BlackRock MuniHoldings Quality Fund II, Inc.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED

MANAGEMENT INVESTMENT COMPANY

Investment Company Act file number 811-09191

Name of Fund:  BlackRock MuniHoldings Quality Fund II, Inc. (MUE)

Fund Address:   100 Bellevue Parkway, Wilmington, DE 19809

Name and address of agent for service: John M. Perlowski, Chief Executive Officer, BlackRock MuniHoldings Quality Fund II, Inc., 55 East 52nd Street, New York, NY 10055

Registrant’s telephone number, including area code: (800) 882-0052, Option 4

Date of fiscal year end: 07/31/2016

Date of reporting period: 04/30/2016


Item 1 – Schedule of Investments


Schedule of Investments April 30, 2016 (Unaudited)

  

BlackRock MuniHoldings Quality Fund II, Inc. (MUE)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

    Value  

Alabama — 2.1%

    

City of Birmingham Alabama Special Care Facilities Financing Authority, RB, Children’s Hospital (AGC), 6.00%, 6/01/19 (a)

   $ 5,225      $ 6,026,829   

City of Selma Alabama IDB, RB, Gulf Opportunity Zone, International Paper Co. Project, Series A,
5.38%, 12/01/35

     940        1,047,912   
    

 

 

 
               7,074,741   

California — 24.4%

    

California Educational Facilities Authority, RB, University of Southern California, Series A,
5.25%, 10/01/38

     5,050        5,578,331   

California Health Facilities Financing Authority, RB, Sutter Health, Series B, 6.00%, 8/15/42

     2,865        3,441,553   

City & County of San Francisco California Airports Commission, ARB, Special Facility Lease, SFO Fuel, Series A, AMT (AGM), 6.10%, 1/01/20

     880        884,127   

City & County of San Francisco California Airports Commission, Refunding ARB, AMT, Series A:

    

2nd, 5.50%, 5/01/28

     1,800        2,195,028   

2nd, 5.25%, 5/01/33

     1,410        1,646,908   

5.00%, 5/01/44

     1,860        2,106,022   

City of San Jose California, Refunding ARB,
Series A-1, AMT, 5.50%, 3/01/30

     4,045        4,717,158   

City of Sunnyvale California, Refunding RB,
5.25%, 4/01/40

     2,800        3,207,988   

County of Sacramento California, ARB, Senior Series A (AGC), 5.50%, 7/01/41

     3,500        3,832,010   

County of Ventura California Community College District, GO, Election of 2002, Series C,
5.50%, 8/01/18 (a)

     3,175        3,516,408   

Emery Unified School District, GO, Election of 2010, Series A (AGM), 5.50%, 8/01/35

     1,875        2,244,769   

Golden Empire Schools Financing Authority, Refunding RB, Kern High School District Projects, 0.89%, 5/01/17 (b)

     2,850        2,848,974   

Kern Community College District, GO, Safety, Repair & Improvement, Series C,
5.50%, 11/01/33

     2,445        3,085,297   
Municipal Bonds   

Par  

(000)

    Value  

California (continued)

    

Los Angeles Community College District California, GO:

    

Election of 2001, Series A (NPFGC),
5.00%, 8/01/17 (a)

   $ 4,000      $ 4,220,480   

Election of 2008, Series C,
5.25%, 8/01/39

     2,000        2,334,340   

Oceanside Unified School District, GO, Series A (AGC), 5.25%, 8/01/33

     1,675        1,822,936   

Redondo Beach Unified School District, GO, Election of 2008, Series E, 5.50%, 8/01/21 (a)

     2,670        3,276,677   

Riverside County Public Financing Authority, RB, Capital Facilities Project, 5.25%, 11/01/40

     4,500        5,418,720   

State of California Public Works Board, LRB, Various Capital Projects, Series I:

    

5.50%, 11/01/30

     5,000        6,233,750   

5.50%, 11/01/31

     3,130        3,887,523   

5.50%, 11/01/33

     3,000        3,723,690   

State of California Public Works Board, RB, Department of Corrections & Rehabilitation,
Series F, 5.25%, 9/01/33

     1,260        1,543,966   

Township of Washington California Health Care District, GO, Election of 2004, Series B,
5.50%, 8/01/40

     940        1,143,660   

University of California, Refunding RB, The Regents of Medical Center, Series J,
5.25%, 5/15/38

     7,580        9,122,227   
    

 

 

 
               82,032,542   

Colorado — 2.1%

    

City & County of Denver Colorado Airport System, ARB, Series A, AMT:

    

5.50%, 11/15/28

     1,500        1,794,975   

5.50%, 11/15/30

     565        672,429   

5.50%, 11/15/31

     675        801,191   

Colorado Health Facilities Authority, RB, Hospital, NCMC, Inc. Project, Series B (AGM),
6.00%, 5/15/19 (a)

     3,300        3,674,187   
    

 

 

 
               6,942,782   

Florida — 20.2%

    

City of Jacksonville Florida, Refunding RB, Series A, 5.25%, 10/01/33

     405        492,869   
 

 

                
   BLACKROCK MUNIHOLDINGS QUALITY FUND II, INC.    APRIL 30, 2016    1


Schedule of Investments (continued)

  

BlackRock MuniHoldings Quality Fund II, Inc. (MUE)

 

Municipal Bonds   

Par  

(000)

    Value  

Florida (continued)

    

County of Broward Florida Airport System, ARB, Series A, AMT, 5.13%, 10/01/38

   $ 5,665      $ 6,418,275   

County of Broward Florida Airport System Revenue, ARB, Series A, AMT, 5.00%, 10/01/45

     1,440        1,643,083   

County of Hillsborough Florida Aviation Authority, Refunding ARB, Tampa International Airport, Series A, AMT, 5.50%, 10/01/29

     2,995        3,564,409   

County of Lee Florida, Refunding ARB, Series A, AMT, 5.38%, 10/01/32

     2,500        2,876,050   

County of Lee Florida HFA, RB, S/F Housing, Multi-County Program, Series A-2, AMT (Ginnie Mae), 6.00%, 9/01/40

     430        440,582   

County of Miami-Dade Florida, RB, Seaport:

    

Series A, 5.38%, 10/01/33

     1,765        2,052,872   

Series A, 5.50%, 10/01/42

     3,000        3,534,960   

Series B, AMT, 6.25%, 10/01/38

     800        1,001,448   

Series B, AMT, 6.00%, 10/01/42

     1,060        1,276,420   

County of Miami-Dade Florida, Refunding RB, Water & Sewer System, Series B, 5.25%, 10/01/29

     3,130        3,811,495   

County of Miami-Dade Florida Aviation, Refunding ARB, AMT, Series A:

    

Miami International Airport (AGM),
5.25%, 10/01/41

     4,610        4,996,088   

Miami International Airport (AGM),
5.50%, 10/01/41

     4,180        4,584,081   

5.00%, 10/01/32

     5,000        5,734,500   

County of Miami-Dade Florida Aviation Revenue, Refunding ARB, Series A, AMT,
5.00%, 10/01/31

     5,155        5,925,569   

County of Orange Florida School Board, COP, Series A (AGC), 5.50%, 8/01/19 (a)

     7,600        8,727,384   

Reedy Creek Improvement District, GO, Series A, 5.25%, 6/01/32

     1,805        2,164,484   
Municipal Bonds   

Par  

(000)

    Value  

Florida (continued)

    

Tohopekaliga Water Authority, Refunding RB, Series A, 5.25%, 10/01/21 (a)

   $ 6,965      $ 8,447,570   
    

 

 

 
               67,692,139   

Hawaii — 1.6%

    

State of Hawaii, Department of Transportation, COP, AMT:

    

5.25%, 8/01/25

     740        890,893   

5.25%, 8/01/26

     1,205        1,443,566   

State of Hawaii, Department of Transportation, RB, Series A, AMT, 5.00%, 7/01/45

     2,805        3,191,529   
    

 

 

 
               5,525,988   

Illinois — 16.1%

    

City of Chicago Illinois, GARB, O’Hare International Airport, 3rd Lien:

    

Series A, 5.75%, 1/01/39

     2,000        2,331,920   

Series C, 6.50%, 1/01/41

     9,085        11,017,198   

City of Chicago Illinois Midway International Airport, Refunding GARB, 2nd Lien, Series A:

    

5.00%, 1/01/41

     1,140        1,272,000   

AMT, 5.50%, 1/01/28

     1,000        1,188,680   

AMT, 5.50%, 1/01/29

     1,500        1,775,925   

AMT, 5.38%, 1/01/33

     2,000        2,305,460   

City of Chicago Illinois Transit Authority, RB:

    

Federal Transit Administration, Section 5309, Series A (AGC),
6.00%, 12/01/18 (a)

     3,400        3,850,670   

Sales Tax Receipts, 5.25%, 12/01/36

     2,940        3,236,646   

Sales Tax Receipts, 5.25%, 12/01/40

     1,500        1,638,525   

City of Chicago Illinois Wastewater Transmission, RB, 2nd Lien, 5.00%, 1/01/42

     2,985        3,202,278   

County of Cook Illinois Community College District No. 508, GO, City College of Chicago:

    

5.25%, 12/01/30

     1,270        1,445,222   

5.50%, 12/01/38

     1,980        2,250,329   

5.25%, 12/01/43

     5,500        6,109,345   

Railsplitter Tobacco Settlement Authority, RB:

    

5.50%, 6/01/23

     2,350        2,770,791   

6.00%, 6/01/28

     670        800,657   

State of Illinois, GO:

    

5.25%, 2/01/31

     1,495        1,638,296   

5.25%, 2/01/32

     2,320        2,535,853   
 

 

                
2    BLACKROCK MUNIHOLDINGS QUALITY FUND II, INC.    APRIL 30, 2016   


Schedule of Investments (continued)

  

BlackRock MuniHoldings Quality Fund II, Inc. (MUE)

 

Municipal Bonds   

Par  

(000)

    Value  

Illinois (continued)

    

State of Illinois, GO (continued):

    

5.50%, 7/01/33

   $ 1,000      $ 1,103,150   

5.50%, 7/01/38

     700        764,869   

State of Illinois, RB, Build Illinois, Series B, 5.25%, 6/15/28

     2,500        2,769,025   
    

 

 

 
               54,006,839   

Indiana — 0.9%

    

Indiana Finance Authority, RB, Private Activity Bond, Ohio River Bridges, Series A, AMT, 5.00%, 7/01/40

     460        502,495   

Indianapolis Local Public Improvement Bond Bank, Refunding RB, Waterworks Project, Series A (AGC), 5.50%, 1/01/38

     2,370        2,660,538   
    

 

 

 
               3,163,033   

Louisiana — 1.4%

    

Lake Charles Harbor & Terminal District, RB, Series B, AMT (AGM), 5.50%, 1/01/29

     2,225        2,677,965   

Tobacco Settlement Financing Corp., Refunding RB, Asset-Backed, Series A, 5.50%, 5/15/29

     2,020        2,218,546   
    

 

 

 
               4,896,511   

Massachusetts — 0.5%

    

Massachusetts HFA, Refunding RB, Series C, AMT, 5.35%, 12/01/42

     1,500        1,574,865   

Michigan — 2.3%

    

Hudsonville Public Schools, GO, School Building & Site (Q-SBLF), 5.25%, 5/01/41

     3,420        3,957,556   

Royal Oak Hospital Finance Authority Michigan, Refunding RB, William Beaumont Hospital, Series V, 8.25%, 9/01/18 (a)

     3,115        3,654,518   
    

 

 

 
               7,612,074   

Minnesota — 0.7%

    

City of Minneapolis Minnesota, Refunding RB, Fairview Health Services, Series B (AGC):

    

6.50%, 11/15/18 (a)

     305        348,200   
Municipal Bonds   

Par  

(000)

    Value  

Minnesota (continued)

    

City of Minneapolis Minnesota, Refunding RB, Fairview Health Services, Series B (AGC) (continued):

    

6.50%, 11/15/38

   $ 1,670      $ 1,881,589   
    

 

 

 
               2,229,789   

Mississippi — 1.3%

    

Mississippi Development Bank, RB, Jackson Water & Sewer System Project (AGM), 6.88%, 12/01/40

     2,405        3,235,374   

Mississippi State University Educational Building Corp., Refunding RB, Mississippi State University Improvement Project, 5.25%, 8/01/38

     1,000        1,202,730   
    

 

 

 
               4,438,104   

Nebraska — 0.8%

    

Public Power Generation Agency, Refunding RB, Whelan Energy Center, Series A (c):

    

5.00%, 1/01/38

     555        651,087   

5.00%, 1/01/39

     555        649,506   

5.00%, 1/01/40

     610        714,450   

5.00%, 1/01/41

     555        649,505   
    

 

 

 
               2,664,548   

Nevada — 2.7%

    

County of Clark Nevada, ARB, Las Vegas-McCarran International Airport, Series A (AGM), 5.25%, 7/01/39

     3,210        3,609,035   

County of Clark Nevada, GO, Limited Tax, 5.00%, 6/01/38

     5,000        5,391,300   
    

 

 

 
               9,000,335   

New Jersey — 5.2%

    

New Jersey EDA, RB, Private Activity Bond, The Goethals Bridge Replacement Project, AMT:

    

5.38%, 1/01/43

     1,940        2,184,188   

(AGM), 5.00%, 1/01/31

     1,355        1,526,977   

New Jersey Health Care Facilities Financing Authority, RB, Virtua Health, Series A (AGC), 5.50%, 7/01/38

     3,400        3,818,574   

New Jersey Transportation Trust Fund Authority, RB, Transportation System:

    

Series A, 5.50%, 6/15/41

     3,030        3,309,093   
 

 

                
   BLACKROCK MUNIHOLDINGS QUALITY FUND II, INC.    APRIL 30, 2016    3


Schedule of Investments (continued)

  

BlackRock MuniHoldings Quality Fund II, Inc. (MUE)

 

Municipal Bonds   

Par  

(000)

    Value  

New Jersey (continued)

    

New Jersey Transportation Trust Fund Authority, RB, Transportation System (continued):

    

Series A (AGC), 5.63%, 12/15/28

   $ 2,930      $ 3,289,657   

Series AA, 5.50%, 6/15/39

     3,040        3,363,912   
    

 

 

 
               17,492,401   

New York — 7.7%

    

City of New York New York Municipal Water Finance Authority, Refunding RB, 2nd General Resolution, Series EE:

    

Fiscal 2009, 5.25%, 6/15/40

     6,930        7,796,250   

Water & Sewer System, 5.38%, 6/15/43

     2,220        2,606,058   

Hudson Yards Infrastructure Corp., RB, Series A,
5.75%, 2/15/47

     940        1,105,186   

Metropolitan Transportation Authority, RB:

    

Series A, 5.25%, 11/15/38

     8,500        10,098,765   

Series A-1, 5.25%, 11/15/39

     1,550        1,865,022   

Port Authority of New York & New Jersey, Refunding ARB, Consolidated, 166th Series, 5.25%, 7/15/36

     2,000        2,335,660   
    

 

 

 
               25,806,941   

Ohio — 0.9%

    

State of Ohio Turnpike Commission, RB, Junior Lien, Infrastructure Projects, Series A-1, 5.25%, 2/15/31

     2,500        3,020,775   

Pennsylvania — 2.0%

    

Pennsylvania Turnpike Commission, RB, Series B,
5.00%, 12/01/45

     2,300        2,655,902   

Township of Bristol Pennsylvania School District, GO:

    

5.25%, 6/01/37

     2,500        2,901,750   

5.25%, 6/01/43

     1,100        1,266,815   
    

 

 

 
               6,824,467   

South Carolina — 6.3%

    

County of Charleston South Carolina, RB, Special Source, 5.25%, 12/01/38

     3,760        4,554,488   

County of Charleston South Carolina Airport District, ARB, Series A, AMT:

    

6.00%, 7/01/38

     2,940        3,496,866   

5.50%, 7/01/41

     2,500        2,881,350   
Municipal Bonds   

Par  

(000)

    Value  

South Carolina (continued)

    

South Carolina Ports Authority, RB, AMT, 5.25%, 7/01/50

   $ 1,870      $ 2,127,929   

South Carolina State Public Service Authority, Refunding RB:

    

Series C, 5.00%, 12/01/46

     1,000        1,143,090   

Series E, 5.25%, 12/01/55

     3,500        4,104,135   

State of South Carolina Public Service Authority, Refunding RB, Series A (a):

    

5.50%, 1/01/19

     200        225,028   

5.50%, 1/01/19

     2,300        2,587,822   
    

 

 

 
               21,120,708   

Tennessee — 1.0%

    

Metropolitan Nashville Airport Authority, ARB, Series B, AMT, 5.00%, 7/01/40

     3,000        3,449,310   

Texas — 19.2%

    

City of Beaumont Texas, GO, Certificates of Obligation, 5.25%, 3/01/37

     2,345        2,798,382   

City of Houston Texas Combined Utility System Revenue, Refunding RB, Combined 1st Lien, Series A (AGC):

    

6.00%, 5/15/19 (a)

     6,345        7,323,970   

6.00%, 11/15/35

     355        411,864   

County of Tarrant Texas Cultural Education Facilities Finance Corp., Refunding RB, Christus Health, Series A (AGC):

    

6.50%, 1/01/19 (a)

     620        710,037   

6.50%, 7/01/37

     2,380        2,676,477   

Dallas Area Rapid Transit, Refunding RB:

    

Senior Lien, 5.25%, 12/01/18 (a)

     2,605        2,900,459   

Senior Lien, 5.25%, 12/01/38

     1,950        2,157,812   

Series A, 5.00%, 12/01/48

     2,730        3,229,426   

Dallas-Fort Worth International Airport, ARB, Joint Improvement, AMT:

    

Series A, 5.00%, 11/01/38

     1,615        1,800,596   

Series H, 5.00%, 11/01/37

     1,810        2,021,643   

Lower Colorado River Authority, Refunding RB,
5.50%, 5/15/33

     2,155        2,605,761   

North Texas Tollway Authority, RB, Special Projects, Series A, 5.50%, 9/01/41

     7,000        8,277,360   

North Texas Tollway Authority, Refunding RB, 1st Tier System:

    

Series A, 5.63%, 1/01/18 (a)

     4,895        5,287,334   

Series A, 5.63%, 1/01/33

     6,080        6,509,248   
 

 

                
4    BLACKROCK MUNIHOLDINGS QUALITY FUND II, INC.    APRIL 30, 2016   


Schedule of Investments (continued)

  

BlackRock MuniHoldings Quality Fund II, Inc. (MUE)

 

Municipal Bonds   

Par  

(000)

    Value  

Texas (continued)

    

North Texas Tollway Authority, Refunding RB, 1st Tier System (continued):

    

Series K-2 (AGC), 6.00%, 1/01/19 (a)

   $ 1,000      $ 1,123,020   

Series S, 5.75%, 1/01/18 (a)

     855        925,298   

Series S, 5.75%, 1/01/18 (a)

     5,835        6,314,754   

Series SE, 5.75%, 1/01/40

     145        155,988   

Series SE, 5.75%, 1/01/40

     5,740        6,160,053   

Red River Education Financing Corp., RB, Texas Christian University Project, 5.25%, 3/15/38

     1,070        1,276,467   
    

 

 

 
               64,665,949   

Virginia — 1.1%

    

City of Lexington Virginia IDA, RB, Washington & Lee University, 5.00%, 1/01/43

     945        1,088,073   

Virginia Public School Authority, RB, Fluvanna County School Financing, 6.50%, 12/01/18 (a)

     2,195        2,517,775   
    

 

 

 
               3,605,848   

Washington — 1.5%

    

City of Seattle Washington Municipal Light & Power, Refunding RB, Series A, 5.25%, 2/01/36

     2,400        2,790,552   

State of Washington, GO, Various Purposes, Series B, 5.25%, 2/01/36

     1,865        2,182,460   
    

 

 

 
               4,973,012   
Total Municipal Bonds — 122.0%              409,813,701   
    
                  

Municipal Bonds Transferred to

Tender Option Bond Trusts (d)

              

Colorado — 3.0%

    

Colorado Health Facilities Authority, RB, Catholic Health, Series C-3 (AGM), 5.10%, 4/29/18 (a)

     9,410        10,225,753   

Connecticut — 1.1%

    

Connecticut State Health & Educational Facility Authority, Refunding RB, Trinity Health Credit Group, 5.00%, 12/01/45

     3,061        3,593,692   

Municipal Bonds Transferred to

Tender Option Bond Trusts (d)

  

Par  

(000)

    Value  

District of Columbia — 0.6%

    

District of Columbia Water & Sewer Authority, Refunding RB, Senior Lien, Series A,
6.00%, 10/01/18 (a)(e)

   $ 1,699      $ 1,912,625   

Florida — 4.2%

    

County of Miami-Dade Florida, GO, Building Better Communities Program, Series B-1,
6.00%, 7/01/18 (a)

     12,500        13,969,000   

Illinois — 5.6%

    

City of Chicago Illinois, ARB, O’Hare International Airport, Series A (AGM), 5.00%, 1/01/38

     5,000        5,278,450   

City of Chicago Illinois, Refunding RB, Waterworks, 2nd Lien (AGM), 5.25%, 11/01/33

     3,967        4,213,591   

State of Illinois Toll Highway Authority, RB, Senior:

    

Priority, Series A, 5.00%, 1/01/40

     1,980        2,313,075   

Series B, 5.00%, 1/01/40

     6,148        7,195,679   
    

 

 

 
               19,000,795   

Kentucky — 0.8%

    

Kentucky State Property & Building Commission, Refunding RB, Project No. 93 (AGC),
5.25%, 2/01/27

     2,304        2,558,570   

Nevada — 6.1%

    

County of Clark Nevada Water Reclamation District, GO:

    

Limited Tax, 6.00%, 7/01/18 (a)

     10,000        11,131,300   

Series B, 5.50%, 7/01/29

     8,247        9,368,983   
    

 

 

 
               20,500,283   

New Jersey — 1.7%

    

New Jersey Housing & Mortgage Finance Agency, RB, S/F Housing, Series CC, 5.25%, 10/01/29

     3,859        4,106,619   
 

 

                
   BLACKROCK MUNIHOLDINGS QUALITY FUND II, INC.    APRIL 30, 2016    5


Schedule of Investments (continued)

  

BlackRock MuniHoldings Quality Fund II, Inc. (MUE)

 

Municipal Bonds Transferred to

Tender Option Bond Trusts (d)

  

Par  

(000)

    Value  

New Jersey (continued)

    

New Jersey Transportation Trust Fund Authority, RB, Transportation System, Series B, 5.25%, 6/15/36 (e)

   $ 1,500      $ 1,615,257   
    

 

 

 
               5,721,876   

New York — 7.0%

    

City of New York New York Municipal Water Finance Authority, Refunding RB, Water & Sewer System, 2nd General Resolution, Series FF, 5.00%, 6/15/45

     5,958        6,957,835   

City of New York New York Transitional Finance Authority, BARB, Fiscal 2009, Series S-3, 5.25%, 1/15/39

     2,300        2,545,501   

New York Liberty Development Corp., RB, 1 World Trade Center Port Authority Consolidated Bonds,
5.25%, 12/15/43

     7,515        8,927,334   

New York Liberty Development Corp., Refunding RB, 4 World Trade Center Project, 5.75%, 11/15/51 (e)

     4,400        5,251,904   
    

 

 

 
               23,682,574   

Texas — 1.5%

    

County of Tarrant Texas Cultural Education Facilities Finance Corp., RB, Baylor Health Care System Project, Series A, 5.00%, 11/15/38

     4,296        4,929,455   

Municipal Bonds Transferred to

Tender Option Bond Trusts (d)

  

Par  

(000)

    Value  

Utah — 0.8%

    

City of Riverton Utah, RB, IHC Health Services, Inc., 5.00%, 8/15/41

   $ 2,504      $ 2,738,430   
Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 32.4%
             108,833,053   
Total Long-Term Investments
(Cost — $464,429,125) — 154.4%
             518,646,754   
    
                  
Short-Term Securities    Shares         

BlackRock Liquidity Funds, MuniCash,
0.19% (f)(g)

     2,599,513        2,599,513   
Total Short-Term Securities
(Cost — $2,599,513) — 0.8%
             2,599,513   
Total Investments (Cost — $467,028,638*) — 155.2%        521,246,267   
Other Assets Less Liabilities — 0.9%        3,126,502   

Liability for TOB Trust Certificates, Including Interest Expense and Fees Payable — (17.1)%

   

    (57,587,714
VMTP Shares, at Liquidation Value — (39.0)%        (131,000,000
    

 

 

 
Net Assets Applicable to Common Shares — 100.0%      $ 335,785,055   
    

 

 

 

 

*   As of April 30, 2016, gross unrealized appreciation and depreciation based on cost for federal income tax purposes were as follows:

 

Tax cost

  $ 410,075,761   
 

 

 

 

Gross unrealized appreciation

  $ 54,221,231   

Gross unrealized depreciation

    (601,482
 

 

 

 

Net unrealized appreciation

  $ 53,619,749   
 

 

 

 
 
Notes to Schedule of Investments

 

(a)   U.S. Government securities, held in escrow, are used to pay interest on this security, as well as to retire the bond in full at the date indicated, typically at a premium to par.

 

(b)   Variable rate security. Rate as of period end.

 

(c)   When-issued security.

 

(d)   Represent bonds transferred to a TOB Trust in exchange of cash and residual certificates received by the Fund. These bonds serve as collateral in a secured borrowing.

 

(e)   All or a portion of security is subject to a recourse agreement. The aggregate maximum potential amount the Fund could ultimately be required to pay under the agreements, which expire between October 1, 2016 to November 15, 2019, is $4,822,883.

 

(f)   During the period ended April 30, 2016, investments in issuers considered to be affiliates of the Fund for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:

 

                
6    BLACKROCK MUNIHOLDINGS QUALITY FUND II, INC.    APRIL 30, 2016   


Schedule of Investments (continued)

  

BlackRock MuniHoldings Quality Fund II, Inc. (MUE)

 

 

Affiliate      Shares Held
at July 31,
2015
      

Net

Activity

       Shares Held
at April 30,
2016
       Income  

BlackRock Liquidity Funds, MuniCash

                 2,599,513           2,599,513         $ 813   

FFI Institutional Tax-Exempt Fund

       5,506,208           (5,506,208                $ 390   

 

(g)   Current yield as of period end.

 

Derivative Financial Instruments Outstanding as of Period End

Futures Contracts

 

Contracts
Short
    Issue   Expiration  

Notional

Value

   

Unrealized

Appreciation

 
  (15   5-Year U.S. Treasury Note   June 2016   USD      1,813,711      $ 6,309   
  (52   10-Year U.S. Treasury Note   June 2016   USD 6,763,250        33,835   
  (15   Long U.S. Treasury Bond   June 2016   USD 2,449,688        34,769   
  (2   Ultra U.S. Treasury Bond   June 2016   USD  342,687        5,660   
  Total            $ 80,573   
       

 

 

 

 

Portfolio Abbreviations

 

AGC    Assured Guarantee Corp.
AGM    Assured Guaranty Municipal Corp.
AMT    Alternative Minimum Tax (subject to)
ARB    Airport Revenue Bonds
BARB    Building Aid Revenue Bonds
COP    Certificates of Participation
EDA    Economic Development Authority
GARB    General Airport Revenue Bonds
GO    General Obligation Bonds
HFA    Housing Finance Agency
IDA    Industrial Development Authority
IDB    Industrial Development Board
LRB    Lease Revenue Bonds
NPFGC    National Public Finance Guarantee Corp.
RB    Revenue Bonds

 

                
   BLACKROCK MUNIHOLDINGS QUALITY FUND II, INC.    APRIL 30, 2016    7


Schedule of Investments (concluded)

  

BlackRock MuniHoldings Quality Fund II, Inc. (MUE)

 

Fair Value Hierarchy as of Period End

Various inputs are used in determining the fair value of investments and derivative financial instruments. These inputs to valuation techniques are categorized into a fair value hierarchy consisting of three broad levels for financial reporting purposes as follows:

 

   

Level 1 — unadjusted price quotations in active markets/exchanges for identical assets or liabilities that Fund has the ability to access

 

   

Level 2 — other observable inputs (including, but not limited to, quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs)

 

   

Level 3 — unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including Fund’s own assumptions used in determining the fair value of investments and derivative financial instruments)

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the fair value hierarchy classification is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The significant unobservable inputs used by the Global Valuation Committee in determining the price for Fair Valued Investments are typically categorized as level 3.

Changes in valuation techniques may result in transfers into or out of an assigned level within the hierarchy. In accordance with the Fund’s policy, transfers between different levels of the fair value hierarchy are deemed to have occurred as of the beginning of the reporting period. The categorization of a value determined for investments and derivative financial instruments is based on the pricing transparency of the investments and derivative financial instruments and is not necessarily an indication of the risks associated with investing in those securities. For information about the Fund’s policy regarding valuation of investments, refer to the Fund’s most recent financial statements as contained in its annual report.

The following tables summarize the Fund’s investments and derivative financial instruments categorized in the disclosure hierarchy:

 

     Level 1        Level 2        Level 3      Total  

Assets:

                
Investments:                 

Long-Term Investments1

            $ 518,646,754              $ 518,646,754   

Short-Term Securities

  $ 2,599,513                          2,599,513   
 

 

 

 

Total Investments

  $ 2,599,513         $ 518,646,754              $ 521,246,267   
 

 

 

 
Derivative Financial Instruments2                 

Assets:

                

Interest rate contracts

  $ 80,573                        $ 80,573   

1    See above Schedule of Investments for values in each state or political subdivision.

 

2    Derivative financial instruments are futures contracts. Futures contracts are valued at the unrealized appreciation (depreciation) on the instrument.

 

The Fund may hold assets and/or liabilities in which the fair value approximates the carrying amount for financial reporting purposes. As of period end, such assets and/or liabilities are categorized within the disclosure hierarchy as follows:

 

       

       

   

     Level 1        Level 2        Level 3      Total  

Assets:

                

Cash pledged for futures contracts

  $ 208,800                        $ 208,800   

Liabilities:

                

Bank overdraft

            $ (150,435             (150,435

TOB Trust Certificates

              (57,551,836             (57,551,836

VMTP Shares

              (131,000,000             (131,000,000
 

 

 

 

Total

  $ 208,800         $ (188,702,271           $ (188,493,471
 

 

 

 

During the period ended April 30, 2016, there were no transfers between levels.

 

 

                
8    BLACKROCK MUNIHOLDINGS QUALITY FUND II, INC.    APRIL 30, 2016   


Item 2 –   Controls and Procedures
2(a) –   The registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”)) are effective as of a date within 90 days of the filing of this report based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended.
2(b) –   There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the registrant’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.
Item 3 –   Exhibits
  Certifications – Attached hereto


Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

BlackRock MuniHoldings Quality Fund II, Inc.
By:   /s/ John M. Perlowski                    
  John M. Perlowski
  Chief Executive Officer (principal executive officer) of
  BlackRock MuniHoldings Quality Fund II, Inc.
Date:   June 22, 2016

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

By:   /s/ John M. Perlowski                    
  John M. Perlowski
  Chief Executive Officer (principal executive officer) of
  BlackRock MuniHoldings Quality Fund II, Inc.
Date:   June 22, 2016
By:   /s/ Neal J. Andrews                      
  Neal J. Andrews
  Chief Financial Officer (principal financial officer) of
  BlackRock MuniHoldings Quality Fund II, Inc.
Date:   June 22, 2016