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 52nd Street, New York, NY 10055

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

Date of fiscal year end: 07/31/2013

Date of reporting period: 04/30/2013

Item 1    –    Schedule of Investments

Schedule of Investments April 30, 2013 (Unaudited)    BlackRock MuniHoldings California Quality Fund, Inc. (MUC)
   (Percentages shown are based on Net Assets)

 

Municipal Bonds

    Par
(000)		      Value  

California – 103.5%

      

Corporate – 0.4%

      

City of Chula Vista California, Refunding RB, San Diego Gas & Electric, Series A,

      

5.88%, 2/15/34

    $ 2,435       $ 2,929,768   
     

 

 

  

County/City/Special District/School District – 24.4%

      

Centinela Valley Union High School District, GO, Election of 2010, Series A,

      

5.75%, 8/01/41

      9,000         10,731,690   

Chabot-Las Positas Community College District, GO, CAB, Series C (AMBAC)(a):

      

5.04%, 8/01/36

      14,700         4,617,564   

5.06%, 8/01/37

      11,980         3,568,962   

Chaffey Joint Union High School District, GO, Election 2012, Series A,

      

5.00%, 8/01/37

      6,420         7,508,704   

City of Garden Grove California, COP, Series A, Financing Project (AMBAC),

      

5.50%, 3/01/26

      4,040         4,075,754   

County of Kern California, COP, Capital Improvements Projects, Series A (AGC),

      

6.00%, 8/01/35

      3,500         4,167,065   

Culver City Redevelopment Finance Authority California, Tax Allocation Bonds, Refunding, Series A (AGM),

      

5.60%, 11/01/25

      3,750         3,766,087   

El Camino Community College District, GO, Election of 2002, Series C,

      

5.00%, 8/01/37

      5,375         6,237,687   

Emery Unified School District, GO, CAB, Election of 2010, Series D(a):

      

5.23%, 8/01/38

      6,000         1,629,660   

5.31%, 8/01/40

      5,675         1,360,071   

Grossmont Healthcare District, GO, Election of 2006, Series B,

      

6.13%, 7/15/40

      2,000         2,468,440   

Los Angeles Community College District California, GO, Election of 2003, Series F-1,

      

5.00%, 8/01/33

      2,500         2,853,600   

Los Angeles Community Redevelopment Agency California, RB, Bunker Hill Project, Series A (AGM),

      

5.00%, 12/01/27

      7,000         7,421,820   

Mount Diablo Unified School District, GO, Refunding, Election of 2002, Series C,

      

5.00%, 8/01/29(b)

      5,000         6,013,800   

Orange County Sanitation District, COP, Series A,

      

5.00%, 2/01/35

      2,500         2,866,050   

Oxnard Union High School District, GO, Refunding, Election of 2004, Series A (AGM),

      

5.00%, 8/01/35

      10,000         11,170,100   

Pajaro Valley Unified School District, GO, Refunding, Election 2012, Series A,

      

5.00%, 8/01/38

      5,740         6,555,826   

Redlands Unified School District California, GO, Election of 2008 (AGM),

      

5.25%, 7/01/33

      5,000         5,720,200   

Saddleback Valley Unified School District, GO, Refunding,

      

5.00%, 8/01/29(c)

      3,000         3,528,960   

San Bernardino Community College District, GO, Election of 2002, Series A,

      

6.25%, 8/01/18(d)

      310         395,709   

San Diego Regional Building Authority, RB, County Operations Center & Annex, Series A,

      

5.50%, 2/01/29

      900         1,067,112   

San Jose Financing Authority, RB, Convention Center:

      

5.75%, 5/01/36

      2,560         2,849,792   

5.75%, 5/01/42

      4,500         5,238,900   

San Jose Financing Authority, Refunding RB, Civic Center Project, Series B (AMBAC),

      

5.00%, 6/01/32

      14,800         14,878,736   

Santa Maria Joint Union High School District, GO, Election 2004,

      

5.00%, 8/01/33

      3,710         4,342,703   

Snowline Joint Unified School District, COP, Refunding, Refining Project (AGC),

      

5.75%, 9/01/38

      5,635         6,683,617   

Southwestern Community College District, GO, Election of 2008, Series C,

      

5.25%, 8/01/36

      2,570         3,018,568   

Ventura County Community College District, GO, Election of 2002, Series C,

      

5.50%, 8/01/33

      5,000         5,879,700   

West Contra Costa Unified School District California, GO (AGM):

      

Election of 2005, Series A, 5.00%, 8/01/35

      10,000         10,587,600   

Election of 2010, Series A, 5.25%, 8/01/41

      5,390         6,296,275   

Westminster Redevelopment Agency California, Tax Allocation Bonds, Subordinate, Commercial Redevelopment Project No. 1 (AGC),

      

6.25%, 11/01/39

      4,300         5,135,447   

William S Hart Union High School District, GO, CAB, Election of 2008, Series C,

      

5.00%, 8/01/37(a)

      8,250         2,492,737   
     

 

 

  
        165,128,936   
     

 

 

  

Education – 8.6%

      

California Municipal Finance Authority, RB, Emerson College,

      

6.00%, 1/01/42

      2,500         3,036,725   

 

    BLACKROCK MUNIHOLDINGS CALIFORNIA QUALITY FUND, INC.    APRIL 30, 2013   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)

      

Education (concluded)

      

Gavilan Joint Community College District, GO, Election of 2004, Series D:

      

5.50%, 8/01/31

    $ 2,170       $ 2,631,017   

5.75%, 8/01/35

      8,400         10,318,476   

Riverside Community College District, GO, Election of 2004, Series C (AGM),

      

5.00%, 8/01/32

      8,750         9,880,325   

San Diego Community College District, GO, Election of 2006 (AGM),

      

5.00%, 8/01/30

      8,000         9,185,520   

San Jose Evergreen Community College District, GO, Election of 2010, Series A,

      

5.00%, 8/01/41

      5,975         6,887,024   

University of California, RB, Series L,

      

5.00%, 5/15/36

      3,030         3,377,086   

University of California, Refunding RB:

      

General, Series A (AMBAC), 5.00%, 5/15/27

      5,000         5,009,750   

Limited Project, Series G, 5.00%, 5/15/37

      1,750         2,010,400   

Series AF, 5.00%, 5/15/36

      5,000         5,875,650   
     

 

 

  
        58,211,973   
     

 

 

  

Health – 16.9%

      

ABAG Finance Authority for Nonprofit Corps, Refunding RB, Sharp Healthcare:

      

6.25%, 8/01/39

      5,000         5,910,550   

Series A, 6.00%, 8/01/30

      2,270         2,777,481   

California Health Facilities Financing Authority, RB:

      

Children’s Hospital, Series A, 5.25%, 11/01/41

      8,020         8,913,589   

Kaiser Permanente, Series A, 5.25%, 4/01/39

      7,210         7,881,395   

Providence Health Services, Series B, 5.50%, 10/01/39

      4,030         4,740,247   

Sutter Health, Series A, 5.25%, 11/15/46

      10,000         11,097,200   

Sutter Health, Series B, 6.00%, 8/15/42

      9,655         11,943,718   

California Health Facilities Financing Authority, Refunding RB:

      

Catholic Healthcare West, Series A, 6.00%, 7/01/34

      3,700         4,442,997   

Stanford Hospital, Series A-3, 5.50%, 11/15/40

      2,915         3,511,030   

California Statewide Communities Development Authority, RB, Kaiser Permanente:

      

Series A, 5.00%, 4/01/42

      37,565         41,697,150   

Series B, 5.25%, 3/01/45

      6,260         6,820,208   

City of Newport Beach California, Refunding RB, Hoag Memorial Hospital Presbyterian,

      

6.00%, 12/01/40

      3,820         4,720,794   
     

 

 

  
        114,456,359   
     

 

 

  

State – 9.1%

      

California State Public Works Board, RB, Department of Education, Riverside Campus Project, Series B,

      

6.50%, 4/01/34

      3,670         4,505,292   

California State Public Works Board, RB, California State Prisons, Series C,

      

5.75%, 10/01/31

      1,205         1,418,502   

State of California, GO:

      

6.00%, 3/01/33

      6,005         7,390,053   

6.00%, 4/01/38

      28,265         33,917,152   

University of California, RB, Limited Project, Series D (NPFGC),

      

5.00%, 5/15/41

      13,000         14,227,070   
     

 

 

  
        61,458,069   
     

 

 

  

Transportation – 16.5%

      

Bay Area Toll Authority, RB, Series C-1,

      

1.12%, 4/01/45(e)

      4,400         4,400,308   

City of Fresno California, ARB, Series B, AMT (AGM),

      

5.50%, 7/01/20

      4,455         4,561,831   

City of Los Angeles Department of Airports, Refunding RB, Series A,

      

5.25%, 5/15/39

      2,335         2,710,538   

City of San Jose California, Refunding ARB, Series A-1, AMT:

      

5.25%, 3/01/23

      2,985         3,514,688   

6.25%, 3/01/34

      1,400         1,675,576   

County of Orange California, ARB, Series B,

      

5.75%, 7/01/34

      6,345         7,319,655   

County of Sacramento California, ARB:

      

Senior Series A (AGC), 5.50%, 7/01/41

      8,190         9,490,654   

Senior Series B, 5.75%, 7/01/39

      2,650         3,101,613   

Senior Series B AMT (AGM), 5.75%, 7/01/28

      13,275         15,554,849   

Senior Series B AMT (AGM), 5.25%, 7/01/33

      19,530         22,185,103   

Los Angeles Department of Airports, RB, Los Angeles International Airport, Senior Series D,

      

5.25%, 5/15/29

      2,590         3,075,832   

Los Angeles Harbor Department, RB, Series B,

      

5.25%, 8/01/34

      5,530         6,495,980   

San Diego County Regional Airport Authority, RB, Senior, Series B, AMT,

      

5.00%, 7/01/38

      5,500         6,086,355   

 

2   BLACKROCK MUNIHOLDINGS CALIFORNIA QUALITY FUND, INC.    APRIL 30, 2013    

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)

      

Transportation (concluded)

      

San Francisco City & County Airports Commission, RB, Series E,

      

6.00%, 5/01/39

    $ 9,650       $ 11,625,259   

San Francisco City & County Airports Commission, Refunding RB, AMT:

      

Second Series 34E (AGM), 5.75%, 5/01/24

      5,000         5,861,800   

Second Series A, 5.00%, 5/01/32

      1,415         1,584,659   

San Joaquin County Transportation Authority, Refunding RB, Limited Tax, Measure K, Series A,

      

6.00%, 3/01/36

      2,400         2,965,440   
     

 

 

  
        112,210,140   
     

 

 

  

Utilities – 27.6%

      

Anaheim Public Financing Authority, RB, Electric System Distribution Facilities, Series A,

      

5.38%, 10/01/36

      2,200         2,615,910   

City of Los Angeles California Wastewater System, Refunding RB:

      

Series A (NPFGC), 5.00%, 6/01/34

      3,000         3,233,940   

Sub-Series A, 5.00%, 6/01/28

      2,000         2,321,400   

Sub-Series A, 5.00%, 6/01/32

      6,000         6,934,680   

City of Sacramento California, RB, Water Revenue Bonds:

      

5.00%, 9/01/38

      2,000         2,329,940   

5.00%, 9/01/42

      2,000         2,314,620   

Cucamonga Valley Water District Financing Authority, RB, Water Utility:

      

5.00%, 9/01/37

      7,705         8,951,361   

5.00%, 9/01/42

      5,500         6,355,745   

Dublin-San Ramon Services District, Refunding RB,

      

6.00%, 8/01/41

      4,000         4,909,440   

East Bay Municipal Utility District, RB, Series A (NPFGC),

      

5.00%, 6/01/32

      11,935         13,492,517   

East Bay Municipal Utility District, Refunding RB, Sub-Series A:

      

(AGM) (NPFGC), 5.00%, 6/01/37

      11,190         12,659,807   

(AMBAC), 5.00%, 6/01/33

      5,000         5,694,950   

Eastern Municipal Water District, COP, Series H,

      

5.00%, 7/01/33

      2,500         2,841,550   

Imperial Irrigation District, Refunding RB, System,

      

5.13%, 11/01/38

      9,500         10,835,035   

Los Angeles Department of Water & Power, RB, Series A,

      

5.38%, 7/01/38

      9,000         10,494,090   

Los Angeles Department of Water & Power, Refunding RB, System, Series A,

      

5.25%, 7/01/39

      16,000         18,592,160   

Metropolitan Water District of Southern California, RB, Series B-1 (NPFGC),

      

5.00%, 10/01/13(d)

      8,605         8,778,047   

Sacramento Municipal Utility District, RB:

      

Series A, 5.00%, 8/15/37(c)

      3,630         4,195,481   

Series R (NPFGC), 5.00%, 8/15/33

      5,360         5,434,558   

San Diego County Water Authority, COP, Refunding, Series A:

      

(AGM), 5.00%, 5/01/33(c)

      5,010         5,667,813   

(NPFGC), 5.00%, 5/01/32

      3,495         3,495,454   

San Diego County Water Authority, Refunding RB, Series A,

      

5.00%, 5/01/31

      5,000         5,981,350   

San Diego Public Facilities Financing Authority, Refunding RB, Senior Series A:

      

5.25%, 5/15/34

      1,000         1,172,270   

5.25%, 5/15/39

      10,000         11,608,300   

San Francisco City & County Public Utilities Commission, RB:

      

Local Water Main Sub-Series C, 5.00%, 11/01/41

      5,000         5,757,750   

Series B, 5.00%, 11/01/30

      10,000         11,707,700   

San Juan Water District, Refunding RB, San Juan & Citrus Heights,

      

5.25%, 2/01/33

      7,325         8,609,805   
     

 

 

  
        186,985,673   
     

 

 

  

Total Municipal Bonds – 103.5%

         701,380,918   
     

 

 

  

Municipal Bonds Transferred to Tender Option Bond (TOB) Trusts (b)

              

California – 62.4%

      

County/City/Special District/School District – 33.5%

      

Alameda County Joint Powers Authority, Refunding LRB, Lease (AGM),

      

5.00%, 12/01/34

      13,180         14,706,508   

Desert Community College District California, GO, Series C (AGM),

      

5.00%, 8/01/37

      16,530         17,936,372   

Foothill-De Anza Community College District, GO, Series C,

      

5.00%, 8/01/40

      37,839         43,452,901   

Los Angeles Community College District California, GO:

      

Election of 2001, Series A (NPFGC), 5.00%, 8/01/32

      6,647         7,488,751   

Election of 2001, Series E-1, 5.00%, 8/01/33

      11,770         13,434,749   

Election of 2003, Series E (AGM), 5.00%, 8/01/31

      11,216         12,443,223   

Election of 2003, Series F-1, 5.00%, 8/01/33

      10,000         11,414,400   

Los Angeles Community College District California, GO, Refunding, Election of 2008, Series A,

      

6.00%, 8/01/33

      9,596         11,879,054   

 

    BLACKROCK MUNIHOLDINGS CALIFORNIA QUALITY FUND, INC.    APRIL 30, 2013   3

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)

      

Los Angeles County Metropolitan Transportation Authority, Refunding RB, Proposition A, First Tier,
Senior Series A (AMBAC),

      

5.00%, 7/01/35

    $ 8,997       $ 9,716,976   

Los Angeles County Sanitation Districts Financing Authority, Refunding RB, Capital Project 14 (BHAC),

      

5.00%, 10/01/34

      7,917         8,555,089   

Ohlone Community College District, GO, Series B (AGM),

      

5.00%, 8/01/15(d)

      16,518         18,233,669   

Poway Unified School District, GO, Election of 2002, Improvement District 02, Series 1-B (AGM),

      

5.00%, 8/01/30

      10,000         10,743,500   

San Bernardino Community College District California, GO, Election of 2002, Series C (AGM),

      

5.00%, 8/01/31

      17,770         19,552,864   

San Francisco Bay Area Rapid Transit District, Refunding RB, Series A (NPFGC):

      

5.00%, 7/01/30

      23,100         24,922,359   

5.00%, 7/01/34

      2,499         2,696,484   
     

 

 

  
        227,176,899   
     

 

 

  

Education – 12.4%

      

Chaffey Community College District, GO, Election of 2002, Series B (NPFGC),

      

5.00%, 6/01/15(d)

      9,905         10,610,055   

Los Rios Community College District, GO, Election of 2008, Series A,

      

5.00%, 8/01/35

      11,000         12,477,630   

Mount Diablo California Unified School District, GO, Election of 2002 (NPFGC),

      

5.00%, 6/01/14(d)

      4,000         4,243,320   

Riverside Community College District, GO, Election of 2004, Series C (NPFGC),

      

5.00%, 8/01/32

      8,910         10,060,994   

University of California, RB:

      

Limited Project, Series D (AGM), 5.00%, 5/15/41

      8,000         8,858,160   

Series O, 5.75%, 5/15/34

      11,190         13,482,421   

University of California, Refunding RB, Limited Project, Series G,

      

5.00%, 5/15/37

      21,391         24,573,805   
     

 

 

  
        84,306,385   
     

 

 

  

Transportation – 2.4%

      

City of Los Angeles California Department of Airports, Refunding RB, Los Angeles International Airport,
Senior Series A,

      

5.00%, 5/15/40

      4,999         5,646,485   

San Mateo County Transportation Authority, Refunding RB, Series A (NPFGC),

      

5.00%, 6/01/32

      10,000         10,711,100   
     

 

 

  
        16,357,585   
     

 

 

  

Utilities – 14.1%

      

City of Napa California Water System, RB (AMBAC),

      

5.00%, 5/01/35

      9,100         9,835,189   

East Bay Municipal Utility District, RB, Sub-Series A (NPFGC),

      

5.00%, 6/01/35

      12,070         12,995,648   

East Bay Municipal Utility District, Refunding RB, Sub-Series A (AMBAC),

      

5.00%, 6/01/37

      14,510         16,495,838   

Los Angeles Department of Water & Power, RB, Sub-Series A-2 (AGM),

      

5.00%, 7/01/35

      7,500         8,332,800   

Metropolitan Water District of Southern California, RB, Series A (AGM),

      

5.00%, 7/01/35

      12,870         13,908,352   

Rancho Water District Financing Authority, Refunding RB, Series A (AGM),

      

5.00%, 8/01/34

      5,008         5,716,861   

Sacramento County Sanitation District Financing Authority, RB, Sacramento Regional County
Sanitation (NPFGC),

      

5.00%, 12/01/36

      4,500         4,967,325   

San Diego County Water Authority, COP, Series A (AGM),

      

5.00%, 5/01/31

      4,000         4,270,600   

San Diego County Water Authority, COP, Refunding, Series 2008-A (AGM),

      

5.00%, 5/01/33

      16,740         18,937,962   
     

 

 

  
        95,460,575   
     

 

 

  

Total Municipal Bonds Transferred to Tender Option Bond (TOB) Trusts – 62.4%

         423,301,444   
     

 

 

  

Total Long-Term Investments
(Cost – $1,035,176,008) – 165.9%

         1,124,682,362   
     

 

 

  

Short-Term Securities

    Shares         

BIF California Municipal Money Fund,

      

0.00% (f)(g)

      413,372         413,372   
     

 

 

  

Total Short-Term Securities
(Cost – $413,372) – 0.1%

         413,372   
     

 

 

  

 

4   BLACKROCK MUNIHOLDINGS CALIFORNIA QUALITY FUND, INC.    APRIL 30, 2013    

Schedule of Investments (continued)    BlackRock MuniHoldings California Quality Fund, Inc. (MUC)
   (Percentages shown are based on Net Assets)

 

          Value  

Total Investments (Cost – $1,035,589,380*) – 166.0%

       $ 1,125,095,734   

Other Assets Less Liabilities – 0.7%

         5,107,702   

Liability for TOB Trust Certificates, Including Interest Expense and Fees Payable – (29.2)%

         (198,265,824 ) 

VMTP Shares, at Liquidation Value– (37.5)%

         (254,000,000 ) 
     

 

 

  

Net Assets Applicable to Common Shares – 100.0%

       $ 677,937,612   
     

 

 

  

 

* As of April 30, 2013, gross unrealized appreciation and gross unrealized depreciation based on cost for federal income tax purposes were as follows:

 

Tax cost

    $ 837,699,124   
  

 

 

  

Gross unrealized appreciation

    $ 89,638,805   

Gross unrealized depreciation

      (400,559 ) 
  

 

 

  

Net unrealized appreciation

    $ 89,238,246   
  

 

 

  

Notes to Schedule of Investments

 

(a) Represents a zero-coupon bond. Rate shown reflects the current yield as of report date.

 

(b) Securities represent bonds transferred to a TOB in exchange for which the Fund acquired residual interest certificates. These securities serve as collateral in a financing transaction.

 

(c) When-issued security. Unsettled when-issued transactions were as follows:

 

Counterparty

    Value      Unrealized
Appreciation
(Depreciation)		  

Barclay’s Plc

    $ 4,195,481       $ 36,845   

Citigroup, Inc.

    $ 5,667,813       $ (2,906 ) 

Piper Jaffray & Co.

    $ 3,528,960       $ 18,420   

 

(d) US 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.

 

(e) Variable rate security. Rate shown is as of report date.

 

(f) Investments in issuers considered to be an affiliate of the Fund during the period ended April 30, 2013, 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,
2012		      Net Activity     Shares Held at
April  30,
2013		      Income  

BIF California Municipal Money Fund

      19,427,466         (19,014,094 )      413,372       $ 4   

 

(g) Represents the current yield as of report date.

 

    BLACKROCK MUNIHOLDINGS CALIFORNIA QUALITY FUND, INC.    APRIL 30, 2013   5

Schedule of Investments (continued)    BlackRock MuniHoldings California Quality Fund, Inc. (MUC)
  

 

Portfolio Abbreviations

 

To simplify the listings of portfolio holdings in the Schedule of Investments, the names and descriptions of many of the securities have been abbreviated according to the following list:

AGC   Assured Guaranty 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.
CAB   Capital Appreciation Bonds
COP   Certificates of Participation
GO   General Obligation Bonds
LRB   Lease Revenue Bonds
NPFGC   National Public Finance Guarantee Corp.
RB   Revenue Bonds
 

 

• Financial futures contracts as of April 30, 2013 were as follows:

 

Contracts

Sold

   

Issue

   

Exchange

   

Expiration

    Notional Value      Unrealized
Depreciation		  

(400)

    10-Year US Treasury Note    Chicago Board of Trade    June 2013    $ 53,343,750       $ (809,949 ) 

 

•  

For Fund compliance purposes, the Fund’s sector classifications refer to any one or more of the sector sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by Fund management. 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 reporting purposes as follows:

 

  •  

Level 1 – unadjusted price quotations in active markets/exchanges for identical assets and 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 level in the fair value hierarchy within which the fair value measurement falls in its entirety is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. In accordance with the Fund’s policy, transfers between different levels of the fair value disclosure 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 investment and derivative financial instrument 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 and other significant accounting policies, please refer to the Fund’s most recent financial statements as contained in its semi-annual report.

 

6   BLACKROCK MUNIHOLDINGS CALIFORNIA QUALITY FUND, INC.    APRIL 30, 2013    

Schedule of Investments (concluded)    BlackRock MuniHoldings California Quality Fund, Inc. (MUC)
  

 

The following tables summarize the Fund’s investments and derivative financial instruments categorized in the disclosure hierarchy as of April 30, 2013:

 

      Level 1      Level 2      Level 3      Total  

Assets:

            

Investments:

            

Long-Term Investments1

      –       $ 1,124,682,362         –       $ 1,124,682,362   

Short-Term Securities

    $ 413,372         –         –         413,372   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total

    $ 413,372       $ 1,124,682,362         –       $ 1,125,095,734   
  

 

 

     

 

 

     

 

 

     

 

 

  

 

1 

See above Schedule of Investments for values in each sector.

 

      Level 1     Level 2      Level 3      Total  

Derivative Financial Instruments2

           

Liabilities:

           

Interest rate contracts

    $ (809,949 )      –         –       $ (809,949 ) 

 

2 

Derivative financial instruments are financial futures contracts, which are valued at the unrealized appreciation/depreciation on the instrument.

Certain of the Fund’s assets and liabilities are held at carrying amount, which approximates fair value for financial reporting purposes.

As of April 30, 2013, such assets and liabilities are categorized within the disclosure hierarchy as follows:

 

      Level 1      Level 2     Level 3      Total  

Assets:

           

Cash pledged for financial futures contracts

    $ 528,000         –        –       $ 528,000   

Liabilities:

           

TOB trust certificates

      –       $ (198,158,364 )      –         (198,158,364 ) 

VMTP shares

      –         (254,000,000 )      –         (254,000,000 ) 
  

 

 

     

 

 

    

 

 

     

 

 

  

Total

    $ 528,000       $ (452,158,364 )      –       $ (451,630,364 ) 
  

 

 

     

 

 

    

 

 

     

 

 

  

There were no transfers between levels during the period ended April 30, 2013.

 

    BLACKROCK MUNIHOLDINGS CALIFORNIA QUALITY FUND, INC.    APRIL 30, 2013   7

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 California Quality Fund, Inc.

By:  

/s/ John M. Perlowski

    
  John M. Perlowski    
  Chief Executive Officer (principal executive officer) of  
  BlackRock MuniHoldings California Quality Fund, Inc.  
Date: June 24, 2013  

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: June 24, 2013

 

By:  

/s/ Neal J. Andrews

    
  Neal J. Andrews    
  Chief Financial Officer (principal financial officer) of
  BlackRock MuniHoldings California Quality Fund, Inc.

Date: June 24, 2013