--------------------------------------------------------------------------------
THE BLACKROCK INSURED MUNICIPAL TERM TRUST INC.
SEMI-ANNUAL REPORT TO SHAREHOLDERS
REPORT OF INVESTMENT ADVISER
--------------------------------------------------------------------------------
July 14, 1995
Dear Shareholder,
The fixed income markets benefitted from extremely bullish sentiment and
rallied during the semi-annual period between January 1, 1995 and June 30, 1995.
The U.S. economy appears to have responded to the Fed's vigilance toward
inflation with low absolute levels of inflation and moderate rates of growth.
This scenario is suggestive of a "soft landing" for the economy, which has
sparked a significant Treasury market rally and resulted in overall strength in
most fixed income markets. Closed-end bond funds responded to the broader
markets by staging a significant rebound during the first six months of 1995
from their all-time low stock prices during the fourth quarter of 1994.
BlackRock Financial Management, Inc. your Trust's investment adviser, is
pleased to report that its acquisition by PNC Bank, N.A. ("PNC") was officially
completed on February 28, 1995. PNC is a commercial bank whose principal office
is in Pittsburgh, Pennsylvania and is wholly-owned by PNC Bank Corp., a bank
holding company. The merger was structured to assure continuity of performance
and service through stability of our organization. BlackRock retains its name
and continues to operate out of its New York office. All members of BlackRock's
management team have signed long-term employment contracts and will continue to
be responsible for managing BlackRock's business so that shareholders will
notice no changes in the management of the Trust.
You will note several enhancements to the Trust's semi-annual report
designed to improve the report's usefulness to you. The letter to shareholders
which reviews the markets and the Trust's investment strategy over the
semi-annual period is provided by the Trust's portfolio managers. In addition,
we have included an investment summary section which provides a synopsis of the
Trust's investment objectives and guidelines and reviews its investment
strategy. We appreciate your investment in The BlackRock Insured Municipal Term
Trust Inc. and look forward to continuing to serve your financial needs.
Sincerely,
Laurence D. Fink Ralph L. Schlosstein
Chairman President
1
<PAGE>
July 14, 1995
Dear Shareholder,
We are pleased to present the semi-annual report for The BlackRock Insured
Municipal Term Trust Inc. ("BMT" or the "Trust") for the period ended June 30,
1995. The past six months have witnessed a tremendous turnaround from the poor
performance of fixed income markets during 1994. At the end of 1994, the Trust
was trading at a stock price of $8.50, but had risen to $10.00 as of June 30.
The net asset value of the fund has responded to the rally in the municipal
markets and has increased since the start of the year from $9.73 to $10.54 at
the end of the second quarter.
As of the date of this letter, the Trust had a stock price of $9.75 per
share, and was trading at a 9.05% discount to its net asset value of $10.72 per
share. This discount reflects the weakness in stock prices of closed-end
municipal bond funds, with more than 90% of such funds currently trading at
discounts to net asset value according to Lipper Analytical Services, Inc. The
Trust's current monthly dividend per share is $0.05208, which is equivalent to
an annualized yield of 6.41% on the current stock price and a taxable equivalent
yield of 10.61% based on a Federal 39.6% tax bracket.
The Trust's dividend has remained unchanged since its inception in February
1992 despite the extreme volatility of the fixed income markets. In addition,
the Trust remains on track to achieve its primary objective to return $10 per
share to investors on or about December 31, 2010. While it will fluctuate over
time, the Fund's current net asset value is well above its 2010 target.
The following summary provides a review of the fixed income markets over the
past six months as well as the trading activity in the Trust's portfolio that
has taken place since our last shareholder's report. This information should
provide you with a greater understanding of the types of active management
strategies we employ at BlackRock.
The Fixed Income Markets
In sharp contrast to 1994, the fixed income markets have rallied
substantially year-to-date, largely the result of a general comfort level with
the rate of inflation. In fact, the Federal Reserve recently eased its monetary
policy, modestly lowering the Federal funds target rate by 25 basis points (or
0.25%) to 5.75% on July 7, after one and a half years of exercising tighter
monetary control through seven consecutive interest rate increases. The move
comes as a response to successive weak economic reports on unemployment and
manufacturing inventories which imply a slow rate of growth in the economy and
the Federal Reserve's concern over a possible recession.
The municipal market showed strong performance for the first two quarters of
1995, but remained overshadowed by the rally in the Treasury market. From
December 31, 1994 to March 31, 1995, yields across maturities of AAA general
obligation bonds fell over 63 basis points. However, during the second quarter
the AAA muni curve steepened as short and intermediate term municipal securities
rallied and the yield on 30 year AAA municipal bonds remained virtually
unchanged, despite an 81 basis point fall in the Treasury long bond.
The demand for short-term paper stems principally from current concerns
about tax reform proposals, particularly the creation of a "flat tax." Some
versions of this proposal would eliminate the taxation of all investment income,
which would eliminate the current tax benefits of municipal bonds versus
Treasuries and other taxable investments. This could result in the
underperformance of the municipal market if the flat tax becomes a pivotal 1996
Presidential campaign issue. While actual tax reform is at best two years away,
we will continue to actively follow the situation because investor concerns
about tax reform could cause dislocations in the municipal market, creating
possible buying opportunities for the Trust. At the close of the second quarter,
the municipal market had priced in a 20-21% flat tax rate on investment income.
BlackRock believes that the flat tax reform will not pass in its current form of
pre-election year rhetoric, but also believes it is essential to be aware of its
effects upon the trading environment for municipal securities.
The municipal market had anticipated benefits from seasonal summer demand of
approximately $65 billion in coupon payments and redemptions in June and July
looking for reinvestment, but this demand did not fully materialize as the
rallying stock market drew the attention of retail investors. Supply was very
low, as new issuance of municipal debt is expected to be 35% lower than last
year. The fears of tax reform outweigh these factors as municipal securities
currently trade cheap relative to their taxable counterparts.
The Trust's Portfolio and Investment Strategy
The Trust invests in a portfolio of high credit quality (AAA) tax-exempt
general obligation and revenue bonds. The securities in the portfolio are
insured as to timely payment of interest and principal, and currently 100% are
not subject to the Alternative Minimum Tax (AMT). BlackRock has managed the
Trust's portfolio to selectively modify its allocation to certain sectors,
issuers, revenue sources and types of bonds. The following chart illustrates the
changes in the sector allocation of the portfolio during the fiscal period.
2
<PAGE>
------------------------------------------------------------
The BlackRock Insured Municipal Term Trust Inc.
------------------------------------------------------------
Sector June 30, 1995 December 31, 1994
------------------------------------------------------------
City, County and State 29% 29%
------------------------------------------------------------
Hospital 17% 17%
------------------------------------------------------------
Water & Sewer 12% 13%
------------------------------------------------------------
Utility 11% 11%
------------------------------------------------------------
Lease Revenue 9% 9%
------------------------------------------------------------
Tax Revenue 8% 8%
------------------------------------------------------------
Education 4% 4%
------------------------------------------------------------
Housing 4% 3%
------------------------------------------------------------
Miscellaneous Revenue 4% 4%
------------------------------------------------------------
Transportation 2% 2%
------------------------------------------------------------
Consistent with the Trust's objective to return $10 on or about December 31,
2010, the Trust's portfolio consists of securities with average maturities of
approximately 14 years and ratings of "AAA" by Standard & Poor's Corporation or
Moody's Investors Services or securities that are insured by a municipal bond
insurance company whose long-term obligations are rated "AAA." In addition, the
Trust is rated AAAf by Standard & Poor's.
To enhance income, the Trust utilizes leverage through the issuance of
preferred stock, through which we can borrow at short-term tax-exempt rates and
earn the difference between that cost of borrowing and the yield on longer-term
assets purchased with those borrowings. The degree to which the Trust can
benefit from its use of leverage affects the ability of the Trust to pay high
monthly income and, as a result, sustained large increases in short-term rates
would negatively impact the amount of income that the Trust can derive from its
use of leverage. We will keep you informed of the effects, if any, on the
Trust's dividend paying abilities over time.
We thank you for your investment in The BlackRock Insured Municipal Term
Trust Inc. Please feel free to contact us at (800) 227-7BFM (7236) if you have
specific questions which were not addressed in this report.
Robert S. Kapito Kevin Klingert
Vice Chairman and Portfolio Manager Principal and Portfolio Manager
BlackRock Financial Management, Inc. BlackRock Financial Management, Inc.
--------------------------------------------------------------------------------
The BlackRock Insured Municipal Term Trust Inc.
--------------------------------------------------------------------------------
Symbol on New York Stock Exchange: BMT
--------------------------------------------------------------------------------
Initial Offering Date: February 20, 1992
--------------------------------------------------------------------------------
Closing Stock Price as of 6/30/95: $10.00
--------------------------------------------------------------------------------
Net Asset Value as of 6/30/95: $10.54
--------------------------------------------------------------------------------
Yield on Closing Stock Price as of 6/30/95 ($10.00)1: 6.25%
--------------------------------------------------------------------------------
Current Monthly Distribution per Common Share2: $0.05208
--------------------------------------------------------------------------------
Current Annualized Distribution per Common Share2: $0.62496
--------------------------------------------------------------------------------
---------
1Yield on Closing Stock Price is calculated by dividing the current annualized
distribution per share by the closing stock price per share.
2Dividend is not constant and is subject to change.
3
<PAGE>
--------------------------------------------------------------------------------
The BlackRock Insured Municipal Term Trust Inc.
Portfolio of Investments
June 30, 1995
(Unaudited)
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
Standard Principal
& Poor's Amount Value
Rating (000) Description (Note 1)
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
LONG-TERM INVESTMENTS-145.0%
Alabama-1.2%
AAA $ 3,000 Mobile County, G.O., 6.70%, 2/01/00\d, MBIA................................... $ 3,301,110
------------
Arizona-1.6%
AAA 4,180 University of Arizona Med. Ctr. Hosp. Rev., 6.25%, 7/01/10, MBIA.............. 4,379,135
------------
California-10.5%
AAA 4,500 California St., G.O., 6.80%, 11/01/10, FGIC................................... 4,869,630
AAA 3,400 California St. Pub. Wks., 6.60%, 12/01/09, AMBAC.............................. 3,658,978
AAA 6,100 Contra Costa Tran. Auth., 6.50%, 3/01/09, FGIC................................ 6,742,147
AAA 3,500 Eastern Municipal Wtr. Dist., 6.50%, 7/01/09, FGIC............................ 3,671,115
AAA 3,065 Los Angeles County Leasing Corp., 4.05%\d\d, 12/01/10, AMBAC.................. 3,090,041
AAA 3,000 San Francisco Bay Area Rapid Trans., 6.75%, 7/01/09, AMBAC.................... 3,222,870
AAA 3,500 Sonoma County Correctional Fac., C.O.P., 3.55%\d\d, 11/15/12, AMBAC........... 3,388,035
------------
28,642,816
------------
District of Columbia-1.4%
AAA 3,500 District of Columbia, Ser. A, G.O., 6.875%, 6/01/00\d, MBIA................... 3,896,200
------------
Florida-9.4%
AAA 10,750 Broward County Sch. Bd., 6.50%, 7/01/10, AMBAC................................ 11,465,950
AAA 12,195 Jacksonville Excise Taxes Rev., 6.50%, 10/01/10, AMBAC........................ 13,023,284
AAA 1,000 Volusia County Edl. Fac., 6.50%, 10/15/10, CONNIE LEE......................... 1,062,550
------------
25,551,784
------------
Georgia-2.7%
AAA 5,000 Henry County Hosp. Auth. Rev., 6.375%, 7/01/09, FGIC.......................... 5,235,050
AAA 2,000 Macon Bibb County Hosp., 6.75%, 8/01/00\d, FGIC............................... 2,201,080
------------
7,436,130
------------
Illinois-14.0%
AAA 7,000 Chicago, Residential, Zero Coupon, 10/01/09, MBIA............................. 2,658,250
Cook County, G.O., MBIA,
AAA 7,000 6.50%, 11/15/10............................................................. 7,427,910
AAA 4,500 7.00%, 11/01/00\d .......................................................... 5,066,910
AAA 5,000 Cook County, Community Schs., 6.50%, 01/01/10, FGIC........................... 5,206,600
AAA 5,000 Illinois Edl. Facs. Auth. Rev., 4.125%\d\d, 7/01/13, FGIC..................... 4,730,500
See Notes to Financial Statements
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
Standard Principal
& Poor's Amount Value
Rating (000) Description (Note 1)
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Illinois (cont'd)
Illinois Hlth. Facs. Auth. Rev., FGIC,
AAA $ 3,000 Ser. A, 6.75%, 1/01/10...................................................... $ 3,173,820
AAA 1,750 Ser. C, 6.75%, 1/01/10...................................................... 1,851,395
AAA 7,980 Kendell Kane Cnty. Sch., 6.25%, 9/01/11, FGIC................................. 8,109,515
------------
38,224,900
------------
Indiana-3.1%
AAA 1,340 Columbus Sch. Bd., 6.625%, 7/01/11, AMBAC..................................... 1,409,492
AAA 3,750 Indiana St. Edl. Facs. Auth., 6.60%, 1/01/11, MBIA............................ 3,929,925
AAA 3,000 Monroe County Bloomington Hosp., 6.65%, 5/01/10, MBIA......................... 3,165,720
------------
8,505,137
------------
Louisiana-6.7%
Louisiana St., Ser. A, G.O., AMBAC,
AAA 4,000 6.50%, 5/01/09.............................................................. 4,235,560
AAA 10,385 6.50%, 5/01/10.............................................................. 10,984,422
AAA 2,905 New Orleans Pub. Impt., G.O., 6.60%, 9/01/11, FGIC............................ 3,069,104
------------
18,289,086
------------
Massachusetts-16.5%
AAA 2,100 Boston, Ser. A, G.O., 6.50%, 7/01/02\d, AMBAC................................. 2,244,480
Massachusetts St. Hlth. & Edl. Facs. Auth., MBIA,
AAA 7,000 6.50%, 7/01/10.............................................................. 7,393,010
AAA 3,250 7.25%, 7/01/10.............................................................. 3,564,177
Massachusetts St. Hsg. Fin. Agcy., FNMA Collateral,
AAA 5,000 Ser. H, 6.75%, 11/15/12..................................................... 5,223,200
AAA 5,500 Residential Dev. A, 6.875%, 11/15/11........................................ 5,807,615
AAA 600 Residential Dev. C, 6.875%, 11/15/11........................................ 632,718
AAA 7,630 Massachusetts St. Wtr. Res., Ser. B, 6.25%, 11/01/10, MBIA.................... 7,924,213
AAA 1,220 Massachusetts St., Refunding, 6.75%, 8/01/09, AMBAC........................... 1,314,794
AAA 7,865 Massachusetts St., Ser. C, G.O., 6.70%, 11/01/09, AMBAC....................... 8,678,634
AAA 2,350 Massachusetts St., Ser. D, G.O., 6.00%, 7/01/12, MBIA......................... 2,373,524
------------
45,156,365
------------
Michigan-4.1%
AAA 2,375 Chippewa Valley Sch., Sch. Bldg. & Site, 6.375%, 5/01/01\d, FGIC.............. 2,601,670
AAA 900 Ser. A, 6.50%, 11/01/12, MBIA............................................... 938,898
AAA 2,040 6.45%, 11/01/07, AMBAC ..................................................... 2,207,035
AAA 2,050 6.65%, 11/01/09, AMBAC ..................................................... 2,214,328
AAA 3,000 Western Township Utils. Auth. Sewer Dis. Sys., 6.50%, 1/01/10, CGIC........... 3,130,560
------------
11,092,491
------------
See Notes to Financial Statements
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
Standard Principal
& Poor's Amount Value
Rating (000) Description (Note 1)
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Mississippi-0.7%
AAA $ 1,800 Harrison County Waste Wtr. Mgmt., 6.75%, 2/01/11, FGIC........................ $ 1,922,238
------------
Nevada-7.4%
AAA 4,000 Clark County, G.O., 6.50%, 6/01/10, AMBAC..................................... 4,238,320
AAA 5,215 Clark County Arpt., 6.25%, 6/01/01\d, FGIC.................................... 5,625,369
Clark County Sch. Dist., MBIA,
AAA 4,185 6.75%, 6/15/09.............................................................. 4,540,097
AAA 5,175 7.00%, 6/01/01\d ........................................................... 5,820,012
------------
20,223,798
------------
New Jersey-0.8%
AAA 2,000 Hudson County Correctional Fac., C.O.P., 6.50%, 12/01/11, MBIA................ 2,117,720
------------
New York-11.2%
New York St. Envrmntl Pollution,
AAA 6,155 6.70%, 5/15/09.............................................................. 6,811,923
AAA 4,965 6.80%, 5/15/10.............................................................. 5,453,804
New York St. Medicare Facs., AMBAC,
AAA 9,715 6.60%, 8/15/09.............................................................. 10,449,940
AAA 2,695 6.625%, 2/15/10............................................................. 2,880,874
AAA 4,500 New York, Ser. B, G.O., 6.95%, 8/15/12, MBIA.................................. 4,932,585
------------
30,529,126
------------
Ohio-6.2%
AAA 12,000 Cleveland Wtrwks. Rev., First Mtg., Ser. F, 6.50%, 1/01/11, AMBAC............. 12,606,840
AAA 3,900 Lucas County Hosp. Rev. Impt.-St. Vincent Med. Ctr., 6.50%, 8/15/02\d,
MBIA........................................................................ 4,264,728
------------
16,871,568
------------
Oklahoma-3.1%
Oklahoma City Wtr. Utils. Tr. Wtr. & Sewer Rev., MBIA,
AAA 2,500 Ser. A, 6.375%, 7/01/12..................................................... 2,577,425
AAA 5,725 Ser. B, 6.375%, 7/01/12..................................................... 5,915,528
------------
8,492,953
------------
Pennsylvania-5.4%
AAA 5,000 Dauphin County Gen. Auth., 6.25%, 7/01/08, MBIA .............................. 5,198,650
AAA 3,000 Pittsburgh Wtr. & Sewer, 6.75%, 9/01/01\d, FGIC............................... 3,369,120
AAA 6,005 Pittsburgh, Ser. D, G.O., 6.00%, 9/01/10, AMBAC............................... 6,118,795
------------
14,686,565
------------
See Notes to Financial Statements
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
Standard Principal
& Poor's Amount Value
Rating (000) Description (Note 1)
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Rhode Island-5.0%
AAA $ 2,390 Rhode Island Clean Wtr. Protn. Fin. Agcy. Wtr. Poll. Ctl. Rev. Revolving Fd.
Pooled Ln., Issue A, 6.70%, 10/01/10, MBIA.................................. $ 2,600,631
AAA 10,000 Rhode Island St. Pub. Bldgs. Auth., St. Pub. Prjs. Rev., Ser. A, 6.75%,
2/01/00\d, AMBAC............................................................ 11,024,200
------------
13,624,831
------------
South Carolina-8.7%
Piedmont Mun. Pwr. Agcy. Elec. Rev.,
AAA 14,925 6.30%, 1/01/11, MBIA........................................................ 15,365,437
AAA 7,900 6.50%, 1/01/11, FGIC........................................................ 8,286,389
------------
23,651,826
------------
Texas-14.8%
AAA 8,530 Austin Util. Sys. Rev., 6.00%, 5/15/10, FGIC.................................. 8,593,634
AAA 1,580 Dallas County Road Improvements, G.O., 5.625%, 8/15/10........................ 1,566,396
AAA 2,500 Dallas Ft. Worth Regl. Arp. Rev., Ser. A, 7.375%, 11/01/10, FGIC.............. 2,840,200
AAA 8,000 El Paso Rfdg. & Impt., Ser A, G.O., 6.375%, 8/15/02\d, FGIC................... 8,326,240
Harris County Rfdg., FGIC,
AAA 2,585 Toll Road, Ser. B, Zero Coupon, 8/15/08..................................... 1,194,373
AAA 6,310 Toll Road Sr. Lien, Ser. A, 6.50%, 8/15/02\d ............................... 7,032,306
AAA 2,940 Toll Road Sr. Lien, Ser. A, 6.50%, 8/15/11.................................. 3,086,118
AAA 10,440 Houston Wtr. & Sewer Sys., Ser. C, Zero Coupon, 12/01/10, AMBAC............... 4,078,177
AAA 1,840 North Texas Mun. Wtr. Dist., 6.50%, 6/01/09, MBIA............................. 1,941,679
AAA 1,500 Texas Mun. Pwr. Agcy. Ref., Ser. A, 6.75%, 9/01/12, AMBAC..................... 1,633,140
------------
40,292,263
------------
Utah-1.0%
AAA 1,450 Salt Lake City Mun. Bldg. Lease, 6.15%, 10/01/10, MBIA........................ 1,485,264
AAA 3,175 Salt Lake City Wtr. Conservancy, Zero Coupon, 10/01/10, AMBAC................. 1,241,838
------------
2,727,102
------------
Virginia-3.6%
Peninsula Port Auth. Hlth. Sys. Ref., MBIA,
AAA 6,000 Riverside Hlth. Sys. Prj. A, 6.625%, 7/01/10................................ 6,386,640
AAA 3,380 Riverside Hlth. Sys. Prj. B, 6.625%, 7/01/10................................ 3,597,807
------------
9,984,447
------------
Washington-5.1%
AAA 4,650 Port of Seattle Rev., 6.60%, 8/01/10, MBIA.................................... 4,967,130
AAA 12,905 Washington St. Pub. Pwr. Supply Sys., Zero Coupon, 7/01/10, MBIA.............. 5,081,215
AAA 3,500 Washington St. Pub. Pwr. Supply Sys. Rev., Nuclear Prj. No. 1,
Ser. A, 7.00%, 7/01/11, FGIC................................................ 3,783,500
------------
13,831,845
------------
See Notes to Financial Statements
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
Standard Principal
& Poor's Amount Value
Rating (000) Description (Note 1)
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Wisconsin-0.8%
AAA $ 2,000 Wisconsin St. Hlth. & Edl. Facs. Auth. Wausau Hosp. Inc., Ser. A,
6.625%, 8/15/09, AMBAC...................................................... $ 2,111,700
------------
Total Investments-145.0% (cost $368,353,658).................................. 395,543,136
Other assets in excess of liabilities-2.6%.................................... 7,174,727
Liquidation value of preferred stock-(47.6%).................................. (130,000,000)
------------
Net Assets Applicable to Common Shareholders-100%............................. $272,717,863
============
<FN>
\d This bond is Pre-refunded. See glossary for definition.
\d\d This bond contains embedded caps. See glossary for definition.
</FN>
</TABLE>
--------------------------------------------------------------------------------
KEY TO ABBREVIATIONS
AMBAC--American Municipal Bond Assurance Corporation
CGIC--Capital Guarantee Insurance Company
CONNIE LEE--College Construction Loan Insurance Association
C.O.P.--Certificate of Participation
FGIC--Financial Guaranty Insurance Company
FNMA Collateral--Federal National Mortgage Association
G.O.--General Obligation Bond
MBIA--Municipal Bond Insurance Association
--------------------------------------------------------------------------------
See Notes to Financial Statements
8
<PAGE>
(Left column)
--------------------------------------------------------------------------------
The BlackRock Insured
Municipal Term Trust Inc.
Statement of Assets and Liabilities
June 30, 1995
(Unaudited)
--------------------------------------------------------------------------------
Assets
Investments, at value (cost $368,353,658) (Note 1)............. $395,543,136
Interest receivable............................................ 7,828,102
Prepaid assets................................................. 61,441
Deferred organization expenses and other assets................ 18,506
------------
403,451,185
------------
Liabilities
Dividends payable-common stock................................. 140,981
Dividends payable-preferred stock.............................. 106,920
Due to custodian............................................... 135,088
Advisory fee payable (Note 2).................................. 117,264
Administration fee payable (Note 2)............................ 33,504
Other accrued expenses......................................... 199,565
------------
733,322
------------
Net Investment Assets.......................................... $402,717,863
============
Net investment assets were comprised of:
Common stock:
Par value (Note 4)......................................... $ 258,856
Paid-in capital in excess of par........................... 239,833,688
Preferred stock (Note 4)..................................... 130,000,000
------------
370,092,544
Undistributed net investment income.......................... 5,959,750
Accumulated net realized loss on investments................. (523,909)
Net unrealized appreciation on investments................... 27,189,478
------------
Net investment assets, June 30, 1995......................... $402,717,863
============
Net assets applicable to common shareholders................. $272,717,863
============
Net asset value per common share:
($272,717,863 / 25,885,639 shares of
common stock issued and outstanding)......................... $10.54
======
(Right column)
--------------------------------------------------------------------------------
The BlackRock Insured
Municipal Term Trust Inc.
Statement of Operations
Six Months Ended June 30, 1995
(Unaudited)
--------------------------------------------------------------------------------
Net Investment Income
Income
Interest earned (including net discount
of $411,423)............................................... $ 12,049,152
------------
Expenses
Investment advisory.......................................... 691,253
Administration............................................... 197,501
Auction agent................................................ 161,858
Reports to shareholders...................................... 46,741
Custodian.................................................... 45,555
Directors.................................................... 25,702
Transfer agent............................................... 20,581
Audit........................................................ 16,000
Legal........................................................ 7,211
Miscellaneous................................................ 65,932
------------
Total expenses............................................... 1,278,334
------------
Net investment income.......................................... 10,770,818
------------
Realized and Unrealized Gain
on Investments (Note 3)
Net realized gain on investments............................... 193,279
Net change in unrealized appreciation on
investments.................................................. 20,593,746
------------
Net gain on investments........................................ 20,787,025
------------
Net Increase in Net Investment
Assets Resulting from Operations............................. $ 31,557,843
============
See Notes to Financial Statements
9
<PAGE>
--------------------------------------------------------------------------------
The BlackRock Insured Municipal Term Trust Inc.
Statements of Changes in Net Investment Assets
(Unaudited)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Year
Ended Ended
June 30, December 31,
1995 1994
------------ ------------
<S> <C> <C>
Increase (Decrease) in Net Investment Assets
Operations:
Net investment income......................................................... $ 10,770,818 $ 21,234,855
Net realized gain on investments.............................................. 193,279 34,933
Net change in unrealized appreciation (depreciation) on investments........... 20,593,746 (38,228,901)
------------ ------------
Net increase (decrease) in net investment assets resulting from operations.... 31,557,843 (16,959,113)
Dividends and Distributions:
To common shareholders from net investment income............................. (8,088,659) (16,177,426)
To preferred shareholders from net investment income.......................... (2,606,910) (3,705,085)
To common shareholders from net realized gains................................ - (619,662)
To preferred shareholders from net realized gains............................. - (132,459)
------------ ------------
Total increase (decrease)................................................. 20,862,274 (37,593,745)
Net Investment Assets
Beginning of period........................................................... 381,855,589 419,449,334
------------ ------------
End of period................................................................. $402,717,863 $381,855,589
============ ============
</TABLE>
See Notes to Financial Statements
10
<PAGE>
--------------------------------------------------------------------------------
The BlackRock Insured Municipal Term Trust Inc.
Financial Highlights
(Unaudited)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months February 28,
Ended Year Ended Year Ended 1992* to
June 30, December 31, December 31, December 31,
1995 1994 1993 1992
--------- -------- --------- ---------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period......................... $ 9.73 $ 11.18 $ 9.93 $ 9.40
--------- -------- --------- ---------
Net investment income...................................... .42 .82 .83 .61
Net realized and unrealized gain (loss) on investments..... .80 (1.48) 1.18 .56
--------- -------- --------- ---------
Net increase (decrease) from investment operations........... 1.22 (.66) 2.01 1.17
--------- -------- --------- ---------
Dividends from net investment income to:
Preferred shareholders..................................... (.10) (.14) (.12) (.09)
Common shareholders........................................ (.31) (.62) (.63) (.42)
Distributions from capital gains to:
Preferred shareholders..................................... - (.01) (.00)*** -
Common shareholders........................................ - (.02) (.01) -
--------- -------- --------- ---------
Total dividends and distributions............................ (.41) (.79) (.76) (.51)
--------- -------- --------- ---------
Capital charge with respect to issuance of shares............ - - - (.13)
--------- -------- --------- ---------
Net asset value, end of period**............................. $ 10.54 $ 9.73 $ 11.18 $ 9.93#
========= ======== ========= ==========
Market value, end of period**................................ $ 10.00 $ 8.50 $ 10.50 $ 9.875
========= ======== ========= ==========
TOTAL INVESTMENT RETURN\d ................................... 21.47% (13.38%) 12.99% 9.51%
RATIOS TO AVERAGE NET ASSETS
OF COMMON SHAREHOLDERS:\d\d\d
Expenses..................................................... .96%\d\d 1.04% .96% .98%\d\d
Net investment income........................................ 8.10%\d\d 7.99% 7.75% 7.52%\d\d
SUPPLEMENTAL DATA:
Average net assets of common shareholders (000).............. $268,275 $265,851 $275,162 $247,807
Portfolio turnover........................................... 1% 31% 1% 37%
Net assets of common shareholders, end of period (000)....... $272,718 $251,856 $289,449 $256,956
Preferred stock outstanding (000)............................ $130,000 $130,000 $130,000 $130,000
Asset coverage per share of preferred stock, end of period... $154,891 $146,868 $161,327 $148,829
<FN>
* Commencement of investment operations.
** NAV and market value are published in The Wall Street Journal each
Monday.
*** Actual amount paid to preferred shareholders was $0.0013 per common
share.
# Net asset value immediately after the closing of the initial public
offering was $9.38.
\d Total investment return is calculated assuming a purchase of common stock
at the current market value on the first day and a sale at the current
market price on the last day of each period reported. Dividends and
distributions, if any, are assumed for purposes of this calculation, to
be reinvested at prices obtained under the Trust's dividend reinvestment
plan. Total investment returns do not reflect brokerage commissions.
Total investment returns for periods of less than one full year are not
annualized.
\d\d Annualized.
\d\d\d Ratios calculated on the basis of income and expenses applicable to both
the common and preferred shares relative to the average net assets of
common shareholders. Ratios do not reflect the effect of dividend
payments to preferred shareholders.
The information above represents the unaudited operating performance data for a
share of common stock outstanding, total investment return, ratios to average
net assets and other supplemental data for 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.
</FN>
</TABLE>
See Notes to Financial Statements
11
<PAGE>
(Left column)
--------------------------------------------------------------------------------
The BlackRock Insured Municipal Term Trust Inc.
Notes to Financial Statements
(Unaudited)
--------------------------------------------------------------------------------
Note 1. Accounting Policies
The BlackRock Insured Municipal Term Trust Inc. (the "Trust"), a Maryland
Corporation is a diversified, closed-end management investment company. The
Trust's investment objective is to manage a portfolio of investment grade
securities that will return $10 per share to investors on or about December 31,
2010 while providing current income exempt from regular Federal income tax. The
ability of issuers of debt securities held by the Trust to meet their
obligations may be affected by economic developments in a specific state,
industry or region. No assurance can be given that the Trust's investment
objective will be achieved.
The following is a summary of significant accounting policies followed by the
Trust:
Securities Valuation: Municipal securities (including commitments to purchase
such securities on a "when-issued" basis) are valued on the basis of prices
provided by a pricing service which uses information with respect to
transactions in bonds, quotations from bond dealers, market transactions in
comparable securities and various relationships between securities in
determining values. Any securities or other assets for which such current market
quotations are not readily available are valued at fair value as determined in
good faith under procedures established by and under the general supervision and
responsibility of the Trust's Board of Directors.
Short-term securities which mature in more than 60 days are valued at current
market quotations. Short-term securities which mature in 60 days or less are
valued at amortized cost if their term to maturity from date of purchase is 60
days or less, or by amortizing their value on the 61st day prior to maturity if
their original term to maturity from date of purchase exceeded 60 days.
Option Selling/Purchasing: When the Trust sells or purchases an option, an
amount equal to the premium received or paid by the Trust is recorded as a
liability or an asset and is subsequently adjusted to the current market value
of the option written or purchased. Premiums received or paid from writing or
purchasing options which expire unexercised are treated by the Trust on the
expiration date as realized gains or losses. The difference between the premium
and the amount paid or received on effecting a closing purchase or sale
transaction, including brokerage commissions, is also treated as a realized gain
or loss. If an option is exercised, the premium paid or received is added to the
(Right column)
proceeds from the sale or cost of the purchase in determining whether the Trust
has realized a gain or a loss on investment transactions. The Trust, as writer
of an option, may have no control over whether the underlying securities may be
sold (call) or purchased (put) and as a result bears the market risk of an
unfavorable change in the price of the security underlying the written option.
Financial Futures Contracts: A futures contract is an agreement between two
parties to buy and sell a financial instrument for a set price on a future date.
Initial margin deposits are made upon entering into futures contracts and can be
either cash or securities. During the period the futures contract is open,
changes in the value of the contract are recognized as unrealized gains or
losses by "marking-to-market" on a daily basis to reflect the market value of
the contract at the end of each day's trading. Variation margin payments are
made or received, depending upon whether unrealized gains or losses are
incurred. When the contract is closed, the Trust records a realized gain or loss
equal to the difference between the proceeds from (or cost of) the closing
transaction and the Trust's basis in the contract.
The Trust may invest in financial futures contracts primarily for the purpose
of hedging its existing portfolio securities or securities the Trust intends to
purchase against fluctuations in value caused by changes in prevailing market
interest rates. Should interest rates move unexpectedly, the Trust may not
achieve the anticipated benefits of the financial futures contracts and may
realize a loss. The use of futures transactions involves the risk of imperfect
correlation in movements in the price of futures contracts, interest rates and
the underlying hedged assets.
Short Sales: The Trust may make short sales of securities as a method of hedging
potential declines in similar securities owned. When the Trust makes a short
sale, it may borrow the security sold short and deliver it to the broker-dealer
through which it made the short sale as collateral for its obligation to deliver
the security upon conclusion of the sale. The Trust may have to pay a fee to
borrow the particular securities and may be obligated to pay over any payments
received on such borrowed securities. A gain, limited to the price at which the
Trust sold the security short, or a loss, unlimited as to dollar amount, will be
recognized upon the termination of a short sale if the market price is greater
or less than the proceeds originally received.
Securities Transactions and Investment Income: Securities transactions are
recorded on the trade date. Realized
12
<PAGE>
(Left Column)
gains and losses are calculated on the identified cost basis. Interest income is
recorded on the accrual basis and the Trust amortizes premium and accretes
discount on securities purchased using the interest method.
Federal Income Taxes: It is the Trust's intention to continue to meet the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute sufficient net income to shareholders. Therefore, no
federal tax provision is required.
Dividends and Distributions: The Trust declares and pays dividends and
distributions to common shareholders monthly from net investment income, net
realized short-term capital gains and other sources, if necessary. Net long-term
capital gains, if any, in excess of loss carryforwards may be distributed
annually. Dividends and distributions are recorded on the ex-dividend date.
Dividends and distributions to preferred shareholders are accrued and determined
as described in Note 4.
Deferred Organization Expenses: A total of $70,000 was incurred in connection
with the organization of the Trust. These costs have been deferred and are being
amortized ratably over a period of sixty months from the date the Trust
commenced investment operations.
Note 2. Agreements
The Trust has an Investment Advisory Agreement with BlackRock Financial
Management Inc. (the "Adviser") and an Administration Agreement with Mitchell
Hutchins Asset Management Inc. (the "Administrator"), a wholly-owned subsidiary
of PaineWebber Incorporated.
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 the Administrator is also computed weekly
and payable monthly at an annual rate of 0.10% 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.The Administrator pays occupancy and certain
clerical and accounting costs of the Trust. The Trust bears all other costs and
expenses.
On February 28, 1995, the Adviser was acquired by PNC Bank, N.A. Following the
acquisition, the Adviser has become a wholly-owned corporate subsidiary of PNC
Asset Management Group, Inc., the holding company for PNC's asset management
businesses.
(Right Column)
Note 3. Portfolio
Securities
Purchases and sales of investment securities, other than short-term investments,
for the six months ended June 30, 1995 aggregated $6,035,731 and $5,186,567,
respectively.
The Federal income tax basis of the Trust's investments at June 30, 1995 was
substantially the same as the basis for financial reporting and, accordingly,
net unrealized appreciation for federal income tax purposes was $27,189,478;
(gross unrealized appreciation-$27,566,093; gross unrealized
depreciation-$376,615).
The Trust incurred $717,188 of realized losses on investments in the
post-October period of the year ended December 31, 1994. A tax election was made
to defer all of these losses to the year ending December 31, 1995.
Note 4. Capital
There are 200 million shares of $.01 par value common stock authorized. Of the
25,885,639 common shares outstanding at June 30, 1995, the Adviser owned 10,639
shares.
The Trust may classify or reclassify any unissued shares of common stock into
one or more series of preferred stock. On April 27, 1992 the Trust reclassified
2,600 shares of common stock and issued two series of Auction Market Preferred
Stock ("Preferred Stock") as follows: Series M7-1,300 shares and Series
M28-1,300 shares. The Preferred Stock has a liquidation value of $50,000 per
share plus any accumulated but unpaid dividends.
Dividends on Series M7 are cumulative at a rate which is reset every 7 days
based on the results of an auction. Dividends on Series M28 are also cumulative
at a rate which is reset every 28 days based on the results of an auction.
Dividend rates ranged from 3.65% to 4.30% for the six months ended June 30,
1995.
The Trust may not declare dividends or make other distributions on shares of
common stock or purchase any such shares if, at the time of the declaration,
distribution or purchase, asset coverage with respect to the outstanding
Preferred Stock would be less than 200%.
The preferred stock is redeemable at the option of the Trust, in whole or in
part, on any dividend payment date at $50,000 per share plus any accumulated or
unpaid dividends whether or not declared. The Preferred Stock is also subject to
mandatory redemption at $50,000 per share plus any accumulated or unpaid
dividends, whether or not declared, if certain requirements relating to the
composition of the assets and liabilities of the Trust as set forth in the
Articles of Incorporation are not satisfied.
The holders of Preferred Stock have voting rights equal to the holders of
common stock (one vote per share) and will
13
<PAGE>
Left Column
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.
On May 16, 1995 shareholders approved a proposal to split each share of the
Trust's Auction Rate Municipal
Right Column
Preferred Stock into two shares and simultaneously reduce each share's
liquidation preference from $50,000 to $25,000. It is expected that the stock
split will occur after the close of business on July 24, 1995.
Note 5. Dividends
And Distributions
Subsequent to June 30, 1995, the Board of Directors of the Trust declared
dividends from undistributed earnings of $0.05208 per common share payable July
31, 1995 to shareholders of record on July 14, 1995.
For the period July 1, 1995 to July 14, 1995, dividends declared and paid on
preferred shares totalled $192,829 in aggregate for the two outstanding
preferred share series.
<TABLE>
<CAPTION>
Note 6. Quarterly Data
----------------------------------------------------------------------------------------------------------------------------------
Net realized and Net increase
unrealized in net investment
Net investment gains (loss) assets resulting Share
income on investments from operations Dividends and Distributions price of Period
Per Per Per Common Preferred Common end
Quarterly Total common common common Shares Shares* Stock net asset
Period income Amount share Amount share Amount share Amount Per share Amount Per share High Low value
------ ------ -------------- -------------- -------------- ---------------- ---------------- ---------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
January 1,
1993 to
March
31,
1993 $6,016,107 $5,347,614 $.21 $ 9,814,867 $ .38 $15,162,481 $.59 $4,043,966 $.16 $ 762,825 $.03 $101/2 $ 95/8 $10.33
April 1,
1993 to
June
30,
1993 5,991,893 5,293,14 .20 10,033,306 .39 15,326,451 .59 4,044,356 .16 785,379 .03 101/4 97/8 10.73
July 1,
1993 to
September
30,
1993 5,974,893 5,321,841 .21 12,754,826 .49 18,076,667 .70 4,044,796 .16 793,899 .03 103/4 101/8 11.24
October 1,
1993 to
December
31,
1993 5,979,181 5,366,070 .21 (1,972,371) (.08) 3,393,699 .13 4,213,186 .16 808,843 .03 103/4 10 11.18
January 1,
1994 to
March
31,
1994 5,999,230 5,304,787 .20 (26,178,438) 1.01) (20,873,651)(.81) 4,044,333 .15 729,385 .03 103/4 91/2 10.19
April 1,
1994 to
June
30,
1994 6,016,513 5,339,405 .21 (1,486,903) (.06) 3,852,502 .15 4,044,359 .16 901,335 .03 101/8 91/4 10.15
July 1,
1994 to
September
30,
1994 6,043,084 5,330,459 .21 (2,450,435) (.10) 2,880,024 .11 4,044,362 .15 972,927 .04 10 9 10.07
October 1,
1994 to
December
31,
1994 5,942,087 5,260,204 .20 (8,078,192) (.31) (2,817,988)(.11) 4,664,034 .18 1,233,897 .05 91/2 81/8 9.73
January 1,
1995 to
March
31,
1995 5,951,229 5,304,114 .21 17,918,947 .69 23,223,061 .90 4,044,313 .15 1,292,588 .05 93/4 81/2 10.42
April 1,
1995 to
June
30,
1995 6,097,923 5,466,704 .21 2,868,078 .11 8,334,782 .32 4,044,346 .16 1,314,322 .05 10 91/2 10.54
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*For the six months ended June 30, 1995, the average annualized rate paid to
preferred shareholders was 4.01%.
14
<PAGE>
--------------------------------------------------------------------------------
THE BLACKROCK INSURED MUNICIPAL TERM TRUST INC.
DIVIDEND REINVESTMENT PLAN
--------------------------------------------------------------------------------
Pursuant to the Trust's Dividend Reinvestment Plan (the "Plan"), shareholders
may elect to have all distributions of dividends and capital gains reinvested by
State Street Bank and Trust Company (the "Plan Agent") in Trust shares pursuant
to the Plan. Shareholders who do not participate in the Plan will receive all
distributions in cash paid by check in United States dollars mailed directly to
the shareholders of record (or if the shares are held in street or other nominee
name, then to the nominee) by the 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 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, state or local income taxes 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 Trust at (800) 699-1BFM or BlackRock Financial Management, Inc.
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. There have been no
changes in the Trust's charter or by-laws. There have been no changes 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 advisory agreement with BlackRock Financial
Management, Inc. The result of the voting was as follows:
Votes For 21,490,169 Votes Against 374,353 Votes Withheld 793,775
The Annual Meeting of Trust shareholders was held May 16, 1995 to vote on the
following matters:
(1) To elect three Directors to serve as follows:
Director Class Term Expiring
-------- ----- ---- --------
Andrew F. Brimmer ........... III 3 years 1998
Kent Dixon .................. III 3 years 1998
Laurence D. Fink ............ III 3 years 1998
15
<PAGE>
and to elect one Director to represent the interests of the preferred
shareholders as follows:
Director Class Term Expiring
-------- ----- ---- --------
Richard E. Cavanagh ......... I 1 year 1996
Directors whose term of office continues beyond this meeting are Frank
J. Fabozzi, James Grosfeld, James Clayburn La Force, Jr. and Ralph L.
Schlosstein.
(2) To consider and act on a proposal to split each share of the Trust's
Auction Rate Preferred Stock (Preferred) into two shares and
simultaneously reduce each share's liquidation preference, as provided
in the Trust's Articles Supplementary, from $50,000 to $25,000.
(3) To ratify the selection of Deloitte & Touche LLP as independent public
accountants of the Trust for the fiscal year ending December 31, 1995.
Shareholders elected the four Directors, approved the proposal to split each
Preferred share into two shares and ratified the selection of Deloitte &
Touche LLP. The results of the voting were as follows:
Votes* For Votes* Against Votes* Withheld
---------- -------------- ---------------
Andrew F. Brimmer ...... 19,541,923 - 355,106
Kent Dixon ............. 19,579,823 - 317,206
Laurence D. Fink ....... 19,576,241 - 320,788
Richard E. Cavanagh .... 1,756 - 1
Preferred Share Split .. 1,658 99 -
Deloitte & Touche LLP .. 19,473,715 93,591 329,723
-----------
*The votes represent common and preferred shareholders voting as a single class
except for the election of Richard E. Cavanagh, and the approval of the
preferred share split which represents the votes of only the preferred
shareholders.
16
<PAGE>
--------------------------------------------------------------------------------
THE BLACKROCK INSURED MUNICIPAL TERM TRUST
INVESTMENT SUMMARY
--------------------------------------------------------------------------------
The Trust's Investment Objective
The Trust's investment objective is to provide current income exempt from
Federal income tax and to return at least $10 per share (the initial public
offering price per share) to investors on or about December 31, 2010.
Who Manages the Trust?
BlackRock Financial Management, Inc. ("BlackRock" or the "Adviser") is the
investment adviser for the Trust. BlackRock is a registered investment adviser
specializing in fixed income securities. Currently, BlackRock manages over $32
billion of assets across the government, mortgage, corporate and municipal
sectors. These assets are managed on behalf of institutional and individual
investors in 21 closed-end funds, several open-end funds and separate accounts
for more than 80 clients in the U.S. and overseas. BlackRock is a subsidiary of
PNC Asset Management Group, Inc. which is a division of PNC Bank N.A., the
nation's eleventh largest banking organization.
What Can the Trust Invest In?
The Trust intends to invest at least 80% of its total assets in municipal
obligations insured as to the timely payment of both principal and interest. The
Trust may invest up to 20% of its total assets in uninsured municipal
obligations which are rated Aaa by Moody's or AAA by S&P, or are determined by
the Adviser to be of comparable credit quality (guaranteed, escrowed, or backed
in trust).
What is the Adviser's Investment Strategy?
The Adviser will seek to meet the Trust's investment objective by managing the
assets of the Trust so as to return the initial offering price ($10 per share)
at maturity. The Trust will implement a conservative strategy that will seek to
closely match the maturity of the assets of the portfolio with the future return
of the initial investment at the end of 2010. At the Trust's termination,
BlackRock expects that the value of the securities which have matured, combined
with the value of the securities that are sold and the value of securities that
are purchased, if any, will be sufficient to return the initial offering price
to investors. On a continuous basis, the Trust will seek its objective by
actively managing its portfolio of municipal obligations and retaining a small
ammount of income each year.
In addition to seeking the return of the initial offering price, the Adviser
also seeks to provide current income exempt from Federal income tax to
investors. The portfolio managers will attempt to achieve this objective by
investing in securities that provide competitive income. In addition, leverage
will be used (in an amount up to 331/3% of total assets) to enhance the income
of the portfolio. In order to maintain competitive yields as the Trust
approaches maturity and depending on market conditions, the Adviser will attempt
to purchase securities with call protection or maturities as close to the
Trust's maturity date as possible. Securities with call protection should
provide the portfolio with some degree of protection against reinvestment risk
during times of lower prevailing interest rates. Since the Trust's primary goal
is to return the initial offering price at maturity, any cash that the Trust
receives prior to its maturity date will be reinvested in securities with
maturities which coincide with the remaining term of the Trust. Since
shorter-term securities typically yield less than longer-term securities, this
strategy will likely result in a decline in the Trust's income over time. It is
important to note that the Trust will be managed so as to preserve the integrity
of the return of the initial offering price.
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 fund through the Trust's transfer agent, Boston
Financial Data Services. Investors who wish to hold shares in a brokerage
account should check with their financial advisor to determine whether their
brokerage firm offers dividend reinvestment services.
17
<PAGE>
Leverage Considerations in a Term Trust
Under current market conditions, leverage increases the income earned by the
Trust. The Trust employs leverage primarily through the issuance of preferred
stock. Leverage permits the Trust to borrow money at short-term rates and
reinvest that money in longer-term assets which typically offer higher interest
rates. The difference between the cost of the borrowed funds and the income
earned on the proceeds that are invested in longer term assets is the benefit to
the Trust from leverage. In general, the portfolio is typically leveraged at
approximately 33-1/3% of total assets.
Leverage also increases the duration (or price volatility of the net assets) of
the Trust, which can improve the performance of the fund in a declining rate
environment, but can cause net assets to decline faster than the market in a
rapidly rising rate environment. BlackRock's portfolio managers continuously
monitor and regularly review the Trust's use of leverage and the Trust may
reduce, or unwind, the amount of leverage employed should BlackRock consider
that reduction to be in the best interests of the shareholders.
Special Considerations and Risk Factors Relevant to Term Trusts
The Trust is intended to be a long-term investment and is not a short-term
trading vehicle.
Return of Initial Investment. Although the objective of the Trust is to return
its initial offering price upon termination, there can be no assurance that this
objective will be achieved.
Dividend Considerations. The income and dividends paid by the Trust are likely
to decline to some extent over the term of the Trust due to the anticipated
shortening of the dollar-weighted average maturity of the Trust's assets.
Leverage. The Trust utilizes leverage through the issuance of preferred stock
which involves special risks. The Trust's net asset value and market value may
be more volatile due to its use of leverage.
Market Price of Shares. The shares of closed-end investment companies such as
the Trust trade on the New York Stock Exchange (NYSE symbol: BMT) and as such
are subject to supply and demand influences. As a result, shares may trade at a
discount or a premium to their net asset value.
Illiquid Securities. The Trust may invest in securities that are illiquid,
although under current market conditions the Trust expects to do so to only a
limited extent. Investing in these securities involves special risks.
Antitakeover Provisions. Certain antitakeover provisions will make a change in
the Trust's business or management more difficult without the approval of the
Trust's Board of Directors and may have the effect of depriving shareholders of
an opportunity to sell their shares at a premium above the prevailing market
price.
Municipal Obligations. Municipal obligations include debt obligations issued by
states, cities, and local authorities, and possessions and certain territories
of the United States to obtain funds for various public purposes, including the
construction of public facilities, the refinancing of outstanding obligations
and the obtaining of funds for general operating expenses and for loans to other
public institutions and facilities. The value of municipal debt securities
generally varies inversely with changes in prevailing market interest rates.
Depending on the amount of call protection that the securities in the Trust
have, the Trust may be subject to certain reinvestment risks in environments of
declining interest rates.
Alternative Minimum Tax (AMT). The Trust may invest in securities subject to
alternative minimum tax. The Trust currently holds no AMT securities.
18
<PAGE>
--------------------------------------------------------------------------------
THE BLACKROCK INSURED MUNICIPAL TERM TRUST INC.
GLOSSARY
--------------------------------------------------------------------------------
Closed-End Fund: Investment vehicle which initially offers a fixed
number of shares and trades on a stock exchange. The
fund invests in a portfolio of securities in
accordance with its stated investment objectives and
policies.
Discount: When a fund's net asset value is greater than its
stock price, the fund is said to be trading at a
discount.
Dividend: Income generated by securities in a portfolio and
distributed to shareholders after deduction of
expenses. This Trust declares and pays dividends on
a monthly basis.
Dividend Reinvestment: Shareholders may have all distributions of dividends
and capital gains automatically reinvested into
additional shares of the Trust.
Embedded Caps: Also known as additional interest municipal bonds.
These securities are intended to protect the income
that the Trust earns through leverage from
significant increase in short-term rates. The coupon
on these bonds will increase if short-term rates
rise significantly.
Market Price: Price per share of a security trading in the
secondary market. For a closed-end fund, this is the
price at which one share of the fund trades on the
stock exchange. If you were to buy or sell shares,
you would pay or receive the market price.
Net Asset Value (NAV): Net asset value is the total market value of all
securities and other assets held by the Trust, plus
income accrued on its investment, minus any
liabilities including accrued expenses, dividend 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 the U.S.
Government securities which are held in escrow and
are used to pay principal and interest on the
tax-exempt issue and to retire the bond in full at
the date indicated, typically at a premium to par.
19
<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
Keith T. Anderson, Vice President
Michael C. Huebsch, Vice President
Robert S. Kapito, Vice President
Kevin Klingert, Vice President
Richard M. Shea, Vice President/Tax
Henry Gabbay, Treasurer
James Kong, Assistant Treasurer
Karen H. Sabath, Secretary
Investment Adviser
BlackRock Financial Management, Inc.
345 Park Avenue
New York, NY 10154
(800) 227-7BFM
Administrator
Mitchell Hutchins Asset Management, Inc.
1285 Avenue of the Americas
New York, NY 10019
Custodian and Transfer Agent
State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171
(800) 669-1BFM
Auction Agent
Bankers Trust Company
4 Albany Street
New York, NY 10006
Independent Auditors
Deloitte & Touche LLP
Two World Finanical Center
New York, NY 10281-1434
Legal Counsel
Skadden, Arps, Slate, Meagher & Flom
919 Third Avenue
New York, NY 10022
The accompanying financial statements as of
June 30, 1995 were not audited and accordingly,
no opinion is expressed on them.
This report is for shareholder information.
This is not a prospectus intended for use in the
purchase or sale of any securities.
The BlackRock Insured Municipal Term Trust Inc.
c/o Mitchell Hutchins Asset Management, Inc./TEXT>
14th Floor
1285 Avenue of the Americas
New York, NY 10019
(800) 227-7BFM
092474 10 5
Right Column 092474 20 4
092474 30 3
The BlackRock
Insured Municipal
Term Trust Inc.
--------------------------------
Semi-Annual Report
June 30, 1995
