--------------------------------------------------------------------------------
THE BLACKROCK MUNICIPAL TARGET TERM TRUST INC.
SEMI-ANNUAL REPORT TO SHAREHOLDERS
REPORT OF INVESTMENT ADVISER
--------------------------------------------------------------------------------
July 14, 1995
Dear Shareholder:
The fixed income markets benefitted from extremely bullish sentiment and
rallied during the semi-annual period between January 1, 1995 and June 30, 1995.
The U.S. economy appears to have responded to the Fed's vigilance toward
inflation with low absolute levels of inflation and moderate rates of growth.
This scenario is suggestive of a "soft landing" for the economy, which has
sparked a significant Treasury market rally and resulted in overall strength in
most fixed income markets. Closed-end bond funds responded to the broader
markets by staging a significant rebound during the first six months of 1995
from their all-time low stock prices during the fourth quarter of 1994.
BlackRock Financial Management, Inc. your Trust's investment adviser, is
pleased to report that its acquisition by PNC Bank, N.A. ("PNC") was officially
completed on February 28, 1995. PNC is a commercial bank whose principal office
is in Pittsburgh, Pennsylvania and is wholly-owned by PNC Bank Corp., a bank
holding company. The merger was structured to assure continuity of performance
and service through stability of our organization. BlackRock retains its name
and continues to operate out of its New York office. All members of BlackRock's
management team have signed long-term employment contracts and will continue to
be responsible for managing BlackRock's business so that shareholders will
notice no changes in the management of the Trust.
You will note several enhancements to the Trust's semi-annual report
designed to improve the report's usefulness to you. The letter to shareholders
which reviews the markets and the Trust's investment strategy over the
semi-annual period is provided by the Trust's portfolio managers. In addition,
we have included an investment summary section which provides a synopsis of the
Trust's investment objectives and guidelines and reviews its investment
strategy. We appreciate your investment in The BlackRock Municipal Target Term
Trust Inc. and look forward to continuing to serve your financial needs.
Sincerely,
Laurence D. Fink Ralph L. Schlosstein
Chairman President
1
<PAGE>
July 14, 1995
Dear Shareholder,
We are pleased to present the semi-annual report for The BlackRock Municipal
Target Term Trust Inc. ("BMN" or the "Trust") for the period ended June 30,
1995. The past six months have witnessed a tremendous turnaround from the poor
performance of fixed income markets during 1994. At December 31, 1994, the Trust
was trading at a stock price of $8.875, but had risen to $10.00 as of June 30,
1995. The net asset value of the fund has responded to the rally in the
municipal markets and has increased since the start of the year from $9.98 to
$10.79 at the end of the second quarter.
As of the date of this letter, the Trust had a stock price of $10.0625 per
share, and was trading at an 7.94% discount to its net asset value of $10.93 per
share. This discount reflects the weakness in stock prices of closed-end
municipal bond funds, with more than 90% of such funds currently trading at
discounts to net asset value according to Lipper Analytical Services, Inc. The
Trust's current monthly dividend per share is $0.05125, which is equivalent to
an annualized yield of 6.11% on the current stock price and a taxable equivalent
yield of 10.12% based on a Federal 39.6% tax bracket.
The Trust's dividend has remained unchanged since its inception in September
1991 despite the extreme volatility of the fixed income markets. In addition,
the Trust remains on track to achieve its primary objective to return $10 per
share to investors on or about December 31, 2006.
The following summary provides a review of the fixed income markets over the
past six months as well as the trading activity in the Trust's portfolio that
has taken place since our last Shareholder's Report. This information should
provide you with a greater understanding of the types of active management
strategies we employ at BlackRock.
The Fixed Income Markets
In sharp contrast to 1994, the fixed income markets have rallied
substantially year-to-date, largely the result of a general comfort level with
the rate of inflation. In fact, the Federal Reserve recently eased its monetary
policy, modestly lowering the Federal funds target rate by 25 basis points (or
0.25%) to 5.75% on July 7, after one and a half years of exercising tighter
monetary control through seven consecutive interest rate increases. The move
comes as a response to successive weak economic reports on unemployment and
manufacturing inventories which imply a slow rate of growth in the economy and
the Federal Reserve's concern over a possible recession.
The municipal market showed strong performance for the first two quarters of
1995, but remained overshadowed by the rally in the Treasury market. From
December 31, 1994 to March 31, 1995, yields across maturities of AAA general
obligation bonds fell over 63 basis points. However, during the second quarter
the AAA muni curve steepened as short and intermediate term municipal securities
rallied and the yield on 30 year AAA municipal bonds remained virtually
unchanged, despite an 81 basis point fall in the Treasury long bond.
The demand for shorter paper stems principally from current concerns about
tax reform proposals, particularly the creation of a "flat tax." Some versions
of this proposal would eliminate the taxation of all investment income, which
would eliminate the current tax benefits of municipal bonds versus Treasuries
and other taxable investments. This could result in the underperformance of the
municipal market if the flat tax becomes a pivotal 1996 Presidential campaign
issue. While actual tax reform is at best two years away, we will continue to
actively follow the situation because investor concerns about tax reform could
cause dislocations in the municipal market, creating possible buying
opportunities for the Trust. At the close of the second quarter, the municipal
market had priced in a 20-21% flat tax rate on investment income. BlackRock
believes that the flat tax reform will not pass in its current form of
pre-election year rhetoric, but also believes it is essential to be aware of its
effects upon the trading environment for municipal securities.
2
<PAGE>
The municipal market had anticipated benefits from seasonal summer demand of
approximately $65 billion in coupon payments and redemptions in June and July
looking for reinvestment, but this demand did not fully materialize as the
rallying stock market drew the attention of retail investors. Supply was very
low, as new issuance of municipal debt is expected to be 35% lower than last
year. The fears of tax reform outweigh these factors as municipal securities
currently trade relatively cheap to their taxable counterparts.
The Trust's Portfolio and Investment Strategy
The Trust invests in a portfolio of high credit quality (AAA) tax-exempt
general obligation and revenue bonds. The securities in the portfolio are
insured as to timely payment of interest and principal, and currently none are
subject to the Alternative Minimum Tax (AMT). BlackRock has managed the Trust's
portfolio to selectively modify its allocation to certain sectors, issuers,
revenue sources, and types of bonds.
The following chart illustrates the changes in the sector allocation of the
portfolio since the end of the last fiscal period.
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The BlackRock Municipal Target Term Trust Inc.
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Sector June 30, 1995 December 31, 1994
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City, County and State 25% 22%
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Tax Revenue 16% 19%
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Hospital 15% 15%
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Transportation 10% 14%
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Water & Sewer 9% 9%
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Lease Revenue 7% 7%
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Utility 7% 6%
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Education 5% 3%
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Building 4% 2%
--------------------------------------------------------------------------------
Other 2% 3%
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Consistent with the Trust's objective to return $10 on or about December 31,
2006, the Trust's portfolio consists of securities with average maturities of
approximately 11 years and ratings of "AAA" by Standard & Poor's Corporation or
Moody's Investors Services or securities that are insured by a municipal bond
insurance company whose long-term obligations are rated "AAA." In addition, the
Trust is rated AAAf by Standard & Poor's.
To enhance income, the Trust utilizes leverage through the issuance of
preferred stock, through which we can borrow at short-term tax-exempt rates and
earn the difference between that cost of borrowing and the yield on longer-term
assets purchased with those borrowings. The degree to which the Trust can
benefit from its use of leverage affects the ability of the Trust to pay high
monthly income and, as a result, sustained large increases in short-term rates
would negatively impact the amount of income that the Trust can derive from its
use of leverage. We will keep you informed of the effects, if any, on the
Trust's dividend paying abilities over time.
3
<PAGE>
We thank you for your investment in The BlackRock Municipal Target Term
Trust Inc. Please feel free to contact us at (800) 227-7BFM (7236) if you have
specific questions which were not addressed in this report.
Robert S. Kapito Kevin Klingert
Vice Chairman and Portfolio Manager Principal and Municipal Portfolio Manager
BlackRock Financial Management, Inc. BlackRock Financial Management, Inc.
--------------------------------------------------------------------------------
The BlackRock Municipal Target Term Trust Inc.
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Symbol on New York Stock Exchange: BMN
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Initial Offering Date: September 27, 1991
--------------------------------------------------------------------------------
Closing Stock Price as of 6/30/95: $10.00
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Net Asset Value as of 6/30/95: $10.79
--------------------------------------------------------------------------------
Yield on Closing Stock Price as of 6/30/95 ($10.00)1: 6.15%
--------------------------------------------------------------------------------
Current Monthly Distribution per Common Share:2 $0.05125
--------------------------------------------------------------------------------
Current Annualized Distribution per Common Share:2 $0.615
--------------------------------------------------------------------------------
-----------
1Yield on Closing Stock Price is calculated by dividing the current annualized
distribution per share by the closing stock price per share.
2Distribution is not constant and is subject to change.
4
<PAGE>
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The BlackRock Municipal Target Term Trust Inc.
Portfolio of Investments
June 30, 1995
(Unaudited)
--------------------------------------------------------------------------------
Principal
Amount Value
Rating** (000) Description (Note 1)
--------------------------------------------------------------------------------
LONG-TERM INVESTMENTS-144.6%
Alabama-1.0%
Hoover Brd. of Ed. Spl. Tax. Wts., G.O., AMBAC,
AAA $ 1,700 6.50%, 2/01/01\d .............................. $ 1,874,046
AAA 1,815 6.60%, 2/01/01\d .............................. 2,009,659
AAA 1,025 6.625%, 2/01/01\d ............................. 1,136,161
------------
5,019,866
------------
Alaska-3.9%
AAA 7,500 Anchorage Elec. Util. Rev., 7.125%,
6/01/06, MBIA ................................. 8,139,675
AAA 4,845 Fairbanks Mun. Util. Auth. Rev., Ser. A,
7.10%, 1/01/05, AMBAC ......................... 5,284,296
AAA 9,000 No. Slope Boro., Ser. B, Zero Coupon,
6/30/04, CGIC ................................. 5,450,850
------------
18,874,821
------------
Arizona-1.1%
AAA 5,010 Tucson Bus. Dev. Fin. Corp. Lease Rev.,
6.25%, 7/01/06, FGIC .......................... 5,369,568
------------
California-4.5%
AAA 6,000 California St., G.O., 6.30%, 9/01/06, AMBAC ..... 6,479,400
AAA 1,910 California St. Pub. Wrks. Rev., Ser. A, 6.20%,
12/01/06, AMBAC ............................... 2,034,647
AAA 4,000 Glendale Hosp. Rev., Adventist Hlth. Ctr.,
Ser. A, 6.50%, 3/01/07, MBIA .................. 4,254,920
Los Angeles Wst. Wtr. Sys. Rev., MBIA,
AAA 5,570 5.625%, 6/01/07 ............................... 5,626,591
AAA 3,320 Ser. D, 6.60%, 12/01/06 ....................... 3,566,012
------------
21,961,570
------------
Colorado-2.0%
Denver City & Cnty. Wtr. Brd. Rev., C.O.P., FGIC,
AAA 3,410 6.50%, 11/15/05 ............................... 3,658,828
AAA 1,875 6.60%, 11/15/06 ............................... 2,036,737
AAA 3,865 6.625%, 11/15/07 .............................. 4,181,698
------------
9,877,263
------------
Connecticut-1.4%
AAA 7,000 Connecticut St., G.O., Ser. A, 5.40%,
3/15/06, MBIA ................................. 7,067,830
------------
District of Columbia-1.7%
AAA 8,250 District of Columbia, G.O., Ser. B, 5.90%,
6/01/06, MBIA ................................. 8,395,695
------------
See Notes to Financial Statements.
5
<PAGE>
--------------------------------------------------------------------------------
Principal
Amount Value
Rating** (000) Description (Note 1)
--------------------------------------------------------------------------------
Florida-13.3%
Florida St. Div. Bd. Fin. Dept. Gen. Svcs. Rev.
(Dept. Nat. Res. & Pres.),
AAA $ 7,000 6.45%, 7/01/07, MBIA .......................... $ 7,464,240
AAA 6,975 6.75%, 7/01/07, AMBAC ......................... 7,636,579
AAA 2,190 Florida St. Sunshine Skyway Rev., 6.60%,
7/01/07, MBIA ................................. 2,354,272
Greater Orlando Aviation Auth., Arpt. Facs.
Rev., Ser. B, FGIC,
AAA 4,760 6.55%, 10/01/06 ............................... 5,200,205
AAA 5,070 6.55%, 10/01/07 ............................... 5,506,780
AAA 3,155 Gulf Breeze, Local Gov't., Ln. Pkg. Rev., 7.70%,
12/01/15, FGIC ................................ 3,455,356
AAA 2,650 Jacksonville Hlth. Facs. Auth. Rev., Mem. Med.
Ctr., Ser. A, 6.625%, 11/01/01\d, MBIA ....... 2,958,009
AAA 7,500 Jacksonville Hosp. Rev., Univ. Med. Ctr. Inc.
Proj., 6.50%, 2/01/07, CONNIE LEE ............. 8,028,600
AAA 4,000 Kissimmee Util. Auth. Rev., Elec. Sply.,
6.70%, 10/01/07, MBIA ......................... 4,240,960
AAA 2,000 No. Broward Hosp. Rev., 6.50%, 1/01/07, MBIA .... 2,151,000
AAA 10,645 Orange Cnty., Tourist Dev. Tax Rev., Ser. A,
6.375%, 10/01/06, AMBAC ....................... 11,491,384
AAA 2,570 Tampa Auth. Rev., 6.70%, 12/01/07, MBIA ......... 2,794,387
AAA 1,600 Tampa Util. Tax & Spec. Rev., 6.80%,
10/01/06, AMBAC ............................... 1,755,552
------------
65,037,324
------------
Georgia-0.4%
AAA 1,990 Burke Cnty. Dev. Auth. Poll. Ctrl. Rev.,
Oglethorpe Pwr. Corp., Ser. B, 6.45%,
1/01/05, MBIA ................................. 2,139,131
------------
Hawaii-0.1%
AAA 500 Honolulu City & Cnty., G.O., Ser. B, 5.10%,
6/01/00, FGIC ................................. 510,210
------------
Illinois-15.6%
AAA 4,930 Alton Hlth. Facs. Rev., Christian Hlth.
Ctr., 7.00%, 2/15/01\d, FGIC .................. 5,557,638
AAA 5,000 Chicago, G.O., Ser. A, 7.25%, 1/01/06, MBIA ..... 5,229,750
Chicago Cent. Pub. Library, G.O., AMBAC,
AAA 1,800 Ser. A, 6.75%, 1/01/07 ........................ 1,963,062
AAA 1,600 Ser. C, 6.75%, 1/01/07 ........................ 1,744,944
AAA 5,555 Cook Cnty., Ser. A, 6.40%, 11/15/06, MBIA ....... 5,925,296
AAA 1,775 Cook Cnty. Cmnty. Sch. Dist., G.O., Ser. A,
6.375%, 1/01/07, FGIC ......................... 1,859,934
Illinois Hlth. Facs. Auth. Rev.,
AAA 3,300 Elmhurst Mem. Hosp., 6.60%, 1/01/07, FGIC ..... 3,515,094
AAA 14,585 Sisters Svcs., Inc., Ser. C, 6.625%,
6/01/06, MBIA ................................. 15,700,899
Illinois Regl. Trans. Auth. Rev., Ser. A, FGIC,
AAA 2,780 6.55%, 11/01/06 ............................... 2,981,328
AAA 6,125 6.625%, 11/01/08 .............................. 6,512,896
See Notes to Financial Statements.
6
<PAGE>
--------------------------------------------------------------------------------
Principal
Amount Value
Rating** (000) Description (Note 1)
--------------------------------------------------------------------------------
Illinois (cont'd)
AAA $ 8,725 Illinois St. G.O., 6.40%, 12/15/07, AMBAC ....... $ 9,195,888
Illinois St. Sales Tax Rev., Ser. O,
AAA 5,900 Zero Coupon, 6/15/07 .......................... 2,936,666
AAA 5,635 Zero Coupon, 6/15/08 .......................... 2,609,456
AAA 6,000 6.50%, 6/15/06 ................................ 6,390,240
AAA 2,000 6.60%, 6/15/08 ................................ 2,115,120
AAA 2,000 Will Cnty. Cmnty. Unit Sch. Dist. Rev., 7.05%,
12/01/08, AMBAC ............................... 2,268,940
------------
76,507,151
------------
Indiana-2.6%
AAA 9,000 Indiana Univ. Rev., Student Fee, Zero Coupon,
8/01/06, AMBAC ................................ 4,769,730
AAA 2,270 Noblesville West Indpt. Sch. Bldg. Corp.,
G.O., 7.00%, 7/01/07, MBIA .................... 2,490,758
AAA 5,000 Warsaw High Sch. Bldg. Corp., G.O., 6.90%,
7/01/05, MBIA ................................. 5,452,300
------------
12,712,788
------------
Iowa-0.8%
AAA 7,990 Spirit Lake Indl. Dev. Auth., G.O., Zero Coupon,
6/01/08 D1 .................................... 3,889,273
------------
Kentucky-3.2%
Danville Multi-City Lease Rev., Swr. & Drain
Sys., MBIA,
AAA 2,015 6.60%, 3/01/02 D1 ............................. 2,246,644
AAA 2,160 6.65%, 3/01/02 D1 ............................. 2,414,426
AAA 3,750 Kentucky Dev. Fin. Auth. Rev., Sisters of Charity,
6.60%, 11/01/06, MBIA ......................... 4,077,825
AAA 6,410 Kentucky St. Ppty. & Bldgs. Auth. Rev., Proj. 53,
6.625%, 10/01/07, MBIA ........................ 6,984,721
------------
15,723,616
------------
Louisiana-6.9%
Jefferson Sales Tax Dist. Rev., FGIC,
AAA 21,000 Ser. A, 6.75%, 12/01/06 ....................... 22,860,600
AAA 4,000 Ser. B, 6.75%, 12/01/06 ....................... 4,354,400
AAA 3,500 Louisiana St., G.O., Ser. A, 6.50%, 5/01/07,
AMBAC ......................................... 3,747,275
AAA 5,250 New Orleans, G.O., Zero Coupon, Ref. 9/01/06,
AMBAC ......................................... 2,787,172
------------
33,749,447
------------
Massachusetts-5.4%
AAA 3,670 Mansfield, G.O., 6.65%, 1/15/07, AMBAC .......... 3,982,353
AAA 20,015 Massachusetts Bay Trans. Auth. Rev., Gen. Tran.
Sys., Ser. A, MBIA,
6.625%, 3/01/02 D1 ............................ 22,208,244
------------
26,190,597
------------
See Notes to Financial Statements.
7
<PAGE>
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Principal
Amount Value
Rating** (000) Description (Note 1)
--------------------------------------------------------------------------------
Michigan-10.2%
Detroit Swr. Disp. Rev., FGIC,
AAA $ 1,655 6.60%, 7/01/05 ................................ $ 1,791,240
AAA 1,765 6.65%, 7/01/06 ................................ 1,914,813
AAA 1,880 6.70%, 7/01/07 ................................ 2,033,728
AAA 3,750 Grand Rapids Wtr. Sply. Rev., 6.625%, 1/01/08,
FGIC .......................................... 3,989,963
Lake Orion Cmnty. Sch. Dist., AMBAC,
AAA 1,000 7.00%, 5/01/15 ................................ 1,155,720
AAA 4,000 7.00%, 5/01/20 ................................ 4,622,880
Michigan Mun. Bond Auth.,
AAA 5,000 G.O., Ser. D, Zero Coupon, 5/15/06, MBIA ...... 2,699,150
AAA 1,840 Local Gov't. Loan Prog., 6.35%, 11/01/06, AMBAC 1,991,450
Michigan St. Bldg. Auth. Rev.,
AAA 11,590 Ser. I, 6.75%, 10/01/07, MBIA ................. 12,588,942
AAA 3,850 Ser. II, 6.75%, 10/01/07, AMBAC ............... 4,181,831
AAA 11,940 Michigan St. Hosp. Fin. Auth. Rev., Sparrow
Oblig. Grp., 6.60%,
11/15/07, MBIA ................................ 12,744,995
------------
49,714,712
------------
Nevada-5.4%
AAA 6,210 Clark Cnty. Flood Ctrl., G.O., 6.40%, 11/01/06,
AMBAC ......................................... 6,572,974
Clark Cnty. Sch. Dist., G.O., Ser. A, MBIA,
AAA 11,000 6.70%, 3/01/06 ................................ 11,787,270
AAA 1,500 6.75%, 3/01/07 1,612,545
AAA 2,835 Nye Cnty. Sch. Dist., G.O., 7.25%, 5/01/99 D1,
BIG ........................................... 3,156,518
AAA 3,250 Reno Hosp. Auth. Rev., St. Mary Regl. Med. Ctr.,
6.70%, 7/01/06, MBIA .......................... 3,523,617
------------
26,652,924
------------
New Hampshire-0.5%
AAA 2,310 New Hampshire High. Ed. Auth. Rev., Elliot Hosp.
of Manchester,
6.70%, 10/01/06, AMBAC ........................ 2,542,848
------------
New Jersey-16.3%
AAA 10,500 Elizabeth, G.O., 6.60%, 8/01/06, MBIA ........... 11,469,255
Howell Twp., Ref. G.O., FGIC,
AAA 7,715 6.70%, 1/01/06 ................................ 8,490,898
AAA 2,925 6.75%, 1/01/07 ................................ 3,217,822
New Jersey St. Hlth. Care Facs. Fin. Auth. Rev.,
Hackensack Med. Ctr., FGIC,
AAA 12,755 6.65%, 7/01/06 ................................ 13,837,644
AAA 3,735 6.70%, 7/01/07 ................................ 4,065,547
See Notes to Financial Statements.
8
<PAGE>
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Principal
Amount Value
Rating** (000) Description (Note 1)
--------------------------------------------------------------------------------
New Jersey (cont'd)
AAA $ 1,765 New Jersey St. Hwy. Auth. Rev., Garden St.
Pkwy., 6.15%, 1/01/07, AMBAC ................. $ 1,851,856
AAA 30,000 New Jersey St. Tpk. Auth. Rev., Ser. C,
6.40%, 1/01/07, AMBAC ........................ 31,865,400
No. Jersey Dist. Wtr. Sply. Cmnty. Rev., MBIA,
AAA 2,525 Wanaque No. Proj., Ser. B, 6.50%, 11/15/06 ... 2,740,281
AAA 1,065 Wanaque So. Proj., 6.50%, 7/01/06 ............ 1,110,912
AAA 1,250 Warren Cnty. Poll. Ctrl. Fin. Auth. Rev.,
6.55%, 12/01/06, MBIA ........................ 1,373,875
------------
80,023,490
------------
New Mexico-0.8%
AAA 3,535 Gallup Poll. Ctrl. Rev., 6.50%, 8/15/07, MBIA .. 3,834,662
------------
New York-11.9%
Mun. Asst. Corp. Rev.,
AAA 5,000 Ser. 57, 7.00%, 7/01/06, AMBAC ............... 5,221,700
AAA 6,500 Ser. 61, 6.875%, 7/01/07, AMBAC .............. 6,874,335
AAA 3,500 Ser. 61, 6.875%, 7/01/07, FGIC ............... 3,704,365
AAA 3,500 Ser. 62, 6.90%, 7/01/07, AMBAC ............... 3,703,245
AAA 10,000 New York City, G.O., Ser. E, 6.125%, 8/01/06,
MBIA ......................................... 10,624,000
New York City Mun. Wtr. Fin. Auth. Rev., Wtr. &
Swr. Sys., Ser. A, FGIC,
AAA 11,100 6.15%, 6/15/07 ............................... 11,548,884
AAA 2,160 6.75%, 6/15/06 ............................... 2,330,575
AAA 2,660 7.00%, 6/15/07 ............................... 2,909,375
AAA 4,500 New York St. Environ. Facs. Corp., Poll. Ctrl.
Rev., Ser. D, 6.40%, 5/15/06 ................. 4,893,165
AAA 6,000 Triborough Brdg. & Tunl. Auth. Rev., Ser. B,
6.70%, 1/01/08, FGIC ......................... 6,483,540
------------
58,293,184
------------
North Dakota-0.4%
AAA 2,035 Grand Forks Hlth. Care Facs. Rev., United Hosp.
Oblig. Grp.,
6.50%, 12/01/06, MBIA ........................ 2,181,622
------------
Pennsylvania-10.5%
AAA 6,200 Beaver Cnty. Hosp. Auth., 6.625%, 7/01/06,
AMBAC ........................................ 6,734,750
AAA 1,500 Coatesville Sch. Dist., G.O., 6.60%, 3/01/01 D1,
AMBAC ........................................ 1,639,470
AAA 10,000 Harrisburg Auth. Lease Rev., 6.625%, 6/01/01 D1,
CGIC ......................................... 10,871,400
AAA 7,450 Pennsylvania St., G.O., Ser. A, 6.50%, 11/01/07,
FGIC ......................................... 7,930,749
AAA 1,445 Pennsylvania St. Higher Ed. Rev., 6.75%,
7/01/07, MBIA ................................ 1,570,325
AAA 4,500 Pennsylvania St. Tpk. Auth. Rev., Ser. O, 5.80%,
12/01/07, FGIC ............................... 4,601,295
Philadelphia Mun. Auth., Justice Lease Rev.,
AAA 1,550 Ser. A, 7.00%, 11/15/04 D1, MBIA ............. 1,734,512
AAA 2,370 Ser. B, 7.10%, 11/15/01 D1, FGIC ............. 2,713,863
Pittsburgh & Allegheny Cntys. Rev., AMBAC,
AAA 1,015 Ser. A, 6.50%, 7/15/06 ....................... 1,075,646
AAA 900 Ser. B, 6.50%, 7/15/06 ....................... 953,775
See Notes to Financial Statements.
9
<PAGE>
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Principal
Amount Value
Rating** (000) Description (Note 1)
--------------------------------------------------------------------------------
Pennsylvania (cont'd)
AAA $ 2,500 Schuylkill Cnty. Redev. Auth. Common Lease Rev.,
Ser. A, 7.00%,
6/01/02\d, FGIC .............................. $ 2,766,275
AAA 7,800 Westmoreland Cnty., G.O., 6.70%, 8/01/01 D1,
AMBAC ........................................ 8,612,526
------------
51,204,586
------------
Rhode Island-2.6%
AAA 11,220 Conv. Ctr. Auth. Rev., Ser. A, 6.60%,
5/15/01 D1, MBIA ............................. 12,467,103
South Carolina-2.1%
AAA 4,390 Piedmont Mun. Pwr. Agy. Elec. Rev., 6.85%,
1/01/07, FGIC ................................ 4,779,261
AAA 5,100 Rock Hill Util. Sys. Rev., 6.50%, 1/01/07,
FGIC ......................................... 5,450,217
------------
10,229,478
------------
Tennessee-0.5%
AAA 2,350 Met. Nashville Arpt. Rev., Ser. C, 6.625%,
7/01/07, FGIC ................................ 2,522,561
Texas-15.0%
AAA 2,000 Austin Util. Sys. Rev., 6.875%, 5/15/07, AMBAC . 2,181,220
AAA 8,500 Cypress-Fairbanks Indpt. Sch. Dist., G.O.,
Zero Coupon, 8/01/06, AMBAC .................. 4,533,985
AAA 5,800 El Paso Cnty. Tax Ref., G.O., Ser. B, 6.40%,
2/15/07, MBIA ................................ 6,056,650
Ft. Bend Cnty., Tax. Perm. Imprvt., G.O, FGIC,
AAA 1,650 6.60%, 3/01/02 D1 ............................ 1,826,104
AAA 1,725 6.60%, 9/01/02 D1 ............................ 1,909,109
Harris Cnty. Rev., Toll Rd. Sr. Lien, Ser. A,
AAA 13,555 6.50%, 8/15/02, FGIC ......................... 15,106,641
AAA 1,955 6.50%, 8/15/06 D1 ............................ 2,111,009
AAA 590 6.50%, 8/15/07 D1 ............................ 634,899
AAA 15,000 Houston Wtr. & Swr. Sys. Rev., Ser. B, 6.75%,
12/01/08, FGIC ............................... 16,264,800
AAA 1,900 No. Central Texas Hlth. Fac. Dev. Corp. Rev.,
Children's Med. Ctr. of Dallas,
6.375%, 10/01/06, MBIA ....................... 2,011,473
AAA 1,550 No. Texas Wtr. Dist., 6.40%, 6/01/07, MBIA ..... 1,635,467
AAA 3,000 Round Rock Indpt. Sch. Dist., G.O., 6.75%,
8/15/01 D1, MBIA ............................. 3,322,140
AAA 15,000 Texas Mun. Pwr. Agy. Rev., Ref., Zero Coupon,
9/01/06, AMBAC ............................... ,963,350
AAA 3,745 Texas St. Bldg. Fin. Auth. Rev., 7.00%,
2/01/01 D1, MBIA ............................. 4,161,669
AAA 3,395 Tyler Cnty. Hlth. Facs. Dev. Corp. Rev.,
Mother Francis Hosp.,
6.50%, 7/01/06, FGIC ......................... 3,657,162
------------
73,375,678
------------
See Notes to Financial Statements.
10
<PAGE>
--------------------------------------------------------------------------------
Principal
Amount Value
Rating** (000) Description (Note 1)
--------------------------------------------------------------------------------
Washington-3.9%
AAA $ 1,250 Snohomish Cnty. Pub. Util. Dist., Elec. Rev.,
6.55%, 1/01/07, FGIC ......................... $ 1,385,563
Snohomish Cnty. Sch. Dist., G.O., MBIA,
AAA 3,835 6.70%, 12/01/06 .............................. 4,117,294
AAA 4,145 6.75%, 12/01/07 .............................. 4,438,052
Washington St. Pub. Pwr. Sply. Sys. Rev.,
Nuclear Proj. #2, Ser. A,
AAA 12,875 Zero Coupon, 7/01/06, MBIA ................... 6,812,162
AAA 2,265 6.50%, 7/01/05, FGIC ......................... 2,423,029
------------
19,176,100
------------
Wisconsin-0.6%
AAA 2,850 Wisconsin Hlth. & Ed. Fac. Auth., Columbia
Hosp. Rev.,
6.50%, 11/15/06, MBIA ........................ 3,042,917
------------
Total Long-Term Investments (cost $654,986,558). 708,288,015
------------
SHORT-TERM INVESTMENT*-0.1%
A1+ 200 New York City Mun. Wtr. Fin. Auth. Rev., FRDD,
4.10%, 7/03/95, FGIC (cost $200,000) 200,000
------------
Total Investments 144.7% (cost $655,186,558) ... 708,488,015
Other assets in excess of liabilities-1.3% ..... 6,287,975
Liquidation value of preferred stock-(46.0)% ... (225,000,000)
------------
Net Assets Applicable to Common
Shareholders 100% ............................ $489,775,990
============
\d This bond is prerefunded. See glossary for definition.
* For purposes of amortized cost valuation, the maturity date of this
instrument is considered to be the later of the next date on which the
security can be redeemed at par or the next date on which the rate of
interest is adjusted.
** Rating: Using the higher of Standard & Poor's, Moody's or Fitch's.
-------------------------------------------------------------------------------
KEY TO ABBREVIATIONS
AMBAC - American Municipal Bond Assurance Corporation
BIG - Bond Investors Guaranty Insurance Company
CGIC - Capital Guaranteed Insurance Company
CONNIE LEE - College Construction Loan Insurance Association
C.O.P. - Certificate of Participation
FGIC - Financial Guaranty Insurance Company
FRDD - Floating Rate Daily Demand
G.O. - General Obligation Bond
MBIA - Municipal Bond Insurance Association
-------------------------------------------------------------------------------
See Notes to Financial Statements.
11
<PAGE>
LEFT COLUMN
-------------------------------------------------------------------------------
The BlackRock Municipal Target Term Trust Inc.
Statement of Assets and Liabilities
June 30, 1995
(Unaudited)
-------------------------------------------------------------------------------
Assets
Investments, at value (cost
$655,186,558) (Note 1) .................................... $708,488,015
Cash ........................................................ 79,968
Interest receivable ......................................... 11,846,905
Receivable for investments sold ............................. 1,124,032
Deferred organization expenses and
other assets .............................................. 66,065
------------
721,604,985
------------
Liabilities
Payable for investments purchased ........................... 5,854,950
Dividends payable-common stock .............................. 300,995
Advisory fee payable (Note 2) ............................... 208,227
Dividends payable-preferred stock ........................... 182,880
Administration fee payable (Note 2) ......................... 41,645
Other accrued expenses ...................................... 240,298
------------
6,828,995
------------
Net Investment Assets ....................................... $714,775,990
============
Net investment assets were comprised of:
Common stock:
Par value (Note 4) ...................................... $ 454,106
Paid-in capital in excess of par ........................ 421,119,385
Preferred stock (Note 4) .................................. 225,000,000
------------
646,573,491
Undistributed net investment income ....................... 13,271,716
Accumulated net realized gain ............................. 1,629,326
Net unrealized appreciation ............................... 53,301,457
------------
Net investment assets, June 30, 1995 ...................... $714,775,990
============
Net assets applicable to common
shareholders ............................................ $489,775,990
============
Net asset value per common share:
($489,775,990 DB 45,410,639 shares of
common stock issued and outstanding) ...................... $10.79
======
RIGHT COLUMN
-------------------------------------------------------------------------------
The BlackRock Municipal Target Term Trust Inc.
Statement of Operations
Six Months Ended June 30, 1995
(Unaudited)
-------------------------------------------------------------------------------
Net Investment Income
Income
Interest and discount earned .............................. $21,253,532
-----------
Expenses
Investment advisory ....................................... 1,207,609
Auction agent ............................................. 282,000
Administration ............................................ 241,522
Custodian ................................................. 69,000
Reports to shareholders ................................... 61,000
Directors ................................................. 36,000
Transfer agent ............................................ 25,000
Audit ..................................................... 17,000
Legal ..................................................... 10,000
Miscellaneous ............................................. 154,880
-----------
Total expenses .......................................... 2,104,011
-----------
Net investment income ....................................... 19,149,521
-----------
Realized and Unrealized Gain
on Investments (Note 3)
Net realized gain on investments .......................... 1,425,821
Net change in unrealized appreciation
on investments .......................................... 34,251,470
-----------
Net gain on investments ................................... 35,677,291
-----------
Net Increase in Net Investment Assets
Resulting from Operations ................................. $ 54,826,812
============
See Notes to Financial Statements.
12
<PAGE>
-------------------------------------------------------------------------------
The BlackRock Municipal Target Term Trust Inc.
Statements of Changes
in Net Investment Assets
(Unaudited)
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Year
Ended Ended
June 30, December 31,
1995 1994
------------ ------------
<S> <C> <C>
Increase (Decrease) in Net Investment Assets
Operations:
Net investment income ........................................................ $ 19,149,521 $ 37,618,778
Net realized gain on investments ............................................. 1,425,821 366,539
Net change in unrealized appreciation on investments ......................... 34,251,470 (63,417,101)
------------ ------------
Net increase (decrease) in net investment assets resulting from operations ... 54,826,812 (25,431,784)
------------ ------------
Dividends:
To common shareholders from net investment income ............................ (13,963,771) (27,927,543)
To preferred shareholders from net investment income ......................... (4,493,995) (6,572,378)
------------ ------------
Total increase (decrease) .................................................. 36,369,046 (59,931,705)
------------ ------------
Net Investment Assets
Beginning of period ............................................................ 678,406,944 738,338,649
------------ ------------
End of period .................................................................. $714,775,990 $678,406,944
============ ============
</TABLE>
See Notes to Financial Statements.
13
<PAGE>
--------------------------------------------------------------------------------
The BlackRock Municipal Target Term Trust Inc.
Financial Highlights
(Unaudited)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
September 30,
Six Months 1991*
Ended Year Ended December 31, Through
June 30, ------------------------------- December 31,
1995 1994 1993 1992 1991
---- ---- ---- ---- ----
PER SHARE OPERATING PERFORMANCE:
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period........................... $ 9.98 $11.30 $10.04 $ 9.56 $ 9.40
------ ------ ------ ------ ------
Net investment income........................................ .42 .83 .82 .82 .13
Net realized and unrealized gain (loss) on investments....... .80 (1.39) 1.17 .42 .22
------ ------ ------ ------ ------
Net increase (decrease) from investment operations............. 1.22 (.56) 1.99 1.24 .35
------ ------ ------ ------ ------
Dividends from net investment income to:
Preferred shareholders....................................... (.10) (.14) (.12) (.15) (.02)
Common shareholders.......................................... (.31) (.62) (.61) (.61) (.05)
------ ------ ------ ------ ------
Total dividends.............................................. (.41) (.76) (.73) (.76) (.07)
------ ------ ------ ------ ------
Capital charge with respect to issuance of shares.............. - - - - (.12)
------ ------ ------ ------ ------
Net asset value, end of period**............................... $10.79 $ 9.98 $11.30 $10.04 $ 9.56#
====== ======= ======= ====== =======
Market value, end of period**.................................. $10.00 $ 8.875 $10.375 $10.00 $ 9.625
====== ======= ======= ====== =======
TOTAL INVESTMENT RETURN\d...................................... 16.23% (8.89%) 10.01% 10.51% 2.93%
RATIOS TO AVERAGE NET ASSETS
OF COMMON SHAREHOLDERS\d\d\d:
Operating expenses............................................. .88%\d\d .94% .87% .91% .81%\d\d
Net investment income.......................................... 8.04%\d\d 7.91% 7.61% 8.43% 5.80%\d\d
SUPPLEMENTAL DATA:
Average net assets of common shareholders (in thousands)....... $480,375 $475,529 $492,138 $441,368 $418,353
Portfolio turnover............................................. 6% 21% 1% 35% 1%
Net assets of common shareholders, end of period (in
thousands)................................................... $489,776 $453,407 $513,339 $455,954 $434,166
Asset coverage per share of preferred stock, end of period..... $158,880 $150,783 $164,075 $151,323 $146,481
Preferred stock outstanding (in thousands)..................... $225,000 $225,000 $225,000 $225,000 $225,000
<FN>
--------------
* Commencement of investment operations.
** Net asset value and market value are published in The Wall Street Journal
each Monday.
# Net asset value immediately after the closing of the initial public
offering was $9.28.
\d 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. This calculation
does not reflect brokerage commissions. Total investment returns for
periods of less than one full year are not annualized.
\d\d Annualized.
\d\d\d Ratios calculated on the basis of income and expenses applicable to both
the common and preferred shares relative to the average net assets of
common shareholders. Ratios do not reflect the effect of dividend
payments to preferred shareholders. 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 common
stock.
</FN>
</TABLE>
See Notes to Financial Statements.
14
<PAGE>
(Left column)
--------------------------------------------------------------------------------
The BlackRock Municipal Target Term Trust Inc.
Notes to Financial Statements
(Unaudited)
--------------------------------------------------------------------------------
Note 1. Accounting
Policies
The BlackRock Municipal Target Term Trust Inc., (the "Trust") a Maryland
corporation is a diversified closed-end management investment company. The
Trust's investment objective is to manage a diversified portfolio of investment
grade securities that will return $10 per share to investors on or about
December 31, 2006 while providing current income exempt from regular federal
income tax. The ability of issuers of debt securities held by the Trust to meet
their obligations may be affected by economic developments in a specific state,
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: Municipal securities (including commitments to purchase
such securities on a "when-issued" basis) are valued on the basis of prices
provided by a pricing service which uses information with respect to
transactions in bonds, quotations from bond dealers, market transactions in
comparable securities and various relationships between securities in
determining values. 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 more than 60 days are valued at current
market quotations. 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, or by amortizing their value on the 61st day prior to maturity, if
their original term to maturity from date of purchase exceeded 60 days.
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 commis-
(Right column)
sions, 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.
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.
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.
Short Sales: The Trust may make short sales of securities as a method of
hedging potential 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 greater or less than the proceeds originally received.
15
<PAGE>
(Left column)
Securities Transactions and Investment Income: Securities transactions are
recorded on the trade date. Realized gains and losses are calculated on the
identified cost basis. Interest income is recorded on the accrual basis and the
Trust amortizes premium and accretes discount on securities purchased using the
interest method.
Federal Income Taxes: It is the Trust's intention to continue to meet the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute sufficient net income to shareholders. Therefore, no
federal income tax provision is required.
Dividends and Distributions: The Trust declares and pays dividends to common
shareholders monthly from net investment income. Capital gains, if any, in
excess of loss carryforwards may be distributed annually. Dividends and
distributions are recorded on the ex-dividend date. Dividends and distributions
to preferred shareholders are accrued and determined as described in Note 4.
Deferred Organization Expenses: A total of $70,000 was incurred in connection
with the organization of the Trust. These costs have been deferred and are being
amortized ratably over a period of sixty months from the date the Trust
commenced investment operations.
Note 2. Agreements
The Trust has an Investment Advisory Agreement with BlackRock Financial
Management, Inc. (the "Adviser") and an Administration Agreement with Prudential
Mutual Fund Management, Inc. ("PMF"), an indirect, wholly owned subsidiary of
The Prudential Insurance Company of America.
The investment advisory fee paid to the Adviser is computed weekly and payable
monthly at an annual rate of 0.35% of the Trust's average weekly net investment
assets. The administration fee paid to PMF is also computed weekly and payable
monthly at an annual rate of 0.07% of the Trust's average weekly net investment
assets.
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. PMF pays occupancy and certain clerical and
accounting costs of the Trust. The Trust bears all other costs and expenses.
On February 28, 1995, the Adviser was acquired by PNC Bank, N.A. Following
acquisition, the Adviser has become a wholly-owned corporate subsidiary of PNC
Asset Management Group, Inc., the holding company for PNC's asset management
businesses.
(Right column)
Note 3. Portfolio
Securities
Purchases and sales of investment securities, other than short-term investments,
for the six months ended June 30, 1995 aggregated $45,094,341 and $39,884,967,
respectively.
The federal income tax basis of the Trust's investments at June 30, 1995 was
$655,206,660 and, accordingly, net unrealized appreciation was $53,281,355
(gross unrealized appreciation-$53,287,705, gross unrealized
depreciation-$6,350).
Note 4. Capital
There are 200 million shares of $.01 par value common stock authorized. Of the
45,410,639 common shares outstanding at June 30, 1995, the Adviser owned 10,639
shares.
The Trust may classify or reclassify any unissued shares of common stock into
one or more series of preferred stock. On November 21, 1991 the Trust
reclassified 4,500 shares of common stock and issued 3 series of Auction Market
Preferred Stock ("Preferred Stock") as follows: Series W7-1,500 shares, Series
F7-1,500 shares and Series W28-1,500 shares. The Preferred Stock has a
liquidation value of $50,000 per share plus any accumulated but unpaid
dividends.
Dividends on Series W7 and Series F7 are cumulative at a rate which is reset
every 7 days based on the results of an auction. Dividends on Series W28 are
also cumulative at a rate which is reset every 28 days based on the results of
an auction. Dividend rates ranged from 3.55% to 4.56% during the six months
ended June 30, 1995.
The Trust may not declare dividends or make other distributions on shares of
common stock or purchase any such shares if, at the time of the declaration,
distribution, or purchase, asset coverage with respect to the outstanding
Preferred Stock would be less than 200%.
The Preferred Stock is redeemable at the option of the Trust, in whole or in
part, on any dividend payment date at $50,000 per share plus any accumulated or
unpaid dividends whether or not declared. The Preferred Stock is also subject to
mandatory redemption at $50,000 per share plus any accumulated or unpaid
dividends, whether or not declared if certain requirements relating to the
composition of the assets and liabilities of the Trust as set forth in the
Articles of Incorporation are not satisfied.
The holders of Preferred Stock have voting rights equal to the holders of
common stock (one vote per share) and will vote together with holders of shares
of common stock as a single class. However, holders of Preferred Stock are also
16
<PAGE>
(Left column)
entitled to elect two of the Trust's directors. In addition, the Investment
Company Act of 1940 requires that along with approval by shareholders that might
otherwise be required, the approval of the holders of a majority of any
outstanding preferred shares, voting separately as a class would be required to
(a) adopt any plan of reorganization that would adversely affect the Preferred
shares and (b) take any action requiring a vote of security holders, including,
among other things, changes in the Trust's subclassification as a closed-end
investment company or changes in its fundamental investment restrictions.
On May 16, 1995 shareholders approved a proposal to split each share of the
Trust's Auction Rate Municipal
(Right column)
Preferred Stock into two shares and simultaneously reduce each share's
liquidation preference from $50,000 to $25,000. It is expected that the stock
split will occur after the close of business on July 24, 1995.
Note 5. Dividends
Subsequent to June 30, 1995, the Board of Directors of the Trust declared
dividends from undistributed earnings of $0.05125 per common share payable July
31, 1995 to shareholders of record on July 14, 1995.
For the period July 1, 1995 to July 14, 1995 dividends and distributions
declared on preferred shares totalled $326,471 in aggregate for the three
outstanding preferred share series.
Note 6. Quarterly Data
<TABLE>
<CAPTION>
Net increase
Net realized and (decrease)
unrealized in net investment
Net investment gain (loss) assets resulting Dividends Share
income on investments from operations Common Shares Preferred Shares* price of Period
Per Per Per Per Per Common end
Quarterly Total common common common common common Stock net asset
Period income Amount share Amount share Amount share Amount share Amount share High Low value
------ ------ -------------- -------------- -------------- ---------------- ---------------- ---------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
January 1,
1993 to
March 31,
1993..$10,447,999 $9,435,209 $.21 $21,945,947 $.48 $31,381,155 $.69 $6,981,886 $.15375 $1,341,086 $.03 $10-1/2 $9-5/8 $10.55
April 1,
1993 to
June 30,
1993.. 10,469,137 9,388,503 .21 14,092,344 .31 23,480,845 .51 6,981,886 .15375 1,356,335 .03 10-1/2 10-1/8 10.88
July 1,
1993 to
September
30,
1993.. 10,327,513 9,233,289 .20 19,885,455 .44 29,118,744 .64 6,981,886 .15375 1,369,987 .03 10-3/4 10-1/2 11.34
October 1,
1993 to
December
31,
1993.. 10,486,051 9,371,491 .20 (2,603,771)(.06) 6,767,723 .15 6,981,885 .15375 1,369,298 .03 10-7/8 10-1/8 11.30
January 1,
1994 to
March 31,
1994.. 10,507,914 9,400,533 .21 (43,506,373)(.96) (34,105,840)(.75) 6,981,886 .15375 1,259,117 .03 10-7/8 9-5/8 10.37
April 1,
1994 to
June 30,
1994.. 10,495,844 9,429,834 .21 (866,471)(.02) 8,563,363 .19 6,981,885 .15375 1,571,564 .03 10-1/8 9-3/8 10.37
July 1,
1994 to
September
30,
1994.. 10,551,216 9,425,932 .21 (5,116,231)(.11) 4,309,701 .10 6,981,886 .15375 1,695,136 .03 10 9-3/8 10.28
October 1,
1994 to
December
31,
1994.. 10,520,366 9,362,479 .20 (13,561,487)(.30) (4,199,008)(.10) 6,981,886 .15375 2,046,561 .05 9-3/4 8-1/4 9.98
January 1,
1995 to
March 31,
1995.. 10,652,689 9,619,611 .21 29,779,929 .67 39,399,540 .88 6,981,886 .15375 2,233,857 .05 9-7/8 8-3/4 10.65
April 1,
1995 to
June 30,
1995.. 10,600,843 9,529,910 .21 5,897,362 .13 15,427,272 .34 6,981,885 .15375 2,260,138 .05 10 9-5/8 10.79
<FN>
----------
*For the six months ended June 30, 1995 the average annualized rate paid to
preferred shareholders was 4.03%.
</FN>
</TABLE>
17
<PAGE>
--------------------------------------------------------------------------------
THE BLACKROCK MUNICIPAL TARGET 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.
At a Special Meeting of Trust shareholders held on February 15, 1995 to
approve the Trusts' advisory agreement with BlackRock Financial Management, Inc.
Shareholders approved the agreement. The result of the voting was as follows:
Votes* For 37,017,885 Votes* Against 591,066 Abstentions* 1,245,839
The Annual Meeting of Trust shareholders was held May 16, 1995 to vote on
the following matters:
(1) To elect the following three Directors to serve as follows:
Director Class Term Expiring
-------- ----- ---- --------
Andrew F. Brimmer..................... I 3 years 1998
Laurence D. Fink...................... I 3 years 1998
Kent Dixon............................ III 2 years 1997
and to elect Richard E. Cavanagh as a Class I Director to represent the
preferred shareholders for a three year term expiring in 1998. Directors
whose term of office continues beyond this meeting are Frank J. Fabozzi,
James Grosfeld, James Clayburn La Force, Jr. and Ralph L. Schlosstein.
(2) To consider and act on a proposal to split each share of the Trust's
Auction Rate Preferred Stock (Preferred) into two shares and
simultaneously reduce each share's liquidation preference, as provided
in the Trust's Articles Supplementary, from $50,000 to $25,000.
(3) To ratify the selection of Deloitte &Touche LLP as independent public
accountants of the Trust for the fiscal year ending December 31, 1995.
Shareholders elected the four Directors, approved the proposal to split
each Preferred share into two shares and ratified the selection of
Deloitte & Touche LLP. The results of the voting was as follows:
Votes* Votes* Votes*
For Against Withheld
--- ------- --------
(1) Andrew F. Brimmer............. 31,722,479 - 496,936
Laurence D. Fink.............. 31,773,478 - 445,936
Kent Dixon.................... 31,771,500 - 447,915
Richard E. Cavanagh........... 2,501 - 447,915
(2) Preferred share split......... 31,772,407 67 447,932
(3) Deloitte & Touche LLP......... 31,700,097 154,971 364,346
----------
*The votes represent common and preferred shareholders voting as a single class
except for the election of Richard E. Cavanagh and the approval of the preferred
share split which represents the votes of only the preferred shareholders.
18
<PAGE>
--------------------------------------------------------------------------------
THE BLACKROCK MUNICIPAL TARGET TERM TRUST INC.
INVESTMENT SUMMARY
--------------------------------------------------------------------------------
The Trust's Investment Objective
The Trust's investment objective is to provide current income exempt from
regular Federal income tax and to return $10 per share (the initial public
offering price per share) to investors on or about December 31, 2006.
Who Manages the Trust?
BlackRock Financial Management, Inc. (BlackRock or the Adviser) is the
investment adviser for the Trust. BlackRock is a registered investment adviser
specializing in fixed income securities. Currently, BlackRock manages over $32
billion of assets across the government, mortgage, corporate and municipal
sectors. These assets are managed on behalf of institutional and individual
investors in 21 closed-end funds, several open-end funds and over 80 separate
accounts for various clients in the U.S. and overseas. BlackRock is a subsidiary
of PNC Asset Management Group, Inc. which is a division of PNC Bank, N.A., the
nation's twelfth largest banking organization.
What Can the Trust Invest In?
The Trust intends to invest substantially all of its assets in a diversified
portfolio of tax-exempt Municipal Obligations which are rated Aaa by Moody's or
AAA by S &P or are covered by insurance or a guaranty of the timely payment of
both principal and interest from an entity having a Aaa or AAA rating or are
determined by the Trust's adviser to be of comparable credit quality.
What is the Adviser's Investment Strategy?
The primary investment strategy for the Trust is to seek to closely match the
maturity of the assets of the portfolio with the future return of the initial
investment on or about December 31, 2006. Accordingly, the majority of the
funds' assets are invested in securities which have maturities that are similar
to the maturity date of the fund. Most municipal securities, however, have
optional redemption provisions (or "calls") which allow the issuer to redeem the
bonds on specified dates prior to their maturity. While call features are more
predictable than prepayments on mortgage-backed securities, they require
additional active ,management considerations for the Trust. If a portion of the
Trust is invested in callable bonds, the yield to call date is analyzed instead
of the yield to the maturity of the bond, and should the security be called,
BlackRock will generally seek to reinvest the proceeds in additional assets with
maturities which are not significantly longer than the remaining term of the
Trust. In addition, in order to seek to earn back the underwriting discount and
upfront expenses and have the ability to return the full initial investment at
the end of the term, the Trust generally seeks to retain a small portion of the
income earned on its portfolio each year.
In addition to seeking the return of the initial offering price, the Adviser
also seeks to provide current income exempt from Federal income tax to
investors. The portfolio managers will attempt to achieve this objective by
investing in securities that provide competitive tax-exempt income. In addition,
leverage will be used (in an amount up to 35% of the portfolio 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 will be reinvested in securities with
maturities which coincide with the remaining term of the Trust. 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. If market conditions, such as high
interest rate volatility, force a choice between current income and risking the
return of the initial offering price, it is likely that the return of the
initial offering price will be emphasized.
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 advisor. The Trust
pays monthly
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<PAGE>
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, Boston Financial Data
Services. 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 issuance of preferred
stock 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 35% 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
rapidly 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.
Leverage. The Trust utilizes leverage through the issuance of preferred stock
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: BMN) 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.
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.
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.
Municipal Obligations. Municipal obligations include debt obligations issued by
states, cities, and local authorities, and possessions and certain territories
of the United States to obtain funds for various public purposes, including the
construction of public facilities, the refinancing of outstanding obligations
and the obtaining of funds for general operating expenses and for loans to other
public institutions and facilities. The value of municipal debt securities
generally varies inversely with changes in prevailing market interest rates.
Depending on the amount of call protection that the securities in the Trust
have, the Trust may be subject to certain reinvestment risks in environments of
declining interest rates.
Alternative Minimum Tax (AMT). The Trust may invest in securities subject to
alternative minimum tax.
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<PAGE>
--------------------------------------------------------------------------------
THE BLACKROCK MUNICIPAL 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 automatically
reinvested by State Street Bank & Trust Company (the "Plan Agent") in Trust
shares. 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 for the participants' accounts. The Trust will not issue shares
under 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 income tax that may be payable on
such dividends or distributions.
Experience under the Plan may indicate that changes are desirable.
Accordingly, 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.
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<PAGE>
--------------------------------------------------------------------------------
THE BLACKROCK MUNICIPAL TARGET TERM TRUST INC.
GLOSSARY
--------------------------------------------------------------------------------
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.
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: 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 have all distributions of dividends
and capital gains automatically reinvested into
additional shares of the Trust.
Embedded Caps: Also known as additional interest municipal bonds.
These securities are intended to protect the income
that the Trust earns through leverage from significant
increases in short-term rates. The coupon on these
bonds will increase if short-term rates rise
significantly.
Market Price: Price per share of a security trading in the secondary
market. For a closed-end fund, this is the price at
which one share of the fund trades on the stock
exchange. If you were to buy or sell shares, you would
pay or receive the market price.
Net Asset Value (NAV): Net asset value is the total market value of all
securities and other assets held by the Trust, plus
income accrued on its investments, minus any
liabilities including accrued expenses, divided by the
total number of outstanding shares. It is the
underlying value of a single share on a given day. Net
asset value for the Trust is calculated weekly and
published in Barron's on Saturday and The New York
Times or The Wall Street Journal each Monday.
Premium: When a fund's stock price is greater than its net
asset value, the fund is said to be trading at a
premium.
Pre-refunded Bonds: These securities are collateralized by U.S. Government
securities which are held in escrow and are used to
pay principal and interest on the tax exempt issue and
retire the bond in full at the date indicated,
typically at a premium to par.
Total Investment Return: A measurement of a fund's performance, taking into
account the combination of dividends paid and the
increase in the market value of a Trust's common
shares. It may be expressed on an average annual basis
or cumulative basis (total change over a given
period). In addition, total investment return may be
expressed with or without the effect of reinvestment
of dividends and capital gains. This report calculates
total investment return with reinvested dividends and
capital gains.
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<PAGE>
<TABLE>
-------------------------------------------------------------------------------------------------
BlackRock Financial Management Inc.
Summary of Closed-End Funds
-------------------------------------------------------------------------------------------------
Taxable Trusts
-------------------------------------------------------------------------------------------------
<CAPTION>
Termination
Perpetual Trusts Stock Symbol Date
------------ ------------
<S> <C> <C>
The BlackRock Income Trust Inc. .................................... BKT N/A
The BlackRock North American Government Income Trust Inc. .......... BNA N/A
Term Trusts
The BlackRock 1998 Term Trust Inc. ................................. BBT 12/98
The BlackRock 1999 Term Trust Inc. ................................. BNN 12/99
The BlackRock Target Term Trust Inc. ............................... BTT 12/00
The BlackRock 2001 Term Trust Inc. ................................. BLK 06/01
The BlackRock Strategic Term Trust Inc. ............................ BGT 12/02
The BlackRock Investment Quality Term Trust Inc. ................... BQT 12/04
The BlackRock Advantage Term Trust Inc. ............................ BAT 12/05
The BlackRock Broad Investment Grade 2009 Term Trust Inc. .......... BCT 12/09
</TABLE>
<TABLE>
Tax-Exempt Trusts
-------------------------------------------------------------------------------------------------
<CAPTION>
Termination
Perpetual Trusts Stock 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 call BlackRock at (800) 227-7BFM
or consult with your financial advisor
23
<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.
Ralph L. Schlosstein
Officers
Ralph L. Schlosstein, President
Keith T. Anderson, Vice President
Michael C. Huebsch, Vice President
Robert S. Kapito, Vice President
Kevin Klingert, 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 Mutual Fund Management, Inc.
One Seaport Plaza
New York, NY 10292
Custodian
State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171
(800) 669-1BFM
Auction Agent
Bankers Trust Company
4 Albany Street
New York, NY 10006
Independent Auditors
Deloitte & Touche LLP
Two World Financial Center
New York, NY 10281-1434
Legal Counsel
Skadden, Arps, Slate, Meagher & Flom
919 Third Avenue
New York, NY 10022
The accompanying financial statements as of
June 30, 1995 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 Municipal Target Term Trust Inc.
c/o Prudential Mutual Fund Management, Inc.
32nd Floor
One Seaport Plaza
New York, NY 10292
(800) 227-7BFM
09247M 10 5
09247M 20 4
09247M 30 3
09247M 40 2
(Right column)
The BlackRock
Municipal Target
Term Trust Inc.
----------------------------------
Semi-Annual Report
June 30, 1995
