Company: BLE
Filing Date: 2025-08-07
Form Type: PRE 14A
Source: 0001193125-25-175555
Chunk: 140

Company: BLACKROCK MUNICIPAL INCOME TRUST II
Filing Date: 2025-08-07
Form: PRE 14A
Chunk 140
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 of any payments of principal and interest made by the credit enhancement provider.

The TOB Residuals held by BYM generally
provide BYM 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, BYM 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 BYM to the entire return of the municipal bonds in the TOB Trust, with a net cash investment by BYM 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 BYM (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.

BYM 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 BYM’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 BYM 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., BYM) 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 TOB Floaters
to tender their TOB Floaters in exchange for payment of par plus accrued interest on any business day (subject to the non-occurrence of a termination event). The tendered TOB Floaters are remarketed by