UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-Q
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act File Number 811-21219
Eaton Vance Municipal Bond Fund II
(Exact Name of Registrant as Specified in Charter)
Two International Place, Boston, Massachusetts 02110
(Address of Principal Executive Offices)
Maureen A. Gemma
Two International Place, Boston, Massachusetts 02110
(Name and Address of Agent for Services)
(617) 482-8260
(Registrant’s Telephone Number, Including Area Code)
September 30
Date of Fiscal Year End
June 30, 2012
Date of Reporting Period
Item 1. Schedule of Investments
Eaton Vance
Municipal Bond Fund II
June 30, 2012
PORTFOLIO OF INVESTMENTS (Unaudited)
Tax-Exempt Investments — 165.3%
| Security | Principal Amount (000’s omitted) |
Value | ||||||
| Education — 12.8% |
||||||||
| Connecticut Health and Educational Facilities Authority, (Wesleyan University), |
$ | 2,200 | $ | 2,439,206 | ||||
| Houston, TX, Higher Education Finance Corp., (William Marsh Rice University), |
1,745 | 2,003,365 | ||||||
| Massachusetts Health and Educational Facilities Authority, (Harvard University), |
2,710 | 3,261,729 | ||||||
| New Jersey Educational Facilities Authority, (Georgian Court University), |
1,500 | 1,572,165 | ||||||
| New York Dormitory Authority, (Rockefeller University), 5.00%, 7/1/40(1) |
1,500 | 1,686,765 | ||||||
| New York Dormitory Authority, (State University Educational Facilities), |
1,175 | 1,242,292 | ||||||
| North Carolina Capital Facilities Finance Agency, (Duke University), |
500 | 567,490 | ||||||
| Tennessee School Bond Authority, 5.50%, 5/1/38 |
1,000 | 1,168,810 | ||||||
| University of Virginia, 5.00%, 6/1/40 |
1,500 | 1,679,775 | ||||||
| Vermont Educational and Health Buildings Financing Agency, (Middlebury College), |
750 | 833,872 | ||||||
|
|
|
|||||||
| $ | 16,455,469 | |||||||
|
|
|
|||||||
| Electric Utilities — 1.9% |
||||||||
| South Carolina Public Service Authority, (Santee Cooper), 5.50%, 1/1/38 |
$ | 1,420 | $ | 1,624,338 | ||||
| Wyandotte County/Kansas City, KS, Unified Government Board of Public Utilities, |
685 | 755,658 | ||||||
|
|
|
|||||||
| $ | 2,379,996 | |||||||
|
|
|
|||||||
| General Obligations — 15.5% |
||||||||
| Chicago Park District, IL, (Harbor Facilities), 5.25%, 1/1/37(1) |
$ | 1,680 | $ | 1,858,853 | ||||
| Delaware Valley, PA, Regional Finance Authority, 5.75%, 7/1/32 |
2,500 | 2,970,000 | ||||||
| Frisco, TX, Independent School District, (PSF Guaranteed), 5.00%, 8/15/37 |
1,280 | 1,455,104 | ||||||
| Hawaii, 5.00%, 12/1/29 |
2,500 | 2,953,825 | ||||||
| Hawaii, 5.00%, 12/1/30 |
1,000 | 1,172,480 | ||||||
| New York, 5.00%, 2/15/34(1) |
2,750 | 3,126,063 | ||||||
| New York, NY, 5.00%, 8/1/31 |
3,500 | 4,050,900 | ||||||
| Oregon, 5.00%, 8/1/36 |
1,000 | 1,148,180 | ||||||
| Pasadena, TX, Independent School District, (PSF Guaranteed), 5.00%, 2/15/35 |
645 | 742,543 | ||||||
| Virginia Beach, VA, 4.00%, 4/1/27 |
230 | 253,267 | ||||||
| Virginia Beach, VA, 4.00%, 4/1/28 |
230 | 251,868 | ||||||
|
|
|
|||||||
| $ | 19,983,083 | |||||||
|
|
|
|||||||
| Hospital — 4.8% |
||||||||
| Camden County, NJ, Improvement Authority, (Cooper Health System), |
$ | 900 | $ | 917,136 | ||||
| Camden County, NJ, Improvement Authority, (Cooper Health System), 5.25%, 2/15/27 |
545 | 565,029 | ||||||
| Hawaii Department of Budget and Finance, (Hawaii Pacific Health), |
500 | 506,235 | ||||||
| Highlands County, FL, Health Facilities Authority, (Adventist Health System), |
1,285 | 1,359,710 | ||||||
| Knox County, TN, Health, Educational and Housing Facilities Board, (Covenant Health), 0.00%, 1/1/38 |
1,850 | 516,039 | ||||||
| Knox County, TN, Health, Educational and Housing Facilities Board, (Covenant Health), 0.00%, 1/1/39 |
5,000 | 1,319,050 | ||||||
1
| Security | Principal Amount (000’s omitted) |
Value | ||||||
| Lehigh County, PA, General Purpose Authority, (Lehigh Valley Health Network), |
$ | 960 | $ | 983,184 | ||||
|
|
|
|||||||
| $ | 6,166,383 | |||||||
|
|
|
|||||||
| Industrial Development Revenue — 0.8% |
||||||||
| St. John Baptist Parish, LA, (Marathon Oil Corp.), 5.125%, 6/1/37 |
$ | 1,010 | $ | 1,057,985 | ||||
|
|
|
|||||||
| $ | 1,057,985 | |||||||
|
|
|
|||||||
| Insured-Education — 6.9% |
||||||||
| Massachusetts Development Finance Agency, (Boston University), (XLCA), |
$ | 2,500 | $ | 3,031,100 | ||||
| Miami-Dade County, FL, Educational Facilities Authority, (University of Miami), (AMBAC), (BHAC), 5.00%, 4/1/31 |
1,555 | 1,725,646 | ||||||
| University of South Alabama, (BHAC), 5.00%, 8/1/38 |
3,900 | 4,164,147 | ||||||
|
|
|
|||||||
| $ | 8,920,893 | |||||||
|
|
|
|||||||
| Insured-Electric Utilities — 7.5% |
||||||||
| American Municipal Power-Ohio, Inc., OH, (Prairie State Energy Campus), (AGC), |
$ | 1,000 | $ | 1,130,440 | ||||
| Chelan County, WA, Public Utility District No. 1, (Columbia River), (NPFG), |
6,335 | 4,400,544 | ||||||
| Mississippi Development Bank, (Municipal Energy), (XLCA), 5.00%, 3/1/41 |
2,205 | 2,226,940 | ||||||
| South Carolina Public Service Authority, (Santee Cooper), (BHAC), |
1,595 | 1,824,521 | ||||||
|
|
|
|||||||
| $ | 9,582,445 | |||||||
|
|
|
|||||||
| Insured-General Obligations — 14.4% |
||||||||
| Cincinnati, OH, City School District, (AGM), (FGIC), 5.25%, 12/1/30 |
$ | 750 | $ | 965,783 | ||||
| Coast Community College District, CA, (Election of 2002), (AGM), 0.00%, 8/1/33 |
17,000 | 5,457,170 | ||||||
| Goodyear, AZ, (NPFG), 3.00%, 7/1/26 |
1,350 | 1,368,211 | ||||||
| Palm Springs, CA, Unified School District, (Election of 2008), (AGC), 5.00%, 8/1/33 |
2,750 | 3,064,407 | ||||||
| Philadelphia, PA, (AGC), 7.00%, 7/15/28 |
1,250 | 1,437,275 | ||||||
| Washington, (AGM), 5.00%, 7/1/25(1) |
5,500 | 6,244,480 | ||||||
|
|
|
|||||||
| $ | 18,537,326 | |||||||
|
|
|
|||||||
| Insured-Hospital — 22.5% |
||||||||
| Arizona Health Facilities Authority, (Banner Health), (BHAC), 5.375%, 1/1/32 |
$ | 1,750 | $ | 1,902,513 | ||||
| California Statewide Communities Development Authority, (Sutter Health), (AGM), |
1,500 | 1,605,390 | ||||||
| Centre County, PA, Hospital Authority, (Mount Nittany Medical Center), (AGC), |
1,695 | 1,777,648 | ||||||
| Centre County, PA, Hospital Authority, (Mount Nittany Medical Center), (AGC), |
450 | 472,568 | ||||||
| Colorado Health Facilities Authority, (Catholic Health), (AGM), 5.10%, 10/1/41(1) |
2,200 | 2,317,084 | ||||||
| Highlands County, FL, Health Facilities Authority, (Adventist Health System), (BHAC), 5.25%, 11/15/36(1) |
3,000 | 3,315,210 | ||||||
| Highlands County, FL, Health Facilities Authority, (Adventist Health System), (NPFG), 5.00%, 11/15/35 |
1,490 | 1,553,563 | ||||||
| Illinois Finance Authority, (Children’s Memorial Hospital), (AGC), 5.25%, 8/15/47(1) |
2,500 | 2,640,000 | ||||||
| Indiana Health and Educational Facility Finance Authority, (Sisters of St. Francis Health Services), (AGM), 5.25%, 5/15/41 |
1,750 | 1,852,060 | ||||||
| Indiana Health and Educational Facility Finance Authority, (Sisters of St. Francis Health Services), (AGM), 5.25%, 5/15/41(1) |
750 | 793,740 | ||||||
| Maricopa County, AZ, Industrial Development Authority, (Catholic Healthcare West), (BHAC), 5.25%, 7/1/32 |
2,090 | 2,351,187 | ||||||
| New Jersey Health Care Facilities Financing Authority, (Hackensack University Medical Center), (AGC), 5.25%, 1/1/36(1) |
1,000 | 1,066,560 | ||||||
| New Jersey Health Care Facilities Financing Authority, (Meridian Health System), |
500 | 527,690 | ||||||
| New Jersey Health Care Facilities Financing Authority, (Virtua Health), (AGC), |
2,245 | 2,458,297 | ||||||
2
| Security | Principal Amount (000’s omitted) |
Value | ||||||
| Washington Health Care Facilities Authority, (MultiCare Health System), (AGC), |
$ | 1,545 | $ | 1,757,376 | ||||
| Washington Health Care Facilities Authority, (Providence Health Care), (AGM), |
2,300 | 2,502,308 | ||||||
|
|
|
|||||||
| $ | 28,893,194 | |||||||
|
|
|
|||||||
| Insured-Industrial Development Revenue — 1.1% |
||||||||
| Pennsylvania Economic Development Financing Authority, (Aqua Pennsylvania, Inc.), (BHAC), 5.00%, 10/1/39 |
$ | 1,340 | $ | 1,475,407 | ||||
|
|
|
|||||||
| $ | 1,475,407 | |||||||
|
|
|
|||||||
| Insured-Lease Revenue/Certificates of Participation — 5.8% |
||||||||
| Essex County, NJ, Improvement Authority, (NPFG), 5.50%, 10/1/30 |
$ | 1,000 | $ | 1,276,700 | ||||
| New Jersey Economic Development Authority, (School Facilities Construction), (AGC), |
875 | 988,619 | ||||||
| San Diego County, CA, Water Authority, Certificates of Participation, (AGM), |
3,250 | 3,516,890 | ||||||
| Tri-Creek Middle School Building Corp., IN, (AGM), |
1,500 | 1,624,455 | ||||||
|
|
|
|||||||
| $ | 7,406,664 | |||||||
|
|
|
|||||||
| Insured-Other Revenue — 1.5% |
||||||||
| Harris County-Houston, TX, Sports Authority, (NPFG), |
$ | 2,540 | $ | 696,417 | ||||
| New York, NY, Industrial Development Agency, (Yankee Stadium), (AGC), |
1,000 | 1,188,580 | ||||||
|
|
|
|||||||
| $ | 1,884,997 | |||||||
|
|
|
|||||||
| Insured-Solid Waste — 1.1% |
||||||||
| Palm Beach County, FL, Solid Waste Authority, (BHAC), |
$ | 740 | $ | 865,622 | ||||
| Palm Beach County, FL, Solid Waste Authority, (BHAC), |
425 | 490,000 | ||||||
|
|
|
|||||||
| $ | 1,355,622 | |||||||
|
|
|
|||||||
| Insured-Special Tax Revenue — 5.0% |
||||||||
| Metropolitan Pier and Exposition Authority, IL, (McCormick Place Expansion), (NPFG), |
$ | 1,500 | $ | 1,517,745 | ||||
| Miami-Dade County, FL, Professional Sports Franchise Facilities, (AGC), |
3,000 | 2,415,930 | ||||||
| Puerto Rico Sales Tax Financing Corp., (AMBAC), 0.00%, 8/1/54 |
14,620 | 1,237,875 | ||||||
| Puerto Rico Sales Tax Financing Corp., (NPFG), 0.00%, 8/1/45 |
8,395 | 1,261,013 | ||||||
|
|
|
|||||||
| $ | 6,432,563 | |||||||
|
|
|
|||||||
| Insured-Student Loan — 1.5% |
||||||||
| Maine Educational Loan Authority, (AGC), 5.625%, 12/1/27 |
$ | 1,745 | $ | 1,947,874 | ||||
|
|
|
|||||||
| $ | 1,947,874 | |||||||
|
|
|
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| Insured-Transportation — 24.0% |
||||||||
| Clark County, NV, (Las Vegas-McCarran International Airport), (AGM), 5.25%, 7/1/39 |
$ | 1,585 | $ | 1,745,259 | ||||
| E-470 Public Highway Authority, CO, (NPFG), 0.00%, 9/1/22 |
7,800 | 4,938,024 | ||||||
| Manchester, NH, (Manchester-Boston Regional Airport), (AGM), 5.125%, 1/1/30 |
1,305 | 1,419,109 | ||||||
| Maryland Transportation Authority, (AGM), 5.00%, 7/1/41(1) |
10,000 | 10,939,200 | ||||||
| Metropolitan Washington, D.C., Airports Authority, (BHAC), 5.00%, 10/1/24 |
1,000 | 1,145,410 | ||||||
| Metropolitan Washington, D.C., Airports Authority, (BHAC), 5.00%, 10/1/29 |
535 | 593,417 | ||||||
| Nevada Department of Business and Industry, (Las Vegas Monorail -1st Tier), (AMBAC), 0.00%, 1/1/20(2) |
13,885 | 1,381,557 | ||||||
| New Jersey Transportation Trust Fund Authority, (AGC), 5.50%, 12/15/38 |
1,040 | 1,166,038 | ||||||
| North Carolina Turnpike Authority, (Triangle Expressway System), (AGC), 5.50%, 1/1/29 |
255 | 286,413 | ||||||
| North Carolina Turnpike Authority, (Triangle Expressway System), (AGC), 5.75%, 1/1/39 |
290 | 326,143 | ||||||
| North Texas Tollway Authority, (BHAC), 5.75%, 1/1/48 |
1,750 | 1,978,340 | ||||||
3
| Security | Principal Amount (000’s omitted) |
Value | ||||||
| Pennsylvania Turnpike Commission, (AGM), 5.25%, 7/15/30 |
$ | 2,540 | $ | 3,207,385 | ||||
| Texas Turnpike Authority, (Central Texas Turnpike System), (AMBAC), 5.00%, 8/15/42 |
1,785 | 1,785,000 | ||||||
|
|
|
|||||||
| $ | 30,911,295 | |||||||
|
|
|
|||||||
| Insured-Water and Sewer — 9.0% |
||||||||
| Bossier City, LA, Utilities Revenue, (BHAC), 5.25%, 10/1/26 |
$ | 670 | $ | 758,554 | ||||
| Bossier City, LA, Utilities Revenue, (BHAC), 5.25%, 10/1/27 |
420 | 473,974 | ||||||
| Bossier City, LA, Utilities Revenue, (BHAC), 5.50%, 10/1/38 |
660 | 725,571 | ||||||
| Chicago, IL, Wastewater Transmission Revenue, (BHAC), 5.50%, 1/1/38 |
1,635 | 1,798,745 | ||||||
| District of Columbia Water and Sewer Authority, (AGC), 5.00%, 10/1/34(1) |
1,250 | 1,378,450 | ||||||
| Houston, TX, Utility System, (AGM), (BHAC), 5.00%, 11/15/33 |
435 | 491,615 | ||||||
| Massachusetts Water Resources Authority, (AGM), 5.25%, 8/1/35(3) |
1,000 | 1,306,620 | ||||||
| New York, NY, Municipal Water Finance Authority, (BHAC), 5.75%, 6/15/40 |
2,205 | 2,657,158 | ||||||
| Pearland, TX, Waterworks and Sewer Systems, (NPFG), 3.50%, 9/1/31 |
1,955 | 1,964,599 | ||||||
|
|
|
|||||||
| $ | 11,555,286 | |||||||
|
|
|
|||||||
| Lease Revenue/Certificates of Participation — 6.5% |
||||||||
| New Jersey Health Care Facilities Financing Authority, (Hospital Asset Transformation Program), 5.75%, 10/1/31 |
$ | 2,235 | $ | 2,586,409 | ||||
| North Carolina, Capital Improvement Limited Obligation Bonds, 5.00%, 5/1/30 |
5,000 | 5,785,900 | ||||||
|
|
|
|||||||
| $ | 8,372,309 | |||||||
|
|
|
|||||||
| Other Revenue — 1.2% |
||||||||
| Oregon Department of Administrative Services, Lottery Revenue, 5.25%, 4/1/30 |
$ | 1,300 | $ | 1,555,216 | ||||
|
|
|
|||||||
| $ | 1,555,216 | |||||||
|
|
|
|||||||
| Senior Living/Life Care — 0.2% |
||||||||
| Maryland Health and Higher Educational Facilities Authority, (Charlestown Community, Inc.), 6.125%, 1/1/30 |
$ | 235 | $ | 265,371 | ||||
|
|
|
|||||||
| $ | 265,371 | |||||||
|
|
|
|||||||
| Special Tax Revenue — 7.3% |
||||||||
| Homewood, AL, City Board of Education, 5.00%, 4/1/32 |
$ | 1,880 | $ | 2,105,149 | ||||
| Illinois, Sales Tax Revenue, 5.00%, 6/15/31 |
425 | 476,969 | ||||||
| Illinois, Sales Tax Revenue, 5.00%, 6/15/32 |
405 | 452,203 | ||||||
| Illinois, Sales Tax Revenue, 5.00%, 6/15/33 |
435 | 483,577 | ||||||
| Massachusetts Bay Transportation Authority, Sales Tax Revenue, 5.25%, 7/1/33 |
750 | 965,678 | ||||||
| Michigan Trunk Line Fund, 5.00%, 11/15/30 |
110 | 126,360 | ||||||
| Michigan Trunk Line Fund, 5.00%, 11/15/31 |
125 | 143,155 | ||||||
| Michigan Trunk Line Fund, 5.00%, 11/15/33 |
105 | 119,247 | ||||||
| Michigan Trunk Line Fund, 5.00%, 11/15/36 |
80 | 90,510 | ||||||
| New York, NY, Transitional Finance Authority, Future Tax Revenue, 5.50%, 11/1/35(1)(4) |
3,800 | 4,476,172 | ||||||
|
|
|
|||||||
| $ | 9,439,020 | |||||||
|
|
|
|||||||
| Transportation — 11.1% |
||||||||
| Delaware River Port Authority of Pennsylvania and New Jersey, 5.00%, 1/1/35 |
$ | 1,715 | $ | 1,861,701 | ||||
| Los Angeles, CA, Department of Airports, (Los Angeles International Airport), |
465 | 539,851 | ||||||
| Metropolitan Transportation Authority, NY, 5.25%, 11/15/38 |
865 | 972,943 | ||||||
| Miami-Dade County, FL, (Miami International Airport), 5.00%, 10/1/41 |
2,115 | 2,272,335 | ||||||
| New York Liberty Development Corp., (4 World Trade Center), 5.00%, 11/15/31 |
1,070 | 1,200,508 | ||||||
| New York Thruway Authority, 5.00%, 1/1/37(5) |
510 | 558,659 | ||||||
| New York Thruway Authority, 5.00%, 1/1/42(5) |
555 | 603,330 | ||||||
| Orlando-Orange County, FL, Expressway Authority, Series A, 5.00%, 7/1/35 |
420 | 458,900 | ||||||
| Orlando-Orange County, FL, Expressway Authority, Series A, 5.00%, 7/1/40 |
375 | 407,295 | ||||||
| Port Authority of New York and New Jersey, 4.00%, 7/15/32 |
1,415 | 1,463,252 | ||||||
| South Carolina Transportation Infrastructure Bank, 5.25%, 10/1/40 |
1,000 | 1,097,450 | ||||||
| Triborough Bridge and Tunnel Authority, NY, 5.00%, 11/15/37 |
2,500 | 2,776,350 | ||||||
|
|
|
|||||||
| $ | 14,212,574 | |||||||
|
|
|
|||||||
4
| Security | Principal Amount (000’s omitted) |
Value | ||||||
| Water and Sewer — 2.9% |
||||||||
| Chicago, IL, Water Revenue, 5.00%, 11/1/42 |
$ | 1,000 | $ | 1,112,160 | ||||
| Detroit, MI, Sewage Disposal System, 5.00%, 7/1/32 |
215 | 218,298 | ||||||
| Detroit, MI, Sewage Disposal System, 5.25%, 7/1/39 |
355 | 364,308 | ||||||
| Marco Island, FL, Utility System, 5.00%, 10/1/34 |
205 | 224,485 | ||||||
| Marco Island, FL, Utility System, 5.00%, 10/1/40 |
910 | 989,061 | ||||||
| New York, NY, Municipal Water Finance Authority, (Water and Sewer System), |
720 | 796,248 | ||||||
|
|
|
|||||||
| $ | 3,704,560 | |||||||
|
|
|
|||||||
| Total Tax-Exempt Investments — 165.3% |
$ | 212,495,532 | ||||||
|
|
|
|||||||
| Auction Preferred Shares Plus Cumulative Unpaid Dividends — (34.8)% |
$ | (44,701,994 | ) | |||||
|
|
|
|||||||
| Other Assets, Less Liabilities — (30.5)% |
$ | (39,194,862 | ) | |||||
|
|
|
|||||||
| Net Assets Applicable to Common Shares — 100.0% |
$ | 128,598,676 | ||||||
|
|
|
|||||||
The percentage shown for each investment category in the Portfolio of Investments is based on net assets applicable to common shares.
| AGC |
- | Assured Guaranty Corp. | ||
| AGM |
- | Assured Guaranty Municipal Corp. | ||
| AMBAC |
- | AMBAC Financial Group, Inc. | ||
| BHAC |
- | Berkshire Hathaway Assurance Corp. | ||
| FGIC |
- | Financial Guaranty Insurance Company | ||
| NPFG |
- | National Public Finance Guaranty Corp. | ||
| PSF |
- | Permanent School Fund | ||
| XLCA |
- | XL Capital Assurance, Inc. | ||
At June 30, 2012, the concentration of the Fund’s investments in the various states, determined as a percentage of total investments is as follows:
| New York |
12.6 | % | ||
| Others, representing less than 10% individually |
87.4 | % |
The Fund invests primarily in debt securities issued by municipalities. The ability of the issuers of the debt securities to meet their obligations may be affected by economic developments in a specific industry or municipality. In order to reduce the risk associated with such economic developments, at June 30, 2012, 60.7% of total investments are backed by bond insurance of various financial institutions and financial guaranty assurance agencies. The aggregate percentage insured by an individual financial institution ranged from 0.5% to 21.6% of total investments.
| (1) | Security represents the municipal bond held by a trust that issues residual interest bonds. |
| (2) | Defaulted security. Issuer has defaulted on the payment of interest or has filed for bankruptcy. |
| (3) | Security (or a portion thereof) has been segregated to cover payable for when-issued securities. |
| (4) | Security (or a portion thereof) has been pledged as collateral for residual interest bond transactions. The aggregate value of such collateral is $1,626,172. |
| (5) | When-issued security. |
5
A summary of open financial instruments at June 30, 2012 is as follows:
Futures Contracts
| Expiration Month/Year |
Contracts |
Position | Aggregate Cost | Value | Net Unrealized Depreciation |
|||||||||||
| 9/12 | 65 U.S. 30-Year Treasury Bond | Short | $ | (9,604,819 | ) | $ | (9,617,969 | ) | $ | (13,150 | ) | |||||
At June 30, 2012, the Fund had sufficient cash and/or securities to cover commitments under these contracts.
The Fund is subject to interest rate risk in the normal course of pursuing its investment objective. Because the Fund holds fixed-rate bonds, the value of these bonds may decrease if interest rates rise. The Fund purchases and sells U.S. Treasury futures contracts to hedge against changes in interest rates.
At June 30, 2012, the aggregate fair value of open derivative instruments (not considered to be hedging instruments for accounting disclosure purposes) in a liability position and whose primary underlying risk exposure is interest rate risk was $13,150.
The cost and unrealized appreciation (depreciation) of investments of the Fund at June 30, 2012, as determined on a federal income tax basis, were as follows:
| Aggregate cost |
$ | 163,134,000 | ||
|
|
|
|||
| Gross unrealized appreciation |
$ | 17,933,563 | ||
| Gross unrealized depreciation |
(8,977,031 | ) | ||
|
|
|
|||
| Net unrealized appreciation |
$ | 8,956,532 | ||
|
|
|
Under generally accepted accounting principles for fair value measurements, a three-tier hierarchy to prioritize the assumptions, referred to as inputs, is used in valuation techniques to measure fair value. The three-tier hierarchy of inputs is summarized in the three broad levels listed below.
| • | Level 1 — quoted prices in active markets for identical investments |
| • | Level 2 — other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.) |
| • | Level 3 — significant unobservable inputs (including a fund’s own assumptions in determining the fair value of investments) |
In cases where the inputs used to measure fair value fall in different levels of the fair value hierarchy, the level disclosed is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
At June 30, 2012, the hierarchy of inputs used in valuing the Fund’s investments and open derivative instruments, which are carried at value, were as follows:
| Asset Description | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Tax-Exempt Investments |
$ | — | $ | 212,495,532 | $ | — | $ | 212,495,532 | ||||||||
| Total Investments |
$ | — | $ | 212,495,532 | $ | — | $ | 212,495,532 | ||||||||
| Liability Description | ||||||||||||||||
| Futures Contracts |
$ | (13,150 | ) | $ | — | $ | — | $ | (13,150 | ) | ||||||
| Total |
$ | (13,150 | ) | $ | — | $ | — | $ | (13,150 | ) | ||||||
The Fund held no investments or other financial instruments as of September 30, 2011 whose fair value was determined using Level 3 inputs. At June 30, 2012, there were no investments transferred between Level 1 and Level 2 during the fiscal year to date then ended.
For information on the Fund’s policy regarding the valuation of investments and other significant accounting policies, please refer to the Fund’s most recent financial statements included in its semiannual or annual report to shareholders.
6
Item 2. Controls and Procedures
(a) It is the conclusion of the registrant’s principal executive officer and principal financial officer that the effectiveness of the registrant’s current disclosure controls and procedures (such disclosure controls and procedures having been evaluated within 90 days of the date of this filing) provide reasonable assurance that the information required to be disclosed by the registrant on this Form N-Q has been recorded, processed, summarized and reported within the time period specified in the Commission’s rules and forms and that the information required to be disclosed by the registrant on this Form N-Q has been accumulated and communicated to the registrant’s principal executive officer and principal financial officer in order to allow timely decisions regarding required disclosure.
(b) There have been no changes in the registrant’s internal controls over financial reporting during the fiscal quarter for which the report is being filed that have materially affected, or are reasonably likely to materially affect the registrant’s internal control over financial reporting.
Signatures
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.
| Eaton Vance Municipal Bond Fund II
| ||
| By: | /s/ Thomas M. Metzold | |
| Thomas M. Metzold President | ||
Date: August 27, 2012
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/ Thomas M. Metzold | |
| Thomas M. Metzold President | ||
Date: August 27, 2012
| By: | /s/ Barbara E. Campbell | |
| Barbara E. Campbell Treasurer | ||
Date: August 27, 2012