Regulatory Filings • Dec 23, 2014
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Download Source FileN-Q 1 d835713dnq.htm BLACKROCK MUNIHOLDINGS CALIFORNIA QUALITY FUND, INC. BLACKROCK MUNIHOLDINGS CALIFORNIA 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 811-08573
Name of Fund: BlackRock MuniHoldings California Quality Fund, Inc. (MUC)
Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809
Name and address of agent for service: John M. Perlowski, Chief Executive Officer, BlackRock MuniHoldings
California Quality Fund, Inc., 55 East 52 nd Street, New York, NY 10055
Registrants telephone number, including area code: (800) 882-0052, Option 4
Date of fiscal year end: 07/31/2015
Date of reporting period: 10/31/2014
Item 1 Schedule of Investments
Schedule of Investments October 31, 2014 (Unaudited) BlackRock MuniHoldings California Quality Fund, Inc. (MUC) (Percentages shown are based on Net Assets)
| Municipal Bonds | Par (000) | Value |
|---|---|---|
| California | ||
| 119.1% | ||
| Corporate 1.1% | ||
| City of Chula Vista California, Refunding RB, San Diego Gas & Electric: | ||
| AMT, 4.00%, 5/01/39 | $ 4,125 | $ 4,133,704 |
| Series A, 5.88%, 2/15/34 | 2,435 | 2,900,182 |
| 7,033,886 | ||
| County/City/Special District/School District 36.3% | ||
| California Educational Facilities Authority, RB, 5.00%, 11/01/39 | 4,000 | 4,614,920 |
| Centinela Valley Union High School District, GO, Election of 2010, Series A, 5.75%, 8/01/41 | 9,100 | 11,045,762 |
| City of Garden Grove California, COP, Series A, Financing Project (AMBAC), 5.50%, 3/01/26 | 4,040 | 4,056,564 |
| County of Kern California, COP, Capital Improvements Projects, Series A (AGC), 6.00%, 8/01/35 | 3,500 | 4,088,035 |
| County of Los Angeles California Sanitation Districts Financing Authority, Refunding RB, (BHAC), 5.00%, 10/01/34 | 7,915 | 8,221,706 |
| County of Orange California Sanitation District, COP, Series A, 5.00%, 2/01/35 | 2,500 | 2,823,825 |
| County of Orange California Water District, COP, Refunding, 5.00%, 8/15/41 | 2,000 | 2,273,420 |
| County of San Joaquin California Transportation Authority, Refunding RB, Limited Tax, Measure K, Series A, 6.00%, | ||
| 3/01/36 | 2,440 | 2,996,613 |
| County of Ventura California Community College District, GO, Election of 2002, Series C, 5.50%, 8/01/33 | 5,060 | 5,824,566 |
| Culver City Redevelopment Finance Authority California, Refunding, Tax Allocation Bonds, Series A (AGM), 5.60%, | ||
| 11/01/25 | 3,750 | 3,765,713 |
| Foothill-De Anza Community College District, GO, Election of 2006, Series C, 5.00%, 8/01/40 | 30,000 | 33,601,500 |
| Garden Grove Unified School District, GO, Election of 2010, Series C, 5.25%, 8/01/40 | 5,500 | 6,358,825 |
| Municipal Bonds | Par (000) | Value |
|---|---|---|
| California (continued) | ||
| County/City/Special District/School District (continued) | ||
| Grossmont Healthcare District, GO, Election of 2006, Series B, 6.13%, 7/15/40 | $ 2,000 | $ 2,479,800 |
| Kern Community College District, GO, Safety Repair & Improvements, Series C: | ||
| 5.25%, 11/01/32 | 5,715 | 6,767,189 |
| 5.75%, 11/01/34 | 12,085 | 14,916,515 |
| Los Alamitos Unified School District, GO, Refunding, School Facilities Improvement, Series E, 5.25%, 8/01/39 | 3,700 | 4,305,394 |
| Los Angeles Community College District, GO, Election of 2003, Series E (AGM), 5.00%, 8/01/31 | 10,000 | 10,683,700 |
| Los Angeles Community Redevelopment Agency California, RB, Bunker Hill Project, Series A (AGM), 5.00%, 12/01/27 | 7,000 | 7,027,860 |
| Los Rios Community College District, GO, Election of 2008, Series A, 5.00%, 8/01/35 | 11,000 | 12,554,630 |
| Oxnard Union High School District, GO, Refunding, Election of 2004, Series A (AGM), 5.00%, 8/01/35 | 10,000 | 11,032,000 |
| Redlands Unified School District California, GO, Election of 2008 (AGM), 5.25%, 7/01/33 | 5,000 | 5,641,650 |
| Riverside Community College District, GO, Election of 2004, Series C (AGM), 5.00%, 8/01/32 | 8,750 | 9,610,212 |
| San Diego Regional Building Authority, RB, County Operations Center & Annex, Series A, 5.50%, 2/01/29 | 905 | 1,054,624 |
| San Francisco California Bay Area Rapid Transit District, Refunding RB, Series A (NPFGC): | ||
| 5.00%, 7/01/30 | 21,600 | 22,250,376 |
| 5.00%, 7/01/34 | 2,000 | 2,059,200 |
| San Jose California Financing Authority, LRB, Convention Center Expansion & Renovation Project, Series A: | ||
| 5.75%, 5/01/36 | 2,560 | 2,723,277 |
| 5.75%, 5/01/42 | 4,500 | 5,411,295 |
BLACKROCK MUNIHOLDINGS CALIFORNIA QUALITY FUND, INC. OCTOBER 31, 2014 1
Schedule of Investments (continued) BlackRock MuniHoldings California Quality Fund, Inc. (MUC) (Percentages shown are based on Net Assets)
| Municipal Bonds | Par (000) | Value |
|---|---|---|
| California (continued) | ||
| County/City/Special District/School District (concluded) | ||
| San Jose California Financing Authority, Refunding LRB, Convention Center Expansion & Renovation Project, Series A, 5.00%, | ||
| 6/01/39 | $ 10,000 | $ 11,309,300 |
| Snowline Joint Unified School District, COP, Refunding, Refining Project (AGC), 5.75%, 9/01/38 | 5,635 | 6,598,979 |
| West Contra Costa California Unified School District, GO: | ||
| Election of 2010, Series A (AGM), 5.25%, 8/01/41 | 5,390 | 6,017,612 |
| Election of 2010, Series B, 5.50%, 8/01/39 | 3,195 | 3,722,622 |
| Election of 2012, Series A, 5.50%, 8/01/39 | 2,500 | 2,912,850 |
| 238,750,534 | ||
| Education 4.9% | ||
| California Educational Facilities Authority, RB, University of Southern California, Series A, 5.25%, 10/01/38 | 2,300 | 2,610,891 |
| California Municipal Finance Authority, RB, Emerson College, 6.00%, 1/01/42 | 2,750 | 3,203,117 |
| Gavilan Joint Community College District, GO, Election of 2004, Series D: | ||
| 5.50%, 8/01/31 | 2,170 | 2,538,162 |
| 5.75%, 8/01/35 | 8,400 | 9,925,356 |
| University of California, RB: | ||
| Series AM, 5.25%, 5/15/44 | 9,000 | 10,498,230 |
| Series L, 5.00%, 5/15/36 | 3,030 | 3,238,222 |
| 32,013,978 | ||
| Health 17.0% | ||
| ABAG Finance Authority for Nonprofit Corps., Refunding RB, Sharp Healthcare: | ||
| Series A, 6.00%, 8/01/30 | 2,305 | 2,828,834 |
| Series B, 6.25%, 8/01/39 | 6,305 | 7,428,614 |
| California Health Facilities Financing Authority, RB: | ||
| Childrens Hospital, Series A, 5.25%, 11/01/41 | 8,620 | 9,521,221 |
| Municipal Bonds | Par (000) | Value |
| California (continued) | ||
| Health (concluded) | ||
| California Health Facilities Financing Authority, RB (concluded): | ||
| Kaiser Permanente, Series A, 5.25%, 4/01/39 | $ 7,275 | $ 7,538,210 |
| Providence Health Services, Series B, 5.50%, 10/01/39 | 4,130 | 4,792,039 |
| Stanford Hospital, Series A-2, 5.25%, 11/15/40 | 3,000 | 3,495,750 |
| Sutter Health, Series A, 5.25%, 11/15/46 | 7,500 | 8,073,675 |
| Sutter Health, Series B, 6.00%, 8/15/42 | 9,655 | 11,673,667 |
| California Health Facilities Financing Authority, Refunding RB, Series A: | ||
| Catholic Healthcare West, 6.00%, 7/01/34 | 3,700 | 4,354,345 |
| Providence Health and Services, 5.00%, 10/01/38 | 10,970 | 12,526,094 |
| St. Josephs Health System, 5.00%, 7/01/37 | 10,000 | 11,336,400 |
| Stanford Hospital, Series A-3, 5.50%, 11/15/40 | 3,065 | 3,639,841 |
| California Statewide Communities Development Authority, RB, Kaiser Permanente, Series B, 5.25%, 3/01/45 | 12,505 | 12,904,410 |
| California Statewide Communities Development Authority, Refunding RB: | ||
| Kaiser Permanente, Series C, 5.25%, 8/01/31 | 2,500 | 2,637,200 |
| Trinity Health Credit Group Composite Issue, 5.00%, 12/01/41 | 6,235 | 6,887,056 |
| Washington Township Health Care District, GO, Series B, 5.50%, 8/01/38 | 1,625 | 1,949,399 |
| 111,586,755 | ||
| State 9.4% | ||
| State of California, GO, Refunding, Various Purposes, 6.00%, 3/01/33 | 5,000 | 6,131,750 |
| State of California, GO, Various Purposes, 6.00%, 4/01/38 | 27,765 | 33,268,856 |
| State of California Public Works Board, LRB: | ||
| Department of Education, Riverside Campus Project, Series B, 6.50%, 4/01/34 | 3,670 | 4,464,518 |
2 BLACKROCK MUNIHOLDINGS CALIFORNIA QUALITY FUND, INC. OCTOBER 31, 2014
Schedule of Investments (continued) BlackRock MuniHoldings California Quality Fund, Inc. (MUC) (Percentages shown are based on Net Assets)
| Municipal Bonds | Par (000) | Value |
|---|---|---|
| California (continued) | ||
| State (concluded) | ||
| State of California Public Works Board, LRB (concluded): | ||
| Various Capital Projects, Series I, 5.50%, 11/01/33 | $ 2,015 | $ 2,431,118 |
| State of California Public Works Board, RB, California State Prisons, Series C, 5.75%, 10/01/31 | 1,205 | 1,457,411 |
| University of California, RB, Limited Project, Series D (NPFGC), 5.00%, 5/15/41 | 13,000 | 13,857,870 |
| 61,611,523 | ||
| Transportation 19.9% | ||
| City & County of San Francisco California Airports Commission, ARB, Series E, 6.00%, 5/01/39 | 9,650 | 11,475,877 |
| City & County of San Francisco California Airports Commission, Refunding ARB, AMT: | ||
| 2nd Series 34E (AGM), 5.75%, 5/01/24 | 5,000 | 5,683,350 |
| Series A, 5.00%, 5/01/29 | 6,435 | 7,256,814 |
| City of Los Angeles California Department of Airports, ARB, Los Angeles International Airport, Senior Series D, 5.25%, | ||
| 5/15/29 | 2,590 | 3,032,864 |
| City of Los Angeles California Department of Airports, Refunding ARB, Los Angeles International Airport, Series A: | ||
| 5.25%, 5/15/39 | 5,845 | 6,682,530 |
| Senior, 5.00%, 5/15/40 | 3,750 | 4,266,600 |
| City of San Jose California, Refunding ARB, Series A-1, AMT: | ||
| 5.25%, 3/01/23 | 3,785 | 4,375,157 |
| 6.25%, 3/01/34 | 1,400 | 1,643,838 |
| County of Los Angeles California Metropolitan Transportation Authority, Refunding RB, Series A (AMBAC), 5.00%, | ||
| 7/01/35 | 9,000 | 9,256,860 |
| County of Orange California, ARB, Series B, 5.75%, 7/01/34 | 6,345 | 7,094,154 |
| County of Sacramento California, ARB: | ||
| Senior Series A (AGC), 5.50%, 7/01/41 | 8,190 | 9,279,188 |
| Senior Series B, 5.75%, 7/01/39 | 2,650 | 3,018,774 |
| Municipal Bonds | Par (000) | Value |
| California (continued) | ||
| Transportation (concluded) | ||
| County of Sacramento California, ARB (concluded): | ||
| Senior Series B, AMT (AGM), 5.75%, 7/01/28 | $ 13,275 | $ 15,134,827 |
| Senior Series B, AMT (AGM), 5.25%, 7/01/33 | 19,530 | 21,044,161 |
| County of San Bernardino California Transportation Authority, RB, Series A, 5.25%, 3/01/40 | 4,545 | 5,335,512 |
| County of San Mateo California Transportation Authority, Refunding RB, Series A (NPFGC), 5.00%, 6/01/32 | 10,000 | 10,211,100 |
| Port of Los Angeles California Harbor Department, RB, Series B, 5.25%, 8/01/34 | 5,530 | 6,370,671 |
| 131,162,277 | ||
| Utilities 30.5% | ||
| Anaheim Public Financing Authority, RB, Electric System Distribution Facilities, Series A, 5.38%, 10/01/36 | 2,200 | 2,602,974 |
| City of Los Angeles California Department of Water & Power, Refunding RB, Series A, 5.25%, 7/01/39 | 16,000 | 18,041,120 |
| City of Los Angeles California Wastewater System, Refunding RB, Sub-Series A, 5.00%, 6/01/28 | 2,000 | 2,329,240 |
| City of Napa California Water System, RB, (AMBAC), 5.00%, 5/01/35 | 8,600 | 9,377,354 |
| City of San Francisco California Public Utilities Commission Water, RB, Series B, 5.00%, 11/01/30 | 10,000 | 11,561,400 |
| County of Los Angeles California Public Works Financing Authority, Refunding LRB, Multiple Capital Projects II, 5.00%, | ||
| 8/01/42 | 3,095 | 3,443,126 |
| County of Sacramento California Sanitation Districts Financing Authority, RB: | ||
| 5.00%, 6/01/16 (a) | 3,000 | 3,220,800 |
| 5.00%, 12/01/36 | 1,010 | 1,071,145 |
| Dublin-San Ramon Services District, Refunding RB, 6.00%, 8/01/41 | 4,000 | 4,846,480 |
BLACKROCK MUNIHOLDINGS CALIFORNIA QUALITY FUND, INC. OCTOBER 31, 2014 3
Schedule of Investments (continued) BlackRock MuniHoldings California Quality Fund, Inc. (MUC) (Percentages shown are based on Net Assets)
| Municipal Bonds | Par (000) | Value |
|---|---|---|
| California (continued) | ||
| Utilities (continued) | ||
| East Bay California Municipal Utility District Water System, RB, Series A (NPFGC): | ||
| 5.00%, 6/01/15 (a) | $ 8,830 | $ 9,079,271 |
| 5.00%, 6/01/35 | 3,240 | 3,321,259 |
| East Bay California Municipal Utility District Water System, Refunding RB: | ||
| Series A (NPFGC), 5.00%, 6/01/32 | 10,000 | 11,030,000 |
| Series A (NPFGC), 5.00%, 6/01/37 | 6,670 | 7,317,457 |
| Sub-Series A (AGM), 5.00%, 6/01/37 | 11,190 | 12,276,213 |
| Sub-Series A (AMBAC), 5.00%, 6/01/33 | 5,000 | 5,470,600 |
| Eastern Municipal Water District, COP, Series H, 5.00%, 7/01/33 | 2,505 | 2,796,682 |
| El Dorado Irrigation District / El Dorado County Water Agency, Refunding RB, Series A (AGM), 5.25%, 3/01/39 | 10,000 | 11,686,300 |
| Imperial Irrigation District, Refunding RB, Electric System, 5.13%, 11/01/38 | 9,500 | 10,618,910 |
| Los Angeles Department of Water & Power, RB: | ||
| Series A, 5.38%, 7/01/38 | 9,375 | 10,722,469 |
| Water Utility Improvement, Sub-Series A-2 (AGM), 5.00%, 7/01/35 | 7,500 | 8,008,125 |
| Metropolitan Water District of Southern California, RB, Series A: | ||
| 5.00%, 7/01/35 | 12,870 | 13,237,310 |
| 5.00%, 7/01/37 | 5,000 | 5,513,100 |
| Metropolitan Water District of Southern California, Refunding RB, Series C, 5.00%, 7/01/35 | 2,605 | 2,965,220 |
| San Diego Public Facilities Financing Authority Sewer, Refunding RB, Senior Series A, | ||
| 5.25%, 5/15/34 | 1,060 | 1,219,848 |
| 5.25%, 5/15/39 | 10,000 | 11,475,100 |
| Municipal Bonds | Par (000) | Value |
| California (concluded) | ||
| Utilities (concluded) | ||
| San Diego Public Facilities Financing Authority Water, Refunding RB, Series B, 5.50%, 8/01/39 | $ 8,000 | $ 9,346,240 |
| San Juan Water District, Refunding RB, San Juan & Citrus Heights, 5.25%, 2/01/33 | 7,325 | 8,386,246 |
| 200,963,989 | ||
| Total Municipal Bonds 119.1% | 783,122,942 | |
| Municipal Bonds Transferred to Tender Option Bond (TOB) Trusts (b) | ||
| California 31.8% | ||
| County/City/Special District/School District 17.7% | ||
| County of Alameda California Joint Powers Authority, Refunding LRB, (AGM), 5.00%, 12/01/34 | 13,180 | 14,552,433 |
| Desert Community College District California, GO, Series C (AGM), 5.00%, 8/01/37 | 16,530 | 18,042,495 |
| Foothill-De Anza Community College District, GO, Series C, 5.00%, 8/01/40 | 10,000 | 11,200,500 |
| Los Angeles Community College District California, GO: | ||
| Election of 2001, Series A (NPFGC), 5.00%, 8/01/32 | 6,647 | 7,323,765 |
| Election of 2001, Series E-1, 5.00%, 8/01/33 | 11,770 | 13,200,879 |
| Election of 2003, Series F-1, 5.00%, 8/01/33 | 10,000 | 11,215,700 |
| Los Angeles Community College District California, GO, Refunding, Election of 2008, Series A, 6.00%, 8/01/33 | 9,596 | 11,588,601 |
| Poway Unified School District, GO, Election of 2002, Improvement District 02, Series 1-B (AGM), 5.00%, 8/01/30 | 10,000 | 10,813,800 |
4 BLACKROCK MUNIHOLDINGS CALIFORNIA QUALITY FUND, INC. OCTOBER 31, 2014
Schedule of Investments (continued) BlackRock MuniHoldings California Quality Fund, Inc. (MUC) (Percentages shown are based on Net Assets)
| Municipal Bonds Transferred to Tender Option Bond (TOB) Trusts (b) | Par (000) | Value | |
|---|---|---|---|
| California (continued) | |||
| County/City/Special District/School District (concluded) | |||
| San Bernardino Community College District California, GO, Election of 2002, Series C (AGM), 5.00%, 8/01/31 | $ 17,770 | $ 18,991,510 | |
| 116,929,683 | |||
| Education 4.8% | |||
| Riverside Community College District, GO, Election of 2004, Series C (NPFGC), 5.00%, 8/01/32 | 8,910 | 9,785,942 | |
| University of California, RB: | |||
| Limited Project, Series D (AGM), 5.00%, 5/15/41 | 8,000 | 8,549,760 | |
| Series O, 5.75%, 5/15/34 | 11,190 | 13,158,284 | |
| 31,493,986 | |||
| Health 3.2% | |||
| California Statewide Communities Development Authority, RB, Kaiser Permanente, Series A, | |||
| 5.00%, 4/01/42 | 19,070 | 21,031,731 | |
| Utilities 6.1% | |||
| County of San Diego California Water Authority, COP, Refunding, Series A (AGM), 5.00%, 5/01/33 | 16,740 | 18,541,559 | |
| East Bay Municipal Utility District, Refunding RB, Sub-Series A (AMBAC), 5.00%, 6/01/37 | 14,510 | 15,924,580 | |
| Municipal Bonds Transferred to Tender Option Bond (TOB) Trusts (b) | Par (000) | Value | |
| California (concluded) | |||
| Utilities (concluded) | |||
| Rancho Water District Financing Authority, Refunding RB, Series A (AGM), 5.00%, 8/01/34 | $ 5,008 | $ 5,601,781 | |
| 40,067,920 | |||
| Total Municipal Bonds Transferred to Tender Option Bond (TOB) Trusts 31.8% | 209,523,320 | ||
| Total Long-Term Investments (Cost $914,080,342) 150.9% | 992,646,262 | ||
| Short-Term Securities | Shares | ||
| BIF California Municipal Money Fund, 0.00% (c)(d) | 5,076,020 | 5,076,020 | |
| Total Short-Term Securities (Cost $5,076,020) 0.8% | 5,076,020 | ||
| Total Investments (Cost $919,156,362*) 151.7% | 997,722,282 | ||
| Other Assets Less Liabilities 1.8% | 11,650,570 | ||
| Liability for TOB Trust Certificates, Including Interest Expense and Fees Payable (14.9%) | (97,827,866 | ) | |
| VMTP Shares, at Liquidation Value (38.6%) | (254,000,000 | ) | |
| Net Assets Applicable to Common Shares 100.0% | $ 657,544,986 | ||
| * As of October 31, 2014, gross unrealized appreciation and depreciation based on cost for federal income tax | |||
| purposes were as follows: | |||
| Tax cost | $ 821,399,689 | ||
| Gross unrealized appreciation | $ 78,572,221 | ||
| Gross unrealized depreciation | (56,072 | ) | |
| Net unrealized appreciation | $ 78,516,149 |
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) Represent bonds transferred to a TOB. In exchange for which the Fund received cash and residual interest certificates. These bonds serve as collateral in a financing transaction.
(c) Investments in issuers considered to be an affiliate of the Fund during the period ended October 31, 2014, for purposes of Section 2(a)(3) of the Investment Act of 1940, were as follows:
| Affiliate — BIF California Municipal Money Fund | 2,207,320 | 2,868,700 | 5,076,020 | Income — |
|---|---|---|---|---|
BLACKROCK MUNIHOLDINGS CALIFORNIA QUALITY FUND, INC. OCTOBER 31, 2014 5
Schedule of Investments (continued) BlackRock MuniHoldings California Quality Fund, Inc. (MUC)
(d) Represents the current yield as of report date.
Portfolio Abbreviations
| AGC | Assured Guarantee Corp. |
|---|---|
| AGM | Assured Guaranty Municipal Corp. |
| AMBAC | American Municipal Bond Assurance Corp. |
| AMT | Alternative Minimum Tax (subject to) |
| ARB | Airport Revenue Bonds |
| BHAC | Berkshire Hathaway Assurance Corp. |
| COP | Certificates of Participation |
| GO | General Obligation Bonds |
| LRB | Lease Revenue Bonds |
| NPFGC | National Public Finance Guarantee Corp. |
| RB | Revenue Bonds |
Financial futures contracts outstanding as of October 31, 2014 were as follows:
| Contracts Sold | Issue | Exchange | Expiration | Notional Value | Unrealized Depreciation | ||
|---|---|---|---|---|---|---|---|
| (500 | ) | 10-Year U.S. Treasury Note | Chicago Board of Trade | December 2014 | $ 63,179,688 | $ (402,701 | ) |
For Fund compliance purposes, the Funds sector classifications refer to any 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 advisor. These definitions may not apply for purposes of this report, which may combine such sector sub-classifications for reporting ease.
Fair Value Measurements Various inputs are used in determining the fair value of investments and derivative financial instruments. These inputs to valuation techniques are categorized into a disclosure hierarchy consisting of three broad levels for financial statement purposes. 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. The categorization of a value determined for investments and derivative financial instruments is based on the pricing transparency of the investment and derivative financial instrument and is not necessarily an indication of the risks associated with investing in those securities. The three levels of the fair value hierarchy are as follows:
Level 1 unadjusted quoted prices 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 Funds own assumptions used in determining the fair value of investments and derivative financial instruments)
6 BLACKROCK MUNIHOLDINGS CALIFORNIA QUALITY FUND, INC. OCTOBER 31, 2014
Schedule of Investments (concluded) BlackRock MuniHoldings California Quality Fund, Inc. (MUC)
Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. In accordance with the Funds policy, transfers between different levels of the fair value disclosure hierarchy are deemed to have occurred as of the beginning of the reporting period. For information about the Funds policy regarding valuation of investments and derivative financial instruments, please refer to the Funds most recent financial statements as contained in its annual report.
The following tables summarize the Funds investments and derivative financial instruments categorized in the disclosure hierarchy as of October 31, 2014:
| Level 2 | Level 3 | ||||||
|---|---|---|---|---|---|---|---|
| Assets: | |||||||
| Investments: | |||||||
| Municipal Bonds 1 | | $ | 992,646,262 | | $ 992,646,262 | ||
| Short-Term Securities | $ 5,076,020 | | | 5,076,020 | |||
| Total | $ 5,076,020 | $ | 992,646,262 | | $ 997,722,282 | ||
| 1 See above Schedule | |||||||
| of Investments for values in each sector. | |||||||
| Level 1 | Level 2 | Level 3 | Total | ||||
| Derivative Financial Instruments 2 | |||||||
| Liabilities: | |||||||
| Interest rate contracts | $ (402,701 | ) | | | $ (402,701 | ) | |
| 2 Derivative | |||||||
| financial instruments are financial futures contracts, which are valued at the unrealized appreciation/depreciation on the instrument. | |||||||
| The Fund may hold assets and/or liabilities in which the fair value approximates the carrying amount for | |||||||
| financial reporting purposes. As of October 31, 2014, such assets and/or liabilities are categorized within the disclosure hierarchy as follows: | |||||||
| Level 1 | Level 2 | Level 3 | Total | ||||
| Assets: | |||||||
| Cash pledged for financial futures contracts | $ 602,000 | | | $ 602,000 | |||
| Liabilities: | |||||||
| TOB trust certificates | | $ | (97,806,444 | ) | | (97,806,444 | ) |
| VMTP Shares | | (254,000,000 | ) | | (254,000,000 | ) | |
| Total | $ 602,000 | $ | (351,806,444 | ) | | $ (351,204,444 | ) |
There were no transfers between levels during the period ended October 31, 2014.
BLACKROCK MUNIHOLDINGS CALIFORNIA QUALITY FUND, INC. OCTOBER 31, 2014 7
| Item 2 | Controls and Procedures |
|---|---|
| 2(a) | The registrants principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrants 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 registrants internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the registrants last fiscal quarter that have |
| materially affected, or are reasonably likely to materially affect, the registrants 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 California Quality Fund, Inc.
| By: |
|---|
| John M. Perlowski |
| Chief Executive Officer (principal executive officer) of |
| BlackRock MuniHoldings California Quality Fund, Inc. |
| Date: December 23, 2014 |
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 California Quality Fund, Inc. | |
| Date: December 23, 2014 | |
| By: | /s/ Neal J. Andrews |
| Neal J. Andrews | |
| Chief Financial Officer (principal financial officer) of | |
| BlackRock MuniHoldings California Quality Fund, Inc. | |
| Date: December 23, 2014 |
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