- --------------------------------------------------------------------------------
THE BLACKROCK FLORIDA INSURED MUNICIPAL 2008 TERM TRUST
ANNUAL REPORT TO SHAREHOLDERS
REPORT OF INVESTMENT ADVISER
- --------------------------------------------------------------------------------
January 31, 1996
Dear Shareholder,
Since the inception of The BlackRock Florida Insured Municipal 2008 Term
Trust in 1992, the market for investments in fixed income securities has
witnessed an unprecedented amount of interest rate volatility, which has changed
the landscape for fixed income investors. 1995 has been a great year for
investments in the bond market following the disappointments of 1994, as yields
have declined and the value of fixed income securities has increased
dramatically.
Looking forward, we maintain a positive outlook for the market's performance
in 1996. The economy currently appears to be growing at a steady rate and
inflation appears to be under control. Market participants are beginning to
agree that the Federal Reserve has achieved the "soft landing" that they set out
to accomplish through a series of interest rate increases last year, and are
optimistic for a further ease in the Fed's monetary policy should a budget
accord emphasizing fiscal restraint be reached in Washington.
BlackRock Financial Management, Inc. is completing its first year as part of
PNC Bank Corporation, becoming an essential part of PNC's Asset Management Group
by taking a leadership role in their fixed income management operations. We have
witnessed consistent growth of our assets under management, which now stand at
approximately $34 billion, as both retail and institutional fixed income
investors continue to recognize the value of our risk management capabilities
and long term investment philosophy.
We look forward to maintaining your respect and confidence and to serving
your financial needs in the coming year.
Sincerely,
/s/ Laurence D. Fink /s/ Ralph L. Schlosstein
Laurence D. Fink Ralph L. Schlosstein
Chairman President
1
<PAGE>
January 31, 1996
Dear Shareholder:
We are pleased to present the annual report for The BlackRock Florida Insured
Municipal 2008 Term Trust (NYSE symbol: "BRF") for the year ended December 31,
1995. The past year has been an exciting and challenging time to be
participating in the fixed income markets, and we would like to take this
opportunity to review the Trust's strong performance from both a stock price and
net asset value (NAV) perspective, as well as to discuss the opportunities
available to the Trust in the current lower interest rate environment.
The Trust is a closed-end bond fund whose 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 and Florida intangible personal property tax. The Trust seeks
to achieve this objective by investing in high credit quality ("AAA" or insured
to "AAA") Florida tax-exempt general obligation and revenue bonds issued by
city, county and state municipalities.
The table below summarizes the performance of the Trust's stock price and net
asset value (the market value of its bonds per share) over the fiscal year:
<TABLE><CAPTION>
12/31/95 12/31/94 CHANGE HIGH LOW
<S> <C> <C> <C> <C> <C>
STOCK PRICE $15.000 $12.125 +23.71% $15.000 $12.125
NET ASSET VALUE (NAV) $ 16.04 $ 13.93 +15.15% $ 16.05 $ 13.93
PREMIUM/(DISCOUNT) TO NAV (6.48% ) (12.96% ) +6.03% (3.20%) (12.96%)
</TABLE>
THE FIXED INCOME MARKETS
The dramatic rally in the fixed income markets, which caused interest rates
to fall and prices of fixed income securities to rise since late 1994 has
changed the market landscape for fixed income investors. The Treasury market
rallied throughout the year, sparked by a deceleration in economic growth from
the torrid pace of 1994 as well as continued signs of subdued inflation. Over
the past twelve months, interest rates have declined substantially across the
Treasury and municipal yield curves. At the end of December, the yield of the
Treasury 30-year bond fell below 6.00% for the first time since October 1993,
closing the year at 5.95%. This represents a fall of 193 basis points (1.93%)
from year-end 1994.
While the overall performance of the municipal debt market somewhat lagged
the rally in the Treasury market, municipal securities posted strong performance
in 1995. Yields on municipal securities have declined dramatically from their
fourth quarter 1994 levels, led by a 123 basis point drop (1.23%) in the yield
on AAA 30-year General Obligation securities from 6.51% on December 31, 1994 to
5.28% on December 31, 1995. Although seasonal demand from coupon payments and
redemptions did not fully match expectations at times during the year, a
relatively light amount of new issuance improved technical conditions in the
municipal market and encouraged the rise in price for these securities.
Market participants have been attuned to the continuing debate in Washington
on tax reform. Most notably, several Congressional leaders and Presidential
hopefuls have proposed a variety of tax simplification plans, of which the most
extreme proposal would be a flat tax that would remove the tax-free advantage of
municipal income by exempting all investment income from taxation. On January
17, 1996, The Commission on Economic Growth and Tax Reform, headed by former
congressman Jack Kemp, released its much anticipated report. Their
recommendations emphasized a need for tax simplification towards a "single tax
bracket" without definitively recommending a particular rate of taxation, thus
setting the stage for increased discussion on this issue in the election year.
2
<PAGE>
The Florida state economy continues to expand into the service industry,
becoming less dependent on tourism. Housing starts and construction have been
strong and state employment has increased over 3% during the past year, leading
many analysts to be optimistic for continued growth. The state municipal debt
market benefited from a relatively light new issuance calendar and strong retail
demand, causing the market to perform well relative to the national market. We
are optimistic that the expanding state economy will provide a positive
environment for continued strong performance of the Florida municipal bond
market in 1996.
Due to investor concerns over the potential threat of tax reform, it is
likely that the municipal market may continue to experience price volatility in
1996. While the municipal market rallied and yields declined over 1995,
municipal securities were trading at cheap levels relative to comparable
Treasuries at year-end. BlackRock believes that municipal securities have the
potential to be the best performing sector of the fixed income markets in 1996
should the tax reform proposals currently negatively affecting municipal bond
performance be eliminated.
THE TRUST'S PORTFOLIO AND INVESTMENT STRATEGY
The Trust's portfolio is invested in high credit-quality municipal issues
with ratings of "AAA" by Standard & Poor's Corporation (or of equivalent quality
determined by other major rating agencies). In addition, the majority of the
individual securities within the portfolio are insured as to timely payment of
interest and principal by municipal bond insurance companies whose long-term
obligations are rated "AAA." As such, Standard & Poor's has given a AAAf rating
to the portfolio.
BlackRock Financial Management actively manages the Trust's portfolio to
diversify exposure to various sectors, issuers, revenue sources and security
types. BlackRock's investment strategy emphasizes a relative value approach,
rotating sectors to benefit from changing market conditions. As the municipal
bond market rallied throughout 1995, prices of most securities in the portfolio
increased above their purchase price. By selling one of these bonds, the Trust
would recognize a gain and be forced to make a taxable distribution to
shareholders. As one of the Trust's primary objectives is to provide tax-free
income, the portfolio curbed its trading activity to minimize any taxable
distributions.
The Trust employs leverage at about 35% of total assets to enhance its income
by borrowing at short term municipal rates and investing the proceeds in longer
maturity issues which have higher yields. The degree to which the Trust can
benefit from its use of leverage affects the ability of the Trust to pay high
monthly income. The two reductions made to the Fed funds target rate in December
and January lowered the overnight bank lending rate by 0.50% and is expected to
result in lower short term municipal rates. This could provide the Trust an
opportunity to earn more excess income in the coming year through its use of
leverage.
THE BLACKROCK FLORIDA INSURED MUNICIPAL 2008 TERM TRUST
SECTOR DECEMBER 31, 1995 DECEMBER 31, 1994
County, City &
State 17% 15%
Water & Sewer 15% 16%
Tax Revenue 15% 12%
Transportation 14% 17%
Hospital 12% 13%
Lease Revenue 6% 8%
Building 6% 6%
Utility 5% 4%
Resource Recovery 4% 4%
Education 2% 2%
Other 4% 3%
3
<PAGE>
We look forward to managing the Trust in the coming year to benefit from the
opportunities available to investors in the municipal market. We thank you for
your investment and continued interest in The BlackRock Florida Insured
Municipal 2008 Term Trust. Please feel free to call our marketing center at
(800) 227-7BFM (7236) if you have any specific questions which were not
addressed in this report.
Sincerely yours,
Robert S. Kapito Kevin Klingert
Vice Chairman and Portfolio Manager Managing Director and Municipal
BlackRock Financial Management, Inc. Portfolio Manager
BlackRock Financial Management, Inc.
THE BLACKROCK FLORIDA INSURED MUNICIPAL 2008 TERM TRUST
Symbol on New York Stock Exchange: BRF
Initial Offering Date: September 18, 1992
Closing Stock Price as of 12/31/95: $15.00
Net Asset Value as of 12/31/95: $16.04
Yield on Closing Stock Price as of 12/31/95 ($15.00)1: 5.75%
Current Monthly Distribution per Common Share2: $0.07188
Current Annualized Distribution per Common Share2: $0.8626
- --------------
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>
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THE BLACKROCK FLORIDA INSURED
MUNICIPAL 2008 TERM TRUST
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1995
- --------------------------------------------------------------------------------
<TABLE><CAPTION>
OPTION
PRINCIPAL CALL
RATING* AMOUNT PROVISIONS++ VALUE
(UNAUDITED) (000) DESCRIPTION (UNAUDITED) (NOTE 1)
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
LONG-TERM INVESTMENTS--144.2%
AAA $ 1,500 Altamonte Springs Wtr. & Swr. Sys. Rev., 6.00%, $ 1,612,410
10/01/08, FGIC....................................... 10/02 at 102
AAA 10,000 Brevard Cnty. Sch. Brd., C.O.P., Ser. A, 6.375%, 11,074,400
7/01/06, AMBAC....................................... 07/02 at 102
Canaveral Port Auth. Impvt. Rev., FGIC:
AAA 2,980 6.00%, 6/01/07...................................... 06/02 at 102 3,215,062
AAA 3,155 6.00%, 6/01/08...................................... 06/02 at 102 3,394,780
AAA 1,000 Dade Cnty. Aviation Rev., Ser. A, 6.00%, 10/01/08, 1,083,550
AMBAC................................................ 10/05 at 102
AAA 5,000 Dade Cnty. Gtd. Entitlement Rev., Ser. A, Zero 2,649,200
Coupon,
2/01/08, MBIA....................................... 02/06 at 92.852
Dade Cnty. Sch. Brd., C.O.P., Ser. A, MBIA:
AAA 2,000 5.75%, 5/01/08...................................... 05/04 at 101 2,123,280
AAA 3,465 5.75%, 5/01/12...................................... 05/04 at 101 3,598,368
AAA 2,500 Dade Cnty. Sch. Dist. Rev., 6.125%, 8/01/07, FGIC.... 08/01 at 100 2,655,225
AAA 2,500 Daytona Beach Wtr. & Swr. Rev., 6.00%, 11/15/09, 2,668,950
AMBAC................................................ 11/02 at 102
Duval Cnty. Sch. Dist., G.O., AMBAC:
AAA 3,015 6.30%, 8/01/06...................................... 08/02 at 102 3,330,942
AAA 9,000 6.30%, 8/01/07...................................... 08/02 at 102 9,959,310
Escambia Cnty. Utils. Auth. Sys. Rev., FGIC:
AAA 2,450 Ser. A, 6.10%, 1/01/09.............................. 01/03 at 102 2,629,757
AAA 1,595 Ser. B, 6.125%, 1/01/09............................. No Opt. Call 1,765,777
AAA 8,255 Florida St. Brd. of Ed. Wtr. & Swr. Sys. Rev., Pub. 8,849,525
Ed., 6.125%, 6/01/08, FGIC.......................... 06/02 at 101
Florida St. Div. Bd. Fin. Dept. Rev. Dept., Nat. Res.
& Pres.,
Ser. 2000-A:
AAA 3,500 6.25%, 7/01/08, MBIA................................ 07/02 at 101 3,815,560
AAA 6,000 6.25%, 7/01/09, MBIA................................ 07/02 at 101 6,523,380
AAA 5,000 6.25%, 7/01/10, MBIA................................ 07/02 at 101 5,407,050
AAA 2,500 6.75%, 7/01/07, AMBAC............................... 07/01 at 102 2,820,900
AAA 3,000 Greater Orlando Aviation Auth., Arpt. Facs. Rev., 3,275,280
Ser. D, 6.20%, 10/01/08, AMBAC...................... 10/02 at 102
AAA 10,000 Hillsborough Cnty., Tampa Intl. Arpt. Aviation Rev., 10,295,200
Ser. A, 5.75%, 10/01/11, AMBAC...................... 10/99 at 104
Hillsborough Cnty., Cap. Impvt., FGIC:
AAA 2,630 6.25%, 8/01/11...................................... 08/04 at 101 2,850,237
AAA 1,500 6.60%, 8/01/10...................................... 08/04 at 101 1,688,490
AAA 5,000 Hillsborough Cnty., Sch. Brd., C.O.P. 5.875%, 5,370,900
7/01/08, MBIA........................................ 07/04 at 102
Indian Trace Cmnty. Dev. Dist., Wtr. Mgmt. Spec.
Benefit, Ser. A, MBIA:
AAA 3,000 5.625%, 5/01/08..................................... 05/05 at 102 3,166,200
AAA 2,910 5.75%, 5/01/09...................................... 05/05 at 102 3,076,539
AAA 4,000 Jacksonville Elec. Auth. Rev., 5.75%, 10/01/12, 4,141,280
AMBAC................................................ 10/02 at 101
AAA 5,000 Jacksonville Gtd. Rev., Ser. A, 5.50, 10/01/12, 5,080,800
AMBAC................................................ 10/02 at 102
AAA 2,000 Lakeland Elec. & Wtr. Rev., Jr. Sub. Lien, 5.875%, 2,106,060
10/01/08, FGIC....................................... No Opt. Call
AAA 9,850 Lakeland Hosp. Sys. Rev., Regl. Med. Care Ctr. Proj., 10,647,850
Ser. B, 6.10%, 11/15/08, FGIC....................... 11/02 at 102
AAA 1,100 Lakeland Wastewater Impvt. Rev., 5.50%, 10/01/08, 1,145,221
MBIA................................................. 10/02 at 102
AAA 4.500 Lee Cnty. Arpt. Rev., Ser. A, 5.50%, 10/01/10, 4,556,610
AMBAC................................................ 10/02 at 100
AAA 4,750 Lee Cnty. G.O., Ser. A, 7.30%, 10/01/07, MBIA........ 10/99 at 102 5,320,000
</TABLE>
5
<PAGE>
- --------------------------------------------------------------------------------
<TABLE><CAPTION>
OPTION
PRINCIPAL CALL
RATING* AMOUNT PROVISIONS++ VALUE
(UNAUDITED) (000) DESCRIPTION (UNAUDITED) (NOTE 1)
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
AAA $ 1,650 Lee Cnty. Local Option Gas Tax Rev., 5.50%, 10/01/09, $ 1,673,199
MBIA................................................. 10/99 at 100
AAA 1,000 Marion Cnty. Hosp. Dist. Rev, Munroe Regl. Med. Ctr., 1,091,760
6.20%,
10/01/07, FGIC...................................... 10/02 at 102
AAA 3,750 Melbourne Wtr. & Swr. Rev., Ser. C, 6.25%, 10/01/08, 4,084,312
FGIC................................................. 10/02 at 102
AAA 11,000 Miami Beach Hlth. Facs. Auth. Hosp. Rev., Mt. Sinai 12,020,030
Med. Ctr. Proj., 6.25%, 11/15/07, CGIC.............. 11/02 at 102
Miami, G.O., FGIC:
AAA 1,345 5.90%, 12/01/08..................................... No Opt. Call 1,484,060
AAA 1,000 6.00%, 12/01/09..................................... No Opt. Call 1,106,370
AAA 1,000 Orange Cnty. Pub. Svc. Tax, 5.70%, 10/01/08, FGIC.... 10/05 at 102 1,069,120
AAA 1,500 Orange Cnty. Tourist Devel. Tax Rev., Ser. A, 5.85%, 1,638,945
10/01/08, MBIA....................................... No Opt. call
AAA 2,000 Osceola Cnty. Trans. Rev., Osceola Pkwy. Proj., 2,142,860
5.95%,
4/01/08, MBIA....................................... 04/02 at 102
Palm Bay Util. Rev., Ser. B, MBIA:
AAA 1,505 6.10%, 10/01/02+.................................... No Opt. Call 1,679,866
AAA 1,595 6.10%, 10/01/02+.................................... No Opt. Call 1,780,323
AAA 7,085 Pasco Cnty. Solid Waste Disp. & Rec. Sys. Rev., 7,520,727
6.00%, 4/01/09....................................... 04/02 at 102
AAA 11,000 Pasco Cnty. Wtr. & Swr. Rev., Ser. A, 6.00%, 11,710,600
10/01/09, FGIC....................................... 10/02 at 102
AAA 1,000 Seminole Cnty. Sch. Brd., C.O.P., Ser. A, 5.90%, 1,083,890
7/01/08, MBIA........................................ 07/04 at 102
AAA 2,000 Seminole Cnty. Wtr. & Swr. Rev., 6.00%, 10/01/09, 2,191,880
MBIA................................................. No Opt. Call
AAA 2,500 Tampa Wtr. & Swr. Rev., Ser. A, 6.25%, 10/01/12, 2,661,425
FGIC................................................. 10/02 at 101
AAA 4.065 Volusia Cnty. Edl. Fac. Auth. Rev., Embry-Riddle 4,474,467
Aeronautical Univ., 6.50%, 10/15/08, CONNIE LEE..... 10/02 at 102
------------------
TOTAL INVESTMENTS (cost $184,714,900)................ 201,311,927
Other assets in excess of liabilities--3.1%.......... 4,316,143
Liquidation value of preferred stock--(47.3)%........ (66,000,000)
------------------
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS--100%... $ 139,628,070
------------------
------------------
</TABLE>
- ------------
<TABLE>
<C> <S>
+ These bonds are prerefunded. See glossary for definition.
++ Option Call provisions: date (month/year) and prices of the earliest optional call or
redemption. There may be other call provisions at varying prices at later dates.
* Rating: using the higher of Standard & Poor's, Moody's or Fitch's.
</TABLE>
KEY TO ABBREVIATIONS
AMBAC--American Municipal Bond Assurance Corporation
CGIC--Capital Guaranteed Insurance Company
C.O.P.--Certificate of Participation
CONNIE LEE--College Construction Loan Insurance Association
FGIC--Financial Guaranty Insurance Company
G.O.--General Obligation Bond
MBIA--Municipal Bond Insurance Association
See Notes to Financial Statements.
6
<PAGE>
- ----------------------------------------------
THE BLACKROCK FLORIDA INSURED
MUNICIPAL 2008 TERM TRUST
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1995
ASSETS
Investments, at value (cost
$184,714,900) (Note 1)........... $201,311,927
Cash.............................. 1,683,898
Interest receivable............... 3,145,317
Receivable for Investments sold... 1,733,150
Deferred organization expense and
other assets..................... 32,189
------------
207,906,481
------------
LIABILITIES
Payable for investments
purchased......................... 1,986,860
Dividends payable--common stock... 62,983
Advisory fee payable (Note 2)..... 61,011
Administration fee payable
(Note 2).......................... 17,432
Dividends payable--preferred
stock............................. 543
Other accrued expenses............ 149,582
------------
2,278,411
------------
NET INVESTMENT ASSETS............. $205,628,070
------------
------------
Net investment assets were
comprised of:
Common shares of beneficial
interest:
Par value (Note 4)............. $ 87,071
Paid-in capital in excess of
par.......................... 120,907,481
Preferred shares of beneficial
interest (Note 4).............. 66,000,000
------------
186,994,552
Undistributed net investment
income.......................... 2,249,118
Accumulated net realized loss..... (212,627)
Net unrealized appreciation....... 16,597,027
------------
Net investment assets, December
31, 1995........................ $205,628,070
------------
------------
Net assets applicable to common
shareholders.................... $139,628,070
------------
------------
Net asset value per common share
of beneficial interest:
($139,628,070/8,707,093 common
shares of beneficial interest
issued and outstanding).......... $16.04
------------
------------
- ----------------------------------------------
THE BLACKROCK FLORIDA INSURED
MUNICIPAL 2008 TERM TRUST
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1995
- ----------------------------------------------
NET INVESTMENT INCOME
Income
Interest and discount earned..... $11,397,380
------------
Expenses
Investment advisory.............. 698,330
Administration................... 199,523
Auction agent.................... 165,000
Custodian........................ 50,000
Reports to shareholders.......... 38,000
Trustees......................... 28,000
Legal............................ 26,000
Transfer agent................... 18,000
Audit............................ 18,000
Miscellaneous.................... 113,095
------------
Total expenses................... 1,353,948
------------
Net investment income............. 10,043,432
------------
REALIZED AND UNREALIZED GAIN ON
INVESTMENTS (NOTE 3)
Net realized gain on
investments....................... 522,630
Net change in unrealized
appreciation on investments...... 17,750,167
------------
Net gain on investments........... 18,272,797
------------
NET INCREASE IN NET INVESTMENT
ASSETS RESULTING FROM
OPERATIONS........................ $28,316,229
------------
------------
See Notes to Financial Statements.
7
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK FLORIDA INSURED
MUNICIPAL 2008 TERM TRUST
STATEMENTS OF CHANGES IN NET INVESTMENT ASSETS
- --------------------------------------------------------------------------------
<TABLE><CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1995 1994
------------ ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET INVESTMENT ASSETS
Operations:
Net investment income.................................................. $ 10,043,432 $ 10,034,136
Net realized gain (loss) on investments................................ 522,630 (721,911)
Net change in unrealized appreciation (depreciation) on investments.... 17,750,167 (19,065,650)
------------ ------------
Net increase (decrease) in net investment assets resulting from
operations........................................................... 28,316,229 (9,753,425)
------------ ------------
Dividends and distributions:
To common shareholders from net investment income...................... (7,501,505) (7,510,390)
To preferred shareholders from net investment income................... (2,442,963) (1,884,436)
To common shareholders in excess of net realized gain on investments... (8,768) --
To preferred shareholders in excess of net realized gain on
investments.......................................................... (2,986) --
------------ ------------
(9,956,222) (9,394,826)
------------ ------------
Total increase (decrease)........................................... 18,360,007 (19,148,251)
NET INVESTMENT ASSETS
Beginning of year....................................................... 187,268,063 206,416,314
------------ ------------
End of year............................................................. $205,628,070 $187,268,063
------------ ------------
------------ ------------
</TABLE>
See Notes to Financial Statements.
8
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK FLORIDA INSURED
MUNICIPAL 2008 TERM TRUST
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE><CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------------------------
1995 1994 1993
-------------- -------------- --------------
<S> <C> <C> <C>
PER COMMON SHARE OPERATING PERFORMANCE:
Net asset value, beginning of the period............. $ 13.93 $ 16.13 $ 14.28
------- ------- -------
Net investment income............................... 1.15 1.15 1.15
Net realized and unrealized gain (loss) on
investments....................................... 2.10 (2.27) 1.75
------- ------- -------
Net increase (decrease) from investment operations... 3.25 (1.12) 2.90
------- ------- -------
Dividends from net investment income to:
Preferred shareholders.............................. (0.28) (0.22) (0.17)
Common shareholders................................. (0.86) (0.86) (0.86)
Distributions from net realized gain on investments
to:
Preferred shareholders.............................. -- -- -- **
Common shareholders................................. -- -- (0.02)
Distributions in excess of net realized gain on
investments to:
Preferred shareholders.............................. -- ** -- --
Common shareholders................................. -- ** -- --
------- ------- -------
Total dividends and distributions.................... (1.14) (1.08) (1.05)
------- ------- -------
Capital charge with respect to issuance of shares.... -- -- --
------- ------- -------
Net asset value, end of period***.................... $ 16.04 $ 13.93 $ 16.13
------- ------- -------
------- ------- -------
Market value, end of period***....................... $ 15.00 $ 12.125 $ 14.875
------- ------- -------
------- ------- -------
TOTAL INVESTMENT RETURN+............................. 31.26% (13.27)% 9.94%
------- ------- -------
------- ------- -------
RATIOS TO AVERAGE NET ASSETS OF COMMON
SHAREHOLDERS:+++
Expenses............................................. 1.02% 1.09% 0.99%
Net investment income................................ 7.55% 7.86% 7.44%
SUPPLEMENTAL DATA:
Average net assets of common shareholders (in
thousands)........................................... $ 133,042 $ 127,640 $ 134,476
Portfolio turnover................................... 11% 30% 3%
Net assets of common shareholders, end of period (in
thousands)........................................... $ 139,628 $ 121,268 $ 140,416
Preferred stock outstanding (in thousands)........... $ 66,000 $ 66,000 $ 66,000
Assets coverage per share of preferred stock, end of
period............................................... $ 77,889## $ 141,870 $ 156,376
<CAPTION>
SEPTEMBER 28,
1992*
THROUGH
DECEMBER 31,
1992
-----------------
<S> <C>
PER COMMON SHARE OPERATING PERFORMANCE:
Net asset value, beginning of the period............. $ 14.10
-----------------
Net investment income............................... 0.15
Net realized and unrealized gain (loss) on
investments.......................................... 0.32
-----------------
Net increase (decrease) from investment operations... 0.47
-----------------
Dividends from net investment income to:
Preferred shareholders.............................. (0.02)
Common shareholders................................. (0.07)
Distributions from net realized gain on investments
to:
Preferred shareholders.............................. --
Common shareholders................................. --
Distributions in excess of net realized gain on
investments to:
Preferred shareholders.............................. --
Common shareholders................................. --
-----------------
Total dividends and distributions.................... (0.09)
-----------------
Capital charge with respect to issuance of shares.... (0.20)
-----------------
Net asset value, end of period***.................... $ 14.28 #
-----------------
-----------------
Market value, end of period***....................... $ 14.25
-----------------
-----------------
TOTAL INVESTMENT RETURN+............................. 1.56%
-----------------
-----------------
RATIOS TO AVERAGE NET ASSETS OF COMMON
SHAREHOLDERS:+++
Expenses............................................. 0.92 %++
Net investment income................................ 4.23 %++
SUPPLEMENTAL DATA:
Average net assets of common shareholders (in
thousands)........................................... $ 118,875
Portfolio turnover................................... 41 %
Net assets of common shareholders, end of period (in
thousands)........................................... $ 124,380
Preferred stock outstanding (in thousands)........... $ 66,000
Assets coverage per share of preferred stock, end of
period............................................... $ 144,000
</TABLE>
- ------------
* Commencement of investment operations.
** Actual amount paid to preferred shareholders was $0.00034 and $0.00344 per
common share for the fiscal years ended December 31, 1995 and 1993
respectively. For fiscal year ended December 31, 1995 the actual amount paid
to common shareholders was $0.001 per common share.
*** Net asset value and market value are published in The Wall Street Journal
each Monday.
# Net asset value immediately after the closing of the first public offering
was $14.06.
## A stock split occurred on July 24, 1995 (Note 4).
+ Total investment return is calculated assuming a purchase of common stock at
the current market price on the first day and a sale at the current market
value on the last day of the period. Dividends and distributions, if any are
assumed for purposes of this calculation to be reinvested at prices obtained
under the Trust's dividend reinvestment plan. Total investment return does
not reflect brokerage commissions. Total investment return for periods of
less than a full year are not annualized.
++ Annualized.
+++ Ratios calculated on the basis of income and expenses applicable to both the
common and preferred shares relative to the average net assets of common
shareholders. Ratios do not reflect the effect of dividend payments to
preferred shareholders.
The information above represents the audited operating performance data for a
share of common stock outstanding, total investment return, ratios to average
net assets and other supplemental data for the period indicated. This
information has been determined based upon financial information provided in the
financial statements and market value data for Trust's shares.
See Notes to Financial Statements.
9
<PAGE>
- ----------------------------------------------
THE BLACKROCK FLORIDA INSURED
MUNICIPAL 2008 TERM TRUST
NOTES TO FINANCIAL STATEMENTS
- ----------------------------------------------
Note 1. Accounting The BlackRock Florida
Policies Insured Municipal 2008
Term Trust (the
"Trust") was organized
in Massachusetts on August 7, 1992 as a non-diversified closed-end management
investment company. The Trust's investment objective is to manage a
non-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 and Florida intangible property tax. 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 a pricing service which uses information with respect to
transactions in bonds, quotations from bond dealers, market transactions in
comparable securities and various relationships between securities in
determining values. Any securities or other assets for which such current market
quotations are not readily available are valued at fair value as determined in
good faith under procedures established by and under the general supervision and
responsibility of the Trust's Board of Trustees.
Short-term securities which mature in more than 60 days are valued at current
market quotations. Short-term securities which mature in 60 days or less are
valued at amortized cost, if their term to maturity from date of purchase is 60
days or less, or by amortizing their value on the 61st day prior to maturity, if
their original term to maturity from date of purchase exceeded 60 days.
OPTION SELLING/PURCHASING: When the Trust sells or purchases an option, an
amount equal to the premium received or paid by the Trust is recorded as a
liability or an asset and is subsequently adjusted to the current market value
of the option written or purchased. Premiums received or paid from writing or
purchasing options which expire unexercised are treated by the Trust on the
expiration date as realized gains or losses. The difference between the premium
and the amount paid or received on effecting a closing purchase or sale
transaction, including brokerage commissions, is also treated as a realized gain
or loss. If an option is exercised, the premium paid or received is added to the
proceeds from the sale or cost of the purchase in determining whether the Trust
has realized a gain or a loss on investment transactions. The Trust, as writer
of an option, may have no control over whether the underlying securities may be
sold (call) or purchased (put) and as a result bears the market risk of an
unfavorable change in the price of the security underlying the written option.
FINANCIAL FUTURES CONTRACTS: A futures contract is an agreement between two
parties to buy and sell a financial instrument for a set price on a future date.
Initial margin deposits are made upon entering into futures contracts and can be
either cash or securities. During the period the futures contract is open,
changes in the value of the contract are recognized as unrealized gains or
losses by "marking-to-market" on a daily basis to reflect the market value of
the contract at the end of each day's trading. Variation margin payments are
made or received, depending upon whether unrealized gains or losses are
incurred. When the contract is closed, the Trust records a realized gain or loss
equal to the difference between proceeds from (or cost of) the closing
transaction and the Trust's basis in the contract.
The Trust may invest in financial futures contracts primarily for the purpose
of hedging its existing portfolio securities or securities the Trust intends to
purchase against fluctuations in value caused by changes in prevailing market
interest rates. Should interest rates move unexpectedly, the Trust may not
achieve the anticipated benefits of the financial futures contracts and may
realize a loss. The use of futures transactions involves the risk of imperfect
correlation in movements in the price of futures contracts, interest rates and
the underlying hedged assets.
SHORT SALES: The Trust may make short sales of securities as a method of hedging
potential price declines in similar securities owned. When the Trust makes a
short sale, it may borrow the securities sold short and deliver it to the
broker-dealer through which it made the short sale as collateral for its
obligation to deliver the security upon conclusion of the sale. The Trust may
have to pay a fee to borrow the particular securities and may be obligated to
pay over any payments received on such borrowed securities. A gain, limited to
the price at which the Trust sold the security short, or a loss, unlimited as to
dollar amount, will be recognized upon the termination of a short sale if the
market price is greater or less than the proceeds originally received.
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 or 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.
10
<PAGE>
DIVIDENDS AND DISTRIBUTIONS: The Trust declares and pays dividends and
distributions to common shareholders monthly from net investment income. Net
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.
DEFERRED ORGANIZATION EXPENSES: A total of $40,000 was incurred in connection
with the organization of the Trust. These costs have been deferred and are being
amortized ratably over a period of sixty months from the date the Trust
commenced investment operations.
RECLASSIFICATION OF CAPITAL ACCOUNTS: Effective Janu-ary 1, 1994, the Trust
began accounting and reporting for perma-nent differences between financial and
tax reporting in accor-dance with the American Institute of Certified Public
Accountants' Statement of Position 93-2: Determination, Disclosure and Financial
Statement Presentation of Income, Capital Gain and Return of Capital
Distributions by Investment Companies. The effect of adopting the statement for
the year ended December 31, 1995 was to decrease accumulated net realized loss
and increase undistributed net investment income by $1,592. Net investment
income, net realized gains and net assets were not affected by this change.
Note 2. Agreements The Trust has an
Investment Advisory
Agreement with
BlackRock Financial
Management, Inc. (the "Adviser") and an Administration Agreement with Princeton
Administrators L.P. (the "Administrator"), an indirect wholly owned subsidiary
of Merrill Lynch & Co., Inc.
The investment advisory fee paid to the Adviser is computed weekly and
payable monthly at an annual rate of 0.35% of the Trust's average weekly net
investment assets. The administration fee paid to the Administrator is also
computed weekly and payable monthly at an annual rate of 0.10% of the Trust's
average weekly net investment assets.
Pursuant to the agreements, the Adviser provides continuous supervision of
the investment portfolio and pays the compensation of officers of the Trust who
are affiliated persons of the Adviser. The Administrator pays occupancy and
certain clerical and accounting costs of the Trust. The Trust bears all other
costs and expenses.
On February 28, 1995, the Adviser was acquired by PNC Bank, N.A. Following
acquisition, the Adviser has become a wholly-owned corporate subsidiary of PNC
Asset Management Group, Inc., the holding company for PNC's asset management
businesses.
Note 3. Portfolio Purchases and sales of
Securities investment securities,
other than short- term
investments, for the year
ended December 31, 1995, aggregated $21,381,554 and $20,815,211, respectively.
The Federal income tax basis of the Trust's investments at December 31, 1995
was substantially the same as the basis for financial reporting, and
accordingly, unrealized appreciation was $16,597,027 (both a gross and net
basis).
For Federal income tax purposes, the Trust had a capital loss carryforward at
December 31, 1995 of approximately $212,000 which will expire in 2002.
Accordingly, no capital gain distribution is expected to be paid to shareholders
until net gains have been realized in excess of such amount.
Note 4. Capital There are 200 million
shares of $.01 par
value common stock
authorized. Of the 8,707,093 common shares outstanding at December 31, 1995, the
Adviser owned 7,093 shares. As of December 31, 1995, there were 2,640 Series R7
preferred shares outstanding.
The Trust may classify or reclassify any unissued shares of common stock into
one or more series of preferred stock. On November 23, 1992, the Trust
reclassified 1,320 shares of common stock and issued a series of Auction Market
Preferred Stock ("Preferred Stock") as follows: Series R7--1,320 shares. The
Preferred Stock has a liquidation value of $25,000 per share plus any
accumulated but unpaid dividends.
Dividends on Series R7 are cumulative at a rate which is reset every 7 days
based on the results of an auction. Dividend rates ranged from 0.10% to 4.55%
for the year ended December 31, 1995.
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 trustees. In addition, the Investment
Company Act of 1940 requires that along with approval by stockholders that might
otherwise be required, the approval of the holders of a majority of any
outstanding preferred shares, voting separately as a class would be required to
(a) adopt any plan of
11
<PAGE>
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.
On May 16, 1995 shareholders approved a proposal to split each share of the
Trust's Auction Rate Municipal Preferred Stock into two shares and
simultaneously reduce each share's liquidation preference from $50,000 to
$25,000 plus accumulated but unpaid dividends. The stock split occurred on July
24, 1995.
Note 5. Dividends Subsequent to December
31, 1995, the Board of
Trustees of the Trust
declared a dividend
from undistributed earnings of $.0719 per common share payable January 31, 1996
to shareholders of record on January 16, 1996.
For the period January 1, 1996, to January 31, 1996 dividends declared on
Preferred Stock totalled $164,423 in aggregate for the outstanding Preferred
Stock series.
Note 6. Quarterly Data
(Unaudited)
<TABLE><CAPTION>
NET REALIZED AND
UNREALIZED GAINS
NET INVESTMENT INCOME (LOSSES) ON
INVESTMENTS
PER PER
TOTAL COMMON COMMON
QUARTERLY PERIOD INCOME AMOUNT SHARE AMOUNT SHARE
<S> <C> <C> <C> <C> <C>
January 1, 1994 to March
31, 1994.................. $ 2,845,690 $ 2,485,780 $ .28 $ (14,523,493) $ (1.67)
April 1, 1994 to June 30,
1994...................... 2,875,395 2,464,160 .28 (402,833) (.04)
July 1, 1994 to September
30, 1994.................. 2,861,337 2,513,722 .29 (1,293,027) (.15)
October 1, 1994 to
December 31, 1994......... 2,861,034 2,570,474 .30 (3,568,208) (.41)
January 1, 1995 to March
31, 1995.................. 2,873,801 2,536,617 .29 9,815,974 1.13
April 1, 1995 to June 30,
1995...................... 2,872,445 2,531,161 .29 1,239,806 .14
July 1, 1995 to September
30, 1995.................. 2,787,430 2,444,889 .28 2,964,653 .34
October 1, 1995 to
December 31, 1995......... 2,863,704 2,530,765 .29 4,252,364 .49
<CAPTION>
NET INCREASE (DECREASE) IN NET
INVESTMENT ASSETS RESULTING FROM DIVIDENDS AND DISTRIBUTIONS
COMMON SHARES PREFERRED
PER PER
OPERATIONS COMMON COMMON SHARES*
QUARTERLY PERIOD AMOUNT SHARE AMOUNT SHARE AMOUNT
<S> <C> <C> <C> <C>
January 1, 1994 to March
31, 1994.................. $ (12,037,713) $ (1.39) $ 1,877,598 $ .22 $ 345,500
April 1, 1994 to June 30,
1994...................... 2,061,327 .24 1,877,597 .21 455,310
July 1, 1994 to September
30, 1994.................. 1,220,695 .14 1,877,598 .22 510,550
October 1, 1994 to
December 31, 1994......... (997,734) (.11) 1,877,597 .21 573,076
January 1, 1995 to March
31, 1995.................. 12,352,591 1.42 1,877,580 .22 628,827
April 1, 1995 to June 30,
1995...................... 3,770,967 .43 1,877,535 .21 671,954
July 1, 1995 to September
30, 1995.................. 5,409,542 .62 1,877,580 .22 617,632
October 1, 1995 to
December 31, 1995......... 6,783,129 .78 1,877,578 .21 527,536
<CAPTION>
PER SHARE PRICE OF PERIOD
COMMON COMMON STOCK END NET
QUARTERLY PERIOD SHARE HIGH LOW ASSET VALUE
January 1, 1994 to March
31, 1994.................. $ .04 $ 15.375 $ 14.125 $ 14.49
April 1, 1994 to June 30,
1994...................... .05 14.875 14.000 14.46
July 1, 1994 to September
30, 1994.................. .06 14.875 14.000 14.45
October 1, 1994 to
December 31, 1994......... .07 14.875 14.000 13.93
January 1, 1995 to March
31, 1995.................. .07 14.375 12.375 15.06
April 1, 1995 to June 30,
1995...................... .08 14.750 14.250 15.20
July 1, 1995 to September
30, 1995.................. .07 14.750 14.250 15.53
October 1, 1995 to
December 31, 1995......... .06 15.000 14.250 16.04
</TABLE>
- --------------
* For the year ended December 31, 1995, the average annualized rate paid to
preferred shareholders was 3.71%.
12
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK FLORIDA INSURED MUNICIPAL 2008 TERM TRUST
REPORT OF INDEPENDENT AUDITORS
- --------------------------------------------------------------------------------
The Shareholders and
Board of Directors of
The BlackRock Florida Insured Municipal 2008 Term Trust:
We have audited the accompanying statement of assets and liabilities of The
BlackRock Florida Insured Municipal 2008 Term Trust, including the portfolio of
investments, as of December 31, 1995, and the related statement of operations
for the year then ended, the statement of changes in net investment assets for
each of the two years in the period then ended, and the financial highlights for
each of the three years in the period then ended and for the period September
28, 1992 (commencement of investment operations) to December 31, 1992. These
financial statements and financial highlights are the responsibility of the
Trust's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned at December
31, 1995, by correspondence with the custodian and brokers; where replies were
not received from brokers, we performed other auditing procedures. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of The BlackRock
Florida Insured Municipal 2008 Term Trust as of December 31, 1995, the results
of its operations, the changes in its net investment assets and the financial
highlights for the respective stated periods, in conformity with generally
accepted accounting principles.
N07804mh.g01,1610,240,H
Deloitte & Touche LLP
New York, New York
February 9, 1996
13
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK FLORIDA INSURED MUNICIPAL 2008 TERM TRUST
TAX INFORMATION
- --------------------------------------------------------------------------------
We are required by the Internal Revenue Code to advise you within 60 days of
the Trust's fiscal year end as to the federally tax-exempt interest dividends
received by you during such fiscal year. Accordingly, we are advising you that
all regular dividends paid by the Trust during the fiscal year were federally
tax-exempt interest dividends.
- --------------------------------------------------------------------------------
DIVIDEND REINVESTMENT PLAN
- --------------------------------------------------------------------------------
Pursuant to the Trust's Dividend Reinvestment Plan (the "Plan"), shareholders
may elect to have all distributions of dividends and capital gains automatically
reinvested by State Street Bank & Trust Company (the "Plan Agent") in Trust
shares. Shareholders who do not participate in the Plan will receive all
distributions in cash paid by check in United States dollars mailed directly to
the shareholders of record (or if the shares are held in street or other nominee
name, then to the nominee) by the custodian, as dividend disbursing agent.
The Plan Agent serves as agent for the shareholders in administering the
Plan. After the Trust declares a dividend or determines to make a capital gain
distribution, the Plan Agent will, as agent for the participants, receive the
cash payment and use it to buy Trust shares in the open market on the New York
Stock Exchange for the participants' accounts. The Trust will not issue shares
under the Plan.
Participants in the Plan may withdraw from the Plan upon written notice to
the Plan Agent and will receive certificates for whole Trust shares and a cash
payment will be made for any fraction of a Trust share.
The Plan Agent's fees for the handling of the reinvestment of dividends and
distributions will be paid by the Trust. However, each participant will pay a
pro rata share of brokerage commissions incurred with respect to the Plan
Agent's open market purchases in connection with the reinvestment of dividends
and distributions. The automatic reinvestment of dividends and distributions
will not relieve participants of any federal income tax that may be payable on
such dividends or distributions.
Experience under the Plan may indicate that changes are desirable.
Accordingly, the Trust reserves the right to amend or terminate the Plan as
applied to any dividend or distribution paid subsequent to written notice of the
change sent to all shareholders of the Trust at least 90 days before the record
date for the dividend or distribution. The Plan also may be amended or
terminated by the Plan Agent upon at least 90 days' written notice to all
shareholders of the Trust. All correspondence concerning the Plan should be
directed to the Plan Agent at (800) 699-1BFM. The address is on the front of
this report.
- --------------------------------------------------------------------------------
ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
There have been no material changes in the Trust's investment objectives or
policies that have not been approved by the shareholders. There have been no
changes in the Trust's charter or by-laws. There have been no changes in the
principal risk factors associated with the investment in the Trust. There have
been no changes in the persons who are primarily responsible for the day-to-day
management of the Trust's portfolio.
14
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK FLORIDA INSURED MUNICIPAL 2008 TERM TRUST
INVESTMENT SUMMARY
- --------------------------------------------------------------------------------
THE TRUST'S INVESTMENT OBJECTIVE
The Trust's investment objective is to provide current income exempt from
Federal income tax and Florida intangible personal property tax, and to return
$15 per share (the initial public offering price per share) to investors on or
about December 31, 2008.
WHO MANAGES THE TRUST?
BlackRock Financial Management, Inc. (BlackRock or the Adviser) is the
investment adviser for the Trust. BlackRock is a registered investment adviser
specializing in fixed income securities. Currently, BlackRock manages
approximately $34 billion of assets across the government, mortgage, corporate
and municipal sectors. These assets are managed on behalf of institutional and
individual investors in 21 closed-end funds traded on the New York or American
Stock exchanges, several open-end funds and separate accounts for more than 80
clients in the U.S. and overseas. BlackRock is a subsidiary of PNC Asset
Management Group, Inc. which is a division of PNC Bank, N.A., the nation's
eleventh largest banking organization.
WHAT CAN THE TRUST INVEST IN?
The Trust intends to invest at least 80% of its total assets in Florida
municipal obligations insured as to the timely payment of principal and
interest. The Trust may invest up to 20% in uninsured Florida municipal
obligations which are rated Aaa by Moody's or AAA by S&P, or are determined by
the Adviser to be of comparable credit quality (guaranteed, escrowed or backed
in trust).
WHAT IS THE ADVISER'S INVESTMENT STRATEGY?
The Adviser will seek to meet the Trust's investment objective by managing
the assets of the Trust so as to return the initial offering price ($15 per
share) at maturity. The Trust will implement a conservative strategy that will
seek to closely match the maturity of the assets of the portfolio with the
future return of the initial investment at the end of 2008. At the Trust's
termination, BlackRock expects that the value of the securities which have
matured, combined with the value of the securities that are sold, if any, will
be sufficient to return the initial offering price to investors. On a continuous
basis, the Trust will seek its objective by actively managing its portfolio of
Florida municipal obligations and retaining a small amount of income each year.
In addition to seeking the return of the initial offering price, the Adviser
also seeks to provide current income exempt from Federal income tax and Florida
intangible personal tax to investors. The portfolio managers will attempt to
achieve this objective by investing in securities that provide competitive
income. In addition, leverage will be used (in an amount up to 35% of the
portfolio assets) to enhance the income of the portfolio. In order to maintain
competitive yields as the Trust approaches maturity and depending on market
conditions, the Adviser will attempt to purchase securities with call protection
or maturities as close to the Trust's maturity date as possible. Securities with
call protection should provide the portfolio with some degree of protection
against reinvestment risk during times of lower prevailing interest rates. Since
the Trust's primary goal is to return the initial offering price at maturity,
any cash that the Trust receives prior to its maturity date will be reinvested
in securities with maturities which coincide with the remaining term of the
Trust. Since shorter-term securities typically yield less than longer-term
securities, this strategy will likely result in a decline in the Trust's income
over time. It is important to note that the Trust will be managed so as to
preserve the integrity of the return of the initial offering price. If market
conditions, such as high interest rate volatility, force a choice between
current income and risking the return of the initial offering price, it is
likely that the return of the initial offering price will be emphasized.
15
<PAGE>
HOW ARE THE TRUST'S SHARES PURCHASED AND SOLD? DOES THE TRUST PAY DIVIDENDS
REGULARLY?
The Trust's shares are traded on the New York Stock Exchange which provides
investors with liquidity on a daily basis. Orders to buy or sell shares of the
Trust must be placed through a registered broker or financial advisor. The Trust
pays monthly dividends which are typically paid on the last business day of the
month. For shares held in the shareholder's name, dividends may be reinvested in
additional shares of the fund through the Trust's transfer agent, Boston
Financial Data Services. 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.
LEVERAGE CONSIDERATIONS IN A TERM TRUST
Under current market conditions, leverage increases the income earned by the
Trust. The Trust employs leverage primarily through the issuance of preferred
stock. Leverage permits the Trust to borrow money at short-term rates and
reinvest that money in longer-term assets which typically offer higher interest
rates. The difference between the cost of the borrowed funds and the income
earned on the proceeds that are invested in longer term assets is the benefit to
the Trust from leverage. In general, the portfolio is typically leveraged at
approximately 35% of total assets.
Leverage also increases the duration (or price volatility of the net assets)
of the Trust, which can improve the performance of the fund in a declining rate
environment, but can cause net assets to decline faster than the market in a
rapidly rising rate environment. BlackRock's portfolio managers continuously
monitor and regularly review the Trust's use of leverage and the Trust may
reduce, or unwind, the amount of leverage employed should BlackRock consider
that reduction to be in the best interests of the shareholders.
SPECIAL CONSIDERATIONS AND RISK FACTORS RELEVANT TO TERM TRUSTS
The Trust is intended to be a long-term investment and is not a short-term
trading vehicle.
RETURN OF INITIAL INVESTMENT. Although the objective of the Trust is to
return its initial offering price upon termination, there can be no assurance
that this objective will be achieved.
DIVIDEND CONSIDERATIONS. The income and dividends paid by the Trust are
likely to decline to some extent over the term of the Trust due to the
anticipated shortening of the dollar-weighted average maturity of the Trust's
assets.
LEVERAGE. The Trust utilizes leverage through the issuance of preferred stock
which involves special risks. The Trust's net asset value and market value may
be more volatile due to its use of leverage.
MARKET PRICE OF SHARES. The shares of closed-end investment companies such as
the Trust trade on the New York Stock Exchange (NYSE symbol: BRF) and as such
are subject to supply and demand influences. As a result, shares may trade at a
discount or a premium to their net asset value.
ILLIQUID SECURITIES. The Trust may invest in securities that are illiquid,
although under current market conditions the Trust expects to do so to only a
limited extent. Investing in these securities involves special risks.
ANTITAKEOVER PROVISIONS. Certain antitakeover provisions will make a change
in the Trust's business or management more difficult without the approval of the
Trust's Board of Directors and may have the effect of depriving shareholders of
an opportunity to sell their shares at a premium above the prevailing market
price.
MUNICIPAL OBLIGATIONS. Municipal obligations include debt obligations issued
by states, cities, and local authorities, and possessions and certain
territories of the United States to obtain funds for various public purposes,
including the construction of public facilities, the refinancing of outstanding
obligations and the obtaining of funds for general operating expenses and for
loans to other public institutions and facilities. The value of municipal debt
securities generally varies inversely with changes in prevailing market interest
rates. Depending on the amount of call protection that the securities in the
Trust have, the Trust may be subject to certain reinvestment risks in
environments of declining interest rates.
ALTERNATIVE MINIMUM TAX (AMT). The Trust may invest in securities subject to
alternative minimum tax. The Trust currently holds no securities that are
subject to AMT.
16
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK FLORIDA INSURED MUNICIPAL 2008 TERM TRUST
GLOSSARY
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
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 and The New York Times on Saturday and
The Wall Street Journal each Monday.
PREMIUM: When a fund's stock price is greater than its net asset value, the fund is said to
be trading at a premium.
PREREFUNDED 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.
</TABLE>
17
<PAGE>
- --------------------------------------------------------------------------------
BLACKROCK FINANCIAL MANAGEMENT, INC.
SUMMARY OF CLOSED-END FUNDS
- --------------------------------------------------------------------------------
TAXABLE TRUSTS
- --------------------------------------------------------------------------------
<TABLE><CAPTION>
MATURITY
PERPETUAL TRUSTS STOCK SYMBOL DATE
------------ --------
<S> <C> <C>
The BlackRock Income Trust Inc. BKT N/A
The BlackRock North American Government Income Trust Inc. BNA N/A
TERM TRUSTS
The BlackRock 1998 Term Trust Inc. BBT 12/98
The BlackRock 1999 Term Trust Inc. BNN 12/99
The BlackRock Target Term Trust Inc. BTT 12/00
The BlackRock 2001 Term Trust Inc. BLK 06/01
The BlackRock Strategic Term Trust Inc. BGT 12/02
The BlackRock Investment Quality Term Trust Inc. BQT 12/04
The BlackRock Advantage Term Trust Inc. BAT 12/05
The BlackRock Broad Investment Grade 2009 Term Trust Inc. BCT 12/09
</TABLE>
TAX-EXEMPT TRUSTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MATURITY
PERPETUAL TRUSTS STOCK SYMBOL DATE
------------ --------
<S> <C> <C>
The BlackRock Investment Quality Municipal Trust Inc. BKN N/A
The BlackRock California Investment Quality Municipal Trust Inc. RAA N/A
The BlackRock Florida Investment Quality Municipal Trust RFA N/A
The BlackRock New Jersey Investment Quality Municipal Trust Inc. RNJ N/A
The BlackRock New York Investment Quality Municipal Trust Inc. RNY N/A
TERM TRUSTS
The BlackRock Municipal Target Term Trust Inc. BMN 12/06
The BlackRock Insured Municipal 2008 Term Trust Inc. BRM 12/08
The BlackRock California Insured Municipal 2008 Term Trust Inc. BFC 12/08
The BlackRock Florida Insured Municipal 2008 Term Trust BRF 12/08
The BlackRock New York Insured Municipal 2008 Term Trust Inc. BLN 12/08
The BlackRock Insured Municipal Term Trust Inc. BMT 12/10
</TABLE>
IF YOU WOULD LIKE FURTHER INFORMATION
PLEASE CALL BLACKROCK AT (800) 227-7BFM
OR CONSULT WITH YOUR FINANCIAL ADVISOR.
18
<PAGE>
- --------------------------------------------------------------------------------
BLACKROCK FINANCIAL MANAGEMENT, INC.
AN OVERVIEW
- --------------------------------------------------------------------------------
BlackRock Financial Management, Inc. ("BlackRock"), is a registered
investment adviser which specializes in managing high quality fixed income
securities, both taxable and tax-exempt. BlackRock currently manages
approximately $34 billion of assets across the government, mortgage, corporate
and municipal sectors. These assets are managed on behalf of institutional and
individual investors in 21 closed-end funds traded on the New York or American
Stock Exchanges, several open-end funds and over 80 institutional clients in the
United States and overseas. BlackRock's institutional investor base includes
Chrysler Corporation Master Retirement Trust, General Retirement System of the
City of Detroit, State Treasurer of Florida, General Electric Pension Trust and
Unisys Corporation Master Trust.
BlackRock was formed in April 1988 by fixed income professionals who sought
to create an asset management firm specializing in managing fixed income
securities for individual and institutional investors. The professionals at
BlackRock have extensive experience creating, analyzing and trading a variety or
fixed income instruments, including the most complex structured securities. In
fact, individuals at BlackRock are responsible for many of the major innovations
in the mortgage-backed and asset-backed securities markets, including the
creation of the 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
significant emphasis it places on the development of proprietary analytical
capabilities. A quarter of the professionals at BlackRock work full-time in the
design, maintenance and use of such systems which are otherwise not generally
available to investors. BlackRock's proprietary analytical tools are used for
evaluating, investing in and designing investment strategies and portfolios of
fixed income securities, including mortgage securities, corporate debt
securities or tax-exempt securities and a variety of hedging instruments.
BlackRock has developed investment products which respond to investors' needs
and has been responsible for several major innovations in closed-end funds.
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 AAAf rating by Standard & Poor's, and the first closed-end fund to
invest primarily in North American Government securities. BlackRock's closed-end
funds currently have dividend reinvestment plans which are designed to provide
an ongoing source of demand for the stock in the secondary market. BlackRock
manages a ladder of alternative investment vehicles, with each fund 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
you may have about your BlackRock funds and thank you for the continued trust
you place in our abilities.
IF YOU WOULD LIKE FURTHER INFORMATION
PLEASE CALL BLACKROCK AT (800) 227-7BFM
OR CONSULT WITH YOUR FINANCIAL ADVISOR.
19
<PAGE>
[LOGO]
TRUSTEES
Laurence D. Fink, Chairman
Andrew F. Brimmer
Richard E. Cavanagh
Kent Dixon
Frank J. Fabozzi
James Grosfeld
THE [LOGO]
James Clayburn La Force, Jr.
Ralph L. Schlosstein
OFFICERS
FLORIDA INSURED
Ralph L. Schlosstein, President
Keith T. Anderson, Vice President
Michael C. Huebsch, Vice President MUNICIPAL 2008
Robert S. Kapito, Vice President
Kevin Klingert, Vice President
Richard M. Shea, Vice President/Tax TERM TRUST
Henry Gabbay, Treasurer
James Kong, Assistant Treasurer -------------------------------
Karen H. Sabath, Secretary
ANNUAL REPORT
INVESTMENT ADVISER
BlackRock Financial Management, Inc. DECEMBER 31, 1995
345 Park Avenue
New York, NY 10154
(800) 227-7BFM
ADMINISTRATOR
Princeton Administrators L.P.
800 Scudders Mill Road
Plainsboro, NJ 08536
(800) 688-0928
CUSTODIAN AND TRANSFER AGENT
State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171
(800) 699-1BFM
AUCTION AGENT
Bankers Trust Company
4 Albany Street
New York, NY 10006
INDEPENDENT AUDITORS
Deloitte & Touche LLP
Two World Financial Center
New York, NY 10281-1434 [ARTWORK]
LEGAL COUNSEL
Skadden, Arps, Slate, Meagher & Flom
919 Third Avenue
New York, NY 10022
This report is for shareholder information.
This is not a prospectus intended for use in the
purchase or sale of any securities.
THE BLACKROCK FLORIDA INSURED
MUNICIPAL 2008 TERM TRUST
c/o Princeton Administrators L.P.
800 Scudders Mill Road
[LOGO] Plainsboro, NJ 08536
(800) 227-7GFM
09247H 10 6
09247H 20 5
