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 811-8215
Name of Fund: BlackRock MuniHoldings Fund II, Inc.
Fund Address: P.O. Box 9011
Princeton, NJ 08543-9011
Name and address of agent for service: Robert C. Doll, Jr., Chief Executive
Officer, BlackRock MuniHoldings Fund II, Inc., 800 Scudders Mill Road,
Plainsboro, NJ, 08536. Mailing address: P.O. Box 9011, Princeton,
NJ, 08543-9011
Registrant's telephone number, including area code: (609) 282-2800
Date of fiscal year end: 07/31/2007
Date of reporting period: 08/01/06 - 10/31/06
Item 1 - Schedule of Investments
BlackRock MuniHoldings Fund II, Inc.
Schedule of Investments as of October 31, 2006 (in Thousands)
Face
State Amount Municipal Bonds Value
Alabama - 2.1% $ 3,450 Jefferson County, Alabama, Limited Obligation School Warrants, Series A,
5% due 1/01/2024 $ 3,615
Arizona - 4.6% 1,000 Arizona Health Facilities Authority Revenue Bonds (Catholic Healthcare West),
Series A, 6.625% due 7/01/2020 1,103
1,365 Maricopa County, Arizona, IDA, Education Revenue Bonds (Arizona Charter
Schools Project 1), Series A, 6.50% due 7/01/2012 1,385
2,060 Phoenix, Arizona, IDA, Airport Facility, Revenue Refunding Bonds (America West
Airlines Inc. Project), AMT, 6.30% due 4/01/2023 2,103
1,000 Pima County, Arizona, IDA, Education Revenue Bonds (Arizona Charter Schools
Project), Series C, 6.75% due 7/01/2031 1,061
1,000 Pinal County, Arizona, COP, 5% due 12/01/2029 1,037
1,095 Show Low, Arizona, Improvement District Number 5, Special Assessment Bonds,
6.375% due 1/01/2015 1,126
Arkansas - 0.6% 1,000 University of Arkansas, University Construction Revenue Bonds (UAMS Campus),
Series B, 5% due 11/01/2022 (d) 1,064
California - 20.8% 2,000 Benicia, California, Unified School District, GO, Refunding, Series A, 5.615%
due 8/01/2020 (b)(m) 1,116
5,200 California State Public Works Board, Lease Revenue Bonds (Department of
Corrections), Series C, 5.25% due 6/01/2028 5,535
1,000 East Side Union High School District, California, Santa Clara County, GO
(Election of 2002), Series D, 5% due 8/01/2020 (i) 1,076
870 Golden State Tobacco Securitization Corporation of California, Tobacco Settlement
Revenue Bonds, Series A-3, 7.875% due 6/01/2042 1,069
8,010 Los Angeles, California, Unified School District, GO, Series A, 5% due 1/01/2028 (d) 8,469
1,750 Poway, California, Unified School District, Special Tax (Community Facilities
District Number 6 Area), Series A, 6.125% due 9/01/2033 1,840
1,820 San Marino, California, Unified School District, GO, Series A, 5.50% due
7/01/2017 (d)(m) 1,178
1,945 San Marino, California, Unified School District, GO, Series A, 5.55% due
7/01/2018 (d)(m) 1,199
2,070 San Marino, California, Unified School District, GO, Series A, 5.60% due
7/01/2019 (d)(m) 1,217
5,525 Sequoia, California, Unified High School District, GO, Refunding, Series B, 5.50%
due 7/01/2035 (c) 6,193
4,925 Tracy, California, Area Public Facilities Financing Agency, Special Tax Refunding
Bonds (Community Facilities District Number 87-1), Series H, 5.875% due 10/01/2019 (d) 5,050
1,250 Tustin, California, Unified School District, Senior Lien Special Tax Bonds
(Community Facilities District Number 97-1), Series A, 5% due 9/01/2032 (c) 1,302
Portfolio Abbreviations
To simplify the listings of BlackRock MuniHoldings Fund II, Inc.'s
portfolio holdings in the Schedule of Investments, we have abbreviated
the names of many of the securities according to the list below.
AMT Alternative Minimum Tax (subject to)
COP Certificates of Participation
DRIVERS Derivative Inverse Tax-Exempt Receipts
EDA Economic Development Authority
EDR Economic Development Revenue Bonds
GO General Obligation Bonds
HDA Housing Development Authority
HFA Housing Finance Agency
IDA Industrial Development Authority
IDR Industrial Development Revenue Bonds
S/F Single-Family
PCR Pollution Control Revenue Bonds
VRDN Variable Rate Demand Notes
BlackRock MuniHoldings Fund II, Inc.
Schedule of Investments as of October 31, 2006 (concluded) (in Thousands)
Face
State Amount Municipal Bonds Value
Colorado - 1.6% $ 1,675 Elk Valley, Colorado, Public Improvement Revenue Bonds (Public Improvement Fee),
Series A, 7.10% due 9/01/2014 $ 1,802
860 Plaza Metropolitan District Number 1, Colorado, Tax Allocation Revenue Bonds
(Public Improvement Fees), 8.125% due 12/01/2025 866
Florida - 7.5% 1,640 Ballantrae, Florida, Community Development District, Capital Improvement Revenue
Bonds, 6% due 5/01/2035 1,729
1,765 Miami-Dade County, Florida, Subordinate Special Obligation Revenue Bonds, Series A,
5.24% due 10/01/2037 (d)(m) 372
2,450 Midtown Miami, Florida, Community Development District, Special Assessment Revenue
Bonds, Series A, 6.25% due 5/01/2037 2,683
2,400 Orange County, Florida, Health Facilities Authority, Hospital Revenue Bonds
(Orlando Regional Healthcare), 6% due 12/01/2012 (h) 2,694
1,515 Orlando, Florida, Greater Orlando Aviation Authority, Airport Facilities Revenue
Bonds (JetBlue Airways Corp.), AMT, 6.50% due 11/15/2036 1,586
525 Palm Coast Park Community Development District, Florida, Special Assessment Revenue
Bonds, 5.70% due 5/01/2037 536
1,270 Preserve at Wilderness Lake, Florida, Community Development District, Capital
Improvement Bonds, Series A, 5.90% due 5/01/2034 1,323
1,700 West Villages Improvement District, Florida, Special Assessment Revenue Refunding
Bonds (Unit of Development Number 2), 5.80% due 5/01/2036 1,772
Georgia - 3.7% 1,250 Atlanta, Georgia, Tax Allocation Bonds (Atlantic Station Project), 7.90% due
12/01/2024 1,391
1,535 Brunswick and Glynn County, Georgia, Development Authority, First Mortgage
Revenue Bonds (Coastal Community Retirement Corporation Project), Series A, 7.25%
due 1/01/2035 1,518
1,945 Fulton County, Georgia, Development Authority, PCR (General Motors Corporation),
Refunding, VRDN, 8% due 4/01/2010 (j) 1,945
1,250 Milledgeville-Baldwin County, Georgia, Development Authority Revenue Bonds
(Georgia College and State University Foundation), 5.50% due 9/01/2024 1,341
Idaho - 1.3% 2,000 Power County, Idaho, Industrial Development Corporation, Solid Waste Disposal
Revenue Bonds (FMC Corporation Project), AMT, 6.45% due 8/01/2032 2,133
Illinois - 2.8% 1,000 Chicago, Illinois, O'Hare International Airport, Special Facility Revenue
Refunding Bonds (American Airlines Inc. Project), 8.20% due 12/01/2024 1,031
1,000 Chicago, Illinois, Special Assessment Bonds (Lake Shore East), 6.75% due 12/01/2032 1,084
2,000 Illinois HDA, Homeowner Mortgage Revenue Bonds, AMT, Sub-Series C-2, 5.25% due
8/01/2022 2,061
500 Illinois State Finance Authority Revenue Bonds (Landing At Plymouth Place Project),
Series A, 6% due 5/15/2025 529
Louisiana - 2.3% 2,500 Louisiana Public Facilities Authority, Hospital Revenue Bonds (Franciscan
Missionaries of Our Lady Health System, Inc.), Series A, 5.25% due 8/15/2036 2,644
1,275 New Orleans, Louisiana, Financing Authority Revenue Bonds (Xavier University of
Louisiana Project), 5.30% due 6/01/2026 (d) 1,345
Maine - 2.1% 3,425 Maine State Housing Authority, Mortgage Purchase Revenue Refunding Bonds, Series B,
5.30% due 11/15/2023 3,578
Maryland - 0.6% 1,050 Maryland State Energy Financing Administration, Limited Obligation Revenue Bonds
(Cogeneration-AES Warrior Run), AMT, 7.40% due 9/01/2019 1,058
Massachusetts - 4.6% 600 Massachusetts State Development Finance Agency Revenue Bonds (Neville Communities
Home), Series A, 5.75% due 6/20/2022 (f) 674
1,500 Massachusetts State Development Finance Agency Revenue Bonds (Neville Communities
Home), Series A, 6% due 6/20/2044 (f) 1,683
2,100 Massachusetts State, HFA, Housing Revenue Bonds, AMT, Series A, 5.25% due 12/01/2048 2,168
3,000 Massachusetts State School Building Authority, Dedicated Sales Tax Revenue Bonds,
Series A, 5% due 8/15/2030 (c) 3,186
Michigan - 0.7% 1,100 Flint, Michigan, Hospital Building Authority, Revenue Refunding Bonds (Hurley
Medical Center), Series A, 6% due 7/01/2020 (k) 1,199
Minnesota - 7.0% 1,680 Minneapolis, Minnesota, Community Development Agency, Supported Development Revenue
Refunding Bonds (Common Bond), Series G-3, 5.35% due 12/01/2011 (h) 1,815
4,220 Minnesota State Municipal Power Agency, Electric Revenue Bonds, 5.25% due 10/01/2021 4,566
2,870 Rockford, Minnesota, Independent School District Number 883, GO, 5.60% due
2/01/2019 (c) 3,034
2,390 Rockford, Minnesota, Independent School District Number 883, GO, 5.60% due
2/01/2020 (c) 2,527
Mississippi - 1.5% 2,000 Mississippi Business Finance Corporation, Mississippi, PCR, Refunding (System
Energy Resources Inc. Project), 5.875% due 4/01/2022 2,006
500 Mississippi Business Finance Corporation, Mississippi, PCR, Refunding (System
Energy Resources Inc. Project), 5.90% due 5/01/2022 502
Missouri - 1.9% 950 Fenton, Missouri, Tax Increment Revenue Refunding and Improvement Bonds (Gravois
Bluffs), 7% due 10/01/2011 (h) 1,100
1,000 Kansas City, Missouri, IDA, First Mortgage Health Facilities Revenue Bonds
(Bishop Spencer Place), Series A, 6.50% due 1/01/2035 1,058
1,000 Missouri State Development Finance Board, Infrastructure Facilities Revenue
Refunding Bonds (Branson), Series A, 5.50% due 12/01/2032 1,048
New Jersey - 11.3% 4,050 New Jersey EDA, Cigarette Tax Revenue Bonds, 5.75% due 6/15/2029 4,406
1,890 New Jersey EDA, Cigarette Tax Revenue Bonds, 5.50% due 6/15/2031 2,013
1,000 New Jersey EDA, Retirement Community Revenue Bonds (Cedar Crest Village Inc.
Facility), Series A, 7.25% due 11/15/2031 1,088
2,000 New Jersey EDA, Retirement Community Revenue Bonds (Seabrook Village Inc.),
Series A, 8.125% due 11/15/2023 2,242
2,000 New Jersey EDA, Special Facility Revenue Bonds (Continental Airlines Inc. Project),
AMT, 6.625% due 9/15/2012 2,142
2,375 New Jersey Health Care Facilities Financing Authority Revenue Bonds (South Jersey
Hospital), 6% due 7/01/2012 (h) 2,643
2,500 New Jersey State Turnpike Authority, Turnpike Revenue Bonds, Series C, 5% due
1/01/2030 (c) 2,649
1,725 Tobacco Settlement Financing Corporation of New Jersey, Asset-Backed Revenue Bonds,
7% due 6/01/2041 1,996
New Mexico - 3.9% 3,675 Farmington, New Mexico, PCR, Refunding (Public Service Company of New Mexico - San
Juan Project), Series A, 5.80% due 4/01/2022 3,689
2,675 New Mexico Finance Authority, Senior Lien State Transportation Revenue Bonds,
Series A, 5.125% due 6/15/2018 (d) 2,904
New York - 11.4% 900 Dutchess County, New York, IDA, Civic Facility Revenue Refunding Bonds (Saint
Francis Hospital), Series A, 7.50% due 3/01/2029 992
415 New York City, New York, City IDA, Civic Facility Revenue Bonds, Series C, 6.80%
due 6/01/2028 458
525 New York City, New York, City IDA, Special Facility Revenue Bonds (Continental
Airlines Inc. Project), AMT, 8% due 11/01/2012 580
525 New York City, New York, City IDA, Special Facility Revenue Bonds (Continental
Airlines Inc. Project), AMT, 8.375% due 11/01/2016 584
3,855 New York City, New York, Sales Tax Asset Receivable Corporation Revenue Bonds,
Series A, 5% due 10/15/2020 (d) 4,153
2,725 New York State Dormitory Authority Revenue Bonds (School Districts Financing
Program), Series D, 5.25% due 10/01/2023 (d) 2,943
20 Suffolk County, New York, IDA, Civic Facility Revenue Bonds (Special Needs
Facilities Pooled Program), Series D-1, 5.50% due 7/01/2007 20
1,100 Tobacco Settlement Financing Corporation of New York Revenue Bonds, Series A-1,
5.50% due 6/01/2015 1,163
2,400 Tobacco Settlement Financing Corporation of New York Revenue Bonds, Series A-1,
5.50% due 6/01/2018 2,603
2,750 Tobacco Settlement Financing Corporation of New York Revenue Bonds, Series C-1,
5.50% due 6/01/2020 (b) 3,003
1,100 Tobacco Settlement Financing Corporation of New York Revenue Bonds, Series C-1,
5.50% due 6/01/2022 1,201
1,575 Westchester County, New York, IDA, Continuing Care Retirement, Mortgage Revenue
Bonds (Kendal on Hudson Project), Series A, 6.50% due 1/01/2034 1,685
North 2,000 North Carolina Eastern Municipal Power Agency, Power System Revenue Bonds, Series
Carolina - 1.3% D, 6.75% due 1/01/2026 2,175
Oklahoma - 1.0% 645 Oklahoma State Housing Finance Agency, S/F Mortgage Revenue Bonds (Homeownership
Loan Program), Series D-2, AMT, 6.25% due 9/01/2029 (f)(g) 651
1,075 Tulsa, Oklahoma, Municipal Airport Trust, Revenue Refunding Bonds (AMR Corporation),
AMT, Series A, 5.375% due 12/01/2035 1,075
Pennsylvania - 3.9% 2,750 Pennsylvania Economic Development Financing Authority, Exempt Facilities Revenue
Bonds (National Gypsum Company), AMT, Series A, 6.25% due 11/01/2027 2,900
540 Philadelphia, Pennsylvania, Authority for IDR, Commercial Development, 7.75% due
12/01/2017 541
2,630 Sayre, Pennsylvania, Health Care Facilities Authority, Revenue Bonds (Guthrie
Healthcare System), Series B, 7.125% due 12/01/2031 3,152
Rhode Island - 1.5% 2,190 Rhode Island State Health and Educational Building Corporation, Hospital Financing
Revenue Bonds (Lifespan Obligation Group), 6.50% due 8/15/2012 (h) 2,508
South 2,080 Medical University Hospital Authority, South Carolina, Hospital Facilities Revenue
Carolina - 2.8% Refunding Bonds, Series A, 6.375% due 8/15/2012 (h) 2,378
2,000 South Carolina Jobs, EDA, EDR (Westminster Presbyterian Center), 7.75% due
11/15/2010 (h) 2,340
Tennessee - 6.9% 300 Blount County, Tennessee, Public Building Authority, Local Government Public
Improvement Revenue Bonds, VRDN, Series A3A, 3.61% due 6/01/2026 (a)(j) 300
2,200 Hardeman County, Tennessee, Correctional Facilities Corporation Revenue Bonds, Series
B, 7.375% due 8/01/2017 2,262
3,450 Shelby County, Tennessee, Health, Educational and Housing Facility Board, Hospital
Revenue Refunding Bonds (Methodist Healthcare), 6.50% due 9/01/2012 (h) 3,970
4,500 Tennessee Energy Acquisition Corporation, Gas Revenue Bonds, Series A, 5.25% due
9/01/2026 5,099
Texas - 8.8% 1,000 Alliance Airport Authority, Inc., Texas, Special Facilities Revenue Bonds (American
Airlines Inc. Project), AMT, 7.50% due 12/01/2029 1,020
2,665 Austin, Texas, Convention Center Revenue Bonds (Convention Enterprises Inc.), First
Tier, Series A, 6.70% due 1/01/2028 2,841
600 Bell County, Texas, Health Facilities Development Corporation, Hospital Revenue
Bonds (Scott & White Memorial Hospital), VRDN, Series B-2, 3.63% due 8/15/2029 (d)(j) 600
1,000 Brazos River Authority, Texas, PCR, Refunding (TXU Energy Company LLC Project),
Series B, 4.75% due 5/01/2029 1,000
2,500 Brazos River, Texas, Harbor Navigation District, Brazoria County Environmental
Revenue Refunding Bonds (Dow Chemical Company Project), AMT, Series A-7, 6.625%
due 5/15/2033 2,804
843 Harris County, Texas, Revenue Refunding Bonds, DRIVERS, Series 1111, 6.611% due
8/15/2009 (c)(e) 928
1,300 Houston, Texas, Health Facilities Development Corporation, Retirement Facility
Revenue Bonds (Buckingham Senior Living Community), Series A, 7.125% due 2/15/2034 1,447
2,965 Matagorda County, Texas, Navigation District Number 1, Revenue Refunding Bonds
(Reliant Energy Inc.), Series C, 8% due 5/01/2029 3,153
1,100 Port Corpus Christi, Texas, Individual Development Corporation, Environmental
Facilities Revenue Bonds (Citgo Petroleum Corporation Project), AMT, 8.25% due
11/01/2031 1,138
Vermont - 0.6% 1,000 Vermont Educational and Health Buildings Financing Agency, Revenue Bonds
(Developmental and Mental Health), Series A, 6.50% due 6/15/2032 1,066
Virginia - 13.2% 425 Chesterfield County, Virginia, IDA, PCR (Virginia Electric and Power Company),
Series A, 5.875% due 6/01/2017 460
575 Chesterfield County, Virginia, IDA, PCR, Refunding (Virginia Electric and Power
Company), Series B, 5.875% due 6/01/2017 626
5,000 Fairfax County, Virginia, EDA, Resource Recovery Revenue Refunding Bonds, AMT,
Series A, 6.10% due 2/01/2011 (a) 5,451
3,885 Pocahontas Parkway Association, Virginia, Toll Road Revenue Bonds, Senior-Series A,
5.50% due 8/15/2008 (h) 4,090
18,400 Pocahontas Parkway Association, Virginia, Toll Road Revenue Bonds, Senior-Series B,
7.35% due 8/15/2008 (h)(m) 4,894
2,185 Tobacco Settlement Financing Corporation of Virginia, Asset Backed Revenue Bonds,
5.625% due 6/01/2037 2,331
1,095 Virginia State HDA, Rental Housing Revenue Bonds, AMT, Series B, 5.625% due 8/01/2011 1,146
3,200 Virginia State HDA, Revenue Bonds, AMT, Series D, 6% due 4/01/2024 3,343
Washington - 0.6% 1,015 Seattle, Washington, Housing Authority Revenue Bonds (Replacement Housing Project),
6.125% due 12/01/2032 1,043
Wisconsin - 0.9% 1,360 Wisconsin State Health and Educational Facilities Authority Revenue Bonds (Synergyhealth
Inc.), 6% due 11/15/2032 1,486
Puerto Rico - 1.3% 510 Puerto Rico Commonwealth, Public Improvement, GO, Refunding, Series B, 5.25% due
7/01/2032 551
1,550 Puerto Rico Industrial, Medical and Environmental Pollution Control Facilities
Financing Authority, Special Facilities Revenue Bonds (American Airlines Inc.),
Series A, 6.45% due 12/01/2025 1,572
U.S. Virgin 2,680 Virgin Islands Government Refinery Facilities, Revenue Refunding Bonds (Hovensa
Islands - 1.8% Coker Project), AMT, 6.50% due 7/01/2021 3,023
Total Municipal Bonds (Cost - $214,148) - 136.9% 231,846
Municipal Bonds Held in Trust (o)
California - 3.3% 5,130 California Pollution Control Financing Authority, PCR, Refunding (Pacific Gas and
Electric), AMT, Series A, 5.35% due 12/01/2016 (d) 5,519
Maryland - 5.0% 7,765 Baltimore, Maryland, Convention Center Hotel Revenue Bonds, Senior Series A, 5.25%
due 9/01/2039 (i) 8,442
Michigan - 3.1% 5,000 Michigan State Strategic Fund, Limited Obligation Revenue Refunding Bonds (Detroit
Edison Company Pollution Control Project), AMT, Series C, 5.65% due 9/01/2029 (i) 5,327
New York - 2.0% 3,200 New York City, New York, Sales Tax Asset Receivable Corporation Revenue Bonds,
Series A, 5.25% due 10/15/2027 (a) 3,477
South 8,400 South Carolina State Ports Authority, Ports Revenue Bonds, AMT, 5.30% due
Carolina - 5.1% 7/01/2026 (c) 8,642
Texas - 4.4% 7,045 Harris County, Texas, Toll Road Revenue Refunding Bonds, Senior Lien, Series A,
5.25% due 8/15/2035 (c) 7,395
Total Municipal Bonds Held in Trust (Cost - $38,367) - 22.9% 38,802
Shares
Held Short-Term Securities
12 Merrill Lynch Institutional Tax-Exempt Fund, 3.38% (l)(n) 12
Total Short-Term Securities (Cost - $12) - 0.0% 12
Total Investments (Cost - $252,527*) - 159.8% 270,660
Other Assets Less Liabilities - 2.5% 4,202
Liabilities for Trust Certificates, Including Interest Expense Payable - (10.9%) (18,428)
Preferred Stock, at Redemption Value - (51.4%) (87,037)
-----------
Net Assets Applicable to Common Stock - 100.0% $ 169,397
===========
* The cost and unrealized appreciation (depreciation) of investments
as of October 31, 2006, as computed for federal income tax purposes,
were as follows:
Aggregate cost $ 234,465
===============
Gross unrealized appreciation $ 17,975
Gross unrealized depreciation (50)
---------------
Net unrealized appreciation $ 17,925
===============
(a) AMBAC Insured.
(b) FGIC Insured.
(c) FSA Insured.
(d) MBIA Insured.
(e) The rate disclosed is that currently in effect. This rate changes
periodically and inversely based upon prevailing market rates.
(f) GNMA Collateralized.
(g) FNMA Collateralized.
(h) Prerefunded.
(i) XL Capital Insured.
(j) Security may have a maturity of more than one year at time of issuance,
but has variable rate and demand features that qualify it as a short-term
security. The rate disclosed is that currently in effect. This rate changes
periodically based upon prevailing market rates.
(k) ACA Insured.
(l) Investments in companies considered to be an affiliate of the Fund,
for purposes of Section 2(a)(3) of the Investment Company Act of 1940,
were as follows:
Net Interest
Affiliate Activity Income
Merrill Lynch Institutional
Tax-Exempt Fund - -*
* Amount is less than $1,000.
(m) Represents a zero coupon bond; the interest rate shown reflects the
effective yield at the time of purchase.
(n) Represents the current yield as of October 31, 2006.
(o) Securities represent underlying bonds transferred to a separate
securitization trust established in a tender option bond transaction
in which the Fund may have acquired the residual interest certificates.
These securities serve as collateral in a financing transaction.
Item 2 - Controls and Procedures
2(a) - The Registrant's principal executive and principal financial officers
have evaluated the Registrant's disclosure controls and procedures,
including internal control over financial reporting, within 90 days of
this filing. Such principal officers have concluded that as of
January 23, 2007 the Registrant's disclosure controls and procedures
were effective in design and operation to reasonably ensure that
information required to be disclosed by the Registrant in this Form
N-Q was recorded, processed, summarized, and reported within the
required time periods, and were sufficient to form the basis of the
certifications required by Rule 30a-2 of the Investment Company Act of
1940, as amended. Prior to reaching that conclusion, such principal
officers had become aware of matters relating to the Registrant's
participation in certain inverse floater structures that necessitated
adjustments to financial information included in the Registrant's
annual report to shareholders on Form N-CSR. As a result, management
of the Registrant had reevaluated certain disclosure controls and
procedures determined not to be effective, as discussed more fully
below.
Management of the Registrant 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. The Registrant'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 U.S. generally
accepted accounting principles. Such internal control includes
policies and procedures that provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use or
disposition of a registrant'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 control deficiency 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 significant deficiency is a
control deficiency, or combination of control deficiencies, that
adversely affects the Registrant's ability to initiate, authorize,
record, process or report financial data reliably in accordance with
generally accepted accounting principles such that there is more than
a remote likelihood that a misstatement of the Registrant's annual or
interim financial statements that is more than inconsequential will
not be prevented or detected. A material weakness is a significant
deficiency, or combination of significant deficiencies, that results
in more than a remote likelihood that a material misstatement of the
annual or interim financial statements will not be prevented or
detected.
The Registrant identified the following control deficiency, that was
determined to be a material weakness, as defined above, in the
Registrant's internal control over financial reporting at October 31,
2006. The Registrant's controls related to the review and analysis
of relevant terms and conditions of transfers of certain assets
pertaining to inverse floater structures were not operating
effectively to appropriately determine whether the transfers of assets
qualified for sale accounting under the provisions of Statement of
Financial Accounting Standards No. 140, "Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities"
("SFAS 140"). As a result, these controls did not detect that certain
transfers were not appropriately recorded as borrowings. Accordingly,
the Registrant's schedule of investments as of and for the period
ended October 31, 2006, were restated to appropriately reflect
transfers of such securities as secured borrowings. These adjustments
had no impact on net assets, net asset value per share or total
return.
Subsequent to October 31, 2006, but prior to the evaluation of the
design and operation of the Registrant's disclosure controls and
procedures at January 23, 2007, the Registrant's disclosure controls
and procedures were modified to enhance the review and analysis of the
relevant terms and conditions of transfers of securities in connection
with inverse floater structures in light of SFAS 140.
2(b) - There have been no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the Act
(17 CFR 270.30a-3(d)) that occurred during the last fiscal quarter of
the period covered by this report that has materially affected, or are
reasonably likely to materially affect, the registrant's internal
control over financial reporting. However, as discussed above,
subsequent to October 31, 2006, the Registrant has enhanced controls
related to the application of SFAS 140.
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 Fund II, Inc.
By: /s/ Robert C. Doll, Jr.
-----------------------
Robert C. Doll, Jr.
Chief Executive Officer
BlackRock MuniHoldings Fund II, Inc.
Date: February 20, 2007
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/ Robert C. Doll, Jr.
-----------------------
Robert C. Doll, Jr.
Chief Executive Officer
BlackRock MuniHoldings Fund II, Inc.
Date: February 20, 2007
By: /s/ Donald C. Burke
-------------------
Donald C. Burke
Chief Financial Officer
BlackRock MuniHoldings Fund II, Inc.
Date: February 20, 2007