- --------------------------------------------------------------------------------
THE BLACKROCK HIGH YIELD TRUST
SEMI-ANNUAL REPORT TO SHAREHOLDERS
REPORT OF INVESTMENT ADVISER
- --------------------------------------------------------------------------------
May 31, 1999
Dear Shareholder:
During the period covered by this semi-annual report, interest rates rose
sharply as U.S. economic growth remained strong, labor markets tightened and
international markets began to recover. In light of these factors, on May 18
members of the Federal Reserve's Federal Open Market Committee announced that
they had adopted a bias towards higher interest rates, citing a concern that
inflation might start to accelerate.
BlackRock has adopted a cautious view of the bond market, as we believe
that there is a real possibility that the Federal Reserve will raise interest
rates in the near future. Additionally, because the Treasury yield curve has
already priced in Federal Reserve action, we believe that interest rates will
trade in a relatively narrow range until the economy shows signs of slowing.
This report contains comments from your Trust's managers regarding the
markets and portfolio in addition to the Trust's initial financial statements
and a detailed portfolio listing. We thank you for your continued investment in
the Trust.
Sincerely,
/s/ Laurence D. Fink /s/ Ralph L. Schlosstein
- -------------------- ------------------------
Laurence D. Fink Ralph L. Schlosstein
Chairman President
1
<PAGE>
May 31, 1999
Dear Shareholder:
We are pleased to present the first semi-annual report for The BlackRock
High Yield Trust (the "Trust") for the period ending April 30, 1999. We would
like to take this opportunity to review the Trust's stock price and net asset
value (NAV) performance, summarize market developments and discuss recent
portfolio management activity.
The Trust is a diversified, actively managed closed-end bond fund whose
shares are traded on the New York Stock Exchange under the symbol "BHY". The
Trust's primary investment objective is to provide high current income, and its
secondary objective is capital appreciation. The Trust seeks to achieve this
objective by investing at least 80% of the portfolio in high yield or "junk
bonds" (rated "BB" or below by a major rating agency or of equivalent quality).
The table below summarizes the changes in the Trust's stock price and net
asset value since inception:
<TABLE>
<CAPTION>
---------------------------------------------------------
4/30/99 12/23/98 CHANGE HIGH LOW
<S> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------
STOCK PRICE $ 14.50 $ 15.06 (3.72%) $ 15.063 $ 14.375
- ----------------------------------------------------------------------------------------
NET ASSET VALUE (NAV) $ 15.39 $ 14.91 3.22% $ 15.39 $ 14.47
- ----------------------------------------------------------------------------------------
10-YEAR U.S. TREASURY NOTE 5.35% 4.80% 11.46% 5.42% 4.52%
- ----------------------------------------------------------------------------------------
</TABLE>
THE FIXED INCOME MARKETS
The past six months have witnessed continued rapid expansion of the U.S.
economy. GDP growth for the first quarter of 1999 is estimated at an annual
rate above 4%, far exceeding the historical non-inflationary level of 2%. While
BlackRock believes that growth may slow down in the second half of 1999, we
anticipate GDP to remain above 3% for the year. Despite the strong economic
growth, inflation has stayed surprisingly subdued. A significant factor in
maintaining low inflation in the U.S. economy stems from the increase in
industrial productivity. Higher productivity has allowed manufacturers to avoid
price increases despite tight labor markets.
The Treasury market briefly rallied early in the fourth quarter of 1998
before dramatically reversing in 1999. For the period, the yield of the 10-year
Treasury security rose from 4.80% on December 23, 1998 to 5.35% on April 30,
1999. The weak performance of the Treasury market can be attributed to
investors leaving the safe haven of Treasuries to purchase credit sensitive or
higher yielding securities in reaction to inflationary concerns voiced by the
Federal Reserve.
Since the Trust's inception in December 1998 the high yield market has
performed well as yield spreads have narrowed compared to Treasuries. For the
first four months of 1999 high yield bonds as measured by THE LEHMAN BROTHERS
HIGH YIELD INDEX returned 3.82%, significantly outperforming the LEHMAN
BROTHERS AGGREGATE INDEX'S -0.19%. The willingness of investors to return to
riskier credits has certainly helped the high yield market. Within the sector,
investors continue to emphasize higher quality credits, which have outperformed
lower tier credits. Supply and demand technicals of the high yield market
appear to be favorable, due to strong money inflows into mutual funds and lower
supply relative to last year's issuance (down approximately 38%). We view the
reduction of supply as a healthy trend as the market appears to be more
disciplined in its selection process, resulting in many companies being shut
out of the market.
THE TRUST'S PORTFOLIO AND INVESTMENT STRATEGY
The Trust's portfolio is actively managed to diversify exposure to various
sectors, issuers, revenue sources and security types. BlackRock's investment
strategy emphasizes a relative value approach, which allows the Trust to
capitalize upon changing market conditions by rotating municipal sectors,
credits and coupons.
2
<PAGE>
The Trust has focused on non-cyclical companies that offer stable cash
flow. In particular, the Trust has focused on telecom and media issues that
have benefited from strong investor demand. Particular emphasis has been placed
on these sectors as improving fundamentals and the potential for consolidation
continues to be a major contributor to their performance. The Trust has avoided
industries with heavy government regulation and high leverage. For instance the
Trust has been underweighting the healthcare sector, which has been a weak
performer as new Medicare payment regulations coupled with high leverage have
forced several providers into serious financial stress. The Trust has focused
on the B-rated credits, whose spreads continue to tighten, while underweighting
CCC-rated securities which have underperformed with the market's reduced
appetite for credit risk.
The following charts show the Trust's current asset composition and credit
quality allocations:
- -------------------------------------------------------------------
STANDARD & POOR'S/MOODY'S
CREDIT RATING APRIL 30, 1999
- -------------------------------------------------------------------
BB/Ba 24%
- -------------------------------------------------------------------
B/B 57%
- -------------------------------------------------------------------
CCC/Caa 8%
- -------------------------------------------------------------------
Not Rated 11%
- -------------------------------------------------------------------
We look forward to continuing to manage the Trust to benefit from the
opportunities available to investors in the investment grade municipal market.
We thank you for your investment and continued interest in The BlackRock High
Yield Trust. Please feel free to call our marketing center at (800) 227-7BFM
(7236) if you have any specific questions which were not addressed in this
report.
Sincerely yours,
/s/ Robert S. Kapito /s/ Dennis Schaney
- -------------------- -------------------
Robert S. Kapito Dennis Schaney
Vice Chairman and Portfolio Manager Managing Director and Portfolio Manager
BlackRock Financial Management, Inc. BlackRock Financial Management, Inc.
- --------------------------------------------------------------------------------
THE BLACKROCK HIGH YIELD TRUST
- --------------------------------------------------------------------------------
Symbol on New York Stock Exchange: BHY
- --------------------------------------------------------------------------------
Initial Offering Date: December 12, 1998
- --------------------------------------------------------------------------------
Closing Stock Price as of 4/30/99: $ 14.50
- --------------------------------------------------------------------------------
Net Asset Value as of 4/30/99: $ 15.39
- --------------------------------------------------------------------------------
Yield on Closing Stock Price as of 4/30/99 ($14.50)1: 10.48%
- --------------------------------------------------------------------------------
Current Monthly Distribution per Share2: $ 0.126563
- --------------------------------------------------------------------------------
Current Annualized Distribution per Share2: $ 1.518756
- --------------------------------------------------------------------------------
1 Yield on closing stock price is calculated by dividing the current annualized
distribution per share by the closing stock price per share.
2 The distribution is not constant and is subject to change.
3
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK HIGH YIELD TRUST
PORTFOLIO OF INVESTMENTS
APRIL 30, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
RATING* (000) DESCRIPTION (NOTE 1)
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C>
LONG-TERM INVESTMENTS-142.4%
CORPORATE BONDS-136.8%
AERO & DEFENSE-1.0%
B- $ 1,000 Condor Systems, Inc.**, Sr. Sub. Note,
11.88%, 5/1/09 ...................... $ 995,000
----------
AIR TRANSPORT-2.1%
B+ 2,000 Amtran, Inc., Sr. Note,
9.63%, 12/15/05 ..................... 2,005,000
----------
AUTOMOTIVE-6.2%
B 2,000 Group 1 Automotive, Inc.,
10.88%, 3/1/09 ...................... 2,015,000
B- 4,000 Sonic Automotive, Inc., Sr. Sub. Note,
11.00%, 8/1/08 ...................... 3,970,000
----------
5,985,000
----------
BUILDING & DEVELOPMENT-8.2%
Ba1 3,000 D. R. Horton, Inc., Sr. Note,
8.00%, 2/1/09 ....................... 2,970,000
B- 2,000 Formica Corp.**, Sr. Sub. Note,
10.88%, 3/1/09 ...................... 2,020,000
BB- 3,000 United States Home Corp., Sr. Sub.
Note, 8.88%, 2/15/09 ................ 2,955,000
----------
7,945,000
----------
BUSINESS EQUIPMENT & SERVICES-3.5%
NR 3,500 Kasper ASL Ltd., Sr. Note,
12.75%, 3/31/04 ..................... 3,360,000
----------
CABLE TV-9.1%
B+ 2,000 Charter Communications Holdings
LLC**, Sr. Note,
Zero Coupon, (9.92% commencing
4/1/04), 4/1/11 .................... 1,322,500
B 4,000 Echostar DBS Corp.**, Sr. Note,
9.38%, 2/1/09 ....................... 4,150,000
B+ 2,000 James Cable Partners LP, Sr. Note,
Series B, 10.75%, 8/15/04 ........... 2,150,000
NR 2,000 Knology Holdings, Inc., Sr. Note,
Zero Coupon (11.875%
commencing 10/15/02), 10/15/07....... 1,240,000
----------
8,862,500
----------
CLOTHING & TEXTILES-5.2%
B- 4,000 Triarc Consumer Products Group,
LLC**, Sr. Sub. Note,
10.25%, 2/15/09 ..................... 4,040,000
B- 1,000 Tropical Sportswear International
Corp., Sr. Sub. Note,
11.00%, 6/15/08 ..................... 1,050,000
----------
5,090,000
----------
COSMETICS & TOILETRIES-3.2%
B- 3,250 Revlon Consumer Products Corp.,
Sr. Sub. Note,
8.63%, 2/1/08 ...................... 3,120,000
----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
RATING* (000) DESCRIPTION (NOTE 1)
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C>
ECOLOGICAL SERVICES & EQUIPMENT-4.5%
Allied Waste North America, Inc.,
Sr. Note,
BB $ 2,000 7.63%, 1/1/06 ....................... $1,955,000
BB 2,498 7.88%, 1/1/09 ....................... 2,441,306
----------
4,396,306
----------
ELECTRONICS-4.2%
B+ 2,000 Pogo Producing Co., Sr. Sub.
Note,10.38%, 2/15/09 ................ 2,075,000
BB+ 2,000 Toll Corp., Sr. Sub. Note,
8.00%, 5/1/09 ....................... 2,000,000
----------
4,075,000
----------
FARMING & AGRICULTURE-3.4%
B 3,000 Ainsworth Lumber Co. Ltd., Sr. Sec.
Note, 12.50%, 7/15/07 ............... 3,330,000
----------
FINANCIAL INTERMEDIARIES-8.8%
Ba3 2,500 First Dominion Funding II**,
Series 1-A, Class D-1,
11.61%, 4/25/14 ..................... 2,500,000
B- 2,000 Penhall International Corp., Sr. Note,
12.00%, 8/1/06 ...................... 2,000,000
BB- 1,000 United Rentals, Inc.**, Sr. Sub. Note,
9.00%, 4/1/09 ....................... 995,000
Ba3 3,000 Willis Corroon Corp.**, Sr. Sub. Note,
9.00%, 2/1/09 ....................... 3,037,500
----------
8,532,500
----------
FOOD SERVICE-1.7%
B- 2,000 Ameriserve Food Distribution, Inc.,
Sr. Sub. Note,
10.13%, 7/15/07 ..................... 1,640,000
----------
FOREST PRODUCTS-2.8%
B- 1,000 Panolam Industries International,
Inc.**, Sr. Sub. Note,
11.50%, 2/15/09 ..................... 1,050,000
CCC+ 2,000 Repap New Brunswick, Inc., 2nd
Priority Sr. Sec. Note,
10.63%, 4/15/05 ..................... 1,620,000
----------
2,670,000
----------
HEALTH CARE-6.2%
CCC+ 2,635 Fountain View, Inc., Sr. Sub. Note,
11.25%, 4/15/08 ..................... 2,200,225
B3 3,325 Mariner Post-Acute Network, Inc., Sr.
Sub. Note,
9.50%, 11/1/07 ...................... 1,729,000
BB- 2,000 Polaroid Corp., Note,
11.50%, 2/15/06 ..................... 2,090,000
----------
6,019,225
----------
HOTELS & CASINO-5.2%
BB 3,000 Host Marriott, L.P.**, Sr. Note,
Series D, 8.38%, 2/15/06 ............ 3,030,000
</TABLE>
See Notes to Financial Statements.
4
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
RATING* (000) DESCRIPTION (NOTE 1)
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C>
HOTELS & CASINO (CONT'D)
B $ 2,000 Meristar Hospitality Corp.**,
Sr. Sub. Note,
8.75%, 8/15/07 ...................... $ 1,982,500
-----------
5,012,500
-----------
INDUSTRIAL EQUIPMENT-15.1%
B+ 2,500 High Voltage Engineering Corp.,
Sr. Note,
10.50%, 8/15/04 ..................... 2,375,000
B- 2,000 Muzak LP**, Sr. Sub. Note,
9.88%, 3/15/09 ...................... 2,040,000
B 4,000 National Equipment Services, Inc.,
Series C, 10.00%, 11/30/04 .......... 4,160,000
B 2,000 Neff Corp.**, Sr. Sub. Note,
10.25%, 6/1/08 ...................... 2,080,000
B- 1,000 Precision Partners, Inc.**,
Sr. Sub. Note,
12.00%, 3/15/09 ..................... 1,030,000
NR 1,500 Rhythms Netconnections, Inc.**,
Sr. Note,
12.75%, 4/15/09 ..................... 1,492,500
BB+ 1,500 Veritas DGC, Inc., Sr. Note,
Series C, 9.75%, 10/15/03 ........... 1,530,000
-----------
14,707,500
-----------
LEISURE-6.7%
B- 3,000 AMC Entertainment, Inc.**,
Sr. Sub. Note,
9.50%, 2/1/11 ....................... 2,932,500
B 2,000 Carmike Cinemas, Inc.**,
Sr. Sub. Note,
9.38%, 2/1/09 ....................... 2,010,000
B- 1,500 Phoenix Color Corp.**, Sr. Sub. Note,
10.38%, 2/1/09 ...................... 1,522,500
-----------
6,465,000
-----------
NONFERROUS METALS & MINERALS-4.4%
BB- 2,000 Golden Northwest Aluminum, Inc.**,
1st Mortgage Note,
12.00%, 12/15/06 .................... 2,070,000
BB- 2,250 Wheeling Pittsburgh Corp., Sr. Note,
9.25%, 11/15/07 ..................... 2,250,000
-----------
4,320,000
-----------
OIL & GAS-3.0%
R&B Falcon Corp.**, Sr. Note,
Ba3 2,000 9.50%, 12/15/08 ..................... 1,900,000
Sr. Sec. Note,
BB- 1,000 11.00%, 3/15/06 ..................... 1,050,000
-----------
2,950,000
-----------
RETAILERS-6.7%
B3 4,000 Hollywood Entertainment Corp.,
Sr. Sub. Note,
Series B, 10.63%, 8/15/04 ........... 4,000,000
B- 2,000 Supreme International Corp.**,
Sr. Sub. Note,
12.25%, 4/1/06 ...................... 2,020,000
B- 500 True Temper Sports, Inc.**,
Sr. Sub. Note,
10.88%, 12/1/08 ..................... 455,000
-----------
6,475,000
-----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
RATING* (000) DESCRIPTION (NOTE 1)
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C>
TELECOMMUNICATION-25.6%
B1 $ 1,000 Global Crossings Holdings Ltd.,
Sr. Note, 9.63%, 5/15/08 ............ $ 1,112,500
B3 4,500 Intermedia Communications, Inc.**,
Sr. Sub. Note,
Zero Coupon, (12.25%
commencing 3/1/04), 3/1/09 .......... 2,835,000
B 3,500 IPC Information Systems, Inc.,
Sr. Note,
Zero Coupon, (10.875%
commencing 11/1/01), 5/1/08 ......... 2,677,500
BB- 500 Primedia, Inc., Sr. Note,
8.50%, 2/1/06 ....................... 517,500
B+ 2,000 Mcleod USA, Inc.**, Sr. Note,
8.13%, 2/15/09 ...................... 1,985,000
B2 1,000 Nextel Communications, Inc.**,
Sr. Note, 12.00%, 11/1/08 ........... 1,180,000
B3 7,000 Nextel Partners, Inc.**, Sr. Note,
Zero Coupon, (14.00%
commencing 2/1/04), 2/1/09 ........... 4,270,000
NR 3,000 Northeast Optic, Sr. Note,
12.75%, 8/15/08 ..................... 3,165,000
NR 5,000 Pinnacle Holdings, Inc., Sr. Note,
Zero Coupon, (10.00%
commencing 3/15/03), 3/15/08 ........ 3,150,000
CCC 4,000 Teligent, Inc., Sr. Note,
11.50%, 12/1/07 ..................... 4,000,000
-----------
24,892,500
-----------
Total corporate bonds-136.8%
(cost $130,218,769).................. 132,848,031
-----------
SHARES
----------
PREFERRED STOCK-3.5%
TELECOMMUNICATION-3.5%
CCC 3,169 Nextel Communications, Inc.**,
Series E, 11.13%, 2/15/10 PIK
(cost $2,912,600) .................... 3,445,740
-----------
PRINCIPAL
AMOUNT
(000)
----------
SENIOR BANK LOAN-2.1%
HEALTH CARE-2.1%
B- 2,000 Oxford Health Plans, Inc.,
9.34%, 5/13/03 (cost $2,010,000)..... 2,002,500
-----------
TOTAL LONG-TERM INVESTMENTS-142.4%
(cost $135,141,369).................. 138,296,271
-----------
SHORT-TERM INVESTMENT-0.4%
DISCOUNT NOTE-0.4%
335 Federal Home Loan Bank,
4.80%, 5/3/99
(cost $334,911)...................... 334,911
-----------
TOTAL INVESTMENTS-142.8%
(cost $135,476,280; Note 3).......... 138,631,182
Liabilities in excess of other
assets-(42.8)% ...................... (41,540,717)
-----------
NET ASSETS-100% ...................... $97,090,465
===========
</TABLE>
- ---------------------
* Using the higher of Standard & Poor's, Moody's or Fitch's rating.
** Private placements restricted as to resale.
=========================================
KEY TO ABBREVIATIONS
PIK - Payment in kind.
=========================================
See Notes to Financial Statements.
5
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK HIGH YIELD TRUST
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1999
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
Investments, at value (cost $135,476,280) (Note 1 $138,631,182
Receivable for investments sold .................. 3,915,214
Interest receivable .............................. 3,048,637
------------
145,595,033
------------
LIABILITIES
Loan payable (Note 4) ............................ 44,000,000
Payable for investments purchased ................ 4,133,722
Interest payable ................................. 201,667
Investment advisory fee payable (Note 2) ......... 120,300
Administration fee payable (Note 2) .............. 11,457
Other accrued expenses ........................... 37,422
-----------
48,504,568
-----------
NET ASSETS ....................................... $97,090,465
===========
Net assets were comprised of:
Common stock, at par (Note 5) .................. $ 6,307
Paid-in capital in excess of par ................ 94,467,560
-----------
94,473,867
Undistributed net investment income ............. 635,481
Accumulated net realized losses ................. (1,173,785)
Net unrealized appreciation ..................... 3,154,902
-----------
Net assets, April 30, 1999 ....................... $97,090,465
===========
NET ASSET VALUE PER SHARE:
($97,090,465 o 6,306,667 shares of
common stock issued and outstanding) ........... $15.39
======
</TABLE>
- --------------------------------------------------------------------------------
THE BLACKROCK HIGH YIELD TRUST
STATEMENT OF OPERATIONS
FOR THE PERIOD DECEMBER 23, 1998*
THROUGH APRIL 30, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
NET INVESTMENT INCOME
Income
Interest (net of premium amortization of $17,392
and interest expense of $405,750) ................ $3,571,966
----------
Expenses
Investment advisory .............................. 424,992
Administration ................................... 40,475
Audit ............................................ 14,000
Directors ........................................ 14,000
Custodian ........................................ 12,000
Reports to shareholders .......................... 12,000
Legal ............................................ 10,000
Transfer agent ................................... 8,000
Miscellaneous .................................... 6,455
----------
Total operating expenses ........................ 541,922
----------
Net investment income .............................. 3,030,044
----------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (NOTE 3)
Net realized loss on investments ................... (1,173,785)
Net change in unrealized appreciation (depreciation)
on investments ................................... 3,154,902
----------
Net gain on investments ............................ 1,981,117
----------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS .......................... $5,011,161
==========
</TABLE>
- ----------------
* Commencement of investment operations (Note 1).
See Notes to Financial Statements.
6
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK HIGH YIELD TRUST
STATEMENT OF CASH FLOWS
FOR THE PERIOD DECEMBER 23, 1998*
THROUGH APRIL 30, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
RECONCILIATION OF NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS TO NET CASH FLOWS
USED FOR OPERATING ACTIVITIES
Net increase in net assets resulting from operations ......... $ 5,011,161
-------------
Increase in investments ...................................... (136,650,065)
Net realized loss ............................................ 1,173,785
Increase in unrealized appreciation .......................... (3,154,902)
Increase in interest receivable .............................. (3,048,637)
Increase in receivable for investments sold .................. (3,915,214)
Decrease in receivable from BlackRock Advisors, Inc. 63,500
Decrease in accrued organizational costs ..................... (63,500)
Increase in payable for investments purchased ................ 4,133,722
Decrease in prepaid offering costs ........................... 110,000
Increase in interest payable ................................. 201,667
Increase in accrued expenses and other liabilities ........... 59,179
-------------
Total adjustments ........................................... (141,090,465)
-------------
Net cash flows used for operating activities ................. $(136,079,304)
=============
INCREASE (DECREASE) IN CASH
Net cash flows used for operating activities ................. $(136,079,304)
-------------
Cash flows provided by financing activities:
Net proceeds from initial public offering of Trust
shares ..................................................... 94,373,867
Increase in loans ........................................... 44,000,000
Cash dividends paid ......................................... (2,394,563)
-------------
Net cash flows provided by financing activities .............. 135,979,304
-------------
Net decrease in cash ........................................ (100,000)
Cash at beginning of period ................................. 100,000
-------------
Cash at end of period ....................................... $ 0
=============
</TABLE>
- ----------------
* Commencement of investment operations (Note 1).
- --------------------------------------------------------------------------------
THE BLACKROCK HIGH YIELD TRUST
STATEMENTS OF CHANGES
IN NET ASSETS
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE PERIOD
DECEMBER 23, 1998*
THROUGH
APRIL 30, 1999
-------------------
<S> <C>
INCREASE (DECREASE) IN
NET ASSETS
Operations:
Net investment income ................ $ 3,030,044
Net realized loss .................... (1,173,785)
Net change in unrealized
appreciation (depreciation) ......... 3,154,902
-----------
Net increase in
net assets resulting from
operations .......................... 5,011,161
Dividends from
net investment income ................ (2,394,563)
Net proceeds from initial public
offering of Trust shares ............. 94,373,867
-----------
Total increase ......................... 96,990,465
-----------
NET ASSETS
Beginning of period .................... 100,000
-----------
End of period .......................... $97,090,465
===========
</TABLE>
- ----------------
* Commencement of investment operations (Note 1).
See Notes to Financial Statements.
7
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK HIGH YIELD TRUST
FINANCIAL HIGHLIGHTS (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE PERIOD
DECEMBER 23, 1998**
THROUGH
APRIL 30, 1999
--------------------
<S> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period .......................... $ 15.00
-------
Net investment income (net of $0.06 interest expense) ......... .48
Net realized and unrealized gain on investments ............... .31
-------
Net increase from investment operations ....................... .79
-------
Dividends from net investment income .......................... (.38)
-------
Capital charge with respect to issuance of shares ............. (.02)
-------
Net asset value, end of period* ............................... $ 15.39
=======
Per share market value, end of period* ........................ $ 14.50
=======
TOTAL INVESTMENT RETURN+ ..................................... (.86%)
========
RATIOS TO AVERAGE NET ASSETS:
Operating expenses@ ........................................... 1.64%+++
Net investment income ......................................... 9.17%+++
SUPPLEMENTAL DATA:
Average net assets (in thousands) ............................. $94,226
Portfolio turnover ............................................ 50%
Net assets, end of period (in thousands) ...................... $97,090
Loans outstanding, end of period (in thousands) ............... $44,000
Asset coverage++ .............................................. $ 3,211
</TABLE>
- ----------
* Net asset value and market value are published in THE WALL STREET JOURNAL
each Monday.
** Commencement of investment operations (Note 1).
@ The ratio of operating expenses, including interest expense to average net
assets was 2.87%.
+ Total investment return is calculated assuming a purchase of common stock
at the current market price on the first day and a sale at the current
market price on the last day of the period reported. Dividends and
distributions, if any, are assumed for purposes of this calculation, to be
reinvested at prices obtained under the Trust's dividend reinvestment plan.
Total investment return does not reflect brokerage commissions. Total
investment return for periods less than one full year are not annualized.
++ Per $1,000 of loans outstanding.
+++Annualized.
The information above represents the unaudited operating performance for a
share of common stock outstanding, total investment return, ratios to average
net assets and other supplemental data for the period indicated. This
information has been determined based upon financial information provided in
the financial statements and market value data for the Trust's shares.
See Notes to Financial Statements.
8
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
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NOTE 1. ORGANIZATION The BlackRock High Yield
ACCOUNTING Trust (the "Trust"), was orga-
POLICIES nized on August 10, 1998 as a
Delaware business trust, and
is registered as a diversified, closed-end management investment company under
the Investment Company Act of 1940. The Trust had no transactions until December
15, 1998 when it sold 6,667 shares of common stock for $100,000 to BlackRock
Financial Management, Inc. Investment operations commenced on December 23, 1998.
The investment objective of the Trust is to generate high current income with a
secondary objective of capital appreciation. The ability of issuers of debt
securities held by the Trust to meet their obligations may be affected by
economic developments in a specific industry or region. No assurance can be
given that the Trust's investment objective will be achieved.
The following is a summary of significant accounting policies followed by
the Trust.
SECURITIES VALUATION: The Trust values debt securities, preferred stock and
service bank loans on the basis of current market quotations provided by
dealers or pricing services approved by the Trust's Board of Directors. In
determining the value of a particular security, pricing services may use
certain information with respect to transactions in such securities, quotations
from dealers, market transactions in comparable securities, various
relationships observed in the market between securities, and calculated yield
measures based on valuation technology commonly employed in the market for such
securities. Any securities or other assets for which such current market
quotations are not readily available are valued at fair value as determined in
good faith under procedures established by and under the general supervision
and responsibility of the Trust's Board of Directors.
Short-term securities which mature in 60 days or less are valued at
amortized cost, if their term to maturity from date of purchase is 60 days or
less. Short-term securities with a term to maturity greater than 60 days from
the date of purchase are valued at current market quotations until maturity.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on the trade date. Realized and unrealized gains and losses are
calculated on the identified cost basis. Interest income is recorded on the
accrual basis and the Trust accretes discount or amortizes premium on
securities purchased using the interest method. Expenses are recorded on the
accrual basis which may require the use of certain estimates by management.
TAXES: It is the Trust's intention to continue to meet the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute sufficient amounts of its taxable income to shareholders. Therefore,
no Federal income tax provision is required.
DIVIDENDS AND DISTRIBUTIONS: The Trust declares and pays dividends and
distributions monthly, first from net investment income then from realized
short-term capital gains and other sources, if necessary. Net long-term capital
gains, if any, in excess of loss carryforwards are distributed at least
annually. Dividends and distributions are recorded on the ex-dividend date.
Income distributions and capital gain distributions are determined in
accordance with income tax regulations which may differ from generally accepted
accounting principles.
DEFERRED ORGANIZATION EXPENSES: A total of $63,500 was incurred in connection
with the organization of the Trust. All such costs were reimbursed by the
Adviser.
ESTIMATES: The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
NOTE 2. AGREEMENTS The Trust has an Investment Advisory
Agreement and an Administration
Agreement with BlackRock Financial
Management, Inc. (the "Adviser"), a
wholly-owned corporate subsidiary of
BlackRock Advisors, Inc., which is an
indirect majority-owned subsidiary of PNC Bank, N.A., and an Administration
Agreement with Prudential Investments Fund Management LLC ("PIFM")
(collectively with the Advisor, the "Administrators"), an indirect wholly-owned
subsidiary of The Prudential Insurance Co. of America.
The investment fee paid to the Adviser is computed weekly and payable
monthly at an annual rate of 1.05% of the Trust's managed assets. The
administration fee paid to each of the Administrators is also computed weekly
and payable monthly at an annual rate of 0.05% of the Trust's managed assets,
or net assets plus leverage.
9
<PAGE>
Pursuant to the agreements, the Adviser provides continuous supervision
of the investment portfolio and pays the compensation of officers of the Trust.
The Administrators pay occupancy and certain clerical and accounting costs of
the Trust. The Trust bears all other costs and expenses.
NOTE 3. PORTFOLIO Purchases and sales of
SECURITIES investment securities, other
than short-term investments
for the period ended April 30, 1999 aggregated $196,028,745 and $60,073,152,
respectively.
The Trust may invest in securities which are not readily marketable,
including those which are restricted as to disposition under securities law
("restricted securities"). At April 30, 1999, the Trust held 42% of its
portfolio assets in securities restricted as to resale.
The federal income tax basis of the Trust's investments at April 30,1999
was substantially the same as the basis for financial reporting and,
accordingly, net unrealized appreciation for federal income tax purposes was
$3,154,902 (gross unrealized appreciation-$4,751,163, gross unrealized
depreciation-$1,596,261).
NOTE 4. BORROWINGS LOAN PAYABLE: The Trust has a $47
million dollar committed credit
facility (the "facility"). Under the terms of the facility, the fund borrows at
the London Interbank Overnight Rate ("LIBOR") plus facility and administrative
fees. In addition, the fund pays a liquidity fee on the unused portion of the
facility. The fund may borrow up to 33-1/3% of its total assets up to the
committed amount. In accordance with the terms of the debt agreement, the fund
has pledged its portfolio assets as collateral for the bank loan.
For the period February 10, 1999 (commencement of borrowings) through
April 30, 1999, the Fund borrowed a daily weighted average balance of
$32,367,089 at a weighted average interest rate at 5.44%.
REVERSE REPURCHASE AGREEMENTS: The Trust may enter into reverse repurchase
agreements with qualified, third party broker-dealers as determined by and
under the direction of the Trust's Board of Directors. Interest on the value of
reverse repurchase agreements issued and outstanding is based upon competitive
market rates at the time of issuance. At the time the Trust enters into a
reverse repurchase agreement, it establishes and maintains a segregated account
with the lender, containing liquid high grade securities having a value not
less than the repurchase price including accured interest, of the reverse
repurchase aggrement. The Trust did not enter into any reverse repurchase
agreements during the period.
NOTE 5. CAPITAL There are an unlimited amount of $.01
par value common stock authorized. Of
the 6,306,667 shares outstanding at April 30, 1999, the Adviser owned 6,667
shares. During the period ended April 30, 1999 the Trust issued 5,800,000 shares
in connection with it's initial public offering and 500,000 shares in connection
with the exercise of the underwriters over allotment option. Offering costs of
$126,133 incurred in connection with the public offering of common stock have
been changed to paid-in capital in excess of par. Prudential Securities Inc., an
affiliate of PIFM, advised the Trust that it received approximately $571,000 in
underwriting fees.
NOTE 6. DIVIDENDS Since April 30, 1999, the Board of
Directors of the Trust declared a
dividend from undistributed earnings of $0.126563 per share payable May 28, 1999
to shareholders of record on May 15, 1999.
10
<PAGE>
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THE BLACKROCK HIGH YIELD TRUST
DIVIDEND REINVESTMENT PLAN
- --------------------------------------------------------------------------------
Pursuant to the Trust's Dividend Reinvestment Plan (the "Plan"),
shareholders are automatically enrolled to have all distributions of dividends
and capital gains reinvested by State Street Bank and Trust Company (the "Plan
Agent") in Trust shares pursuant to the Plan. Shareholders who elect not to
participate in the Plan will receive all distributions in cash paid by check in
United States dollars 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
transfer agent, as dividend disbursing agent.
The Plan Agent serves as agent for the shareholders in administering the
Plan. After the Trust declares a dividend or determines to make a capital gain
distribution, the transfer 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
New York Stock Exchange or elsewhere ("open-market purchases"). If, on the
dividend payment date, the net asset value per share 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 transfer 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 net asset
value per share (but in no event less than 95% of the then current market price
per share) on the date the shares are issued. If, on the dividend payment date,
the net asset value per share is greater than the market value per share (such
condition being referred to herein as "market discount"), the transfer agent
will invest the dividend amount in shares acquired on behalf of the
participants in open-market purchases.
Participants in the Plan may withdraw from the Plan upon written notice to
the Plan Agent and will receive certificates for whole Trust shares and a cash
payment will be made for any fraction of a Trust share.
The Plan Agent's fees for the handling of the reinvestment of dividends
and distributions will be paid by the 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, state or local income taxes that
may be payable on such dividends or distributions.
The Trust reserves the right to amend or terminate the Plan as applied to
any dividend or distribution paid subsequent to written notice of the change
sent to all shareholders of the Trust at least 90 days before the record date
for the dividend or distribution. The Plan also may be amended or terminated by
the Plan Agent upon at least 90 days' written notice to all shareholders of the
Trust. All correspondence concerning the Plan should be directed to the Plan
Agent at (800) 699-1BFM. The addresses are on the front of this report.
- --------------------------------------------------------------------------------
ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
There have been no material changes in the Trust's investment objectives
or policies that have not been approved by the shareholders or to its charter
or by-laws or in the principal risk factors associated with investment in the
Trust. There have been no changes in the persons who are primarily responsible
for the day-to-day management of the Trust's portfolio.
YEAR 2000 READINESS DISCLOSURE. The Trust is currently in the process of
evaluating its information technology infrastructure for Year 2000 compliance.
Substantially all of the Trust's information systems are supplied by the
Adviser. The Adviser has advised the Trust that it is currently evaluating
whether such systems are year 2000 compliant and that it expects to incur costs
of up to approximately five hundred thousand dollars to complete such
evaluation and to make any modifications to its systems as may be necessary to
achieve Year 2000 compliance. The Adviser has advised the Trust that it has
fully tested its systems for Year 2000 compliance. The Trust may be required to
bear a portion of such cost incurred by the Adviser in this regard. The Adviser
has advised the Trust that it does not anticipate any material disruption in
the operations of the Trust as a result of any failure by the Adviser to
achieve Year 2000 compliance. There can be no assurance that the costs will not
exceed the amount referred to above or that the Trust will not experience a
disruption in operations.
The Adviser has advised the Trust that it is in the process of evaluating
the Year 2000 compliance of various suppliers of the Adviser and the Trust. The
Adviser has advised the Trust that it has communicated with such suppliers to
determine their Year 2000 compliance status and the extent to which the Adviser
or the Trust could be affected by any supplier's Year 2000 compliance issues.
To date, the Adviser has received responses from all such suppliers with
respect to their Year 2000 compliance, and there can be no assurance that the
systems of such suppliers, who are beyond the Trust's control, will be Year
2000 compliant. In the event that any of the Trust's significant suppliers do
not successfully and timely achieve Year 2000 compliance, the Trust's business
or operations could be adversely affected. The Adviser has advised the Trust
that it is in the process of preparing a contingency plan for Year 2000
compliance by its suppliers. There can be no assurance that such contingency
plan will be successful in preventing a disruption of the Trust's operations.
The Trust is designating this disclosure as its Year 2000 readiness
disclosure for all purposes under the Year 2000 Information and Readiness
Disclosure Act and the foregoing information shall constitute a Year 2000
statement for purposes of that Act.
11
<PAGE>
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THE BLACKROCK HIGH YIELD TRUST
INVESTMENT SUMMARY
- --------------------------------------------------------------------------------
THE TRUST'S INVESTMENT OBJECTIVE
The BlackRock High Yield Trust's primary investment objective is to provide
high current income with a secondary objective of capital appreciation. To this
end, the Trust will be invested primarily in a diversified portfolio of high
yield bonds and other income securities.
WHO MANAGES THE TRUST?
BlackRock Financial Management, Inc. ("BlackRock") is an SEC-registered
investment adviser. BlackRock and its affiliates currently manage over $141
billion on behalf of taxable and tax-exempt clients worldwide. Strategies
include fixed income, equity and cash and may incorporate both domestic and
international securities. Domestic fixed income strategies utilize the
government, mortgage, corporate and municipal bond sectors. BlackRock manages
twenty-one closed-end funds that are traded on either the New York or American
stock exchanges, and a $25 billion family of open-end equity and bond funds.
Current accounts number over 450, domiciled in the United States and overseas.
WHAT CAN THE TRUST INVEST IN?
Under normal market conditions, the Trust will invest at least 80% of its
assets in high yield securities. High yield securities are generally income
securities which, if rated, are rated lower than Baa by Moody's Investors
Service (or "Moody's") , lower than BBB by Standard & Poor's Ratings Group (or
"S&P") or similarly rated by other rating agencies. These securities may
include corporate bonds, zero coupon bonds, bank loans, mezzanine investments,
collateralized bond obligations, mortgage-related, asset-backed securities and
foreign securities.
WHAT IS THE ADVISER'S INVESTMENT STRATEGY?
In pursuing the Trust's investment objective by investing in high yield
securities, the Adviser will seek to identify issuers and industries that it
believes are likely to experience stable or improving financial conditions. The
Adviser will also consider relative value among issuers based on anticipated
cash flow, interest or dividend coverage, asset coverage and earnings
prospects. The Adviser will apply its risk management framework by using
proprietary technology and value-oriented security selection to identify the
securities that are expected to deliver the highest yield for the amount of
risk assumed. The Trust's investment strategy emphasizes risk management
through the following: creating a diversified portfolio of securities within
various sectors of the high yield market; performing individual,
company-by-company credit research to seek the selection of securities which
the Adviser believes will be able to meet its debt obligations; performing
sector analysis to determine the sectors which the Advisor expects to have
stable or improving credit quality in the future; and utilizing the expertise
and experience of the management team to make investment decisions.
HOW ARE THE TRUST'S SHARES PURCHASED AND SOLD? DOES THE TRUST PAY DIVIDENDS
REGULARLY?
The Trust's shares are traded on the New York Stock Exchange which provides
investors with liquidity on a daily basis. Orders to buy or sell shares of the
Trust must be placed through a registered broker or financial adviser. The
Trust pays monthly dividends which are typically paid on the last business day
of the month. For shares held in the shareholder's name, dividends may be
reinvested in additional shares of the fund through the Trust's transfer agent,
State Street Bank & Trust Company. Investors who wish to hold shares in a
brokerage account should check with their financial adviser to determine
whether their brokerage firm offers dividend reinvestment services.
LEVERAGE CONSIDERATIONS IN THE TRUST
Under current market conditions, leverage increases the income earned by the
Trust. The Trust employs leverage primarily through the utilization of its
committed credit facility. Leverage permits the Trust to borrow money at
short-term rates and reinvest that money in longer-term assets which typically
offer higher interest rates. The difference between the cost of the borrowed
funds and the income earned on the proceeds that are invested in longer term
assets is the benefit to the Trust from leverage. In general, the portfolio is
typically leveraged at approximately 331|M/3% of total assets.
Leverage also increases the duration (or price volatility of the net assets) of
the Trust, which can improve the performance of the fund in a declining rate
environment, but can cause net assets to decline faster than the market in a
rising environment.
12
<PAGE>
BlackRock's portfolio managers continuously monitor and regularly review the
Trust's use of leverage and the Trust may reduce, or unwind, the amount of
leverage employed should BlackRock consider that reduction to be in the best
interests of the shareholders.
SPECIAL CONSIDERATIONS AND RISK FACTORS RELEVANT TO THE TRUST
THE TRUST IS INTENDED TO BE A LONG-TERM INVESTMENT AND IS NOT A SHORT-TERM
TRADING VEHICLE.
INVESTMENT OBJECTIVE. Although the investment objective of the Trust is to
provide high current income, there can be no assurance that this objective will
be achieved.
LOWER-GRADE SECURITIES. As a "high yield fund," the majority of the Trust's
assets will be invested in high-risk, high yield securities of lower grade
quality, which are commonly referred to as "junk bonds." With its portfolio
consisting predominantly of lower grade securities, the Trust is exposed to
greater risks than a fund that owns higher grade securities. Because of the
substantial risks associated with lower grade securities, an investor could
lose money on an investment in Shares of the Trust, both in the short-term and
the long-term. An investor should consider some risks including, but not
limited to, credit risk.
CREDIT RISK. Credit risk refers to an issuer's ability to make payments of
principal and interest when they are due. Because the Trust will own securities
with low credit quality, it will be subject to a high level of credit risk. The
credit quality of such securities is considered speculative by rating agencies
with respect to the issuer's ability to pay interest or principal. The prices
of lower grade securities are more sensitive to negative corporate
developments, such as a decline in profits, or adverse economic conditions,
such as recession, than are the prices of higher grade securities. Securities
that have longer maturities or that do not make regular interest payments also
fluctuate more in price in response to negative corporate or economic news.
Therefore, lower grade securities may experience high default rates, which
would mean that the Trust may lose some of its investment in such securities,
which would adversely affect the Trust's net asset value and ability to make
distributions. The effects of this default risk are significantly greater for
the holders of lower grade securities often are unsecured and subordinated to
the payment rights of other creditors of the issuer.
LEVERAGE. The Trust utilizes leverage through its committed credit facility,
which involves special risks. The Trust's net asset value and market value may
be more volatile due to its use of leverage.
MARKET PRICE OF SHARES. The shares of closed-end investment companies such as
the Trust trade on the New York Stock Exchange and as such are subject to
supply and demand influences. As a result, shares may trade at a discount or a
premium to their net asset value.
CORPORATE DEBT SECURITIES. The value of corporate debt securities generally
varies inversely with changes in prevailing market interest rates. The Trust
may be subject to certain reinvestment risks in environments of declining
interest rates.
ZERO COUPON SECURITIES. Such securities receive no cash flows prior to
maturity; therefore, interim price movement on the securities are generally
more sensitive to interest rate movements then securities that make periodic
coupon payments. These securities appreciate in value over time and can play an
important role in helping the Trust achieve its primary objectives.
ILLIQUID SECURITIES. The Trust may invest in securities that are illiquid,
although under current market conditions the Trust expects to do so to only a
limited extent. These securities involve special risks.
NON-U.S. SECURITIES. The Trust may invest less than 35% of its total assets in
non-U.S. dollar-denominated securities which involve special risks such as
currency, political and economic risks.
ANTITAKEOVER PROVISIONS. Certain antitakeover provisions will make a change in
the Trust's business or management more difficult without the approval of the
Trust's Board of Directors and may have the effect of depriving shareholders of
an opportunity to sell their shares at a premium above the prevailing market
price.
13
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK HIGH YIELD TRUST
GLOSSARY
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
CLOSED-END FUND: Investment vehicle which initially offers a fixed number of shares and
trades on a stock exchange. The fund invests in a portfolio of securities in
accordance with its stated investment objectives and policies.
COMMERCIAL MORTGAGE Mortgage-backed securities secured or backed by mortgage loans on commercial
properties. BACKED SECURITIES (CMBS):
DISCOUNT: When a fund's net asset value is greater than its stock price the fund is
said to be trading at a discount.
DIVIDEND: This is income generated by securities in a portfolio and distributed to
shareholders after the deduction of expenses. This Trust declares and pays
dividends on a monthly basis.
DIVIDEND REINVESTMENT: Shareholders may elect to have all distributions of dividends and capital
gains automatically reinvested into additional shares of the Trust.
GOVERNMENT SECURITIES: Securities issued or guaranteed by the U.S. government, or one of its
agencies or instrumentalities, such as GNMA (Government National Mortgage
Association), FNMA (Federal National Mortgage Association) and FHLMC
(Federal Home Loan Mortgage Corporation).
MARKET PRICE: Price per share of a security trading in the secondary market. For a
closed-end fund, this is the price at which one share of the fund trades on
the stock exchange. If you were to buy or sell shares, you would pay or
receive the market price.
NET ASSET VALUE (NAV): Net asset value is the total market value of all securities and other assets
held by the Trust, plus income accrued on its investments, minus any
liabilities including accrued expenses, divided by the total number of
outstanding shares. It is the underlying value of a single share on a given
day. Net asset value for the Trust is calculated weekly and published in
BARRON'S on Saturday, THE NEW YORK TIMES and THE WALL STREET JOURNAL on
Monday.
PREMIUM: When a fund's stock price is greater than its net asset value, the fund is
said to be trading at a premium.
</TABLE>
14
<PAGE>
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BLACKROCK FINANCIAL MANAGEMENT, INC.
SUMMARY OF CLOSED-END FUNDS
- --------------------------------------------------------------------------------
TAXABLE TRUSTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
STOCK MATURITY
SYMBOL DATE
PERPETUAL TRUSTS ---------- ---------
<S> <C> <C>
The BlackRock Income Trust Inc. BKT N/A
The BlackRock North American Government Income Trust Inc. BNA N/A
The BlackRock High Yield Trust BHY N/A
TERM TRUSTS
The BlackRock 1999 Term Trust Inc. BNN 12/99
The BlackRock Target Term Trust Inc. BTT 12/00
The BlackRock 2001 Term Trust Inc. BLK 06/01
The BlackRock Strategic Term Trust Inc. BGT 12/02
The BlackRock Investment Quality Term Trust Inc. BQT 12/04
The BlackRock Advantage Term Trust Inc. BAT 12/05
The BlackRock Broad Investment Grade 2009 Term Trust Inc. BCT 12/09
</TABLE>
TAX-EXEMPT TRUSTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
STOCK MATURITY
SYMBOL DATE
PERPETUAL TRUSTS --------- ---------
<S> <C> <C>
The BlackRock Investment Quality Municipal Trust Inc. BKN N/A
The BlackRock California Investment Quality Municipal Trust Inc. RAA N/A
The BlackRock Florida Investment Quality Municipal Trust RFA N/A
The BlackRock New Jersey Investment Quality Municipal Trust Inc. RNJ N/A
The BlackRock New York Investment Quality Municipal Trust Inc. RNY N/A
TERM TRUSTS
The BlackRock Municipal Target Term Trust Inc. BMN 12/06
The BlackRock Insured Municipal 2008 Term Trust Inc. BRM 12/08
The BlackRock California Insured Municipal 2008 Term Trust Inc. BFC 12/08
The BlackRock Florida Insured Municipal 2008 Term Trust BRF 12/08
The BlackRock New York Insured Municipal 2008 Term Trust Inc. BLN 12/08
The BlackRock Insured Municipal Term Trust Inc. BMT 12/10
</TABLE>
IF YOU WOULD LIKE FURTHER INFORMATION PLEASE DO NOT HESITATE TO CALL BLACKROCK
AT (800) 227-7BFM (7236)
OR CONSULT WITH YOUR FINANCIAL ADVISOR.
15
<PAGE>
BLACKROCK
DIRECTORS
Laurence D. Fink, CHAIRMAN
Andrew F. Brimmer
Richard E. Cavanagh
Kent Dixon
Frank J. Fabozzi
James Grosfeld
James Clayburn La Force, Jr.
Walter F. Mondale
Ralph L. Schlosstein
OFFICERS
Ralph L. Schlosstein, PRESIDENT
Scott Amero, VICE PRESIDENT
Keith T. Anderson, VICE PRESIDENT
Michael C. Huebsch, VICE PRESIDENT
Robert S. Kapito, VICE PRESIDENT
Dennis Schaney, VICE PRESIDENT
Richard M. Shea, VICE PRESIDENT/TAX
Henry Gabbay, TREASURER
James Kong, ASSISTANT TREASURER
Karen H. Sabath, SECRETARY
INVESTMENT ADVISER AND ADMINISTRATOR
BlackRock Financial Management, Inc.
345 Park Avenue
New York, NY 10154
(800) 227-7BFM
ADMINISTRATOR
Prudential Investments Fund Management LLC
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
CUSTODIAN AND TRANSFER AGENT
State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171
(800) 699-1BFM
INDEPENDENT AUDITORS
Deloitte & Touche LLP
Two World Financial Center
New York, NY 10281-1434
LEGAL COUNSEL
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, NY 10022
The accompanying financial statements as of April 30, 1999 were not
audited and accordingly no opinion is expressed on them.
This report is for shareholder information. This is not a prospectus intended
for use in the purchase or sale of any securities.
THE BLACKROCK HIGH YIELD TRUST
c/o Prudential Investments Fund Management LLC
Gateway Center Three
100 Mulberry St.
Newark, NJ 07102-4077
(800) 227-7BFM
- ------------------------------------
THE BLACKROCK
HIGH YIELD
TRUST
===================
SEMI-ANNUAL REPORT
APRIL 30, 1999
[GRAPHIC OMITTED]
[LOGO] Printed on recycled paper 092472-10-6
