BLACKROCK INVESTMENT QUALITY TERM TRUST INC, N-30D, 1998-08-28

BLACKROCK INVESTMENT QUALITY TERM TRUST INC
N-30D, 1998-08-28

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THE BLACKROCK INVESTMENT QUALITY TERM TRUST INC.
SEMI-ANNUAL REPORT TO SHAREHOLDERS
REPORT OF INVESTMENT ADVISER
- --------------------------------------------------------------------------------

July 31, 1998

Dear Shareholder:

Domestic bonds provided investors with modest total returns during the
past six months, as interest rates generally fell. Supporting the bond market
was favorable inflation news and the belief that the Federal Reserve is unlikely
to raise short-term interest rates in the immediate future.

U.S. economic growth has slowed of late after a robust first quarter of
1998. We expect the fallout from the Asian fiscal crisis to quash any
significant rebound in U.S. growth for the remainder of the year. While we
expect that interest rates will be fairly stable in the near-term, our
longer-term outlook for the bond market remains optimistic, based on the
fundamentally favorable backdrop of low inflation, a currently high level of
real yields, and declining Treasury borrowing.

As you may know, the five investment management firms that comprised the
PNC Asset Management Group have consolidated under BlackRock, resulting in
BlackRock Inc., a $119 billion money management firm. We look forward to using
our global investment management expertise to present exciting investment
opportunities to closed-end fund shareholders in the future.

This report contains comments from your Trust's managers regarding the
markets and portfolio in addition to the Trust's financial statements and a
detailed portfolio listing. We thank you for your continued investment in the
Trust.

Sincerely,

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

<PAGE>

July 31, 1998

Dear Shareholder:

We are pleased to present the semi-annual report for The BlackRock
Investment Quality Term Trust Inc. ("the Trust") for the six months ended June
30, 1998. We would like to take this opportunity to review the Trust's stock
price and net asset value (NAV) performance, summarize market developments 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 "BQT". The
Trust's investment objective is to return $10 per share (its initial offering
price) to shareholders on or about December 31, 2004 while providing high
current income. Although there can be no guarantee, BlackRock is confident that
the Trust can achieve its investment objectives. The Trust seeks these
objectives by investing in investment grade fixed income securities, including
corporate debt securities, mortgage-backed securities backed by U.S. Government
agencies (such as Fannie Mae, Freddie Mac or Ginnie Mae), asset-backed
securities and commercial mortgage-backed securities. All of the Trust's assets
must be rated at least "BBB" by Standard & Poor's or "Baa" by Moody's at time of
purchase or be issued or guaranteed by the U.S. Government or its agencies.

The table below summarizes the performance of the Trust's stock price and
NAV (the market value of its assets per share) over the period:

-----------------------------------------------------
6/30/98 12/31/97 CHANGE HIGH LOW
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STOCK PRICE $8.4375 $8.3750 0.75% $8.6250 $8.3750
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NET ASSET VALUE (NAV) $9.59 $9.43 1.70% $9.60 $9.43
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10-YEAR TREASURY NOTE 5.45% 5.74% (0.29%) 5.81% 5.35%
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THE FIXED INCOME MARKETS

After an extremely strong first quarter of 1998, U.S. economic growth
slowed during the past three months. Despite the strong economic growth of the
past year, inflation stayed surprisingly subdued. One explanation for the
absence of inflation in the U.S. economy stems from the aftermath of the Asian
financial crisis. U.S. exports to Asia have slowed, while the strength of the
dollar caused cheap Asian imports to flood the U.S. market and exert downward
price pressure on domestic goods.

Yields of U.S. Treasury securities have remained in a fairly narrow range
during the period. For example, the yield of the 10-Year Treasury posted a net
decline of 29 basis points (0.29%), beginning 1998 at 5.74% and closing on June
30, 1998 at 5.45%. The past six months represented a continuation of strong
Treasury performance, which has been due to moderating economic growth, low
inflation and a "flight to quality" from investors seeking a safe haven in U.S.
Treasury securities. Continued expectations that the Asian crisis will slow
economic growth and that the Fed will adopt an easing bias provided additional
support to the bond market. With Treasury supply waning due to a surplus in the
federal budget and an increased foreign demand for Treasuries due to their U.S.
government backing and relatively attractive yields, we anticipate a positive
environment for Treasuries for the balance of 1998.

2
<PAGE>

In light of declining interest rates and faster prepayment speeds during
the period, mortgages modestly underperformed the broader investment grade bond
market. As measured by the LEHMAN BROTHERS MORTGAGE INDEX, mortgages posted a
3.37% total return versus 3.92% for the LEHMAN BROTHERS AGGREGATE INDEX.
Mortgage rates fell below the critical 7% threshold for the first time since
January 1994, causing concerns that increased refinancing activity would
negatively impact the performance of mortgage securities. Accordingly, lower
coupon securities generally outperformed more prepayment-sensitive higher-coupon
issues. The financial turmoil in Asia caused a decline in perceived corporate
bond credit quality ratings and as a result corporate bonds underperformed
Treasuries during both the first and second quarters. Lower interest rates
brought a flood of new corporate supply during the first quarter of 1998,
contributing to the modest performance of corporates.

THE TRUST'S PORTFOLIO AND INVESTMENT STRATEGY

BlackRock actively manages the Trust's portfolio holdings consistent with
BlackRock's overall market outlook and the Trust's investment objectives. The
following chart compares the Trust's current and December 31, 1997 asset
composition.

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THE BLACKROCK INVESTMENT QUALITY TERM TRUST INC.
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COMPOSITION JUNE 30, 1998 DECEMBER 31, 1997
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Corporate Bonds 29% 30%
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U.S. Government Securities 11% 11%
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Commercial Mortgage Backed Securities 10% 7%
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Agency Multiple Class Mortgage Pass-Throughs 9% 12%
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Money Market Instruments 8% 5%
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FHA Project Loans 7% 7%
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Municipal Bonds 7% 5%
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Mortgage Pass-Throughs 5% 9%
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Interest Only Mortgage Backed Securities 4% 4%
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Principal Only Mortgage Backed Securities 4% 3%
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Asset-Backed Securities 4% 3%
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Inverse Floating Rate Mortgages 2% 4%
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RATING % OF CORPORATES
--------------------------------------
CREDIT RATING JUNE 30, 1998 DECEMBER 31, 1997
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AA or equivalent 0% 1%
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A or equivalent 43% 45%
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BBB or equivalent 49% 47%
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BB or equivalent 8% 7%
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<PAGE>

In accordance with the Trust's primary investment objective of returning
the initial offer price upon maturity, the Trust's portfolio management activity
focused on adding securities which offered both attractive yield spreads over
Treasury securities and a maturity date matching the Trust's termination date of
December 31, 2004. Additionally, the Trust has been active in reducing positions
in bonds which have maturity dates or potential cash flows after the Trust's
termination date. During the reporting period, the most significant additions
have been in the asset-backed securities (ABS) sector. Additionally, the Trust
maintained its significant weighting in investment grade corporate bonds and
well-structured mortgage securities such as commercial mortgage-backed
securities (CMBS). To finance these purchases, the Trust sold mortgage
pass-through securities, as their maturities may extend past the Trust's
termination date in a rising interest rate environment.

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 Investment Quality 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/Michael P.Lustig
- ------------------- -------------------
Robert S. Kapito Michael P.Lustig
Vice Chairman and Portfolio Manager Director and Portfolio Manager
BlackRock Financial Management, Inc. BlackRock Financial Management, Inc.

1 Yield on Closing Stock Price is calculated by dividing the current annualized
distribution per share by the closing stock price per share.

2 The distribution is not constant and is subject to change.

4
<PAGE>

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THE BLACKROCK INVESTMENT QUALITY TERM TRUST INC.
PORTFOLIO OF INVESTMENTS
JUNE 30, 1998 (UNAUDITED)
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PRINCIPAL
AMOUNT VALUE
(000) DESCRIPTION (NOTE 1)
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LONG-TERM INVESTMENTS--127.6%
MORTGAGE PASS-THROUGHS--19.3%
Federal Home Loan Mortgage Corp.,
$15,476 6.50%, 12/01/99 - 12/18/20 .............. $15,428,812
8,500 7.00%, 12/01/99 ......................... 8,627,500
Federal Housing Administration,
2,106 Colonial, Series 37,
7.40%, 12/01/22 ....................... 2,187,361
6,276 GMAC, Series 51,
7.43%, 2/01/21 ........................ 6,473,030
1,250 Middlesex, 8.625%, 9/01/34 .............. 1,343,867
2,856 Tuttle Grove, 7.25%, 10/01/35 ........... 2,948,668
USGI,
1,634 Series 99, 7.43%, 10/01/23 ............ 1,704,318
8,116 Series 885, 7.43%, 3/01/22 ............ 8,456,259
4,224 Series 2081, 7.43%, 5/01/23 ........... 4,398,587
Federal National Mortgage
Association, Multi-family,
9,521++ 10 year, 6.35%,
1/01/04 ............................... 9,479,095
2,799+ 10 year, 8.26%,
2/01/04 ............................... 3,028,095
2,328+ 10 year, 8.78%,
4/01/04 ............................... 2,379,076
1,557++ 10 year, 8.89%,
4/01/04 ............................... 1,591,033
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68,045,701
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MULTIPLE CLASS MORTGAGE
PASS-THROUGHS--17.5%
Federal Home Loan Mortgage Corp.,
Multiclass Mortgage
Participation Certificates,
5,000++ Series 1295, Class 1295-JB,
3/15/07 ............................... 4,771,550
20,022++ Series 1353, Class 1353-S,
8/15/07 (ARM) ......................... 2,145,910
721 Series 1523, Class 1523-A,
6/15/22 ............................... 721,047
1,323 Series 1540, Class 1540-H,
3/15/09 ............................... 1,306,817
4,000+ Series 1587, Class 1587-KA,
7/15/08 ............................... 3,948,720
334 Series 1607, Class 1607-M,
4/15/13 ............................... 329,064
4,438++ Series 1634, Class 1634-SG,
12/15/22 (ARM) ........................ 4,606,186
406 Series 1650, Class 1650-LC,
2/15/22 ............................... 406,319
1,926 Series 1667, Class 1667-C,
1/15/09 ............................... 1,892,917
Federal National Mortgage Association,
REMIC Pass-Through Certificates,
2,204 Trust G93-27, Class 27-SE,
8/25/23 (ARM) ......................... 1,559,377
2,492 Trust 269, Class 269-1,
8/01/22 ............................... 2,550,454
1,646++ Trust 1992-155, Class 155-SB,
12/25/06 (ARM) ........................ 1,807,637
1,490 Trust 1993-22, Class 22-PT,
10/25/18 (l) .......................... 246,090
1,500 Trust 1993-143, Class 1993-SC,
8/25/23 (ARM) ......................... 1,393,590
503 Trust 1993-179, Class 179-SA,
10/25/23 (ARM) ........................ 471,335
1,932 Trust 1993-192, Class 192-S,
4/25/07 (ARM) ......................... 1,685,069
3,210 Trust 1993-212, Class 212-SB,
11/25/08 (ARM) ........................ 3,056,789
5,207 Trust 1993-225, Class 93-FK,
12/25/23 .............................. 5,168,418
990 Trust 1993-228, Class 228-B,
3/25/23 (P) ........................... 906,078
326 Trust 1994-17, Class 17-SA,
1/25/09 (ARM) ......................... 317,742
1,777 Trust 1994-27, Class 94-WC,
3/25/20 (I) ........................... 245,414
639 Trust 1994-36, Class 36-L,
1/25/23 ............................... 640,334
2,000++ Trust 1996-M5, Class A2,
1/25/11 ............................... 2,087,500
7,000 Trust 1996-20, Class 20-SB,
10/25/08 (ARM) ........................ 2,675,312
2,108 Trust 1997-28, Class 28-PH,
3/18/22 (l) ........................... 237,780
1,535 Trust 1997-30, Class 30-S,
4/25/22 (I) ........................... 660,179
2,881 Trust 1997-32, Class 32-ML,
2/25/27 (P) ........................... 2,590,916
1,964 Trust 1997-52, Class 97-52,
4/25/04 (I) ........................... 362,502
1,988 Trust 1998-12, Class 98-PL,
7/18/19 (I) ........................... 351,927
AAA 1,857 GE Capital Mortgage Services
Inc.,
Series 1997-2, Class 2A,
3/25/12 (I) ............................. 310,999
AAA 5,000+ New York City Mortgage Loan Trust,
Series 1996, Class A-2,
6/25/11 ................................. 5,171,875

See Notes to Financial Statements.

<PAGE>

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PRINCIPAL
AMOUNT VALUE
RATING (000) DESCRIPTION (NOTE 1)
- --------------------------------------------------------------------------------
MULTIPLE CLASS MORTGAGE
PASS-THROUGHS--(CONT'D)
RESIDENTIAL FUNDING MORTGAGE SECURITIES I,
AAA $6,520 Series 1993-S15, Class A-16,
4/25/08 (ARM) ...................... $ 6,601,761
AAA 673 Series 1993-S15, Class A-17,
4/25/08 (ARM) ...................... 647,527
-----------
61,875,135
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COMMERCIAL MORTGAGE-BACKED
SECURITIES--10.4%
AA 2,000 AETNA, Series 1995-C5, Class B,
6.74%, 12/26/30 ....................... 2,044,205
AAA 5,000 Credit Suisse First Boston Mortgage
Securities Corp.,
Series 1995-AEW 1, Class C,
7.458%, 11/25/27 ...................... 5,064,053
Baa2 6,485 FDIC REMIC Trust,
Series 1994-C1, Class 11-F,
8.70%, 9/25/25 ........................ 6,875,907
AAA 1,000 Kidder Peabody Acceptance Corp.,
Series 1994-C3, Class C,
8.80%, 4/01/07 ........................ 1,100,642
LTC Commercial Mortgage
Pass-Through Certificates,
AAA 2,000 Series 1994-1, Class 1-D, 10.00%,
6/15/26 ............................. 2,080,133
AAA 2,935 Series 1996-1, Class 1-A, 7.06%,
4/15/28 ............................. 2,994,412
Aaa 17,901 Merrill Lynch Mortgage Investors
Inc., Mortgage
Pass-Through Certificates,
Series 1997-C2, Class A1,
12/10/29 (I/O) ........................ 1,440,508
Morgan Stanley Capital 1 Inc.,
AAA 189 Series 1997, Class A1,
6.86%, 5/15/06 ...................... 194,077
AAA 39 Series 1997, Class X,
6/15/17 (I/O) ....................... 3,491
AAA 2,600 Nomura Asset Capital Corp.,
Series 1993-M1, Class A3, 7.64%,
11/25/03 .............................. 2,662,969
BBB 500 PaineWebber Mortgage Acceptance
Corp., Series 1995-M2, Class D,
7.20%, 12/01/03 ....................... 506,688
AAA 1,874 Salomon Brothers Mortgage Securities,
Class 97-TZH, 7.15%, 3/25/25 .......... 1,955,683
Structured Asset Securities Corp.,
Mortgage Certificates,
BBB 3,865 Series 1996, Class D, 7.03%,
2/25/28 ............................. 3,888,634
BB+ 5,970 Series 1996, Class E, 7.75%,
2/25/28 ............................. 6,066,158
-----------
36,877,560
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CORPORATE BONDS--39.2%
FINANCE & BANKING--11.4%
A3 2,450 Amsouth Bancorp.,
6.75%, 11/01/25 ....................... 2,517,970
A1 3,000 Den Danske Bank,
7.25%, 6/15/05 ........................ 3,151,223
A2 1,300 Equitable Life of America,
6.95%, 12/01/05 ....................... 1,344,560
A2 5,000 Farmers Insurance,
8.50%, 8/01/04 ........................ 5,463,392
A3 4,800 First National Bank of Boston,
8.00%, 9/15/04 ........................ 5,225,232
A3 5,000++ Fleet Financial Group,
8.125%, 7/01/04 ....................... 5,468,850
A+ 4,850 Goldman Sachs Group,
6.25%, 2/01/03 ........................ 4,824,359
Ba1 3,500 Macsaver Financial Services Inc.,
7.875%, 8/01/03 ....................... 3,301,021
A1 1,000 Metropolitan Life Insurance Co.,
6.30%, 11/01/03 ....................... 1,000,788
PaineWebber Group, Inc.,
Baa2 500 6.90%, 2/09/04 ........................ 510,361
Baa1 2,000 8.875%, 3/15/05 ....................... 2,266,380
A3 3,100 Reliaster Financial Corp.,
6.625%, 9/15/03 ....................... 3,133,139
A2 2,000 Salomon Smith Barney, Inc.,
6.75%, 1/15/06 ........................ 2,046,720
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40,253,995
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INDUSTRIALS--10.6%
A3 400 American Airlines, Inc.,
10.44%, 3/04/07 ....................... 502,392
BBB- 3,600 Anixter Inc.,
8.00%, 9/15/03 ........................ 3,778,230
Baa2 2,000 Conagra, Inc.,
7.40%, 9/15/04 ........................ 2,093,274
A1 5,500++ Ford Motor Credit Co.,
7.50%, 6/15/04 ........................ 5,852,275
Ba3 5,000 Lukens, Inc.,
7.625%, 8/01/04 ....................... 5,284,150
Baa3 5,000 Newmont Mining Corp.,
8.00%, 12/01/04 ....................... 5,440,650
Baa3 3,000 News America Holdings, Inc.,
8.50%, 2/15/05 ........................ 3,321,300
Baa3 5,000 Pulte Corp.,
8.375%, 8/15/04 ....................... 5,424,600
A2 2,000 Ralcorp Holdings, Inc.,
8.75%, 9/15/04 ........................ 2,280,800
Baa3 3,000 TCI-Communications, Inc.,
8.25%, 1/15/03 ........................ 3,247,170
-----------
37,224,841
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See Notes to Financial Statements.

6
<PAGE>

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PRINCIPAL
AMOUNT VALUE
RATING* (000) DESCRIPTION (NOTE 1)
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CORPORATE BONDS--(CONT'D.)
YANKEE--9.5%
A- $6,000 Banamex Remittance Master Trust,
Series 1996, 7.57%, 1/01/01 ........... $ 6,031,875
Baa2 2,000 Canadian Pacific Ltd.,
6.875%, 4/15/03 ....................... 2,032,409
A3 2,000 Corporacion Andina De Fomento,
7.10%, 2/01/03 ........................ 2,020,680
BBB- 5,000 Empresa Electric Guacolda SA,
7.95%, 4/30/03 ........................ 4,994,600
A3 3,500 Israel Electric Corp. Ltd.,
7.25%, 12/15/06 ....................... 3,634,645
A2 5,000 Quebec Province,
8.625%, 1/19/05 ....................... 5,664,050
BBB- 3,000 Telefonica De Argentina S A,
11.875%, 11/01/04 ..................... 3,225,000
Xtra, Inc.,
Baa2 2,000 6.50%, 1/15/04 ........................ 2,021,580
Baa2 2,500 7.22%, 7/31/04 ........................ 2,630,125
Baa1 1,358 YPF Sociedad Anonima,
7.50%, 10/26/02 ....................... 1,392,137
-----------
33,647,101
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UTILITIES--7.7%
360 Communications Co.,
Baa1 2,000 7.125%, 3/01/03 ....................... 2,071,420
Baa1 2,000 7.50%, 3/01/06 ........................ 2,134,520
Baa3 5,000 Gulf States Utilities Co.,
8.25%, 4/01/04 ........................ 5,366,000
Ba1 5,400 Niagara Mohawk Power Corp.,
7.375%, 8/01/03 ....................... 5,611,896
AAA 5,000 NRG Energy, Inc,
7.625%, 2/01/06 ....................... 5,183,442
Baa2 2,000 Ohio Edison,
8.625%, 9/15/03 ....................... 2,194,160
A1 5,000 Telekom Malaysia Berhad,
7.125%, 8/01/05 ....................... 4,716,400
-----------
27,277,838
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Total Corporate Bonds ................... 138,403,775
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ASSET-BACKED SECURITIES--4.5%
Structured Mortgage Asset Residential
Trust,
A1 2,916 Series 1997-2, Class A1,
7.85%, 9/15/01 ...................... 2,936,482
A1 4,312 Series 1997-2, Class E,
8.24%, 3/15/06 ...................... 4,347,330
A1 4,599 Series 1997-3, Class E,
8.72%, 4/15/06 ...................... 4,674,452
A1 4,000 Student Loan Marketing Associates,
Series 1995-1, Class B,
6.22%, 10/25/09 ....................... 4,000,000
-----------
15,958,264
-----------
STRIPPED MORTGAGE-BACKED
SECURITIES--11.6%
Federal Home Loan Mortgage
Corp.,
423 Series 1243, Class 1243-N,
8/15/06 (P/O) ....................... 360,870
22,633 Series 1506, Class 1506-SA,
1/15/05 (I/O) ....................... 316,639
44,482 Series 1644, Class 1644-DA,
12/15/23 (I/O) ...................... 1,926,942
4,943 Series 1751, Class 1751-PL,
10/15/23 (I/O) ...................... 624,554
603 Series 1862, Class 1862-DA,
12/15/22 (P/O) ...................... 548,986
704 Series 1862, Class 1862-DB,
12/15/22 (P/O) ...................... 640,484
5,000 Series 1917, Class 1917-AS,
5/15/08 (I/O) ....................... 1,082,650
5,423 Series 1946, Class 1946-SN,
10/15/08 (I/O) ...................... 4,214,521
5,423+ Series 1946, Class 1946-N,
10/15/08 (P/O) ...................... 1,247,024
43,424 Series 1954, Class 1954-BB,
4/15/21 (I/O) ....................... 556,372
18,428 Series 1954, Class 1954-LL,
5/15/21 (I/O) ....................... 241,872
18,428 Series 1954, Class 1954-LM,
5/15/21 (I/O) ....................... 250,510
7,340 Series 2009, Class 2009-JH,
11/15/21 (P/0) ...................... 6,852,823
13,972 Series G-25, Class 25-S,
8/25/06 (I/O) ....................... 509,550
Federal National Mortgage Association,
1,804+ Trust 1993-147, Class 147-H,
8/25/23 (P/O) ....................... 1,709,861
2,842 Trust 1994-42, Class 42-SO,
3/25/23 (I/O) ....................... 403,468
4,128 Trust 1996-24, Class 24-SE,
3/25/09 (I/O) ....................... 794,735
9,857 Trust 1996-24, Class 24-SL,
8/25/23 (I/O) ....................... 1,490,893
4,912++ Trust 1996-32, Class 32-E,
10/25/08 (P/O) ...................... 4,443,551
69,265 Trust 1996-54, Class 54-SH,
8/25/23 (I/O) ....................... 1,212,131
44,433 Trust 1996-54, Class 54-SL,
8/25/23 (I/O) ....................... 201,339
15,402 Trust 1997-44, Class 44-SC,
6/25/08 (I/O) ....................... 1,460,813
6,250 Trust 1997-50, Class HK,
8/25/27 (I/O) ....................... 2,222,656
15,220 Trust 1998-27, Class PI,
12/18/20 (I/O) ...................... 3,196,135
33,871 Trust 1998-37, Class L,
4/25/28 (I/O) ....................... 4,350,307
-----------
40,859,686
-----------
See Notes to Financial Statements.

7
<PAGE>

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PRINCIPAL
AMOUNT VALUE
RATING* (000) DESCRIPTION (NOTE 1)
- --------------------------------------------------------------------------------
U.S. GOVERNMENT SECURITIES--10.5%
Small Business Administration,
Participation Certificates,
$ 1,289 Series 1996-20-F,
7.55%, 6/01/16 ...................... $ 1,378,552
1,852 Series 1996-20-G,
7.70%, 7/01/16 ...................... 1,991,354
4,708 Series 1996-20-K,
6.95%, 11/01/16 ..................... 4,899,412
1,875 Series 1998-10-A,
6.12%, 2/01/08 ...................... 1,870,230
25,000++ U.S. Treasury Bonds,
6.125%, 11/15/27 ...................... 26,789,000
-----------
36,928,548
-----------

TAXABLE ZERO COUPON BONDS--7.7%
AAA 40,000 Vanguard Prime Money Market Strip,
Zero Coupon, 12/31/04 ................. 27,104,000
-----------

TAXABLE MUNICIPAL BONDS--6.9%
AAA 4,285 California Housing Finance Agency
Revenue, 6.69%, 8/01/03 ............... 4,332,435
AA- 2,000 Fresno California Pension Obligation,
7.15%, 6/01/04 ........................ 2,102,140
AAA 4,000 Los Angeles County California
Pension Obligation,
6.77%, 6/30/05 ........................ 4,143,200
AAA 7,000 New Jersey Economic Development
Authority, Zero Coupon,
2/15/04 ............................... 5,052,040
A3 5,000 New York City G.O.,
7.50%, 4/15/04 ........................ 5,289,650
Baa1 1,000 New York State Environmental Facilities
Corp., Service Contract
Revenue, 6.95%, 9/15/04 ............... 1,029,460
AAA 2,250 San Francisco California City & Cnty.
Arpts., Commission International
Airport, 6.55%, 5/01/04 ............... 2,298,105
-----------
24,247,030
-----------
Total long-term investments
(cost $435,232,310) ................... 450,299,699
-----------

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NOTIONAL
AMOUNT VALUE
(000) DESCRIPTION (NOTE 1)
- --------------------------------------------------------------------------------
SHORT TERM INVESTMENTS
PUT OPTIONS PURCHASED
$60,000 Interest Rate Swap,
6.90% over 3 months LIBOR
expires 10/30/98
(cost $1,152,600) ..................... $ 37,200
------------

Total investments before outstanding
call option written -- 127.6%
(cost $436,384,910) ................... 450,336,899
------------

CALL OPTION WRITTEN
150,000 Interest Rate Swap,
3 month LIBORover 5.25%
expires 12/01/98
(premium received $487,500) ........... (126,750)
------------
Total investments, net of
outstanding call option written
(cost $435,487,410) ................... 450,210,149

Other liabilities in excess of
other assets (27.6%) .................. (97,349,194)
------------
NET ASSETS--100% ........................ $352,860,955
============

- --------------
* Using the higher of Standard & Poor's or Moody's rating.
+ Partial amount pledged as collateral for reverse repurchase
agreements. See Note 4.
++ Entire principal amount pledged as collateral for reverse repurchase
agreements. See Note 4.

================================================================================
KEY TO ABBREVIATIONS
ARM -- Adjustable Rate Mortgage.
G.O. -- General Obligation.
I -- Denotes a CMO with interest only characteristics.
I/O -- Interest only.
P -- Denotes a CMO with principal only characteristics.
P/O -- Principal only.
REMIC-- Real Estate Mortgage Investment Conduit.
================================================================================

See Notes to Financial Statements.

8
<PAGE>

- ---------------------------------------------------------------------------
THE BLACKROCK INVESTMENT
QUALITY TERM TRUST INC.
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1998 (UNAUDITED)
- ---------------------------------------------------------------------------
ASSETS
Investments, at value (cost $436,384,910)
(Note 1) ................................................. $450,336,899
Interest receivable ........................................ 5,793,569
Receivable for investments sold ............................ 830,424
Interest rate cap, at value (amortized cost $938,597)
(Note 1 and 3) ........................................... 353,600
------------
457,314,492
------------
LIABILITIES
Reverse repurchase agreements (Note 4) ..................... 79,204,803
Payable for investments purchased .......................... 22,574,035
Due to custodian ........................................... 1,317,948
Interest payable ........................................... 398,260
Unrealized depreciation on interest rate swaps
(Note 1 and 3) ........................................... 287,865
Investment advisory fee payable (Note 2) ................... 174,284
Swap option written, at value
(premium received $487,500) (Note 1) ..................... 126,750
Administration fee payable (Note 2) ........................ 34,857
Other accrued expenses ..................................... 334,735
------------
104,453,537
------------
NET ASSETS ................................................. $352,860,955
============
Net assets were comprised of:
Common stock, at par (Note 5) ............................ $ 368,106
Paid-in capital in excess of par ......................... 344,443,944
------------
344,812,050
Undistributed net investment income ...................... 6,827,009
Accumulated net realized loss ............................ (12,217,981)
Net unrealized appreciation .............................. 13,439,877
------------
Net assets, June 30, 1998 ................................ $352,860,955
============
Net asset value per share:
(352,860,955 / 36,810,639 shares of
common stock issued and outstanding) ..................... $9.59
=====

- ---------------------------------------------------------------------------
THE BLACKROCK INVESTMENT
QUALITY TERM TRUST INC.
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1998 (UNAUDITED)
- ---------------------------------------------------------------------------
NET INVESTMENT INCOME
Income
Interest earned (net of premium amortization
of $316,646 and interest expense of
$4,094,672) ............................................ $14,026,526
-----------
Operating Expenses
Investment advisory ...................................... 1,047,969
Administration ........................................... 209,594
Reports to shareholders .................................. 67,000
Custodian ................................................ 45,000
Directors ................................................ 39,000
Audit .................................................... 21,000
Transfer agent ........................................... 11,000
Legal .................................................... 7,000
Miscellaneous ............................................ 42,692
-----------
Total operating expenses ............................... 1,490,255
-----------
Net investment income before excise tax .................. 12,536,271
Excise tax ............................................... 25,000
-----------
Net investment income .................................... 12,511,271
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (NOTE 3)
Net realized gain (loss) on:
Investments .............................................. (2,535,486)
Written options .......................................... 273,750
Short sales .............................................. (1,228,797)
Futures .................................................. 1,747,603
-----------
(1,742,930)
-----------
Net change in unrealized
appreciation (depreciation) on:
Investments .............................................. 2,326,133
Short sales .............................................. 834,363
Interest rate caps ....................................... (195,680)
Written options .......................................... 330,150
Futures .................................................. 235,366
-----------
3,530,332
-----------
Net gain on investments .................................. 1,787,402
-----------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS ................................ $14,298,673
===========

See Notes to Financial Statements.

<PAGE>

- ---------------------------------------------------------------------------
THE BLACKROCK INVESTMENT
QUALITY TERM TRUST INC.
STATEMENT OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 1998 (UNAUDITED)
- ---------------------------------------------------------------------------
INCREASE (DECREASE) IN CASH
Cash flows provided by operating activities:
Interest received ........................................ $ 18,544,169
Operating expenses and excise taxes paid ................. (1,536,205)
Interest expense paid .................................... (4,941,605)
Proceeds from disposition of short-term
portfolio investments, net ............................ 2,869,774
Purchase of long-term portfolio investments .............. (295,672,508)
Proceeds from disposition of long-term
portfolio investments ................................. 351,251,366
Variation margin on futures .............................. 1,893,110
Other assets ............................................. 49,740
------------
Net cash flows provided by operating
activities ............................................ 72,457,841
------------
Cash flows used for financing activities:
Decrease in reverse repurchase agreements ................ (63,742,947)
Cash dividends paid ...................................... (10,122,770)
------------
Net cash flows used for financing activities ............. (73,865,717)
------------
Net decrease in cash ........................................ (1,407,876)
Cash at beginning of period ................................. 89,928
------------
Cash at end of period ....................................... $ (1,317,948)
============

RECONCILIATION OF NET INCREASE IN NET
ASSETS RESULTING FROM OPERATIONS TO
NET CASH FLOWS PROVIDED BY OPERATING ACTIVITIES
Net increase in net assets resulting from
operations ................................................ $ 14,298,673
------------
Decrease in investments ..................................... 65,844,159
Net realized loss ........................................... 1,742,930
Increase in unrealized appreciation ......................... (3,530,332)
Increase in depreciation of interest rate swaps ............. 266,953
Decrease in interest receivable ............................. 106,326
Increase in receivable for investments sold ................. (820,523)
Decrease in deposits with brokers for
investments sold short ................................... 11,797,430
Decrease in investments sold short .......................... (11,127,605)
Decrease in swap option written ............................. (615,150)
Decrease in interest rate cap ............................... 323,510
Decrease in other assets .................................... 49,740
Decrease in payable for investments purchased ............... (4,920,527)
Decrease in due to broker-variation margin .................. (89,859)
Decrease in interest payable ................................ (846,933)
Decrease in other accrued expenses .......................... (20,951)
------------
Total adjustments ........................................ 58,159,168
------------
Net cash flows provided by operating activities ............. $ 72,457,841
============

- ---------------------------------------------------------------------------
THE BLACKROCK INVESTMENT
QUALITY TERM TRUST INC.
STATEMENTS OF CHANGES
IN NET ASSETS (UNAUDITED)
- ---------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, DECEMBER 31,
1998 1997
--------- -----------
INCREASE (DECREASE) IN
NET ASSETS

OPERATIONS:

Net investment income ............... $ 12,511,271 $ 23,792,454

Net realized gain (loss) on
investments ...................... (1,742,930) 680,436
Net change in unrealized
appreciation
on investments ................... 3,530,332 10,599,180
------------ ------------

Net increase in net assets
resulting from
operations ....................... 14,298,673 35,072,070

Dividends from net
investment income ................ (8,435,617) (22,853,156)
------------ ------------
Total increase ...................... 5,863,056 12,218,914

NET ASSETS

Beginning of period .................... 346,997,899 334,778,985
------------ ------------

End of period .......................... $352,860,955 $346,997,899
============ ============

See Notes to Financial Statements.

10
<PAGE>

- --------------------------------------------------------------------------------
THE BLACKROCK INVESTMENT QUALITY TERM TRUST INC.
FINANCIAL HIGHLIGHTS (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>

SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, -----------------------------------------------------
1998 1997 1996 1995 1994 1993
----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period .......................... $ 9.43 $ 9.09 $ 9.50 $ 8.21 $ 9.47 $ 9.57
------- ------- ------- ------- ------- -------
Net investment income (net of interest expense of
$0.11, $0.21, $0.17, $0.23, $0.17 and $0.15, respectively) 0.34 0.65 0.64 0.60 0.62 0.80
Net realized and unrealized gain (loss) ..................... 0.05 0.31 (0.46) 1.31 (1.16) (0.16)
Net increase (decrease) from investment operations ............ 0.39 0.96 0.18 1.91 (0.54) 0.64
Dividends from net investment income .......................... (0.23) (0.62) (0.59) (0.60) (0.68) (0.74)
------ ------ ------ ------ ------ ------
Distributions in excess of net investment income .............. -- -- -- (0.02) (0.04) --
Total dividends and distributions ............................. (0.23) (0.62) (0.59) (0.62) (0.72) (0.74)
Net asset value, end of period* ............................... $ 9.59 $ 9.43 $ 9.09 $ 9.50 $ 8.21 $ 9.47
====== ====== ====== ====== ====== ======
Market value, end of period* .................................. $ 8.44 $ 8.38 $ 7.63 $ 7.88 $ 7.00 $ 9.38
====== ====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN+ ...................................... 4.05% 18.58% 4.58% 21.91% (18.10%) 7.96%
====== ====== ====== ====== ====== ======
RATIOS TO AVERAGE NET ASSETS:
Operating expenses# ........................................... 0.86%++ 0.89% 0.91% 0.92% 0.93% 0.89%
Net investment income ......................................... 7.18%++ 6.98% 7.03% 6.76% 7.10% 8.19%

SUPPLEMENTALDATA:
Average net assets (in thousands) ............................. $351,181 $341,067 $332,778 $328,950 $320,366 $358,623
Portfolio turnover ............................................ 57% 135% 221% 160% 111% 77%
Net assets, end of period (in thousands) ...................... $352,861 $346,998 $334,779 $349,862 $302,147 $348,528
Reverse repurchase agreements outstanding, end of period
(in thousands) .............................................. $ 79,205 $142,948 $ 96,846 $112,007 $149,800 $156,558
Asset coverage+++ ............................................. $ 5,455 $ 3,427 $ 4,457 $ 4,124 $ 3,017 $ 3,226
</TABLE>

- ----------
* Net asset value and market value are published in THE WALL STREET JOURNAL
each Monday.
# The ratios of operating expenses, including interest expense, to average
net assets were 3.21%++, 3.15%, 2.83%, 3.44%, 2.84% and 2.38% for the
periods indicated above, respectively. The ratios of operating expenses,
including interest expense and excise tax, to average net assets were
3.22%++, 3.15%, 2.83%, 3.44%, 2.85% and 2.41% for the periods indicated
above, respectively.
+ 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 the period reported. Dividends are assumed,
for purposes of this calculation, to be reinvested at prices obtained under
the Trust's dividend reinvestment plan. This calculation does not reflect
brokerage commissions. Total investment returns for periods of less than
one full year are not annualized.
++ Annualized.
+++ Per $1,000 of reverse repurchase agreements outstanding.

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 shares.

See Notes to Financial Statements.

11
<PAGE>

- --------------------------------------------------------------------------------
THE BLACKROCK INVESTMENT QUALITY TERM TRUST INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------

NOTE 1. ORGANIZATION & ACCOUNTING POLICIES

The BlackRock Investment Quality 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 fixed income securities
that will return $10 per share to investors on or about December 31, 2004 while
providing high monthly income. The ability of issuers of debt securities held by
the Trust to meet their obligations may be affected by economic developments in
a specific 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: The Trust values mortgage-backed, asset-backed and other
debt securities on the basis of current market quotations provided by dealers or
pricing services approved by the Trust's Board of Directors. In determining the
value of a particular security, pricing services may use certain information
with respect to transactions in such securities, quotations from dealers, market
transactions in comparable securities, various relationships observed in the
market between securities, and calculated yield measures based on valuation
technology commonly employed in the market for such securities. Exchange-traded
options are valued at their last sales price as of the close of options trading
on the applicable exchanges. In the absence of a last sale, options are valued
at the average of the quoted bid and asked prices as of the close of business. A
futures contract is valued at the last sale price as of the close of the
commodities exchange on which it trades unless the Trust's Board of Directors
determines that such price does not reflect its fair value, in which case it
will be valued at its fair value as determined by the Trust's Board of
Directors. Any securities or other assets for which such current market
quotations are not readily available are valued at fair value as determined in
good 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.

In connection with transactions in repurchase agreements, the Trust's
custodian takes possession of the underlying collateral securities, the value of
which at least equals the principal amount of the repurchase transaction,
including accrued interest. To the extent that any repurchase transaction
exceeds one business day, the value of the collateral is marked-to-market on a
daily basis to ensure the adequacy of the collateral. If the seller defaults and
the value of the collateral declines or if bankruptcy proceedings are commenced
with respect to the seller of the security, realization of the collateral by the
Trust may be delayed or limited.

OPTION SELLING/PURCHASING: When the Trust sells or purchases an option, an
amount equal to the premium received or paid by the Trust is recorded as a
liability or an asset and is subsequently adjusted to the current market value
of the option written or purchased. Premiums received or paid from writing or
purchasing options which expire unexercised are treated by the Trust on the
expiration date as realized gains or losses. The difference between the premium
and the amount paid or received on effecting a closing purchase or sale
transaction, including brokerage commissions, is also treated as a realized gain
or loss. If an option is exercised, the premium paid or received is added to the
proceeds from the sale or cost of the purchase in determining whether the Trust
has realized a gain or a loss on investment transactions. The Trust, as writer
of an option, may have no control over whether the underlying securities may be
sold (call) or purchased (put) and as a result bears the market risk of an
unfavorable change in the price of the security underlying the written option.

Options, when used by the Trust, help in maintaining a targeted duration.
Duration is a measure of the price sensitivity of a security or a portfolio to
relative changes in interest rates. For instance, a duration of "one" means that
a portfolio's or a security's price would be expected to change by approximately
one percent with a one percent change in interest rates, while a duration of
five would imply that the price would move approximately five percent in
relation to a one percent change in interest rates.

Option selling and purchasing is used by the Trust to effectively "hedge"
positions so that changes in interest rates do not change the duration of the
portfolio unexpectedly. In general, the Trust uses options to hedge a long or
short position or an overall portfolio that is longer or shorter than the
benchmark security. A call option gives the purchaser of the option the right
(but not obligation) to buy, and obligates the seller to sell (when the option
is exercised), the underlying position at the exercise price at any time or at a
specified time during the option period. A put option gives the holder the right
to sell and obligates the writer to buy the underlying position at the exercise
price at any time or at a specified time during the option period. Put

12
<PAGE>

options can be purchased to effectively hedge a position or a portfolio against
price declines if a portfolio is long. In the same sense, call options can be
purchased to hedge a portfolio that is shorter than its benchmark against price
changes. The Trust can also sell (or write) covered call options and put options
to hedge portfolio positions.

The main risk that is associated with purchasing options is that the
option expires without being exercised. In this case, the option expires
worthless and the premium paid for the option is considered the loss. The risk
associated with writing call options is that the Trust may forego the
opportunity for a profit if the market value of the underlying position
increases and the option is exercised. The risk in writing put options is that
the Trust may incur a loss if the market value of the underlying position
decreases and the option is exercised. In addition, as with futures contracts,
the Trust risks not being able to enter into a closing transaction for the
written option as the result of an illiquid market.

INTEREST RATE SWAPS: In an interest rate swap, one investor pays a floating rate
of interest on a notional principal amount and receives a fixed rate of interest
on the same notional principal amount for a specified period of time.
Alternatively, an investor may pay a fixed rate and receive a floating rate.
Rate swaps were conceived as asset/liability management tools. In more complex
swaps, the notional principal amount may decline (or amortize) over time.

During the term of the swap, changes in the value of the swap are
recognized as unrealized gains or losses by "marking-to-market" to reflect the
market value of the swap. When the swap is terminated, the Trust will record a
realized gain or loss equal to the difference between the proceeds from (or cost
of) the closing transaction and the Trust's basis in the contract, if any.

The Trust is exposed to credit loss in the event of non-performance by the
other party to the swap. However, the Trust does not anticipate non-performance
by any counterparty.

INTEREST RATE CAPS: Interest rate caps are similar to interest rate swaps,
except that one party agrees to pay a fee, while the other party pays the
excess, if any, of a floating rate over a specified fixed or floating rate.

Interest rate caps are intended to both manage the duration of the Trust's
portfolio and its exposure to changes in short-term rates. Owning interest rate
caps reduces the portfolio's duration, making it less sensitive to changes in
interest rates from a market value perspective. The effect on income involves
protection from rising short-term rates, which the Trust experiences primarily
in the form of leverage.

The Trust is exposed to credit loss in the event of non-performance by the
other party to the interest rate cap. However, the Trust does not anticipate
non-performance by any counterparty.

Transactions fees paid or received by the Trust are recognized as assets
or liabilities and amortized or accreted into interest expense or income over
the life of the interest rate cap. The asset or liability is subsequently
adjusted to the current market value of the interest rate cap purchased or sold.
Changes in the value of the interest rate cap are recognized as unrealized gains
and losses.

SWAP OPTIONS: Swap options are similar to options on securities except that
instead of selling or purchasing the right to buy or sell a security, the writer
or purchaser of the swap option is granting or buying the right to enter into a
previously agreed upon interest rate swap agreement at any time before the
expiration of the option. Premiums received or paid from writing or purchasing
options are recorded as liabilities or assets and are subsequently adjusted to
the current market value of the option written or purchased. Premiums received
or paid from writing or purchasing options which expire unexercised are treated
by the Trust on the expiration date as realized gains or losses. The difference
between the premium and the amount paid or received on effecting a closing
purchase or sale transaction, including brokerage commission, is also treated as
a realized gain or loss. If an option is exercised, the premium paid or received
is added to the proceeds from the sale or cost of the purchase in determining
whether the Trust has realized a gain or loss on investment transactions.

The main risk that is associated with purchasing swap options is that the
swap option expires without being exercised. In this case, the option expires
worthless and the premium paid for the swap option is considered the loss. The
main risk that is associated with the writing of a swap option is the market
risk of an unfavorable change in the value of the interest rate swap underlying
the written swap option.

Swap options may be used by the Trust to manage the duration of the Trust's
portfolio or as part of an income producing strategy reflecting the view of the
Trust's management in the direction of interest rates.

FINANCIAL FUTURES CONTRACTS: A futures contract is an agreement between two
parties to buy and sell a financial instrument for a set price on a future date.
Initial margin deposits are made upon entering into futures contracts and can be
either cash or securities. During the period the futures contract is open,
changes in the value of the contract are recognized as unrealized gains or
losses by "marking-to-market" on a daily basis to reflect the market value of
the contract at the end of each day's trading. Variation margin

13
<PAGE>

payments are made or received, depending upon whether unrealized gains or losses
are incurred. When the contract is closed, the Trust records a realized gain or
loss equal to the difference between the proceeds from (or cost of) the closing
transaction and the Trust's basis in the contract.

Financial futures contracts, when used by the Trust, help in maintaining a
targeted duration. Futures contracts can be sold to effectively shorten an
otherwise longer duration portfolio. In the same sense, futures contracts can be
purchased to lengthen a portfolio that is shorter than its duration target.
Thus, by buying or selling futures contracts, the Trust can effectively "hedge"
positions so that changes in interest rates do not change the duration of the
portfolio unexpectedly.

The Trust may invest in financial futures contracts primarily for the
purpose of hedging its existing portfolio securities or securities the Trust
intends to purchase against fluctuations in value caused by changes in
prevailing market interest rates. Should interest rates move unexpectedly, the
Trust may not achieve the anticipated benefits of the financial futures
contracts and may realize a loss. The use of futures transactions involves the
risk of imperfect correlation in movements in the price of futures contracts,
interest rates and the underlying hedged assets. The Trust is also at risk of
not being able to enter into a closing transaction for the futures contract
because of an illiquid secondary market. In addition, since futures are used to
shorten or lengthen a portfolio's duration, there is a risk that the portfolio
may have temporarily performed better without the hedge or that the Trust may
lose the opportunity to realize appreciation in the market price of the
underlying positions.

SHORT SALES: The Trust may make short sales of securities as a method of hedging
potential price declines in similar securities owned. When the Trust makes a
short sale, it may borrow the security sold short and deliver it to the
broker-dealer through which it made the short sale as collateral for its
obligation to deliver the security upon conclusion of the sale. The Trust may
have to pay a fee to borrow the particular securities and may be obligated to
pay over any payments received on such borrowed securities. A gain, limited to
the price at which the Trust sold the security short, or a loss, unlimited as to
dollar amount will be recognized upon the termination of a short sale if the
market price is less or greater than the proceeds originally received.

SECURITIES LENDING: The Trust may lend its portfolio securities to qualified
institutions. The loans are secured by collateral at least equal, at all times,
to the market value of the securities loaned. The Trust may bear the risk of
delay in recovery of, or even loss of rights in, the securities loaned should
the borrower of the securities fail financially. The Trust receives compensation
for lending its securities in the form of interest on the loan. The Trust also
continues to receive interest on the securities loaned, and any gain or loss in
the market price of the securities loaned that may occur during the term of the
loan will be for the account of the Trust. The Trust did not engage in
securities lending during the six months ended June 30, 1998.

SECURITIES TRANSACTIONS AND NET 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 discount and amortizes premium on
securities purchased using the interest method. Expenses are recorded on the
accrual basis which may require the use of certain estimates by management.

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 substantially all of its taxable income to shareholders. Therefore,
no federal income tax provision is required. As part of a tax planning strategy,
the Trust intends to retain a portion of its taxable income and pay an excise
tax on the undistributed amounts.

DIVIDENDS AND DISTRIBUTIONS: The Trust declares and pays dividends and
distributions monthly, first from net invest-ment income, then from realized
short-term capital gains and other sources, if necessary. Net long-term capital
gains, if any, in excess of loss carryforwards are distributed at least
annually. Dividends and distributions are recorded on the ex-dividend date.

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
BlackRock Advisors

14
<PAGE>

Inc., which is an indirect majority-owned subsidiary of PNC Bank, N.A., and an
Administration Agreement with Prudential Investments Fund Management LLC
("PIFM"), an indirect, wholly-owned subsidiary of The Prudential Insurance Co.
of America.

The investment advisory fee paid to the Adviser is computed weekly and
payable monthly at an annual rate of 0.60% of the Trust's average weekly net
assets. The administration fee paid to PIFM is also computed weekly and payable
monthly at an annual rate of 0.12% of the Trust's average weekly net assets
until December 31, 1998, 0.10% from January 1, 1999 to December 31, 2002, and
0.08% from January 1, 2003 to the termination or liquidation of the Trust.

Pursuant to the agreements, the Adviser provides continuous supervision of
the investment portfolio and pays the compensation of officers of the Trust.
PIFM 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
and dollar rolls, for the six months ended June 30, 1998 aggregated $290,751,981
and $335,475,206, respectively.

The Trust may invest up to 30% of its total assets in securities which are
not readily marketable, including those which are restricted as to disposition
under securities law ("restricted securities"). At June 30, 1998, the Trust did
not hold any securities restricted as to resale.

The Trust may from time to time purchase in the secondary market certain
mortgage pass-through securities packaged or master serviced by PNC Mortgage
Securities Corp. (or Sears Mortgage if PNC Mortgage Securities Corp. succeeded
to rights and duties of Sears) or mortgage related securities containing loans
or mortgages originated by PNC Bank or its affiliates, including Midland Loan
Services, Inc. It is possible under certain circumstances, PNC Mortgage
Securities Corp. or its affiliates, including Midland Loan Services, Inc. could
have interests that are in conflict with the holders of these mortgage backed
securities, and such holders could have rights against PNC Mortgage Securities
Corp. or its affiliates, including Midland Loan Services, Inc.

The federal income tax basis of the Trust's investments at June 30, 1998
was substantially the same as for financial reporting purposes and, accordingly,
net unrealized appreciation for federal income tax purposes was $13,951,989
(gross unrealized appreciation-$18,535,565; gross unrealized depreciation-
$4,583,576).

For federal income tax purposes, the Trust has a capital loss carryforward
at December 31, 1997 of approximately $13,252,000, of which $6,970,700 expires
in 2001, $2,436,800 expires in 2002 and $3,844,500 expires in 2003. Accordingly,
no capital gains distribution is expected to be paid to shareholders until net
gains have been realized in excess of such amounts.

The Trust entered into one interest rate cap. Under the agreement the Trust
receives the excess, if any, of a floating rate over a fixed rate. The Trust
paid a transaction fee for the agreement. Details of the cap is as follows:

NOTIONAL VALUE AT
AMOUNT FLOATING FIXED TERMINATION AMORTIZED JUNE 30, UNREALIZED
(000) RATE RATE DATE COST 1998 DEPRECIATION
- -------- ------------- ----- ----------- -------- ------- ------------
$40,000 3 month LIBOR 6.00% 2/19/02 $938,597 $353,600 $ (584,997)

Details of open interest rate swaps at June 30, 1998 are as follows:

CURRENT
NOTIONAL UNREALIZED
AMOUNT FIXED TERMINATION APPRECIATION
(000) TYPE RATE FLOATING RATE DATE (DEPRECIATION)
- -------- ---- ---- -------------- ----------- --------------
$145,500 Interest Rate 6.37% 3 month LIBOR 7/27/00 $ 1,334,235
75,000 Interest Rate Zero 3 month LIBOR 5/28/03 (163,500)
(100,000) Interest Rate 6.42% 3 month LIBOR 7/27/01 (1,458,600)
------------
$ (287,865)
============

NOTE 4. BORROWINGS REVERSE REPURCHASE AGREEMENTS:

The Trust may enter into reverse repurchase agreements with qualified, third
party broker-dealers as determined by and under the direction of the Trust's
Board of Directors. Interest on the value of reverse repurchase agreements
issued and outstanding will be based upon competitive market rates at the time
of issuance. At the time the Trust enters into a reverse repurchase agreement,
it will establish and maintain a segregated account with the lender, the value
of which at least equals the principal amount of the reverse repurchase
transactions including accrued interest.

The average daily balance of reverse repurchase agreements outstanding
during the six months ended June 30, 1998 was approximately $135,452,664 at a
weighted average interest rate of approximately 5.35%. The maximum amount of
reverse repurchase agreements outstanding at any month-end during the period was
$171,583,625 as of February 28, 1998 which was 48.9% of total assets.

15
<PAGE>

DOLLAR ROLLS: The Trust may enter into dollar rolls in which the Trust sells
securities for delivery in the current month and simultaneously contracts to
repurchase substantially similar (same type, coupon and maturity) securities on
a specified future date. During the roll period the Trust forgoes principal and
interest paid on the securities. The Trust will be compensated by the interest
earned on the cash proceeds of the initial sale and by the lower repurchase
price at the future date.

The average monthly balance of dollar rolls outstanding during the six
months ended June 30, 1998 was approximately $69,303,991. The maximum amount of
dollar rolls outstanding at any month-end during the year was $109,682,135 as of
January 31, 1998, which was 31.1% of total assets.

NOTE 5. CAPITAL

There are 200 million shares of $.01 par value common stock authorized. Of the
36,810,639 shares outstanding at June 30, 1998, the Adviser owned 10,639 shares.

NOTE 6. DIVIDENDS

Subsequent to June 30, 1998, the Board of Directors of the Trust declared a
dividend from undistributed earnings of $0.045833 per share payable July 31,
1998 to shareholders of record on July 15, 1998.

16
<PAGE>

- --------------------------------------------------------------------------------
THE BLACKROCK INVESTMENT QUALITY 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 & Trust Company (the "Plan Agent")
in Trust shares pursuant to the Plan. Shareholders who do not participate in the
Plan will receive all distributions in cash paid by check in United States
dollars mailed directly to the shareholders of record (or if the shares are held
in street or other nominee name, then to the nominee) by the custodian, as
dividend disbursing agent.

The Plan Agent serves as agent for the shareholders in administering the
Plan. After the Trust declares a dividend or determines to make a capital gain
distribution, the Plan Agent will, as agent for the participants, receive the
cash payment and use it to buy Trust shares in the open market on the New York
Stock Exchange or elsewhere, for the participants' accounts. The Trust will not
issue any new shares in connection with 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 Plan Agent at (800) 699-1BFM. The addresses are on the front of
this report.

- --------------------------------------------------------------------------------
ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------

There have been no material changes in the Trust's investment objectives
or policies that have not been approved by the shareholders, or to its charter
or by-laws, or in the principal risk factors associated with investment in the
Trust. There have been no changes in the persons who are primarily responsible
for the day-to-day management of the Trust's portfolio.

The Annual Meeting of Trust Shareholders was held May 6, 1998 to vote on
the following matters:

(1) To elect three Directors to serve as follows:

DIRECTOR CLASS TERM EXPIRING
------- ----- ----- -------
Andrew F. Brimmer ...... III 3 years 2001
Kent Dixon ............. III 3 years 2001
Laurence D. Fink ....... III 3 years 2001

Directors whose term of office continues beyond this meeting are Richard
E. Cavanagh, James Grosfeld, James Clayburn La Force Jr., Frank J.
Fabozzi, Walter F. Mondale and Ralph L. Schlosstein.

(2) To ratify the selection of Deloitte & Touche LLP as independent public
accountants of the Trust for the fiscal year ending December 31, 1998.

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
-------- ----------- ----------
Andrew F. Brimmer ........ 29,284,462 0 922,169
Kent Dixon ............... 29,326,145 0 880,486
Laurence D. Fink ......... 29,306,906 0 899,725
Ratification of
Deloitte & Touche LLP ... 29,653,986 141,659 410,986

17
<PAGE>

- -------------------------------------------------------------------------------
THE BLACKROCK INVESTMENT QUALITY TERM TRUST INC.
INVESTMENT SUMMARY
- -------------------------------------------------------------------------------

THE TRUST'S INVESTMENT OBJECTIVE
The BlackRock Investment Quality Term Trust Inc.'s investment objective is to
manage a portfolio of investment grade fixed income securities that will return
$10 per share (the initial public offering price per share) to investors on or
about December 31, 2004 while providing high monthly income.

WHO MANAGES THE TRUST?
BlackRock Financial Management, Inc. ("BlackRock") is an SEC-registered
investment adviser. BlackRock and its affiliates currently manage over $119
billion on behalf of taxable and tax-exempt clients worldwide. Strategies
include fixed income, equity and cash any may incorporate both domestic and
international securities. Domestic fixed income strategies utilize the
government, mortgage, corporate and municipal bond sectors.BlackRock manages
twenty-one closed-end funds that are traded on either the New York or American
stock exchanges, and a $23 billion family of open-end equity and bond funds.
Current institutional clients number 334, domiciled in the United States and
overseas.

WHAT CAN THE TRUST INVEST IN?
The Trust may invest in all fixed income securities rated investment grade or
higher ("AAA", "AA", "A" or "BBB"). Examples of securities in which the Trust
may invest include U.S. government and government agency securities, zero coupon
securities, mortgage-backed securities, corporate debt securities, asset-backed
securities, U.S. dollar-denominated foreign debt securities and municipal
securities. Under current market conditions, BlackRock expects that the primary
investments of the Trust will be U.S. government securities, securities backed
by government agencies (such as mortgage-backed securities) and corporate debt
securities.

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 2004. 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 assets in relation to market conditions,
interest rate changes and, importantly, the remaining term to maturity of the
Trust.

In addition to seeking the return of the initial offering price, the Adviser
also seeks to provide high monthly income 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
33 1/3% of the 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 (i.e. cash
from early and regularly scheduled payments of principal on mortgage-backed
securities) 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. However, the Adviser will attempt to maintain a
yield which is competitive with a comparable maturity Treasury at the same point
on the yield curve (i.e. if the Trust has three years left until its maturity,
the Adviser will attempt to maintain a yield at a spread over a 3-year
Treasury). 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.

18
<PAGE>

HOW ARE THE TRUST'S SHARES PURCHASED AND SOLD? DOES THE TRUST PAY DIVIDENDS
REGULARLY?
The Trust's shares are traded on the New York Stock Exchange which provides
investors with liquidity on a daily basis. Orders to buy or sell shares of the
Trust must be placed through a registered broker or financial 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 & 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.

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 use of reverse
repurchase agreements and dollar rolls. Leverage permits the Trust to borrow
money at short-term rates and reinvest that money in longer-term assets which
typically offer higher interest rates. The difference between the cost of the
borrowed funds and the income earned on the proceeds that are invested in longer
term assets is the benefit to the Trust from leverage. In general, the portfolio
is typically leveraged at approximately 33 1/3% of total assets.

Leverage also increases the duration (or price volatility of the net assets) of
the Trust, which can improve the performance of the fund in a declining rate
environment, but can cause net assets to decline faster than the market in a
rising 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 reverse repurchase agreements and
dollar rolls, which involves special risks. The Trust's net asset value and
market value may be more volatile due to its use of leverage.

MARKET PRICE OF SHARES. The shares of closed-end investment companies such as
the Trust trade on the New York Stock Exchange and as such are subject to supply
and demand influences. As a result, shares may trade at a discount or a premium
to their net asset value.

MORTGAGE-BACKED AND ASSET-BACKED SECURITIES. The cash flow and yield
characteristics of these securities differ from traditional debt securities. The
major differences typically include more frequent payments and the possibility
of prepayments which will change the yield to maturity of the security.

CORPORATE DEBT SECURITIES. The value of corporate debt securities generally
varies inversely with changes in prevailing market interest rates. The Trust may
be subject to certain reinvestment risks in environments of declining interest
rates.

ZERO COUPON SECURITIES. Such securities receive no cash flows prior to maturity,
therefore interim price movements on these securities are generally more
sensitive to interest rate movements than securities that make periodic coupon
payments. These securities appreciate in value over time and can play an
important role in helping the Trust achieve its primary objective.

ILLIQUID SECURITIES. The Trust may invest in securities that are illiquid,
although under current market conditions the Trust expects to do so to only a
limited extent. These securities involve special risks.

NON-U.S SECURITIES. The Trust may invest less than 10% of its assets in non-U.S.
dollar-denominated securities which involve special risks such as currency,
political and economic risks, although under current market conditions does not
do so.

ANTITAKEOVER PROVISIONS. Certain antitakeover provisions will make a change in
the Trust's business or management more difficult without the approval of the
Trust's Board of Directors and may have the effect of depriving shareholders of
an opportunity to sell their shares at a premium above the prevailing market
price.

19
<PAGE>

- --------------------------------------------------------------------------------
THE BLACKROCK INVESTMENT QUALITY TERM TRUST INC.
GLOSSARY
- --------------------------------------------------------------------------------

ADJUSTABLE RATE MORTGAGE- Mortgage instruments with interest rates that
BACKED SECURITIES (ARMS): adjust at periodic intervals at a fixed amount
over the market levels of interest rates as
reflected in specified indexes. ARMS are backed
by mortgage loans secured by real property.

ASSET-BACKED SECURITIES: Securities backed by various types of
receivables such as automobile and credit card
receivables.

CLOSED-END FUND: Investment vehicle which initially offers a
fixed number of shares and trades on a stock
exchange. The fund invests in a portfolio of
securities in accordance with its stated
investment objectives and policies.

COLLATERALIZED MORTGAGE Mortgage-backed securities which separate
OBLIGATIONS (CMOS): mortgage pools into short-, medium-, and
long-term securities with different priorities
for receipt of principal and interest. Each
class is paid a fixed or floating rate of
interest at regular intervals. Also known as
multiple-class mortgage pass-throughs.

DISCOUNT: When a fund's net asset value is greater than
its stock price the fund is said to be trading
at a discount.

DIVIDEND: This is income generated by securities in a
portfolio and distributed to shareholders after
the deduction of expenses. This Trust declares
and pays dividends on a monthly basis.

DIVIDEND REINVESTMENT: Shareholders may elect to have all
distributions of dividends and capital gains
automatically reinvested into additional shares
of the Trust.

FHA: Federal Housing Administration, a government
agency that facilitates a secondary mortgage
market by providing an agency that guarantees
timely payment of interest and principal on
mortgages.

FHLMC: Federal Home Loan Mortgage Corporation, a
publicly owned, federally chartered corporation
that facilitates a secondary mortgage market by
purchasing mortgages from lenders such as
savings institutions and reselling them to
investors by means of mortgage-backed
securities. Obligations of FHLMC are not
guaranteed by the U.S. government, however;
they are backed by FHLMC's authority to borrow
from the U.S. government. Also known as Freddie
Mac.

FNMA: Federal National Mortgage Association, a
publicly owned, federally chartered corporation
that facilitates a secondary mortgage market by
purchasing mortgages from lenders such as
savings institutions and reselling them to
investors by means of mortgage-backed
securities. Obligations of FNMA are not
guaranteed by the U.S. government, however;
they are backed by FNMA's authority to borrow
from the U.S. government. Also known as Fannie
Mae.

GNMA: Government National Mortgage Association, a
government agency that facilitates a secondary
mortgage market by providing an agency that
guarantees timely payment of interest and
principal on mortgages. GNMA's obligations are
supported by the full faith and credit of the
U.S. Treasury. Also known as Ginnie Mae.

GOVERNMENT SECURITIES: Securities issued or guaranteed by the U.S.
government, or one of its agencies or
instrumentalities, such as GNMA (Government
National Mortgage Association), FNMA (Federal
National Mortgage Association) and FHLMC
(Federal Home Loan Mortgage Corporation).

20
<PAGE>

INVERSE-FLOATING RATE Mortgage instruments with coupons that adjust
MORTGAGES: at periodic intervals according to a formula
which sets inversely with a market lend
interest rate index.

INTEREST-ONLY SECURITIES (I/O): Mortgage securities that receive only the
interest cash flows from an underlying pool of
mortgage loans or underlying pass-through
securities. Also known as a STRIP.

MARKET PRICE: Price per share of a security trading in the
secondary market. For a closed-end fund, this
is the price at which one share of the fund
trades on the stock exchange. If you were to
buy or sell shares, you would pay or receive
the market price.

MORTGAGE DOLLAR ROLLS: A mortgage dollar roll is a transaction in
which the Trust sells mortgage-backed
securities for delivery in the current month
and simultaneously contracts to repurchase
substantially similar (although not the same)
securities on a specified future date. During
the "roll" period, the Trust does not receive
principal and interest payments on the
securities, but is compensated for giving up
these payments by the difference in the current
sales price (for which the security is sold)
and lower price that the Trust pays for the
similar security at the end date as well as the
interest earned on the cash proceeds of the
initial sale.

MORTGAGE PASS-THROUGHS: Mortgage-backed securities issued by Fannie
Mae, Freddie Mac or Ginnie Mae.

MULTIPLE-CLASS PASS-THROUGHS: Collateralized Mortgage Obligations.

NET ASSET VALUE (NAV): Net asset value is the total market value of
all securities and other assets held by the
Trust, plus income accrued on its investments,
minus any liabilities including accrued
expenses, divided by the total number of
outstanding shares. It is the underlying value
of a single share on a given day. Net asset
value for the Trust is calculated weekly and
published in BARRON'S on Saturday and THE WALL
STREET JOURNAL on Monday.

PRINCIPAL-ONLY SECURITIES (P/O) Mortgage securities that receive only the
principal cash flows from an underlying pool of
mortgage loans or underlying pass-through
securities. Also known as STRIPS.

PROJECT LOANS: Mortgages for multi-family, low- to
middle-income housing.

PREMIUM: When a fund's stock price is greater than its
net asset value, the fund is said to be trading
at a premium.

REMIC: A real estate mortgage investment conduit is a
multiple-class security backed by
mortgage-backed securities or whole mortgage
loans and formed as a trust, corporation,
partnership, or segregated pool of assets that
elects to be treated as a REMIC for federal tax
purposes. Generally, Fannie Mae REMICs are
formed as trusts and are backed by
mortgage-backed securities.

RESIDUALS: Securities issued in connection with
collateralized mortgage obligations that
generally represent the excess cash flow from
the mortgage assets underlying the CMO after
payment of principal and interest on the other
CMO securities and related administrative
expenses.

REVERSE REPURCHASE In a reverse repurchase agreement, the Trust
AGREEMENTS: sells securities and agrees to repurchase them
at a mutually agreed date and price. During
this time, the Trust continues to receive the
principal and interest payments from that
security. At the end of the term, the Trust
receives the same securities that were sold for
the same initial dollar amount plus interest on
the cash proceeds of the initial sale.

STRIPPED MORTGAGE-BACKED Arrangements in which a pool of assets is
SECURITIES: separated into two classes that receive
different proportions of the interest and
principal distributions from underlying
mortgage-backed securities. IO's and PO's are
examples of strips.

21
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
BLACKROCK FINANCIAL MANAGEMENT, INC.
SUMMARY OF CLOSED-END FUNDS
- --------------------------------------------------------------------------------

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

STOCK MATURITY
PERPETUAL TRUSTS SYMBOL DATE
------ ------
<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
- --------------------------------------------------------------------------------

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

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
</TABLE>

IF YOU WOULD LIKE FURTHER INFORMATION PLEASE CALL BLACKROCK AT (800)
227-7BFM (7236) OR CONSULT WITH YOUR FINANCIAL ADVISOR.

22
<PAGE>

- --------------------------------------------------------------------------------
BLACKROCKFINANCIAL MANAGEMENT, INC.
AN OVERVIEW
- --------------------------------------------------------------------------------

BlackRock Financial Management, Inc. ("BlackRock") is an SEC-registered
investment adviser. BlackRock and its affiliates currently manage over $119
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. BlackRock manages twenty-one closed-end funds that are
traded on either the New York or American stock exchanges, and a $23 billion
family of open-end equity and bond funds. Current institutional clients number
334, domiciled in the United States and overseas.

BlackRock's fixed income product was introduced in 1988 by a team of
highly seasoned fixed income professionals. These professionals had extensive
experience creating, analyzing and trading a variety of fixed income
instruments, including the most complex structured securities. In fact, several
individuals at BlackRock were responsible for developing many of the major
innovations in the mortgage-backed and asset-backed securities markets,
including the creation of the first 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
emphasis it places on the development of proprietary analytical capabilities.
Over one quarter of the firm's professionals is dedicated to the design,
maintenance and use of these systems, which are not otherwise available to
investors. BlackRock's proprietary analytical tools are used for evaluating, and
designing fixed income investment strategies for client portfolios. Securities
purchased include mortgages, corporate bonds, municipal bonds and a variety of
hedging instruments.

BlackRock has developed investment products that respond to investors'
needs and has been responsible for several major innovations in closed-end
funds. In fact, 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 AAA rating by Standard & Poor's, and the first
closed-end fund to invest primarily in North American Government securities.
Currently, BlackRock's closed-end funds have dividend reinvestment plans, which
are designed to provide ongoing demand for the stock in the secondary market.
BlackRock manages a wide range of investment vehicles, each 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
that you may have about your BlackRock funds and we thank you for the continued
trust that you place in our abilities.

IF YOU WOULD LIKE FURTHER INFORMATION
PLEASE DO NOT HESITATE TO CALL BLACKROCK AT (800) 227-7BFM

23
<PAGE>

BLACKROCK

DIRECTORS
Laurence D. Fink, CHAIRMAN
Andrew F. Brimmer
Richard E. Cavanagh
Kent Dixon
Frank J. Fabozzi
James Grosfeld
James Clayburn La Force, Jr.
Walter F. Mondale
Ralph L. Schlosstein

OFFICERS
Ralph L. Schlosstein, PRESIDENT
Keith T. Anderson, VICE PRESIDENT
Michael C. Huebsch, VICE PRESIDENT
Robert S. Kapito, VICE PRESIDENT
Richard M. Shea, VICE PRESIDENT/TAX
Henry Gabbay, TREASURER
James Kong, ASSISTANT TREASURER
Karen H. Sabath, SECRETARY

INVESTMENT ADVISER
BlackRock Financial Management, Inc.
345 Park Avenue
New York, NY 10154
(800) 227-7BFM

ADMINISTRATOR
Prudential Investments Fund Management LLC
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077

CUSTODIAN AND TRANSFER AGENT
State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171
(800) 699-1BFM

INDEPENDENT AUDITORS
Deloitte & Touche LLP
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, 1998 were not audited
and accordingly, no opinion is expressed on them.
This report is for shareholder information. This is not a prospectus intended
for use in the purchase or sale of any securities.

THE BLACKROCK INVESTMENT
QUALITY TERM TRUST INC.
c/o Prudential Investments Fund Management LLC
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
(800) 227-7BFM

09247E-103
[LOGO]Printed on recycled paper

THE BLACKROCK
INVESTMENT QUALITY
TERM TRUST INC.
================================================================================
SEMI-ANNUAL REPORT
JUNE 30, 1998

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