N-Q 1 d386060dnq.htm BLACKROCK MUNIYIELD MICHIGAN QUALITY FUND, INC. BLACKROCK MUNIYIELD MICHIGAN QUALITY FUND, INC.

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 811-07080

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

Fund Address:    100 Bellevue Parkway, Wilmington, DE 19809

Name and address of agent for service: John M. Perlowski, Chief Executive Officer, BlackRock MuniYield

Michigan Quality Fund, Inc., 55 East 52nd Street, New York, NY 10055

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

Date of fiscal year end: 07/31/2017

Date of reporting period: 4/30/2017

Item 1 – Schedule of Investments

Schedule of Investments April 30, 2017 (Unaudited)

   

BlackRock MuniYield Michigan Quality Fund, Inc. (MIY)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

     Value  

Michigan — 137.9%

                 

Corporate — 4.0%

     

County of Monroe Michigan EDC, Refunding RB, Detroit Edison Co. Project, Series AA (NPFGC), 6.95%, 9/01/22

    $ 14,500     $ 18,085,125  

County/City/Special District/School District — 21.8%

 

Anchor Bay School District, GO, Refunding, (Q-SBLF):

     

4.38%, 5/01/27

      1,600       1,742,032  

4.50%, 5/01/29

      1,505       1,626,484  

Battle Creek School District Michigan, GO, Refunding, (Q-SBLF):

     

5.00%, 5/01/35

      1,100       1,237,401  

5.00%, 5/01/36

      1,500       1,682,415  

5.00%, 5/01/37

      1,170       1,308,434  

Berkley School District, GO, School Building & Site (Q-SBLF), 5.00%, 5/01/35

      2,965       3,312,765  

Columbia Michigan School District, GO, Unlimited Tax, School Building & Site (Q-SBLF), 5.00%, 5/01/38

      5,185       5,777,749  

Comstock Park Michigan Public Schools, GO, School Building & Site, Series B (Q-SBLF):

     

5.50%, 5/01/36

      1,200       1,349,184  

5.50%, 5/01/41

      2,185       2,456,639  

County of Genesee Michigan, GO, Refunding, Series A (NPFGC), 5.00%, 5/01/19

      1,000       1,019,860  

Dearborn Brownfield Redevelopment Authority, GO, Limited Tax, Redevelopment, Series A (AGC), 5.50%, 5/01/39

      5,300       5,674,286  

Dearborn School District, GO, School Building & Site, Series A (Q-SBLF):

     

5.00%, 5/01/32

      1,500       1,700,820  

5.00%, 5/01/33

      1,600       1,805,056  

5.00%, 5/01/34

      1,200       1,347,720  

Dowagiac Union School District, GO, (Q-SBLF), 5.00%, 5/01/41

      1,140       1,268,353  

Farmington Public School District, GO, Refunding, School Building & Site (AGM):

     

5.00%, 5/01/33

      1,500       1,696,200  

5.00%, 5/01/34

      1,500       1,688,280  

5.00%, 5/01/35

      1,000       1,121,770  
Municipal Bonds   

Par  

(000)

     Value  

Michigan (continued)

 

County/City/Special District/School District (continued)

 

Flint EDC, RB, Michigan Department of Human Services Office Building Project, 5.25%, 10/01/41

    $ 4,950     $ 5,285,363  

Goodrich Area School District Michigan, GO, School Building & Site (Q-SBLF):

     

5.50%, 5/01/32

      1,000       1,124,320  

5.50%, 5/01/36

      2,000       2,248,640  

5.50%, 5/01/41

      2,575       2,895,124  

Grand Rapids Public Schools, GO, Refunding Unlimited Tax (AGM), 5.00%, 5/01/29

      1,000       1,182,270  

Grandville Public Schools, GO, School Building & Site, Series II (AGM), 5.00%, 5/01/40

      3,250       3,583,125  

Hudsonville Michigan Public Schools, GO, School Building & Site (Q-SBLF), 5.25%, 5/01/41

      6,750       7,533,067  

Kentwood Public Schools, GO, School Building & Site:

     

5.00%, 5/01/41

      1,120       1,250,682  

5.00%, 5/01/44

      1,815       2,022,309  

Livonia Public Schools School District Michigan, GO, Series I (AGM), 5.00%, 5/01/43

      5,000       5,445,600  

Mattawan Consolidated School District, GO, Series I (Q-SBLF), 5.00%, 5/01/39

      3,375       3,740,816  

Portage Public Schools, GO, Refunding School Building & Site:

     

5.00%, 11/01/34

      1,000       1,129,880  

5.00%, 11/01/36

      1,000       1,121,610  

5.00%, 11/01/37

      1,250       1,397,900  

5.00%, 11/01/35

      1,340       1,507,379  

Romeo Community School District, GO, Refunding School Building & Site, Series 1 (Q-SBLF), 5.00%, 5/01/41

      2,250       2,512,530  

Thornapple Kellogg School District Michigan, GO, Refunding, School Building & Site (NPFGC) (Q-SBLF), 5.00%, 5/01/17 (a)

      3,000       3,001,080  

Township of Montrose Michigan Community Schools, GO, (NPFGC) (Q-SBLF), 6.20%, 5/01/17

      210       210,074  

Troy School District, GO, School Building & Site (Q-SBLF), 5.00%, 5/01/28

      2,000       2,310,300  
 

 

                
   BLACKROCK MUNIYIELD MICHIGAN QUALITY FUND, INC.    APRIL 30, 2017    1

Schedule of Investments (continued)

   

BlackRock MuniYield Michigan Quality Fund, Inc. (MIY)

 

Municipal Bonds   

Par  

(000)

     Value  

Michigan (continued)

                 

County/City/Special District/School District (continued)

 

Walled Lake Consolidated School District, GO, School Building & Site (Q-SBLF):

     

5.00%, 5/01/37

    $ 2,850     $ 3,177,608  

5.00%, 5/01/40

      2,630       2,920,825  

5.00%, 5/01/43

      1,530       1,694,444  

Zeeland Public Schools, GO, School Building & Site, Series A (AGM):

     

5.00%, 5/01/33

      1,000       1,114,310  

5.00%, 5/01/34

      1,000       1,109,130  

5.00%, 5/01/35

      1,000       1,104,700  
    

 

 

  
               98,438,534  

Education — 25.6%

 

City of Grand Rapids Michigan, EDC, RB, Ferris State University Project, Series A, 5.50%, 10/01/35

      760       835,559  

Ferris State University, Refunding RB:

     

5.00%, 10/01/41

      2,250       2,503,620  

General (AGM), 4.50%, 10/01/24

      1,595       1,667,269  

General (AGM), 4.50%, 10/01/25

      1,405       1,468,661  

Grand Valley State University, RB, (NPFGC), 5.50%, 2/01/18

      390       398,791  

Michigan Finance Authority, Refunding RB:

     

College for Creative Studies, 4.00%, 12/01/33

      1,720       1,697,348  

College for Creative Studies, 5.00%, 12/01/36

      1,550       1,628,895  

College for Creative Studies, 5.00%, 12/01/40

      2,900       3,027,165  

College for Creative Studies, 5.00%, 12/01/45

      4,400       4,580,092  

Series 25 A, AMT, Student Loan Revenue, 4.00%, 11/01/28

      8,750       8,953,437  

Series 25 A, AMT, Student Loan Revenue, 4.00%, 11/01/29

      5,900       6,002,660  

Series 25 A, AMT, Student Loan Revenue, 4.00%, 11/01/30

      2,850       2,885,853  

Series 25 A, AMT, Student Loan Revenue, 4.00%, 11/01/31

      3,150       3,181,027  
Municipal Bonds   

Par  

(000)

     Value  

Michigan (continued)

 

Education (continued)

 

Michigan State University, Refunding RB, General, Series C:

     

5.00%, 2/15/40

    $ 8,470     $ 9,161,914  

5.00%, 2/15/44

      1,000       1,081,690  

Michigan Technological University, RB, General, Series A, 5.00%, 10/01/45

      1,800       1,978,938  

Oakland University, RB:

     

5.00%, 3/01/41

      3,635       4,040,557  

General, 5.00%, 3/01/32

      400       443,204  

General, Series A, 5.00%, 3/01/38

      5,490       6,061,729  

General, Series A, 5.00%, 3/01/43

      16,845       18,523,604  

University of Michigan, RB, Series A, 5.00%, 4/01/39

      3,425       3,857,235  

University of Michigan, Refunding RB, 5.00%, 4/01/46

      10,000       11,446,100  

Wayne State University, RB, General, Series A, 5.00%, 11/15/40

      3,000       3,294,360  

Western Michigan University, Refunding RB, General, University and College Improvements:

     

5.25%, 11/15/40

      3,500       3,938,725  

5.25%, 11/15/43

      8,475       9,451,405  

(AGM), 5.25%, 11/15/33

      1,000       1,132,200  

(AGM), 5.00%, 11/15/39

      1,750       1,923,863  
    

 

 

  
               115,165,901  

Health — 36.9%

 

Grand Traverse County Hospital Finance Authority, RB, Series A:

     

5.00%, 7/01/44

      4,230       4,587,393  

5.00%, 7/01/47

      2,200       2,381,544  

Kalamazoo Hospital Finance Authority, RB, (AGM), Bronson Methodist Hospital:

     

5.25%, 5/15/20 (a)

      4,140       4,626,698  

5.25%, 5/15/36

      3,360       3,606,926  

Kent Hospital Finance Authority Michigan, Refunding RB, Spectrum Health, Series A, 5.00%, 11/15/29

      7,500       8,273,550  

Michigan Finance Authority, RB:

     

Beaumont Health Credit Group, 4.00%, 11/01/46

      1,025       1,036,060  

Sparrow Obligated Group, 5.00%, 11/15/36

      2,500       2,739,000  
 

 

                
2    BLACKROCK MUNIYIELD MICHIGAN QUALITY FUND, INC.    APRIL 30, 2017   

Schedule of Investments (continued)

   

BlackRock MuniYield Michigan Quality Fund, Inc. (MIY)

 

Municipal Bonds   

Par  

(000)

     Value  

Michigan (continued)

 

Health (continued)

 

Michigan Finance Authority, RB (continued):

     

Sparrow Obligated Group, 5.00%, 11/15/45

    $ 3,750     $ 4,097,475  

Michigan Finance Authority, Refunding RB:

     

Henry Ford Health System, 5.00%, 11/15/37

      3,000       3,326,520  

Henry Ford Health System, 3.25%, 11/15/42

      1,145       972,357  

Henry Ford Health System, 4.00%, 11/15/46

      11,000       10,793,860  

Hospital, McLaren Health Care, 5.00%, 5/15/32

      1,000       1,119,270  

Hospital, McLaren Health Care, 5.00%, 5/15/33

      2,000       2,228,080  

Hospital, McLaren Health Care, 5.00%, 5/15/34

      5,000       5,547,850  

Hospital, McLaren Health Care, 5.00%, 5/15/34

      1,500       1,664,355  

Hospital, McLaren Health Care, 5.00%, 5/15/35

      4,945       5,464,868  

MidMichigan Health, 5.00%, 6/01/39

      1,500       1,639,185  

Trinity Health Credit Group, 5.00%, 12/01/21 (a)

      20       23,157  

Trinity Health Credit Group, 5.00%, 12/01/31

      5,000       5,650,150  

Trinity Health Credit Group, 5.00%, 12/01/35

      6,500       7,308,730  

Trinity Health Credit Group, 5.00%, 12/01/39

      4,980       5,576,455  

Michigan State Hospital Finance Authority, RB, Ascension Health Senior Credit Group, 5.00%, 11/15/25

      6,000       6,485,820  

Michigan State Hospital Finance Authority, Refunding RB:

     

Henry Ford Health System, 5.75%, 11/15/19 (a)

      3,165       3,526,665  

Hospital, Oakwood Obligated Group, 5.00%, 11/01/32

      4,000       4,354,640  

Hospital, Oakwood Obligated Group, Series A, 5.00%, 7/15/17 (a)

      1,000       1,008,870  

Hospital, Oakwood Obligated Group, Series A, 5.00%, 7/15/17 (a)

      5,730       5,780,825  

Hospital, Oakwood Obligated Group, Series A, 5.00%, 7/15/17 (a)

      3,970       4,005,214  
Municipal Bonds   

Par  

(000)

     Value  

Michigan (continued)

 

Health (continued)

 

Michigan State Hospital Finance Authority, Refunding RB (continued):

     

Hospital, Sparrow Obligated Group, 5.00%, 11/15/17 (a)

    $ 3,330     $ 3,404,958  

Hospital, Sparrow Obligated Group, 5.00%, 11/15/31

      1,365       1,385,734  

McLaren Health Care, Series A, 5.75%, 5/15/18 (a)

      6,000       6,296,640  

McLaren Health Care, Series A, 5.00%, 6/01/35

      2,250       2,433,330  

Trinity Health, 6.50%, 12/01/18 (a)

      425       461,342  

Trinity Health, 6.50%, 12/01/33

      80       86,171  

Trinity Health Credit Group, 6.50%, 12/01/18 (a)

      1,895       2,057,041  

Trinity Health Credit Group, Series A, 6.13%, 12/01/18 (a)

      940       1,014,833  

Trinity Health Credit Group, Series A, 6.25%, 12/01/18 (a)

      1,500       1,622,355  

Trinity Health Credit Group, Series C, 4.00%, 12/01/32

      5,300       5,424,974  

Royal Oak Hospital Finance Authority Michigan, Refunding RB, William Beaumont Hospital:

     

Series D, 5.00%, 9/01/39

      28,005       30,646,992  

Series W, 6.00%, 8/01/19 (a)

      1,500       1,661,625  

Royal Oak Michigan Hospital Finance Authority, Refunding RB, William Beaumont Hospital, Series V, 8.25%, 9/01/18 (a)

      2,000       2,192,800  
    

 

 

  
               166,514,312  

Housing — 6.6%

 

Michigan State HDA, RB:

     

M/F Housing, Rental Housing Revenue, Series A, 4.45%, 10/01/34

      1,000       1,044,970  

M/F Housing, Rental Housing Revenue, Series A, 4.63%, 10/01/39

      3,490       3,603,949  

M/F Housing, Rental Housing Revenue, Series A, 4.75%, 10/01/44

      5,000       5,163,950  

M/F Housing, Series A, 4.30%, 10/01/40

      3,320       3,374,813  

S/F Housing, Series A, 4.75%, 12/01/25

      6,840       7,273,656  
 

 

                
   BLACKROCK MUNIYIELD MICHIGAN QUALITY FUND, INC.    APRIL 30, 2017    3

Schedule of Investments (continued)

   

BlackRock MuniYield Michigan Quality Fund, Inc. (MIY)

 

Municipal Bonds   

Par  

(000)

     Value  

Michigan (continued)

 

Housing (continued)

 

Michigan State HDA, RB (continued):

     

Williams Pavilion, AMT (Ginnie Mae), 4.75%, 4/20/37

    $ 3,340     $ 3,341,536  

Michigan State HDA, Refunding RB, M/F Housing, Series A, 6.05%, 10/01/41

      5,460       5,795,026  
    

 

 

  
               29,597,900  

State — 16.3%

 

Michigan Finance Authority, Refunding RB, Detroit Regional Convention Facility Authority Local Project Bonds, 5.00%, 10/01/39

      5,400       5,940,270  

Michigan State Finance Authority, RB, Local Government Loan Program, Series F, 5.00%, 4/01/31

      1,000       1,077,980  

Michigan Strategic Fund, RB, Michigan Senate Offices Project, Series A, 5.25%, 10/15/40

      3,000       3,339,840  

Michigan Strategic Fund, Refunding RB, Cadillac Place Office Building Project, 5.25%, 10/15/31

      7,000       7,896,280  

State of Michigan, COP, (AMBAC), 0.00%, 6/01/22 (b)(c)

      3,000       2,751,360  

State of Michigan Building Authority, RB, Local Government Loan Program, Series F, 5.25%, 10/01/41

      8,595       9,253,893  

State of Michigan Building Authority, Refunding RB:

     

Facilities Program, Series I, 6.25%, 10/15/18 (a)

      3,780       4,064,974  

Facilities Program, Series I, 6.25%, 10/15/18 (a)

      2,260       2,430,381  

Facilities Program, Series I, 6.25%, 10/15/38

      210       224,799  

Facilities Program, Series I (AGC), 5.25%, 10/15/24

      6,000       6,552,840  

Facilities Program, Series I (AGC), 5.25%, 10/15/25

      3,500       3,818,920  

Facilities Program, Series I (AGC), 5.25%, 10/15/26

      1,000       1,090,100  

Facilities Program, Series I-A, 5.50%, 10/15/45

      2,000       2,254,540  

Facilities Program, Series II (AGM), 5.00%, 10/15/26

      7,500       8,128,725  

Series I, 5.00%, 4/15/41

      4,750       5,295,443  
Municipal Bonds   

Par  

(000)

     Value  

Michigan (continued)

 

State (continued)

 

State of Michigan Trunk Line Fund, RB:

     

5.00%, 11/15/33

    $ 3,000     $ 3,381,150  

5.00%, 11/15/36

      5,345       6,006,764  
    

 

 

  
               73,508,259  

Transportation — 11.3%

 

State of Michigan, RB, Garvee, GAB (AGM), 5.25%, 9/15/17 (a)

      8,500       8,642,630  

Wayne County Airport Authority, RB:

     

Detroit Metropolitan Wayne County Airport, AMT (NPFGC), 5.00%, 12/01/39

      1,475       1,602,897  

Series D, 5.00%, 12/01/35

      3,850       4,242,161  

Series D, 5.00%, 12/01/45

      5,000       5,443,800  

Wayne County Airport Authority, Refunding RB, AMT:

     

(AGC), 5.75%, 12/01/25

      4,000       4,264,360  

(AGC), 5.75%, 12/01/26

      4,060       4,328,326  

(AGC), 5.38%, 12/01/32

      13,000       13,674,830  

Series F, 5.00%, 12/01/34

      8,000       8,877,280  
    

 

 

  
               51,076,284  

Utilities — 15.4%

 

City of Detroit Michigan Sewage Disposal System, Refunding RB, Senior Lien, Series A, 5.25%, 7/01/39

      2,655       2,863,922  

City of Detroit Michigan Water Supply System Revenue, RB, Series A:

     

Senior Lien, 5.25%, 7/01/41

      4,325       4,698,680  

(NPFGC), 5.00%, 7/01/34

      10       10,028  

City of Grand Rapids Michigan Sanitary Sewer System, Refunding RB, Series A (NPFGC), 5.50%, 1/01/22

      1,280       1,427,226  

City of Holland Michigan Electric Utility System, RB, Series A, 5.00%, 7/01/39

      10,000       11,219,200  

City of Lansing Michigan, RB, Board of Water & Light Utilities System, Series A:

     

5.00%, 7/01/27

      3,180       3,592,891  

5.00%, 7/01/31

      6,830       7,662,713  

5.00%, 7/01/37

      3,335       3,703,384  

5.50%, 7/01/41

      5,000       5,685,700  

City of Port Huron Michigan, RB, Water Supply System:

     

5.25%, 10/01/31

      500       537,055  
 

 

                
4    BLACKROCK MUNIYIELD MICHIGAN QUALITY FUND, INC.    APRIL 30, 2017   

Schedule of Investments (continued)

   

BlackRock MuniYield Michigan Quality Fund, Inc. (MIY)

 

Municipal Bonds   

Par  

(000)

     Value  

Michigan (continued)

 

Utilities (continued)

 

City of Port Huron Michigan, RB, Water Supply System (continued):

     

5.63%, 10/01/40

    $ 1,500     $ 1,641,810  

Great Lakes Water Authority Water Supply System Revenue, RB, Second Lien, Series B, 5.00%, 7/01/46

      10,000       10,833,000  

Michigan Finance Authority, Refunding RB:

     

Government Loan Program, 5.00%, 7/01/34

      2,000       2,217,600  

Government Loan Program, 5.00%, 7/01/35

      750       828,225  

Senior Lien, Detroit Water and Sewer, Series C-3 (AGM), 5.00%, 7/01/31

      1,000       1,131,650  

Senior Lien, Detroit Water and Sewer, Series C-3 (AGM), 5.00%, 7/01/32

      5,250       5,915,857  

Senior Lien, Detroit Water and Sewer, Series C-3 (AGM), 5.00%, 7/01/33

      3,000       3,366,090  

Michigan Municipal Bond Authority, RB, State Clean Water Revolving Fund, Pooled Project, 5.00%, 10/01/20 (a)

      2,000       2,248,140  
    

 

 

  
               69,583,171  
Total Municipal Bonds — 137.9%       621,969,486  
    
                  

Municipal Bonds Transferred to

Tender Option Bond Trusts (d)

        

Michigan — 24.7%

 

County/City/Special District/School District — 4.2%

 

Lakewood Public Schools Michigan, GO, School Building & Site (AGM) (Q-SBLF), 5.00%, 5/01/17 (a)

      10,440       10,928,905  

Portage Public Schools Michigan, GO, School Building & Site (AGM), 5.00%, 5/01/18 (a)

      7,500       7,809,525  
    

 

 

  
               18,738,430  

Municipal Bonds Transferred to

Tender Option Bond Trusts (d)

   

Par  

(000)

     Value  

Michigan (continued)

 

Education — 11.9%

 

Michigan State University, Refunding RB, General, Series A, 5.00%, 8/15/38

    $ 10,000     $ 11,329,500  

Saginaw Valley State University, Refunding RB, General (AGM), 5.00%, 7/01/18 (a)

      10,000       10,475,600  

Wayne State University, RB, General, Series A, 5.00%, 11/15/40

      10,000       10,981,200  

Wayne State University, Refunding RB, General (AGM):

     

5.00%, 11/15/18 (a)

      8,880       9,349,483  

5.00%, 11/15/35

      11,120       11,707,912  
    

 

 

  
        53,843,695  

Health — 7.3%

 

Michigan Finance Authority, RB, Beaumont Health Credit Group, 5.00%, 11/01/44

      10,002       10,981,960  

Michigan Finance Authority, Refunding RB:

     

Hospital, Trinity Health Credit Group, 5.00%, 12/01/39

      190       212,756  

Trinity Health Corp., Series 2016, 5.00%, 12/01/45

      19,735       21,731,753  
    

 

 

  
        32,926,469  

State — 1.3%

 

Michigan State Building Authority, Refunding RB, Facilities Program, Series I, 5.00%, 10/15/45

      5,150       5,683,798  

Total Municipal Bonds Transferred to

Tender Option Bond Trusts — 24.7%

 

 

     111,192,392  

Total Long-Term Investments

(Cost — $697,078,245) — 162.6%

 

 

     733,161,878  
    
                  
Short-Term Securities    Shares         

BlackRock Liquidity Funds, MuniCash, Institutional Class, 0.70% (e)(f)

      2,521,583       2,522,087  
Total Short-Term Securities
(Cost — $2,521,911) — 0.6%		       2,522,087  
 

 

                
   BLACKROCK MUNIYIELD MICHIGAN QUALITY FUND, INC.    APRIL 30, 2017    5

Schedule of Investments (continued)

   

BlackRock MuniYield Michigan Quality Fund, Inc. (MIY)

 

           Value  
Total Investments (Cost — $699,600,156*) — 163.2%   $ 735,683,965  
Other Assets Less Liabilities — 0.9%     4,577,576  

Liability for TOB Trust Certificates, Including Interest Expense and Fees Payable — (12.8)%

     (57,575,176 ) 

Loan for TOB Trust Certificates — (0.00)%

     (325,252 ) 

VRDP Shares at Liquidation Value, Net of Deferred Offering Costs — (51.3)%

     (231,463,714 ) 
    

 

 

  

Net Assets Applicable to Common Shares — 100.0%

   $ 450,897,399  
    

 

 

  

*  As of April 30, 2017, gross unrealized appreciation and depreciation

    based on cost for U.S. federal income tax purposes were as follows:

   

 

Tax cost

   $ 641,948,667  
    

 

 

  

Gross unrealized appreciation

   $ 37,801,649  

Gross unrealized depreciation

     (1,788,407 ) 
    

 

 

  

Net unrealized appreciation

   $ 36,013,242  
    

 

 

  
 
Notes to Schedule of Investments

 

(a)   U.S. Government securities, held in escrow, are used to pay interest on this security, as well as to retire the bond in full at the date indicated, typically at a premium to par.

 

(b)   Security is collateralized by municipal bonds or U.S. Treasury obligations.

 

(c)   Zero-coupon bond.

 

(d)   Represent bonds transferred to a TOB Trust in exchange of cash and residual certificates received by the Fund. These bonds serve as collateral in a secured borrowing.

 

(e)   During the period ended April 30, 2017, investments in issuers considered to be an affiliate of the Fund for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:

 

Affiliate      Shares Held
at July 31,
2016		        Net
Activity		        Shares Held
at April 30,
2017		        Value at
April 30,
2017		        Income        Net
Realized
Gain1		        Change in
Unrealized
Appreciation		  

BlackRock Liquidity Funds, MuniCash, Institutional Class

        4,096,066          (1,574,483 )         2,521,583        $ 2,522,087        $ 13,155        $ 441        $ 176  
1 Includes net capital gain distributions.                 

 

(f)   Current yield as of period end.

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

 

                
6    BLACKROCK MUNIYIELD MICHIGAN QUALITY FUND, INC.    APRIL 30, 2017   

Schedule of Investments (continued)

   

BlackRock MuniYield Michigan Quality Fund, Inc. (MIY)

 

 

Derivative Financial Instruments Outstanding as of Period End

 

Futures Contracts

 

Contracts
Short		        Issue   Expiration     Notional
Value		     Unrealized
Depreciation		  
  (91 )       5-Year U.S. Treasury Note     June 2017     $ 10,774,969     $ (48,215 ) 
  (233 )       10-Year U.S. Treasury Note     June 2017     $ 29,292,469       (256,177 ) 
  (157 )       Long U.S. Treasury Bond     June 2017     $ 24,016,094       (310,685 ) 
  (25 )       Ultra U.S. Treasury Bond     June 2017     $ 4,073,437       (78,157 ) 
  Total              $ (693,234 ) 
          

 

 

  

 

Portfolio Abbreviations

 

AGC    Assured Guarantee Corp.
AGM    Assured Guaranty Municipal Corp.
AMBAC    American Municipal Bond Assurance Corp.
AMT    Alternative Minimum Tax (subject to)
COP    Certificates of Participation
EDC    Economic Development Corp.
GAB    Grant Anticipation Bonds
GO    General Obligation Bonds
HDA    Housing Development Authority
M/F    Multi-Family
NPFGC    National Public Finance Guarantee Corp.
RB    Revenue Bonds
S/F    Single-Family

 

                
   BLACKROCK MUNIYIELD MICHIGAN QUALITY FUND, INC.    APRIL 30, 2017    7

Schedule of Investments (continued)

   

BlackRock MuniYield Michigan Quality Fund, Inc. (MIY)

 

 

Fair Value Hierarchy as of Period End

Various inputs are used in determining the fair value of investments and derivative financial instruments. These inputs to valuation techniques are categorized into a fair value hierarchy consisting of three broad levels for financial reporting purposes as follows:

 

  •  

Level 1 — unadjusted price quotations in active markets/exchanges for identical assets or liabilities that the Fund has the ability to access

 

  •  

Level 2 — other observable inputs (including, but not limited to, quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market–corroborated inputs)

 

  •  

Level 3 — unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the Fund’s own assumptions used in determining the fair value of investments and derivative financial instruments)

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the fair value hierarchy classification is determined based on the lowest level input that is significant to the fair value measurement in its entirety. Investments classified within Level 3 have significant unobservable inputs used by the BlackRock Global Valuation Methodologies Committee (the “Global Valuation Committee”) in determining the price for Fair Valued Investments. Level 3 investments include equity or debt issued by privately held companies or funds. There may not be a secondary market, and/or there are a limited number of investors. Level 3 investments may also be adjusted to reflect illiquidity and/or non-transferability, with the amount of such discount estimated by the Global Valuation Committee in the absence of market information.

Changes in valuation techniques may result in transfers into or out of an assigned level within the hierarchy. In accordance with the Fund’s policy, transfers between different levels of the fair value hierarchy are deemed to have occurred as of the beginning of the reporting period. The categorization of a value determined for investments and derivative financial instruments is based on the pricing transparency of the investments and derivative financial instruments and is not necessarily an indication of the risks associated with investing in those securities. For information about the Fund’s policy regarding valuation of investments and derivative financial instruments, refer to the Fund’s most recent financial statements as contained in its semi-annual report.

The following tables summarize the Fund’s investments and derivative financial instruments categorized in the disclosure hierarchy:

 

     Level 1        Level 2        Level 3        Total  

Assets:

                
Investments:                 

Long-Term Investments1

     —        $ 733,161,878          —        $ 733,161,878  

Short-Term Securities

   $ 2,522,087          —          —          2,522,087  
 

 

 

  

Total

   $ 2,522,087        $ 733,161,878          —        $ 735,683,965  
 

 

 

  
                
Derivative Financial Instruments 2                                         

Liabilities:

                

Interest rate contracts

   $ (693,234 )         —          —        $ (693,234 ) 

1    See above Schedule of Investments for values in each sector.

     

2    Derivative financial instruments are futures contracts which are valued at the unrealized appreciation (depreciation) on the instrument.

     

 

                
8    BLACKROCK MUNIYIELD MICHIGAN QUALITY FUND, INC.    APRIL 30, 2017   

Schedule of Investments (concluded)

   

BlackRock MuniYield Michigan Quality Fund, Inc. (MIY)

 

The Fund may hold assets and/or liabilities in which the fair value approximates the carrying amount for financial reporting purposes. As of period end, such assets and/or liabilities are categorized within the disclosure hierarchy as follows:

 

     Level 1        Level 2        Level 3        Total  

Liabilities:

                

TOB Trust Certificates

    —        $ (57,396,804 )         —        $ (57,396,804 ) 

Loan for TOB Trust Certificates

    —          (325,252 )         —          (325,252 ) 

VRDP Shares at Liquidation Value

    —          (231,900,000 )         —          (231,900,000 ) 
 

 

 

  

Total

    —        $ (289,622,056 )         —        $ (289,622,056 ) 
 

 

 

  

During the period ended April 30, 2017, there were no transfers between levels.

 

                
   BLACKROCK MUNIYIELD MICHIGAN QUALITY FUND, INC.    APRIL 30, 2017    9

Item 2 – Controls and Procedures

 

2(a) –    The registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”)) are effective as of a date within 90 days of the filing of this report based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended.
2(b) –    There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the registrant’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

Item 3 – Exhibits

Certifications – Attached hereto

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

BlackRock MuniYield Michigan Quality Fund, Inc.

 

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

Date: June 22, 2017

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

 

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

Date: June 22, 2017

 

By:   /s/ Neal J. Andrews                         
  Neal J. Andrews
  Chief Financial Officer (principal financial officer) of
  BlackRock MuniYield Michigan Quality Fund, Inc.

Date: June 22, 2017