- --------------------------------------------------------------------------------
THE BLACKROCK NORTH AMERICAN GOVERNMENT INCOME TRUST INC.
SEMI-ANNUAL REPORT TO SHAREHOLDERS
REPORT OF INVESTMENT ADVISER
- --------------------------------------------------------------------------------
June 1, 1995
Dear Shareholder:
The fixed income markets experienced both extremely bearish and bullish
sentiment during the semi-annual period between November 1, 1994 and April 30,
1995. Closed-end bond funds responded to the broader markets with similar
volatility and hit all-time low stock prices during the fourth quarter of 1994.
These low levels of stock valuation were further eroded by an unusually high
degree of tax-related selling; however, closed-end bond funds have staged a
resounding rebound during the first five months of 1995. The U.S. economy
appears to have responded to the Fed's vigilance toward inflation with low
absolute levels of inflation and moderate rates of growth. This scenario is
suggestive of a "soft landing" for the economy, which has sparked a significant
Treasury market rally and resulted in overall strength in most fixed income
markets.
BlackRock Financial Management, Inc., your Trust's investment adviser, is
pleased to report that its acquisition by PNC Bank, N.A. ("PNC") was officially
completed on February 28, 1995. PNC is a commercial bank whose principal office
is in Pittsburgh, Pennsylvania and is wholly-owned by PNC Bank Corp., a bank
holding company. The merger was structured to assure continuity of performance
and service through stability of our organization. BlackRock retains its name
and continues to operate out of its New York office. All members of BlackRock's
management team have signed long-term employment contracts and will continue to
be responsible for managing BlackRock's business so that shareholders will
notice no changes in the management of the Trust.
You will note several enhancements to the Trust's semi-annual report
designed to improve the report's usefulness to you. The letter to shareholders
which reviews the markets and Trust's investment strategy over the semi-annual
period is provided by the Trust's portfolio managers. In addition, we have
included an investment summary section which provides a synopsis of the Trust's
investment objectives and guidelines and reviews its investment strategy. We
appreciate your investment in The BlackRock North American Government Income
Trust Inc. and look forward to continuing to serve your financial needs.
Sincerely,
Laurence D. Fink Ralph L. Schlosstein
Chairman President
1
<PAGE>
June 1, 1995
Dear Shareholder:
During the most recent semi-annual period ended April 30, the BlackRock
North American Government Income Trust ("BNA" or the "Trust") experienced what
may be best described as two substantially different periods in the fixed income
markets. In contrast to the year-long increase in interest rates in 1994, the
fixed income markets have rallied sharply in 1995. The bond market rally, which
has caused interest rates to decline as prices have increased, has been caused
largely by modest inflationary data and the perception that the Federal
Reserve's proactive attempts to contain inflation and provide a "soft landing"
for the economy (modest economic growth with little or no inflation) may have
been successful. Additionally, the last six months have witnessed a significant
increase in the relative strength of the Canadian dollar versus the U.S. dollar
from its lowest levels in nine years.
During the final months of 1994, investor demand for closed-end bond funds
dropped to all-time low levels as seen by the large percentage of funds trading
at discounts to their net asset values. Closed-end bond funds fell victim to a
lack of demand stemming from fears of rising inflation and historically high
levels of year-end tax selling. As a result, the prices of most closed-end bond
funds dropped to historically low levels. Investors who endured the market slump
and opted to "Hold" or acquire more shares of the Trust during these tumultuous
markets witnessed a substantial increase in both net asset value (NAV) and share
price during the first few months of 1995 as the market environment for fixed
income securities and closed-end funds improved considerably.
Over the period, the Trust's NAV ranged from $9.24 to $10.91 and ended the
period at $10.65 per share, an increase of 11.18% since the beginning of the
fiscal period. At the beginning of the fiscal period, BNA was trading at a stock
price of $9.125 while at the end of this semi-annual period (April 30) the Trust
closed at $9.625. Coming off a fourth quarter in which closed-end funds came
under tremendous tax-related selling pressure, the Trust declined to an all time
low of $8.625 per share (November 24). As of the date of this letter, the
Trust's shares were trading at a price of $9.875 per share, which is an 8.48%
discount to its net asset value of $10.79 per share.
The current monthly dividend per share is $.07813, which is equivalent to an
annualized yield of 9.49% based on the June1 stock price of $9.875. As announced
by the Board of Directors on February 28, even though the Trust will be earning
its dividend from investment income, for tax purposes the Trust expects to
offset its 1995 income with prior years' currency losses. Should this occur as
we currently expect, all distributions paid in 1995 will be classified as a
return of capital and will not be subject to federal, state and local income
tax. The Canadian currency losses are already reflected in the Trust's current
net asset value, and this reclassification will have no further effect on NAV.
For purposes of determining capital gain or loss on any future sale of shares,
shareholders will be required to reduce their original cost by the amount of
non-taxable distributions received.
Despite the challenging six months we have experienced in the fixed income
markets, we believe the Trust can continue to achieve its objective of providing
competitive monthly income while maintaining significant exposure to Canadian
dollar denominated fixed income securities. The Trust's current portfolio
allocation to Canadian securities is approximately 77%. In addition, a continued
recovery in the value of the Canadian dollar relative to the U.S. dollar should
lead to further improvements in the net asset value of the Trust, assuming no
additional increases in interest rates.
The U.S. and Canadian Fixed Income Markets
During the past four months, interest rates across all parts of the yield
curve have declined substantially, contrasting sharply with the substantial
increases in interest rates that occurred through most of 1994. Coming off of
the worst twelve month period for fixed income securities since systematic
record keeping began nearly seventy years ago, the bond market has rallied
significantly since the beginning of 1995 as yields across the curve have fallen
dramatically. The yield of the 10-year U.S. Treasury security (the Treasury Note
that most closely reflects the interest rate sensitivity of the Trust) has
fallen over 150 basis points (or 1.5 percentage points) since October 31, 1994.
On June 1, 1995 the yield of the 10-year Treasury Note was 6.19%.
The currency exchange rate, expressed as the amount of U.S dollars per
Canadian dollar, declined from $0.7390 on October 31 to a low of $0.6993 on
March 7, which closely followed the placement of Canada's debt on Credit Watch
by Moody's. As of the end of the semi-annual period, the Canadian dollar was
trading at $0.7355. The performance of the Canadian bond market followed a
pattern similar to that of the U.S. bond market during the semi-annual period,
as yields of Canadian bonds
2
<PAGE>
increased steadily until the middle of January before rallying sharply over the
following three months. The recent Canadian bond market strength is demonstrated
by the performance of the Canadian 10-year Treasury security, whose yield
declined by 50 basis points more than the yield of the 10-year U.S. Treasury in
just over three months. The Canadian finance minister, Paul Martin, has
maintained a firm deficit reduction agenda, and budget proposals from both the
Canadian Federal and provincial governments have been viewed favorably by the
international markets. Adherence to this deficit reduction agenda, combined with
low inflation and a strengthening currency, may result in continued improvement
in the Canadian bond and currency markets.
Although the recent market rally has afforded fixed income investors an
opportunity to recoup losses suffered through most of 1994, BlackRock remains
cautiously optimistic concerning the near-term future of the bond market.
Investor sentiment clearly indicates that inflationary fears that consumed the
market during most of 1994 have dissipated. However, the steep decline in market
rates could stimulate a resurgence in consumption and the potential for renewed
inflationary pressures. In addition, the momentum with which the economy entered
1995 and the weakness of the U.S. dollar could prove the arrival of a "soft
landing" to be premature.
The Trust's Portfolio and Investment Strategy
The Trust is comprised of two actively managed portions; one is Canadian
dollar denominated and the other is U.S. dollar denominated. The Trust's
significant exposure to the Canadian dollar (77% of its portfolio) continues to
dominate net asset value changes, notably the sharp decline in the Trust's NAV
early in the semi-annual period and the recent surge in NAV. The Adviser
believes that Canadian dollar denominated securities offer significant upside
potential should the Canadian dollar and bond markets continue to improve and
deficit reduction agendas are adhered to. The chart below illustrates the
changes in portfolio composition that have occurred during the semi-annual
period ended April 30, 1995.
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Composition April 30, 1995 October 31, 1994
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Canadian Portfolio Allocation 77% 75%
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Canadian Mortgages 16% 15%
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Ontario 14% 13%
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Canadian Government Securities 9% 12%
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New Foundland 7% 6%
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Alberta 6% 6%
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British Columbia 6% 6%
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Manitoba 5% 4%
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New Brunswick 5% 5%
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Saskatchewan 5% 2%
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Nova Scotia 2% 2%
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Prince Edward Island 1% 1%
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Quebec 1% 3%
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U.S. Portfolio Allocation 23% 25%
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Project Loans 8% 8%
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Agency Multiple Class Mortgage Pass-Throughs 3% 15%
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Multiple Class Mortgage Pass-Throughs 2% -
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Asset-Backed Securities 3% -
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Adjustable Rate Mortgage Securities 2% -
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Agency Mortgage Pass-Throughs 1% 1%
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U.S. Government Securities 2% -
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Stripped Mortgage-Backed Securities 2% -
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Commercial Mortgage-Backed Securities - 1%
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3
<PAGE>
As the chart shows, the Trust increased its exposure to debt securities
issued by Canadian provinces, as these securities offer attractive yields
relative to Canadian Treasuries and enhance diversity within the portfolio. The
portfolio has slightly increased its exposure to Canadian mortgage securities,
which offer attractive yields and excellent prepayment protection relative to
U.S. mortgages in part due to their short average lives. Within the U.S. portion
of the portfolio, the Trust maintained a significant allocation to well
structured FHA Project Loans, which are backed by the Federal Housing
Administration. In addition, the Trust continues to maintain a low exposure to
derivative securities.
The Trust will continue to take advantage of opportunities within the
Canadian markets as they arise due to fundamental economic conditions as well as
a result of technical factors. Within the U.S. portfolio, the Trust expects to
continue to focus on well structured, prepayment protected securities.
We thank you for your investment in The BlackRock North American Government
Income Trust. Please feel free to contact us at (800) 227-7BFM (7236) if you
have specific questions about the Trust or the Adviser Update which were not
addressed in this report.
Sincerely,
Robert S. Kapito
Vice Chairman and Portfolio Manager
BlackRock Financial Management, Inc.
Keith T. Anderson
Managing Director and Portfolio Manager
BlackRock Financial Management, Inc.
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The BlackRock North American Government Income Trust Inc.
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Symbol on New York Stock Exchange: BNA
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Initial Offering Date: December 20, 1991
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Closing Stock Price as of 4/30/95: $9.625
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Net Asset Value as of 4/30/95: $10.65
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Yield on Closing Stock Price as of 4/30/95 ($9.625)1: 9.74%
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Current Monthly Distribution per Share2: $0.078125
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Current Annualized Distribution per Share2: $0.9375
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- ------------
1Yield on Closing Stock Price is calculated by annualizing the current monthy
distribution per share and dividing it by the closing stock price per share.
2The distribution is not constant and is subject to change.
4
<PAGE>
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The BlackRock North American
Government Income Trust Inc.
Portfolio of Investments
April 30, 1995 (Unaudited)
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(Left Column)
Principal
Amount Value
(000) Description (Note 1)
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LONG-TERM INVESTMENTS-128.7%
United States Securities-28.9%
Mortgage Pass-Throughs-12.1%
$ 2,200 Federal Home Loan Mortgage
Corporation, 8.00%, 30 Year .................... $ 2,195,182
Federal Housing Administration,
2,289 GMAC, Series 37, 7.43% ......................... 2,238,017
1,391 GMAC, Series 44, 7.43% ......................... 1,396,329
1,731 GMAC, Series 59, 7.43% ......................... 1,704,810
763 GMAC, Series 65, 7.43% ......................... 752,234
3,547 Merrill, Series 29, 7.43% ...................... 3,495,950
25,822 Merrill, Series 42, 7.43% ...................... 25,531,219
2,356 Reilly, Series B-11, 7.40% ..................... 2,301,943
2,439 Westmore Project 8240, 7.25% ................... 2,358,423
------------
4,793@@ Government National Mortgage
Association,
6.00%, 15 Year ................................. 4,469,223
------------
46,443,330
------------
Multiple Class Mortgage
Pass-Throughs-5.2%
10,000@ Federal Home Loan Mortgage
Corporation, Multiclass Mortgage
Participation Certificates,
Series 1102, Class H ........................... 10,700,000
32 Federal National Mortgage
Association, REMIC
Pass-Through Certificates,
Trust 1991-160, Class PM, I .................... 1,078,427
3,000 ML Trust XXXVI, Collateralized
Mortgage Obligation, Class D ................... 3,157,500
5,006(D)(D)(D)Resolution Trust Corporation,
Series 1991-M5, Class A ........................ 5,108,244
------------
20,044,171
------------
Stripped Mortgage-Backed
Securities-2.7%
Federal Home Loan Mortgage
Corporation, Multiclass Mortgage
Participation Certificates,
61 Series 1430, Class KA, PAC ..................... 2,712,307
50 Series 1459, Class JA, PAC ..................... 2,061,938
12,243 Series 1751, Class PL, I/O ..................... 2,433,323
Federal National Mortgage
Association, REMIC
Pass-Through Certificates,
10,516 Trust 2, Class 2, I/O .......................... 3,246,690
------------
10,454,258
------------
(Right Column)
Principal
Amount Value
(000) Description (Note 1)
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Asset-Backed Securities-3.3%
$16,000 Community Program Loan Trust,
Series 87, Class A ............................. $ 12,560,000
------------
U.S. Government Securities-2.5%
U.S. Treasury Bonds,
110 6.25%, 8/15/23 ................................. 94,978
1,650 7.50%, 11/15/24 ................................ 1,672,176
U.S. Treasury Notes,
5,083 6.875%, 2/28/97 ................................ 5,108,415
2,840 7.75%, 11/30/99 ................................ 2,934,970
------------
9,810,539
------------
Adjustable Rate Mortgage
Securities-3.1%
1,091 Federal Home Loan Mortgage
Corporation, Multiclass Mortgage
Participation Certificates,
Series 1433, Class S ........................... 636,842
2,917 Federal National Mortgage
Association, REMIC
Pass-Through Certificates,
Series 1994-22, Class SA ....................... 1,662,882
9,600 Government National Mortgage
Association,
6.50%, 1 Year CMT .............................. 9,618,000
------------
11,917,724
------------
Total United States Securities
(cost $115,122,529) ............................ 111,230,022
------------
Canadian Securities-99.8%
Canadian Government
Security-11.6%
C$48,250(D)(D)Canadian Treasury Note,
12.25%, 9/01/05
(cost $52,268,677) ............................. 44,697,613
------------
Canadian Mortgage
Securities-20.2%
Conduit for Mortgage Obligation,
9,000 6.95%, 9/01/98 ................................. 6,362,092
13,000 8.25%, 5/01/98 ................................. 9,524,345
9,404 Firstline Prepayable,
8.625%, 5/01/97 ................................ 6,927,536
5,566 ManuLife Prepayable,
7.625%, 2/01/98 ................................ 4,024,447
See Notes to Financial Statements.
5
<PAGE>
(Left Column)
Principal
Amount Value
(000) Description (Note 1)
- -----------------------------------------------------------------------------
Canadian Mortgage
Securities (cont'd)
NBC Prepayable,
C$18,702 8.375%, 1/01/97 ................................ $ 13,747,148
21,973 9.00%, 2/01/97 ................................. 16,294,126
4,744 Pacific Coast,
7.375%, 7/01/98 ................................ 3,403,304
Shoppers,
9,024 8.50%, 12/01/96 ................................ 6,797,628
3,487 9.125%, 4/01/02 ................................ 2,476,680
11,005 9.125%, 5/01/02 ................................ 8,213,307
------------
Total Canadian Mortgage Securities
(cost $83,451,419) ............................. 77,770,613
------------
Canadian Provincial
Securities-68.0%
Alberta-7.3%
35,000(D) Alberta Province,
10.25%, 8/22/01 ................................ 28,167,844
------------
British Columbia-8.2%
British Columbia Province,
30,000(D)(D)9.50%, 1/09/12 ................................. 23,543,689
10,000 10.15%, 8/29/01 ................................ 8,002,354
------------
31,546,043
------------
Manitoba-6.7%
3,000 City of Winnipeg,
9.375%, 2/11/13 ................................ 2,272,727
Manitoba Province,
15,000(D) 9.25%, 5/21/97 ................................. 11,289,497
15,000(D) 11.25%, 10/17/00 ............................... 12,461,827
------------
26,024,051
------------
New Brunswick-6.2%
New Brunswick Province,
20,000 9.75%, 6/01/01 ................................. 15,622,242
10,000 11.25%, 12/13/00 ............................... 8,318,623
------------
23,940,865
------------
Newfoundland-8.5%
Newfoundland and Labrador
Province,
36,000 10.95%, 4/15/21 ................................ 30,264,784
3,341 11.00%, 3/04/06 ................................ 2,692,015
------------
32,956,799
------------
(Right Column)
Principal
Amount Value
(000) Description (Note 1)
- -----------------------------------------------------------------------------
Nova Scotia-3.0%
C$15,000(D) Nova Scotia Province,
9.60%, 1/30/22 ............................. $ 11,617,388
------------
Ontario-18.4%
Ontario Hydro,
16,250 8.625%, 2/06/02 ............................... 12,023,757
10,000 8.90%, 8/18/22 ................................ 7,310,974
6,000 9.375%, 1/31/00 ............................... 4,605,031
Ontario Province,
25,000 7.50%, 2/07/24 ................................ 15,625,919
25,000(D)(D) 8.10%, 9/08/23 ................................ 16,745,734
18,000(D) 10.875%, 1/10/01 .............................. 14,694,307
------------
71,005,722
------------
Prince Edward Island-1.2
6,000 Prince Edward Island Province,
9.75%, 12/17/12 ............................... 4,669,020
------------
Quebec-1.7%
10,000 Hydro Quebec,
7.00%, 6/01/04 ................................ 6,421,006
------------
Saskatchewan-6.8%
Saskatchewan Province,
15,000 9.50%, 8/16/04 ................................ 11,554,501
15,000 9.625%, 12/30/04 .............................. 11,667,035
3,500 11.25%, 7/12/00 ............................... 2,885,802
------------
26,107,338
------------
Total Canadian Provincial
Securities (cost $277,291,406) ................ 262,456,076
------------
Total Canadian Securities
(cost $413,011,502) ........................... 384,924,302
------------
Total Long-Term Investments
(cost $528,134,031) ........................... 496,154,324
------------
See Notes to Financial Statements.
6
<PAGE>
(Left Column)
Principal
Amount Value
(000) Description (Note 1)
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SHORT-TERM INVESTMENTS-6.9%
Repurchase Agreement-6.7%
$25,950 State Street Bank and Trust Co.,
5.90%, dated 4/28/95, due
5/1/95 in the amount of
$25,962,759 (collateralized
by $27,720,000 United States
Treasury Note, 5.00%,
due 1/31/99, value
including accrued
interest-$26,805,699)
(cost $25,950,000) ............................. $ 25,950,000
------------
Contracts #
- -----------
CALL OPTIONS PURCHASED-0.2%
312 U.S. Treasury Bond Future, expiring
Sep. '95 @ $104.00
(cost $718,497) ................................ 760,500
------------
Total Short-term Investments
(cost $26,668,497) ............................. 26,710,500
------------
Total Investments Before
Short Sale-135.6%
(cost $554,802,528) ............................ 522,864,824
------------
(Right Column)
Principal
Amount Value
(000) Description (Note 1)
- -----------------------------------------------------------------------------
Investment Sold Short-(1.0%)
$ 4,000 Federal National Mortgage
Association, 7.00%
(proceeds $3,804,375) $ (3,803,720
------------
Total Investments, Net of
Short Sale-134.6% 519,061,104
Liabilities In Excess of
Other Assets-(34.6%) (133,550,195)
------------
NET ASSETS-100% $385,510,909
============
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KEY TO ABBREVIATIONS
C-Canadian Dollar.
CMT-Constant Maturity Treasury.
GMAC-General Motors Acceptance Corp.
I/O-Interest Only.
I-Denotes a CMO with interest only characteristics.
PAC-Planned Amortization Class.
REMIC-Real Estate Mortgage Investment Conduit.
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#One contract equals $100,000 face value.
(D)In aggregate, $60,000,000 principal amount pledged as collateral for
reverse repurchase agreements.
(D)(D)Entire principal amount pledged as collateral for reverse repurchase
agreements.
(D)(D)(D)Entire principal amount pledged as collateral for mortgage swap.
@$2,000,000 of principal amount pledged as collateral for futures
transactions and $8,000,000 of principal amount pledged as collateral
for mortgage swap.
@@$2,388,000 of principal amount pledged as collateral for mortgage swap.
$60,205,000 of the receivable for investments sold is pledged as
collateral for reverse repurchase agreements. See Note 4.
7
<PAGE>
(Left Column)
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The BlackRock North American
Government Income Trust Inc.
Statement of Assets and Liabilities
April 30, 1995
(Unaudited)
- --------------------------------------------------------------------------------
Assets
Investments, at value (cost $554,802,528) (Note 1) .............. $522,864,824
Cash ............................................................ 560,701
Canadian dollars, at value (cost $971,363) ...................... 1,224,255
Receivable for investments sold ................................. 70,321,026
Interest receivable ............................................. 8,197,924
Deposits with brokers as collateral for investments
sold short (Note 1) ........................................... 3,804,375
Forward currency contracts-net amount
receivable from counterparties (Notes 1 & 3) .................. 2,443,309
Due from broker-variation margin ................................ 402,558
Deferred organization expenses and other assets ................. 45,675
------------
609,864,647
------------
Liabilities
Reverse repurchase agreements (Note 4) .......................... 182,566,655
Payable for investments purchased ............................... 29,640,457
Unrealized depreciation on mortgage swap
(Notes 1 & 3) ................................................. 5,692,500
Investment sold short, at value
(proceeds $3,804,375) ......................................... 3,803,720
Interest payable ................................................ 1,538,647
Other accrued expenses .......................................... 596,886
Dividends payable ............................................... 297,995
Advisory fee payable (Note 2) ................................... 185,895
Administration fee payable (Note 2) ............................. 30,983
------------
224,353,738
------------
Net Assets $385,510,909
============
Net assets were comprised of:
Common stock, at par (Note 5) ................................. $ 362,071
Paid-in capital in excess of par .............................. 500,563,062
------------
500,925,133
Distributions in excess of net investment income .............. (26,726,809)
Accumulated net realized loss on investments .................. (55,089,671)
Net unrealized appreciation on investments .................... 10,466,612
Accumulated net realized and unrealized foreign
currency loss ............................................... (44,064,356)
------------
Net assets, April 30, 1995 .................................... $385,510,909
=== ==== ============
Net asset value per share:
($385,510,909 (DB) 36,207,093 shares of
common stock issued and outstanding) .......................... $10.65
======
(Right Column)
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The BlackRock North American
Government Income Trust Inc.
Statement of Operations
Six Months Ended April 30, 1995
(Unaudited)
- --------------------------------------------------------------------------------
Net Investment Income
Income
Interest (including discount accretion of $496,758
and net of interest expense of $4,894,338) ................... $18,696,426
-----------
Expenses
Investment advisory ............................................ 1,065,005
Administration ................................................. 177,501
Reports to shareholders ........................................ 139,000
Custodian ...................................................... 131,000
Transfer agent ................................................. 41,000
Directors ...................................................... 28,000
Audit .......................................................... 22,000
Legal .......................................................... 7,000
Miscellaneous .................................................. 92,958
-----------
Total operating expenses ..................................... 1,703,464
-----------
Net investment income .......................................... 16,992,962
-----------
Realized and Unrealized Gain (Loss) on
Investments and Foreign Currency Transactions
(Note 3)
Net realized gain (loss) on:
Investments .................................................... 2,377,167
Futures ........................................................ (5,144,053)
Short sales .................................................... (59,376)
Foreign currency ............................................... (2,274,207)
-----------
(5,100,469)
-----------
Net change in unrealized appreciation
(depreciation) on:
Investments .................................................... 37,448,708
Futures ........................................................ 1,607,361
Short sales .................................................... 655
Foreign currency ............................................... (11,858,005)
-----------
27,198,719
-----------
Net gain on investments and foreign currency
transactions ................................................... 22,098,250
-----------
Net Increase In Net Assets
Resulting from Operations ...................................... $39,091,212
===========
See Notes to Financial Statements.
8
<PAGE>
(Left Column)
- --------------------------------------------------------------------------------
The BlackRock North American
Government Income Trust Inc.
Statement of Cash Flows
Six Months Ended April 30, 1995
(Unaudited)
- --------------------------------------------------------------------------------
Increase (Decrease) in Cash
(Including Foreign Currency)
Cash flows used for operating activities:
Interest received ............................................. $ 23,596,973
Operating expenses paid ....................................... (1,540,108)
Interest expense paid on reverse repurchase
agreements .................................................. (3,610,774)
Purchases of short-term portfolio investments
including options, net ...................................... (21,068,061)
Purchases of long-term portfolio investments .................. (115,730,656)
Proceeds from disposition of long-term
portfolio investments ....................................... 102,788,166
Variation margin on futures ................................... (3,139,066)
Other ......................................................... (13,017)
------------
Net cash flows used for operating activities .................. (18,716,543)
------------
Cash flows provided by financing activities:
Increase in reverse repurchase agreements ..................... 40,116,655
Cash dividends paid ........................................... (18,386,379)
------------
Net cash flows provided by financing activities ............... 21,730,276
------------
Net realized and unrealized foreign currency loss ............... (1,357,567)
------------
Net increase in cash ............................................ 1,656,166
Cash at beginning of period ..................................... 128,790
------------
Cash at end of period ........................................... $ 1,784,956
============
Reconciliation of Net Increase in Net
Assets Resulting from Operations to
Net Cash Flows (Including Foreign
Currency) Used for Operating Activities
Net increase in net assets resulting from operations ............ $ 39,091,212
------------
Decrease in investments ......................................... 14,141,266
Net realized loss on investment transactions .................... 2,826,262
Net realized and unrealized foreign exchange loss ............... 14,132,212
Increase in unrealized appreciation on
investments ................................................... (39,056,724)
Increase in deposits with brokers as
collateral for investments sold short ......................... (3,804,375)
Decrease in interest receivable ................................. 502,967
Increase in receivable for investments sold ..................... (61,662,553)
Increase in receivable for forward
currency contracts ............................................ (2,443,309)
Decrease in depreciation on mortgage swap ....................... (4,154,616)
Increase in variation margin receivable ......................... (397,626)
Increase in other assets ........................................ (6,035)
Increase in payable for investments purchased ................... 16,864,136
Increase in payable for securities sold short ................... 3,803,720
Increase in interest payable .................................... 1,283,564
Increase in accrued expenses and other liabilities .............. 163,356
------------
Total adjustments ............................................. (57,807,755)
------------
Net cash flows used for operating activities .................... (18,716,543)
-----------
(Right Column)
- --------------------------------------------------------------------------------
The BlackRock North American
Government Income Trust Inc.
Statements of Changes
in Net Assets
(Unaudited)
- --------------------------------------------------------------------------------
Increase (Decrease) Six Months Year
in Net Assets Ended Ended
April 30, October 31,
1995 1994
----------- -----------
Operations:
Net investment income ........................ $ 16,992,962 $ 39,458,040
Net realized loss on investments,
futures, short sales and foreign
currency transactions ...................... (5,100,469) (26,259,212)
Net change in unrealized
appreciation/depreciation
on investments, futures, short
sales and foreign currency ................. 27,198,719 (56,141,556)
------------ ------------
Net increase (decrease) in
net assets resulting from
operations ................................. 39,091,212 (42,942,728)
Dividends and distributions:
Dividends from net investment
income ..................................... - (36,918,359)
Distributions in excess
of net investment income ................... (18,329,719) (112,913)
Return of capital distributions .............. - (1,891,079)
------------ ------------
Total increase (decrease) .................... 20,761,493 (81,865,079)
Net Assets
Beginning of period .......................... 364,749,416 446,614,495
------------ ------------
End of period ................................ $385,510,909 $364,749,416
============ ============
See Notes to Financial Statements.
9
<PAGE>
The BlackRock North American Government Income Trust Inc.
Financial Highlights
(Unaudited)
<TABLE>
<CAPTION>
Six Months December 27, 1991*
Ended Year Ended October 31, Through
-----------------------
April 30, 1995 1994 1993 October 31, 1992
-------------- ---- ---- ----------------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period .......................... $ 10.07 $ 12.34 $ 13.13 $ 14.10
-------- -------- -------- --------
Net investment income (net of interest expense of $.14, $.26,
$.20, and $.14, respectively) ............................. .47 1.09 1.21 1.03
Net realized and unrealized gain (loss) on investments and
foreign currency transactions ............................. .62 (2.28) (.80) (.99)
-------- -------- -------- --------
Net increase (decrease) from investment operations ............ 1.09 (1.19) .41 .04
-------- -------- -------- --------
Less distributions:
Dividends from net investment income ........................ - (1.03) (1.20) (.98)
Distributions in excess of net investment income ............ (.51) - - -
Return of capital distributions - (.05) - -
Total distributions ................................... (.51) (1.08) (1.20) (.98)
-------- -------- -------- --------
Capital charge with respect to issuance of shares ............. - - - (.03)
-------- -------- -------- --------
Net asset value, end of period** .............................. $ 10.65 $ 10.07 $ 12.34 $ 13.13#
-------- -------- -------- --------
Per share market value, end of period** ....................... $ 9-5/8 $ 9-1/8 $ 12-7/8 $ 13-1/2
======== ======== ======== ========
TOTAL INVESTMENT RETURN(D) .................................... 11.41% (21.62%) 4.68% 2.40%
RATIOS TO AVERAGE NET ASSETS:
Operating expenses ............................................ .96%(D)(D)(D) 1.01% .98% .90%(D)(D)(D)
Net investment income ......................................... 9.58%(D)(D)(D) 9.92% 9.72% 9.09%(D)(D)(D)
SUPPLEMENTAL DATA:
Average net assets (000) ...................................... $357,645 $397,651 $452,740 $482,326
Portfolio turnover 26% 70% 155% 314%
Net assets, end of period (000) ............................... $385,511 $364,749 $446,614 $475,220
Reverse repurchase agreements outstanding, end of period (000). $182,567 $142,450 $201,122 $219,362
Asset coverage(D)(D) .......................................... $ 3,112 $ 3,561 $ 3,221 $ 3,166
<FN>
- -----------
*Commencement of investment operations.
**NAV and market value published in The Wall Street Journal each Monday.
#Net asset value immediately after closing of first public offering was
$14.07.
(D)Total investment return is calculated assuming a purchase of common
stock at the current market price on the first day and a sale at the
current market price on the last day of each period reported. Dividends
and distributions are assumed, for purposes of this calculation, to be
reinvested at prices obtained under the Trust's dividend reinvestment
plan. Total investment return does not reflect brokerage commissions.
Total investment returns for periods of less than one full year are not
annualized.
(D)(D)Per $1,000 of reverse repurchase agreement outstanding.
(D)(D)(D)Annualized.
</FN>
</TABLE>
The information above represents the unaudited operating performance for a share
of common stock outstanding, total investment return, ratios to average net
assets and other supplemental data, for each of the periods indicated. This
information has been determined based upon financial information provided in the
financial statements and market value data for the Trust's shares.
See Notes to Financial Statements.
10
<PAGE>
(Left Column)
- --------------------------------------------------------------------------------
The BlackRock North American
Government Income Trust Inc.
Notes to Financial Statements
(Unaudited)
- --------------------------------------------------------------------------------
Note 1. Accounting
Policies
The BlackRock North American Government Income Trust Inc., (the "Trust"), a
Maryland corporation, is a non-diversified, closed-end management investment
company. The investment objective of the Trust is to achieve high monthly income
consistent with preservation of capital. The ability of issuers of debt
securities held by the Trust to meet their obligations may be affected by
economic developments in a specific country, 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.
Basis of Presentation: The financial statements of the Trust are prepared in
accordance with United States generally accepted accounting principles using the
United States dollar as both the functional and reporting currency.
Securities Valuation: In valuing the Trust's assets, quotations of foreign
securities in a foreign currency are converted to U.S. dollar equivalents at the
then current currency value. The Trust values mortgage-backed, asset-backed and
other debt securities on the basis of current market quotations provided by
dealers or pricing services approved by the Trust's Board of Directors. In
determining the value of a particular security, pricing services may use certain
information with respect to transactions in such securities, quotations from
dealers, market transactions in comparable securities, various relationships
observed in the market between securities, and calculated yield measures based
on valuation technology commonly employed in the market for such securities.
Exchange-traded options are valued at their last sales price as of the close of
options trading on the applicable exchanges. In the absence of a last sale,
options are valued at the average of the quoted bid and asked prices as of the
close of business. A futures contract is valued at the last sale price as of the
close of the commodities exchange on which it trades unless the Trust's Board of
Directors determines that such price does not reflect its fair value, in which
case it will be valued at its fair value as determined by the Trust's Board of
Directors. Any securities or other assets for which such current market
quotations are not readily available are valued at fair value as determined in
good
(Right Column)
faith under procedures established by and under the general supervision and
responsibility of the Trust's Board of Directors.
Short-term securities which mature in more than 60 days are valued at current
market quotations. Short-term securities which mature in 60 days or less are
valued at amortized cost, if their term to maturity from date of purchase was 60
days or less, or by amortizing their value on the 61st day prior to maturity, if
their original term to maturity from date of purchase exceeded 60 days.
In connection with transactions in repurchase agreements, the Trust's
custodian takes possession of the underlying collateral securities, the value of
which at least equals the principal amount of the repurchase transaction,
including accrued interest. To the extent that any repurchase transaction
exceeds one business day, the value of the collateral is marked-to-market on a
daily basis to ensure the adequacy of the collateral. If the seller defaults and
the value of the collateral declines or if bankruptcy proceedings are commenced
with respect to the seller of the security, realization of the collateral by the
Trust may be delayed or limited.
Option Selling/Purchasing: When the Trust sells or purchases an option, an
amount equal to the premium received or paid by the Trust is recorded as a
liability or an asset and is subsequently adjusted to the current market value
of the option written or purchased. Premiums received or paid from writing or
purchasing options which expire unexercised are treated by the Trust on the
expiration date as realized gains or losses. The difference between the premium
and the amount paid or received on effecting a closing purchase or sale
transaction, including brokerage commissions, is also treated as a realized gain
or loss. If an option is exercised, the premium paid or received is added to the
proceeds from the sale or cost of the purchase in determining whether the Trust
has realized a gain or a loss on investment transactions. The Trust, as writer
of an option, may have no control over whether the underlying securities may be
sold (call) or purchased (put) and as a result bears the market risk of an
unfavorable change in the price of the security underlying the written option.
Financial Futures Contracts: A futures contract is an agreement between two
parties to buy and sell a financial instrument for a set price on a future date.
Initial margin deposits are made upon entering into futures contracts and can be
either cash or securities. During the period the futures contract is open,
changes in the value of the contract are recognized as unrealized gains or
losses by "marking-to-market" on a daily basis to reflect the market value of
the contract at the end of each day's trading. Variation margin payments are
made or received, depending upon whether unrealized gains or losses are
11
<PAGE>
(Left Column)
incurred. When the contract is closed, the Trust records a realized gain or loss
equal to the difference between the proceeds from (or cost of) the closing
transaction and the Trust's basis in the contract.
Financial futures contracts, when used by the Trust, help in maintaining a
targeted duration. Duration is a measure of the price sensitivity of a security
or a portfolio to relative changes in interest rates. For instance, a duration
of "one" means that a portfolio's or a security's price would be expected to
change by approximately one percent with a one percent change in interest rates,
while a duration of "five" would imply that the price would move approximately
five percent in relation to a one percent change in interest rates. Futures
contracts can be sold to effectively shorten an otherwise longer duration
portfolio. In the same sense, futures contracts can be purchased to lengthen a
portfolio that is shorter than its duration target. Thus, by buying or selling
futures contracts, the Trust can effectively "hedge" more volatile positions so
that changes in interest rates do not change the duration of the portfolio
unexpectedly.
The Trust may invest in financial futures contracts primarily for the purpose
of hedging its existing portfolio securities or securities the Trust intends to
purchase against fluctuations in value caused by changes in prevailing market
interest rates. Should interest rates move unexpectedly, the Trust may not
achieve the anticipated benefits of the financial futures contracts and may
realize a loss. The use of futures transactions involves the risk of imperfect
correlation in movements in the price of futures contracts, interest rates and
the underlying hedged assets. The Trust is also at risk of not being able to
enter into a closing transaction for the futures contract because of an illiquid
secondary market. In addition, since futures are used to shorten or lengthen a
portfolio's duration, there is a risk that the portfolio may have temporarily
performed better without the hedge or that the Trust may lose the opportunity to
realize appreciation in the market price of the underlying positions.
Forward Currency Contracts: The Trust enters into forward currency contracts
primarily to facilitate settlement of purchases and sales of foreign securities.
A forward contract is a commitment to purchase or sell a foreign currency at a
future date (usually the security transaction settlement date) at a negotiated
forward rate. In the event that a security fails to settle within the normal
settlement period, the forward currency contract is renegotiated at a new rate.
The gain or loss arising from the difference between the settlement value of the
original and renegotiated forward contracts is isolated and is included in net
realized losses from foreign currency transactions. Risks may arise as a result
of the potential inability of the counterparties to meet the terms of their
contract.
(Right Column)
Forward currency contracts, when used by the Trust, help to manage the overall
exposure to the foreign currency backing many of the investments held by the
Trust (The Canadian dollar). Forward currency contracts are not meant to be used
to eliminate all of the exposure to the Canadian dollar, rather they allow the
Trust to limit its exposure to foreign currency within a narrow band to the
objectives of the Fund.
Foreign Currency Translation: Canadian dollar ("C$") amounts are translated into
United States dollars on the following basis:
(i) market value of investment securities, other assets and liabilities-at
the New York City noon rates of exchange.
(ii) purchases and sales of investment securities, income and expenses-at
the rates of exchange prevailing on the respective dates of such
transactions.
The Trust isolates that portion of the results of operations arising as a
result of changes in the foreign exchange rates from the fluctuations arising
from changes in the market prices of securities held at period end. Similarly,
the Trust isolates the effect of changes in foreign exchange rates from the
fluctuations arising from changes in the market prices of portfolio securities
sold during the period.
Net realized and unrealized foreign exchange losses of $14,132,212 include
realized foreign exchange gains and losses from sales and maturities of
portfolio securities, maturities of reverse repurchase agreements, sales of
foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, the difference between the amounts
of interest and discount recorded on the Trust's books and the US dollar
equivalent amounts actually received or paid and changes in unrealized foreign
exchange gains and losses in the value of portfolio securities and other assets
and liabilities arising as a result of changes in the exchange rate.
Foreign security and currency transactions may involve certain considerations
and risks not typically associated with those of domestic origin, including
unanticipated movements in the value of the Canadian dollar relative to the U.S.
dollar.
The exchange rate for the Canadian dollar at April 30, 1995 was US$.7355 to
C$1.00.
Short Sales: The Trust may make short sales of securities as a method of hedging
potential price declines in similar securities owned. When the Trust makes a
short sale, it may borrow the security sold short and deliver it to the
broker-dealer through which it made the short sale as collateral for its
obligation to deliver the security upon conclusion of the sale. The Trust may
have to pay a fee to borrow the particular securities and may be obligated to
pay over any payments received on such borrowed securities. A gain, limited to
the price at which the Trust sold the security short, or a loss,
12
<PAGE>
(Left Column)
unlimited as to dollar amount, will be recognized upon the termination of a
short sale if the market price is greater or less than the proceeds originally
received.
Security Lending: The Trust may lend its portfolio securities to qualified
institutions. The loans are secured by least equal, at all times, to the market
value of the securities loaned. The Trust may bear the risk of delay in recovery
of, or even loss of rights in, the securities loaned should the borrower of the
securities fail financially. The Trust receives compensation for lending its
securities in the form of interest on the loan. The Trust also continues to
receive interest on the securities loaned, and any gain or loss in the market
price of the securities loaned that may occur during the term of the loan will
be for the account of the Trust.
Mortgage Swaps: Mortgage swaps are a variation on interest rate swaps. In a
simple interest rate swap, one investor pays a floating rate of interest on a
notional principal amount and receives a fixed rate of interest on the same
notional principal amount for a specified period of time. Alternatively, an
investor may pay a fixed rate and receive a floating rate. Rate swaps were
conceived as asset/liability management tools. In more complex swaps, the
notional principal amount may decline (or amortize) over time. Mortgage swaps
combine the fixed/floating concept with an amortizing feature that is indexed to
mortgage securities. Scheduled amortization and prepayments on the index pools
reduce the notional amount.
During the term of the swap, changes in the value of the swap are recognized
as unrealized gains or losses by "marking-to-market" to reflect the market value
of the swap. When the swap is terminated, the Trust will record a realized gain
or loss equal to the difference between the proceeds from (or cost of) the
closing transaction and the Trust's basis in the contract, if any.
Mortgage swaps are used by the Trust to enhance its income earning ability by
effectively owning mortgage pass-throughs and locking-in the financing rate at a
very attractive spread to market levels. This allows mortgage pass-throughs to
be held more cheaply than if they were owned outright and financed, but at a
decreased level of liquidity.
The Trust is exposed to credit loss in the event of non-performance by the
other party to the mortgage swap. However, the Trust does not anticipate
non-performance by any counterparty.
Securities Transactions and Investment Income: Security transactions are
recorded on the trade date. Realized and unrealized gains and losses are
calculated on the identified cost basis. Interest income is recorded on the
accrual basis, and the Trust accretes discount or amortizes premium on
securities purchased using the interest method.
(Right Column)
Taxes: For federal income tax purposes, substantially all of the Trust's
Canadian transactions are accounted for using the Canadian dollar as the
functional currency. Accordingly, only realized currency gains and losses
resulting from the repatriation of Canadian dollars into United States dollars
are recognized for tax purposes.
No provision has been made for United States income or excise taxes because it
is the Trust's policy to contthe requirements of the United States Internal
Revenue Code applicable to regulated investment companies and to distribute all
of its taxable income to shareholders.
Dividends and Distributions: The Trust declares and pays dividends and
distributions monthly from net investment income, realized short-term capital
gains and other sources, if necessary. Net long-term capital gains, if any, in
excess of loss carryforwards may be distributed annually. Dividends and
distributions are recorded on the ex-dividend date.
Income distributions and capital gain distributions are determined in
accordance with income tax regulations which may differ from generally accepted
accounting principles.
Reclassification of Capital Accounts: The Trust accounts for and reports
distributions to shareholders in accordance with the American Institute of
Certified Public Accountants' Statement of Position 93-2: Determination,
Disclosure, and Financial Statement Presentation of Income, Capital Gain and
Return of Capital Distributions by Investment Companies. For the six months
ended April 30, 1995 the Trust increased distributions in excess of net
investment income by $25,390,052, decreased accumulated net realized losses on
investments by $17,717 and decreased accumulated net realized and unrealized
foreign currency losses by $25,390,052 for realized foreign currency losses
incurred during the six months ended April 30, 1995. Net investment income, net
realized gains and net assets were not affected by this change.
Deferred Organization Expenses: A total of $70,000 was incurred in connection
with the organization of the Trust. These costs have been deferred and are being
amortized ratably over a period of sixty months from the date the Trust
commenced investment operations.
Note 2. Agreements
The Trust has an Investment Advisory Agreement with BlackRock Financial
Management, Inc. (the "Adviser") and an Administration Agreement with Prudential
Mutual Fund Management, Inc. ("PMF"), an indirect, wholly-owned subsidiary of
The Prudential Insurance Co. of America.
The investment advisory fee paid to the Adviser is computed weekly and payable
monthly at an annual rate of 0.60% of the Trust's average weekly net assets. The
administration fee paid to PMF is also computed weekly and payable monthly at an
annual rate of 0.10% of the Trust's average weekly net assets.
13
<PAGE>
Pursuant to the agreements, the Adviser provides continuous supervision of the
investment portfolio and pays the compensation of officers of the Trust. PMF
pays for occupancy and provides certain clerical and accounting services to the
Trust. The Trust bears all other costs and expenses.
On February 28, 1995, the Adviser was acquired by PNC Bank, NA. Following
acquisition, the Adviser has become a wholly-owned corporate subsidiary of PNC
Asset Management Group, Inc., the holding company for PNC's asset management
business.
Note 3. Portfolio
Securities And
Other Investments
Purchases and sales of investment securities, other than short-term investments,
for the six months ended April 30, 1995 aggregated $131,306,530 and
$151,868,599, respectively.
The Trust may invest without limit in securities which are not readily
marketable, including those which are restricted as to disposition under
securities law ("restricted securities") although the Trust does not expect that
such investments will generally exceed 5% of its portfolio assets. At April 30,
1995, the Trust held no illiquid or restricted securities.
The United States federal income tax basis of the Trust's investments at April
30, 1995 was $509,927,925, and accordingly, net unrealized appreciation for
federal income tax purposes was $12,936,899 (gross unrealized appreciation-
$19,600,036; gross unrealized depreciation-$6,663,137).
For federal income tax purposes, the Trust has a capital loss carryforward as
of October 31, 1994 of approximately $51,350,000 of which approximately
$7,191,000 will expire in 2000, approximately $11,408,000 will expire in 2001
and approximately $32,751,000 in 2002. Accordingly, no capital gains
distribution is expected to be paid to shareholders until net gains have been
realized in excess of such amounts.
Details of open financial futures contracts at April 30, 1995 are as follows:
<TABLE>
<CAPTION>
Value at Value at Unrealized
Number of Expiration Trade April 30, Appreciation/
Contracts Type Date Date 1995 (Depreciation)
- --------- ---- ---------- -------- --------- --------------
<S> <C> <C> <C> <C> <C>
Short positions:
5 30 Yr. U.S.
T-Bond Jun. 1995 $ 524,494 $ 526,719 $ (2,225)
386 10 Yr. U.S.
T-Note Jun. 1995 40,304,611 40,650,625 (346,014)
243 5 Yr. U.S.
T-Note Jun. 1995 25,215,318 25,287,187 (71,869)
137 Eurodollar Sep. 1995 32,041,598 32,040,875 723
168 30 Yr. U.S.
T-Bond Sep. 1995 17,560,242 17,619,000 (58,758)
------------ ------------ ------------
$115,646,263 $116,124,406 $ (478,143)
============ ============ ============
Long position:
920 C$ Jun. 1995 $ 64,575,600 $ 67,592,400 $ 3,016,800
============ ============ ============
</TABLE>
(Right Column)
Details of open forward currency purchase contracts at April 30, 1995 are as
follows:
Value at Value at
Settlement Contract Settlement April 30, Unrealized
Date to Receive Date 1995 Appreciation
- --------- ---------- ---------- --------- ------------
5/08/95 C$30,000,000 $21,320,446 $22,053,959 $ 733,513
6/21/95 35,000,000 25,197,984 25,673,621 475,637
6/21/95 10,000,000 7,320,644 7,335,320 14,676
9/20/95 40,000,000 28,024,942 29,244,425 1,219,483
----------- ----------- ----------
$81,864,016 $84,307,325 $2,443,309
=========== =========== ==========
The Trust entered into a FNMA mortgage swap with a notional amount of $150
million. Under the agreement, the Trust receives a fixed rate and pays a
floating rate. The FNMA mortgage swap settled on November 26, 1993. Details of
the swap are as follows:
<TABLE>
<CAPTION>
Current
Notional
Amount Fixed Termination Unrealized
(000) Type Rate Floating Rate Date Depreciation
- -------- ----- ---- ------------- ----------- ------------
<C> <C> <C> <C> <C> <C>
$113,964 FNMA 8% 1-mo. LIBOR minus 20 basis pts. Oct.'96 $5,692,500
</TABLE>
Note 4. Borrowings
Reverse Repurchase Agreements: The Trust enters into reverse repurchase
agreements with qualified, third party broker-dealers as determined by and under
the direction of the Trust's Board of Directors. Interest on the value of
reverse repurchase agreements issued and outstanding is based upon competitive
market rates at the time of issuance. At the time the Trust enters into a
reverse repurchase agreement, it establishes and maintains a segregated account
with the lender containing liquid high grade securities having a value not less
than the repurchase price, including accrued interest, of the reverse repurchase
agreement.
The average monthly balance of reverse repurchase agreements outstanding
during the six months ended April 30, 1995 was approximately $151,705,000 at a
weighted average interest rate of approximately 6.5%. The maximum amount of
reverse repurchase agreements outstanding at any month-end during the period was
$182,566,655 as of April 30, 1995, which was 29.9% of total assets.
Dollar Rolls: The Trust may enter into dollar rolls in which the Trust sells
securities for delivery in the current month and simultaneously contracts to
repurchase substantially similar (same type, coupon and maturity) securities on
a specified future date. During the roll period the Trust forgoes principal and
interest paid on the securities. The Trust is compensated by the interest earned
on the cash proceeds of the initial sale and by the lower repurchase price at
the future date. The Trust did not enter into any dollar roll transactions
during the six months ended April 30, 1995.
14
<PAGE>
(Left Column)
Note 5. Capital
There are 200 million shares of $.01 par value common stock authorized. Of the
36,207,093 shares outstanding at April 30, 1995, the Adviser owned 7,093 shares.
(Right Column)
Note 6. Distributions
Subsequent to April 30, 1995, the Board of Directors of the Trust declared
non-taxable return of capital distributions of $0.078125 per share payable May
31, 1995 and June 30, 1995 to shareholders of record on May 15, 1995 and June
15, 1995.
Note 7. Quarterly Data
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and
unrealized
gain (loss) on
investments,
short sales, Net increase (decrease)
futures and in net assets Dividends
Net investment options resulting from and Period end
Quarterly Total income written operations distributions Share price net asset
period income Amount Per share Amount Per share Amount Per share Amount Per share High Low value
- --------- ------ ----------------- ------------------- ----------------- ------------------ ------------ --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
November
1, 1992 to
January
31, 1993 $12,257,957 $11,103,409 $.30 $(20,281,436) $(.56) $ (9,178,027) $(.26) $11,883,168 $.3282 $14 $12-1/8 $12.53
February
1, 1993 to
April
30, 1993 12,233,171 11,167,755 .31 (8,686,937) (.24) 2,480,818 .07 11,316,527 .3126 13-7/8 11-7/8 12.30
May 1,
1993 to
July 31,
1993 11,948,635 10,804,408 .30 8,973,026 .25 19,777,434 .55 10,183,245 .2813 12-7/8 11-3/4 12.57
August
1, 1993 to
October
31, 1993 11,998,673 10,958,088 .30 (9,022,283) (.25) 1,935,805 .05 10,183,245 .2813 12-7/8 11-3/4 12.34
November
1, 1993 to
January
31, 1994 11,023,484 9,961,355 .28 8,551,846 .24 18,513,201 .52 10,183,245 .2813 12-7/8 11-1/2 12.56
February
1, 1994 to
April
30, 1994 12,992,331 12,019,388 .33 (74,815,211) (2.07) (62,795,823) (1.74) 9,730,656 .2687 12-3/8 9-7/8 10.56
May 1,
1994 to
July 31,
1994 10,452,365 9,512,328 .26 (24,965,349) (.69) (15,453,021) (.43) 9,504,225 .2625 10-3/8 9-1/4 9.86
August
1, 1994 to
October
31, 1994 8,993,160 7,964,969 .22 8,827,946 .24 16,792,915 .46 9,504,225 .2625 10-3/4 9 10.07
November
1, 1994 to
January
31, 1995 10,026,608 9,169,699 .25 (20,198,506) (.55) (11,028,807) (.30) 9,504,225 .2625 9-1/8 8-1/8 9.51
February
1, 1995 to
April
30, 1995 8,669,818 7,823,263 .22 42,296,756 1.17 50,120,019 1.39 8,825,494 .2438 9-3/4 9 10.65
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
15
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK NORTH AMERICAN GOVERNMENT INCOME TRUST INC.
DIVIDEND REINVESTMENT PLAN
- --------------------------------------------------------------------------------
Pursuant to the Trust's Dividend Reinvestment Plan (the "Plan"),
shareholders may elect to have all distributions of dividends and capital gains
automatically reinvested by State Street Bank & Trust Company (the "Plan Agent")
in Trust shares pursuant to the Plan. Shareholders who do not participate in the
Plan will receive all distributions in cash paid by check in United States
dollars mailed directly to the shareholders of record (or if the shares are held
in street or other nominee name, then to the nominee) by the custodian, as
dividend disbursing agent.
The Plan Agent serves as agent for the shareholders in administering the
Plan. After the Trust declares a dividend or determines to make a capital gain
distribution, the Plan Agent will, as agent for the participants, receive the
cash payment and use it to buy Trust shares in the open market, on the New York
Stock Exchange or elsewhere, for the participants' accounts. The Trust will not
issue 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 dividend 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 or BlackRock Financial Management
at (800) 227-7BFM. 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.
At a Special Meeting of Trust Shareholders held on February 15, 1995 the
Shareholders approved the Trusts' advisory agreement with BlackRock Financial
Management, Inc. The result of the voting is as follows:
Votes For Votes Against Abstentions
--------- ------------- -----------
24,347,827 462,461 859,571
The Annual Meeting of Shareholders was held May 16, 1995 to vote on the
following matters:
(1) To elect the four Directors as follows:
<TABLE>
<CAPTION>
Director Class Term Expiring
-------- ----- ---- --------
<S> <C> <C> <C>
Andrew F. Brimmer ..................... III 3 years 1998
Kent Dixon ............................ III 3 years 1998
Laurence D. Fink ...................... III 3 years 1998
Richard E. Cavanagh ................... I 1 year 1996
</TABLE>
Directors whose terms of office continues beyond this meeting are Frank J.
Fabozzi, James Grosfeld, James Clayburn La Force, Jr. and Ralph L.
Schlosstein.
(2) To ratify the selection of Deloitte & Touche LLP as independent public
accountants of the Trust for the fiscal year ending October31, 1995.
Shareholders elected the four Directors and ratified the selection of
Deloitte & Touche LLP. The results of the voting was as follows:
<TABLE>
<CAPTION>
Votes for Votes Against Votes Withheld
--------- ------------- --------------
<S> <C> <C> <C>
Andrew F. Brimmer ..................... 22,791,137 - 583,939
Kent Dixon ............................ 22,833,157 - 541,919
Laurence D. Fink ...................... 22,826,278 - 548,798
Richard E. Cavanagh ................... 22,829,406 - 545,670
Ratification of Deloitte & Touche LLP . 22,838,261 94,449 442,366
</TABLE>
16
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK NORTH AMERICAN GOVERNMENT INCOME TRUST INC.
INVESTMENT SUMMARY
- --------------------------------------------------------------------------------
The Trust's Investment Objective
The Trust's investment objective is to manage a portfolio of high grade
securities to achieve high monthly income consistent with preservation of
capital. The Trust will seek to achieve its objective by investing in Canadian
and U.S. dollar-denominated securities.
Who Manages the Trust?
BlackRock Financial Management, Inc. ("BlackRock") is the investment adviser for
the Trust. BlackRock is a registered investment adviser specializing in fixed
income securities. Currently, BlackRock manages over $27 billion of assets
across the government, mortgage, corporate and municipal sectors. These assets
are managed on behalf of institutional and individual investors in 21 closed-end
funds, several open-end funds and over 75 separate accounts for various clients
in the U.S. and overseas. BlackRock is a subsidiary of PNC Asset Management
Group which is a division of PNC Bank, the nation's twelfth largest banking
organization.
What Can the Trust Invest In?
The Trust will invest primarily in securities issued or guaranteed by the
federal governments of Canada and the United States, their political
subdivisions (which include the Canadian provinces) and their agencies and
instrumentalities. The Trust's investments will be either government securities
or securities rated "A" or higher at the time of investment by Standard & Poor's
or "A2" by Moody's, or securities which BlackRock deems as of comparable
quality. Under current market conditions, it is expected that the percentage of
the Trust's assets invested in Canadian dollar-denominated securities will be
between 65% and 80%. Examples of types of securities in which the Trust may
invest include Canadian and U.S. government or government agency residential
mortgage-backed securities, privately issued mortgage-backed securities,
Canadian provincial debt securities, U.S. Government securities, commercial
mortgage-backed securities, asset-backed securities and other debt securities
issued by Canadian and U.S. corporations and other entities. Under current
market conditions, BlackRock expects that the primary investments of the Trust
to be Canadian mortgage-backed securities, Canadian provincial debt securities,
U.S. government securities, securities backed by U.S. government agencies (such
as residential mortgage-backed securities), privately issued mortgage-backed
securities and commercial mortgage-backed securities.
What is the Adviser's Investment Strategy?
The Adviser will manage the assets of the Trust in accordance with the Trust's
investment objective and policies to seek to provide high monthly income
consistent with the preservation of capital. The Trust will seek to provide
monthly income that is greater than that which could be obtained by investing in
U.S. Treasury securities with an average life similar to that of the Trust's
assets. In seeking the investment objective, BlackRock actively manages the
Trust's assets in relation to market conditions and changes in general economic
conditions in Canada and the U.S., including its expectations regarding interest
rate changes and changes in currency exchange rates between the U.S. dollar and
the Canadian dollar, to attempt to take advantage of favorable investment
opportunities in each country. As such, the allocation between Canadian and U.S.
securities will change from time to time. Under current market conditions, the
average life of the Trust's assets is expected to be in the range of seven to
ten years. Under other market conditions, the Trust's average life may vary and
may not be predictable using any formula.
While the Adviser has the opportunity to hedge against currency risks associated
with Canadian securities, the Trust is intended to provide exposure to the
Canadian marketplace. As a result, historically, currency hedging has not been
widely practiced by the Trust. However, BlackRock will attempt to limit interest
rate risk by constantly monitoring the duration (or price sensitivity with
respect to changes in interest rates) of the Trust's assets so that it is within
the range of U.S. Treasury securities with average lives of seven to ten years.
In doing so, the Adviser will attempt to locate securities with better
predictability of cash flows such as U.S. commercial mortgage-backed securities.
In addition, the Canadian mortgage-backed securities in which the Trust invests
are not prepayable, contributing to the predictability of the Trust's cash
flows. Traditional residential U.S. mortgage pass-through securities make
interest and principal payments on a monthly basis and can be a source of
attractive levels of income to the Trust. While the U.S. mortgage-backed
securities in the Trust are of high credit quality, they typically offer a yield
spread over Treasuries due to the uncertainty of the timing of their cash flows
as they are subject to prepayment exposure when interest rates change and
mortgage holders refinance their mortgages or move. While U.S. mortgage-backed
securities do offer the opportunity for attractive yields, they subject a
portfolio to interest rate risk and prepayment exposure which result in
reinvestment risk when prepaid principal must be reinvested.
17
<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, Boston
Financial Data Services. Investors who wish to hold shares in a brokerage
account should check with their financial advisor to determine whether their
brokerage firm offers dividend reinvestment services.
Leverage Considerations in the Trust
Under current market conditions, leverage increases the income earned by the
Trust. The Trust employs leverage primarily through the use of reverse
repurchase agreements and dollar rolls. Leverage permits the Trust to borrow
money at short-term rates and reinvest that money in longer-term assets which
typically offer higher interest rates. The difference between the cost of the
borrowed funds and the income earned on the proceeds that are invested in longer
term assets is the benefit to the Trust from leverage. Since inception, the
range of leverage utilized by the Trust has generally been between 20% and 33%.
Leverage also increases the duration (or price volatility of the net assets) of
the Trust, which can improve the performance of the fund in a declining rate
environment, but in a rapidly rising environment it can cause net assets to
decline faster. The Trust may reduce, or unwind, the amount of leverage employed
should BlackRock consider that reduction to be in the best interests of the
Trust. BlackRock's portfolio managers continuously monitor and regularly review
the Trust's use of leverage and maintain the ability to unwind the leverage if
that course is chosen.
Special Considerations and Risk Factors Relevant to the Trust
The Trust is intended to be a long-term investment and is not a short-term
trading vehicle.
Investment Objective. Although the objective of the Trust is to provide high
monthly income consistent with preservation of capital, there can be no
assurance that this objective will be achieved.
Dividend Considerations. The income and dividends paid by the Trust are likely
to vary over time as fixed income market conditions change. Future dividends may
be higher or lower than the dividend the Trust is currently paying.
Currency Exchange Rate Considerations. Because the Trust's net asset value is
expressed in U.S. dollars, and the Trust invests a substantial percentage of its
assets in Canadian dollar-denominated assets, any change in the exchange rate
between these two currencies will have an effect on the net asset value of the
Trust. As a result, if the U.S. dollar appreciates against the Canadian dollar,
the Trust's net asset value would decrease if not offset by other gains.
Leverage. The Trust utilizes leverage through reverse repurchase agreements and
dollar rolls, which involves special risks. The Trust's net asset value and
market value may be more volatile due to its use of leverage.
Market Price of Shares. The shares of closed-end investment companies such as
the Trust trade on the New York Stock Exchange (NYSE symbol: BNA) and as such
are subject to supply and demand influences. As a result, shares may trade at a
discount or a premium to their net asset value.
Mortgage-Backed and Asset-Backed Securities. The cash flow and yield
characteristics of these securities differ from traditional debt securities. The
major differences typically include more frequent payments and the possibility
of prepayments on certain U.S. mortgage-backed securities which will change the
yield to maturity of the security.
Illiquid Securities. The Trust may invest in securities that are illiquid,
although under current market conditions the Trust expects to do so to only a
limited extent. These securities involve special risks.
Non-U.S. Securities. The Trust may invest a portion of its assets in non-U.S.
dollar-denominated securities which involve special risks such as currency,
political and economic risks, although under current market conditions does not
do so.
Antitakeover Provisions. Certain antitakeover provisions will make a change in
the Trust's business or management more difficult without the approval of the
Trust's Board of Directors and may have the effect of depriving shareholders of
an opportunity to sell their shares at a premium above the prevailing market
price.
18
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK NORTH AMERICAN GOVERNMENT INCOME TRUST INC.
GLOSSARY
- --------------------------------------------------------------------------------
Adjustable Rate Mortgage-Backed
Securities (ARMs):
Mortgage instruments with interest rates that adjust at periodic intervals at a
fixed amount over the market levels of interest rates as reflected in specified
indexes. ARMS are backed by mortgage loans secured by real property.
Asset-Backed Securities:
Securities backed by various types of receivables such as automobile and credit
card receivables.
Canadian Mortgage Securities:
Canadian Mortgage instruments which are guaranteed by the Canadian Mortgage
Housing Corporation (CMHC), a federal agency backed by the full faith and credit
of the Canadian Government.
Closed-End Fund:
Investment vehicle which initially offers a fixed number of shares and trades on
a stock exchange. The fund invests in a portfolio of securities in accordance
with its stated investment objectives and policies.
Collateralized
Mortgage Obligations (CMOs):
Mortgage-backed securities which separate mortgage pools into short-, medium-,
and long-term securities with different priorities for receipt of principal and
interest. Each class is paid a fixed or floating rate of interest at regular
intervals. Also known as multiple-class mortgage pass-throughs.
Discount:
When a fund's net asset value is greater than its stock price the fund is said
to be trading at a discount.
Dividend:
This is income generated by securities in a portfolio and distributed to
shareholders after the deduction of expenses. This Trust declares and pays
dividends on a monthly basis.
Dividend Reinvestment:
Shareholders may elect to have all distributions of dividends and capital gains
automatically reinvested into additional shares of the Trust.
FHA:
Federal Housing Administration, a government agency that facilitates a secondary
mortgage market by providing an agency that guarantees timely payment of
interest and principal on mortgages.
FHLMC:
Federal Home Loan Mortgage Corporation, a publicly owned, federally chartered
corporation that facilitates a secondary mortgage market by purchasing mortgages
from lenders such as savings institutions and reselling them to investors by
means of mortgage-backed securities. Obligations of FHLMC are not guaranteed by
the U.S. government, however; they are backed by FHLMC's authority to borrow
from the U.S. government. Also known as Freddie Mac.
FNMA:
Federal National Mortgage Association, a publicly owned, federally chartered
corporation that facilitates a secondary mortgage market by purchasing mortgages
from lenders such as savings institutions and reselling them to investors by
means of mortgage-backed securities. Obligations of FNMA are not guaranteed by
the U.S. government, however; they are backed by FNMA's authority to borrow from
the U.S. government. Also known as Fannie Mae.
GNMA:
Government National Mortgage Association, a government agency that facilitates a
secondary mortgage market by providing an agency that guarantees timely payment
of interest and principal on mortgages. GNMA's obligations are supported by the
full faith and credit of the U.S. Treasury. Also known as Ginnie Mae.
Government Securities:
Securities issued or guaranteed by the U.S. government, or one of its agencies
or instrumentalities, such as GNMA (Government National Mortgage Association),
FNMA (Federal National Mortgage Association) and FHLMC (Federal Home Loan
Mortgage Corporation).
19
<PAGE>
Interest-Only Securities (I/O):
Mortgage securities that receive only the interest cash flows from an underlying
pool of mortgage loans or underlying pass-through securities. Also known as a
STRIP and classified as a derivative.
Market Price:
Price per share of a security trading in the secondary market. For a closed-end
fund, this is the price at which one share of the fund trades on the stock
exchange. If you were to buy or sell shares, you would pay or receive the market
price.
Mortgage Dollar Rolls:
A mortgage dollar roll is a transaction in which the Trust sells mortgage-backed
securities for delivery in the current month and simultaneously contracts to
repurchase substantially similar (although not the same) securities on a
specified future date. During the "roll" period, the Trust does not receive
principal and interest payments on the securities, but is compensated for giving
up these payments by the difference in the current sales price (for which the
security is sold) and lower price that the Trust pays for the similar security
at the end date as well as the interest earned on the cash proceeds of the
initial sale.
Mortgage Pass-Throughs:
Mortgage-backed securities issued by Fannie Mae, Freddie Mac or Ginnie Mae.
Multiple-Class Pass-Throughs:
Collateralized Mortgage Obligations.
Net Asset Value (NAV):
Net asset value is the total market value of all securities and other assets
held by the Trust, plus income accrued on its investments, minus any liabilities
including accrued expenses, divided by the total number of outstanding shares.
It is the underlying value of a single share on a given day. Net asset value for
the Trust is calculated weekly and published in Barron's on Saturday and The New
York Times or The Wall Street Journal each Monday.
Principal-Only Securities (P/O):
Mortgage securities that receive only the principal cash flows from an
underlying pool of mortgage loans or underlying pass-through securities. Also
known as a STRIP and classified as a derivative.
Project Loans:
Mortgages for multi-family, low- to middle-income housing.
Premium:
When a fund's stock price is greater than its net asset value, the fund is said
to be trading at a premium.
Residuals:
Securities issued in connection with collateralized mortgage obligations that
generally represent the excess cash flow from the mortgage assets underlying the
CMO after payment of principal and interest on the other CMO securities and
related administrative expenses.
Reverse Repurchase Agreements:
In a reverse repurchase agreement, the Trust sells securities and agrees to
repurchase them at a mutually agreed date and price. During this time, the Trust
continues to receive the principal and interest payments from that security. At
the end of the term, the Trust receives the same securities that were sold for
the same initial dollar amount plus interest on the cash proceeds of the initial
sale.
Strips:
Arrangements in which a pool of assets is separated into two classes that
receive different proportions of the interest and principal distribution from
underlying mortgage-backed securities. IO's and PO's are examples of strips.
20
<PAGE>
- --------------------------------------------------------------------------------
BLACKROCK FINANCIAL MANAGEMENT, INC.
SUMMARY OF CLOSED-END FUNDS
- --------------------------------------------------------------------------------
Taxable Trusts
- --------------------------------------------------------------------------------
Maturity
Perpetual Trusts Stock Symbol Date
------------ --------
The BlackRock Income Trust BKT N/A
The BlackRock North American Government Income Trust BNA N/A
Term Trusts
The BlackRock 1998 Term Trust BBT 12/98
The BlackRock 1999 Term Trust BNN 12/99
The BlackRock Target Term Trust BTT 12/00
The BlackRock 2001 Term Trust BLK 06/01
The BlackRock Strategic Term Trust BGT 12/02
The BlackRock Investment Quality Term Trust BQT 12/04
The BlackRock Advantage Term Trust BAT 12/05
The BlackRock Broad Investment Grade 2009 Term Trust BCT 12/09
- --------------------------------------------------------------------------------
Tax-Exempt Trusts
- --------------------------------------------------------------------------------
Maturity
Perpetual Trusts Stock Symbol Date
------------ --------
The BlackRock Investment Quality Municipal Trust BKN N/A
The BlackRock California Investment Quality Municipal Trust RAA N/A
The BlackRock Florida Investment Quality Municipal Trust RFA N/A
The BlackRock New Jersey Investment Quality Municipal Trust RNJ N/A
The BlackRock New York Investment Quality Municipal Trust RNY N/A
Term Trusts
The BlackRock Municipal Target Term Trust BMN 12/06
The BlackRock Insured Municipal 2008 Term Trust BRM 12/08
The BlackRock California Insured Municipal 2008 Term Trust BFC 12/08
The BlackRock Florida Insured Municipal 2008 Term Trust BRF 12/08
The BlackRock New York Insured Municipal 2008 Term Trust BLN 12/08
The BlackRock Insured Municipal Term Trust BMT 12/10
If you would like further information
please do not hesitate to call BlackRock at (800) 227-7BFM
21
<PAGE>
- --------------------------------------------------------------------------------
BLACKROCK FINANCIAL MANAGEMENT, INC. AN OVERVIEW
- --------------------------------------------------------------------------------
BlackRock Financial Management (BlackRock) is a registered investment
adviser which specializes in managing high quality fixed income securities, both
taxable and tax exempt. BlackRock currently manages over $27 billion of assets
in 111 portfolios of government, mortgage, corporate and municipal securities.
These assets are managed on behalf of many individual investors in twenty-one
closed-end funds and several open-end funds and on behalf of more than 75
institutional clients in the United States and overseas. BlackRock's
institutional investor base includes Chrysler Corporation Master Retirement
Trust, General Retirement System of the City of Detroit, State Treasurer of
Florida, Ford Motor Company Pension Plan, General Electric Pension Trust and
Unisys Corporation Master Trust.
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 markets, 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 proprietary 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 proprietary analytical tools are used for
evaluating, investing in and designing investment strategies and portfolios 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.
If you would like further information
please do not hesitate to call BlackRock at (800) 227-7BFM
22
<PAGE>
(Left Column)
BlackRock
Directors
Laurence D. Fink, Chairman
Andrew F. Brimmer
Richard E. Cavanagh
Kent Dixon
Frank J. Fabozzi
James Grosfeld
James Clayburn La Force, Jr.
Ralph L. Schlosstein
Officers
Ralph L. Schlosstein, President
Scott Amero, Vice President
Keith T. Anderson, Vice President
Michael C. Huebsch, Vice President
Robert S. Kapito, Vice President
Richard M. Shea, Vice President/Tax
Henry Gabbay, Treasurer
James Kong, Assistant Treasurer
Kevin J. Mahoney, Assistant Treasurer
Karen H. Sabath, Secretary
Investment Adviser
BlackRock Financial Management, Inc.
345 Park Avenue
New York, NY 10154
(800) 227-7BFM
Administrator
Prudential Mutual Fund Management, Inc.
One Seaport Plaza
New York, NY 10292
Custodian and Transfer Agent
State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171
(800) 699-1BFM
Independent Auditors
Deloitte & Touche LLP
2 World Financial Center
New York, NY 10281
Legal Counsel
Skadden, Arps, Slate, Meagher & Flom
919 Third Avenue
New York, NY 10022
The accompanying financial statements as of
April 30, 1995 were not audited and, accordingly,
no opinion is expressed on them.
This report is for shareholder information.
This is not a prospectus intended for use in
the purchase or sale of any securities.
The BlackRock North American
Government Income Trust Inc.
One Seaport Plaza
New York, NY 10292
092475-10-2
(Right Column)
The BlackRock
North American
Government Income
Trust Inc.
- ----------------------
Semi-Annual Report
April 30, 1995
