has made the municipal market's outperformance even more impressive. In the
past three months, we saw more than 10 underwritings that were greater than
$700 million in size. Investor demand has been so robust that these issues have
been well oversubscribed and seen their initial offering yields reduced by as
much as 10 basis points.
Looking ahead, we expect the technical environment for the tax-exempt bond
market to remain constructive. Attractive yield ratios, coupled with a
relatively steep municipal yield curve and manageable new issuance, should
help to sustain investor appetite for municipal product and enable the sector
to continue its strong performance.
BlackRock MuniHoldings Fund II, Inc.
How did the Fund perform during the period?
For the six-month period ended January 31, 2007, the Common Stock of BlackRock
MuniHoldings Fund II, Inc. (formerly MuniHoldings Fund II, Inc.) had net
annualized yields of 5.14% and 5.28%, based on a period-end per share net
asset value of $15.06 and a per share market price of $14.65, respectively,
and $.390 per share income dividends. Over the same period, the total
investment return on the Fund's Common Stock was +4.33%, based on a change in
per share net asset value from $14.82 to $15.06, and assuming reinvestment of
all distributions.
The Fund's total return, based on net asset value, exceeded the +4.23% average
return of the Lipper General Municipal Debt Funds (Leveraged) category for the
six-month period. (Funds in this Lipper category invest primarily in municipal
debt issues rated in the top four credit-rating categories. These funds can be
leveraged via use of debt, preferred equity and/or reverse repurchase
agreements.)
Performance benefited primarily from the Fund's fairly neutral stance on
interest rates and our fully invested posture. We also were able to maintain
the Fund's competitive dividend yield, a by-product of the seasoned nature of
the Fund's holdings (that is, the portfolio consists primarily of higher-
quality issues with higher coupons). Notably, the Fund preserved its strong
accrual rate despite having reduced an overweight exposure to lower-quality,
higher-yielding municipal securities, which outpaced higher-quality names
throughout 2006. Another positive contributor was the ongoing spate of
refunding activity in the marketplace, which proved beneficial to some of the
Fund's holdings. When a bond is refinanced ahead of its maturity date, its
price typically increases. A generally favorable bond market environment
further aided performance as long-dated municipals - in which we held a modest
overweight position - generated impressive returns, particularly during the
latter half of the period.
SEMI-ANNUAL REPORTS JANUARY 31, 2007
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 distributions, 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?
Portfolio activity was limited during the period. In part, this signals our
overall satisfaction with the Fund's existing composition and risk profile. It
also is a reflection of the significant supply/demand imbalance that still
persists in the municipal market. Municipal supply surged more than 30% in the
latter half of the period, reaching $383 billion for full-year 2006. Although
this is a nominally high level, it is 6.1% lower than the record volume
recorded in 2005. The smaller supply, coupled with a firm Treasury market,
caused municipal cash to perform strongly during the semi-annual period, but
offered few relative value opportunities. Having said that, we did find
attractive relative value in the health care sector, where a heavy slate of
issuance late in 2006 put pressure on credit spreads and created some
advantageous buying opportunities, particularly within higher-rated healthcare
credits (A-rated and AA-rated names).
Sector concentration was largely static, with our primary focus still on the
tax-backed-, corporate- and health care- related segments. The main exception
was refunded bonds, to which we increased our exposure by virtue of the
heightened refunding activity in the market. While this became an increasingly
significant component of the portfolio during the reporting period, we do not
expect material changes here in the future. This is largely because, as
callable bonds are refunded, they assume risk parameters commensurate with the
five-year to 10-year maturity range, an area of the municipal curve that we
believe represents compelling value.
For the six months ended January 31, 2007, the average yield for the Fund's
Auction Market Preferred Stock was 3.49% for Series A and 3.36% for Series B.
There was no material change in the Fund's borrowing costs, as the Fed left
the short-term interest rate target unchanged throughout the period. In light
of the Fed's current wait-and-see stance on monetary policy, we would expect
additional increases in the Fund's cost of funds to be limited. The tax-exempt
yield curve maintained a positive slope throughout the period, allowing us to
borrow at a lower rate than where we invest. This continued to generate an
income benefit to the holders of Common Stock from the leveraging of Preferred
Stock. However, should the spread between short-term and long-term interest
rates narrow, the benefits of leveraging will decline and, as a result, reduce
the yield on the Fund's Common Stock. For a more complete explanation of the
benefits and risks of leveraging, see page 8 of this report to shareholders.
How would you characterize the Fund's position at the close of the period?
The Fund ended the period fully invested and with an overall neutral market
posture. We believe this is the most suitable positioning given the Fed's
wait-and-see approach to monetary policy and the historical flatness of the
yield curve. We will look for a steepening of the yield curve to present
attractive investment opportunities for the portfolio; specifically, we
believe the 15-year to 20-year segment of the curve could offer strong
relative performance in the future. Overall, we will seek to generate excess
return for our shareholders primarily through our research capabilities,
security selection and yield curve strategies, with further benefit from a
continually constructive environment for municipals.
BlackRock MuniHoldings New Jersey Insured Fund, Inc.
Describe conditions in the State of New Jersey.
The State of New Jersey is rated Aa3, AA and AA- by Moody's, Standard & Poor's
and Fitch, respectively, all with stable outlooks. New Jersey ranks fourth in
both debt per capita and debt as a percent of personal income, according to
Moody's. The state ranked second in per capita personal income in 2005,
according to the U.S. Department of Commerce. New Jersey's November 2006
unemployment rate was 4.5%, consistent with the national rate.
SEMI-ANNUAL REPORTS JANUARY 31, 2007
A Discussion With Your Fund's Portfolio Managers (concluded)
Fiscal year 2006 operations resulted in an estimated $1.5 billion general fund
balance. The $31 billion fiscal year 2007 budget includes a 1.0% sales tax
hike, which is expected to generate roughly $1.2 billion, and approximately
$2 billion in spending reductions and freezes. These are the major components
in reducing a projected $4.5 billion budget gap. The legislature recently
approved a tax reform measure that cuts property taxes for most New Jersey
residents by 20%. The tax reform legislation also imposes a 4% annual cap on
property tax increases by municipalities and school districts, although
various spending exemptions exist. The legislation awaits the governor's
signature. Other key credit issues include budgetary pressures from retiree
healthcare costs and pensions. The governor expects to propose his fiscal year
2008 budget later in February, as is customary in New Jersey.
How did the Fund perform during the period?
For the six-month period ended January 31, 2007, the Common Stock of BlackRock
MuniHoldings New Jersey Insured Fund, Inc. (formerly MuniHoldings New Jersey
Insured Fund, Inc.) had net annualized yields of 4.95% and 4.88%, based on a
period-end per share net asset value of $15.15 and a per share market price of
$15.38, respectively, and $.378 per share income dividends. Over the same
period, the total investment return on the Fund's Common Stock was +4.18%,
based on a change in per share net asset value from $14.91 to $15.15, and
assuming reinvestment of all distributions.
The Fund's total return, based on net asset value, trailed the +4.48% average
return of the Lipper New Jersey Municipal Debt Funds category for the six-
month period. (Funds in this Lipper category limit their investment to those
securities exempt from taxation in New Jersey or a city in New Jersey.) Our
neutral duration position proved favorable in protecting the Fund's net asset
value during times of interest rate volatility but less advantageous as
municipal rates fell throughout the period. Total return performance also was
restrained by the Fund's conservative investment parameters, which restrict
its ability to invest in lower-quality issues relative to its peer group.
Further tightening of credit spreads allowed these securities to continue
outperforming higher-quality issues of comparable maturity.
Also detracting from performance was the ongoing effect of a low-interest-rate
environment, wherein issuers of higher-coupon bonds pursue refinancing
opportunities and call their outstanding bonds. This trend persisted
throughout the semi-annual period, when a number of the Fund's seasoned
holdings with higher coupons were retired by their issuers, thus lowering the
distribution income of the Fund. Given our limited ability to participate in
lower-rated issues and a scant new-issue supply, it remained ever more
difficult to compensate for the yield lost to calls.
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 distributions, 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?
Portfolio activity was centered on maintaining the Fund's relatively neutral
investment stance and competitive distribution rate. We continued to trim
some of the portfolio's short-term investments, specifically shorter-dated
prerefunded bonds and high-coupon, short-call bonds. Early in the period, we
redeployed some of these assets in the intermediate portion of the yield curve
(10 years to 15 years) as the degree of curve flattening pointed toward a
reasonable likelihood for strong relative performance in this area. As it
became more evident that, for the foreseeable future, the Fed is content on
the sidelines, we believed it reasonable to also seek prospects on the long
end of the curve, where we found attractive opportunities to trade the
portfolio and generate incremental yield for the Fund. Accordingly, our
purchases were comprised primarily of out-of-favor coupons (particularly
discounted bonds), housing bonds, as well as a few zero-coupon bonds that
included Puerto Rican zero-coupon bonds. Because zero-coupon bonds tend to add
duration, we were especially selective in this area to ensure that our
investments preserved the Fund's neutral duration posture.
SEMI-ANNUAL REPORTS JANUARY 31, 2007
With respect to new issuance, levels were depressed versus the prior year
(down 38% for full-year 2006) and that limited overall portfolio activity
during the period. However, a surge of supply at year-end provided several
opportunities to participate in the market and diversify into new credits and
better structures. In addition to the aforementioned longer-dated, discounted
bonds, we also participated in several discounted new issues in the higher-
education sector. Although these deals were substantially smaller than those
we would normally target (and generally fly below the radar screen for many),
they fit well within the investment parameters of the Fund and offered an
excellent opportunity to capture additional market yield.
Throughout the period, we continued to maintain a high-quality portfolio.
Consistent with the Fund's investment parameters, at least 80% of the
portfolio was invested in AAA-rated, insured bonds.
For the six months ended January 31, 2007, the Fund's Auction Market Preferred
Stock had average yields as follows: Series A, 3.17%; Series B, 3.15%; Series
C, 3.16%; Series D, 3.09%; and Series E, 3.13%. There was no material change
in the Fund's borrowing costs as the Fed left the short-term interest rate
target unchanged throughout the period. In light of the Fed's current wait-and-
see stance on monetary policy, we would expect additional increases in the
Fund's cost of funds to be limited. The tax-exempt yield curve maintained a
positive slope throughout the period, allowing us to borrow at a lower rate
than where we invest. This continued to generate an income benefit to the
holders of Common Stock from the leveraging of Preferred Stock. However,
should the spread between short-term and long-term interest rates narrow, the
benefits of leveraging will decline and, as a result, reduce the yield on the
Fund's Common Stock. For a more complete explanation of the benefits and risks
of leveraging, see page 8 of this report to shareholders.
How would you characterize the Fund's position at the close of the period?
The Fund ended the period fully invested and with an overall neutral market
positioning. Given a quiet Fed and few new-issue prospects, we are focusing
our efforts on identifying pockets of smaller transactions that offer
compelling opportunities, while continuing to add higher-yielding, out-of-
favor bonds as occasions arise. At the same time, we await a larger new-issue
calendar to offer greater opportunities to diversify and restructure the
portfolio. Looking ahead, we expect individual security selection and yield to
be the primary drivers of the Fund's performance, and intend to seek that
value and capital appreciation on the long end of the municipal yield curve.
Theodore R. Jaeckel Jr., CFA
Portfolio Manager
BlackRock MuniHoldings Fund II, Inc.
Timothy Browse, CFA
Portfolio Manager
BlackRock MuniHoldings New Jersey Insured Fund, Inc.
February 22, 2007
Effective October 2, 2006, Theodore R. Jaeckel Jr. assumed responsibility for
the day-to-day management of BlackRock MuniHoldings Fund II, Inc.'s portfolio.
Mr. Jaeckel is a Managing Director with BlackRock, Inc. Previously, he was a
Managing Director in the Municipal Tax-Exempt Fund Management group with
Merrill Lynch Investment Managers (MLIM) from 2005 to 2006, a Director thereof
from 1997 to 2005 and a Vice President from 1991 to 1997.
As of the same date, Timothy T. Browse assumed responsibility for the day-to-
day management of BlackRock MuniHoldings 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 MLIM from
2004 to 2006. Prior to that, 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.
SEMI-ANNUAL REPORTS JANUARY 31, 2007
The Benefits and Risks of Leveraging
The Funds utilize leveraging to seek to enhance the yield and net asset value
of their Common Stock. However, these objectives cannot be achieved in all
interest rate environments. To leverage, each Fund issues Preferred Stock,
which pays dividends at prevailing short-term interest rates, and invests the
proceeds in long-term municipal bonds. The interest earned on these
investments, net of dividends to Preferred Stock, is paid to Common Stock
shareholders in the form of dividends, and the value of these portfolio
holdings is reflected in the per share net asset value of each Fund's Common
Stock. However, in order to benefit Common Stock shareholders, the yield curve
must be positively sloped; that is, short-term interest rates must be lower
than long-term interest rates. At the same time, a period of generally
declining interest rates will benefit Common Stock shareholders. If either of
these conditions change, then the risks of leveraging will begin to outweigh
the benefits.
To illustrate these concepts, assume a fund's Common Stock capitalization of
$100 million and the issuance of Preferred Stock for an additional $50 million,
creating a total value of $150 million available for investment in long-term
municipal bonds. If prevailing short-term interest rates are approximately 3%
and long-term interest rates are approximately 6%, the yield curve has a
strongly positive slope. The fund pays dividends on the $50 million of
Preferred Stock based on the lower short-term interest rates. At the same time,
the fund's total portfolio of $150 million earns the income based on long-term
interest rates. Of course, increases in short-term interest rates would reduce
(and even eliminate) the dividends on the Common Stock.
In this case, the dividends paid to Preferred Stock shareholders are
significantly lower than the income earned on the fund's long-term
investments, and therefore the Common Stock shareholders are the beneficiaries
of the incremental yield. However, if short-term interest rates rise,
narrowing the differential between short-term and long-term interest rates,
the incremental yield pickup on the Common Stock will be reduced or eliminated
completely. At the same time, the market value of the fund's Common Stock
(that is, its price as listed on the New York Stock Exchange) may, as a
result, decline. Furthermore, if long-term interest rates rise, the Common
Stock's net asset value will reflect the full decline in the price of the
portfolio's investments, since the value of the fund's Preferred Stock does
not fluctuate. In addition to the decline in net asset value, the market value
of the fund's Common Stock may also decline. As of January 31, 2007, BlackRock
MuniHoldings Fund II, Inc. and BlackRock MuniHoldings New Jersey Insured Fund,
Inc. had leverage amounts, due to Auction Market Preferred Stock, of 39.48%
and 38.72%, respectively, before the deduction of Preferred Stock.
As a part of its 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 de-crease 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.
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 the swap will default on its
obligation to pay the Fund and the risk that the Fund will not be able to meet
its obligations to pay the other party to the agreement.
SEMI-ANNUAL REPORTS JANUARY 31, 2007
Schedule of Investments as of January 31, 2007 (Unaudited) (in Thousands)
BlackRock MuniHoldings Fund II, Inc.
Face
Amount Municipal Bonds Value
Alabama--3.3%
Birmingham, Alabama, Special Care Facilities
Financing Authority, Revenue Refunding Bonds
(Ascension Health Credit), Series C-2:
$ 1,145 5% due 11/15/2036 $ 1,186
835 5% due 11/15/2039 863
3,450 Jefferson County, Alabama, Limited Obligation
School Warrants, Series A, 5% due 1/01/2024 3,595
Arizona--4.6%
1,000 Arizona Health Facilities Authority Revenue Bonds
(Catholic Healthcare West), Series A, 6.625%
due 7/01/2020 1,098
1,365 Maricopa County, Arizona, IDA, Education Revenue
Bonds (Arizona Charter Schools Project 1),
Series A, 6.50% due 7/01/2012 1,392
2,060 Phoenix, Arizona, IDA, Airport Facility, Revenue
Refunding Bonds (America West Airlines Inc.
Project), AMT, 6.30% due 4/01/2023 2,102
985 Pima County, Arizona, IDA, Education Revenue Bonds
(Arizona Charter Schools Project), Series C, 6.75%
due 7/01/2031 1,055
1,000 Pinal County, Arizona, COP, 5% due 12/01/2029 1,036
980 Show Low, Arizona, Improvement District Number 5,
Special Assessment Bonds, 6.375% due 1/01/2015 1,003
Arkansas--0.6%
1,000 University of Arkansas, University Construction
Revenue Bonds (UAMS Campus), Series B, 5%
due 11/01/2022 (d) 1,056
California--21.0%
2,000 Benicia, California, Unified School District, GO,
Refunding, Series A, 5.615% due 8/01/2020 (b)(m) 1,119
5,200 California State Public Works Board, Lease Revenue
Bonds (Department of Corrections), Series C, 5.25%
due 6/01/2028 5,493
1,000 East Side Union High School District, California,
Santa Clara County, GO (Election of 2002),
Series D, 5% due 8/01/2020 (i) 1,068
870 Golden State Tobacco Securitization Corporation of
California, Tobacco Settlement Revenue Bonds,
Series A-3, 7.875% due 6/01/2042 1,060
8,010 Los Angeles, California, Unified School District, GO,
Series A, 5% due 7/01/2013 (d)(h) 8,586
1,750 Poway, California, Unified School District, Special
Tax (Community Facilities District Number 6 Area),
Series A, 6.125% due 9/01/2033 1,844
Face
Amount Municipal Bonds Value
California (concluded)
San Marino, California, Unified School District,
GO, Series A (d)(m):
$ 1,820 5.50% due 7/01/2017 $ 1,176
1,945 5.55% due 7/01/2018 1,199
2,070 5.60% due 7/01/2019 1,216
5,525 Sequoia, California, Unified High School District,
GO, Refunding, Series B, 5.50% due 7/01/2035 (c) 6,156
4,925 Tracy, California, Area Public Facilities Financing
Agency, Special Tax Refunding Bonds (Community
Facilities District Number 87-1), Series H, 5.875%
due 10/01/2019 (d) 5,015
1,250 Tustin, California, Unified School District, Senior
Lien Special Tax Bonds (Community Facilities
District Number 97-1), Series A, 5% due 9/01/2032 (c) 1,295
Colorado--1.6%
1,675 Elk Valley, Colorado, Public Improvement Revenue
Bonds (Public Improvement Fee), Series A, 7.10%
due 9/01/2014 1,787
860 Plaza Metropolitan District Number 1, Colorado, Tax
Allocation Revenue Bonds (Public Improvement Fees),
8.125% due 12/01/2025 866
Florida--8.8%
1,640 Ballantrae, Florida, Community Development District,
Capital Improvement Revenue Bonds, 6%
due 5/01/2035 1,726
2,100 Highlands County, Florida, Health Facilities Authority,
Hospital Revenue Refunding Bonds (Adventist
Health System), Series G, 5.125% due 11/15/2032 2,186
1,765 Miami-Dade County, Florida, Subordinate Special
Obligation Revenue Bonds, Series A, 5.24%
due 10/01/2037 (d)(m) 376
2,450 Midtown Miami, Florida, Community Development
District, Special Assessment Revenue Bonds,
Series A, 6.25% due 5/01/2037 2,657
2,400 Orange County, Florida, Health Facilities Authority,
Hospital Revenue Bonds (Orlando Regional
Healthcare), 6% due 12/01/2012 (h) 2,654
1,515 Orlando, Florida, Greater Orlando Aviation Authority,
Airport Facilities Revenue Bonds (JetBlue Airways
Corp.), AMT, 6.50% due 11/15/2036 1,632
525 Palm Coast Park Community Development District,
Florida, Special Assessment Revenue Bonds, 5.70%
due 5/01/2037 536
1,270 Preserve at Wilderness Lake, Florida, Community
Development District, Capital Improvement Bonds,
Series A, 5.90% due 5/01/2034 1,321
1,700 West Villages Improvement District, Florida, Special
Assessment Revenue Refunding Bonds (Unit of
Development Number 2), 5.80% due 5/01/2036 1,769
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
PCR Pollution Control Revenue Bonds
RIB Residual Interest Bonds
S/F Single Family
VRDN Variable Rate Demand Notes
SEMI-ANNUAL REPORTS JANUARY 31, 2007
Schedule of Investments (continued) (in Thousands)
BlackRock MuniHoldings Fund II, Inc.
Face
Amount Municipal Bonds Value
Georgia--3.7%
$ 1,250 Atlanta, Georgia, Tax Allocation Bonds (Atlantic
Station Project), 7.90% due 12/01/2024 $ 1,382
1,535 Brunswick and Glynn County, Georgia, Development
Authority, First Mortgage Revenue Bonds (Coastal
Community Retirement Corporation Project),
Series A, 7.25% due 1/01/2035 1,490
1,945 Fulton County, Georgia, Development Authority, PCR
(General Motors Corporation), Refunding, VRDN,
8% due 4/01/2010 (j) 1,945
1,250 Milledgeville-Baldwin County, Georgia, Development
Authority Revenue Bonds (Georgia College and
State University Foundation), 5.50% due 9/01/2024 1,343
Idaho--1.3%
2,000 Power County, Idaho, Industrial Development
Corporation, Solid Waste Disposal Revenue
Bonds (FMC Corporation Project), AMT, 6.45%
due 8/01/2032 2,125
Illinois--2.8%
1,000 Chicago, Illinois, O'Hare International Airport,
Special Facility Revenue Refunding Bonds (American
Airlines Inc. Project), 8.20% due 12/01/2024 1,030
1,000 Chicago, Illinois, Special Assessment Bonds (Lake
Shore East), 6.75% due 12/01/2032 1,081
2,000 Illinois HDA, Homeowner Mortgage Revenue Bonds,
AMT, Sub-Series C-2, 5.25% due 8/01/2022 2,057
500 Illinois State Finance Authority Revenue Bonds
(Landing At Plymouth Place Project), Series A, 6%
due 5/15/2025 530
Louisiana--2.4%
2,500 Louisiana Public Facilities Authority, Hospital Revenue
Bonds (Franciscan Missionaries of Our Lady Health
System, Inc.), Series A, 5.25% due 8/15/2036 2,623
1,275 New Orleans, Louisiana, Financing Authority Revenue
Bonds (Xavier University of Louisiana Project),
5.30% due 6/01/2026 (d) 1,337
Maine--2.1%
3,425 Maine State Housing Authority, Mortgage Purchase
Revenue Refunding Bonds, Series B, 5.30%
due 11/15/2023 3,563
Maryland--0.6%
1,050 Maryland State Energy Financing Administration,
Limited Obligation Revenue Bonds (Cogeneration-
AES Warrior Run), AMT, 7.40% due 9/01/2019 1,056
Massachusetts--4.6%
Massachusetts State Development Finance Agency
Revenue Bonds (Neville Communities Home),
Series A (f):
600 5.75% due 6/20/2022 670
1,500 6% due 6/20/2044 1,680
2,100 Massachusetts State HFA, Housing Revenue Bonds,
AMT, Series A, 5.25% due 12/01/2048 2,160
3,000 Massachusetts State School Building Authority,
Dedicated Sales Tax Revenue Bonds, Series A, 5%
due 8/15/2030 (c) 3,164
Michigan--0.7%
1,100 Flint, Michigan, Hospital Building Authority, Revenue
Refunding Bonds (Hurley Medical Center), Series A,
6% due 7/01/2020 (k) 1,198
Face
Amount Municipal Bonds Value
Minnesota--7.0%
$ 1,680 Minneapolis, Minnesota, Community Development
Agency, Supported Development Revenue
Refunding Bonds (Common Bond), Series G-3,
5.35% due 12/01/2011 (h) $ 1,792
4,220 Minnesota State Municipal Power Agency, Electric
Revenue Bonds, 5.25% due 10/01/2021 4,504
Rockford, Minnesota, Independent School District
Number 883, GO (c):
2,870 5.60% due 2/01/2019 3,013
2,390 5.60% due 2/01/2020 2,509
Mississippi--1.5%
Mississippi Business Finance Corporation, Mississippi,
PCR, Refunding (System Energy Resources, Inc.
Project):
2,000 5.875% due 4/01/2022 2,021
500 5.90% due 5/01/2022 505
Missouri--1.9%
950 Fenton, Missouri, Tax Increment Revenue Refunding
and Improvement Bonds (Gravois Bluffs), 7%
due 10/01/2011 (h) 1,084
1,000 Kansas City, Missouri, IDA, First Mortgage Health
Facilities Revenue Bonds (Bishop Spencer Place),
Series A, 6.50% due 1/01/2035 1,058
1,000 Missouri State Development Finance Board,
Infrastructure Facilities Revenue Refunding Bonds
(Branson), Series A, 5.50% due 12/01/2032 1,050
New Jersey--11.4%
New Jersey EDA, Cigarette Tax Revenue Bonds:
4,050 5.75% due 6/15/2029 4,352
1,890 5.50% due 6/15/2031 1,990
New Jersey EDA, Retirement Community Revenue
Bonds, Series A (h):
1,000 (Cedar Crest Village, Inc. Facility), 7.25%
due 11/15/2011 1,140
2,000 (Seabrook Village, Inc.), 8.125% due 11/15/2010 2,292
2,000 New Jersey EDA, Special Facility Revenue Bonds
(Continental Airlines, Inc. Project), AMT, 6.625%
due 9/15/2012 2,171
2,375 New Jersey Health Care Facilities Financing Authority
Revenue Bonds (South Jersey Hospital), 6%
due 7/01/2012 (h) 2,613
2,500 New Jersey State Turnpike Authority, Turnpike Revenue
Bonds, Series C, 5% due 1/01/2030 (c) 2,627
1,725 Tobacco Settlement Financing Corporation of
New Jersey, Asset-Backed Revenue Bonds, 7%
due 6/01/2013 (h) 2,026
New Mexico--3.9%
3,675 Farmington, New Mexico, PCR, Refunding (Public
Service Company of New Mexico--San Juan
Project), Series A, 5.80% due 4/01/2022 3,713
2,675 New Mexico Finance Authority, Senior Lien State
Transportation Revenue Bonds, Series A, 5.125%
due 6/15/2018 (d) 2,880
New York--11.4%
900 Dutchess County, New York, IDA, Civic Facility
Revenue Refunding Bonds (Saint Francis Hospital),
Series A, 7.50% due 3/01/2029 999
415 New York City, New York, City IDA, Civic Facility
Revenue Bonds, Series C, 6.80% due 6/01/2028 455
SEMI-ANNUAL REPORTS JANUARY 31, 2007
Schedule of Investments (continued) (in Thousands)
BlackRock MuniHoldings Fund II, Inc.
Face
Amount Municipal Bonds Value
New York (concluded)
New York City, New York, City IDA, Special Facility
Revenue Bonds (Continental Airlines, Inc. Project),
AMT:
$ 525 8% due 11/01/2012 $ 582
525 8.375% due 11/01/2016 588
3,855 New York City, New York, Sales Tax Asset Receivable
Corporation Revenue Bonds, Series A, 5%
due 10/15/2020 (d) 4,106
2,725 New York State Dormitory Authority Revenue Bonds
(School Districts Financing Program), Series D,
5.25% due 10/01/2023 (d) 2,903
20 Suffolk County, New York, IDA, Civic Facility Revenue
Bonds (Special Needs Facilities Pooled Program),
Series D-1, 5.50% due 7/01/2007 20
Tobacco Settlement Financing Corporation of New York
Revenue Bonds:
1,100 Series A-1, 5.50% due 6/01/2015 1,154
2,400 Series A-1, 5.50% due 6/01/2018 2,574
2,750 Series C-1, 5.50% due 6/01/2020 (b) 2,977
1,100 Series C-1, 5.50% due 6/01/2022 1,187
1,575 Westchester County, New York, IDA, Continuing Care
Retirement, Mortgage Revenue Bonds (Kendal on
Hudson Project), Series A, 6.50% due 1/01/2034 1,687
North Carolina--3.0%
3,130 North Carolina Capital Facilities Finance Agency,
Revenue Refunding Bonds (Duke University Project),
Series B, 4.25% due 7/01/2042 2,938
2,000 North Carolina Eastern Municipal Power Agency,
Power System Revenue Bonds, Series D, 6.75%
due 1/01/2026 2,152
Oklahoma--0.4%
645 Oklahoma State Housing Finance Agency,
S/F Mortgage Revenue Bonds (Homeownership
Loan Program), Series D-2, AMT, 6.25%
due 9/01/2029 (f)(g) 651
Pennsylvania--3.9%
2,750 Pennsylvania Economic Development Financing
Authority, Exempt Facilities Revenue Bonds
(National Gypsum Company), AMT, Series A, 6.25%
due 11/01/2027 2,893
540 Philadelphia, Pennsylvania, Authority for IDR,
Commercial Development, 7.75% due 12/01/2017 541
2,630 Sayre, Pennsylvania, Health Care Facilities Authority,
Revenue Bonds (Guthrie Healthcare System),
Series B, 7.125% due 12/01/2031 3,113
Rhode Island--1.5%
2,190 Rhode Island State Health and Educational Building
Corporation, Hospital Financing Revenue
Bonds (Lifespan Obligation Group), 6.50%
due 8/15/2012 (h) 2,476
South Carolina--2.8%
2,080 Medical University Hospital Authority, South Carolina,
Hospital Facilities Revenue Refunding Bonds,
Series A, 6.375% due 8/15/2012 (h) 2,345
2,000 South Carolina Jobs, EDA, EDR (Westminster
Presbyterian Center), 7.75% due 11/15/2010 (h) 2,307
Face
Amount Municipal Bonds Value
Tennessee--5.2%
$ 2,200 Hardeman County, Tennessee, Correctional Facilities
Corporation Revene Bonds, Series B, 7.375%
due 8/01/2017 $ 2,256
Shelby County, Tennessee, Health, Educational and
Housing Facility Board, Hospital Revenue
Refunding Bonds:
3,450 (Methodist Healthcare), 6.50% due 9/01/2012 (h) 3,914
2,500 (Saint Jude Children's Research Hospital), 5%
due 7/01/2031 2,611
Texas--8.0%
1,000 Alliance Airport Authority, Inc., Texas, Special Facilities
Revenue Bonds (American Airlines Inc. Project),
AMT, 7.50% due 12/01/2029 1,020
2,665 Austin, Texas, Convention Center Revenue Bonds
(Convention Enterprises, Inc.), First Tier, Series A,
6.70% due 1/01/2011 (h) 2,938
2,500 Brazos River, Texas, Harbor Navigation District,
Brazoria County Environmental Revenue Refunding
Bonds (Dow Chemical Company Project), AMT,
Series A-7, 6.625% due 5/15/2033 2,793
843 Harris County, Texas, Revenue Refunding Bonds,
DRIVERS, Series 1111, 6.55% due 8/15/2009 (c)(e) 909
1,300 Houston, Texas, Health Facilities Development
Corporation, Retirement Facility Revenue Bonds
(Buckingham Senior Living Community), Series A,
7.125% due 2/15/2034 1,449
2,965 Matagorda County, Texas, Navigation District
Number 1, Revenue Refunding Bonds (Reliant
Energy, Inc.), Series C, 8% due 5/01/2029 3,130
1,100 Port Corpus Christi, Texas, Individual Development
Corporation, Environmental Facilities Revenue
Bonds (Citgo Petroleum Corporation Project), AMT,
8.25% due 11/01/2031 1,130
Vermont--0.6%
1,000 Vermont Educational and Health Buildings Financing
Agency, Revenue Bonds (Developmental and
Mental Health), Series A, 6.50% due 6/15/2032 1,058
Virginia--13.2%
575 Chesterfield County, Virginia, IDA, PCR, Refunding
(Virginia Electric and Power Company), Series B,
5.875% due 6/01/2017 619
425 Chesterfield County, Virginia, IDA, PCR (Virginia
Electric and Power Company), Series A, 5.875%
due 6/01/2017 455
5,000 Fairfax County, Virginia, EDA, Resource Recovery
Revenue Refunding Bonds, AMT, Series A, 6.10%
due 2/01/2011 (a) 5,383
Pocahontas Parkway Association, Virginia, Toll Road
Revenue Bonds (h):
3,885 Senior Series A, 5.50% due 8/15/2008 4,065
18,400 Senior Series B, 7.35% due 8/15/2008 (m) 4,929
2,185 Tobacco Settlement Financing Corporation of
Virginia, Asset-Backed Revenue Bonds, 5.625%
due 6/01/2037 2,335
1,095 Virginia State HDA, Rental Housing Revenue Bonds,
AMT, Series B, 5.625% due 8/01/2011 1,139
3,200 Virginia State HDA, Revenue Bonds, AMT, Series D,
6% due 4/01/2024 3,337
SEMI-ANNUAL REPORTS JANUARY 31, 2007
Schedule of Investments (concluded) (in Thousands)
BlackRock MuniHoldings Fund II, Inc.
Face
Amount Municipal Bonds Value
Washington--0.6%
$ 1,015 Seattle, Washington, Housing Authority Revenue
Bonds (Replacement Housing Project), 6.125%
due 12/01/2032 $ 1,039
Wisconsin--0.9%
1,360 Wisconsin State Health and Educational Facilities
Authority Revenue Bonds (Synergyhealth Inc.), 6%
due 11/15/2032 1,471
Puerto Rico--0.9%
1,550 Puerto Rico Industrial, Medical and Environmental
Pollution Control Facilities Financing Authority,
Special Facilities Revenue Bonds (American Airlines
Inc.), Series A, 6.45% due 12/01/2025 1,582
U.S. Virgin Islands--1.8%
2,680 Virgin Islands Government Refinery Facilities, Revenue
Refunding Bonds (Hovensa Coker Project), AMT,
6.50% due 7/01/2021 3,016
Total Municipal Bonds
(Cost--$216,731)--138.0% 232,123
Municipal Bonds Held in Trust (o)
California--3.2%
5,130 California Pollution Control Financing Authority, PCR,
Refunding (Pacific Gas and Electric), AMT, Series A,
5.35% due 12/01/2016 (d) 5,468
Maryland--5.0%
7,765 Baltimore, Maryland, Convention Center Hotel
Revenue Bonds, Senior Series A, 5.25%
due 9/01/2039 (i) 8,390
Face
Amount Municipal Bonds Held in Trust (o) Value
Michigan--3.2%
$ 5,000 Michigan State Strategic Fund, Limited Obligation
Revenue Refunding Bonds (Detroit Edison Company
Pollution Control Project), AMT, Series C, 5.65%
due 9/01/2029 (i) $ 5,297
New York--2.1%
3,205 New York City, New York, Sales Tax Asset Receivable
Corporation Revenue Bonds, Series A, 5.25%
due 10/15/2027 (a) 3,456
South Carolina--5.1%
8,400 South Carolina State Ports Authority, Ports Revenue
Bonds, AMT, 5.30% due 7/01/2026 (c) 8,596
Texas--4.3%
7,045 Harris County, Texas, Toll Road Revenue
Refunding Bonds, Senior Lien, Series A, 5.25%
due 8/15/2035 (c) 7,318
Total Municipal Bonds Held in Trust
(Cost--$38,367)--22.9% 38,525
Shares
Held Short-Term Securities
12 Merrill Lynch Institutional Tax-Exempt Fund,
3.46% (l)(n) 12
Total Short-Term Securities
(Cost--$12)--0.0% 12
Total Investments (Cost--$255,110*)--160.9% 270,660
Other Assets Less Liabilities--1.8% 3,084
Liability for Trust Certificates, Including Interest
Expense Payable--(11.0%) (18,473)
Preferred Stock, at Redemption Value--(51.7%) (87,017)
----------
Net Assets Applicable to Common Stock--100.0% $ 168,254
==========
* The cost and unrealized appreciation (depreciation) of investments
as of January 31, 2007, as computed for federal income tax purposes,
were as follows:
Aggregate cost $ 236,400
===============
Gross unrealized appreciation $ 16,261
Gross unrealized depreciation (271)
---------------
Net unrealized appreciation $ 15,990
===============
(a) AMBAC Insured.
(b) FGIC Insured.
(c) FSA Insured.
(d) MBIA Insured.
(e) The rate disclosed is that currently in effect. This rate changes
periodically and inversely based upon prevailing market rates.
(f) GNMA Collateralized.
(g) FNMA Collateralized.
(h) Prerefunded.
(i) XL Capital Insured.
(j) 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.
(k) ACA Insured.
(l) 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
Merrill Lynch Institutional Tax-Exempt Fund -- --*
* Amount is less than $1,000.
(m) Represents a zero coupon bond; the interest rate shown reflects the
effective yield at the time of purchase.
(n) Represents the current yield as of January 31, 2007.
(o) Securities represent underlying bonds transferred to a separate
securitization trust established in a tender option bond transaction
in which the Fund may acquire 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.
SEMI-ANNUAL REPORTS JANUARY 31, 2007
Schedule of Investments as of January 31, 2007 (Unaudited) (in Thousands)
BlackRock MuniHoldings New Jersey Insured Fund, Inc.
Face
Amount Municipal Bonds Value
New Jersey--144.0%
$ 1,875 Atlantic Highlands, New Jersey, Highland Regional
Sewer Authority, Sewer Revenue Refunding Bonds,
5.50% due 1/01/2020 (b) $ 1,998
Camden County, New Jersey, Improvement Authority,
Lease Revenue Bonds (c)(h):
2,635 5.375% due 9/01/2010 2,779
1,540 5.50% due 9/01/2010 1,631
430 Carteret, New Jersey, Board of Education, COP, 6%
due 1/15/2010 (d)(h) 461
2,500 Delaware River and Bay Authority Revenue Bonds,
New Jersey, 5% due 1/01/2033 (d) 2,604
4,630 Delaware River Joint Toll Bridge Commission of New
Jersey and Pennsylvania, Bridge Revenue Refunding
Bonds, 5% due 7/01/2028 4,794
Delaware River Port Authority of New Jersey and
Pennsylvania Revenue Bonds (c):
5,000 5.50% due 1/01/2012 5,228
6,000 5.625% due 1/01/2013 6,296
500 5.75% due 1/01/2015 526
4,865 6% due 1/01/2018 5,148
5,525 6% due 1/01/2019 5,846
2,425 (Port District Project), Series B, 5.625%
due 1/01/2026 2,536
7,895 East Orange, New Jersey, Board of Education, COP,
5.50% due 8/01/2012 (c) 8,399
1,000 East Orange, New Jersey, Water Utility, GO, Refunding,
5.70% due 6/15/2008 (a)(h) 1,036
4,000 Essex County, New Jersey, Improvement Authority,
Lease Revenue Bonds (Correctional Facility Project),
6% due 10/01/2010 (b)(h) 4,308
4,400 Essex County, New Jersey, Improvement Authority
Revenue Bonds, Series A, 5% due 10/01/2028 (b) 4,605
Garden State Preservation Trust of New Jersey,
Capital Appreciation Revenue Bonds, Series B (c)(k):
9,000 5.12% due 11/01/2023 4,399
10,000 5.20% due 11/01/2025 4,430
Garden State Preservation Trust of New Jersey, Open
Space and Farmland Preservation Revenue Bonds,
Series A (c):
1,960 5.80% due 11/01/2021 2,232
2,730 5.80% due 11/01/2023 3,110
9,160 5.75% due 11/01/2028 11,126
Garden State Preservation Trust of New Jersey, Open
Space and Farmland Preservation, Revenue
Refunding Bonds, Series C (c):
5,000 5.25% due 11/01/2020 5,628
7,705 5.25% due 11/01/2021 8,696
6,640 Hopatcong, New Jersey, GO, Sewer Refunding Bonds,
4.50% due 8/01/2033 (a) 6,660
2,230 Jersey City, New Jersey, GO, Series B, 5.25%
due 9/01/2023 (c) 2,383
5,250 Lafayette Yard, New Jersey, Community Development
Revenue Bonds (Hotel/Conference Center Project-
Trenton), 6% due 4/01/2010 (d)(h) 5,649
1,550 Middlesex County, New Jersey, COP, 5.25%
due 6/15/2023 (d) 1,604
Face
Amount Municipal Bonds Value
New Jersey (continued)
$ 1,375 Middlesex County, New Jersey, COP, Refunding,
5.50% due 8/01/2016 (d) $ 1,467
5,270 Middlesex County, New Jersey, Improvement Authority,
Lease Revenue Bonds (Educational Services
Commission Projects), 6% due 7/15/2010 (h) 5,701
500 Middlesex County, New Jersey, Improvement
Authority Revenue Bonds (Senior Citizens Housing
Project), AMT, 5.50% due 9/01/2030 (a) 521
Monmouth County, New Jersey, Improvement
Authority Revenue Refunding Bonds (a):
1,540 5.35% due 12/01/2017 1,619
1,470 5.375% due 12/01/2018 1,546
New Jersey EDA, Cigarette Tax Revenue Bonds:
2,700 5.625% due 6/15/2019 2,822
2,000 5.75% due 6/15/2029 2,149
585 5.50% due 6/15/2031 616
1,180 5.75% due 6/15/2034 1,260
5,000 New Jersey EDA, Lease Revenue Bonds (University of
Medicine and Dentistry-International Center for
Public Health Project), 6% due 6/01/2032 (a) 5,327
New Jersey EDA, Motor Vehicle Surcharge Revenue
Bonds, Series A (d):
7,500 5.25% due 7/01/2026 8,560
11,105 5.25% due 7/01/2033 11,863
4,485 5% due 7/01/2034 4,691
1,000 New Jersey EDA, Parking Facility Revenue Bonds
(Elizabeth Development Company Project), 5.60%
due 10/15/2007 (b)(h) 1,031
3 New Jersey EDA, Revenue Bonds, DRIVERS,
Series 219, 8.052% due 5/01/2016 (c)(e) 3
New Jersey EDA, School Facilities Construction
Revenue Bonds:
9,000 Series L, 5% due 3/01/2030 (c) 9,439
8,420 Series O, 5.25% due 3/01/2023 9,056
2,500 New Jersey EDA, Solid Waste Disposal Facilities
Revenue Bonds (Waste Management, Inc.), AMT,
Series A, 5.30% due 6/01/2015 2,638
New Jersey EDA, State Lease Revenue Bonds:
2,670 (Liberty State Park Project), Series C, 5%
due 3/01/2022 (c) 2,828
3,000 (State Office Buildings Projects), 6%
due 6/15/2010 (a)(h) 3,214
4,620 (State Office Buildings Projects), 6.25%
due 6/15/2010 (a)(h) 4,984
10,775 New Jersey Health Care Facilities Financing Authority,
Department of Human Services Revenue Bonds
(Greystone Park Psychiatric Hospital Project), 5%
due 9/15/2023 (a) 11,401
New Jersey Health Care Facilities Financing Authority
Revenue Bonds:
3,015 (RWJ Healthcare Corporation), Series B, 5%
due 7/01/2035 (i) 3,137
2,820 (Society of the Valley Hospital), 5.375%
due 7/01/2025 (a) 2,945
2,135 (Somerset Medical Center), 5.50% due 7/01/2033 2,206
5,440 (South Jersey Hospital), 6% due 7/01/2012 (h) 5,984
SEMI-ANNUAL REPORTS JANUARY 31, 2007
Schedule of Investments (continued) (in Thousands)
BlackRock MuniHoldings New Jersey Insured Fund, Inc.
Face
Amount Municipal Bonds Value
New Jersey (continued)
New Jersey Health Care Facilities Financing Authority,
Revenue Refunding Bonds:
$ 4,000 (AHS Hospital Corporation), Series A, 6%
due 7/01/2013 (a) $ 4,446
1,455 (Atlantic City Medical Center), 6.25%
due 7/01/2017 1,605
3,500 (Atlantic City Medical Center), 5.75%
due 7/01/2025 3,752
1,775 (Holy Name Hospital), 6% due 7/01/2025 1,821
1,000 (Meridian Health System Obligation Group),
5.375% due 7/01/2024 (c) 1,040
New Jersey Sports and Exposition Authority,
Luxury Tax Revenue Refunding Bonds (Convention
Center) (d):
5,890 5.50% due 3/01/2021 6,738
3,000 5.50% due 3/01/2022 3,451
2,400 New Jersey Sports and Exposition Authority,
State Contract Revenue Bonds, Series A, 6%
due 3/01/2013 (d) 2,548
7,500 New Jersey State Educational Facilities Authority,
Higher Education, Capital Improvement Revenue
Bonds, Series A, 5.125% due 9/01/2012 (a)(h) 8,007
New Jersey State Educational Facilities Authority
Revenue Bonds:
9,420 (Capital Improvement Fund), Series A, 5.75%
due 9/01/2010 (c)(h) 10,052
1,200 (Montclair State University), Series A, 5%
due 7/01/2021 (a) 1,286
2,880 (Montclair State University), Series A, 5%
due 7/01/2022 (a) 3,078
3,615 (Rowan University), Series C, 5.125%
due 7/01/2028 (d) 3,831
3,260 (Rowan University), Series C, 5%
due 7/01/2034 (d) 3,414
800 (Rowan University), Series G, 4.50%
due 7/01/2031 (d) 793
3,210 (Richard Stockton College), Series F, 4.25%
due 7/01/2036 (d) 3,070
New Jersey State Educational Facilities Authority,
Revenue Refunding Bonds:
7,510 (Montclair State University), Series L, 5%
due 7/01/2014 (d)(h) 8,067
1,250 (Ramapo College), Series I, 4.25%
due 7/01/2031 (a) 1,200
2,000 (Ramapo College), Series I, 4.25%
due 7/01/2036 (a) 1,913
2,375 (Rowan University), Series C, 5.25%
due 7/01/2017 (b) 2,524
2,820 (Rowan University), Series C, 5.25%
due 7/01/2018 (b) 2,992
2,635 (Rowan University), Series C, 5.25%
due 7/01/2019 (b) 2,796
1,410 (Rowan University), Series C, 5%
due 7/01/2031 (b) 1,461
Face
Amount Municipal Bonds Value
New Jersey (continued)
$ 11,225 New Jersey State Housing and Mortgage Finance
Agency, Capital Fund Program Revenue Bonds,
Series A, 4.70% due 11/01/2025 (c) $ 11,471
New Jersey State Housing and Mortgage Finance
Agency, Home Buyer Revenue Bonds, AMT,
Series U (d):
1,000 5.60% due 10/01/2012 1,022
2,820 5.65% due 10/01/2013 2,882
3,000 5.75% due 4/01/2018 3,068
805 5.85% due 4/01/2029 822
5,000 New Jersey State Transit Corporation, COP (Federal
Transit Administration Grants), Series A, 6.125%
due 9/15/2009 (a)(h) 5,299
New Jersey State Transportation Trust Fund Authority,
Transportation System Revenue Bonds:
7,500 Series A, 6% due 6/15/2010 (h) 8,034
1,400 Series C, 5.05% due 12/15/2035 (a)(k) 384
5,500 Series C, 5.05% due 12/15/2036 (a)(k) 1,443
7,800 Series D, 5% due 6/15/2019 (c) 8,313
New Jersey State Transportation Trust Fund Authority,
Transportation System Revenue Refunding Bonds:
10,750 Series A, 5.25% due 12/15/2020 (c) 12,060
9,165 Series B, 5.50% due 12/15/2021 (d) 10,549
7,615 New Jersey State Turnpike Authority, Turnpike
Revenue Bonds, Series B, 5.15% due 1/01/2035 (a)(k) 5,394
New Jersey State Turnpike Authority, Turnpike
Revenue Refunding Bonds:
910 Series C, 6.50% due 1/01/2016 (d) 1,048
4,610 Series C, 6.50% due 1/01/2016 (d)(g) 5,320
4,665 Series C-1, 4.50% due 1/01/2031 (a) 4,645
North Bergen Township, New Jersey, Board of
Education, COP (c):
1,000 6% due 12/15/2010 (h) 1,089
3,260 6.25% due 12/15/2010 (h) 3,580
1,250 5% due 12/15/2018 1,292
4,335 North Hudson Sewage Authority, New Jersey,
Sewer Revenue Refunding Bonds, 5.125%
due 8/01/2020 (d) 4,811
1,035 Orange Township, New Jersey, Municipal Utility
and Lease, GO, Refunding, Series C, 5.10%
due 12/01/2017 (d) 1,067
Paterson, New Jersey, Public School District, COP (d):
1,980 6.125% due 11/01/2015 2,112
2,000 6.25% due 11/01/2019 2,140
4,750 Port Authority of New York and New Jersey,
Consolidated Revenue Refunding Bonds,
119th Series, 5.50% due 9/15/2019 (b) 4,797
Port Authority of New York and New Jersey, Special
Obligation Revenue Bonds, (JFK International Air
Terminal LLC), AMT (d):
650 RIB, Series 157, 7.55% due 12/01/2022 (e) 695
13,500 Series 6, 6.25% due 12/01/2011 14,792
1,500 Series 6, 6.25% due 12/01/2015 1,726
3,000 Series 6, 5.75% due 12/01/2025 3,044
SEMI-ANNUAL REPORTS JANUARY 31, 2007
Schedule of Investments (concluded) (in Thousands)
BlackRock MuniHoldings New Jersey Insured Fund, Inc.
Face
Amount Municipal Bonds Value
New Jersey (concluded)
$ 9,600 Rahway Valley Sewerage Authority, New Jersey,
Sewer Revenue Bonds (Capital Appreciation),
Series A, 4.79% due 9/01/2028 (d)(k) $ 3,674
South Jersey Port Corporation of New Jersey,
Revenue Refunding Bonds:
3,750 4.50% due 1/01/2015 3,842
1,920 4.50% due 1/01/2016 1,961
1,500 5% due 1/01/2026 1,549
2,000 5.10% due 1/01/2033 2,072
4,755 Tobacco Settlement Financing Corporation of
New Jersey, Asset-Backed Revenue Bonds, 7%
due 6/01/2013 (h) 5,584
2,000 University of Medicine and Dentistry of New Jersey,
COP, 5% due 6/15/2029 (d) 2,095
4,740 University of Medicine and Dentistry of New
Jersey, Revenue Bonds, Series A, 5.50%
due 12/01/2027 (a) 5,091
8,580 West Deptford Township, New Jersey, GO, 5.625%
due 9/01/2010 (b)(h) 9,121
3,615 West Orange, New Jersey, Board of Education, COP,
6% due 10/01/2009 (d)(h) 3,858
Puerto Rico--7.7%
Puerto Rico Commonwealth Highway and
Transportation Authority, Transportation
Revenue Refunding Bonds:
4,500 Series J, 5% due 7/01/2029 (d) 4,742
3,480 Series K, 5% due 7/01/2040 3,611
Puerto Rico Electric Power Authority, Power Revenue
Bonds:
6,830 Series HH, 5.25% due 7/01/2029 (c) 7,164
5,100 Series RR, 5% due 7/01/2028 (f) 5,383
Puerto Rico Industrial, Tourist, Educational, Medical
and Environmental Control Facilities Revenue
Bonds, Series A:
1,780 (Hospital Auxilio Mutuo Obligation Group),
6.25% due 7/01/2024 (d) 1,793
Face
Amount Municipal Bonds Value
Puerto Rico--7.7%
Puerto Rico Industrial, Tourist, Educational, Medical
and Environmental Control Facilities Revenue
Bonds, Series A (concluded):
$ 1,750 (Hospital de la Concepcion), 6.50%
due 11/15/2020 $ 1,916
Total Municipal Bonds
(Cost--$464,141)--151.7% 487,360
Municipal Bonds Held in Trust (m)
New Jersey--14.9%
25,230 New Jersey EDA, Natural Gas Facilities Revenue
Refunding Bonds (NUI Corporation Projects),
AMT, Series A, 5.70% due 6/01/2032 (d) 25,852
9,155 New Jersey EDA, Revenue Bonds (Transportation
Project), Sub-Lease, Series A, 6%
due 5/01/2009 (c)(h) 9,607
3,030 Port Authority of New York and New Jersey, Special
Obligation Revenue Bonds (JFK International Air
Terminal), AMT, Series 6, 5.75% due 12/01/2022 (d) 3,133
8,650 Trenton, New Jersey, Parking Authority, Parking
Revenue Bonds, 6.10% due 4/01/2010 (b)(h) 9,256
Total Municipal Bonds Held in Trust
(Cost--$46,716)--14.9% 47,848
Shares
Held Short-Term Securities
8,211 CMA New Jersey Municipal Money Fund, 3.03% (j)(l) 8,211
Total Short-Term Securities
(Cost--$8,211)--2.5% 8,211
Total Investments (Cost--$519,068*)--169.1% 543,419
Other Assets Less Liabilities--1.3% 4,138
Liability for Trust Certificates, Including Interest
Expense Payable--(7.2%) (23,216)
Preferred Stock, at Redemption Value--(63.2%) (203,064)
----------
Net Assets Applicable to Common Stock--100.0% $ 321,277
==========
* The cost and unrealized appreciation (depreciation) of investments
as of January 31, 2007, as computed for federal income tax purposes,
were as follows:
Aggregate cost $ 496,959
===============
Gross unrealized appreciation $ 23,799
Gross unrealized depreciation (371)
---------------
Net unrealized appreciation $ 23,428
===============
(a) AMBAC Insured.
(b) FGIC Insured.
(c) FSA Insured.
(d) MBIA Insured.
(e) The rate disclosed is that currently in effect. This rate changes
periodically and inversely based upon prevailing market rates.
(f) CIFG Insured.
(g) Escrowed to maturity.
(h) Prerefunded.
(i) Radian Insured.
(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 7,161 $ 62
(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 January 31, 2007.
(m) Securities represent underlying bonds transferred to a separate
securitization trust established in a tender option bond transaction
in which the Fund may acquire 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.
SEMI-ANNUAL REPORTS JANUARY 31, 2007
Statements of Net Assets
BlackRock
MuniHoldings
BlackRock New Jersey
MuniHoldings Insured
As of January 31, 2007 (Unaudited) Fund II, Inc. Fund, Inc.
Assets
Investments in unaffiliated securities, at value* $ 270,648,761 $ 535,207,662
Investments in affiliated securities, at value** 11,739 8,210,989
Cash 560,545 87,264
Interest receivable 3,714,624 5,660,256
Prepaid expenses 6,085 17,999
--------------- ---------------
Total assets 274,941,754 549,184,170
--------------- ---------------
Liabilities
Trust certificates 18,270,000 23,032,500
Interest expense payable 202,876 183,124
Payable for securities purchased 323,178 --
Payable to investment adviser 119,495 228,984
Payable for other affiliates 1,632 5,065
Dividends payable to shareholders 703,624 1,293,621
Accrued expenses 49,907 100,096
--------------- ---------------
Total liabilities 19,670,712 24,843,390
--------------- ---------------
Preferred Stock
Preferred Stock, at redemption value, par value $.10 per share*** of
AMPS+++ at $25,000 per share liquidation preference 87,016,888 203,063,591
--------------- ---------------
Net Assets Applicable to Common Stock
Net assets applicable to Common Stock $ 168,254,154 $ 321,277,189
=============== ===============
Net Assets Consist of
Undistributed investment income--net $ 1,572,317 $ 1,752,453
Accumulated realized capital losses--net (15,209,270) (25,752,928)
Unrealized appreciation--net 15,550,732 24,351,054
--------------- ---------------
Total accumulated earnings--net 1,913,779 350,579
--------------- ---------------
Common Stock, par value $.10 per share++ 1,116,863 2,120,690
Paid-in capital in excess of par 165,223,512 318,805,920
--------------- ---------------
Net Assets $ 168,254,154 $ 321,277,189
=============== ===============
Net asset value per share of Common Stock $ 15.06 $ 15.15
=============== ===============
Market price $ 14.65 $ 15.38
=============== ===============
* Identified cost on unaffiliated securities $ 255,098,029 $ 510,856,608
=============== ===============
** Identified cost on affiliated securities $ 11,739 $ 8,210,989
=============== ===============
*** Preferred Shares authorized, issued and outstanding:
Series A Shares 1,740 1,360
=============== ===============
Series B Shares 1,740 1,360
=============== ===============
Series C Shares -- 2,400
=============== ===============
Series D Shares -- 1,880
=============== ===============
Series E Shares -- 1,120
=============== ===============
++ Common Shares issued and outstanding 11,168,632 21,206,895
=============== ===============
+++ Auction Market Preferred Stock.
See Notes to Financial Statements.
SEMI-ANNUAL REPORTS JANUARY 31, 2007
Statements of Operations
BlackRock
MuniHoldings
BlackRock New Jersey
MuniHoldings Insured
For the Six Months Ended January 31, 2007 (Unaudited) Fund II, Inc. Fund, Inc.
Investment Income
Interest $ 7,196,451 $ 13,080,732
Dividends from affiliates 200 62,247
--------------- ---------------
Total income 7,196,651 13,142,979
--------------- ---------------
Expenses
Investment advisory fees 708,348 1,459,277
Interest expense and fees 355,030 448,587
Commission fees 110,925 258,773
Accounting services 51,416 85,457
Professional fees 26,532 28,223
Transfer agent fees 23,964 42,380
Printing and shareholder reports 10,470 20,508
Directors' fees and expenses 15,525 15,478
Listing fees 8,391 8,296
Custodian fees 7,745 14,123
Pricing fees 8,461 10,225
Other 19,864 33,376
--------------- ---------------
Total expenses before waiver and/or reimbursement 1,346,671 2,424,703
Waiver and/or reimbursement of expenses (11) (89,352)
--------------- ---------------
Total expenses after waiver and/or reimbursement 1,346,660 2,335,351
--------------- ---------------
Investment income--net 5,849,991 10,807,628
--------------- ---------------
Realized & Unrealized Gain--Net
Realized gain on investments--net 434,635 565,153
Change in unrealized appreciation on investments--net 2,307,566 5,035,649
--------------- ---------------
Total realized and unrealized gain--net 2,742,201 5,600,802
--------------- ---------------
Dividends to Preferred Shareholders
Investment income--net (1,502,774) (3,210,674)
--------------- ---------------
Net Increase in Net Assets Resulting from Operations $ 7,089,418 $ 13,197,756
=============== ===============
See Notes to Financial Statements.
SEMI-ANNUAL REPORTS JANUARY 31, 2007
Statements of Changes in Net Assets (As Restated for the Year Ended 2006. See Note 7) BlackRock MuniHoldings Fund II, Inc.
For the Six For the
Months Ended Year Ended
January 31, 2007 July 31,
Increase (Decrease) in Net Assets: (Unaudited) 2006
Operations
Investment income--net $ 5,849,991 $ 11,647,817
Realized gain--net 434,635 1,049,246
Change in unrealized appreciation--net 2,307,566 (2,326,004)
Dividends to Preferred Stock shareholders (1,502,774) (2,570,803)
--------------- ---------------
Net increase in net assets resulting from operations 7,089,418 7,800,256
--------------- ---------------
Dividends to Common Stock Shareholders
Investment income--net (4,400,441) (10,146,661)
--------------- ---------------
Net decrease in net assets resulting from dividends to Common Stock shareholders (4,400,441) (10,146,661)
--------------- ---------------
Common Stock Transactions
Value of shares issued to Common Stock shareholders in reinvestment of dividends -- 323,132
--------------- ---------------
Net Assets Applicable to Common Stock
Total increase (decrease) in net assets applicable to Common Stock 2,688,977 (2,023,273)
Beginning of period 165,565,177 167,588,450
--------------- ---------------
End of period* $ 168,254,154 $ 165,565,177
=============== ===============
* Undistributed investment income--net $ 1,572,317 $ 1,625,541
=============== ===============
See Notes to Financial Statements.
BlackRock MuniHoldings New Jersey Insured Fund, Inc.
For the Six For the
Months Ended Year Ended
January 31, 2007 July 31,
Increase (Decrease) in Net Assets: (Unaudited) 2006
Operations
Investment income--net $ 10,807,628 $ 21,755,079
Realized gain--net 565,153 3,099,555
Change in unrealized appreciation--net 5,035,649 (16,043,661)
Dividends to Preferred Stock shareholders (3,210,674) (5,509,362)
--------------- ---------------
Net increase in net assets resulting from operations 13,197,756 3,301,611
--------------- ---------------
Dividends to Common Stock Shareholders
Investment income--net (8,094,252) (18,365,764)
--------------- ---------------
Net decrease in net assets resulting from dividends to Common Stock shareholders (8,094,252) (18,365,764)
--------------- ---------------
Common Stock Transactions
Value of shares issued to Common Stock shareholders in reinvestment of dividends 524,753 1,860,277
--------------- ---------------
Net Assets Applicable to Common Stock
Total increase (decrease) in net assets applicable to Common Stock 5,628,257 (13,203,876)
Beginning of period 315,648,932 328,852,808
--------------- ---------------
End of period* $ 321,277,189 $ 315,648,932
=============== ===============
* Undistributed investment income--net $ 1,752,453 $ 2,249,751
=============== ===============
See Notes to Financial Statements.
SEMI-ANNUAL REPORTS JANUARY 31, 2007
Financial Highlights (As Restated for the Years Ended 2006, BlackRock MuniHoldings Fund II, Inc.
2005, 2004, 2003 and 2002. See Note 7)
For the Six
The following per share data and ratios Months Ended
have been derived from information January, 31 2007 For the Year Ended July 31,
provided in the financial statements. (Unaudited) 2006 2005 2004 2003 2002
Per Share Operating Performance
Net asset value, beginning of period $ 14.82 $ 15.03 $ 13.98 $ 13.46 $ 13.51 $ 13.42
----------- ----------- ----------- ----------- ----------- -----------
Investment income--net .52++ 1.04++ 1.08++ 1.15++ 1.16++ 1.10
Realized and unrealized gain (loss)--net .24 (.11) 1.15 .50 (.15) (.04)
Less dividends to Preferred Stock
shareholders from investment income--net (.13) (.23) (.14) (.10) (.10) (.13)
----------- ----------- ----------- ----------- ----------- -----------
Total from investment operations .63 .70 2.09 1.55 .91 .93
----------- ----------- ----------- ----------- ----------- -----------
Less dividends to Common Stock shareholders
from investment income--net (.39) (.91) (1.04) (1.03) (.96) (.84)
----------- ----------- ----------- ----------- ----------- -----------
Net asset value, end of period $ 15.06 $ 14.82 $ 15.03 $ 13.98 $ 13.46 $ 13.51
=========== =========== =========== =========== =========== ===========
Market price per share, end of period $ 14.65 $ 14.12 $ 15.25 $ 13.53 $ 13.16 $ 12.96
=========== =========== =========== =========== =========== ===========
Total Investment Return***
Based on net asset value per share 4.33%+++ 4.89% 15.46% 11.88% 7.15% 7.56%
=========== =========== =========== =========== =========== ===========
Based on market price per share 6.52%+++ (1.50%) 21.04% 10.75% 9.21% 12.12%
=========== =========== =========== =========== =========== ===========
Ratios Based on Average Net Assets Applicable to Common Stock
Total expenses, net of reimbursement and
excluding interest expense** 1.17%* 1.18% 1.19% 1.21% 1.26% 1.29%
=========== =========== =========== =========== =========== ===========
Total expenses, net of reimbursement** 1.59%* 1.44% 1.27% 1.30% 1.38% 1.48%
=========== =========== =========== =========== =========== ===========
Total expenses** 1.59%* 1.44% 1.27% 1.31% 1.38% 1.48%
=========== =========== =========== =========== =========== ===========
Total investment income--net** 6.89%* 7.04% 7.38% 8.13% 8.48% 8.27%
=========== =========== =========== =========== =========== ===========
Amount of dividends to Preferred Stock
shareholders 1.77%* 1.55% .98% .69% .74% .95%
=========== =========== =========== =========== =========== ===========
Investment income--net, to Common Stock
shareholders 5.12%* 5.49% 6.40% 7.44% 7.74% 7.32%
=========== =========== =========== =========== =========== ===========
Ratios Based on Average Net Assets Applicable to Preferred Stock
Dividends to Preferred Stock shareholders 3.43%* 2.95% 1.84% 1.23% 1.28% 1.60%
=========== =========== =========== =========== =========== ===========
Supplemental Data
Net assets applicable to Common Stock,
end of period (in thousands) $ 168,254 $ 165,565 $ 167,588 $ 155,583 $ 149,262 $ 149,633
=========== =========== =========== =========== =========== ===========
Preferred Stock outstanding at liquidation
preference, end of period (in thousands) $ 87,000 $ 87,000 $ 87,000 $ 87,000 $ 87,000 $ 87,000
=========== =========== =========== =========== =========== ===========
Portfolio turnover 5% 41% 38% 29% 42% 43%
=========== =========== =========== =========== =========== ===========
Leverage
Asset coverage per $1,000 $ 2,934 $ 2,903 $ 2,926 $ 2,788 $ 2,716 $ 2,720
=========== =========== =========== =========== =========== ===========
Dividends Per Share on Preferred Stock Outstanding
Series A--Investment income--net $ 440 $ 754 $ 445 $ 223 $ 279 $ 409
=========== =========== =========== =========== =========== ===========
Series B--Investment income--net $ 424 $ 724 $ 471 $ 395 $ 363 $ 394
=========== =========== =========== =========== =========== ===========
* Annualized.
** Do not reflect the effect of dividends to Preferred Stock shareholders.
*** 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.
+++ Aggregate total investment return.
See Notes to Financial Statements.
SEMI-ANNUAL REPORTS JANUARY 31, 2007
Financial Highlights (As Restated for the Years Ended 2006, BlackRock MuniHoldings New Jersey Insured Fund, Inc.
2005, 2004, 2003 and 2002. See Note 7)
For the Six
The following per share data and ratios Months Ended
have been derived from information January, 31 2007 For the Year Ended July 31,
provided in the financial statements. (Unaudited) 2006 2005 2004 2003 2002
Per Share Operating Performance
Net asset value, beginning of period $ 14.91 $ 15.62 $ 15.03 $ 14.46 $ 14.90 $ 14.54
----------- ----------- ----------- ----------- ----------- -----------
Investment income--net* .51 1.03 1.04 1.07 1.08 1.06
Realized and unrealized gain (loss)--net .26 (.61) .66 .51 (.54) .31
Less dividends to Preferred Stock
shareholders from investment income--net (.15) (.26) (.16) (.08) (.09) (.15)
----------- ----------- ----------- ----------- ----------- -----------
Total from investment operations .62 .16 1.54 1.50 .45 1.22
----------- ----------- ----------- ----------- ----------- -----------
Less dividends to Common Stock shareholders
from investment income--net (.38) (.87) (.95) (.93) (.89) (.86)
----------- ----------- ----------- ----------- ----------- -----------
Net asset value, end of period $ 15.15 $ 14.91 $ 15.62 $ 15.03 $ 14.46 $ 14.90
=========== =========== =========== =========== =========== ===========
Market price per share, end of period $ 15.38 $ 14.98 $ 15.89 $ 14.17 $ 13.59 $ 14.24
=========== =========== =========== =========== =========== ===========
Total Investment Return***
Based on net asset value per share 4.18%++++ 1.09% 10.63% 10.90% 3.32% 9.16%
=========== =========== =========== =========== =========== ===========
Based on market price per share 5.27%++++ (.16%) 19.37% 11.24% 1.61% 20.01%
=========== =========== =========== =========== =========== ===========
Ratios Based on Average Net Assets Applicable to Common Stock
Total expenses, net of waiver and reimbursement
and excluding reorganization expenses and
interest expense** 1.16%++ 1.15% 1.14% 1.13% 1.15% 1.19%
=========== =========== =========== =========== =========== ===========
Total expenses, net of waiver and reimbursement
and excluding reorganization expenses** 1.43%++ 1.39% 1.25% 1.19% 1.23% 1.33%
=========== =========== =========== =========== =========== ===========
Total expenses, net of waiver
and reimbursement** 1.43%++ 1.39% 1.25% 1.19% 1.23% 1.35%
=========== =========== =========== =========== =========== ===========
Total expenses** 1.49%++ 1.45% 1.31% 1.27% 1.31% 1.43%
=========== =========== =========== =========== =========== ===========
Total investment income--net** 6.63%++ 6.80% 6.69% 6.97% 7.05% 7.32%
=========== =========== =========== =========== =========== ===========
Amount of dividends to Preferred
Stock shareholders 1.97%++ 1.72% 1.02% .54% .61% 1.00%
=========== =========== =========== =========== =========== ===========
Investment income--net, to Common
Stock shareholders 4.66%++ 5.08% 5.67% 6.43% 6.44% 6.32%
=========== =========== =========== =========== =========== ===========
Ratios Based on Average Net Assets Applicable to Preferred Stock
Dividends to Preferred Stock shareholders 3.14%++++ 2.71% 1.64% .86% .97% 1.51%
=========== =========== =========== =========== =========== ===========
Supplemental Data
Net assets applicable to Common Stock,
end of period (in thousands) $ 321,277 $ 315,649 $ 328,853 $ 316,171 $ 304,126 $ 313,515
=========== =========== =========== =========== =========== ===========
Preferred Stock outstanding at liquidation
preference, end of period (in thousands) $ 203,000 $ 203,000 $ 203,000 $ 203,000 $ 203,000 $ 203,000
=========== =========== =========== =========== =========== ===========
Portfolio turnover 3% 1% 29% 8% 28% 19%
=========== =========== =========== =========== =========== ===========
Leverage
Asset coverage per $1,000 $ 2,583 $ 2,555 $ 2,620 $ 2,557 $ 2,498 $ 2,544
=========== =========== =========== =========== =========== ===========
Dividends Per Share on Preferred Stock Outstanding
Series A--Investment income--net $ 399 $ 683 $ 402 $ 206 $ 233 $ 356
=========== =========== =========== =========== =========== ===========
Series B--Investment income--net $ 397 $ 682 $ 403 $ 210 $ 240 $ 381
=========== =========== =========== =========== =========== ===========
Series C--Investment income--net $ 398 $ 689 $ 419 $ 235 $ 247 $ 389
=========== =========== =========== =========== =========== ===========
Series D--Investment income--net $ 389 $ 673 $ 415 $ 210 $ 240 $ 363
=========== =========== =========== =========== =========== ===========
Series E--Investment income--net $ 394 $ 655 $ 394 $ 197 $ 247 $ 393
=========== =========== =========== =========== =========== ===========
* Based on average shares outstanding.
** Do not reflect the effect of dividends to Preferred Stock shareholders.
*** 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.
++ Annualized.
++++ Aggregate total investment return.
See Notes to Financial Statements.
SEMI-ANNUAL REPORTS JANUARY 31, 2007
Notes to Financial Statements (unaudited)
1. Significant Accounting Policies:
On September 29, 2006, MuniHoldings Fund II, Inc. and MuniHoldings New Jersey
Insured Fund, Inc. were renamed BlackRock MuniHoldings Fund II, Inc. and
BlackRock MuniHoldings New Jersey Insured Fund, Inc. (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. These unaudited financial statements reflect all
adjustments, which are, in the opinion of management, necessary to present a
fair statement of the results for the interim period. All such adjustments are
of a normal, recurring nature. The Funds determine and make available for
publication the net asset value of their Common Stock on a daily basis. The
Funds' Common Stock shares are listed on the New York Stock Exchange under the
symbols MUH and MUJ, respectively. 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 market 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 the Boards of Directors. Such valuations and procedures are
reviewed periodically by the Boards of Directors of the Funds. 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 the Boards of Directors of the Funds.
(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 write covered call options and purchase 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).
SEMI-ANNUAL REPORTS JANUARY 31, 2007
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 Statements 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--The 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. The Funds' 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 of the Funds. 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 January 31, 2007, the
aggregate value of the underlying municipal securities transferred to TOBs and
the related liability for trust certificates were:
Range of
Interest Underlying
Rates on Municipal
Liability the Liability Bonds
for Trust for Trust Transferred
Certificates Certificates to TOBs
BlackRock MuniHoldings 3.65% -
Fund II, Inc. $18,270,000 3.66% $38,525,164
BlackRock MuniHoldings
New Jersey 3.65% -
Insured Fund, Inc. $23,032,500 3.66% $47,847,830
Financial transactions executed through TOBs generally will underperform the
market for fixed rate municipal bonds in a rising interest rate environment,
but tend to outperform the market for fixed rate bonds when interest rates
decline or remain relatively stable. Should short-term interest rates rise,
the Funds' investments 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 value per share.
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.
SEMI-ANNUAL REPORTS JANUARY 31, 2007
Notes to Financial Statements (continued)
(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) 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 the last net asset value calculation in the first required
financial statement reporting period for fiscal years beginning after December
15, 2006. The impact on each of 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 each of the Funds' financial
statements has not been determined.
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.
On August 15, 2006, shareholders of each Fund approved a new Investment
Advisory Agreement with BlackRock Advisors, Inc. (the "Manager"), an indirect,
wholly owned subsidiary of BlackRock, Inc. BlackRock Advisors, Inc. was
recently reorganized into a limited liability company and renamed BlackRock
Advisors, LLC. The new Investment Advisory Agreements between each Fund and
the Manager became effective on September 29, 2006. Prior to September 29,
2006, FAM was the Funds' Manager. 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 the Funds' portfolios and
provides the necessary personnel, facilities, equipment and certain other
services necessary to the operations of the Funds. For such services, each
Fund pays a monthly fee at an annual rate of .55% of the Fund's average daily
net assets, including proceeds from the issuance of Preferred Stock. 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 as described below:
For the For the
Period Period
August 1, September 30,
2006 to 2006 to
September 29, January 31,
2006 2007
Reimbursement Reimbursement
Investment by FAM by the Manager
Merrill Lynch
BlackRock Institutional
MuniHoldings Tax-Exempt
Fund II, Inc. Fund $ 4 $ 7
BlackRock CMA New
MuniHoldings Jersey
New Jersey Municipal
Insured Money
Fund, Inc. Fund $2,005 $7,209
SEMI-ANNUAL REPORTS JANUARY 31, 2007
Notes to Financial Statements (continued)
In addition, for BlackRock MuniHoldings New Jersey Insured Fund, Inc., the
Manager (and previously FAM) has agreed to waive its management fee based on
the proceeds of Preferred Stock that exceeds 35% of the Fund's total net
assets. For the six months ended January 31, 2007, the Manager and/or FAM
earned and waived fees for BlackRock MuniHoldings New Jersey Insured Fund,
Inc. as follows:
For the Period For the Period
August 1, September 30,
2006 to 2006 to
September 29, January 31,
2006 2007
FAM Manager
Fees Fees Fees Fees
Earned Waived Earned Waived
$489,390 $28,255 $969,887 $51,883
In addition, the Manager has entered into a sub-advisory agreement in respect
to each Fund with BlackRock Investment Management, LLC, an affiliate of the
Manager, under which the Manager pays the Sub-Adviser for services it provides
a monthly fee at an annual rate equal to the percentage of the management fee
paid by each Fund to the Manager.
The Funds reimbursed the Manager and/or FAM for certain accounting services.
The reimbursements were as follows:
For the Period For the Period
August 1, 2006 to September 30,
September 29, 2006 to
2006 January 31, 2007
Reimbursement Reimbursement
to FAM to the Manager
BlackRock MuniHoldings
Fund II, Inc. $ 863 $1,727
BlackRock MuniHoldings
New Jersey Insured
Fund, Inc. $1,764 $3,728
Prior to September 29, 2006, certain officers and/or directors of the Funds
were officers and/or directors of Merrill Lynch, FAM, MLIM, and/or PSI.
Commencing September 29, 2006, certain officers and/or directors of the Funds
are officers and/or directors of BlackRock, Inc. or its affiliates.
3. Investments:
Purchases and sales of investments, excluding short-term securities, for the
six months ended January 31, 2007 were as follows:
BlackRock
MuniHoldings
BlackRock New Jersey
MuniHoldings Insured
Fund II, Inc. Fund, Inc.
Total Purchases $15,343,300 $14,871,622
Total Sales $14,695,348 $26,814,403
4. Stock Transactions:
Each Fund is authorized to issue 200,000,000 shares of stock, including
Preferred Stock, par value $.10 per share, all of which were initially
classified as Common Stock. The Board of Directors of each Fund is authorized,
however, to reclassify any unissued shares of stock without approval of
holders of Common Stock.
Common Stock
BlackRock MuniHoldings Fund II, Inc.
Shares issued and outstanding during the six months ended January 31, 2007
remained constant and for the year ended July 31, 2006 increased by 21,687 as
a result of dividend reinvestment.
BlackRock MuniHoldings New Jersey Insured Fund, Inc.
Shares issued and outstanding during the six months ended January 31, 2007 and
the year ended July 31, 2006 increased by 34,151 and 122,432, respectively, as
a result of dividend reinvestment.
Preferred Stock
Auction Market Preferred Stock are shares of Preferred Stock of the 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. The yields in effect
at January 31, 2007 were as follows:
BlackRock
MuniHoldings
BlackRock New Jersey
MuniHoldings Insured
Fund II, Inc. Fund, Inc.
Series A 3.55% 3.10%
Series B 3.54% 3.10%
Series C -- 3.20%
Series D -- 3.18%
Series E -- 2.85%
SEMI-ANNUAL REPORTS JANUARY 31, 2007
Notes to Financial Statements (continued)
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 six months ended January 31, 2007, Merrill
Lynch, Pierce, Fenner & Smith, Incorporated earned commissions as follows:
Commissions
BlackRock MuniHoldings Fund II, Inc. $ 31,822
BlackRock MuniHoldings New Jersey
Insured Fund, Inc. $ 130,290
5. Capital Loss Carryforward:
BlackRock MuniHoldings Fund II, Inc.
On July 31, 2006, the Fund had a net capital loss carryforward of $15,556,223,
of which $2,569,629 expires in 2008, $12,107,981 expires in 2009, $689,205
expires in 2010 and $189,408 expires in 2011. This amount will be available to
offset like amounts of any future taxable gains.
BlackRock MuniHoldings New Jersey Insured Fund, Inc.
On July 31, 2006, the Fund had a net capital loss carryforward of $25,221,422,
of which $24,985,528 expires in 2009 and $235,894 expires in 2011. This amount
will be available to offset like amounts of any future taxable gains.
6. Subsequent Event:
Each Fund paid a tax-exempt income dividend to holders of Common Stock in
the amount of $.063000 per share and $.061000 per share relating to
BlackRock MuniHoldings Fund II, Inc. and BlackRock MuniHoldings New Jersey
Insured Fund, Inc., respectively, on March 1, 2007 to shareholders of record
on February 15, 2007.
7. Restatement Information:
During the six months ended January 31, 2007, 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, the Funds have restated the statement of changes
in net assets for the year ended July 31, 2006 and the financial highlights
for the years ended July 31, 2006, 2005, 2004, 2003 and 2002. The effects of
the restatement were to record the transfers of the municipal bonds as secured
borrowings to give effect to offsetting changes in realized gain - net and in
the change in unrealized appreciation/ depreciation - net on the transferred
municipal securities and to give effect to interest on the bonds as interest
income and interest on the secured borrowings as interest expense.
BlackRock MuniHoldings Fund II, Inc.
Statement of Changes in Net Assets
For the Year Ended July 31, 2006
Previously
Reported Restated
Realized gain--net $ 1,052,644 $ 1,049,246
Change in unrealized
appreciation--net $ (2,329,402) $ (2,326,004)
Financial Highlights for the Years Ended July 31, 2006, 2005, 2004, 2003, 2002
2006 2005 2004 2003 2002
Previously Previously Previously Previously Previously
Class A Reported Restated Reported Restated Reported Restated Reported Restated Reported Restated
Total expenses, net
of reimbursement** 1.18% 1.44% 1.19% 1.27% 1.21% 1.30% 1.26% 1.38% 1.29% 1.48%
Total expenses** 1.18% 1.44% 1.19% 1.27% 1.22% 1.31% 1.26% 1.38% 1.29% 1.48%
Portfolio turnover 49.12% 41% 45.11% 38% 31.03% 29% 44.03% 42% 46.31% 43%
** Do not reflect the effect of dividends to Preferred Stock shareholders.
SEMI-ANNUAL REPORTS JANUARY 31, 2007
Notes to Financial Statements (concluded)
BlackRock MuniHoldings New Jersey Insured Fund, Inc.
Statement of Changes in Net Assets
For the Year Ended July 31, 2006
Previously
Reported Restated
Realized gain--net $ 3,944,138 $ 3,099,555
Change in unrealized
appreciation--net $ (16,888,244) $ (16,043,661)
Financial Highlights for the Years Ended July 31, 2006, 2005, 2004, 2003, 2002
2006 2005 2004 2003 2002
Previously Previously Previously Previously Previously
Class A Reported Restated Reported Restated Reported Restated Reported Restated Reported Restated
Total expenses, net
of waiver and
reimbursement
and excluding
reorganization
expenses** 1.15% 1.39% 1.14% 1.25% 1.13% 1.19% 1.15% 1.23% 1.19% 1.33%
Total expenses,
net of waiver
and reimbursement** 1.15% 1.39% 1.14% 1.25% 1.13% 1.19% 1.15% 1.23% 1.22% 1.35%
Total expenses** 1.21% 1.45% 1.20% 1.31% 1.21% 1.27% 1.23% 1.31% 1.29% 1.43%
Portfolio turnover 19.11% 1% 29.61% 29% 8.53% 8% 28.89% 28% 20.05% 19%
** Do not reflect the effect of dividends to Preferred Stock shareholders.
While the Statements of Net Assets as of July 31, 2006, 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 these Funds for the years ended July
31, 2006, 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 these Funds for the years
ended July 31, 2005, 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) on investments - net, and change in unrealized appreciation/
depreciation - net, by corresponding and offsetting amounts.
SEMI-ANNUAL REPORTS JANUARY 31, 2007
Proxy Results
BlackRock MuniHoldings Fund II, Inc.
During the six-month period ended January 31, 2007, BlackRock MuniHoldings
Fund II, 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 are as follows:
Shares Voted Shares Voted Shares Voted
For Against Abstain
To approve a new investment advisory agreement
with BlackRock Advisors, Inc. 6,039,908 134,921 236,390
To approve a contingent sub-advisory agreement
with BlackRock Advisors, Inc. 6,041,155 136,369 233,695
BlackRock MuniHoldings New Jersey Insured Fund, Inc.
During the six-month period ended January 31, 2007, BlackRock MuniHoldings 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 are as follows:
Shares Voted Shares Voted Shares Voted
For Against Abstain
To approve a new investment advisory agreement
with BlackRock Advisors, Inc. 10,506,782 444,071 495,258
To approve a contingent sub-advisory agreement
with BlackRock Advisors, Inc. 10,445,858 482,960 517,293
SEMI-ANNUAL REPORTS JANUARY 31, 2007
Disclosure of Investment Advisory Agreement
BlackRock Investment Advisory Agreements--Matters Considered by the Boards
The following disclosure appeared in the July 31, 2006 Annual Report of the
Funds and is the discussion referred to in "New BlackRock Sub-Advisory
Agreements - Matters Considered by the Boards" below. The term "Investment
Adviser" as used herein refers to Fund Asset Management, L.P.
In connection with the Transaction between Merrill Lynch and BlackRock, each
Fund's Board of Directors considered a new investment advisory agreement (each
a "New Investment Advisory Agreement") between the Fund and BlackRock Advisors,
Inc. or its successor ("BlackRock Advisors"). Each Fund's New Investment
Advisory Agreement has been approved by the Fund's shareholders and is expected
to become effective upon the closing of the Transaction in the third quarter
of 2006.
The Boards discussed the New Investment Advisory Agreements at telephonic and
in-person meetings held during April and May 2006. Each Board, including the
independent directors, approved the applicable New Investment Advisory
Agreement at a meeting held on May 12, 2006.
To assist each Fund's Board in its consideration of the Fund's New 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, 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 New
Investment Advisory Agreement. The additional information was provided in
advance of the May 12, 2006 meetings. In addition, each Fund's independent
directors 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' deliberations.
At each Fund's Board meetings, the directors 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 also inquired about the plans for and anticipated roles and
responsibilities of certain employees and officers of the Investment Adviser
and certain affiliates being transferred to BlackRock in connection with the
Transaction. The independent directors 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 met in executive
sessions with their counsel to consider the Fund's New Investment Advisory
Agreement.
In connection with each Board's review of the New Investment Advisory
Agreement, Merrill Lynch and/or BlackRock advised the directors about a
variety of matters. The advice included the following, among other matters:
* that there is not expected to be any diminution in the nature, quality and
extent of services provided to each Fund and its shareholders by BlackRock
Advisors, including compliance services;
* that operation of New BlackRock as an independent investment management
firm will enhance its ability to attract and retain talented professionals;
* that each Fund should 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 has no present intention to alter any applicable expense
waivers or reimbursements currently in effect and, while it reserves 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 have
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 Investment Adviser (or its affiliates), respectively; and
* that Merrill Lynch and BlackRock would derive benefits from the Transaction
and that, as a result, they have a different financial interest in the
matters that were being considered than do Fund shareholders.
SEMI-ANNUAL REPORTS JANUARY 31, 2007
The directors 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 New Investment Advisory Agreement,
including the fact that neither Fund's schedule of total advisory fees will
increase by virtue of the Fund's New Investment Advisory Agreement, but
will remain the same;
* that in February 2006, each Fund's Board performed a full annual review of
the investment advisory agreement currently in effect for the Fund (each a
"Current Investment Advisory Agreement") as required by the 1940 Act and
determined that the Investment Adviser has the capabilities, resources and
personnel necessary to provide the advisory and administrative services
currently provided to the Fund; and that the advisory and/or management
fees to be paid by the Fund, taking into account any applicable agreed-upon
fee waivers and breakpoints, represented reasonable compensation to the
Investment Adviser in light of the services to be provided, the expected
costs to the Investment Adviser of providing those services, potential
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 considered relevant in the exercise of their
reasonable judgment; and
* that Merrill Lynch agreed to pay all expenses of each Fund in connection
with the Board's consideration of the New Investment Advisory Agreement and
related agreements and all costs of shareholder approval of the New
Investment Advisory Agreement and as a result the Fund would bear no costs
in obtaining shareholder approval of the New Investment Advisory Agreement.
Certain of these considerations are discussed in more detail below.
In its review of the New Investment Advisory Agreement, each Board assessed
the nature, scope and quality of the services to be provided to the applicable
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 New Investment Advisory Agreement, each 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 by each
Board 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 the renewal of
the Fund's Current Investment Advisory Agreement, the Board had requested and
received materials specifically relating to the Current 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 Investment Adviser of the Current
Investment Advisory Agreement and other payments received by the Investment
Adviser and its affiliates from the Fund; and (e) information provided by the
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 Investment Adviser and its affiliates from their
relationship with the Fund.
SEMI-ANNUAL REPORTS JANUARY 31, 2007
Disclosure of Investment Advisory Agreement (continued)
In their deliberations, each Fund's directors considered information received
in connection with their recent continuation of the Fund's Current 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 New Investment Advisory Agreement. Neither Fund's
directors identified any particular information that was all-important or
controlling, and each director attributed different weights to the various
factors. The directors of each Fund, including a majority of the independent
directors, concluded that the terms of the Fund's New 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 New 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, extent and quality of services provided by the 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
Investment Adviser's advisory services and the Fund's investment performance,
but also considered certain areas in which both the Investment Adviser and the
Fund receive services as part of the Merrill Lynch complex. Each Fund's Board
compared the Fund's 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, 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 the New Investment Advisory Agreement, each Fund's
directors considered, among other things, the expected impact of the
Transaction on the operations, facilities, organization and personnel of New
BlackRock 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 current investment and other practices of the Fund.
Each Fund's directors 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 were advised that, as a result of Merrill Lynch's equity
interest in BlackRock after the Transaction, the Fund will 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 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 receipt of such
revised regulatory relief. There can be no assurance that such relief will
be obtained.
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 determined that the nature and quality of services to be provided to
the Fund under the New Investment Advisory Agreement were expected to be as
good as or better than that provided under the Fund's Current Investment
Advisory Agreement. It was noted, however, that it is expected that there will
be changes in personnel following the Transaction and the combination of the
operations of the Investment Adviser and its affiliates with those of
BlackRock. Each Fund's directors noted that if current portfolio managers or
other personnel cease to be available, the Board would consider all available
options, which could include seeking the investment advisory or other services
of BlackRock affiliates. Accordingly, each Fund's directors concluded that,
overall, they were satisfied at the present time with assurances from BlackRock
and BlackRock Advisors as to the expected nature, extent and quality of the
services to be provided to the Fund under its New Investment Advisory
Agreement.
Costs of Services Provided and Profitability--It was noted that, in
conjunction with their recent review of each Fund's Current Investment
Advisory Agreement, the Fund's directors had received, among other things, a
report from Lipper comparing the Fund's expected fees and expenses to those of
a peer group selected by Lipper, and information as to the fees charged by the
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.
SEMI-ANNUAL REPORTS JANUARY 31, 2007
In evaluating the costs of the services to be provided by BlackRock Advisors
under each Fund's New Investment Advisory Agreement, the Fund's directors
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 each New Investment Advisory Agreement is
substantially similar to the applicable Current Investment Advisory Agreement
in all material respects, including the rate of compensation, each Fund's
directors 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 noted that it was not
possible to predict how the Transaction would affect BlackRock Advisors'
profitability from its relationship with the Fund.
Each Fund's directors discussed with BlackRock Advisors its general
methodology to be used in determining its profitability with respect to its
relationship with the Fund. The directors noted that they expect to receive
profitability information from BlackRock Advisors 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
Fund's Board determined that changes were not currently necessary.
In reviewing the Transaction, the directors considered, among other things,
whether advisory fees or other expenses would change as a result of the
Transaction. Based on the fact that each New Investment Advisory Agreement is
substantially similar to the applicable Current Investment Advisory Agreement
in all material respects, including the rate of compensation, each Fund's
directors determined that as a result of the Transaction, the Fund's total
advisory fees would be no higher than the fees under the current Investment
Advisory Agreement. Each Fund's directors noted that in conjunction with their
most recent deliberations concerning the Current Investment Advisory
Agreement, they had determined that the expected total fees for advisory and
administrative services for the Fund were reasonable in light of the services
to be provided. It was noted that in conjunction with the recent review of
each Current Investment Advisory Agreement, each Fund's directors had
received, among other things, a report from Lipper comparing the Fund's
expected fees and expenses to those of a peer group selected by Lipper, and
information as to the fees charged by the Investment Adviser or its affiliates
to other registered investment company clients for investment management
services. Each Fund's directors concluded that, because the rates for advisory
fees for the Fund would be no higher than its current fee rates, 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 New Investment Advisory Agreement, each Fund's
directors considered whether the Transaction would have an impact on the fall-
out benefits received by the Investment Adviser by virtue of the Current
Investment Advisory Agreement. Based on their review of the materials
provided, including materials received in connection with their most recent
approval of the Current Investment Advisory Agreement, and their discussions
with management of the Investment Adviser and BlackRock, each Fund's directors
determined that those benefits could include increased ability for BlackRock
to distribute shares of its funds and other investment products. The directors
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.
SEMI-ANNUAL REPORTS JANUARY 31, 2007
Disclosure of Investment Advisory Agreement (concluded)
Investment Performance--Each Fund's directors considered investment performance
for the Fund. Each Fund's directors compared the Fund's 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. 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 Investment
Adviser's investment goals, the Board attaches more importance over relatively
long periods of time, typically three to five years. Each Fund's directors
believed the Fund's performance was satisfactory. Also, the directors took
into account the investment performance of funds currently 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 of each Fund deliberated in
executive session, the Fund's entire Board, including the independent
directors, approved the Fund's New Investment Advisory Agreement, concluding
that the advisory fee rate was reasonable in relation to the services provided
and that the New Investment Advisory Agreement was in the best interests of
the Fund's shareholders. In approving the New Investment Advisory Agreement,
each Board noted that it anticipated reviewing the continuance of the
agreement in advance of the expiration of the initial two-year period.
Contingent BlackRock Sub-Advisory Agreements--Matters Considered by the Boards
At the telephonic and in-person meetings held during April and May 2006 at
which each Board of Directors discussed and approved the New Investment
Advisory Agreement, each Board, including the independent directors, also
considered and approved a contingent sub-advisory agreement (each a
"Contingent Sub-Advisory Agreement") between the Investment Adviser and
BlackRock Advisors (the "BlackRock Sub-Adviser"). Each Fund's Contingent Sub-
Advisory Agreement is intended to ensure that the Fund operates with efficient
portfolio management services until the closing of the Transaction, in the
event that the Fund's Board deems it necessary and in the best interests of
the Fund and its shareholders that the BlackRock Sub-Adviser assist in
managing the operations of the Fund during the interim period until the
closing of the Transaction. Each Fund's Contingent Sub-Advisory Agreement
would take effect only upon recommendation from the Investment Adviser and
upon subsequent approval of the Fund's Board in the period up to the closing
of the Transaction. The effectiveness of each Fund's Contingent Sub-Advisory
Agreement, therefore, is contingent on further Board approval. Pursuant to
each Contingent Sub-Advisory Agreement, the BlackRock Sub-Adviser would
receive a monthly fee from the Investment Adviser equal to 50% of the advisory
fee received by the Investment Adviser. The Investment Adviser would pay the
BlackRock Sub-Adviser out of its own resources. There would be no increase in
either Fund's expenses as a result of the Contingent Sub-Advisory Agreement.
In making its approval at the May in-person meeting, each Board considered the
Contingent Sub-Advisory Agreement in conjunction with the New Investment
Advisory Agreement and reviewed the same information and factors discussed
above, and came to the same conclusions. Each Fund's Board also considered in
conjunction with the Contingent Sub-Advisory Agreement the necessity of
ensuring that the Fund operates with effective management services until the
closing of the Transaction. In reviewing the sub-advisory fee rate provided in
each Fund's Contingent Sub-Advisory Agreement, the Fund's Board took note of
the fact that both the Investment Adviser and the BlackRock Sub-Adviser would
have significant responsibilities under their respective advisory agreements.
The Investment Adviser would remain responsible for oversight of each Fund's
operations and administration and the BlackRock Sub-Adviser would provide
advisory services to the Fund under the Contingent Sub-Advisory Agreement.
Each Fund's Board also took into account the expected short duration of the
term of any Contingent Sub-Advisory Agreement and the fact that total advisory
fees paid by the Fund would not increase as a result of the Contingent Sub-
Advisory Agreement. Under all of the circumstances, each Fund's Board
concluded that it was a reasonable allocation of fees for the BlackRock Sub-
Adviser to receive 50% of the advisory fee paid by the Fund to the Investment
Adviser.
After the independent directors of each Fund deliberated in executive session,
the Fund's entire Board, including the independent directors, approved the
applicable Contingent Sub-Advisory Agreement, concluding that the advisory fee
was reasonable in relation to the services provided and that the Contingent
Sub-Advisory Agreement was in the best interests of the Fund's shareholders.
SEMI-ANNUAL REPORTS JANUARY 31, 2007
New BlackRock Sub-Advisory Agreements--Matters Considered by the Boards
At an in-person meeting held on August 14 - 16, 2006, each Fund's Board of
Directors, including the independent directors, discussed and approved the sub-
advisory agreement with respect to each Fund between BlackRock Advisors, LLC
(previously organized as BlackRock Advisors, Inc.) ("BlackRock Advisors") and
its affiliate, BlackRock Investment Management, LLC (the "Sub-Adviser") (each,
a "BlackRock Sub-Advisory Agreement"). Each BlackRock Sub-Advisory Agreement
became effective on September 29, 2006, at the same time the Fund's New
Investment Advisory Agreement with BlackRock Advisors (which had been approved
by the Fund's shareholders) became effective.
Pursuant to each BlackRock Sub-Advisory Agreement, the Sub-Adviser receives a
monthly fee from BlackRock Advisors at an annual rate 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 either Fund as a result of the BlackRock Sub-Advisory Agreements.
In approving each BlackRock Sub-Advisory Agreement at the August in-person
meeting, each Fund's Board reviewed its considerations in connection with its
approval of the New 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 New Investment
Advisory Agreement, and came to the same conclusions. Each Fund's Board
considered all relevant factors and did not indentify any particular
information that was controlling. In reviewing the sub-advisory fee rate
provided for 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. Under
the New Investment Advisory Agreement, BlackRock Advisors remains responsible
for the overall management of each Fund and for oversight of each Fund's
operations and administration. Under each Fund's BlackRock Sub-Advisory
Agreement, the Sub-Adviser provides advisory services to the Fund and is
responsible for the day-to-day management of the Fund's portfolio. 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. Based on its considerations, each Fund's Board concluded
that it was a reasonable allocation of fees for the Sub-Adviser to receive a
fee at an annual rate equal to 59% of the advisory fee paid by the Fund to
BlackRock Advisors.
After each Fund's independent directors deliberated in executive session, each
Fund's entire Board, including the independent directors, 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 the Fund's shareholders.
SEMI-ANNUAL REPORTS JANUARY 31, 2007
Officers and Directors
Robert C. Doll, Jr., President and Director
Ronald W. Forbes, Director
Cynthia A. Montgomery, Director
Jean Margo Reid, Director
Roscoe S. Suddarth, Director
Richard R. West, Director
Donald C. Burke, Vice President and Treasurer
John M. Loffredo, Senior Vice President
Jeffrey Hiller, Fund Chief Compliance Officer
Alice A. Pellegrino, Secretary
Custodian
The Bank of New York
100 Church Street
New York, NY 10286
Transfer Agents
Common Stock:
The Bank of New York
101 Barclay Street--11 East
New York, NY 10286
Preferred Stock:
The Bank of New York
101 Barclay Street--7 West
New York, NY 10286
Effective January 1, 2007, Edward D. Zinbarg retired as a Director of
BlackRock MuniHoldings Fund II, Inc. and BlackRock MuniHoldings New Jersey
Insured Fund, Inc. The Funds' Boards of Directors wish Mr. Zinbarg well in his
retirement.
Investment Objectives
NYSE Symbol BlackRock MuniHoldings Fund II, Inc. seeks to provide shareholders
MUH with current income exempt from federal income taxes 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.
NYSE Symbol BlackRock MuniHoldings New Jersey Insured Fund, Inc. seeks to
MUJ provide shareholders with current income exempt from federal
income tax and New Jersey personal income taxes by investing 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 tax and New Jersey personal income
taxes.
SEMI-ANNUAL REPORTS JANUARY 31, 2007
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 calling 1-800-SEC-0330.
Electronic Delivery
Electronic copies of most financial reports and prospectuses are available on
the Fund's Web site. Shareholders can sign up for e-mail notifications of
quarterly statements, annual and semi-annual reports and prospectuses by
enrolling in the Fund's electronic delivery program.
To enroll:
Shareholders Who Hold Accounts with Investment Advisers, Banks or Brokerages:
Please contact your financial advisor. Please note that not all investment
advisers, banks or brokerages may offer this service.
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.
SEMI-ANNUAL REPORTS JANUARY 31, 2007
Item 2 - Code of Ethics - Not Applicable to this semi-annual report
Item 3 - Audit Committee Financial Expert - Not Applicable to this semi-
annual report
Item 4 - Principal Accountant Fees and Services - Not Applicable to this
semi-annual report
Item 5 - Audit Committee of Listed Registrants - Not Applicable to this
semi-annual report
Item 6 - Schedule of Investments - Not Applicable
Item 7 - Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies - Not Applicable to this semi-annual
report
Item 8 - Portfolio Managers of Closed-End Management Investment Companies -
as of January 31, 2007
(a)(1) BlackRock MuniHoldings New Jersey Insured Fund, Inc. is
managed by a team of investment professionals comprised of Timothy
T. Browse, Vice President 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. Browse 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. Browse has been the Fund's
portfolio manager since 2006.
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. Browse joined BlackRock in 2006. Prior to joining BlackRock, he
was a Vice President (Municipal Tax-Exempt Fund Management) of MLIM
from 2004 to 2006. He has been a portfolio manager with BlackRock
or MLIM since 2004.
(a)(2) As of January 31, 2007:
(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
Timothy T.
Browse 17 0 0 0 1 0
$ 4,036,289,538 $ 0 $ 0 $ 0 $ 0 $ 0
Walter
O'Connor 80 0 0 0 1 0
$ 28,926,024,170 $ 0 $ 0 $ 0 $ 0 $ 0
Theodore R.
Jaeckel, Jr. 80 0 0 0 1 0
$ 28,926,024,170 $ 0 $ 0 $ 0 $ 26,524,194 $ 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 January 31, 2007:
Portfolio Manager Compensation
Compensation Program
The elements of total compensation for portfolio managers on
BlackRock's municipal team include 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 these portfolio managers with a powerful incentive to
achieve consistently superior investment performance. By design,
compensation levels for these portfolio managers fluctuate--both up
and down--with the relative investment performance of the portfolios
that they manage.
Base compensation
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,
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 single-
state, closed-end, New Jersey 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 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.
Long-Term Retention and Incentive Plan (LTIP)
The LTIP is a long-term incentive plan that seeks to reward
certain key employees. The plan provides for the grant of awards
that are expressed as an amount of cash that, if properly vested and
subject to the attainment of certain performance goals, will be
settled in cash and/or in BlackRock, Inc. common stock.
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 the 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 BlackRock mutual funds (including their own
fund) 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 employees of BlackRock and its
affiliates, including broad-based retirement, 401(k), health, and
other employee benefit plans.
(a)(4) Beneficial Ownership of Securities. As of January 31, 2007,
neither of Messrs. Browse, Jaeckel or 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 as of March, 2007 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 had 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 the Registrant's 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 at January 31, 2006. 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"). As a result, these controls did not detect that
certain transfers were not appropriately recorded as borrowings.
Accordingly, the Registrant's financial statements as of and for the
period ended January 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.
Prior to the evaluation of the design and operation of the
Registrant's disclosure controls and procedures at March, 2007, the
Registrant's disclosure controls and procedures were modified to
enhance the review and analysis of the relevant terms and conditions
of transfers of securities in connection with inverse floater
structures in light 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, as of March 2007, the Registrant has enhanced
controls related to the application of SFAS 140.
Item 12 - Exhibits attached hereto
12(a)(1) - Code of Ethics - Not Applicable to this semi-annual report
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 MuniHoldings New Jersey Insured Fund, Inc.
By: /s/ Robert C. Doll, Jr.
-----------------------
Robert C. Doll, Jr.,
Chief Executive Officer of
BlackRock MuniHoldings New Jersey Insured Fund, Inc.
Date: March 26, 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 MuniHoldings New Jersey Insured Fund, Inc.
Date: March 26, 2007
By: /s/ Donald C. Burke
-------------------
Donald C. Burke,
Chief Financial Officer of
BlackRock MuniHoldings New Jersey Insured Fund, Inc.
Date: March 26, 2007