- --------------------------------------------------------------------------------
THE BLACKROCK INSURED MUNICIPAL 2008 TERM TRUST INC.
SEMI-ANNUAL REPORT TO SHAREHOLDERS
REPORT OF INVESTMENT ADVISER
- --------------------------------------------------------------------------------
July 31, 1998
Dear Shareholder:
Domestic bonds provided investors with modest total returns during the
past six months, as interest rates generally fell. Supporting the bond market
was favorable inflation news and the belief that the Federal Reserve is unlikely
to raise short-term interest rates in the immediate future.
U.S. economic growth has slowed of late after a robust first quarter of
1998. We expect the fallout from the Asian fiscal crisis to quash any
significant rebound in U.S. growth for the remainder of the year. While we
expect that interest rates will be fairly stable in the near-term, our
longer-term outlook for the bond market remains optimistic, based on the
fundamentally favorable backdrop of low inflation, a currently high level of
real yields, and declining Treasury borrowing.
As you may know, the five investment management firms that comprised the
PNC Asset Management Group have consolidated under BlackRock, resulting in
BlackRock Inc., a $119 billion money management firm. We look forward to using
our global investment management expertise to present exciting investment
opportunities to closed-end fund shareholders in the future.
This report contains comments from your Trust's managers regarding the
markets and portfolio in addition to the Trust's financial statements and a
detailed portfolio listing. We thank you for your continued investment in the
Trust.
Sincerely,
/s/ Laurence D. Fink /s/ Ralph L. Schlosstein
- -------------------- ------------------------
Laurence D. Fink Ralph L. Schlosstein
Chairman President
1
<PAGE>
July 31, 1998
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,
1998. 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:
----------------------------------------------------
6/30/98 12/31/97 CHANGE HIGH LOW
- --------------------------------------------------------------------------------
STOCK PRICE $15.5000 $15.2500 1.64% $15.7500 $14.8750
- --------------------------------------------------------------------------------
NET ASSET VALUE (NAV) $16.76 $16.80 (0.24%) $17.03 $16.54
- --------------------------------------------------------------------------------
THE FIXED INCOME MARKETS
After an extremely strong first quarter of 1998, U.S. economic growth
slowed during the past three months. Despite the strong economic growth of the
past year, inflation stayed surprisingly subdued. One explanation for the
absence of inflation in the U.S. economy stems from the aftermath of the Asian
financial crisis. U.S. exports to Asia have slowed, while the strength of the
dollar caused cheap Asian imports to flood the U.S. market and exert downward
price pressure on domestic goods.
Yields of U.S. Treasury securities have remained in a fairly narrow range
during the period. For example, the yield of the 10-Year Treasury posted a net
decline of 29 basis points (0.29%), beginning 1998 at 5.74% and closing on June
30, 1998 at 5.45%. The past six months represented a continuation of strong
Treasury performance, which has been due to moderating economic growth, low
inflation and a "flight to quality" from investors seeking a safe haven in U.S.
Treasury securities. Continued expectations that the Asian crisis will slow
economic growth and force the Fed to leave the Federal funds rate unchanged
provided additional support to the bond market. With Treasury supply waning due
to a surplus in the federal budget and an increased foreign demand for
Treasuries due to their U.S. government backing and relatively attractive
yields, we anticipate a positive environment for Treasuries for the balance of
1998.
Municipal bonds underperformed the taxable domestic bond market during the
past six months, returning 2.69% (as measured by the LEHMAN BROTHERS MUNICIPAL
INDEX) versus the LEHMAN BROTHERS AGGREGATE INDEX'S 3.91% on a pre-tax basis.
The main forces behind municipal bond underperformance were increased municipal
bond supply (fueled by the
2
<PAGE>
lowest municipal interest rates since the 1960s) and retail investor focus on
the equity markets. We believe that municipals are attractively valued versus
Treasuries and our outlook for municipal securities is favorable. The credit
quality of most issuers remains strong, and we expect that the attractive
taxable equivalent yields offered by municipal securities should bring investors
back into the market.
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. Additionally, the Trust emphasizes securities whose
maturity dates match the termination date of the Trust. We have continued to
minimize trading activity in the Trust during the period, as the market prices
of a significant portion of the portfolio's bonds are currently 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 remains the most prudent strategy.
The following chart compares the Trust's current and December 31, 1997
asset composition:
- --------------------------------------------------------------------------------
THE BLACKROCK INSURED MUNICIPAL 2008 TERM TRUST INC.
- --------------------------------------------------------------------------------
SECTOR JUNE 30, 1998 DECEMBER 31, 1997
- --------------------------------------------------------------------------------
County, City & State 26% 25%
- --------------------------------------------------------------------------------
Utility/Power 22% 22%
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Hospital 14% 15%
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Transportation 7% 6%
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Water & Sewer 6% 6%
- --------------------------------------------------------------------------------
Lease Revenue 6% 6%
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Education 6% 6%
- --------------------------------------------------------------------------------
Tax Revenue 6% 6%
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Other 4% 5%
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Housing 3% 3%
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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 neutral interest rate policy has allowed the Trust's
leverage costs to remain reasonable. At the present, we believe that leverage
will continue to positively contribute to 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 Manager
BlackRock Financial Management, Inc. 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 6/30/98: $15.50
- --------------------------------------------------------------------------------
Net Asset Value as of 6/30/98: $16.76
- --------------------------------------------------------------------------------
Yield on Closing Stock Price as of 6/30/98: ($15.50)1 5.13%
- --------------------------------------------------------------------------------
Current Monthly Distribution per Common Share2: $0.06625
- --------------------------------------------------------------------------------
Current Annualized Distribution per Common Share2: $0.795
- --------------------------------------------------------------------------------
- ----------
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>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
THE BLACKROCK INSURED MUNICIPAL 2008 TERM TRUST INC.
PORTFOLIO OF INVESTMENTS JUNE 30, 1998 (UNAUDITED)
- ----------------------------------------------------------------------------------------------------------------
PRINCIPAL OPTION
AMOUNT CALL VALUE
RATING* (000) DESCRIPTION PROVISIONS++ (NOTE 1)
- ----------------------------------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS -- 143.7%
ALABAMA -- 0.2%
<S> <C> <C> <C>
AAA $ 1,905 Mobile Impvt. Wt., Zero Coupon, 8/15/08, MBIA ............... 08/02 at 71.587 $ 1,136,218
------------
ARIZONA -- 0.6%
AAA 4,000 Chandler, G.O., Zero Coupon, 7/01/08, FGIC .................. No Opt. Call 2,534,920
------------
CALIFORNIA -- 0.4%
AAA 1,890 California Hlth. Fac. Fin. Auth. Rev., Marin Gen. Hosp.,
Ser. A, 5.75%, 8/01/09, FSA ............................... 08/03 at 102 2,014,853
------------
COLORADO -- 10.7%
AAA 2,000 E-470 Pub. Hwy. Auth. Co. Rev., Ser. B, Zero Coupon,
9/01/11, MBIA ............................................. No Opt. Call 1,063,720
AAA 30,205 Jefferson Cnty., Sch. Dist. No. R-001, G.O.,
6.25%, 12/15/02+, AMBAC ................................... N/A 33,107,398
AAA 13,285 Univ. of Colorado, Hosp. Auth. Rev., Ser. A,
6.25%, 11/15/02, AMBAC .................................... N/A 14,652,956
------------
48,824,074
------------
DISTRICT OF COLUMBIA -- 5.4%
Dist. of Columbia, G.O., MBIA,
AAA 17,950 Ser. B, 6.30%, 6/01/09 .................................... 06/02 at 102 19,429,080
AAA 3,070 Ser. E, 5.875%, 6/01/08 ................................... 06/03 at 102 3,282,383
AAA 2,000 Dist. of Columbia, Hosp. Rev., Children's Hosp., Ser. A,
6.25%, 7/15/08, FGIC ...................................... 07/02 at 102 2,159,220
------------
24,870,683
------------
GEORGIA -- 1.7%
Atlanta, C.O.P., Pretrial Det. Ctr., MBIA,
AAA 3,000 6.25%, 12/01/08 ........................................... 12/02 at 102 3,269,370
AAA 4,000 6.25%, 12/01/11 ........................................... 12/02 at 102 4,359,160
------------
7,628,530
------------
HAWAII -- 1.9%
AAA 7,760 Honolulu, Cnty., G.O., Ser. A, 5.80%, 1/01/07, FGIC ......... No Opt. Call 8,472,446
------------
ILLINOIS -- 13.2%
AAA 14,205 Chicago O'Hare Intl. Arprt. Rev., G.O., Ser. A,
6.25%, 1/01/08, MBIA ...................................... 01/05 at 102 15,700,218
Chicago, Sch. Fin. Auth., G.O., Ser. A, FGIC,
AAA 13,000 6.25%, 6/01/07 ............................................ 06/02 at 102 14,004,380
AAA 9,150 6.25%, 6/01/09 ............................................ 06/02 at 102 9,856,929
Illinois Hlth. Fac. Auth. Rev.,
AAA 11,000 Alexian Med. Ctr. Proj., Ser. A, 6.35%, 1/01/08, MBIA ..... 01/02 at 102 11,749,430
AAA 2,500 Carle Foundation, Ser. A, 6.75%, 1/01/10, FGIC ............ 01/00 at 102 2,635,275
AAA 10,170 Met. Pier & Expo. Auth., Ded. St. Tax Rev.,
Ser. A, Zero Coupon, 6/15/08, FGIC ........................ No Opt. Call 6,414,219
------------
60,360,451
------------
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 6,107,097
AAA 4,350 Ser. B, 6.25%, 7/01/08 .................................... 07/02 at 102 4,689,474
------------
10,796,571
------------
IOWA -- 1.3%
AAA 1,725 Iowa Fin. Auth., Sngl. Fam. Mtge. Rev., Ser. F,
6.35%, 7/01/09, AMBAC ..................................... 01/03 at 102 1,827,258
AAA 4,195 Muscatine, Elec. Rev., 5.00%, 1/01/08, FSA .................. 01/99 at 100 4,204,481
------------
6,031,739
------------
KENTUCKY -- 0.5%
AAA 3,890 Owensboro, Elec. Lt. & Pwr. Rev., Ser. B, Zero Coupon,
1/01/09, AMBAC ............................................ No Opt. Call 2,399,780
------------
</TABLE>
See Notes to Financial Statements.
5
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
PRINCIPAL OPTION
AMOUNT CALL VALUE
RATING* (000) DESCRIPTION PROVISIONS++ (NOTE 1)
- ----------------------------------------------------------------------------------------------------------------
LOUISIANA -- 1.2%
<S> <C> <C> <C>
AAA $ 5,000 Louisiana Pub. Fac. Auth. Hosp. Rev., Lafayette Gen.
Med. Ctr. Proj. 6.30%, 10/01/08, FSA ...................... 10/02 at 102 $ 5,454,200
------------
MASSACHUSETTS -- 4.8%
AAA 4,465 Chelsea, Sch. Proj. Loan, 6.00%, 6/15/04, AMBAC ............. N/A 4,953,337
AAA 6,000 Massachusetts Bay Trans. Auth. Rev., Ser. B,
6.00%, 3/01/10, MBIA ...................................... 03/03 at 102 6,440,040
AAA 10,000 Massachusetts St. Hsg. Fin. Agcy., Hsg. Proj.,
Ser. A, 5.95%, 10/01/08, AMBAC ............................ 04/03 at 102 10,699,600
------------
22,092,977
------------
MICHIGAN -- 5.1%
Lake Orion, Cmnty. Sch. Dist., AMBAC,
AAA 3,290 6.60%, 5/01/05 ............................................ N/A 3,778,532
AAA 3,285 6.70%, 5/01/05 ............................................ N/A 3,792,073
AAA 8,920 Michigan St. Bldg. Auth. Rev., Fac. Proj., Ser. IIA,
6.25%, 10/01/08, AMBAC .................................... 10/02 at 102 9,680,608
AAA 1,760 Western Michigan Univ. Rev., 6.20%, 11/15/02, FGIC .......... N/A 1,937,742
AAA 3,400 Wyandotte, Elec. Rev., 6.25%, 10/01/08, MBIA ................ No Opt. Call 3,873,212
------------
23,062,167
------------
MISSOURI -- 1.7%
AAA 7,350 Kansas City, Sch. Dist. Bldg. Corp. Leasehold Rev., Cap.
Impvts. Proj., Ser. A, 6.50%, 2/01/08, FGIC ............... 02/01 at 102 7,870,821
------------
NEVADA -- 3.9%
AAA 6,490 Clark Cnty., Fld. Ctrl., 6.30%, 11/01/01, AMBAC ............. N/A 6,995,636
Washoe Cnty., Arpt. Auth., Ser. B, MBIA,
AAA 3,135 5.70%, 7/01/07 ............................................ 07/03 at 102 3,346,174
AAA 2,645 5.75%, 7/01/08 ............................................ 07/03 at 102 2,829,013
AAA 4,135 Washoe Cnty., Sch. Dist., G.O., Ser. A,
6.20%, 10/01/02, AMBAC .................................... N/A 4,500,658
------------
17,671,481
------------
NEW JERSEY -- 13.0%
AAA 30,275 New Jersey Econ. Dev. Auth., Mkt. Trans. Fac. Rev., Ser. A,
5.80%, 7/01/08, MBIA ...................................... 07/04 at 102 32,762,697
AAA 24,495 New Jersey St. G.O., Ser. D, 6.00%, 2/15/09, MBIA ........... 02/03 at 102 26,439,903
------------
59,202,600
------------
NEW YORK -- 8.2%
New York City G.O., Ser. E, MBIA,
AAA 5,000 6.125%, 8/01/06 ........................................... No Opt. Call 5,534,700
AAA 15,500 6.20%, 8/01/07 ............................................ No Opt. Call 17,350,855
AAA 5,000 Ser. G, 5.75%, 2/01/08 .................................... 02/06 at 101.50 5,417,450
New York St. Environ. Fac. Corp., P.C.R., Ser. D,
AAA 5,945 6.50%, 5/15/07 ............................................ 11/04 at 102 6,755,898
AAA 2,245 6.50%, 11/15/07 ........................................... 11/04 at 102 2,551,218
------------
37,610,121
------------
NORTH CAROLINA -- 8.7%
AAA 1,000 Cumberland Cnty. C.O.P., Civic Ctr. Proj., Ser. A,
6.375%, 12/01/09, AMBAC ................................... 12/04 at 102 1,121,800
North Carolina Eastn. Mun. Pwr. Agcy. Rev., Ser. B,
AAA 14,675 7.25%, 1/01/07, CAPMAC .................................... No Opt. Call 17,352,014
AAA 5,000 7.00%, 1/01/08, CAPMAC .................................... No Opt. Call 5,890,900
AAA 13,500 6.125%, 1/01/09, FGIC ..................................... No Opt. Call 15,168,465
------------
39,533,179
------------
NORTH DAKOTA -- 1.1%
AAA 4,450 Bismark Hosp. Rev., St. Alexius Med. Ctr.,
6.90%, 5/01/06, AMBAC ..................................... 05/03 at 102 4,819,038
</TABLE>
See Notes to Financial Statements.
6
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
PRINCIPAL OPTION
AMOUNT CALL VALUE
RATING* (000) DESCRIPTION PROVISIONS++ (NOTE 1)
- ----------------------------------------------------------------------------------------------------------------
OHIO -- 2.3%
<S> <C> <C> <C>
AAA $ 2,410 Cleveland, G.O., 6.40%, 11/15/04 , MBIA ..................... N/A $ 2,740,001
AAA 6,095 Hamilton City, Elec. Sys. Rev., Ser. A, 6.125%,
10/15/08, FGIC ............................................ 10/02 at 102 6,601,190
AAA 1,000 Ohio St. Bldg. Auth., Fac. Rev., Juvenile Correctional Proj.,
6.50%, 10/01/09, AMBAC .................................... 09/04 at 102 1,127,940
------------
10,469,131
------------
PENNSYLVANIA -- 13.2%
AAA 4,000 Allegheny Cnty. Hosp. Dev. Auth. Rev., Magee Women's Hosp.,
6.25%, 10/01/08, FGIC ..................................... 10/02 at 102 4,328,160
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 10,780,400
AAA 5,000 6.25%, 7/01/08 ............................................ 07/02 at 102 5,390,200
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 7,115,064
AAA 3,500 Indiana Cnty. Indl. Dev. Auth., P.C.R., New York St.
Elec. & Gas Corp., Ser. A, 6.00%, 6/01/06, MBIA ........... No Opt. Call 3,858,470
AAA 6,500 Pennsylvania Hsg. Fin. Agcy. Rev., Rental Hsg.,
Ser. C, 6.25%, 7/01/07, FNMA .............................. 07/02 at 102 6,918,925
AAA 7,450 Pennsylvania St., G.O., Ser. A, 6.50%, 11/01/01, FGIC ....... No Opt. Call 8,108,878
AAA 10,930 Pittsburgh, G.O., Ser. D, 6.00%, 9/01/08, AMBAC ............. 09/02 at 102 11,759,478
AAA 1,665 Scranton-Lackawanna Hlth. & Welfare Auth. Rev.,
6.90%, 1/01/00, MBIA ...................................... N/A 1,767,364
------------
60,026,939
------------
TEXAS -- 24.5%
AAA 13,000 Austin, Pub. Impvt., G.O., AMBAC, 6.10%, 9/01/02 ............ N/A 13,972,400
Austin, Util. Sys. Rev.,
AAA 11,515 Ser. A, Zero Coupon, 11/15/08, MBIA ....................... No Opt. Call 7,138,379
AAA 5,000 Ser. A, Zero Coupon, 11/15/09, AMBAC ...................... No Opt. Call 2,927,300
AAA 5,000 Ser. A, Zero Coupon, 11/15/09, MBIA ....................... No Opt. Call 2,927,300
AAA 5,000 6.625%, 11/15/08, AMBAC ................................... No Opt. Call 5,838,250
AAA 7,000 6.25%, 11/15/08, AMBAC .................................... 11/02 at 102 7,632,590
AAA 5,225 Baytown, G.O., 6.40%, 2/01/08, AMBAC ........................ 02/02 at 100 5,562,953
AAA 9,930 Circle C Mun. Util. Dist. No. 3 Rev., 6.50%, 11/15/09, FGIC . 11/01 at 100 10,618,447
Coppell Indpt. Sch. Dist., MBIA,
AAA 1,430 6.10%, 8/15/09 ............................................ No Opt. Call 1,610,409
AAA 2,495 6.10%, 8/15/09 ............................................ 08/02 at 100 2,637,065
AAA 4,390 Houston Indpt. Sch. Dist., Zero Coupon, 8/15/09, AMBAC ...... No Opt. Call 2,600,592
AAA 16,135 Houston, Wtr. & Swr. Sys. Rev., Jr. Lien, Ser. C,
6.25%, 12/01/09, MBIA ..................................... 12/02 at 102 17,651,851
AAA 6,000 San Antonio Elec. & Gas Rev., Ser. B, Zero Coupon,
2/01/10, FGIC ............................................. No Opt. Call 3,438,900
Texas Mun. Pwr. Agcy. Rev., AMBAC,
AAA 15,000 Zero Coupon, 9/01/08 ...................................... No Opt. Call 9,387,150
AAA 16,175 Zero Coupon, 9/01/09 ...................................... No Opt. Call 9,561,851
AAA 5,900 Texas St. Pub. Fin. Auth. Bldg. Rev., Ser. B,
6.25%, 2/01/09, AMBAC ..................................... No Opt. Call 6,747,948
AAA 2,275 Ysleta, Indpt. Sch. Dist. Rev., Zero Coupon, 8/15/08, PSFG .. No Opt. Call 1,428,063
------------
111,681,448
------------
UTAH -- 1.2%
AAA 3,500 Intermountain Pwr. Agcy. Rev., Ser. B, 6.00%,
7/01/07, MBIA ............................................. No Opt. Call 3,877,405
AAA 1,550 Salt Lake Cnty. Mun. Bldg. Auth. Lease Rev., Ser. A,
6.05%, 10/01/08, MBIA ..................................... 10/04 at 101 1,684,649
------------
5,562,054
------------
WASHINGTON -- 13.8%
AAA 12,850 King Cnty., Ser. D, 5.55%, 12/01/08, MBIA ................... 12/07 at 102 13,955,486
AAA 9,000 Seattle Hlth Care Fac. Auth. Rev., Virginia Mason Oblig.
Group, 6.30%, 2/15/09, MBIA ............................... 02/03 at 102 9,782,640
Snohomish Cnty., Sch. Dist., MBIA
AAA 2,235 6.10%, 12/01/03+ .......................................... N/A 2,473,944
AAA 1,765 6.10%, 12/01/08+ .......................................... 12/03 at 102 1,920,108
Washington St. Pub. Pwr. Supply Sys. Rev.,
AAA 5,550 No. 3, Zero Coupon, 7/01/07, BIG .......................... No Opt. Call 3,664,998
AAA 2,000 No. 3, Zero Coupon, 7/01/08, BIG .......................... No Opt. Call 1,256,340
AAA 3,000 5.55%, 7/01/10, FGIC ...................................... 07/03 at 102 3,130,110
AAA 11,000 5.80%, 7/01/07, FSA ....................................... No Opt. Call 11,965,690
AAA 13,635 No. 2, Ser. A, 6.25%, 7/01/09, MBIA ....................... 07/02 at 102 14,699,075
------------
62,848,391
------------
</TABLE>
See Notes to Financial Statements.
7
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
PRINCIPAL OPTION
AMOUNT CALL VALUE
RATING* (000) DESCRIPTION PROVISIONS++ (NOTE 1)
- ----------------------------------------------------------------------------------------------------------------
WEST VIRGINIA -- 2.7%
<S> <C> <C> <C>
AAA $11,600 West Virginia St. Parkways Econ. Dev. & Tourism Auth.,
5.70%, 5/15/09, FGIC ...................................... 05/03 at 102 $ 12,292,984
------------
TOTAL LONG-TERM INVESTMENTS (COST $593,238,221) ............. 655,267,796
------------
SHORT-TERM INVESTMENTS** -- 0.5%
CONNECTICUT -- 0.1%
A1+ 300 Connecticut St. Dev. Auth. P.C.R., Western Mass. Elec. Co.,
Ser. A, 3.30%, 7/01/98, FRDD .............................. N/A 300,000
FLORIDA -- 0.2%
P1 700 Hillsborough Cnty. Indl. Dev. Auth., P.C.R., Tampa Elec. Co.,
4.10%, 7/01/98, FRDD ...................................... N/A 700,000
GEORGIA -- 0.0%
A1+ 200 Burke Cnty. Dev. Auth. P.C.R., Georgia Pwr. Co.,
4.10%, 7/01/98, FRDD ...................................... N/A 200,000
MISSOURI -- 0.1%
A1+ 400 Kansas City Indl. Dev. Auth., Hosp. Rev., 3.80%,
7/01/98, FRDD ............................................. N/A 400,000
NEW YORK -- 0.1%
P1 600 New York Res. & Dev. Auth. P.C.R., New York St.
Elec. and Gas, 3.80%, 7/01/98, FRDD ....................... N/A 600,000
------------
TOTAL SHORT-TERM INVESTMENTS (COST $2,200,000) .............. 2,200,000
------------
TOTAL INVESTMENTS -- 144.2% (COST $595,438,221) ............. 657,467,796
Other assets in excess of liabilities -- 1.0% ............... 4,486,344
Liquidation value of preferred stock -- (45.2%) ............. (206,000,000)
------------
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS -- 100 ......... $455,954,140
============
</TABLE>
- ----------
* Rating: Using the higher of Standard and Poor's, Moody's or Fitch's rating.
** 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.
++ 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.
================================================================================
THE FOLLOWING ABBREVIATIONS ARE USED IN PORTFOLIO DESCRIPTIONS:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
AMBAC -- American Municipal Bond Assurance Corporation FSA -- Financial Security Assurance
BIG -- Bond Investors Guaranty Insurance Company FRDD -- Floating Rate Daily Demand
CAPMAC -- Capital Markets Assurance Company G.O. -- General Obligation Bond
C.O.P. -- Certificate of Participation MBIA -- Municipal Bond Insurance Association
FNMA -- Federal National Mortgage Association P.C.R. -- Pollution Control Revenue
FGIC -- Financial Guaranty Insurance Company PSFG -- Permanent School Fund Guaranty
</TABLE>
================================================================================
See Notes to Financial Statements.
8
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK INSUREDMUNICIPAL 2008 TERM TRUST INC.
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
ASSETS
Investments, at value (cost $595,438,221) (Note 1) ......... $ 657,467,796
Cash ....................................................... 47,532
Interest receivable ........................................ 10,113,731
Receivable from investments sold ........................... 220,000
Other Assets ............................................... 31,199
-------------
667,880,258
-------------
LIABILITIES
Payable for investments purchased .......................... 5,216,500
Investment advisory fee payable (Note 2) ................... 191,095
Dividends payable--preferred stock ......................... 169,915
Administration fee payable (Note 2) ........................ 54,599
Other accrued expenses ..................................... 294,009
-------------
5,926,118
-------------
NET INVESTMENT ASSETS ...................................... $ 661,954,140
=============
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 ...................... 15,497,076
Accumulated net realized loss ............................ (293,368
Net unrealized appreciation .............................. 62,029,575
-------------
Net investment assets, June 30, 1998 ..................... $ 661,954,140
=============
Net assets applicable to commonshareholders .............. $ 455,954,140
=============
Net asset value per common share:
($455,954,140 O 27,207,093 shares of
common stock issued and outstanding) ..................... $16.76
======
- --------------------------------------------------------------------------------
THE BLACKROCK INSUREDMUNICIPAL 2008 TERM TRUST INC.
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
NET INVESTMENT INCOME
Income
Interest and discount earned ............................... $18,125,049
-----------
Expenses
Investment advisory ........................................ 1,156,178
Administration ............................................. 330,336
Auction agent .............................................. 298,000
Custodian .................................................. 87,000
Directors .................................................. 55,000
Reports to shareholders .................................... 50,000
Audit ...................................................... 33,000
Transfer agent ............................................. 15,000
Legal ...................................................... 12,000
Miscellaneous .............................................. 51,172
-----------
Total expenses .......................................... 2,087,686
-----------
Net investment income ........................................ 16,037,363
-----------
UNREALIZED LOSS ON
INVESTMENTS (NOTE 3)
Net change in unrealized appreciationon investments ........ (3,001,035)
-----------
NET INCREASE IN NET INVESTMENT
ASSETS RESULTING FROM OPERATIONS .......................... $13,036,328
===========
See Notes to Financial Statements.
9
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK INSURED MUNICIPAL 2008 TERM TRUST INC.
STATEMENTS OF CHANGES IN NET INVESTMENT ASSETS (UNAUDITED)
- --------------------------------------------------------------------------------
SIX MONTHS YEAR ENDED
ENDED DECEMBER 31,
JUNE 30, 1998 1997
------------- -------------
INCREASE (DECREASE) IN NET INVESTMENT ASSETS
OPERATIONS:
Net investment income ...................... $ 16,037,363 $ 31,973,585
Net realized gain on investments ........... -- 172,902
Net change in unrealized appreciation
on investments ........................... (3,001,035) 21,311,862
------------- -------------
Net increase in net investment assets
resulting from operations ................ 13,036,328 53,458,349
------------- -------------
DIVIDENDS AND DISTRIBUTIONS:
To common shareholders from net
investment income ........................ (10,814,632) (21,498,340)
To common shareholders in excess of net
realized gain on investments ............. -- (130,975)
To preferred shareholders from net
investment income ........................ (3,459,677) (7,203,821)
To preferred shareholders in excess of
net realized gain on investments ......... -- (41,921)
------------- -------------
Total dividends and distributions .......... (14,274,309) (28,875,057)
------------- -------------
Total increase (decrease) ............. (1,237,981) 24,583,292
------------- -------------
NET INVESTMENT ASSETS
Beginning of period .......................... 663,192,121 638,608,829
------------- -------------
End of period ................................ $ 661,954,140 $ 663,192,121
============= =============
See Notes to Financial Statements.
10
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
THE BLACKROCK INSURED MUNICIPAL 2008 TERM TRUST INC.
FINANCIAL HIGHLIGHTS (UNAUDITED)
- -----------------------------------------------------------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, --------------------------------------------------------
PER SHARE OPERATING PERFORMANCE: 1998 1997 1996 1995 1994 1993
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of the period .................. $ 16.80 $ 15.90 $ 16.08 $ 13.88 $ 16.23 $ 14.31
-------- -------- -------- -------- -------- --------
Net investment income ................................... 0.59 1.18 1.17 1.19 1.15 1.14
Net realized and unrealized gain (loss)
on investments ........................................ (0.11) 0.78 (0.27) 2.21 (2.39) 1.91
-------- -------- -------- -------- -------- --------
Net increase (decrease) from investment operations ........ 0.48 1.96 0.90 3.40 (1.24) 3.05
-------- -------- -------- -------- -------- --------
Dividends from net investment income to:
Preferred shareholders .................................. (0.12) (0.27) (0.25) (0.28) (0.23) (0.20)
Common shareholders ..................................... (0.40) (0.79) (0.79) (0.83) (0.88) (0.88)
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 ......................... (0.52) (1.06) (1.08) (1.20) (1.11) (1.13)
-------- -------- -------- -------- -------- --------
Net asset value, end of period* ........................... $ 16.76 $ 16.80 $ 15.90 $ 16.08 $ 13.88 $ 16.23
======== ======== ======== ======== ======== ========
Market value, end of period* .............................. $ 15.50 $ 15.25 $ 14.50 $ 13.50 $ 12.25 $ 15.13
======== ======== ======== ======== ======== ========
TOTAL INVESTMENT RETURN ................................... 4.28% 10.97% 13.56% 17.64% (13.71)% 16.05%
======== ======== ======== ======== ======== ========
RATIOS TO AVERAGE NET ASSETS OF
COMMONSHAREHOLDERS:
Expenses .................................................. 0.92%+++ 0.92% 0.95% 0.95% 1.02% 0.88%
Net investment income before preferred
stock dividends ....................................... 7.09%+++ 7.19% 7.32% 7.74% 7.80% 7.43%
Preferred stock dividends ................................. 1.53%+++ 1.03% 1.64% 1.97% 1.55% 1.35%
Net investment income available to
common shareholders ................................... 5.56%+++ 5.56% 5.68% 5.77% 6.25% 6.08%
SUPPLEMENTAL DATA:
Average net assets of common shareholders
(in thousands) ........................................ $456,427 $444,895 $434,692 $417,017 $400,555 $420,532
Portfolio turnover ........................................ 0% 11% 8% 27% 64% 15%
Net assets of common shareholders,
end of period (in thousands) ............................ $455,954 $457,192 $432,609 $437,470 $377,679 $441,543
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# .......................................... $ 80,334 $ 80,484 $ 77,501 $ 78,091 $141,670 $157,171
</TABLE>
* Net asset value and market value are published in THE WALL STREET JOURNAL
each Monday.
** Actual amount paid to common shareholders was $0.004814, and $0.00271 for
the years ended December 31, 1997, and 1996 respectively. Actual amount
paid to preferred shareholders was $0.00154, $0.00084 and $0.002929 per
common share for the years ended December 31, 1997, 1996 and 1995
respectively.
# 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.
++ 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.
+++ Annualized.
The information above represents the unaudited operating performance data for a
share of common stock outstanding, total investment return, ratios to average
net assets and other supplemental data for 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 (UNAUDITED)
- --------------------------------------------------------------------------------
NOTE 1. ORGANIZATION & 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.
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.
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 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
realized short-term capital gains and other sources, if necessary. Net long-term
capital gains, if any, in excess of loss carryforwards may be distributed
annually. Dividends and distributions are recorded on the ex-dividend date.
Dividends and distributions to preferred shareholders are accrued and determined
as described in Note 4.
ESTIMATES: The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
NOTE 2. AGREEMENTS The Trust has an Investment Advisory Agreement with
BlackRock Financial Management, Inc. (the "Adviser") a wholly-owned corporate
subsidiary of BlackRock Advisors, Inc., an indirect majority-owned subsidiary of
PNCBank, N.A., 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.
NOTE 3. PORTFOLIO SECURITIES Purchases of investment securities, other than
short-term investments for the six months ended June 30, 1998 aggregated
$810,892. There were no sales, other than short-term investments, during the six
months ended June 30, 1998.
The federal income tax basis of the Trust's investments at June 30, 1998, was
$595,744,004, and accordingly, gross and net unrealized appreciation was
$61,723,792.
12
<PAGE>
NOTE 4. CAPITAL There are 200 million shares of $.01 par value common common
stock authorized. Of the 27,207,093 common shares outstanding at June 30, 1998,
the Adviser owned 7,093 shares. As of June 30, 1998, 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 2.40% to 4.05% during the
six months ended June 30, 1998.
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. DIVIDENDS Subsequent to June 30, 1998, the Board of Directors of the
Trust declared a dividend from undistributed earnings of $0.06625 per common
share payable July 31, 1998 to shareholders of record on July 15, 1998.
For the period July 1, 1998 to July 31, 1998 dividends and distributions
declared on preferred shares totalled $569,791 in aggregate for the four
outstanding preferred share series.
13
<PAGE>
- --------------------------------------------------------------------------------
BLACKROCK FINANCIAL MANAGEMENT, INC.
SUMMARY OF CLOSED-END FUNDS
- --------------------------------------------------------------------------------
TAXABLE TRUSTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
STOCK MATURITY
PERPETUAL TRUSTS SYMBOL DATE
------ --------
The BlackRock Income Trust Inc. ...................................... BKT N/A
The BlackRock North American Government Income Trust Inc. ............ BNA N/A
TERM TRUSTS
The BlackRock 1998 Term Trust Inc. ................................... BBT 12/98
The BlackRock 1999 Term Trust Inc. ................................... BNN 12/99
The BlackRock Target Term Trust Inc. ................................. BTT 12/00
The BlackRock 2001 Term Trust Inc. ................................... BLK 06/01
The BlackRock Strategic Term Trust Inc. .............................. BGT 12/02
The BlackRock Investment Quality Term Trust Inc. ..................... BQT 12/04
The BlackRock Advantage Term Trust Inc. .............................. BAT 12/05
The BlackRock Broad Investment Grade 2009 Term Trust Inc. ............ BCT 12/09
TAX-EXEMPT TRUSTS
- ------------------------------------------------------------------------------------------------
STOCK MATURITY
PERPETUAL TRUSTS SYMBOL DATE
------ --------
The BlackRock Investment Quality Municipal Trust Inc. ................ BKN N/A
The BlackRock California Investment Quality Municipal Trust Inc. ..... RAA N/A
The BlackRock Florida Investment Quality Municipal Trust ............. RFA N/A
The BlackRock New Jersey Investment Quality Municipal Trust Inc. ..... RNJ N/A
The BlackRock New York Investment Quality Municipal Trust Inc. ....... RNY N/A
TERM TRUSTS
The BlackRock Municipal Target Term Trust Inc. ....................... BMN 12/06
The BlackRock Insured Municipal 2008 Term Trust Inc. ................. BRM 12/08
The BlackRock California Insured Municipal 2008 Term Trust Inc. ...... BFC 12/08
The BlackRock Florida Insured Municipal 2008 Term Trust .............. BRF 12/08
The BlackRock New York Insured Municipal 2008 Term Trust Inc. ........ BLN 12/08
The BlackRock Insured Municipal Term Trust Inc. ...................... BMT 12/10
</TABLE>
IF YOU WOULD LIKE FURTHER INFORMATION PLEASE
CALL BLACKROCK AT (800) 227-7BFM (7236)
OR CONSULT WITH YOUR FINANCIAL ADVISOR.
18
<PAGE>
- --------------------------------------------------------------------------------
BLACKROCK FINANCIAL MANAGEMENT, INC.
AN OVERVIEW
- --------------------------------------------------------------------------------
BlackRock Financial Management, Inc. ("BlackRock") is an SEC-registered
investment adviser. BlackRock and its affiliates currently manage over $119
billion on behalf of taxable and tax-exempt clients worldwide. Strategies
include fixed income, equity and cash and may incorporate both domestic and
international securities. BlackRock manages twenty-one closed-end funds that are
traded on either the New York or American stock exchanges, and a $23 billion
family of open-end equity and bond funds. Current institutional clients number
334, domiciled in the United States and overseas.
BlackRock's fixed income product was introduced in 1988 by a team of
highly seasoned fixed income professionals. These professionals had extensive
experience creating, analyzing and trading a variety of fixed income
instruments, including the most complex structured securities. In fact, several
individuals at BlackRock were responsible for developing many of the major
innovations in the mortgage-backed and asset-backed securities markets,
including the creation of the first CMO, the floating rate CMO, the
senior/subordinated pass-through and the multi-class asset-backed security.
BlackRock is unique among asset management and advisory firms in the
emphasis it places on the development of proprietary analytical capabilities.
Over one quarter of the firm's professionals is dedicated to the design,
maintenance and use of these systems, which are not otherwise available to
investors. BlackRock's proprietary analytical tools are used for evaluating, and
designing fixed income investment strategies for client portfolios. Securities
purchased include mortgages, corporate bonds, municipal bonds and a variety of
hedging instruments.
BlackRock has developed investment products that respond to investors'
needs and has been responsible for several major innovations in closed-end
funds. In fact, BlackRock introduced the first closed-end mortgage fund, the
first taxable and tax-exempt closed-end funds to offer a finite term, the first
closed-end fund to achieve a AAA rating by Standard & Poor's, and the first
closed-end fund to invest primarily in North American Government securities.
Currently, BlackRock's closed-end funds have dividend reinvestment plans, which
are designed to provide ongoing demand for the stock in the secondary market.
BlackRock manages a wide range of investment vehicles, each having specific
investment objectives and policies.
In view of our continued desire to provide a high level of service to all
our shareholders, BlackRock maintains a toll-free number for your questions. The
number is (800) 227-7BFM (7236). We encourage you to call us with any questions
that you may have about your BlackRock funds and we thank you for the continued
trust that you place in our abilities.
IF YOU WOULD LIKE FURTHER INFORMATION
PLEASE DO NOT HESITATE TO CALL BLACKROCK AT (800) 227-7BFM
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK INSURED MUNICIPAL 2008 TERM TRUST INC.
DIVIDEND REINVESTMENT PLAN
- --------------------------------------------------------------------------------
Pursuant to the Trust's Dividend Reinvestment Plan (the "Plan"),
shareholders may elect to have all distributions of dividends and capital gains
automatically reinvested by State Street Bank & Trust Company (the "Plan Agent")
in Trust shares. 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 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 address is 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 the investment in the Trust. There have
been no changes in the persons who are primarily responsible for the day-to-day
management of the Trust's portfolio.
The Annual Meeting of Trust Shareholders was held May 6, 1998 to vote on
the following matters:
(1) To elect two Directors to serve as follows:
DIRECTOR CLASS TERM EXPIRING
-------- ----- ---- --------
Walter F. Mondale ...................... II 3 years 2001
Ralph L.Schlosstein .................... II 3 years 2001
Directors whose term of office continues beyond this meeting are
Andrew D.Brimmer, Richard E. Cavanagh, Kent Dixon, Frank J. Fabozzi,
Laurence D. Fink, James Grosfeld and James Clayburn La Force, Jr.
(2) To ratify the selection of Deloitte & Touche LLP as independent public
accountants of the Trust for the fiscal year ending December 31, 1998.
Shareholders elected the two Directors and ratified the selection of
Deloitte & Touche LLP. The results of the voting was as follows:
VOTES FOR VOTES AGAINST ABSTENTIONS
--------- ------------- -----------
Walter F.Mondale ............ 20,002,324 0 259,686
Ralph L.Schlosstein ......... 19,819,963 0 442,047
Ratification of
Deloitte & Touche LLP .... 19,910,399 117,807 233,804
14
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK FLORIDA INSURED MUNICIPAL 2008 TERM TRUST
INVESTMENT SUMMARY
- --------------------------------------------------------------------------------
THE TRUST'S INVESTMENT OBJECTIVE
The Trust's investment objective is to provide current income exempt from
federal income tax and Florida intangible personal property 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") is an SEC-registered
investment adviser. BlackRock and its affiliates currently manage over $118
billion on behalf of taxable and tax-exempt clients worldwide. Strategies
include fixed income, equity and cash and may incorporate both domestic and
international securities. Domestic fixed income strategies utilize the
government, mortgage, corporate and municipal bond sectors. BlackRock manages
twenty-one closed-end funds that are traded on either the New York or American
stock exchanges, and a $23 billion family of open-end equity and bond funds.
Current institutional clients number 334, domiciled in the United States and
overseas.
WHAT CAN THE TRUST INVEST IN?
The Trust intends to invest at least 80% of its total assets in Florida
municipal obligations insured as to the timely payment of principal and
interest. The Trust may invest up to 20% in uninsured Florida municipal
obligations which are rated Aaa by Moody's or AAA by S&P, or are determined by
the Adviser to be of comparable credit quality (guaranteed, escrowed or backed
in trust).
WHAT IS THE ADVISER'S INVESTMENT STRATEGY?
The Adviser will seek to meet the Trust's investment objective by managing the
assets of the Trust so as to return the initial offering price ($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 Florida municipal
obligations and retaining a small amount of income each year.
In addition to seeking the return of the initial offering price, the Adviser
also seeks to provide current income exempt from federal income tax and Florida
intangible personal 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.
Since shorter-term securities typically yield less than longer-term securities,
this strategy will likely result in a decline in the Trust's income over time.
It is important to note that the Trust will be managed so as to preserve the
integrity of the return of the initial offering price. If market conditions,
such as high interest rate volatility, force a choice between current income and
risking the return of the initial offering price, it is likely that the return
of the initial offering price will be emphasized.
HOW ARE THE TRUST'S SHARES
PURCHASED AND SOLD? DOES THE TRUST PAY DIVIDENDS REGULARLY?
The Trust's shares are traded on the New York Stock Exchange which provides
investors with liquidity on a daily basis. Orders to buy or sell shares of the
Trust must be placed through a registered broker or financial advisor. The Trust
pays monthly dividends which are typically paid on the last business day of the
month. For shares held in the shareholder's name, dividends may be reinvested in
additional shares of the Trust 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.
15
<PAGE>
LEVERAGE CONSIDERATIONS IN A TERM TRUST
Under current market conditions, leverage increases the income earned by the
Trust. The Trust employs leverage primarily through the issuance of preferred
stock. Leverage permits the Trust to borrow money at short-term rates and
reinvest that money in longer-term assets which typically offer higher interest
rates. The difference between the cost of the borrowed funds and the income
earned on the proceeds that are invested in longer term assets is the benefit to
the Trust from leverage. In general, the portfolio is typically leveraged at
approximately 35% of total assets.
Leverage also increases the duration (or price volatility of the net assets) of
the Trust, which can improve the performance of the fund in a declining rate
environment, but can cause net assets to decline faster than the market in a
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: BRF) and as such
are subject to supply and demand influences. As a result, shares may trade at a
discount or a premium to their net asset value.
ILLIQUID SECURITIES. The Trust may invest in securities that are illiquid,
although under current market conditions the Trust expects to do so to only a
limited extent. Investing in these securities involves special risks.
ANTITAKEOVER PROVISIONS. Certain antitakeover provisions will make a change in
the Trust's business or management more difficult without the approval of the
Trust's Board of Directors and may have the effect of depriving shareholders of
an opportunity to sell their shares at a premium above the prevailing market
price.
MUNICIPAL OBLIGATIONS. Municipal obligations include debt obligations issued by
states, cities, and local authorities, and possessions and certain territories
of the United States to obtain funds for various public purposes, including the
construction of public facilities, the refinancing of outstanding obligations
and the obtaining of funds for general operating expenses and for loans to other
public institutions and facilities. The value of municipal debt securities
generally varies inversely with changes in prevailing market interest rates.
Depending on the amount of call protection that the securities in the Trust
have, the Trust may be subject to certain reinvestment risks in environments of
declining interest rates.
ALTERNATIVE MINIMUM TAX (AMT). The Trust may invest in securities subject to
AMT. The Trust currently holds no securities that are subject to AMT.
16
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THE BLACKROCK INSURED MUNICIPAL 2008 TERM TRUST INC.
GLOSSARY
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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 on
Saturday and THE NEW YORK TIMES 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.
PRE-REFUNDED 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.
17
<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 Adminstrators, L.P.
P.O. Box 9095
Princeton, NJ 08543-9095
(800) 543-6217
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, 1998, were not audited and,
accordingly, no opinion is expressed on them.
This report is for shareholder information.
This is not a prospectus intended for use in the
purchase or sale of any securities.
THE BLACKROCK 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
[LOGO] Printed on recycled paper
THE BLACKROCK
INSURED MUNICIPAL
2008 TERM TRUST INC.
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SEMI-ANNUAL REPORT
JUNE 30, 1998
[GRAPHIC OMITTED]
