BLACKROCK MUNICIPAL TARGET TERM TRUST INC, N-30D, 1998-02-27

BLACKROCK MUNICIPAL TARGET TERM TRUST INC
N-30D, 1998-02-27

Previous: LAWYERS TITLE CORP, S-3/A, 1998-02-27

Next: AMERICA SERVICE GROUP INC /DE, 8-K, 1998-02-27

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

January 31, 1998

Dear Trust Shareholder:

U.S. fixed income investors have been rewarded with solid total returns
over the past twelve months ended December 31, 1997, as low inflation despite
strong economic growth drove Treasury yields lower.

The economy has shown some signs of slowing, which BlackRock expects may
persist as recessions in the emerging Asian economies and Japan will moderate
U.S. growth. We do not see immediate signs of inflationary pressure nor do we
anticipate an imminent change in monetary policy by the Federal Reserve. Our
longer-term outlook for the bond market remains optimistic, based on the
fundamentally favorable backdrop of slower economic growth, low inflation and
declining Treasury borrowing.

There are exciting developments occurring at BlackRock that we would like
to share with you. As you may know, BlackRock was acquired by PNC Bank, N.A. in
1995. In early 1998 the five investment management firms that comprise the PNC
Asset Management Group were consolidated under the BlackRock umbrella. This will
result in BlackRock Inc. becoming a $100 billion money management firm ranking
it among the 25 largest in the country. We look forward to using our global
investment management expertise to present exciting investment opportunities to
closed-end fund shareholders in the future.

This report contains detailed market and portfolio strategy commentary by
your Trust's managers in addition to the Trust's audited financial statements
and a detailed portfolio listing. We thank you for your continued investment in
the Trust and wish you a successful new year.

Sincerely,

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

<PAGE>

January 31, 1998

Dear Shareholder:

We are pleased to present the annual report for The BlackRock Municipal
Target Term Trust Inc. ("the Trust") for the year ended December 31, 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 past year:

- --------------------------------------------------------------------------------
12/31/97 12/31/96 CHANGE HIGH LOW
- --------------------------------------------------------------------------------
STOCK PRICE $11.00 $10.25 7.32% $11.00 $10.125
- --------------------------------------------------------------------------------
NET ASSET VALUE (NAV) $11.22 $10.96 2.37% $11.07 $10.73
- --------------------------------------------------------------------------------

THE FIXED INCOME MARKETS

The U.S. economy exhibited strong growth and low inflation during 1997,
pushing bond yields below 6% for the first time since early 1996. Fueled by
increased consumer spending and low unemployment, growth was robust. The primary
inflation indicators, consumer and producer prices, remained dormant throughout
the period and unemployment rate remained low. After increasing the Fed Funds
Rate to 5.50% in March, the Federal Reserve left the rate unchanged for the
remainder of the year, as the combination of slowing domestic growth and the
economic turmoil in Asia threatened to exert deflationary pressures on the U.S.
economy.

The positive momentum has continued into the early days of 1998 based, in
part, on the possibility of early elimination of the budget deficit and on
comments by Fed Chairman Greenspan that deflation was an issue. New home sales
recently hit a new cyclical peak, the employment picture remains very strong and
consumer confidence and spending remain high. Despite the strong growth, current
and future inflation both appear to be controlled.

Municipal bonds, as measured by the LEHMAN MUNICIPAL BOND INDEX, posted a
9.20% total return for the year, versus 9.68% for the taxable bond market
(measured by the LEHMAN AGGREGATE INDEX). The substantial decline in municipal
interest rates resulted in 1997 being the third largest issuance year on record
(a 19% increase over 1996), which negatively impacted municipal bond
performance. After keeping pace with the Treasury market rally in the second
quarter, municipals cheapened in relation to Treasuries during the latter half
of the year due to reduced participation by retail investors at lower interest
rate levels and increased supply.

Looking forward, we expect issuance of municipal securities in 1998 to be
similar to 1997 levels, with an increase in new supply being offset by a
decrease in refunding supply. BlackRock remains focused on high quality
municipal securities, because the yield advantage of purchasing lower rated
securities remains marginal. The strong state of the economy is expected to
continue, providing strong fundamentals for municipal issuers. We expect to see
more discussions about tax reform towards the end of the first quarter of 1998,
which may create buying opportunities.

<PAGE>

THE TRUST'S PORTFOLIO AND INVESTMENT STRATEGY

The Trust's portfolio is actively managed to diversify exposure across
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. Portfolio trading activity was very low during 1997, as a
majority of the bonds in the portfolio are trading at prices which, if sold,
would result in a taxable capital gain. Additionally, as these bonds were
purchased in higher interest rate environments. Were they to be sold, the Trust
would be forced to reinvest the proceeds in lower yielding securities. Both of
these factors led us to decide that the most prudent investment strategy for
1997 was to maintain the current portfolio structure.

Additionally, the Trust employs leverage to enhance its income by
borrowing at short-term municipal rates and investing the proceeds in longer
maturity issues that have higher yields. The degree to which the Trust can
benefit from its use of leverage may affect its ability to pay high monthly
income. The Trust has experienced favorable short-term municipal rates over the
past year. The Federal Reserve's decision to raise the Fed funds target rate in
March 1997 did not significantly impact the short end of the municipal yield
curve, allowing the rates the Trust pays to preferred shareholders (the Trust's
leverage cost) to remain affordable.

The following charts compare the Trust's current and December 31, 1996
asset composition:
- --------------------------------------------------------------------------------
THE BLACKROCK MUNICIPAL TARGET TERM TRUST INC.
- --------------------------------------------------------------------------------
SECTOR DECEMBER 31, 1997 DECEMBER 31, 1996
- --------------------------------------------------------------------------------
City, County and State 21% 22%
- --------------------------------------------------------------------------------
Hospital 15% 15%
- --------------------------------------------------------------------------------
Tax Revenue 14% 13%
- --------------------------------------------------------------------------------
Transportation 14% 14%
- --------------------------------------------------------------------------------
Water & Sewer 11% 10%
- --------------------------------------------------------------------------------
Lease Revenue 8% 7%
- --------------------------------------------------------------------------------
Utility/Power 8% 8%
- --------------------------------------------------------------------------------
Education 5% 4%
- --------------------------------------------------------------------------------
Other 3% 3%
- --------------------------------------------------------------------------------
Pollution Control/Resource Recovery 1% 2%
- --------------------------------------------------------------------------------
Building -- 2%
- --------------------------------------------------------------------------------

<PAGE>

We appreciate your continued confidence and look forward to managing The
BlackRock Municipal Target Term Trust Inc. in the coming years to realize its
investment objectives. Please feel free to contact the mutual fund specialists
at BlackRock's marketing center at (800) 227-7BFM (7236) if you have any
questions that weren't answered in this report.

Additionally, you can reach us via e-mail at [email protected].

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 12/31/97: $11.00
- --------------------------------------------------------------------------------
Net Asset Value as of 12/31/97: $11.22
- --------------------------------------------------------------------------------
Yield on Closing Stock Price as of 12/31/97 ($11.00)1: 5.59%
- --------------------------------------------------------------------------------
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.

<PAGE>

<TABLE>
<CAPTION>
=====================================================================================================================
THE BLACKROCK MUNICIPAL TARGET TERM TRUST INC.
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1997
- ---------------------------------------------------------------------------------------------------------------------
OPTION
PRINCIPAL CALL
RATING* AMOUNT PROVISIONS++ VALUE
(UNAUDITED) (000) DESCRIPTION (UNAUDITED) (NOTE 1)
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
LONG-TERM INVESTMENTS--142.0%
ALABAMA--1.0%
Hoover Brd. of Ed. Spl. Tax. Wts., G.O., AMBAC,
AAA $1,700 6.50%, 2/01/01+ ............................................. No Opt. Call $ 1,846,506
AAA 1,815 6.60%, 2/01/01+ ............................................. No Opt. Call 1,976,589
AAA 1,025 6.625%, 2/01/01+ ............................................ No Opt. Call 1,116,994
-----------
4,940,089
-----------
ALASKA--3.9%
AAA 7,500 Anchorage Elec. Util. Rev., 7.125%, 6/01/06, MBIA .............. 6/99 at 102 7,957,050
AAA 4,845 Fairbanks Mun. Util. Auth. Rev., Ser. A,
7.10%, 1/01/05, AMBAC ....................................... 1/99 at 102 5,081,436
AAA 9,000 No. Slope Boro., Ser. B, Zero Coupon, 6/30/04, FSA ............. No Opt. Call 6,733,080
-----------
19,771,566
-----------
ARIZONA--1.1%
AAA 5,010 Tucson Bus. Dev. Fin. Corp. Lease Rev.,
6.25%, 7/01/06, FGIC ........................................ 7/02 at 102 5,489,858
-----------
CALIFORNIA--4.9%
AAA 6,000 California St., G.O., 6.30%, 9/01/06, AMBAC .................... No Opt. Call 6,851,520
AAA 1,910 California St., Pub. Wrks. Rev., Ser. A,
6.20%, 12/01/06, AMBAC ...................................... 12/02 at 102 2,101,860
AAA 4,000 Glendale Hosp. Rev., Adventist Hlth. Ctr., Ser. A,
6.50%, 3/01/07, MBIA ........................................ 3/01 at 102
-----------
4,326,520
-----------
Los Angeles Wst. Wtr. Sys. Rev., MBIA,
AAA 5,570 5.625%, 6/01/07 ............................................. 6/03 at 102 5,975,774
AAA 3,320 Ser. D, 6.60%, 12/01/00 ..................................... No Opt. Call 3,618,169
AAA 3,500 San Joaquin Hills Tran. Agcy. Toll Rd. Rev., Ser. A,
Zero Coupon, 1/15/07, MBIA .................................. No Opt. Call 2,317,350
-----------
25,191,193
-----------
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 3,720,583
AAA 1,875 6.60%, 11/15/06 ............................................. 11/01 at 101 2,048,888
AAA 3,865 6.625%, 11/15/07 ............................................ 11/01 at 101 4,226,841
-----------
9,996,312
-----------
DISTRICT OF COLUMBIA--1.8%
AAA 8,250 District of Columbia, G.O., Ser. B,
5.90%, 6/01/06, MBIA ........................................ 6/04 at 102 8,961,150
-----------
FLORIDA--12.1%
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 7,580,510
AAA 6,975 6.75%, 7/01/01+, AMBAC ...................................... No Opt. Call 7,690,774
AAA 2,190 Florida St. Sunshine Skyway Rev., 6.60%, 7/01/07, MBIA ......... 7/01 at 101 2,385,896
Greater Orlando Aviation Auth., Arpt. Facs.
Rev., Ser. B, FGIC,
AAA 4,760 6.55%, 10/01/06 ............................................. 9/04 at 102 5,320,823
AAA 5,070 6.55%, 10/01/07 ............................................. 10/02 at 102 5,667,347
AAA 3,155 Gulf Breeze, Local Gov't., Ln. Pkg. Rev.,
7.70%, 12/01/15, FGIC ....................................... 12/99 at 102 3,354,112
AAA 2,650 Jacksonville Hlth. Facs. Auth. Rev., Mem. Med. Ctr., Ser. A,
6.625%, 5/01/01+, MBIA....................................... No Opt. Call 2,906,149
AAA 7,500 Jacksonville Hosp. Rev., Univ. Med. Ctr. Inc. Proj.,
6.50%, 2/01/07, CONNIE LEE .................................. 2/02 at 102 8,196,975
AAA 2,000 No. Broward Hosp. Rev., 6.50%, 1/01/02+, MBIA .................. No. Opt. Call 2,201,100
AAA 10,645 Orange Cnty., Tourist Dev. Tax Rev., Ser. A,
6.375%, 10/01/06, AMBAC ..................................... 10/02 at 102 11,795,512
AAA 2,570 Tampa Auth. Rev., St. Joseph Hlth. Ctr.,
6.70%, 12/01/07, MBIA ....................................... 12/01 at 102 2,838,694
AAA 1,600 Tampa Util. Tax & Spec. Rev., 6.80%, 10/01/06, AMBAC ........... 10/01 at 102 1,766,192
-----------
61,704,084
-----------
</TABLE>

See Notes to Financial Statements.

- ---------------------------------------------------------------------------------------------------------------------
OPTION
PRINCIPAL CALL
RATING* AMOUNT PROVISIONS++ VALUE
(UNAUDITED) (000) DESCRIPTION (UNAUDITED) (NOTE 1)
- ---------------------------------------------------------------------------------------------------------------------
<S> <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 $ 2,210,074
-----------
ILLINOIS--14.7%
AAA 4,930 Alton Hlth. Facs. Rev., Rfdg. & Impt.,
Christian Hlth. Ctr., 7.00%, 2/15/01+, FGIC ................. No Opt. Call 5,429,902
Chicago Cent. Pub. Library, G.O., AMBAC,
AAA 1,800 Ser. A, 6.75%, 1/01/07 ...................................... 4/02 at 102 1,996,038
AAA 1,600 Ser. C, 6.75%, 1/01/07 ...................................... 4/02 at 102 1,774,256
AAA 5,555 Cook Cnty., Ser. A, 6.40%, 11/15/02+, MBIA ..................... No Opt. Call 6,164,495
AAA 1,775 Cook Cnty. Cmnty. Sch. Dist., G.O., Ser. A,
6.375%, 1/01/02+, FGIC ...................................... No Opt. Call 1,911,941
Illinois Hlth. Facs. Auth. Rev.,
AAA 3,300 Elmhurst Mem. Hosp., 6.60%, 1/01/07, FGIC ................... 1/02 at 102 3,616,965
AAA 14,585 Sisters Svcs., Inc., Ser. C, 6.625%, 6/01/06, MBIA .......... 6/02 at 102 16,148,658
Illinois Regl. Trans. Auth. Rev., Ser. A, FGIC,
AAA 2,780 6.55%, 11/01/06 ............................................. 11/01 at 102 3,060,724
AAA 6,125 6.625%, 11/01/01+ ........................................... No Opt. Call 6,759,611
AAA 8,725 Illinois St., G.O., 6.40%, 12/15/07, AMBAC ..................... 12/01 at 102 9,510,076
Illinois St. Sales Tax Rev., Ser. O,
AAA 5,900 Zero Coupon, 6/15/07 ........................................ No Opt. Call 3,794,113
AAA 5,635 Zero Coupon, 6/15/08 ........................................ No Opt. Call 3,426,925
AAA 6,000 6.50%, 6/15/06 .............................................. 6/01 at 102 6,543,720
AAA 2,000 6.60%, 6/15/08 .............................................. 6/01 at 102 2,187,600
AAA 2,000 Will Cnty. Cmnty. Sch. Dist. Rev., 7.05%, 12/01/08, AMBAC ...... No Opt. Call 2,442,740
-----------
74,767,764
-----------
INDIANA--2.7%
AAA 9,000 Indiana Univ. Rev., Student Fee, Zero Coupon,
8/01/06, AMBAC .............................................. No Opt. Call 6,088,950
Aaa 2,270 Noblesville West Indpt. Sch. Bldg. Corp., G.O.,
7.00%, 7/01/07, MBIA ........................................ 1/01 at 102 2,495,479
AAA 5,000 Warsaw High Sch. Bldg. Corp., G.O., 6.90%, 7/01/05, MBIA ....... 7/00 at 102 5,398,250
-----------
13,982,679
-----------
KENTUCKY--3.1%
Danville Multi-City Lease Rev., Swr. & Drain Sys., MBIA,
AAA 2,015 6.60%, 3/01/02+ ............................................. No Opt. Call 2,227,220
AAA 2,160 6.65%, 3/01/02+ ............................................. No Opt. Call 2,391,574
AAA 3,750 Kentucky Dev. Fin. Auth. Rev., Sisters of Charity,
6.60%, 11/01/06, MBIA ....................................... 11/01 at 102 4,118,437
AAA 6,410 Kentucky St. Ppty. & Bldgs. Auth. Rev., Proj. 53,
6.625%, 10/01/07, MBIA ...................................... 10/01 at 102 7,060,871
-----------
15,798,102
-----------
LOUISIANA--6.9%
Jefferson Sales Tax Dist. Rev., FGIC,
AAA 21,000 Ser. A, 6.75%, 12/01/06 ..................................... 12/02 at 100 23,264,220
AAA 4,000 Ser. B, 6.75%, 12/01/06 ..................................... 12/02 at 100 4,431,280
AAA 3,500 Louisiana St., G.O., Ser. A, 6.50%, 5/01/07, AMBAC ............. 5/02 at 102 3,861,480
AAA 5,250 New Orleans, G.O., Ref., Zero Coupon, 9/01/06, AMBAC ........... No Opt. Call 3,553,515
-----------
35,110,495
-----------
MASSACHUSETTS--5.1%
AAA 3,670 Mansfield, G.O., 6.65%, 1/15/02+, AMBAC ........................ No Opt. Call 4,061,809
Massachusetts Bay Trans. Auth. Rev., Gen. Tran. Sys.,
AAA 20,015 Ser. A, MBIA, 6.625%, 3/01/02+ .............................. No Opt. Call 21,877,396
-----------
25,939,205
-----------
</TABLE>
See Notes to Financial Statements.

<PAGE>

- ---------------------------------------------------------------------------------------------------------------------
OPTION
PRINCIPAL CALL
RATING* AMOUNT PROVISIONS++ VALUE
(UNAUDITED) (000) DESCRIPTION (UNAUDITED) (NOTE 1)
- ---------------------------------------------------------------------------------------------------------------------
MICHIGAN--8.9%
Detroit Swr. Disp. Rev., FGIC,
<S> <C> <C> <C>
AAA $ 1,655 6.60%, 7/01/01+ ............................................. No Opt. Call $ 1,819,689
AAA 1,765 6.65%, 7/01/01+ ............................................. No Opt. Call 1,943,477
AAA 1,880 6.70%, 7/01/01+ ............................................. No Opt. Call 2,069,899
AAA 3,750 Grand Rapids Wtr. Sply. Rev., 6.625%, 1/01/08, FGIC ............ 1/01 at 102 4,067,812
Michigan Mun. Bond Auth.,
AAA 5,000 G.O., Ser. D, Zero Coupon, 5/15/06, MBIA .................... No Opt. Call 3,443,450
AAA 1,840 Local Gov't. Loan Prog., 6.35%, 11/01/06, AMBAC ............. 11/04 at 102 2,084,812
Michigan St. Bldg. Auth. Rev.,
AAA 11,590 Ser. I, 6.75%, 10/01/07, MBIA ............................... 10/01 at 102 12,837,779
AAA 3,850 Ser. II, 6.75%, 10/01/07, AMBAC ............................. 10/01 at 102 4,264,491
AAA 11,940 Michigan St. Hosp. Fin. Auth. Rev., Sparrow Oblig. Grp.,
6.60%, 11/15/07, MBIA ....................................... 11/01 at 102 13,104,031
-----------
45,635,440
-----------
NEVADA--5.3%
AAA 6,210 Clark Cnty. Flood Ctrl., G.O., 6.40%, 11/01/06, AMBAC .......... 11/01 at 101 6,751,450
Clark Cnty. Sch. Dist., G.O., Ser. A, MBIA,
AAA 11,000 6.70%, 3/01/06 .............................................. 3/01 at 101 11,913,330
AAA 1,500 6.75%, 3/01/07 .............................................. 3/01 at 101 1,623,975
AAA 2,835 Nye Cnty. Sch. Dist., G.O., BIG,
7.25%, 5/01/99+ ............................................. No Opt. Call 3,005,837
AAA 3,250 Reno Hosp. Auth. Rev., St. Mary Regl. Med. Ctr.,
6.70%, 7/01/06, MBIA ........................................ 7/01 at 102 3,566,030
-----------
26,860,622
-----------
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 2,533,631
-----------
NEW JERSEY--15.9%
AAA 10,500 Elizabeth, G.O., 6.60%, 8/01/06, MBIA .......................... 8/01 at 102 11,537,295
Howell Twp., Ref., G.O., FGIC,
AAA 7,715 6.70%, 1/01/06 .............................................. 1/02 at 102 8,601,145
AAA 2,925 6.75%, 1/01/07 .............................................. 1/02 at 102 3,259,415
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 13,992,235
AAA 3,735 6.70%, 7/01/07 .............................................. 7/01 at 102 4,090,535
AAA 1,765 New Jersey St. Hwy. Auth. Rev., Garden St. Pkwy.,
6.15%, 1/01/07, AMBAC ....................................... 1/02 at 102 1,915,254
AAA 30,000 New Jersey St. Tpk. Auth. Rev., Ser. C,
6.40%, 1/01/07, AMBAC ....................................... 1/01 at 101.5 32,169,900
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 2,772,728
AAA 1,065 Wanaque So. Proj., 6.50%, 7/01/06 ........................... 7/01 at 102 1,195,750
AAA 1,250 Warren Cnty. Poll. Ctrl. Fin. Auth. Rev.,
6.55%, 12/01/06, MBIA ....................................... 12/02 at 102 1,387,688
-----------
80,921,945
-----------
NEW MEXICO--0.8%
AAA 3,535 Gallup Poll. Ctrl. Rev., 6.50%, 8/15/07, MBIA .................. 8/02 at 102 3,901,085
-----------
NEW YORK--14.1%
AAA 11,100 New York City Mun. Wtr. Fin. Auth. Rev., Wtr. & Swr.
Sys., Ser. A 6.15%, 6/15/07, FGIC .......................... 6/02 at 101.5 11,989,554
New York City Mun. Wtr. Fin. Auth. Wtr. & Swr. Sys. Rev.,
Ser. A, FGIC,
AAA 1,090 6.75%, 6/15/01+ ............................................. No. Opt. Call 1,193,114
AAA 1,070 6.75%, 6/15/06 .............................................. 6/01 at 101 1,159,741
AAA 1,340 7.00%, 6/15/01+ ............................................. No. Opt. Call 1,477,430
AAA 1,320 7.00%, 6/15/07 .............................................. 6/01 at 101 1,436,728

</TABLE>

See Notes to Financial Statements.

<PAGE>

- ---------------------------------------------------------------------------------------------------------------------
OPTION
PRINCIPAL CALL
RATING* AMOUNT PROVISIONS++ VALUE
(UNAUDITED) (000) DESCRIPTION (UNAUDITED) (NOTE 1)
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NEW YORK (CONT'D)
AAA $ 10,000 New York City, G.O., Ser. E, 6.125%, 8/01/06, MBIA....................No Opt. Call $11,230,300
AAA 13,000 New York St., Ser. A, 7.00%, 8/01/07...................................8/06 at 101.5 15,477,930
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 10,673,100
AAA 4,500 New York St. Environ. Facs. Corp., Poll. Ctrl. Rev.,
Ser. D, 6.40%, 5/15/06.............................................11/04 at 102 5,134,770
AAA 5,250 New York St. Urb. Dev. Corp. Rev., Ref. Cor.
5.625%, 1/01/07, AMBAC..............................................1/03 at 102 5,608,155
AAA 6,000 Triborough Brdg. & Tunl. Auth. Rev., Ser. B,
6.70%, 1/01/08, FGIC................................................1/01 at 102 6,529,860
-----------
71,910,682
-----------
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 6,607,560
-----------
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 2,224,011
-----------
PENNSYLVANIA--10.2%
AAA 6,200 Beaver Cnty. Hosp. Auth., 6.625%, 7/01/06, AMBAC.......................7/02 at 102 6,874,374
AAA 1,500 Coatesville Sch. Dist., G.O., 6.60%, 3/01/01+, AMBAC..................No Opt. Call 1,611,000
AAA 10,000 Harrisburg Auth. Lease Rev., 6.625%, 6/01/01+, FSA....................No Opt. Call 10,880,900
AAA 7,450 Pennsylvania St., G.O., Ser. A, 6.50%, 11/01/01+, FGIC................No Opt. Call 8,157,452
AAA 1,445 Pennsylvania St. Higher Ed. Rev., 6.75%, 7/01/01+, MBIA...............No Opt. Call 1,593,286
AAA 4,500 Pennsylvania St. Tpk. Auth. Rev., Ser. O,
5.80%, 12/01/07, FGIC..............................................12/02 at 102 4,841,955
Philadelphia Mun. Auth., Justice Lease Rev.,
AAA 1,550 Ser. A, 7.00%, 11/15/04, MBIA......................................11/01 at 102 1,722,934
AAA 2,370 Ser. B, 7.10%, 11/15/01+, FGIC.....................................No Opt. Call 2,657,173
Pittsburgh & Allegheny Cntys. Rev., AMBAC,
AAA 1,015 Ser. A, 6.50%, 7/15/06..............................................7/01 at 100 1,086,953
AAA 900 Ser. B, 6.50%, 7/15/06................................... 7/01 at 100 963,801
AAA 3,000 Schuylkill Cnty. Redev. Auth. Common Lease Rev., Ser. A,
7.00%, 6/01/07, FGIC................................................6/02 at 101 3,304,590
AAA 7,800 Westmoreland Cnty., G.O., AMBAC,
6.70%, 8/01/01+....................................................No Opt. Call 8,453,250
-----------
52,147,668
-----------
RHODE ISLAND--2.4%
AAA 11,220 Conv. Ctr. Auth. Rev., Ser. A, 6.60%, 5/15/01+, MBIA..................No Opt. Call 12,286,685
-----------
SOUTH CAROLINA--2.0%
AAA 4,390 Piedmont Mun. Pwr. Agy. Elec. Rev., 6.85%, 1/01/07, FGIC...............1/01 at 102 4,802,484
AAA 5,100 Rock Hill Util. Sys. Rev., 6.50%, 1/01/07, FGIC........................1/01 at 102 5,514,528
-----------
10,317,012
-----------
TENNESSEE--0.5%
AAA 2,350 Met. Nashville, Arpt. Rev., Ser. C, 6.625%, 7/01/07, FGIC 7/01 at 102 2,570,430
-----------
TEXAS--15.2%
AAA 2,000 Austin Util. Sys. Rev., 6.875%, 5/15/01+, AMBAC.......................No Opt. Call 2,207,240
AAA 8,500 Cypress-Fairbanks Indpt. Sch. Dist., G.O., Zero Coupon,
8/01/06, AMBAC.....................................................No Opt. Call 5,794,280

AAA 5,800 El Paso Cnty. Tax Ref., G.O., Ser. B, 6.40%, 2/15/07, MBIA.............2/02 at 100 6,242,076
AAA 3,375 Ft. Bend Cnty., Tax. Perm. Imprvt., G.O., FGIC,
6.60%, 9/01/02+....................................................No Opt. Call 3,706,391
Harris Cnty. Rev., Toll Rd. Sr. Lien, Ser. A, FGIC,
AAA 13,555 6.50%, 8/15/02+....................................................No Opt. Call 15,041,713
AAA 1,955 6.50%, 8/15/06 8/02 at 102 2,165,260
AAA 590 6.50%, 8/15/07 8/02 at 102 652,145

</TABLE>

See Notes to Financial Statements.

<PAGE>

- ---------------------------------------------------------------------------------------------------------------------
OPTION
PRINCIPAL CALL
RATING* AMOUNT PROVISIONS++ VALUE
(UNAUDITED) (000) DESCRIPTION (UNAUDITED) (NOTE 1)
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
TEXAS (CONT'D)
Houston Wtr.& Swr. Sys. Rev., Ser. B
AAA $13,225 6.75%, 12/01/08+, FGIC ...................................... 12/01 at 102 $14,621,163
AAA 1,775 6.75%, 12/01/01+, FGIC ...................................... No Opt. Call 1,969,859
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 2,059,429
AAA 1,550 No. Texas Wtr. Dist., 6.40%, 6/01/07, MBIA ..................... 6/03 at 100 1,698,723
AAA 3,000 Round Rock Indpt. Sch. Dist., G.O., 6.75%, 8/15/01+, MBIA ...... No Opt. Call 3,258,720
AAA 15,000 Texas Mun. Pwr. Agy. Rev., Ref., Zero Coupon, 9/01/06, AMBAC ... No Opt. Call 10,152,900
AAA 3,745 Texas St. Bldg. Fin. Auth. Rev., 7.00%, 2/01/01+, MBIA ......... No Opt. Call 4,055,086
AAA 3,395 Tyler Cnty. Hlth. Facs. Dev. Corp. Rev., Mother Francis Hosp.,
6.50%, 7/01/06, FGIC ........................................ 7/02 at 102 3,747,129
-------------
77,372,114
-------------
WASHINGTON--4.2%
AAA 1,250 Snohomish Cnty. Pub. Util. Dist., Elec. Rev.,
6.55%, 1/01/07, FGIC ........................................ 1/02 at 102 1,434,125
Snohomish Cnty. Sch. Dist., G.O., MBIA,
AAA 3,835 6.70%, 12/01/06 ............................................. 12/01 at 100 4,185,250
AAA 4,145 6.75%, 12/01/07 ............................................. 12/01 at 100 4,521,615
Washington St. Pub. Pwr. Sply. Sys. Rev., Nuclear Proj.
#2, Ser. A,
AAA 12,875 Zero Coupon, 7/01/06, MBIA .................................. No Opt. Call 8,743,670
AAA 2,265 6.50%, 7/01/05, FGIC ........................................ 7/01 at 102 2,475,351
-------------
21,360,011
-------------
WISCONSIN--0.6%
AAA 2,850 Wisconsin Hlth. & Ed. Fac. Auth., Columbia Hosp. Rev.,
6.50%, 11/15/06, MBIA ....................................... 11/01 at 102 3,128,530
-------------
Total Long-Term Investments--142.0% (cost $656,441,738) ........ 723,639,997
SHORT-TERM INVESTMENT**--0.1%
VMIG1 300 Uinta County Wyoming Pollution Control, Revenue,
5.00%, 1/02/98, FRDD ........................................ 300,000
-------------
(cost $300,000)
TOTAL INVESTMENTS--142.1% (COST $656,741,738) .................. 723,939,997
Other assets in excess of liabilities--2.1% .................... 10,672,655
Liquidation value of preferred stock--(44.2%) .................. (225,000,000)
-------------
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS--100% ............. $ 509,612,652
=============
- --------------------
+ This bond is prerefunded. See glossary for definition.
++ Option call provisions: date (month/year) and prices 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.

</TABLE>

================================================================================
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.

<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK MUNICIPAL TARGET TERM TRUST INC.
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1997
- --------------------------------------------------------------------------------

ASSETS
Investments, at value (cost $656,741,738)
(Note 1) ..................................................... $723,939,997
Cash ........................................................... 72,666
Interest receivable ............................................ 11,507,293
------------
............................................................... 735,519,956
------------
LIABILITIES
Advisory fee payable (Note 2) .................................. 218,373
Dividends payable--preferred stock ............................. 149,462
Administration fee payable (Note 2) ............................ 43,675
Other accrued expenses ......................................... 495,794
------------
............................................................... 907,304
------------
NET INVESTMENT ASSETS .......................................... $734,612,652
============
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 .......................... 20,837,858
Accumulated net realized gain ................................ 3,044
Net unrealized appreciation .................................. 67,198,259
------------
Net investment assets, December 31, 1997 ..................... $734,612,652
============
Net assets applicable to common
shareholders ............................................... $509,612,652
============
Net asset value per common share:
($509,612,652 / 45,410,639 shares of
common stock issued and outstanding) ......................... $11.22
======

- --------------------------------------------------------------------------------
THE BLACKROCK MUNICIPAL TARGET TERM TRUST INC.
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1997
- --------------------------------------------------------------------------------

NET INVESTMENT INCOME

Income
Interest and discount earned ................................. $42,907,408
-----------

Expenses
Investment advisory .......................................... 2,530,464
Auction agent ................................................ 559,400
Administration ............................................... 506,093
Reports to shareholders ...................................... 145,000
Custodian .................................................... 120,000
Directors .................................................... 81,000
Audit ........................................................ 32,000
Transfer agent ............................................... 35,000
Legal ........................................................ 10,000
Miscellaneous ................................................ 377,483
-----------
Total expenses ............................................. 4,396,440
-----------
Net investment income .......................................... 38,510,968
-----------

REALIZED AND UNREALIZED GAIN
ON INVESTMENTS (NOTE 3)
Net realized gain on investments ............................. 181,766
Net change in unrealized appreciation
on investments ............................................. 9,243,056
-----------
Net gain on investments ...................................... 9,424,822
-----------

NET INCREASE IN NET INVESTMENT ASSETS
RESULTING FROM OPERATIONS .................................... $47,935,790
===========

See Notes to Financial Statements.

<PAGE>

- ---------------------------------------------------------------------------------------------------------------------------
THE BLACKROCK MUNICIPAL TARGET TERM TRUST INC.
STATEMENTS OF CHANGES IN NET INVESTMENT ASSETS
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
YEAR ENDED DECEMBER 31,
-------------------------
1997 1996
---- ----
INCREASE (DECREASE) IN NET INVESTMENT ASSETS
Operations:

Net investment income ....................................................... $ 38,510,968 $ 38,330,127
Net realized gain on investments ............................................ 181,766 138,402
Net change in unrealized appreciation (depreciation) on investments ......... 9,243,056 (11,034,435)
----------- -----------
Net increase in net investment assets resulting from operations .......... 47,935,790 27,434,094
------------ -----------
Dividends and distributions:

To preferred shareholders from net investment income ....................... (8,041,758) (7,850,109)
To preferred shareholders from capital gains ............................... (40,128) (30,359)
To common shareholders from net investment income .......................... (27,785,620) (27,819,265)
To common shareholders from capital gains .................................. (141,638) (108,032)
------------ -----------
Total dividends and distributions ........................................ (36,009,144) (35,807,765)
------------ -----------
Total increase (decrease) .............................................. 11,926,646 (8,373,671)
------------ -----------
NET INVESTMENT ASSETS

Beginning of year ............................................................ 722,686,006 731,059,677
------------ ------------
End of year .................................................................. $734,612,652 $722,686,006
============ ============
</TABLE>

See Notes to Financial Statements.

<PAGE>

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
THE BLACKROCK MUNICIPAL TARGET TERM TRUST INC.
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE: 1997 1996 1995 1994 1993
-------- ------- ------- ------- ------
Net asset value, beginning of year ............. $ 10.96 $ 11.14 $ 9.98 $ 11.30 $ 10.04
------- ------- -------- ------- -------
Net investment income ........................ .85 .84 .87 .83 .82
Net realized and unrealized gain (loss) on
investments ................................ .20 (.24) 1.14 (1.39) 1.17
------- ------- -------- ------- -------
Net increase (decrease) from investment
operations .................................... 1.05 .60 2.01 (.56) 1.99
------- ------- -------- ------- -------
Dividends and distributions:
Dividends from net investment income to:
Preferred shareholders ..................... (.18) (.17) (.19) (.14) (.12)
Common shareholders ........................ (.61) (.61) (.62) (.62) (.61)
Distributions from capital gains to:
Preferred shareholders ..................... * * (.01) -- --
Common shareholders ........................ * * (.03) -- --
------- ------- -------- ------- -------
Total dividends and distributions .......... (.79) (.78) (.85) (.76) (.73)
------- ------- -------- ------- -------
Net asset value, end of year** ................. $ 11.22 $ 10.96 $ 11.14 $ 9.98 $ 11.30
======= ======= ======== ======== =======
Market value, end of year** .................... $ 11.00 $ 10.25 $ 10.125 $ 8.875 $10.375
======= ======= ======== ======== =======
TOTAL INVESTMENT RETURN+: ...................... 13.69% 7.43% 21.67% (8.89%) 10.01%

RATIOS TO AVERAGE NET ASSETS
OF COMMON SHAREHOLDERS++:
Expenses ....................................... .88% .91% .90% .94% .87%
Net investment income before preferred stock
dividends ..................................... 7.70% 7.75% 8.06% 7.91% 7.61%
Preferred stock dividends ...................... 1.61% 1.59% 1.83% 1.38% 1.11%
Net investment income available to common
stockholders .................................. 6.09% 6.16% 6.23% 6.53% 6.50%

SUPPLEMENTAL DATA:
Average net assets of common shareholders

(in thousands) ............................... $500,227 $494,667 $487,923 $475,529 $492,138
Portfolio turnover rate ........................ 8% 5% 9% 21% 1%
Net assets of common shareholders, end of year
(in thousands) ............................... $509,613 $497,686 $506,060 $453,407 $513,339
Asset coverage per share of preferred stock,
end of year# ................................. $ 81,640 $ 80,298 $ 81,243 $150,783 $164,075
Preferred stock outstanding (in thousands) ..... $225,000 $225,000 $225,000 $225,000 $225,000

</TABLE>

- ---------------
* Actual amount paid for the year ended December 31, 1997 to preferred
shareholders was $0.0008 and to common shareholders was $0.0031 and for the
year ended December 31, 1996 to preferred shareholders was $.0007 and to
common shareholders was $.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 year reported. Dividends are assumed,
for purposes of this calculation to be reinvested at prices obtained under
the Trust's dividend reinvestment plan. This calculation does not reflect
brokerage commissions.

++ 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. The information above
represents the audited operating performance data for a share of common
stock outstanding, total investment return, ratios to average net assets
and other supplemental data, for each of the years indicated. This
information has been determined based upon financial information provided
in the financial statements and market value data for the Trust's common
stock.

See Notes to Financial Statements.

<PAGE>

- --------------------------------------------------------------------------------
THE BLACKROCK MUNICIPAL TARGET TERM TRUST INC.
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

NOTE 1. ACCOUNTING The BlackRock Municipal Target Term Trust Inc. (the
POLICIES "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 whilet 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. Net 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.

<PAGE>

NOTE 3. PORTFOLIO Purchases and sales of investment securities, other
SECURITIES than short-term investments for the year ended
December 31, 1997 aggregated $54,365,891 and $54,452,812, respectively.

The federal income tax basis of the Trust's investments at December 31, 1997
was substantially the same as for financial reporting purposes and, accordingly,
net and gross unrealized appreciation for federal income tax purposes was
$67,198,259.

NOTE 4. CAPITAL There are 200 million shares f $.01 par value common
stock authorized. Of the 45,410,639 common shares outstanding at December 31,
1997,the Adviser owned 10,639 shares. As of December 31, 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 2.50% to 6.45% during the year ended
December 31, 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 December 31, 1997, the Board of
Directors of the Trust declared dividends from undistributed earnings of
$0.05125 per common share payable January 31, 1998 to shareholders of record on
January 15, 1998.

For the period January 1, 1998 to January 31, 1998 dividends and
distributions declared on preferred shares totalled $475,213 in aggregate for
the three outstanding preferred share series.

<PAGE>

- --------------------------------------------------------------------------------
THE BLACKROCK MUNICIPAL TARGET TERM TRUST INC.
REPORT OF INDEPENDENT AUDITORS
- --------------------------------------------------------------------------------

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

We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of The BlackRock Municipal Target Term Trust Inc.
as of December 31, 1997 and the related statements of operations for the year
then ended, and of changes in net investment assets for each of the two years in
the period then ended and the financial highlights for each of the five years in
the period then ended. These financial statements and financial highlights are
the responsibility of the Trust's management. Our responsibility is to express
an opinion on these financial statements and financial highlights based on our
audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatements. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned at December
31, 1997, by correspondence with the custodian. An audit also includes assessing
the accounting principles used and significant estimates made by Management, as
well as evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.

In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of The BlackRock
Municipal Target Term Trust Inc. as of December 31, 1997, the results of its
operations, the changes in its net investment assets and the financial
highlights for the respective stated periods, in conformity with generally
accepted accounting principles.

Deloitte &Touche LLP
/s/Deloitte & Touche LLP
- ------------------------
New York, New York
February 13, 1998

We are required by the Internal Revenue Code to advise you within 60 days
of the Trust's fiscal year end as to the federally exempt interest dividends
received by you during such fiscal year. Accordingly, we are advising you that
during the year ended December 31, 1997 the Trust paid a total of $0.611881 in
dividends per common share that were federally tax-exempt interest dividends.

Additionally, the following summarizes the special taxable distributions
declared by the Trust during the fiscal year:

<S> <C> <C> <C> <C>
SHORT-TERM LONG-TERM
RECORD PAYABLE CAPITAL GAINS CAPITALGAINS
DATE DATE PER SHARE* PER SHARE**
------ ------- ----------- -----------
Common Stock 12/15/97 12/31/97 $0.001747 $0.001372
Preferred Stock:
Series W-7 12/02/97 12/03/97 $2.489162 $1.955113
Series F-7 12/04/97 12/05/97 $2.440683 $1.917035
Series W-28 12/23/97 12/24/97 $2.561851 $2.012207
</TABLE>

*Short-term capital gains are taxable as ordinary income.

**Long-term capital gains taxable at the 20% rate.

For purposes of preparing your annual federal income tax return, however, you
should report the amounts as reflected on the appropriate Form 1099-DIV or
substitute 1099-DIV.

- --------------------------------------------------------------------------------
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 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.

<PAGE>

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
THE BLACKROCK MUNICIPAL TARGET TERM TRUST INC.
GLOSSARY
- ---------------------------------------------------------------------------------------------------------------------------
<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>

<PAGE>

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
BLACKROCK FINANCIAL MANAGEMENT, INC.
SUMMARY OF CLOSED-END FUNDS
- ---------------------------------------------------------------------------------------------------------------------

TAXABLE TRUSTS
- ---------------------------------------------------------------------------------------------------------------------

<S> <C> <C>
STOCK MATURITY
PERPETUAL TRUSTS SYMBOL DATE
------ ------
The BlackRock Income Trust Inc. BKT N/A
The BlackRock North American Government Income Trust Inc. BNA N/A

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 Inc. 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 Inc. 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.

<PAGE>

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

BlackRock Financial Management Inc. (BlackRock) is a registered investment
adviser which specializes in managing high quality fixed income securities, both
taxable and tax exempt. BlackRock currently 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 either on the New York Stock Exchange or the American
Stock Exchange, several open-end funds and over 125 institutional clients in the
United States and overseas.

BlackRock was formed in April 1988 by fixed income professionals who
sought to create an asset management firm specializing in managing fixed income
securities for individuals and institutional investors. The professionals at
BlackRock have extensive experience creating, analyzing and trading a variety of
fixed income instruments, including the most complex structured securities. In
fact, individuals at BlackRock are responsible for many of the major innovations
in the mortgage-backed and asset-backed securities market, including the
creation of the CMO, the floating rate CMO, the senior/subordinated pass-through
and the multi-class asset-backed security.

BlackRock is unique among asset management and advisory firms in the
significant emphasis it places on the development of propriety analytical
capabilities. A quarter of the professionals at BlackRock work full-time in the
design, maintenance and use of such systems which are otherwise not generally
available to investors. BlackRock's propriety analytical tools are used for
evaluating, investing in and designing investment strategies and portfolio of
fixed income securities, including mortgage securities, corporate debt
securities or tax-exempt securities and a variety of hedging instruments.

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

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

<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

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
[Logo] Printed on recycled paper 092476-40-2

==================
The [BlackRock]
==================
Municipal Target
Term Trust Inc.
==================
Annual Report
December 31, 1997

[LOGO]