Salomon Brothers Municipal Partners Fund II Inc.
Registrant's telephone number, including area code: 1-800-725-6666
Date of fiscal year end: June 30
Date of reporting period: March 31, 2006
| ITEM 1. | SCHEDULE OF INVESTMENTS |
SALOMON BROTHERS MUNICIPAL PARTNERS FUND II INC.
SALOMON BROTHERS MUNICIPAL PARTNERS FUND II INC.
|
Schedule of Investments (unaudited)
|
March 31, 2006
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| FACE | ||||||
| AMOUNT | RATING‡ |
|
VALUE | |||
|
|
||||||
| MUNICIPAL BONDS — 98.8% | ||||||
|
California — 8.5% |
||||||
| $ 1,000,000 |
A3(a) | California Health Facilities Financing Authority Revenue, Cedars-Sinai | ||||
| Medical Center, 5.000% due 11/15/34 | $ |
1,012,910 | ||||
| 1,500,000 |
A | California State, GO, 5.125% due 6/1/24 | 1,546,185 | |||
| 2,500,000 |
AAA | Huntington Beach, CA, Union High School District, GO, Election 2004, FSA- | ||||
| Insured, 5.000% due 8/1/29 | 2,603,550 | |||||
| 3,000,000 |
AAA | Los Angeles, CA, Department of Water & Power Revenue, Power Systems, | ||||
| Sub-Series A-1, FSA-Insured, 5.000% due 7/1/35 | 3,130,740 | |||||
| 2,500,000 |
AAA | Napa Valley, CA, Community College District GO, Election of 2002, Series | ||||
| B, MBIA-Insured, 5.000% due 8/1/23 | 2,627,325 | |||||
|
|
||||||
| Total California | 10,920,710 | |||||
|
|
||||||
|
Colorado — 1.4% |
||||||
| 1,750,000 |
BBB+ | Colorado Health Facilities Authority Revenue, Poudre Valley Health Care, | ||||
| Series F, 5.000% due 3/1/25 | 1,756,177 | |||||
|
|
||||||
| Connecticut — 2.5% | ||||||
| 3,000,000 |
AAA | Connecticut State Special Tax Obligation Revenue, Transportation | ||||
| Infrastructure, Series A, AMBAC-Insured, 5.000% due 7/1/23 | 3,156,330 | |||||
|
|
||||||
| District of Columbia — 1.6% | ||||||
| 2,000,000 |
AAA | District of Columbia Revenue, American University, AMBAC-Insured, | ||||
| 5.625% due 10/1/26 | 2,036,540 | |||||
|
|
||||||
| Florida — 0.8% | ||||||
| 1,000,000 |
AAA | St. Johns County, FL,Water & Sewer Revenue, MBIA-Insured, 5.500% due | ||||
| 6/1/11 | 1,080,720 | |||||
|
|
||||||
| Illinois — 15.7% |
||||||
| 1,000,000 |
AAA | Chicago, IL, Board of Education, GO, Chicago School Reform, AMBAC- | ||||
| Insured, Call 12/1/07 @ 102, 5.750% due 12/1/27 (b) | 1,053,940 | |||||
| Chicago, IL, GO, Series A, FSA-Insured: | ||||||
| 145,000 |
AAA | 5.250% due 1/1/16 | 155,270 | |||
| 355,000 |
AAA | Call 1/1/14 @ 100, 5.250% due 1/1/16 (b) | 385,285 | |||
| 1,750,000 |
AAA | Chicago, IL, Midway Airport Revenue, Series B, MBIA-Insured, 5.625% due | ||||
| 1/1/29 (c) | 1,786,750 | |||||
| 3,000,000 |
AAA | Chicago, IL, Park District, Refunding, Series D, FGIC-Insured, 5.000% due | ||||
| 1/1/29 | 3,124,350 | |||||
| 1,000,000 |
AAA | Chicago, IL, Public Building Commission, Building Revenue, Chicago School | ||||
| Reform, Series B, FGIC-Insured, 5.250% due 12/1/18 | 1,094,030 | |||||
| 1,215,000 |
AAA | Chicago, IL, Sales Tax Revenue, FSA-Insured, 5.000% due 1/1/22 | 1,271,704 | |||
| 250,000 |
AAA | Cook County, IL, Refunding GO, Series A, MBIA-Insured, 5.625% due | ||||
| 11/15/16 | 259,533 | |||||
| 2,000,000 |
Aaa(a) | Illinois DFA, Revolving Fund Revenue, 5.250% due 9/1/12 | 2,144,860 | |||
| 1,000,000 |
AA+ | Illinois EFA Revenue, Northwestern University, 5.500% due 12/1/13 | 1,074,180 | |||
| Illinois Health Facilities Authority Revenue: | ||||||
| 1,850,000 |
AAA | Refunding, SSM Health Care, MBIA-Insured, 6.550% due 6/1/13 (d) | 2,115,901 | |||
| 2,000,000 |
AAA | Servantoor Project, Series A, FSA-Insured, 6.000% due 8/15/12 (d) | 2,212,160 | |||
| 605,000 |
A | South Suburban Hospital Project, 7.000% due 2/15/18 (d) | 718,044 | |||
| 2,645,000 |
AAA | Illinois State, Sales Tax Revenue, 5.500% due 6/15/16 | 2,839,513 | |||
|
|
||||||
| Total Illinois | 20,235,520 | |||||
|
|
||||||
| Indiana — 2.8% | ||||||
| Indiana Bond Bank Revenue, Series B: | ||||||
| 160,000 |
AAA | 5.000% due 8/1/23 | 164,280 | |||
| 90,000 |
AAA | Call 8/1/10 @ 101, 5.000% due 8/1/23 (b) | 95,408 | |||
| 1,195,000 |
AAA | Indiana Health Facility Financing Authority, Hospital Revenue, Community | ||||
| Hospital Project, Series A, AMBAC-Insured, 5.000% due 5/1/35 | 1,228,329 | |||||
SALOMON BROTHERS MUNICIPAL PARTNERS FUND II INC.
| Schedule of Investments (unaudited) (continued) | March 31, 2006 |
| FACE | ||||||
| AMOUNT | RATING‡ | SECURITY | VALUE | |||
|
|
||||||
| Indiana (continued) | ||||||
| $ 2,000,000 |
BBB+ | Indiana State DFA Environment Improvement Revenue, USX Corp. Project, | ||||
| 5.250% due 12/1/22 | $ |
2,123,340 | ||||
|
|
||||||
| Total Indiana | 3,611,357 | |||||
|
|
||||||
| Maryland — 4.6% | ||||||
| Maryland State Health & Higher Educational Facilities Authority Revenue: | ||||||
| 1,500,000 |
Baa1(a) | Carroll County General Hospital, 6.000% due 7/1/37 | 1,588,605 | |||
| 1,500,000 |
A | Suburban Hospital, Series A, 5.500% due 7/1/16 | 1,613,010 | |||
| 500,000 |
A+ | University of Maryland Medical
Systems, 6.000% due 7/1/32 |
539,860 | |||
| 2,000,000 |
Aaa(a) | Northeast Maryland Waste Disposal Authority, Solid Waste Revenue, | ||||
| AMBAC-Insured, 5.500% due 4/1/16 (c) | 2,132,560 | |||||
|
|
||||||
| Total Maryland | 5,874,035 | |||||
|
|
||||||
| Massachusetts — 2.2% | ||||||
| Massachusetts State Water Pollution Abatement Trust Revenue, MWRA | ||||||
| Program, Series A: | ||||||
| 2,125,000 |
AAA | 5.750% due 8/1/29 | 2,269,309 | |||
| 525,000 |
AAA | Call 8/1/09 @101, 5.750% due 8/1/29 (b) | 563,587 | |||
|
|
||||||
| Total Massachusetts | 2,832,896 | |||||
|
|
||||||
| Michigan — 2.1% | ||||||
| 1,000,000 |
AAA | Detroit, MI, City School District, GO, School Building & Site Improvement, | ||||
| Series A, FGIC-Insured, Call 5/1/13 @ 100, 5.500% due 5/1/17 (b) | 1,098,160 | |||||
| 1,500,000 |
AA- | Michigan State, Hospital Finance Authority Revenue, Trinity Health, Series | ||||
| C, 5.375% due 12/1/30 | 1,572,135 | |||||
|
|
||||||
| Total Michigan | 2,670,295 | |||||
|
|
||||||
| Missouri — 2.8% | ||||||
| Missouri State Environmental Improvement & Energy Research Authority: | ||||||
| 2,500,000 |
AA | PCR Refunding Revenue, Associated Electric Co-op Thomas Hill, | ||||
| 5.500% due 12/1/10 | 2,554,175 | |||||
| 1,000,000 |
Aaa(a) | Water Pollution Refunding Revenue, State Revolving Funds, Program A, | ||||
| 5.000% due 7/1/20 | 1,087,310 | |||||
|
|
||||||
| Total Missouri | 3,641,485 | |||||
|
|
||||||
| Nevada — 2.4% | ||||||
| 3,000,000 |
AAA | Clark County, NV, IDA Refunding Revenue, Nevada Power Co. Project, | ||||
| Series C, AMBAC-Insured, 7.200% due 10/1/22 | 3,139,080 | |||||
| 5,000 |
AAA | Nevada Housing Division Revenue, Single-Family Program, Series C, | ||||
| AMBAC-Insured, 6.350% due 10/1/12 (c) | 5,055 | |||||
|
|
||||||
| Total Nevada | 3,144,135 | |||||
|
|
||||||
| New Jersey — 4.1% | ||||||
| New Jersey EDA: | ||||||
| 2,500,000 |
AAA | Motor Vehicle Surcharges Revenue, Series A, MBIA-Insured, 5.250% | ||||
| due 7/1/16 | 2,685,775 | |||||
| 1,000,000 |
AAA | Water Facilities Revenue, New Jersey American Water Co. Inc. Project, | ||||
| Series A, FGIC-Insured, 6.875% due 11/1/34 (c) | 1,012,660 | |||||
| 1,500,000 |
AAA | New Jersey State, EFA Revenue, Princeton University, Series A, 5.000% due | ||||
| 7/1/21 | 1,592,280 | |||||
|
|
||||||
| Total New Jersey | 5,290,715 | |||||
|
|
||||||
| New York — 15.4% | ||||||
| 2,415,000 |
A- | Long Island Power Authority, NY, Electric System Revenue, Gen-Series B, | ||||
| 5.000% due 12/1/35 | 2,492,594 | |||||
| New York City, NY, GO: | ||||||
| Series A: | ||||||
| 10,000 |
A+ | 6.000% due 5/15/30 | 10,831 | |||
| 990,000 |
A+ | Call 5/15/10 @ 101, 6.000% due 5/15/30 (b) | 1,086,772 | |||
See Notes to Schedule of Investments.
2
SALOMON BROTHERS MUNICIPAL PARTNERS FUND II INC.
| Schedule of Investments (unaudited) (continued) | March 31, 2006 |
| FACE | ||||||
| AMOUNT | RATING‡ | |
VALUE | |||
|
|
||||||
| New York (continued) | ||||||
| $ 1,500,000 |
A+ | Series G, 5.000% due 12/1/33 | $ |
1,538,085 | ||
| 2,000,000 |
AA+ | New York City, NY, Municipal Water Finance Authority, Water & Sewer | ||||
| Systems Revenue, Series D, 5.000% due 6/15/37 | 2,065,580 | |||||
| 4,500,000 |
AAA | New York City, NY, TFA Revenue, Series A, 5.500% due 11/15/17 | 4,901,085 | |||
| New York State Dormitory Authority Revenue, Court Facilities Lease, NYC | ||||||
| Issue: | ||||||
| 5,000,000 |
AAA | AMBAC-Insured, 5.500% due 5/15/25 | 5,741,050 | |||
| 1,700,000 |
AAA | Non State Supported Debt, Series A, AMBAC-Insured, 5.500% due | ||||
| 5/15/28 | 1,970,555 | |||||
|
|
||||||
| Total New York | 19,806,552 | |||||
|
|
||||||
| North Carolina — 3.2% | ||||||
4,000,000 |
AA+ | University of North Carolina, University Revenue, Series A, 5.000% due | ||||
| 12/1/34 | 4,164,680 | |||||
|
|
||||||
| Ohio — 2.0% | ||||||
| 2,500,000 |
AA- | Franklin County, OH, Hospital Revenue, Holy Cross Health Systems Corp., | ||||
| Call 6/1/06 @ 102, 5.875% due 6/1/21 (b) | 2,559,350 | |||||
|
|
||||||
| Pennsylvania — 0.2% | ||||||
| 250,000 |
AAA | Philadelphia, PA, School District GO, Series A, FSA-Insured, Call 2/1/12 @ | ||||
| 100, 5.500% due 2/1/31 (b) | 272,075 | |||||
|
|
||||||
| Puerto Rico — 4.9% | ||||||
| 1,600,000 |
AAA | Puerto Rico Commonwealth Highway & Transportation Authority, Highway | ||||
| Revenue, Series X, FSA-Insured, 5.500% due 7/1/15 | 1,774,784 | |||||
| 4,000,000 |
AAA | Puerto Rico Commonwealth Infrastructure Financing Authority, Series C, | ||||
| AMBAC-Insured, 5.500% due 7/1/25 | 4,572,680 | |||||
|
|
||||||
| Total Puerto Rico | 6,347,464 | |||||
|
|
||||||
| Tennessee — 1.2% | ||||||
| 1,200,000 |
AAA | Memphis-Shelby County, TN, Airport Authority Revenue, Series D, | ||||
| AMBAC-Insured, 6.000% due 3/1/24 (c) | 1,286,196 | |||||
| 320,000 |
AA | Tennessee Housing Development Agency Revenue, Homeownership | ||||
| Program, Series 2B, 6.350% due 1/1/31 (c) | 321,501 | |||||
|
|
||||||
| Total Tennessee | 1,607,697 | |||||
|
|
||||||
| Texas — 13.3% | ||||||
| 2,500,000 |
AAA | Aledo, TX, GO, ISD, School Building, Series A, PSF-Insured, 5.000% due | ||||
| 2/15/30 | 2,584,925 | |||||
| 330,000 |
AAA | Austin, TX, Airport Systems Revenue, Series A, MBIA-Insured, Call | ||||
| 11/15/07 @ 100, 6.200% due 11/15/15 (b)(c) | 342,022 | |||||
| 1,000,000 |
Aaa(a) | Edgewood, TX, GO, ISD, Bexar County, PSF-Insured, 5.250% due 2/15/17 | 1,076,210 | |||
| 3,500,000 |
AAA | Houston, TX, Utility System Revenue, Combined First Lien, FSA-Insured, | ||||
| 5.000% due 11/15/35 | 3,621,450 | |||||
| 1,600,000 |
AAA | Lake Dallas, TX, GO, ISD, School Building, PSF-Insured, 5.000% due | ||||
| 8/15/34 | 1,643,968 | |||||
| 1,000,000 |
AAA | Mesquite, TX, Independent School District No. 1, GO, Capital Appreciation, | ||||
| Series A, PSFG-Insured, zero coupon bond to yield 5.169% due 8/15/27 | 339,300 | |||||
| 1,380,000 |
AAA | North Harris Montgomery Community College District, TX, GO, FGIC- | ||||
| Insured, 5.375% due 2/15/16 | 1,478,808 | |||||
| 2,225,000 |
Aaa(a) | Northwest Texas, GO, ISD, PSF-Insured, 5.250% due 8/15/18 | 2,397,215 | |||
| 1,000,000 |
Baa2(a) | Sabine River Authority, Texas Pollution Control, Refunding, Remarketed | ||||
| 11/29/05, 5.200% due 5/1/28 | 1,021,910 | |||||
| 1,500,000 |
AAA | Texas State Turnpike Authority Revenue, First Tier, Series A, AMBAC- | ||||
| Insured, 5.500% due 8/15/39 | 1,610,640 | |||||
| 1,000,000 |
AAA | Williamson County, TX, GO, MBIA-Insured, 5.250% due 2/15/21 | 1,079,960 | |||
|
|
||||||
| Total Texas | 17,196,408 | |||||
|
|
||||||
See Notes to Schedule of Investments.
3
SALOMON BROTHERS MUNICIPAL PARTNERS FUND II INC.
| Schedule of Investments (unaudited) (continued) | March 31, 2006 |
| FACE | ||||||
|
|
RATING‡ | SECURITY | VALUE | |||
|
|
||||||
| Utah — 0.1% | ||||||
| $ 150,000 | AA | Utah State Housing Finance Agency, Single-Family Mortgage Revenue, Issue | ||||
| H-2, FHA-Insured, 6.250% due 7/1/22 (c) | $ |
153,136 | ||||
|
|
||||||
| Virginia — 2.5% | ||||||
| 2,915,000 | AAA | Greater Richmond, VA, Convention Center Authority, Hotel Tax Revenue, | ||||
| Convention Center Expansion Project, Call 6/15/10 @ 101, 6.125% due | ||||||
| 6/15/20(b) | 3,209,532 | |||||
|
|
||||||
| Washington — 4.5% | ||||||
| 1,900,000 | AAA | Chelan County, WA, Public Utility District, Chelan Hydro System No.1, | ||||
| Construction Revenue, Series A, AMBAC-Insured, 5.450% due 7/1/37(c) | 2,005,659 |
|||||
| 2,000,000 | AAA | Port of Seattle, WA, Revenue, Refunding, Intermediate Lien, Series A, | ||||
| MBIA-Insured, 5.000% due 3/1/30 | 2,069,740 | |||||
| 400,000 | AAA | Seattle, WA, GO, Series B, FSA-Insured, Call 12/1/09 @ 101, 5.750% due | ||||
| 12/1/28(b) | 431,920 | |||||
| 1,200,000 | AAA | Washington State Public Power Supply System Revenue, Nuclear Project No. | ||||
| 1, Series A, MBIA-Insured, 5.125% due 7/1/17 | 1,250,305 | |||||
|
|
||||||
| Total Washington | 5,757,624 | |||||
|
|
||||||
| TOTAL INVESTMENTS BEFORE SHORT-TERM INVESTMENTS | ||||||
| (Cost — $124,990,475) | 127,325,433 | |||||
|
|
||||||
| SHORT-TERM INVESTMENTS(e) — 1.2% | ||||||
| Idaho — 0.7% | ||||||
| 900,000 | A-1+ | Idaho Health Facilities Authority Revenue, St. Lukes Medical Center, FSA- | ||||
| Insured, SPA-Harris Trust & Savings Bank, 3.180%, 4/3/06 | 900,000 | |||||
|
|
||||||
| Tennessee — 0.5% | ||||||
| 600,000 | A-1+ | Metropolitan Government of Nashville & Davidson County, TN, Health & | ||||
| Educational Facilities Board Revenue, Vanderbilt University, Series A-2, | ||||||
| 3.120%, 4/6/06 | 600,000 | |||||
|
|
||||||
| TOTAL SHORT-TERM INVESTMENTS | ||||||
| (Cost — $1,500,000) | 1,500,000 | |||||
|
|
||||||
| TOTAL INVESTMENTS — 100.0% (Cost — $126,490,475#) | $ | 128,825,433 | ||||
|
|
||||||
| ‡ | All ratings are by Standard & Poor’s Ratings Service, unless otherwise noted. All ratings are unaudited. |
| (a) | Rating by Moody's Investors Service. |
| (b) | Pre-Refunded bonds are escrowed with government obligations and/or government agency securities and are considered by the Manager to be triple-A rated even if issuer has not applied for new ratings. |
| (c) | Income from this issue is considered a preference item for purposes of calculating the alternative minimum tax ("AMT"). |
| (d) | Bonds are escrowed to maturity by government securities and/or U.S. government agency securities and are considered by the Manager to be triple-A rated even if issuer has not applied for new ratings. |
| (e) | Variable rate demand obligations have a demand feature under which the Fund can tender them back to the issuer on no more than 7 days notice. Date shown is the date of the next interest rate change. |
| # | Aggregate cost for federal income tax purposes is substantially the same. |
| Abbreviations used in this schedule: | |
| AMBAC - Ambac Assurance Corporation DFA - Development Finance Agency EDA - Economic Development Authority EFA - Educational Facilities Authority FGIC - Financial Guaranty Insurance Company FHA - Federal Housing Administration FSA - Financial Security Assurance GO - General Obligation IDA - Industrial Development Authority ISD - Independent School District MBIA - Municipal Bond Investors Assurance Corporation MWRA – Massachusetts Water Resources Authority PCR - Pollution Control Revenue PSF - Permanent School Fund PSFG - Permanent School Fund Guaranty SPA - Standby Bond Purchase Agreement TFA - Transitional Finance Authority |
See Notes to Schedule of Investments.
4
SALOMON BROTHERS MUNICIPAL PARTNERS FUND II INC.
| Schedule of Investments (unaudited) (continued) | March 31, 2006 |
| Education | 17.1% | |
| General Obligation | 12.2% | |
| Utilities | 11.3% | |
| Transportation | 9.1% | |
| Pre-Refunded | 8.6% | |
| Hospitals | 7.9% | |
| Pollution Control | 7.0% | |
| Public Facilities | 4.4% | |
| Escrowed to Maturity | 3.9% | |
| Sales Tax | 3.8% | |
| Industrial Development | 3.8% | |
| Water & Sewer | 3.4% | |
| Electric | 2.4% | |
| Lease | 1.5% | |
| Housing: Single-Family | 0.4% | |
| Miscellaneous | 3.2% | |
| 100.0% | ||
*As a percentage of total investments.
See Notes to Schedule of Investments.
5
Bond Ratings (unaudited)
The definitions of the applicable rating symbols are set forth below:
Standard & Poor’s Ratings Service (“Standard & Poor’s”)—Ratings from “AA” to “CCC” may be modified by the addition of a plus (+) or minus (–) sign to show relative standings within the major rating categories.
| AAA | — |
Bonds rated “AAA” have the highest rating assigned by Standard & Poor’s. Capacity to pay interest and repay principal is extremely strong. |
| AA | — |
Bonds rated “AA” have a very strong capacity to pay interest and repay principal and differ from the highest rated issues only in a small degree. |
| A | — |
Bonds rated “A” have a strong capacity to pay interest and repay principal although they are somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than debt in higher rated categories. |
| BBB | — |
Bonds rated “BBB” are regarded as having an adequate capacity to pay interest and repay principal. Whereas they normally exhibit adequate protection parameters, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity to pay interest and repay principal for bonds in this category than in higher rated categories. |
| BB, B, CCC, |
||
| CC and C | — |
Bonds rated “BB”, “B”, “CCC”, “CC” and “C” are regarded, on balance, as predominantly speculative with respect to capacity to pay interest and repay principal in accordance with the terms of the obligation. “BB” represents the lowest degree of speculation and “C” the highest degree of speculation. While such bonds will likely have some quality and protective characteristics, these are outweighed by large uncertainties or major risk exposures to adverse conditions. |
| D | — |
Bonds rated “D” are in default and payment of interest and/or repayment of principal is in arrears. |
Moody’s Investors Service (“Moody’s”)—Numerical modifiers 1, 2 and 3 may be applied to each generic rating from “Aa” to “Caa,” where 1 is the highest and 3 the lowest ranking within its generic category.
| Aaa | — | Bonds rated “Aaa” are judged to be of the best quality. They carry the smallest degree of investment risk and are generally referred to as “gilt edge.” Interest payments are protected by a large or by an exceptionally stable margin and principal is secure. While the various protective elements are likely to change, such changes as can be visualized are most unlikely to impair the fundamentally strong position of such issues. |
| Aa | — | Bonds rated “Aa” are judged to be of high quality by all standards. Together with the “Aaa” group they comprise what are generally known as high grade bonds. They are rated lower than the best bonds because margins of protection may not be as large as in “Aaa” securities or fluctuation of protective elements may be of greater amplitude or there may be other elements present which make the long-term risks appear somewhat larger than in “Aaa” securities. |
| A | — | Bonds rated “A” possess many favorable investment attributes and are to be considered as upper medium grade obligations. Factors giving security to principal and interest are considered adequate but elements may be present which suggest a susceptibility to impairment some time in the future. |
| Baa | — | Bonds rated “Baa” are considered as medium grade obligations, i.e., they are neither highly protected nor poorly secured. Interest payments and principal security appear adequate for the present but certain protective elements may be lacking or may be characteristically unreliable over any great length of time. Such bonds lack outstanding investment characteristics and in fact have speculative characteristics as well. |
| Ba | — | Bonds rated “Ba” are judged to have speculative elements; their future cannot be considered as well assured. Often the protection of interest and principal payments may be very moderate and therefore |
| not well safeguarded during both good and bad times over the future. Uncertainty of position characterizes bonds in this class. | ||
| B | — | Bonds rated “B” are generally lack characteristics of desirable investments. Assurance of interest and principal payments or of maintenance of other terms of the contract over any long period of time may be small. |
| Caa | — | Bonds rated “Caa” are of poor standing. These may be in default, or present elements of danger may exist with respect to principal or interest. |
|
Ca |
— | Bonds rated “Ca” represent obligations which are speculative in a high degree. Such issues are often in default or have other marked short-comings. |
| C | — | Bonds rated “C” are the lowest class of bonds and issues so rated can be regarded as having extremely poor prospects of ever attaining any real investment standing. |
|
NR |
— | Indicates that the bond is not rated by Standard & Poor’s, Moody’s or Fitch Ratings Service. |
Short-Term Security Ratings (unaudited)
| SP-1 | — | Standard & Poor’s highest rating indicating very strong or strong capacity to pay principal and interest; those issues determined to possess overwhelming safety characteristics are denoted with a plus (+) sign. |
| A-1 | — | Standard & Poor’s highest commercial paper and variable-rate demand obligation (VRDO) rating indicating that the degree of safety regarding timely payment is either overwhelming or very strong; those issues determined to possess overwhelming safety characteristics are denoted with a plus (+) sign. |
| VMIG 1 | — | Moody’s highest rating for issues having a demand feature — VRDO. |
| MIG1 | — | Moody’s highest rating for short-term municipal obligations. |
| P-1 | — | Moody’s highest rating for commercial paper and for VRDO prior to the advent of the VMIG 1 rating. |
Notes to Schedule of Investments (unaudited)
1. Organization and Significant Accounting Policies
The Salomon Brothers Municipal Partners Fund II Inc. (the “Fund”) was incorporated in Maryland on June 21, 1993 and is registered as a diversified, closed-end management investment company under the Investment Company Act of 1940, as amended, (the "1940 Act").
The following are significant accounting policies consistently followed by the Fund and are in conformity with U.S. generally accepted accounting principles (“GAAP”).
(a) Investment Valuation. Securities are valued at the mean between the bid and ask prices provided by an independent pricing service that are based on transactions in municipal obligations, quotations from municipal bond dealers, market transactions in comparable securities and various relationships between securities. Securities for which market quotations are not readily available or are determined not to reflect fair value, will be valued in good faith by or under the direction of the Fund’s Board of Directors. Short-term obligations with maturities of 60 days or less are valued at amortized cost, which approximates value.
(b) Security Transactions. Security transactions are accounted for on a trade date basis.
2. InvestmentsAt March 31, 2006, the aggregate gross unrealized appreciation and depreciation of investments for federal income tax purposes were substantially as follows:
| Gross unrealized appreciation | $ 3,298,986 | |
| Gross unrealized depreciation | (964,028 | ) |
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| Net unrealized appreciation | $ 2,334,958 |
| ITEM 2. | CONTROLS AND PROCEDURES. | |
| (a) | The registrant’s principal executive officer and principal financial officer have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a- 3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”)) are effective as of a date within 90 days of the filing date of this report that includes the disclosure required by this paragraph, based on their evaluation of the disclosure controls and procedures required by Rule 30a-3(b) under the 1940 Act and 15d-15(b) under the Securities Exchange Act of 1934. | |
| (b) | There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the registrant’s last fiscal quarter that have materially affected, or are likely to materially affect the registrant’s internal control over financial reporting. | |
| ITEM 3. | EXHIBITS. | |
| Certifications pursuant to Rule 30a-2(a) under the Investment Company Act of 1940, as amended, are attached hereto. | ||
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Salomon Brothers Municipal Partners Fund II Inc.
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Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
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