MUNIVEST
FUND II, INC.
[GRAPHIC OMITTED]
STRATEGIC
Performance
Semi-Annual Report
April 30, 1999
<PAGE>
MUNIVEST FUND II, INC.
The Benefits and
Risks of
Leveraging
MuniVest Fund II, Inc. utilizes leveraging to seek to enhance the yield and net
asset value of its Common Stock. However, these objectives cannot be achieved in
all interest rate environments. To leverage, the Fund issues Preferred Stock,
which pays dividends at prevailing short-term interest rates, and invests the
proceeds in long-term municipal bonds. The interest earned on these investments
is paid to Common Stock shareholders in the form of dividends, and the value of
these portfolio holdings is reflected in the per share net asset value of the
Fund's Common Stock. However, in order to benefit Common Stock shareholders, the
yield curve must be positively sloped; that is, short-term interest rates must
be lower than long-term interest rates. At the same time, a period of generally
declining interest rates will benefit Common Stock shareholders. If either of
these conditions change, then the risks of leveraging will begin to outweigh the
benefits.
To illustrate these concepts, assume a fund's Common Stock capitalization of
$100 million and the issuance of Preferred Stock for an additional $50 million,
creating a total value of $150 million available for investment in long-term
municipal bonds. If prevailing short-term interest rates are approximately 3%
and long-term interest rates are approximately 6%, the yield curve has a
strongly positive slope. The fund pays dividends on the $50 million of Preferred
Stock based on the lower short-term interest rates. At the same time, the fund's
total portfolio of $150 million earns the income based on long-term interest
rates. Of course, increases in short-term interest rates would reduce (and even
eliminate) the dividends on the Common Stock.
In this case, the dividends paid to Preferred Stock share holders are
significantly lower than the income earned on the fund's long-term investments,
and therefore the Common Stock share-holders are the beneficiaries of the
incremental yield. However, if short-term interest rates rise, narrowing the
differential between short-term and long-term interest rates, the incremental
yield pickup on the Common Stock will be reduced or eliminated completely. At
the same time, the market value on the fund's Common Stock (that is, its price
as listed on the New York Stock Exchange) may, as a result, decline.
Furthermore, if long-term interest rates rise, the Common Stock's net asset
value will reflect the full decline in the price of the portfolio's investments,
since the value of the fund's Preferred Stock does not fluctuate. In addition to
the decline in net asset value, the market value of the fund's Common Stock may
also decline.
As a part of its investment strategy, the Fund may invest in certain securities
whose potential income return is inversely related to changes in a floating
interest rate ("inverse floaters"). In general, income on inverse floaters will
decrease when short-term interest rates increase and increase when short-term
interest rates decrease. Investments in inverse floaters may be characterized as
derivative securities and may subject the Fund to the risks of reduced or
eliminated interest payments and losses of invested principal. In addition,
inverse floaters have the effect of providing investment leverage and, as a
result, the market value of such securities will generally be more volatile than
that of fixed-rate, tax-exempt securities. To the extent the Fund invests in
inverse floaters, the market value of the Fund's portfolio and the net asset
value of the Fund's shares may also be more volatile than if the Fund did not
invest in these securities.
Managed Dividend
Policy
The Fund's dividend policy is to distribute substantially all of its net
investment income to its shareholders on a monthly basis. However, in order to
provide shareholders with a more consistent yield to the current trading price
of shares of Common Stock of the Fund, the Fund may at times pay out less than
the entire amount of net investment income earned in any particular month and
may at times in any particular month pay out such accumulated but undistributed
income in addition to net investment income earned in that month. As a result,
the dividends paid by the Fund for any particular month may be more or less than
the amount of net investment income earned by the Fund during such month. The
Fund's current accumulated but undistributed net investment income, if any, is
disclosed in the Statement of Assets, Liabilities and Capital, which comprises
part of the financial information included in this report.
<PAGE>
MuniVest Fund II, Inc., April 30, 1999
DEAR SHAREHOLDER
For the six months ended April 30, 1999, the Common Stock of MuniVest Fund II,
Inc. earned $0.410 per share income dividends, which included earned and unpaid
dividends of $0.066. This represents a net annualized yield of 5.67%, based on a
month-end per share net asset value of $14.60. Over the same period, the total
investment return on the Fund's Common Stock was +1.19%, based on a change in
per share net asset value from $14.85 to $14.60, and assuming reinvestment of
$0.415 per share income dividends.
For the six months ended April 30, 1999, the Fund's Auction Market Preferred
Stock had an average yield of 3.53% for Series A, 3.43% for Series B and 3.05%
for Series C.
The Municipal Market Environment
During the six months ended April 30, 1999, long-term bond yields generally
moved higher. From November 1998 through mid-January 1999, long-term bond yields
traded in a relatively narrow range. However, during February, a number of
economic indicators were released that suggested that economic growth in the
United States would likely remain strong throughout most of 1999. Consequently,
long-term US Treasury bond yields rose more than 60 basis points (0.60%) to
5.70% by early March. During the remainder of the six-month period, US Treasury
bond yields traded between 5.50% and 5.70% as the lack of inflationary pressures
offset much of the concerns generated by continued strong economic growth.
During most of the period, long-term, uninsured tax-exempt bond yields exhibited
far less volatility and were largely stable.
Long-term municipal bond yields rose just 5 basis points to 5.29% at the end of
April 1999, as measured by the Bond Buyer Revenue Bond Index.
In recent months, the tax-exempt market was better able to withstand much of the
upward pressure on bond yields because of its stronger technical position. While
the continued positive inflationary environment limited some of the recent
increases in taxable bond yields, a deteriorating supply/demand position helped
push taxable bond yields significantly higher than municipal bond yields. Much
of the US Treasury bond market's underperformance in recent months can be
attributed to the large amounts of taxable corporate issuance. Large taxable
corporate underwritings reduced the demand for US Government securities in
recent months, pushing US Treasury bond yields higher.
On the other hand, the tax-exempt bond market enjoyed only limited new-issue
supply. During the six months ended April 30, 1999, more than $123 billion in
new long-term tax-exempt securities was under written, a decline of 10% compared
to the same period a year ago. Municipalities issued less than $60 billion in
long-term tax-exempt securities during the three months ended April 30, 1999, a
decline of 25% compared to the April 30, 1998 quarter. More recently, the rate
of new tax-exempt issuance has declined even further. During April 1999, just
over $15 billion in long-term tax-exempt securities was marketed, a decline of
over 33% compared to April 1998 levels. As municipal bond yields fell and
stabilized in recent quarters, the ability of municipalities to refinance
existing higher-couponed debt declined. This led to a significant decrease in
refunding issuance and an overall drop in new municipal bond supply. When
coupled with ongoing, moderate retail and institutional demand, the tax-exempt
bond market was able to avoid much of the yield volatility exhibited by US
Treasury securities.
Looking ahead, the expected combination of moderate economic growth in the
United States and continued negligible inflation suggests a relatively stable
interest rate environment. However, in recent years, bond yields reached their
annual peaks in early May and declined for the remainder of the year. A
meaningful decline in fixed-income bond yields would require either evidence of
a significant slowdown in the US economy or the resumption of concerns regarding
renewed shocks to the world's economic system. Currently, neither condition
exists or seems likely in the immediate future. In our opinion, this suggests a
continuation of the narrow trading ranges seen in recent months.
Portfolio Strategy
During the last several months, we adopted a more neutral investment strategy,
since indicators pointed to a continuation of healthy domestic economic growth
and benign inflation. In addition, we believed that long-term tax-exempt bond
yields would continue to trade in a relatively narrow range, centered around
present levels. Consequently, we focused on income-producing securities rather
than those issues with the potential for capital gains. Should the tax-exempt
bond market perform as expected, coupon income will be the more important
component of the Fund's performance. MuniVest Fund II, Inc. remained fully
invested for most of the past several months. We expect to maintain this
position going forward in order to seek to enhance shareholder income.
Short-term tax-exempt yields exhibited considerable volatility in recent months.
Interest rates paid to the Fund's Preferred Stock shareholders traded below 3%
in December 1998, reflecting heightened investor demand at year-end. Current
short-term interest rate levels reflect tax season-related pressures, which we
expect to abate soon. During the six-month period ended April 30, 1999,
leveraging generated a significant incremental yield to the Fund's Common Stock
shareholders. Because we believe that the Federal Reserve Board's monetary
policy is likely to remain in a narrow range for the remainder of the year, we
expect short-term tax-exempt interest rates to remain at, or slightly below,
current levels. However, should the spread between short-term and long-term
interest rates narrow, the benefits of the leverage will decline and, as a
result, reduce the yield to the Fund's Common Stock. (For a complete explanation
of the benefits and risks of leveraging, see page 1 of this report to
shareholders.)
In Conclusion
We appreciate your ongoing interest in MuniVest Fund II, Inc., and we look
forward to serving your investment needs in the months and years ahead.
Sincerely,
/s/ Terry K. Glenn
Terry K. Glenn
President
/s/ Vincent R. Giordano
Vincent R. Giordano
Senior Vice President
/s/ Fred K. Stuebe
Fred K. Stuebe
Vice President and Portfolio Manager
June 3, 1999
================================================================================
After more than 20 years of service, Arthur Zeikel recently retired as Chairman
of Merrill Lynch Asset Management, L.P. (MLAM). Mr. Zeikel served as President
of MLAM from 1977 to 1997 and as Chairman since December 1997. Mr. Zeikel is one
of the country's most respected leaders in asset management and presided over
the growth of Merrill Lynch's asset management business. During his tenure,
client assets under management grew from $300 million to over $500 billion. Mr.
Zeikel will remain on MuniVest Fund II, Inc.'s Board of Directors. We are
pleased to announce that Terry K. Glenn has been elected President and Director
of the Fund. Mr. Glenn has held the position of Executive Vice President of MLAM
since 1983.
Mr. Zeikel's colleagues at MLAM join the Fund's Board of Directors in wishing
him well in his retirement from Merrill Lynch and are pleased that he will
continue as a member of the Fund's Board of Directors.
================================================================================
YEAR 2000 ISSUES
Many computer systems were designed using only two digits to designate years.
These systems may not be able to distinguish the Year 2000 from the Year 1900
(commonly known as the "Year 2000 Problem"). The Fund could be adversely
affected if the computer systems used by the Fund's management or other Fund
service providers do not properly address this problem before January 1, 2000.
The Fund's management expects to have addressed this problem before then, and
does not anticipate that the services it provides will be adversely affected.
The Fund's other service providers have told the Fund's management that they
also expect to resolve the Year 2000 Problem, and the Fund's management will
continue to monitor the situation as the Year 2000 approaches. However, if the
problem has not been fully addressed, the Fund could be negatively affected. The
Year 2000 Problem could also have a negative impact on the securities in which
the Fund invests and this could hurt the Fund's investment returns.
2 & 3
<PAGE>
MuniVest Fund II, Inc., April 30, 1999
SCHEDULE OF INVESTMENTS (in Thousands)
<TABLE>
<CAPTION>
S&P Moody's Face Value
STATE Ratings Ratings Amount Issue (Note 1a)
==================================================================================================================================
<S> <C> <C> <C> <C> <C>
Alabama--2.4% AAA NR* $ 2,500 Jefferson County, Alabama, Sewer Revenue Bonds, RIB,
Series 124, 6.39% due 2/01/2036 (c)(e) $ 2,594
NR* Aaa 7,250 Jefferson County, Alabama, Sewer Revenue Bonds, RITR,
Series 7, 6.32% due 2/01/2027 (e) 7,520
==================================================================================================================================
Arizona--1.8% A1+ P1 4,600 Coconino County, Arizona, Pollution Control Corporation
Revenue Bonds (Arizona Public Service--Navajo Project),
VRDN, AMT, Series A, 4.25% due 10/01/2029 (a) 4,600
AAA Aaa 2,315 Maricopa County, Arizona, GO, Unified School District No. 3
Refunding Bonds (Tempe Elementary), 7.50% due 7/01/2010 (c) 2,911
==================================================================================================================================
Colorado--2.3% NR* Aa2 1,285 Colorado HFA, Revenue Bonds (S/F Program), AMT, Senior
Series F, 8.625% due 6/01/2025 1,373
BBB+ Baa1 5,940 Denver, Colorado, City and County Airport Revenue Bonds, AMT,
Series C, 6.75% due 11/15/2002 6,407
A1+ VMIG1+ 2,100 Moffat County, Colorado, PCR, Refunding (Pacificorp Projects),
VRDN, 4.15% due 5/01/2013 (a)(b) 2,100
==================================================================================================================================
Delaware--0.6% AAA Aaa 2,250 Delaware Transportation Authority, Transportation System
Revenue Bonds (Senior), 7% due 7/01/2004 (c)(g) 2,612
==================================================================================================================================
Florida--2.5% BBB Baa1 3,655 Escambia County, Florida, PCR (Champion International
Corporation Project), AMT, 6.90% due 8/01/2022 4,034
AAA Aaa 6,490 Florida State Board of Education, Lottery Revenue Bonds, Series
A, 5.125% due 7/01/2012 (c) 6,743
==================================================================================================================================
Georgia--5.0% Georgia Municipal Electric Authority, Power Revenue Refunding
Bonds (Crossover):
A A3 6,000 Series W, 6.60% due 1/01/2018 7,035
A A3 11,035 Series Y, 6.50% due 1/01/2017 12,862
A A3 1,250 Georgia Municipal Electric Authority, Power Revenue Refunding
Bonds, Series X, 6.50% due 1/01/2020 1,456
==================================================================================================================================
Hawaii--2.2% A A 2,000 Hawaii State Department of Budget and Finance, Special Purpose
Revenue Bonds, 6.25% due 7/01/2021 2,168
AAA Aaa 7,800 Honolulu, Hawaii, City and County, Wastewater System Revenue
Refunding Bonds, Second Bond Resolution (Junior Series), 4.50%
due 7/01/2028 (c) 7,006
==================================================================================================================================
Idaho--0.6% NR* Aaa 2,255 Idaho Housing Agency, S/F Mortgage Revenue Refunding Bonds,
AMT, Series E-2, 6.90% due 1/01/2027 2,409
==================================================================================================================================
Illinois--16.3% Chicago, Illinois, GO, Refunding Bonds (Project and
Refunding) (c):
AAA Aaa 6,550 5.25% due 1/01/2028 6,540
AAA Aaa 5,000 Series A, 5.375% due 1/01/2024 5,083
A1 NR* 2,500 Chicago, Illinois, GO, Refunding, RIB, Series 126, 6.38% due
1/01/2034 (c)(e) 2,566
AA- Aa3 6,925 Chicago, Illinois, Gas Supply Revenue Bonds (Peoples Gas),
Series A, 6.875% due 3/01/2015 7,521
AAA NR* 2,075 Chicago, Illinois, Sales Tax Revenue Bonds, RIB, Series 92,
6.355% due 1/01/2030 (c)(e) 2,130
NR* Aaa 3,000 Chicago, Illinois, Sales Tax Revenue Bonds, RITR, Series 24,
6.32% due 1/01/2027 (e) 3,099
AAA Aaa 10,000 Cook County, Illinois, GO, Refunding, Series B, 5.375% due
11/15/2018 (d) 10,140
AA Aa1 2,550 Illinois HDA, Residential Mortgage Revenue Bonds, AMT,
6.874% due 2/01/2018 2,697
A+ A1 6,900 Illinois HDA, Revenue Refunding Bonds (M/F Housing),
Series A, 7.375% due 7/01/2017 7,504
A+ A1 6,500 Illinois HDA, Revenue Refunding Bonds (M/F Program), Series
5, 6.75% due 9/01/2023 7,047
Regional Transportation Authority, Illinois, Revenue Bonds,
Series A:
AAA Aaa 1,500 7.20% due 11/01/2020 (b) 1,915
AAA Aaa 7,000 6.70% due 11/01/2021 (c) 8,564
Regional Transportation Authority, Illinois, Revenue Bonds,
Series C (c):
AAA Aaa 2,500 7.75% due 6/01/2020 3,385
AAA Aaa 1,000 7.10% due 6/01/2025 1,142
==================================================================================================================================
Indiana--11.4% Indiana Bond Bank Revenue Bonds (State Revolving Fund
Program), Series A:
AAA NR* 2,750 6.875% due 2/01/2012 3,139
AAA NR* 5,750 6.75% due 2/01/2017 6,494
AA Aa3 2,500 Indiana Health Facility Financing Authority, Hospital Revenue
Refunding Bonds (Clarian Health Partners Inc.), Series A, 6%
due 2/15/2021 2,680
NR* Aaa 5,545 Indiana State, HFA, S/F Mortgage Revenue Refunding Bonds,
Series A, 6.80% due 1/01/2017 (f) 5,843
Indiana Transportation Finance Authority, Highway Revenue
Bonds, Series A:
AA- Aa2 2,000 7.25% due 6/01/2015 2,499
AA- Aa3 3,775 6.80% due 12/01/2016 4,588
Indianapolis, Indiana, Local Public Improvement Bond Bank
Revenue Bonds, Series D:
AA NR* 8,750 6.75% due 2/01/2014 10,421
AA NR* 11,800 6.75% due 2/01/2020 12,936
==================================================================================================================================
Louisiana--2.9% NR* A3 2,000 Lake Charles, Louisiana, Harbor and Terminal District, Port
Facilities Revenue Refunding Bonds (Trunkline Long
Company Project), 7.75% due 8/15/2022 2,257
B- NR* 10,000 Port New Orleans, Louisiana, IDR, Refunding (Continental Grain
Company Project), 6.50% due 1/01/2017 9,970
==================================================================================================================================
</TABLE>
Portfolio
Abbreviations
To simplify the listings of MuniVest 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 and at right.
ACES(SM) Adjustable Convertible Extendable Securities
AMT Alternative Minimum Tax (subject to)
GO General Obligation Bonds
HDA Housing Development Authority
HFA Housing Finance Agency
IDA Industrial Development Authority
IDR Industrial Development Revenue Bonds
M/F Multi-Family
PCR Pollution Control Revenue Bonds
RIB Residual Interest Bonds
RITR Residual Interest Trust Receipts
S/F Single-Family
VRDN Variable Rate Demand Notes
4 & 5
<PAGE>
MuniVest Fund II, Inc., April 30, 1999
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<TABLE>
<CAPTION>
S&P Moody's Face Value
STATE Ratings Ratings Amount Issue (Note 1a)
==================================================================================================================================
<S> <C> <C> <C> <C> <C>
Maine--1.5% AA Aa2 $ 6,085 Maine State Housing Authority, Mortgage Purchase Revenue Bonds,
AMT, Series C-2, 6.875% due 11/15/2023 $ 6,581
==================================================================================================================================
Maryland--0.8% A- NR* 2,000 Maryland State Energy Financing Administration, Solid Waste
Disposal Revenue Bonds, Limited Obligation (Wheelabrator Water
Projects), AMT, 6.45% due 12/01/2016 2,179
AAA Aaa 1,000 Maryland State Health and Higher Educational Facilities Authority
Revenue Bonds (University of Maryland Medical Systems), Series B,
7% due 7/01/2022 (c) 1,264
==================================================================================================================================
Massachusetts--2.0% AA- Aa3 1,000 Massachusetts State College Building Authority Project, Revenue
Refunding Bonds, Senior Series A, 7.50% due 5/01/2011 1,268
A A1 6,000 Massachusetts State Water Resource Authority Revenue Bonds,
Series A, 6.50% due 7/15/2019 7,060
==================================================================================================================================
Michigan--6.4% AAA Aaa 2,500 Avondale, Michigan, School District, GO, Refunding, 4.75% due
5/01/2022 (b) 2,363
AAA Aaa 1,650 Holly, Michigan, Area School District, GO, Refunding, 4.75% due
5/01/2025 (c) 1,549
AA Aa2 5,000 Michigan State Building Authority, Revenue Refunding Bonds
(Facilities Program), Series 1, 4.75% due 10/15/2021 4,716
AAA Aaa 2,375 Michigan State, HDA, Rental Housing Revenue Bonds, AMT,
Series A, 5.30% due 10/01/2037 (d) 2,359
AA- NR* 2,355 Michigan State, HDA, Rental Housing Revenue Refunding
Bonds, Series A, 6.65% due 4/01/2023 2,515
AA+ NR* 2,590 Michigan State, HDA, Revenue Bonds, Series A, 6.875% due
6/01/2023 2,662
AA+ NR* 4,260 Michigan State, HDA, Revenue Refunding Bonds, AMT, Series
D, 6.85% due 6/01/2026 (f) 4,493
BBB Baa2 3,500 Michigan State Hospital Finance Authority, Revenue Refunding
Bonds (Detroit Medical Center Obligation Group), Series A,
6.50% due 8/15/2018 3,607
AAA Aaa 2,500 Plymouth--Canton, Michigan, Community School District,
GO, 4.75% due 5/01/2023 (h) 2,360
AA VMIG1+ 300 Royal Oak, Michigan, Hospital Finance Authority, Hospital
Revenue Bonds (William Beaumont Hospital), VRDN, Series
L, 4.20% due 1/01/2027 (a) 300
A1+ VMIG1+ 500 University of Michigan, University Hospital Revenue Bonds,
VRDN, Series A, 4.15% due 12/01/2027 (a) 500
==================================================================================================================================
Minnesota--2.0% AAA NR* 1,780 Minnesota Agriculture and Economic Development Board,
Health Care Revenue Refunding Bonds (Benedictine Health),
Series A, 5% due 2/15/2010 (d) 1,834
Minnesota State, HFA, S/F Mortgage Revenue Bonds, AMT:
AA+ Aa2 2,495 Series L, 6.70% due 7/01/2020 2,650
AA+ Aa2 3,675 Series M, 6.70% due 7/01/2026 3,903
==================================================================================================================================
Nebraska--1.1% AAA Aaa 2,100 American Public Energy Agency, Nebraska, Gas Supply Revenue
Bonds (Nebraska Public Gas Agency Project), Series A, 5.25%
due 6/01/2009 (b) 2,220
AAA Aaa 2,200 Lancaster County, Nebraska, Hospital Authority No. 1,
Hospital Revenue Bonds (Bryan Memorial Hospital Project),
6.70% due 6/01/2022 (d)(i) 2,484
==================================================================================================================================
Nevada--3.1% AAA Aaa 2,500 Clark County, Nevada, School District, GO, 6.75% due
12/15/2004 (c)(g) 2,874
A A2 5,000 Henderson, Nevada, Health Care Facilities Revenue Bonds
(Catholic Healthcare West), 5.375% due 7/01/2026 4,898
AAA Aaa 1,305 Nevada Housing Division, S/F Program, AMT, Senior Series E,
7% due 10/01/2019 (f) 1,402
AAA Aaa 2,500 Washoe County, Nevada, Gas Facilities Revenue Bonds (Sierra
Pacific Power Company), AMT, 6.65% due 12/01/2017 (b) 2,739
A1+ P1 1,400 Washoe County, Nevada, Water Facility Revenue Bonds (Sierra
Pacific Power Company Project), AMT, VRDN, 4.30% due
12/01/2020 (a) 1,400
==================================================================================================================================
New Jersey--1.6% AAA Aaa 3,000 New Jersey Health Care Facilities Financing Authority, Revenue
Refunding Bonds (Saint Barnabas Health), Series B, 5.25% due
7/01/2013 (d) 3,119
AAA Aaa 3,435 New Jersey State Housing and Mortgage Finance Agency Revenue
Bonds (Home Buyer), AMT, Series M, 6.95% due 10/01/2022 (d) 3,742
==================================================================================================================================
New York--15.5% AAA Aaa 2,500 Long Island Power Authority, New York, Electric System Revenue
Bonds, Series A, 5.50% due 12/01/2029 (d) 2,578
AAA Aaa 2,500 Metropolitan Transportation Authority, New York, Commuter
Facilities Revenue Refunding Bonds (Service Contract), Series
Q, 5.125% due 7/01/2014 (b) 2,567
AAA Aaa 2,000 Metropolitan Transportation Authority, New York, Dedicated
Tax Fund Revenue Bonds, Series A, 5.25% due 4/01/2026 (d) 2,026
AAA Aaa 2,840 Metropolitan Transportation Authority, New York, Transit
Facilities Revenue Refunding Bonds, Series B, 4.75% due
7/01/2026 (c) 2,671
AA Aa2 5,000 Municipal Assistance Corporation for City of New York,
Revenue Refunding Bonds, Series O, 5.25% due 7/01/2008 5,345
A- A3 2,500 New York City, New York, GO, Refunding, Series C, 5.875%
due 2/01/2016 2,694
A- Aaa 4,000 New York City, New York, GO, Series B, 7.25% due
8/15/2004 (g) 4,665
NR* Aaa 6,250 New York City, New York, Municipal Water Finance Authority,
Water and Sewer System Revenue Bonds, RITR, Series 10, 6.32%
due 6/15/2026 (e) 6,567
AAA Aaa 2,250 New York City, New York, Municipal Water Finance Authority,
Water and Sewer System Revenue Bonds, Series B, 5.50% due
6/15/2027 (d) 2,350
A A1 5,000 New York City, New York, Municipal Water Finance Authority,
Water and Sewer System Revenue Refunding Bonds, Series B,
5.25% due 6/15/2029 5,010
New York City, New York, Transitional Finance Authority
Revenue Bonds (Future Tax Secured):
AA Aa3 7,000 Series B, 4.75% due 11/01/2023 6,585
AA Aa3 3,595 Series C, 5.25% due 5/01/2013 3,754
AA Aa3 5,000 Series C, 4.75% due 5/01/2023 4,707
New York State Dormitory Authority Revenue Bonds (Mental
Health Services Facilities Improvement) (b):
AAA Aaa 3,500 Series F, 4.50% due 8/15/2028 3,148
AAA Aaa 1,550 Series G, 4.50% due 8/15/2018 1,437
NR* NR* 4,000 New York State Energy Research and Development Authority,
Gas Facilities Revenue Bonds, RITR, Series 9, 6.57% due
1/01/2021 (e) 4,340
AAA Aaa 3,000 New York State Urban Development Corporation Revenue
Bonds (Correctional Facilities Service Contract), Series B, 5.25%
due 1/01/2014 (b) 3,128
AAA Aaa 2,500 Triborough Bridge and Tunnel Authority, New York, Special
Obligation Revenue Refunding Bonds, Series A, 5.125% due
1/01/2015 (d) 2,563
==================================================================================================================================
Pennsylvania--0.8% NR* VMIG1+ 855 Allegheny County, Pennsylvania, Hospital Development
Authority Revenue Bonds (Presbyterian University Hospital),
ACES, Series B-3, 4.05% due 3/01/2018 (a) 855
NR* Aaa 2,360 Montgomery County, Pennsylvania, GO, 5.40% due 9/15/2019 2,424
==================================================================================================================================
</TABLE>
6 & 7
<PAGE>
MuniVest Fund II, Inc., April 30, 1999
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<TABLE>
<CAPTION>
S&P Moody's Face Value
STATE Ratings Ratings Amount Issue (Note 1a)
==================================================================================================================================
<S> <C> <C> <C> <C> <C>
South Carolina--1.0% A- A2 $ 3,000 Richland County, South Carolina, Solid Waste Disposal
Facilities Revenue Bonds (Union Camp Corporation Project),
AMT, Series B, 7.125% due 9/01/2021 $ 3,237
NR* Aa2 880 South Carolina Housing Finance and Development Authority,
Mortgage Revenue Bonds, AMT, Series A, 6.70% due
7/01/2027 942
==================================================================================================================================
Tennessee--1.0% AAA Aaa 4,500 Metropolitan Government, Nashville and Davidson County,
Tennessee, Water and Sewer Revenue Refunding Bonds, Series A,
4.75% due 1/01/2022 (c) 4,272
==================================================================================================================================
Texas--4.5% AAA Aaa 2,290 Austin, Texas, Revenue Bonds, 4.62%** due 5/15/2013 1,149
AA- Aa3 2,500 Guadalupe--Blanco River Authority, Texas, Sewage and Solid
Waste Disposal Facility Revenue Bonds (E. I. du Pont de Nemours
and Company Project), AMT, 6.40% due 4/01/2026 2,730
Harris County, Texas, Health Facilities Development Corporation,
Hospital Revenue Bonds (Memorial Hospital System Project),
Series A (g):
NR* NR* 1,500 6.60% due 6/01/2004 1,698
NR* NR* 1,500 6.625% due 6/01/2004 1,700
NR* Aa3 5,000 Harris County, Texas, Health Facilities Development Corporation
Revenue Bonds, RITR, Series 6, 6.995% due 12/01/2027 (e) 5,453
NR* Aaa 6,000 Houston, Texas, Water and Sewer System Revenue Bonds, RITR,
Series 5, 6.32% due 12/01/2027 (c)(e) 6,293
==================================================================================================================================
Virginia--1.9% A- A2 3,115 Isle Wight County, Virginia, IDA, Solid Waste Disposal Facilities
Revenue Bonds (Union Camp Corporation Project), AMT, 6.55%
due 4/01/2024 3,363
BBB- Baa3 5,000 Pocahontas Parkway Association, Virginia, Toll Road Revenue
Bonds, Senior Series A, 5.50% due 8/15/2028 4,928
==================================================================================================================================
Washington--3.4% Washington State Public Power Supply System, Revenue
Refunding Bonds (Nuclear Project No. 1), Series B:
AA- Aa1 4,950 7.25% due 7/01/2009 5,848
AA- Aa1 5,000 7.125% due 7/01/2016 6,240
AAA Aaa 1,900 Washington State Public Power Supply System, Revenue Refunding
Bonds (Nuclear Project No. 3), Series B, 7.125% due
7/01/2016 (d) 2,372
==================================================================================================================================
Wisconsin--1.0% AA Aa2 1,975 Wisconsin Housing and Economic Development Authority, Home
Ownership Revenue Refunding Bonds, AMT, Series D, 6.65% due
7/01/2025 2,095
NR* A3 2,000 Wisconsin State Health and Educational Facilities Authority,
Revenue Refunding Bonds (Saint Claire Hospital Project), 7% due
2/15/2002 (g) 2,203
==================================================================================================================================
Wyoming--2.4% BBB- Baa2 5,000 Sweetwater County, Wyoming, Solid Waste Disposal Revenue Bonds
(FMC Corp. Project), AMT, Series B, 6.90% due 9/01/2024 5,489
AA Aa2 1,500 Wyoming Community Development Authority Revenue Bonds, S/F
Mortgage, AMT, Series H, 7.10% due 6/01/2012 (f) 1,614
AA Aa2 3,105 Wyoming Community Development Authority, Revenue Refunding
Bonds, S/F Mortgage, Series B, 6.70% due 6/01/2017 3,199
==================================================================================================================================
Total Investments (Cost--$395,172)--98.0% 417,270
Other Assets Less Liabilities--2.0% 8,328
--------
Net Assets--100.0% $425,598
========
==================================================================================================================================
</TABLE>
(a) The interest rate is subject to change periodically based upon prevailing
market rates. The interest rate shown is the rate in effect at April 30,
1999.
(b) AMBAC Insured.
(c) FGIC Insured.
(d) MBIA Insured.
(e) The interest rate is subject to change periodically and inversely based
upon prevailing market rates. The interest rate shown is the rate in
effect at April 30, 1999.
(f) FHA Insured.
(g) Prerefunded.
(h) FSA Insured.
(i) Escrowed to maturity.
* Not Rated.
** Represents a zero coupon bond; the interest rate shown is the effective
yield at the time of purchase by the Fund.
+ Highest short-term rating by Moody's Investors Service, Inc.
See Notes to Financial Statements.
Quality Profile
The quality ratings of securities in the Fund as of April 30, 1999 were as
follows:
- --------------------------------------------------------------------------------
Percent of
S&P Rating/Moody's Rating Net Assets
- --------------------------------------------------------------------------------
AAA/Aaa ............................................................. 39.9%
AA/Aa ............................................................... 28.7
A/A ................................................................. 17.3
BBB/Baa ............................................................. 5.7
B/B ................................................................. 2.3
NR (Not Rated) ...................................................... 1.8
Other+ .............................................................. 2.3
- --------------------------------------------------------------------------------
+ Temporary investments in short-term municipal securities.
8 & 9
<PAGE>
MuniVest Fund II, Inc., April 30, 1999
STATEMENT OF ASSETS, LIABILITIES AND CAPITAL
<TABLE>
<CAPTION>
As of April 30, 1999
============================================================================================================================
<S> <C> <C> <C>
Assets: Investments, at value (identified cost--$395,171,529) (Note 1a) ... $417,269,635
Cash .............................................................. 82,166
Receivables:
Securities sold ................................................. $ 8,318,591
Interest ........................................................ 7,419,985 15,738,576
------------
Prepaid expenses and other assets ................................. 20,267
------------
Total assets ...................................................... 433,110,644
------------
============================================================================================================================
Liabilities: Payables:
Securities purchased ............................................ 7,005,877
Dividends to shareholders (Note 1e) ............................. 299,882
Investment adviser (Note 2) ..................................... 186,923 7,492,682
------------
Accrued expenses and other liabilities ............................ 19,674
------------
Total liabilities ................................................. 7,512,356
------------
============================================================================================================================
Net Assets: Net assets ........................................................ $425,598,288
============
============================================================================================================================
Capital: Capital Stock (200,000,000 shares authorized) (Note 4):
Preferred Stock, par value $.05 per share (5,400 shares
of AMPS* issued and outstanding at $25,000 per share
liquidation preference) ......................................... $135,000,000
Common Stock, par value $.10 per share (19,907,055
shares issued and outstanding) .................................. $ 1,990,705
Paid-in capital in excess of par .................................. 277,543,484
Undistributed investment income--net .............................. 2,887,219
Accumulated realized capital losses on investments--net
(Note 5) .......................................................... (13,921,226)
Unrealized appreciation on investments--net ....................... 22,098,106
------------
Total--Equivalent to $14.60 net asset value per share of
Common Stock (market price--$13.8125) ............................. 290,598,288
------------
Total capital ..................................................... $425,598,288
============
============================================================================================================================
</TABLE>
* Auction Market Preferred Stock.
See Notes to Financial Statements.
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
For the Six Months Ended April 30, 1999
============================================================================================================================
<S> <C> <C> <C>
Investment Interest and amortization of premium and discount earned .......... $ 11,940,760
Income (Note 1d):
============================================================================================================================
Expenses: Investment advisory fees (Note 2) ................................. $ 1,068,632
Commission fees (Note 4) .......................................... 164,762
Accounting services (Note 2) ...................................... 44,388
Transfer agent fees ............................................... 39,221
Professional fees ................................................. 37,155
Custodian fees .................................................... 15,433
Printing and shareholder reports .................................. 12,538
Listing fees ...................................................... 11,700
Directors' fees and expenses ...................................... 9,418
Pricing fees ...................................................... 7,551
Other ............................................................. 19,729
-----------
Total expenses .................................................... 1,430,527
------------
Investment income--net ............................................ 10,510,233
------------
============================================================================================================================
Realized & Realized gain on investments--net ................................. 1,710,802
Unrealized Gain Change in unrealized appreciation on investments--net ............. (6,737,404)
(Loss) on ------------
Investments--Net Net Increase in Net Assets Resulting from Operations .............. $ 5,483,631
(Notes 1b, 1d & 3): ============
============================================================================================================================
</TABLE>
See Notes to Financial Statements.
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the Six For the
Months Ended Year Ended
April 30, October 31,
Increase (Decrease) in Net Assets: 1999 1998
============================================================================================================================
<S> <C> <C> <C>
Operations: Investment income--net ............................................ $ 10,510,233 $ 21,617,028
Realized gain on investments--net ................................. 1,710,802 9,035,426
Change in unrealized appreciation on investments--net ............. (6,737,404) (3,923,226)
------------- ------------
Net increase in net assets resulting from operations .............. 5,483,631 26,729,228
------------- ------------
============================================================================================================================
Dividends to Investment income--net:
Shareholders Common Stock .................................................... (8,261,727) (16,701,482)
(Note 1e): Preferred Stock ................................................. (2,244,366) (4,752,270)
------------- ------------
Net decrease in net assets resulting from dividends to shareholders (10,506,093) (21,453,752)
------------- ------------
============================================================================================================================
Net Assets: Total increase (decrease) in net assets ........................... (5,022,462) 5,275,476
Beginning of period ............................................... 430,620,750 425,345,274
------------- ------------
End of period* .................................................... $ 425,598,288 $430,620,750
============= ============
============================================================================================================================
* Undistributed investment income--net .............................. $ 2,887,219 $ 2,883,079
============= ============
============================================================================================================================
</TABLE>
See Notes to Financial Statements.
10 & 11
<PAGE>
MuniVest Fund II, Inc., April 30, 1999
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
For the
Six
The following per share data and ratios have been derived Months
from information provided in the financial statements. Ended For the Year Ended October 31,
April 30, ---------------------------------------------
Increase (Decrease) in Net Asset Value: 1999 1998 1997 1996 1995
=========================================================================================================================
<S> <C> <C> <C> <C> <C>
Per Share
Operating
Performance:
Net asset value, beginning of period ...................... $ 14.85 $ 14.59 $ 14.12 $ 13.93 $ 12.56
--------- --------- --------- --------- ---------
Investment income--net .................................... .54 1.08 1.13 1.10 1.11
Realized and unrealized gain (loss) on investments--net ... (.26) .26 .46 .18 1.37
--------- --------- --------- --------- ---------
Total from investment operations .......................... .28 1.34 1.59 1.28 2.48
--------- --------- --------- --------- ---------
Less dividends to Common Stock shareholders from
investment income--net .................................. (.42) (.84) (.88) (.85) (.85)
--------- --------- --------- --------- ---------
Effect of Preferred Stock activity:
Dividends to Preferred Stock shareholders from
investment income--net ................................ (.11) (.24) (.24) (.24) (.26)
--------- --------- --------- --------- ---------
Net asset value, end of period ............................ $ 14.60 $ 14.85 $ 14.59 $ 14.12 $ 13.93
========= ========= ========= ========= =========
Market price per share, end of period ..................... $ 13.8125 $ 14.4375 $ 13.875 $ 12.625 $ 12.125
========= ========= ========= ========= =========
=========================================================================================================================
Total Investment
Return: **
Based on market price per share ........................... (1.53%)+ 10.37% 17.32% 11.43% 25.68%
========= ========= ========= ========= =========
Based on net asset value per share ........................ 1.19%+ 7.96% 10.31% 8.47% 19.27%
========= ========= ========= ========= =========
=========================================================================================================================
Ratios to Average
Net Assets:***
Expenses .................................................. .67%* .66% .68% .68% .69%
========= ========= ========= ========= =========
Investment income--net .................................... 4.92%* 5.06% 5.30% 5.30% 5.55%
========= ========= ========= ========= =========
=========================================================================================================================
Supplemental
Data:
Net assets, net of Preferred Stock, end of period
(in thousands) .......................................... $ 290,598 $ 295,621 $ 290,345 $ 281,036 $ 277,230
========= ========= ========= ========= =========
Preferred Stock outstanding, end of period
(in thousands) .......................................... $ 135,000 $ 135,000 $ 135,000 $ 135,000 $ 135,000
========= ========= ========= ========= =========
Portfolio turnover ........................................ 45.98% 140.55% 57.80% 46.58% 95.62%
========= ========= ========= ========= =========
=========================================================================================================================
Leverage:
Asset coverage per $1,000 ................................. $ 3,153 $ 3,190 $ 3,151 $ 3,082 $ 3,054
========= ========= ========= ========= =========
=========================================================================================================================
Dividends
Per Share on
Preferred Stock
Outstanding:
Series A--Investment income--net .......................... $ 440 $ 897 $ 880 $ 898 $ 967
========= ========= ========= ========= =========
Series B--Investment income--net .......................... $ 427 $ 875 $ 872 $ 879 $ 891
========= ========= ========= ========= =========
Series C--Investment income--net .......................... $ 380 $ 869 $ 869 $ 886 $ 1,070
========= ========= ========= ========= =========
=========================================================================================================================
</TABLE>
* Annualized.
** Total investment returns based on market value, which can
be significantly greater or lesser than the net asset
value, may result in substantially different returns. Total
investment returns exclude the effects of sales loads.
*** Do not reflect the effect of dividends to Preferred Stock
shareholders.
+ Aggregate total investment return.
See Notes to Financial Statements.
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
MuniVest Fund II, Inc. (the "Fund") is registered under the Investment Company
Act of 1940 as a non-diversified, closed-end management investment company. The
Fund's financial statements are prepared in accordance with generally accepted
accounting principles which may require the use of management accruals and
estimates. These unaudited financial statements reflect all adjustments which
are, in the opinion of management, necessary to a fair statement of the results
for the interim period presented. All such adjustments are of a normal recurring
nature. The Fund determines and makes available for publication the net asset
value of its Common Stock on a weekly basis. The Fund's Common Stock is listed
on the New York Stock Exchange under the symbol MVT. The following is a summary
of significant accounting policies followed by the Fund.
(a) Valuation of investments--Municipal bonds are traded primarily in the
over-the-counter markets and are valued at the most recent bid price or yield
equivalent as obtained by the Fund's pricing service from dealers that make
markets in such securities. Financial futures contracts and options thereon,
which are traded on exchanges, are valued at their closing prices as of the
close of such exchanges. Options written or purchased are valued at the last
sale price in the case of exchange-traded options. In the case of options traded
in the over-the-counter market, valuation is the last asked price option
(options written) or the last bid price (options purchased ). Securities with
remaining maturities of sixty days or less are valued at amortized cost, which
approximates market value. Securities and assets for which market quotations are
not readily available are valued at fair value as determined in good faith by or
under the direction of the Board of Directors of the Fund, including valuations
furnished by a pricing service retained by the Fund, which may utilize a matrix
system for valuations. The procedures of the pricing service and its valuations
are reviewed by the officers of the Fund under the general supervision of the
Board of Directors.
(b) Derivative financial instrument--The Fund may engage in various portfolio
strategies to seek to increase its return by hedging its portfolio against
adverse movements in the debt markets. Losses may arise due to changes in the
value of the contract or if the counterparty does not perform under the
contract.
o Financial futures contracts--The Fund may purchase or sell financial futures
contracts and options on such futures contracts for the purpose of hedging the
market risk on existing securities or the intended purchase of securities.
Futures contracts are contracts for delayed delivery of securities at a specific
future date and at a specific price or yield. Upon entering into a contract, the
Fund deposits and maintains as collateral such initial margin as required by the
exchange on which the transaction is effected. Pursuant to the contract, the
Fund agrees to receive from or pay to the broker an amount of cash equal to the
daily fluctuation in value of the contract. Such receipts or payments are known
as variation margin and are recorded by the Fund as unrealized gains or losses.
When the contract is closed, the Fund records a realized gain or loss equal to
the difference between the value of the contract at the time it was opened and
the value at the time it was closed.
o Options--The Fund is authorized to write covered call options and purchase put
options. When the Fund writes
12 & 13
<PAGE>
MuniVest Fund II, Inc., April 30, 1999
NOTES TO FINANCIAL STATEMENTS (concluded)
an option, an amount equal to the premium received by the Fund is reflected as
an asset and an equivalent liability. The amount of the liability is
subsequently marked to market to reflect the current market value of the option
written.
When a security is purchased or sold through an exercise of an option, the
related premium paid (or received) is added to (or deducted from) the basis of
the security acquired or deducted from (or added to) the proceeds of the
security sold. When an option expires (or the Fund enters into a closing
transaction), the Fund realizes a gain or loss on the option to the extent of
the premiums received or paid (or gain or loss to the extent the cost of the
closing transaction exceeds the premium paid or received).
Written and purchased options are non-income producing investments.
(c) Income taxes--It is the Fund's policy to comply with the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute substantially all of its taxable income to its shareholders.
Therefore, no Federal income tax provision is required.
(d) Security transactions and investment income--Security transactions are
recorded on the dates the transactions are entered into (the trade dates).
Interest income is recognized on the accrual basis. Discounts and market
premiums are amortized into interest income. Realized gains and losses on
security transactions are determined on the identified cost basis.
(e) Dividends and distributions--Dividends from net investment income are
declared and paid monthly. Distributions of capital gains are recorded on the
ex-dividend dates.
2. Investment Advisory Agreement and Transactions with Affiliates:
The Fund has entered into an Investment Advisory Agreement with Fund Asset
Management, L.P. ("FAM"). The general partner of FAM is Princeton Services, Inc.
("PSI"), an indirect wholly-owned subsidiary of Merrill Lynch & Co., Inc. ("ML &
Co."), which is the limited partner.
FAM is responsible for the management of the Fund's portfolio and provides the
necessary personnel, facilities, equipment and certain other services necessary
to the operations of the Fund. For such services, the Fund pays a monthly fee at
an annual rate of 0.50% of the Fund's average weekly net assets, including
proceeds from the issuance of Preferred Stock.
Accounting services are provided to the Fund by FAM at cost.
Certain officers and/or directors of the Fund are officers and/or directors of
FAM, PSI, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities, for the six
months ended April 30, 1999 were $189,519,905 and $186,342,281, respectively.
Net realized gains for the six months ended April 30, 1999 and net unrealized
gains as of April 30, 1999 were as follows:
- --------------------------------------------------------------------------------
Realized Unrealized
Gains Gains
- --------------------------------------------------------------------------------
Long-term investments .................... $ 1,239,502 $22,098,106
Financial futures contracts .............. 471,300 --
----------- -----------
Total .................................... $ 1,710,802 $22,098,106
=========== ===========
- --------------------------------------------------------------------------------
As of April 30, 1999, net unrealized appreciation for Federal income tax
purposes aggregated $22,098,106, of which $24,311,592 related to appreciated
securities and $2,213,486 related to depreciated securities. The aggregate cost
of investments at April 30, 1999 for Federal income tax purposes was
$395,171,529.
4. Capital Stock Transactions:
The Fund is authorized to issue 200,000,000 shares of capital stock, including
Preferred Stock, par value $.10 per share, all of which were initially
classified as Common Stock. The Board of Directors is authorized, however, to
reclassify any unissued shares of capital stock without approval of holders of
Common Stock.
Common Stock
Shares issued and outstanding during the six months ended April 30, 1999 and the
year ended October 31, 1998 remained constant.
Preferred Stock
Auction Market Preferred Stock ("AMPS") are shares of Preferred Stock of the
Fund, with a par value of $.05 per share and a liquidation preference of $25,000
per share, that entitle their holders to receive cash dividends at an annual
rate that may vary for the successive dividend periods. The yields in effect at
April 30, 1999 were as follows: Series A, 3.20%; Series B, 3.20%; and Series C,
3.15%.
Shares issued and outstanding during the six months ended April 30, 1999 and the
year ended October 31, 1998 remained constant.
The Fund pays commissions to certain broker-dealers at the end of each auction
at an annual rate ranging from 0.25% to 0.375%, calculated on the proceeds of
each auction. For the six months ended April 30, 1999, Merrill Lynch, Pierce,
Fenner & Smith Incorporated, an affiliate of FAM, earned $73,400 as commissions.
5. Capital Loss Carryforward:
At October 31, 1998, the Fund had a net capital loss carry forward of
approximately $9,489,000, all of which expires in 2003. This amount will be
available to offset like amounts of any future taxable gains.
6. Subsequent Event:
On May 6, 1999, the Fund's Board of Directors declared an ordinary income
dividend to Common Stock shareholders in the amount of $.065819 per share,
payable on May 27, 1999 to shareholders of record as of May 21, 1999.
OFFICERS AND DIRECTORS
Terry K. Glenn, President and Director
Ronald W. Forbes, Director
Cynthia A. Montgomery, Director
Charles C. Reilly, Director
Kevin A. Ryan, Director
Richard R. West, Director
Arthur Zeikel, Director
Vincent R. Giordano, Senior Vice President
Kenneth A. Jacob, Vice President
Fred K. Stuebe, Vice President
Donald C. Burke, Vice President and Treasurer
William E. Zitelli, Secretary
- --------------------------------------------------------------------------------
Gerald M. Richard, Treasurer of MuniVest Fund II, Inc. has recently retired. His
colleagues at Merrill Lynch Asset Management, L.P. join the Fund's Board of
Directors in wishing Mr. Richard well in his retirement.
- --------------------------------------------------------------------------------
Custodian
The Bank of New York
90 Washington Street
New York, NY 10286
Transfer Agents
Common Stock:
The Bank of New York
101 Barclay Street
New York, NY 10286
Preferred Stock:
IBJ Whitehall Bank &Trust Company
One State Street
New York, NY 10004
NYSE Symbol
MVT
14 & 15
<PAGE>
This report, including the financial information herein, is transmitted to the
shareholders of MuniVest Fund II, Inc. for their information. It is not a
prospectus, circular or representation intended for use in the purchase of
shares of the Fund or any securities mentioned in the report. Past performance
results shown in this report should not be considered a representation of future
performance. The Fund has leveraged its Common Stock by issuing Preferred Stock
to provide the Common Stock shareholders with a potentially higher rate of
return. Leverage creates risks for Common Stock shareholders, including the
likelihood of greater volatility of net asset value and market price of shares
of the Common Stock, and the risk that fluctuations in the short-term dividend
rates of the Preferred Stock may affect the yield to Common Stock shareholders.
Statements and other information herein are as dated and are subject to change.
MuniVest
Fund II, Inc.
Box 9011
Princeton, NJ
08543-9011 16807--4/99
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