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Rating Action:

Moody's withdraws short-term ratings of VRDP shares issued by seven BlackRock municipal closed-end funds; long term ratings affirmed

22 Oct 2015

New York, October 22, 2015 -- Moody's Investors Service has withdrawn the P-1 short-term ratings of Variable Rate Demand Preferred (VRDP) Shares issued by three national and four state-specific closed-end funds managed by BlackRock Advisors, LLC. The rating withdrawal follows the Funds' designation of Special Rate Periods, declared in accordance with the Statements of Preferences or Articles Supplementary, as applicable, of the VRDP Shares (which establish and fix the rights and preferences of VRDP Shares). During the Special Rate Periods, beneficial owners and holders will not have the right to tender their VRDP Shares for remarketing, and there will be no mandatory tenders of the VRDP Shares

Moody's also affirmed the long-term ratings of the VRDP shares, which remain at Aa1 and Aa2 for the national Funds and state-specific Funds, respectively. The long-term ratings are based on each Fund's risk adjusted leverage, portfolio profile and fixed charge coverage, combined with an assessment of the VRDP Shares' relative priority of claim.

The seven Funds, each managed by BlackRock Advisors, LLC, their corresponding VRDP Shares, and their respective ratings are as follows:

National Municipal Funds:

• BlackRock Municipal Bond Investment Trust (BIE): 178 @$100,000 liquidation value per share for $17.8 million Variable Rate Demand Preferred Shares Series W-7 (VRDP), mandatory redemption 10/1/2041: Withdrawn P-1; Affirmed Aa1

• BlackRock MuniYield Quality Fund, Inc. (MQY): 1,766 @$100,000 liquidation value per share for $176.6 million Variable Rate Demand Preferred Shares Series W-7 (VRDP), mandatory redemption 10/1/2041: Withdrawn P-1; Affirmed Aa1

• BlackRock Municipal Income Investment Trust (BBF): 342 @$100,000 liquidation value per share for $34.2 million Variable Rate Demand Preferred Shares Series W-7 (VRDP), mandatory redemption 10/1/2041: Withdrawn P-1; Affirmed Aa1

State-Specific Municipal Funds:

• BlackRock Muni New York Intermediate Duration Fund, Inc. (MNE): 296 shares @$100,000 liquidation value per share for $29.6 million Variable Rate Demand Preferred Shares Series W-7 (VRDP) mandatory redemption 10/1/2041: Withdrawn P-1; Affirmed Aa2

• BlackRock New York Municipal Bond Trust (BQH): 221 shares @$100,000 liquidation value per share for $22.1 million Variable Rate Demand Preferred Shares Series W-7 (VRDP) mandatory redemption 10/1/2041: Withdrawn P-1; Affirmed Aa2

• BlackRock New York Municipal Income Quality Trust (BSE): 405 shares @$100,000 liquidation value per share for $40.5 million Variable Rate Demand Preferred Shares Series W-7 (VRDP) mandatory redemption 10/1/2041: Withdrawn P-1; Affirmed Aa2

• BlackRock New York Municipal Income Trust II (BFY): 444 shares @$100,000 liquidation value per share for $44.4 million Variable Rate Demand Preferred Shares Series W-7 (VRDP) mandatory redemption 10/1/2041: Withdrawn P-1; Affirmed Aa2

RATINGS RATIONALE

Short-Term Ratings

The withdrawn P-1 short-term ratings were based upon the terms of the VRDP Shares Purchase Agreements entered into by Barclays Bank PLC, as Liquidity Provider, and The Bank of New York Mellon, as Tender and Paying Agent, which supported VRDP holders' ability to tender their shares with an unconditional commitment from Barclays Capital Inc. to purchase unsuccessfully remarketed VRDP Shares as the Liquidity Provider.

With the designation of the Special Rate Period for the VRDP Shares, which will commence on October 22, 2015 and end on April 18, 2018 (unless extended), beneficial owners and holders will not have the right to tender their VRDP Shares for remarketing, and there will be no mandatory tenders of the VRDP Shares. At the conclusion of the Special Rate Period, these rights may be restored.

Long-Term Ratings National Municipal Funds

BBF, BIE, and MQY, with gross assets of $165.4 million, $87.5 million, and $776.8 million respectively as of September 30, 2015 are modestly levered with effective leverage of 39%, 39%, and 37% respectively, including tender option bonds.

The Aa1 ratings are based on each of the Funds' strong asset coverage ratios, using municipal advance rates applied to all portfolio assets, combined with low risk of breaching the asset coverage ratio imposed by the Investment Company Act of 1940 (40 Act). Moody's risk adjusted asset coverage ratios, based on advance rates applied to portfolio securities including tender option bonds, stood at 159%, 157%, and 163% for BBF, BIE and MQY, respectively of the Aaa standard for this metric. This, combined with the low probability of breaching the Funds' 40 Act regulatory asset coverage, contributes to the Funds' strong adjusted leverage profile. The leverage profile is reinforced by each Fund's commitment to maintain an effective leverage ratio at or below 45%.

The Funds' portfolio profiles, which capture the credit quality and liquidity of the Funds' holdings, reflects the strong credit quality of each Fund's municipal holdings, that are well diversified nationally, across various general obligation, tax obligation, revenue bonds, pre-refunded bonds, as well as other security types. The long-term ratings of the national municipal Fund VRDP Shares are further supported by very high quality fixed charge coverage ratios, exceeding 13 times, calculated on a pro-forma trailing one year basis, as if the Special Rate period had been in effect for the prior year. The metric is adjusted for anticipated changes in the dividend rate and lower fees paid to the Liquidity Provider and Remarketing Agent, and evidences the Funds' excellent capacity to meet periodic dividend payments and recurring earnings.

The ratings also reflect a one notch downward adjustment based on the weaker position of investors holding preferred stock relative to senior unsecured debt obligations.

State-Specific Municipal Funds

BSE, BFY, BQH, and MNE with assets of $115.6 million, $128.1 million, $71.2 million and $101.1 million respectively as of September 30, 2015, are modestly levered with effective leverage of 38%, 39%, 38%, and 36%, respectively, including tender option bonds.

The Aa2 ratings are based on each of the Funds' strong asset coverage ratios, using municipal advance rates applied to all portfolio assets, combined with low risk of breaching the asset coverage ratio imposed by the 40 Act, as well as the State of New York's (Aa1, Stable) rating. Moody's risk adjusted asset coverage ratios, based on advance rates applied to portfolio securities including tender option bonds, stood at 167%, 152%, 155% and 171% for BSE, BFY, BQH, and MNE respectively of the Aaa level for this metric. This, combined with the low probability of breaching the Funds' 40 Act regulatory asset coverage, contributes to the Funds' strong adjusted leverage profile. The leverage profile is reinforced by the Fund's commitment to maintain a leverage ratio at or below 45%, lower than the 40 Act limit of 50%.

The Funds' portfolio profiles, which capture the credit quality and liquidity of the Funds' holdings, reflects the strong credit quality of each Fund's municipal holdings, which are well diversified across various general obligation, tax obligation, revenue bonds, pre-refunded bonds, as well as other security types. This is however offset by lower liquidity metrics, due to the Funds' single-state investment focus and industry and sector concentrations, which could be exacerbated in any future municipal market downturn.

The long-term ratings of the national municipal Fund VRDP Shares are further supported by high quality fixed charge coverage ratios in excess of 8 times, calculated on a pro-forma trailing one year basis, as if the Special Rate period had been in effect for the prior year. The metric is adjusted for anticipated changes in the dividend rate and lower fees paid to the Liquidity Provider and Remarketing Agent, and evidences the Funds' strong capacity to meet periodic dividend payments and recurring earnings.

The ratings also reflect a one notch downward adjustment based on the weaker position of investors holding preferred stock relative to senior unsecured debt obligations.

The principal methodology used in this rating was "Securities Issued by U.S. Closed-End Funds" published in March 2015. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

REGULATORY DISCLOSURES

For ratings issued on a program, series or category/class of debt, this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the rating action on the support provider and in relation to each particular rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this rating action, and whose ratings may change as a result of this rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.

Neal M. Epstein, CFA
VP - Senior Credit Officer
Managed Investments Group
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Marc R. Pinto, CFA
MD - Managed Investments
Managed Investments Group
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Moody's withdraws short-term ratings of VRDP shares issued by seven BlackRock municipal closed-end funds; long term ratings affirmed
No Related Data.
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