Company: BLE
Filing Date: 2025-09-08
Form Type: DEF 14A
Source: 0001193125-25-198164
Chunk: 139

Company: BLACKROCK MUNICIPAL INCOME TRUST II
Filing Date: 2025-09-08
Form: DEF 14A
Chunk 139
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 to tender their position at par (plus accrued interest). BYM, as a holder of TOB Residuals, is paid the residual cash
flow from the TOB Trust. BYM contributes municipal bonds to the TOB Trust and is paid the cash received by the TOB Trust from the sale of the TOB Floaters, less certain transaction costs, and typically will invest the cash to purchase additional
municipal bonds or other investments permitted by its investment policies. If BYM ever purchases all or a portion of the TOB Floaters sold by the TOB Trust, it may surrender those TOB Floaters together with a proportionate amount of TOB Residuals to
the TOB Trust in exchange for a proportionate amount of the municipal bonds owned by the TOB Trust.

Other registered investment companies
advised by the Investment Advisor or its affiliates (“BlackRock-Advised Funds”) may contribute municipal bonds to a TOB Trust into which BYM has contributed municipal bonds. If multiple BlackRock-Advised Funds participate in the same TOB
Trust, the economic rights and obligations under the TOB Residual will generally be shared among the funds ratably in proportion to their participation in the TOB Trust.

The municipal bonds transferred to a TOB Trust typically are high grade municipal bonds. In certain cases, when municipal bonds transferred
are lower grade municipal bonds, the TOB Trust transaction includes a credit enhancement feature that provides for the timely payment of principal and interest on the bonds to the TOB Trust by a credit enhancement provider. The TOB Trust would be
responsible for the payment of the credit enhancement fee and BYM, 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 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).