As filed with the Securities and Exchange Commission on September 29, 2000
Securities Act File No. 333-34836
Investment Company Act File No. 811-09191
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------------
FORM N-14
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------------
[ ] Pre-Effective Amendment No.
[X] Post-Effective Amendment No. 1
(Check appropriate box or boxes)
--------------------------
MuniHoldings Insured Fund II, Inc.
(Exact Name of Registrant as Specified in Charter)
--------------------------
(609) 282-2800
(Area Code and Telephone Number)
--------------------------
800 Scudders Mill Road
Plainsboro, New Jersey 08536
(Address of Principal Executive Offices:
Number, Street, City, State, Zip Code)
--------------------------
Terry K. Glenn
MuniHoldings 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)
--------------------------
Copies to:
Frank P. Bruno, Esq. Michael J. Hennewinkel, Esq.
BROWN & WOOD LLP FUND ASSET MANAGEMENT
One World Trade Center 800 Scudders Mill Road
New York, New York 10048-0557 Plainsboro, New Jersey 08543-9011
This Post-Effective Amendment consists of the following:
(1) Facing Sheet of the Registration Statement.
(2) Part C to the Registration Statement (including signature page).
Parts A and B are incorporated herein by reference from Pre-Effective Amendment
No. 1 to this Registration Statement (File No. 333-34836) filed on May 24, 2000.
This Amendment is being filed solely to file as Exhibit No. 12 to this
Registration Statement the Private Letter Ruling from the Internal Revenue
Service.
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 Articles of Incorporation, which was previously
filed as an exhibit to the Common Stock Registration Statement (as 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 (as defined below), for provisions
relating to the indemnification of the underwriter.
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
<S> <C> <C>
1 (a) -- Articles of Incorporation of the Registrant, dated December 28, 1998. (a)
(b) -- Form of Articles Supplementary creating the Registrant's Series A AMPS and the Registrant's Series B
AMPS. (b)
(c) -- Form of Articles Supplementary creating the Registrant's Series C AMPS. (c)
2 -- By-Laws of the Registrant.(a)
3 -- Not Applicable.
4 -- Form of Agreement and Plan of Reorganization among the Registrant and MuniHoldings Insured Fund III,
Inc., and MuniHoldings Insured Fund IV, Inc. (included as Appendix II to the Joint Proxy Statement and
Prospectus contained in this Registration Statement)
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. (d)
(b) -- Form of specimen certificate for the Common Stock of the Registrant. (e)
(c) -- Form of specimen certificate for the AMPS of the Registrant. (b)
6 -- Form of Investment Advisory Agreement between Registrant and Fund Asset Management, L.P. (e)
7 (a) -- Form of Purchase Agreement for the Common Stock of the Registrant. (e)
(b) -- Form of Purchase Agreement for the AMPS of the Registrant. (b)
(c) -- Form of Merrill Lynch Standard Dealer Agreement. (e)
8 -- Not applicable.
9 -- Custodian Contract between the Registrant and State Street Bank and Trust Company. (e)
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) -- Form of Registrar, Transfer Agency and Service Agreement between the Registrant and State Street Bank
and Trust Company. (e)
(b) -- Form of Auction Agent Agreement between the Registrant and The Bank of New York.(b)
(c) -- Form of Broker-Dealer Agreement. (b)
(d) -- Form of Letter of Representations. (b)
14 -- Consent of Ernst & Young LLP, independent auditors for the Registrant. (f)
15 -- Not applicable.
16 -- Power of Attorney. (g)
17 (a) -- Letter to Stockholders of each Fund. (f)
(b) -- Question and Answer Sheet. (f)
</TABLE>
______________
(a) Incorporated herein by reference from the Registrant's initial
Registration Statement under the Securities Act of 1933, as amended, on
Form N-2 relating to the Registrant's Common Stock (File No. 333-70183),
filed on January 6, 1999 (the "Common Stock Registration Statement").
(b) Incorporated herein by reference from the Registrant's initial
Registration Statement under the Securities Act of 1933, as amended, on
Form N-2 relating to the Registrant's Auction Market Preferred Stock
(File No. 333-70183), filed on February 22, 1999 (the "AMPS Registration
Statement").
(c) Filed on April 14, 2000, as an exhibit to the Registrant's Registration
Statement on Form N-14 (File No. 333-34836) under the Securities Act of
1933, as amended (the "N-14 Registration Statement").
(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) to the Common Stock Registration Statement, to Article II,
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, and to the Form of Articles Supplementary relating to the
Registrant's Series A AMPS and Series B AMPS, previously filed as Exhibit
(a)(2) to the AMPS Registration Statement. Reference is also made to the
Form of Articles Supplementary relating to the Registrant's Series C
AMPS, filed as Exhibit 1(c) hereto.
(e) Incorporated herein by reference from Pre-Effective Amendment No. 1 to
the Common Stock Registration Statement, filed on February 23, 1999.
(f) Filed as an exhibit to Pre-Effective Amendment No. 1 to the N-14
Registration Statement.
(g) Included on the signature page of the N-14 Registration Statement filed
on April 14, 2000 and incorporated herein by reference.
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.
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 29th day of September, 2000.
MUNIHOLDINGS INSURED FUND II, INC.
(Registrant)
By: /s/ Donald C. Burke
---------------------------------------
(Vice President and Treasurer)
As required by the Securities Act of 1933, this Registration Statement
has been signed by the following persons in the capacities and on the dates
indicated.
Signatures Title Date
---------- ----- ----
TERRY K. GLENN* President and Director
---------------- (Principal Executive Officer)
(Terry K Glenn)
DONALD C. BURKE* Vice President and Treasurer
----------------- (Principal Financial and
(Donald C. Burke) Accounting Officer)
JOE GRILLS* Director
-----------------
(Joe Grills)
WALTER MINTZ* Director
-----------------
(Walter Mintz)
ROBERT S. SALOMON, JR.* Director
-----------------------
(Robert S. Salomon, Jr.)
MELVIN R. SEIDEN* Director
------------------
(Melvin R. Seiden)
STEPHEN B. SWENSRUD* Director
---------------------
(Stephen B. Swensrud)
ARTHUR ZEIKEL* Director
-----------------
(Arthur Zeikel)
*By: /s/ DONALD C. BURKE
---------------------
(Donald C. Burke, September 29, 2000
Attorney-in-Fact)
Exhibit 12
Internal Revenue Service Department of the Treasury
Index Number: 368.00-00 Washington, DC 20224
MuniHoldings Insured Fund 11, Inc. Person to Contact
Attn: Donald C. Burke Christopher Bass - 50-08512
Vice President and Treasurer Telephone Number
800 Scudders Mill Road (202) 622-7770
Plainsboro, NJ 08536 Refer Reply To:
CC-CORP:2-PLR-1 08558-00
Date:
August 4, 2000
Legend:
Acquiring: = MuniHoldings Insured Fund II, Inc. a Maryland Corporation EIN-
22-3636347
Target Fund 1 = MuniHoldings Insured Fund III, Inc. a Maryland Corporation
EIN: 22-3654897
Target Fund 2 = MuniHoldings Insured Fund IV, Inc. a Maryland Corporation EIN:
22-3677662
State X = Maryland
Dear Mr. Burke:
This letter responds to your representative's April 12, 2000 request for
rulings under ss. 368(a)(1)(C) of the Internal Revenue Code on behalf of the
above-captioned taxpayers. The information submitted for consideration is
summarized below.
Acquiring is organized under the laws of State X and registered under the
Investment Company Act of 1940 (the "1940 Act") as non-diversified, leveraged,
closed-end management investment company. Acquiring has elected to be taxed as
a regulated investment company ("RIC") under ss.ss. 851-855 of the Internal
Revenue Code (the "Code"). Acquiring currently has outstanding voting common
stock and two series of voting non-qualified preferred stock.
Target Fund 1 is organized under the laws of State X and registered under
the Investment Company Act of 1940 (the "1940 Act") as non-diversified,
leveraged, closed-end management investment company. Target 1 has elected to
be taxed as a regulated investment company ("RIC") under ss.ss. 851-855 of the
Internal Revenue Code (the "Code"). Target Fund 1 currently has outstanding
voting common stock and one series of voting non-qualified preferred stock.
Target Fund 2 is organized under the laws of State X and registered under
the Investment Company Act of 1940 (the "1940 Act") as non-diversified,
leveraged, closed-end management investment company. Target Fund 2 has elected
to be taxed as a regulated investment company ("RIC") under ss.ss. 851-855 of
the Internal Revenue Code (the "Code"). Target Fund 2 currently has
outstanding voting common stock and one series of voting non-qualified
preferred stock.
Acquiring, Target Fund 1 and Target Fund 2 (the "Funds") share the same
investment objective, which is to provide shareholders with current income
exempt from Federal income tax. Each Fund seeks to achieve its investment
objective by investing primarily in a portfolio of long-term, investment grade
municipal obligations the interest on which is, in the opinion of bond counsel
to the issuer, exempt from Federal income tax ("Municipal Bonds"). Under
normal circumstances, each Fund invests at least 80% of its assets in
municipal obligations with remaining maturities of one year or more that are
covered by insurance guaranteeing the timely payment of principal at maturity
and interest when due. Except during temporary defensive periods, each Fund
will invest at least 80% of its total assets in Municipal Bonds.
Acquiring, Target Fund 1 and Target Fund 2 (Target Fund 1 and Target Fund
2 are sometimes hereinafter referred to as "Target Funds") have entered into
an agreement and plan of reorganization for what are represented to be valid
business reasons. Pursuant to the agreement, the transaction consists of the
following steps:
(1) Each Target Fund will transfer all of its assets and liabilities to
Acquiring in exchange for an equal value of newly issued Acquired common
voting stock and non-qualified preferred voting stock.
(2) Target Funds will distribute to their shareholders all of the Acquiring
stock received in the transaction. Each Target Fund shareholder will
receive shares of Acquiring on a pro rata basis.
(3) Target Funds will liquidate and dissolve in accordance with the laws of
State X, and terminate their registration under the 1940 Act.
After the transaction, Acquiring may sell up to 66% of the assets
received in the transaction to unrelated parties, and will reinvest the
proceeds consistent with its investment objectives and policies.
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) There is no plan or intention by Target Fund shareholders who own 5
percent or more of a Target Fund's stock, and to the best of the knowledge of
the management of each Target Fund, there is no plan or intention on the part
of any other shareholders of a Target Fund to sell, exchange, or otherwise
dispose of a number of shares of Acquiring stock received in the
Reorganization that would reduce such Target Fund shareholders' ownership of
Acquiring stock to a number of shares having a value, as of the date of the
Reorganization, of less than 50 percent of the value of all of the formerly
outstanding stock of the relevant Target Fund as of the same date. For
purposes of this representation, shares of Target Fund stock exchanged for
cash or other property, surrendered by dissenters, or exchanged for cash in
lieu of fractional shares of Acquiring stock will be treated as outstanding
stock of such Target Fund on the date of the Reorganization. Moreover, shares
of Target Fund stock and shares of Acquiring stock held by Target Fund
shareholders and otherwise sold, redeemed, or disposed of prior to or
subsequent to the Reorganization will be considered in making this
representation. Each Target Fund represents that it is publicly traded and,
therefore, may appropriately make this representation with respect to its 5
percent shareholders rather than one percent shareholders per Rev. Proc. 86-42.
(c) 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 Reorganization. For
purposes of this representation, amounts paid by a Target Fund to dissenters,
amounts used by a Target Fund to pay its reorganization expenses, amounts paid
by a Target Fund to shareholders who receive cash or other property, and all
redemptions and distributions (except for regular, normal dividends) made by a
Target Fund immediately preceding the transfer will be included as assets of a
Target Fund held immediately prior to the transaction.
(d) Acquiring has no plan or intention to reacquire any of its stock issued in
the transaction.
(e) 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.
(f) Target Funds will distribute to their shareholders the stock of Acquiring
received pursuant to the Plan of Reorganization.
(g) 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.
(h) Following the Reorganization, 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.
(i) Target Funds, Acquiring and the shareholders of each Target Fund will pay
their respective expenses, if any, incurred in connection with the
Reorganization.
(j) 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.
(k) Target Funds and Acquiring qualify as regulated investment companies as
defined in section 368(a)(2)(F) of the Code.
(1) 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.
(m) Acquiring does not own, directly or indirectly, nor has it owned during
the past five years, directly or indirectly, any stock of either Target Fund.
(n) 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
Reorganization. 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
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.
(o) Target Funds are not under the jurisdiction of a court in a Title 11 or
similar case within the meaning of section 368(a)(3)(A).
(p) 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 Reorganization, for each Target Fund), have qualified
for the special tax treatment afforded RICs under the Code. After the
Reorganization, Acquiring intends to continue to so qualify.
(q) 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. 1.368-1
(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.
(r) 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. 1-3681 (e)(3) determined without regard to ss. 1.
368-1 (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 target'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.
(s) The aggregate value of the acquisitions, redemptions and distributions
discussed in paragraphs (q) and (r), 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.
(t) The Acquiring preferred stock to be received by Target Fund 1 preferred
shareholders in exchange for their Target Fund 1 preferred stock will be
identical to the Target Fund 1 preferred stock exchanged.
(u) The Acquiring preferred stock to be received by Target Fund 2 preferred
shareholders in exchange for their Target Fund 2 preferred stock will be
identical to the Target Fund 1 preferred stock exchanged.
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 solely for Acquiring voting stock and the assumption by
Acquiring of the liabilities of each Target Fund, as described above,
will qualify, in each instance, as a reorganization within the meaning of
ss. 368(a)(1)(C) of the Code. "Substantially all" means 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 of each Target Fund.
Acquiring and each Target Fund will be "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 their assets to Acquiring solely in exchange for
Acquiring voting common stock and the assumption by Acquiring of the
liabilities of each Target Fund (ss.ss. 357(a) and 361(a)).
(3) No gain or loss will be recognized by each Target Fund upon the
distribution of such Acquiring stock to Target Fund shareholders (ss.
361(c)).
(4) Acquiring will not recognize any gain or loss on the receipt of the
assets of the Target Funds, in each instance, in exchange for voting
shares of Acquiring (ss. 1032(a)).
(5) The basis of Target Fund assets in the hands of Acquiring will be the
same as the basis of those assets in the hands of the respective Target
Fund immediately prior to the Reorganization (ss.362(b)).
(6) Acquiring's holding period for Target Fund assets acquired will include
the period during which such assets were held by the respective Target
Fund (ss. 1223(2)).
(7) No gain or loss will be recognized by the shareholders of Target Funds
upon the receipt of common and non-qualified stock of Acquiring
(including fractional share interests to which they may be entitled)
solely in exchange for their Target Fund shares, as described above (ss.
354(a)(1)).
(8) The basis of the Acquiring shares (including fractional share interests
to which they may be entitled) received by Target Fund shareholders will
be the same as the basis of the Target Fund shares surrendered in
exchange, therefor (ss. 358(a)(1)).
(9) The holding period of the Acquiring shares (including fractional share
interests to which they may be entitled) received by Target Fund
shareholders in exchange for their Target Fund shares 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 shareholders on the date of the exchange (ss. 1223(l)).
(10) The payment of cash to Target Fund shareholders in lieu of fractional
shares of Acquiring will be treated as though the fractional shares were
distributed as part of the Reorganization and then redeemed by Acquiring.
The cash payment will be treated as a distribution in full payment for
the fractional shares deemed redeemed under ss. 302(a), with the result
that such Target Fund shareholders will have short-term or long-term
capital gain or loss to the extent that the cash distribution differs
from the basis allocable to their fractional shares.
(11) Pursuant to ss. 381(b) of the Code and ss. 1.381(a)-1 of the Income Tax
Regulations, the tax year of each Target Fund will end on the date of the
transfer.
(12) Acquiring will succeed to and take into account the items of Target
described in ss. 381(c) of the Code, subject to the provisions and
limitations specified in ss.ss. 381, 382, 383 and 384 of the Code and the
regulations thereunder.
No opinion is expressed about the federal income tax treatment of the
proposed transaction under other provisions of the Code and 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.
Except as expressly provided herein, no opinion is expressed or implied
concerning the tax consequences of any aspect of any transaction or item
discussed or referenced in this letter. Specifically, no opinion was
requested, and none is expressed, about whether Acquiring or each Target Fund
qualify as RICs that are taxable under Subchapter M, Part I of the Code.
This ruling is directed only to the taxpayer(s) requesting it. Section
6110(k)(3) of the Code provides that it may not be used or cited as precedent.
In accordance with the Power of Attorney on file with this office, a copy
of this letter is being sent to your authorized representative.
A copy of this letter must be attached to any income tax return to which
relevant.
Sincerely,
Associate Chief Counsel (Corporate)
By: /s/ Lewis K. Brickates
-----------------------------
Lewis K. Brickates
Assistant to Chief, Branch 2
