Company: BLE
Filing Date: 2025-09-08
Form Type: DEF 14A
Source: 0001193125-25-198164
Chunk: 138

Company: BLACKROCK MUNICIPAL INCOME TRUST II
Filing Date: 2025-09-08
Form: DEF 14A
Chunk 138
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 do
not apply to the particular Municipal Bonds that are considered undervalued. BYM’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 BYM will generally result in
capital gain distributions subject to federal capital gains taxation.

BYM ordinarily does not intend to realize significant investment
income not exempt from federal income tax. From time to time, BYM 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 BYM.

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

BYM currently leverages its assets through the use of TOB Residuals, which are derivative interests in municipal bonds. The TOB Residuals in
which BYM 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 BYM. Although volatile, TOB Residuals typically offer the potential for yields exceeding the yields available on fixed rate municipal
bonds with comparable credit quality.

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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 (“TOB Floaters”), which are sold to third party investors, and TOB Residuals,
which are generally issued to the fund(s) that transferred municipal bonds to the TOB Trust. BYM may invest in both TOB Floaters and TOB Residuals. TOB Floaters may have first priority on the cash flow from the municipal bonds held by the TOB Trust
and are enhanced with a liquidity support arrangement provided by a TOB Liquidity Provider (defined above) which allows holders