- --------------------------------------------------------------------------------
THE BLACKROCK MUNICIPAL TARGET TERMTRUSTINC.
SEMI-ANNUAL REPORT TO SHAREHOLDERS
REPORT OF INVESTMENT ADVISER
- --------------------------------------------------------------------------------
July 31, 1997
Dear Trust Shareholder:
After experiencing higher interest rates in the face of a resilient stock
market and stronger economic growth for the first few months of 1997, bond
investors were comforted by more moderate economic data released during the
second quarter which allowed the bond market to recapture some of its losses.
Our outlook for the bond market is cautiously optimistic. Over the short
term, we believe that the recent rally may continue, since inflation news has
been positive and U.S. securities appear cheap relative to their global
counterparts. Additionally, Fed Chairman Greenspan appears to be comfortable
allowing the economy to expand in the absence of rising inflationary pressures.
Thus, we do not foresee another tightening in the immediate future in the
absence of a visible inflation shock. However, recent wage increases, the
buoyant stock market and record levels of consumer confidence could lead to
stronger consumer spending and overall economic growth in the third quarter.
Therefore, an uninterrupted decline in yields is by no means a certainty.
This report provides the Trust's portfolio managers an opportunity to
provide you with detailed market commentary and to review the major investment
themes of the portfolio over the past six months. We hope that you find this
report informative and look forward to serving your financial needs in the
future.
Sincerely,
/s/ Laurence D. Fink /s/ Ralph L. Schlosstein
- -------------------------- -----------------------------
Laurence D. Fink Ralph L. Schlosstein
Chairman President
1
<PAGE>
July 31, 1997
Dear Shareholder:
We are pleased to present the semi-annual report for The BlackRock
Municipal Target Term Trust Inc. ("the Trust") for the six months ended June 30,
1997. We would like to take this opportunity to review the Trust's stock price
and net asset value (NAV) performance, summarize developments in the fixed
income markets 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 "BMN". The
Trust's investment objective is to manage a portfolio of municipal debt
securities that will return $10 per share (an amount equal to the Trust's
initial public offering price) to investors on or about December 31, 2006, while
providing high current income exempt from regular federal income tax. The Trust
seeks to achieve this objective by investing in high credit quality ("AAA" or
insured to "AAA") tax-exempt general obligation and revenue bonds issued by
city, county and state municipalities throughout the United States.
The table below summarizes the changes in the Trust's stock price and net
asset value over the period:
<TABLE>
<CAPTION>
-----------------------------------------------------------
6/30/97 12/31/96 CHANGE HIGH LOW
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
STOCK PRICE $10.50 $10.25 2.44% $10.75 $10.125
- -----------------------------------------------------------------------------------------
NET ASSET VALUE (NAV) $10.97 $10.96 0.09% $11.07 $10.73
- -----------------------------------------------------------------------------------------
</TABLE>
THE FIXED INCOME MARKETS
The strong economic growth witnessed during the fourth quarter of 1996
spilled over into the first quarter of 1997. Although inflationary measures such
as commodity, producer and consumer prices remained relatively stable, labor
markets continued to strengthen. In an effort to subdue this growth, the Federal
Reserve raised the Federal funds rate by 25 basis points at their March 25, 1997
policy meeting as a pre-emptive strike against inflation.
After expanding at a blistering pace of 5.9% during the first quarter, the
U.S. economy's growth rate slowed in the second quarter of 1997. Signs of an
economic slowdown were prevalent in a broad range of industrial and consumer
indicators, including lower factory orders, decreased consumer spending, and
higher inventories. In addition, inflationary forces remained benign according
to year-over-year comparisons for the consumer and producer indices. These
indicators allowed the Federal Reserve to maintain interest rate levels at their
May 20, 1997 and July 2, 1997 policy meetings and wait for more definite signs
of inflation before increasing interest rates.
Short-to-intermediate maturity municipals underperformed Treasury
equivalents during the first quarter, despite the historically favorable
interest rate environment. Issuance of municipal debt declined almost 10% during
the first quarter 1997 from first quarter 1996 due to the higher interest rate
environment. Municipal bonds performed reasonably well during the second
quarter, despite a strong rally in the Treasury market. With nearly $60 billion
worth of municipal issues maturing in June and July, strong investor demand came
from both individuals and institutions seeking to reinvest their principal back
into the market. New municipal deals were heavily oversubscribed during the
second quarter, with a manageable supply of new issues coming to the market. For
the six month period ended June 30, 1997, municipal bonds as measured by the
LEHMAN BROTHERS MUNICIPAL INDEX slightly outperformed their taxable counterparts
(LEHMAN BROTHERS AGGREGATE INDEX) with a total return of 3.20% vs. 3.11%.
2
<PAGE>
Looking forward, a number of distractions may impede further yield spread
tightening in the municipal market, including potential tax reforms and the
strong rallies in the Treasury and stock markets. BlackRock believes that
municipals are currently trading at historically rich ratios versus Treasuries.
We remain focused on shorter maturity securities until the market provides
further guidance on the direction of interest rates, or the supply/demand
characteristics of the market are altered.
THE TRUST'S PORTFOLIO AND INVESTMENT STRATEGY
The Trust's portfolio is actively managed to diversify exposure to various
sectors, issuers, revenue sources and security types. BlackRock's investment
strategy emphasizes a relative value approach, which allows the Trust to
capitalize upon changing market conditions by rotating municipal sectors,
credits and coupons. Over the past six months, there has been relatively little
trading activity in the Trust, due to price appreciation of a majority of
securities in the portfolio above the prices at which they were bought. A bond
sold at a gain would result in the Trust realizing a capital gain, which may
require a taxable distribution to shareholders. Since one of the Trust's primary
investment objectives is to pay out tax-exempt income, we believe that waiting
to restructure the portfolio in a higher interest rate environment is the most
prudent strategy at this time.
The following chart compares the Trust's current and December 31, 1996
asset composition:
- --------------------------------------------------------------------------------
THE BLACKROCK MUNICIPAL TARGET TERM TRUST INC.
- --------------------------------------------------------------------------------
SECTOR JUNE 30, 1997 DECEMBER 31, 1996
- --------------------------------------------------------------------------------
City, County and State 23% 22%
- --------------------------------------------------------------------------------
Hospital 15% 15%
- --------------------------------------------------------------------------------
Transportation 14% 14%
- --------------------------------------------------------------------------------
Tax Revenue 11% 13%
- --------------------------------------------------------------------------------
Water & Sewer 10% 10%
- --------------------------------------------------------------------------------
Utility/Power 8% 8%
- --------------------------------------------------------------------------------
Lease Revenue 7% 7%
- --------------------------------------------------------------------------------
Education 4% 4%
- --------------------------------------------------------------------------------
Building 2% 2%
- --------------------------------------------------------------------------------
Pollution Control/Resource Recovery 2% 2%
- --------------------------------------------------------------------------------
Other 4% 3%
- --------------------------------------------------------------------------------
3
<PAGE>
Additionally, the Trust employs leverage to enhance its income by paying
the Trust's preferred shareholders short term municipal rates and investing the
proceeds in longer maturity issues which have higher yields. The Trust's ability
to pay high monthly income may be affected by the profitability of its leverage.
The Federal Reserve's 25 basis point (0.25%) increase in the Fed funds target
rate on March 25, 1997 resulted in a modest increase in the Trust's borrowing
costs; however, we do not believe that one increase in short term interest rates
will negatively impact the Trust's long-term income earning ability.
We look forward to managing the Trust to benefit from the opportunities
available in the fixed income markets and to meet its investment objectives. We
thank you for your investment in the BlackRock Municipal Target Term Trust Inc.
Please feel free to contact our marketing center at (800) 227-7BFM (7236) if you
have specific questions which were not addressed in this report.
Sincerely,
/s/ Robert S. Kapito /s/ Kevin Klingert
- ---------------------------- --------------------------
Robert S. Kapito Kevin Klingert
Vice Chairman and Portfolio Manager Managing Director and Portfolio Manager
BlackRock Financial Management, Inc. BlackRock Financial Management, Inc.
- --------------------------------------------------------------------------------
THE BLACKROCK MUNICIPAL TARGET TERM TRUST INC.
- --------------------------------------------------------------------------------
Symbol on New York Stock Exchange: BMN
- --------------------------------------------------------------------------------
Initial Offering Date: September 27, 1991
- --------------------------------------------------------------------------------
Closing Stock Price as of 6/30/97: $10.50
- --------------------------------------------------------------------------------
Net Asset Value as of 6/30/97: $10.97
- --------------------------------------------------------------------------------
Yield on Closing Stock Price as of 6/30/97 ($10.50)1: 5.86%
- --------------------------------------------------------------------------------
Current Monthly Distribution per Common Share:2 $ 0.05125
- --------------------------------------------------------------------------------
Current Annualized Distribution per Common Share:2 $ 0.6150
- --------------------------------------------------------------------------------
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>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
THE BLACKROCK MUNICIPAL TARGET TERM TRUST INC.
PORTFOLIO OF INVESTMENTS
JUNE 30, 1997 (UNAUDITED)
- ----------------------------------------------------------------------------------------------------------------------
PRINCIPAL OPTION
AMOUNT CALL VALUE
RATING* (000) DESCRIPTION PROVISIONS++ (NOTE 1)
- ----------------------------------------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS--143.9%
ALABAMA--1.0%
Hoover Brd. of Ed. Spl. Tax. Wts., G.O., AMBAC,
<S> <C> <C> <C> <C>
AA $ 1,700 6.50%, 2/01/01+ ................................................ No Opt. Call $ 1,842,460
AAA 1,815 6.60%, 2/01/01+ ................................................ No Opt. Call 1,973,050
AAA 1,025 6.625%, 2/01/01+ ............................................... No Opt. Call 1,115,098
-----------
4,930,608
-----------
ALASKA--3.9%
AAA 7,500 Anchorage Elec. Util. Rev., 7.125%, 6/01/06, MBIA ................. 6/99 at 102 8,008,275
AAA 4,845 Fairbanks Mun. Util. Auth. Rev., Ser. A, 7.10%, 1/01/05, AMBAC .... 1/99 at 102 5,112,105
AAA 9,000 No. Slope Boro., Ser. B, Zero Coupon, 6/30/04, FSA ................ No Opt. Call 6,352,200
-----------
19,472,580
-----------
ARIZONA--1.1%
AAA 5,010 Tucson Bus. Dev. Fin. Corp. Lease Rev., 6.25%, 7/01/06, FGIC ...... 7/02 at 102 5,397,323
-----------
CALIFORNIA--4.5%
AAA 6,000 California St., G.O., 6.30%, 9/01/06, AMBAC ....................... No Opt. Call 6,709,440
AAA 1,910 California St., Pub. Wrks. Rev., Ser. A, 6.20%, 12/01/06, AMBAC ... 12/02 at 102 2,065,073
AAA 4,000 Glendale Hosp. Rev., Adventist Hlth. Ctr., Ser. A, 6.50%, 3/01/07,
MBIA ........................................................... 3/01 at 102 4,295,520
Los Angeles Wst. Wtr. Sys. Rev., MBIA,
AAA 5,570 5.625%, 6/01/07 ................................................ 6/03 at 102 5,832,403
AAA 3,320 Ser. D, 6.60%, 12/01/06 ........................................ 12/00 at 102 3,580,819
-----------
22,483,255
-----------
COLORADO--2.0%
Denver City & Cnty. Wtr. Brd. Rev., C.O.P., FGIC,
AAA 3,410 6.50%, 11/15/05 ................................................ 11/01 at 101 3,673,082
AAA 1,875 6.60%, 11/15/06 ................................................ 11/01 at 101 2,023,125
AAA 3,865 6.625%, 11/15/07 ............................................... 11/01 at 101 4,166,199
-----------
9,862,406
-----------
DISTRICT OF COLUMBIA--1.7%
AAA 8,250 District of Columbia, G.O., Ser. B, 5.90%, 6/01/06, MBIA .......... 6/04 at 102 8,695,005
-----------
FLORIDA--13.1%
Florida St. Div. Bd. Fin. Dept. Gen. Svcs. Rev.
(Dept. Nat. Res. & Pres.),
AAA 7,000 6.45%, 7/01/07, MBIA ........................................... 7/01 at 101 7,518,000
AAA 6,975 6.75%, 7/01/07, AMBAC .......................................... 7/01 at 102 7,627,441
AAA 2,190 Florida St. Sunshine Skyway Rev., 6.60%, 7/01/07, MBIA ............ 7/01 at 101 2,368,069
Greater Orlando Aviation Auth., Arpt. Facs. Rev., Ser. B, FGIC,
AAA 4,760 6.55%, 10/01/06 ................................................ 9/04 at 102 5,261,466
AAA 5,070 6.55%, 10/01/07 ................................................ 10/02 at 102 5,591,602
AAA 3,155 Gulf Breeze, Local Gov't., Ln. Pkg. Rev., 7.70%, 12/01/15, FGIC ... 12/99 at 102 3,375,598
AAA 2,650 Jacksonville Hlth. Facs. Auth. Rev., Mem. Med. Ctr., Ser. A,
6.625%, 11/01/01+, MBIA ........................................ No Opt. Call 2,899,285
AAA 7,500 Jacksonville Hosp. Rev., Univ. Med. Ctr. Inc. Proj.,
6.50%, 2/01/07, CONNIE LEE...................................... 2/02 at 102 8,100,375
AAA 4,000 Kissimmee Util. Auth. Rev., Elec. Sply., 6.70%, 10/01/07, MBIA .... 10/97 at 102 4,103,880
AAA 2,000 No. Broward Hosp. Rev., 6.50%, 1/01/02+, MBIA ..................... No Opt.Call 2,193,000
AAA 10,645 Orange Cnty., Tourist Dev. Tax Rev., Ser. A,
6.375%, 10/01/06, AMBAC ........................................ 10/02 at 102 11,654,359
AAA 2,570 Tampa Auth. Rev., St. Joseph Hlth. Ctr., 6.70%, 12/01/07, MBIA .... 12/01 at 102 2,813,302
AAA 1,600 Tampa Util. Tax & Spec. Rev., 6.80%, 10/01/06, AMBAC .............. 10/01 at 102 1,755,296
-----------
65,261,673
-----------
See Notes to Financial Statements.
5
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
PRINCIPAL OPTION
AMOUNT CALL VALUE
RATING* (000) DESCRIPTION PROVISIONS++ (NOTE 1)
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
GEORGIA--0.4%
AAA $ 1,990 Burke Cnty. Dev. Auth. Poll. Ctrl. Rev., Oglethorpe Pwr. Corp.,
Ser. B, 6.45%, 1/01/05, MBIA ................................... 1/04 at 101 $ 2,167,687
-----------
ILLINOIS--14.7%
AAA 4,930 Alton Hlth. Facs. Rev., Rfdg. & Impt., Christian Hlth. Ctr.,
7.00%, 2/15/01+, FGIC .......................................... No Opt. Call 5,427,683
Chicago Cent. Pub. Library, G.O., AMBAC,
AAA 1,800 Ser. A, 6.75%, 1/01/07 ......................................... 4/02 at 102 1,975,284
AAA 1,600 Ser. C, 6.75%, 1/01/07 ......................................... 4/02 at 102 1,755,808
AAA 5,555 Cook Cnty., Ser. A, 6.40%, 11/15/02+, MBIA ........................ No Opt. Call 6,123,554
AAA 1,775 Cook Cnty. Cmnty. Sch. Dist., G.O., Ser. A, 6.375%, 1/01/02+, FGIC. No Opt. Call 1,904,575
Illinois Hlth. Facs. Auth. Rev.,
AAA 3,300 Elmhurst Mem. Hosp., 6.60%, 1/01/07, FGIC ...................... 1/02 at 102 3,563,076
AAA 14,585 Sisters Svcs., Inc., Ser. C, 6.625%, 6/01/06, MBIA ............. 6/02 at 102 15,868,918
Illinois Regl. Trans. Auth. Rev., Ser. A, FGIC,
AAA 2,780 6.55%, 11/01/06 ................................................ 11/01 at 102 3,015,327
AAA 6,125 6.625%,11/01/08 ................................................ 11/01 at 102 6,641,215
AAA 8,725 Illinois St., G.O., 6.40%, 12/15/07, AMBAC ........................ 12/01 at 102 9,372,046
Illinois St. Sales Tax Rev., Ser. O,
AAA 5,900 Zero Coupon, 6/15/07 ........................................... No Opt. Call 3,481,649
AAA 5,635 Zero Coupon, 6/15/08 ........................................... No Opt. Call 3,137,061
AAA 6,000 6.50%, 6/15/06 ................................................. 6/01 at 102 6,484,860
AAA 2,000 6.60%, 6/15/08 ................................................. 6/01 at 102 2,167,260
AAA 2,000 Will Cnty. Cmnty. Sch. Dist. Rev., 7.05%, 12/01/08, AMBAC ......... No Opt. Call 2,348,720
-----------
73,267,036
-----------
INDIANA--2.7%
AAA 9,000 Indiana Univ. Rev., Student Fee, Zero Coupon, 8/01/06, AMBAC ...... No Opt. Call 5,666,310
AAA 2,270 Noblesville West Indpt. Sch. Bldg. Corp., G.O., 7.00%,
7/01/07, MBIA ................................................. 1/01 at 102 2,484,288
AAA 5,000 Warsaw High Sch. Bldg. Corp., G.O., 6.90%, 7/01/05, MBIA .......... 7/00 at 102 5,374,900
-----------
13,525,498
-----------
KENTUCKY--3.1%
Danville Multi-City Lease Rev., Swr. & Drain Sys., MBIA,
AAA 2,015 6.60%, 3/01/02+ ................................................ No Opt. Call 2,218,354
AAA 2,160 6.65%, 3/01/02+ ................................................ No Opt. Call 2,382,480
AAA 3,750 Kentucky Dev. Fin. Auth. Rev., Sisters of Charity, 6.60%,..........
11/01/06, MBIA ................................................. 11/01 at 102 4,074,713
AAA 6,410 Kentucky St. Ppty. & Bldgs. Auth. Rev., Proj. 53, 6.625%,
10/01/07, MBIA.................................................. 10/01 at 102 6,963,503
-----------
15,639,050
-----------
LOUISIANA--6.9%
Jefferson Sales Tax Dist. Rev., FGIC,
AAA 21,000 Ser. A, 6.75%, 12/01/06 ........................................ 12/02 at 100 22,893,150
AAA 4,000 Ser. B, 6.75%, 12/01/06 ........................................ 12/02 at 100 4,352,680
AAA 3,500 Louisiana St., G.O., Ser. A, 6.50%, 5/01/07, AMBAC ................ 5/02 at 102 3,833,305
AAA 5,250 New Orleans, G.O., Ref., Zero Coupon, 9/01/06, AMBAC .............. No Opt. Call 3,309,075
-----------
34,388,210
-----------
MASSACHUSETTS--5.2%
AAA 3,670 Mansfield, G.O., 6.65%, 1/15/07, AMBAC ............................ 1/02 at 102 4,017,072
Massachusetts Bay Trans. Auth. Rev., Gen. Tran. Sys.,
AAA 20,015 Ser. A, 6.625%, 3/01/02+, MBIA ................................. No Opt. Call 21,838,366
-----------
25,855,438
-----------
See Notes to Financial Statements.
6
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
PRINCIPAL OPTION
AMOUNT CALL VALUE
RATING* (000) DESCRIPTION PROVISIONS++ (NOTE 1)
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MICHIGAN--9.0%
Detroit Swr. Disp. Rev., FGIC,
AAA $ 1,655 6.60%, 7/01/01+ ................................................ No Opt. Call $ 1,817,405
AAA 1,765 6.65%, 7/01/01+ ................................................ No Opt. Call 1,941,412
AAA 1,880 6.70%, 7/01/01+ ................................................ No Opt. Call 2,067,681
AAA 3,750 Grand Rapids Wtr. Sply. Rev., 6.625%, 1/01/08, FGIC ............... 1/01 at 102 4,025,025
Michigan Mun. Bond Auth.,
AAA 5,000 G.O., Ser. D, Zero Coupon, 5/15/06, MBIA ....................... No Opt. Call 3,195,700
AAA 1,840 Local Gov't. Loan Prog., 6.35%, 11/01/06, AMBAC ................ 11/04 at 102 2,024,754
Michigan St. Bldg. Auth. Rev.,
AAA 11,590 Ser. l, 6.75%, 10/01/07, MBIA .................................. 10/01 at 102 12,669,261
AAA 3,850 Ser. ll, 6.75%, 10/01/07, AMBAC ................................ 10/01 at 102 4,208,512
AAA 11,940 Michigan St. Hosp. Fin. Auth. Rev., Sparrow Oblig. Grp.,
6.60%, 11/15/07, MBIA........................................... 11/01 at 102 12,955,855
-----------
44,905,605
-----------
NEVADA--5.4%
AAA 6,210 Clark Cnty. Flood Ctrl., G.0., 6.40%,11/01/06, AMBAC .............. 11/01 at 101 6,669,167
Clark Cnty. Sch. Dist., G.O., Ser. A, MBIA,
AAA 11,000 6.70%, 3/01/06 ................................................. 3/01 at 101 11,831,600
AAA 1,500 6.75%, 3/01/07 ................................................. 3/01 at 101 1,613,280
Nye Cnty. Sch. Dist., G.O., BIG,
AAA 2,835 7.25%, 5/01/99+ ................................................ No Opt. Call 3,039,999
AAA 3,250 Reno Hosp. Auth. Rev., St. Mary Regl. Med. Ctr., 6.70%,
7/01/06, MBIA .................................................. 7/01 at 102 3,527,030
-----------
26,681,076
-----------
NEW HAMPSHIRE--0.5%
AAA 2,310 New Hampshire High. Ed. Auth. Rev., Elliot Hosp. of Manchester,
6.70%, 10/01/06, AMBAC ......................................... 10/02 at 102 2,507,667
-----------
NEW JERSEY--16.1%
AAA 10,500 Elizabeth, G.O., 6.60%, 8/01/06, MBIA ............................. 8/01 at 102 11,437,650
Howell Twp., Ref., G.O., FGIC,
AAA 7,715 6.70%, 1/01/06 ................................................. 1/02 at 102 8,518,671
AAA 2,925 6.75%, 1/01/07 ................................................. 1/02 at 102 3,229,288
New Jersey St. Hlth. Care Facs. Fin. Auth. Rev., Hackensack
Med. Ctr., FGIC,
AAA 12,755 6.65%, 7/01/06 ................................................. 7/01 at 102 13,858,180
AAA 3,735 6.70%, 7/01/07 ................................................. 7/01 at 102 4,050,533
AAA 1,765 New Jersey St. Hwy. Auth. Rev., Garden St. Pkwy., 6.15%,
1/01/07, AMBAC ................................................. 1/02 at 102 1,889,574
AAA 30,000 New Jersey St. Tpk. Auth. Rev., Ser. C, 6.40%, 1/01/07, AMBAC ..... 1/01 at 101.5 31,898,400
No. Jersey Dist. Wtr. Sply. Cmnty. Rev., MBIA,
AAA 2,525 Wanaque No. Proj., Ser. B, 6.50%, 11/15/06 ..................... 11/01 at 102 2,741,468
AAA 1,065 Wanaque So. Proj., 6.50%, 7/01/06 .............................. 7/01 at 102 1,172,576
AAA 1,250 Warren Cnty. Poll. Ctrl. Fin. Auth. Rev., 6.55%, 12/01/06, MBIA ... 12/02 at 102 1,372,750
-----------
80,169,090
-----------
NEW MEXICO--0.8%
AAA 3,535 Gallup Poll. Ctrl. Rev., 6.50%, 8/15/07, MBIA ..................... 8/02 at 102 3,838,763
-----------
NEW YORK--14.1%
AAA 10,000 New York City, G.O., Ser. E, 6.125%, 8/01/06, MBIA ................ No Opt. Call 10,822,600
AAA 11,100 New York City Mun. Wtr. Fin. Auth. Rev., Wtr. & Swr. Sys.,
Ser. A, FGIC,
6.15%, 6/15/07 ................................................. 6/02 at 101.5 11,830,158
AAA 1,090 6.75%, 6/15/01+ ................................................ No Opt. Call 1,190,672
AAA 1,070 6.75%, 6/15/06 ................................................. No Opt. Call 1,151,898
AAA 1,340 7.00%, 6/15/01+ ................................................ No Opt. Call 1,475,782
AAA 1,320 7.00%, 6/15/07 ................................................. 6/01 at 101 1,427,831
AAA 13,000 New York St., Ser. A, 7.00%, 8/01/07 .............................. 8/06 at 101.5 14,965,600
See Notes to Financial Statements.
7
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
PRINCIPAL OPTION
AMOUNT CALL VALUE
RATING* (000) DESCRIPTION PROVISIONS++ (NOTE 1)
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NEW YORK (CONT'D)
AAA $ 4,500 New York St. Environ. Facs. Corp., Poll. ,Ctrl. Rev., Ser. D,
6.40%, 5/15/06 ................................................. 11/04 at 102 $ 5,017,725
AAA 10,000 New York St. Hsg. Fin. Agcy. Rev., Ref., Hsg. Proj. Mtge., Ser. A,
5.50%, 11/01/06, FSA ........................................... 5/06 at 102 10,290,600
AAA 5,250 New York St. Urb. Dev. Corp. Rev., Ref. Cor., 5.625%, 1/01/07, AMBAC 1/03 at 102 5,486,460
AAA 6,000 Triborough Brdg. & Tunl. Auth. Rev., Ser. B, 6.70%, 1/01/08, FGIC . 1/01 at 102 6,498,720
-----------
70,158,046
-----------
NORTH CAROLINA--1.3%
AAA 6,000 North Carolina Eastern Mun. Pwr. Agcy. Sys. Rev., Ser. B,
6.00%, 1/01/06, CAPMAC ......................................... No Opt. Call 6,403,620
-----------
NORTH DAKOTA--0.4%
AAA 2,035 Grand Forks Hlth. Care Facs. Rev., United Hosp. Oblig. Grp.,
6.50%, 12/01/06, MBIA .......................................... 12/01 at 102 2,194,666
-----------
PENNSYLVANIA--10.5%
AAA 6,200 Beaver Cnty. Hosp. Auth., 6.625%, 7/01/06, AMBAC .................. 7/02 at 102 6,781,436
AAA 1,500 Coatesville Sch. Dist., G.O., 6.60%, 3/01/01+, AMBAC .............. No Opt. Call 1,608,240
AAA 10,000 Harrisburg Auth. Lease Rev., 6.625%, 6/01/01+, FSA ................ No Opt. Call 10,755,800
AAA 7,450 Pennsylvania St., G.O., Ser. A, 6.50%, 11/01/01+, FGIC ............ No Opt. Call 8,133,910
AAA 1,445 Pennsylvania St. Higher Ed. Rev., 6.75%, 7/01/01+, MBIA ........... No Opt. Call 1,591,870
AAA 4,500 Pennsylvania St. Tpk. Auth. Rev., Ser. O, 5.80%, 12/01/07, FGIC ... 12/02 at 102 4,737,555
AAA 1,000 Philadelphia Arpt. Rev., Ref. Sys., Ser. A, 6.00%, 6/15/06, FGIC .. No Opt. Call 1,073,900
Philadelphia Mun. Auth., Justice Lease Rev.,
AAA 1,550 Ser. A, 7.00%, 11/15/04, MBIA .................................. 11/01 at 102 1,711,216
AAA 2,370 Ser. B, 7.10%, 11/15/01+, FGIC ................................. No Opt. Call 2,654,684
Pittsburgh & Allegheny Cntys. Rev., AMBAC,
AAA 1,015 Ser. A, 6.50%, 7/15/06 ......................................... 7/01 at 100 1,078,975
AAA 900 Ser. B, 6.50%, 7/15/06 ......................................... 7/01 at 100 956,727
AAA 2,500 Schuylkill Cnty. Redev. Auth., Common Lease Rev., Ser. A,
7.00%, 6/01/07, FGIC ........................................... 6/02 at 101 2,736,325
Westmoreland Cnty., G.O., AMBAC,
AAA 7,800 6.70%, 8/01/01+ ................................................ No Opt. Call 8,444,514
-----------
52,265,152
-----------
RHODE ISLAND--2.5%
AAA 11,220 Conv. Ctr. Auth. Rev., Ser. A, 6.60%, 5/15/01+, MBIA .............. No Opt. Call 12,252,577
-----------
SOUTH CAROLINA--2.1%
AAA 4,390 Piedmont Mun. Pwr. Agy. Elec. Rev., 6.85%, 1/01/07, FGIC .......... 1/01 at 102 4,758,101
AAA 5,100 Rock Hill Util. Sys. Rev., 6.50%, 1/01/07, FGIC ................... 1/01 at 102 5,458,836
-----------
10,216,937
-----------
TENNESSEE--0.5%
AAA 2,350 Met. Nashville Arpt. Rev., Ser. C, 6.625%, 7/01/07, FGIC .......... 7/01 at 102 2,538,611
-----------
TEXAS--15.7%
Austin Util. Sys. Rev.,
AAA 2,000 6.875%, 5/15/01+, AMBAC ........................................ No Opt. Call 2,203,380
AAA 2,220 Ref., Ser. A, 6.00%, 5/15/06, MBIA ............................. No Opt. Call 2,382,704
AAA 8,500 Cypress-Fairbanks Indpt. Sch. Dist., G.O., Zero Coupon,
8/01/06, AMBAC ................................................. No Opt. Call 5,408,720
AAA 5,800 El Paso Cnty. Tax Ref., G.O., Ser. B, 6.40%, 2/15/07, MBIA ........ 2/02 at 100 6,184,888
Ft. Bend Cnty., Tax. Perm. Imprvt., G.O., FGIC,
AAA 3,375 6.60%, 9/01/02+ ................................................ No Opt. Call 3,688,166
Harris Cnty. Rev., Toll Rd. Sr. Lien, Ser. A, FGIC,
AAA 1,955 6.50%, 8/15/06 ................................................. 8/02 at 102 2,141,644
See Notes to Financial Statements.
8
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
PRINCIPAL OPTION
AMOUNT CALL VALUE
RATING* (000) DESCRIPTION PROVISIONS++ (NOTE 1)
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
TEXAS (CONT'D)
AAA $ 13,555 6.50%, 8/15/02+ ................................................ No Opt. Call $ 14,957,401
AAA 590 6.50%, 8/15/07 ................................................. 8/02 at 102 644,911
AAA 15,000 Houston Wtr. & Swr. Sys. Rev., Ser. B, 6.75%,12/01/08, FGIC ....... 12/01 at 102 16,379,718
AAA 1,900 No. Central Texas Hlth. Fac. Dev. Corp. Rev., Children's
Med. Ctr. of Dallas, 6.375%, 10/01/06, MBIA .................... 10/01 at 102 2,031,575
AAA 1,550 No. Texas Wtr. Dist., 6.40%, 6/01/07, MBIA ........................ 6/03 at 100 1,661,941
AAA 3,000 Round Rock Indpt. Sch. Dist., G.O., 6.75%, 8/15/01+, MBIA ......... No Opt. Call 3,255,570
AAA 15,000 Texas Mun. Pwr. Agy. Rev., Ref., Zero Coupon, 9/01/06, AMBAC ...... No Opt. Call 9,445,950
AAA 3,745 Texas St. Bldg. Fin. Auth. Rev., 7.00%, 2/01/01+, MBIA ............ No Opt. Call 4,056,172
AAA 3,395 Tyler Cnty. Hlth. Facs. Dev. Corp. Rev., Mother Francis Hosp.,
6.50%, 7/01/06, FGIC ........................................... 7/02 at 102 3,691,587
------------
78,134,327
------------
WASHINGTON--4.1%
AAA 1,250 Snohomish Cnty. Pub. Util. Dist., Elec. Rev., 6.55%, 1/01/07, FGIC. 1/02 at 102 1,401,500
Snohomish Cnty. Sch. Dist., G.O., MBIA,
AAA 3,835 6.70%, 12/01/06 ................................................ 12/01 at 100 4,146,632
AAA 4,145 6.75%,12/01/07 ................................................. 12/01 at 100 4,481,408
Washington St. Pub. Pwr. Sply. Sys. Rev., Nuclear Proj. #2, Ser. A,
AAA 12,875 Zero Coupon, 7/01/06, MBIA ..................................... No Opt. Call 8,154,639
AAA 2,265 6.50%, 7/01/05, FGIC ........................................... 7/01 at 102 2,428,080
------------
20,612,259
------------
WISCONSIN--0.6%
AAA 2,850 Wisconsin Hlth. & Ed. Fac. Auth., Columbia Hosp. Rev.,
6.50%, 11/15/06, MBIA .......................................... 11/01 at 102 3,081,391
------------
TOTAL LONG-TERM INVESTMENTS--143.9% (cost $659,792,603) ........... 716,905,556
SHORT-TERM INVESTMENT**--0.0%
ALABAMA--0.0%
A1+ 200 Birmingham, Alabama Medical Clinic Bd., Rev., Med.
Clinic Bd., 4.15%, 7/01/97, FRDD (cost $200,000) ............... N/A 200,000
------------
TOTAL INVESTMENTS--143.9% (cost $659,992,603); Note 3 ............. 717,105,556
Other assets in excess of liabilities--1.2% ....................... 6,178,853
Liquidation value of preferred stock--(45.1%) ..................... (225,000,000)
------------
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS--100% ................ $498,284,409
============
</TABLE>
- ----------------
+ This bond is prerefunded. See glossary for definition.
++ Option call provisions: date (month/year) and price of the earliest option
call or redemption. There may be other call provisions at varying prices at
later dates.
* Rating: using the higher of Standard & Poor's, Moody's or Fitch's rating.
** For purposes of amortized cost valuation, the maturity date of these
instruments 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.
- --------------------------------------------------------------------------------
KEY TO ABBREVIATIONS
AMBAC -- American Municipal Bond Assurance Corporation
BIG -- Bond Investors Guaranty Insurance Company
CAPMAC -- Capital Markets Assurance Corporation
C.O.P. -- Certificate of Participation
CONNIE LEE -- College Construction Loan Insurance Association
FGIC -- Financial Guaranty Insurance Company
FRDD -- Floating Rate DailyDemand
FSA -- Financial Security Assurance
G.O. -- General Obligation Bond
MBIA -- Municipal Bond Insurance Association
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
9
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK MUNICIPAL TARGET TERM TRUST INC.
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
ASSETS
Investments, at value (cost
$659,992,603) (Note 1) .................................. $717,105,556
Receivable from investments sold .......................... 13,770,000
Interest receivable ....................................... 12,048,568
Cash ...................................................... 48,892
------------
742,973,016
------------
LIABILITIES
Payable for investments purchased ......................... 18,593,380
Dividends payable--common stock ........................... 261,074
Dividends payable--preferred stock ........................ 204,811
Advisory fee payable (Note 2) ............................. 208,853
Administration fee payable (Note 2) ....................... 41,771
Other accrued expenses .................................... 378,718
------------
19,688,607
------------
NET INVESTMENT ASSETS ..................................... $723,284,409
============
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 ..................... 19,542,000
Accumulated net realized gain ........................... 55,965
Net unrealized appreciation ............................. 57,112,953
------------
Net investment assets, June 30, 1997 .................... $723,284,409
============
Net assets applicable to common
shareholders .......................................... $498,284,409
============
Net asset value per common share:
($498,284,409 divided by 45,410,639 shares of
common stock issued and outstanding) .................... $10.97
======
- --------------------------------------------------------------------------------
THE BLACKROCK MUNICIPAL TARGET TERM TRUST INC.
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
NET INVESTMENT INCOME
Income
Interest and discount earned ........................... $ 21,469,981
------------
Expenses
Investment advisory .................................... 1,252,687
Auction agent .......................................... 278,000
Administration ......................................... 250,537
Custodian .............................................. 101,000
Reports to shareholders ................................ 61,000
Directors .............................................. 35,000
Transfer agent ......................................... 27,000
Audit .................................................. 17,000
Legal .................................................. 5,000
Miscellaneous .......................................... 142,663
------------
Total expenses ........................................... 2,169,887
------------
Net investment income .................................... 19,300,094
------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (NOTE 3)
Net realized gain on investments ....................... 52,921
Net change in unrealized appreciation
on investments ....................................... (842,250)
------------
Net loss on investments ................................ (789,329)
------------
NET INCREASE IN NET INVESTMENT ASSETS
RESULTING FROM OPERATIONS .............................. $ 18,510,765
============
See Notes to Financial Statements.
10
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
THE BLACKROCK MUNICIPAL TARGET TERM TRUST INC.
STATEMENTS OF CHANGES IN NET INVESTMENT ASSETS (UNAUDITED)
- -----------------------------------------------------------------------------------------------------
SIX MONTHS YEAR ENDED
ENDED DECEMBER 31,
JUNE 30, 1997 1996
--------------------------------
INCREASE (DECREASE) IN NET INVESTMENT ASSETS
<S> <C> <C>
Operations:
Net investment income ........................................... $ 19,300,094 $ 38,330,127
Net realized gain on investments ................................ 52,921 138,402
Net change in unrealized appreciation on investments ............ (842,250) (11,034,435)
------------- -------------
Net increase in net investment assets resulting from operations 18,510,765 27,434,094
------------- -------------
Dividends and distributions:
To preferred shareholders from net investment income ............ (3,948,725) (7,850,109)
To preferred shareholders from capital gains .................... -- (30,359)
To common shareholders from net investment income ............... (13,963,637) (27,819,265)
To common shareholders from capital gains ....................... -- (108,032)
------------- -------------
Total dividends and distributions ............................. (17,912,362) (35,807,765)
------------- -------------
Total increase (decrease) ................................... 598,403 (8,373,671)
------------- -------------
NET INVESTMENT ASSETS
Beginning of period ............................................... 722,686,006 731,059,677
------------- -------------
End of period ..................................................... $ 723,284,409 $ 722,686,006
============= =============
</TABLE>
See Notes to Financial Statements.
11
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
THE BLACKROCK MUNICIPAL TARGET TERM TRUST INC.
FINANCIAL HIGHLIGHTS (UNAUDITED)
- ---------------------------------------------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, -----------------------------------------------------
PER SHARE OPERATING PERFORMANCE: 1997 1996 1995 1994 1993 1992
-------- ------- ----- ------- ------- ------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ........... $ 10.96 $ 11.14 $ 9.98 $ 11.30 $ 10.04 $ 9.56
------- ------- ------- ------- ------- -------
Net investment income ........................ .43 .84 .87 .83 .82 .82
Net realized and unrealized gain (loss) on
investments ................................ (.02) (.24) 1.14 (1.39) 1.17 .42
------- ------- ------- ------- ------- -------
Net increase (decrease) from investment
operations ................................. .41 .60 2.01 (.56) 1.99 1.24
------- ------- ------- ------- ------- -------
Dividends and distributions:
Dividends from net investment income to:
Preferred shareholders ..................... (.09) (.17) (.19) (.14) (.12) (.15)
Common shareholders ........................ (.31) (.61) (.62) (.62) (.61) (.61)
Distributions from capital gains to:
Preferred shareholders ..................... -- * (.01) -- -- --
Common shareholders ........................ -- * (.03) -- -- --
------- ------- ------- ------- ------- -------
Total dividends and distributions .......... (.40) (.78) (.85) (.76) (.73) (.76)
------- ------- ------- ------- ------- -------
Net asset value, end of period** ............... $ 10.97 $ 10.96 $ 11.14 $ 9.98 $ 11.30 $ 10.04
======= ======= ======= ======= ======= =======
Market value, end of period** .................. $ 10.50 $ 10.25 $10.125 $ 8.875 $10.375 $ 10.00
======= ======= ======= ======= ======= =======
TOTAL INVESTMENT RETURN+: ...................... 5.48% 7.43% 21.67% (8.89%) 10.01% 10.51%
RATIOS TO AVERAGE NET ASSETS
OF COMMON SHAREHOLDERS++:
Expenses ....................................... .88%+++ .91% .90% .94% .87% .91%
Net investment income before preferred
stock dividends .............................. 7.84%+++ 7.75% 8.06% 7.91% 7.61% 8.43%
Preferred stock dividends ...................... 1.61%+++ 1.59% 1.83% 1.38% 1.11% 1.51%
Net investment income available to
common stockholders .......................... 6.23%+++ 6.16% 6.23% 6.53% 6.50% 6.92%
SUPPLEMENTAL DATA:
Average net assets of common shareholders
(in thousands) ............................... $495,848 $494,667 $487,923 $475,529 $492,138 $441,368
Portfolio turnover rate ........................ 9% 5% 9% 21% 1% 35%
Net assets of common shareholders,
end of period(in thousands) .................. $498,284 $497,686 $506,060 $453,407 $513,339 $455,954
Asset coverage per share of preferred
stock, end of period# ........................ $ 80,365 $ 80,298 $ 81,243 $150,783 $164,075 $151,323
Preferred stock outstanding (in thousands) ..... $225,000 $225,000 $225,000 $225,000 $225,000 $225,000
</TABLE>
- ----------
* Actual amount paid to preferred shareholders was $0.0007 and to common
shareholders was $0.0024.
** Net asset value and market value are published in THE WALL STREET JOURNAL
each Monday.
# A stock split occured on July 24, 1995 (Note 4).
+ 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.
++ Ratios calculated on the basis of income and expenses applicable to both
the common and preferred shares, and preferred stock dividends, relative to
the average net assets of common shareholders.
+++ Annualized.
The information above represents the unaudited operating performance data
for a share of common stock outstanding, total investment return, ratios to
average net assets and other supplemental data, for each of the years
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.
See Notes to Financial Statements.
12
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK MUNICIPAL TARGET TERM TRUST INC.
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NOTE 1. ACCOUNTING The BlackRock Municipal Target Term Trust Inc.
POLICIES (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 60 days or less are valued at amortized
cost, if their term to maturity from date of purchase is 60 days or less.
Short-term securities with a term to maturity greater than 60 days from the date
of purchase are valued at current market quotations until maturity.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on the trade date. Realized 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 original issue 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. For this
reason and because substantially all of the Trust's gross income consists of
tax-exempt interest, 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.
ESTIMATES: The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
NOTE 2. AGREEMENTS The Trust has an Investment Advisory Agreement
with BlackRock Financial Management, Inc. (the
"Adviser") a wholly-owned corporate subsidiary of PNC Asset Management Group,
Inc., the holding company for PNC's asset management business and an
Administration Agreement with Prudential Investments Fund Management LLC
("PIFM"), 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 PIFM 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. PIFM pays occupancy and certain clerical
and accounting costs of the Trust. The Trust bears all other costs and expenses.
13
<PAGE>
NOTE 3. PORTFOLIO Purchases and sales of investment securities,
SECURITIES other than short-term investments for the six
months ended June 30, 1997 aggregated $66,607,020
and $61,898,172, respectively.
The federal income tax basis of the Trust's investments at June 30, 1997 was
substantially the same as for financial reporting purposes and, accordingly, net
unrealized appreciation for federal income tax purposes was $57,112,953 (gross
unrealized appreciation $57,119,683 gross unrealized depreciation $6,730).
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, 1997, the Adviser owned 10,639 shares. As of June
30, 1997, there were 9,000 preferred shares outstanding as follows: Series
W7-3,000, Series F7-3,000 and Series W28-3,000.
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 had a
liquidation value of $50,000 per share plus any accumulated but unpaid
dividends. On May 16, 1995 shareholders approved a proposal to split each share
of preferred stock into two shares and simultaneously reduce each share's
liquidation preference from $50,000 to $25,000 plus any accumulated but unpaid
dividends. The stock split occurred on July 24, 1995.
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 2.90% to 4.375% during the six months
ended June 30, 1997.
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 $25,000 per share plus any accumulated or
unpaid dividends whether or not declared. The Preferred Stock is also subject to
mandatory redemption at $25,000 per share plus any accumulated or unpaid
dividends, whether or not declared if certain requirements relating to the
composition of the assets and liabilities of 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
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.
NOTE 5. DIVIDENDS Subsequent to June 30, 1997, the Board of
Directors of the Trust declared dividends from
undistributed earnings of $0.05125 per common share payable July 31, 1997 to
shareholders of record on July 15, 1997.
For the period July 1, 1997 to July 31, 1997 dividends and distributions
declared on preferred shares totalled $579,024 in aggregate for the three
outstanding preferred share series.
14
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK MUNICIPAL TARGET TERM TRUST INC.
DIVIDENDREINVESTMENTPLAN
- --------------------------------------------------------------------------------
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 and 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.
- --------------------------------------------------------------------------------
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.
The Annual Meeting of Trust Shareholders was held April 15, 1997 to vote
on the following matters:
(1) To elect two Directors to serve as follows:
DIRECTOR CLASS TERM EXPIRING
------- ----- ----- --------
Ralph L. Schlosstein ................. II 3 years 2000
Walter F. Mondale .................... II 3 years 2000
Directors whose term of office continues beyond this meeting are Andrew
F. Brimmer, Richard E. Cavanagh, Kent Dixon, Frank J. Fabozzi, Laurence
D. Fink, James Grosfeld, and James Clayburn La Force, Jr.
(2) To ratify the selection of Deloitte & Touche LLP as independent public
accountants of the Trust for the fiscal year ending December 31, 1997.
Shareholders elected the two Directors and ratified the selection of
Deloitte & Touche LLP. The results of the voting was as follows:
<TABLE>
VOTES FOR VOTES AGAINST ABSTENTIONS
---------- ------------- -----------
<S> <C> <C> <C>
Ralph L. Schlosstein ................. 36,751,978 0 338,798
Walter F. Mondale .................... 36,611,552 0 479,225
Ratification of Deloitte & Touche LLP. 36,603,603 155,186 331,987
</TABLE>
15
<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
approximately $50 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 traded on the New York or American
Stock Exchanges, several open-end funds and over 125 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., one of the nations
largest banking organizations.
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
Trust's assets are invested in securities which have maturities that are similar
to the maturity date of the Trust. 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 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 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.
16
<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 advisor. 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 Trust through the Trust's transfer agent, State Street
Bank and 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 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 Trust 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.
17
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK MUNICIPAL TARGET TERM TRUST INC.
GLOSSARY
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
CLOSED-END FUND: Investment vehicle which initially offers a fixed number of shares and
trades on a stock exchange. The fund invests in a portfolio of securities in
accordance with its stated investment objectives and policies.
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 to common shareholders on a monthly basis.
DIVIDEND REINVESTMENT: Shareholders may have all dividends and distributions of capital gains
automatically reinvested into additional shares of the Trust.
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.
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
BLACKROCK FINANCIAL MANAGEMENT, INC.
SUMMARY OF CLOSED-END FUNDS
- -------------------------------------------------------------------------------------
TAXABLE TRUSTS
- -------------------------------------------------------------------------------------
STOCK MATURITY
PERPETUAL TRUSTS 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
TAX-EXEMPT TRUSTS
- -------------------------------------------------------------------------------------
STOCK MATURITY
PERPETUAL TRUSTS SYMBOL DATE
------ ------
The BlackRock Investment Quality Municipal Trust Inc. BKN N/A
The BlackRock California Investment Quality Municipal Trust Inc. RAA N/A
The BlackRock Florida Investment Quality Municipal Trust RFA N/A
The BlackRock New Jersey Investment Quality Municipal Trust Inc. RNJ N/A
The BlackRock New York Investment Quality Municipal Trust Inc. RNY N/A
TERM TRUSTS
The BlackRock Municipal Target Term Trust Inc. BMN 12/06
The BlackRock Insured Municipal 2008 Term Trust Inc. BRM 12/08
The BlackRock California Insured Municipal 2008 Term Trust Inc. BFC 12/08
The BlackRock Florida Insured Municipal 2008 Term Trust BRF 12/08
The BlackRock New York Insured Municipal 2008 Term Trust Inc. BLN 12/08
The BlackRock Insured Municipal Term Trust Inc. BMT 12/10
</TABLE>
IF YOU WOULD LIKE FURTHER INFORMATION
PLEASE CALL BLACKROCK AT (800) 227-7BFM (7236)
OR CONSULT WITH YOUR FINANCIAL ADVISOR.
19
<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
Keith T. Anderson, VICE PRESIDENT
Michael C. Huebsch, VICE PRESIDENT
Robert S. Kapito, VICE PRESIDENT
Kevin Klingert, VICE PRESIDENT/TAX
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 3
100 Mulberry Street
Newark, NJ07102-4077
CUSTODIAN AND TRANSFER AGENT
State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171 (800) 699-1BFM
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 LLP
919 Third Avenue
New York, NY 10022
The accompanying financial statements
as of June 30, 1997, 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 Investments Fund Management LLC
Gateway Center 3
100 Mulberry Street
Newark, NJ07102-4077
092476-10-5
092476-20-4
092476-30-3
092476-40-2
[Logo] Printed on recycled paper
THE BLACKROCK
MUNICIPAL TARGET
TERM TRUST INC.
================================================================================
SEMI-ANNUAL REPORT
JUNE 30, 1997
