---------
The BlackRock
---------
Insured Municipal
2008 Term
Trust Inc.
=====================================
Annual Report
December 31, 1998
[GRAPHIC OMITTED]
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK INSURED MUNICIPAL 2008 TERM TRUST INC.
ANNUAL REPORT TO SHAREHOLDERS
REPORT OF INVESTMENT ADVISER
- --------------------------------------------------------------------------------
January 31, 1999
Dear Shareholders:
Over the past twelve months, U.S. Treasury securities have experienced a
strong rally, as investors sought a safe haven from global market turmoil and
the Federal Reserve continued to cut interest rates. Other segments of the fixed
income market have lagged behind Treasuries, but still produced generally
positive returns since our last report. We anticipate that the Federal Reserve
will remain prepared to combat any signs of a credit crunch through interest
rate cuts, and given the unstable economic situation in Brazil, the Fed likely
will retain an easing bias.
Despite previous worries of a second half slowdown in 1998, the U.S.
economy continues to expand rapidly, supported by strong consumer spending. This
momentum, however, may not continue as briskly into the new year, based on
weaker corporate profits and a loosening of the labor markets. Already, major
corporations have warned of slower profit growth and announced major layoffs.
This report contains detailed market and portfolio strategy by your
Trust's managers in addition to the Trust's audited financial statements and a
detailed list of the portfolio's holdings. We thank you for your continued
investment in the Trust and look forward to serving your investment needs in the
future.
Sincerely,
/s/ Laurence D. Fink /s/ Ralph L. Schlosstein
Laurence D. Fink Ralph L. Schlosstein
Chairman President
1
<PAGE>
January 31, 1999
Dear Shareholder:
We are pleased to present the annual report for The BlackRock Insured
Municipal 2008 Term Trust Inc. ("the Trust") for the year ended December 31,
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 past year:
-------------------------------------------------
12/31/98 12/31/97 Change High Low
- --------------------------------------------------------------------------------
Stock Price $16.125 $15.25 5.74% $16.375 $14.875
- --------------------------------------------------------------------------------
Net Asset Value (NAV) $17.06 $16.80 1.55% $17.29 $16.56
- --------------------------------------------------------------------------------
The Fixed Income Markets
The first half of the Trust's fiscal year saw Treasury yields decline
towards historic lows. These lows were the result of budget surplus projections
as well as the Federal Reserve's decision to move from a tightening bias to a
neutral interest rate policy. The positive economic momentum throughout the
first half of the fiscal year was strengthened by unseasonably warm weather that
led to increased consumer spending and job gains, which softened the negative
impact on trade from the Asian financial crisis.
The second half of the Trust's fiscal year witnessed virtually
unparalleled market turbulence. Although consumers continued their spending
domestically, demand for U.S. goods abroad faltered, as the strong dollar and
overseas weakness, especially in Asia, drove prices for U.S. goods higher
relative to foreign goods.
Toward year-end, U.S. GDP growth rebounded; however, the instability in
global financial markets began to rattle investor confidence. The devaluation of
the Russian ruble and the fear of a possible devaluation of the Brazilian
currency caused a flight-to-quality to U.S. Treasuries. Corporate yield spreads
across all credits to Treasuries widened dramatically as a result of the
sell-off. This dramatic shift of investor sentiment culminated in the near
collapse of a prominent hedge fund.
The Treasury market rally pushed Treasury yields to historic levels below
the 5% barrier. In response to the financial fragility in the third quarter of
1998, the Fed eased interest rates on September 29, 1998 by 25bps and again on
October 15, in an unusual between-meetings move. On November 17, the Fed eased
interest rates again by 25bps.
2
<PAGE>
These rate cuts seem to have had their desired effect on the US
economy--which finished the year with a 3.5% growth rate. Growth in 1999,
however, may decrease significantly and further easing of interest rates by the
Federal Reserve is possible as the Western economies will need to provide
support for the global economy. With economic growth and labor markets expected
to soften during the first half of 1999, we expect inflation to remain under
control.
Rapidly declining Treasury yields and significant supply of new municipal
issues were responsible for the underperformance of municipals versus treasuries
in 1998. However, on a historical basis, municipals remain attractive,
particularly those with longer maturities. Also retail investors, who have been
focused on the equity markets have begun to migrate back to the municipal
market. These factors may enable municipals to outperform Treasuries in the
coming year.
The Trust's Portfolio and Investment Strategy
The Trust's portfolio is actively managed to diversify exposure across
various sectors, issuers, revenue sources and types of bonds. 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. Portfolio trading activity was very low during 1998, as a
majority of the bonds in the portfolio are trading at prices which, if sold,
would result in a taxable capital gain. Additionally, as these bonds were
purchased in higher interest rate environments. If they were sold, the Trust
would be forced to reinvest the proceeds in lower yielding securities. These
factors led us to decide that the most prudent investment strategy for 1998 was
to maintain the current portfolio structure.
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. The Trust has
experienced favorable short-term municipal rates over the past year, providing
for profitable leverage.
The following chart compares the Trust's current and December 31, 1997
asset composition:
-------------------------------------------------------------------------
The BlackRock Insured Municipal 2008 Term Trust Inc.
-------------------------------------------------------------------------
Sector December 31, 1998 December 31, 1997
-------------------------------------------------------------------------
County, City & State 26% 25%
-------------------------------------------------------------------------
Utility/Power 22% 22%
-------------------------------------------------------------------------
Hospital 14% 15%
-------------------------------------------------------------------------
Education 6% 6%
-------------------------------------------------------------------------
Lease Revenue 6% 6%
-------------------------------------------------------------------------
Tax Revenue 6% 6%
-------------------------------------------------------------------------
Transportation 6% 6%
-------------------------------------------------------------------------
Water & Sewer 6% 6%
-------------------------------------------------------------------------
Special District 4% 5%
-------------------------------------------------------------------------
Housing 3% 3%
-------------------------------------------------------------------------
Industrial & Pollution Control 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/ 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 12/31/98: $16.125
- --------------------------------------------------------------------------------
Net Asset Value as of 12/31/98: $17.06
- --------------------------------------------------------------------------------
Yield on Closing Stock Price as of 12/31/98: ($16.125)(1) 4.93%
- --------------------------------------------------------------------------------
Current Monthly Distribution per Common Share(2): $0.06625
- --------------------------------------------------------------------------------
Current Annualized Distribution per Common Share(2): $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>
- --------------------------------------------------------------------------------
The BlackRock Insured Municipal 2008 Term Trust Inc.
Portfolio of Investments December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Option
Principal Call
Rating* Amount Provisions++ Value
(Unaudited) (000) Description (Unaudited) (Note 1)
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <C> <S> <C> <C>
LONG-TERM INVESTMENTS -- 142.3%
Alabama -- 0.3%
AAA $ 1,905 Mobile Impvt. Wt., Zero Coupon, 8/15/08, MBIA................................... 8/02 at 71.587 $ 1,175,880
------------
Arizona -- 0.6%
AAA 4,000 Chandler, G.O., Zero Coupon, 7/01/08, FGIC...................................... No Opt. Call 2,674,160
------------
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 2,057,662
------------
Colorado -- 10.6%
AAA 2,000 E-470 Pub. Hwy. Auth. Co. Rev., Ser. B, Zero Coupon, 9/01/11, MBIA.............. No Opt. Call 1,116,860
AAA 30,205 Jefferson Cnty., Sch. Dist. No. R-001, G.O., 6.25%, 12/15/02+, AMBAC............ N/A 33,208,283
AAA 13,285 Univ. of Colorado, Hosp. Auth. Rev., Ser. A, 6.25%, 11/15/02+, AMBAC............ N/A 14,697,196
------------
49,022,339
------------
District of Columbia -- 5.4%
Dist. of Columbia, G.O., MBIA,
AAA 17,950 Ser. B, 6.30%, 6/01/02+.................................................... N/A 19,654,532
AAA 115 Ser. E, 5.875%, 6/01/03+................................................... N/A 125,797
AAA 2,955 Ser. E, 5.875%, 6/01/08.................................................... 6/03 at 102 3,169,001
AAA 2,000 Dist. of Columbia, Hosp. Rev., Children's Hosp., Ser. A, 6.25%, 7/15/08, FGIC... 7/02 at 102 2,155,240
------------
25,104,570
------------
Georgia -- 1.7%
AAA 7,000 Atlanta, C.O.P., Pretrial Det. Ctr., MBIA, 6.25%, 12/01/02+..................... N/A 7,764,190
------------
Hawaii -- 1.9%
AAA 7,760 Honolulu, Cnty., G.O., Ser. A, 5.80%, 1/01/07, FGIC............................. No Opt. Call 8,585,276
------------
Illinois -- 13.1%
AAA 14,205 Chicago O'Hare Intl. Arprt. Rev., G.O., Ser. A, 6.25%, 1/01/08, MBIA............ 1/05 at 102 15,871,673
Chicago, Sch. Fin. Auth., G.O., Ser. A, FGIC,
AAA 13,000 6.25%, 6/01/07............................................................. 6/02 at 102 14,079,260
AAA 9,150 6.25%, 6/01/09............................................................. 6/02 at 102 9,915,672
Illinois Hlth. Fac. Auth. Rev.,
AAA 11,000 Alexian Med. Ctr. Proj., Ser. A, 6.35%, 1/01/08, MBIA...................... 1/02 at 102 11,786,500
AAA 2,500 Carle Foundation, Ser. A, 6.75%, 1/01/10, FGIC............................. 1/00 at 102 2,611,400
AAA 10,170 Met. Pier & Expo. Auth., Ded. St. Tax Rev., Ser. A, Zero Coupon, 6/15/08, FGIC.. No Opt. Call 6,774,135
------------
61,038,640
------------
Indiana -- 2.3%
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 6,051,976
AAA 4,350 Ser. B, 6.25%, 7/01/08..................................................... 7/02 at 102 4,698,348
------------
10,750,324
------------
Iowa -- 1.2%
AAA 1,300 Iowa Fin. Auth., Sngl. Fam. Mtge. Rev., Ser. F, 6.35%, 7/01/09, AMBAC........... 1/03 at 102 1,371,968
AAA 4,195 Muscatine, Elec. Rev., 5.00%, 1/01/08, FSA...................................... 1/99 at 100 4,209,305
------------
5,581,273
------------
Kentucky -- 0.5%
AAA 3,890 Owensboro, Elec. Lt. & Pwr. Rev., Ser. B, Zero Coupon, 1/01/09, AMBAC........... No Opt. Call 2,513,951
------------
</TABLE>
See Notes to Financial Statements.
5
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Option
Principal Call
Rating* Amount Provisions++ Value
(Unaudited) (000) Description (Unaudited) (Note 1)
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <C> <S> <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 $ 5,508,850
------------
Massachusetts -- 4.8%
AAA 4,465 Chelsea, Sch. Proj. Loan, 6.00%, 6/15/04+, AMBAC................................ N/A 4,992,986
AAA 6,000 Massachusetts Bay Trans. Auth. Rev., Ser. B, 6.00%, 3/01/10, MBIA............... 3/03 at 102 6,469,680
AAA 10,000 Massachusetts St. Hsg. Fin. Agcy., Hsg. Proj., Ser. A, 5.95%, 10/01/08, AMBAC... 4/03 at 102 10,709,500
------------
22,172,166
------------
Michigan -- 4.6%
Lake Orion, Cmnty. Sch. Dist., AMBAC,
AAA 3,290 6.60%, 5/01/05+............................................................ N/A 3,798,831
AAA 3,285 6.70%, 5/01/05+............................................................ N/A 3,811,290
AAA 8,920 Michigan St. Bldg. Auth. Rev., Fac. Proj., Ser. IIA, 6.25%, 10/01/02+, AMBAC.... N/A 9,861,863
AAA 3,400 Wyandotte, Elec. Rev., 6.25%, 10/01/08, MBIA.................................... No Opt. Call 3,912,516
------------
21,384,500
------------
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 7,828,412
------------
Nevada -- 3.8%
AAA 6,490 Clark Cnty., Fld. Ctrl., 6.30%, 11/01/01+, AMBAC................................ N/A 7,005,046
Washoe Cnty., Arpt. Auth., Ser. B, MBIA,
AAA 3,135 5.70%, 7/01/07............................................................. 7/03 at 102 3,377,586
AAA 2,645 5.75%, 7/01/08............................................................. 7/03 at 102 2,848,242
AAA 4,135 Washoe Cnty., Sch. Dist., G.O., Ser. A, 6.20%, 10/01/02+, AMBAC................. N/A 4,520,837
------------
17,751,711
------------
New Jersey -- 12.9%
AAA 30,275 New Jersey Econ. Dev. Auth., Mkt. Trans. Fac. Rev., Ser. A, 5.80%, 7/01/08, MBIA 7/04 at 102 33,274,344
AAA 24,495 New Jersey St. G.O., Ser. D, 6.00%, 2/15/09, MBIA............................... 2/03 at 102 26,456,315
------------
59,730,659
------------
New York -- 8.2%
New York City G.O., Ser. E, MBIA,
AAA 5,000 6.125%, 8/01/06............................................................ No Opt. Call 5,625,950
AAA 15,500 6.20%, 8/01/07............................................................. No Opt. Call 17,679,765
AAA 5,000 Ser. G, 5.75%, 2/01/08..................................................... 2/06 at 101.50 5,538,750
New York St. Environ. Fac. Corp., P.C.R., Ser. D,
AAA 5,945 6.50%, 5/15/07............................................................. 11/04 at 102 6,814,337
AAA 2,245 6.50%, 11/15/07............................................................ 11/04 at 102 2,573,287
------------
38,232,089
------------
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 1,145,250
------------
North Carolina Eastn. Mun. Pwr. Agcy. Rev., Ser. B,
AAA 13,500 6.125%, 1/01/09, FGIC...................................................... No Opt. Call 15,407,280
AAA 5,000 7.00%, 1/01/08, CAPMAC..................................................... No Opt. Call 5,978,800
AAA 14,675 7.25%, 1/01/07, CAPMAC..................................................... No Opt. Call 17,589,602
------------
40,120,932
------------
North Dakota -- 1.0%
AAA 4,450 Bismark Hosp. Rev., St. Alexius Med. Ctr., 6.90%, 5/01/01+, AMBAC............... N/A 4,850,367
------------
Ohio -- 2.3%
AAA 2,410 Cleveland, G.O., 6.40%, 11/15/04+, MBIA......................................... N/A 2,761,137
AAA 6,095 Hamilton City, Elec. Sys. Rev., Ser. A, 6.125%, 10/15/08, FGIC.................. 10/02 at 102 6,602,165
AAA 1,000 Ohio St. Bldg. Auth. Fac. Rev., Juvenile Correctional Proj., 6.50%,
10/01/09, AMBAC............................................................ 9/04 at 102 1,133,890
------------
10,497,192
------------
</TABLE>
See Notes to Financial Statements.
6
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Option
Principal Call
Rating* Amount Provisions++ Value
(Unaudited) (000) Description (Unaudited) (Note 1)
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <C> <S> <C> <C>
Pennsylvania -- 13.0%
AAA $ 4,000 Allegheny Cnty. Hosp. Dev. Auth. Rev., Magee Women's Hosp., 6.25%,
10/01/08, FGIC............................................................. 10/02 at 102 $ 4,362,080
Dauphin Cnty. Gen. Auth. Hosp. Rev., HAPSCO-Western Pennsylvania
Hosp. Proj., MBIA,
AAA 10,000 6.25%, Ser. A, 7/01/08..................................................... 7/02 at 102 10,821,100
AAA 5,000 6.25%, 7/01/08............................................................. 7/02 at 102 5,410,550
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 7,141,926
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 3,911,635
AAA 6,500 Pennsylvania Hsg. Fin. Agcy. Rev., Rental Hsg., Ser. C, 6.25%, 7/01/07, FNMA.... 7/02 at 102 6,909,370
AAA 7,450 Pennsylvania St., G.O., Ser. A, 6.50%, 11/01/01+, FGIC.......................... N/A 8,114,391
AAA 10,930 Pittsburgh, G.O., Ser. D, 6.00%, 9/01/02+, AMBAC................................ N/A 11,952,502
AAA 1,665 Scranton-Lackawanna Hlth. & Welfare Auth. Rev., 6.90%, 1/01/00+, MBIA........... N/A 1,754,077
------------
60,377,631
------------
Texas -- 24.6%
AAA 13,000 Austin, Pub. Impvt., G.O., 6.10%, 9/01/02+, AMBAC............................... N/A 14,033,110
Austin, Util. Sys. Rev.,
AAA 11,515 Ser. A, Zero Coupon, 11/15/08, MBIA........................................ No Opt. Call 7,534,034
AAA 5,000 Ser. A, Zero Coupon, 11/15/09, AMBAC....................................... No Opt. Call 3,100,750
AAA 5,000 Ser. A, Zero Coupon, 11/15/09, MBIA........................................ No Opt. Call 3,100,750
AAA 7,000 6.25%, 11/15/08, AMBAC..................................................... 11/02 at 102 7,630,280
AAA 5,000 6.625%, 11/15/08, AMBAC.................................................... No Opt. Call 5,950,600
AAA 5,225 Baytown, G.O., 6.40%, 2/01/08, AMBAC............................................ 2/02 at 100 5,561,908
AAA 9,930 Circle C Mun. Util. Dist. No. 3 Rev., 6.50%, 11/15/09, FGIC..................... 11/01 at 100 10,557,775
Coppell Indpt. Sch. Dist., MBIA,
AAA 1,430 6.10%, 8/15/09............................................................. No Opt. Call 1,633,746
AAA 2,495 6.10%, 8/15/09............................................................. 8/02 at 100 2,646,072
AAA 4,390 Houston Indpt. Sch. Dist., Zero Coupon, 8/15/09, AMBAC.......................... No Opt. Call 2,743,970
AAA 16,135 Houston, Wtr. & Swr. Sys. Rev., Jr. Lien, Ser. C, 6.25%, 12/01/09, MBIA......... 12/02 at 102 17,600,058
AAA 6,000 San Antonio Elec. & Gas Rev., Ser. B, Zero Coupon, 2/01/10, FGIC................ No Opt. Call 3,646,800
Texas Mun. Pwr. Agcy. Rev., AMBAC,
AAA 15,000 Zero Coupon, 9/01/08....................................................... No Opt. Call 9,901,200
AAA 16,175 Zero Coupon, 9/01/09....................................................... No Opt. Call 10,121,992
AAA 5,900 Texas St. Pub. Fin. Auth. Bldg. Rev., Ser. B, 6.25%, 2/01/09, AMBAC............. No Opt. Call 6,835,150
AAA 2,275 Ysleta, Indpt. Sch. Dist. Rev., Zero Coupon, 8/15/08, PSFG...................... No Opt. Call 1,507,392
------------
114,105,587
------------
Utah -- 1.2%
AAA 3,500 Intermountain Pwr. Agcy. Rev. Ser. B, 6.00%, 7/01/07, MBIA...................... No Opt. Call 3,962,805
AAA 1,550 Salt Lake Cnty. Mun. Bldg. Auth. Lease Rev., Ser. A, 6.05%, 10/01/08, MBIA...... 10/04 at 101 1,706,643
------------
5,669,448
------------
Washington -- 13.7%
AAA 12,850 King Cnty. Ser. D, 5.55%, 12/01/08, MBIA........................................ 12/07 at 102 14,106,730
Snohomish Cnty. Sch. Dist., MBIA,
AAA 2,235 6.10%, 12/01/03+........................................................... N/A 2,494,707
AAA 1,765 6.10%, 12/01/08............................................................ 12/03 at 102 1,942,012
AAA 9,000 Washington St. Hlth. Fac. Auth. Rev., 6.30%, 2/15/09, MBIA...................... 2/03 at 102 9,800,010
Washington St. Pub. Pwr. Supply Sys. Rev.,
AAA 13,635 No. 2, Ser. A, 6.25%, 7/01/09, MBIA........................................ 7/02 at 102 14,708,483
AAA 5,550 No. 3, Zero Coupon, 7/01/07, BIG........................................... No Opt. Call 3,870,792
AAA 2,000 No. 3, Zero Coupon, 7/01/08, BIG........................................... No Opt. Call 1,342,060
AAA 3,000 5.55%, 7/01/10, FGIC....................................................... 7/03 at 102 3,174,600
AAA 11,000 5.80%, 7/01/07, FSA........................................................ No Opt. Call 12,256,640
------------
63,696,034
------------
</TABLE>
See Notes to Financial Statements.
7
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Option
Principal Call
Rating* Amount Provisions++ Value
(Unaudited) (000) Description (Unaudited) (Note 1)
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <C> <S> <C> <C>
West Virginia -- 2.7%
AAA $ 11,600 West Virginia St. Parkways Econ. Dev. & Tourism Auth., 5.70%, 5/15/09, FGIC..... 5/03 at 102 $ 12,402,372
------------
Total Investments -- 142.3% (cost $592,622,406)................................. 660,596,215
Other assets in excess of liabilities -- 2.1%................................... 9,640,057
Liquidation value of preferred stock -- (44.4%)................................. (206,000,000)
------------
Net Assets Applicable to Common Shareholders -- 100%............................ $464,236,272
============
</TABLE>
- ----------
* Using the higher of Standard and Poor's, Moody's or Fitch's rating.
+ 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:
AMBAC -- American Municipal Bond Assurance Corporation
BIG -- Bond Investors Guaranty Insurance Company
CAPMAC -- Capital Markets Assurance Company
C.O.P. -- Certificate of Participation
FGIC -- Financial Guaranty Insurance Company
FNMA -- Federal National Mortgage Association
FSA -- Financial Security Assurance
G.O. -- General Obligation Bond
MBIA -- Municipal Bond Insurance Association
P.C.R. -- Pollution Contol 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
December 31, 1998
- --------------------------------------------------------------------------------
Assets
Investments, at value (cost $592,622,406)
(Note 1) .............................................. $ 660,596,215
Interest receivable ...................................... 10,130,223
Receivable from investments sold ......................... 425,000
Other Assets ............................................. 22,811
-------------
671,174,249
-------------
Liabilities
Due to custodian ......................................... 263,645
Investment advisory fee payable (Note 2) ................. 198,154
Dividends payable--preferred stock ....................... 177,492
Administration fee payable (Note 2) ...................... 56,615
Other accrued expenses ................................... 242,071
-------------
937,977
-------------
Net Investment Assets .................................... $ 670,236,272
=============
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 .................... 17,847,395
Accumulated net realized loss .......................... (305,789)
Net unrealized appreciation ............................ 67,973,809
-------------
Net investment assets, December 31, 1998 ............... $ 670,236,272
=============
Net assets applicable to common
shareholders ......................................... $ 464,236,272
=============
Net asset value per common share:
($464,236,272 / 27,207,093 shares of
common stock issued and outstanding) ................... $17.06
======
- --------------------------------------------------------------------------------
The BlackRock Insured
Municipal 2008 Term Trust Inc.
Statement of Operations
Year Ended December 31, 1998
- --------------------------------------------------------------------------------
Net Investment Income
Income
Interest and discount earned ................................ $36,590,184
-----------
Expenses
Investment advisory ......................................... 2,329,805
Administration .............................................. 665,659
Auction agent ............................................... 558,000
Custodian ................................................... 146,000
Directors ................................................... 85,500
Reports to shareholders ..................................... 66,500
Audit ....................................................... 51,000
Transfer agent .............................................. 27,000
Legal ....................................................... 18,000
Miscellaneous ............................................... 76,443
-----------
Total expenses ............................................ 4,023,907
-----------
Net investment income ......................................... 32,566,277
-----------
Realized and Unrealized Gain on Investments (Note 3)
Net realized gain on investments ............................ 188,548
Net change in unrealized appreciation
on investments ............................................ 2,943,199
-----------
Net gain on investments ..................................... 3,131,747
-----------
Net Increase in Net Investment
Assets Resulting from Operations ............................ $35,698,024
===========
See Notes to Financial Statements.
9
<PAGE>
- --------------------------------------------------------------------------------
The BlackRock Insured Municipal 2008 Term Trust Inc.
Statements of Changes in Net Investment Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended December 31,
------------------------------
1998 1997
------------- -------------
<S> <C> <C>
Increase in Net Investment Assets
Operations:
Net investment income .............................................. $ 32,566,277 $ 31,973,585
Net realized gain on investments ...................................... 188,548 172,902
Net change in unrealized appreciation on investments .................. 2,943,199 21,311,862
------------- -------------
Net increase in net investment assets resulting from operations ....... 35,698,024 53,458,349
------------- -------------
Dividends and distributions:
To common shareholders from net investment income ..................... (21,629,248) (21,498,340)
To common shareholders in excess of net realized gain on investments .. (142,426) (130,975)
To preferred shareholders from net investment income .................. (6,836,065) (7,203,821)
To preferred shareholders in excess of net realized gain on investments (46,134) (41,921)
------------- -------------
Total dividends and distributions ................................... (28,653,873) (28,875,057)
------------- -------------
Total increase .................................................. 7,044,151 24,583,292
------------- -------------
Net Investment Assets
Beginning of year ..................................................... 663,192,121 638,608,829
------------- -------------
End of year ........................................................... $ 670,236,272 $ 663,192,121
============= =============
</TABLE>
See Notes to Financial Statements.
10
<PAGE>
- --------------------------------------------------------------------------------
The BlackRock Insured Municipal 2008 Term Trust Inc.
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended December 31,
--------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE: 1998 1997 1996 1995 1994
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of the year ........................ $ 16.80 $ 15.90 $ 16.08 $ 13.88 $ 16.23
-------- -------- -------- -------- --------
Net investment income ....................................... 1.20 1.18 1.17 1.19 1.15
Net realized and unrealized gain (loss) on investments ...... 0.11 0.78 (0.27) 2.21 (2.39)
-------- -------- -------- -------- --------
Net increase (decrease) from investment operations ............ 1.31 1.96 0.90 3.40 (1.24)
-------- -------- -------- -------- --------
Dividends from net investment income to:
Preferred shareholders ...................................... (0.25) (0.27) (0.25) (0.28) (0.23)
Common shareholders ......................................... (0.80) (0.79) (0.79) (0.83) (0.88)
Distributions from net realized gain on investments to:
Preferred shareholders ...................................... -- -- (0.01) (0.02) --
Common shareholders ......................................... -- -- (0.03) (0.06) --
Distributions in excess of net realized gain on investments to:
Preferred shareholders ...................................... ** ** ** ** --
Common shareholders ......................................... ** ** ** (0.01) --
-------- -------- -------- -------- --------
Total dividends and distributions ............................. (1.05) (1.06) (1.08) (1.20) (1.11)
-------- -------- -------- -------- --------
Net asset value, end of year* ................................. $ 17.06 $ 16.80 $ 15.90 $ 16.08 $ 13.88
======== ======== ======== ======== ========
Market value, end of year* .................................... $ 16.13 $ 15.25 $ 14.50 $ 13.50 $ 12.25
======== ======== ======== ======== ========
TOTAL INVESTMENT RETURN + ..................................... 11.21% 10.97% 13.56% 17.64% (13.71%)
======== ======== ======== ======== ========
RATIOS TO AVERAGE NET ASSETS OF
COMMON SHAREHOLDERS: ++
Expenses ...................................................... 0.88% 0.92% 0.95% 0.95% 1.02%
Net investment income before preferred stock dividends ........ 7.10% 7.19% 7.32% 7.74% 7.80%
Preferred stock dividends ..................................... 1.49% 1.03% 1.64% 1.97% 1.55%
Net investment income available to common shareholders ........ 5.61% 5.56% 5.68% 5.77% 6.25%
SUPPLEMENTAL DATA:
Average net assets of common shareholders (in thousands) ...... $458,993 $444,895 $434,692 $417,017 $400,555
Portfolio turnover ............................................ 0% 11% 8% 27% 64%
Net assets of common shareholders, end of year (in thousands) . $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
Asset coverage per share of preferred stock, end of year# ..... $ 81,339 $ 80,484 $ 77,501 $ 78,091 $141,670
</TABLE>
- ----------
* Net asset value and market value are published in 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 year 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.
++ Ratios calculated on the basis of income and expenses applicable to both
the common and preferred shares, and preferred stock dividends, relative
to the average net assets of common shareholders.
The information above represents the audited operating performance data for a
share of common stock outstanding, total investment return, ratios to average
net assets and other supplemental data for the years indicated. This information
has been determined based upon financial information provided in the financial
statements and market value data for Trust's shares.
See Notes to Financial Statements.
11
<PAGE>
- --------------------------------------------------------------------------------
The BlackRock Insured
Municipal 2008 Term Trust Inc.
Notes to Financial Statements
- --------------------------------------------------------------------------------
Note 1. 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 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.
Reclassification of Capital Accounts: Effective January 1, 1994, the Trust
began accounting and reporting for permanent differences between financial and
tax reporting in accordance with the American Institute of Certified Public
Accounts' Statement of Position 93-2: Determination, Disclosure and Financial
Statement of Income, Capital Gain and Return of Capital Distributions by
Investment Companies. The effect of adopting the statement for the year ended
December 31, 1998 was to increase accumulated net realized loss and increase
undistributed net investment income by $12,409. Net investment income, net
realized and unrealized gains on investments and net assets were not affected by
this change.
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 PNC
Bank, 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
12
<PAGE>
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
year ended December 31, 1998, aggregated $810,893 and $2,590,293, respectively.
The federal income tax basis of the Trust's investments at December 31,
1998, was $592,928,189, and accordingly, gross and net unrealized appreciation
was $67,668,026.
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 December 31, 1998, the Adviser
owned 7,093 shares. As of December 31, 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 2.35% to 4.275%
for the year ended December 31, 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 December 31, 1998, the Board of Directors of the Trust declared a
dividend from undistributed earnings of $0.06625 per common share payable
January 29, 1999 to shareholders of record on January 15, 1999.
For the period January 1, 1999 to January 31, 1999 dividends and
distributions declared on preferred shares totalled $556,230 in aggregate for
the four outstanding preferred share series.
13
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK INSURED MUNICIPAL 2008 TERM TRUST INC.
REPORT OF INDEPENDENT AUDITORS
- --------------------------------------------------------------------------------
The Shareholders and Board of Directors of The BlackRock Insured Municipal 2008
Term Trust Inc.:
We have audited the accompanying statement of assets and liabilities including
the portfolio of investments, of The BlackRock Insured Municipal 2008 Term Trust
Inc., as of December 31, 1998, and the related statements of operations, and of
changes in net assets for each of the two years in the period then ended and the
financial highlights for each of the five years in the period then ended. These
financial statements and financial highlights are the responsibility of the
Trust's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned at December
31, 1998 by correspondence with the custodian. An audit also includes assessing
the accounting principles used and significant estimates made by Management, as
well as evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of The BlackRock
Insured Municipal 2008 Term Trust Inc. as of December 31, 1998, the results of
its operations, the changes in its net investment assets and the financial
highlights for the respective stated periods in conformity with generally
accepted accounting principles.
/s/ Deloitte & Touche LLP
Deloitte & Touche LLP
New York, New York
February 12, 1999
14
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK INSURED MUNICIPAL 2008 TERM TRUST INC.
TAX INFORMATION
- --------------------------------------------------------------------------------
We are required by the Internal Revenue Code to advise you within 60 days
of the Trust's fiscal year end as to the federally exempt interest dividends
received by you during such fiscal year. Accordingly, we are advising you that
all regular dividends paid by the Trust during the fiscal year ended December
31, 1998 were federally tax-exempt interest dividends.
Additionally, the following summarizes the special taxable distributions
declared by the Trust during the fiscal year.
Long-Term
Record Payable Capital
Date Date Gains*
-------- -------- ----------
Common Stock Shareholders 12/15/98 12/31/98 $0.005235
Preferred Stock: Series T-7 12/01/98 12/02/98 $5.466
Preferred Stock: Series R-7 12/03/98 12/04/98 $5.384
Preferred Stock: Series T-28 12/22/98 12/23/98 $5.803
Preferred Stock: Series R-28**
* Long-term capital gains taxable at the 20% rate.
** Taxable distributions continued in subsequent auctions.
For purposes of preparing your annual federal income tax return, however, you
should report the amounts as reflected on the appropriate Form 1099-DIV or
substitute 1099 DIV.
- --------------------------------------------------------------------------------
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.
15
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK INSURED MUNICIPAL 2008 TERM TRUST INC.
ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
There have been no material changes in the Trust's investment objectives
or policies that have not been approved by the shareholders or to its charter or
by-laws or in the principal risk factors associated with investment in the
Trust. There have been no changes in the persons who are primarily responsible
for the day-to-day management of the Trust's portfolio.
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 intends to communicate 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, however, the Adviser has not 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.
16
<PAGE>
- --------------------------------------------------------------------------------
THEBLACKROCK 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 $132
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 $24 billion family of open-end equity and bond funds.
Current institutional clients number 425, 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 Trust will implement a conservative strategy that will seek to
closely match the maturity of the assets of the portfolio with the future return
of the initial investment at the end of 2008. At the Trust's termination,
BlackRock expects that the value of the securities which have matured, combined
with the value of the securities that are sold, if any, will be sufficient to
return the initial offering price to investors. On a continuous basis, the Trust
will seek its objective by actively managing its portfolio of municipal
obligations 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.
17
<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.
18
<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 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.
19
<PAGE>
- ---------
BlackRock
- ---------
Directors
Laurence D. Fink, Chairman
Andrew F. Brimmer
Richard E. Cavanagh
Kent Dixon
Frank J. Fabozzi
James Grosfeld
James Clayburn La Force, Jr.
Walter F. Mondale
Ralph L. Schlosstein
Officers
Ralph L. Schlosstein, President
Keith T. Anderson, Vice President
Michael C. Huebsch, Vice President
Robert S. Kapito, Vice President
Kevin Klingert, Vice President
Richard M. Shea, Vice President/Tax
Henry Gabbay, Treasurer
James Kong, Assistant Treasurer
Karen H. Sabath, Secretary
Investment Adviser
BlackRock Financial Management, Inc.
345 Park Avenue
New York, NY 10154
(800) 227-7BFM
Administrator
Princeton 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
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
[recycled logo] Printed on recycled paper
