Ab Municipal Income Fund Ii NCSR Certified annual shareholder report (management investment company)

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: 811-07618

AB 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)

Joseph J. Mantineo

AllianceBernstein L.P.

1345 Avenue of the Americas

New York, New York 10105

(Name and address of agent for service)

Registrant’s telephone number, including area code: (800) 221-5672

Date of fiscal year end: May 31, 2020

Date of reporting period: May 31, 2020

ITEM 1. REPORTS TO STOCKHOLDERS.

MAY^05.31.20

LOGO

ANNUAL REPORT

AB MUNICIPAL INCOME FUND II

AB ARIZONA PORTFOLIO

AB MASSACHUSETTS PORTFOLIO

AB MINNESOTA PORTFOLIO

AB NEW JERSEY PORTFOLIO

AB OHIO PORTFOLIO

AB PENNSYLVANIA PORTFOLIO

AB VIRGINIA PORTFOLIO

LOGO

Beginning January 1, 2021, as permitted by new regulations adopted by the Securities and Exchange Commission, each Fund’s annual and semi-annual shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the reports. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website address to access the report.

If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from a Fund electronically at any time by contacting your financial intermediary (such as a broker-dealer or bank) or, if you are a direct investor, by calling the Fund at (800) 221 5672.

You may elect to receive all future reports in paper form free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your shareholder reports; if you invest directly with a Fund, you can call the Fund at (800) 221 5672. Your election to receive reports in paper form will apply to all funds held in your account with your financial intermediary or, if you invest directly, to all AB Mutual Funds you hold.



Investment Products Offered		• Are Not FDIC Insured • May Lose Value • Are Not Bank Guaranteed

Investors should consider the investment objectives, risks, charges and expenses of the Fund carefully before investing. For copies of our prospectus or summary prospectus, which contain this and other information, visit us online at www.abfunds.com or contact your AB representative. Please read the prospectus and/or summary prospectus carefully before investing.

This shareholder report must be preceded or accompanied by the Fund’s prospectus for individuals who are not current shareholders of the Fund.

You may obtain a description of the Fund’s proxy voting policies and procedures, and information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30, without charge. Simply visit AB’s website at www.abfunds.com, or go to the Securities and Exchange Commission’s (the “Commission”) website at www.sec.gov, or call AB at (800) 227 4618.

The Fund files its complete schedule of portfolio holdings with the Commission for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. The Fund’s Form N-PORT reports are available on the Commission’s website at www.sec.gov. The Fund’s Forms N-PORT may also be reviewed and copied at the Commission’s Public Reference Room in Washington, DC; information on the operation of the Public Reference Room may be obtained by calling (800) SEC 0330. AB publishes full portfolio holdings for the Fund monthly at www.abfunds.com.

AllianceBernstein Investments, Inc. (ABI) is the distributor of the AB family of mutual funds. ABI is a member of FINRA and is an affiliate of AllianceBernstein L.P., the Adviser of the funds.

The [A/B] logo is a registered service mark of AllianceBernstein and AllianceBernstein^® is a registered service mark used by permission of the owner, AllianceBernstein L.P.


FROM THE PRESIDENT

Dear Shareholder,

We are pleased to provide this report for AB Municipal Income Fund II: AB Arizona Portfolio, AB Massachusetts Portfolio, AB Minnesota Portfolio, AB New Jersey Portfolio, AB Ohio Portfolio, AB Pennsylvania Portfolio and AB Virginia Portfolio (each a “Portfolio,” and collectively, the “Portfolios”). Please review the discussion of Portfolio performance, the market conditions during the reporting period and the Portfolios’ investment strategies.

As always, AB strives to keep clients ahead of what’s next by:

⁺

Transforming uncommon insights into uncommon knowledge with a global research scope

⁺

Navigating markets with seasoned investment experience and sophisticated solutions

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Providing thoughtful investment insights and actionable ideas

Whether you’re an individual investor or a multi-billion-dollar institution, we put knowledge and experience to work for you.

AB’s global research organization connects and collaborates across platforms and teams to deliver impactful insights and innovative products. Better insights lead to better opportunities—anywhere in the world.

For additional information about AB’s range of products and shareholder resources, please log on to www.abfunds.com.

Thank you for your investment in the AB Mutual Funds.

Sincerely,

LOGO

Robert M. Keith

President and Chief Executive Officer, AB Mutual Funds



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ANNUAL REPORT

July 10, 2020

This report provides management’s discussion of fund performance for AB Municipal Income Fund II: AB Arizona Portfolio, AB Massachusetts Portfolio, AB Minnesota Portfolio, AB New Jersey Portfolio, AB Ohio Portfolio, AB Pennsylvania Portfolio and AB Virginia Portfolio for the annual reporting period ended May 31, 2020.

The investment objective of the Portfolios is to earn the highest level of current income, exempt from both federal income tax and state taxation of the respective state, that is available without assuming what the Adviser considers to be undue risk.

NAV RETURNS AS OF MAY 31, 2020 (unaudited)



	6 Months		12 Months

AB ARIZONA PORTFOLIO

Class A Shares		-1.38%		0.77%

Class C Shares		-1.75%		0.02%

Bloomberg Barclays Municipal Bond Index		1.55%		3.98%



	6 Months		12 Months

AB MASSACHUSETTS PORTFOLIO

Class A Shares		-0.39%		1.67%

Class C Shares		-0.77%		0.91%

Advisor Class Shares¹		-0.27%		2.01%

Bloomberg Barclays Municipal Bond Index		1.55%		3.98%



	6 Months		12 Months

AB MINNESOTA PORTFOLIO

Class A Shares		0.44%		2.51%

Class C Shares		0.06%		1.64%

Bloomberg Barclays Municipal Bond Index		1.55%		3.98%

Please note that this share class is for investors purchasing shares through accounts established under certain fee-based programs sponsored and maintained by certain broker-dealers and financial intermediaries, institutional pension plans and/or investment advisory clients of, and certain other persons associated with, the Adviser and its affiliates or the Portfolios.



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NAV RETURNS AS OF MAY 31, 2020 (unaudited)



	6 Months		12 Months

AB NEW JERSEY PORTFOLIO

Class A Shares		-1.73%		0.50%

Class C Shares		-2.10%		-0.25%

Bloomberg Barclays Municipal Bond Index		1.55%		3.98%



	6 Months		12 Months

AB OHIO PORTFOLIO

Class A Shares		-0.71%		1.45%

Class C Shares		-0.98%		0.70%

Bloomberg Barclays Municipal Bond Index		1.55%		3.98%



	6 Months		12 Months

AB PENNSYLVANIA PORTFOLIO

Class A Shares		-0.27%		1.95%

Class C Shares		-0.64%		1.09%

Bloomberg Barclays Municipal Bond Index		1.55%		3.98%



	6 Months		12 Months

AB VIRGINIA PORTFOLIO

Class A Shares		-0.45%		1.71%

Class C Shares		-0.73%		1.04%

Advisor Class Shares¹		-0.32%		1.96%

Bloomberg Barclays Municipal Bond Index		1.55%		3.98%

INVESTMENT RESULTS

The preceding tables show performance for each Portfolio compared to its benchmark, the Bloomberg Barclays Municipal Bond Index, for the six- and 12-month periods ended May 31, 2020.

All share classes of all Portfolios underperformed the benchmark for both periods, before sales charges. An overweight to mid-grade credit was the largest broad detractor, relative to the benchmark, for the Portfolios.

Arizona Portfolio: During both periods, security selection within the miscellaneous revenue sector detracted, relative to the benchmark. Overall yield-curve positioning detracted, but an underweight to the longest duration bonds over 10 years contributed. Exposure to pre-refunded bonds also contributed.



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Massachusetts Portfolio: During both periods, security selection within the private higher education sector detracted, relative to the benchmark. Yield-curve positioning detracted as the Portfolio was underweight to the intermediate part of the curve. Security selection in the special tax, airports and tax-supported state lease sectors contributed.

Minnesota Portfolio: During both periods, yield-curve positioning contributed, relative to the benchmark, as the Portfolio was slightly overweight overall duration. Security selection within the private higher education and health care sectors detracted, while selection in the special tax and local global obligation (“GO”) sectors contributed.

New Jersey Portfolio: During both periods, yield-curve positioning detracted, relative to the benchmark. An underweight to longer duration bonds in the over 10-year range contributed. Security selection within the miscellaneous revenue sector detracted. For the 12-month period, security selection in industrial development airlines contributed. During the six-month period, security selection in tax-supported local leases contributed.

Ohio Portfolio: During both periods, security selection within the private higher education sector detracted, relative to the benchmark, while selection in miscellaneous revenue and water and sewer contributed. Yield-curve positioning detracted. For the 12-month period, security selection in multi-family housing contributed. During the six-month period, security selection within toll roads/transit contributed.

Pennsylvania Portfolio: During both periods, yield-curve positioning detracted, relative to the benchmark, as the Portfolio was underweight to the intermediate part of the curve. An overweight to senior living detracted. Security selection within the tax-supported state lease and local GO sectors contributed.

Virginia Portfolio: During both periods, yield-curve positioning detracted, relative to the benchmark, as the Portfolio was underweight to the intermediate part of the curve. An overweight to senior living detracted. Security selection within the tax-supported state lease and health care sectors contributed.

All Portfolios used derivatives in the form of interest rate swaps and inflation Consumer Price Index (“CPI”) swaps for hedging purposes; interest rate swaps contributed to absolute returns for both periods; CPI swaps had no material impact for the six-month period and contributed for the 12-month period.

MARKET REVIEW AND INVESTMENT STRATEGY

Themes of strong demand, light supply and supportive credit fundamentals were prominent until the last couple months of the 12-month



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period ended May 31, 2020. In March, these themes sharply reversed and volatility spiked dramatically. The COVID-19 pandemic quickly led to the increase in market volatility and to a sharp economic contraction. In this environment, investors fled to cash from nearly every other type of investment, and stocks and bonds fell dramatically. The municipal bond market was not spared; after 60 consecutive weeks of inflows, municipal bond funds had record outflows of $42.5 billion during the month of March. Municipals had shown strong absolute and relative performance prior to March, with yields declining 0.8% to over 1%, depending on the maturity since April of 2019. In March, open-end funds had to sell vast quantities of bonds to meet shareholder redemptions, and this selling contributed to yields rising over 2% in less than two weeks. The municipal market did recover toward the end of March and into April, as investor demand returned following the actions taken by the US Federal Reserve to address market liquidity and the passing of the Coronavirus Aid, Relief, and Economic Security Act, which included direct aid to municipalities. As a result, after the large moves during both periods, yields for high-grade municipal bonds ended lower for the 12-month period by 0.3% to 0.7%, with yields for shorter-maturity bonds declining more; for the six-month period, longer-maturity municipal yields were higher by about 0.15% and shorter-maturity bonds declined by about 0.3%. Over both the six- and 12-month periods, the additional yield provided by more credit-sensitive bonds increased.

During May, the municipal market showed signs of strength, as investor demand for tax-free debt surged and performance was positive after experiencing two months of sharp price declines. Year to date, high-grade municipals have mostly rebounded and were trading at yields comparable to pre-pandemic levels. Certain areas of the market such as mid-grade municipals rated A and BBB were still dislocated and may offer value to investors going forward. Given the fundamental strength of municipalities, supportive policy measures and the relative cheapness of these bonds, the Portfolios’ Senior Investment Management Team maintained the Portfolios’ overweight to mid-grade municipals during the period.

The Portfolios may purchase municipal securities that are insured under policies issued by certain insurance companies. In the past, insured municipal securities typically received a higher credit rating, which meant that the issuer of the securities paid a lower interest rate. As a result of declines in the credit quality and associated downgrades of most bond insurers, insurance has less value than it did in the past. The market now values insured municipal securities primarily based on the credit quality of the issuer of the security, with little value given to the insurance feature. In purchasing such insured securities, the Adviser evaluates the risk and return of municipal securities through its own research. If an insurance company’s rating is downgraded or the company becomes insolvent, the prices of municipal securities insured by the insurance company may decline.



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Portfolio	Insured Bonds¹		Pre-refunded/ ETM²/Insured Bonds¹

Arizona		6.80%		0.00%

Massachusetts		5.48%		0.00%

Minnesota		0.98%		0.00%

New Jersey		24.70%		6.72%

Ohio		2.65%		0.00%

Pennsylvania		14.04%		1.96%

Virginia		2.10%		0.00%

1	Breakdowns expressed as a percentage of investments in municipal bonds.

2	Escrowed to maturity.

INVESTMENT POLICIES

Each of the Portfolios pursues its objective by investing principally in high-yielding, predominantly investment-grade municipal securities. Each of the Portfolios invests, under normal circumstances, at least 80% of its net assets in municipal securities that pay interest that is exempt from federal income tax. These securities may pay interest that is subject to the federal alternative minimum tax for certain taxpayers. Each of the Portfolios pursues its objective by investing at least 80% of its net assets in municipal securities issued by the named state or municipal securities with interest that is otherwise exempt from the named state’s income tax.

The Portfolios may also invest in forward commitments; zero-coupon municipal securities and variable, floating and inverse floating-rate municipal securities; and derivatives, such as options, futures contracts, forwards and swaps.



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DISCLOSURES AND RISKS

Benchmark Disclosure

The Bloomberg Barclays Municipal Bond Index is unmanaged and does not reflect fees and expenses associated with the active management of a mutual fund portfolio. The Bloomberg Barclays Municipal Bond Index represents the performance of the long-term tax-exempt bond market consisting of investment-grade bonds. An investor cannot invest directly in an index, and its results are not indicative of the performance for any specific investment, including the Portfolios.

A Word About Risk

Market Risk: The market value of a security may move up or down, sometimes rapidly and unpredictably. These fluctuations may cause a security to be worth less than the price originally paid for it, or less than it was worth at an earlier time. Market risk may affect a single issuer, industry, sector of the economy or the market as a whole. Global economies and financial markets are increasingly interconnected, which increases the probabilities that conditions in one country or region might adversely impact issuers in a different country or region. Conditions affecting the general economy, including political, social, or economic instability at the local, regional, or global level may also affect the market value of a security. Health crises, such as pandemic and epidemic diseases, as well as other incidents that interrupt the expected course of events, such as natural disasters, war or civil disturbance, acts of terrorism, power outages and other unforeseeable and external events, and the public response to or fear of such diseases or events, have and may in the future have an adverse effect on the Portfolios’ investments and net asset value and can lead to increased market volatility. For example, any preventative or protective actions that governments may take in respect of such diseases or events may result in periods of business disruption, inability to obtain raw materials, supplies and component parts, and reduced or disrupted operations for the Portfolios’ portfolio companies. The occurrence and pendency of such diseases or events could adversely affect the economies and financial markets either in specific countries or worldwide.

Credit Risk: An issuer or guarantor of a fixed-income security, or the counterparty to a derivatives or other contract, may be unable or unwilling to make timely payments of interest or principal, or to otherwise honor its obligations. The issuer or guarantor may default, causing a loss of the full principal amount of a security. The degree of risk for a particular security may be reflected in its credit rating. There is the possibility that the credit rating of a fixed-income security may be downgraded after purchase, which may adversely affect the value of the security. Investments in fixed-income securities with lower ratings tend to have a higher probability that an issuer will default or fail to meet its payment obligations.



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DISCLOSURES AND RISKS (continued)

Municipal Market Risk: This is the risk that special factors may adversely affect the value of municipal securities and have a significant effect on the yield or value of the Portfolios’ investments in municipal securities. These factors include economic conditions, political or legislative changes, uncertainties related to the tax status of municipal securities, or the rights of investors in these securities. To the extent that the Portfolios invest more of their assets in a particular state’s municipal securities, the Portfolios may be vulnerable to events adversely affecting that state, including economic, political and regulatory occurrences, court decisions, terrorism and catastrophic natural disasters, such as hurricanes or earthquakes. The Portfolios’ investments in certain municipal securities with principal and interest payments that are made from the revenues of a specific project or facility, and not general tax revenues, may have increased risks. Factors affecting the project or facility, such as local business or economic conditions, could have a significant effect on the project’s ability to make payments of principal and interest on these securities.

Congress has previously considered making changes to the municipal securities provisions of the Internal Revenue Code that could change the US federal income tax treatment of certain types of municipal securities.

The Portfolios may invest in municipal securities of issuers in Puerto Rico or other US territories and their governmental agencies and municipalities, which are exempt from federal, state, and, where applicable, local income taxes. These municipal securities may have more risks than those of other US issuers of municipal securities. Like many US states and municipalities, Puerto Rico experienced a significant downturn during the recent recession. Puerto Rico’s downturn was particularly severe, and Puerto Rico continues to face a very challenging economic and fiscal environment. If the general economic situation in Puerto Rico continues to persist or worsens, the volatility and credit quality of Puerto Rican municipal securities could continue to be adversely affected, and the market for such securities may experience continued volatility.

Tax Risk: There is no guarantee that the income on the Portfolios’ municipal securities will be exempt from regular federal, and if applicable, state income taxes. From time to time, the US government and the US Congress consider changes in federal tax law that could limit or eliminate the federal tax exemption for municipal bond income, which would in effect reduce the income received by shareholders from the Portfolios by increasing taxes on that income. In such event, the Portfolios’ net asset value (“NAV”) could also decline as yields on municipal bonds, which are typically lower than those on taxable bonds, would be expected to increase to approximately the yield of comparable taxable bonds. Actions or anticipated actions affecting the tax-exempt status of municipal bonds could also result in significant shareholder redemptions of Portfolio shares as



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DISCLOSURES AND RISKS (continued)

investors anticipate adverse effects on the Portfolios or seek higher yields to offset the potential loss of the tax deduction. As a result, the Portfolios would be required to maintain higher levels of cash to meet the redemptions, which would negatively affect the Portfolios’ yield.

Interest-Rate Risk: Changes in interest rates will affect the value of investments in fixed-income securities. When interest rates rise, the value of existing investments in fixed-income securities tends to fall and this decrease in value may not be offset by higher income from new investments. Interest-rate risk is generally greater for fixed-income securities with longer maturities or durations.

Duration Risk: Duration is a measure that relates the expected price volatility of a fixed-income security to changes in interest rates. The duration of a fixed-income security may be shorter than or equal to full maturity of a fixed-income security. Fixed-income securities with longer durations have more risk and will decrease in price as interest rates rise.

Inflation Risk: This is the risk that the value of assets or income from investments will be less in the future as inflation decreases the value of money. As inflation increases, the value of the Portfolios’ assets can decline as can the value of the Portfolios’ distributions. This risk is significantly greater for fixed-income securities with longer maturities.

Illiquid Investments Risk: Illiquid investments risk exists when certain investments are or become difficult to purchase or sell. Difficulty in selling such investments may result in sales at disadvantageous prices affecting the value of your investment in the Portfolios. Causes of illiquid investments risk may include low trading volumes, large positions and heavy redemptions of Portfolio shares. Illiquid investments risk may be higher in a rising interest-rate environment, when the value and liquidity of fixed-income securities generally decline. Municipal securities may have more illiquid investments risk than other fixed-income securities because they trade less frequently and the market for municipal securities is generally smaller than many other markets.

Derivatives Risk: Derivatives may be difficult to price or unwind and leveraged so that small changes may produce disproportionate losses for the Portfolios. Derivatives, especially over-the-counter derivatives, are also subject to counterparty risk.

Management Risk: The Portfolios are subject to management risk because they are actively managed investment funds. The Adviser will apply its investment techniques and risk analyses in making investment decisions, but there is no guarantee that its techniques will produce the intended results.



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DISCLOSURES AND RISKS (continued)

These risks are fully discussed in the Portfolios’ prospectus. As with all investments, you may lose money by investing in the Portfolios.

An Important Note About Historical Performance

The investment return and principal value of an investment in the Portfolios will fluctuate, so that shares, when redeemed, may be worth more or less than their original cost. Performance shown in this report represents past performance and does not guarantee future results. Current performance may be lower or higher than the performance information shown. You may obtain performance information current to the most recent month-end by visiting www.abfunds.com. Class B shares are no longer being offered. Effective November 7, 2019, all outstanding Class B shares were converted to Class A shares. Please see Note A for more information.

All fees and expenses related to the operation of the Portfolios have been deducted. NAV returns do not reflect sales charges; if sales charges were reflected, the Portfolios’ quoted performance would be lower. SEC returns reflect the applicable sales charges for each share class: a 3.00% maximum front-end sales charge for Class A shares and a 1% 1-year contingent deferred sales charge for Class C shares. Returns for the different share classes will vary due to different expenses associated with each class. Performance assumes reinvestment of distributions and does not account for taxes.



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HISTORICAL PERFORMANCE

AB ARIZONA PORTFOLIO

GROWTH OF A $10,000 INVESTMENT IN THE PORTFOLIO (unaudited)

5/31/2010 TO 5/31/2020

LOGO

This chart illustrates the total value of an assumed $10,000 investment in AB Arizona Portfolio Class A shares (from 5/31/2010 to 5/31/2020) as compared to the performance of the Portfolio’s benchmark. Class A at Offering reflects the deduction of the maximum 3% sales charge from the initial $10,000 investment in the Portfolio and assumes the reinvestment of dividends and capital gains distributions.



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HISTORICAL PERFORMANCE (continued)

AB ARIZONA PORTFOLIO

AVERAGE ANNUAL RETURNS AS OF MAY 31, 2020 (unaudited)



	NAV Returns		SEC Returns (reflects applicable sales charges)		SEC Yields¹		Taxable Equivalent Yields²

CLASS A SHARES						1.27%		2.05%

1 Year		0.77%		-2.28%

5 Years		2.98%		2.36%

10 Years		3.54%		3.23%

CLASS C SHARES						0.57%		0.92%

1 Year		0.02%		-0.96%

5 Years		2.22%		2.22%

10 Years		2.80%		2.80%

The Portfolio’s current prospectus fee table shows the Portfolio’s total annual operating expense ratios as 1.01% and 1.76% for Class A and Class C shares, respectively, gross of any fee waivers or expense reimbursements. Contractual fee waivers and/or expense reimbursements limit the Portfolio’s annual operating expense ratios exclusive of interest expense to 0.78% and 1.53% for Class A and Class C shares, respectively. These waivers/reimbursements may not be terminated before September 30, 2020 and may be extended by the Adviser for additional one-year terms. Absent reimbursements or waivers, performance would have been lower. The Financial Highlights section of this report sets forth expense ratio data for the current reporting period; the expense ratios shown above may differ from the expense ratios in the Financial Highlights section since they are based on different time periods.

1	SEC yields are calculated based on SEC guidelines for the 30-day period ended May 31, 2020.

2	Taxable equivalent yields are based on SEC yields and a 35% marginal federal income tax rate and maximum state taxes where applicable.



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HISTORICAL PERFORMANCE (continued)

AB ARIZONA PORTFOLIO

SEC AVERAGE ANNUAL RETURNS

AS OF THE MOST RECENT CALENDAR QUARTER-END

JUNE 30, 2020 (unaudited)



	SEC Returns (reflects applicable sales charges)

CLASS A SHARES

1 Year		-1.39%

5 Years		2.68%

10 Years		3.37%

CLASS C SHARES

1 Year		-0.07%

5 Years		2.54%

10 Years		2.95%



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HISTORICAL PERFORMANCE

AB MASSACHUSETTS PORTFOLIO

GROWTH OF A $10,000 INVESTMENT IN THE PORTFOLIO (unaudited)

5/31/2010 TO 5/31/2020

LOGO

This chart illustrates the total value of an assumed $10,000 investment in AB Massachusetts Portfolio Class A shares (from 5/31/2010 to 5/31/2020) as compared to the performance of the Portfolio’s benchmark. Class A at Offering reflects the deduction of the maximum 3% sales charge from the initial $10,000 investment in the Portfolio and assumes the reinvestment of dividends and capital gains distributions.



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HISTORICAL PERFORMANCE (continued)

AB MASSACHUSETTS PORTFOLIO

AVERAGE ANNUAL RETURNS AS OF MAY 31, 2020 (unaudited)



	NAV Returns		SEC Returns (reflects applicable sales charges)		SEC Yields¹		Taxable Equivalent Yields²

CLASS A SHARES						1.60%		2.59%

1 Year		1.67%		-1.39%

5 Years		2.65%		2.03%

10 Years		3.40%		3.09%

CLASS C SHARES						0.91%		1.47%

1 Year		0.91%		-0.07%

5 Years		1.89%		1.89%

10 Years		2.66%		2.66%

ADVISOR CLASS SHARES³						1.90%		3.08%

1 Year		2.01%		2.01%

Since Inception⁴		1.95%		1.95%

The Portfolio’s current prospectus fee table shows the Portfolio’s total annual operating expense ratios as 0.90%, 1.65% and 0.65% for Class A, Class C and Advisor Class shares, respectively, gross of any fee waivers or expense reimbursements. Contractual fee waivers and/or expense reimbursements limit the Portfolio’s annual operating expense ratios exclusive of interest expense to 0.77%, 1.52% and 0.52% for Class A, Class C and Advisor Class shares, respectively. These waivers/reimbursements may not be terminated before September 30, 2020 and may be extended by the Adviser for additional one-year terms. Absent reimbursements or waivers, performance would have been lower. The Financial Highlights section of this report sets forth expense ratio data for the current reporting period; the expense ratios shown above may differ from the expense ratios in the Financial Highlights section since they are based on different time periods.

1	SEC yields are calculated based on SEC guidelines for the 30-day period ended May 31, 2020.

2	Taxable equivalent yields are based on SEC yields and a 35% marginal federal income tax rate and maximum state taxes where applicable.

This share class is offered at NAV to eligible investors and the SEC returns are the same as the NAV returns. Please note that this share class is for investors purchasing shares through accounts established under certain fee-based programs sponsored and maintained by certain broker-dealers and financial intermediaries, institutional pension plans and/or investment advisory clients of, and certain other persons associated with, the Adviser and its affiliates or the Portfolios.

4	Inception date: 7/25/2016.



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HISTORICAL PERFORMANCE (continued)

AB MASSACHUSETTS PORTFOLIO

SEC AVERAGE ANNUAL RETURNS

AS OF THE MOST RECENT CALENDAR QUARTER-END

JUNE 30, 2020 (unaudited)



	SEC Returns (reflects applicable sales charges)

CLASS A SHARES

1 Year		-0.27%

5 Years		2.37%

10 Years		3.23%

CLASS C SHARES

1 Year		1.06%

5 Years		2.24%

10 Years		2.81%

ADVISOR CLASS SHARES¹

1 Year		3.17%

Since Inception²		2.31%

2	Inception date: 7/25/2016.



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HISTORICAL PERFORMANCE

AB MINNESOTA PORTFOLIO

GROWTH OF A $10,000 INVESTMENT IN THE PORTFOLIO (unaudited)

5/31/2010 TO 5/31/2020

LOGO

This chart illustrates the total value of an assumed $10,000 investment in AB Minnesota Portfolio Class A shares (from 5/31/2010 to 5/31/2020) as compared to the performance of the Portfolio’s benchmark. Class A at Offering reflects the deduction of the maximum 3% sales charge from the initial $10,000 investment in the Portfolio and assumes the reinvestment of dividends and capital gains distributions.



abfunds.com		AB MUNICIPAL INCOME FUND II ^\| 17

HISTORICAL PERFORMANCE (continued)

AB MINNESOTA PORTFOLIO

AVERAGE ANNUAL RETURNS AS OF MAY 31, 2020 (unaudited)



	NAV Returns		SEC Returns (reflects applicable sales charges)		SEC Yields¹		Taxable Equivalent Yields²

CLASS A SHARES						0.94%		1.60%

1 Year		2.51%		-0.57%

5 Years		2.88%		2.25%

10 Years		3.37%		3.06%

CLASS C SHARES						0.24%		0.41%

1 Year		1.64%		0.64%

5 Years		2.11%		2.11%

10 Years		2.62%		2.62%

The Portfolio’s current prospectus fee table shows the Portfolio’s total annual operating expense ratios as 1.27% and 2.02% for Class A and Class C shares, respectively, gross of any fee waivers or expense reimbursements. Contractual fee waivers and/or expense reimbursements limit the Portfolio’s annual operating expense ratios exclusive of interest expense to 0.85% and 1.60% for Class A and Class C shares, respectively. These waivers/reimbursements may not be terminated before September 30, 2020 and may be extended by the Adviser for additional one-year terms. Absent reimbursements or waivers, performance would have been lower. The Financial Highlights section of this report sets forth expense ratio data for the current reporting period; the expense ratios shown above may differ from the expense ratios in the Financial Highlights section since they are based on different time periods.

1	SEC yields are calculated based on SEC guidelines for the 30-day period ended May 31, 2020.

2	Taxable equivalent yields are based on SEC yields and a 35% marginal federal income tax rate and maximum state taxes where applicable.



18 ^\| AB MUNICIPAL INCOME FUND II		abfunds.com

HISTORICAL PERFORMANCE (continued)

AB MINNESOTA PORTFOLIO

SEC AVERAGE ANNUAL RETURNS

AS OF THE MOST RECENT CALENDAR QUARTER-END

JUNE 30, 2020 (unaudited)



	SEC Returns (reflects applicable sales charges)

CLASS A SHARES

1 Year		-0.37%

5 Years		2.38%

10 Years		3.12%

CLASS C SHARES

1 Year		0.94%

5 Years		2.24%

10 Years		2.68%



abfunds.com		AB MUNICIPAL INCOME FUND II ^\| 19

HISTORICAL PERFORMANCE

AB NEW JERSEY PORTFOLIO

GROWTH OF A $10,000 INVESTMENT IN THE PORTFOLIO (unaudited)

5/31/2010 TO 5/31/2020

LOGO

This chart illustrates the total value of an assumed $10,000 investment in AB New Jersey Portfolio Class A shares (from 5/31/2010 to 5/31/2020) as compared to the performance of the Portfolio’s benchmark. Class A at Offering reflects the deduction of the maximum 3% sales charge from the initial $10,000 investment in the Portfolio and assumes the reinvestment of dividends and capital gains distributions.



20 ^\| AB MUNICIPAL INCOME FUND II		abfunds.com

HISTORICAL PERFORMANCE (continued)

AB NEW JERSEY PORTFOLIO

AVERAGE ANNUAL RETURNS AS OF MAY 31, 2020 (unaudited)



	NAV Returns		SEC Returns (reflects applicable sales charges)		SEC Yields¹		Taxable Equivalent Yields²

CLASS A SHARES						1.88%		3.24%

1 Year		0.50%		-2.47%

5 Years		3.13%		2.50%

10 Years		3.55%		3.23%

CLASS C SHARES						1.20%		2.07%

1 Year		-0.25%		-1.22%

5 Years		2.38%		2.38%

10 Years		2.80%		2.80%

The Portfolio’s current prospectus fee table shows the Portfolio’s total annual operating expense ratios as 1.07% and 1.82% for Class A and Class C shares, respectively, gross of any fee waivers or expense reimbursements. Contractual fee waivers and/or expense reimbursements limit the Portfolio’s annual operating expense ratios exclusive of interest expense to 0.82% and 1.57% for Class A and Class C shares, respectively. These waivers/reimbursements may not be terminated before September 30, 2020 and may be extended by the Adviser for additional one-year terms. Absent reimbursements or waivers, performance would have been lower. The Financial Highlights section of this report sets forth expense ratio data for the current reporting period; the expense ratios shown above may differ from the expense ratios in the Financial Highlights section since they are based on different time periods.

1	SEC yields are calculated based on SEC guidelines for the 30-day period ended May 31, 2020.

2	Taxable equivalent yields are based on SEC yields and a 35% marginal federal income tax rate and maximum state taxes where applicable.



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HISTORICAL PERFORMANCE (continued)

AB NEW JERSEY PORTFOLIO

SEC AVERAGE ANNUAL RETURNS

AS OF THE MOST RECENT CALENDAR QUARTER-END

JUNE 30, 2020 (unaudited)



	SEC Returns (reflects applicable sales charges)

CLASS A SHARES

1 Year		-1.13%

5 Years		2.92%

10 Years		3.39%

CLASS C SHARES

1 Year		0.02%

5 Years		2.77%

10 Years		2.95%



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��

HISTORICAL PERFORMANCE

AB OHIO PORTFOLIO

GROWTH OF A $10,000 INVESTMENT IN THE PORTFOLIO (unaudited)

5/31/2010 TO 5/31/2020

LOGO

This chart illustrates the total value of an assumed $10,000 investment in AB Ohio Portfolio Class A shares (from 5/31/2010 to 5/31/2020) as compared to the performance of the Portfolio’s benchmark. Class A at Offering reflects the deduction of the maximum 3% sales charge from the initial $10,000 investment in the Portfolio and assumes the reinvestment of dividends and capital gains distributions.



abfunds.com		AB MUNICIPAL INCOME FUND II ^\| 23

HISTORICAL PERFORMANCE (continued)

AB OHIO PORTFOLIO

AVERAGE ANNUAL RETURNS AS OF MAY 31, 2020 (unaudited)



	NAV Returns		SEC Returns (reflects applicable sales charges)		SEC Yields¹		Taxable Equivalent Yields²

CLASS A SHARES						1.61%		2.61%

1 Year		1.45%		-1.60%

5 Years		2.86%		2.23%

10 Years		3.09%		2.78%

CLASS C SHARES						0.92%		1.49%

1 Year		0.70%		-0.29%

5 Years		2.12%		2.12%

10 Years		2.36%		2.36%

The Portfolio’s current prospectus fee table shows the Portfolio’s total annual operating expense ratios as 1.11% and 1.86% for Class A and Class C shares, respectively, gross of any fee waivers or expense reimbursements. Contractual fee waivers and/or expense reimbursements limit the Portfolio’s annual operating expense ratios exclusive of interest expense to 0.80% and 1.55% for Class A and Class C shares, respectively. These waivers/reimbursements may not be terminated before September 30, 2020 and may be extended by the Adviser for additional one-year terms. Absent reimbursements or waivers, performance would have been lower. The Financial Highlights section of this report sets forth expense ratio data for the current reporting period; the expense ratios shown above may differ from the expense ratios in the Financial Highlights section since they are based on different time periods.

1	SEC yields are calculated based on SEC guidelines for the 30-day period ended May 31, 2020.

2	Taxable equivalent yields are based on SEC yields and a 35% marginal federal income tax rate and maximum state taxes where applicable.



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HISTORICAL PERFORMANCE (continued)

AB OHIO PORTFOLIO

SEC AVERAGE ANNUAL RETURNS

AS OF THE MOST RECENT CALENDAR QUARTER-END

JUNE 30, 2020 (unaudited)



	SEC Returns (reflects applicable sales charges)

CLASS A SHARES

1 Year		-0.58%

5 Years		2.60%

10 Years		2.91%

CLASS C SHARES

1 Year		0.73%

5 Years		2.47%

10 Years		2.49%



abfunds.com		AB MUNICIPAL INCOME FUND II ^\| 25

HISTORICAL PERFORMANCE

AB PENNSYLVANIA PORTFOLIO

GROWTH OF A $10,000 INVESTMENT IN THE PORTFOLIO (unaudited)

5/31/2010 TO 5/31/2020

LOGO

This chart illustrates the total value of an assumed $10,000 investment in AB Pennsylvania Portfolio Class A shares (from 5/31/2010 to 5/31/2020) as compared to the performance of the Portfolio’s benchmark. Class A at Offering reflects the deduction of the maximum 3% sales charge from the initial $10,000 investment in the Portfolio and assumes the reinvestment of dividends and capital gains distributions.



26 ^\| AB MUNICIPAL INCOME FUND II		abfunds.com

HISTORICAL PERFORMANCE (continued)

AB PENNSYLVANIA PORTFOLIO

AVERAGE ANNUAL RETURNS AS OF MAY 31, 2020 (unaudited)



	NAV Returns		SEC Returns (reflects applicable sales charges)		SEC Yields¹		Taxable Equivalent Yields²

CLASS A SHARES						1.38%		2.19%

1 Year		1.95%		-1.15%

5 Years		3.06%		2.44%

10 Years		3.59%		3.28%

CLASS C SHARES						0.68%		1.08%

1 Year		1.09%		0.10%

5 Years		2.29%		2.29%

10 Years		2.83%		2.83%

The Portfolio’s current prospectus fee table shows the Portfolio’s total annual operating expense ratios as 1.12% and 1.87% for Class A and Class C shares, respectively, gross of any fee waivers or expense reimbursements. Contractual fee waivers and/or expense reimbursements limit the Portfolio’s annual operating expense ratios exclusive of interest expense to 0.85% and 1.60% for Class A and Class C shares, respectively. These waivers/reimbursements may not be terminated before September 30, 2020 and may be extended by the Adviser for additional one-year terms. Absent reimbursements or waivers, performance would have been lower. The Financial Highlights section of this report sets forth expense ratio data for the current reporting period; the expense ratios shown above may differ from the expense ratios in the Financial Highlights section since they are based on different time periods.

1	SEC yields are calculated based on SEC guidelines for the 30-day period ended May 31, 2020.

2	Taxable equivalent yields are based on SEC yields and a 35% marginal federal income tax rate and maximum state taxes where applicable.



abfunds.com		AB MUNICIPAL INCOME FUND II ^\| 27

HISTORICAL PERFORMANCE (continued)

AB PENNSYLVANIA PORTFOLIO

SEC AVERAGE ANNUAL RETURNS

AS OF THE MOST RECENT CALENDAR QUARTER-END

JUNE 30, 2020 (unaudited)



	SEC Returns (reflects applicable sales charges)

CLASS A SHARES

1 Year		-0.38%

5 Years		2.73%

10 Years		3.36%

CLASS C SHARES

1 Year		1.05%

5 Years		2.60%

10 Years		2.93%



28 ^\| AB MUNICIPAL INCOME FUND II		abfunds.com

HISTORICAL PERFORMANCE

AB VIRGINIA PORTFOLIO

GROWTH OF A $10,000 INVESTMENT IN THE PORTFOLIO (unaudited)

5/31/2010 TO 5/31/2020

LOGO

This chart illustrates the total value of an assumed $10,000 investment in AB Virginia Portfolio Class A shares (from 5/31/2010 to 5/31/2020) as compared to the performance of the Portfolio’s benchmark. Class A at Offering reflects the deduction of the maximum 3% sales charge from the initial $10,000 investment in the Portfolio and assumes the reinvestment of dividends and capital gains distributions.



abfunds.com		AB MUNICIPAL INCOME FUND II ^\| 29

HISTORICAL PERFORMANCE (continued)

AB VIRGINIA PORTFOLIO

AVERAGE ANNUAL RETURNS AS OF MAY 31, 2020 (unaudited)



	NAV Returns		SEC Returns (reflects applicable sales charges)		SEC Yields¹		Taxable Equivalent Yields²

CLASS A SHARES						1.41%		2.30%

1 Year		1.71%		-1.38%

5 Years		2.90%		2.28%

10 Years		3.61%		3.30%

CLASS C SHARES						0.71%		1.16%

1 Year		1.04%		0.05%

5 Years		2.16%		2.16%

10 Years		2.88%		2.88%

ADVISOR CLASS SHARES³						1.70%		2.77%

1 Year		1.96%		1.96%

Since Inception⁴		2.22%		2.22%

The Portfolio’s current prospectus fee table shows the Portfolio’s total annual operating expense ratios as 0.90%, 1.66% and 0.65% for Class A, Class C and Advisor Class shares, respectively, gross of any fee waivers or expense reimbursements. Contractual fee waivers and/or expense reimbursements limit the Portfolio’s annual operating expense ratios exclusive of interest expense to 0.80%, 1.55% and 0.55% for Class A, Class C and Advisor Class shares, respectively. These waivers/reimbursements may not be terminated before September 30, 2020 and may be extended by the Adviser for additional one-year terms. Absent reimbursements or waivers, performance would have been lower. The Financial Highlights section of this report sets forth expense ratio data for the current reporting period; the expense ratios shown above may differ from the expense ratios in the Financial Highlights section since they are based on different time periods.

1	SEC yields are calculated based on SEC guidelines for the 30-day period ended May 31, 2020.

2	Taxable equivalent yields are based on SEC yields and a 35% marginal federal income tax rate and maximum state taxes where applicable.

4	Inception date: 7/25/2016.



30 ^\| AB MUNICIPAL INCOME FUND II		abfunds.com

HISTORICAL PERFORMANCE (continued)

AB VIRGINIA PORTFOLIO

SEC AVERAGE ANNUAL RETURNS

AS OF THE MOST RECENT CALENDAR QUARTER-END

JUNE 30, 2020 (unaudited)



	SEC Returns (reflects applicable sales charges)

CLASS A SHARES

1 Year		-0.41%

5 Years		2.60%

10 Years		3.44%

CLASS C SHARES

1 Year		0.93%

5 Years		2.47%

10 Years		3.01%

ADVISOR CLASS SHARES¹

1 Year		2.95%

Since Inception²		2.54%

2	Inception date: 7/25/2016.



abfunds.com		AB MUNICIPAL INCOME FUND II ^\| 31

EXPENSE EXAMPLE

(unaudited)

As a shareholder of a Portfolio, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments, contingent deferred sales charges on redemptions and (2) ongoing costs, including management fees; distribution (12b-1) fees; and other Portfolio expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Portfolio and to compare these costs with the ongoing costs of investing in other mutual funds.

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period as indicated below.

Actual Expenses

The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The second line of the table below provides information about hypothetical account values and hypothetical expenses based on a Portfolio’s actual expense ratio and an assumed annual rate of return of 5% before expenses, which is not the Portfolio’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds by comparing this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), or contingent deferred sales charges on redemptions. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.



32 ^\| AB MUNICIPAL INCOME FUND II		abfunds.com

EXPENSE EXAMPLE (continued)

(unaudited)

AB Arizona Portfolio


	Beginning Account Value December 1, 2019		Ending Account Value May 31, 2020		Expenses Paid During Period*		Annualized Expense Ratio*
Class A
Actual	$	1,000	$	986.20	$	3.87		0.78	%
Hypothetical**	$	1,000	$	1,021.10	$	3.94		0.78	%
Class C
Actual	$	1,000	$	982.50	$	7.58		1.53	%
Hypothetical**	$	1,000	$	1,017.35	$	7.72		1.53	%

AB Massachusetts Portfolio


	Beginning Account Value December 1, 2019		Ending Account Value May 31, 2020		Expenses Paid During Period*		Annualized Expense Ratio*
Class A
Actual	$	1,000	$	996.10	$	3.84		0.77	%
Hypothetical**	$	1,000	$	1,021.15	$	3.89		0.77	%
Class C
Actual	$	1,000	$	992.30	$	7.57		1.52	%
Hypothetical**	$	1,000	$	1,017.40	$	7.67		1.52	%
Advisor Class
Actual	$	1,000	$	997.30	$	2.60		0.52	%
Hypothetical**	$	1,000	$	1,022.40	$	2.63		0.52	%

AB Minnesota Portfolio


	Beginning Account Value December 1, 2019		Ending Account Value May 31, 2020		Expenses Paid During Period*		Annualized Expense Ratio*
Class A
Actual	$	1,000	$	1,004.40	$	4.26		0.85	%
Hypothetical**	$	1,000	$	1,020.75	$	4.29		0.85	%
Class C
Actual	$	1,000	$	1,000.60	$	8.00		1.60	%
Hypothetical**	$	1,000	$	1,017.00	$	8.07		1.60	%

AB New Jersey Portfolio


	Beginning Account Value December 1, 2019		Ending Account Value May 31, 2020		Expenses Paid During Period*		Annualized Expense Ratio*
Class A
Actual	$	1,000	$	982.70	$	4.11		0.83	%
Hypothetical**	$	1,000	$	1,020.85	$	4.19		0.83	%
Class C
Actual	$	1,000	$	979.00	$	7.82		1.58	%
Hypothetical**	$	1,000	$	1,017.10	$	7.97		1.58	%



abfunds.com		AB MUNICIPAL INCOME FUND II ^\| 33

EXPENSE EXAMPLE (continued)

(unaudited)

AB Ohio Portfolio


	Beginning Account Value December 1, 2019		Ending Account Value May 31, 2020		Expenses Paid During Period*		Annualized Expense Ratio*
Class A
Actual	$	1,000	$	992.90	$	4.04		0.81	%
Hypothetical**	$	1,000	$	1,020.95	$	4.09		0.81	%
Class C
Actual	$	1,000	$	990.20	$	7.76		1.56	%
Hypothetical**	$	1,000	$	1,017.20	$	7.87		1.56	%

AB Pennsylvania Portfolio


	Beginning Account Value December 1, 2019		Ending Account Value May 31, 2020		Expenses Paid During Period*		Annualized Expense Ratio*
Class A
Actual	$	1,000	$	997.30	$	4.29		0.86	%
Hypothetical**	$	1,000	$	1,020.70	$	4.34		0.86	%
Class C
Actual	$	1,000	$	993.60	$	8.02		1.61	%
Hypothetical**	$	1,000	$	1,016.95	$	8.12		1.61	%

AB Virginia Portfolio


	Beginning Account Value December 1, 2019		Ending Account Value May 31, 2020		Expenses Paid During Period*		Annualized Expense Ratio*
Class A
Actual	$	1,000	$	995.50	$	3.99		0.80	%
Hypothetical**	$	1,000	$	1,021.00	$	4.04		0.80	%
Class C
Actual	$	1,000	$	992.70	$	7.72		1.55	%
Hypothetical**	$	1,000	$	1,017.25	$	7.82		1.55	%
Advisor Class
Actual	$	1,000	$	996.80	$	2.75		0.55	%
Hypothetical**	$	1,000	$	1,022.25	$	2.78		0.55	%

*	Expenses are equal to the classes’ annualized expense ratios, multiplied by the average account value over the period, multiplied by 183/366 (to reflect the one-half year period).

**	Assumes 5% annual return before expenses.



34 ^\| AB MUNICIPAL INCOME FUND II		abfunds.com

BOND RATING SUMMARY¹

May 31, 2020 (unaudited)

LOGO

All data are as of May 31, 2020. The Portfolio’s quality rating breakdown is expressed as a percentage of the Portfolio’s total investments in municipal securities and may vary over time. The Portfolio also enters into derivative transactions, which may be used for hedging or investment purposes (see “Portfolio of Investments” section of the report for additional details). The quality ratings are determined by using the S&P Global Ratings (“S&P”), Moody’s Investors Services, Inc. (“Moody’s”) and Fitch Ratings, Ltd. (“Fitch”). The Portfolio considers the credit ratings issued by S&P, Moody’s and Fitch and uses the highest rating issued by the agencies. These ratings are a measure of the quality and safety of a bond or portfolio, based on the issuer’s financial condition. AAA is the highest (best) and D is the lowest (worst). If applicable, the Pre-refunded category includes bonds which are secured by US Government securities and therefore are deemed high-quality investment grade by the Adviser. If applicable, Not Applicable (N/A) includes non-creditworthy investments, such as equities, currency contracts, futures and options. If applicable, the Not Rated category includes bonds that are not rated by a nationally recognized statistical rating organization. The Adviser evaluates the creditworthiness of non-rated securities based on a number of factors including, but not limited to, cash flows, enterprise value and economic environment.



abfunds.com		AB MUNICIPAL INCOME FUND II ^\| 35

BOND RATING SUMMARY¹ (continued)

May 31, 2020 (unaudited)

LOGO



36 ^\| AB MUNICIPAL INCOME FUND II		abfunds.com

BOND RATING SUMMARY¹ (continued)

May 31, 2020 (unaudited)

LOGO



abfunds.com		AB MUNICIPAL INCOME FUND II ^\| 37

BOND RATING SUMMARY¹ (continued)

May 31, 2020 (unaudited)

LOGO



38 ^\| AB MUNICIPAL INCOME FUND II		abfunds.com

PORTFOLIO OF INVESTMENTS

AB ARIZONA PORTFOLIO

May 31, 2020


	Principal Amount (000)		U.S. $ Value

MUNICIPAL OBLIGATIONS – 95.0%
Long-Term Municipal Bonds – 95.0%
Arizona – 79.0%
Arizona Department of Transportation State Highway Fund Revenue Series 2011A 5.25%, 07/01/2029 (Pre-refunded/ETM)	$	1,500	$	1,582,230
Series 2013A 5.00%, 07/01/2037 (Pre-refunded/ETM)		3,000		3,296,190
Arizona Game & Fish Department & Commission (Arizona Game & Fish Department & Commission State Lease) Series 2006 5.00%, 07/01/2026		1,000		1,003,520
Arizona Health Facilities Authority (HonorHealth) Series 2014A 5.00%, 12/01/2034		3,000		3,296,460
Arizona Industrial Development Authority Series 20192 – Class A 3.625%, 05/20/2033		1,070		1,071,532
Arizona Industrial Development Authority (North Carolina Central University Project) BAM 5.00%, 06/01/2058		2,300		2,631,982
Arizona Industrial Development Authority (Pinecrest Academy of Nevada) Series 2020A 4.00%, 07/15/2050^(a)		600		491,040
Arizona Industrial Development Authority (Provident Group – EMU Properties LLC) Series 2018 5.00%, 05/01/2043-05/01/2048		2,100		2,067,541
Arizona State University Series 2014 5.00%, 08/01/2033		2,050		2,353,994
City of Buckeye AZ (Town of Buckeye AZ Excise Tax) Series 2015 5.00%, 07/01/2035		3,450		4,144,795
City of Glendale AZ Water & Sewer Revenue Series 2012 5.00%, 07/01/2028		2,000		2,183,080



abfunds.com		AB MUNICIPAL INCOME FUND II ^\| 39

PORTFOLIO OF INVESTMENTS (continued)

AB ARIZONA PORTFOLIO


	Principal Amount (000)		U.S. $ Value

City of Mesa AZ Series 2013 5.00%, 07/01/2032 (Pre-refunded/ETM)	$	5,000	$	5,493,650
City of Mesa AZ Utility System Revenue Series 2016 4.00%, 07/01/2032		1,000		1,148,540
City of Phoenix Civic Improvement Corp. (City of Phoenix AZ Lease) Series 2019A 4.00%, 07/01/2045		2,150		2,216,370
City of Phoenix Civic Improvement Corp. (Phoenix Sky Harbor International Airport) 5.00%, 07/01/2049		2,500		2,920,650
Series 2017A 5.00%, 07/01/2033		750		871,305
City of Tempe AZ (City of Tempe AZ Excise Tax) Series 2016 5.00%, 07/01/2030		520		647,426
City of Tucson AZ Water System Revenue Series 2012 5.00%, 07/01/2028 (Pre-refunded/ETM)		500		549,915
5.00%, 07/01/2029 (Pre-refunded/ETM)		1,860		2,045,684
County of Pinal AZ Series 2014 5.00%, 08/01/2032		2,840		3,309,253
Glendale Industrial Development Authority (Beatitudes Campus Obligated Group (The)) Series 2017 5.00%, 11/15/2036		1,000		874,490
Glendale Industrial Development Authority (Royal Oaks Life Care Community) Series 2016 5.00%, 05/15/2039		1,000		1,044,410
Glendale Municipal Property Corp. (Glendale Municipal Property Corp. Excise Tax) Series 2012C 5.00%, 07/01/2038		2,500		2,754,850
Industrial Development Authority of the City of Phoenix (The) Series 2012 6.00%, 07/01/2032 (Pre-refunded/ETM)		250		264,545



40 ^\| AB MUNICIPAL INCOME FUND II		abfunds.com

PORTFOLIO OF INVESTMENTS (continued)

AB ARIZONA PORTFOLIO


	Principal Amount (000)		U.S. $ Value

Industrial Development Authority of the City of Phoenix (The) (Downtown Phoenix Student Housing LLC) Series 2018A 5.00%, 07/01/2037-07/01/2042	$	2,250	$	2,275,335
Industrial Development Authority of the City of Phoenix (The) (JMF-Higley 2012 LLC) Series 2012 5.00%, 12/01/2032		2,500		2,753,600
Maricopa County Industrial Development Authority (Banner Health Obligated Group) Series 2016A 5.00%, 01/01/2033-01/01/2035		3,400		4,014,060
Maricopa County Industrial Development Authority (Benjamin Franklin Charter School Ltd.) Series 2018A 6.00%, 07/01/2052^(a)		830		874,430
Maricopa County Industrial Development Authority (GreatHearts Arizona Obligated Group) Series 2017A 5.00%, 07/01/2037		750		875,903
Maricopa County Industrial Development Authority (Reid Traditional Schools Painted Rock Academy) Series 2016 5.00%, 07/01/2036-07/01/2047		2,450		2,629,734
Maricopa County Special Health Care District Series 2018C 5.00%, 07/01/2034-07/01/2036		4,700		5,762,071
McAllister Academic Village LLC (Arizona State University) Series 2016 5.00%, 07/01/2037		2,500		2,976,725
Northern Arizona University BAM Series 2015 5.00%, 06/01/2034		1,000		1,159,400
Pinal County Industrial Development Authority (Florence West Prison Expansion LLC) ACA Series 2006A 5.25%, 10/01/2022		1,400		1,401,386



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PORTFOLIO OF INVESTMENTS (continued)

AB ARIZONA PORTFOLIO


	Principal Amount (000)		U.S. $ Value

Salt River Project Agricultural Improvement & Power District Series 2012A 5.00%, 12/01/2029	$	1,500	$	1,637,040
Salt Verde Financial Corp. (Citigroup, Inc.) Series 2007 5.00%, 12/01/2037		2,500		3,256,125
5.25%, 12/01/2022-12/01/2023		1,165		1,300,770
Student & Academic Services LLC (Northern Arizona University) BAM Series 2014 5.00%, 06/01/2044		1,200		1,373,508
Tempe Industrial Development Authority (Friendship Village of Tempe) 5.00%, 12/01/2054		815		642,098
Tempe Industrial Development Authority (Mirabella at ASU, Inc.) Series 2017A 6.125%, 10/01/2047^(a)		400		384,844
University of Arizona (The) Series 2014 5.00%, 08/01/2033		3,765		4,233,705
Western Maricopa Education Center District No. 402 Series 2014B 4.50%, 07/01/2033-07/01/2034		3,940		4,400,724

				90,214,910

Alabama – 0.2%
Tuscaloosa County Industrial Development Authority (Hunt Refining Co.) Series 2019A 5.25%, 05/01/2044^(a)		215		219,438


American Samoa – 0.3%
American Samoa Economic Development Authority (Territory of American Samoa) 7.125%, 09/01/2038^(a)		245		291,565


California – 0.4%
Golden State Tobacco Securitization Corp. Series 2018A 5.00%, 06/01/2047		465		465,200



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PORTFOLIO OF INVESTMENTS (continued)

AB ARIZONA PORTFOLIO


	Principal Amount (000)		U.S. $ Value

Delaware – 0.5%
Delaware State Economic Development Authority (Newark Charter School, Inc.) Series 2016 5.00%, 09/01/2036	$	520	$	569,259


Florida – 1.1%
Capital Trust Agency, Inc. (Provision Cares Proton Therapy Center – Orlando) Series 2018A 7.50%, 06/01/2048^(a)		100		88,982
Halifax Hospital Medical Center (Halifax Hospital Medical Center Obligated Group) Series 2015 5.00%, 06/01/2035		1,000		1,118,960

				1,207,942

Georgia – 0.2%
Municipal Electric Authority of Georgia 5.00%, 01/01/2056		200		221,018


Guam – 1.6%
Guam Government Waterworks Authority Series 2016 5.00%, 01/01/2046		775		827,475
Guam Power Authority Series 2017A 5.00%, 10/01/2036-10/01/2040		875		931,299
Territory of Guam 5.00%, 11/15/2031		100		100,799

				1,859,573

Illinois – 2.9%
Chicago Board of Education Series 2018A 5.00%, 12/01/2031		335		336,246
Cook County Forest Preserve District Series 2012C 5.00%, 12/15/2032		2,360		2,522,793
Metropolitan Pier & Exposition Authority 5.00%, 06/15/2050		415		398,670

				3,257,709



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PORTFOLIO OF INVESTMENTS (continued)

AB ARIZONA PORTFOLIO


	Principal Amount (000)		U.S. $ Value

Indiana – 0.1%
Indiana Finance Authority (RES Polyflow Indiana LLC) 7.00%, 03/01/2039^(a)	$	145	$	121,912


Kentucky – 0.9%
Kentucky Economic Development Finance Authority (Owensboro Health, Inc. Obligated Group) Series 2017A 5.25%, 06/01/2041		1,000		1,064,210


Louisiana – 0.5%
Louisiana Local Government Environmental Facilities & Community Development Auth (St. James Place of Baton Rouge) Series 2015A 6.25%, 11/15/2045		500		502,495
Parish of St. James LA (NuStar Logistics LP) Series 20202 6.35%, 07/01/2040^(a)(b)		100		109,613

				612,108

Michigan – 0.0%
City of Detroit MI 5.00%, 04/01/2036		50		51,212


New York – 0.6%
Suffolk County Economic Development Corp. (Catholic Health Services of Long Island Obligated Group) Series 2011 5.00%, 07/01/2028		700		724,913


North Carolina – 0.6%
North Carolina Medical Care Commission (Aldersgate United Methodist Retirement Community, Inc.) Series 2015 4.70%, 07/01/2037		300		267,207
North Carolina Medical Care Commission (Pennybyrn at Maryfield) Series 2015 5.00%, 10/01/2035		500		444,315

				711,522



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PORTFOLIO OF INVESTMENTS (continued)

AB ARIZONA PORTFOLIO


	Principal Amount (000)		U.S. $ Value

Ohio – 0.3%
Ohio Water Development Authority Water Pollution Control Loan Fund (Energy Harbor Nuclear Generation LLC) Series 2016A 4.375%, 06/01/2033	$	320	$	320,000


Puerto Rico – 1.5%
Puerto Rico Electric Power Authority AGM Series 2007V 5.25%, 07/01/2031		100		106,088
NATL Series 2007V 5.25%, 07/01/2029		100		100,061
Puerto Rico Highway & Transportation Authority AGC Series 2007C 5.50%, 07/01/2031		140		151,549
AGC Series 2007N 5.25%, 07/01/2034-07/01/2036		335		356,340
Puerto Rico Industrial Tourist Educational Medical & Environmental Control Facilities Financing Auth (AES Puerto Rico LP) Series 2000 6.625%, 06/01/2026		345		356,213
Puerto Rico Public Buildings Authority (Commonwealth of Puerto Rico) NATL Series 2007 6.00%, 07/01/2025		100		103,000
Puerto Rico Sales Tax Financing Corp. Sales Tax Revenue Series 2018A Zero Coupon, 07/01/2029		130		94,034
Series 2019A 4.329%, 07/01/2040		105		100,800
5.00%, 07/01/2058		375		375,285

				1,743,370

South Carolina – 0.6%
South Carolina Public Service Authority Series 2016B 5.00%, 12/01/2041		620		685,125



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PORTFOLIO OF INVESTMENTS (continued)

AB ARIZONA PORTFOLIO


	Principal Amount (000)		U.S. $ Value

Tennessee – 0.1%
Bristol Industrial Development Board (Bristol Industrial Development Board Sales Tax) Series 2016A 5.00%, 12/01/2035^(a)	$	165	$	147,121


Texas – 3.3%
Mission Economic Development Corp. (Natgasoline LLC) Series 2018 4.625%, 10/01/2031^(a)		290		292,120
North Texas Tollway Authority (North Texas Tollway System) Series 2015A 5.00%, 01/01/2034		1,000		1,143,280
Series 2015B 5.00%, 01/01/2034		1,300		1,486,264
Texas Private Activity Bond Surface Transportation Corp. (LBJ Infrastructure Group LLC) Series 2010 7.00%, 06/30/2040		840		844,191

				3,765,855

Washington – 0.3%
Kalispel Tribe of Indians Series 2018B 5.25%, 01/01/2038^(a)(b)		225		235,728
Washington State Housing Finance Commission (Presbyterian Retirement Communities Northwest Obligated Group) Series 2019A 5.00%, 01/01/2055^(a)		100		84,345

				320,073


Total Municipal Obligations (cost $104,665,687)				108,574,035



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PORTFOLIO OF INVESTMENTS (continued)

AB ARIZONA PORTFOLIO


	Shares		U.S. $ Value

SHORT-TERM INVESTMENTS – 2.7%
Investment Companies – 2.7%
AB Fixed Income Shares, Inc. – Government Money Market Portfolio – Class AB, 0.14%^(c)(d)(e) (cost $3,017,561)		3,017,561	$	3,017,561


Total Investments – 97.7% (cost $107,683,248)				111,591,596
Other assets less liabilities – 2.3%				2,658,525


Net Assets – 100.0%			$	114,250,121

CENTRALLY CLEARED INFLATION (CPI) SWAPS (see Note D)


				Rate Type
Notional Amount (000)		Termination Date		Payments made by the Fund		Payments received by the Fund		Payment Frequency Paid/ Received	Market Value			Upfront Premiums Paid (Received)		Unrealized Appreciation/ (Depreciation)
USD	2,740		01/15/2025		1.671%		CPI^#	Maturity	$	(99,364	)	$	—	$	(99,364	)
USD	945		01/15/2025		1.637%		CPI^#	Maturity		(34,188	)		—		(34,188	)
USD	2,115		01/15/2025		1.673%		CPI^#	Maturity		(80,567	)		—		(80,567	)
USD	2,140		01/15/2028		0.735%		CPI^#	Maturity		85,323			—		85,323
USD	2,840		01/15/2028		1.230%		CPI^#	Maturity		(4,815	)		—		(4,815	)
USD	1,000		08/09/2024		1.690%		CPI^#	Maturity		(36,469	)		—		(36,469	)

									$	(170,080	)	$	—	$	(170,080	)

#	Variable interest rate based on the rate of inflation as determined by the Consumer Price Index (CPI).

CENTRALLY CLEARED INTEREST RATE SWAPS (see Note D)


				Rate Type
Notional Amount (000)		Termination Date		Payments made by the Fund	Payments received by the Fund	Payment Frequency Paid/ Received	Market Value		Upfront Premiums Paid (Received)		Unrealized Appreciation/ (Depreciation)
USD	5,680		08/09/2022	3 Month LIBOR	1.486%	Quarterly/Semi-Annual	$	178,489	$	—	$	178,489
USD	3,500		10/15/2024	3 Month LIBOR	1.582%	Quarterly/ Semi-Annual		190,761		—		190,761
USD	376		02/05/2025	3 Month LIBOR	1.361%	Quarterly/Semi-Annual		19,373		—		19,373



abfunds.com		AB MUNICIPAL INCOME FUND II ^\| 47

PORTFOLIO OF INVESTMENTS (continued)

AB ARIZONA PORTFOLIO


				Rate Type
Notional Amount (000)		Termination Date		Payments made by the Fund		Payments received by the Fund		Payment Frequency Paid/ Received	Market Value		Upfront Premiums Paid (Received)		Unrealized Appreciation/ (Depreciation)
USD	844		02/06/2025		3 Month LIBOR		1.419%	Quarterly/Semi-Annual	$	46,001	$	—	$	46,001
USD	1,245		10/09/2029		3 Month LIBOR		1.473%	Quarterly/ Semi-Annual		98,143		—		98,143

									$	532,767	$	—	$	532,767

INFLATION (CPI) SWAPS (see Note D)


						Rate Type
Swap Counterparty	Notional Amount (000)			Termination Date		Payments made by the Fund			Payments received by the Fund			Payment Frequency Paid/ Received		Market Value			Upfront Premiums Paid (Received)		Unrealized Appreciation/ (Depreciation)
JPMorgan Chase Bank, N.A.		USD	3,358		08/30/2020		2.210	%		CPI	^#		Maturity	$	(84,147	)	$	—	$	(84,147	)
Barclays Bank PLC		USD	3,677		09/20/2020		2.263	%		CPI	^#		Maturity		(96,517	)		—		(96,517	)
Barclays Bank PLC		USD	1,883		10/15/2020		2.210	%		CPI	^#		Maturity		(47,733	)		—		(47,733	)
Barclays Bank PLC		USD	3,497		10/15/2020		2.208	%		CPI	^#		Maturity		(88,469	)		—		(88,469	)
Citibank, N.A.		USD	2,540		10/17/2020		2.220	%		CPI	^#		Maturity		(64,894	)		—		(64,894	)

														$	(381,760	)	$	—	$	(381,760	)

#	Variable interest rate based on the rate of inflation as determined by the Consumer Price Index (CPI).

INTEREST RATE SWAPS (see Note D)


						Rate Type
Swap Counterparty	Notional Amount (000)			Termination Date		Payments made by the Fund			Payments received by the Fund			Payment Frequency Paid/ Received		Market Value			Upfront Premiums Paid (Received)		Unrealized Appreciation/ (Depreciation)
Citibank, N.A.		USD	1,675		10/09/2029		1.120	%		SIFMA	*		Quarterly	$	(92,040	)	$	—	$	(92,040	)
Citibank, N.A.		USD	1,675		10/09/2029		1.125	%		SIFMA	*		Quarterly		(92,908	)		—		(92,908	)

														$	(184,948	)	$	—	$	(184,948	)

*	Variable interest rate based on the Securities Industry & Financial Markets Association (SIFMA) Municipal Swap Index.

(a)

Security is exempt from registration under Rule 144A of the Securities Act of 1933. These securities are considered restricted, but liquid and may be resold in transactions exempt from registration, normally to qualified institutional buyers. At May 31, 2020, the aggregate market value of these securities amounted to $3,341,138 or 2.9% of net assets.

(b)	When-Issued or delayed delivery security.

(c)	Affiliated investments.

(d)	The rate shown represents the 7-day yield as of period end.



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PORTFOLIO OF INVESTMENTS (continued)

AB ARIZONA PORTFOLIO

(e)	To obtain a copy of the fund’s shareholder report, please go to the Securities and Exchange Commission’s website at www.sec.gov, or call AB at (800) 227-4618.

As of May 31, 2020, the Portfolio’s percentages of investments in municipal bonds that are insured and in insured municipal bonds that have been pre-refunded or escrowed to maturity are 6.8% and 0.0%, respectively.

Glossary:

ACA – ACA Financial Guaranty Corporation

AGC – Assured Guaranty Corporation

AGM – Assured Guaranty Municipal

BAM – Build American Mutual

ETM – Escrowed to Maturity

LIBOR – London Interbank Offered Rates

NATL – National Interstate Corporation

See notes to financial statements.



abfunds.com		AB MUNICIPAL INCOME FUND II ^\| 49

PORTFOLIO OF INVESTMENTS

AB MASSACHUSETTS PORTFOLIO

May 31, 2020


	Principal Amount (000)		U.S. $ Value

MUNICIPAL OBLIGATIONS – 93.3%
Long-Term Municipal Bonds – 93.3%
Massachusetts – 76.1%
Commonwealth of Massachusetts Series 2015A 5.00%, 07/01/2035^(a)	$	10,000	$	11,899,500
Series 2018A 5.00%, 01/01/2042		5,000		6,201,250
Commonwealth of Massachusetts (Commonwealth of Massachusetts Fuel Tax) AGM Series 2005A 3.33%, 06/01/2020		2,000		2,000,000
Commonwealth of Massachusetts Transportation Fund Revenue 5.00%, 06/01/2049		2,500		3,145,400
Marthas Vineyard Land Bank BAM Series 2014 5.00%, 05/01/2031		1,000		1,161,940
Massachusetts Bay Transportation Authority (Massachusetts Bay Transportation Authority Sales Tax) Series 2010B 5.00%, 07/01/2029		645		647,361
Massachusetts Development Finance Agency Series 2011A 5.00%, 06/01/2028 (Pre-refunded/ETM)		1,650		1,723,425
Massachusetts Development Finance Agency (Atrius Health Obligated Group) Series 2019A 5.00%, 06/01/2039		1,400		1,552,376
Massachusetts Development Finance Agency (Baystate Medical Obligated Group) Series 2014N 5.00%, 07/01/2044		7,000		7,630,490
Massachusetts Development Finance Agency (Berkshire Health Systems, Inc. Obligated Group) Series 2012G 5.00%, 10/01/2030-10/01/2031		3,970		4,119,605
Massachusetts Development Finance Agency (Beth Israel Lahey Health Obligated Group) Series 2018J 5.00%, 07/01/2053		5,000		5,573,550



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PORTFOLIO OF INVESTMENTS (continued)

AB MASSACHUSETTS PORTFOLIO


	Principal Amount (000)		U.S. $ Value

Massachusetts Development Finance Agency (Boston Medical Center Corp. Obligated Group) Series 2015D 5.00%, 07/01/2044	$	3,755	$	4,013,945
Massachusetts Development Finance Agency (Brandeis University) Series 2019S 5.00%, 10/01/2035-10/01/2039		4,915		5,953,452
Massachusetts Development Finance Agency (Children’s Hospital Corp. Obligated Group (The)) Series 2014P 5.00%, 10/01/2034		1,055		1,196,729
Massachusetts Development Finance Agency (Emerson College) Series 2016A 5.00%, 01/01/2034-01/01/2036		2,435		2,627,044
5.25%, 01/01/2042		1,000		1,077,100
Massachusetts Development Finance Agency (Emmanuel College/MA) Series 2016A 5.00%, 10/01/2031-10/01/2034		4,100		4,493,719
Massachusetts Development Finance Agency (Franklin W Olin College of Engineering, Inc.) Series 2013E 5.00%, 11/01/2038		5,000		5,433,500
Massachusetts Development Finance Agency (Lawrence General Hospital Obligated Group) Series 2017 5.00%, 07/01/2037		1,150		1,028,100
Massachusetts Development Finance Agency (Lesley University) Series 2016 5.00%, 07/01/2039		2,055		2,295,558
Massachusetts Development Finance Agency (MCPHS University) Series 2013F 4.00%, 07/01/2032		1,000		1,072,170
Massachusetts Development Finance Agency (Merrimack College) Series 2012A 5.00%, 07/01/2027-07/01/2032		3,980		4,078,413
5.25%, 07/01/2042		1,330		1,350,868



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PORTFOLIO OF INVESTMENTS (continued)

AB MASSACHUSETTS PORTFOLIO


	Principal Amount (000)		U.S. $ Value

Massachusetts Development Finance Agency (NewBridge on the Charles, Inc.) Series 2017 5.00%, 10/01/2047^(b)	$	2,000	$	1,964,760
Massachusetts Development Finance Agency (President & Fellows of Harvard College) Series 2016A 5.00%, 07/15/2036-07/15/2040		6,100		9,356,619
Massachusetts Development Finance Agency (Simmons University) Series 2018L 5.00%, 10/01/2034-10/01/2035		3,980		4,347,865
Series 2020M 4.00%, 10/01/2050		2,500		2,314,050
Massachusetts Development Finance Agency (South Shore Hospital, Inc.) Series 2016I 4.00%, 07/01/2036		2,000		1,981,120
5.00%, 07/01/2041		2,500		2,766,525
Massachusetts Development Finance Agency (Suffolk University) Series 2017 5.00%, 07/01/2033		1,250		1,347,650
Series 2020A 4.00%, 07/01/2045		1,400		1,313,760
Massachusetts Development Finance Agency (Trustees of Boston College) Series 2017T 5.00%, 07/01/2037		1,000		1,220,230
Massachusetts Development Finance Agency (UMass Memorial Health Care Obligated Group) Series 2016 5.00%, 07/01/2036		1,500		1,641,975
Massachusetts Development Finance Agency (Wellforce Obligated Group) AGM Series 2019A 5.00%, 07/01/2038-07/01/2044		4,000		4,477,910
Massachusetts Development Finance Agency (Woods Hole Oceanographic Institution State Lease) Series 2018 5.00%, 06/01/2048		3,000		3,649,080
Massachusetts Port Authority Series 2010B 5.00%, 07/01/2034		1,440		1,444,709
Series 2012B 5.00%, 07/01/2032 (Pre-refunded/ETM)		1,430		1,569,611



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PORTFOLIO OF INVESTMENTS (continued)

AB MASSACHUSETTS PORTFOLIO


	Principal Amount (000)		U.S. $ Value

Massachusetts School Building Authority Series 2011B 5.00%, 10/15/2032 (Pre-refunded/ETM)	$	3,720	$	3,965,669
Series 2015B 5.00%, 01/15/2030 (Pre-refunded/ETM)		3,770		4,564,867
Massachusetts School Building Authority (Massachusetts School Building Authority Sales Tax) Series 2013A 5.00%, 05/15/2032		2,500		2,798,600
Massachusetts Water Resources Authority Series 2011B 5.00%, 08/01/2029 (Pre-refunded/ETM)		2,000		2,111,060
Series 2016C 5.00%, 08/01/2033		5,500		6,787,000
Metropolitan Boston Transit Parking Corp. Series 2011 5.00%, 07/01/2027		6,000		6,223,920
University of Massachusetts Building Authority Series 20141 5.00%, 11/01/2044 (Pre-refunded/ETM)		1,620		1,954,400
5.00%, 11/01/2044		380		432,520
University of Massachusetts Building Authority (University of Massachusetts) Series 20173 5.00%, 11/01/2034		2,500		3,133,875

				151,643,270

Alabama – 0.2%
Tuscaloosa County Industrial Development Authority (Hunt Refining Co.) Series 2019A 5.25%, 05/01/2044^(b)		415		423,566


American Samoa – 0.3%
American Samoa Economic Development Authority (Territory of American Samoa) 7.125%, 09/01/2038^(b)		465		553,378


Arizona – 2.6%
Arizona Sports & Tourism Authority Series 2012A 5.00%, 07/01/2029		4,065		4,382,476



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PORTFOLIO OF INVESTMENTS (continued)

AB MASSACHUSETTS PORTFOLIO


	Principal Amount (000)		U.S. $ Value

Salt Verde Financial Corp. (Citigroup, Inc.) Series 2007 5.00%, 12/01/2037	$	660	$	859,617

				5,242,093

California – 0.6%
California Statewide Communities Development Authority (Enloe Medical Center) Series 2008A 5.50%, 08/15/2023		360		361,350
Golden State Tobacco Securitization Corp. Series 2018A 5.00%, 06/01/2047		875		875,376

				1,236,726

Colorado – 0.5%
City & County of Denver CO (United Airlines, Inc.) Series 2017 5.00%, 10/01/2032		1,000		991,760


Connecticut – 0.6%
State of Connecticut Series 2015F 5.00%, 11/15/2032		1,000		1,144,630


Florida – 1.7%
Capital Trust Agency, Inc. (Provision Cares Proton Therapy Center – Orlando) Series 2018A 7.50%, 06/01/2048^(b)		100		88,982
County of Miami-Dade FL Aviation Revenue Series 2014 5.00%, 10/01/2027		3,000		3,376,920

				3,465,902

Guam – 1.8%
Guam Government Waterworks Authority Series 2017 5.00%, 07/01/2040		1,525		1,643,172
Guam Power Authority Series 2017A 5.00%, 10/01/2036-10/01/2040		1,770		1,883,958
Territory of Guam 5.00%, 11/15/2031		100		100,799

				3,627,929



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PORTFOLIO OF INVESTMENTS (continued)

AB MASSACHUSETTS PORTFOLIO


	Principal Amount (000)		U.S. $ Value

Illinois – 0.9%
Chicago Board of Education Series 2018A 5.00%, 12/01/2031	$	650	$	652,418
Illinois Finance Authority (Plymouth Place, Inc.) Series 2015 5.00%, 05/15/2037		1,050		965,402
Village of Bolingbrook IL (Village of Bolingbrook IL Sales Tax) Series 2005 6.25%, 01/01/2024		273		253,124

				1,870,944

Indiana – 0.1%
Indiana Finance Authority (RES Polyflow Indiana LLC) 7.00%, 03/01/2039^(b)		270		227,008


Michigan – 0.9%
City of Detroit MI 5.00%, 04/01/2036		90		92,182
Michigan Public Power Agency Series 2012A 5.00%, 01/01/2032		1,605		1,697,608

				1,789,790

New Jersey – 0.6%
New Jersey Transportation Trust Fund Authority (New Jersey Transportation Fed Hwy Grant) Series 2016 5.00%, 06/15/2029		1,170		1,264,489


North Carolina – 0.8%
North Carolina Medical Care Commission (Aldersgate United Methodist Retirement Community, Inc.) Series 2015 4.70%, 07/01/2037		540		480,973
North Carolina Turnpike Authority Series 2017 5.00%, 01/01/2032		1,000		1,104,150

				1,585,123



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PORTFOLIO OF INVESTMENTS (continued)

AB MASSACHUSETTS PORTFOLIO


	Principal Amount (000)		U.S. $ Value

Ohio – 0.3%
Ohio Water Development Authority Water Pollution Control Loan Fund (Energy Harbor Nuclear Generation LLC) Series 2016A 4.375%, 06/01/2033	$	600	$	600,000


Pennsylvania – 1.3%
City of Philadelphia PA AGM Series 2017A 5.00%, 08/01/2033		1,000		1,240,160
Pennsylvania Economic Development Financing Authority (PA Bridges Finco LP) Series 2015 5.00%, 12/31/2034		1,140		1,229,627

				2,469,787

Puerto Rico – 1.9%
Puerto Rico Electric Power Authority AGM Series 2007V 5.25%, 07/01/2031		240		254,611
Puerto Rico Highway & Transportation Authority AGC Series 2005L 5.25%, 07/01/2041		160		168,235
AGC Series 2007C 5.50%, 07/01/2031		110		119,074
AGC Series 2007N 5.25%, 07/01/2034-07/01/2036		540		574,405
NATL Series 2005L 5.25%, 07/01/2035		105		103,184
NATL Series 2007N 5.25%, 07/01/2032		100		98,761
Puerto Rico Housing Finance Authority (Puerto Rico Housing Finance Authority Cap Fd Prog) Series 2003 5.00%, 12/01/2020		695		700,421
Puerto Rico Industrial Tourist Educational Medical & Environmental Control Facilities Financing Auth (AES Puerto Rico LP) Series 2000 6.625%, 06/01/2026		640		660,800



56 ^\| AB MUNICIPAL INCOME FUND II		abfunds.com

PORTFOLIO OF INVESTMENTS (continued)

AB MASSACHUSETTS PORTFOLIO


	Principal Amount (000)		U.S. $ Value

Puerto Rico Sales Tax Financing Corp. Sales Tax Revenue Series 2018A Zero Coupon, 07/01/2029	$	238	$	172,155
Series 2019A 4.329%, 07/01/2040		180		172,800
4.55%, 07/01/2040		22		21,753
5.00%, 07/01/2058		685		685,521

				3,731,720

Tennessee – 0.2%
Bristol Industrial Development Board (Bristol Industrial Development Board Sales Tax) Series 2016A 5.00%, 12/01/2035^(b)		310		276,408


Texas – 1.4%
Mission Economic Development Corp. (Natgasoline LLC) Series 2018 4.625%, 10/01/2031^(b)		540		543,948
North Texas Tollway Authority (North Texas Tollway System) Series 2015A 5.00%, 01/01/2034		1,000		1,143,280
Texas Private Activity Bond Surface Transportation Corp. (LBJ Infrastructure Group LLC) Series 2010 7.00%, 06/30/2040		1,090		1,095,439

				2,782,667

Wisconsin – 0.5%
Wisconsin Public Finance Authority (Celanese US Holdings LLC) Series 2016B 5.00%, 12/01/2025		1,000		1,057,500


Total Municipal Obligations (cost $178,998,480)				185,984,690



abfunds.com		AB MUNICIPAL INCOME FUND II ^\| 57

PORTFOLIO OF INVESTMENTS (continued)

AB MASSACHUSETTS PORTFOLIO


	Shares		U.S. $ Value

SHORT-TERM INVESTMENTS – 4.4%
Investment Companies – 4.4%
AB Fixed Income Shares, Inc. – Government Money Market Portfolio – Class AB, 0.14%^(c)(d)(e) (cost $8,788,584)		8,788,584	$	8,788,584


Total Investments – 97.7% (cost $187,787,064)				194,773,274
Other assets less liabilities – 2.3%				4,583,231


Net Assets – 100.0%			$	199,356,505

CENTRALLY CLEARED INFLATION (CPI) SWAPS (see Note D)


				Rate Type
Notional Amount (000)		Termination Date		Payments made by the Fund			Payments received by the Fund			Payment Frequency Paid/ Received		Market Value			Upfront Premiums Paid/ (Received)		Unrealized Appreciation/ (Depreciation)
USD	1,500		08/09/2024		1.690	%		CPI	^#		Maturity	$	(54,704	)	$	—	$	(54,704	)
USD	5,110		01/15/2025		1.671	%		CPI	^#		Maturity		(185,311	)		—		(185,311	)
USD	1,894		01/15/2025		1.637	%		CPI	^#		Maturity		(68,520	)		—		(68,520	)
USD	4,236		01/15/2025		1.673	%		CPI	^#		Maturity		(161,362	)		—		(161,362	)
USD	3,970		01/15/2028		0.735	%		CPI	^#		Maturity		158,286			—		158,286
USD	5,260		01/15/2028		1.230	%		CPI	^#		Maturity		(8,918	)		—		(8,918	)

												$	(320,529	)	$	—	$	(320,529	)

#	Variable interest rate based on the rate of inflation as determined by the Consumer Price Index (CPI).

CENTRALLY CLEARED INTEREST RATE SWAPS (see Note D)


				Rate Type
Notional Amount (000)		Termination Date		Payments made by the Fund	Payments received by the Fund	Payment Frequency Paid/ Received	Market Value			Upfront Premiums Paid/ (Received)		Unrealized Appreciation/ (Depreciation)
USD	1,695		02/06/2025	3 Month LIBOR	1.419%	Quarterly/ Semi-Annual	$	92,384		$	—	$	92,384
USD	10,900		04/03/2034	3 Month LIBOR	3.276%	Quarterly/ Semi-Annual		3,696,545			—		3,696,545
USD	18,615		04/01/2039	3.022%	3 Month LIBOR	Semi-Annual/ Quarterly		(7,232,317	)		—		(7,232,317	)



58 ^\| AB MUNICIPAL INCOME FUND II		abfunds.com

PORTFOLIO OF INVESTMENTS (continued)

AB MASSACHUSETTS PORTFOLIO


				Rate Type
Notional Amount (000)		Termination Date		Payments made by the Fund		Payments received by the Fund		Payment Frequency Paid/ Received	Market Value			Upfront Premiums Paid/ (Received)			Unrealized Appreciation/ (Depreciation)
USD	4,150		04/01/2039		0.834%		3 Month LIBOR	Semi-Annual/ Quarterly	$	40,120		$	—		$	40,120
USD	3,000		04/01/2039		0.780%		3 Month LIBOR	Semi-Annual/ Quarterly		56,574			(121	)		56,695
USD	3,000		04/01/2039		0.930%		3 Month LIBOR	Semi-Annual/ Quarterly		(22,352	)		—			(22,352	)
USD	1,550		04/01/2039		1.442%		3 Month LIBOR	Semi-Annual/ Quarterly		(155,839	)		—			(155,839	)
USD	22,500		04/01/2044		3 Month LIBOR		3.081%	Quarterly/ Semi-Annual		10,935,086			—			10,935,086
USD	4,885		04/23/2049		2.801%		3 Month LIBOR	Semi-Annual/ Quarterly		(2,428,342	)		—			(2,428,342	)

									$	4,981,859		$	(121	)	$	4,981,980

INFLATION (CPI) Swaps (see Note D)


						Rate Type
Swap Counterparty	Notional Amount (000)			Termination Date		Payments made by the Fund			Payments received by the Fund			Payment Frequency Paid/ Received		Market Value			Upfront Premiums Paid/ (Received)		Unrealized Appreciation/ (Depreciation)
Barclays Bank PLC		USD	6,825		09/20/2020		2.263	%		CPI	^#		Maturity	$	(179,149	)	$	—	$	(179,149	)
Barclays Bank PLC		USD	6,449		10/15/2020		2.208	%		CPI	^#		Maturity		(163,149	)		—		(163,149	)
Barclays Bank PLC		USD	3,495		10/15/2020		2.210	%		CPI	^#		Maturity		(88,596	)		—		(88,596	)
Citibank, NA		USD	4,690		10/17/2020		2.220	%		CPI	^#		Maturity		(119,825	)		—		(119,825	)
JPMorgan Chase Bank, NA		USD	6,204		08/30/2020		2.210	%		CPI	^#		Maturity		(155,464	)		—		(155,464	)

														$	(706,183	)	$	—	$	(706,183	)

#	Variable interest rate based on the rate of inflation as determined by the Consumer Price Index (CPI).



abfunds.com		AB MUNICIPAL INCOME FUND II ^\| 59

PORTFOLIO OF INVESTMENTS (continued)

AB MASSACHUSETTS PORTFOLIO

INTEREST RATE SWAP (see Note D)


						Rate Type
Swap Counterparty	Notional Amount (000)			Termination Date		Payments made by the Fund			Payments received by the Fund			Payment Frequency Paid/ Received		Market Value			Upfront Premiums Paid/ (Received)		Unrealized Appreciation/ (Depreciation)
Citibank, NA		USD	3,025		10/09/2029		1.120	%		SIFMA	*		Quarterly	$	(166,221	)	$	—	$	(166,221	)
Citibank, NA		USD	3,025		10/09/2029		1.125	%		SIFMA	*		Quarterly		(167,788	)		—		(167,788	)

														$	(334,009	)	$	—	$	(334,009	)

*	Variable interest rate based on the Securities Industry & Financial Markets Association (SIFMA) Municipal Swap Index.

(a)	Position, or a portion thereof, has been segregated to collateralize OTC derivatives outstanding.

(b)

(c)	To obtain a copy of the fund’s shareholder report, please go to the Securities and Exchange Commission’s website at www.sec.gov, or call AB at (800) 227-4618.

(d)	Affiliated investments.

(e)	The rate shown represents the 7-day yield as of period end.

Glossary:

AGC – Assured Guaranty Corporation

AGM – Assured Guaranty Municipal

BAM – Build American Mutual

ETM – Escrowed to Maturity

LIBOR – London Interbank Offered Rates

NATL – National Interstate Corporation

See notes to financial statements.



60 ^\| AB MUNICIPAL INCOME FUND II		abfunds.com

PORTFOLIO OF INVESTMENTS

AB MINNESOTA PORTFOLIO

May 31, 2020


	Principal Amount (000)		U.S. $ Value

MUNICIPAL OBLIGATIONS – 93.1%
Long-Term Municipal Bonds – 93.1%
Minnesota – 93.1%
Anoka-Hennepin Independent School District No. 11 (Anoka-Hennepin Independent School District No. 11 COP) Series 2014A 5.00%, 02/01/2034	$	1,695	$	1,949,284
Central Minnesota Municipal Power Agency Series 2012 5.00%, 01/01/2032		2,200		2,358,224
City of Center City MN (Hazelden Betty Ford Foundation) 4.00%, 11/01/2041		850		884,774
Series 2014 5.00%, 11/01/2029-11/01/2044		800		856,591
City of Duluth MN Series 2016A 5.00%, 02/01/2034		1,000		1,211,940
City of Maple Grove MN (Maple Grove Hospital Corp.) Series 2017 5.00%, 05/01/2031		1,000		1,150,950
City of Minneapolis MN (Fairview Health Services Obligated Group) Series 2015A 5.00%, 11/15/2033		1,000		1,122,370
Series 2018A 5.00%, 11/15/2036		2,000		2,298,600
City of Minneapolis MN (Minneapolis Common Bond Fund) Series 20102A 6.25%, 12/01/2030		1,000		1,029,130
City of Minneapolis MN/St. Paul Housing & Redevelopment Authority (Allina Health Obligated Group) Series 2017A 5.00%, 11/15/2028		1,355		1,678,127
NATL 0.075%, 08/01/2028^(a)		500		500,000
City of Rochester MN (Mayo Clinic) Series 2016B 5.00%, 11/15/2036		60		86,301
Series 2018 4.00%, 11/15/2048		1,000		1,113,650



abfunds.com		AB MUNICIPAL INCOME FUND II ^\| 61

PORTFOLIO OF INVESTMENTS (continued)

AB MINNESOTA PORTFOLIO


	Principal Amount (000)		U.S. $ Value

City of St. Cloud MN (CentraCare Health System Obligated Group) Series 2010A 5.125%, 05/01/2030	$	95	$	95,219
City of St. Paul MN (City of St. Paul MN Sales Tax) Series 2014G 5.00%, 11/01/2030-11/01/2032		2,900		3,420,633
City of Wayzata MN (Wayzata Bay Senior Housing, Inc.) 5.00%, 08/01/2049		395		396,845
Cloquet Independent School District No. 94 Series 2015B 5.00%, 02/01/2031		2,200		2,636,634
Duluth Economic Development Authority (Essentia Health Obligated Group) 4.25%, 02/15/2043		500		522,355
Series 2018A 5.00%, 02/15/2048		1,000		1,114,030
Housing & Redevelopment Authority of The City of St. Paul Minnesota Series 2015A 5.00%, 11/15/2040 (Pre-refunded/ETM)		600		747,252
Housing & Redevelopment Authority of The City of St. Paul Minnesota (HealthPartners Obligated Group) Series 2015A 5.00%, 07/01/2032		1,000		1,127,740
Hutchinson Utilities Commission Series 2012A 5.00%, 12/01/2025		420		466,473
Minneapolis Special School District No. 1 Series 2016 5.00%, 02/01/2031		3,000		3,745,830
Minneapolis-St. Paul Metropolitan Airports Commission Series 2012B 5.00%, 01/01/2029		1,250		1,324,362
Minnesota Higher Education Facilities Authority (College of St. Scholastica, Inc.) 4.00%, 12/01/2040		750		716,490
Minnesota Higher Education Facilities Authority (Hamline University) Series 2017B 5.00%, 10/01/2036		500		520,255



62 ^\| AB MUNICIPAL INCOME FUND II		abfunds.com

PORTFOLIO OF INVESTMENTS (continued)

AB MINNESOTA PORTFOLIO


	Principal Amount (000)		U.S. $ Value

Minnesota Higher Education Facilities Authority (St. Catherine University) Series 2018A 5.00%, 10/01/2045	$	1,100	$	1,156,430
Minnesota Higher Education Facilities Authority (St. Olaf College) Series 20158 5.00%, 12/01/2032		1,000		1,151,140
Minnesota Higher Education Facilities Authority (University of St. Thomas/Minneapolis) Series 2017A 4.00%, 10/01/2034		800		860,800
Minnesota Housing Finance Agency (Minnesota Housing Finance Agency State Lease) Series 2019A 4.00%, 08/01/2031		50		60,450
Minnesota Municipal Power Agency Series 2014 5.00%, 10/01/2032		750		880,335
New Prague Independent School District No. 721 Series 2015A 4.00%, 02/01/2032		1,000		1,111,830
North St. Paul-Maplewood-Oakdale Independent School District No. 622 Series 2019A 3.00%, 02/01/2038		1,000		1,062,530
Northern Municipal Power Agency Series 2017 5.00%, 01/01/2033-01/01/2041		1,150		1,372,987
Southern Minnesota Municipal Power Agency Series 2017A 5.00%, 01/01/2047		2,000		2,418,020
St. Paul Port Authority (Amherst H Wilder Foundation/MN) Series 2010-3 5.00%, 12/01/2029		2,445		2,462,188
State of Minnesota Series 2019A 5.00%, 08/01/2037		1,000		1,310,550
University of Minnesota Series 2014B 4.00%, 01/01/2032		2,000		2,196,500



abfunds.com		AB MUNICIPAL INCOME FUND II ^\| 63

PORTFOLIO OF INVESTMENTS (continued)

AB MINNESOTA PORTFOLIO


	Principal Amount (000)		U.S. $ Value

Western Minnesota Municipal Power Agency Series 2014A 5.00%, 01/01/2040 (Pre-refunded/ETM)	$	1,500	$	1,748,550


Total Municipal Obligations (cost $47,924,925)				50,866,369


	Shares
SHORT-TERM INVESTMENTS – 5.5%
Investment Companies – 5.5%
AB Fixed Income Shares, Inc. – Government Money Market Portfolio – Class AB, 0.14%^(b)(c)(d) (cost $3,001,212)		3,001,212		3,001,212


Total Investments – 98.6% (cost $50,926,137)				53,867,581
Other assets less liabilities – 1.4%				777,434


Net Assets – 100.0%			$	54,645,015

CENTRALLY CLEARED INFLATION (CPI) SWAPS (see Note D)


				Rate Type
Notional Amount (000)		Termination Date		Payments made by the Fund			Payments received by the Fund			Payment Frequency Paid/ Received		Market Value			Upfront Premiums Paid (Received)		Unrealized Appreciation/ (Depreciation)
USD	1,510		1/15/2025		1.671	%		CPI	^#		Maturity	$	(54,759	)	$	—	$	(54,759	)
USD	954		1/15/2025		1.673	%		CPI	^#		Maturity		(36,341	)		—		(36,341	)
USD	430		8/9/2024		1.690	%		CPI	^#		Maturity		(15,682	)		—		(15,682	)
USD	426		1/15/2025		1.637	%		CPI	^#		Maturity		(15,412	)		—		(15,412	)
USD	1,410		1/15/2028		1.230	%		CPI	^#		Maturity		(2,391	)		—		(2,391	)
USD	1,070		1/15/2028		0.735	%		CPI	^#		Maturity		42,662			—		42,662

												$	(81,923	)	$	—	$	(81,923	)

#	Variable interest rate based on the rate of inflation as determined by the Consumer Price Index (CPI).



64 ^\| AB MUNICIPAL INCOME FUND II		abfunds.com

PORTFOLIO OF INVESTMENTS (continued)

AB MINNESOTA PORTFOLIO

CENTRALLY CLEARED INTEREST RATE SWAPS (see Note D)


				Rate Type
Notional Amount (000)		Termination Date		Payments made by the Fund	Payments received by the Fund	Payment Frequency Paid/ Received		Market Value			Upfront Premiums Paid/ (Received)		Unrealized Appreciation/ (Depreciation)
USD	169		02/05/2025	3 Month LIBOR	1.361%		Quarterly/ Semi- Annual	$	8,708		$	—	$	8,708
USD	381		02/06/2025	3 Month LIBOR	1.419%		Quarterly/ Semi- Annual		20,766			—		20,766
USD	19,870		11/12/2039	3 Month LIBOR	3.320%		Quarterly/ Semi- Annual		9,026,192			—		9,026,192
USD	390		11/12/2039	3 Month LIBOR	3.342%		Quarterly/ Semi- Annual		178,762			—		178,762
USD	11,985		11/01/2049	3.137%	3 Month LIBOR		Semi- Annual/ Quarterly		(7,158,273	)		—		(7,158,273	)

								$	2,076,155		$	—	$	2,076,155

INFLATION (CPI) SWAPS (see Note D)


						Rate Type
Swap Counterparty	Notional Amount (000)			Termination Date		Payments made by the Fund			Payments received by the Fund			Payment Frequency Paid/ Received		Market Value			Upfront Premiums Paid/ (Received)		Unrealized Appreciation/ (Depreciation)
Barclays Bank PLC		USD	1,799		09/20/2020		2.263	%		CPI	^#		Maturity	$	(47,222	)	$	—	$	(47,222	)
Barclays Bank PLC		USD	1,743		10/15/2020		2.208	%		CPI	^#		Maturity		(44,095	)		—		(44,095	)
Barclays Bank PLC		USD	921		10/15/2020		2.210	%		CPI	^#		Maturity		(23,347	)		—		(23,347	)
Citibank, N.A.		USD	1,270		10/17/2020		2.220	%		CPI	^#		Maturity		(32,447	)		—		(32,447	)
JPMorgan Chase Bank, N.A.		USD	1,711		08/30/2020		2.210	%		CPI	^#		Maturity		(42,876	)		—		(42,876	)

														$	(189,987	)	$	—	$	(189,987	)

#	Variable interest rate based on the rate of inflation as determined by the Consumer Price Index (CPI).

INTEREST RATE SWAPS (see Note D)


						Rate Type
Swap Counterparty	Notional Amount (000)			Termination Date		Payments made by the Fund			Payments received by the Fund			Payment Frequency Paid/ Received		Market Value			Upfront Premiums Paid/ (Received)		Unrealized Appreciation/ (Depreciation)
Citibank, N.A.		USD	835		10/09/2029		1.120	%		SIFMA	*		Quarterly	$	(45,882	)	$	—	$	(45,882	)
Citibank, N.A.		USD	835		10/09/2029		1.125	%		SIFMA	*		Quarterly		(46,315	)		—		(46,315	)

														$	(92,197	)	$	—	$	(92,197	)



abfunds.com		AB MUNICIPAL INCOME FUND II ^\| 65

PORTFOLIO OF INVESTMENTS (continued)

AB MINNESOTA PORTFOLIO

*	Variable interest rate based on the Securities Industry & Financial Markets Association (SIFMA) Municipal Swap Index.

(a)	An auction rate security whose interest rate resets at each auction date. Auctions are typically held every week or month. The rate shown is as of May 31, 2020 and the aggregate market value of this security amounted to $500,000 or 0.92% of net assets.

(b)	Affiliated investments.

(c)	The rate shown represents the 7-day yield as of period end.

(d)	To obtain a copy of the fund’s shareholder report, please go to the Securities and Exchange Commission’s website at www.sec.gov, or call AB at (800) 227-4618.

Glossary:

COP – Certificate of Participation

ETM – Escrowed to Maturity

LIBOR – London Interbank Offered Rates

NATL – National Interstate Corporation

See notes to financial statements.



66 ^\| AB MUNICIPAL INCOME FUND II		abfunds.com

PORTFOLIO OF INVESTMENTS

AB NEW JERSEY PORTFOLIO

May 31, 2020


	Principal Amount (000)		U.S. $ Value

MUNICIPAL OBLIGATIONS – 98.8%
Long-Term Municipal Bonds – 98.8%
New Jersey – 77.4%
City of Jersey City NJ Series 2017A 5.00%, 11/01/2031-11/01/2037	$	1,500	$	1,854,795
City of Ocean City NJ 2.25%, 09/15/2032		1,825		1,874,896
Hudson County Improvement Authority (County of Hudson NJ) Series 2016 5.00%, 05/01/2036		2,400		2,905,632
Morris-Union Jointure Commission (Morris-Union Jointure Commission COP) AGM Series 2013 5.00%, 08/01/2026		3,320		3,751,733
New Jersey Economic Development Authority (Bancroft Neurohealth Obligated Group) Series 2016A 5.00%, 06/01/2041		1,000		978,380
New Jersey Economic Development Authority (New Jersey Economic Development Authority State Lease) Series 2013 5.00%, 03/01/2030		4,000		4,121,840
New Jersey Economic Development Authority (NJ Metromall Urban Renewal, Inc.) Series 2002 6.50%, 04/01/2028		1,000		1,070,630
New Jersey Economic Development Authority (North Star Academy Charter School of Newark, Inc.) Series 2017 5.00%, 07/15/2032		1,000		1,086,980
New Jersey Economic Development Authority (NYNJ Link Borrower LLC) Series 2013 5.00%, 01/01/2028		1,000		1,090,540
5.50%, 01/01/2027		1,000		1,110,550
New Jersey Economic Development Authority (Port Newark Container Terminal LLC) Series 2017 5.00%, 10/01/2047		2,000		2,084,560



abfunds.com		AB MUNICIPAL INCOME FUND II ^\| 67

PORTFOLIO OF INVESTMENTS (continued)

AB NEW JERSEY PORTFOLIO


	Principal Amount (000)		U.S. $ Value

New Jersey Economic Development Authority (Seeing Eye, Inc. (The)) Series 2017 5.00%, 06/01/2032	$	1,765	$	2,093,802
New Jersey Economic Development Authority (United Airlines, Inc.) Series 1999 5.25%, 09/15/2029		1,165		1,150,601
New Jersey Educational Facilities Authority (Kean University) AGM Series 2015H 5.00%, 07/01/2034		2,500		2,799,225
New Jersey Educational Facilities Authority (Stevens Institute of Technology) Series 2020A 5.00%, 07/01/2045		2,000		2,253,180
New Jersey Health Care Facilities Financing Authority Series 2013 5.25%, 07/01/2031 (Pre-refunded/ETM)		320		364,925
AGC Series 2004A 5.25%, 07/01/2023 (Pre-refunded/ETM)		2,085		2,401,920
New Jersey Health Care Facilities Financing Authority (AHS Hospital Corp.) Series 2008A 5.125%, 07/01/2022		45		45,146
New Jersey Health Care Facilities Financing Authority (Hackensack Meridian Health Obligated Group) Series 2017A 5.00%, 07/01/2035		1,950		2,347,118
New Jersey Health Care Facilities Financing Authority (Inspira Health Obligated Group) Series 2017A 5.00%, 07/01/2035		1,835		2,136,013
New Jersey Health Care Facilities Financing Authority (RWJ Barnabas Health Obligated Group) Series 2016A 5.00%, 07/01/2033		1,000		1,153,380
New Jersey Transportation Trust Fund Authority (New Jersey Transportation Fed Hwy Grant) Series 2016 5.00%, 06/15/2028-06/15/2029		2,750		2,977,460



68 ^\| AB MUNICIPAL INCOME FUND II		abfunds.com

PORTFOLIO OF INVESTMENTS (continued)

AB NEW JERSEY PORTFOLIO


	Principal Amount (000)		U.S. $ Value

New Jersey Transportation Trust Fund Authority (New Jersey Transportation Trust Fund Authority State Lease) Series 2015A 5.25%, 06/15/2041	$	1,250	$	1,291,450
Series 2018A 5.00%, 12/15/2035		1,750		1,831,410
New Jersey Turnpike Authority Series 2019A 5.00%, 01/01/2048		680		803,304
North Hudson Sewerage Authority/NJ NATL Series 2001A Zero Coupon, 08/01/2024 (Pre-refunded/ETM)		2,625		2,528,662
Rahway Valley Sewerage Authority (The) NATL Series 2005A Zero Coupon, 09/01/2035		3,445		2,437,785
Tobacco Settlement Financing Corp. Series 2018B 5.00%, 06/01/2046		2,040		2,138,593
Union County Improvement Authority (Township of Union NJ/Union County Lease) NATL Series 2003A 5.25%, 08/15/2023		1,590		1,596,010
Union County Utilities Authority (County of Union NJ Lease) Series 2011A 5.25%, 12/01/2031		3,060		3,222,884

				57,503,404


Alabama – 0.1%
Tuscaloosa County Industrial Development Authority (Hunt Refining Co.) Series 2019A 4.50%, 05/01/2032^(a)		100		100,288


American Samoa – 0.3%
American Samoa Economic Development Authority (Territory of American Samoa) 7.125%, 09/01/2038^(a)		215		255,863


Arizona – 0.1%
Maricopa County Industrial Development Authority (Benjamin Franklin Charter School Ltd.) Series 2018A 6.00%, 07/01/2052^(a)		100		105,353



abfunds.com		AB MUNICIPAL INCOME FUND II ^\| 69

PORTFOLIO OF INVESTMENTS (continued)

AB NEW JERSEY PORTFOLIO


	Principal Amount (000)		U.S. $ Value

California – 0.5%
California Statewide Communities Development Authority (Enloe Medical Center) Series 2008A 5.50%, 08/15/2023	$	400	$	401,500


Florida – 0.1%
Capital Trust Agency, Inc. (Provision Cares Proton Therapy Center -Orlando) Series 2018A 7.50%, 06/01/2048^(a)		100		88,982


Guam – 2.2%
Guam Power Authority Series 2017A 5.00%, 10/01/2036-10/01/2040		805		856,719
Territory of Guam (Guam Section 30 Income Tax) Series 2016A 5.00%, 12/01/2046		720		749,858

				1,606,577

Idaho �� 1.5%
Idaho Housing & Finance Association (State of Idaho Fed Hwy Grant) Series 2014 5.00%, 07/15/2031		1,000		1,125,700


Illinois – 1.7%
Chicago Board of Education Series 2018A 5.00%, 12/01/2031		305		306,135
Metropolitan Pier & Exposition Authority Series 2015B 5.00%, 12/15/2045		1,000		973,210

				1,279,345

Louisiana – 0.2%
Parish of St. James LA (NuStar Logistics LP) Series 20202 6.35%, 10/01/2040^(a)(b)		100		109,613


Michigan – 0.1%
City of Detroit MI 5.00%, 04/01/2036		50		51,212



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PORTFOLIO OF INVESTMENTS (continued)

AB NEW JERSEY PORTFOLIO


	Principal Amount (000)		U.S. $ Value

Nevada – 0.1%
City of Reno NV (County of Washoe NV Sales Tax Revenue) Series 2018C Zero Coupon, 07/01/2058^(a)	$	500	$	53,695


New York – 9.0%
Port Authority of New York & New Jersey Series 2012 5.00%, 07/15/2030		3,250		3,449,583
Series 2014 5.00%, 09/01/2031		1,100		1,231,252
Port Authority of New York & New Jersey (JFK International Air Terminal LLC) NATL Series 1997 5.75%, 12/01/2022		2,010		2,020,894

				6,701,729

North Dakota – 0.3%
County of Grand Forks ND (Red River Biorefinery LLC) 5.75%, 09/15/2028		265		229,776


Ohio – 1.2%
Buckeye Tobacco Settlement Financing Authority Series 2020B 5.00%, 06/01/2055		605		610,499
Ohio Water Development Authority Water Pollution Control Loan Fund (Energy Harbor Nuclear Generation LLC) Series 2016A 4.375%, 06/01/2033		280		280,000

				890,499

Puerto Rico – 1.8%
Puerto Rico Electric Power Authority AGM Series 2007V 5.25%, 07/01/2031		155		164,436
NATL Series 2007V 5.25%, 07/01/2029		155		155,095
Puerto Rico Highway & Transportation Authority AGC Series 2005L 5.25%, 07/01/2041		100		105,147
AGC Series 2007N 5.25%, 07/01/2036		165		175,504
Puerto Rico Industrial Tourist Educational Medical & Environmental Control Facilities Financing Auth (AES Puerto Rico LP) Series 2000 6.625%, 06/01/2026		300		309,750



abfunds.com		AB MUNICIPAL INCOME FUND II ^\| 71

PORTFOLIO OF INVESTMENTS (continued)

AB NEW JERSEY PORTFOLIO


	Principal Amount (000)		U.S. $ Value

Puerto Rico Sales Tax Financing Corp. Sales Tax Revenue Series 2018A Zero Coupon, 07/01/2029	$	104	$	75,227
Series 2019A 4.329%, 07/01/2040		70		67,200
5.00%, 07/01/2058		285		285,217

				1,337,576

South Carolina – 0.9%
South Carolina Public Service Authority Series 2016B 5.00%, 12/01/2041		570		629,873


Tennessee – 0.4%
Bristol Industrial Development Board (Bristol Industrial Development Board Sales Tax) Series 2016A 5.00%, 12/01/2035^(a)		145		129,288
Metropolitan Government Nashville & Davidson County Health & Educational Facilities Board (Trousdale Foundation Obligated Group) Series 2018A 6.25%, 04/01/2049^(a)		260		146,980

				276,268

Texas – 0.3%
Mission Economic Development Corp. (Natgasoline LLC) Series 2018 4.625%, 10/01/2031^(a)		245		246,791


Washington – 0.3%
Kalispel Tribe of Indians Series 2018B 5.25%, 01/01/2038^(a)(b)		210		220,013


Wisconsin – 0.3%
UMA Education, Inc. 5.00%, 10/01/2034^(a)		200		202,216


Total Investments – 98.8% (cost $70,686,832)				73,416,273
Other assets less liabilities – 1.2%				920,859


Net Assets – 100.0%			$	74,337,132



72 ^\| AB MUNICIPAL INCOME FUND II		abfunds.com

PORTFOLIO OF INVESTMENTS (continued)

AB NEW JERSEY PORTFOLIO

CENTRALLY CLEARED INFLATION (CPI) SWAPS (see Note D)


				Rate Type
Notional Amount (000)		Termination Date		Payments made by the Fund			Payments received by the Fund			Payment Frequency Paid/ Received	Market Value			Upfront Premiums Paid (Received)		Unrealized Appreciation/ (Depreciation)
USD	750		08/09/2024		1.690	%		CPI	^#	Maturity	$	(27,352	)	$	—	$	(27,352	)
USD	1,910		01/15/2025		1.671	%		CPI	^#	Maturity		(69,265	)		—		(69,265	)
USD	1,403		01/15/2025		1.673	%		CPI	^#	Maturity		(53,444	)		—		(53,444	)
USD	627		01/15/2025		1.637	%		CPI	^#	Maturity		(22,683	)		—		(22,683	)
USD	2,070		01/15/2028		1.230	%		CPI	^#	Maturity		(3,510	)		—		(3,510	)
USD	1,640		01/15/2028		0.735	%		CPI	^#	Maturity		65,388			—		65,388

											$	(110,866	)	$	—	$	(110,866	)

#	Variable interest rate based on the rate of inflation as determined by the Consumer Price Index (CPI).

CENTRALLY CLEARED INTEREST RATE SWAPS (see Note D)


				Rate Type
Notional Amount (000)		Termination Date		Payments made by the Fund	Payments received by the Fund	Payment Frequency Paid/ Received	Market Value		Upfront Premiums Paid (Received)		Unrealized Appreciation/ (Depreciation)
USD	3,640		06/17/2021	3 Month LIBOR	1.907%	Quarterly/ Semi- Annual	$	86,232	$	—	$	86,232
USD	3,430		08/09/2022	3 Month LIBOR	1.486%	Quarterly/ Semi- Annual		107,784		—		107,784
USD	249		02/05/2025	3 Month LIBOR	1.361%	Quarterly/ Semi- Annual		12,829		—		12,829
USD	561		02/06/2025	3 Month LIBOR	1.419%	Quarterly/ Semi- Annual		30,577		—		30,577
USD	400		04/16/2049	3 Month LIBOR	2.746%	Quarterly/ Semi- Annual		192,948		—		192,948

							$	430,370	$	—	$	430,370

INFLATION (CPI) SWAPS (see Note D)


						Rate Type
Swap Counterparty	Notional Amount (000)			Termination Date		Payments made by the Fund			Payments received by the Fund			Payment Frequency Paid/ Received		Market Value			Upfront Premiums Paid (Received)		Unrealized Appreciation/ (Depreciation)
Barclays Bank PLC		USD	3,062		09/20/2020		2.263	%		CPI	^#		Maturity	$	(80,374	)	$	—	$	(80,374	)
Barclays Bank PLC		USD	2,721		10/15/2020		2.208	%		CPI	^#		Maturity		(68,837	)		—		(68,837	)
Barclays Bank PLC		USD	1,568		10/15/2020		2.210	%		CPI	^#		Maturity		(39,748	)		—		(39,748	)



abfunds.com		AB MUNICIPAL INCOME FUND II ^\| 73

PORTFOLIO OF INVESTMENTS (continued)

AB NEW JERSEY PORTFOLIO


						Rate Type
Swap Counterparty	Notional Amount (000)			Termination Date		Payments made by the Fund			Payments received by the Fund			Payment Frequency Paid/ Received		Market Value			Upfront Premiums Paid (Received)		Unrealized Appreciation/ (Depreciation)
Citibank, NA		USD	1,980		10/17/2020		2.220	%		CPI	^#		Maturity	$	(50,587	)	$	—	$	(50,587	)
JPMorgan Chase Bank, NA		USD	2,944		08/30/2020		2.210	%		CPI	^#		Maturity		(73,773	)		—		(73,773	)

														$	(313,319	)	$	—	$	(313,319	)

#	Variable interest rate based on the rate of inflation as determined by the Consumer Price Index (CPI).

INTEREST RATE SWAPS (see Note D)


						Rate Type
Swap Counterparty	Notional Amount (000)			Termination Date		Payments made by the Fund			Payments received by the Fund			Payment Frequency Paid/ Received		Market Value			Upfront Premiums Paid (Received)		Unrealized Appreciation/ (Depreciation)
Citibank, NA		USD	1,235		10/09/2029		1.120	%		SIFMA	*		Quarterly	$	(67,862	)	$	—	$	(67,862	)
Citibank, NA		USD	1,235		10/09/2029		1.125	%		SIFMA	*		Quarterly		(68,502	)		—		(68,502	)

														$	(136,364	)	$	—	$	(136,364	)

*	Variable interest rate based on the Securities Industry & Financial Markets Association (SIFMA) Municipal Swap Index.

(a)

(b)	When-Issued or delayed delivery security.

Glossary:

AGC – Assured Guaranty Corporation

AGM – Assured Guaranty Municipal

COP – Certificate of Participation

ETM – Escrowed to Maturity

LIBOR – London Interbank Offered Rates

NATL – National Interstate Corporation

See notes to financial statements.



74 ^\| AB MUNICIPAL INCOME FUND II		abfunds.com

PORTFOLIO OF INVESTMENTS

AB OHIO PORTFOLIO

May 31, 2020


	Principal Amount (000)		U.S. $ Value

MUNICIPAL OBLIGATIONS – 98.3%
Long-Term Municipal Bonds – 98.3%
Ohio – 80.5%
American Municipal Power, Inc. 4.00%, 02/15/2039	$	1,000	$	1,156,140
Series 2016A 5.00%, 02/15/2034		2,000		2,374,900
Buckeye Tobacco Settlement Financing Authority Series 2020B 5.00%, 06/01/2055		1,070		1,079,726
City of Chillicothe OH (Adena Health System Obligated Group) 4.00%, 12/01/2042		505		536,759
City of Chillicothe/OH (Adena Health System Obligated Group) Series 2017 5.00%, 12/01/2037		1,700		1,978,222
City of Cleveland OH 5.00%, 12/01/2028		25		27,872
Cleveland Department of Public Utilities Division of Public Power AGM Series 2018 5.00%, 11/15/2035		1,100		1,382,557
Cleveland Municipal School District Series 2015A 5.00%, 12/01/2033		3,000		3,373,860
County of Allen OH Hospital Facilities Revenue (Bon Secours Mercy Health, Inc.) 4.00%, 12/01/2040		1,370		1,516,138
County of Allen/OH Hospital Facilities Revenue (Bon Secours Mercy Health, Inc.) Series 2017A 5.00%, 08/01/2042		1,650		1,917,762
County of Cuyahoga OH (MetroHealth System (The)) Series 2017 5.00%, 02/15/2037		1,400		1,494,262
County of Darke OH (Wayne Hospital Co. Obligated Group) Series 2019A 5.00%, 09/01/2049		190		196,625
County of Franklin OH (Agler Green LP) Series 2002A 5.65%, 05/20/2032		770		772,164
5.80%, 05/20/2044		1,150		1,152,668



abfunds.com		AB MUNICIPAL INCOME FUND II ^\| 75

PORTFOLIO OF INVESTMENTS (continued)

AB OHIO PORTFOLIO


	Principal Amount (000)		U.S. $ Value

County of Franklin OH (First Community Village Obligated Group) 5.00%, 07/01/2049	$	160	$	145,016
Series 2013 5.625%, 07/01/2047		865		864,360
County of Franklin OH (Trinity Health Corp.) Series 2017 5.00%, 12/01/2047		1,150		1,328,077
Series 2019A 4.00%, 12/01/2038		1,250		1,382,537
County of Hamilton OH (Life Enriching Communities Obligated Group) Series 2012 5.00%, 01/01/2042		1,625		1,534,764
County of Hamilton OH Sewer System Revenue Series 2013A 5.00%, 12/01/2031		4,305		4,936,759
County of Marion OH (United Church Homes, Inc. Obligated Group) 5.00%, 12/01/2039		200		170,048
County of Montgomery OH (Trousdale Foundation Obligated Group) Series 2018A 6.25%, 04/01/2049^(a)		450		254,390
County of Scioto OH (Southern Ohio Medical Center Obligated Group) Series 2016 5.00%, 02/15/2033		1,000		1,099,950
Dayton-Montgomery County Port Authority (StoryPoint Troy Project) Series 20151 7.00%, 01/15/2040^(b)		575		462,363
Gallia County Local School District Series 2014 5.00%, 11/01/2029		2,000		2,354,340
Northeast Ohio Regional Sewer District 3.00%, 11/15/2035		1,935		2,153,133
Ohio Air Quality Development Authority (Energy Harbor Generation LLC) Series 2009D 4.25%, 08/01/2029		1,065		1,062,337
Ohio Air Quality Development Authority (Energy Harbor Nuclear Generation LLC) Series 2009A 4.375%, 06/01/2033		105		105,000



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PORTFOLIO OF INVESTMENTS (continued)

AB OHIO PORTFOLIO


	Principal Amount (000)		U.S. $ Value

Ohio Air Quality Development Authority (Ohio Valley Electric Corp.) 3.25%, 09/01/2029	$	640	$	618,464
Ohio Air Quality Development Authority (Pratt Paper/OH, Inc.) Series 2017 4.50%, 01/15/2048^(a)		700		703,206
Ohio Higher Educational Facility Commission (Denison University) Series 2012 5.00%, 11/01/2032		590		631,483
Ohio Higher Educational Facility Commission (Kenyon College) Series 2017 5.00%, 07/01/2034-07/01/2042		3,365		3,736,831
Ohio University Series 2013 5.00%, 12/01/2032 (Pre-refunded/ETM)		2,020		2,259,249
Ohio Water Development Authority Water Pollution Control Loan Fund Series 2020A 5.00%, 12/01/2040		1,135		1,494,988
Princeton City School District Series 2014 5.00%, 12/01/2039 (Pre-refunded/ETM)		750		907,718
South-Western City School District 4.00%, 12/01/2048		1,000		1,168,360
State of Ohio (University Hospitals Health System, Inc. Obligated Group) Series 2020A 4.00%, 01/15/2038		800		881,160
Summit County Development Finance Authority (County of Summit OH Lease) Series 2012 5.00%, 12/01/2025		3,760		4,192,964
Toledo-Lucas County Port Authority (CSX Transportation, Inc.) Series 1992 6.45%, 12/15/2021		1,270		1,376,058
University of Akron (The) Series 2014A 5.00%, 01/01/2032		3,080		3,393,328

				58,176,538



abfunds.com		AB MUNICIPAL INCOME FUND II ^\| 77

PORTFOLIO OF INVESTMENTS (continued)

AB OHIO PORTFOLIO


	Principal Amount (000)		U.S. $ Value

Alabama – 0.3%
Tuscaloosa County Industrial Development Authority (Hunt Refining Co.) Series 2019A 4.50%, 05/01/2032^(a)	$	100	$	100,288
5.25%, 05/01/2044^(a)		100		102,064

				202,352

American Samoa – 0.3%
American Samoa Economic Development Authority (Territory of American Samoa) 7.125%, 09/01/2038^(a)		185		220,161


Arizona – 0.1%
Maricopa County Industrial Development Authority (Benjamin Franklin Charter School Ltd.) Series 2018A 6.00%, 07/01/2052^(a)		100		105,353


California – 0.3%
California Pollution Control Financing Authority (Poseidon Resources Channelside LP) Series 2012 5.00%, 07/01/2037^(a)		220		226,517
State of California Series 2004 5.25%, 04/01/2029		5		5,018

				231,535

Connecticut – 0.6%
Connecticut State Health & Educational Facilities Authority (University of New Haven, Inc.) Series 2018K-1 5.00%, 07/01/2037		415		429,853


Florida – 3.5%
Brevard County Health Facilities Authority (Health First, Inc. Obligated Group) Series 2014 5.00%, 04/01/2033		1,000		1,097,050
County of Miami-Dade FL Aviation Revenue Series 2014A 5.00%, 10/01/2033		1,300		1,434,862

				2,531,912



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PORTFOLIO OF INVESTMENTS (continued)

AB OHIO PORTFOLIO


	Principal Amount (000)		U.S. $ Value

Georgia – 0.1%
Municipal Electric Authority of Georgia 5.00%, 01/01/2059	$	100	$	106,876


Guam – 1.9%
Guam Government Waterworks Authority Series 2016 5.00%, 01/01/2046		615		656,642
Guam Power Authority Series 2017A 5.00%, 10/01/2036-10/01/2038		690		737,956

				1,394,598


Illinois – 0.3%
Metropolitan Pier & Exposition Authority 5.00%, 06/15/2050		210		201,737


Indiana – 0.1%
Indiana Finance Authority (RES Polyflow Indiana LLC) 7.00%, 03/01/2039^(a)		110		92,485


Kansas – 0.4%
Wyandotte County-Kansas City Unified Government (Wyandotte County-Kansas City Unified Government Sales Tax) Series 2018 4.50%, 06/01/2040		315		284,517


Michigan – 0.1%
City of Detroit MI 5.00%, 04/01/2036		50		51,212


New York – 0.9%
Suffolk County Economic Development Corp. (Catholic Health Services of Long Island Obligated Group) Series 2011 5.00%, 07/01/2028		635		657,600


North Carolina – 0.5%
North Carolina Medical Care Commission (Pennybyrn at Maryfield) Series 2015 5.00%, 10/01/2035		375		333,236



abfunds.com		AB MUNICIPAL INCOME FUND II ^\| 79

PORTFOLIO OF INVESTMENTS (continued)

AB OHIO PORTFOLIO


	Principal Amount (000)		U.S. $ Value

Puerto Rico – 1.6%
Puerto Rico Electric Power Authority AGM Series 2007V 5.25%, 07/01/2031	$	100	$	106,088
Puerto Rico Highway & Transportation Authority AGC Series 2005L 5.25%, 07/01/2041		100		105,147
AGC Series 2007N 5.25%, 07/01/2034-07/01/2036		270		287,201
Puerto Rico Industrial Tourist Educational Medical & Environmental Control Facilities Financing Auth (AES Puerto Rico LP) Series 2000 6.625%, 06/01/2026		255		263,288
Puerto Rico Sales Tax Financing Corp. Sales Tax Revenue Series 2018A Zero Coupon, 07/01/2029		100		72,334
Series 2019A 4.329%, 07/01/2040		70		67,200
5.00%, 07/01/2058		265		265,201

				1,166,459


Tennessee – 1.1%
Bristol Industrial Development Board (Bristol Industrial Development Board Sales Tax) Series 2016A 5.00%, 12/01/2035^(a)		125		111,455
Metropolitan Government Nashville & Davidson County Health & Educational Facilities Board (Belmont University) Series 2012 5.00%, 11/01/2029		630		653,990

				765,445


Texas – 5.7%
Arlington Higher Education Finance Corp. (Lifeschool of Dallas) Series 2014A 5.00%, 08/15/2039		1,000		1,123,880
City of Houston TX (City of Houston TX Hotel Occupancy Tax) Series 2014 5.00%, 09/01/2031		1,025		1,022,847



80 ^\| AB MUNICIPAL INCOME FUND II		abfunds.com

PORTFOLIO OF INVESTMENTS (continued)

AB OHIO PORTFOLIO


	Principal Amount (000)		U.S. $ Value

City of Houston TX Airport System Revenue (United Airlines, Inc.) Series 2018 5.00%, 07/15/2028	$	215	$	214,561
Mission Economic Development Corp. (Natgasoline LLC) Series 2018 4.625%, 10/01/2031^(a)		215		216,572
North Texas Tollway Authority (North Texas Tollway System) Series 2015B 5.00%, 01/01/2034		700		800,296
Texas Private Activity Bond Surface Transportation Corp. (LBJ Infrastructure Group LLC) Series 2010 7.00%, 06/30/2040		740		743,693

				4,121,849

Total Municipal Obligations (cost $68,820,116)				71,073,718


	Shares
SHORT-TERM INVESTMENTS – 0.2%
Investment Companies – 0.2%
AB Fixed Income Shares, Inc. – Government Money Market Portfolio – Class AB, 0.14%^(c)(d)(e)(cost $137,003)		137,003		137,003


Total Investments – 98.5% (cost $68,957,119)				71,210,721
Other assets less liabilities – 1.5%				1,090,627


Net Assets – 100.0%			$	72,301,348



abfunds.com		AB MUNICIPAL INCOME FUND II ^\| 81

PORTFOLIO OF INVESTMENTS (continued)

AB OHIO PORTFOLIO

CENTRALLY CLEARED INFLATION (CPI) SWAPS (see Note D)


				Rate Type
Notional Amount (000)		Termination Date		Payments made by the Fund			Payments received by the Fund			Payment Frequency Paid/ Received		Market Value			Upfront Premiums Paid (Received)		Unrealized Appreciation/ (Depreciation)
USD	710		08/09/2024		1.690	%		CPI	^#		Maturity	$	(25,893	)	$	—	$	(25,893	)
USD	355		01/15/2025		1.637	%		CPI	^#		Maturity		(12,843	)		—		(12,843	)
USD	795		01/15/2025		1.673	%		CPI	^#		Maturity		(30,284	)		—		(30,284	)
USD	1,880		01/15/2025		1.671	%		CPI	^#		Maturity		(68,177	)		—		(68,177	)
USD	1,520		01/15/2028		0.735	%		CPI	^#		Maturity		60,603			—		60,603
USD	2,020		01/15/2028		1.230	%		CPI	^#		Maturity		(3,425	)		—		(3,425	)

												$	(80,019	)	$	—	$	(80,019	)

#	Variable interest rate based on the rate of inflation as determined by the Consumer Price Index (CPI).

CENTRALLY CLEARED INTEREST RATE SWAPS (see Note D)


				Rate Type
Notional Amount (000)		Termination Date		Payments made by the Fund	Payments received by the Fund	Payment Frequency Paid/ Received		Market Value		Upfront Premiums Paid (Received)		Unrealized Appreciation/ (Depreciation)
USD	8,000		06/17/2021	3 Month LIBOR	1.907%		Quarterly/ Semi- Annual	$	189,522	$	—	$	189,522
USD	6,630		08/09/2022	3 Month LIBOR	1.486%		Quarterly/ Semi- Annual		208,342		—		208,342
USD	142		02/05/2025	3 Month LIBOR	1.361%		Quarterly/ Semi- Annual		7,316		—		7,316
USD	318		02/06/2025	3 Month LIBOR	1.419%		Quarterly/ Semi- Annual		17,332		—		17,332

								$	422,512	$	—	$	422,512

INFLATION (CPI) SWAPS (see Note D)


						Rate Type
Swap Counterparty	Notional Amount (000)			Termination Date		Payments made by the Fund			Payments received by the Fund			Payment Frequency Paid Received		Market Value			Upfront Premiums Paid (Received)		Unrealized Appreciation/ (Depreciation)
Barclays Bank PLC		USD	2,685		09/20/2020		2.263	%		CPI	^#		Maturity	$	(70,478	)	$	—	$	(70,478	)
Barclays Bank PLC		USD	2,541		10/15/2020		2.208	%		CPI	^#		Maturity		(64,283	)		—		(64,283	)
Barclays Bank PLC		USD	1,375		10/15/2020		2.210	%		CPI	^#		Maturity		(34,855	)		—		(34,855	)
Citibank, NA		USD	1,850		10/17/2020		2.220	%		CPI	^#		Maturity		(47,266	)		—		(47,266	)
JPMorgan Chase Bank, NA		USD	2,494		08/30/2020		2.210	%		CPI	^#		Maturity		(62,497	)		—		(62,497	)

														$	(279,379	)	$	—	$	(279,379	)

#	Variable interest rate based on the rate of inflation as determined by the Consumer Price Index (CPI).



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PORTFOLIO OF INVESTMENTS (continued)

AB OHIO PORTFOLIO

INTEREST RATE SWAPS (see Note D)


						Rate Type
Swap Counterparty	Notional Amount (000)			Termination Date		Payments made by the Fund			Payments received by the Fund			Payment Frequency Paid Received		Market Value			Upfront Premiums Paid (Received)		Unrealized Appreciation/ (Depreciation)
Citibank, NA		USD	1,175		10/09/2029		1.120	%		SIFMA	*		Quarterly	$	(64,565	)	$	—	$	(64,565	)
Citibank, NA		USD	1,175		10/09/2029		1.125	%		SIFMA	*		Quarterly		(65,174	)		—		(65,174	)

														$	(129,739	)	$	—	$	(129,739	)

*	Variable interest rate based on the Securities Industry & Financial Markets Association (SIFMA) Municipal Swap Index.

(a)

(b)	Illiquid security.

(c)	Affiliated investments.

(d)	The rate shown represents the 7-day yield as of period end.

(e)	To obtain a copy of the fund’s shareholder report, please go to the Securities and Exchange Commission’s website at www.sec.gov, or call AB at (800) 227-4618.

Glossary:

AGC – Assured Guaranty Corporation

AGM – Assured Guaranty Municipal

ETM – Escrowed to Maturity

LIBOR – London Interbank Offered Rates

See notes to financial statements.



abfunds.com		AB MUNICIPAL INCOME FUND II ^\| 83

PORTFOLIO OF INVESTMENTS

AB PENNSYLVANIA PORTFOLIO

May 31, 2020


	Principal Amount (000)		U.S. $ Value

MUNICIPAL OBLIGATIONS – 97.1%
Long-Term Municipal Bonds – 97.1%
Pennsylvania – 87.1%
Adams County Industrial Development Authority (Gettysburg College)
Series 2010 5.00%, 08/15/2025	$	1,090	$	1,100,126
Allegheny County Hospital Development Authority (Allegheny Health Network Obligated Group)
Series 2018A 5.00%, 04/01/2036		1,600		1,882,016
Altoona Area School District
BAM Series 2018 5.00%, 12/01/2039		2,000		2,383,720
Beaver County Industrial Development Authority (Energy Harbor Generation LLC)
Series 2016B 4.25%, 10/01/2047		690		689,138
Beaver County Industrial Development Authority (Energy Harbor Nuclear Generation LLC)
Series 2016A 4.375%, 01/01/2035		415		415,000
Berks County Industrial Development Authority (Highlands at Wyomissing (The))
Series 2018 5.00%, 05/15/2043		500		493,935
Bucks County Water & Sewer Authority
AGM Series 2011 5.00%, 12/01/2029 (Pre-refunded/ETM)		1,255		1,345,598
AGM Series 2015A 5.00%, 12/01/2037		780		910,705
Centre County Hospital Authority (Mount Nittany Medical Center Obligated Group)
Series 2018A 5.00%, 11/15/2042		1,000		1,165,030
Chambersburg Area Municipal Authority (Wilson College)
Series 2018 5.75%, 10/01/2043		650		644,170



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PORTFOLIO OF INVESTMENTS (continued)

AB PENNSYLVANIA PORTFOLIO


	Principal Amount (000)		U.S. $ Value

Chester County Health & Education Facilities Authority (Main Line Health System, Inc. Obligated Group)
Series 2020A 4.00%, 09/01/2040	$	1,000	$	1,150,390
Chester County Industrial Development Authority (Woodlands at Greystone Neighborhood Improvement District)
Series 2018 5.00%, 03/01/2038^(a)		375		350,265
City of Philadelphia PA
Series 2014A 5.25%, 07/15/2031		2,500		2,888,275
Series 2017 5.00%, 08/01/2031		1,000		1,254,230
City of Philadelphia PA Water & Wastewater Revenue
Series 2017A 5.00%, 10/01/2036		1,700		2,071,705
Series 2018A 5.00%, 10/01/2048		1,000		1,217,290
Commonwealth Financing Authority (Commonwealth Financing Authority State Lease)
Series 2018 5.00%, 06/01/2031		2,500		3,041,925
Commonwealth of Pennsylvania (Commonwealth of Pennsylvania COP)
Series 2018A 5.00%, 07/01/2034-07/01/2036		2,200		2,727,411
Crawford County Hospital Authority (Meadville Medical Center Obligated Group)
Series 2016A 6.00%, 06/01/2046		635		678,085
Cumberland County Municipal Authority (Penn State Health Obligated Group) 3.00%, 11/01/2038		2,440		2,485,774
Delaware County Authority (Elwyn Obligated Group)
Series 2017 5.00%, 06/01/2032		1,625		1,587,755



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PORTFOLIO OF INVESTMENTS (continued)

AB PENNSYLVANIA PORTFOLIO


	Principal Amount (000)		U.S. $ Value

Delaware County Regional Water Quality Control Authority
Series 2013 5.00%, 05/01/2030 (Pre-refunded/ETM)	$	2,070	$	2,349,450
Hospitals & Higher Education Facilities Authority of Philadelphia (The) (Temple University Health System Obligated Group)
Series 2017 5.00%, 07/01/2033		660		722,304
Montgomery County Higher Education & Health Authority (HumanGood Pennsylvania Obligated Group)
Series 2017 5.00%, 12/01/2037		1,100		1,110,956
Moon Industrial Development Authority (Baptist Homes Society)
Series 2015 5.75%, 07/01/2035		765		761,144
Northampton County General Purpose Authority (Lafayette College)
Series 2013A 5.00%, 11/01/2032		2,000		2,248,500
Northeastern Pennsylvania Hospital & Education Authority (Wilkes University)
Series 2016B 5.25%, 03/01/2037		520		525,304
Pennsylvania Economic Development Financing Authority (Covanta Holding Corp.)
Series 2019A 3.25%, 08/01/2039^(a)		270		224,200
Pennsylvania Economic Development Financing Authority (National Railroad Passenger Corp.)
Series 2012A
5.00%, 11/01/2032		2,000		2,187,360
Pennsylvania Economic Development Financing Authority (UPMC Obligated Group)
Series 2020A 4.00%, 04/15/2040		670		722,883



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PORTFOLIO OF INVESTMENTS (continued)

AB PENNSYLVANIA PORTFOLIO


	Principal Amount (000)		U.S. $ Value

Pennsylvania State University (The)
Series 2020A 4.00%, 09/01/2050	$	500	$	575,335
Pennsylvania Turnpike Commission
Series 2010B-2 5.00%, 12/01/2030 (Pre-refunded/ETM)		2,185		2,237,090
Series 2017B 5.00%, 06/01/2036		1,000		1,154,260
Pennsylvania Turnpike Commission (Pennsylvania Turnpike Commission Oil Franchise Tax)
Series 2018B 5.00%, 12/01/2038-12/01/2043		2,000		2,376,330
Philadelphia Authority for Industrial Development (Greater Philadelphia Health Action, Inc.)
Series 2015A 6.375%, 06/01/2040		400		355,648
Philadelphia Authority for Industrial Development (Temple University-of The Commonwealth System of Higher Education)
Series 2016-2 5.00%, 04/01/2029		1,000		1,171,770
Philadelphia Parking Authority (The)
Series 2009 5.00%, 09/01/2026		2,725		2,748,299
School District of Philadelphia (The)
Series 2019A 5.00%, 09/01/2044		750		908,768
Scranton School District/PA
BAM Series 2017E 5.00%, 12/01/2033-12/01/2035		1,800		2,210,461
Sports & Exhibition Authority of Pittsburgh and Allegheny County (Sports & Exhibition Authority of Pittsburgh and Allegheny County Sales Tax)
AGM Series 2010 5.00%, 02/01/2031		1,075		1,079,493
State Public School Building Authority (Harrisburg School District)
AGM Series 2016A 5.00%, 12/01/2029		1,000		1,203,600
Susquehanna Area Regional Airport Authority
Series 2017 5.00%, 01/01/2035-01/01/2038		2,000		1,978,750



abfunds.com		AB MUNICIPAL INCOME FUND II ^\| 87

PORTFOLIO OF INVESTMENTS (continued)

AB PENNSYLVANIA PORTFOLIO


	Principal Amount (000)		U.S. $ Value

Township of Lower Paxton PA
Series 2014 5.00%, 04/01/2044	$	2,000	$	2,305,940

				61,640,388


Alabama – 0.2%
Tuscaloosa County Industrial Development Authority (Hunt Refining Co.)
Series 2019A 5.25%, 05/01/2044^(a)		145		147,993


American Samoa – 0.3%
American Samoa Economic Development Authority (Territory of American Samoa) 7.125%, 09/01/2038^(a)		185		220,161


Arizona – 0.1%
Maricopa County Industrial Development Authority (Benjamin Franklin Charter School Ltd.)
Series 2018A 6.00%, 07/01/2052^(a)		100		105,353


Colorado – 0.3%
City & County of Denver CO (United Airlines, Inc.)
Series 2017 5.00%, 10/01/2032		215		213,228


Florida – 0.1%
Capital Trust Agency, Inc. (Provision Cares Proton Therapy Center – Orlando)
Series 2018A 7. 50%, 06/01/2048^(a)		100		88,982


Guam – 2.0%
Guam Power Authority
Series 2017A 5.00%, 10/01/2036-10/01/2040		645		686,437
Territory of Guam 5.00%, 11/15/2031		100		100,799



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PORTFOLIO OF INVESTMENTS (continued)

AB PENNSYLVANIA PORTFOLIO


	Principal Amount (000)		U.S. $ Value

Territory of Guam (Territory of Guam Business Privilege Tax)
Series 2011A 5.125%, 01/01/2042	$	620	$	628,953

				1,416,189


Illinois – 0.3%
Metropolitan Pier & Exposition Authority 5.00%, 06/15/2050		215		206,540


Kentucky – 0.5%
Kentucky Economic Development Finance Authority (Owensboro Health, Inc. Obligated Group)
Series 2017A 5.00%, 06/01/2041		315		330,492


Michigan – 0.1%
City of Detroit MI 5.00%, 04/01/2036		35		35,848


New Jersey – 0.6%
Tobacco Settlement Financing Corp.
Series 2018B 5.00%, 06/01/2046		425		445,540


New York – 3.0%
Build NYC Resource Corp. (Albert Einstein College of Medicine, Inc.)
Series 2015 5.50%, 09/01/2045^(a)		200		211,634
New York City Transitional Finance Authority Future Tax Secured Revenue
Series 2012B 5.00%, 11/01/2030		1,735		1,894,932

				2,106,566


Puerto Rico – 1.6%
Puerto Rico Electric Power Authority
AGM Series 2007V 5.25%, 07/01/2031		100		106,088
Puerto Rico Highway & Transportation Authority
AGC Series 2005L 5.25%, 07/01/2041		100		105,147
NATL Series 2005L 5.25%, 07/01/2035		100		98,271



abfunds.com		AB MUNICIPAL INCOME FUND II ^\| 89

PORTFOLIO OF INVESTMENTS (continued)

AB PENNSYLVANIA PORTFOLIO


	Principal Amount (000)		U.S. $ Value

NATL Series 2007N 5.25%, 07/01/2032-07/01/2033	$	215	$	212,035
Puerto Rico Industrial Tourist Educational Medical & Environmental Control Facilities Financing Auth (AES Puerto Rico LP)
Series 2000 6.625%, 06/01/2026		250		258,125
Puerto Rico Sales Tax Financing Corp. Sales Tax Revenue
Series 2018A
Zero Coupon, 07/01/2029		100		72,334
Series 2019A 4.329%, 07/01/2040		65		62,400
5.00%, 07/01/2058		250		250,190

				1,164,590


South Carolina – 0.7%
South Carolina Public Service Authority
Series 2016B 5.00%, 12/01/2041		470		519,369


Tennessee – 0.2%
Bristol Industrial Development Board (Bristol Industrial Development Board Sales Tax)
Series 2016A 5.00%, 12/01/2035^(a)		120		106,997


Total Municipal Obligations (cost $65,420,457)				68,748,236


	Shares
SHORT-TERM INVESTMENTS – 1.1%
Investment Companies – 1.1%
AB Fixed Income Shares, Inc. – Government Money Market Portfolio – Class AB, 0.14%^(b)(c)(d) (cost $761,381)		761,381		761,381


Total Investments – 98.2% (cost $66,181,838)				69,509,617
Other assets less liabilities – 1.8%				1,246,628


Net Assets – 100.0%			$	70,756,245



90 ^\| AB MUNICIPAL INCOME FUND II		abfunds.com

PORTFOLIO OF INVESTMENTS (continued)

AB PENNSYLVANIA PORTFOLIO

CENTRALLY CLEARED INFLATION (CPI) SWAPS (see Note D)


				Rate Type
Notional Amount (000)		Termination Date		Payments made by the Fund		Payments received by the Fund		Payment Frequency Paid/ Received	Market Value			Upfront Premiums Paid/ (Received)		Unrealized Appreciation/ (Depreciation)
USD	1,950		01/15/2025		1.671%		CPI^#	Maturity	$	(70,715	)	$	—	$	(70,715	)
USD	1,299		01/15/2025		1.673%		CPI^#	Maturity		(49,483	)		—		(49,483	)
USD	581		01/15/2025		1.637%		CPI^#	Maturity		(21,019	)		—		(21,019	)
USD	1,970		01/15/2028		1.230%		CPI^#	Maturity		(3,340	)		—		(3,340	)
USD	1,460		01/15/2028		0.735%		CPI^#	Maturity		58,211			—		58,211
USD	550		08/09/2024		1.690%		CPI^#	Maturity		(20,058	)		—		(20,058	)

									$	(106,404	)	$	—	$	(106,404	)

#	Variable interest rate based on the rate of inflation as determined by the Consumer Price Index (CPI).

CENTRALLY CLEARED INTEREST RATE SWAPS (see Note D)


				Rate Type
Notional Amount (000)		Termination Date		Payments made by the Fund		Payments received by the Fund		Payment Frequency Paid/ Received	Market Value		Upfront Premiums Paid/ (Received)		Unrealized Appreciation/ (Depreciation)
USD	6,290		06/17/2021		3 Month LIBOR		1.907%	Quarterly/ Semi- Annual	$	149,012	$	—	$	149,012
USD	3,590		08/09/2022		3 Month LIBOR		1.486%	Quarterly/ Semi- Annual		112,812		—		112,812
USD	231		02/05/2025		3 Month LIBOR		1.361%	Quarterly/ Semi- Annual		11,902		—		11,902
USD	519		02/06/2025		3 Month LIBOR		1.419%	Quarterly/ Semi- Annual		28,288		—		28,288

									$	302,014	$	—	$	302,014

INFLATION (CPI) SWAPS (see Note D)


						Rate Type
Swap Counterparty	Notional Amount (000)			Termination Date		Payments made by the Fund			Payments received by the Fund			Payment Frequency Paid/ Received		Market Value			Upfront Premiums Paid/ (Received)		Unrealized Appreciation/ (Depreciation)
Barclays Bank PLC		USD	2,612		09/20/2020		2.263	%		CPI	^#		Maturity	$	(68,562	)	$	—	$	(68,562	)
Barclays Bank PLC		USD	2,507		10/15/2020		2.208%			CPI^#			Maturity		(63,423	)		—		(63,423	)
Barclays Bank PLC		USD	1,338		10/15/2020		2.210%			CPI^#			Maturity		(33,918	)		—		(33,918	)



abfunds.com		AB MUNICIPAL INCOME FUND II ^\| 91

PORTFOLIO OF INVESTMENTS (continued)

AB PENNSYLVANIA PORTFOLIO


						Rate Type
Swap Counterparty	Notional Amount (000)			Termination Date		Payments made by the Fund	Payments received by the Fund	Payment Frequency Paid/ Received	Market Value			Upfront Premiums Paid/ (Received)		Unrealized Appreciation/ (Depreciation)
Citibank, N.A.		USD	1,820		10/17/2020	2.220%	CPI^#	Maturity	$	(46,499	)	$	—	$	(46,499	)
JPMorgan Chase Bank, N.A.		USD	2,446		08/30/2020	2.210%	CPI^#	Maturity		(61,294	)		—		(61,294	)

									$	(273,696	)	$	—	$	(273,696	)

#	Variable interest rate based on the rate of inflation as determined by the Consumer Price Index (CPI).

INTEREST RATE SWAPS (see Note D)


						Rate Type
Swap Counterparty	Notional Amount (000)			Termination Date		Payments made by the Fund	Payments received by the Fund	Payment Frequency Paid/ Received	Market Value			Upfront Premiums Paid/ (Received)		Unrealized Appreciation/ (Depreciation)
Citibank, N.A.		USD	1,140		10/09/2029	1.120%	SIFMA*	Quarterly	$	(62,642	)	$	—	$	(62,642	)
Citibank, N.A.		USD	1,140		10/09/2029	1.125%	SIFMA*	Quarterly		(63,233	)		—		(63,233	)

									$	(125,875	)	$	—	$	(125,875	)

*	Variable interest rate based on the Securities Industry & Financial Markets Association (SIFMA) Municipal Swap Index.

(a)

(b)	Affiliated investments.

(c)	The rate shown represents the 7-day yield as of period end.

(d)	To obtain a copy of the fund’s shareholder report, please go to the Securities and Exchange Commission’s website at www.sec.gov, or call AB at (800) 227-4618.

Glossary:

AGC – Assured Guaranty Corporation

AGM – Assured Guaranty Municipal

BAM – Build American Mutual

COP – Certificate of Participation

ETM – Escrowed to Maturity

LIBOR – London Interbank Offered Rates

NATL – National Interstate Corporation

UPMC – University of Pittsburgh Medical Center

See notes to financial statements.



92 ^\| AB MUNICIPAL INCOME FUND II		abfunds.com

PORTFOLIO OF INVESTMENTS

AB VIRGINIA PORTFOLIO

May 31, 2020


	Principal Amount (000)		U.S. $ Value

MUNICIPAL OBLIGATIONS – 98.0%
Long-Term Municipal Bonds – 96.5%
Virginia – 71.9%
Arlington County Industrial Development Authority (Virginia Hospital Center Arlington Health System/VA) 4.00%, 07/01/2045	$	4,000	$	4,324,640
Cherry Hill Community Development Authority (Potomac Shores Project) Series 2015 5.40%, 03/01/2045^(a)		585		559,576
Chesapeake Bay Bridge & Tunnel District Series 2016 5.00%, 07/01/2046		4,000		4,287,920
Chesterfield County Economic Development Authority (Brandermill Woods) Series 2012 5.125%, 01/01/2043		600		552,882
City of Newport News VA Series 2014A 5.00%, 07/15/2030-07/15/2032		2,000		2,353,540
City of Richmond VA Series 2019A 3.00%, 07/15/2034		3,500		3,864,000
City of Richmond VA Public Utility Revenue Series 2013A 5.00%, 01/15/2029 (Pre-refunded/ETM)		1,970		2,214,713
Series 2016 5.00%, 01/15/2030-01/15/2034		9,000		11,112,680
City of Suffolk VA Series 2010A 5.00%, 08/01/2022 (Pre-refunded/ETM)		210		211,632
5.00%, 08/01/2022 (Pre-refunded/ETM)^(b)		1,870		1,884,848
Series 2011 5.00%, 02/01/2026 (Pre-refunded/ETM)		950		980,429
County of Fairfax VA Series 2014B 5.00%, 10/01/2020		2,000		2,032,440
Culpeper County Economic Development Authority (County of Culpeper VA Lease) Series 2014 4.00%, 06/01/2029		2,955		3,296,598



abfunds.com		AB MUNICIPAL INCOME FUND II ^\| 93

PORTFOLIO OF INVESTMENTS (continued)

AB VIRGINIA PORTFOLIO


	Principal Amount (000)		U.S. $ Value

Dullles Town Center Community Development Authority Series 2012 4.25%, 03/01/2026	$	1,000	$	977,500
Fairfax County Economic Development Authority 4.00%, 04/01/2035 (Pre-refunded/ETM)		415		498,095
4.00%, 04/01/2035		1,585		1,782,269
Fairfax County Economic Development Authority (County of Fairfax VA Lease) Series 2014A 5.00%, 10/01/2034		1,000		1,180,790
Fairfax County Economic Development Authority (Goodwin House, Inc.) Series 2016 5.00%, 10/01/2042		1,200		1,218,780
Fairfax County Industrial Development Authority (Inova Health System Obligated Group) Series 2014A 5.00%, 05/15/2044		2,000		2,210,680
Series 2018A 4.00%, 05/15/2048		1,500		1,671,435
Greater Richmond Convention Center Authority (Greater Richmond Convention Center Authority Hotel Occupancy Tax) Series 2015 5.00%, 06/15/2030-06/15/2031		5,000		5,494,030
Hampton Roads Sanitation District Series 2017A 5.00%, 10/01/2033		3,550		4,501,222
Hampton Roads Transportation Accountability Commission Series 2018A 5.00%, 07/01/2035		4,000		5,054,880
Hanover County Economic Development Authority (Covenant Woods) Series 2012A 5.00%, 07/01/2042		1,000		929,240
Henrico County Economic Development Authority Series 2013 5.00%, 11/01/2030 (Pre-refunded/ETM)		2,000		2,223,860



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PORTFOLIO OF INVESTMENTS (continued)

AB VIRGINIA PORTFOLIO


	Principal Amount (000)		U.S. $ Value

Henrico County Economic Development Authority (LifeSpire of Virginia Obligated Group) Series 2017C 5.00%, 12/01/2037	$	765	$	719,092
Lexington Industrial Development Authority (Kendal at Lexington) Series 2016 4.00%, 01/01/2031		1,500		1,375,545
Lynchburg Economic Development Authority (Centra Health Obligated Group) Series 2017A 5.00%, 01/01/2047		1,750		1,969,467
Mosaic District Community Development Authority Series 2011A 6.875%, 03/01/2036		250		254,420
Norfolk Airport Authority/VA 5.00%, 07/01/2043		2,870		3,305,580
Norfolk Economic Development Authority Series 2013 5.00%, 11/01/2029 (Pre-refunded/ETM)		2,200		2,446,246
Richmond Redevelopment & Housing Authority (American Tobacco Holdings LLC) Series 2017 5.55%, 01/01/2037^(a)		1,000		996,730
Roanoke County Economic Development Authority (City of Roanoke VA Lease) Series 2015 5.00%, 10/15/2035		1,750		2,125,340
Roanoke Economic Development Authority (Carilion Clinic Obligated Group) 4.00%, 07/01/2036-07/01/2038		2,550		2,986,932
AGM Series 2005C 5.00%, 07/01/2027		3,000		3,011,460
Roanoke Economic Development Authority (Lynchburg College) Series 2018A 5.00%, 09/01/2033-09/01/2043		3,660		3,913,864
Rockingham County Economic Development Authority (Sunnyside Presbyterian Home Obligated Group) 5.00%, 12/01/2039		1,000		1,027,400



abfunds.com		AB MUNICIPAL INCOME FUND II ^\| 95

PORTFOLIO OF INVESTMENTS (continued)

AB VIRGINIA PORTFOLIO


	Principal Amount (000)		U.S. $ Value

Suffolk Economic Development Authority (United Church Homes & Services Obligated Group) Series 2016 5.00%, 09/01/2031	$	1,000	$	983,880
Tobacco Settlement Financing Corp./VA Series 2007B1 5.00%, 06/01/2047		2,400		2,381,976
Virginia College Building Authority (Marymount University) Series 2015A 5.00%, 07/01/2030^(a)		1,615		1,607,361
Virginia College Building Authority (Virginia College Building Authority State Lease) Series 2019B 3.00%, 02/01/2037		9,140		9,888,018
Virginia Commonwealth University Health System Authority Series 2011 5.00%, 07/01/2027 (Pre-refunded/ETM)		1,000		1,051,560
Virginia Commonwealth University Health System Authority (Virginia Commonwealth University Health System Authority Obligated Group) Series 2017B 5.00%, 07/01/2046		2,000		2,345,300
Virginia Port Authority Series 2016B 5.00%, 07/01/2035-07/01/2036		6,160		7,410,090
Virginia Public School Authority (Virginia Public School Authority State Lease) Series 2015 4.00%, 08/01/2020		720		724,565
Virginia Resources Authority Series 2011B 5.00%, 11/01/2026 (Pre-refunded/ETM)		4,830		5,148,635
5.00%, 11/01/2026		170		180,679
Series 2016C 4.00%, 11/01/2034		2,000		2,298,180
Virginia Resources Authority (Virginia Resources Authority SRF) Series 2013 5.00%, 10/01/2025		4,000		4,611,120



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PORTFOLIO OF INVESTMENTS (continued)

AB VIRGINIA PORTFOLIO


	Principal Amount (000)		U.S. $ Value

Virginia Small Business Financing Authority (95 Express Lanes LLC) 5.00%, 07/01/2049	$	2,000	$	2,035,380
Virginia Small Business Financing Authority (Bon Secours Mercy Health, Inc.) 4.00%, 12/01/2049		3,500		3,829,700
Virginia Small Business Financing Authority (Covanta Holding Corp.) Series 2018 5.00%, 01/01/2048^(a)		1,000		1,010,190
Virginia Small Business Financing Authority (Elizabeth River Crossings OpCo LLC) Series 2012 5.25%, 01/01/2032		2,500		2,588,425
5.50%, 01/01/2042		1,000		1,029,980
Virginia Small Business Financing Authority (Hampton University) Series 2014 5.25%, 10/01/2029		4,125		4,895,220
Virginia Small Business Financing Authority (I-66 Express Mobility Partners LLC) 5.00%, 12/31/2049		430		450,322
Series 2017 5.00%, 12/31/2052		3,350		3,497,902
Winchester Economic Development Authority (Valley Health Obligated Group) Series 2015 5.00%, 01/01/2034-01/01/2035		3,500		4,022,205

				151,541,443

Alabama – 0.2%
Tuscaloosa County Industrial Development Authority (Hunt Refining Co.) Series 2019A 5.25%, 05/01/2044^(a)		400		408,256


American Samoa – 0.3%
American Samoa Economic Development Authority (Territory of American Samoa) 7.125%, 09/01/2038^(a)		455		541,477


Arizona – 2.6%
Arizona Sports & Tourism Authority Series 2012A 5.00%, 07/01/2029		3,945		4,253,105



abfunds.com		AB MUNICIPAL INCOME FUND II ^\| 97

PORTFOLIO OF INVESTMENTS (continued)

AB VIRGINIA PORTFOLIO


	Principal Amount (000)		U.S. $ Value

Maricopa County Industrial Development Authority (Benjamin Franklin Charter School Ltd.) Series 2018A 6.00%, 07/01/2052^(a)	$	200	$	210,706
Salt Verde Financial Corp. (Citigroup, Inc.) Series 2007 5.00%, 12/01/2037		705		918,227

				5,382,038

California – 0.3%
California Statewide Communities Development Authority (Enloe Medical Center) Series 2008A 5.50%, 08/15/2023		660		662,475


District of Columbia – 9.4%
Metropolitan Washington Airports Authority Series 2012A 5.00%, 10/01/2030		1,000		1,074,990
Series 2016A 5.00%, 10/01/2035		1,200		1,382,484
Series 2018A 5.00%, 10/01/2036		3,000		3,572,670
Series 2020A 4.00%, 10/01/2035^(c)		2,000		2,231,740
Metropolitan Washington Airports Authority (Dulles Toll Road) Series 2010B 6.50%, 10/01/2044		4,300		5,291,322
Washington Metropolitan Area Transit Authority Series 2017A 5.00%, 07/01/2031-07/01/2032		5,095		6,159,336

				19,712,542

Florida – 0.7%
Capital Trust Agency, Inc. (Provision Cares Proton Therapy Center – Orlando) Series 2018A 7.50%, 06/01/2048^(a)		100		88,982



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PORTFOLIO OF INVESTMENTS (continued)

AB VIRGINIA PORTFOLIO


	Principal Amount (000)		U.S. $ Value

Pinellas County Educational Facilities Authority (Barry University, Inc.) Series 2012 5.00%, 10/01/2027	$	400	$	410,948
5.25%, 10/01/2030		1,000		1,028,390

				1,528,320

Georgia – 0.2%
Municipal Electric Authority of Georgia 5.00%, 01/01/2039-01/01/2056		355		392,435


Guam – 0.9%
Guam Power Authority Series 2017A 5.00%, 10/01/2036		1,630		1,750,571
Territory of Guam 5.00%, 11/15/2031		100		100,799

				1,851,370

Illinois – 1.0%
Metropolitan Pier & Exposition Authority Series 2015B 5.00%, 12/15/2045		2,200		2,141,062


Michigan – 0.8%
City of Detroit MI 5.00%, 04/01/2036		85		87,060
Michigan Public Power Agency Series 2012A 5.00%, 01/01/2032		1,575		1,665,878

				1,752,938

Nevada – 0.0%
City of Reno NV (County of Washoe NV Sales Tax Revenue) Series 2018C Zero Coupon, 07/01/2058^(a)		500		53,695


New York – 1.1%
Metropolitan Transportation Authority Series 2011D 5.00%, 11/15/2029 (Pre-refunded/ETM)		1,010		1,081,064
Suffolk County Economic Development Corp. (Catholic Health Services of Long Island Obligated Group) Series 2011 5.00%, 07/01/2028		1,090		1,128,793

				2,209,857



abfunds.com		AB MUNICIPAL INCOME FUND II ^\| 99

PORTFOLIO OF INVESTMENTS (continued)

AB VIRGINIA PORTFOLIO


	Principal Amount (000)		U.S. $ Value

North Carolina – 0.2%
North Carolina Medical Care Commission (Aldersgate United Methodist Retirement Community, Inc.) Series 2015 4.70%, 07/01/2037	$	560	$	498,786


Ohio – 0.3%
Ohio Water Development Authority Water Pollution Control Loan Fund (Energy Harbor Nuclear Generation LLC) Series 2016A 4.375%, 06/01/2033		600		600,000


Puerto Rico – 2.2%
Puerto Rico Electric Power Authority AGM Series 2007V 5.25%, 07/01/2031		235		249,307
NATL Series 2007V 5.25%, 07/01/2035		100		98,236
Puerto Rico Highway & Transportation Authority AGC Series 2005L 5.25%, 07/01/2041		220		231,323
AGC Series 2007N 5.25%, 07/01/2034-07/01/2036		415		441,440
NATL Series 2005L 5.25%, 07/01/2035		110		108,098
NATL Series 2007N 5.25%, 07/01/2032		100		98,761
Puerto Rico Housing Finance Authority (Puerto Rico Housing Finance Authority Cap Fd Prog) Series 2003 5.00%, 12/01/2020		1,580		1,592,324
Puerto Rico Industrial Tourist Educational Medical & Environmental Control Facilities Financing Auth (AES Puerto Rico LP) Series 2000 6.625%, 06/01/2026		615		634,987
Puerto Rico Public Buildings Authority (Commonwealth of Puerto Rico) NATL Series 2007 6.00%, 07/01/2025		100		103,000



100 ^\| AB MUNICIPAL INCOME FUND II		abfunds.com

PORTFOLIO OF INVESTMENTS (continued)

AB VIRGINIA PORTFOLIO


	Principal Amount (000)		U.S. $ Value

Puerto Rico Sales Tax Financing Corp. Sales Tax Revenue Series 2018A Zero Coupon, 07/01/2029	$	223	$	161,305
Series 2019A 4.329%, 07/01/2040		180		172,800
5.00%, 07/01/2058		675		675,513

				4,567,094

South Carolina – 0.1%
South Carolina Public Service Authority Series 2014A 5.00%, 12/01/2049		205		217,499


Tennessee – 0.1%
Bristol Industrial Development Board (Bristol Industrial Development Board Sales Tax) Series 2016A 5.00%, 12/01/2035^(a)		295		263,034


Texas – 1.7%
Mission Economic Development Corp. (Natgasoline LLC) Series 2018 4.625%, 10/01/2031^(a)		520		523,801
Tarrant County Cultural Education Facilities Finance Corp. (Edgemere Retirement Senior Quality Lifestyles Corp.) Series 2015B 5.00%, 11/15/2036		1,150		833,992
Texas Private Activity Bond Surface Transportation Corp. (LBJ Infrastructure Group LLC) Series 2010 7.00%, 06/30/2040		1,110		1,115,539
Texas Private Activity Bond Surface Transportation Corp. (NTE Mobility Partners Segments 3 LLC) Series 2013 6.75%, 06/30/2043		1,000		1,124,720

				3,598,052



abfunds.com		AB MUNICIPAL INCOME FUND II ^\| 101

PORTFOLIO OF INVESTMENTS (continued)

AB VIRGINIA PORTFOLIO


	Principal Amount (000)		U.S. $ Value

Washington – 0.6%
Pend Oreille County Public Utility District No. 1 Box Canyon Series 2018 5.00%, 01/01/2044	$	650	$	730,548
Washington Higher Education Facilities Authority (Whitworth University) Series 2012 5.00%, 10/01/2032		400		415,568
Washington State Housing Finance Commission (Presbyterian Retirement Communities Northwest Obligated Group) Series 2019A 5.00%, 01/01/2055^(a)		100		84,345

				1,230,461

Wisconsin – 1.9%
Wisconsin Health & Educational Facilities Authority Series 2012C 5.00%, 08/15/2032 (Pre-refunded/ETM)		2,700		2,969,595
Wisconsin Public Finance Authority (Celanese US Holdings LLC) Series 2016A 5.00%, 01/01/2024		1,000		1,041,150

				4,010,745

Total Long-Term Municipal Bonds (cost $194,169,869)				203,163,579


SHORT-TERM MUNICIPAL NOTES – 1.5%
Massachusetts – 1.5%
Massachusetts Development Finance Agency (Trustees of The College of The Holy Cross) 0.05%, 09/01/2037^(d) (cost $3,215,000)		3,215		3,215,000


Total Municipal Obligations (cost $197,384,869)				206,378,579



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PORTFOLIO OF INVESTMENTS (continued)

AB VIRGINIA PORTFOLIO


	Shares		U.S. $ Value

SHORT-TERM INVESTMENTS – 1.4%
Investment Companies – 1.4%
AB Fixed Income Shares, Inc. – Government Money Market Portfolio – Class AB, 0.14%^(e)(f)(g) (cost $2,954,571)		2,954,571	$	2,954,571


Total Investments – 99.4% (cost $200,339,440)				209,333,150
Other assets less liabilities – 0.6%				1,325,138


Net Assets – 100.0%			$	210,658,288

CENTRALLY CLEARED INFLATION (CPI) SWAPS (see Note D)


				Rate Type
Notional Amount (000)		Termination Date		Payments made by the Fund			Payments received by the Fund			Payment Frequency Paid/ Received		Market Value			Upfront Premiums Paid/ (Received)			Unrealized Appreciation/ (Depreciation)
USD	1,980		08/09/2024		1.690	%		CPI	^#		Maturity	$	(72,209	)	$	(1,572	)	$	(70,637	)
USD	4,820		01/15/2025		1.671	%		CPI	^#		Maturity		(174,794	)		—			(174,794	)
USD	4,160		01/15/2025		1.673	%		CPI	^#		Maturity		(158,467	)		—			(158,467	)
USD	1,860		01/15/2025		1.637	%		CPI	^#		Maturity		(67,290	)		—			(67,290	)
USD	5,020		01/15/2028		1.230	%		CPI	^#		Maturity		(8,511	)		—			(8,511	)
USD	3,740		01/15/2028		0.735	%		CPI	^#		Maturity		149,116			—			149,116

												$	(332,155	)	$	(1,572	)	$	(330,583	)

#	Variable interest rate based on the rate of inflation as determined by the Consumer Price Index (CPI).

CENTRALLY CLEARED INTEREST RATE SWAPS (see Note D)


				Rate Type
Notional Amount (000)		Termination Date		Payments made by the Fund		Payments received by the Fund			Payment Frequency Paid/ Received		Market Value		Upfront Premiums Paid/ (Received)		Unrealized Appreciation/ (Depreciation)
USD	12,160		08/09/2022		3 Month LIBOR		1.486	%		Quarterly/ Semi- Annual	$	382,117	$	—	$	382,117
USD	1,661		02/06/2025		3 Month LIBOR		1.419	%		Quarterly/ Semi- Annual		90,531		—		90,531
USD	2,875		09/13/2024		3 Month LIBOR		1.526	%		Quarterly/ Semi- Annual		153,008		—		153,008

											$	625,656	$	—	$	625,656



abfunds.com		AB MUNICIPAL INCOME FUND II ^\| 103

PORTFOLIO OF INVESTMENTS (continued)

AB VIRGINIA PORTFOLIO

INFLATION (CPI) SWAPS (see Note D)


						Rate Type
Swap Counterparty	Notional Amount (000)			Termination Date		Payments made by the Fund			Payments received by the Fund			Payment Frequency Paid/ Received		Market Value			Upfront Premiums Paid/ (Received)		Unrealized Appreciation/ (Depreciation)
Barclays Bank PLC		USD	6,633		09/20/2020		2.263	%		CPI	^#		Maturity	$	(174,109	)	$	—	$	(174,109	)
Barclays Bank PLC		USD	6,159		10/15/2020		2.208	%		CPI	^#		Maturity		(155,813	)		—		(155,813	)
Barclays Bank PLC		USD	3,397		10/15/2020		2.210	%		CPI	^#		Maturity		(86,112	)		—		(86,112	)
Citibank, NA		USD	4,480		10/17/2020		2.220	%		CPI	^#		Maturity		(114,460	)		—		(114,460	)
JPMorgan Chase Bank, NA		USD	5,919		08/30/2020		2.210	%		CPI	^#		Maturity		(148,323	)		—		(148,323	)

														$	(678,817	)	$	—	$	(678,817	)

#	Variable interest rate based on the rate of inflation as determined by the Consumer Price Index (CPI).

INTEREST RATE SWAPS (see Note D)


						Rate Type
Swap Counterparty	Notional Amount (000)			Termination Date		Payments made by the Fund			Payments received by the Fund			Payment Frequency Paid/ Received		Market Value			Upfront Premiums Paid/ (Received)		Unrealized Appreciation/ (Depreciation)
Citibank, NA		USD	2,965		10/09/2029		1.120	%		SIFMA	*		Quarterly	$	(162,924	)	$	—	$	(162,924	)
Citibank, NA		USD	2,965		10/09/2029		1.125	%		SIFMA	*		Quarterly		(164,460	)		—		(164,460	)

														$	(327,384	)	$	—	$	(327,384	)

*	Variable interest rate based on the Securities Industry & Financial Markets Association (SIFMA) Municipal Swap Index.

(a)

(b)	Position, or a portion thereof, has been segregated to collateralize OTC derivatives outstanding.

(c)	When-Issued or delayed delivery security.

(d)

Variable Rate Demand Notes are instruments whose interest rates change on a specific date (such as coupon date or interest payment date) or whose interest rates vary with changes in a designated base rate (such as the prime interest rate). This instrument is payable on demand and is secured by letters of credit or other credit support agreements from major banks.

(e)	Affiliated investments.

(f)	The rate shown represents the 7-day yield as of period end.

(g)	To obtain a copy of the fund’s shareholder report, please go to the Securities and Exchange Commission’s website at www.sec.gov, or call AB at (800) 227-4618.



104 ^\| AB MUNICIPAL INCOME FUND II		abfunds.com

PORTFOLIO OF INVESTMENTS (continued)

AB VIRGINIA PORTFOLIO

Glossary:

AGC – Assured Guaranty Corporation

AGM – Assured Guaranty Municipal

ETM – Escrowed to Maturity

LIBOR – London Interbank Offered Rates

NATL – National Interstate Corporation

SRF – State Revolving Fund

See notes to financial statements.



abfunds.com		AB MUNICIPAL INCOME FUND II ^\| 105

STATEMENT OF ASSETS & LIABILITIES

May 31, 2020


	AB Arizona			AB Massachusetts
Assets
Investments in securities, at value
Unaffiliated issuers (cost $104,665,687 and $178,998,480, respectively)	$	108,574,035		$	185,984,690
Affiliated issuers (cost $3,017,561 and $8,788,584, respectively)		3,017,561			8,788,584
Cash		– 0	–		780
Cash collateral due from broker		1,497,669			1,794,114
Interest receivable		1,947,293			2,776,649
Receivable for investment securities sold		89,170			1,310,000
Receivable for shares of beneficial interest sold		43,534			434,161
Receivable for variation margin on centrally cleared swaps		3,919			11,034
Affiliated dividends receivable		537			1,094

Total assets		115,173,718			201,101,106

Liabilities
Due to custodian		343			– 0	–
Unrealized depreciation on inflation swaps		381,760			706,183
Unrealized depreciation on interest rate swaps		184,948			334,009
Payable for shares of beneficial interest redeemed		109,006			411,860
Payable for investment securities purchased		100,000			– 0	–
Administrative fee payable		31,895			29,462
Distribution fee payable		29,503			43,272
Dividends payable		16,395			111,146
Advisory fee payable		13,202			43,744
Trustees’ fees payable		4,273			4,624
Transfer Agent fee payable		1,496			2,273
Accrued expenses		50,776			58,028

Total liabilities		923,597			1,744,601

Net Assets	$	114,250,121		$	199,356,505

Composition of Net Assets
Shares of beneficial interest, at par	$	103,817		$	178,799
Additional paid-in capital		111,725,529			190,368,442
Distributable earnings		2,420,775			8,809,264

	$	114,250,121		$	199,356,505

See notes to financial statements.



106 ^\| AB MUNICIPAL INCOME FUND II		abfunds.com

STATEMENT OF ASSETS & LIABILITIES (continued)

Net Asset Value Per Share—unlimited shares authorized, $.01 par value


AB Arizona Portfolio	Net Assets		Shares Outstanding		Net Asset Value

Class A	$	105,314,748		9,568,678	$	11.01	*

Class C	$	8,935,373		813,024	$	10.99


AB Massachusetts Portfolio

Class A	$	114,591,107		10,273,401	$	11.15	*

Class C	$	22,940,140		2,060,347	$	11.13

Advisor Class	$	61,825,258		5,546,113	$	11.15

*	The maximum offering price per share for Class A of AB Arizona Portfolio and AB Massachusetts Portfolio were $11.35 and $11.49, respectively, which reflects a sales charge of 3.00%.

See notes to financial statements.



abfunds.com		AB MUNICIPAL INCOME FUND II ^\| 107

STATEMENT OF ASSETS & LIABILITIES (continued)


	AB Minnesota			AB New Jersey
Assets
Investments in securities, at value
Unaffiliated issuers (cost $47,924,925 and $70,686,832, respectively)	$	50,866,369		$	73,416,273
Affiliated issuers (cost $3,001,212 and $0, respectively)		3,001,212			– 0	–
Cash		35			– 0	–
Cash collateral due from broker		641,080			828,715
Interest receivable		634,226			1,135,031
Receivable for variation margin on centrally cleared swaps		24,069			3,881
Receivable for shares of beneficial interest sold		7,330			103,586
Receivable due from Adviser		1,450			– 0	–
Affiliated dividends receivable		525			23
Receivable for investment securities sold		– 0	–		224,910

Total assets		55,176,296			75,712,419

Liabilities
Due to custodian		– 0	–		568,156
Unrealized depreciation on inflation swaps		189,987			313,319
Payable for shares of beneficial interest redeemed		137,301			108,419
Unrealized depreciation on interest rate swaps		92,197			136,364
Administrative fee payable		31,714			29,462
Audit and tax fee payable		29,926			29,926
Distribution fee payable		14,518			20,638
Dividends payable		8,021			32,645
Trustees’ fees payable		4,109			4,110
Transfer Agent fee payable		1,718			1,729
Payable for investment securities purchased		– 0	–		100,000
Advisory fee payable		– 0	–		4,646
Accrued expenses		21,790			25,873

Total liabilities		531,281			1,375,287

Net Assets	$	54,645,015		$	74,337,132

Composition of Net Assets
Shares of beneficial interest, at par	$	52,937		$	77,477
Additional paid-in capital		51,275,691			71,900,504
Distributable earnings		3,316,387			2,359,151

	$	54,645,015		$	74,337,132

See notes to financial statements.



108 ^\| AB MUNICIPAL INCOME FUND II		abfunds.com

STATEMENT OF ASSETS & LIABILITIES (continued)

Net Asset Value Per Share—unlimited shares authorized, $.01 par value


AB Minnesota Portfolio	Net Assets		Shares Outstanding		Net Asset Value

Class A	$	49,723,114		4,817,375	$	10.32	*

Class C	$	4,921,901		476,313	$	10.33


AB New Jersey Portfolio

Class A	$	66,446,053		6,925,675	$	9.59	*

Class C	$	7,891,079		822,021	$	9.60

*	The maximum offering price per share for Class A of AB Minnesota Portfolio and AB New Jersey Portfolio were $10.64 and $9.89, respectively, which reflects a sales charge of 3.00%.

See notes to financial statements.



abfunds.com		AB MUNICIPAL INCOME FUND II ^\| 109

STATEMENT OF ASSETS & LIABILITIES (continued)


	AB Ohio			AB Pennsylvania
Assets
Investments in securities, at value
Unaffiliated issuers (cost $68,820,116 and $65,420,457, respectively)	$	71,073,718		$	68,748,236
Affiliated issuers (cost $137,003 and $761,381, respectively)		137,003			761,381
Cash		76			77
Cash collateral due from broker		538,578			762,428
Interest receivable		1,104,234			983,729
Receivable for investment securities sold		99,924			– 0	–
Receivable for shares of beneficial interest sold		8,143			126,410
Affiliated dividends receivable		26			44

Total assets		72,961,702			71,382,305

Liabilities
Unrealized depreciation on inflation swaps		279,379			273,696
Unrealized depreciation on interest rate swaps		129,739			125,875
Payable for shares of beneficial interest redeemed		119,536			90,676
Administrative fee payable		29,462			29,643
Distribution fee payable		18,869			17,449
Dividends payable		18,698			19,825
Advisory fee payable		5,334			6,600
Trustees’ fees payable		4,101			4,094
Payable for variation margin on centrally cleared swaps		2,274			4,239
Transfer Agent fee payable		1,466			1,742
Accrued expenses		51,496			52,221

Total liabilities		660,354			626,060

Net Assets	$	72,301,348		$	70,756,245

Composition of Net Assets
Shares of beneficial interest, at par	$	73,176		$	67,704
Additional paid-in capital		73,218,368			67,704,219
Distributable earnings (accumulated loss)		(990,196	)		2,984,322

	$	72,301,348		$	70,756,245

See notes to financial statements.



110 ^\| AB MUNICIPAL INCOME FUND II		abfunds.com

STATEMENT OF ASSETS & LIABILITIES (continued)

Net Asset Value Per Share—unlimited shares authorized, $.01 par value


AB Ohio Portfolio	Net Assets		Shares Outstanding		Net Asset Value

Class A	$	66,573,249		6,737,555	$	9.88	*

Class C	$	5,728,099		580,017	$	9.88


AB Pennsylvania Portfolio

Class A	$	66,575,010		6,370,489	$	10.45	*

Class C	$	4,181,235		399,955	$	10.45

*	The maximum offering price per share for Class A of AB Ohio Portfolio and AB Pennsylvania Portfolio were $10.19 and $10.77, respectively, which reflects a sales charge of 3.00%.

See notes to financial statements.



abfunds.com		AB MUNICIPAL INCOME FUND II ^\| 111

STATEMENT OF ASSETS & LIABILITIES (continued)


	AB Virginia
Assets
Investments in securities, at value
Unaffiliated issuers (cost $197,384,869)	$	206,378,579
Affiliated issuers (cost $2,954,571)		2,954,571
Cash collateral due from broker		1,757,035
Interest receivable		2,720,459
Receivable for shares of beneficial interest sold		368,542
Receivable for investment securities sold		225,048
Affiliated dividends receivable		1,078

Total assets		214,405,312

Liabilities
Due to custodian		321
Payable for investment securities purchased		2,240,480
Unrealized depreciation on inflation swaps		678,817
Unrealized depreciation on interest rate swaps		327,384
Payable for shares of beneficial interest redeemed		216,104
Dividends payable		83,601
Advisory fee payable		50,372
Distribution fee payable		44,999
Administrative fee payable		29,643
Payable for variation margin on centrally cleared swaps		8,741
Trustees’ fees payable		4,667
Transfer Agent fee payable		2,255
Accrued expenses		59,640

Total liabilities		3,747,024

Net Assets	$	210,658,288

Composition of Net Assets
Shares of beneficial interest, at par	$	189,906
Additional paid-in capital		203,495,084
Distributable earnings		6,973,298

	$	210,658,288


Net Asset Value Per Share—unlimited shares authorized, $.01 par value
AB Virginia Portfolio	Net Assets		Shares Outstanding		Net Asset Value

Class A	$	133,346,875		12,019,270	$	11.09	*

Class C	$	20,539,720		1,856,213	$	11.07

Advisor Class	$	56,771,693		5,115,140	$	11.10

*	The maximum offering price per share for Class A shares was $11.43 which reflects a sales charge of 3.00%.

See notes to financial statements.



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STATEMENT OF OPERATIONS

Year Ended May 31, 2020


	AB Arizona			AB Massachusetts
Investment Income
Interest	$	4,065,654		$	7,460,219
Dividends – Affiliated issuers		22,761			41,373

Total income		4,088,415			7,501,592

Expenses
Advisory fee (see Note B)		529,847			956,578
Distribution fee – Class A		268,879			309,658
Distribution fee – Class B		20			141
Distribution fee – Class C		101,900			257,865
Transfer agency – Class A		39,098			40,852
Transfer agency – Class B		6			15
Transfer agency – Class C		3,829			9,154
Transfer agency – Advisor Class		– 0	–		20,717
Custodian		86,463			99,421
Administrative		75,239			74,518
Audit and tax		47,513			49,399
Legal		32,186			32,970
Trustees’ fees		19,701			20,407
Registration fees		17,459			24,065
Printing		12,994			21,925
Miscellaneous		14,626			24,081

Total expenses		1,249,760			1,941,766
Less: expenses waived and reimbursed by the Adviser (see Note B)		(253,847	)		(264,565	)

Net expenses		995,913			1,677,201

Net investment income		3,092,502			5,824,391

Realized and Unrealized Gain (Loss) on Investment Transactions
Net realized gain (loss) on:
Investment transactions		192,628			1,280,671
Swaps		(736,115	)		(2,666,726	)
Net change in unrealized appreciation/depreciation of:
Investments		(1,851,538	)		(3,947,404	)
Swaps		89,547			2,938,806

Net loss on investment transactions		(2,305,478	)		(2,394,653	)

Net Increase in Net Assets from Operations	$	787,024		$	3,429,738

See notes to financial statements.



abfunds.com		AB MUNICIPAL INCOME FUND II ^\| 113

STATEMENT OF OPERATIONS (continued)


	AB Minnesota			AB New Jersey
Investment Income
Interest	$	1,881,989		$	3,347,374
Dividends – Affiliated issuers		19,373			4,502

Total income		1,901,362			3,351,876

Expenses
Advisory fee (see Note B)		259,880			383,974
Distribution fee – Class A		130,805			190,772
Distribution fee – Class B		102			59
Distribution fee – Class C		54,189			90,131
Transfer agency – Class A		37,713			39,230
Transfer agency – Class B		13			16
Transfer agency – Class C		4,144			4,722
Custodian		76,511			80,714
Administrative		75,253			74,518
Audit and tax		49,399			49,399
Legal		32,016			32,022
Trustees’ fees		19,325			19,423
Printing		14,975			21,710
Registration fees		7,820			9,955
Miscellaneous		8,787			10,587

Total expenses before bank overdraft expense		770,932			1,007,232
Bank overdraft expense		– 0	–		13,925

Total expenses		770,932			1,021,157
Less: expenses waived and reimbursed by the Adviser (see Note B)		(240,711	)		(240,239	)

Net expenses		530,221			780,918

Net investment income		1,371,141			2,570,958

Realized and Unrealized Gain (Loss) on Investment Transactions
Net realized gain (loss) on:
Investment transactions		143,798			1,510,896
Swaps		(1,297,768	)		(269,161	)
Net change in unrealized appreciation/depreciation of:
Investments		(72,849	)		(3,748,269	)
Swaps		1,143,260			76,150

Net loss on investment transactions		(83,559	)		(2,430,384	)

Net Increase in Net Assets from Operations	$	1,287,582		$	140,574

See notes to financial statements.



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STATEMENT OF OPERATIONS (continued)


	AB Ohio			AB Pennsylvania
Investment Income
Interest	$	2,835,414		$	2,946,532
Dividends – Affiliated issuers		9,801			7,833

Total income		2,845,215			2,954,365

Expenses
Advisory fee (see Note B)		356,406			353,344
Distribution fee – Class A		180,370			183,600
Distribution fee – Class B		114			86
Distribution fee – Class C		70,420			50,722
Transfer agency – Class A		37,604			43,136
Transfer agency – Class B		12			20
Transfer agency – Class C		3,815			3,072
Custodian		81,309			81,019
Administrative		74,322			74,753
Audit and tax		49,399			47,513
Legal		31,959			31,969
Trustees’ fees		19,381			19,385
Printing		12,914			19,275
Registration fees		9,860			8,995
Miscellaneous		10,162			10,063

Total expenses before bank overdraft expense		938,047			926,952
Bank overdraft expense		9,157			3,485

Total expenses		947,204			930,437
Less: expenses waived and reimbursed by the Adviser (see Note B)		(252,261	)		(222,000	)

Net expenses		694,943			708,437

Net investment income		2,150,272			2,245,928

Realized and Unrealized Gain (Loss) on Investment Transactions
Net realized gain (loss) on:
Investment transactions		1,081,128			504,617
Swaps		(313,840	)		(287,054	)
Net change in unrealized appreciation/depreciation of:
Investments		(1,857,040	)		(1,112,540	)
Swaps		106,586			5,932

Net loss on investment transactions		(983,166	)		(889,045	)

Net Increase in Net Assets from Operations	$	1,167,106		$	1,356,883

See notes to financial statements.



abfunds.com		AB MUNICIPAL INCOME FUND II ^\| 115

STATEMENT OF OPERATIONS (continued)


	AB Virginia
Investment Income
Interest	$	7,169,336
Dividends – Affiliated issuers		60,154

Total income		7,229,490

Expenses
Advisory fee (see Note B)		950,934
Distribution fee – Class A		326,599
Distribution fee – Class B		202
Distribution fee – Class C		235,785
Transfer agency – Class A		46,222
Transfer agency – Class B		17
Transfer agency – Class C		8,706
Transfer agency – Advisor Class		20,179
Custodian		99,626
Administrative		74,753
Audit and tax		49,399
Legal		32,701
Printing		26,309
Registration fees		20,625
Trustees’ fees		20,437
Miscellaneous		20,915

Total expenses		1,933,409
Less: expenses waived and reimbursed by the Adviser (see Note B)		(208,355	)

Net expenses		1,725,054

Net investment income		5,504,436

Realized and Unrealized Loss on Investment Transactions
Net realized loss on:
Investment transactions		(6,258	)
Swaps		(438,549	)
Net change in unrealized appreciation/depreciation of:
Investments		(1,450,155	)
Swaps		(284,287	)

Net loss on investment transactions		(2,179,249	)

Net Increase in Net Assets from Operations	$	3,325,187

See notes to financial statements.



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STATEMENT OF CHANGES IN NET ASSETS


	AB Arizona
	Year Ended May 31, 2020			Year Ended May 31, 2019
Increase (Decrease) in Net Assets from Operations
Net investment income	$	3,092,502		$	3,232,464
Net realized gain (loss) on investment transactions		(543,487	)		52,573
Net change in unrealized appreciation/depreciation of investments		(1,761,991	)		2,312,429

Net increase in net assets from operations		787,024			5,597,466
Distributions to Shareholders
Class A		(2,861,529	)		(2,935,072	)
Class B		(39	)		(128	)
Class C		(195,527	)		(297,066	)
Transactions in Shares of Beneficial Interest
Net decrease		(949,815	)		(3,176,651	)

Total decrease		(3,219,886	)		(811,451	)
Net Assets
Beginning of period		117,470,007			118,281,458

End of period	$	114,250,121		$	117,470,007

See notes to financial statements.



abfunds.com		AB MUNICIPAL INCOME FUND II ^\| 117

STATEMENT OF CHANGES IN NET ASSETS (continued)


	AB Massachusetts
	Year Ended May 31, 2020			Year Ended May 31, 2019
Increase (Decrease) in Net Assets from Operations
Net investment income	$	5,824,391		$	6,240,031
Net realized loss on investment transactions		(1,386,055	)		(14,048	)
Net change in unrealized appreciation/depreciation of investments		(1,008,598	)		3,407,108

Net increase in net assets from operations		3,429,738			9,633,091
Distributions to Shareholders
Class A		(3,493,629	)		(3,870,706	)
Class B		(299	)		(1,076	)
Class C		(535,855	)		(721,707	)
Advisor Class		(1,929,414	)		(1,664,726	)
Transactions in Shares of Beneficial Interest
Net decrease		(12,361,266	)		(17,829,060	)

Total decrease		(14,890,725	)		(14,454,184	)
Net Assets
Beginning of period		214,247,230			228,701,414

End of period	$	199,356,505		$	214,247,230

See notes to financial statements.



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STATEMENT OF CHANGES IN NET ASSETS (continued)


	AB Minnesota
	Year Ended May 31, 2020			Year Ended May 31, 2019
Increase (Decrease) in Net Assets from Operations
Net investment income	$	1,371,141		$	1,578,698
Net realized loss on investment transactions		(1,153,970	)		(65,348	)
Net change in unrealized appreciation/depreciation of investments		1,070,411			1,215,967

Net increase in net assets from operations		1,287,582			2,729,317
Distributions to Shareholders
Class A		(1,351,062	)		(1,442,605	)
Class B		(183	)		(605	)
Class C		(98,815	)		(137,848	)
Transactions in Shares of Beneficial Interest
Net decrease		(3,087,935	)		(12,443,579	)

Total decrease		(3,250,413	)		(11,295,320	)
Net Assets
Beginning of period		57,895,428			69,190,748

End of period	$	54,645,015		$	57,895,428

See notes to financial statements.



abfunds.com		AB MUNICIPAL INCOME FUND II ^\| 119

STATEMENT OF CHANGES IN NET ASSETS (continued)


	AB New Jersey
	Year Ended May 31, 2020			Year Ended May 31, 2019
Increase (Decrease) in Net Assets from Operations
Net investment income	$	2,570,958		$	3,084,121
Net realized gain on investment transactions		1,241,735			858,864
Net change in unrealized appreciation/depreciation of investments		(3,672,119	)		1,008,252

Net increase in net assets from operations		140,574			4,951,237
Distributions to Shareholders
Class A		(2,348,582	)		(2,794,966	)
Class B		(137	)		(1,566	)
Class C		(209,511	)		(287,753	)
Transactions in Shares of Beneficial Interest
Net decrease		(13,497,976	)		(19,317,191	)

Total decrease		(15,915,632	)		(17,450,239	)
Net Assets
Beginning of period		90,252,764			107,703,003

End of period	$	74,337,132		$	90,252,764

See notes to financial statements.



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STATEMENT OF CHANGES IN NET ASSETS (continued)


	AB Ohio
	Year Ended May 31, 2020			Year Ended May 31, 2019
Increase (Decrease) in Net Assets from Operations
Net investment income	$	2,150,272		$	2,416,280
Net realized gain on investment transactions		767,288			758,574
Net change in unrealized appreciation/depreciation of investments		(1,750,454	)		709,325

Net increase in net assets from operations		1,167,106			3,884,179
Distributions to Shareholders
Class A		(1,986,190	)		(2,203,026	)
Class B		(227	)		(551	)
Class C		(140,940	)		(212,675	)
Transactions in Shares of Beneficial Interest
Net decrease		(10,346,060	)		(9,620,211	)

Total decrease		(11,306,311	)		(8,152,284	)
Net Assets
Beginning of period		83,607,659			91,759,943

End of period	$	72,301,348		$	83,607,659

See notes to financial statements.



abfunds.com		AB MUNICIPAL INCOME FUND II ^\| 121

STATEMENT OF CHANGES IN NET ASSETS (continued)


	AB Pennsylvania
	Year Ended May 31, 2020			Year Ended May 31, 2019
Increase (Decrease) in Net Assets from Operations
Net investment income	$	2,245,928		$	2,512,012
Net realized gain on investment transactions		217,563			224,731
Net change in unrealized appreciation/depreciation of investments		(1,106,608	)		1,223,362

Net increase in net assets from operations		1,356,883			3,960,105
Distributions to Shareholders
Class A		(2,118,177	)		(2,339,787	)
Class B		(182	)		(688	)
Class C		(108,080	)		(171,487	)
Transactions in Shares of Beneficial Interest
Net decrease		(9,601,710	)		(9,607,658	)

Total decrease		(10,471,266	)		(8,159,515	)
Net Assets
Beginning of period		81,227,511			89,387,026

End of period	$	70,756,245		$	81,227,511

See notes to financial statements.



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STATEMENT OF CHANGES IN NET ASSETS (continued)


	AB Virginia
	Year Ended May 31, 2020			Year Ended May 31, 2019
Increase (Decrease) in Net Assets from Operations
Net investment income	$	5,504,436		$	5,861,448
Net realized gain (loss) on investment transactions		(444,807	)		1,035,044
Net change in unrealized appreciation/depreciation of investments		(1,734,442	)		2,613,358

Net increase in net assets from operations		3,325,187			9,509,850
Distributions to Shareholders
Class A		(3,392,118	)		(3,829,344	)
Class B		(392	)		(1,129	)
Class C		(438,827	)		(668,118	)
Advisor Class		(1,623,602	)		(1,362,758	)
Transactions in Shares of Beneficial Interest
Net increase (decrease)		1,949,149			(9,306,045	)

Total decrease		(180,603	)		(5,657,544	)
Net Assets
Beginning of period		210,838,891			216,496,435

End of period	$	210,658,288		$	210,838,891

See notes to financial statements.



abfunds.com		AB MUNICIPAL INCOME FUND II ^\| 123

NOTES TO FINANCIAL STATEMENTS

May 31, 2020

NOTE A

Significant Accounting Policies

AB Municipal Income Fund II (the “Fund”) which is a Massachusetts Business Trust, is registered under the Investment Company Act of 1940, as a diversified, open-end management investment company. The Fund operates as a series company currently comprised of seven portfolios: AB Arizona Portfolio, AB Massachusetts Portfolio, AB Minnesota Portfolio, AB New Jersey Portfolio, AB Ohio Portfolio, AB Pennsylvania Portfolio and AB Virginia Portfolio (the “Portfolios”). Each series is considered to be a separate entity for financial reporting and tax purposes. Each Portfolio offers Class A and Class C shares. Class B shares, Class T shares and Class Z shares have been authorized but currently are not offered. AB Massachusetts Portfolio and AB Virginia Portfolio offer Advisor Class shares. Advisor Class shares for AB Arizona Portfolio, AB Minnesota Portfolio, AB New Jersey Portfolio, AB Ohio Portfolio and AB Pennsylvania Portfolio have been authorized but currently are not offered. Effective August 2, 2019, sales of Class B shares were suspended. On November 7, 2019, all remaining outstanding Class B shares of the Portfolios were converted to Class A shares. Class A shares are sold with a front-end sales charge of up to 3% for purchases up to $500,000; purchases of $500,000 or more are not subject to a sales charge. With respect to purchases of $500,000 or more, Class A shares redeemed within one year of purchase may be subject to a contingent deferred sales charge of 1%. Class C shares are subject to a contingent deferred sales charge of 1% on redemptions made within the first year after purchase, and 0% after the first year of purchase. Class C shares will automatically convert to Class A shares ten years after the end of the calendar month of purchase. All five classes of shares have identical voting, dividend, liquidation and other rights, except that the classes bear different distribution and transfer agency expenses. Each class has exclusive voting rights with respect to its distribution plan. The financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) which require management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements and amounts of income and expenses during the reporting period. Actual results could differ from those estimates. Each Portfolio is an investment company under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies. The following is a summary of significant accounting policies followed by the Portfolios.

1. Security Valuation

Portfolio securities are valued at their current market value determined on the basis of market quotations or, if market quotations are not readily



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NOTES TO FINANCIAL STATEMENTS (continued)

available or are deemed unreliable, at “fair value” as determined in accordance with procedures established by and under the general supervision of the Fund’s Board of Trustees (the “Board”).

In general, the market values of securities which are readily available and deemed reliable are determined as follows: securities listed on a national securities exchange (other than securities listed on the NASDAQ Stock Market, Inc. (“NASDAQ”)) or on a foreign securities exchange are valued at the last sale price at the close of the exchange or foreign securities exchange. If there has been no sale on such day, the securities are valued at the last traded price from the previous day. Securities listed on more than one exchange are valued by reference to the principal exchange on which the securities are traded; securities listed only on NASDAQ are valued in accordance with the NASDAQ Official Closing Price; listed or over the counter (“OTC”) market put or call options are valued at the mid level between the current bid and ask prices. If either a current bid or current ask price is unavailable, AllianceBernstein L.P. (the “Adviser”) will have discretion to determine the best valuation (e.g., last trade price in the case of listed options); open futures are valued using the closing settlement price or, in the absence of such a price, the most recent quoted bid price. If there are no quotations available for the day of valuation, the last available closing settlement price is used; U.S. Government securities and any other debt instruments having 60 days or less remaining until maturity are generally valued at market by an independent pricing vendor, if a market price is available. If a market price is not available, the securities are valued at amortized cost. This methodology is commonly used for short term securities that have an original maturity of 60 days or less, as well as short term securities that had an original term to maturity that exceeded 60 days. In instances when amortized cost is utilized, the Valuation Committee (the “Committee”) must reasonably conclude that the utilization of amortized cost is approximately the same as the fair value of the security. Such factors the Committee will consider include, but are not limited to, an impairment of the creditworthiness of the issuer or material changes in interest rates. Fixed-income securities, including mortgage-backed and asset-backed securities, may be valued on the basis of prices provided by a pricing service or at a price obtained from one or more of the major broker-dealers. In cases where broker-dealer quotes are obtained, the Adviser may establish procedures whereby changes in market yields or spreads are used to adjust, on a daily basis, a recently obtained quoted price on a security. Swaps and other derivatives are valued daily, primarily using independent pricing services, independent pricing models using market inputs, as well as third party broker-dealers or counterparties. Open end mutual funds are valued at the closing net asset value per share, while exchange traded funds are valued at the closing market price per share.



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NOTES TO FINANCIAL STATEMENTS (continued)

Securities for which market quotations are not readily available (including restricted securities) or are deemed unreliable are valued at fair value as deemed appropriate by the Adviser. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, analysis of the issuer’s financial statements or other available documents. In addition, the Portfolios may use fair value pricing for securities primarily traded in non-U.S. markets because most foreign markets close well before the Portfolios value their securities at 4:00 p.m., Eastern Time. The earlier close of these foreign markets gives rise to the possibility that significant events, including broad market moves, may have occurred in the interim and may materially affect the value of those securities. To account for this, the Portfolios generally value many of their foreign equity securities using fair value prices based on third party vendor modeling tools to the extent available.

2. Fair Value Measurements

In accordance with U.S. GAAP regarding fair value measurements, fair value is defined as the price that the Portfolios would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. U.S. GAAP establishes a framework for measuring fair value, and a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability (including those valued based on their market values as described in Note A.1 above). Inputs may be observable or unobservable and refer broadly to the assumptions that market participants would use in pricing the asset or liability. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Portfolios. Unobservable inputs reflect the Portfolios’ own assumptions about the assumptions that market participants would use in pricing the asset or liability based on the best information available in the circumstances. Each investment is assigned a level based upon the observability of the inputs which are significant to the overall valuation. The three-tier hierarchy of inputs is summarized 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 the Portfolios’ own assumptions in determining the fair value of investments)

The fair value of debt instruments, such as bonds, and over-the-counter derivatives is generally based on market price quotations, recently executed market transactions (where observable) or industry recognized modeling techniques and are generally classified as Level 2. Pricing vendor



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NOTES TO FINANCIAL STATEMENTS (continued)

inputs to Level 2 valuations may include quoted prices for similar investments in active markets, interest rate curves, coupon rates, currency rates, yield curves, option adjusted spreads, default rates, credit spreads and other unique security features in order to estimate the relevant cash flows which are then discounted to calculate fair values. If these inputs are unobservable and significant to the fair value, these investments will be classified as Level 3.

Other fixed income investments, including non-U.S. government and corporate debt, are generally valued using quoted market prices, if available, which are typically impacted by current interest rates, maturity dates and any perceived credit risk of the issuer. Additionally, in the absence of quoted market prices, these inputs are used by pricing vendors to derive a valuation based upon industry or proprietary models which incorporate issuer specific data with relevant yield/spread comparisons with more widely quoted bonds with similar key characteristics. Those investments for which there are observable inputs are classified as Level 2. Where the inputs are not observable, the investments are classified as Level 3.

The following tables summarize the valuation of the Portfolios’ investments by the above fair value hierarchy levels as of May 31, 2020:

AB Arizona Portfolio

Investments in
Securities:

Level 1

Level 2

Level 3

Total

Assets:

Long-Term Municipal Bonds

– 0

–

108,574,035

– 0

–

108,574,035

Short-Term Investments

3,017,561

– 0

–

– 0

–

3,017,561

Total Investments in Securities

3,017,561

108,574,035

– 0

–

111,591,596

Other Financial Instruments^(a):

Assets:

Centrally Cleared Inflation (CPI) Swaps

– 0

–

85,323

– 0

–

85,323

^(b)

Centrally Cleared Interest Rate Swaps

– 0

–

532,767

– 0

–

532,767

^(b)

Liabilities:

Centrally Cleared Inflation (CPI) Swaps

– 0

–

(255,403

)

– 0

–

(255,403

)^(b)

Inflation (CPI) Swaps

– 0

–

(381,760

)

– 0

–

(381,760

)

Interest Rate Swaps

– 0

–

(184,948

)

– 0

–

(184,948

)

Total

3,017,561

108,370,014

– 0

–

111,387,575

^(c)



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NOTES TO FINANCIAL STATEMENTS (continued)

AB Massachusetts Portfolio

Investments in
Securities:

Level 1

Level 2

Level 3

Total

Assets:

Long-Term Municipal Bonds

– 0

–

185,984,690

– 0

–

185,984,690

Short-Term Investments

8,788,584

– 0

–

– 0

–

8,788,584

Total Investments in Securities

8,788,584

185,984,690

– 0

–

194,773,274

Other Financial Instruments^(a):

Assets:

Centrally Cleared Inflation (CPI) Swaps

– 0

–

158,286

– 0

–

158,286

^(b)

Centrally Cleared Interest Rate Swaps

– 0

–

14,820,709

– 0

–

14,820,709

^(b)

Liabilities:

Centrally Cleared Inflation (CPI) Swaps

– 0

–

(478,815

)

– 0

–

(478,815

)^(b)

Centrally Cleared Interest Rate Swaps

– 0

–

(9,838,850

)

– 0

–

(9,838,850

)^(b)

Inflation (CPI) Swaps

– 0

–

(706,183

)

– 0

–

(706,183

)

Interest Rate Swaps

– 0

–

(334,009

)

– 0

–

(334,009

)

Total

8,788,584

189,605,828

– 0

–

198,394,412

^(d)

AB Minnesota Portfolio

Investments in
Securities:

Level 1

Level 2

Level 3

Total

Assets:

Long-Term Municipal Bonds

– 0

–

50,866,369

–0

–

50,866,369

Short-Term Investments

3,001,212

– 0

–

– 0

–

3,001,212

Total Investments in Securities

3,001,212

50,866,369

– 0

–

53,867,581

Other Financial Instruments^(a):

Assets:

Centrally Cleared Inflation (CPI) Swaps

– 0

–

42,662

– 0

–

42,662

^(b)

Centrally Cleared Interest Rate Swaps

– 0

–

9,234,428

– 0

–

9,234,428

^(b)

Liabilities:

Centrally Cleared Inflation (CPI) Swaps

– 0

–

(124,585

)

– 0

–

(124,585

)^(b)

Centrally Cleared Interest Rate Swaps

– 0

–

(7,158,273

)

– 0

–

(7,158,273

)^(b)

Inflation (CPI) Swaps

– 0

–

(189,987

)

– 0

–

(189,987

)

Interest Rate Swaps

– 0

–

(92,197

)

– 0

–

(92,197

)

Total

3,001,212

52,578,417

– 0

–

55,579,629

^(e)



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AB New Jersey Portfolio

Investments in
Securities:

Level 1

Level 2

Level 3

Total

Assets:

Long-Term Municipal Bonds

– 0

–

73,416,273

– 0

–

73,416,273

Total Investments in Securities

– 0

–

73,416,273

– 0

–

73,416,273

Other Financial Instruments^(a):

Assets:

Centrally Cleared Inflation (CPI) Swaps

– 0

–

65,388

– 0

–

65,388

^(b)

Centrally Cleared Interest Rate Swaps

– 0

–

430,370

– 0

–

430,370

^(b)

Liabilities:

Centrally Cleared Inflation (CPI) Swaps

– 0

–

(176,254

)

– 0

–

(176,254

)^(b)

Inflation (CPI) Swaps

– 0

–

(313,319

)

– 0

–

(313,319

)

Interest Rate Swaps

– 0

–

(136,364

)

– 0

–

(136,364

)

Total

– 0

–

73,286,094

– 0

–

73,286,094

^(f)

AB Ohio Portfolio

Investments in
Securities:

Level 1

Level 2

Level 3

Total

Assets:

Long-Term Municipal Bonds

– 0

–

71,073,718

– 0

–

71,073,718

Short-Term Investments

137,003

– 0

–

– 0

–

137,003

Total Investments in Securities

137,003

71,073,718

– 0

–

71,210,721

Other Financial Instruments^(a):

Assets:

Centrally Cleared Inflation (CPI) Swaps

– 0

–

60,603

– 0

–

60,603

^(b)

Centrally Cleared Interest Rate Swaps

– 0

–

422,512

– 0

–

422,512

^(b)

Liabilities:

Centrally Cleared Inflation (CPI) Swaps

– 0

–

(140,622

)

– 0

–

(140,622

)^(b)

Inflation (CPI) Swaps

– 0

–

(279,379

)

– 0

–

(279,379

)

Interest Rate Swaps

– 0

–

(129,739

)

– 0

–

(129,739

)

Total

137,003

71,007,093

– 0

–

71,144,096

^(g)



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NOTES TO FINANCIAL STATEMENTS (continued)

AB Pennsylvania Portfolio

Investments in
Securities:

Level 1

Level 2

Level 3

Total

Assets:

Long-Term Municipal Bonds

– 0

–

68,748,236

– 0

–

68,748,236

Short-Term Investments

761,381

– 0

–

– 0

–

761,381

Total Investments in Securities

761,381

68,748,236

– 0

–

69,509,617

Other Financial Instruments^(a):

Assets:

Centrally Cleared Inflation (CPI) Swaps

– 0

–

58,211

– 0

–

58,211

^(b)

Centrally Cleared Interest Rate Swaps

– 0

–

302,014

– 0

–

302,014

^(b)

Liabilities:

Centrally Cleared Inflation (CPI) Swaps

– 0

–

(164,615

)

– 0

–

(164,615

)^(b)

Inflation (CPI) Swaps

– 0

–

(273,696

)

– 0

–

(273,696

)

Interest Rate Swaps

– 0

–

(125,875

)

– 0

–

(125,875

)

Total

761,381

68,544,275

– 0

–

69,305,656

^(h)

AB Virginia Portfolio

Investments in
Securities:

Level 1

Level 2

Level 3

Total

Assets:

Long-Term Municipal Bonds

– 0

–

203,163,579

– 0

–

203,163,579

Short-Term Municipal Notes

– 0

–

3,215,000

– 0

–

3,215,000

Short-Term Investments

2,954,571

– 0

–

– 0

–

2,954,571

Total Investments in Securities

2,954,571

206,378,579

– 0

–

209,333,150

Other Financial Instruments^(a):

Assets:

Centrally Cleared Inflation (CPI) Swaps

– 0

–

149,116

– 0

–

149,116

^(b)

Centrally Cleared Interest Rate Swaps

– 0

–

625,656

– 0

–

625,656

^(b)

Liabilities:

Centrally Cleared Inflation (CPI) Swaps

– 0

–

(481,271

)

– 0

–

(481,271

)^(b)

Inflation (CPI) Swaps

– 0

–

(678,817

)

– 0

–

(678,817

)

Interest Rate Swaps

– 0

–

(327,384

)

– 0

–

(327,384

)

Total

2,954,571

205,665,879

– 0

–

208,620,450

⁽ⁱ⁾

(a)

Other financial instruments are derivative instruments, such as futures, forwards and swaps, which are valued at the unrealized appreciation/(depreciation) on the instrument. Other financial instruments may also include swaps with upfront premiums, options written and swaptions written which are valued at market value.



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(b)

Only variation margin receivable/(payable) at period end is reported within the statement of assets and liabilities. This amount reflects cumulative unrealized appreciation/(depreciation) on futures and centrally cleared swaps as reported in the portfolio of investments. Where applicable, centrally cleared swaps with upfront premiums are presented here at market value.

(c)	The amount of $5,583,184 for Long-Term Municipal Bonds was transferred out of Level 3 into Level 2 as improved transparency of price inputs received from pricing vendors has increased the observability during the reporting period.

(d)	The amount of $4,488,206 for Long-Term Municipal Bonds was transferred out of Level 3 into Level 2 as improved transparency of price inputs received from pricing vendors has increased the observability during the reporting period.

(e)	The amount of $722,856 for Long-Term Municipal Bonds was transferred out of Level 3 into Level 2 as improved transparency of price inputs received from pricing vendors has increased the observability during the reporting period.

(f)	The amount of $4,052,165 for Long-Term Municipal Bonds was transferred out of Level 3 into Level 2 as improved transparency of price inputs received from pricing vendors has increased the observability during the reporting period.

(g)	The amount of $4,448,962 for Long-Term Municipal Bonds was transferred out of Level 3 into Level 2 as improved transparency of price inputs received from pricing vendors has increased the observability during the reporting period.

(h)	The amount of $4,854,808 for Long-Term Municipal Bonds was transferred out of Level 3 into Level 2 as improved transparency of price inputs received from pricing vendors has increased the observability during the reporting period.

(i)	The amount of $17,587,086 for Long-Term Municipal Bonds was transferred out of Level 3 into Level 2 as improved transparency of price inputs received from pricing vendors has increased the observability during the reporting period.

3. Taxes

It is each Portfolio’s policy to meet the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its investment company taxable income and net realized gains, if any, to shareholders. Therefore, no provisions for federal income or excise taxes are required.

In accordance with U.S. GAAP requirements regarding accounting for uncertainties in income taxes, management has analyzed the Portfolios’ tax positions taken or expected to be taken on federal and state income tax returns for all open tax years (the current and the prior three tax years) and has concluded that no provision for income tax is required in the Portfolios’ financial statements.

4. Investment Income and Investment Transactions

Dividend income is recorded on the ex-dividend date or as soon as the Portfolios are informed of the dividend. Interest income is accrued daily. Investment transactions are accounted for on the date the securities are purchased or sold. Investment gains or losses are determined on the identified cost basis. The Portfolios amortize premiums and accrete original issue and market discounts as adjustments to interest income.



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5. Class Allocations

All income earned and expenses incurred by the Portfolios are borne on a pro-rata basis by each settled class of shares, based on the proportionate interest in each Portfolio represented by the net assets of such class, except for class specific expenses which are allocated to the respective class. Expenses of the Fund are charged proportionately to the Portfolios or based on other appropriate methods. Realized and unrealized gains and losses are allocated among the various share classes based on respective net assets.

6. Dividends and Distributions

Dividends and distributions to shareholders, if any, are recorded on the ex-dividend date. Income dividends and capital gains distributions are determined in accordance with federal tax regulations and may differ from those determined in accordance with U.S. GAAP. To the extent these differences are permanent, such amounts are reclassified within the capital accounts based on their federal tax basis treatment; temporary differences do not require such reclassification.

NOTE B

Advisory Fee and Other Transactions with Affiliates

Under the terms of the investment advisory agreement, each Portfolio pays the Adviser an advisory fee at an annual rate of .45% of the first $2.5 billion, .40% of the next $2.5 billion and .35% in excess of $5 billion, of each Portfolio’s average daily net assets. Such fee is accrued daily and paid monthly.

The Adviser has agreed to waive its fees and bear certain expenses to the extent necessary to limit the total portfolio operating expenses as a percentage of daily average net assets on an annual basis (the “Expense Caps”) as follows:


Portfolio	Class A			Class C			Advisor Class
AB Arizona		.78	%		1.53	%		N/A
AB Massachusetts		.77	%		1.52	%		.52	%
AB Minnesota		.85	%		1.60	%		N/A
AB New Jersey		.82	%		1.57	%		N/A
AB Ohio		.80	%		1.55	%		N/A
AB Pennsylvania		.85	%		1.60	%		N/A
AB Virginia		.80	%		1.55	%		.55	%

The Expense Caps will extend through September 30, 2020 and then may be extended by the Adviser for additional one year terms. For the year ended May 31, 2020, such reimbursements/waivers amounted to $252,101, $261,159, $239,330, $239,904, $251,536, $221,419 and



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$203,714 for AB Arizona Portfolio, AB Massachusetts Portfolio, AB Minnesota Portfolio, AB New Jersey Portfolio, AB Ohio Portfolio, AB Pennsylvania Portfolio and AB Virginia Portfolio, respectively.

Pursuant to the investment advisory agreement, each Portfolio may reimburse the Adviser for certain legal and accounting services provided to each Portfolio by the Adviser. For the year ended May 31, 2020, the reimbursement for such services amounted to $75,239, $74,518, $75,253, $74,518, $74,322, $74,753 and $74,753 for AB Arizona Portfolio, AB Massachusetts Portfolio, AB Minnesota Portfolio, AB New Jersey Portfolio, AB Ohio Portfolio, AB Pennsylvania Portfolio and AB Virginia Portfolio, respectively.

The Portfolios compensate AllianceBernstein Investor Services, Inc. (“ABIS”), a wholly-owned subsidiary of the Adviser, under a Transfer Agency Agreement for providing personnel and facilities to perform transfer agency services for the Portfolios. ABIS may make payments to intermediaries that provide omnibus account services, sub-accounting services and/or networking services. For the year ended May 31, 2020, such compensation retained by ABIS amounted to: $18,061, $22,845, $18,275, $18,061, $18,073, $17,998 and $23,801 for AB Arizona Portfolio, AB Massachusetts Portfolio, AB Minnesota Portfolio, AB New Jersey Portfolio, AB Ohio Portfolio, AB Pennsylvania Portfolio and AB Virginia Portfolio, respectively.

AllianceBernstein Investments, Inc. (the “Distributor”), a wholly-owned subsidiary of the Adviser, serves as the distributor of the Portfolios’ shares. The Distributor has advised the Portfolios that it has retained front-end sales charges from the sale of Class A shares and received contingent deferred sales charges imposed upon redemptions by shareholders of Class A and Class C shares for each Portfolio for the year ended May 31, 2020, as follows:

Front-End Sales
Charges

Contingent Deferred Sales
Charges

Portfolio

Class A

Class C

AB Arizona

– 0

–

5,132

162

AB Massachusetts

– 0

–

12,995

208

AB Minnesota

– 0

–

AB New Jersey

– 0

–

1,375

AB Ohio

– 0

–

598

AB Pennsylvania

324

– 0

–

214

AB Virginia

– 0

–

4,820

410

The Portfolios may invest in AB Government Money Market Portfolio (the “Government Money Market Portfolio”) which has a contractual annual advisory fee rate of .20% of the portfolio’s average daily net assets and



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NOTES TO FINANCIAL STATEMENTS (continued)

bears its own expenses. The Adviser has contractually agreed to waive .10% of the advisory fee of Government Money Market Portfolio (resulting in a net advisory fee of .10%) until August 31, 2020. In connection with the investment by the Portfolios in Government Money Market Portfolio, the Adviser has contractually agreed to waive its advisory fee from the Portfolios in an amount equal to each Portfolio’s pro rata share of the effective advisory fee of Government Money Market Portfolio, as borne indirectly by the Portfolios as an acquired fund fee and expense. For the year ended May 31, 2020, such waiver amounted to:


Portfolio	Amount		Portfolio	Amount
AB Arizona	$	1,746	AB Ohio	$	725
AB Massachusetts		3,406	AB Pennsylvania		581
AB Minnesota		1,381	AB Virginia		4,641
AB New Jersey		335

A summary of the Portfolios’ transactions in the Government Money Market Portfolio for the year ended May 31, 2020 is as follows:


Portfolio	Market Value 5/31/19 (000)			Purchases at Cost (000)		Sales Proceeds (000)		Market Value 5/31/20 (000)			Dividend Income (000)
AB Arizona	$	2,399		$	25,509	$	24,890	$	3,018		$	23
AB Massachusetts		630			52,693		44,534		8,789			41
AB Minnesota		766			16,397		14,162		3,001			19
AB New Jersey		– 0	–		10,987		10,987		– 0	–		5
AB Ohio		204			17,604		17,671		137			10
AB Pennsylvania		– 0	–		13,964		13,203		761			8
AB Virginia		8,467			51,149		56,661		2,955			60

During the second quarter of 2018, AXA S.A. (“AXA”), a French holding company for the AXA Group, completed the sale of a minority stake in its subsidiary, AXA Equitable Holdings, Inc. (now named Equitable Holdings, Inc.) (“Equitable”), through an initial public offering. Equitable is the holding company for a diverse group of financial services companies, including an approximately 64.9% economic interest in the Adviser and a 100% interest in AllianceBernstein Corporation, the general partner of the Adviser. Since the initial sale, AXA has completed additional offerings, most recently during the fourth quarter of 2019. As a result, AXA currently owns less than 10% of the outstanding shares of common stock of Equitable, and no longer owns a controlling interest in Equitable. AXA previously announced its intention to sell its entire interest in Equitable over time, subject to market conditions and other factors (the “Plan”). Most of AXA’s remaining Equitable shares are to be delivered on redemption of AXA bonds mandatorily exchangeable into Equitable shares and maturing in May 2021. AXA retains sole discretion to determine the timing of any future sales of its remaining shares of Equitable common stock.



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Sales under the Plan that were completed on November 13, 2019 resulted in the indirect transfer of a “controlling block” of voting securities of the Adviser (a “Change of Control Event”) and may have been deemed to have been an “assignment” causing a termination of the Portfolios’ investment advisory and administration agreements. In order to ensure that investment advisory and administration services could continue uninterrupted in the event of a Change of Control Event, the Board previously approved new investment advisory and administration agreements with the Adviser, and shareholders of the Portfolios subsequently approved the new investment advisory agreement. These agreements became effective on November 13, 2019.

NOTE C

Distribution Services Agreement

The Portfolios have adopted a Distribution Services Agreement (the “Agreement”) pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the Agreement, the Portfolios pay distribution and servicing fees to the Distributor at an annual rate of up to .30% of the Portfolios’ average daily net assets attributable to Class A shares and 1% of the Portfolios’ average daily net assets attributable to both Class B and Class C shares. Payments under the Agreement in respect of Class A shares are currently limited to an annual rate of .25% of Class A shares’ average daily net assets. There are no distribution and servicing fees on the Advisor Class shares. The fees are accrued daily and paid monthly. The Agreement provides that the Distributor will use such payments in their entirety for distribution assistance and promotional activities. Since the commencement of the Portfolios’ operations, the distributor has incurred expenses in excess of the distribution costs reimbursed by each Portfolio as follows:


Portfolio	Class C
AB Arizona	$	2,287,995
AB Massachusetts		4,164,796
AB Minnesota		2,888,915
AB New Jersey		3,843,917
AB Ohio		4,092,367
AB Pennsylvania		3,608,585
AB Virginia		3,539,573

While such costs may be recovered from the Portfolios in future periods so long as the Agreement is in effect, the rate of the distribution and servicing fees payable under the Agreement may not be increased without a shareholder vote. In accordance with the Agreement, there is no provision for recovery of unreimbursed distribution costs incurred by the Distributor beyond the current fiscal year for Class A shares. The Agreement also provides that the Adviser may use its own resources to finance the distribution of the Portfolios’ shares.



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NOTES TO FINANCIAL STATEMENTS (continued)

NOTE D

Investment Transactions

Purchases and sales of investment securities (excluding short-term investments) for the year ended May 31, 2020, were as follows:

Purchases

Sales

Portfolio

Investments

Government
Securities

Investments

Government
Securities

AB Arizona

14,877,113

– 0

–

16,940,944

– 0

–

AB Massachusetts

26,003,163

– 0

–

52,509,109

– 0

–

AB Minnesota

5,683,432

– 0

–

10,819,824

– 0

–

AB New Jersey

8,224,486

– 0

–

21,960,947

– 0

–

AB Ohio

15,066,807

– 0

–

24,687,702

– 0

–

AB Pennsylvania

8,226,925

– 0

–

19,030,932

– 0

–

AB Virginia

35,758,187

– 0

–

32,319,606

– 0

–

The cost of investments for federal income tax purposes, gross unrealized appreciation and unrealized depreciation are as follows:


			Gross Unrealized					Net Unrealized Appreciation
Portfolio	Cost		Appreciation		(Depreciation)			Net Unrealized Appreciation
AB Arizona	$	107,683,248	$	6,265,771	$	(2,588,621	)	$	3,677,150
AB Massachusetts		187,787,064		23,761,469		(13,197,929	)		10,563,540
AB Minnesota		50,926,137		12,496,326		(7,850,128	)		4,646,198
AB New Jersey		70,692,916		3,970,330		(1,418,217	)		2,552,113
AB Ohio		68,957,119		3,685,566		(1,581,556	)		2,104,010
AB Pennsylvania		66,181,838		4,434,226		(1,369,711	)		3,064,515
AB Virginia		200,339,440		11,852,126		(3,626,229	)		8,225,897

1. Derivative Financial Instruments

Each Portfolio may use derivatives in an effort to earn income and enhance returns, to replace more traditional direct investments, to obtain exposure to otherwise inaccessible markets (collectively, “investment purposes”), or to hedge or adjust the risk profile of its portfolio.

The principal type of derivative utilized by the Portfolios, as well as the methods in which they may be used are:

•

Swaps

Each Portfolio may enter into swaps to hedge its exposure to interest rates or credit risk. A swap is an agreement that obligates two parties to exchange a series of cash flows at specified intervals based upon or calculated by reference to changes in specified prices or rates for a specified amount of an underlying asset. The payment flows are usually netted against each other, with the difference being paid by one party to the other. In addition, collateral may be pledged or received by the Portfolios in accordance with the terms of the



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respective swaps to provide value and recourse to the Portfolios or their counterparties in the event of default, bankruptcy or insolvency by one of the parties to the swap.

Risks may arise as a result of the failure of the counterparty to the swap to comply with the terms of the swap. The loss incurred by the failure of a counterparty is generally limited to the net interim payment to be received by the Portfolio, and/or the termination value at the end of the contract. Therefore, the Portfolio considers the creditworthiness of each counterparty to a swap in evaluating potential counterparty risk. This risk is mitigated by having a netting arrangement between the Portfolio and the counterparty and by the posting of collateral by the counterparty to the Portfolio to cover the Portfolios’ exposure to the counterparty. Additionally, risks may arise from unanticipated movements in interest rates or in the value of the underlying securities. The Portfolio accrues for the interim payments on swaps on a daily basis, with the net amount recorded within unrealized appreciation/depreciation of swaps on the statement of assets and liabilities, where applicable. Once the interim payments are settled in cash, the net amount is recorded as realized gain/(loss) on swaps on the statement of operations, in addition to any realized gain/(loss) recorded upon the termination of swaps. Upfront premiums paid or received for OTC swaps are recognized as cost or proceeds on the statement of assets and liabilities and are amortized on a straight line basis over the life of the contract. Amortized upfront premiums are included in net realized gain/(loss) from swaps on the statement of operations. Fluctuations in the value of swaps are recorded as a component of net change in unrealized appreciation/depreciation of swaps on the statement of operations.

Certain standardized swaps, including certain interest rate swaps and credit default swaps, are (or soon will be) subject to mandatory central clearing. Cleared swaps are transacted through futures commission merchants (“FCMs”) that are members of central clearinghouses, with the clearinghouse serving as central counterparty, similar to transactions in futures contracts. Centralized clearing will be required for additional categories of swaps on a phased-in basis based on requirements published by the Securities and Exchange Commission and Commodity Futures Trading Commission.

At the time the Portfolios enter into a centrally cleared swap, each Portfolio deposits and maintains as collateral an initial margin with the broker, as required by the clearinghouse on which the transaction is effected. Such amount is shown as cash collateral due from broker on the statement of assets and liabilities. Pursuant to the contract, the Portfolios agree to receive from or pay to the broker an amount of



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NOTES TO FINANCIAL STATEMENTS (continued)

cash equal to the daily fluctuation in the value of the contract. Such receipts or payments are known as variation margin and are recorded by the Portfolios as unrealized gains or losses. Risks may arise from the potential inability of a counterparty to meet the terms of the contract. The credit/counterparty risk for centrally cleared swaps is generally less than non-centrally cleared swaps, since the clearinghouse, which is the issuer or counterparty to each centrally cleared swap, has robust risk mitigation standards, including the requirement to provide initial and variation margin. When the contract is closed, the Portfolios record a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the time it was closed.

Interest Rate Swaps:

Each Portfolio is subject to interest rate risk exposure in the normal course of pursuing its investment objectives. Because the Portfolios hold fixed rate bonds, the value of these bonds may decrease if interest rates rise. To help hedge against this risk and to maintain its ability to generate income at prevailing market rates, the Portfolios may enter into interest rate swaps. Interest rate swaps are agreements between two parties to exchange cash flows based on a notional amount. The Portfolios may elect to pay a fixed rate and receive a floating rate, or, receive a fixed rate and pay a floating rate on a notional amount.

In addition, the Portfolios may also enter into interest rate swap transactions to preserve a return or spread on a particular investment or portion of its portfolio, or protecting against an increase in the price of securities the Portfolios anticipate purchasing at a later date. Interest rate swaps involve the exchange by a Portfolio with another party of their respective commitments to pay or receive interest (e.g., an exchange of floating rate payments for fixed rate payments) computed based on a contractually-based principal (or “notional”) amount. Interest rate swaps are entered into on a net basis (i.e., the two payment streams are netted out, with the Portfolios receiving or paying, as the case may be, only the net amount of the two payments).

During the year ended May 31, 2020, the Portfolios held interest rate swaps for hedging purposes.

Inflation (CPI) Swaps:

Inflation swap agreements are contracts in which one party agrees to pay the cumulative percentage increase in a price index (the Consumer Price Index with respect to CPI swaps) over the term of the swap (with some lag on the inflation index), and the other pays a compounded fixed rate. Inflation swaps may be used to protect the



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net asset value, or NAV, of a Portfolio against an unexpected change in the rate of inflation measured by an inflation index since the value of these agreements is expected to increase if there are unexpected inflation increases.

During the year ended May 31, 2020, the Portfolios held inflation (CPI) swaps for hedging purposes.

The Portfolios typically enter into International Swaps and Derivatives Association, Inc. Master Agreements (“ISDA Master Agreement”) with its OTC derivative contract counterparties in order to, among other things, reduce its credit risk to OTC counterparties. ISDA Master Agreements include provisions for general obligations, representations, collateral and events of default or termination. Under an ISDA Master Agreement, the Portfolios typically may offset with the OTC counterparty certain derivative financial instruments’ payables and/or receivables with collateral held and/or posted and create one single net payment (close-out netting) in the event of default or termination. In the event of a default by an OTC counterparty, the return of collateral with market value in excess of the Portfolios’ net liability, held by the defaulting party, may be delayed or denied.

The Portfolios’ ISDA Master Agreements may contain provisions for early termination of OTC derivative transactions in the event the net assets of the Portfolios decline below specific levels (“net asset contingent features”). If these levels are triggered, the Portfolios’ OTC counterparty has the right to terminate such transaction and require the Portfolios to pay or receive a settlement amount in connection with the terminated transaction. If OTC derivatives were held at period end, please refer to netting arrangements by the OTC counterparty tables below for additional details.



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NOTES TO FINANCIAL STATEMENTS (continued)

During the year ended May 31, 2020, the Portfolios had entered into the following derivatives:

AB Arizona Portfolio

Asset Derivatives

Liability Derivatives

Derivative Type

Statement of
Assets and
Liabilities
Location

Fair Value

Statement of
Assets and
Liabilities
Location

Fair Value

Interest rate contracts

Receivable/Payable for variation margin on centrally cleared swaps

618,090

Receivable/Payable for variation margin on centrally cleared swaps

255,403

Interest rate contracts

Unrealized depreciation on interest rate swaps

184,948

Interest rate contracts

Unrealized depreciation on inflation swaps

381,760

Total

618,090

822,111

*	Only variation margin receivable/payable at period end is reported within the statement of assets and liabilities. This amount reflects cumulative unrealized appreciation/(depreciation) on futures and centrally cleared swaps as reported in the portfolio of investments.


Derivative Type	Location of Gain or (Loss) on Derivatives Within Statement of Operations	Realized Gain or (Loss) on Derivatives			Change in Unrealized Appreciation or (Depreciation)
Interest rate contracts	Net realized gain (loss) on swaps; Net change in unrealized appreciation/depreciation of swaps	$	(736,115	)	$	89,547

Total		$	(736,115	)	$	89,547



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NOTES TO FINANCIAL STATEMENTS (continued)

AB Massachusetts Portfolio

Asset Derivatives

Liability Derivatives

Derivative Type

Statement of
Assets and
Liabilities
Location

Fair Value

Statement of
Assets and
Liabilities
Location

Fair Value

Interest rate contracts

Receivable/Payable for variation margin on centrally cleared swaps

14,979,116

Receivable/Payable for variation margin on centrally cleared swaps

10,317,665

Interest rate contracts

Unrealized depreciation on interest rate swaps

334,009

Interest rate contracts

Unrealized depreciation on inflation swaps

706,183

Total

14,979,116

11,357,857

*	Only variation margin receivable/payable at period end is reported within the statement of assets and liabilities. This amount reflects cumulative unrealized appreciation/(depreciation) on futures and centrally cleared swaps as reported in the portfolio of investments.


Derivative Type	Location of Gain or (Loss) on Derivatives Within Statement of Operations	Realized Gain or (Loss) on Derivatives			Change in Unrealized Appreciation or (Depreciation)
Interest rate contracts	Net realized gain (loss) on swaps; Net change in unrealized appreciation/depreciation of swaps	$	(2,666,726	)	$	2,938,806

Total		$	(2,666,726	)	$	2,938,806



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NOTES TO FINANCIAL STATEMENTS (continued)

AB Minnesota Portfolio

Asset Derivatives

Liability Derivatives

Derivative Type

Statement of
Assets and
Liabilities
Location

Fair Value

Statement of
Assets and
Liabilities
Location

Fair Value

Interest rate contracts

Receivable/Payable for variation margin on centrally cleared swaps

9,277,090

Receivable/Payable for variation margin on centrally cleared swaps

7,282,858

Interest rate contracts

Unrealized depreciation on interest rate swaps

92,197

Interest rate contracts

Unrealized depreciation on inflation swaps

189,987

Total

9,277,090

7,565,042

*	Only variation margin receivable/payable at period end is reported within the statement of assets and liabilities. This amount reflects cumulative unrealized appreciation/(depreciation) on futures and centrally cleared swaps as reported in the portfolio of investments.


Derivative Type	Location of Gain or (Loss) on Derivatives Within Statement of Operations	Realized Gain or (Loss) on Derivatives			Change in Unrealized Appreciation or (Depreciation)
Interest rate contracts	Net realized gain (loss) on swaps; Net change in unrealized appreciation/depreciation of swaps	$	(1,297,768	)	$	1,143,260

Total		$	(1,297,768	)	$	1,143,260



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NOTES TO FINANCIAL STATEMENTS (continued)

AB New Jersey Portfolio

Asset Derivatives

Liability Derivatives

Derivative Type

Statement of
Assets and
Liabilities
Location

Fair Value

Statement of
Assets and
Liabilities
Location

Fair Value

Interest rate contracts

Receivable/Payable for variation margin on centrally cleared swaps

495,758

Receivable/Payable for variation margin on centrally cleared swaps

176,254

Interest rate contracts

Unrealized depreciation on interest rate swaps

136,364

Interest rate contracts

Unrealized depreciation on inflation swaps

313,319

Total

495,758

625,937

*	Only variation margin receivable/payable at period end is reported within the statement of assets and liabilities. This amount reflects cumulative unrealized appreciation/(depreciation) on futures and centrally cleared swaps as reported in the portfolio of investments.


Derivative Type	Location of Gain or (Loss) on Derivatives Within Statement of Operations	Realized Gain or (Loss) on Derivatives			Change in Unrealized Appreciation or (Depreciation)
Interest rate contracts	Net realized gain (loss) on swaps; Net change in unrealized appreciation/depreciation of swaps	$	(269,161	)	$	76,150

Total		$	(269,161	)	$	76,150



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NOTES TO FINANCIAL STATEMENTS (continued)

AB Ohio Portfolio

Asset Derivatives

Liability Derivatives

Derivative Type

Statement of
Assets and
Liabilities
Location

Fair Value

Statement of
Assets and
Liabilities
Location

Fair Value

Interest rate contracts

Receivable/Payable for variation margin on centrally cleared swaps

483,115

Receivable/Payable for variation margin on centrally cleared swaps

140,622

Interest rate contracts

Unrealized depreciation on interest rate swaps

129,739

Interest rate contracts

Unrealized depreciation on inflation swaps

279,379

Total

483,115

549,740

*	Only variation margin receivable/payable at period end is reported within the statement of assets and liabilities. This amount reflects cumulative unrealized appreciation/(depreciation) on futures and centrally cleared swaps as reported in the portfolio of investments.


Derivative Type	Location of Gain or (Loss) on Derivatives Within Statement of Operations	Realized Gain or (Loss) on Derivatives			Change in Unrealized Appreciation or (Depreciation)
Interest rate contracts	Net realized gain (loss) on swaps; Net change in unrealized appreciation/depreciation of swaps	$	(313,840	)	$	106,586

Total		$	(313,840	)	$	106,586



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NOTES TO FINANCIAL STATEMENTS (continued)

AB Pennsylvania Portfolio

Asset Derivatives

Liability Derivatives

Derivative Type

Statement of
Assets and
Liabilities
Location

Fair Value

Statement of
Assets and
Liabilities
Location

Fair Value

Interest rate contracts

Receivable/Payable for variation margin on centrally cleared swaps

360,225

Receivable/Payable for variation margin on centrally cleared swaps

164,615

Interest rate contracts

Unrealized depreciation on interest rate swaps

125,875

Interest rate contracts

Unrealized depreciation on inflation swaps

273,696

Total

360,225

564,186

*	Only variation margin receivable/payable at period end is reported within the statement of assets and liabilities. This amount reflects cumulative unrealized appreciation/(depreciation) on futures and centrally cleared swaps as reported in the portfolio of investments.


Derivative Type	Location of Gain or (Loss) on Derivatives Within Statement of Operations	Realized Gain or (Loss) on Derivatives			Change in Unrealized Appreciation or (Depreciation)
Interest rate contracts	Net realized gain (loss) on swaps; Net change in unrealized appreciation/depreciation of swaps	$	(287,054	)	$	5,932

Total		$	(287,054	)	$	5,932



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NOTES TO FINANCIAL STATEMENTS (continued)

AB Virginia Portfolio

Asset Derivatives

Liability Derivatives

Derivative Type

Statement of
Assets and
Liabilities
Location

Fair Value

Statement of
Assets and
Liabilities
Location

Fair Value

Interest rate contracts

Receivable/Payable for variation margin on centrally cleared swaps

774,772

Receivable/Payable for variation margin on centrally cleared swaps

479,699

Interest rate contracts

Unrealized depreciation on interest rate swaps

327,384

Interest rate contracts

Unrealized depreciation on inflation swaps

678,817

Total

774,772

1,485,900

*	Only variation margin receivable/payable at period end is reported within the statement of assets and liabilities. This amount reflects cumulative unrealized appreciation/(depreciation) on futures and centrally cleared swaps as reported in the portfolio of investments.


Derivative Type	Location of Gain or (Loss) on Derivatives Within Statement of Operations	Realized Gain or (Loss) on Derivatives			Change in Unrealized Appreciation or (Depreciation)
Interest rate contracts	Net realized gain (loss) on swaps; Net change in unrealized appreciation/depreciation of swaps	$	(438,549	)	$	(284,287	)

Total		$	(438,549	)	$	(284,287	)

The following tables represent the average monthly volume of the Portfolios’ derivative transactions during the year ended May 31, 2020:


AB Arizona Portfolio
Interest Rate Swaps:
Average notional amount	$	3,350,000	^(a)
Inflation Swaps:
Average notional amount	$	18,420,538
Centrally Cleared Interest Rate Swaps:
Average notional amount	$	12,943,500	^(b)
Centrally Cleared Inflation Swaps:
Average notional amount	$	9,471,667

(a)	Positions were open for eight months during the year.

(b)	Positions were open for ten months during the year.



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NOTES TO FINANCIAL STATEMENTS (continued)


AB Massachusetts Portfolio
Interest Rate Swaps:
Average notional amount	$	6,050,000	^(a)
Inflation Swaps:
Average notional amount	$	34,078,846
Centrally Cleared Interest Rate Swaps:
Average notional amount	$	65,318,846
Centrally Cleared Inflation Swaps:
Average notional amount	$	17,110,833

(a)	Positions were open for eight months during the year.


AB Minnesota Portfolio
Interest Rate Swaps:
Average notional amount	$	1,670,000	^(a)
Inflation Swaps:
Average notional amount	$	9,177,769
Centrally Cleared Interest Rate Swaps:
Average notional amount	$	33,659,231
Centrally Cleared Inflation Swaps:
Average notional amount	$	4,652,500

(a)	Positions were open for eight months during the year.


AB New Jersey Portfolio
Interest Rate Swaps:
Average notional amount	$	2,470,000	^(a)
Inflation Swaps:
Average notional amount	$	14,986,231
Centrally Cleared Interest Rate Swaps:
Average notional amount	$	8,124,615
Centrally Cleared Inflation Swaps:
Average notional amount	$	6,705,000

(a)	Positions were open for eight months during the year.


AB Ohio Portfolio
Interest Rate Swaps:
Average notional amount	$	2,350,000	^(a)
Inflation Swaps:
Average notional amount	$	13,427,000
Centrally Cleared Interest Rate Swaps:
Average notional amount	$	13,993,077
Centrally Cleared Inflation Swaps:
Average notional amount	$	6,270,000

(a)	Positions were open for eight months during the year.



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NOTES TO FINANCIAL STATEMENTS (continued)


AB Pennsylvania Portfolio
Interest Rate Swaps:
Average notional amount	$	2,280,000	^(a)
Inflation Swaps:
Average notional amount	$	13,105,615
Centrally Cleared Interest Rate Swaps:
Average notional amount	$	12,029,167
Centrally Cleared Inflation Swaps:
Average notional amount	$	6,303,333

(a)	Positions were open for eight months during the year.


AB Virginia Portfolio
Interest Rate Swaps:
Average notional amount	$	5,930,000	^(a)
Inflation Swaps:
Average notional amount	$	32,645,769
Centrally Cleared Interest Rate Swaps:
Average notional amount	$	16,930,308
Centrally Cleared Inflation Swaps:
Average notional amount	$	17,141,667

(a)	Positions were open for eight months during the year.

For financial reporting purposes, the Portfolios do not offset derivative assets and derivative liabilities that are subject to netting arrangements in the statement of assets and liabilities.

All OTC derivatives held at period end were subject to netting arrangements. The following tables present the Portfolios’ derivative assets and liabilities by OTC counterparty net of amounts available for offset under ISDA Master Agreements (“MA”) and net of the related collateral received/pledged by the Portfolios as of May 31, 2020. Exchange-traded derivatives and centrally cleared swaps are not subject to netting arrangements and as such are excluded from the tables.


AB Arizona Portfolio
Counterparty	Derivative Liabilities Subject to a MA		Derivatives Available for Offset			Cash Collateral Pledged*			Security Collateral Pledged*			Net Amount of Derivative Liabilities
Barclays Bank PLC	$	232,719	$	– 0	–	$	(232,719	)	$	– 0	–	$	– 0	–
Citibank, N.A.		249,842		– 0	–		(249,842	)		– 0	–		– 0	–
JPMorgan Chase Bank, N.A.		84,147		– 0	–		(84,147	)		– 0	–		– 0	–

Total	$	566,708	$	– 0	–	$	(566,708	)	$	– 0	–	$	0	^{^}

*	The actual collateral received/pledged may be more than the amount reported due to over-collateralization.

^	Net amount represents the net receivable/payable that would be due from/to the counterparty in the event of default or termination. The net amount from OTC financial derivative instruments can only be netted across transactions governed under the same master agreement with the same counterparty.



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NOTES TO FINANCIAL STATEMENTS (continued)


AB Massachusetts Portfolio
Counterparty	Derivative Liabilities Subject to a MA		Derivatives Available for Offset			Cash Collateral Pledged*			Security Collateral Pledged*			Net Amount of Derivative Liabilities
Barclays Bank PLC	$	430,894	$	– 0	–	$	– 0	–	$	(327,236	)	$	103,658
Citibank, N.A.		453,834		– 0	–		(270,000	)		– 0	–		183,834
JPMorgan Chase Bank, N.A.		155,464		– 0	–		(155,464	)		– 0	–		– 0	–

Total	$	1,040,192	$	– 0	–	$	(425,464	)	$	(327,236	)	$	287,492	^{^}

*	The actual collateral received/pledged may be more than the amount reported due to over-collateralization.

^	Net amount represents the net receivable/payable that would be due from/to the counterparty in the event of default or termination. The net amount from OTC financial derivative instruments can only be netted across transactions governed under the same master agreement with the same counterparty.

AB Minnesota Portfolio

Counterparty

Derivative
Liabilities
Subject
to a MA

Derivatives
Available
for Offset

Cash
Collateral
Pledged*

Security
Collateral
Pledged*

Net Amount of
Derivative
Liabilities

Barclays Bank PLC

114,664

– 0

–

– 0

–

– 0

–

114,664

Citibank, N.A.

124,644

– 0

–

– 0

–

– 0

–

124,644

JPMorgan Chase Bank, N.A.

42,876

– 0

–

– 0

–

– 0

–

42,876

Total

282,184

– 0

–

– 0

–

– 0

–

282,184

^{^}

*	The actual collateral received/pledged may be more than the amount reported due to over-collateralization.

^	Net amount represents the net receivable/payable that would be due from/to the counterparty in the event of default or termination. The net amount from OTC financial derivative instruments can only be netted across transactions governed under the same master agreement with the same counterparty.

AB New Jersey Portfolio

Counterparty

Derivative
Liabilities
Subject
to a MA

Derivatives
Available
for Offset

Cash
Collateral
Pledged*

Security
Collateral
Pledged*

Net Amount of
Derivative
Liabilities

Barclays Bank PLC

188,959

– 0

–

– 0

–

– 0

–

188,959

Citibank, N.A.

186,951

– 0

–

– 0

–

– 0

–

186,951

JPMorgan Chase Bank, N.A.

73,773

– 0

–

(73,773

)

– 0

–

– 0

–

Total

449,683

– 0

–

(73,773

)

– 0

–

375,910

^{^}

*	The actual collateral received/pledged may be more than the amount reported due to over-collateralization.

^	Net amount represents the net receivable/payable that would be due from/to the counterparty in the event of default or termination. The net amount from OTC financial derivative instruments can only be netted across transactions governed under the same master agreement with the same counterparty.



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NOTES TO FINANCIAL STATEMENTS (continued)

AB Ohio Portfolio

Counterparty

Derivative
Liabilities
Subject
to a MA

Derivatives
Available
for Offset

Cash
Collateral
Pledged*

Security
Collateral
Pledged*

Net Amount of
Derivative
Liabilities

Barclays Bank PLC

169,616

– 0

–

– 0

–

– 0

–

169,616

Citibank, N.A.

177,005

– 0

–

– 0

–

– 0

–

177,005

JPMorgan Chase Bank, N.A.

62,497

– 0

–

– 0

–

– 0

–

62,497

Total

409,118

– 0

–

– 0

–

– 0

–

409,118

^{^}

*	The actual collateral received/pledged may be more than the amount reported due to over-collateralization.

^	Net amount represents the net receivable/payable that would be due from/to the counterparty in the event of default or termination. The net amount from OTC financial derivative instruments can only be netted across transactions governed under the same master agreement with the same counterparty.

AB Pennsylvania Portfolio

Counterparty

Derivative
Liabilities
Subject
to a MA

Derivatives
Available
for Offset

Cash
Collateral
Pledged*

Security
Collateral
Pledged*

Net Amount of
Derivative
Liabilities

Barclays Bank PLC

165,903

– 0

–

– 0

–

– 0

–

165,903

Citibank, N.A.

172,374

– 0

–

– 0

–

– 0

–

172,374

JPMorgan Chase Bank, N.A.

61,294

– 0

–

(61,294

)

– 0

–

– 0

–

Total

399,571

– 0

–

(61,294

)

– 0

–

338,277

^{^}

*	The actual collateral received/pledged may be more than the amount reported due to over-collateralization.

^	Net amount represents the net receivable/payable that would be due from/to the counterparty in the event of default or termination. The net amount from OTC financial derivative instruments can only be netted across transactions governed under the same master agreement with the same counterparty.


AB Virginia Portfolio
Counterparty	Derivative Liabilities Subject to a MA		Derivatives Available for Offset			Cash Collateral Pledged*			Security Collateral Pledged*			Net Amount of Derivative Liabilities
Barclays Bank PLC	$	416,034	$	– 0	–	$	– 0	–	$	(287,263	)	$	128,771
Citibank, N.A.		441,844		– 0	–		(260,000	)		– 0	–		181,844
JPMorgan Chase Bank, N.A.		148,323		– 0	–		(148,323	)		– 0	–		– 0	–

Total	$	1,006,201	$	– 0	–	$	(408,323	)	$	(287,263	)	$	310,615	^{^}

*	The actual collateral received/pledged may be more than the amount reported due to over-collateralization.

^	Net amount represents the net receivable/payable that would be due from/to the counterparty in the event of default or termination. The net amount from OTC financial derivative instruments can only be netted across transactions governed under the same master agreement with the same counterparty.



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NOTES TO FINANCIAL STATEMENTS (continued)

NOTE E

Shares of Beneficial Interest

Transactions in shares of beneficial interest for each Portfolio were as follows:



	AB Arizona Portfolio
	Shares						Amount
	Year Ended May 31, 2020			Year Ended May 31, 2019			Year Ended May 31, 2020			Year Ended May 31, 2019

Class A
Shares sold		1,094,199			1,689,567		$	12,324,481		$	18,541,423

Shares issued in reinvestment of dividends		142,601			145,207			1,604,623			1,594,502

Shares converted from Class B		452			286			5,096			3,131

Shares converted from Class C		207,677			190,297			2,348,240			2,088,791

Shares redeemed		(1,256,718	)		(1,937,067	)		(14,109,636	)		(21,110,298	)

Net increase		188,211			88,290		$	2,172,804		$	1,117,549


Class B
Shares sold		9			55		$	100		$	600

Shares issued in reinvestment of dividends		3			12			36			128

Shares converted to Class A		(453	)		(286	)		(5,096	)		(3,131	)

Shares redeemed		– 0	–		(1	)		(2	)		(5	)

Net decrease		(441	)		(220	)	$	(4,962	)	$	(2,408	)


Class C
Shares sold		74,518			65,172		$	841,646		$	715,186

Shares issued in reinvestment of dividends		11,040			17,183			124,084			188,215

Shares converted to Class A		(208,009	)		(190,584	)		(2,348,240	)		(2,088,791	)

Shares redeemed		(154,367	)		(284,600	)		(1,735,147	)		(3,106,402	)

Net decrease		(276,818	)		(392,829	)	$	(3,117,657	)	$	(4,291,792	)



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	AB Massachusetts Portfolio
	Shares						Amount
	Year Ended May 31, 2020			Year Ended May 31, 2019			Year Ended May 31, 2020			Year Ended May 31, 2019

Class A
Shares sold		851,435			851,101		$	9,664,689		$	9,357,584

Shares issued in reinvestment of dividends and distributions		173,013			202,405			1,959,927			2,233,393

Shares converted from Class B		2,844			681			32,169			7,445

Shares converted from Class C		476,877			232,071			5,396,602			2,555,042

Shares redeemed		(2,487,439	)		(2,754,367	)		(28,046,622	)		(30,289,820	)

Net decrease		(983,270	)		(1,468,109	)	$	(10,993,235	)	$	(16,136,356	)


Class B
Shares issued in reinvestment of dividends and distributions		25			98		$	282		$	1,079

Shares converted to Class A		(2,852	)		(682	)		(32,169	)		(7,445	)

Shares redeemed		(2	)		(2,285	)		(32	)		(25,028	)

Net decrease		(2,829	)		(2,869	)	$	(31,919	)	$	(31,394	)


Class C
Shares sold		105,259			86,736		$	1,197,726		$	952,239

Shares issued in reinvestment of dividends and distributions		36,697			50,437			414,947			555,426

Shares converted to Class A		(477,722	)		(232,493	)		(5,396,602	)		(2,555,042	)

Shares redeemed		(213,747	)		(614,146	)		(2,412,287	)		(6,739,175	)

Net decrease		(549,513	)		(709,466	)	$	(6,196,216	)	$	(7,786,552	)


Advisor Class
Shares sold		2,058,002			2,559,357		$	23,196,865		$	28,274,836

Shares issued in reinvestment of dividends and distributions		79,474			71,838			900,085			792,588

Shares redeemed		(1,726,374	)		(2,083,302	)		(19,236,846	)		(22,942,182	)

Net increase		411,102			547,893		$	4,860,104		$	6,125,242



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NOTES TO FINANCIAL STATEMENTS (continued)



	AB Minnesota Portfolio
	Shares						Amount
	Year Ended May 31, 2020			Year Ended May 31, 2019			Year Ended May 31, 2020			Year Ended May 31, 2019

Class A
Shares sold		405,259			792,830		$	4,209,906		$	7,953,135

Shares issued in reinvestment of dividends and distributions		76,666			88,911			797,133			897,061

Shares converted from Class B		2,984			616			31,044			6,242

Shares converted from Class C		121,799			40,461			1,268,789			407,536

Shares redeemed		(786,381	)		(1,958,734	)		(8,065,401	)		(19,647,771	)

Net decrease		(179,673	)		(1,035,916	)	$	(1,758,529	)	$	(10,383,797	)


Class B
Shares sold		– 0	–		532		$	– 0	–	$	5,400

Shares issued in reinvestment of dividends and distributions		17			60			174			608

Shares converted to Class A		(2,981	)		(615	)		(31,044	)		(6,242	)

Shares redeemed		(16	)		– 0	–		(157	)		– 0	–

Net decrease		(2,980	)		(23	)	$	(31,027	)	$	(234	)


Class C
Shares sold		71,829			23,502		$	744,273		$	236,729

Shares issued in reinvestment of dividends and distributions		7,711			10,453			80,268			105,540

Shares converted to Class A		(121,682	)		(40,421	)		(1,268,789	)		(407,536	)

Shares redeemed		(83,418	)		(198,274	)		(854,131	)		(1,994,281	)

Net decrease		(125,560	)		(204,740	)	$	(1,298,379	)	$	(2,059,548	)



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	AB New Jersey Portfolio
	Shares						Amount
	Year Ended May 31, 2020			Year Ended May 31, 2019			Year Ended May 31, 2020			Year Ended May 31, 2019

Class A
Shares sold		531,591			649,041		$	5,269,281		$	6,204,598

Shares issued in reinvestment of dividends		118,013			147,198			1,162,460			1,414,520

Shares converted from Class B		1,415			13,807			13,969			131,530

Shares converted from Class C		173,710			157,763			1,715,895			1,511,743

Shares redeemed		(2,028,714	)		(2,552,525	)		(19,506,318	)		(24,492,490	)

Net decrease		(1,203,985	)		(1,584,716	)	$	(11,344,713	)	$	(15,230,099	)


Class B
Shares sold		28			156		$	273		$	1,500

Shares issued in reinvestment of dividends		13			36			129			342

Shares converted to Class A		(1,415	)		(13,807	)		(13,969	)		(131,530	)

Shares redeemed		– 0	–		(5	)		– 0	–		(46	)

Net decrease		(1,374	)		(13,620	)	$	(13,567	)	$	(129,734	)


Class C
Shares sold		54,442			66,186		$	538,430		$	634,575

Shares issued in reinvestment of dividends		15,529			20,980			153,002			201,758

Shares converted to Class A		(173,563	)		(157,685	)		(1,715,895	)		(1,511,743	)

Shares redeemed		(114,908	)		(342,581	)		(1,115,233	)		(3,281,948	)

Net decrease		(218,500	)		(413,100	)	$	(2,139,696	)	$	(3,957,358	)



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	AB Ohio Portfolio
	Shares						Amount
	Year Ended May 31, 2020			Year Ended May 31, 2019			Year Ended May 31, 2020			Year Ended May 31, 2019

Class A
Shares sold		305,426			389,202		$	3,093,261		$	3,813,996

Shares issued in reinvestment of dividends		111,496			124,929			1,120,456			1,226,734

Shares converted from Class B		2,725			408			27,398			3,999

Shares converted from Class C		121,857			107,607			1,220,137			1,058,810

Shares redeemed		(1,348,204	)		(1,191,688	)		(13,550,356	)		(11,658,480	)

Net decrease		(806,700	)		(569,542	)	$	(8,089,104	)	$	(5,554,941	)


Class B
Shares sold		90			367		$	901		$	3,600

Shares issued in reinvestment of dividends		21			57			214			553

Shares converted to Class A		(2,728	)		(408	)		(27,398	)		(3,999	)

Shares redeemed		– 0	–		(1	)		– 0	–		(6	)

Net increase (decrease)		(2,617	)		15		$	(26,283	)	$	148


Class C
Shares sold		17,853			46,997		$	180,625		$	459,379

Shares issued in reinvestment of dividends		10,442			15,783			104,884			154,806

Shares converted to Class A		(121,881	)		(107,655	)		(1,220,137	)		(1,058,810	)

Shares redeemed		(129,719	)		(369,620	)		(1,296,045	)		(3,620,793	)

Net decrease		(223,305	)		(414,495	)	$	(2,230,673	)	$	(4,065,418	)



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	AB Pennsylvania Portfolio
	Shares						Amount
	Year Ended May 31, 2020			Year Ended May 31, 2019			Year Ended May 31, 2020			Year Ended May 31, 2019

Class A
Shares sold		401,172			625,667		$	4,244,299		$	6,395,077

Shares issued in reinvestment of dividends		110,731			127,983			1,173,495			1,320,216

Shares converted from Class B		1,764			1,602			18,676			16,507

Shares converted from Class C		151,216			79,580			1,607,772			815,560

Shares redeemed		(1,354,392	)		(1,566,199	)		(14,124,846	)		(16,053,919	)

Net decrease		(689,509	)		(731,367	)	$	(7,080,604	)	$	(7,506,559	)


Class B
Shares sold		51			319		$	543		$	3,290

Shares issued in reinvestment of dividends		16			67			170			684

Shares converted to Class A		(1,763	)		(1,602	)		(18,676	)		(16,507	)

Shares redeemed		(244	)		(256	)		(2,595	)		(2,638	)

Net decrease		(1,940	)		(1,472	)	$	(20,558	)	$	(15,171	)


Class C
Shares sold		4,613			3,824		$	49,200		$	39,301

Shares issued in reinvestment of dividends		7,572			12,565			80,326			129,655

Shares converted to Class A		(151,150	)		(79,562	)		(1,607,772	)		(815,560	)

Shares redeemed		(96,857	)		(139,698	)		(1,022,302	)		(1,439,324	)

Net decrease		(235,822	)		(202,871	)	$	(2,500,548	)	$	(2,085,928	)



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	AB Virginia Portfolio
	Shares						Amount
	Year Ended May 31, 2020			Year Ended May 31, 2019			Year Ended May 31, 2020			Year Ended May 31, 2019

Class A
Shares sold		1,235,415			711,962		$	13,982,512		$	7,783,315

Shares issued in reinvestment of dividends		172,419			187,259			1,939,784			2,050,178

Shares converted from Class B		4,397			1,188			49,423			12,993

Shares converted from Class C		550,986			332,543			6,213,543			3,637,540

Shares redeemed		(1,323,443	)		(2,582,187	)		(14,826,167	)		(28,188,462	)

Net increase (decrease)		639,774			(1,349,235	)	$	7,359,095		$	(14,704,436	)


Class B
Shares sold		– 0	–		1,374		$	– 0	–	$	15,050

Shares issued in reinvestment of dividends		16			92			180			1,000

Shares converted to Class A		(4,405	)		(1,191	)		(49,423	)		(12,993	)

Shares redeemed		– 0	–		(102	)		(13	)		(1,109	)

Net increase (decrease)		(4,389	)		173		$	(49,256	)	$	1,948


Class C
Shares sold		254,126			99,017		$	2,859,360		$	1,081,520

Shares issued in reinvestment of dividends		30,273			45,731			339,870			499,239

Shares converted to Class A		(552,456	)		(333,420	)		(6,213,543	)		(3,637,540	)

Shares redeemed		(362,719	)		(558,671	)		(4,039,988	)		(6,079,210	)

Net decrease		(630,776	)		(747,343	)	$	(7,054,301	)	$	(8,135,991	)


Advisor Class
Shares sold		1,792,050			2,596,449		$	20,155,266		$	28,491,617

Shares issued in reinvestment of dividends		80,103			63,766			901,693			699,350

Shares redeemed		(1,730,287	)		(1,434,792	)		(19,363,348	)		(15,658,533	)

Net increase		141,866			1,225,423		$	1,693,611		$	13,532,434



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NOTE F

Risks Involved in Investing in the Portfolios

Market Risk—The market value of a security may move up or down, sometimes rapidly and unpredictably. These fluctuations may cause a security to be worth less than the price originally paid for it, or less than it was worth at an earlier time. Market risk may affect a single issuer, industry, sector of the economy or the market as a whole. Global economies and financial markets are increasingly interconnected, which increases the probabilities that conditions in one country or region might adversely impact issuers in a different country or region. Conditions affecting the general economy, including political, social, or economic instability at the local, regional, or global level may also affect the market value of a security. Health crises, such as pandemic and epidemic diseases, as well as other incidents that interrupt the expected course of events, such as natural disasters, war or civil disturbance, acts of terrorism, power outages and other unforeseeable and external events, and the public response to or fear of such diseases or events, have and may in the future have an adverse effect on a Portfolio’s investments and net asset value and can lead to increased market volatility. For example, any preventative or protective actions that governments may take in respect of such diseases or events may result in periods of business disruption, inability to obtain raw materials, supplies and component parts, and reduced or disrupted operations for a Portfolio’s portfolio companies. The occurrence and pendency of such diseases or events could adversely affect the economies and financial markets either in specific countries or worldwide.

Credit Risk—An issuer or guarantor of a fixed-income security, or the counterparty to a derivatives or other contract, may be unable or unwilling to make timely payments of interest or principal, or to otherwise honor its obligations. The issuer or guarantor may default, causing a loss of the full principal amount of a security and accrued interest. The degree of risk for a particular security may be reflected in its credit rating. There is the possibility that the credit rating of a fixed-income security may be downgraded after purchase, which may adversely affect the value of the security. Investments in fixed-income securities with lower ratings tend to have a higher probability that an issuer will default or fail to meet its payment obligations.

Municipal Market Risk—This is the risk that special factors may adversely affect the value of municipal securities and have a significant effect on the yield or value of the Portfolios’ investments in municipal securities. These factors include economic conditions, political or legislative changes, uncertainties related to the tax status of municipal securities, or the rights of investors in these securities. To the extent that the Portfolios invest more of their assets in a particular state’s municipal securities, the



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Portfolios may be vulnerable to events adversely affecting that state, including economic, political and regulatory occurrences, court decisions, terrorism and catastrophic natural disasters, such as hurricanes or earthquakes. The Portfolios’ investments in certain municipal securities with principal and interest payments that are made from the revenues of a specific project or facility, and not general tax revenues, may have increased risks. Factors affecting the project or facility, such as local business or economic conditions, could have a significant effect on the project’s ability to make payments of principal and interest on these securities.

Congress has previously considered making changes to the municipal securities provisions of the Internal Revenue Code that could change the U.S. federal income tax treatment of certain types of municipal securities.

The Portfolios may invest in municipal securities of issuers in Puerto Rico or other U.S. territories and their governmental agencies and municipalities, which are exempt from federal, state, and, where applicable, local income taxes. These municipal securities may have more risks than those of other U.S. issuers of municipal securities. Like many U.S. states and municipalities, Puerto Rico experienced a significant downturn during the recent recession. Puerto Rico’s downturn was particularly severe, and Puerto Rico continues to face a very challenging economic and fiscal environment. If the general economic situation in Puerto Rico continues to persist or worsens, the volatility and credit quality of Puerto Rican municipal securities could continue to be adversely affected, and the market for such securities may experience continued volatility.

Tax Risk—There is no guarantee that the income on the Portfolios’ municipal securities will be exempt from regular federal, and if applicable, state income taxes. From time to time, the U.S. Government and the U.S. Congress consider changes in federal tax law that could limit or eliminate the federal tax exemption for municipal bond income, which would in effect reduce the income received by shareholders from the Portfolios by increasing taxes on that income. In such event, the Portfolios’ net asset value, or NAV, could also decline as yields on municipal bonds, which are typically lower than those on taxable bonds, would be expected to increase to approximately the yield of comparable taxable bonds. Actions or anticipated actions affecting the tax exempt status of municipal bonds could also result in significant shareholder redemptions of portfolio shares as investors anticipate adverse effects on the Portfolios or seek higher yields to offset the potential loss of the tax deduction. As a result, the Portfolios would be required to maintain higher levels of cash to meet the redemptions, which would negatively affect the Portfolios’ yield.



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Interest Rate Risk—Changes in interest rates will affect the value of investments in fixed-income securities. When interest rates rise, the value of existing investments in fixed-income securities tends to fall and this decrease in value may not be offset by higher income from new investments. Interest rate risk is generally greater for fixed-income securities with longer maturities or durations.

Duration Risk—Duration is a measure that relates the expected price volatility of a fixed-income security to changes in interest rates. The duration of a fixed-income security may be shorter than or equal to full maturity of a fixed-income security. Fixed-income securities with longer durations have more risk and will decrease in price as interest rates rise.

Inflation Risk—This is the risk that the value of assets or income from investments will be less in the future as inflation decreases the value of money. As inflation increases, the value of the Portfolios’ assets can decline as can the value of the Portfolios’ distributions. This risk is significantly greater for fixed-income securities with longer maturities.

Illiquid Investments Risk—Illiquid investments risk exists when certain investments are or become difficult to purchase or sell. Difficulty in selling such investments may result in sales at disadvantageous prices affecting the value of your investment in the Portfolios. Causes of illiquid investments risk may include low trading volumes, large positions and heavy redemptions of Portfolio shares. Illiquid investments risk may be higher in a rising interest rate environment, when the value and liquidity of fixed-income securities generally decline. Municipal securities may have more illiquid investments risk than other fixed-income securities because they trade less frequently and the market for municipal securities is generally smaller than many other markets.

Derivatives Risk—The Portfolios may enter into derivative transactions such as forwards, options, futures and swaps. Derivatives may be illiquid, difficult to price, and leveraged so that small changes may produce disproportionate losses for the Portfolios, and subject to counterparty risk to a greater degree than more traditional investments. Derivatives may result in significant losses, including losses that are far greater than the value of the derivatives reflected on the statement of assets and liabilities.

LIBOR Risk—The Portfolios may invest in certain debt securities, derivatives or other financial instruments that utilize the London Interbank Offered Rate, or “LIBOR,” as a “benchmark” or “reference rate” for various interest rate calculations. In July 2017, the United Kingdom Financial Conduct Authority, which regulates LIBOR, announced a desire to phase out the use of LIBOR by the end of 2021. Although financial regulators and



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industry working groups have suggested alternative reference rates, such as European Interbank Offer Rate (“EURIBOR”), Sterling Overnight Interbank Average Rate (“SONIA”) and Secured Overnight Financing Rate (“SOFR”), global consensus on alternative rates is lacking and the process for amending existing contracts or instruments to transition away from LIBOR remains unclear. The elimination of LIBOR or changes to other reference rates or any other changes or reforms to the determination or supervision of reference rates could have an adverse impact on the market for, or value of, any securities or payments linked to those reference rates, which may adversely affect the Portfolios’ performance and/or net asset value. Uncertainty and risk also remain regarding the willingness and ability of issuers and lenders to include revised provisions in new and existing contracts or instruments. Consequently, the transition away from LIBOR to other reference rates may lead to increased volatility and illiquidity in markets that are tied to LIBOR, fluctuations in values of LIBOR-related investments or investments in issuers that utilize LIBOR, increased difficulty in borrowing or refinancing and diminished effectiveness of hedging strategies, adversely affecting the Portfolios’ performance. Furthermore, the risks associated with the expected discontinuation of LIBOR and transition may be exacerbated if the work necessary to effect an orderly transition to an alternative reference rate is not completed in a timely manner. Because the usefulness of LIBOR as a benchmark could deteriorate during the transition period, these effects could occur prior to the end of 2021.

Indemnification Risk—In the ordinary course of business, the Portfolios enter into contracts that contain a variety of indemnifications. The Portfolios’ maximum exposure under these arrangements is unknown. However, the Portfolios have not had prior claims or losses pursuant to these indemnification provisions and expect the risk of loss thereunder to be remote. Therefore, the Portfolios have not accrued any liability in connection with these indemnification provisions.

Management Risk—The Portfolios is subject to management risk because it is an actively-managed investment fund. The Adviser will apply its investment techniques and risk analyses in making investment decisions, but there is no guarantee that its techniques will produce the intended results.

NOTE G

Joint Credit Facility

A number of open-end mutual funds managed by the Adviser, including the Portfolios, participate in a $325 million revolving credit facility (the “Facility”) intended to provide short-term financing, if necessary, subject to certain restrictions in connection with abnormal redemption activity. Commitment fees related to the Facility are paid by the participating funds



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and are included in miscellaneous expenses in the statement of operations. The Portfolios did not utilize the Facility during the year ended May 31, 2020.

NOTE H

Distributions to Shareholders

The tax character of distributions paid during the fiscal years ended May 31, 2020 and May 31, 2019 were as follows:


AB Arizona Portfolio	2020		2019
Distributions paid from:
Ordinary income	$	24,802	$	32,192

Total taxable distributions		24,802		32,192
Tax exempt distributions		3,032,293		3,200,074

Total distributions paid	$	3,057,095	$	3,232,266


AB Massachusetts Portfolio	2020		2019
Distributions paid from:
Ordinary income	$	336,733	$	59,342

Total taxable distributions		336,733		59,342
Tax exempt distributions		5,622,464		6,198,873

Total distributions paid	$	5,959,197	$	6,258,215


AB Minnesota Portfolio	2020		2019
Distributions paid from:
Ordinary income	$	141,697	$	6,544

Total taxable distributions		141,697		6,544
Tax exempt distributions		1,308,363		1,574,514

Total distributions paid	$	1,450,060	$	1,581,058


AB New Jersey Portfolio	2020		2019
Distributions paid from:
Ordinary income	$	27,279	$	18,050

Total taxable distributions		27,279		18,050
Tax exempt distributions		2,530,951		3,066,235

Total distributions paid	$	2,558,230	$	3,084,285


AB Ohio Portfolio	2020		2019
Distributions paid from:
Ordinary income	$	14,343	$	8,232

Total taxable distributions		14,343		8,232
Tax exempt distributions		2,113,014		2,408,020

Total distributions paid	$	2,127,357	$	2,416,252



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AB Pennsylvania Portfolio	2020		2019
Distributions paid from:
Ordinary income	$	9,002	$	8,855

Total taxable distributions		9,002		8,855
Tax exempt distributions		2,217,437		2,503,107

Total distributions paid	$	2,226,439	$	2,511,962


AB Virginia Portfolio	2020		2019
Distributions paid from:
Ordinary income	$	109,471	$	33,536

Total taxable distributions		109,471		33,536
Tax exempt distributions		5,345,468		5,827,813

Total distributions paid	$	5,454,939	$	5,861,349

As of May 31, 2020, the components of accumulated earnings/(deficit) on a tax basis were as follows:


Portfolio	Undistributed Ordinary Income^(a)			Accumulated Capital and Other Losses^(b)			Unrealized Appreciation/ (Depreciation)^(c)		Total Accumulated Earnings/ (Deficit)^(d)
AB Arizona	$	8,305		$	(1,246,890	)	$	3,675,756	$	2,437,171
AB Massachusetts		9,175			(1,652,305	)		10,563,540		8,920,410
AB Minnesota		5,167			(1,326,957	)		4,646,198		3,324,408
AB New Jersey		4,659			(164,976	)		2,552,113		2,391,796
AB Ohio		9,041			(3,084,549	)		2,104,010		(971,498	)
AB Pennsylvania		– 0	–		(60,368	)		3,064,515		3,004,147
AB Virginia		14,229			(1,183,228	)		8,225,897		7,056,898

(a)	These amounts represent 100% tax exempt income.

(b)

At May 31, 2020, AB Arizona Portfolio, AB Massachusetts Portfolio, AB Minnesota Portfolio, AB New Jersey Portfolio, AB Ohio Portfolio, AB Pennsylvania Portfolio, and AB Virginia Portfolio had capital loss carryforwards for federal income tax purposes. As of May 31, 2020, AB Arizona Portfolio, AB Massachusetts Portfolio, AB Minnesota Portfolio, AB New Jersey Portfolio, AB Ohio Portfolio, AB Pennsylvania Portfolio, and AB Virginia Portfolio had net capital loss carryforwards of $1,246,890, $1,652,305, $1,326,957, $164,976, $3,084,549, $60,368, and $1,183,228, respectively. During the current fiscal year, AB New Jersey Portfolio, AB Ohio Portfolio, and AB Pennsylvania Portfolio utilized $1,295,377, $873,030, and $296,252 of capital loss carryforwards to offset current year net realized gains.

(c)	The differences between book-basis and tax-basis unrealized appreciation/depreciation are attributable primarily to the tax treatment of swaps and the tax deferral of losses on wash sales.

(d)	The difference between book-basis and tax-basis components of accumulated earnings/(deficit) is attributable primarily to dividends payable.

For tax purposes, net realized capital losses may be carried over to offset future capital gains, if any. Funds are permitted to carry forward capital losses for an indefinite period, and such losses will retain their character as either short-term or long-term capital losses.



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As of May 31, 2020, the Portfolios had net capital loss carryforwards as follows:


Portfolio	Short-Term Amount		Long-Term Amount
AB Arizona	$	1,246,890	$	– 0	–
AB Massachusetts		1,652,305		– 0	–
AB Minnesota		920,657		406,300
AB New Jersey		164,976		– 0	–
AB Ohio		1,909,572		1,174,977
AB Pennsylvania		60,368		– 0	–
AB Virginia		1,183,228		– 0	–

During the current fiscal year, the Portfolios had adjustments due to permanent differences. Permanent differences have no effect on net assets. The effect of such permanent differences on each Portfolio-primarily due to taxable overdistributions-is reflected as an adjustment to the components of capital as of May 31, 2020 as shown below:


Portfolio	Increase (Decrease) to Additional Paid-In Capital			Increase (Decrease) to Distributable Earnings/ (Accumulated Loss)
AB Arizona	$	– 0	–	$	– 0	–
AB Massachusetts		– 0	–		– 0	–
AB Minnesota		– 0	–		– 0	–
AB New Jersey		– 0	–		– 0	–
AB Ohio		– 0	–		– 0	–
AB Pennsylvania		(24,341	)		24,341
AB Virginia		– 0	–		– 0	–

NOTE I

Recent Accounting Pronouncements

In March 2017, the Financial Accounting Standards Board issued an Accounting Standards Update, ASU 2017-08, Receivables—Nonrefundable Fees and Other Costs (Subtopic 310-20), Premium Amortization on Purchased Callable Debt Securities which amends the amortization period for certain purchased callable debt securities held at a premium, shortening such period to the earliest call date. ASU 2017-08 does not require any accounting change for debt securities held at a discount; the discount continues to be amortized to maturity. ASU 2017-08 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Portfolios have adopted ASU 2017-08, which did not have a material impact on the Portfolios’ financial position or the results of its operations, and had no impact on the Portfolios’ net assets.



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NOTE J

Subsequent Events

Management has evaluated subsequent events for possible recognition or disclosure in the financial statements through the date the financial statements are issued. Management has determined that there are no material events that would require disclosure in the Portfolios’ financial statements through this date.



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FINANCIAL HIGHLIGHTS

Selected Data For A Share Of Beneficial Interest Outstanding Throughout Each Period


	AB Arizona Portfolio
	Class A
	Year Ended May 31,
	2020			2019			2018			2017			2016



Net asset value, beginning of period		$ 11.22			$ 10.98			$ 11.16			$ 11.36			$ 11.01

Income From Investment Operations

Net investment income^(a)(b)		.30			.32			.32			.34			.35

Net realized and unrealized gain (loss) on investment transactions		(.21	)		.24			(.18	)		(.20	)		.35

Net increase in net asset value from operations		.09			.56			.14			.14			.70


Less: Dividends

Dividends from net investment income		(.30	)		(.32	)		(.32	)		(.34	)		(.35	)

Net asset value, end of period		$ 11.01			$ 11.22			$ 10.98			$ 11.16			$ 11.36


Total Return

Total investment return based on net asset value^(c)		.77	%		5.19	%		1.30	%		1.28	%		6.50	%

Ratios/Supplemental Data

Net assets, end of period (000’s omitted)		$105,315			$105,254			$102,020			$105,539			$106,037

Ratio to average net assets of:

Expenses, net of waivers/reimbursements^(d)		.78	%		.78	%		.79	%		.78	%		.78	%

Expenses, before waivers/reimbursements^(d)		1.00	%		1.01	%		1.00	%		.97	%		.96	%

Net investment income^(b)		2.69	%		2.90	%		2.92	%		3.04	%		3.17	%

Portfolio turnover rate		13	%		12	%		12	%		12	%		11	%

See footnote summary on page 181-183.



166 ^\| AB MUNICIPAL INCOME FUND II		abfunds.com

FINANCIAL HIGHLIGHTS (continued)

Selected Data For A Share Of Beneficial Interest Outstanding Throughout Each Period


	AB Arizona Portfolio
	Class C
	Year Ended May 31,
	2020			2019			2018			2017			2016


Net asset value, beginning of period		$ 11.20			$ 10.96			$ 11.14			$ 11.35			$ 10.99

Income From Investment Operations

Net investment income^(a)(b)		.22			.24			.24			.26			.27

Net realized and unrealized gain (loss) on investment transactions		(.22	)		.24			(.18	)		(.21	)		.36

Net increase in net asset value from operations		– 0	–		.48			.06			.05			.63

Less: Dividends

Dividends from net investment income		(.21	)		(.24	)		(.24	)		(.26	)		(.27	)

Net asset value, end of period		$ 10.99			$ 11.20			$ 10.96			$ 11.14			$ 11.35


Total Return

Total investment return based on net asset value^(c)		.02	%		4.41	%		.55	%		.44	%		5.81	%

Ratios/Supplemental Data

Net assets, end of period (000’s omitted)		$8,935			$12,211			$16,254			$19,454			$25,550

Ratio to average net assets of:

Expenses, net of waivers/reimbursements^(d)		1.53	%		1.53	%		1.54	%		1.53	%		1.53	%

Expenses, before waivers/reimbursements^(d)		1.75	%		1.76	%		1.75	%		1.72	%		1.71	%

Net investment income^(b)		1.95	%		2.15	%		2.18	%		2.29	%		2.43	%

Portfolio turnover rate		13	%		12	%		12	%		12	%		11	%

See footnote summary on page 181-183.



abfunds.com		AB MUNICIPAL INCOME FUND II ^\| 167

FINANCIAL HIGHLIGHTS (continued)

Selected Data For A Share Of Beneficial Interest Outstanding Throughout Each Period


	AB Massachusetts Portfolio
	Class A
	Year Ended May 31,
	2020			2019			2018			2017			2016


Net asset value, beginning of period		$ 11.28			$ 11.09			$ 11.35			$ 11.61			$ 11.37

Income From Investment Operations

Net investment income^(a)(b)		.31			.33			.32			.33			.35

Net realized and unrealized gain (loss) on investment transactions		(.12	)		.19			(.24	)		(.24	)		.25

Net increase in net asset value from operations		.19			.52			.08			.09			.60

Less: Dividends and Distributions

Dividends from net investment income		(.32	)		(.33	)		(.33	)		(.35	)		(.36	)

Distributions from net realized gain on investment transactions		– 0	–		– 0	–		(.01	)		– 0	–		– 0	–

Total dividends and distributions		(.32	)		(.33	)		(.34	)		(.35	)		(.36	)

Net asset value, end of period		$ 11.15			$ 11.28			$ 11.09			$ 11.35			$ 11.61


Total Return

Total investment return based on net asset value^(c)		1.67	%		4.76	%		.75	%		.78	%		5.38	%

Ratios/Supplemental Data

Net assets, end of period (000’s omitted)		$114,592			$126,955			$141,078			$163,988			$189,259

Ratio to average net assets of:

Expenses, net of waivers/reimbursements^(d)		.77	%		.78	%		.78	%		.77	%		.77	%

Expenses, before waivers/reimbursements^(d)		.90	%		.90	%		.89	%		.88	%		.87	%

Net investment income^(b)		2.76	%		2.95	%		2.89	%		2.92	%		3.04	%

Portfolio turnover rate		13	%		12	%		19	%		13	%		15	%

See footnote summary on page 181-183.



168 ^\| AB MUNICIPAL INCOME FUND II		abfunds.com

FINANCIAL HIGHLIGHTS (continued)

Selected Data For A Share Of Beneficial Interest Outstanding Throughout Each Period


	AB Massachusetts Portfolio
	Class C
	Year Ended May 31,
	2020			2019			2018			2017			2016


Net asset value, beginning of period		$ 11.26			$ 11.07			$ 11.33			$ 11.59			$ 11.35

Income From Investment Operations

Net investment income^(a)(b)		.23			.24			.24			.25			.26

Net realized and unrealized gain (loss) on investment transactions		(.13	)		.20			(.24	)		(.25	)		.26

Net increase in net asset value from operations		.10			.44			.00	^(e)		.00	^(e)		.52

Less: Dividends and Distributions

Dividends from net investment income		(.23	)		(.25	)		(.25	)		(.26	)		(.28	)

Distributions from net realized gain on investment transactions		– 0	–		– 0	–		(.01	)		– 0	–		– 0	–

Total dividends and distributions		(.23	)		(.25	)		(.26	)		(.26	)		(.28	)

Net asset value, end of period		$ 11.13			$ 11.26			$ 11.07			$ 11.33			$ 11.59


Total Return

Total investment return based on net asset value^(c)		.91	%		3.99	%		(.01	)%		.03	%		4.61	%

Ratios/Supplemental Data

Net assets, end of period (000’s omitted)		$22,940			$29,381			$36,735			$45,530			$54,482

Ratio to average net assets of:

Expenses, net of waivers/reimbursements^(d)		1.52	%		1.53	%		1.53	%		1.52	%		1.52	%

Expenses, before waivers/reimbursements^(d)		1.65	%		1.65	%		1.64	%		1.63	%		1.63	%

Net investment income^(b)		2.02	%		2.20	%		2.14	%		2.17	%		2.29	%

Portfolio turnover rate		13	%		12	%		19	%		13	%		15	%

See footnote summary on page 181-183.



abfunds.com		AB MUNICIPAL INCOME FUND II ^\| 169

FINANCIAL HIGHLIGHTS (continued)

Selected Data For A Share Of Beneficial Interest Outstanding Throughout Each Period


	AB Massachusetts Portfolio
	Advisor Class
	Year Ended May 31,									July 25, 2016^(f) to May 31, 2017
	2020			2019			2018			July 25, 2016^(f) to May 31, 2017


Net asset value, beginning of period		$ 11.27			$ 11.08			$ 11.34			$ 11.72

Income From Investment Operations

Net investment income^(a)(b)		.34			.35			.35			.30

Net realized and unrealized gain (loss) on investment transactions		(.11	)		.20			(.24	)		(.36	)

Net increase (decrease) in net asset value from operations		.23			.55			.11			(.06	)

Less: Dividends and Distributions

Dividends from net investment income		(.35	)		(.36	)		(.36	)		(.32	)

Distributions from net realized gain on investment transactions		– 0	–		– 0	–		(.01	)		– 0	–

Total dividends and distributions		(.35	)		(.36	)		(.37	)		(.32	)

Net asset value, end of period		$ 11.15			$ 11.27			$ 11.08			$ 11.34


Total Return
Total investment return based on net asset value^(c)		2.01	%		5.03	%		1.00	%		(.48	)%

Ratios/Supplemental Data

Net assets, end of period (000’s omitted)		$61,825			$57,879			$50,825			$42,177

Ratio to average net assets of:

Expenses, net of waivers/reimbursements^(d)		.52	%		.53	%		.54	%		.52	%^{^}

Expenses, before waivers/reimbursements^(d)		.65	%		.65	%		.64	%		.65	%^{^}

Net investment income^(b)		3.00	%		3.20	%		3.14	%		3.22	%^{^}

Portfolio turnover rate		13	%		12	%		19	%		13	%

See footnote summary on page 181-183.



170 ^\| AB MUNICIPAL INCOME FUND II		abfunds.com

FINANCIAL HIGHLIGHTS (continued)

Selected Data For A Share Of Beneficial Interest Outstanding Throughout Each Period


	AB Minnesota Portfolio
	Class A
	Year Ended May 31,
	2020			2019			2018			2017			2016


Net asset value, beginning of period		$ 10.33			$ 10.11			$ 10.33			$ 10.54			$ 10.33

Income From Investment Operations

Net investment income^(a)(b)		.25			.28			.28			.29			.31

Net realized and unrealized gain (loss) on investment transactions		.01	^(g)		.22			(.21	)		(.19	)		.22

Net increase in net asset value from operations		.26			.50			.07			.10			.53

Less: Dividends and Distributions

Dividends from net investment income		(.27	)		(.28	)		(.28	)		(.29	)		(.32	)

Distributions from net realized gain on investment transactions		– 0	–		– 0	–		(.01	)		(.02	)		– 0	–

Total dividends and distributions		(.27	)		(.28	)		(.29	)		(.31	)		(.32	)

Net asset value, end of period		$ 10.32			$ 10.33			$ 10.11			$ 10.33			$ 10.54


Total Return

Total investment return based on net asset value^(c)		2.51	%		5.01	%		.69	%		1.03	%		5.24	%

Ratios/Supplemental Data

Net assets, end of period (000’s omitted)		$49,723			$51,638			$60,997			$67,611			$67,380

Ratio to average net assets of:

Expenses, net of waivers/reimbursements^(d)		.85	%		.87	%		.86	%		.85	%		.86	%

Expenses, before waivers/reimbursements^(d)		1.26	%		1.27	%		1.17	%		1.11	%		1.08	%

Net investment income^(b)		2.44	%		2.73	%		2.77	%		2.77	%		2.94	%

Portfolio turnover rate		10	%		14	%		16	%		12	%		10	%

See footnote summary on page 181-183.



abfunds.com		AB MUNICIPAL INCOME FUND II ^\| 171

FINANCIAL HIGHLIGHTS (continued)

Selected Data For A Share Of Beneficial Interest Outstanding Throughout Each Period


	AB Minnesota Portfolio
	Class C
	Year Ended May 31,
	2020			2019			2018			2017			2016


Net asset value, beginning of period		$ 10.35			$ 10.12			$ 10.34			$ 10.55			$ 10.34

Income From Investment Operations

Net investment income^(a)(b)		.18			.20			.21			.21			.23

Net realized and unrealized gain (loss) on investment transactions		(.01	)		.23			(.22	)		(.18	)		.23

Net increase (decrease) in net asset value from operations		.17			.43			(.01	)		.03			.46

Less: Dividends and Distributions

Dividends from net investment income		(.19	)		(.20	)		(.20	)		(.22	)		(.25	)

Distributions from net realized gain on investment transactions		– 0	–		– 0	–		(.01	)		(.02	)		– 0	–

Total dividends and distributions		(.19	)		(.20	)		(.21	)		(.24	)		(.25	)

Net asset value, end of period		$ 10.33			$ 10.35			$ 10.12			$ 10.34			$ 10.55


Total Return

Total investment return based on net asset value^(c)		1.64	%		4.32	%		(.06	)%		.27	%		4.45	%

Ratios/Supplemental Data

Net assets, end of period (000’s omitted)		$4,922			$6,226			$8,164			$10,984			$16,178

Ratio to average net assets of:

Expenses, net of waivers/reimbursements^(d)		1.60	%		1.62	%		1.61	%		1.60	%		1.61	%

Expenses, before waivers/reimbursements^(d)		2.02	%		2.02	%		1.92	%		1.85	%		1.84	%

Net investment income^(b)		1.69	%		1.98	%		2.02	%		2.01	%		2.18	%

Portfolio turnover rate		10	%		14	%		16	%		12	%		10	%

See footnote summary on page 181-183.



172 ^\| AB MUNICIPAL INCOME FUND II		abfunds.com

FINANCIAL HIGHLIGHTS (continued)

Selected Data For A Share Of Beneficial Interest Outstanding Throughout Each Period


	AB New Jersey Portfolio
	Class A
	Year Ended May 31,
	2020			2019			2018			2017			2016


Net asset value, beginning of period		$ 9.84			$ 9.63			$ 9.78			$ 9.93			$ 9.67

Income From Investment Operations

Net investment income^(a)(b)		.30			.31			.31			.32			.32

Net realized and unrealized gain (loss) on investment transactions		(.25	)		.21			(.15	)		(.14	)		.28

Net increase in net asset value from operations		.05			.52			.16			.18			.60

Less: Dividends

Dividends from net investment income		(.30	)		(.31	)		(.31	)		(.33	)		(.34	)

Net asset value, end of period		$ 9.59			$ 9.84			$ 9.63			$ 9.78			$ 9.93


Total Return

Total investment return based on net asset value^(c)		.50	%		5.53	%		1.65	%		1.82	%		6.27	%

Ratios/Supplemental Data

Net assets, end of period (000’s omitted)		$66,446			$79,995			$93,552			$92,494			$87,365

Ratio to average net assets of:

Expenses, net of waivers/reimbursements^(d)		.84	%		.84	%		.83	%		.82	%		.82	%

Expenses, before waivers/reimbursements^(d)		1.12	%		1.07	%		1.03	%		1.01	%		.99	%

Net investment income^(b)		3.09	%		3.23	%		3.18	%		3.29	%		3.33	%

Portfolio turnover rate		10	%		8	%		26	%		8	%		14	%

See footnote summary on page 181-183.



abfunds.com		AB MUNICIPAL INCOME FUND II ^\| 173

FINANCIAL HIGHLIGHTS (continued)

Selected Data For A Share Of Beneficial Interest Outstanding Throughout Each Period


	AB New Jersey Portfolio
	Class C
	Year Ended May 31,
	2020			2019			2018			2017			2016


Net asset value, beginning of period		$ 9.85			$ 9.64			$ 9.79			$ 9.93			$ 9.67

Income From Investment Operations

Net investment income^(a)(b)		.23			.24			.24			.25			.25

Net realized and unrealized gain (loss) on investment transactions		(.25	)		.21			(.15	)		(.14	)		.27

Net increase (decrease) in net asset value from operations		(.02	)		.45			.09			.11			.52

Less: Dividends

Dividends from net investment income		(.23	)		(.24	)		(.24	)		(.25	)		(.26	)

Net asset value, end of period		$ 9.60			$ 9.85			$ 9.64			$ 9.79			$ 9.93


Total Return

Total investment return based on net asset value^(c)		(.25	)%		4.74	%		.89	%		1.15	%		5.47	%

Ratios/Supplemental Data

Net assets, end of period (000’s omitted)		$7,891			$10,244			$14,007			$17,269			$30,094

Ratio to average net assets of:

Expenses, net of waivers/reimbursements^(d)		1.59	%		1.59	%		1.58	%		1.57	%		1.57	%

Expenses, before waivers/reimbursements^(d)		1.87	%		1.82	%		1.77	%		1.76	%		1.74	%

Net investment income^(b)		2.34	%		2.48	%		2.42	%		2.53	%		2.58	%

Portfolio turnover rate		10	%		8	%		26	%		8	%		14	%

See footnote summary on page 181-183.



174 ^\| AB MUNICIPAL INCOME FUND II		abfunds.com

FINANCIAL HIGHLIGHTS (continued)

Selected Data For A Share Of Beneficial Interest Outstanding Throughout Each Period


	AB Ohio Portfolio
	Class A
	Year Ended May 31,
	2020			2019			2018			2017			2016


Net asset value, beginning of period		$ 10.01			$ 9.83			$ 10.05			$ 10.20			$ 9.89

Income From Investment Operations

Net investment income^(a)(b)		.28			.28			.28			.28			.29

Net realized and unrealized gain (loss) on investment transactions		(.13	)		.19			(.22	)		(.15	)		.32

Contributions from Affiliates		– 0	–		– 0	–		– 0	–		.00	^(e)		– 0	–

Net increase in net asset value from operations		.15			.47			.06			.13			.61

Less: Dividends

Dividends from net investment income		(.28	)		(.29	)		(.28	)		(.28	)		(.30	)

Net asset value, end of period		$ 9.88			$ 10.01			$ 9.83			$ 10.05			$ 10.20


Total Return

Total investment return based on net asset value^(c)		1.45	%		4.82	%		.58	%		1.29	%		6.29	%

Ratios/Supplemental Data

Net assets, end of period (000’s omitted)		$66,573			$75,542			$79,767			$83,417			$87,480

Ratio to average net assets of:

Expenses, net of waivers/reimbursements^(d)		.81	%		.81	%		.80	%		.80	%		.80	%

Expenses, before waivers/reimbursements^(d)		1.13	%		1.11	%		1.07	%		1.03	%		.99	%

Net investment income^(b)		2.78	%		2.90	%		2.81	%		2.76	%		2.90	%

Portfolio turnover rate		19	%		8	%		12	%		5	%		13	%

See footnote summary on page 181-183.



abfunds.com		AB MUNICIPAL INCOME FUND II ^\| 175

FINANCIAL HIGHLIGHTS (continued)

Selected Data For A Share Of Beneficial Interest Outstanding Throughout Each Period


	AB Ohio Portfolio
	Class C
	Year Ended May 31,
	2020			2019			2018			2017			2016


Net asset value, beginning of period		$ 10.01			$ 9.83			$ 10.04			$ 10.19			$ 9.88

Income From Investment Operations

Net investment income^(a)(b)		.20			.21			.20			.20			.22

Net realized and unrealized gain (loss) on investment transactions		(.13	)		.18			(.21	)		(.15	)		.32

Net increase (decrease) in net asset value from operations		.07			.39			(.01	)		.05			.54

Less: Dividends

Dividends from net investment income		(.20	)		(.21	)		(.20	)		(.20	)		(.23	)

Net asset value, end of period		$ 9.88			$ 10.01			$ 9.83			$ 10.04			$ 10.19


Total Return

Total investment return based on net asset value^(c)		.70	%		4.04	%		(.07	)%		.53	%		5.50	%

Ratios/Supplemental Data

Net assets, end of period (000’s omitted)		$5,728			$8,040			$11,967			$13,701			$27,045

Ratio to average net assets of:

Expenses, net of waivers/reimbursements^(d)		1.56	%		1.56	%		1.55	%		1.55	%		1.55	%

Expenses, before waivers/reimbursements^(d)		1.88	%		1.86	%		1.82	%		1.78	%		1.74	%

Net investment income^(b)		2.03	%		2.15	%		2.06	%		2.00	%		2.15	%

Portfolio turnover rate		19	%		8	%		12	%		5	%		13	%

See footnote summary on page 181-183.



176 ^\| AB MUNICIPAL INCOME FUND II		abfunds.com

FINANCIAL HIGHLIGHTS (continued)

Selected Data For A Share Of Beneficial Interest Outstanding Throughout Each Period


	AB Pennsylvania Portfolio
	Class A
	Year Ended May 31,
	2020			2019			2018			2017			2016


Net asset value, beginning of period		$ 10.55			$ 10.35			$ 10.54			$ 10.70			$ 10.42

Income From Investment Operations

Net investment income^(a)(b)		.31			.32			.30			.31			.32

Net realized and unrealized gain (loss) on investment transactions		(.11	)		.20			(.19	)		(.16	)		.28

Net increase in net asset value from operations		.20			.52			.11			.15			.60

Less: Dividends

Dividends from net investment income		(.30	)		(.32	)		(.30	)		(.31	)		(.32	)

Net asset value, end of period		$ 10.45			$ 10.55			$ 10.35			$ 10.54			$ 10.70


Total Return

Total investment return based on net asset value^(c)		1.95	%		5.10	%		1.10	%		1.41	%		5.83	%

Ratios/Supplemental Data

Net assets, end of period (000’s omitted)		$66,575			$74,496			$80,666			$83,620			$74,734

Ratio to average net assets of:

Expenses, net of waivers/reimbursements^(d)		.85	%		.86	%		.86	%		.85	%		.85	%

Expenses, before waivers/reimbursements^(d)		1.14	%		1.12	%		1.09	%		1.05	%		1.03	%

Net investment income^(b)		2.91	%		3.07	%		2.91	%		2.91	%		3.02	%

Portfolio turnover rate		11	%		9	%		38	%		24	%		11	%

See footnote summary on page 181-183.



abfunds.com		AB MUNICIPAL INCOME FUND II ^\| 177

FINANCIAL HIGHLIGHTS (continued)

Selected Data For A Share Of Beneficial Interest Outstanding Throughout Each Period


	AB Pennsylvania Portfolio
	Class C
	Year Ended May 31,
	2020			2019			2018			2017			2016


Net asset value, beginning of period		$ 10.56			$ 10.36			$ 10.55			$ 10.70			$ 10.42

Income From Investment Operations

Net investment income^(a)(b)		.23			.24			.23			.23			.24

Net realized and unrealized gain (loss) on investment transactions		(.12	)		.20			(.19	)		(.15	)		.28

Net increase in net asset value from operations		.11			.44			.04			.08			.52

Less: Dividends

Dividends from net investment income		(.22	)		(.24	)		(.23	)		(.23	)		(.24	)

Net asset value, end of period		$ 10.45			$ 10.56			$ 10.36			$ 10.55			$ 10.70


Total Return

Total investment return based on net asset value^(c)		1.09	%		4.31	%		.35	%		.74	%		5.04	%

Ratios/Supplemental Data

Net assets, end of period (000’s omitted)		$4,181			$6,712			$8,686			$11,237			$22,356

Ratio to average net assets of:

Expenses, net of waivers/reimbursements^(d)		1.60	%		1.61	%		1.61	%		1.60	%		1.60	%

Expenses, before waivers/reimbursements^(d)		1.89	%		1.87	%		1.84	%		1.79	%		1.78	%

Net investment income^(b)		2.16	%		2.31	%		2.16	%		2.15	%		2.27	%

Portfolio turnover rate		11	%		9	%		38	%		24	%		11	%

See footnote summary on page 181-183.



178 ^\| AB MUNICIPAL INCOME FUND II		abfunds.com

FINANCIAL HIGHLIGHTS (continued)

Selected Data For A Share Of Beneficial Interest Outstanding Throughout Each Period


	AB Virginia Portfolio
	Class A
	Year Ended May 31,
	2020			2019			2018			2017			2016


Net asset value, beginning of period		$ 11.19			$ 10.99			$ 11.19			$ 11.39			$ 11.11

Income From Investment Operations

Net investment income^(a)(b)		.29			.32			.32			.32			.34

Net realized and unrealized gain (loss) on investment transactions		(.10	)		.20			(.20	)		(.18	)		.29

Net increase in net asset value from operations	��	.19			.52			.12			.14			.63

Less: Dividends

Dividends from net investment income		(.29	)		(.32	)		(.32	)		(.34	)		(.35	)

Net asset value, end of period		$ 11.09			$ 11.19			$ 10.99			$ 11.19			$ 11.39


Total Return

Total investment return based on net asset value^(c)		1.71	%		4.80	%		1.10	%		1.23	%		5.77	%

Ratios/Supplemental Data

Net assets, end of period (000’s omitted)		$133,346			$127,353			$139,827			$159,689			$189,953

Ratio to average net assets of:

Expenses, net of waivers/reimbursements^(d)		.80	%		.81	%		.81	%		.80	%		.80	%

Expenses, before waivers/reimbursements^(d)		.90	%		.90	%		.89	%		.88	%		.87	%

Net investment income^(b)		2.62	%		2.89	%		2.85	%		2.89	%		3.02	%

Portfolio turnover rate		16	%		6	%		18	%		16	%		7	%

See footnote summary on page 181-183.



abfunds.com		AB MUNICIPAL INCOME FUND II ^\| 179

FINANCIAL HIGHLIGHTS (continued)

Selected Data For A Share Of Beneficial Interest Outstanding Throughout Each Period


	AB Virginia Portfolio
	Class C
	Year Ended May 31,
	2020			2019			2018			2017			2016


Net asset value, beginning of period		$ 11.16			$ 10.96			$ 11.16			$ 11.36			$ 11.08

Income From Investment Operations

Net investment income^(a)(b)		.21			.23			.23			.24			.25

Net realized and unrealized gain (loss) on investment transactions		(.09	)		.21			(.19	)		(.19	)		.30

Net increase in net asset value from operations		.12			.44			.04			.05			.55

Less: Dividends

Dividends from net investment income		(.21	)		(.24	)		(.24	)		(.25	)		(.27	)

Net asset value, end of period		$ 11.07			$ 11.16			$ 10.96			$ 11.16			$ 11.36


Total Return

Total investment return based on net asset value^(c)		1.04	%		4.04	%		.35	%		.48	%		5.00	%

Ratios/Supplemental Data

Net assets, end of period (000’s omitted)		$20,540			$27,759			$35,435			$41,823			$56,080

Ratio to average net assets of:

Expenses, net of waivers/reimbursements^(d)		1.55	%		1.56	%		1.56	%		1.55	%		1.55	%

Expenses, before waivers/reimbursements^(d)		1.65	%		1.66	%		1.65	%		1.63	%		1.62	%

Net investment income^(b)		1.89	%		2.15	%		2.11	%		2.15	%		2.28	%

Portfolio turnover rate		16	%		6	%		18	%		16	%		7	%

See footnote summary on page 181-183.



180 ^\| AB MUNICIPAL INCOME FUND II		abfunds.com

FINANCIAL HIGHLIGHTS (continued)

Selected Data For A Share Of Beneficial Interest Outstanding Throughout Each Period


	AB Virginia Portfolio
	Advisor Class
	Year Ended May 31,									July 25, 2016^(f)to May 31, 2017
	2020			2019			2018			July 25, 2016^(f)to May 31, 2017


Net asset value, beginning of period		$ 11.20			$ 10.99			$ 11.19			$ 11.49

Income From Investment Operations

Net investment income^(a)(b)		.32			.34			.34			.30

Net realized and unrealized gain (loss) on investment transactions		(.10	)		.22			(.19	)		(.29	)

Net increase in net asset value from operations		.22			.56			.15			.01

Less: Dividends

Dividends from net investment income		(.32	)		(.35	)		(.35	)		(.31	)

Net asset value, end of period		$ 11.10			$ 11.20			$ 10.99			$ 11.19


Total Return

Total investment return based on net asset value^(c)		1.96	%		5.16	%		1.35	%		.14	%

Ratios/Supplemental Data

Net assets, end of period (000’s omitted)		$56,772			$55,678			$41,188			$28,278

Ratio to average net assets of:

Expenses, net of waivers/reimbursements^(d)		.55	%		.56	%		.56	%		.55	%^{^}

Expenses, before waivers/reimbursements^(d)		.65	%		.65	%		.64	%		.66	%^{^}

Net investment income^(b)		2.87	%		3.14	%		3.10	%		3.24	%^{^}

Portfolio turnover rate^.		16	%		6	%		18	%		16	%

(a)	Based on average shares outstanding.

(b)	Net of expenses waived/reimbursed by the Adviser.

(c)

Total investment return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption on the last day of the period. Initial sales charges or contingent deferred sales charges are not reflected in the calculation of total investment return. Total return does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Total investment return calculated for a period of less than one year is not annualized.



abfunds.com		AB MUNICIPAL INCOME FUND II ^\| 181

FINANCIAL HIGHLIGHTS (continued)

Selected Data For A Share Of Beneficial Interest Outstanding Throughout Each Period

(d)	The expense ratios presented below exclude interest/bank overdraft expense:


	Year Ended May 31,
	2020			2019			2018			2017			2016

AB Arizona Portfolio
Class A

Net of waivers		N/A			.78	%		.78	%		.78	%		.78	%

Before waivers		N/A			1.00	%		.99	%		.97	%		.96	%
Class C

Net of waivers		N/A			1.53	%		1.53	%		1.53	%		1.53	%

Before waivers		N/A			1.75	%		1.74	%		1.72	%		1.71	%

AB Massachusetts Portfolio
Class A

Net of waivers		N/A			.77	%		.77	%		N/A			N/A

Before waivers		N/A			.89	%		.88	%		N/A			N/A
Class C

Net of waivers		N/A			1.52	%		1.52	%		N/A			N/A

Before waivers		N/A			1.64	%		1.63	%		N/A			N/A
Advisor Class

Net of waivers		N/A			.52	%		.52	%		N/A			N/A

Before waivers		N/A			.64	%		.63	%		N/A			N/A

AB Minnesota Portfolio
Class A

Net of waivers		N/A			.85	%		.85	%		.85	%		.85	%

Before waivers		N/A			1.26	%		1.16	%		1.11	%		1.08	%
Class C

Net of waivers		N/A			1.60	%		1.60	%		1.60	%		1.60	%

Before waivers		N/A			2.01	%		1.91	%		1.85	%		1.83	%

AB New Jersey Portfolio
Class A

Net of waivers		.82	%		.82	%		.82	%		N/A			N/A

Before waivers		1.10	%		1.05	%		1.02	%		N/A			N/A
Class C

Net of waivers		1.57	%		1.57	%		1.57	%		N/A			N/A

Before waivers		1.85	%		1.80	%		1.77	%		N/A			N/A

AB Ohio Portfolio
Class A

Net of waivers		.80	%		.80	%		.80	%		.80	%		.80	%

Before waivers		1.12	%		1.10	%		1.06	%		1.03	%		.99	%
Class C

Net of waivers		1.55	%		1.55	%		1.55	%		1.55	%		1.55	%

Before waivers		1.87	%		1.85	%		1.82	%		1.78	%		1.74	%



182 ^\| AB MUNICIPAL INCOME FUND II		abfunds.com

FINANCIAL HIGHLIGHTS (continued)

Selected Data For A Share Of Beneficial Interest Outstanding Throughout Each Period


	Year Ended May 31,
	2020			2019			2018			2017		2016

AB Pennsylvania Portfolio
Class A

Net of waivers		.85	%		.85	%		.85	%		N/A		N/A

Before waivers		1.14	%		1.11	%		1.08	%		N/A		N/A
Class C

Net of waivers		1.60	%		1.60	%		1.60	%		N/A		N/A

Before waivers		1.89	%		1.86	%		1.83	%		N/A		N/A

AB Virginia Portfolio
Class A

Net of waivers		N/A			.80	%		.80	%		N/A		N/A

Before waivers		N/A			.90	%		.88	%		N/A		N/A
Class C

Net of waivers		N/A			1.55	%		1.55	%		N/A		N/A

Before waivers		N/A			1.65	%		1.64	%		N/A		N/A
Advisor Class

Net of waivers		N/A			.55	%		.55	%		N/A		N/A

Before waivers		N/A			.65	%		.63	%		N/A		N/A

(e)	Amount is less than $.005.

(f)	Commencement of distributions.

(g)	Due to timing of sales and repurchase of capital shares, the net realized and unrealized gain (loss) per share is not in accordance with the Portfolio’s change in net realized and unrealized gain (loss) on investment transactions for the period.

^	Annualized.

See notes to financial statements.



abfunds.com		AB MUNICIPAL INCOME FUND II ^\| 183

REPORT OF INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Trustees of

AB Municipal Income Fund II:

Opinion on the Financial Statements

We have audited the accompanying statements of assets and liabilities of AB Municipal Income Fund II (the “Fund”) (comprising the AB Arizona Portfolio, AB Massachusetts Portfolio, AB Minnesota Portfolio, AB New Jersey Portfolio, AB Ohio Portfolio, AB Pennsylvania Portfolio and AB Virginia Portfolio (collectively referred to as the “Portfolios”)), including the portfolios of investments, as of May 31, 2020, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of each of the Portfolios comprising AB Municipal Income Fund II at May 31, 2020, the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended and their financial highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

These financial statements are the responsibility of the Fund’s management. Our responsibility is to express an opinion on each of the Portfolios’ financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Fund is not required to have, nor were we engaged to perform, an audit of the Fund’s internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion.



184 ^\| AB MUNICIPAL INCOME FUND II		abfunds.com

REPORT OF INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM (continued)

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of May 31, 2020, by correspondence with the custodian and others or by other appropriate auditing procedures where replies from others were not received. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

LOGO

We have served as the auditor of one or more of the AB investment companies since 1968.

New York, New York

July 27, 2020



abfunds.com		AB MUNICIPAL INCOME FUND II ^\| 185

BOARD OF DIRECTORS

Marshall C. Turner, Jr.,⁽¹⁾

Chairman

Jorge A. Bermudez⁽¹⁾

Michael J. Downey⁽¹⁾

Nancy P. Jacklin⁽¹⁾

Robert M. Keith, President and Chief Executive Officer

Jeanette Loeb⁽¹⁾

Carol C. McMullen⁽¹⁾

Garry L. Moody⁽¹⁾

Earl D. Weiner⁽¹⁾

OFFICERS

R. B. “Guy” Davidson III,⁽²⁾⁽³⁾Senior Vice President

Terrance T. Hults,⁽²⁾ Vice President

Matthew J. Norton,⁽²⁾ Vice President

Andrew D. Potter,⁽²⁾ Vice President

Emilie D. Wrapp, Secretary

Michael B. Reyes, Senior Analyst

Joseph J. Mantineo, Treasurer and Chief Financial Officer

Phyllis J. Clarke, Controller

Vincent S. Noto, Chief Compliance Officer

Custodian and Accounting Agent

State Street Bank and Trust Company

State Street Corporation CCB/5

1 Iron Street

Boston, MA 02210

Principal Underwriter

AllianceBernstein Investments, Inc.
1345 Avenue of the Americas
New York, NY 10105

Legal Counsel

Seward & Kissel LLP
One Battery Park Plaza
New York, NY 10004

Independent Registered Public Accounting Firm

Ernst & Young LLP
5 Times Square
New York, NY 10036

Transfer Agent

AllianceBernstein Investor
Services, Inc.

P.O. Box 786003
San Antonio, TX 78278-6003

Toll-Free (800) 221-5672

1	Member of the Audit Committee, the Governance and Nominating Committee, and the Independent Directors Committee.

The day-to-day management of, and investment decisions for, the Fund’s portfolios are made by the Adviser’s Municipal Bond Investment Team. Messrs. Davidson, Hults, Norton and Potter are the investment professionals with the most significant responsibility for the day-to-day management of the Fund’s portfolios.

3	Mr. Davidson is expected to retire from the Adviser effective December 30, 2020.



186 ^\| AB MUNICIPAL INCOME FUND II		abfunds.com

MANAGEMENT OF THE FUND

Board of Trustees Information

The business and affairs of the Fund are managed under the direction of the Board of Trustees. Certain information concerning the Fund’s Trustees is set forth below.


NAME, *ADDRESS, AGE AND (YEAR FIRST ELECTED)	PRINCIPAL OCCUPATION(S), DURING PAST FIVE YEARS AND OTHER INFORMATION***	PORTFOLIOS IN AB FUND COMPLEX OVERSEEN BY TRUSTEE		OTHER PUBLIC COMPANY DIRECTORSHIPS CURRENTLY HELD BY TRUSTEE
INTERESTED TRUSTEE

Robert M. Keith,^# 1345 Avenue of the Americas New York, NY 10105 60 (2010)	Senior Vice President of AllianceBernstein L.P. (the “Adviser”) and the head of AllianceBernstein Investments, Inc. (“ABI”) since July 2008; Director of ABI and President of the AB Mutual Funds. Previously, he served as Executive Managing Director of ABI from December 2006 to June 2008. Prior to joining ABI in 2006, Executive Managing Director of Bernstein Global Wealth Management, and prior thereto, Senior Managing Director and Global Head of Client Service and Sales of the Adviser’s institutional investment management business since 2004. Prior thereto, he was Managing Director and Head of North American Client Service and Sales in the Adviser’s institutional investment management business with which he had been associated since prior to 2004.		78	None



abfunds.com		AB MUNICIPAL INCOME FUND II ^\| 187

MANAGEMENT OF THE FUND (continued)


NAME, *ADDRESS, AGE AND (YEAR FIRST ELECTED)	PRINCIPAL OCCUPATION(S), DURING PAST FIVE YEARS AND OTHER INFORMATION***	PORTFOLIOS IN AB FUND COMPLEX OVERSEEN BY TRUSTEE		OTHER PUBLIC COMPANY DIRECTORSHIPS CURRENTLY HELD BY TRUSTEE
INDEPENDENT TRUSTEE

Marshall C. Turner, Jr.,^## Chairman of the Board 78 (2005)	Private Investor since prior to 2015. Former Chairman and CEO of Dupont Photomasks, Inc. (components of semi-conductor manufacturing). He has extensive operating leadership, and venture capital investing experience, including five interim or full-time CEO roles, and prior service as general partner of institutional venture capital partnerships. He also has extensive non-profit board leadership experience, and currently serves on the boards of two education and science-related non-profit organizations. He has served as a director of one AB Fund since 1992, and director or trustee of all AB Funds since 2005. He has been Chairman of the AB Funds since January 2014, and the Chairman of the Independent Directors Committees of such AB Funds since February 2014.		78	Xilinx, Inc. (programmable logic semi-conductors) since 2007



188 ^\| AB MUNICIPAL INCOME FUND II		abfunds.com

MANAGEMENT OF THE FUND (continued)


NAME, *ADDRESS, AGE AND (YEAR FIRST ELECTED)	PRINCIPAL OCCUPATION(S), DURING PAST FIVE YEARS AND OTHER INFORMATION***	PORTFOLIOS IN AB FUND COMPLEX OVERSEEN BY TRUSTEE		OTHER PUBLIC COMPANY DIRECTORSHIPS CURRENTLY HELD BY TRUSTEE
INDEPENDENT TRUSTEE (continued)

Jorge A. Bermudez,^## 69 (2020)	Private investor since prior to 2015. Former Chief Risk Officer of Citigroup, Inc., a global financial services company, from November 2007 to March 2008, Chief Executive Officer of Citigroup’s Commercial Business Group in North America and Citibank Texas from 2005 to 2007, and a variety of other executive and leadership roles at various businesses within Citigroup prior to then; Chairman (2018) of the Texas A&M Foundation Board of Trustees (Trustee since 2013) and Chairman of the Smart Grid Center Board at Texas A&M University since 2012; director of, among others, Citibank N.A. from 2005 to 2008, the Federal Reserve Bank of Dallas, Houston Branch from 2009 to 2011, the Federal Reserve Bank of Dallas from 2011 to 2017, and the Electric Reliability Council of Texas from 2010 to 2016. He has served as director or trustee of the AB Funds since January 2020.		78	Moody’s Corporation since April 2011


Michael J. Downey,^## 76 (2005)	Private Investor since prior to 2015. Formerly, Chairman of The Asia Pacific Fund, Inc. (registered investment company) since prior to 2015 until January 2019. From 1987 until 1993, Chairman and CEO of Prudential Mutual Fund Management, director of the Prudential mutual funds, and member of the Executive Committee of Prudential Securities, Inc. He has served as a director or trustee of the AB Funds since 2005.		78	None



abfunds.com		AB MUNICIPAL INCOME FUND II ^\| 189

MANAGEMENT OF THE FUND (continued)


NAME, *ADDRESS, AGE AND (YEAR FIRST ELECTED)	PRINCIPAL OCCUPATION(S), DURING PAST FIVE YEARS AND OTHER INFORMATION***	PORTFOLIOS IN AB FUND COMPLEX OVERSEEN BY TRUSTEE		OTHER PUBLIC COMPANY DIRECTORSHIPS CURRENTLY HELD BY TRUSTEE
INDEPENDENT TRUSTEE (continued)

Nancy P. Jacklin,^## 72 (2006)	Private Investor since prior to 2015. Professorial Lecturer at the Johns Hopkins School of Advanced International Studies (2008-2015). U.S. Executive Director of the International Monetary Fund (which is responsible for ensuring the stability of the international monetary system), (December 2002-May 2006); Partner, Clifford Chance (1992-2002); Sector Counsel, International Banking and Finance, and Associate General Counsel, Citicorp (1985-1992); Assistant General Counsel (International), Federal Reserve Board of Governors (1982-1985); and Attorney Advisor, U.S. Department of the Treasury (1973-1982). Member of the Bar of the District of Columbia and of New York; and member of the Council on Foreign Relations. She has served as a director or trustee of the AB Funds since 2006 and has been Chair of the Governance and Nominating Committees of the AB Funds since August 2014.		78	None


Jeanette Loeb,^## 68 (2020)	Chief Executive Officer of PetCareRx (e-commerce pet pharmacy) from 2002 to 2011 and 2015 to present. Director of New York City Center since 2005. She was a director of AB Multi-Manager Alternative Fund, Inc. (fund of hedge funds) from 2012 to 2018. Formerly, affiliated with Goldman Sachs Group, Inc. (financial services) from 1977 to 1994, including as a partner thereof from 1986 to 1994. She has served as a Director of the AB Funds since April 2020.		78	Apollo Investment Corp. (business development company) since August 2011



190 ^\| AB MUNICIPAL INCOME FUND II		abfunds.com

MANAGEMENT OF THE FUND (continued)


NAME, *ADDRESS, AGE AND (YEAR FIRST ELECTED)	PRINCIPAL OCCUPATION(S), DURING PAST FIVE YEARS AND OTHER INFORMATION***	PORTFOLIOS IN AB FUND COMPLEX OVERSEEN BY TRUSTEE		OTHER PUBLIC COMPANY DIRECTORSHIPS CURRENTLY HELD BY TRUSTEE
INDEPENDENT TRUSTEE (continued)

Carol C. McMullen,^## 64 (2016)	Managing Director of Slalom Consulting (consulting) since 2014, private investor and member of the Advisory Board of Butcher Box (since 2018). Formerly, member, Partners Healthcare Investment Committee (2010-2019); Director of Norfolk & Dedham Group (mutual property and casualty insurance) from 2011 until November 2016; Director of Partners Community Physicians Organization (healthcare) from 2014 until December 2016; and Managing Director of The Crossland Group (consulting) from 2012 until 2013. She has held a number of senior positions in the asset and wealth management industries, including at Eastern Bank (where her roles included President of Eastern Wealth Management), Thomson Financial (Global Head of Sales for Investment Management), and Putnam Investments (where her roles included Chief Investment Officer, Core and Growth and Head of Global Investment Research). She has served on a number of private company and non-profit boards, and as a director or trustee of the AB Funds since June 2016.		78	None



abfunds.com		AB MUNICIPAL INCOME FUND II ^\| 191

MANAGEMENT OF THE FUND (continued)


NAME, *ADDRESS, AGE AND (YEAR FIRST ELECTED)	PRINCIPAL OCCUPATION(S), DURING PAST FIVE YEARS AND OTHER INFORMATION***	PORTFOLIOS IN AB FUND COMPLEX OVERSEEN BY TRUSTEE		OTHER PUBLIC COMPANY DIRECTORSHIPS CURRENTLY HELD BY TRUSTEE
INDEPENDENT TRUSTEE (continued)

Garry L. Moody,^## 68 (2008)	Private Investor since prior to 2015. Formerly, Partner, Deloitte & Touche LLP (1995-2008) where he held a number of senior positions, including Vice Chairman, and U.S. and Global Investment Management Practice Managing Partner; President, Fidelity Accounting and Custody Services Company (1993-1995), where he was responsible for accounting, pricing, custody and reporting for the Fidelity mutual funds; and Partner, Ernst & Young LLP (1975-1993), where he served as the National Director of Mutual Fund Tax Services and Managing Partner of its Chicago Office Tax department. He is a member of the Trustee Advisory Board of BoardIQ, a biweekly publication focused on issues and news affecting directors of mutual funds. He is also a member of the Investment Company Institute’s Board of Governors and the Independent Directors Council’s Governing Council. He has served as a director or trustee, and as Chairman of the Audit Committees, of the AB Funds since 2008.		78	None



192 ^\| AB MUNICIPAL INCOME FUND II		abfunds.com

MANAGEMENT OF THE FUND (continued)


NAME, *ADDRESS, AGE AND (YEAR FIRST ELECTED)	PRINCIPAL OCCUPATION(S), DURING PAST FIVE YEARS AND OTHER INFORMATION***	PORTFOLIOS IN AB FUND COMPLEX OVERSEEN BY TRUSTEE		OTHER PUBLIC COMPANY DIRECTORSHIPS CURRENTLY HELD BY TRUSTEE
INDEPENDENT TRUSTEE (continued)

Earl D. Weiner,^## 80 (2007)	Senior Counsel since 2017, Of Counsel from 2007 to 2016, and Partner prior to then, of the law firm Sullivan & Cromwell LLP. He is a former member of the ABA Federal Regulation of Securities Committee Task Force to draft editions of the Fund Director’s Guidebook. He also serves as a director or trustee of various non-profit organizations and has served as Chairman or Vice Chairman of a number of them. He has served as a director or trustee of the AB Funds since 2007 and served as Chairman of the Governance and Nominating Committees of the AB Funds from 2007 until August 2014.		78	None

*	The address for each of the Fund’s disinterested Trustees is c/o AllianceBernstein L.P., Attention: Legal and Compliance Department — Mutual Fund Legal, 1345 Avenue of the Americas, New York, NY 10105.

**	There is no stated term of office for the Fund’s Trustees.

***

The information above includes each Trustee’s principal occupation during the last five years and other information relating to the experience, attributes and skills relevant to each Trustee’s qualifications to serve as a Trustee, which led to the conclusion that each Trustee should serve as a Trustee for the Fund.

#	Mr. Keith is an “interested person” of the Fund, as defined in the 1940 Act, due to his position as a Senior Vice President of the Adviser.

##	Member of the Audit Committee, the Governance and Nominating Committee and the Independent Directors Committee.



abfunds.com		AB MUNICIPAL INCOME FUND II ^\| 193

MANAGEMENT OF THE FUND (continued)

Officer Information

Certain information concerning the Fund’s Officers is listed below.


NAME, ADDRESS* AND AGE	POSITION(S) HELD WITH FUND	PRINCIPAL OCCUPATION DURING PAST FIVE YEARS**
Robert M. Keith 60	President and Chief Executive Officer	See biography above.

R.B. “Guy” Davidson III^{^} 59	Senior Vice President	Senior Vice President of the Adviser**, with which he has been associated since prior to 2015. He is also Chief Investment Officer – Municipal Business.

Terrance T. Hults 54	Vice President	Senior Vice President of the Adviser**, with which he has been associated since prior to 2015. He is also Co-Head Municipal Portfolio Management.

Matthew J. Norton 37	Vice President	Senior Vice President of the Adviser**, with which he has been associated since prior to 2015. He is also Co-Head Municipal Portfolio Management.

Andrew D. Potter 35	Vice President	Vice President of the Adviser**, with which he has been associated since prior to 2015.

Emilie D. Wrapp 64	Secretary	Senior Vice President, Assistant General Counsel and Assistant Secretary of ABI**, with which she has been associated since prior to 2015.

Michael B. Reyes 43	Senior Analyst	Vice President of the Adviser**, with which he has been associated since prior to 2015.

Joseph J. Mantineo 61	Treasurer and Chief Financial Officer	Senior Vice President of AllianceBernstein Investor Services, Inc. (“ABIS”)**, with which he has been associated since prior to 2015.

Phyllis J. Clarke 59	Controller	Vice President of the ABIS**, with which she has been associated since prior to 2015.

Vincent S. Noto 55	Chief Compliance Officer	Senior Vice President since 2015 and Mutual Fund Chief Compliance Officer of the Adviser** since prior to 2015.

*	The address for each of the Fund’s Officers is 1345 Avenue of the Americas, New York, NY 10105.

**	The Adviser, ABI and ABIS are affiliates of the Fund.

^	Mr. Davidson is expected to retire from the Adviser effective December 30, 2020.

The Fund’s Statement of Additional Information (“SAI”) has additional information about the Fund’s Trustees and Officers and is available without charge upon request. Contact your financial representative or AB at (800) 227-4618, or visit www.abfunds.com, for a free prospectus or SAI.



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Operation and Effectiveness of the Portfolios’ Liquidity Risk Management Program:

In October 2016, the Securities and Exchange Commission (“SEC”) adopted the open-end fund liquidity rule (the “Liquidity Rule”). In June 2018 the SEC adopted a requirement that funds disclose information about the operation and effectiveness of their Liquidity Risk Management Program (“LRMP”) in their reports to shareholders.

One of the requirements of the Liquidity Rule is for the Portfolios to designate an Administrator of the Portfolios’ Liquidity Risk Management Program. The Administrator of the Portfolios’ LRMP is AllianceBernstein L.P., the Portfolios’ investment adviser (the “Adviser”). The Adviser has delegated the responsibility to its Liquidity Risk Management Committee (the “Committee”). Another requirement of the Liquidity Rule is for the Portfolios’ Board of Directors (the “Fund Board”) to receive an annual written report from the Administrator of the LRMP, which addresses the operation of the Portfolios’ LRMP and assesses its adequacy and effectiveness. The Adviser provided the Fund Board with such annual report during the first quarter of 2020, which covered the period December 1, 2018 through December 31, 2019 (the “Program Reporting Period”).

The LRMP’s principal objectives include supporting the Portfolios’ compliance with limits on investments in illiquid assets and mitigating the risk that the Portfolios will be unable to meet their redemption obligations in a timely manner. Pursuant to the LRMP, the Portfolios classify the liquidity of their portfolio investments into one of the four categories defined by the SEC: Highly Liquid, Moderately Liquid, Less Liquid, and Illiquid. These classifications are reported to the SEC on Form N-PORT.

During the Program Reporting Period, the Committee reviewed whether the Portfolios’ strategy is appropriate for an open-end structure, taking into account any holdings of less liquid and illiquid assets. The Committee also performed an analysis to determine whether the Portfolios are required to maintain a Highly Liquid Investment Minimum (“HLIM”). If the Portfolios participated in derivative transactions, the exposure from such transactions were considered in the LRMP. The Committee also incorporated the following information when determining the Portfolios’ reasonably anticipated trading size for purposes of liquidity monitoring: historical net redemption activity, the Portfolios’ concentration in an issuer, shareholder concentration, investment performance, total net assets, and distribution channels.

The Adviser informed the Fund Board that the Committee believes the Portfolios’ LRMP is adequately designed, has been implemented as intended, and has operated effectively since its inception. No material exceptions have been noted since the implementation of the LRMP, and there were no liquidity events that impacted the Portfolios or their ability to timely meet redemptions during the Program Reporting Period.



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Information Regarding the Review and Approval of the Advisory Agreement in Respect of Each Fund

The disinterested trustees (the “directors”) of AB Municipal Income Fund II (the “Company”) unanimously approved the continuance of the Company’s Advisory Agreement with the Adviser in respect of each of the portfolios listed below (each, a “Fund” and collectively, the “Funds”) at a meeting held on November 4-6, 2019 (the “Meeting”):¹

• AB Arizona Portfolio

• AB Massachusetts Portfolio

• AB Minnesota Portfolio

• AB New Jersey Portfolio

• AB Ohio Portfolio

• AB Pennsylvania Portfolio

• AB Virginia Portfolio

Prior to approval of the continuance of the Advisory Agreement in respect of each Fund, the directors had requested from the Adviser, and received and evaluated, extensive materials. They reviewed the proposed continuance of the Advisory Agreement with the Adviser and with experienced counsel who are independent of the Adviser, who advised on the relevant legal standards. The directors also reviewed additional materials, including comparative analytical data prepared by the Senior Analyst for each Fund. The directors also discussed the proposed continuances in private sessions with counsel.

The directors considered their knowledge of the nature and quality of the services provided by the Adviser to the Funds gained from their experience as directors or trustees of most of the registered investment companies advised by the Adviser, their overall confidence in the Adviser’s integrity and competence they have gained from that experience, the Adviser’s initiative in identifying and raising potential issues with the directors and its responsiveness, frankness and attention to concerns raised by the directors in the past, including the Adviser’s willingness to consider and implement organizational and operational changes designed to improve investment results and the services provided to the AB Funds. The directors noted that they have four regular meetings each year, at each of which they review extensive materials and information from the Adviser, including information on the investment performance of the Funds and the underlying fund advised by the Adviser in which the Funds invest.

1	Following transactions completed on November 13, 2019 that may have been deemed to have been an “assignment” causing termination of the Fund’s investment advisory agreement, a new investment advisory agreement, having the same terms as the prior one, was entered into by the Fund and the Adviser.



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The directors also considered all factors they believed relevant, including the specific matters discussed below. During the course of their deliberations, the directors evaluated, among other things, the reasonableness of the advisory fee in respect of each Fund. The directors did not identify any particular information that was all-important or controlling, and different directors may have attributed different weights to the various factors. The directors determined that the selection of the Adviser to manage each Fund and the overall arrangements between each Fund and the Adviser, as provided in the Advisory Agreement, including the advisory fee, were fair and reasonable in light of the services performed, expenses incurred and such other matters as the directors considered relevant in the exercise of their business judgment. The material factors and conclusions that formed the basis for the directors’ determinations included the following:

Nature, Extent and Quality of Services Provided

The directors considered the scope and quality of services provided by the Adviser under the Advisory Agreement, including the quality of the investment research capabilities of the Adviser and the other resources it has dedicated to performing services for each Fund. The directors noted that the Adviser from time to time reviews each Fund’s investment strategies and from time to time proposes changes intended to improve a Fund’s relative or absolute performance for the directors’ consideration. They also noted the professional experience and qualifications of each Fund’s portfolio management team and other senior personnel of the Adviser. The directors also considered that the Advisory Agreement provides that each Fund will reimburse the Adviser for the cost to it of providing certain clerical, accounting, administrative and other services to such Fund by employees of the Adviser or its affiliates. Requests for these reimbursements are made on a quarterly basis and subject to approval by the directors. Reimbursements, to the extent requested and paid in respect of a Fund, result in a higher rate of total compensation from such Fund to the Adviser than the fee rate stated in the Advisory Agreement. The directors noted that the methodology used to determine the reimbursement amounts had been reviewed by an independent consultant retained by the Funds’ former Senior Officer/Independent Compliance Officer. The quality of administrative and other services, including the Adviser’s role in coordinating the activities of each Fund’s other service providers, also was considered. The directors concluded that, overall, they were satisfied with the nature, extent and quality of services provided to each of the Funds under the Advisory Agreement.

Costs of Services Provided and Profitability

The directors reviewed a schedule of the revenues and expenses and related notes indicating the profitability of each Fund to the Adviser for calendar years 2017 and 2018 that had been prepared with an expense allocation methodology arrived at in consultation with an independent



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consultant retained by the Funds’ former Senior Officer/Independent Compliance Officer. The directors noted the assumptions and methods of allocation used by the Adviser in preparing fund-specific profitability data and understood that there are a number of potentially acceptable allocation methodologies for information of this type. The directors noted that the profitability information reflected all revenues and expenses of the Adviser’s relationships with the Funds, including those relating to its subsidiaries that provide transfer agency and distribution services to the Funds. The directors recognized that it is difficult to make comparisons of the profitability of the Advisory Agreement with the profitability of fund advisory contracts for unaffiliated funds because comparative information is not generally publicly available and is affected by numerous factors. The directors focused on the profitability of the Adviser’s relationships with the Funds before taxes and distribution expenses. The directors noted that AB Minnesota Portfolio was not profitable to the Adviser in 2018. The directors concluded that the Adviser’s level of profitability from its relationship with AB Minnesota Portfolio in 2017 and with each other Fund was not unreasonable.

Fall-Out Benefits

The directors considered the other benefits to the Adviser and its affiliates from their relationships with the Funds and the underlying fund advised by the Adviser in which the Funds invest, including, but not limited to, benefits relating to 12b-1 fees and sales charges received by the Funds’ principal underwriter (which is a wholly owned subsidiary of the Adviser) in respect of certain classes of the Funds’ shares; and transfer agency fees paid by the Funds to a wholly owned subsidiary of the Adviser. The directors recognized that the Adviser’s profitability would be somewhat lower, and that AB Minnesota Portfolio’s recent unprofitability to the Adviser would be exacerbated, without these benefits. The directors understood that the Adviser also might derive reputational and other benefits from its association with the Funds.

Investment Results

In addition to the information reviewed by the directors in connection with the Meeting, the directors receive detailed performance information for each Fund at each regular Board meeting during the year.

At the Meeting, the directors reviewed performance information prepared by an independent service provider (the “15(c) service provider”), showing the performance of the Class A Shares of each Fund against a group of similar funds (“peer group”) and a larger group of similar funds (“peer universe”), each selected by the 15(c) service provider, and information prepared by the Adviser showing performance of the Class A Shares of each Fund against a broad-based securities market index, in each case for the 1-, 3-, 5- and 10-year periods ended July 31, 2019 and (in the case of comparisons with the broad-based securities market index) for the period



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from inception. Based on their review, the directors concluded that each Fund’s investment performance was acceptable.

Advisory Fees and Other Expenses

The directors considered the advisory fee rate payable by each Fund to the Adviser and information prepared by the 15(c) service provider concerning advisory fee rates payable by other funds in the same category as such Fund. The directors recognized that it is difficult to make comparisons of advisory fees because there are variations in the services that are included in the fees payable by other funds. The directors compared each Fund’s contractual effective advisory fee rate with a peer group median and noted that it was above the median in the case of each of AB Minnesota Portfolio, AB New Jersey Portfolio and AB Virginia Portfolio. The directors took into account the impact on the advisory fee rate of the administrative expense reimbursement paid to the Adviser in the latest fiscal year.

The Adviser informed the directors that there were no institutional products managed by the Adviser that utilize investment strategies similar to those of any of the Funds.

In connection with their review of each Fund’s advisory fee, the directors also considered the total expense ratio of the Class A shares of each Fund in comparison to a peer group and a peer universe selected by the 15(c) service provider. The expense ratio of each Fund was based on the Fund’s latest fiscal year and the directors considered the Adviser’s expense cap for each Fund. The directors noted that it was likely that the expense ratios of some of the other funds in each Fund’s category were lowered by waivers or reimbursements by those funds’ investment advisers, which in some cases might be voluntary or temporary. The directors view expense ratio information as relevant to their evaluation of the Adviser’s services because the Adviser is responsible for coordinating services provided to the Funds by others. Based on their review, the directors concluded that the expense ratios for AB Arizona Portfolio, AB Massachusetts Portfolio and AB Virginia Portfolio were acceptable. The directors noted that the expense ratio for each of AB Minnesota Portfolio, AB New Jersey Portfolio, AB Ohio Portfolio and AB Pennsylvania Portfolio was above the median. After reviewing and discussing the Adviser’s explanations of the reasons for this, the directors concluded that each Fund’s expense ratio was acceptable.

Economies of Scale

The directors noted that the advisory fee schedule for the Funds contains breakpoints that reduce the fee rates on assets above specified levels. The directors took into consideration prior presentations by an independent consultant on economies of scale in the mutual fund industry and for the AB Funds, and presentations from time to time by the Adviser concerning certain of its views on economies of scale. The directors also previously



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discussed economies of scale with an independent fee consultant. The directors also had requested and received from the Adviser certain updates on economies of scale in advance of the Meeting. The directors believe that economies of scale may be realized (if at all) by the Adviser across a variety of products and services, and not only in respect of a single fund. The directors noted that there is no established methodology for setting breakpoints that give effect to the fund-specific services provided by a fund’s adviser and to the economies of scale that an adviser may realize in its overall mutual fund business or those components of it which directly or indirectly affect a fund’s operations. The directors observed that in the mutual fund industry as a whole, as well as among funds similar to the Funds, there is no uniformity or pattern in the fees and asset levels at which breakpoints (if any) apply. The directors also noted that the advisory agreements for many funds do not have breakpoints at all. Having taken these factors into account, the directors concluded that the Funds’ shareholders would benefit from a sharing of economies of scale in the event a Fund’s net assets exceed a breakpoint in the future.



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This page is not part of the Shareholder Report or the Financial Statements.

AB FAMILY OF FUNDS

US EQUITY

CORE

Core Opportunities Fund

FlexFee^™ US Thematic Portfolio

Select US Equity Portfolio

GROWTH

Concentrated Growth Fund

Discovery Growth Fund

FlexFee^™ Large Cap Growth Portfolio

Growth Fund

Large Cap Growth Fund

Small Cap Growth Portfolio

VALUE

Discovery Value Fund

Equity Income Fund

Relative Value Fund

Small Cap Value Portfolio

Value Fund

INTERNATIONAL/ GLOBAL EQUITY

CORE

FlexFee^™ International Strategic Core Portfolio

Global Core Equity Portfolio

International Portfolio

International Strategic Core Portfolio

Sustainable Global Thematic Fund

Tax-Managed International Portfolio

Tax-Managed Wealth Appreciation Strategy

Wealth Appreciation Strategy

INTERNATIONAL/ GLOBAL EQUITY (continued)

GROWTH

Concentrated International Growth Portfolio

FlexFee^™ Emerging Markets Growth Portfolio

Sustainable International Thematic Fund

VALUE

All China Equity Portfolio

International Value Fund

FIXED INCOME

MUNICIPAL

High Income Municipal Portfolio

Intermediate California Municipal Portfolio

Intermediate Diversified Municipal Portfolio

Intermediate New York Municipal Portfolio

Municipal Bond Inflation Strategy

Tax-Aware Fixed Income Opportunities Portfolio¹

National Portfolio

Arizona Portfolio

California Portfolio

Massachusetts Portfolio

Minnesota Portfolio

New Jersey Portfolio

New York Portfolio

Ohio Portfolio

Pennsylvania Portfolio

Virginia Portfolio

FIXED INCOME (continued)

TAXABLE

Bond Inflation Strategy

FlexFee^™ High Yield Portfolio

FlexFee^™ International Bond Portfolio

Global Bond Fund

High Income Fund

Income Fund

Intermediate Duration Portfolio

Limited Duration High Income Portfolio

Short Duration Income Portfolio

Short Duration Portfolio

Total Return Bond Portfolio

ALTERNATIVES

All Market Real Return Portfolio

Global Real Estate Investment Fund

Select US Long/Short Portfolio

Unconstrained Bond Fund

MULTI-ASSET

All Market Income Portfolio

All Market Total Return Portfolio

Conservative Wealth Strategy

Emerging Markets Multi-Asset Portfolio

Global Risk Allocation Fund

Tax-Managed All Market Income Portfolio

CLOSED-END FUNDS

AllianceBernstein Global High Income Fund

AllianceBernstein National Municipal Income Fund

We also offer Government Money Market Portfolio, which serves as the money market fund exchange vehicle for the AB mutual funds. You could lose money by investing in the Fund. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. The Fund may impose a fee upon sale of your shares or may temporarily suspend your ability to sell shares if the Fund’s liquidity falls below required minimums because of market conditions or other factors. An investment in the Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The Fund’s sponsor has no legal obligation to provide financial support to the Fund, and you should not expect that the sponsor will provide financial support to the Fund at any time.

1	Prior to February 5, 2020, Tax-Aware Fixed Income Opportunities Portfolio was named Tax-Aware Fixed Income Portfolio.



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208 ^\| AB MUNICIPAL INCOME FUND II		abfunds.com

LOGO

AB MUNICIPAL INCOME FUND II

1345 Avenue of the Americas

New York, NY 10105

800 221 5672

MIFII-0151-0520 LOGO

ITEM 2. CODE OF ETHICS.

(a) The registrant has adopted a code of ethics that applies to its principal executive officer, principal financial officer and principal accounting officer. A copy of the registrant’s code of ethics is filed herewith as Exhibit 12(a)(1).

(b) During the period covered by this report, no material amendments were made to the provisions of the code of ethics adopted in 2(a) above.

(c) During the period covered by this report, no implicit or explicit waivers to the provisions of the code of ethics adopted in 2(a) above were granted.

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.

The registrant’s Board of Directors has determined that independent directors Garry L. Moody and Marshall C. Turner, Jr. qualify as audit committee financial experts.

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

(a) - (c) The following table sets forth the aggregate fees billed by the independent registered public accounting firm Ernst & Young LLP, for the Fund’s last two fiscal years for professional services rendered for: (i) the audit of the Fund’s annual financial statements included in the Fund’s annual report to stockholders; (ii) assurance and related services that are reasonably related to the performance of the audit of the Fund’s financial statements and are not reported under (i), which include advice and education related to accounting and auditing issues and quarterly press release review (for those Funds which issue press releases), and preferred stock maintenance testing (for those Funds that issue preferred stock); and (iii) tax compliance, tax advice and tax return preparation.


		Audit Fees		Audit-Related Fees		Tax Fees
Arizona Portfolio	2019	$	28,895	$	—	$	18,763
	2020	$	28,895	$	—	$	18,094
Massachusetts Portfolio	2019	$	30,781	$	—	$	18,763
	2020	$	30,781	$	—	$	18,094
Minnesota Portfolio	2019	$	30,781	$	—	$	18,763
	2020	$	30,781	$	—	$	18,094
New Jersey Portfolio	2019	$	30,781	$	—	$	18,763
	2020	$	30,781	$	—	$	18,094
Ohio Portfolio	2019	$	30,781	$	—	$	18,763
	2020	$	30,781	$	—	$	18,094
Pennsylvania Portfolio	2019	$	28,895	$	—	$	18,763
	2020	$	28,895	$	—	$	18,094
Virginia Portfolio	2019	$	30,781	$	—	$	18,763
	2020	$	30,781	$	—	$	18,094

(d) Not applicable.

(e) (1) Beginning with audit and non-audit service contracts entered into on or after May 6, 2003, the Fund’s Audit Committee policies and procedures require the pre-approval of all audit and non-audit services provided to the Fund by the Fund’s independent registered public accounting firm. The Fund’s Audit Committee policies and procedures also require pre-approval of all audit and non-audit services provided to the Adviser and Service Affiliates to the extent that these services are directly related to the operations or financial reporting of the Fund.

(e) (2) All of the amounts for Audit Fees, Audit-Related Fees and Tax Fees in the table under Item 4 (a)–(c) are for services pre-approved by the Fund’s Audit Committee.

(f) Not applicable.

(g) The following table sets forth the aggregate non-audit services provided to the Fund, the Fund’s Adviser and entities that control, are controlled by or under common control with the Adviser that provide ongoing services to the Fund:


		All Fees for Non-Audit Services Provided to the Portfolio, the Adviser and Service Affiliates		The Total Amount of Foregoing Column Pre-approved by the Audit Committee (Portion Comprised of Audit Related Fees) (Portion Comprised of Tax Fees)
Arizona Portfolio	2019	$	634,166	$	18,763
				$	—
				$	(18,763	)
	2020	$	747,975	$	18,094
				$	—
				$	(18,094	)
Massachusetts Portfolio	2019	$	634,166	$	18,763
				$	—
				$	(18,763	)
	2020	$	747,975	$	18,094
				$	—
				$	(18,094	)
Minnesota Portfolio	2019	$	634,166	$	18,763
				$	—
				$	(18,763	)
	2020	$	747,975	$	18,094
				$	—
				$	(18,094	)
New Jersey Portfolio	2019	$	634,166	$	18,763
				$	—
				$	(18,763	)
	2020	$	747,975	$	18,094
				$	—
				$	(18,094	)
Ohio Portfolio	2019	$	634,166	$	18,763
				$	—
				$	(18,763	)
	2020	$	747,975	$	18,094
				$	—
				$	(18,094	)
Pennsylvania Portfolio	2019	$	634,166	$	18,763
				$	—
				$	(18,763	)
	2020	$	747,975	$	18,094
				$	—
				$	(18,094	)
Virginia Portfolio	2019	$	634,166	$	18,763
				$	—
				$	(18,763	)
	2020	$	747,975	$	18,094
				$	—
				$	(18,094	)

(h) The Audit Committee of the Fund has considered whether the provision of any non-audit services not pre-approved by the Audit Committee provided by the Fund’s independent registered public accounting firm to the Adviser and Service Affiliates is compatible with maintaining the auditor’s independence.

ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.

Not applicable to the registrant.

ITEM 6. INVESTMENTS.

Please see Schedule of Investments contained in the Report to Shareholders included under Item 1 of this Form N-CSR.

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

Not applicable to the registrant.

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

Not applicable to the registrant.

ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.

Not applicable to the registrant.

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 Directors since the Fund last provided disclosure in response to this item.

ITEM

11. CONTROLS AND PROCEDURES.

(a) The registrant’s principal executive officer and principal financial officer have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-2(c) under the Investment Company Act of 1940, as amended) are effective at the reasonable assurance level 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 changes in the registrant’s internal controls over financial reporting that occurred during the second fiscal quarter of the period that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

ITEM 12. DISCLOSURE OF SECURITIES LENDING ACTIVITIES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

Not applicable to the registrant.

ITEM 13. EXHIBITS.

The following exhibits are attached to this Form N-CSR:


EXHIBIT NO.		DESCRIPTION OF EXHIBIT

12 (a) (1)		Code of Ethics that is subject to the disclosure of Item 2 hereof

12 (b) (1)		Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

12 (b) (2)		Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

12 (c)		Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

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.

(Registrant): AB Municipal Income Fund II


By:		/s/ Robert M. Keith
		Robert M. Keith
		President

Date:		July 30, 2020

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/ Robert M. Keith
		Robert M. Keith
		President

Date:		July 30, 2020

By:		/s/ Joseph J. Mantineo
		Joseph J. Mantineo
		Treasurer and Chief Financial Officer

Date:		July 30, 2020

Ab Municipal Income Fund Ii N-CSRCertified annual shareholder report (management investment company)