Form N-Q BLACKROCK MUNIHOLDINGS For: Jul 31
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E-mailUNITED 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: 811-08707
Name of Fund: BlackRock MuniHoldings Quality Fund, Inc. (MUS)
Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809
Name and address of agent for service: John M. Perlowski, Chief Executive Officer, BlackRock
MuniHoldings 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: 04/30/2019
Date of reporting period: 07/31/2018
Item 1 – Schedule of Investments
| Schedule of Investments (unaudited) July 31, 2018 |
BlackRock MuniHoldings Quality Fund, Inc. (MUS) (Percentages shown are based on Net Assets) |
| 1 |
| Schedule of Investments (unaudited) (continued) July 31, 2018 |
BlackRock MuniHoldings Quality Fund, Inc. (MUS) (Percentages shown are based on Net Assets) |
| 2 |
| Schedule of Investments (unaudited) (continued) July 31, 2018 |
BlackRock MuniHoldings Quality Fund, Inc. (MUS) (Percentages shown are based on Net Assets) |
| 3 |
| Schedule of Investments (unaudited) (continued) July 31, 2018 |
BlackRock MuniHoldings Quality Fund, Inc. (MUS) (Percentages shown are based on Net Assets) |
| 4 |
| Schedule of Investments (unaudited) (continued) July 31, 2018 |
BlackRock MuniHoldings Quality Fund, Inc. (MUS) (Percentages shown are based on Net Assets) |
| 5 |
| Schedule of Investments (unaudited) (continued) July 31, 2018 |
BlackRock MuniHoldings Quality Fund, Inc. (MUS) (Percentages shown are based on Net Assets) |
| (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) | When-issued security. |
| (c) | 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. |
| (d) | All or a portion of security is subject to a recourse agreement. The aggregate maximum potential amount the Fund could ultimately be required to pay under the agreements, which expire between October 1, 2018 to March 1, 2026, is $ 5,350,284. |
| (e) | Annualized 7-day yield as of period end. |
| 6 |
| Schedule of Investments (unaudited) (continued) July 31, 2018 |
BlackRock MuniHoldings Quality Fund, Inc. (MUS) |
| (f) | During the period ended July 31, 2018, 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 04/30/18 |
Net Activity |
Shares Held at 07/31/18 |
Value at 07/31/18 |
Income | Net Realized Gain (Loss) (a) |
Change
in Appreciation |
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| BlackRock Liquidity Funds, MuniCash, Institutional Class |
2,822,221 | (1,216,291 | ) | 1,605,930 | $ | 1,606,251 | $ | 10,392 | $ | 1,370 | $ | 159 | ||||||||||||||||
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| (a) | Includes net capital gain distributions, if applicable. |
Currency Abbreviations
| AGC | Assured Guarantee Corp. | |
| AGM | Assured Guaranty Municipal Corp. | |
| AMT | Alternative Minimum Tax (subject to) | |
| ARB | Airport Revenue Bonds | |
| BAM | Build America Mutual Assurance Co. | |
| BARB | Building Aid Revenue Bonds | |
| COP | Certificates of Participation | |
| COP | Colombian Peso | |
| EDA | Economic Development Authority | |
| GARB | General Airport Revenue Bonds | |
| GO | General Obligation Bonds | |
| HFA | Housing Finance Agency | |
| IDA | Industrial Development Authority | |
| IDB | Industrial Development Board | |
| LRB | Lease Revenue Bonds | |
| M/F | Multi-Family | |
| RB | Revenue Bonds | |
| S/F | Single-Family |
Derivative Financial Instruments Outstanding as of Period End
Futures Contracts
| Description | Number of Contracts |
Expiration Date |
Notional Amount (000) |
Value/ Unrealized Appreciation (Depreciation) |
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| Short Contracts: |
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| 10-Year U.S. Treasury Note |
24 | 09/19/18 | $ | 2,866 | $ | 17,563 | ||||||||||
| Long U.S. Treasury Bond |
32 | 09/19/18 | 4,575 | 18,634 | ||||||||||||
| 5-Year U.S. Treasury Note |
16 | 09/28/18 | 1,810 | 6,035 | ||||||||||||
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| $ | 42,232 | |||||||||||||||
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| 7 |
| Schedule of Investments (unaudited) (continued) July 31, 2018 |
BlackRock MuniHoldings Quality Fund, Inc. (MUS) |
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 Trust 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 Trust’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 Trust’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 Trust’s policy regarding valuation of investments and derivative financial instruments, refer to the Trust’s most recent financial statements as contained in its annual report.
As of July 31, 2018, the following tables summarize the Trust’s investments and derivative financial instruments categorized in the disclosure hierarchy:
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Assets: |
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| Investments: |
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| Long-Term Investments (a) |
$ | — | $ | 280,801,716 | $ | — | $ | 280,801,716 | ||||||||
| Short-Term Securities |
1,606,251 | — | — | 1,606,251 | ||||||||||||
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| $ | 1,606,251 | $ | 280,801,716 | $ | — | $ | 282,407,967 | |||||||||
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| Derivative Financial Instruments (b) |
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| Assets: |
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| Interest rate contracts |
$ | 42,232 | $ | — | $ | — | $ | 42,232 | ||||||||
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| (a) | See above Schedule of Investments for values in each state or political subdivision. |
| (b) | Derivative financial instruments are futures contracts which are valued at the unrealized appreciation (depreciation) on the instrument. |
| 8 |
| Schedule of Investments (unaudited) (continued) July 31, 2018 |
BlackRock MuniHoldings Quality Fund, Inc. (MUS) |
The Fund may hold assets and/or liabilities in which the fair value approximates the carrying amount for financial statement 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: |
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| TOB Trust Certificates |
$ | — | $ | (21,813,374 | ) | $ | — | $ | (21,813,374 | ) | ||||||
| VMTP Shares at Liquidation Value |
— | (87,000,000 | ) | — | (87,000,000 | ) | ||||||||||
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| $ | — | $ | (108,813,374 | ) | $ | — | $ | (108,813,374 | ) | |||||||
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During the period ended July 31, 2018, there were no transfers between levels.
| 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 MuniHoldings Quality Fund, Inc.
| By: | /s/ John M. Perlowski | |
| John M. Perlowski | ||
| Chief Executive Officer (principal executive officer) of | ||
| BlackRock MuniHoldings Quality Fund, Inc. |
Date: September 20, 2018
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 MuniHoldings Quality Fund, Inc. | ||
| Date: September 20, 2018 | ||
| By: | /s/ Neal J. Andrews | |
| Neal J. Andrews | ||
| Chief Financial Officer (principal financial officer) of | ||
| BlackRock MuniHoldings Quality Fund, Inc. | ||
Date: September 20, 2018
EX-99.CERT
CERTIFICATION PURSUANT TO RULE 30a-2(a) UNDER THE 1940 ACT AND SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002
I, John M. Perlowski, Chief Executive Officer (principal executive officer) of BlackRock MuniHoldings Quality Fund, Inc., certify that:
1. I have reviewed this report on Form N-Q of BlackRock MuniHoldings Quality Fund, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the schedules of investments included in this report fairly present in all material respects the investments of the registrant as of the end of the fiscal quarter for which the report is filed;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:
a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report, based on such evaluation; and
d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and
b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| Date: September 20, 2018 |
| /s/ John M. Perlowski |
| John M. Perlowski |
| Chief Executive Officer (principal executive officer) of |
| BlackRock MuniHoldings Quality Fund, Inc. |
EX-99.CERT
CERTIFICATION PURSUANT TO RULE 30a-2(a) UNDER THE 1940 ACT AND SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002
I, Neal J. Andrews, Chief Financial Officer (principal financial officer) of BlackRock MuniHoldings Quality Fund, Inc., certify that:
1. I have reviewed this report on Form N-Q of BlackRock MuniHoldings Quality Fund, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the schedules of investments included in this report fairly present in all material respects the investments of the registrant as of the end of the fiscal quarter for which the report is filed;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:
a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report, based on such evaluation; and
d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and
b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: September 20, 2018
| /s/ Neal J. Andrews |
| Neal J. Andrews |
| Chief Financial Officer (principal financial officer) of |
| BlackRock MuniHoldings Quality Fund, Inc |
.
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