--------------------------------------------------------------------------------
THE BLACKROCK INSURED MUNICIPAL 2008 TERM TRUST INC.
SEMI-ANNUAL REPORT TO SHAREHOLDERS
REPORT OF INVESTMENT ADVISOR
--------------------------------------------------------------------------------
July 31, 2000
Dear Shareholder:
In the first half of the year, fears of an open-ended tightening policy by
the Federal Reserve peaked in May, which resulted in a subsequent relief in the
market as the U.S. economy seemed to decelerate significantly. During the
period, the Federal Reserve tightened short-term rates by 1.00% in an attempt to
engineer a "soft landing" for the U.S. economy. In the first six months of the
new millennium we have witnessed unprecedented volatility in both the Treasury
yield curve and the spread sectors. The Treasury curve inverted sharply in the
first quarter, but as weak economic data emerged in the second quarter, market
participants embraced an economic "soft landing" scenario causing the yield
curve to steepen. The downward revision in growth expectations allowed spread
sectors to rally in the month of June, but year-to-date their performance still
trails Treasuries.
While fears of a hawkish Federal Reserve and consequent risks of a
"hard-landing" may not materialize immediately, the risks are skewed in that
direction. A longer period of subdued financial market performance is necessary
to enable the labor markets to build up slack, which is an important
pre-condition for the Fed to achieve its goal.
This report contains a summary of market conditions during the semi-annual
period and a review of portfolio strategy by your Trust's managers in addition
to the Trust's unaudited financial statements and a detailed list of the
portfolio's holdings. Continued thanks for your confidence in BlackRock. We
appreciate the opportunity to help you achieve your long-term investment goals.
Sincerely,
/s/ Laurence D. Fink /s/ Ralph L. Schlosstein
-------------------- ------------------------
Laurence D. Fink Ralph L. Schlosstein
Chairman President
1
<PAGE>
July 31, 2000
Dear Shareholder:
We are pleased to present the unaudited semi-annual report for The
BlackRock Insured Municipal 2008 Term Trust Inc. ("the Trust") for the six
months ended June 30, 2000. 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 NAV
over the past six months:
-----------------------------------------------------
6/30/00 12/31/99 CHANGE HIGH LOW
--------------------------------------------------------------------------------
STOCK PRICE $14.125 $13.75 2.73% $14.125 $13.375
--------------------------------------------------------------------------------
NET ASSET VALUE (NAV) $16.03 $16.00 0.19% $16.08 $15.54
--------------------------------------------------------------------------------
THE FIXED INCOME MARKETS
The dynamic expansion of the U.S. economy continues undaunted by Federal
Reserve Chairman Greenspan's attempt to brake the economy, short of stalling it
into a recession. The labor markets remain tight, growth remains strong with 5%+
annualized growth rates and inflation pressures continue to be offset by
increased productivity. However, the Fed remains cautious, in their February
minutes it was noted that: "Other members acknowledged that the Committee might
need to move more aggressively at a later meeting should imbalances continue to
build and inflation expectations clearly begin to pick up." At the Federal
Reserve meeting in November, February and March the Fed raised the discount rate
by 0.25% at each meeting and a 0.50% increase was made in May to bring the
current discount rate to 6.50%.
The Treasury Yield curve experienced a complex set of dynamics, which has
inverted the curve and may continue to invert the curve for the foreseeable
future. The yields on the short-end of the curve increased sharply during the
period in response to three Federal Reserve increases to the discount rate and
perceived future Fed actions in the coming months. The long-end of the curve is
reacting to the "official" announcement that the Treasury will buy back $30
billion of Treasuries with maturities ranging from 10 to 30 years. With a
decreasing supply of available Treasuries, a balanced budget, and an unchanged
demand for longer maturity Treasuries, we would anticipate this condition to
continue. This condition is further augmented by Treasury auction activity, as
they reduce the available bonds on the long end of the curve they continue to
add supply in the 1-10 year range through periodic auctions. For the semi-annual
period, the yield of the 10-year Treasury security declined from 6.44% on
December 31, 1999 to 6.03% on June 30, 2000.
Municipal bonds outperformed the taxable domestic bond market during the
past six months, returning 4.49% (as measured by the LEHMAN MUNICIPAL INDEX)
versus the LEHMAN AGGREGATE INDEX'S 3.98% on a pre-tax basis. Overall, the tone
2
<PAGE>
in the market during the period was extremely positive as the result of
continued strong demand from individual/retail investors coupled with a slowdown
in new issuance. During 1999, households increased their holdings of individual
municipal bonds by over $40 billion while mutual funds saw net outflows.
Offsetting the large amount of mutual fund outflows during the first quarter of
2000 was a 22% decline in overall new municipal bond issuance YTD for the same
period, led by a 68% drop in refunding volume. Refunding volume was down due to
the relatively higher interest rates experienced during the first half of 2000
when compared to the first half of 1999, while new money issuance has declined
because the strong economy has led to full coffers at most municipalities.
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 and
coupons. Additionally, the Trust emphasizes securities whose maturity dates
match the termination date of the Trust.
Over the period, trading activity in the Trust remained relatively low, as
many of the securities in the Trust's portfolio continued to trade at prices
above current cost. As trading activity that results in the Trust realizing a
capital gain could require a taxable distribution, we continue to believe that
waiting to restructure the portfolio in a higher interest rate environment is
the most prudent portfolio management strategy. We reduced our position in
Hospital Bonds to add to the county, city and state general obligation sector.
At present, we are confident that the Trust is on schedule to achieve its
primary investment objective of returning $15 per share upon termination and
will continue to seek investment opportunities in the municipal market.
During the period the Trust issued $65,000,000 in additional preferred
shares. 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. As of June 30,
2000, the Trust's leverage amount was 38% of total assets.
The following chart compares the Trust's current and December 31, 1999
asset composition:
--------------------------------------------------------------------------------
THE BLACKROCK INSURED MUNICIPAL 2008 TERM TRUST INC.
--------------------------------------------------------------------------------
SECTOR JUNE 30, 2000 DECEMBER 31, 1999
--------------------------------------------------------------------------------
County, City & State 25% 22%
--------------------------------------------------------------------------------
Utility/Power 21% 22%
--------------------------------------------------------------------------------
Hospital 12% 15%
--------------------------------------------------------------------------------
Education 11% 11%
--------------------------------------------------------------------------------
Transportation 7% 6%
--------------------------------------------------------------------------------
Lease Revenue 5% 6%
--------------------------------------------------------------------------------
Water & Sewer 5% 6%
--------------------------------------------------------------------------------
Tax Revenue 5% 5%
--------------------------------------------------------------------------------
Special District 5% 3%
--------------------------------------------------------------------------------
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/ Kevin M. Klingert
-------------------- ---------------------
Robert S. Kapito Kevin M. Klingert
Vice Chairman and Portfolio Manager Managing Director and Portfolio Manager
BlackRock Advisors, Inc. BlackRock Advisors, 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 6/30/00: $14.125
--------------------------------------------------------------------------------
Net Asset Value as of 6/30/00: $16.03
--------------------------------------------------------------------------------
Yield on Closing Stock Price as of 6/30/00 ($14.125)(1): 5.63%
--------------------------------------------------------------------------------
Current Monthly Distribution per Common Share(2): $0.06625
--------------------------------------------------------------------------------
Current Annualized Distribution per Common Share(2): $0.79500
--------------------------------------------------------------------------------
----------
(1) Yield on Closing Stock Price is calculated by dividing the current
annualized distribution per share by the closing stock price per share.
(2) Distribution is not constant and is subject to change.
4
<PAGE>
--------------------------------------------------------------------------------
THE BLACKROCK INSURED MUNICIPAL 2008 TERM TRUST INC.
PORTFOLIO OF INVESTMENTS JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OPTION
AMOUNT CALL VALUE
RATING* (000) DESCRIPTION PROVISIONS+ (NOTE 1)
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
LONG-TERM INVESTMENTS--160.4%
ALABAMA--0.3%
AAA $ 1,905 Mobile Impvt. Wt., Zero Coupon, 8/15/08, MBIA ............................. 8/02 @ 71.587 $ 1,222,591
------------
ARIZONA--0.6%
AAA 4,000 Chandler, G.O., Zero Coupon, 7/01/08, FGIC ................................ No Opt. Call 2,655,880
------------
CALIFORNIA--0.5%
AAA 1,890 California Hlth. Fac. Fin. Auth. Rev., Marin Gen. Hosp.,
Ser. A, 5.75%, 8/01/09, FSA ............................................. 8/03 @ 102 1,965,789
---------
COLORADO--12.3%
AAA 2,000 E-470 Pub. Hwy. Auth. Rev., Ser. B, Zero Coupon, 9/01/11, MBIA ............ No Opt. Call 1,095,460
AAA 30,205++ Jefferson Cnty. Sch. Dist. No. R-001, G.O., 6.25%, 12/15/02, AMBAC ........ N/A 31,591,410
AAA 6,965 Regl. Transn. Dist. C.O.P., Transit Vehicles Proj. Ser. A,
5.00%, 6/01/08, MBIA .................................................... 6/07 @ 101 6,942,433
AAA 13,285++ Univ. of Colorado, Hosp. Auth. Rev., Ser. A, 6.25%, 11/15/02, AMBAC ....... N/A 13,998,139
------------
53,627,442
------------
DISTRICT OF COLUMBIA--8.5%
Dist. of Columbia, G.O.,
AAA 2,800 Ser. B, 5.50%, 6/01/09, FSA ............................................. No Opt. Call 2,863,616
AAA 17,950++ Ser. B, 6.30%, 6/01/02, MBIA ............................................ N/A 18,801,369
AAA 10,000 Ser. B-1, 5.50%, 6/01/08, AMBAC ......................................... No Opt. Call 10,231,400
AAA 115++ Ser. E, 5.875%, 6/01/03, MBIA ........................................... N/A 120,375
AAA 2,955 Ser. E, 5.875%, 6/01/08, MBIA ........................................... 6/03 @ 102 3,046,782
AAA 2,000 Dist. of Columbia, Hosp. Rev., Children's Hosp.,
Ser. A, 6.25%, 7/15/08, FGIC ............................................ 7/02 @ 102 2,072,860
------------
37,136,402
------------
GEORGIA--2.9%
AAA 7,000++ Atlanta, C.O.P., Pretrial Det. Ctr., 6.25%, 12/01/02, MBIA ................ N/A 7,380,100
AAA 5,000 Georgia St., G.O., Ser. E, 5.25%, 2/01/10 ................................. No Opt. Call 5,087,700
------------
12,467,800
------------
HAWAII--1.0%
AAA 4,260 Honolulu Cnty., G.O., Ser. A, 5.80%, 1/01/07, FGIC ........................ No Opt. Call 4,441,433
------------
ILLINOIS--15.5%
AAA 14,205 Chicago O' Hare Intl. Arprt. Rev., Ser. A, 6.25%, 1/01/08, MBIA ........... 1/05 @ 102 15,073,210
AAA 3,105 Chicago Pub. Bldg. Comm. Bldg. Rev., Ser. A, Zero Coupon, 1/01/07, MBIA ... ETM 2,210,232
Chicago Sch. Fin. Auth., G.O., Ser. A, FGIC,
AAA 13,000 6.25%, 6/01/07 .......................................................... 6/02 @ 102 13,524,940
AAA 9,150 6.25%, 6/01/09 .......................................................... 6/02 @ 102 9,534,758
Aaa 5,980 Cook Cnty. High Sch. Dist. No. 201-J, Sterling Morton Twnsp.,
Zero Coupon, 12/01/09, FGIC ............................................. No Opt. Call 3,622,564
AAA 8,985 Du Page Cnty. Fst. Presv. Dist., Zero Coupon, 11/01/08 .................... No Opt. Call 5,784,453
AAA 11,000++ Illinois Hlth. Fac. Auth. Rev., Alexian Med. Ctr. Proj.,
Ser. A, 6.35%, 1/01/02, MBIA ............................................ N/A 11,474,100
Met. Pier & Expo. Auth. Ded. St. Tax Rev. Auth., FGIC,
AAA 1,570 Ser. A, Zero Coupon, 6/15/08 ............................................ ETM 1,029,904
AAA 8,600 Ser. A, Zero Coupon, 6/15/08 ............................................ No Opt. Call 5,561,362
------------
67,815,523
------------
INDIANA --2.4%
Indiana Hlth. Fac. Fin. Auth. Hosp. Rev. & Impvt., Ancilla Sys. Inc., MBIA,
NR 1,805++ Ser. A, 6.25%, 7/01/02 .................................................... N/A 1,891,062
NR 3,860 Ser. A, 6.25%, 7/01/08 .................................................... 7/02 @ 102 4,010,424
NR 1,385++ Ser. B, 6.25%, 7/01/02 .................................................... N/A 1,451,037
NR 2,965 Ser. B, 6.25%, 7/01/08 .................................................... 7/02 @ 102 3,080,546
------------
10,433,069
------------
</TABLE>
See Notes to Financial Statements.
5
<PAGE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OPTION
AMOUNT CALL VALUE
RATING* (000) DESCRIPTION PROVISIONS+ (NOTE 1)
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
IOWA--1.0%
AAA $ 305 Iowa Fin. Auth., Sngl. Fam. Mtge. Rev., Ser. F, 6.35%, 7/01/09, AMBAC ..... 1/03 @ 102 $ 312,347
AAA 4,195 Muscatine, Elec. Rev., 5.00%, 1/01/08, FSA ................................ 1/00 @ 100 4,171,634
------------
4,483,981
------------
KENTUCKY--0.6%
AAA 3,890 Owensboro, Elec. Lt. & Pwr. Rev., Ser. B, Zero Coupon, 1/01/09, AMBAC ..... No Opt. Call 2,488,589
------------
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 5,254,350
------------
MASSACHUSETTS--4.9%
AAA 4,465++ Chelsea, Sch. Proj. Loan, 6.00%, 6/15/04, AMBAC ........................... N/A 4,744,196
Massachusetts Bay Trans. Auth. Rev., Ser. B, MBIA,
AAA 200++ 6.00%, 3/01/03 .......................................................... N/A 210,038
AAA 5,800 6.00%, 3/01/10 .......................................................... 3/03 @ 102 6,020,690
AAA 10,000 Massachusetts St. Hsg. Fin. Agcy. Hsg. Proj.,
Ser. A, 5.95%, 10/01/08, AMBAC .......................................... 4/03 @ 102 10,255,800
------------
21,230,724
------------
MICHIGAN--4.6%
Lake Orion, Cmnty. Sch. Dist., AMBAC,
AAA 3,290++ 6.60%, 5/01/05 .......................................................... N/A 3,568,005
AAA 3,285++ 6.70%, 5/01/05 .......................................................... N/A 3,576,577
AAA 8,920++ Michigan St. Bldg. Auth. Rev., Fac. Proj.,
Ser. IIA, 6.25%, 10/01/02, AMBAC ........................................ N/A 9,383,929
AAA 3,400 Wyandotte, Elec. Rev., 6.25%, 10/01/08, MBIA .............................. No Opt. Call 3,624,468
------------
20,152,979
------------
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 @ 102 7,558,299
------------
NEVADA--3.9%
AAA 6,490++ Clark Cnty. Fld. Ctrl., 6.30%, 11/01/01, AMBAC ............................ N/A 6,691,969
Washoe Cnty. Arpt. Auth. Rev., Ser. B, MBIA,
AAA 3,135 5.70%, 7/01/07 .......................................................... 7/03 @ 102 3,222,686
AAA 2,645 5.75%, 7/01/08 .......................................................... 7/03 @ 102 2,720,038
AAA 4,135++ Washoe Cnty. Sch. Dist., G.O., Ser. A, 6.20%, 10/01/02, AMBAC ............. N/A 4,303,915
------------
16,938,608
------------
NEW JERSEY--13.1%
AAA 30,275 New Jersey Econ. Dev. Auth., Mkt. Trans. Fac. Rev.,
Ser. A, 5.80%, 7/01/08, MBI 7/04 @ 102 31,715,787
New Jersey St. G.O., Ser. D, MBIA,
AAA 8,370++ 6.00%, 2/15/03 .......................................................... N/A 8,775,694
AAA 16,125 6.00%, 2/15/09 .......................................................... 2/03 @ 102 16,807,410
------------
57,298,891
------------
NEW YORK--12.7%
New York City G.O., MBIA,
AAA 5,000 Ser. E, 6.125%, 8/01/06 ................................................. No Opt. Call 5,311,750
AAA 15,500 Ser. E, 6.20%, 8/01/07 .................................................. No Opt. Call 16,604,840
AAA 5,000 Ser. G, 5.75%, 2/01/08 .................................................. 2/06 @ 101.5 5,224,250
AAA 15,915 New York St., G.O., Ser. F, 5.25%, 9/15/09, MBIA .......................... 9/08 @ 101 16,172,505
New York St. Environ. Fac. Corp., P.C.R., Ser. D,
AAA 5,945 6.50%, 5/15/07 .......................................................... 11/04 @ 102 6,400,208
AAA 2,245 6.50%, 11/15/07 ......................................................... 11/04 @ 102 2,416,900
AAA 3,395 New York St. Thruway Auth. Svc. Contract Rev., Local Hwy. & Brdg. Ser. A,
5.40%, 1/01/09, MBIA .................................................... 1/05 @ 102 3,463,273
------------
55,593,726
------------
</TABLE>
See Notes to Financial Statements.
6
<PAGE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OPTION
AMOUNT CALL VALUE
RATING* (000) DESCRIPTION PROVISIONS+ (NOTE 1)
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NORTH CAROLINA--8.5%
AAA $ 1,000++ Cumberland Cnty. C.O.P., Civic Ctr. Proj., Ser. A, 6.375%, 12/01/04, AMBAC N/A $ 1,081,750
North Carolina Eastn. Mun. Pwr. Agcy. Sys. Rev., Ser. B,
AAA 13,500 6.125%, 1/01/09, FGIC ................................................... No Opt. Call 14,274,090
AAA 5,000 7.00%, 1/01/08, CAPMAC .................................................. No Opt. Call 5,546,250
AAA 14,675 7.25%, 1/01/07, CAPMAC .................................................. No Opt. Call 16,347,070
------------
37,249,160
------------
NORTH DAKOTA--1.1%
AAA 4,450++ Bismark Hosp. Rev., St. Alexius Med. Ctr., 6.90%, 5/01/01, AMBAC .......... N/A 4,623,728
------------
OHIO--2.3%
AAA 2,410++ Cleveland, G.O., 6.40%, 11/15/04, MBIA .................................... N/A 2,602,993
AAA 6,095 Hamilton City, Elec. Sys. Rev., Ser. A, 6.125%, 10/15/08, FGIC ............ 10/02 @ 102 6,365,191
AAA 1,000++ Ohio St. Bldg. Auth. Fac. Rev., Juvenile Correctional Proj.,
6.50%, 10/01/04, AMBAC .................................................. N/A 1,082,340
------------
10,050,524
------------
PENNSYLVANIA--13.3%
AAA 4,000 Allegheny Cnty. Hosp. Dev. Auth. Rev., Magee Women's Hosp.,
6.25%, 10/01/08, FGIC ................................................... 10/02 @ 102 4,186,200
AAA 15,000 Dauphin Cnty. Gen. Auth. Hosp. Rev., HAPSCO-Western Pennsylvania Hosp. Proj.,
6.25%, 7/01/08, MBIA .................................................... 7/02 @ 102 15,657,000
AAA 6,600 Erie Cnty. Hosp. Auth. Rev., St. Vincent Hlth. Ctr. Proj.,
Ser. A, 6.25%, 7/01/08, MBIA ............................................ 7/02 @ 102 6,889,080
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 3,690,715
AAAA 6,500 Pennsylvania Hsg. Fin. Agcy. Rev., Rental Hsg.,
Ser. C, 6.25%, 7/01/07, FNMA ............................................ 7/02 @ 102 6,701,370
AAA 7,450++ Pennsylvania St., G.O., Ser. A, 6.50%, 11/01/01, FGIC ..................... N/A 7,740,625
AAA 1,500 Philadelphia, Gas Wks. Rev., 5.25%, 7/01/08, FSA .......................... No Opt. Call 1,520,580
AAA 10,930++ Pittsburgh, G.O., Ser. D, 6.00%, 9/01/02, AMBAC ........................... N/A 11,419,336
------------
57,804,906
------------
TEXAS--26.8%
AAA 13,000++ Austin Pub. Impvt., G.O., 6.10%, 9/01/02, AMBAC ........................... N/A 13,386,360
Austin Util. Sys. Rev.,
AAA 11,515 Ser. A, Zero Coupon, 11/15/08, MBIA ..................................... No Opt. Call 7,422,339
AAA 5,000 Ser. A, Zero Coupon, 11/15/09, AMBAC .................................... No Opt. Call 3,047,150
AAA 5,000 Ser. A, Zero Coupon, 11/15/09, MBIA ..................................... No Opt. Call 3,047,150
AAA 7,000 6.25%, 11/15/08, AMBAC .................................................. 11/02 @ 102 7,335,650
AAA 5,000 6.625%, 11/15/08, AMBAC ................................................. No Opt. Call 5,524,900
Baytown, G.O., AMBAC,
AAA 2,385++ 6.40%, 2/01/02 .......................................................... N/A 2,448,107
AAA 2,840 6.40%, 2/01/08 .......................................................... 2/02 @ 100 2,904,752
AAA 9,930 Circle C Mun. Util. Dist. No. 3 Rev., 6.50%, 11/15/09, FGIC ............... 11/01 @ 100 10,138,133
Coppell Indpt. Sch. Dist., MBIA,
AAA 1,430 6.10%, 8/15/09 .......................................................... ETM 1,531,273
AAA 2,495 6.10%, 8/15/09 .......................................................... 8/02 @ 100 2,553,632
AAA 4,390 Houston Indpt. Sch. Dist., Zero Coupon, 8/15/09, AMBAC .................... No Opt. Call 2,710,957
AAA 16,135 Houston Wtr. & Swr. Sys. Rev., Jr. Lien, Ser. C, 6.25%, 12/01/09, MBIA .... 12/02 @ 102 16,898,185
AAA 6,000 San Antonio Elec. & Gas Rev., Ser. B, Zero Coupon, 2/01/10, FGIC .......... ETM 3,602,820
Texas Mun. Pwr. Agcy. Rev.,
AAA 15,000 Zero Coupon, 9/01/08, AMBAC ............................................. No Opt. Call 9,773,400
AAA 16,175 Zero Coupon, 9/01/09, AMBAC ............................................. No Opt. Call 9,965,094
AAA 7,000 5.00%, 9/01/10, FGIC .................................................... 9/04 @ 100 6,892,270
AAA 5,900 Texas St. Pub. Fin. Auth. Bldg. Rev., Ser. B, 6.25%, 2/01/09, AMBAC ....... No Opt. Call 6,358,666
AAA 2,275 Ysleta Indpt. Sch. Dist. Rev., Zero Coupon, 8/15/08, PSFG ................. No Opt. Call 1,485,757
------------
117,026,595
------------
</TABLE>
See Notes to Financial Statements.
7
<PAGE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OPTION
AMOUNT CALL VALUE
RATING* (000) DESCRIPTION PROVISIONS+ (NOTE 1)
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
UTAH--3.6%
AAA $ 3,500 Intermountain Pwr. Agcy. Rev., Ser. B, 6.00%, 7/01/07, MBIA ............... No Opt. Call $ 3,701,950
AAA 1,550 Salt Lake Cnty. Mun. Bldg. Auth. Lease Rev., Ser. A, 6.05%, 10/01/08, MBIA 10/04 @ 101 1,622,540
AAA 10,300 Utah St., G.O., Ser. F, 5.00%, 7/01/10 .................................... 7/07 @ 100 10,215,128
------------
15,539,618
------------
WASHINGTON--14.4%
AAA 12,850 King Cnty., G.O., Ser. D, 5.55%, 12/01/08, MBIA ........................... 12/07 @ 102 13,268,782
Snohomish Cnty. Sch. Dist., G.O., MBIA,
AAA 2,235++ 6.10%, 12/01/03 ......................................................... N/A 2,364,585
AAA 1,765 6.10%, 12/01/08 ......................................................... 12/03 @ 102 1,848,520
Washington St. Hlth. Care Fac. Auth. Rev., MBIA,
AAA 1,010 Catholic Health Initiatives A, 5.30%, 12/01/08 .......................... No Opt. Call 1,014,121
AAA 1,000 Catholic Health Initiatives A, 5.40%, 12/01/10 .......................... 6/10 @ 101 1,001,060
AAA 9,000 Virginia Mason Oblig. Group, 6.30%, 2/15/09 ............................. 2/03 @ 102 9,397,620
Washington St. Pub. Pwr. Supply Sys. Rev.,
AAA 3,000 Nuclear Proj. No. 2, 5.55%, 7/01/10, FGIC ............................... 7/03 @ 102 3,008,160
AAA 11,000 Nuclear Proj. No. 2, Ser. A, 5.80%, 7/01/07, FSA ........................ No Opt. Call 11,447,040
AAA 13,635 Nuclear Proj. No. 2, Ser. A, 6.25%, 7/01/09, MBIA ....................... 7/02 @ 102 14,221,578
AAA 5,550 Nuclear Proj. No. 3, Zero Coupon, 7/01/07, BIGI ......................... No Opt. Call 3,823,228
AAA 2,000 Nuclear Proj. No. 3, Zero Coupon, 7/01/08, BIGI ......................... No Opt. Call 1,302,320
------------
62,697,014
------------
WEST VIRGINIA--2.7%
AAA 11,600 West Virginia St. Pkwys. Econ. Dev. & Tourism Auth., 5.70%, 5/15/09, FGIC . 5/03 @ 102 11,820,864
------------
TOTAL LONG-TERM INVESTMENTS (COST $664,842,593) ........................... 699,578,485
------------
</TABLE>
See Notes to Financial Statements.
8
<PAGE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OPTION
AMOUNT CALL VALUE
RATING* (000) DESCRIPTION PROVISIONS+ (NOTE 1)
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SHORT-TERM INVESTMENTS**
NEW YORK
A-1+ $ 50 Long Island Pwr. Auth. New York Elec. Sys. Rev., Sub. Ser. 5,
4.40%, 7/03/00, FRDD .................................................... N/A $ 50,000
TEXAS
A-1+ 85 Harris Cnty. Texas Hlth. Fac. Dev. Corp. Rev., St. Lukes Episcopal Hosp.,
Ser. A, 4.55%, 7/03/00, FRDD ............................................ N/A 85,000
WASHINGTON
A-1+ 50 Washington St. Hlth. Care Fac. Auth. Rev., Sisters of Providence Ser. B,
4.45%, 7/03/00, FRDD .................................................... N/A 50,000
------------
TOTAL SHORT-TERM INVESTMENTS (COST $185,000) 185,000
------------
TOTAL INVESTMENTS--160.4% (COST $665,027,593) 699,763,485
Other assets in excess of liabilities--1.7% 7,413,467
Liquidation value of preferred stock--(62.1)% (271,000,000)
------------
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS--100% $436,176,952
============
</TABLE>
----------
* Using the higher of Standard & 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.
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------
THE FOLLOWING ABBREVIATIONS ARE USED IN PORTFOLIO DESCRIPTIONS:
<S> <C>
AMBAC -- American Municipal Bond Assurance Corporation FRDD -- Floating Rate Daily Demand**
BIGI -- Bond Investors Guaranty Insurance Company FSA -- Financial Security Assurance
CAPMAC -- Capital Markets Assurance Company G.O. -- General Obligation
C.O.P. -- Certificate of Participation MBIA -- Municipal Bond Insurance Association
ETM -- Escrowed to Maturity P.C.R. -- Pollution Control Revenue
FGIC -- Financial Guaranty Insurance Company PSFG -- Permanent School Fund Guaranty
FNMA -- Federal National Mortgage Association
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
9
<PAGE>
--------------------------------------------------------------------------------
THE BLACKROCK INSURED
MUNICIPAL 2008 TERM TRUST INC.
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
ASSETS
Investments, at value (cost $665,027,593)
(Note 1) ....................................................... $699,763,485
Interest receivable ............................................ 10,987,712
Receivable for investments sold ................................ 195,000
Other assets ................................................... 29,906
------------
710,976,103
------------
LIABILITIES
Dividends payable--common stock ................................ 1,802,470
Due to custodian ............................................... 1,074,127
Dividends payable--preferred stock ............................. 262,106
Offering costs payable--preferred stock ........................ 236,383
Advisory fee payable (Note 2) .................................. 202,945
Administration fee payable (Note 2) ............................ 57,984
Other accrued expenses ......................................... 163,136
------------
3,799,151
------------
NET INVESTMENT ASSETS .......................................... $707,176,952
============
Net investment assets were comprised of:
Common stock:
Par value (Note 4) ......................................... $ 272,071
Paid-in capital in excess of par ........................... 377,481,620
Preferred stock (Note 4) ..................................... 271,000,000
------------
648,753,691
Undistributed net investment income .......................... 24,152,760
Accumulated net realized loss ................................ (465,391)
Net unrealized appreciation .................................. 34,735,892
------------
Net investment assets, June 30, 2000 ......................... $707,176,952
============
Net assets applicable to common shareholders ................. $436,176,952
============
Net asset value per common share:
($436,176,952 / 27,207,093 shares of
common stock issued and outstanding) ....................... $ 16.03
============
--------------------------------------------------------------------------------
THE BLACKROCK INSURED
MUNICIPAL 2008 TERM TRUST INC.
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
NET INVESTMENT INCOME
Income
Interest and discount earned ................................. $ 19,587,170
------------
Expenses
Investment advisory .......................................... 1,186,163
Administration ............................................... 338,904
Auction agent ................................................ 325,000
Reports to shareholders ...................................... 117,500
Legal ........................................................ 75,000
Custodian .................................................... 64,500
Directors .................................................... 36,500
Independent accountants ...................................... 29,000
Registration ................................................. 16,000
Transfer agent ............................................... 15,000
Miscellaneous ................................................ 86,642
------------
Total expenses ........................................... 2,290,209
------------
Net investment income .......................................... 17,296,961
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized loss on investments ............................... (125,613)
Net change in unrealized appreciation
on investments ............................................... 407,534
------------
Net gain on investments ........................................ 281,921
------------
NET INCREASE IN NET INVESTMENT
ASSETS RESULTING FROM OPERATIONS ............................. $ 17,578,882
============
See Notes to Financial Statements.
10
<PAGE>
--------------------------------------------------------------------------------
THE BLACKROCK INSURED MUNICIPAL 2008 TERM TRUST INC.
STATEMENTS OF CHANGES IN NET INVESTMENT ASSETS (UNAUDITED)
--------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
JUNE 30, DECEMBER 31,
2000 1999
------------- -------------
INCREASE (DECREASE) IN NET INVESTMENT ASSETS
OPERATIONS:
Net investment income ...................... $ 17,296,961 $ 33,039,797
Net realized loss on investments ........... (125,613) (33,995)
Net change in unrealized appreciation
on investments ........................... 407,534 (33,645,451)
------------- -------------
Net increase (decrease) in net
investment assets resulting
from operations ................... 17,578,882 (639,649)
------------- -------------
DIVIDENDS:
To common shareholders from net
investment income ........................ (10,814,582) (21,629,233)
To preferred shareholders from net
investment income ........................ (4,934,600) (6,652,978)
------------- -------------
Total dividends ..................... (15,749,182) (28,282,211)
------------- -------------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from additional issuance
of preferred shares ...................... 64,032,840 --
------------- -------------
Total increase (decrease) .............. 65,862,540 (28,921,860)
------------- -------------
NET INVESTMENT ASSETS
Beginning of period .......................... 641,314,412 670,236,272
------------- -------------
End of period (including undistributed
net investment income of $24,152,760 and
$22,604,981, respectively) ................. $ 707,176,952 $ 641,314,412
============= =============
See Notes to Financial Statements.
11
<PAGE>
--------------------------------------------------------------------------------
THE BLACKROCK INSURED MUNICIPAL 2008 TERM TRUST INC.
FINANCIAL HIGHLIGHTS (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED DECEMBER 31,
JUNE 30, --------------------------------------------------------
PER COMMON SHARE OPERATING PERFORMANCE: 2000 1999 1998 1997 1996 1995
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of the period ................ $ 16.00 $ 17.06 $ 16.80 $ 15.90 $ 16.08 $ 13.88
-------- -------- -------- -------- -------- --------
Net investment income ................................... .64 1.21 1.20 1.18 1.17 1.19
Net realized and unrealized gain (loss)
on investments ........................................ .01 (1.23) .11 .78 (.27) 2.21
-------- -------- -------- -------- -------- --------
Net increase (decrease) from investment operations ...... .65 (.02) 1.31 1.96 .90 3.40
-------- -------- -------- -------- -------- --------
Dividends and distributions:
Dividends from net investment income to:
Common shareholders ................................. (.40) (.80) (.80) (.79) (.79) (.83)
Preferred shareholders .............................. (.18) (.24) (.25) (.27) (.25) (.28)
Distributions from net realized gain
on investments to:
Common shareholders ................................. -- -- -- -- (.03) (.06)
Preferred shareholders .............................. -- -- -- -- (.01) (.02)
Distributions in excess of net realized
gain on investments to:
Common shareholders ................................. -- -- ** ** ** (.01)
Preferred shareholders .............................. -- -- ** ** ** **
-------- -------- -------- -------- -------- --------
Total dividends and distributions ....................... (.58) (1.04) (1.05) (1.06) (1.08) (1.20)
-------- -------- -------- -------- -------- --------
Capital charge with respect to issuance
of preferred shares ................................. (.04) -- -- -- -- --
-------- -------- -------- -------- -------- --------
Net asset value, end of period* ......................... $ 16.03 $ 16.00 $ 17.06 $ 16.80 $ 15.90 $ 16.08
======== ======== ======== ======== ======== ========
Market value, end of period* ............................ $ 14.13 $ 13.75 $ 16.13 $ 15.25 $ 14.50 $ 13.50
======== ======== ======== ======== ======== ========
TOTAL INVESTMENT RETURN+ ................................ 5.71% (10.14)% 11.21% 10.97% 13.56% 17.64%
======== ======== ======== ======== ======== ========
RATIOS TO AVERAGE NET ASSETS OF COMMON
SHAREHOLDERS:
Expenses++ .............................................. 1.06%+++ .93% .88% .92% .95% .95%
Net investment income before preferred
stock dividends++ ..................................... 8.06%+++ 7.30% 7.10% 7.19% 7.32% 7.74%
Preferred stock dividends ............................... 2.30%+++ 1.47% 1.49% 1.03% 1.64% 1.97%
Net investment income available to
common shareholders ................................... 5.76%+++ 5.83% 5.61% 5.56% 5.68% 5.77%
SUPPLEMENTAL DATA:
Average net assets of common shareholders
(in thousands) ........................................ $431,808 $452,317 $458,993 $444,895 $434,692 $417,017
Portfolio turnover ...................................... 2% 1% 0% 11% 8% 27%
Net assets of common shareholders, end of period
(in thousands) ........................................ $436,177 $435,314 $464,236 $457,192 $432,609 $437,470
Preferred stock outstanding (in thousands) .............. $271,000 $206,000 $206,000 $206,000 $206,000 $206,000
Asset coverage per share of preferred stock,
end of period ......................................... $ 65,262 $ 77,857 $ 81,361 $ 80,508 $ 77,525 $ 78,112
</TABLE>
----------
* Net asset value and market value are published in BARRON'S on Saturday and
THE WALL STREET JOURNAL on 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.
+ 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 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 less than one full 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 stockholders.
+++ 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 common shares.
See Notes to Financial Statements.
12
<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:
SECURITIES VALUATION: Municipal securities (including commitments to purchase
such securities on a "when-issued" basis) are valued on the basis of prices
provided by dealers or pricing services approved by the Trust's Board of
Directors. In determining the value of a particular security, pricing services
may use certain information with respect to transactions in such securities,
quotations from bond dealers, market transactions in comparable securities and
various relationships between securities in determining values. Short-term
securities are valued at amortized cost. 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.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on the trade date. Realized and unrealized gains and losses are
calculated on the identified cost basis. Interest income is recorded on the
accrual basis and the Trust amortizes premium and accretes original issue
discount on securities purchased using the interest method.
FEDERAL INCOME TAXES: It is the Trust's intention to continue to meet the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute sufficient net income to shareholders. For this
reason and because substantially all of the Trust's gross income consists of
tax-exempt interest, no Federal income tax provision is required.
DIVIDENDS AND DISTRIBUTIONS: The Trust declares and pays dividends and
distributions to common shareholders monthly from net investment income, net
realized short-term capital gains and other sources, if necessary. Net long-term
capital gains, if any, in excess of loss carryforwards may be distributed
annually. Dividends and distributions are recorded on the ex-dividend date.
Dividends and distributions to preferred shareholders are accrued and determined
as described in Note 4.
ESTIMATES: The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America 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.
DEFERRED COMPENSATION PLAN: Under a deferred compensation plan approved by the
Board of Directors on February 24, 2000, non-interested Directors may elect to
defer receipt of all or a portion of their annual compensation.
Deferred amounts earn a return as though equivalent dollar amounts had been
invested in common shares of other BlackRock funds selected by the Directors.
This has the same economic effect as if the Directors had invested the deferred
amounts in such other BlackRock funds.
The deferred compensation plan is not funded and obligations thereunder
represent general unsecured claims against the general assets of the Trust. The
Trust may, however, elect to invest in common shares of those funds selected by
the Directors in order to match its deferred compensation obligations.
NOTE 2. AGREEMENTS
The Trust has an Investment Advisory Agreement with BlackRock Advisors, Inc.,
(the "Advisor"), which is a wholly-owned subsidiary of BlackRock, Inc., which in
turn is an indirect majority-owned subsidiary of PNC Financial Services Group,
Inc. The Trust has an Administration Agreement with Princeton Administrators,
L.P. (the "Administrator"), an indirect wholly-owned affiliate of Merrill Lynch
& Co., Inc.
The investment advisory fee paid to the Advisor 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 Advisor provides continuous supervision of
the investment portfolio and pays the compensation of officers of the Trust who
are affiliated persons of the Advisor. The Administrator pays occupancy and
certain clerical and accounting costs of the Trust. The Trust bears all other
costs and expenses.
13
<PAGE>
NOTE 3. PORTFOLIO SECURITIES
Purchases and sales of investments, other than short-term investments, for the
six months ended June 30, 2000, aggregated $77,626,133 and $12,451,089,
respectively.
The federal income tax basis of the Trust's investments at June 30, 2000,
was $665,333,376, and accordingly, net unrealized appreciation was $34,430,109
(gross unrealized appreciation--$34,487,649, gross unrealized
depreciation--$57,540).
For federal income tax purposes, the Trust had a capital loss carryforward
at December 31, 1999 of approximately $34,000 which will expire in 2007.
Accordingly, no capital gain distribution is expected to be paid to shareholders
until net gains have been realized in excess of such amounts.
NOTE 4. CAPITAL
There are 200 million shares of $.01 par value common stock authorized. The
Trust may classify or reclassify any unissued shares of common stock into one or
more series of preferred stock. Of the 27,207,093 common shares outstanding at
June 30, 2000, the Advisor owned 7,093 shares. As of June 30, 2000, there were
10,840 preferred shares outstanding as follows: Series T28--2,060, Series
R28--2,060, Series T7--4,660, and Series R7--2,060, which includes 2,600 shares
of Series T7 issued on March 10, 2000.
On March 10, 2000, the Trust reclassified 2,600 shares of common stock and
issued an additional 2,600 shares of Series T7 preferred shares. The additional
shares issued have identical rights and features of the existing Series T7
preferred shares. Estimated offering costs of $317,160 and underwriting discount
of $650,000 have been charged to paid-in capital in excess of the common shares.
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
offer- ing through May 17, 1994. Thereafter, rates on Series R28 reset every 28
days based on results of an auction. Dividend rates ranged from 2.40% to 5.90%
during the period ended June 30, 2000.
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 stock, 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
On June 30, 2000, the Board of Directors of the Trust declared a dividend
from undistributed earnings of $0.06625 per common share payable, August 1, 2000
to shareholders of record on July 14, 2000.
For the period July 1, 2000 to July 31, 2000 dividends declared on
Preferred Shares totalled $959,405 in aggregate for the four outstanding
Preferred Share series.
14
<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.
15
<PAGE>
--------------------------------------------------------------------------------
THE BLACKROCK INSURED MUNICIPAL 2008 TERM TRUST INC.
ADDITIONAL INFORMATION
--------------------------------------------------------------------------------
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 18, 2000 to vote on
the following matters:
(1) To elect two Directors as follows:
DIRECTORS CLASS TERM EXPIRING
--------- ----- ---- --------
Richard E. Cavanagh ................ I 3 years 2003
James Clayburn La Force Jr. ........ I 3 years 2003
Directors whose term of office continues beyond this meeting are
Andrew F. Brimmer, Kent Dixon, Frank J. Fabozzi, Laurence D. Fink,
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, 2000.
Shareholders elected the two Directors and ratified the selection of
Deloitte & Touche LLP. The results of the voting was as follows:
VOTES FOR* VOTES AGAINST* ABSTENTIONS*
Richard E. Cavanagh............ 8,125 -- 55
James Clayburn La Force Jr..... 19,015,860 -- 315,066
Ratification of
Deloitte & Touche LLP ....... 19,059,314 84,910 186,702
----------
* The votes represent common and preferred shareholders voting as a single
class except for the election of Richard E. Cavanagh who was elected by the
preferred shareholders.
16
<PAGE>
--------------------------------------------------------------------------------
THE BLACKROCK INSURED MUNICIPAL 2008 TERM TRUST INC.
INVESTMENT SUMMARY
--------------------------------------------------------------------------------
THE TRUST'S INVESTMENT OBJECTIVE:
The BlackRock Insured Municipal2008 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 Advisors, Inc. (the "Advisor") is an SEC-registered investment
advisor. As of June 30, 2000, the Advisor and its affiliates (together,
"BlackRock") managed $177 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-two closed-end funds that are traded on either the New
York or American stock exchanges, and a $28 billion family of open-end funds.
BlackRock manages over 629 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 Advisor to be of comparable credit quality
(guaranteed, escrowed or backed in trust).
WHAT IS THE ADVISOR'S INVESTMENT STRATEGY?
The Advisor 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 Advisor 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 Advisor
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 to enhance the income of the portfolio. In order to maintain
competitive yields as the Trust approaches maturity and depending on market
conditions, the Advisor 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 first business day of the
month. For shares held in the shareholder's name, dividends may be reinvested in
additional shares of the Trust through the Trust's transfer agent, State Street
Bank and Trust Company. Investors who wish to hold shares in a brokerage account
should check with their financial advisor to determine whether their brokerage
firm offers dividend reinvestment services.
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.
Leverage also increases the duration (or price volatility of the net assets) of
the Trust, which can improve the performance of the Trust in a declining rate
environment, but can cause net assets to decline faster than the market in a
rapidly rising rate environment. The Advisor'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 the Advisor 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 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.
19
<PAGE>
BLACKROCK
DIRECTORS
Laurence D. Fink, CHAIRMAN
Andrew F. Brimmer
Richard E. Cavanagh
Kent Dixon
Frank J. Fabozzi
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 ADVISOR
BlackRock Advisors, Inc.
400 Bellevue Parkway
Wilmington, DE 19809
(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
Four Times Square
New York, NY 10036
LEGAL COUNSEL -- INDEPENDENT DIRECTORS
Debevoise & Plimpton
875 Third Avenue
New York, NY 10022
The accompanying financial statements as of June 30, 2000 were not audited
and accordingly, no opinion is expressed on them.
This report is for shareholder information.This is not a pros- pectus
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
[RECYCLE LOGO] Printed on recycled paper
THE BLACKROCK
INSURED MUNICIPAL
2008 TERM
TRUST INC.
--------------------------
SEMI-ANNUAL REPORT
JUNE 30, 2000
09247K-10-9
09247K-30-7
09247K-20-8
09247K-40-6
09247K-50-5
