<PAGE>
This Term Sheet, taken together with the Preliminary Prospectus dated March
4, 1998 (the "Preliminary Prospectus"), pursuant to Rule 434 under the
Securities Act of 1933, as amended, shall be deemed to constitute the final
prospectus for purposes of Section 10(a) of such Act with respect to the
shares of AMPS of MuniHoldings Fund II, Inc. offered hereby. Capitalized terms
in this Term Sheet which are not defined herein will have the meaning defined
in the Preliminary Prospectus.
TERM SHEET
USED PURSUANT TO RULE 434 UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(SUPPLEMENT TO PRELIMINARY PROSPECTUS DATED MARCH 4, 1998)
$87,000,000
MUNIHOLDINGS FUND II, INC.
AUCTION MARKET PREFERRED STOCK ["AMPS(R)"]
1,740 SHARES, SERIES A
1,740 SHARES, SERIES B
LIQUIDATION PREFERENCE $25,000 PER SHARE
----------------
TERMS OF THE OFFERING
The information appearing on the cover page of the Preliminary Prospectus is
supplemented and restated as follows:
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRICE TO PROCEEDS TO
PUBLIC(1) SALES LOAD(2) FUND(1)(3)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share................................ $25,000 $250 $24,750
- --------------------------------------------------------------------------------
Total.................................... $87,000,000 $870,000 $86,130,000
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(1)Plus accumulated dividends, if any, from the Date of Original Issue.
(2)The Fund and the Investment Adviser have agreed to indemnify the
Underwriter against certain liabilities under the Securities Act of 1933,
as amended. See "Underwriting."
(3)Offering expenses payable by the Fund, estimated at $190,000, will be
reimbursed by the Underwriter. See "Underwriting."
----------------
The shares of AMPS are offered by the Underwriter, subject to prior sale,
when, as and if issued by the Fund and accepted by the Underwriter, subject to
approval of certain legal matters by counsel for the Underwriter and certain
other conditions. The Underwriter reserves the right to withdraw, cancel or
modify such offer and to reject orders in whole or in part. It is expected
that one certificate for each series of the AMPS will be delivered to the
nominee of The Depository Trust Company on or about March 19, 1998.
----------------
The information appearing in the first two paragraphs on page 2 of the
Preliminary Prospectus is supplemented and restated as follows:
Dividends on the shares of Auction Market Preferred Stock(R) ("AMPS(R)"),
Series A ("Series A AMPS(R)") and Series B ("Series B AMPS(R)") of the Fund
offered hereby will be cumulative from the Date of Original Issue and payable
commencing on April 29, 1998 in the case of Series A AMPS and April 27, 1998
in the case of Series B AMPS (each, as applicable, an "Initial Dividend
Payment Date") and, generally, on each succeeding Wednesday in the case of
Series A AMPS and each succeeding Monday in the case of Series B AMPS, subject
to certain exceptions.
The cash dividend rate (the "Applicable Rate") on the shares of Series A
AMPS for the Initial Dividend Period ending April 28, 1998 will be 3.55% per
annum and the Applicable Rate on the shares of Series B AMPS for the Initial
Dividend Period ending April 26, 1998 will be 3.55% per annum. The Applicable
Rate on the shares of AMPS of each series for each Subsequent Dividend Period
will be determined pursuant to periodic auctions conducted in accordance with
the procedures described in Appendix C hereto (an "Auction"). Except as
otherwise provided herein, each Subsequent Dividend Period for each series of
AMPS will be a 7-Day Dividend Period; provided, however, that prior to any
Auction, the Fund may elect, subject to certain limitations described herein,
with respect to each series of AMPS, upon giving notice to holders thereof, a
Special Dividend Period. See "Description of AMPS--Dividends."
- --------
(R) Registered trademark of Merrill Lynch & Co., Inc.
----------------
MERRILL LYNCH & CO.
----------------
The date of this Term Sheet is March 16, 1998.
<PAGE>
UNDERWRITING
The text of the second paragraph under "Underwriting" on page 59 of the
Preliminary Prospectus is supplemented and restated as follows:
The Underwriter has advised the Fund that it proposes initially to offer the
shares of AMPS to the public at the public offering price set forth on the
cover page of this Prospectus, and to certain dealers at such price less a
concession not in excess of $137.50 per share. The Underwriter may allow, and
such dealers may reallow, a discount not in excess of $31.25 per share to
other dealers. After the initial public offering, the public offering price,
concession and discount may be changed. The sales load of $250 per share is
equal to 1.0% of the initial public offering price. Investors must pay for any
AMPS purchased in the initial public offering on or before March 19, 1998.
2
