N-Q 1 d359910dnq.htm PIMCO MUNICIPAL INCOME FUND II PIMCO Municipal Income Fund II

 

 

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:    811-21076
Registrant Name:    PIMCO Municipal Income Fund II
Address of Principal Executive Offices:    1633 Broadway
   New York, NY 10019
Name and Address of Agent for Service:    William G. Galipeau
   650 Newport Center Drive
   Newport Beach, CA 92660
Registrant’s telephone number, including area code:    (844) 337-4626
Date of Fiscal Year End:    December 31
Date of Reporting Period:    March 31, 2017

 

Item 1. Schedule of Investments

 

Schedule of Investments

PIMCO Municipal Income Fund II

March 31, 2017 (Unaudited)

 

                                         
    PRINCIPAL
AMOUNT
(000S)		     MARKET
VALUE
(000S)		  

INVESTMENTS IN SECURITIES 160.8%

    

MUNICIPAL BONDS & NOTES 160.7%

    

ALABAMA 7.5%

    

Alabama Federal Aid Highway Financing Authority Revenue Bonds, Series 2016

    

5.000% due 09/01/2035 (d)

   $ 7,000     $ 8,059  

5.000% due 09/01/2036 (d)

     7,000       8,034  

Alabama State Docks Department Revenue Bonds, Series 2010

    

6.000% due 10/01/2040

     2,000       2,313  

Jefferson County, Alabama Sewer Revenue Bonds, Series 2013

    

0.000% due 10/01/2050 (c)

     18,500       13,975  

6.500% due 10/01/2053

     18,000       21,154  

Lower Alabama Gas District Revenue Bonds, Series 2016

    

5.000% due 09/01/2046

     1,900       2,238  
   

 

 

  
      55,773  
   

 

 

  

ARIZONA 13.0%

    

Arizona Health Facilities Authority Revenue Bonds, Series 2008

    

5.000% due 01/01/2035

     3,500       3,607  

5.500% due 01/01/2038

     2,860       2,958  

Pima County, Arizona Industrial Development Authority Revenue Bonds, Series 2008

    

5.000% due 09/01/2039

     29,700       30,604  

Pima County, Arizona Industrial Development Authority Revenue Bonds, Series 2010

    

5.250% due 10/01/2040

     1,500       1,562  

Pinal County, Arizona Electric District No. 3 Revenue Bonds, Series 2011

    

5.250% due 07/01/2036

     1,750       2,024  

5.250% due 07/01/2041

     3,700       4,279  

Salt River Project Agricultural Improvement & Power District, Arizona Revenue Bonds, Series 2009

    

5.000% due 01/01/2039 (d)

     10,000       10,616  

Salt Verde Financial Corp., Arizona Revenue Bonds, Series 2007

    

5.000% due 12/01/2032

     12,430       14,385  

5.000% due 12/01/2037

     22,400       25,976  
   

 

 

  
      96,011  
   

 

 

  

CALIFORNIA 19.4%

    

Bay Area Toll Authority, California Revenue Bonds, Series 2008

    

5.000% due 04/01/2034

     1,430       1,488  

Bay Area Toll Authority, California Revenue Bonds, Series 2010

    

5.000% due 10/01/2029

     6,000       6,638  

Bay Area Toll Authority, California Revenue Bonds, Series 2013

    

5.250% due 04/01/2048

     5,000       5,639  

Bay Area Toll Authority, California Revenue Bonds, Series 2014

    

5.000% due 10/01/2054

     2,000       2,197  

California Health Facilities Financing Authority Revenue Bonds, Series 2010

    

5.000% due 11/15/2036

     1,500       1,622  

7.073% due 11/15/2036 (e)

     5,000       5,957  

California Health Facilities Financing Authority Revenue Bonds, Series 2011

    

6.000% due 08/15/2042

     3,000       3,407  

California Health Facilities Financing Authority Revenue Bonds, Series 2016

    

5.000% due 11/15/2046 (d)

     12,500       13,825  

California Municipal Finance Authority Revenue Bonds, Series 2011

    

7.750% due 04/01/2031

     2,635       3,149  

California Pollution Control Financing Authority Revenue Bonds, Series 2012

    

5.000% due 07/01/2037

     1,000       1,002  

California State General Obligation Bonds, Series 2007

    

5.000% due 11/01/2032

     2,925       2,993  

5.000% due 06/01/2037

     1,590       1,600  

California State General Obligation Bonds, Series 2008

    

5.125% due 08/01/2036

     5,200       5,446  

5.250% due 03/01/2038

     2,500       2,594  

California State General Obligation Bonds, Series 2009

    

6.000% due 04/01/2038

     9,500       10,395  

California State General Obligation Bonds, Series 2010

    

5.250% due 11/01/2040

     5,945       6,671  

5.500% due 03/01/2040

     5,750       6,386  

California Statewide Communities Development Authority Revenue Bonds, (FHA Insured), Series 2009

    

6.625% due 08/01/2029

     4,890       5,509  

6.750% due 02/01/2038

     17,415       19,669  

California Statewide Communities Development Authority Revenue Bonds, Series 2010

    

5.000% due 11/01/2040

     1,000       1,083  

California Statewide Communities Development Authority Revenue Bonds, Series 2011

    

5.000% due 12/01/2041

     1,000       1,087  

6.000% due 08/15/2042

     5,690       6,462  

California Statewide Communities Development Authority Revenue Notes, Series 2007

    

5.750% due 11/01/2017

     570       579  

                                         
             

California Statewide Communities Development Authority Revenue Notes, Series 2011

    

6.500% due 11/01/2021

     480       519  

Los Angeles Community College District, California General Obligation Bonds, (NPFGC Insured), Series 2007

    

5.000% due 08/01/2032

     2,000       2,027  

Los Angeles Department of Water & Power, California Revenue Bonds, (AMBAC Insured), Series 2007

    

5.000% due 07/01/2039

     4,000       4,031  

M-S-R Energy Authority, California Revenue Bonds, Series 2009

   

6.500% due 11/01/2039

     1,750       2,400  

Montebello Unified School District, California General Obligation Bonds, (AGM Insured), Series 2008

   

5.000% due 08/01/2033

     2,000       2,107  

Newport Beach, California Revenue Bonds, Series 2011

   

5.875% due 12/01/2030

     3,000       3,564  

Peralta Community College District, California General Obligation Bonds, Series 2009

    

5.000% due 08/01/2039

     500       545  

San Diego County, California Water Authority Certificates of Participation Bonds, (AGM Insured), Series 2008

    

5.000% due 05/01/2038

     2,000       2,089  

San Marcos Unified School District, California General Obligation Bonds, Series 2011

    

5.000% due 08/01/2038

     3,300       3,717  

Santa Clara County, California Financing Authority Revenue Bonds, (AMBAC Insured), Series 2007

    

5.750% due 02/01/2041

     2,000       2,032  

Torrance, California Revenue Bonds, Series 2010

    

5.000% due 09/01/2040

     4,725       5,013  
   

 

 

  
      143,442  
   

 

 

  

COLORADO 2.1%

    

Aurora, Colorado Revenue Bonds, Series 2010

    

5.000% due 12/01/2040

     5,800       6,208  

Colorado Health Facilities Authority Revenue Bonds, Series 2010

    

5.000% due 01/01/2040

     6,045       6,461  

Denver Health & Hospital Authority, Colorado Revenue Bonds, Series 2010

    

5.625% due 12/01/2040

     1,000       1,056  

Public Authority for Colorado Energy Revenue Bonds, Series 2008

    

6.500% due 11/15/2038

     1,430       1,906  
   

 

 

  
      15,631  
   

 

 

  

CONNECTICUT 0.3%

    

Connecticut State Health & Educational Facility Authority Revenue Bonds, Series 2011

    

5.000% due 07/01/2041

     1,000       1,054  

Harbor Point Infrastructure Improvement District, Connecticut Tax Allocation Bonds, Series 2010

    

7.875% due 04/01/2039

     1,250       1,379  
   

 

 

  
      2,433  
   

 

 

  

FLORIDA 5.6%

    

Brevard County, Florida Health Facilities Authority Revenue Bonds, Series 2009

    

7.000% due 04/01/2039

     1,000       1,115  

Broward County, Florida Airport System Revenue Bonds, Series 2009

    

5.375% due 10/01/2029

     600       652  

Broward County, Florida Airport System Revenue Bonds, Series 2012

    

5.000% due 10/01/2042

     5,000       5,497  

Broward County, Florida Water & Sewer Utility Revenue Bonds, Series 2009

    

5.250% due 10/01/2034 (d)

     8,500       9,033  

Clearwater, Florida Water & Sewer Revenue Bonds, Series 2009

    

5.250% due 12/01/2039

     1,000       1,106  

Florida Development Finance Corp. Revenue Notes, Series 2011

    

6.500% due 06/15/2021

     230       252  

Florida State General Obligation Bonds, Series 2009

    

5.000% due 06/01/2038 (d)

     7,900       8,303  

Highlands County, Florida Health Facilities Authority Revenue Bonds, Series 2008

    

5.625% due 11/15/2037

     3,000       3,260  

Miami-Dade County, Florida Revenue Bonds, Series 2016

    

0.000% due 10/01/2033 (a)

     1,000       490  

Orlando-Orange County, Florida Expressway Authority Revenue Bonds, Series 2010

    

5.000% due 07/01/2040

     10,000       11,008  

Sarasota County, Florida Health Facilities Authority Revenue Bonds, Series 2007

    

5.750% due 07/01/2037

     500       501  
   

 

 

  
      41,217  
   

 

 

  

GEORGIA 4.7%

    

Atlanta Department of Aviation, Georgia Revenue Bonds, Series 2010

    

5.000% due 01/01/2040

     1,500       1,628  

Atlanta Development Authority, Georgia Revenue Bonds, Series 2015

    

5.000% due 07/01/2044

     3,895       4,217  

Medical Center Hospital Authority, Georgia Revenue Bonds, Series 2007

    

5.250% due 07/01/2037

     2,775       2,781  

Municipal Electric Authority of Georgia Revenue Bonds, Series 2015

    

5.000% due 07/01/2060

     19,680       20,916  

Private Colleges & Universities Authority of Georgia Revenue Bonds, Series 2016

    

4.000% due 01/01/2046 (d)

     5,200       5,438  
   

 

 

  
      34,980  
   

 

 

  

                                         
             

HAWAII 1.1%

    

Hawaii State General Obligation Bonds, Series 2016

    

4.000% due 10/01/2035 (d)

     4,420       4,626  

4.000% due 10/01/2036 (d)

     3,635       3,793  
   

 

 

  
      8,419  
   

 

 

  

ILLINOIS 13.2%

    

Chicago, Illinois General Obligation Bonds, Series 2007

    

5.500% due 01/01/2035

     10,000       9,920  

5.500% due 01/01/2042

     1,250       1,222  

Chicago, Illinois General Obligation Bonds, Series 2015

    

5.375% due 01/01/2029

     14,100       14,139  

5.500% due 01/01/2034

     5,200       5,188  

Chicago, Illinois Motor Fuel Tax Revenue Bonds, (AGC Insured), Series 2008

   

5.000% due 01/01/2038

     1,250       1,275  

Chicago, Illinois Revenue Bonds, Series 2002

   

5.000% due 01/01/2029

     2,000       2,136  

Chicago, Illinois Special Assessment Bonds, Series 2003

    

6.625% due 12/01/2022

     1,909       1,912  

6.750% due 12/01/2032

     5,370       5,396  

Hillside Village, Illinois Tax Allocation Bonds, Series 2008

    

6.550% due 01/01/2020

     2,020       2,100  

7.000% due 01/01/2028

     2,900       3,008  

Illinois Finance Authority Revenue Bonds, Series 2007

    

5.750% due 05/15/2031

     2,500       2,511  

6.000% due 03/01/2037 ^

     250       66  

Illinois Finance Authority Revenue Bonds, Series 2009

    

5.500% due 07/01/2037 (d)

     5,000       5,279  

7.125% due 11/15/2037

     700       786  

Illinois Finance Authority Revenue Bonds, Series 2010

    

6.000% due 05/01/2028

     2,000       2,277  

Illinois Sports Facilities Authority Revenue Bonds, (AMBAC Insured), Series 2001

   

5.500% due 06/15/2030

     26,225       26,848  

Illinois State Toll Highway Authority Revenue Bonds, Series 2016

   

5.000% due 01/01/2041 (d)

     12,500       13,916  
   

 

 

  
      97,979  
   

 

 

  

INDIANA 0.4%

    

Vigo County, Indiana Hospital Authority Revenue Bonds, Series 2007

   

5.800% due 09/01/2047

     990       1,010  

Vigo County, Indiana Hospital Authority Revenue Bonds, Series 2011

   

7.500% due 09/01/2022

     1,540       1,783  
   

 

 

  
      2,793  
   

 

 

  

IOWA 2.1%

    

Iowa Finance Authority Revenue Bonds, Series 2007

   

6.750% due 11/15/2042

     4,500       4,660  

Iowa Finance Authority Revenue Bonds, Series 2014

    

2.000% due 05/15/2056 ^

     144       2  

5.400% due 11/15/2046 ^

     769       736  

Iowa Tobacco Settlement Authority Revenue Bonds, Series 2005

   

5.600% due 06/01/2034

     10,350       10,383  
   

 

 

  
      15,781  
   

 

 

  

KANSAS 0.2%

    

Kansas Development Finance Authority Revenue Bonds, Series 2009

   

5.750% due 11/15/2038

     500       546  

Manhattan, Kansas Revenue Bonds, Series 2007

   

5.000% due 05/15/2036

     850       835  
   

 

 

  
      1,381  
   

 

 

  

KENTUCKY 0.2%

    

Kentucky Economic Development Finance Authority Revenue Bonds, Series 2010

   

6.375% due 06/01/2040

     1,000       1,079  
   

 

 

  

LOUISIANA 1.1%

    

Louisiana Local Government Environmental Facilities & Community Development Authority Revenue Bonds, Series 2010

    

5.875% due 10/01/2040

     750       823  

6.000% due 10/01/2044

     1,000       1,100  

6.500% due 11/01/2035

     450       513  

Louisiana Public Facilities Authority Revenue Bonds, Series 2007

   

5.500% due 05/15/2047

     3,300       3,314  

Louisiana Public Facilities Authority Revenue Bonds, Series 2011

   

6.500% due 05/15/2037

     2,000       2,397  
   

 

 

  
      8,147  
   

 

 

  

                                         
             

MARYLAND 1.2%

    

Maryland Health & Higher Educational Facilities Authority Revenue Bonds, Series 2008

   

6.000% due 01/01/2043

     4,050       4,199  

Maryland Health & Higher Educational Facilities Authority Revenue Bonds, Series 2010

   

6.250% due 01/01/2041

     1,400       1,644  

Maryland Health & Higher Educational Facilities Authority Revenue Bonds, Series 2011

   

5.000% due 08/15/2041

     2,380       2,610  
   

 

 

  
      8,453  
   

 

 

  

MASSACHUSETTS 1.7%

    

Massachusetts Development Finance Agency Revenue Bonds, Series 2010

    

7.000% due 07/01/2042

     1,000       1,080  

7.625% due 10/15/2037

     545       588  

Massachusetts Development Finance Agency Revenue Bonds, Series 2016

    

4.000% due 10/01/2046 (d)

     5,200       5,262  

5.000% due 01/01/2047

     2,500       2,683  

Massachusetts State College Building Authority Revenue Bonds, Series 2009

   

5.500% due 05/01/2039

     2,900       3,164  
   

 

 

  
      12,777  
   

 

 

  

MICHIGAN 4.3%

    

Michigan Finance Authority Revenue Bonds, Series 2017

    

5.000% due 12/01/2031 (d)

     2,600       3,003  

5.000% due 12/01/2046 (d)

     5,100       5,648  

Michigan Public Educational Facilities Authority Revenue Bonds, Series 2007

   

6.500% due 09/01/2037 ^

     800       603  

Michigan State Building Authority Revenue Bonds, Series 2016

    

5.000% due 10/15/2046 (d)

     3,500       3,865  

5.000% due 10/15/2051 (d)

     4,000       4,401  

Michigan State Hospital Finance Authority Revenue Bonds, Series 2016

   

4.000% due 11/15/2047 (d)

     10,000       10,031  

Michigan Tobacco Settlement Finance Authority Revenue Bonds, Series 2008

   

0.000% due 06/01/2058 (a)

     25,000       596  

Royal Oak Hospital Finance Authority, Michigan Revenue Bonds, Series 2009

   

8.250% due 09/01/2039

     3,000       3,301  
   

 

 

  
      31,448  
   

 

 

  

MINNESOTA 0.4%

    

North Oaks, Minnesota Revenue Bonds, Series 2007

   

6.000% due 10/01/2033

     2,640       2,701  

St Louis Park, Minnesota Revenue Bonds, Series 2009

   

5.750% due 07/01/2039

     400       441  
   

 

 

  
      3,142  
   

 

 

  

MISSISSIPPI 0.0%

    

Mississippi Development Bank Revenue Bonds, (AMBAC Insured), Series 1999

   

5.000% due 07/01/2024

     40       41  
   

 

 

  

MISSOURI 1.5%

    

Lee’s Summit, Missouri Tax Allocation Bonds, Series 2011

   

5.625% due 10/01/2023

     270       266  

Missouri State Health & Educational Facilities Authority Revenue Bonds, Series 2013

   

5.000% due 11/15/2044

     10,000       10,756  
   

 

 

  
      11,022  
   

 

 

  

NEW HAMPSHIRE 0.3%

    

New Hampshire Business Finance Authority Revenue Bonds, Series 2009

   

6.125% due 10/01/2039

     2,000       2,240  
   

 

 

  

NEW JERSEY 9.9%

    

Burlington County, New Jersey Bridge Commission Revenue Bonds, Series 2007

   

5.625% due 01/01/2038

     950       968  

New Jersey Economic Development Authority Revenue Bonds, Series 1998

   

6.000% due 05/15/2028 ^

     525       306  

New Jersey Economic Development Authority Revenue Bonds, Series 2010

   

5.875% due 06/01/2042

     2,000       2,143  

New Jersey Economic Development Authority Revenue Bonds, Series 2016

   

5.000% due 06/15/2041

     5,000       5,007  

New Jersey Economic Development Authority Special Assessment Bonds, Series 2002

   

5.750% due 10/01/2021

     3,620       3,861  

New Jersey Health Care Facilities Financing Authority Revenue Bonds, Series 2007

   

5.750% due 07/01/2037

     1,500       1,549  

New Jersey Health Care Facilities Financing Authority Revenue Bonds, Series 2011

   

6.000% due 07/01/2037

     1,500       1,778  

                                         
             

New Jersey Health Care Facilities Financing Authority Revenue Bonds, Series 2013

   

5.500% due 07/01/2043

     4,000       4,461  

New Jersey Transportation Trust Fund Authority Revenue Bonds, (AGM Insured), Series 2006

   

0.000% due 12/15/2034 (a)

     2,500       1,091  

New Jersey Transportation Trust Fund Authority Revenue Bonds, Series 2015

   

5.250% due 06/15/2041

     750       770  

New Jersey Turnpike Authority Revenue Bonds, Series 2009

   

5.250% due 01/01/2040

     2,000       2,116  

Tobacco Settlement Financing Corp., New Jersey Revenue Bonds, Series 2007

    

4.750% due 06/01/2034

     14,255       13,767  

5.000% due 06/01/2041

     36,475       35,574  
   

 

 

  
      73,391  
   

 

 

  

NEW MEXICO 0.3%

    

Farmington, New Mexico Revenue Bonds, Series 2010

   

5.900% due 06/01/2040

     2,000       2,190  
   

 

 

  

NEW YORK 19.5%

    

Hudson Yards Infrastructure Corp., New York Revenue Bonds, Series 2011

   

5.250% due 02/15/2047

     33,500       37,130  

Metropolitan Transportation Authority, New York Revenue Bonds, Series 2011

   

5.000% due 11/15/2036

     3,880       4,372  

Nassau County, New York Industrial Development Agency Revenue Bonds, Series 2014

    

2.000% due 01/01/2049 ^

     298       51  

6.700% due 01/01/2049

     825       819  

New York City Water & Sewer System, New York Revenue Bonds, Series 2009

    

4.750% due 06/15/2017 (d)

     3,421       3,447  

4.750% due 06/15/2035 (d)

     579       583  

5.000% due 06/15/2039

     2,000       2,140  

New York Liberty Development Corp. Revenue Bonds, Series 2005

    

5.250% due 10/01/2035 (d)

     1,505       13,843  

New York Liberty Development Corp. Revenue Bonds, Series 2010

    

5.125% due 01/15/2044

     1,000       1,088  

5.625% due 07/15/2047

     2,500       2,769  

6.375% due 07/15/2049

     1,250       1,370  

New York Liberty Development Corp. Revenue Bonds, Series 2011

    

5.000% due 12/15/2041

     10,000       11,044  

5.750% due 11/15/2051

     54,000       61,320  

New York Liberty Development Corp. Revenue Bonds, Series 2014

   

5.000% due 11/15/2044

     2,000       2,098  

New York State Dormitory Authority Revenue Bonds, Series 2010

   

5.500% due 07/01/2040

     1,750       1,978  
   

 

 

  
      144,052  
   

 

 

  

NORTH DAKOTA 0.5%

    

Stark County, North Dakota Revenue Bonds, Series 2007

   

6.750% due 01/01/2033

     3,710       3,736  
   

 

 

  

OHIO 11.7%

    

Buckeye Tobacco Settlement Financing Authority, Ohio Revenue Bonds, Series 2007

    

5.125% due 06/01/2024

     6,000       5,678  

5.875% due 06/01/2047

     29,400       28,178  

6.250% due 06/01/2037

     15,000       14,947  

6.500% due 06/01/2047

     19,400       19,397  

Hamilton County, Ohio Sales Tax Revenue Bonds, Series 2011

   

5.000% due 12/01/2030

     3,900       4,397  

Ohio State Revenue Bonds, Series 2009

   

5.500% due 01/01/2039

     3,000       3,211  

Ohio State Turnpike Commission Revenue Bonds, Series 2013

   

5.000% due 02/15/2048

     10,000       10,921  
   

 

 

  
      86,729  
   

 

 

  

OREGON 0.3%

    

Clackamas County, Oregon Hospital Facility Authority Revenue Bonds, Series 2009

   

5.500% due 07/15/2035

     1,000       1,098  

Oregon State Department of Administrative Services Certificates of Participation Bonds, Series 2009

   

5.250% due 05/01/2039

     1,155       1,253  
   

 

 

  
      2,351  
   

 

 

  

PENNSYLVANIA 9.4%

    

Berks County, Pennsylvania Municipal Authority Revenue Bonds, Series 2012

   

5.000% due 11/01/2044

     7,500       8,116  

Capital Region Water, Pennsylvania Revenue Bonds, Series 2007

   

6.000% due 09/01/2036 ^

     3,120       2,956  

Cumberland County, Pennsylvania Municipal Authority Revenue Bonds, Series 2008

    

5.625% due 07/01/2028

     1,000       1,038  

6.000% due 07/01/2035

     670       698  

Luzerne County, Pennsylvania Industrial Development Authority Revenue Bonds, Series 2009

   

5.500% due 12/01/2039

     500       550  

                                         
             

Montgomery County Industrial Development Authority, Pennsylvania Revenue Bonds, (FHA Insured), Series 2010

   

5.375% due 08/01/2038

     8,465       9,577  

Pennsylvania Higher Educational Facilities Authority Revenue Bonds, Series 2010

    

5.000% due 03/01/2040

     400       441  

6.000% due 07/01/2043

     850       975  

Pennsylvania Turnpike Commission Revenue Bonds, Series 2013

   

5.000% due 12/01/2043

     10,000       10,945  

Philadelphia Authority for Industrial Development, Pennsylvania Revenue Bonds, Series 2015

   

5.000% due 04/01/2045

     5,500       6,018  

Philadelphia Hospitals & Higher Education Facilities Authority, Pennsylvania Revenue Bonds, Series 2012

    

5.625% due 07/01/2036

     1,000       1,050  

5.625% due 07/01/2042

     7,000       7,314  

Philadelphia, Pennsylvania General Obligation Bonds, (AGM Insured), Series 2008

   

5.250% due 12/15/2032

     17,000       18,202  

Philadelphia, Pennsylvania Water & Wastewater Revenue Bonds, Series 2009

   

5.250% due 01/01/2036

     500       536  

Westmoreland County Industrial Development Authority, Pennsylvania Revenue Bonds, Series 2010

   

5.125% due 07/01/2030

     1,000       1,077  
   

 

 

  
      69,493  
   

 

 

  

RHODE ISLAND 2.9%

    

Tobacco Settlement Financing Corp., Rhode Island Revenue Bonds, Series 2015

   

5.000% due 06/01/2050

     21,450       21,692  
   

 

 

  

SOUTH CAROLINA 1.6%

    

Greenwood County, South Carolina Revenue Bonds, Series 2009

   

5.375% due 10/01/2039

     1,000       1,070  

South Carolina State Public Service Authority Revenue Bonds, Series 2013

   

5.500% due 12/01/2053

     10,000       10,688  
   

 

 

  
      11,758  
   

 

 

  

TENNESSEE 2.7%

    

Bristol Industrial Development Board, Tennessee Revenue Bonds, Series 2016

    

0.000% due 12/01/2031 (a)

     3,975       1,704  

5.125% due 12/01/2042

     5,000       4,763  

Claiborne County, Tennessee Industrial Development Board Revenue Bonds, Series 2009

   

6.625% due 10/01/2039

     1,750       1,863  

Johnson City Health & Educational Facilities Board, Tennessee Revenue Bonds, Series 2010

   

6.000% due 07/01/2038

     1,000       1,083  

Tennessee Energy Acquisition Corp. Revenue Bonds, Series 2006

    

5.000% due 02/01/2023

     3,000       3,380  

5.000% due 02/01/2027

     6,000       6,796  
   

 

 

  
      19,589  
   

 

 

  

TEXAS 17.2%

    

Dallas, Texas Civic Center Revenue Bonds, (AGC Insured), Series 2009

   

5.250% due 08/15/2038

     2,500       2,695  

Grand Parkway Transportation Corp., Texas Revenue Bonds, Series 2013

   

5.000% due 04/01/2053

     21,000       23,212  

Harris County, Texas Cultural Education Facilities Finance Corp. Revenue Bonds, Series 2009

    

5.250% due 10/01/2029

     3,750       4,095  

5.500% due 10/01/2039

     12,700       13,745  

North Harris County, Texas Regional Water Authority Revenue Bonds, Series 2008

    

5.250% due 12/15/2033

     10,300       11,028  

5.500% due 12/15/2038

     10,300       11,071  

North Texas Tollway Authority Revenue Bonds, Series 2008

    

5.625% due 01/01/2033

     5,000       5,170  

5.750% due 01/01/2033

     1,200       1,243  

North Texas Tollway Authority Revenue Bonds, Series 2011

    

5.000% due 01/01/2038

     5,750       6,160  

5.500% due 09/01/2041

     1,300       1,498  

San Juan Higher Education Finance Authority, Texas Revenue Bonds, Series 2010

   

6.700% due 08/15/2040

     250       293  

Tarrant County, Texas Cultural Education Facilities Finance Corp. Revenue Bonds, Series 2009

   

6.250% due 11/15/2029

     3,000       3,246  

Tarrant County, Texas Cultural Education Facilities Finance Corp. Revenue Bonds, Series 2016

   

4.000% due 02/15/2047 (d)

     13,600       13,695  

Texas Municipal Gas Acquisition & Supply Corp. Revenue Bonds, Series 2008

   

6.250% due 12/15/2026

     19,380       22,940  

Texas State General Obligation Bonds, Series 2010

   

6.635% due 04/01/2037 (e)

     4,880       5,246  

Texas State Public Finance Authority Charter School Finance Corp. Revenue Bonds, Series 2007

   

5.875% due 12/01/2036

     1,000       1,033  

Wise County, Texas Revenue Bonds, Series 2011

   

8.000% due 08/15/2034

     1,000       1,108  
   

 

 

  
      127,478  
   

 

 

  

U.S. VIRGIN ISLANDS 1.3%

    

Virgin Islands Public Finance Authority, U.S. Virgin Islands Revenue Bonds, Series 2009

    

6.625% due 10/01/2029

     2,485       2,062  

6.750% due 10/01/2037

     1,070       859  

Virgin Islands Public Finance Authority, U.S. Virgin Islands Revenue Bonds, Series 2010

   

5.000% due 10/01/2025

     8,500       6,821  
   

 

 

  
      9,742  
   

 

 

  

                                         
             

VIRGINIA 0.3%

    

Fairfax County, Virginia Industrial Development Authority Revenue Bonds, Series 2009

   

5.500% due 05/15/2035

     1,000       1,083  

James City County, Virginia Economic Development Authority Revenue Bonds, Series 2013

    

2.000% due 10/01/2048 ^

     412       30  

6.000% due 06/01/2043

     1,273       1,214  
   

 

 

  
      2,327  
   

 

 

  

WASHINGTON 2.1%

    

Washington Health Care Facilities Authority Revenue Bonds, (AGC Insured), Series 2008

   

6.000% due 08/15/2039

     1,300       1,445  

Washington Health Care Facilities Authority Revenue Bonds, Series 2007

   

6.125% due 08/15/2037

     13,000       13,171  

Washington Health Care Facilities Authority Revenue Bonds, Series 2009

   

7.375% due 03/01/2038

     1,000       1,116  
   

 

 

  
      15,732  
   

 

 

  

WEST VIRGINIA 0.5%

    

West Virginia Economic Development Authority Revenue Bonds, Series 2010

   

5.375% due 12/01/2038

     2,000       2,201  

West Virginia Hospital Finance Authority Revenue Bonds, Series 2011

   

9.125% due 10/01/2041 ^

     1,910       1,708  
   

 

 

  
      3,909  
   

 

 

  

WISCONSIN 0.2%

    

Wisconsin Health & Educational Facilities Authority Revenue Bonds, Series 2009

    

6.625% due 02/15/2039

     1,000       1,101  
   

 

 

  

Total Municipal Bonds & Notes

(Cost $1,093,929)

       1,189,459  
   

 

 

  

SHORT-TERM INSTRUMENTS 0.1%

    

SHORT-TERM NOTES 0.1%

    

Federal Home Loan Bank

    

0.761% due 04/26/2017 (a)(b)

     600       600  
   

 

 

  

Total Short-Term Instruments

(Cost $600)

       600  
   

 

 

  

Total Investments in Securities

(Cost $1,094,529)

       1,190,059  
   

 

 

  

Total Investments 160.8%

(Cost $1,094,529)

     $   1,190,059  
Preferred Shares (49.6)%       (367,000 ) 
Other Assets and Liabilities, net (11.2)%       (82,861 ) 
   

 

 

  
Net Assets Applicable to Common Shareholders 100.0%     $ 740,198  
   

 

 

  

Notes to Schedule of Investments (amounts in thousands*):

 

* A zero balance may reflect actual amounts rounding to less than one thousand.

 

^ Security is in default.

 

(a) Zero coupon security.

 

(b) Coupon represents a yield to maturity.

 

(c) Security becomes interest bearing at a future date.

 

(d) Represents an underlying municipal bond transferred to a tender option bond trust established in a tender option bond transaction in which the Fund sold, or caused the sale of, the underlying municipal bond and purchased the residual interest certificate. The security serves as collateral in a financing transaction.

 

(e) Represents an investment in a tender option bond residual interest certificate purchased in a secondary market transaction. The interest rate shown bears an inverse relationship to the interest rate on a tender option bond floating rate certificate. The interest rate disclosed reflects the rate in effect on March 31, 2017.

Fair Value Measurements

The following is a summary of the fair valuations according to the inputs used as of March 31, 2017 in valuing the Fund’s assets and liabilities:

 

Category and Subcategory    Level 1        Level 2        Level 3        Fair Value
at 03/31/2017		  

Investments in Securities, at Value

                  

Municipal Bonds & Notes

                  

Alabama

    $ 0        $ 55,773        $ 0        $ 55,773  

Arizona

      0          96,011          0          96,011  

California

      0          143,442          0          143,442  

Colorado

      0          15,631          0          15,631  

Connecticut

      0          2,433          0          2,433  

Florida

      0          41,217          0          41,217  

Georgia

      0          34,980          0          34,980  

Hawaii

      0          8,419          0          8,419  

Illinois

      0          97,979          0          97,979  

Indiana

      0          2,793          0          2,793  

Iowa

      0          15,781          0          15,781  

Kansas

      0          1,381          0          1,381  

Kentucky

      0          1,079          0          1,079  

Louisiana

      0          8,147          0          8,147  

Maryland

      0          8,453          0          8,453  

Massachusetts

      0          12,777          0          12,777  

Michigan

      0          31,448          0          31,448  

Minnesota

      0          3,142          0          3,142  

Mississippi

      0          41          0          41  

Missouri

      0          11,022          0          11,022  

New Hampshire

      0          2,240          0          2,240  

New Jersey

      0          73,391          0          73,391  

New Mexico

      0          2,190          0          2,190  

New York

      0          144,052          0          144,052  

North Dakota

      0          3,736          0          3,736  

Ohio

      0          86,729          0          86,729  

Oregon

      0          2,351          0          2,351  

Pennsylvania

      0          69,493          0          69,493  

Rhode Island

      0          21,692          0          21,692  

South Carolina

      0          11,758          0          11,758  

Tennessee

      0          19,589          0          19,589  

Texas

      0          127,478          0          127,478  

U.S. Virgin Islands

      0          9,742          0          9,742  

Virginia

      0          2,327          0          2,327  

Washington

      0          15,732          0          15,732  

West Virginia

      0          3,909          0          3,909  

Wisconsin

      0          1,101          0          1,101  

Short-Term Instruments

                  

Short-Term Notes

      0          600          0          600  

Total Investments

    $   0        $   1,190,059        $   0        $   1,190,059  

There were no significant transfers among Levels 1, 2, or 3 during the period ended March 31, 2017.

See Accompanying Notes

Notes to Financial Statements

1. INVESTMENT VALUATION AND FAIR VALUE MEASUREMENTS

(a) Investment Valuation Policies The net asset value (‘NAV”) of the Fund’s shares is determined by dividing the total value of portfolio investments and other assets, less any liabilities attributable to that Fund, by the total number of shares outstanding of that Fund.

On each day that the New York Stock Exchange (“NYSE”) is open, Fund shares are ordinarily valued as of the close of regular trading (“NYSE Close”). Information that becomes known to the Fund or its agents after the time as of which NAV has been calculated on a particular day will not generally be used to retroactively adjust the price of a security or the NAV determined earlier that day. The Fund reserves the right to change the time as of which its respective NAV is calculated if the Fund closes earlier, or as permitted by the U.S. Securities and Exchange Commission (the “SEC”).

For purposes of calculating NAV, portfolio securities and other assets for which market quotes are readily available are valued at market value. Market value is generally determined on the basis of official closing prices or the last reported sales prices, or if no sales are reported, based on quotes obtained from established market makers or prices (including evaluated prices) supplied by the Fund’s approved pricing services, quotation reporting systems and other third-party sources (together, “Pricing Services”). The Fund will normally use pricing data for domestic equity securities received shortly after the NYSE Close and do not normally take into account trading, clearances or settlements that take place after the NYSE Close. A foreign (non-U.S.) equity security traded on a foreign exchange or on more than one exchange is typically valued using pricing information from the exchange considered by Pacific Investment Management Company LLC (“PIMCO” or the “Manager”) to be the primary exchange. A foreign (non-U.S.) equity security will be valued as of the close of trading on the foreign exchange, or the NYSE Close, if the NYSE Close occurs before the end of trading on the foreign exchange. Domestic and foreign (non-U.S.) fixed income securities, non-exchange traded derivatives, and equity options are normally valued on the basis of quotes obtained from brokers and dealers or Pricing Services using data reflecting the earlier closing of the principal markets for those securities. Prices obtained from Pricing Services may be based on, among other things, information provided by market makers or estimates of market values obtained from yield data relating to investments or securities with similar characteristics. Certain fixed income securities purchased on a delayed-delivery basis are marked to market daily until settlement at the forward settlement date. Exchange-traded options, except equity options, futures and options on futures are valued at the settlement price determined by the relevant exchange. Swap agreements are valued on the basis of bid quotes obtained from brokers and dealers or market-based prices supplied by Pricing Services or other pricing sources. The Fund’s investments in open-end management investment companies, other than exchange-traded funds (“ETFs”), are valued at the NAVs of such investments.

Investments for which market quotes or market based valuations are not readily available are valued at fair value as determined in good faith by the Board or persons acting at their direction. The Board has adopted methods for valuing securities and other assets in circumstances where market quotes are not readily available, and has delegated to PIMCO the responsibility for applying the fair valuation methods. In the event that market quotes or market based valuations are not readily available, and the security or asset cannot be valued pursuant to a Board approved valuation method, the value of the security or asset will be determined in good faith by the Valuation Oversight Committee of the Board (“Valuation Oversight Committee”), generally based on recommendations provided by the Manager. Market quotes are considered not readily available in circumstances where there is an absence of current or reliable market-based data (e.g., trade information, bid/ask information, indicative market quotations (“Broker Quotes”), Pricing Services’ prices), including where events occur after the close of the relevant market, but prior to the NYSE Close, that materially affect the values of the Fund’s securities or assets. In addition, market quotes are considered not readily available when, due to extraordinary circumstances, the exchanges or markets on which the securities trade do not open for trading for the entire day and no other market prices are available. The Board has delegated to the Manager the responsibility for monitoring significant events that may materially affect the values of the Fund’s securities or assets and for determining whether the value of the applicable securities or assets should be reevaluated in light of such significant events.

When the Fund uses fair valuation to determine the value of a portfolio security or other asset for purposes of calculating its NAV, such investments will not be priced on the basis of quotes from the primary market in which they are traded, but rather may be priced by another method that the Board or persons acting at their direction believe reflects fair value. Fair valuation may require subjective determinations about the value of a security. While the Fund’s policy is intended to result in a calculation of the Fund’s NAV that fairly reflects security values as of the time of pricing, the Fund cannot ensure that fair values determined by the Board or persons acting at their direction would accurately reflect the price that the Fund could obtain for a security if it were to dispose of that security as of the time of pricing (for instance, in a forced or distressed sale). The prices used by the Fund may differ from the value that would be realized if the securities were sold.

(b) Fair Value Hierarchy U.S. GAAP describes fair value as the price that the Fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. It establishes a fair value hierarchy that prioritizes inputs to valuation methods and requires disclosure of the fair value hierarchy, separately for each major category of assets and liabilities, that segregates fair value measurements into levels (Level 1, 2, or 3). The inputs or methodology used for valuing securities are not necessarily an indication of the risks associated with investing in those securities. Levels 1, 2, and 3 of the fair value hierarchy are defined as follows:

 

•   Level 1—Quoted prices in active markets or exchanges for identical assets and liabilities.

 

•   Level 2—Significant other observable inputs, which may include, but are 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—Significant unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available, which may include assumptions made by the Board or persons acting at their direction that are used in determining the fair value of investments.

In accordance with the requirements of U.S. GAAP, the amounts of transfers between Levels 1 and 2 and transfers into and out of Level 3, if material, are disclosed in the Notes to Schedule of Investments for the Fund.

For fair valuations using significant unobservable inputs, U.S. GAAP requires a reconciliation of the beginning to ending balances for reported fair values that presents changes attributable to realized gain (loss), unrealized appreciation (depreciation), purchases and sales, accrued discounts (premiums), and transfers into and out of the Level 3 category during the period. The end of period value is used for the transfers between Levels of the Fund’s assets and liabilities. Additionally, U.S. GAAP requires quantitative information regarding the significant unobservable inputs used in the determination of fair value of assets or liabilities categorized as Level 3 in the fair value hierarchy. In accordance with the requirements of U.S. GAAP, a fair value hierarchy, and if material, a Level 3 reconciliation and details of significant unobservable inputs, have been included in the Notes to Schedule of Investments for the Fund.

(c) Valuation Techniques and the Fair Value Hierarchy

Level 1 and Level 2 trading assets and trading liabilities, at fair value The valuation methods (or “techniques”) and significant inputs used in determining the fair values of portfolio securities or other assets and liabilities categorized as Level 1 and Level 2 of the fair value hierarchy are as follows:

Fixed income securities including corporate, convertible and municipal bonds and notes, U.S. government agencies, U.S. treasury obligations, sovereign issues, bank loans, convertible preferred securities and non-U.S. bonds are normally valued on the basis of quotes obtained from brokers and dealers or Pricing Services that use broker-dealer quotations, reported trades or valuation estimates from their internal pricing models. The Pricing Services’ internal models use inputs that are observable such as issuer details, interest rates, yield curves, prepayment speeds, credit risks/spreads, default rates and quoted prices for similar assets. Securities that use similar valuation techniques and inputs as described above are categorized as Level 2 of the fair value hierarchy.

Fixed income securities purchased on a delayed-delivery basis or as a repurchase commitment in a sale-buyback transaction are marked to market daily until settlement at the forward settlement date and are categorized as Level 2 of the fair value hierarchy.

Level 3 trading assets and trading liabilities, at fair value When a fair valuation method is applied by the Adviser that uses significant unobservable inputs, investments will be priced by a method that the Board or persons acting at their direction believe reflects fair value and are categorized as Level 3 of the fair value hierarchy.

Short-term debt instruments (such as commercial paper) having a remaining maturity of 60 days or less may be valued at amortized cost, so long as the amortized cost of such short-term debt instrument is approximately the same as the fair value of the instrument as determined without the use of amortized cost valuation. Short-term debt instruments having a remaining maturity of 60 days or less are categorized as Level 3 of the fair value hierarchy.

The validity of the fair value is reviewed by the Manager on a periodic basis and may be amended in accordance with the Fund’s valuation procedures.

2. FEDERAL INCOME TAX MATTERS

The Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code (the “Code”) and distribute all of its taxable income and net realized gains, if applicable, to shareholders. Accordingly, no provision for Federal income taxes has been made.

The Fund may be subject to local withholding taxes, including those imposed on realized capital gains. Any applicable foreign capital gains tax is accrued daily based upon net unrealized gains, and may be payable following the sale of any applicable investments.

In accordance with U.S. GAAP, the Manager has reviewed the Fund’s tax positions for all open tax years. As of March 31, 2017, the Fund has recorded no liability for net unrecognized tax benefits relating to uncertain income tax positions they have taken or expect to take in future tax returns.

The Fund files U.S. tax returns. While the statute of limitations remains open to examine the Fund’s U.S. tax returns filed for the fiscal years from 2014-2016, no examinations are in progress or anticipated at this time. The Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.

As of March 31, 2017, the aggregate cost and the net unrealized appreciation (depreciation) of investments for Federal income tax purposes are as follows (amounts in thousands):

 

                                                              
Federal
Tax Cost		   Aggregate Gross
Unrealized
Appreciation		     Aggregate Gross
Unrealized
(Depreciation)		     Net Unrealized
Appreciation
(Depreciation)  (1)		  
$  1,094,529   $   101,295     $   (5,765 )    $   95,530  

 

(1) Primary differences, if any, between book and tax net unrealized appreciation (depreciation) are attributable to wash sale loss deferrals for federal income tax purposes.

GLOSSARY: (abbreviations that may be used in the preceding statements)      (Unaudited)
Currency Abbreviations:                  
USD (or $)    United States Dollar          
Municipal Bond or Agency Abbreviations:                  
AGC    Assured Guaranty Corp.   AMBAC    American Municipal Bond Assurance Corp.   NPFGC    National Public Finance Guarantee Corp.
AGM    Assured Guaranty Municipal   FHA    Federal Housing Administration     

Item 2. Controls and Procedures

 

  (a) The principal executive officer and principal financial & accounting officer 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”) (17 CFR 270.30a-3(c))), are effective based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of this report.

 

  (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 (17 CFR 270.30a-3(d))) 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

A separate certification for each principal executive officer and principal financial & accounting officer of the registrant as required by Rule 30a-2 under the 1940 Act is attached as Exhibit 99.CERT.

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.

PIMCO Municipal Income Fund II

 

By:  

/s/ Peter G. Strelow

Peter G. Strelow
President (Principal Executive Officer)
Date: May 26, 2017
By:  

/s/ William G. Galipeau

William G. Galipeau

Treasurer (Principal Financial & Accounting Officer)

Date: May 26, 2017

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/ Peter G. Strelow

Peter G. Strelow
President (Principal Executive Officer)
Date: May 26, 2017
By:  

/s/ William G. Galipeau

William G. Galipeau

Treasurer (Principal Financial & Accounting Officer)

Date: May 26, 2017