As filed with the Securities and Exchange Commission on May 3, 2000
Securities Act File No. 333-88367
Investment Company Act File No. 811-08573
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM N-14
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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PRE-EFFECTIVE AMENDMENT NO. |X| POST-EFFECTIVE AMENDMENT NO. 1
(CHECK APPROPRIATE BOX OR BOXES)
----------------------
MUNIHOLDINGS CALIFORNIA INSURED FUND II, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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(609) 282-2800
(AREA CODE AND TELEPHONE NUMBER)
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800 SCUDDERS MILL ROAD
PLAINSBORO, NEW JERSEY 08536
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES:
NUMBER, STREET, CITY, STATE, ZIP CODE)
-----------------------
TERRY K. GLENN
MUNIHOLDINGS CALIFORNIA INSURED FUND II, INC.
800 SCUDDERS MILL ROAD, PLAINSBORO, NEW JERSEY 08536
MAILING ADDRESS:
P.O. BOX 9011, PRINCETON, NEW JERSEY 08543-9011
(NAME AND ADDRESS OF AGENT FOR SERVICE)
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Copies to:
FRANK P. BRUNO, ESQ. MICHAEL J. HENNEWINKEL, ESQ.
BROWN & WOOD LLP MERRILL LYNCH ASSET MANAGEMENT, L.P.
ONE WORLD TRADE CENTER 800 SCUDDERS MILL ROAD
NEW YORK, NY 10048-0557 PLAINSBORO, NJ 08536
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<PAGE>
This amendment consists of the following:
(1) Facing Sheet of the Registration Statement.
(2) Part C to the Registration Statement (including signature page).
The Proxy Statement and Prospectus are incorporated by reference
from Pre-Effective Amendment No. 1 to this Registration Statement (file No.
333-88367) filed on November 8, 1999.
This amendment is being filed solely to file as Exhibit No. 12 to
this Registration Statement the private letter rulings received from the
Internal Revenue Service.
<PAGE>
PART C
OTHER INFORMATION
Item 15. Indemnification.
Section 2-418 of the General Corporation Law of the State of
Maryland, Article VI of the Registrant's Amended and Restated Articles of
Incorporation, a form of which was previously filed as an exhibit to the
Common Stock Registration Statement (defined below); Article VI of the
Registrant's By-Laws, which was previously filed as an exhibit to the Common
Stock Registration Statement, and the Investment Advisory Agreement, a form of
which was previously filed as an exhibit to the Common Stock Registration
Statement, provide for indemnification.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended (the "1933 Act"), may be provided to
directors, officers and controlling persons of the Registrant, pursuant to the
foregoing provisions or otherwise, the Registrant has been advised that in the
opinion of the Securities and Exchange Commission, such indemnification is
against public policy as expressed in the 1933 Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in
connection with any successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with
the securities being registered, the Registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the 1933 Act and will be governed
by the final adjudication of such issue.
Reference is made to (i) Section 6 of the Purchase Agreement relating
to the Registrant's Common Stock, a form of which was filed as an exhibit to
the Common Stock Registration Statement, and (ii) Section 7 of the Purchase
Agreement relating to the Registrant's AMPS, a form of which was filed as an
exhibit to the AMPS Registration Statement (defined below), for provisions
relating to the indemnification of the underwriter.
Item 16. Exhibits.
1 (a) - Articles of Incorporation of the Registrant, dated December
4, 1997.(a)
(b) - Articles of Amendment relating to name change. (a)
(c) - Articles of Amendment relating to name change. (b)
(d) - Form of Articles Supplementary creating the Series A AMPS and the
Series B AMPS. (c)
(e) - Form of Articles Supplementary creating the Series C AMPS, the
Series D AMPS and the Series E AMPS.(e)
2 - By-Laws of the Registrant.(a)
3 - Not Applicable.
4 - Form of Agreement and Plan of Reorganization among the Registrant
and MuniHoldings California Insured Fund, Inc., MuniHoldings
California Insured Fund III, Inc. and MuniHoldings California
Insured Fund IV, Inc. (included in Exhibit II to the Proxy
Statement and Prospectus contained in this Registration
Statement).(f)
5 (a) - Copies of instruments defining the rights of stockholders,
including the relevant portions of the Articles of Incorporation
and the By-Laws of the Registrant. (c)
(b) - Form of specimen certificate for the Common Stock of the
Registrant. (a)
(c) - Form of specimen certificate for the AMPS of the Registrant. (c)
6 - Form of Investment Advisory Agreement between Registrant and Fund
Asset Management, L.P. (a)
7 (a) - Form of Purchase Agreement for the Common Stock. (a)
(b) - Form of Purchase Agreement for the AMPS. (c)
(c) - Form of Merrill Lynch Standard Dealer Agreement. (a)
8 - Not applicable.
9 - Custodian Contract between the Registrant and The Bank of New
York. (a)
10 - Not applicable.
11 - Opinion and Consent of Brown & Wood LLP, counsel for the
Registrant. (f)
12 - Private Letter Ruling from the Internal Revenue Service.
13 (a) - Transfer Agency, Dividend Disbursing Agency and Shareholder
Servicing Agency Agreement between the Registrant and The Bank of
New York. (a)
(b) - Form of Auction Agent Agreement between the Registrant and IBJ
Whitehall Bank & Trust Company. (c)
(c) - Form of Broker-Dealer Agreement. (c)
(d) - Form of Letter of Representations. (c)
14 (a) - Consent of Deloitte & Touche LLP, independent auditors for the
Registrant. (f)
(b) - Consent of Deloitte & Touche LLP, independent auditors for
MuniHoldings California Insured Fund, Inc. (f)
(c) - Consent of Ernst & Young, LLP, independent auditors for MuniHoldings
California Insured Fund III, Inc. (f)
15 - Not applicable.
16 - Power of Attorney. (f)
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(a) Incorporated by reference to the Registrant's Registration
Statement on Form N-2 relating to the Registrant's Common Stock
(File No. 333-43147) (the "Common Stock Registration
Statement"), filed on December 23, 1997.
(b) Incorporated by reference to Pre-Effective Amendment No. I to
the Common Stock Registration Statement, filed on January 23,
1998.
(c) Incorporated by reference to the Registrant's Registration
Statement on Form N-2 relating to the Registrant's Auction
Market Preferred Stock (File No. 333-46439) (the "AMPS
Registration Statement"), filed on February 17, 1998.
(d) Reference is made to Article V, Article VI (sections 2, 3, 4, 5
and 6), Article VII, Article VIII, Article X, Article XI,
Article XII and Article XIII of the Registrant's Articles of
Incorporation, previously filed as Exhibit (a)(1) to the Common
Stock Registration Statement, and to Article 11, Article III
(sections 1, 2, 3, 5 and 17), Article VI, Article VII, Article
XII, Article XIII and Article XIV of the Registrant's By-Laws
previously filed as Exhibit (b) to the Common Stock Registration
Statement. Reference is also made to the Form of Articles
Supplementary filed as Exhibit (a)(3) to the AMPS Registration
Statement and as Exhibit I (e) hereto.
(e) Filed on October 4, 1999 with the Registrant's Registration
Statement on Form N-14 (File No. 333-88367).
(f) Filed on November 8, 1999, as an Exhibit to Pre-Effective
Amendment No. 1 to the Registrant's Registration Statement on
Form N-14 (File No. 333-88367).
Item 17. Undertakings.
(1) The undersigned Registrant agrees that prior to any public reoffering
of the securities registered through use of a prospectus which is part
of this Registration Statement by any person or party who is deemed to
be an underwriter within the meaning of Rule 145(c) of the Securities
Act of 1933, as amended, the reoffering prospectus will contain
information called for by the applicable registration form for
reofferings by persons who may be deemed underwriters, in addition to
the information called for by other items of the applicable form.
(2) The undersigned Registrant agrees that every prospectus that is filed
under paragraph (1) above will be filed as part of an amendment to the
registration statement and will not be used until the amendment is
effective, and that, in determining any liability under the Securities
Act of 1933, as amended, each post-effective amendment shall be deemed
to be a new registration statement for the securities offered therein,
and the offering of securities at that time shall be deemed to be the
initial bona fide offering of them.
(3) The Registrant undertakes to file, by post-effective amendment, either
a copy of the Internal Revenue Service private letter ruling applied
for or an opinion of counsel as to certain tax matters, within a
reasonable time after receipt of such ruling or opinion.
<PAGE>
SIGNATURES
As required by the Securities Act of 1933, this Registration
Statement has been signed on behalf of the Registrant, in the Township of
Plainsboro and State of New Jersey, on the 3rd day of May, 2000.
MUNIHOLDINGS CALIFORNIA INSURED
FUND II, INC.
(Registrant)
By /s/ TERRY K. GLENN
---------------------------
(Terry K. Glenn, President)
<PAGE>
EXHIBIT INDEX
12 - Private Letter Ruling from the Internal Revenue Service.
<PAGE>
Internal Revenue Service Department of the Treasury
Index Number: 0368.00-00 Washington, DC 20224
Donald C. Burke Person to Contact:
Vice President and Treasurer Kevin Shea Id#: 50-06578
MuniHoldings California Insured Fund Telephone Number:
800 Scudders Mill Road (202) 622-7550
Plainsboro, NJ 08536 Refer Reply To:
CC:DOM:CORP:5-PLR-115792-99
Date:
April 18, 2000
Re: Muniholdings California Insured Fund, Inc.
Dear Mr. Burke:
Attached please find corrected page 1 of the ruling letter dated
February 29, 2000. Please replace prior page 1 with the attached page
reflecting the correction of obvious error.
Sincerely yours,
Assistant Chief Counsel (Corporate)
By: /s/ CHARLES WHEDBEE
--------------------------------
Charles Whedbee
Senior Technical Reviewer
Branch 5
<PAGE>
Internal Revenue Service Department of the Treasury
Index Number: 0368.00-00 Washington, DC 20224
Donald C. Burke Person to Contact:
Vice President and Treasurer Kevin Shea Id#: 50-06578
MuniHoldings California Insured Fund Telephone Number:
800 Scudders Mill Road (202) 622-7550
Plainsboro, NJ 08536 Refer Reply To:
CC:DOM:CORP:5-PLR-115792-99
Date:
February 29, 2000
Acquiring = MuniHoldings California Insured Fund II, Inc.
a Maryland corporation
EIN 22-3559052
T1 = MuniHoldings California Insured Fund, Inc.
a Maryland corporation
EIN 22-3536488
T2 = MuniHoldings California Insured Fund III, Inc.
a Maryland corporation
EIN 22-3604197
T3 = MuniHoldings California Insured Fund IV, Inc.
a Maryland corporation
EIN 22-3628147
State A = Maryland
Date A = April 24, 1997
Date B = August 17, 1998
Date C = November 23, 1998
Dear Mr. Burke:
This is in reply to a letter dated September 24, 1999, in which
rulings are requested as to the federal income tax consequences of a proposed
transaction. Additional information was submitted in letters dated December
27, 1999, and January 12, 2000. The facts submitted for consideration are
substantially as set forth below.
<PAGE>
Internal Revenue Service Department of the Treasury
Index Number: 0368.00-00 Washington, DC 20224
Donald C. Burke Person to Contact:
Vice President and Treasurer Kevin Shea Id#: 50-06578
MuniHoldings California Insured Fund Telephone Number:
800 Scudders Mill Road (202) 622-7550
Plainsboro, NJ 08536 Refer Reply To:
CC:DOM:CORP:5-PLR-115792-99
Date:
February 29, 2000
Acquiring = MuniHoldings California Insured Fund
a Maryland corporation
EIN 22-3536488
T1 = MuniHoldings California Insured Fund II, Inc.
a Maryland corporation
EIN 22-3559052
T2 = MuniHoldings California Insured Fund III, Inc.
a Maryland corporation
EIN 22-3604197
T3 = MuniHoldings California Insured Fund IV, Inc.
a Maryland corporation
EIN 22-3628147
State A = Maryland
Date A = December 4, 1997
Date B = August 17, 1998
Date C = November 23, 1998
Dear Mr. Burke:
This is in reply to a letter dated September 24, 1999, in which
rulings are requested as to the federal income tax consequences of a proposed
transaction. Additional information was submitted in letters dated December
27, 1999, and January 12, 2000. The facts submitted for consideration are
substantially as set forth below.
<PAGE>
Acquiring is a closed-end nondiversified management investment
company organized under the laws of State A. Acquiring has elected to be taxed
as a regulated investment company ("RIC") under ss.ss.851-855 of the Internal
Revenue Code. Acquiring ha s outstanding voting common stock and two series of
voting preferred stock.
T1 is a closed-end nondiversified management investment company
organized on Date A under the laws of State A. T1 has elected to be taxed as a
RIC under ss.ss.851-855 of the Internal Revenue Code. T1 has outstanding
voting common stock and two series of voting preferred stock.
T2 is a closed-end nondiversified management investment company
organized on Date B under the laws of State A. T2 has elected to taxed as a
RIC under ss.ss.851-855 of the Code. T2 has outstanding voting common stock
and two series of voting preferred stock.
T3 is a closed-end nondiversified management investment company
organized on Date C under the laws of State A. T3 will elect to be taxed as a
RIC under ss.ss.851 and 855 of the Code in its first tax return. T3 has
outstanding voting common stock and two series of voting preferred stock.
Each of Acquiring, T1, T2 and T3 is registered under the Investment
Company Act of 1940.
For what are represented to be valid business reasons, the following
transaction is proposed:
(i) TI, T2, and T3 (Target Funds) will transfer all of their assets
and liabilities to Acquiring in exchange for Acquiring voting
common stock and voting preferred stock.
(ii) The Target Funds will dissolve and distribute the Acquiring
voting common and voting preferred stock to their shareholders.
Each Target Fund common stockholder will be entitled to receive
a proportionate number of Acquiring common shares equal to the
aggregate net asset value of the Target Fund common stock owned
by such shareholder on the exchange date. Each Target Fund
preferred shareholder, likewise, will be entitled to receive a
number of Acquiring preferred shares having a liquidation
preference and value equal to the liquidation preference and
value of the Target Fund shares owned by such shareholder on
the exchange date. Each Target Fund's preferred shares have the
same terms as the Acquiring preferred shares to be issued.
(iii) Acquiring may sell up to 66 percent of the assets received in
the transfers and will reinvest the proceeds consistent with
its investment objectives and policies. Acquiring will not sell
more than 66 percent of any Target Fund's assets following the
transaction.
No fractional shares will be issued by Acquiring in the transaction.
All fractional shares of Acquiring common stock will be aggregated and sold
and the fractional shareholder will receive cash in lieu thereof.
The following representations have been made in connection with the
proposed transaction:
(a) The fair market value of the Acquiring stock received by each
Target Fund shareholder will be approximately equal to the fair
market value of the Target Fund stock surrendered in the
exchange.
(b) Acquiring will acquire at least 90 percent of the fair market
value of the net assets and at least 70 percent of the fair
market value of the gross assets held by each Target Fund
immediately prior to the transaction. For purposes of this
representation, amounts paid by a Target Fund to dissenters,
amounts used by each Target Fund to pay its reorganization
expenses, amounts paid by each Target Fund to shareholders who
receive cash or other property, and all redemptions and
distributions (except for regular, normal dividends) made by
each Target Fund immediately preceding the transfer will be
included as assets of the respective Target Fund held
immediately prior to the transaction.
(c) Acquiring has no plan or intention to reacquire any of its
stock issued in the transaction.
(d) After the transaction, Acquiring will use the assets acquired
from Target Funds in its business, except that a portion of
these assets may be sold or otherwise disposed of in the
ordinary course of Acquiring's business and as set forth above
in step (iii) of the transaction. Any proceeds will be invested
in accordance with Acquiring's investment objectives.
Otherwise, Acquiring has no plan or intention to sell or
otherwise dispose of any of the assets of Target Funds acquired
in the transaction except for dispositions made in the ordinary
course of business or transfers described in ss.368(a)(2)(C).
(e) Target Funds will distribute to their shareholders the stock of
Acquiring received pursuant to the plan of reorganization.
(f) The liabilities of Target Funds assumed by Acquiring and any
liabilities to which the transferred assets of Target Funds are
subject were incurred by Target Funds in the ordinary course of
their businesses.
(g) Following the transaction, Acquiring will continue the historic
business of each Target Fund or use a significant portion of
each Target Fund's historic business assets in the continuing
business.
(h) Target Funds, Acquiring and the shareholders of each Target
Fund will pay their respective expenses, if any, incurred in
connection with the transaction.
(i) There is no intercorporate indebtedness existing between any of
the Target Funds and Acquiring that was issued, acquired, or
will be settled at a discount.
(j) Acquiring and each Target Fund meet the requirements of a
regulated investment company as referred to in ss.368(a)(2)(F).
(k) The fair market value of the assets of each Target Fund
transferred to Acquiring will equal or exceed the sum of the
liabilities assumed by Acquiring, plus the amount of
liabilities, if any, to which the transferred assets are
subject.
(1) Acquiring does not own, directly or indirectly, nor has it
owned during the past five years, directly or indirectly, any
stock of Target Funds.
(m) Cash is being distributed to shareholders of Target Funds in
lieu of fractional shares of Acquiring solely to save Acquiring
the expense and inconvenience of issuing and transferring
fractional shares, and such cash does not represent separately
bargained for consideration in the transaction. The total cash
consideration that will be paid in each transaction between
Acquiring and a Target Fund to the respective Target Fund
shareholders instead of issuing fractional shares of Acquiring
stock will not exceed one percent of the total consideration
that will be issued in the transaction to the Target Fund
shareholders in exchange for their shares of Target Fund stock.
The fractional share interests of each shareholder of a Target
Fund will be aggregated, and no Target shareholder will receive
cash in an amount equal to or greater than the value of one
full share of Acquiring stock.
(n) Target Funds are not under the jurisdiction of a court in a
title 11 or similar case within the meaning of ss.368(a)(3)(A).
(o) Target Funds and Acquiring have elected to be taxed as RICs
under ss.851, and for all of their taxable periods (including
the last short taxable period ending on the date of the
transaction, for each Target Fund), have qualified for the
special tax treatment afforded RICs under the Code. After the
transaction, Acquiring intends to continue to so qualify.
(p) There is no plan or intention for Acquiring (the issuing
corporation as defined in ss.1.368-1 (b)) or any person related
(as defined in ss.1. 3681 (e)(3)) to Acquiring, to acquire,
during the five year period beginning on the date of the
proposed transaction, with consideration other than Acquiring
stock, Acquiring stock furnished in exchange for a proprietary
interest in a Target Fund in the proposed transaction, either
directly or through any transaction, agreement, or arrangement
with any other person, except for cash distributed to the
Target Fund's common shareholders in lieu of fractional shares
of Acquiring common stock.
(q) During the five year period ending on the date of the proposed
transaction: i) neither Acquiring, nor any person related (as
defined in ss.1.368-1 (e)(3)) to Acquiring, will have acquired a
Target Fund's stock with consideration other than Acquiring
stock; ii) no Target Fund, nor any person related (as defined
in ss.1.368-1 (e)(3) without regard to ss.l.3681 (e)(3)(i)(A))
to a Target Fund, will have acquired such Target Fund's stock
with consideration other than Acquiring stock or the Target
Fund's stock; and iii) no distributions will have been made
with respect to a Target Fund's stock (other than ordinary,
normal, regular, dividend distributions made pursuant to the
Target Fund's historic dividend paying practice), either
directly or through any transaction, agreement, or arrangement
with any other person, except for a) cash paid to dissenters
and b) distributions described in ss.ss.852 and 4982 of the
Code, as required for each Target Fund's tax treatment as a
RIC.
(r) The aggregate value of the acquisitions, redemptions, and
distributions discussed in paragraphs (p) and (q), above, will
not exceed 50 percent of the value (without giving effect to
the acquisitions, redemptions and distributions) of the
proprietary interest in any Target Fund on the effective date
of the proposed transaction.
(s) At the time of the incorporation of each of T1, T2 and T3,
there was no plan or intention to sell or otherwise dispose of
such corporation's assets except in the ordinary course of
business.
Based solely upon the information and representations set forth
above, we hold as follows:
(1) The acquisition by Acquiring of substantially all of the assets
of each Target Fund in exchange for voting shares of Acquiring
stock and Acquiring's assumption of each Target Fund's
liabilities, followed by the distribution of each Target Fund
to its shareholders of Acquiring shares and any remaining
assets, in complete liquidation, will qualify as a
reorganization within the meaning of ss.368(a)(1)(C) of the
Code. Acquiring and each Target Fund each will be deemed a
"party to a reorganization" within the meaning of ss.368(b).
(2) No gain or loss will be recognized by each Target Fund upon the
transfer of substantially all of its assets to Acquiring solely
in exchange for Acquiring voting stock and Acquiring's
assumption of such Target Fund's liabilities or upon the
distribution of such Acquiring stock to the Target Fund
shareholder (ss.ss.361 (a) and (c), 357(a)).
(3) Acquiring will not recognize any gain or loss on the receipt of
the assets of each Target Fund in exchange for voting shares of
Acquiring (ss.l032(a)).
(4) The basis of each Target Fund's assets in the hands of
Acquiring will be the same as the basis of those assets in the
hands of such Target Fund immediately prior to the
reorganization (ss.362(b)).
(5) Acquiring's holding period for the Target Fund assets acquired
will include the period during which such assets were held by
the Target Fund (ss. 1223(2)).
(6) The shareholders of the Target Funds will not recognize any
gain or loss on the receipt of voting shares of Acquiring
(including fractional shares to which they may be entitled)
solely in exchange for their shares in the Target Funds
(ss.354(a)(1)).
(7) The basis of the Acquiring shares received by the Target Fund
shareholders (including fractional shares to which they may be
entitled) will be the same, in the aggregate, as the basis of
the Target Fund shares surrendered in exchange (ss.358(a)(1)).
(8) The holding period of the Acquiring shares received by Target
Fund shareholders in exchange for their Target Fund shares
(including fractional shares to which they may be entitled)
will include the period during which the exchanged Target Fund
shares were held, provided that the Target Fund shares are held
as a capital asset in the hands of the Target Fund shareholder
on the date of the exchange (ss.1223(l)).
(9) Any gain or loss realized by a shareholder of the Target Funds
upon the sale of fractional share interests of Acquiring voting
stock to which the stockholder is entitled will be recognized
to the shareholder measured by the difference between the
amount of cash received and the basis of the fractional share
interest. Where the stock surrendered qualifies as a capital
asset in the hands of the shareholder, such gain or loss will
be a capital gain or loss subject to the provisions and
limitations of Subchapter P of Chapter 1 of the Code.
(10) Pursuant to ss.381(a) and ss.1.381(a)-l, Acquiring will succeed
to and take into account the items of the Target Funds
described in ss.381(c), subject to the conditions and
limitations specified in ss.ss.381(b) and (c), 382, 383, and
384.
No opinion is expressed about the tax treatment of the proposed
transaction under other provisions of the Code or regulations or about the tax
treatment of any conditions existing at the time of, or effects resulting
from, the proposed transaction that are not specifically covered by the above
rulings.
This letter is directed only to the taxpayer who requested it.
Section 6110(k)(3) provides that it may not be used or cited as precedent.
A copy of this letter should be attached to the federal income tax
return of the taxpayers involved for the taxable year in which the transaction
covered by this letter is consummated.
<PAGE>
Pursuant to a power of attorney on file in this office, a copy of
this letter has been sent to the taxpayees representative.
Sincerely,
Assistant Chief Counsel (Corporate)
By: /s/ CHARLES WHEDBEE
------------------------------
Charles Whedbee
Senior Technical Reviewer
Branch 5
