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 811-6718
Name of Fund: MuniYield Quality Fund II, Inc.
Fund Address: P.O. Box 9011
Princeton, NJ 08543-9011
Name and address of agent for service: Terry K. Glenn, President, MuniYield
Quality 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: 10/31/04
Date of reporting period: 05/01/04 - 07/31/04
Item 1 - Schedule of Investments
MuniYield Quality Fund II, Inc.
Schedule of Investments as of July 31, 2004 (in Thousands)
S&P Moody's Face
State Ratings Ratings Amount Municipal Bonds Value
==================================================================================================================================
Alabama - 1.0% AAA Aaa $ 2,645 Birmingham, Alabama, Capital Improvement Warrants, GO, Series A, $ 2,872
5.55% due 8/01/2021(i)
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Alaska - 0.5% AAA Aaa 1,400 Alaska State International Airports Revenue Bonds, Series B, 1,561
5.75% due 10/01/2019(a)
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Arizona - 1.0% AAA Aaa 2,700 Northern Arizona University System Revenue Bonds, 5.50% 2,865
due 6/01/2034(c)
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California - 21.8% AAA Aaa 2,850 Alameda Corridor Transportation Authority, California, Revenue 1,868
Refunding Bonds, Subordinated Lien, Series A, 5.525%**
due 10/01/2025(a)
------------------------------------------------------------------------------------------------------------
AAA Aaa 2,500 California Health Facilities Financing Authority Revenue Bonds 2,884
(Kaiser Permanente), RIB, Series 26, 9.62% due 6/01/2022(f)(l)
------------------------------------------------------------------------------------------------------------
AAA Aaa 2,490 California State Department of Water Resources, Power Supply 2,646
Revenue Bonds, Series A, 5.375% due 5/01/2022(i)
------------------------------------------------------------------------------------------------------------
California State, GO, Refunding:
BBB A3 2,800 5.25% due 9/01/2026 2,825
AAA Aaa 5,300 5.25% due 2/01/2030(i) 5,409
AAA Aaa 1,780 5.25% due 2/01/2030(m) 1,816
------------------------------------------------------------------------------------------------------------
AAA NR* 1,950 California State, GO, Refunding, ROCS, Series II-R-272, 9.328% 1,998
due 2/01/2033(k)(l)
------------------------------------------------------------------------------------------------------------
California State, Various Purpose, GO:
BBB A3 2,750 5.25% due 11/01/2029 2,764
BBB A3 6,500 5.50% due 11/01/2033 6,728
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Portfolio Abbreviations
To simplify the listings of MuniYield Quality 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)
DRIVERS Derivative Inverse Tax-Exempt Receipts
GO General Obligation Bonds
HDA Housing Development Authority
IDA Industrial Development Authority
IDB Industrial Development Board
PCR Pollution Control Revenue Bonds
RIB Residual Interest Bonds
ROCS Reset Option Certificates
S/F Single-Family
1
MuniYield Quality Fund II, Inc.
Schedule of Investments as of July 31, 2004 (continued) (in Thousands)
S&P Moody's Face
State Ratings Ratings Amount Municipal Bonds Value
==================================================================================================================================
California AAA Aaa $ 2,770 Fairfield-Suisun, California, Unified School District, GO $ 2,941
(concluded) (Election of 2002), 5.50% due 8/01/2028(i)
------------------------------------------------------------------------------------------------------------
Golden State Tobacco Securitization Corporation of California,
Tobacco Settlement Revenue Bonds:
NR* Baa3 1,000 Series A-2, 7.90% due 6/01/2042 1,021
BBB Baa3 4,000 Series A-3, 7.875% due 6/01/2042 4,080
BBB- Baa1 2,750 Series B, 5.60% due 6/01/2028 2,763
AAA Aaa 2,050 Series B, 5.50% due 6/01/2033(m) 2,139
AAA Aaa 1,300 Series B, 5.625% due 6/01/2033(m) 1,368
AAA Aaa 7,075 Series B, 5.625% due 6/01/2038(b) 7,418
AAA Aaa 2,300 Series B, 5.50% due 6/01/2043(m) 2,375
------------------------------------------------------------------------------------------------------------
AAA Aaa 2,815 John Swett Unified School District, California, GO, Series A, 5.50% 2,970
due 8/01/2026(f)
------------------------------------------------------------------------------------------------------------
AA Aa3 3,650 Sacramento County, California, Sanitation District, Financing 4,085
Authority Revenue Refunding Bonds, Trust Receipts, Class R,
Series A, 10.57% due 12/01/2019(l)
------------------------------------------------------------------------------------------------------------
San Diego, California, Unified School District, Election 1998,
GO, Series D(c):
AAA Aaa 2,465 5.25% due 7/01/2022 2,609
AAA Aaa 1,805 5.25% due 7/01/2024 1,892
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Colorado - 11.6% AAA NR* 11,020 Colorado Department of Transportation Revenue Bonds, DRIVERS, 14,359
Series 249, 10.626% due 6/15/2014(a)(l)
------------------------------------------------------------------------------------------------------------
Colorado Health Facilities Authority Revenue Bonds, Series A:
AA Aa2 1,150 (Catholic Health Initiatives), 5.50% due 3/01/2032 1,175
AA NR* 1,200 (Covenant Retirement Communities Inc.), 5.50% due 12/01/2027(k) 1,234
AA NR* 675 (Covenant Retirement Communities Inc.), 5.50% due 12/01/2033(k) 691
------------------------------------------------------------------------------------------------------------
Colorado Housing and Finance Authority, Revenue Refunding Bonds,
AMT(i):
AAA Aaa 725 (S/F Program), Series A-2, 6.45% due 4/01/2030 742
AAA Aaa 1,995 (S/F Program), Series B-2, 6.80% due 2/01/2031 2,121
AAA Aaa 205 (S/F Program), Series C-1, 7.65% due 12/01/2025(d) 207
AAA Aaa 725 Series E-2, 7% due 2/01/2030 728
------------------------------------------------------------------------------------------------------------
AAA Aaa 15,300 Northwest Parkway, Colorado, Public Highway Authority, Capital 11,212
Appreciation Revenue Bonds, Senior Convertible, Series C,
5.387%** due 6/15/2025(f)
------------------------------------------------------------------------------------------------------------
AAA Aaa 1,735 Northwest Parkway, Colorado, Public Highway Authority Revenue 1,876
Bonds, Series A, 5.50% due 6/15/2021(a)
----------------------------------------------------------------------------------------------------------------------------------
Connecticut - 4.1% NR* NR* 1,100 Connecticut State Regional Learning Educational Service Center 1,210
Revenue Bonds (Office/Education Center Facility), 7.75%
due 2/01/2006(j)
------------------------------------------------------------------------------------------------------------
AAA NR* 9,325 Connecticut State Resource Recovery Authority, Revenue Refunding 10,983
Bonds, DRIVERS, Series 187, 9.655% due 11/15/2011(i)(l)
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2
MuniYield Quality Fund II, Inc.
Schedule of Investments as of July 31, 2004 (continued) (in Thousands)
S&P Moody's Face
State Ratings Ratings Amount Municipal Bonds Value
==================================================================================================================================
Florida - 0.2% AAA Aaa $ 550 South Miami, Florida, Health Facilities Authority, Hospital $ 560
Revenue Bonds (Baptist Health System Obligation Group), 5.25%
due 11/15/2033(a)
----------------------------------------------------------------------------------------------------------------------------------
Georgia - 2.3% AAA Aaa 6,000 Atlanta, Georgia, Airport Revenue Refunding Bonds, Series A, 6,728
5.875% due 1/01/2017(c)
----------------------------------------------------------------------------------------------------------------------------------
Illinois - 18.6% AAA Aaa 3,250 Chicago, Illinois, Board of Education, GO (Chicago School Reform 3,298
Project), Series A, 5.25% due 12/01/2030(a)
------------------------------------------------------------------------------------------------------------
AAA Aaa 3,500 Chicago, Illinois, Gas Supply Revenue Refunding Bonds (People's 3,677
Gas Light & Coke), Series A, 6.10% due 6/01/2025(a)
------------------------------------------------------------------------------------------------------------
AAA Aaa 6,000 Chicago, Illinois, O'Hare International Airport, General Airport 6,267
Revenue Refunding Bonds, Third Lien, AMT, Series A, 5.50%
due 1/01/2022(i)
------------------------------------------------------------------------------------------------------------
Chicago, Illinois, O'Hare International Airport Revenue Bonds,
3rd Lien, AMT, Series B-2:
AAA Aaa 5,200 5.75% due 1/01/2023(f) 5,571
AAA Aaa 2,200 6% due 1/01/2029(m) 2,365
------------------------------------------------------------------------------------------------------------
AAA Aaa 2,830 Chicago, Illinois, Park District, GO, Refunding, Series C, 5.50% 3,050
due 1/01/2021(c)
------------------------------------------------------------------------------------------------------------
AAA Aaa 3,000 Cook County, Illinois, Capital Improvement, GO, Series C, 5.50% 3,161
due 11/15/2026(a)
------------------------------------------------------------------------------------------------------------
AAA Aaa 10,000 Illinois Regional Transportation Authority Revenue Bonds, 6.50% 12,196
due 7/01/2026(i)
------------------------------------------------------------------------------------------------------------
AAA Aaa 15,100 Illinois Sports Facilities Authority Revenue Bonds, 5.368%** 11,293
due 6/15/2030(a)
------------------------------------------------------------------------------------------------------------
AAA NR* 3,625 Metropolitan Pier and Exposition Authority, Illinois, Dedicated 4,321
State Tax Revenue Refunding Bonds, DRIVERS, Series 269, 10.127%
due 6/15/2023(i)(l)
----------------------------------------------------------------------------------------------------------------------------------
Indiana - 2.8% AAA Aaa 2,675 Indiana Bond Bank Revenue Bonds, Guarantee State Revolver, 6.75% 2,800
due 2/01/2005(a)(j)
------------------------------------------------------------------------------------------------------------
AAA Aaa 3,750 Indiana Transportation Finance Authority, Highway Revenue Bonds, 3,860
Series A, 5.25% due 6/01/2028(c)
------------------------------------------------------------------------------------------------------------
AAA Aaa 1,500 Indianapolis, Indiana, Local Public Improvement Bond Bank Revenue 1,532
Bonds (Waterworks Project), Series A, 5.25% due 7/01/2033(i)
----------------------------------------------------------------------------------------------------------------------------------
Kansas - 2.2% AAA Aaa 1,915 Sedgwick and Shawnee Counties, Kansas, S/F Mortgage-Backed Revenue 2,020
Bonds, AMT, Series A-2, 7.60% due 12/01/2031(g)(i)
------------------------------------------------------------------------------------------------------------
AAA Aaa 2,665 Sedgwick and Shawnee Counties, Kansas, S/F Mortgage-Backed Revenue 2,826
Refunding Bonds, AMT, Series A-2, 6.45% due 12/01/2033(e)(i)
------------------------------------------------------------------------------------------------------------
AAA Aaa 1,750 Sedgwick and Shawnee Counties, Kansas, S/F Revenue Bonds 1,808
(Mortgage-Backed Securities Program), AMT, Series A-1, 6.875%
due 12/01/2026(g)(i)
----------------------------------------------------------------------------------------------------------------------------------
3
MuniYield Quality Fund II, Inc.
Schedule of Investments as of July 31, 2004 (continued) (in Thousands)
S&P Moody's Face
State Ratings Ratings Amount Municipal Bonds Value
==================================================================================================================================
Louisiana - 4.6% AAA Aaa $ 2,875 Jefferson Parish, Louisiana, Home Mortgage Authority, S/F Mortgage $ 3,039
Revenue Bonds, AMT, Series B-1, 6.65% due 12/01/2033(e)(i)
------------------------------------------------------------------------------------------------------------
AAA Aaa 3,900 Louisiana Local Government, Environmental Facilities, Community 4,475
Development Authority Revenue Bonds (Capital Projects and
Equipment Acquisition), Series A, 6.30% due 7/01/2030(a)
------------------------------------------------------------------------------------------------------------
AAA Aaa 4,650 New Orleans, Louisiana, Ernest N. Morial Exhibit Hall Authority, 4,782
Special Tax, Sub-Series A, 5.25% due 7/15/2028(a)
------------------------------------------------------------------------------------------------------------
AAA Aaa 1,300 Terrebonne Parish, Louisiana, Hospital Service District Number 1, 1,351
Hospital Revenue Bonds (Terrebonne General Medical Center Project),
5.50% due 4/01/2033(a)
----------------------------------------------------------------------------------------------------------------------------------
Massachusetts Massachusetts State Port Authority, Special Facilities Revenue
- 2.6% Bonds (Delta Air Lines Inc. Project), AMT, Series A(a):
AAA Aaa 2,900 5.50% due 1/01/2016 2,992
AAA Aaa 2,675 5.50% due 1/01/2019 2,711
------------------------------------------------------------------------------------------------------------
AAA Aaa 1,800 Massachusetts State Special Obligation Dedicated Tax Revenue 1,859
Bonds, 5.25% due 1/01/2028(c)
----------------------------------------------------------------------------------------------------------------------------------
Michigan - 3.9% AAA Aaa 1,300 Michigan Higher Education Student Loan Authority, Student Loan 1,337
Revenue Refunding Bonds, AMT, Series XVII-G, 5.20% due 9/01/2020(a)
------------------------------------------------------------------------------------------------------------
AA+ Aaa 2,685 Michigan State HDA Revenue Refunding Bonds, Series C, 5.90% 2,803
due 12/01/2015(d)(f)
------------------------------------------------------------------------------------------------------------
Michigan State Strategic Fund, Limited Obligation Revenue
Refunding Bonds (Detroit Edison Company Project)(m):
AAA Aaa 2,250 5.45% due 9/01/2029 2,343
AAA Aaa 1,000 AMT, Series A, 5.50% due 6/01/2030 1,027
AAA Aaa 3,900 AMT, Series C, 5.45% due 12/15/2032 3,969
----------------------------------------------------------------------------------------------------------------------------------
Missouri - 2.1% Saint Louis County, Missouri, Pattonville R-3 School District, GO
(Missouri Direct Deposit Program)(c):
AAA Aaa 2,000 5.75% due 3/01/2015 2,236
AAA Aaa 2,000 5.75% due 3/01/2016 2,236
AAA Aaa 1,500 6% due 3/01/2019 1,696
----------------------------------------------------------------------------------------------------------------------------------
Nevada - 2.2% AA NR* 2,800 Carson City, Nevada, Hospital Revenue Bonds (Carson-Tahoe Hospital 2,864
Project), Series A, 5.50% due 9/01/2033(k)
------------------------------------------------------------------------------------------------------------
Director of the State of Nevada, Department of Business and
Industry Revenue Bonds (Las Vegas Monorail Company Project),
First Tier(a):
AAA Aaa 250 5.625% due 1/01/2032 265
AAA Aaa 3,300 5.375% due 1/01/2040 3,371
----------------------------------------------------------------------------------------------------------------------------------
New Jersey - 4.7% AAA Aaa 5,000 Cape May County, New Jersey, Industrial Pollution Control 5,162
Financing Authority, Revenue Refunding Bonds (Atlantic City
Electric Company Project), Series B, 7% due 11/01/2029(i)
------------------------------------------------------------------------------------------------------------
4
MuniYield Quality Fund II, Inc.
Schedule of Investments as of July 31, 2004 (continued) (in Thousands)
S&P Moody's Face
State Ratings Ratings Amount Municipal Bonds Value
==================================================================================================================================
New Jersey NR* Aaa $ 5,000 Salem County, New Jersey, Industrial Pollution Control Financing $ 5,231
(concluded) Authority, Revenue Refunding Bonds (Public Service Electric & Gas),
RIB, Series 380, 11.14% due 6/01/2031(i)(l)
------------------------------------------------------------------------------------------------------------
BBB Baa3 3,800 Tobacco Settlement Financing Corporation of New Jersey Revenue 3,423
Bonds, 6.75% due 6/01/2039
----------------------------------------------------------------------------------------------------------------------------------
New Mexico - 2.4% AAA Aaa 6,295 New Mexico State Highway Commission, Tax Revenue Bonds, Senior 7,226
Sub-Lien, Series A, 6% due 6/15/2010(f)(j)
----------------------------------------------------------------------------------------------------------------------------------
New York - 11.2% AAA Aaa 500 Erie County, New York, IDA, School Facility Revenue Bonds (City 550
of Buffalo Project), 5.75% due 5/01/2023(f)
------------------------------------------------------------------------------------------------------------
AAA Aaa 9,280 Nassau Health Care Corporation, New York, Health System Revenue 10,216
Bonds, 5.75% due 8/01/2022(f)
------------------------------------------------------------------------------------------------------------
AA+ Aa2 2,500 New York City, New York, City Transitional Finance Authority, 2,647
Revenue Refunding Bonds, Future Tax Secured, Series C, 5.50%
due 11/01/2024
------------------------------------------------------------------------------------------------------------
New York City, New York, GO:
AAA Aaa 4,000 Series D, 5.875% due 6/01/2021(i) 4,492
AAA Aaa 1,000 Series E, 5.75% due 5/15/2018(m) 1,110
------------------------------------------------------------------------------------------------------------
AAA Aaa 5,000 New York State Dormitory Authority, Revenue Refunding Bonds 5,722
(State University Educational Facilities), 5.75%
due 5/15/2010(c)(j)
------------------------------------------------------------------------------------------------------------
AAA Aaa 1,000 New York State Mortgage Agency Revenue Bonds, AMT, 24th Series, 1,035
5.875% due 10/01/2015(i)
------------------------------------------------------------------------------------------------------------
AAA Aaa 7,115 Tobacco Settlement Financing Corporation of New York Revenue Bonds, 7,405
Series A-1, 5.25% due 6/01/2022(a)
----------------------------------------------------------------------------------------------------------------------------------
North Carolina - BBB Baa2 5,000 Martin County, North Carolina, Industrial Facilities and Pollution 5,122
1.7% Control Financing Authority Revenue Bonds (Solid Waste
Disposal-Weyerhaeuser Company), AMT, 6.80% due 5/01/2024
----------------------------------------------------------------------------------------------------------------------------------
Ohio - 2.4% Plain, Ohio, Local School District, GO, Refunding(c):
NR* Aaa 5,120 6% due 6/01/2011(j) 5,908
NR* Aaa 1,170 6% due 12/01/2020 1,327
----------------------------------------------------------------------------------------------------------------------------------
Pennsylvania - 6.4% AAA Aaa 600 Allegheny County, Pennsylvania, Sanitation Authority, Sewer 626
Revenue Bonds, 5.50% due 12/01/2030(i)
------------------------------------------------------------------------------------------------------------
NR* Aaa 3,335 Delaware River Port Authority of Pennsylvania and New Jersey 4,131
Revenue Bonds, RIB, Series 396,10.613% due 1/01/2019(f)(l)
------------------------------------------------------------------------------------------------------------
AAA Aaa 4,000 Pennsylvania State Public School Building Authority, School Lease 3,964
Revenue Bonds (The School District of Philadelphia Project), 5%
due 6/01/2033(f)
------------------------------------------------------------------------------------------------------------
5
MuniYield Quality Fund II, Inc.
Schedule of Investments as of July 31, 2004 (continued) (in Thousands)
S&P Moody's Face
State Ratings Ratings Amount Municipal Bonds Value
==================================================================================================================================
Pennsylvania AAA Aaa $ 3,230 Philadelphia, Pennsylvania, Authority for Industrial Development, $ 3,512
(concluded) Lease Revenue Bonds, Series B, 5.50% due 10/01/2020(f)
------------------------------------------------------------------------------------------------------------
AAA Aaa 4,500 Philadelphia, Pennsylvania, School District, GO, Series B, 5.625% 4,837
due 8/01/2022(c)
------------------------------------------------------------------------------------------------------------
AAA Aaa 1,600 Washington County, Pennsylvania, Capital Funding Authority Revenue 1,832
Bonds (Capital Projects and Equipment Program), 6.15%
due 12/01/2029(a)
----------------------------------------------------------------------------------------------------------------------------------
Rhode Island - 1.5% AAA Aaa 4,010 Rhode Island State Health and Educational Building Corporation, 4,357
Higher Education Facilities Revenue Bonds (University of Rhode
Island), Series A, 5.70% due 9/15/2024(i)
----------------------------------------------------------------------------------------------------------------------------------
South Carolina - AAA Aaa 1,900 Florence County, South Carolina, Hospital Revenue Refunding Bonds 1,928
2.4% (McLeod Regional Medical Center Project), Series A, 5.25%
due 11/01/2034(f)
------------------------------------------------------------------------------------------------------------
AAA NR* 2,250 South Carolina State Public Service Authority, Revenue Refunding 2,523
Bonds, DRIVERS, Series 277, 10.122% due 1/01/2022(i)(l)
------------------------------------------------------------------------------------------------------------
NR* A1 2,500 Spartanburg County, South Carolina, Solid Waste Disposal Facilities 2,623
Revenue Bonds (BMW Project), AMT, 7.55% due 11/01/2024
----------------------------------------------------------------------------------------------------------------------------------
Tennessee - 2.7% AAA Aaa 7,365 Chattanooga, Tennessee, IDB, Lease Rent Revenue Bonds (Southside 8,157
Redevelopment Corporation), 5.875% due 10/01/2024(a)
----------------------------------------------------------------------------------------------------------------------------------
Texas - 12.0% NR* Aa3 4,000 Austin, Texas, Convention Center Revenue Bonds (Convention 3,849
Enterprises Inc.), Trust Certificates, Second Tier, Series B,
5.75% due 1/01/2032
------------------------------------------------------------------------------------------------------------
AAA Aaa 2,730 Corpus Christi, Texas, Utility System Revenue Refunding Bonds, 3,080
Series A, 6% due 7/15/2016(f)
------------------------------------------------------------------------------------------------------------
AAA NR* 3,250 Dallas-Fort Worth, Texas, International Airport Revenue Bonds, 3,709
DRIVERS, AMT, Series 202, 10.596% due 11/01/2028(c)(l)
------------------------------------------------------------------------------------------------------------
Dickinson, Texas, Independent School District, GO, Refunding(i):
AAA Aaa 1,180 6% due 2/15/2017 1,322
AAA Aaa 1,250 6% due 2/15/2018 1,400
------------------------------------------------------------------------------------------------------------
AA Baa2 4,000 Gregg County, Texas, Health Facilities Development Corporation, 4,629
Hospital Revenue Bonds (Good Shepherd Medical Center Project),
6.875% due 10/01/2020(k)
------------------------------------------------------------------------------------------------------------
AAA Aaa 1,900 Houston, Texas, Airport System Revenue Refunding Bonds, Sub-Lien, 1,981
Series B, 5.50% due 7/01/2030(f)
------------------------------------------------------------------------------------------------------------
A- A3 3,500 Lower Colorado River Authority, Texas, PCR (Samsung Austin 3,737
Semiconductor), AMT, 6.375% due 4/01/2027
------------------------------------------------------------------------------------------------------------
Texas State Turnpike Authority, Central Texas Turnpike System
Revenue Bonds, First Tier, Series A(a):
AAA Aaa 4,800 5.75% due 8/15/2038 5,131
AAA Aaa 3,600 5.50% due 8/15/2039 3,757
------------------------------------------------------------------------------------------------------------
6
MuniYield Quality Fund II, Inc.
Schedule of Investments as of July 31, 2004 (continued) (in Thousands)
S&P Moody's Face
State Ratings Ratings Amount Municipal Bonds Value
==================================================================================================================================
Texas (concluded) AAA Aaa $ 1,000 University of Houston, Texas, University Revenue Bonds, 5.50% $ 1,042
due 2/15/2030(i)
------------------------------------------------------------------------------------------------------------
AAA NR* 1,900 White Settlement, Texas, Independent School District, GO, 2,040
5.75% due 8/15/2034
----------------------------------------------------------------------------------------------------------------------------------
Virginia - 2.5% AAA Aaa 2,100 Halifax County, Virginia, IDA, Exempt Facility Revenue Refunding 2,206
Bonds (Old Dominion Electric Cooperative Project), AMT, 5.625%
due 6/01/2028(a)
------------------------------------------------------------------------------------------------------------
BB Ba2 26,500 Pocahontas Parkway Association, Virginia, Toll Road Revenue Bonds, 5,663
Senior Series B, 5.875%** due 8/15/2024
----------------------------------------------------------------------------------------------------------------------------------
Washington - 10.4% AAA Aaa 2,150 King County, Washington, Sewer Revenue Refunding Bonds, Series 2,255
B, 5.50% due 1/01/2027(f)
------------------------------------------------------------------------------------------------------------
AAA A1 1,600 Port of Tacoma, Washington, Revenue Refunding Bonds, Series A, 1,634
5.25% due 12/01/2034(a)
------------------------------------------------------------------------------------------------------------
AAA Aaa 7,470 Port Seattle, Washington, Revenue Bonds, AMT, Series B, 6% 8,219
due 2/01/2016(i)
------------------------------------------------------------------------------------------------------------
AAA Aaa 6,150 Seattle, Washington, Municipal Light and Power Revenue Bonds, 6% 6,944
due 10/01/2019(i)
------------------------------------------------------------------------------------------------------------
NR* Aaa 4,500 Snohomish County, Washington, Arlington School District Number 5,316
016, GO, 6.50% due 12/01/2010(c)(j)
------------------------------------------------------------------------------------------------------------
AAA Aaa 6,250 Washington State, Various Purpose, GO, Series C, 5.25% 6,396
due 1/01/2026(f)
----------------------------------------------------------------------------------------------------------------------------------
Wisconsin - 2.6% AAA Aaa 2,000 Wisconsin State, GO, Series C, 5.55% due 5/01/2021(i) 2,180
------------------------------------------------------------------------------------------------------------
AAA Aaa 5,000 Wisconsin State Transportation Revenue Bonds, Series A, 5.50% 5,486
due 7/01/2015(c)
----------------------------------------------------------------------------------------------------------------------------------
Puerto Rico - 3.9% AAA Aaa 5,000 Puerto Rico Commonwealth, Highway and Transportation Authority, 5,255
Transportation Revenue Bonds, Series B, 6% due 7/01/2005(i)(j)
------------------------------------------------------------------------------------------------------------
NR* Aaa 3,250 Puerto Rico Electric Power Authority, Power Revenue Refunding Bonds, 3,573
RIB, Series 449X, 9.69% due 7/01/2016(a)(l)
------------------------------------------------------------------------------------------------------------
AAA Aaa 2,500 Puerto Rico Municipal Finance Agency, GO, Series A, 5.50% 2,694
due 8/01/2023(f)
----------------------------------------------------------------------------------------------------------------------------------
Total Municipal Bonds (Cost - $424,106) - 148.3% 439,688
----------------------------------------------------------------------------------------------------------------------------------
7
MuniYield Quality Fund II, Inc.
Schedule of Investments as of July 31, 2004 (continued) (in Thousands)
Shares
Held Short-Term Securities Value
----------------------------------------------------------------------------------------------------------------------------------
2,666 Merrill Lynch Institutional Tax-Exempt Fund(h) $ 2,666
----------------------------------------------------------------------------------------------------------------------------------
Total Short-Term Securities (Cost - $2,666) - 0.9% 2,666
----------------------------------------------------------------------------------------------------------------------------------
Total Investments (Cost - $426,772***)- 149.2% 442,354
Other Assets Less Liabilities - 1.4% 4,097
Preferred Stock, at Redemption Value - (50.6%) (150,007)
---------
Net Assets Applicable to Common Stock - 100.0% $ 296,444
=========
(a) AMBAC Insured.
(b) CIFG Insured.
(c) FGIC Insured.
(d) FHA Insured.
(e) FNMA/GNMA Collateralized.
(f) FSA Insured.
(g) GNMA Collateralized.
(h) 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)
==========================================================================
Net Dividend
Affiliate Activity Income
==========================================================================
Merrill Lynch Institutional Tax-Exempt Fund (6,700) $40
--------------------------------------------------------------------------
(i) MBIA Insured.
(j) Prerefunded.
(k) Radian Insured.
(l) The interest rate is subject to change periodically and inversely based
upon prevailing market rates. The interest rate shown is the rate in
effect at July 31, 2004.
(m) XL Capital Insured.
* Not Rated.
** Represents a zero coupon bond; the interest rate shown reflects the
effective yield at the time of purchase by the Fund.
*** The cost and unrealized appreciation/depreciation of investments as of
July 31, 2004, as computed for federal income tax purposes, were as
follows:
(in Thousands)
-------------------------------------------------------------------------
Aggregate cost $ 426,772
=========
Gross unrealized appreciation $ 19,539
Gross unrealized depreciation (3,957)
---------
Net unrealized appreciation $ 15,582
=========
8
MuniYield Quality Fund II, Inc.
Schedule of Investments as of July 31, 2004 (concluded)
Forward interest rate swaps outstanding as of July 31, 2004 were as follows:
(in Thousands)
--------------------------------------------------------------------------------
Notional Unrealized
Amount Depreciation
--------------------------------------------------------------------------------
Receive a variable rate equal to 7-Day Bond
Market Association Municipal Swap Index Rate
and pay a fixed rate equal to 4.051%
Broker, J.P. Morgan Chase Bank
Expires September 2014 $ 15,000 $ (346)
Receive a variable rate equal to 7-Day Bond
Market Association Municipal Swap Index Rate
and pay a fixed rate equal to 4.595%
Broker, J.P. Morgan Chase Bank
Expires September 2024 $ 26,000 (1,051)
Receive a variable rate equal to 7-Day Bond
Market Association Municipal Swap Index Rate
and pay a fixed rate equal to 4.5425%
Broker, Morgan Stanley Capital Services, Inc.
Expires September 2024 $ 19,000 (555)
--------------------------------------------------------------------------------
Total $ (1,952)
========
9
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.
MuniYield Quality Fund II, Inc.
By: /s/ Terry K. Glenn
----------------------
Terry K. Glenn,
President of
MuniYield Quality Fund II, Inc.
Date: September 17, 2004
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/ Terry K. Glenn
----------------------
Terry K. Glenn,
President of
MuniYield Quality Fund II, Inc.
Date: September 17, 2004
By: /s/ Donald C. Burke
----------------------
Donald C. Burke,
Chief Financial Officer of
MuniYield Quality Fund II, Inc.
Date: September 17, 2004