- --------------------------------------------------------------------------------
THE BLACKROCK INSURED MUNICIPAL 2008 TERM TRUST INC.
SEMI-ANNUAL REPORT TO SHAREHOLDERS
REPORT OF INVESTMENT ADVISER
- --------------------------------------------------------------------------------
July 31, 1999
Dear Shareholder:
Since the Trust's last report, interest rates rose sharply as U.S.
economic growth remained strong, labor markets tightened and international
markets began to recover. In light of these factors, the Federal Reserve's
Federal Open Market Committee increased short-term interest rates by 25 basis
points in June, citing a concern that inflation might start to accelerate.
In tandem with the Fed's recent rate tightening, BlackRock has taken a
defensive interest rate stance. With the Treasury curve currently pricing in the
possibility of another Fed tightening by year-end, we believe that interest
rates will trade in a relatively narrow range until the economy shows signs of
slowing.
This report contains comments from your Trust's managers regarding the
markets and portfolio in addition to the Trust's semi-annual 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, 1999
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,
1999. 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 past six months:
-----------------------------------------------------
6/30/99 12/31/98 CHANGE HIGH LOW
- -----------------------------------------------------------------------------
STOCK PRICE $15.375 $16.125 (4.65%) $16.00 $15.0625
- -----------------------------------------------------------------------------
NET ASSET VALUE (NAV) $16.36 $17.06 (4.10%) $17.27 $16.33
- -----------------------------------------------------------------------------
THE FIXED INCOME MARKETS
The past six months have witnessed continued rapid expansion of the U.S.
economy. GDP growth for the second quarter of 1999 is estimated at an annual
rate of 3.5%-4%, far exceeding the historical non-inflationary level of 2%.
While BlackRock believes that growth may slow down in the second half of 1999,
we anticipate GDP to remain above 3% for the year. In spite of strong domestic
economic growth, inflationary forces continue to remain contained; still, the
Federal Reserve chose to raise its target for the federal funds rate from 4.75%
to 5.00% at its June meeting. The Fed cited an easing of financial strain, tight
labor markets and a firming of foreign economies in the release accompanying the
move. The Fed dropped its tightening bias to a neutral bias, which should reduce
the likelihood of another hike at the August 24th meeting. However, an
additional 25-50 basis points of tightening by year end is possible, as the
combination of a very strong domestic economy and an improving situation in
Europe and Japan may allow for tighter monetary policy.
U.S. Treasury securities dramatically reversed their fourth quarter gains
in the first half of 1999. The yield of the 10-Year Treasury posted a net
decline of 118 basis points (1.18%), beginning 1999 at 4.65% and closing on June
30, 1999 at 5.78%. Strong economic numbers led the Federal Reserve to adopt a
tightening bias on May 18, 1999 and ultimately raised interest rates by 25 basis
points on June 30, 1999. The Federal Reserve eased rates by 0.75% in 1998
because of the global financial crisis but cited in their June 1999 meeting
"Since then much of the financial strain has eased, foreign economies have
firmed and economic activity in the U.S. has moved forward at a brisk pace." We
anticipate Treasuries will trade in a relatively narrow range for the balance of
1999 unless the Fed takes further action.
2
<PAGE>
Municipal bonds outperformed the taxable domestic bond market during the
past six months, returning -0.90% (as measured by the Lehman Municipal Index)
versus the Lehman Aggregate Index's -1.37% on a pre-tax basis. Municipal bonds
continue to appear attractive relative to Treasuries on a long-term historical
basis, and we believe that reduced Treasury supply and increased crossover
activity should keep ratios at higher than normal levels. Supply and demand
technicals continue to improve in the municipal market as supply has declined
23% in the first half of 1999 from last year. Much of the drop in issuance can
be attributed to the plunge in refunding supply, which is down nearly 50% versus
last year. Retail investors have been adding municipals to their portfolios at
an aggressive pace, which should result in the second consecutive year of net
positive cash flows into mutual funds after having negative flows during the
previous four years. Due to the factors mentioned above, we believe municipals
remain a compelling investment opportunity going forward.
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. Trading activity in the
Trust remained low 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. Since one of the Trust's primary
investment objectives is to pay out tax-exempt income, we believe that
restructuring the portfolio in a higher interest rate environment remains the
most prudent strategy.
Additionally, the Trust employs leverage to enhance its income by borrowing
at short-term municipal rates and investing the proceeds in longer maturity
issues that have higher yields. The degree to which the Trust can benefit from
its use of leverage may affect its ability to pay high monthly income. At the
end of the semi-annual period, the Trust's leverage amount was 31% of total
assets. During the past six months, the Trust's borrowing costs have remained
favorable.
The following chart compares the Trust's current and December 31, 1998
asset composition:
---------------------------------------------------------------------------
THE BLACKROCK INSURED MUNICIPAL 2008 TERM TRUST INC.
---------------------------------------------------------------------------
SECTOR JUNE 30, 1999 DECEMBER 31, 1998
---------------------------------------------------------------------------
Utility/Power 23% 22%
---------------------------------------------------------------------------
County, City & State 21% 26%
---------------------------------------------------------------------------
Hospital 14% 14%
---------------------------------------------------------------------------
Education 11% 6%
---------------------------------------------------------------------------
Lease Revenue 6% 6%
---------------------------------------------------------------------------
Tax Revenue 6% 6%
---------------------------------------------------------------------------
Transportation 6% 6%
---------------------------------------------------------------------------
Water & Sewer 6% 6%
---------------------------------------------------------------------------
Special District 3% 4%
---------------------------------------------------------------------------
Housing 3% 3%
---------------------------------------------------------------------------
Industrial & Pollution Control 1% 1%
---------------------------------------------------------------------------
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/Michael P. Lustig
- ------------------- --------------------
Robert S. Kapito Michael P. Lustig
Vice Chairman and Portfolio Manager Director and Portfolio Manager
BlackRock Financial Management, Inc. BlackRock Financial Management, Inc.
-----------------------------------------------------------------------------
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 6/30/99: $15.375
-----------------------------------------------------------------------------
Net Asset Value as of 6/30/99: $16.36
-----------------------------------------------------------------------------
Yield on Closing Stock Price as of 6/30/99 ($15.375)1: 5.17%
-----------------------------------------------------------------------------
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, 1999 (Unaudited)
- --------------------------------------------------------------------------------------------------------
PRINCIPAL OPTION
AMOUNT CALL VALUE
RATING* (000) DESCRIPTION PROVISIONS+ (NOTE 1)
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
LONG-TERM INVESTMENTS--144.9%
ALABAMA--0.3%
AAA $ 1,905 Mobile Impvt. Wt., Zero Coupon, 8/15/08, MBIA ... 8/02 at 71.587 $ 1,170,375
-----------
ARIZONA--0.6%
AAA 4,000 Chandler, G.O., Zero Coupon, 7/01/08, FGIC ...... No Opt. Call 2,574,960
-----------
CALIFORNIA--0.4%
AAA 1,890 California Hlth. Fac. Fin. Auth. Rev.,
Marin Gen. Hosp., Ser. A, 5.75%, 8/01/09, FSA ... 8/03 at 102 1,994,460
-----------
COLORADO--10.7%
AAA 2,000 E-470 Pub. Hwy. Auth. Co. Rev.,
Ser. B, Zero Coupon, 9/01/11, MBIA ............ No Opt. Call 1,073,040
AAA 30,205++ Jefferson Cnty. Sch. Dist. No. R-001,
G.O., 6.25%, 12/15/02, AMBAC .................. N/A 32,360,731
AAA 13,285++ Univ. of Colorado, Hosp. Auth. Rev.,
Ser. A, 6.25%, 11/15/02, AMBAC ................ N/A 14,329,599
-----------
47,763,370
-----------
DISTRICT OF COLUMBIA--5.5%
Dist. of Columbia, G.O., MBIA,
AAA 17,950+ Ser. B, 6.30%, 6/01/02 ........................ N/A 19,200,577
AAA 115+ Ser. E, 5.875%, 6/01/03 ....................... N/A 122,530
AAA 2,955 Ser. E, 5.875%, 6/01/08 ....................... 6/03 at 102 3,098,820
AAA 2,000 Dist. of Columbia, Hosp. Rev., Children's Hosp.,
Ser. A, 6.25%, 7/15/08, FGIC .................. 7/02 at 102 2,109,000
-----------
24,530,927
-----------
GEORGIA--1.7%
AAA 7,000++ Atlanta, C.O.P., Pretrial Det. Ctr.,
6.25%, 12/01/02, MBIA ......................... N/A 7,555,590
-----------
HAWAII--1.8%
AAA 7,760 Honolulu, Cnty., G.O.,
Ser. A, 5.80%, 1/01/07, FGIC .................. No Opt. Call 8,233,438
-----------
ILLINOIS--13.4%
AAA 14,205 Chicago O'Hare Intl. Arprt. Rev.,
Ser. A, 6.25%, 1/01/08, MBIA .................. 1/05 at 102 15,296,370
Chicago Sch. Fin. Auth., G.O., Ser. A, FGIC,
AAA 13,000 6.25%, 6/01/07 ................................ 6/02 at 102 13,759,980
AAA 9,150 6.25%, 6/01/09 ................................ 6/02 at 102 9,654,257
Illinois Hlth. Fac. Auth. Rev., Ser. A,
AAA 11,000++ Alexian Med. Ctr. Proj., 6.35%, 1/01/02, MBIA . N/A 11,718,740
AAA 2,500 Carle Foundation, 6.75%, 1/01/10, FGIC ........ 1/00 at 102 2,572,700
AAA 10,170 Met. Pier & Expo. Auth., Ded. St. Tax Rev.,
Ser. A, Zero Coupon, 6/15/08, FGIC ............ No Opt. Call 6,538,191
-----------
59,540,238
-----------
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 ........................ 7/02 at 102 5,906,102
AAA 4,350 Ser. B, 6.25%, 7/01/08 ........................ 7/02 at 102 4,581,594
-----------
10,487,696
-----------
IOWA--1.1%
AAA 865 Iowa Fin. Auth., Sngl. Fam. Mtge. Rev.,
Ser. F, 6.35%, 7/01/09, AMBAC ................. 1/03 at 102 893,519
AAA 4,195 Muscatine, Elec. Rev., 5.00%, 1/01/08, FSA ...... 1/00 at 100 4,196,343
-----------
5,089,862
-----------
KENTUCKY--0.6%
AAA 3,890 Owensboro, Elec. Lt. & Pwr. Rev.,
Ser. B, Zero Coupon, 1/01/09, AMBAC ........... No Opt. Call 2,421,097
-----------
</TABLE>
See Botes to Financial Statements.
5
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
PRINCIPAL OPTION
AMOUNT CALL VALUE
RATING* (000) DESCRIPTION PROVISIONS+ (NOTE 1)
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Louisiana--1.2%
AAA $ 5,000++ Louisiana Pub. Fac. Auth. Hosp. Rev.,
Lafayette Gen. Med. Ctr. Proj.,
6.30%, 10/01/02, FSA .......................... N/A $ 5,374,800
-----------
MASSACHUSETTS--4.9%
AAA 4,465++ Chelsea, Sch. Proj. Loan, 6.00%, 6/15/04, AMBAC . N/A 4,830,326
Massachusetts Bay Trans. Auth. Rev., Ser. B, MBIA
AAA 200++ 6.00%, 3/01/03 ................................ N/A 214,088
AAA 5,800 6.00%, 3/01/10 ................................ 3/03 at 102 6,155,888
AAA 10,000 Massachusetts St. Hsg. Fin. Agcy., Hsg. Proj.,
Ser. A, 5.95%, 10/01/08, AMBAC ................ 4/03 at 102 10,531,100
-----------
21,731,402
-----------
MICHIGAN--4.6%
Lake Orion, Cmnty. Sch. Dist., AMBAC,
AAA 3,290++ 6.60%, 5/01/05 ................................ N/A 3,647,590
AAA 3,285++ 6.70%, 5/01/05 ................................ N/A 3,658,636
AAA 8,920++ Michigan St. Bldg. Auth. Rev., Fac. Proj.,
Ser. IIA, 6.25%, 10/01/02, AMBAC .............. N/A 9,603,450
AAA 3,400 Wyandotte, Elec. Rev., 6.25%, 10/01/08, MBIA .... No Opt. Call 3,728,916
-----------
20,638,592
-----------
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 .................. 2/01 at 102 7,700,228
-----------
NEVADA--3.9%
AAA 6,490++ Clark Cnty. Fld Ctrl., 6.30%, 11/01/01, AMBAC ... N/A 6,861,488
Washoe Cnty. Arpt. Auth. Rev., Ser. B, MBIA,
AAA 3,135 5.70%, 7/01/07 ................................ 7/03 at 102 3,274,695
AAA 2,645 5.75%, 7/01/08 ................................ 7/03 at 102 2,759,899
AAA 4,135++ Washoe Cnty. Sch. Dist., G.O., Ser. A,
6.20%, 10/01/02, AMBAC ........................ N/A 4,409,564
-----------
17,305,646
-----------
NEW JERSEY--13.0%
AAA 30,275 New Jersey Econ. Dev. Auth., Mkt. Trans. Fac. Rev.,
Ser. A, 5.80%, 7/01/08, MBIA .................. 7/04 at 102 32,071,216
AAA 24,495 New Jersey St. G.O., Ser. D,
6.00%, 2/15/09, MBIA .......................... 2/03 at 102 25,761,146
-----------
57,832,362
-----------
NEW YORK--8.2%
New York City G.O., Ser. E, MBIA,
AAA 5,000 6.125%, 8/01/06 ............................... No Opt. Call 5,408,550
AAA 15,500 6.20%, 8/01/07 ................................ No Opt. Call 16,885,235
AAA 5,000 Ser. G, 5.75%, 2/01/08 ........................ 2/06 at 101.5 5,275,700
New York St. Environ. Fac. Corp., P.C.R., Ser. D,
AAA 5,945 6.50%, 5/15/07 ................................ 11/04 at 102 6,579,331
AAA 2,245 6.50%, 11/15/07 ............................... 11/04 at 102 2,484,542
-----------
36,633,358
-----------
NORTH CAROLINA--8.6%
AAA 1,000++ Cumberland Cnty. C.O.P., Civic Ctr. Proj.,
Ser. A, 6.375%, 12/01/04, AMBAC ............... N/A 1,104,720
North Carolina Eastn. Mun. Pwr. Agcy. Sys. Rev.,
Ser. B,
AAA 13,500 6.125%, 1/01/09, FGIC ......................... No Opt. Call 14,693,670
AAA 5,000 7.00%, 1/01/08, CAPMAC ........................ No Opt. Call 5,696,950
AAA 14,675 7.25%, 1/01/07, CAPMAC ........................ No Opt. Call 16,815,789
-----------
38,311,129
-----------
NORTH DAKOTA--1.1%
AAA 4,450++ Bismark Hosp. Rev., St. Alexius Med. Ctr.,
6.90%, 5/01/01, AMBAC ......................... N/A 4,751,087
---------
</TABLE>
See Botes to Financial Statements.
6
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
PRINCIPAL OPTION
AMOUNT CALL VALUE
RATING* (000) DESCRIPTION PROVISIONS+ (NOTE 1)
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
OHIO--2.3%
AAA $ 2,410++ Cleveland, G.O., 6.40%, 11/15/04, MBIA .......... N/A $ 2,663,676
AAA 6,095 Hamilton City, Elec. Sys. Rev., Ser. A,
6.125%, 10/15/08, FGIC ........................ 10/02 at 102 6,482,947
AAA 1,000++ Ohio St. Bldg. Auth. Fac. Rev.,
Juvenile Correctional Proj.,
6.50%, 9/01/04, AMBAC ......................... N/A 1,108,130
-----------
10,254,753
-----------
PENNSYLVANIA--14.4%
AAA 4,000 Allegheny Cnty. Hosp. Dev. Auth. Rev., Magee
Women's Hosp.,
6.25%, 10/01/08, FGIC ......................... 10/02 at 102 4,245,160
Dauphin Cnty. Gen. Auth. Hosp. Rev.,
HAPSCO-Western Pennsylvania Hosp. Proj., MBIA,
AAA 5,000 6.25%, 7/01/08 ................................ 7/02 at 102 5,274,750
AAA 10,000 Ser. A, 6.25%, 7/01/08 ........................ 7/02 at 102 10,549,500
AAA 6,600 Erie Cnty. Hosp. Auth. Rev.,
St. Vincent Hlth. Ctr. Proj., Ser. A,
6.25%, 7/01/08, MBIA .......................... 7/02 at 102 6,962,670
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 3,758,895
AAA Pennsylvania Hsg. Fin. Agcy. Rev., Rental Hsg.,
Ser. C, 6.25%, 7/01/07, FNMA .................. 7/02 at 102 6,822,725
AAA 7,450++ Pennsylvania St., G.O., Ser. A,
6.50%, 11/01/01, FGIC ......................... N/A 7,942,967
AAA 4,945 Philadelphia, Gas Wks. Rev.,
5.25%, 7/01/08, FSA ........................... No Opt. Call 5,009,532
AAA 10,930++ Pittsburgh, G.O., Ser. D,
6.00%, 9/01/02, AMBAC ......................... N/A 11,672,912
AAA 1,665++ Scranton-Lackawanna Hlth. & Welfare Auth. Rev.,
6.90%, 1/01/00, MBIA .......................... N/A 1,723,958
-----------
63,963,069
-----------
TEXAS--24.8%
AAA 13,000++ Austin Pub. Impvt., G.O., 6.10%, 9/01/02, AMBAC . N/A 13,693,940
Austin Util. Sys. Rev.,
AAA 11,515 Ser. A, Zero Coupon, 11/15/08, MBIA ........... No Opt. Call 7,232,456
AAA 5,000 Ser. A, Zero Coupon, 11/15/09, AMBAC .......... No Opt. Call 2,970,450
AAA 5,000 Ser. A, Zero Coupon, 11/15/09, MBIA ........... No Opt. Call 2,970,450
AAA 7,000 6.25%, 11/15/08, AMBAC ........................ 11/02 at 102 7,473,060
AAA 5,000 6.625%, 11/15/08, AMBAC ....................... No Opt. Call 5,630,600
Baytown, G.O., AMBAC,
AAA 2,385++ 6.40%, 2/01/02 ................................ N/A 2,507,303
AAA 2,840 6.40%, 2/01/08 ................................ 2/02 at 100 2,963,824
AAA 9,930 Circle C Mun. Util. Dist. No. 3 Rev.,
6.50%, 11/15/09, FGIC ......................... 11/01 at 100 10,353,117
Coppell Indpt. Sch. Dist., MBIA,
AAA 1,430 6.10%, 8/15/09 ................................ ETM 1,551,750
AAA 2,495 6.10%, 8/15/09 ................................ 8/02 at 100 2,594,052
AAA 4,390 Houston Indpt. Sch. Dist.
Zero Coupon, 8/15/09, AMBAC ................... No Opt. Call 2,609,855
AAA 16,135 Houston Wtr. & Swr. Sys. Rev., Jr. Lien,
Ser. C, 6.25%, 12/01/09, MBIA ................. 12/02 at 102 17,229,760
AAA 6,000 San Antonio Elec. & Gas Rev., Ser. B,
Zero Coupon, 2/01/10, FGIC .................... No Opt. Call 3,490,740
Texas Mun. Pwr. Agcy. Rev., AMBAC,
AAA 15,000 Zero Coupon, 9/01/08 .......................... No Opt. Call 9,517,950
AAA 16,175 Zero Coupon, 9/01/09 .......................... No Opt. Call 9,709,044
AAA 5,900 Texas St. Pub. Fin. Auth. Bldg. Rev.,
Ser. B, 6.25%, 2/01/09, AMBAC ................. No Opt. Call 6,461,975
AAA 2,275 Ysleta Indpt. Sch. Dist. Rev.,
Zero Coupon, 8/15/08, PSFG .................... No Opt. Call 1,433,910
-----------
110,394,236
-----------
UTAH--1.2%
AAA 3,500 Intermountain Pwr. Agcy. Rev., Ser. B,
6.00%, 7/01/07, MBIA .......................... No Opt. Call 3,769,080
AAA 1,550 Salt Lake Cnty. Mun. Bldg. Auth. Lease Rev.,
Ser. A, 6.05%, 10/01/08, MBIA ................. 10/04 at 101 1,639,187
-----------
5,408,267
-----------
</TABLE>
See Botes to Financial Statements.
7
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
PRINCIPAL OPTION
AMOUNT CALL VALUE
RATING* (000) DESCRIPTION PROVISIONS+ (NOTE 1)
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
WASHINGTON--13.8%
AAA $ 12,850 King Cnty., G.O., Ser. D, 5.55%, 12/01/08, MBIA . 12/07 at 102 $ 13,466,414
Snohomish Cnty. Sch. Dist., G.O., MBIA,
AAA 2,235++ 6.10%, 12/01/03 ............................... N/A 2,422,382
AAA 1,765 6.10%, 12/01/08 ............................... 12/03 at 102 1,878,525
AAA 9,000 Washington St. Hlth. Care Fac. Auth. Rev.,
Virginia Mason Oblig. Group,
6.30%, 2/15/09, MBIA .......................... 2/03 at 102 9,535,050
Washington St. Pub. Pwr. Supply Sys. Rev.,
AAA 3,000 Nuclear Proj. No. 2, 5.55%, 7/01/10, FGIC ..... 7/03 at 102 3,099,480
AAA 13,635 Nuclear Proj. No. 2, Ser. A,
6.25%, 7/01/09, MBIA .......................... 7/02 at 102 14,482,143
AAA 5,550 Nuclear Proj. No. 3, Zero Coupon, 7/01/07, BIGI No Opt. Call 3,760,569
AAA 2,000 Nuclear Proj. No. 3, Zero Coupon, 7/01/08, BIGI No Opt. Call 1,294,280
AAA 11,000 Ser. A, 5.80%, 7/01/07, FSA ................... No Opt. Call 11,686,290
------------
61,625,133
------------
WEST VIRGINIA--2.7%
AAA 11,600 West Virginia St. Pkwys. Econ. Dev. & Tourism Auth.,
5.70%, 5/15/09, FGIC .......................... 5/03 at 102 12,028,388
------------
TOTAL LONG-TERM INVESTMENTS (COST $598,822,334) . 645,314,463
------------
SHORT-TERM INVESTMENT**--0.2%
A-1+ 900 New York City Mun. Wtr. Fin. Auth. Rev.,
Ser. G, 3.40%, 7/01/99, FRDD (COST $900,000) .. 900,000
------------
TOTAL INVESTMENTS--145.1% (COST $599,722,334) ... 646,214,463
Other assets in excess of liabilities--1.1% .... 4,998,619
Liquidation value of preferred stock--(46.2)% ... (206,000,000)
------------
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS--100% $445,213,082
============
</TABLE>
- ---------------------
* 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 earlier 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.
+ Option call provisions: date (month/year) and price of the earliest optional
call or redemption. There may be other call provisions at varying prices at
later dates.
++ This bond is prerefunded. See glossary for definition.
- --------------------------------------------------------------------------------
THE FOLLOWING ABBREVIATIONS ARE USED IN PORTFOLIO DESCRIPTIONS:
AMBAC -- American Municipal Bond Assurance Corporation
BIGI -- Bond Investors Guaranty Insurance Company
CAPMAC -- Capital Markets Assurance Company
C.O.P. -- Certificate of Participation
ETM -- Escrowed to maturity
FHA -- Federal Housing Administration
FNMA -- Federal National Mortgage Association
FGIC -- Financial Guaranty Insurance Company
FRDD -- Floating Rate Daily Demand**
FSA -- Financial Security Assurance
G.O. -- General Obligation Bond
MBIA -- Municipal Bond Insurance Association
P.C.R. -- Pollution Control Revenue
PSFG -- Permanent School Fund Guaranty
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
8
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK INSURED
MUNICIPAL 2008 TERM TRUST INC.
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
ASSETS
Investments, at value (cost $599,722,334)
(Note 1) ............................................... $646,214,463
Cash ...................................................... 71,327
Interest receivable ....................................... 10,139,867
Receivable for investments sold ........................... 435,000
Other assets .............................................. 22,811
------------
.......................................................... 656,883,468
------------
LIABILITIES
Payable for investments purchased ......................... 5,080,666
Advisory fee payable (Note 2) ............................. 192,511
Dividends payable-preferred stock ......................... 169,636
Administration fee payable (Note 2) ....................... 55,003
Other accrued expenses .................................... 172,570
------------
.......................................................... 5,670,386
------------
NET INVESTMENT ASSETS ..................................... $651,213,082
============
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 ..................... 20,307,499
Accumulated net realized loss ........................... (307,403)
Net unrealized appreciation ............................. 46,492,129
------------
Net investment assets, June 30, 1999 .................... $651,213,082
============
Net assets applicable to common
shareholders .......................................... $445,213,082
============
Net asset value per common share:
($445,213,082 / 27,207,093 shares of
common stock issued and outstanding) .................... $16.36
======
- --------------------------------------------------------------------------------
THE BLACKROCK INSURED
MUNICIPAL 2008 TERM TRUST INC.
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Net Investment Income
Income
Interest and discount earned ............................ $18,483,668
-----------
Operating expenses
Investment advisory ..................................... 1,165,961
Administration .......................................... 333,132
Auction agent ........................................... 275,000
Custodian ............................................... 70,500
Reports to shareholders ................................. 57,500
Directors ............................................... 42,500
Audit ................................................... 20,000
Transfer agent .......................................... 14,000
Legal ................................................... 9,000
Miscellaneous ........................................... 54,038
-----------
Total expenses ........................................ 2,041,631
-----------
Net investment income ..................................... 16,442,037
-----------
REALIZED AND UNREALIZED LOSS ON
INVESTMENTS (Note 3)
Net realized loss on investments ........................ (1,614)
Net change in unrealized appreciation
on investments ........................................ (21,481,680)
-----------
Net loss on investments ................................. (21,483,294)
-----------
NET DECREASE IN NET INVESTMENT
ASSETS RESULTING FROM OPERATIONS .......................... $(5,041,257)
===========
See Notes to Financial Statements.
9
<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,
1999 1998
--------------- ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET INVESTMENT ASSETS
OPERATIONS:
Net investment income ............................................... $ 16,442,037 $ 32,566,277
Net realized gain (loss) on investments ................................ (1,614) 188,548
Net change in unrealized appreciation on investments ................... (21,481,680) 2,943,199
------------ ------------
Net increase (decrease) in net investment assets
resulting from operations ...................................... (5,041,257) 35,698,024
------------ ------------
DIVIDENDS AND DISTRIBUTIONS:
To common shareholders from net investment income ...................... (10,814,603) (21,629,248)
To common shareholders from net realized gain
on investments ....................................................... -- (142,426)
To preferred shareholders from net investment income ................... (3,167,330) (6,836,065)
To preferred shareholders from net realized gain
on investments ....................................................... -- (46,134)
------------ ------------
Total dividends and distributions ............................. (13,981,933) (28,653,873)
------------ ------------
Total increase (decrease) ................................. (19,023,190) 7,044,151
------------ ------------
NET INVESTMENT ASSETS
Beginning of period .................................................... 670,236,272 663,192,121
------------ ------------
End of period .......................................................... $651,213,082 $670,236,272
============ ============
</TABLE>
See Notes to Financial Statements.
10
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK INSURED MUNICIPAL 2008 TERM TRUST INC.
FINANCIAL HIGHLIGHTS (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Ended Year Ended December 31,
June 30, ------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE: 1999 1998 1997 1996 1995 1994
------- --------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of the period .............. $ 17.06 $ 16.80 $ 15.90 $ 16.08 $ 13.88 $ 16.23
-------- --------- -------- -------- --------- --------
Net investment income ............................... 0 .60 1.20 1.18 1.17 1.19 1.15
Net realized and unrealized gain (loss)
on investments ..................................... (0.79) 0.11 0.78 (0.27) 2.21 (2.39)
-------- --------- -------- -------- --------- --------
Net increase (decrease) from investment operations .... (0.19) 1.31 1.96 0.90 3.40 (1.24)
-------- --------- -------- -------- --------- --------
Dividends and distributions:
Dividends from net investment income to:
Common shareholders ............................... (0.40) (0.80) (0.79) (0.79) (0.83) (0.88)
Preferred shareholders ............................ (0.11) (0.25) (0.27) (0.25) (0.28) (0.23)
Distributions from net realized gain on
investments to:
Common shareholders ............................... -- -- -- (0.03) (0.06) --
Preferred shareholders ............................ -- -- -- (0.01) (0.02) --
Distributions in excess of net realized
gain on
investments to:
Common shareholders ............................... -- ** ** ** (0.01) --
-------- --------- -------- -------- --------- --------
Total dividends and distributions ..................... (0.51) (1.05) (1.06) (1.08) (1.20) (1.11)
-------- --------- -------- -------- --------- --------
Net asset value, end of period* ....................... $ 16.36 $ 17.06 $ 16.80 $ 15.90 $ 16.08 $ 13.88
======== ========= ======== ======== ========= ========
Market value, end of period* .......................... $ 15.38 $ 16.13 $ 15.25 $ 14.50 $ 13.50 $ 12.25
======== ========= ======== ======== ========= ========
TOTAL INVESTMENT RETURN+ .............................. (2.21%) 11.21% 10.97% 13.56% 17.64% (13.71%)
======== ========= ======== ======== ========= ========
RATIOS TO AVERAGE NET ASSETS OF
COMMONSHAREHOLDERS:++
Expenses .............................................. 0.89%+++ 0.88% 0.92% 0.95% 0.95% 1.02%
Net investment income before preferred
stock dividends ..................................... 7.20%+++ 7.10% 7.19% 7.32% 7.74% 7.80%
Preferred stock dividends 1.39%+++ 1.49% 1.03% 1.64% 1.97% 1.55%
Net investment income available to common
shareholders ........................................ 5.81%+++ 5.61% 5.56% 5.68% 5.77% 6.25%
SUPPLEMENTAL DATA:
Average net assets of common shareholders
(in thousands) $460,219 $458,993 $444,895 $434,692 $417,017 $400,555
Portfolio turnover .................................... 0% 0% 11% 8% 27% 64%
Net assets of common shareholders,
end of period (in thousands) ........................ $445,213 $464,236 $457,192 $432,609 $437,470 $377,679
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# $ 79,031 $ 81,339 $ 80,484 $ 77,501 $ 78,091 $141,670
</TABLE>
- ----------
* Net asset value and market value are published in Barron's each Saturday,
The New York Times and The Wall Street Journal each Monday.
** Actual amount paid to common shareholders was $0.005235 , $0.004814, and
$0.00271 for the years ended December 31, 1998, 1997, and 1996,
respectively. Actual amount paid to preferred shareholders was $.0.001696,
$0.00154, $0.00084 and $0.002929 per common share for the years ended
December 31, 1998, 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 reported. 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 returns for periods of less than one year are not annualized.
++ Ratios are calculated on the basis of income and expenses applicable to
both the common and preferred stock, relative to the average net assets of
common shareholders.
+++ 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
orga- nized 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 carry forwards 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., which is 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 and sales of investments, other than short-term investments, for
the period ended June 30, 1999, aggregated $6,236,992 and $1,609,440,
respectively. The federal income tax basis of the Trust's investments at June
30, 1999, was $600,028,117, and accordingly, net unrealized appreciation was
$46,186,346 (gross unrealized appreciation--$46,235,845, gross unrealized
depreciation--$49,499).
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, 1999, the
Adviser owned 7,093 shares. As of June 30, 1999, 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 Market 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 2.50% to 4.01%
during the period ended June 30, 1999.
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, 1999, the Board of Directors of the Trust declared a
dividend from undistributed earnings of $0.06625 per common share payable July
30, 1999 to shareholders of record on July 15, 1999.
For the period July 1, 1999 to July 31, 1999 dividends declared on
Preferred Shares totalled $551,456 in aggregate for the four outstanding
Preferred Share series.
13
<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
reinvested by State Street Bank and Trust Company (the "Plan Agent") in Trust
shares pursuant to the Plan. Shareholders who do not participate in the Plan
will receive all distributions in cash paid by check in United States dollars
mailed directly to the shareholders of record (or if the shares are held in
street or other nominee name, then to the nominee) by the transfer agent, as
dividend disbursing agent.
The Plan Agent serves as agent for the shareholders in administering the
Plan. After the Trust declares a dividend or determines to make a capital gain
distribution, the Plan Agent will, as agent for the participants, receive the
cash payment and use it to buy Trust shares in the open market on the New York
Stock Exchange or elsewhere for the participants' accounts. The Trust will not
issue any new shares under the Plan.
Participants in the Plan may withdraw from the Plan upon written notice to
the Plan Agent and will receive certificates for whole Trust shares and a cash
payment for any fraction of a Trust share.
The Plan Agent's fees for the handling of the reinvestment of dividends and
distributions will be paid by the Trust. However, each participant will pay a
pro rata share of brokerage commissions incurred with respect to the Plan
Agent's open market purchases in connection with the reinvestment of dividends
and distributions. The automatic reinvestment of dividends and distributions
will not relieve participants of any federal income tax that may be payable on
such dividends or distributions.
The Trust reserves the right to amend or terminate the Plan as applied to
any dividend or distribution paid subsequent to written notice of the change
sent to all shareholders of the Trust at least 90 days before the record date
for the dividend or distribution. The Plan also may be amended or terminated by
the Plan Agent upon at least 90 days' written notice to all shareholders of the
Trust. All correspondence concerning the Plan should be directed to the Plan
Agent at (800) 699-1BFM. The address is on the front of this report.
14
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK INSURED MUNICIPAL 2008 TERM TRUST INC.
ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
YEAR 2000 READINESS DISCLOSURE. The Trust is currently in the process of
evaluating its information technology infrastructure for Year 2000 compliance.
Substantially all of the Trust's information systems are supplied by the
Adviser. The Adviser has advised the Trust that it is currently evaluating
whether such systems are year 2000 compliant and that it expects to incur costs
of up to approximately five hundred thousand dollars to complete such evaluation
and to make any modifications to its systems as may be necessary to achieve Year
2000 compliance. The Adviser has advised the Trust that it has fully tested its
systems for Year 2000 compliance. The Trust may be required to bear a portion of
such cost incurred by the Adviser in this regard. The Adviser has advised the
Trust that it does not anticipate any material disruption in the operations of
the Trust as a result of any failure by the Adviser to achieve Year 2000
compliance. There can be no assurance that the costs will not exceed the amount
referred to above or that the Trust will not experience a disruption in
operations.
The Adviser has advised the Trust that it is in the process of evaluating
the Year 2000 compliance of various suppliers of the Adviser and the Trust. The
Adviser has advised the Trust that it has communicated with such suppliers to
determine their Year 2000 compliance status and the extent to which the Adviser
or the Trust could be affected by any supplier's Year 2000 compliance issues. To
date, the Adviser has received responses from all such suppliers with respect to
their Year 2000 compliance, and there can be no assurance that the systems of
such suppliers, who are beyond the Trust's control, will be Year 2000 compliant.
In the event that any of the Trust's significant suppliers do not successfully
and timely achieve Year 2000 compliance, the Trust's business or operations
could be adversely affected. The Adviser has advised the Trust that it is in the
process of preparing a contingency plan for Year 2000 compliance by its
suppliers. There can be no assurance that such contingency plan will be
successful in preventing a disruption of the Trust's operations.
The Trust is designating this disclosure as its Year 2000 readiness
disclosure for all purposes under the Year 2000 Information and Readiness
Disclosure Act and the foregoing information shall constitute a Year 2000
statement for purposes of that Act.
ANNUAL MEETING OF TRUST SHAREHOLDERS. There have been no material changes
in the Trust's investment objectives or policies that have not been approved by
the shareholders or to its charter or by-laws or in the principal risk factors
associated with investment in the Trust. There have been no changes in the
persons who are primarily responsible for the day-to-day management of the
Trust's Portfolio.
The Annual Meeting of Trust Shareholders was held May 19, 1999 to vote on
the following matters:
(1) To elect three Directors as follows:
Director Class Term Expiring
-------- ------ ----- -------
Andrew F. Brimmer III 3 years 2002
Kent Dixon III 3 years 2002
Laurence D. Fink III 3 years 2002
Directors whose term of office continues beyond this meeting are Richard E.
Cavanagh, James Grosfeld, Frank J. Fabozzi, James Clayburn La Force, Jr.,
Walter F. Mondale and Ralph L. Schlosstein.
(2) To ratify the selection of Deloitte & Touche LLP as independent public
accountants of the Trust for the fiscal year ending December 31, 1999.
Shareholders elected the three Directors and ratified the selection of
Deloitte & Touche LLP. The results of the voting was as follows:
Votes for Votes Against Abstentions
-------- ------------- -----------
Andrew F. Brimmer .......... 25,113,880 -- 401,173
Kent Dixon ................. 25,144,762 -- 370,291
Laurence D. Fink .......... 25,157,836 -- 357,217
Ratification of
Deloitte & Touche LLP ..... 25,130,383 149,306 235,364
15
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK INSURED MUNICIPAL 2008 TERM TRUST INC.
INVESTMENT SUMMARY
- --------------------------------------------------------------------------------
THE TRUST'S INVESTMENT OBJECTIVE:
The BlackRock Insured Municipal 2008 Term 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") is an SEC-registered
investment adviser. BlackRock and its affiliates currently manage over $141
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 $25 billion family of open-end funds. BlackRock manages
over 470 accounts, domiciled in the United States and overseas.
WHAT CAN THE TRUST INVEST IN?
The Trust intends to invest at least 80% of its total assets in 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 Adviser will implement a conservative strategy that will seek
to closely match the maturity of the assets of the portfolio with the future
return of the initial investment at the end of 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 and retaining a small portion of its income each year.
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 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.
16
<PAGE>
LEVERAGE CONSIDERATIONS IN A TERM TRUST
Under current market conditions, leverage increases the income earned by the
Trust. The Trust employs leverage primarily through the issuance of preferred
stock. Leverage permits the Trust to borrow money at short-term rates and
reinvest that money in longer-term assets which typically offer higher interest
rates. The difference between the cost of the borrowed funds and the income
earned on the proceeds that are invested in longer term assets is the benefit to
the Trust from leverage. 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.
17
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK INSURED MUNICIPAL 2008 TERM TRUST INC.
GLOSSARY
- --------------------------------------------------------------------------------
CLOSED-END FUND:
Investment vehicle which initially offers a fixed number of shares and trades on
a stock exchange. The fund invests in a portfolio of securities in accordance
with its stated investment objectives and policies. Discount: When a fund's net
asset value is greater than its stock price the fund is said to be trading at a
discount.
DIVIDEND:
Income generated by securities in a portfolio and distributed to shareholders
after the deduction of expenses. This Trust declares and pays dividends 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.
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, The New
York Times and The Wall Street Journal on Monday.
PREMIUM:
When a fund's stock price is greater than its net asset value, the fund is said
to be trading at a premium.
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.
18
<PAGE>
- -------------------------------------------------------------------------------
BLACKROCK FINANCIAL MANAGEMENT, INC.
SUMMARY OF CLOSED-END FUNDS
- --------------------------------------------------------------------------------
TAXABLE TRUSTS
- --------------------------------------------------------------------------------
Stock Maturity
PERPETUAL TRUSTS Symbol Date
------ ---------
The BlackRock Income Trust Inc. BKT N/A
The BlackRock North American Government
Income Trust Inc. BNA N/A
The BlackRock High Yield Trust BHY N/A
Term Trusts
The BlackRock 1999 Term Trust Inc. BNN 12/99
The BlackRock Target Term Trust Inc. BTT 12/00
The BlackRock 2001 Term Trust Inc. BTM 06/01
The BlackRock Strategic Term Trust Inc. BGT 12/02
The BlackRock Investment Quality Term Trust Inc. BQT 12/04
The BlackRock Advantage Term Trust Inc. BAT 12/05
The BlackRock Broad Investment Grade
2009 Term Trust Inc. BCT 12/09
TAX-EXEMPT TRUSTS
- --------------------------------------------------------------------------------
Stock Maturity
PERPETUAL TRUSTS Symbol Date
------ ---------
The BlackRock Investment Quality
Municipal Trust Inc. BKN N/A
The BlackRock California Investment Quality
Municipal Trust Inc. RAA N/A
The BlackRock Florida Investment Quality
Municipal Trust RFA N/A
The BlackRock New Jersey Investment Quality
Municipal Trust Inc. RNJ N/A
The BlackRock New York Investment Quality
Municipal Trust Inc. RNY N/A
Term Trusts
The BlackRock Municipal Target Term Trust Inc. BMN 12/06
The BlackRock Insured Municipal 2008 Term Trust Inc. BRM 12/08
The BlackRock California Insured
Municipal 2008 Term Trust Inc. BFC 12/08
The BlackRock Florida Insured
Municipal 2008 Term Trust BRF 12/08
The BlackRock New York Insured
Municipal 2008 Term Trust Inc. BLN 12/08
The BlackRock Insured Municipal Term Trust Inc. BMT 12/10
IF YOU WOULD LIKE FURTHER INFORMATION PLEASE CALL BLACKROCK AT
(800) 227-7BFM (7236) OR CONSULT WITH YOUR FINANCIAL ADVISOR.
19
<PAGE>
BLACKROCK
DIRECTORS
Laurence D. Fink, Chairman
Andrew F. Brimmer
Richard E. Cavanagh
Kent Dixon
Frank J. Fabozzi
James 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 M. 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
Deutsche Bank
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, 1999 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) 543-6217
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.
- -----------------
SEMI-ANNUAL REPORT
JUNE 30, 1999
