UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-Q
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANY
Investment Company Act file number 811-6660
Name of Fund: MuniYield Quality Fund, Inc.
Fund Address: P.O. Box 9011
Princeton, NJ 08543-9011
Name and address of agent for service: Terry K. Glenn, President, MuniYield
Quality 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: 10/31/04
Date of reporting period: 05/01/04 - 07/31/04
Item 1 - Schedule of Investments
MuniYield Quality Fund, Inc.
Schedule of Investments as of July 31, 2004 (in Thousands)
S&P Moody's Face
State Ratings Ratings Amount Municipal Bonds Value
===================================================================================================================================
Alaska - 0.5% AAA Aaa $ 2,100 Alaska State International Airports Revenue Bonds, Series B, $ 2,342
5.75% due 10/01/2019(a)
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Arizona - 1.1% AAA NR* 2,345 Maricopa County, Arizona, Public Finance Corporation, Lease 2,840
Revenue Bonds, RIB, Series 511X, 9.64% due 7/01/2014(a)(k)
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AAA Aaa 2,000 Mesa, Arizona, IDA Revenue Bonds (Discovery Health Systems), 2,237
Series A, 5.875% due 1/01/2014(h)
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California - 19.5% AAA Aaa 4,150 Alameda Corridor Transportation Authority, California, Revenue 2,720
Refunding Bonds, Subordinated Lien, Series A, 5.525%**
due 10/01/2025(a)
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California State Department of Water Resources, Power Supply
Revenue Bonds, Series A:
BBB+ A2 1,400 5.375% due 5/01/2021 1,470
AAA Aaa 1,000 5.375% due 5/01/2022(h) 1,063
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California State, GO, Refunding:
BBB A3 5,700 5.25% due 9/01/2026 5,750
AAA Aaa 7,700 5.25% due 2/01/2030(h) 7,858
AAA Aaa 6,000 5.25% due 2/01/2030(l) 6,123
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AAA NR* 2,850 California State, GO, Refunding, ROCS, Series II-R-272, 9.328% 2,920
due 2/01/2033(j)(k)
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Portfolio Abbreviations
To simplify the listings of MuniYield Quality Fund, Inc.'s portfolio holdings in
the Schedule of Investments, we have abbreviated the names of many of the
securities according to the list below.
AMT Alternative Minimum Tax (subject to)
COP Certificates of Participation
DRIVERS Derivative Inverse Tax-Exempt Receipts
EDA Economic Development Authority
GO General Obligation Bonds
HDA Housing Development Authority
HFA Housing Finance Agency
IDA Industrial Development Authority
IDB Industrial Development Board
PCR Pollution Control Revenue Bonds
RIB Residual Interest Bonds
RITR Residual Interest Trust Receipts
ROCS Reset Option Certificates
S/F Single-Family
1
MuniYield Quality Fund, Inc.
Schedule of Investments as of July 31, 2004 (continued) (in Thousands)
S&P Moody's Face
State Ratings Ratings Amount Municipal Bonds Value
===================================================================================================================================
California California State, Various Purpose, GO:
(concluded) BBB Aaa $ 3,300 5.50% due 4/01/2028 $ 3,433
BBB A3 2,500 5.25% due 11/01/2029 2,513
BBB A3 3,200 5.50% due 11/01/2033 3,312
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Golden State Tobacco Securitization Corporation of California,
Tobacco Settlement Revenue Bonds:
AAA NR* 7,080 RIB, Series RR II 287X, 10.07% due 6/01/2038(k)(m) 7,767
AAA NR* 5,000 RIB, Series RR II 285X, 9.816% due 6/01/2043(k)(l) 5,324
BBB- Baa1 4,050 Series B, 5.60% due 6/01/2028 4,070
AAA Aaa 3,000 Series B, 5.50% due 6/01/2033(l) 3,130
AAA Aaa 1,870 Series B, 5.625% due 6/01/2033(l) 1,968
AAA Aaa 4,500 Series B, 5% due 6/01/2038(a) 4,392
AAA Aaa 1,600 Series B, 5.50% due 6/01/2043(l) 1,652
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San Diego, California, Unified School District, Election 1998,
GO, Series D(d):
AAA Aaa 3,945 5.25% due 7/01/2022 4,176
AAA Aaa 2,700 5.25% due 7/01/2024 2,830
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AAA Aaa 16,895 San Francisco, California, City and County, COP (San Bruno Jail 17,205
No. 3), 5.25% due 10/01/2033(a)
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Colorado - 7.7% Colorado Health Facilities Authority Revenue Bonds, Series A:
AA Aa2 1,650 (Catholic Health Initiatives), 5.50% due 3/01/2032 1,686
AA NR* 1,600 (Covenant Retirement Communities Inc.), 5.50% 1,645
due 12/01/2027(j)
AA NR* 1,000 (Covenant Retirement Communities Inc.), 5.50% 1,023
due 12/01/2033(j)
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Colorado Housing and Finance Authority, Revenue Refunding Bonds,
AMT:
AAA Aaa 1,720 (S/F Program), Series B-2, 6.80% due 2/01/2031(h) 1,829
AAA Aaa 960 (S/F Program), Series C-2, 8.40% due 10/01/2021(e)(h) 973
AAA Aaa 1,410 Series C-2, 7.05% due 4/01/2031(e)(h) 1,425
AAA Aaa 2,285 Series C-2, 7.25% due 10/01/2031(a) 2,302
AAA Aaa 480 Series E-2, 7% due 2/01/2030(h) 482
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AAA Aaa 4,000 Denver, Colorado, City and County Airport Revenue Bonds, AMT, 4,866
Series D, 7.75% due 11/15/2013(h)
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AAA Aaa 6,405 Denver, Colorado, City and County, COP, Series B, 5.75% 7,346
due 12/01/2010(a)(i)
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AAA Aaa 16,000 Northwest Parkway, Colorado, Public Highway Authority, Capital 11,725
Appreciation Revenue Bonds, Senior Convertible, Series C,
5.332%** due 6/15/2025(f)
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District of AAA Aaa 2,500 District of Columbia, Revenue Refunding Bonds (Catholic University 2,630
Columbia - 0.6% of America Project), 5.625% due 10/01/2029(a)
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2
MuniYield Quality Fund, Inc.
Schedule of Investments as of July 31, 2004 (continued) (in Thousands)
S&P Moody's Face
State Ratings Ratings Amount Municipal Bonds Value
===================================================================================================================================
Florida - 0.7% AA NR* $ 2,240 Beacon Tradeport Community Development District, Florida, $ 2,330
Special Assessment Revenue Refunding Bonds (Commercial Project),
Series A, 5.625% due 5/01/2032(j)
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AAA Aaa 700 South Miami, Florida, Health Facilities Authority, Hospital 713
Revenue Bonds (Baptist Health System Obligation Group), 5.25%
due 11/15/2033(a)
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Georgia - 1.2% A A3 4,785 Monroe County, Georgia, Development Authority, PCR, Refunding 5,578
(Oglethorpe Power Corporation-Scherer), Series A, 6.80%
due 1/01/2011
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Hawaii - 0.5% AAA Aaa 2,000 Hawaii State, GO, Series CX, 5.50% due 2/01/2021(f) 2,161
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Illinois - 19.4% Chicago, Illinois, Board of Education, GO(a):
AAA Aaa 1,750 (Chicago School Reform Project), Series A, 5.25% 1,776
due 12/01/2030
NR* Aaa 5,000 RIB, Series 467, 10.14% due 12/01/2027(k) 6,107
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Chicago, Illinois, Capital Appreciation, GO, Project and
Refunding, Series A(h):
AAA Aaa 1,000 5.422%** due 1/01/2027 733
AAA Aaa 1,000 5.435%** due 1/01/2028 729
AAA Aaa 1,000 5.448%** due 1/01/2029 726
AAA Aaa 1,000 5.46%** due 1/01/2030 737
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Chicago, Illinois, GO (Lakefront Millennium Parking
Facilities)(h):
AAA Aaa 5,000 5.125% due 1/01/2028 5,047
AAA Aaa 2,500 5.444%** due 1/01/2029 2,379
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AAA Aaa 5,000 Chicago, Illinois, O'Hare International Airport, General Airport 5,223
Revenue Refunding Bonds, Third Lien, AMT, Series A, 5.50%
due 1/01/2022(h)
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Chicago, Illinois, O'Hare International Airport Revenue Bonds,
3rd Lien, AMT, Series B-2:
AAA Aaa 3,400 5.75% due 1/01/2023(f) 3,642
AAA Aaa 4,000 5.75% due 1/01/2024(f) 4,269
AAA Aaa 3,300 6% due 1/01/2029(l) 3,548
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Chicago, Illinois, O'Hare International Airport Revenue Refunding
Bonds, AMT:
AAA Aaa 2,665 3rd Lien, Series A-2, 5.75% due 1/01/2021(f) 2,880
AAA NR* 6,835 DRIVERS, Series 250, 10.094% due 1/01/2021(h)(k) 7,941
-----------------------------------------------------------------------------------------------------------
AAA Aaa 6,200 Cook County, Illinois, Capital Improvement, GO, Series C, 5.50% 6,532
due 11/15/2026(a)
-----------------------------------------------------------------------------------------------------------
AAA Aaa 2,130 Illinois Development Finance Authority Revenue Bonds 2,321
(Presbyterian Home Lake Project), Series B, 6.25% due 9/01/2017(f)
-----------------------------------------------------------------------------------------------------------
AAA Aaa 3,750 Illinois Sports Facilities Authority Revenue Bonds, 5.433%** 2,805
due 6/15/2030(a)
-----------------------------------------------------------------------------------------------------------
AAA Aaa 10,000 Illinois State, GO, First Series, 5.50% due 8/01/2018(f) 10,943
-----------------------------------------------------------------------------------------------------------
3
MuniYield Quality Fund, Inc.
Schedule of Investments as of July 31, 2004 (continued) (in Thousands)
S&P Moody's Face
State Ratings Ratings Amount Municipal Bonds Value
===================================================================================================================================
Illinois (concluded) NR* A1 $ 3,750 Illinois Student Assistance Commission, Student Loan Revenue $ 3,756
Refunding Bonds, AMT, Sub-Series CC, 6.875% due 3/01/2015
-----------------------------------------------------------------------------------------------------------
NR* Aaa 5,295 Kane and De Kalb Counties, Illinois, Community Unity School 5,880
District Number 302, GO, 5.80% due 2/01/2022(d)
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Metropolitan Pier and Exposition Authority, Illinois, Dedicated
State Tax Revenue Refunding Bonds (McCormick Place Expansion
Project):
AAA Aaa 7,000 5.50% due 12/15/2024(d) 7,453
AAA Aaa 3,500 Series B, 5.75% due 6/15/2023(h) 3,836
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Indiana - 2.4% De Kalb County, Indiana, Redevelopment Authority Revenue Bonds
(Mini-Mill), Series A(b):
AAA Aaa 3,000 6.50% due 1/15/2014 3,127
AAA Aaa 3,220 6.625% due 1/15/2017 3,351
-----------------------------------------------------------------------------------------------------------
AAA Aaa 2,500 Indiana Bond Bank Revenue Bonds, Guarantee State Revolver, 2,618
6.875% due 2/01/2005(a)(i)
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AAA Aaa 2,000 Indianapolis, Indiana, Local Public Improvement Bond Bank Revenue 2,043
Bonds (Waterworks Project), Series A, 5.25% due 7/01/2033(h)
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Kentucky - 1.5% AAA Aaa 6,570 Lexington-Fayette Urban County Government, Kentucky, Governmental 6,791
Program Revenue Bonds (University of Kentucky Alumni Association Inc.
Project), 6.75% due 11/01/2004(h)(i)
-----------------------------------------------------------------------------------------------------------------------------------
Louisiana - 4.1% AAA Aaa 8,500 Louisiana Local Government, Environmental Facilities, Community 9,752
Development Authority Revenue Bonds (Capital Projects and
Equipment Acquisition), Series A, 6.30% due 7/01/2030(a)
-----------------------------------------------------------------------------------------------------------
AAA Aaa 6,800 New Orleans, Louisiana, Ernest N. Morial Exhibit Hall Authority, 6,994
Special Tax, Sub-Series A, 5.25% due 7/15/2028(a)
-----------------------------------------------------------------------------------------------------------
AAA Aaa 1,900 Terrebonne Parish, Louisiana, Hospital Service District Number 1, 1,975
Hospital Revenue Bonds (Terrebonne General Medical Center Project),
5.50% due 4/01/2033(a)
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Massachusetts - 5.4% Massachusetts Bay, Massachusetts, Transportation Authority,
General Transportation System, Revenue Refunding Bonds,
Series A(h):
AAA Aaa 3,730 7% due 3/01/2011 4,480
AAA Aaa 3,550 7% due 3/01/2014 4,364
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AAA Aaa 7,005 Massachusetts State, HFA, Rental Housing Mortgage Revenue Bonds, 7,147
AMT, Series C, 5.60% due 1/01/2045 (f)
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Massachusetts State, HFA, S/F Housing Revenue Bonds(h):
AAA Aaa 1,135 6.35% due 6/01/2017 1,163
AAA Aaa 1,175 Series 37, 6.35% due 6/01/2017 1,204
-----------------------------------------------------------------------------------------------------------
AAA Aaa 3,825 Massachusetts State Port Authority, Special Facilities Revenue 3,876
Bonds (Delta Air Lines Inc. Project), AMT, Series A, 5.50%
due 1/01/2019(a)
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4
MuniYield Quality Fund, Inc.
Schedule of Investments as of July 31, 2004 (continued) (in Thousands)
S&P Moody's Face
State Ratings Ratings Amount Municipal Bonds Value
===================================================================================================================================
Massachusetts AAA Aaa $ 2,400 Massachusetts State Special Obligation Dedicated Tax Revenue $ 2,478
(concluded) Bonds, 5.25% due 1/01/2028(d)
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Michigan - 5.6% Detroit, Michigan, City School District, GO, Series A(f):
AAA Aaa 4,000 5.50% due 5/01/2019 4,378
AAA Aaa 3,625 5.50% due 5/01/2020 3,945
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AAA Aaa 3,040 Michigan Higher Education Student Loan Authority, Student Loan 3,125
Revenue Refunding Bonds, AMT, Series XVII-G, 5.20%
due 9/01/2020(a)
-----------------------------------------------------------------------------------------------------------
Michigan State Strategic Fund, Limited Obligation Revenue
Refunding Bonds (Detroit Edison Company Project)(l):
AAA Aaa 3,100 5.45% due 9/01/2029 3,229
AAA Aaa 1,700 AMT, Series A, 5.50% due 6/01/2030 1,746
AAA Aaa 3,300 AMT, Series C, 5.65% due 9/01/2029 3,406
AAA Aaa 5,800 AMT, Series C, 5.45% due 12/15/2032 5,903
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Nebraska - 0.5% A+ NR* 2,300 Washington County, Nebraska, Wastewater Facilities Revenue Bonds 2,404
(Cargill Inc. Project), AMT, 5.90% due 11/01/2027
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Nevada - 4.2% AA NR* 4,100 Carson City, Nevada, Hospital Revenue Bonds (Carson-Tahoe 4,194
Hospital Project), Series A, 5.50% due 9/01/2033(j)
-----------------------------------------------------------------------------------------------------------
AAA Aaa 3,000 Clark County, Nevada, Airport System Subordinate Lien Revenue 3,040
Bonds, Series B, 5.25% due 7/01/2034(d)
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Director of the State of Nevada, Department of Business and
Industry Revenue Bonds (Las Vegas Monorail Company Project),
First Tier(a):
AAA Aaa 1,000 5.625% due 1/01/2032 1,059
AAA Aaa 4,400 5.375% due 1/01/2040 4,495
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AAA Aaa 5,710 Washoe County, Nevada, School District, GO, 5.875% 6,485
due 12/01/2009(f)(i)
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New Hampshire - AAA Aaa 10,000 New Hampshire Health and Education Facilities Authority Revenue 10,563
3.5% Bonds (Dartmouth-Hitchcock Obligation Group, 5.50%
due 8/01/2027(f)
-----------------------------------------------------------------------------------------------------------
AAA Aaa 5,000 New Hampshire State Business Finance Authority, PCR, Refunding 5,495
(Public Service Company), AMT, Series D, 6% due 5/01/2021(h)
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New Jersey - 1.1% BBB Baa3 5,700 Tobacco Settlement Financing Corporation of New Jersey Revenue 5,135
Bonds, 6.75% due 6/01/2039
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New York - 10.4% AAA Aaa 700 Erie County, New York, IDA, School Facility Revenue Bonds (City 771
of Buffalo Project), 5.75% due 5/01/2023(f)
-----------------------------------------------------------------------------------------------------------
AAA Aaa 8,085 New York City, New York, City Municipal Water Finance Authority, 9,338
Water and Sewer System Revenue Bonds, RITR, Series FR-6, 10.15%
due 6/15/2026(h)(k)
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5
MuniYield Quality Fund, Inc.
Schedule of Investments as of July 31, 2004 (continued) (in Thousands)
S&P Moody's Face
State Ratings Ratings Amount Municipal Bonds Value
===================================================================================================================================
New York New York City, New York, GO:
(concluded) AAA NR* $ 3,500 DRIVERS, Series 194, 10.147% due 2/01/2015(f)(k) $ 3,926
NR* Aaa 6,920 RIB, Series 394, 10.362% due 8/01/2016(h)(k) 8,771
AAA Aaa 9,325 Refunding, Series G, 5.75% due 2/01/2017(f) 9,886
AAA Aaa 5,000 Series B, 5.875% due 8/15/2013(l) 5,424
AAA Aaa 3,235 Series F, 5.75% due 2/01/2006(i) 3,470
AAA Aaa 1,425 Series F, 5.75% due 2/01/2019(l) 1,511
-----------------------------------------------------------------------------------------------------------
AAA Aaa 4,570 Tobacco Settlement Financing Corporation of New York Revenue 4,756
Bonds, Series A-1, 5.25% due 6/01/2022(a)
-----------------------------------------------------------------------------------------------------------------------------------
Ohio - 1.0% AAA Aaa 2,500 Columbus, Ohio, City School District, GO (School Facilities 2,590
Construction and Improvements), 5.25% due 12/01/2027(f)
-----------------------------------------------------------------------------------------------------------
AA NR* 2,000 Jackson, Ohio, Hospital Facilities Revenue Bonds (Consolidated 2,211
Health System-Jackson Hospital), 6.125% due 10/01/2020(j)
-----------------------------------------------------------------------------------------------------------------------------------
Oklahoma - 0.8% Tulsa, Oklahoma, Airports Improvement Trust, General Revenue
Bonds (Tulsa International Airport), AMT(d):
AAA Aaa 1,250 Series A, 6% due 6/01/2020 1,430
AAA Aaa 1,000 Series B, 6% due 6/01/2019 1,094
AAA Aaa 1,000 Series B, 6.125% due 6/01/2026 1,080
-----------------------------------------------------------------------------------------------------------------------------------
Oregon - 2.0% NR* Aaa 7,500 Portland, Oregon, Sewer System Revenue Bonds, RIB, Series 386, 9,151
10.09% due 8/01/2020(d)(k)
-----------------------------------------------------------------------------------------------------------------------------------
Pennsylvania - 7.3% AAA Aaa 2,000 Allegheny County, Pennsylvania, Port Authority, Special 2,277
Transportation Revenue Bonds, 6% due 3/01/2009(h)(i)
-----------------------------------------------------------------------------------------------------------
AAA Aaa 800 Allegheny County, Pennsylvania, Sanitation Authority, Sewer 834
Revenue Bonds, 5.50% due 12/01/2030(h)
-----------------------------------------------------------------------------------------------------------
Pennsylvania State Public School Building Authority, School
Lease Revenue Bonds (The School District of Philadelphia
Project)(f):
AAA Aaa 6,000 5.25% due 6/01/2025 6,218
AAA Aaa 7,000 5% due 6/01/2033 6,936
-----------------------------------------------------------------------------------------------------------
AAA Aaa 6,250 Philadelphia, Pennsylvania, Authority for Industrial Development, 6,765
Lease Revenue Bonds, Series B, 5.50% due 10/01/2021(f)
-----------------------------------------------------------------------------------------------------------
Philadelphia, Pennsylvania, School District, GO, Series B(d):
AAA Aaa 1,500 5.625% due 8/01/2020 1,626
AAA Aaa 3,670 5.625% due 8/01/2021 3,960
AAA Aaa 2,000 5.625% due 8/01/2022 2,150
-----------------------------------------------------------------------------------------------------------
AAA Aaa 2,400 Washington County, Pennsylvania, Capital Funding Authority 2,748
Revenue Bonds (Capital Projects and Equipment Program),
6.15% due 12/01/2029(a)
-----------------------------------------------------------------------------------------------------------
6
MuniYield Quality Fund, Inc.
Schedule of Investments as of July 31, 2004 (continued) (in Thousands)
S&P Moody's Face
State Ratings Ratings Amount Municipal Bonds Value
===================================================================================================================================
Rhode Island - 0.6% AAA Aaa $ 2,500 Providence, Rhode Island, GO, Series A, 5.70% due 7/15/2019(f) $ 2,723
-----------------------------------------------------------------------------------------------------------------------------------
South Carolina - AAA Aaa 2,900 Florence County, South Carolina, Hospital Revenue Refunding Bonds 2,942
3.0% (McLeod Regional Medical Center Project), Series A, 5.25%
due 11/01/2034(f)
-----------------------------------------------------------------------------------------------------------
AA Ba1 1,450 South Carolina Educational Facilities Authority for Private 1,510
Nonprofit Institutions Revenue Bonds (The Benedict College),
5.625% due 7/01/2031(j)
-----------------------------------------------------------------------------------------------------------
AAA NR* 3,045 South Carolina State Public Service Authority, Revenue Refunding 3,415
Bonds, DRIVERS, Series 277, 10.122% due 1/01/2022(h)(k)
-----------------------------------------------------------------------------------------------------------
NR* A1 3,800 Spartanburg County, South Carolina, Solid Waste Disposal 3,987
Facilities Revenue Bonds (BMW Project), AMT, 7.55% due 11/01/2024
-----------------------------------------------------------------------------------------------------------
BBB Baa3 2,250 Tobacco Settlement Revenue Management Authority of South Carolina, 1,929
Tobacco Settlement Revenue Bonds, Series B, 6.375% due 5/15/2030
-----------------------------------------------------------------------------------------------------------------------------------
Tennessee - 6.3% AAA Aaa 17,000 Chattanooga, Tennessee, IDB, Lease Rent Revenue Bonds 18,829
(Southside Redevelopment Corporation), 5.875% due 10/01/2024(a)
-----------------------------------------------------------------------------------------------------------
AAA Aaa 5,000 Memphis-Shelby County, Tennessee, Airport Authority, Airport 5,569
Revenue Bonds, AMT, Series D, 6.25% due 3/01/2018(a)
-----------------------------------------------------------------------------------------------------------
Tennessee HDA, Homeownership Revenue Bonds, AMT, Series 2-C(a):
AAA Aaa 2,075 6.10% due 7/01/2013 2,188
AA Aa2 2,390 6.20% due 7/01/2015 2,533
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Texas - 14.3% Austin, Texas, Convention Center Revenue Bonds (Convention
Enterprises Inc.), Trust Certificates, Second Tier, Series B:
NR* Aa3 4,000 6% due 1/01/2023 4,005
NR* Aa3 1,400 5.75% due 1/01/2032 1,347
-----------------------------------------------------------------------------------------------------------
NR* Aaa 1,000 Bell County, Texas, Health Facilities Development Revenue Bonds 1,197
(Lutheran General Health Care System), 6.50% due 7/01/2019(c)
-----------------------------------------------------------------------------------------------------------
Dallas-Fort Worth, Texas, International Airport Revenue Refunding
and Improvement Bonds, AMT, Series A(d):
AAA Aaa 1,835 5.875% due 11/01/2017 2,030
AAA Aaa 2,145 5.875% due 11/01/2018 2,364
AAA Aaa 2,385 5.875% due 11/01/2019 2,619
-----------------------------------------------------------------------------------------------------------
NR* Aaa 5,235 Denton, Texas, Utility System Revenue Bonds, RIB, Series 369, 6,653
10.59% due 12/01/2017(f)(k)
-----------------------------------------------------------------------------------------------------------
Gregg County, Texas, Health Facilities Development Corporation,
Hospital Revenue Bonds (Good Shepherd Medical Center Project)(j):
AA Baa2 6,000 6.875% due 10/01/2020 6,943
AA Baa2 2,600 6.375% due 10/01/2025 2,900
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7
MuniYield Quality Fund, Inc.
Schedule of Investments as of July 31, 2004 (continued) (in Thousands)
S&P Moody's Face
State Ratings Ratings Amount Municipal Bonds Value
===================================================================================================================================
Texas AAA Aaa $ 4,000 Harris County, Houston, Texas, Sports Authority Revenue Refunding $ 4,378
(concluded) Bonds, Senior Lien, Series G, 5.75% due 11/15/2020(h)
-----------------------------------------------------------------------------------------------------------
AAA Aaa 2,700 Houston, Texas, Airport System Revenue Refunding Bonds, Sub-Lien, 2,814
Series B, 5.50% due 7/01/2030(f)
-----------------------------------------------------------------------------------------------------------
AA Baa2 2,800 Sam Rayburn, Texas, Municipal Power Agency, Revenue Refunding 2,991
Bonds, 5.75% due 10/01/2021(j)
-----------------------------------------------------------------------------------------------------------
AAA Aaa 7,200 Texas State Turnpike Authority, Central Texas Turnpike System 7,696
Revenue Bonds, First Tier, Series A, 5.75% due 8/15/2038(a)
-----------------------------------------------------------------------------------------------------------
Travis County, Texas, Health Facilities Development Corporation,
Revenue Refunding Bonds (Ascension Health Credit), Series A(i):
AAA Aaa 8,100 5.875% due 11/15/2009(a) 9,226
AAA Aaa 4,600 6.25% due 11/15/2009(h) 5,323
-----------------------------------------------------------------------------------------------------------
AAA NR* 2,900 White Settlement, Texas, Independent School District, GO, 5.75% 3,113
due 8/15/2034
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Utah - 3.8% AAA Aaa 15,000 Salt Lake City, Utah, Hospital Revenue Refunding Bonds (IHC 17,517
Hospitals Inc.), 6.30% due 2/15/2015(h)
-----------------------------------------------------------------------------------------------------------------------------------
Virginia - 2.2% AAA Aaa 6,000 Fairfax County, Virginia, EDA, Resource Recovery Revenue 6,661
Refunding Bonds, AMT, Series A, 6.05% due 2/01/2009(a)
-----------------------------------------------------------------------------------------------------------
AAA Aaa 3,100 Halifax County, Virginia, IDA, Exempt Facility Revenue Refunding 3,256
Bonds (Old Dominion Electric Cooperative Project), AMT, 5.625%
due 6/01/2028(a)
-----------------------------------------------------------------------------------------------------------------------------------
Washington - 8.8% AAA NR* 10,000 Energy Northwest, Washington, Electric Revenue Bonds, DRIVERS, 12,324
Series 242, 10.127% due 7/01/2017(h)(k)
-----------------------------------------------------------------------------------------------------------
AAA Aaa 2,835 King County, Washington, Sewer Revenue Refunding Bonds, Series 2,974
B, 5.50% due 1/01/2027(f)
-----------------------------------------------------------------------------------------------------------
AAA A1 2,400 Port of Tacoma, Washington, Revenue Refunding Bonds, Series A, 2,451
5.25% due 12/01/2034 (a)
-----------------------------------------------------------------------------------------------------------
Washington State, GO(f):
AAA Aaa 7,500 Series A and AT-6, 6.25% due 2/01/2011 8,671
AAA Aaa 9,000 Series S-4, 5.75% due 1/01/2013 10,024
-----------------------------------------------------------------------------------------------------------
AAA Aaa 3,750 Washington State, Various Purpose, GO, Series C, 5.25% 3,837
due 1/01/2026(f)
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Wisconsin - 0.7% BBB Baa3 2,600 Badger, Wisconsin, Tobacco Asset Securitization Corporation, 2,220
Asset-Backed Revenue Bonds, 6.375% due 6/01/2032
-----------------------------------------------------------------------------------------------------------
NR* Aaa 1,000 Milwaukee County, Wisconsin, Airport Revenue Bonds, AMT, Series 1,050
A, 5.75% due 12/01/2025(d)
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8
MuniYield Quality Fund, Inc.
Schedule of Investments as of July 31, 2004 (continued) (in Thousands)
S&P Moody's Face
Ratings Ratings Amount Municipal Bonds Value
===================================================================================================================================
Puerto Rico - 0.7% AAA Aaa $ 2,435 Puerto Rico Electric Power Authority, Power Revenue Bonds, $ 3,129
Trust Receipts, Class R, Series 16 HH, 10.07% due 7/01/2013(f)(k)
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Total Municipal Bonds (Cost - $613,249) - 141.4% 649,298
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Shares
Held Short-Term Securities
-----------------------------------------------------------------------------------------------------------------------------------
3,370 Merrill Lynch Institutional Tax-Exempt Fund(g) 3,370
-----------------------------------------------------------------------------------------------------------------------------------
Total Short-Term Securities (Cost - $3,370) - 0.7% 3,370
-----------------------------------------------------------------------------------------------------------------------------------
Total Investments (Cost - $616,619***) - 142.1% 652,668
Other Assets Less Liabilities - 1.4% 6,702
Preferred Stock, at Redemption Value - (43.5%) (200,020)
---------
Net Assets Applicable to Common Stock - 100.0% $ 459,350
=========
(a) AMBAC Insured.
(b) Connie Lee Insured.
(c) Escrowed to maturity.
(d) FGIC Insured.
(e) FHA Insured.
(f) FSA Insured.
(g) Investments in companies considered to be an affiliate of the Fund (such
companies are defined as "Affiliated Companies" in Section 2(a)(3) of the
Investment Company Act of 1940) were as follows:
(in Thousands)
--------------------------------------------------------------------------
Affiliate Net Activity Dividend Income
--------------------------------------------------------------------------
Merrill Lynch Institutional Tax-Exempt Fund (7,100) $ 57
--------------------------------------------------------------------------
(h) MBIA Insured.
(i) Prerefunded.
(j) Radian Insured.
(k) The interest rate is subject to change periodically and inversely based
upon prevailing market rates. The interest rate shown is the rate in
effect at July 31, 2004.
(l) XL Capital Insured.
(m) CIFG Insured.
9
MuniYield Quality Fund, Inc.
Schedule of Investments as of July 31, 2004 (concluded)
* Not Rated.
** Represents a zero coupon bond; the interest rate shown reflects the
effective yield at the time of purchase by the Fund.
*** The cost and unrealized appreciation/depreciation of investments as of
July 31, 2004, as computed for federal income tax purposes, were as
follows:
(in Thousands)
--------------------------------------------------------------------------
Aggregate cost $ 616,619
=========
Gross unrealized appreciation $ 37,706
Gross unrealized depreciation (1,657)
---------
Net unrealized appreciation $ 36,049
=========
Forward interest rate swaps outstanding as of July 31, 2004 were as
follows:
(in Thousands)
--------------------------------------------------------------------------
Notional Unrealized
Amount Depreciation
--------------------------------------------------------------------------
Receive a variable rate equal to 7-Day
Bond Market Association Municipal Swap
Index Rate and pay a fixed rate equal
to 4.051%
Broker, J.P. Morgan Chase Bank
Expires September 2014 $ 20,000 $ (462)
Receive a variable rate equal to 7-Day
Bond Market Association Municipal Swap
Index Rate and pay a fixed rate equal
to 4.595%
Broker, J.P. Morgan Chase Bank
Expires September 2024 $ 52,000 (2,102)
Receive a variable rate equal to 7-Day
Bond Market Association Municipal Swap
Index Rate and pay a fixed rate equal
to 4.5425%
Broker, Morgan Stanley Capital Services, Inc.
Expires September 2024 $ 14,000 (409)
--------------------------------------------------------------------------
Total $ (2,973)
========
10
Item 2 - Controls and Procedures
2(a) - The registrant's certifying officers have reasonably designed such
disclosure controls and procedures to ensure material information
relating to the registrant is made known to us by others particularly
during the period in which this report is being prepared. The
registrant's certifying officers have determined that the registrant's
disclosure controls and procedures are effective based on our evaluation
of these controls and procedures as of a date within 90 days prior to the
filing date of this report.
2(b) - There were no changes in the registrant's internal control over financial
reporting (as defined in Rule 30a-3(d) under the Act (17 CFR
270.30a-3(d)) that occurred during the last fiscal quarter of the period
covered by this report that has materially affected, or is reasonably
likely to materially affect, the registrant's internal control over
financial reporting.
Item 3 - Exhibits
Certifications - Attached hereto
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
MuniYield Quality Fund, Inc.
By: /s/ Terry K. Glenn
-----------------------
Terry K. Glenn,
President of
MuniYield Quality Fund, Inc.
Date: September 17, 2004
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/ Terry K. Glenn
-----------------------
Terry K. Glenn,
President of
MuniYield Quality Fund, Inc.
Date: September 17, 2004
By: /s/ Donald C. Burke
-----------------------
Donald C. Burke,
Chief Financial Officer of
MuniYield Quality Fund, Inc.
Date: September 17, 2004