<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK INSURED MUNICIPAL 2008 TERM TRUST INC.
SEMI-ANNUAL REPORT TO SHAREHOLDERS
REPORT OF INVESTMENT ADVISER
- --------------------------------------------------------------------------------
July 31, 1997
Dear Trust Shareholder,
After experiencing higher interest rates in the face of a resilient stock
market and stronger economic growth for the first few months of 1997, bond
investors were comforted by more moderate economic data released during the
second quarter which allowed the bond market to recapture some of its losses.
Our outlook for the bond market is cautiously optimistic. Over the short
term, we believe that the recent rally may continue, since inflation news has
been positive and U.S. securities appear cheap relative to their global
counterparts. Additionally, Fed Chairman Greenspan appears to be comfortable
allowing the economy to expand in the absence of rising inflationary pressures.
Thus, we do not foresee another tightening in the immediate future in the
absence of a visible inflation shock. However, recent wage increases, the
buoyant stock market and record levels of consumer confidence could lead to
stronger consumer spending and overall economic growth in the third quarter.
Therefore, an uninterrupted decline in yields is by no means a certainty.
This report provides the Trust's portfolio managers an opportunity to
provide you with detailed market commentary and to review the major investment
themes of the portfolio over the past six months. We hope that you find this
report informative and look forward to serving your financial needs in the
future.
Sincerely,
/s/ Laurence D. Fink /s/ Ralph L. Schlosstein
Laurence D. Fink Ralph L. Schlosstein
Chairman President
1
<PAGE>
July 31, 1997
Dear Shareholder:
We are pleased to present the semi-annual report for The BlackRock Insured
Municipal 2008 Term Trust Inc. ("the Trust") for the six months ended June 30,
1997. We would like to take this opportunity to review the Trust's stock price
and net asset value (NAV) performance, summarize developments in the fixed
income markets and discuss recent portfolio management activity.
The Trust is a diversified, actively managed closed-end bond fund whose
shares are traded on the New York Stock Exchange under the symbol "BRM". The
Trust's 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 high current income exempt from regular federal income tax. The Trust
seeks to achieve this objective by investing in high credit quality ("AAA" or
insured to "AAA") tax-exempt general obligation and revenue bonds issued by
city, county and state municipalities throughout the United States.
The table below summarizes the changes in the Trust's stock price and net
asset value over the period:
<TABLE>
<CAPTION>
6/30/97 12/31/96 CHANGE HIGH LOW
<S> <C> <C> <C> <C> <C>
STOCK PRICE $14.8125 $14.50 2.16% $14.8125 $14.00
NET ASSET VALUE (NAV) $16.09 $15.90 1.19% $ 16.21 $15.52
</TABLE>
THE FIXED INCOME MARKETS
The strong economic growth witnessed during the fourth quarter of 1996
spilled over into the first quarter of 1997. Although inflationary measures such
as commodity, producer and consumer prices remained relatively stable, labor
markets continued to strengthen. In an effort to subdue this growth, the Federal
Reserve raised the Federal funds rate by 25 basis points at their March 25, 1997
policy meeting as a pre-emptive strike against inflation.
After expanding at a blistering pace of 5.9% during the first quarter, the
U.S. economy's growth rate slowed in the second quarter of 1997. Signs of an
economic slowdown were prevalent in a broad range of industrial and consumer
indicators, including lower factory orders, decreased consumer spending, and
higher inventories. In addition, inflationary forces remained benign according
to year-over-year comparisons for the consumer and producer indices. These
indicators allowed the Federal Reserve to maintain interest rate levels at their
May 20, 1997 and July 2, 1997 policy meetings and wait for more definite signs
of inflation before increasing interest rates.
Short-to-intermediate maturity municipals underperformed Treasury
equivalents during the first quarter, despite the historically favorable
interest rate environment. Issuance of municipal debt declined almost 10% during
the first quarter 1997 from first quarter 1996 due to the higher interest rate
environment. Municipal bonds performed reasonably well during the second
quarter, despite a strong rally in the Treasury market. With nearly $60 billion
worth of municipal issues maturing in June and July, strong investor demand came
from both individuals and institutions seeking to reinvest their principal back
into the market. New municipal deals were heavily oversubscribed during the
second quarter, with a manageable supply of new issues coming to the market. For
the six month period ended June 30, 1997, municipal bonds as measured by the
LEHMAN BROTHERS MUNICIPAL INDEX slightly outperformed their taxable counterparts
(LEHMAN BROTHERS AGGREGATE INDEX) with a total return of 3.20% vs. 3.11%.
Looking forward, a number of distractions may impede further yield spread
tightening in the municipal market, including potential tax reforms and the
strong rallies in the Treasury and stock markets. BlackRock believes that
municipals are currently trading at historically rich ratios versus Treasuries.
We remain focused on shorter maturity
2
<PAGE>
securities until the market provides further guidance on the direction of
interest rates, or the supply/demand characteristics of the market are altered.
THE TRUST'S PORTFOLIO AND INVESTMENT STRATEGY
The Trust's portfolio is actively managed to diversify exposure to various
sectors, issuers, revenue sources and security types. BlackRock's investment
strategy emphasizes a relative value approach, which allows the Trust to
capitalize upon changing market conditions by rotating municipal sectors,
credits and coupons. Over the past six months, there has been relatively little
trading activity in the Trust, due to price appreciation of a majority of
securities in the portfolio above the prices at which they were bought. A bond
sold at a gain would result in the Trust realizing a capital gain, which may
require a taxable distribution to shareholders. Since one of the Trust's primary
investment objectives is to pay out tax-exempt income, we believe that waiting
to restructure the portfolio in a higher interest rate environment is the most
prudent strategy at this time.
The following chart compares the Trust's current and December 31, 1996 asset
composition:
THE BLACKROCK INSURED MUNICIPAL 2008 TERM TRUST INC.
<TABLE>
<CAPTION>
SECTOR JUNE 30,1997 DECEMBER 31, 1996
<S> <C> <C>
County, City & State 36% 33%
Utility/Power 20% 21%
Hospital 15% 16%
Transportation 6% 6%
Water & Sewer 6% 6%
Lease Revenue 3% 4%
Housing 3% 3%
Education 2% 2%
Building 1% 1%
Tax Revenue 1% 1%
Other 7% 7%
</TABLE>
Additionally, the Trust employs leverage to enhance its income by paying the
Trust's preferred shareholders short term municipal rates and investing the
proceeds in longer maturity issues which have higher yields. The Trust's ability
to pay high monthly income may be affected by the profitability of its leverage.
The Federal Reserve's 25 basis point (0.25%) increase in the Fed funds target
rate on March 25, 1997 resulted in a modest increase in the Trust's borrowing
costs; however, we do not believe that one increase in short term interest rates
will negatively impact the Trust's long-term income earning ability.
3
<PAGE>
We look forward to managing the Trust to benefit from the opportunities
available in the fixed income markets and to meet its investment objectives. We
thank you for your investment in the BlackRock Insured Municipal 2008 Term Trust
Inc. Please feel free to contact our marketing center at (800) 227-7BFM (7236)
if you have specific questions which were not addressed in this report.
Sincerely,
/s/ Robert S. Kapito /s/ Kevin Klingert
Robert S. Kapito Kevin Klingert
Vice Chairman and Portfolio Manager Managing Director and Portfolio
BlackRock Financial Management, Inc. Manager
BlackRock Financial Management, Inc.
<TABLE>
<S> <C>
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 6/30/97: $14.8125
Net Asset Value as of 6/30/97: $16.09
Yield on Closing Stock Price as of 6/30/97 ($14.8125)(1): 5.37%
Current Monthly Distribution per Common Share(2): $0.06625
Current Annualized Distribution per Common Share(2): $0.7950
</TABLE>
- ------------------
(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>
- --------------------------------------------------------------------------------
THE BLACKROCK INSURED
MUNICIPAL 2008 TERM TRUST INC.
PORTFOLIO OF INVESTMENTS
JUNE 30, 1997
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL OPTION
AMOUNT CALL VALUE
RATING* (000) DESCRIPTION PROVISIONS+++ (NOTE 1)
----------------------------------------------------------------------------------------------------------------------
<C> <C> <S> <C> <C>
LONG-TERM INVESTMENTS -- 145.3%
ALABAMA -- 0.2%
AAA $ 1,905 Mobile Impvt. Wt., Zero Coupon, 8/15/08, MBIA............... 08/02 at 71.587 $ 1,043,178
-------------
ARIZONA -- 0.5%
AAA 4,000 Chandler, G.O., Zero Coupon, 7/01/08, FGIC.................. No Opt. Call 2,274,640
-------------
CALIFORNIA -- 0.5%
AAA 1,890 California Hlth. Facs. Fin. Auth. Rev., Marin Gen. Hosp.,
Ser. A, 5.75%, 8/01/09, FSA............................... 08/03 at 102 1,957,908
-------------
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 32,387,915
AAA 13,285 Univ. of Colorado, Hosp. Auth. Rev., Ser. A, 6.25%,
11/15/08, AMBAC........................................... 11/02 at 102 14,244,443
-------------
46,632,358
-------------
DISTRICT OF COLUMBIA -- 5.6%
Dist. of Columbia, G.O., MBIA,
AAA 3,070 Ser. E, 5.875%, 6/01/08................................... 06/03 at 102 3,174,840
AAA 17,950 Ser. B, 6.30%, 6/01/09.................................... 06/02 at 102 19,075,644
AAA 2,000 Dist. of Columbia, Hosp. Rev., Children's Hosp., Ser. A,
6.25%, 7/15/08, FGIC...................................... 07/02 at 102 2,129,460
-------------
24,379,944
-------------
GEORGIA -- 1.7%
Atlanta, C.O.P., Pretrial Det. Ctr., MBIA,
AAA 3,000 6.25%, 12/01/08........................................... 12/02 at 102 3,219,360
AAA 4,000 6.25%, 12/01/11........................................... 12/02 at 102 4,250,320
-------------
7,469,680
-------------
HAWAII -- 1.9%
AAA 7,760 Honolulu Hawaii City & Cnty., Ser. A, 5.80%, 1/01/07,
FGIC...................................................... No Opt. Call 8,299,786
-------------
ILLINOIS -- 13.5%
AAA 14,205 Chicago O' Hare Intl. Arprt. Rev., Ser. A, 6.25%, 1/01/08,
MBIA...................................................... 01/05 at 102 15,361,145
Chicago, Sch. Fin. Auth., G.O., Ser. A, FGIC,
AAA 13,000 6.25%, 6/01/07............................................ 06/02 at 102 13,987,220
AAA 9,150 6.25%, 6/01/09............................................ 06/02 at 102 9,761,860
Illinois Hlth. Facs. Auth. Rev.,
AAA 11,000 Alexian Med. Ctr. Proj., Ser. A, 4.10%++, 1/01/08, MBIA... 01/02 at 102 11,563,200
AAA 2,500 Carle Foundation, Ser A, 6.75%, 1/01/10, FGIC............. 01/00 at 102 2,658,950
AAA 10,170 Met. Pier & Expo. Auth., Ded. St. Tax Rev.,
Ser. A, Zero Coupon, 6/15/08, FGIC........................ No Opt. Call 5,753,271
-------------
59,085,646
-------------
</TABLE>
See Notes to Financial Statements.
5
<PAGE>
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
PRINCIPAL OPTION
AMOUNT CALL VALUE
RATING* (000) DESCRIPTION PROVISIONS+++ (NOTE 1)
----------------------------------------------------------------------------------------------------------------------
<C> <C> <S> <C> <C>
INDIANA -- 2.4%
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 $ 6,019,686
AAA 4,350 Ser. B, 6.25%, 7/01/08.................................... 07/02 at 102 4,622,353
-------------
10,642,039
-------------
IOWA -- 1.4%
AAA 2,150 Iowa Fin. Auth., Sngl. Fam. Mtge. Rev., Ser. F, 6.35%,
7/01/09, AMBAC............................................ 01/03 at 102 2,170,581
AAA 4,195 Muscatine, Elec. Rev., 5.00%, 1/01/08, FSA.................. 01/98 at 100 4,149,233
-------------
6,319,814
-------------
KENTUCKY -- 0.5%
AAA 3,890 Owensboro, Elec. Lt. & Pwr. Rev., Ser. B, Zero Coupon,
1/01/09, AMBAC............................................ No Opt. Call 2,134,443
-------------
LOUISIANA -- 1.2%
AAA 5,000 Louisiana Pub. Facs. Auth. Hosp. Rev., Lafayette Gen. Med.
Ctr. Proj., 6.30%, 10/01/08, FSA.......................... 10/02 at 102 5,355,050
-------------
MASSACHUSETTS -- 4.9%
AAA 4,465 Chelsea, Sch. Proj. Loan, 6.00%, 6/15/09, AMBAC............. 06/04 at 102 4,758,350
AAA 6,000 Massachusetts Bay Trans. Auth. Rev., Ser. B, 6.00%, 3/01/10,
MBIA...................................................... 03/03 at 102 6,342,600
AAA 10,000 Massachusetts St. Hsg. Fin. Agcy., Hsg. Proj., Ser. A,
5.95%, 10/01/08, AMBAC.................................... 04/03 at 102 10,466,600
-------------
21,567,550
-------------
MICHIGAN -- 5.2%
Lake Orion, Cmnty. Sch. Dist., AMBAC,
AAA 3,290 6.60%, 5/01/05+........................................... No Opt. Call 3,715,726
AAA 3,285 6.70%, 5/01/05+........................................... No Opt. Call 3,731,366
AAA 8,920 Michigan St. Bldg. Auth. Rev., Facs. Proj.,
Ser. IIA, 6.25%, 10/01/08, AMBAC.......................... 10/02 at 102 9,554,480
AAA 1,760 Western Michigan Univ. Rev., 6.20%, 11/15/08, FGIC.......... 11/02 at 102 1,887,318
AAA 3,400 Wyandotte, Elec. Rev., 6.25%, 10/01/08, MBIA................ No Opt. Call 3,760,672
-------------
22,649,562
-------------
MISSOURI -- 1.6%
AAA 6,600 Kansas City, Sch. Dist. Bldg. Corp. Leasehold Rev., Cap.
Impvts. Proj., Ser. A, 6.50%, 2/01/08, FGIC............... 02/01 at 102 7,053,354
-------------
NEVADA -- 4.0%
AAA 6,490 Clark Cnty., Fld. Ctrl., 6.30%, 11/01/05, AMBAC............. 11/01 at 101 6,957,864
Washoe Cnty., Arpt. Auth., Ser. B, MBIA,
AAA 3,135 5.70%, 7/01/07............................................ 07/03 at 102 3,274,225
AAA 2,645 5.75%, 7/01/08............................................ 07/03 at 102 2,753,392
AAA 4,135 Washoe Cnty., Sch. Dist., G.O., Ser. A, 6.20%, 4/01/09,
AMBAC..................................................... 10/02 at 101 4,409,440
-------------
17,394,921
-------------
NEW JERSEY -- 13.3%
AAA 30,275 New Jersey Econ. Dev. Auth., Mkt. Trans. Fac. Rev.,
Ser. A, 5.80%, 7/01/08, MBIA.............................. 07/04 at 102 31,839,915
AAA 24,495 New Jersey St. G.O., Ser. D, 6.00%, 2/15/09, MBIA........... 02/03 at 102 26,078,357
-------------
57,918,272
-------------
</TABLE>
See Notes to Financial Statements.
6
<PAGE>
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
PRINCIPAL OPTION
AMOUNT CALL VALUE
RATING* (000) DESCRIPTION PROVISIONS+++ (NOTE 1)
----------------------------------------------------------------------------------------------------------------------
<C> <C> <S> <C> <C>
NEW YORK -- 8.4%
New York City G.O., Ser. E, MBIA,
AAA $ 5,000 6.125%, 8/01/06........................................... No Opt. Call $ 5,411,300
AAA 15,500 6.20%, 8/01/07............................................ No Opt. Call 16,912,515
AAA 5,000 Ser G, 5.75%, 2/01/08..................................... 02/06 at 101.50 5,248,300
New York St. Environ. Facs. Corp., Poll. Ctrl. Rev., Ser. D,
AAA 5,945 6.50%, 5/15/07............................................ 11/04 at 102 6,626,119
AAA 2,245 6.50%, 11/15/07........................................... 11/04 at 102 2,502,210
-------------
36,700,444
-------------
NORTH CAROLINA -- 8.8%
AAA 1,000 Cumberland Cnty. C.O.P., Civic Ctr. Proj., Ser. A, 6.375%,
12/01/09, AMBAC........................................... 12/04 at 102 1,091,630
North Carolina Eastn. Mun. Pwr. Agcy. Rev., Ser. B,
AAA 13,500 6.125%, 1/01/09, FGIC..................................... No Opt. Call 14,675,445
AAA 5,000 7.00%, 1/01/08, CAPMAC.................................... No Opt. Call 5,736,450
AAA 14,675 7.25%, 1/01/07, CAPMAC.................................... No Opt. Call 17,067,905
-------------
38,571,430
-------------
NORTH DAKOTA -- 1.1%
AAA 4,450 Bismark Hosp. Rev., St. Alexius Med. Ctr., 6.90%, 5/01/06,
AMBAC..................................................... 05/03 at 100 4,850,322
-------------
OHIO -- 2.3%
AAA 2,410 Cleveland, G.O., 6.40%, 11/15/08, MBIA...................... 11/04 at 102 2,665,002
AAA 6,095 Hamilton City, Elec. Sys. Rev., Ser. A, 6.125%, 10/15/08,
FGIC...................................................... 10/02 at 102 6,513,300
AAA 1,000 Ohio St. Bldg. Auth., Facs. Rev., Juvenile Correctional
Proj., 6.50%, 10/01/09, AMBAC............................. 09/04 at 102 1,099,000
-------------
10,277,302
-------------
PENNSYLVANIA -- 13.6%
AAA 4,000 Allegheny Cnty. Hosp. Dev. Auth. Rev., Magee Women's Hosp.,
6.25%, 10/01/08, FGIC..................................... 10/02 at 102 4,276,840
Dauphin Cnty. Gen. Auth. Hosp. Rev., HAPSCO-Western
Pennsylvania Hosp. Proj., MBIA,
AAA 10,000 6.25%, Ser. A, 7/01/08.................................... 07/02 at 102 10,708,500
AAA 5,000 6.25%, 7/01/08............................................ 07/02 at 102 5,354,250
AAA 6,600 Erie Cnty. Hosp. Auth. Rev., St. Vincent Hlth. Ctr. Proj.,
Ser. A, 6.25%, 7/01/08, MBIA.............................. 07/02 at 102 7,079,754
AAA 3,500 Indiana Cnty. Indl. Dev. Auth., Poll. Ctrl. Rev., New York
St. Elec. & Gas Corp., Ser. A, 6.00%, 6/01/06, MBIA....... No Opt. Call 3,752,420
AAA 6,500 Pennsylvania Hsg. Fin. Agcy. Rev., Rental Hsg., Ser. C,
6.25%, 7/01/07, FNMA...................................... 07/02 at 102 6,794,320
AAA 7,450 Pennsylvania St., G.O., Ser. A, 6.50%, 11/01/01+, FGIC...... No Opt. Call 8,133,910
AAA 10,930 Pittsburgh, G.O., Ser. D, 6.00%, 9/01/08, AMBAC............. 09/02 at 102 11,628,099
AAA 1,665 Scranton-Lackawanna Hlth. & Welfare Auth. Rev., 6.90%,
1/01/00+, MBIA............................................ No Opt. Call 1,793,821
-------------
59,521,914
-------------
TEXAS -- 24.2%
Austin, Pub. Impvt., G.O., AMBAC,
AAA 4,000 6.10%, 9/01/07............................................ 09/02 at 100 4,239,280
AAA 4,000 6.10%, 9/01/08............................................ 09/02 at 100 4,220,560
AAA 5,000 6.10%, 9/01/09............................................ 09/02 at 100 5,252,400
</TABLE>
See Notes to Financial Statements.
7
<PAGE>
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
PRINCIPAL OPTION
AMOUNT CALL VALUE
RATING* (000) DESCRIPTION PROVISIONS+++ (NOTE 1)
----------------------------------------------------------------------------------------------------------------------
<C> <C> <S> <C> <C>
Austin, Util. Sys. Rev.,
AAA $11,515 Ser. A, Zero Coupon, 11/15/08, MBIA....................... No Opt. Call $ 6,410,170
AAA 5,000 Ser. A, Zero Coupon, 11/15/09, AMBAC...................... No Opt. Call 2,612,050
AAA 5,000 Ser. A, Zero Coupon, 11/15/09, MBIA....................... No Opt. Call 2,612,050
AAA 5,000 6.625%, 11/15/08, AMBAC................................... No Opt. Call 5,508,550
AAA 7,000 6.25%, 11/15/08, AMBAC.................................... 11/02 at 102 7,488,390
AAA 5,225 Baytown, G.O., 6.40%, 2/01/08, AMBAC........................ 02/02 at 100 5,580,248
AAA 9,930 Circle C Mun. Util. Dist. No. 3 Rev., 6.50%, 11/15/09,
FGIC...................................................... 11/01 at 100 10,534,638
Coppell Indpt. Sch. Dist., MBIA,
AAA 1,430 6.10%, 8/15/09............................................ No Opt. Call 1,553,481
AAA 2,495 6.10%, 8/15/09............................................ 08/02 at 100 2,620,000
AAA 4,390 Houston Indpt. Sch. Dist., Zero Coupon, 8/15/09, AMBAC...... No Opt. Call 2,331,924
AAA 16,135 Houston, Wtr. & Swr. Sys. Rev., Jr. Lien, Ser. C, 6.25%,
12/01/09, MBIA............................................ 12/02 at 102 17,259,125
AAA 6,000 San Antonio Elec. & Gas Rev., Ser. B, Zero Coupon, 2/01/10,
FGIC...................................................... No Opt. Call 3,047,160
Texas Mun. Pwr. Agcy. Rev., AMBAC,
AAA 15,000 Zero Coupon, 9/01/08...................................... No Opt. Call 8,402,250
AAA 16,175 Zero Coupon, 9/01/09...................................... No Opt. Call 8,501,095
AAA 5,900 Texas St. Pub. Fin. Auth. Bldg. Rev., Ser. B, 6.25%,
2/01/09, AMBAC............................................ No Opt. Call 6,512,715
AAA 2,275 Ysleta, Indpt. Sch. Dist. Rev., Zero Coupon, 8/15/08,
PSFG...................................................... No Opt. Call 1,287,036
-------------
105,973,122
-------------
UTAH -- 1.2%
AAA 3,500 Intermountain Pwr. Agcy. Rev. Ser. B, 6.00%, 7/01/07,
MBIA...................................................... No Opt. Call 3,782,590
AAA 1,550 Salt Lake Cnty. Mun. Bldg. Auth. Lease Rev., Ser. A, 6.05%,
10/01/08, MBIA............................................ 10/04 at 101 1,646,007
-------------
5,428,597
-------------
WASHINGTON -- 13.9%
AAA 12,850 King Cnty. Ser. D, 5.55%, 12/01/08, MBIA.................... 12/07 at 102 13,317,611
AAA 9,000 Seattle Hlth. Care Facs. Auth. Rev., Virginia Mason Oblig.
Group, 6.30%, 2/15/09, MBIA............................... 02/03 at 102 9,654,570
AAA 4,000 Snohomish Cnty, Sch. Dist., 6.10%, 12/01/08, MBIA........... 12/03 at 102 4,276,880
AAA 3,000 Washington St. Pub. Pwr. Supply Sys. Rev. 5.55%, 7/01/10,
FGIC...................................................... 07/03 at 102 2,973,990
Washington St. Pub. Pwr. Supply Sys. Rev.,
AAA 5,550 No. 3, Zero Coupon, 7/01/07, BIG.......................... No Opt. Call 3,325,282
AAA 2,000 No. 3, Zero Coupon, 7/01/08, BIG.......................... No Opt. Call 1,126,380
AAA 11,000 5.80%, 7/01/07, FSA....................................... No Opt. Call 11,609,730
AAA 13,635 No. 2, Ser. A, 6.25%, 7/01/09, MBIA....................... 07/02 at 102 14,482,552
-------------
60,766,995
-------------
WEST VIRGINIA -- 2.7%
AAA 11,600 West Virginia St. Parkways Econ. Dev. & Tourism Auth.,
3.60%++, 5/15/09, FGIC.................................... 05/03 at 102 11,607,772
-------------
Total Long-Term Investments (cost $588,866,274)............. 635,876,043
-------------
SHORT-TERM INVESTMENTS** -- 0.9%
CONNECTICUT -- 0.1%
A1+ 300 Connecticut St. Dev. Auth. Poll. Ctrl. Rev., Western Mass.
Elec. Co., Ser. A, FRWD, 3.50%, 7/01/97................... N/A 300,000
-------------
NEW JERSEY -- 0.0%
A-1 100 New Jersey Econ. Dev. Auth. Wtr. Facs. Rev., United Water
Incorporated Proj. B, FRDD 3.75%, 7/01/97, AMBAC.......... N/A 100,000
-------------
NEW YORK -- 0.0%
A-1 200 New York City Trust Cultural Res. Rev., FRWD, 4.20%,
7/02/97................................................... N/A 200,000
-------------
</TABLE>
See Notes to Financial Statements.
8
<PAGE>
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
PRINCIPAL OPTION
AMOUNT CALL VALUE
RATING* (000) DESCRIPTION PROVISIONS+++ (NOTE 1)
----------------------------------------------------------------------------------------------------------------------
<C> <C> <S> <C> <C>
WASHINGTON -- 0.2%
A1+ $ 200 Washington St. Hlth. Care Facs. Auth. Rev., FRDD 4.05%,
7/01/97................................................... N/A $ 700,000
-------------
WYOMING -- 0.6%
2,500 Uinta Cnty. Poll. Ctrl. Rev., Chevron Inc. Proj., FRDD
4.00%, 7/01/97............................................ N/A 2,500,000
-------------
TOTAL SHORT-TERM INVESTMENTS (Cost $3,800,000).............. 3,800,000
-------------
TOTAL INVESTMENTS -- 146.2% (Cost $592,666,274)............. 639,676,043
Other assets in excess of liabilities -- 0.9%............... 4,039,655
Liquidation value of preferred stock -- (47.1%)............. (206,000,000)
-------------
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS -- 100%........ $ 437,715,698
-------------
-------------
</TABLE>
- ---------------
* Rating: using the higher of Standard & 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 price of the earliest option
call or redemption. There may be other call provisions at varying prices at
later dates.
<TABLE>
<S> <C> <C>
KEY TO ABBREVIATIONS
AMBAC -- American Municipal Bond Assurance Corporation
BIG -- Bond Investors Guaranty Insurance Company
CAPMAC -- Capital Markets Assurance Company
C.O.P. -- Certificate of Participation
FNMA -- Federal National Mortgage Association
FGIC -- Financial Guaranty Insurance Company
FSA -- Financial Security Assurance
FRDD -- Floating Rate Daily Demand**
FRWD -- Floating Rate Weekly Demand**
G.O. -- General Obligation Bond
MBIA -- Municipal Bond Insurance Association
PSFG -- Permanent School Fund Guaranty
</TABLE>
See Notes to Financial Statements.
9
<PAGE>
- ---------------------------------------------------------
THE BLACKROCK INSURED
MUNICIPAL 2008 TERM TRUST INC.
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1997
(UNAUDITED)
- ----------------------------------------------
<TABLE>
<S> <C>
ASSETS
Investments, at value (cost $592,666,274) (Note 1)............... $639,676,043
Interest receivable.............................................. 10,110,521
Receivable for investments sold.................................. 50,000
Cash............................................................. 47,203
Deferred organization expenses and other assets.................. 61,572
------------
649,945,339
------------
LIABILITIES
Payable for investments purchased................................ 5,216,500
Dividends payable--common stock.................................. 295,213
Advisory fee payable (Note 2).................................... 190,029
Dividends payable--preferred stock............................... 183,122
Administration fee payable (Note 2).............................. 54,294
Other accrued expenses........................................... 290,483
------------
6,229,641
------------
NET INVESTMENT ASSETS............................................ $643,715,698
------------
------------
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.............................. 12,105,544
Accumulated net realized loss.................................... (120,472)
Net unrealized appreciation...................................... 47,009,769
------------
Net investment assets, June 30, 1997............................. $643,715,698
------------
------------
Net assets applicable to common shareholders..................... $437,715,698
------------
------------
Net asset value per common share:
($437,715,698 DIVIDED BY 27,207,093 shares of common stock
issued and outstanding)........................................ $ 16.09
------------
------------
</TABLE>
- ---------------------------------------------------------
THE BLACKROCK INSURED
MUNICIPAL 2008 TERM TRUST INC.
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1997
(UNAUDITED)
- ----------------------------------------------
<TABLE>
<S> <C>
NET INVESTMENT INCOME
Income
Interest and discount earned................................... $ 18,033,938
------------
Expenses
Investment advisory............................................ 1,108,401
Administration................................................. 316,686
Auction agent.................................................. 276,028
Custodian...................................................... 69,000
Reports to shareholders........................................ 44,000
Directors...................................................... 42,000
Audit.......................................................... 18,000
Transfer agent................................................. 13,000
Legal.......................................................... 9,000
Miscellaneous.................................................. 123,441
------------
Total expenses................................................. 2,019,556
------------
Net investment income............................................ 16,014,382
------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS (NOTE 3)
Net realized gain on investments................................. 172,902
Net change in unrealized appreciation on investments............. 3,291,021
------------
Net gain on investments.......................................... 3,463,923
------------
NET INCREASE IN NET INVESTMENT ASSETS RESULTING FROM
OPERATIONS....................................................... $ 19,478,305
------------
------------
</TABLE>
See Notes to Financial Statements.
10
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK INSURED
MUNICIPAL 2008 TERM TRUST INC.
STATEMENTS OF CHANGES IN NET INVESTMENT ASSETS
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
JUNE 30, DECEMBER 31,
1997 1996
------------ ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET INVESTMENT ASSETS
OPERATIONS:
Net investment income............................................................... $ 16,014,382 $ 31,818,443
Net realized gain on investments.................................................... 172,902 1,317,650
Net change in unrealized appreciation (depreciation) on investments................. 3,291,021 (8,498,403)
------------ ------------
Net increase in net investment assets resulting from operations................... 19,478,305 24,637,690
------------ ------------
DIVIDENDS AND DISTRIBUTIONS:
To common shareholders from net investment income................................... (10,814,668) (21,372,846)
To common shareholders from net realized gain on investments........................ -- (910,757)
To common shareholders in excess of net realized gain on investments................ -- (73,650)
To preferred shareholders from net investment income................................ (3,556,768) (6,835,483)
To preferred shareholders from net realized gain on investments..................... -- (282,838)
To preferred shareholders in excess of net realized gain on investments............. -- (22,866)
------------ ------------
Total dividends and distributions................................................. (14,371,436) (29,498,440)
------------ ------------
Total increase (decrease)....................................................... 5,106,869 (4,860,750)
NET INVESTMENT ASSETS
Beginning of period................................................................... 638,608,829 643,469,579
------------ ------------
End of period......................................................................... $643,715,698 $638,608,829
------------ ------------
------------ ------------
</TABLE>
See Notes to Financial Statements.
11
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK INSURED
MUNICIPAL 2008 TERM TRUST INC.
FINANCIAL HIGHLIGHTS
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SEPTEMBER 28,
1992*
SIX MONTHS YEAR ENDED DECEMBER 31, THROUGH
ENDED -------------------------------------- DECEMBER 31,
JUNE 30, 1997 1996 1995 1994 1993 1992
------------- -------- -------- -------- -------- -------------
<S> <C> <C> <C> <C> <C> <C>
PER COMMON SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period.............. $ 15.90 $ 16.08 $ 13.88 $ 16.23 $ 14.31 $ 14.10
------------- -------- -------- -------- -------- -------------
Net investment income........................... 0.59 1.17 1.19 1.15 1.14 0.17
Net realized and unrealized gain (loss) on
investments................................... 0.13 (0.27) 2.21 (2.39) 1.91 0.31
------------- -------- -------- -------- -------- -------------
Net increase (decrease) from investment
operations...................................... 0.72 0.90 3.40 (1.24) 3.05 0.48
------------- -------- -------- -------- -------- -------------
Dividends from net investment income to:
Preferred shareholders.......................... (0.13) (0.25) (0.28) (0.23) (0.20) (0.02)
Common shareholders............................. (0.40) (0.79) (0.83) (0.88) (0.88) (0.07)
Distributions from net realized gain on
investments to:
Preferred shareholders.......................... -- (0.01) (0.02) -- (0.01) --
Common shareholders............................. -- (0.03) (0.06) -- (0.04) --
Distributions in excess of net realized gain on
investments to:
Preferred shareholders.......................... -- *** *** -- -- --
Common shareholders............................. -- *** (0.01) -- -- --
------------- -------- -------- -------- -------- -------------
Total dividends and distributions................. (0.53) (1.08) (1.20) (1.11) (1.13) (0.09)
------------- -------- -------- -------- -------- -------------
Capital charge with respect to issuance of
shares.......................................... -- -- -- -- -- (0.18)
------------- -------- -------- -------- -------- -------------
Net asset value, end of period**.................. $ 16.09 $ 15.90 $ 16.08 $ 13.88 $ 16.23 $ 14.31#
------------- -------- -------- -------- -------- -------------
------------- -------- -------- -------- -------- -------------
Market value, end of period**..................... $14.8125 $ 14.50 $ 13.50 $ 12.25 $ 15.125 $ 13.75
------------- -------- -------- -------- -------- -------------
------------- -------- -------- -------- -------- -------------
TOTAL INVESTMENT RETURN+.......................... 4.99% 13.56% 17.64% (13.71)% 16.05% (1.99)%
------------- -------- -------- -------- -------- -------------
------------- -------- -------- -------- -------- -------------
RATIOS TO AVERAGE NET ASSETS OF COMMON
SHAREHOLDERS:+++
Expenses.......................................... 0.95%++ 0.95% 0.95% 1.02% 0.88% 0.73%++
Net investment income before preferred stock
dividends....................................... 7.50%++ 7.32% 7.74% 7.80% 7.43% 4.91%++
Preferred stock dividends......................... 1.66%++ 1.64% 1.97% 1.55% 1.35% 0.73%++
Net investment income available to common
shareholders.................................... 5.84%++ 5.68% 5.77% 6.25% 6.08% 4.18%++
SUPPLEMENTAL DATA:
Average net assets of common shareholders (in
thousands)...................................... $430,852 $434,692 $417,017 $400,555 $420,532 $372,256
Portfolio turnover................................ 11% 8% 27% 64% 15% 2%
Net assets of common shareholders, end of period
(in thousands).................................. $437,716 $432,609 $437,470 $377,679 $441,543 $389,333
Preferred stock outstanding (in thousands)........ $206,000 $206,000 $206,000 $206,000 $206,000 $206,000
Asset coverage per share of preferred stock, end
of period##..................................... $ 78,121 $ 77,501 $ 78,091 $141,670 $157,171 $144,500
</TABLE>
- --------------------
* Commencement of investment operations.
** Net asset value and market value are published in THE WALL STREET JOURNAL
each Monday.
*** Actual amount paid to preferred shareholders in 1995 was $0.002929 per
common share. Actual amounts paid in 1996 to preferred shareholders was
$0.00084 per common share and to common shareholders was $0.00271 per 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 fiqqrst 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 shares, and preferred stock dividends, relative to
the average net assets of common shareholders.
The information above represents the unaudited operating performance data for a
share of common stock outstanding, total investment return, ratios to average
net assets and other supplemental data for 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.
12
<PAGE>
- ---------------------------------------------------------
THE BLACKROCK INSURED
MUNICIPAL 2008 TERM TRUST INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
- ----------------------------------------------
NOTE 1. The BlackRock Insured Municipal 2008 Term Trust Inc. (the
ACCOUNTING "Trust") was organized in
POLICIES
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 60 days or less are valued at
amortized cost, if their term to maturity from date of purchase is 60 days or
less. Short-term securities with a term to maturity greater than 60 days from
the date of purchase are valued at current market quotations until maturity.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on the trade date. Realized gains and losses are calculated on the
identified cost basis. Interest income is recorded on the accrual basis and the
Trust amortizes premium and accretes original issue discount on securities
purchased using the interest method.
FEDERAL INCOME TAXES: It is the Trust's intention to continue to meet the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute sufficient net income to shareholders. For this
reason and because substantially all of the Trust's gross income consists of
tax-exempt interest, no federal 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 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.
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. The Trust has an Investment Advisory Agreement with BlackRock
AGREEMENTS Financial Manage-
ment, Inc. (the "Adviser") a wholly-owned corporate subsidiary of PNC Asset
Management Group, Inc., the holding company for PNC's asset management
businesses and an Administration Agreement with 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.
13
<PAGE>
NOTE 3. Purchases and sales of investment securities, other than
PORTFOLIO short-term investments, for the
SECURITIES
six months ended June 30, 1997, aggregated $70,351,573 and $72,836,750
respectively.
The federal income tax basis of the Trust's investments at June 30, 1997,
was $592,972,057, and accordingly, net unrealized appreciation was
$46,703,986--(on both a gross and net basis).
NOTE 4. CAPITAL There are 200 million shares of $.01 par value common stock
authorized. Of the 27,207,093
common shares outstanding at June 30, 1997, the Adviser owned 7,093 shares. As
of June 30, 1997, 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. 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.
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 2.30% to 4.04%
for the six months ended June 30,1997.
The Trust may not declare dividends or make other distributions on shares of
common stock or purchase any such shares if, at the time of the declaration,
distribution or purchase, asset coverage with respect to the outstanding
Preferred Stock would be less than 200%.
The Preferred Stock is redeemable at the option of the Trust, in whole or in
part, on any dividend payment date at $25,000 per share plus any accumulated or
unpaid dividends whether or not declared. The Preferred Stock is also subject to
mandatory redemption at $25,000 per share plus any accumulated or unpaid
dividends, whether or not declared if certain requirements relating to the
composition of the assets and liabilities of the Trust as set forth in the
Articles of Incorporation are not satisfied.
The holders of Preferred Stock have voting rights equal to the holders of
common stock (one vote per share) and will vote together with holders of shares
of common stock as a single class. However, holders of Preferred Stock are also
entitled to elect two of the Trust's directors. In addition, the Investment
Company Act of 1940 requires that along with approval by 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, and (b) take any action requiring a vote of security holders, including,
among other things, changes in the Trust's subclassification as a closed-end
investment company or changes in its fundamental investment restrictions.
NOTE 5. Subsequent to June 30, 1997, the Board of Directors of the
DIVIDENDS Trust declared a dividend
from undistributed earnings of $0.06625 per common share payable July 31, 1997
to shareholders of record on July 15, 1997.
For the period July 1, 1997 to July 31, 1997 dividends declared on Preferred
Stock totalled $672,375 in aggregate for the four outstanding Preferred Stock
series.
14
<PAGE>
- --------------------------------------------------------------------------------
DIVIDEND REINVESTMENT PLAN
- --------------------------------------------------------------------------------
Pursuant to the Trust's Dividend Reinvestment Plan (the "Plan"),
shareholders may elect to have all distributions of dividends and capital gains
automatically reinvested by State Street Bank and Trust Company (the "Plan
Agent") in Trust shares. 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.
- --------------------------------------------------------------------------------
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.
The Annual Meeting of Trust Shareholders was held April 15, 1997 to vote on
the following matters:
(1) To elect three Directors to serve as follows:
<TABLE>
<CAPTION>
DIRECTOR CLASS TERM EXPIRING
- --------------------------------------------------------------------------------------- ------------- --------- -------------
<S> <C> <C> <C>
James Grosfeld......................................................................... I 3 years 2000
James Clayburn La Force, Jr............................................................ I 3 years 2000
Walter F. Mondale...................................................................... II 1 year 1998
</TABLE>
Directors whose term of office continues beyond this meeting are Andrew
D. Brimmer, Richard E. Cavanagh, Kent Dixon, Laurence D. Fink, Frank J.
Fabozzi, 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, 1997.
Shareholders elected the three Directors and ratified the selection of
Deloitte & Touche LLP. The results of the voting was as follows:
<TABLE>
<CAPTION>
VOTES FOR VOTES AGAINST ABSTENTIONS
---------- ------------- -----------
<S> <C> <C> <C>
James Grosfeld.......................... 18,853,909 0 244,974
James Clayburn La Force, Jr............. 18,850,056 0 248,827
Walter F. Mondale....................... 18,788,632 0 310,250
Ratification of Deloitte & Touche LLP... 18,821,120 102,237 175,525
</TABLE>
15
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK INSURED MUNICIPAL 2008 TERM TRUST INC.
GLOSSARY
- --------------------------------------------------------------------------------
<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>
16
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK INSURED MUNICIPAL 2008 TERM TRUST INC.
INVESTMENT SUMMARY
- --------------------------------------------------------------------------------
THE TRUST'S INVESTMENT OBJECTIVE:
The Trust's investment objective is to provide current income exempt from
regular federal income tax and to return $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 $50 billion of assets across the government, mortgage, corporate
and municipal sectors. These assets are managed on behalf of institutional and
individual investors in 21 closed-end funds traded on the New York or American
Stock Exchanges, several open-end funds and separate accounts for more than 125
clients in the U.S. and overseas. BlackRock is a subsidiary of PNC Asset
Management Group, Inc. which is a division of PNC Bank, N.A., one of the
nation's largest banking organizations.
WHAT CAN THE TRUST INVEST IN?
The Trust intends to invest at least 80% of its total assets in 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 total assets) to enhance the income
of the portfolio. In order to maintain competitive yields as the Trust
approaches maturity and depending on market conditions, the Adviser will attempt
to purchase securities with call protection or maturities as close to the
Trust's maturity date as possible. Securities with call protection should
provide the portfolio with some degree of protection against reinvestment risk
during times of lower prevailing interest rates. Since the Trust's primary goal
is to return the initial offering price at maturity, any cash that the Trust
receives prior to its maturity date will be reinvested in securities with
maturities which coincide with the remaining term of the Trust. 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 interest
rate volatility, force a choice between current income and risking the return of
the initial offering price, it is likely the return of the initial offering
price will be emphasized.
HOW ARE THE TRUST'S SHARES PURCHASED AND SOLD? DOES THE TRUST PAY DIVIDENDS
REGULARLY?
The Trust's shares are traded on the New York Stock Exchange which provides
investors with liquidity on a daily basis. Orders to buy or sell shares of the
Trust must be placed through a registered broker or financial advisor. The Trust
pays
17
<PAGE>
monthly dividends which are typically paid on the last business day of the
month. For shares held in the shareholder's name, dividends may be reinvested in
additional shares of the fund through the Trust's transfer agent, State Street
Bank and Trust Company. Investors who wish to hold shares in a brokerage account
should check with their financial 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 CONSIDERATION. 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.
18
<PAGE>
- --------------------------------------------------------------------------------
BLACKROCK FINANCIAL MANAGEMENT, INC.
AN OVERVIEW
- --------------------------------------------------------------------------------
BlackRock Financial Management, Inc. ("BlackRock"), is a registered
investment adviser which specializes in managing high quality fixed income
securities, both taxable and tax-exempt. BlackRock currently manages
approximately $50 billion of assets across the government, mortgage, corporate
and municipal sectors. These assets are managed on behalf of institution and
individual investors in 21 closed-end funds traded on the New York or American
Stock Exchanges, several open-end funds and over 125 institutional clients in
the United States and overseas.
BlackRock was formed in April 1988 by fixed income professionals who sought
to create an asset management firm specializing in managing fixed income
securities for individual and institutional investors. The professionals at
BlackRock have extensive experience creating, analyzing and trading a variety of
fixed income instruments, including the most complex structured securities. In
fact, individuals at BlackRock are responsible for many of the major innovations
in the mortgage-backed and asset-backed securities markets, including the
creation of the CMO, the floating rate CMO, the senior/subordinated pass-through
and the multi-class asset-backed security.
BlackRock is unique among asset management and advisory firms in the
significant emphasis it places on the development of proprietary analytical
capabilities. A quarter of the professionals at BlackRock work full-time in the
design, maintenance and use of such systems which are otherwise not generally
available to investors. BlackRock's proprietary analytical tools are used for
evaluating, investing in and designing investment strategies and portfolios of
fixed income securities, including mortgage securities, corporate debt
securities or tax-exempt securities and a variety of hedging instruments.
BlackRock has developed investment products which respond to investors'
needs and has been responsible for several major innovations in closed-end
funds. BlackRock introduced the first closed-end mortgage fund, the first
taxable and tax-exempt closed-end funds to offer a finite term, the first
closed-end fund to achieve a AAAf rating by Standard & Poor's, and the first
closed-end fund to invest primarily in North American Government securities.
BlackRock's closed-end funds currently have dividend reinvestment plans which
are designed to provide an ongoing source of demand for the stock in the
secondary market. BlackRock manages a ladder of alternative investment vehicles,
with each fund having specific investment objectives and policies.
In view of our continued desire to provide a high level of service to all
our shareholders, BlackRock maintains a toll-free number for your questions. The
number is (800) 227-7BFM (7236). We encourage you to call us with any questions
you may have about your BlackRock funds and thank you for the continued trust
you place in our abilities.
IF YOU WOULD LIKE FURTHER INFORMATION
PLEASE CALL BLACKROCK AT (800)227-7BFM
OR CONSULT WITH YOU FINANCIAL ADVISOR.
19
<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
Kevin Klingert, VICE PRESIDENT
Richard M. Shea, VICE PRESIDENT/TAX
Henry Gabbay, TREASURER
James Kong, ASSISTANT TREASURER
Karen H. Sabath, SECRETARY
INVESTMENT ADVISER
BlackRock Financial Management, Inc.
345 Park Avenue
New York, NY 10154
(800) 227-7BFM
ADMINISTRATOR
Princeton Administrators, L.P.
P.O. Box 9095
Princeton, NJ 08543-9095
(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 LLP
919 Third Avenue
New York, NY 10022
The accompanying financial statements as of
June 30, 1997 were not audited and accordingly,
no opinion is expressed on them.
This report is for shareholder information. This
is not a prospectus intended for use in the purchase
or sale of any securities.
THE BLACKROCK INSURED
MUNICIPAL 2008 TERM TRUST INC.
c/o Princeton Administrators, L.P.
P.O. Box 9095
Princeton, NJ 08543-9095
(800) 227-7BFM
09247K 10 9
09247K 30 7
09247K 20 8
09247K 40 6
09247K 50 5
THE BLACKROCK
INSURED MUNICIPAL
2008 TERM TRUST INC.
--------------------------
SEMI-ANNUAL REPORT
JUNE 30, 1997
[LOGO]
