Moody's assigns BlackRock preferreds Aa2

Moody's Investors Service said it assigned an Aa2 rating to variable-rate muni term preferred shares (VMTP shares) issued by BlackRock MuniHoldings California Quality Fund (MUC) in connection with its merger with BlackRock MuniYield California Fund, Inc. (MYC) and BlackRock MuniYield California Quality Fund (MCA).

Before reorganizing, MYC and MCA will refinance their variable-rate demand preferred shares (VRDP shares) into an equal amount of VMTP Shares with terms substantially identical to the preferred shares of MUC. The surviving fund will issue additional preferred shares in exchange for, on a one-for-one basis, the newly issued target funds' VMTP shares. Following the close of the merger, the preferred share ratings on MYC and MCA will be withdrawn, Moody’s said.

“The Aa2 rating on the VMTP Shares reflects MUC's excellent risk-adjusted asset coverage, solid asset profile and strong fixed charge coverage which were assessed on a pro forma basis, as if the reorganization was effective at the end of February,” the agency said in a press release.

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