Eaton Vance California Municipal Bond Fund II

 

 

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

811-21217

Investment Company Act File Number

Eaton Vance California Municipal Bond Fund II

(Exact Name of Registrant as Specified in Charter)

Two International Place, Boston, Massachusetts 02110

(Address of Principal Executive Offices)

Maureen A. Gemma

Two International Place, Boston, Massachusetts 02110

(Name and Address of Agent for Services)

(617) 482-8260

(Registrant’s Telephone Number, Including Area Code)

September 30

Date of Fiscal Year End

December 31, 2015

Date of Reporting Period

 

 

 

Item 1. Schedule of Investments

Eaton Vance

California Municipal Bond Fund II

December 31, 2015

PORTFOLIO OF INVESTMENTS (Unaudited)

Tax-Exempt Investments — 151.0%

 

                                                 
Security    Principal
Amount
(000’s omitted)		      Value  

Education — 13.5%

      

California Educational Facilities Authority, (Harvey Mudd College), 5.25%, 12/1/31

    $ 395       $ 465,867   

California Educational Facilities Authority, (Harvey Mudd College), 5.25%, 12/1/36

      160         188,705   

California Educational Facilities Authority, (Loyola Marymount University), 5.00%, 10/1/22

      70         83,235   

California Educational Facilities Authority, (Loyola Marymount University), 5.00%, 10/1/30

      380         425,471   

California Educational Facilities Authority, (Santa Clara University), 5.00%, 2/1/29

      890         1,008,753   

California Educational Facilities Authority, (University of San Francisco), 6.125%, 10/1/36

      115         140,414   

California Educational Facilities Authority, (University of Southern California), 5.25%, 10/1/39

      1,200         1,335,720   

California Educational Facilities Authority, (University of the Pacific), 5.00%, 11/1/30

      330         375,150   

California Municipal Finance Authority, (University of San Diego), 5.00%, 10/1/31

      210         244,518   

California Municipal Finance Authority, (University of San Diego), 5.00%, 10/1/35

      145         168,519   

California Municipal Finance Authority, (University of San Diego), 5.25%, 10/1/26

      405         478,682   

California Municipal Finance Authority, (University of San Diego), 5.25%, 10/1/27

      425         498,147   

California Municipal Finance Authority, (University of San Diego), 5.25%, 10/1/28

      450         524,461   

University of California, 5.25%, 5/15/39

      835         939,475   

University of California, Prerefunded to 5/15/19, 5.25%, 5/15/39

      165         188,108   
     

 

 

  
      $ 7,065,225   
     

 

 

  

Electric Utilities — 6.0%

      

Los Angeles Department of Water and Power, Electric System Revenue, 5.25%, 7/1/32

    $ 745       $ 820,454   

Sacramento Municipal Utility District, 5.00%, 8/15/30

      420         500,081   

Sacramento Municipal Utility District, 5.00%, 8/15/31

      125         148,492   

Southern California Public Power Authority, (Tieton Hydropower), 5.00%, 7/1/30

      1,000         1,141,920   

Vernon, Electric System Revenue, 5.125%, 8/1/21

      470         518,650   
     

 

 

  
      $ 3,129,597   
     

 

 

  

Escrowed/Prerefunded — 3.4%

      

California Educational Facilities Authority, (Claremont McKenna College), Prerefunded to 1/1/19, 5.00%, 1/1/39

    $ 1,370       $ 1,532,208   

Vernon, Electric System Revenue, Prerefunded to 8/1/19, 5.125%, 8/1/21

      205         225,518   
     

 

 

  
      $ 1,757,726   
     

 

 

  

General Obligations — 24.1%

      

California, 5.00%, 10/1/31

    $ 565       $ 675,864   

California, 5.50%, 11/1/35

      1,300         1,553,604   

Palo Alto, (Election of 2008), 5.00%, 8/1/40

      1,850         2,110,961   

San Bernardino Community College District, 4.00%, 8/1/30

      1,510         1,651,351   

San Diego Community College District, (Election of 2002), 5.00%, 8/1/32

      720         839,045   

San Diego Community College District, (Election of 2006), 5.00%, 8/1/31

      455         531,281   

San Jose-Evergreen Community College District, (Election of 2010), 5.00%, 8/1/35

      410         480,557   

San Mateo Union High School District, (Election of 2006), 5.00%, 9/1/27

      685         829,651   

San Mateo Union High School District, (Election of 2006), 5.00%, 9/1/28

      1,170         1,408,762   

Torrance Unified School District, (Election of 2008), 5.00%, 8/1/35

      1,125         1,306,361   

Ventura County Community College District, 5.00%, 8/1/29

      1,000         1,207,940   
     

 

 

  
      $ 12,595,377   
     

 

 

  

 

1

 

 

                                                 
Security    Principal
Amount
(000’s omitted)		      Value  

Hospital — 11.6%

      

California Health Facilities Financing Authority, (Cedars-Sinai Medical Center), 5.00%, 8/15/39

    $ 1,400       $ 1,552,236   

California Health Facilities Financing Authority, (City of Hope), 5.00%, 11/15/32

      335         379,096   

California Health Facilities Financing Authority, (City of Hope), 5.00%, 11/15/35

      475         533,743   

California Health Facilities Financing Authority, (Memorial Health Services), 5.00%, 10/1/27

      750         866,903   

California Health Facilities Financing Authority, (St. Joseph Health System), 5.00%, 7/1/33

      600         695,778   

California Health Facilities Financing Authority, (St. Joseph Health System), 5.00%, 7/1/37

      280         321,616   

California Statewide Communities Development Authority, (Cottage Health System), 5.25%, 11/1/30

      1,000         1,139,590   

Washington Township Health Care District, 5.00%, 7/1/32

      555         573,931   
     

 

 

  
      $ 6,062,893   
     

 

 

  

Insured-Education — 4.1%

      

California State University, (AGM), (BHAC), 5.00%, 11/1/39(1)

    $ 2,000       $ 2,172,240   
     

 

 

  
      $ 2,172,240   
     

 

 

  

Insured-Electric Utilities — 4.0%

      

Puerto Rico Electric Power Authority, (NPFG), 5.25%, 7/1/34

    $ 1,035       $ 990,723   

Sacramento Municipal Utility District, (AGM), 5.00%, 8/15/27

      1,000         1,097,650   
     

 

 

  
      $ 2,088,373   
     

 

 

  

Insured-Escrowed/Prerefunded — 24.0%

      

Antelope Valley Community College District, (Election of 2004), (NPFG), Prerefunded to 8/1/17, 5.25%, 8/1/39

    $ 725       $ 776,801   

California Infrastructure and Economic Development Bank, (Bay Area Toll Bridges), (AMBAC), Prerefunded to 1/1/28, 5.00%, 7/1/33

      1,150         1,504,269   

California Infrastructure and Economic Development Bank, (Bay Area Toll Bridges), (AMBAC), Prerefunded to 1/1/28, 5.00%, 7/1/36

      525         686,732   

Calleguas Las Virgines Public Financing Authority, (Municipal Water District), (BHAC), (FGIC), Prerefunded to 7/1/16, 4.75%, 7/1/37

      1,235         1,262,219   

Clovis Unified School District, (NPFG), Escrowed to Maturity, 0.00%, 8/1/20

      3,130         2,936,566   

Coast Community College District, (Election of 2002), (AGM), Prerefunded to 8/1/16, 0.00%, 8/1/35

      6,675         2,378,302   

East Bay Municipal Utility District, Water System Revenue, (AGM), (FGIC), Prerefunded to 6/1/17, 5.00%, 6/1/32

      100         106,075   

Orange County Water District, Certificates of Participation, (NPFG), Prerefunded to 8/15/32, 5.00%, 8/15/34

      395         505,687   

Riverside Community College District, (Election of 2004), (AGM), (NPFG), Prerefunded to 8/1/17, 5.00%, 8/1/32

      1,040         1,110,221   

Santa Clara Valley Transportation Authority, Sales Tax Revenue, (AMBAC), Prerefunded to 4/1/17, 5.00%, 4/1/32

      1,225         1,292,020   
     

 

 

  
      $ 12,558,892   
     

 

 

  

Insured-General Obligations — 18.2%

      

Arcadia Unified School District, (Election of 2006), (AGM), 0.00%, 8/1/38

    $ 7,125       $ 2,408,179   

Arcadia Unified School District, (Election of 2006), (AGM), 0.00%, 8/1/40

      2,525         773,534   

Carlsbad Unified School District, (Election of 2006), (NPFG), 5.25%, 8/1/32

      1,500         1,599,255   

El Camino Hospital District, (NPFG), 4.45%, 8/1/36

      575         592,164   

Palm Springs Unified School District, (Election of 2008), (AGC), 5.00%, 8/1/33

      1,250         1,395,687   

Union Elementary School District, (Election of 1999), (NPFG), 0.00%, 9/1/22

      3,200         2,772,032   
     

 

 

  
      $ 9,540,851   
     

 

 

  

Insured-Hospital — 6.0%

      

California Statewide Communities Development Authority, (Kaiser Permanente), (BHAC), 5.00%, 3/1/41(1)

    $ 1,250       $ 1,258,963   

California Statewide Communities Development Authority, (Sutter Health), (AGM), 5.05%, 8/15/38(1)

      1,750         1,863,907   
     

 

 

  
      $ 3,122,870   
     

 

 

  

 

2

 

 

                                                 
Security    Principal
Amount
(000’s omitted)		      Value  

Insured-Lease Revenue/Certificates of Participation — 3.6%

      

San Diego County Water Authority, Certificates of Participation, (AGM), 5.00%, 5/1/38(1)

    $ 1,750       $ 1,900,710   
     

 

 

  
      $ 1,900,710   
     

 

 

  

Insured-Special Tax Revenue — 3.7%

      

Hesperia Public Financing Authority, (Redevelopment and Housing Projects), (XLCA), 5.00%, 9/1/37

    $ 1,535       $ 1,559,177   

Puerto Rico Sales Tax Financing Corp., (NPFG), 0.00%, 8/1/45

      2,675         401,437   
     

 

 

  
      $ 1,960,614   
     

 

 

  

Insured-Transportation — 5.0%

      

San Joaquin Hills Transportation Corridor Agency, (NPFG), 0.00%, 1/15/27

    $ 3,520       $ 2,254,983   

San Jose, Airport Revenue, (AMBAC), 5.00%, 3/1/33

      330         342,124   
     

 

 

  
      $ 2,597,107   
     

 

 

  

Insured-Water and Sewer — 2.1%

      

Riverside, Water System Revenue, (AGM), 5.00%, 10/1/38

    $ 445       $ 489,264   

Santa Clara Valley Water District, (AGM), 3.75%, 6/1/28

      615         618,905   
     

 

 

  
      $ 1,108,169   
     

 

 

  

Lease Revenue/Certificates of Participation — 1.0%

      

California Public Works Board, 5.00%, 11/1/38

    $ 480       $ 554,160   
     

 

 

  
      $ 554,160   
     

 

 

  

Special Tax Revenue — 7.1%

      

Los Angeles County Metropolitan Transportation Authority, Sales Tax Revenue, 5.00%, 7/1/31

    $ 1,490       $ 1,622,685   

San Francisco Bay Area Rapid Transit District, Sales Tax Revenue, 5.00%, 7/1/28

      1,300         1,483,599   

Successor Agency to La Quinta Redevelopment Agency, 5.00%, 9/1/29

      500         591,850   
     

 

 

  
      $ 3,698,134   
     

 

 

  

Transportation — 11.4%

      

Bay Area Toll Authority, Toll Bridge Revenue, (San Francisco Bay Area), Prerefunded to 4/1/19, 5.25%, 4/1/29

    $ 1,190       $ 1,351,114   

Long Beach, Harbor Revenue, 5.00%, 5/15/27

      540         625,876   

Los Angeles Department of Airports, (Los Angeles International Airport),
5.00%, 5/15/35(1)(2)

      1,060         1,202,453   

Los Angeles Harbor Department, 5.00%, 8/1/25

      1,250         1,485,125   

San Francisco City and County Airport Commission, (San Francisco International Airport), 5.00%, 5/1/35

      635         710,235   

San Jose, Airport Revenue, 5.00%, 3/1/20

      500         571,405   
     

 

 

  
      $ 5,946,208   
     

 

 

  

Water and Sewer — 2.2%

      

Metropolitan Water District of Southern California, 5.00%, 1/1/39

    $ 1,050       $ 1,163,621   
     

 

 

  
      $ 1,163,621   
     

 

 

  

Total Tax-Exempt Investments — 151.0%
(identified cost $71,635,190)

       $ 79,022,767   
     

 

 

  

Auction Preferred Shares Plus Cumulative Unpaid Dividends — (1.7)%

       $ (900,011 ) 
     

 

 

  

Institutional MuniFund Term Preferred Shares, at Liquidation Value — (47.4)%

       $ (24,800,000 ) 
     

 

 

  

Other Assets, Less Liabilities — (1.9)%

       $ (997,330 ) 
     

 

 

  

Net Assets Applicable to Common Shares — 100.0%

       $ 52,325,426   
     

 

 

  

The percentage shown for each investment category in the Portfolio of Investments is based on net assets applicable to common shares.

The Fund invests primarily in debt securities issued by California municipalities. The ability of the issuers of the debt securities to meet their obligations may be affected by economic developments in a specific industry or municipality. In order to reduce the risk associated with such economic developments, at December 31, 2015, 46.9% of total investments are backed by bond insurance of various financial institutions and financial guaranty assurance agencies. The aggregate percentage insured by an individual financial institution or financial guaranty assurance agency ranged from 1.7% to 18.9% of total investments.

 

3

 

 

(1) Security represents the municipal bond held by a trust that issues residual interest bonds.

 

(2) Security (or a portion thereof) has been pledged as collateral for residual interest bond transactions. The aggregate value of such collateral is $407,453.

Futures Contracts

 

                                                                                                                                                                              

Description

       Contracts   Position   Expiration
Month/Year		     Aggregate
Cost		     Value     Net Unrealized
Appreciation
(Depreciation)		  

Interest Rate Futures

  

U.S. 10-Year Treasury Note

     15   Short     Mar-16      $ (1,894,073 )    $ (1,888,594 )    $ 5,479   

U.S. Long Treasury Bond

     15   Short     Mar-16        (2,303,644 )      (2,306,250 )      (2,606 ) 
             

 

 

  
  $ 2,873   
             

 

 

  

Abbreviations:

 

AGC

   -   Assured Guaranty Corp.

AGM

   -   Assured Guaranty Municipal Corp.

AMBAC

   -   AMBAC Financial Group, Inc.

BHAC

   -   Berkshire Hathaway Assurance Corp.

FGIC

   -   Financial Guaranty Insurance Company

NPFG

   -   National Public Finance Guaranty Corp.

XLCA

   -   XL Capital Assurance, Inc.

At December 31, 2015, the Fund had sufficient cash and/or securities to cover commitments under open derivative contracts.

The Fund is subject to interest rate risk in the normal course of pursuing its investment objective. Because the Fund holds fixed-rate bonds, the value of these bonds may decrease if interest rates rise. The Fund enters into U.S. Treasury futures contracts to hedge against changes in interest rates.

At December 31, 2015, the aggregate fair value of open derivative instruments (not considered to be hedging instruments for accounting disclosure purposes) in an asset position and in a liability position and whose primary underlying risk exposure is interest rate risk was $5,479 and $2,606, respectively.

The cost and unrealized appreciation (depreciation) of investments of the Fund at December 31, 2015, as determined on a federal income tax basis, were as follows:

 

Aggregate cost

    $     64,459,109   
  

 

 

  

Gross unrealized appreciation

    $ 7,800,762   

Gross unrealized depreciation

      (212,104 ) 
  

 

 

  

Net unrealized appreciation

    $ 7,588,658   
  

 

 

  

Under generally accepted accounting principles for fair value measurements, a three-tier hierarchy to prioritize the assumptions, referred to as inputs, is used in valuation techniques to measure fair value. The three-tier hierarchy of inputs is summarized in the three broad levels listed below.

 

•  

Level 1 — quoted prices in active markets for identical investments

 

•  

Level 2 — other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

 

•  

Level 3 — significant unobservable inputs (including a fund’s own assumptions in determining the fair value of investments)

In cases where the inputs used to measure fair value fall in different levels of the fair value hierarchy, the level disclosed is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

 

4

 

 

At December 31, 2015, the hierarchy of inputs used in valuing the Fund’s investments and open derivative instruments, which are carried at value, were as follows:

 

Asset Description    Level 1      Level 2      Level 3      Total  

Tax-Exempt Investments

    $ —       $ 79,022,767       $ —       $ 79,022,767   

Total Investments

    $ —       $ 79,022,767       $ —       $ 79,022,767   

Futures Contracts

    $ 5,479       $ —       $ —       $ 5,479   

Total

    $     5,479       $     79,022,767       $     —       $     79,028,246   
Liability Description                                

Futures Contracts

    $ (2,606 )     $ —       $ —       $ (2,606 ) 

Total

    $ (2,606 )     $ —       $ —       $ (2,606 ) 

The carrying amount of the Institutional MuniFund Term Preferred Shares (iMTP Shares) at December 31, 2015 approximated its fair value. If measured at fair value, iMTP Shares would have been considered as Level 2 in the fair value hierarchy at December 31, 2015.

The Fund held no investments or other financial instruments as of September 30, 2015 whose fair value was determined using Level 3 inputs. At December 31, 2015, there were no investments transferred between Level 1 and Level 2 during the fiscal year to date then ended.

For information on the Fund’s policy regarding the valuation of investments and other significant accounting policies, please refer to the Fund’s most recent financial statements included in its semiannual or annual report to shareholders.

 

5

 

 

Item 2. Controls and Procedures

(a) It is the conclusion of the registrant’s principal executive officer and principal financial officer that the effectiveness of the registrant’s current disclosure controls and procedures (such disclosure controls and procedures having been evaluated within 90 days of the date of this filing) provide reasonable assurance that the information required to be disclosed by the registrant on this Form N-Q has been recorded, processed, summarized and reported within the time period specified in the Commission’s rules and forms and that the information required to be disclosed by the registrant on this Form N-Q has been accumulated and communicated to the registrant’s principal executive officer and principal financial officer in order to allow timely decisions regarding required disclosure.

(b) There have been no changes in the registrant’s internal controls over financial reporting during the fiscal quarter for which the report is being filed that have materially affected, or are reasonably likely to materially affect the registrant’s internal control over financial reporting.

Signatures

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.

Eaton Vance California Municipal Bond Fund II

 

By:   /s/ Payson F. Swaffield
  Payson F. Swaffield
  President
Date:   February 22, 2016

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/ Payson F. Swaffield
  Payson F. Swaffield
  President
Date:   February 22, 2016

 

By:   /s/ James F. Kirchner
  James F. Kirchner
  Treasurer
Date:   February 22, 2016