BLACKROCK MUNIHOLDINGS QUALITY FUND II, INC.

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 811-09191

Name of Fund: BlackRock MuniHoldings Quality Fund II, Inc. (MUE)

Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809

Name and address of agent for service: John M. Perlowski, Chief Executive Officer, BlackRock MuniHoldings Quality Fund II, Inc., 55 East 52nd Street, New York, NY 10055

Registrant’s telephone number, including area code: (800) 882-0052, Option 4

Date of fiscal year end: 07/31/2013

Date of reporting period: 04/30/2013

Item 1    –    Schedule of Investments

Schedule of Investments April 30, 2013 (Unaudited)    BlackRock MuniHoldings Quality Fund II, Inc. (MUE)
   (Percentages shown are based on Net Assets)

 

Municipal Bonds

    Par
(000)		      Value  

Alabama – 3.6%

      

Alabama Incentives Financing Authority, RB, Series A,

      

5.00%, 9/01/42

    $ 1,710       $ 1,914,157   

Birmingham Special Care Facilities Financing Authority, RB, Children’s Hospital (AGC),

      

6.00%, 6/01/39

      5,225         6,218,900   

Birmingham Water Works Board, RB, Series B:

      

5.00%, 1/01/38

      895         1,006,624   

5.00%, 1/01/43

      1,865         2,086,226   

Selma IDB, RB, International Paper Co. Project, Series A,

      

5.38%, 12/01/35

      940         1,039,950   
     

 

 

  
        12,265,857   
     

 

 

  

Arizona – 2.2%

      

Arizona Board of Regents, Refunding COP, University of Arizona, Series C,

      

5.00%, 6/01/28

      4,180         4,840,440   

Arizona Board of Regents, Refunding RB, Arizona State University System, Series A,

      

5.00%, 7/01/42

      2,460         2,817,782   
     

 

 

  
        7,658,222   
     

 

 

  

California – 15.6%

      

California Educational Facilities Authority, RB, University of Southern California, Series A,

      

5.25%, 10/01/38

      5,050         5,907,288   

California Health Facilities Financing Authority, RB, Sutter Health, Series B,

      

6.00%, 8/15/42

      2,865         3,544,148   

City of San Jose California, Refunding ARB, Series A-1, AMT,

      

5.50%, 3/01/30

      4,045         4,627,844   

City of Sunnyvale California, Refunding RB,

      

5.25%, 4/01/40

      2,800         3,226,832   

County of Sacramento California, ARB, Senior Series A (AGC),

      

5.50%, 7/01/41

      3,500         4,055,835   

Emery Unified School District, GO, Election of 2010, Series A (AGM),

      

5.50%, 8/01/35

      1,875         2,189,963   

Los Angeles Community College District California, GO:

      

Election of 2001, Series A (NPFGC), 5.00%, 8/01/32

      5,000         5,632,800   

Election of 2008, Series C, 5.25%, 8/01/39

      2,000         2,407,340   

Oceanside Unified School District California, GO, Series A (AGC),

      

5.25%, 8/01/33

      1,675         1,865,431   

Redondo Beach Unified School District, GO, Election of 2008, Series E,

      

5.50%, 8/01/34

      2,670         3,180,451   

San Bernardino Community College District, GO, Election of 2002, Series A,

      

6.25%, 8/01/18(a)

      2,165         2,763,579   

San Bernardino Community College District, GO, Election of 2002, Series A,San Francisco City & County Airports Commission, RB, Specialty Facility Lease, SFO Fuel, Series A, AMT (AGM),

      

6.10%, 1/01/20

      1,250         1,255,550   

State of California, GO, Various Purpose,

      

5.00%, 4/01/37

      3,500         3,980,725   

State of California, GO, Refunding, Various Purpose,

      

5.00%, 9/01/41

      4,760         5,290,359   

Ventura County Community College District, GO, Election of 2002, Series C,

      

5.50%, 8/01/33

      3,175         3,733,609   
     

 

 

  
        53,661,754   
     

 

 

  

Colorado – 1.6%

      

City & County of Denver Colorado, Refunding ARB, Series B,

      

5.00%, 11/15/37

      1,505         1,710,312   

Colorado Health Facilities Authority, RB, Hospital, NCMC, Inc. Project, Series B (AGM),

      

6.00%, 5/15/26

      3,300         3,907,860   
     

 

 

  
        5,618,172   
     

 

 

  

Florida – 14.7%

      

City of Jacksonville Florida, RB, Series A,

      

5.25%, 10/01/26

      2,000         2,417,740   

City of Jacksonville Florida, Refunding RB, Better Jacksonville, Series A,

      

5.00%, 10/01/30

      1,885         2,178,909   

County of Lee Florida, Refunding ARB, Series A, AMT,

      

5.38%, 10/01/32

      2,500         2,788,025   

County of Miami-Dade Florida Aviation, Refunding RB, Miami International Airport, Series A, AMT:

      

(AGM), 5.25%, 10/01/41

      4,610         5,169,239   

(AGM), 5.50%, 10/01/41

      4,180         4,781,042   

5.00%, 10/01/31

      3,500         3,903,200   

Jacksonville Florida Port Authority, Refunding RB, AMT,

      

5.00%, 11/01/38

      2,215         2,408,768   

JEA Electric System Revenue, Refunding RB, Sub-Series C,

      

5.00%, 10/01/37(b)

      5,680         6,456,172   

Orange County School Board, COP, Series A (AGC),

      

5.50%, 8/01/34

      7,600         8,726,928   

Orlando-Orange County Expressway Authority, Refunding RB,

      

5.00%, 7/01/35

      2,000         2,271,240   

Tampa-Hillsborough County Expressway Authority, Refunding RB, Series B,

      

5.00%, 7/01/42

      1,215         1,353,814   

 

    BLACKROCK MUNIHOLDINGS QUALITY FUND II, INC.    APRIL 30, 2013   1

Schedule of Investments (continued)    BlackRock MuniHoldings Quality Fund II, Inc. (MUE)
   (Percentages shown are based on Net Assets)

 

Municipal Bonds

    Par
(000)		      Value  

Florida (concluded)

      

Tohopekaliga Water Authority, Refunding RB, Series A,

      

5.25%, 10/01/36

    $ 6,965       $ 8,078,216   
     

 

 

  
        50,533,293   
     

 

 

  

Georgia – 1.9%

      

Augusta GA Water & Sewerage, RB (AGM),

      

5.25%, 10/01/34

      6,290         6,666,708   
     

 

 

  

Idaho – 0.1%

      

Idaho Housing & Finance Association, RB, S/F Mortgage, Series E, AMT,

      

6.00%, 1/01/32

      230         230,421   
     

 

 

  

Illinois – 14.0%

      

Chicago Illinois Board of Education, GO, Series A,

      

5.50%, 12/01/39

      3,405         3,887,182   

Chicago Illinois Board of Education, GO, Refunding, Chicago School Reform Board, Series A (NPFGC),

      

5.50%, 12/01/26

      895         1,117,246   

Chicago Transit Authority, RB:

      

Federal Transit Administration Section 5309, Series A (AGC), 6.00%, 6/01/26

      3,400         3,946,992   

Sales Tax Receipts, 5.25%, 12/01/36

      1,060         1,215,979   

Sales Tax Receipts, 5.25%, 12/01/40

      5,235         5,988,473   

City of Chicago Illinois, GARB, O’Hare International Airport, Third Lien:

      

Series A, 5.75%, 1/01/39

      2,000         2,350,260   

Series C (AGM), 6.50%, 1/01/41

      9,085         11,768,255   

City of Chicago Illinois, Refunding RB, Sales Tax Revenue, Series A,

      

5.25%, 1/01/38

      1,310         1,506,500   

Cook County Forest Preserve District, GO, Series C,

      

5.00%, 12/15/32

      965         1,104,771   

Cook County Forest Preserve District, GO, Refunding, Limited Tax Project, Series B,

      

5.00%, 12/15/32

      455         520,902   

Illinois Finance Authority, Refunding RB, North Western Memorial Healthcare,

      

5.00%, 8/15/37

      755         862,799   

Illinois State Toll Highway Authority, RB, Series A,

      

5.00%, 1/01/38(b)

      2,480         2,804,558   

Metropolitan Pier & Exposition Authority, Refunding RB, McCormick Place Project, Series B,

      

5.00%, 12/15/28

      3,400         3,953,928   

Railsplitter Tobacco Settlement Authority, RB:

      

5.50%, 6/01/23

      2,350         2,872,217   

6.00%, 6/01/28

      670         818,197   

State of Illinois, RB, Build Illinois, Series B,

      

5.25%, 6/15/28

      3,000         3,511,950   
     

 

 

  
        48,230,209   
     

 

 

  

Indiana – 1.1%

      

Indiana Finance Authority, RB, Private Activity, Ohio River Bridges East End Crossing Project, Series A, AMT:

      

5.00%, 7/01/40

      460         490,176   

5.00%, 7/01/44

      475         504,141   

Indianapolis Local Public Improvement Bond Bank, Refunding RB, Waterworks Project, Series A (AGC),

      

5.50%, 1/01/38

      2,370         2,679,333   
     

 

 

  
        3,673,650   
     

 

 

  

Kansas – 1.3%

      

Kansas Development Finance Authority, Refunding RB, Adventist Health Sunbelt Obligation, Series A,

      

5.00%, 11/15/32

      4,000         4,612,240   
     

 

 

  

Louisiana – 0.3%

      

Louisiana State University & Agricultural & Mechanical College, RB,

      

5.00%, 7/01/37

      760         867,282   
     

 

 

  

Massachusetts – 0.4%

      

Massachusetts Development Finance Agency, RB, Wellesley College, Series J,

      

5.00%, 7/01/42

      1,125         1,306,114   
     

 

 

  

Michigan – 4.2%

      

City of Detroit Michigan, Refunding RB, Sewage Disposal System, Senior Lien (AGM):

      

Series B, 7.50%, 7/01/33

      1,330         1,647,803   

Series C-1, 7.00%, 7/01/27

      4,180         5,128,317   

Hudsonville Public Schools, GO, School Building & Site (Q-SBLF),

      

5.25%, 5/01/41

      3,420         3,875,407   

Royal Oak Hospital Finance Authority Michigan, Refunding RB, William Beaumont Hospital,

      

8.25%, 9/01/39

      3,115         3,990,845   
     

 

 

  
        14,642,372   
     

 

 

  

Minnesota – 0.7%

      

City of Minneapolis Minnesota, Refunding RB, Fairview Health Services, Series B (AGC),

      

6.50%, 11/15/38

      1,975         2,418,387   
     

 

 

  

Mississippi – 2.3%

      

Mississippi Development Bank, Refunding RB, Series A:

      

Jackson Public School District, 5.00%, 4/01/28

      2,000         2,281,940   

 

2   BLACKROCK MUNIHOLDINGS QUALITY FUND II, INC.    APRIL 30, 2013    

Schedule of Investments (continued)    BlackRock MuniHoldings Quality Fund II, Inc. (MUE)
   (Percentages shown are based on Net Assets)

 

Municipal Bonds

    Par
(000)		      Value  

Mississippi (concluded)

      

Mississippi Development Bank, Refunding RB, Series A (concluded):

      

Water and Sewer System (AGM), 5.00%, 9/01/30

    $ 4,930       $ 5,727,477   
     

 

 

  
        8,009,417   
     

 

 

  

Nevada – 1.4%

      

County of Clark Nevada, ARB:

      

Las Vegas-McCarran International Airport, Series A (AGM), 5.25%, 7/01/39

      3,210         3,620,752   

Subordinate Lien, Series A-2 (NPFGC), 5.00%, 7/01/36

      1,300         1,353,300   
     

 

 

  
        4,974,052   
     

 

 

  

New Jersey – 6.2%

      

New Jersey EDA, RB, Motor Vehicle Surcharge, Series A (NPFGC),

      

5.25%, 7/01/33

      6,625         6,944,325   

New Jersey Health Care Facilities Financing Authority, RB, Virtua Health (AGC),

      

5.50%, 7/01/38

      3,400         3,778,182   

New Jersey State Turnpike Authority, RB, Series A,

      

5.00%, 1/01/38

      1,250         1,401,137   

New Jersey Transportation Trust Fund Authority, RB, Transportation System, Series A:

      

5.50%, 6/15/41

      3,030         3,551,039   

5.00%, 6/15/42

      2,000         2,220,980   

(AGC), 5.63%, 12/15/28

      2,930         3,496,164   
     

 

 

  
        21,391,827   
     

 

 

  

New York – 8.8%

      

Hudson New York Yards Infrastructure Corp., RB, Series A,

      

5.75%, 2/15/47

      940         1,116,015   

New York City Municipal Water Finance Authority, Refunding RB:

      

Fiscal 2009, Series EE, 5.25%, 6/15/40

      6,930         8,033,394   

Second General Resolution, Series EE, 5.38%, 6/15/43

      2,220         2,620,821   

New York City Transitional Finance Authority, RB, Sub-Series S-2A,

      

5.00%, 7/15/30

      4,045         4,709,513   

New York State Dormitory Authority, RB, Series B:

      

5.00%, 3/15/37

      1,120         1,284,898   

5.00%, 3/15/42

      3,500         3,994,900   

New York State Thruway Authority, Refunding RB, Series I,

      

5.00%, 1/01/37

      1,740         1,962,772   

Sales Tax Asset Receivable Corp., Refunding RB, Series A (AMBAC),

      

5.25%, 10/15/27

      6,250         6,659,500   
     

 

 

  
        30,381,813   
     

 

 

  

North Carolina – 1.2%

      

North Carolina Medical Care Commission, RB, Duke University Health System, Series A,

      

5.00%, 6/01/32

      3,400         3,978,476   
     

 

 

  

Ohio – 1.2%

      

The Ohio State University, RB, Special Purpose General Receipts, Series A,

      

5.00%, 6/01/38

      3,490         4,047,388   
     

 

 

  

Pennsylvania – 1.7%

      

Pennsylvania Turnpike Commission, RB, Motor License Fund, Enhanced Turnpike Subordinate Special, Series A:

      

5.00%, 12/01/31

      3,360         3,846,864   

5.00%, 12/01/36

      940         1,066,252   

5.00%, 12/01/38

      805         904,683   
     

 

 

  
        5,817,799   
     

 

 

  

Puerto Rico – 1.1%

      

Puerto Rico Sales Tax Financing Corp., RB, First Sub-Series A,

      

6.38%, 8/01/39

      3,500         3,945,270   
     

 

 

  

South Carolina – 6.1%

      

Charleston Educational Excellence Finance Corp., Refunding RB, Charleston County School (b):

      

5.00%, 12/01/29

      2,615         3,107,169   

5.00%, 12/01/30

      2,985         3,528,927   

City of North Charleston South Carolina, RB, Public Facilities Corp. Installment Purchase,

      

5.00%, 6/01/35

      3,380         3,853,470   

South Carolina State Public Service Authority, Refunding RB, Series A:

      

Santee Cooper, 5.50%, 1/01/38

      2,500         2,879,800   

(AMBAC), 5.00%, 1/01/42

      7,000         7,791,770   
     

 

 

  
        21,161,136   
     

 

 

  

Texas – 18.7%

      

City of Brownsville Texas Utilities System Revenue, Refunding RB, Series A,

      

5.00%, 9/01/29(b)

      2,060         2,409,870   

City of Houston, GO, Refunding, Public Improvement, Series A,

      

5.00%, 3/01/38(b)

      1,320         1,526,329   

City of Houston Texas Utility System, Refunding RB, Utility System, First Lien, Series A (AGC),

      

6.00%, 11/15/35

      6,700         8,103,382   

Dallas Area Rapid Transit, Refunding RB, Senior Lien,

      

5.25%, 12/01/38

      4,555         5,244,764   

Dallas/Fort Worth International Airport, ARB, Series H, AMT,

      

5.00%, 11/01/42

      2,025         2,153,223   

 

    BLACKROCK MUNIHOLDINGS QUALITY FUND II, INC.    APRIL 30, 2013   3

Schedule of Investments (continued)    BlackRock MuniHoldings Quality Fund II, Inc. (MUE)
   (Percentages shown are based on Net Assets)

 

Municipal Bonds

    Par
(000)		      Value  

Texas (concluded)

      

Harris County Health Facilities Development Corp., Refunding RB, Memorial Hermann Healthcare System,
Series B,

      

7.25%, 12/01/18(a)

    $ 1,000       $ 1,337,480   

Houston Community College System, GO,

      

5.00%, 2/15/36

      1,320         1,535,661   

North Texas Tollway Authority, RB, Special Projects System, Series A,

      

5.50%, 9/01/41

      7,000         8,321,740   

North Texas Tollway Authority, Refunding RB:

      

Series A (NPFGC), 5.63%, 1/01/33

      10,975         12,503,269   

Series B, 5.00%, 1/01/42

      1,030         1,144,629   

Series B (NPFGC), 5.75%, 1/01/40

      1,000         1,147,590   

First Tier, Series K-2 (AGC), 6.00%, 1/01/38

      1,000         1,164,350   

First Tier, Series A (NPFGC), 5.75%, 1/01/40

      11,575         13,222,817   

Tarrant County Cultural Education Facilities Finance Corp., Refunding RB, Christus Health, Series A (AGC),

      

6.50%, 7/01/37

      3,000         3,536,670   

Texas Transportation Commission, Refunding RB, Central Texas Turnpike System, First Tier, Series A,

      

5.00%, 8/15/41

      1,110         1,209,767   
     

 

 

  
        64,561,541   
     

 

 

  

Utah – 1.9%

      

Utah Transit Authority, Refunding RB,

      

5.00%, 6/15/42

      5,765         6,521,887   
     

 

 

  

Virginia – 1.4%

      

Fairfax County IDA, RB, Inova Health System, Series A,

      

5.00%, 5/15/40

      1,740         1,985,653   

Virginia Public School Authority, RB, School Financing,

      

6.50%, 12/01/18(a)

      2,195         2,873,058   
     

 

 

  
        4,858,711   
     

 

 

  

Washington – 1.4%

      

City of Seattle Washington, Refunding RB, Light and Power, Series A,

      

5.25%, 2/01/36

      2,400         2,790,768   

State of Washington, GO, Various Purpose, Series B,

      

5.25%, 2/01/36

      1,865         2,191,300   
     

 

 

  
        4,982,068   
     

 

 

  

Wisconsin – 1.3%

      

Wisconsin Health & Educational Facilities Authority, RB, Ascension Health, Series D,

      

5.00%, 11/15/41

      3,125         3,520,062   

Wisconsin Health & Educational Facilities Authority, Refunding RB, Froedtert Health, Inc. Obligated Group,
Series A,

      

5.00%, 4/01/42

      790         881,680   
     

 

 

  
        4,401,742   
     

 

 

  

Total Municipal Bonds – 116.4%

         401,417,808   
     

 

 

  

Municipal Bonds Transferred to Tender Option Bond (TOB) Trusts (c)

              

Alabama – 1.2%

      

Mobile Board of Water & Sewer Commissioners, RB (NPFGC),

      

5.00%, 1/01/31

      3,750         4,052,100   
     

 

 

  

California – 2.2%

      

Sequoia Union High School District California, GO, Refunding, Election of 2004, Series B (AGM),

      

5.50%, 7/01/35

      5,189         5,788,980   

University of California, Refunding RB, Limited Project, Series G,

      

5.00%, 5/15/37

      1,500         1,723,268   
     

 

 

  
        7,512,248   
     

 

 

  

Colorado – 3.0%

      

Colorado Health Facilities Authority, RB, Catholic Health, Series C-3 (AGM),

      

5.10%, 10/01/41

      9,410         10,371,232   
     

 

 

  

District of Columbia – 0.6%

      

District of Columbia Water & Sewer Authority, Refunding RB, Series A,

      

6.00%, 10/01/35(d)

      1,700         2,052,468   
     

 

 

  

Florida – 7.8%

      

City of St. Petersburg Florida, Refunding RB (NPFGC),

      

5.00%, 10/01/35

      6,493         6,993,643   

County of Miami-Dade Florida, GO, Building Better Communities Program, Series B-1,

      

6.00%, 7/01/38

      12,500         14,748,500   

County of Miami-Dade Florida, Refunding RB, Transit System Sales Surtax,

      

5.00%, 7/01/42

      3,400         3,831,018   

Lee County Housing Finance Authority, RB, Multi-County Program, Series A-2, AMT (Ginnie Mae),

      

6.00%, 9/01/40

      1,215         1,281,643   
     

 

 

  
        26,854,804   
     

 

 

  

Illinois – 6.9%

      

City of Chicago Illinois, ARB, O’Hare International Airport, Series A (AGM),

      

5.00%, 1/01/38

      15,000         16,586,100   

 

4   BLACKROCK MUNIHOLDINGS QUALITY FUND II, INC.    APRIL 30, 2013    

Schedule of Investments (continued)    BlackRock MuniHoldings Quality Fund II, Inc. (MUE)
   (Percentages shown are based on Net Assets)

 

Municipal Bonds Transferred to Tender Option Bond (TOB) Trusts (c)

    Par
(000)		      Value  

Illinois (concluded)

      

City of Chicago Illinois, Refunding RB, Water System:

      

5.00%, 11/01/42

    $ 2,439       $ 2,762,046   

Second Lien (AGM),

      

5.25%, 11/01/33

      3,969         4,563,394   
     

 

 

  
        23,911,540   
     

 

 

  

Kentucky – 0.8%

      

Kentucky State Property & Building Commission, Refunding RB, Project No. 93 (AGC),

      

5.25%, 2/01/27

      2,304         2,696,523   
     

 

 

  

Massachusetts – 3.3%

      

Massachusetts School Building Authority, RB:

      

Dedicated Sales Tax, Senior Series B, 5.00%, 10/15/41

      5,080         5,862,675   

Series A (AGM), 5.00%, 8/15/15(a)

      644         701,203   

Series A (AGM), 5.00%, 8/15/30

      4,350         4,740,109   
     

 

 

  
        11,303,987   
     

 

 

  

Nevada – 6.4%

      

Clark County Water Reclamation District, GO:

      

Limited Tax, 6.00%, 7/01/38

      10,000         12,020,400   

Series B, 5.50%, 7/01/29

      8,247         10,076,008   
     

 

 

  
        22,096,408   
     

 

 

  

New Jersey – 1.7%

      

New Jersey State Housing & Mortgage Finance Agency, RB, S/F Housing, Series CC,

      

5.25%, 10/01/29

      3,861         4,280,242   

New Jersey Transportation Trust Fund Authority, RB, Transportation System, Series B,

      

5.25%, 6/15/36(d)

      1,500         1,713,810   
     

 

 

  
        5,994,052   
     

 

 

  

New York – 7.7%

      

New York City Municipal Water Finance Authority, Refunding RB, Series FF,

      

5.00%, 6/15/45

      5,958         6,745,376   

New York City Transitional Finance Authority, BARB, Series S-3,

      

5.25%, 1/15/39

      2,300         2,655,120   

New York City Transitional Finance Authority, RB, Future Tax Secured, Sub-Series E-1,

      

5.00%, 2/01/42

      2,919         3,327,218   

New York Liberty Development Corp., RB, 1 World Trade Center Port Authority Construction,

      

5.25%, 12/15/43

      7,515         8,631,010   

New York Liberty Development Corp., Refunding RB, 4 World Trade Center Project,

      

5.75%, 11/15/51

      4,400         5,218,224   
     

 

 

  
        26,576,948   
     

 

 

  

Puerto Rico – 1.0%

      

Puerto Rico Sales Tax Financing Corp., Refunding RB, Sales Tax, Series C,

      

5.25%, 8/01/40

      3,020         3,271,959   
     

 

 

  

Texas – 3.0%

      

Tarrant County Cultural Educational Facilities Finance Corp., RB, Baylor Health Care System Project,
Series A,

      

5.00%, 11/15/38

      4,296         4,819,214   

Waco Educational Finance Corp., Refunding RB, Baylor University,

      

5.00%, 3/01/43

      4,995         5,624,720   
     

 

 

  
        10,443,934   
     

 

 

  

Utah – 0.8%

      

City of Riverton Utah Hospital, RB, IHC Health Services, Inc.,

      

5.00%, 8/15/41

      2,504         2,816,154   
     

 

 

  

Washington – 3.7%

      

City of Bellevue Washington, GO, Refunding (NPFGC),

      

5.50%, 12/01/14(a)

      6,883         7,450,349   

University of Washington, Refunding RB, Series A,

      

5.00%, 7/01/41

      4,694         5,441,583   
     

 

 

  
        12,891,932   
     

 

 

  

Total Municipal Bonds Transferred to Tender Option Bond (TOB) Trusts – 50.1%

         172,846,289   
     

 

 

  

Total Long-Term Investments
(Cost – $523,025,887) – 166.5%

         574,264,097   
     

 

 

  

Short-Term Securities

    Shares         

FFI Institutional Tax-Exempt Fund,

      

0.03% (e)(f)

      5,055,725         5,055,725   
     

 

 

  

Total Short-Term Securities
(Cost – $5,055,725) – 1.5%

         5,055,725   
     

 

 

  

 

    BLACKROCK MUNIHOLDINGS QUALITY FUND II, INC.    APRIL 30, 2013   5

Schedule of Investments (continued)    BlackRock MuniHoldings Quality Fund II, Inc. (MUE)
   (Percentages shown are based on Net Assets)

 

          Value  

Total Investments (Cost – $528,081,612*) – 168.0%

       $ 579,319,822   

Liabilities in Excess of Other Assets – (4.4)%

         (15,241,529 ) 

Liability for TOB Trust Certificates, Including Interest Expense and Fees Payable – (25.6)%

         (88,282,301 ) 

VMTP Shares, at Liquidation Value – (38.0)%

         (131,000,000 ) 
     

 

 

  

Net Assets Applicable to Common Shares – 100.0%

       $ 344,795,992   
     

 

 

  

 

* As of April 30, 2013, gross unrealized appreciation and gross unrealized depreciation based on cost for federal income tax purposes were as follows:

 

Tax cost

    $ 440,285,988   
  

 

 

  

Gross unrealized appreciation

    $ 51,440,944   

Gross unrealized depreciation

      (643,034 ) 
  

 

 

  

Net unrealized appreciation

    $ 50,797,910   
  

 

 

  

 

(a) US government securities, held in escrow, are used to pay interest on this security, as well as to retire the bond in full at the date indicated, typically at a premium to par.

 

(b) When-issued security. Unsettled when-issued transactions were as follows:

 

Counterparty

    Value      Unrealized
Appreciation		  

JPMorgan Chase & Co.

    $ 2,804,558       $ 29,363   

Pershing LLC

    $ 3,936,199       $ 29,724   

Wells Fargo & Co.

    $ 13,092,268       $ 124,183   

 

(c) Securities represent bonds transferred to a TOB in exchange for which the Fund acquired residual interest certificates. These securities serve as collateral in a financing transaction.

 

(d) All or a portion of security is subject to a recourse agreement, which may require the Fund to pay the liquidity provider in the event there is a shortfall between the TOB trust certificates and proceeds received from the sale of the security contributed to the TOB trust. In the case of a shortfall, the aggregate maximum potential amount the Fund could ultimately be required to pay under the agreements, which expire from 10/01/16 to 6/15/19, is $2,492,503.

 

(e) Investments in issuers considered to be an affiliate of the Fund during the period ended April 30, 2013, for purposes of Section 2(a)(3) of the 1940 Act, as amended, were as follows:

 

Affiliate

    Shares Held at
July  31,
2012		      Net Activity      Shares Held at
April  30,
2013		      Income  

FFI Institutional Tax-Exempt Fund

      –         5,055,725         5,055,725       $ 796   

 

(f) Represents the current yield as of report date.

 

•  

Financial futures contracts as of April 30, 2013 were as follows:

 

Contracts
Sold		   

Issue

    Exchange    Expiration    Notional Value      Unrealized
Depreciation		  
(321)    10-Year US Treasury Note    Chicago Board of Trade    June 2013    $ 42,808,359       $ (434,536 ) 

Portfolio Abbreviations

 

To simplify the listings of portfolio holdings in the Schedule of Investments, the names and descriptions of many of the securities have been abbreviated according to the following list:

   AGC   Assured Guaranty Corp.   GARB   General Airport Revenue Bonds
  AGM   Assured Guaranty Municipal Corp.   Ginnie Mae   Government National Mortgage-Association
  AMBAC   American Municipal Bond Assurance Corp.   GO   General Obligation Bonds
  AMT   Alternative Minimum Tax (subject to)   IDA   Industrial Development Authority
  ARB   Airport Revenue Bonds   IDB  

Industrial Development Board

  BARB   Building Aid Revenue Bonds   NPFGC   National Public Finance Guarantee Corp.
  COP   Certificates of Participation   Q-SBLF   Qualified School Bond Loan Fund
  EDA   Economic Development Authority   RB   Revenue Bonds
      S/F   Single-Family

 

6   BLACKROCK MUNIHOLDINGS QUALITY FUND II, INC.    APRIL 30, 2013    

Schedule of Investments (concluded)    BlackRock MuniHoldings Quality Fund II, Inc. (MUE)
  

 

•  

Fair Value Measurements – Various inputs are used in determining the fair value of investments and derivative financial instruments. These inputs to valuation techniques are categorized into a disclosure hierarchy consisting of three broad levels for financial reporting purposes as follows:

 

  •  

Level 1 – unadjusted price quotations in active markets/exchanges for identical assets and liabilities that the Fund has the ability to access

 

  •  

Level 2 – other observable inputs (including, but not limited to, quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs)

 

  •  

Level 3 – unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the Fund’s own assumptions used in determining the fair value of investments and derivative financial instruments)

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. In accordance with the Fund’s policy, transfers between different levels of the fair value disclosure hierarchy are deemed to have occurred as of the beginning of the reporting period. The categorization of a value determined for investments and derivative financial instruments is based on the pricing transparency of the investment and derivative financial instrument and is not necessarily an indication of the risks associated with investing in those securities. For information about the Fund’s policy regarding valuation of investments and derivative financial instruments and other significant accounting policies, please refer to the Fund’s most recent financial statements as contained in its semi-annual report.

The following tables summarize the Fund’s investments and derivative financial instruments categorized in the disclosure hierarchy as of April 30, 2013:

 

      Level 1      Level 2      Level 3      Total  

Assets:

            

Investments:

            

Long-Term Investments1

      –       $ 574,264,097         –       $ 574,264,097   

Short-Term Securities

    $ 5,055,725         –         –         5,055,725   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total

    $ 5,055,725       $ 574,264,097         –       $ 579,319,822   
  

 

 

     

 

 

     

 

 

     

 

 

  

 

1 

See above Schedule of Investments for values in each state or political subdivision.

 

      Level 1     Level 2      Level 3      Total  

Derivative Financial Instruments2

           

Liabilities:

           

Interest rate contracts

    $ (434,536 )      –         –       $ (434,536 ) 
  

 

 

    

 

 

     

 

 

     

 

 

  

 

2 

Derivative financial instruments are financial futures contracts which are valued at unrealized appreciation/depreciation on the instrument.

Certain of the Fund’s assets and liabilities are held at carrying amount, which approximates fair value for financial reporting purposes. As of April 30, 2013, such assets and liabilities are categorized within the disclosure hierarchy as follows:

 

      Level 1      Level 2     Level 3      Total  

Assets:

           

Cash pledged for financial futures contracts

    $ 424,000         –        –       $ 424,000   

Liabilities:

           

TOB trust certificates

      –       $ (88,235,924 )      –         (88,235,924 ) 

VMTP shares

      –         (131,000,000 )      –         (131,000,000 ) 
  

 

 

     

 

 

    

 

 

     

 

 

  

Total

    $ 424,000       $ (219,235,924 )      –       $ (218,811,924 ) 
  

 

 

     

 

 

    

 

 

     

 

 

  

There were no transfers between levels during the period ended April 30, 2013.

 

    BLACKROCK MUNIHOLDINGS QUALITY FUND II, INC.    APRIL 30, 2013   7

Item 2    –    Controls and Procedures
2(a)    –    The registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”)) are effective as of a date within 90 days of the filing of this report based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended.
2(b)    –    There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the registrant’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.
Item 3    –    Exhibits

Certifications – Attached hereto

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

BlackRock MuniHoldings Quality Fund II, Inc.

    
By:  

/s/ John M. Perlowski

    
  John M. Perlowski    
  Chief Executive Officer (principal executive officer) of  
  BlackRock MuniHoldings Quality Fund II, Inc.

Date: June 24, 2013

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

By:  

/s/ John M. Perlowski

    
  John M. Perlowski    
  Chief Executive Officer (principal executive officer) of  
  BlackRock MuniHoldings Quality Fund II, Inc.  
Date: June 24, 2013
By:  

/s/ Neal J. Andrews

    
  Neal J. Andrews    
  Chief Financial Officer (principal financial officer) of  
  BlackRock MuniHoldings Quality Fund II, Inc.  

Date: June 24, 2013