SEC Form N-CSR filed by BlackRock Municipal Income Trust II

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT

INVESTMENT COMPANIES

Investment Company Act file number: 811‑21126

 

 

Name and address of agent for service: John M. Perlowski, Chief Executive Officer, BlackRock Municipal
Income Trust II, 50 Hudson Yards, New York, NY 10001

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

Date of fiscal year end: 07/31/2023

Date of reporting period: 07/31/2023

 

Item 1 – Report to Stockholders

(a) The Report to Shareholders is attached herewith.

 

 

 

BlackRock Municipal Income Quality Trust (BYM)

BlackRock Municipal Income Trust II (BLE)

BlackRock MuniVest Fund, Inc. (MVF)

 

 

 

 

 

Total Returns as of July 31, 2023
		6-Month		12-Month
U.S. large cap equities (S&P 500® Index)		13.52%		13.02%
U.S. small cap equities (Russell 2000® Index)		4.51		7.91
International equities (MSCI Europe, Australasia, Far East Index)		6.65		16.79
Emerging market equities (MSCI Emerging Markets Index)		3.26		8.35
3-month Treasury bills (ICE BofA 3-Month U.S. Treasury Bill Index)		2.34		3.96
U.S. Treasury securities (ICE BofA 10-Year U.S. Treasury Index)		(2.08)		(7.56)
U.S. investment grade bonds (Bloomberg U.S. Aggregate Bond Index)		(1.02)		(3.37)
Tax-exempt municipal bonds (Bloomberg Municipal Bond Index)		0.20		0.93
U.S. high yield bonds (Bloomberg U.S. Corporate High Yield 2% Issuer Capped Index)		2.92		4.42
Past performance is not an indication of future results. Index performance is shown for illustrative purposes only. You cannot invest directly in an index.

 

 

 

Table of Contents

 

 

 

 

 

Municipal Market Conditions

Municipal bonds posted positive total returns amid heightened volatility. Interest rates rose rapidly early in the period as the Fed continued its historic hiking cycle but became increasingly rangebound later in the reporting period as economic activity slowed, inflation expectations moderated, and the Fed tempered the magnitude and pace of its policy tightening. Strong credit fundamentals, bolstered by robust post-pandemic revenue growth and elevated fund balances, drove strong positive excess returns versus comparable U.S. Treasuries. Lower-rated investment grade credits and the 15-year part of the yield curve performed best.

 

A Closer Look at Yields

 

Financial Conditions of Municipal Issuers

Buoyed by successive federal aid injections, vaccine distribution, and the re-opening of the economy, states and many local governments experienced revenue growth above forecasts in 2021 and 2022. However, revenue collections through April 2023, particularly personal income tax receipts, have softened or declined in many states, such as California and New York. A slowing economy could cause more widespread declines in overall revenue collections. While the inflation rate has slowed, higher wages and interest rates in the post-Covid recovery will pressure state and local government costs. Nevertheless, overall credit fundamentals remain solid, particularly near-record reserve levels. Other sectors also exhibit strong credit fundamentals. Municipal utilities typically benefit from autonomous rate-setting that allows them to adjust for rising fuel costs. Rising commodity prices over a prolonged period could test affordability and the political will to raise rates to balance operations. State housing authority bonds, flagship universities, and strong national and regional health systems may also be pressured but are better poised to absorb the impact of the economic shock. Critical providers (safety net hospitals, mass transit systems, airports) with limited resources may still experience fiscal strain from the economic fallout from high inflation, but aid and demand in the service sector of the economy will continue to support operating results through 2023. Work-from-home policies remain headwinds for mass transit farebox revenue and commercial real estate values.

The opinions expressed are those of BlackRock as of July 31, 2023 and are subject to change at any time due to changes in market or economic conditions. The comments should not be construed as a recommendation of any individual holdings or market sectors. Investing involves risk including loss of principal. Bond values fluctuate in price so the value of your investment can go down depending on market conditions. Fixed income risks include interest-rate and credit risk. Typically, when interest rates rise, there is a corresponding decline in bond values. Credit risk refers to the possibility that the bond issuer will not be able to make principal and interest payments. There may be less information on the financial condition of municipal issuers than for public corporations. The market for municipal bonds may be less liquid than for taxable bonds. Some investors may be subject to Alternative Minimum Tax (“AMT”). Capital gains distributions, if any, are taxable.

 

 

 

The Benefits and Risks of Leveraging

 

The Trusts may utilize leverage to seek to enhance the distribution rate on, and net asset value (“NAV”) of, their common shares (“Common Shares”). However, there is no guarantee that these objectives can be achieved in all interest rate environments.

In general, the concept of leveraging is based on the premise that the financing cost of leverage, which is based on short-term interest rates, is normally lower than the income earned by a Trust on its longer-term portfolio investments purchased with the proceeds from leverage. To the extent that the total assets of each Trust (including the assets obtained from leverage) are invested in higher-yielding portfolio investments, each Trust’s shareholders benefit from the incremental net income. The interest earned on securities purchased with the proceeds from leverage (after paying the leverage costs) is paid to shareholders in the form of dividends, and the value of these portfolio holdings (less the leverage liability) is reflected in the per share NAV.

To illustrate these concepts, assume a Trust’s Common Shares capitalization is $100 million and it utilizes leverage for an additional $30 million, creating a total value of $130 million available for investment in longer-term income securities. If prevailing short-term interest rates are 3% and longer-term interest rates are 6%, the yield curve has a strongly positive slope. In this case, a Trust’s financing costs on the $30 million of proceeds obtained from leverage are based on the lower short-term interest rates. At the same time, the securities purchased by a Trust with the proceeds from leverage earn income based on longer-term interest rates. In this case, a Trust’s financing cost of leverage is significantly lower than the income earned on a Trust’s longer-term investments acquired from such leverage proceeds, and therefore the holders of Common Shares (“Common Shareholders”) are the beneficiaries of the incremental net income.

However, in order to benefit Common Shareholders, the return on assets purchased with leverage proceeds must exceed the ongoing costs associated with the leverage. If interest and other costs of leverage exceed a Trust’s return on assets purchased with leverage proceeds, income to shareholders is lower than if a Trust had not used leverage. In such circumstance, the investment adviser may nevertheless determine to maintain a Trust’s leverage if it deems such action to be appropriate. Furthermore, the value of the Trusts’ portfolio investments generally varies inversely with the direction of long-term interest rates, although other factors can influence the value of portfolio investments. In contrast, the amount of each Trust’s obligations under its respective leverage arrangement generally does not fluctuate in relation to interest rates. As a result, changes in interest rates can influence the Trusts’ NAVs positively or negatively. Changes in the future direction of interest rates are very difficult to predict accurately, and there is no assurance that a Trust’s intended leveraging strategy will be successful.

The use of leverage also generally causes greater changes in each Trust’s NAV, market price and dividend rates than comparable portfolios without leverage. In a declining market, leverage is likely to cause a greater decline in the NAV and market price of a Trust’s Common Shares than if the Trust were not leveraged. In addition, each Trust may be required to sell portfolio securities at inopportune times or at distressed values in order to comply with regulatory requirements applicable to the use of leverage or as required by the terms of leverage instruments, which may cause the Trust to incur losses. The use of leverage may limit a Trust’s ability to invest in certain types of securities or use certain types of hedging strategies. Each Trust incurs expenses in connection with the use of leverage, all of which are borne by Common Shareholders and may reduce income to the Common Shares. Moreover, to the extent the calculation of each Trust’s investment advisory fees includes assets purchased with the proceeds of leverage, the investment advisory fees payable to the Trusts’ investment adviser will be higher than if the Trusts did not use leverage.

To obtain leverage, each Trust has issued Variable Rate Muni Term Preferred Shares (“VMTP Shares” or “Preferred Shares”) and/or leveraged its assets through the use of tender option bond trusts (“TOB Trusts”) as described in the Notes to Financial Statements.

Under the Investment Company Act of 1940, as amended (the “1940 Act”), each Trust is permitted to borrow money (including through the use of TOB Trusts) or issue debt securities up to 33 1/3% of its total managed assets or equity securities (e.g., Preferred Shares) up to 50% of its total managed assets. A Trust may voluntarily elect to limit its leverage to less than the maximum amount permitted under the 1940 Act. In addition, a Trust may also be subject to certain asset coverage, leverage or portfolio composition requirements imposed by the Preferred Shares’ governing instruments or by agencies rating the Preferred Shares, which may be more stringent than those imposed by the 1940 Act.

Derivative Financial Instruments

The Trusts may invest in various derivative financial instruments. These instruments are used to obtain exposure to a security, commodity, index, market, and/or other assets without owning or taking physical custody of securities, commodities and/or other referenced assets or to manage market, equity, credit, interest rate, foreign currency exchange rate, commodity and/or other risks. Derivative financial instruments may give rise to a form of economic leverage and involve risks, including the imperfect correlation between the value of a derivative financial instrument and the underlying asset, possible default of the counterparty to the transaction or illiquidity of the instrument. Pursuant to Rule 18f-4 under the 1940 Act, among other things, the Trusts must either use derivative financial instruments with embedded leverage in a limited manner or comply with an outer limit on fund leverage risk based on value-at-risk. The Trusts’ successful use of a derivative financial instrument depends on the investment adviser’s ability to predict pertinent market movements accurately, which cannot be assured. The use of these instruments may result in losses greater than if they had not been used, may limit the amount of appreciation a Trust can realize on an investment and/or may result in lower distributions paid to shareholders. The Trusts’ investments in these instruments, if any, are discussed in detail in the Notes to Financial Statements.

 

 

 

Investment Objective

BlackRock Municipal Income Quality Trust’s (BYM) (the “Trust”) investment objective is to provide current income exempt from U.S. federal income taxes, including the alternative minimum tax. The Trust seeks to achieve its investment objective by investing, under normal circumstances, at least 80% of its managed assets in municipal bonds exempt from U.S. federal income taxes, including the U.S. federal alternative minimum tax. The Trust also invests at least 80% of its managed assets in municipal bonds that are investment grade quality at the time of investment or, if unrated, determined to be of comparable quality by the investment adviser at the time of investment. The Trust may invest up to 20% of its managed assets in securities that are rated below investment grade, or are considered by BlackRock to be of comparable quality, at the time of purchase. The Trust may invest directly in securities or synthetically through the use of derivatives.

No assurance can be given that the Trust’s investment objective will be achieved.

Trust Information

 

 

Market Price and Net Asset Value Per Share Summary

 

 

GROWTH OF $10,000 INVESTMENT

 

 

 

 

 

Performance

Returns for the period ended July 31, 2023 were as follows:

 

 

Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles. Past performance is not an indication of future results.

The Trust is presenting the performance of one or more indices for informational purposes only. The Trust is actively managed and does not seek to track or replicate the performance of any index. The index performance shown is not intended to be indicative of the Trust’s investment strategies, portfolio components or past or future performance.

More information about the Trust’s historical performance can be found in the “Closed End Funds” section of blackrock.com.

The following discussion relates to the Trust’s absolute performance based on NAV:

Municipal bonds posted slightly positive returns in the annual period. Bond market performance, in general, was dampened by the combination of high inflation and continued interest rate increases by the Fed. However, the contribution from income outweighed the impact of falling prices.

High-quality holdings, especially AAA and AA rated bonds in the school district, transportation, state tax backed, and utility sectors, contributed to performance. Despite the volatility throughout the period, low new issuance led to tighter yield spreads for higher-quality securities. Strong fundamental trends in the transportation sectors, especially airports, also helped fuel positive performance. Bonds with maturities of 18 to 25 years were especially notable contributors in this area. The Trust’s use of U.S. Treasury futures to manage interest rate risk added value in the rising-rate environment. BBB rated holdings, especially high-coupon bonds in the tobacco sector, contributed positively due to the high income and low price volatility

On the negative side, long-dated securities with maturities of 25 years and above—particularly those with lower coupons—detracted from performance due to their higher interest rate sensitivity. Some shorter dated bonds, especially one- to five-year pre-refunded debt, underperformed modestly due to the increase in short term rates coupled with a decline in price to par as they neared maturity. Bonds in the non-rated, non-investment grade category detracted from performance, driven by some long dated Puerto Rico debt, workforce housing, and tobacco securities. The adverse effect was most pronounced among the Trust’s holdings in low- to zero-coupon securities.

The healthcare and housing sectors, especially holdings in lower coupon bonds (those with 4% coupons or below) also hurt performance. Within the housing sector, positions in high yield workforce housing securities were the largest detractors. The Trust’s use of leverage, which amplified the effect of falling prices, was another detractor of note.

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.

 

 

 

Overview of the Trust’s Total Investments

 

SECTOR ALLOCATION
Sector(a)(b)		Percentage of Total Investments
County/City/Special District/School District			23.2	%
Transportation			16.6
Health			15.9
Utilities			12.8
State			10.6
Education			6.2
Tobacco			5.3
Corporate			5.2
Housing			4.2

CALL/MATURITY SCHEDULE
Calendar Year Ended December 31,(a)(c)		Percentage
2023			8.0	%
2024			5.7
2025			11.4
2026			3.5
2027			7.3

CREDIT QUALITY ALLOCATION
Credit Rating(a)(d)		Percentage of Total Investments
AAA/Aaa			11.0	%
AA/Aa			43.8
A			24.3
BBB/Baa			7.3
BB/Ba			2.5
B			0.3
N/R(e)			10.8

 

 

 

 

Trust Information

 

 

Market Price and Net Asset Value Per Share Summary

 

GROWTH OF $10,000 INVESTMENT

 

 

 

 

 

Performance

Returns for the period ended July 31, 2023 were as follows:

 

 

Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles. Past performance is not an indication of future results.

The Trust is presenting the performance of one or more indices for informational purposes only. The Trust is actively managed and does not seek to track or replicate the performance of any index. The index performance shown is not intended to be indicative of the Trust’s investment strategies, portfolio components or past or future performance.

More information about the Trust’s historical performance can be found in the “Closed End Funds” section of blackrock.com.

The following discussion relates to the Trust’s absolute performance based on NAV:

Municipal bonds posted slightly positive returns in the annual period. Bond market performance, in general, was dampened by the combination of high inflation and continued interest rate increases by the Fed. However, the contribution from income outweighed the impact of falling prices.

The Fund’s use of U.S. Treasury futures to mitigate interest rate risk contributed to results. Security selection in the tobacco sector also helped peformance, as did holdings in the 15- to 20-year maturity range. With respect to credit tiers, positions in A and BBB rated bonds aided returns.

The Fund’s use of leverage, which amplified the effect of falling prices, detracted from results. In addition, rising rates have increased the cost of using leverage. Positions in the five- to seven-year maturity range and bonds rated below investment grade also hurt performance.

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.

 

 

 

Overview of the Trust’s Total Investments

 

SECTOR ALLOCATION
Sector(a)(b)		Percentage of Total Investments
Transportation			23.5	%
County/City/Special District/School District			16.2
State			13.1
Health			12.8
Corporate			10.6
Utilities			8.3
Education			6.0
Housing			5.4
Tobacco			4.1

CALL/MATURITY SCHEDULE
Calendar Year Ended December 31,(a)(c)		Percentage
2023			10.0	%
2024			7.1
2025			3.8
2026			5.7
2027			5.1

CREDIT QUALITY ALLOCATION
Credit Rating(a)(d)		Percentage of Total Investments
AAA/Aaa			4.5	%
AA/Aa			35.6
A			35.1
BBB/Baa			12.4
BB/Ba			2.7
B			0.9
N/R(e)			8.8

 

 

 

 

Investment Objective

BlackRock MuniVest Fund, Inc.’s (MVF) (the “Trust”) investment objective is to provide shareholders with as high a level of current income exempt from U.S. federal income taxes as is consistent with its investment policies and prudent investment management. The Trust seeks to achieve its investment objective by investing at least 80% of an aggregate of the Trust’s net assets (including proceeds from the issuance of any preferred shares) and the proceeds of any borrowing for investment purposes, in municipal obligations exempt from U.S. federal income taxes (except that the interest may be subject to the U.S. federal alternative minimum tax). Under normal market conditions, the Trust primarily invests in long term municipal obligations rated investment grade at the time of investment (or, if unrated, are considered by the Trust’s investment adviser to be of comparable quality at the time of investment) and in long term municipal obligations with maturities of more than ten years at the time of investment. The Trust may invest up to 20% of its total assets in securities rated below investment grade or deemed equivalent at the time of purchase. The Trust may invest directly in securities or synthetically through the use of derivatives.

No assurance can be given that the Trust’s investment objective will be achieved.

Trust Information

 

 

Market Price and Net Asset Value Per Share Summary

 

GROWTH OF $10,000 INVESTMENT

 

 

 

 

 

Performance

Returns for the period ended July 31, 2023 were as follows:

 

 

Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles. Past performance is not an indication of future results.

The Trust is presenting the performance of one or more indices for informational purposes only. The Trust is actively managed and does not seek to track or replicate the performance of any index. The index performance shown is not intended to be indicative of the Trust’s investment strategies, portfolio components or past or future performance.

More information about the Trust’s historical performance can be found in the “Closed End Funds” section of blackrock.com.

The following discussion relates to the Trust’s absolute performance based on NAV:

Municipal bonds posted slightly positive returns in the annual period. Bond market performance, in general, was dampened by the combination of high inflation and continued interest rate increases by the Fed. However, the contribution from income outweighed the impact of falling prices.

The Fund’s use of U.S. Treasury futures to manage interest rate risk was a key contributor to performance early in the reporting period when the Fed was aggressively raising rates to combat inflation. The investment adviser closed out this position before the end of the period given that yields had already risen significantly.

On a sector basis, transportation issues were the largest contributors. AAA and AA rated bonds were the leading contributors with respect to credit tiers. Holdings with maturities of 20 years and under contributed, as did positions in floating-rate notes and higher-coupon bonds.

On the other hand, healthcare issues with 4% coupons detracted. Holdings in BBB rated debt weighed on results, as well. Additionally, there were a few individual positions that posted negative returns due to credit concerns or their structures. The Fund was also adversely affected by the investment adviser’s effort to reduce duration at an inopportune time early in the period, which reduced the benefit of the market’s rebound in early 2023.

The Fund’s cash weighting was above typical levels at the close of the period, which represented a defensive positioning.

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.

 

 

 

Overview of the Trust’s Total Investments

 

SECTOR ALLOCATION
Sector(a)(b)		Percentage of Total Investments
Health			21.5	%
Transportation			20.2
County/City/Special District/School District			14.3
State			12.7
Education			9.2
Corporate			7.9
Housing			5.2
Utilities			4.7
Tobacco			4.3

CALL/MATURITY SCHEDULE
Calendar Year Ended December 31,(a)(c)		Percentage
2023			13.9	%
2024			7.9
2025			7.1
2026			5.6
2027			16.4

CREDIT QUALITY ALLOCATION
Credit Rating(a)(d)		Percentage of Total Investments
AAA/Aaa			8.1	%
AA/Aa			40.6
A			22.4
BBB/Baa			9.1
BB/Ba			4.3
B			2.2
N/R(e)			13.3

 

 

 

 

Security		Par (000)				Value
Municipal Bonds
Alabama — 4.2%
Black Belt Energy Gas District, RB, 4.00%, 10/01/52(a)		$	3,830			$	3,781,045
Black Belt Energy Gas District, Refunding RB, Series D-1, 5.50%, 06/01/49(a)(b)			2,875				3,026,530
City of Birmingham Alabama, GO, CAB, Series A‑1, Convertible, 5.00%, 03/01/45(c)(d)			1,165				1,208,380
Southeast Energy Authority A Cooperative District, RB, Series A, 5.25%, 01/01/54(a)			5,685				6,033,018
							14,048,973
Arizona(e) — 0.8%
Arizona Industrial Development Authority, RB
4.38%, 07/01/39			725				630,874
Series A, 5.00%, 07/01/49			690				610,432
Series A, 5.00%, 07/01/54			530				458,478
Industrial Development Authority of the County of Pima, Refunding RB, 5.00%, 06/15/49			685				605,180
Maricopa County Industrial Development Authority, Refunding RB, 5.00%, 07/01/54			360				321,332
							2,626,296
California — 14.9%
California Community Housing Agency, RB, M/F Housing, 3.00%, 08/01/56(e)			155				101,805
California Enterprise Development Authority, RB, 8.00%, 11/15/62(e)			475				465,258
California Health Facilities Financing Authority, Refunding RB, Sub-Series A-2, 5.00%, 11/01/47			1,465				1,664,808
California Infrastructure & Economic Development Bank, RB, Series A, 1st Lien, (AMBAC), 5.00%, 01/01/28(c)			10,100				11,140,371
California State Public Works Board, RB, Series I, 5.50%, 11/01/33			1,415				1,423,325
California Statewide Communities Development Authority, Refunding RB, 4.00%, 03/01/48			3,175				2,842,358
CSCDA Community Improvement Authority, RB, M/F Housing(e)
5.00%, 09/01/37			130				127,832
4.00%, 10/01/56			195				160,850
4.00%, 12/01/56			230				163,142
Series A, 4.00%, 06/01/58			1,170				911,101
Senior Lien, 3.13%, 06/01/57			690				472,378
Series A, Senior Lien, 4.00%, 12/01/58			955				735,350
Los Angeles County Facilities, Inc., RB, Series A, 4.00%, 12/01/48			3,370				3,294,485
Mount San Antonio Community College District, Refunding GO, CAB, CAB, Series A, Convertible, Election 2013, 6.25%, 08/01/28(d)			1,580				1,471,355
Regents of the University of California Medical Center Pooled Revenue, RB, Series P, 4.00%, 05/15/53			4,100				3,861,757
Riverside County Redevelopment Successor Agency, Refunding TA, Series A, (BAM), 4.00%, 10/01/39			2,650				2,679,161
San Diego County Regional Airport Authority, ARB, Series A, Subordinate, 4.00%, 07/01/51			2,730				2,700,330
San Diego Unified School District, GO, Series C, Election 2008, 0.00%, 07/01/38(f)			2,000				1,120,028
San Diego Unified School District, GO, CAB(f)
Series K-2, 0.00%, 07/01/38			1,745				939,559
Series K-2, 0.00%, 07/01/39			2,115				1,081,947
Series K-2, 0.00%, 07/01/40			2,715				1,324,358

Security		Par (000)				Value
California (continued)
San Diego Unified School District, GO, CAB(f) (continued)
Series G, Election 2008, 0.00%, 01/01/24(c)		$	3,425			$	1,761,195
San Diego Unified School District, Refunding GO, CAB, Series R-1, 0.00%, 07/01/31(f)			1,400				1,100,848
State of California, Refunding GO, 4.00%, 03/01/46			2,695				2,716,549
Yosemite Community College District, GO, Series D, Election 2004, 0.00%, 08/01/37(f)			10,000				5,653,970
							49,914,120
Colorado — 1.9%
City & County of Denver Colorado Airport System Revenue, Refunding ARB, Series B, 5.25%, 11/15/53			5,000				5,481,275
Sabell Metropolitan District, GO, Series A, 5.00%, 12/01/50(e)			1,055				909,905
							6,391,180
Connecticut — 0.3%
Connecticut State Health & Educational Facilities Authority, RB, 4.25%, 07/15/53			1,170				1,131,360
Delaware — 0.8%
County of Kent Delaware, RB
Series A, 5.00%, 07/01/40			770				752,293
Series A, 5.00%, 07/01/48			2,110				1,949,341
							2,701,634
District of Columbia — 3.2%
District of Columbia Tobacco Settlement Financing Corp., Refunding RB, 6.75%, 05/15/40			9,225				9,466,953
Washington Metropolitan Area Transit Authority, RB, Series B, 5.00%, 07/01/37			1,140				1,211,991
							10,678,944
Florida — 7.2%
Brevard County Health Facilities Authority, Refunding RB, 5.00%, 04/01/39			1,795				1,814,433
Capital Trust Agency, Inc., RB(e)
Series A, 5.00%, 06/01/45			615				545,697
Series A, 5.50%, 06/01/57			220				199,707
County of Miami-Dade Florida Water & Sewer System Revenue, Refunding RB, Series B, 4.00%, 10/01/49 .			2,665				2,554,458
County of Miami-Dade Seaport Department, ARB, Series A, 6.00%, 10/01/23(c)			2,770				2,781,559
County of Pasco Florida, RB, (AGM), 5.00%, 09/01/48			3,090				3,297,073
Florida Development Finance Corp., RB
6.50%, 06/30/57(e)			420				409,763
Series A, 5.00%, 06/15/56			580				551,050
Florida Development Finance Corp., Refunding RB, 5.00%, 09/15/40(e)			340				307,532
Miami-Dade County Educational Facilities Authority, Refunding RB, Series A, 5.00%, 04/01/40			3,910				3,980,357
Orange County Health Facilities Authority, RB, 4.00%, 10/01/52			4,000				3,731,940
Orange County Health Facilities Authority, Refunding RB
5.00%, 08/01/41			630				648,900
5.00%, 08/01/47			1,845				1,900,350
Preserve at South Branch Community Development District, SAB
4.00%, 11/01/39			300				262,760

 

 

 

 

Security		Par (000)				Value
Florida (continued)
Preserve at South Branch Community Development District, SAB (continued)
4.00%, 11/01/50		$	500			$	394,754
Village Community Development District No. 15, SAB, 5.25%, 05/01/54(e)			280				283,455
Westside Community Development District, Refunding SAB(e)
4.10%, 05/01/37			260				235,890
4.13%, 05/01/38			260				234,435
							24,134,113
Georgia — 2.2%
East Point Business & Industrial Development Authority, RB, Series A, 5.25%, 06/15/62(e)			245				219,481
Gainesville & Hall County Hospital Authority, Refunding RB, Series A, (GTD), 5.50%, 02/15/25(c)			545				563,522
Georgia Housing & Finance Authority, RB, S/F Housing
Series A, 3.95%, 12/01/43			275				274,945
Series A, 4.00%, 12/01/48			410				404,525
Main Street Natural Gas, Inc., RB
Series A, 5.00%, 05/15/38			595				602,586
Series A, 5.00%, 05/15/43			775				773,134
Series B, 5.00%, 12/01/52(a)			4,355				4,503,384
							7,341,577
Idaho — 0.5%
Idaho Housing & Finance Association, RB, (GTD), 5.50%, 05/01/57			1,510				1,604,435
Illinois — 12.9%
Chicago Board of Education, GO
Series A, 5.00%, 12/01/34			1,620				1,686,629
Series A, 5.00%, 12/01/40			1,540				1,557,105
Series A, 5.00%, 12/01/47			450				443,551
Chicago O’Hare International Airport, ARB, Series D, Senior Lien, 5.25%, 01/01/42			3,300				3,452,995
Chicago Transit Authority Sales Tax Receipts Fund, RB, 5.25%, 12/01/49			3,500				3,545,112
City of Chicago Illinois Wastewater Transmission Revenue, RB, Series A, 2nd Lien, (AGM), 5.25%, 01/01/58			4,565				4,937,399
Cook County Community College District No. 508, GO
5.13%, 12/01/38			7,700				7,715,231
5.50%, 12/01/38			1,000				1,003,953
Illinois Finance Authority, RB
Series A, 5.00%, 02/15/47			565				534,363
Series A, 5.00%, 02/15/50			310				288,989
Illinois Finance Authority, Refunding RB
Series C, 4.13%, 08/15/37			3,130				3,068,711
Series C, 5.00%, 08/15/44			390				394,193
Illinois Housing Development Authority, RB, S/F Housing, Series A, (FHLMC, FNMA, GNMA), 3.75%, 10/01/43			3,000				2,693,229
Illinois Housing Development Authority, Refunding RB, S/F Housing, Series H, (FHLMC, FNMA, GNMA), 4.65%, 10/01/43(b)			1,905				1,918,093
Illinois State Toll Highway Authority, RB, Series A, 5.00%, 01/01/40			7,020				7,194,461

Security		Par (000)				Value
Illinois (continued)
Metropolitan Pier & Exposition Authority, RB, Series A, 5.00%, 06/15/57		$	670			$	680,185
State of Illinois, GO, 5.50%, 05/01/39			1,840				1,992,810
							43,107,009
Indiana — 0.1%
Indiana Finance Authority, RB, Series A, 4.00%, 11/01/51			525				493,644
Louisiana — 0.5%
Louisiana Stadium & Exposition District, Refunding RB, Series A, 5.00%, 07/01/48			1,575				1,688,805
Massachusetts — 2.0%
Massachusetts Development Finance Agency, RB
5.00%, 10/01/48			1,970				1,824,687
Series A, 5.00%, 01/01/47			2,370				2,373,346
Massachusetts Development Finance Agency, Refunding RB
5.00%, 07/01/37			190				192,012
5.00%, 09/01/43			1,750				1,717,478
Massachusetts Housing Finance Agency, RB, M/F Housing, Series A, 3.85%, 06/01/46			490				428,849
							6,536,372
Michigan — 4.1%
Michigan Finance Authority, RB, Series S, 5.00%, 11/01/44			5,860				5,984,267
Michigan Finance Authority, Refunding RB, 5.00%, 11/15/41			2,235				2,289,901
Michigan State Building Authority, Refunding RB
Series I, 5.00%, 10/15/45			965				989,736
Series II, 4.00%, 10/15/47(b)			335				324,679
Michigan State Housing Development Authority, RB, M/F Housing, Series A, AMT, 3.80%, 10/01/38			3,965				3,763,197
Western Michigan University, Refunding RB, (AGM), 5.00%, 11/15/23(c)			430				431,945
							13,783,725
Minnesota — 0.4%
City of Minneapolis Minnesota, Refunding RB, Series A, 5.00%, 11/15/49			1,315				1,333,869
Nevada — 0.8%
City of Las Vegas Nevada Special Improvement District No. 611, SAB
4.00%, 06/01/40			445				380,833
4.13%, 06/01/50			1,135				891,596
Tahoe-Douglas Visitors Authority, RB
5.00%, 07/01/40			760				765,403
5.00%, 07/01/45			530				519,201
							2,557,033
New Hampshire — 0.1%
New Hampshire Business Finance Authority, Refunding RB, Series A, 3.63%, 07/01/43(a)(e)			450				342,328
New Jersey — 8.0%
Camden County Improvement Authority, RB, 6.00%, 06/15/62			500				518,806
New Jersey Economic Development Authority, RB(c)
Series DDD, 5.00%, 06/15/27			375				405,202
Series WW, 5.00%, 06/15/25			1,620				1,673,582
Series WW, 5.25%, 06/15/25			550				570,711

 

 

 

 

Security		Par (000)				Value
New Jersey (continued)
New Jersey Economic Development Authority, Refunding RB, Sub‑Series A, 4.00%, 07/01/32		$	930			$	937,746
New Jersey Health Care Facilities Financing Authority, Refunding RB, 5.00%, 10/01/37			1,605				1,697,342
New Jersey Transportation Trust Fund Authority, RB
Series BB, 4.00%, 06/15/50			3,000				2,856,756
Series D, 5.00%, 06/15/32			900				921,325
Series S, 5.25%, 06/15/43			2,150				2,288,565
New Jersey Transportation Trust Fund Authority, RB, CAB(f)
Series A, 0.00%, 12/15/35			4,050				2,426,744
Series A, 0.00%, 12/15/38			5,845				3,019,018
New Jersey Transportation Trust Fund Authority, Refunding RB
Series A, 5.00%, 12/15/36			340				363,543
Series A, 4.00%, 06/15/40			1,690				1,656,028
South Jersey Port Corp., ARB, Series A, 5.00%, 01/01/49			720				737,894
Tobacco Settlement Financing Corp., Refunding RB
Series A, 5.00%, 06/01/35			1,750				1,867,028
Series A, 5.25%, 06/01/46			1,725				1,798,887
Sub-Series B, 5.00%, 06/01/46			2,920				2,914,621
							26,653,798
New Mexico — 0.0%
City of Santa Fe New Mexico, RB, Series A, 5.00%, 05/15/44			175				151,418
New York — 11.4%
City of New York, GO, Series B, 5.25%, 10/01/47			100				111,731
Metropolitan Transportation Authority, Refunding RB
Series C-1, 5.25%, 11/15/55			1,135				1,185,703
Series C-1, 5.00%, 11/15/56			1,690				1,715,200
New York City Municipal Water Finance Authority, RB
Series AA-1, 4.00%, 06/15/51			12,400				12,059,025
Series AA-1, 5.25%, 06/15/52			230				256,909
New York City Municipal Water Finance Authority, Refunding RB, Series DD, 4.13%, 06/15/46			5,670				5,666,502
New York City Transitional Finance Authority Future Tax Secured Revenue, RB, Series A-1, Subordinate, 4.00%, 08/01/48			1,320				1,289,305
New York Liberty Development Corp., Refunding RB, Series 1, 5.00%, 11/15/44(e)			1,240				1,210,190
New York State Thruway Authority, Refunding RB, Series A-1, 4.00%, 03/15/54			4,115				3,995,496
State of New York Mortgage Agency, Refunding RB, Series 211, 3.75%, 10/01/43			2,810				2,510,409
Triborough Bridge & Tunnel Authority Sales Tax Revenue, RB
Series A, 4.00%, 05/15/48			1,000				987,928
Series A, 5.00%, 05/15/48			1,000				1,099,902
Series A, 4.13%, 05/15/53			1,000				985,332
Triborough Bridge & Tunnel Authority, RB, Series D-2, Senior Lien, 5.50%, 05/15/52			4,340				4,876,085
							37,949,717
North Dakota — 0.1%
North Dakota Housing Finance Agency, RB, S/F Housing, Class A, 3.70%, 01/01/46			495				437,022

Security		Par (000)				Value
Ohio — 4.2%
Buckeye Tobacco Settlement Financing Authority, Refunding RB
Series A-2, 3.00%, 06/01/48		$	1,085			$	830,188
Series B-2, Class 2, 5.00%, 06/01/55			5,905				5,498,730
Northeast Ohio Regional Sewer District, Refunding RB, 4.00%, 11/15/43			5,175				5,175,729
Northwest Local School District/Hamilton & Butler Counties, GO, 4.00%, 12/01/50			2,645				2,564,550
							14,069,197
Oregon — 0.5%
Clackamas County School District No. 12 North Clackamas, GO, CAB, Series A, (GTD), 0.00%, 06/15/38(f)			1,115				581,703
Washington & Multnomah Counties School District No. 48J Beaverton, GO, CAB, Series D, Convertible, (GTD), 5.00%, 06/15/36(d)			945				1,020,585
							1,602,288
Pennsylvania — 6.4%
Bucks County Industrial Development Authority, RB, 4.00%, 07/01/46			205				154,734
Commonwealth Financing Authority, RB, (AGM), 4.00%, 06/01/39			3,230				3,186,560
Montgomery County Higher Education and Health Authority, Refunding RB, Series A, 4.00%, 09/01/49			1,145				1,045,805
Pennsylvania Economic Development Financing Authority, Refunding RB, Series A, 4.00%, 02/15/52			800				747,684
Pennsylvania Higher Educational Facilities Authority, RB, 4.00%, 08/15/49			5,000				4,759,095
Pennsylvania Higher Educational Facilities Authority, Refunding RB, Series A, 5.25%, 09/01/50			4,245				4,272,737
Pennsylvania Housing Finance Agency, Refunding RB, S/F Housing, Series 2022, 4.25%, 10/01/47			2,415				2,271,662
Pennsylvania Turnpike Commission, RB
Series B, 5.00%, 12/01/40			1,060				1,090,487
Series C, 5.50%, 12/01/23(c)			630				634,337
Series A, Subordinate, 4.00%, 12/01/46			1,605				1,550,574
Pennsylvania Turnpike Commission, Refunding RB
Series A, 5.00%, 12/01/38			695				710,546
Series A-1, 5.00%, 12/01/40			850				869,936
							21,294,157
Puerto Rico — 4.9%
Puerto Rico Sales Tax Financing Corp. Sales Tax Revenue, RB
Series A-1, Restructured, 4.75%, 07/01/53			6,639				6,273,092
Series A-1, Restructured, 5.00%, 07/01/58			5,423				5,291,080
Series A-2, Restructured, 4.78%, 07/01/58			349				328,382
Series A-2, Restructured, 4.33%, 07/01/40			1,688				1,596,549
Series B-1, Restructured, 4.75%, 07/01/53			536				506,337
Series B-2, Restructured, 4.78%, 07/01/58			520				489,404
Puerto Rico Sales Tax Financing Corp. Sales Tax Revenue, RB, CAB, Series A-1, Restructured, 0.00%, 07/01/46(f)			6,226				1,755,215
							16,240,059
South Carolina — 5.2%
South Carolina Jobs-Economic Development Authority, RB(e)
5.00%, 01/01/55			1,095				919,370
7.50%, 08/15/62			505				467,406

 

 

 

 

Security		Par (000)				Value
South Carolina (continued)
South Carolina Jobs-Economic Development Authority, Refunding RB, 4.00%, 12/01/44		$	1,645			$	1,575,199
South Carolina Public Service Authority, RB
Series A, 5.50%, 12/01/54			6,960				7,023,301
Series E, 5.50%, 12/01/53			1,610				1,620,647
South Carolina Public Service Authority, Refunding RB, 5.00%, 12/01/38			2,360				2,371,960
Spartanburg Regional Health Services District, Refunding RB, Series A, 4.00%, 04/15/43			3,500				3,272,042
							17,249,925
South Dakota — 0.5%
City of Rapid City South Dakota Sales Tax Revenue, RB, 4.00%, 12/01/26(c)			1,760				1,822,441
Tennessee — 1.2%
Metropolitan Government Nashville & Davidson County Health & Educational Facilities Board, RB, Series A, 5.00%, 07/01/40			35				35,866
Tennergy Corp., RB, Series A, 5.50%, 10/01/53(a)			1,575				1,673,291
Tennessee Housing Development Agency, RB, S/F Housing, Series 2, 4.35%, 01/01/48			2,500				2,404,617
							4,113,774
Texas — 20.5%
Arlington Higher Education Finance Corp., RB(e)
7.50%, 04/01/62			530				519,765
7.88%, 11/01/62			450				460,001
City of Lubbock Texas Electric Light & Power System Revenue, Refunding RB, 4.00%, 04/15/51			5,200				4,866,217
Coppell Independent School District, Refunding GO, (PSF), 0.00%, 08/15/30(f)			10,030				8,064,983
County of Harris Texas, Refunding GO(f)
(NPFGC), 0.00%, 08/15/25			7,485				7,023,670
(NPFGC), 0.00%, 08/15/28			10,915				9,363,138
Cypress-Fairbanks Independent School District, GO, (PSF), 4.00%, 02/15/48			755				733,137
Dallas Fort Worth International Airport, Refunding RB, Series F, 5.25%, 11/01/33			1,090				1,095,694
Denton Independent School District, GO, (PSF), 5.00%, 08/15/48(b)			570				626,270
Grand Parkway Transportation Corp., RB, CAB, Series B, Convertible, 5.80%, 10/01/23(d)			2,365				2,562,586
Harris County Cultural Education Facilities Finance Corp., Refunding RB, 3.00%, 10/01/51			3,900				2,881,616
Harris County-Houston Sports Authority, Refunding RB(f)
Series A, 3rd Lien, (NPFGC), 0.00%, 11/15/24(c)			5,965				2,499,132
Series A, 3rd Lien, (NPFGC), 0.00%, 11/15/38			10,925				4,497,003
Series H, Junior Lien, (NPFGC), 0.00%, 11/15/38			5,785				2,624,359
Series H, Junior Lien, (NPFGC), 0.00%, 11/15/39			6,160				2,615,733
Katy Independent School District, GO, (PSF), 4.00%, 02/15/52			3,000				2,850,057
Leander Independent School District, Refunding GO, CAB, Series D, (PSF), 0.00%, 08/15/24(c)(f)			3,775				1,870,966
Lower Colorado River Authority, Refunding RB, (AGM), 5.25%, 05/15/53			2,615				2,858,995
Midland County Fresh Water Supply District No. 1, RB, CAB, Series A, 0.00%, 09/15/27(c)(f)			2,340				1,323,083
New Hope Cultural Education Facilities Finance Corp., RB, Series A, 5.00%, 08/15/50(e)			580				506,427

Security		Par (000)				Value
Texas (continued)
New Hope Cultural Education Facilities Finance Corp., Refunding RB, Series A, 4.00%, 08/15/40		$	4,000			$	4,008,980
North Texas Tollway Authority, RB(c)
Series B, 0.00%, 09/01/31(f)			1,975				976,995
Series C, Convertible, 6.75%, 09/01/31(d)			2,500				3,227,430
Texas City Industrial Development Corp., RB, Series 2012, 4.13%, 12/01/45			330				283,747
							68,339,984
Utah(e) — 0.2%
Utah Charter School Finance Authority, RB, Series A, 5.00%, 06/15/49			235				206,268
Utah Charter School Finance Authority, Refunding RB, 5.00%, 06/15/55			450				392,396
							598,664
Virginia — 6.1%
Hampton Roads Transportation Accountability Commission, RB, Series A, 4.00%, 07/01/52			5,215				5,025,310
Henrico County Economic Development Authority, RB, Class A, 5.00%, 10/01/47			5,750				5,869,008
Tobacco Settlement Financing Corp., Refunding RB, Series B-1, 5.00%, 06/01/47			1,225				1,152,246
Virginia Beach Development Authority, Refunding RB
5.00%, 09/01/40			1,230				1,140,288
4.00%, 09/01/48			885				661,095
Virginia College Building Authority, RB, 4.00%, 02/01/42			5,000				5,067,300
Virginia Housing Development Authority, RB, M/F Housing
Series B, 4.00%, 06/01/53			895				782,458
Series G, 5.15%, 11/01/52			505				524,488
							20,222,193
Washington — 1.6%
Washington Health Care Facilities Authority, Refunding RB, 5.00%, 10/01/38			3,885				3,968,850
Washington State Housing Finance Commission, Refunding RB, 5.00%, 01/01/38(e)			1,400				1,226,719
							5,195,569
West Virginia — 0.8%
West Virginia Hospital Finance Authority, RB, Series A, 4.00%, 06/01/51			3,050				2,766,435
Wisconsin — 1.9%
Public Finance Authority, RB
5.00%, 10/15/51(e)			270				232,616
Class A, 5.00%, 06/15/51(e)			305				240,281
Class A, 6.00%, 06/15/52			175				159,261
Class A, 5.00%, 06/15/56(e)			400				307,717
Class A, 6.13%, 06/15/57			200				183,569
Series A, 5.00%, 07/15/39(e)			120				111,692
Series A, 5.00%, 10/15/40(e)			1,260				1,141,128
Series A, 5.00%, 07/15/49(e)			455				397,641
Series A, 5.00%, 07/15/54(e)			215				183,608
Series A, 5.00%, 07/01/55(e)			395				328,789
Series A-1, 4.50%, 01/01/35(e)			675				600,782