BLACKROCK MUNIYIELD MICHIGAN 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 811-06501

Name of Fund: BlackRock MuniYield Michigan Quality Fund II, Inc. (MYM)

Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809

Name and address of agent for service: John M. Perlowski, Chief Executive Officer, BlackRock MuniYield Michigan 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: 07/31/2013

Date of reporting period: 04/30/2013

Item 1    –    Schedule of Investments

Schedule of Investments April 30, 2013 (Unaudited)    BlackRock MuniYield Michigan Quality Fund II, Inc. (MYM)
   (Percentages shown are based on Net Assets)

 

Municipal Bonds

    Par
(000)		      Value  

Michigan – 126.6%

      

Corporate – 4.2%

      

Dickinson County EDC, Michigan, Refunding RB, International Paper Co. Project, Series A,

      

5.75%, 6/01/16

    $ 2,500       $ 2,509,550   

Monroe County EDC, Michigan, Refunding RB, Detroit Edison Co. Project, Series AA (NPFGC),

      

6.95%, 9/01/22

      3,805         5,162,015   
     

 

 

  
        7,671,565   
     

 

 

  

County/City/Special District/School District – 37.5%

      

Adrian City School District Michigan, GO (AGM),

      

5.00%, 5/01/14(a)

      2,400         2,512,704   

Anchor Bay School District, GO, Refunding (Q-SBLF):

      

4.13%, 5/01/25

      2,000         2,214,020   

4.25%, 5/01/26

      1,145         1,262,443   

4.38%, 5/01/27

      640         704,429   

4.00%, 5/01/28

      760         810,928   

4.38%, 5/01/28

      400         437,088   

4.00%, 5/01/29

      380         403,245   

4.50%, 5/01/29

      605         666,879   

Bay City School District Michigan, GO, School Building & Site (AGM) (Q-SBLF),

      

5.00%, 5/01/36

      200         217,972   

Brighton Area School District, GO, School Building, Series I (Q-SBLF),

      

4.25%, 5/01/37

      1,430         1,485,284   

Charter Township of Canton Michigan, GO, Capital Improvement (AGM):

      

5.00%, 4/01/25

      1,250         1,422,350   

5.00%, 4/01/26

      1,250         1,405,025   

5.00%, 4/01/27

      500         562,710   

Chippewa Valley Schools, GO, Refunding (Q-SBLF):

      

5.00%, 5/01/31

      1,140         1,328,271   

5.00%, 5/01/32

      1,220         1,414,639   

City of Jackson, GO, CAB, Downtown Development (AGM),

      

4.54%, 6/01/26(b)

      2,710         1,505,242   

City of Oak Park Michigan, GO, Street Improvement (NPFGC),

      

5.00%, 5/01/30

      600         652,266   

Comstock Park Public Schools, GO, School Building & Site, Series B (Q-SBLF):

      

5.50%, 5/01/36

      450         519,476   

5.50%, 5/01/41

      830         956,882   

County of Genesee Michigan, GO, Water Supply System (NPFGC),

      

5.13%, 11/01/33

      500         509,935   

County of Genesee Michigan, GO, Refunding, Series A (NPFGC),

      

5.00%, 5/01/19

      400         429,276   

County of St. Clair, GO, Refunding, Limited Tax,

      

5.00%, 4/01/28

      915         1,062,699   

Dearborn Brownfield Redevelopment Authority, GO, Limited Tax, Redevelopment, Series A (AGC),

      

5.50%, 5/01/39

      2,000         2,249,420   

Detroit City School District Michigan, GO, School Building & Site Improvement (NPFGC)(a):

      

Series A, 5.38%, 5/01/13

      1,480         1,480,192   

Series B, 5.00%, 5/01/13

      1,600         1,600,192   

Eaton Rapids Public Schools Michigan, GO, School Building & Site (AGM) (Q-SBLF),

      

5.25%, 5/01/14(a)

      2,000         2,099,540   

Flint EDC, RB, Michigan Department of Human Services Office Building,

      

5.25%, 10/01/41

      1,880         2,029,780   

Fraser Public School District, GO, School Building & Site (AGM) (Q-SBLF),

      

5.00%, 5/01/25

      1,255         1,361,976   

Gibraltar School District Michigan, GO, School Building & Site Improvement (NPFGC) (Q-SBLF)(a):

      

5.00%, 5/01/14

      585         612,653   

5.00%, 5/01/14

      3,065         3,208,932   

Goodrich Area School District, GO, School Building & Site (Q-SBLF):

      

5.50%, 5/01/32

      400         468,504   

5.50%, 5/01/36

      800         929,616   

5.50%, 5/01/41

      1,000         1,150,590   

Gull Lake Community School District, GO, Refunding (AGM) (Q-SBLF),

      

4.00%, 5/01/26

      500         529,605   

Harper Creek Community School District Michigan, GO, Refunding (AGM) (Q-SBLF),

      

5.00%, 5/01/22

      1,000         1,085,240   

Harper Woods School District Michigan, GO, Refunding, School Building & Site (NPFGC),

      

5.00%, 5/01/14(a)

      10         10,353   

Howell Public Schools, GO, Refunding (Q-SBLF),

      

4.50%, 5/01/29

      660         745,939   

Hudsonville Public Schools, GO, School Building & Site (Q-SBLF),

      

5.25%, 5/01/41

      2,650         3,002,874   

Jonesville Community Schools Michigan, GO, Refunding (NPFGC) (Q-SBLF),

      

5.00%, 5/01/29

      1,085         1,157,586   

L’Anse Creuse Public Schools Michigan, GO, School Building & Site (AGM) (Q-SBLF):

      

5.00%, 5/01/25

      1,000         1,085,240   

5.00%, 5/01/26

      1,050         1,132,939   

5.00%, 5/01/35

      2,000         2,129,580   

 

    BLACKROCK MUNIYIELD MICHIGAN QUALITY FUND II, INC.    APRIL 30, 2013   1

Schedule of Investments (continued)    BlackRock MuniYield Michigan Quality Fund II, Inc. (MYM)
   (Percentages shown are based on Net Assets)

 

Municipal Bonds

    Par
(000)		      Value  

Michigan (continued)

      

County/City/Special District/School District (concluded)

      

Lincoln Consolidated School District Michigan, GO, Refunding (NPFGC) (Q-SBLF),

      

4.63%, 5/01/28

    $ 2,325       $ 2,490,470   

Livonia Public Schools School District Michigan, GO, Refunding, Series A (NPFGC),

      

5.00%, 5/01/24

      500         521,260   

Ludington Area School District Michigan, GO, (NPFGC),

      

5.25%, 5/01/23

      1,440         1,470,946   

New Lothrop Area Public Schools Michigan, GO, School Building & Site (AGM) (Q-SBLF),

      

5.00%, 5/01/35

      1,200         1,293,648   

Parchment School District, County of Kalamazoo, State of Michigan, GO, School Building and Site (NPFGC) (Q-SBLF),

      

5.00%, 5/01/25

      590         678,494   

Reed City Public Schools Michigan, GO, School Building & Site (AGM) (Q-SBLF),

      

5.00%, 5/01/14(a)

      1,000         1,047,470   

Romulus Community Schools, GO, Unlimited Tax, Refunding (AGM) (Q-SBLF):

      

4.13%, 5/01/25

      715         783,676   

4.25%, 5/01/26

      740         810,529   

4.25%, 5/01/27

      725         788,699   

4.50%, 5/01/29

      630         689,749   

4.00%, 5/01/24

      500         547,385   

4.38%, 5/01/28

      1,335         1,457,286   

Southfield Public Schools Michigan, GO, School Building & Site, Series B (AGM) (Q-SBLF),

      

5.00%, 5/01/14(a)

      1,000         1,047,270   

Sparta Area Schools Michigan, GO, School Building & Site (NPFGC) (Q-SBLF),

      

5.00%, 5/01/14(a)

      1,000         1,046,440   

Thornapple Kellogg School District Michigan, GO, Refunding, School Building & Site (NPFGC) (Q-SBLF),

      

5.00%, 5/01/32

      1,500         1,664,775   

Van Dyke Public Schools Michigan, GO, School Building & Site (AGM) (Q-SBLF),

      

5.00%, 5/01/28

      750         854,047   

Zeeland Public Schools Michigan, GO, School Building & Site (NPFGC),

      

5.00%, 5/01/14(a)

      1,230         1,288,142   
     

 

 

  
        69,034,800   
     

 

 

  

Education – 9.2%

      

Ferris State University, Refunding RB, General (AGM):

      

4.50%, 10/01/23

      1,360         1,507,587   

4.50%, 10/01/24

      1,595         1,756,143   

4.50%, 10/01/25

      1,405         1,535,384   

Lake Superior State University, Refunding RB (AGM):

      

4.00%, 11/15/26

      475         502,925   

4.00%, 11/15/27

      285         300,231   

4.00%, 11/15/28

      190         199,249   

4.00%, 11/15/29

      250         260,470   

4.00%, 11/15/30

      190         197,102   

Michigan Higher Education Facilities Authority, RB, Limited Obligation, Hillsdale College Project,

      

5.00%, 3/01/35

      1,030         1,040,784   

Michigan State University, Refunding RB, General, Series C:

      

5.00%, 2/15/40

      3,770         4,171,430   

5.00%, 2/15/44

      1,000         1,100,710   

Michigan Technological University, Refunding RB, Series A,

      

5.00%, 10/01/34

      1,000         1,127,970   

Saginaw Valley State University Michigan, Refunding RB, General (NPFGC),

      

5.00%, 7/01/24

      1,450         1,525,458   

Western Michigan University, Refunding RB, General,

      

5.25%, 11/15/40

      1,400         1,598,380   
     

 

 

  
        16,823,823   
     

 

 

  

Health – 23.9%

      

Flint Hospital Building Authority Michigan, Refunding RB, Hurley Medical Center (ACA),

      

6.00%, 7/01/20

      570         572,069   

Kalamazoo Hospital Finance Authority, RB, Bronson Methodist Hospital (AGM),

      

5.25%, 5/15/36

      2,750         3,078,955   

Kent Hospital Finance Authority Michigan, Refunding RB, Spectrum Health, Series A:

      

5.50%, 11/15/25

      750         910,507   

5.00%, 11/15/29

      3,000         3,395,970   

Michigan Finance Authority, Refunding RB, Hospital Revenue, Oakwood Obligated Group,

      

5.00%, 8/15/31

      1,065         1,191,256   

Michigan State Finance Authority, RB, Sparrow Obligated Group,

      

5.00%, 11/15/36

      950         1,053,350   

Michigan State Finance Authority, Refunding RB, Trinity Health Credit:

      

5.00%, 12/01/31

      1,900         2,176,431   

5.00%, 12/01/35

      1,900         2,135,201   

Michigan State Hospital Finance Authority, RB:

      

Ascension Health Senior Credit Group, 5.00%, 11/15/25

      2,300         2,699,855   

McLaren Health Care, Series C, 5.00%, 8/01/35

      1,585         1,694,381   

MidMichigan Obligation Group, Series A, 5.00%, 4/15/26

      380         400,900   

 

2   BLACKROCK MUNIYIELD MICHIGAN QUALITY FUND II, INC.    APRIL 30, 2013    

Schedule of Investments (continued)    BlackRock MuniYield Michigan Quality Fund II, Inc. (MYM)
   (Percentages shown are based on Net Assets)

 

Municipal Bonds

    Par
(000)		      Value  

Michigan (continued)

      

Health (concluded)

      

Michigan State Hospital Finance Authority, RB (concluded):

      

MidMichigan Obligation Group, Series A (AMBAC), 5.50%, 4/15/18

    $ 1,000       $ 1,003,250   

Trinity Health Credit, Series A, 5.00%, 12/01/16(a)

      145         167,191   

Trinity Health Credit, Series A, 5.00%, 12/01/26

      855         951,794   

Michigan State Hospital Finance Authority, Refunding RB:

      

Hospital, Oakwood Obligation Group, Series A, 5.00%, 7/15/21

      400         450,904   

Hospital, Oakwood Obligation Group, Series A, 5.00%, 7/15/25

      2,470         2,669,848   

Hospital, Oakwood Obligation Group, Series A, 5.00%, 7/15/37

      3,340         3,507,601   

Hospital, Sparrow Obligated Group, 5.00%, 11/15/31

      1,595         1,698,771   

McLaren Health Care, 5.75%, 5/15/38

      1,500         1,732,875   

McLaren Health Care, Series A, 5.00%, 6/01/35

      860         955,391   

Trinity Health Credit, Series A, 6.13%, 12/01/23

      940         1,150,081   

Trinity Health Credit, Series A, 6.25%, 12/01/28

      570         686,856   

Trinity Health Credit, Series A, 6.50%, 12/01/33

      1,400         1,692,530   

Trinity Health Credit, Series C, 4.00%, 12/01/32

      3,040         3,150,170   

Royal Oak Hospital Finance Authority Michigan, Refunding RB, William Beaumont Hospital,

      

8.25%, 9/01/39

      1,000         1,281,170   

Sturgis Building Authority, RB, Sturgis Hospital Project (NPFGC),

      

4.75%, 10/01/34

      3,525         3,583,938   
     

 

 

  
        43,991,245   
     

 

 

  

Housing – 6.6%

      

Michigan State HDA, RB:

      

Deaconess Tower AMT (Ginnie Mae), 5.25%, 2/20/48

      1,000         1,038,780   

Series A, 4.75%, 12/01/25

      2,605         2,878,239   

Series A (NPFGC), 5.30%, 10/01/37

      20         20,021   

Michigan State HDA, Refunding RB:

      

Rental Housing Revenue, Series D, 4.50%, 10/01/48

      5,980         6,071,494   

Series A, 6.05%, 10/01/41

      2,000         2,168,700   
     

 

 

  
        12,177,234   
     

 

 

  

State – 15.7%

      

Michigan Municipal Bond Authority, Refunding RB, Local Government, Charter County Wayne, Series B (AGC),

      

5.38%, 11/01/24

      125         145,778   

Michigan State Building Authority, Refunding RB, Facilities Program:

      

Series A, 5.50%, 10/15/45

      750         868,500   

Series H (AGM), 5.00%, 10/15/26

      3,000         3,420,540   

Series I, 6.25%, 10/15/38

      2,350         2,849,257   

Series I (AGC), 5.25%, 10/15/24

      2,000         2,390,200   

Series I (AGC), 5.25%, 10/15/25

      1,500         1,792,650   

Series I (AGC), 5.25%, 10/15/26

      400         475,908   

Series I-A, 5.38%, 10/15/41

      2,175         2,503,969   

Series II (NPFGC), 5.00%, 10/15/29

      2,000         2,037,040   

Michigan State Finance Authority, RB, Local Government Loan Program, Series F,

      

5.25%, 10/01/41

      2,510         2,749,228   

Michigan Strategic Fund, Refunding RB, Cadillac Place Office Building Project,

      

5.25%, 10/15/31

      1,000         1,144,470   

State of Michigan, RB, GAB (AGM),

      

5.25%, 9/15/27

      3,250         3,773,672   

State of Michigan Trunk Line Fund, RB:

      

5.00%, 11/15/29

      750         886,440   

5.00%, 11/15/33

      1,150         1,339,106   

5.00%, 11/15/36

      2,220         2,568,651   
     

 

 

  
        28,945,409   
     

 

 

  

Transportation – 11.6%

      

Wayne County Airport Authority, RB, Detroit Metropolitan Wayne County Airport, AMT (NPFGC):

      

5.25%, 12/01/25

      4,475         4,892,652   

5.25%, 12/01/26

      3,700         4,045,321   

5.00%, 12/01/34

      3,550         3,824,202   

Wayne County Airport Authority, Refunding RB, AMT (AGC):

      

5.75%, 12/01/26

      3,060         3,629,772   

5.38%, 12/01/32

      4,300         4,894,604   
     

 

 

  
        21,286,551   
     

 

 

  

Utilities – 17.9%

      

City of Detroit Michigan Water Supply System, RB:

      

Second Lien, Series B (AGM), 7.00%, 7/01/36

      2,000         2,409,900   

Senior Lien, Series A (NPFGC), 5.00%, 7/01/34

      4,000         4,000,040   

City of Detroit Michigan Water Supply System, Refunding RB, Second Lien, Series C (AGM),

      

5.00%, 7/01/29

      6,275         6,452,206   

 

    BLACKROCK MUNIYIELD MICHIGAN QUALITY FUND II, INC.    APRIL 30, 2013   3

Schedule of Investments (continued)    BlackRock MuniYield Michigan Quality Fund II, Inc. (MYM)
   (Percentages shown are based on Net Assets)

 

Municipal Bonds

    Par
(000)		      Value  

Michigan (concluded)

      

Utilities (concluded)

      

City of Grand Rapids Michigan, Refunding RB, Series A (NPFGC),

      

5.50%, 1/01/22

    $ 1,500       $ 1,882,125   

City of Grand Rapids Michigan Sanitary Sewer System, RB:

      

5.00%, 1/01/37

      570         658,316   

4.00%, 1/01/42

      1,050         1,086,603   

City of Port Huron Michigan, RB, Water Supply:

      

5.25%, 10/01/31

      190         211,278   

5.63%, 10/01/40

      500         561,760   

City of Wyoming Michigan, RB, Sewer System (NPFGC),

      

5.00%, 6/01/30

      5,300         5,661,089   

Lansing Board of Water & Light Utilities System, RB, Series A:

      

5.00%, 7/01/27

      1,210         1,412,772   

5.00%, 7/01/31

      2,600         3,004,742   

5.00%, 7/01/37

      1,270         1,449,807   

5.50%, 7/01/41

      2,000         2,366,160   

Michigan Municipal Bond Authority, RB, Clean Water Revolving Fund:

      

Pooled Project, 5.00%, 10/01/27

      760         917,981   

Subordinate, 5.00%, 10/01/27

      750         847,147   
     

 

 

  
        32,921,926   
     

 

 

  

Total Municipal Bonds in Michigan

         232,852,553   
     

 

 

  

Guam – 2.6%

      

State – 2.0%

      

Government of Guam Business Privilege Tax Revenue, RB, Series A,

      

5.13%, 1/01/42

      1,800         2,008,458   

Territory of Guam, Limited Obligation Bonds, RB, Section 30, Series A,

      

5.63%, 12/01/29

      850         946,407   

Territory of Guam, RB, Series B-1,

      

5.00%, 1/01/37

      715         792,313   
     

 

 

  
        3,747,178   
     

 

 

  

Utilities – 0.6%

      

Guam Power Authority, Refunding RB, Series A:

      

5.00%, 10/01/34

      335         370,765   

(AGM), 5.00%, 10/01/26

      600         708,480   
     

 

 

  
        1,079,245   
     

 

 

  

Total Municipal Bonds in Guam

         4,826,423   
     

 

 

  

Puerto Rico – 7.2%

      

State – 5.6%

      

Puerto Rico Sales Tax Financing Corp., Refunding RB:

      

CAB, Series A (NPFGC), 5.67%, 8/01/43(b)

      12,500         2,304,250   

CAB, Series A (NPFGC), 5.73%, 8/01/46(b)

      30,000         4,581,300   

First Sub-Series C (AGM), 5.13%, 8/01/42

      3,200         3,387,328   
     

 

 

  
        10,272,878   
     

 

 

  

Transportation – 1.2%

      

Puerto Rico Highway & Transportation Authority, Refunding RB, Series CC (AGC),

      

5.50%, 7/01/31

      2,000         2,212,060   
     

 

 

  

Utilities – 0.4%

      

Puerto Rico Electric Power Authority, RB, Series WW,

      

5.50%, 7/01/38

      680         687,555   
     

 

 

  

Total Municipal Bonds in Puerto Rico

         13,172,493   
     

 

 

  

Total Municipal Bonds – 136.4%

         250,851,469   
     

 

 

  

Municipal Bonds Transferred to Tender Option Bond (TOB) Trusts(c)

  

Michigan – 16.0%

      

County/City/Special District/School District – 4.2%

      

Lakewood Public Schools Michigan, GO, School Building & Site (AGM) (Q-SBLF),

      

5.00%, 5/01/37

      3,970         4,593,747   

Portage Public Schools Michigan, GO, School Building & Site (AGM),

      

5.00%, 5/01/31

      2,850         3,185,929   
     

 

 

  
        7,779,676   
     

 

 

  

Education – 6.2%

      

Saginaw Valley State University, Refunding RB, General (AGM),

      

5.00%, 7/01/31

      2,500         2,815,475   

Wayne State University, Refunding RB, General (AGM),

      

5.00%, 11/15/35

      7,793         8,647,180   
     

 

 

  
        11,462,655   
     

 

 

  

Health – 1.0%

      

Michigan Finance Authority, Refunding RB, Trinity Health Credit Group,

      

5.00%, 12/01/39

      1,650         1,834,718   
     

 

 

  

Utilities – 4.6%

      

City of Grand Rapids Michigan, RB, Sanitary Sewer System (NPFGC),

      

5.00%, 7/01/14(a)

      6,898         7,270,402   

 

4   BLACKROCK MUNIYIELD MICHIGAN QUALITY FUND II, INC.    APRIL 30, 2013    

Schedule of Investments (continued)    BlackRock MuniYield Michigan Quality Fund II, Inc. (MYM)
   (Percentages shown are based on Net Assets)

 

Municipal Bonds Transferred to Tender Option Bond (TOB) Trusts (c)

    Par
(000)		      Value  

Michigan (concluded)

      

Utilities (concluded)

      

Detroit Water and Sewerage Department, Refunding RB, Senior Lien, Series A,

      

5.25%, 7/01/39

    $ 1,012       $ 1,104,260   
     

 

 

  
        8,374,662   
     

 

 

  

Total Municipal Bonds Transferred to Tender Option Bond (TOB) Trusts – 16.0%

         29,451,711   
     

 

 

  

Total Long-Term Investments
(Cost – $259,005,661) – 152.4%

         280,303,180   
     

 

 

  

Short-Term Securities

    Shares         

BIF Michigan Municipal Money Fund,

      

0.00% (d)(e)

      2,001,457       $ 2,001,457   
     

 

 

  

Total Short-Term Securities
(Cost – $2,001,457) – 1.1%

         2,001,457   
     

 

 

  

Total Investments (Cost – $261,007,118*) – 153.5%

         282,304,637   

Other Assets Less Liabilities – 2.0%

         3,715,139   

Liability for TOB Trust Certificates, Including Interest Expense and Fees Payable – (8.0)%

         (14,770,335 ) 

VRDP Shares, at Liquidation Value – (47.5)%

         (87,300,000 ) 
     

 

 

  

Net Assets Applicable to Common Shares – 100.0%

       $ 183,949,441   
     

 

 

  

 

* As of April 30, 2013, gross unrealized appreciation and gross unrealized depreciation based on cost for federal income tax purposes were as follows:

 

Tax cost

    $ 246,797,337   
  

 

 

  

Gross unrealized appreciation

    $ 22,896,552   

Gross unrealized depreciation

      (1,967,436 ) 
  

 

 

  

Net unrealized appreciation

    $ 20,929,116   
  

 

 

  

Notes to Schedule of Investments

 

(a) US 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) Represents a zero-coupon bond. Rate shown reflects the current yield as of report date.

 

(c) Securities represent bonds transferred to a TOB in exchange for which the Fund acquired residual interest certificates. These securities serve as collateral in a financing transaction.

 

(d) Investments in issuers considered to be an affiliate of the Fund during the period ended April 30, 2013, for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:

 

Affiliate

    Shares Held at
July 31,
2012		      Net Activity     Shares Held at
April 30,
2013		      Income  

BIF Michigan Municipal Money Fund

      6,554,292         (4,552,835 )      2,001,457         –   

 

(e) Represents the current yield as of report date.

 

    BLACKROCK MUNIYIELD MICHIGAN QUALITY FUND II, INC.    APRIL 30, 2013   5

Schedule of Investments (continued)    BlackRock MuniYield Michigan Quality Fund II, Inc. (MYM)
  

 

Portfolio Abbreviations

 

To simplify the listings of portfolio holdings in the Schedule of  

ACA

   American Capital Access Corp.
Investments, the names and descriptions of many of the  

AGC

   Assured Guaranty Corp.
securities have been abbreviated according to the following  

AGM

   Assured Guaranty Municipal Corp.
list:  

AMBAC

   American Municipal Bond Assurance Corp.
 

AMT

   Alternative Minimum Tax (subject to)
 

CAB

   Capital Appreciation Bonds
 

EDC

   Economic Development Corp.
 

GAB

   Grant Anticipation Bonds
 

GO

   General Obligation Bonds
 

Ginnie Mae

   Government National Mortgage Association
 

HDA

   Housing Development Authority
 

NPFGC

   National Public Finance Guarantee Corp.
 

Q-SBLF

   Qualified School Bond Loan Fund
 

RB

   Revenue Bonds

 

• Financial futures contracts as of April 30, 2013 were as follows:

 

Contracts

Sold

   

Issue

    Exchange    Expiration    Notional
Value		      Unrealized
Depreciation		  
(55)    10-Year US Treasury Note    Chicago Board of Trade    June 2013    $ 7,334,766       $ (109,213 ) 

 

• For Fund compliance purposes, the Fund’s sector classifications refer to any one or more of the sector sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by Fund management. These definitions may not apply for purposes of this report, which may combine such sector sub-classifications for reporting ease.

 

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

 

  •  

Level 1 – unadjusted price quotations in active markets/exchanges for identical assets and 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 level in the fair value hierarchy within which the fair value measurement falls in its entirety is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. In accordance with the Fund’s policy, transfers between different levels of the fair value disclosure hierarchy are deemed to have occurred as of the beginning of the reporting period. The categorization of a value determined for investments and derivative financial instruments is based on the pricing transparency of the investment and derivative financial instrument 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 and other significant accounting policies, please refer to the Fund’s most recent financial statements as contained in its semi-annual report.

 

6   BLACKROCK MUNIYIELD MICHIGAN QUALITY FUND II, INC.    APRIL 30, 2013    

Schedule of Investments (concluded)    BlackRock MuniYield Michigan Quality Fund II, Inc. (MYM)
  

 

The following tables summarize the Fund’s investments and derivative financial instruments categorized in the disclosure hierarchy as of April 30, 2013:

 

     Level 1      Level 2      Level 3      Total  

Assets:

            

Investments:

            

Long-Term Investments1

      –       $ 280,303,180         –       $ 280,303,180   

Short-Term Securities

    $ 2,001,457         –         –         2,001,457   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total

    $ 2,001,457       $ 280,303,180         –       $ 282,304,637   
  

 

 

     

 

 

     

 

 

     

 

 

  

 

1 

See above Schedule of Investments for values in each sector.

 

     Level 1     Level 2      Level 3      Total  

Derivative Financial Instruments2

           

Liabilities:

           

Interest rate contracts

    $ (109,213 )      –         –       $ (109,213 ) 

 

2 

Derivative financial instruments are financial futures contracts which are valued at unrealized appreciation/depreciation on the instrument.

Certain of the Fund’s assets and liabilities are held at carrying amount, which approximates fair value for financial reporting purposes.

As of April 30, 2013, such assets and liabilities are categorized within the disclosure hierarchy as follows:

 

     Level 1      Level 2     Level 3      Total  

Assets:

           

Cash pledged for financial futures contracts

    $ 72,000         –        –       $ 72,000   

Liabilities:

           

TOB trust certificates

      –       $ (14,578,184 )      –         (14,578,184 ) 

VRDP Shares

      –         (87,300,000 )      –         (87,300,000 ) 
  

 

 

     

 

 

    

 

 

     

 

 

  

Total

    $ 72,000       $ (101,878,184 )      –       $ (101,806,184 ) 
  

 

 

     

 

 

    

 

 

     

 

 

  

There were no transfers between levels during the period ended April 30, 2013.

 

    BLACKROCK MUNIYIELD MICHIGAN QUALITY FUND II, INC.    APRIL 30, 2013   7

 

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 MuniYield Michigan Quality Fund II, Inc.

 

By:  

/s/ John M. Perlowski

  John M. Perlowski
  Chief Executive Officer (principal executive officer) of
  BlackRock MuniYield Michigan Quality Fund II, Inc.

Date: June 24, 2013

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 MuniYield Michigan Quality Fund II, Inc.

Date: June 24, 2013

 

By:  

/s/ Neal J. Andrews

  Neal J. Andrews
  Chief Financial Officer (principal financial officer) of
  BlackRock MuniYield Michigan Quality Fund II, Inc.

Date: June 24, 2013