- --------------------------------------------------------------------------------
THE BLACKROCK INSURED MUNICIPAL 2008 TERM TRUST INC.
ANNUAL REPORT TO SHAREHOLDERS
REPORT OF INVESTMENT ADVISER
- --------------------------------------------------------------------------------
January 31, 1996
Dear Shareholder,
Since the inception of The BlackRock Insured Municipal 2008 Term Trust Inc.
in 1992, the market for investments in fixed income securities has witnessed an
unprecedented amount of interest rate volatility, which has changed the
landscape for fixed income investors. 1995 has been a great year for investments
in the bond market following the disappointments of 1994, as yields have
declined and the value of fixed income securities has increased dramatically.
Looking forward, we maintain a positive outlook for the market's performance
in 1996. The economy currently appears to be growing at a steady rate and
inflation appears to be under control. Market participants are beginning to
agree that the Federal Reserve has achieved the "soft landing" that they set out
to accomplish through a series of interest rate increases last year, and are
optimistic for a further ease in the Fed's monetary policy should a budget
accord emphasizing fiscal restraint be reached in Washington.
BlackRock Financial Management, Inc. is completing its first year as part of
PNC Bank Corporation, becoming an essential part of PNC's Asset Management Group
by taking a leadership role in their fixed income management operations. We have
witnessed consistent growth of our assets under management, which now stand at
approximately $34 billion, as both retail and institutional fixed income
investors continue to recognize the value of our risk management capabilities
and long term investment philosophy.
We look forward to maintaining your respect and confidence and to serving
your financial needs in the coming year.
Sincerely,
/s/ Laurence D. Fink /s/ Ralph L. Schlosstein
Laurence D. Fink Ralph L. Schlosstein
Chairman President
1
<PAGE>
January 31, 1996
Dear Shareholder:
We are pleased to present the annual report for The BlackRock Insured
Municipal 2008 Term Trust Inc. (NYSE symbol: "BRM") for the year ended December
31, 1995. The past year has been an exciting and challenging time to be
participating in the fixed income markets, and we would like to take this
opportunity to review the Trust's strong performance from both a stock price and
net asset value (NAV) perspective, as well as to discuss the opportunities
available to the Trust in the current lower interest rate environment.
The Trust is a closed-end bond fund whose investment objective is to manage a
portfolio of municipal debt securities that will return $15 per share (an amount
equal to the Trust's initial public offering price) to investors on or about
December 31, 2008, while providing current income exempt from regular federal
income tax. The Trust seeks to achieve this objective by investing in high
credit quality ("AAA" or insured to "AAA") tax-exempt general obligation and
revenue bonds issued by city, county and state municipalities throughout the
United States.
The table below summarizes the performance of the Trust's stock price and net
asset value (the market value of its bonds per share) over the fiscal year:
<TABLE>
<CAPTION>
12/31/95 12/31/94 CHANGE HIGH LOW
<S> <C> <C> <C> <C> <C>
STOCK PRICE $13.50 $12.25 +10.20% $14.50 $12.25
NET ASSET VALUE (NAV) $16.08 $13.88 +15.85% $16.20 $13.88
PREMIUM/(DISCOUNT) TO NAV (16.04%) (11.74%) (4.30%) (4.29%) (16.04%)
</TABLE>
THE FIXED INCOME MARKETS
The dramatic rally in the fixed income markets, which caused interest rates
to fall and prices of fixed income securities to rise since late 1994 has
changed the market landscape for fixed income investors. The Treasury market
rallied throughout the year, sparked by a deceleration in economic growth from
the torrid pace of 1994 as well as continued signs of subdued inflation. Over
the past twelve months, interest rates have declined substantially across the
Treasury and municipal yield curves. At the end of December, the yield of the
Treasury 30-year bond fell below 6.00% for the first time since October 1993,
closing the year at 5.95%. This represents a fall of 193 basis points (1.93%)
from year-end 1994.
While the overall performance of the municipal debt market somewhat lagged
the rally in the Treasury market, municipal securities posted strong performance
in 1995. Yields on municipal securities have declined dramatically from their
fourth quarter 1994 levels, led by a 123 basis point drop (1.23%) in the yield
on AAA 30-year General Obligation securities from 6.51% on December 31, 1994 to
5.28% on December 31, 1995. Although seasonal demand from coupon payments and
redemptions did not fully match expectations at times during the year, a
relatively light amount of new issuance improved technical conditions in the
municipal market and encouraged the rise in price for these securities.
Market participants have been attuned to the continuing debate in Washington
on tax reform. Most notably, several Congressional leaders and Presidential
hopefuls have proposed a variety of tax simplification plans, of which the most
extreme proposal would be a flat tax that would remove the tax-free advantage of
municipal income by exempting all investment income from taxation. On January
17, 1996, The Commission on Economic Growth and Tax Reform, headed by former
congressman Jack Kemp, released its much anticipated report. Their
recommendations emphasized a need for tax simplification towards a "single tax
bracket" without definitively recommending a particular rate of taxation, thus
setting the stage for increased discussion on this issue in the election year.
2
<PAGE>
Due to investor concerns over the potential threat of tax reform, it is
likely that the municipal market may continue to experience price volatility in
1996. While the municipal market rallied and yields declined over 1995,
municipal securities were trading at cheap levels relative to comparable
Treasuries at year-end. BlackRock believes that municipal securities have the
potential to be the best performing sector of the fixed income markets in 1996
should the tax reform proposals currently negatively affecting municipal bond
performance be eliminated.
THE TRUST'S PORTFOLIO AND INVESTMENT STRATEGY
The Trust's portfolio is invested in high credit-quality municipal issues
with ratings of "AAA" by Standard & Poor's Corporation (or of equivalent quality
determined by other major rating agencies). In addition, the majority of the
individual securities within the portfolio are insured as to timely payment of
interest and principal by municipal bond insurance companies whose long-term
obligations are rated "AAA." As such, Standard & Poor's has given a AAAf rating
to the portfolio.
BlackRock Financial Management actively manages the Trust's portfolio to
diversify exposure to various sectors, issuers, revenue sources and security
types. BlackRock's investment strategy emphasizes a relative value approach,
rotating sectors to benefit from changing market conditions. As the municipal
bond market rallied throughout 1995, prices of most securities in the portfolio
increased above their purchase price. By selling one of these bonds, the Trust
would recognize a gain and be forced to make a taxable distribution to
shareholders. As one of the Trust's primary objectives is to provide tax-free
income, the portfolio curbed its trading activity to minimize any taxable
distributions.
The Trust employs leverage at about 35% of total assets to enhance its income
by borrowing at short term municipal rates and investing the proceeds in longer
maturity issues which have higher yields. The degree to which the Trust can
benefit from its use of leverage affects the ability of the Trust to pay high
monthly income. The two reductions made to the Fed funds target rate in December
and January lowered the overnight bank lending rate by 0.50% and is expected to
result in lower short term municipal rates. This could provide the Trust an
opportunity to earn more excess income in the coming year through its use of
leverage.
THE BLACKROCK INSURED MUNICIPAL 2008 TERM TRUST INC.
<TABLE>
<CAPTION>
SECTOR DECEMBER 31, 1995 DECEMBER 31, 1994
<S> <C> <C>
County, City & State 33% 34%
Utility 20% 14%
Hospital 15% 16%
Transportation 8% 7%
Water & Sewer 6% 9%
Lease Revenue 5% 5%
Housing 3% 2%
Building 1% 1%
Education 1% 1%
Tax Revenue 1% 1%
Other 7% 10%
</TABLE>
3
<PAGE>
We look forward to managing the Trust in the coming year to benefit from the
opportunities available to investors in the municipal market. We thank you for
your investment and continued interest in The BlackRock Insured Municipal 2008
Term Trust Inc. Please feel free to call our marketing center at (800) 227-7BFM
(7236) if you have any specific questions which were not addressed in this
report.
Sincerely yours,
Robert S. Kapito Kevin Klingert
Vice Chairman and Portfolio Manager Managing Director and Municipal
BlackRock Financial Management, Inc. Portfolio Manager
BlackRock Financial Management, Inc.
THE BLACKROCK INSURED MUNICIPAL 2008 TERM TRUST INC.
Symbol on New York Stock Exchange: BRM
Initial Offering Date: September 18, 1992
Closing Stock Price as of 12/31/95: $13.50
Net Asset Value as of 12/31/95: $16.08
Yield on Closing Stock Price as of 12/31/95 ($13.50)1: 5.89%
Current Monthly Distribution per Common Share2: $0.06625
Current Annualized Distribution per Common Share2: $0.7950
- --------------
1 Yield on Closing Stock Price is calculated by dividing the current annualized
distribution per share by the closing stock price per share.
2 Distribution is not constant and is subject to change.
4
<PAGE>
<TABLE>
- -----------------------------------------------------------------------------------------------------------------------------
THE BLACKROCK INSURED
MUNICIPAL 2008 TERM TRUST INC.
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
OPTION
PRINCIPAL CALL
RATING* AMOUNT PROVISIONS+++ VALUE
(UNAUDITED) (000) DESCRIPTION (UNAUDITED) (NOTE 1)
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
LONG-TERM INVESTMENTS--144.9%
ALABAMA--0.2%
AAA 1,905 Mobile Impvt. Wt., Zero Coupon, 8/15/08, MBIA............ No Opt. Call 958,006
-------------------
ARIZONA--0.5%
AAA 4,000 Chandler, G.O., Zero Coupon, 7/01/08, FGIC............... No Opt. Call 2,090,960
-------------------
CALIFORNIA--1.6%
AAA 1,890 California Hlth. Facs. Fin. Auth. Rev., Marin Gen. Hosp.,
Ser. A, 5.75%, 8/01/09, FSA............................. 08/03 at 102 1,962,274
AAA 5,000 California St. Pub. Wks. Brd. Lease Rev., Dept. of
Corrections, Ser. C, 5.20%, 12/01/09, MBIA.............. No Opt. Call 5,008,250
-------------------
6,970,524
-------------------
COLORADO--10.7%
AAA 30,205 Jefferson Cnty., Sch. Dist. No. R-001, G.O., 6.25%,
12/15/08, AMBAC.......................................... 12/02 at 101 32,591,799
AAA 13,285 Univ. of Colorado, Hosp. Auth. Rev., Ser. A, 6.25%,
11/15/08, AMBAC.......................................... 11/02 at 102 14,411,435
-------------------
47,003,234
-------------------
DISTRICT OF COLUMBIA--5.5%
Dist. of Columbia, G.O., MBIA:
AAA 3,070 Ser. E, 5.875%, 6/01/08................................. 06/03 at 102 3,180,090
AAA 17,950 Ser. B, 6.30%, 6/01/09.................................. 06/02 at 102 18,922,531
AAA 2,000 Dist. of Columbia, Hosp. Rev., Children's Hosp., Ser. A,
6.25%, 7/15/08, FGIC.................................... 07/02 at 102 2,126,480
-------------------
24,229,101
-------------------
GEORGIA--1.7%
Atlanta, C.O.P., Pretrial Det. Ctr., MBIA:
AAA 3,000 6.25%, 12/01/08......................................... 12/02 at 102 3,257,340
AAA 4,000 6.25%, 12/01/11......................................... 12/02 at 102 4,270,600
-------------------
7,527,940
-------------------
ILLINOIS--13.4%
AAA 14,205 Chicago O' Hare Intl. Arprt. Rev., Ser. A, 6.25%,
1/01/08, MBIA............................................ 01/05 at 102 15,653,626
Chicago, Sch. Fin. Auth., G.O., Ser. A, FGIC:
AAA 13,000 6.25%, 6/01/07.......................................... 06/02 at 102 13,978,640
AAA 9,150 6.25%, 6/01/09.......................................... 06/02 at 102 9,760,854
Illinois Hlth. Facs. Auth. Rev.:
AAA 11,000 Alexian Med. Ctr. Proj., Ser. A, 4.10%++, 1/01/08,
MBIA.................................................... 01/02 at 102 11,218,350
Carle Foundation, 6.75%, 1/01/10, FGIC.................. 01/00 at 102 2,664,775
AAA 10,170 Met. Pier & Expo. Auth., Ded. St. Tax Rev., Ser. A, Zero
Coupon, 6/15/08, FGIC................................... No Opt. Call 5,322,775
-------------------
58,599,020
-------------------
INDIANA--2.5%
Indiana Hlth. Fac. Fin. Auth. Hosp. Rev. & Impvt.,
Ancilla Sys. Inc., MBIA:
AAA 5,665 Ser. A, 6.25%, 7/01/08.................................. 07/02 at 102 6,092,538
AAA 4,350 Ser. B, 6.25%, 7/01/08.................................. 07/02 at 102 4,678,294
-------------------
10,770,832
-------------------
IOWA--2.0%
AAA 4,015 Iowa Fin. Auth., Sngl. Fam. Mtge. Rev., Ser. F, 6.35%,
7/01/09, AMBAC.......................................... 01/03 at 102 4,198,044
AAA 4,400 Muscatine, Elec. Rev., 5.00%, 1/01/08, CGIC.............. 03/96 at 100 4,343,680
-------------------
8,541,724
-------------------
</TABLE>
See Notes to Financial Statements.
5
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
OPTION
PRINCIPAL CALL
RATING* AMOUNT PROVISIONS+++ VALUE
(UNAUDITED) (000) DESCRIPTION (UNAUDITED) (NOTE 1)
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
KENTUCKY--2.8%
AAA $ 9,000 Kentucky St. Tpke. Auth. Econ. Dev. Rd. Rev., 6.50%, No Opt. Call $ 10,222,740
7/01/08, AMBAC...........................................
AAA 3,890 Owensboro, Elec. Lt. & Pwr. Rev., Ser. B, Zero Coupon, No Opt. Call 1,969,157
1/01/09, AMBAC...........................................
-------------------
12,191,897
-------------------
LOUISIANA--1.2%
AAA 5,000 Louisiana Pub. Facs. Auth. Hosp. Rev., Lafayette Gen. 10/02 at 102 5,382,300
Med. Ctr. Proj., 6.30%, 10/01/08, FSA...................
-------------------
MASSACHUSETTS--6.4%
AAA 4,465 Chelsea, Sch. Proj. Loan, 6.00%, 6/15/09, AMBAC.......... 06/04 at 102 4,764,869
AAA 6,000 Massachusetts Bay Trans. Auth. Rev., Ser. B, 6.00%, 03/03 at 102 6,303,960
3/01/10, MBIA............................................
AAA 10,000 Massachusetts St. Hsg. Fin. Agcy., Hsg. Proj., Ser. A, 04/03 at 102 10,647,400
5.95%, 10/01/08, AMBAC..................................
AAA 6,000 Massachusetts St., G.O., Ser. C, 5.20%, 8/01/08, FGIC.... 08/03 at 102 6,075,180
-------------------
27,791,409
-------------------
MICHIGAN--5.2%
Lake Orion, Cmnty. Sch. Dist., AMBAC:
AAA 3,290 6.60%, 5/01/05+......................................... No Opt. Call 3,792,087
AAA 3,285 6.70%, 5/01/05+......................................... No Opt. Call 3,810,961
AAA 8,920 Michigan St. Bldg. Auth. Rev., Facs. Proj., Ser. IIA, 10/02 at 102 9,661,966
6.25%, 10/01/08, AMBAC...................................
AAA 1,760 Western Michigan Univ. Rev., 6.20%, 11/15/08, FGIC....... 11/02 at 102 1,899,902
AAA 3,400 Wyandotte, Elec. Rev., 6.25%, 10/01/08, MBIA............. No Opt. Call 3,771,994
-------------------
22,936,910
-------------------
MISSOURI--1.6%
AAA 6,600 Kansas City, Sch. Dist. Bldg. Corp. Leasehold Rev., Cap. 02/01 at 102 7,139,220
Impvts. Proj., Ser. A, 6.50%, 2/01/08, FGIC.............
-------------------
NEVADA--4.0%
AAA 6,490 Clark Cnty., Fld. Ctrl., 6.30%, 11/01/05, AMBAC.......... 11/01 at 101 7,046,712
Washoe Cnty., Arpt. Auth., Ser. B, MBIA:
AAA 3,135 5.70%, 7/01/07.......................................... 07/03 at 102 3,285,637
AAA 2,645 5.75%, 7/01/08.......................................... 07/03 at 102 2,761,671
AAA 4,135 Washoe Cnty., Sch. Dist., G.O., Ser. A, 6.20%, 4/01/09, 10/02 at 101 4,434,994
AMBAC....................................................
-------------------
17,529,014
-------------------
NEW JERSEY--13.3%
AAA 30,275 New Jersey Econ. Dev. Auth., Mkt. Trans. Fac. Rev., Ser. 07/04 at 102 32,106,940
A, 5.80%, 7/01/08, MBIA.................................
AAA 24,495 New Jersey St. G.O., Ser. D, 6.00%, 2/15/09, MBIA........ 02/03 at 102 26,096,973
-------------------
58,203,913
-------------------
NEW YORK--7.4%
New York City G.O., Ser. E, MBIA:
AAA 5,000 6.125%, 8/01/06......................................... No Opt. Call 5,540,400
AAA 15,500 6.20%, 8/01/07.......................................... No Opt. Call 17,253,515
New York St. Environ. Facs. Corp., Poll. Ctrl. Rev., Ser.
D:
AAA 5,945 6.50%, 5/15/07.......................................... 11/04 at 102 6,828,487
AAA 2,245 6.50%, 11/15/07......................................... 11/04 at 102 2,578,629
-------------------
32,201,031
-------------------
NORTH CAROLINA--9.0%
AAA 1,000 Cumberland Cnty. C.O.P., Civic Ctr. Proj., Ser. A, 12/04 at 102 1,099,560
6.375%, 12/01/09, AMBAC..................................
North Carolina Eastn. Mun. Pwr. Agcy. Rev., Ser. B:
AAA 13,500 6.125%, 1/01/09, FGIC................................... No Opt. Call 14,894,145
AAA 5,000 7.00%, 1/01/08, CAPMAC.................................. No Opt. Call 5,818,550
AAA 14,675 7.25%, 1/01/07, CAPMAC.................................. No Opt. Call 17,368,009
-------------------
39,180,264
-------------------
NORTH DAKOTA--1.1%
AAA 4,450 Bismark, Hosp. Rev., St. Alexius Med. Ctr., 6.90%, 05/03 at 100 4,949,913
5/01/06, AMBAC...........................................
-------------------
</TABLE>
See Notes to Financial Statements.
6
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
OPTION
PRINCIPAL CALL
RATING* AMOUNT PROVISIONS+++ VALUE
(UNAUDITED) (000) DESCRIPTION (UNAUDITED) (NOTE 1)
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
OHIO--2.4%
AAA $ 2,410 Cleveland, G.O., 6.40%, 11/15/08, MBIA................... 11/04 at 102 $ 2,679,679
AAA 6,095 Hamilton City, Elec. Sys. Rev., Ser. A, 6.125%, 10/15/08, 10/02 at 102 6,520,065
FGIC.....................................................
AAA 1,000 Ohio St. Bldg. Auth., Facs. Rev., Juvenille Correctional 10/04 at 102 1,110,780
Proj., 6.50%, 10/01/09, AMBAC...........................
-------------------
10,310,524
-------------------
PENNSYLVANIA--13.6%
AAA 4,000 Allegheny Cnty. Hosp. Dev. Auth. Rev., Magee Women's 10/02 at 102 4,330,320
Hosp., 6.25%, 10/01/08, FGIC............................
Dauphin Cnty. Gen. Auth. Hosp. Rev., HAPSCO-Western
Pennsylvania Hosp. Proj., MBIA:
AAA 5,000 6.25%, 7/01/08.......................................... 07/02 at 102 5,371,550
AAA 10,000 6.25%, Ser. A, 7/01/08.................................. 07/02 at 102 10,743,100
AAA 6,600 Erie Cnty., Hosp. Auth. Rev., St. Vincent Hlth. Ctr. 07/02 at 102 7,117,110
Proj., Ser. A, 6.25%, 7/01/08, MBIA.....................
AAA 3,500 Indiana Cnty. Indl. Dev. Auth., New York St. Elec. & Gas No Opt. Call 3,800,440
Corp., Ser. A, 6.00%, 6/01/06, MBIA.....................
AAA 6,500 Pennsylvania Hsg. Fin. Agcy. Rev., Rental Hsg., Ser. C, 07/02 at 102 6,828,900
6.25%, 7/01/07, FNMA, Collateral........................
AAA 7,450 Pennsylvania St., G.O., Ser. A, 6.50%, 11/01/07, FGIC.... 11/01 at 102 8,093,159
AAA 10,930 Pittsburgh, G.O., Ser. D, 6.00%, 9/01/08, AMBAC.......... 09/02 at 102 11,528,636
AAA 1,665 Scranton-Lackawanna Hlth. & Welfare Auth. Rev., 6.90%, 01/00 at 102 1,825,839
1/01/09, MBIA............................................
-------------------
59,639,054
-------------------
TEXAS--23.2%
Austin, Pub. Impvt., G.O., AMBAC:
AAA 4,000 6.10%, 9/01/07.......................................... 09/02 at 100 4,231,680
AAA 4,000 6.10%, 9/01/08.......................................... 09/02 at 100 4,208,560
AAA 5,000 6.10%, 9/01/09.......................................... 09/02 at 100 5,231,950
Austin, Util. Sys. Rev.:
AAA 11,515 Ser. A, Zero Coupon, 11/15/08, MBIA..................... No Opt. Call 5,897,638
AAA 5,000 Ser. A, Zero Coupon, 11/15/09, AMBAC.................... No Opt. Call 2,411,550
AAA 5,000 Ser. A, Zero Coupon, 11/15/09, MBIA..................... No Opt. Call 2,411,550
AAA 7,000 6.25%, 11/15/08, AMBAC.................................. 11/02 at 102 7,559,510
AAA 5,225 Baytown, G.O., 6.40%, 2/01/08, AMBAC..................... 02/02 at 100 5,591,011
AAA 9,930 Circle C Mun. Util. Dist. No. 3 Rev., 6.50%, 11/15/09, 11/01 at 100 10,665,714
FGIC.....................................................
Coppell Indpt. Sch. Dist., MBIA:
AAA 1,430 6.10%, 8/15/09.......................................... 08/02 at 100 1,574,645
AAA 2,495 6.10%, 8/15/09.......................................... 08/02 at 100 2,618,627
AAA 4,390 Houston Indpt. Sch. Dist., Zero Coupon, 8/15/09, AMBAC... No Opt. Call 2,122,345
AAA 16,135 Houston, Wtr. & Swr. Sys. Rev., Jr. Lien, Ser. C, 6.25%, 12/02 at 102 17,371,586
12/01/09, MBIA...........................................
San Antonio Elec. & Gas Rev.:
AAA 6,500 Ser. B, Zero Coupon, 2/01/09............................ No Opt. Call 3,267,680
AAA 6,000 Ser. B, Zero Coupon, 2/01/10............................ No Opt. Call 2,842,320
Texas Mun. Pwr. Agcy. Rev., AMBAC:
AAA 15,000 Zero Coupon, 9/01/08.................................... No Opt. Call 7,765,050
AAA 16,175 Zero Coupon, 9/01/09.................................... No Opt. Call 7,886,121
AAA 5,900 Texas St. Pub. Fin. Auth. Bldg. Rev., Ser. B, 6.25%, No Opt. Call 6,606,053
2/01/09, AMBAC...........................................
AAA 2,275 Ysleta, Indpt. Sch. Dist. Rev., Zero Coupon, 8/15/08, No Opt. Call 1,175,902
PSFG.....................................................
-------------------
101,439,492
-------------------
UTAH--0.4%
AAA 1,550 Salt Lake Cnty. Mun. Bldg. Auth. Lease Rev., Ser. A, 10/04 at 101 1,659,864
6.05%, 10/01/08, MBIA....................................
-------------------
</TABLE>
See Notes to Financial Statements.
7
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
OPTION
PRINCIPAL CALL
RATING* AMOUNT PROVISIONS+++ VALUE
(UNAUDITED) (000) DESCRIPTION (UNAUDITED) (NOTE 1)
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
WASHINGTON--12.5%
AAA $ 9,000 Seattle Hlth. Care Facs. Auth. Rev., Virginia Mason 02/03 at 102 $ 9,678,690
Oblig. Group, 6.30%, 2/15/09, MBIA......................
AAA 4,000 Snohomish Cnty., Sch. Dist., 6.10%, 12/01/08, MBIA....... 12/03 at 102 4,275,440
Washington St. Pub. Pwr. Supply Sys. Rev.:
AAA 5,550 No. 3, Zero Coupon, 7/01/07, MBIA....................... No Opt. Call 3,049,170
AAA 2,000 No. 3, Zero Coupon, 7/01/08, BIGI....................... No Opt. Call 1,030,420
AAA 10,000 No. 2, Ser. A, 5.70%, 7/01/08, MBIA..................... No Opt. Call 10,536,700
AAA 11,000 5.80%, 7/01/07, FSA..................................... No Opt. Call 11,728,530
AAA 13,635 No. 2, Ser. A, 6.25%, 7/01/09, MBIA..................... 07/02 at 102 14,561,635
-------------------
54,860,585
-------------------
WEST VIRGINIA--2.7%
AAA 11,600 West Virginia St. Parkways Econ. Dev. & Tourism Auth., 05/03 at 102 11,600,000
3.60%++, 5/15/09, FGIC..................................
-------------------
Total Long-Term Investments (cost $581,489,580).......... 633,706,731
-------------------
SHORT-TERM INVESTMENTS**--0.5%
CONNECTICUT
AAA 300 Connecticut St. Dev. Auth. Poll. Ctrl. Rev., Western 300,000
Mass. Elec. Co., Ser. A, 4.90%, 01/02/96, FRDD..........
-------------------
NEW YORK--0.5%
AAA 1,400 New York City, G.O., Ser. B, 5.00%, 1/02/96, FRDD, 1,400,000
FGIC.....................................................
AAA 500 New York City Mun. Wtr. Fin. Auth. Rev., 5.90%, 1/02/96, 500,000
FRDD, FGIC...............................................
A+ 200 New York City Trust Cultural Res. Rev., FRDD, 5.25%, 200,000
1/02/96..................................................
-------------------
2,100,000
-------------------
Total Short-Term Investments (cost $2,400,000)........... 2,400,000
-------------------
TOTAL INVESTMENTS--145.4% (cost $583,889,580)............ 636,106,731
Other assets in excess of liabilities--1.7%.............. 7,362,848
Liquidation value of preferred stock--(47.1)%............ (206,000,000)
-------------------
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS--100%....... $ 437,469,579
-------------------
-------------------
<FN>
- --------------
* Rating: using the greater of Standard and Poor's, Moody's or Fitch's.
** For purposes of amortized cost valuation, the maturity date of these
instruments is considered to be the later of the next date on which the
security can be redeemed at par or the next date on which the rate of
interest is adjusted.
+ This bond is prerefunded. See glossary for definition
++ This bond contains embedded caps. See glossary for definition
+++ Option call provisions: date (month/year) and prices of the earliest
option call or redemption. There may be other call provisions at varying
prices at later dates.
</TABLE>
KEY TO ABBREVIATIONS
AMBAC--American Municipal Bond Assurance Corporation
BIGI--Bond Investors Guaranty Insurance Company
CAPMAC--Capital Markets Assurance Corporation
CGIC--Capital Guaranteed Insurance Company
C.O.P.--Certificate of Participation
FGIC--Financial Guaranty Insurance Company
FNMA--Federal National Mortgage Association
FRDD--Floating Rate Daily Demand**
FSA--Financial Security Assurance
G.O.--General Obligation Bond
MBIA--Municipal Bond Insurance Association
PSFG--Permanent School Fund Guaranty
See Notes to Financial Statements.
8
<PAGE>
<TABLE>
- ----------------------------------------------
THE BLACKROCK INSURED
MUNICIPAL 2008 TERM TRUST INC.
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1995
- ----------------------------------------------
<S> <C>
ASSETS
Investments, at value (cost
$583,889,580) (Note 1)........... $636,106,731
Interest receivable............... 10,275,551
Receivable for investments sold... 85,000
Deferred organization expenses and
other assets..................... 44,297
------------
646,511,579
------------
LIABILITIES
Dividends payable--common stock... 2,181,403
Due to custodian.................. 194,672
Advisory fee payable (Note 2)..... 191,475
Dividends payable--preferred
stock............................. 174,197
Administration fee payable (Note
2)................................ 54,707
Other accrued expenses............ 245,546
------------
3,042,000
------------
NET INVESTMENT ASSETS............. $643,469,579
------------
------------
Net investment assets were
comprised of:
Common Stock:
Par value (Note 4)............. $ 272,071
Paid-in capital in excess of
par............................... 378,448,786
Preferred stock (Note 4)......... 206,000,000
------------
584,720,857
Undistributed net investment
income............................ 6,852,484
Distributions in excess of
accumulated net realized loss.... (320,913)
Net unrealized appreciation....... 52,217,151
------------
Net investment assets, December
31, 1995.......................... $643,469,579
------------
------------
Net assets applicable to common
shareholders...................... $437,469,579
------------
------------
Net asset value per common share:
($437,469,579/27,207,093 shares
of common stock issued and
outstanding)...................... $16.08
------------
------------
</TABLE>
<TABLE>
- ----------------------------------------------
THE BLACKROCK INSURED
MUNICIPAL 2008 TERM TRUST INC.
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1995
- ----------------------------------------------
<S> <C>
NET INVESTMENT INCOME
Income
Interest and discount earned..... $ 36,237,327
------------
Expenses
Investment advisory.............. 2,185,878
Administration................... 624,536
Auction agent.................... 594,000
Custodian........................ 102,000
Reports to shareholders.......... 72,000
Directors........................ 60,000
Legal............................ 30,000
Audit............................ 28,000
Transfer agent................... 26,000
Miscellaneous.................... 247,475
------------
Total expenses................... 3,969,889
------------
Net investment income............. 32,267,438
------------
REALIZED AND UNREALIZED GAIN ON
INVESTMENTS (NOTE 3)
Net realized gain on
investments....................... 3,007,107
Net change in unrealized
appreciation on investments...... 57,220,422
------------
Net gain on investments........... 60,227,529
------------
NET INCREASE IN NET INVESTMENT
ASSETS RESULTING FROM
OPERATIONS........................ $ 92,494,967
------------
------------
</TABLE>
See Notes to Financial Statements.
9
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK INSURED
MUNICIPAL 2008 TERM TRUST INC.
STATEMENTS OF CHANGES IN NET INVESTMENT ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1995 1994
------------ ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET INVESTMENT ASSETS
Operations:
Net investment income.................................................. $ 32,267,438 $ 31,224,952
Net realized gain (loss) on investments................................ 3,007,107 (781,029)
Net change in unrealized appreciation (depreciation) on investments.... 57,220,422 (64,026,939)
------------ ------------
Net increase (decrease) in net investment assets resulting from
operations............................................................. 92,494,967 (33,583,016)
------------ ------------
Dividends and Distributions:
To common shareholders from net investment income...................... (22,649,755) (24,078,223)
To common shareholders from net realized gain on investments........... (1,618,766) --
To common shareholders in excess of net realized gain on investments... (238,227)
To preferred shareholders from net investment income................... (7,552,794) (6,203,408)
To preferred shareholders from net realized gain on investments........ (561,857) --
To preferred shareholders in excess of net realized gain on
investments............................................................ (82,686) --
------------ ------------
(32,704,085) (30,281,631)
------------ ------------
Total increase (decrease)............................................ 59,790,882 (63,864,647)
NET INVESTMENT ASSETS
Beginning of year....................................................... 583,678,697 647,543,344
------------ ------------
End of year............................................................. $643,469,579 $583,678,697
------------ ------------
------------ ------------
</TABLE>
See Notes to Financial Statements.
10
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK INSURED
MUNICIPAL 2008 TERM TRUST INC.
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SEPTEMBER 28,
1992*
YEAR ENDED DECEMBER 31, THROUGH
------------------------------------ DECEMBER 31,
1995 1994 1993 1992
-------- -------- -------- -------------
<S> <C> <C> <C> <C>
PER COMMON SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period................... $ 13.88 $ 16.23 $ 14.31 $ 14.10
-------- -------- -------- -------------
Net investment income................................. 1.19 1.15 1.14 0.17
Net realized and unrealized gain (loss) on
investments........................................... 2.21 (2.39) 1.91 0.31
-------- -------- -------- -------------
Net increase (decrease) from investment operations..... 3.40 (1.24) 3.05 0.48
-------- -------- -------- -------------
Dividends from net investment income to:
Preferred shareholders................................ (0.28) (0.23) (0.20) (0.02)
Common shareholders................................... (0.83) (0.88) (0.88) (0.07)
Distributions from net realized gain on investments to:
Preferred shareholders................................ (0.02) -- (0.01) --
Common shareholders................................... (0.06) -- (0.04) --
Distributions in excess of net realized gain on
investments to:
Preferred Shareholders................................ -- *** -- -- --
Common Shareholders................................... (0.01) -- -- --
-------- -------- -------- -------------
Total dividends and distributions...................... (1.20) (1.11) (1.13) (0.09)
-------- -------- -------- -------------
Capital charge with respect to issuance of shares...... -- -- -- (0.18)
-------- -------- -------- -------------
Net asset value, end of period**....................... $ 16.08 $ 13.88 $ 16.23 $ 14.31#
-------- -------- -------- -------------
-------- -------- -------- -------------
Market value, end of period**.......................... $ 13.50 $ 12.25 $ 15.125 $ 13.75
-------- -------- -------- -------------
-------- -------- -------- -------------
TOTAL INVESTMENT RETURN+............................... 17.64% (13.71)% 16.05% (1.99)%
-------- -------- -------- -------------
-------- -------- -------- -------------
RATIOS TO AVERAGE NET ASSETS OF COMMON SHAREHOLDERS:+++
Expenses............................................... 0.95% 1.02% 0.88% 0.73%++
Net investment income.................................. 7.74% 7.80% 7.43% 4.91%++
SUPPLEMENTAL DATA:
Average net assets of common shareholders (in
thousands)............................................. $417,017 $400,555 $420,532 $ 372,256
Portfolio turnover..................................... 27% 64% 15% 2%
Net assets of common shareholders, end of period (in
thousands)............................................. $437,470 $377,679 $441,543 $ 389,333
Preferred stock outstanding (in thousands)............. $206,000 $206,000 $206,000 $ 206,000
Asset coverage per share of preferred stock, end of
period................................................. $ 78,091## $141,670 $157,171 $ 144,500
<FN>
- ------------
* Commencement of investment operations.
** Net asset value and market value are published in The Wall Street Journal
each Monday.
*** Actual amount paid to preferred shareholders was $0.002929 per common share.
# Net asset value immediately after the closing of the first public offering
was $14.07.
## A stock split occurred on July 24, 1995 (Note 4).
+ Total investment return is calculated assuming a purchase of common stock at
the current market price on the first day and a sale at the current market
price on the last day of the period. Dividends and distributions, if any, are
assumed for purposes of this calculation to be reinvested at prices obtained
under the Trust's dividend reinvestment plan. Total investment return does
not reflect brokerage commissions. Total investment return for periods of
less than a year are not annualized.
++ 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
shareholders. Ratios do not reflect the effect of dividend payments to
preferred shareholders.
</TABLE>
The information above represents the audited operating performance data for a
share of common stock outstanding, total investment return, ratios to average
net assets and other supplemental data for the periods indicated. This
information has been determined based upon financial information provided in the
financial statements and market value data for Trust's shares.
See Notes to Financial Statements.
11
<PAGE>
- ----------------------------------------------
THE BLACKROCK INSURED
MUNICIPAL 2008 TERM TRUST INC.
NOTES TO FINANCIAL STATEMENTS
- ----------------------------------------------
Note 1. Accounting Policies
The BlackRock Insured Municipal 2008 Term Trust Inc. (the "Trust") was organized
in Maryland on August 7, 1992 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 $15 per share to investors on or
about December 31, 2008 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 the
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: Municipal securities (including commitments to purchase
such securities on a "when-issued" basis) are valued on the basis of prices
provided by a pricing service which uses information with respect to
transactions in bonds, quotations from bond dealers, market transactions in
comparable securities and various relationships between securities in
determining values. Any securities or other assets for which such current market
quotations are not readily available are valued at fair value as determined in
good faith under procedures established by and under the general supervision and
responsibility of the Trust's Board of Directors.
Short-term securities which mature in more than 60 days are valued at current
market quotations. Short-term securities which mature in 60 days or less are
valued at amortized cost, if their term to maturity from date of purchase is 60
days or less, or by amortizing their value on the 61st day prior to maturity, if
their original term to maturity from date of purchase exceeded 60 days.
OPTION SELLING/PURCHASING: When the Trust sells or purchases an option, an
amount equal to the premium received or paid by the Trust is recorded as a
liability or an asset and is subsequently adjusted to the current market value
of the option written or purchased. Premiums received or paid from writing or
purchasing options which expire unexercised are treated by the Trust on the
expiration date as realized gains or losses. The difference between the premium
and the amount paid or received on effecting a closing purchase or sale
transaction, including brokerage commissions, is also treated as a realized gain
or loss. If an option is exercised, the premium paid or received is added to the
proceeds from the sale or cost of the purchase in determining whether the Trust
has realized a gain or a loss on investment transactions. The Trust, as writer
of an option, may have no control over whether the underlying securities may be
sold (call) or purchased (put) and as a result bears the market risk of an
unfavorable change in the price of the security underlying the written option.
FINANCIAL FUTURES CONTRACTS: A futures contract is an agreement between two
parties to buy and sell a financial instrument for a set price on a future date.
Initial margin deposits are made upon entering into futures contracts and can be
either cash or securities. During the period the futures contract is open,
changes in the value of the contract are recognized as unrealized gains or
losses by "marking-to-market" on a daily basis to reflect the market value of
the contract at the end of each day's trading. Variation margin payments are
made or received, depending upon whether unrealized gains or losses are
incurred. When the contract is closed, the Trust records a realized gain or loss
equal to the difference between proceeds from (or cost of) the closing
transaction and the Trust's basis in the contract.
The Trust may invest in financial futures contracts primarily for the purpose
of hedging its existing portfolio securities or securities the Trust intends to
purchase against fluctuations in value caused by changes in prevailing market
interest rates. Should interest rates move unexpectedly, the Trust may not
achieve the anticipated benefits of the financial futures contracts and may
realize a loss. The use of futures transactions involves the risk of imperfect
correlation in movements in the price of futures contracts, interest rates and
the underlying hedged assets.
SHORT SALES: The Trust may make short sales of securities as a method of hedging
potential price declines in similar securities owned. When the Trust makes a
short sale, it may borrow the securities sold short and deliver it to the
broker-dealer through which it made the short sale as collateral for its
obligation to deliver the security upon conclusion of the sale. The Trust may
have to pay a fee to borrow the particular securities and may be obligated to
pay over any payments received on such borrowed securities. A gain, limited to
the price at which the Trust sold the security short, or a loss, unlimited as to
dollar amount, will be recognized upon the termination of a short sale if the
market price is greater or less than the proceeds originally received.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on the trade date. Realized and unrealized gains and losses are
calculated on the identified cost basis. Interest income is recorded on the
accrual basis and the Trust amortizes premium or accretes discount on securities
purchased using the interest method.
FEDERAL INCOME TAXES: It is the Trust's intention to continue to meet the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute sufficient net income to shareholders. Therefore, no
Federal 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
capital gains, if any, in excess of loss
12
<PAGE>
carryforwards may be distributed annually. Dividends and distributions are
recorded on the ex-dividend date. Dividends and distributions to preferred
shareholders are accrued and determined as described in Note 4.
DEFERRED ORGANIZATION EXPENSES: A total of $60,000 was incurred in connection
with the organization of the Trust. These costs have been deferred and are being
amortized ratably over a period of sixty months from the date the Trust
commenced investment operations.
RECLASSIFICATION OF CAPITAL ACCOUNTS: Effective Jan-uary 1, 1994, the Trust
began accounting and reporting for perma-nent differences between financial and
tax reporting in accor-dance with the American Institute of Certified Public
Accountants' Statement of Position 93-2: Determination, Disclosure and Financial
Statement Presentation of Income, Capital Gain and Return of Capital
Distributions by Investment Companies. The cumulative effect of adopting the
statement for the year ended December 31, 1995 was to decrease distributions in
excess of accumulated net realized gain and increase undistributed net
investment income by $11,655. Net investment income, net realized gains and net
assets were not affected by this change.
Note 2. Agreements
The Trust has an Investment Advisory Agreement with BlackRock Financial
Management, Inc. (the "Adviser") and an Administration Agreement with Princeton
Administrators L.P. (the "Administrator"), an indirect wholly owned subsidiary
of Merrill Lynch & Co., Inc.
The investment advisory fee paid to the Adviser is computed weekly and
payable monthly at an annual rate of 0.35% of the Trust's average weekly net
investment assets. The administration fee paid to the Administrator is also
computed weekly and payable monthly at an annual rate of 0.10% of the Trust's
average weekly net investment assets.
Pursuant to the agreements, the Adviser provides continuous supervision of
the investment portfolio and pays the compensation of officers of the Trust who
are affiliated persons of the Adviser. The Administrator pays occupancy and
certain clerical and accounting costs of the Trust. The Trust bears all other
costs and expenses.
On February 28, 1995, the Adviser was acquired by PNC Bank, N.A. Following
acquisition, the Adviser has become a wholly-owned corporate subsidiary of PNC
Asset Management Group, Inc., the holding company for PNC's asset management
businesses.
Note 3. Portfolio Securities
Purchases and sales of investment securities, other than short-term investments,
for the year ended December 31, 1995, aggregated $161,372,414 and $163,165,506
respectively.
The Federal income tax basis of the Trust's investments at December 31, 1995
was $584,210,523, and accordingly, net and gross unrealized appreciation was
$51,896,208.
Note 4. Capital
There are 200 million shares of $.01 par value common stock authorized. Of the
27,207,093 common shares outstanding at December 31, 1995, the Adviser owned
7,093 shares. As of December 31, 1995, there were 8,240 preferred shares
outstanding as follows: Series T28-2,060, Series R28-2,060, Series T7-2,060 and
Series R7-2,060.
The Trust may classify or reclassify any unissued shares of common stock into
one or more series of preferred stock. On November 23, 1992, the Trust
reclassified 4,120 shares of common stock and issued 4 series of Auction Market
Preferred Stock ("Preferred Stock") as follows: Series T28--1,030 shares, Series
R28--1,030 shares, Series R7--1,030 shares and series T7--1,030 shares. The
Preferred Stock has a liquidation value of $25,000 per share plus any
accumulated but unpaid dividends.
Dividends on Series T7 and R7 are cumulative at a rate which is reset every 7
days based on the results of an auction. Dividends on Series T28 are cumulative
at a rate which is reset every 28 days based on the results of an auction.
Series R28 paid dividends monthly at a rate established at the initial offering
through May 17, 1994. Thereafter, rates on Series R28 reset every 28 days based
on results of an auction. Dividend rates ranged from 2.90% to 5.97% for the year
ended December 31, 1995.
The Trust may not declare dividends or make other distributions on shares of
common stock or purchase any such shares if, at the time of the declaration,
distribution or purchase, asset coverage with respect to the outstanding
Preferred Stock would be less than 200%.
The Preferred Stock is redeemable at the option of the Trust, in whole or in
part, on any dividend payment date at $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 shares, voting separately as a class would be required to
(a) adopt any plan of reorganization that would adversely affect the Preferred
Stock,
13
<PAGE>
and (b) take any action requiring a vote of security holders, including, among
other things, changes in the Trust's subclassification as a closed-end
investment company or changes in its fundamental investment restrictions.
On May 16, 1995 shareholders approved a proposal to split each share of the
Trust's Auction Rate Municipal Preferred Stock into two shares and
simultaneously reduce each share's liquidation preference from $50,000 to
$25,000. The split occurred on July 24, 1995.
Note 5. Dividends
Subsequent to December 31, 1995, the Board of Directors of the Trust declared a
dividend from undistributed earnings of $0.06625 per common share payable
January 31, 1996 to shareholders of record on January 16, 1996.
For the period January 1, 1996 to January 31, 1996 dividends declared on
Preferred Stock totalled $662,254 in aggregate for the four outstanding
Preferred Stock series.
Note 6. Quarterly Data
(unaudited)
<TABLE>
<CAPTION>
NET REALIZED AND
UNREALIZED GAINS
NET INVESTMENT INCOME (LOSSES) ON
INVESTMENTS
PER PER
TOTAL COMMON COMMON
QUARTERLY PERIOD INCOME AMOUNT SHARE AMOUNT SHARE
<S> <C> <C> <C> <C> <C>
January 1, 1994 to March
31, 1994.................. $ 8,832,081 $ 7,884,427 $ .29 $ (45,751,726) $ (1.68)
April 1, 1994 to June 30,
1994...................... 8,809,249 7,772,462 .29 (1,212,935) (.05)
July 1, 1994 to September
30, 1994.................. 8,829,898 7,734,106 .28 (4,375,948) (.16)
October 1, 1994 to
December 31, 1994......... 8,857,899 7,833,957 .29 (13,467,359) (.50)
January 1, 1995 to March
31, 1995.................. 9,022,548 8,038,887 .30 32,598,380 1.19
April 1, 1995 to June 30,
1995...................... 8,760,099 7,775,425 .28 4,307,377 .17
July 1, 1995 to September
30, 1995.................. 9,413,593 8,412,112 .31 9,668,972 .35
October 1, 1995 to
December 31, 1995......... 9,041,087 8,041,014 .30 13,652,800 .50
<CAPTION>
NET INCREASE (DECREASE) IN NET
INVESTMENT ASSETS RESULTING FROM DIVIDENDS AND DISTRIBUTIONS
COMMON SHARES PREFERRED
PER PER
OPERATIONS COMMON COMMON SHARES*
QUARTERLY PERIOD AMOUNT SHARE AMOUNT SHARE AMOUNT
<S> <C> <C> <C> <C>
January 1, 1994 to March
31, 1994.................. $ (37,867,299) $ (1.39 ) $ 6,019,560 $ .22 $ 1,335,347
April 1, 1994 to June 30,
1994...................... 6,559,527 .24 6,019,553 .22 1,491,464
July 1, 1994 to September
30, 1994.................. 3,358,158 .12 6,019,554 .22 1,532,047
October 1, 1994 to
December 31, 1994......... (5,633,402) (.21 ) 6,019,556 .22 1,844,550
January 1, 1995 to March
31, 1995.................. 40,637,267 1.49 6,019,538 .22 2,009,567
April 1, 1995 to June 30,
1995...................... 12,082,802 .45 5,815,476 .21 2,033,766
July 1, 1995 to September
30, 1995.................. 18,081,084 .66 5,407,386 .20 1,924,542
October 1, 1995 to
December 31, 1995......... 21,693,814 .80 7,264,348 .27 2,229,462
<CAPTION>
PER SHARE PRICE OF PERIOD
COMMON COMMON STOCK END NET
QUARTERLY PERIOD SHARE HIGH LOW ASSET VALUE
<S> <C> <C> <C> <C>
January 1, 1994 to March
31, 1994.................. $ .05 $ 15.375 $ 13.875 $ 14.57
April 1, 1994 to June 30,
1994...................... .05 14.875 13.625 14.53
July 1, 1994 to September
30, 1994.................. .06 14.625 13.375 14.38
October 1, 1994 to
December 31, 1994......... .07 13.625 11.500 13.88
January 1, 1995 to March
31, 1995.................. .07 14.125 12.250 15.08
April 1, 1995 to June 30,
1995...................... .08 14.500 13.375 15.24
July 1, 1995 to September
30, 1995.................. .07 13.125 14.125 15.63
October 1, 1995 to
December 31, 1995......... .08 13.375 14.250 16.08
</TABLE>
- --------------
* For the year ended December 31, 1995 the average annualized rate paid to
preferred shareholders was 3.98%.
14
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK INSURED MUNICIPAL 2008 TERM TRUST INC.
REPORT OF INDEPENDENT AUDITORS
- --------------------------------------------------------------------------------
The Shareholders and
Board of Directors of
The BlackRock Insured Municipal 2008 Term Trust Inc.:
We have audited the accompanying statement of assets and liabilities of The
BlackRock Insured Municipal 2008 Term Trust Inc., including the portfolio of
investments, as of December 31, 1995, and the related statement of operations
for the year then ended, the statement of changes in net investment assets for
each of the two years in the period then ended, and the financial highlights for
each of the three years in the period then ended and for the period September
28, 1992 (commencement of investment operations) to December 31, 1992. These
financial statements and financial highlights are the responsibility of the
Trust's management, our responsibility is to express an opinion of these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned at December
31, 1995, by correspondence with the custodian and brokers; where replies were
not received from brokers, we performed other auditing procedures. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of The BlackRock
Insured Municipal 2008 Term Trust Inc. as of December 31, 1995, the results of
its operations, the changes in its net investment assets and the financial
highlights for the respective stated periods, in conformity with generally
accepted accounting principles.
/s/ Deloitte & Touche LLP
Deloitte & Touche LLP
New York, New York
February 9, 1996
15
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK INSURED MUNICIPAL 2008 TERM TRUST INC.
TAX INFORMATION
- --------------------------------------------------------------------------------
We are required by the Internal Revenue Code to advise you within 60 days of
the Trust's fiscal year end as to the federally exempt interest dividends
received by you during such fiscal year. Accordingly, we are advising you that
all regular dividends paid by the Trust during the fiscal year were federally
tax-exempt interest dividends. Additionally, the following summarizes the
special taxable distributions declared by the Trust during the fiscal year:
<TABLE>
<CAPTION>
Taxable Short-term Long-term
Record Payable Ordinary Capital gains Capital gains
Date Date Income per share per share
-------- -------- ---------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Common Stock Shareholders.......... 12/29/95 1/31/96 $ 0.002605 $ 0.046501 $ 0.019148
Preferred Stock Series R-7*........ 11/22/95 11/23/95 2.890000 51.670000 12.370000
Preferred Stock Series R-7......... 12/20/95 12/21/95 -- -- 8.910000
Preferred Stock Series R-28........ 12/13/95 12/14/95 2.950000 52.660000 12.600000
Preferred Stock Series T-7*........ 11/27/95 11/29/95 3.080000 54.970000 13.160000
Preferred Stock Series T-7......... 12/26/95 12/27/95 -- -- 9.480000
Preferred Stock Series T-28........ 12/26/95 12/27/95 3.020000 53.860000 12.890000
</TABLE>
- ------------
* Taxable distribution continued in subsequent actions.
- --------------------------------------------------------------------------------
ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
There have been no material changes in the Trust's investment objectives or
policies that have not been approved by the shareholders. There have been no
changes in the Trust's charter or by-laws. There have been no changes in the
principal risk factors associated with investment in the Trust. There have been
no changes in the persons who are primarily responsible for the day-to-day
management of the Trust's portfolio.
- --------------------------------------------------------------------------------
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. Shareholders who do not participate in the Plan will receive all
distributions in cash paid by check in United States dollars mailed directly to
the shareholders of record (or if the shares are held in street or other nominee
name, then to the nominee) by the custodian, as dividend disbursing agent.
The Plan Agent serves as agent for the shareholders in administering the
Plan. After the Trust declares a dividend or determines to make a capital gain
distribution, the Plan Agent will, as agent for the participants, receive the
cash payment and use it to buy Trust shares in the open market on the New York
Stock Exchange for the participants' accounts. The Trust will not issue shares
under the Plan.
Participants in the Plan may withdraw from the Plan upon written notice to
the Plan Agent and will receive certificates for whole Trust shares and a cash
payment will be made for any fraction of a Trust share.
The Plan Agent's fees for the handling of the reinvestment of dividends and
distributions will be paid by the Trust. However, each participant will pay a
pro rata share of brokerage commissions incurred with respect to the Plan
Agent's open market purchases in connection with the reinvestment of dividends
and distributions. The automatic reinvestment of dividends and distributions
will not relieve participants of any federal income tax 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.
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THE BLACKROCK INSURED MUNICIPAL 2008 TERM TRUST
INVESTMENT SUMMARY
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THE TRUST'S INVESTMENT OBJECTIVE
The Trust's investment objective is to provide current income exempt from
regular Federal income tax and to return $15 per share (the initial public
offering price per share) to investors on or about December 31, 2008.
WHO MANAGES THE TRUST?
BlackRock Financial Management, Inc. (BlackRock or the Adviser) is the
investment adviser for the Trust. BlackRock is a registered investment adviser
specializing in fixed income securities. Currently, BlackRock manages
approximately $34 billion of assets across the government, mortgage, corporate
and municipal sectors. These assets are managed on behalf of institutional and
individual investors in 21 closed-end funds traded on the New York or American
Stock Exchanges, several open-end funds and separate accounts for more than 80
clients in the U.S. and overseas. BlackRock is a subsidiary of PNC Asset
Management Group, Inc. which is a division of PNC Bank, N.A., the nation's
eleventh largest banking organization.
WHAT CAN THE TRUST INVEST IN?
The Trust intends to invest at least 80% of its total assets in a diversified
portfolio of 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 Trust's Adviser to be of comparable credit quality
(guaranteed, escrowed or backed in trust).
WHAT IS THE ADVISER'S INVESTMENT STRATEGY?
The Adviser will seek to meet the Trust's investment objective by managing
the assets of the Trust so as to return the initial offering price ($15 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 2008. 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, if any, will
be sufficient to return the initial offering price to investors. On a continuous
basis, the Trust will seek its objective by actively managing its portfolio of
municipal obligations which will have an average final maturity on or about
December 31, 2008 and by annually retaining a small portion of its income.
In addition to seeking the return of the initial offering price, the Adviser
also seeks to provide current income exempt from regular Federal income tax to
investors. The portfolio managers will attempt to achieve this objective by
investing in securities that provide competitive income. In addition, leverage
will be used (in an amount up to 35% of the portfolio assets) to enhance the
income of the portfolio. In order to maintain competitive yields as the Trust
approaches maturity and depending on market conditions, the Adviser will attempt
to purchase securities with call protection or maturities as close to the
Trust's maturity date as possible. Securities with call protection should
provide the portfolio with some degree of protection against reinvestment risk
during times of lower prevailing interest rates. Since the Trust's primary goal
is to return the initial offering price at maturity, any cash that the Trust
receives prior to its maturity date will be reinvested in securities with
maturities which coincide with the remaining term of the Trust. 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.
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HOW ARE THE TRUST'S SHARES PURCHASED AND SOLD? DOES THE TRUST PAY DIVIDENDS
REGULARLY?
The Trust's shares are traded on the New York Stock Exchange which provides
investors with liquidity on a daily basis. Orders to buy or sell shares of the
Trust must be placed through a registered broker or financial advisor. The Trust
pays monthly dividends which are typically paid on the last business day of the
month. For shares held in the shareholder's name, dividends may be reinvested in
additional shares of the fund through the Trust's transfer agent, Boston
Financial Data Services. Investors who wish to hold shares in a brokerage
account should check with their financial advisor to determine whether their
brokerage firm offers dividend reinvestment services.
LEVERAGE CONSIDERATIONS IN A TERM TRUST
Under current market conditions, leverage increases the income earned by the
Trust. The Trust employs leverage primarily through the issuance of preferred
stock. Leverage permits the Trust to borrow money at short-term rates and
reinvest that money in longer-term assets which typically offer higher interest
rates. The difference between the cost of the borrowed funds and the income
earned on the proceeds that are invested in longer term assets is the benefit to
the Trust from leverage. In general, the portfolio is typically leveraged at
approximately 35% of total assets.
Leverage also increases the duration (or price volatility of the net assets)
of the Trust, which can improve the performance of the fund in a declining rate
environment, but can cause net assets to decline faster than the market in a
rapidly rising rate environment. BlackRock's portfolio managers continuously
monitor and regularly review the Trust's use of leverage and the Trust may
reduce, or unwind, the amount of leverage employed should BlackRock consider
that reduction to be in the best interests of the shareholders.
SPECIAL CONSIDERATIONS AND RISK FACTORS RELEVANT TO TERM TRUSTS
The Trust is intended to be a long-term investment and is not a short-term
trading vehicle.
RETURN OF INITIAL INVESTMENT. Although the objective of the Trust is to
return its initial offering price upon termination, there can be no assurance
that this objective will be achieved.
DIVIDEND CONSIDERATIONS. The income and dividends paid by the Trust are
likely to decline to some extent over the term of the Trust due to the
anticipated shortening of the dollar-weighted average maturity of the Trust's
assets.
LEVERAGE. The Trust utilizes leverage through the issuance of preferred
stock, which involves special risks. The Trust's net asset value and market
value may be more volatile due to its use of leverage.
MARKET PRICE OF SHARES. The shares of closed-end investment companies such as
the Trust trade on the New York Stock Exchange (NYSE symbol: BRM) and as such
are subject to supply and demand influences. As a result, shares may trade at a
discount or a premium to their net asset value.
ILLIQUID SECURITIES. The Trust may invest in securities that are illiquid,
although under current market conditions the Trust expects only to do so to a
limited extent. An investment in these securities involves special risks.
ANTITAKEOVER PROVISIONS. Certain antitakeover provisions will make a change
in the Trust's business or management more difficult without the approval of the
Trust's Board of Directors and may have the effect of depriving shareholders of
an opportunity to sell their shares at a premium above the prevailing market
price.
MUNICIPAL OBLIGATIONS. Municipal obligations include debt obligations issued
by states, cities, and local authorities, and possessions and certain
territories of the United States to obtain funds for various public purposes,
including the construction of public facilities, the refinancing of outstanding
obligations and the obtaining of funds for general operating expenses and for
loans to other public institutions and facilities. The value of municipal debt
securities generally varies inversely with changes in prevailing market interest
rates. Depending on the amount of call protection that the securities in the
Trust have, the Trust may be subject to certain reinvestment risks in
environments of declining interest rates.
ALTERNATIVE MINIMUM TAX (AMT). The Trust may invest in securities subject to
AMT. The Trust currently holds no securities that are subject to AMT.
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THE BLACKROCK INSURED MUNICIPAL 2008 TERM TRUST INC.
GLOSSARY
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<TABLE>
<S> <C>
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 to common
shareholders on a monthly basis.
DIVIDEND REINVESTMENT: Shareholders may have all dividends and distributions of capital gains automatically
reinvested into additional shares of a fund.
EMBEDDED CAP BONDS: Also known as additional interest municipal bonds. These securities are intended to
protect the income that a fund earns through leverage from significant increases in
short-term rates. The coupon on these bonds will increase if short term rates rise
significantly.
MARKET PRICE: Price per share of a security trading in the secondary market. For a closed-end
fund, this is the price at which one share of the fund trades on the stock exchange.
If you were to buy or sell shares, you would pay or receive the market price.
NET ASSET VALUE (NAV): Net asset value is the total market value of all securities and other assets held by
the Trust, plus income accrued on its 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 and The New York Times on Saturday or
The Wall Street Journal each Monday.
PREMIUM: When a fund's stock price is greater than its net asset value, the fund is said to
be trading at a premium.
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 retire
the bond in full at the date indicated, typically at a premium to par.
</TABLE>
IF YOU WOULD LIKE FURTHER INFORMATION
PLEASE CALL BLACKROCK AT (800) 227-7BFM
OR CONSULT WITH YOUR FINANCIAL ADVISOR.
19
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["BlackRock" logo]
DIRECTORS
Laurence D. Fink, Chairman
Andrew F. Brimmer
Richard E. Cavanagh
Kent Dixon
Frank J. Fabozzi
James Grosfeld
James Clayburn La Force, Jr.
Ralph L. Schlosstein
THE [LOGO]
OFFICERS
Ralph L. Schlosstein, President
Keith T. Anderson, Vice President INSURED MUNICIPAL
Michael C. Huebsch, Vice President
Robert S. Kapito, Vice President 2008 TERM TRUST INC.
Kevin Klingert, Vice President
Richard M. Shea, Vice President/Tax ------------------------
Henry Gabbay, Treasurer
James Kong, Assistant Treasurer ANNUAL REPORT
Karen H. Sabath, Secretary
DECEMBER 31, 1995
INVESTMENT ADVISER
BlackRock Financial Management, Inc.
345 Park Avenue
New York, NY 10154
(800) 227-7BFM
ADMINISTRATOR
Princeton Administrators L.P.
800 Scudders Mill Road
Plainsboro, NJ 08536
(800) 688-0928
CUSTODIAN AND TRANSFER AGENT
State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171
(800) 699-1BFM
AUCTION AGENT
Bankers Trust Company
4 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
919 Third Avenue
New York, NY 10022
This report is for shareholder information.
This is not a prospectus intended for use in the
purchase or sale of any securities.
[PICTURE]
THE BLACKROCK INSURED
MUNICIPAL 2008 TERM TRUST INC.
c/o Princeton Administrators L.P.
800 Scudders Mill Road
Plainsboro, NJ 08536
(800) 227-7BFM
09247K 10 9
09247K 30 7
09247K 20 8
09247K 40 6
09247K 50 5
