BLACKROCK TARGET TERM TRUST INC, N-30D, 1999-08-27

BLACKROCK TARGET TERM TRUST INC
N-30D, 1999-08-27

Previous: MORGAN STANLEY DEAN WITTER INTERMEDIATE INCOME SECURITIES, 485APOS, 1999-08-27

Next: ALLSTATE LIFE INSURANCE CO OF NEW YORK, S-3, 1999-08-27

- --------------------------------------------------------------------------------
THE BLACKROCK TARGET TERM TRUST INC.
SEMI-ANNUAL REPORT TO SHAREHOLDERS
REPORT OF INVESTMENT ADVISER
- --------------------------------------------------------------------------------

July 31, 1999

Dear Shareholder:

Since the Trust's last 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, the Federal Reserve's Federal Open Market
Committee increased short-term interest rates by 25 basis points in June, citing
a concern that inflation might start to accelerate.

In tandem with the Fed's recent rate tightening, BlackRock has taken a
defensive interest rate stance. With the Treasury curve currently pricing in the
possibility of another Fed tightening by year-end, 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 semi-annual 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

<PAGE>

July 31, 1999

Dear Shareholder:

We are pleased to present the semi-annual report for The BlackRock Target
Term Trust Inc. ("the Trust") for the six months ended June 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 "BTT". The
Trust's investment objective is to return $10 per share (its initial offering
price) to shareholders on or about December 31, 2000 while providing high
current income. Although there can be no guarantee, BlackRock is confident that
the Trust can achieve its investment objectives. The Trust seeks these
objectives by investing in investment grade fixed income securities, including
corporate debt securities, mortgage-backed securities backed by U.S. Government
agencies (such as Fannie Mae, Freddie Mac or Ginnie Mae), asset-backed
securities and commercial mortgage-backed securities. All of the Trust's assets
must be rated at least "BBB" by Standard & Poor's or "Baa" by Moody's at time of
purchase or be issued or guaranteed by the U.S. Government or its agencies.

The table below summarizes the performance of the Trust's stock price and
NAV (the market value of its assets per share) over the period:

<TABLE>
<CAPTION>
-----------------------------------------------------------------
6/30/99 12/31/98 CHANGE HIGH LOW
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
STOCK PRICE $9.63 $ 9.75 (1.23%) $ 9.75 $9.63
- ------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE (NAV) $9.96 $10.13 (1.68%) $10.18 $9.91
- ------------------------------------------------------------------------------------------------------------------
5-YEAR U.S. TREASURY NOTE 5.65% 4.54% 24.45% 5.91% 4.46%
- ------------------------------------------------------------------------------------------------------------------
</TABLE>

THE FIXED INCOME MARKETS

The past six months have witnessed continued rapid expansion of the U.S.
economy. GDP growth for the second quarter of 1999 is estimated at an annual
rate of 3.5%-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. In spite of strong domestic
economic growth, inflationary forces continue to remain contained; still, the
Federal Reserve chose to raise its target for the federal funds rate from 4.75%
to 5.00% at its June meeting. The Fed cited an easing of financial strain, tight
labor markets and a firming of foreign economies in the release accompanying the
move. The Fed dropped its tightening bias to a neutral bias, which should reduce
the likelihood of another hike at the August 24th meeting. However, an
additional 25-50 basis points of tightening by year end is possible, as the
combination of a very strong domestic economy and an improving situation in
Europe and Japan may allow for tighter monetary policy.

U.S. Treasury securities dramatically reversed their fourth quarter gains
in the first half of 1999. The yield of the 10-Year Treasury posted a net
decline of 118 basis points (1.18%), beginning 1999 at 4.70% and closing on June
30, 1999 at 5.88%. Strong economic numbers led the Federal Reserve to adopt a
tightening bias on May 18, 1999 and ultimately raised interest rates by 25 basis
points on June 30, 1999. The Federal Reserve eased rates by 0.75% in 1998
because of the global financial crisis but cited in their June 1999 meeting
"Since then much of the financial strain has eased, foreign economies have
firmed and economic activity in the U.S. has moved forward at a brisk pace." We
anticipate Treasuries will trade in a relatively narrow range for the balance of
1999 unless the Fed takes further action.

As interest rates rose and alleviated prepayment fear, mortgage securities
outperformed the broader investment grade bond market. For the period ended June
30th the LEHMAN BROTHERS MORTGAGE INDEX posted a 0.53% total return versus

<PAGE>

- -1.39% for the LEHMAN BROTHERS AGGREGATE INDEX. After significantly
underperforming Treasuries in 1998 mortgages experienced a significant rally
late in 1998 following through into the first quarter of 1999. Although yields
have tightened significantly from their crisis levels in 1998, mortgages remain
at attractive levels as a record issuance has come to market and kept yields
attractive. Although higher mortgage rates have reduced prepayment fears,
mortgage rates still remain at historically low levels.

Investment grade corporate securities underperformed the broader
investment grade bond market, as corporates measured by the MERRILL LYNCH U.S.
CORPORATE MASTER INDEX returned -2.52%, as compared to the LEHMAN BROTHERS
AGGREGATE INDEX'S -1.39%. Corporate profitability continues to be the driving
factor of corporate bond performance and profit growth remains under pressure
from overseas markets and a strong labor market. Deteriorating fundamentals
(four times as many downgrades as upgrades in the first quarter according to
S&P) combined with weakening profit growth and increased issuance will continue
to pressure the corporate market. Investor appetite for credit and liquidity
risk remains suppressed after last year's volatility. We anticipate new supply
to start to taper off early in the fourth quarter and relieve some of the
pressure that investment grade corporates have been experiencing.

THE TRUST'S PORTFOLIO AND INVESTMENT STRATEGY

BlackRock actively manages the Trust's portfolio holdings consistent with
BlackRock's overall market outlook and the Trust's investment objectives. The
following charts compare the Trust's current and December 31, 1998 asset
composition and credit rating.

- --------------------------------------------------------------------------------
THE BLACKROCK TARGET TERM TRUST INC.
- --------------------------------------------------------------------------------
COMPOSITION JUNE 30, 1999 DECEMBER 31, 1998
- --------------------------------------------------------------------------------
Zero-Coupon Bonds 54% 53%
- --------------------------------------------------------------------------------
Corporate Bonds 11% 11%
- --------------------------------------------------------------------------------
Mortgage Pass-Throughs 9% 10%
- --------------------------------------------------------------------------------
Stripped MoneyMarket Instruments 7% 6%
- --------------------------------------------------------------------------------
U.S. Government Securities 5% 4%
- --------------------------------------------------------------------------------
Taxable Municipal Bonds 3% 3%
- --------------------------------------------------------------------------------
Principal-Only Mortgage-Backed Securities 3% 3%
- --------------------------------------------------------------------------------
Asset-Backed Securities 2% 3%
- --------------------------------------------------------------------------------
Adjustable Rate Mortgages 2% 3%
- --------------------------------------------------------------------------------
Non-Agency Multiple Class Pass-Throughs 2% 2%
- --------------------------------------------------------------------------------
Agency Multiple Class Pass-Throughs 1% 2%
- --------------------------------------------------------------------------------
Interest-Only Mortgage-Backed Securities 1% --
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
RATING % OF CORPORATES
--------------------------------------
CREDIT RATING JUNE 30, 1999 DECEMBER 31, 1998
- --------------------------------------------------------------------------------
AAA or equivalent -- --
- --------------------------------------------------------------------------------
AA or equivalent 22% 8%
- --------------------------------------------------------------------------------
A or equivalent 47% 53%
- --------------------------------------------------------------------------------
BBB or equivalent 31% 39%
- --------------------------------------------------------------------------------

<PAGE>

In accordance with the Trust's primary investment objective of returning
the initial offering price upon maturity, the Trust's portfolio management
activity focused on adding securities, which offer attractive yield spreads over
Treasury securities, and an emphasis on bonds with maturity dates approximating
the Trust's termination date of December 31, 2000. Additionally, the Trust has
been active in reducing positions in bonds which have maturity dates or
potential cash flows after the Trust's termination date.

Consistent with the Trust's primary investment objective the continual
reinvestment of cash flows into shorter maturity securities over time as the
Trust approaches its maturity date results in a natural reduction in the amount
of net investment income generated by the Trust. Therefore, after careful
evaluation of the current and anticipated level of the Trust's net investment
income, the Board of Directors voted to reduce the Trust's monthly dividend from
$0.04479167 ($0.5375 annualized) to $0.04167 ($0.50004 annualized) effective
with the March 31, 1999 dividend payment.

We look forward to managing the Trust to benefit from the opportunities
available in the fixed income markets and to meet its investment objectives. We
thank you for your investment in The BlackRock Target Term Trust Inc. Please
feel free to contact our marketing center at (800) 227-7BFM (7236) if you have
specific questions which were not addressed in this report.

Sincerely,

/s/Robert S. Kapito /s/Michael P. Lustig
- ------------------- --------------------
Robert S. Kapito Michael P. Lustig
Vice Chairman and Portfolio Manager Director and Portfolio Manager
BlackRock Financial Management, Inc. BlackRock Financial Management, Inc.

1 Yield on Closing Stock Price is calculated by dividing the current annualizing
distribution per share and dividing it by the closing stock price per share.
2 Distribution is not constant and is subject to change.

<PAGE>

- --------------------------------------------------------------------------------
THE BLACKROCK TARGET TERM TRUST INC.
PORTFOLIO OF INVESTMENTS
JUNE 30, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
RATING* (000) DESCRIPTION (NOTE 1)
- --------------------------------------------------------------------------------
LONG-TERM INVESTMENTS--140.7%
MORTGAGE PASS-THROUGHS--12.9%
Federal Home Loan Mortgage Corp.,
$4,544 5.00%, 11/1/00 - 5/1/01, 7 Year .............. $ 4,381,033
1,177 7.50%, 2/1/07 - 6/1/09, 15 Year .............. 1,196,052
8,982 9.00%, 5/1/07, 15 Year ....................... 9,325,460
Federal National Mortgage Association,
97,632 6.50%, 9/1/25 - 6/1/29 ....................... 94,188,655
6,765 8.03%, 7/1/00, Multifamily ................... 6,810,055
5,914 9.50%, 5/1/18 - 3/1/19 ....................... 6,289,211
Government National Mortgage
Association,
353 9.00%, 6/15/09 - 4/15/13 ..................... 373,755
61 10.00%, 10/15/18 ............................. 64,513
------------
122,628,734
------------
MULTIPLE CLASS MORTGAGE
PASS-THROUGHS--4.7%
AAA 4,426 CMC Securities Corporation III,
Ser. 1993- F, Class A5,
11/25/23 ................................... 4,431,996
Federal Home Loan Mortgage Corp.,
Multiclass Mortgage Participation
Certificates,
424 Ser. 29, Class 29-SC, 4/25/24 ................ 425,475
447 Ser. 1403, Class 1403-H,
2/15/18 .................................... 443,716
2,690 Ser. 1425, Class 1425-G,
8/15/06 .................................... 2,705,683
543 Ser. 1453, Class 1453-S,
1/15/00 (ARM) .............................. 544,075
247 Ser. 1490, Class 1490-A,
9/15/06 .................................... 246,636
3,532 Ser. 1566, Class 1566-SC,
9/15/00 (ARM) .............................. 3,549,238
356 Ser. 1580, Class 1580-S,
9/15/00 (ARM) .............................. 285,624
277 Ser. 1608, Class 1608-SK,
11/15/22 (ARM) ............................. 277,676
Federal National Mortgage Association,
REMIC Pass-Through Certificates,
715 Trust 1993-81, Class 81-S,
6/25/00 (ARM) .............................. 682,665
319 Trust 1993-227, Class 227-SB,
12/25/00 (ARM) ............................. 301,428
1,151 Trust 1993-M2, Class M2-H,
11/25/03, Multifamily ...................... 1,126,245
687 Trust 1997-78, Class 78-SO,
10/18/27 .................................. 659,342
2,164 Trust 1997- 80, Class 80-SC,
4/18/08 (ARM) ............................. 2,197,854
Federal National Mortgage Association,
REMIC Pass-Through Certificates,
1,029 Trust 1998-38, Class 38-SE,
7/18/07 (ARM) .............................. 1,045,873
AAA 748 First Boston Mortgage Securities Corp.,
Ser. 92-4 Class A-4,
10/25/22 ................................... 744,820
AAA 18,363 PNC Mortgage Securities Corp.,
Ser. 1997-6, Class 6-A1,
10/25/26 (ARM) ............................. 18,408,693
AAA 6,657 Salomon Capital Access Corp.,
Ser. 1986-1, Class C,
9/1/15 ..................................... 6,756,846
------------
44,833,885
------------
INTEREST ONLY MORTGAGE-BACKED
SECURITIES--0.5%
AAA 102 American Housing Trust, VIII,
Ser. A, Class L, 6/25/04 ..................... 2,863
Federal Home Loan Mortgage Corp.,
Multiclass Mortgage Participation
Certificates,
2,000 Ser. 1440, Class 1440-PK,
8/15/18 .................................... 50,384
4,147 Ser. 1472, Class 1472-SD,
2/15/05 .................................... 39,312
924 Ser. 1564, Class 1564-I,
5/15/07 .................................... 72,949
5,960 Ser. 1702, Class 1702-PM,
10/15/16 ................................... 252,166
Federal National Mortgage Association,
REMIC Pass-Through Certificates,
85 Trust 18, Class 2, 2/1/17 .................... 19,831
505 Trust 1991-29, Class 29-J,
4/25/21 .................................... 170,458
5,735 Trust 1993-11, Class 11-M,
2/25/08 .................................... 548,965
4,972 Trust 1993-50, Class 50-SD,
12/25/16 ................................... 52,749
5,802 Trust 1993-81, Class 81-SB,
6/25/00 (ARM) .............................. 513,399
2,690 Trust 1993-96, Class 96- A,
11/25/16 ................................... 170,505
857 Trust 1993-113, Class 113-PL,
4/25/18 .................................... 35,466
6,540 Trust 1993-172, Class 172-S,
9/25/00 .................................... 156,624
10,028 Tust 1993-225, Class 225-VK,
11/25/17 ................................... 171,173
5,278 Trust 1993-G34, Class G34-PV,
2/25/17 .................................... 226,219

See Notes to Financial Statements.

<PAGE>

- --------------------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
RATING* (000) DESCRIPTION (NOTE 1)
- --------------------------------------------------------------------------------

Federal National Mortgage Association,
REMIC Pass-Through Certificates,
$1,106 Trust 1996-54, Class 54-SG,
4/25/23 ................................... $ 181,127
45,847 Trust 1997-65, Class 65-SA,
9/25/00 ................................... 479,962
2,273 Trust 1998-25, Class 25-PE,
9/18/11 ................................... 105,180
AAA 6,640 Prudential-Bache CMO Trust,
Ser. 16, Class 16-P,
10/25/21 .................................. 1,136,145
------------
4,385,477
------------
PRINCIPAL ONLY MORTGAGE-BACKED
SECURITIES--4.3%
AAA 540 DBL, Inc.,
Trust V, Class 1A, 9/1/18 .................. 435,720
981 Federal Home Loan Mortgage Corp.,
Multiclass Mortgage Participation
Certificates,
Ser. G36, Class G36-B,
4/25/24 ................................... 926,530
Federal National Mortgage Association,
REMIC Pass-Through Certificates,
1,395 Trust 19, Class 1, 6/1/17 .................. 1,136,736
207 Trust 225, Class 1, 2/1/23 ................. 167,696
3,736 Trust 1992-23, Class 23-D,
2/25/21 ................................... 3,207,194
8,992 Trust 1992-140, Class 140-HD,
11/25/06 .................................. 8,396,903
1,866 Trust 1993-88, Class 88-C,
6/25/00 ................................... 1,789,183
9,358 Trust 1993-213, Class 213-G,
9/25/23 ................................... 8,992,289
59 Trust 1993-216, Class 216-B,
8/25/23 ................................... 57,499
4,634 Trust 1994-8, Class 8-C,
11/25/23 .................................. 4,486,718
733 Trust 1994-9, Class 9-G,
11/25/23 .................................. 707,616
7,002 Trust 1997-65, Class 65-A,
9/25/00 ................................... 6,557,522
355 Trust 1998-37, Class 37-PO,
7/18/28 ................................... 332,263
AAA 3,719 Prudential-Bache CMO Trust,
Ser. 10, Class 10-H, 4/1/19 ................ 3,384,526
------------
40,578,395
------------
COMMERCIAL MORTGAGE-BACKED
SECURITIES--0.9%
AAA 3,000 FDIC Trust,
Ser. 1994-C1, Class 2C,
8.45%, 9/25/25 ............................ 3,039,375
AA+ 5,200 Nomura Asset Capital Corp.,
Ser. 1993-M1, Class A-1,
7.64%, 11/25/03** ......................... 5,291,472
------------
8,330,847
------------

CORPORATE BONDS--16.2%
FINANCE & BANKING--11.3%
BBB 10,000 AT&T Capital Corp.,
7.50%, 11/15/00 ............................ 10,088,700
AA- 5,369 Associates Corp. of North America,
Zero Coupon, 11/1/99 - 6/29/00** ........... 5,057,818
BBB- 8,000 Franchise Finance Corp.,
7.00%, 11/30/00 ............................ 7,964,160
A+ 10,930 Goldman Sachs Group LP,
Zero Coupon, 12/15/99 - 12/15/00** ......... 10,088,266
A+ 3,000 International Lease Fin. Corp.,
6.30%, 11/1/99 ............................. 3,008,730
A 8,950 Lehman Brothers, Inc.
6.90%, 1/29/01 ............................. 8,979,893
BB 3,000 Meditrust Inc.,
7.25%, 8/16/99 ............................. 2,991,210
A 4,265 Meridian Bancorp, Inc.,
Zero Coupon, 12/15/99 - 6/15/00** .......... 4,034,036
AA- 2,960 Merrill Lynch & Co. Inc.,
5.75%, 11/2/02 ............................. 2,900,948
A+ 4,237 Morgan Stanley Group Inc.,
Zero Coupon, 8/15/99 - 2/15/01** ........... 3,844,999
PaineWebber Group, Inc.,
BBB+ 4,280 Zero Coupon, 9/1/99 - 3/1/00** ............. 4,121,450
BBB+ 7,305 6.31%, 7/22/99 ............................. 7,306,753
A3 2,500 Popular Inc.,
6.40%, 8/25/00 ............................. 2,495,175
A3 5,300 Provident Bank Cincinnati Ohio,
6.13%, 12/15/00 ............................ 5,289,453
Salomon Smith Barney Holdings, Inc.,
Aa3 8,499 Zero Coupon, 11/15/99 - 6/1/00** ............. 8,080,954
Aa3 10,550 6.625%, 6/1/00 - 11/30/00** ................ 10,622,714
A 10,675 Transamerica Finance Corp.,
Zero Coupon, 12/1/99 - 6/1/00** ............ 10,094,642
------------
106,969,901
------------
INDUSTRIALS--3.1%
BBB+ 7,500 Erac USA Finance Co.,
7.00%, 6/15/00** ........................... 7,548,612
A1 13,373 Ford Motor Credit Co.,
Zero Coupon, 9/15/99 - 2/23/01** ........... 12,118,820
A2 2,732 Kern River Funding Corp.,
6.42%, 3/31/01** ........................... 2,735,362
AA- 7,000 TCI Communications, Inc.,
7.375%, 2/15/00 ............................ 7,070,350
------------
29,473,144
------------
UTILITIES--1.3%
A3 5,000 Columbia Energy Group, Inc.,
6.39%, 11/28/00 ............................ 5,016,800
BBB+ 5,250 Potomac Capital Investment Corp.,
6.73%, 8/09/99** ........................... 7,255,305
------------
12,272,105
------------
YANKEE--0.5%
A3 5,000 Corporacion Andina De Fomento,
7.375%, 7/21/00 ............................ 5,018,500
------------
Total Corporate Bonds 153,733,650
------------

See Notes to Financial Statements.

<PAGE>

ASSET-BACKED SECURITIES--3.0%
AAA $ 441 Banc One Auto Grantor Trust,
Ser. 1996-A, Class A,
6.10%, 10/15/02 ...........................$ 441,137
Aaa 8,428 Brazos Student Financial Corp.,
Ser. 1998-A, Class A1, 5.78%,
6/1/06 .................................... 8,407,780
AAA 1,777 Chevy Chase Auto Receivables,
Ser. 1996-1, Class A, 6.60%,
12/15/02 .................................. 1,784,793
AAA 1,352 Fifth Third Bank Auto Trust,
Ser. 1996-B, Class A,
6.45%, 3/15/02 ............................ 1,354,472
AAA 8,904 First Security Auto Grantor Trust,
Ser. 1998-A, Class A1, 5.97%,
4/15/04 ................................... 8,918,389
AAA 2,628 Keycorp Student Loan Trust,
Ser. 1996-A, Class A2, 5.54%,
8/27/25 ................................... 2,596,770
AAA 5,000 Standard Credit Card Master Trust I,
Ser. 1995-3, Class A,
7.85%, 2/7/02** ........................... 5,089,179
-------------
28,592,520
-------------
U.S GOVERNMENT SECURITIES--7.4%
U.S. Treasury Bonds,
10,273 3.625%, 4/15/28 (TIPS) ..................... 9,693,783
5,000 5.50%, 8/15/28 ............................. 4,578,100
30,500 6.13%, 11/15/27 ............................ 30,295,040
U.S. Treasury Notes,
20,000 4.75%, 2/15/04 ............................. 19,237,400
1,000 5.25%, 8/15/03 ............................. 982,970
5,485 6.00%, 8/15/00 ............................. 5,520,159
-------------
70,307,452
-------------
ZERO COUPON BONDS--76.6%
2,185 Agency STRIPS, Ser. 1, relating to
Federal National Mortgage
Association
8.95% Debentures,
Ser. SM-2018-A, 8/12/00 .................... 2,053,354
10,407 Federal Home Loan Mortgage Corp.,
5/15/00 .................................... 9,953,671
6,250 Federal Judiciary Office Building,
8/15/00 .................................... 5,863,000
16,620 Federal National Mortgage
Association,
8/1/00 - 8/12/00 ........................... 15,640,020
139,485 Financing Corp. (FICO Strips),
2/08/00-12/27/00 ........................... 130,503,876
333 Government and Agency Term
Obligation Receipt, 11/15/00 ............... 307,855
356 Physical Treasury Coupons,
8/15/00 .................................... 334,914
40,000 Tennessee Valley Authority,
11/1/00 .................................... 36,940,800
1,862 U.S. Treasury CUBES,
11/15/00 ................................... 1,723,989
565,012+ U.S. Treasury Strips,
5/15/00 - 11/15/00 ......................... 525,318,478
------------
728,639,957
------------
TAXABLE MUNICIPAL BONDS--4.3%
AAA 2,398 Long Beach California Pension
Obligation, Zero Coupon,
9/1/99 - 9/1/00** .......................... 2,231,560
AAA 6,645 Massachusetts St. Housing Fin. Auth.,
Ser. 1991-A,
6.85%, 4/1/21, F.H.A. ..................... 6,902,494
New York City, G.O.,
A- 10,626 Zero Coupon, 9/15/99 - 3/15/00 ............. 10,134,599
A- 10,000 7.10%, 4/15/00 ............................. 10,091,400
BBB+ 5,000 New York St. Dorm. Auth. Rev.,
Pension Obligation,
6.63%, 10/1/00 ............................. 5,016,350
BBB+ 1,200 New York St. Environ. Facilities Auth.,
6.49%, 9/15/00 ............................. 1,201,896
BBB 3,120 New York St. Housing Fin., Ser. B,
7.03%, 9/15/01 ............................. 3,159,842
AAA 2,124 Western Minnesota Municipal Power
Agency, Zero Coupon,
7/1/99 - 1/1/00 ............................ 2,059,639
------------
40,797,780
------------
COLLATERALIZED MORTGAGE OBLIGATION
RESIDUALS***--0.1%
AAA 5 American Housing Trust V,
Senior-Mortgage Pass-Through
Certificates, Ser. A, Class R,
4/25/21 (REMIC)** ......................... 451,500
NR 1 M.D.C. Asset Investors, Trust VI,
11/1/17 (REMIC)** .......................... 164,234
NR 57 PaineWebber, CMO Trust,
Ser. N, Class 7, 1/1/19
(REMIC)** .................................. 144,637
------------
760,371
------------
STRIPPED MONEY MARKET
INSTRUMENTS--9.7%
50,000 AIM Prime Portfolio,
Zero Coupon, 12/1/00 ....................... 46,324,150
50,000 Goldman Sachs Money Market,
Zero Coupon, 12/1/00** ..................... 46,311,650
------------
92,635,800
-------------
NOTIONAL
AMOUNT
(000)
--------
CALL OPTION PURCHASED--0.1%
145,000 Interest Rate Swap, 5.60%
over 3-month LIBOR,
expires 8/07/00 ............................ 777,650
-------------

Total Long-Term Investments
(cost $1,328,616,677) ...................... 1,337,002,518
-------------

See Notes to Financial Statements.

<PAGE>

SHORT-TERM INVESTMENTS--1.5%
COMMERCIAL PAPER--0.5%
P-2 $5,000 Williams Holdings of Delaware Inc.,
5.15%, 7/6/99 .............................. $ 4,996,424
-------------
DISCOUNT NOTES--1.0%
9,770 Federal Home Loan Mortgage Corp.,
4.60%, 7/1/99 .............................. 9,770,000
-------------
Total Short-Term Investments
(cost $14,766,424) ......................... 14,766,424
-------------
Total investments before call
options written
(cost $1,343,383,100) ...................... 1,351,768,942
NOTIONAL
AMOUNT
(000)
CALL OPTION WRITTEN
232,000 Interest Rate Swap,
3 month LIBOR over 5.50%,
expires 8/10/99
(premium received $1,421,000) .............. (510)
-------------
Total investments, net of call options
written--142.2%
(cost $1,341,962,101) ...................... 1,351,768,432
Liabilities in excess of other
assets--(42.2)% ............................ (400,853,915)
-------------
NET ASSETS--100% ............................. $950,914,517
-------------

- ----------
* Using the higher of Standard & Poor's, Moody's or Fitch's rating.
** Restricted as to resale.
*** Illiquid securities, representing .06% of portfolio assets.
+ Partial principal amount pledged as collateral for reverse
repurchase agreements. See Note 4.
++ Entire principal amount pledged as collateral for reverse
repurchase agreements. See Note 4.

KEY TO ABBREVIATIONS
ARM -- Adjustable Rate Mortgage.
CMO -- Collateralized Mortgage Obligation.
G.O. -- General Obligation.
LIBOR -- London Interbank Offer Rate.
REMIC -- Real Estate Mortgage Investment Conduit.
TIPS -- Treasury Inflation Protection Securities.

See Notes to Financial Statements.

<PAGE>

- --------------------------------------------------------------------------------
THE BLACKROCK TARGET TERM TRUST INC.
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------

ASSETS

Investments, at value (cost $1,343,383,100)
(Note 1) .................................................. $1,351,768,942
Cash ...................................................... 3,748
Interest receivable ....................................... 4,254,407
Unrealized appreciation on interest rate swap
(Note 1 & 3) .............................................. 2,160
--------------
1,356,029,257
--------------

LIABILITIES
Reverse repurchase agreements (Note 4) .................... 399,922,638
Interest payable .......................................... 4,339,694
Investment advisory fee payable (Note 2) .................. 352,480
Administration fee payable (Note 2) ....................... 70,905
Call options written, at value
(premium received $1,421,000) (Notes 1 & 3) .............. 510
Other accrued expenses 428,513
--------------
405,114,740
--------------

NET ASSETS ................................................ $950,914,517
==============
Net assets were comprised of:
Common stock, at par (Note 5) ........................... $ 954,606
Paid-in capital in excess of par ........................ 891,634,901
--------------
.......................................................... 892,589,507
Undistributed net investment income ....................... 44,330,566
Accumulated net realized gain ............................. 4,185,952
Net unrealized appreciation ............................... 9,808,492
--------------
Net assets, June 30, 1999 ................................. $ 950,914,517
==============
Net asset value per share:
($950,914,517 / 95,460,639 shares of
common stock issued and outstanding) ..................... $ 9.96
======

- --------------------------------------------------------------------------------
THE BLACKROCK TARGET TERM TRUST INC.
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------

NET INVESTMENT INCOME

Income
Interest (including net discount accretion
of $25,970,705 and net of interest expense
of $9,607,815) ...................................... $35,347,609
-----------
Operating expenses
Investment advisory ................................... 2,150,230
Administration ........................................ 431,988
Custodian ............................................. 111,000
Transfer agent ........................................ 97,000
Reports to shareholders ............................... 90,000
Directors ............................................. 42,000
Audit ................................................. 40,000
Legal ................................................. 25,000
Miscellaneous ......................................... 79,875
-----------
Total operating expenses ............................ 3,067,093
-----------
Net investment income before excise tax ................. 32,280,516
Excise tax .............................................. 410,421
-----------
Net investment income ................................... 31,870,095
-----------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS (NOTE 3)
Net realized gain (loss) on:
Investments ........................................... (1,384,078)
Interest rate swaps ................................... (507,078)
Futures ............................................... 494,243
Short sales ........................................... 892,411
-----------
........................................................ (504,502)
-----------
Net change in unrealized
appreciation (depreciation) on:
Investments ........................................... (31,336,696)
Options written ....................................... 5,150,818
Interest rate swaps ................................... (1,016,069)
Short sales ........................................... (240,074)
-----------
(27,442,021)
-----------
Net loss on investments ................................. (27,946,523)
-----------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS ............................. $ 3,923,572
===========

See Notes to Financial Statements.

<PAGE>

- --------------------------------------------------------------------------------
THE BLACKROCK TARGET TERM TRUST INC.
STATEMENT OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------

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 ............................................. $ 3,923,572
-------------
Decrease in investments .................................. 13,509,075
Net realized loss ........................................ 504,502
Decrease in unrealized appreciation ...................... 27,442,021
Decrease in interest receivable .......................... 5,958
Decrease in appreciation of interest rate swap ........... 1,016,069
Decrease in payable for investments purchased ............ (100,781,597)
Decrease in payable for investments
sold short ............................................. (37,724,243)
Decrease in deposit with brokers ......................... 38,344,414
Decrease in options written .............................. (5,150,818)
Increase in interest payable ............................. 168,329
Decrease in accrued expenses and other liabilities ....... (501,695)
-------------
Total Adjustments ...................................... (63,167,985)
-------------
Net cash used for operating activities ................... $ (59,244,413)
=============
INCREASE (DECREASE) IN CASH
Net cash flows used for operating activities: ............ (59,244,413)
-------------
Cash flows provided by financing activities:
increase in reverse repurchase agreements .............. 83,705,363
Cash dividends paid .................................... (24,462,394)
-------------
Net cash flows provided by financing activities .......... 59,242,969
-------------
Net decrease in cash ................................... (1,444)
Cash at beginning of period ............................ 5,192
-------------
Cash at end of period .................................. $ 3,748
=============

- --------------------------------------------------------------------------------
THE BLACKROCK TARGET TERM TRUST INC.
STATEMENTS OF CHANGES IN
NET ASSETS (Unaudited)
- --------------------------------------------------------------------------------

SIX MONTHS YEAR ENDED
ENDED JUNE 30, DECEMBER 31,
1999 1998
------------- ------------
INCREASE (DECREASE) IN
NET ASSETS

Operations:

Net investment income ................ $31,870,095 $ 50,122,695

Net realized gain (loss)
on investments ..................... (504,502) 361,119

Net change in unrealized/
(appreciation) on
investments ........................ (27,442,021) 24,158,202
------------ ------------

Net increase in net assets
resulting from operations .......... 3,923,572 74,642,016

Dividends from net
investment income .................. (20,186,553) (51,308,780)
------------ ------------
Total increase (decrease) ............ (16,262,981) 23,333,236

NET ASSETS
Beginning of period ................... 967,177,498 943,844,262
------------ ------------
End of period ......................... $950,914,517 $967,177,498
============ ============

See Notes to Financial Statements.

<PAGE>

- --------------------------------------------------------------------------------
THE BLACKROCK TARGET TERM TRUST INC.
FINANCIAL HIGHLIGHTS (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>

SIX MONTHS ENDED YEAR ENDED DECEMBER 31,
JUNE 30, -----------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE: 1999 1998 1997 1996 1995 1994
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ....... $ 10.13 $ 9.89 $ 9.82 $ 10.02 $ 9.01 $ 10.40
--------- --------- --------- --------- --------- ---------
Net investment income (net of
interest expense of $0.10,
$0.27, $0.27, $0.28,
$0.36 and $0.21,
respectively) ......................... 0.33 0.52 0.64 0.68 0.72 0.63
Net realized and unrealized gain
(loss) on investments .................. (0.29) 0.26 -- (0.31) 0.99 (1.30)
--------- --------- --------- --------- --------- ---------
Net increase (decrease) from

investment operations .................... 0.04 0.78 0.64 0.37 1.71 (0.67)
--------- --------- --------- --------- --------- ---------
Dividends from net
investment income ........................ (0.21) (0.54) (0.57) (0.57) (0.70) (0.72)
--------- --------- --------- --------- --------- ---------
Net asset value, end of period* ............ $ 9.96 $ 10.13 $ 9.89 $ 9.82 $ 10.02 $ 9.01
========= ========= ========= ========= ========= =========
Market value, end of period* ............... $ 9.63 $ 9.75 $ 9.31 $ 8.88 $ 8.75 $ 8.13
========= ========= ========= ========= ========= =========
TOTAL INVESTMENT RETURN+ ................... 0.88% 10.79% 11.64% 7.94% 16.34% (11.98%)

RATIOS TO AVERAGE NET ASSETS:

Operating expenses# ........................ 0.64%+++ 0.66% 0.68% 0.73% 0.75% 0.75%
Net investment income ...................... 6.69%+++ 5.23% 6.49% 6.89% 7.57% 6.62%

SUPPLEMENTAL DATA:

Average net assets (in thousands) .......... $960,853 $957,474 $937,236 $936,823 $918,344 $909,105
Portfolio turnover ......................... 8% 76% 161% 95% 118% 84%
Net assets, end of period
(in thousands) ........................... $950,915 $967,177 $943,844 $937,340 $956,922 $859,825
Reverse repurchase
agreements outstanding,
end of period (in thousands) ............. $399,923 $316,217 $371,015 $368,550 $428,825 $422,578
Asset coverage++ ........................... $ 3,378 $ 4,059 $ 3,544 $ 3,543 $ 3,231 $ 3,035

</TABLE>

- ------------
* Net asset value and market value are published in BARRON'S each Saturday,
THE NEW YORK TIMES andTHE WALL STREET JOURNAL each Monday.
# The ratios of operating expenses, including interest expense, to average
net assets were 2.66%+++, 3.34%, 3.43%, 3.57%, 4.53% and 2.89% for the
periods indicated above, respectively. The ratios of operating expenses
including interest expense and excise tax, if applicable, to average net
assets were 2.75%+++, 3.43%, 3.47%, 3.64%, 4.54% and 2.89% for the periods
indicated above, respectively.
+ 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 each period reported. Dividends 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 returns for
periods of less than one year are not annualized.
++ Per $1,000 of reverse repurchase agreement outstanding.
+++ Annualized.

The information above represents the unaudited operating performance data for a
share of common stock outstanding, total investment return, ratios to average
net assets and other supplemental data, for each of the periods 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.

<PAGE>

- -----------------------------------------------------------
THE BLACKROCK TARGET TERM TRUST INC.
NOTES TO FINANCIAL STATEMENTS (Unaudited)
- -----------------------------------------------------------

NOTE 1. ORGANIZATION & POLICIES

The BlackRock Target ACCOUNTING Term Trust Inc. (the "Trust"), a Maryland
corporation, is a diversified, closed-end management investment company. The
investment objective of the Trust is to manage a portfolio of investment grade
fixed income securities that will return $10 per share (the initial offering
price per share) to investors on or shortly before December 31, 2000 while
providing high monthly income. 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 mortgage-backed, asset-backed, and other
debt securities, interest rate swaps, caps, floors and non-exchange traded
options 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. Exchange-traded options are valued
at their last sales price as of the close of options trading on the applicable
exchanges. In the absence of a last sale, options are valued at the average of
the quoted bid and asked prices as of the close of business. A futures contract
is valued at the last sale price as of the close of the commodities exchange on
which it trades unless the Trust's Board of Directors determines that such price
does not reflect its fair value, in which case it will be valued at its fair
value as determined by the Trust's Board of Directors. 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.

In connection with transactions in repurchase agreements, the Trust's
custodian takes possession of the underlying collateral securities, the value of
which at least equals the principal amount of the repurchase transaction,
including accrued interest. To the extent that any repurchase transaction
exceeds one business day, the value of the collateral is marked-to-market on a
daily basis to ensure the adequacy of the collateral. If the seller defaults and
the value of the collateral declines or if bankruptcy proceedings are commenced
with respect to the seller of the security, realization of the collateral by the
Trust may be delayed or limited.

OPTION SELLING/PURCHASING: When the Trust sells or purchases an option, an
amount equal to the premium received or paid by the Trust is recorded as a
liability or an asset and is subsequently adjusted to the current market value
of the option written or purchased. Premiums received or paid from writing or
purchasing options which expire unexercised are treated by the Trust on the
expiration date as realized gains or losses. The difference between the premium
and the amount paid or received on effecting a closing purchase or sale
transaction, including brokerage commissions, is also treated as a realized gain
or loss. If an option is exercised, the premium paid or received is added to the
proceeds from the sale or cost of the purchase in determining whether the Trust
has realized a gain or a loss on investment transactions. The Trust, as writer
of an option, may have no control over whether the underlying securities may be
sold (call) or purchased (put) and as a result bears the market risk of an
unfavorable change in the price of the security underlying the written option.

Options, when used by the Trust, help in maintaining a targeted duration.
Duration is a measure of the price sensitivity of a security or a portfolio to
relative changes in interest rates. For instance, a duration of "one" means that
a portfolio's or a security's price would be expected to change by approximately
one percent with a one percent change in interest rates, while a duration of
five would imply that the price would move approximately five percent in
relation to a one percent change in interest rates.

Option selling and purchasing is used by the Trust to effectively hedge
positions, or collections of positions, so that changes in interest rates do not
change the duration of the portfolio unexpectedly. In general, the Trust uses
options to hedge a long or short position or an overall portfolio that is longer
or shorter than the benchmark security. A call option gives the purchaser of the
option the right (but not obligation) to buy, and obligates the seller to sell
(when the option is exercised), the underlying position at the exercise price at
any time or at a specified time during the option period. A put option gives the
holder the right to sell and obligates the

<PAGE>

writer to buy the underlying position at the exercise price at any time or at a
specified time during the option period. Put options can be purchased to
effectively hedge a position or a portfolio against price declines if a
portfolio is long. In the same sense, call options can be purchased to hedge a
portfolio that is shorter than its benchmark against price changes. The Trust
can also sell (or write) covered call options and put options to hedge portfolio
positions.

The main risk that is associated with purchasing options is that the option
expires without being exercised. In this case, the option expires worthless and
the premium paid for the option is considered the loss. The risk associated with
writing call options is that the Trust may forego the opportunity for a profit
if the market value of the underlying position increases and the option is
exercised. The risk in writing put options is that the Trust may incur a loss if
the market value of the underlying position decreases and the option is
exercised. In addition, as with futures contracts, the Trust risks not being
able to enter into a closing transaction for the written option as the result of
an illiquid market.

INTEREST RATE SWAPS: In an interest rate swap, one investor pays a floating rate
of interest on a notional principal amount and receives a fixed rate of interest
on the same notional principal amount for a specified period of time.
Alternatively, an investor may pay a fixed rate and receive a floating rate.
Interest rate swaps were conceived as asset/liability management tools. In more
complex swaps, the notional principal amount may decline (or amortize) over
time.

During the term of the swap, changes in the value of the swap are
recognized as unrealized gains or losses by "marking-to-market"to reflect the
market value of the swap. When the swap is terminated, the Trust will record a
realized gain or loss equal to the difference between the proceeds from (or cost
of) the closing transaction and the Trust's basis in the contract, if any.

The Trust is exposed to credit loss in the event of non- performance by the
other party to the interest rate swap. However, the Trust does not anticipate
non-performance by any counterparty.

SWAP OPTIONS: Swap options are similar to options on securities except that
instead of selling or purchasing the right to buy or sell a security, the writer
or purchaser of the swap option is granting or buying the right to enter into a
previously agreed upon interest rate swap agreement at any time before the
expiration of the option. Premiums received or paid from writing or purchasing
options are recorded as liabilities or assets and are subsequently adjusted to
the current market value of the option written or purchased. Premiums received
or paid from writing or purchasing options which expire unexercised are treated
by the Trust on the expiration date as realized gains or losses. The difference
between the premium and the amount paid or received on effecting a closing
purchase or sale transaction, including brokerage commission, is also treated as
a realized gain or loss. If an option is exercised, the premium paid or received
is added to the proceeds from the sale or cost of the purchase in determining
whether the Trust has realized a gain or loss on investment transactions.

The main risk that is associated with purchasing swap options is that the
swap option expires without being exercised. In this case, the option expires
worthless and the premium paid for the swap option is considered the loss. The
main risk that is associated with the writing of a swap option is the market
risk of an unfavorable change in the value of the interest rate swap underlying
the written swap option.

Swap options may be used by the Trust to manage the duration of the Trust's
portfolio in a manner similar to more generic options described above.

FINANCIAL FUTURES CONTRACTS: A futures contract is an agreement between two
parties to buy or sell a financial instrument for a set price on a future date.
Initial margin deposits are made upon entering into futures contracts and can be
either cash or securities. During the period that the futures contract is open,
changes in the value of the contract are recognized as unrealized gains or
losses by "marking-to-market" on a daily basis to reflect the market value of
the contract at the end of each day's trading. Variation margin payments are
made or received, depending upon whether unrealized gains or losses are
incurred. When the contract is closed, the Trust records a realized gain or loss
equal to the difference between the proceeds from (or cost of) the closing
transaction and the Trust's basis in the contract.

Financial futures contracts, when used by the Trust, help in maintaining a
targeted duration. Futures contracts can be sold to effectively shorten an
otherwise longer duration portfolio. In the same sense, futures contracts can be
purchased to lengthen a portfolio that is shorter than its duration target.
Thus, by buying or selling futures contracts, the Trust can effectively hedge
more volatile positions so that changes in interest rates do not change the
duration of the portfolio unexpectedly.

The Trust may invest in financial futures contracts primarily for the
purpose of hedging its existing portfolio securities or securities the Trust
intends to purchase against fluctuations in value caused by changes in
prevailing market interest rates. Should interest rates move unexpectedly, the
Trust may not achieve the anticipated benefits of the financial futures con-

<PAGE>

tracts and may realize a loss. The use of futures transactions involves the risk
of imperfect correlation in movements in the price of futures contracts,
interest rates and the underlying hedged assets. The Trust is also at risk of
not being able to enter into a closing transaction for the futures contract
because of an illiquid secondary market. In addition, since futures are used to
shorten or lengthen a portfolio's duration, there is a risk that the portfolio
may have temporarily performed better without the hedge or that the Trust may
lose the opportunity to realize appreciation in the market price of the
underlying positions.

SHORT SALES: The Trust may make short sales of securities as a method of hedging
potential price declines in similar securities owned. When the Trust makes a
short sale, it may borrow the security sold short and deliver it to the
broker-dealer through which it made the short sale as collateral for its
obligation to deliver the security upon conclusion of the sale. The Trust may
have to pay a fee to borrow the particular securities and may be obligated to
pay over any premiums received on such borrowed securities. A gain, limited to
the price at which the Trust sold the security short, or a loss, unlimited as to
dollar amount, will be recognized upon the termination of a short sale if the
market price is less or greater than the proceeds originally received.

SECURITY LENDING: The Trust may lend its portfolio securities to qualified
institutions. The loans are secured by collateral at least equal, at all times,
to the market value of the securities loaned. The Trust may bear the risk of
delay in recovery of, or even loss of rights in, the securities loaned should
the borrower of the securities fail financially. The Trust receives compensation
for lending its securities in the form of interest on the loan. The Trust also
continues to receive interest on the securities loaned, and any gain or loss in
the market price of the securities loaned that may occur during the term of the
loan will be for the account of the Trust.

INTEREST RATE CAPS: Interest rate caps are similar to interest rate swaps,
except that one party agrees to pay a fee, while the other party pays the
excess, if any, of a floating rate over a specified fixed or floating rate.

Interest rate caps are intended to both manage the duration of the Trust's
portfolio and its exposure to changes in short-term rates. Owning interest rate
caps reduces the portfolio's duration, making it less sensitive to changes in
interest rates from a market value perspective. The effect on income involves
protection from rising short-term rates, which the Trust experiences primarily
in the form of leverage.

The Trust is exposed to credit loss in the event of non-performance by the
other party to the interest rate cap. However, the Trust does not anticipate
non-performance by any counterparty.

INTEREST RATE FLOORS: Interest rate floors are similar to interest
rate swaps, except that one party agrees to pay a fee, while the other party
pays the deficiency, if any, of a floating rate under a specified fixed or
floating rate.

Interest rate floors are used by the Trust to both manage the duration of
the portfolio and its exposure to changes in short-term interest rates. Selling
interest rate floors reduces the portfolio's duration, making it less sensitive
to changes in interest rates from a market value perspective. The Trust's
leverage provides extra income in a period of falling rates. Selling floors
reduces some of that advantage by partially monetizing it as an up front payment
which the Trust receives.

The Trust is exposed to credit loss in the event of non-performance by the
other party to the interest rate floor. However, the Trust does not anticipate
non-performance by any counterparty.

Transactions fees paid or received by the Trust are recognized as assets or
liabilities and amortized or accreted into interest expense or income over the
life of the interest rate floor. The asset or liability is subsequently adjusted
to the current market value of the interest rate floor purchased or sold.
Changes in the value of the interest rate floor are recognized as unrealized
gains and losses. 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.

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 substantially all of its taxable income to shareholders. Therefore,
no federal income tax provision is required. As part of its tax planning
strategy, the Trust may retain a portion of its taxable income and pay an excise
tax on the undistributed amounts.

DIVIDENDS AND DISTRIBUTIONS: The Trust declares and pays dividends and
distributions monthly first from net investment income, then from net realized
short-term capital gains and other

<PAGE>

sources, if necessary. Net long-term capital gains, if any, in excess of loss
carryforwards may be distributed 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.

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 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"), an indirect, wholly-owned subsidiary of The Prudential
Insurance Co. of America.

The investment advisory fee paid to the Adviser is computed weekly and
payable monthly at an annual rate of 0.45% of the Trust's average weekly net
assets. The administration fee paid to PIFM is also computed weekly and payable
monthly at an annual rate of 0.10% of the first $500 million of the Trust's
average weekly net assets and 0.08% of any excess.

Pursuant to the agreements, the adviser provides continuous supervision of the
investment portfolio and pays the compensation of officers of the trust who are
affiliated persons of the adviser. Pifm pays occupancy and certain clerical and
accounting costs of the trust. The trust bears all other costs and expenses.

NOTE 3. PORTFOLIO SECURITIES
Purchases and sales of investment securities, other than short-term investments
and dollar rolls, for the six months ended June 30, 1999 aggregated $163,004,709
and $102,570,819, respectively. The Trust may invest up to 40% of its total
assets in securities which are not readily marketable, including those which are
restricted as to disposition under securities law ("restricted securities"). At
June 30, 1999, the Trust held 0.05% of its portfolio assets in securities
restricted as to resale all of which are illiquid securities.

The Trust may from time to time purchase in the secondary market certain
mortgage pass-through securities packaged or master serviced by PNC Mortgage
Securities Corp. (or Sears Mortgage if PNC Mortgage Securities Corp. succeeded
to rights and duties of Sears) or mortgage related securities containing loans
or mortgages originated by PNC Bank or its affiliates, including Midland Loan
Services, Inc. It is possible under certain circumstances, PNC Mortgage
Securities Corp. or its affiliates, including Midland Loan Services, Inc., could
have interests that are in conflict with the holders of these mortgage backed
securities, and such holders could have rights against PNC Mortgage Securities
Corp. or its affiliates, including Midland Loan Services, Inc.

The federal income tax basis of the Trust's investments at June 30, 1999
was $1,343,383,100 and accordingly, net unrealized appreciation for federal
income tax purposes was $8,385,842 (gross unrealized appreciation--$24,982,258;
gross unrealized depreciation--$16,596,416).

For federal income tax purposes, the Trust had a capital loss carryforward
at December 31, 1998 of approximately $1,022,000 which will expire at the
termination of the Trust. Accordingly, no capital gains distribution is expected
to be paid to shareholders until net gains have been realized in excess of such
amount.

Details of open interest rate swap at June 30, 1999 are as follows:

NOTIONA L FLOATING/
AMOUNT FIXED FLOATING TERMINATION UNREALIZED
(000) TYPE RATE RATE DATE APPRECIATION
- -------- ---- ---- -------- ------------- ------------
$60,000 Floating Rate 3-mo. T-Bill 3 mo. LIBOR 9/10/03 $2,160
+81.75 bps ======

NOTE 4. BORROWINGS
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 will be based upon
competitive market rates at the time of issuance. At the time the Trust enters
into a reverse repurchase agreement, it will establish and maintain a segregated
account with the lender, the value of which at least equals the principal amount
of the reverse repurchase transactions including accrued interest.

The average daily balance of reverse repurchase agreements outstanding
during the six months ended June 30, 1999 was approximately $406,548,726 at a
weighted average interest rate of approximately 4.72%. The maximum amount of
reverse repurchase agreements outstanding at any month-end during

<PAGE>

the period ended June 30, 1999 was $419,620,963 as of January 31, 1999 which was
29% of total assets.

DOLLAR ROLLS: The Trust may enter into dollar rolls in which the Trust sells
securities for delivery in the current month and simultaneously contracts to
repurchase substantially similar (same type, coupon and maturity) securities on
a specified future date. During the roll period the Trust forgoes principal and
interest paid on the securities. The Trust will be compensated by the interest
earned on the cash proceeds of the initial sale and by the lower repurchase
price at the future date.

The Trust had no outstanding dollar rolls during the six months ended June
30, 1999.

NOTE 5. CAPITAL
There are 200 million shares of $.01 par value common stock authorized. Of the
95,460,639 shares outstanding at June 30, 1999, the Adviser owned 10,639 shares.

NOTE 6. DIVIDENDS
Subsequent to June 30, 1999, the Board of Directors of the Trust declared
dividends from undistributed earnings of $0.04167 per share payable July 30,
1999 to shareholders of record on July 15, 1999.

<PAGE>

- --------------------------------------------------------------------------------
THE BLACKROCK TARGET TERM TRUST INC.
DIVIDEND REINVESTMENT PLAN
- --------------------------------------------------------------------------------

Pursuant to the Trust's Dividend Reinvestment Plan (the "Plan"),
shareholders may elect 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 do not 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 Plan Agent will, as agent for the participants, receive the
cash payment and use it to buy Trust shares in the open market on the New York
Stock Exchange or elsewhere, for the participants' accounts. The Trust will not
issue any new shares in connection with the Plan.

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.

<PAGE>

- --------------------------------------------------------------------------------
THE BLACKROCK TARGET TERM TRUST INC.
ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------

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.

ANNUAL MEETING OF TRUST SHAREHOLDERS. 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.

The Annual Meeting of Trust Shareholders was held May 19, 1999 to vote on
the following matters:
(1) To elect three Directors as follows:

DIRECTOR CLASS TERM EXPIRING
-------- ------ ----- -------
Andrew F. Brimmer I 3 years 2002
Kent Dixon I 3 years 2002
Laurence D. Fink I 3 years 2002

Directors whose term of office continues beyond this meeting are Richard E.
Cavanagh, Frank J. Fabozzi, James Grosfeld, James Clayburn La Force, Jr.,
Walter F. Mondale and Ralph L. Schlosstein.

(2) To ratify the selection of Deloitte & Touche LLP as independent public
accountants of the Trust for the fiscal year ending December 31, 1999.

Shareholders elected the three Directors and ratified the selection of
Deloitte & Touche LLP. The results of the voting was as follows:

VOTES FOR VOTES AGAINST ABSTENTIONS
--------- ------------ -----------
Andrew F. Brimmer 78,294,435 -- 1,355,285
Kent Dixon 78,411,032 -- 1,238,688
Laurence D. Fink 78,439,410 -- 1,210,310
Ratification of
Deloitte & Touche LLP 78,340,062 444,254 865,404

<PAGE>

- --------------------------------------------------------------------------------
THE BLACKROCK TARGET TERM TRUST INC.
INVESTMENT SUMMARY
- --------------------------------------------------------------------------------

THE TRUST'S INVESTMENT OBJECTIVE
The BlackRock Target Term Trust Inc.'s investment objective is to manage a
portfolio of investment grade fixed income securities that will return $10 per
share (the initial public offering price per share) to investors on or shortly
before December 31, 2000 while providing high monthly income.

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 funds. BlackRock manages
over 470 accounts, domiciled in the United States and overseas.

WHAT CAN THE TRUST INVEST IN?
The Trust may invest in all fixed income securities rated investment grade or
higher ("AAA", "AA", "A" or "BBB"). Examples of securities in which the Trust
may invest include U.S. government and government agency securities, zero coupon
securities, mortgage-backed securities, corporate debt securities, asset-backed
securities, U.S. dollar-denominated foreign debt securities and municipal
securities. Under current market conditions, BlackRock expects that the primary
investments of the Trust will be U.S. government securities, securities backed
by government agencies (such as mortgage-backed securities) and corporate debt
securities.

WHAT IS THE ADVISER'S INVESTMENT STRATEGY?
The Adviser will seek to meet the Trust's investment objective by managing the
assets of the Trust so as to return the initial offering price ($10 per share)
at maturity. The Adviser will implement a conservative strategy that will seek
to closely match the maturity of the assets of the portfolio with the future
return of the initial investment at the end of 2000. At the Trust's termination,
BlackRock expects that the value of the securities which have matured, combined
with the value of the securities that are sold will be sufficient to return the
initial offering price to investors. On a continuous basis, the Trust will seek
its objective by actively managing its assets in relation to market conditions,
interest rate changes and, importantly, the remaining term to maturity of the
Trust. In addition to seeking the return of the initial offering price, the
Adviser also seeks to provide high monthly income to investors. The portfolio
managers will attempt to achieve this objective by investing in securities that
provide competitive income. In addition, leverage will be used (in an amount up
to 331/3% of the total assets) to enhance the income of the portfolio. In order
to maintain competitive yields as the Trust approaches maturity and depending on
market conditions, the Adviser will attempt to purchase securities with call
protection or maturities as close to the Trust's maturity date as possible.
Securities with call protection should provide the portfolio with some degree of
protection against reinvestment risk during times of lower prevailing interest
rates. Since the Trust's primary goal is to return the initial offering price at
maturity, any cash that the Trust receives prior to its maturity date (i.e. cash
from early and regularly scheduled payments of principal on mortgage-backed
securities) will be reinvested in securities with maturities which coincide with
the remaining term of the Trust. Since shorter-term securities typically yield
less than longer-term securities, this strategy will likely result in a decline
in the Trust's income over time. However, the Adviser will attempt to maintain a
yield which is competitive with a comparable maturity Treasury at the same point
on the yield curve (i.e. if the Trust has three years left until its maturity,
the Adviser will attempt to maintain a yield at a spread over a 3-year
Treasury). It is important to note that the Trust will be managed so as to
preserve the integrity of the return of the initial offering price.

<PAGE>

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 A TERM TRUST
Under current market conditions, leverage increases the income earned by the
Trust. The Trust employs leverage primarily through the use of reverse
repurchase agreements and dollar rolls. 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 331/3% 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. 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 TERM TRUSTS
THE TRUST IS INTENDED TO BE A LONG-TERM INVESTMENT AND IS NOT A SHORT-TERM
TRADING VEHICLE.

RETURN OF INITIAL INVESTMENT. Although the objective of the Trust is to return
its initial offering price upon termination, there can be no assurance that this
objective will be achieved.

DIVIDEND CONSIDERATIONS.
The income and dividends paid by the Trust are likely to decline to some extent
over the term of the Trust due to the anticipated shortening of the
dollar-weighted average maturity of the Trust's assets.

INTEREST-ONLY SECURITIES
(IO). The yield to maturity on an IO class is extremely sensitive to the rate of
principal payments (including prepayments) on the related underlying Mortgage
Assets, and a rapid rate of principal payments may have a material adverse
effect on such security's yield to maturity. If the underlying Mortgage Assets
experience greater than anticipated prepayments of principal, the Trust may fail
to recoup fully its initial investment in these securities even if the
securities are rated AAA by S&P or Aaa by Moody's.

LEVERAGE.
The Trust utilizes leverage through reverse repurchase agreements and dollar
rolls, 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 (NYSE symbol: BTT) 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.

MORTGAGE-BACKED AND ASSET-BACKED SECURITIES.
The cash flow and yield characteristics of these securities differ from
traditional debt securities. The major differences typically include more
frequent payments and the possibility of prepayments which will change the yield
to maturity of the security.

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
movements on these securities are generally more sensitive to interest rate
movements than 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 objective.

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 10% of its assets in non-U.S. dollar-denominated
securities which involve special risks such as currency, political and economic
risks, although under current market conditions does not do so.

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.

<PAGE>

- --------------------------------------------------------------------------------
THE BLACKROCK TARGET TERM TRUST INC.
GLOSSARY
- --------------------------------------------------------------------------------

ADJUSTABLE RATE MORTGAGE-BACKED SECURITIES (ARMS):
Mortgage instruments with interest rates that adjust at periodic intervals at a
fixed amount over the market levels of interest rates as reflected in specified
indexes. ARMS are backed by mortgage loans secured by real property.

ASSET-BACKED SECURITIES:
Securities backed by various types of receivables such as automobile and credit
card receivables.

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.

COLLATERALIZED MORTGAGE OBLIGATIONS (CMOS):
Mortgage-backed securities which separate mortgage pools into short-, medium-,
and long-term securities with different priorities for receipt of principal and
interest. Each class is paid a fixed or floating rate of interest at regular
intervals. Also known as multiple-class mortgage pass-throughs.

COMMERCIAL MORTGAGE BACKED SECURITIES (CMBS):
Mortgage-backed securities secured or backed by mortgage loans on commercial
properties.

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.

FHA:
Federal Housing Administration, a government agency that facilitates a secondary
mortgage market by providing an agency that guarantees timely payment of
interest and principal on mortgages.

FHLMC:
Federal Home Loan Mortgage Corporation, a publicly owned, federally chartered
corporation that facilitates a secondary mortgage market by purchasing mortgages
from lenders such as savings institutions and reselling them to investors by
means of mortgage-backed securities. Obligations of FHLMC are not guaranteed by
the U.S. government, however; they are backed by FHLMC's authority to borrow
from the U.S. government. Also known as Freddie Mac.

FNMA:
Federal National Mortgage Association, a publicly owned, federally chartered
corporation that facilitates a secondary mortgage market by purchasing mortgages
from lenders such as savings institutions and reselling them to investors by
means of mortgage-backed securities. Obligations of FNMA are not guaranteed by
the U.S. government, however; they are backed by FNMA's authority to borrow from
the U.S. government. Also known as Fannie Mae.

GNMA:
Government National Mortgage Association, a government agency that facilitates a
secondary mortgage market by providing an agency that guarantees timely payment
of interest and principal on mortgages. GNMA's obligations are supported by the
full faith and credit of the U.S. Treasury. Also known as Ginnie Mae.

<PAGE>

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).

INVERSE-FLOATING RATE MORTGAGES:
Mortgage instruments with coupons that adjust at periodic intervals according to
a formula which sets inversely with a market level interest rate index.

INTEREST-ONLY SECURITIES:
Mortgage securities including CMBS that receive only the interest cash flows
from an underlying pool of mortgage loans or underlying pass-through securities.
Also known as a STRIP.

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.

MORTGAGE DOLLAR ROLLS:
A mortgage dollar roll is a transaction in which the Trust sells mortgage-backed
securities for delivery in the current month and simultaneously contracts to
repurchase substantially similar (although not the same) securities on a
specified future date. During the "roll" period, the Trust does not receive
principal and interest payments on the securities, but is compensated for giving
up these payments by the difference in the current sales price (for which the
security is sold) and lower price that the Trust pays for the similar security
at the end date as well as the interest earned on the cash proceeds of the
initial sale.

MORTGAGE PASS-THROUGHS:
Mortgage-backed securities issued by Fannie Mae, Freddie Mac or Ginnie Mae.

MULTIPLE-CLASS PASS-THROUGHS:
Collateralized Mortgage Obligations.

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.

PRINCIPAL-ONLY SECURITIES:
Mortgage securities that receive only the principal cash flows from an
underlying pool of mortgage loans or underlying pass-through securities. Also
known as STRIPS.

PROJECT LOANS:
Mortgages for multi-family, low- to middle-income housing.

PREMIUM:
When a fund's stock price is greater than its net asset value, the fund is said
to be trading at a premium.

REMIC:
A real estate mortgage investment conduit is a multiple-class security backed by
mortgage-backed securities or whole mortgage loans and formed as a trust,
corporation, partnership, or segregated pool of assets that elects to be treated
as a REMIC for federal tax purposes. Generally, Fannie Mae REMICs are formed as
trusts and are backed by mortgage-backed securities.

RESIDUALS:
Securities issued in connection with collateralized mortgage obligations that
generally represent the excess cash flow from the mortgage assets underlying the
CMO after payment of principal and interest on the other CMO securities and
related administrative expenses.

REVERSE REPURCHASE AGREEMENTS:
In a reverse repurchase agreement, the Trust sells securities and agrees to
repurchase them at a mutually agreed date and price. During this time, the Trust
continues to receive the principal and interest payments from that security. At
the end of the term, the Trust receives the same securities that were sold for
the same initial dollar amount plus interest on the cash proceeds of the initial
sale.

STRIPPED MORTGAGE-BACKED SECURITIES:
Arrangements in which a pool of assets is separated into two classes that
receive different proportions of the interest and principal distributions from
underlying mortgage-backed securities. IO's and PO's are examples of strips.

<PAGE>

- --------------------------------------------------------------------------------
BLACKROCK FINANCIAL MANAGEMENT, INC.
SUMMARY OF CLOSED-END FUNDS
- --------------------------------------------------------------------------------

TAXABLE TRUSTS
- --------------------------------------------------------------------------------
STOCK MATURITY
PERPETUAL TRUSTS SYMBOL DATE
------ --------
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. BTM 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

TAX-EXEMPT TRUSTS
- --------------------------------------------------------------------------------
STOCK MATURITY
PERPETUAL TRUSTS SYMBOL DATE
------ --------
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

IF YOU WOULD LIKE FURTHER INFORMATION PLEASE CALL BLACKROCK AT
(800) 227-7BFM (7236)
OR CONSULT WITH YOUR FINANCIAL ADVISOR.

<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
Richard M. Shea, VICE PRESIDENT/TAX
Henry Gabbay, TREASURER
James Kong, ASSISTANT TREASURER
Karen H. Sabath, SECRETARY

INVESTMENT ADVISER
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 June 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 TARGET TERM TRUST INC.
c/o Prudential Investments Fund Management LLC
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
(800) 227-7BFM

Printed on recycled paper 092476-10-0

THE BLACKROCK
TARGET
TERM TRUST INC.
- ------------------
SEMI-ANNUAL REPORT
JUNE 30, 1999