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 811-9191
Name of Fund: MuniHoldings Insured Fund II, Inc.
Fund Address: P.O. Box 9011
Princeton, NJ 08543-9011
Name and address of agent for service: Robert C. Doll, Jr.,
President, MuniHoldings Insured Fund II, Inc., 800 Scudders
Mill Road, Plainsboro, NJ, 08536. Mailing address: P.O. Box
9011, Princeton, NJ, 08543-9011
Registrant's telephone number, including area code: (609) 282-2800
Date of fiscal year end: 09/30/05
Date of reporting period: 10/01/04 - 12/31/04
Item 1 - Schedule of Investments
MuniHoldings Insured Fund II, Inc.
Schedule of Investments as of December 31, 2004 (in Thousands)
Face
State Amount Municipal Bonds Value
Alaska - 1.5% $ 2,995 Alaska Energy Authority, Power Revenue Refunding Bonds (Bradley
Lake), 4th Series, 6% due 7/01/2020 (c) $ 3,605
2,000 Anchorage, Alaska, Water Revenue Refunding Bonds, 6% due
9/01/2024 (a) 2,265
1,700 Matanuska-Susitna Boro, Alaska, GO, Series A, 6% due
3/01/2010 (d)(e) 1,955
Arkansas - 0.7% 3,205 University of Arkansas, University Revenue Bonds (Fayetteville Campus),
5.50% due 12/01/2018 (b) 3,597
California - 16.6% 7,490 California Pollution Control Financing Authority, PCR, Refunding
(Pacific Gas & Electric), AMT, Series A, 5.35% due 12/01/2016 (d) 8,095
California State Department of Water Resources, Power Supply Revenue
Bonds, Series A:
6,865 5.375% due 5/01/2017 (j) 7,612
5,400 5.25% due 5/01/2020 5,801
5,040 5.375% due 5/01/2022 5,427
4,675 California State, GO, Refunding, RIB, AMT, Series 777X, 8.42% due
12/01/2021 (d)(f) 4,933
2,100 California State, Various Purpose, GO, 5.50% due 4/01/2028 2,260
2,800 Compton, California, Unified School District, GO (Election of 2002),
Series B, 5.50% due 6/01/2025 (d) 3,106
Golden State Tobacco Securitization Corporation of California, Tobacco
Settlement Revenue Bonds, Series B:
3,000 5.50% due 6/01/2018 3,135
2,000 5.75% due 6/01/2021 2,128
5,980 5.75% due 6/01/2022 6,342
2,700 5.375% due 6/01/2028 (b) 2,845
1,010 5.60% due 6/01/2028 1,059
515 Los Angeles, California, Department of Water and Power, Electric Plant
Revenue Refunding Bonds, RIB, Series 370, 9.71% due 2/15/2024 (f) 530
3,400 Los Angeles, California, Unified School District, GO (Election of 1997),
Series F, 5% due 1/01/2028 (b) 3,526
11,750 Los Angeles, California, Unified School District, GO, Series A, 5%
due 1/01/2028 (d) 12,186
4,240 Modesto, California, Schools Infrastructure Financing Agency, Special
Tax Bonds, 5.50% due 9/01/2036 (a) 4,608
5,000 Port Oakland, California, Revenue Refunding Bonds, AMT, Series L,
5.375% due 11/01/2027 (b) 5,235
Portfolio
Abbreviations
To simplify the listings of MuniHoldings Insured Fund II, Inc.'s
portfolio holdings in the Schedule of Investments, we have
abbreviated the names of many of the securities according to the
list below.
AMT Alternative Minimum Tax (subject to)
COP Certificates of Participation
EDA Economic Development Authority
GO General Obligation Bonds
HDA Housing Development Authority
HFA Housing Finance Agency
IDR Industrial Development Revenue Bonds
PCR Pollution Control Revenue Bonds
RIB Residual Interest Bonds
S/F Single-Family
MuniHoldings Insured Fund II, Inc. (concluded)
Schedule of Investments as of December 31, 2004 (in Thousands)
Face
State Amount Municipal Bonds Value
California (concluded) $ 1,500 Port Oakland, California, Trust Receipts, Revenue Bonds,
AMT, Class R, Series K, 9.175% due 11/01/2021 (b)(f) $ 1,762
2,250 Sacramento County, California, Sanitation District Financing
Authority, Revenue Refunding Bonds, RIB, Series 366, 9.462% due
12/01/2027 (f) 2,440
1,250 San Francisco, California, City and County Airport Commission,
International Airport, Special Facilities Lease Revenue Bonds
(SFO Fuel Company LLC), AMT, Series A, 6.10% due 1/01/2020 (c) 1,372
3,000 University of California Revenue Bonds (Multiple Purpose Projects),
Series Q, 5% due 9/01/2022 (c) 3,164
Colorado - 3.4% Aurora, Colorado, COP (a):
3,055 5.75% due 12/01/2019 3,440
3,230 5.75% due 12/01/2020 3,630
460 Colorado HFA, Revenue Refunding Bonds (S/F Program), AMT, Senior
Series A-2, 7.50% due 4/01/2031 473
4,000 Colorado Health Facilities Authority, Hospital Revenue Refunding Bonds
(Poudre Valley Health Care), Series A, 5.75% due 12/01/2023 (c) 4,450
4,975 Larimer County, Colorado, Poudre School District Number R-1, GO, 6% due
12/15/2010 (b)(e) 5,789
Connecticut - 2.7% 8,500 Connecticut State, HFA, Revenue Bonds (Housing Mortgage Finance Program),
AMT, Series D-2, 5.15% due 11/15/2022 (d) 8,766
5,000 Connecticut State Health and Educational Facilities Authority, Revenue
Refunding Bonds (University of Hartford), Series E, 5.50% due 7/01/2022 (g) 5,441
Florida - 1.1% 5,500 Dade County, Florida, Water and Sewer System Revenue Bonds, 5.25% due
10/01/2021 (b) 5,858
Idaho - 0.2% 990 Idaho Housing and Finance Association, S/F Mortgage Revenue Bonds, AMT,
Series E, 6% due 1/01/2032 990
Illinois - 8.1% Chicago, Illinois, GO, Series A (b):
8,800 6% due 1/01/2021 9,998
9,330 6% due 1/01/2022 10,600
2,185 Chicago, Illinois, Neighborhoods Alive 21, GO, Series PG-A, 6% due
1/01/2017 (b) 2,497
7,300 Chicago, Illinois, O'Hare International Airport Revenue Bonds, 3rd Lien,
AMT, Series B-2, 6% due 1/01/2029 (j) 8,103
1,600 Kane Cook and Du Page Counties, Illinois, School District Number 46,
Elgin, GO, 6.50% due 1/01/2016 (c) 1,866
Lake Cook, Kane and McHenry Counties, Illinois, Community Unit School
District N220, GO (b):
8,035 6% due 12/01/2010 (e) 9,337
125 6% due 12/01/2020 142
Indiana - 2.0% 9,280 Shelbyville, Indiana, Elementary School Building Corporation Revenue
Bonds, First Mortgage, 5.75% due 1/15/2009 (c)(e) 10,506
Kansas - 1.3% 3,510 Kansas State Development Finance Authority, Health Facilities Revenue
Bonds (Sisters of Charity Leavenworth), Series J, 6.125% due 12/01/2020 3,916
2,805 Sedgwick and Shawnee Counties, Kansas, S/F Mortgage Revenue Bonds, AMT,
Series A-2, 6.20% due 12/01/2033 (h)(i) 2,923
Louisiana - 1.4% 2,000 Louisiana Local Government, Environmental Facilities, Community Development
Authority Revenue Bonds (Capital Projects and Equipment Acquisition),
Series A, 6.30% due 7/01/2030 (a) 2,194
5,000 Louisiana Public Facilities Authority, Mortgage Revenue Refunding Bonds
(Baton Rouge General Medical Center Project), 5.25% due 7/01/2033 (d)(l) 5,228
Maryland - 1.0% 5,000 Maryland State Economic Development Corporation, Lease Revenue Bonds
(Maryland Aviation Administration Facilities), AMT, 5.375% due 6/01/2022 (c) 5,354
Massachusetts - 3.9% 110 Massachusetts State, GO, Refunding, Series D, 5.375% due 8/01/2012 (d)(e) 124
1,105 Massachusetts State Industrial Finance Agency, Higher Education Revenue
Refunding Bonds (Hampshire College Project), 5.80% due 10/01/2007 (e) 1,220
Massachusetts State Special Obligation Dedicated Tax Revenue Bonds (b):
2,655 5.25% due 1/01/2025 2,866
12,345 5.25% due 1/01/2026 13,270
Massachusetts State Water Resource Authority, Revenue Refunding Bonds,
Series A (b):
1,270 6% due 8/01/2016 1,453
1,500 6% due 8/01/2017 1,717
Michigan - 2.4% 2,000 Detroit, Michigan, City School District, GO, Series A, 5.50% due
5/01/2021 (c) 2,237
1,000 Michigan State Hospital Finance Authority Revenue Refunding Bonds
(Mercy Mount Clemens), Series A, 6% due 5/15/2014 (d) 1,123
Michigan State Strategic Fund, Limited Obligation Revenue Refunding Bonds
(Detroit Edison Company Project), AMT (j):
2,000 Series A, 5.50% due 6/01/2030 2,114
5,000 Series C, 5.65% due 9/01/2029 5,295
1,500 Saint Clair County, Michigan, Economic Revenue Refunding Bonds (Detroit
Edison Company), RIB, Series 282, 10.49% due 8/01/2024 (a)(f) 1,917
Minnesota - 2.7% Prior Lake, Minnesota, Independent School District Number 719, GO (c):
2,555 5.50% due 2/01/2016 2,816
1,830 5.50% due 2/01/2017 2,013
3,570 5.50% due 2/01/2018 3,928
2,840 5.50% due 2/01/2019 3,124
2,185 Sauk Rapids, Minnesota, Independent School District Number 47, GO, Series A,
5.625% due 2/01/2018 (d) 2,449
Mississippi - 0.9% 3,725 Mississippi Business Finance Corporation, Mississippi, PCR, Refunding
(System Energy Resources Inc. Project), 5.875% due 4/01/2022 3,736
1,000 Walnut Grove, Mississippi, Correctional Authority, COP, 6% due
11/01/2009 (a)(e) 1,166
Nebraska - 1.1% Omaha, Nebraska, Convention Hotel Corporation, Convention Center Revenue
Bonds, First Tier, Series A (a):
1,410 5.50% due 4/01/2020 1,572
3,985 5.50% due 4/01/2022 4,424
Nevada - 3.9% 1,750 Clark County, Nevada, IDR (Power Company Project), AMT, Series A, 6.70%
due 6/01/2022 (b) 1,795
7,000 Las Vegas, Nevada, New Convention and Visitors Authority Revenue Bonds,
5.75% due 7/01/2016 (a) 7,853
395 Nevada Housing Division, S/F Mortgage Revenue Bonds, AMT, Series A-2,
6.30% due 4/01/2022 (d) 397
Truckee Meadows, Nevada, Water Authority, Water Revenue Bonds, Series A (c):
5,000 5.50% due 7/01/2018 5,574
4,445 5.50% due 7/01/2019 4,955
New Jersey - 5.2% New Jersey EDA, Cigarette Tax Revenue Bonds:
8,590 5.75% due 6/15/2029 9,004
6,200 5.75% due 6/15/2034 6,742
11,000 New Jersey EDA, Motor Vehicle Surcharge Revenue Bonds, Series A, 5.25%
due 7/01/2033 (d) 11,720
New Mexico - 1.0% 5,000 Farmington, New Mexico, PCR, Refunding (Public Service Company of San Juan),
Series C, 5.70% due 12/01/2016 (a) 5,397
New York - 9.7% 14,000 Nassau Health Care Corporation, New York, Health System Revenue Bonds,
5.75% due 8/01/2009 (c)(e) 16,147
5,000 New York City, New York, GO, Refunding, Series G, 5.75% due 2/01/2017 (c) 5,257
5,570 New York City, New York, Sales Tax Asset Receivable Corporation Revenue
Bonds, Series A, 5.25% due 10/15/2027 (a) 5,989
4,345 New York State Dormitory Authority Revenue Bonds (School Districts
Financing Program), Series D, 5.25% due 10/01/2023 (d) 4,731
New York State Dormitory Authority, Revenue Refunding Bonds:
1,280 (School Districts Bond Financing Program), Series A, 5% due 4/01/2016 (d) 1,402
5,000 (State University Educational Facilities), 5.75% due 5/15/2010 (b)(e) 5,770
Tobacco Settlement Financing Corporation of New York Revenue Bonds,
Series C-1:
7,850 5.50% due 6/01/2017 8,594
3,000 5.50% due 6/01/2021 3,285
North Carolina - 0.3% 1,445 North Carolina HFA, Home Ownership Revenue Bonds, AMT, Series 14-A,
5.35% due 1/01/2022 (a) 1,507
Ohio - 0.6% 1,745 Aurora, Ohio, City School District, COP, 6.10% due 12/01/2019 (d) 2,000
1,000 Kent State University, Ohio, University Revenue Bonds, 6% due 5/01/2024 (a) 1,136
Oklahoma - 0.7% 3,385 Claremore, Oklahoma, Public Works Authority, Capital Improvement Revenue
Refunding Bonds, Series A, 5.25% due 6/01/2027 (c) 3,650
Pennsylvania - 2.8% Lycoming County, Pennsylvania, College Authority Revenue Bonds (Pennsylvania
College of Technology) (d):
2,255 5.25% due 7/01/2007 (e) 2,438
3,345 5.25% due 7/01/2018 3,581
6,435 Pennsylvania State Higher Educational Facilities Authority, State System
of Higher Education Revenue Bonds, Series O, 5.125% due 6/15/2024 (a) 6,724
2,090 Washington County, Pennsylvania, Capital Funding Authority Revenue Bonds
(Capital Projects and Equipment Program), 6.15% due 12/01/2029 (a) 2,163
Rhode Island - 2.2% 5,555 Providence, Rhode Island, Redevelopment Agency, Revenue Refunding Bonds
(Public Safety and Municipal Buildings), Series A, 5.75% due 4/01/2019 (a) 6,241
4,685 Rhode Island State Health and Educational Building Corporation Revenue
Bonds (Rhode Island School of Design), Series D, 5.50% due 8/15/2031 (j) 5,055
South Carolina - 0.5% 2,695 South Carolina Housing Finance and Development Authority, Mortgage
Revenue Refunding Bonds, AMT, Series A-2, 6.35% due 7/01/2019 (c) 2,796
Tennessee - 1.3% 3,500 Metropolitan Government of Nashville and Davidson County, Tennessee,
Health and Education Facilities Board, Revenue Refunding Bonds (Ascension
Health Credit), Series A, 5.875% due 11/15/2009 (a)(e) 4,020
1,080 Tennessee HDA, Revenue Bonds (Homeownership Program), AMT, Series 2B,
6% due 7/01/2011 1,127
1,515 Tennessee HDA, Revenue Refunding Bonds (Homeownership Program), AMT,
Series 1, 6.05% due 7/01/2014 (d) 1,561
Texas - 9.1% 4,000 Austin, Texas, Convention Center Revenue Bonds (Convention Enterprises Inc.),
Trust Certificates, Second Tier, Series B, 6% due 1/01/2023 (f) 4,240
16,000 Dallas-Fort Worth, Texas, International Airport Revenue Bonds, AMT,
Series A, 5.50% due 11/01/2033 (d) 16,904
Dallas-Fort Worth, Texas, International Airport Revenue Refunding and
Improvement Bonds, AMT, Series A (b):
1,835 5.875% due 11/01/2017 2,051
2,150 5.875% due 11/01/2018 2,402
2,390 5.875% due 11/01/2019 2,671
El Paso, Texas, Water and Sewer Revenue Refunding and Improvement Bonds,
Series A (c):
2,650 6% due 3/01/2015 3,052
3,875 6% due 3/01/2016 4,460
4,115 6% due 3/01/2017 4,725
4,954 Houston, Texas, Community College System, Participation Interests,
COP (Alief Center Project), 5.75% due 8/15/2022 (d) 5,466
1,850 Midland, Texas, Certificates of Obligation, GO, 6.10% due 3/01/2027 (b) 2,084
Utah - 1.5% 2,400 Salt Lake City, Utah, Municipal Building Authority, Lease Revenue Refunding
Bonds (Municipal Improvements and Refunding Project), Series A, 5.40% due
10/15/2019 (a) 2,653
5,000 Weber County, Utah, Municipal Building Authority, Lease Revenue Refunding
Bonds, 5.75% due 12/15/2019 (d) 5,491
Virginia - 0.9% 4,385 Virginia State, HDA, Commonwealth Mortgage Revenue Bonds, Series J,
Sub-Series J-1, 5.20% due 7/01/2019 (d) 4,478
Washington - 4.2% 6,885 Bellevue, Washington, GO, Refunding, 5.50% due 12/01/2039 (d) 7,452
3,840 Chelan County, Washington, Public Utility District Number 001, Consolidated
Revenue Bonds (Chelan Hydro System), AMT, Series A, 5.45% due 7/01/2037 (a) 4,000
3,445 Lewis County, Washington, GO, Refunding, 5.75% due 12/01/2024 (a) 3,843
2,500 Seattle, Washington, Municipal Light and Power Revenue Bonds, 6% due
10/01/2009 (d)(e) 2,886
3,500 Seattle, Washington, Water System Revenue Bonds, Series B, 6% due
7/01/2029 (b) 3,913
West Virginia - 1.2% 6,210 West Virginia State Housing Development Fund, Housing Finance Revenue
Refunding Bonds, Series D, 5.20% due 11/01/2021 (d) 6,509
Wisconsin - 0.1% 750 Wisconsin State Health and Educational Facilities Authority Revenue Bonds
(Blood Center of Southeastern Wisconsin Project), 5.75% due 6/01/2034 784
Puerto Rico - 1.0% 5,085 Puerto Rico Commonwealth, Public Improvement, GO, 5.125% due 7/01/2030 (c) 5,319
Total Municipal Bonds (Cost - $479,263) - 97.2% 513,047
Shares
Held Short-Term Investments
5,589 Merrill Lynch Institutional Tax-Exempt Fund (k) 5,589
Total Short-Term Investments (Cost - $5,589) - 1.1% 5,589
Total Investments (Cost - $484,852*) - 98.3% 518,636
Other Assets Less Liabilities - 40.5% 213,375
Preferred Stock, at Redemption Value - (38.8%) (204,511)
-----------
Net Assets Applicable to Common Stock - 100.0% $ 527,500
===========
* The cost and unrealized appreciation/depreciation of investments as of December 31, 2004,
as computed for federal income tax purposes, were as follows:
(in Thousands)
Aggregate cost $ 484,958
===============
Gross unrealized appreciation $ 34,007
Gross unrealized depreciation (329)
---------------
Net unrealized appreciation $ 33,678
===============
(a) AMBAC Insured.
(b) FGIC Insured.
(c) FSA Insured.
(d) MBIA Insured.
(e) Prerefunded.
(f) Security has a maturity of more than one year, but has variable rate and demand features
which qualify it as a short-term security. The rate disclosed is that currently in effect.
This rate changes periodically based upon prevailing market rates.
(g) Radian Insured.
(h) FNMA Collateralized.
(i) GNMA Collateralized.
(j) XL Capital Insured.
(k) Investments in companies considered to be an affiliate of the Fund (such companies are
defined as "Affiliated Companies" in Section 2(a)(3) of the Investment Company Act of 1940)
were as follows:
(in Thousands)
Dividend
Affiliate Net Activity Income
Merrill Lynch Institutional Tax-Exempt Fund (10,600) $ 25
(l) FHA Insured.
Forward interest rate swaps outstanding as of December 31, 2004
were as follows:
(in Thousands)
Notional Unrealized
Affiliate Amount Depreciation
Receive a variable rate equal to a 7-day Bond
Market Association Municipal Swap Index
Rate and pay a fixed rate of 4.099%
Broker, JPMorgan Chase Bank
Expires January 2025 $ 25,000 $ (153)
Receive a variable rate equal to a 7-day Bond
Market Association Municipal Swap Index
Rate and pay a fixed rate of 3.68%
Broker, Morgan Stanley Capital Services Inc.
Expires March 2015 $ 25,000 (127)
----------
Total $ (280)
==========
Item 2 - Controls and Procedures
2(a) - The registrant's certifying officers have reasonably designed
such disclosure controls and procedures to ensure material
information relating to the registrant is made known to us by others
particularly during the period in which this report is being
prepared. The registrant's certifying officers have determined that
the registrant's disclosure controls and procedures are effective
based on our evaluation of these controls and procedures as of a
date within 90 days prior to the filing date of this report.
2(b) - There were no changes in the registrant's internal control
over financial reporting (as defined in Rule 30a-3(d) under the Act
(17 CFR 270.30a-3(d)) that occurred during the last fiscal quarter
of the period covered by this report that has materially affected,
or is 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.
MuniHoldings Insured Fund II, Inc.
By: /s/ Robert C. Doll, Jr.
Robert C. Doll, Jr.,
President
MuniHoldings Insured Fund II, Inc.
Date: February 24, 2005
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/ Robert C. Doll, Jr.
Robert C. Doll, Jr.
President
MuniHoldings Insured Fund II, Inc.
Date: February 24, 2005
By: /s/ Donald C. Burke
Donald C. Burke
Chief Financial Officer
MuniHoldings Insured Fund II, Inc.
Date: February 24, 2005