| UNITED STATES | OMB APPROVAL | ||
| SECURITIES AND EXCHANGE COMMISSION | OMB Number: 3235-0578 | ||
| Washington, DC 20549 | Expires: May 31, 2007 | ||
| Estimated average burden | |||
| hours per response: 21.09 | |||
MANAGEMENT INVESTMENT COMPANY |
Investment Company Act File Number: 811-21076
Registrant Name: PIMCO Municipal Income Fund II
Address of Principal Executive Offices: 1345 Avenue of the Americas New York, New York 10105
Name and Address of Agent for Service: Lawrence G. Altadonna – 1345 Avenue of the Americas New York, New York 10105
Registrant’s telephone number, including area code: 212-739-3371
Date of Fiscal Year End: May 31, 2007
Date of Reporting Period: February 28, 2007
Form N-Q is to be used by the registered management investment company, other than a small business investment company registered on Form N-5 (§§ 239.24 and 274.5 of this chapter), to file reports with the Commission, not later than 60 days after the close of the first and third fiscal quarters, pursuant to rule 30b 1-5 under the Investment Company Act of 1940 (17 CFR 270.30b1 -5). The Commission may use the information provided on Form N-Q in its regulatory, disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-Q, and the Commission will make this information public. A registrant is not required to the collection of information contained in Form N-Q unless the Form displays a currently valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to the Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.
Item 1. Schedule of Investments PIMCO Municipal Income Fund II Schedule of Investments February 28, 2007 (unaudited) Principal Amount Credit Rating (000) (Moody's/S&P) Value* MUNICIPAL BONDS & NOTES—95.0% Alabama—4.0% $10,000 Birmingham Baptist Medical Centers Special Care Facs. Financing Auth. Rev., 5.00%, 11/15/30, Ser. A Baa1/NR $10,341,300 Birmingham Waterworks & Sewer Board Rev., Ser. B, (Pre-refunded @ $100, 1/1/13) (MBIA)(a), 1,145 5.00%, 1/1/27 Aaa/AAA 1,203,888 10,000 5.00%, 1/1/37 Aaa/AAA 10,435,100 18,000 5.25%, 1/1/33 (f) NR/NR 19,292,580 1,750 Huntsville Health Care Auth. Rev., 5.75%, 6/1/32, Ser. B A2/NR 1,896,335 16,580 Jefferson Cnty. Sewer Rev., 4.75%, 2/1/38, Ser. B, (Pre-refunded @ $100, 8/1/12) (FGIC)(a) Aaa/AAA 17,475,154 60,644,357 Alaska—0.2% 3,550 State Housing Finance Corp. Rev., 5.25%, 6/1/32, Ser. C (MBIA) Aaa/AAA 3,640,490 Arizona—2.4% 1,300 Health Facs. Auth. Rev, John Lincoln Health Network, 5.75%, 12/1/32 NR/BBB 1,389,999 33,000 Salt River Project Agricultural Improvement & Power Dist. Rev., 5.00%, 1/1/37, Ser. A (f) Aa1/AA 35,354,880 36,744,879 Arkansas—0.1% 13,000 Arkansas Dev. Finance Auth. Rev., zero coupon, 7/1/46 (AMBAC) Aaa/NR 2,207,790 California—2.1% 9,610 Alameda Corridor Transportation Auth. Rev., zero coupon, 10/1/16, Ser. A (AMBAC) Aaa/AAA 6,565,456 Golden State Tobacco Securitization Corp., Tobacco Settlement Rev., Ser. 2003-A-1, 3,300 6.25%, 6/1/33 Baa3/BBB 3,709,431 9,000 6.75%, 6/1/39 Baa3/BBB 10,353,870 1,000 Rancho Cucamonga Community Facs. Dist., Special Tax, 6.30%, 9/1/23, Ser. A NR/NR 1,063,010 4,000 Southern California Public Power Auth., Transmission Project Rev., zero coupon, 7/1/13 Aa3/A+ 3,129,480 Univ. Rev., 4,430 4.75%, 5/15/37, Ser. C (MBIA) Aaa/AAA 4,571,361 2,900 4.75%, 5/15/38, Ser. B Aa3/AA- 2,972,616 32,365,224 Colorado—5.3% 30,000 Dawson Ridge Dist. No. 1, GO, zero coupon, 10/1/22, Ser. A Aaa/NR 15,561,300 5,000 Denver City & Cnty., CP, 5.50%, 12/1/25, Ser. B, (Pre-refunded @ $101, 12/1/10) (AMBAC)(a) Aaa/AAA 5,365,750 E-470 Public Highway Auth. Rev., Ser. B (MBIA), 20,000 zero coupon, 9/1/35 Aaa/AAA 5,217,600 15,000 zero coupon, 9/1/37 Aaa/AAA 3,523,800 Health Facs. Auth. Rev., 25,000 Catholic Health Initiatives, 5.50%, 3/1/32 Aa2/AA 26,914,750 18,305 Exempla, Inc., 5.625%, 1/1/33, Ser. A A1/A- 19,408,791 6,500 Retirement Facs. Rev., Liberty Height, zero coupon, 7/15/22 Aaa/AAA 3,411,980 79,403,971 District of Columbia—1.2% 17,500 Washington D.C. Convention Center Auth. Tax Rev., 4.75%, 10/1/28, (Pre-refunded @ $100, 10/1/08) (AMBAC)(a) Aaa/AAA 17,809,925
PIMCO Municipal Income Fund II Schedule of Investments February 28, 2007 (unaudited) Principal Amount Credit Rating (000) (Moody's/S&P) Value* Florida—3.9% $6,520 Brevard Cnty. Health Facs. Auth. Rev., 5.00%, 4/1/34 A2/A $6,804,859 Highlands Cnty. Health Facs. Auth. Rev., 2,830 Adventist, 5.00%, 11/15/31, Ser. C A2/A+ 2,947,247 8,000 Adventist/Sunbelt, 6.00%, 11/15/31, Ser. A, (Pre-refunded @ $101, 11/15/11) (a) A2/NR 8,871,360 Hillsborough Cnty. Industrial Dev. Auth. Rev., 635 Health Fac. Project, 5.625%, 8/15/23 Baa2/BBB 662,134 2,335 Tampa Electric Co. Project, 5.50%, 10/1/23 Baa2/BBB- 2,470,080 7,135 Jacksonville Health Facs. Auth. Rev., 5.25%, 11/15/32, Ser. A Aa2/AA 7,585,432 11,500 Lakeland Hospital System Rev., Regional Health System, 5.50%, 11/15/32, (Pre-refunded @ $101, 11/15/12) (a) A2/NR 12,671,620 3,000 Leesburg Hospital Rev., Leesburg Regional Medical Center Project, 5.50%, 7/1/32 Baa1/BBB+ 3,144,720 Orange Cnty. Health Facs. Auth. Rev., Adventist Health System (a), 2,550 5.625%, 11/15/32, (Pre-refunded @ $101, 11/15/12) A2/A+ 2,819,127 5,000 6.25%, 11/15/24, (Pre-refunded @ $100, 11/15/12) A2/A+ 5,646,200 5,000 Sumter Landing Community Dev. Dist. Rev., 4.75%, 10/1/35, Ser. A (MBIA)(f) NR/AAA 5,167,000 1,500 Winter Springs Water & Sewer Rev., zero coupon, 10/1/29 (FGIC) Aaa/AAA 565,350 59,355,129 Georgia—0.7% 4,000 Atlanta Water & Wastewater Rev., 5.00%, 11/1/39, Ser. A (MBIA) Aaa/AAA 4,175,000 1,500 Grantor Trust Gov't, CP, 4.75%, 6/1/28, Ser. A (MBIA) Aaa/AAA 1,628,355 9,600 Richmond Cnty. Dev. Auth. Rev., zero coupon, 12/1/21 Aaa/NR 5,232,672 11,036,027 Hawaii—1.3% 19,170 Honolulu City & Cnty. Wastewater System Rev., First Board Resolution, 4.75%, 7/1/28 (FGIC) Aaa/NR 19,600,175 Illinois—20.0% Central Lake Cnty. Water Agcy. Rev., Ser. A (AMBAC), 3,610 5.125%, 5/1/28 Aaa/NR 3,828,549 8,150 5.125%, 5/1/32, (Pre-refunded @ $100, 11/1/12) (a) Aaa/NR 8,763,206 5,050 Chicago, GO, 5.125%, 1/1/29, Ser. A (FGIC) Aaa/AAA 5,197,359 Chicago, Lake Shore East, Special Assessment, 3,162 6.625%, 12/1/22 NR/NR 3,434,817 6,700 6.75%, 12/1/32 NR/NR 7,291,275 Chicago Board of Education School Reform, GO (FGIC), 15,535 zero coupon, 12/1/16, Ser. A Aaa/AAA 10,543,139 5,000 zero coupon, 12/1/28, Ser. A Aaa/AAA 1,949,450 4,500 zero coupon, 12/1/31 Aaa/AAA 1,529,505 Chicago City Colleges, GO (FGIC), 32,670 zero coupon, 1/1/37 Aaa/AAA 8,741,512 29,145 zero coupon, 1/1/38 Aaa/AAA 7,438,678 32,670 zero coupon, 1/1/39 Aaa/AAA 7,977,034 7,000 Chicago Midway Airport Rev., 5.00%, 1/1/31, Ser. B (MBIA) Aaa/AAA 7,184,100 5,000 Cicero, GO, 5.25%, 12/1/31 (MBIA) Aaa/AAA 5,378,500 Dev. Finance Auth. Retirement Housing Rev., Regency Park, 10,000 zero coupon, 7/15/23 NR/AAA 4,985,400 134,650 zero coupon, 7/15/25 NR/AAA 61,101,477 Health Facs. Auth. Rev, 5,000 Condell Medical Center, 5.50%, 5/15/32 Baa2/NR 5,240,750 20,100 Elmhurst Memorial Healthcare, 5.625%, 1/1/28 A2/NR 21,532,326 Metropolitan Pier & Exposition Auth. Rev. (MBIA), 60,000 zero coupon, 12/15/30 Aaa/AAA 22,022,400 50,000 zero coupon, 12/15/33 Aaa/AAA 16,045,000 2,460 zero coupon, 6/15/38 Aaa/AAA 644,225
PIMCO Municipal Income Fund II Schedule of Investments February 28, 2007 (unaudited) Principal Amount Credit Rating (000) (Moody's/S&P) Value* Illinois—(continued) $4,500 Schaumburg, GO, 5.00%, 12/1/41, Ser. B (FGIC) Aaa/AAA $4,729,410 10,000 Springfield Rev., 5.00%, 3/1/35 (MBIA) Aaa/AAA 10,663,200 10,000 State, GO, 5.00%, 3/1/34, Ser. A Aa3/AA 10,535,900 68,470 State Sports Facs. Auth. Rev., zero coupon, 6/15/30 (AMBAC) Aaa/AAA 64,776,728 301,533,940 Indiana—0.5% Brownsburg 1999 School Building Corp. Rev., Ser. A, (Pre-refunded @ $100, 9/15/13) (FSA)(a), 1,000 5.00%, 9/15/25 Aaa/AAA 1,077,770 2,000 5.25%, 3/15/25 Aaa/AAA 2,184,360 4,125 Fort Wayne Pollution Control Rev., 6.20%, 10/15/25 Caa1/B- 4,259,557 500 State Bank Rev., Hendricks, 5.25%, 4/1/30, Ser. D (AMBAC) Aaa/AAA 530,540 8,052,227 Iowa—3.9% 2,300 Higher Education Loan Auth. Rev., Grandview College, 5.10%, 10/1/36 NR/NR 2,366,815 Tobacco Settlement Auth. of Iowa Rev., Ser. B, 46,000 zero coupon, 6/1/34 Baa3/BBB 46,721,280 8,850 5.60%, 6/1/35, (Pre-refunded @ $101, 6/1/11) (a) NR/AAA 9,561,186 58,649,281 Kansas—0.2% 2,800 Univ. of Kansas Hospital Auth. Health Facs. Rev., 5.625%, 9/1/32, (Pre-refunded @ $100, 9/1/12) (a) NR/AAA 3,071,348 Kentucky—0.3% Economic Dev. Finance Auth., Hospital Facs. Rev., 2,500 Catholic Healthcare Partners, 5.25%, 10/1/30 Aa3/AA- 2,632,950 1,945 St. Luke's Hospital, 6.00%, 10/1/19, Ser. B A3/A 2,170,250 4,803,200 Louisiana—4.6% 20,400 Public Facs. Auth. Rev., Ochsner Clinic Foundation, 5.50%, 5/15/32, Ser. B A3/NR 21,622,572 Tobacco Settlement Financing Corp. Rev., Ser. 2001-B, 36,395 5.875%, 5/15/39 Baa3/BBB 39,107,519 8,000 5.875%, 5/15/39 (f) Baa3/BBB 8,596,240 69,326,331 Maryland—0.1% 1,000 State Health & Higher Educational Facs. Auth. Rev., Adventist Healthcare, 5.75%, 1/1/25, Ser. A Baa2/NR 1,073,170 Massachusetts—3.7% 1,300 Bay Transportation Auth. Rev., General Transportation System, 4.75%, 3/1/21, Ser. A (MBIA) Aaa/AAA 1,326,182 14,500 Bay Transportation Auth., Special Assessment, 4.75%, 7/1/34, Ser. A (f) NR/NR 14,992,710 State College Building Auth. Project Rev., Ser. B (XLCA), 5,560 5.50%, 5/1/28 Aaa/AAA 6,742,667 7,645 5.50%, 5/1/33 Aaa/AAA 9,408,396 5,000 5.50%, 5/1/39 Aaa/AAA 6,244,050 4,295 State Turnpike Auth. Rev., 4.75%, 1/1/34, Ser. A (AMBAC) Aaa/AAA 4,350,148 12,050 State Water Res. Auth. Rev., 4.75%, 8/1/37, Ser. A (FSA) Aaa/AAA 12,126,036 55,190,189
PIMCO Municipal Income Fund II Schedule of Investments February 28, 2007 (unaudited) Principal Amount Credit Rating (000) (Moody's/S&P) Value* Michigan—2.4% Detroit City School Dist., GO, Ser. A (a), $8,500 5.00%, 5/1/32, (Pre-refunded @ $100, 5/1/13) (FGIC) Aaa/AAA $9,127,130 1,750 5.125%, 5/1/31, (Pre-refunded @ $100, 5/1/12) (FSA) Aaa/AAA 1,869,385 2,500 Detroit Water Supply System Rev., 5.00%, 7/1/30, Ser. A (FGIC) Aaa/AAA 2,603,225 State Hospital Finance Auth. Rev., 5,000 Ascension Health, 5.25%, 11/15/26, Ser. B Aa2/AA 5,305,200 Oakwood Group, Ser. A, 13,500 5.75%, 4/1/32 A2/A 14,461,470 1,925 6.00%, 4/1/22 A2/A 2,104,641 35,471,051 Minnesota—0.1% 280 Minneapolis, Grant Park Project, Tax Allocation, 5.35%, 2/1/30 NR/NR 284,390 500 Oronoco Rev., 5.40%, 6/1/41 NR/NR 508,320 792,710 Mississippi—0.3% 3,605 Business Finance Corp., Pollution Control Rev., 5.875%, 4/1/22 Ba1/BBB- 3,617,690 740 Dev. Bank Special Obligation, Projects & Equipment Acquisitions Rev., 5.00%, 7/1/24 (AMBAC) Aaa/AAA 770,532 4,388,222 Missouri—0.2% 905 Hanley Road & North of Folk Ave. Transportation Dist. Rev., 5.00%, 10/1/25 NR/NR 915,489 1,500 St. Louis Parking Facs. Rev., Downtown Parking Fac., 6.00%, 2/1/28, (Pre-refunded @ $100, 2/1/12) (AMBAC)(a) NR/NR 1,652,715 2,568,204 Nevada—1.7% Clark Cnty., GO (FGIC), 1,450 5.00%, 6/1/31 Aaa/AAA 1,503,070 1,950 5.00%, 6/1/31, (Pre-refunded @ $100, 6/1/11) (a) Aaa/AAA 2,053,974 Reno Transportation Project Rev., (Pre-refunded @ $100, 6/1/12) (AMBAC)(a), 3,960 5.125%, 6/1/27 Aaa/AAA 4,237,952 2,000 5.125%, 6/1/32 Aaa/AAA 2,140,380 3,500 5.125%, 6/1/37 Aaa/AAA 3,745,665 7,570 5.25%, 6/1/41 Aaa/AAA 8,146,153 3,290 Truckee Meadows Water Auth. Rev., 5.125%, 7/1/30, Ser. A, (Pre-refunded @ $100, 7/1/11) (FSA)(a) Aaa/AAA 3,484,933 25,312,127 New Hampshire—0.2% Health & Education Facs. Auth. Rev., Catholic Medical Center, 360 6.125%, 7/1/32 Baa1/BBB+ 395,968 2,640 6.125%, 7/1/32, (Pre-refunded @ $101, 7/1/12) (a) Baa1/BBB+ 2,966,911 3,362,879 New Jersey—2.5% Economic Dev. Auth., Kapkowski Landfill, 4,000 5.75%, 10/1/21 Baa3/NR 4,485,840 11,405 5.75%, 4/1/31 Baa3/NR 12,744,859 Economic Dev. Auth. Rev., Arbor Glen, 525 6.00%, 5/15/28 NR/NR 542,997 225 6.00%, 5/15/28, Ser. A, (Pre-refunded @ $102, 5/15/09) (a) NR/NR 240,098 250 Seashore Gardens, 5.375%, 11/1/36 NR/NR 256,172
PIMCO Municipal Income Fund II Schedule of Investments February 28, 2007 (unaudited) Principal Amount Credit Rating (000) (Moody's/S&P) Value* New Jersey—(continued) $3,500 State Educational Facs. Auth. Rev., 6.00%, 7/1/25, Ser. D NR/NR $3,834,180 Tobacco Settlement Financing Corp. Rev. (a), 1,285 6.00%, 6/1/37, (Pre-refunded @ $100, 6/1/12) Aaa/AAA 1,427,082 3,095 6.125%, 6/1/42, (Pre-refunded @ $100, 6/1/12) Aaa/AAA 3,455,506 6,150 6.25%, 6/1/43, (Pre-refunded @ $100, 6/1/13) Aaa/AAA 7,027,175 2,500 6.75%, 6/1/39, (Pre-refunded @ $100, 6/1/13) Aaa/AAA 2,925,700 36,939,609 New Mexico—0.3% 5,000 Farmington Pollution Control Rev., 5.80%, 4/1/22 Baa2/BBB 5,030,200 New York—3.8% 1,200 Erie Cnty. Industrial Dev. Agcy., Orchard Park Rev., 6.00%, 11/15/36 NR/NR 1,290,252 10,000 Liberty Dev. Corp. Rev., Goldman Sachs Headquarters, 5.25%, 10/1/35 (f) Aa3/AA- 11,755,900 Metropolitan Transportation Auth. Rev., 10,600 5.00%, 11/15/30, Ser. A (FSA) Aaa/AAA 11,173,036 10,000 5.25%, 11/15/32, Ser. B, (Pre-refunded @ $100, 11/15/13) (a) A2/AAA 10,973,300 New York City Municipal Water Finance Auth., Water & Sewer System Rev., 4,750 5.00%, 6/15/37, Ser. D (f) Aa2/AA+ 5,050,675 7,000 5.00%, 6/15/39, Ser. A Aa2/AA+ 7,388,010 6,700 State Dormitory Auth. Rev., Sloan-Kettering Center Memorial, 5.00%, 7/1/34, Ser. 1 Aa2/AA 7,047,730 2,000 State Environmental Facs. Corp. Rev., 5.00%, 6/15/28 Aaa/AAA 2,124,780 56,803,683 North Carolina—0.0% 550 North Carolina Medical Care Commission Rev., Salemtowne, 5.10%, 10/1/30 NR/NR 560,830 Ohio—0.5% 7,500 Lorain Cnty. Hospital Rev., Catholic Healthcare, 5.375%, 10/1/30 Aa3/AA- 7,960,275 Oklahoma—0.5% 6,500 Tulsa Cnty. Industrial Auth. Rev., Legacy Apartments, 4.90%, 11/20/46 (FHA-GNMA) Aaa/NR 6,781,190 Pennsylvania—2.4% Allegheny Cnty. Hospital Dev. Auth. Rev., Ser. B, 530 9.25%, 11/15/15 Ba3/B+ 629,847 1,000 9.25%, 11/15/22 Ba3/B+ 1,188,390 5,700 9.25%, 11/15/30 Ba3/B+ 6,773,823 4,500 Cumberland Cnty. Auth., Retirement Community Rev., Wesley Affiliated Services, 7.25%, 1/1/35, Ser. A, (Pre-refunded @ $101, 1/1/13) (a) NR/NR 5,360,670 1,250 Harrisburg Auth. Rev., 6.00%, 9/1/36 NR/NR 1,284,462 Montgomery Cnty. Higher Education & Health Auth. Hospital Rev., Abington Memorial Hospital, Ser. A, 5,000 5.125%, 6/1/27 NR/A 5,245,600 3,750 5.125%, 6/1/32 NR/A 3,921,638 3,000 Philadelphia, GO, 5.25%, 9/15/25, Ser. 2001 (FSA) Aaa/AAA 3,158,730 5,000 Philadelphia Auth. Industrial Dev. Lease Rev., 5.25%, 10/1/30, Ser. B (FSA) Aaa/AAA 5,289,600 500 Pittsburgh & Allegheny Cnty. Public Auditorium Auth. Rev., 5.00%, 2/1/29 (AMBAC) Aaa/AAA 514,630 Radnor Township School Dist., GO, Ser. B (FSA), 1,670 5.00%, 2/15/35 Aaa/NR 1,787,401 830 5.00%, 2/15/35, (Pre-refunded @ $100, 8/15/15) (a) Aaa/NR 908,883 36,063,674 Puerto Rico—0.3% 4,200 Electric Power Auth., Power Rev., 5.125%, 7/1/29, Ser. NN A3/BBB+ 4,461,408
PIMCO Municipal Income Fund II Schedule of Investments February 28, 2007 (unaudited) Principal Amount Credit Rating (000) (Moody's/S&P) Value* Rhode Island—4.4% $62,000 Tobacco Settlement Financing Corp. Rev., 6.25%, 6/1/42, Ser. A Baa3/BBB $66,709,520 South Carolina—5.3% 27,745 Greenville Cnty. School Dist. Rev., Building Equity Sooner Tomorrow, 5.50%, 12/1/28, (Pre-refunded @ $101, 12/1/12) (a) Aaa/AA- 30,589,695 18,120 Jobs Economic Dev. Auth. Rev., Bon Secours Health System, 5.625%, 11/15/30 A3/A- 19,320,088 Lexington Cnty., Health Services Dist. Hospital Rev., 15,000 5.50%, 11/1/32 A2/A 16,157,250 3,500 5.50%, 5/1/37 A2/A 3,778,495 5,000 5.75%, 11/1/28 A2/A 5,482,100 3,250 Tobacco Settlement Rev. Management Auth. Rev., 6.375%, 5/15/28, Ser. B Baa3/BBB 3,487,932 1,180 Transportation Infrastructure Rev., 5.00%, 10/1/29, Ser. A, (Pre-refunded @ $100, 10/1/11) (AMBAC)(a) Aaa/NR 1,247,508 80,063,068 Tennessee—0.3% 3,750 Knox Cnty. Health Educational & Housing Facs., Board Hospital Facs. Rev., Catholic Healthcare Partners, 5.25%, 10/1/30 Aa3/AA- 3,957,037 Texas—10.8% Arlington Independent School Dist., GO (PSF-GTD), 10 5.00%, 2/15/24 Aaa/NR 10,209 990 5.00%, 2/15/24, (Pre-refunded @ $100, 2/15/09) (a) Aaa/NR 1,015,780 4,480 Aubrey Independent School Dist., GO, 5.50%, 2/15/33 (PSF-GTD) Aaa/NR 4,957,478 6,500 Brazos Cnty. Health Facs. Dev. Corp., Franciscan Services Corp. Rev., 5.375%, 1/1/32 NR/A- 6,899,945 2,700 Comal Cnty. Health Facs. Dev., McKenna Memorial Hospital Project Rev., 6.25%, 2/1/32 Baa2/BBB- 2,945,430 5,000 Dallas Area Rapid Transit Rev., 5.00%, 12/1/31, (Pre-refunded @ $100, 12/1/11) (AMBAC)(a) Aaa/AAA 5,295,500 20,000 Frisco Independent School Dist., GO, zero coupon, 8/15/34 (PSF-GTD) Aaa/NR 5,896,800 Harris Cnty., 19,750 GO, 5.125%, 8/15/31, (Pre-refunded @ $100, 8/15/12) (a) Aa1/AA+ 21,166,075 5,250 Health Facs. Dev. Corp. Rev., St. Luke's Episcopal Hospital, 5.375%, 2/15/26, Ser. A, (Pre-refunded @ $100, 8/15/11) (a) NR/AAA 5,618,340 25,000 Senior Lien Toll Road Rev., 5.00%, 8/15/30 (FSA) Aaa/AAA 26,149,500 700 HFDC of Central Texas, Inc., Village at Gleannloch Farms Rev., 5.50%, 2/15/37 NR/NR 719,957 Keller Independent School Dist., GO (PSF-GTD), 770 4.875%, 8/15/31 Aaa/AAA 782,474 6,730 4.875%, 8/15/31, (Pre-refunded @ $100, 8/15/09) (a) Aaa/AAA 6,928,939 3,170 Little Elm Independent School Dist., GO, 5.30%, 8/15/29, Ser. A (PSF-GTD) NR/AAA 3,411,332 6,250 North Dallas Thruway Auth. Rev., 4.75%, 1/1/29 (FGIC) Aaa/AAA 6,320,312 5,000 Quinlan Independent School Dist., GO, 5.10%, 2/15/32 (PSF-GTD) Aaa/NR 5,226,150 2,000 Sabine River Auth. Rev., 5.20%, 5/1/28 Baa2/BB 2,019,300 State, GO, 10,025 4.75%, 4/1/35, Ser. A (f) Aa1/AA 10,295,174 17,500 4.75%, 4/1/36 Aa1/AA 18,019,575 State Turnpike Auth. Central Turnpike System Rev., Ser. A (AMBAC), 10,000 zero coupon, 8/15/19 Aaa/AAA 5,983,400 8,880 5.00%, 8/15/42 Aaa/AAA 9,244,258 State Water Financial Assistance, GO, 3,250 5.00%, 8/1/36 Aa1/AA 3,392,025 1,650 5.25%, 8/1/35 Aa1/AA 1,748,901 8,000 Wichita Falls Water & Sewer Rev., 5.00%, 8/1/27, (Pre-refunded @ $100, 8/1/11) (AMBAC)(a) Aaa/AAA 8,442,240 162,489,094
PIMCO Municipal Income Fund II Schedule of Investments February 28, 2007 (unaudited) Principal Amount Credit Rating (000) (Moody's/S&P) Value* Utah—3.0% $44,150 Utah Transit Auth. Rev., 4.75%, 6/15/35, Ser. B (FSA)(f) NR/NR $45,882,005 Virginia—0.5% Fredericksburg Industrial Dev. Auth., Medicorp Health System Rev., Ser. B, 2,500 5.125%, 6/15/33 A3/NR 2,589,125 4,000 5.25%, 6/15/27 A3/NR 4,179,360 6,768,485 Washington—0.3% 5,000 Tacoma Sewer Rev., 5.00%, 12/1/31, Ser. A (FGIC) Aaa/AAA 5,204,850 Wisconsin—0.7% Badger Tobacco Asset Securitization Corp., 1,125 6.00%, 6/1/17 Baa3/BBB 1,204,515 8,170 6.125%, 6/1/27 Baa3/BBB 8,751,377 State Health & Educational Facs. Auth. Rev., Froedert & Community Health Obligation, 90 5.375%, 10/1/30 NR/AA- 95,253 910 5.375%, 10/1/30, (Pre-refunded @ $101, 10/1/11) (a) NR/AA- 979,251 11,030,396 Total Municipal Bonds & Notes (cost—$1,288,741,013) 1,433,108,170 VARIABLE RATE NOTES (b)(c)(d)—4.6% Alabama—0.5% 4,450 Jefferson Cnty. Sewer Rev., 10.55%, 2/1/36, Ser. 352 (FGIC) Aaa/NR 5,320,064 1,400 Montgomery Special Care Facs., Financing Auth. Rev., 9.36%, 11/15/29, Ser. 435 (MBIA) Aaa/NR 1,584,450 6,904,514 Colorado—0.2% 2,250 Denver City & Cnty. Airport Rev., 9.36%, 11/15/25, Ser. 425 (FSA) Aaa/NR 2,572,538 Florida—0.4% 1,782 Orange Cnty. School Board, CP, 9.36%, 8/1/24, Ser. 328 (MBIA) Aaa/NR 2,148,468 3,241 State Governmental Utilities Auth. Rev., 9.36%, 10/1/29, Ser. 327 (AMBAC) Aaa/NR 3,855,818 6,004,286 Illinois—0.6% Chicago, GO, 1,780 9.99%, 1/1/28, Ser. 332 (MBIA) Aaa/NR 2,183,615 2,200 11.86%, 1/1/40, Ser. 426 (FGIC) Aaa/NR 2,828,980 1,288 Cook Cnty., GO, 9.36%, 11/15/28, Ser. 403 (FGIC) Aaa/NR 1,560,541 2,000 State, GO, 10.61%, 4/1/27, Ser. 783 (FSA) Aaa/NR 2,653,400 9,226,536 Massachusetts—1.5% 1,400 Boston Water & Sewer Community Rev., 9.40%, 11/1/28, Ser. 434 (FGIC) Aaa/NR 1,594,390 2,200 State, GO, 10.66%, 11/1/30, Ser. 785 (FGIC-TCRS) Aaa/NR 3,085,610 State Turnpike Auth. Rev., 3,000 9.40%, 1/1/37, Ser. 489 (MBIA) NR/AAA 3,298,950 5,668 9.40%, 1/1/39, Ser. 335 (AMBAC) Aaa/NR 6,419,974 7,366 9.41%, 1/1/37, Ser. 334 (MBIA) Aaa/NR 8,100,022 22,498,946 Nevada—0.2% 2,200 State, GO, 9.36%, 5/15/28, Ser. 344 (FGIC) Aaa/NR 2,346,454
PIMCO Municipal Income Fund II Schedule of Investments February 28, 2007 (unaudited) Principal Amount Credit Rating (000) (Moody's/S&P) Value* Ohio—0.1% $1,580 Hamilton Cnty. Sales Tax Rev., 9.36%, 12/1/27, Ser. 356 (MBIA) Aaa/NR $1,789,903 Pennsylvania—0.3% Philadelphia School Dist., GO (MBIA), 1,670 8.11%, 4/1/27, Ser. 345 Aaa/NR 1,793,079 2,677 8.11%, 4/1/27, Ser. 496 NR/AAA 2,874,295 4,667,374 Texas—0.7% 2,460 Denton Utility System Rev., 9.99%, 12/1/29, Ser. 428 (MBIA) Aaa/NR 2,710,182 1,100 Houston Airport System Rev., 9.36%, 7/1/25, Ser. 404 (FGIC) Aaa/NR 1,181,180 Houston Water & Sewer System Rev., 2,200 9.36%, 12/1/28, Ser. 427 (FSA) Aaa/NR 2,591,820 3,070 10.61%, 12/1/30, Ser. 495 (FGIC) NR/AAA 3,925,762 10,408,944 Washington—0.1% 1,820 Central Puget Sound Regional Transit Auth. Sales Tax & Motor Rev., 8.11%, 2/1/28, Ser. 360 (FGIC) Aaa/NR 2,012,920 Total Variable Rate Notes (cost—$56,796,735) 68,432,415 U.S. TREASURY BILLS (e)—0.4% 6,540 4.795%-5.14%, 3/15/07 (cost—$6,527,740) 6,527,740 Total Investments (cost—$1,352,065,488)—100.0% $1,508,068,325 Notes to Schedule of Investments: * Portfolio securities and other financial instruments for which market quotations are readily available are stated at market value. Portfolio securities and other financial instruments for which market quotations are not readily available or if a development/event occurs that may significantly impact the value of a security are fair-valued, in good faith, pursuant to guidelines established by the Board of Trustees. The Fund's investments are valued daily using prices supplied by an independent pricing service or dealer quotations, or are valued at the last sale price on the exchange that is the primary market for such securities, or the quoted mean price for those securities for which the over-the-counter market is the primary market or for
listed securities in which there were no sales.
Independent pricing services use information provided by market makers or estimates of market values obtained from yield data relating to investments or securities with similar characteristics. Exchange traded options and futures are valued at the settlement price determined by the relevant exchange. Short-term securities maturing in 60 days or less are valued at amortized cost, if their original term to maturity was 60 days or less, or by amortizing their value on the 61st day prior to maturity, if the original term to maturity exceeded 60 days. The prices used by the Fund to value securities may differ from the value that would be realized if the securities were sold. The Fund's net asset value is determined daily as of the close of regular trading (normally, 4:00 p.m. Eastern time) on the New York Stock Exchange ("NYSE") on each day the NYSE is open for business. (a) Pre-refunded bonds are collateralized by U.S. Government or other eligible securities which are held in escrow and used to pay principal and interest and retire the bonds at the earliest refunding date (payment date). (b) 144A Security - Security exempt from registration, under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, typically only to qualified institutional buyers. Unless otherwise indicated, these securities are not considered to be illiquid. (c)
Inverse Floaters - The interest rate shown bears an inverse relationship to the interest rate on another security or
the value of an index. (d)
Variable Rate Notes - instruments whose interest rates change on specified date (such as a coupon date or interest payment date) and/or whose interest rates vary with changes in a designated base rate (such as the prime interest rate). The interest rate disclosed reflects the rate in effect on February 28, 2007. (e) All or partial amount segregated as collateral for futures contracts. (f) Residual Interest Bonds held in trust - represent underlying bonds transferred to a separate securitization trust established in a tender option bond transaction in which the Fund acquired the residual interest certificates. These securities serve as collateral in a financing transaction. Glossary: AMBAC - insured by American Municipal Bond Assurance Corp. CP - Certificates of Participation FGIC - insured by Financial Guaranty Insurance Co. FHA - insured by Federal Housing Administration FSA - insured by Financial Security Assurance, Inc. GNMA - insured by Government National Mortgage Association GO - General Obligation Bond GTD - Guaranteed MBIA - insured by Municipal Bond Investors Assurance NR - Not Rated PSF - Public School Fund TCRS - Temporary Custodian Receipts XLCA - insured by XL Capital Assurance Other Investments: (1) Futures contracts outstanding at February 28, 2007: Market Unrealized Value Expiration Appreciation Type Contracts (000) Date (Depreciation) Long: Financial Future Euro—90 day, June 2007 23 $5,452 6/18/07 $(17,538) Financial Future Euro—90 day, September 2007 23 5,462 9/17/07 (7,763) Financial Future Euro—90 day, December 2007 23 5,471 12/17/07 863 Financial Future Euro—90 day, March 2008 23 5,477 3/17/08 7,188 U.S. Treasury Notes 5 yr. Futures, June 2007 3,789 401,456 6/29/07 2,612,594 Short: U.S. Treasury Bond Futures, March 2007 (4,933) (557,429) 3/21/07 2,834,967 U.S. Treasury Notes 10 yr. Futures, June 2007 (362) (39,311) 6/20/07 (203,625) $5,226,686
Item 2. Controls and Procedures
(a) The registrant's President and Chief Executive Officer and Principal Financial Officer have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-2(c) under the Investment Company Act of
1940, as amended are effective based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of this document.
Prior to reaching this conclusion, the principal officers had become aware of matters relating to the
Registrant's participation in certain inverse floater structures that required enhancements to certain
controls. The Registrant's management determined that controls relating to the review and analysis of
relevant terms and conditions of certain transfers of securities under the provisions of Statement of
Financial Accounting Standards No. 140 "Accounting for Transfers and Servicing of Financial Assets
and Extinguishments of Liabilities" ("SFAS 140") were not effective.
The Registrant's Management has taken such further actons as are necessary to revise its disclosure
controls and procedures in order to increase the effectiveness of these controls with respect to the
accounting treatment of transfers of certain inverse floater transactions. However, as discussed above,
the registrant enhanced controls related to the accounting treatment of transfers of certain inverse floater transactions.
(b) In December 2006, the principal executive and financial
officers became aware of matters relating to the Registrant’s purchase of
certain inverse floating rate obligations that required enhancements to certain
controls. The Registrant’s management determined that controls relating to
the review and analysis of the relevant contractual terms and conditions of
transfers of securities in connection with the purchase of certain inverse
floating rate obligations were not effective in identifying whether these
transfers qualified for sale accounting under the provisions of SFAS 140. The
Registrant’s management has taken such further actions as are necessary to
revise its controls and procedures in order to increase the effectiveness of
these controls and procedures in identifying such transactions that require
accounting treatment under SFAS 140.
Item 3. Exhibits
(a) Exhibit 99 CERT. – Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
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.
Registrant: PIMCO Municipal Income Fund II
By /s/ Brian S. Shlissel
Date: April 27, 2007
By /s/ Lawrence G. Altadonna
Date: April 27, 2007
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 dated indicated.
By /s/ Brian S. Shlissel
Date: April 27, 2007
By /s/ Lawrence G. Altadonna
Date: April 27, 2007
President & Chief Executive Officer
Treasurer, Principal Financial & Accounting Officer
President & Chief Executive Officer
Treasurer, Principal Financial & Accounting Officer