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: 07/31/2015
Date of reporting period: 10/31/2014
Item 1 – Schedule of Investments
| Schedule of Investments October 31, 2014 (Unaudited) |
BlackRock MuniYield Michigan Quality Fund II, Inc. (MYM) (Percentages shown are based on Net Assets) |
| Municipal Bonds | Par (000) |
Value | ||||||
| Michigan — 134.1% |
||||||||
| Corporate — 2.8% |
|
|||||||
| County of Monroe Michigan EDC, Refunding RB, Detroit Edison Co. Project, Series AA (NPFGC), 6.95%, 9/01/22 |
$ | 3,805 | $ | 5,033,330 | ||||
| County/City/Special District/School District — 25.4% |
| |||||||
| Anchor Bay School District, GO, Refunding, (Q-SBLF): |
||||||||
| 4.38%, 5/01/27 |
640 | 691,955 | ||||||
| 4.50%, 5/01/29 |
605 | 652,668 | ||||||
| Bay City School District Michigan, GO, School Building & Site (AGM) (Q-SBLF), 5.00%, 5/01/16 (a) |
200 | 213,996 | ||||||
| Charter Township of Canton Michigan, GO, Capital Improvement (AGM): |
||||||||
| 5.00%, 4/01/25 |
1,250 | 1,365,662 | ||||||
| 5.00%, 4/01/26 |
1,250 | 1,366,612 | ||||||
| 5.00%, 4/01/27 |
500 | 542,640 | ||||||
| Chippewa Valley Schools, GO, Refunding, Unlimited Tax (Q-SBLF), 5.00%, 5/01/32 |
1,120 | 1,267,213 | ||||||
| City of Oak Park Michigan, GO, Street Improvement (NPFGC), 5.00%, 5/01/30 |
600 | 628,500 | ||||||
| Columbia Michigan School District, GO, Unlimited Tax, School Building & Site (Q-SBLF), 5.00%, 5/01/38 |
1,970 | 2,193,240 | ||||||
| Comstock Park Public Schools, GO, School Building & Site, Series B (Q-SBLF): |
||||||||
| 5.50%, 5/01/36 |
450 | 504,140 | ||||||
| 5.50%, 5/01/41 |
830 | 920,669 | ||||||
| County of Genesee Michigan, GO, Refunding, Series A (NPFGC), 5.00%, 5/01/19 |
400 | 407,996 | ||||||
| Dearborn Brownfield Redevelopment Authority, GO, Limited Tax, Redevelopment, Series A (AGC), 5.50%, 5/01/39 |
2,000 | 2,179,120 | ||||||
| Dearborn School District, GO, Series A (Q-SBLF): |
||||||||
| 5.00%, 5/01/32 |
570 | 645,873 | ||||||
| 5.00%, 5/01/33 |
610 | 688,660 | ||||||
| 5.00%, 5/01/34 |
455 | 512,539 | ||||||
| Flint EDC, RB, Michigan Department of Human Services Office Building Project, 5.25%, 10/01/41 |
1,880 | 2,019,534 | ||||||
| Municipal Bonds | Par (000) |
Value | ||||||
| Michigan (continued) |
||||||||
| County/City/Special District/School District (continued) |
| |||||||
| Fraser Public School District Michigan, GO, School Building & Site (AGM) (Q-SBLF), 5.00%, 5/01/25 |
$ | 1,255 | $ | 1,283,664 | ||||
| Goodrich Area School District Michigan, GO, School Building & Site (Q-SBLF): |
||||||||
| 5.50%, 5/01/32 |
400 | 451,604 | ||||||
| 5.50%, 5/01/36 |
800 | 896,248 | ||||||
| 5.50%, 5/01/41 |
1,000 | 1,109,240 | ||||||
| Harper Creek Community School District Michigan, GO, Refunding, (AGM) (Q-SBLF), 5.00%, 5/01/22 |
1,000 | 1,022,840 | ||||||
| Hudsonville Public Schools, GO, School Building & Site (Q-SBLF), 5.25%, 5/01/41 |
2,650 | 2,901,405 | ||||||
| Jonesville Community Schools Michigan, GO, Refunding, (NPFGC) (Q-SBLF), 5.00%, 5/01/29 |
1,085 | 1,104,194 | ||||||
| L’Anse Creuse Public Schools Michigan, GO, School Building & Site (AGM) (Q-SBLF): |
||||||||
| 5.00%, 5/01/25 |
1,000 | 1,022,840 | ||||||
| 5.00%, 5/01/26 |
1,050 | 1,073,982 | ||||||
| 5.00%, 5/01/35 |
2,000 | 2,034,580 | ||||||
| Lincoln Consolidated School District Michigan, GO, Refunding, (NPFGC) (Q-SBLF), 4.63%, 5/01/28 |
1,675 | 1,749,219 | ||||||
| Livonia Public Schools School District Michigan, GO, Series I (AGM), 5.00%, 5/01/43 |
1,910 | 2,070,822 | ||||||
| New Lothrop Area Public Schools Michigan, GO, School Building & Site (AGM) (Q-SBLF), 5.00%, 11/01/15 (a) |
1,200 | 1,257,672 | ||||||
| Parchment School District, County of Kalamazoo, State of Michigan, GO, School Building & Site |
465 | 540,735 | ||||||
| Romulus Community Schools, GO, Unlimited Tax, Refunding (AGM) (Q-SBLF): |
||||||||
| 4.25%, 5/01/26 |
740 | 801,701 | ||||||
| 4.25%, 5/01/27 |
725 | 779,643 | ||||||
| 4.50%, 5/01/29 |
630 | 682,460 | ||||||
| BLACKROCK MUNIYIELD MICHIGAN QUALITY FUND II, INC. | OCTOBER 31, 2014 | 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) |
|
|||||||
| Thornapple Kellogg School District Michigan, GO, Refunding, School Building & Site (NPFGC) (Q-SBLF), 5.00%, 5/01/32 |
$ | 1,500 | $ | 1,616,340 | ||||
| Troy School District, GO, (Q-SBLF), 5.00%, 5/01/28 |
760 | 883,667 | ||||||
| Van Dyke Public Schools Michigan, GO, School Building & Site (AGM) (Q-SBLF), 5.00%, 5/01/28 |
750 | 829,988 | ||||||
| Walled Lake Consolidated School District, GO, (Q-SBLF): |
||||||||
| 5.00%, 5/01/37 |
1,080 | 1,206,803 | ||||||
| 5.00%, 5/01/40 |
1,000 | 1,109,250 | ||||||
| 5.00%, 5/01/43 |
1,530 | 1,689,717 | ||||||
|
|
|
|||||||
| 44,919,631 | ||||||||
| Education — 17.7% |
||||||||
| Central Michigan University, Refunding RB: |
||||||||
| 5.00%, 10/01/30 |
380 | 444,410 | ||||||
| 5.00%, 10/01/31 |
380 | 441,929 | ||||||
| 5.00%, 10/01/34 |
610 | 701,537 | ||||||
| 5.00%, 10/01/39 |
760 | 865,731 | ||||||
| Ciy of Grand Rapids Michigan, EDC, RB, Ferris State University Project, Series A, 5.50%, 10/01/35 |
760 | 828,696 | ||||||
| Ferris State University, Refunding RB, General (AGM): |
||||||||
| 4.50%, 10/01/24 |
1,595 | 1,783,800 | ||||||
| 4.50%, 10/01/25 |
1,405 | 1,571,310 | ||||||
| Michigan State University, Refunding RB, General: |
||||||||
| Series A, 5.00%, 8/15/41 |
3,035 | 3,445,544 | ||||||
| Series C, 5.00%, 2/15/40 |
3,770 | 4,217,914 | ||||||
| Series C, 5.00%, 2/15/44 |
1,000 | 1,119,490 | ||||||
| Michigan Technological University, Refunding RB, Series A, 5.00%, 10/01/34 |
810 | 902,664 | ||||||
| Oakland University, RB, General: |
||||||||
| 5.00%, 3/01/32 |
400 | 444,228 | ||||||
| Series A, 5.00%, 3/01/38 |
1,820 | 2,015,759 | ||||||
| Series A, 5.00%, 3/01/43 |
2,980 | 3,264,441 | ||||||
| University of Michigan, RB, Series A, 5.00%, 4/01/39 |
1,300 | 1,504,945 | ||||||
| Wayne State University, RB, Series A: |
||||||||
| 5.00%, 11/15/40 |
1,000 | 1,103,130 | ||||||
| 4.00%, 11/15/44 |
380 | 386,114 | ||||||
| Municipal Bonds | Par (000) |
Value | ||||||
| Michigan (continued) |
||||||||
| Education (concluded) |
|
|||||||
| Western Michigan University, Refunding RB, General, University and College Improvements: |
||||||||
| 5.25%, 11/15/40 |
$ | 1,400 | $ | 1,565,550 | ||||
| 5.25%, 11/15/43 |
3,220 | 3,616,221 | ||||||
| (AGM), 5.25%, 11/15/33 |
380 | 432,406 | ||||||
| (AGM), 5.00%, 11/15/39 |
665 | 737,904 | ||||||
|
|
|
|||||||
| 31,393,723 | ||||||||
| Health — 30.9% |
||||||||
| Kalamazoo Hospital Finance Authority, RB, Bronson Methodist Hospital (AGM), 5.25%, 5/15/36 |
2,750 | 3,001,928 | ||||||
| Kent Hospital Finance Authority Michigan, Refunding RB, Spectrum Health, Series A, 5.00%, 11/15/29 |
3,000 | 3,361,980 | ||||||
| Michigan Finance Authority, RB, Sparrow Obligated Group, 5.00%, 11/15/36 |
950 | 1,022,865 | ||||||
| Michigan Finance Authority, Refunding RB: |
||||||||
| Hospital, Oakwood Obligated Group, 5.00%, 8/15/31 |
1,065 | 1,186,612 | ||||||
| Trinity Health Credit Group, 5.00%, 12/01/31 |
1,900 | 2,124,105 | ||||||
| Trinity Health Credit Group, 5.00%, 12/01/35 |
2,400 | 2,650,992 | ||||||
| Trinity Health Credit Group, 5.00%, 12/01/39 |
1,650 | 1,806,206 | ||||||
| Michigan State Hospital Finance Authority, RB: |
||||||||
| Ascension Health Senior Credit Group, 5.00%, 11/15/25 |
2,300 | 2,630,073 | ||||||
| McLaren Health Care, Series C, 5.00%, 8/01/35 |
1,585 | 1,626,955 | ||||||
| MidMichigan Obligated Group, Series A, 5.00%, 4/15/26 |
380 | 393,490 | ||||||
| Trinity Health Credit, 5.00%, 12/01/16 (a) |
145 | 158,701 | ||||||
| Trinity Health Credit, Series A, 5.00%, 12/01/26 |
855 | 927,367 | ||||||
| 2 | BLACKROCK MUNIYIELD MICHIGAN QUALITY FUND II, INC. | OCTOBER 31, 2014 |
| 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, Refunding RB: |
||||||||
| Hospital, Oakwood Obligated Group, Series A, 5.00%, 7/15/21 |
$ | 400 | $ | 436,136 | ||||
| Hospital, Oakwood Obligated Group, Series A, 5.00%, 7/15/25 |
2,470 | 2,635,465 | ||||||
| Hospital, Oakwood Obligated Group, Series A, 5.00%, 7/15/37 |
3,340 | 3,502,424 | ||||||
| Hospital, Sparrow Obligated Group, 5.00%, 11/15/31 |
1,595 | 1,694,129 | ||||||
| McLaren Health Care, Series A, 5.00%, 6/01/35 |
860 | 940,453 | ||||||
| McLaren Health Care, Series A, 5.75%, 5/15/38 |
1,500 | 1,686,375 | ||||||
| Trinity Health Credit Group, Series A, 6.13%, 12/01/23 |
940 | 1,097,328 | ||||||
| Trinity Health Credit Group, Series A, 6.25%, 12/01/28 |
570 | 665,680 | ||||||
| Trinity Health Credit Group, Series C, 4.00%, 12/01/32 |
2,450 | 2,529,258 | ||||||
| Trinity Health Credit, Series A, 6.50%, 12/01/33 |
1,400 | 1,641,808 | ||||||
| Royal Oak Hospital Finance Authority, Refunding RB, William Beaumont Hospital, Series V, 8.25%, 9/01/18 (a) |
1,000 | 1,278,610 | ||||||
| Royal Oak Hospital Finance Authority Michigan, Refunding RB, William Beaumont Hospital: |
||||||||
| Series D, 5.00%, 9/01/39 |
12,500 | 13,761,625 | ||||||
| Series W, 6.00%, 8/01/39 |
575 | 655,724 | ||||||
| State of Michigan Hospital Finance Authority, Refunding RB, Henry Ford Health, 5.75%, 11/15/39 |
1,200 | 1,332,492 | ||||||
|
|
|
|||||||
| 54,748,781 | ||||||||
| Housing — 7.9% |
||||||||
| Michigan State HDA, RB: |
||||||||
| Deaconess Tower, AMT (Ginnie Mae), 5.25%, 2/20/48 |
1,000 | 1,018,080 | ||||||
| Series A, 4.75%, 12/01/25 |
2,605 | 2,796,910 | ||||||
| Series A, 4.45%, 10/01/34 |
380 | 399,038 | ||||||
| Series A, 4.63%, 10/01/39 |
1,325 | 1,384,612 | ||||||
| Series A, 4.75%, 10/01/44 |
1,900 | 1,984,341 | ||||||
| Michigan State HDA, Refunding RB: |
||||||||
| Rental Housing, Series D, 4.50%, 10/01/48 |
4,335 | 4,533,846 | ||||||
| Michigan (continued) |
||||||||
| Housing (concluded) |
|
|||||||
| Michigan State HDA, Refunding RB (concluded): |
||||||||
| Series A, 6.05%, 10/01/41 |
$ | 1,625 | $ | 1,793,513 | ||||
|
|
|
|||||||
| 13,910,340 | ||||||||
| State — 13.3% |
||||||||
| Michigan Strategic Fund, Refunding RB, Cadillac Place Office Building Project, 5.25%, 10/15/31 |
2,650 | 2,923,745 | ||||||
| State of Michigan Building Authority, RB, Local Government Loan Program, Series F, 5.25%, 10/01/41 |
2,510 | 2,710,449 | ||||||
| State of Michigan Building Authority, Refunding RB, Facilities Program: |
||||||||
| Series I, 6.25%, 10/15/38 |
2,350 | 2,742,990 | ||||||
| Series I (AGC), 5.25%, 10/15/24 |
2,000 | 2,329,060 | ||||||
| Series I (AGC), 5.25%, 10/15/25 |
1,500 | 1,742,925 | ||||||
| Series I (AGC), 5.25%, 10/15/26 |
400 | 463,752 | ||||||
| Series I-A, 5.38%, 10/15/41 |
2,175 | 2,460,621 | ||||||
| Series I-A, 5.50%, 10/15/45 |
750 | 853,290 | ||||||
| Series II (AGM), 5.00%, 10/15/26 |
3,000 | 3,442,800 | ||||||
| State of Michigan Trunk Line Fund, RB: |
||||||||
| 5.00%, 11/15/33 |
1,150 | 1,315,520 | ||||||
| 5.00%, 11/15/36 |
2,220 | 2,515,016 | ||||||
|
|
|
|||||||
| 23,500,168 | ||||||||
| Transportation — 13.6% |
||||||||
| State of Michigan, RB, GAB (AGM), 5.25%, 9/15/27 |
3,250 | 3,620,630 | ||||||
| Wayne County Airport Authority, RB, Detroit Metropolitan Wayne County Airport, AMT (NPFGC): |
||||||||
| 5.25%, 12/01/25 |
3,730 | 3,903,482 | ||||||
| 5.25%, 12/01/26 |
3,700 | 3,872,087 | ||||||
| 5.00%, 12/01/34 |
3,550 | 3,661,435 | ||||||
| 5.00%, 12/01/39 |
560 | 605,108 | ||||||
| Wayne County Airport Authority, Refunding RB, AMT (AGC): |
||||||||
| 5.75%, 12/01/26 |
3,060 | 3,507,739 | ||||||
| BLACKROCK MUNIYIELD MICHIGAN QUALITY FUND II, INC. | OCTOBER 31, 2014 | 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 (continued) |
||||||||
| Transportation (concluded) |
||||||||
| Wayne County Airport Authority, Refunding RB, AMT (AGC) (concluded): |
||||||||
| 5.38%, 12/01/32 |
$ | 4,300 | $ | 4,823,697 | ||||
|
|
|
|||||||
| 23,994,178 | ||||||||
| Utilities — 22.5% |
||||||||
| City of Detroit Michigan Sewage Disposal System, Refunding RB, Senior Lien, Series A, 5.25%, 7/01/39 |
1,010 | 1,084,316 | ||||||
| City of Detroit Michigan Water Supply System, RB, Senior Lien, Series A (NPFGC), 5.00%, 7/01/34 |
915 | 914,936 | ||||||
| City of Detroit Michigan Water Supply System, Refunding RB, 2nd Lien, Series C (AGM), 5.00%, 7/01/29 |
6,275 | 6,509,497 | ||||||
| City of Grand Rapids Michigan, Refunding RB, Series A (NPFGC), 5.50%, 1/01/22 |
1,500 | 1,778,955 | ||||||
| City of Grand Rapids Michigan Sanitary Sewer System, RB: |
||||||||
| 5.00%, 1/01/37 |
570 | 649,794 | ||||||
| 4.00%, 1/01/42 |
675 | 692,968 | ||||||
| City of Holland Michigan Electric Utility System, RB, Series A: |
||||||||
| 5.00%, 7/01/33 |
1,140 | 1,298,950 | ||||||
| 4.13%, 7/01/39 |
950 | 986,717 | ||||||
| 5.00%, 7/01/39 |
4,640 | 5,190,814 | ||||||
| City of Lansing Michigan, RB, Board of Water & Light Utilities System, Series A: |
||||||||
| 5.00%, 7/01/27 |
1,210 | 1,392,662 | ||||||
| 5.00%, 7/01/31 |
2,600 | 2,952,326 | ||||||
| 5.00%, 7/01/37 |
1,270 | 1,423,213 | ||||||
| 5.50%, 7/01/41 |
2,000 | 2,346,720 | ||||||
| City of Port Huron Michigan, RB, Water Supply System: |
||||||||
| 5.25%, 10/01/31 |
190 | 208,307 | ||||||
| 5.63%, 10/01/40 |
500 | 552,150 | ||||||
| City of Wyoming Michigan, RB, Sewer System (NPFGC), 5.00%, 6/01/30 |
5,300 | 5,407,802 | ||||||
| Michigan Finance Authority, Refunding RB: |
||||||||
| 5.00%, 7/01/32 |
1,995 | 2,198,949 | ||||||
| 5.00%, 7/01/33 |
1,140 | 1,251,686 | ||||||
| Senior Lien, Detroit Water and Sewer, Series C-3, 5.00%, 7/01/31 |
380 | 420,147 | ||||||
| Municipal Bonds | Par (000) |
Value | ||||||
| Michigan (concluded) |
||||||||
| Utilities (concluded) |
||||||||
| Michigan Municipal Bond Authority, RB, State Clean Water Revolving Fund: |
||||||||
| 5.00%, 10/01/27 |
$ | 750 | $ | 807,472 | ||||
| 5.00%, 10/01/29 |
680 | 787,012 | ||||||
| Pooled Project, 5.00%, 10/01/27 |
760 | 884,306 | ||||||
|
|
|
|||||||
| 39,739,699 | ||||||||
| Total Municipal Bonds in Michigan |
237,239,850 | |||||||
| Guam — 3.7% |
||||||||
| State — 3.7% |
||||||||
| Territory of Guam, RB: |
||||||||
| Business Privilege Tax Bonds, Series A, 5.25%, 1/01/36 |
310 | 339,379 | ||||||
| Business Privilege Tax Bonds, Series A, 5.13%, 1/01/42 |
3,390 | 3,657,166 | ||||||
| Business Privilege Tax Bonds, Series B-1, 5.00%, 1/01/32 |
1,050 | 1,142,085 | ||||||
| Business Privilege Tax Bonds, Series B-1, 5.00%, 1/01/37 |
405 | 436,274 | ||||||
| Limited Obligation Bonds, Section 30, Series A, 5.63%, 12/01/29 |
850 | 938,833 | ||||||
| Total Municipal Bonds in Guam | 6,513,737 | |||||||
| Total Municipal Bonds — 137.8% | 243,753,587 | |||||||
| Municipal Bonds Transferred to Tender Option Bond (TOB) Trusts (b) |
||||||||
| Michigan — 15.5% |
||||||||
| County/City/Special District/School District — 4.3% |
||||||||
| Lakewood Public Schools Michigan, GO, School Building & Site (AGM) (Q-SBLF), 5.00%, 5/01/37 |
4,154 | 4,476,632 | ||||||
| Portage Public Schools Michigan, GO, School Building & Site (AGM), 5.00%, 5/01/31 |
2,850 | 3,119,154 | ||||||
|
|
|
|||||||
| 7,595,786 | ||||||||
| Education — 11.2% |
||||||||
| Michigan State University, Refunding RB, General, Series A, 5.00%, 8/15/41 |
3,780 | 4,322,430 | ||||||
| Saginaw Valley State University, Refunding RB, General (AGM), 5.00%, 7/01/31 |
2,500 | 2,752,675 | ||||||
| 4 | BLACKROCK MUNIYIELD MICHIGAN QUALITY FUND II, INC. | OCTOBER 31, 2014 |
| 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 (b) |
Par (000) |
Value | ||||||
| Michigan (concluded) |
||||||||
| Education (concluded) |
|
|||||||
| Wayne State Univeristy, RB, General, Series A, 5.00%, 11/15/40 |
$ | 3,810 | $ | 4,202,925 | ||||
| Wayne State University, Refunding RB, General (AGM), 5.00%, 11/15/35 |
7,793 | 8,651,000 | ||||||
|
|
|
|||||||
| 19,929,030 | ||||||||
| Total Municipal Bonds Transferred to Tender Option Bond (TOB) Trusts — 15.5% |
27,524,816 | |||||||
| Total Long-Term Investments (Cost — $252,050,176) — 153.3% |
271,278,403 | |||||||
| Short-Term Securities |
||||||||
| BIF Michigan Municipal Money Fund, 0.00%, (c)(d) |
3,113 | 3,112,938 | ||||||
| Value | ||||||||
| Total Short-Term Securities (Cost — $3,112,938) — 1.8% |
$ | 3,112,938 | ||||||
| Total Investments (Cost — $255,163,114*) — 155.1% |
274,391,341 | |||||||
| Other Assets Less Liabilities — 1.8% | 3,334,930 | |||||||
| Liability for TOB Trust Certificates, Including Interest |
(13,497,985 | ) | ||||||
| VRDP Shares, at Liquidation Value — (49.3%) | (87,300,000 | ) | ||||||
|
|
|
|||||||
| Net Assets Applicable to Common Shares — 100.0% |
$ | 176,928,286 | ||||||
|
|
|
|||||||
| * | As of October 31, 2014, gross unrealized appreciation and depreciation based on cost for federal income tax purposes were as follows: |
| Tax cost |
$ | 241,613,261 | ||
|
|
|
|||
| Gross unrealized appreciation |
$ | 19,324,822 | ||
| Gross unrealized depreciation |
(39,740 | ) | ||
|
|
|
|||
| Net unrealized appreciation |
$ | 19,285,082 | ||
|
|
|
| Notes to Schedule of Investments |
| (a) | U.S. government securities, held in escrow, are used to pay interest on this security, as well as to retire the bond in full at the date indicated, typically at a premium to par. |
| (b) | Represent bonds transferred to a TOB. In exchange for which the Fund received cash and residual interest certificates. These bonds serve as collateral in a financing transaction. |
| (c) | Represents the current yield as of report date. |
| (d) | Investments in issuers considered to be an affiliate of the Fund during the period ended October 31, 2014, 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, 2014 |
Net Activity |
Shares Held at October 31, 2014 |
Income | ||||||||||
| BIF Michigan Municipal Money Fund |
2,269,658 | 843,280 | 3,112,938 | — | ||||||||||
| Portfolio Abbreviations | ||||||||||
| AGC | Assured Guarantee Corp. | |||||||||
| AGM | Assured Guaranty Municipal Corp. | |||||||||
| AMT | Alternative Minimum Tax (subject to) | |||||||||
| EDC | Economic Development Corp. | |||||||||
| GAB | Grant Anticipation Bonds | |||||||||
| GO | General Obligation Bonds | |||||||||
| HDA | Housing Development Authority | |||||||||
| NPFGC | National Public Finance Guarantee Corp. | |||||||||
| Q-SBLF | Qualified School Bond Loan Fund | |||||||||
| RB | Revenue Bonds |
| BLACKROCK MUNIYIELD MICHIGAN QUALITY FUND II, INC. | OCTOBER 31, 2014 | 5 |
| Schedule of Investments (continued) |
BlackRock MuniYield Michigan Quality Fund II, Inc. (MYM) |
| Ÿ | Financial futures contracts outstanding as of October 31, 2014 were as follows: |
| Contracts Sold |
Issue | Exchange | Expiration | Notional Value |
Unrealized Appreciation |
|||||||||||
| (50 | ) | 10-Year U.S. Treasury Note | Chicago Board of Trade | December 2014 | $ | 6,317,969 | $ | 143,566 | ||||||||
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 rating group indexes, and/or as defined by the investment advisor. These definitions may not apply for purposes of this report, which may combine such sector sub-classifications for reporting ease.
| Ÿ | 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. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the fair value hierarchy classification is determined based on the lowest level input that is significant to the fair value measurement in its entirety. 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. The three levels of the fair value hierarchy are as follows: |
| Ÿ | Level 1 — unadjusted quoted prices in active markets/exchanges for identical assets or liabilities that the Fund has the ability to access |
| Ÿ | 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) |
| Ÿ | 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) |
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. For information about the Fund’s policy regarding valuation of investments and derivative financial instruments, please refer to the Fund’s most recent financial statements as contained in its annual report.
The following tables summarize the Fund’s investments and derivative financial instruments categorized in the disclosure hierarchy as of October 31, 2014:
| Level 1 | Level 2 | Level 3 | Total | |||||||||||
| Assets: |
||||||||||||||
| Investments: | ||||||||||||||
| Long-Term Securities1 |
$ | 271,278,403 | — | $ | 271,278,403 | |||||||||
| Short-Term Securities |
$ | 3,112,938 | — | 3,112,938 | ||||||||||
|
|
|
|
|
|
|
|
||||||||
| Total |
$ | 3,112,938 | $ | 271,278,403 | — | $ | 274,391,341 | |||||||
|
|
|
|
|
|
|
|
||||||||
| 1 See above Schedule of Investments for values in each sector. |
| |||||||||||||
| 6 | BlackRock MuniYield Michigan Quality Fund II, Inc. | OCTOBER 31, 2014 |
| Schedule of Investments (concluded) |
BlackRock MuniYield Michigan Quality Fund II, Inc. (MYM) |
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Derivative Financial Instruments2 | ||||||||||||||||
| Assets: |
||||||||||||||||
| Interest rate contracts |
$ | 143,566 | — | — | $ | 143,566 | ||||||||||
| 2 Derivative financial instruments are financial futures contracts, which are valued at the unrealized appreciation/depreciation on the instrument. |
| |||||||||||||||
The Fund may hold assets and/or liabilities in which the fair value approximates the carrying amount for financial reporting purposes. As of October 31, 2014, such assets and/or liabilities are categorized within the disclosure hierarchy as follows:
| Level 1 | Level 2 | Level 3 | Total | |||||||||||
| Assets: |
||||||||||||||
| Cash pledged for financial futures contracts |
$ | 63,000 | — | — | $ | 63,000 | ||||||||
| Liabilities: |
||||||||||||||
| TOB trust certificates |
— | $ | (13,492,998 | ) | — | (13,492,998 | ) | |||||||
| VRDP Shares |
— | (87,300,000 | ) | — | (87,300,000 | ) | ||||||||
|
|
|
|
|
|
|
|
||||||||
| Total |
$ | 63,000 | $ | (100,792,998 | ) | — | $ | (100,729,998 | ) | |||||
|
|
|
|
|
|
|
|
||||||||
There were no transfers between levels during the period ended October 31, 2014.
| BLACKROCK MUNIYIELD MICHIGAN QUALITY FUND II, INC. | October 31, 2014 | 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: December 23, 2014 | ||
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: December 23, 2014 | ||
| By: | /s/ Neal J. Andrews | |
| Neal J. Andrews | ||
| Chief Financial Officer (principal financial officer) of | ||
| BlackRock MuniYield Michigan Quality Fund II, Inc. | ||
| Date: December 23, 2014 | ||