- --------------------------------------------------------------------------------
THE BLACKROCK INSURED MUNICIPAL TERM TRUST INC.
SEMI-ANNUAL REPORT TO SHAREHOLDERS
REPORT OF INVESTMENT ADVISER
- --------------------------------------------------------------------------------
July 31, 1997
Dear Trust Shareholder:
After experiencing higher interest rates in the face of a resilient stock
market and stronger economic growth for the first few months of 1997, bond
investors were comforted by more moderate economic data released during the
second quarter which allowed the bond market to recapture some of its losses.
Our outlook for the bond market is cautiously optimistic. Over the short
term, we believe that the recent rally may continue, since inflation news has
been positive and U.S. securities appear cheap relative to their global
counterparts. Additionally, Fed Chairman Greenspan appears to be comfortable
allowing the economy to expand in the absence of rising inflationary pressures.
Thus, we do not foresee another tightening in the immediate future in the
absence of a visible inflation shock. However, recent wage increases, the
buoyant stock market and record levels of consumer confidence could lead to
stronger consumer spending and overall economic growth in the third quarter.
Therefore, an uninterrupted decline in yields is by no means a certainty.
This report provides the Trust's portfolio managers an opportunity to
provide you with detailed market commentary and to review the major investment
themes of the portfolio over the past six months. We hope that you find this
report informative and look forward to serving your financial needs in the
future.
Sincerely,
/s/Laurence B. Fink /s/Ralph L. Schlosstein
- ------------------- -----------------------
Laurence D. Fink Ralph L. Schlosstein
Chairman President
1
<PAGE>
July 31, 1997
Dear Shareholder:
We are pleased to present the semi-annual report for The BlackRock Insured
Municipal Term Trust Inc. ("the Trust") for the six months ended June 30, 1997.
We would like to take this opportunity to review the Trust's stock price and net
asset value (NAV) performance, summarize developments in the fixed income
markets and discuss recent portfolio management activity.
The Trust is a diversified, actively managed closed-end bond fund whose
shares are traded on the New York Stock Exchange under the symbol "BMT". The
Trust's investment objective is to manage a portfolio of municipal debt
securities that will return $10 per share (an amount equal to the Trust's
initial public offering price) to investors on or about December 31, 2010, while
providing current income exempt from regular federal income tax. The Trust seeks
to achieve this objective by investing in high credit quality ("AAA" or insured
to "AAA") tax-exempt general obligation and revenue bonds issued by city, county
and state municipalities throughout the United States.
The table below summarizes the changes in the Trust's stock price and net
asset value over the period:
================================================================================
6/30/97 12/31/96 CHANGE HIGH LOW
------- -------- ------ ---- ---
STOCK PRICE $10.50 $10.125 3.70% $10.625 $10.00
- --------------------------------------------------------------------------------
NET ASSET VALUE (NAV) $10.91 $10.87 0.37% $10.99 $10.63
================================================================================
THE FIXED INCOME MARKETS
The strong economic growth witnessed during the fourth quarter of 1996
spilled over into the first quarter of 1997. Although inflationary measures such
as commodity, producer and consumer prices remained relatively stable, labor
markets continued to strengthen. In an effort to subdue this growth, the Federal
Reserve raised the Federal funds rate by 25 basis points at their March 25, 1997
policy meeting as a pre-emptive strike against inflation.
After expanding at a blistering pace of 5.9% during the first quarter, the
U.S. economy's growth rate slowed in the second quarter of 1997. Signs of an
economic slowdown were prevalent in a broad range of industrial and consumer
indicators, including lower factory orders, decreased consumer spending, and
higher inventories. In addition, inflationary forces remained benign according
to year-over-year comparisons for the consumer and producer indices. These
indicators allowed the Federal Reserve to maintain interest rate levels at their
May 20, 1997 and July 2, 1997 policy meetings and wait for more definite signs
of inflation before increasing interest rates.
Short-to-intermediate maturity municipals underperformed Treasury
equivalents during the first quarter, despite the historically favorable
interest rate environment. Issuance of municipal debt declined almost 10% during
the first quarter 1997 from first quarter 1996 due to the higher interest rate
environment. Municipal bonds performed reasonably well during the second
quarter, despite a strong rally in the Treasury market. With nearly $60 billion
worth of municipal issues maturing in June and July, strong investor demand came
from both individuals and institutions seeking to reinvest their principal back
into the market. New municipal deals were heavily oversubscribed during the
second quarter, with a manageable supply of new issues coming to the market. For
the six month period ended June 30, 1997, municipal bonds as measured by the
LEHMAN BROTHERS MUNICIPAL INDEX slightly outperformed their taxable counterparts
(LEHMAN BROTHERS AGGREGATE INDEX) with a total return of 3.20% vs. 3.11%.
2
<PAGE>
Looking forward, a number of distractions may impede further yield spread
tightening in the municipal market, including potential tax reforms and the
strong rallies in the Treasury and stock markets. BlackRock believes that
municipals are currently trading at historically rich ratios versus Treasuries.
We remain focused on shorter maturity securities until the market provides
further guidance on the direction of interest rates, or the supply/demand
characteristics of the market are altered.
THE TRUST'S PORTFOLIO AND INVESTMENT STRATEGY
The Trust's portfolio is actively managed to diversify exposure to various
sectors, issuers, revenue sources and security types. BlackRock's investment
strategy emphasizes a relative value approach, which allows the Trust to
capitalize upon changing market conditions by rotating municipal sectors,
credits and coupons. Over the past six months, there has been relatively little
trading activity in the Trust, due to price appreciation of a majority of
securities in the portfolio above the prices at which they were bought. A bond
sold at a gain would result in the Trust realizing a capital gain, which may
require a taxable distribution to shareholders. Since one of the Trust's primary
investment objectives is to pay out tax-exempt income, we believe that waiting
to restructure the portfolio in a higher interest rate environment is the most
prudent strategy at this time.
The following chart compares the Trust's current and December 31, 1996
asset composition:
- --------------------------------------------------------------------------------
THE BLACKROCK INSURED MUNICIPAL TERM TRUST INC.
- --------------------------------------------------------------------------------
SECTOR JUNE 30, 1997 DECEMBER 31, 1996
- --------------------------------------------------------------------------------
City, County and State 29% 29%
- --------------------------------------------------------------------------------
Hospital 17% 17%
- --------------------------------------------------------------------------------
Water & Sewer 12% 12%
- --------------------------------------------------------------------------------
Utility/Power 11% 11%
- --------------------------------------------------------------------------------
Tax Revenue 9% 9%
- --------------------------------------------------------------------------------
Lease Revenue 8% 8%
- --------------------------------------------------------------------------------
Miscellaneous Revenue 5% 5%
- --------------------------------------------------------------------------------
Education 4% 4%
- --------------------------------------------------------------------------------
Housing 3% 3%
- --------------------------------------------------------------------------------
Transportation 2% 2%
- --------------------------------------------------------------------------------
Additionally, the Trust employs leverage to enhance its income by paying
the Trust's preferred shareholders short term municipal rates and investing the
proceeds in longer maturity issues which have higher yields. The Trust's ability
to pay high monthly income may be affected by the profitability of its leverage.
The Federal Reserve's 25 basis point (0.25%) increase in the Fed funds target
rate on March 25, 1997 resulted in a modest increase in the Trust's borrowing
costs; however, we do not believe that one increase in short term interest rates
will negatively impact the Trust's long-term income earning ability.
3
<PAGE>
We look forward to managing the Trust to benefit from the opportunities
available in the fixed income markets and to meet its investment objectives. We
thank you for your investment in the BlackRock Insured Municipal Term Trust Inc.
Please feel free to contact our marketing center at (800) 227-7BFM (7236) if you
have specific questions which were not addressed in this report.
Sincerely yours,
/s/ Robert S. Kapito /s/Kevin Klingert
- -------------------- -----------------
Robert S. Kapito Kevin Klingert
Vice Chairman and Portfolio Manager Managing Director and Portfolio Manager
BlackRock Financial Management, Inc. BlackRock Financial Management, Inc.
- --------------------------------------------------------------------------------
THE BLACKROCK INSURED MUNICIPAL TERM TRUST INC.
- --------------------------------------------------------------------------------
Symbol on New York Stock Exchange: BMT
- --------------------------------------------------------------------------------
Initial Offering Date: February 20, 1992
- --------------------------------------------------------------------------------
Closing Stock Price as of 6/30/97: $10.50
- --------------------------------------------------------------------------------
Net Asset Value as of 6/30/97: $10.91
- --------------------------------------------------------------------------------
Yield on Closing Stock Price as of 6/30/97 ($10.50)1: 5.95%
- --------------------------------------------------------------------------------
Current Monthly Distribution per Common Share2: $ 0.05208
- --------------------------------------------------------------------------------
Current Annualized Distribution per Common Share2: $ 0.62496
- --------------------------------------------------------------------------------
- ---------
1 Yield on Closing Stock Price is calculated by dividing the current
annualized distribution per share by the closing stock price per share.
2 Dividend is not constant and is subject to change.
4
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK INSURED MUNICIPAL TERM TRUST INC.
PORTFOLIO OF INVESTMENTS
JUNE 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OPTION
AMOUNT CALL VALUE
RATING* (000) DESCRIPTION PROVISIONS** (NOTE 1)
- ------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS--143.8%
ALABAMA--1.1%
<S> <C> <C> <C> <C>
AAA $ 3,000 Mobile Cnty., G.O., 6.70%, 2/01/00+, MBIA ...................................... No Opt. Call $ 3,222,960
------------
ARIZONA--1.6%
AAA 4,180 University of Arizona Med. Ctr. Hosp. Rev., 6.25%, 7/01/10, MBIA ............... 7/02 at 102 4,445,555
------------
CALIFORNIA--10.5% California St., G.0., FGIC,
AAA 4,355 6.80%, 11/01/04+ ............................................................ No Opt. Call 5,004,374
AAA 145 6.80%, 11/01/10 ............................................................. 11/04 at 102 163,343
AAA 3,400 California St. Pub. Wks., 6.60%, 12/01/02+, AMBAC .............................. No Opt. Call 3,808,510
AAA 6,100 Contra Costa Tran. Auth., 6.50%, 3/01/09, FGIC ................................. No Opt. Call 6,655,771
AAA 3,500 Eastern Mun. Wtr. Dist., 6.50%, 7/01/09, FGIC .................................. 7/01 at 101 3,732,365
AAA 3,065 Los Angeles Cnty. Leasing Corp., 6.05%, 12/01/10, AMBAC ........................ No Opt. Call 3,331,992
AAA 3,000 San Francisco Bay Area Rapid Trans., 6.75%, 7/01/09, AMBAC ..................... 7/00 at 102 3,228,240
AAA 3,500 Sonoma Cnty. Correct. Fac., C.O.P., 3.55%++, 11/15/12, AMBAC ................... No Opt. Call 3,607,555
------------
29,532,150
------------
DISTRICT OF COLUMBIA--1.3%
AAA 3,500 District of Columbia, G.O., Ser. A, 6.875%, 6/01/00+, MBIA ..................... No Opt. Call 3,784,725
------------
FLORIDA--9.2%
AAA 10,750 Broward Cnty. Sch. Bd., 6.50%, 7/01/10, AMBAC .................................. 7/02 at 102 11,644,185
AAA 12,195 Jacksonville Excise Tax Rev., 6.50%, 10/01/10, AMBAC ........................... 10/02 at 102 13,296,087
AAA 1,000 Volusia Cnty. Edl. Fac., 6.50%, 10/15/10, CONNIE LEE ........................... 10/02 at 102 1,083,440
------------
26,023,712
------------
GEORGIA--2.7%
AAA 5,000 Henry Cnty. Hosp. Auth. Rev., 6.375%, 7/01/09, FGIC ............................ 7/02 at 102 5,372,400
AAA 2,000 Macon-Bibb Cnty. Hosp. Auth. Rev., Georgia Med. Ctr., 6.75%, 8/01/99+, FGIC .... No Opt. Call 2,138,720
------------
7,511,120
------------
ILLINOIS--13.5%
AAA 4,120 Chicago, Res. Mtg. Rev., Zero Coupon, 10/01/09, MBIA ........................... No Opt. Call 1,763,813
Cook Cnty., G.O., MBIA,
AAA 7,000 6.50%, 11/15/02+ ............................................................ No Opt. Call 7,749,420
AAA 4,500 7.00%, 11/01/00+ ............................................................ No Opt. Call 4,934,520
AAA 5,000 Cook Cnty., Community Schs., 6.50%, 1/01/02+, FGIC ............................. No Opt. Call 5,390,150
AAA 5,000 Illinois Edl. Facs. Auth. Rev., 4.125%++, 7/01/13, FGIC ........................ 7/03 at 102 5,057,800
Illinois Hlth. Facs. Auth. Rev., FGIC,
AAA 3,000 Ser. A, 6.75%, 1/01/10 ...................................................... 1/00 at 102 3,190,740
AAA 1,750 Ser. C, 6.75%, 1/01/10 ...................................................... 1/00 at 102 1,861,265
AAA 7,980 Kendell Kane & Will Cnty. Sch. Dist., 6.25%, 9/01/11, FGIC ..................... 9/01 at 100 8,276,218
------------
38,223,926
------------
INDIANA--3.1%
AAA 1,340 Columbus Sch. Bd., 6.625%, 7/01/11, AMBAC ...................................... 7/02 at 102 1,451,354
AAA 3,750 Indiana St. Edl. Facs. Auth., 6.60%, 1/01/11, MBIA ............................. 1/02 at 102 4,020,675
AAA 3,000 Monroe Cnty. Hosp. Auth. Rev., Bloomington Hosp., 6.65%, 5/01/10, MBIA ......... 5/02 at 101 3,217,590
------------
8,689,619
------------
</TABLE>
See Notes to Financial Statements.
5
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OPTION
AMOUNT CALL VALUE
RATING* (000) DESCRIPTION PROVISIONS** (NOTE 1)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
LOUISIANA--6.7%
Louisiana St., G.O., Ser. A, AMBAC,
AAA $ 4,000 6.50%, 5/01/09 .............................................................. 5/02 at 102 $ 4,362,720
AAA 10,385 6.50%, 5/01/10 .............................................................. 5/02 at 102 11,303,138
AAA 2,905 New Orleans Pub. Impt., G.O., 6.60%, 9/01/02+, FGIC ............................ No Opt. Call 3,174,555
------------
18,840,413
------------
MASSACHUSETTS--16.3%
AAA 2,100 Boston, G.O., Ser. A, 6.50%, 7/01/12, AMBAC .................................... 7/02 at 102 2,267,895
Massachusetts St. Hlth. &Edl. Facs. Auth.,
AAA 2,000 6.50%, 7/01/10, FGIC ........................................................ 7/02 at 102 2,171,940
AAA 5,000 6.50%, 7/01/10, MBIA ........................................................ 7/02 at 102 5,434,500
AAA 3,250 7.25%, 7/01/10, MBIA ........................................................ 7/00 at 102 3,542,207
Massachusetts St. Hsg. Fin. Agcy., FNMA Collateral,
AAA 5,000 Ser. H, 6.75%, 11/15/12 ..................................................... 11/03 at 102 5,308,600
AAA 5,500 Residential Dev. A, 6.875%, 11/15/11 ........................................ 5/02 at 102 5,911,290
AAA 600 Residential Dev. C, 6.875%, 11/15/11 ........................................ 5/02 at 102 644,868
AAA 1,220 Massachusetts St., G.O., 6.75%, 8/01/09, AMBAC ................................. 8/01 at 102 1,327,104
AAA 7,865 Massachusetts St., G.O., Ser. C, 6.70%, 11/01/09, FGIC ......................... 11/04 at 101 8,762,082
Massachusetts St., G.O., Ser. D, MBIA,
AAA 1,620 6.00%, 7/01/01+ ............................................................. No Opt. Call 1,713,377
AAA 730 6.00%, 7/01/12 .............................................................. 7/01 at 100 750,024
AAA 7,630 Massachusetts St. Wtr. Res., Ser. B, 6.25%, 11/01/10, MBIA ..................... 11/02 at 102 8,223,080
------------
46,056,967
------------
MICHIGAN--4.0%
AAA 2,375 Chippewa Valley Sch., Sch. Bldg. & Site, 6.375%, 5/01/01+, FGIC ................ No Opt. Call 2,567,684
Michigan Mun. Bd. Auth. Rev.,
AAA 900 Ser. A, 6.50%, 11/01/12, MBIA .................................................. 11/02 at 102 970,695
AAA 2,040 6.45%, 11/01/07, AMBAC ...................................................... 11/04 at 102 2,250,609
AAA 2,050 6.65%, 11/01/09, AMBAC ...................................................... 11/04 at 102 2,259,879
AAA 3,000 Western Township Utils. Auth. Sewer Dist. Sys. Rev., 6.50%, 1/01/10, FSA ....... 1/02 at 100 3,180,330
------------
11,229,197
------------
MISSISSIPPI--0.7%
AAA 1,800 Harrison Cnty. Waste Wtr. Mgmt., 6.75%, 2/01/11, FGIC .......................... 2/01 at 102 1,935,162
------------
NEVADA--7.2%
AAA 4,000 Clark Cnty., G.O., 6.50%, 6/01/02+, AMBAC ...................................... No Opt. Call 4,411,200
AAA 5,215 Clark Cnty. Arpt., 6.25%, 6/01/01+, FGIC ....................................... No Opt. Call 5,546,361
Clark Cnty. Sch. Dist.,
AAA 4,185 6.75%, 12/15/04+, FGIC ...................................................... No Opt. Call 4,745,623
AAA 5,175 7.00%, 6/01/01+, MBIA ....................................................... No Opt. Call 5,685,255
------------
20,388,439
------------
NEW JERSEY--0.8%
AAA 2,000 Hudson Cnty. Correct. Fac., C.O.P., 6.50%, 12/01/11, MBIA ...................... 6/02 at 101.5 2,158,300
------------
NEW YORK--11.0%
AAA 4,500 New York City, G.O., Ser. B, 6.95%, 8/15/12, MBIA .............................. 8/04 at 101 5,054,355
New York St. Env. Fac. Corp. Poll. Ctr. Rev.,
AAA 6,155 6.70%, 5/15/09 .............................................................. 11/04 at 102 6,874,581
AAA 4,965 6.80%, 5/15/10 .............................................................. 11/04 at 102 5,559,410
New York St. Medicare Facs., AMBAC,
AAA 9,715 6.60%, 8/15/09 .............................................................. 2/05 at 102 10,757,808
AAA 2,695 6.625%, 2/15/10 ............................................................. 2/05 at 102 2,970,456
------------
31,216,610
------------
</TABLE>
See Notes to Financial Statements.
6
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OPTION
AMOUNT CALL VALUE
RATING* (000) DESCRIPTION PROVISIONS** (NOTE 1)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
OHIO--6.1%
Cleveland Wtrwks. Rev., First Mtg., Ser. F, AMBAC,
AAA $ 6,495 6.50%, 1/01/11 .............................................................. 1/02 at 102 $ 7,008,755
AAA 5,505 6.50%, 1/01/02+ ............................................................. No Opt. Call 6,048,068
AAA 3,900 Lucas Cnty. Hosp. Impt. Rev., St. Vincent Med. Ctr., 6.50%, 8/15/02+, MBIA ..... No Opt. Call 4,249,947
------------
17,306,770
------------
OKLAHOMA--2.1%
AAA 5,725 Oklahoma City Wtr. Utils. Tr. Wtr. & Sewer Rev., MBIA
Ser. B, 6.375%, 7/01/12 7/02 at 100 6,043,825
PENNSYLVANIA--6.1%
AAA 5,000 Dauphin Cnty. Gen. Auth., 6.25%, 7/01/08, MBIA ................................. 7/02 at 102 5,354,250
AAA 2,100 Philadelphia Wtr. &Waste Rev., Ser. A,
5.625%, 6/15/08, AMBAC No Opt. Call 2,212,371
AAA 6,005 Pittsburgh, G.O., Ser. D, 6.00%, 9/01/10, AMBAC ................................ 9/02 at 102 6,317,800
AAA 3,000 Pittsburgh Wtr. & Swr., 6.75%, 9/01/01+, FGIC .................................. No Opt. Call 3,307,980
------------
17,192,401
------------
RHODE ISLAND--4.7%
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 .................................. 10/02 at 102 2,603,260
AAA 10,000 Rhode Island St. Pub. Bldgs. Auth., St. Pub. Prjs. Rev., Ser. A,
6.75%, 2/01/00+, AMBAC ...................................................... No Opt. Call 10,755,200
------------
13,358,460
------------
SOUTH CAROLINA--8.6%
Piedmont Mun. Pwr. Agcy. Elec. Rev.,
AAA 14,925 6.30%, 1/01/11, MBIA ........................................................ 1/03 at 102 15,857,365
AAA 7,900 6.50%, 1/01/11, FGIC ........................................................ 1/01 at 102 8,411,130
------------
24,268,495
------------
TEXAS--15.6%
Austin Util. Sys. Rev. Comb., Ser A., FGIC,
AAA 7,475 6.00%, 5/15/00+ ............................................................. No Opt. Call 7,801,508
AAA 1,055 6.00%, 5/15/10 .............................................................. /00 at 100 1,084,477
AAA 1,580 Dallas Cnty. Road Imp., G.O., 5.625%, 8/15/10 .................................. 8/01 at 100 1,610,715
AAA 2,500 Dallas Ft. Worth Regl. Arp. Rev., Ser. A, 7.375%, 11/01/10, FGIC ............... 5/04 at 102 2,876,900
AAA 8,000 El Paso Impt. Auth., G.O., Ser A, 6.375%, 8/15/10, FGIC ........................ No Opt. Call 8,462,160
Harris Cnty. Rfdg., FGIC,
AAA 2,585 Toll Road, Ser. B, Zero Coupon, 8/15/08 ..................................... No Opt. Call 1,462,412
AAA 6,310 Toll Road Sr. Lien, Ser. A, 6.50%, 8/15/02+ ............................... No Opt. Call 6,962,832
AAA 4,775 Toll Road Sr. Lien, Ser. A, 6.50%, 8/15/11 ..................................... 8/02 at 102 5,153,705
AAA 10,440 Houston Wtr. & Swr. Sys., Ser. C, Zero Coupon, 12/01/10, AMBAC ................. No Opt. Call 5,069,560
AAA 1,840 North Texas Mun. Wtr. Dist., 6.50%, 6/01/09, MBIA .............................. 6/03 at 100 1,972,480
AAA 1,500 Texas Mun. Pwr. Agcy. Ref., Ser. A, 6.75%, 9/01/12, AMBAC ...................... 9/01 at 102 1,629,975
------------
44,086,724
------------
UTAH--1.1%
AAA 1,450 Salt Lake City Mun. Bldg. Lease, 6.15%, 10/01/10, MBIA ......................... 10/04 at 101 1,529,504
AAA 3,175 Salt Lake City Wtr. Conservancy, Zero Coupon, 10/01/10, AMBAC .................. No Opt. Call 1,559,655
------------
3,089,159
------------
VIRGINIA--3.6%
Peninsula Port Auth. Hlth. Sys., MBIA,
AAA 6,000 Riverside Hlth. Sys. Prj. A, 6.625%, 7/01/10 ................................ 7/02 at 102 6,526,380
AAA 3,380 Riverside Hlth. Sys. Prj. B, 6.625%, 7/01/10 ................................ 7/02 at 102 3,676,527
------------
10,202,907
------------
</TABLE>
See Notes to Financial Statements.
7
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OPTION
AMOUNT CALL VALUE
RATING* (000) DESCRIPTION PROVISIONS** (NOTE 1)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
WASHINGTON--5.4%
AAA $ 4,650 Port of Seattle Rev., 6.60%, 8/01/10, MBIA ..................................... 8/02 at 102 $ 5,070,406
Washington St. Pub. Pwr. Supply Sys. Rev.,
AAA 12,905 Zero Coupon, 7/01/10, MBIA .................................................. No Opt. Call 6,384,233
AAA 3,500 Nuclear Prj. No. 1, Ser. A, 7.00%, 7/01/00+, FGIC ........................... No Opt. Call 3,813,110
------------
15,267,749
------------
WISCONSIN--0.8%
AAA 2,000 Wisconsin St. Hlth. & Edl. Facs. Auth., Wausau Hosp. Inc., Ser. A,
6.625%, 8/15/09, AMBAC ...................................................... 2/01 at 102 2,143,060
------------
TOTAL INVESTMENTS--143.8% (COST $371,132,791) .................................. 406,218,405
Other assets in excess of liabilities--2.2% .................................... 6,305,904
Liquidation value of preferred stock--(46.0)% .................................. (130,000,000)
------------
Net Assets Applicable to Common Shareholders--100% ............................. $282,524,309
============
</TABLE>
+This bond is pre-refunded. See glossary for definition.
++This bond contains embedded caps. See glossary for definition.
*Rating: using the higher of Standard & Poor's, Moody's or Fitch's rating.
**Option call provisions: date (month/year) and price of the earliest optional
call or redemption. There may be other call provisions at varying prices at
later dates.
================================================================================
KEY TO ABBREVIATIONS
AMBAC-- American Municipal Bond Assurance Corporation
CONNIE LEE-- College Construction Loan Insurance Association
C.O.P.-- Certificate of Participation
FGIC-- Financial Guaranty Insurance Company
FNMACollateral-- Federal National Mortgage Association
FSA-- Financial Security Assurance, Inc.
G.O.-- General Obligation Bond
MBIA-- Municipal Bond Insurance Association
================================================================================
See Notes to Financial Statements.
8
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK INSURED
MUNICIPAL TERM TRUST INC.
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1997
(UNAUDITED)
- --------------------------------------------------------------------------------
ASSETS
Investments, at value (cost $371,132,791)
(Note 1) ................................................... $ 406,218,405
Interest receivable .......................................... 7,556,933
Prepaid assets ............................................... 43,980
-------------
413,819,318
-------------
LIABILITIES
Bank overdraft ............................................... 753,253
Dividends payable--preferred stock ........................... 144,222
Dividends payable--common stock .............................. 106,921
Advisory fee payable (Note 2) ................................ 119,091
Administration fee payable (Note 2) .......................... 34,026
Other accrued expenses ....................................... 137,496
-------------
1,295,009
-------------
NET INVESTMENT ASSETS ........................................ $ 412,524,309
=============
Net 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 ........................ 7,714,854
Accumulated net realized loss on investments ............... (368,703)
Net unrealized appreciation on investments ................. 35,085,614
-------------
Net investment assets, June 30, 1997 ....................... $ 412,524,309
=============
Net assets applicable to common shareholders ............... $282,524,309
=============
Net asset value per share:
($282,524,309 / 25,885,639 shares of
common stock issued and outstanding) ....................... $10.91
======
- --------------------------------------------------------------------------------
THE BLACKROCK INSURED
MUNICIPAL TERM TRUST INC.
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1997
(UNAUDITED)
- --------------------------------------------------------------------------------
NET INVESTMENT INCOME
Income
Interest and discount earned .......................... $12,188,452
-----------
Expenses
Investment advisory ................................... 714,170
Administration ........................................ 204,050
Auction agent ......................................... 161,180
Reports to shareholders ............................... 55,995
Custodian ............................................. 43,265
Directors ............................................. 30,910
Audit ................................................. 18,220
Transfer agent ........................................ 12,230
Legal ................................................. 10,700
Miscellaneous ......................................... 75,701
-----------
Total expenses ........................................ 1,326,421
-----------
Net investment income ................................... 10,862,031
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (NOTE 3)
Net realized loss on investments ......................... (45,894)
Net change in unrealized appreciation on
investments ............................................ 591,519
------------
Net gain on investments .................................. 545,625
------------
NET INCREASE IN NET INVESTMENT
ASSETS RESULTING FROM OPERATIONS ....................... $ 11,407,656
============
See Notes to Financial Statements.
9
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK INSURED MUNICIPAL TERM TRUST INC.
STATEMENT OF CHANGES IN NET INVESTMENT ASSETS
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, DECEMBER 31,
1997 1996
------------- -------------
INCREASE (DECREASE) IN NET INVESTMENT ASSETS
Operations:
<S> <C> <C>
Net investment income ........................................... $ 10,862,031 $ 21,558,425
Net realized gain (loss) on investments ......................... (45,894) 201,117
Net change in unrealized appreciation/depreciation on investments 591,519 (4,792,998)
------------- -------------
Net increase in net investment assets resulting from operations . 11,407,656 16,966,544
------------- -------------
Dividends:
To preferred shareholders from net investment income ............ (2,264,843) (4,545,206)
To common shareholders from net investment income ............... (8,088,636) (16,177,316)
------------- -------------
(10,353,479) (20,722,522)
------------- -------------
Total increase (decrease) ..................................... 1,054,177 (3,755,978)
------------- -------------
NET INVESTMENT ASSETS
Beginning of period ............................................... 411,470,132 415,226,110
------------- -------------
End of period ..................................................... $ 412,524,309 $ 411,470,132
============= =============
</TABLE>
10
See Notes to Financial Statements.
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK INSURED MUNICIPAL TERM TRUST INC.
FINANCIAL HIGHLIGHTS
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS FEBRUARY 28,
ENDED YEAR ENDED DECEMBER 31, 1992* TO
JUNE 30, -------------------------------------------- DECEMBER 31,
1997 1996 1995 1994 1993 1992
------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period ........... $10.87 $ 11.02 $ 9.73 $ 11.18 $ 9.93 $ 9.40
------ -------- -------- -------- -------- --------
Net investment income ....................... .42 .83 .84 .82 .83 .61
Net realized and unrealized gain
(loss) on investments ...................... .02 (.18) 1.27 (1.48) 1.18 .56
------ -------- -------- -------- -------- --------
Net increase (decrease) from
investment operations ....................... .44 .65 2.11 (.66) 2.01 1.17
------ -------- -------- -------- -------- --------
Dividends from net investment income to:
Preferred shareholders ...................... (.09) (.18) (.20) (.14) (.12) (.09)
Common shareholders ......................... (.31) (.62) (.62) (.62) (.63) (.42)
Distributions from net realized gain
on investments to:
Preferred shareholders ...................... -- -- -- (.01) (.00)*** --
Common shareholders ......................... -- -- -- (.02) (.01) --
------ -------- -------- -------- -------- --------
Total dividends and distributions .............. (.40) (.80) (.82) (.79) (.76) (.51)
------ -------- -------- -------- -------- --------
Capital charge with respect to
issuance of shares .......................... -- -- -- -- -- (.13)
------ -------- -------- -------- -------- --------
Net asset value, end of period** ............... $10.91 $ 10.87 $ 11.02 $ 9.73 $ 11.18 $ 9.93#
====== ======== ======== ======== ======== ========
Market value, end of period** .................. $10.50 $ 10.125 $ 10.00 $ 8.50 $ 10.50 $ 9.875
====== ======== ======== ======== ======== ========
TOTAL INVESTMENT RETURN+ ....................... 6.87% 7.59% 25.31% (13.38%) 12.99% 9.51%
RATIOSTOAVERAGENETASSETS
OF COMMON SHAREHOLDERS:+++
Expenses ....................................... .95%++ .97% .96% 1.04% .96% .98%++
Net investment income before preferred
stock dividends ............................. 7.79%++ 7.66% 7.97% 7.99% 7.75% 7.52%++
Preferred stock dividends ...................... 1.63%++ 1.61% 1.87% 1.44% 1.15% 1.21%++
Net investment income available to
common shareholders ......................... 6.16%++ 6.05% 6.10% 6.55% 6.60% 6.31%++
SUPPLEMENTAL DATA:
Average net assets of common shareholders
(in thousands) ............................... $281,054 $281,521 $272,868 $265,851 $275,162 $247,807
Portfolio turnover ............................. 1% 1% 1% 31% 1% 37%
Net assets of common shareholders,
end of period (in thousands) ................ $282,524 $281,470 $285,226 $251,856 $289,449 $256,956
Asset coverage per share of
preferred stock, end of period## ............ $ 79,332 $ 79,129 $ 79,851 $146,868 $161,327 $148,829
Preferred stock outstanding (in thousands) ..... $130,000 $130,000 $130,000 $130,000 $130,000 $130,000
</TABLE>
- --------------------------------------------------------------------------------
* Commencement of investment operations.
** Net asset value 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. ## A stock split occurred on July 24, 1995 (Note 4).
+ Total investment return is calculated assuming a purchase of common stock
at the current market price on the first day and a sale at the current
market price on the last day of each period reported. Dividends 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.
++ Annualized.
+++ Ratios calculated on the basis of income and expenses applicable to both
the common and preferred shares, and preferred stock dividends, relative to
the average net assets of common shareholders.
The information above represents the unaudited operating performance data for a
share of common stock outstanding, total investment return, ratios to average
net assets and other supplemental data for each of the periods indicated. This
information has been determined based upon financial information provided in the
financial statements and market value data for the Trust's common shares.
See Notes to Financial Statements.
11
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK INSURED MUNICIPAL TERM TRUST INC.
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
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 fixed
income 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 60 days or less are valued at amortized
cost, if their term to maturity from date of purchase is 60 days or less.
Short-term securities with a term to maturity greater than 60 days from the date
of purchase are valued at current market quotations until maturity.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on the trade date. Realized gains and losses are calculated on the
identified cost basis. Interest income is recorded on the accrual basis and the
Trust amortizes premium and accretes original issue discount on securities
purchased using the interest method.
FEDERAL INCOME TAXES: It is the Trust's intention to continue to meet the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute sufficient net income to shareholders. For this
reason and because substantially all of the Trust's gross income consists of
tax-exempt interest, no federal tax provision is required.
DIVIDENDS AND DISTRIBUTIONS: The Trust declares and pays dividends and
distributions to common shareholders monthly from net investment income. Net
capital gains, if any, in excess of loss carryforwards may be distributed
annually. Dividends and distributions are recorded on the ex-dividend date.
Dividends and distributions to preferred shareholders are accrued and determined
as described in Note 4.
ESTIMATES: The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
NOTE 2. AGREEMENTS
The Trust has an Investment Advisory Agreement with BlackRock Financial
Management Inc. (the "Adviser"), a wholly-owned corporate subsidiary of PNC
Asset Management Group, Inc., the holding company for PNC's asset management
businesses and an Administration Agreement with Mitchell Hutchins Asset
Management Inc. (the "Administrator"), a wholly-owned subsidiary of Paine-Webber
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.
NOTE 3. PORTFOLIO SECURITIES
Purchases and sales of SECURITIES investment securities, other than short-term
investments, for the period ended June 30, 1997 aggregated $4,346,482 and
$2,675,477, respectively.
12
<PAGE>
The federal income tax basis of the Trust's investments at June 30, 1997 was
substantially the same as the basis for financial reporting and, accordingly,
net unrealized appreciation for federal income tax purposes was $35,085,614;
(gross unrealized appreciation--$35,085,614; gross unrealized depreciation--$0).
For federal income tax purposes, the Trust had a capital loss carryforward at
December 31, 1996 of $322,809 which expires in 2003. Accordingly, no capital
gain distribution is expected to be paid to shareholders until net gains have
been realized in excess of such amount.
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, 1997, the Adviser owned 10,639
shares. As of June 30, 1997, there were 5,200 preferred shares outstanding as
follows: 2,600 shares of Series M-7 and M-28, respectively.
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 $25,000 per
share plus any accumulated but unpaid dividends. On May 16, 1995, shareholders
approved a proposal to split each share of the Trust's Auction Rate Municipal
Preferred Stock into two shares and simultaneously reduce each share's
liquidation preference from $50,000 to $25,000 plus any accumulated but unpaid
dividends. The stock split occurred on July 24, 1995.
Dividends on Series 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 2.40% to 4.19% for the six months ended June 30,
1997.
The Trust may not declare dividends or make other distributions on shares of
common stock or purchase any such shares if, at the time of the declaration,
distribution or purchase, asset coverage with respect to the outstanding
Preferred Stock would be less than 200%.
The preferred stock is redeemable at the option of the Trust, in whole or in
part, on any dividend payment date at $25,000 per share plus any accumulated or
unpaid dividends whether or not declared. The Preferred Stock is also subject to
mandatory redemption at $25,000 per share plus any accumulated or unpaid
dividends, whether or not declared, if certain requirements relating to the
composition of the assets and liabilities of the Trust as set forth in the
Articles of Incorporation are not satisfied.
The holders of Preferred Stock have voting rights equal to the holders of
common stock (one vote per share) and will vote together with holders of shares
of common stock as a single class. However, holders of Preferred Stock are also
entitled to elect two of the Trust's directors. In addition, the Investment
Company Act of 1940 requires that along with approval by shareholders that might
otherwise be required, the approval of the holders of a majority of any
outstanding preferred shares, voting separately as a class would be required to
(a) adopt any plan of reorganization that would adversely affect the preferred
shares, and (b) take any action requiring a vote of security holders including,
among other things, changes in the Trust's subclassification as a closed-end
investment company or changes in its fundamental investment restrictions.
NOTE 5. DIVIDENDS
Subsequent to June 30, 1997, the Board of Directors of the Trust declared
dividends from undistributed earnings of $0.05208 per common share payable July
31, 1997 to shareholders of record on July 15, 1997.
For the period July 1, 1997 through July 31, 1997, dividends declared on
preferred shares totalled $378,196 in aggregate for the two outstanding
preferred share series.
13
<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 automatically
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, or to its charter or
by-laws, or in the principal risk factors associated with investment in the
Trust. There have been no changes in the persons who are primarily responsible
for the day-to-day management of the Trust's portfolio.
The Annual Meeting of Trust Shareholders was held April 15, 1997 to vote
on the following matters:
(1) To elect two Directors to serve as follows:
DIRECTOR CLASS TERM EXPIRING
-------- ----- ---- --------
Ralph L. Schlosstein ..................... II 3 years 2000
Walter F. Mondale ........................ II 3 years 2000
Directorswhose term of office continues beyond this meeting are Andrew
F. Brimmer, Richard E. Cavanagh, Kent Dixon, Frank J. Fabozzi, Laurence
D.Fink, James Grosfeld, and James Clayburn La Force, Jr.
(2) To ratify the selection of Deloitte & Touche LLP as independent public
accountants of the Trust for the fiscal year ending December 31, 1997.
Shareholders elected the two Directors and ratified the selection of
Deloitte & Touche LLP. The results of the voting was as follows:
VOTES VOTES
FOR AGAINST ABSTENTIONS
---------- ------- -----------
Ralph L. Schlosstein ............ 14,953,537 0 249,534
Walter F. Mondale ............... 14,941,554 0 261,518
Ratification of Deloitte
& Touche LLP ................. 14,925,795 123,249 154,027
14
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK INSURED MUNICIPAL TERM TRUST INC.
INVESTMENT SUMMARY
- --------------------------------------------------------------------------------
THE TRUST'S INVESTMENT OBJECTIVE
The Trust's investment objective is to provide current income exempt from
regular Federal income tax and to return $10 per share (the initial public
offering price per share) to investors on or about December 31, 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
approximately $50 billion of assets across the government, mortgage, corporate
and municipal sectors. These assets are managed on behalf of institutional and
individual investors in 21 closed-end funds which trade on either the New York
Stock or American Stock Exchanges, several open-end funds and separate accounts
for more than 125 clients in the U.S. and overseas. BlackRock is a subsidiary of
PNC Asset Management Group, Inc. which is a division of PNC Bank N.A., one of
the nation's largest banking organizations.
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 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 amount 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 35% 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 adviser. 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, State Street
Bank and Trust Company. Investors who wish to hold shares in a brokerage account
should check with their financial adviser to determine whether their brokerage
firm offers dividend reinvestment services.
15
<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 35% of total assets.
Leverage also increases the duration (or price volatility of the net assets) of
the Trust, which can improve the performance of the fund in a declining rate
environment, but can cause net assets to decline faster than the market in a
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.
16
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK INSUREDMUNICIPAL TERM TRUST INC.
GLOSSARY
- --------------------------------------------------------------------------------
CLOSED-END FUND: Investment vehicle which initially offers a fixed
number of shares and trades on a stock exchange. The
fund invests in a portfolio of securities in accordance
with its stated investment objectives and policies.
DISCOUNT: When a fund's net asset value is greater than its stock
price, the fund is said to be trading at a discount.
DIVIDEND: Income generated by securities in a portfolio and
distributed to shareholders after the deduction of
expenses. This Trust declares and pays dividends on a
monthly basis.
DIVIDEND REINVESTMENT: Shareholders may elect to have all dividends and
distributions of 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 WALL STREET JOURNAL on
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.
17
<PAGE>
- --------------------------------------------------------------------------------
BLACKROCKFINANCIAL MANAGMENT, INC.
SUMMARY OF CLOSED-END FUNDS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TAXABLE TRUSTS
- -------------------------------------------------------------------------------------------------------
TERMINATION
STOCK SYMBOL DATE
------------ -----
PERPETUAL TRUSTS
<S> <C> <C>
The BlackRock Income Trust Inc. ............................................. BKT N/A
The BlackRock North American Government Income Trust Inc. ................... BNA N/A
TERM TRUSTS
The BlackRock 1998 Term Trust Inc. .......................................... BBT 12/98
The BlackRock 1999 Term Trust Inc. .......................................... BNN 12/99
The BlackRock Target Term Trust Inc. ........................................ BTT 12/00
The BlackRock 2001 Term Trust Inc. .......................................... BLK 06/01
The BlackRock Strategic Term Trust Inc. ..................................... BGT 12/02
The BlackRock Investment Quality Term Trust Inc. ............................ BQT 12/04
The BlackRock Advantage Term Trust Inc. ..................................... BAT 12/05
The BlackRock Broad Investment Grade 2009 Term Trust Inc. ................... BCT 12/09
TAX-EXEMPT TRUSTS
- -------------------------------------------------------------------------------------------------------
TERMINATION
STOCK SYMBOL DATE
------------ -----
PERPETUAL TRUSTS
The BlackRock Investment Quality Municipal Trust Inc. ....................... BKN N/A
The BlackRock California Investment Quality Municipal Trust Inc. ............ RAA N/A
The BlackRock Florida Investment Quality Municipal Trust .................... RFA N/A
The BlackRock New Jersey Investment Quality Municipal Trust Inc. ............ RNJ N/A
The BlackRock New York Investment Quality Municipal Trust Inc. .............. RNY N/A
TERM TRUSTS
The BlackRock Municipal Target Term Trust Inc. .............................. BMN 12/06
The BlackRock Insured Municipal 2008 Term Trust Inc. ........................ BRM 12/08
The BlackRock California Insured Municipal 2008 Term Trust Inc. ............. BFC 12/08
The BlackRock Florida Insured Municipal 2008 Term Trust ..................... BRF 12/08
The BlackRock New York Insured Municipal 2008 Term Trust Inc. ............... BLN 12/08
The BlackRock Insured Municipal Term Trust Inc. ............................. BMT 12/10
IF YOU WOULD LIKE FURTHER INFORMATION PLEASE CALL BLACKROCK AT (800) 227-7BFM
OR CONSULT WITH YOUR FINANCIAL ADVISOR.
</TABLE>
18
<PAGE>
- --------------------------------------------------------------------------------
BLACKROCK FINANCIAL MANAGMENT, INC.
AN OVERVIEW
- --------------------------------------------------------------------------------
BlackRock Financial Management, Inc. (BlackRock) is a registered
investment adviser which specializes in managing high quality fixed income
securities, both taxable and tax exempt. BlackRock currently manages
approximately $50 billion of assets across the government, mortgage, corporate
and municipal sectors. These assets are managed on behalf of institutional and
individual investors in 21 closed-end funds traded either on the New York Stock
Exchange or the American Stock Exchange, several open-end funds and over 125
institutional clients in the United States and overseas.
BlackRock was formed in April 1988 by fixed income professionals who
sought to create an asset management firm specializing in managing fixed income
securities for individuals and institutional investors. The professionals at
BlackRock have extensive experience creating, analyzing and trading a variety of
fixed income instruments, including the most complex structured securities. In
fact, individuals at BlackRock are responsible for many of the major innovations
in the mortgage-backed and asset-backed securities market, including the
creation of the CMO, the floating rate CMO, the senior/subordinated pass-through
and the multi-class asset-backed security.
BlackRock is unique among asset management and advisory firms in the
significant emphasis it places on the development of 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 portfolio of
fixed income securities, including mortgage securities, corporate debt
securities or tax-exempt securities and a variety of hedging instruments.
BlackRock has developed investment products which respond to investors'
needs and has been responsible for several major innovations in closed-end
funds. BlackRock introduced the first closed-end mortgage fund, the first
taxable and tax-exempt closed-end funds to offer a finite term, the first
closed-end fund to achieve a AAAf rating by Standard & Poor's, and the first
closed-end fund to invest primarily in North American Government securities.
BlackRock's closed-end funds currently have dividend reinvestment plans which
are designed to provide an ongoing source of demand for the stock in the
secondary market. BlackRock manages a ladder of alternative investment vehicles,
with each fund having specific investment objectives and policies.
In view of our continued desire to provide a high level of service to all
our shareholders, BlackRock maintains a toll-free number for your questions. The
number is (800) 227-7BFM (7236). We encourage you to call us with any questions
you may have about your BlackRock funds and thank you for the continued trust
you place in our abilities.
19
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BlackRock
DIRECTORS
Laurence D. Fink, CHAIRMAN
Andrew F. Brimmer
Richard E. Cavanagh
Kent Dixon
Frank J. Fabozzi
James Grosfeld
James Clayburn La Force, Jr.
Walter F. Mondale
Ralph L. Schlosstein
OFFICERS
Ralph L. Schlosstein, PRESIDENT
Keith T. Anderson, VICE PRESIDENT
Michael C. Huebsch, VICE PRESIDENT
Robert S. Kapito, VICE PRESIDENT
Kevin Klingert, VICE PRESIDENT
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) 699-1BFM
AUCTION AGENT
Bankers Trust Company
Four Albany Street
New York, NY 10006
INDEPENDENT AUDITORS
Deloitte & Touche LLP
Two World Financial Center
New York, NY 10281-1434
LEGAL COUNSEL
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, NY 10022
The accompanying financial statements as of June 30, 1997 were not audited
and accordingly, no opinion is expressed on them. This report is for shareholder
information.
This is not a prospectus intended for use in the purchase or sale of Trust
shares.
THE BLACKROCK INSURED MUNICIPAL TERM TRUST INC.
c/o Mitchell Hutchins Asset Management Inc.
1285 Avenue of the Americas
New York, NY 10019
(800) 227-7BFM
092474 10 5
092474 20 4
092474 30 3
[Logo] Printed on recycled paper
THE BLACKROCK
INSURED MUNICIPAL TERM TRUST INC.
================================================================================
SEMI-ANNUAL REPORT
JUNE 30, 1997
