--------------------------------------------------------------------------------
THE BLACKROCK CALIFORNIA 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 California 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 non-diversified closed-end bond fund whose shares are
traded on the New York Stock Exchange under the symbol "BFC." 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 and California income tax. The Trust
seeks to achieve this objective by investing in high credit quality ("AAA" or
insured to "AAA") California tax-exempt general obligation and revenue bonds
issued by city, county and state municipalities.
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 $14.50 $13.875 4.50% $14.625 $13.8125
--------------------------------------------------------------------------------
NET ASSET VALUE (NAV) $16.29 $16.11 1.12% $16.30 $15.80
--------------------------------------------------------------------------------
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
time 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.
California's dynamic economic expansion continues. In the second half of
1999 non-farm payroll grew 4% significantly exceeding the national rate (2.1%).
This expansion is projected to continue at a 3.5% annual rate in 2000. The State
accounts for approximately 40% of the nation's non-farm employment growth.
Unemployment dropped to 4.6% in February 2000, the state's lowest rate since
February 1959, and only 0.5% above the national level. Trade values from
California's customs districts continue to expand with both exports and imports
growing at the Ports of Los Angeles, San Francisco and San Diego.
The State's year-to-date revenues are $2.5 billion over projections. This
is primarily attributed to the increase in personal income tax receipts, which
may be a reflection of employees exercising their stock options. Furthermore,
sales tax receipts continue to show steady growth with an 8.2% increase in 1999
and projections for a 7.1% increase in 2000. The State's fiscal 2000 budget uses
conservative assumptions, which provides some flexibility. The improved
liquidity position should enable California to weather potential future
volatility in its economically sensitive revenue stream.
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 added to the County/City and
State General Obligations and Utility sectors. 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 $26,550,000 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.
3
<PAGE>
The following chart compares the Trust's current and December 31, 1999
asset composition:
--------------------------------------------------------------------------------
THE BLACKROCK CALIFORNIA INSURED MUNICIPAL 2008 TERM TRUST INC.
--------------------------------------------------------------------------------
SECTOR JUNE 30, 2000 DECEMBER 31, 1999
--------------------------------------------------------------------------------
Lease Revenue & Certificates
of Participation 23% 26%
--------------------------------------------------------------------------------
Water & Sewer 18% 20%
--------------------------------------------------------------------------------
County, City & State 17% 12%
--------------------------------------------------------------------------------
Transportation 15% 20%
--------------------------------------------------------------------------------
Utility/Power 10% 6%
--------------------------------------------------------------------------------
Special District 7% 7%
--------------------------------------------------------------------------------
Hospital 4% 5%
--------------------------------------------------------------------------------
Tax Revenue 4% 2%
--------------------------------------------------------------------------------
Education 2% 2%
--------------------------------------------------------------------------------
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 California 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 CALIFORNIA INSURED MUNICIPAL 2008 TERM TRUST INC.
--------------------------------------------------------------------------------
Symbol on New York Stock Exchange: BFC
--------------------------------------------------------------------------------
Initial Offering Date: September 18, 1992
--------------------------------------------------------------------------------
Closing Stock Price as of 6/30/00: $14.50
--------------------------------------------------------------------------------
Net Asset Value as of 6/30/00: $16.29
--------------------------------------------------------------------------------
Yield on Closing Stock Price as of 6/30/00 ($14.50)(1): 5.33%
--------------------------------------------------------------------------------
Current Monthly Distribution per Common Share(2): $0.064375
--------------------------------------------------------------------------------
Current Annualized Distribution per Common Share(2): $0.7725
--------------------------------------------------------------------------------
----------
(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 CALIFORNIA INSURED MUNICIPAL 2008 TERM TRUST INC.
PORTFOLIO OF INVESTMENTS JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL
AMOUNT OPTION CALL VALUE
RATING* (000) DESCRIPTION PROVISIONS+ (NOTE 1)
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
LONG-TERM INVESTMENTS--159.5%
CALIFORNIA--149.6%
California Hlth. Fac. Fin. Auth. Rev.,
AAA $ 6,850 Marin Gen. Hosp., Ser. A, 5.75%, 8/01/09, FSA ...................... 8/03 @ 102 $ 7,124,685
AAA 2,000 Sutter Hlth. Care Sys., 5.70%, 8/15/09, MBIA ....................... 8/06 @ 102 2,114,360
California St., G.O.,
AAA 3,000 5.50%, 4/01/09, MBIA ............................................... No Opt. Call 3,168,570
AAA 3,000 5.50%, 2/01/10, MBIA ............................................... No Opt. Call 3,169,920
AAA 2,000 6.25%, 9/01/08, FGIC ............................................... No Opt. Call 2,211,000
AAA 15,000 6.30%, 9/01/08, MBIA ............................................... No Opt. Call 16,632,900
California St. Pub. Wks. Brd.,
AAA 2,100 Energy Efficiency, Ser. A, 5.625%, 10/01/08, AMBAC ................. 10/05 @ 102 2,223,123
AAA 10,255++ Lease Rev., 6.40%, 9/01/01, MBIA ................................... N/A 10,696,375
AAA 9,165 California St. Wide Cmnty. Dev. Auth., Lease Rev.,
6.00%, 10/01/10, AMBAC ............................................. 10/02 @ 102 9,609,502
AAA 2,600 Castaic Lake Wtr. Agcy. C.O.P., Wtr. Sys. Impvt. Proj., Ser. A,
7.25%, 8/01/10, MBIA ............................................... No Opt. Call 3,084,536
AAA 5,515++ Central Coast Wtr. Auth. Rev., St. Wtr. Proj. Reg. Fac.,
6.40%, 10/01/02, AMBAC ............................................. N/A 5,861,673
AAA 5,500 Clovis Unified Sch. Dist., Ser. B, Zero Coupon, 8/01/08, FGIC ........ ETM 3,715,580
AAA 13,740 East Bay Mun. Utils. Dist., Wtr. Sys. Rev., 6.00%, 6/01/09, AMBAC .... 6/02 @ 102 14,350,743
AAA 4,025 Elsinore Valley Mun. Wtr. Dist., C.O.P., Ser. A, 6.00%,
7/01/09, FGIC ...................................................... No Opt. Call 4,393,730
Los Angeles Cnty. Asset Leasing Corp. Rev., AMBAC,
AAA 2,910 5.95%, 12/01/07 .................................................... No Opt. Call 3,161,744
AAA 8,090 6.00%, 12/01/08 .................................................... No Opt. Call 8,808,473
AAA 8,600 6.05%, 12/01/09 .................................................... No Opt. Call 9,415,108
AAA 1,000 Los Angeles Elec. Rev., 5.75%, 9/01/12, FGIC ......................... 9/03 @ 102 1,040,670
AAA 5,765++ Los Angeles Wastewtr. Sys. Rev., Ser. B, 6.25%, 6/01/02, AMBAC ....... N/A 6,076,483
AAA 3,075++ Marysville Hosp. Rev., Fremont-Rideout Hlth. Group, Ser. A,
6.20%, 1/01/03, AMBAC .............................................. N/A 3,265,927
AAA 8,000++ Modesto Irrig. Dist. Fin. Rev., Domestic Wtr. Proj., Ser. A,
6.00%, 9/01/02, AMBAC .............................................. N/A 8,425,680
Northern California Pwr. Agcy., Multiple Cap. Fac. Rev., Ser. A, MBIA,
AAA 430++ 6.40%, 8/01/02 ..................................................... N/A 455,731
AAA 570 6.40%, 8/01/07 ..................................................... 8/02 @ 102 602,712
AAA 1,280++ 6.50%, 8/01/02 ..................................................... N/A 1,359,104
AAA 1,725 6.50%, 8/01/08 ..................................................... 8/02 @ 102 1,827,724
AAA 1,000 Orange Cnty. Local Trans. Auth. Sales Tax Rev.,
6.00%, 2/15/09, MBIA ............................................... No Opt. Call 1,088,380
AAA 5,600 Pittsburg Redev. Agcy. Tax Alloc. Rev., Los Medanos Cmnty. Dev. Proj.,
5.50%, 8/01/07, FGIC ............................................... 8/02 @ 102 5,801,040
AAA 3,075++ Riverside Cnty., Trans. Comm. Sales Tax Rev., Ser. A,
6.50%, 6/01/01, MBIA ............................................... N/A 3,196,094
Sacramento Mun. Utils. Dist., Elec. Rev., Ser. C,
AAA 825 5.75%, 11/15/07, MBIA .............................................. ETM 891,083
AAA 1,675 5.75%, 11/15/07, MBIA .............................................. 11/02 @ 102 1,754,496
AAA 3,750 5.75%, 11/15/08, FGIC .............................................. ETM 3,880,837
AAA 2,500 5.75%, 11/15/08, FGIC .............................................. 11/02 @ 102 2,610,025
AAA 3,950 5.75%, 11/15/09, MBIA .............................................. ETM 4,237,362
AAA 750 5.75%, 11/15/09, MBIA .............................................. 11/02 @ 102 781,635
AAA 5,700 San Bernardino Cnty. C.O.P., Arpt. Impvt., 6.00%, 7/01/07, MBIA ...... 7/02 @ 102 5,979,471
AAA 5,000 San Bernardino Cnty. Trans. Auth., Sales Tax Rev.,
6.00%, 3/01/10, FGIC ............................................... ETM 5,207,500
AAA 11,000 San Diego Cnty. C.O.P., 5.625%, 9/01/12, AMBAC ....................... No Opt. Call 11,506,770
San Diego Cnty. Regl. Trans. Cmnty. Sales Tax Rev., Ser. A,
AAA 2,500 6.00%, 4/01/08, FGIC ............................................... ETM 2,576,150
AAA 7,830 6.00%, 4/01/08, MBIA ............................................... ETM 8,068,502
AAA 7,650 San Diego Redev. Agcy. Rev., Tax Allocation-Centre City Proj.,
6.00%, 9/01/08, AMBAC .............................................. 9/02 @ 102 8,026,304
</TABLE>
See Notes to Financial Statements.
5
<PAGE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL
AMOUNT OPTION CALL VALUE
RATING* (000) DESCRIPTION PROVISIONS+ (NOTE 1)
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
San Jose Arpt. Rev., MBIA,
AAA $ 8,010 6.00%, 3/01/09 ..................................................... 3/03 @ 102 $ 8,428,443
AAA 3,000 6.00%, 3/01/10 ..................................................... 3/03 @ 102 3,160,590
AAA 3,755 6.10%, 3/01/07 ..................................................... 3/03 @ 102 3,982,778
AAA 2,865++ Santa Clara Cnty. Fin. Auth., Fac. Replacement Proj. A,
6.50%, 11/15/04, AMBAC ............................................. N/A 3,155,654
AAA 2,820 Santa Rosa Wtr. Rev., Ser. B, 6.20%, 9/01/09, FGIC ................. 9/02 @ 101.5 2,952,596
AAA 5,000 So. California Rapid Trans. Dist., C.O.P.,Workers Comp. Fund,
6.00%, 7/01/10, MBIA ............................................... 1/01 @ 102.5 5,159,150
So. California Rapid Trans. Dist. Rev., Spec. Benefit Assmt.
Dist. A1, AMBAC,
AAA 5,750 5.50%, 9/01/09 ..................................................... 9/02 @ 100 5,836,882
AAA 5,500 6.00%, 9/01/08 ..................................................... 9/02 @ 102 5,770,545
AAA 8,500 Sonoma Cnty. C.O.P., Cap. Rites-Detention Fac.,
6.00%, 11/15/10, AMBAC ............................................. 11/02 @ 102 8,925,000
AAA 2,000 Univ. of California Rev., Multi-Purpose Projs.,
Ser. F-1989, 5.00%, 9/01/11, FGIC .................................. 9/06 @ 101 2,014,700
AAA 3,460++ West and Central Basin Fin. Auth. Rev., 6.125%, 8/01/02, AMBAC ....... N/A 3,648,397
AAA 2,160 West Sacramento Fin. Auth. Rev., Wtr. Sys. Impvt.,
5.25%, 8/01/08, FGIC ............................................... 8/02 @ 102 2,205,576
------------
253,642,013
------------
PUERTO RICO--9.9%
Puerto Rico Elec. Pwr. Auth. Rev., Ser. DD, FSA,
AAA 5,280 5.00%, 7/01/09 ..................................................... 7/08 @ 101.5 5,349,696
AAA 7,000 5.00%, 7/01/10 ..................................................... 7/08 @ 101.5 7,084,630
AAA 4,000 Puerto Rico Mun. Fin. Agcy., Ser. A, 5.625%, 8/01/10, FSA ............ 8/09 @ 101 4,242,800
------------
16,677,126
------------
TOTAL LONG-TERM INVESTMENTS (COST $254,151,238) ...................... 270,319,139
------------
SHORT-TERM INVESTMENT**--0.4%
A-1+ 700 Irvine, Impt. BD. Act 1915, Spec. Assmt. Dist. 97-17, 4.15%,
7/03/00, FRDD (cost $700,000) ...................................... N/A 700,000
------------
TOTAL INVESTMENTS--159.9% (COST $254,851,238) ........................ 271,019,139
Other assets in excess of liabilities--1.8% .......................... 3,038,030
Liquidation value of preferred stock--(61.7)% ........................ (104,550,000)
------------
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS--100% ................... $169,507,169
============
</TABLE>
----------
* Using the higher of Standard & Poor's, Moody's or Fitch's rating.
** For purposes of amortized cost valuation, the maturity date of this
instrument 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>
-----------------------------------------------------------------------------------------------------------------------------------
THE FOLLOWING ABBREVIATIONS ARE USED IN PORTFOLIO DESCRIPTIONS:
<S> <C>
AMBAC -- American Municipal Bond Assurance Corporation FRDD -- Floating Rate Daily Demand**
C.O.P. -- Certificate of Participation FSA -- Financial Security Assurance
ETM -- Escrowed to Maturity G.O. -- General Obligation
FGIC -- Financial Guaranty Insurance Company MBIA -- Municipal Bond Insurance Association
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
6
<PAGE>
--------------------------------------------------------------------------------
THE BLACKROCK CALIFORNIA INSURED
MUNICIPAL 2008 TERM TRUST INC.
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
ASSETS
Investments, at value (cost $254,851,238)
(Note 1) ..................................................... $271,019,139
Interest receivable ............................................ 4,397,043
Other assets ................................................... 13,975
------------
275,430,157
------------
LIABILITIES
Dividends payable--common stock ................................ 669,957
Due to Custodian ............................................... 239,240
Offering costs payable--preferred stock ........................ 235,635
Investment advisory fee payable (Note 2) ....................... 78,773
Dividends payable--preferred stock ............................. 27,117
Administration fee payable (Note 2) ............................ 22,506
Other accrued expenses ......................................... 99,760
------------
1,372,988
------------
NET INVESTMENT ASSETS .......................................... $274,057,169
============
Net investment assets were comprised of:
Common Stock:
Par value (Note 4) ......................................... $ 104,071
Paid-in capital in excess of par ........................... 144,047,319
Preferred Stock (Note 4) ..................................... 104,550,000
------------
248,701,390
Undistributed net investment income .......................... 9,187,878
Net unrealized appreciation .................................. 16,167,901
------------
Net investment assets, June 30, 2000 ......................... $274,057,169
============
Net assets applicable to common
shareholders ............................................... $169,507,169
============
Net asset value per common share:
($169,507,169 / 10,407,093 shares of
common stock issued and outstanding) ......................... $16.29
======
--------------------------------------------------------------------------------
THE BLACKROCK CALIFORNIA INSURED
MUNICIPAL 2008 TERM TRUST INC.
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
NET INVESTMENT INCOME
Income
Interest and discount earned ................................. $ 7,391,162
------------
Expenses
Investment advisory .......................................... 458,443
Administration ............................................... 130,984
Auction agent ................................................ 128,000
Reports to shareholders ...................................... 56,000
Custodian .................................................... 35,000
Legal ........................................................ 32,000
Directors .................................................... 21,000
Independent accountants ...................................... 18,500
Registration ................................................. 12,000
Transfer agent ............................................... 11,000
Miscellaneous ................................................ 35,441
------------
Total expenses ............................................... 938,368
------------
Net investment income .......................................... 6,452,794
------------
UNREALIZED GAIN ON
INVESTMENTS
Net change in unrealized appreciation on
investments .................................................. 1,667,863
------------
NET INCREASE IN NET INVESTMENT
ASSETS RESULTING FROM OPERATIONS ............................... $ 8,120,657
============
See Notes to Financial Statements.
7
<PAGE>
--------------------------------------------------------------------------------
THE BLACKROCK CALIFORNIA 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 .......................... $ 6,452,794 $ 12,199,431
Net change in unrealized appreciation
on investments ............................... 1,667,863 (12,439,396)
------------ ------------
Net increase (decrease) in net investment
assets resulting from operations ............. 8,120,657 (239,965)
------------ ------------
DIVIDENDS:
To common shareholders from net
investment income ............................ (4,019,653) (8,039,333)
To preferred shareholders from net
investment income ............................ (1,693,049) (2,182,935)
------------ ------------
Total dividends .............................. (5,712,702) (10,222,268)
------------ ------------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from additional
issuance of preferred shares ................. 25,977,490 --
------------ ------------
Total increase (decrease) .................... 28,385,445 (10,462,233)
------------ ------------
NET INVESTMENT ASSETS
Beginning of period .............................. 245,671,724 256,133,957
------------ ------------
End of period (including undistributed
net investment income of $9,187,878
and $8,447,786, respectively) .................. $274,057,169 $245,671,724
============ ============
See Notes to Financial Statements.
8
<PAGE>
--------------------------------------------------------------------------------
THE BLACKROCK CALIFORNIA INSURED MUNICIPAL 2008 TERM TRUST INC.
FINANCIAL HIGHLIGHTS (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED DECEMBER 31,
JUNE 30, ------------------------------------------------------------
2000 1999 1998 1997 1996 1995
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
PER COMMON SHARE OPERATING PERFORMANCE:
Net asset value, beginning of the period .......... $ 16.11 $ 17.12 $ 16.69 $ 15.86 $ 15.92 $ 13.66
-------- -------- -------- -------- -------- --------
Net investment income ............................. .62 1.17 1.18 1.15 1.11 1.12
Net realized and unrealized gain (loss)
on investments .................................. .16 (1.20) .25 .69 (.16) 2.27
-------- -------- -------- -------- -------- --------
Net increase (decrease) from investment
operations ...................................... .78 (.03) 1.43 1.84 .95 3.39
-------- -------- -------- -------- -------- --------
Dividend and distributions:
Dividends from net investment income to:
Common shareholders ........................... (.38) (.77) (.77) (.77) (.77) (.85)
Preferred shareholders ........................ (.16) (.21) (.23) (.24) (.24) (.28)
Distributions from net realized gain
on investments to:
Common shareholders ........................... -- -- -- -- ** --
Preferred shareholders ........................ -- -- -- -- ** --
Distributions in excess of net realized gain
on investments to:
Common shareholders ........................... -- -- -- -- ** **
Preferred shareholders ........................ -- -- -- -- ** **
-------- -------- -------- -------- -------- --------
Total dividends and distributions ................. (.54) (.98) (1.00) (1.01) (1.01) (1.13)
-------- -------- -------- -------- -------- --------
Capital charge with respect to issuance
of preferred shares ............................. (.06) -- -- -- -- --
-------- -------- -------- -------- -------- --------
Net asset value, end of period* ................... $ 16.29 $ 16.11 $ 17.12 $ 16.69 $ 15.86 $ 15.92
======== ======== ======== ======== ======== ========
Market value, end of period* ...................... $ 14.50 $ 13.88 $ 15.94 $ 15.25 $ 14.63 $ 13.63
======== ======== ======== ======== ======== ========
TOTAL INVESTMENT RETURN+ .......................... 7.35% (8.40)% 9.77% 9.90% 13.67% 20.57%
======== ======== ======== ======== ======== ========
RATIOS TO AVERAGE NET ASSETS OF COMMON
SHAREHOLDERS:
Expenses++ ........................................ 1.12%+++ .98% .91% .98% 1.03% 1.02%
Net investment income before preferred
stock dividends++ ............................... 7.74%+++ 7.01% 6.96% 7.11% 7.11% 7.46%
Preferred stock dividends ......................... 2.03%+++ 1.25% 1.36% 1.48% 1.56% 1.85%
Net investment income available to common
shareholders .................................... 5.71%+++ 5.76% 5.60% 5.63% 5.55% 5.61%
SUPPLEMENTAL DATA:
Average net assets of common shareholders
(in thousands) .................................. $167,629 $174,070 $175,760 $167,984 $161,839 $156,774
Portfolio turnover ................................ 0% 0% 0% 0% 3% 13%
Net assets of common shareholders, end of period
(in thousands) .................................. $169,507 $167,672 $178,134 $173,711 $165,038 $165,719
Preferred stock outstanding (in thousands) ........ $104,550 $ 78,000 $ 78,000 $ 78,000 $ 78,000 $ 78,000
Asset coverage per share of preferred stock,
end of period ................................... $ 65,539 $ 78,765 $ 82,111 $ 80,701 $ 77,919 $ 78,133
</TABLE>
----------
* Net asset value and market value are published in BARRON'S on Saturday and
THE WALL STREET JOURNAL on Monday.
** Actual amount paid from realized gains to preferred shareholders was
$0.00136 per common share for the year ended December 31, 1996, and to
common shareholders was $0.004363 per share for the year ended December 31,
1996. Actual amount paid in excess of net realized gain on investments to
preferred shareholders was $0.0004 and $0.0007 per common share for the
years ended December 31, 1996 and 1995, respectively, and to common
shareholders was $0.0013 and $0.0021 per share for the years ended December
31, 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, if any, are assumed for purposes of this calculation, to be
reinvested at prices obtained under the Trust's dividend reinvestment plan.
Total investment return does not reflect brokerage commissions. Total
investment returns for periods 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 shares and stock dividends, relative to the
average net assets of common shareholders. Ratios do not reflect the effect
of dividend payments to preferred shareholders.
+++ Annualized
The information above represents the unaudited operating performance data for a
share of common stock outstanding, total investment return, ratios to average
net assets and other supplemental data for the periods indicated. This
information has been determined based upon financial information provided in the
financial statements and market value data for Trust's common shares.
See Notes to Financial Statements.
9
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--------------------------------------------------------------------------------
THE BLACKROCK CALIFORNIA INSURED
MUNICIPAL 2008 TERM TRUST INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------
NOTE 1. ORGANIZATION & ACCOUNTING POLICIES
The BlackRock California Insured Municipal 2008 Term Trust Inc. (the "Trust")
was organized in Maryland on August 7, 1992 as a non-diversified closed-end
management investment company. The Trust's investment objective is to manage a
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 and California State income taxes. The ability of issuers of debt
securities held by the Trust to meet their obligations may be affected by
economic developments in the state, a 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.
10
<PAGE>
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.
NOTE 3. PORTFOLIO SECURITIES
Purchases of investment securities, other than short- term investments for the
period ended June 30, 2000 aggregated $26,875,480. There were no sales, other
than short-term investments, during the period ended June 30, 2000.
The Federal income tax basis of the Trust's investments at June 30, 2000
was the same as the basis for financial reporting, and accordingly, net
unrealized appreciation was $16,167,901 (gross unrealized
appreciation--$16,182,461, gross unrealized depreciation--$14,560).
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 10,407,093 common shares outstanding at
June 30, 2000, the Advisor owned 7,093 shares. As of June 30, 2000, there were
4,182 preferred shares outstanding as follows: Series W28--1,560 and Series
W7--2,622, which includes 1,062 shares of Series W7 issued on March 10, 2000.
On March 10, 2000, the Trust reclassified 1,062 shares of common stock and
issued an additional 1,062 shares of Series W7 preferred shares. The additional
shares issued have identical rights and features of the existing Series W7
preferred shares. Estimated offering costs of $307,010 and underwriting discount
of $265,500 have been charged to paid-in capital in excess of the common shares.
Dividends on Series W7 are cumulative at a rate which is reset every 7 days
based on the results of an auction. Dividends on Series W28 are also cumulative
at a rate which is reset every 28 days based on the results of an auction.
Dividend rates ranged from 2.20% to 5.10% 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 $0.064375 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 Stock totalled $329,784 in aggregate for the two outstanding Preferred
Stock series.
11
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THE BLACKROCK CALIFORNIA 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.
12
<PAGE>
--------------------------------------------------------------------------------
THE BLACKROCK CALIFORNIA 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 ............ 3,119 -- --
James Clayburn La Force, Jr. ... 8,622,621 -- 149,434
Ratification of
Deloitte & Touche LLP ........ 8,627,069 75,483 69,503
----------
* 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.
13
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--------------------------------------------------------------------------------
THE BLACKROCK CALIFORNIA INSURED MUNICIPAL 2008 TERM TRUST INC.
INVESTMENT SUMMARY
--------------------------------------------------------------------------------
THE TRUST'S INVESTMENT OBJECTIVE
The BlackRock California Insured Municipal 2008 Term Trust's investment
objective is to provide current income exempt from regular federal and
California 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, BlackRock and its affiliates (together
"BlackRock") managed over $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 California
municipal obligations insured as to the timely payment of both principal and
interest. The Trust may invest up to 20% of total assets in uninsured California
municipal obligations which are rated Aaa by Moody's or AAA by S&P, or are
determined by the 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 California
municipal obligations and retaining a small amount of 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 and California
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. Since shorter-term securities typically yield less than
longer-term securities, this strategy will likely result in a decline in the
Trust's income over time. It is important to note that the Trust will be managed
so as to preserve the integrity of the return of the initial offering price. If
market conditions, such as high interest rate volatility, force a choice between
current income and risking the return of the initial offering price, it is
likely that the return of the initial offering price will be emphasized.
HOW ARE THE TRUST'S SHARES PURCHASED AND SOLD? DOES THE TRUST PAY DIVIDENDS
REGULARLY?
The Trust's shares are traded on the New York Stock Exchange which provides
investors with liquidity on a daily basis. Orders to buy or sell shares of the
Trust must be placed through a registered broker or financial advisor. The Trust
pays monthly dividends which are typically paid on the 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.
14
<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 CONSIDERATIONS. The income and dividends paid by the Trust are likely
to decline to some extent over the term of the Trust due to the anticipated
shortening of the dollar-weighted average maturity of the Trust's assets.
LEVERAGE. The Trust utilizes leverage through the issuance of preferred stock
which involves special risks. The Trust's net asset value and market value may
be more volatile due to its use of leverage.
MARKET PRICE OF SHARES. The shares of closed-end investment companies such as
the Trust trade on the New York Stock Exchange (NYSE symbol: BFC) and as such
are subject to supply and demand influences. As a result, shares may trade at a
discount or a premium to their net asset value.
ILLIQUID SECURITIES. The Trust may invest in securities that are illiquid,
although under current market conditions the Trust expects to do so to only a
limited extent. Investing in these securities involves special risks.
ANTITAKEOVER PROVISIONS. Certain antitakeover provisions will make a change in
the Trust's business or management more difficult without the approval of the
Trust's Board of Directors and may have the effect of depriving shareholders of
an opportunity to sell their shares at a premium above the prevailing market
price.
MUNICIPAL OBLIGATIONS. Municipal obligations include debt obligations issued by
states, cities, and local authorities, and possessions and certain territories
of the United States to obtain funds for various public purposes, including the
construction of public facilities, the refinancing of outstanding obligations
and the obtaining of funds for general operating expenses and for loans to other
public institutions and facilities. The value of municipal debt securities
generally varies inversely with changes in prevailing market interest rates.
Depending on the amount of call protection that the securities in the Trust
have, the Trust may be subject to certain reinvestment risks in environments of
declining interest rates.
ALTERNATIVE MINIMUM TAX (AMT). The Trust may invest in securities subject to
AMT. The Trust currently holds no securities that are subject to AMT.
15
<PAGE>
--------------------------------------------------------------------------------
THE BLACKROCK CALIFORNIA 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 deduction of
expenses. This Trust declares and pays dividends on a
monthly basis.
DIVIDEND REINVESTMENT: Shareholders may have all distributions of dividends
and capital gains automatically reinvested into
additional shares of the Trust.
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 investment, 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 the U.S.
Government securities which are held in escrow and
are used to pay principal and interest on the
tax-exempt issue and to retire the bond in full at
the date indicated, typically at a premium to par.
16
<PAGE>
--------------------------------------------------------------------------------
BLACKROCK ADVISORS, INC.
SUMMARY OF CLOSED-END FUNDS
--------------------------------------------------------------------------------
TAXABLE TRUSTS
--------------------------------------------------------------------------------
STOCK MATURITY
PERPETUAL TRUSTS SYMBOL DATE
------ ------
The BlackRock Income Trust Inc. BKT N/A
The BlackRock North American Government Income Trust Inc. BNA N/A
The BlackRock High Yield Trust BHY N/A
TERM TRUSTS
The BlackRock Target Term Trust Inc. BTT 12/00
The BlackRock 2001 Term Trust Inc. BTM 06/01
The BlackRock Strategic Term Trust Inc. BGT 12/02
The BlackRock Investment Quality Term Trust Inc. BQT 12/04
The BlackRock Advantage Term Trust Inc. BAT 12/05
The BlackRock Broad Investment Grade 2009 Term Trust Inc. BCT 12/09
TAX-EXEMPT TRUSTS
--------------------------------------------------------------------------------
STOCK MATURITY
PERPETUAL TRUSTS SYMBOL DATE
------ ------
The BlackRock Investment Quality Municipal Trust Inc. BKN N/A
The BlackRock California Investment Quality Municipal Trust Inc. RAA N/A
The BlackRock Florida Investment Quality Municipal Trust RFA N/A
The BlackRock New Jersey Investment Quality Municipal Trust Inc. RNJ N/A
The BlackRock New York Investment Quality Municipal Trust Inc. RNY N/A
The BlackRock Pennsylvania Strategic Municipal Trust BPS N/A
The BlackRock Strategic Municipal Trust BSD N/A
TERM TRUSTS
The BlackRock Municipal Target Term Trust Inc. BMN 12/06
The BlackRock Insured Municipal 2008 Term Trust Inc. BRM 12/08
The BlackRock California Insured Municipal 2008 Term Trust Inc. BFC 12/08
The BlackRock Florida Insured Municipal 2008 Term Trust BRF 12/08
The BlackRock New York Insured Municipal 2008 Term Trust Inc. BLN 12/08
The BlackRock Insured Municipal Term Trust Inc. BMT 12/10
17
<PAGE>
--------------------------------------------------------------------------------
BLACKROCK ADVISORS, INC.
AN OVERVIEW
--------------------------------------------------------------------------------
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. 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.
BlackRock's fixed income product was introduced in 1988 by a team of highly
seasoned fixed income professionals. These professionals had extensive
experience creating, analyzing and trading a variety of fixed income
instruments, including the most complex structured securities. In fact, several
individuals at BlackRock were responsible for developing many of the major
innovations in the mortgage-backed and asset-backed securities markets,
including the creation of the first CMO, the floating rate CMO, the
senior/subordinated pass-through and the multi-class asset-backed security.
BlackRock is unique among asset management and advisory firms in the
emphasis it places on the development of proprietary analytical capabilities.
Over one quarter of the firm's professionals are dedicated to the design,
maintenance and use of these systems, which are not otherwise available to
investors. BlackRock's proprietary analytical tools are used for evaluating, and
designing fixed income investment strategies for client portfolios. Securities
purchased include mortgages, corporate bonds, municipal bonds and a variety of
hedging instruments.
BlackRock has developed investment products that respond to investors'
needs and has been responsible for several major innovations in closed-end
funds. In fact, BlackRock introduced the first closed-end mortgage fund, the
first taxable and tax-exempt closed-end funds to offer a finite term, the first
closed-end fund to achieve a AAA rating by Standard & Poor's, and the first
closed-end fund to invest primarily in North American Government securities.
Currently, BlackRock's closed-end funds have dividend reinvestment plans, which
are designed to provide ongoing demand for the stock in the secondary market.
BlackRock manages a wide range of investment vehicles, each having specific
investment objectives and policies.
In view of our continued desire to provide a high level of service to all
our shareholders, BlackRock maintains a toll-free number for your questions. The
number is (800) 227-7BFM (7236). We encourage you to call us with any questions
that you may have about your BlackRock funds and we thank you for the continued
trust that you place in our abilities.
IF YOU WOULD LIKE FURTHER INFORMATION
PLEASE DO NOT HESITATE TO CALL BLACKROCK AT (800) 227-7BFM
18
<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 Administrators, 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) 669-1BFM
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 prospectus
intended for use in the purchase or sale of any securities.
THE BLACKROCK CALIFORNIA INSURED
MUNICIPAL 2008 TERM TRUST INC.
c/o Princeton Administrators, L.P.
P.O. Box 9095, Princeton, NJ 08543-9095
(800) 543-6217
09247G 10 8
09247G 20 7
[RECYCLE LOGO] Printed on recycled paper 09247G 30 6
---------
BLACKROCK
THE ---------
CALIFORNIA INSURED
MUNICIPAL 2008
TERM TRUST INC.
---------------------
SEMI-ANNUAL REPORT
JUNE 30, 2000
[GRAPHIC OMITTED]
