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 811-10501

Name of Fund: BlackRock Municipal 2018 Term Trust (BPK)

Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809

Name and address of agent for service: Donald C. Burke, Chief Executive Officer, BlackRock Municipal 2018 Term Trust, 800 Scudders Mill Road, Plainsboro, NJ, 08536. Mailing address: P.O. Box 9011, Princeton, NJ, 08543-9011

Registrant’s telephone number, including area code: (800) 882-0052, Option 4

Date of fiscal year end: 12/31/2008

Date of reporting period: 12/31/2008

 

 


Item 1 – Report to Shareholders



 

 

 

 

 

 

 

 

 

 

 

EQUITIES

 

FIXED INCOME

 

REAL ESTATE

 

LIQUIDITY

 

ALTERNATIVES

 

BLACKROCK SOLUTIONS


 

 

 

 


Annual Report


(BLACK ROCK LOGO)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DECEMBER 31, 2008

 

 

 

 

 

 

 

BlackRock Insured Municipal Term Trust Inc. (BMT)

BlackRock Municipal 2018 Term Trust (BPK)

BlackRock Municipal 2020 Term Trust (BKK)

BlackRock Strategic Municipal Trust (BSD)

BlackRock California Municipal 2018 Term Trust (BJZ)

BlackRock New York Municipal 2018 Term Trust (BLH)

BlackRock Pennsylvania Strategic Municipal Trust (BPS)

NOT FDIC INSURED
MAY LOSE VALUE
NO BANK GUARANTEE



 


Table of Contents


 

 

   

Page

A Letter to Shareholders

3

Annual Report:

 

Trust Summaries

4

The Benefits and Risks of Leveraging

11

Derivative Instruments

11

Financial Statements:

 

Schedules of Investments

12

Statements of Assets and Liabilities

30

Statements of Operations

32

Statements of Changes in Net Assets

34

Financial Highlights

36

Notes to Financial Statements

43

Report of Independent Registered Public Accounting Firm

50

Important Tax Information

51

Automatic Dividend Reinvestment Plans

52

Officers and Directors/Trustees

53

Additional Information

57


 

 

 

 

       

 

 

 

 

2

ANNUAL REPORT

DECEMBER 31, 2008

 



 


A Letter to Shareholders

Dear Shareholder

The present time may well be remembered as one of the most tumultuous periods in financial market history. Over the past year, the bursting of the housing bubble and the resultant credit crisis swelled into an all-out global financial market meltdown that featured the collapse of storied financial firms, volatile swings in the world’s financial markets and monumental government responses designed to prop up the economy and stabilize the financial system.

The US economy appeared relatively resilient through the first half of 2008, when rising food and energy prices stoked fears of inflation. The tenor changed dramatically in the second half, as inflationary pressure subsided amid plummeting oil prices, while economic pressures escalated in the midst of a rapid deterioration in consumer spending, employment and other key indicators. By period-end, the National Bureau of Economic Research had confirmed what most already knew—the United States was in a recession, which officially began in December 2007. The Federal Reserve Board (the “Fed”), after slashing interest rates aggressively in the early months of the year, resumed that rate-cutting campaign in the fall, with the final reduction in December bringing the target federal funds rate to a record low range of between zero and 0.25%. Importantly, the central bank pledged that future policy moves to revive the global economy and financial markets would comprise primarily of nontraditional and quantitative easing measures, such as capital injections, lending programs and government guarantees.

Against this backdrop, US equity markets experienced intense volatility, with periods of downward pressure punctuated by sharp rebounds. Declines were significant and broad-based, though smaller cap stocks posted somewhat better relative performance. Non-US stocks started off the year stronger, but quickly lost ground as the credit crisis revealed itself to be global in nature and as the global economy turned south. Overall, domestic equities notched better results than non-US equities, reversing the prior years’ trend of international equity outperformance.

In fixed income markets, investors shunned risky assets and sought to the safety and liquidity of US Treasury issues. Prices soared, while yields fell to record lows, with the Treasury sector topping all other asset classes over the reporting period. Amid spillover from historic events in the financial sector, municipals contended with fewer market participants, lack of liquidity, a challenging funding environment and a backlog of new-issue supply, all of which contributed to the sector’s underperformance relative to taxable issues. At the same time, economic turmoil combined with dislocated credit markets and substantial technical pressures resulted in the worst year on record for the high yield market.

In all, an investor flight to safety prevailed, as evidenced in the six- and 12-month returns of the major benchmark indexes:

 

 

 

 

 

 

 

 

Total Returns as of December 31, 2008

 

6-month

 

12-month

 

           

US equities (S&P 500 Index)

 

(28.48

)%

 

(37.00

)%

 

               

Small cap US equities (Russell 2000 Index)

 

(26.94

)

 

(33.79

)

 

               

International equities (MSCI Europe, Australasia, Far East Index)

 

(36.41

)

 

(43.38

)

 

               

US Treasury securities (Merrill Lynch 10-Year US Treasury Index)

 

17.70

 

 

20.06

 

 

               

Taxable fixed income (Barclays Capital US Aggregate Index*)

 

4.07

 

 

5.24

 

 

               

Tax-exempt fixed income (Barclays Capital Municipal Bond Index*)

 

(2.49

)

 

(2.47

)

 

               

High yield bonds (Barclays Capital US Corporate High Yield 2% Issuer Capped Index*)

 

(25.07

)

 

(25.88

)

 

               

* Formerly a Lehman Brothers index.
Past performance is no guarantee of future results. Index performance shown for illustrative purposes only.
You cannot invest directly in an index.

Through periods of market turbulence, as ever, BlackRock’s full resources are dedicated to the management of our clients’ assets. For our most current views on the economy and financial markets, we invite you to visit www.blackrock.com/funds. As always, we thank you for entrusting BlackRock with your investments, and we look forward to continuing to serve you in the months and years ahead.

Sincerely,

-s- Rob Kapito

Rob Kapito
President, BlackRock Advisors, LLC

 

 

 

 

 

 

 

 

 

THIS PAGE NOT PART OF YOUR FUND REPORT

 

3



 

 


Trust Summary as of December 31 2008

BlackRock Insured Municipal Term Trust


 

Investment Objective

 

BlackRock Insured Municipal Term Trust (BMT) (the “Trust”) seeks to provide monthly income that is exempt from regular federal income tax and to return $10 per share (the initial offering price per share) to investors on or about December 31, 2010.

 

Performance

 

For the 12 months ended December 31, 2008, the Trust returned 7.30% based on market price and 3.62% based on net asset value (“NAV”). For the same period, the closed-end Lipper Insured Municipal Debt Funds (Leveraged) category posted an average return of (15.92)% on a NAV basis. All returns reflect reinvestment of dividends. The Trust’s discount to NAV, which narrowed during the period, accounts for the difference between performance based on price and performance based on NAV. Positive performance was derived by a short-maturity positioning, as yield levels declined in this sector throughout 2008. The high book yields of securities held in anticipation of maturing the Trust on December 31, 2010 provided a high income level, allowing for the dividend to be maintained. The Trust also benefited from a high-quality bias, thereby avoiding spread widening during the course of the year in the lower-grade, high yield sector.

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.

 

Trust Information

 

 

 

 

 

 

Symbol on New York Stock Exchange

 

 

BMT

 

Initial Offering Date

 

 

February 20, 1992

 

Termination Date (on or about)

 

 

December 31, 2010

 

Yield on Closing Market Price as of December 31, 2008 ($10.16)1

 

 

3.59%

 

Tax Equivalent Yield2

 

 

5.52%

 

Current Monthly Distribution per Common Share3

 

 

$ 0.030417

 

Current Annualized Distribution per Common Share3

 

 

$ 0.365004

 

         

 

 

1

Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price.
Past performance does not guarantee future results.

2

Tax equivalent yield assumes the maximum Federal tax rate of 35%.

3

The distribution is not constant and is subject to change.

 

 

The table below summarizes the changes in the Trust’s market price and net asset value per share:


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                       

 

 

12/31/08

 

12/31/07

 

Change

 

High

 

Low

 

                       

Market Price

 

$

10.16

 

$

9.85

 

 

3.15

%

$

10.55

 

$

9.46

 

Net Asset Value

 

$

10.31

 

$

10.35

 

 

(0.39

)%

$

10.59

 

$

10.17

 

                                 

 

The following unaudited charts show the portfolio composition and credit quality allocations of the Trust’s long-term investments:

 


 

Portfolio Composition

 

 

 

 

 

 

 

 

Sector

 

12/31/08

 

12/31/07

             

City, County & State

 

26

%

 

29

%

Power

 

18

 

 

14

 

Education

 

18

 

 

18

 

Water & Sewer

 

15

 

 

16

 

Health Care & Hospitals

 

9

 

 

7

 

Lease Revenue

 

7

 

 

7

 

Transportation

 

5

 

 

7

 

Tax Revenue

 

2

 

 

2

 

             

 

Credit Quality Allocations4

 

 

 

 

 

 

 

 

Credit Rating

 

12/31/08

 

12/31/07

         

AAA/Aaa

 

33

%

 

100

%

AA/Aa

 

55

 

 

 

A/A

 

10

 

 

 

Not Rated

 

2

5

 

 

             

 

 

 

 

4

Using the higher of Standard & Poor’s “S&P’s” or Moody’s Investors Service “Moody’s” ratings.

5

The investment advisor has deemed certain of these non-rated securities to be of investment grade quality. As of December 31, 2008, the market value of these securities was $3,733,554 representing 1% of the Trust’s long-term investments.


 

 

 

 

 

 

 

 

4

ANNUAL REPORT

DECEMBER 31, 2008

 



 

 


Trust Summary as of December 31, 2008

BlackRock Municipal 2018 Term Trust

 

 

   

Investment Objective

 

BlackRock Municipal 2018 Term Trust (BPK) (the “Trust”) seeks to provide monthly income that is exempt from regular federal income tax and to return $15 per share (the initial offering price) to investors on or about December 31, 2018.

 

   

Performance

 

For the 12 months ended December 31, 2008, the Trust returned (9.47)% based on market price and (17.96)% based on NAV. For the same period, the closed-end Lipper General Municipal Debt Funds (Leveraged) category posted an average return of (22.15)% on a NAV basis. All returns reflect reinvestment of dividends. The Trust’s premium to NAV, which widened during the period, accounts for the difference between performance based on price and performance based on NAV. Price depreciation in intermediate- and long-maturity holdings was among the primary detractors from the Trust’s performance in 2008. The Trust’s allocation to healthcare and hospital issues also hurt as these sectors significantly underperformed over the period. Likewise, exposure to lower credit quality issues detracted as the market experienced significant spread widening. Reduced income benefit was derived from leverage as auction rates reset at relatively high levels for most of the year. In addition, leverage magnified price movement as the market declined, adversely affecting net asset value.

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.

 

   

Trust Information

 

 

 

 

 

 

Symbol on New York Stock Exchange

 

BPK

 

Initial Offering Date

 

October 26, 2001

 

Termination Date (on or about)

 

December 31, 2018

 

Yield on Closing Market Price as of December 31, 2008 ($12.97)1

 

6.99%

 

Tax Equivalent Yield2

 

10.75%

 

Current Monthly Distribution per Common Share3

 

$0.0755

 

Current Annualized Distribution per Common Share3

 

$0.9060

 

Leverage as of December 31, 20084

 

43%

 

       

 

 

1

Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price.
Past performance does not guarantee future results.

2

Tax equivalent yield assumes the maximum Federal tax rate of 35%.

3

The distribution is not constant and is subject to change.

4

As a percentage of total managed assets, which is the total managed assets of the Trust (including any assets attributable to Auction Market Preferred Shares (“Preferred Shares”) and Tender Option Bond Trusts (“TOBs”)), minus the sum of accrued liabilities.

 

 

The table below summarizes the changes in the Trust’s market price and net asset value per share:


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                       

 

 

12/31/08

 

12/31/07

 

Change

 

High

 

Low

 

                                 

Market Price

 

$

12.97

 

$

15.22

 

(14.78

)%

 

$

16.35

 

$

8.56

 

Net Asset Value

 

$

11.63

 

$

15.06

 

(22.78

)%

 

$

15.47

 

$

11.21

 

                                 

The following unaudited charts show the portfolio composition and credit quality allocations of the Trust’s long-term investments:

 

Portfolio Composition


 

 

 

 

 

 

 

 

Sector

 

12/31/08

 

12/31/07

 

               

Health Care & Hospitals

 

26

%

 

25

%

 

Industrial & Pollution Control

 

20

 

 

24

 

 

Housing

 

15

 

 

14

 

 

City, County & State

 

15

 

 

18

 

 

Transportation

 

6

 

 

4

 

 

Tax Revenue

 

5

 

 

5

 

 

Education

 

5

 

 

6

 

 

Water and Sewer

 

2

 

 

 

 

Lease Revenue

 

2

 

 

3

 

 

Power

 

2

 

 

 

 

Tobacco

 

2

 

 

1

 

 

               

 

Credit Quality Allocations5


 

 

 

 

 

 

 

 

Credit Rating

 

12/31/08

 

12/31/07

 

               

AAA/Aaa

 

22

%

 

27

%

 

AA/Aa

 

22

 

 

11

 

 

A/A

 

12

 

 

 

 

A

 

 

 

18

 

 

BBB/Baa

 

23

 

 

26

 

 

BB/Ba

 

2

 

 

2

 

 

B/B

 

3

 

 

 

 

B

 

 

 

8

 

 

CCC/Caa

 

3

 

 

 

 

Not Rated6

 

13

 

 

8

 

 

               

 

 

5

Using the higher of S&P’s or Moody’s ratings.

6

The investment advisor has deemed certain of these non-rated securities to be of investment grade quality. As of December 31, 2008 and 2007, the market value of these securities was $2,825,529 representing 1% and $5,534,635 representing 2%, respectively, of the Trust’s long-term investments.


 

 

 

 

 

 

 

 

 

ANNUAL REPORT

DECEMBER 31, 2008

5



 

 


 

Trust Summary as of December 31, 2008

BlackRock Municipal 2020 Term Trust

   

Investment Objective

 

BlackRock Municipal 2020 Term Trust (BKK) (the “Trust”) seeks to provide current income exempt from regular federal income tax and to return $15 per share (the initial public offering price) on or about December 31, 2020.

 

   

Performance

 

For the 12 months ended December 31, 2008, the Trust returned (17.81)% based on market price and (24.57)% based on NAV. For the same period, the closed-end Lipper General Municipal Debt Funds (Leveraged) category posted an average return of (22.15)% on a NAV basis. All returns reflect reinvestment of dividends. The Trust moved from a discount to NAV to a premium by period-end, which accounts for the difference between performance based on price and performance based on NAV. Price depreciation in intermediate- and long-maturity holdings was among the primary detractors from the Trust’s performance in 2008. The Trust’s allocation to healthcare and hospital issues also hurt as these sectors significantly underperformed over the period. Likewise, exposure to lower credit quality issues detracted as the market experienced significant spread widening. Reduced income benefit was derived from leverage as auction rates reset at relatively high levels for most of the year. In addition, leverage magnified price movement as the market declined, adversely affecting net asset value.

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.

 

   

Trust Information

 


 

 

 

 

Symbol on New York Stock Exchange

 

BKK

 

Initial Offering Date

 

September 30, 2003

 

Termination Date (on or about)

 

December 31, 2020

 

Yield on Closing Market Price as of December 31, 2008 ($10.57)1

 

7.07%

 

Tax Equivalent Yield2

 

10.88%

 

Current Monthly Distribution per Common Share3

 

$0.06225

 

Current Annualized Distribution per Common Share3

 

$0.7470

 

Leverage as of December 31, 20084

 

45%

 

       

 

 

1

Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results.

2

Tax equivalent yield assumes the maximum Federal tax rate of 35%.

3

The distribution is not constant and is subject to change.

4

As a percentage of total managed assets, which is the total managed assets of the Trust (including any assets attributable to Preferred Shares and TOBs), minus the sum of accrued liabilities.

 

 

The table below summarizes the changes in the Trust’s market price and net asset value per share:


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                                 

 

 

12/31/08

 

12/31/07

 

Change

 

High

 

Low

 

                                 

Market Price

 

$

10.57

 

$

13.60

 

(22.28

)%

 

$

15.14

 

$

7.42

 

Net Asset Value

 

$

10.55

 

$

14.79

 

(28.67

)%

 

$

15.25

 

$

10.16

 

                                 

The following unaudited charts show the portfolio composition and credit quality allocations of the Trust’s long-term investments:

 

Portfolio Composition


 

 

 

 

 

 

 

 

Sector

 

12/31/08

 

12/31/07

 

               

Health Care & Hospitals

 

18

%

 

17

%

 

City, County & State

 

17

 

 

22

 

 

Industrial & Pollution Control

 

13

 

 

17

 

 

Tobacco

 

11

 

 

11

 

 

Power

 

9

 

 

7

 

 

Education

 

8

 

 

8

 

 

Housing

 

7

 

 

7

 

 

Tax Revenue

 

7

 

 

6

 

 

Transportation

 

7

 

 

5

 

 

Water and Sewer

 

2

 

 

 

 

Lease Revenue

 

1

 

 

 

 

               

 

Credit Quality Allocations5


 

 

 

 

 

 

 

 

Credit Rating

 

12/31/08

 

12/31/07

 

               

AAA/Aaa

 

21

%

 

30

%

 

AA/Aa

 

16

 

 

10

 

 

A

 

18

 

 

12

 

 

BBB/Baa

 

25

 

 

29

 

 

BB/Ba

 

1

 

 

1

 

 

B

 

3

 

 

6

 

 

CC/Ca

 

1

 

 

 

 

Not Rated

 

15

6

 

12

 

 

               

 

 

5

Using the higher of S&P’s or Moody’s ratings.

6

The investment advisor has deemed certain of these non-rated securities to be of investment grade quality. As December 31, 2008, the market value of these securities was $5,382,113 representing 1% of the Trust’s long-term investments.


 

 

 

 

 

 

 

 

6

ANNUAL REPORT

DECEMBER 31, 2008

 



 

 


Trust Summary as of December 31, 2008

BlackRock Strategic Municipal Trust


 

 

Investment Objective

 

 

BlackRock Strategic Municipal Trust (BSD) (the “Trust”) seeks to provide high current income exempt from regular federal income tax, consistent with the preservation of capital.

 

 

Performance

 

 

 

For the 12 months ended December 31, 2008, the Trust returned (37.17)% based on market price and (25.70)% based on NAV. For the same period, the closed-end Lipper General Municipal Debt Funds (Leveraged) category posted an average return of (22.15)% on a NAV basis. All returns reflect reinvestment of dividends. The Trust’s discount to NAV, which widened during the period, accounts for the difference between performance based on price and performance based on NAV. The primary factors contributing to the Trust’s under-performance during the year included above market weight exposure to lower-rated credits and longer-dated securities. These negative factors were offset somewhat by an above-average distribution yield. In expectation of a more favorable environment for municipal credit spreads, we do not anticipate any significant changes in portfolio composition in the near term.

 

 

 

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.

 

 

Trust Information


 

 

 

 

Symbol on New York Stock Exchange

 

BSD

 

Initial Offering Date

 

August 25, 1999

 

Yield on Closing Market Price as of December 31, 2008 ($8.19)1

 

9.16%

 

Tax Equivalent Yield2

 

14.09%

 

Current Monthly Distribution per Common Share3

 

$ 0.0625

 

Current Annualized Distribution per Common Share3

 

$ 0.7500

 

Leverage as of December 31, 20084

 

43%

 

       

 

 

1

Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price.
Past performance does not guarantee future results.

2

Tax equivalent yield assumes the maximum Federal tax rate of 35%.

3

The distribution is not constant and is subject to change.

4

As a percentage of total managed assets, which is the total managed assets of the Trust (including any assets attributable to Preferred Shares and TOBs), minus the sum of accrued liabilities.


The table below summarizes the changes in the Trust’s market price and net asset value per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                       

 

 

12/31/08

 

12/31/07

 

Change

 

High

 

Low

 

                       

Market Price

 

$

8.19

 

$

13.96

 

 

(41.33%

)

$

15.94

 

$

6.60

 

Net Asset Value

 

$

9.90

 

$

14.27

 

 

(30.62%

)

$

14.62

 

$

8.91

 

                                 

The following unaudited charts show the portfolio composition and credit quality allocations of the Trust’s long-term investments:

 

Portfolio Composition


 

 

 

 

 

 

 

 

Sector

 

12/31/08

 

12/31/07

 

               

Health Care & Hospitals

 

24

%

 

22

%

 

City, County & State

 

20

 

 

22

 

 

Housing

 

11

 

 

9

 

 

Education

 

10

 

 

5

 

 

Industrial & Pollution Control

 

9

 

 

16

 

 

Transportation

 

8

 

 

7

 

 

Tax Revenue

 

8

 

 

8

 

 

Power

 

7

 

 

7

 

 

Water & Sewer

 

2

 

 

2

 

 

Tobacco

 

1

 

 

2

 

 

               

 

Credit Quality Allocations5


 

 

 

 

 

 

 

 

Credit Rating

 

12/31/08

 

12/31/07

 

           

AAA/Aaa

 

29

%

 

43

%

 

AA/Aa

 

26

 

 

21

 

 

A/A

 

20

 

 

8

 

 

BBB/Baa

 

8

 

 

15

 

 

BB/Ba

 

8

 

 

3

 

 

B/B

 

2

 

 

4

 

 

CCC/Caa

 

1

 

 

 

 

Not Rated6

 

6

 

 

6

 

 

               

 

 

5

Using the higher of S&P’s or Moody’s ratings.

6

The investment advisor has deemed certain of these non-rated securities to be of investment grade quality. As of December 31, 2008 and December 31, 2007, the market value of these securities was $2,687,323 representing 2% and $4,358,336 representing 3%, respectively, of the Trust’s long-term investments.


 

 

 

 

 

 

 

 

 

ANNUAL REPORT

DECEMBER 31, 2008

7



 

 


Trust Summary as of December 31, 2008

BlackRock California Municipal 2018 Term Trust


 

Investment Objective


 

 

 

BlackRock California Municipal 2018 Term Trust (BJZ) (the “Trust”) seeks to provide monthly income that is exempt from regular federal and California income taxes and to return $15 per share (the initial public offering price) to investors on or about December 31, 2018.


 

Performance


 

 

 

For the 12 months ended December 31, 2008, the Trust returned (20.70)% based on market price and (15.18)% based on NAV. For the same period, the closed-end Lipper California Municipal Debt Funds category posted an average return of (20.85)% on a NAV basis. All returns reflect reinvestment of dividends. The Trust moved from a premium to NAV to a discount by period-end, which accounts for the difference between performance based on price and performance based on NAV. Price depreciation in intermediate- and long-maturity holdings was among the primary detractors from the Trust’s performance in 2008. An allocation to hospital issues also hampered results as the sector was among the worst performers. In addition, California general obligation debt came under pressure as budgetary concerns grew, causing spreads to widen significantly. Income from leverage was reduced as auction rates reset at relatively high levels for most of 2008. Leverage also magnified price movement as the market declined, adversely affecting net asset value.

 

 

 

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.


 

Trust Information


 

 

 

 

Symbol on New York Stock Exchange

 

BJZ

 

Initial Offering Date

 

October 26, 2001

 

Termination Date (on or about)

 

December 31, 2018

 

Yield on Closing Market Price as of December 31, 2008 ($11.60)1

 

6.34%

 

Tax Equivalent Yield2

 

9.75%

 

Current Monthly Distribution per Common Share3

 

$ 0.06125

 

Current Annualized Distribution per Common Share3

 

$ 0.73500

 

Leverage as of December 31, 20084

 

42%

 

       

 

 

1

Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price.
Past performance does not guarantee future results.

2

Tax equivalent yield assumes the maximum Federal tax rate of 35%.

3

The distribution is not constant and is subject to change.

4

As a percentage of total managed assets, which is the total managed assets of the Trust (including any assets attributable to Preferred Shares), minus the sum of accrued liabilities.


The table below summarizes the changes in the Trust’s market price and net asset value per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                                 

 

 

12/31/08

 

12/31/07

 

Change

 

High

 

Low

 

                       

Market Price

 

$

11.60

 

$

15.40

 

 

(24.68%

)

$

16.05

 

$

9.10

 

Net Asset Value

 

$

11.94

 

$

14.82

 

 

(19.43%

)

$

15.18

 

$

11.44

 

                                 

The following unaudited charts show the portfolio composition and credit quality allocations of the Trust’s long-term investments:

 

Portfolio Composition


 

 

 

 

 

 

 

 

Sector

 

12/31/08

 

12/31/07

 

           

City, County & State

 

20

%

 

23

%

 

Transportation

 

18

 

 

19

 

 

Water & Sewer

 

14

 

 

2

 

 

Health Care & Hospitals

 

13

 

 

13

 

 

Lease Revenue

 

12

 

 

14

 

 

Industrial & Pollution Control

 

8

 

 

7

 

 

Housing

 

7

 

 

7

 

 

Education

 

7

 

 

8

 

 

Tax Revenue

 

1

 

 

 

 

Power

 

 

 

5

 

 

Resource Recovery

 

 

 

2

 

 

               

 

Credit Quality Allocations5


 

 

 

 

 

 

 

 

Credit Rating

 

12/31/08

 

12/31/07

 

           

AAA/Aaa

 

23

%

 

44

%

 

AA/Aa

 

31

 

 

 

 

A

 

20

 

 

26

 

 

BBB/Baa

 

21

 

 

27

 

 

Not Rated

 

5

6

 

3

 

 

               

 

 

5

Using the higher of S&P’s or Moody’s ratings.

6

The investment advisor has deemed certain of these non-rated securities to be of investment grade quality. As of December 31, 2008, the market value of these securities was $3,201,320 representing 2% of the Trust’s long-term investments.


 

 

 

 

 

 

 

 

8

ANNUAL REPORT

DECEMBER 31, 2008

 



 

 

 


Trust Summary as of December 31, 2008

BlackRock New York Municipal 2018 Term Trust

 

 

Investment Objective

 

 

 

 

 

BlackRock New York Municipal 2018 Term Trust (BLH) (the “Trust”) seeks to provide monthly income that is exempt from regular federal, New York State and New York City income taxes and to return $15 per share (the initial public offering price) to investors on or about December 31, 2018.

 

 

Performance

 

 

 

 

 

For the 12 months ended December 31, 2008, the Trust returned (9.00)% based on market price and (9.12)% based on NAV. For the same period, the closed-end Lipper New York Municipal Debt Funds category posted an average return of (20.73)% on a NAV basis. All returns reflect reinvestment of dividends. The Trust’s premium to NAV, which widened during the period, accounts for the difference between performance based on price and performance based on NAV. Price depreciation in intermediate- and long-maturity holdings was among the primary detractors from the Trust’s performance in 2008. An allocation to hospital and airline-related issues also hampered results as the sectors significantly underperformed over the period. Income from leverage was reduced as auction rates reset at relatively high levels for most of 2008. Leverage also magnified price movement as the market declined, adversely affecting net asset value.

 

 

 

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.

 

 

Trust Information

 


 

 

 

 

 

Symbol on New York Stock Exchange

 

 

BLH

 

Initial Offering Date

 

 

October 26, 2001

 

Termination Date (on or about)

 

 

December 31, 2018

 

Yield on Closing Market Price as of December 31, 2008 ($13.97)1

 

 

5.91%

 

Tax Equivalent Yield2

 

 

9.09%

 

Current Monthly Distribution per Common Share3

 

 

$0.06875

 

Current Annualized Distribution per Common Share3

 

 

$0.82500

 

Leverage as of December 31, 20084

 

 

39%

 

 

 

 

1

Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price.
Past performance does not guarantee future results.

2

Tax equivalent yield assumes the maximum Federal tax rate of 35%.

3

The distribution is not constant and is subject to change.

4

As a percentage of total managed assets, which is the total managed assets of the Trust (including any assets attributable to Preferred Shares), minus the sum of accrued liabilities.

 

The table below summarizes the changes in the Trust’s market price and net asset value per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12/31/08

 

12/31/07

 

Change

 

High

 

Low

 

 

Market Price

 

$

13.97

 

$

16.18

 

(13.66

)%

 

$

16.95

 

$

12.50

 

Net Asset Value

 

$

13.78

 

$

15.98

 

(13.77

)%

 

$

16.32

 

$

13.27

 

                                 

 

The following unaudited charts show the portfolio composition and credit quality allocations of the Trust’s long-term investments:

 

Portfolio Composition


 

 

 

 

 

 

 

 

Sector

 

12/31/08

 

12/31/07

 

           

Education

 

24

%

 

22

%

 

City, County & State

 

15

 

 

11

 

 

Health Care & Hospitals

 

15

 

 

15

 

 

Transportation

 

14

 

 

11

 

 

Tobacco

 

10

 

 

11

 

 

Industrial & Pollution Control

 

3

 

 

7

 

 

Lease Revenue

 

3

 

 

10

 

 

Housing

 

5

 

 

6

 

 

Tax Revenue

 

7

 

 

6

 

 

Power

 

4

 

 

1

 

 

               

 

Credit Quality Allocations5


 

 

 

 

 

 

 

 

Credit Rating

 

12/31/08

 

12/31/07

 

               

AAA/Aaa

 

24

%

 

44

%

 

AA/Aa

 

38

 

 

37

 

 

A

 

13

 

 

5

 

 

BBB/Baa

 

20

 

 

9

 

 

B

 

4

 

 

4

 

 

Not Rated

 

1

 

 

1

 

 

               

 

 

5

Using the higher of S&P’s or Moody’s ratings.


 

 

 

 

 

 

 

 

 

ANNUAL REPORT

DECEMBER 31, 2008

9



 

 


Trust Summary as of December 31, 2008

BlackRock Pennsylvania Strategic Municipal Trust


 

 

Investment Objective

 

 

BlackRock Pennsylvania Strategic Municipal Trust (BPS) (the “Trust”) seeks to provide monthly income that is exempt from regular federal and Pennsylvania income taxes.

 

Performance

 

 

 

For the 12 months ended December 31, 2008, the Trust returned (34.53)% based on market price and (19.63)% based on NAV. For the same period, the closed-end Lipper Pennsylvania Municipal Debt Funds category posted an average return of (18.96)% on a NAV basis. All returns reflect reinvestment of dividends. The Trust’s discount to NAV, which widened during the period, accounts for the difference between performance based on price and performance based on NAV. Over the one-year period, exposure to housing bonds had the greatest negative impact on the Trust’s performance, as these issues underperformed. By contrast, an above-average yield and defensive positioning aided results. Market declines for the period precipitated a rise in the portfolio’s interest rate sensitivity (duration). At period end, the Trust is positioned to outperform in a stable to lower interest rate environment.

 

 

 

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.

 

 

Trust Information


 

 

 

 

 

Symbol on American Stock Exchange

 

 

BPS

 

Initial Offering Date

 

 

August 25, 1999

 

Yield on Closing Market Price as of December 31, 2008 ($8.42)1

 

 

6.41%

 

Tax Equivalent Yield2

 

 

9.86%

 

Current Monthly Distribution per Common Share3

 

 

$0.045

 

Current Annualized Distribution per Common Share3

 

 

$0.540

 

Leverage as of December 31, 20084

 

 

44%

 

         

 

 

1

Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price.
Past performance does not guarantee future results.

2

Tax equivalent yield assumes the maximum Federal tax rate of 35%.

3

The distribution is not constant and is subject to change.

4

As a percentage of total managed assets, which is the total managed assets of the Trust (including any assets attributable to Preferred Shares), minus the sum of accrued liabilities.

 

The table below summarizes the changes in the Trust’s market price and net asset value per share:


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                       

 

 

12/31/08

 

12/31/07

 

Change

 

High

 

Low

 

                       

Market Price

 

$

8.42

 

$

13.55

 

 

(37.86)%

 

$

15.85

 

$

5.25

 

Net Asset Value

 

$

10.77

 

$

14.12

 

 

(23.73)%

 

$

14.55

 

$

10.22

 

                       

 

The following unaudited charts show the portfolio composition and credit quality allocations of the Trust’s long-term investments:

 

Portfolio Composition


 

 

 

 

 

 

 

 

Sector

 

12/31/08

 

12/31/07

 

               

Health Care & Hospitals

 

22

%

 

11

%

 

Education

 

21

 

 

18

 

 

Housing

 

17

 

 

16

 

 

Water & Sewer

 

10

 

 

16

 

 

Transportation

 

9

 

 

10

 

 

City, County & State

 

9

 

 

15

 

 

Lease Revenue

 

5

 

 

4

 

 

Industrial & Pollution Control

 

4

 

 

5

 

 

Power

 

3

 

 

2

 

 

Tax Revenue

 

 

 

3

 

 

               

 

Credit Quality Allocations5


 

 

 

 

 

 

 

 

Credit Rating

 

12/31/08

 

12/31/07

 

               

AAA/Aaa

 

24

%

 

45

%

 

AA/Aa

 

39

 

 

14

 

 

A/A

 

23

 

 

21

 

 

BBB/Baa

 

7

 

 

17

 

 

BB/Ba

 

1

 

 

 

 

B

 

 

 

1

 

 

Not Rated6

 

6

 

 

2

 

 

               

 

 

5

Using the higher of S&P’s or Moody’s ratings.

6

The investment advisor has deemed certain of these non-rated securities to be of investment grade quality. As of December 31, 2008 and 2007, the market value of these securities was $1,604,974 representing 4% and $971,150 representing 2% of the Trust’s long-term investments.


 

 

 

 

 

 

 

 

10

ANNUAL REPORT

DECEMBER 31, 2008

 



 

 


 

The Benefits and Risks of Leveraging

 


The Trusts may utilize leverage to seek to enhance the yield and NAV of their Common Shares. However, these objectives cannot be achieved in all interest rate environments.

To leverage, certain Trusts issue Preferred Shares, which pay dividends at prevailing short-term interest rates, and invest the proceeds in long-term municipal bonds. In general, the concept of leveraging is based on the premise that the cost of assets to be obtained from leverage will be based on short-term interest rates, which normally will be lower than the income earned by each Trust on its longer-term portfolio investments. To the extent that the total assets of the Trust (including the assets obtained from leverage) are invested in higher-yielding portfolio investments, the Trust’s Common Shareholders will benefit from the incremental yield.

To illustrate these concepts, assume a Trust’s Common Shares capitalization is $100 million and it issues Preferred Shares for an additional $50 million, creating a total value of $150 million available for investment in long-term municipal bonds. If prevailing short-term interest rates are 3% and long-term interest rates are 6%, the yield curve has a strongly positive slope. In this case, the Trust pays dividends on the $50 million of Preferred Shares based on the lower short-term interest rates. At the same time, the Trust’s total portfolio of $150 million earns the income based on long-term interest rates. In this case, the dividends paid to Preferred Shareholders are significantly lower than the income earned on the fund’s long-term investments, and therefore the Common Shareholders are the beneficiaries of the incremental yield.

Conversely, if prevailing short-term interest rates rise above long-term interest rates of 6%, the yield curve has a negative slope. In this case, the Trust pays dividends on the higher short-term interest rates whereas the Trust’s total portfolio earns income based on lower long-term interest rates. If short-term interest rates rise, narrowing the differential between short-term and long-term interest rates, the incremental yield pickup on the Common Shares will be reduced or eliminated completely.

Furthermore, the value of the Trust’s portfolio investments generally varies inversely with the direction of long-term interest rates, although other factors also influence the value of portfolio investments. In contrast, the redemption value of the Trust’s Preferred Shares does not fluctuate in relation to interest rates. As a result, changes in interest rates can influence the Trust’s NAV positively or negatively in addition to the impact on Trust performance from leverage from Preferred Shares discussed above.

Certain Trusts may also, from time to time leverage their assets through the use of tender option bond (“TOB”) programs, as described in Note 1 of the Notes to Financial Statements. TOB investments generally will provide the Trusts with economic benefits in periods of declining short-term interest rates, but expose the Trusts to risks during periods of rising short-term interest rates similar to those associated with Preferred Shares issued by the Trusts, as described above. Additionally, fluctuations in the market value of municipal securities deposited into the TOB trust may adversely affect the Trusts’ NAVs per share.

The use of leverage may enhance opportunities for increased returns to the Trusts and Common Shareholders, but as described above, it also creates risks as short- or long-term interest rates fluctuate. Leverage also will generally cause greater changes in the Trusts’ NAV, market price and dividend rate than a comparable portfolio without leverage. If the income derived from securities purchased with assets received from leverage exceeds the cost of leverage, the Trusts’ net income will be greater than if leverage had not been used. Conversely, if the income from the securities purchased is not sufficient to cover the cost of leverage, the Trusts’ net income will be less than if leverage had not been used, and therefore the amount available for distribution to shareholders will be reduced. The Trusts may be required to sell portfolio securities at inopportune times or below fair market values in order to comply with regulatory requirements applicable to the use of leverage or as required by the terms of leverage instruments which may cause the Trusts to incur losses. The use of leverage may limit the Trusts’ ability to invest in certain types of securities or use certain types of hedging strategies, such as in the case of certain restrictions imposed by ratings agencies that rate preferred shares issued by a Trust. The Trusts will incur expenses in connection with the use of leverage, all of which are borne by the holders of the Common Shares and may reduce returns on the Common Shares.

Under the Investment Company Act of 1940, the Trusts are permitted to issue Preferred Shares in an amount of up to 50% of their total managed assets at the time of issuance. Under normal circumstances, each Trust anticipates that the total economic leverage from Preferred Shares and TOBs will not exceed 50% of its total managed assets at the time such leverage is incurred. As of December 31, 2008, Insured Municipal Term Trust had no leverage from these sources. As of December 31, 2008, the following Trusts had economic leverage from Preferred Shares and TOBs as a percentage of their total managed assets as follows:

 

 

 

 

     

 

Percent of
Leverage

 

     

Municipal 2018 Term Trust

43

%

 

Municipal 2020 Term Trust

45

%

 

Strategic Municipal Trust

43

%

 

California Municipal 2018 Term Trust

42

%

 

New York Municipal 2018 Term Trust

39

%

 

Pennsylvania Strategic Municipal Trust

44

%

 

       

 

 

Derivative Instruments

 

The Trusts may invest in various derivative instruments, including swap agreements and futures, and other instruments specified in the Notes to Financials Statements, which constitute forms of economic leverage. Such instruments are used to obtain exposure to a market without owning or taking physical custody of securities or to hedge market and/or interest rate risks. Such derivative instruments involve risks, including the imperfect correlation between the value of a derivative instrument and the underlying asset, possible default of the other party to the transaction and illiquidity of the derivative instrument. The Trusts’ ability to successfully use a derivative instrument depends on the Advisor’s ability to accurately predict pertinent market movements, which cannot be assured. The use of derivative instruments may result in losses greater than if they had not been used, may require the Trusts to sell or purchase portfolio securities at inopportune times or for prices other than current market values, may limit the amount of appreciation the Trusts can realize on an investment or may cause the Trusts to hold a security that it might otherwise sell. The Trusts’ investments in these instruments are discussed in detail in the Notes to Financial Statements.

 

 

 

 

 

 

 

 

 

ANNUAL REPORT

DECEMBER 31, 2008

11



 

 


Schedule of Investments December 31, 2008

BlackRock Insured Municipal Term Trust (BMT)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 

 

Alabama—0.9%

 

 

 

 

 

 

 

Alabama State Federal Highway Authority Revenue Bonds, GANS, Series A, 4.50%, 3/01/11 (a)

 

$

1,410

 

$

1,455,670

 

Birmingham-Jefferson Civic Center Authority, Alabama, Special Tax Refunding Bonds, Series A, 4.375%, 1/01/11 (b)

 

 

1,000

 

 

983,410

 

 

 

 

 

 

     

 

 

 

 

 

 

2,439,080

 

 

Alaska—2.8%

 

 

 

 

 

 

 

Anchorage, Alaska, GO, Refunding, Series B, 4.625%, 7/01/10 (a)(c)

 

 

6,000

 

 

6,249,720

 

University of Alaska, Revenue Refunding Bonds, Series K, 3.75%, 10/01/10 (a)(c)

 

 

1,260

 

 

1,282,529

 

 

 

 

 

 

     

 

 

 

 

 

 

7,532,249

 

               

Arizona—0.4%

 

 

 

 

 

 

 

Mesa, Arizona, GO, Refunding, Series A, 3.75%, 7/01/10 (a)(c)

 

 

1,030

 

 

1,059,870

 

 

California—5.7%

 

 

 

 

 

 

 

California State Department of Water Resources, Power Supply Revenue Bonds, Series A:

 

 

 

 

 

 

 

3.60%, 5/01/10 (d)

 

 

5,000

 

 

5,106,350

 

3.70%, 5/01/11 (a)

 

 

3,500

 

 

3,577,245

 

California State, GO, 6.80%, 11/01/10 (c)

 

 

145

 

 

146,969

 

Contra Costa, California, Transportation Authority, Sales Tax Revenue Bonds, Series A, 6.50%, 3/01/09 (c)(e)

 

 

3,145

 

 

3,170,412

 

Los Angeles County, California, Capital Asset Leasing Corporation, Leasehold Revenue Refunding Bonds, 6.05%, 12/01/10 (d)

 

 

3,065

 

 

3,199,186

 

 

 

 

 

 

     

 

 

 

 

 

 

15,200,162

 

 

Colorado—1.3%

 

 

 

 

 

 

 

Weld County, Colorado, Greeley School District Number 006 (Greeley), GO, Refunding, 3.75%, 12/01/10 (b)

 

 

3,245

 

 

3,346,439

 

 

Delaware—0.4%

 

 

 

 

 

 

 

Delaware River and Bay Authority Revenue Bonds, 3.75%, 1/01/11 (a)

 

 

1,015

 

 

1,031,646

 

 

District of Columbia—4.0%

 

 

 

 

 

 

 

District of Columbia, GO, Refunding, Series B, 5.50%, 6/01/11 (b)

 

 

10,000

 

 

10,670,700

 

 

Florida—0.9%

 

 

 

 

 

 

 

Tampa, Florida, Water and Sewer Revenue Refunding Bonds, 5.50%, 10/01/10 (b)

 

 

2,320

 

 

2,455,952

 

 

Hawaii—0.4%

 

 

 

 

 

 

 

University of Hawaii, University System Revenue Bonds, Series A, 3.875%, 7/15/10 (a)(c)

 

 

1,000

 

 

1,020,590

 

 

Illinois—12.7%

 

 

 

 

 

 

 

Chicago, Illinois, GO, Refunding, Series A:

 

 

 

 

 

 

 

4.375%, 1/01/11 (d)

 

 

120

 

 

125,152

 

4.375%, 1/01/11 (d)(e)

 

 

3,880

 

 

4,096,620

 

5%, 1/01/11 (a)

 

 

640

 

 

675,136

 

5%, 1/01/11 (a)(e)

 

 

1,150

 

 

1,228,303

 

Chicago, Illinois, Park District, GO, Refunding, Series A, 3.50%, 1/01/10 (c)(e)

 

 

2,120

 

 

2,171,749

 


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 

 

Illinois—(concluded)

 

 

 

 

 

 

 

Du Page and Will Counties, Illinois, GO (c):

 

 

 

 

 

 

 

Community School District Number 204 (Indian Prairie), 4.25%, 12/30/10 (e)

 

$

1,750

 

$

1,845,567

 

Community School District Number 205 (Elmhurst), 4.50%, 1/01/11

 

 

685

 

 

708,715

 

Community School District Number 205 (Elmhurst), 4.50%, 1/01/11 (e)

 

 

315

 

 

333,358

 

Du Page County, Illinois, Forest Preserve District, GO (f):

 

 

 

 

 

 

 

5.984%, 11/01/10

 

 

5,000

 

 

4,758,900

 

6.045%, 11/01/11

 

 

11,965

 

 

10,990,810

 

Illinois State, GO, 1st Series:

 

 

 

 

 

 

 

4.50%, 2/01/11 (a)(c)

 

 

1,500

 

 

1,569,510

 

4.50%, 4/01/11 (b)

 

 

2,000

 

 

2,099,020

 

Kane and Du Page Counties, Illinois, Community Unit School District 303 (Saint Charles), GO, Series A, 4%, 1/01/11 (b)

 

 

2,265

 

 

2,345,702

 

Orland Park, Illinois, GO, Series A, 3.50%, 12/01/10 (a)(c)

 

 

1,025

 

 

1,051,865

 

 

 

 

 

 

     

 

 

 

 

 

 

34,000,407

 

 

Indiana—4.1%

 

 

 

 

 

 

 

Indiana Municipal Power Agency, Power Supply System Revenue Bonds, Series A, 4.50%, 1/01/11 (d)

 

 

2,635

 

 

2,712,205

 

Indianapolis, Indiana, Local Public Improvement Bond Bank Revenue Bonds (Waterworks Project), Series A (a):

 

 

 

 

 

 

 

4.25%, 7/01/10

 

 

2,085

 

 

2,160,894

 

4.375%, 1/01/11

 

 

2,815

 

 

2,933,596

 

4.375%, 7/01/11

 

 

2,950

 

 

3,094,963

 

 

 

 

 

 

     

 

 

 

 

 

 

10,901,658

 

 

Kansas—0.8%

 

 

 

 

 

 

 

Kansas State Development Finance Authority, Public Water Supply, Revolving Loan Fund Revenue Bonds, Series 2 (d):

 

 

 

 

 

 

 

4.125%, 4/01/10

 

 

1,025

 

 

1,057,790

 

4.25%, 4/01/11

 

 

1,000

 

 

1,044,060

 

 

 

 

 

 

     

 

 

 

 

 

 

2,101,850

 

 

Kentucky—3.8%

 

 

 

 

 

 

 

Kentucky Economic Development Finance Authority, Health System Revenue Refunding Bonds (Norton Healthcare, Inc.), Series B, 5.421%, 10/01/10 (a)(f)

 

 

10,890

 

 

10,082,724

 

 

Louisiana—2.0%

 

 

 

 

 

 

 

Louisiana Public Facilities Authority, Revenue Refunding Bonds (Ochsner Clinic Foundation Project), Series A, 4%, 5/15/11 (a)(e)

 

 

5,000

 

 

5,267,500

 

 

Michigan—2.4%

 

 

 

 

 

 

 

Detroit, Michigan, GO (a):

 

 

 

 

 

 

 

4%, 4/01/10

 

 

1,580

 

 

1,572,163

 

4%, 4/01/11

 

 

1,955

 

 

1,916,526

 

Wyandotte, Michigan, City School District, School Building and Site, GO, Refunding, 4%, 5/01/11 (b)

 

 

2,810

 

 

2,902,112

 

 

 

 

 

 

     

 

 

 

 

 

 

6,390,801

 

 

Minnesota—0.4%

 

 

 

 

 

 

 

Southern Minnesota Municipal Power Agency, Power Supply System, Revenue Refunding Bonds, Series B, 5.75%, 1/01/11 (e)

 

 

1,150

 

 

1,183,258

 

 

 

 

Portfolio Abbreviations

 

To simplify the listings of each Trust’s holdings in the Schedules of Investments, the names and descriptions of many of the securities have been abbreviated according to the list on the right.

 

 

AMT

Alternative Minimum Tax (subject to)

CABS

Capital Appreciation Bonds

COP

Certificates of Participation

EDA

Economic Development Authority

EDR

Economic Development Revenue Bonds

GANS

Grant Application Notes

GO

General Obligation Bonds

HDA

Housing Development Authority

HFA

Housing Finance Agency

IDA

Industrial Development Authority

IDB

Industrial Development Board

M/F

Multi-Family

PCR

Pollution Control Revenue Bonds

TFABS

Tobacco Flexible Amortization Bonds

S/F

Single-Family

VRDN

Variable Rate Demand Notes

See Notes to Financial Statements.

 

 

 

 

 

 

 

 

12

ANNUAL REPORT

DECEMBER 31, 2008

 



 

 


 

Schedule of Investments (continued)

BlackRock Insured Municipal Term Trust (BMT)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 

               

New Jersey—0.4%

 

 

 

 

 

 

 

Monmouth County, New Jersey, Improvement Authority, Governmental Loan Revenue Refunding Bonds, 3.375%, 12/01/10 (b)

 

$

1,000

 

$

1,026,460

 

               

New Mexico—2.8%

 

 

 

 

 

 

 

Las Cruces, New Mexico, School District Number 002, GO, 5.25%, 8/01/09 (b)(g)

 

 

1,750

 

 

1,795,867

 

New Mexico Finance Authority, Public Project Revolving Fund Revenue Bonds, Series A (a):

 

 

 

 

 

 

 

4.20%, 6/01/10

 

 

1,005

 

 

1,040,426

 

3.40%, 6/01/11

 

 

1,258

 

 

1,291,023

 

4.30%, 6/01/11

 

 

950

 

 

994,926

 

New Mexico State Highway Commission, Tax Revenue Refunding Bonds, Subordinate Lien, Series B, 4.75%, 6/15/11 (d)(e)

 

 

2,230

 

 

2,392,723

 

 

 

 

 

 

     

 

 

 

 

 

 

7,514,965

 

               

New York—5.5%

 

 

 

 

 

 

 

Long Island Power Authority, New York, Electric System Revenue Refunding Bonds, Series A, 5.50%, 12/01/10 (d)

 

 

8,950

 

 

9,384,522

 

New York State Thruway Authority, State Personal Income Tax, Transportation Revenue Bonds, Series A, 5%, 3/15/11 (b)

 

 

5,000

 

 

5,303,850

 

 

 

 

 

 

     

 

 

 

 

 

 

14,688,372

 

               

Ohio—0.8%

 

 

 

 

 

 

 

Akron, Ohio, GO, Refunding, 4%, 12/01/10 (a)

 

 

1,000

 

 

1,032,310

 

University of Cincinnati, Ohio, General Receipts Revenue Bonds, 3.50%, 6/01/09 (d)

 

 

1,015

 

 

1,021,537

 

 

 

 

 

 

     

 

 

 

 

 

 

2,053,847

 

               

Oregon—2.9%

 

 

 

 

 

 

 

Washington and Clackamas Counties, Oregon, School District Number 23J (Tigard-Tualatin), GO (a):

 

 

 

 

 

 

 

4%, 6/15/10

 

 

3,820

 

 

3,951,408

 

4%, 6/15/11

 

 

3,720

 

 

3,884,722

 

 

 

 

 

 

     

 

 

 

 

 

 

7,836,130

 

               

Pennsylvania—3.4%

 

 

 

 

 

 

 

Pennsylvania State Higher Educational Facilities Authority Revenue Bonds (UPMC Health System), Series A, 5.25%, 8/01/10 (b)

 

 

7,500

 

 

7,671,225

 

Wilson, Pennsylvania, School District, GO, Refunding, 2nd Series, 4%, 5/15/10 (b)

 

 

1,250

 

 

1,286,538

 

 

 

 

 

 

     

 

 

 

 

 

 

8,957,763

 

               

Rhode Island—2.0%

 

 

 

 

 

 

 

Rhode Island Clean Water Finance Agency, Water PCR, 6.70%, 10/01/10 (a)

 

 

235

 

 

237,667

 

Rhode Island State and Providence Plantations, GO, Refunding (Consolidated Capital Development Loan), Series B, 4.20%, 6/01/10 (c)

 

 

5,000

 

 

5,209,300

 

 

 

 

 

 

     

 

 

 

 

 

 

5,446,967

 

               

Tennessee—0.8%

 

 

 

 

 

 

 

Clarksville, Tennessee, Water, Sewer and Gas Revenue Refunding Bonds (b):

 

 

 

 

 

 

 

4.45%, 2/01/10

 

 

1,005

 

 

1,036,647

 

4.65%, 2/01/11

 

 

1,100

 

 

1,149,731

 

 

 

 

 

 

     

 

 

 

 

 

 

2,186,378

 

               

Texas—13.0%

 

 

 

 

 

 

 

Bexar, Texas, Metropolitan Water District, Waterworks System Revenue Refunding Bonds (b):

 

 

 

 

 

 

 

3.70%, 5/01/10

 

 

770

 

 

787,748

 

3.70%, 5/01/10 (e)

 

 

315

 

 

324,967

 

3.80%, 5/01/11

 

 

775

 

 

796,026

 

3.80%, 5/01/11 (e)

 

 

315

 

 

330,117

 

Dallas, Texas, Area Rapid Transit, Sales Tax Revenue Refunding Bonds, Senior Lien, 4.30%, 12/01/10 (d)

 

 

2,000

 

 

2,088,580

 

Harris County, Texas, Tax Road, GO, Refunding, Series A, 5%, 10/01/10 (b)

 

 

1,500

 

 

1,579,095

 


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 

           

Texas—(concluded)

 

 

 

 

 

 

 

Houston, Texas, Area Water Corporation, Contract Revenue Bonds (Northeast Water Purification Project), 4.50%, 3/01/11 (c)(e)

 

$

2,490

 

$

2,630,212

 

Houston, Texas, GO, Refunding, Series A, 5%, 3/01/11 (a)

 

 

5,000

 

 

5,290,250

 

Houston, Texas, Water and Sewer System, Revenue Refunding Bonds, Junior Lien, Series C, 6.724%, 12/01/10 (d)(f)

 

 

10,440

 

 

9,889,394

 

Katy, Texas, Independent School District, GO, CABS, Refunding, Series A, 4.85%, 2/15/11 (f)

 

 

5,550

 

 

5,234,149

 

Texas Municipal Power Agency, Revenue Refunding Bonds, 5.50%, 9/01/10 (a)

 

 

4,000

 

 

4,186,440

 

University of Houston, Texas, University Revenue Bonds, Series A, 4%, 2/15/10 (b)

 

 

1,500

 

 

1,543,845

 

 

 

 

 

 

     

 

 

 

 

 

 

34,680,823

 

               

Utah—2.4%

 

 

 

 

 

 

 

Intermountain Power Agency, Utah, Power Supply Revenue Refunding Bonds, Series A, 5.25%, 7/01/11 (a)

 

 

3,470

 

 

3,541,517

 

Salt Lake County, Utah, Water Conservancy District, Revenue Refunding Bonds, CABS, Series A, 6.898%, 10/01/10 (d)(f)

 

 

3,175

 

 

2,999,296

 

 

 

 

 

 

     

 

 

 

 

 

 

6,540,813

 

               

Washington—13.2%

 

 

 

 

 

 

 

Benton County, Washington, School District Number 017 (Kennewick), GO, Refunding, 4.50%, 12/01/10 (b)

 

 

7,345

 

 

7,671,926

 

Chelan County, Washington, School District Number 246 (Wenatchee), GO, 4.50%, 12/01/10 (b)

 

 

1,000

 

 

1,044,510

 

Clark County, Washington, Public Utility District Number 001, Electric Revenue Refunding Bonds, 4.50%, 1/01/11 (d)

 

 

3,000

 

 

3,091,440

 

Clark County, Washington, School District Number 114 (Evergreen), GO, 4.125%, 12/01/10 (b)

 

 

2,040

 

 

2,118,071

 

Tacoma, Washington, GO, 4.625%, 12/01/10 (a)(c)

 

 

1,010

 

 

1,055,410

 

Washington State, GO, Series A, 5.50%, 7/01/09 (a)(g)

 

 

4,000

 

 

4,093,200

 

Washington State Public Power Supply System, Revenue Refunding Bonds, Series A (a)(f):

 

 

 

 

 

 

 

(Nuclear Project Number 2), 6.459%, 7/01/10

 

 

3,745

 

 

3,579,284

 

(Nuclear Project Number 2), 6.459%, 7/01/10 (e)

 

 

9,160

 

 

8,902,512

 

(Nuclear Project Number 3), CABS, 5.071%, 7/01/10

 

 

1,300

 

 

1,250,223

 

Whatcom County, Washington, School District Number 503 (Blaine), GO, Refunding, 4.50%, 12/01/10 (b)

 

 

2,280

 

 

2,383,238

 

 

 

 

 

 

     

 

 

 

 

 

 

35,189,814

 

               

West Virginia—3.6%

 

 

 

 

 

 

 

West Virginia EDA, Lease Revenue Bonds (Correctional, Juvenile and Public Safety Facilities), Series A (a):

 

 

 

 

 

 

 

4.50%, 6/01/10

 

 

3,705

 

 

3,798,662

 

4.50%, 6/01/11

 

 

4,420

 

 

4,550,213

 

West Virginia School Building Authority, Capital Improvement Revenue Refunding Bonds, 4%, 7/01/11 (d)

 

 

1,170

 

 

1,198,115

 

 

 

 

 

 

     

 

 

 

 

 

 

9,546,990

 

               

Wisconsin—2.2%

 

 

 

 

 

 

 

Appleton, Wisconsin, Waterworks Revenue Refunding Bonds, 4.375%, 1/01/11 (c)(e)

 

 

1,045

 

 

1,103,342

 

Wisconsin State, Clean Water Revenue Refunding Bonds, Series 2, 4%, 6/01/10 (a)

 

 

4,640

 

 

4,794,605

 

 

 

 

 

 

     

 

 

 

 

 

 

5,897,947

 

               

Wyoming—2.2%

 

 

 

 

 

 

 

Albany County, Wyoming, Improvements Statutory Trust, COP (a):

 

 

 

 

 

 

 

4%, 1/15/10

 

 

1,325

 

 

1,351,341

 

4%, 7/15/10

 

 

1,450

 

 

1,482,581

 

4%, 1/15/11

 

 

1,480

 

 

1,511,228

 

4%, 7/15/11

 

 

1,510

 

 

1,546,633

 

 

 

 

 

 

     

 

 

 

 

 

 

5,891,783

 

               

Total Investments (Cost—$251,730,709*)—98.2%

 

 

 

 

 

262,143,938

 

Other Assets Less Liabilities—1.8%

 

 

 

 

 

4,854,241

 

 

 

 

 

 

     

Net Assets—100.0%

 

 

 

 

$

266,998,179

 

 

 

 

 

 

     

See Notes to Financial Statements.

 

 

 

 

 

 

 

 

 

ANNUAL REPORT

DECEMBER 31, 2008

13



 

 


 

Schedule of Investments (concluded)

BlackRock Insured Municipal Term Trust (BMT)

 

(Percentages shown are based on Net Assets)


 

 

*

The cost and unrealized appreciation (depreciation) of investments as of December 31, 2008, as computed for federal income tax purposes, were as follows:


 

 

 

 

 

 

 

Aggregate cost

 

$

251,421,335

 

 

 

 

   

 

 

Gross unrealized appreciation

 

$

10,794,185

 

 

Gross unrealized depreciation

 

 

(71,582

)

 

 

 

   

 

 

Net unrealized appreciation

 

$

10,722,603

 

 

 

 

   

 


 

 

(a)

MBIA Insured.

 

 

(b)

FSA Insured.

 

 

(c)

FGIC Insured.

 

 

(d)

AMBAC Insured.

 

 

(e)

Security is collateralized by Municipal or US Treasury Obligations.

 

 

(f)

Represents a zero-coupon bond. Rate shown reflects the current yield as of report date.

 

 

(g)

US government securities, held in escrow, are used to pay interest on this security as well as to retire the bond in full at the date indicated, typically at a premium to par.

 

 

Investments in companies considered to be an affiliate of the Trust, for purposes of Section 2(a)(3) of the Investment Company Act of 1940, were as follows:


 

 

 

 

 

 

 

 

 

 

               

 

Affiliate

 

Net
Activity

 

Income

 

 

           

 

Merrill Lynch Institutional Tax-Exempt Fund

 

 

 

$

116,248

 

 

               

 

 

 

Effective January 1, 2008, the Trust adopted Financial Accounting Standards Board Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (“FAS 157”). FAS 157 clarifies the definition of fair value, establishes a framework for measuring fair values and requires additional disclosures about the use of fair value measurements. Various inputs are used in determining the fair value of investments, which are as follows:

 

 

 

 

Level 1—price quotations in active markets/exchanges for identical

 

 

 

 

Level 2—other observable inputs (including, but not limited to: quoted prices for similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks, and default rates) or other market-corroborated inputs)

 

 

 

 

Level 3—unobservable inputs based on the best information available in the circumstance, to the extent observable inputs are not available (including the Trust’s own assumption used in determining the fair value of investments)

 

 

 

 

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. For information about the Trust’s policy regarding valuation of investments and other significant accounting policies, please refer to Note 1 of the Notes to Financial Statements.

The following table summarizes the inputs used as of December 31, 2008 in determining the fair valuation of the Trust’s investments:

 

 

 

 

 

         

Valuation
   Inputs

 

Investments in
Securities

 

       

 

 

Assets

 

 

 

   

Level 1

 

 

 

Level 2

 

$

262,143,938

 

Level 3

 

 

 

         

Total

 

$

262,143,938

 

 

 

     

See Notes to Financial Statements.

 

 

 

 

 

 

 

 

14

ANNUAL REPORT

DECEMBER 31, 2008

 



 

 



Schedule of Investments December 31, 2008

BlackRock Municipal 2018 Term Trust (BPK)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 

           

Alabama—3.1%

 

 

 

 

 

 

 

Courtland, Alabama, IDB, Solid Waste Disposal Revenue Refunding Bonds (International Paper Company Project), Series A, 4.75%, 5/01/17

 

$

1,000

 

$

725,010

 

Huntsville, Alabama, Health Care Authority, Revenue Refunding Bonds, GO, Series A, 5.625%, 6/01/22

 

 

5,845

 

 

5,060,952

 

 

 

 

 

 

     

 

 

 

 

 

 

5,785,962

 

           

Arizona—0.4%

 

 

 

 

 

 

 

Salt Verde Financial Corporation, Arizona, Senior Gas Revenue Bonds, 5.25%, 12/01/20

 

 

1,000

 

 

762,340

 

               

California—7.5%

 

 

 

 

 

 

 

Agua Caliente Band of Cahuilla Indians, California, Casino Revenue Bonds, 5.60%, 7/01/13

 

 

1,750

 

 

1,518,003

 

California Pollution Control Financing Authority, Solid Waste Disposal Revenue Bonds (Waste Management, Inc. Project), AMT, Series C, 5.125%, 11/01/23

 

 

6,500

 

 

4,148,495

 

California Pollution Control Financing Authority, Solid Waste Disposal Revenue Refunding Bonds (Republic Services, Inc. Project), AMT, Series C, 5.25%, 6/01/23

 

 

5,000

 

 

3,679,350

 

Clovis, California, Unified School District, Capital Appreciation, GO (Election of 2004), Series A, 5.124%, 8/01/21 (a)(b)(c)(d)

 

 

5,425

 

 

3,258,635

 

Lincoln, California, Special Tax Bonds (Community Facilities District Number 2003-1), 5.90%, 9/01/13 (e)

 

 

1,100

 

 

1,307,526

 

 

 

 

 

 

     

 

 

 

 

 

 

13,912,009

 

               

Colorado—4.2%

 

 

 

 

 

 

 

Colorado HFA, Solid Waste Disposal Revenue Bonds (Waste Management, Inc.), AMT, 5.70%, 7/01/18

 

 

5,000

 

 

3,668,600

 

Park Creek Metropolitan District, Colorado, Senior Limited Tax Supported Revenue Refunding Bonds, 5.25%, 12/01/20

 

 

5,010

 

 

4,026,487

 

 

 

 

 

 

     

 

 

 

 

 

 

7,695,087

 

               

Connecticut—1.5%

 

 

 

 

 

 

 

Mashantucket Western Pequot Tribe, Connecticut, Special Revenue Refunding Bonds, Sub-Series B, 5.75%, 9/01/18 (f)

 

 

3,750

 

 

2,831,662

 

               

Florida—6.7%

 

 

 

 

 

 

 

Broward County, Florida, School Board, COP, Series A, 5.25%, 7/01/22 (g)

 

 

1,250

 

 

1,260,237

 

Miami Beach, Florida, Health Facilities Authority, Hospital Revenue Refunding Bonds (Mount Sinai Medical Center of Florida), 6.75%, 11/15/21

 

 

3,790

 

 

2,956,427

 

Pine Island Community Development District, Florida, Utilities System Revenue Bonds, 5.30%, 11/01/10

 

 

705

 

 

657,243

 

Stevens Plantation Community Development District, Florida, Special Assessment Revenue Bonds, Series B, 6.375%, 5/01/13

 

 

2,270

 

 

1,709,106

 

Village Center Community Development District, Florida, Recreational Revenue Bonds, Sub-Series B, 5.875%, 1/01/15

 

 

5,410

 

 

4,882,471

 

Westchester Community Development District Number 1, Florida, Special Assessment Bonds (Community Infrastructure), 6%, 5/01/23

 

 

1,345

 

 

935,690

 

 

 

 

 

 

     

 

 

 

 

 

 

12,401,174

 

               

Illinois—24.6%

 

 

 

 

 

 

 

Centerpoint Intermodal Center Program Trust, Illinois, Tax Allocation Bonds, Class A, 8%, 6/15/23 (f)

 

 

1,825

 

 

1,373,732

 

Chicago, Illinois, O’Hare International Airport, General Airport Revenue Bonds, Third Lien, Series A (h):

 

 

 

 

 

 

 

5%, 1/01/19

 

 

5,000

 

 

5,014,650

 

5%, 1/01/20

 

 

3,000

 

 

2,947,740

 

Chicago, Illinois, O’Hare International Airport, General Airport Revenue Refunding Bonds, Third Lien, AMT, Series A, 5.75%, 1/01/18 (c)

 

 

5,000

 

 

4,796,700

 

Illinois Development Finance Authority, Hospital Revenue Bonds (Adventist Health System/Sunbelt Obligated Group), 5.50%, 11/15/09 (e)

 

 

12,500

 

 

13,118,375

 

 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 

               

Illinois—(concluded)

 

 

 

 

 

 

 

Illinois Educational Facilities Authority, Student Housing Revenue Bonds (Education Advancement Fund—University Center Project), 6%, 5/01/12 (e)

 

$

5,980

 

$

6,792,981

 

Illinois Health Facilities Authority, Revenue Refunding Bonds (Elmhurst Memorial Healthcare), 5.50%, 1/01/22

 

 

5,000

 

 

4,182,300

 

Illinois Sports Facilities Authority, State Tax Supported Revenue Bonds (h)(i):

 

 

 

 

 

 

 

5.35%, 6/15/19

 

 

1,885

 

 

1,826,980

 

5.45%, 6/15/20

 

 

1,985

 

 

1,896,290

 

5.40%, 6/15/21

 

 

2,090

 

 

1,982,177

 

Illinois State Finance Authority, Student Housing Revenue Bonds (MJH Education Assistance IV LLC), Senior Series A, 5.50%, 6/01/19 (j)(k)

 

 

2,750

 

 

1,507,495

 

 

 

 

 

 

     

 

 

 

 

 

 

45,439,420

 

               

Indiana—14.3%

 

 

 

 

 

 

 

Indiana Health Facilities Financing Authority Revenue Bonds (Sisters of St. Francis Health System), 5.75%, 11/01/11 (e)

 

 

13,970

 

 

15,650,172

 

Indianapolis, Indiana, Airport Authority, Special Facilities, Revenue Refunding Bonds (Federal Express Corporation Project), AMT, 5.10%, 1/15/17

 

 

2,500

 

 

1,919,750

 

Lawrence, Indiana, M/F Housing, Revenue Refunding Bonds (Pinnacle Apartments Project), AMT, 5.15%, 6/01/24 (l)

 

 

2,895

 

 

2,836,492

 

Petersburg, Indiana, PCR, Refunding (Indianapolis Power & Light Co. Project), AMT, 5.75%, 8/01/21

 

 

4,000

 

 

3,170,040

 

Vincennes, Indiana, EDR, Refunding, 6.25%, 1/01/24

 

 

4,070

 

 

2,840,860

 

 

 

 

 

 

     

 

 

 

 

 

 

26,417,314

 

               

Kentucky—1.4%

 

 

 

 

 

 

 

Kentucky Housing Corporation, Housing Revenue Bonds, AMT, Series C, 4.625%, 7/01/22

 

 

3,195

 

 

2,636,833

 

               

Louisiana—1.4%

 

 

 

 

 

 

 

Louisiana Public Facilities Authority Revenue Bonds (Department of Public Safety), Term Bond 1, 5.875%, 6/15/14 (c)

 

 

2,485

 

 

2,555,972

 

               

Maryland—1.9%

 

 

 

 

 

 

 

Frederick County, Maryland, Special Obligation Tax Bonds (Urbana Community Development Authority), Series A, 5.80%, 7/01/20

 

 

4,710

 

 

3,503,816

 

               

Massachusetts—0.5%

 

 

 

 

 

 

 

Massachusetts State Water Pollution Abatement Trust, Water Abatement Revenue Refunding Bonds (MWRA Program), Sub-Series A, 6%, 8/01/23

 

 

1,000

 

 

1,023,550

 

               

Michigan—2.0%

 

 

 

 

 

 

 

Michigan State Hospital Finance Authority, Hospital Revenue Refunding Bonds:

 

 

 

 

 

 

 

(Oakwood Obligated Group), Series A, 5%, 7/15/18

 

 

1,000

 

 

879,630

 

(Sparrow Obligated Group), 4.50%, 11/15/26

 

 

3,500

 

 

2,123,380

 

Pontiac, Michigan, Tax Increment Finance Authority, Revenue Refunding Bonds (Development Area Number 3), 5.375%, 6/01/12 (e)(m)

 

 

640

 

 

712,230

 

 

 

 

 

 

     

 

 

 

 

 

 

3,715,240

 

               

Mississippi—3.7%

 

 

 

 

 

 

 

Lowndes County, Mississippi, Solid Waste Disposal and PCR, Refunding (Weyerhaeuser Company Project), Series A, 6.80%, 4/01/22

 

 

9,000

 

 

6,763,320

 

               

Nevada—2.6%

 

 

 

 

 

 

 

Henderson, Nevada, Local Improvement Districts, Special Assessment, Series NO T-18, 5.15%, 9/01/21

 

 

1,000

 

 

400,010

 

Las Vegas, Nevada, Special Assessment Improvement, District Number 809 (Summerlin Area), 5.35%, 6/01/17

 

 

1,060

 

 

674,118

 

Nevada State Department of Business and Industry, Solid Waste Disposal Revenue Bonds (Republic Services Inc. Project), AMT, 5.625%, 12/01/26

 

 

5,000

 

 

3,747,050

 

 

 

 

 

 

     

 

 

 

 

 

 

4,821,178

 

               

 

 

 

 

See Notes to Financial Statements.

 

 

 

 

 

 

ANNUAL REPORT

DECEMBER 31, 2008

15






Schedule of Investments (continued)

 

BlackRock Municipal 2018 Term Trust (BPK)

 

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 

           

New Hampshire—6.3%

 

 

 

 

 

 

 

New Hampshire Health and Education Facilities Authority Revenue Bonds (Exeter Hospital Project), 6%, 10/01/24

 

$

2,025

 

$

1,813,793

 

New Hampshire State Business Finance Authority, PCR, Refunding (c):

 

 

 

 

 

 

 

(Public Service Company of New Hampshire Project), Series C, 5.45%, 5/01/21

 

 

7,000

 

 

6,041,420

 

(Public Service Company Project), AMT, Series B, 4.75%, 5/01/21

 

 

6,000

 

 

3,813,060

 

 

 

 

 

 

     

 

 

 

 

 

 

11,668,273

 

               

New Jersey—11.3%

 

 

 

 

 

 

 

New Jersey EDA, Cigarette Tax Revenue Bonds, 5.50%, 6/15/24

 

 

7,000

 

 

5,148,710

 

New Jersey EDA, EDR, Special Assessment Refunding Bonds (Kapkowski Road Landfill Reclamation Improvement District Project), AMT, 5.50%, 4/01/16

 

 

8,410

 

 

6,717,824

 

New Jersey EDA, Special Facility Revenue Bonds (Continental Airlines Inc. Project), AMT:

 

 

 

 

 

 

 

7%, 11/15/30

 

 

4,065

 

 

2,146,686

 

7.20%, 11/15/30

 

 

6,750

 

 

3,619,148

 

New Jersey Health Care Facilities Financing Authority, Revenue Refunding Bonds (AtlantiCare Regional Medical Center), 5%, 7/01/20

 

 

1,500

 

 

1,319,730

 

New Jersey State Housing and Mortgage Finance Agency, S/F Housing Revenue Bonds, AMT, Series T, 4.55%, 10/01/22

 

 

2,500

 

 

2,042,800

 

 

 

 

 

 

     

 

 

 

 

 

 

20,994,898

 

               

New York—7.7%

 

 

 

 

 

 

 

New York City, New York, City IDA, Special Facility Revenue Bonds (American Airlines, Inc.—JFK International Airport), AMT, 7.625%, 8/01/25

 

 

3,460

 

 

2,087,245

 

New York City, New York, GO, Sub-Series F-1, 5%, 9/01/18

 

 

7,500

 

 

7,710,450

 

Tobacco Settlement Financing Corporation of New York Revenue Bonds, Series B-1C, 5.50%, 6/01/20

 

 

4,500

 

 

4,462,200

 

 

 

 

 

 

     

 

 

 

 

 

 

14,259,895

 

               

North Carolina—3.5%

 

 

 

 

 

 

 

North Carolina, HFA, Home Ownership Revenue Bonds, AMT, Series 28A, 4.65%, 7/01/23

 

 

3,140

 

 

2,553,291

 

Wake County, North Carolina, Industrial Facilities and Pollution Control Financing Authority, Revenue Refunding Bonds (Carolina Power & Light Company Project), 5.375%, 2/01/17

 

 

4,000

 

 

4,010,720

 

 

 

 

 

 

     

 

 

 

 

 

 

6,564,011

 

               

Ohio—2.9%

 

 

 

 

 

 

 

American Municipal Power, Inc., Ohio, Revenue Refunding Bonds (Prairie State Energy Campus Project), Series A, 5.25%, 2/15/23

 

 

5,000

 

 

5,046,600

 

Pinnacle Community Infrastructure Financing Authority, Ohio, Revenue Bonds, Series A, 6%, 12/01/22

 

 

460

 

 

311,530

 

 

 

 

 

 

     

 

 

 

 

 

 

5,358,130

 

               

Oklahoma—1.1%

 

 

 

 

 

 

 

Tulsa, Oklahoma, Municipal Airport Trust, Revenue Refunding Bonds, Series A, 7.75%, 6/01/35

 

 

2,700

 

 

2,044,764

 

               

Pennsylvania—6.9%

 

 

 

 

 

 

 

Montgomery County, Pennsylvania, IDA, Revenue Bonds (Whitemarsh Continuing Care Project), 6%, 2/01/21

 

 

2,000

 

 

1,393,660

 

Philadelphia, Pennsylvania, Authority for Industrial Development, Lease Revenue Bonds, Series B, 5.50%, 10/01/11 (e)(g)

 

 

5,000

 

 

5,563,100

 

West Cornwall Township, Pennsylvania, Municipal Authority College Revenue Bonds (Elizabethtown College Project) (e):

 

 

 

 

 

 

 

5.90%, 12/15/11

 

 

2,500

 

 

2,800,700

 

6%, 12/15/11

 

 

2,650

 

 

2,976,348

 

 

 

 

 

 

     

 

 

 

 

 

 

12,733,808

 

               

 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 

           

South Carolina—2.4%

 

 

 

 

 

 

 

South Carolina Jobs EDA, Hospital Facilities Revenue Refunding Bonds (Palmetto Health Alliance), Series A, 6.125%, 8/01/23

 

$

5,000

 

$

4,404,250

 

               

Tennessee—3.7%

 

 

 

 

 

 

 

Knox County, Tennessee, Health, Educational and Housing Facilities Board, Hospital Facilities Revenue Refunding Bonds (Covenant Health), CABS, Series A, 5.63%, 1/01/19 (d)(g)

 

 

12,000

 

 

6,800,880

 

               

Texas—12.9%

 

 

 

 

 

 

 

Alliance Airport Authority, Inc., Texas, Special Facilities Revenue Refunding Bonds (FedEx Corp. Project), AMT, 4.85%, 4/01/21

 

 

2,000

 

 

1,373,720

 

Birdville, Texas, Independent School District, GO, Refunding, CABS (d):

 

 

 

 

 

 

 

5.40%, 2/15/18

 

 

1,615

 

 

1,089,673

 

5.46%, 2/15/19

 

 

1,815

 

 

1,144,357

 

5.51%, 2/15/20

 

 

2,625

 

 

1,542,817

 

5.54%, 2/15/21

 

 

2,500

 

 

1,371,925

 

Brazos River Authority, Texas, PCR, Refunding (TXU Energy Company Project), AMT, Series C, 5.75%, 5/01/36

 

 

10,010

 

 

7,683,576

 

Dallas-Fort Worth, Texas, International Airport Revenue Refunding and Improvement Bonds, AMT, Series A (b)(c):

 

 

 

 

 

 

 

5.875%, 11/01/17

 

 

5,000

 

 

4,853,250

 

5.875%, 11/01/18

 

 

5,000

 

 

4,791,800

 

 

 

 

 

 

     

 

 

 

 

 

 

23,851,118

 

               

Virginia—1.3%

 

 

 

 

 

 

 

Virginia State, HDA, Commonwealth Mortgage Revenue Refunding Bonds, AMT, Sub-Series E-2, 4.375%, 10/01/19

 

 

2,750

 

 

2,340,470

 

               

Wisconsin—9.9%

 

 

 

 

 

 

 

Franklin, Wisconsin, Solid Waste Disposal, Revenue Bonds, 4.95%, 4/01/16

 

 

1,990

 

 

1,497,037

 

Wisconsin State Health and Educational Facilities Authority, Revenue Refunding Bonds:

 

 

 

 

 

 

 

(Froedtert and Community Health) 5.375%, 10/01/11 (e)

 

 

4,560

 

 

5,049,151

 

(Froedtert and Community Health) 5.375%, 10/01/21

 

 

440

 

 

421,815

 

(Wheaton Franciscan Services, Inc.), 6.25%, 2/15/12 (e)

 

 

10,000

 

 

11,396,800

 

 

 

 

 

 

     

 

 

 

 

 

 

18,364,803

 

               

Puerto Rico—1.3%

 

 

 

 

 

 

 

Puerto Rico Commonwealth, Public Improvement, GO, Series B, 5.25%, 7/01/17

 

 

2,665

 

 

2,365,294

 

               

Multi-State—11.8%

 

 

 

 

 

 

 

Charter Mac Equity Issuer Trust, 6.80%, 10/31/52 (f)(n)

 

 

14,000

 

 

14,889,560

 

MuniMae TE Bond Subsidiary LLC (f)(n):

 

 

 

 

 

 

 

5.20%, 6/29/49

 

 

6,000

 

 

4,482,240

 

Series D, 5.90%, 11/29/49

 

 

4,000

 

 

2,380,960

 

 

 

 

 

 

     

 

 

 

 

 

 

21,752,760

 

               

Total Municipal Bonds—158.8%

 

 

 

 

 

293,768,231

 

               

 

 

 

 

 

 

 

 









Tax-Exempt Corporate Bonds

 

 

 

 

 

 

 

               

San Manuel Entertainment Authority Series 04-C, 4.50%, 12/01/16 (f)

 

 

4,000

 

 

3,201,320

 

               

Total Corporate Bonds—1.7%

 

 

 

 

 

3,201,320

 

               

 

 

 

 

See Notes to Financial Statements.

 

 

 

 

 

16

ANNUAL REPORT

DECEMBER 31, 2008

 





Schedule of Investments (concluded)

BlackRock Municipal 2018 Term Trust (BPK)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (o)

 

Par
(000)

 

Value

 

           

Illinois—2.8%

 

 

 

 

 

 

 

Chicago, Illinois, Water Revenue Refunding Bonds, Second Lien, 5%, 11/01/20 (g)

 

$

5,000

 

$

5,216,800

 

               

Total Municipal Bonds Transferred to Tender Option Bond Trusts—2.8%

 

 

 

 

 

5,216,800

 

               

Total Long-Term Investments
(Cost—$343,353,794)—163.3%

 

 

 

 

 

302,186,351

 

               

Short-Term Securities

 

Shares

 

 

 

 

               

Merrill Lynch Institutional Tax-Exempt Fund, 1.18% (p)(q)

 

 

16,213,640

 

 

16,213,640

 

               

Total Short-Term Securities (Cost—$16,213,640)—8.8%

 

 

 

 

 

16,213,640

 

               

Total Investments (Cost—$359,567,434*)—172.1%

 

 

 

 

 

318,399,991

 

Other Assets Less Liabilities—2.3%

 

 

 

 

 

4,309,593

 

Liabilities for Trust Certificates, Including Interest Expense and Fees Payable—(2.0)%

 

 

 

 

 

(3,765,231

)

Preferred Shares, at Redemption Value—(72.4)%

 

 

 

 

 

(133,894,980

)

 

 

 

 

 

     

Net Assets Applicable to Common Shares—100.0%

 

 

 

 

$

185,049,373

 

               

 

 

 

 

 

 

*

The cost and unrealized appreciation (depreciation) of investments as of December 31, 2008, as computed for federal income tax purposes, were as follows:

 

 

 

 

 

 

 

Aggregate cost

 

$

355,718,252

 

 

 

 

     

 

Gross unrealized appreciation

 

$

8,475,553

 

 

Gross unrealized depreciation

 

 

(49,543,814

)

 

 

 

     

 

Net unrealized depreciation

 

$

(41,068,261

)

 

 

 

     

 

 

(a)

Security is collateralized by Municipal or US Treasury Obligations.

 

 

(b)

FGIC Insured.

 

 

(c)

MBIA Insured.

 

 

(d)

Represents a zero-coupon bond. Rate shown reflects the current yield as of report date.

 

 

(e)

US government securities, held in escrow, are used to pay interest on this security as well as to retire the bond in full at the date indicated, typically at a premium to par.

 

 

(f)

Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration to qualified institutional investors.

 

 

(g)

FSA Insured.

 

 

(h)

AMBAC Insured.

 

 

(i)

Represents a step bond. Rate shown is as of report date.

 

 

(j)

Issuer filed for bankruptcy and/or is in default of interest payments.

 

 

(k)

Non-income producing security.

 

 

(l)

FNMA Collateralized.

 

 

(m)

ACA Insured.

 

 

(n)

Security represents a beneficial interest in a trust. The collateral deposited into the trust is federally tax-exempt revenue bonds issued by various state or local governments, or their respective agencies or authorities. The security is subject to remarketing prior to its stated maturity, and is subject to mandatory redemption at maturity.

 

 

(o)

Securities represent underlying bonds transferred to a separate securitization trust established in a tender option bond transaction in which the Trust may have acquired the residual interest certificates. These securities serve as a collateral in a financing transaction. See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to tender option bond trusts.

 

 

(p)

Represents the current yield as of report date.

 

 

(q)

Investments in companies considered to be an affiliate of the Trust, for purposes of Section 2(a)(3) of the Investment Company Act of 1940, were as follows:


 

 

 

 

 

 

 

 

 

 

           

 

Affiliate

 

Net
Activity

 

Income

 

 

           

 

Merrill Lynch Institutional Tax-Exempt Fund

 

$

15,513,640

 

$

78,495

 

 

               

 

 

 

Effective January 1, 2008, the Trust adopted Financial Accounting Standards Board Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (“FAS 157”). FAS 157 clarifies the definition of fair value, establishes a framework for measuring fair values and requires additional disclosures about the use of fair value measurements. Various inputs are used in determining the fair value of investments, which are as follows:

 

 

 

 

Level 1—price quotations in active markets/exchanges for identical

 

 

 

 

Level 2—other observable inputs (including, but not limited to: quoted prices for similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks, and default rates) or other market-corroborated inputs)

 

 

 

 

Level 3—unobservable inputs based on the best information available in the circumstance, to the extent observable inputs are not available (including the Trust’s own assumption used in determining the fair value of investments)

 

 

 

 

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. For information about the Trust’s policy regarding valuation of investments and other significant accounting policies, please refer to Note 1 of the Notes to Financial Statements.

 

 

 

 

The following table summarizes the inputs used as of December 31, 2008 in determining the fair valuation of the Trust’s investments:


 

 

 

 

 

         

Valuation
    Inputs

 

 

Investments in
Securities

 

         

 

 

 

Assets

 

 

 

     

Level 1

 

$

16,213,640

 

Level 2

 

 

302,186,351

 

Level 3

 

 

 

         

Total

 

$

318,399,991

 

 

 

     

 

 

 

 

See Notes to Financial Statements.

 

 

 

 

 

 

 

ANNUAL REPORT

DECEMBER 31, 2008

17



 

 


 

 

Schedule of Investments December 31, 2008

BlackRock Municipal 2020 Term Trust (BKK)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 

           

Alabama—0.4%

 

 

 

 

 

 

 

Courtland, Alabama, IDB, Solid Waste Disposal Revenue Refunding Bonds (International Paper Company Project), Series A, 4.75%, 5/01/17

 

$

1,165

 

$

844,637

 

             

Arizona—0.9%

 

 

 

 

 

 

 

Salt Verde Financial Corporation, Arizona, Senior Gas Revenue Bonds:

 

 

 

 

 

 

 

5%, 12/01/18

 

 

1,500

 

 

1,199,775

 

5.25%, 12/01/20

 

 

1,000

 

 

762,340

 

 

 

 

 

 

   

 

 

 

 

 

 

 

1,962,115

 

             

California—24.4%

 

 

 

 

 

 

 

California State, Various Purpose, GO, 5%, 11/01/22

 

 

7,050

 

 

6,795,072

 

California Statewide Communities Development Authority Revenue Bonds (John Muir Health), Series A, 5%, 8/15/22

 

 

5,000

 

 

4,308,200

 

Foothill/Eastern Corridor Agency, California, Toll Road Revenue Refunding Bonds, CABS (a):

 

 

 

 

 

 

 

5.953%, 1/15/21

 

 

12,500

 

 

4,321,500

 

5.858%, 1/15/22

 

 

10,000

 

 

3,126,000

 

Golden State Tobacco Securitization Corporation of California, Tobacco Settlement Revenue Bonds (b):

 

 

 

 

 

 

 

Series A-1, 6.625%, 6/01/13

 

 

3,000

 

 

3,464,070

 

Series A-1, 6.75%, 6/01/13

 

 

12,010

 

 

13,929,678

 

Series A-3, 7.875%, 6/01/13

 

 

975

 

 

1,178,063

 

Series A-5, 7.875%, 6/01/13

 

 

1,470

 

 

1,776,157

 

Series B, 5.375%, 6/01/10

 

 

10,000

 

 

10,480,400

 

Riverside County, California, Asset Leasing Corporation, Leasehold Revenue Bonds (Riverside County Hospital Project), 5.736%, 6/01/25 (a)(c)

 

 

6,865

 

 

2,630,256

 

 

 

 

 

 

   

 

 

 

 

 

 

 

52,009,396

 

             

Colorado—1.7%

 

 

 

 

 

 

 

E-470 Public Highway Authority, Colorado Revenue Bonds, CABS, Senior Series B, 5.483%, 9/01/22(a)(c)

 

 

4,500

 

 

1,418,175

 

Park Creek Metropolitan District, Colorado, Senior Limited Tax Supported Revenue Refunding Bonds,
5.25%, 12/01/25

 

 

3,000

 

 

2,162,970

 

 

 

 

 

 

   

 

 

 

 

 

 

 

3,581,145

 

             

District of Columbia—5.2%

 

 

 

 

 

 

 

District of Columbia, Revenue Refunding Bonds (Friendship Public Charter School, Inc.) (d):

 

 

 

 

 

 

 

5.75%, 6/01/18

 

 

2,680

 

 

2,064,699

 

5%, 6/01/23

 

 

3,320

 

 

2,050,100

 

District of Columbia Tobacco Settlement Financing Corporation, Asset-Backed Revenue Refunding Bonds, 6.50%, 5/15/33

 

 

4,215

 

 

2,813,681

 

Metropolitan Washington Airports Authority, D.C., Airport System Revenue Refunding Bonds, AMT, Series C-2, 5%, 10/01/24 (e)

 

 

5,000

 

 

4,073,250

 

 

 

 

 

 

   

 

 

 

 

 

 

 

11,001,730

 

             

Florida—14.4%

 

 

 

 

 

 

 

Bellalago, Florida, Educational Facilities Benefits District, Capital Improvement Special Assessment Bonds, Series A, 5.85%, 5/01/22

 

 

4,315

 

 

3,326,692

 

Broward County, Florida, School Board, COP, Series A, 5.25%, 7/01/22 (e)

 

 

1,250

 

 

1,260,238

 

Grand Hampton Community Development District, Florida, Capital Improvement Special Assessment Bonds, 6.10%, 5/01/24

 

 

4,025

 

 

3,077,475

 

Habitat, Florida, Community Development, Special Assessment Bonds, 5.80%, 5/01/25

 

 

3,780

 

 

2,469,928

 

Jacksonville, Florida, Sales Tax Revenue Bonds, 5%, 10/01/22

 

 

5,160

 

 

5,207,214

 

Miami Beach, Florida, Health Facilities Authority, Hospital Revenue Refunding Bonds (Mount Sinai Medical Center of Florida), 6.75%, 11/15/21

 

 

4,715

 

 

3,677,983

 

Middle Village Community Development District, Florida, Special Assessment Bonds, Series A, 5.80%, 5/01/22

 

 

4,155

 

 

2,769,682

 


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 

             

Florida—(concluded)

 

 

 

 

 

 

 

Pine Island Community Development District, Florida, Utilities System Revenue Bonds, 5.30%, 11/01/10

 

$

440

 

$

410,194

 

Stevens Plantation Community Development District, Florida, Special Assessment Revenue Bonds, Series B,
6.375%, 5/01/13

 

 

3,530

 

 

2,657,772

 

Village Community Development District Number 5, Florida, Special Assessment Bonds, Series A, 6%, 5/01/22

 

 

2,740

 

 

2,180,793

 

Westchester Community Development District Number 1, Florida, Special Assessment Bonds (Community Infrastructure), 6%, 5/01/23

 

 

5,375

 

 

3,739,280

 

 

 

 

 

 

   

 

 

 

 

 

 

 

30,777,251

 

             

Georgia—0.6%

 

 

 

 

 

 

 

Richmond County, Georgia, Development Authority, Environmental Improvement Revenue Bonds (International Paper Co. Projects), AMT, Series A, 5.75%, 11/01/27

 

 

2,350

 

 

1,353,765

 

             

Illinois—15.0%

 

 

 

 

 

 

 

Centerpoint Intermodal Center Program Trust, Illinois, Tax Allocation Bonds, Class A, 8%, 6/15/23 (f)

 

 

2,155

 

 

1,622,133

 

Chicago, Illinois, O’Hare International Airport, General Airport Revenue Bonds, Third Lien, Series A (g):

 

 

 

 

 

 

 

5%, 1/01/21

 

 

5,000

 

 

4,807,950

 

5%, 1/01/22

 

 

7,000

 

 

6,578,880

 

Illinois Development Finance Authority Revenue Bonds (Depaul University), Series C, 5.25%, 10/01/24

 

 

5,000

 

 

4,526,250

 

Illinois Educational Facilities Authority Revenue Bonds (Northwestern University), 5%, 12/01/21

 

 

4,800

 

 

4,968,384

 

Illinois State Finance Authority, Student Housing Revenue Bonds (MJH Education Assistance IV LLC) (h)(i):

 

 

 

 

 

 

 

Senior Series A, 5.50%, 6/01/19

 

 

3,250

 

 

1,781,585

 

Sub-Series B, 5%, 6/01/24

 

 

1,075

 

 

106,371

 

Lake, Cook, Kane and McHenry Counties, Illinois, Community Unit School District Number 220, GO, Refunding, 5.25%, 12/01/20 (e)

 

 

1,000

 

 

1,091,240

 

Metropolitan Pier and Exposition Authority, Illinois, Dedicated State Tax Revenue Refunding Bonds (McCormick), Series A, 5.385%, 6/15/22 (a)(c)

 

 

13,455

 

 

6,483,695

 

 

 

 

 

 

   

 

 

 

 

 

 

 

31,966,488

 

             

Indiana—6.0%

 

 

 

 

 

 

 

Indianapolis, Indiana, Airport Authority, Special Facilities, Revenue Refunding Bonds (Federal Express Corporation Project), AMT, 5.10%, 1/15/17

 

 

10,000

 

 

7,679,000

 

Lawrence, Indiana, M/F Housing, Revenue Refunding Bonds (Pinnacle Apartments Project), AMT, 5.15%, 6/01/24 (j)

 

 

2,000

 

 

1,959,580

 

Vincennes, Indiana, EDR, Refunding, 6.25%, 1/01/24

 

 

4,620

 

 

3,224,760

 

 

 

 

 

 

   

 

 

 

 

 

 

 

12,863,340

 

             

Kansas—1.4%

 

 

 

 

 

 

 

Unified Government of Wyandotte County and Kansas City, Kansas, Sales Tax Special Obligation Revenue Bonds (Kansas International Speedway Corporation Project), 5.198%, 12/01/20 (a)

 

 

6,440

 

 

3,079,028

 

             

Kentucky—0.8%

 

 

 

 

 

 

 

Kentucky Housing Corporation, Housing Revenue Bonds, AMT, Series C, 4.625%, 7/01/22

 

 

2,000

 

 

1,650,600

 

             

Louisiana—0.5%

 

 

 

 

 

 

 

De Soto Parish, Louisiana, Environmental Improvement Revenue Bonds (International Paper Co. Project), AMT, Series A, 5.85%, 11/01/27

 

 

2,000

 

 

1,167,700

 

             

Maryland—5.9%

 

 

 

 

 

 

 

Frederick County, Maryland, Special Obligation Tax Bonds (Urbana Community Development Authority), 6.625%, 7/01/25
Series A, 5.80%, 7/01/20

 

 

3,000

4,711

 

 

2,184,540

3,504,560

 

Maryland State Health and Higher Educational Facilities Authority, Revenue Refunding Bonds (MedStar Health, Inc.), 5.375%, 8/15/24

 

 

8,500

 

 

6,893,670

 

 

 

 

 

 

   

 

 

 

 

 

 

12,582,770

 

             

See Notes to Financial Statements.

 

 

 

 

 

 

 

 

18

ANNUAL REPORT

DECEMBER 31, 2008

 



 

 

 

 

 

Schedule of Investments (continued)

BlackRock Municipal 2020 Term Trust (BKK)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 

             

Massachusetts—2.2%

 

 

 

 

 

 

 

Massachusetts State Development Finance Agency, Solid Waste Disposal Revenue Bonds (Waste Management, Inc. Project), AMT, 5.45%, 6/01/14

 

$

4,500

 

$

3,691,755

 

Massachusetts State Water Pollution Abatement Trust, Water Abatement Revenue Refunding Bonds (MWRA Program), Sub-Series A, 6%, 8/01/23

 

 

1,000

 

 

1,023,550

 

 

 

 

 

 

   

 

 

 

 

 

 

 

4,715,305

 

             

Michigan—0.4%

 

 

 

 

 

 

 

Michigan State Hospital Finance Authority, Hospital Revenue Refunding Bonds (Sparrow Obligated Group), 4.50%, 11/15/26

 

 

1,500

 

 

910,020

 

             

Minnesota—0.5%

 

 

 

 

 

 

 

Minnesota State Higher Education Facilities Authority Revenue Bonds (University of St. Thomas), Series 5Y, 5%, 10/01/24

 

 

1,250

 

 

1,164,888

 

             

Mississippi—0.8%

 

 

 

 

 

 

 

Warren County, Mississippi, Environmental Improvement Revenue Bonds (International Paper Company Project), AMT, Series A, 5.85%, 11/01/27

 

 

3,000

 

 

1,751,550

 

             

Missouri—4.2%

 

 

 

 

 

 

 

Missouri State Development Finance Board, Infrastructure Facilities Revenue Bonds (Branson Landing Project), Series A, 5.50%, 12/01/24

 

 

5,000

 

 

3,669,100

 

Missouri State Health and Educational Facilities Authority Health Facilities Revenue Refunding Bonds (BJC Health System), Series A, 5%, 5/15/20

 

 

5,500

 

 

5,320,425

 

 

 

 

 

 

   

 

 

 

 

 

 

 

8,989,525

 

             

Nevada—2.5%

 

 

 

 

 

 

 

Clark County, Nevada, EDR, Refunding (Alexander Dawson School of Nevada Project), 5%, 5/15/20

 

 

5,000

 

 

4,693,750

 

Henderson, Nevada, Local Improvement Districts, Special Assessment, Series NO T-18, 5.15%, 9/01/21

 

 

1,765

 

 

706,018

 

 

 

 

 

 

   

 

 

 

 

 

 

 

5,399,768

 

               

New Hampshire—5.1%

 

 

 

 

 

 

 

New Hampshire Health and Education Facilities Authority, Revenue Refunding Bonds (Elliot Hospital), Series B, 5.60%, 10/01/22

 

 

5,000

 

 

4,502,750

 

New Hampshire State Business Finance Authority, PCR, Refunding (Public Service Company Project), AMT, Series B, 4.75%, 5/01/21 (c)

 

 

10,000

 

 

6,355,100

 

 

 

 

 

 

   

 

 

 

 

 

 

 

10,857,850

 

             

New Jersey—11.7%

 

 

 

 

 

 

 

Middlesex County, New Jersey, Improvement Authority Revenue Bonds (George Street Student Housing Project), Series A, 5%, 8/15/23

 

 

1,000

 

 

722,700

 

New Jersey EDA, Cigarette Tax Revenue Bonds, 5.50%, 6/15/24

 

 

10,000

 

 

7,355,300

 

New Jersey EDA, EDR (Kapkowski Road Landfill Reclamation Improvement District Project), AMT, Series B, 6.50%, 4/01/31

 

 

7,500

 

 

5,172,900

 

New Jersey EDA, First Mortgage Revenue Refunding Bonds (The Winchester Gardens at Ward Homestead Project), Series A, 4.80%, 11/01/13

 

 

1,000

 

 

916,140

 

New Jersey EDA, Special Facility Revenue Bonds (Continental Airlines Inc. Project), AMT:

 

 

 

 

 

 

 

7%, 11/15/30

 

 

5,000

 

 

2,640,450

 

9%, 6/01/33

 

 

1,500

 

 

945,720

 

New Jersey Health Care Facilities Financing Authority, Revenue Refunding Bonds:

 

 

 

 

 

 

 

(AtlantiCare Regional Medical Center), 5%, 7/01/20

 

 

2,110

 

 

1,856,420

 

(Capital Health System Inc.), Series A, 5.75%, 7/01/23

 

 

4,000

 

 

3,428,600

 

New Jersey State Housing and Mortgage Finance Agency, S/F Housing Revenue Bonds, AMT, Series T, 4.55%, 10/01/22

 

 

2,500

 

 

2,042,800

 

 

 

 

 

 

   

 

 

 

 

 

 

25,081,030

 

             

 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 

             

New York—8.4%

 

 

 

 

 

 

 

New York City, New York, City IDA, Special Facility Revenue Bonds, AMT:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(American Airlines, Inc.—JFK International Airport),
7.625%, 8/01/25

 

$

5,635

 

$

3,399,314

 

(Continental Airlines Inc. Project), 7.75%, 8/01/31

 

 

5,000

 

 

3,026,350

 

New York State Energy Research and Development Authority, Gas Facilities Revenue Refunding Bonds (Brooklyn Union Gas Company/Keyspan), AMT, Series A, 4.70%, 2/01/24 (k)

 

 

8,500

 

 

6,490,940

 

Tobacco Settlement Financing Corporation of New York Revenue Bonds, Series B-1C, 5.50%, 6/01/20

 

 

5,000

 

 

4,958,000

 

 

 

 

 

 

   

 

 

 

 

 

 

 

17,874,604

 

             

Ohio—8.9%

 

 

 

 

 

 

 

American Municipal Power, Inc., Ohio, Revenue Refunding Bonds (Prairie State Energy Campus Project), Series A, 5.25%, 2/15/23

 

 

5,000

 

 

5,046,600

 

Cuyahoga County, Ohio, Revenue Refunding Bonds, Series A:
6%, 1/01/19
6%, 1/01/20

 

 

3,000

10,000

 

 

3,050,730

10,113,700

 

Pinnacle Community Infrastructure Financing Authority, Ohio, Revenue Bonds, Series A, 6%, 12/01/22

 

 

1,015

 

 

687,399

 

 

 

 

 

 

   

 

 

 

 

 

 

 

18,898,429

 

             

Oklahoma—1.2%

 

 

 

 

 

 

 

Tulsa, Oklahoma, Municipal Airport Trust, Revenue Refunding Bonds, Series A, 7.75%, 6/01/35

 

 

3,350

 

 

2,537,022

 

             

Pennsylvania—6.8%

 

 

 

 

 

 

 

Lancaster County, Pennsylvania, Hospital Authority Revenue Bonds (Lancaster General Hospital Project), 5.75%, 9/15/13 (b)

 

 

7,500

 

 

8,598,375

 

Montgomery County, Pennsylvania, IDA, Revenue Bonds (Whitemarsh Continuing Care Project), 6%, 2/01/21

 

 

1,275

 

 

888,458

 

Pennsylvania State Higher Educational Facilities Authority Revenue Bonds (LaSalle University), 5.50%, 5/01/26

 

 

6,680

 

 

4,864,109

 

 

 

 

 

 

   

 

 

 

 

 

 

 

14,350,942

 

             

Tennessee—3.6%

 

 

 

 

 

 

 

Tennessee Energy Acquisition Corporation, Gas Revenue Bonds, Series A, 5.25%, 9/01/20

 

 

10,000

 

 

7,647,600

 

             

Texas—7.6%

 

 

 

 

 

 

 

Brazos River Authority, Texas, PCR, Refunding (TXU Energy Company LLC Project), AMT, Series A, 6.75%, 4/01/38

 

 

1,100

 

 

895,301

 

Port Corpus Christi, Texas, Industrial Development Corporation Revenue Refunding Bonds, Series C, 5.40%, 4/01/18

 

 

3,500

 

 

2,656,535

 

Texas State Turnpike Authority, Central Texas Turnpike System First Tier Revenue Bonds, CABS, Series A (a)(g):

 

 

 

 

 

 

 

5.382%, 8/15/21

 

 

7,990

 

 

3,434,582

 

5.529%, 8/15/24

 

 

8,450

 

 

2,875,704

 

Weatherford, Texas, Independent School District, GO, Refunding, CABS (a):

 

 

 

 

 

 

 

5.745%, 2/15/11(b)

 

 

4,040

 

 

1,939,079

 

5.773%, 2/15/11(b)

 

 

4,040

 

 

1,830,968

 

5.745%, 2/15/23

 

 

2,905

 

 

1,299,552

 

5.768%, 2/15/24

 

 

2,905

 

 

1,224,574

 

 

 

 

 

 

   

 

 

 

 

 

 

 

16,156,295

 

             

Virginia—8.7%

 

 

 

 

 

 

 

Celebrate North Community Development Authority, Virginia, Special Assessment Revenue Bonds, Series B, 6.60%, 3/01/25

 

 

5,000

 

 

3,579,100

 

Charles City County, Virginia, EDA, Solid Waste Disposal Revenue Bonds (Waste Management, Inc.), AMT, 5.125%, 8/01/27

 

 

10,000

 

 

8,637,100

 

Mecklenburg County, Virginia, IDA, Exempt Facility Revenue Refunding Bonds (UAE LP Project), 6.50%, 10/15/17

 

 

7,500

 

 

6,402,000

 

 

 

 

 

 

   

 

 

 

 

 

 

 

18,618,200

 

See Notes to Financial Statements.

 

 

 

 

 

 

 

 

 

ANNUAL REPORT

DECEMBER 31, 2008

19



 

 

 

 

 

Schedule of Investments (concluded)

BlackRock Municipal 2020 Term Trust (BKK)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 

             

Wisconsin—2.2%

 

 

 

 

 

 

 

Wisconsin State Health and Educational Facilities Authority, Revenue Refunding Bonds (Wheaton Franciscan Services, Inc.), Series A:

 

 

 

 

 

 

 

5.50%, 8/15/17

 

$

2,880

 

$

2,238,854

 

5.50%, 8/15/18

 

 

3,190

 

 

2,381,526

 

 

 

 

 

 

   

 

 

 

 

 

 

 

4,620,380

 

             

Multi-State—8.5%

 

 

 

 

 

 

 

Charter Mac Equity Issuer Trust (f)(l):

 

 

 

 

 

 

 

5.75%, 4/30/15

 

 

1,000

 

 

1,005,910

 

6%, 4/30/15

 

 

4,000

 

 

4,071,240

 

6%, 4/30/19

 

 

2,500

 

 

2,442,175

 

6.30%, 4/30/19

 

 

2,500

 

 

2,493,150

 

MuniMae TE Bond Subsidiary LLC (f)(l)(m):

 

 

 

 

 

 

 

5.40%, 6/29/49

 

 

5,000

 

 

3,488,350

 

5.80%, 6/29/49

 

 

5,000

 

 

3,471,150

 

Series D, 5.90%, 11/29/49

 

 

2,000

 

 

1,190,480

 

 

 

 

 

 

   

 

 

 

 

 

 

 

18,162,455

 

             

Puerto Rico—7.2%

 

 

 

 

 

 

 

Puerto Rico Commonwealth, Public Improvement, GO, Series B, 5.25%, 7/01/17

 

 

3,300

 

 

2,928,882

 

Puerto Rico Electric Power Authority, Power Revenue Bonds, Series NN, 5.125%, 7/01/13 (b)

 

 

10,900

 

 

12,389,049

 

 

 

 

 

 

   

 

 

 

 

 

 

 

15,317,931

 

             

U.S. Virgin Islands—0.4%

 

 

 

 

 

 

 

Virgin Islands Public Finance Authority, Senior Lien Revenue Bonds (Matching Fund Loan Note), Series A, 5.25%, 10/01/17

 

 

1,000

 

 

877,270

 

             

Total Municipal Bonds—168.1%

 

 

 

 

 

358,771,029

 

             

 

 

 

 

 

 

 

 

Tax-Exempt Corporate Bonds

 

 

 

 

 

 

 

               

San Manuel Entertainment Authority Series 04-C,
4.50%, 12/01/16 (f)

 

 

4,000

 

 

3,201,320

 

             

Total Corporate Bonds—1.5%

 

 

 

 

 

3,201,320

 

             

 

 

 

 

 

 

 

 

 

Municipal Bonds Transferred to Tender Option Bond Trusts (p)

 

 

 

 

 

 

 

             

Illinois—2.4%

 

 

 

 

 

 

 

Chicago, Illinois, Water Revenue Refunding Bonds, Second Lien, 5%, 11/01/20 (e)

 

 

5,000

 

 

5,216,800

 

             

Total Municipal Bonds Transferred to Tender Option Bond Trusts—2.4%

 

 

 

 

 

5,216,800

 

             

Total Long-Term Investments (Cost—$440,925,200)—172.0%

 

 

 

 

 

367,189,149

 

             

 

 

 

 

 

 

 

 


Short-Term Securities

 

Shares

 

 

 

 

             

Pennsylvania—0.0%

 

 

 

 

 

 

 

Philadelphia, Pennsylvania, Water and Wastewater Revenue
Refunding Bonds, VRDN, 4.50%, 1/06/09 (e)(n)(o)

 

 

90

 

 

90,000

 

             

Money Market Funds—8.5%

 

 

 

 

 

 

 

Merrill Lynch Institutional Tax-Exempt Fund, 1.18% (q)(r)

 

 

18,211,401

 

 

18,211,401

 

             

Total Short-Term Securities (Cost—$18,301,401)—8.5%

 

 

 

 

 

18,301,401

 

             

Total Investments (Cost—$459,226,601*)—180.5%

 

 

 

 

 

385,490,550

 

 

Other Assets Less Liabilities—2.6%

 

 

 

 

 

5,626,911

 

 

 

 

 

 

 

 

 

Liability for Trust Certificates, Including Interest Expense and Fees Payable—(1.7)%

 

 

 

 

 

(3,761,641

)

 

Preferred Shares, at Redemption Value—(81.4)%

 

 

 

 

 

(173,883,854

)

 

 

 

 

 

   

 

Net Assets Applicable to Common Shares—100.0%

 

 

 

 

$

213,471,966

 

 

 

 

 

 

   

 


 

 

*

The cost and unrealized appreciation (depreciation) of investments as of December 31, 2008, as computed for federal income tax purposes, were as follows:


 

 

 

 

 

 

 

 

Aggregate cost

 

 

 

 

$

454,842,905

 

 

 

 

 

 

   

 

Gross unrealized appreciation

 

 

 

 

$

7,084,871

 

Gross unrealized depreciation

 

 

 

 

 

(80,187,226

)

 

 

 

 

 

   

 

Net unrealized depreciation

 

 

 

 

$

(73,102,355

)

 

 

 

 

 

   

 


 

 

(a)

Represents a zero-coupon bond. Rate shown reflects the current yield as of report date.

 

(b)

US government securities, held in escrow, are used to pay interest on this security as well as to retire the bond in full at the date indicated, typically at a premium to par.

 

(c)

MBIA Insured.

 

(d)

ACA Insured.

 

(e)

FSA Insured.

 

(f)

Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration to qualified institutional investors.

 

(g)

AMBAC Insured.

 

(h)

Issuer filed for bankruptcy and/or is in default of interest payments.

 

(i)

Non-income producing security.

 

(j)

FNMA Collateralized.

 

(k)

FGIC Insured.

 

(l)

Security represents a beneficial interest in a trust. The collateral deposited into the trust is federally tax-exempt revenue bonds issued by various state or local governments, or their respective agencies or authorities. The security is subject to remarketing prior to its stated maturity, and is subject to mandatory redemption at maturity.

 

(m)

Security is perpetual in nature and has no stated maturity date.

 

(n)

Variable rate security. Rate shown is as of report date.

 

(o)

Security may have a maturity of more than one year at the time of issuance, but has variable rate and demand features that qualify it as a short-term security.

 

(p)

Securities represent bonds transferred to a tender option bond trust in exchange for which the Trust acquired residual interest certificates. These securities serve as collateral in a financing transaction. See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to tender option bond trusts.

 

(q)

Investments in companies considered to be an affiliate of the Trust, for purposes of Section 2(a)(3) of the Investment Company Act of 1940, were as follows:


 

 

 

 

 

 

 

 

           

Affiliate

 

Net
Activity

 

Income

 

           

Merrill Lynch Institutional Tax-Exempt Fund

 

 

18,211,401

 

$

45,182

 

           

 

 

 

(r)

Represents the current yield as of report date.

 

 

Effective January 1, 2008, the Trust adopted Financial Accounting Standards Board Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (“FAS 157”). FAS 157 clarifies the definition of fair value, establishes a framework for measuring fair values and requires additional disclosures about the use of fair value measurements. Various inputs are used in determining the fair value of investments, which are as follows:

 

 

 

Level 1—price quotations in active markets/exchanges for identical securities

 

 

 

Level 2—other observable inputs (including, but not limited to: quoted prices for similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks, and default rates) or other market-corroborated inputs)

 

 

 

Level 3—unobservable inputs based on the best information available in the circumstance, to the extent observable inputs are not available (including the Trust’s own assumption used in determining the fair value of investments)

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. For information about the Trust’s policy regarding valuation of investments and other significant accounting policies, please refer to Note 1 of the Notes to Financial Statements.

The following table summarizes the inputs used as of December 31, 2008 in determining the fair valuation of the Trust’s investments:

 

 

 

 

 

       

Valuation
  Inputs

 

Investments in
Securities

 

       

 

 

Assets

 

 

 

 

Level 1

 

$

18,211,401

 

Level 2

 

 

367,279,149

 

Level 3

 

 

 

       

Total

 

$

385,490,550

 

 

 

     

See Notes to Financial Statements.

 

 

 

 

 

 

 

 

20

ANNUAL REPORT

DECEMBER 31, 2008

 



 

 

 


 

Schedule of Investments December 31, 2008

 

BlackRock Strategic Municipal Trust (BSD)

 

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 

           

Alabama—13.0%

 

 

 

 

 

 

 

Alabama State Public School and College Authority, Capital Improvement Revenue Bonds, Series C, 5.75%, 7/01/18

 

$

7,000

 

$

7,208,390

 

Courtland, Alabama, IDB, Solid Waste Disposal Revenue Refunding Bonds (Champion International Corporation Project), AMT, Series A, 6.70%, 11/01/29

 

 

3,000

 

 

2,174,430

 

 

 

 

 

 

     

 

 

 

 

 

 

9,382,820

 

               

Arizona—3.8%

 

 

 

 

 

 

 

Salt Verde Financial Corporation, Arizona, Senior Gas Revenue Bonds:

 

 

 

 

 

 

 

5%, 12/01/32

 

 

1,455

 

 

934,430

 

5%, 12/01/37

 

 

1,890

 

 

1,180,343

 

San Luis, Arizona, Facilities Development Corporation, Senior Lien Revenue Bonds (Regional Detention Center Project):

 

 

 

 

 

 

 

6.25%, 5/01/15

 

 

210

 

 

175,657

 

7%, 5/01/20

 

 

210

 

 

167,446

 

7.25%, 5/01/27

 

 

420

 

 

321,434

 

 

 

 

 

 

     

 

 

 

 

 

 

2,779,310

 

               

California—14.5%

 

 

 

 

 

 

 

California County Tobacco Securitization Agency, Tobacco Revenue Bonds (Stanislaus County Tobacco Funding Corporation), Sub-Series C, 6.30%, 6/01/55 (a)

 

 

3,095

 

 

15,104

 

California State, GO, 5%, 3/01/33 (b)

 

 

5,000

 

 

4,348,750

 

University of California Revenue Bonds, Series B, 4.75%, 5/15/38

 

 

1,835

 

 

1,573,824

 

West Valley Mission Community College District, California, GO (Election of 2004), Series A, 4.75%, 8/01/30 (c)

 

 

5,000

 

 

4,547,000

 

 

 

 

 

 

     

 

 

 

 

 

 

10,484,678

 

               

Colorado—6.8%

 

 

 

 

 

 

 

Colorado Health Facilities Authority, Revenue Refunding Bonds (Poudre Valley Health Care) (c):

 

 

 

 

 

 

 

5.20%, 3/01/31

 

 

240

 

 

201,382

 

Series B, 5.25%, 3/01/36

 

 

485

 

 

398,030

 

Series C, 5.25%, 3/01/40

 

 

850

 

 

687,216

 

Colorado Springs, Colorado, Utilities System Improvement Revenue Bonds, Subordinate Lien, Series C, 5%, 11/15/45 (c)

 

 

445

 

 

424,134

 

Northwest Parkway Public Highway Authority, Colorado, Senior Revenue Bonds, CABS, Series B, 6.299%, 6/15/11 (a)(c)(d)

 

 

10,000

 

 

2,938,100

 

Park Creek Metropolitan District, Colorado, Senior Limited Tax Supported Revenue Refunding Bonds, 5.50%, 12/01/37

 

 

440

 

 

287,993

 

 

 

 

 

 

     

 

 

 

 

 

 

4,936,855

 

               

Connecticut—6.7%

 

 

 

 

 

 

 

Mashantucket Western Pequot Tribe, Connecticut, Special Revenue Refunding Bonds:

 

 

 

 

 

 

 

Sub-Series A, 5.50%, 9/01/28

 

 

1,500

 

 

931,890

 

Sub-Series B, 5.75%, 9/01/27 (e)

 

 

6,000

 

 

3,912,900

 

 

 

 

 

 

     

 

 

 

 

 

 

4,844,790

 

               

Florida—11.3%

 

 

 

 

 

 

 

Arborwood Community Development District, Florida, Capital Improvement Special Assessment Bonds (Master Infrastructure Projects), Series B, 5.10%, 5/01/14

 

 

1,560

 

 

1,241,370

 

Halifax Hospital Medical Center, Florida, Hospital Revenue Refunding Bonds, Series A, 5%, 6/01/38

 

 

1,050

 

 

543,858

 

Hillsborough County, Florida, IDA, Exempt Facilities Revenue Bonds (National Gypsum Company), AMT, Series A, 7.125%, 4/01/30

 

 

3,300

 

 

1,748,670

 

Jacksonville, Florida, Health Facilities Authority, Hospital Revenue Bonds (Baptist Medical Center Project), Series A, 5%, 8/15/37

 

 

715

 

 

483,404

 


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 

               

Florida—(concluded)

 

 

 

 

 

 

 

Miami Beach, Florida, Health Facilities Authority, Hospital Revenue Refunding Bonds (Mount Sinai Medical Center of Florida), 6.75%, 11/15/21

 

$

1,580

 

$

1,232,495

 

Orange County, Florida, Tourist Development, Tax Revenue Refunding Bonds, 4.75%, 10/01/32 (f)

 

 

2,640

 

 

1,956,742

 

Sumter Landing Community Development District, Florida, Recreational Revenue Bonds, Sub-Series B, 5.70%, 10/01/38

 

 

1,585

 

 

938,653

 

 

 

 

 

 

     

 

 

 

 

 

 

8,145,192

 

               

Illinois—8.5%

 

 

 

 

 

 

 

Centerpoint Intermodal Center Program Trust, Illinois, Tax Allocation Bonds, Class A, 8%, 6/15/23 (e)

 

 

850

 

 

639,820

 

Illinois Educational Facilities Authority Revenue Bonds (Northwestern University), 5%, 12/01/33

 

 

5,000

 

 

4,957,550

 

Illinois State Finance Authority Revenue Bonds:

 

 

 

 

 

 

 

(Friendship Village of Schaumburg), Series A, 5.625%, 2/15/37

 

 

295

 

 

157,238

 

(Monarch Landing, Inc. Project), Series A, 7%, 12/01/37

 

 

575

 

 

360,381

 

Illinois State Finance Authority, Student Housing Revenue Bonds (MJH Education Assistance IV LLC), Sub-Series B, 5.375%, 6/01/35 (g)(h)

 

 

300

 

 

29,601

 

 

 

 

 

 

     

 

 

 

 

 

 

6,144,590

 

               

Kentucky—8.3%

 

 

 

 

 

 

 

Kentucky Economic Development Finance Authority, Health System Revenue Refunding Bonds (Norton Healthcare, Inc.), Series B, 6.199%, 10/01/24 (a)(i)

 

 

17,780

 

 

5,988,660

 

               

Louisiana—1.6%

 

 

 

 

 

 

 

Saint Tammany Parish, Louisiana, Financing Authority, S/F Mortgage Revenue Bonds (Home Ownership Program), Series A, 5.25%, 12/01/39 (j)(k)(l)

 

 

1,267

 

 

1,151,972

 

               

Maryland—2.4%

 

 

 

 

 

 

 

Maryland State Community Development Administration, Department of Housing and Community Development, Residential Revenue Refunding Bonds, AMT, Series A, 4.70%, 9/01/37

 

 

2,500

 

 

1,768,600

 

               

Michigan—3.5%

 

 

 

 

 

 

 

Michigan State Hospital Finance Authority, Revenue Refunding Bonds:

 

 

 

 

 

 

 

(Henry Ford Health System), Series A, 5.25%, 11/15/46

 

 

730

 

 

475,099

 

(Mercy Health Services), Series X, 5.75%, 8/15/09 (d)(i)

 

 

2,000

 

 

2,079,100

 

 

 

 

 

 

     

 

 

 

 

 

 

2,554,199

 

               

Missouri—7.7%

 

 

 

 

 

 

 

Missouri Joint Municipal Electric Utility Commission, Power Project Revenue Bonds (Plum Point Project), 4.60%, 1/01/36 (i)

 

 

2,385

 

 

1,479,535

 

Missouri State Health and Educational Facilities Authority, Health Facilities Revenue Refunding Bonds (Saint Anthony’s Medical Center), 6.125%, 12/01/10 (d)

 

 

2,000

 

 

2,198,760

 

Missouri State Housing Development Commission, S/F Mortgage Revenue Refunding Bonds (Homeownership Loan Program), AMT, Series B-1, 5.05%, 3/01/38 (j)(k)(l)

 

 

2,120

 

 

1,853,156

 

 

 

 

 

 

     

 

 

 

 

 

 

5,531,451

 

               

Nebraska—1.4%

 

 

 

 

 

 

 

Omaha Public Power District, Nebraska, Electric System Revenue Bonds, Series A, 4.75%, 2/01/44

 

 

1,205

 

 

1,023,744

 

               

Nevada—1.1%

 

 

 

 

 

 

 

Clark County, Nevada, EDR, Refunding (Alexander Dawson School of Nevada Project), 5%, 5/15/29

 

 

905

 

 

762,725

 

               

New Jersey—3.0%

 

 

 

 

 

 

 

Middlesex County, New Jersey, Improvement Authority, Subordinate Revenue Bonds (Heldrich Center Hotel/ Conference Project), Series B, 6.25%, 1/01/37

 

 

645

 

 

353,873

 

New Jersey EDA, Cigarette Tax Revenue Bonds, 5.50%, 6/15/24

 

 

2,480

 

 

1,824,114

 

 

 

 

 

 

     

 

 

 

 

 

 

2,177,987

 

               

 

 

 

 

See Notes to Financial Statements.

 

 

 

 

 

 

 

 

 

ANNUAL REPORT

DECEMBER 31, 2008

21



 

 

 


 

Schedule of Investments (continued)

 

BlackRock Strategic Municipal Trust (BSD)

 

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 

               

New York—4.0%

 

 

 

 

 

 

 

Albany, New York, IDA, Civic Facility Revenue Bonds (New Covenant Charter School Project), Series A, 7%, 5/01/35

 

$

315

 

$

194,594

 

New York City, New York, City IDA, Special Facility Revenue Bonds (Continental Airlines Inc. Project), AMT, 7.75%, 8/01/31

 

 

4,395

 

 

2,660,162

 

 

 

 

 

 

     

 

 

 

 

 

 

2,854,756

 

               

Ohio—5.2%

 

 

 

 

 

 

 

Buckeye Tobacco Settlement Financing Authority, Ohio, Tobacco Settlement Asset-Backed Bonds, Series A-2, 6.50%, 6/01/47

 

 

1,880

 

 

1,123,262

 

Ohio State Air Quality Development Authority, Revenue Refunding Bonds (Dayton Power and Light Company Project), Series B, 4.80%, 1/01/34 (m)(n)

 

 

2,765

 

 

2,611,238

 

 

 

 

 

 

     

 

 

 

 

 

 

3,734,500

 

               

Oklahoma—1.3%

 

 

 

 

 

 

 

Tulsa, Oklahoma, Municipal Airport Trust, Revenue Refunding Bonds, Series A, 7.75%, 6/01/35

 

 

1,225

 

 

927,717

 

               

Pennsylvania—8.9%

 

 

 

 

 

 

 

Allegheny County, Pennsylvania, Hospital Development Authority, Revenue Refunding Bonds (West Penn Allegheny Health System), Series A, 5%, 11/15/13

 

 

1,750

 

 

1,366,767

 

Pennsylvania Economic Development Financing Authority, Exempt Facilities Revenue Bonds, AMT, Series A:

 

 

 

 

 

 

 

(Amtrak Project), 6.50%, 11/01/16

 

 

1,000

 

 

939,740

 

(Amtrak Project), 6.125%, 11/01/21

 

 

700

 

 

577,220

 

(Amtrak Project), 6.25%, 11/01/31

 

 

1,000

 

 

717,390

 

(Reliant Energy), 6.75%, 12/01/36

 

 

2,745

 

 

1,756,800

 

Pennsylvania Economic Development Financing Authority, Resource Recovery Revenue Refunding Bonds (Colver Project), AMT, Series G, 5.125%, 12/01/15

 

 

900

 

 

649,404

 

Pennsylvania HFA, S/F Mortgage Revenue Refunding Bonds, AMT, Series 97A, 4.60%, 10/01/27

 

 

420

 

 

317,428

 

Washington County, Pennsylvania, Capital Funding Authority Revenue Bonds (Capital Projects and Equipment Program), 6.15%, 12/01/29 (o)

 

 

105

 

 

83,190

 

 

 

 

 

 

     

 

 

 

 

 

 

6,407,939

 

               

South Carolina—4.1%

 

 

 

 

 

 

 

South Carolina Jobs EDA, Hospital Facilities Revenue Refunding Bonds (Palmetto Health Alliance), Series C, 7%, 8/01/13 (d)

 

 

2,500

 

 

2,960,955

 

               

South Dakota—1.0%

 

 

 

 

 

 

 

South Dakota State Health and Educational Facilities Authority Revenue Bonds (Sanford Health), 5%, 11/01/40

 

 

910

 

 

736,609

 

               

Tennessee—2.5%

 

 

 

 

 

 

 

Memphis-Shelby County, Tennessee, Airport Authority, Airport Revenue Bonds, AMT, Series D, 6%, 3/01/24 (o)

 

 

2,000

 

 

1,788,920

 

               

Texas—14.5%

 

 

 

 

 

 

 

Brazos River Authority, Texas, PCR, Refunding (TXU Energy Company LLC Project), AMT, Series A, 8.25%, 10/01/30

 

 

730

 

 

495,028

 

Harris County-Houston Sports Authority, Texas, Revenue Refunding Bonds, Senior Lien, Series A, 6.17%, 11/15/38 (a)(i)

 

 

4,750

 

 

435,480

 

La Joya, Texas, Independent School District, GO, 5%, 2/15/34

 

 

4,060

 

 

3,968,894

 

Montgomery County, Texas, Municipal Utility District Number 46, Waterworks and Sewer System, GO, 4.75%, 3/01/30 (i)

 

 

295

 

 

253,316

 

North Texas Tollway Authority, System Revenue Refunding Bonds, Second Tier, Series F, 6.125%, 1/01/31

 

 

2,025

 

 

1,802,736

 

Texas State Turnpike Authority, Central Texas Turnpike System Revenue Bonds, 6.052%, 8/15/31 (a)(o)

 

 

15,000

 

 

2,988,600

 

Texas State, Water Financial Assistance, GO, Refunding, 5.75%, 8/01/22

 

 

500

 

 

513,200

 

 

 

 

 

 

     

 

 

 

 

 

 

10,457,254

 

               

 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 

               

Washington—1.8%

 

 

 

 

 

 

 

King County, Washington, Sewer Revenue Refunding Bonds, 5%, 1/01/36 (c)

 

$

620

 

$

578,311

 

Washington State Health Care Facilities Authority, Revenue Refunding Bonds (Providence Health System), Series A, 4.625%, 10/01/34 (i)(n)

 

 

915

 

 

697,157

 

 

 

 

 

 

     

 

 

 

 

 

 

1,275,468

 

               

Wisconsin—6.9%

 

 

 

 

 

 

 

Wisconsin State Health and Educational Facilities Authority Revenue Bonds (Ascension Health), Series A, 5%, 11/15/31

 

 

4,665

 

 

3,995,339

 

Wisconsin State Health and Educational Facilities Authority, Revenue Refunding Bonds (Franciscan Sisters Healthcare), 5%, 9/01/26

 

 

1,375

 

 

976,002

 

 

 

 

 

 

     

 

 

 

 

 

 

4,971,341

 

               

Multi-State—7.4%

 

 

 

 

 

 

 

Charter Mac Equity Issuer Trust, 7.60%, 11/30/50 (e)(p)

 

 

2,000

 

 

2,113,960

 

MuniMae TE Bond Subsidiary LLC, 6.875%, 6/30/49 (e)(p)

 

 

4,000

 

 

3,266,080

 

 

 

 

 

 

     

 

 

 

 

 

 

5,380,040

 

               

Total Municipal Bonds—151.2%

 

 

 

 

 

109,173,072

 

               

 

 

 

 

 

 

 

 









 

 

 

 

 

 

 

 

Municipal Bonds Transferred to Tender Option Bond Trusts (q)

 

 

 

 

 

 

 

               

Alabama—0.9%

 

 

 

 

 

 

 

Birmingham, Alabama, Special Care Facilities Financing Authority, Revenue Refunding Bonds (Ascension Health Credit), Series C-2, 5%, 11/15/36

 

 

760

 

 

628,927

 

               

Colorado—2.3%

 

 

 

 

 

 

 

Colorado Health Facilities Authority Revenue Bonds (Catholic Health) (c):

 

 

 

 

 

 

 

Series C-3, 5.10%, 10/01/41

 

 

1,210

 

 

1,002,437

 

Series C-7, 5%, 9/01/36

 

 

780

 

 

649,685

 

 

 

 

 

 

     

 

 

 

 

 

 

1,652,122

 

               

Connecticut—4.2%

 

 

 

 

 

 

 

Connecticut State Health and Educational Facilities Authority Revenue Bonds (Yale University):

 

 

 

 

 

 

 

Series T-1, 4.70%, 7/01/29

 

 

1,580

 

 

1,528,302

 

Series X-3, 4.85%, 7/01/37

 

 

1,540

 

 

1,492,830

 

 

 

 

 

 

     

 

 

 

 

 

 

3,021,132

 

               

Illinois—1.9%

 

 

 

 

 

 

 

Chicago, Illinois, Housing Authority, Capital Program Revenue Refunding Bonds, 5%, 7/01/24 (c)

 

 

1,424

 

 

1,379,644

 

               

Massachusetts—2.5%

 

 

 

 

 

 

 

Massachusetts State Water Resource Authority, General Revenue Refunding Bonds, Series A, 5%, 8/01/41

 

 

1,980

 

 

1,822,234

 

               

Tennessee—1.6%

 

 

 

 

 

 

 

Shelby County, Tennessee, Health, Educational and Housing Facility Board, Hospital Revenue Refunding Bonds (Saint Jude Children’s Research Hospital), 5%, 7/01/31

 

 

1,280

 

 

1,136,064

 

               

Virginia—3.9%

 

 

 

 

 

 

 

University of Virginia, Revenue Refunding Bonds, 5%, 6/01/40

 

 

1,800

 

 

1,783,026

 

Virginia State, HDA, Commonwealth Mortgage Revenue Bonds, Series H, Sub-Series H-1, 5.35%, 7/01/31 (i)

 

 

1,125

 

 

1,041,885

 

 

 

 

 

 

     

 

 

 

 

 

 

2,824,911

 

               

Washington—1.2%

 

 

 

 

 

 

 

Central Puget Sound Regional Transportation Authority, Washington, Sales and Use Tax Revenue Bonds, Series A, 5%, 11/01/32 (c)

 

 

900

 

 

850,661

 

               

Total Municipal Bonds Transferred to Tender Option Bond Trusts—18.5%

 

 

 

 

 

13,315,695

 

               

Total Long-Term Investments (Cost—$148,071,798)—169.7%

 

 

 

 

 

122,488,767

 

               

 

 

 

 

See Notes to Financial Statements.

 

 

 

 

 

 

 

 

22

ANNUAL REPORT

DECEMBER 31, 2008

 



 

 

 


 

Schedule of Investments (concluded)

 

BlackRock Strategic Municipal Trust (BSD)

 

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

 

 

Short-Term Securities

 

Shares

 

Value

 

 

           

 

Merrill Lynch Institutional Tax-Exempt Fund, 1.18% (r)(s)

 

 

3,303,091

 

$

3,303,091

 

 

               

 

Total Short-Term Securities (Cost—$3,303,091)—4.6%

 

 

 

 

 

3,303,091

 

 

               

 

Total Investments (Cost—$151,374,889*)—174.3%

 

 

 

 

 

125,791,858

 

 

Other Assets Less Liabilities—2.8%

 

 

 

 

 

2,014,081

 

 

Liability for Trust Certificates, Including Interest Expense and Fees Payable—(10.9)%

 

 

 

 

 

(7,852,302

)

 

Preferred Shares, at Redemption Value—(66.2)%

 

 

 

 

 

(47,766,035

)

 

 

 

 

 

 

     

 

Net Assets Applicable to Common Shares—100.0%

 

 

 

 

$

72,187,602

 

 

 

 

 

 

 

     

 

 

 

 

*

The cost and unrealized appreciation (depreciation) of investments as of December 31, 2008, as computed for federal income tax purposes, were as follows:

 

 

 

 

 

 

 

Aggregate cost

 

$

143,192,209

 

 

 

 

   

 

 

Gross unrealized appreciation

 

$

1,602,845

 

 

Gross unrealized depreciation

 

 

(26,767,154

)

 

 

 

   

 

 

Net unrealized depreciation

 

$

(25,164,309

)

 

 

 

   

 

 

 

(a)

Represents a zero-coupon bond. Rate shown reflects the current yield as of report date.

 

(b)

CIFG Insured.

 

(c)

FSA Insured.

 

(d)

US government securities, held in escrow, are used to pay interest on this security, as well as to retire the bond in full at the date indicated, typically at a premium to par.

 

(e)

Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration to qualified institutional investors.

 

(f)

XL Capital Insured.

 

(g)

Issuer filed for bankruptcy and/or is in default of interest payments.

 

(h)

Non-income producing security

 

(i)

MBIA Insured.

 

(j)

FHLMC Collateralized.

 

(k)

FNMA Collateralized.

 

(l)

GNMA Collateralized.

 

(m)

BHAC Insured.

 

(n)

FGIC Insured.

 

(o)

AMBAC Insured.

 

(p)

Security represents a beneficial interest in a trust. The collateral deposited into the trust is federally tax-exempt revenue bonds issued by various state or local governments, or their respective agencies or authorities. The security is subject to mandatory redemption at maturity.

 

(q)

Securities represent bonds transferred to a tender option bond trust in exchange for which the Trust acquired residual interest certificates. These securities serve as collateral in a financing transaction. See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to tender option bond trusts.

 

(r)

Investments in companies considered to be an affiliate of the Trust, for purposes of Section 2(a)(3) of the Investment Company Act of 1940, were as follows:

 

 

 

 

 

 

 

 

 

 

           

 

Affiliate

 

Net
Activity

 

Income

 

 

           

 

Merrill Lynch Institutional Tax-Exempt Fund

 

 

3,303,091

 

$

68,966

 

 

               

 

 

(s)

Represents the current yield as of report date.

 

 

 

 

Effective January 1, 2008, the Trust adopted Financial Accounting Standards Board Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (“FAS 157”). FAS 157 clarifies the definition of fair value, establishes a framework for measuring fair values and requires additional disclosures about the use of fair value measurements. Various inputs are used in determining the fair value of investments, which are as follows:

 

 

 

 

Level 1—price quotations in active markets/exchanges for identical securities

 

 

 

 

Level 2—other observable inputs (including, but not limited to: quoted prices for similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks, and default rates) or other market- corroborated inputs)

 

 

 

 

Level 3—unobservable inputs based on the best information available in the circumstance, to the extent observable inputs are not available (including the Trust’s own assumption used in determining the fair value of investments)

 

 

 

 

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. For information about the Trust’s policy regarding valuation of investments and other significant accounting policies, please refer to Note 1 of the Notes to Financial Statements.

 

 

 

The following table summarizes the inputs used as of December 31, 2008 in determining the fair valuation of the Trust’s investments:


 

 

 

 

 

 

 

         

 

Valuation
  Inputs

 

Investments in
Securities

 

 

         

 

 

 

Assets

 

 

 

 

   

 

Level 1

 

$

3,303,091

 

 

Level 2

 

 

122,488,767

 

 

Level 3

 

 

 

 

         

 

Total

 

$

125,791,858

 

 

 

 

     

 

 

 

 

See Notes to Financial Statements.

 

 

 

 

 

 

 

 

 

ANNUAL REPORT

DECEMBER 31, 2008

23



 

 

 


Schedule of Investments December 31, 2008

 

BlackRock California Municipal 2018 Term Trust (BJZ)

 

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 

               

California—131.1%

 

 

 

 

 

 

 

               

City/County/State/—28.4%

 

 

 

 

 

 

 

California State, GO, Refunding:

 

 

 

 

 

 

 

5%, 11/01/11 (a)

 

$

4,740

 

$

5,212,720

 

5%, 11/01/20

 

 

260

 

 

257,465

 

California State, Veterans, GO, Refunding, AMT, Series BZ, 5.35%, 12/01/21 (b)

 

 

6,500

 

 

5,846,165

 

Fontana, California, Public Financing Authority, Tax Allocation Revenue Refunding Bonds (North Fontana Redevelopment Project), Series A, 5.25%, 9/01/18 (c)

 

 

3,395

 

 

3,584,713

 

Riverside, California, Unified School District, GO (Election of 2001), Series A, 5.25%, 2/01/23 (b)(d)

 

 

5,000

 

 

5,062,000

 

Vista, California, COP, Refunding (Community Projects) (b):

 

 

 

 

 

 

 

5%, 5/01/19

 

 

1,000

 

 

915,360

 

4.75%, 5/01/21

 

 

1,115

 

 

931,616

 

 

 

 

 

 

     

 

 

 

 

 

 

21,810,039

 

               

Education—11.7%

 

 

 

 

 

 

 

California State Public Works Board, Lease Revenue Refunding Bonds, Series A:

 

 

 

 

 

 

 

(California Community Colleges), 5%, 12/01/17

 

 

2,020

 

 

2,022,727

 

(Trustees California State University), 5%, 10/01/17

 

 

2,415

 

 

2,419,347

 

Clovis, California, Unified School District, Capital Appreciation, GO (Election of 2004), Series A, 5.124%, 8/01/21 (b)(d)(e)(f)

 

 

7,500

 

 

4,505,025

 

 

 

 

 

 

     

 

 

 

 

 

 

8,947,099

 

               

Health Care & Hospitals—22.2%

 

 

 

 

 

 

 

ABAG Finance Authority for Nonprofit Corporations, California, Revenue Bonds (San Diego Hospital Association), Series C, 5.375%, 3/01/21

 

 

2,100

 

 

1,653,876

 

California Health Facilities Financing Authority Revenue Bonds (Adventist Health System), Series A:

 

 

 

 

 

 

 

5%, 3/01/18

 

 

1,075

 

 

997,804

 

5%, 3/01/19

 

 

1,000

 

 

910,410

 

5%, 3/01/20

 

 

2,060

 

 

1,809,689

 

5%, 3/01/24

 

 

1,355

 

 

1,100,802

 

California Infrastructure and Economic Development Bank Revenue Bonds:

 

 

 

 

 

 

 

(J. David Gladstone Institute Project), 5.50%, 10/01/20

 

 

1,985

 

 

1,972,951

 

(Kaiser Hospital Assistance I-LLC), Series A, 5.55%, 8/01/31

 

 

6,500

 

 

5,317,715

 

California Statewide Communities Development Authority, Revenue Refunding Bonds (Daughters of Charity National Health System), Series A, 5.25%, 7/01/24

 

 

5,000

 

 

3,261,050

 

 

 

 

 

 

     

 

 

 

 

 

 

17,024,297

 

               

Industrial & Pollution Control—13.0%

 

 

 

 

 

 

 

California Pollution Control Financing Authority, PCR, Refunding (San Diego Gas & Electric Company), Series A, 5.90%, 6/01/14

 

 

3,100

 

 

3,112,927

 

California Pollution Control Financing Authority, Solid Waste Disposal Revenue Bonds, AMT:

 

 

 

 

 

 

 

(Republic Services, Inc. Project), Series B, 5.25%, 6/01/23

 

 

2,500

 

 

1,839,675

 

(Waste Management Inc. Project), Series A, 5.125%, 7/01/31

 

 

4,000

 

 

3,230,280

 

California Pollution Control Financing Authority, Solid Waste Disposal Revenue Refunding Bonds (Republic Services, Inc. Project), AMT, Series C, 5.25%, 6/01/23

 

 

2,500

 

 

1,839,675

 

 

 

 

 

 

     

 

 

 

 

 

 

10,022,557

 

               

 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 

               

California—(concluded)

 

 

 

 

 

 

 

               

Lease Revenue—3.9%

 

 

 

 

 

 

 

San Diego County, California, COP, Refunding (MTS Tower), 5.25%, 11/01/19 (g)

 

$

2,980

 

$

2,989,953

 

               

Tax Revenue—1.9%

 

 

 

 

 

 

 

Poway, California, Unified School District, Special Tax Bonds (Community Facilities District Number 6), 5%, 9/01/25

 

 

750

 

 

508,590

 

San Bernardino County, California, Special Tax Bonds (Community Facilities District Number 2002-1):

 

 

 

 

 

 

 

5.35%, 9/01/17

 

 

105

 

 

87,069

 

5.50%, 9/01/18

 

 

245

 

 

201,395

 

5.60%, 9/01/19

 

 

500

 

 

404,625

 

5.70%, 9/01/20

 

 

355

 

 

281,977

 

 

 

 

 

 

     

 

 

 

 

 

 

1,483,656

 

               

Transportation—29.9%

 

 

 

 

 

 

 

Foothill/Eastern Corridor Agency, California, Toll Road Revenue Refunding Bonds, CABS, 5.881%, 1/15/21 (e)

 

 

20,000

 

 

6,914,400

 

Long Beach, California, Harbor Revenue Bonds, AMT, Series A, 5.25%, 5/15/18 (b)(d)

 

 

5,000

 

 

4,838,000

 

Los Angeles, California, Harbor Department Revenue Refunding Bonds, AMT, Series B, 5.50%, 8/01/21 (g)

 

 

10,025

 

 

8,869,619

 

Santa Clara Valley, California, Transportation Authority, Sales Tax Revenue Bonds, Series A, 5%, 6/01/11 9 (a)(b)

 

 

2,135

 

 

2,320,873

 

 

 

 

 

 

     

 

 

 

 

 

 

22,942,892

 

               

Water & Sewer—20.1%

 

 

 

 

 

 

 

California State Department of Water Resources, Power Supply Revenue Bonds:

 

 

 

 

 

 

 

Series A, 5.125%, 5/01/12 (a)

 

 

6,500

 

 

7,302,360

 

Series H, 5%, 5/01/22

 

 

3,500

 

 

3,526,775

 

Lathrop, California, Financing Authority Revenue Bonds (Water Supply Project):

 

 

 

 

 

 

 

5.80%, 6/01/21

 

 

995

 

 

759,712

 

5.85%, 6/01/22

 

 

1,040

 

 

779,719

 

5.90%, 6/01/23

 

 

1,000

 

 

741,220

 

Stockton-East Water District, California, COP, Refunding, Series B, 5.928%, 4/01/19 (b)(d)(e)

 

 

4,590

 

 

2,366,879

 

 

 

 

 

 

     

 

 

 

 

 

 

15,476,665

 

               

Total Municipal Bonds in California

 

 

 

 

 

100,697,158

 

               

Puerto Rico—18.3%

 

 

 

 

 

 

 

               

City/County/State/—1.2%

 

 

 

 

 

 

 

Puerto Rico Commonwealth, Public Improvement, GO, Series B, 5.25%, 7/01/17

 

 

1,035

 

 

918,604

 

               

Housing—1.2%

 

 

 

 

 

 

 

Puerto Rico Public Buildings Authority, Government Facilities Revenue Refunding Bonds Series M, 6.25%, 7/01/21(h)

 

 

1,000

 

 

933,470

 

               

Lease Revenue—15.9%

 

 

 

 

 

 

 

Puerto Rico Public Buildings Authority, Government Facilities Revenue Refunding Bonds (h):

 

 

 

 

 

 

 

Series C, 5.75%, 7/01/19

 

 

4,405

 

 

3,945,955

 

Series C, 5.75%, 7/01/19 (f)

 

 

5

 

 

5,902

 

Series M, 6%, 7/01/20

 

 

1,000

 

 

922,640

 

Puerto Rico Public Finance Corporation, Commonwealth Appropriation Revenue Bonds, Series E, 5.70%, 2/01/10 (a)

 

 

7,000

 

 

7,314,930

 

 

 

 

 

 

     

 

 

 

 

 

 

12,189,427

 

               

Total Municipal Bonds in Puerto Rico

 

 

 

 

 

14,041,501

 

               

 

 

 

 

See Notes to Financial Statements.

 

 

 

 

 

24

ANNUAL REPORT

DECEMBER 31, 2008

 



 

 

 


 

Schedule of Investments (concluded)

 

BlackRock California Municipal 2018 Term Trust (BJZ)

 

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 

               

U.S. Virgin Islands—2.9%

 

 

 

 

 

 

 

               

Water & Sewer—2.9%

 

 

 

 

 

 

 

Virgin Islands Public Finance Authority, Senior Lien Revenue Bonds (Matching Fund Loan Note), Series A:

 

 

 

 

 

 

 

5.25%, 10/01/17

 

$

360

 

$

315,817

 

5.25%, 10/01/19

 

 

455

 

 

377,646

 

5.25%, 10/01/21

 

 

460

 

 

362,158

 

5.25%, 10/01/22

 

 

315

 

 

243,063

 

5.25%, 10/01/23

 

 

960

 

 

728,170

 

5.25%, 10/01/24

 

 

300

 

 

223,548

 

               

Total Municipal Bonds in the U.S. Virgin Islands

 

 

 

 

 

2,250,402

 

               

Multi-State—10.6%

 

 

 

 

 

 

 

               

Housing—10.6%

 

 

 

 

 

 

 

Charter Mac Equity Issuer Trust, 6.625%, 6/30/49 (i)(j)

 

 

4,000

 

 

4,049,280

 

MuniMae TE Bond Subsidiary LLC, 6.875%, 6/30/49 (i)(j)

 

 

5,000

 

 

4,082,600

 

               

Total Municipal Bonds in Multi-State

 

 

 

 

 

8,131,880

 

               

Total Municipal Bonds—162.9%

 

 

 

 

 

125,120,941

 

               

 

 

 

 

 

 

 

 

Corporate Bonds

 

 

 

 

 

 

 

               

City/County/State—4.2%

 

 

 

 

 

 

 

               

San Manuel Entertainment Authority Series 04-C,
4.50%, 12/01/16 (i)

 

 

4,000

 

 

3,201,320

 

               

Total Corporate Bonds—4.2%

 

 

 

 

 

3,201,320

 

               

Total Long-Term Investments (Cost—143,553,727)—167.1%

 

 

 

 

 

128,322,261

 

               

 

 

 

 

 

 

 

 

Short-Term Securities

 

       Shares

 

 

 

 

               

CMA California Municipal Money Fund, 0.69% (k)(l)

 

 

2,233,945

 

 

2,233,945

 

               

Total Short-Term Securities (Cost—$2,233,945)—2.9%

 

 

 

 

 

2,233,945

 

               

Total Investments (Cost—$145,787,672*)—170.0%

 

 

 

 

 

130,556,206

 

Other Assets Less Liabilities—2.3%

 

 

 

 

 

1,771,877

 

Preferred Shares, at Redemption Value—(72.3)%

 

 

 

 

 

(55,532,854

)

 

 

 

 

 

     

Net Assets Applicable to Common Shares—100.0%

 

 

 

 

$

76,795,229

 

 

 

 

 

 

     

 

 

 

 

 

 

*

The cost and unrealized appreciation (depreciation) of investments as of December 31, 2008, as computed for federal income tax purposes, were as follows:

 

 

 

 

 

 

 

Aggregate cost

 

$

145,842,807

 

 

 

 

     

 

Gross unrealized appreciation

 

$

2,528,008

 

 

Gross unrealized depreciation

 

 

(17,814,609

)

 

 

 

     

 

Net unrealized depreciation

 

$

(15,286,601

)

 

 

 

     

 

 

(a)

US government securities, held in escrow, are used to pay interest on this security as well as to retire the bond in full at the date indicated, typically at a premium to par.

 

 

(b)

MBIA Insured.

 

 

(c)

FSA Insured.

 

 

(d)

FGIC Insured.

 

 

(e)

Represents a zero-coupon bond. Rate shown reflects the current yield as of report date.

 

 

(f)

Security is collateralized by Municipal or US Treasury Obligations.

 

 

(g)

AMBAC Insured.

 

 

(h)

Commonwealth Guaranteed.

 

 

(i)

Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration to qualified institutional investors.

 

 

(j)

Security represents a beneficial interest in a trust. The collateral deposited into the trust is federally tax-exempt revenue bonds issued by various state or local governments, or their respective agencies or authorities. The security is subject to remarketing prior to its stated maturity, and is subject to mandatory redemption at maturity.

 

 

(k)

Represents the current yield as of report date.

 

 

(l)

Investments in companies considered to be an affiliate of the Trust, for purposes of Section 2(a)(3) of the Investment Company Act of 1940, were as follows:


 

 

 

 

 

 

 

 

               

Affiliate

 

Net
Activity

 

Income

 

           

CMA California Municipal Money Fund

 

(2,076,348)

 

$

35,215

 

           

 

 

 

For Trust compliance purposes, the Trust’s industry classifications refer to any one or more of the industry sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by Trust management. This definition may not apply for purposes of this report which may combine industry sub-classifications for reporting ease. These industry classifications are unaudited.

 

 

Effective January 1, 2008, the Trust adopted Financial Accounting Standards Board Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (“FAS 157”). FAS 157 clarifies the definition of fair value, establishes a framework for measuring fair values and requires additional disclosures about the use of fair value measurements. Various inputs are used in determining the fair value of investments, which are as follows:

 

 

 

Level 1 - price quotations in active markets/exchanges for identical securities

 

 

 

 

Level 2 - other observable inputs (including, but not limited to: quoted prices for similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks, and default rates) or other market-corroborated inputs)

 

 

 

 

Level 3 - unobservable inputs based on the best information available in the circumstance, to the extent observable inputs are not available (including the Trust’s own assumption used in determining the fair value of investments)

 

 

 

 

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. For information about the Trust’s policy regarding valuation of investments and other significant accounting policies, please refer to Note 1 of the Notes to Financial Statements.

 

The following table summarizes the inputs used as of December 31, 2008 in determining the fair valuation of the Trust’s investments:


 

 

 

 

 

         

Valuation
  Inputs

 

Investments in
Securities

 

         

 

 

Assets

 

 

 

     

Level 1

 

$

2,233,945

 

Level 2

 

 

128,322,261

 

Level 3

 

 

 

         

Total

 

$

130,556,206

 

 

 

     

 

 

 

 

See Notes to Financial Statements.

 

 

 

 

 

 

ANNUAL REPORT

DECEMBER 31, 2008

25




 

 


Schedule of Investments December 31, 2008

BlackRock New York Municipal 2018 Term Trust (BLH)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

 

Value

 

               

New York—135.5%

 

 

 

 

 

 

 

               

City/County/State—22.5%

 

 

 

 

 

 

 

New York City, New York, GO:

 

 

 

 

 

 

 

Series B, 5.375%, 12/01/11 (a)

 

$

3,475

 

$

3,859,613

 

Series B, 5.375%, 12/01/20

 

 

525

 

 

530,413

 

Series M, 5%, 4/01/23

 

 

1,430

 

 

1,382,209

 

New York City, New York, GO, Refunding, Series G:

 

 

 

 

 

 

 

5.75%, 8/01/12 (a)

 

 

1,890

 

 

2,150,234

 

5.75%, 8/01/18

 

 

3,110

 

 

3,343,406

 

 

 

 

 

 

     

 

 

 

 

 

 

11,265,875

 

               

Education—37.9%

 

 

 

 

 

 

 

Albany, New York, IDA, Civic Facility Revenue Bonds (New Covenant Charter School Project), Series A, 7%, 5/01/25

 

 

450

 

 

297,112

 

New York City, New York, City Transitional Finance Authority, Building Aid Revenue Refunding Bonds, Series
S-1, 5%, 1/15/23

 

 

1,400

 

 

1,411,004

 

New York City, New York, IDA, Civic Facility Revenue Bonds (YMCA of Greater New York Project), 5.25%, 8/01/21

 

 

4,000

 

 

4,020,000

 

New York Liberty Development Corporation Revenue Bonds (National Sports Museum Project), Series A, 6.125%, 2/15/19 (b)(c)

 

 

525

 

 

61,687

 

New York State Dormitory Authority, City University System Revenue Bonds, Consolidated 4th Generation, Series A, 5.125%, 7/01/11 (a)

 

 

1,800

 

 

1,960,452

 

New York State Dormitory Authority, Revenue Refunding Bonds (Brooklyn Law School), Series A, 5.50%, 7/01/18 (d)

 

 

1,000

 

 

929,270

 

New York State Dormitory Authority, State Supported Debt, Revenue Refunding Bonds (Upstate Community Colleges), Series A:

 

 

 

 

 

 

 

5%, 7/01/09 (a)

 

 

1,170

 

 

1,207,627

 

5%, 7/01/19

 

 

2,060

 

 

2,065,088

 

Niagara County, New York, IDA, Civic Facility Revenue Refunding Bonds (Niagara University Project), Series A, 5.35%, 11/01/23 (d)

 

 

4,180

 

 

3,451,760

 

Westchester County, New York, IDA, Civic Facility Revenue Bonds (Purchase College Foundation), Series A, 5.125%, 12/01/22 (e)

 

 

3,710

 

 

3,589,759

 

 

 

 

 

 

     

 

 

 

 

 

 

18,993,759

 

               

Health Care & Hospitals—23.9%

 

 

 

 

 

 

 

East Rochester, New York, Housing Authority, Revenue Refunding Bonds (Genesee Valley Presbyterian Nursing Center Project), 5.20%, 12/20/24 (f)(g)

 

 

1,320

 

 

1,239,784

 

New York State Dormitory Authority Revenue Bonds: (Mental Health Services Facilities), Series B, 5.50%, 8/15/11 (a)(h)

 

 

1,030

 

 

1,135,421

 

(Willow Towers Inc. Project), 5.25%, 2/01/22 (g)

 

 

1,000

 

 

1,016,530

 

New York State Dormitory Authority, State Supported Debt Revenue Bonds (Mental Health Services Facilities):

 

 

 

 

 

 

 

Series A, 5%, 2/15/18

 

 

120

 

 

120,539

 

Series B, 5.50%, 8/15/11 (a)(h)

 

 

1,560

 

 

1,719,666

 

Series B, 5.50%, 8/15/20 (h)

 

 

30

 

 

33,046

 

Oneida, New York, Health Care Corporation, Revenue Refunding Bonds (Residential Health Care Project), 5.30%, 2/01/21 (d)

 

 

4,130

 

 

3,444,792

 

Orange County, New York, IDA, Civic Facility Revenue Refunding Bonds (Saint Lukes Hospital—Newburgh, New York Project), Series A, 5.375%, 12/01/21 (d)

 

 

3,875

 

 

3,280,653

 

 

 

 

 

 

     

 

 

 

 

 

 

11,990,431

 

               

 

 

 

 

 

 

 

 

Municipal Bonds

 

 

Par
(000)

 

 

Value

 

               

New York—(concluded)

 

 

 

 

 

 

 

               

Industrial & Pollution Control—4.6%

 

 

 

 

 

 

 

Jefferson County, New York, IDA, Solid Waste Disposal, Revenue Refunding Bonds (International Paper Company), AMT, Series A, 5.20%, 12/01/20

 

$

2,450

 

$

1,546,636

 

New York City, New York, City IDA, Special Facility Revenue Bonds (American Airlines, Inc.—JFK International Airport), AMT, 7.50%, 8/01/16

 

 

1,000

 

 

737,410

 

 

 

 

 

 

     

 

 

 

 

 

 

2,284,046

 

               

Tax Revenue—10.1%

 

 

 

 

 

 

 

New York City, New York, City Transitional Finance Authority, Future Tax Secured Revenue Bonds, Series C, 5%, 5/01/09 (a)

 

 

1,895

 

 

1,941,522

 

New York City, New York, City Transitional Finance Authority, Future Tax Secured, Revenue Refunding Bonds, Series B, 5%, 5/01/18

 

 

3,000

 

 

3,131,700

 

 

 

 

 

 

     

 

 

 

 

 

 

5,073,222

 

               

Tobacco—12.4%

 

 

 

 

 

 

 

Rockland Tobacco Asset Securitization Corporation, New York, Tobacco Settlement Asset-Backed Revenue Bonds, 5.625%, 8/15/35

 

 

4,000

 

 

2,808,360

 

TSASC, Inc., New York, TFABS, Series 1, 5.75%, 7/15/12 (a)

 

 

3,000

 

 

3,393,150

 

 

 

 

 

 

     

 

 

 

 

 

 

6,201,510

 

               

Transportation—21.6%

 

 

 

 

 

 

 

Metropolitan Transportation Authority, New York, Revenue Refunding Bonds, Series A, 5.125%, 11/15/21 (h)(i)

 

 

5,000

 

 

4,824,300

 

Port Authority of New York and New Jersey, Consolidated Revenue Bonds, AMT, 126th Series, 5%, 11/15/18 (h)(i)

 

 

3,885

 

 

3,635,311

 

Port Authority of New York and New Jersey, Special Obligation Revenue Bonds (Continental Airlines, Inc.—LaGuardia Project), AMT, 9.125%, 12/01/15

 

 

2,340

 

 

2,342,457

 

 

 

 

 

 

     

 

 

 

 

 

 

10,802,068

 

               

Power—2.5%

 

 

 

 

 

 

 

Long Island Power Authority, New York, Electric System Revenue Bonds, CABS, 5.471%, 6/01/18 (j)(k)

 

 

1,900

 

 

1,237,774

 

               

Total Municipal Bond in New York

 

 

 

 

 

67,848,685

 

               

Multi-State—8.1%

 

 

 

 

 

 

 

               

Housing—8.1%

 

 

 

 

 

 

 

Charter Mac Equity Issuer Trust, 6.625%, 6/30/49 (l)(m)

 

 

4,000

 

 

4,049,280

 

               

Total Municipal Bonds in Multi-State

 

 

 

 

 

4,049,280

 

               

Puerto Rico—11.4%

 

 

 

 

 

 

 

               

Lease Revenue—5.2%

 

 

 

 

 

 

 

Puerto Rico Public Finance Corporation, Commonwealth Appropriation Revenue Bonds, Series E, 5.70%, 2/01/10 (a)

 

 

2,500

 

 

2,612,475

 

               

Power—3.5%

 

 

 

 

 

 

 

Puerto Rico Electric Power Authority, Power Revenue Bonds, Series WW, 5.50%, 7/01/21

 

 

2,000

 

 

1,772,600

 

               

Tobacco—2.7%

 

 

 

 

 

 

 

Children’s Trust Fund Project of Puerto Rico, Tobacco Settlement Revenue Refunding Bonds, 5.625%, 5/15/43

 

 

2,000

 

 

1,330,720

 

               

Total Municipal Bonds in Puerto Rico

 

 

 

 

 

5,715,795

 

               

Total Long-Term Investments (Cost—$81,405,560)—155.0%

 

 

 

 

 

77,613,760

 

               

See Notes to Financial Statements.

 

 

 

 

 

 

 

 

26

ANNUAL REPORT

DECEMBER 31, 2008

 



 

 


Schedule of Investments (concluded)

BlackRock New York Municipal 2018 Term Trust (BLH)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Short-Term Securities

 

 

Shares

 

 

Value

 

               

CMA New York Municipal Money Fund, 0.73% (n)(o)

 

 

2,686,374

 

$

2,686,374

 

               

Total Short-Term Securities
(Cost—$2,686,374)—5.4%

 

 

 

 

 

2,686,374

 

               

Total Investments (Cost—$84,091,934*)—160.4%

 

 

 

 

 

80,300,134

 

Other Assets Less Liabilities—2.3%

 

 

 

 

 

1,160,176

 

Preferred Shares, at Redemption Value—(62.7)%

 

 

 

 

 

(31,402,465

)

 

 

 

 

 

     

Net Assets Applicable to Common Shares—100.0%

 

 

 

 

$

50,057,845

 

 

 

 

 

 

     

 

 

 

 

*

The cost and unrealized appreciation (depreciation) of investments as of December 31, 2008, as computed for federal income tax purposes, were as follows:


 

 

 

 

 

Aggregate cost

 

$

84,102,527

 

 

 

   

 

Gross unrealized appreciation

 

$

2,316,241

 

Gross unrealized depreciation

 

 

(6,118,634

)

 

 

   

 

Net unrealized depreciation

 

$

(3,802,393

)

 

 

   

 


 

 

(a)

US government securities, held in escrow, are used to pay interest on this security as well as to retire the bond in full at the date indicated, typically at a premium to par.

 

(b)

Non-income producing security.

 

(c)

Issuer filed for bankruptcy and/or is in default of interest payments.

 

(d)

Radian Insured.

 

(e)

AMBAC Insured.

 

(f)

FHA Insured.

 

(g)

GNMA Collateralized.

 

(h)

MBIA Insured.

 

(i)

FGIC Insured.

 

(j)

FSA Insured.

 

(k)

Represents a zero-coupon bond. Rate shown reflects the current yield as of report date.

 

(l)

Security represents a beneficial interest in a trust. The collateral deposited into the trust is federally tax-exempt revenue bonds issued by various state or local governments, or their respective agencies or authorities. The security is subject to remarketing prior to its stated maturity, and is subject to mandatory redemption at maturity.

 

(m)

Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration to qualified institutional investors.

 

(n)

Investments in companies considered to be an affiliate of the Trust, for purposes of Section 2(a)(3) of the Investment Company Act of 1940, were as follows:


 

 

 

 

 

 

 

 

               

Affiliate

 

Net
Activity

 

Income

 

           

CMA New York Municipal Money Fund

 

 

2,376,846

 

 

$76,174

 

               

 

 

(o)

Represents the current yield as of report date.


 

 

 

For Trust compliance purposes, the Trust’s industry classifications refer to any one or more of the industry sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by Trust management. This definition may not apply for purposes of this report which may combine industry sub-classifications for reporting ease. These industry classifications are unaudited.

 

 

Effective January 1, 2008, the Trust adopted Financial Accounting Standards Board Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (“FAS 157”). FAS 157 clarifies the definition of fair value, establishes a framework for measuring fair values and requires additional disclosures about the use of fair value measurements. Various inputs are used in determining the fair value of investments, which are follows:

 

 

 

Level 1 - price quotations in active markets/exchanges for identical securities

 

 

 

 

Level 2 - other observable inputs (including, but not limited to: quoted prices for similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks, and default rates) or other market-corroborated inputs)

 

 

 

 

Level 3 - unobservable inputs based on the best information available in the circumstance, to the extent observable inputs are not available (including the Trust’s own assumption used in determining the fair value of investments)

 

 

 

 

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. For information about the Trust’s policy regarding valuation of investments and other significant accounting policies, please refer to Note 1 of the Notes to Financial Statements.

 

 

 

 

The following table summarizes the inputs used as of December 31, 2008 in determining the fair valuation of the Trust’s investments:


 

 

 

 

 

         

Valuation
Inputs

 

 

Investments in
Securities

 

       

 

 

Assets

 

 

 

 

Level 1

 

$

2,686,374

 

Level 2

 

 

77,613,760

 

Level 3

 

 

 

         

Total

 

$

80,300,134

 

 

 

     

See Notes to Financial Statements.

 

 

 

 

 

 

 

 

 

ANNUAL REPORT

DECEMBER 31, 2008

27



 

 


Schedule of Investments December 31, 2008

BlackRock Pennsylvania Strategic Municipal Trust (BPS)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 

           

Pennsylvania—118.4%

 

 

 

 

 

 

 

               

County/City/State—7.8%

 

 

 

 

 

 

 

Bucks County, Pennsylvania, IDA, Revenue Refunding Bonds (Pennswood Village Project), Series A, 6%, 10/01/12 (a)

 

$

1,400

 

$

1,604,974

 

Washington County, Pennsylvania, Capital Funding Authority Revenue Bonds (Capital Projects and Equipment Program), 6.15%, 12/01/29 (b)

 

 

120

 

 

95,075

 

 

 

 

 

 

     

 

 

 

 

 

 

1,700,049

 

               

Education—28.9%

 

 

 

 

 

 

 

Lancaster, Pennsylvania, Higher Education Authority, College Revenue Bonds (Franklin & Marshall College Project), 5%, 4/15/37

 

 

500

 

 

436,555

 

Mifflin County, Pennsylvania, School District, GO, 7.50%, 9/01/22 (c)

 

 

200

 

 

229,790

 

Owen J. Roberts School District, Pennsylvania, GO, 4.75%, 11/15/25

 

 

700

 

 

674,072

 

Pennsylvania State Higher Educational Facilities Authority Revenue Bonds (Lafayette College Project), 6%, 5/01/30

 

 

1,250

 

 

1,278,800

 

Philadelphia, Pennsylvania, School District, GO:

 

 

 

 

 

 

 

Series C, 5.75%, 3/01/10 (a)(d)

 

 

1,550

 

 

1,628,384

 

Series E, 6%, 9/01/38

 

 

100

 

 

101,381

 

Philadelphia, Pennsylvania, School District, GO, Refunding, Series A, 5%, 8/01/15 (b)

 

 

1,000

 

 

1,070,790

 

Scranton, Pennsylvania, School District, GO, Series A, 5%, 7/15/38 (e)

 

 

500

 

 

449,600

 

Wilkes-Barre, Pennsylvania, Financing Authority, Revenue Refunding Bonds (Wilkes University Project), 5%, 3/01/37

 

 

700

 

 

419,097

 

 

 

 

 

 

     

 

 

 

 

 

 

6,288,469

 

               

Health Care & Hospitals—33.2%

 

 

 

 

 

 

 

Allegheny County, Pennsylvania, Hospital Development Authority, Revenue Refunding Bonds (West Penn Allegheny Health System), Series A, 5.375%, 11/15/40

 

 

470

 

 

223,029

 

Lancaster County, Pennsylvania, Hospital Authority Revenue Bonds (Masonic Homes Project), 5%, 11/01/36

 

 

1,000

 

 

672,830

 

Lehigh County, Pennsylvania, General Purpose Authority, Hospital Revenue Refunding Bonds (Saint Lukes Hospital of Bethlehem), 5.375%, 8/15/13 (a)

 

 

3,520

 

 

4,028,710

 

Monroe County, Pennsylvania, Hospital Authority Revenue Refunding Bonds (Pocono Medical Center), 5.125%, 1/01/37

 

 

345

 

 

214,331

 

Montgomery County, Pennsylvania, IDA, Retirement Community Revenue Bonds (ACTS Retirement—Life Communities Inc.), 5.25%, 11/15/28

 

 

1,250

 

 

856,100

 

Southcentral General Authority, Pennsylvania, Revenue Refunding Bonds (Wellspan Health Obligated), Series A, 6%, 6/01/29

 

 

1,250

 

 

1,248,463

 

 

 

 

 

 

     

 

 

 

 

 

 

7,243,463

 

               

Housing—10.5%

 

 

 

 

 

 

 

Pennsylvania HFA, S/F Mortgage Revenue Bonds, AMT, Series 95A, 4.90%, 10/01/37

 

 

1,000

 

 

747,290

 

Pennsylvania HFA, S/F Mortgage Revenue Refunding Bonds, AMT:

 

 

 

 

 

 

 

Series 96A, 4.70%, 10/01/37

 

 

495

 

 

345,926

 

Series 97A, 4.65%, 10/01/31

 

 

1,300

 

 

934,518

 

Series 103C, 5.40%, 10/01/33

 

 

300

 

 

267,030

 

 

 

 

 

 

     

 

 

 

 

 

 

2,294,764

 

               

 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 

           

Pennsylvania—(concluded)

 

 

 

 

 

 

 

               

Industrial & Pollution Control—6.5%

 

 

 

 

 

 

 

Pennsylvania Economic Development Financing Authority, Exempt Facilities Revenue Bonds (Amtrak Project), AMT, Series A:

 

 

 

 

 

 

 

6.25%, 11/01/31

 

$

1,000

 

$

717,390

 

6.375%, 11/01/41

 

 

1,000

 

 

703,100

 

 

 

 

 

 

     

 

 

 

 

 

 

1,420,490

 

               

Power—3.0%

 

 

 

 

 

 

 

Pennsylvania Economic Development Financing Authority, Resource Recovery Revenue Refunding Bonds (Colver Project), AMT, Series G, 5.125%, 12/01/15

 

 

900

 

 

649,404

 

               

Transportation—13.4%

 

 

 

 

 

 

 

Allegheny County, Pennsylvania, Port Authority, Special Transportation Revenue Bonds, 6.125%, 3/01/09 (b)

 

 

1,000

 

 

1,018,560

 

Pennsylvania State Turnpike Commission, Oil Franchise Tax Revenue Bonds, Series C, 5%, 12/01/32 (d)

 

 

1,000

 

 

945,310

 

Philadelphia, Pennsylvania, Airport Revenue Bonds, AMT, Series A, 5%, 6/15/37 (e)

 

 

1,150

 

 

831,542

 

Susquehanna Area Regional Airport Authority, Pennsylvania, Airport System Revenue Bonds, AMT, Series A, 6.50%, 1/01/38

 

 

185

 

 

119,952

 

 

 

 

 

 

     

 

 

 

 

 

 

2,915,364

 

               

Water & Sewer—15.1%

 

 

 

 

 

 

 

Chester County, Pennsylvania, IDA, Water Facilities Revenue Bonds (Aqua Pennsylvania, Inc. Project), AMT, Series A, 5%, 2/01/40 (d)(f)

 

 

2,000

 

 

1,379,480

 

Delaware County, Pennsylvania, IDA, Water Facilities Revenue Bonds (Philadelphia Suburban Water), 6%, 6/01/29 (d)(f)

 

 

1,250

 

 

1,078,800

 

Montgomery County, Pennsylvania, IDA, Water Facilities Revenue Bonds (Aqua Pennsylvania, Inc. Project), Series A, 5.25%, 7/01/42

 

 

300

 

 

215,688

 

Pennsylvania Economic Development Financing Authority, Water Facility Revenue Bonds (Aqua Pennsylvania, Inc. Project), AMT, Series A, 6.75%, 10/01/18

 

 

600

 

 

612,930

 

 

 

 

 

 

     

 

 

 

 

 

 

3,286,898

 

               

Total Municipal Bonds in Pennsylvania

 

 

 

 

 

25,798,901

 

               

Multi-State—15%

 

 

 

 

 

 

 

               

Housing—15.0%

 

 

 

 

 

 

 

MuniMae TE Bond Subsidiary LLC, 6.875%, 6/30/49 (g)(h)

 

 

4,000

 

 

3,266,080

 

               

Total Municipal Bonds in Multi-State

 

 

 

 

 

3,266,080

 

               

Puerto Rico—20.2%

 

 

 

 

 

 

 

               

County/City/State—5.6%

 

 

 

 

 

 

 

Puerto Rico Commonwealth, GO, Refunding, Sub-Series C-7, 6%, 7/01/27 (b)

 

 

1,385

 

 

1,212,706

 

               

Education—3.6%

 

 

 

 

 

 

 

Puerto Rico Industrial, Tourist, Educational, Medical and Environmental Control Facilities Revenue Bonds (Ana G. Mendez University System Project), 5%, 3/01/26

 

 

1,250

 

 

789,437

 

               

Lease Revenue—8.5%

 

 

 

 

 

 

 

Puerto Rico Public Buildings Authority, Government Facilities Revenue Refunding Bonds, Series N, 5%, 7/01/37 (i)

 

 

300

 

 

209,616

 

Puerto Rico Public Finance Corporation, Commonwealth Appropriation Revenue Bonds, Series E, 5.50%, 2/01/12

 

 

1,495

 

 

1,638,595

 

 

 

 

 

 

     

 

 

 

 

 

 

1,848,211

 

               

 

 

 

 

See Notes to Financial Statements.

 

 

 

 

 

28

ANNUAL REPORT

DECEMBER 31, 2008

 



 

 


Schedule of Investments (concluded)

BlackRock Pennsylvania Strategic Municipal Trust (BPS)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 

           

Puerto Rico—(concluded)

 

 

 

 

 

 

 

               

Power—1.8%

 

 

 

 

 

 

 

Puerto Rico Electric Power Authority, Power Revenue Bonds, Series WW, 5.50%, 7/01/38

 

$

500

 

$

394,075

 

               

Water & Sewer—0.7%

 

 

 

 

 

 

 

Puerto Rico Commonwealth Aqueduct and Sewer Authority, Senior Lien Revenue Bonds, Series A, 6%, 7/01/38

 

 

200

 

 

164,154

 

               

Total Municipal Bonds in Puerto Rico

 

 

 

 

 

4,408,583

 

               

Total Long-Term Investments—(Cost—$38,973,106)—153.6%

 

 

 

 

 

33,473,564

 

               

 

 

 

 

 

 

 

 

Short-Term Securities

 

 

 

 

 

 

 

               

Pennsylvania—18.8%

 

 

 

 

 

 

 

Delaware County, Pennsylvania, IDA, Environmental Improvement Revenue Refunding Bonds (Sunoco Inc. Project), VRDN, 0.80%, 1/06/09 (j)(k)

 

 

1,000

 

 

1,000,000

 

Geisinger Health System, Pennsylvania, Revenue Bonds, VRDN, 0.85%, 1/01/09 (j)(k)

 

 

1,000

 

 

1,000,000

 

Philadelphia, Pennsylvania, Gas Works Revenue Bonds. VRDN, Fifth Series A-2, 0.65%, 1/07/09 (j)(k)

 

 

1,100

 

 

1,100,000

 

Philadelphia, Pennsylvania, Hospitals and Higher Education Facilities Authority, Hospital Revenue Refunding Bonds (Children’s Hospital Project), VRDN, Series B, 1.05%, 1/01/09 (j)(k)

 

 

1,000

 

 

1,000,000

 

 

 

 

 

 

     

 

 

 

 

 

 

4,100,000

 

               

 

Money Market Fund—2.3%

 

Shares

 

 

 

 

             

CMA Pennsylvania Municipal Money Fund, 0.73% (l)(m)

 

 

499,289

 

 

499,289

 

               

Total Short-Term Securities (Cost—$4,599,289)—21.1%

 

 

 

 

 

4,599,289

 

               

Total Investments (Cost—$43,572,395*)—174.7%

 

 

 

 

 

38,072,853

 

Other Assets Less Liabilities—2.5%

 

 

 

 

 

556,396

 

Preferred Shares, at Redemption Value—(77.2)%

 

 

 

 

 

(16,830,650

)

 

 

 

 

 

     

Net Assets Applicable to Common Shares—100.0%

 

 

 

 

$

21,798,599

 

 

 

 

 

 

     

 

 

*

The cost and unrealized appreciation (depreciation) of investments as of December 31, 2008, as computed for federal income tax purposes, were as follows:


 

 

 

 

 

Aggregate cost

 

$

43,424,017

 

 

 

     

Gross unrealized appreciation

 

$

741,507

 

Gross unrealized depreciation

 

 

(6,092,671

)

 

 

     

Net unrealized depreciation

 

$

(5,351,164

)

 

 

     

 

 

(a)

US government securities, held in escrow, are used to pay interest on this security as well as to retire the bond in full at the date indicated, typically at a premium to par.

 

(b)

AMBAC Insured.

 

(c)

XL Capital Insured.

 

(d)

MBIA Insured.

 

(e)

FSA Insured.

 

(f)

FGIC Insured.

 

(g)

Security represents a beneficial interest in a trust. The collateral deposited into the trust is federally tax-exempt revenue bonds issued by various state or local governments, or their respective agencies or authorities. The security is subject to mandatory redemption at maturity.

 

(h)

Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration to qualified institutional investors.

 

(i)

Commonwealth Guaranteed.

 

(j)

Variable rate security. Rate shown is as of report date.

 

(k)

Security may have a maturity of more than one year at the time of issuance, but has variable rate and demand features that qualify it as a short-term security.

 

(l)

Investments in companies considered to be an affiliate of the Trust, for purposes of Section 2(a)(3) of the Investment Company Act of 1940, were as follows:


 

 

 

 

 

 

 

 

           

Affiliate

 

Net
Activity

 

Income

 

           

CMA Pennsylvania Municipal Money Fund

 

 

(837,695

)

$

64,013

 

               

 

 

 

(m)

Represents the current yield as of report date.

 

For Trust compliance purposes, the Trust’s industry classifications refer to any one or more of the industry sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by Trust management. This definition may not apply for purposes of this report which may combine industry sub-classifications for reporting ease. These industry classifications are unaudited.

 

Effective January 1, 2008, the Trust adopted Financial Accounting Standards Board Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (“FAS 157”). FAS 157 clarifies the definition of fair value, establishes a framework for measuring fair values and requires additional disclosures about the use of fair value measurements. Various inputs are used in determining the fair value of investments, which are as follows:

 

 

 

Level 1 - price quotations in active markets/exchanges for identical securities

 

 

 

 

Level 2 - other observable inputs (including, but not limited to: quoted prices for similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks, and default rates) or other market-corroborated inputs)

 

 

 

 

Level 3 - unobservable inputs based on the best information available in the circumstance, to the extent observable inputs are not available (including the Trust’s own assumption used in determining the fair value of investments)

 

 

 

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. For information about the Trust’s policy regarding valuation of investments and other significant accounting policies, please refer to Note 1 of the Notes to Financial Statements.

 

 

 

The following table summarizes the inputs used as of December 31, 2008 in determining the fair valuation of the Trust’s investments:


 

 

 

 

 

       

Valuation
Inputs

 

Investments in
Securities

 

       

 

 

Assets

 

 

 

   

Level 1

 

$

499,289

 

Level 2

 

 

37,573,564

 

Level 3

 

 

 

         

Total

 

$

38,072,853

 

 

 

     

 

 

 

 

See Notes to Financial Statements.

 

 

 

 

 

 

ANNUAL REPORT

DECEMBER 31, 2008

29



 


Statements of Assets and Liabilities


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2008

 

BlackRock
Insured
Municipal
Term Trust
(BMT)

 

BlackRock
Municipal
2018 Term Trust
(BPK)

 

BlackRock
Municipal
2020 Term Trust
(BKK)

 

BlackRock
Strategic
Municipal Trust
(BSD)

 

BlackRock
California
Municipal
2018 Term Trust
(BJZ)

 

BlackRock
New York
Municipal
2018 Term Trust
(BLH)

 

BlackRock
Pennsylvania
Strategic
Municipal Trust
(BPS)

 

                               

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                                             

Investments at value – unaffiliated1

 

$

262,143,938

 

$

302,186,351

 

$

367,279,149

 

$

122,488,767

 

$

128,322,261

 

$

77,613,760

 

$

37,573,564

 

Investments at value – affiliated2

 

 

 

 

16,213,640

 

 

18,211,401

 

 

3,303,091

 

 

2,233,945

 

 

2,686,374

 

 

499,289

 

Cash

 

 

2,057,497

 

 

3,343

 

 

27,442

 

 

50,097

 

 

19,477

 

 

65,647

 

 

24,052

 

Investments sold receivable

 

 

580,154

 

 

 

 

185,000

 

 

6,586

 

 

 

 

 

 

 

Interest receivable

 

 

2,379,150

 

 

4,568,119

 

 

5,725,311

 

 

2,030,029

 

 

1,876,267

 

 

1,184,982

 

 

588,768

 

Income receivable – affiliated

 

 

1,712

 

 

958

 

 

845

 

 

261

 

 

198

 

 

123

 

 

50

 

Other assets

 

 

41,187

 

 

23,401

 

 

25,508

 

 

6,077

 

 

4,779

 

 

2,956

 

 

2,815

 

Prepaid expenses

 

 

39,838

 

 

41,354

 

 

60,616

 

 

17,898

 

 

16,636

 

 

9,901

 

 

5,034

 

 

 

                                         

Total assets

 

 

267,243,476

 

 

323,037,166

 

 

391,515,272

 

 

127,902,806

 

 

132,473,563

 

 

81,563,743

 

 

38,693,572

 

 

 

                                         

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                                             

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                                             

Interest expense and fees payable

 

 

 

 

15,231

 

 

11,641

 

 

42,743

 

 

 

 

 

 

 

Income dividends payable —Common Shares

 

 

 

 

93,155

 

 

100,882

 

 

11,448

 

 

30,201

 

 

13,116

 

 

3,195

 

Investment advisory fees payable

 

 

56,981

 

 

110,456

 

 

166,170

 

 

59,645

 

 

45,550

 

 

27,310

 

 

18,110

 

Officer’s and Trustees’/Directors’ fees payable

 

 

42,965

 

 

24,320

 

 

27,044

 

 

6,670

 

 

5,297

 

 

3,362

 

 

3,159

 

Administration fee payable

 

 

47,622

 

 

 

 

 

 

 

 

 

 

 

 

 

Other affiliates payable

 

 

 

 

1,352

 

 

1,668

 

 

606

 

 

633

 

 

354

 

 

186

 

Other accrued expenses payable

 

 

97,729

 

 

98,299

 

 

97,303

 

 

64,099

 

 

63,799

 

 

59,291

 

 

39,673

 

 

 

                                         

Total accrued liabilities

 

 

245,297

 

 

342,813

 

 

404,708

 

 

185,211

 

 

145,480

 

 

103,433

 

 

64,323

 

 

 

                                         

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                                             

Other Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                                             

Trust certificates3

 

 

 

 

3,750,000

 

 

3,750,000

 

 

7,763,958

 

 

 

 

 

 

 

 

 

                                         

Total Liabilities

 

 

245,297

 

 

4,092,813

 

 

4,154,708

 

 

7,994,770

 

 

145,480

 

 

103,433

 

 

64,323

 

 

 

                                         

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                                             

Preferred Shares at Redemption Value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                                             

$0.001 par value per share at $25,000 per share liquidation preference plus unpaid dividends4

 

 

 

 

133,894,980

 

 

173,888,598

 

 

47,766,035

 

 

55,532,854

 

 

31,402,465

 

 

16,830,650

 

 

 

                                         

Net Assets Applicable to Common Shares

 

$

266,998,179

 

$

185,049,373

 

$

213,471,966

 

$

72,187,602

 

$

76,795,229

 

$

50,057,845

 

$

21,798,599

 

 

 

                                         

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                                             

Net Assets Applicable to Common Shareholders Consist of

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                                             

Par value5

 

$

258,856

 

$

15,908

 

$

20,237

 

$

7,288

 

$

6,433

 

$

3,633

 

$

2,023

 

Paid-in capital in excess of par

 

 

239,251,319

 

 

225,635,091

 

 

287,164,339

 

 

103,334,645

 

 

91,211,990

 

 

51,481,157

 

 

28,485,072

 

Undistributed net investment income

 

 

17,033,576

 

 

14,713,604

 

 

2,426,118

 

 

444,294

 

 

4,718,071

 

 

3,764,275

 

 

156,046

 

Accumulated net realized gain (loss)

 

 

41,199

 

 

(14,147,787

)

 

(2,402,677

)

 

(6,015,594

)

 

(3,909,799

)

 

(1,399,420

)

 

(1,345,000

)

Net unrealized appreciation/depreciation

 

 

10,413,229

 

 

(41,167,443

)

 

(73,736,051

)

 

(25,583,031

)

 

(15,231,466

)

 

(3,791,800

)

 

(5,499,542

)

 

 

                                         

Net assets applicable to Common Shareholders

 

$

266,998,179

 

$

185,049,373

 

$

213,471,966

 

$

72,187,602

 

$

76,795,229

 

$

50,057,845

 

$

21,798,599

 

 

 

                                         

Net asset value per common share6

 

$

10.31

 

$

11.63

 

$

10.55

 

$

9.90

 

$

11.94

 

$

13.78

 

$

10.77

 

 

 

                                         

1 Investments at cost – unaffiliated

 

$

251,730,709

 

$

343,353,794

 

$

441,015,200

 

$

148,071,798

 

$

143,553,727

 

$

81,405,560

 

$

43,073,106

 

 

 

                                         

2 Investments at cost – affiliated

 

$

 

$

16,213,640

 

$

18,211,401

 

$

3,303,091

 

$

2,233,945

 

$

2,686,374

 

$

499,289

 

 

 

                                         

3 Represents short-term floating rate certificates issued by tender option bond trusts.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                                         

4 Preferred Shares outstanding

 

 

 

 

5,354

 

 

6,954

 

 

1,910

 

 

2,221

 

 

1,256

 

 

673

 

 

 

                                         

5 Par value per share

 

$

0.010

 

$

0.001

 

$

0.001

 

$

0.001

 

$

0.001

 

$

0.001

 

$

0.001

 

 

 

                                         

6 Common Shares outstanding

 

 

25,885,639

 

 

15,908,028

 

 

20,236,628

 

 

7,288,024

 

 

6,433,028

 

 

3,633,028

 

 

2,023,459

 

 

 

                                         

See Notes to Financial Statements.

 

 

 

 

 

 

 

 

30

ANNUAL REPORT

DECEMBER 31, 2008

 

 

 

 

 

 

 

 

 

 

ANNUAL REPORT

DECEMBER 31, 2008

31




 


 

Statements of Operations


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2008

 

BlackRock
Insured
Municipal
Term Trust
(BMT)

 

BlackRock
Municipal
2018 Term Trust
(BPK)

 

BlackRock
Municipal
2020 Term Trust
(BKK)

 

BlackRock
Strategic
Municipal Trust
(BSD)

 

BlackRock
California
Municipal
2018 Term Trust
(BJZ)

 

BlackRock
New York
Municipal
2018 Term Trust
(BLH)

 

BlackRock
Pennsylvania
Strategic
Municipal Trust
(BPS)

 

Investment Income

   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest

 

$

13,795,669

 

$

19,873,447

 

$

25,032,092

 

$

8,704,781

 

$

7,564,702

 

$

4,426,107

 

$

2,121,123

 

Income – affiliated

 

 

122,551

 

 

82,043

 

 

49,076

 

 

69,905

 

 

36,180

 

 

76,637

 

 

64,449

 

 

 

                                         

Total income

 

 

13,918,220

 

 

19,955,490

 

 

25,081,168

 

 

8,774,686

 

 

7,600,882

 

 

4,502,744

 

 

2,185,572

 

 

 

                                         

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment advisory

 

 

1,124,672

 

 

1,442,118

 

 

2,257,467

 

 

918,236

 

 

583,220

 

 

348,030

 

 

262,178

 

Administration

 

 

321,089

 

 

 

 

 

 

 

 

 

 

 

 

 

Commissions for Preferred Shares

 

 

130,127

 

 

338,783

 

 

434,121

 

 

134,372

 

 

139,510

 

 

78,892

 

 

42,413

 

Professional

 

 

119,142

 

 

125,175

 

 

124,643

 

 

80,569

 

 

80,230

 

 

73,422

 

 

55,143

 

Accounting services

 

 

64,788

 

 

43,443

 

 

62,445

 

 

22,816

 

 

23,439

 

 

18,144

 

 

14,105

 

Transfer agent

 

 

20,654

 

 

22,672

 

 

26,136

 

 

19,203

 

 

12,436

 

 

11,718

 

 

16,981

 

Custodian

 

 

17,546

 

 

21,451

 

 

26,343

 

 

12,845

 

 

11,059

 

 

7,401

 

 

4,108

 

Printing

 

 

6,426

 

 

4,162

 

 

38,738

 

 

10,997

 

 

4,277

 

 

8,437

 

 

6,065

 

Registration

 

 

 

 

8,811

 

 

8,811

 

 

8,860

 

 

8,811

 

 

8,811

 

 

483

 

Officer and Trustees/Directors

 

 

 

 

 

 

5,872

 

 

847

 

 

6,691

 

 

2,796

 

 

 

Miscellaneous

 

 

 

 

14,334

 

 

37,415

 

 

15,418

 

 

9,533

 

 

27,705

 

 

15,512

 

 

 

                                         

Total expenses excluding interest expense and fees

 

 

1,804,444

 

 

2,020,949

 

 

3,021,991

 

 

1,224,163

 

 

879,206

 

 

585,356

 

 

416,988

 

Interest expense and fees1

 

 

 

 

58,652

 

 

58,652

 

 

200,916

 

 

 

 

 

 

7,885

 

 

 

                                         

Total expenses

 

 

1,804,444

 

 

2,079,601

 

 

3,080,643

 

 

1,425,079

 

 

879,206

 

 

585,356

 

 

424,873

 

Less fees waived by advisor

 

 

(12,150

)

 

(7,979

)

 

(4,744

)

 

(83,109

)

 

(7,411

)

 

(19,000

)

 

(40,821

)

Less fees paid indirectly

 

 

(176

)

 

(374

)

 

(462

)

 

(673

)

 

 

 

(255

)

 

(128

)

 

 

                                         

Total expenses after waiver and fees paid indirectly

 

 

1,792,118

 

 

2,071,248

 

 

3,075,437

 

 

1,341,297

 

 

871,795

 

 

566,101

 

 

383,924

 

 

 

                                         

Net investment income

 

 

12,126,102

 

 

17,884,242

 

 

22,005,731

 

 

7,433,389

 

 

6,729,087

 

 

3,936,643

 

 

1,801,648

 

 

 

                                         

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Realized and Unrealized Gain (Loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net realized gain (loss) from:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments

 

 

377,362

 

 

341,532

 

 

54,030

 

 

(2,766,957

)

 

(406,121

)

 

157,285

 

 

(969,315

)

Futures and swaps

 

 

 

 

 

 

 

 

(1,307,627

)

 

 

 

 

 

(97,610

)

 

 

                                         

 

 

 

377,362

 

 

341,532

 

 

54,030

 

 

(4,074,584

)

 

(406,121

)

 

157,285

 

 

(1,066,925

)

 

 

                                         

Net change in unrealized appreciation/depreciation on:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments

 

 

(1,304,250

)

 

(53,738,867

)

 

(86,853,534

)

 

(27,923,884

)

 

(18,265,741

)

 

(8,030,460

)

 

(5,746,319

)

Futures and swaps

 

 

 

 

 

 

 

 

572,097

 

 

 

 

 

 

48,202

 

 

 

                                         

 

 

 

(1,304,250

)

 

(53,738,867

)

 

(86,853,534

)

 

(27,351,787

)

 

(18,265,741

)

 

(8,030,460

)

 

(5,698,117

)

 

 

                                         

Total realized and unrealized loss

 

 

(926,888

)

 

(53,397,335

)

 

(86,799,504

)

 

(31,426,371

)

 

(18,671,862

)

 

(7,873,175

)

 

(6,765,042

)

 

 

                                         

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends and Distributions to Preferred Shareholders from

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net investment income

 

 

(1,766,464

)

 

(4,633,424

)

 

(5,989,683

)

 

(1,866,936

)

 

(1,870,577

)

 

(1,050,987

)

 

(573,868

)

Net realized gain

 

 

(67,662

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                                         

 

 

 

(1,834,126

)

 

(4,633,424

)

 

(5,989,683

)

 

(1,866,936

)

 

(1,870,577

)

 

(1,050,987

)

 

(573,868

)

 

 

                                         

Net Increase (Decrease) in Net Assets Applicable to Common Shareholders Resulting from Operations

 

$

9,365,088

 

$

(40,146,517

)

$

(70,783,456

)

$

(25,859,918

)

$

(13,813,352

)

$

(4,987,519

)

$

(5,537,262

)

 

 

                                         

 

 

1

Related to tender option bond trusts.


 

 

 

 

See Notes to Financial Statements.

 

 

 

 

 

32

ANNUAL REPORT

DECEMBER 31, 2008

 

 

 

 

 

 

 

 

 

 

 

 

ANNUAL REPORT

DECEMBER 31, 2008

33




 


Statements of Changes in Net Assets


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BlackRock
Insured Municipal

Term Trust (BMT)

 

BlackRock Municipal
2018 Term Trust (BPK)

 

BlackRock Municipal
2020 Term Trust (BKK)

 

BlackRock Strategic
Municipal Trust (BSD)

 

 

 

               

 

 

Year Ended December 31,

 

Year Ended December 31,

 

Year Ended December 31,

 

Year Ended December 31,

 

 

 

               

Increase (Decrease) in Net Assets:

 

2008

 

2007

 

2008

 

2007

 

2008

 

2007

 

2008

 

2007

 

Operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net investment income

 

$

12,126,102

 

$

13,606,247

 

$

17,884,242

 

$

18,678,968

 

$

22,005,731

 

$

22,564,782

 

$

7,433,389

 

$

7,787,890

 

Net realized gain (loss)

 

 

377,362

 

 

308,636

 

 

341,532

 

 

617,774

 

 

54,030

 

 

268,071

 

 

(4,074,584

)

 

1,711,382

 

Net change in unrealized appreciation/depreciation

 

 

(1,304,250

)

 

870,349

 

 

(53,738,867

)

 

(13,806,059

)

 

(86,853,534

)

 

(19,802,469

)

 

(27,351,787

)

 

(9,831,016

)

Dividends and distributions to Preferred Shareholders from:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net investment income

 

 

(1,766,464

)

 

(3,201,906

)

 

(4,633,424

)

 

(5,136,395

)

 

(5,989,683

)

 

(6,645,261

)

 

(1,866,936

)

 

(2,313,246

)

Net realized gain

 

 

(67,662

)

 

(58,959

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                                               

Net increase (decrease) in net assets applicable to Common Shareholders resulting from operations

 

 

9,365,088

 

 

11,524,367

 

 

(40,146,517

)

 

354,288

 

 

(70,783,456

)

 

(3,614,877

)

 

(25,859,918

)

 

(2,644,990

)

 

 

                                               

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends and Distributions to Common Shareholders From

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net investment income

 

 

(10,038,554

)

 

(9,448,365

)

 

(14,412,673

)

 

(14,862,712

)

 

(15,116,761

)

 

(16,144,296

)

 

(5,920,231

)

 

(7,402,121

)

Net realized gain

 

 

(275,449

)

 

(237,423

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                                               

Decrease in net assets resulting from dividends and distributions to Common Shareholders

 

 

(10,314,003

)

 

(9,685,788

)

 

(14,412,673

)

 

(14,862,712

)

 

(15,116,761

)

 

(16,144,296

)

 

(5,920,231

)

 

(7,402,121

)

 

 

                                               

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital Share Transactions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reinvestment of common dividends

 

 

 

 

 

 

 

 

 

 

 

 

 

 

86,152

 

 

231,559

 

 

 

                                               

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Assets Applicable to Common Shareholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total increase (decrease) in net assets applicable to Common Shares

 

 

(948,915

)

 

1,838,579

 

 

(54,559,190

)

 

(14,508,424

)

 

(85,900,217

)

 

(19,759,173

)

 

(31,693,997

)

 

(9,815,552

)

Beginning of year

 

 

267,947,094

 

 

266,108,515

 

 

239,608,563

 

 

254,116,987

 

 

299,372,183

 

 

319,131,356

 

 

103,881,599

 

 

113,697,151

 

 

 

                                               

End of year

 

$

266,998,179

 

$

267,947,094

 

$

185,049,373

 

$

239,608,563

 

$

213,471,966

 

$

299,372,183

 

$

72,187,602

 

$

103,881,599

 

 

 

                                               

End of year undistributed net investment income

 

$

17,033,576

 

$

16,716,163

 

$

14,713,604

 

$

15,868,834

 

$

2,426,118

 

$

1,524,889

 

$

444,294

 

$

797,351

 

 

 

                                               

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BlackRock
California Municipal
2018 Term Trust (BJZ)

 

BlackRock
New York Municipal
2018 Term Trust (BLH)

 

BlackRock
Pennsylvania Strategic
Municipal Trust (BPS)

 

 

 

 

 

           

 

 

 

 

 

 

 

 

Year Ended December 31,

 

Year Ended December 31,

 

Year Ended December 31,

 

 

 

 

 

 

 

 

 

           

 

 

 

 

 

 

Increase (Decrease) in Net Assets:

 

2008

 

2007

 

2008

 

2007

 

2008

 

2007

 

 

 

 

 

 

 

Operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net investment income

 

$

6,729,087

 

$

6,790,598

 

$

3,936,643

 

$

4,283,194

 

$

1,801,648

 

$

2,006,835

 

 

 

 

 

 

 

Net realized gain (loss)

 

 

(406,121

)

 

67,378

 

 

157,285

 

 

(31,335

)

 

(1,066,925

)

 

485,697

 

 

 

 

 

 

 

Net change in unrealized appreciation/depreciation

 

 

(18,265,741

)

 

(2,946,357

)

 

(8,030,460

)

 

(1,603,702

)

 

(5,698,117

)

 

(1,991,463

)

 

 

 

 

 

 

Dividends to Preferred Shareholders from net investment income

 

 

(1,870,577

)

 

(1,884,712

)

 

(1,050,987

)

 

(1,006,652

)

 

(573,868

)

 

(618,041

)

 

 

 

 

 

 

 

 

                                   

 

 

 

 

 

 

Net increase (decrease) in net assets applicable to Common Shareholders resulting from operations

 

 

(13,813,352

)

 

2,026,907

 

 

(4,987,519

)

 

1,641,505

 

 

(5,537,262

)

 

(116,972

)

 

 

 

 

 

 

 

 

                                   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends to Common Shareholders From

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net investment income

 

 

(4,728,276

)

 

(4,854,845

)

 

(2,997,248

)

 

(2,911,923

)

 

(1,244,164

)

 

(1,669,162

)

 

 

 

 

 

 

 

 

                                   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital Share Transactions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reinvestment of common dividends

 

 

 

 

 

 

 

 

 

 

19,724

 

 

40,768

 

 

 

 

 

 

 

 

 

                                   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Assets Applicable to Common Shareholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total decrease in net assets applicable to Common Shareholders

 

 

(18,541,628

)

 

(2,827,938

)

 

(7,984,767

)

 

(1,270,418

)

 

(6,761,702

)

 

(1,745,366

)

 

 

 

 

 

 

Beginning of year

 

 

95,336,857

 

 

98,164,795

 

 

58,042,612

 

 

59,313,030

 

 

28,560,301

 

 

30,305,667

 

 

 

 

 

 

 

 

 

                                   

 

 

 

 

 

 

End of year

 

$

76,795,229

 

$

95,336,857

 

$

50,057,845

 

$

58,042,612

 

$

21,798,599

 

$

28,560,301

 

 

 

 

 

 

 

 

 

                                   

 

 

 

 

 

 

End of year undistributed net investment income

 

$

4,718,071

 

$

4,585,962

 

$

3,764,275

 

$

3,874,292

 

$

156,046

 

$

172,430

 

 

 

 

 

 

 

 

 

                                   

 

 

 

 

 

 


 

 

 

 

See Notes to Financial Statements.

 

 

 

 

 

34

ANNUAL REPORT

DECEMBER 31, 2008

 

 

 

 

 

 

 

 

 

 

 

ANNUAL REPORT

DECEMBER 31, 2008

 35




 

 


Financial Highlights

BlackRock Insured Municipal Term Trust (BMT)


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31,

 

 

 

 

 

2008

 

2007

 

2006

 

2005

 

2004

 

                       

Per Share Operating Performance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                                 

Net asset value, beginning of year

 

$

10.35

 

$

10.28

 

$

10.51

 

$

11.05

 

$

11.40

 

 

 

                             

Net investment income

 

 

0.47

1

 

0.53

 

 

0.61

 

 

0.59

 

 

0.67

 

Net realized and unrealized gain (loss)

 

 

(0.04

)

 

0.04

 

 

(0.18

)

 

(0.38

)

 

(0.34

)

Dividends and distributions to Preferred Shareholders from:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net investment income

 

 

(0.07

)

 

(0.12

)

 

(0.21

)

 

(0.15

)

 

(0.07

)

Net realized gain2

 

 

(0.00

)

 

(0.00

)

 

(0.00

)

 

(0.00

)

 

(0.00

)

 

 

                             

Net increase from investment operations

 

 

0.36

 

 

0.45

 

 

0.22

 

 

0.06

 

 

0.26

 

 

 

                             

Dividends and distributions to Common Shareholders from:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net investment income

 

 

(0.39

)

 

(0.37

)

 

(0.45

)

 

(0.58

)

 

(0.58

)

Net realized gain

 

 

(0.01

)

 

(0.01

)

 

(0.00

)2

 

(0.02

)

 

(0.03

)

 

 

                             

Total dividends and distributions

 

 

(0.40

)

 

(0.38

)

 

(0.45

)

 

(0.60

)

 

(0.61

)

 

 

                             

Net asset value, end of year

 

$

10.31

 

$

10.35

 

$

10.28

 

$

10.51

 

$

11.05

 

 

 

                             

Market price, end of year

 

$

10.16

 

$

9.85

 

$

9.77

 

$

10.36

 

$

11.30

 

 

 

                             

 

                       

Total Investment Return3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                                 

Based on net asset value

 

 

3.62

%

 

4.57

%

 

2.26

%

 

0.37

%

 

2.39

%

 

 

                             

Based on market price

 

 

7.30

%

 

4.71

%

 

(1.40

)%

 

(3.26

)%

 

7.92

%

 

 

                             

 

                       

Ratios Based on Average Net Assets Applicable to Common Shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                                 

Total expenses after waiver and fees paid indirectly4

 

 

0.66

%

 

0.83

%

 

1.05

%

 

1.04

%

 

1.02

%

 

 

                             

Total expenses after waiver and before fees paid indirectly4

 

 

0.66

%

 

0.83

%

 

1.06

%

 

1.05

%

 

1.02

%

 

 

                             

Total expenses4

 

 

0.67

%

 

0.83

%

 

1.06

%

 

1.05

%

 

1.02

%

 

 

                             

Net investment income after waiver and fees paid indirectly and before Auction Preferred Share dividends4

 

 

4.50

%

 

5.13

%

 

5.91

%

 

5.48

%

 

6.04

%

 

 

                             

Dividends paid to Preferred Shareholders

 

 

0.65

%

 

1.21

%

 

2.04

%

 

1.35

%

 

0.66

%

 

 

                             

Net investment income to Common Shareholders

 

 

3.85

%

 

3.92

%

 

3.87

%

 

4.13

%

 

5.38

%

 

 

                             

 

                       

Supplemental Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                                 

Net assets applicable to Common Shareholders, end of year (000)

 

$

266,998

 

$

267,947

 

$

266,109

 

$

272,015

 

$

286,129

 

 

 

                             

Preferred Shares outstanding at liquidation preference, end of year (000)

 

 

 

$

65,000

 

$

170,400

 

$

170,400

 

$

170,400

 

 

 

                             

Portfolio turnover

 

 

 

 

 

 

1

%

 

 

 

1

%

 

 

                             

Asset coverage per Preferred Share, end of year

 

 

 

$

128,071

 

$

64,062

 

$

64,924

 

$

66,987

 

 

 

                             

 

 

1

Based on average shares outstanding.

2

Amount is less than $(0.01) per share.

3

Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Total investment returns exclude the effects of sales charges.

4

Do not reflect the effect of dividends to Preferred Shareholders.


 

 

 

 

See Notes to Financial Statements.

 

 

 

 

 

36

ANNUAL REPORT

DECEMBER 31, 2008

 



 

 


Financial Highlights

BlackRock Municipal 2018 Term Trust (BPK)


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31,

 

 

 

 

 

2008

 

2007

 

2006

 

2005

 

2004

 

                       

Per Share Operating Performance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                                 

Net asset value, beginning of year

 

$

15.06

 

$

15.97

 

$

15.71

 

$

15.81

 

$

15.53

 

 

 

                             

Net investment income

 

 

1.12

1

 

1.17

 

 

1.15

 

 

1.19

 

 

1.21

 

Net realized and unrealized gain (loss)

 

 

(3.35

)

 

(0.83

)

 

0.31

 

 

(0.25

)

 

(0.05

)

Dividends and distributions to Preferred Shareholders from net investment income

 

 

(0.29

)

 

(0.32

)

 

(0.29

)

 

(0.20

)

 

(0.10

)

 

 

                             

Net increase (decrease) from investment operations

 

 

(2.52

)

 

0.02

 

 

1.17

 

 

0.74

 

 

1.06

 

 

 

                             

Dividends to Common Shareholders from net investment income

 

 

(0.91

)

 

(0.93

)

 

(0.91

)

 

(0.84

)

 

(0.78

)

 

 

                             

Net asset value, end of year

 

$

11.63

 

$

15.06

 

$

15.97

 

$

15.71

 

$

15.81

 

 

 

                             

Market price, end of year

 

$

12.97

 

$

15.22

 

$

17.01

 

$

15.71

 

$

15.16

 

 

 

                             

 

                       

Total Investment Return2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                                 

Based on net asset value

 

 

(17.96

)%

 

(0.10

)%

 

7.46

%

 

4.86

%

 

7.30

%

 

 

                             

Based on market price

 

 

(9.47

)%

 

(5.21

)%

 

14.46

%

 

9.35

%

 

11.27

%

 

 

                             

 

                       

Ratios Based on Average Net Assets Applicable to Common Shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                                 

Total expenses after waiver and fees paid indirectly and excluding interest expense and fees3,4

 

 

0.91

%

 

0.89

%

 

0.90

%

 

0.91

%

 

0.91

%

 

 

                             

Total expenses after waiver and fees paid indirectly4

 

 

0.93

%

 

0.89

%

 

0.90

%

 

0.91

%

 

0.91

%

 

 

                             

Total expenses after waiver and before fees paid indirectly4

 

 

0.93

%

 

0.89

%

 

0.91

%

 

0.91

%

 

0.91

%

 

 

                             

Total expenses4

 

 

0.94

%

 

0.89

%

 

0.91

%

 

0.91

%

 

0.91

%

 

 

                             

Net investment income after waiver and fees paid indirectly and before Auction Preferred Shares dividends4

 

 

8.04

%

 

7.57

%

 

7.27

%

 

7.53

%

 

7.83

%

 

 

                             

Dividends paid to Preferred Shareholders

 

 

2.10

%

 

2.08

%

 

1.83

%

 

1.27

%

 

0.64

%

 

 

                             

Net investment income to Common Shareholders

 

 

5.94

%

 

5.49

%

 

5.44

%

 

6.26

%

 

7.19

%

 

 

                             

 

                       

Supplemental Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                                 

Net assets applicable to Common Shareholders, end of year (000)

 

$

185,049

 

$

239,609

 

$

254,117

 

$

249,890

 

$

251,560

 

 

 

                             

Preferred Shares outstanding at liquidation preference, end of year (000)

 

$

133,850

 

$

137,600

 

$

137,600

 

$

137,600

 

$

137,600

 

 

 

                             

Portfolio turnover

 

 

4

%

 

7

%

 

7

%

 

15

%

 

31

%

 

 

                             

Asset coverage per Preferred Share, end of year

 

$

59,571

 

$

68,548

 

$

71,179

 

$

70,407

 

$

70,736

 

 

 

                             

 

 

1

Based on average shares outstanding.

2

Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Total investment returns exclude the effects of sales charges.

3

Interest expense and fees relate to tender option bond trusts. See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to tender option bond trusts.

4

Do not reflect the effect of dividends to Preferred Shareholders.


 

 

 

 

See Notes to Financial Statements.

 

 

 

 

 

 

ANNUAL REPORT

DECEMBER 31, 2008

37



 

 


Financial Highlights

BlackRock Municipal 2020 Term Trust (BKK)


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31,

 

 

 

 

 

 

2008

 

2007

 

2006

 

2005

 

2004

 

Per Share Operating Performance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net asset value, beginning of year

 

$

14.79

 

$

15.77

 

$

15.28

 

$

14.85

 

$

14.51

 

 

 

                             

Net investment income

 

 

1.09

1

 

1.12

 

 

1.10

 

 

1.11

 

 

1.10

 

Net realized and unrealized gain (loss)

 

 

(4.28

)

 

(0.97

)

 

0.48

 

 

0.39

 

 

0.28

 

Dividends and distributions to Preferred Shareholders from net investment income

 

 

(0.30

)

 

(0.33

)

 

(0.29

)

 

(0.20

)

 

(0.10

)

 

 

                             

Net increase (decrease) from investment operations

 

 

(3.49

)

 

(0.18

)

 

1.29

 

 

1.30

 

 

1.28

 

 

 

                             

Dividends to Common Shareholders from net investment income

 

 

(0.75

)

 

(0.80

)

 

(0.80

)

 

(0.87

)

 

(0.94

)

 

 

                             

Net asset value, end of year

 

$

10.55

 

$

14.79

 

$

15.77

 

$

15.28

 

$

14.85

 

 

 

                             

Market price, end of year

 

$

10.57

 

$

13.60

 

$

15.77

 

$

14.00

 

$

15.02

 

 

 

                             

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Investment Return2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Based on net asset value

 

 

(24.57

)%

 

(1.16

)%

 

8.72

%

 

8.98

%

 

8.98

%

 

 

                             

Based on market price

 

 

(17.81

)%

 

(9.11

)%

 

18.66

%

 

(1.28

)%

 

6.63

%

 

 

                             

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ratios Based on Average Net Assets Applicable to Common Shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total expenses after waiver and fees paid indirectly and excluding interest expense and fees3,4

 

 

1.10

%

 

1.05

%

 

1.07

%

 

1.08

%

 

1.09

%

 

 

                             

Total expenses after waiver and fees paid indirectly4

 

 

1.12

%

 

1.05

%

 

1.07

%

 

1.08

%

 

1.09

%

 

 

                             

Total expenses after waiver and before fees paid indirectly4

 

 

1.12

%

 

1.06

%

 

1.07

%

 

1.09

%

 

1.09

%

 

 

                             

Total expenses4

 

 

1.12

%

 

1.06

%

 

1.07

%

 

1.09

%

 

1.09

%

 

 

                             

Net investment income

 

 

8.01

%

 

7.27

%

 

7.09

%

 

7.27

%

 

7.67

%

 

 

                             

Dividends to Preferred Shareholders

 

 

2.18

%

 

2.14

%

 

1.89

%

 

1.34

%

 

0.72

%

 

 

                             

Net investment to Common Shareholders

 

 

5.83

%

 

5.13

%

 

5.20

%

 

5.93

%

 

6.95

%

 

 

                             

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net assets applicable to Common Shares, end of year (000)

 

$

213,472

 

$

299,372

 

$

319,131

 

$

309,146

 

$

300,518

 

 

 

                             

Preferred Shares outstanding at liquidation preference, end of year (000)

 

$

173,850

 

$

177,600

 

$

177,600

 

$

177,600

 

$

177,600

 

 

 

                             

Portfolio turnover

 

 

5

%

 

4

%

 

12

%

 

14

%

 

51

%

 

 

                             

Asset coverage per Preferred Share, end of year

 

$

55,703

 

$

67,154

 

$

69,937

 

$

68,527

 

$

67,307

 

 

 

                             

 

 

1

Based on average shares outstanding.

2

Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Total investment returns exclude the effects of sales charges.

3

Interest expense and fees relate to tender option bond trusts. See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to tender option bond trusts.

4

Do not reflect the effect of dividends to Preferred Shareholders.


 

 

 

 

See Notes to Financial Statements.

 

 

 

 

 

 

38

ANNUAL REPORT

DECEMBER 31, 2008

 



 

 


Financial Highlights

BlackRock Strategic Municipal Trust (BSD)


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31,

 

 

 

 

 

 

2008

 

2007

 

2006

 

2005

 

2004

 

                       

Per Share Operating Performance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net asset value, beginning of year

 

$

14.27

 

$

15.64

 

$

15.68

 

$

15.70

 

$

15.91

 

 

 

                             

Net investment income

 

 

1.02

1

 

1.07

 

 

1.07

 

 

1.14

 

 

1.26

 

Net realized and unrealized gain (loss)

 

 

(4.32

)

 

(1.10

)

 

0.28

 

 

0.07

 

 

(0.41

)

Dividends and distributions to Preferred Shareholders from net investment income

 

 

(0.26

)

 

(0.32

)

 

(0.29

)

 

(0.20

)

 

(0.10

)

 

 

                             

Net increase (decrease) from investment operations

 

 

(3.56

)

 

(0.35

)

 

1.06

 

 

1.01

 

 

0.75

 

 

 

                             

Dividends to Common Shareholders from net investment income

 

 

(0.81

)

 

(1.02

)

 

(1.10

)

 

(1.03

)

 

(0.96

)

 

 

                             

Net asset value, end of year

 

$

9.90

 

$

14.27

 

$

15.64

 

$

15.68

 

$

15.70

 

 

 

                             

Market price, end of year

 

$

8.19

 

$

13.96

 

$

18.69

 

$

17.14

 

$

14.52

 

 

 

                             

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Investment Return2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Based on net asset value

 

 

(25.70

)%

 

(2.82

)%

 

6.38

%

 

6.67

%

 

5.41

%

 

 

                             

Based on market price

 

 

(37.17

)%

 

(20.44

)%

 

16.29

%

 

26.08

%

 

5.59

%

 

 

                             

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ratios Based on Average Net Assets Applicable to Common Shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total expenses after waiver and fees paid indirectly and excluding interest expense and fees3,4

 

 

1.23

%

 

1.13

%

 

1.04

%

 

0.97

%

 

0.89

%

 

 

                             

Total expenses after waiver and fees paid indirectly4

 

 

1.45

%

 

1.13

%

 

1.04

%

 

0.97

%

 

0.89

%

 

 

                             

Total expenses after waiver and before fees paid indirectly4

 

 

1.45

%

 

1.14

%

 

1.07

%

 

0.98

%

 

0.90

%

 

 

                             

Total expenses4

 

 

1.54

%

 

1.30

%

 

1.31

%

 

1.29

%

 

1.28

%

 

 

                             

Net investment income

 

 

8.04

%

 

7.12

%

 

6.89

%

 

7.23

%

 

8.04

%

 

 

                             

Dividends to Preferred Shareholders

 

 

2.02

%

 

2.12

%

 

1.83

%

 

1.26

%

 

0.62

%

 

 

                             

Net investment income to Common Shareholders

 

 

6.02

%

 

5.00

%

 

5.06

%

 

5.97

%

 

7.42

%

 

 

                             

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net assets applicable to Common Shares, end of year (000)

 

$

72,188

 

$

103,882

 

$

113,697

 

$

113,684

 

$

113,686

 

 

 

                             

Preferred Shares outstanding at liquidation preference, end of year (000)

 

$

47,750

 

$

62,000

 

$

62,000

 

$

62,000

 

$

62,000

 

 

 

                             

Portfolio turnover

 

 

17

%

 

21

%

 

71

%

 

96

%

 

23

%

 

 

                             

Asset coverage per Preferred Share, end of year

 

$

62,803

 

$

66,904

 

$

78,856

 

$

70,847

 

$

70,844

 

 

 

                             

 

 

1

Based on average shares outstanding.

2

Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Total investment returns exclude the effects of sales charges.

3

Interest expense and fees relate to tender option bond trusts. See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to tender option bond trusts.

4

Do not reflect the effect of dividends to Preferred Shareholders.


 

 

 

 

See Notes to Financial Statements.

 

 

 

 

 

 

ANNUAL REPORT

DECEMBER 31, 2008

39



 

 


Financial Highlights

BlackRock California Municipal 2018 Term Trust (BJZ)


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31,

 

 

 

   

 

 

2008

 

2007

 

2006

 

2005

 

2004

 

Per Share Operating Performance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net asset value, beginning of year

 

$

14.82

 

$

15.26

 

$

15.21

 

$

15.17

 

$

14.77

 

 

 

                             

Net investment income

 

 

1.05

1

 

1.04

 

 

1.02

 

 

0.97

 

 

1.00

 

Net realized and unrealized gain (loss)

 

 

(2.90

)

 

(0.44

)

 

0.03

 

 

(0.01

)

 

0.21

 

Dividends to Preferred Shareholders from net investment income

 

 

(0.29

)

 

(0.29

)

 

(0.26

)

 

(0.18

)

 

(0.08

)

 

 

                             

Net increase (decrease) from investment operations

 

 

(2.14

)

 

0.31

 

 

0.79

 

 

0.78

 

 

1.13

 

 

 

                             

Dividends to Common Shareholders from net investment income

 

 

(0.74

)

 

(0.75

)

 

(0.74

)

 

(0.74

)

 

(0.73

)

 

 

                             

Net asset value, end of year

 

$

11.94

 

$

14.82

 

$

15.26

 

$

15.21

 

$

15.17

 

 

 

                             

Market price, end of year

 

$

11.60

 

$

15.40

 

$

15.94

 

$

15.19

 

$

13.89

 

 

 

                             

 

Total Investment Return2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Based on net asset value

 

 

(15.18

)%

 

1.95

%

 

5.19

%

 

5.30

%

 

8.20

%

 

 

                             

Based on market price

 

 

(20.70

)%

 

1.42

%

 

10.03

%

 

14.85

%

 

9.04

%

 

 

                             

 

Ratios Based on Average Net Assets Applicable to Common Shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total expenses after waiver and fees paid indirectly3

 

 

0.96

%

 

0.94

%

 

0.97

%

 

0.99

%

 

1.01

%

 

 

                             

Total expenses after waiver and before fees paid indirectly3

 

 

0.96

%

 

0.94

%

 

0.99

%

 

1.01

%

 

1.02

%

 

 

                             

Total expenses3

 

 

0.97

%

 

0.97

%

 

0.99

%

 

1.01

%

 

1.02

%

 

 

                             

Net investment income after waiver and fees paid indirectly and before dividends to Preferred Shareholders3

 

 

7.43

%

 

7.05

%

 

6.69

%

 

6.39

%

 

6.77

%

 

 

                             

Dividends to Preferred Shareholders

 

 

2.07

%

 

1.96

%

 

1.73

%

 

1.17

%

 

0.56

%

 

 

                             

Net investment income to Common Shareholders

 

 

5.36

%

 

5.09

%

 

4.96

%

 

5.22

%

 

6.21

%

 

 

                             

 

Supplemental Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net assets applicable to Common Shares, end of year (000)

 

$

76,795

 

$

95,336

 

$

98,165

 

$

97,824

 

$

97,590

 

 

 

                             

Preferred Shares outstanding at liquidation preference, end of year (000)

 

$

55,525

 

$

55,525

 

$

55,525

 

$

55,525

 

$

55,525

 

 

 

                             

Portfolio turnover

 

 

1

%

 

7

%

 

 

 

9

%

 

9

%

 

 

                             

Asset coverage per Preferred Share, end of year

 

$

59,580

 

$

67,935

 

$

69,214

 

$

69,056

 

$

68,945

 

 

 

                             

 

 

1

Based on average shares outstanding.

2

Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Total investment returns exclude the effects of sales charges.

3

Do not reflect the effect of dividends to Preferred Shareholders.


 

 

 

 

See Notes to Financial Statements.

 

 

 

 

 

40

ANNUAL REPORT

DECEMBER 31, 2008

 



 

 


Financial Highlights

BlackRock New York Municipal 2018 Term Trust (BLH)


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31,

 

 

 

 

 

 

2008

 

2007

 

2006

 

2005

 

2004

 

Per Share Operating Performance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net asset value, beginning of year

 

$

15.98

 

$

16.33

 

$

16.11

 

$

15.77

 

$

15.53

 

 

 

                             

Net investment income

 

 

1.08

1

 

1.18

 

 

1.11

 

 

1.08

 

 

1.07

 

Net realized and unrealized gain (loss)

 

 

(2.16

)

 

(0.45

)

 

0.11

 

 

0.17

 

 

 

Dividends to Preferred Shareholders from net investment income

 

 

(0.29

)

 

(0.28

)

 

(0.26

)

 

(0.17

)

 

(0.09

)

 

 

                             

Net increase (decrease) from investment operations

 

 

(1.37

)

 

0.45

 

 

0.96

 

 

1.08

 

 

0.98

 

 

 

                             

Dividends to Common Shareholders from net investment income

 

 

(0.83

)

 

(0.80

)

 

(0.74

)

 

(0.74

)

 

(0.74

)

 

 

                             

Net asset value, end of year

 

$

13.78

 

$

15.98

 

$

16.33

 

$

16.11

 

$

15.77

 

 

 

                             

Market price, end of year

 

$

13.97

 

$

16.18

 

$

15.62

 

$

15.15

 

$

14.82

 

 

 

                             

 

Total Investment Return2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Based on net asset value

 

 

(9.12

)%

 

2.89

%

 

6.26

%

 

7.21

%

 

6.71

%

 

 

                             

Based on market price

 

 

(9.00

)%

 

8.92

%

 

8.08

%

 

7.28

%

 

5.94

%

 

 

                             

 

Ratios Based on Average Net Assets Applicable to Common Shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total expenses after waiver and fees paid indirectly3

 

 

1.02

%

 

1.01

%

 

1.04

%

 

1.06

%

 

1.11

%

 

 

                             

Total expenses after waiver and before fees paid indirectly3

 

 

1.02

%

 

1.02

%

 

1.07

%

 

1.08

%

 

1.12

%

 

 

                             

Total expenses3

 

 

1.05

%

 

1.02

%

 

1.07

%

 

1.08

%

 

1.12

%

 

 

                             

Net investment income

 

 

7.06

%

 

7.34

%

 

6.84

%

 

6.73

%

 

6.91

%

 

 

                             

Dividends to Preferred Shareholders

 

 

1.88

%

 

1.72

%

 

1.58

%

 

1.06

%

 

0.57

%

 

 

                             

Net investment income to Common Shareholders

 

 

5.18

%

 

5.62

%

 

5.26

%

 

5.67

%

 

6.34

%

 

 

                             

 

Supplemental Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net assets applicable to Common Shares, end of year (000)

 

$

50,058

 

$

58,043

 

$

59,313

 

$

58,525

 

$

57,303

 

 

 

                             

Preferred Shares outstanding at liquidation preference, end of year (000)

 

$

31,400

 

$

31,400

 

$

31,400

 

$

31,400

 

$

31,400

 

 

 

                             

Portfolio turnover

 

 

6

%

 

6

%

 

6

%

 

12

%

 

 

 

 

                             

Asset coverage per Preferred Share, end of year

 

$

64,857

 

$

71,230

 

$

72,237

 

$

71,603

 

$

70,626

 

 

 

                             

 

 

1

Based on average shares outstanding.

2

Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Total investment returns exclude the effects of sales charges.

3

Do not reflect the effect of dividends to Preferred Shareholders.


 

 

 

 

See Notes to Financial Statements.

 

 

 

 

 

 

ANNUAL REPORT

DECEMBER 31, 2008

41



 

 



Financial Highlights

BlackRock Pennsylvania Strategic Municipal Trust (BPS)


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31,

 

 

 

 

 

 

 

2008

 

2007

 

2006

 

2005

 

2004

 

Per Share Operating Performance

Net asset value, beginning of year

 

$

14.12

 

$

15.01

 

$

15.27

 

$

15.81

 

$

16.09

 

 

 

                             

Net investment income

 

 

0.89

1

 

0.99

 

 

1.02

 

 

0.97

 

 

1.07

 

Net realized and unrealized gain (loss)

 

 

(3.36

)

 

(0.74

)

 

(0.09

)

 

(0.42

)

 

(0.37

)

Dividends to Preferred Shareholders from net investment income

 

 

(0.26

)

 

(0.31

)

 

(0.28

)

 

(0.19

)

 

(0.09

)

 

 

                             

Net increase (decrease) from investment operations

 

 

(2.73

)

 

(0.06

)

 

0.65

 

 

0.36

 

 

0.61

 

 

 

                             

Dividends to Common Shareholders from net investment income

 

 

(0.62

)

 

(0.83

)

 

(0.91

)

 

(0.90

)

 

(0.89

)

 

 

                             

Net asset value, end of year

 

$

10.77

 

$

14.12

 

$

15.01

 

$

15.27

 

$

15.81

 

 

 

                             

Market price, end of year

 

$

8.42

 

$

13.55

 

$

17.43

 

$

15.85

 

$

15.70

 

 

 

                             

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Investment Return2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Based on net asset value

 

 

(19.63

)%

 

(0.82

)%

 

4.09

%

 

2.39

%

 

4.21

%

 

 

                             

Based on market price

 

 

(34.53

)%

 

(18.04

)%

 

16.45

%

 

7.02

%

 

10.12

%

 

 

                             

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ratios Based on Average Net Assets Applicable to Common Shares

Total expenses after waiver and fees paid indirectly and excluding interest expense and fees3,4

 

 

1.42

%

 

1.35

%

 

1.23

%

 

1.13

%

 

1.03

%

 

 

                             

Total expenses after waiver and fees paid indirectly4

 

 

1.45

%

 

1.35

%

 

1.23

%

 

1.13

%

 

1.03

%

 

 

                             

Total expenses after waiver and before fees paid indirectly4

 

 

1.45

%

 

1.37

%

 

1.28

%

 

1.21

%

 

1.08

%

 

 

                             

Total expenses4

 

 

1.61

%

 

1.55

%

 

1.51

%

 

1.52

%

 

1.47

%

 

 

                             

Net investment income4

 

 

6.82

%

 

6.82

%

 

6.73

%

 

6.28

%

 

6.74

%

 

 

                             

Dividends to Preferred Shareholders

 

 

2.17

%

 

2.10

%

 

1.85

%

 

1.22

%

 

0.59

%

 

 

                             

Net investment income to Common Shareholders

 

 

4.65

%

 

4.72

%

 

4.88

%

 

5.06

%

 

6.15

%

 

 

                             

 

Supplemental Data

Net assets applicable to Common Shares, end of year (000)

 

$

21,799

 

$

28,560

 

$

30,306

 

$

30,801

 

$

31,857

 

 

 

                             

Preferred Shares outstanding at liquidation preference, end of year (000)

 

$

16,825

 

$

17,500

 

$

17,500

 

$

17,500

 

$

17,500

 

 

 

                             

Portfolio turnover

 

 

45

%

 

41

%

 

7

%

 

8

%

 

5

%

 

 

                             

Asset coverage per Preferred Share, end of year

 

$

57,399

 

$

65,817

 

$

68,305

 

$

69,008

 

$

70,513

 

 

 

                             

 

 

1

Based on average shares outstanding.

2

Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Total investment returns exclude the effects of sales charges.

3

Interest expense and fees relate to tender option bond trusts. See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to tender option bond trusts.

4

Do not reflect the effect of dividends to Preferred Shareholders.


 

 

 

 

See Notes to Financial Statements.

 

 

 

 

 

42

ANNUAL REPORT

DECEMBER 31, 2008

 



 


Notes to Financial Statements

1. Organization and Significant Accounting Policies:

BlackRock Insured Municipal Term Trust Inc. (“Insured Municipal”), is organized as a Maryland corporation. BlackRock Municipal 2018 Term Trust (“Municipal 2018”), BlackRock Municipal 2020 Term Trust (“Municipal 2020”), BlackRock Strategic Municipal Trust (“Strategic Municipal”), BlackRock California Municipal 2018 Term Trust (“California 2018”), BlackRock New York Municipal 2018 Term Trust (“New York 2018”) and BlackRock Pennsylvania Strategic Municipal Trust (“Pennsylvania Strategic”) are organized as Delaware statutory trusts. Insured Municipal, Municipal 2018, Municipal 2020 and Strategic Municipal are registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as diversified closed-end management investment companies. California 2018, New York 2018 and Pennsylvania Strategic are registered as non-diversified closed-end management investment companies under the 1940 Act. Municipal 2018, California 2018 and New York 2018 are herein referred to as the 2018 Trusts. Municipal 2020 is herein referred to as the 2020 Trust. Strategic Municipal and Pennsylvania Strategic are herein referred to as the Strategic Trusts. Insured Municipal, the 2018 Trusts, the 2020 Trusts and the Strategic Trusts are referred herein collectively as the “Trusts” or individually as a “Trust”. The Trusts’ financial statements are prepared in conformity with accounting principles generally accepted in the United States of America, which may require the use of management accruals and estimates. Actual results may differ from these estimates. The Trusts determine and make available for publication the net asset value of their Common Shares on a daily basis.

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

Valuation of Investments: Municipal investments (including commitments to purchase such investments on a “when-issued” basis) are valued on the basis of prices provided by dealers or pricing services selected under the supervision of each Trust’s Board of Directors/Trustees (the “Board”). In determining the value of a particular investment, pricing services may use certain information with respect to transactions in such investments, quotations from dealers, pricing matrixes, market transactions in comparable investments and information with respect to various relationships between investments. Financial futures contracts traded on exchanges are valued at their last sale price. Swap agreements are valued by utilizing quotes received daily by the Trusts’ pricing service or through brokers, which are derived using daily swap curves and trades of underlying securities. Short-term securities with maturities less than 60 days are valued at amortized cost, which approximates fair value. Investments in open-end investment companies are valued at net asset value each business day.

In the event that application of these methods of valuation results in a price for an investment which is deemed not to be representative of the market value of such investment, the investment will be valued by a method approved by each Trust’s Board as reflecting fair value (“Fair Value Assets”). When determining the price for Fair Value Assets, the investment advisor and/or sub-advisor seeks to determine the price that each Trust might reasonably expect to receive from the current sale of that asset in an arm’slength transaction. Fair value determinations shall be based upon all available factors that the investment advisor and/or sub-advisor deems relevant. The pricing of all Fair Value Assets is subsequently reported to the Board or a committee thereof.

Derivative Financial Instruments: Each Trust may engage in various portfolio investment strategies both to increase the return of the Trust and to hedge, or protect, its exposure to interest rate movements and movements in the securities markets. Losses may arise if the value of the contract decreases due to an unfavorable change in the price of the underlying security or if the counterparty does not perform under the contract.

 

 

Financial Futures Contracts: Each Trust may purchase or sell financial futures contracts and options on such futures contracts for investment purposes or to manage its interest rate risk. Futures are contracts for delayed delivery of securities at a specific future date and at a specific price or yield. Pursuant to the contract, the Trust agrees to receive from, or pay to, the broker an amount of cash equal to the daily fluctuation in value of the contract. Such receipts or payments are known as margin variation and are recognized by the Trust as unrealized gains or losses. When the contract is closed, the Trust records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. The use of futures transactions involves the risk of an imperfect correlation in the movements in the price of futures contracts, interest rates and the underlying assets, and the possible inability of counterparties to meet the terms of their contracts.

 

 

Forward Interest Rate Swaps: The Trusts may enter into forward interest rate swaps for investment purposes. The Trusts may enter into swap agreements, in which the Trust and a counterparty agree to make periodic net payments on a specified notional amount. In a forward interest rate swap, a Trust and the counterparty agree to make periodic net payments on a specified notional contract amount, commencing on a specified future effective date, unless terminated earlier. These periodic payments received or made by the Trusts are recorded in the accompanying Statements of Operations as realized gains or losses, respectively. Swaps are marked-to-market daily and changes in value are recorded as unrealized appreciation (depreciation). When the swap is terminated, the Trusts will record a realized gain or loss equal to the difference between the proceeds from (or cost of) the closing transaction and the Trusts’ basis in the contract, if any. The Trusts generally intend to close each forward interest rate swap before the effective date specified in the agreement and therefore avoid entering into the interest rate swap underlying each forward interest rate swap. Swap transactions involve, to varying degrees, elements of credit and market risk in excess of the amounts recognized on the Statements of Assets and Liabilities. Such risks involve the possibility that there will be no liquid market for these agreements, that the counterparty to the agreements may default on its obligation to perform or disagree as to the meaning of the contractual terms in the agreements, and that there may be unfavorable changes in interest rates and/or market values associated with these transactions.

 

 

Forward Commitments and When-Issued Delayed Delivery Securities: The Trusts may purchase securities on a when-issued basis and may purchase


 

 

 

 

 

 

 

 

 

ANNUAL REPORT

DECEMBER 31, 2008

43



 


Notes to Financial Statements (continued)

or sell securities on a forward commitment basis. Settlement of such transactions normally occurs within a month or more after the purchase or sale commitment is made. The Trusts may purchase securities under such conditions only with the intention of actually acquiring them, but may enter into a separate agreement to sell the securities before the settlement date. Since the value of securities purchased may fluctuate prior to settlement, the Trusts may be required to pay more at settlement than the security is worth. In addition, the purchaser is not entitled to any of the interest earned prior to settlement. When purchasing a security on a delayed-delivery basis, the Trusts assume the rights and risks of ownership of the security, including the risk of price and yield fluctuations.

Municipal Bonds Transferred to Tender Option Bond Trusts: The Trusts leverage their assets through the use of tender option bond trusts (“TOBs”). A TOB is established by a third party sponsor forming a special purpose entity, into which one or more funds, or an agent on behalf of the funds, transfers municipal securities. Other funds managed by the investment advisor may also contribute municipal securities to a TOB into which the Trust has contributed securities. A TOB typically issues two classes of beneficial interests: short-term floating rate certificates, which are sold to third party investors, and residual certificates (“TOB Residuals”), which are generally issued to the participating funds that made the transfer. The TOB Residuals held by the Trusts include the right of the Trusts (1) to cause the holders of a proportional share of the floating rate certificates to tender their certificates at par, and (2) to transfer, within seven days, a corresponding share of the municipal securities from the TOB to the Trusts. The TOB may also be terminated without the consent of the Trusts upon the occurrence of certain events as defined in the TOB agreements. Such termination events may include the bankruptcy or default of the municipal security, a substantial downgrade in credit quality of the municipal security, the inability of the TOB to obtain quarterly or annual renewal of the liquidity support agreement, a substantial decline in market value of the municipal security or the inability to remarket the short-term floating rate certificates to third party investors.

The cash received by the TOB from the sale of the short-term floating rate certificates, less transaction expenses, is paid to the Trust, which typically invests the cash in additional municipal securities. The Trusts’ transfer of the municipal securities to a TOB is accounted for as a secured borrowing, therefore the municipal securities deposited into a TOB are presented in the Trust’s Schedule of Investments and the proceeds from the issuance of the short-term floating rate certificates are reported as a liability for Trust Certificates.

Interest income from the underlying securities is recorded by the Trusts on an accrual basis. Interest expense incurred on the secured borrowing and other expenses related to remarketing, administration and trustee services to a TOB are reported as expenses of the Trusts. The floating rate certificates have interest rates that generally reset weekly and their holders have the option to tender certificates to the TOB for redemption at par at each reset date. At December 31, 2008, the aggregate value of the underlying municipal securities transferred to TOBs, the related liability for trust certificates and the range of interest rates on the liability for trust certificates were as follows:

 

 

 

 

 

 

 

 

 

 

 

               

 

 

Underlying
Municipal
Securities
Transferred
to TOBs

 

Liability for
Trust
Certificates

 

Range of
Interest
Rates

 

               

Municipal 2018

 

$

5,216,800

 

$

3,750,000

 

 

2.397

%

Municipal 2020

 

$

5,216,800

 

$

3,750,000

 

 

2.397

%

Strategic Municipal

 

$

13,315,695

 

$

7,763,958

 

 

2.08%-2.815

%

                     

Financial transactions executed through TOBs generally will underperform the market for fixed rate municipal bonds when interest rates rise, but tend to outperform the market for fixed rate bonds when short-term interest rates decline or remain relatively stable. Should interest rates rise, the Trusts’ investment in TOBs may adversely affect the Trusts’ investment income and distributions to shareholders. Also, fluctuations in the market value of municipal securities deposited into the TOB may adversely affect the Trusts’ net asset value per share.

Zero-Coupon Bonds: The Trusts may invest in zero-coupon bonds, which are normally issued at a significant discount from face value and do not provide for periodic interest payments. Zero-coupon bonds may experience greater volatility in market value than similar maturity debt obligations which provide for regular interest payments.

Segregation and Collateralization: In cases in which the 1940 Act and the interpretive positions of the Securities and Exchange Commission (“SEC”) require that each Trust segregates assets in connection with certain investments (e.g., swaps or financial futures contracts), each Trust will, consistent with certain interpretive letters issued by the SEC, designate on their books and records cash or other liquid securities having a market value at least equal to the amount that would otherwise be required to be physically segregated. Furthermore, based on requirements and agreements with certain exchanges and third party broker-dealers, the Trusts may also be required to deliver or deposit securities as collateral for certain investments (e.g., financial futures contracts and swaps).

Investment Transactions and Investment Income: Investment transactions are recorded on the dates the transactions are entered into (the trade dates). Realized gains and losses on security transactions are determined on the identified cost basis. Dividend income is recorded on the ex-dividend dates. Interest income is recognized on the accrual method. Each Trust amortizes all premiums and discounts on debt securities.

Dividends and Distributions: Dividends from net investment income are declared daily and paid monthly. Distributions of capital gains are recorded on the ex-dividend dates. Dividends and distributions to holders of Preferred Shares are accrued and determined as described in Note 4.

Income Taxes: It is each Trust’s policy to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its taxable income to its shareholders. Therefore, no federal income tax provision is required.

Each Trust files US federal and various state and local tax returns. No income tax returns are currently under examination. The statute of limitations on the Trusts’ US federal tax returns remains open for the tax years ended

 

 

 

 

 

 

 

 

44

ANNUAL REPORT

DECEMBER 31, 2008

 



 


Notes to Financial Statements (continued)

December 31, 2005 through December 31, 2007 or June 30, 2005 through June 30, 2008 depending on the tax year end of the Trust. The statutes of limitations on the Trusts’ state and local tax returns may remain open for an additional year depending upon the jurisdiction.

Recent Accounting Pronouncement: In March 2008, Statement of Financial Accounting Standards No. 161, “Disclosures about Derivative Instruments and Hedging Activities — an amendment of FASB Statement No. 133” (“FAS 161”), was issued. FAS 161 is intended to improve financial reporting for derivative instruments by requiring enhanced disclosure that enables investors to understand how and why an entity uses derivatives, how derivatives are accounted for, and how derivative instruments affect an entity’s results of operations and financial position. FAS 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008.The impact on the Trusts’ financial statement disclosures, if any, is currently being assessed.

Deferred Compensation and BlackRock Closed-End Share Equivalent Investment Plan: Under the deferred compensation plan approved by each of the Trusts’ Board, non-interested Directors/Trustees (“Independent Trustees”) defer a portion of their annual complex-wide compensation. Deferred amounts earn an approximate return as though equivalent dollar amounts had been invested in common shares of other certain BlackRock Closed-End Funds selected by the Independent Trustees. This has approximately the same economic effect for the Independent Trustees as if the Independent Trustees had invested the deferred amounts directly in the other certain BlackRock Closed-End Funds.

The deferred compensation plan is not funded and obligations thereunder represent general unsecured claims against the general assets of each Trust. Each Trust may, however, elect to invest in common shares of other certain BlackRock Closed-End Funds selected by the Independent Trustees in order to match its deferred compensation obligations. Investments to cover each Trust’s deferred compensation liability are included in other assets on the Statements of Assets and Liabilities. Dividends and distributions from the BlackRock Closed-End Fund investments under the plan are included in income — affiliated on the Statements of Operations.

Other: Expenses directly related to each Trust are charged to that Trust. Other operating expenses shared by several funds are pro-rated among those funds on the basis of relative net assets or other appropriate methods.

2. Investment Advisory Agreement and Other Transactions with Affiliates:

Each Trust entered into an Investment Advisory Agreement with BlackRock Advisors, LLC (the “Advisor”), an indirect, wholly owned subsidiary of BlackRock, Inc., to provide investment advisory and administration services. Merrill Lynch & Co., Inc. (“Merrill Lynch”) and The PNC Financial Services Group, Inc. (“PNC”) are the largest stockholders of BlackRock, Inc. As of December 31, 2008, Merrill Lynch and PNC are affiliates of BlackRock, Inc.

The Advisor is responsible for the management of each Trust’s portfolio and provides the necessary personnel, facilities, equipment and certain other services necessary to the operations of each Trust. For such services, each Trust pays the Advisor a monthly fee at an annual rate of 0.35% for Insured Municipal, 0.40% for the 2018 Trusts, 0.50% for the 2020 Trust and 0.60% for the Strategic Trusts of the applicable Trust’s average weekly value of each Trust’s net assets. Average weekly net assets is the average weekly value of each Trust’s total assets minus the sum of its accrued liabilities.

The Advisor has voluntarily agreed to waive a portion of the investment advisory fee on the Strategic Trusts as a percentage of net assets including proceeds from the issuance of Preferred Shares and TOBs as follows: 0.25% for the first five years of each of the Strategic Trust’s operations from 1999 through December 31, 2004, 0.20% through December 31, 2005, 0.15% through December 31, 2006, 0.10% through December 31, 2007 and 0.05% through December 31, 2008. The following amounts are shown on the Statements of Operations as fees waived by advisor:

 

 

 

 

 

         

 

 

Fees Waived
by Advisor

 

       

Strategic Municipal Trust

 

$

76,520

 

Pennsylvania Strategic

 

 

21,848

 

         

The Advisor has agreed to waive its advisory fees by the amount of investment advisory fees each Trust pays to the Advisor indirectly through its investment in affiliated money market funds. This amount is shown on the Statements of Operations as fees waived by advisor. For the year ended December 31, 2008, the amounts were as follows:

 

 

 

 

 

         

 

 

Fees Waived
by Advisor

 

       

Insured Municipal

 

$

12,150

 

Municipal 2018

 

 

7,979

 

Municipal 2020

 

 

4,744

 

Strategic Municipal

 

 

6,589

 

California 2018

 

 

7,411

 

New York 2018

 

 

19,000

 

Pennsylvania Strategic

 

 

18,973

 

         

The Advisor has entered into a separate sub-advisory agreement with BlackRock Financial Management, Inc. (“BFM”), an affiliate of the Advisor, with respect to the 2018 Trusts, the 2020 Trust and Strategic Trusts, under which the Advisor pays BFM for services it provides, a monthly fee that is a percentage of the investment advisory fee paid by the Trusts to the Advisor.

The administration fee paid to the Advisor by Insured Municipal Trust is computed weekly and payable monthly based on an annual rate of 0.10% of the Trust’s average weekly net assets.

For the year ended December 31, 2008, the Trusts reimbursed the Advisor for certain accounting services in the following amounts, which are included in accounting services in the Statements of Operations:

 

 

 

 

 

       

 

 

Amount

 

       

Municipal 2018

 

$

5,943

 

Municipal 2020

 

 

7,445

 

Strategic Municipal

 

 

2,509

 

California 2018

 

 

2,494

 

New York 2018

 

 

1,461

 

Pennsylvania Strategic

 

 

742

 

         

 

 

 

 

 

 

 

 

 

ANNUAL REPORT

DECEMBER 31, 2008

45



 


Notes to Financial Statements (continued)

Pursuant to the terms of the custody agreement, custodian fees may be reduced by amounts calculated on uninvested cash balances (“custody credits”), which are shown on the Statements of Operations as fees paid indirectly.

Certain officers and/or directors/trustees of the Trusts are officers and/or directors of BlackRock, Inc. or its affiliates. The Trusts reimburse the Advisor for compensation paid to the Trusts’ Chief Compliance Officer.

3. Investments:

Purchases and sales of investments, excluding short-term securities, for the year ended December 31, 2008 were as follows:

 

 

 

 

 

 

 

 

           

 

 

Purchases

 

Sales

 

           

Insured Municipal

 

$

74,205

 

$

67,604,205

 

Municipal 2018

 

 

14,815,145

 

 

29,584,899

 

Municipal 2020

 

 

20,173,249

 

 

39,416,484

 

Strategic Municipal

 

 

24,434,838

 

 

36,163,343

 

California 2018

 

 

3,626,668

 

 

2,115,965

 

New York 2018

 

 

4,986,639

 

 

7,407,600

 

Pennsylvania Strategic

 

 

17,477,410

 

 

20,341,815

 

               

4. Capital Share Transactions

Common Shares

There are 200 million of $0.01 par value common shares authorized for Insured Municipal. There are an unlimited number of $0.001 par value common shares authorized for each of the 2018 Trusts, 2020 Trusts and Strategic Trusts. Each Trust may classify or reclassify any unissued common shares into one or more series of Preferred Shares. At December 31, 2008, the common shares owned by affiliates of the Advisor of Municipal 2020 was 8,028.

During the years ended December 31, 2008 and December 31, 2007 the shares issued and outstanding increased by the following amounts, as a result of dividend reinvestments:

 

 

 

 

 

 

 

 

           

 

 

December 31, 2008

 

December 31, 2007

 

           

Strategic Municipal

 

 

6,166

 

 

14,017

 

Pennsylvania Strategic

 

 

1,436

 

 

2,582

 

               

Preferred Shares

The Preferred Shares are redeemable at the option of each Trust, in whole or in part, on any dividend payment date at $25,000 per share plus any accumulated unpaid dividends whether or not declared. The Preferred Shares are also subject to mandatory redemption at $25,000 per share plus any accumulated or unpaid dividends, whether or not declared, if certain requirements relating to the composition of the assets and liabilities of a Trust, as set forth in each Trust’s Statement of Preferences/Articles of Incorporation, are not satisfied.

The holders of Preferred Shares have voting rights equal to the holders of Common Shares (one vote per share) and will vote together with holders of Common Shares (one vote per share) as a single class. However, holders of Preferred Shares, voting as a separate class, are also entitled to elect two Trustees for each Trust. In addition, the 1940 Act requires that along with approval by shareholders that might otherwise be required, the approval of the holders of a majority of any outstanding Preferred Shares, voting separately as a class would be required to (a) adopt any plan of reorganization that would adversely affect the Preferred Shares, (b) change a Trust’s sub-classification as a closed-end investment company or change its fundamental investment restrictions or (c) change its business so as to cease to be an investment company.

The Trusts had the following series of Preferred Shares outstanding and effective yields as of December 31, 2008:

 

 

 

 

 

 

 

 

 

 

 

               

 

 

Series

 

Shares

 

Yields

 

               

Municipal 2018

 

 

W7

 

 

2,677

 

 

1.279

%

 

 

 

R7

 

 

2,677

 

 

1.279

%

                     

Municipal 2020

 

 

M7

 

 

2,318

 

 

1.721

%

 

 

 

W7

 

 

2,318

 

 

1.279

%

 

 

 

F7

 

 

2,318

 

 

1.721

%

                     

Strategic Municipal

 

 

W7

 

 

1,910

 

 

1.279

%

                     

California 2018

 

 

M7

 

 

2,221

 

 

1.721

%

                     

New York 2018

 

 

T7

 

 

1,256

 

 

1.432

%

                     

Pennsylvania Strategic

 

 

W7

 

 

673

 

 

1.279

%

                     

Dividends on seven-day Preferred Shares are cumulative at a rate which is reset every seven days based on the results of an auction. If the Preferred Shares fail to clear the auction on an auction date, the affected Trust is required to pay the maximum applicable rate on the Preferred Shares to holders of such shares for successive dividend periods until such time as the shares is successfully auctioned. The maximum applicable rate on the Preferred Shares is the higher of 110% of the AA commercial paper rate or 110% of 90% of the Kenny S&P 30-day High Grade Index rate divided by 1.00 minus the marginal tax rate. During the year ended December 31, 2008, the Preferred Shares of each Trust were successfully auctioned at each auction date until February 13, 2008. The low, high and average dividend ranges on the Preferred Shares for each Trust for the year ended December 31, 2008 were as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                   

 

 

Series

 

Low

 

High

 

Average

 

                   

Insured Municipal

 

 

M7

 

 

1.691

%

 

10.205

%

 

3.587

%

                           

Municipal 2018

 

 

W7

 

 

1.173

%

 

12.565

 

 

3.381

%

 

 

 

R7

 

 

1.142

%

 

12.261

 

 

3.394

%

                           

Municipal 2020

 

 

M7

 

 

1.097

%

 

10.205

 

 

3.426

%

 

 

 

W7

 

 

1.173

%

 

12.565

 

 

3.353

%

 

 

 

F7

 

 

1.142

%

 

11.728

 

 

3.393

%

                           

Strategic Municipal

 

 

W7

 

 

1.173

%

 

12.565

 

 

3.462

%

                           

California 2018

 

 

M7

 

 

1.097

%

 

10.205

 

 

3.319

%

                           

New York 2018

 

 

T7

 

 

1.142

%

 

11.347

 

 

3.343

%

                           

Pennsylvania Strategic

 

 

W7

 

 

1.173

%

 

12.565

 

 

3.305

%

                           

Since February 13, 2008 the Preferred Shares of each Trust failed to clear any auctions. As a result, the Preferred Share dividend rates were reset to the maximum applicable rate, which ranged from 1.097% to 12.565%. A failed auction is not an event of default for the Trusts but has a negative

 

 

 

 

 

 

 

 

46

ANNUAL REPORT

DECEMBER 31, 2008

 



 


Notes to Financial Statements (continued)

impact on the liquidity of Preferred Shares. A failed auction occurs when there are more sellers of a trust’s auction rate preferred share than buyers. It is impossible to predict how long this imbalance will last. A successful auction for each Trust’s Preferred Shares may not occur for some time, if ever, and even if liquidity does resume, holders of Preferred Shares may not have the ability to sell the Preferred Shares at their liquidation preference.

A Trust may not declare dividends or make other distributions on Common Shares or purchase any such shares if, at the time of the declaration, distribution or purchase, asset coverage with respect to the outstanding Preferred Shares would be less than 200%.

Each Trust pays commissions to certain broker-dealers at the end of each auction at an annual rate of 0.25%, calculated on the aggregate principal amount. In December 2008, commissions paid to broker-dealers on preferred shares that experienced a failed auction were reduced to 0.15% on the aggregate principal amount. The Trusts will continue to pay commissions of 0.25% on the aggregate principal amount of all shares that successfully clear their auctions. For the year ended December 31, 2008, Merrill Lynch, Pierce, Fenner & Smith Incorporated, a wholly owned subsidiary of Merrill Lynch, earned commissions as follows:

 

 

 

 

 

         

               Year Ended December 31, 2008

 

 

 

 

         

Insured Municipal

 

$

5,191

 

Municipal 2018

 

 

132,879

 

Municipal 2020

 

 

50,395

 

Strategic Municipal

 

 

9,259

 

California 2018

 

 

36,433

 

New York 2018

 

 

30,641

 

Pennsylvania Strategic

 

 

7,099

 

         

On June 2, 2008 and October 28, 2008, the Trusts announced the following redemptions of Preferred Shares at a price of $25,000 per share plus any accrued and unpaid dividends through the redemption date:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                   

 

 

Series

 

Redemption
Date

 

Shares to be
Redeemed

 

Aggregate Price

 

                   

Insured Municipal

 

 

M7

 

 

6/24/08

 

 

600

 

$

15,000,000

 

 

 

 

M7

 

 

11/18/08

 

 

2,000

 

$

50,000,000

 

                           

Municipal 2018

 

 

W7

 

 

6/26/08

 

 

75

 

$

1,875,000

 

 

 

 

R7

 

 

6/27/08

 

 

75

 

$

1,875,000

 

                           

Municipal 2020

 

 

M7

 

 

6/24/08

 

 

50

 

$

1,250,000

 

 

 

 

W7

 

 

6/26/08

 

 

50

 

$

1,250,000

 

 

 

 

F7

 

 

6/30/08

 

 

50

 

$

1,250,000

 

                           

Strategic Municipal

 

 

W7

 

 

6/26/08

 

 

570

 

$

14,250,000

 

                           

Pennsylvania Strategic

 

 

W7

 

 

6/26/08

 

 

27

 

$

675,000

 

                           

Insured Municipal had sufficient short-term securities to satisfy the redemptions. Other Trusts financed the Preferred Shares redemptions with cash received from TOBs.

Preferred Shares issued and outstanding for the year ended December 31, 2007, remained constant.

5. Income Tax information

Reclassifications: Accounting principles generally accepted in the United States of America require that certain components of net assets be adjusted to reflect permanent differences between financial and tax reporting. The following permanent differences as of December 31, 2008 attributable to the difference between book and tax amortization methods for premiums and discounts on fixed income securities, non-deductible expenses, reclassifications of distributions, tax characterization of income recognized from partnerships and grantor trusts, the classification of income and the characterization of expenses.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                           

 

 

Insured
Municipal

 

Municipal 2018

 

Municipal 2020

 

Strategic
Municipal

 

California 2018

 

New York 2018

 

                           

Paid in capital excess of par

 

$

 

$

(6,625

)

$

(1,942

)

$

(721

)

$

(1,875

)

$

(1,575

)

Undistributed net investment income

 

$

(3,671

)

$

6,625

 

$

1,942

 

$

721

 

$

1,875

 

$

1,575

 

Accumulated net realized gain (loss)

 

$

3,671

 

$

 

$

 

$

 

$

 

$

 

                                       

 

 

 

 

 

 

 

 

 

ANNUAL REPORT

DECEMBER 31, 2008

47



 


Notes to Financial Statements (continued)

The tax character of distributions paid during the years ended December 31, 2008 and December 31, 2007 were as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Insured
Municipal

 

Municipal 2018

 

Municipal 2020

 

Strategic
Municipal

 

California 2018

 

New York 2018

 

Pennsylvania
Strategic

 

 

Tax-exempt income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12/31/2008

 

$

11,803,205

 

$

18,864,773

 

$

21,045,740

 

$

7,766,914

 

$

6,547,786

 

$

4,004,952

 

$

1,818,032

 

12/31/2007

 

 

12,650,271

 

 

19,552,202

 

 

22,409,590

 

 

9,648,627

 

 

6,613,396

 

 

3,786,582

 

 

2,287,203

 

 

Ordinary income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12/31/2008

 

$

5,484

 

$

181,324

 

$

60,704

 

$

20,253

 

$

51,067

 

$

43,283

 

 

 

12/31/2007

 

 

 

 

446,905

 

 

379,967

 

 

66,740

 

 

126,161

 

 

131,993

 

 

 

 

Long-term capital gain

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12/31/2008

 

$

339,440

 

 

 

 

 

 

 

 

 

 

 

 

 

12/31/2007

 

 

296,382

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12/31/2008

 

$

12,148,129

 

$

19,046,097

 

$

21,106,444

 

$

7,787,167

 

$

6,598,853

 

$

4,048,235

 

$

1,818,032

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12/31/2007

 

 

12,946,653

 

 

19,999,107

 

 

22,789,557

 

 

9,715,367

 

 

6,739,557

 

 

3,918,575

 

 

2,287,203

 

 

 

 

As of December 31, 2008, the tax components of accumulated earnings (losses) were as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Insured
Municipal

 

Municipal 2018

 

Municipal 2020

 

Strategic
Municipal

 

California 2018

 

New York 2018

 

Pennsylvania
Strategic

 

 

Undistributed tax-exempt income

 

$

11,630,800

 

$

14,106,422

 

$

1,914,651

 

$

192,127

 

$

4,718,191

 

$

3,516,515

 

$

 

Undistributed long term gains/(capital loss carryforwards)

 

 

41,199

 

 

(14,062,262

)

 

(1,345,059

)

 

(1,690,562

)

 

(3,417,022

)

 

(1,381,717

)

 

(261,603

)

Net unrealized gains (losses)*

 

 

15,816,005

 

 

(40,645,786

)

 

(74,282,202

)

 

(29,655,896

)

 

(15,724,363

)

 

(3,561,743

)

 

(6,426,893

)

 

Total Accumulated Net Earnings (Losses)

 

$

27,488,004

 

$

(40,601,626

)

$

(73,712,610

)

$

(31,154,331

)

$

(14,423,194

)

$

(1,426,945

)

$

(6,688,496

)

 

 

 

*

The difference between book-basis and tax-basis net unrealized gains (losses) is attributable primarily to the difference between book and tax amortization methods for premiums and discounts on fixed income securities, the deferral of compensation to trustees, book/tax differences in the accrual of income on securities in default, the deferral of post-October capital losses for tax purposes, the timing and recognition of partnership income, the difference between the book and tax treatment of residual interests in tender option bond trusts, the tax deferral of losses on wash sales and other book/tax temporary differences.

For federal income tax purposes, the following Trusts had capital loss carryforwards as of their last tax year end, December 31, 2008 for Municipal 2018, California 2018 and New York 2018 and June 30, 2008 for Municipal 2020, Strategic Municipal and Pennsylvania Strategic. These amounts may be used to offset future realized capital gains, if any:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expires

 

Municipal 2018

 

Municipal 2020

 

Strategic
Municipal

 

California 2018

 

New York 2018

 

Pennsylvania
Strategic

 

 

2010

 

$

 

$

 

$

 

$

933,303

 

$

26,392

 

$

 

2011

 

 

 

 

 

 

 

 

 

 

431,368

 

 

 

2012

 

 

6,240,216

 

 

 

 

427,602

 

 

1,482,072

 

 

590,480

 

 

 

2013

 

 

 

 

408,341

 

 

1,011,077

 

 

530,943

 

 

 

 

133,646

 

2014

 

 

6,932,944

 

 

 

 

 

 

 

 

 

 

 

2015

 

 

889,102

 

 

524,725

 

 

 

 

470,704

 

 

333,477

 

 

 

2016

 

 

 

 

411,993

 

 

251,883

 

 

 

 

 

 

127,957

 

 

 

 

Total

 

$

14,062,262

 

$

1,345,059

 

$

1,690,562

 

$

3,417,022

 

$

1,381,717

 

$

261,603

 

 

 

 

 

 

 

 

 

 

 

 

48

ANNUAL REPORT

DECEMBER 31, 2008

 




 


Notes to Financial Statements (concluded)

6. Concentration, Market and Credit Risk:

Each Trust invests a substantial amount of its assets in issuers located in a single state or limited number of states. Please see the Schedules of Investments for concentrations in specific states.

Many municipalities insure repayment of their bonds, which reduces the risk of loss due to issuer default. The market value of these bonds may fluctuate for other reasons, including market perception of the value of such insurance, and there is no guarantee that the insurer will meet its obligation.

In the normal course of business, the Trusts invest in securities and enter into transactions where risks exist due to fluctuations in the market (market risk) or failure of the issuer of a security to meet all its obligations (credit risk). The value of securities held by the Trusts may decline in response to certain events, including those directly involving the companies whose securities are owned by the Trusts; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency and interest rate and price fluctuations. Similar to credit risk, the Trusts may be exposed to counterparty risk, or the risk that an entity with which the Trusts have unsettled or open transactions may default. Financial assets, which potentially expose the Trusts to credit and counter-party risks, consist principally of investments and cash due from counterparties. The extent of the Trusts’ exposure to credit and counterparty risks with respect to these financial assets is approximated by their value recorded in the Trusts’ Statements of Assets and Liabilities.

7. Subsequent Events:

The Trusts paid a net investment income dividend in the following amounts per share on February 2, 2009 to shareholders of record on January 15, 2009:

 

 

 

 

 

 

 

 

Common
Dividend
Per Share

 

 

Insured Municipal

 

$

0.030417

 

Municipal 2018

 

$

0.075500

 

Municipal 2020

 

$

0.062250

 

Strategic Municipal

 

$

0.062500

 

California Municipal 2018

 

$

0.061250

 

New York Municipal 2018

 

$

0.068750

 

Pennsylvania Strategic Municipal

 

$

0.045000

 

 

The dividends declared on Preferred Shares for the period January 1, 2009 to January 31, 2009 for the Trusts were as follows:

 

 

 

 

 

 

 

 

 

 

Series

 

Dividends
Declared

 

 

Municipal 2018

 

W7

 

$

47,293

 

 

 

R7

 

 

46,557

 

 

Municipal 2020

 

M7

 

 

45,283

 

 

 

W7

 

 

40,968

 

 

 

F7

 

 

44,727

 

 

Strategic Municipal

 

W7

 

 

33,766

 

 

California 2018

 

M7

 

 

43,389

 

 

New York 2018

 

T7

 

 

23,061

 

 

Pennsylvania Strategic

 

W7

 

 

11,898

 

 

On January 1, 2009, Bank of America Corporation announced that it had completed its acquisition of Merrill Lynch, one of the largest stockholders of BlackRock, Inc.

 

 

 

 

 

 

 

 

 

ANNUAL REPORT

DECEMBER 31, 2008

49



 


Report of Independent Registered Public Accounting Firm


 

 

To the Directors/Trustees and Shareholders of:

 

BlackRock Insured Municipal Term Trust Inc.

 

BlackRock Municipal 2018 Term Trust

 

BlackRock Municipal 2020 Term Trust

 

BlackRock Strategic Municipal Trust

 

BlackRock California Municipal 2018 Term Trust

 

BlackRock New York Municipal 2018 Term Trust

 

BlackRock Pennsylvania Strategic Municipal Trust (collectively, the “Trusts”)

We have audited the accompanying statements of assets and liabilities of the Trusts, including the schedules of investments, as of December 31, 2008, 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, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Trusts’ management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Trusts are not required to have, nor were we engaged to perform audits of their internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Trusts’ internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2008, by correspondence with the custodian. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Trusts as of December 31, 2008, 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 the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.

Deloitte & Touche LLP
Princeton, New Jersey
February 26, 2009

 

 

 

 

 

 

 

 

50

ANNUAL REPORT

DECEMBER 31, 2008

 



 


Important Tax Information

The following tables summarize the taxable per share distributions paid by the following Trusts during the taxable year ended December 31, 2008:

 

 

 

 

 

 

 

 

 

 

 

               

BlackRock Insured Municipal
Term Trust (BMT)

 

Payable
Date

 

Ordinary
Income

 

Long-Term
Capital Gains

 

                     

Common Shareholders:

 

 

07/01/2008

 

 

 

$

0.000188

 

 

 

 

12/31/2008

 

$

0.000114

 

$

0.010339

 

Preferred Shareholders:

 

 

 

 

 

 

 

 

 

 

Series M7

 

 

06/10/2008

 

 

 

$

0.470000

 

Series M7

 

 

11/04/2008

 

$

0.280000

 

$

25.350000

 

 

 

 

 

 

 

 

 

 

 

 

                     

BlackRock Municipal
2018 Term Trust (BPK)

 

 

 

 

 

 

 

 

 

 

                     

Preferred Shareholders:

 

 

 

 

 

 

 

 

 

 

Series W7

 

 

04/10/2008

 

$

19.120000

 

 

 

Series W7

 

 

04/17/2008

 

$

13.012600

 

 

 

Series R7

 

 

04/11/2008

 

$

18.740000

 

 

 

Series R7

 

 

04/18/2008

 

$

13.854100

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                     

BlackRock California Municipal
2018 Term Trust (BJZ)

 

 

 

 

 

 

 

 

 

 

                     

Preferred Shareholders:

 

 

 

 

 

 

 

 

 

 

Series M7

 

 

04/08/2008

 

$

21.110000

 

 

 

Series M7

 

 

04/15/2008

 

$

1.586100

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                     

BlackRock New York Municipal
2018 Term Trust (BLH)

 

 

 

 

 

 

 

 

 

 

                     

Preferred Shareholders:

 

 

 

 

 

 

 

 

 

 

Series T7

 

 

04/09/2008

 

$

19.720000

 

 

 

Series T7

 

 

04/16/2008

 

$

14.420000

 

 

 

                     

All of the other net investment income distributions paid by the Trusts qualify as tax-exempt interest dividends for federal income tax purposes.

 

 

 

 

 

 

 

 

 

 

ANNUAL REPORT

DECEMBER 31, 2008

51



 


Automatic Dividend Reinvestment Plans

Pursuant to each Trust’s Dividend Reinvestment Plan (the “Plan”), common shareholders are automatically enrolled to have all distributions of dividends and capital gains reinvested by Computershare Trust Company, N.A. (the “Plan Agent”) in the respective Trust’s shares pursuant to the Plan. Shareholders who do not participate in the Plan will receive all distributions in cash paid by check and mailed directly to the shareholders of record (or if the shares are held in street or other nominee name, then to the nominee) by the Plan Agent, which serves as agent for the shareholders in administering the Plan.

After Insured Municipal, a 2018 and/or a 2020 Trust declares a dividend or determines to make a capital gain distribution, the Plan Agent will acquire shares for the participants’ account by the purchase of outstanding shares on the open market, on the Trust’s primary exchange or elsewhere (“open market purchases”). These Trusts will not issue any new shares under the Plan.

After a Strategic Trust declares a dividend or determines to make a capital gain distribution, the Plan Agent will acquire shares for the participants’ accounts, depending upon the circumstances described below, either (i) through receipt of unissued but authorized shares from the Trust (“newly issued shares”) or (ii) by purchase of outstanding shares on the open market, on the Trust’s primary exchange or elsewhere (“open-market purchases”). If, on the dividend payment date, the net asset value per share (“NAV”) is equal to or less than the market price per share plus estimated brokerage commissions (such condition being referred to herein as “market premium”), the Plan Agent will invest the dividend amount in newly issued shares on behalf of the participants. The number of newly issued shares to be credited to each participant’s account will be determined by dividing the dollar amount of the dividend by the NAV on the date the shares are issued. However, if the NAV is less than 95% of the market price on the payment date, the dollar amount of the dividend will be divided by 95% of the market price on the payment date. If, on the dividend payment date, the NAV is greater than the market value per share plus estimated brokerage commissions (such condition being referred to herein as “market discount”), the Plan Agent will invest the dividend amount in shares acquired on behalf of the participants in open-market purchases.

Participation in the Plan is completely voluntary and may be terminated or resumed at any time without penalty by notice if received and processed by the Plan Agent prior to the dividend record date; otherwise such termination or resumption will be effective with respect to any subsequently declared dividend or other distribution.

The Plan Agent’s fees for the handling of the reinvestment of dividends and distributions will be paid by each Trust. However, each participant will pay a pro rata share of brokerage commissions incurred with respect to the Plan Agent’s open market purchases in connection with the reinvestment of dividends and distributions. The automatic reinvestment of dividends and distributions will not relieve participants of any federal income tax that may be payable on such dividends or distributions.

Each Trust reserves the right to amend or terminate the Plan. There is no direct service charge to participants in the Plan; however, each Trust reserves the right to amend the Plan to include a service charge payable by the participants. Participants that request a sale of shares through the Plan Agent are subject to a $2.50 sales fee and a $0.15 per share sold brokerage commission. All correspondence concerning the Plan should be directed to the Plan Agent at P.O. Box 43078, Providence, RI 02940-3078 or by calling (800) 699-1BFM. All overnight correspondence should be directed to the Plan Agent at 250 Royall Street, Canton, MA 02021.

 

 

 

 

 

 

 

 

52

ANNUAL REPORT

DECEMBER 31, 2008

 



 


Officers and Directors/Trustees


 

 

 

 

 

 

 

 

 

 

 

Name, Address and
Year of Birth

 

Position(s) Held
with Trusts

 

Length of
Time Served as
Director/Trustee2

 

Principal Occupation(s)
During Past Five Years

 

Number of
BlackRock-
Advised Funds
and Portfolios
Overseen

 

Public Directorships

                     

Non-Interested Directors/Trustees1

 

 

 

 

 

 

 

 

                 

Richard E. Cavanagh
40 East 52nd Street
New York, NY 10022

1946

 

Chairman of the
Board and
Director/Trustee

 

Since 1994

 

Trustee, Aircraft Finance Trust since 1999; Director, The Guardian Life Insurance Company of America since 1998; Trustee, Educational Testing Service since 1997; Senior Advisor since 2008 and Director since 1996, The Fremont Group; Adjunct Lecturer, Harvard University since 2007; Formerly President and Chief Executive Officer of The Conference Board, Inc. (global business research organization) from 1995 to 2007.

 

105 Funds
102 Portfolios

 

Arch Chemical (chemical
and allied products)

 

 

 

 

 

 

 

 

 

 

 

                     

Karen P. Robards
40 East 52nd Street
New York, NY 10022

1950

 

Vice Chair of the
Board, Chair of the
Audit Committee
and Director/Trustee

 

Since 2007

 

Partner of Robards & Company, LLC, (financial advisory firm) since 1987; Co-founder and Director of the Cooke Center for Learning and Development, (a not-for-profit organization) since 1987; Formerly Director of Enable Medical Corp. from 1996 to 2005; Formerly an investment banker at Morgan Stanley from 1976 to 1987.

 

105 Funds
102 Portfolios

 

AtriCure, Inc. (medical
devices); Care Investment
Trust, Inc. (health care real
estate investment trust)

 

 

 

 

 

 

 

 

 

 

 

                     

G. Nicholas Beckwith, III
40 East 52nd Street
New York, NY 10022

1945

 

Director/Trustee

 

Since 2007

 

Chairman and Chief Executive Officer, Arch Street Management, LLC (Beckwith Family Foundation) and various Beckwith property companies since 2005; Chairman of the Board of Directors, University of Pittsburgh Medical Center since 2002; Board of Directors, Shady Side Hospital Foundation since 1977; Board of Directors, Beckwith Institute for Innovation In Patient Care since 1991; Member, Advisory Council on Biology and Medicine, Brown University since 2002; Trustee, Claude Worthington Benedum Foundation (charitable foundation) since 1989; Board of Trustees, Chatham University since 1981; Board of Trustees, University of Pittsburgh since 2002; Emeritus Trustee, Shady Side Academy since 1977; Formerly Chairman and Manager, Penn West Industrial Trucks LLC (sales, rental and servicing of material handling equipment) from 2005 to 2007; Formerly Chairman, President and Chief Executive Officer, Beckwith Machinery Company (sales, rental and servicing of construction and equipment) from 1985 to 2005; Formerly Board of Directors, National Retail Properties (REIT) from 2006 to 2007.

 

105 Funds
102 Portfolios

 

None

 

 

 

 

 

 

 

 

 

 

 

                     

Kent Dixon
40 East 52nd Street
New York, NY 10022

1937

 

Director/Trustee and
Member of the Audit
Committee

 

Since 1993

 

Consultant/Investor since 1988.

 

105 Funds
102 Portfolios

 

None

 

 

 

 

 

 

 

 

 

 

 

                     

Frank J. Fabozzi
40 East 52nd Street
New York, NY 10022

1948

 

Director/Trustee and
Member of the Audit
Committee

 

Since 1993

 

Consultant/Editor of The Journal of Portfolio Management since 2006; Professor in the Practice of Finance and Becton Fellow, Yale University, School of Management, since 2006; Formerly Adjunct Professor of Finance and Becton Fellow, Yale University from 1994 to 2006.

 

105 Funds
102 Portfolios

 

None

 

 

 

 

 

 

 

 

 

 

 

                     

 

 

 

 

 

 

 

 

 

ANNUAL REPORT

DECEMBER 31, 2008

53



 


Officers and Directors/Trustees (continued)


 

 

 

 

 

 

 

 

 

 

 

Name, Address and
Year of Birth

 

Position(s) Held
with Trusts

 

Length of
Time Served as
Director/Trustee2

 

Principal Occupation(s)
During Past Five Years

 

Number of
BlackRock-
Advised Funds
and Portfolios
Overseen

 

Public Directorships

                     

Non-Interested Directors/Trustees1

 

 

 

 

 

 

 

               

Kathleen F. Feldstein
40 East 52nd Street
New York, NY 10022

1941

 

Director/Trustee

 

Since 2005

 

President of Economics Studies, Inc. (private economic consulting firm) since 1987; Chair, Board of Trustees, McLean Hospital from 2000 to 2008 and Trustee Emeritus thereof since 2008; Member of the Board of Partners Community Healthcare, Inc. since 2005; Member of the Corporation of Partners HealthCare since 1995; Member of the Corporation of Sherrill House (healthcare) since 1990; Trustee, Museum of Fine Arts, Boston since 1992; Member of the Visiting Committee to the Harvard University Art Museum since 2003; Trustee, The Committee for Economic Development (research organization) since 1990; Member of the Advisory Board to the International School of Business, Brandeis University since 2002.

 

105 Funds
102 Portfolios

 

The McClatchy Company
(publishing)

 

 

 

 

 

 

 

 

 

 

 

                     

James T. Flynn
40 East 52nd Street
New York, NY 10022

1939

 

Director/Trustee and
Member of the Audit
Committee

 

Since 2007

 

Formerly Chief Financial Officer of JP Morgan & Co., Inc. from 1990 to 1995.

 

105 Funds
102 Portfolios

 

None

 

 

 

 

 

 

 

 

 

 

 

                     

Jerrold B. Harris
40 East 52nd Street
New York, NY 10022

1942

 

Director/Trustee

 

Since 2007

 

Trustee, Ursinus College since 2000; Director, Troemner LLC (scientific equipment) since 2000.

 

105 Funds
102 Portfolios

 

BlackRock Kelso Capital
Corp.

 

 

 

 

 

 

 

 

 

 

 

                     

R. Glenn Hubbard
40 East 52nd Street
New York, NY 10022

1958

 

Director/Trustee

 

Since 2004

 

Dean of Columbia Business School since 2004; Columbia faculty member since 1988; Formerly Co-Director of Columbia Business School’s Entrepreneurship Program from 1997 to 2004; Visiting Professor at the John F. Kennedy School of Government at Harvard University and the Harvard Business School since 1985 and at the University of Chicago since 1994; Formerly Chairman of the U.S. Council of Economic Advisers under the President of the United States from 2001 to 2003.

 

105 Funds
102 Portfolios

 

ADP (data and information
services), KKR Financial
Corporation (finance), Duke
Realty (real estate),
Metropolitan Life Insurance
Company (insurance),
Information Services Group
(media/technology)

 

 

 

 

 

 

 

 

 

 

 

                     

W. Carl Kester
40 East 52nd Street
New York, NY 10022

1951

 

Director/Trustee and
Member of the Audit
Committee

 

Since 2007

 

Professor of Business Administration and Deputy Dean for Academic Affairs, George Fisher Baker Jr., Harvard Business School since 2008; Mizuho Financial Group Professor of Finance, Harvard Business School and Deputy Dean for Academic Affairs from 2006 to 2008; Unit Head, Finance, Harvard Business School, from 2005 to 2006; Senior Associate Dean and Chairman of the MBA Program of Harvard Business School, from 1999 to 2005; Member of the faculty of Harvard Business School since 1981; Independent Consultant since 1978.

 

105 Funds
102 Portfolios

 

None

 

 

 

 

 

 

 

 

 

 

 

                     

Robert S. Salomon, Jr.
40 East 52nd Street
New York, NY 10022

1936

 

Director/Trustee and
Member of the Audit
Committee

 

Since 2007

 

Formerly Principal of STI Management LLC (investment adviser) from 1994 to 2005.

 

105 Funds
102 Portfolios

 

None

 

 

 

 

 

 

 

 

 

 

 

                     

 

 

1

Directors/Trustees serve until their resignation, removal or death, or until December 31 of the year in which they turn 72.

 

 

2

Following the combination of Merrill Lynch Investment Managers, L.P. (“MLIM”) and BlackRock, Inc. (“BlackRock”) in September 2006, the various legacy MLIM and legacy BlackRock Fund boards were realigned and consolidated into three new Fund boards in 2007. As a result, although the chart shows certain trustees as joining the Trust’s board in 2007, each director/trustee first became a member of the board of directors/trustees of other legacy MLIM or legacy BlackRock Funds as follows: G. Nicholas Beckwith, III since 1999; Richard E. Cavanagh since 1994; Kent Dixon since 1988; Frank J. Fabozzi since 1988; Kathleen F. Feldstein since 2005; James T. Flynn since 1996; Jerrold B. Harris since 1999; R. Glenn Hubbard since 2004; W. Carl Kester since 1998; Karen P. Robards since 1998 and Robert S. Salomon, Jr. since 1996.


 

 

 

 

 

 

 

 

54

ANNUAL REPORT

DECEMBER 31, 2008

 



 


Officers and Directors/Trustees (concluded)


 

 

 

 

 

 

 

 

 

 

 

Name, Address and
Year of Birth

 

Position(s) Held
with Trusts

 

Length of
Time Served as
Director/Trustee2

 

Principal Occupation(s)
During Past Five Years

 

Number of
BlackRock-
Advised Funds
and Portfolios
Overseen

 

Public Directorships

                     

Interested Directors/Trustees1

 

 

 

 

 

 

 

               

Richard S. Davis
40 East 52nd Street
New York, NY 10022

1945

 

Director/Trustee

 

Since 2007

 

Managing Director, BlackRock, Inc. since 2005; Formerly Chief Executive Officer, State Street Research & Management Company from 2000 to 2005; Formerly Chairman of the Board of Trustees, State Street Research Mutual Funds from 2000 to 2005; Formerly Chairman, SSR Realty from 2000 to 2004.

 

174 Funds
286 Portfolios

 

None

 

 

 

 

 

 

 

 

 

 

 

                     

Henry Gabbay
40 East 52nd Street
New York, NY 10022

1947

 

Director/Trustee

 

Since 2007

 

Formerly Consultant, BlackRock, Inc. from 2007 to 2008; Formerly Managing Director, BlackRock, Inc. from 1989 to 2007; Formerly Chief Administrative Officer, BlackRock Advisors, LLC from 1998 to 2007; Formerly President of BlackRock Funds and BlackRock Bond Allocation Target Shares from 2005 to 2007; Formerly Treasurer of certain closed-end funds in the BlackRock fund complex from 1989 to 2006.

 

174 Funds
286 Portfolios

 

None


 

 

 

1

Mr. Davis is an “interested person,” as defined in the Investment Company Act of 1940, of the Trusts based on his position with BlackRock, Inc. and its affiliates. Mr. Gabbay is an “interested person” of the Trusts based on his former positions with BlackRock, Inc. and its affiliates as well as his ownership of BlackRock, Inc. and PNC Securities. Directors/Trustees serve until their resignation, removal or death, or until December 31 of the year in which they turn 72.


 

 

 

 

 

 

 

 

 

 

 

                     

Trust Officers2

 

 

 

 

 

 

 

 

                     

Donald C. Burke
40 East 52nd Street
New York, NY 10022

1960

 

Trust President and
Chief Executive
Officer

 

Since 2007

 

Managing Director of BlackRock, Inc. since 2006; Formerly Managing Director of Merrill Lynch Investment Managers, L.P. (“MLIM”) and Fund Asset Management, L.P. (“FAM”) in 2006, First Vice President thereof from 1997 to 2005, Treasurer thereof from 1999 to 2006 and Vice President thereof from 1990 to 1997.

 

 

 

 

 

 

 

 

 

 

 

                     

Anne F. Ackerley
40 East 52nd Street
New York, NY 10022

1962

 

Vice President

 

Since 2003

 

Managing Director of BlackRock, Inc. since 2000; Chief Operating Officer of BlackRock’s U.S. Retail Group since 2006; Formerly Head of BlackRock’s Mutual Fund Group from 2000 to 2006.

 

 

 

 

 

 

 

 

 

 

 

                     

Neal J. Andrews
40 East 52nd Street
New York, NY 10022

1966

 

Chief Financial
Officer

 

Since 2007

 

Managing Director of BlackRock, Inc. since 2006; Formerly Senior Vice President and Line of Business Head of Fund Accounting and Administration at PNC Global Investment Servicing (U.S.) Inc. (formerly PFPC Inc.) from 1992 to 2006.

 

 

 

 

 

 

 

 

 

 

 

                     

Jay M. Fife
40 East 52nd Street
New York, NY 10022

1970

 

Treasurer

 

Since 2007

 

Managing Director of BlackRock, Inc. since 2007 and Director in 2006; Formerly Assistant Treasurer of the MLIM/FAM advised funds from 2005 to 2006; Director of MLIM Fund Services Group from 2001 to 2006.

 

 

 

 

 

 

 

 

 

 

 

                     

Brian P. Kindelan
40 East 52nd Street
New York, NY 10022

1959

 

Chief Compliance
Officer

 

Since 2007

 

Chief Compliance Officer of the BlackRock-advised Funds since 2007; Managing Director and Senior Counsel of BlackRock, Inc. since 2005; Formerly Director and Senior Counsel of BlackRock Advisors, Inc. from 2001 to 2004.

 

 

 

 

 

 

 

 

 

 

 

                     

Howard B. Surloff
40 East 52nd Street
New York, NY 10022

1965

 

Secretary

 

Since 2007

 

Managing Director of BlackRock, Inc. and General Counsel of U.S. Funds at BlackRock, Inc. since 2006; Formerly General Counsel (U.S.) of Goldman Sachs Asset Management, L.P. from 1993 to 2006.


 

 

 

2

Officers of the Trusts serve at the pleasure of the Board of Directors/Trustees.


 

 

 

 

 

 

 

 

 

ANNUAL REPORT

DECEMBER 31, 2008

55



 


BlackRock Closed-End Funds

 

Custodian

State Street Bank and Trust

Company

Boston, MA 02101

 

Transfer Agent Common Shares:

Computershare Trust

Companies, N.A.

Canton, MA 02021

 

Accounting Agent

State Street Bank and Trust

Company

Princeton, NJ 08540

 

Independent Registered Public Accounting Firm

Deloitte & Touche LLP

Princeton, NJ 08540

 

Legal Counsel

Skadden, Arps, Slate,

Meagher & Flom LLP

New York, NY 10036

 

Trusts Address

BlackRock Closed-End Funds

c/o BlackRock Advisors, LLC

100 Bellevue Parkway

Wilmington, DE 19809

 

Auction Agents Preferred Shares:

For the 2018 Trusts and 2020 Trust

BNY Mellon Shareowner Services

Jersey City, N.J. 07310

 

For the Strategic Trusts

Deutsche Bank Trust Company Americas

New York, NY 10005


 

Effective January 1, 2009, Robert S. Salomon, Jr. retired as Director/Trustee of the Trusts. The Board wishes Mr. Salomon well in his retirement


 

 

 

 

 

 

 

 

56

ANNUAL REPORT

DECEMBER 31, 2008

 



 


Additional Information


 

 

Proxy Results

 

The Annual Meeting of Shareholders was held on September 12, 2008 for shareholders of record on July 14, 2008, to elect director or trustee nominees of each Trust:

Approved the Class I Directors/Trustees as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

               

 

 

G. Nicholas Beckwith, III

 

Kent Dixon

 

R. Glenn Hubbard

 

 

 

 

 

 

 

 

 

 

 

Votes For

 

Votes Withheld

 

Votes For

 

Votes Withheld

 

Votes For

 

Votes Withheld

 

                           

BlackRock Insured Municipal Term Trust Inc.

 

18,528,551

 

3,916,691

 

18,525,884

 

3,919,358

 

18,521,336

 

3,923,906

 

BlackRock Municipal 2018 Term Trust

 

15,360,493

 

75,222

 

15,345,643

 

90,072

 

15,359,170

 

76,545

 

BlackRock Municipal 2020 Term Trust

 

19,048,604

 

384,846

 

19,038,595

 

394,855

 

19,047,808

 

385,642

 

BlackRock Strategic Municipal Trust

 

6,126,209

 

392,670

 

6,126,809

 

392,070

 

6,125,334

 

393,545

 

BlackRock California Municipal 2018 Term Trust

 

5,979,445

 

7,900

 

5,979,445

 

7,900

 

5,979,540

 

7,805

 

BlackRock New York Municipal 2018 Term Trust

 

3,252,632

 

246,658

 

3,252,632

 

246,658

 

3,252,632

 

246,658

 

BlackRock Pennsylvania Strategic Municipal Trust

 

1,860,716

 

9,007

 

1,860,316

 

9,407

 

1,861,816

 

7,907

 

                           

 

 

 

W. Carl Kester

 

Robert S. Salomon, Jr.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Votes For

 

Votes Withheld

 

Votes For

 

Votes Withheld

 

 

 

 

 

                 

 

 

 

 

 

BlackRock Insured Municipal Term Trust Inc.

 

1,539

1

1

1

18,509,101

 

3,936,141

 

 

 

 

 

BlackRock Municipal 2018 Term Trust

 

4,350

1

69

1

15,349,497

 

86,218

 

 

 

 

 

BlackRock Municipal 2020 Term Trust

 

5,888

1

815

1

19,038,782

 

394,668

 

 

 

 

 

BlackRock Strategic Municipal Trust

 

1,629

1

58

1

6,125,878

 

393,001

 

 

 

 

 

BlackRock California Municipal 2018 Term Trust

 

1,473

1

121

1

5,978,745

 

8,600

 

 

 

 

 

BlackRock New York Municipal 2018 Term Trust

 

898

1

289

1

3,251,432

 

247,858

 

 

 

 

 

BlackRock Pennsylvania Strategic Municipal Trust

 

404

1

23

1

1,861,816

 

7,907

 

 

 

 

 


 

 

1

Voted on by holders of Preferred Shares only.


 

 

Trust Certifications

 

Those Trusts listed for trading on the New York Stock Exchange (“NYSE”) have filed with the NYSE their annual chief executive officer certification regarding compliance with the NYSE’s listing standards. Each Trust filed with the SEC the certification of its chief executive officer and chief financial officer required by section 302 of the Sarbanes-Oxley Act.

 

 

Availability of Quarterly Schedule of Investments

 

Each Trust files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Each Trust’s Forms N-Q are available on the SEC’s website at http://www.sec.gov and may also be reviewed and copied at the SEC’s Public Reference Room in Washington, DC.

Information on the operation of the Public Reference Room may be obtained by calling (800) SEC-0330. Each Trust’s Forms N-Q may also be obtained upon request and without charge by calling (800) 441-7762.

 

 

Electronic Delivery

 

Electronic copies of most financial reports are available on the Trusts’ website or shareholders can sign up for e-mail notifications of quarterly statements, annual and semi-annual reports and prospectuses by enrolling in the Trusts’ electronic delivery program.

Shareholders Who Hold Accounts with Investment Advisors, Banks or Brokerages:

Please contact your financial advisor to enroll. Please note that not all investment advisors, banks or brokerages may offer this service.

 

 

 

 

 

 

 

 

 

ANNUAL REPORT

DECEMBER 31, 2008

57



 


Additional Information (continued)


 

 

General Information

 

The Trusts do not make available copies of their Statements of Additional Information because the Trusts’ shares are not continuously offered, which means that the Statements of Additional Information of the Trusts have not been updated after completion of the Trusts’ offerings and the information contained in the Trusts’ Statements of Additional Information may have become outdated.

On September 12, 2008 the Trusts’ Board voted unanimously to change certain of the Trust’s investment guidelines.

Under normal market conditions, the Trusts are required to invest at least 80% of its total assets in municipal bonds either (i) insured under an insurance policy purchased by the Trusts or (ii) insured under an insurance policy obtained by the issuer of the municipal bond or any other party.

Historically, the Trusts have had an additional investment policy of seeking to limit its purchase of municipal bonds to those bonds insured by insurance providers with claims-paying abilities rated AAA from S&P or Fitch or Aaa from Moody’s. Following the onset of the credit and liquidity crises currently troubling the financial markets, the claims-paying ability rating of most of the municipal bond insurance providers have been lowered below the highest rating category by the rating agencies. These downgrades severely limited the ability of the Advisor to manage the Trusts with its existing claims-paying investment policy. As a result, the Board approved an amendment to this policy requiring the Trusts to purchase municipal bonds insured by insurance providers and other entities with claims-paying abilities rated at least investment grade. As a result of the change, the Trust could be exposed to greater risk of non-payment by those insurance providers with claims-paying abilities rated below AAA by S&P or Fitch or below Aaa by Moody’s. In addition, the value of a municipal bond will be affected by the credit standing of its insurer. Municipal bond insurance does not protect the market value of such municipal bonds or the net asset value of the Trust. This investment grade restriction applies at the time of investment, and municipal bonds would not be required to be disposed of in the event an insurer is downgraded after a bond is purchased. The approved changes will not alter the Trusts’ investment objective or the non-fundamental 80% policy stated above.

During the period, there were no other material changes in the Trusts’ investment objectives or policies or to the Trusts’ charters or by-laws that were not approved by the shareholders or in the principal risk factors associated with investment in the Trusts. There have been no changes in the persons who are primarily responsible for the day-to-day management of the Trusts’ portfolios.

The Trusts will mail only one copy of shareholder documents, including annual and semi-annual reports and proxy statements, to shareholders with multiple accounts at the same address. This practice is commonly called “householding” and it is intended to reduce expenses and eliminate duplicate mailings of shareholder documents. Mailings of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please contact the Trusts at (800) 441-7762.

Quarterly performance, semi-annual and annual reports and other information regarding each Trust may be found on BlackRock’s website, which can be accessed at http://www.blackrock.com. This reference to BlackRock’s website is intended to allow investors public access to information regarding each Trust and does not, and is not intended to, incorporate BlackRock’s website into this report.

 

 

Statement of Preferences/Articles of Incorporation

 

Effective September 12, 2008, following approval by the Trusts’ Board, the Board ratified the amendment of the terms of the Trusts’ Preferred Shares in order to allow the Trusts to enter into TOB transactions, the proceeds of which were used to redeem a portion of the Trusts’ Preferred Shares. Accordingly, the definition of Inverse Floaters was amended to incorporate the Trusts’ permissible ratio of floating rate instruments into inverse floating rate instruments. Additionally, conforming changes and certain formula modifications concerning inverse floaters were made to the definitions of Moody’s Discount Factor and S&P Discount Factor, as applicable, to integrate the Trusts’ investments in TOBs into applicable calculations.

 

 

Section 19 Notices

 

The amounts and sources of distributions reported are only estimates and are not being provided for tax reporting purposes. The actual amounts and sources for tax reporting purposes will depend upon each Trust’s investment experience during the year and may be subject to changes based on the tax regulations. Each Trust will send you a Form 1099-DIV each calendar year that will tell you how to report these distributions for federal income tax purposes.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                                 

 

 

Total Fiscal Year to Date Cumulative
Distributions by Character

 

Percentage of Fiscal Year to Date
Cumulative Distributions by Character

 

 

 

 

 

 

 

Net
Investment
Income

 

Net Realized
Capital Gains

 

Return of
Capital

 

Total Per
Common
Share

 

Net
Investment
Income

 

Net Realized
Capital Gains

 

Return of
Capital

 

Total Per
Common
Share

                                 

Insured Municipal

 

$0.388

 

$0.011

 

 

$0.399

 

97%

 

3%

 

0%

 

100%

                                 

 

 

 

 

 

 

 

 

58

ANNUAL REPORT

DECEMBER 31, 2008

 



 


Additional Information (concluded)


 

 

BlackRock Privacy Principles

 

BlackRock is committed to maintaining the privacy of its current and former fund investors and individual clients (collectively, “Clients”) and to safeguarding their nonpublic personal information. The following information is provided to help you understand what personal information BlackRock collects, how we protect that information and why in certain cases we share such information with select parties.

If you are located in a jurisdiction where specific laws, rules or regulations require BlackRock to provide you with additional or different privacy-related rights beyond what is set forth below, then BlackRock will comply with those specific laws, rules or regulations.

BlackRock obtains or verifies personal nonpublic information from and about you from different sources, including the following: (i) information we receive from you or, if applicable, your financial intermediary, on applications, forms or other documents; (ii) information about your transactions with us, our affiliates, or others; (iii) information we receive from a consumer reporting agency; and (iv) from visits to our websites.

BlackRock does not sell or disclose to nonaffiliated third parties any nonpublic information about its Clients, except as permitted by law or as necessary to service Client accounts. These nonaffiliated third parties are required to protect the confidentiality and security of this information and to use it only for its intended purpose.

We may share information with our affiliates to service your account or to provide you with information about other BlackRock products or services that may be of interest to you. In addition, BlackRock restricts access to nonpublic personal information about its Clients to those BlackRock employees with a legitimate business need for the information. BlackRock maintains physical, electronic and procedural safeguards that are designed to protect the nonpublic personal information of its Clients, including procedures relating to the proper storage and disposal of such information.

 

 

 

 

 

 

 

 

 

 

ANNUAL REPORT

DECEMBER 31, 2008

59



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This report is transmitted to shareholders only. It is not a prospectus. Past performance results shown in this report should not be considered a representation of future performance. The Trusts have leveraged their Common Shares, which creates risks for Common Shareholders, including the likelihood of greater volatility of net asset value and market price of the Common Shares and the risk that fluctuations in the short-term dividend rates of the Preferred Shares, currently set at the maximum reset rate as a result of failed auctions, may affect the yield to Common Shareholders. Statements and other information herein are as dated and are subject to change.

A description of the policies and procedures that the Trusts use to determine how to vote proxies relating to portfolio securities is available (1) without charge, upon request, by calling toll-free (800) 441-7762; (2) at www.blackrock.com; and (3) on the Securities and Exchange Commission’s website at http://www.sec.gov. Information about how each Trust voted proxies relating to securities held in each Trust’s portfolio during the most recent 12-month period ended June 30 is available upon request and without charge (1) at www.blackrock.com or by calling (800) 441-7762 and (2) on the Securities and Exchange Commission’s website at http://www.sec.gov.

 

 

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#CEF-AR-BK4-3-1208





 

Item 2 – Code of Ethics – The registrant (or the “Fund”) has adopted a code of ethics, as of the end of the period covered by this report, applicable to the registrant’s principal executive officer, principal financial officer and principal accounting officer, or persons performing similar functions. During the period covered by this report, there have been no amendments to or waivers granted under the code of ethics. A copy of the code of ethics is available without charge at www.blackrock.com.
   
Item 3 –

Audit Committee Financial Expert – The registrant’s board of directors or trustees, as applicable (the “board of directors”) has determined that (i) the registrant has the following audit committee financial experts serving on its audit committee and (ii) each audit committee financial expert is independent:
Kent Dixon
Frank J. Fabozzi
James T. Flynn
W. Carl Kester
Karen P. Robards
Robert S. Salomon, Jr. (retired effective December 31, 2008)

The registrant’s board of directors has determined that W. Carl Kester and Karen P. Robards qualify as financial experts pursuant to Item 3(c)(4) of Form N-CSR.

Prof. Kester has a thorough understanding of generally accepted accounting principles, financial statements and internal control over financial reporting as well as audit committee functions. Prof. Kester has been involved in providing valuation and other financial consulting services to corporate clients since 1978. Prof. Kester’s financial consulting services present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised by the registrant’s financial statements.

Ms. Robards has a thorough understanding of generally accepted accounting principles, financial statements and internal control over financial reporting as well as audit committee functions. Ms. Robards has been President of Robards & Company, a financial advisory firm, since 1987. Ms. Robards was formerly an investment banker for more than 10 years where she was responsible for evaluating and assessing the performance of companies based on their financial results. Ms. Robards has over 30 years of experience analyzing financial statements. She also is a member of the audit committee of one publicly held company and a non-profit organization.

Under applicable securities laws, a person determined to be an audit committee financial expert will not be deemed an “expert” for any purpose, including without limitation for the purposes of Section 11 of the Securities Act of 1933, as a result of being designated or identified as an audit committee financial expert. The designation or identification as an audit committee financial expert does not impose on such person any duties, obligations, or liabilities greater than the duties, obligations, and liabilities imposed on such person as a member of the audit committee and board of directors in the absence of such designation or identification.

   
   
   
   

 

 


 

Item 4 – Principal Accountant Fees and Services

 
(a) Audit Fees
(b) Audit-Related Fees1
(c) Tax Fees2
(d) All Other Fees3
  Current Previous Current Previous Current Previous Current Previous
  Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year
     Entity Name End End End End End End
End
End
                 
   BlackRock                
   Municipal 2018
$27,300
$30,500
$3,500 $1,975 $6,100 $6,100 $1,049 $1,042
   Term Trust                

1 The nature of the services include assurance and related services reasonably related to the performance of the audit of financial statements not included in Audit Fees.
2 The nature of the services include tax compliance, tax advice and tax planning.
3 The nature of the services include a review of compliance procedures and attestation thereto.

 

(e)(1) Audit Committee Pre-Approval Policies and Procedures:
      The registrant’s audit committee (the “Committee”) has adopted policies and procedures with regard to the pre-approval of services. Audit, audit-related and tax compliance services provided to the registrant on an annual basis require specific pre-approval by the Committee. The Committee also must approve other non-audit services provided to the registrant and those non-audit services provided to the registrant’s affiliated service providers that relate directly to the operations and the financial reporting of the registrant. Certain of these non-audit services that the Committee believes are a) consistent with the SEC’s auditor independence rules and b) routine and recurring services that will not impair the independence of the independent accountants may be approved by the Committee without consideration on a specific case-by-case basis (“general pre-approval”). The term of any general pre-approval is 12 months from the date of the pre-approval, unless the Committee provides for a different period. Tax or other non-audit services provided to the registrant which have a direct impact on the operation or financial reporting of the registrant will only be deemed pre-approved provided that any individual project does not exceed $10,000 attributable to the registrant or $50,000 for all of the registrants the Committee oversees. For this purpose, multiple projects will be aggregated to determine if they exceed the previously mentioned cost levels.

      Any proposed services exceeding the pre-approved cost levels will require specific pre-approval by the Committee, as will any other services not subject to general pre-approval (e.g., unanticipated but permissible services). The Committee is informed of each service approved subject to general pre-approval at the next regularly scheduled in-person board meeting. At this meeting, an analysis of such services is presented to the Committee for ratification. The Committee may delegate to one or more of its members the authority to approve the provision of and fees for any specific engagement of permitted non-audit services, including services exceeding pre-approved cost levels.

(e)(2) None of the services described in each of Items 4(b) through (d) were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.

(f) Not Applicable

(g) Affiliates’ Aggregate Non-Audit Fees:

   
    Current Fiscal Year Previous Fiscal Year  
 
Entity Name
End End  
         
     BlackRock Municipal 2018
   Term Trust
$415,649 $293,617  

 




 

(h) The registrant’s audit committee has considered and determined that the provision of non-audit services that were rendered to the registrant’s investment adviser (not including any non-affiliated sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by the registrant’s investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant’s independence.

Regulation S-X Rule 2-01(c)(7)(ii) – $405,000, 0%

   
Item 5 –

Audit Committee of Listed Registrants – The following individuals are members of the registrant’s separately-designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(58)(A)):

Kent Dixon
Frank J. Fabozzi
James T. Flynn
W. Carl Kester
Karen P. Robards

Robert S. Salomon, Jr. (retired effective December 31, 2008)

   
Item 6 –

Investments
(a) The registrant’s Schedule of Investments is included as part of the Report to Stockholders filed under Item 1 of this form.
(b) Not Applicable due to no such divestments during the semi-annual period covered since the previous Form N-CSR filing.

   
Item 7 – Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies – The board of directors has delegated the voting of proxies for the Fund securities to the Fund’s investment advisor (“Investment Adviser”) pursuant to the Investment Adviser’s proxy voting guidelines. Under these guidelines, the Investment Adviser will vote proxies related to Fund securities in the best interests of the Fund and its stockholders. From time to time, a vote may present a conflict between the interests of the Fund’s stockholders, on the one hand, and those of the Investment Adviser, or any affiliated person of the Fund or the Investment Adviser, on the other. In such event, provided that the Investment Adviser’s Equity Investment Policy Oversight Committee, or a sub-committee thereof (the “Oversight Committee”) is aware of the real or potential conflict or material non-routine matter and if the Oversight Committee does not reasonably believe it is able to follow its general voting guidelines (or if the particular proxy matter is not addressed in the guidelines) and vote impartially, the Oversight Committee may retain an independent fiduciary to advise the Oversight Committee on how to vote or to cast votes on behalf of the Investment Adviser’s clients. If the Investment Adviser determines not to retain an independent fiduciary, or does not desire to follow the advice of such independent fiduciary, the Oversight Committee shall determine how to vote the proxy after consulting with the Investment Adviser’s Portfolio Management Group and/or the Investment Adviser’s Legal and Compliance Department and
   
   
   

 


  concluding that the vote cast is in its client’s best interest notwithstanding the conflict. A copy of the Fund’s Proxy Voting Policy and Procedures are attached as Exhibit 99.PROXYPOL. Information on how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available without charge, (i) at www.blackrock.com and (ii) on the SEC’s website at http://www.sec.gov.
   
Item 8 –

Portfolio Managers of Closed-End Management Investment Companies – as of December 31, 2008.

(a)(1) BlackRock Municipal 2018 Term Trust is managed by a team of investment professionals comprised of Theodore R. Jaeckel, Jr., CFA, Managing Director at BlackRock, Walter O’Connor, Managing Director at BlackRock and F. Howard Downs, Director at BlackRock. Each is a member of BlackRock’s municipal tax-exempt management group. Each is jointly responsible for the day-today management of the Fund’s portfolio, which includes setting the Fund’s overall investment strategy, overseeing the management of the Fund and/or selection of its investments. Messrs. Jaeckel and O’Connor have been members of the Fund’s portfolio management team since 2006. Mr. Downs has been a member of the Fund’s portfolio since 2007.

Mr. Jaeckel joined BlackRock in 2006. Prior to joining BlackRock, he was a Managing Director (Municipal Tax-Exempt Fund Management) of Merrill Lynch Investment Managers, L.P. (“MLIM”) from 2005 to 2006 and a Director of MLIM from 1997 to 2005. He has been a portfolio manager with BlackRock or MLIM since 1991.

Mr. O’Connor joined BlackRock in 2006. Prior to joining BlackRock, he was a Managing Director (Municipal Tax-Exempt Fund Management) of MLIM from 2003 to 2006 and was a Director of MLIM from 1997 to 2002. He has been a portfolio manager with BlackRock or MLIM since 1991.

Mr. Downs has been a Director of BlackRock since 2004 and a Vice President thereof since 1999. He has been with BlackRock since 1999.

(a)(2) As of December 31, 2008:

   
  Number of Other Accounts Managed Number of Other Accounts and
  and Assets by Account Type Assets for Which Advisory Fee is
          Performance-Based  
  Other Other Pooled   Other Other Pooled  
Name of Registered Investment Other Registered Investment Other
Portfolio Manager Investment Vehicles Accounts Investment Vehicles Accounts
  Companies     Companies    
   Theodore R. Jaeckel, Jr. 77 0 0 0 0 0
  $15.55 Billion $0 $0 $0 $0 $0
   Walter O’Connor 77 0 0 0 0 0
  $15.55 Billion $0 $0 $0 $0 $0
   F. Howard Downs 9 4
31
0 0 0
  $1.44 Billion $108.9 Million $996.9 Million $0 $0 $0

 

(iv) Potential Material Conflicts of Interest

BlackRock and its affiliates (collectively, herein “BlackRock”) has built a professional working environment, firm-wide compliance culture and compliance procedures and systems designed to

   
   

 


 

protect against potential incentives that may favor one account over another. BlackRock has adopted policies and procedures that address the allocation of investment opportunities, execution of portfolio transactions, personal trading by employees and other potential conflicts of interest that are designed to ensure that all client accounts are treated equitably over time. Nevertheless, BlackRock furnishes investment management and advisory services to numerous clients in addition to the Fund, and BlackRock may, consistent with applicable law, make investment recommendations to other clients or accounts (including accounts which are hedge funds or have performance or higher fees paid to BlackRock, or in which portfolio managers have a personal interest in the receipt of such fees), which may be the same as or different from those made to the Fund. In addition, BlackRock, its affiliates and significant shareholders and any officer, director, stockholder or employee may or may not have an interest in the securities whose purchase and sale BlackRock recommends to the Fund. BlackRock, or any of its affiliates or significant shareholders, or any officer, director, stockholder, employee or any member of their families may take different actions than those recommended to the Fund by BlackRock with respect to the same securities. Moreover, BlackRock may refrain from rendering any advice or services concerning securities of companies of which any of BlackRock’s (or its affiliates’ or significant shareholders’) officers, directors or employees are directors or officers, or companies as to which BlackRock or any of its affiliates or significant shareholders or the officers, directors and employees of any of them has any substantial economic interest or possesses material non-public information. Each portfolio manager also may manage accounts whose investment strategies may at times be opposed to the strategy utilized for a fund. In this connection, it should be noted that a portfolio manager may currently manage certain accounts that are subject to performance fees. In addition, a portfolio manager may assist in managing certain hedge funds and may be entitled to receive a portion of any incentive fees earned on such funds and a portion of such incentive fees may be voluntarily or involuntarily deferred. Additional portfolio managers may in the future manage other such accounts or funds and may be entitled to receive incentive fees.

As a fiduciary, BlackRock owes a duty of loyalty to its clients and must treat each client fairly. When BlackRock purchases or sells securities for more than one account, the trades must be allocated in a manner consistent with its fiduciary duties. BlackRock attempts to allocate investments in a fair and equitable manner among client accounts, with no account receiving preferential treatment. To this end, BlackRock has adopted a policy that is intended to ensure that investment opportunities are allocated fairly and equitably among client accounts over time. This policy also seeks to achieve reasonable efficiency in client transactions and provide BlackRock with sufficient flexibility to allocate investments in a manner that is consistent with the particular investment discipline and client base.

(a)(3) As of December 31, 2008:

Portfolio Manager Compensation Overview

BlackRock’s financial arrangements with its portfolio managers, its competitive compensation and its career path emphasis at all levels reflect the value senior management places on key resources. Compensation may include a variety of components and may vary from year to year based on a number of factors. The principal components of compensation include a base salary, a performance-based discretionary bonus, participation in various benefits programs and one or more of the

   
   

 

 


 

incentive compensation programs established by BlackRock such as its Long-Term Retention and Incentive Plan and Restricted Stock Program.

Base compensation. Generally, portfolio managers receive base compensation based on their seniority and/or their position with the firm. Senior portfolio managers who perform additional management functions within the portfolio management group or within BlackRock may receive additional compensation for serving in these other capacities.

Discretionary Incentive Compensation
Discretionary incentive compensation is a function of several components: the performance of BlackRock, Inc., the performance of the portfolio manager’s group within BlackRock, the investment performance, including risk-adjusted returns, of the firm’s assets under management or supervision by that portfolio manager relative to predetermined benchmarks, and the individual’s seniority, role within the portfolio management team, teamwork and contribution to the overall performance of these portfolios and BlackRock. In most cases, including for the portfolio managers of the Fund, these benchmarks are the same as the benchmark or benchmarks against which the performance of the Fund or other accounts managed by the portfolio managers are measured. BlackRock’s Chief Investment Officers determine the benchmarks against which the performance of funds and other accounts managed by each portfolio manager is compared and the period of time over which performance is evaluated. With respect to the portfolio managers, such benchmarks for the Fund include a combination of market-based indices (e.g., Barclays Capital Municipal Bond Index), certain customized indices and certain fund industry peer groups.

BlackRock’s Chief Investment Officers make a subjective determination with respect to the portfolio managers’ compensation based on the performance of the funds and other accounts managed by each portfolio manager relative to the various benchmarks noted above. Performance is measured on both a pre-tax and after-tax basis over various time periods including 1, 3, 5 and 10-year periods, as applicable.

Distribution of Discretionary Incentive Compensation
Discretionary incentive compensation is distributed to portfolio managers in a combination of cash and BlackRock, Inc. restricted stock units which vest ratably over a number of years. The BlackRock, Inc. restricted stock units, if properly vested, will be settled in BlackRock, Inc. common stock. Typically, the cash bonus, when combined with base salary, represents more than 60% of total compensation for the portfolio managers. Paying a portion of annual bonuses in stock puts compensation earned by a portfolio manager for a given year “at risk” based on BlackRock’s ability to sustain and improve its performance over future periods.

     Long-Term Retention and Incentive Plan (“LTIP”) — The LTIP is a long-term incentive plan that seeks to reward certain key employees. Prior to 2006, the plan provided for the grant of awards that were expressed as an amount of cash that, if properly vested and subject to the attainment of certain performance goals, will be settled in cash and/or in BlackRock, Inc. common stock. Beginning in 2006, awards are granted under the LTIP in the form of BlackRock, Inc. restricted stock units that, if properly vested and subject to the attainment of certain performance goals, will be settled in BlackRock, Inc. common stock. Messrs. Jaeckel, O’Connor and Downs have each received awards under the LTIP.

   
   

 

 


 

     Deferred Compensation Program — A portion of the compensation paid to eligible BlackRock employees may be voluntarily deferred into an account that tracks the performance of certain of the firm’s investment products. Each participant in the deferred compensation program is permitted to allocate his deferred amounts among the various investment options. Messrs. Jaeckel, O’Connor and Downs have each participated in the deferred compensation program.

     Options and Restricted Stock Awards — A portion of the annual compensation of certain employees is mandatorily deferred into BlackRock restricted stock units. Prior to the mandatory deferral into restricted stock units, BlackRock granted stock options to key employees, including certain portfolio managers who may still hold unexercised or unvested options. BlackRock, Inc. also granted restricted stock awards designed to reward certain key employees as an incentive to contribute to the long-term success of BlackRock. These awards vest over a period of years. Mr. Downs has been granted stock options and/or restricted stock in prior years.

Other compensation benefits. In addition to base compensation and discretionary incentive compensation, portfolio managers may be eligible to receive or participate in one or more of the following:

     Incentive Savings Plans — BlackRock, Inc. has created a variety of incentive savings plans in which BlackRock employees are eligible to participate, including a 401(k) plan, the BlackRock Retirement Savings Plan (RSP), and the BlackRock Employee Stock Purchase Plan (ESPP). The employer contribution components of the RSP include a company match equal to 50% of the first 6% of eligible pay contributed to the plan capped at $4,000 per year, and a company retirement contribution equal to 3% of eligible compensation, plus an additional contribution of 2% for any year in which BlackRock has positive net operating income. The RSP offers a range of investment options, including registered investment companies managed by the firm. BlackRock contributions follow the investment direction set by participants for their own contributions or, absent employee investment direction, are invested into a balanced portfolio. The ESPP allows for investment in BlackRock common stock at a 5% discount on the fair market value of the stock on the purchase date. Annual participation in the ESPP is limited to the purchase of 1,000 shares or a dollar value of $25,000. Each portfolio manager is eligible to participate in these plans.

(a)(4) Beneficial Ownership of Securities. As of December 31, 2008, none of Mr. Jaeckel, Mr. O’Connor or Mr. Downs beneficially owned any stock issued by the Fund.

   
Item 9 –

Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers – Not Applicable due to no such purchases during the period covered by this report.

   
Item 10 – Submission of Matters to a Vote of Security Holders – The registrant’s Nominating and Governance Committee will consider nominees to the board of directors recommended by shareholders when a vacancy becomes available. Shareholders who wish to recommend a nominee should send nominations that include biographical information and set forth the qualifications of the proposed nominee to the registrant’s Secretary. There have been no material changes to these procedures.
   

 

 


Item 11 – Controls and Procedures
   
11(a) – The registrant’s principal executive and principal financial officers or persons performing similar functions have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”)) are effective as of a date within 90 days of the filing of this report based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rule 13(a)-15(b) under the Securities Exchange Act of 1934, as amended.
   
11(b) – There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.
   
Item 12 – Exhibits attached hereto
   
12(a)(1) – Code of Ethics – See Item 2
   
12(a)(2) – Certifications – Attached hereto
   
12(a)(3) – Not Applicable
   
12(b) – Certifications – Attached hereto
   

 

 

 

 

 


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.

BlackRock Municipal 2018 Term Trust

By: /s/ Donald C. Burke  
  Donald C. Burke
  Chief Executive Officer of
  BlackRock Municipal 2018 Term Trust

Date: February 23, 2009

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By: /s/ Donald C. Burke  
  Donald C. Burke
  Chief Executive Officer (principal executive officer) of
  BlackRock Municipal 2018 Term Trust

Date: February 23, 2009

By: /s/ Neal J. Andrews  
  Neal J. Andrews
  Chief Financial Officer (principal financial officer) of
  BlackRock Municipal 2018 Term Trust

Date: February 23, 2009