UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

Form N-Q

 

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

 

811-21219

Investment Company Act File Number

 

Eaton Vance Municipal Bond Fund II

(Formerly, Eaton Vance Insured 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

 

December 31, 2009

Date of Reporting Period

 

 

Item 1. Schedule of Investments

 

PORTFOLIO OF INVESTMENTS (Unaudited)

 

Tax-Exempt Investments — 181.8%

 

 

1

 

2

 

3

 

Short-Term Investments — 1.2%

 

 

 

4

A summary of financial instruments outstanding at December 31, 2009 is as follows:

 

Futures Contracts

 

 

Interest Rate Swaps

 

 

The effective date represents the date on which the Fund and the counterparty to the interest rate swap contract begin interest payment accruals.

 

At December 31, 2009, 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 objectives. Because the Fund holds fixed rate bonds, the value of these bonds may decrease if interest rates rise. To hedge against this risk, the Fund may enter into interest rate swap contracts. The Fund may also purchase and sell U.S. Treasury futures contracts to hedge against changes in interest rates.

 

At December 31, 2009, the aggregate fair value of derivative instruments (not considered to be hedging instruments for accounting disclosure purposes) in an asset position and whose primary underlying risk exposure is interest rate risk was $1,064,513.

 

The cost and unrealized appreciation (depreciation) of investments of the Fund at December 31, 2009, as determined on a federal income tax basis, were as follows:

 

Aggregate cost		$	171,011,407
Gross unrealized appreciation		$	5,242,055
Gross unrealized depreciation			(15,802,932	)
Net unrealized depreciation		$	(10,560,877	)

 

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.

 

 

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

 

5

At December 31, 2009, the inputs used in valuing the Fund’s investments, which are carried at value, were as follows:

 

		Quoted Prices in
		Active Markets for				Significant Other				Significant
		Identical Assets				Observable Inputs				Unobservable Inputs
Asset Description		(Level 1)				(Level 2)				(Level 3)				Total
Tax-Exempt Investments		$	—			$	216,369,311			$	—			$	216,369,311
Short-Term Investments			—				1,446,219				—				1,446,219
Total Investments		$	—			$	217,815,530			$	—			$	217,815,530
Futures Contracts		$	684,923			$	—			$	—			$	684,923
Interest Rate Swaps			—				379,590				—				379,590
Total		$	684,923			$	218,195,120			$	—			$	218,880,043

 

The Fund held no investments or other financial instruments as of September 30, 2009 whose fair value was determined using Level 3 inputs.

 

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.

 

Effective February 1, 2010, the name of the Fund was changed from Eaton Vance Insured Municipal Bond Fund II.

 

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

 

 

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.