BLACKROCK MUNICIPAL INCOME TRUST II

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: 811-21126

Name of Fund:  BlackRock Municipal Income Trust II (BLE)

Fund Address:   100 Bellevue Parkway, Wilmington, DE 19809

Name and address of agent for service:  John M. Perlowski, Chief Executive Officer, BlackRock Municipal Income Trust II, 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: 08/31/2017

Date of reporting period: 05/31/2017


Item 1 – Schedule of Investments


Schedule of Investments May 31, 2017 (Unaudited)

  

BlackRock Municipal Income Trust II (BLE)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par

(000)

    Value  
Alabama — 2.6%             

County of Jefferson Alabama, RB, Limited Obligation School, Series A, 5.25%, 1/01/19

   $ 1,620     $ 1,625,168  

County of Jefferson Alabama Sewer, Refunding RB:

    

Senior Lien, Series A (AGM), 5.00%, 10/01/44

     540       608,488  

Senior Lien, Series A (AGM), 5.25%, 10/01/48

     1,320       1,507,097  

Sub-Lien, Series D, 7.00%, 10/01/51

     3,220       3,923,860  

Lower Alabama Gas District, RB, Series A, 5.00%, 9/01/46

     1,170       1,454,883  
    

 

 

 
               9,119,496  
Arizona — 2.8%             

City of Phoenix Arizona IDA, RB, Legacy Traditional Schools Projects, Series A, 5.00%, 7/01/46 (a)

     1,825       1,855,916  

Salt Verde Financial Corp., RB, Senior:

    

5.00%, 12/01/32

     5,635       6,767,184  

5.00%, 12/01/37

     1,000       1,214,840  
    

 

 

 
               9,837,940  
California — 11.0%             

Bay Area Toll Authority, Refunding RB, San Francisco Bay Area Toll Bridge, Series F-1, 5.63%, 4/01/19 (b)

     2,480       2,692,313  

California Health Facilities Financing Authority, RB, Sutter Health, Series B, 6.00%, 8/15/42

     3,500       4,004,070  

California Health Facilities Financing Authority, Refunding RB, St. Joseph Health System, Series A, 5.00%, 7/01/33

     1,365       1,565,573  

California Municipal Finance Authority, RB, Senior, Caritas Affordable Housing, Inc. Projects, S/F Housing, Series A:

    

5.25%, 8/15/39

     160       176,830  

5.25%, 8/15/49

     395       433,915  

California Municipal Finance Authority, Refunding RB, Community Medical Centers, Series A:

    

5.00%, 2/01/36

     345       393,189  

5.00%, 2/01/37

     260       295,394  
Municipal Bonds   

Par

(000)

    Value  
California (continued)             

California Pollution Control Financing Authority, RB, Poseidon Resources (Channel Side) LP Desalination Project, AMT, 5.00%, 11/21/45 (a)

   $ 1,655     $ 1,768,285  

California Statewide Communities Development Authority, RB, Loma Linda University Medical Center, Series A, 5.00%, 12/01/46 (a)

     685       737,848  

City of Los Angeles California Department of Airports, Refunding ARB, Los Angeles International Airport, Series A:

    

Senior, 5.00%, 5/15/40

     6,500       7,180,225  

5.25%, 5/15/39

     860       927,372  

City of Stockton California Public Financing Authority, RB, Delta Water Supply Project, Series A, 6.25%, 10/01/38

     380       463,908  

San Marcos Unified School District, GO, CAB, Election of 2010, Series B (c):

    

0.00%, 8/01/33

     3,000       1,695,780  

0.00%, 8/01/43

     2,500       889,150  

State of California, GO, Various Purposes:

    

6.00%, 3/01/33

     1,760       1,984,259  

6.50%, 4/01/33

     10,645       11,726,958  

State of California Public Works Board, LRB, Various Capital Projects:

    

Series I, 5.00%, 11/01/38

     825       940,261  

Sub-Series I-1, 6.38%, 11/01/19 (b)

     1,280       1,446,592  
    

 

 

 
               39,321,922  
Colorado — 0.7%             

Colorado Health Facilities Authority, Refunding RB, Catholic Health Initiative, Series A, 5.50%, 7/01/34

     2,330       2,429,934  
Connecticut — 3.2%             

Connecticut State Health & Educational Facility Authority, RB:

    

Ascension Health Senior Credit, Series A, 5.00%, 11/15/40

     1,005       1,080,395  

Yale University Issue, Series T-1, 4.70%, 7/01/29

     5,180       5,196,265  
 

 

 

                
   BLACKROCK MUNICIPAL INCOME TRUST II    MAY 31, 2017    1


Schedule of Investments (continued)

  

BlackRock Municipal Income Trust II (BLE)

 

Municipal Bonds   

Par

(000)

    Value  
Connecticut (continued)             

Connecticut State Health & Educational Facility Authority, RB (continued):

    

Yale University Issue, Series X-3, 4.85%, 7/01/37

   $ 5,130     $ 5,146,365  
    

 

 

 
               11,423,025  
Delaware — 2.0%             

County of Sussex Delaware, RB, NRG Energy, Inc., Indian River Power LLC Project, 6.00%, 10/01/40

     1,240       1,338,878  

Delaware Transportation Authority, RB, 5.00%, 6/01/55

     1,260       1,398,310  

State of Delaware EDA, RB, Exempt Facilities, Indian River Power LLC Project, 5.38%, 10/01/45

     4,275       4,456,474  
    

 

 

 
               7,193,662  
District of Columbia — 4.8%             

District of Columbia, Refunding RB:

    

Georgetown University, 5.00%, 4/01/35

     465       546,701  

Georgetown University Issue, 5.00%, 4/01/36

     465       544,966  

Georgetown University Issue, 5.00%, 4/01/42

     540       625,374  

Kipp Charter School, Series A, 6.00%, 7/01/43

     820       950,897  

District of Columbia Tobacco Settlement Financing Corp., Refunding RB, Asset-Backed, 6.75%, 5/15/40

     11,500       11,684,805  

Metropolitan Washington DC Airports Authority, Refunding RB, Dulles Toll Road, 1st Senior Lien, Series A:

    

5.00%, 10/01/39

     550       590,254  

5.25%, 10/01/44

     2,000       2,154,060  
    

 

 

 
               17,097,057  
Florida — 5.3%             

City of Atlantic Beach Florida, RB, Health Care Facilities, Fleet Landing Project, Series B, 5.63%, 11/15/43

     1,445       1,600,785  

City of Jacksonville Florida Port Authority, Refunding RB, AMT, 5.00%, 11/01/38

     1,665       1,808,606  

County of Collier Florida Health Facilities Authority, Refunding RB, Series A, 5.00%, 5/01/45

     1,450       1,606,615  
Municipal Bonds   

Par

(000)

    Value  
Florida (continued)             

County of Miami-Dade Florida Aviation, Refunding, AMT, Miami International Airport, 5.25%, 10/01/38

   $ 1,625     $ 1,700,969  

County of Miami-Dade Florida Aviation, Refunding ARB, Miami International Airport, Series A-1, 5.38%, 10/01/41

     1,255       1,386,612  

County of Miami-Dade Florida Water & Sewer System, RB, (AGM), 5.00%, 10/01/39

     5,000       5,525,500  

Mid-Bay Florida Bridge Authority, RB, Springing Lien, Series A, 7.25%, 10/01/21 (b)

     3,300       4,124,604  

Stevens Plantation Community Development District, RB, Special Assessment, Series A, 7.10%, 5/01/35 (d)(e)

     1,795       1,255,656  
    

 

 

 
               19,009,347  
Georgia — 0.5%             

County of Gainesville Georgia & Hall Hospital Authority, Refunding RB, Northeast Georgia Health System, Inc. Project, Series A, 5.50%, 8/15/54

     555       656,465  

DeKalb Georgia Private Hospital Authority, Refunding RB, Children’s Healthcare, 5.25%, 11/15/39

     915       998,110  
    

 

 

 
               1,654,575  
Hawaii — 0.5%             

State of Hawaii Harbor System, RB, Series A, 5.25%, 7/01/30

     1,480       1,623,812  
Idaho — 0.3%             

Idaho Health Facilities Authority, RB, Trinity Health Credit Group, Series A, 5.00%, 12/01/46

     805       919,286  
Illinois — 19.5%             

City of Chicago Illinois, GARB, O’Hare International Airport, 3rd Lien, Series A, 5.75%, 1/01/39

     5,000       5,648,850  

City of Chicago Illinois, GO, Project, Series A, 5.00%, 1/01/34

     2,800       2,723,000  

City of Chicago Illinois, GO, Refunding, Project, Series A, 5.25%, 1/01/32

     4,940       4,950,670  
 

 

 

                
2    BLACKROCK MUNICIPAL INCOME TRUST II    MAY 31, 2017   


Schedule of Investments (continued)

  

BlackRock Municipal Income Trust II (BLE)

 

Municipal Bonds   

Par

(000)

    Value  
Illinois (continued)             

City of Chicago Illinois O’Hare International Airport, GARB, 3rd Lien, Series C, 6.50%, 1/01/21 (b)

   $ 6,430     $ 7,659,159  

City of Chicago Illinois Transit Authority, RB, Sales Tax Receipts, 5.25%, 12/01/40

     1,150       1,240,574  

City of Chicago Illinois Waterworks, Refunding RB, 2nd Lien Project, 5.00%, 11/01/42

     3,130       3,362,935  

County of Cook Illinois Community College District No. 508, GO, City College of Chicago, 5.50%, 12/01/38

     845       911,907  

Illinois Finance Authority, Refunding RB:

    

Ascension Health, Series A, 5.00%, 11/15/37

     1,060       1,173,897  

Central Dupage Health, Series B, 5.50%, 11/01/39

     1,750       1,924,282  

Presence Health Network, Series C, 4.00%, 2/15/41

     1,545       1,433,034  

Illinois Sports Facilities Authority, RB, State Tax Supported (AMBAC), 5.50%, 6/15/30 (f)

     7,445       7,627,998  

Illinois State Toll Highway Authority, RB, Senior:

    

Series A, 5.00%, 1/01/38

     2,160       2,424,168  

Series C, 5.00%, 1/01/36

     2,815       3,184,075  

Series C, 5.00%, 1/01/37

     3,005       3,392,465  

Metropolitan Pier & Exposition Authority, Refunding RB, McCormick Place Expansion Project:

    

Series B (AGM), 5.00%, 6/15/50

     6,725       7,056,879  

Series B-2, 5.00%, 6/15/50

     2,725       2,728,733  

Railsplitter Illinois Tobacco Settlement Authority, RB, 5.50%, 6/01/23

     520       594,500  

Railsplitter Tobacco Settlement Authority, RB, 6.00%, 6/01/28

     1,255       1,436,912  

State of Illinois, GO:

    

5.00%, 2/01/39

     1,640       1,652,825  

Series A, 5.00%, 4/01/35

     2,500       2,527,550  

Series A, 5.00%, 4/01/38

     3,885       3,912,078  

State of Illinois, RB, Build Illinois, Series B, 5.25%, 6/15/19 (b)

     685       743,828  
Municipal Bonds   

Par

(000)

    Value  
Illinois (continued)             

University of Illinois, RB, Auxiliary Facilities System, Series A, 5.00%, 4/01/44

   $ 1,050     $ 1,151,630  
    

 

 

 
               69,461,949  
Indiana — 4.8%             

City of Valparaiso Indiana, RB, Exempt Facilities, Pratt Paper LLC Project, AMT:

    

6.75%, 1/01/34

     845       1,007,113  

7.00%, 1/01/44

     3,535       4,253,277  

Indiana Finance Authority, RB, Series A:

    

CWA Authority Project, 1st Lien, 5.25%, 10/01/38

     3,510       3,979,989  

Private Activity Bond, Ohio River Bridges East End Crossing Project, AMT, 5.00%, 7/01/44

     485       519,188  

Private Activity Bond, Ohio River Bridges East End Crossing Project, AMT, 5.00%, 7/01/48

     1,610       1,729,382  

Private Activity Bond, Ohio River Bridges East End Crossing Project, AMT, 5.25%, 1/01/51

     435       471,414  

Sisters of St. Francis Health Services, 5.25%, 11/01/39

     915       987,733  

Indiana Finance Authority, Refunding RB, Marquette Project, 4.75%, 3/01/32

     1,180       1,197,452  

Indiana Municipal Power Agency, RB, Series B, 6.00%, 1/01/19 (b)

     1,200       1,295,388  

Indianapolis Local Public Improvement Bond Bank, RB, Series A, 5.00%, 1/15/40

     1,380       1,559,096  
    

 

 

 
               17,000,032  
Iowa — 1.9%             

Iowa Finance Authority, Refunding RB, Midwestern Disaster Area, Iowa Fertilizer Co. Project:

    

5.00%, 12/01/19

     520       533,650  

5.50%, 12/01/22

     2,550       2,605,666  

5.25%, 12/01/25

     500       516,665  

5.88%, 12/01/26 (a)

     445       456,948  

Iowa Student Loan Liquidity Corp., Refunding RB, Student Loan, Senior Series A-1, AMT, 5.15%, 12/01/22

     1,085       1,151,066  
 

 

 

                
   BLACKROCK MUNICIPAL INCOME TRUST II    MAY 31, 2017    3


Schedule of Investments (continued)

  

BlackRock Municipal Income Trust II (BLE)

 

Municipal Bonds   

Par

(000)

    Value  
Iowa (continued)             

Iowa Tobacco Settlement Authority, Refunding RB, Asset-Backed, Series C, 5.63%, 6/01/46

   $ 1,610     $ 1,610,113  
    

 

 

 
               6,874,108  
Kentucky — 0.6%             

Kentucky Economic Development Finance Authority, RB, Catholic Health Initiatives, Series A, 5.25%, 1/01/45

     1,060       1,140,496  

Kentucky Public Transportation Infrastructure Authority, RB, Downtown Crossing Project, Convertible CAB, 1st Tier, Series C, 0.00%, 7/01/43 (f)

     1,280       1,101,709  
    

 

 

 
               2,242,205  
Louisiana — 2.8%             

Louisiana Local Government Environmental Facilities & Community Development Authority, RB, Westlake Chemical Corp. Project, Series A-1, 6.50%, 11/01/35

     3,650       4,167,022  

Tobacco Settlement Financing Corp., Refunding RB, Asset-Backed, Series A:

    

5.50%, 5/15/30

     1,100       1,177,176  

5.25%, 5/15/31

     935       1,006,032  

5.25%, 5/15/32

     1,195       1,301,283  

5.25%, 5/15/33

     1,300       1,409,434  

5.25%, 5/15/35

     795       867,719  
    

 

 

 
               9,928,666  
Maryland — 1.8%             

City of Baltimore, Refunding RB, Convention Center Hotel (g):

    

5.00%, 9/01/34

     470       531,264  

5.00%, 9/01/42

     920       1,029,020  

Maryland EDC, RB, Transportation Facilities Project, Series A, 5.75%, 6/01/35

     475       511,433  

Maryland EDC, Refunding RB, CNX Marine Terminals, Inc., 5.75%, 9/01/25

     800       804,360  

Maryland Health & Higher Educational Facilities Authority, RB, Trinity Health Credit Group, Series 2017, 5.00%, 12/01/46

     455       522,936  
Municipal Bonds   

Par

(000)

    Value  
Maryland (continued)             

Maryland Health & Higher Educational Facilities Authority, Refunding RB, Charlestown Community Project, 6.25%, 1/01/21 (b)

   $ 2,400     $ 2,829,384  
    

 

 

 
               6,228,397  
Massachusetts — 1.5%             

Commonwealth of Massachusetts, GO, Series E, 3.00%, 4/01/44

     3,105       2,859,612  

Massachusetts Development Finance Agency, Refunding RB, Covanta Energy Project, Series C, AMT, 5.25%, 11/01/42 (a)

     1,530       1,535,585  

Massachusetts Health & Educational Facilities Authority, Refunding RB, Partners Healthcare System, Series J1, 5.00%, 7/01/39

     955       1,016,196  
    

 

 

 
               5,411,393  
Michigan — 2.7%             

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

     4,825       5,374,085  

Kalamazoo Hospital Finance Authority, Refunding RB, Bronson Methodist Hospital:

    

5.50%, 5/15/20 (b)

     830       934,821  

5.50%, 5/15/36

     670       736,766  

Michigan Finance Authority, Refunding RB:

    

Detroit Water & Sewage Department Project, Senior Lien, Series C-1, 5.00%, 7/01/44

     940       1,024,299  

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

     1,540       1,561,806  
    

 

 

 
               9,631,777  
Missouri — 1.9%             

370/Missouri Bottom Road/Taussig Road Transportation Development District, RB, 7.20%, 5/01/33

     6,000       5,124,960  

Bi-State Development Agency of the Missouri-Illinois Metropolitan District, Refunding RB, Combined Lien, Series A, 5.00%, 10/01/44

     275       312,356  
 

 

 

                
4    BLACKROCK MUNICIPAL INCOME TRUST II    MAY 31, 2017   


Schedule of Investments (continued)

  

BlackRock Municipal Income Trust II (BLE)

 

Municipal Bonds   

Par

(000)

    Value  
Missouri (continued)             

State of Missouri Health & Educational Facilities Authority, RB, Senior Living Facilities, Lutheran Senior Services, 5.50%, 2/01/42

   $ 1,135     $ 1,200,864  

State of Missouri Health & Educational Facilities Authority, Refunding RB, St. Louis College of Pharmacy Project, 5.50%, 5/01/43

     265       291,312  
    

 

 

 
               6,929,492  
Multi-State — 2.0%             

Centerline Equity Issuer Trust (a):

    

Series A-4-2, 6.00%, 5/15/19

     3,500       3,770,620  

Series B-3-2, 6.30%, 5/15/19

     3,000       3,248,850  
    

 

 

 
               7,019,470  
Nebraska — 1.6%             

Central Plains Energy Project Nebraska, RB, Gas Project No. 3, 5.25%, 9/01/37

     895       986,612  

Central Plains Nebraska Energy Project, RB, Gas Project No. 3, 5.00%, 9/01/42

     1,570       1,688,205  

County of Lancaster Nebraska Hospital Authority No. 1, Refunding RB, Immanuel Obligation Group, Health Facilities, 5.63%, 1/01/40

     1,245       1,351,485  

County of Sarpy Nebraska Hospital Authority No. 1, Refunding RB, Immanuel Obligation Group, 5.63%, 1/01/40

     1,635       1,745,085  
    

 

 

 
               5,771,387  
New Jersey — 8.4%             

Casino Reinvestment Development Authority, Refunding RB:

    

5.25%, 11/01/39

     1,805       1,851,713  

5.25%, 11/01/44

     1,640       1,673,226  

County of Essex New Jersey Improvement Authority, RB, AMT, 5.25%, 7/01/45 (a)

     1,165       1,171,524  

New Jersey EDA, RB, Continental Airlines, Inc. Project, AMT:

    

4.88%, 9/15/19

     670       707,306  

5.13%, 9/15/23

     2,130       2,305,107  

5.25%, 9/15/29

     2,130       2,320,124  

New Jersey EDA, Refunding RB, Special Assessment, Kapkowski Road Landfill Project, 6.50%, 4/01/28

     7,475       8,808,540  
Municipal Bonds   

Par

(000)

    Value  
New Jersey (continued)             

New Jersey State Turnpike Authority, RB:

    

Series A, 5.00%, 1/01/43

   $ 2,160     $ 2,404,231  

Series E, 5.00%, 1/01/45

     2,810       3,162,205  

New Jersey Transportation Trust Fund Authority, RB:

    

Transportation Program, Series AA, 5.00%, 6/15/44

     1,355       1,375,420  

Transportation Program, Series AA, 5.00%, 6/15/44

     730       742,541  

Transportation System, Series B, 5.25%, 6/15/36

     2,690       2,780,761  

Rutgers - The State University of New Jersey, Refunding RB, Series L, 5.00%, 5/01/43

     570       638,258  
    

 

 

 
               29,940,956  
New York — 7.6%             

City of New York New York Transitional Finance Authority Future Tax Secured, RB, Fiscal 2012, Sub-Series E-1, 5.00%, 2/01/42

     2,680       3,027,515  

Counties of New York Tobacco Trust IV, Refunding RB, Settlement Pass-Through Turbo, Series A, 6.25%, 6/01/41 (a)

     2,000       2,083,140  

County of Westchester New York Healthcare Corp., RB, Senior Lien, Series A, 5.00%, 11/01/44

     819       879,396  

Hudson Yards Infrastructure Corp., Refunding RB, Series A, 5.00%, 2/15/39

     1,005       1,178,664  

Metropolitan Transportation Authority, RB, Series B:

    

5.25%, 11/15/38

     2,555       2,981,481  

5.25%, 11/15/39

     910       1,056,874  

Metropolitan Transportation Authority Hudson Rail Yards Trust Obligations, Refunding RB, Series A, 5.00%, 11/15/56

     1,135       1,251,803  

New York Liberty Development Corp., Refunding RB:

    

2nd Priority, Bank of America Tower at One Bryant Park Project, Class 3, 6.38%, 7/15/49

     1,335       1,453,214  

3 World Trade Center Project, Class 1, 5.00%, 11/15/44 (a)

     4,320       4,630,565  

3 World Trade Center Project, Class 2, 5.15%, 11/15/34 (a)

     365       396,109  
 

 

 

                
   BLACKROCK MUNICIPAL INCOME TRUST II    MAY 31, 2017    5


Schedule of Investments (continued)

  

BlackRock Municipal Income Trust II (BLE)

 

Municipal Bonds   

Par

(000)

    Value  
New York (continued)             

New York Liberty Development Corp., Refunding RB (continued):

    

3 World Trade Center Project, Class 2, 5.38%, 11/15/40 (a)

   $ 910     $ 992,410  

New York Transportation Development Corp., Refunding RB, American Airlines, Inc., AMT:

    

5.00%, 8/01/26

     675       726,631  

5.00%, 8/01/31

     1,620       1,725,478  

Niagara Area Development Corp., Refunding RB, Solid Waste Disposal Facility, Covanta Energy Project, Series A, AMT, 5.25%, 11/01/42 (a)

     1,145       1,150,828  

Port Authority of New York & New Jersey, ARB, JFK International Air Terminal LLC Project, Series 8:

    

6.00%, 12/01/42

     1,635       1,840,846  

Special Project, 6.00%, 12/01/36

     1,410       1,591,213  
    

 

 

 
               26,966,167  
North Carolina — 1.4%             

North Carolina Capital Facilities Finance Agency, Refunding RB, Solid Waste Disposal Facility, Duke Energy Carolinas Project, Series B, 4.63%, 11/01/40

     1,000       1,080,400  

North Carolina Medical Care Commission, RB, Health Care Facilities, Duke University Health System, Series A, 5.00%, 6/01/19 (b)

     1,525       1,647,335  

North Carolina Medical Care Commission, Refunding RB, 1st Mortgage:

    

Aldersgate, 6.25%, 7/01/35

     1,530       1,700,243  

Retirement Facilities Whitestone Project, Series A, 7.75%, 3/01/41

     625       690,794  
    

 

 

 
               5,118,772  
Ohio — 3.5%             

Buckeye Tobacco Settlement Financing Authority, RB, Asset-Backed, Senior Turbo Term, Series A-2, 5.88%, 6/01/47

     3,550       3,486,171  

County of Allen Ohio Hospital Facilities, Refunding RB, Catholic Healthcare Partners, Series A, 5.25%, 6/01/38

     3,405       3,694,561  
Municipal Bonds   

Par

(000)

    Value  
Ohio (continued)             

County of Franklin Ohio, RB:

    

Health Care Facilities Improvement, OPRS Communities Obligation Group, Series A, 6.13%, 7/01/40

   $ 710     $ 788,746  

Trinity Health Credit Group, Series 2017, 5.00%, 12/01/46

     435       495,169  

County of Montgomery Ohio, Refunding RB, Catholic Health:

    

5.00%, 5/01/19 (b)

     1,055       1,135,750  

Series A, 5.00%, 5/01/39

     1,970       2,041,688  

State of Ohio, RB, Portsmouth Bypass Project, AMT, 5.00%, 6/30/53

     870       936,399  
    

 

 

 
               12,578,484  
Pennsylvania — 2.9%             

Allentown Neighborhood Improvement Zone Development Authority, Refunding RB, Series A, 5.00%, 5/01/42

     2,500       2,625,300  

City of Philadelphia Pennsylvania Hospitals & Higher Education Facilities Authority, RB, Temple University Health System, Series A, 5.63%, 7/01/42

     685       737,218  

Pennsylvania Economic Development Financing Authority, RB:

    

Aqua Pennsylvania, Inc. Project, Series B, 5.00%, 11/15/40

     2,065       2,230,221  

Pennsylvania Bridge Finco LP, AMT, 5.00%, 6/30/42

     3,030       3,363,512  

Pennsylvania Turnpike Commission, RB, Series A, 5.00%, 12/01/44

     1,190       1,327,623  
    

 

 

 
               10,283,874  
Puerto Rico — 1.1%             

Children’s Trust Fund, Refunding RB, Tobacco Settlement Asset-Backed Bonds:

    

5.50%, 5/15/39

     2,000       2,009,800  

5.63%, 5/15/43

     1,910       1,911,241  
    

 

 

 
               3,921,041  
Rhode Island — 2.3%             

Tobacco Settlement Financing Corp., Refunding RB:

    

Series A, 5.00%, 6/01/35

     1,690       1,845,835  
 

 

 

                
6    BLACKROCK MUNICIPAL INCOME TRUST II    MAY 31, 2017   


Schedule of Investments (continued)

  

BlackRock Municipal Income Trust II (BLE)

 

Municipal Bonds    Par
(000)
    Value  
Rhode Island (continued)             

Tobacco Settlement Financing Corp., Refunding RB (continued):

    

Series B, 4.50%, 6/01/45

   $ 2,850     $ 2,884,399  

Series B, 5.00%, 6/01/50

     3,175       3,276,378  
    

 

 

 
               8,006,612  
South Carolina — 3.7%             

State of South Carolina Ports Authority, RB:

    

5.25%, 7/01/40

     3,595       3,929,083  

AMT, 5.25%, 7/01/55

     1,390       1,545,958  

State of South Carolina Public Service Authority, RB, Santee Cooper, Series A, 5.50%, 12/01/54

     3,575       3,996,063  

State of South Carolina Public Service Authority, Refunding RB, Series E, 5.25%, 12/01/55

     3,385       3,773,666  
    

 

 

 
               13,244,770  
Tennessee — 0.7%             

Chattanooga Health Educational & Housing Facility Board, RB, Catholic Health Initiatives, Series A, 5.25%, 1/01/45

     1,470       1,560,331  

Metropolitan Government of Nashville & Davidson County Health & Educational Facilities Board, RB, Health & Educational Facilities Board, Vanderbilt University Medical Center, Series A, 5.00%, 7/01/40

     740       836,163  
    

 

 

 
               2,396,494  
Texas — 11.4%             

Central Texas Regional Mobility Authority, Refunding RB:

    

Senior Lien, 6.25%, 1/01/21 (b)

     2,350       2,767,713  

Sub-Lien, 5.00%, 1/01/33

     390       426,457  

City of Austin Texas Airport System, ARB, Revenue, AMT, 5.00%, 11/15/39

     665       743,829  

City of Dallas Texas Waterworks & Sewer System Revenue, Refunding RB, 5.00%, 10/01/20 (b)

     765       862,239  

City of Houston Texas Airport System, Refunding ARB:

    

Senior Lien, Series A, 5.50%, 7/01/39

     1,675       1,752,737  
Municipal Bonds    Par
(000)
    Value  
Texas (continued)             

City of Houston Texas Airport System, Refunding ARB (continued): United Airlines, Inc. Terminal E Project, AMT, 5.00%, 7/01/29

   $ 460     $ 494,132  

City of Houston Texas Combined Utility System Revenue, Refunding RB, Combined 1st Lien, Series A (AGC):

    

6.00%, 5/15/19 (b)

     8,665       9,510,011  

6.00%, 11/15/35

     480       526,210  

County of Harris Texas Cultural Education Facilities Finance Corp., RB, 1st Mortgage, Brazos Presbyterian Homes, Inc. Project, Series B, 7.00%, 1/01/23 (b)

     485       624,345  

County of Harris Texas Houston Sports Authority, Refunding RB, 3rd Lien, Series A (NATL) (c):

    

0.00%, 11/15/24 (b)

     2,300       986,884  

0.00%, 11/15/36

     23,075       8,588,515  

County of Midland Texas Fresh Water Supply District No. 1, RB, CAB, City of Midland Projects, Series A, 0.00%, 9/15/37 (c)

     6,055       2,593,659  

County of Tarrant Texas Cultural Education Facilities Finance Corp., RB, Scott & White Healthcare, 6.00%, 8/15/20 (b)

     4,085       4,717,521  

Texas Private Activity Bond Surface Transportation Corp., RB, Senior Lien:

    

LBJ Infrastructure Group LLC, 7.00%, 6/30/40

     3,000       3,405,210  

NTE Mobility Partners LLC, North Tarrant Express Managed Lanes Project, 6.88%, 12/31/39

     2,250       2,534,558  
    

 

 

 
               40,534,020  
Utah — 0.4%             

Salt Lake City Corp. Airport Revenue, ARB, Series A, AMT, 5.00%, 7/01/47

     995       1,143,663  
 

 

 

                
   BLACKROCK MUNICIPAL INCOME TRUST II    MAY 31, 2017    7


Schedule of Investments (continued)

  

BlackRock Municipal Income Trust II (BLE)

 

Municipal Bonds   

Par

(000)

    Value  
Utah (continued)             

Utah State Charter School Finance Authority, RB, Ogden Preparatory Academy, Series A, 3.25%, 10/15/42

   $ 435     $ 402,249  
    

 

 

 
               1,545,912  
Virginia — 1.2%             

Virginia Small Business Financing Authority, RB, Senior Lien, Elizabeth River Crossings OpCo LLC Project, AMT:

    

5.25%, 1/01/32

     1,755       1,907,474  

6.00%, 1/01/37

     2,120       2,393,735  
    

 

 

 
               4,301,209  
Washington — 4.2%             

Central Puget Sound Regional Transit Authority, RB, Series A (AGM), 5.00%, 11/01/17 (b)

     3,040       3,092,774  

City of Bellingham Washington Water & Sewer, RB, 5.00%, 8/01/36

     5,050       5,656,404  

Grant County Public Utility District No. 2, Refunding RB, Series A, 5.00%, 1/01/43

     2,335       2,661,386  

Port of Seattle Washington, RB, Series C, AMT, 5.00%, 4/01/40

     815       909,051  

Washington Health Care Facilities Authority, RB, Catholic Health Initiatives, Series A, 5.75%, 1/01/45

     2,445       2,687,911  
    

 

 

 
               15,007,526  
Wisconsin — 0.8%             

State of Wisconsin Health & Educational Facilities Authority, RB, Ascension Health Senior Credit Group, Series E, 5.00%, 11/15/33

     910       987,678  

Wisconsin Health & Educational Facilities Authority, Refunding RB, Medical College of Wisconsin, Inc., 4.00%, 12/01/46

     1,955       2,016,934  
    

 

 

 
               3,004,612  
Wyoming — 1.5%             

County of Sweetwater Wyoming, Refunding RB, Idaho Power Co. Project, Remarketing, 5.25%, 7/15/26

     3,355       3,648,059  
Municipal Bonds    Par
(000)
    Value  
Wyoming (continued)             

Wyoming Municipal Power Agency, Inc., RB, Series A (b):

    

5.50%, 1/01/18

   $ 800     $ 821,592  

5.50%, 1/01/18

     750       770,243  
    

 

 

 
               5,239,894  
Total Municipal Bonds — 125.9%              448,219,275  
    
                  

Municipal Bonds Transferred to

Tender Option Bond Trusts (h)

              
Alabama — 0.5%             

Auburn University, Refunding RB, Series A, 4.00%, 6/01/41

     1,820       1,919,955  
California — 6.4%             

California Educational Facilities Authority, RB, University of Southern California, Series B, 5.25%, 10/01/18 (b)(i)

     2,850       3,018,207  

City & County of San Francisco California Public Utilities Commission, RB, Water Revenue, Series B, 5.00%, 11/01/19 (b)

     10,335       11,336,048  

Los Angeles Community College District California, GO, Election of 2001, Series A (AGM), 5.00%, 8/01/17 (b)

     2,530       2,548,090  

Sacramento Area Flood Control Agency, Refunding, Consolidated Capital Assessment District No.2, Series A, 5.00%, 10/01/47

     3,345       3,896,696  

San Diego Community College District California, GO, Election of 2002, 5.25%, 8/01/19 (b)

     1,840       2,010,222  
    

 

 

 
               22,809,263  
Colorado — 2.0%             

Colorado Health Facilities Authority, RB, Catholic Health (AGM) (b):

    

Series C-3, 5.10%, 4/29/18

     4,230       4,393,574  

Series C-7, 5.00%, 5/01/18

     2,710       2,812,980  
    

 

 

 
               7,206,554  
Georgia — 1.4%             

Private Colleges & Universities Authority, Refunding RB, Emory University, Series C, 5.00%, 9/01/18 (b)

     4,638       4,877,315  

 

 

 

 

                
8    BLACKROCK MUNICIPAL INCOME TRUST II    MAY 31, 2017   


Schedule of Investments (continued)

  

BlackRock Municipal Income Trust II (BLE)

 

Municipal Bonds Transferred to

Tender Option Bond Trusts (h)

   Par
(000)
     Value  
Massachusetts — 0.8%              

Massachusetts School Building Authority, RB, Senior, Series B, 5.00%, 10/15/41

   $ 2,461      $ 2,782,591  
New Hampshire — 0.7%              

New Hampshire Health & Education Facilities Authority, RB, Dartmouth College, 5.25%, 6/01/19 (b)(i)

     2,219        2,409,843  
New York — 12.6%              

City of New York New York Municipal Water Finance Authority, Refunding RB, Water & Sewer System, 2nd General Resolution:

     

Series FF-2, 5.50%, 6/15/40

     1,710        1,859,180  

Series HH, 5.00%, 6/15/31 (i)

     9,150        10,354,049  

Hudson Yards Infrastructure Corp., RB, Fiscal 2012, Series A, 5.75%, 2/15/47 (i)

     1,750        1,993,700  

Metropolitan Transportation Authority, Refunding RB, Series C-1, 5.25%, 11/15/56

     5,120        5,955,829  

New York Liberty Development Corp., RB, 1 World Trade Center Port Authority Consolidated Bonds, 5.25%, 12/15/43

     11,670        13,285,540  

New York Liberty Development Corp., Refunding RB, 4 World Trade Center Project, 5.75%, 11/15/51 (i)

     7,040        8,085,859  

Port Authority of New York & New Jersey, Refunding ARB, 194th Series, 5.25%, 10/15/55

     2,790        3,249,122  
     

 

 

 
                44,783,279  
North Carolina — 0.9%              

North Carolina Capital Facilities Finance Agency, Refunding RB, Duke University Project, Series B, 5.00%, 10/01/55

     2,740        3,139,136  
Pennsylvania — 0.8%              

Pennsylvania Turnpike Commission, RB, Sub-Series A, 5.50%, 12/01/42

     2,521        2,965,904  
Texas — 3.1%              

City of San Antonio Texas Public Service Board, RB, Electric & Gas Systems, Junior Lien, 5.00%, 2/01/43

     2,660        3,016,759  
Municipal Bonds Transferred to Tender
Option Bond Trusts (h)
   Par
(000)
     Value  
Texas (continued)              

County of Harris Texas Metropolitan Transit Authority, Refunding RB, Series A, 5.00%, 11/01/41

   $ 3,720      $ 4,178,527  

University of Texas, Refunding RB, Financing System, Series B, 5.00%, 8/15/43

     3,347        3,803,197  
     

 

 

 
                10,998,483  
Utah — 1.2%              

City of Riverton Utah, RB, IHC Health Services, Inc., 5.00%, 8/15/41

     3,959        4,227,111  
Virginia — 1.7%              

University of Virginia, Refunding RB, GO, 5.00%, 6/01/18 (b)

     5,909        6,153,756  
Washington — 2.4%              

State of Washington, GO, Various Purposes, Series E, 5.00%, 2/01/19 (b)

     8,113        8,666,928  

Total Municipal Bonds Transferred to

Tender Option Bond Trusts — 34.5%

 

 

     122,940,118  

Total Long-Term Investments

(Cost — $532,445,567) — 160.4%

 

 

     571,159,393  
     
                   
Short-Term Securities    Shares          

BlackRock Liquidity Funds, MuniCash, Institutional Class, 0.60% (j)(k)

     2,380,048        2,380,524  

Total Short-Term Securities

(Cost — $2,380,272) — 0.7%

 

 

     2,380,524  

Total Investments (Cost — $534,825,839*) — 161.1%

 

     573,539,917  

Other Assets Less Liabilities — 1.1%

 

     3,968,337  

Liability for TOB Trust Certificates, Including Interest Expense and Fees Payable — (19.7)%

 

     (70,180,010

VMTP Shares, at Liquidation Value — (42.5)%

 

     (151,300,000
     

 

 

 

Net Assets Applicable to Common Shares — 100.0%

 

   $ 356,028,244  
     

 

 

 

 

*   As of May 31, 2017, gross unrealized appreciation and depreciation based on cost for U.S. federal income tax purposes were as follows:

 

Tax cost

  $ 465,624,164  
 

 

 

 

Gross unrealized appreciation

  $ 41,167,998  

Gross unrealized depreciation

  $ (3,273,381
 

 

 

 

Net unrealized appreciation

  $ 37,894,617  
 

 

 

 
 

 

 

                
   BLACKROCK MUNICIPAL INCOME TRUST II    MAY 31, 2017    9


Schedule of Investments (continued)

  

BlackRock Municipal Income Trust II (BLE)

 

 

Notes to Schedule of Investments

 

(a)   Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration to qualified institutional investors.

 

(b)   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.

 

(c)   Zero-coupon bond.

 

(d)   Issuer filed for bankruptcy and/or is in default.

 

(e)   Non-income producing security.

 

(f)   Step-up bond that pays an initial coupon rate for the first period and then a higher coupon rate for the following periods. Rate as of period end.

 

(g)   When-issued security.

 

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

 

(i)   All or a portion of security is subject to a recourse agreement. The aggregate maximum potential amount the Trust could ultimately be required to pay under the agreements, which expire between June 01, 2017 to November 15, 2019, is $14,496,613.

 

(j)   During the period ended May 31, 2017, investments in issuers considered to be affiliates of the Trust for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:

 

Affiliate   Shares Held
at August 31,
2016
       Net
Activity
       Shares Held
at May 31,
2017
       Value at
May 31,
2017
       Income       

Net

Realized
Gain1

   

Change in
Unrealized
Appreciation
(Depreciation)

 

BlackRock Liquidity Funds, MuniCash, Institutional Class

    3,509,584          (1,129,536        2,380,048        $ 2,380,524        $ 12,154        $ 954                $ 252  

 

1  

Includes net capital gain distributions.

 

(k)   Current yield as of period end.

 

Derivative Financial Instruments Outstanding as of Period End

 

Futures Contracts  
Contracts
Short
  Issue   Expiration   Notional
Value
    Unrealized
Depreciation
 
(83)   5-Year U.S. Treasury Note   September 2017   $ 9,819,937       $ (14,501
(97)   10-Year U.S. Treasury Note   September 2017   $ 12,250,797         (36,867
(90)   Long U.S. Treasury Bond   September 2017   $ 13,843,125         (112,625
(30)   Ultra U.S. Treasury Bond   September 2017   $ 4,953,750               (59,497

Total

      $ (223,490
         

 

 

 

 

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
CAB    Capital Appreciation Bonds
EDA    Economic Development Authority
EDC    Economic Development Corp.

 

 

                
10    BLACKROCK MUNICIPAL INCOME TRUST II    MAY 31, 2017   


Schedule of Investments (continued)

  

BlackRock Municipal Income Trust II (BLE)

 

 

GARB    General Airport Revenue Bonds
GO    General Obligation Bonds
IDA    Industrial Development Authority
LRB    Lease Revenue Bonds
RB    Revenue Bonds
S/F    Single-Family

 

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 and derivative financial instruments 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 semi-annual report.

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:

       
Investments:        

Long-Term Investments 1

        $ 571,159,393           $ 571,159,393  

Short-Term Securities

  $ 2,380,524                   2,380,524  
 

 

 

 

Total

  $ 2,380,524     $ 571,159,393           $ 573,539,917  
 

 

 

 
Derivative Financial Instruments 2        

Liabilities:

       

Interest rate contracts

  $ (223,490               $ (223,490

1    See above schedule of investments for values in each state or political subdivision.

     

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

    

 

 

                
   BLACKROCK MUNICIPAL INCOME TRUST II    MAY 31, 2017    11


Schedule of Investments (concluded)

  

BlackRock Municipal Income Trust II (BLE)

 

The Trust 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

         $ (70,021,136           $ (70,021,136

VMTP Shares at Liquidation Value

           (151,300,000             (151,300,000
 

 

 

 

Total

         $ (221,321,136           $ (221,321,136
 

 

 

 

During the period ended May 31, 2017, there were no transfers between levels.

 

 

                
12    BLACKROCK MUNICIPAL INCOME TRUST II    MAY 31, 2017   


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 Municipal Income Trust II

 

By:  

/s/ John M. Perlowski                 

  
  John M. Perlowski
  Chief Executive Officer (principal executive officer) of
  BlackRock Municipal Income Trust II

Date: July 24, 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 Municipal Income Trust II
Date: July 24, 2017
By:  

/s/ Neal J. Andrews

  
  Neal J. Andrews
  Chief Financial Officer (principal financial officer) of
  BlackRock Municipal Income Trust II

Date: July 24, 2017