Company: BLE
Filing Date: 2025-08-07
Form Type: PRE 14A
Source: 0001193125-25-175555
Chunk: 146

Company: BLACKROCK MUNICIPAL INCOME TRUST II
Filing Date: 2025-08-07
Form: PRE 14A
Chunk 146
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 value of those particular bonds appears to be consistent with the value of similar bonds. Municipal Bonds of
particular types (for example, but not limited to hospital bonds, industrial revenue bonds or bonds issued by a particular municipal issuer) may be undervalued because there is a temporary excess of supply in that market sector, or because of a
general decline in the market price of Municipal Bonds of the market sector for reasons that do not apply to the particular Municipal Bonds that are considered undervalued. BFK’s investment in underrated or undervalued Municipal Bonds will be
based on the Manager’s belief that their yield is higher than that available on bonds bearing equivalent levels of interest rate risk, credit risk and other forms of risk, and that their prices will ultimately rise, relative to the market, to
reflect their true value. Any capital appreciation realized by BFK will generally result in capital gain distributions subject to federal capital gains taxation.

BFK ordinarily does not intend to realize significant investment income not exempt from federal income tax. From time to time, BFK may realize
taxable capital gains.

Federal tax legislation has limited the types and volume of bonds the interest on which qualifies for a federal
income tax exemption. As a result, this legislation and legislation that may be enacted in the future may affect the availability of Municipal Bonds for investment by BFK.

Description of Municipal Bonds

See
“The Acquiring Fund’s Investments – Description of Municipal Bonds” for additional information regarding the types of municipal bonds in which MHD invests.

Tender Option Bond Transactions

BFK
currently leverages its assets through the use of TOB Residuals, which are derivative interests in municipal bonds. The TOB Residuals in which BFK will invest pay interest or income that, in the opinion of counsel to the issuer of such TOB
Residuals, is exempt from regular U.S. federal income tax. No independent investigation will be made to confirm the tax-exempt status of the interest or income paid by TOB Residuals held by BFK.
Although volatile, TOB Residuals typically offer the potential for yields exceeding the yields available on fixed rate municipal bonds with comparable credit quality.

TOB Residuals represent beneficial interests in a TOB Trust formed for the purpose of holding municipal bonds contributed by one or more
funds. A TOB Trust typically issues two classes of beneficial interests: short-term floating rate interests (“”), which are sold to third party investors, and TOB Residuals, which are generally issued