--------------------------------------------------------------------------------
THE BLACKROCK INSURED MUNICIPAL TERM TRUST INC.
SEMI-ANNUAL REPORT TO SHAREHOLDERS
REPORT OF INVESTMENT ADVISOR
--------------------------------------------------------------------------------
July 31, 2000
Dear Shareholder:
In the first half of the year, fears of an open-ended tightening policy by
the Federal Reserve peaked in May, which resulted in a subsequent relief in the
market as the U.S. economy seemed to decelerate significantly. During the
period, the Federal Reserve tightened short-term rates by 1.00% in an attempt to
engineer a "soft landing" for the U.S. economy. In the first six months of the
new millennium we have witnessed unprecedented volatility in both the Treasury
yield curve and the spread sectors. The Treasury curve inverted sharply in the
first quarter, but as weak economic data emerged in the second quarter, market
participants embraced an economic "soft landing" scenario causing the yield
curve to steepen. The downward revision in growth expectations allowed spread
sectors to rally in the month of June, but year-to-date their performance still
trails Treasuries.
While fears of a hawkish Federal Reserve and consequent risks of a
"hard-landing" may not materialize immediately, the risks are skewed in that
direction. A longer period of subdued financial market performance is necessary
to enable the labor markets to build up slack, which is an important
pre-condition for the Fed to achieve its goal.
This report contains a summary of market conditions during the semi-annual
period and a review of portfolio strategy by your Trust's managers in addition
to the Trust's unaudited financial statements and a detailed list of the
portfolio's holdings. Continued thanks for your confidence in BlackRock. We
appreciate the opportunity to help you achieve your long-term investment goals.
Sincerely,
/s/ Laurence D. Fink /s/ Ralph L. Schlosstein
Laurence D. Fink Ralph L. Schlosstein
Chairman President
1
<PAGE>
July 31, 2000
Dear Shareholder:
We are pleased to present the unaudited semi-annual report for The
BlackRock Insured Municipal Term Trust Inc. ("the Trust") for the six-months
ended June 30, 2000. 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 high current income exempt from regular federal income tax. The Trust
seeks to achieve this objective by investing in high credit quality ("AAA" or
insured to "AAA") tax-exempt general obligation and revenue bonds issued by
city, county and state municipalities throughout the United States.
The table below summarizes the changes in the Trust's stock price and NAV
over the past year:
--------------------------------------------------
6/30/00 12/31/99 CHANGE HIGH LOW
--------------------------------------------------------------------------------
STOCK PRICE $10.00 $9.4375 5.96% $10.0625 $ 9.25
--------------------------------------------------------------------------------
NET ASSET VALUE (NAV) $10.59 $10.60 (0.09%) $10.61 $10.31
--------------------------------------------------------------------------------
THE FIXED INCOME MARKETS
The dynamic expansion of the U.S. economy continues undaunted by Federal
Reserve Chairman Greenspan's attempt to brake the economy, short of stalling it
into a recession. The labor markets remain tight, growth remains strong with 5%+
annualized growth rates and inflation pressures continue to be offset by
increased productivity. However, the Fed remains cautious, in their February
minutes it was noted that: "Other members acknowledged that the Committee might
need to move more aggressively at a later meeting should imbalances continue to
build and inflation expectations clearly begin to pick up." At the Federal
Reserve meeting in November, February and March the Fed raised the discount rate
by 0.25% at each meeting and a 0.50% increase was made in May to bring the
current discount rate to 6.50%.
The Treasury Yield curve experienced a complex set of dynamics, which has
inverted the curve and may continue to invert the curve for the foreseeable
future. The yields on the short-end of the curve increased sharply during the
period in response to three Federal Reserve increases to the discount rate and
perceived future Fed actions in the coming months. The long-end of the curve is
reacting to the "official" announcement that the Treasury will buy back $30
billion of Treasuries with maturities ranging from 10 to 30 years. With a
decreasing supply of available Treasuries, a balanced budget, and an unchanged
demand for longer maturity Treasuries, we would anticipate this condition to
continue. This condition is further augmented by Treasury auction activity, as
they reduce the available bonds on the long end of the curve they continue to
add supply in the 1-10 year range through periodic auctions. For the semi-annual
period, the yield of the 10-year Treasury security declined from 6.44% on
December 31, 1999 to 6.03% on June 30, 2000.
Municipal bonds outperformed the taxable domestic bond market during the
past six months, returning 4.49% (as measured by the LEHMAN MUNICIPAL INDEX)
versus the LEHMAN AGGREGATE INDEX'S 3.98% on a pre-tax basis. Overall, the tone
in the market during the period was extremely positive as the result of
continued strong demand from individual/retail investors coupled with a slowdown
in new issuance. During 1999, households increased their holdings of individual
2
<PAGE>
municipal bonds by over $40 billion while mutual funds saw net outflows.
Offsetting the large amount of mutual fund outflows during the first quarter of
2000 was a 22% decline in overall new municipal bond issuance YTD for the same
period, led by a 68% drop in refunding volume. Refunding volume was down due to
the relatively higher interest rates experienced during the first half of 2000
when compared to the first half of 1999, while new money issuance has declined
because the strong economy has led to full coffers at most municipalities.
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 and
coupons. Additionally, the Trust emphasizes securities whose maturity dates
match the termination date of the Trust.
Over the year, trading activity in the Trust remained relatively low, as
many of the securities in the Trust's portfolio continued to trade at prices
above current cost. As trading activity that results in the Trust realizing a
capital gain could require a taxable distribution, we continue to believe that
waiting to restructure the portfolio in a higher interest rate environment is
the most prudent portfolio management strategy. At present, we are confident
that the Trust is on schedule to achieve its primary investment objective of
returning $10 per share upon termination and will continue to seek investment
opportunities in the municipal market.
During the period the Trust issued $40,400,000 in additional preferred
shares. Additionally, the Trust employs leverage to enhance its income by
borrowing at short-term municipal rates and investing the proceeds in longer
maturity issues that have higher yields. The degree to which the Trust can
benefit from its use of leverage may affect its ability to pay high monthly
income. As of June 30, 2000, the Trust's leverage amount was 38% of total
assets.
The Board of Directors of the BlackRock Insured Municipal Term Trust Inc.
voted to adjust the Trust's monthly dividend effective with the July dividend
payable on August 1, 2000. The dividend reduction was determined after careful
evaluation of the current and anticipated level of the Trust's net investment
income, particularly the reduction in income associated with the increased cost
of borrowing as a result of successive Federal Reserve rate increases. The new
monthly dividend is $0.04792 ($0.575 annualized), down from the current monthly
dividend of $0.05208 ($0.625).
The following chart compares the Trust's current and December 31, 1999
asset composition:
------------------------------------------------------------------------
THE BLACKROCK INSURED MUNICIPAL TERM TRUST INC.
------------------------------------------------------------------------
SECTOR JUNE 30, 2000 DECEMBER 31, 1999
------------------------------------------------------------------------
City, County and State 28% 23%
------------------------------------------------------------------------
Water & Sewer 14% 16%
------------------------------------------------------------------------
Utility/Power 13% 12%
------------------------------------------------------------------------
Education 13% 12%
------------------------------------------------------------------------
Hospital 12% 16%
------------------------------------------------------------------------
Tax Revenue 6% 6%
------------------------------------------------------------------------
Transportation 5% 4%
------------------------------------------------------------------------
Lease Revenue 3% 6%
------------------------------------------------------------------------
Housing 3% 3%
------------------------------------------------------------------------
Miscellaneous Revenue 3% 2%
------------------------------------------------------------------------
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,
/s/ Robert S. Kapito /s/ Kevin M. Klingert
Robert S. Kapito Kevin M. Klingert
Vice Chairman and Portfolio Manager Managing Director and Portfolio Manager
BlackRock Advisors, Inc. BlackRock Advisors, 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 6/30/00: $10.00
--------------------------------------------------------------------------------
Net Asset Value as of 6/30/00: $10.59
--------------------------------------------------------------------------------
Yield on Closing Stock Price as of 6/30/00 ($10.00)(1): 5.75%
--------------------------------------------------------------------------------
Current Monthly Distribution per Common Share(2): $ 0.04792
--------------------------------------------------------------------------------
Current Annualized Distribution per Common Share(2): $ 0.57504
--------------------------------------------------------------------------------
-----------
(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>
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------
THE BLACKROCK INSURED MUNICIPAL TERM TRUST INC.
PORTFOLIO OF INVESTMENTS JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------------------------------------------------
PRINCIPAL
AMOUNT OPTION CALL VALUE
RATING* (000) DESCRIPTION PROVISIONS+ (NOTE 1)
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ARIZONA--1.6%
AAA $ 4,180 University of Arizona Med. Ctr. Hosp. Rev., 6.25%, 7/01/10, MBIA ..... 7/02 @ 102 $ 4,357,399
-----------
CALIFORNIA--10.6%
California St., G.O., FGIC,
AAA 4,355++ 6.80%, 11/01/04 ................................................... N/A 4,844,850
AAA 145 6.80%, 11/01/10 ................................................... 11/04 @ 102 159,979
AAA 3,400++ California St. Pub. Wks., 6.60%, 12/01/02, AMBAC ..................... N/A 3,639,530
AAA 6,100 Contra Costa Trans. Auth., 6.50%, 3/01/09, FGIC ...................... ETM 6,622,526
AAA 3,500 Eastern Mun. Wtr. Dist., 6.50%, 7/01/09, FGIC ........................ 7/01 @ 101 3,603,670
AAA 3,065 Los Angeles Cnty. Leasing Corp., 6.05%, 12/01/10, AMBAC .............. No Opt. Call 3,366,596
AAA 3,000++ San Francisco Bay Area Rapid Trans., 6.75%, 7/01/00 .................. N/A 3,060,000
AAA 3,500 Sonoma Cnty. Correct. Fac., C.O.P., 6.10%, 11/15/12, AMBAC ........... 11/02 @ 102 3,670,660
-----------
28,967,811
-----------
DISTRICT OF COLUMBIA--3.7%
AAA 10,000 District of Columbia, G.O., Ser. B, 5.50%, 6/01/11, FSA .............. No Opt. Call 10,167,500
-----------
FLORIDA--9.2%
AAA 10,750++ Broward Cnty. Sch. Bd., 6.50%, 7/01/02, AMBAC ........................ N/A 11,334,047
AAA 12,195 Jacksonville Excise Tax Rev., 6.50%, 10/01/10, AMBAC ................. 10/02 @ 102 12,855,847
AAA 1,000 Volusia Cnty. Edl. Fac., 6.50%, 10/15/10, CONNIE LEE ................. 10/02 @ 102 1,053,640
-----------
25,243,534
-----------
GEORGIA--1.9%
AAA 5,000 Henry Cnty. Hosp. Auth. Rev., 6.375%, 7/01/09, FGIC .................. 7/02 @ 102 5,208,650
-----------
HAWAII--4.1%
AAA 11,080 Hawaii St., G.O., Ser. CN, 5.25%, 3/01/11, FGIC ...................... 3/07 @ 102 11,103,600
-----------
ILLINOIS--14.8%
AAA 1,335 Chicago, Res. Mtg. Rev., Zero Coupon, 10/01/09, MBIA ................. No Opt. Call 702,731
Cook Cnty., G.O., MBIA,
AAA 7,000++ Ser. A, 6.50%, 11/15/02 ........................................... N/A 7,414,470
AAA 4,500++ 7.00%, 11/01/00 ................................................... N/A 4,625,550
AAA 5,000++ Cook Cnty., Community Schs., 6.50%, 1/01/02, FGIC .................... N/A 5,132,750
Du Page Cnty. Fst. Presv. Dist.,
AAA 5,000 Zero Coupon, 11/01/10 ............................................. No Opt. Call 2,867,350
AAA 11,965 Zero Coupon, 11/01/11 ............................................. No Opt. Call 6,466,364
AAA 5,000++ Illinois Edl. Fac. Auth. Rev., 5.70%, 7/01/05, FGIC .................. N/A 5,119,900
AAA 7,980 Kendell Kane & Will Cnty. Sch. Dist., 6.25%, 9/01/11, FGIC ........... 9/01 @ 100 8,160,747
-----------
40,489,862
-----------
INDIANA--3.1%
AAA 1,340 Columbus Sch. Bd., Ser. A, 6.625%, 7/01/11, AMBAC .................... 7/02 @ 102 1,414,893
AAA 3,750 Indiana St. Edl. Fac. Auth. Rev., Ser. A, 6.60%, 1/01/11, MBIA ....... 1/02 @ 102 3,906,225
AAA 3,000++ Monroe Cnty. Hosp. Auth. Rev., Bloomington Hosp., 6.65%,
5/01/02, MBIA ..................................................... N/A 3,129,240
-----------
8,450,358
-----------
LOUISIANA--8.2%
Louisiana St., G.O., Ser. A, AMBAC,
AAA 4,345 5.25%, 4/15/11 .................................................... 4/08 @ 101 4,352,386
AAA 14,385++ 6.50%, 5/01/02 .................................................... N/A 15,099,791
AAA 2,905++ New Orleans Pub. Impt., G.O., 6.60%, 9/01/02, FGIC ................... N/A 3,017,743
-----------
22,469,920
-----------
</TABLE>
See Notes to Financial Statements.
5
<PAGE>
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------
PRINCIPAL
AMOUNT OPTION CALL VALUE
RATING* (000) DESCRIPTION PROVISIONS+ (NOTE 1)
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MASSACHUSETTS--15.1%
AAA $ 2,100++ Boston, G.O., Ser. A, 6.50%, 7/01/02, AMBAC ......................... N/A $ 2,214,093
Massachusetts St., G.O.,
AAA 7,865++ Ser. C, 6.70%, 11/01/04, FGIC .................................... N/A 8,533,918
AAA 780++ Ser. C, 6.75%, 8/01/01, AMBAC .................................... N/A 814,390
AAA 440 Ser. C, 6.75%, 8/01/09, AMBAC .................................... 8/01 @ 102 457,186
AAA 2,350++ Ser. D, 6.00%, 7/01/01, MBIA ..................................... N/A 2,387,109
Massachusetts St. Hlth. & Edl. Fac. Auth. Rev., 6.50%
AAA 2,000++ Mclean Hosp., Ser. C, 7/01/02, FGIC .............................. N/A 2,108,660
AAA 3,275++ So. Shore Hosp., Ser. D, 7/01/02, MBIA ........................... N/A 3,452,931
AAA 1,725 So. Shore Hosp., Ser. D, 7/01/10, MBIA ........................... 7/02 @ 102 1,810,974
Massachusetts St. Hsg. Fin. Agcy., FNMA,
AAA 5,000 Ser. H, 6.75%, 11/15/12 .......................................... 11/03 @ 102 5,248,600
AAA 5,500 Residential Dev., Ser. A, 6.875%, 11/15/11 ....................... 5/02 @ 102 5,763,725
AAA 600 Residential Dev., Ser. C, 6.875%, 11/15/11 ....................... 5/02 @ 102 628,770
AAA 7,630 Massachusetts St. Wtr. Res., Ser. B, 6.25%, 11/01/10, MBIA .......... 11/02 @ 102 7,995,859
-----------
41,416,215
-----------
MICHIGAN--4.0%
AAA 2,375++ Chippewa Valley, Sch. Bldg. & Site Rev., 6.375%, 5/01/01, FGIC ...... N/A 2,444,991
Michigan Mun. Bd. Auth. Rev.,
AAA 900 Ser. A, 6.50%, 11/01/12, MBIA .................................... 11/02 @ 102 946,206
AAA 1,310++ Ser. G, 6.45%, 11/01/04, AMBAC ................................... N/A 1,416,791
AAA 730 Ser. G, 6.45%, 11/01/07, AMBAC ................................... 11/04 @ 102 783,845
AAA 1,320++ Ser. G, 6.65%, 11/01/04, AMBAC ................................... N/A 1,437,797
AAA 730 Ser. G, 6.65%, 11/01/09, AMBAC ................................... 11/04 @ 102 785,911
AAA 3,000 Western Township Util. Auth. Swr. Dist. Sys. Rev.,
6.50%, 1/01/10, FSA .............................................. 1/02 @ 100 3,059,340
-----------
10,874,881
-----------
MINNESOTA--0.8%
AAA 2,180 Southern Minnesota Mun. Pwr. Agcy. Rev., Ser. B, 5.75%, 1/01/11 ..... ETM 2,258,175
-----------
MISSISSIPPI--0.7%
AAA 1,800 Harrison Cnty. Waste Wtr. Mgmt., 6.75%, 2/01/11, FGIC ............... 2/01 @ 102 1,852,380
-----------
NEVADA--7.1%
AAA 5,215++ Clark Cnty. Arpt., 6.25%, 6/01/01, FGIC ............................. N/A 5,297,814
AAA 4,000++ Clark Cnty., G.O., Ser. A, 6.50%, 6/01/02, AMBAC .................... N/A 4,204,080
Clark Cnty. Sch. Dist.,
AAA 4,185++ 6.75%, 12/15/04, FGIC ............................................ N/A 4,539,972
AAA 5,175++ Ser. A, 7.00%, 6/01/01, MBIA ..................................... N/A 5,340,859
-----------
19,382,725
-----------
NEW JERSEY--0.8%
AAA 2,000 Hudson Cnty. Correct. Fac., C.O.P., 6.50%, 12/01/11, MBIA ........... 6/02 @ 101.5 2,086,560
-----------
NEW MEXICO--0.6%
Aaa 1,750 Las Cruces Sch. Dist., 5.25%, 8/01/11, FSA .......................... 8/09 @ 100 1,754,007
-----------
NEW YORK--14.5%
AAA 8,950 Long Island Pwr. Auth. Rev., Ser. A, 5.50%, 12/01/10, AMBAC ......... No Opt. Call 9,246,514
AAA 4,500++ New York City, G.O., Ser. B, 6.95%, 8/15/04, MBIA ................... N/A 4,918,230
New York St. Env. Fac. Corp., P.C.R.,
AAA 6,155 6.70%, 5/15/09 ................................................... 11/04 @ 102 6,648,754
AAA 4,965 6.80%, 5/15/10 ................................................... 11/04 @ 102 5,378,485
</TABLE>
See Notes to Financial Statements.
6
<PAGE>
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------
PRINCIPAL
AMOUNT OPTION CALL VALUE
RATING* (000) DESCRIPTION PROVISIONS+ (NOTE 1)
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NEW YORK--(CONTINUED)
New York St. Medicare Fac. Rev., AMBAC,
AAA $ 9,715++ 6.60%, 2/15/05 ..................................................... N/A $ 10,628,113
AAA 2,695++ 6.625%, 2/15/05 .................................................... N/A 2,951,052
-----------
39,771,148
-----------
OHIO--6.1%
AAA 12,000++ Cleveland Wtrwks. Rev., First Mtg., Ser. F, 6.50%, 1/01/02, AMBAC ..... N/A 12,542,760
AAA 3,900 Lucas Cnty. Hosp. Impt. Rev., St. Vincent Med. Ctr.,
6.50%, 8/15/12, MBIA ............................................... 8/02 @ 102 4,086,498
-----------
16,629,258
-----------
OKLAHOMA--2.1%
AAA 5,725 Oklahoma City Wtr. Util. Tr., Wtr. & Sewer. Rev., Ser. B,
6.375%, 7/01/12, MBIA .............................................. 7/02 @ 100 5,873,106
-----------
PENNSYLVANIA--11.4%
AAA 5,000 Dauphin Cnty. Gen. Auth. Hosp. Rev., 6.25%, 7/01/08, MBIA ............. 7/02 @ 102 5,219,000
AAA 7,500 Pennsylvania St. Higher Edl. Fac. Auth. Rev., Ser. A,
5.25%, 8/01/10, FSA ................................................ 8/09 @ 101 7,432,500
AAA 2,100 Philadelphia Wtr. & Waste Rev., Ser. A, 5.625%, 6/15/08, AMBAC ........ No Opt. Call 2,179,674
Pittsburgh, G.O.,
AAA 7,000 Ser. A, 5.20%, 3/01/10, FGIC ....................................... 9/05 @ 100 7,025,270
AAA 6,005++ Ser. D, 6.00%, 9/01/02, AMBAC ...................................... N/A 6,273,844
AAA 3,000++ Pittsburgh Wtr. & Swr., 6.75%, 9/01/01, FGIC .......................... N/A 3,130,740
-----------
31,261,028
-----------
RHODE ISLAND--0.9%
Rhode Island Clean Wtr. Protn. Fin. Agcy., P.C.R.,
Revolving Fd. Pooled Ln., Issue A, MBIA,
AAA 2,155++ 6.70%, 10/01/02 .................................................... N/A 2,285,076
AAA 235 6.70%, 10/01/10 .................................................... 10/02 @ 102 247,537
-----------
2,532,613
-----------
SOUTH CAROLINA--8.6%
Piedmont Mun. Pwr. Agcy. Elec. Rev.,
AAA 14,925 6.30%, 1/01/11, MBIA ............................................... 1/03 @ 102 15,591,103
AAA 7,900 6.50%, 1/01/11, FGIC ............................................... 1/01 @ 102 8,107,217
-----------
23,698,320
-----------
TEXAS--16.0%
AAA 1,055 Austin Util. Sys. Rev. Comb., Ser A., FGIC, 6.00%, 5/15/10 ............ 8/00 @ 100 1,058,629
AAA 1,580 Dallas Cnty. Road Imp., G.O., 5.625%, 8/15/10 ......................... 8/01 @ 100 1,591,613
AAA 2,500 Dallas Ft. Worth Regl. Arpt. Rev., Ser. A, 7.375%, 11/01/10, FGIC ..... 5/04 @ 102 2,751,700
AAA 8,000 El Paso Impt. Auth. Rev., G.O., Ser. A, 6.375%, 8/15/10, FGIC ......... No Opt. Call 8,226,640
Harris Cnty., Toll Road, FGIC,
AAA 2,585 Ser. B, Zero Coupon, 8/15/08 ....................................... No Opt. Call 1,684,205
AAA 6,310++ Sr. Lien, Ser. A, 6.50%, 8/15/02 ................................... N/A 6,658,627
AAA 4,775 Sr. Lien, Ser. A, 6.50%, 8/15/11 ................................... 8/02 @ 102 5,007,304
AAA 10,440 Houston Wtr. & Swr. Sys., Ser. C, Zero Coupon, 12/01/10, AMBAC ........ No Opt. Call 5,984,417
AAA 1,840++ North Texas Mun. Wtr. Dist., 6.50%, 6/01/03, MBIA ..................... N/A 1,927,271
Texas Mun. Pwr. Agcy. Rev.,
AAA 3,210 5.25%, 9/01/12, MBIA ............................................... 9/03 @ 100 3,188,654
AAA 4,000 Ser. A, 5.50%, 9/01/10, MBIA ....................................... No Opt. Call 4,120,280
AAA 1,500 Ser. A, 6.75%, 9/01/12, AMBAC ...................................... 9/01 @ 102 1,556,235
-----------
43,755,575
-----------
</TABLE>
See Notes to Financial Statements.
7
<PAGE>
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------
PRINCIPAL
AMOUNT OPTION CALL VALUE
RATING* (000) DESCRIPTION PROVISIONS+ (NOTE 1)
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
UTAH--2.5%
AAA $ 3,470 Intermountain Pwr. Agcy. Rev., Ser. A, 5.25%, 7/01/11 ................. 7/09 @ 101 $ 3,465,628
AAA 1,450 Salt Lake City. Mun. Bldg. Lease Rev., 6.15%, 10/01/10, MBIA .......... 10/04 @ 101 1,512,510
AAA 3,175 Salt Lake City Wtr. Conservancy, Zero Coupon, 10/01/10, AMBAC ......... No Opt. Call 1,832,578
-----------
6,810,716
-----------
VIRGINIA--3.6%
Peninsula Port Auth., Riverside Hlth. Sys., MBIA,
AAA 6,000++ Proj. A, 6.625%, 7/01/02 ........................................... N/A 6,340,020
AAA 3,380 Proj. B, 6.625%, 7/01/10 ........................................... 7/02 @ 102 3,546,634
-----------
9,886,654
-----------
WASHINGTON--10.0%
AAA 4,650++ Port of Seattle Rev., 6.60%, 8/01/02, MBIA ............................ N/A 4,908,447
AAA 5,000 Washington St., G.O., Ser. 2000 A, 5.50%, 7/01/11, MBIA ............... 7/09 @ 100 5,107,500
AAA 6,500 Washington St., Convention & Trade Ctr., 5.00%, 7/01/10, MBIA ......... 7/09 @ 100 6,396,520
Washington St. Pub. Pwr. Supply Sys. Rev.,
AAA 12,905 Zero Coupon, 7/01/10, MBIA ......................................... No Opt. Call 7,475,995
AAA 3,500++ Nuclear Proj. No. 2, Ser. A, 7.00%, 7/01/00, FGIC .................. N/A 3,570,000
-----------
27,458,462
-----------
WISCONSIN--0.7%
AAA 2,000++ Wisconsin St. Hlth. & Edl. Facs. Auth. Rev., Wausau Hosp. Inc.,
Ser. A, 6.625%, 2/15/01, AMBAC ..................................... N/A 2,065,500
-----------
TOTAL INVESTMENTS--162.7% (COST $422,660,800) ......................... 445,825,957
Liabilities in excess of other assets--(0.5)% ......................... (1,333,637)
Liquidation value of preferred stock--(62.2)% ......................... (170,400,000)
------------
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS--100% .................... $274,092,320
============
</TABLE>
-------------
* 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.
++ This bond is prerefunded. See glossary for definition.
<TABLE>
--------------------------------------------------------------------------------------------------------------------------
THE FOLLOWING ABBREVIATIONS ARE USED IN PORTFOLIO DESCRIPTIONS:
<S> <C>
AMBAC -- American Municipal Bond Assurance Corporation FNMA -- Federal National Mortgage Association
CONNIELEE -- College Construction Loan Insurance Association FSA -- Financial Security Assurance
C.O.P.-- Certificate of Participation MBIA -- Municipal Bond Insurance Association
ETM -- Escrowed to Maturity P.C.R. -- Pollution Control Revenue
FGIC -- Financial Guaranty Insurance Company
--------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
8
<PAGE>
--------------------------------------------------------------------------------
THE BLACKROCK INSURED
MUNICIPAL TERM TRUST INC.
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
ASSETS
Investments, at value (cost $422,660,800)
(Note 1) ..................................................... $445,825,957
Interest receivable ............................................ 7,959,578
Other assets ................................................... 38,251
------------
453,823,786
------------
LIABILITIES
Payable for investments purchased .............................. 6,401,445
Dividends payable--common stock ................................ 1,348,124
Due to custodian ............................................... 902,867
Offering costs payable--preferred stock ........................ 265,771
Dividends payable--preferred stock ............................. 191,413
Investment advisory fee payable (Note 2) ....................... 127,696
Administration fee payable (Note 2) ............................ 36,485
Other accrued expenses ......................................... 57,665
------------
9,331,466
------------
NET INVESTMENT ASSETS .......................................... $444,492,320
============
Net investment assets were comprised of:
Common stock:
Par value (Note 4) ......................................... $ 258,856
Paid-in capital in excess of par ........................... 239,119,022
Preferred stock (Note 4) ..................................... 170,400,000
------------
409,777,878
Undistributed net investment income .......................... 11,050,511
Accumulated net realized gain ................................ 498,774
Net unrealized appreciation .................................. 23,165,157
------------
Net investment assets, June 30, 2000 ......................... $444,492,320
============
Net assets applicable to common shareholders ................. $274,092,320
============
Net asset value per common share:
($274,092,320 /25,885,639 shares of
common stock issued and outstanding) ......................... $10.59
======
--------------------------------------------------------------------------------
THE BLACKROCK INSURED
MUNICIPAL TERM TRUST INC.
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
NET INVESTMENT INCOME
Income
Interest and discount earned ................................. $ 12,852,880
------------
Operating expenses
Investment advisory .......................................... 747,305
Administration ............................................... 213,516
Auction agent ................................................ 199,500
Reports to shareholders ...................................... 84,000
Custodian .................................................... 56,500
Legal ........................................................ 50,500
Directors .................................................... 36,000
Independent accountants ...................................... 29,500
Registration ................................................. 16,000
Transfer agent ............................................... 15,500
Miscellaneous ................................................ 54,812
------------
Total expenses ............................................... 1,503,133
------------
Net investment income .......................................... 11,349,747
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain on investments ............................... 823,378
Net change in unrealized appreciation on
investments .................................................. (402,084)
------------
Net gain on investments ........................................ 421,294
------------
NET INCREASE IN NET INVESTMENT
ASSETS RESULTING FROM OPERATIONS ............................... $ 11,771,041
============
See Notes to Financial Statements.
9
<PAGE>
--------------------------------------------------------------------------------
THE BLACKROCK INSURED MUNICIPAL TERM TRUST INC.
STATEMENTS OF CHANGES IN NET INVESTMENT ASSETS (UNAUDITED)
--------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
JUNE 30, DECEMBER 31,
2000 1999
------------- -------------
INCREASE (DECREASE) IN NET INVESTMENT ASSETS
OPERATIONS:
Net investment income ...................... $ 11,349,747 $ 21,975,360
Net realized gain on investments ........... 823,378 27,290
Net change in unrealized appreciation
on investments ........................... (402,084) (17,696,367)
------------- -------------
Net increase in net investment assets
resulting from operations ................ 11,771,041 4,306,283
------------- -------------
DIVIDENDS:
To common shareholders from net
investment income ........................ (8,088,562) (16,177,181)
To preferred shareholders from
net investment income .................... (3,195,042) (4,278,809)
------------- -------------
Total dividends ............................ (11,283,604) (20,455,990)
------------- -------------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from additional issuance
of preferred shares ...................... 39,685,334 --
------------- -------------
Total increase (decrease) ................ 40,172,771 (16,149,707)
------------- -------------
NET INVESTMENT ASSETS
Beginning of period .......................... 404,319,549 420,469,256
------------- -------------
End of period (including undistributed
net investment income of $11,050,511
and $10,984,368 respectively) .............. $ 444,492,320 $ 404,319,549
============= =============
See Notes to Financial Statements.
10
<PAGE>
--------------------------------------------------------------------------------
THE BLACKROCK INSURED MUNICIPAL TERM TRUST INC.
FINANCIAL HIGHLIGHTS (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED DECEMBER 31,
JUNE 30, ----------------------------------------------------
2000 1999 1998 1997 1996 1995
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
PER COMMON SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period .......................... $ 10.60 $ 11.22 $ 11.20 $ 10.87 $ 11.02 $ 9.73
-------- -------- -------- -------- -------- --------
Net investment income ....................................... .44 .85 .85 .84 .83 .84
Net realized and unrealized gain (loss)
on investments ............................................ .01 (.68) (.03) .29 (.18) 1.27
-------- -------- -------- -------- -------- --------
Net increase from investment operations ....................... .45 .17 .82 1.13 .65 2.11
-------- -------- -------- -------- -------- --------
Dividends from net investment income to:
Common shareholders ......................................... (.31) (.62) (.62) (.62) (.62) (.62)
Preferred shareholders ...................................... (.12) (.17) (.18) (.18) (.18) (.20)
-------- -------- -------- -------- -------- --------
Total dividends ............................................... (.43) (.79) (.80) (.80) (.80) (.82)
-------- -------- -------- -------- -------- --------
Capital charge with respect to issuance
of preferred shares ......................................... (.03) -- -- -- -- --
-------- -------- -------- -------- -------- --------
Net asset value, end of period* ............................... $ 10.59 $ 10.60 $ 11.22 $ 11.20 $ 10.87 $ 11.02
======== ======== ======== ======== ======== ========
Market value, end of period* .................................. $ 10.00 $ 9.44 $ 11.50 $ 11.00 $ 10.13 $ 10.00
======== ======== ======== ======== ======== ========
TOTAL INVESTMENT RETURN+ ...................................... 9.41% (12.92)% 10.53% 15.22% 7.59% 25.31%
======== ======== ======== ======== ======== ========
RATIOS TO AVERAGE NET ASSETS OF
COMMON SHAREHOLDERS:
Expenses++ .................................................... 1.11%+++ .94% .93% .94% .97% .96%
Net investment income before preferred stock dividends++ ...... 8.42%+++ 7.74% 7.56% 7.66% 7.66% 7.97%
Preferred stock dividends ..................................... 2.36%+++ 1.51% 1.53% 1.62% 1.61% 1.87%
Net investment income available to common shareholders ........ 6.06%+++ 6.23% 6.03% 6.04% 6.05% 6.10%
SUPPLEMENTAL DATA:
Average net assets of common shareholders (in thousands) ...... $272,157 $284,075 $290,004 $283,531 $281,521 $272,868
Portfolio turnover rate ....................................... 9% 0% 0% 1% 1% 1%
Net assets of common shareholders,
end of period (in thousands) ................................ $274,092 $274,320 $290,469 $289,962 $281,470 $285,226
Preferred stock outstanding (in thousands) .................... $170,400 $130,000 $130,000 $130,000 $130,000 $130,000
Asset coverage per share of preferred stock,
end of period ............................................... $ 65,241 $ 77,768 $ 80,868 $ 80,768 $ 79,132 $ 79,898
</TABLE>
----------
* Net asset value and market value are published in BARRON'S each Saturday
and THE WALL STREET JOURNAL on Monday.
+ Total investment return is calculated assuming a purchase of common stock
at the current market price on the first day and a sale at the current
market price on the last day of each period reported. Dividends are
assumed, for purposes of this calculation, to be reinvested at prices
obtained under the Trust's dividend reinvestment plan. Total investment
return does not reflect brokerage commissions. Total investment return for
the period of less than one year has not been annualized.
++ Ratios calculated on the basis of income and expenses applicable to both
the common and preferred stock, relative to the average net assets of
common stockholders.
+++ Annualized.
The information above represents the unaudited operating performance data for a
share of common stock outstanding, total investment return, ratios to average
net assets and other supplemental data for each of the 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 (UNAUDITED)
--------------------------------------------------------------------------------
NOTE 1. ORGANIZATION & ACCOUNTING POLICIES
The BlackRock Insured Municipal Term Trust Inc. (the "Trust"), was organized in
Maryland on December 23, 1991 as a diversified, closed-end management investment
company. The Trust's investment objective is to manage a diversified portfolio
of high quality 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 dealers or pricing services approved by the Trust's Board of
Directors. In determining the value of a particular security, pricing services
may use certain information with respect to transactions in such securities,
quotations from bond dealers, market transactions in comparable securities and
various relationships between securities in determining values. Short-term
securities are valued at amortized cost. 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.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on the trade date. Realized and unrealized gains and losses are
calculated on the identified cost basis. Interest income is recorded on the
accrual basis and the Trust accretes original issue discount and amortizes
premium on securities purchased using the interest method.
FEDERAL INCOME TAXES: It is the Trust's intention to continue to meet the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute sufficient net income to shareholders. For this
reason and because substantially all of the Trust's gross income consists of
tax-exempt interest, no federal income tax provision is required.
DIVIDENDS AND DISTRIBUTIONS: The Trust declares and pays dividends 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.
ESTIMATES: The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America 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.
DEFERRED COMPENSATION PLAN: Under a deferred compensation plan approved by the
Board of Directors on February 24, 2000, non-interested Directors may elect to
defer receipt of all or a portion of their annual compensation.
Deferred amounts earn a return as though equivalent dollar amounts had
been invested in common shares of other BlackRock funds selected by the
Directors. This has the same economic effect as if the Directors had invested
the deferred amounts in such other BlackRock funds.
The deferred compensation plan is not funded and obligations thereunder
represent general unsecured claims against the general assets of the Trust. The
Trust may, however, elect to invest in common shares of those funds selected by
the Directors in order to match its deferred compensation obligations.
NOTE 2. AGREEMENTS
The Trust has an Investment Advisory Agreement with BlackRock Advisors, Inc.
(the "Advisor"), which is a wholly-owned subsidiary of BlackRock, inc., which in
turn is an
12
<PAGE>
indirect majority-owned subsidiary of PNC Financial Services Group, Inc. The
Trust has an Administration Agreement with Mitchell Hutchins Asset Management
Inc. (the "Administrator"), which is a wholly-owned subsidiary of PaineWebber
Incorporated.
The investment advisory fee paid to the Advisor 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 Advisor provides continuous supervision of
the investment portfolio and pays the compensation of officers of the Trust who
are affiliated persons of the Advisor. 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 investment securities, other than short-term investments,
for the six months ended June 30, 2000 aggregated $85,993,135 and $39,542,404,
respectively.
The federal income tax basis of the Trust's investments at June 30, 2000
was substantially the same as the basis for financial reporting, and
accordingly, net unrealized appreciation for federal income tax purposes was
$23,165,157 (gross unrealized appreciation--$23,189,407, gross unrealized
depreciation--$24,250).
For federal income tax purposes, the Trust had a capital loss carryforward
at December 31, 1999 of approximately $325,000 of which $279,000 will expire in
2003 and $46,000 will expire in 2005.
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, 2000, the Advisor owned 10,583
shares. As of June 30, 2000, there were 6,816 preferred shares outstanding as
follows: Series M7--4,216 and Series M28--2,600, which includes 1,616 shares of
Series M7 issued on March 10, 2000.
On March 10, 2000, the Trust reclassified 1,616 shares of common stock and
issued an additional 1,616 shares of Series M7 preferred stock. The additional
shares issued have identical rights and features of the existing M7 preferred
stock. Estimated offering costs of $310,666 and underwriting discount of
$404,000 have been charged to paid-in capital in excess of par of the common
shares.
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 3.25% to 6.15% for the six months ended June
30, 2000.
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 stockholders that might
otherwise be required, the approval of the holders of a majority of any
outstanding preferred stock, voting separately as a class would be required to
(a) adopt any plan of reorganization that would adversely affect the preferred
stock, 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
On June 30, 2000, the Board of Directors of the Trust declared dividends from
undistributed earnings of $0.04792 per common share payable August 1, 2000 to
shareholders of record on July 14, 2000.
For the period July 1, 2000 through July 31, 2000, dividends declared on
preferred shares totalled $557,798 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
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 transfer agent, as
dividend disbursing agent.
The Plan Agent serves as agent for the shareholders in administering the
Plan. After the Trust declares a dividend or determines to make a capital gain
distribution, the Plan Agent will, as agent for the participants, receive the
cash payment and use it to buy Trust shares in the open market on the New York
Stock Exchange for the participants' accounts. The Trust will not issue any new
shares under the Plan.
Participants in the Plan may withdraw from the Plan upon written notice to
the Plan Agent and will receive certificates for whole Trust shares and a cash
payment will be made for any fraction of a Trust share.
The Plan Agent's fees for the handling of the reinvestment of dividends
and distributions will be paid by the Trust. However, each participant will pay
a pro rata share of brokerage commissions incurred with respect to the Plan
Agent's open market purchases in connection with the reinvestment of dividends
and distributions. The automatic reinvestment of dividends and distributions
will not relieve participants of any federal income tax that may be payable on
such dividends or distributions.
The Trust reserves the right to amend or terminate the Plan as applied to
any dividend or distribution paid subsequent to written notice of the change
sent to all shareholders of the Trust at least 90 days before the record date
for the dividend or distribution. The Plan also may be amended or terminated by
the Plan Agent upon at least 90 days' written notice to all shareholders of the
Trust. All correspondence concerning the Plan should be directed to the Plan
Agent at (800) 699-1BFM. The addresses are on the front of this report.
14
<PAGE>
--------------------------------------------------------------------------------
THE BLACKROCK INSURED MUNICIPAL TERM TRUST INC.
ADDITIONAL INFORMATION
--------------------------------------------------------------------------------
ANNUAL MEETING OF TRUST SHAREHOLDERS. 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 May 18, 2000 to vote on
the following matters:
(1) To elect three Directors as follows:
DIRECTOR CLASS TERM EXPIRING
-------- ----- ----- -------
Frank J. Fabozzi ................. II 3 years 2003
Walter F. Mondale ................ II 3 years 2003
Ralph L. Schlosstein ............. II 3 years 2003
Directors whose term of office continues beyond this meeting are
Andrew F. Brimmer, Richard E. Cavanagh, Kent Dixon, Laurence D. Fink
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, 2000.
Shareholders elected the three Directors and ratified the selection
of Deloitte & Touche LLP. The results of the voting was as follows:
VOTES FOR* VOTES AGAINST* ABSTENTIONS*
-------- ----------- ----------
Frank J. Fabozzi ............ 4,797 -- 194
Walter F. Mondale ........... 21,987,089 -- 549,319
Ralph L. Schlosstein ........ 22,173,327 -- 363,081
Ratification of
Deloitte & Touche LLP ..... 22,159,717 114,101 262,590
----------
* The votes represent common and preferred shareholders voting as a single
class except for the election of Frank J. Fabozzi who was elected by
preferred shareholders.
15
<PAGE>
--------------------------------------------------------------------------------
THE BLACKROCK INSURED MUNICIPAL TERM TRUST INC.
INVESTMENT SUMMARY
--------------------------------------------------------------------------------
THE TRUST'S INVESTMENT OBJECTIVE
The BlackRock Insured Municipal Term 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 Advisors, Inc. (the "Advisor") is an SEC-registered investment
advisor. As of June 30, 2000 the Advisor and its affiliates (together,
"BlackRock") managed $177 billion on behalf of taxable and tax-exempt clients
worldwide. Strategies include fixed income, equity and cash and may incorporate
both domestic and international securities. Domestic fixed-income strategies
utilize the government, mortgage, corporate and municipal bond sectors.
BlackRock manages twenty-two closed-end funds that are traded on either the New
York or American stock exchanges, and a $28 billion family of open-end funds.
Blackrock manages over 629 accounts, domiciled in the United States and
overseas.
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 Advisor to be of comparable credit quality (guaranteed, escrowed, or backed
in trust).
WHAT IS THE ADVISOR'S INVESTMENT STRATEGY?
The Advisor 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 Adviser 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 Advisor
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 to enhance the income of the portfolio. In order to maintain
competitive yields as the Trust approaches maturity and depending on market
conditions, the Advisor 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. If market
conditions such as high interest rate volatility, force a choice between current
income and risking the return of the initial offering price, it is likely that
the return of the initial offering price will be emphasized.
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 first 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 advisor to determine whether their brokerage
firm offers dividend reinvestment services.
16
<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.
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. The Advisor'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 the Advisor 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.
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.
INVESTMENT GRADE MUNICIPAL OBLIGATIONS. 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.
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.
ALTERNATIVE MINIMUM TAX (AMT). The Trust may invest in securities subject to
alternative minimum tax. The Trust currently holds no AMT securities.
17
<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 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.
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, divided by
the total number of outstanding shares. It is the
underlying value of a single share on a given day.
Net asset value for the Trust is calculated weekly
and published in BARRON'S on Saturday and THE 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.
PREREFUNDED BONDS: These securities are collateralized by U.S.
Government securities which are held in escrow and
are used to pay principal and interest on the
tax-exempt issue and to retire the bond in full at
the date indicated, typically at a premium to par.
18
<PAGE>
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BLACKROCK ADVISORS, INC.
SUMMARY OF CLOSED-END FUNDS
--------------------------------------------------------------------------------
TAXABLE TRUSTS
--------------------------------------------------------------------------------
STOCK MATURITY
PERPETUAL TRUSTS SYMBOL DATE
------ --------
The BlackRock Income Trust Inc. BKT N/A
The BlackRock North American Government Income Trust Inc. BNA N/A
The BlackRock High Yield Trust BHY N/A
TERM TRUSTS
The BlackRock Target Term Trust Inc. BTT 12/00
The BlackRock 2001 Term Trust Inc. BTM 06/01
The BlackRock Strategic Term Trust Inc. BGT 12/02
The BlackRock Investment Quality Term Trust Inc. BQT 12/04
The BlackRock Advantage Term Trust Inc. BAT 12/05
The BlackRock Broad Investment Grade 2009 Term Trust Inc. BCT 12/09
TAX-EXEMPT TRUSTS
-------------------------------------------------------------------------------
STOCK MATURITY
PERPETUAL TRUSTS SYMBOL DATE
------ --------
The BlackRock Investment Quality Municipal Trust Inc. BKN N/A
The BlackRock California Investment Quality Municipal Trust Inc. RAA N/A
The BlackRock Florida Investment Quality Municipal Trust RFA N/A
The BlackRock New Jersey Investment Quality Municipal Trust Inc. RNJ N/A
The BlackRock New York Investment Quality Municipal Trust Inc. RNY N/A
The BlackRock Pennsylvania Strategic Municipal Trust BPS N/A
The BlackRock Strategic Municipal Trust BSD 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 DO NOT HESITATE TO CALL
BLACKROCK AT (800) 277-7BFM (7236) OR CONSULT WITH YOUR FINANCIAL ADVISOR.
19
<PAGE>
---------
BlackRock
---------
DIRECTORS
Laurence D. Fink, CHAIRMAN
Andrew F. Brimmer
Richard E. Cavanagh
Kent Dixon
Frank J. Fabozzi
James 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 M. Klingert, VICE PRESIDENT
Richard M. Shea, VICE PRESIDENT/TAX
Henry Gabbay, TREASURER
James Kong, ASSISTANT TREASURER
Karen H. Sabath, SECRETARY
INVESTMENT ADVISOR
BlackRock Advisors, Inc.
400 Bellevue Parkway
Wilmington, DE 19809
(800) 227-7BFM
ADMINISTRATOR
Mitchell Hutchins Asset Management Inc.
51 West 52nd Street
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
Deutsche Bank
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
Four Times Square
New York, NY 10036
LEGAL COUNSEL - INDEPENDENT DIRECTORS
Debevoise & Plimpton
875 Third Avenue
New York, NY 10022
The accompanying financial statements as of June 30, 2000 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.
51 West 52nd Street
New York, NY 10019
(800) 227-7BFM
092474 10 5
092474 20 4
[RECYCLE LOGO] Printed on recycled paper 092474 30 3
---------
BlackRock
THE ---------
INSURED MUNICIPAL
TERM TRUST INC.
------------------------
SEMI-ANNUAL REPORT
JUNE 30, 2000
