Company: BLE
Filing Date: 2025-08-07
Form Type: PRE 14A
Source: 0001193125-25-175555
Chunk: 139

Company: BLACKROCK MUNICIPAL INCOME TRUST II
Filing Date: 2025-08-07
Form: PRE 14A
Chunk 139
---
 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 funds. 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 the fund(s) that transferred municipal bonds to the TOB Trust. BYM 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). 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.

73

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