Company: BLE
Filing Date: 2025-09-08
Form Type: DEF 14A
Source: 0001193125-25-198164
Chunk: 131

Company: BLACKROCK MUNICIPAL INCOME TRUST II
Filing Date: 2025-09-08
Form: DEF 14A
Chunk 131
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iduals”), which are derivative interests
in municipal bonds. The TOB Residuals in which BLE 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.

BLE may enter into reverse repurchase agreements with respect to its portfolio investments subject to BLE’s investment restrictions.

BLE may enter into derivative securities transactions that have leverage embedded in them.

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BLE reserves the right to borrow funds subject to BLE’s investment restrictions. The
proceeds of borrowings may be used for any valid purpose including, without limitation, liquidity, investments and repurchases of shares of BLE.

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 BLE invests.

Tender Option Bond Transactions

BLE currently leverages its assets through the use of residual interest municipal tender option bonds (“TOB Residuals”), which are
derivative interests in municipal bonds. The TOB Residuals in which BLE 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 BLE. 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 Trusts. 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 BLE(s) that transferred municipal bonds to the TOB Trust. BLE 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 to tender their position at par (plus accrued interest). BLE, as a holder of TOB
Residuals, is paid the residual cash flow from the TOB Trust. BLE contributes municipal bonds to the TOB Trust