Company: BLE
Filing Date: 2025-08-07
Form Type: PRE 14A
Source: 0001193125-25-175555
Chunk: 156

Company: BLACKROCK MUNICIPAL INCOME TRUST II
Filing Date: 2025-08-07
Form: PRE 14A
Chunk 156
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 to the TOB Trust by a credit enhancement provider. The TOB Trust would be responsible for the payment of the credit enhancement fee

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and MUE, as a TOB Residual holder, would be responsible for reimbursement of any payments of principal and interest made by the credit enhancement provider.

The TOB Residuals held by MUE generally provide MUE with the right to cause the holders of a proportional share of the TOB Floaters to tender
their notes to the TOB Trust at par plus accrued interest. Thereafter, MUE may withdraw a corresponding share of the municipal bonds from the TOB Trust. As a result, a tender option bond transaction, in effect, creates exposure for MUE to the entire
return of the municipal bonds in the TOB Trust, with a net cash investment by MUE that is less than the value of the municipal bonds in the TOB Trust. This multiplies the positive or negative impact of the municipal bonds’ return within MUE
(thereby creating leverage). The leverage within a TOB Trust depends on the value of the municipal bonds deposited in the TOB Trust relative to the value of the TOB Floaters it issues.

MUE may invest in highly leveraged TOB Residuals. A TOB Residual generally is considered highly leveraged if the principal amount of the TOB
Floaters issued by the related TOB Trust exceeds 75% of the principal amount of the municipal bonds owned by the TOB Trust.

The leverage
attributable to MUE’s use of TOB Residuals may be “called away” on relatively short notice and therefore may be less permanent than more traditional forms of leverage. The TOB Trust may be collapsed without the consent of MUE upon the
occurrence of termination events, as defined in the TOB Trust agreements. Upon the occurrence of a termination event, a TOB Trust would be liquidated with the proceeds applied first to any accrued fees owed to the trustee of the TOB Trust, the
remarketing agent of the TOB Floaters and the TOBs Liquidity Provider. Upon certain termination events, the holders of the TOB Floaters would be paid before the TOB Residual holders (i.e., MUE) whereas in other termination events, the holders
of TOB Floaters and the TOB Residual holders would be paid pro rata.

TOB Trusts are typically supported by a liquidity facility provided
by a TOBs Liquidity Provider that allows the holders of the