May 15, 2012 at 13:04 PM EDT
Fitch Takes Various Rating Actions on VRDP Shares Issued by 24 BlackRock Municipal Closed-End Funds

Fitch Ratings has taken various rating actions on $3.2 billion of variable rate demand preferred shares (VRDP Shares) issued by 24 municipal closed-end funds managed by BlackRock Advisors, LLC. A complete list of rating actions and description of each fund's VRDP Shares follows at the end of this press release.

SUMMARY OF RATING ACTIONS:

Short-term ratings:

--Fitch downgrades the short-term rating of one series of VRDP Shares to 'F1' from 'F1+' following a corresponding downgrade of its liquidity provider JP Morgan Chase Bank, N.A. (JP Morgan) to 'A+/F1' from 'AA-/F1+' by Fitch.

--Fitch affirms the 'F1' short-term rating assigned to 23 others series of VRDP Shares that benefit from the liquidity support of Morgan Stanley Bank, N.A. (Morgan Stanley, rated 'A/F1'), Citibank, N.A. (Citibank, rated 'A/F1') and Bank of America, N.A. (Bank of America, rated 'A/F1').

Long-term ratings:

--Fitch affirms the 'AAA' long-term ratings assigned to all 24 series of VRDP Shares.

KEY RATING DRIVERS

The 'F1' short-term ratings primarily reflect:

--The credit strength of each VRDP Shares' liquidity provider, as reflected by the short-term rating assigned by Fitch to that liquidity provider;

--The terms and conditions of the VRDP Shares purchase agreement (the purchase agreement).

The 'AAA' long-term rating primarily reflects:

--Sufficient asset coverage provided to the VRDP Shares as calculated per the fund's asset coverage tests;

--The structural protections afforded by mandatory collateral maintenance and de-leveraging provisions in the event of asset coverage declines;

--The legal and regulatory parameters that govern the fund's operations.

Both the short- and long-term ratings reflect the capabilities of BlackRock Advisors, LLC. as investment advisor.

TENDER AND REMARKETING

The VRDP Shares benefit from a feature giving investors the right to tender the securities with a seven-day notice for remarketing. The VRDP Shares are also subject to a mandatory tender for remarketing upon the occurrence of certain events, such as non-payment of dividends by the fund, announcement of a special rate period, among others. VRDP Shares that are unsuccessfully remarketed are purchased by the liquidity providers.

The VRDP Shares have a 30-year mandatory final maturity and pay an adjustable dividend rate set weekly by the remarketing agents (or any subsequent replacements). Should any weekly remarketing be unsuccessful, the dividend rate will reset to a maximum rate as defined in transactional documents.

The Bank of New York Mellon (rated 'AA-/F1+' by Fitch) serves as the tender and paying agent for the VRDP Shares, and as such, provides remarketing results to the holders of VRDP Shares, tender and deliver non-clearing VRDP Shares from holders to the liquidity providers, and notifies the holders of VRDP Shares of a non-renewal or termination of the purchase agreement, among other duties.

PURCHASE OBLIGATION

The VRDP Shares are supported by purchase agreements (each renewed on an annual basis) to ensure full and timely repayment of the liquidation preference amount plus any accumulated and unpaid dividends to holders upon occurrence of certain events. Each agreement requires the corresponding liquidity provider to purchase all VRDP Shares tendered for sale that were not successfully remarketed. The liquidity provider must also purchase all outstanding VRDP Shares if the fund has not obtained an alternate purchase agreement prior to the termination of the purchase agreement being replaced or following the downgrade of the liquidity provider's ratings below 'F2' (or equivalent).

The purchase of VRDP Shares pursuant to the purchase agreement is unconditional and irrevocable, and as such the short-term ratings assigned to the VRDP Shares are directly linked to the short-term creditworthiness of the liquidity provider.

ASSET COVERAGE

As of end of April 2012, each funds' asset coverage ratio, as calculated in accordance with the Fitch total and net over-collateralization tests per the 'AAA' rating guidelines outlined in Fitch's criteria, were in excess of 100%, which is the minimum threshold required under the VRDP Shares' transactional documents.

As of the same date, each funds' asset coverage ratio for the VRDP Shares, as calculated in accordance with the Investment Company Act of 1940, were in excess of the minimum asset coverage threshold of 225% as currently set by the terms of the fee agreement between each fund and the liquidity provider and the VRDP Shares' transactional documents.

Each fund has also covenanted with the liquidity provider to maintain an effective leverage ratios for both VRDP Shares and floating-rate certificates of tender option bonds below 45% (or 46% if the increase in the ratio is due exclusively to asset market value volatility). Each fund's Effective Leverage Ratio is currently below 45%.

In the event of asset coverage decline, the VRDP Shares' transactional documents require a fund to reduce leverage in order to restore compliance with the particular test(s) breaching the required threshold(s).

FUND PROFILES

The funds are non-diversified, closed-end management investment companies regulated by the Investment Company Act of 1940. The funds seek to provide shareholders with high current income exempt from federal income taxes. For single-state funds, an additional objective exists to providing income that is exempt from state income taxes. Under normal circumstances, all funds are expected to invest primarily in assets that are rated at least 'BBB' by Fitch or equivalent.

FUND ADVISOR

BlackRock Advisors, LLC, a subsidiary of BlackRock, Inc., is the advisor to the funds, responsible for the overall investment strategies and their implementation. BlackRock, Inc. and its affiliates had approximately $3.513 trillion of assets under management as of Dec. 31, 2011.

RATINGS SENSITIVITY

The ratings assigned to the VRDP Shares may be sensitive to material changes in the leverage composition, portfolio credit quality, portfolio diversification or market risk of the fund, as described above. A material adverse deviation from Fitch guidelines for any key rating driver could cause ratings to be lowered by Fitch.

The short-term ratings assigned to the VRDP Shares may also be sensitive to changes in the financial condition of the liquidity providers. A downgrade of a liquidity provider to 'F2' would result in a downgrade of the short-term rating of the corresponding VRDP Shares to 'F2,' absent other mitigants. However a downgrade of the liquidity provider below 'F2' would not necessarily result in a further corresponding downgrade given the acceleration features in the transaction documents for the VRDP Shares that would result in a mandatory tender of the VRDP Shares for purchase by the liquidity provider.

RATING ACTIONS

VRDPS WITH JP MORGAN AS THE LIQUIDITY PROVIDER:

BlackRock Muni Intermediate Duration Fund, Inc. (NYSE: MUI)

--VRDP Shares, series W-7, due Apr 2041, with a liquidation preference of $100,000 per share, long-term rating affirmed at 'AAA' and short-term rating downgraded to 'F1' from 'F1+'.

VRDPS WITH MORGAN STANLEY AS THE LIQUIDITY PROVIDER:

BlackRock Municipal Income Investment Trust (NYSE: BBF)

--VRDP Shares, series W-7, due Oct 2041, with a liquidation preference of $100,000 per share, affirmed at 'AAA/F1';

BlackRock New York Municipal Income Trust II (NYSE: BFY)

--VRDP Shares, series W-7, due Oct 2041, with a liquidation preference of $100,000 per share, affirmed at 'AAA/F1';

BlackRock Municipal Bond Investment Trust (NYSE: BIE)

--VRDP Shares, series W-7, due Oct 2041, with a liquidation preference of $100,000 per share, affirmed at 'AAA/F1';

BlackRock New York Municipal Bond Trust (NYSE: BQH)

--VRDP Shares, series W-7, due Oct 2041, with a liquidation preference of $100,000 per share, affirmed at 'AAA/F1';

BlackRock New York Municipal Income Quality Trust (NYSE: BSE)

--VRDP Shares, series W-7, due Oct 2041, with a liquidation preference of $100,000 per share, affirmed at 'AAA/F1';

BlackRock Muni New York Intermediate Duration Fund, Inc. (NYSE: MNE)

--VRDP Shares, series W-7, due Oct 2041, with a liquidation preference of $100,000 per share, affirmed at 'AAA/F1';

BlackRock MuniYield Quality Fund, Inc. (NYSE: MQY)

--VRDP Shares, series W-7, due Oct 2041, with a liquidation preference of $100,000 per share, affirmed at 'AAA/F1';

VRDPS WITH CITIBANK AS THE LIQUIDITY PROVIDER:

BlackRock MuniYield California Quality Fund, Inc. (NYSE: MCA)

--VRDP Shares, series W-7, due May 2041, with a liquidation preference of $100,000 per share, affirmed at 'AAA/F1';

BlackRock MuniEnhanced Fund, Inc. (NYSE: MEN)

--VRDP Shares, series W-7, due June 2041, with a liquidation preference of $100,000 per share, affirmed at 'AAA/F1';

BlackRock MuniYield Michigan Quality Fund, Inc. (NYSE: MIY)

--VRDP Shares, series W-7, due May 2041, with a liquidation preference of $100,000 per share, affirmed at 'AAA/F1';

BlackRock MuniYield Pennsylvania Quality Fund (NYSE: MPA)

--VRDP Shares, series W-7, due June 2041, with a liquidation preference of $100,000 per share, affirmed at 'AAA/F1';

BlackRock MuniYield California Fund, Inc. (NYSE: MYC)

--VRDP Shares, series W-7, due June 2041, with a liquidation preference of $100,000 per share, affirmed at 'AAA/F1';

BlackRock MuniYield Investment Fund (NYSE: MYF)

--VRDP Shares, series W-7, due June 2041, with a liquidation preference of $100,000 per share, affirmed at 'AAA/F1';

BlackRock MuniYield Quality Fund III, Inc. (NYSE: MYI)

--VRDP Shares, series W-7, due June 2041; with a liquidation preference of $100,000 per share, affirmed at 'AAA/F1';

BlackRock MuniYield New Jersey Fund, Inc. (NYSE: MYJ)

--VRDP Shares, series W-7, due May 2041, with a liquidation preference of $100,000 per share, affirmed at 'AAA/F1';

BlackRock MuniYield Michigan Quality Fund II, Inc. (NYSE: MYM)

--VRDP Shares, series W-7, due June 2041, with a liquidation preference of $100,000 per share, affirmed at 'AAA/F1';

BlackRock MuniYield New York Quality Fund, Inc. (NYSE: MYN)

--VRDP Shares, series W-7, due May 2041, with a liquidation preference of $100,000 per share, affirmed at 'AAA/F1';

BlackRock MuniYield Arizona Fund, Inc. (NYSE: MZA)

--VRDP Shares, series W-7, due June 2041, with a liquidation preference of $100,000 per share, affirmed at 'AAA/F1';

VRDPS WITH BANK OF AMERICA AS THE LIQUIDITY PROVIDER:

BlackRock MuniHoldings New Jersey Quality Fund, Inc. (NYSE: MUJ)

--VRDP Shares, series W-7, due July 2041, with a liquidation preference of $100,000 per share, affirmed at 'AAA/F1';

BlackRock MuniHoldings New York Quality Fund, Inc. (NYSE: MHN)

--VRDP Shares, series W-7, due July 2041, with a liquidation preference of $100,000 per share, affirmed at 'AAA/F1';

BlackRock MuniYield New Jersey Quality Fund, Inc. (NYSE: MJI)

--VRDP Shares, series W-7, due July 2041, with a liquidation preference of $100,000 per share, affirmed at 'AAA/F1';

BlackRock MuniHoldings Investment Quality Fund (NYSE: MFL)

--VRDP Shares, series W-7, due July 2041, with a liquidation preference of $100,000 per share, affirmed at 'AAA/F1';

BlackRock MuniYield Fund, Inc. (NYSE: MYD)

--VRDP Shares, series W-7, due July 2041, with a liquidation preference of $100,000 per share, affirmed at 'AAA/F1';

For additional information about Fitch rating guidelines applicable to debt and preferred stock issued by closed-end funds, please review the criteria referenced below, which can be found on Fitch's web site at 'www.fitchratings.com'.

To opt in to Fitch's complimentary closed-end fund research, follow the link below:

http://forms.fitchratings.com/forms/FAMCEFOptinform

Additional information is available at 'www.fitchratings.com'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.

The sources of information used to assess this rating were the public domain and BlackRock Advisors, LLC.

Applicable Criteria and Related Research:

--'Municipal CEFs Refinance Pre-Crisis ARPS' (May 3, 2012)

--'Leveraged Taxable CEFs: Bank Funding Drives ARPS' (May 3, 2012)

--'2012 Outlook: Closed-End Fund Leverage' (Dec. 19, 2011);

--'Closed-End Funds: Derivatives Under Review' (Nov. 16, 2011);

--'Primer: CEF Variable-Rate Demand Preferred Shares' (Oct. 27, 2011).

--'Rating Closed-End Fund Debt and Preferred Stock' (Aug. 16, 2011).

Applicable Criteria and Related Research:

Municipal CEFs Refinance Pre-Crisis ARPS

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=677576

Leveraged Taxable CEFs: Bank Funding Drives ARPS

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=677332

2012 Outlook: Closed-End Fund Leverage

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=660709

Closed-End Funds: Derivatives Under Review (Increased Use and Limited Transparency Are Key Considerations)

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=656591

Primer: CEF Variable-Rate Demand Preferred Shares (Closed-End Fund VRDPs Target Short-Term, Money Market Investors)

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=654295

Rating Closed-End Fund Debt and Preferred Stock

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=648840

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE.

Contacts:

Fitch Ratings
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New York, NY 10004
or
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or
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or
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brian.bertsch@fitchratings.com
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