SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                             ----------------------

                                    FORM 10-Q
                     QUARTERLY REPORT PURSUANT TO SECTION 13
                 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

                For the quarterly period ended March 28, 2003

                     MERRILL LYNCH PREFERRED CAPITAL TRUST II
      (Exact name of Registrant as specified in its certificate of trust)

                         COMMISSION FILE NO.: 1-7182-04

       Delaware                                          13-7108354
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)

  4 World Financial Center
     New York, New York                                   10080
(Address of principal executive offices)               (Zip Code)

Registrant's telephone number, including area code: (212) 449-1000


                     MERRILL LYNCH PREFERRED FUNDING II, L.P.
                  (Exact name of Registrant as specified in its
                      certificate of limited partnership)

                         COMMISSION FILE NO.: 1-7182-03

          Delaware                                     13-3926165
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)

   4 World Financial Center
      New York, New York                                     10080
(Address of principal executive offices)                   (Zip Code)

 Registrant's telephone number, including area code: (212) 449-1000

The Registrants meet the conditions set forth in General Instruction H (1)(a)
and (b) of Form 10-Q and is therefore filing this form with the reduced
disclosure format.

Indicate by check mark whether the Registrants (1) have filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrants were required to file such reports), and (2) have been subject to
such filing requirements for the past 90 days. Yes |X| No |_|

Indicate by check mark whether the Registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).  Yes [ ] No [X]

As of May 8, 2003 no voting stock was held by non-affiliates of the
Registrants.
================================================================================
<PAGE>

                         PART I - FINANCIAL INFORMATION
                         ------------------------------

ITEM 1.   FINANCIAL STATEMENTS
          --------------------
<TABLE>
<CAPTION>

MERRILL LYNCH PREFERRED CAPITAL TRUST II
CONDENSED BALANCE SHEETS (unaudited)
(dollars in thousands, except per security amounts)
-----------------------------------------------------------------------------------------------------------------------



                                                                                      MARCH 28, 2003  DECEMBER 27, 2002
                                                                                     ---------------  -----------------
<S>                                                                                      <C>                <C>
ASSETS

Investment in partnership preferred securities                                            $  309,278         $  309,278
Income receivable                                                                              6,186              6,186
                                                                                          ----------         ----------
Total Assets                                                                              $  315,464         $  315,464
                                                                                          ==========         ==========

LIABILITY AND STOCKHOLDERS' EQUITY

Distributions payable                                                                     $    6,186         $    6,186
                                                                                          ----------         ----------
Stockholders' equity:

   Preferred securities (8% Trust Originated Preferred
      Securities; 12,000,000 authorized, issued, and
      outstanding; $25 liquidation amount per security)                                      300,000            300,000

   Common securities (8% Trust Common Securities;
      371,136 authorized, issued, and outstanding;
      $25 liquidation amount per security)                                                     9,278              9,278
                                                                                          ----------         ----------
   Total Stockholders' equity                                                                309,278            309,278
                                                                                          ----------         ----------

Total Liability and Stockholders' Equity                                                  $  315,464         $  315,464
                                                                                          ==========         ==========
</TABLE>

See Note to Condensed Financial Statements

                                        2
<PAGE>

<TABLE>
<CAPTION>

MERRILL LYNCH PREFERRED CAPITAL TRUST II
CONDENSED STATEMENTS OF EARNINGS  (unaudited)
(dollars in thousands)
------------------------------------------------------------------------------------------------------------

                                                                           FOR THE THREE MONTHS ENDED
                                                                     ---------------------------------------

                                                                         MARCH 28, 2003       MARCH 29, 2002
                                                                     ------------------   ------------------
<S>                                                                           <C>                <C>
EARNINGS

Income on partnership preferred securities                                    $   6,186            $   6,186
                                                                              =========            =========





</TABLE>

See Note to Condensed Financial Statements


                                        3
<PAGE>

<TABLE>
<CAPTION>

MERRILL LYNCH PREFERRED CAPITAL TRUST II
CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY  (unaudited)
(dollars in thousands)
-------------------------------------------------------------------------------------------------

                                                                  FOR THE THREE MONTHS ENDED
                                                          ---------------------------------------

                                                              MARCH 28, 2003       MARCH 29, 2002
                                                          ------------------   ------------------
<S>                                                              <C>                 <C>
PREFERRED SECURITIES

Balance, beginning and end of period                              $  300,000           $  300,000
                                                                  ----------           ----------

COMMON SECURITIES

Balance, beginning and end of period                                   9,278                9,278
                                                                  ----------           ----------

UNDISTRIBUTED EARNINGS

Balance, beginning of period                                               -                    -
Earnings                                                               6,186                6,186
Distributions payable                                                 (6,186)              (6,186)
                                                                  ----------           ----------
Balance, end of period                                                     -                    -
                                                                  ----------           ----------


Total Stockholders' Equity                                        $  309,278           $  309,278
                                                                  ==========           ==========
</TABLE>

See Note to Condensed Financial Statements

                                        4
<PAGE>

<TABLE>
<CAPTION>

MERRILL LYNCH PREFERRED CAPITAL TRUST II
CONDENSED STATEMENTS OF CASH FLOWS  (unaudited)
(dollars in thousands)
-------------------------------------------------------------------------------------------------------------------

                                                                                    FOR THE THREE MONTHS ENDED
                                                                            ---------------------------------------

                                                                                MARCH 28, 2003       MARCH 29, 2002
                                                                            ------------------   ------------------
<S>                                                                                 <C>                  <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Earnings                                                                          $   6,186            $   6,186
                                                                                     ---------            ---------
      Cash provided by operating activities                                              6,186                6,186
                                                                                     ---------            ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Distributions                                                                        (6,186)              (6,186)
                                                                                     ---------            ---------
      Cash used for financing activities                                                (6,186)              (6,186)
                                                                                     ---------            ---------

NET CHANGE IN CASH                                                                           -                    -

CASH, BEGINNING OF PERIOD                                                                    -                    -
                                                                                     ---------            ---------
CASH, END OF PERIOD                                                                  $       -            $       -
                                                                                     =========            =========



SUPPLEMENTAL DISCLOSURE OF CASH FLOWS:

Preferred and common distributions of $6,000 and $186, respectively, were
accrued at March 28, 2003.

</TABLE>

See Note to Condensed Financial Statements

                                        5
<PAGE>



MERRILL LYNCH PREFERRED CAPITAL TRUST II
NOTE TO CONDENSED FINANCIAL STATEMENTS  (unaudited)
MARCH 28, 2003
-------------------------------------------------------------------------------


BASIS OF PRESENTATION

These unaudited condensed financial statements should be read in conjunction
with the audited financial statements included in the Annual Report on Form 10-K
of Merrill Lynch Preferred Capital Trust II (the "Trust") for the year ended
December 27, 2002. The December 27, 2002 balance sheet information was derived
from the audited financial statements. The interim financial statements for the
three-month periods are unaudited; however, in the opinion of the Regular
Trustee of the Trust, all adjustments, consisting only of normal recurring
accruals necessary for a fair statement of the results of operations, have been
included.

                                        6
<PAGE>

<TABLE>
<CAPTION>

MERRILL LYNCH PREFERRED FUNDING II, L.P.
CONDENSED BALANCE SHEETS  (unaudited)
(dollars in thousands)
----------------------------------------------------------------------------------------------------------------



                                                                              MARCH 28, 2003   DECEMBER 27, 2002
                                                                          ------------------   -----------------
<S>                                                                              <C>                 <C>
ASSETS

Cash                                                                             $         -         $         1
                                                                                 -----------         -----------
Investments:
   Affiliate debentures                                                              360,218             360,218
   U.S. Treasury bills                                                                 3,642               3,658
                                                                                  ----------          ----------
   Total investments                                                                 363,860             363,876

Income receivable                                                                      7,204               7,204
                                                                                  ----------          ----------
Total Assets                                                                      $  371,064          $  371,081
                                                                                  ==========          ==========

LIABILITY AND PARTNERS' CAPITAL

Distributions payable                                                             $    7,204          $    7,204
                                                                                  ----------          ----------
Partners' capital:
   Limited partnership interest                                                      309,278             309,278
   General partnership interest                                                       54,582              54,599
                                                                                  ----------          ----------
   Total partners' capital                                                           363,860             363,877
                                                                                  ----------          ----------

Total Liability and Partners' Capital                                             $  371,064          $  371,081
                                                                                  ==========          ==========
</TABLE>

See Note to Condensed Financial Statements

                                        7
<PAGE>

<TABLE>
<CAPTION>


MERRILL LYNCH PREFERRED FUNDING II, L.P.
CONDENSED STATEMENTS OF EARNINGS  (unaudited)
(dollars in thousands)
-----------------------------------------------------------------------------------------------


                                                               FOR THE THREE MONTHS ENDED
                                                        ---------------------------------------

                                                            MARCH 28, 2003       MARCH 29, 2002
                                                        ------------------   ------------------
<S>                                                            <C>                  <C>
EARNINGS

Interest income:
   Affiliate debentures                                         $    7,204           $    7,204
   U.S. Treasury bills                                                  14                   32
                                                                ----------           ----------
Earnings                                                        $    7,218           $    7,236
                                                                ==========           ==========








</TABLE>

See Note to Condensed Financial Statements


                                        8
<PAGE>

<TABLE>
<CAPTION>

MERRILL LYNCH PREFERRED FUNDING II, L.P.
CONDENSED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL  (unaudited)
(dollars in thousands)
------------------------------------------------------------------------------------------------


                                                                FOR THE THREE MONTHS ENDED
                                                         ---------------------------------------

                                                             MARCH 28, 2003       MARCH 29, 2002
                                                         ------------------   ------------------
<S>                                                             <C>                  <C>
LIMITED PARTNER'S CAPITAL

Balance, beginning of period                                     $  309,278           $  309,278
Net income allocated to limited partner                               6,186                6,186
Distributions payable                                                (6,186)              (6,186)
                                                                 ----------           ----------
Balance, end of period                                              309,278              309,278
                                                                 ----------           ----------


GENERAL PARTNER'S CAPITAL

Balance, beginning of period                                         54,599               54,684
Net income allocated to general partner                               1,032                1,050
Distributions                                                           (30)                (131)
Distributions payable                                                (1,019)              (1,018)
                                                                 ----------           ----------
Balance, end of period                                               54,582               54,585
                                                                 ----------           ----------

TOTAL PARTNERS' CAPITAL                                          $  363,860           $  363,863
                                                                 ==========           ==========
</TABLE>

See Note to Condensed Financial Statements

                                        9
<PAGE>


<TABLE>
<CAPTION>

MERRILL LYNCH PREFERRED FUNDING II, L.P.
CONDENSED STATEMENTS OF CASH FLOWS  (unaudited)
(dollars in thousands)
-------------------------------------------------------------------------------------------------------------------


                                                                                   FOR THE THREE MONTHS ENDED
                                                                            ---------------------------------------

                                                                                MARCH 28, 2003       MARCH 29, 2002
                                                                            ------------------   ------------------

<S>                                                                                 <C>                  <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Earnings                                                                          $   7,218            $   7,236
   Accretion of U.S. Treasury bills                                                        (14)                 (32)
                                                                                     ---------            ---------
      Cash provided by operating activities                                              7,204                7,204
                                                                                     ---------            ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchases of investment securities                                                   (3,639)              (3,639)
   Maturities of investment securities                                                   3,669                3,770
                                                                                     ---------            ---------
      Cash provided by investing activities                                                 30                  131
                                                                                     ---------            ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Distributions to limited partner                                                     (6,186)              (6,186)
   Distributions to general partner                                                     (1,049)              (1,149)
                                                                                     ---------            ---------
      Cash used for financing activities                                                (7,235)              (7,335)
                                                                                     ---------            ---------

NET CHANGE IN CASH                                                                          (1)                   -

CASH, BEGINNING OF PERIOD                                                                    1                    1
                                                                                     ---------            ---------
CASH, END OF PERIOD                                                                  $       -            $       1
                                                                                     =========            =========



SUPPLEMENTAL DISCLOSURE OF CASH FLOWS:

Distributions of $7,204 were accrued at March 28, 2003.

</TABLE>

See Note to Condensed Financial Statements

                                       10
<PAGE>


MERRILL LYNCH PREFERRED FUNDING II, L.P.
NOTE TO CONDENSED FINANCIAL STATEMENTS  (unaudited)
MARCH 28, 2003
--------------------------------------------------------------------------------



BASIS OF PRESENTATION

These unaudited condensed financial statements should be read in conjunction
with the audited financial statements included in the Annual Report on Form 10-K
of Merrill Lynch Preferred Funding II, L.P. (the "Partnership") for the year
ended December 27, 2002. The December 27, 2002 balance sheet information was
derived from the audited financial statements. The interim financial statements
for the three-month periods are unaudited; however, in the opinion of the
General Partner of the Partnership, all adjustments, consisting only of normal
recurring accruals necessary for a fair statement of the results of operations,
have been included.

                                       11
<PAGE>

ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

No disclosure is required for this Item pursuant to General Instruction H of
Form 10-Q.  There are no material changes in the amount of revenue and expense
items between the most recent fiscal year-to-date period presented and the
corresponding year-to-date period in the preceding fiscal year.


ITEM 3.     QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

No disclosure is required for this Item pursuant to General Instruction H of
Form 10-Q.


ITEM 4.  CONTROLS AND PROCEDURES

The person who functions as the equivalent of the chief executive officer and
chief financial officer of the Trust and the Partnership has evaluated the
effectiveness of the Trust's and the Partnership's disclosure controls and
procedures as of a date within ninety days prior to the filing date of this
Form 10-Q.  Based on this evaluation, the person who functions as the
equivalent of the chief executive officer and chief financial officer of the
Trust and the Partnership has concluded that the Trust's and the Partnership's
disclosure controls and procedures (as defined in Rules 13a-14 and 15d-14 under
the Securities Exchange Act of 1934) are effective and that there have been no
significant changes in internal controls or in other factors that could
significantly affect these controls subsequent to the date of their evaluation,
including any corrective actions with regard to significant deficiencies and
material weaknesses.



                                       12
<PAGE>



                           PART II - OTHER INFORMATION

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits

         12   Computation  of Ratios of Earnings to Combined  Fixed Charges and
              Preferred Securities Distributions

         99   Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
              Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(b)      Reports on Form 8-K

         None



                                       13
<PAGE>



                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrants have duly caused this report to be signed on their behalf by the
undersigned, thereunto duly authorized on the 8th day of May, 2003.


                               MERRILL LYNCH PREFERRED CAPITAL TRUST II*

                               By: /s/ JOHN C. STOMBER
                                   ---------------------------------------------
                               Name:  John C. Stomber
                               Title: Regular Trustee



                               MERRILL LYNCH PREFERRED FUNDING II, L.P.*


                               By: MERRILL LYNCH & CO., INC., as General Partner

                               By: /s/ JOHN C. STOMBER
                                   ---------------------------------------------
                               Name:   John C. Stomber
                               Title:  Treasurer



------------

* There is no principal executive officer(s), principal financial officer,
controller, principal accounting officer or board of directors of the
Registrants. The Trustees of the Trust (which include the Regular Trustee, the
Property Trustee and the Delaware Trustee) together exercise all powers and
perform all functions with respect to the Trust.




                                       14
<PAGE>



                                  Certification
                                  -------------

I, John C. Stomber, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Merrill Lynch Preferred
Capital Trust II and Merrill Lynch Preferred Funding II, L.P.;

2. Based on my  knowledge,  this  quarterly  report  does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not  misleading  with respect to the period covered by this quarterly
report;

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included in this quarterly  report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4.  The  registrant's  other  certifying  officers*  and I are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed  such  disclosure  controls and  procedures  to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others  within those  entities,  particularly  during the
period in which this quarterly report is being prepared;

b) evaluated  the  effectiveness  of the  registrant's  disclosure  controls and
procedures  as of a date  within  90  days  prior  to the  filing  date  of this
quarterly report (the "Evaluation Date"); and

c) presented in this quarterly report our conclusions about the effectiveness of
the  disclosure  controls  and  procedures  based  on our  evaluation  as of the
Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation,  to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):

a) all significant  deficiencies in the design or operation of internal controls
which  could  adversely  affect the  registrant's  ability  to record,  process,
summarize and report  financial data and have  identified  for the  registrant's
auditors any material weaknesses in internal controls; and

b) any  fraud,  whether  or not  material,  that  involves  management  or other
employees who have a significant role in the registrant's internal controls; and

6. The  registrant's  other  certifying  officers  and I have  indicated in this
quarterly  report  whether or not there  were  significant  changes in  internal
controls or in other factors that could  significantly  affect internal controls
subsequent to the date of our most recent  evaluation,  including any corrective
actions with regard to significant deficiencies and material weaknesses.


                               MERRILL LYNCH PREFERRED CAPITAL TRUST II


                               By:  /s/ JOHN C. STOMBER
                                    --------------------------------------------
                               Name:   John C. Stomber *
                               Title:  Regular Trustee




                               MERRILL LYNCH PREFERRED FUNDING II, L.P.

                               By: MERRILL LYNCH & CO., INC., as General Partner


                               By:   /s/ JOHN C. STOMBER
                                     -------------------------------------------
                               Name:   John C. Stomber *
                               Title:  Treasurer




Dated:  May 8, 2003

_______________
* John C. Stomber functions as the equivalent of the Chief Executive Officer and
Chief Financial Officer of each of the Trust and the Partnership for purposes of
Section 302 of the Sarbanes-Oxley Act of 2002.


                                       15
<PAGE>







                                INDEX TO EXHIBITS

EXHIBITS

12       Computation  of  Ratios of  Earnings  to  Combined  Fixed  Charges  and
         Preferred Securities Distributions

99       Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
         Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002



                                       16