BLACKROCK ADVANTAGE TERM TRUST INC, N-30D, 1999-03-02

BLACKROCK ADVANTAGE TERM TRUST INC
N-30D, 1999-03-02

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- -------------------------------------------------------------------------------
THE BLACKROCK ADVANTAGE TERM TRUST INC.
CONSOLIDATED ANNUAL REPORT TO SHAREHOLDERS
REPORT OF INVESTMENT ADVISER
- --------------------------------------------------------------------------------

January 31, 1999

Dear Shareholders:

Over the past twelve months, U.S. Treasury securities have experienced a
strong rally, as investors sought a safe haven from global market turmoil and
the Federal Reserve continued to cut interest rates. Other segments of the fixed
income market have lagged behind Treasuries, but still produced generally
positive returns since our last report. We anticipate that the Federal Reserve
will remain prepared to combat any signs of a credit crunch through interest
rate cuts, and given the unstable economic situation in Brazil, the Fed likely
will retain an easing bias.

Despite previous worries of a second half slowdown in 1998, the U.S. economy
continues to expand rapidly, supported by strong consumer spending. This
momentum, however, may not continue as briskly into the new year, based on
weaker corporate profits and a loosening of the labor markets. Already, major
corporations have warned of slower profit growth and announced major layoffs.

This report contains detailed market and portfolio strategy by your Trust's
managers in addition to the Trust's audited financial statements and a detailed
list of the portfolio's holdings. We thank you for your continued investment in
the Trust and look forward to serving your investment needs in the future.

Sincerely,

/s/ Laurence D. Fink /s/ Ralph L. Schlosstein
- ------------------- --------------------
Laurence D. Fink Ralph L. Schlosstein
Chairman President

<PAGE>

January 31, 1999

Dear Shareholder:

We are pleased to present the annual report for The BlackRock Advantage
Term Trust Inc. ("the Trust") for the year ended December 31, 1998. 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 "BAT". The
Trust's investment objective is to return $10 per share (its initial offering
price) to shareholders on or about December 31, 2005 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:

----------------------------------------------------
12/31/98 12/31/97 CHANGE HIGH LOW
- --------------------------------------------------------------------------------
STOCK PRICE $9.812 $9.375 4.67% $10.125 $9.3125
- --------------------------------------------------------------------------------
NET ASSET VALUE (NAV) $11.07 $10.60 4.43% $11.41 $10.60
- --------------------------------------------------------------------------------
10-YEAR TREASURY NOTE 4.65% 5.74% (18.99%) 5.81% 4.16%
- --------------------------------------------------------------------------------

THE FIXED INCOME MARKETS

The first half of the Trust's fiscal year saw Treasury yields decline
towards historic lows. These lows were the result of budget surplus projections
as well as the Federal Reserve's decision to move from a tightening bias to a
neutral interest rate policy. The positive economic momentum throughout the
first half of the fiscal year was strengthened by unseasonably warm weather that
led to increased consumer spending and job gains, which softened the negative
impact on trade from the Asian financial crisis.

The second half of the trust's fiscal year witnessed virtually
unparalleled market turbulence. Although consumers continued their spending
domestically, demand for U.S. goods abroad faltered, as the strong dollar and
overseas weakness, especially in Asia, drove prices for U.S. goods higher
relative to foreign goods.

Toward year-end, U.S. GDP growth rebounded; however, the instability in
global financial markets began to rattle investor confidence. The devaluation of
the Russian ruble and the fear of a possible devaluation of the Brazilian
currency caused a flight-to-quality to U.S. Treasuries. Corporate yield spreads
across all credits to Treasuries widened dramatically as a result of the
sell-off. This dramatic shift of investor sentiment culminated in the near
collapse of a prominent hedge fund.

<PAGE>

The Treasury market rally pushed Treasury yields to historic levels below
the 5% barrier. In response to the financial fragility in the third quarter of
1998, the Fed eased interest rates on September 29, 1998 by 25bps and again on
October 15, in an unusual between-meetings move. On November 17, the Fed eased
interest rates again by 25bps.

These rate cuts seem to have had their desired effect on the US
economy--which finished the year with a 3.5% growth rate. Growth in 1999,
however, may decrease significantly and further easing of interest rates by the
Federal Reserve is possible as the Western economies will need to provide
support for the global economy. With economic growth and labor markets expected
to soften during the first half of 1999, we expect inflation to remain under
control.

The global instability which resulted in a flight-to-quality to
USTreasuries caused mortgages to severely underperform Treasuries. However, as
these markets have regained some stability, investors have begun to regain
confidence in the international markets. Consequently, we believe that current
spreads in the corporate, and mortgage markets will provide the basis for
outperforming Treasuries.

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 chart compares the Trust's current and December 31, 1997 asset
composition.

<TABLE>
<CAPTION>
----------------------------------------------------------------------------
THE BLACKROCK ADVANTAGE TERM TRUST INC.
----------------------------------------------------------------------------
COMPOSITION DECEMBER 31, 1998 DECEMBER 31, 1997
----------------------------------------------------------------------------
<S> <C> <C>
Zero-Coupon Bonds 42% 39%
----------------------------------------------------------------------------
Corporate Bonds 11% 12%
----------------------------------------------------------------------------
U. S. Government Securities 9% 8%
----------------------------------------------------------------------------
Commercial Mortgage-Backed Securities 8% 5%
----------------------------------------------------------------------------
Agency Multiple Class Mortgage Pass-Throughs 6% 8%
----------------------------------------------------------------------------
Mortgage Pass-Throughs 4% 9%
----------------------------------------------------------------------------
Taxable Municipal Bonds 4% 4%
----------------------------------------------------------------------------
Inverse-Floating Rate Mortgages 4% 7%
----------------------------------------------------------------------------
Interest-Only Commercial Mortgage-Backed
Securities 4% 1%
----------------------------------------------------------------------------
Interest-Only Mortgage-Backed Securities 3% 1%
----------------------------------------------------------------------------
Principal-Only Mortgage-Backed Securities 2% 3%
----------------------------------------------------------------------------
Non-Agency Multiple Class Mortgage Pass-Throughs 1% 2%
----------------------------------------------------------------------------
Asset-Backed Securities 1% --
----------------------------------------------------------------------------
CMO Residuals 1% 1%
----------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
----------------------------------------------------------------------------
RATING % OF CORPORATES
----------------------------------------------------------------------------
CREDIT RATING DECEMBER 31, 1998 DECEMBER 31, 1997
----------------------------------------------------------------------------
<S> <C> <C> <C>
AA or equivalent 15% 3%
----------------------------------------------------------------------------
A or equivalent 40% 41%
----------------------------------------------------------------------------
BBB or equivalent 40% 51%
----------------------------------------------------------------------------
BB or equivalent 5% 5%
----------------------------------------------------------------------------
</TABLE>

<PAGE>

In accordance with the Trust's primary investment objective of returning
the initial offer price upon maturity, the Trust's portfolio management activity
focused on adding securities which offered both attractive yield spreads over
Treasury securities and a maturity date matching the Trust's termination date of
December 31, 2005. 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.

We appreciate your investment in The BlackRock Advantage Term Trust Inc.
and look forward to managing the fund to realize its investment objectives.
Please feel free to contact the mutual fund specialists at BlackRock's marketing
center at (800) 227-7BFM (7236) if you have any questions that weren't answered
in this report. You can also reach us via e-mail at
[email protected]

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.

- --------------------------------------------------------------------------------
THE BLACKROCK ADVANTAGE TERM TRUST INC.
- --------------------------------------------------------------------------------
Symbol on New York Stock Exchange: BAT
- --------------------------------------------------------------------------------
Initial Offering Date: April 27, 1990
- --------------------------------------------------------------------------------
Closing Stock Price as of 12/31/98: $9.8125
- --------------------------------------------------------------------------------
Net Asset Value as of 12/31/98: $11.07
- --------------------------------------------------------------------------------
Yield on Closing Stock Price as of 12/31/98 ($9.8125)1: 6.37%
- --------------------------------------------------------------------------------
Current Monthly Distribution per Share2: $0.052083
- --------------------------------------------------------------------------------
Current Annualized Distribution per Share2: $0.625
- --------------------------------------------------------------------------------

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

<PAGE>

- ---------------------------------------
THE BLACKROCK ADVANTAGE TERM TRUST INC.
CONSOLIDATED PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1998
- ---------------------------------------

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

LONG-TERM INVESTMENTS--143.2%
MORTGAGE PASS-THROUGHS--6.8%
Federal Home Loan Mortgage Corp.,
$ 1,126 6.50%, 8/01/25 ...................... $ 1,133,596
2,842++ 9.50%, 1/01/05, 15 Year ............. 2,934,370
11 Federal National Mortgage
Association, 9.50%, 7/01/20 ........ 11,553
2,966+ Government National Mortgage
Association,
8.00%, 7/15/27 ..................... 3,082,736
-----------
7,162,255
-----------
MULTIPLE CLASS MORTGAGE
PASS-THROUGHS--16.0%
Federal Home Loan Mortgage Corp.,
Multiclass Mortgage
Participation Certificates,
422 Series 1490, Class 1490-SE,
4/15/08 (ARM) ...................... 402,385
283 Series 1541, Class 1541-TB,
7/15/23 (ARM) ...................... 273,497
284 Series 1655, Class 1655-SB,
12/15/08 (ARM) ..................... 277,926
Federal National Mortgage
Association, REMIC Pass-
Through Certificates,
3,683 Trust 1992-129, Class 129-J,
7/25/20 ............................ 3,526,473
2,000+ Trust 1992-190, Class 190-S,
11/25/07 (ARM) ..................... 2,089,226
90 Trust 1993-59, Class 59-SC,
11/25/07 (ARM) ..................... 93,908
1,444 Trust 1993-193, Class 193-E,
9/25/23 (I) ........................ 768,425
111 Trust 1993-193, Class 193-PC,
9/25/23 ............................ 107,394
1,177 Trust 1993-212, Class 212-SA,
11/25/08 (ARM) ..................... 1,182,452
2,599 Trust 1993-223, Class 223-PT
10/25/23 (I) ....................... 381,416
1,000 Trust 1994-13, Class 13-SM,
2/25/09 (ARM) ...................... 1,022,390
1,012 Trust 1994-37, Class 37-SC,
3/25/24 (ARM) ...................... 993,430
2,828++ Trust 1994-72, Class 72-L,
4/25/24 ............................ 2,839,285
2,500 Trust 1997-50, Class 50-HK,
8/25/27 (I) ........................ 771,276
AAA 2,000 New York City Mortgage Loan Trust,***
Series 1996, Class A2,
6/25/11 ............................ 2,108,750
-----------
16,838,233
-----------
COMMERCIAL MORTGAGE-BACKED
SECURITIES--16.8%
Credit Suisse First Boston
Mortgage Securities Corp.,
A- $ 1,000 Series 1995-AEW 1, Class C,
7.46%, 11/25/27 .................... $ 1,005,625
AAA 28,505 Series 1997-C1, Class AX,***
6/20/29 (I/O) ...................... 2,834,467
BBB 1,000 DLJ Mortgage Acceptance Corp.,***
Series 1997-CF, Class B1,
7.91%, 4/15/07 ..................... 1,037,328
AAA 19,873 First Union-Lehman Brothers--
Bank of America,
Series 1998-C2, Class IO,
5/18/28 (I/O) ...................... 816,079
AAA 1,000++ GMAC Commercial Mortgages
Securities Inc., Series 1998-C2,
Class A2, 6.42%, 8/15/08 ............ 1,039,223
AAA 1,000 Goldman Sachs Mortgage
Securities Corp.,
Series 1996-PL, Class A2,
7.41%, 2/15/27 ..................... 1,068,661
AAA 809 LTC Commercial Mortgage Corp.,***
Series 1996-1,Class A,
7.06%, 4/15/28 ..................... 828,860
Merrill Lynch Mortgage Investors Inc.,
Multiclass Mortgage
Pass-Through Certificates,
BBB 1,000 Series 1995-C1, Class D,
8.08%, 5/25/15 ..................... 1,031,265
BBB 500 Series 1996-C1, Class D,
7.42%, 4/25/28 ..................... 494,525
AAA 11,867 Series 1997-C2, Class IO,
12/10/29 (I/O) ..................... 868,644
AAA 20,591 Morgan (J.P.) Commercial Mortgage
Finance Corp.,*** Commercial
Mortgage Pass-Through Certificates,
Series 1997-C5, Class X,
9/15/29 (I/O) ..................... 1,712,981
Morgan Stanley Capital 1 Inc.,
Commercial Mortgage
Pass-Through Certificates,
BBB 1,000 Series 1995-GAL1,*** Class D,
8.25%, 8/15/27 .................... 1,025,405
AAA 3,562 Series 1997-HF1,*** Class X,
6/15/17 (I/O) ..................... 321,565

See Notes to Consolidated Financial Statements.

5
<PAGE>

- -------------------------------------------------------------------------------
PRINCIPAL
RATING* AMOUNT VALUE
(UNAUDITED) (000) DESCRIPTION (NOTE 1)
- --------------------------------------------------------------------------------
COMMERCIAL MORTGAGE-BACKED
SECURITIES--(CONT'D)
AA $ 450 Salomon Brothers Mortgage
Securities Corp.,***
Multiclass Mortgage Pass-
Through Certificates,
Series 1997-TZH, Class A1,
7.15%, 3/25/25 ....................... 465,972
AAA 2,635 Sears Mortgage Securities Corp.,
Series 1993-7, Class S3
9.91%, 4/25/08 (ARM) ................. 2,672,863
AAA 500 Structured Asset Securities Corp.,
Series 1996-CFL, Class B,
6.30%, 2/25/28 ....................... 503,532
-----------
17,726,995
-----------
CORPORATE BONDS--15.9%
FINANCE & BANKING--9.4%
A3 1,000@ American Savings Bank,***
6.63%, 2/15/06 ....................... 1,017,803
A 1,487 Equitable Life Assurance
Society USA,***
Zero Coupon,
6/01/99-12/01/05 ..................... 1,049,474
A 1,000 Lehman Brothers Holdings, Inc.,
6.75%, 9/24/01 ....................... 1,008,624
BB+ 1,000 Macsaver Financial Services Inc.,
7.88%, 8/01/03 ....................... 790,000
BBB+ 1,900 PaineWebber Group Inc.,
7.88%, 2/15/03 ....................... 2,008,148
Salomon Smith Barney, Inc.,
Aa3 1,000 6.75%, 1/15/06 ....................... 1,032,260
Aa3 1,425 7.98%, 3/01/00 ....................... 1,464,359
A- 1,485 Transamerica Finance Corp.,
6.75%, 6/01/00 ....................... 1,504,424
-----------
9,875,092
-----------
INDUSTRIALS--2.5%
AA- 1,000@@ TCI Communications, Inc.,
8.25%, 1/15/03 ...................... 1,097,400
Baa2 2,092 Union Pacific Corp.,***
Zero Coupon,
5/01/99 - 5/01/05 ................... 1,531,297
-----------
2,628,697
-----------
UTILITIES--2.0%
A 1,000 AlltelCorp.,
7.50%, 3/01/06 ...................... 1,099,700
BBB- 1,000 NRG Energy, Inc,***
7.63%, 2/01/06 ...................... 1,031,000
-----------
2,130,700
-----------
YANKEE--2.0%
BBB- 1,000 Empresa Electric Guacolda SA,***
7.95%, 4/30/03 ...................... 917,674
BBB+ 200 Empresa Electric Pehuhuenche,
7.30%, 5/01/03 ...................... 184,252
A- 1,000++ Israel Electric Corp. Ltd.,***
7.25%, 12/15/06 ..................... 1,005,930
-----------
2,107,856
-----------
Total corporate bonds 16,742,345
-----------
ASSET-BACKED SECURITIES--1.5%
AAA 800 Chase Credit Card Master Trust,
Series 1997-5, 6.19%, 8/15/05 ....... 817,361
N/R 431 Global Rated Eligible Asset Trust,**/***
Series 1998-A, Class A-1,
7.33%, 3/15/06 ...................... 298,943
N/R 899 Structured Mortgage Asset
Residential Trust,**/***
Series 1997-3, 8.57%, 4/15/06 ....... 497,595
-----------
1,613,899
-----------
STRIPPED MORTGAGE-BACKED
SECURITIES--5.4%
Collateralized Mortgage Obligation Trust,
AAA 753 Trust 26, Class A, 4/23/17 (P/O)655,771
AAA 61 Trust 29, Class A, 5/23/17 (P/O)49,914
Federal Home Loan Mortgage Corp.,
1,500 Series 1543, Class 1543-VU,
4/15/23 (I/O) ....................... 469,338
1,179 Series 1946, Class 1946-N,
10/15/08 (P/O) ...................... 1,051,422
1,344 Series 1946, Class 1946-SN,
10/15/08 (I/O) ...................... 107,890
5,638 Series 1995, Class 1995-SJ,
10/15/27 (I/O) ...................... 857
3,835 Series G-25, Class S,
8/25/06 (I/O) ....................... 118,050
Federal National Mortgage Association,
1,406 Trust 1993-225, Class 225-ME,
11/25/23 (P/O) ...................... 664,335
6,755 Trust 1997-84, Class 84-PJ
1/25/08 (I/O) ....................... 1,726,068
524 Trust 1997-85, Class 85-LE,
10/25/23 (P/O) ...................... 492,404
3,486 Trust 1998-62, Class EI,
11/25/28 (I/O) ...................... 346,416
-----------
5,682,465
-----------
U.S. GOVERNMENT
SECURITIES--12.6%
1,095 Small Business Administration,
Series 1998-P10, Class 10A,
6.12%, 2/01/08 ...................... 1,113,219
U.S. Treasury Notes,
675 5.50%, 2/15/08 ...................... 715,289
10,000++ 6.63%, 3/31/02 ...................... 10,570,300
765 6.63%, 5/15/07 ...................... 860,265
-----------
13,259,073
-----------
See Notes to Consolidated Financial Statements.

<PAGE>
- -------------------------------------------------------------------------------
PRINCIPAL
RATING* AMOUNT VALUE
(UNAUDITED) (000) DESCRIPTION (NOTE 1)
- --------------------------------------------------------------------------------

ZERO COUPON BONDS--61.0%
$ 12,407 Aid to Israel,
2/15/05 - 8/15/05 ................... 9,065,730
Government Trust Certificates,
5,220 Class 2F, 5/15/05 ................... 3,796,871
13,760 Class T-1, 5/15/05 .................. 10,051,818
22,926++ Resolution Trust Funding Corp.,
7/15/05 ............................. 16,613,784
6,216 Tennessee Valley Authority,
11/01/05 ............................ 4,386,756
18,000+ U.S. Treasury Strips,
11/15/05 ............................ 12,986,280
10,000 Vanguard Prime Money Market Strip,
12/31/04 ............................ 7,243,000
-----------
64,144,239
-----------
TAXABLE MUNICIPAL BONDS--6.1%
AAA 1,000 Alameda County California
Pension Obligation,
Zero Coupon, 12/01/05 ............... 673,110
AAA 1,000 Alaska Energy Power Authority Revenue,
Zero Coupon, 7/01/05 ................ 766,820
AAA 1,466 Kern County California
Pension Obligation,
Zero Coupon, 2/15/99 - 8/15/05 ...... 1,075,025
Long Beach California
Pension Obligation,
AAA 1,475 Zero Coupon, 3/01/99 - 9/01/05 ...... 1,079,816
AAA 500 7.09%, 9/01/09 ...................... 547,960
Los Angeles County California
Pension Obligation,
AAA 440 Zero Coupon, 6/30/99 - 6/30/05 ...... 361,315
AAA 1,000 6.77%, 6/30/05 ...................... 678,630
AAA 1,000 8.62%, 6/30/06 ...................... 1,178,620
-----------
6,361,296
-----------
COLLATERALIZED MORTGAGE
OBLIGATION RESIDUALS**--0.6%
10 Federal Home Loan Mortgage Corp.,
Multiclass Mortgage
Participation Certificates,
Series 1035, Class 1035-R,
1/15/21 ............................. 676,350
-----------
NOTIONAL
AMOUNT
(000)
--------- CALL OPTIONS PURCHASED--0.5%
$ 15,000 Interest Rate Swap,
5.60% over 3 month LIBOR,
expires 8/07/00
(cost $206,250) ...................... 510,602
-----------
Total long-term investments
(cost $137,294,225) .................. 150,717,752
-----------

<PAGE>

SHORT TERM INVESTMENT--4.9%
DISCOUNT NOTES
$ 5,110 Federal Home Loan Bank,
4.60%, 1/4/99
(cost $5,108,168) ................... $ 5,108,168
------------
Total investments before
outstanding call option written
and Investments sold short
(cost $142,402,393) ................... 155,825,920
Notional
AMOUNT
(000)
---------- CALL OPTIONS WRITTEN--(0.5%)
$24,000 Interest Rate Swap,
3 month LIBOR over 5.50%,
expires 8/10/99
(premium received $147,000) .......... (532,896)
-----------
PRINCIPAL
AMOUNT
(000)
----------- INVESTMENTS SOLD SHORT--(8.6%)
U.S. Treasury Bonds,
$ 5,000 6.13%, 11/15/27 ...................... (5,596,850)
3,000 6.38%, 8/15/27 ....................... (3,448,110)
-----------
Total investments sold short
(proceeds $8,711,446) ................ (9,044,960)
-----------
Total investments, net of outstanding
call options written and investments
sold short--139.0%
(cost $133,543,947) .................. 146,248,064
Liabilities in excess of other
assets--(39.0%) ...................... (41,010,409)
------------
NET ASSETS--100% ...................... $105,237,655
============

- ----------------
* Using the higher of Standard & Poor's or Moody's rating.
** Illiquid securities--representing 0.9% of portfolio assets.
*** Restricted securities--representing 10.9% 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.
@ Partial principal amount pledged as collateral for futures transactions.
@@ Entire principal amount pledged as collateral for futures transactions.

------------------------------------------------------------
KEY TO ABBREVIATIONS
ARM -- Adjustable Rate Mortgage.
CMO -- Collateralized Mortgage Obligation.
I -- Denotes a CMO with Interest only characteristics.
I/O -- Interest Only.
P/O -- Principal Only.
REMIC -- Real Estate Mortgage Investment Conduit.
------------------------------------------------------------

See Notes to Consolidated Financial Statements.

7
<PAGE>

- -------------------------------------------------------------------------------
THE BLACKROCK ADVANTAGE TERM TRUST INC.
CONSOLIDATED STATEMENT OF
ASSETS AND LIABILITIES
DECEMBER 31, 1998
- --------------------------------------------------------------------------------

ASSETS
Investments, at value
(cost $142,402,393) (Note 1) .............................. $155,825,920
Cash ........................................................ 53,356
Deposits with brokers as
collateral for investments sold short (Note 1) ............ 9,203,750
Interest receivable ......................................... 963,841
Unrealized appreciation on interest rate swaps
(Notes 1 and 3) ........................................... 81,656
------------
166,128,523
------------

LIABILITIES
Reverse repurchase agreements (Note 4) ...................... 50,051,460
Investment sold short, at value
(proceeds $8,711,446) (Note 1) ............................ 9,044,960
Call options written, at value (premium received
$147,000) (Notes 1 and 3) ................................. 532,896
Dividends payable ........................................... 495,344
Interest payable ............................................ 236,661
Accrued excise tax .......................................... 197,000
Investment advisory fee payable (Note 2) .................... 45,305
Administration fee payable (Note 2) ......................... 9,061
Due to broker-variation margin .............................. 6,593
Other accrued expenses ...................................... 271,588
------------
60,890,868
------------
NET ASSETS .................................................. $105,237,655
============
Net assets were comprised of:
Common stock, at par (Note 5) ............................. $ 95,107
Paid-in capital in excess of par .......................... 87,354,396
------------
87,449,503
Undistributed net investment income ....................... 4,490,520
Accumulated net realized gain ............................. 518,995
Net unrealized appreciation ............................... 12,778,637
------------
Net assets, December 31, 1998 ............................. $105,237,655
============

Net asset value per share:
($105,237,655 / 9,510,667 shares of
common stock issued and outstanding) ...................... $11.07
======

- --------------------------------------------------------------------------------
THE BLACKROCK ADVANTAGE TERM TRUST INC.
CONSOLIDATED STATEMENT
OF OPERATIONS
YEAR ENDED DECEMBER 31, 1998
- --------------------------------------------------------------------------------

NET INVESTMENT INCOME
Income
Interest earned (net of discount accretion
of $3,868,467 and net of interest expense
of $2,963,446) ........................................... $ 7,613,406
------------
Operating expenses
Investment advisory ........................................ 520,448
Administration ............................................. 104,089
Reports to shareholders .................................... 100,000
Custodian .................................................. 48,000
Audit ...................................................... 37,000
Transfer agent ............................................. 22,000
Directors .................................................. 22,000
Registration ............................................... 16,000
Miscellaneous .............................................. 79,936
------------
Total operating expenses ................................. 949,473
------------
Net investment income before excise tax ...................... 6,663,933
Excise tax ................................................. 197,000
------------
Net investment income ........................................ 6,466,933
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (NOTE 3)
Net realized gain (loss) on:
Investments ................................................ 3,257,608
Options written ............................................ (149,219)
Futures .................................................... (907,838)
Short sales ................................................ (138,516)
Interest rate swaps ........................................ 53,300
------------
2,115,335
------------

Net change in unrealized appreciation (depreciation) on:
Investments ................................................ 2,066,797
Options written ............................................ (385,896)
Futures .................................................... 205,269
Short sales ................................................ (206,744)
Interest rateswaps ......................................... 86,884
------------
1,766,310
------------
Net gain on investments ...................................... 3,881,645
------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS .................................. $10,348,578
===========

See Notes to Consolidated Financial Statements.

<PAGE>

- --------------------------------------------------------------------------------
THE BLACKROCK ADVANTAGE TERM TRUST INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 31, 1998
- --------------------------------------------------------------------------------

INCREASE (DECREASE) IN CASH
Cash flows provided by operating activities:
Interest received ........................................ $ 6,557,996
Operating expenses and excise taxes paid ................. (1,259,506)
Interest expense paid .................................... (2,847,182)
Purchases of short-term
portfolio investments, net ............................. (4,558,260)
Purchases of long-term portfolio investments ............. (16,740,398)
Proceeds from disposition of long-term
portfolio investments .................................. 23,675,694
Variation margin on futures .............................. (795,613)
------------
Net cash flows provided by operating
activities ............................................. 4,032,731
------------
Cash flows used for financing activities:
Increase in reverse repurchase agreements ................ 1,776,580
Cash dividends paid .................................... (5,943,827)
------------
Net cash flows used for financing activities ........... (4,167,247)
------------
Net decrease in cash ..................................... (134,516)
Cash at beginning of year ................................ 187,872
------------
Cash at end of year ...................................... $ 53,356
============

RECONCILIATION OF NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS TO NET CASH FLOWS
PROVIDED BY OPERATING ACTIVITIES
Net increase in net assets resulting
from operations .......................................... $ 10,348,578
------------
Increase in investments .................................... (3,481,197)
Net realized gain .......................................... (2,115,335)
Increase in unrealized appreciation ........................ (1,766,310)
Decrease in receivable for investments sold ................ 1,024,996
Increase in interest receivable ............................ (150,389)
Increase in deposits with brokers for
investments sold short ................................... (3,841,250)
Increase in unrealized appreciation of
interest rate swap ....................................... (86,884)
Decrease in due to broker-variation
margin ................................................... (93,044)
Increase in payable for investments sold short ............. 3,771,510
Increase in call option written ............................ 532,896
Decrease in interest payable ............................... 116,264
Decrease in payable for investments purchased .............. (114,071)
Increase in accrued expenses and other
liabilities .............................................. (113,033)
------------
Total adjustments ........................................ (6,315,847)
------------
Net cash flows provided by operating activities ............ $ 4,032,731
============

- --------------------------------------------------------------------------------
THE BLACKROCK ADVANTAGE TERM TRUST INC.
CONSOLIDATED STATEMENTS OF
CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------

YEAR ENDED DECEMBER 31,
1998 1997
------------- -----------
INCREASE IN NET ASSETS

Operations:

Net investment income ................ $6,466,933 $ 7,283,176

Net realized gain .................... 2,115,335 259,009

Net change in unrealized
appreciation ....................... 1,766,310 3,206,477
------------ ------------

Net increase in net assets
resulting from operations .......... 10,348,578 10,748,662

Dividends from net investment
income ............................. (5,943,827) (5,943,871)
------------ ------------
Total increase ..................... 4,404,751 4,804,791

NET ASSETS

Beginning of year ...................... 100,832,904 96,028,113
------------ ------------

End of year ............................ $105,237,655 $100,832,904
============ ============

See Notes to Consolidated Financial Statements.

<PAGE>

- --------------------------------------------------------------------------------
THE BLACKROCK ADVANTAGE TERM TRUST INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------------
1998 1997 1996 1995 1994
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of year $ 10.60 $ 10.10 $ 10.49 $ 9.00 $ 10.73
------- ------- ------- ------- -------
Net investment income (net of $0.28,
$0.26, $0.22, $0.47 and $0.25, respectively, 0.68 0.76 0.57 0.74
of interest expense) 0.53
Net realized and unrealized gain (loss) 0.41 0.36 (0.33) 1.42 (1.53)
------- ------- ------- ------- -------
Net increase (decrease) from investment
operations 1.09 1.12 0.24 2.16 (1.00)
------- ------- ------- ------- -------
Dividends from net investment income (0.62) (0.62) (0.63) (0.67) (0.73)
------- ------- ------- ------- -------
Net asset value, end of year* $ 11.07 $ 10.60 $ 10.10 $ 10.49 $ 9.00
======= ======= ======= ======= =======
Market value, end of year* $ 9.81 $ 9.38 $ 8.63 $ 8.63 $ 7.75
======= ======= ======= ======= =======
TOTAL INVESTMENT RETURN+ 11.03% 15.79% 7.30% 20.31% (22.16%)
======= ======= ======= ======= =======
RATIOS TO AVERAGE NET ASSETS:

OPERATING EXPENSES # 0.91% 0.88% 0.91% 1.00% 1.06%

Net investment income 6.23% 7.47% 5.80% 7.53% 5.38%
SUPPLEMENTAL DATA:

Average net assets (in thousands) $103,812 $ 97,493 $ 93,370 $ 93,044 $ 92,932
Portfolio turnover 11% 31% 76% 94% 142%
Net assets, end of year (in thousands) $105,238 $100,833 $ 96,028 $ 99,723 $ 85,567
Reverse repurchase agreements outstanding,
end of year (in thousands) $ 50,051 $ 48,275 $ 26,933 $ 48,581 $ 42,176
Asset coverage++ $ 3,103 $ 3,089 $ 4,565 $ 3,053 $ 3,029
</TABLE>
- ---------------
* Net asset value and market value are published in THE WALL STREET JOURNAL
each Monday.
# The ratios of operating expenses, including interest expense, to average
net assets were 3.52%, 3.39%, 3.06%, 5.86% and 3.59% for the years
indicated above, respectively. The ratios of operating expenses, including
interest expense and excise tax, to average net assets were 3.71%, 3.52%,
3.52%, 5.97%, and 3.66% for the years 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 the year reported. Dividends are assumed,
for purposes of this calculation, to be reinvested at prices obtained under
the Trust's dividend reinvestment plan. This calculation does not reflect
brokerage commissions.
++ Per $1,000 of reverse repurchase agreements outstanding.

The information above represents the audited 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 years 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 Consolidated Financial Statements.

<PAGE>

- --------------------------------------------------------------------------------
THE BLACKROCK ADVANTAGE TERM TRUST INC.
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

NOTE 1. ORGANIZATION & The BlackRock Advantage ACCOUNTING Term Trust Inc.
POLICIES a Maryland corporation, is a (the "Trust"),
diversified, closed-end management investment
company. The Trust's investment objective is
to manage a portfolio of investment grade fixed income securities that will
return $10 per share to investors on or shortly before December 31, 2005 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.

On October 31, 1998, the Trust transferred a substantial portion of its total
assets to a 100% owned regulated investment company subsidiary called BAT
Subsidiary, Inc.These consolidated financial statements include the operations
of both the Trust and its wholly-owned subsidiary after eliminattion of all
intercompany transactions and balances.

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 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 between securities,
observed in the market 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 commence 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 cost of the purchase or proceeds from the sale 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 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

<PAGE>

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 anytime or at a specified time during the
option period. A put option gives the holder the right to sell and obligates the
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 a simple 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. 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.

FINANCIAL FUTURES CONTRACTS: A futures contract is an agreement between two
parties to buy and 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 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 contracts 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 payments 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.

<PAGE>

SECURITIES 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. The Trust did not engage in
securities lending during the year ended December 31,1998.

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 and 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 taxable income to shareholders. Therefore, no
federal income tax provision is required. As part of its tax planning strategy,
the Trust intends to 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 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.

RECLASSIFICATION OF CAPITAL ACCOUNTS: The Trust accounts for and reports
distributions to shareholders in accordance with the American Institute of
Certified Public Accountants' Statements of Position 93-2: Determination,
Disclosure, and Financial Statement Presentation of Income, Capital Gain, and
Return of Capital Distributions by Investment Companies. The effect caused by
applying this statement was to decrease paid-in capital and increase
undistributed net investment income by $197,000 due to certain expenses not
being deductible for tax purposes. Net investment income, net realized gains and
net assets were not affected by this change.

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 0.50% 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 Trust's average weekly net assets
through December 31, 2000 and 0.08% from January 1, 2001 to the termination or
liquidation of the Trust.

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 Purchases and sales of investment securities, other
SECURITIES than short-term investments and dollar rolls,
for the year ended December 31, 1998 aggregated $16,626,327 and $110,628,022,
respectively.

The Trust may invest up to 85% 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 December 31, 1998, the Trust
held 10.9% of its portfolio assets in restricted 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 affi-

<PAGE>

liates, 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 December 31, 1998
was $142,421,665 and, accordingly, net unrealized appreciation for federal
income tax purposes was $13,404,255 (gross unrealized appreciation--$15,079,907;
gross unrealized depreciation--$1,675,652).

For federal income tax purposes, the Trust had a capital loss carryforward at
December 31, 1998 of approximately $2,735,000 (after utilization of
approximately $1,000,000), of which $2,519,000 expires in 2004 and $216,000
expires in 2005. 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 financial futures contracts at December 31, 1998 are as
follows:

VALUE AT VALUE AT UNREALIZED
NUMBER OF EXPIRATION TRADE DECEMBER 31, APPRECIATION
CONTRACTS TYPE DATE DATE 1998 (DEPRECIATION)
- --------- ---- ---------- -------- ------------ --------------
Long Position:
110 30-yr. T-bond Mar 1999 $14,340,026 $14,055,937 $(284,089)
Short Position:
(229) 10-yr. T-note Mar 1999 27,563,734 27,286,781 276,953
---------
$ (7,136)
=========

Details of open interest rate swaps at December 31, 1998 are as follows:

NOTIONAL FIXED/ UNREALIZED
AMOUNT FLOATING FLOATING TERMINATION APPRECIATION
(000) TYPE RATE RATE DATE (DEPRECIATION)
- -------- ----- ------- ---------- ------------ --------------
$36,375 Interest Rate 6.365% 3 Mo. LIBOR 7/27/00 $1,322,846
5,000 Floating Rate 3 Mo. T-Bill 3 Mo. LIBOR 9/10/03 (24,000)
+80.25 bps
5,000 Floating Rate 3 Mo. T-Bill 3 Mo. LIBOR 9/10/03 (19,166)
+81.75 bps
(25,000) Interest Rate 6.421% 3 Mo. LIBOR 7/27/01 (1,198,024)
----------
$ 81,656
==========

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 year ended December 31, 1998 was approximately $47,580,228 at a weighted
average interest rate of approximately 5.55%. The maximum amount of reverse
repurchase agreements outstanding at any month-end during the year ended
December 31, 1998 was $51,572,672 as of October 31, 1998 which was 32.59% 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 did not enter into dollar rolls during the
year ended December 31, 1998.

NOTE 5. CAPITAL There are 20 0 million
shares of $.01 par value
common stock authorized. Of the 9,510,667 shares outstanding at December 31,
1998, the Adviser owned 10,667 shares.

<PAGE>

- --------------------------------------------------------------------------------
THE BLACKROCK ADVANTAGE TERM TRUST INC.
REPORT OF INDEPENDENT AUDITORS
- --------------------------------------------------------------------------------

The Shareholders and Board of Directors of
The BlackRock Advantage Term Trust Inc.:

We have audited the accompanying consolidated statement of assets and
liabilities of The BlackRock Advantage Term Trust Inc., including the
consolidated portfolio of investments, as of December 31, 1998, and the related
consolidated statements of operations and of consolidated cash flows for the
year then ended, the consolidated statement of changes in net assets for each of
the two years in the period then ended and the consolidated financial highlights
for each of the five years in the period then ended. These consolidated
financial statements and consolidated financial highlights are the
responsibility of the Trust's management. Our responsibility is to express an
opinion on these consolidated financial statements and consolidated financial
highlights based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements and
consolidated financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the consolidated financial statements. Our procedures included
confirmation of securities owned at December 31, 1998, by correspondence with
the custodian and brokers; where replies were not received from brokers, we
performed other auditing procedures. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall consolidated financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements and consolidated
financial highlights present fairly, in all material respects, the consolidated
financial position of The BlackRock Advantage Term Trust Inc. as of December 31,
1998, and the results of its consolidated operations, its consolidated cash
flows, the changes in its consolidated net assets and the consolidated financial
highlights for the respective stated periods in conformity with generally
accepted accounting principles.

/s/ Deloitte & Touche LLP
- -------------------------

Deloitte & Touche LLP
New York, New York
February 12, 1999

<PAGE>

- --------------------------------------------------------------------------------
THE BLACKROCK ADVANTAGE TERM TRUST INC.
TAX INFORMATION
- --------------------------------------------------------------------------------

We wish to advise you as to the federal tax status of dividends and
distributions paid by the Trust during its fiscal year ended December 31, 1998.

During the fiscal year ended December 31, 1998, the Trust paid aggregate
dividends of $0.6250 per share from net investment income. For federal income
tax purposes, the aggregate of any dividends from net investment income and
short-term capital gains distributions you received are reportable in your 1998
federal income tax return as ordinary income. Further, we wish to advise you
that your income dividends do not qualify for the dividends received deduction.

For the purpose of preparing your 1998 annual federal income tax return,
however, you should report the amounts as reflected on the appropriate Form 1099
DIV which will be mailed to you in January 1999.

- -------------------------------------------------------------------------------
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 under the Plan below net asset value.

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 fee 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 ADVANTAGE TERM TRUST INC.
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 intends to communicate 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, however, the Adviser has not 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.

<PAGE>

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

THE TRUST'S INVESTMENT OBJECTIVE

The BlackRock Advantage 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, 2005 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 $132
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 $24 billion family of open-end equity and bond funds.
Current institutional clients number 425, 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 Trust 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 2005. 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 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 advisor 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 rate
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 affect 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 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 ADVANTAGE 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 dividends
and distributions of 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 Administration, 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
U.S. 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.

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).

<PAGE>

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

INTEREST-ONLY SECURITIES (I/O): 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
MULTIPLE-CLASS PASS-THROUGHS: Mae, Freddie Mac or Ginnie Mae.
NET ASSET VALUE (NAV): Collateralized Mortgage Obligations. 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
and THE WALL STREET JOURNAL on Monday.

PRINCIPAL-ONLY SECURITIES (P/O): Mortgage securities that receive only the
principal cash flows from an underlying pool
of mortgage loans or underlying pass-through
securities. Also known as a strip.

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

STRIP MORTGAGE-BACKED Arrangements in which a pool of assets is
SECURITIES: 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
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
STOCK MATURITY
PERPETUAL TRUSTS SYMBOL DATE
---------- ------
<S> <C> <C>
The BlackRock High Yield Trust Inc. BHY N/A
The BlackRock Income Trust Inc. BKT N/A
The BlackRock North American Government Income Trust Inc. BNA 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

TAX-EXEMPT TRUSTS
- -------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
STOCK MATURITY
PERPETUAL TRUSTS SYMBOL DATE
---------- ------
<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.

<PAGE>

- --------------------------------------------------------------------------------
BLACKROCK FINANCIAL MANAGEMENT, INC.
AN OVERVIEW
- --------------------------------------------------------------------------------

BlackRock Financial Management, Inc. ("BlackRock") is an SEC-registered
investment adviser. BlackRock and its affiliates currently manage over $132
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. BlackRock manages twenty-one closed-end funds that are
traded on either the New York or American stock exchanges, and a $24 billion
family of open-end equity and bond funds. Current institutional clients number
425, domiciled in the United States and overseas.

BlackRock's fixed income product was introduced in 1988 by a team of
highly seasoned fixed income professionals. These professionals had extensive
experience creating, analyzing and trading a variety of fixed income
instruments, including the most complex structured securities. In fact, several
individuals at BlackRock were responsible for developing many of the major
innovations in the mortgage-backed and asset-backed securities markets,
including the creation of the first CMO, the floating rate CMO, the
senior/subordinated pass-through and the multi-class asset-backed security.

BlackRock is unique among asset management and advisory firms in the
emphasis it places on the development of proprietary analytical capabilities.
Over one quarter of the firm's professionals is dedicated to the design,
maintenance and use of these systems, which are not otherwise available to
investors. BlackRock's proprietary analytical tools are used for evaluating, and
designing fixed income investment strategies for client portfolios. Securities
purchased include mortgages, corporate bonds, municipal bonds and a variety of
hedging instruments.

BlackRock has developed investment products that respond to investors'
needs and has been responsible for several major innovations in closed-end
funds. In fact, BlackRock introduced the first closed-end mortgage fund, the
first taxable and tax-exempt closed-end funds to offer a finite term, the first
closed-end fund to achieve a AAA rating by Standard & Poor's, and the first
closed-end fund to invest primarily in North American Government securities.
Currently, BlackRock's closed-end funds have dividend reinvestment plans, which
are designed to provide ongoing demand for the stock in the secondary market.
BlackRock manages a wide range of investment vehicles, each having specific
investment objectives and policies.

In view of our continued desire to provide a high level of service to all
our shareholders, BlackRock maintains a toll-free number for your questions. The
number is (800) 227-7BFM (7236). We encourage you to call us with any questions
that you may have about your BlackRock funds and we thank you for the continued
trust that you place in our abilities.

If you would like further information
please do not hesitate to call BlackRock at (800) 227-7BFM

<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

This report is for shareholder information.
This is not a prospectus intended for use
in the purchase or sale of any securities.

C/O PRUDENTIAL INVESTMENTS FUND MANAGEMENT LLC
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
(800) 227-7BFM

THE BLACKROCK
ADVANTAGE
TERM TRUST INC.
==========================
CONSOLIDATED
ANNUAL REPORT
DECEMBER 31, 1998

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