BlackRock muni fund (NYSE: BYM) details CEF mergers and 2026 discount program

Rhea-AI Filing Summary

BlackRock is combining seven municipal closed-end funds into three Survivor Funds and adding a discount management program (DMP) for 2026. Share exchanges are based on each fund’s net asset value per share, with specific conversion ratios set for each Acquired Fund into its Survivor Fund.

Common shareholders of each Acquired Fund received Survivor Fund common shares equal in aggregate net asset value to their prior holdings as of the close on February 6, 2026, with cash paid for fractional shares. Preferred shareholders received Survivor Fund preferred shares on a one-for-one basis, matching their prior liquidation preference. The reorganizations are expected to be non-taxable events.

Each Survivor Fund will participate in a DMP. If its shares trade at an average daily discount to NAV of more than 10.00% from January 1, 2026 through September 30, 2026, the fund intends to conduct a tender offer to repurchase at least 5% of its outstanding common shares at 98% of NAV.

Insights

Closed-End Fund & Income Strategy Analyst

BlackRock consolidates muni CEFs and adds a discount-triggered tender program.

The reorganization folds seven municipal closed-end funds into three Survivor Funds using precise share conversion ratios tied to each fund’s net asset value. This kind of consolidation can streamline the product lineup and potentially improve trading liquidity by concentrating assets into fewer, larger vehicles.

For shareholders, common shares of the Acquired Funds convert into Survivor Fund shares at NAV-based ratios, with cash in lieu of fractional shares, and preferred shares move over one-for-one by liquidation preference. The transactions are expected to be non-taxable, which reduces friction for income-focused investors.

The Discount Management Program adds a conditional tender mechanism: if a Survivor Fund’s average discount exceeds 10.00% between January 1, 2026 and September 30, 2026, it intends to repurchase at least 5% of its outstanding common shares at 98% of NAV. Actual impact will depend on market discounts, Board decisions, and investor participation in any tender offer.

Filed by BlackRock MuniHoldings Fund, Inc.

pursuant to Rule 425 under the Securities Act of 1933

and deemed filed pursuant to Rule 14a-6

under the Securities Exchange Act of 1934

Subject Company: BlackRock Municipal Income Quality Trust

File No: 811-21178

Date: February 9, 2026

Contact:

1-800-882-0052

BlackRock Announces Completion of Certain Municipal CEF Reorganizations and Adoption of Discount Management Program

New York, February 9, 2026 – BlackRock Advisors, LLC announced today each of the closed-end funds named below (each, a “Fund” and collectively, the “Funds”) have completed their reorganizations or mergers, as applicable (each, a “Reorganization” and collectively, the “Reorganizations”). Additionally, each of the Survivor Funds, as identified below, adopted a Discount Management Program that seeks to enhance long-term shareholder value via periodic liquidity events if certain conditions are met (see below for details).

● Reorganization of BlackRock California Municipal Income Trust (BFZ) with and into BlackRock MuniHoldings California Quality Fund, Inc. (MUC)

● Reorganizations of BlackRock New York Municipal Income Trust (BNY) and BlackRock MuniHoldings New York Quality Fund, Inc. (MHN) with and into BlackRock MuniYield New York Quality Fund, Inc. (MYN)

● Reorganizations of BlackRock MuniHoldings Quality Fund II, Inc. (MUE), BlackRock Municipal Income Trust (BFK), BlackRock Municipal Income Quality Trust (BYM) and BlackRock Municipal Income Trust II (BLE) with and into BlackRock MuniHoldings Fund, Inc. (MHD)

Seven Muni CEFs have been reorganized into three acquiring funds:

BlackRock Municipal CEF Reorganizations Summary
Survivor Funds		Acquired Funds
MUC		BFZ
MYN		BNY		MHN
MHD		MUE		BFK		BYM		BLE

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Fund		Ticker		Net Asset Value / Share ($)		Share Conversion Ratio
BlackRock California Municipal Income Trust		BFZ		12.0395		1.02530147
BlackRock MuniHoldings California Quality Fund, Inc		MUC		11.7424		-

Fund		Ticker		Net Asset Value / Share ($)		Share Conversion Ratio
BlackRock New York Municipal Income Trust		BNY		11.1056		1.02143002
BlackRock MuniHoldings New York Quality Fund, Inc.		MHN		11.2087		1.03091257
BlackRock MuniYield New York Quality Fund, Inc.		MYN		10.8726		-

Fund		Ticker		Net Asset Value / Share ($)		Share Conversion Ratio
BlackRock MuniHoldings Quality Fund II, Inc.		MUE		10.9625		0.85365094
BlackRock Municipal Income Trust		BFK		10.8945		0.84835577
BlackRock Municipal Income Quality Trust		BYM		12.0152		0.93562479
BlackRock Municipal Income Trust II		BLE		11.4106		0.88854453
BlackRock MuniHoldings Fund, Inc.		MHD		12.8419		-

The Reorganizations were based on the relative net asset values of each Fund’s common shares at the time of the applicable Reorganization.

In the Reorganizations, common shareholders of each Acquired Fund received an amount of its respective Survivor Fund’s common shares equal to the aggregate NAV of their holdings of the Acquired Fund’s common shares as determined at the close of business on February 6, 2026. Fractional shares of each Survivor Fund’s common shares were not issued in the Reorganizations and consequently cash will be distributed for any such fractional shares.

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In addition, each Acquired Fund’s preferred shareholders received on a one-for-one basis Survivor Fund preferred shares in an amount equal to the aggregate preferred share liquidation preference held by the Acquired Fund’s preferred shareholders immediately prior to the Reorganizations.

The Reorganizations are expected to be non-taxable events.

Discount Management Program (DMP)

Each of the Survivor Funds will participate in a DMP for 2026. Under the terms of each Fund’s DMP, each Fund intends to offer to repurchase a portion of its outstanding common shares via tender offer if certain conditions are met during the specified time period, as detailed below.

If a Fund’s common shares trade at an average daily discount to net asset value (“NAV”) of greater than 10.00% during the 9-month measurement period (the “Measurement Period”), the Fund intends to offer to repurchase, as soon as practicable following the Measurement Period end date, a minimum of 5% of its outstanding common shares at a price equal to 98% of the Fund’s NAV, as determined on the trading day after the tender offer expires.

Each DMP will be comprised of one Measurement Period, as detailed below, unless continued by a Fund’s Board of Directors/Trustees (each a “Board”). The Measurement Period start and end dates are currently expected to be as indicated below.

Measurement Period Start		Measurement Period End		Discount to NAV Trigger		Repurchase Amount		Price
January 1, 2026		September 30, 2026		More than -10.00%		Minimum of 5% of outstanding shares		98% of NAV

Each DMP is intended to enhance long-term shareholder value. However, even if a tender offer is triggered under a DMP, there is no guarantee that shareholders will be able to sell all of the shares that they desire to sell in any particular tender offer and there can be no assurances as to the effect that a DMP will have on the market for a Fund’s shares or the discount at which a Fund’s shares may trade relative to its NAV.

This communication is not intended to, and shall not, constitute an offer to purchase or sell shares of any of the Funds, including each Survivor Fund. Investors should consider a Survivor Fund’s investment objective, risks, charges and expenses carefully and consider in its entirety the applicable Joint Proxy Statement/Prospectus relating to a Reorganization, which contains important information regarding the investment objectives and policies, risks, charges, expenses and other important information about the applicable Survivor Fund.

About BlackRock

BlackRock’s purpose is to help more and more people experience financial well-being. As a fiduciary to investors and a leading provider of financial technology, we help millions of people build savings

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that serve them throughout their lives by making investing easier and more affordable. For additional information on BlackRock, please visit www.blackrock.com/corporate.

Availability of Fund Updates

BlackRock will update performance and certain other data for the Funds on a monthly basis on its website in the “Closed-end Funds” section of www.blackrock.com as well as certain other material information as necessary from time to time. Investors and others are advised to check the website for updated performance information and the release of other material information about the Funds. This reference to BlackRock’s website is intended to allow investors public access to information regarding the Funds and does not, and is not intended to, incorporate BlackRock’s website in this release.

Forward-Looking Statements

This press release, and other statements that BlackRock or the Funds may make, may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act, with respect to the Funds or BlackRock’s future financial or business performance, strategies or expectations. Forward-looking statements are typically identified by words or phrases such as “trend,” “potential,” “opportunity,” “pipeline,” “believe,” “comfortable,” “expect,” “anticipate,” “current,” “intention,” “estimate,” “position,” “assume,” “outlook,” “continue,” “remain,” “maintain,” “sustain,” “seek,” “achieve,” and similar expressions, or future or conditional verbs such as “will,” “would,” “should,” “could,” “may” or similar expressions.

BlackRock cautions that forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Forward-looking statements speak only as of the date they are made, and BlackRock assumes no duty to and does not undertake to update forward-looking statements. Actual results could differ materially from those anticipated in forward-looking statements and future results could differ materially from historical performance.

With respect to the Funds, the following factors, among others, could cause actual events to differ materially from forward-looking statements or historical performance: (1) changes and volatility in political, economic or industry conditions, the interest rate environment, foreign exchange rates or financial and capital markets, which could result in changes in demand for the Funds or a Fund’s net asset value; (2) the relative and absolute investment performance of the Funds and its investments; (3) the impact of increased competition; (4) the unfavorable resolution of any legal proceedings; (5) the extent and timing of any distributions or share repurchases; (6) the impact, extent and timing of technological changes; (7) the impact of legislative and regulatory actions and reforms, and regulatory, supervisory or enforcement actions of government agencies relating to the Funds or BlackRock, as applicable; (8) terrorist activities, international hostilities, health epidemics and/or pandemics and natural disasters, which may adversely affect the general economy, domestic and local financial and capital markets, specific industries or BlackRock; (9) BlackRock’s ability to attract and retain highly talented professionals; (10) the impact of BlackRock electing to provide support to its products from time to time; and (11) the impact of problems at other financial institutions or the failure or negative performance of products at other financial institutions.

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Annual and Semi-Annual Reports and other regulatory filings of the Funds with the SEC are accessible on the SEC’s website at www.sec.gov and on BlackRock’s website at www.blackrock.com, and may discuss these or other factors that affect the Funds. The information contained on BlackRock’s website is not a part of this press release.

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FAQ

What reorganizations are described for BlackRock municipal CEFs related to BYM?

Seven BlackRock municipal closed-end funds are being reorganized into three Survivor Funds. Share exchanges are based on each fund’s net asset value, with specified conversion ratios. Common and preferred shareholders move into the Survivor Funds while preserving aggregate NAV or liquidation preference, and the events are expected to be non-taxable.

How are share conversion ratios determined in the BlackRock muni fund reorganizations?

Conversion ratios are based on relative net asset value per share at the time of reorganization. For example, BFZ converts into its Survivor Fund at a ratio of 1.02530147, and BNY converts at 1.02143002. These ratios align each investor’s new holdings with the aggregate NAV of their prior shares.

Are the BlackRock municipal fund reorganizations expected to be taxable events for shareholders?

The reorganizations are expected to be non-taxable events. Common shareholders receive Survivor Fund shares equal in aggregate net asset value to their former holdings, with cash only for fractional shares. Preferred shareholders receive Survivor Fund preferred shares matching their prior liquidation preference, supporting tax-efficient continuity of their municipal income exposure.

What is the Discount Management Program (DMP) for BlackRock’s Survivor Funds?

The DMP is a conditional tender offer framework tied to market discounts. In 2026, if a Survivor Fund’s shares trade at an average daily discount to NAV greater than 10.00% during the January 1–September 30 Measurement Period, it intends to repurchase at least 5% of outstanding shares at 98% of NAV.

When does the Discount Management Program’s Measurement Period occur and what triggers a tender offer?

The Measurement Period runs from January 1, 2026 through September 30, 2026. If a Survivor Fund’s common shares trade at an average daily discount to NAV of more than 10.00% during this interval, it intends to launch a tender offer to buy at least 5% of its outstanding shares at 98% of NAV.

How are preferred shareholders treated in the BlackRock municipal fund reorganizations?

Preferred shareholders receive Survivor Fund preferred shares on a one-for-one basis. Each preferred shareholder’s new holdings equal the aggregate preferred share liquidation preference they held immediately before the reorganization, helping maintain the economic priority and income profile associated with those preferred securities after the mergers close.