Company: BLE
Filing Date: 2025-08-07
Form Type: PRE 14A
Source: 0001193125-25-175555
Chunk: 100

Company: BLACKROCK MUNICIPAL INCOME TRUST II
Filing Date: 2025-08-07
Form: PRE 14A
Chunk 100
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 the market rate of the security at the time of issuance. Upon maturity, the holder of a zero-coupon bond is entitled to receive the par value of the security.

While interest payments are not
made on such securities, holders of such securities are deemed to have received income (“”) annually, notwithstanding that cash may not be received currently. The effect of owning instruments that do not make current
interest payments is that a fixed yield is earned not only on the original investment but also, in effect, on all discount accretion during the life of the obligations. This implicit reinvestment of earnings at a fixed rate eliminates the risk of
being unable to invest distributions at a rate as high as the implicit yield on the zero-coupon bond, but at the same time eliminates the holder’s ability to reinvest at higher rates in the future. For
this reason, some of these securities may be subject to substantially greater price fluctuations during periods of changing market interest rates than are comparable securities that pay interest currently. Longer term
zero-coupon bonds are more exposed to interest rate risk than shorter term zero-coupon bonds. These investments benefit the issuer by mitigating its need for cash to
meet debt service, but also require a higher rate of return to attract investors who are willing to defer receipt of cash.

The Acquiring
Fund accrues income with respect to these securities for U.S. federal income tax and accounting purposes prior to the receipt of cash payments. Zero-coupon bonds may be subject to greater fluctuation in value and less liquidity in the event of
adverse market conditions than comparably rated securities that pay cash interest at regular intervals.

Further, to maintain its
qualification for pass-through treatment under the federal tax laws, the Acquiring Fund is required to distribute income to its shareholders and, consequently, may have to dispose of other, more liquid portfolio securities under disadvantageous
circumstances or may have to leverage itself by borrowing in order to generate the cash to satisfy these distributions. The required distributions may result in an increase in the Acquiring Fund’s exposure to
zero-coupon bonds.

In addition to the above-described risks, there are certain other risks
related to investing in zero-coupon bonds. During a period of severe market conditions, the market for such securities may become even less liquid. In addition,

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as these securities do not pay cash interest, the Acquiring Fund’s investment exposure to these securities and their risks, including credit risk, will increase during the time these
securities are held in the Acquiring