Form N-CEN - Annual Report for Registered Investment Companies
October 13 2023 - 1:13PM
Edgar (US Regulatory)
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the
Shareholders and the Board of Trustees/Directors of BlackRock Municipal Income
Quality Trust, BlackRock Municipal Income Trust II, and BlackRock MuniVest
Fund, Inc.:
In
planning and performing our audits of the financial statements of BlackRock
Municipal Income Quality Trust, BlackRock Municipal Income Trust II, and
BlackRock MuniVest Fund, Inc. (the “Funds”) as of and for the year ended July 31, 2023,
in accordance with the standards of the Public Company Accounting Oversight
Board (United States) (PCAOB), we considered the Funds’ internal control over
financial reporting, including controls over safeguarding securities, as a
basis for designing our auditing procedures for the purpose of expressing our
opinion on the financial statements and to comply with the requirements of Form
N-CEN, but not for the purpose of expressing an opinion on the effectiveness of
the Funds’ internal control over financial reporting. Accordingly, we express
no such opinion.
The management of the Funds is responsible for
establishing and maintaining effective internal control over financial
reporting. In fulfilling this responsibility, estimates and judgments by
management are required to assess the expected benefits and related costs of
controls. A company's internal control over financial reporting is a process
designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company's internal
control over financial reporting includes those policies and procedures that
(1) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets
of the company; (2) provide reasonable assurance that transactions are recorded
as necessary to permit preparation of financial statements in accordance with
generally accepted accounting principles, and that receipts and expenditures of
the company are being made only in accordance with authorizations of management
and directors of the company; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition
of a company's assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control
over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to
the risk that controls may become inadequate because of changes in conditions
or that the degree of compliance with the policies or procedures may
deteriorate.
A deficiency in internal control over financial
reporting exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned
functions, to prevent or detect misstatements on a timely basis. A material
weakness is a deficiency, or a combination of deficiencies, in internal control
over financial reporting, such that there is a reasonable possibility that a
material misstatement of the company’s annual or interim financial statements
will not be prevented or detected on a timely basis.
Our consideration of the Funds’ internal control over
financial reporting was for the limited purpose described in the first
paragraph and would not necessarily disclose all deficiencies in internal
control that might be material weaknesses under standards established by the
PCAOB. However, we noted no deficiencies in the Funds’ internal control over
financial reporting and its operation, including controls over safeguarding
securities, that we consider to be a material weakness, as defined above, as of
July 31, 2023.
This report is intended solely for the information and
use of management and the Board of Trustees/Directors of the Funds and the
Securities and Exchange Commission and is not intended to be and should not be
used by anyone other than these specified parties.
/s/Deloitte & Touche
LLP
Boston, Massachusetts
September 22, 2023
BLACKROCK
MUNICIPAL INCOME TRUST II
AMENDMENT TO
STATEMENT OF PREFERENCES OF
VARIABLE RATE MUNI TERM PREFERRED SHARES
DATED DECEMBER 15, 2011
(THE “STATEMENT OF PREFERENCES”)
The undersigned
officer of BlackRock Municipal Income Trust II (the “Trust”), a Delaware
statutory trust, hereby certifies as follows:
1. The
Board of Trustees of the Trust (with the consent of the Holders (as defined in
the Statement of Preferences), as required under Section 5 of the Statement of
Preferences) has adopted resolutions to amend the Statement of Preferences as
follows as of December 1, 2022:
a.
The Statement of Preferences of the Trust is hereby amended by deleting
the definition of “Applicable Base Rate” in the Statement of Preferences and
replacing it with the following definition as of December 1, 2022:
“Applicable Base Rate” means (i) with respect to the initial Rate
Period beginning on December 1, 2022 and ending on December 7, 2022, the rate
as calculated pursuant to the Statement of Preferences as in place immediately
prior to the effectiveness of the Amendment to Statement of Preferences dated
December 1, 2022 and (ii) for every succeeding Rate Period, 75% of Daily SOFR
on the applicable Rate Determination Date.
b.
The Statement of Preferences of the Trust is hereby amended by deleting
the definition of “LIBOR Dealer” as of December 1, 2022.
c.
The Statement of Preferences of the Trust is hereby amended by deleting
the definition of “LIBOR Rate” as of December 1, 2022.
d.
The Statement of Preferences of the Trust is hereby amended by deleting
the definition of “London Business Day” as of December 1, 2022.
e.
The Statement of Preferences of the Trust is hereby amended by deleting
the definition of “Redemption Premium” in the Statement of Preferences and
replacing it with the following definition as of December 1, 2022:
“Redemption Premium” means with respect of a VMTP Preferred Share
rated above A1/A+ and its equivalent by all Rating Agencies then rating such
VMTP Preferred Share at the request of the Trust and subject to any redemption,
other than redemptions required to comply with Minimum Asset Coverage
requirements or exceed compliance with the Minimum Asset Coverage requirements
up to 240%, an amount equal to the product of 1% and the Liquidation Preference
of the VMTP Preferred Shares subject to redemption if the Redemption Date is
greater than or equal to 15 months from the Term Redemption Date, provided, up
to 25% of the Trust’s VMTP Preferred Shares Outstanding as of December 1, 2022
may be redeemed at any time without a Redemption Premium.
Any VMTP Preferred Share exchanged for the
preferred share of a surviving entity in connection with a reorganization,
merger, or redomestication of the Trust in another state that had been
previously approved by the Holders of VMTP Preferred Shares or that otherwise
does not require the vote or consent of the Holders of VMTP Preferred Shares
shall not be subject to the Redemption Premium.
f.
The Statement of Preferences of the Trust is hereby amended by deleting
the definition of “Reference Banks” as of December 1, 2022.
g.
The Statement of Preferences of the Trust is hereby amended by adding
the definition for “Daily SOFR” as of December 1, 2022:
“Daily SOFR” means:
(1)
With respect to any Business Day means the secured overnight financing
rate published
for such day by the Federal Reserve Bank of New York, as the administrator of the benchmark (or a
successor administrator) on the Federal Reserve Bank of New York’s website (or any
successor source) as of 4:00 p.m. New York City time (such rate being initially
published for such day at 8:00 a.m. and may be revised until 2:30 p.m., New
York City time).
(2)
If the secured overnight financing rate cannot be determined with
respect to such any Business Day as specified in paragraph (1), unless both a SOFR
Index Cessation Event and a SOFR Index Cessation Date have occurred, then the Redemption
and Paying Agent shall use the secured overnight financing rate in respect of
the last Business Day for which such secured overnight financing rate was
published on the Federal Reserve Bank of New York’s website.
(3)
If a SOFR Index Cessation Event and SOFR Index Cessation Date have
occurred, the Redemption and Paying Agent shall determine the Applicable Base
Rate as if the reference to “75% of Daily SOFR” were a reference to the rate
that was recommended as the replacement for the secured overnight financing rate
by the Federal Reserve Board and/or the Federal Reserve Bank of New York or a
committee officially endorsed or convened by the Federal Reserve Board and/or
the Federal Reserve Bank of New York for the purpose of recommending a
replacement for the secured overnight financing rate (which rate may be
produced by a Federal Reserve Bank or other designated administrator, which
rate may include any adjustments or spreads, and which rate will be reasonably
expected to measure contemporaneous variations in the cost of newly borrowed
funds in U.S. dollars). If no such rate has been recommended within one
Business Day of the SOFR Index Cessation Event, then the Redemption and Paying Agent
shall use the OBFR published on the Federal Reserve Bank of New York’s website for any Business
Day after the SOFR Index Cessation Date (it being understood that the OBFR for
any such Business Day will be the Overnight Bank Funding Rate on the Federal
Reserve Bank of New York’s
website as of 4:00 p.m., New York City time).
(4) If the Redemption and
Paying Agent is required to use the OBFR in paragraph (3) above and an OBFR
Index Cessation Event has occurred, then for any Business Day after the OBFR
Index Cessation Date, the Redemption and Paying Agent shall use the short-term
interest rate target set by the Federal Open Market Committee and published on
the Federal Reserve Bank of New York’s
website, or if the Federal Open Market Committee has not set a single rate, the
mid-point of the short-term interest rate target range set by the Federal Open
Market Committee and published on the Federal Reserve Bank of New York’s website
(calculated as the arithmetic average of the upper bound of the target range
and the lower bound of the target range).
(5)
If Daily SOFR determined as above would be less than zero, then such rate
shall be deemed to be zero.
h.
The Statement of Preferences of the Trust is hereby amended by adding
the definitions for “SOFR Index Cessation Date” and “SOFR Index Cessation Event”
as of December 1, 2022:
“SOFR Index Cessation Date”
means, in respect of a SOFR Index Cessation Event, the date on which the
Federal Reserve Bank of New York (or any successor administrator of the secured
overnight financing rate) ceases to publish the secured overnight financing
rate or the date as of which the secured overnight financing rate may no longer
be used.
“SOFR Index Cessation Event”
means the occurrence of one or more of the following events as it relates to
Daily SOFR:
(1)
a public statement by the Federal Reserve Bank of New York
(or a successor administrator of the secured overnight financing rate)
announcing that it has ceased to publish or provide the secured overnight
financing rate permanently or indefinitely, provided that, at that time, there
is no successor administrator that will continue to publish or provide a
secured overnight financing rate; or
(2)
the publication of information which reasonably confirms
that the Federal Reserve Bank of New York (or a successor administrator of the
secured overnight financing rate) has ceased to provide the secured overnight
financing rate permanently or indefinitely, provided that, at that time, there
is no successor administrator that will continue to publish or provide the
secured overnight financing rate.
i.
The Statement of Preferences of the Trust is hereby amended by adding
the definitions for “OBFR”, “OBFR Index Cessation Date”, and “OBFR Index
Cessation Event” as of December 1, 2022:
“OBFR” means, with respect
to any Business Day, the Overnight Bank Funding Rate on the Federal Reserve
Bank of New York’s website as of 4:00 p.m., New York City time.
“OBFR Index Cessation Date”
means, in respect of an OBFR Index Cessation Event, the date on which the
Federal Reserve Bank of New York (or any successor administrator
of the OBFR), ceases to publish the OBFR, or the date as
of which the OBFR may no longer be used.
“OBFR Index Cessation Event”
means the occurrence of one or more of the following events:
(1)
a public statement by the Federal Reserve Bank of New York
(or a successor administrator of the OBFR) announcing that it has ceased to
publish or provide the OBFR permanently or indefinitely, provided that, at that
time, there is no successor administrator that will continue to publish or
provide an OBFR; or
(2)
the publication of information which reasonably confirms
that the Federal Reserve Bank of New York (or a successor administrator of the
OBFR) has ceased to provide the OBFR permanently or indefinitely, provided
that, at that time, there is no successor administrator that will continue to
publish or provide the OBFR.
j.
The Statement of Preferences of the Trust is hereby amended by deleting the
definition of “Substitute LIBOR Dealer” as of December 1, 2022.
k.
The Statement of Preferences of the Trust is hereby amended by adding
the following as Section 4(j) of the Statement of Preferences as of December 1,
2022:
(j) Exemption
from Delaware Control Beneficial Interest Acquisition Provisions. All VMTP
Shares Outstanding as of December 1, 2022 and the acquisition thereof by the Holder(s)
or Beneficial Owner(s) thereof or any other Person(s), including any transfer and acquisition
after December 1, 2022, will be exempt from Subchapter III of the Delaware Statutory Trust Act.
2.
Except as amended hereby, the Statement of Preferences remains in full
force and effect.
3.
A copy of this amendment shall be lodged with the records of the Trust and
filed in such places as the Trustees deem appropriate.
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IN WITNESS WHEREOF, BlackRock Municipal Income Trust II
has caused these presents to be signed as of November 29, 2022 in its name and
on its behalf by its Vice President and attested by its Secretary. Said
officers of the Trust have executed this amendment as officers and not
individually, and the obligations and rights set forth in this amendment are
not binding upon any such officers, or the trustees or shareholders of the Trust,
individually, but are binding only upon the assets and property of the Trust.
BlackRock Municipal Income Trust II
By: /s/ Jonathan Diorio
Name: Jonathan Diorio
Title: Vice President
ATTEST:
/s/ Janey Ahn
Name: Janey Ahn
Title: Secretary
[Signature Page to
Amendment to Statement of Preferences – BLE]
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