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: 07/31/2018

Date of reporting period: 04/30/2018


Item 1 – Schedule of Investments


Schedule of Investments  (unaudited)

April 30, 2018

  

BlackRock MuniHoldings Quality Fund II, Inc. (MUE)

(Percentages shown are based on Net Assets)

 

Security   Par
(000)
    Value  

Municipal Bonds — 127.7%

 

Alabama — 2.1%  

City of Birmingham Alabama Special Care Facilities Financing Authority, RB, Children’s Hospital (AGC), 6.00%, 06/01/19(a)

  $   5,225     $   5,455,266  

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

    940       1,039,123  
   

 

 

 
      6,494,389  
California — 22.9%  

California Educational Facilities Authority, RB, University of Southern California, Series A, 5.25%, 10/01/18(a)

    5,050       5,124,588  

California Health Facilities Financing Authority, RB, Sutter Health:

   

Series A, 4.00%, 11/15/42

    210       213,163  

Series B, 6.00%, 08/15/20(a)

    2,865       3,128,494  

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

    465       466,460  

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

   

2nd, 5.50%, 05/01/28

    1,800       2,033,244  

2nd, 5.25%, 05/01/33

    1,410       1,562,421  

5.00%, 05/01/44

    1,860       2,028,665  

City of San Jose California, Refunding ARB, Norman Y Mineta San Jose International Airport SJC, Series A-1, AMT,
5.50%, 03/01/30

    4,045       4,369,854  

City of Sunnyvale California, Refunding RB, 5.25%, 04/01/20(a)

    2,800       2,980,348  

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

    4,500       5,149,305  

County of Sacramento California, ARB, Senior Series A (AGC), 5.50%, 07/01/18(a)

    3,500       3,521,735  

County of Ventura California Community College District, GO, Election of 2002, Series C, 5.50%, 08/01/18(a)

    3,175       3,205,067  

Emery Unified School District, GO, Election of 2010, Series A (AGM), 5.50%, 08/01/21(a)

    1,875       2,082,769  

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

    2,445       2,840,014  
Security  

Par

(000)

    Value  
California (continued)  

Los Angeles Community College District California, GO, Election of 2008, Series C,
5.25%, 08/01/20(a)

  $   2,000     $ 2,150,320  

Oceanside Unified School District, GO, Series A (AGC), 5.25%, 08/01/33

    1,675       1,688,836  

Redondo Beach Unified School District, GO, Election of 2008, Series E, 5.50%, 08/01/21(a)

    2,670       2,970,322  

Regents of the University of California Medical Center Pooled Revenue, Refunding RB,
Series J:

   

5.25%, 05/15/23(a)

    5,905       6,783,369  

5.25%, 05/15/38

    1,675       1,890,840  

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

   

5.50%, 11/01/30

    5,000       5,754,900  

5.50%, 11/01/31

    3,130       3,597,372  

5.50%, 11/01/33

    3,000       3,433,050  

State of California Public Works Board, RB, Department of Corrections & Rehabilitation, Series F, 5.25%, 09/01/33

    1,260       1,421,141  

Township of Washington California Health Care District, GO, Election of 2004, Series B,
5.50%, 08/01/40

    940       1,083,331  
   

 

 

 
      69,479,608  
Colorado — 2.1%  

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

   

5.50%, 11/15/28

    1,500       1,689,135  

5.50%, 11/15/30

    565       632,574  

5.50%, 11/15/31

    675       753,907  

Colorado Health Facilities Authority, RB, Hospital, NCMC, Inc. Project, Series B (AGM),
6.00%, 05/15/19(a)

    3,300       3,436,389  
   

 

 

 
      6,512,005  
Connecticut — 1.0%  

State of Connecticut, GO, Series A,
5.00%, 04/15/38

    1,690       1,849,401  

State of Connecticut Health & Educational Facility Authority, Refunding RB, Sacred Heart University Issue, Series I-1, 5.00%, 07/01/42

    1,015       1,120,032  
   

 

 

 
      2,969,433  
 

 

 

   1


Schedule of Investments  (unaudited) (continued)

April 30, 2018

  

BlackRock MuniHoldings Quality Fund II, Inc. (MUE)

(Percentages shown are based on Net Assets)

 

Security   Par
(000)
    Value  
Florida — 20.7%  

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

  $ 405     $ 454,949  

County of Broward Florida Airport System Revenue, ARB, Series A, AMT:

   

5.13%, 10/01/38

    5,665       6,226,628  

5.00%, 10/01/45

    1,440       1,575,994  

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

    2,995       3,355,388  

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

    2,500       2,699,825  

County of Lee Florida HFA, RB, S/F Housing, Multi-County Program, Series A-2, AMT (Ginnie Mae, Fannie Mae & Freddie Mac), 6.00%, 09/01/40

    215       217,100  

County of Miami-Dade Florida, RB, Seaport Department:

   

Series A, 5.38%, 10/01/33

    1,765       1,959,944  

Series A, 5.50%, 10/01/42

    3,000       3,319,980  

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

    800       925,544  

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

    1,060       1,212,089  

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

    3,130       3,516,023  

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

   

Miami International Airport (AGM),
5.25%, 10/01/18(a)

    4,510       4,571,697  

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

    100       101,226  

Miami International Airport, Series A (AGM),
5.50%, 10/01/18(a)

    4,180       4,241,446  

Series A, 5.00%, 10/01/31

    5,155       5,589,206  

Series A, 5.00%, 10/01/32

    5,000       5,414,700  

County of Orange Florida School Board, COP, Series A (AGC), 5.50%, 08/01/19(a)

    7,600       7,942,152  

Reedy Creek Florida Improvement District, GO, Series A, 5.25%, 06/01/32

    1,805       2,037,646  

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

    6,965       7,679,191  
   

 

 

 
      63,040,728  
Hawaii — 1.7%  

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

   

5.25%, 08/01/25

    740       822,525  

5.25%, 08/01/26

    1,205       1,332,585  
Security   Par
(000)
    Value  
Hawaii (continued)  

State of Hawaii, Department of Transportation, RB, Series A, AMT, 5.00%, 07/01/45

  $   2,805     $ 3,089,988  
   

 

 

 
      5,245,098  
Illinois — 15.2%  

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

   

5.00%, 01/01/41

    1,140       1,225,899  

5.50%, 01/01/28

    1,000       1,108,010  

5.50%, 01/01/29

    1,500       1,658,580  

5.38%, 01/01/33

    2,000       2,184,260  

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

   

3rd Lien, Series A, 5.75%, 01/01/21(a)

    1,680       1,837,080  

3rd Lien, Series A, 5.75%, 01/01/39

    320       346,886  

3rd Lien, Series C, 6.50%, 01/01/21(a)

    9,085       10,097,523  

Senior Lien, Series D, AMT, 5.00%, 01/01/42

    735       799,555  

City of Chicago Illinois Transit Authority, RB:

   

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

    3,400       3,483,232  

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

    2,940       3,146,388  

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

    1,500       1,599,540  

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

    2,985       3,125,026  

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

   

5.25%, 12/01/30

    1,270       1,335,037  

5.50%, 12/01/38

    1,205       1,265,660  

5.25%, 12/01/43

    2,960       3,066,886  

Illinois Finance Authority, Refunding RB, Presence Health Network, Series C, 5.00%, 02/15/41

    975       1,068,522  

Railsplitter Tobacco Settlement Authority, RB(a):

   

5.50%, 06/01/21

    2,350       2,584,883  

6.00%, 06/01/21

    670       746,903  

State of Illinois, GO:

   

5.25%, 02/01/31

    1,495       1,535,873  

5.25%, 02/01/32

    2,320       2,378,742  

5.50%, 07/01/33

    1,000       1,034,380  

5.50%, 07/01/38

    700       720,517  
   

 

 

 
      46,349,382  
 

 

 

2   


Schedule of Investments  (unaudited) (continued)

April 30, 2018

  

BlackRock MuniHoldings Quality Fund II, Inc. (MUE)

(Percentages shown are based on Net Assets)

 

Security  

Par

(000)

    Value  
Indiana — 1.0%  

Indianapolis Local Public Improvement Bond Bank, Refunding RB, Waterworks Project, Series A (AGC):

   

5.50%, 01/01/19(a)

  $ 465     $ 476,481  

5.50%, 01/01/38

    1,905       1,947,805  

State of Indiana Finance Authority, RB, Private Activity Bond, Ohio River Bridges, Series A, AMT, 5.00%, 07/01/40

    460       490,972  
   

 

 

 
      2,915,258  
Louisiana — 2.0%  

City of New Orleans Aviation Board, ARB, General Airport North Terminal Project, Series B, AMT, 5.00%, 01/01/48

    1,275       1,391,905  

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

    2,225       2,483,189  

Tobacco Settlement Financing Corp., Refunding RB, Asset-Backed, Series A, 5.50%, 05/15/29

    2,020       2,093,609  
   

 

 

 
      5,968,703  
Maryland — 2.7%  

County of Howard Maryland Housing Commission, RB, M/F Housing, Woodfield Oxford Square Apartments, 5.00%, 12/01/42

    2,450       2,713,228  

Maryland Stadium Authority, RB, Construction and Revitalization Program, 5.00%, 05/01/34

    4,780       5,484,715  
   

 

 

 
      8,197,943  
Massachusetts — 1.1%  

Massachusetts Development Finance Agency, RB, Emerson College Issue, Series A:

   

5.00%, 01/01/47

    420       452,710  

5.25%, 01/01/42

    940       1,033,943  

Massachusetts Development Finance Agency, Refunding RB, Emerson College, Series A,
5.00%, 01/01/40

    1,025       1,118,459  

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

    595       605,758  
   

 

 

 
      3,210,870  
Security  

Par

(000)

    Value  
Michigan — 2.3%  

Hudsonville Michigan Public Schools, GO, School Building & Site (Q-SBLF), 5.25%, 05/01/21(a)

  $   3,420     $   3,738,641  

Royal Oak Hospital Finance Authority Michigan, Refunding RB, William Beaumont Hospital, Series V, 8.25%, 09/01/18(a)

    3,115       3,180,976  
   

 

 

 
      6,919,617  
Minnesota — 1.0%  

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

   

6.50%, 11/15/18(a)

    305       312,662  

6.50%, 11/15/38

    1,670       1,711,583  

County of St. Paul Minnesota Housing & Redevelopment Authority, Refunding RB, Fairview Health Services, Series A,
4.00%, 11/15/43

    985       1,002,996  
   

 

 

 
      3,027,241  
Mississippi — 1.3%  

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

    2,225       2,678,878  

Mississippi State University Educational Building Corp., Refunding RB, Mississippi State University Improvement Project, 5.25%, 08/01/23(a)

    1,000       1,146,590  
   

 

 

 
      3,825,468  
Montana — 0.3%  

Montana State Board of Housing, RB, S/F,
Series B-2:

   

3.38%, 12/01/37

    420       407,946  

3.50%, 12/01/42

    185       179,931  

3.60%, 12/01/47

    280       271,550  
   

 

 

 
      859,427  
Nevada — 2.6%  

City of Carson City Nevada, Refunding RB, Carson Tahoe Regional Healthcare Project,
5.00%, 09/01/42

    580       628,053  

County of Clark Nevada, ARB, Las Vegas-McCarran International Airport, Series A (AGM), 5.25%, 07/01/39

    3,210       3,372,233  

County of Clark Nevada, GO:

   

Limited Tax, 5.00%, 06/01/18(a)

    1,500       1,503,960  

Stadium Improvement, Series A,
5.00%, 06/01/36(b)

    2,065       2,377,290  
   

 

 

 
      7,881,536  
 

 

 

   3


Schedule of Investments  (unaudited) (continued)

April 30, 2018

  

BlackRock MuniHoldings Quality Fund II, Inc. (MUE)

(Percentages shown are based on Net Assets)

 

Security  

Par

(000)

    Value  
New Jersey — 5.7%  

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

   

5.38%, 01/01/43

  $   1,940     $ 2,113,882  

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

    1,355       1,495,148  

New Jersey Health Care Facilities Financing Authority, RB, Virtua Health, Series A (AGC), 5.50%, 07/01/38

    3,400       3,534,130  

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

   

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

    2,930       2,997,185  

Series AA, 5.50%, 06/15/39

    3,040       3,247,601  

Tobacco Settlement Financing Corp., Refunding RB:

   

Series A, 5.25%, 06/01/46

    2,055       2,282,345  

Sub-Series B, 5.00%, 06/01/46

    1,545       1,621,045  
   

 

 

 
      17,291,336  
New York — 9.5%  

City of New York New York, GO, Sub-Series F-1, 5.00%, 04/01/36

    3,590       4,138,444  

City of New York New York Municipal Water Finance Authority, Refunding RB, Water & Sewer System, 2nd General Resolution,
Series EE, 5.38%, 06/15/43

    2,220       2,401,951  

City of New York New York Water & Sewer System, Refunding RB, 2nd General Resolution, Fiscal 2009, Series EE, 5.25%, 06/15/40

    6,930       7,173,243  

Hudson Yards Infrastructure Corp., RB, Senior, Fiscal 2012:

   

5.75%, 02/15/21(a)

    580       638,470  

5.75%, 02/15/47

    360       389,261  

Metropolitan Transportation Authority, RB:

   

Series A, 5.25%, 11/15/21(a)

    8,500       9,432,365  

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

    1,550       1,746,028  

Port Authority of New York & New Jersey, Refunding ARB, Consolidated, 166th Series, 5.25%, 07/15/36

    2,000       2,156,960  

TSASC, Inc., Refunding RB, Series A,
5.00%, 06/01/41

    895       961,857  
   

 

 

 
      29,038,579  
Security  

Par

(000)

    Value  
Ohio — 0.9%  

State of Ohio Turnpike Commission, RB, Junior Lien, Infrastructure Projects, Series A-1,
5.25%, 02/15/31

  $   2,500     $ 2,773,650  
   

 

 

 
Oklahoma — 0.6%  

Oklahoma Development Finance Authority, RB, Provident Oklahoma Education Resources, Inc., Cross Village Student Housing Project, Series A, 5.25%, 08/01/57

    1,640       1,748,699  
   

 

 

 
Pennsylvania — 4.0%  

County of Montgomery Higher Education & Health Authority, Refunding RB, Thomas Jefferson University, Series A, 5.00%, 09/01/48(b)

    1,690       1,866,385  

County of Westmoreland Pennsylvania Municipal Authority, Refunding RB, (BAM), 5.00%, 08/15/36

    2,215       2,502,618  

Pennsylvania Housing Finance Agency, RB, S/F, Series 125B, 3.65%, 10/01/42

    3,390       3,293,690  

Pennsylvania Turnpike Commission, RB, Sub-Series B-1, 5.25%, 06/01/47

    500       557,255  

Township of Bristol Pennsylvania School District, GO:

   

5.25%, 06/01/37

    2,500       2,749,575  

5.25%, 06/01/43

    1,100       1,202,773  
   

 

 

 
      12,172,296  
South Carolina — 5.7%  

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

    3,760       4,278,579  

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

   

6.00%, 07/01/38

    2,940       3,318,378  

5.50%, 07/01/41

    2,500       2,759,050  

State of South Carolina Ports Authority, RB, AMT,
5.25%, 07/01/50

    1,870       2,065,714  

State of South Carolina Public Service Authority, Refunding RB:

   

Series C, 5.00%, 12/01/46

    1,000       1,069,260  

Series E, 5.25%, 12/01/55

    3,500       3,807,405  
   

 

 

 
      17,298,386  
 

 

 

4   


Schedule of Investments  (unaudited) (continued)

April 30, 2018

  

BlackRock MuniHoldings Quality Fund II, Inc. (MUE)

(Percentages shown are based on Net Assets)

 

Security  

Par

(000)

    Value  
Tennessee — 1.1%  

Metropolitan Nashville Airport Authority, ARB, Series B, AMT, 5.00%, 07/01/40

  $   3,000     $ 3,314,820  
   

 

 

 
Texas — 11.0%  

City of Beaumont Texas, GO, Certificates of Obligation,
5.25%, 03/01/37

    2,345       2,603,911  

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

   

6.00%, 05/15/19(a)

    6,345       6,610,602  

6.00%, 11/15/35

    355       370,233  

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

   

6.50%, 01/01/19(a)

    620       638,960  

6.50%, 07/01/37

    2,380       2,447,140  

Dallas Texas Area Rapid Transit, Refunding RB, Senior Lien(a):

   

5.25%, 12/01/18

    2,605       2,657,543  

5.25%, 12/01/18

    1,950       1,989,331  

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

   

Series A, 5.00%, 11/01/38

    1,615       1,697,333  

Series H, 5.00%, 11/01/37

    1,810       1,933,677  

Lower Colorado River Authority, Refunding RB, 5.50%, 05/15/33

    2,155       2,437,326  

North Texas Tollway Authority, RB, Special Projects, Series A, 5.50%, 09/01/21(a)

    5,480       6,064,990  

North Texas Tollway Authority, Refunding RB:

   

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

    1,000       1,027,630  

1st Tier-Series A, 5.00%, 01/01/43

    1,515       1,705,193  
Security  

Par

(000)

    Value  
Texas (continued)  

Red River Texas Education Financing Corp., RB, Texas Christian University Project,
5.25%, 03/15/38

  $ 1,070     $ 1,188,524  
   

 

 

 
      33,372,393  
Vermont — 0.9%  

University of Vermont & State Agricultural College, Refunding RB, 5.00%, 10/01/43

    2,535       2,857,173  
   

 

 

 
Virginia — 2.5%  

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

    945       1,023,738  

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

    2,195       2,255,055  

Virginia Small Business Financing Authority, RB, Transform 66 P3 Project, AMT, 5.00%, 12/31/49

    4,000       4,313,640  
   

 

 

 
      7,592,433  
Washington — 5.6%  

City of Seattle Washington Municipal Light & Power, Refunding RB, Series A,
5.25%, 02/01/21(a)

    2,400       2,606,064  

Port of Seattle Washington, ARB, Intermediate Lien, Series C, AMT:

   

5.00%, 05/01/37

    2,485       2,801,241  

5.00%, 05/01/42

    660       738,547  

State of Washington, GO:

   

Series C, 5.00%, 02/01/36

    7,565       8,758,908  

Various Purposes, Series B,
5.25%, 02/01/21(a)

    1,865       2,025,129  
   

 

 

 
      16,929,889  
Wyoming — 0.2%  

State of Wyoming Municipal Power Agency, Inc., Refunding RB, Series A (BAM),
5.00%, 01/01/42

    570       633,846  
   

 

 

 

Total Municipal Bonds — 127.7%
(Cost — $368,266,177)

 

    387,920,206  
 

 

 

   5


Schedule of Investments  (unaudited) (continued)

April 30, 2018

  

BlackRock MuniHoldings Quality Fund II, Inc. (MUE)

(Percentages shown are based on Net Assets)

 

Security  

Par

(000)

     Value  

Municipal Bonds Transferred to Tender Option Bond Trusts(c)

 

California — 2.8%  

Sacramento Area Flood Control Agency, Refunding, Consolidated Capital Assessment District No. 2 Bonds, 5.00%, 10/01/47

  $ 7,499      $ 8,510,837  
    

 

 

 
Connecticut — 1.1%  

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

    3,061        3,402,452  
    

 

 

 

District of Columbia — 0.6%

 

Utilities — 0.6%  

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

    1,699        1,727,865  
    

 

 

 
Florida — 4.1%  

County of Miami-Dade Florida, GO, Building Better Communities Program, Series B-1, 6.00%, 07/01/18(a)

    12,500        12,587,562  
    

 

 

 
Illinois — 4.3%  

City of Chicago Illinois Waterworks Revenue, Refunding RB, Water Revenue Project (AGM), 2nd Lien:

    

2017, 5.25%, 11/01/18(a)

    2,628        2,668,510  

2017, 5.25%, 11/01/33

    763        774,434  

5.25%, 11/01/18(a)

    576        584,692  

State of Illinois Toll Highway Authority, RB:

    

Series A, 5.00%, 01/01/40

    1,980        2,181,484  

Series B, 5.00%, 01/01/40

    6,148        6,818,540  
    

 

 

 
       13,027,660  

Maryland — 0.9%

 

Utilities — 0.9%  

City of Baltimore Maryland Water Utility Fund, RB, Wastewater Project,
Series A, 5.00%, 07/01/46

    2,499        2,796,020  
    

 

 

 
Nevada — 6.1%  

County of Clark Nevada Water Reclamation District, GO(a):

    

Limited Tax, 6.00%, 07/01/18

    10,000        10,070,050  

Series B, 5.50%, 07/01/19

    8,247        8,583,556  
    

 

 

 
       18,653,606  
Security  

Par

(000)

     Value  
New Jersey — 1.7%  

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

  $ 3,399      $ 3,456,222  

New Jersey Transportation Trust Fund Authority, RB, Transportation System, Series B, 5.25%, 06/15/36(d)

    1,500        1,560,125  
    

 

 

 
       5,016,347  
New York — 7.2%  

City of New York New York Municipal Water Finance Authority, Refunding RB, Series FF, 5.00%, 06/15/45

    5,958        6,461,158  

City of New York New York Transitional Finance Authority, BARB, Fiscal 2009, Series S-3, 5.25%, 01/15/39

    2,300        2,351,347  

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

    7,515        8,187,232  

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

    4,400        4,868,840  
    

 

 

 
       21,868,577  
Pennsylvania — 0.7%  

County of Westmoreland Pennsylvania Municipal Authority, Refunding RB, (BAM), 5.00%, 08/15/38

    1,963        2,183,403  
    

 

 

 
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        4,681,335  
    

 

 

 
Utah — 0.9%  

City of Riverton Utah, RB, IHC Health Services, Inc., 5.00%, 08/15/41

    2,504        2,597,232  
    

 

 

 
 

 

 

6   


Schedule of Investments  (unaudited) (continued)

April 30, 2018

  

BlackRock MuniHoldings Quality Fund II, Inc. (MUE)

(Percentages shown are based on Net Assets)

 

Security  

Par

(000)

    Value  
Virginia — 1.4%  

County of Fairfax Virginia EDA, RB, Metrorail Parking System Project, 5.00%, 04/01/47(d)

  $ 3,720     $ 4,213,514  
   

 

 

 

Total Municipal Bonds Transferred to Tender Option Bond Trusts — 33.3%
(Cost — $99,097,632)

 

    101,266,410  
   

 

 

 

Total Long-Term Investments — 161.0%
(Cost — $467,363,809)

 

    489,186,616  
   

 

 

 

 

Security

  Shares     Value  

Short-Term Securities — 0.8%

 

BlackRock Liquidity Funds, MuniCash, Institutional Class, 1.48%(e)(f)

    2,409,025     $ 2,409,025  
   

 

 

 

Total Short Term Securities — 0.8%
(Cost — $2,409,025)

 

    2,409,025  
 

 

 

 

Total Investments — 161.8%
(Cost — $469,772,834)

 

    491,595,641  

Other Assets Less Liabilities — 0.5%

 

    1,550,237  

Liability for TOB Trust Certificates, Including Interest Expense and Fees Payable — (19.2)%

 

    (58,242,606

VMTP Shares at Liquidation Value — (43.1)%

 

    (131,000,000
   

 

 

 

Net Assets Applicable to Common Shares — 100.0%

 

  $ 303,903,272  
   

 

 

 
 
(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) When-issued security.
(c)  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.
(d) 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, 2018 to October 1, 2024, is $6,783,458
(e)  Annualized 7-day yield as of period end.
(f)  During the period ended April 30, 2018, investments in issuers considered to be an affiliate of the Fund for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:

 

Affiliated   

Shares

Held at

07/31/17

    

Net

Activity

    

Shares

Held at

04/30/18

    

Value at

04/30/18

     Income     

Net

Realized

Gain (Loss)(a)

    

Change in
Unrealized

Appreciation
(Depreciation)

 

BlackRock Liquidity Funds, MuniCash, Institutional Class

     327,393        2,081,632        2,409,025      $ 2,409,025      $ 14,968      $ 1,671      $  
           

 

 

    

 

 

    

 

 

    

 

 

 

 

(a) Includes net capital gain distributions, if applicable.

Derivative Financial Instruments Outstanding as of Period End

Futures Contracts

 

Description   

Number of

Contracts

      

Expiration

Date

      

Notional

Amount (000)

      

Value /

Unrealized

Appreciation
(Depreciation)

 

Short Contracts:

                 

10-Year U.S. Treasury Note

     49          06/20/18        $ 5,862        $ 39,185  

Long U.S. Treasury Bond

     48          06/20/18          6,905          32,182  

5-Year U.S. Treasury Note

     31          06/29/18          3,519          20,748  
                 

 

 

 
                  $ 92,115  
                 

 

 

 

 

 

   7


Schedule of Investments  (unaudited) (continued)

April 30, 2018

  

BlackRock MuniHoldings Quality Fund II, Inc. (MUE)

 

Portfolio Abbreviations

 

AGC    Assured Guarantee Corp.
AGM    Assured Guaranty Municipal Corp.
AMT    Alternative Minimum Tax (subject to)
ARB    Airport Revenue Bonds
BAM    Build America Mutual Assurance Co.
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
M/F    Multi-Family
RB    Revenue Bonds
S/F    Single-Family

 

 

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 the 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 the 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. Investments classified within Level 3 have significant unobservable inputs used by the BlackRock Global Valuation Methodologies Committee (the “Global Valuation Committee”) in determining the price for Fair Valued Investments. Level 3 investments include equity or debt issued by privately held companies or funds. There may not be a secondary market, and/or there are a limited number of investors. Level 3 investments may also be adjusted to reflect illiquidity and/or non-transferability, with the amount of such discount estimated by the Global Valuation Committee in the absence of market information.

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 instruments is based on the pricing transparency of the investments 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 and derivative financial instruments, refer to the Fund’s most recent financial statements as contained in its semi-annual report.

As of April 30, 2018, 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 Investments(a)

   $        $ 489,186,616        $        $ 489,186,616  

Short-Term Securities

     2,409,025                            2,409,025  
  

 

 

      

 

 

      

 

 

      

 

 

 
   $ 2,409,025        $ 489,186,616        $        $ 491,595,641  
  

 

 

      

 

 

      

 

 

      

 

 

 

Derivative Financial Instruments(b)

 

Assets:

 

Interest rate contracts

   $ 92,115        $        $        $ 92,115  
  

 

 

      

 

 

      

 

 

      

 

 

 

 

(a)  See above Schedule of Investments for values in each state or political subdivision.
(b)  Derivative financial instruments are futures contracts which are valued at the unrealized appreciation (depreciation) on the instrument.

 

 

8   


Schedule of Investments  (unaudited) (continued)

April 30, 2018

  

BlackRock MuniHoldings Quality Fund II, Inc. (MUE)

 

 

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  

Liabilities:

 

TOB Trust Certificates

   $        $ (57,996,402      $        $ (57,996,402

VMTP Shares at Liquidation Value

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

 

 

      

 

 

      

 

 

      

 

 

 
   $        $ (188,996,402      $        $ (188,996,402
  

 

 

      

 

 

      

 

 

      

 

 

 

During the period ended April 30, 2018, there were no transfers between levels.

 

 

   9


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 18, 2018  

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 18, 2018  
By:  

/s/ Neal J. Andrews

 
  Neal J. Andrews  
  Chief Financial Officer (principal financial officer) of
  BlackRock MuniHoldings Quality Fund II, Inc.
Date: June 18, 2018