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: BlackRock 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., Chief Executive
Officer, BlackRock 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: 03/31/2007
Date of reporting period: 10/01/06 - 12/31/06
Item 1 - Schedule of Investments
BlackRock MuniHoldings Insured Fund II, Inc.
Schedule of Investments as of December 31, 2006 (in Thousands)
Face
State Amount Municipal Bonds Value
Alabama - 2.9% $ 3,580 Jefferson County, Alabama, Limited Obligation School Warrants, Series A,
5.50% due 1/01/2022 $ 3,908
5,000 Mobile, Alabama, GO, Refunding, 5.25% due 8/15/2020 (a) 5,367
Alaska - 1.3% 2,000 Anchorage, Alaska, Water Revenue Refunding Bonds, 6% due 9/01/2024 (a) 2,132
1,700 Matanuska-Susitna Boro, Alaska, GO, Series A, 6% due 3/01/2010 (i)(j) 1,818
California - 30.9% 230 California State, GO, 5.50% due 4/01/2014 (j) 258
1,870 California State, GO, 5.50% due 4/01/2028 2,094
2,935 California State, Various Purpose, GO, 5.25% due 12/01/2022 (f) 3,174
9,350 California State, Veterans, GO, Refunding, AMT, Series BZ, 5.35% due 12/01/2021 (i) 9,462
2,405 Dixon, California, Unified School District, GO (Election of 2002), 5.20% due
8/01/2044 (f) 2,528
2,185 East Side Union High School District, California, Santa Clara County, GO (Election
of 2002), Series D, 5% due 8/01/2020 (n) 2,349
8,460 East Side Union High School District, California, Santa Clara County, GO (Election
of 2002), Series D, 5% due 8/01/2029 (n) 8,950
3,400 Los Angeles, California, Unified School District, GO (Election of 1997), Series F,
5% due 7/01/2013 (c)(j) 3,587
12,155 Los Angeles, California, Unified School District, GO, Series A, 5% due 7/01/2013 (i)(j) 12,824
4,240 Modesto, California, Schools Infrastructure Financing Agency, Special Tax Bonds,
5.50% due 9/01/2036 (a) 4,651
5,000 Port of Oakland, California, Revenue Refunding Bonds, AMT, Series L, 5.375% due
11/01/2027 (c) 5,347
2,985 Roseville, California, Joint Union High School District, GO (Election of 2004),
Series A, 5% due 8/01/2029 (c) 3,155
2,130 Sacramento, California, City Financing Authority, Capital Improvement Revenue Bonds
(911 Call Center and Other Municipal Projects), 5% due 12/01/2027 (a) 2,274
1,480 San Diego, California, Community College District, GO (Election of 2002), 5% due
5/01/2030 (f) 1,571
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 (f) 1,303
5,075 San Francisco, California, City and County, GO (California Academy of Sciences
Improvements), Series E, 5% due 6/15/2022 (i) 5,419
3,800 San Jose, California, GO (Libraries, Parks and Public Safety Projects), 5% due
9/01/2030 (i) 4,000
Portfolio Abbreviations
To simplify the listings of BlackRock 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
M/F Multi-Family
PCR Pollution Control Revenue Bonds
S/F Single-Family
VRDN Variable Rate Demand Notes
BlackRock MuniHoldings Insured Fund II, Inc.
Schedule of Investments as of December 31, 2006 (concluded) (in Thousands)
Face
State Amount Municipal Bonds Value
California $ 5,190 Sequoia, California, Unified High School District, GO, Refunding, Series B, 5.50%
(concluded) due 7/01/2035 (f) $ 5,822
4,485 Stockton, California, Public Financing Revenue Bonds (Redevelopment Projects),
Series A, 5.25% due 9/01/2031 (k) 4,801
2,930 Stockton, California, Public Financing Revenue Bonds (Redevelopment Projects),
Series A, 5.25% due 9/01/2034 (k) 3,134
2,915 Tustin, California, Unified School District, Senior Lien Special Tax Bonds (Community
Facilities District Number 97-1), Series A, 5% due 9/01/2032 (f) 3,036
4,620 Tustin, California, Unified School District, Senior Lien Special Tax Bonds (Community
Facilities District Number 97-1), Series A, 5% due 9/01/2038 (f) 4,802
3,000 University of California Revenue Bonds (Multiple Purpose Projects), Series Q, 5% due
9/01/2022 (f) 3,161
Colorado - 3.6% 6,285 Aurora, Colorado, COP, 5.75% due 12/01/2010 (a)(j) 6,748
280 Colorado HFA, Revenue Refunding Bonds (S/F Program), AMT, Senior Series A-2, 7.50%
due 4/01/2031 285
4,000 Colorado Health Facilities Authority, Hospital Revenue Refunding Bonds (Poudre Valley
Health Care), Series A, 5.75% due 12/01/2009 (f)(j) 4,268
Connecticut - 0.5% 1,520 Connecticut State, GO, Refunding, Series D, 5% due 12/01/2024 (i) 1,622
Florida - 3.6% 3,670 Miami-Dade County, Florida, Subordinate Special Obligation Revenue Bonds, Series
A, 5.24% due 10/01/2037 (i)(p) 786
6,300 Pasco County, Florida, Half-Cent Sales Tax Revenue Bonds, 5.125% due 12/01/2028 (a) 6,654
3,725 South Florida Water Management District, COP, 5% due 10/01/2036 (a) 3,937
Georgia - 2.2% 6,290 Augusta, Georgia, Water and Sewer Revenue Bonds, 5.25% due 10/01/2034 (f) 6,801
Idaho - 0.2% 580 Idaho Housing and Finance Association, S/F Mortgage Revenue Bonds, AMT, Series E,
6% due 1/01/2032 590
Illinois - 7.0% 2,185 Chicago, Illinois, GO (Neighborhoods Alive 21 Program), Series A, 6% due
7/01/2010 (c)(j) 2,370
18,130 Chicago, Illinois, GO, Series A, 6% due 7/01/2010 (c)(j) 19,667
125 Lake, Cook, Kane and McHenry Counties, Illinois, Community Unit School District
Number 220, GO, 6% due 12/01/2020 (c) 135
Indiana - 4.1% 3,000 Indiana Transportation Finance Authority, Highway Revenue Bonds, Series A, 5.25%
due 6/01/2029 (c) 3,231
9,280 Shelbyville, Indiana, Elementary School Building Corporation Revenue Bonds, First
Mortgage, 5.75% due 1/15/2009 (f)(j) 9,760
Kansas - 2.1% 3,510 Kansas State Development Finance Authority, Health Facilities Revenue Bonds (Sisters
of Charity Leavenworth), Series J, 6.125% due 12/01/2020 3,786
2,805 Sedgwick and Shawnee Counties, Kansas, S/F Mortgage Revenue Bonds, AMT, Series A-2,
6.20% due 12/01/2033 (e)(g) 2,823
Louisiana - 0.8% 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) 2,386
Massachusetts - 9.0% 5,535 Massachusetts Bay Transportation Authority, Sales Tax Revenue Refunding Bonds, Senior
Series A, 5% due 7/01/2035 5,724
3,495 Massachusetts Bay Transportation Authority, Special Assessment Revenue Refunding
Bonds, Series A, 5% due 7/01/2015 (j) 3,815
5,000 Massachusetts State School Building Authority, Dedicated Sales Tax Revenue Bonds,
Series A, 5% due 8/15/2030 (f) 5,313
12,345 Massachusetts State Special Obligation Dedicated Tax Revenue Bonds, 5.25% due
1/01/2014 (c)(j) 13,508
Michigan - 0.3% 1,000 Michigan State Hospital Finance Authority, Revenue Refunding Bonds (Mercy-Mount
Clemens), Series A, 6% due 5/15/2014 (i) 1,056
Minnesota - 4.3% 2,555 Prior Lake, Minnesota, Independent School District Number 719, GO, 5.50% due
2/01/2016 (f) 2,688
1,830 Prior Lake, Minnesota, Independent School District Number 719, GO, 5.50% due
2/01/2017 (f) 1,925
3,570 Prior Lake, Minnesota, Independent School District Number 719, GO, 5.50% due
2/01/2018 (f) 3,756
2,840 Prior Lake, Minnesota, Independent School District Number 719, GO, 5.50% due
2/01/2019 (f) 2,988
2,185 Sauk Rapids, Minnesota, Independent School District Number 47, GO, Series A,
5.625% due 2/01/2018 (i) 2,341
Nebraska - 1.9% 1,410 Omaha Convention Hotel Corporation, Nebraska, Convention Center Revenue Bonds,
First Tier, Series A, 5.50% due 4/01/2020 (a) 1,521
3,985 Omaha Convention Hotel Corporation, Nebraska, Convention Center Revenue Bonds, First
Tier, Series A, 5.50% due 4/01/2022 (a) 4,298
Nevada - 3.3% 145 Nevada Housing Division, S/F Mortgage Revenue Bonds, AMT, Series A-2, 6.30% due
4/01/2022 (i) 146
9,445 Truckee Meadows, Nevada, Water Authority, Water Revenue Bonds, Series A, 5.50% due
7/01/2011 (f)(j) 10,161
New Jersey - 16.7% 2,980 New Jersey EDA, Cigarette Tax Revenue Bonds, 5.625% due 6/15/2018 3,091
8,590 New Jersey EDA, Cigarette Tax Revenue Bonds, 5.75% due 6/15/2029 9,293
6,200 New Jersey EDA, Cigarette Tax Revenue Bonds, 5.75% due 6/15/2034 (b) 6,903
11,000 New Jersey EDA, Motor Vehicle Surcharge Revenue Bonds, Series A, 5.25% due 7/01/2033 (i) 11,833
4,220 New Jersey State Transportation Trust Fund Authority, Transportation System Revenue
Bonds, Series D, 5% due 6/15/2018 (a) 4,541
12,950 New Jersey State Transportation Trust Fund Authority, Transportation System Revenue
Bonds, Series D, 5% due 6/15/2020 (f) 13,882
3,000 New Jersey State Turnpike Authority, Turnpike Revenue Bonds, Series C, 5% due
1/01/2030 (f) 3,174
New Mexico - 3.5% 5,000 Farmington, New Mexico, PCR, Refunding (Public Service Company of New Mexico - San
Juan Project), Series C, 5.70% due 12/01/2016 (a) 5,108
5,480 New Mexico Finance Authority, Senior Lien State Transportation Revenue Bonds,
Series A, 5.125% due 6/15/2018 (i) 5,940
New York - 13.8% 14,000 Nassau Health Care Corporation, New York, Health System Revenue Bonds, 5.75% due
8/01/2009 (f)(j) 15,018
5,000 New York City, New York, Sales Tax Asset Receivable Corporation Revenue Bonds,
Series A, 5% due 10/15/2020 (i) 5,359
5,755 New York State Dormitory Authority Revenue Bonds (School Districts Financing Program),
Series D, 5.25% due 10/01/2023 (i) 6,185
2,000 Tobacco Settlement Financing Corporation of New York Revenue Bonds, Series A-1, 5.25%
due 6/01/2021 (a) 2,144
7,850 Tobacco Settlement Financing Corporation of New York Revenue Bonds, Series C-1, 5.50%
due 6/01/2017 8,385
5,630 Tobacco Settlement Financing Corporation of New York Revenue Bonds, Series C-1, 5.50%
due 6/01/2020 (c) 6,128
500 Triborough Bridge and Tunnel Authority, New York, General Purpose Revenue Refunding
Bonds, VRDN, Series C, 3.85% due 1/01/2032 (a)(l) 500
North 1,305 North Carolina HFA, Home Ownership Revenue Bonds, AMT, Series 14-A, 5.35% due
Carolina - 0.4% 1/01/2022 (a) 1,348
Ohio - 0.9% 1,745 Aurora, Ohio, City School District, COP, 6.10% due 12/01/2009 (i)(j) 1,881
1,000 Kent State University, Ohio, University Revenue Bonds, 6% due 5/01/2024 (a) 1,079
Oklahoma - 0.8% 2,385 Claremore, Oklahoma, Public Works Authority, Capital Improvement Revenue Refunding
Bonds, Series A, 5.25% due 6/01/2027 (f) 2,589
Pennsylvania - 9.5% 5,600 Lycoming County, Pennsylvania, College Authority Revenue Bonds (Pennsylvania
College of Technology), 5.25% due 7/01/2007 (i)(j) 5,701
6,435 Pennsylvania State Higher Educational Facilities Authority, State System of Higher
Education Revenue Bonds, Series O, 5.125% due 6/15/2024 (a) 6,471
4,290 Pittsburgh, Pennsylvania, GO, Series C, 5.25% due 9/01/2017 (f) 4,748
6,415 Pittsburgh, Pennsylvania, GO, Series C, 5.25% due 9/01/2018 (f) 7,087
1,390 Seneca Valley, Pennsylvania, School District, GO, 5% due 1/01/2020 (c) 1,492
2,260 Seneca Valley, Pennsylvania, School District, GO, 5% due 1/01/2021 (c) 2,423
2,090 Washington County, Pennsylvania, Capital Funding Authority Revenue Bonds (Capital
Projects and Equipment Program), 6.15% due 12/01/2029 (a) 2,242
Rhode Island - 3.5% 5,555 Providence, Rhode Island, Redevelopment Agency Revenue Refunding Bonds (Public Safety
and Municipal Buildings), Series A, 5.75% due 4/01/2010 (a)(j) 5,957
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 (n) 5,136
South 1,880 South Carolina Housing Finance and Development Authority, Mortgage Revenue Refunding
Carolina - 0.6% Bonds, AMT, Series A-2, 6.35% due 7/01/2019 (f) 1,959
Tennessee - 1.6% 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)(j) 3,744
1,080 Tennessee HDA, Revenue Bonds (Homeownership Program), AMT, Series 2C, 6% due 7/01/2011 1,108
110 Tennessee HDA, Revenue Refunding Bonds (Homeownership Program), AMT, Series 1, 6.05%
due 7/01/2014 (i) 111
Texas - 5.1% 1,750 Austin, Texas, Convention Center Revenue Bonds (Convention Enterprises Inc.), Trust
Certificates, Second Tier, Series B, 6% due 1/01/2011(j) 1,897
1,835 Dallas-Fort Worth, Texas, International Airport Revenue Refunding and Improvement
Bonds, AMT, Series A, 5.875% due 11/01/2017 (c) 1,985
2,150 Dallas-Fort Worth, Texas, International Airport Revenue Refunding and Improvement
Bonds, AMT, Series A, 5.875% due 11/01/2018 (c) 2,326
2,390 Dallas-Fort Worth, Texas, International Airport Revenue Refunding and Improvement
Bonds, AMT, Series A, 5.875% due 11/01/2019 (c) 2,585
115 El Paso, Texas, Water and Sewer Revenue Refunding and Improvement Bonds, Series A, 6%
due 3/01/2015 (f) 127
170 El Paso, Texas, Water and Sewer Revenue Refunding and Improvement Bonds, Series A, 6%
due 3/01/2016 (f) 188
180 El Paso, Texas, Water and Sewer Revenue Refunding and Improvement Bonds, Series A, 6%
due 3/01/2017 (f) 199
4,616 Houston, Texas, Community College System, Participation Interests, COP (Alief Center
Project), 5.75% due 8/15/2022 (i) 4,806
1,850 Midland, Texas, Certificates of Obligation, GO, 6.10% due 3/01/2010 (c)(j) 1,982
Utah - 0.2% 610 Weber County, Utah, Municipal Building Authority, Lease Revenue Refunding Bonds, 5.75%
due 12/15/2007 (i)(j) 628
Washington - 6.9% 6,885 Bellevue, Washington, GO, Refunding, 5.50% due 12/01/2039 (i) 7,610
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) 4,100
1,805 Lewis County, Washington, GO, Refunding, 5.75% due 12/01/2009 (a)(j) 1,912
1,640 Lewis County, Washington, GO, Refunding, 5.75% due 12/01/2024 (a) 1,729
2,500 Seattle, Washington, Municipal Light and Power Revenue Bonds, 6% due 10/01/2009 (i)(j) 2,681
3,500 Seattle, Washington, Water System Revenue Bonds, Series B, 6% due 7/01/2009 (c)(j) 3,734
West 6,210 West Virginia State Housing Development Fund, Housing Finance Revenue Refunding Bonds,
Virginia - 2.0% Series D, 5.20% due 11/01/2021 (i) 6,431
Wisconsin - 0.4% 1,250 Wisconsin State Health and Educational Facilities Authority Revenue Bonds (Blood Center
of Southeastern Wisconsin Project), 5.75% due 6/01/2034 1,360
Puerto Rico - 2.4% 6,225 Puerto Rico Commonwealth, Public Improvement, GO, 5.125% due 7/01/2030 (f) 6,527
1,010 Puerto Rico Commonwealth, Public Improvement, GO, Refunding, Series B, 5.25% due
7/01/2032 1,087
Total Municipal Bonds (Cost - $442,579) - 146.3% 462,470
Municipal Bonds Held in Trust (m)
Arkansas - 4.0% 12,210 Arkansas State Development Finance Authority, M/F Mortgage Revenue Refunding Bonds,
Series C, 5.35% due 12/01/2035 (d)(i) 12,815
California - 4.6% 10,710 California Pollution Control Financing Authority, PCR, Refunding (Pacific Gas and
Electric), AMT, Series A, 5.35% due 12/01/2016 (i) 11,487
3,000 Port of Oakland, California, Revenue Bonds, AMT, Series K, 5.75% due 11/01/2021 (c) 3,182
Illinois - 2.6% 7,300 Chicago, Illinois, O'Hare International Airport Revenue Bonds, Third Lien, AMT,
Series B-2, 6% due 1/01/2029 (n) 8,183
Michigan - 3.4% 2,000 Michigan State Strategic Fund, Limited Obligation Revenue Refunding Bonds (Detroit
Edison Company Pollution Control Project), AMT, Series A, 5.50%, due 6/1/2030 (n) 2,160
5,000 Michigan State Strategic Fund, Limited Obligation Revenue Refunding Bonds (Detroit
Edison Company Pollution Control Project), AMT, Series C, 5.65% due 9/01/2029 (n) 5,323
3,000 Saint Clair County, Michigan, Economic Revenue Refunding Bonds (Detroit Edison Co.
Project), Series AA, 6.40% due 8/01/2024 (a) 3,178
New York - 2.3% 6,750 New York City, New York, Sales Tax Asset Receivable Corporation Revenue Bonds,
Series A, 5.25% due 10/15/2027 (a) 7,329
Texas - 5.5% 16,000 Dallas-Fort Worth, Texas, International Airport Revenue Bonds, AMT, Series A, 5.50%
due 11/01/2033 (i) 17,254
Total Municipal Bonds Held in Trust - (Cost - $68,405) - 22.4% 70,911
Shares
Held Short-Term Securities
11,189 Merrill Lynch Institutional Tax-Exempt Fund, 5.19% (h)(o) 11,189
Total Short-Term Securities (Cost - $11,189) - 3.6% 11,189
Total Investments (Cost - $522,173*) - 172.3% 544,570
Other Assets Less Liabilities - 2.9% 9,350
Liabilities for Trust Certificates, Including Interest Expense Payable - (10.5%) (33,164)
Preferred Stock, at Redemption Value - (64.7%) (204,652)
-----------
Net Assets Applicable to Common Stock - 100.0% $ 316,104
===========
* The cost and unrealized appreciation (depreciation) of investments
as of December 31, 2006, as computed for federal income tax purposes,
were as follows:
Aggregate cost $ 490,199
=============
Gross unrealized appreciation $ 21,600
Gross unrealized depreciation (214)
-------------
Net unrealized appreciation $ 21,386
=============
(a) AMBAC Insured.
(b) Assured Guaranty Insured.
(c) FGIC Insured.
(d) FHA Insured.
(e) FNMA Collateralized.
(f) FSA Insured.
(g) GNMA Collateralized.
(h) Investments in companies considered to be an affiliate of the Fund,
for purposes of Section 2(a)(3) of the Investment Company Act of 1940,
were as follows:
Net Dividend
Affiliate Activity Income
Merrill Lynch Institutional
Tax-Exempt Fund 6,573 $ 74
(i) MBIA Insured.
(j) Prerefunded.
(k) Radian Insured.
(l) Security may have a maturity of more than one year at time of issuance,
but has variable rate and demand features that qualify it as a short-term
security. The rate disclosed is that currently in effect. This rate changes
periodically based upon prevailing market rates.
(m) Securities represent underlying bonds transferred to a separate securitization
trust established in a tender option bond transaction in which the Fund may
have acquired the residual interest certificates. These securities serve as
collateral in a financing transaction.
(n) XL Capital Insured.
(o) Represents the current yield as of December 31, 2006.
(p) Represents a zero coupon bond; the interest rate shown reflects the
effective yield at the time of purchase.
Item 2 - Controls and Procedures
2(a) - The Registrant's principal executive and principal financial officers
have evaluated the Registrant's disclosure controls and procedures,
including internal control over financial reporting, within 90 days of
this filing. Such principal officers have concluded that as of
January 23, 2007 the Registrant's disclosure controls and procedures
were effective in design and operation to reasonably ensure that
information required to be disclosed by the Registrant in this Form
N-Q was recorded, processed, summarized, and reported within the
required time periods, and were sufficient to form the basis of the
certifications required by Rule 30a-2 of the Investment Company Act of
1940, as amended. Prior to reaching that conclusion, such principal
officers had become aware of matters relating to the Registrant's
participation in certain inverse floater structures that necessitated
adjustments to financial information included in Item 1 of this
filing. As a result, management of the Registrant had reevaluated
certain disclosure controls and procedures determined not to be
effective, as discussed more fully below.
Management of the Registrant is responsible for establishing and
maintaining effective internal control over financial reporting. In
fulfilling this responsibility, estimates and judgments by management
are required to assess the expected benefits and related costs of
controls. The Registrant's internal control over financial reporting
is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with U.S. generally
accepted accounting principles. Such internal control includes
policies and procedures that provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use or
disposition of a registrant's assets that could have a material effect
on the financial statements.
Because of its inherent limitations, internal control over financial
reporting may not prevent or detect misstatements. Also, projections
of any evaluation of effectiveness to future periods are subject to
the risk that controls may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or
procedures may deteriorate.
A control deficiency exists when the design or operation of a control
does not allow management or employees, in the normal course of
performing their assigned functions, to prevent or detect
misstatements on a timely basis. A significant deficiency is a
control deficiency, or combination of control deficiencies, that
adversely affects the Registrant's ability to initiate, authorize,
record, process or report financial data reliably in accordance with
generally accepted accounting principles such that there is more than
a remote likelihood that a misstatement of the Registrant's annual or
interim financial statements that is more than inconsequential will
not be prevented or detected. A material weakness is a significant
deficiency, or combination of significant deficiencies, that results
in more than a remote likelihood that a material misstatement of the
annual or interim financial statements will not be prevented or
detected.
The Registrant identified the following control deficiency, that was
determined to be a material weakness, as defined above, in the
Registrant's internal control over financial reporting at October 31,
2006. The Registrant's controls related to the review and analysis of
relevant terms and conditions of transfers of certain assets
pertaining to inverse floater structures were not operating
effectively to appropriately determine whether the transfers of assets
qualified for sale accounting 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"). As a result, these controls did not detect that certain
transfers were not appropriately recorded as borrowings. Accordingly,
the Registrant's schedule of investments as of and for the period
ended October 31, 2006, were restated to appropriately reflect
transfers of such securities as secured borrowings. These adjustments
had no impact on net assets, net asset value per share or total
return.
Subsequent to October 31, 2006, but prior to the evaluation of the
design and operation of the Registrant's disclosure controls and
procedures at January 23, 2007, the Registrant's disclosure controls
and procedures were modified to enhance the review and analysis of the
relevant terms and conditions of transfers of securities in connection
with inverse floater structures in light of SFAS 140.
2(b) - There have been 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 are
reasonably likely to materially affect, the registrant's internal
control over financial reporting. However, as discussed above,
subsequent to October 31, 2006, the Registrant has enhanced controls
related to the application of SFAS 140.
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 Insured Fund II, Inc.
By: /s/ Robert C. Doll, Jr.
-----------------------
Robert C. Doll, Jr.
Chief Executive Officer
BlackRock MuniHoldings Insured Fund II, Inc.
Date: February 20, 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 dates indicated.
By: /s/ Robert C. Doll, Jr.
-----------------------
Robert C. Doll, Jr.
Chief Executive Officer
BlackRock MuniHoldings Insured Fund II, Inc.
Date: February 20, 2007
By: /s/ Donald C. Burke
--------------------
Donald C. Burke
Chief Financial Officer
BlackRock MuniHoldings Insured Fund II, Inc.
Date: February 20, 2007