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: 08/31/2018

Date of reporting period: 05/31/2018

Item 1 – Schedule of Investments

 

Schedule of Investments  (unaudited)

May 31, 2018

   

BlackRock Municipal Income Trust II (BLE)

(Percentages shown are based on Net Assets)

 

Security   Par
(000)		     Value  

Municipal Bonds — 126.7%

 

Alabama — 2.1%  

County of Jefferson Alabama Sewer, Refunding RB:

    

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

   $ 540     $ 593,541  

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

     1,320       1,464,817  

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

     3,220       3,905,699  

Lower Alabama Gas District, RB, Series A, 5.00%, 09/01/46

     1,170       1,437,404  
   

 

 

  
      7,401,461  
Arizona — 2.8%  

City of Phoenix Arizona IDA, RB, Legacy Traditional Schools Projects, Series A,
5.00%, 07/01/46(a)

     1,825       1,881,155  

Salt Verde Financial Corp., RB, Senior:

    

5.00%, 12/01/32

     5,635       6,652,794  

5.00%, 12/01/37

     1,000       1,194,890  
   

 

 

  
      9,728,839  
California — 12.3%  

Bay Area Toll Authority, Refunding RB, San Francisco Bay Area Toll Bridge, Series F-1, 5.63%, 04/01/19(b)

     2,480       2,565,585  

California Health Facilities Financing Authority, RB, Sutter Health, Series B, 6.00%, 08/15/20(b)

     3,500       3,827,110  

California Health Facilities Financing Authority, Refunding RB, St. Joseph Health System, Series A, 5.00%, 07/01/33

     1,365       1,536,376  

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

    

5.25%, 08/15/39

     160       175,843  

5.25%, 08/15/49

     395       431,352  

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

    

5.00%, 02/01/36

     345       384,444  

5.00%, 02/01/37

     260       289,107  

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

     4,370       4,656,148  

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

     490       522,889  
Security   Par
(000)		     Value  
California (continued)  

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

    

Senior, 5.00%, 05/15/40

   $ 6,500     $ 6,896,175  

5.25%, 05/15/39

     860       887,984  

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

     380       450,619  

Golden State Tobacco Securitization Corp., Refunding RB, Asset-Backed, Senior Series A-1, 5.75%, 06/01/47

     1,790       1,798,932  

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

    

0.00%, 08/01/33

     3,000       1,762,440  

0.00%, 08/01/43

     2,500       946,075  

State of California, GO, Various Purposes:

    

6.50%, 04/01/19(b)

     5,765       6,002,749  

6.00%, 03/01/33

     1,760       1,889,272  

6.50%, 04/01/33

     4,880       5,073,394  

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

    

Series I, 5.00%, 11/01/38

     825       924,280  

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

     1,280       1,366,426  
   

 

 

  
      42,387,200  
Colorado — 0.7%  

Colorado Health Facilities Authority, Refunding RB, Catholic Health Initiative, Series A,
5.50%, 07/01/34

     2,330       2,404,141  
   

 

 

  
Connecticut — 0.3%  

Connecticut State Health & Educational Facility Authority, RB, Ascension Health Senior Credit, Series A, 5.00%, 11/15/40

     1,005       1,046,758  
   

 

 

  
Delaware — 2.1%  

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

     1,240       1,310,370  

Delaware Transportation Authority, RB, U.S. 301 Project, 5.00%, 06/01/55

     1,260       1,394,417  

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

     4,275       4,438,176  
   

 

 

  
      7,142,963  
District of Columbia — 4.9%  

District of Columbia, Refunding RB:

    

Georgetown University, 5.00%, 04/01/35

     465       531,965  
 

 

 

     1  

Schedule of Investments  (unaudited) (continued)

May 31, 2018

   

BlackRock Municipal Income Trust II (BLE)

(Percentages shown are based on Net Assets)

 

Security   Par
(000)		     Value  
District of Columbia (continued)  

Georgetown University Issue, 5.00%, 04/01/42

   $ 540     $ 612,862  

Kipp Charter School, Series A,
6.00%, 07/01/23(b)

     820       971,003  

District of Columbia Tobacco Settlement Financing Corp., Refunding RB, Asset-Backed,
6.75%, 05/15/40

     11,500       12,054,070  

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

    

5.00%, 10/01/39

     550       568,958  

5.25%, 10/01/44

     2,000       2,074,620  
   

 

 

  
      16,813,478  
Florida — 5.4%  

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

     1,445       1,600,583  

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

     1,665       1,785,147  

County of Broward Florida Airport System Revenue, ARB, AMT, 5.00%, 10/01/47

     315       355,241  

County of Collier Florida Health Facilities Authority, Refunding RB, Series A,
5.00%, 05/01/45

     1,450       1,590,795  

County of Miami-Dade Florida Aviation, Refunding ARB, Miami International Airport:

    

Series A (AGC), AMT, 5.25%, 10/01/18(b)

     1,385       1,400,595  

Series A (AGC), AMT, 5.25%, 10/01/38

     240       242,465  

Series A-1, 5.38%, 10/01/41

     1,255       1,345,084  

County of Miami-Dade Florida Water & Sewer System, (AGC), 5.00%, 10/01/20(b)

     5,000       5,355,500  

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

     3,300       3,833,676  

Stevens Plantation Community Development District, RB, Special Assessment, Series A,
7.10%, 05/01/35(d)(e)

     1,795       1,256,500  
   

 

 

  
      18,765,586  
Security   Par
(000)		     Value  
Georgia — 0.9%  

County of Dalton Whitfield Joint Development Authority, RB, Hamilton Health Care System Obligation, 4.00%, 08/15/48

   $ 1,325     $ 1,364,724  

County of Gainesville Georgia & Hall Hospital Authority, Refunding RB, Northeast Georgia Health System, Inc. Project, Series A, 5.50%, 08/15/54

     555       641,874  

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

     915       954,528  
   

 

 

  
      2,961,126  
Hawaii — 0.5%  

State of Hawaii Harbor System, RB,
Series A, 5.25%, 07/01/30

     1,480       1,572,589  
   

 

 

  
Idaho — 0.3%  

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

     805       910,721  
   

 

 

  
Illinois — 18.6%  

Chicago Board of Education, GO, Dedicated Revenues, Series H, 5.00%, 12/01/36

     495       508,553  

Chicago Board of Education, GO, Refunding, Dedicated Revenues, Series G, 5.00%, 12/01/34

     495       507,410  

Chicago Board of Education, GO, Refunding Dedicated Revenues:

    

Series D, 5.00%, 12/01/27

     920       957,380  

Series F, 5.00%, 12/01/22

     675       701,933  

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

     2,705       2,750,011  

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

     4,940       5,200,289  

City of Chicago Illinois O’Hare International Airport, GARB, 3rd Lien:

    

Series A, 5.75%, 01/01/21(b)

     4,200       4,592,196  

Series A, 5.75%, 01/01/39

     800       867,768  

Series C, 6.50%, 01/01/21(b)

     6,430       7,142,251  

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

     1,150       1,230,442  
 

 

 

2   

Schedule of Investments  (unaudited) (continued)

May 31, 2018

   

BlackRock Municipal Income Trust II (BLE)

(Percentages shown are based on Net Assets)

 

Security   Par
(000)		     Value  
Illinois (continued)  

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

   $ 845     $ 892,438  

Illinois Finance Authority, Refunding RB:

    

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

     1,060       1,147,355  

Central Dupage Health, Series B,
5.50%, 11/01/19(b)

     1,750       1,838,357  

Illinois Sports Facilities Authority, RB, State Tax Supported (AMBAC), 5.50%, 06/15/30(f)

     7,445       7,458,327  

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

    

Series B (AGM), 5.00%, 06/15/50

     6,725       7,009,602  

Series B-2, 5.00%, 06/15/50

     2,725       2,774,404  

Railsplitter Tobacco Settlement Authority, RB(b):

    

5.50%, 06/01/21

     520       572,437  

6.00%, 06/01/21

     1,255       1,399,689  

State of Illinois, GO:

    

5.00%, 02/01/39

     1,640       1,687,068  

Series A, 5.00%, 04/01/35

     2,500       2,570,975  

Series A, 5.00%, 04/01/38

     3,885       3,985,116  

State of Illinois, RB, Build Illinois, Series B,
5.25%, 06/15/19(b)

     685       709,516  

State of Illinois Toll Highway Authority, RB, Series C:

    

Senior, 5.00%, 01/01/36

     2,815       3,132,645  

5.00%, 01/01/37

     3,005       3,332,755  

University of Illinois, RB, Auxiliary Facilities System, Series A, 5.00%, 04/01/44

     1,050       1,138,053  
   

 

 

  
      64,106,970  
Indiana — 4.8%  

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

    

6.75%, 01/01/34

     845       991,379  

7.00%, 01/01/44

     3,535       4,172,290  

Indiana Finance Authority, RB, Series A:

    

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

     3,510       3,835,974  

Private Activity Bond, Ohio River Bridges East End Crossing Project, AMT, 5.00%, 07/01/44

     485       518,082  

Private Activity Bond, Ohio River Bridges East End Crossing Project, AMT, 5.00%, 07/01/48

     1,610       1,715,197  

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

     435       467,799  
Security   Par
(000)		     Value  
Indiana (continued)  

Sisters of St. Francis Health Services,
5.25%, 11/01/19(b)

   $ 915     $ 958,691  

Indiana Finance Authority, Refunding RB, Marquette Project, 4.75%, 03/01/32

     1,180       1,210,409  

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

     1,200       1,230,156  

Indianapolis Local Public Improvement Bond Bank, RB, Series A, 5.00%, 01/15/40

     1,380       1,528,157  
   

 

 

  
      16,628,134  
Iowa — 1.9%  

Iowa Finance Authority, Refunding RB, Iowa Fertilizer Co. Project:

    

Series B, 5.25%, 12/01/50(g)

     3,060       3,250,302  

Midwestern Disaster Area, 5.50%, 12/01/22

     10       10,121  

Midwestern Disaster Area, 5.25%, 12/01/25

     500       534,860  

Midwestern Disaster Area, 5.88%, 12/01/26(a)

     445       467,619  

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

     780       811,075  

Iowa Tobacco Settlement Authority, Refunding RB, Asset-Backed, Series C, 5.63%, 06/01/46

     1,610       1,617,905  
   

 

 

  
      6,691,882  
Kentucky — 0.7%  

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

     1,060       1,134,984  

Kentucky Public Transportation Infrastructure Authority, RB, Downtown Crossing Project, Convertible CAB, 1st Tier, Series C,
6.75%, 07/01/43(f)

     1,280       1,199,616  
   

 

 

  
      2,334,600  
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       4,016,095  
 

 

 

     3  

Schedule of Investments  (unaudited) (continued)

May 31, 2018

   

BlackRock Municipal Income Trust II (BLE)

(Percentages shown are based on Net Assets)

 

Security   Par
(000)		     Value  
Louisiana (continued)  

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

    

5.50%, 05/15/30

   $ 1,100     $ 1,172,281  

5.25%, 05/15/31

     935       1,006,500  

5.25%, 05/15/32

     1,195       1,301,797  

5.25%, 05/15/33

     1,300       1,405,586  

5.25%, 05/15/35

     795       860,794  
   

 

 

  
      9,763,053  
Maryland — 1.3%        

Maryland EDC, RB, Transportation Facilities Project, Series A, 5.75%, 06/01/20(b)

     475       511,447  

Maryland EDC, Refunding RB, CNX Marine Terminals, Inc., 5.75%, 09/01/25

     800       834,920  

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

     455       520,083  

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

     2,400       2,647,704  
   

 

 

  
      4,514,154  
Massachusetts — 0.7%        

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

     1,530       1,531,010  

Massachusetts Health & Educational Facilities Authority, Refunding RB, Partners Healthcare System, Series J1, 5.00%, 07/01/19(b)

     955       988,415  
   

 

 

  
      2,519,425  
Michigan — 2.5%        

City of Detroit Michigan Sewage Disposal System, Refunding RB, Senior Lien, Series A, 5.25%, 07/01/39

     4,825       5,184,704  

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

    

5.50%, 05/15/20(b)

     830       885,859  

5.50%, 05/15/36

     670       707,172  
Security   Par
(000)		     Value  
Michigan (continued)        

Michigan Finance Authority, Refunding RB:

    

Detroit Water & Sewage Department Project, Senior Lien, Series C-1, 5.00%, 07/01/44

   $ 940     $ 1,023,256  

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

     865       876,132  
   

 

 

  
      8,677,123  
Missouri — 2.3%        

370/Missouri Bottom Road/Taussig Road Transportation Development District, RB, 7.20%, 05/01/33(d)(e)

     6,000       3,120,000  

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

     275       303,484  

State of Missouri Health & Educational Facilities Authority, RB, Senior Living Facilities, Lutheran Senior Services, 5.50%, 02/01/42

     1,135       1,178,459  

State of Missouri Health & Educational Facilities Authority, Refunding RB:

    

Mercy Health, Series C, 5.00%, 11/15/47

     2,825       3,189,990  

St. Louis College of Pharmacy Project, 5.50%, 05/01/43

     265       285,975  
   

 

 

  
      8,077,908  
Multi-State — 2.0%        

Centerline Equity Issuer Trust(a):

    

Series A-4-2, 6.00%, 05/15/19

     3,500       3,633,630  

Series B-3-2, 6.30%, 05/15/19

     3,000       3,122,610  
   

 

 

  
      6,756,240  
Nebraska — 1.7%        

Central Plains Nebraska Energy Project, RB, Gas Project No. 3:

    

5.25%, 09/01/37

     895       987,740  

5.00%, 09/01/42

     1,570       1,717,030  

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

     1,245       1,309,043  
 

 

 

4   

Schedule of Investments  (unaudited) (continued)

May 31, 2018

   

BlackRock Municipal Income Trust II (BLE)

(Percentages shown are based on Net Assets)

 

Security   Par
(000)		     Value  
Nebraska (continued)        

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

   $ 1,635     $ 1,701,021  
   

 

 

  
      5,714,834  
New Jersey — 9.6%  

Casino Reinvestment Development Authority, Refunding RB:

    

5.25%, 11/01/39

     1,805       1,933,462  

5.25%, 11/01/44

     1,640       1,753,865  

County of Essex New Jersey Improvement Authority, RB, AMT, 5.25%, 07/01/45(a)

     1,165       1,178,630  

New Jersey EDA, ARB, Continental Airlines, Inc. Project, AMT, 5.13%, 09/15/23

     2,130       2,312,285  

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

    

4.88%, 09/15/19

     460       469,839  

5.25%, 09/15/29

     2,130       2,321,040  

New Jersey EDA, Refunding ARB, Port Network Container Terminal LLC Project, AMT, 5.00%, 10/01/47

     1,570       1,701,283  

New Jersey EDA, Refunding RB, Special Assessment, Kapkowski Road Landfill Project, 6.50%, 04/01/28

     7,475       8,758,084  

New Jersey State Turnpike Authority, RB:

    

Series A, 5.00%, 07/01/22(b)

     1,355       1,514,429  

Series A, 5.00%, 01/01/43

     805       875,977  

Series E, 5.00%, 01/01/45

     2,810       3,127,080  

New Jersey Transportation Trust Fund Authority, RB:

    

Transportation Program, Series AA, 5.00%, 06/15/44

     730       766,369  

Transportation Program, Series AA, 5.00%, 06/15/44

     1,355       1,416,802  

Transportation System, Series B, 5.25%, 06/15/36

     2,690       2,808,468  

Rutgers - The State University of New Jersey, Refunding RB, Series L, 5.00%, 05/01/43

     570       632,922  

Tobacco Settlement Financing Corp., Refunding RB:

    

Series A, 5.25%, 06/01/46

     580       651,943  

Sub-Series B, 5.00%, 06/01/46

     815       874,634  
   

 

 

  
      33,097,112  
Security   Par
(000)		     Value  
New York — 8.2%  

City of New York New York Transitional Finance Authority Future Tax Secured, RB, Fiscal 2012, Sub-Series E-1, 5.00%, 02/01/42

   $ 2,680     $ 2,911,766  

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

     805       862,982  

Hudson Yards Infrastructure Corp., Refunding RB, Series A, 5.00%, 02/15/39

     1,005       1,153,680  

Metropolitan Transportation Authority, RB, Series B:

    

5.25%, 11/15/38

     2,555       2,892,720  

5.25%, 11/15/39

     910       1,029,219  

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

     1,135       1,222,838  

New York Counties Tobacco Trust IV, Refunding RB, Settlement Pass-Through Turbo, Series A, 6.25%, 06/01/41(a)

     2,000       2,084,940  

New York Liberty Development Corp., Refunding RB:

    

2nd Priority, Bank of America Tower at One Bryant Park Project, Class 3, 6.38%, 07/15/49

     1,335       1,410,614  

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

     4,320       4,585,982  

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

     365       400,365  

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

     910       1,000,536  

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

    

5.00%, 08/01/26

     675       713,691  

5.00%, 08/01/31

     1,620       1,708,371  

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

     1,145       1,145,756  

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

    

6.00%, 12/01/42

     1,635       1,791,927  
 

 

 

     5  

Schedule of Investments  (unaudited) (continued)

May 31, 2018

   

BlackRock Municipal Income Trust II (BLE)

(Percentages shown are based on Net Assets)

 

Security   Par
(000)		     Value  
New York (continued)  

Special Project, 6.00%, 12/01/36

   $ 1,410     $ 1,546,051  

Port Authority of New York & New Jersey, Refunding RB, Consolidated, 205th
Series, 5.00%, 11/15/47

     1,570       1,816,835  
   

 

 

  
      28,278,273  
North Carolina — 1.5%  

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       1,043,860  

North Carolina Medical Care Commission, RB, Health Care Facilities, Duke University Health System, Series A, 5.00%, 06/01/19(b)

     1,525       1,574,578  

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

    

Aldersgate, 6.25%, 07/01/35

     1,530       1,716,476  

Retirement Facilities Whitestone Project, Series A, 7.75%, 03/01/21(b)

     625       717,488  
   

 

 

  
      5,052,402  
Ohio — 3.6%  

Buckeye Tobacco Settlement Financing Authority, RB, Asset-Backed, Senior Turbo Term,
Series A-2, 6.50%, 06/01/47

     3,550       3,592,706  

County of Allen Ohio Hospital Facilities Revenue, Refunding RB, Catholic Healthcare Partners, Series A, 5.25%, 06/01/20(b)

     3,405       3,626,223  

County of Franklin Ohio, RB:

    

Health Care Facilities Improvement, OPRS Communities Obligation Group, Series A, 6.13%, 07/01/40

     710       776,236  

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

     435       492,128  

County of Montgomery Ohio, Refunding RB, Catholic Health:

    

5.00%, 05/01/19(b)

     1,055       1,085,553  

Series A, 5.00%, 05/01/39

     1,970       2,007,489  

State of Ohio, RB, Portsmouth Bypass Project, AMT, 5.00%, 06/30/53

     870       952,250  
   

 

 

  
      12,532,585  
Security   Par
(000)		     Value  
Oklahoma — 1.1%  

Oklahoma Development Finance Authority, RB, OU Medicine Project, Series B, 5.25%, 08/15/48

   $ 1,275     $ 1,432,309  

Oklahoma Turnpike Authority, RB, 2nd Series C, 4.00%, 01/01/42

     2,120       2,215,485  
   

 

 

  
      3,647,794  
Pennsylvania — 3.8%  

Allentown Neighborhood Improvement Zone Development Authority, Refunding RB, Series A, 5.00%, 05/01/42

     2,500       2,601,475  

City of Philadelphia Pennsylvania Airport Revenue, Refunding ARB, AMT, Series B, 5.00%, 07/01/47

     490       549,138  

City of Philadelphia Pennsylvania Hospitals & Higher Education Facilities Authority, RB, Temple University Health System, Series A, 5.63%, 07/01/42

     685       745,239  

Commonwealth Financing Authority, RB, Tobacco Master Settlement Payment:

    

5.00%, 06/01/33

     115       130,269  

5.00%, 06/01/34

     150       169,915  

County of Montgomery Higher Education & Health Authority, Refunding RB, Thomas Jefferson University, Series A:

    

4.00%, 09/01/49

     615       621,679  

5.00%, 09/01/43

     1,350       1,525,446  

Pennsylvania Economic Development Financing Authority, RB:

    

AMT, 5.00%, 06/30/42

     3,030       3,311,487  

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

     2,065       2,146,588  

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

     1,190       1,313,927  
   

 

 

  
      13,115,163  
Puerto Rico — 1.1%  

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

    

5.50%, 05/15/39

     2,000       1,987,640  
 

 

 

6   

Schedule of Investments  (unaudited) (continued)

May 31, 2018

   

BlackRock Municipal Income Trust II (BLE)

(Percentages shown are based on Net Assets)

 

Security   Par
(000)		     Value  
Puerto Rico (continued)  

5.63%, 05/15/43

   $ 1,910     $ 1,896,000  
   

 

 

  
      3,883,640  
Rhode Island — 2.3%  

Tobacco Settlement Financing Corp., Refunding RB:

    

Series A, 5.00%, 06/01/35

     1,690       1,829,661  

Series B, 4.50%, 06/01/45

     2,850       2,903,067  

Series B, 5.00%, 06/01/50

     3,175       3,278,918  
   

 

 

  
      8,011,646  
South Carolina — 3.8%  

State of South Carolina Ports Authority, ARB:

    

5.25%, 07/01/20(b)

     3,595       3,841,113  

AMT, 5.25%, 07/01/55

     1,390       1,556,953  

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

     3,575       3,895,928  

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

     3,385       3,683,963  
   

 

 

  
      12,977,957  
Tennessee — 0.7%  

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

     1,470       1,573,988  

County of Nashville & Davidson Metropolitan Government Health & Educational Facilities Board, RB, Vanderbilt University Medical Center, Series A, 5.00%, 07/01/40

     740       826,299  
   

 

 

  
      2,400,287  
Texas — 12.1%  

Central Texas Regional Mobility Authority, Refunding RB:

    

Senior Lien, 6.25%, 01/01/21(b)

     2,350       2,592,543  

Sub-Lien, 5.00%, 01/01/33

     390       421,719  

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

     665       729,352  

City of Houston Texas Airport System, Refunding ARB:

    

Senior Lien, Series A, 5.50%, 07/01/39

     1,675       1,679,841  

United Airlines, Inc. Terminal E Project, AMT, 5.00%, 07/01/29

     460       499,813  
Security   Par
(000)		     Value  
Texas (continued)  

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

    

6.00%, 05/15/19(b)

   $ 8,665     $ 9,007,701  

6.00%, 11/15/35

     480       499,354  

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

     485       585,550  

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

    

0.00%, 11/15/24(b)

     2,300       966,023  

0.00%, 11/15/36

     23,075       8,896,105  

County of Midland Texas Fresh Water Supply District No. 1, RB, CAB, City of Midland Projects, Series A, 0.00%, 09/15/37(c)

     6,055       2,690,115  

County of Tarrant Texas Cultural Education Facilities Finance Corp., RB, Scott & White Healthcare, 6.00%, 08/15/20(b)

     4,085       4,444,562  

San Antonio Water System, Refunding RB, Junior Lien, Series A, 5.00%, 05/15/48

     2,720       3,156,886  

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

    

LBJ Infrastructure Group LLC, 7.00%, 06/30/40

     3,000       3,276,630  

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

     2,250       2,403,562  
   

 

 

  
      41,849,756  
Utah — 0.4%  

City of Salt Lake Corp. Airport Revenue, ARB, Series A, AMT, 5.00%, 07/01/47

     995       1,121,703  

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

     390       357,849  
   

 

 

  
      1,479,552  
Virginia — 1.7%  

Hampton Roads Transportation Accountability Commission, RB, Transportation Fund, Senior Lien, Series A, 5.50%, 07/01/57

     1,205       1,451,844  

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

    

5.25%, 01/01/32

     1,755       1,910,283  
 

 

 

     7  

Schedule of Investments  (unaudited) (continued)

May 31, 2018

   

BlackRock Municipal Income Trust II (BLE)

(Percentages shown are based on Net Assets)

 

Security   Par
(000)		     Value  
Virginia (continued)  

6.00%, 01/01/37

   $ 2,120     $ 2,363,906  
   

 

 

  
      5,726,033  
Washington — 3.9%  

City of Bellingham Washington Water & Sewer, RB, 5.00%, 08/01/36

     5,050       5,461,322  

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

     2,335       2,627,389  

Port of Seattle Washington, ARB, Intermediate Lien, Series C, AMT, 5.00%, 05/01/42

     1,615       1,832,040  

Port of Seattle Washington, RB, Intermediate Lien, Series C, AMT, 5.00%, 04/01/40

     815       887,649  

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

     2,445       2,685,392  
   

 

 

  
      13,493,792  
Wisconsin — 0.3%  

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

     910       946,482  
   

 

 

  
Wyoming — 1.0%  

County of Sweetwater Wyoming, Refunding RB, Idaho Power Co. Project, Remarketing, 5.25%, 07/15/26

     3,355       3,487,086  
   

 

 

  

Total Municipal Bonds — 126.7%
(Cost — $413,441,849)

 

     436,898,745  
   

 

 

  

Municipal Bonds Transferred to Tender Option Bond Trusts(h)

 

California — 6.7%  

Bay Area Toll Authority, Refunding RB, San Francisco Bay Area Toll Bridge, 4.00%, 04/01/42(i)

     3,358       3,542,842  

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

     2,849       2,884,273  
Security   Par
(000)		     Value  
California (continued)  

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

   $ 10,335     $ 10,826,670  

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

     3,345       3,840,679  

San Diego California Community College District, GO, Election of 2002, 5.25%, 08/01/19(b)

     1,840       1,917,394  
   

 

 

  
      23,011,858  
Georgia — 1.4%  

Private Colleges & Universities Authority,
Refunding RB, Emory University, Series C,
5.00%, 09/01/18(b)

     4,638       4,676,658  
   

 

 

  
Illinois — 0.5%  

Illinois Finance Authority, Refunding RB, Presence Health Network, Series C, 4.00%, 02/15/41

     1,543       1,575,249  
   

 

 

  
Massachusetts — 1.4%  

Commonwealth of Massachusetts Transportation Fund Revenue, RB, Rail Enhancement Program, Series A, 4.00%, 06/01/45

     2,238       2,314,194  

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

     2,461       2,649,087  
   

 

 

  
      4,963,281  
New Hampshire — 0.7%  

New Hampshire Health & Education Facilities Authority, RB, Dartmouth College, 5.25%, 06/01/19(b)(i)

     2,219       2,295,498  
   

 

 

  
New York — 12.5%  

City of New York New York Municipal Water Finance Authority, Refunding RB, Water & Sewer System, 2nd General Resolution, Series FF-2, 5.50%, 06/15/40

     1,710       1,772,529  

City of New York New York Water & Sewer System, Refunding RB, 2nd General Resolution,
Series HH, 5.00%, 06/15/31(i)

     9,150       9,914,421  

Hudson Yards Infrastructure Corp., RB, Fiscal 2012, Series A, 5.75%, 02/15/47(i)

     1,750       1,913,489  
 

 

 

8   

Schedule of Investments  (unaudited) (continued)

May 31, 2018

   

BlackRock Municipal Income Trust II (BLE)

(Percentages shown are based on Net Assets)

 

Security   Par
(000)		     Value  
New York (continued)  

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

   $ 5,120     $ 5,862,478  

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

     11,670       12,778,596  

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

     7,040       7,803,273  

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

     2,790       3,187,705  
   

 

 

  
    43,232,491  
North Carolina — 0.9%  

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

     2,740       3,083,281  
   

 

 

  
Pennsylvania — 0.8%  

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

     2,521       2,910,985  
   

 

 

  
Rhode Island — 0.5%  

Narragansett Bay Commission, Refunding RB, Wastewater System, Series A, 4.00%, 09/01/43

     1,695       1,734,290  
   

 

 

  
Texas — 3.7%  

City of San Antonio Texas Electric and Gas Systems, RB, Junior Lien, 5.00%, 02/01/43

     2,660       2,891,021  

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

     3,720       4,026,844  

Lower Colorado River Authority, Refunding RB, LCRA Transmission Services Corporation Project, 4.00%, 05/15/43

     2,241       2,273,528  
Security   Par
(000)		     Value  
Texas (continued)  

University of Texas, Refunding RB, Financing System, Series B, 5.00%, 08/15/43

   $ 3,347     $ 3,662,763  
   

 

 

  
    12,854,156  
Utah — 1.2%  

City of Riverton Utah, RB, IHC Health Services, Inc., 5.00%, 08/15/41

     3,959       4,106,622  
   

 

 

  
Virginia — 1.7%  

University of Virginia, Refunding RB, General, 5.00%, 06/01/40(b)

     5,909       5,908,609  
   

 

 

  
Washington — 2.4%  

State of Washington, GO, Various Purposes, Series E, 5.00%, 02/01/19(b)

     8,113       8,288,607  
   

 

 

  
Wisconsin — 0.9%  

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

     3,072       3,127,689  
   

 

 

  

Total Municipal Bonds Transferred to Tender
Option Bond Trusts — 35.3%
(Cost — $117,683,178)

 

     121,769,274  
   

 

 

  

Total Long-Term Investments — 162.0%
(Cost — $531,125,027)

 

     558,668,019  
   

 

 

  
     Shares         
Short-Term Securities — 0.7%  

BlackRock Liquidity Funds, MuniCash, Institutional Class, 0.92%(j)(k)

     2,273,419       2,273,647  
   

 

 

  

Total Short-Term Securities — 0.7%
(Cost — $2,273,419)

 

     2,273,647  
   

 

 

  

Total Investments — 162.7%
(Cost — $533,398,446)

 

     560,941,666  

Other Assets Less Liabilities — 2.6%

 

     9,035,848  

Liability for TOB Trust Certificates, Including Interest Expense and Fees Payable — (21.4)%

 

     (73,898,253 ) 

VMTP Shares at Liquidation Value — (43.9)%

 

     (151,300,000 ) 
   

 

 

  

Net Assets Applicable to Common Shares — 100.0%

 

   $ 344,779,261  
   

 

 

  
 
(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.

 

 

     9  

Schedule of Investments  (unaudited) (continued)

May 31, 2018

   

BlackRock Municipal Income Trust II (BLE)

 

 

(g)  Variable or floating rate security, which interest rate adjusts periodically based on changes in current interest rates and prepayments on the underlying pool of assets. Rate shown is the rate in effect as of period end.
(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 October 1, 2018 to April 1, 2025, is $17,085,609.
(j)  Annualized 7-day yield as of period end.
(k)  During the period ended May 31, 2018, investments in issuers considered to be an affiliate of the Trust for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:

 

Affiliated     

 Shares
Held at
08/31/17

 		       
 Net
Activity
 		       

 Shares
Held at
05/31/18

 		       
 Value at
05/31/18
 		        Income         
 Net Realized
Gain (Loss)
 (a) 		     


 Change in
Unrealized
Appreciation
(Depreciation)		  

 
 

BlackRock Liquidity Funds,
MuniCash, Institutional Class

      6,985,327          (4,711,908 )         2,273,419        $ 2,273,647        $ 22,332        $ 367      $ (53 ) 
                 

 

 

       

 

 

       

 

 

     

 

 

  

 

  (a)  Includes net capital gain distributions, if applicable.  

Derivative Financial Instruments Outstanding as of Period End

Futures Contracts

 

Description   Number of
Contracts		      Expiration
Date		      Notional
Amount (000)		      Value /
Unrealized
Appreciation
(Depreciation)		  

Short Contracts:

           

10-Year U.S. Treasury Note

     55        09/19/18      $ 6,624      $ (54,155 ) 

Long U.S. Treasury Bond

     88        09/19/18        12,771        (237,635 ) 

5-Year U.S. Treasury Note

     36        09/28/18        4,100        (19,381 ) 
          

 

 

  
           $ (311,171 ) 
          

 

 

  

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.

GARB — General Airport Revenue Bonds

GO — General Obligation Bonds

IDA — Industrial Development Authority

LRB — Lease Revenue Bonds

RB — Revenue Bonds

S/F — Single-Family

 

 

10   

Schedule of Investments  (unaudited) (continued)

May 31, 2018

   

BlackRock Municipal Income Trust II (BLE)

 

Fair Value Hierarchy as of Period End

Various inputs are used in determining the fair value of investments and derivative financial instruments. These inputs to valuation techniques are categorized into a fair value hierarchy consisting of three broad levels for financial reporting purposes as follows:

 

  •   Level 1 — Unadjusted price quotations in active markets/exchanges for identical assets or liabilities that the Trust has the ability to access

 

  •   Level 2 — Other observable inputs (including, but not limited to, quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs)

 

  •   Level 3 — Unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the Trust’s own assumptions used in determining the fair value of investments and derivative financial instruments)

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the fair value hierarchy classification is determined based on the lowest level input that is significant to the fair value measurement in its entirety. Investments classified within Level 3 have significant unobservable inputs used by the BlackRock Global Valuation Methodologies Committee (the “Global Valuation Committee”) in determining the price for Fair Valued Investments. Level 3 investments include equity or debt issued by privately held companies or funds. There may not be a secondary market, and/or there are a limited number of investors. Level 3 investments may also be adjusted to reflect illiquidity and/or non-transferability, with the amount of such discount estimated by the Global Valuation Committee in the absence of market information.

Changes in valuation techniques may result in transfers into or out of an assigned level within the hierarchy. In accordance with the Trust’s policy, transfers between different levels of the fair value hierarchy are deemed to have occurred as of the beginning of the reporting period. The categorization of a value determined for investments and derivative financial instruments is based on the pricing transparency of the investments and derivative financial instruments and is not necessarily an indication of the risks associated with investing in those securities. For information about the Trust’s policy regarding valuation of investments and derivative financial instruments, refer to the Trust’s most recent financial statements as contained in its semi-annual report.

As of May 31, 2018, the following tables summarize the Trust’s investments and derivative financial instruments categorized in the disclosure hierarchy:

 

      Level 1        Level 2        Level 3        Total  

Assets:

 

Investments:

 

Long-Term Investments (a)

    $ —        $ 558,668,019        $ —        $ 558,668,019  

Short-Term Securities

     2,273,647          —          —          2,273,647  
  

 

 

       

 

 

       

 

 

       

 

 

  
   $ 2,273,647        $ 558,668,019        $ —        $ 560,941,666  
  

 

 

       

 

 

       

 

 

       

 

 

  

Derivative Financial Instruments (b)

 

Liabilities:

 

Interest rate contracts

   $ (311,171 )       $ —        $ —        $ (311,171 ) 
  

 

 

       

 

 

       

 

 

       

 

 

  

 

  (a)  See above Schedule of Investments for values in each state or political subdivision.  
  (b)  Derivative financial instruments are futures contracts which are valued at the unrealized appreciation (depreciation) on the instrument.  

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

   $ —        $ (73,632,182 )       $ —        $ (73,632,182 ) 

VMTP Shares at Liquidation Value

     —          (151,300,000 )         —          (151,300,000 ) 
  

 

 

       

 

 

       

 

 

       

 

 

  
   $ —        $ (224,932,182 )       $ —        $ (224,932,182 ) 
  

 

 

       

 

 

       

 

 

       

 

 

  

During the period ended May 31, 2018, there were no transfers between levels.

 

 

     11  

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 19, 2018

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

By:       /s/ John M. Perlowski                        
  John M. Perlowski
 

Chief Executive Officer (principal executive officer) of

BlackRock Municipal Income Trust II

Date: July 19, 2018

 

By:       /s/ Neal J. Andrews                            
  Neal J. Andrews
 

Chief Financial Officer (principal financial officer) of

BlackRock Municipal Income Trust II

Date: July 19, 2018