PIMCO NEW YORK MUNICIPAL INCOME FUND II

Regulatory Filings • Aug 6, 2009

N-CSR 1 c58349_n-csr.htm

| UNITED
STATES |
| --- |
| SECURITIES
AND EXCHANGE COMMISSION |
| Washington, D.C. 20549 |
| FORM N-CSR |
| CERTIFIED SHAREHOLDER REPORT OF REGISTERED |
| MANAGEMENT INVESTMENT COMPANIES |

Investment Company Act file number 811-21078

| PIMCO
New York Municipal Income Fund II | |
| --- | --- |
| (Exact
name of registrant as specified in charter) | |
| 1345
Avenue of the Americas, New York, | New
York 10105 |
| (Address
of principal executive offices) | (Zip
code) |
| Lawrence
G. Altadonna - 1345 Avenue of the Americas, New York, New York 10105 | |
| (Name
and address of agent for service) | |

Registrant’s telephone number, including area code: 212-739-3371

Date of fiscal year end: May 31, 2009

Date of reporting period: May 31, 2009

Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e -1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.

A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.

ITEM 1. REPORT TO SHAREHOLDERS

PIMCO Municipal Income Fund II
PIMCO California Municipal Income Fund II
PIMCO New York Municipal Income Fund II
Annual Report
May 31, 2009

Contents — Letter to Shareholders	1
Fund
Insights/Performance & Statistics	2-7
Schedules of
Investments	8-23
Statements of
Assets and Liabilities	24
Statements of
Operations	25
Statements of
Changes in Net Assets	26-27
Statements of
Cash Flows	28-29
Notes to
Financial Statements	30-43
Financial
Highlights	44-46
Report of
Independent Registered Public Accounting Firm	47
Portfolio
Manager Change/Change to the Funds’ Investment Policies and Related Risks	48
Tax
Information/Annual Shareholder Meetings Results	49
Privacy
Policy/Proxy Voting Policies & Procedures	50
Dividend
Reinvestment Plan	51
Board of
Trustees	52-53
Fund Officers	54

PIMCO Municipal Income Funds II Letter to Shareholders

July 15, 2009

Dear Shareholder:

We are pleased to provide you with the annual report for PIMCO Municipal Income Fund II, PIMCO California Municipal Income Fund II, and PIMCO New York Municipal Income Fund II (collectively, the “Funds”) for the fiscal year ended May 31, 2009.

During the first part of the reporting period, greater risk-aversion brought on by the deepening financial crisis led to more sellers than buyers in the municipal bond market. This was a primary factor in causing prices on municipal securities to decline and yields to increase during the reporting period. Municipal bond markets rallied slightly during the second part of the reporting period, as improved liquidity and attractive yields due to oversold conditions encouraged investors to re-enter the market. The municipal bond market is transitioning from a market focused on rates to one primarily focused on credit quality, in part due to the loss of the large municipal bond insurers who provided guarantees on many municipal bonds. Additionally, while liquidity returned somewhat in the second part of the reporting period, large institutional investors, such as insurance companies and banks, remained on the sidelines as they focused on rebuilding their balance sheets, and much of the buying came from individual investor activity.

The unprecedented liquidity constraints and resulting imbalances in the financial markets during the reporting period initiated the following important actions by the Funds:

| • | PIMCO California Municipal
Income Fund II and PIMCO New York Municipal Income Fund II resumed payment of
previously declared but postponed common share dividends. Severe market
disruptions during the first portion of the reporting period negatively
impacted prices for securities, causing asset ratios to decline below an
asset coverage level of at least 200%. This prevented the Funds from paying
common share dividends until the asset coverage level returned to a level of
at least 200%. |
| --- | --- |
| • | In January 2009, the Funds
redeemed portions of their Auction Rate Preferred Shares (“ARPS”). PIMCO
Municipal Income Fund II, PIMCO California Municipal Income Fund II and PIMCO
New York Municipal Income Fund II redeemed $138 million, $97 million and $11
million, respectively. All ARPS redemptions were executed at the full liquidation
preference of $25,000 per share. The redemptions were intended to resolve
issues that served as impediments to the goal of regular, uninterrupted
dividend payments on the Funds’ common shares. |
| • | On April 6, 2009, the Funds
announced a change increasing the amount of Residual Interest Municipal Bonds
(“RIBs”) in which a Fund may invest to 15% from 10% of their total assets.
The change potentially allows the Funds to earn additional tax-free income.
In addition, the use of RIBs, which results in a form of economic leverage,
may allow the Funds to replace or increase leverage to some degree. |

Press releases that include further information on these Fund actions, including more detailed descriptions of potential benefits and risks, are available at www.allianzinvestors.com/closedendfunds.

For specific information on the Funds and their performance, please review the following pages. If you have any questions regarding the information provided, we encourage you to contact your financial advisor or call the Funds’ shareholder servicing agent at (800) 254-5197. In addition, a wide range of information and resources is available on our website www.allianzinvestors.com/closedendfunds.

Together with Allianz Global Investors Fund Management LLC, the Funds’ investment manager, and Pacific Investment Management Company LLC (“PIMCO”), the Funds’ sub-adviser, we thank you for investing with us.

Sincerely,

●	●
Hans W. Kertess	Brian S. Shlissel
Chairman	President
& Chief Executive Officer

5.31.09 | PIMCO Municipal Income Funds II Annual Report 1

| PIMCO Municipal
Income Fund II Fund Insights |
| --- |
| May 31, 2009 (unaudited) |

| • | For the fiscal year ended May 31, 2009, PIMCO
Municipal Income Fund II declined 29.83% on net asset value (“NAV”) and
26.46% on market price, compared with declines of 5.77% on net asset value
and 7.68% on market price for the Lipper Analytical General Municipal Debt
Funds (Leveraged) Average. |
| --- | --- |
| • | High-quality municipal bond yields moved lower
across the yield curve during the twelve-month period, with a more pronounced
decline at the front end of the yield curve. Yields moved higher during the
second half of 2008, but thus far in 2009 there has been a rebound across the
yield curve, with municipal bond yields moving lower. |
| • | Duration hedging strategies in longer-maturity swaps
detracted from performance as longer maturity swap rates moved significantly
lower during the reporting period, with much of the move occurring in the
fourth quarter of 2008. |
| • | Municipal-to-U.S. Treasury yield ratios were very
volatile during the period, crossing levels in late 2008 that were not
experienced before. However, this ratio moved lower in the first part of
2009, with the 10-year ratio decreasing to 87% and the 30-year ratio
increasing to 106%. |
| • | Holdings in the tobacco-securitization sector
detracted from performance as this sector underperformed primarily in the
fourth quarter of 2008 due to the extreme flight-to-quality. However, the
sector partially rebounded year-to-date, especially during May 2009. |
| • | Exposure to corporate-backed municipals detracted
from performance as this sector underperformed during the reporting period,
which was similar to the underperformance in the taxable corporate securities
sector. However, this sector experienced a partial rebound in the latter part
of the reporting period. |
| • | Exposure to both pre-refunded and general obligation
issues benefited returns as both sectors performed well due to increased
investor risk aversion resulting from the financial crisis. However, these
sectors underperformed in the last few months of the period, as investors
moved further out on the risk spectrum. |
| • | Exposure to zero-coupon municipals
detracted from performance as this sector underperformed the unmanaged
Barclays Capital Zero Coupon Index, which declined 6.83% during the reporting
period. However, this sector experienced a partial rebound in the latter part
of the period and zero coupon municipal yields moved lower. |
| • | The municipal yield curve steepened significantly
during the twelve-month period, with investor demand more concentrated on
shorter maturities. Longer-maturity yields increased slightly and
shorter-maturity yields moved significantly lower. The 15- and 20-year
maturity AAA general obligation yields decreased 38 and 11 basis points,
respectively, while the 30-year maturity yield increased 12 basis points. The
two-year yield decreased 131 basis points during the comparable period.
Significant exposure to longer-maturity municipals detracted from performance
as the long portion of the yield curve underperformed. |
| • | Compared to long-taxable sectors, long municipal
issues underperformed primarily due to the rally in U.S. Treasuries in the
fourth quarter of 2008. The Barclays Capital Long Municipal Bond Index (an
unmanaged index generally representative of the long-term tax-exempt bond
market) declined 2.50%, while the Barclays Capital Long Government/Credit (an
unmanaged index generally representative of long-term government and
investment grade corporate debt securities) and the Barclays Capital Long
U.S. Treasury (an unmanaged index of Treasury securities of varying
maturities greater than 10 years) Indices advanced 3.00% and 8.47%,
respectively. |
| • | Municipal bond issuance in 2008 was approximately 9%
lower than in 2007. Year-to-date issuance has been more robust with a variety
of issuers re-entering the market. Municipal bond issuance for the period
from January through May 2009 was $152.85 billion, 15% lower than in the
period from January through May 2008 when issuance reached $180.72 billion. |

2 PIMCO Municipal Income Funds II Annual Report | 5.31.09

| PIMCO Municipal
Income Fund II Fund Insights/Performance & Statistics |
| --- |
| May 31, 2009 (unaudited) |

| Total Return (1) : | Market
Price | | ) |
| --- | --- | --- | --- |
| 1 Year | (26.46)% | (29.83 | )% |
| 5 Year | (0.06)% | (2.39 | )% |
| Commencement of Operations
(6/28/02) to 5/31/09 | 0.14% | (0.17 | )% |

Common Share Market Price/NAV Performance: Commencement of Operations (6/28/02) to 5/31/09

●	Market Price
●	NAV

| Market
Price/NAV: | |
| --- | --- |
| Market Price | $9.56 |
| NAV | $8.97 |
| Premium to NAV | 6.58% |
| Market Price Yield (2) | 8.16% |

Moody’s Ratings (as a % of total investments)

| (1) | Past performance is no guarantee of future
results. Total return is calculated by determining the percentage
change in net asset value or market share price (as applicable) in
the specified period. The calculation assumes that all income dividends
and capital gain distributions have been reinvested. Total return does
not reflect broker commissions or sales charges. Total return for a
period of more than one year represents the average annual total return. |
| --- | --- |
| | Performance
at market price will differ from its results at NAV. Although market
price returns typically reflect investment results over time, during
shorter periods returns at market price can also be influenced by factors
such as changing views about the Fund, market conditions, supply and
demand for the Fund’s shares, or changes
in Fund distributions. |
| | An investment in the Fund involves risk, including
the loss of principal. Total return, market price, market yield and net
asset value will fluctuate with changes in market conditions. This data
is provided for information only and is not intended for trading purposes.
Closed-end funds, unlike open-end funds, are not continuously offered.
There is a onetime public offering and once issued, shares of closed-end
funds are sold in the open market through a stock exchange. Net asset
value is equal to total assets attributable to common shareholders less
total liabilities divided by the number of common shares outstanding.
Holdings are subject to change daily. |
| (2) | Market Price Yield is determined by dividing
the annualized current monthly per share dividend (comprised from net
investment income) payable to common shareholders by the market price
per common share at May 31, 2009. |

5.31.09 | PIMCO Municipal Income Funds II Annual Report 3

| PIMCO
California Municipal Income Fund II Fund Insights |
| --- |
| May 31, 2009 (unaudited) |

| • | For the fiscal year ended May 31, 2009, PIMCO
California Municipal Income Fund II declined 38.32% on net asset value
(“NAV”) and 32.26% on market price, compared with declines of 6.65% on net
asset value and 11.32% on market price for the Lipper California Municipal
Debt Funds Average. |
| --- | --- |
| • | High-quality municipal bond yields moved lower across
the yield curve during the twelve-month period, with a more pronounced
decline at the front end of the yield curve. Yields moved higher during the
second half of 2008, but thus far in 2009 there has been a rebound across the
yield curve, with municipal bond yields moving lower. |
| • | Duration hedging strategies in longer-maturity swaps
detracted from performance as longer maturity swap rates moved significantly
lower during the reporting period, with much of the move occurring in the
fourth quarter of 2008. |
| • | Municipal-to-U.S. Treasury yield ratios were very
volatile during the period, crossing levels in late 2008 that were not experienced
before. However, this ratio moved lower in the first part of 2009, with the
10-year ratio decreasing to 87% and the 30-year ratio increasing to 106%. |
| • | Holdings in the tobacco-securitization sector
detracted from performance as this sector underperformed primarily in the
fourth quarter of 2008 due to the extreme flight-to-quality. However, the
sector has partially rebounded year-to-date, especially in the month of May
2009. |
| • | Exposure to corporate-backed municipals detracted
from performance as this sector underperformed during the reporting period,
which was similar to the underperformance in the taxable corporate securities
sector. However,
this sector experienced a partial rebound in the latter part of the reporting
period. |
| • | Exposure to both pre-refunded and general obligation
issues benefited returns as both sectors performed well due to increased
investor risk aversion resulting from the financial crisis. However, these
sectors underperformed in the last few months of the period, as investors
moved further out on the risk spectrum. |
| • | Exposure to zero-coupon municipals
detracted from performance as this sector underperformed the unmanaged
Barclays Capital Zero Coupon Index, which declined 6.83% during the reporting
period. However,
this sector rebounded in the latter part of the period and zero coupon
municipal yields moved lower. |
| • | Municipal bonds within California, as represented by
the California component of the Barclays Capital Municipal Bond Index,
underperformed the Barclays Capital Municipal Bond Index (“National Index”),
returning 1.47%, compared to 3.57% for the National Index. Year-to-date
through May 2009, California issued $30.58 billion in new municipal bonds, 2%
lower than the comparable period in 2008. |
| • | Long California municipal bonds, as represented by
the Barclays Capital California Municipal Bond Long (22+) Index, declined
4.90% and underperformed the Barclays Capital Long Municipal Bond Index, an
unmanaged index generally representative of the long-term tax-exempt bond
market, which declined 2.50%. The California municipal yield curve steepened
with 30-year yields increasing 95 basis points, while two-year yields
decreased 34 basis points. Significant exposure to longer maturities
detracted from performance as the long portion of the California municipal
yield curve underperformed during the twelve-month period. |

4 PIMCO Municipal Income Funds II Annual Report | 5.31.09

PIMCO California Municipal Income Fund II Fund Insights/Performance & Statistics
May 31, 2009 (unaudited)

| Total Return (1) : — 1 Year | Market
Price — (32.26 | )% | (38.32 | )% |
| --- | --- | --- | --- | --- |
| 5 Year | (1.41 | )% | (4.84 | )% |
| Commencement of Operations
(6/28/02) to 5/31/09 | (1.00 | )% | (2.59 | )% |

Common Share Market Price/NAV Performance:

Commencement of Operations (6/28/02) to 5/31/09

●	Market Price
●	NAV

Market Price/NAV:
Market Price	$8.78
NAV	$7.48
Premium to NAV	17.38%
Market Price Yield (2)	9.13%

Moody’s Rating (as a % of total investments)

| (1) | Past performance
is no guarantee of future results. Total return is calculated
by determining the percentage change in net asset value or market
share price (as applicable) in the specified period. The calculation
assumes that all income dividends and capital gain distributions
have been reinvested. Total return does not reflect broker commissions
or sales charges. Total return for a period of more than one year
represents the average annual total return. |
| --- | --- |
| | Performance
at market price will differ from its results at NAV. Although market
price returns typically reflect investment results over time, during
shorter periods returns at market price can also be influenced by factors
such as changing views about the Fund, market conditions, supply and
demand for the Fund’s shares, or changes in Fund distributions. |
| | An investment
in the Fund involves risk, including the loss of principal. Total return,
market price, market yield and net asset value will fluctuate with
changes in market conditions. This data is provided for information
only and is not intended for trading purposes. Closed-end funds, unlike
open-end funds, are not continuously offered. There is a onetime public
offering and once issued, shares of closed-end funds are sold in the
open market through a stock exchange. Net asset value is equal to total
assets attributable to common shareholders less total liabilities divided
by the number of common shares outstanding. Holdings are subject to
change daily. |
| (2) | Market Price Yield is determined
by dividing the annualized current monthly per share dividend (comprised
from net investment income) payable to common shareholders by the market
price per common share at May 31, 2009. |

5.31.09 | PIMCO Municipal Income Funds II Annual Report 5

| PIMCO
New York Municipal Income Fund II Fund Insights |
| --- |
| May 31, 2009 (unaudited) |

| • | For the fiscal year ended May 31,
2009, PIMCO New York Municipal Income Fund II declined 24.34% on net asset
value (“NAV”) and 22.95% on market price, compared with declines of 6.05% on
net asset value and 8.50% on market price for the Lipper New York Municipal
Debt Funds Average. |
| --- | --- |
| • | High-quality municipal bond yields
moved lower across the yield curve during the twelve-month period, with a
more pronounced decline at the front end of the yield curve. Yields moved
higher during the second half of 2008, but thus far in 2009 there has been a
rebound across the yield curve, with municipal bond yields moving lower. |
| • | Duration hedging strategies in
longer-maturity swaps detracted from performance as longer maturity swap
rates moved significantly lower during the reporting period, with much of the
move occurring in the fourth quarter of 2008. |
| • | Municipal-to-U.S. Treasury yield
ratios were very volatile during the period, crossing levels in late 2008
that were not experienced before. However, this ratio moved lower in the
first part of 2009, with the 10-year ratio decreasing to 87% and the 30-year
ratio increasing to 106%. |
| • | Holdings in the
tobacco-securitization sector detracted from performance as this sector
underperformed primarily in the fourth quarter of 2008 due to the extreme
flight-to-quality. However, the sector has partially rebounded year-to-date,
especially in the month of May 2009. |
| • | Exposure to corporate-backed municipals
detracted from performance as this sector underperformed during the reporting
period, which was similar to the underperformance in the taxable corporate
securities sector. However, this sector experienced a partial rebound in the
latter part of the reporting period. |
| • | Exposure to both pre-refunded and
general obligation issues benefited returns as both sectors performed well
due to increased investor risk aversion resulting from the financial crisis.
However, these sectors underperformed in the last few months of the period,
as investors moved further out on the risk spectrum. |
| • | Exposure to zero-coupon municipals
detracted from performance as this sector underperformed the unmanaged
Barclays Capital Zero Coupon Index, which declined 6.83% during the reporting
period. However this sector rebounded in the latter part of the period and
zero coupon municipal yields moved lower. |
| • | Municipal bonds within New York, as
represented by the New York component of the Barclays Capital Municipal Bond
Index, slightly outperformed the Barclays Capital Municipal Bond Index
(“National Index”) returning 3.71%, as compared to 3.57% for the National
Index. Year-to-date through May 2009, issuers in New York State issued $15.43
billion in bonds, 5% lower than the comparable period in 2008. New York ranks
second nationwide in total issuance of municipal bonds. |
| • | Long New York municipal bonds, as
represented by the Barclays Capital New York Municipal Bond Long (22+) Index,
declined 1.49% and slightly outperformed the Barclays Capital Long Municipal
Bond Index, an unmanaged index generally representative of the long-term
tax-exempt bond market, which declined 2.50%. The New York yield curve
steepened with 30-year yields increasing 30 basis points, while two-year
yields decreased 89 basis points. The New York municipal funds also had
significant positions in the longer portion of the yield curve, which
detracted from performance as that portion of the yield curve underperformed
shorter maturities during the twelve-month period. |

6 PIMCO Municipal Income Funds II Annual Report | 5.31.09

PIMCO New York Municipal Income Fund II Fund Insights/Performance & Statistics
May 31, 2009 (unaudited)

| Total Return (1) : — 1 Year | Market
Price — (22.95 | )% | (24.34 | )% |
| --- | --- | --- | --- | --- |
| 5 Year | 1.60 | % | (0.55 | )% |
| Commencement of Operations
(6/28/02) to 5/31/09 | 0.92 | % | 0.55 | % |

Common Share Market Price/NAV Performance:

Commencement of Operations (6/28/02) to 5/31/09

●	Market Price
●	NAV

| Market
Price/NAV: | |
| --- | --- |
| Market Price | $10.26 |
| NAV | $9.56 |
| Premium to NAV | 7.32% |
| Market Price Yield (2) | 7.75% |

Moody’s Ratings (as a % of total investments)

| (1) | Past performance is no guarantee
of future results. Total return is calculated by determining the
percentage change in net asset value or market share price (as applicable)
in the specified period. The calculation assumes that all income dividends
and capital gain distributions have been reinvested. Total return does
not reflect broker commissions or sales charges. Total return for a
period of more than one year represents the average annual total return. |
| --- | --- |
| | Performance
at market price will differ from its results at NAV. Although market
price returns typically reflect investment results over time, during
shorter periods returns at market price can also be influenced by factors
such as changing views about the Fund, market conditions, supply and
demand for the Fund’s
shares, or changes in Fund distributions. |
| | An investment in the Fund involves
risk, including the loss of principal. Total return, market price, market
yield and net asset value will fluctuate with changes in market conditions.
This data is provided for information only and is not intended for trading
purposes. Closed-end funds, unlike open-end funds, are not continuously
offered. There is a onetime public offering and once issued, shares of
closed-end funds are sold in the open market through a stock exchange.
Net asset value is equal to total assets attributable to common shareholders
less total liabilities divided by the number of common shares outstanding.
Holdings are subject to change daily. |
| (2) | Market Price Yield is determined
by dividing the annualized current monthly per share dividend (comprised
from net investment income) payable to common shareholders by the market
price per common share at May 31, 2009. |

5.31.09 | PIMCO Municipal Income Funds II Annual Report 7

| P IMCO Municipal Income Fund II Schedule of
Investments |
| --- |
| May 31, 2009 |

Principal Amount (000)			Value
MUNICIPAL BONDS & NOTES—97.1%
	Alabama—1.0%
$ 10,000	Birmingham Baptist Medical Centers Special Care Facs.
	Financing
Auth. Rev., Baptist Health Systems, Inc.,
	5.00%,
11/15/30, Ser. A	Baa1/NR	$ 7,285,900
1,235	Montgomery BMC Special Care Facs. Financing Auth. Rev.,
	5.00%,
11/15/29, Ser. B (NPFGC)	A3/AA	1,058,210
2,650	Tuscaloosa Educational Building Auth. Rev.,
	Stillman
College Project, 5.00%, 6/1/26, Ser. A	NR/BBB-	1,931,982
			10,276,092
	Alaska—0.7%
5,900	Northern Tobacco Securitization Corp. Rev.,
	5.00%,
6/1/46, Ser. A	Baa3/NR	3,405,185
3,550	State Housing Finance Corp. Rev.,
	5.25%,
6/1/32, Ser. C (NPFGC)	Aa2/AA	3,526,570
			6,931,755
	Arizona—9.5%
	Health Facs. Auth. Rev., Banner Health,
3,500	5.00%,
1/1/35, Ser. A	NR/AA-	3,248,350
2,860	5.50%,
1/1/38, Ser. D	NR/AA-	2,824,078
29,700	Pima Cnty. Industrial Dev. Auth. Rev.,
	Correctional
Facs., 5.00%, 9/1/39	Aa2/AA	27,936,711
	Salt River Project Agricultural Improvement &
	Power Dist.
Rev., Ser. A (h),
41,100	5.00%,
1/1/37	Aa1/AA	41,487,984
10,000	5.00%,
1/1/39	Aa1/AA	10,113,400
10,500	Salt Verde Financial Corp. Rev., 5.00%, 12/1/37	A3/A	8,391,810
			94,002,333
	Arkansas—0.2%
13,000	Dev. Finance Auth. Rev., Arkansas Cancer Research
	Center
Project, zero coupon, 7/1/46 (AMBAC)	Aa3/NR	1,680,640
	California—4.9%
6,000	Golden State Tobacco Securitization Corp. Rev.,
	5.00%,
6/1/33, Ser. A-1	Baa3/BBB	4,166,400
1,365	Lynwood Utility Auth. Rev., 5.00%, 6/1/29, Ser. A	Aa2/AAA	1,326,343
2,000	Montebello Unified School Dist., GO, 5.00%, 8/1/33 (FSA)	Aa3/AAA	1,958,660
10,500	State, GO, 6.00%, 4/1/38	A2/A	10,821,195
	Statewide Communities Dev. Auth. Rev.,
4,700	Baptist
Univ., 9.00%, 11/1/17, Ser. B (a)(d)	NR/NR	3,917,309
	Methodist
Hospital Project (FHA),
5,500	6.625%,
8/1/29	Aa2/AA	5,945,115
19,500	6.75%,
2/1/38	Aa2/AA	20,920,770
			49,055,792
	Colorado—5.8%
500	Colorado Health Facs. Auth. Rev.,
	Evangelical
Lutheran, 6.125%, 6/1/38, Ser. A	A3/A-	497,645
11,250	Denver City & Cnty. Rev., 5.00%, 11/15/25, Ser. B
(FSA)	Aa3/AAA	11,280,825

8 PIMCO Municipal Income Funds II Annual Report | 5.31.09

| PIMCO Municipal Income Fund II Schedule of
Investments |
| --- |
| May 31, 2009 |

Principal Amount (000)			Value
	Colorado—(continued)
	Health Facs. Auth. Rev.,
$ 1,000	American
Baptist Homes, 5.90%, 8/1/37, Ser. A	NR/NR	$ 663,940
25,000	Catholic
Health Initiatives, 5.50%, 3/1/32, Ser. A	NR/AA	25,718,000
18,305	Exempla,
Inc., 5.625%, 1/1/33, Ser. A	A1/A-	16,446,676
2,000	Evergreen
Country Day School, Inc. Project,
	5.875%,
6/1/37 (a)(d)	NR/BB	1,277,500
1,430	Public Auth. for Colorado Energy Rev., 6.50%, 11/15/38	A2/A	1,407,821
			57,292,407
	Florida—5.0%
8,500	Broward Cnty. Water & Sewer Utility Rev.,
	5.25%,
10/1/34, Ser. A (h)	Aa3/AA	8,599,365
1,000	Clearwater Water Rev., 5.25%, 12/1/39, Ser. A	A2/AA-	971,870
2,335	Hillsborough Cnty. Industrial Dev. Auth. Pollution Control
Rev.,
	Tampa
Electric Co. Project, 5.50%, 10/1/23	Baa2/BBB-	2,341,842
7,135	Jacksonville Health Facs. Auth. Rev.,
	Ascension
Health, 5.25%, 11/15/32, Ser. A	Aa1/AA	7,002,717
3,000	Leesburg Hospital Rev., Leesburg Regional Medical
	Center
Project, 5.50%, 7/1/32	Baa1/BBB+	2,441,430
990	Miami-Dade Cnty. Rev., 5.50%, 10/1/36, Ser. A	A2/A-	965,329
500	Sarasota Cnty. Health Fac. Auth. Rev., 5.75%, 7/1/37	NR/NR	354,625
7,900	State Board of Education, GO, 5.00%, 6/1/38, Ser. D (h)	Aa1/AAA	7,745,871
6,205	State Governmental Utility Auth. Rev.,
	Barefoot
Bay Utilities System, 5.00%, 10/1/29 (AMBAC)	NR/NR	6,212,694
5,000	Sumter Landing Community Dev. Dist. Rev.,
	4.75%,
10/1/35, Ser. A (NPFGC)	Baa1/AA-	2,810,550
10,000	Tallahassee Water & Sewer Rev., 5.00%, 10/1/37 (h)	Aa2/AA	9,820,900
1,500	Winter Springs Water & Sewer Rev.,	NR/AA-
	zero
coupon, 10/1/29 (FGIC-NPFGC)		530,415
			49,797,608
	Georgia—0.2%
2,775	Medical Center Hospital Auth. Rev.,
	Spring
Harbor Green Island Project, 5.25%, 7/1/37	NR/NR	1,883,254
	Illinois—13.1%
2,935	Central Lake Cnty. JT Action Water Agcy. Rev.,
	5.125%, 5/1/28,
Ser. A (AMBAC)	Aa3/NR	3,017,503
1,250	Chicago Motor Fuel Tax Rev., 5.00%, 1/1/38, Ser. A	Aa2/AAA	1,248,062
	Chicago, GO,
10,000	5.00%,
1/1/34, Ser. C (h)	Aa3/AA-	9,832,900
1,635	5.125%,
1/1/29, Ser. A (FGIC-NPFGC)	Aa3/NR	1,638,025
4,065	5.50%,
1/1/40, Ser. C (FGIC-NPFGC)	Aa3/AA-	4,084,553
	Chicago, Lake Shore East, Special Assessment,
3,162	6.625%,
12/1/22	NR/NR	2,515,086
6,700	6.75%,
12/1/32	NR/NR	4,963,829
5,000	Cicero, GO, 5.25%, 12/1/31 (NPFGC)	Baa1/AA-	5,126,500
6,440	Cook Cnty., GO, 5.00%, 11/15/28, Ser. A (FGIC-NPFGC)	Aa2/AA	6,449,596
	Finance Auth. Rev., Ser. A,
2,500	Christian
Homes, Inc., 5.75%, 5/15/31	NR/NR	1,727,800

5.31.09 | PIMCO Municipal Income Funds II Annual Report 9

| PIMCO Municipal Income Fund II Schedule of
Investments |
| --- |
| May 31, 2009 |

Principal Amount (000)			Value
	Illinois—(continued)
$ 250	Leafs
Hockey Club Project, 6.00%, 3/1/37	NR/NR	$ 100,153
700	OSF
Healthcare Systems, 7.125%, 11/15/37	A2/A	732,697
1,500	Sedgebrook,
Inc., 6.00%, 11/15/42	NR/NR	894,555
20,100	Health Facs. Auth. Rev., Elmhurst Memorial Healthcare,
	5.625%,
1/1/28	Baa1/NR	17,821,866
	Hillside, Tax Allocation, Mannheim Redev. Project,
4,500	6.55%,
1/1/20	NR/NR	3,773,520
2,900	7.00%,
1/1/28	NR/NR	2,253,909
68,470	State Sports Facs. Auth. Rev., zero coupon, 6/15/30,
	(converts
to 5.50% on 6/15/10) (AMBAC)	NR/A	63,568,917
			129,749,471
	Indiana—0.1%
4,125	Fort Wayne Pollution Control Rev., General Motors Corp.
	Project,
6.20%, 10/15/25	Caa3/C	519,750
990	Vigo Cnty. Hospital Auth. Rev., Union Hospital, Inc.,
	5.80%,
9/1/47 (a)(d)	NR/NR	688,406
			1,208,156
	Iowa—3.8%
	Finance Auth. Rev.,
	Deerfield
Retirement Community, Inc., Ser. A,
250	5.50%,
11/15/27	NR/NR	156,962
1,075	5.50%,
11/15/37	NR/NR	607,461
4,500	Edgewater
LLC Project, 6.75%, 11/15/42	NR/NR	3,467,880
850	Wedum
Walnut Ridge LLC Project, 5.625%, 12/1/45, Ser. A	NR/NR	442,578
46,000	Tobacco Settlement Auth. Rev., 5.60%, 6/1/34, Ser. B	Baa3/BBB	32,748,780
			37,423,661
	Kentucky—0.7%
	Economic Dev. Finance Auth. Hospital Facs. Rev.,
	Baptist
Healthcare System, Ser. A,
2,000	5.375%,
8/15/24	Aa3/NR	2,103,280
2,500	5.625%,
8/15/27	Aa3/NR	2,591,100
2,500	Catholic
Healthcare Partners, 5.25%, 10/1/30	A1/AA-	2,371,200
			7,065,580
	Louisiana—4.4%
	Public Facs. Auth. Rev., Ochsner Clinic Foundation
Project,
	Ser. B,
4,000	5.50%,
5/15/32, (Pre-refunded @ $100, 5/15/26) (c)	Aaa/NR	4,717,040
3,300	5.50%,
5/15/47	A3/NR	2,593,503
44,395	Tobacco Settlement Financing Corp. Rev.,
	5.875%,
5/15/39, Ser.2001-B	Baa3/BBB	36,351,070
			43,661,613
	Maryland—0.5%
	Health & Higher Educational Facs. Auth. Rev.,
1,000	Adventist
Healthcare, 5.75%, 1/1/25, Ser. A	Baa2/NR	980,810
1,010	King Farm
Presbyterian Community, 5.30%, 1/1/37, Ser. A	NR/NR	580,497
4,050	Washington
Cnty. Hospital, 6.00%, 1/1/43	NR/BBB-	3,523,905
			5,085,212

10 PIMCO Municipal Income Funds II Annual Report | 5.31.09

| PIMCO Municipal Income Fund II Schedule of
Investments |
| --- |
| May 31, 2009 |

Principal Amount (000)			Value
	Massachusetts—7.9%
$ 7,000	Boston Water Rev., 5.00%, 11/1/28, Ser. D (FGIC-NPFGC)	Aa2/AA+	$ 7,017,850
4,610	Dev. Finance Agcy. Rev., Adventcare Project,
	6.75%,
10/15/37, Ser. A	NR/NR	3,441,180
2,900	State College Building Auth. Rev., 5.50%, 5/1/39, Ser. A	A1/A+	3,000,630
	State Turnpike Auth. Rev., Ser. A,
4,295	4.75%,
1/1/34 (AMBAC)	Baa3/A	3,304,917
51,830	5.00%,
1/1/37 (NPFGC)	Baa1/AA-	41,747,510
10,325	5.00%,
1/1/39 (AMBAC)	Baa3/A	8,176,987
12,050	State Water Res. Auth. Rev., 4.75%, 8/1/37, Ser. A (FSA)
(h)	Aaa/AAA	11,579,086
			78,268,160
	Michigan—2.9%
4,545	Garden City Hospital Finance Auth. Rev.,
	5.00%,
8/15/38, Ser. A	NR/NR	2,775,495
800	Public Educational Facs. Auth. Rev., 6.50%, 9/1/37 (a)(d)	NR/BBB-	620,568
3,000	Royal Oak Hospital Finance Auth. Rev.,
	William
Beaumont Hospital, 8.25%, 9/1/39	A1/A	3,357,840
	State Hospital Finance Auth. Rev.,
5,000	Ascension
Health, 5.25%, 11/15/26, Ser. B	Aa1/AA	4,999,850
	Oakwood
Group, Ser. A,
13,500	5.75%,
4/1/32	A2/A	11,376,990
1,925	6.00%,
4/1/22	A2/A	1,798,836
6,000	Tobacco Settlement Finance Auth. Rev., 6.00%, 6/1/48, Ser.
A	NR/BBB	4,137,240
			29,066,819
	Minnesota—0.5%
1,500	Minneapolis Rev., Providence Project, 5.75%, 10/1/37, Ser.
A	NR/NR	1,012,830
280	Minneapolis, Tax Allocation, Grant Park Project, 5.35%,
2/1/30	NR/NR	183,117
	North Oaks Presbyterian Homes Rev.,
2,640	6.00%,
10/1/33	NR/NR	2,171,901
1,530	6.125%,
10/1/39	NR/NR	1,253,055
500	Oronoco Multifamily Housing Rev.,
	Wedum
Shorewood Campus Project, 5.40%, 6/1/41	NR/NR	316,925
			4,937,828
	Mississippi—0.4%
3,605	Business Finance Corp. Pollution Control Rev.,
	System
Energy Resources, Inc. Project, 5.875%, 4/1/22	Ba1/BBB	3,333,796
740	Dev. Bank Special Obligation Projects & Equipment
	Acquisitions
Rev., 5.00%, 7/1/24, Ser. A2 (AMBAC)	NR/A	722,366
			4,056,162
	Missouri—0.1%
690	Hanley Road & North of Folk Ave. Transportation Dist.
Rev.,
	5.00%,
10/1/25	NR/NR	503,058
	Nevada—0.3%
1,450	Clark Cnty., GO, 5.00%, 6/1/31 (FGIC-NPFGC)	Aa1/AA+	1,456,540
1,620	State, GO, 5.00%, 5/15/28, Ser. A (FGIC-NPFGC)	Aa1/AAA	1,547,375
			3,003,915
	New Hampshire—0.0%
360	Health & Education Facs. Auth. Rev.,
	Catholic
Medical Center, 6.125%, 7/1/32, Ser. A	Baa1/BBB+	312,746

5.31.09 | PIMCO Municipal Income Funds II Annual Report 11

| PIMCO Municipal Income Fund II Schedule of
Investments |
| --- |
| May 31, 2009 |

Principal Amount (000)			Value
	New Jersey—2.9%
$ 950	Burlington Cnty. Bridge Commission Rev.,
	Evergreens
Project, 5.625%, 1/1/38	NR/NR	$ 635,712
	Economic Dev. Auth. Rev.,
525	Arbor Glen,
6.00%, 5/15/28, Ser. A	NR/NR	404,880
	Kapkowski
Road Landfill Project, Special Assessment,
4,000	5.75%,
10/1/21	Baa3/NR	3,338,040
11,405	5.75%,
4/1/31	Baa3/NR	8,641,683
	Health Care Facs. Financing Auth. Rev.,
1,500	St. Peters
Univ. Hospital, 5.75%, 7/1/37	Baa2/BBB-	1,231,575
1,830	Trinitas
Hospital, 5.25%, 7/1/30, Ser. A	Baa3/BBB-	1,361,465
3,300	State Educational Facs. Auth. Rev., Fairfield Dickinson
Univ.,
	6.00%,
7/1/25, Ser. D	NR/NR	3,110,085
2,000	State Turnpike Auth. Rev., 5.25%, 1/1/40, Ser. E	A3/A+	2,026,960
13,150	Tobacco Settlement Financing Corp. Rev.,
	5.00%,
6/1/41, Ser. 1A	Baa3/BBB	7,940,364
			28,690,764
	New Mexico—0.5%
	Farmington Pollution Control Rev.,
2,000	5.80%,
4/1/22, Ser. A	Baa3/BB+	1,959,120
3,000	5.80%,
4/1/22, Ser. C	Baa3/BB+	2,938,680
			4,897,800
	New York—1.9%
1,200	Erie Cnty. Industrial Dev. Agcy. Rev.,
	Orchard
Park, Inc. Project, 6.00%, 11/15/36, Ser. A	NR/NR	794,904
	Liberty Dev. Corp. Rev.,
10,000	5.25%,
10/1/35 (h)	A1/A	9,199,100
1,505	5.25%,
10/1/35	A1/A	1,384,465
1,100	Nassau Cnty. Industrial Dev. Agcy. Rev.,
	Amsterdam
at Harborside, 6.70%, 1/1/43, Ser. A	NR/NR	860,552
	New York City Municipal Water Finance Auth. Rev. (h),
4,000	Second Gen.
Resolution, 4.75%, 6/15/35, Ser. DD	Aa3/AA+	3,838,360
2,830	5.00%,
6/15/37, Ser. D	Aa2/AAA	2,834,330
			18,911,711
	North Carolina—0.1%
	Medical Care Commission Rev.,
550	Salemtowne,
5.10%, 10/1/30	NR/NR	370,420
1,000	Village at
Brookwood, 5.25%, 1/1/32	NR/NR	633,580
			1,004,000
	North Dakota—0.3%
3,710	Stark Cnty. Healthcare Rev., Benedictine Living
Communities,
	6.75%,
1/1/33	NR/NR	3,210,708
	Ohio—0.9%
1,000	Cnty. of Montgomery Rev., Miami Valley Hospital,
	6.25%,
11/15/39, Ser. A	Aa3/NR	1,042,010
7,500	Lorain Cnty. Hospital Rev., Catholic Healthcare,
	5.375%,
10/1/30	A1/AA-	7,218,375

12 PIMCO Municipal Income Funds II Annual Report | 5.31.09

| PIMCO Municipal Income Fund II Schedule of
Investments |
| --- |
| May 31, 2009 |

Principal Amount (000)			Value
	Ohio—(continued)
$ 1,000	State Higher Educational Fac. Commission Rev.,
	Univ.
Hospital Health Systems, 6.75%, 1/15/39, Ser. A	A2/A	$ 1,054,030
			9,314,415
	Oregon—0.2%
1,000	Clackamas Cnty. Hospital Fac. Auth. Rev.,
	Legacy
Health Systems, 5.50%, 7/15/35, Ser. A	A2/A+	976,920
1,155	State Department of Administrative Services, CP,
	5.25%,
5/1/39, Ser. A	Aa3/AA-	1,179,105
			2,156,025
	Pennsylvania—4.1%
	Cumberland Cnty. Auth. Retirement Community Rev.,
	Messiah
Village Project, Ser. A,
750	5.625%,
7/1/28	NR/BBB-	577,148
670	6.00%,
7/1/35	NR/BBB-	517,562
3,250	Harrisburg Auth. Rev., Harrisburg Univ. of Science,
	6.00%,
9/1/36, Ser. B	NR/NR	2,651,837
	Montgomery Cnty. Higher Education & Health Auth.
	Hospital
Rev., Abington Memorial Hospital, Ser. A,
5,000	5.125%,
6/1/27	NR/A	4,492,050
3,750	5.125%,
6/1/32	NR/A	3,182,100
11,600	Philadelphia Hospitals & Higher Education Facs. Auth.
Rev.,
	Temple
Univ. Hospital, 6.625%, 11/15/23, Ser. A	Baa3/BBB	11,016,288
500	Philadelphia Water Rev., 5.25%, 1/1/36, Ser. A	A3/A	493,625
17,000	Philadelphia, GO, 5.25%, 12/15/32, Ser. A (FSA)	Aa3/AAA	17,024,990
500	Pittsburgh & Allegheny Cntys. Public Auditorium Auth.
Rev.,
	5.00%,
2/1/29, (AMBAC)	NR/A	491,975
			40,447,575
	Rhode Island—6.0%
76,200	Tobacco Settlement Financing Corp. Rev.,
	6.25%,
6/1/42, Ser. A	Baa3/BBB	59,747,658
	South Carolina—1.4%
	Jobs-Economic Dev. Auth. Rev., Ser. B,
500	Anmed
Health, 5.50%, 2/1/38	NR/AAA	490,065
13,850	Bon Secours,
5.625%, 11/15/30	A3/A-	12,371,097
1,000	State Public Service Auth. Rev., 5.25%, 1/1/39, Ser. A	Aa2/AA-	1,028,000
			13,889,162
	Tennessee—0.4%
	State Energy Acquisition Corp. Rev.,
3,000	5.00%,
2/1/23, Ser. C	Baa1/A	2,641,620
700	5.25%,
9/1/21, Ser. A	Ba1/BBB+	649,054
700	5.25%,
9/1/22, Ser. A	Ba1/BBB+	639,842
500	Sullivan Cnty. Health Educational & Housing Facs.
Rev.,
	Wellmont
Health Systems Project, 5.25%, 9/1/36, Ser. C	NR/BBB+	332,355
			4,262,871
	Texas—12.3%
10	Arlington Independent School Dist., GO,
	5.00%,
2/15/24 (PSF-GTD)	Aaa/NR	10,009

5.31.09 | PIMCO Municipal Income Funds II Annual Report 13

| PIMCO Municipal Income Fund II Schedule of
Investments |
| --- |
| May 31, 2009 |

Principal Amount (000)			Value
	Texas—(continued)
	Aubrey Independent School Dist., GO (PSF-GTD),
$ 130	5.50%,
2/15/33	Aaa/NR	$ 136,635
2,850	5.50%,
2/15/33, (Pre-refunded @ $100, 8/15/14) (c)	Aaa/NR	3,351,002
6,500	Brazos Cnty. Health Facs. Dev. Corp. Rev.,
	Franciscan
Services Corp., 5.375%, 1/1/32	NR/A-	5,204,550
2,500	Dallas Water Rev., 5.25%, 8/15/38	Aa2/AAA	2,485,000
700	HFDC of Central Texas, Inc. Rev.,
	Village at
Gleannloch Farms, 5.50%, 2/15/37, Ser. A	NR/NR	475,300
5,500	Houston Rev., 5.00%, 7/1/25, Ser. C (FGIC-NPFGC)	A1/AA-	5,500,000
770	Keller Independent School Dist., GO,
	4.875%,
8/15/31 (PSF-GTD)	Aaa/AAA	770,239
3,170	Little Elm Independent School Dist.,
	GO, 5.30%,
8/15/29, Ser. A (PSF-GTD)	NR/AAA	3,317,690
	Municipal Gas Acquisition & Supply Corp. I Rev.,
450	5.25%,
12/15/25, Ser. A	A2/A	392,152
15,300	6.25%,
12/15/26, Ser. D	A2/A	14,980,995
6,250	North Dallas Thruway Auth. Rev., 4.75%, 1/1/29
(FGIC-NPFGC)	A2/AA-	6,234,000
	North Harris Cnty. Regional Water Auth. Rev.,
10,300	5.25%,
12/15/33	A3/A+	9,995,738
10,300	5.50%,
12/15/38	A3/A+	10,195,867
	North Texas Tollway Auth. Rev.,
5,000	5.625%,
1/1/33, Ser. B	A2/A-	4,970,700
1,200	5.75%,
1/1/33, Ser. F	A3/BBB+	1,174,188
2,000	Sabine River Auth. Rev., 5.20%, 5/1/28, Ser. C	Caa2/CCC	1,064,120
10,000	San Antonio Electric & Gas System Rev., 5.00%, 2/1/32
(h)	Aa1/AA	10,132,600
1,000	State Public Finance Auth. Rev., 5.875%, 12/1/36, Ser. A	Baa3/BBB-	719,240
8,880	State Turnpike Auth. Central Turnpike System Rev.,
	5.00%,
8/15/42, Ser. A (AMBAC)	Baa1/A	7,459,289
3,250	State Water Financial Assistance, GO, 5.00%, 8/1/36	Aa1/AA	3,275,285
	State, Mobility Fund, GO (h),
10,025	4.75%,
4/1/35, Ser. A	Aa1/AA	9,892,168
17,500	4.75%,
4/1/36	Aa1/AA	17,569,826
3,000	Tarrant Cnty. Cultural Education Facs. Finance Corp. Rev.,
	Baylor
Health Care Systems Project, 6.25%, 11/15/29	Aa2/AA-	3,238,890
			122,545,483
	Virginia—0.2%
1,000	Fairfax Cnty. Industrial Dev. Auth. Rev.,
	Inova
Health System, 5.50%, 5/15/35, Ser. A	Aa2/AA+	1,029,310
2,050	James City Cnty. Economic Dev. Auth. Rev.,
	5.50%,
7/1/37, Ser. A	NR/NR	1,217,926
			2,247,236
	Washington—2.0%
6,350	Central Puget Sound Regional Transportation Auth. Rev.,
	4.75%,
2/1/28, (FGIC-NPFGC)	Aa2/AAA	6,380,798
	Health Care Facs. Auth. Rev.,
1,300	Multicare
Health Systems, 6.00%, 8/15/39, Ser. B	Aa2/AAA	1,319,669
1,000	Seattle
Cancer Care Alliance, 7.375%, 3/1/38	A3/NR	1,057,120

14 PIMCO Municipal Income Funds II Annual Report | 5.31.09

| PIMCO Municipal Income Fund II Schedule of
Investments |
| --- |
| May 31, 2009 |

Principal Amount (000)			Value
	Washington—(continued)
$ 13,000	Virginia
Mason Medical Center, 6.125%, 8/15/37, Ser. A	Baa2/BBB	$ 11,020,100
			19,777,687
	Wisconsin—1.9%
	Badger Tobacco Asset Securitization Corp. Rev.,
1,125	6.00%,
6/1/17, (Pre-refunded @ $100, 6/1/12) (c)	Aaa/AAA	1,252,035
5,520	6.125%,
6/1/27	Aaa/AAA	5,881,726
	Health & Educational Facs. Auth. Rev.,
90	Froedert
& Community Health, 5.375%, 10/1/30	NR/AA-	89,036
1,000	Prohealth
Care, Inc., 6.625%, 2/15/39	A1/A+	1,023,200
10,000	State Rev., 6.00%, 5/1/36, Ser. A	A1/AA-	10,581,200
			18,827,197
	Total Municipal Bonds & Notes (cost—$1,035,370,952)		965,192,554
VARIABLE RATE NOTES (f) —0.8%
	Florida—0.3%
2,830	Highlands Cnty. Health Facs. Auth. Rev., Adventist
	Health
System, 5.00%, 11/15/31, Ser. C	A1/A+	2,538,878
	Illinois—0.5%
5,000	State, GO, 7.97%, 4/1/27, Ser. 783 (FSA) (a)(e)	Aa3/NR	5,205,000
	Total Variable Rate Notes (cost—$7,822,419)		7,743,878
SHORT-TERM INVESTMENTS (g) —2.1%
	Corporate Notes—2.1%
900	American General Finance Corp., 3.875%, 10/1/09	Baa2/BB+	838,596
	CIT Group, Inc.,
2,200	0.974%,
8/17/09, FRN	Ba2/BBB-	2,144,991
6,485	4.125%,
11/3/09	Ba2/BBB-	6,252,928
7,800	Goldman Sachs Group, Inc., 0.934%, 11/16/09, FRN	A1/A	7,788,706
	International Lease Finance Corp., FRN,
1,400	0.881%,
5/24/10	Baa2/BBB+	1,287,948
1,200	1.531%,
1/15/10	Baa2/BBB+	1,142,966
2,000	National City Bank, 1.414%, 9/9/09, FRN	A1/A+	1,988,298
	Total Corporate Notes (cost—$21,087,058)		21,444,433
	Total Investments (cost—$1,064,280,429)— 100.0%		$ 994,380,865

5.31.09 | PIMCO Municipal Income Funds II Annual Report 15

| PIMCO California Municipal Income Fund II Schedule of
Investments |
| --- |
| May 31, 2009 |

Principal Amount (000)			Value
CALIFORNIA MUNICIPAL BONDS &
NOTES—91.2%
$ 5,300	Assoc. of Bay Area Gov’t Finance Auth. Rev.,
	Odd Fellows
Home, 5.20%, 11/15/22, Ser. A (CA Mtg. Ins.)	NR/A	$ 5,359,837
2,000	Bay Area Gov’t Assoc. Lease Rev.,
	5.00%,
7/1/32, Ser. 2002-1 (AMBAC)	NR/AA-	2,015,080
	Bay Area Toll Auth. Rev.,
5,000	5.00%,
4/1/34, Ser. F1	Aa3/AA	4,915,850
20,000	San
Francisco Bay Area, 5.00%, 4/1/39, Ser. F-1 (h)	Aa3/AA	19,543,800
1,410	Community College Financing Auth. Lease Rev.,
	5.00%,
8/1/27, Ser. A (AMBAC)	NR/A	1,408,238
9,945	Coronado Community Dev. Agcy.,
	Tax
Allocation, 4.875%, 9/1/35 (AMBAC)	NR/A	7,848,594
	Corona-Norco Unified School Dist. Public Financing Auth.,
Special Tax,
1,110	5.10%,
9/1/25 (AMBAC)	NR/A	1,113,197
305	5.65%,
9/1/16, Ser. A	NR/NR	284,169
160	5.75%,
9/1/17, Ser. A	NR/NR	147,517
530	6.00%,
9/1/20, Ser. A	NR/NR	456,563
1,000	6.00%,
9/1/25, Ser. A	NR/NR	812,840
4,150	6.10%,
9/1/32, Ser. A	NR/NR	3,443,463
3,000	Dinuba Financing Auth. Lease Rev., 5.10%, 8/1/32 (NPFGC)	Baa1/AA-	3,091,650
8,300	El Dorado Irrigation Dist. & El Dorado Water Agcy.,
CP,
	5.75%,
8/1/39, Ser. A	Aa2/AAA	8,391,466
1,500	Foothill Eastern Corridor Agcy. Toll Road Rev., zero
coupon,
	1/15/27,
(converts to 5.875% on 7/15/09) (IBC-NPFGC)	Baa1/AA-	1,142,460
1,440	Fremont Community Dist., Special Tax, 5.30%, 9/1/30	NR/NR	1,063,166
	Golden State Tobacco Securitization Corp. Rev.,
13,885	5.00%,
6/1/45 (AMBAC-TCRS)	A2/A	11,522,606
1,500	5.00%,
6/1/45, Ser. A	A3/A	1,244,790
6,000	5.00%,
6/1/45, Ser. A (FGIC-TCRS)	A2/A	4,979,160
	Health Facs. Financing Auth. Rev., Ser. A,
	Adventist
Health System,
500	5.00%,
3/1/33	NR/A	438,595
250	5.75%,
9/1/39	NR/A	246,448
	Catholic
Healthcare West,
495	5.00%,
7/1/28	A2/A	450,069
3,000	6.00%,
7/1/39	A2/A	3,011,850
175	Infrastructure & Economic Dev. Bank Rev., 5.25%,
2/1/38	A1/A+	162,997
5,300	Livermore-Amador Valley Water Management Agcy. Rev.,
	5.00%,
8/1/31, Ser. A (AMBAC)	A1/A	5,093,724
7,500	Long Beach Bond Finance Auth. Rev., 5.50%, 11/15/37, Ser.
A	A2/A	6,376,350
10,000	Long Beach Unified School Dist., GO, 5.25%, 8/1/33, Ser. A
(h)	Aa3/AA-	10,085,500
	Los Angeles, CP (NPFGC),
9,895	5.00%,
2/1/27	A1/AA-	9,916,274
2,685	5.00%,
10/1/27, Ser. AU	A2/AA-	2,692,142
10,000	Los Angeles Community College Dist., GO,
	5.00%,
8/1/33, Ser. F-1 (h)	Aa2/AA	9,806,800
	Los Angeles Department of Water & Power Rev.,
15,000	4.75%,
7/1/30, Ser. A-2 (FSA) (h)	Aaa/AAA	15,022,950
16,950	5.125%,
7/1/41, Ser. A (FGIC-TCRS)	Aa3/AA	16,725,921
11,000	Los Angeles Unified School Dist., GO, 5.00%, 1/1/34, Ser.
I	Aa3/AA-	10,740,950

16 PIMCO Municipal Income Funds II Annual Report | 5.31.09

PIMCO California Municipal Income Fund II Schedule of Investments
May 31, 2009

Principal Amount (000)			Value
	Manteca
Redev. Agcy., Tax Allocation,
$ 7,295	5.00%,
10/1/32 (FSA)	Aa3/AAA	$ 7,584,684
10,000	5.00%,
10/1/36 (AMBAC)	NR/A	8,809,400
5,330	Manteca
Unified School Dist., Special Tax,
	5.00%,
9/1/29, Ser. C (NPFGC)	Baa1/AA-	5,364,485
4,000	Merced
Cnty., CP, Juvenile Justice Correctional Fac.,
	5.00%,
6/1/32 (AMBAC)	A3/NR	3,930,240
5,000	Metropolitan
Water Dist. Rev., 5.00%, 7/1/37, Ser. A (h)	Aa2/AAA	5,089,550
4,700	Moreno
Valley Unified School Dist. Community Facs. Dist., Special Tax, 5.20%, 9/1/36	NR/NR	3,260,155
10,000	Placentia-Yorba
Linda Unified School Dist., CP, 5.00%, 10/1/32 (FGIC-NPFGC)	A2/AA-	9,717,600
	Riverside
Unified School Dist. Community Facs. Dist. No. 15, Special Tax, Ser. A,
1,000	5.15%, 9/1/25	NR/NR	763,470
1,000	5.25%,
9/1/30	NR/NR	738,940
1,000	5.25%,
9/1/35	NR/NR	716,840
3,510	Riverside,
CP, 5.00%, 9/1/33 (AMBAC)	NR/A+	3,252,015
	Roseville
Redev. Agcy., Tax Allocation (NPFGC),
3,730	5.00%,
9/1/27, Ser. B	A3/AA-	3,359,499
3,365	5.00%,
9/1/32	A3/AA-	2,826,364
2,030	5.00%,
9/1/33	A3/AA-	1,687,092
7,500	San
Bernardino Community College Dist., GO,
	6.25%,
8/1/33, Ser. A	Aa3/AA-	8,158,725
8,000	San Diego
Cnty. Water Auth., CP, 5.00%, 5/1/29, Ser. A (NPFGC)	Aa3/AA+	8,156,000
	San Diego
Public Facs. Financing Auth. Lease Rev.,
655	5.00%,
5/15/29, Ser. A (FGIC-NPFGC)	A2/AA-	644,428
1,500	Fire &
Life Safety Facs., 5.00%, 4/1/32, Ser. B (NPFGC)	Baa1/AA-	1,331,325
1,000	San Diego
Public Facs. Financing Auth. Rev.,
	5.25%,
5/15/39, Ser. A	A2/A+	992,500
	San Diego
Public Facs. Financing Auth. Water Rev.,
11,000	5.00%,
8/1/32 (NPFGC)	A2/AA-	10,590,360
4,000	5.25%,
8/1/38, Ser. A	A1/AA-	3,946,800
2,800	San Diego
Regional Building Auth. Rev.,
	Cnty.
Operations Center & Annex, 5.375%, 2/1/36, Ser. A	A1/AA+	2,807,112
5,000	San Diego
Unified School Dist., GO,
	4.75%,
7/1/27, Ser. D-2 (FSA)	Aa2/AAA	5,046,600
300	San
Francisco City & Cnty.,	A1/AA-	298,050
5,585	5.25%,
4/1/31, CP, Ser. A
	Airports
Commission Rev., 4.50%, 5/1/28, Ser. 2 (NPFGC)	A1/AA-	4,925,188
	San Jose
Libraries & Parks, GO,
14,970	5.00%,
9/1/32, Ser. 760 (NPFGC) (h)	Aaa/AAA	15,134,071
10,190	5.125%,
9/1/31	Aa1/AAA	10,334,698
9,150	San Jose
Unified School Dist., GO,
	Santa Clara
Cnty., 5.00%, 8/1/27, Ser. A (FSA)	Aa3/AAA	9,334,190
1,730	San Rafael
City High School Dist., GO,
	5.00%,
8/1/27, Ser. B (FSA)	Aa3/AAA	1,764,825
3,280	San Rafael
Elementary School Dist., GO,
	5.00%,
8/1/27, Ser. B (FSA)	Aa3/AAA	3,346,026

5.31.09 | PIMCO Municipal Income Funds II Annual Report 17

PIMCO California Municipal Income Fund II Schedule of Investments
May 31, 2009

| Principal Amount (000) — $ 1,260 | Santa Cruz
Cnty., CP, 5.25%, 8/1/32 | A3/NR | Value — $ 1,307,124 |
| --- | --- | --- | --- |
| 1,500 | Santa Cruz
Cnty. Redev. Agcy., Tax Allocation, | | |
| | 7.00%,
9/1/36, Ser. A | A2/A | 1,608,630 |
| | State, GO, | | |
| 2,500 | 5.00%,
9/1/31 | A2/A | 2,295,250 |
| 1,400 | 5.00%,
12/1/37 | A2/A | 1,237,068 |
| 7,000 | 5.00%,
4/1/38 | A2/A | 6,172,740 |
| 11,000 | 6.00%,
4/1/38 | A2/A | 11,336,490 |
| 7,915 | State
Public Works Board Rev., Regents Univ., | | |
| | 5.00%,
3/1/33, Ser. A | Aa2/AA- | 7,554,630 |
| | Statewide
Communities Dev. Auth. Rev., | | |
| 3,495 | Bentley
School, 6.75%, 7/1/32 (a)(b) | NR/NR | 2,924,197 |
| | Catholic
Healthcare West, | | |
| 1,800 | 5.50%,
7/1/31, Ser. D | A2/A | 1,737,108 |
| 1,800 | 5.50%,
7/1/31, Ser. E | A2/A | 1,737,090 |
| 1,250 | Huntington
Park Chapter School Project, 5.25%, 7/1/42, Ser. A | NR/NR | 816,850 |
| 9,700 | Jewish
Home, 5.50%, 11/15/33 (CA St. Mtg.) | NR/A | 9,200,741 |
| 2,770 | Kaiser
Permanente, 5.50%, 11/1/32, Ser. A | NR/A+ | 2,560,865 |
| | Methodist
Hospital Project (FHA), | | |
| 2,000 | 6.25%,
8/1/24 | Aa2/AA | 2,146,000 |
| 2,400 | 6.625%,
8/1/29 | Aa2/AA | 2,594,232 |
| 8,800 | 6.75%,
2/1/38 | Aa2/AA | 9,441,168 |
| 500 | Peninsula
Project, 5.00%, 11/1/29 | NR/NR | 331,015 |
| 3,700 | St. Joseph,
5.75%, 7/1/47, Ser. A (FGIC) | Aa3/AA- | 3,559,585 |
| 1,365 | Windrush School,
5.50%, 7/1/37 | NR/NR | 950,258 |
| 1,510 | Statewide
Financing Auth. Tobacco Settlement Rev., | | |
| | 5.625%,
5/1/29, Ser. A | Baa3/NR | 1,199,000 |
| | Tobacco
Securitization Agcy. Rev., | | |
| 4,500 | Alameda
Cnty., 6.00%, 6/1/42 | Baa3/NR | 3,143,340 |
| 1,800 | Stanislaus
Funding, 5.875%, 6/1/43, Ser. A | Baa3/NR | 1,230,498 |
| | Univ. Rev., | | |
| 5,500 | 4.75%,
5/15/35, Ser. F (FSA) (h) | Aaa/AAA | 5,194,365 |
| 5,000 | 4.75%,
5/15/35, Ser. G (FGIC-NPFGC) (h) | Aa1/AA | 4,722,150 |
| 5,650 | 4.75%,
5/15/38, Ser. B | Aa2/AA- | 5,122,799 |
| | Ventura
Cnty. Community College Dist., GO, | | |
| 10,000 | 5.00%,
8/1/27, Ser. A (NPFGC) (h) | Aa3/AA | 10,126,600 |
| 5,000 | 5.50%,
8/1/33, Ser. C | Aa3/AA | 5,111,500 |
| 1,555 | Ventura
Unified School Dist., GO, 5.00%, 8/1/32, Ser. F (FSA) | Aa3/AAA | 1,558,048 |
| | Total
California Municipal Bonds & Notes (cost—$412,653,759) | | 420,385,589 |
| CALIFORNIA VARIABLE RATE NOTES (a)(d)(f) —2.4% | | | |
| 6,035 | Desert
Community College Dist., GO, | | |
| | 7.84%,
8/1/32, Ser. 3016 (FSA) (e) | NR/AAA | 5,903,015 |
| 5,000 | San Diego
Community College Dist., GO, 8.215%, 8/1/33 | NR/AA+ | 5,203,500 |
| | Total
California Variable Rate Notes (cost—$10,977,691) | | 11,106,515 |

18 PIMCO Municipal Income Funds II Annual Report | 5.31.09

PIMCO California Municipal Income Fund II Schedule of Investments
May 31, 2009

Principal Amount (000)			Value
OTHER MUNICIPAL BONDS &
NOTES—1.6%
	New York—0.7%
$ 1,250	Liberty
Dev. Corp. Rev., 5.25%, 10/1/35	A1/A	$ 1,149,887
1,900	New York
City Municipal Water Finance Auth. Rev.,
	5.00%,
6/15/37, Ser. D (h)	Aa2/AAA	1,902,907
			3,052,794
	Puerto Rico—0.9%
2,200	Aqueduct
& Sewer Auth. Rev., 6.00%, 7/1/38, Ser. A	Baa3/BBB-	2,187,878
2,505	Public
Building Auth. Rev., Gov’t Facs.,
	5.00%,
7/1/36, Ser. I (GTD)	Baa3/BBB-	2,095,608
			4,283,486
	Total Other
Municipal Bonds & Notes (cost—$7,190,749)		7,336,280
CORPORATE BONDS & NOTES (g) —0.9%
5,000	SLM Corp.,
1.252%, 7/26/10, FRN (cost—$4,539,087)	Ba1/BBB-	4,400,255
SHORT-TERM INVESTMENTS (g) —3.9%
	Corporate Notes—3.9%
500	American
General Finance Corp., 3.875%, 10/1/09	Baa2/BB+	465,887
	CIT Group,
Inc.,
1,100	0.974%,
8/17/09, FRN	Ba2/BBB-	1,072,496
9,200	4.125%,
11/3/09	Ba2/BBB-	8,870,769
2,900	Goldman
Sachs Group, Inc., 0.934%, 11/16/09, FRN	A1/A	2,895,801
	International
Lease Finance Corp.,
700	0.881%,
5/24/10, FRN	Baa2/BBB+	643,974
500	1.531%,
1/15/10, FRN	Baa2/BBB+	476,236
1,839	4.375%,
11/1/09	Baa2/BBB+	1,763,516
1,651	4.75%,
7/1/09	Baa2/BBB+	1,625,089
	Total
Corporate Notes (cost—$17,633,681)		17,813,768
	Total Investments (cost—$452,994,967)— 100.0%		$ 461,042,407

5.31.09 | PIMCO Municipal Income Funds II Annual Report 19

PIMCO New York Municipal Income Fund II Schedule of Investments
May 31, 2009

Principal Amount (000)			Value
NEW YORK MUNICIPAL BONDS &
NOTES—85.8%
$ 2,400	Erie Cnty.
Industrial Dev. Agcy. Rev.,
	Orchard
Park, Inc. Project, 6.00%, 11/15/36, Ser. A	NR/NR	$ 1,589,808
	Liberty
Dev. Corp. Rev., Goldman Sachs Headquarters,
4,120	5.25%,
10/1/35 (h)	A1/A	3,790,029
3,000	5.25%,
10/1/35	A1/A	2,759,730
3,500	5.50%,
10/1/37	A1/A	3,331,160
	Metropolitan
Transportation Auth. Rev.,
1,850	5.00%,
11/15/30, Ser. A (FSA)	Aa3/AAA	1,869,203
2,000	5.00%,
11/15/34, Ser. B	NR/AA	1,980,060
8,000	5.25%,
11/15/31, Ser. E	A2/A	8,012,240
7,000	5.35%,
7/1/31, Ser. B	A1/AAA	7,019,320
5,000	5.50%,
11/15/39, Ser. A	NR/AA	5,129,500
3,570	Mortgage
Agcy. Rev., 4.75%, 10/1/27, Ser. 128	Aa1/NR	3,513,987
2,400	Nassau
Cnty. Industrial Dev. Agcy. Rev.,
	Amsterdam
at Harborside, 6.70%, 1/1/43, Ser. A	NR/NR	1,877,568
	New York
City Health & Hospital Corp. Rev., Ser. A,
1,100	5.375%,
2/15/26	A1/A+	1,109,108
2,000	5.45%,
2/15/26	A1/A+	2,020,300
	New York
City Industrial Dev. Agcy. Rev.,
975	Eger Harbor
Project, 4.95%, 11/20/32, Ser. A (GNMA)	NR/AA+	920,985
1,415	Liberty
Interactive Corp., 5.00%, 9/1/35	Ba2/BB+	997,886
1,500	Queens
Baseball Stadium, 6.50%, 1/1/46	Aa2/AAA	1,616,235
1,190	Staten
Island Univ. Hospital Project, 6.45%, 7/1/32, Ser. C	Ba2/NR	1,036,252
1,500	United
Jewish Appeal Fed. Project, 5.00%, 7/1/27, Ser. A	Aa1/NR	1,543,950
	Yankee
Stadium,
5,000	5.00%,
3/1/31 (FGIC)	Baa3/BBB-	4,256,550
2,400	5.00%,
3/1/36 (NPFGC)	Baa1/AA-	1,953,792
4,900	7.00%,
3/1/49	Aa2/AAA	5,359,179
1,500	New York
City Municipal Water Finance Auth. Rev.,
	5.25%,
6/15/40, Ser. EE	Aa3/AA+	1,536,405
	New York
City Transitional Finance Auth. Rev.,
10,000	5.00%,
11/1/27, Ser. B	Aa1/AAA	10,171,900
5,000	5.25%,
1/15/39, Ser. S-3	A1/AA-	4,933,100
	New York
City Trust for Cultural Res. Rev.,
2,700	Julliard
School, 5.00%, 1/1/34, Ser. A	Aa2/AA	2,738,907
7,785	Wildlife
Conservation Society, 5.00%, 2/1/34 (FGIC-NPFGC)	Aa3/AA-	7,852,107
4,000	New York
City, GO, 5.00%, 3/1/33, Ser. I	Aa3/AA	3,966,720
3,600	Port Auth.
of New York & New Jersey Rev.,
	5.00%,
4/15/32, Ser. 125 (FSA)	Aa3/AAA	3,671,388
	State
Dormitory Auth. Rev.,
3,000	5.00%,
3/15/38, Ser. A	NR/AAA	2,986,170
80	5.25%,
9/1/28, (Pre-refunded @ $102, 9/1/09)
(Radian) (c)	Baa3/BBB-	82,514
1,320	5.25%,
9/1/28 (Radian)	Baa3/BBB-	1,234,900
7,490	5.50%,
5/15/31, Ser. A (AMBAC)	A1/AA-	7,781,810
2,600	Catholic
Health of Long Island, 5.10%, 7/1/34	Baa1/BBB	2,089,880
2,000	Kaleida
Health Hospital, 5.05%, 2/15/25 (FHA)	NR/AAA	1,995,560
5,300	Lenox Hill
Hospital, 5.50%, 7/1/30	Ba1/NR	4,387,764

20 PIMCO Municipal Income Funds II Annual Report | 5.31.09

| PIMCO New York Municipal Income Fund II Schedule of
Investments |
| --- |
| May 31, 2009 |

Principal Amount (000)			Value
	Memorial
Sloan-Kettering Cancer Center,
$ 2,750	5.00%,
7/1/35, Ser. 1	Aa2/AA	$ 2,691,068
2,000	5.00%,
7/1/36, Ser. A1	Aa2/AA	1,950,660
1,000	New York
Univ. Hospital, 5.625%, 7/1/37, Ser. B	Baa2/BB+	876,060
5,850	North
General Hospital, 5.00%, 2/15/25	NR/AA-	5,851,521
5,000	Rochester
General Hospital, 5.00%, 12/1/35 (Radian)	NR/BBB-	4,004,800
	Teachers
College,
4,270	5.00%,
7/1/32 (NPFGC)	A1/NR	4,331,787
3,000	5.50%,
3/1/39	A1/NR	3,013,200
3,000	Yeshiva
Univ., 5.125%, 7/1/34 (AMBAC)	Aa2/NR	2,851,680
5,000	State Environmental Facs. Corp. Rev., 5.125%, 6/15/38,
Ser. A	Aa1/AA+	5,076,350
1,000	State Thruway Auth. Rev., 4.75%, 1/1/29, Ser. G (FSA)	Aa3/AAA	982,450
6,000	State Urban Dev. Corp. Rev., 5.00%, 3/15/36, Ser. B-1 (h)	NR/AAA	6,022,620
	Triboro Bridge & Tunnel Auth. Rev.,
710	5.00%,
1/1/32, Ser. A (FGIC-TCRS)	Aa2/AA-	712,868
5,000	5.25%,
11/15/34, Ser. A-2 (h)	Aa2/AA-	5,127,150
1,815	Ulster Cnty. Industrial Dev. Agcy. Rev., 6.00%, 9/15/37,
Ser. A	NR/NR	1,284,929
2,000	Warren & Washington Cntys. Industrial Dev. Agcy. Rev.,
	Glens Falls
Hospital Project, 5.00%, 12/1/35, Ser. A (FSA)	Aa3/AAA	2,006,380
750	Westchester Cnty. Industrial Dev. Agcy. Continuing
	Care
Retirement Rev., Kendal on Hudson Project,
	6.50%,
1/1/34, Ser. A, (Pre-refunded @ $100, 1/1/13) (c)	NR/NR	869,055
	Total New York Municipal Bonds & Notes
(cost—$167,715,075)		164,768,545
OTHER MUNICIPAL BONDS & NOTES—7.2%
	California—0.5%
1,000	Health Facs. Financing Auth. Rev.,
	Catholic
Healthcare West, 6.00%, 7/1/39, Ser. A	A2/A	1,003,950
	Florida—1.0%
1,000	Clearwater Water Rev., 5.25%, 12/1/39, Ser. A	A2/AA-	971,870
1,000	Miami-Dade Cnty. Rev., 5.50%, 10/1/36, Ser. A	A2/A-	975,080
			1,946,950
	Louisiana—0.5%
1,000	Parish of East Baton Rouge Rev., 5.25%, 2/1/39, Ser. A	A1/AA-	988,070
	Puerto Rico—5.2%
4,600	Aqueduct & Sewer Auth. Rev., 6.00%, 7/1/38, Ser. A	Baa3/BBB-	4,574,654
5,675	Children’s Trust Fund Tobacco Settlement Rev.,
	5.625%,
5/15/43	Baa3/BBB	3,974,827
	Sales Tax Financing Corp. Rev., Ser. A,
14,250	zero
coupon, 8/1/54 (AMBAC)	A1/AA-	745,845
12,900	zero
coupon, 8/1/56	A1/A+	592,497
			9,887,823
	Total Other Municipal Bonds & Notes (cost—$16,434,218)		13,826,793

5.31.09 | PIMCO Municipal Income Funds II Annual Report 21

| PIMCO New York Municipal Income Fund II Schedule of
Investments |
| --- |
| May 31, 2009 |

Principal Amount (000)			Value
NEW YORK VARIABLE RATE NOTES (a)(d)(f) —3.0%
	JP Morgan Chase Putters/Drivers Trust Rev.,
$ 5,000	7.804%,
7/1/33, Ser. 3382	Aa1/NR	$ 5,241,700
500	8.295%,
6/15/31, Ser. 3223	NR/AA+	535,255
	Total New York Variable Rate Notes (cost—$5,393,458)		5,776,955
CORPORATE BONDS & NOTES (g) —2.5%
4,300	American General Finance Corp., 4.625%, 9/1/10	Baa2/BB+	3,223,306
1,900	CIT Group, Inc., 5.80%, 7/28/11	Ba2/BBB-	1,484,702
	Total Corporate Bonds & Notes (cost—$4,402,252)		4,708,008
SHORT-TERM INVESTMENTS (g) —1.5%
	Corporate Notes—1.5%
700	American General Finance Corp., 1.542%, 10/2/09, FRN	Baa2/BB+	556,648
1,900	CIT Group, Inc., 4.125%, 11/3/09	Ba2/BBB-	1,832,007
	International Lease Finance Corp., FRN,
300	0.881%,
5/24/10	Baa2/BBB+	275,989
200	1.531%,
1/15/10	Baa2/BBB+	190,494
	Total Corporate Notes (cost—$2,860,699)		2,855,138
	Total Investments (cost—$196,805,702) —100.0%		$ 191,935,439

22 PIMCO Municipal Income Funds II Annual Report | 5.31.09

| PIMCO Municipal Income Funds II Notes to Schedule of
Investments |
| --- |
| May 31, 2009 |

| Notes to
Schedule of Investments: | |
| --- | --- |
| * | Unaudited. |
| (a) | Private Placement—Restricted as
to resale and may not have a readily available market. Securities with an
aggregate value of $11,708,783, representing 1.18% of total investments in
PIMCO Municipal Income Fund II, $14,030,712, representing 3.04% of total
investments in PIMCO California Municipal Income Fund II and $5,776,955,
representing 3.01% of total investments in PIMCO New York Municipal Income
Fund II. |
| (b) | Illiquid security. |
| (c) | Pre-refunded bonds are
collateralized by U.S. Government or other eligible securities which are held
in escrow and used to pay principal and interest and retire the bonds at the
earliest refunding date (payment date) and/or whose interest rates vary with
changes in a designated base rate (such as the prime interest rate). |
| (d) | 144A Security—exempt from
registration under Rule 144A of the Securities Act of 1933. These securities
may be resold in transactions exempt from registration, typically only to
qualified institutional buyers. Unless otherwise indicated, these securities
are not considered to be illiquid. |
| (e) | Inverse Floater—The interest rate
shown bears an inverse relationship to the interest rate on another security
or the value of an index. The interest rate disclosed reflects the rate in
effect on May 31, 2009. |
| (f) | Variable Rate Notes—Instruments
whose interest rates change on specified date (such as a coupon date or
interest payment date) and/or whose interest rates vary with changes in a
designated base rate (such as the prime interest rate). The interest rate
disclosed reflects the rate in effect on May 31, 2009. |
| (g) | All or partial amount segregated
as collateral for reverse repurchase agreements. |
| (h) | Residual Interest Bonds held in
Trust—Securities represent underlying bonds transferred to a separate
securitization trust established in a tender option bond transaction in which
the Fund acquired the residual interest certificates. These securities serve as
collateral in a financing transaction. |

Glossary:
AMBAC — insured by American
Municipal Bond Assurance Corp.
CA Mtg. Ins. — insured by
California Mortgage Insurance
CA St. Mtg. — insured by
California State Mortgage
CP — Certificates of
Participation
FGIC — insured by Financial
Guaranty Insurance Co.
FHA — insured by Federal Housing
Administration
FRN — Floating Rate Note. The
interest rate disclosed reflects the rate in effect on May 31, 2009.
FSA — insured by Financial
Security Assurance, Inc.
GNMA — insured by Government
National Mortgage Association
GO — General Obligation Bond
GTD — Guaranteed
IBC — Insurance Bond Certificate
NPFGC — insured by National
Public Finance Guarantee Corporation
NR — Not Rated
PSF — Public School Fund
Radian — insured by Radian
Guaranty, Inc.
TCRS — Temporary Custodian
Receipts

See accompanying Notes to Financial Statements | 5.31.09 | PIMCO Municipal Income Funds II Annual Report 23

PIMCO Municipal Income Funds II S tatements of Assets and Liabilities
May 31, 2009

	Municipal II
Assets:
Investments,
at value (cost— $1,064,280,429, $452,994,967 and $196,805,702, respectively)	$994,380,865		$461,042,407	$	191,935,439
Cash	—		172,465		1,517,165
Interest
receivable	17,802,442		6,636,778		2,672,394
Receivable
for investments sold	1,560,000		349,600		15,000
Prepaid
expenses and other assets	46,317		27,905		33,289
Total
Assets	1,013,789,624		468,229,155		196,173,287
Liabilities:
Payable for
floating rate notes	89,161,972		51,012,500		8,186,394
Payable for
reverse repurchase agreements	17,746,000		18,406,000		5,679,000
Dividends
payable to common and preferred shareholders	3,898,871		2,178,471		713,876
Payable to
custodian for cash overdraft	518,002		—		—
Investment
management fees payable	453,207		201,212		91,623
Interest
payable	356,955		196,908		118,873
Payable to
broker for collateral	300,000		—		—
Interest
payable for reverse repurchase agreements	5,236		7,236		2,550
Accrued
expenses and other liabilities	303,090		1,812,311		255,094
Total
Liabilities	112,743,333		73,814,638		15,047,410
Preferred shares ($0.00001 par value and $25,000 net
asset and
liquidation value per share applicable to an aggregate of 14,680, 6,520 and
3,160 shares issued and outstanding, respectively)	367,000,000		163,000,000		79,000,000
Net Assets Applicable to Common
Shareholders	$534,046,291		$231,414,517	$	102,125,877
Composition of Net Assets Applicable to Common
Shareholders:
Common
Stock:
Par value
($0.00001 per share)	$596		$310		$107
Paid-in-capital
in excess of par	845,278,890		431,555,702		151,405,769
Undistributed
(dividends in excess of) net investment income	5,090,783		(2,178,470	)	(467,589	)
Accumulated
net realized loss on investments	(246,424,252	)	(206,204,674	)	(43,979,691	)
Net
unrealized appreciation (depreciation) of investments	(69,899,726	)	8,241,649		(4,832,719	)
Net Assets Applicable to Common
Shareholders	$534,046,291		$231,414,517	$	102,125,877
Common
Shares Outstanding	59,568,368		30,950,140		10,684,803
Net Asset Value Per Common Share	$8.97		$7.48		$9.56

24 PIMCO Municipal Income Funds II Annual Report | 5.31.09 | See accompanying Notes to Financial Statements

PIMCO Municipal Income Funds II S tatements of Operations
For the year ended May 31, 2009

	Municipal II		California Municipal II		New York Municipal II
Investment Income:
Interest	$ 70,639,002		$ 35,207,403		$ 12,729,278
Expenses:
Investment
management fees	6,766,778		3,276,166		1,280,627
Interest
expense	2,233,432		4,852,198		403,258
Auction
agent fees and commissions	1,074,430		542,608		220,433
Legal fees	156,839		102,921		47,304
Shareholder
communications	138,590		61,856		29,321
Trustees’
fees and expenses	113,817		62,743		30,495
Custodian
and accounting agent fees	105,898		143,498		51,846
Audit and
tax services	77,515		60,771		53,565
New York
Stock Exchange listing fees	47,641		24,880		21,482
Transfer
agent fees	39,164		36,741		37,676
Insurance
expense	25,851		13,168		5,496
Miscellaneous	12,075		7,371		4,960
Total
expenses	10,792,030		9,184,921		2,186,463
Less:
investment management fees waived	(574,290	)	(279,190	)	(108,084	)
custody
credits earned on cash balances	(42,775	)	(13,011	)	(10,838	)
Net
expenses	10,174,965		8,892,720		2,067,541
Net Investment Income	60,464,037		26,314,683		10,661,737
Realized and Change In Unrealized Gain
(Loss)
Net
realized gain (loss) on:
Investments	(30,986,906	)	(89,820,349	)	(13,662,767	)
Futures
contracts	(7,068,849	)	(2,876,398	)	(960,187	)
Swaps	(131,861,650	)	(64,692,955	)	(20,236,949	)
Net change
in unrealized appreciation/depreciation of:
Investments	(116,288,436	)	(13,317,190	)	(7,840,767	)
Futures
contracts	(6,565,353	)	(4,502,979	)	(1,197,643	)
Net
realized and change in unrealized loss on investments, futures contracts and swaps	(292,771,194	)	(175,209,871	)	(43,898,313	)
Net Decrease in Net Assets Resulting from Investment
Operations	(232,307,157	)	(148,895,188	)	(33,236,576	)
Dividends on Preferred Shares from Net Investment
Income	(11,200,932	)	(5,697,951	)	(2,025,371	)
Net Decrease in Net Assets Applicable to Common Shareholders Resulting from Investment Operations	$ (243,508,089	)	$ (154,593,139	)	$ (35,261,947	)

See accompanying Notes to Financial Statements | 5.31.09 | PIMCO Municipal Income Funds II Annual Report 25

PIMCO Municipal Income Funds II
Applicable
to Common Shareholders

	Municipal II
	Year ended May 31,
	2009	2008
Investment Operations:
Net
investment income	$ 60,464,037	$	66,423,523
Net
realized gain (loss) on investments, futures contracts and swaps	(169,917,405	)	5,404,191
Net change
in unrealized appreciation/depreciation of investments and futures contracts	(122,853,789	)	(78,458,658	)
Net
decrease in net assets resulting from investment operations	(232,307,157	)	(6,630,944	)
Dividends to Preferred Shareholders from Net Investment
Income	(11,200,932	)	(17,559,291	)
Net
decrease in net assets applicable to common shareholders resulting from
investment operations	(243,508,089	)	(24,190,235	)
Dividends to Common Shareholders from:
Net
Investment Income	(46,297,957	)	(46,046,478	)
Return of
Capital	—		—
Capital Share Transactions:
Reinvestment
of dividends	4,112,714		3,161,576
Total
decrease in net assets applicable to common shareholders	(285,693,332	)	(67,075,137	)
Net Assets Applicable to Common
Shareholders:
Beginning
of year	819,739,623		886,814,760
End of year
(including undistributed (dividends in excess of) net investment income of
$5,090,783 and $2,155,462; $(2,178,470) and $(2,219,623); $(467,589) and
$(621,423); respectively)	$ 534,046,291	$	819,739,623
Common Shares Issued in Reinvestment of
Dividends	419,882		223,853

26 PIMCO Municipal Income Funds II Annual Report | 5.31.09 | See accompanying Notes to Financial Statements

	California Municipal II
	Year ended May 31,			Year ended May 31,
	2009	2008		2009		2008
Investment Operations:
Net
investment income	$ 26,314,683	$	32,439,150	$	10,661,737	$	11,390,311
Net
realized gain (loss) on investments, futures contracts and swaps	(157,389,702	)	(9,422,890	)	(34,859,903	)	436,283
Net change
in unrealized appreciation/depreciation of investments and futures contracts	(17,820,169	)	(36,237,871	)	(9,038,410	)	(12,133,193	)
Net
decrease in net assets resulting from investment operations	(148,895,188	)	(13,221,611	)	(33,236,576	)	(306,599	)
Dividends to Preferred Shareholders from Net Investment
Income	(5,697,951	)	(8,660,050	)	(2,025,371	)	(3,073,529	)
Net
decrease in net assets applicable to common shareholders resulting from
investment operations	(154,593,139	)	(21,881,661	)	(35,261,947	)	(3,380,128	)
Dividends to Common Shareholders from:
Net
Investment Income	(24,711,497	)	(25,748,032	)	(8,466,985	)	(8,420,559	)
Return of
Capital	(1,187,791	)	—		—		—
Capital Share Transactions:
Reinvestment
of dividends	2,137,595		2,114,952		754,665		682,941
Total
decrease in net assets applicable to common shareholders	(178,354,832	)	(45,514,741	)	(42,974,267	)	(11,117,746	)
Net Assets Applicable to Common
Shareholders:
Beginning
of year	409,769,349		455,284,090		145,100,144		156,217,890
End of year
(including undistributed (dividends in excess of) net investment income of
$5,090,783 and $2,155,462; $(2,178,470) and $(2,219,623); $(467,589) and
$(621,423); respectively)	$ 231,414,517	$	409,769,349	$	102,125,877	$	145,100,144
Common Shares Issued in Reinvestment of
Dividends	229,213		150,398		70,913		48,516

See accompanying Notes to Financial Statements | 5.31.09 | PIMCO Municipal Income Funds II Annual Report 27

| P IMCO Municipal Income
Fund II Statement of Cash Flows |
| --- |
| For the year ended May 31, 2009 |

Decrease in Cash from:
Cash flows provided by operating
activities:
Net decrease in net assets resulting from investment
operations	$ (232,307,157	)
Adjustments to reconcile net decrease in net assets
resulting from
investment operations to net cash provided by operating activities:
Purchases
of long-term investments	(508,734,403	)
Proceeds
from sales of long-term investments	831,016,398
Sale of
short-term portfolio investments, net	(17,619,754	)
Net change
in unrealized appreciation/depreciation of investments and futures contracts	126,194,696
Net
realized loss on investments, futures contracts and swaps	166,575,709
Net
amortization on investments	(9,629,032	)
Decrease in
interest receivable	2,169,213
Proceeds
from futures contracts transactions, net	(15,444,085	)
Decrease in
deposits with brokers for future collateral	12,085,100
Increase in
prepaid expense and other assets	(3,410	)
Increase in
interest payable for reverse repurchase agreements	5,236
Periodic
and termination payments of swaps, net	(131,861,650	)
Decrease in
investment management fees payable	(162,093	)
Decrease in
accrued expenses and other liabilities	(85,073	)
Net cash provided by operating activities	222,199,695
Cash flows used for financing activities:
Increase in
payable to broker for collateral	300,000
Increase in
reverse repurchase agreements	17,746,000
Cash
dividends paid (excluding reinvestment of dividends of $4,112,714)	(53,466,278	)
Payments to
retire floating rate notes issued	(133,044,337	)
Cash
receipts on issuance of floating rate notes	63,358,626
Cash
overdraft at custodian	518,002
Redemptions
of preferred shares	(138,000,000	)
Net cash used for financing activities	(242,587,987	)
Net decrease in cash	(20,388,292	)
Cash at beginning of year	20,388,292
Cash at end of year	$ —

The Fund paid $73,872 in cash for interest on reverse repurchase agreements.

28 PIMCO Municipal Income Funds II Annual Report | 5.31.09 | See accompanying Notes to Financial Statements

| PIMCO California Municipal Income Fund II Statement of Cash
Flows |
| --- |
| For the year ended May 31, 2009 |

Decrease in Cash from:
Cash flows provided by operating
activities:
Net
decrease in net assets resulting from investment operations	$ (148,895,188	)
Adjustments to reconcile net decrease in
net assets resulting from investment operations to net cash provided by
operating activities:
Purchases
of long-term investments	(396,916,857	)
Proceeds from sales of long-term investments	721,948,191
Sale of
short-term portfolio investments, net	(15,773,079	)
Net change
in unrealized appreciation/depreciation of investments and futures contracts	8,164,948
Net
realized loss on investments, futures contracts and swaps	166,878,734
Net
amortization on investments	(3,142,666	)
Decrease in
interest receivable	3,565,368
Proceeds
from futures contracts transactions, net	(8,364,012	)
Decrease in
deposits with brokers for future collateral	5,940,000
Increase in
prepaid expense and other assets	(6,493	)
Increase in
interest payable for reverse repurchase agreements	7,236
Periodic
and termination payments of swaps, net	(64,692,955	)
Decrease in
investment management fees payable	(109,925	)
Increase in
accrued expenses and other liabilities	14,727
Net cash provided by operating activities	268,618,029
Cash flows used for financing activities:
Increase in
reverse repurchase agreements	18,406,000
Cash
dividends paid (excluding reinvestment of dividends of $2,137,595)	(29,500,797	)
Payments to
retire floating rate notes issued	(199,581,237	)
Cash
receipts on issuance of floating rate notes	28,796,948
Redemptions
of preferred shares	(97,000,000	)
Net cash used for financing activities	(278,879,086	)
Net decrease in cash	(10,261,057	)
Cash at beginning of year	10,433,522
Cash at end of year	$ 172,465

The Fund paid $64,093 in cash for interest on reverse repurchase agreements.

See accompanying Notes to Financial Statements | 5.31.09 | PIMCO Municipal Income Funds II Annual Report 29

| PIMCO Municipal Income Funds II N otes
to Financial Statements |
| --- |
| May 31, 2009 |

1. Organization and Significant Accounting Policies PIMCO Municipal Income Fund II (‘‘Municipal II’’), PIMCO California Municipal Income Fund II (‘‘California Municipal II’’) and PIMCO New York Municipal Income Fund II (‘‘New York Municipal II’’), collectively referred to as the ‘‘Funds’’ or ‘‘PIMCO Municipal Income Funds II’’, were organized as Massachusetts business trusts on March 29, 2002. Prior to commencing operations on June 28, 2002, the Funds had no operations other than matters relating to their organization and registration as non-diversified, closed-end management investment companies registered under the Investment Company Act of 1940 and the rules and regulations thereunder, as amended. Allianz Global Investors Fund Management LLC (the “Investment Manager”) serves as the investment manager and is an indirect, wholly-owned subsidiary of Allianz Global Investors of America L.P. (“Allianz Global”). Allianz Global is an indirect, wholly-owned subsidiary of Allianz SE, a publicly traded European insurance and financial services company. Each Fund has an unlimited amount of $0.00001 par value per share of common stock authorized.

Under normal market conditions, Municipal II invests substantially all of its assets in a portfolio of municipal bonds, the interest from which is currently exempt from federal income taxes. Under normal market conditions, California Municipal II invests substantially all of its assets in municipal bonds which pay interest that is currently exempt from federal and California state income taxes. Under normal market conditions, New York Municipal II invests substantially all of its assets in municipal bonds which pay interest that is currently exempt from federal, New York State and New York City income taxes. The Funds will generally seek to avoid investing in bonds generating interest income which could potentially subject individuals to alternative minimum tax. The issuers’ abilities to meet their obligations may be affected by economic, political and other developments in a specific state or region.

The preparation of the financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts and disclosures in the Fund’s financial statements. Actual results could differ from those estimated.

In the normal course of business, the Funds enter into contracts that contain a variety of representations which provide general indemnifications. The Funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds that have not yet occurred. However, the Funds expect the risk of any loss to be remote.

The following is a summary of significant accounting policies consistently followed by the Funds:

(a) Valuation of Investments Portfolio securities and other financial instruments for which market quotations are readily available are stated at market value. Market value is generally determined on the basis of last reported sales prices, or if no sales are reported, on the basis of quotes obtained from a quotation reporting system, established market makers, or independent pricing services.

Portfolio securities and other financial instruments for which market quotations are not readily available or for which a development/event occurs that may significantly impact the value of a security, are fair-valued, in good faith, pursuant to procedures established by the Board of Trustees, or persons acting at their discretion pursuant to procedures established by the Board of Trustees. The Funds’ investments are valued daily using prices supplied by an independent pricing service or dealer quotations, or by using the last sale price on the exchange that is the primary market for such securities, or the last quoted mean price for those securities for which the over-the-counter market is the primary market or for listed securities in which there were no sales. Independent pricing services use information provided by market makers or estimates of market values obtained from yield data relating to investments or securities with similar characteristics. Exchange-traded options, futures and options on futures are valued at the settlement price determined by the relevant exchange. Securities purchased on a when-issued or delayed-delivery basis are marked to market daily until settlement at the forward settlement value. Short-term securities maturing in 60 days or less are valued at amortized cost, if their original term to maturity was 60 days or less, or by amortizing their value on the 61st day prior to maturity, if the original term to maturity exceeded 60 days.

The prices used by the Funds to value securities may differ from the value that would be realized if the securities were sold and these differences could be material to the Funds’ financial statements. Each Fund’s net asset value is normally determined as of the close of regular trading (normally, 4:00 p.m. Eastern time) on the New York Stock Exchange (“NYSE”) on each day the NYSE is open for business.

30 PIMCO Municipal Income Funds II Annual Report | 5.31.09

| PIMCO Municipal Income Funds II Notes
to Financial Statements |
| --- |
| May 31, 2009 |

1. Organization and Significant Accounting Policies (continued)

(b) Fair Value Measurement The Funds have adopted the Financial Accounting Standards Board (“FASB”) Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (“SFAS 157”). SFAS 157 clarifies the definition of fair value for financial reporting, establishes a framework for measuring fair value and requires additional disclosures about the use of the fair value measurements. Under SFAS 157, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e. the “exit price”) in an orderly transaction between market participants. The three levels of the fair value hierarchy under SFAS 157 are described below:

| • | Level 1 – quoted prices in active markets for identical
investments that the Funds have the ability to access |
| --- | --- |
| • | Level 2 – valuations based on other significant observable
inputs (including quoted prices for similar investments, interest rates,
prepayment speeds, credit risk, etc.) or quotes from inactive exchanges |
| • | Level 3 – valuations based on significant unobservable
inputs (including the Funds’ own assumptions in determining the fair value of
investments) |

An investment assets or liability’s level within the fair value hierarchy is based on the lowest level input, individually or in the aggregate, that is significant to fair value measurement.

The valuation techniques used by the Funds to measure fair value during the year ended May 31, 2009 maximized the use of observable inputs and minimized the use of unobservable inputs.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

The following is a summary of the inputs used as of May 31, 2009 in valuing each Fund’s investments carried at value:

	Municipal II	California Municipal II	New York Municipal II
Valuation Inputs	Investments In Securities	Investments In Securities	Investments In Securities
Level 1 – Quoted Prices	$ —	$ —	$ —
Level 2 – Other Significant Observable Inputs	994,380,865	461,042,407	191,935,439
Level 3 – Significant Unobservable Inputs	—	—	—
Total	$ 994,380,865	$ 461,042,407	$ 191,935,439

In April 2009, the FASB issued FASB Staff Position No. 157-4. “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly” (“FSP 157-4”). FSP 157-4 provides additional guidance for estimating fair value in accordance with SFAS 157, when the volume and level of activity for the asset or liability have significantly decreased as well as guidance on identifying circumstances that indicate a transaction is not orderly. FSP 157-4 is effective for fiscal years and interim periods ending after June 15, 2009. The Funds’ management is currently evaluating the impact the adoption of FSP 157-4 will have on the Funds’ financial statement disclosures.

(c) Investment Transactions and Investment Income Investment transactions are accounted for on the trade date. Securities purchased and sold on a when-issued or delayed-delivery basis may be settled a month or more after the trade date. Realized gains and losses on investments are determined on an identified cost basis. Interest income adjusted for the accretion of discounts and amortization of premiums is recorded on an accrual basis. Discounts or premiums on debt securities purchased are accreted or amortized, respectively, to interest income over the lives of the respective securities using the effective yield method.

(d) Federal Income Taxes The Funds intend to distribute all of their taxable income and to comply with the other requirements of the U.S. Internal Revenue Code of 1986, as amended, applicable to regulated investment companies. Accordingly, no provision for U.S. federal income taxes is required.

5.31.09 | PIMCO Municipal Income Funds II Annual Report 31

| PIMCO Municipal Income Funds II Notes to
Financial Statements |
| --- |
| May 31, 2009 |

| 1. Organization
and Significant Accounting Policies (continued) |
| --- |
| The FASB issued Interpretation No.
48, ‘‘Accounting for Uncertainty in Income Taxes — an Interpretation of FASB
Statement No. 109’’ (the ‘‘Interpretation’’). The Interpretation establishes
for all entities, including pass-through entities such as the Funds, a
minimum threshold for financial statement recognition of the benefit of
positions taken in filing tax returns (including whether an entity is taxable
in a particular jurisdiction), and requires certain expanded tax disclosures.
The Funds’ management has determined that its evaluation of the
Interpretation has resulted in no material impact to the Funds’ financial
statements at May 31, 2009. The Funds’ federal tax returns for the prior
three fiscal years remain subject to examination by the Internal Revenue
Service. |
| (e) Dividends and Distributions — Common
Stock |
| The Funds declare dividends from
net investment income monthly to common shareholders. Distributions of net
realized capital gains, if any, are paid at least annually. The Funds record
dividends and distributions to their shareholders on the ex-dividend date.
The amount of dividends and distributions from net investment income and net
realized capital gains are determined in accordance with federal income tax
regulations, which may differ from generally accepted accounting principles.
These “book-tax” differences are considered either temporary or permanent in
nature. To the extent these differences are permanent in nature, such amounts
are reclassified within the capital accounts based on their federal income
tax treatment; temporary differences do not require reclassification. To the
extent dividends and/or distributions exceed current and accumulated earnings
and profits for federal income tax purposes; they are reported as dividends
and/or distributions of paid-in-capital in excess of par. |
| (f) Reverse Repurchase Agreements |
| In a reverse repurchase agreement,
the Funds sell securities to a bank or broker-dealer and agree to repurchase
the securities at a mutually agreed date and price. Generally, the effect of
such a transaction is that the Funds can recover and reinvest all or most of
the cash invested in the portfolio securities involved during the term of the
reverse repurchase agreement and still be entitled to the returns associated
with those portfolio securities. Such transactions are advantageous if the
interest cost to the Funds of the reverse repurchase transaction is less than
the returns it obtains on investments purchased with the cash. Unless the
Funds cover their positions in reverse repurchase agreements (by segregating
liquid assets at least equal in amount to the forward purchase commitment),
their obligations under the agreements will be subject to the Funds’
limitations on borrowings. Reverse repurchase agreements involve leverage
risk and also the risk that the market value of the securities that the Funds
are obligated to repurchase under the agreement may decline below the
repurchase price. In the event the buyer of securities under a reverse
repurchase agreement files for bankruptcy or becomes insolvent, the Funds’
use of the proceeds of the agreement may be restricted pending determination
by the other party, or its trustee or receiver, whether to enforce the Funds’
obligation to repurchase the securities. |
| (g) Inverse Floating Rate Transactions —
Residual Interest Municipal Bonds (‘‘RIBs’’) / Residual Interest Tax Exempt
Bonds (‘‘RITEs’’) |
| The Funds may invest in RIBs and
RITEs, (‘‘Inverse Floaters’’) whose interest rates bear an inverse
relationship to the interest rate on another security or the value of an
index. In inverse floating rate transactions, the Funds sell a fixed rate
municipal bond (‘‘Fixed Rate Bond’’) to a broker who places the Fixed Rate
Bond in a special purpose trust (‘‘Trust’’) from which floating rate bonds
(‘‘Floating Rate Notes’’) and Inverse Floaters are issued. The Funds
simultaneously or within a short period of time purchase the Inverse Floaters
from the broker. The Inverse Floaters held by the Funds provide the Funds
with the right to: (1) cause the holders of the Floating Rate Notes to tender
their notes at par, and (2) cause the broker to transfer the Fixed-Rate Bond
held by the Trust to the Funds, thereby collapsing the Trust. Pursuant to
Statement of Financial Accounting Standards No. 140 (‘‘FASB Statement No.
140’’), the Funds account for the transaction described above as a secured
borrowing by including the Fixed Rate Bond in their Schedules of Investments,
and account for the Floating Rate Notes as a liability under the caption
‘‘Payable for floating rate notes’’ in the Funds’ Statements of Assets and
Liabilities. The Floating Rate Notes have interest rates that generally reset
weekly and their holders have the option to tender their notes to the broker
for redemption at par at each reset date. |
| The Funds may also invest in
Inverse Floaters without transferring a fixed rate municipal bond into a
special purpose trust, which are not accounted for as secured borrowings. |

32 PIMCO Municipal Income Funds II Annual Report | 5.31.09

| PIMCO Municipal Income Funds II Notes to
Financial Statements |
| --- |
| May 31, 2009 |

| 1. Organization
and Significant Accounting Policies (continued) |
| --- |
| The Inverse Floaters are created by
dividing the income stream provided by the underlying bonds to create two
securities, one short-term and one long-term. The interest rate on the
short-term component is reset by an index or auction process typically every
7 to 35 days. After income is paid on the short-term securities at current
rates, the residual income from the underlying bond(s) goes to the long-term
securities. Therefore, rising short-term rates result in lower income for the
long-term component and vice versa. The longer-term bonds may be more
volatile and less liquid than other municipal bonds of comparable maturity.
Investments in Inverse Floaters typically will involve greater risk than in
an investment in Fixed Rate Bonds. The Funds may also invest in Inverse
Floaters for the purpose of increasing leverage. |
| The Funds’ restrictions on
borrowings do not apply to the secured borrowings deemed to have occurred for
accounting purposes pursuant to FASB Statement No. 140. Inverse Floaters held
by the Funds are exempt from registration under Rule 144A of the Securities
Act of 1933. |
| Effective April 6, 2009, each
Fund’s investment policy was revised to increase the amount of Inverse
Floaters in which each Fund may invest from 10% to 15% of their respective
total assets. This change potentially allows the Funds to earn additional
tax-free income. In addition, the use of Inverse Floaters, which results in a
form of economic leverage, will allow the Funds to replace or increase
leverage to some degree. |
| In addition to general market
risks, the Funds’ investments in Inverse Floaters may involve greater risk
and volatility than an investment in a fixed rate bond, and the value of
Inverse Floaters may decrease significantly when market interest rates
increase. Inverse Floaters have varying degrees of liquidity, and the market
for these securities may be volatile. These securities tend to underperform
the market for fixed rate bonds in a rising interest rate environment, but
tend to outperform the market for fixed rate bonds when interest rates
decline or remain relatively stable. Although volatile, Inverse Floaters
typically offer the potential for yields exceeding the yields available on
fixed rate bonds with comparable credit quality, coupon, call provisions and
maturity. Trusts in which Inverse Floaters may be held could be terminated
due to market, credit or other events beyond the Funds’ control, which could
require the Funds to reduce leverage and dispose of portfolio investments at
inopportune times and prices. |
| (h) When-Issued/Delayed-Delivery
Transactions |
| These transactions involve a
commitment to purchase or sell securities for a predetermined price or yield,
with payment and delivery taking place beyond the customary settlement
period. When delayed-delivery purchases are outstanding, the Funds will set
aside and maintain until the settlement date in a designated account, liquid
assets in an amount sufficient to meet the purchase price. When purchasing a
security on a delayed-delivery basis, the Funds assume the rights and risks
of ownership of the security, including the risk of price and yield
fluctuations; consequently, such fluctuations are taken into account when
determining the net asset value. The Funds may dispose of or renegotiate a
delayed-delivery transaction after it is entered into, and may sell
when-issued securities before they are delivered, which may result in a
realized gain or loss. When a security is sold on a delayed-delivery basis,
the Funds do not participate in future gains and losses with respect to the
security. |
| (i) Custody Credits on Cash Balances |
| The Funds benefit from an expense
offset arrangement with their custodian bank, whereby uninvested cash
balances earn credits which reduce monthly custodian and accounting agent
expenses. Had these cash balances been invested in income-producing
securities, they would have generated income for the Funds. |
| (j) Interest Expense |
| Interest expense relates to the
Funds’ liability in connection with floating rate notes held by third parties
in conjunction with Inverse Floater transactions and Reverse Repurchase
Agreements. Interest expense is recorded as it is incurred. |
| 2. Principal
Risk |
| In the normal course of business
the Funds trade financial instruments and enter into financial transactions
where risk of potential loss exists due to changes in the market (market
risk) or failure of the other party to a transaction to perform (credit
risk). The main risks from derivative instruments are interest rate, market
price and credit risks. |

5.31.09 | PIMCO Municipal Income Funds II Annual Report 33

| PIMCO Municipal Income Funds II Notes to
Financial Statements |
| --- |
| May 31, 2009 |

| 2. Principal
Risk (continued) |
| --- |
| Interest rate risk is the risk that
fixed income securities will decline in value because of changes in interest
rates. As nominal interest rates rise, the value of certain fixed income
securities held by a Fund is likely to decrease. A nominal interest rate can
be described as the sum of a real interest rate and an expected inflation
rate. Fixed income securities with longer durations tend to be more sensitive
to changes in interest rates, usually making them more volatile than
securities with shorter durations. Duration is useful primarily as a measure
of the sensitivity of a fixed income’s market price to interest rate (i.e.
yield) movements. |
| The Funds will be exposed to credit
risk on parties with whom it trades and will also bear the risk of settlement
default. The Funds minimize concentrations of credit risk by undertaking
transactions with a large number of customers and counterparties on
recognized and reputable exchanges. The Funds could lose money if the issuer
or guarantor of a fixed income security, or the counterparty to a derivatives
contract, repurchase agreement or a loan of portfolio securities, is unable
or unwilling to make timely principal and/or interest payments, or to
otherwise honor its obligations. Securities are subject to varying degrees of
credit risk, which are often reflected in credit ratings. |
| Similar to credit risk, the Funds
may be exposed to counterparty risk, or the risk that an institution or other
entity with which the Funds have unsettled or open transactions will default.
The potential loss could exceed the value of the financial assets recorded in
the financial statements. Financial assets, which potentially expose the
Funds to credit risk, consist principally of cash due from counterparties and
investments. |
| The Funds’ Sub-Adviser, Pacific Investment
Management Company LLC (“PIMCO” or the “Sub-Adviser”), minimizes credit risks
to the Funds by performing extensive reviews of each counterparty and
obtaining approval from their Counterparty Risk Committee prior to entering
into transactions with a third party. All transactions in listed securities
are settled/paid for upon delivery using approved counterparties. The risk of
default is considered minimal, as delivery of securities sold is only made
once a Fund has received payment. Payment is made on a purchase once the
securities have been delivered by the counterparty. The trade will fail if
either party fails to meet its obligation. |
| 3. Financial
Derivative Instruments |
| The FASB issued Statement of
Financial Accounting Standards No. 161, “Disclosures about Derivative
Instruments and Hedging Activities” (“FAS 161” or the “Statement”) requires
qualitative disclosures about objectives and strategies for using
derivatives, quantitative disclosures about fair value amounts of and gains
and losses on derivative instruments, and disclosures about
credit-risk-related contingent features in derivative agreements. The
disclosure requirements of FAS 161 distinguish between derivatives which are
accounted for as “hedges” under FAS 133 and those that do not qualify for
such accounting. The Funds reflect derivatives at fair value and recognize
changes in fair value through the statement of operations, and such
derivatives do not qualify for FAS 133 hedge accounting treatment. |
| (a) Futures Contracts |
| A futures contract is an agreement
between two parties to buy and sell a financial instrument at a set price on
a future date. The Funds may use futures contracts to manage its exposure to
the securities markets or to movements in interest rates, and currency values.
Upon entering into such a contract, the Funds are required to pledge to the
broker an amount of cash or securities equal to the minimum ‘‘initial
margin’’ requirements of the exchange. Pursuant to the contracts, the Funds
agree to receive from or pay to the broker an amount of cash or securities
equal to the daily fluctuation in the value of the contracts. Such receipts
or payments are known as ‘‘variation margin’’ and are recorded by the Funds
as unrealized appreciation or depreciation. When the contracts are closed,
the Funds record a realized gain or loss equal to the difference between the
value of the contracts at the time they were opened and the value at the time
they were closed. Any unrealized appreciation or depreciation recorded is
simultaneously reversed. The use of futures transactions involves various
risks, including the risk of an imperfect correlation in the movements in the
price of futures contracts, interest rates and the underlying hedged assets,
and the possible inability or unwillingness of counterparties to meet the
terms of their contracts. |

34 PIMCO Municipal Income Funds II Annual Report | 5.31.09

| PIMCO Municipal Income Funds II Notes to
Financial Statements |
| --- |
| May 31, 2009 |

| 3. Financial
Derivative Instruments (continued) |
| --- |
| (b) Option Transactions |
| The Funds purchase and write (sell)
put and call options on securities for hedging purposes, risk management
purposes or as part of their investment strategies. The risk associated with
purchasing an option is that the Funds pay a premium whether or not the
option is exercised. Additionally, the Funds bear the risk of loss of premium
and change in market value should the counterparty not perform under the
contract. Put and call options purchased are accounted for in the same manner
as portfolio securities. The cost of securities acquired through the exercise
of call options is increased by the premiums paid. The proceeds from
securities sold through the exercise of put options is decreased by the
premiums paid. |
| When an option is written, the
premium received is recorded as an asset with an equal liability which is
subsequently marked to market to reflect the current market value of the
option written. These liabilities are reflected as options written in the
Statements of Assets and Liabilities. Premiums received from writing options
which expire unexercised are recorded on the expiration date as a realized
gain. The difference between the premium received and the amount paid on
effecting a closing purchase transaction, including brokerage commissions, is
also treated as a realized gain, or if the premium is less than the amount
paid for the closing purchased transactions, as a realized loss. If a call
option written by the Funds is exercised, the premium is added to the proceeds
from the sale of the underlying security in determining whether there has
been a realized gain or loss. If a put option written by the Funds is
exercised, the premium reduces the cost basis of the security. In writing an
option, the Funds bear the market risk of an unfavorable change in the price
of the security underlying the written option. Exercise of a written option
could result in the Funds purchasing a security at a price different from its
current market value. |
| (c) Swap Agreements |
| Swap agreements are privately
negotiated agreements between the Funds and a counterparty to exchange or
swap investment cash flows, assets, foreign currencies or market-linked
returns at specified, future intervals. The Funds may enter into credit
default, cross- currency, interest rate, total return, variance and other
forms of swap agreements in order to manage their exposure to credit,
currency and interest rate risk. In connection with these agreements,
securities may be identified as collateral in accordance with the terms of
the respective swap agreements to provide assets of value and recourse in the
event of default or bankruptcy/insolvency. |
| Payments received or made at the
beginning of the measurement period are reflected as such on the Statements
of Assets and Liabilities and represent payments made or received upon
entering into the swap agreement to compensate for differences between the
stated terms of the swap agreement and prevailing market conditions (credit
spreads, currency exchange rates, interest rates, and other relevant
factors). These upfront payments are recorded as realized gains or losses on
the Statements of Operations upon termination or maturity of the swap. A
liquidation payment received or made at the termination of the swap is
recorded as realized gain or loss on the Statements of Operations. Net
periodic payments received or paid by the Funds are included as part of
realized gains or losses on the Statements of Operations. |
| Entering into these agreements
involves, to varying degrees, elements of credit, legal, market and
documentation risk in excess of the amounts recognized on the Statements of
Assets and Liabilities. Such risks include the possibility that there will be
no liquid market for these agreements, that the counterparties to the
agreements may default on their obligation to perform or disagree as to the
meaning of contractual terms in the agreements and that there may be
unfavorable changes in interest rates. |
| Interest rate swap agreements
involve the exchange by the Funds with another party of their respective
commitments to pay or receive interest (e.g., an exchange of floating rate
payments for fixed rate payments), with respect to the notional amount of
principal. Certain forms of interest rate swap agreements may include: (i)
interest rate caps, under which, in return for a premium, one party agrees to
make payments to the other to the extent that interest rates exceed a
specified rate, or “cap”, (ii) interest rate floors, under which, in return
for a premium, one party agrees to make payments to the other to the extent
that interest rates fall below a specified rate, or “floor”, (iii) interest
rate collars, under which a party sells a cap and purchases a floor or vice
versa in an attempt to protect itself against interest rate movements
exceeding given minimum or maximum levels, (iv) callable interest rate swaps,
under which the counterparty may terminate the swap transaction in whole at
zero cost by a predetermined date and time prior to the maturity date, (v)
spreadlocks, which allow the interest rate swap users to lock in the forward
differential (or spread) between the interest rate swap rate and a specified
benchmark, or (vi) basis swap, under which two parties can exchange variable
interest rates based on different money markets. |

5.31.09 | PIMCO Municipal Income Funds II Annual Report 35

| PIMCO Municipal Income Funds II Notes to
Financial Statements |
| --- |
| May 31, 2009 |

3. Financial Derivative Instruments (continued)

Fair Value of Derivative Instruments as of May 31, 2009 Municipal II — The Fund has no open derivatives at year-end that would be impacted by risk exposures.

The effect of derivative instruments on the Statements of Operations for the six months ended May 31, 2009:

Location	Interest Rate Contracts		Total
Realized Gain (Loss) on:
Futures contracts	$ —		$ —
Options written	—		—
Swaps	(119,491,496	)	(119,491,496)
Foreign currency transactions	—		—
Total Realized Gain (Loss)	$ (119,491,496	)	$ (119,491,496)
Net change in unrealized
appreciation/depreciation of:
Futures contracts	—		—
Options written	—		—
Swaps	89,128,259		89,128,259
Foreign currency transactions	—		—
Total change in unrealized appreciation/depreciation	$ 89,128,259		$ 89,128,259

Municipal II had $350,800,000 maximum notional amount outstanding of interest rate swap agreements for the six months ended May 31, 2009.

36 PIMCO Municipal Income Funds II Annual Report | 5.31.09

| PIMCO Municipal Income Funds II Notes to
Financial Statements |
| --- |
| May 31, 2009 |

3. Financial Derivative Instruments (continued)

California Municipal II — The Fund has no open derivatives at year-end that would be impacted by risk exposures.

The effect of derivative instruments on the Statement of Operations for the six months ended May 31, 2009:

Location	Interest Rate Contracts		Total
Realized Gain (Loss) on:
Futures contracts	$ —		$ —
Options written	—		—
Swaps	(57,992,455	)	(57,992,455)
Foreign currency transactions	—		—
Total Realized Gain (Loss)	$ (57,992,455	)	$ (57,992,455)
Net change in unrealized
appreciation/depreciation of:
Futures contracts	—		—
Options written	—		—
Swaps	49,067,968		49,067,968
Foreign currency transactions	—		—
Total change in unrealized appreciation/depreciation	$ 49,067,968		$ 49,067,968

California Municipal II had $193,400,000 maximum notional amount outstanding of interest rate swap agreements for the six months ended May 31, 2009.

5.31.09 | PIMCO Municipal Income Funds II Annual Report 37

| PIMCO Municipal Income Funds II Notes to
Financial Statements |
| --- |
| May 31, 2009 |

3. Financial Derivative Instruments (continued)

New York Municipal II — The Fund has no open derivatives at year-end that would be impacted by risk exposures.

The effect of derivative instruments on the Statement of Operations for the six months ended May 31, 2009:

Location	Interest Rate Contracts		Total
Realized Gain (Loss) on:
Futures contracts	$ —		$ —
Options written	—		—
Swaps	(18,175,257	)	(18,175,257)
Foreign currency transactions	—		—
Total Realized Gain (Loss)	$ (18,175,257	)	$ (18,175,257)
Net change in unrealized
appreciation/depreciation of:
Futures contracts	—		—
Options written	—		—
Swaps	14,172,628		14,172,628
Foreign currency transactions	—		—
Total change in unrealized appreciation/depreciation	$ 14,172,628		$ 14,172,628

New York Municipal II had $56,000,000 maximum notional amount outstanding of interest rate swap agreements for the six months ended May 31, 2009.

4. Investment Manager/Sub-Adviser

The Funds have Investment Management Agreements (collectively the ‘‘Agreements’’) with the Investment Manager. Subject to the supervision of each Fund’s Board of Trustees, the Investment Manager is responsible for managing, either directly or through others selected by it, the Funds’ investment activities, business affairs and administrative matters. Pursuant to the Agreements, the Investment Manager receives an annual fee, payable on a monthly basis, at an annual rate of 0.65% of each Fund’s average daily net assets, inclusive of net assets attributable to any preferred shares that may be outstanding. In order to reduce each Fund’s expenses, the Investment Manager has contractually agreed to waive a portion of its investment management fees for each Fund at the annual rate of 0.10% of each Fund’s average daily net assets, inclusive of net assets attributable to any preferred shares that may be outstanding through June 30, 2008. Effective July 1, 2008, the contractual fee waiver was reduced to 0.05% of each Funds’ average daily net assets, including net assets attributable to any preferred shares that may be outstanding through June 30, 2009. For the fiscal year ended May 31, 2009, each Fund paid investment management fees at an annualized effective rate of 0.59%.

The Investment Manager has retained its affiliate, the Sub-Adviser, to manage each Fund’s investments. Subject to the supervision of the Investment Manager, the Sub-Adviser is responsible for making all of the Fund’s investment decisions. The Investment Manager, not the Funds, pays a portion of the fees it receives to the Sub-Adviser in return for its services.

38 PIMCO Municipal Income Funds II Annual Report | 5.31.09

| PIMCO Municipal Income Funds II Notes to
Financial Statements |
| --- |
| May 31, 2009 |

| 5. Investments in Securities |
| --- |
| For the year ended May 31, 2009,
purchases and sales of investments, other than short-term securities and U.S.
government obligations were: |

	Municipal II	California Municipal II	New York Municipal II
Purchases	$ 501,334,403	$ 396,916,857	$ 72,634,486
Sales	830,793,338	720,385,312	115,521,303

(a) The weighted average daily balance of reverse repurchase agreements outstanding during the year ended May 31, 2009 for Municipal II, California Municipal II and New York Municipal II was $17,809,255, $16,277,076 and $5,645,917 at a weighted average interest rate of 1.02%, 1.01% and 1.03%, respectively. The total market value of underlying collateral (refer to the Schedules of Investments for positions segregated as collateral for reverse repurchase agreements) for open reverse repurchase agreements at May 31, 2009 was $21,444,433, $22,214,023 and $7,563,146 for Municipal II, California Municipal II and New York Municipal II, respectively.

Open reverse repurchase agreements at May 31, 2009 were:

Counterparty	Rate	Trade Date	Maturity Date	Principal & Interest	Principal
Municipal II:
Barclays Bank	0.75 %	5/8/09	6/5/09	$ 681,341	$ 681,000
	0.75 %	5/18/09	6/3/09	15,092,401	15,088,000
Credit Suisse First Boston	0.75 %	5/20/09	6/3/09	1,977,494	1,977,000
					$ 17,746,000
California Municipal II:
Barclays Bank	0.75 %	5/8/09	6/5/09	$ 8,969,482	$ 8,965,000
	0.75 %	5/18/09	6/3/09	9,443,754	9,441,000
					$ 18,406,000
New York Municipal II:
Barclays Bank	0.75 %	5/8/09	6/5/09	$ 4,368,183	$ 4,366,000
	0.75 %	5/18/09	6/3/09	934,272	934,000
Credit Suisse First Boston	0.75 %	5/20/09	6/3/09	379,095	379,000
					$ 5,679,000

Municipal II, California Municipal II and New York Municipal II received $174,447, $176,006 and $764,226, respectively, in U.S. government agency securities and Municipal II received $300,000 in cash as collateral for open reverse repurchase agreements. Cash collateral received may be invested in accordance with each Fund’s investment strategy. Collateral received as securities cannot be pledged.

6. Income Tax Information

Municipal II:

The tax character of dividends paid were:

	Year ended May 31, 2009	Year ended May 31, 2008
Ordinary Income	$ 5,154,570	$ 5,121,811
Tax Exempt Income	$ 52,344.319	$ 58,483,958

At May 31, 2009, the tax character of distributable earnings of $5,090,783 was comprised entirely from tax-exempt income.

In accordance with U.S. Treasury regulations, the Fund elected to defer realized capital losses of $165,173,378 arising after October 31, 2008. Such losses are treated as arising on June 1, 2009.

5.31.09 | PIMCO Municipal Income Funds II Annual Report 39

| PIMCO Municipal Income Funds II Notes to
Financial Statements |
| --- |
| May 31, 2009 |

6. Income Tax Information (continued)

At May 31, 2009, Municipal II had a capital loss carryforward of $81,236,790 ($6,389,744 of which will expire in 2012 $54,505,416 of which will expire in 2013, $4,473,237 of which will expire in 2014, $7,912,932 of which will expire in 2015, and $7,955,461 of which will expire in 2017), available as a reduction, to the extent provided in the regulations, of any future net realized capital gains. To the extent that these losses are used to offset future realized capital gains, such gains will not be distributed.

For the year ended May 31, 2009, permanent “book-tax” differences were primarily attributable to the differing treatment of inverse floater transactions and swap payments. These adjustments were to decrease undistributed net investment income and decrease accumulated net realized loss by $29,827.

California Municipal II:

The tax character of distributions paid were:

	Year ended May 31, 2009	Year ended May 31, 2008
Ordinary Income	$ 6,111,678	$ 2,997,085
Tax Exempt Income	$ 24,297,770	$ 31,410,997
Return of Capital	$ 1,187,791	—

At May 31, 2009, there were no distributable earnings.

In accordance with U.S. Treasury regulations, the Fund elected to defer realized capital losses of $155,667,522 arising after October 31, 2008. Such losses are treated as arising on June 1, 2009.

At May 31, 2009, California Municipal II had a capital loss carryforward of $49,030,973 ($3,919,943 of which will expire in 2012, $16,328,922 of which will expire in 2013, $5,531,398 of which will expire in 2015, $4,849,597 of which will expire in 2016 and $18,401,113 of which will expire in 2017), available as a reduction, to the extent provided in the regulations, of any future net realized capital gains. To the extent that these losses are used to offset future realized capital gains, such gains will not be distributed.

For the year ended May 31, 2009, permanent “book-tax” differences were primarily attributable to the differing treatment of inverse floater transactions and taxable overdistributions. These adjustments were to decrease dividends in excess of net investment income by $4,135,918, decrease paid-in capital by $4,302,108 and decrease accumulated net realized loss by $166,190.

New York Municipal II:

The tax character of dividends paid were:

	Year ended May 31, 2009	Year ended May 31, 2008
Ordinary Income	$ 1,081,822	$ 284,260
Tax Exempt Income	$ 9,410,534	$ 11,209,828

At May 31, 2009, there were no distributable earnings.

In accordance with U.S. Treasury regulations, the Fund elected to defer realized capital losses of $33,679,109 arising after October 31, 2008. Such losses are treated as arising on June 1, 2009.

At May 31, 2009, New York Municipal II had a capital loss carryforward of $10,319,392 ($378,802 of which will expire in 2012, $5,755,677 of which will expire in 2013, $51,848 of which will expire in 2015, $1,171,157 of which will expire in 2016 and $2,961,908 of which will expire in 2017), available as a reduction, to the extent provided in the regulations, of any future net realized capital gains. To the extent that these losses are used to offset future realized capital gains, such gains will not be distributed.

For the year ended May 31, 2009, permanent “book-tax” differences were primarily attributable to the differing treatment of inverse floater transactions and swap payments. These adjustments were to increase dividends in excess of net investment income by $15,547, decrease paid-in capital by $186 and decrease accumulated net realized loss by $15,733.

40 PIMCO Municipal Income Funds II Annual Report | 5.31.09

| PIMCO Municipal Income Funds II Notes to
Financial Statements |
| --- |
| May 31, 2009 |

6. Income Tax Information (continued)

The cost of investments for federal income tax purposes and gross unrealized appreciation and gross unrealized depreciation of investments at May 31, 2009 were:

Municipal II	Cost of Investments — $ 974,690,419	Gross Unrealized Appreciation — $ 25,102,990	Gross Unrealized Depreciation — $ (95,016,800	)	Net Unrealized Appreciation (Depreciation) — $ (69,913,810	)
California Municipal II	401,604,124	18,881,925	(12,146,454	)	6,735,471
New York Municipal II	188,391,781	5,025,869	(9,839,776	)	(4,813,907	)

7. Auction-Rate Preferred Shares

Municipal II has outstanding 2,936 shares of Preferred Shares Series A, 2,936 shares of Preferred Shares Series B, 2,936 shares of Preferred Shares Series C, 2,936 shares of Preferred Shares Series D and 2,936 shares of Preferred Shares Series E, each with a net asset and liquidation value of $25,000 per share plus any accumulated, unpaid dividends.

California Municipal II has issued 1,304 shares of Preferred Shares Series A, 1,304 shares of Preferred Shares Series B, 1,304 shares of Preferred Shares Series C, 1,304 shares of Preferred Shares Series D and 1,304 shares of Preferred Shares Series E, each with a net asset and liquidation value of $25,000 per share plus any accumulated, unpaid dividends.

New York Municipal II has issued 1,580 shares of Preferred Shares Series A and 1,580 shares of Preferred Shares Series B, each with a net asset and liquidation value of $25,000 per share plus any accumulated, unpaid dividends.

Dividends are accumulated daily at an annual rate (typically re-set every seven days) through auction procedures. Distributions of net realized capital gains, if any, are paid annually.

For the year ended May 31, 2009, the annualized dividend rates for each Fund ranged from:

	High	Low	At May 31, 2009
Municipal II:
Series A	11.347 %	0.579 %	0.579 %
Series B	12.565 %	0.563 %	0.563 %
Series C	12.261 %	0.518 %	0.518 %
Series D	11.728 %	0.518 %	0.518 %
Series E	10.205 %	0.579 %	0.579 %
California Municipal II:
Series A	11.347 %	0.579 %	0.579 %
Series B	12.565 %	0.563 %	0.563 %
Series C	12.261 %	0.518 %	0.518 %
Series D	11.728 %	0.518 %	0.518 %
Series E	10.205 %	0.579 %	0.579 %
New York Municipal II:
Series A	12.261 %	0.518 %	0.518 %
Series B	10.205 %	0.579 %	0.579 %

The Funds are subject to certain limitations and restrictions while Preferred Shares are outstanding. Failure to comply with these limitations and restrictions could preclude the Funds from declaring any dividends or distributions to common shareholders or repurchasing common shares and/or could trigger the mandatory redemption of Preferred Shares at their liquidation value.

Preferred shareholders, who are entitled to one vote per share, generally vote with the common shareholders but vote separately as a class to elect two Trustees and on any matters affecting the rights of the preferred shareholders.

5.31.09 | PIMCO Municipal Income Funds II Annual Report 41

| PIMCO Municipal Income Funds II Notes to
Financial Statements |
| --- |
| May 31, 2009 |

7. Auction-Rate Preferred Shares (continued)

Since mid-February 2008, holders of auction-rate preferred shares (“ARPS”) issued by the Funds have been directly impacted by an unprecedented lack of liquidity, which has similarly affected ARPS holders in many of the nation’s closed-end funds. Since then, regularly scheduled auctions for ARPS issued by the Funds have consistently “failed” because of insufficient demand (bids to buy shares) to meet the supply (shares offered for sale) at each auction. In a failed auction, ARPS holders cannot sell all, and may not be able to sell any, of their shares tendered for sale. While repeated auction failures have affected the liquidity for ARPS, they do not constitute a default or automatically alter the credit quality of the ARPS, and ARPS holders have continued to receive dividends at the defined “maximum rate” the higher of the 30-day “AA” Composite Commercial Paper Rate multiplied by 110% or the Taxable Equivalent of the Short-Term Municipal Obligations Rate-defined as 90% of the quotient of (A) the per annum rate expressed on an interest equivalent basis equal to the Kenny S&P 30-day High Grade Index divided by (B) 1.00 minus the Marginal Tax Rate (expressed as a decimal) multiplied by 110% (which is a function of short-term interest rates and typically higher than the rate that would have otherwise been set through a successful auction).

These developments with respect to ARPS have not affected the management or investment policies of the Funds, and the Funds’ outstanding common shares continue to trade on the NYSE without any change. If the Funds’ ARPS auctions continue to fail and the “maximum rate” payable on the ARPS rises as a result of changes in short-term interest rates, returns for the Funds’ common shareholders could be adversely affected.

During the fiscal year ended May 31, 2009, the Funds redeemed, at their liquidation preference, a portion of their ARPS. The redemptions were intended to increase asset coverage of each Fund’s ARPS above the 200% Level (subject to future market conditions), permitting the Funds to pay previously declared common share dividends and to declare and pay future common share dividends. The Funds redeemed, their ARPs, at the full liquidation preference of $25,000 per share plus accumulated but unpaid dividends, across each Fund’s series of ARPS on their respective dates of redemption.

Beginning balance, May 31, 2008	Municipal II (a) — $ 505,000,000	$	260,000,000	$	90,000,000
Redemptions	(138,000,000	)	(97,000,000	)	(11,000,000	)
Ending balance, May 31, 2009	$ 367,000,000	$	163,000,000	$	79,000,000

(a) Redeemed January 5, 2009 – January 9, 2009
(b) Redeemed January 26, 2009 – January 29, 2009

8. Subsequent Common Dividend Declarations

On June 1, 2009, the following dividends were declared to common shareholders payable July 1, 2009 to shareholders of record on June 11, 2009:

Municipal II	$0.065 per common share
California Municipal II	$0.07 per common share
New York Municipal II	$0.06625 per common share

On July 1, 2009, the following dividends were declared to common shareholders payable August 3, 2009 to shareholders of record on July 13, 2009:

Municipal II	$0.065 per common share
California Municipal II	$0.07 per common share
New York Municipal II	$0.06625 per common share

42 PIMCO Municipal Income Funds II Annual Report | 5.31.09

| PIMCO Municipal Income Funds II Notes to
Financial Statements |
| --- |
| May 31, 2009 |

9. Legal Proceedings

In June and September 2004, the Investment Manager and certain of its affiliates (including PEA Capital LLC (“PEA”), Allianz Global Investors Distributors LLC and Allianz Global Investors of America L.P.), agreed to settle, without admitting or denying the allegations, claims brought by the Securities and Exchange Commission and the New Jersey Attorney General alleging violations of federal and state securities laws with respect to certain open-end funds for which the Investment Manager serves as investment adviser. The settlements related to an alleged “market timing” arrangement in certain open-end funds formerly sub-advised by PEA. The Investment Manager and its affiliates agreed to pay a total of $68 million to settle the claims. In addition to monetary payments, the settling parties agreed to undertake certain corporate governance, compliance and disclosure reforms related to market timing, and consented to cease and desist orders and censures. Subsequent to these events, PEA deregistered as an investment adviser and dissolved. None of the settlements alleged that any inappropriate activity took place with respect to the Funds.

Since February 2004, the Investment Manager, the Sub-Adviser, and certain of their affiliates and their employees have been named as defendants in a number of pending lawsuits concerning “market timing,” which allege the same or similar conduct underlying the regulatory settlements discussed above. The market timing lawsuits have been consolidated in a multi-district litigation proceeding in the U.S. District Court for the District of Maryland. Any potential resolution of these matters may include, but not be limited to, judgments or settlements for damages against the Investment Manager, the Sub-Adviser, or their affiliates or related injunctions.

The Investment Manager and the Sub-Adviser believe that these matters are not likely to have a material adverse effect on the Funds or on their ability to perform their respective investment advisory activities relating to the Funds.

The foregoing speaks only as of the date hereof.

See accompanying Notes to Financial Statements | 5.31.09 | PIMCO Municipal Income Funds II Annual Report 43

| PIMCO
Municipal Income Fund II F inancial Highlights |
| --- |
| For a share of common stock outstanding throughout each
year: |

	Year ended May 31, — 2009	2008		2007		2006		2005
Net asset
value, beginning of year	$ 13.86	$	15.05	$	14.71	$	14.81	$	14.01
Investment Operations :
Net
investment income	1.02		1.13		1.13		1.08		1.11
Net
realized and change in unrealized gain (loss) on investments, futures contracts, options written and swaps	(4.94	)	(1.24	)	0.33		0.01		0.84
Total from
investment operations	(3.92	)	(0.11	)	1.46		1.09		1.95
Dividends on Preferred Shares from Net Investment Income	(0.19	)	(0.30	)	(0.30	)	(0.23	)	(0.14	)
Net increase
(decrease) in net assets applicable to common shareholders resulting from investment operations	(4.11	)	(0.41	)	1.16		0.86		1.81
Dividends to Common Shareholders from Net Investment Income	(0.78	)	(0.78	)	(0.82	)	(0.96	)	(1.01	)
Net asset
value, end of year	$ 8.97	$	13.86	$	15.05	$	14.71	$	14.81
Market
price, end of year	$ 9.56	$	14.14	$	15.42	$	14.45	$	15.02
Total Investment Return (1)	(26.46	)%	(3.09	)%	12.64	%	2.63	%	21.00	%
RATIOS/SUPPLEMENTAL DATA:
Net assets
applicable to common shareholders, end of year (000)	$ 534,046	$	819,740	$	886,815	$	862,832	$	862,290
Ratio of
expenses to average net assets including interest expense (2)(3)(4)(5)	1.73	%	1.68	%	1.50	%	1.30	%	1.05	%
Ratio of
expenses to average net assets, excluding interest expense (2)(3)(5)	1.35	%	1.19	%	1.01	%	1.05	%	1.02	%
Ratio of
net investment income to average net assets (2)(5)	10.23	%	7.90	%	7.45	%	7.31	%	7.71	%
Preferred
shares asset coverage per share	$ 61,376	$	65,570	$	68,889	$	67,701	$	67,676
Portfolio
turnover	42	%	21	%	4	%	20	%	9	%

| (1) | Total investment return is calculated assuming a purchase
of a share of common stock at the current market price on the first day of
each period and a sale of a share of common stock at the current market price
on the last day of each period reported. Dividends and distributions are
assumed, for purposes of this calculation, to be reinvested at prices
obtained under the Fund’s dividend reinvestment plan. Total investment return
does not reflect brokerage commissions or sales charges. |
| --- | --- |
| (2) | Calculated on the basis of income and expenses applicable
to both common and preferred shares relative to the average net assets of
common shareholders. |
| (3) | Inclusive of expenses offset by custody credits earned on
cash balances at the custodian bank. (See note 1(i) in Notes to Financial
Statements). |
| (4) | Interest expense relates to the liability for floating
rate notes issued in connection with inverse floater transactions and reverse
repurchase agreements. |
| (5) | During the periods indicated above, the Investment Manager
waived a portion of its investment management fee. The effect of such waiver
relative to the average net assets of common shareholders was 0.10%, 0.17%,
0.24%, 0.24% and 0.24% for the years ended May 31, 2009, May 31, 2008, May
31, 2007, May 31, 2006 and May 31, 2005, respectively. |

44 PIMCO Municipal Income Funds II Annual Report | 5.31.09 | See accompanying Notes to Financial Statements

| PIMCO California Municipal Income Fund II Financial
Highlights |
| --- |
| For a share of common stock outstanding throughout each
year: |

	Year ended May 31, — 2009	2008		2007		2006		2005
Net asset value,
beginning of year	$ 13.34	$	14.89	$	14.58	$	14.61	$	13.53
Investment Operations:
Net
investment income	0.85		1.06		1.08		1.06		1.05
Net
realized and change in unrealized gain (loss) on investments, futures
contracts, options written and swaps	(5.69	)	(1.49	)	0.34		0.05		1.13
Total from
investment operations	(4.84	)	(0.43	)	1.42		1.11		2.18
Dividends on Preferred Shares from Net Investment
Income	(0.18	)	(0.28	)	(0.27	)	(0.21	)	(0.12	)
Net
increase (decrease) in net assets applicable to common shareholders resulting from investment operations	(5.02	)	(0.71	)	1.15		0.90		2.06
Dividends to Common Shareholders from:
Net
Investment Income	(0.80	)	(0.84	)	(0.84	)	(0.93	)	(0.98	)
Return of
Capital	(0.04	)	—		—		—		—
Net asset
value, end of year	$ 7.48	$	13.34	$	14.89	$	14.58	$	14.61
Market
price, end of year	$ 8.78	$	14.25	$	15.96	$	14.62	$	14.76
Total Investment Return (1)	(32.26	)%	(5.17	)%	15.35	%	5.50	%	19.14	%
RATIOS/SUPPLEMENTAL DATA:
Net assets
applicable to common shareholders, end of year (000)	$ 231,415	$	409,769	$	455,284	$	443,379	$	441,596
Ratio of
expenses to average net assets including interest expense (2)(3)(4)(5)	3.15	%	3.23	%	2.89	%	2.02	%	1.36	%
Ratio of
expenses to average net assets, excluding interest expense (2)(3)(5)	1.43	%	1.18	%	1.01	%	1.06	%	1.06	%
Ratio of
net investment income to average net assets (2)(5)	9.31	%	7.65	%	7.28	%	7.24	%	7.37	%
Preferred
shares asset coverage per share	$ 60,490	$	64,390	$	68,765	$	67,620	$	67,451
Portfolio
turnover	62	%	6	%	3	%	12	%	5	%

| (1) | Total investment return is calculated assuming a purchase
of a share of common stock at the current market price on the first day of
each period and a sale of a share of common stock at the current market price
on the last day of each period reported. Dividends and distributions are
assumed, for purposes of this calculation, to be reinvested at prices
obtained under the Fund’s dividend reinvestment plan. Total investment return
does not reflect brokerage commissions or sales charges. |
| --- | --- |
| (2) | Calculated on the basis of income and expenses applicable
to both common and preferred shares relative to the average net assets of common
shareholders. |
| (3) | Inclusive of expenses offset by custody credits earned on
cash balances at the custodian bank. (See note 1(i) in Notes to Financial
Statements). |
| (4) | Interest expense relates to the liability for floating
rate notes issued in connection with inverse floater transactions and reverse
repurchase agreements. |
| (5) | During the periods indicated above, the Investment Manager
waived a portion of its investment management fee. The effect of such waiver
relative to the average net assets of common shareholders was 0.10%, 0.17%,
0.24%, 0.24% and 0.24% for the years ended May 31, 2009, May 31, 2008, May
31, 2007, May 31, 2006 and May 31, 2005, respectively. |

See accompanying Notes to Financial Statements | 5.31.09 | PIMCO Municipal Income Funds II Annual Report 45

| PIMCO New York Municipal Income Fund II Financial
Highlights |
| --- |
| For a share of common stock outstanding throughout each
year: |

	Year ended May 31, — 2009	2008		2007		2006		2005
Net asset
value, beginning of year	$ 13.67	$	14.79	$	14.66	$	14.62	$	13.54
Investment Operations:
Net
investment income	1.00		1.07		1.10		1.07		1.07
Net
realized and change in unrealized gain (loss) on investments, futures contracts, options writtens and swaps	(4.13	)	(1.11	)	0.11		0.11		1.12
Total from
investment operations	(3.13	)	(0.04	)	1.21		1.18		2.19
Dividends on Preferred Shares from Net Investment Income	(0.19	)	(0.29	)	(0.28	)	(0.23	)	(0.13	)
Net
increase (decrease) in net assets applicable to common shareholders resulting from investment operations	(3.32	)	(0.33	)	0.93		0.95		2.06
Dividends to Common Shareholders from Net Investment Income	(0.79	)	(0.79	)	(0.80	)	(0.91	)	(0.98	)
Net asset
value, end of year	$ 9.56		13.67	$	14.79	$	14.66	$	14.62
Market
price, end of year	$ 10.26	$	14.42	$	15.49	$	14.14	$	14.80
Total Investment Return (1)	(22.95	)%	(1.46	)%	15.51	%	1.65	%	21.45	%
RATIOS/SUPPLEMENTAL DATA:
Net assets
applicable to common shareholders, end of year (000)	$ 102,126	$	145,100	$	156,218	$	154,088	$	152,812
Ratio of
expenses to average net assets including interest expense (2)(3)(4)(5)	1.88	%	2.07	%	2.13	%	1.89	%	1.25	%
Ratio of
expenses to average net assets, excluding interest expense (2)(3)(5)	1.51	%	1.25	%	1.14	%	1.13	%	1.14	%
Ratio of
net investment income to average net assets (2)(5)	9.63	%	7.69	%	7.33	%	7.29	%	7.53	%
Preferred
shares asset coverage per share	$ 57,316	$	65,294	$	68,386	$	67,785	$	67,439
Portfolio
turnover	33	%	9	%	3	%	26	%	11	%

| (1) | Total investment return is
calculated assuming a purchase of a share of common stock at the current
market price on the first day of each period and a sale of a share of common
stock at the current market price on the last day of each period reported.
Dividends and distributions are assumed, for purposes of this calculation, to
be reinvested at prices obtained under the Fund’s dividend reinvestment plan.
Total investment return does not reflect brokerage commissions or sales
charges. |
| --- | --- |
| (2) | Calculated on the basis of income
and expenses applicable to both common and preferred shares relative to the
average net assets of common shareholders. |
| (3) | Inclusive of expenses offset by
custody credits earned on cash balances at the custodian bank. (See note 1(i)
in Notes to Financial Statements). |
| (4) | Interest expense relates to the
liability for floating rate notes issued in connection with inverse floater
transactions and reverse repurchase agreements. |
| (5) | During the periods indicated above,
the Investment Manager waived a portion of its investment management fee. The
effect of such waiver relative to the average net assets of common
shareholders was 0.10%, 0.17%, 0.24%, 0.24% and 0.24% for the years ended May
31, 2009, May 31, 2008, May 31, 2007, May 31, 2006, May 31, 2005,
respectively. |

46 PIMCO Municipal Income Funds II Annual Report | 5.31.09 | See accompanying Notes to Financial Statements

PIMCO Municipal Income Funds II
Public
Accounting Firm
To the Shareholders and Board of
Trustees of:
PIMCO Municipal Income Fund II, PIMCO California Municipal Income Fund II and PIMCO New York Municipal Income Fund II

In our opinion, the accompanying statements of assets and liabilities, including the schedules of investments, and the related statements of operations and of changes in net assets applicable to common shareholders and of cash flows (for PIMCO Municipal Income Fund II and PIMCO California Municipal Income Fund II only) and the financial highlights present fairly, in all material respects, the financial position of PIMCO Municipal Income Fund II, PIMCO California Municipal Income Fund II and PIMCO New York Municipal Income Fund II (collectively hereafter referred to as the “Funds”) at May 31, 2009, the results of each of their operations and of cash flows (for PIMCO Municipal Income Fund II and PIMCO California Municipal Income Fund II only) for the year then ended, changes in each of their net assets applicable to common shareholders for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Funds’ management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at May 31, 2009 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP New York, New York July 21, 2009

5.31.09 | PIMCO Municipal Income Funds II Annual Report 47

PIMCO Municipal Income Funds II P ortfolio Manager Change/Change to the Funds’ Investment Policies and Related Risks

| Portfolio Manager Change |
| --- |
| Effective December 11, 2008, Mr. John Cummings assumed
primary responsibility for the day-to-day portfolio management of each of the
Funds. Mr. Cummings is an Executive Vice President at PIMCO. He joined PIMCO
in 2002, and previously was at Goldman Sachs as an institutional trader
responsible for a number of municipal sectors including industrials, airlines,
utilities, healthcare and high-yield. Mr. Cummings has over 20 years of
investment experience and earned an MBA and undergraduate degree from Rutgers
University. |
| Change to the Funds’ Investment Policies
and Related Risks |
| Effective April 6, 2009, each Fund’s investment policy was
revised to increase the amount of Inverse Floaters in which each Fund may
invest to 15% from 10% of its total assets. The Board of Trustees approved
the changes based on the recommendation of the Funds’ Investment Manager and
Sub-Adviser that this limit increase in Inverse Floaters would be in the best
interest of the Funds and the Funds’ shareholders. In addition, this change
potentially allows the Funds to earn additional tax-free income. In addition,
the use of Inverse Floaters, which results in a form of economic leverage,
will allow the Funds to replace or increase leverage to some degree. |
| In addition to general market risks, the Funds’
investments in Inverse Floaters may involve greater risk and volatility than
an investment in a fixed rate bond, and the value of Inverse Floaters may
decrease significantly when market interest rates increase. Inverse Floaters
have varying degrees of liquidity, and the market for these securities may be
volatile. These securities tend to underperform the market for fixed rate
bonds in a rising interest rate environment, but tend to outperform the
market for fixed rate bonds when interest rates decline or remain relatively
stable. Although volatile, Inverse Floaters typically offer the potential for
yields exceeding the yields available on fixed rate bonds with comparable
credit quality, coupon, call provisions and maturity. Trusts in which Inverse
Floaters may be held could be terminated due to market, credit or other
events beyond the Funds’ control, which could require a Fund to reduce
leverage and dispose of portfolio investments at inopportune times and
prices. |

48 PIMCO Municipal Income Funds II Annual Report | 5.31.09

PIMCO Municipal Income Funds II Tax Information/Annual Shareh older Meetings Results (unaudited)

Tax Information:

Subchapter M of the Internal Revenue Code of 1986, as amended, requires the Funds to advise shareholders within 60 days of the Funds’ tax year ended May 31, 2009 as to the federal tax status of dividends and distributions received by shareholders during such tax year. Accordingly, please note that substantially all dividends paid from net investment income from the Funds during the tax year ended May 31, 2009 were federally exempt interest dividends. However the Funds invested in municipal bonds containing market discount, whose accretion is taxable as well as several taxable bonds. Accordingly, the percentages of distributions (inclusive of return of capital) paid from net investment income during the tax period which are taxable were:

Municipal Income II	8.96%
California Municipal Income II	19.34%
New York Municipal Income II	10.31%

Since the Funds’ tax year is not the calendar year, another notification will be sent with respect to calendar year 2009. In January 2010, shareholders will be advised on IRS Form 1099 DIV as to the federal tax status of the dividends and distributions received during calendar 2009. The amount that will be reported will be the amount to use on your 2009 federal income tax return and may differ from the amount which must be reported in connection with the Funds’ tax year ended May 31, 2009. Shareholders are advised to consult their tax advisers as to the federal, state and local tax status of the dividend income received from the Funds. In January 2010, an allocation of interest income by state will be provided which may be of value in reducing a shareholder’s state and local tax liability, if any.

Annual Shareholder Meetings Results:

The Funds held their annual meetings of shareholders on December 23, 2008. Common/Preferred shareholders of each Fund voted as indicated below:

	Affirmative	Withheld Authority
Municipal II
Re-election R. Peter Sullivan, Class III to serve until
2011	48,215,403	3,828,730
Re-election John C. Maney**, Class III to serve until 2011	48,230,919	3,813,214
Diana L. Taylor*, Class II to serve until 2010	15,441	2,465
California Municipal II
Re-election R. Peter Sullivan, Class III to serve until
2011	26,123,380	2,551,859
Re-election John C. Maney**, Class III to serve until 2011	26,076,993	2,598,246
Diana L. Taylor*, Class II to serve until 2010	7,956	8
New York Municipal II
Paul Belica, Class III to serve until 2011	9,500,031	717,431
Re-election John C. Maney**, Class III to serve until 2011	9,497,856	719,606
Diana L. Taylor*, Class II to serve until 2010	3,511	262

Messrs. Hans W. Kertess*, Robert E. Connor, William B. Ogden IV and Paul Belica continue to serve as Trustees of the Funds.

| * | Preferred Shares Trustee; Diana L. Taylor was appointed to
serve as a Preferred Shares Trustee to fill a vacancy resulting from the
death of John J. Dalessandro in September 2008. |
| --- | --- |
| ** | Mr. Maney is an interested Trustee. |

5.31.09 | PIMCO Municipal Income Funds II Annual Report 49

PIMCO Municipal Income Funds II P rivacy Policy/Proxy Voting Policies & Procedures (unaudited)

| Privacy Policy: |
| --- |
| Our Commitment to You |
| We consider customer privacy to be
a fundamental aspect of our relationship with clients. We are committed to
maintaining the confidentiality, integrity, and security of our current,
prospective and former clients’ personal information. To ensure clients’
privacy we have developed policies designed to protect this confidentiality,
while allowing client needs to be served. |
| Obtaining Personal
Information |
| In the course of providing you with
products and services, we and certain service providers to the Funds, such as
the Funds’ investment adviser, may obtain non-public personal information
about you. This information may come from sources such as account
applications and other forms, from other written, electronic or verbal
correspondence, from your transactions, from your brokerage or financial
advisory firm, financial adviser or consultant, and/or from information
captured on our internet web sites. |
| Respecting Your
Privacy |
| As a matter of policy, we do not
disclose any personal or account information provided by you or gathered by
us to non-affiliated third parties, except as required or permitted by law or
as necessary for third parties to perform their agreements with respect to
the Funds. As is common in the industry, non-affiliated companies may from
time to time be used to provide certain services, such as preparing and
mailing prospectuses, reports, account statements and other information,
conducting research on client satisfaction, and gathering shareholder
proxies. We may also retain non-affiliated companies to market our products
and enter in joint marketing agreements with other companies. These companies
may have access to your personal and account information, but are permitted
to use the information solely to provide the specific service or as otherwise
permitted by law. In most cases, you will be clients of the third party, but
we may also provide your personal and account information to your respective
brokerage or financial advisory firm and/or to your financial adviser or
consultant. |
| Sharing
Information with Third Parties |
| We do reserve the right to disclose
or report personal information to non-affiliated third parties in limited
circumstances where we believe in good faith that disclosure is required
under law, to cooperate with regulators or law enforcement authorities, to
protect our rights or property, or upon reasonable request by any mutual fund
in which you have chosen to invest. In addition, the funds may disclose
information about a shareholder’s accounts to a non-affiliated third party
with the consent or upon the request of the shareholder. |
| Sharing
Information with Affiliates |
| We may share client information
with our affiliates in connection with servicing your account or to provide
you with information about products and services that we believe may be of
interest to you. The information we share may include, for example, your
participation in our mutual funds or other investment programs sponsored by
us or our affiliates, your ownership of certain types of accounts (such as
IRAs), or other data about your accounts. Our affiliates, in turn, are not
permitted to share your information with non-affiliated entities, except as
required or permitted by law. |
| Procedures to
Safeguard Private Information |
| We take seriously the obligation to
safeguard your non-public personal information. In addition to this policy,
we have also implemented procedures that are designed to restrict access to a
shareholder’s non-public personal information only to internal personnel who
need to know that information in order to provide products or services to
you. In order to guard your non-public personal information, physical,
electronic and procedural safeguards are in place. |
| Proxy Voting Policies & Procedures: |
| A description of the policies and
procedures that the Funds have adopted to determine how to vote proxies
relating to portfolio securities and information about how the Funds voted
proxies relating to portfolio securities held during the most recent twelve
month period ended June 30 is available (i) without charge, upon request, by
calling the Funds’ shareholder servicing agent at (800) 254-5197; (ii) on the
Funds’ website at www.allianzinvestors.com/closedendfunds; and (iii) on the
Securities and Exchange Commission’s website at www.sec.gov. |

50 PIMCO Municipal Income Funds II Annual Report | 5.31.09

PIMCO Municipal Income Funds II Dividend Reinvestment Plan (unaudited)

Dividend Reinvestment Plan

Pursuant to the Funds’ Dividend Reinvestment Plan (the “Plan”), all Shareholders whose shares are registered in their own names will have all dividends, including any capital gain dividends, reinvested automatically in additional Shares by PNC Global Investment Servicing, as agent for the Shareholders (the “Plan Agent”), unless the shareholder elects to receive cash. An election to receive cash may be revoked or reinstated at the option of the shareholder. In the case of record shareholders such as banks, brokers or other nominees that hold Shares for others who are the beneficial owners, the Plan Agent will administer the Plan on the basis of the number of Shares certified from time to time by the record shareholder as representing the total amount registered in such shareholder’s name and held for the account of beneficial owners who are to participate in the Plan. Shareholders whose shares are held in the name of a bank, broker or nominee should contact the bank, broker or nominee for details. All distributions to investors who elect not to participate in the Plan (or whose broker or nominee elects not to participate on the investor’s behalf), will be paid cash by check mailed, in the case of direct shareholder, to the record holder by PNC Global Investment Servicing, as the Funds’ dividend disbursement agent.

Unless you elect (or your broker or nominee elects) not to participate in the Plan, the number of Shares you will receive will be determined as follows:

| (1) | If on the payment date the net
asset value of the Shares is equal to or less than the market price per Share
plus estimated brokerage commissions that would be incurred upon the purchase
of Shares on the open market, the Funds will issue new shares at the greater
of (i) the net asset value per Share on the payment date or (ii) 95% of the
market price per Share on the payment date; or |
| --- | --- |
| (2) | If on the payment date the net
asset value of the Shares is greater than the market price per Share plus
estimated brokerage commissions that would be incurred upon the purchase of
Shares on the open market, the Plan Agent will receive the dividend or
distribution in cash and will purchase Shares in the open market, on the NYSE
or elsewhere, for the participants’ accounts. It is possible that the market
price for the Shares may increase before the Plan Agent has completed its
purchases. Therefore, the average purchase price per share paid by the Plan
Agent may exceed the market price on the payment date, resulting in the
purchase of fewer shares than if the dividend or distribution had been paid
in Shares issued by the Funds. The Plan Agent will use all dividends and
distributions received in cash to purchase Shares in the open market on or
shortly after the payment date, but in no event later than the ex-dividend
date for the next distribution. Interest will not be paid on any uninvested
cash payments. |

You may withdraw from the Plan at any time by giving notice to the Plan Agent. If you withdraw or the Plan is terminated, you will receive a certificate for each whole share in your account under the Plan and you will receive a cash payment for any fraction of a share in your account. If you wish, the Plan Agent will sell your shares and send you the proceeds, minus brokerage commissions.

The Plan Agent maintains all shareholders’ accounts in the Plan and gives written confirmation of all transactions in the accounts, including information you may need for tax records. The Plan Agent will also furnish each person who buys Shares with written instructions detailing the procedures for electing not to participate in the Plan and to instead receive distributions in cash. Shares in your account will be held by the Plan Agent in non-certificated form. Any proxy you receive will include all Shares you have received under the Plan.

There is no brokerage charge for reinvestment of your dividends or distributions in Shares. However, all participants will pay a pro rata share of brokerage commissions incurred by the Plan Agent when it makes open market purchases.

Automatically reinvested dividends and distributions are taxed in the same manner as cash dividends and distributions.

The Funds and the Plan Agent reserve the right to amend or terminate the Plan. There is no direct service charge to participants in the Plan; however, the Funds reserve the right to amend the Plan to include a service charge payable by the participants. Additional information about the Plan may be obtained from the Funds’ shareholder servicing agent, PNC Global Investment Servicing, P.O. Box 43027, Providence, RI 02940-3027, telephone number (800) 254-5197.

5.31.09 | PIMCO Municipal Income Funds II Annual Report 51

P IMCO Municipal Income Funds II Board of Trustees (unaudited)

| Name, Date of Birth, Position(s) Held
with Funds, Length of Service, Other Trusteeships/ Directorships Held by Trustee; Number of Portfolios in Fund Complex/Outside Fund Complexes Currently Overseen by Trustee | Principal Occupation(s) During Past 5
years: |
| --- | --- |
| The address of each trustee is 1345
Avenue of the Americas, New York, NY 10105 | |
| Hans W. Kertess Date of Birth: 7/12/39 Chairman of the Board of Trustees since:
2007 Trustee since: 2002 Term of office: Expected to stand for
re-election at 2009 annual meeting of
shareholders. Trustee/Director of 48 Funds in Fund
Complex; Trustee/Director of no funds outside of
Fund Complex | President, H. Kertess & Co., a
financial advisory company. Formerly, Managing Director, Royal Bank of Canada
Capital Markets. |
| Paul Belica Date of Birth: 9/27/21 Trustee since: 2002 Term of office: Expected to stand for
re-election at 2010 annual meeting of
shareholders. Trustee/Director of 48 funds in Fund
Complex Trustee/Director of no funds outside of
Fund Complex | Retired. Formerly Director, Student
Loan Finance Corp., Education Loans, Inc., Goal Funding, Inc., Goal Funding
II, Inc. and Surety Loan Fund, Inc. Formerly, Manager of Stratigos Fund LLC,
Whistler Fund LLC, Xanthus Fund LLC & Wynstone Fund LLC. |
| Robert E. Connor Date of Birth: 9/17/34 Trustee since: 2002 Term of office: Expected to stand for
re-election at 2009 annual meeting of
shareholders. Trustee/Director of 48 funds in Fund
Complex Trustee/Director of no funds outside of
Fund Complex | Retired. Formerly, Senior Vice
President, Corporate Office, Smith Barney Inc. |
| William B. Ogden, IV Date of Birth: 1/11/45 Trustee since: 2006 Term of office: Expected to stand for election
at 2009 annual meeting of
shareholders. Trustee/Director of 48 Funds in Fund
Complex; Trustee/Director of no funds outside of
Fund Complex | Asset Management Industry
Consultant. Formerly, Managing Director, Investment Banking Division of
Citigroup Global Markets Inc. |
| R. Peter Sullivan III Date of Birth: 9/4/41 Trustee since: 2002 Term of office: Expected to stand for re-election at 2011 annual meeting of shareholders. Trustee/Director of 48 funds in Fund Complex Trustee/Director of no funds outside of Fund Complex | Retired. Formerly, Managing
Partner, Bear Wagner Specialists LLC, specialist firm on the New York Stock
Exchange. |
| Diana L. Taylor Date of Birth: 2/16/55 Trustee since: 2008 Term of office: Expected to stand for re-election at 2010 annual meeting of shareholders. Trustee/Director of 44 Funds in Fund Complex Trustee/Director of Brookfield Properties Corporation of Sotheby’s | Managing Director, Wolfensohn &
Co., 2007-present. Formerly, Superintendent of Banks, State of New York,
2003-2007. |

52 PIMCO Municipal Income Funds II Annual Report | 5.31.09

PIMCO Municipal Income Funds II Board of Trustees (unaudited)

| Name, Date of Birth, Position(s) Held
with Funds, Length of Service, Other Trusteeships/ Directorships Held by Trustee; Number of Portfolios in Fund Complex/Outside Fund Complexes Currently Overseen by Trustee | Principal Occupation(s) During Past 5
years: |
| --- | --- |
| John C. Maney† Date of Birth: 8/3/59 Trustee since: 2006 Term of office: Expected to stand for re-election at 2011 annual meeting of shareholders. Trustee/Director of 79 Funds in Fund Complex Trustee/Director of No Funds outside the Fund Complex | Management Board of Allianz Global
Investors Fund Management LLC; Management Board and Managing Director of
Allianz Global Investors of America L.P. since January 2005 and Chief
Operating Officer of Allianz Global Investors L.P. since November 2006. |

† Mr. Maney is an “interested person” of the Fund due to his affiliation with Allianz Global Investors of America L.P. In addition to Mr. Maney’s positions set forth in the table above, he holds the following positions with affiliated persons: Management Board, Managing Director and Chief Operating Officer of Allianz Global Investors of America L.P., Allianz Global Investors of America LLC and Allianz-Pac Life Partners LLC; Member — Board of Directors and Chief Operating Officer of Allianz Global Investors of America Holdings Inc. and Oppenheimer Group, Inc.; Managing Director and Chief Operating Office of Allianz Global Investors NY Holdings LLC; Management Board and Managing Director of Allianz Global Investors U.S. Holding LLC; Managing Director and Chief Operating Officer of Allianz Hedge Fund Partners Holding L.P. and Allianz Global Investors U.S. Retail LLC; Member — Board of Directors and Managing Director of Allianz Global Investors Advertising Agency Inc.; Compensation Committee of NFJ Investment Group LLC; Management Board of Allianz Global Investors Fund Management LLC, Allianz Global Investors Managed Partners LLC, Nicholas-Applegate Holdings LLC and OpCap Advisors LLC; Member — Board of Directors and Chief Operating Officer of PIMCO Global Advisors (Resources) Limited; Executive Vice President of PIMCO Japan Ltd; Chief Operating Officer of Allianz Global Investors U.S. Holding II LLC; and Member and Chairman — Board of Directors, President and Chief Operating Officer of PFP Holdings, Inc.

Further information about certain of the Funds’ Trustees is available in the Funds’ Statements of Additional Information, dated June 25, 2002, which can be obtained upon request, without charge, by calling the Funds’ shareholder servicing agent at (800) 254-5197.

5.31.09 | PIMCO Municipal Income Funds II Annual Report 53

P IMCO Municipal Income Funds II Fund Officers (unaudited)

| Name, Date of Birth, Position(s) Held
with Funds | Principal Occupation(s) During Past 5
years: |
| --- | --- |
| Brian S. Shlissel Date of Birth: 11/14/64 President & Chief Executive Officer since: 2002 | Executive Vice President, Director
of Fund Administration, Allianz Global Investors Fund Management LLC;
President and Chief Executive Officer of 35 funds in the Fund Complex;
Treasurer; Principal Financial and Accounting Officer of 46 funds in the Fund
Complex and The Korea Fund, Inc. Formerly, Director of 6 funds in the Fund
Complex (2002-2009). |
| Lawrence G. Altadonna Date of Birth: 3/10/66 Treasurer, Principal Financial and Accounting Officer since: 2002 | Senior Vice President, Allianz
Global Investors Fund Management LLC; Treasurer, Principal Financial and
Accounting officer of 35 funds in the Fund Complex; Assistant Treasurer of 44
funds in the Fund Complex and The Korea Fund, Inc. |
| Thomas J. Fuccillo Date of Birth: 3/22/68 Vice President, Secretary & Chief Legal Officer since: 2004 | Executive Vice President, Chief
Legal Officer and Secretary of Allianz Global Investors Fund Management LLC
and Allianz Global Investors Solutions LLC; Executive Vice President of
Allianz Global Investors of America L.P., Vice President, Secretary and Chief
Legal Officer of 79 funds in the Fund Complex. Secretary and Chief Legal
Officer of The Korea Fund, Inc. Formerly, Vice President and Associate
General Counsel, Neuberger Berman LLC, (1991-2004). |
| Scott Whisten Date of Birth: 3/13/71 Assistant Treasurer since: 2007 | Vice President, Allianz Global
Investors Fund Management LLC; Assistant Treasurer of 79 funds in the Fund
Complex. Formerly, Accounting Manager, Prudential Investments (2002-2005). |
| Richard J. Cochran Date of Birth: 1/23/61 Assistant Treasurer since: 2008 | Vice President, Allianz Global
Investors Fund Management LLC, Assistant Treasurer of 79 funds in the Funds
Complex. Formerly, Tax Manager, Teacher Insurance Annuity Association/College
Retirement Equity Fund (2002-2008). |
| Youse E. Guia Date of Birth: 9/3/72 Chief Compliance Officer since: 2004 | Senior Vice President, Group
Compliance Manager, Allianz Global Investors of America L.P.; Chief
Compliance Officer of 79 funds in the Fund Complex and The Korea Fund, Inc. Formerly,
Vice President, Group Compliance Manager, Allianz Global Investors of America
L.P. (2002-2004). |
| Kathleen A. Chapman Date of Birth: 11/11/54 Assistant Secretary since: 2006 | Assistant Secretary of 79 funds in
the Fund Complex; Manager IIG Advisory Law, Morgan Stanley (2004-2005); The
Prudential Insurance Company of America and Assistant Corporate Secretary of
affiliated American Skandia companies (1996-2004). |
| Lagan Srivastava Date of Birth: 9/20/77 Assistant Secretary since: 2006 | Assistant Secretary of 79 funds in
the Fund Complex and The Korea Fund, Inc.; Formerly Research Assistant,
Dechert LLP (2004-2005); Research Assistant, Swidler Berlin Shereff Friedman
LLP (2002-2004). |

Officers hold office at the pleasure of the Board and until their successors are appointed and qualified or until their earlier resignation or removal.

54 PIMCO Municipal Income Funds II Annual Report | 5.31.09

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Trustees	Fund Officers
Hans W. Kertess	Brian S. Shlissel
Chairman of the Board of Trustees	President & Chief Executive Officer
Paul Belica	Lawrence G. Altadonna
Robert E. Connor	Treasurer, Principal Financial & Accounting
Officer
John C. Maney	Thomas J. Fuccillo
William B. Ogden, IV	Vice President, Secretary & Chief Legal
Officer
R. Peter Sullivan III	Scott Whisten
Diana L. Taylor	Assistant Treasurer
	Richard J. Cochran
	Assistant Treasurer
	Youse E. Guia
	Chief Compliance Officer
	Kathleen A. Chapman
	Assistant Secretary
	Lagan Srivastava
	Assistant Secretary

| Investment Manager |
| --- |
| Allianz Global Investors Fund
Management LLC |
| 1345 Avenue of the Americas |
| New York, NY 10105 |
| Sub-Adviser |
| Pacific Investment Management
Company LLC |
| 840 Newport Center Drive |
| Newport Beach, CA 92660 |
| Custodian & Accounting Agent |
| State Street Bank & Trust Co. |
| 225 Franklin Street |
| Boston, MA 02110 |
| Transfer Agent, Dividend Paying Agent and
Registrar |
| PNC Global Investment Servicing |
| P.O. Box 43027 |
| Providence, RI 02940-3027 |
| Independent Registered Public Accounting
Firm |
| PricewaterhouseCoopers LLP |
| 300 Madison Avenue |
| New York, NY 10017 |
| Legal Counsel |
| Ropes & Gray LLP |
| One International Place |
| Boston, MA 02110-2624 |
| This report,
including the financial information herein, is transmitted to the
shareholders of PIMCO Municipal Income Fund II, PIMCO California Municipal
Income Fund II and PIMCO New York Income Fund II for their information. It is
not a prospectus, circular or representation intended for use in the purchase
of shares of the Funds or any securities mentioned in this report. |
| Notice is
hereby given in accordance with Section 23(c) of the Investment Company Act
of 1940, as amended, that from time to time the Funds may purchase shares of
their common stock in the open market. |
| The Funds file
their complete schedule of portfolio holdings with the Securities and Exchange
Commission (“SEC”) for the first and third quarters of their fiscal year on
Form N-Q. The Funds’ Form N-Q’s are available on the SEC’s website at
www.sec.gov and may be reviewed and copied at the SEC’s Public Reference Room
in Washington, DC. Information on the operation of the Public Reference Room
may be obtained by calling (800) SEC-0330. The information on Form N-Q is
also available on the Funds’ website at
www.allianzinvestors.com/closedendfunds. |
| On January 9,
2009, the Funds submitted CEO annual certifications to the New York Stock
Exchange (“NYSE”) on which the Funds’ principal executive officer certified
that he was not aware, as of the date, of any violation by the Funds of the
NYSE’s Corporate Governance listing standards. In addition, as required by
Section 302 of the Sarbanes-Oxley Act of 2002 and related SEC rules, the
Funds’ principal executive and principal financial officer made quarterly
certifications, included in filings with the SEC on Forms N-CSR and N-Q
relating to, among other things, the Funds’ disclosure controls and
procedures and internal control over financial reporting, as applicable. |
| Information on
the Funds is available at www.allianzinvestors.com/closedendfunds or by
calling the Funds’ shareholder servicing agent at (800) 254-5197. |

ITEM 2. CODE OF ETHICS

| (a) | As of the
end of the period covered by this report, the registrant has adopted a code
of ethics (the “Section 406 Standards for Investment Companies — Ethical
Standards for Principal Executive and Financial Officers”) that applies to
the registrant’s Principal Executive Officer and Principal Financial Officer;
the registrant’s Principal Financial Officer also serves as the Principal
Accounting Officer. The registrant undertakes to provide a copy of such code
of ethics to any person upon request, without charge, by calling
1-800-254-5197. The code of ethics are included as an Exhibit 99.CODE
ETH hereto. |
| --- | --- |
| (b) | During the
period covered by this report, there were not any amendments to a provision
of the code of ethics adopted in 2(a) above. |
| (c) | During the
period covered by this report, there were not any waivers or implicit waivers
to a provision of the code of ethics adopted in 2(a) above. |

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT

The registrant’s Board has determined that Mr. Paul Belica, a member of the Board’s Audit Oversight Committee is an “audit committee financial expert,” and that he is “independent,” for purposes of this Item.

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES

| a) | Audit fees.
The aggregate fees billed for each of the last two fiscal years (the
“Reporting Periods”) for professional services rendered by the Registrant’s
principal accountant (the “Auditor”) for the audit of the Registrant’s annual
financial statements, or services that are normally provided by the Auditor
in connection with the statutory and regulatory filings or engagements for
the Reporting Periods, were $25,352 in 2008 and $26,253 in 2009. |
| --- | --- |
| b) | Audit-Related
Fees. The aggregate fees billed in the Reporting Periods for assurance and
related services by the principal accountant that are reasonably related to
the performance of the audit registrant’s financial statements and are not
reported under paragraph (e) of this Item were $15,882 in 2008 and $14,507 in 2009. These
services consist of accounting consultations, agreed upon procedure reports
(inclusive of annual review of basic maintenance testing associated with the
Preferred Shares), attestation reports and comfort letters. |
| c) | Tax Fees.
The aggregate fees billed in the Reporting Periods for professional services
rendered by the Auditor for tax compliance, tax service and tax planning
(“Tax Services”) were $9,667 in 2008 and $10,000 in 2009. These services consisted of
review or preparation of U.S. federal, state, local and excise tax returns
and calculation of excise tax distributions. |
| d) | All Other
Fees. There were no other fees billed in the Reporting Periods for products
and services provided by the Auditor to the Registrant. |
| e) | 1. Audit
Committee Pre-Approval Policies and Procedures. The Registrant’s Audit
Committee has established policies and procedures for pre-approval of all
audit and permissible non-audit services by the Auditor for the Registrant,
as well as the Auditor’s engagements related directly to the operations and
financial reporting of the Registrant. The Registrant’s policy is stated
below. |

A-1

PIMCO New York Municipal Income Fund II (the “Fund”)

AUDIT OVERSIGHT COMMITTEE POLICY FOR PRE-APPROVAL OF SERVICES PROVIDED BY THE INDEPENDENT ACCOUNTANTS

The Fund’s Audit Oversight Committee (“Committee”) is charged with the oversight of the Fund’s financial reporting policies and practices and their internal controls. As part of this responsibility, the Committee must pre-approve any independent accounting firm’s engagement to render audit and/or permissible non-audit services, as required by law. In evaluating a proposed engagement by the independent accountants, the Committee will assess the effect that the engagement might reasonably be expected to have on the accountant’s independence. The Committee’s evaluation will be based on:

| a review of
the nature of the professional services expected to provided, |
| --- |
| the fees to
be charged in connection with the services expected to be provided, |
| a review of
the safeguards put into place by the accounting firm to safeguard
independence, and |
| periodic
meetings with the accounting firm. |

POLICY FOR AUDIT AND NON-AUDIT SERVICES TO BE PROVIDED TO THE FUND

On an annual basis, the Fund’s Committee will review and pre-approve the scope of the audit of the Fund and proposed audit fees and permitted non-audit (including audit-related) services that may be performed by the Fund’s independent accountants. At least annually, the Committee will receive a report of all audit and non-audit services that were rendered in the previous calendar year pursuant to this Policy. In addition to the Committee’s pre-approval of services pursuant to this Policy, the engagement of the independent accounting firm for any permitted non-audit service provided to the Fund will also require the separate written pre-approval of the President of the Fund, who will confirm, independently, that the accounting firm’s engagement will not adversely affect the firm’s independence. All non-audit services performed by the independent accounting firm will be disclosed, as required, in filings with the Securities and Exchange Commission.

AUDIT SERVICES

The categories of audit services and related fees to be reviewed and pre-approved annually by the Committee are:

| Annual Fund
financial statement audits |
| --- |
| Seed audits
(related to new product filings, as required) |
| SEC and
regulatory filings and consents |
| Semiannual
financial statement reviews |

AUDIT-RELATED SERVICES

The following categories of audit-related services are considered to be consistent with the role of the Fund’s independent accountants and services falling under one of these categories will be pre-approved by the Committee on an annual basis if the Committee deems those services to be consistent with the accounting firm’s independence:

A-2

| Accounting
consultations |
| --- |
| Fund merger
support services |
| Agreed upon
procedure reports (inclusive of quarterly review of Basic Maintenance testing
associated with issuance of Preferred Shares and semiannual report review) |
| Other
attestation reports |
| Comfort
letters |
| Other
internal control reports |

Individual audit-related services that fall within one of these categories and are not presented to the Committee as part of the annual pre-approval process described above, may be pre-approved, if deemed consistent with the accounting firm’s independence, by the Committee Chair (or any other Committee member who is a disinterested trustee under the Investment Company Act to whom this responsibility has been delegated) so long as the estimated fee for those services does not exceed $250,000. Any such pre-approval shall be reported to the full Committee at its next regularly scheduled meeting.

TAX SERVICES

The following categories of tax services are considered to be consistent with the role of the Fund’s independent accountants and services falling under one of these categories will be pre-approved by the Committee on an annual basis if the Committee deems those services to be consistent with the accounting firm’s independence:

Tax compliance services related to the filing or amendment of the following:

| Federal,
state and local income tax compliance; and, sales and use tax compliance |
| --- |
| Timely RIC
qualification reviews |
| Tax
distribution analysis and planning |
| Tax
authority examination services |
| Tax appeals
support services |
| Accounting
methods studies |
| Fund merger
support service |
| Other tax
consulting services and related projects |

Individual tax services that fall within one of these categories and are not presented to the Committee as part of the annual pre-approval process described above, may be pre-approved, if deemed consistent with the accounting firm’s independence, by the Committee Chairman (or any other Committee member who is a disinterested trustee under the Investment Company Act to whom this responsibility has been delegated) so long as the estimated fee for those services does not exceed $250,000. Any such pre-approval shall be reported to the full Committee at its next regularly scheduled meeting.

PROSCRIBED SERVICES

The Fund’s independent accountants will not render services in the following categories of non-audit services:

| Bookkeeping
or other services related to the accounting records or financial statements
of the Fund Financial
information systems design and implementation |
| --- |
| Appraisal or
valuation services, fairness opinions, or contribution-in-kind reports |
| Actuarial
services |
| Internal
audit outsourcing services |
| Management
functions or human resources |
| Broker or
dealer, investment adviser or investment banking services |
| Legal
services and expert services unrelated to the audit |

A-3

Any other service that the Public Company Accounting Oversight Board determines, by regulation, is impermissible

PRE-APPROVAL OF NON-AUDIT SERVICES PROVIDED TO OTHER ENTITIES WITHIN THE FUND COMPLEX

The Committee will pre-approve annually any permitted non-audit services to be provided to Allianz Global Investors Fund Management LLC (Formerly, PA Fund Management LLC) or any other investment manager to the Funds (but not including any sub-adviser whose role is primarily portfolio management and is sub-contracted by the investment manager) (the “Investment Manager”) and any entity controlling, controlled by, or under common control with the Investment Manager that provides ongoing services to the Fund (including affiliated sub-advisers to the Fund), provided, in each case, that the engagement relates directly to the operations and financial reporting of the Fund (such entities, including the Investment Manager, shall be referred to herein as the “Accounting Affiliates”). Individual projects that are not presented to the Committee as part of the annual pre-approval process, may be pre-approved, if deemed consistent with the accounting firm’s independence, by the Committee Chairman (or any other Committee member who is a disinterested trustee under the Investment Company Act to whom this responsibility has been delegated) so long as the estimated fee for those services does not exceed $250,000. Any such pre-approval shall be reported to the full Committee at its next regularly scheduled meeting.

Although the Committee will not pre-approve all services provided to the Investment Manager and its affiliates, the Committee will receive an annual report from the Fund’s independent accounting firm showing the aggregate fees for all services provided to the Investment Manager and its affiliates.

DE MINIMUS EXCEPTION TO REQUIREMENT OF PRE-APPROVAL OF NON-AUDIT SERVICES

With respect to the provision of permitted non-audit services to a Fund or Accounting Affiliates, the pre-approval requirement is waived if:

| (1) | The
aggregate amount of all such permitted non-audit services provided
constitutes no more than (i) with respect to such services provided to
the Fund, five percent (5%) of the total amount of revenues paid by the Fund
to its independent accountant during the fiscal year in which the services
are provided, and (ii) with respect to such services provided to
Accounting Affiliates, five percent (5%) of the total amount of revenues paid
to the Fund’s independent accountant by the Fund and the Accounting
Affiliates during the fiscal year in which the services are provided; | |
| --- | --- | --- |
| (2) | Such
services were not recognized by the Fund at the time of the engagement for
such services to be non-audit services; and | |
| (3) | Such
services are promptly brought to the attention of the Committee and approved
prior to the completion of the audit by the Committee or by the Committee
Chairman (or any other Committee member who is a disinterested trustee under
the Investment Company Act to whom this Committee Chairman or other delegate
shall be reported to the full Committee at its next regularly scheduled
meeting. | |
| | e) | 2. No
services were approved pursuant to the procedures contained in paragraph
(C) (7) (i) (C) of Rule 2-01 of Registration S-X. |
| | f) | Not
applicable |
| | g) | Non-audit
fees. The aggregate non-audit fees billed by the Auditor for services
rendered to |

A-4

| | the
Registrant, and rendered to the Adviser, for the 2008 Reporting Period was
$3,644,060 and the 2009 Reporting Period was $3,424,915. |
| --- | --- |
| h) | Auditor
Independence. The Registrant’s Audit Oversight Committee has considered
whether the provision of non-audit services that were rendered to the Adviser
which were not pre- approved is compatible with maintaining the Auditor’s
independence. |

ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANT

The Fund has a separately designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934. The audit committee of the Fund is comprised of Robert E. Connor, Paul Belica, Hans W. Kertess, R. Peter Sullivan III, William B. Ogden, IV and Diana L. Taylor.

ITEM 6. SCHEDULE OF INVESTMENTS Schedule of Investments is included as part of the report to shareholders filed under Item 1 of this form.

ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

PIMCO MUNICIPAL INCOME FUND II PIMCO CALIFORNIA MUNICIPAL INCOME FUND II PIMCO NEW YORK MUNICIPAL INCOME FUND II

(each a “Trust”)

PROXY VOTING POLICY

| 1. | It is the
policy of each Trust that proxies should be voted in the interest of its
shareholders, as determined by those who are in the best position to make
this determination. Each Trust
believes that the firms and/or persons purchasing and selling securities for
the Trust and analyzing the performance of a Trust’s securities are in the
best position and have the information necessary to vote proxies in the best
interests of the Trust and its shareholders, including in situations where
conflicts of interest may arise between the interests of shareholders, on one
hand, and the interests of the investment adviser, a sub-adviser and/or any
other affiliated person of the Trust, on the other. Accordingly, each Trust’s policy shall be to delegate proxy
voting responsibility to those entities with portfolio management responsibility
for the Trust. |
| --- | --- |
| 2. | Each Trust
delegates the responsibility for voting proxies to Allianz Global Investors
Fund Management LLC (“AGIFM”), which will in turn delegate such
responsibility to the sub-adviser of the particular Trust. AGIFM’s Proxy Voting Policy Summary is
attached as Appendix A hereto.
A summary of the detailed proxy voting policy of PIMCO, the Trusts’
current sub-adviser, is set forth in Appendix B attached hereto. Such summary may be revised from time to
time to reflect changes to the sub-adviser’s detailed proxy voting policy. |
| 3. | The party
voting the proxies (i.e., the sub-adviser) shall vote such proxies in
accordance with such party’s proxy voting policies and, to the extent
consistent with such policies, may rely on information and/or recommendations
supplied by others. |
| 4. | AGIFM and
the sub-adviser of each Trust with proxy voting authority shall deliver a
copy of its respective proxy voting policies and any material amendments
thereto to the applicable Board of the Trust promptly after the adoption or amendment
of any such policies. |
| 5. | The party
voting the proxy shall: (i) maintain such records and provide such voting
information as is required for the Trusts’ regulatory filings including,
without limitation, Form N-PX and the required disclosure of policy called
for by Item 18 of Form N-2 and Item 7 of Form N-CSR; and (ii) shall provide
such additional |

A-5

| | information
as may be requested, from time to time, by the Board or the Trusts’ Chief
Compliance Officer. |
| --- | --- |
| 6. | This Proxy
Voting Policy Statement (including Appendix B ), the Proxy Voting
Policy Summary of AGIFM and summary of the detailed proxy voting policy of
PIMCO, the sub-adviser of each Trust with proxy voting authority, shall be
made available (i) without charge, upon request, by calling 1-800-254-5197
and (ii) on the Trusts’ website at www.allianzinvestors.com. In addition, to the extent required by
applicable law or determined by the Trusts’ Chief Compliance Officer or Board
of Trustees, the Proxy Voting Policy Summary of AGIFM and summary of the
detailed proxy voting policy of PIMCO, the Trusts’ sub-adviser with proxy
voting authority shall also be included in the Trusts’ Registration
Statements or Form N-CSR filings. |

A-6

Appendix A

ALLIANZ GLOBAL INVESTORS FUND MANAGEMENT LLC (“AGIFM”)

| 1. | It is the
policy of AGIFM that proxies should be voted in the interest of the
shareholders of the applicable fund, as determined by those who are in the
best position to make this determination.
AGIFM believes that the firms and/or persons purchasing and selling
securities for the funds and analyzing the performance of the funds’
securities are in the best position and have the information necessary to
vote proxies in the best interests of the funds and their shareholders,
including in situations where conflicts of interest may arise between the
interests of shareholders, on one hand, and the interests of the investment
adviser, a sub-adviser and/or any other affiliated person of the fund, on the
other. Accordingly, AGIFM’s policy
shall be to delegate proxy voting responsibility to those entities with
portfolio management responsibility for the funds. |
| --- | --- |
| 2. | AGIFM, for
each fund which it acts as an investment adviser, delegates the
responsibility for voting proxies to the sub-adviser for the respective fund,
subject to the terms hereof. |
| 3. | The party
voting the proxies (e.g., the sub-adviser) shall vote such proxies in
accordance with such party’s proxy voting policies and, to the extent
consistent with such policies, may rely on information and/or recommendations
supplied by others. |
| 4. | AGIFM and
each sub-adviser of a fund shall deliver a copy of its respective proxy
voting policies and any material amendments thereto to the board of the
relevant fund promptly after the adoption or amendment of any such policies. |
| 5. | The party
voting the proxy shall: (i) maintain
such records and provide such voting information as is required for such
funds’ regulatory filings including, without limitation, Form N-PX and the
required disclosure of policy called for by Item 18 of Form N-2 and Item 7 of
Form N-CSR; and (ii) shall provide such additional information as may be
requested, from time to time, by such funds’ respective boards or chief
compliance officers. |
| 6. | This Proxy
Voting Policy Summary and summaries of the proxy voting policies for each
sub-adviser of a fund advised by AGIFM shall be available (i) without charge,
upon request, by calling 1-800-254-5197 and (ii) at
www.allianzinvestors.com. In addition,
to the extent required by applicable law or determined by the relevant fund’s
board of directors/trustees or chief compliance officer, this Proxy Voting
Policy Summary and summaries of the detailed proxy voting policies of each
sub-adviser and each other entity with proxy voting authority for a fund
advised by AGIFM shall also be included in the Registration Statement or Form
N-CSR filings for the relevant fund. |

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Appendix B

PACIFIC INVESTMENT MANAGEMENT COMPANY LLC

Pacific Investment Management Company LLC (“PIMCO”) has adopted written proxy voting policies and procedures (“Proxy Policy”) as required by Rule 206(4)-6 under the Investment Advisers Act of 1940, as amended. PIMCO has implemented the Proxy Policy for each of its clients as required under applicable law, unless expressly directed by a client in writing to refrain from voting that client’s proxies. Recognizing that proxy voting is a rare event in the realm of fixed income investing and is typically limited to solicitation of consent to changes in features of debt securities, the Proxy Policy also applies to any voting rights and/or consent rights of PIMCO, on behalf of its clients, with respect to debt securities, including but not limited to, plans of reorganization, and waivers and consents under applicable indentures.

The Proxy Policy is designed and implemented in a manner reasonably expected to ensure that voting and consent rights are exercised in the best interests of PIMCO’s clients. Each proxy is voted on a case-by-case basis taking into consideration any relevant contractual obligations as well as other relevant facts and circumstances at the time of the vote. In general, PIMCO reviews and considers corporate governance issues related to proxy matters and generally supports proposals that foster good corporate governance practices. PIMCO may vote proxies as recommended by management on routine matters related to the operation of the issuer and on matters not expected to have a significant economic impact on the issuer and/or its shareholders.

PIMCO will supervise and periodically review its proxy voting activities and implementation of the Proxy Policy. PIMCO will review each proxy to determine whether there may be a material conflict between PIMCO and its client. If no conflict exists, the proxy will be forwarded to the appropriate portfolio manager for consideration. If a conflict does exist, PIMCO will seek to resolve any such conflict in accordance with the Proxy Policy. PIMCO seeks to resolve any material conflicts of interest by voting in good faith in the best interest of its clients. If a material conflict of interest should arise, PIMCO will seek to resolve such conflict in the client’s best interest by pursuing any one of the following courses of action: (i) convening a committee to assess and resolve the conflict; (ii) voting in accordance with the instructions of the client; (iii) voting in accordance with the recommendation of an independent third-party service provider; (iv) suggesting that the client engage another party to determine how the proxy should be voted; (v) delegating the vote to a third-party service provider; or (vi) voting in accordance with the factors discussed in the Proxy Policy.

Clients may obtain a copy of PIMCO’s written Proxy Policy and the factors that PIMCO may consider in determining how to vote a client’s proxy. Except as required by law, PIMCO will not disclose to third parties how it voted on behalf of a client. However, upon request from an appropriately authorized individual, PIMCO will disclose to its clients or the entity delegating the voting authority to PIMCO for such clients, how PIMCO voted such client’s proxy. In addition, a client may obtain copies of PIMCO’s Proxy Policy and information as to how its proxies have been voted by contacting PIMCO.

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ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES

(a)(1)

As of August 6, 2009, the following individual has primary responsibility for the day-to-day implementation of the PIMCO Municipal Income Fund II (PML), PIMCO California Municipal Income Fund II (PCK) and PIMCO New York Municipal Income Fund II (PNI) (each a “Fund” and collectively, the “Funds”):

John S. Cummings

Mr. Cummings has been the portfolio manager for the Fund since December 11, 2008. Mr. Cummings is an executive vice president and head of the municipal bond desk at PIMCO in the Newport Beach office. Prior to joining PIMCO in 2002, he was vice president, municipal trading at Goldman Sachs, responsible for a number of municipal sectors, including industrials, airlines, utilities, healthcare and high-yield. He has 20 years of investment experience and holds an MBA, as well as his undergraduate degree, from Rutgers University.

(a)(2)

The following summarizes information regarding each of the accounts, excluding the respective Fund managed by the Portfolio Manager as of May 31, 2009, including accounts managed by a team, committee, or other group that includes the Portfolio Manager. Unless mentioned otherwise, the advisory fee charged for managing each of the accounts listed below is not based on performance.

| PM | Fund | Registered
Investment Companies — # | AUM($million) | Other
Pooled Investment Vehicles — # | AUM($million) | Other
Accounts — # | AUM($million) |
| --- | --- | --- | --- | --- | --- | --- | --- |
| John S.
Cummings | PML | 19 | 4,759.61 | 4 | 647.28 | 53 | 3,011.68 |
| | PCK | 19 | 5,268.40 | 4 | 647.28 | 53 | 3,011.68 |
| | PNI | 19 | 5,483.06 | 4 | 647.28 | 53 | 3,011.68 |

From time to time, potential conflicts of interest may arise between a portfolio manager’s management of the investments of a fund, on the one hand, and the management of other accounts, on the other. The other accounts might have similar investment objectives or strategies as the funds, track the same index a fund tracks or otherwise hold, purchase, or sell securities that are eligible to be held, purchased or sold by the funds. The other accounts might also have different investment objectives or strategies than the funds.

Knowledge and Timing of Fund Trades. A potential conflict of interest may arise as a result of the portfolio manager’s day-to-day management of a fund. Because of their positions with the funds, the portfolio managers know the size, timing and possible market impact of a fund’s trades. It is theoretically possible that the portfolio managers could use this information to the advantage of other accounts they manage and to the possible detriment of a fund.

Investment Opportunities. A potential conflict of interest may arise as a result of the portfolio manager’s management of a number of accounts with varying investment guidelines. Often, an investment opportunity may be suitable for both a fund and other accounts managed by the portfolio manager, but may not be available in sufficient quantities for both the fund and the other

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accounts to participate fully. Similarly, there may be limited opportunity to sell an investment held by a fund and another account. PIMCO has adopted policies and procedures reasonably designed to allocate investment opportunities on a fair and equitable basis over time.

Under PIMCO’s allocation procedures, investment opportunities are allocated among various investment strategies based on individual account investment guidelines and PIMCO’s investment outlook. PIMCO has also adopted additional procedures to complement the general trade allocation policy that are designed to address potential conflicts of interest due to the side-by-side management of the funds and certain pooled investment vehicles, including investment opportunity allocation issues.

Performance Fees. A portfolio manager may advise certain accounts with respect to which the advisory fee is based entirely or partially on performance. Performance fee arrangements may create a conflict of interest for the portfolio manager in that the portfolio manager may have an incentive to allocate the investment opportunities that he or she believes might be the most profitable to such other accounts instead of allocating them to a fund. PIMCO has adopted policies and procedures reasonably designed to allocate investment opportunities between the funds and such other accounts on a fair and equitable basis over time.

(a) (3)

As of May 31, 2009, the following explains the compensation structure of the individual that shares primary responsibility for day-to-day portfolio management of the Funds:

PIMCO has adopted a “Total Compensation Plan” for its professional level employees, including its portfolio managers, that is designed to pay competitive compensation and reward performance, integrity and teamwork consistent with the firm’s mission statement. The Total Compensation Plan includes a significant incentive component that rewards high performance standards, work ethic and consistent individual and team contributions to the firm. The compensation of portfolio managers consists of a base salary, a bonus, and may include a retention bonus. Portfolio managers who are Managing Directors of PIMCO also receive compensation from PIMCO’s profits. Certain employees of PIMCO, including portfolio managers, may elect to defer compensation through PIMCO’s deferred compensation plan. PIMCO also offers its employees a non-contributory defined contribution plan through which PIMCO makes a contribution based on the employee’s compensation. PIMCO’s contribution rate increases at a specified compensation level, which is a level that would include portfolio managers.

Salary and Bonus. Base salaries are determined by considering an individual portfolio manager’s experience and expertise and may be reviewed for adjustment annually. Portfolio managers are entitled to receive bonuses, which may be significantly more than their base salary, upon attaining certain performance objectives based on predetermined measures of group or department success. These goals are specific to individual portfolio managers and are mutually agreed upon annually by each portfolio manager and his or her manager. Achievement of these goals is an important, but not exclusive, element of the bonus decision process.

In addition, the following non-exclusive list of qualitative criteria (collectively, the “Bonus Factors”) may be considered when determining the bonus for portfolio managers:

• 3-year, 2-year and 1-year dollar-weighted and account-weighted, pre-tax investment performance as judged

A-10

| | against the applicable
benchmarks for each account managed by a portfolio manager (including the
funds) and relative to applicable industry peer groups; |
| --- | --- |
| • | Appropriate risk
positioning that is consistent with PIMCO’s investment philosophy and the
Investment Committee/CIO approach to the generation of alpha; |
| • | Amount and nature of
assets managed by the portfolio manager; |
| • | Consistency of investment
performance across portfolios of similar mandate and guidelines (reward low
dispersion); |
| • | Generation and
contribution of investment ideas in the context of PIMCO’s secular and
cyclical forums, portfolio strategy meetings, Investment Committee meetings,
and on a day-to-day basis; |
| • | Absence of defaults and
price defaults for issues in the portfolios managed by the portfolio manager; |
| • | Contributions to asset
retention, gathering and client satisfaction; |
| • | Contributions to
mentoring, coaching and/or supervising; and |
| • | Personal growth and skills
added. |

A portfolio manager’s compensation is not based directly on the performance of any fund or any other account managed by that portfolio manager. Final bonus award amounts are determined by the PIMCO Compensation Committee.

Investment professionals, including portfolio managers, are eligible to participate in a Long Term Cash Bonus Plan (“Cash Bonus Plan”), which provides cash awards that appreciate or depreciate based upon the performance of PIMCO’s parent company, Allianz Global Investors, and PIMCO over a three-year period. The aggregate amount available for distribution to participants is based upon Allianz Global Investors’ profit growth and PIMCO’s profit growth. Participation in the Cash Bonus Plan is based upon the Bonus Factors, and the payment of benefits from the Cash Bonus Plan, is contingent upon continued employment at PIMCO.

Key employees of PIMCO, including certain Managing Directors, Executive Vice Presidents, and Senior Vice Presidents, are eligible to participate in the PIMCO Class M Unit Equity Participation Plan, a long-term equity plan. The Class M Unit Equity Participation Plan grants options on PIMCO equity that vest in years three, four and five. Upon vesting, the options will convert into PIMCO M Units, which are non-voting common equity of PIMCO. M Units pay out quarterly distributions equal to a pro-rata share of PIMCO’s net profits. There is no assured liquidity and they may remain outstanding perpetually.

Profit Sharing Plan. Instead of a bonus, portfolio managers who are Managing Directors of PIMCO receive compensation from a non-qualified profit sharing plan consisting of a portion of PIMCO’s net profits. Portfolio managers who are Managing Directors receive an amount determined by the Partner Compensation Committee, based upon an individual’s overall contribution to the firm and the Bonus Factors. Under his employment agreement, William Gross receives a fixed percentage of the profit sharing plan.

Allianz Transaction Related Compensation. In May 2000, a majority interest in the predecessor holding company of PIMCO was acquired by a subsidiary of Allianz AG (currently known as Allianz SE) (“Allianz”). In connection with the transaction, Mr. Gross received a grant of restricted stock of Allianz, the last of which vested on May 5, 2005.

Portfolio managers who are Managing Directors also have long-term employment contracts, which guarantee severance payments in the event of involuntary termination of a Managing Director’s employment with PIMCO.

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(a)(4)

The following summarizes the dollar range of securities the portfolio manager for the Funds beneficially owned of the Funds that he managed as of May 31, 2009.

PIMCO Municipal Income Fund II PIMCO California Municipal Income Fund II PIMCO New York Municipal Income Fund II
Portfolio Manager	Dollar Range of Equity Securities in the Fund
John S. Cummings	None

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ITEM 9.

Purchase of Equity Securities by Closed-End Management Investment Company and Affiliated Companies

None

ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

There have been no material changes to the procedures by which shareholders may recommend nominees to the Fund’s Board of Trustees since the Fund last provided disclosure in response to this item.

ITEM 11. CONTROLS AND PROCEDURES

(a) The registrant’s President and Chief Executive Officer and Treasurer, Principal Financial Accounting Officer have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-2(c) under the Act (17 CFR 270.30a-3(c))), as amended are effective based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of this document.

(b) There were no significant changes over financial reporting (as defined in Rule 30a-3(d) under the Act (17 CFR 270.30a-3(d))) that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrants control over financial reporting.

ITEM 12. EXHIBITS

(a) (1) Exhibit 99.CODE ETH - Code of Ethics

(a) (2) Exhibit 99 Cert. - Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

(b) Exhibit 99.906 Cert. - Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

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Signature

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.

(Registrant) PIMCO New York Municipal Income Fund II

| By | /s/ Brian S.
Shlissel |
| --- | --- |
| President
and Chief Executive Officer | |
| Date | August 6, 2009 |
| By | /s/ Lawrence
G. Altadonna |
| Treasurer,
Principal Financial & Accounting Officer | |
| Date | August 6, 2009 |
| 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. | |
| By | /s/ Brian S.
Shlissel |
| President
and Chief Executive Officer | |
| Date | August 6,
2009 |
| By | /s/ Lawrence
G. Altadonna |
| Treasurer,
Principal Financial & Accounting Officer | |
| Date | August 6,
2009 |