nvq
 
 
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-Q
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
811-21217
Investment Company Act File Number
Eaton Vance California 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, 2010
Date of Reporting Period
 
 

 

 

Item 1. Schedule of Investments

 

 

Eaton Vance California Municipal Bond Fund II as of June 30, 2010
 
PORTFOLIO OF INVESTMENTS (Unaudited)
 
Tax-Exempt Investments — 177.7%
 
                 
Principal
 		           
Amount
 		           
(000’s omitted)     Security   Value  
Electric Utilities — 1.6%
$ 675    
Vernon, Electric System Revenue, 5.125%, 8/1/21
  $ 709,904  
                 
            $ 709,904  
                 
General Obligations — 4.3%
$ 1,850    
Palo Alto, (Election of 2008), 5.00%, 8/1/40
  $ 1,966,698  
                 
            $ 1,966,698  
                 
Hospital — 15.3%
$ 1,330    
California Health Facilities Financing Authority, (Catholic Healthcare West), 5.625%, 7/1/32
  $ 1,365,205  
  1,445    
California Health Facilities Financing Authority, (Cedars-Sinai Medical Center), 5.00%, 8/15/39
    1,391,318  
  1,475    
California Statewide Communities Development Authority, (Huntington Memorial Hospital), 5.00%, 7/1/35
    1,404,274  
  500    
California Statewide Communities Development Authority, (John Muir Health), 5.00%, 8/15/36
    483,000  
  1,900    
California Statewide Communities Development Authority, (Kaiser Permanente), 5.25%, 3/1/45
    1,826,641  
  555    
Washington Township Health Care District, 5.00%, 7/1/32
    534,920  
                 
            $ 7,005,358  
                 
Insured-Electric Utilities — 9.1%
$ 1,475    
Glendale Electric, (NPFG), 5.00%, 2/1/32
  $ 1,488,098  
  1,500    
Los Angeles Department of Water and Power, (AMBAC), (BHAC), 5.00%, 7/1/26(1)
    1,595,070  
  1,000    
Sacramento Municipal Utility District, (AGM), 5.00%, 8/15/27
    1,062,320  
                 
            $ 4,145,488  
                 
Insured-Escrowed/Prerefunded — 8.5%
$ 1,025    
California Infrastructure & Economic Development Bank, (Bay Area Toll Bridges), (AMBAC), Prerefunded to 1/1/28, 5.00%, 7/1/36
  $ 1,206,476  
  3,130    
Clovis Unified School District, (FGIC), (NPFG), Escrowed to Maturity, 0.00%, 8/1/20
    2,244,366  
  395    
Orange County Water District, Certificates of Participation, (NPFG), Escrowed to Maturity, 5.00%, 8/15/34
    441,077  
                 
            $ 3,891,919  
                 
Insured-General Obligations — 47.1%
$ 740    
Antelope Valley Community College District, (Election of 2004), (NPFG), 5.25%, 8/1/39
  $ 759,773  
  7,125    
Arcadia Unified School District, (AGM), 0.00%, 8/1/38
    1,119,551  
  3,115    
Arcadia Unified School District, (AGM), 0.00%, 8/1/40
    427,409  
  3,270    
Arcadia Unified School District, (AGM), 0.00%, 8/1/41
    419,149  
  1,500    
Carlsbad Unified School District, (Election of 2006), (NPFG), 5.25%, 8/1/32
    1,594,665  
  19,350    
Chabot-Las Positas Community College District, (AMBAC), 0.00%, 8/1/43
    2,261,821  
  6,675    
Coast Community College District, (Election of 2002), (AGM), 0.00%, 8/1/35
    1,353,490  
  1,080    
El Camino Hospital District, (NPFG), 4.45%, 8/1/36
    1,014,887  
  2,350    
Long Beach Unified School District, (Election of 1999), (AGM), 5.00%, 8/1/31
    2,378,717  
  2,075    
Los Angeles Community College District, (Election of 2001), (AGM), (FGIC), 5.00%, 8/1/32
    2,130,942  
  1,000    
Mount Diablo Unified School District, (AGM), 5.00%, 8/1/25
    1,034,640  
  1,250    
Palm Springs Unified School District, (Election of 2008), (AGC), 5.00%, 8/1/33
    1,299,925  
  4,300    
San Mateo County Community College District, (Election of 2001), (FGIC), (NPFG), 0.00%, 9/1/21
    2,538,978  
  1,460    
Santa Clara Unified School District, (Election of 2004), (AGM), 4.375%, 7/1/30
    1,424,799  
  3,200    
Union Elementary School District, (FGIC), (NPFG), 0.00%, 9/1/22
    1,753,824  
                 
            $ 21,512,570  
                 
Insured-Hospital — 6.6%
$ 1,250    
California Statewide Communities Development Authority, (Kaiser Permanente), (BHAC), 5.00%, 3/1/41(1)
  $ 1,257,888  
 
1

 

                 
Principal
 		           
Amount
 		           
(000’s omitted)     Security   Value  
$ 1,750    
California Statewide Communities Development Authority, (Sutter Health), (AGM), 5.05%, 8/15/38(1)
  $ 1,771,997  
                 
            $ 3,029,885  
                 
Insured-Lease Revenue/Certificates of Participation — 9.6%
$ 1,250    
Puerto Rico Public Finance Corp., (AMBAC), Escrowed to Maturity, 5.50%, 8/1/27
  $ 1,502,063  
  1,750    
San Diego County Water Authority, Certificates of Participation, (AGM), 5.00%, 5/1/38(1)
    1,804,810  
  1,075    
San Jose Financing Authority, (Civic Center), (AMBAC), 5.00%, 6/1/32
    1,079,633  
                 
            $ 4,386,506  
                 
Insured-Private Education — 1.7%
$ 785    
California Educational Facilities Authority, (Pepperdine University), (AMBAC), 5.00%, 12/1/32
  $ 790,150  
                 
            $ 790,150  
                 
Insured-Public Education — 13.3%
$ 2,000    
California State University, (AGM), (BHAC), 5.00%, 11/1/39(1)
  $ 2,053,340  
  4,000    
California State University, (AMBAC), 5.00%, 11/1/33
    4,028,640  
                 
            $ 6,081,980  
                 
Insured-Special Assessment Revenue — 15.6%
$ 2,500    
Cathedral City Public Financing Authority, (Housing Redevelopment), (NPFG), 5.00%, 8/1/33
  $ 2,285,725  
  2,500    
Cathedral City Public Financing Authority, (Tax Allocation Redevelopment), (NPFG), 5.00%, 8/1/33
    2,285,725  
  1,000    
Irvine Public Facility and Infrastructure Authority, (AMBAC), 5.00%, 9/2/26
    938,660  
  1,795    
Los Osos Community Services District, (Wastewater Assessment District No. 1), (NPFG), 5.00%, 9/2/33
    1,592,201  
                 
            $ 7,102,311  
                 
Insured-Special Tax Revenue — 13.5%
$ 2,195    
Hesperia Public Financing Authority, (Redevelopment and Housing Projects), (XLCA), 5.00%, 9/1/37
  $ 1,779,728  
  11,485    
Puerto Rico Sales Tax Financing Corp., (AMBAC), 0.00%, 8/1/54
    655,105  
  2,320    
Puerto Rico Sales Tax Financing Corp., (NPFG), 0.00%, 8/1/44
    263,366  
  4,600    
Puerto Rico Sales Tax Financing Corp., (NPFG), 0.00%, 8/1/45
    485,760  
  2,905    
Puerto Rico Sales Tax Financing Corp., (NPFG), 0.00%, 8/1/46
    285,242  
  375    
Sacramento Area Flood Control Agency, (BHAC), 5.625%, 10/1/37
    411,371  
  260    
San Francisco Bay Area Rapid Transportation District, Sales Tax Revenue, (AMBAC), 5.00%, 7/1/31
    261,422  
  985    
San Francisco Bay Area Rapid Transportation District, Sales Tax Revenue, (AMBAC), 5.125%, 7/1/36
    991,639  
  1,000    
Santa Clara Valley Transportation Authority, Sales Tax Revenue, (AMBAC), 5.00%, 4/1/32
    1,027,600  
                 
            $ 6,161,233  
                 
Insured-Transportation — 2.1%
$ 3,520    
San Joaquin Hills Transportation Corridor Agency, (NPFG), 0.00%, 1/15/27
  $ 958,602  
                 
            $ 958,602  
                 
Insured-Water Revenue — 18.5%
$ 1,235    
Calleguas Las Virgines Public Financing Authority, (Municipal Water District), (BHAC), (FGIC), 4.75%, 7/1/37
  $ 1,247,202  
  2,500    
Contra Costa Water District, (AGM), 5.00%, 10/1/32(1)
    2,569,513  
  100    
East Bay Municipal Utility District, Water System Revenue, (AGM), (FGIC), 5.00%, 6/1/32
    105,156  
  1,430    
East Bay Municipal Utility District, Water System Revenue, (FGIC), (NPFG), 5.00%, 6/1/32
    1,503,731  
  1,500    
Los Angeles Department of Water and Power, (NPFG), 3.00%, 7/1/30
    1,175,805  
  445    
Riverside, Water Revenue, (AGM), 5.00%, 10/1/38
    458,003  
  1,475    
Santa Clara Valley Water District, (AGM), 3.75%, 6/1/28
    1,369,080  
                 
            $ 8,428,490  
                 
Private Education — 3.7%
$ 780    
California Educational Facilities Authority, (Claremont McKenna College), 5.00%, 1/1/39
  $ 810,654  
  380    
California Educational Facilities Authority, (Loyola Marymount University), 5.00%, 10/1/30
    386,164  
 
2

 

                 
Principal
 		           
Amount
 		           
(000’s omitted)     Security   Value  
$ 500    
California Educational Facilities Authority, (Stanford University), 5.125%, 1/1/31(2)
  $ 501,165  
                 
            $ 1,697,983  
                 
Transportation — 3.6%
$ 540    
Long Beach, Harbor Revenue, 5.00%, 5/15/27
  $ 577,757  
  1,060    
Los Angeles Department of Airports, (Los Angeles International Airport), 5.00%, 5/15/35(1)
    1,080,638  
                 
            $ 1,658,395  
                 
Water and Sewer — 3.6%
$ 500    
Metropolitan Water District of Southern California, (Waterworks Revenue Authorization), 5.00%, 1/1/34
  $ 530,005  
  1,050    
Metropolitan Water District of Southern California, (Waterworks Revenue Authorization), 5.00%, 1/1/39
    1,108,391  
                 
            $ 1,638,396  
                 
         
Total Tax-Exempt Investments — 177.7%
(identified cost $85,100,934)
  $ 81,165,868  
         
         
Auction Preferred Shares Plus Cumulative Unpaid Dividends — (56.3)%
  $ (25,702,248 )
         
         
Other Assets, Less Liabilities — (21.4)%
  $ (9,780,372 )
         
         
Net Assets Applicable to Common Shares — 100.0%
  $ 45,683,248  
         
 
             
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.
         
XLCA
  -   XL Capital Assurance, Inc.
 
The Fund invests primarily in debt securities issued by California 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, 2010, 81.9% 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 1.6% to 27.9% of total investments.
         
(1)
      Security represents the underlying municipal bond of an inverse floater.
         
(2)
      Security (or a portion thereof) has been pledged to cover margin requirements on open financial futures contracts.
 
3

 

A summary of financial instruments outstanding at June 30, 2010 is as follows:
 
Futures Contracts
 
                                 
Expiration
 		          Aggregate
 		          Net Unrealized
 		 
Date   Contracts   Position   Cost     Value     Depreciation  
9/10
  18 U.S. 30-Year Treasury Bond   Short   $ (2,250,564 )   $ (2,295,000 )   $ (44,436 )
 
Interest Rate Swaps
 
                                 
          Annual
 		    Floating
 		  Effective Date/
 		     
    Notional
 		    Fixed Rate
 		    Rate
 		  Termination
 		  Net Unrealized
 		 
Counterparty   Amount     Paid By Fund     Paid To Fund   Date   Depreciation  
JPMorgan Chase Co. 
  $ 1,137,500       4.046 %   3-month USD-
LIBOR-BBA 		  September 17, 2010 /
September 17, 2040 		  $ (64,391 )
Merrill Lynch Capital Services, Inc. 
    1,812,500       4.140     3-month USD-
LIBOR-BBA 		  August 24, 2010 /
August 24, 2040 		    (137,853 )
                                 
                            $ (202,244 )
                                 
 
The effective date represents the date on which the Fund and the counterparty to the interest rate swap contract begin interest payment accruals.
 
At June 30, 2010, 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 June 30, 2010, the aggregate fair value of 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 $246,680.
 
The cost and unrealized appreciation (depreciation) of investments of the Fund at June 30, 2010, as determined on a federal income tax basis, were as follows:
 
         
Aggregate cost
  $ 74,524,025  
         
Gross unrealized appreciation
  $ 2,430,067  
Gross unrealized depreciation
    (6,158,224 )
         
Net unrealized depreciation
  $ (3,728,157 )
         
 
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)
 
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
 
4

 

At June 30, 2010, 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
  $ —     $ 81,165,868     $ —     $ 81,165,868  
 
 
Total Investments
  $ —     $ 81,165,868     $ —     $ 81,165,868  
 
 
                                 
Liability Description                        
   
Futures Contracts
  $ (44,436 )   $ —     $ —     $ (44,436 )
Interest Rate Swaps
    —       (202,244 )     —       (202,244 )
 
 
Total
  $ (44,436 )   $ (202,244 )   $ —     $ (246,680 )
 
 
 
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.
 
5

 

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 California Municipal Bond Fund II
         
By:
  /s/ Cynthia J. Clemson
 
    
 
  Cynthia J. Clemson    
 
  President    
Date: August 25, 2010
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/ Cynthia J. Clemson
 
    
 
  Cynthia J. Clemson    
 
  President    
Date: August 25, 2010
         
By:
  /s/ Barbara E. Campbell
 
    
 
  Barbara E. Campbell    
 
  Treasurer    
Date: August 25, 2010