- --------------------------------------------------------------------------------
THE BLACKROCK FLORIDA INSURED MUNICIPAL 2008 TERM TRUST
SEMI-ANNUAL REPORT TO SHAREHOLDERS
REPORT OF INVESTMENT ADVISER
- --------------------------------------------------------------------------------
July 31, 1996
Dear Trust Shareholder:
After posting strong returns during 1995, the fixed income markets have given
back much of their gains in 1996 in response to a strengthening U.S. economy.
Accelerating economic growth has raised concerns about an increased inflationary
environment, which could erode the value of fixed income investments. The
stronger economy also has led some market participants to consider the
possibility that the Federal Reserve may increase interest rates to thwart
inflation threats after three interest rate reductions over the past twelve
months.
Despite the pick-up in economic growth, we believe that current inflationary
fears will subside. Commodity prices have risen but manufacturers will have
difficulty passing along the increased costs of raw materials to consumers,
whose debt levels as a percentage of disposable income are at the highest point
since the recessionary highs of 1990. We believe that the overleveraged consumer
will have to retrench, restricting future economic expansion and creating a
positive environment for bonds in the latter half of this year.
The following semi-annual report provides detailed market commentary and a
review of portfolio management activity. We believe that BlackRock's duration
controlled management style and risk management capabilities will allow each of
our Trusts to achieve its long-term investment objective.
We look forward to maintaining your respect and confidence and to serving
your financial needs in the coming years.
Sincerely,
/s/ Laurence Fink /s/ Ralph L. Schlosstein
Laurence D. Fink Ralph L. Schlosstein
Chairman President
1
<PAGE>
July 31, 1996
Dear Shareholder:
We are pleased to present the semi-annual report for The BlackRock Florida
Insured 2008 Term Trust ("the Trust") for the six months ended June 30, 1996. We
would like to take this opportunity to review the Trust's stock price and net
asset value (NAV) performance, summarize market developments and discuss recent
portfolio management activity.
The Trust is a non-diversified 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 period:
<TABLE>
<CAPTION>
6/30/96 12/31/95 CHANGE HIGH LOW
<S> <C> <C> <C> <C> <C>
STOCK PRICE $14.125 $15.00 (5.83%) $15.50 $13.75
NET ASSET VALUE (NAV) $15.45 $16.04 (3.68%) $16.25 $15.16
</TABLE>
THE FIXED INCOME MARKETS
The domestic fixed income markets witnessed two profoundly different
environments during the past six months, providing an exciting and challenging
environment in which to manage the Trust. The Treasury market rally of 1995
continued through the middle of February 1996, as market demand for fixed income
securities remained strong due to a combination of moderate economic growth, low
absolute levels of inflation and two reductions of the Fed funds target rate.
The rally halted during mid-February, however, as data indicating accelerating
economic growth rekindled inflationary concerns. The strengthening of the
economy continued throughout the second quarter, leading market participants to
become more resolute in their belief that the Federal Reserve will tighten
monetary policy during the second half of 1996. These fears translated into a
sharp rise in bond yields across the Treasury yield curve, resulting in the
fixed income markets rescinding much of their 1995 gains.
After lagging the performance of its Treasury counterparts during the fourth
quarter of 1995, municipal bonds have outperformed taxable fixed income
securities in 1996. The diminished possibility of significant tax reform, which
had threatened the tax-exempt status of municipal bond income, helped renew
investor interest in the municipal sector. Additionally, municipal bond
investors received approximately $60 billion in cash during the June/July period
resulting from bond calls, interest payments and redemptions. A significant
portion of this money has been reinvested in the municipal market, as high
municipal bond absolute yields convinced many investors to bypass the equity
markets. For the period, the yield of the 10-year AAA General Obligation
increased 47 basis points (0.47%) to close at 5.11% versus at 114 basis point
rise in the yield of the 10-year Treasury note. Despite the potential decline in
retail demand as the June/July cash flows are reinvested, BlackRock believes
that municipal bonds have the potential to continue to outperform Treasury
securities for the remainder of 1996.
The Florida municipal bond market matched the performance of the national
market over the past six months, as high levels of new issuance was met with
strong demand. The main cause of this demand was the sizable amount of Florida
bonds which were refinanced, prompting retail investors to reinvest their
principal back into the market. We remain
2
<PAGE>
optimistic for continued strong performance of the Florida municipal market
should supply levels temper in the higher interest rate environment.
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
as 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 which fit within the context of the Trust seeking to achieve its
investment objectives.
Additionally, 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 with higher yields. The degree to which the
Trust can benefit from its use of leverage may affect its ability to pay high
monthly income. After steepening during the first quarter of 1996, the municipal
yield curve has recently flattened, as longer maturity municipal bonds have
outperformed shorter municipals. This resulted in a narrowing of the yield
differential, or "spread", between long and short maturities.
The following chart compares the Trust's current and December 31, 1995 asset
composition:
THE BLACKROCK FLORIDA INSURED MUNICIPAL 2008 TERM TRUST
SECTOR JUNE 30, 1996 DECEMBER 31, 1995
County, City &
State 18% 17%
Water & Sewer 15% 15%
Tax Revenue 14% 15%
Transportation 14% 14%
Hospital 11% 12%
Lease Revenue 6% 6%
Building 6% 6%
Utility 5% 5%
Resource Recovery 4% 4%
Education 2% 2%
Other 5% 4%
3
<PAGE>
We look forward to continuing to manage the Trust to benefit from the
opportunities available to investors in the investment grade municipal market.
We thank you for your investment and continued interest in The BlackRock Florida
Insured 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,
/s/ Robert S. Kapito /s/ Kevin Klinger
Robert S. Kapito Kevin Klingert
Vice Chairman and Portfolio Manager Managing Director and Portfolio
BlackRock Financial Management, Inc. BlackRock Financial Management,
Inc.
<TABLE>
<CAPTION>
THE BLACKROCK FLORIDA INSURED MUNICIPAL 2008 TERM TRUST
<S> <C>
Symbol on New York Stock Exchange: BRF
Initial Offering Date: September 18, 1992
Closing Stock Price as of 6/30/96: $14.125
Net Asset Value as of 6/30/96: $15.45
Yield on Closing Stock Price as of 6/30/96 ($14.125)1: 6.11%
Current Monthly Distribution per Common Share2: $0.07188
Current Annualized Distribution per Common Share2: $0.8626
</TABLE>
- --------------
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 FLORIDA INSURED
MUNICIPAL 2008 TERM TRUST
PORTFOLIO OF INVESTMENTS
JUNE 30, 1996
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL OPTION
AMOUNT CALL VALUE
RATING* (000) DESCRIPTION PROVISIONS++ (NOTE 1)
<C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS--146.5%
AAA $ 1,500 Altamonte Springs Wtr. & Swr. Sys. Rev., 6.00%, $ 1,569,585
10/01/08, FGIC.......................................... 10/02 at 102
AAA 10,000 Brevard Cnty. Sch. Brd., C.O.P., Ser. A, 6.375%, 10,990,000
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 3,143,185
AAA 3,155 6.00%, 6/01/08......................................... 06/02 at 102 3,306,850
AAA 1,000 Dade Cnty. Aviation Rev., Ser. A, 6.00%, 10/01/08, 1,050,930
AMBAC................................................... 10/05 at 102
AAA 5,000 Dade Cnty. G.O., Ser. A, Zero Coupon, 2/01/08, MBIA..... 02/06 at 92.82 2,599,200
AAA 2,000 Dade Cnty. G.O., Zero Coupon, 10/01/08 AMBAC............ No Opt Call 1,019,380
Dade Cnty. Sch. Brd., C.O.P., Ser. A, MBIA,
AAA 2,000 5.75%, 5/01/08......................................... 05/04 at 101 2,047,660
AAA 3,465 5.75%, 5/01/12......................................... 05/04 at 101 3,452,422
AAA 2,500 Dade Cnty. Sch. Dist. Rev., 6.125%, 8/01/07, FGIC....... 08/01 at 100 2,664,950
AAA 2,500 Daytona Beach Wtr. & Swr. Rev., 6.00%, 11/15/09, 2,591,750
AMBAC................................................... 11/02 at 102
Duval Cnty. Sch. Dist., G.O., AMBAC,
AAA 3,015 6.30%, 8/01/06......................................... 08/02 at 102 3,237,115
AAA 9,000 6.30%, 8/01/07......................................... 08/02 at 102 9,638,550
Escambia Cnty. Utils. Auth. Sys. Rev., FGIC,
AAA 2,450 Ser. A, 6.10%, 1/01/09................................. 01/03 at 102 2,557,776
AAA 1,595 Ser. B, 6.125%, 1/01/09................................ No Opt. Call 1,701,083
AAA 8,255 Florida St. Brd. of Ed. Wtr. & Swr. Sys. Rev., Pub. Ed., 8,643,150
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 3,715,285
AAA 6,000 6.25%, 7/01/09, MBIA................................... 07/02 at 101 6,353,160
AAA 5,000 6.25%, 7/01/10, MBIA................................... 07/02 at 101 5,274,050
AAA 2,500 6.75%, 7/01/07, AMBAC.................................. 07/01 at 102 2,712,475
AAA 3,000 Greater Orlando Aviation Auth., Arpt. Facs. Rev., Ser. 3,199,560
D, 6.20%, 10/01/08, AMBAC.............................. 10/02 at 102
AAA 10,000 Hillsborough Cnty., Tampa Intl. Arpt. Aviation Rev., 10,026,800
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 2,882,164
AAA 1,500 6.60%, 8/01/10......................................... 08/04 at 101 1,678,485
AAA 5,000 Hillsborough Cnty., Sch. Brd., C.O.P., 5.875%, 7/01/08, 5,165,150
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 3,056,910
AAA 2,910 5.75%, 5/01/09......................................... 05/05 at 102 2,970,761
AAA 4,000 Jacksonville Elec. Auth. Rev., 5.75%, 10/01/12, AMBAC... 10/02 at 101 4,003,680
AAA 5,000 Jacksonville G.O., Ser. A, 5.50%, 10/01/12, AMBAC....... 10/02 at 102 4,902,750
AAA 2,000 Lakeland Elec. & Wtr. Rev., Jr. Sub. Lien, 5.875%, 2,077,280
10/01/08, FGIC.......................................... No Opt. Call
AAA 9,850 Lakeland Hosp. Sys. Rev., Regl. Med. Care Ctr. Proj., 10,344,766
Ser. B, 6.10%, 11/15/08, FGIC.......................... 11/02 at 102
AAA 1,100 Lakeland Wastewater Impvt. Rev., 5.50%, 10/01/08, 1,110,956
MBIA.................................................... 10/02 at 102
AAA 4,500 Lee Cnty. Arpt. Rev., Ser. A, 5.50%, 10/01/10, AMBAC.... 10/02 at 100 4,483,890
AAA 4,750 Lee Cnty. G.O., Ser. A, 7.30%, 10/01/07, MBIA........... 10/99 at 102 5,182,298
AAA 1,650 Lee Cnty. Local Option Gas Tax Rev., 5.50%, 10/01/09, 1,651,782
MBIA................................................ 10/99 at 100
</TABLE>
5
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL OPTION
AMOUNT CALL VALUE
RATING* (000) DESCRIPTION PROVISIONS++ (NOTE 1)
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------
AAA $ 1,000 Marion Cnty. Hosp. Dist. Rev, Munroe Regl. Med. Ctr., $ 1,063,070
6.20%, 10/01/07, FGIC.................................. 10/02 at 102
AAA 3,750 Melbourne Wtr. & Swr. Rev., Ser. C, 6.25%, 10/01/08, 3,985,987
FGIC................................................... 10/02 at 102
AAA 11,000 Miami Beach Hlth. Facs. Auth. Hosp. Rev., Mt. Sinai Med. 11,586,740
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 1,413,017
AAA 1,000 6.00%, 12/01/09........................................ No Opt. Call 1,058,100
AAA 1,000 Orange Cnty. Pub. Svc. Tax, 5.70%, 10/01/08, FGIC....... 10/05 at 102 1,025,840
AAA 1,500 Orange Cnty. Tourist Devel. Tax Rev., Ser. A, 5.85%, 1,568,340
10/01/08, MBIA.......................................... No Opt. Call
AAA 2,000 Osceola Cnty. Trans. Rev., Osceola Pkwy. Proj., 5.95%, 2,081,660
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 1,631,736
AAA 1,595 6.10%, 10/01/02+....................................... No Opt. Call 1,729,315
AAA 7,085 Pasco Cnty. Solid Waste Disp. & Res. Rec. Sys. Rev., 7,350,900
6.00%, 4/01/09.......................................... 04/02 at 102
AAA 11,000 Pasco Cnty. Wtr. & Swr. Rev., Ser. A, 6.00%, 10/01/09, 11,435,600
FGIC.................................................... 10/02 at 102
AAA 1,000 Seminole Cnty. Sch. Brd., C.O.P., Ser. A, 5.90%, 1,038,860
7/01/08, MBIA........................................... 07/04 at 102
AAA 2,000 Seminole Cnty. Wtr. & Swr. Rev., 6.00%, 10/01/09, 2,115,080
MBIA.................................................... No Opt. Call
AAA 2,500 Tampa Wtr. & Swr. Rev., Ser. A, 6.25%, 10/02/12, FGIC... 10/02 at 101 2,696,028
AAA 4,065 Volusia Cnty. Edl. Fac. Auth. Rev., Embry-Riddle 4,366,216
Aeronautical Univ., 6.50%, 10/15/08, CONNIE LEE....... 10/02 at 102
------------------
TOTAL LONG TERM INVESTMENTS (cost $185,812,622)......... 197,152,277
------------------
SHORT-TERM INVESTMENTS**--2.6%
NEW MEXICO--0.6%
A-1+ 750 Farmington Poll. Ctrl. Rev., Arizona Pub. Ser. Co.,
FRDD, 3.50%, 7/01/96, Ser B........................... N/A 750,000
------------------
NEW YORK--2.0%
A-1+ 1,900 New York City, G.O., FRDD, 3.20%, 7/01/96, Ser. B. ..... N/A 1,900,000
A-1+ 1,100 New York City Mun. Wtr. Fin. Auth. Rev., FRDD, 800,000
3.45%--3.55%, 7/01/96.................................. N/A
------------------
2,700,000
------------------
TOTAL SHORT-TERM INVESTMENTS (cost $3,450,000).......... 3,450,000
------------------
TOTAL INVESTMENTS 149.1% (cost $189,262,622)............ 200,602,277
Liabilities in excess of other assets................... (60,204)
Liquidation value of preferred stock--(49.1)%........... (66,000,000)
------------------
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS--100%...... $134,542,073
</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.
** For purposes of amortized cost valuation, the maturity date of these instruments is
considered to be the later 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.
</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
FRDD--Floating Rate Daily Demand
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 OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1996
(UNAUDITED)
- -------------------------------------------------
ASSETS
Investments, at value (cost
$189,262,622) (Note 1)........... $200,602,277
Cash.............................. 28,625
Interest receivable............... 3,154,233
Deferred organization expense and
other assets..................... 25,006
------------
203,810,141
------------
LIABILITIES
Payable for investments
purchased......................... 2,991,680
Advisory fee payable (Note 2)..... 57,262
Dividends payable--common stock... 57,142
Dividends payble--preferred
stock............................. 19,257
Administration fee payable (Note
2)................................ 16,361
Other accrued expenses............ 126,366
------------
3,268,068
------------
NET INVESTMENT ASSETS............. $200,542,073
============
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............................ 2,420,493
Accumulated net realized loss..... (212,627)
Net unrealized appreciation....... 11,339,655
------------
Net investment assets, June 30,
1996.............................. $200,542,073
============
Net assets applicable to common
shareholders...................... $134,542,073
============
Net asset value per common share
of beneficial interest:
($134,542,073/8,707,093 common
shares of beneficial interest
issued and outstanding).......... $15.45
======
- --------------------------------------------------
THE BLACKROCK FLORIDA INSURED
MUNICIPAL 2008 TERM TRUST
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1996
(UNAUDITED)
- --------------------------------------------------
NET INVESTMENT INCOME
Income
Interest and discount earned..... $5,714,500
------------
Expenses
Investment advisory.............. 353,443
Administration................... 100,984
Auction agent.................... 82,000
Reports to shareholders.......... 32,000
Custodian........................ 26,000
Audit............................ 16,000
Legal............................ 13,000
Trustees......................... 12,000
Transfer agent................... 8,000
Miscellaneous.................... 45,998
------------
Total expenses................... 689,425
------------
Net investment income............. 5,025,075
------------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS (NOTE 3)
Net realized gain on
investments....................... --
Net change in unrealized
appreciation on investments...... (5,257,372)
------------
Net loss on investments........... (5,257,372)
------------
NET DECREASE IN NET INVESTMENT
ASSETS RESULTING FROM
OPERATIONS........................ $(232,297)
=============
See Notes to Financial Statements.
7
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK FLORIDA INSURED
MUNICIPAL 2008 TERM TRUST
STATEMENTS OF CHANGES IN NET INVESTMENT ASSETS (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED YEAR ENDED
JUNE 30, DECEMBER 31,
1996 1995
------------ ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET INVESTMENT ASSETS
Operations:
Net investment income.................................................. $ 5,025,075 $ 10,043,432
Net realized gain on investments....................................... -- 522,630
Net change in unrealized appreciation (depreciation) on investments.... (5,257,372) 17,750,167
------------ ------------
Net increase (decrease) in net investment assets resulting from
operations............................................................ (232,297) 28,316,229
------------ ------------
Dividends and distributions:
To common shareholders from net investment income...................... (3,755,148) (7,501,505)
To preferred shareholders from net investment income................... (1,098,552) (2,442,963)
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)
------------ ------------
(4,853,700) (9,956,222)
------------ ------------
Total increase (decrease)........................................... (5,085,997) 18,360,007
NET INVESTMENT ASSETS
Beginning of period..................................................... 205,628,070 187,268,063
------------ ------------
End of period........................................................... $200,542,073 $205,628,070
============ ============
</TABLE>
See Notes to Financial Statements.
8
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK FLORIDA INSURED
MUNICIPAL 2008 TERM TRUST
FINANCIAL HIGHLIGHTS (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE SIX YEAR ENDED DECEMBER 31,
MONTHS ENDED -------------------------------
JUNE 30, 1996 1995 1994 1993
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
PER COMMON SHARE OPERATING PERFORMANCE:
Net asset value, beginning of the period...... $ 16.04 $ 13.93 $ 16.13 $ 14.28
------- ------- ------- -------
Net investment income........................ 0.58 1.15 1.15 1.15
Net realized and unrealized gain (loss) on
investments................................... (0.61 ) 2.10 (2.27) 1.75
------- ------- ------- -------
Net increase (decrease) from investment
operations.................................... (0.03 ) 3.25 (1.12) 2.90
------- ------- ------- -------
Dividends from net investment income to:
Preferred shareholders....................... (.13 ) (0.28) (0.22) (0.17)
Common shareholders.......................... (.43 ) (0.86) (0.86) (0.86)
Distributions from net realized gain on
investment to:
Preferred shareholders....................... -- -- -- -- **
Common shareholders.......................... -- -- -- (0.02)
Distributions in excess of net realized gain
on investment to:
Preferred shareholders....................... -- -- ** -- --
Common shareholders.......................... -- -- ** -- --
------- ------- ------- -------
Total dividends and distributions............. (0.56 ) (1.14) (1.08) (1.05)
------- ------- ------- -------
Capital charge with respect to issuance of
shares........................................ -- -- --
------- ------- ------- -------
Net asset value, end of period***............. $ 15.45 $ 16.04 $ 13.93 $ 16.13
======= ======= ======= =======
Market value, end of period***................ $ 14.125 $ 15.00 $ 12.125 $ 14.875
======== ======== ======= ========
TOTAL INVESTMENT RETURN+...................... (3.80 )% 31.26% (13.27)% 9.94%
======== ======== ======== ========
RATIOS TO AVERAGE NET ASSETS OF COMMON
SHAREHOLDERS:+++
Expenses...................................... 1.01 %++ 1.02% 1.09% 0.99%
Net investment income......................... 7.39 %++ 7.55% 7.86% 7.44%
SUPPLEMENTAL DATA:
Average net assets of common shareholders (in
thousands).................................. $ 136,044 $ 133,042 $ 127,640 $ 134,476
Portfolio turnover............................ 1 % 11% 30% 3%
Net assets of common shareholders, end of
period (in thousands)....................... $ 134,542 139,628 $ 121,268 $ 140,416
Preferred stock outstanding (in thousands).... $ 66,000 $ 66,000 $ 66,000 $ 66,000
Assets coverage per share of preferred stock,
end of period##............................. $ 75,963 $ 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
investment to:
Preferred shareholders....................... --
Common shareholders.......................... --
Distributions in excess of net realized gain
on investment 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%
=================
</TABLE>
<TABLE>
<CAPTION>
RATIOS TO AVERAGE NET ASSETS OF
COMMON SHAREHOLDERS:+++
<S> <C> <C>
Expenses...................................... 1.01%++ 1.02% 1.09% 0.99%
Net investment income......................... 7.39%++ 7.55% 7.86 7.44%
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).................................. $136,044 $133,042 $127,640 $134,476
Portfolio turnover............................ 1% 11% 30% 3%
Net assets of common shareholders, end of
period (in thousands)....................... $134,542 $139,628 $121,628 $140,416
Preferred stock outstanding (in thousands).... $ 66,000 $ 66,000 $ 66,000 $ 66 000
Assets coverage per share of preferred stock,
end of period##............................. $ 75,963 $77,889 $141,870 $156,376
SUPPLEMENTAL DATA:
Average net assets of common shareholders (in
thousands).................................. $181,875
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 per common share
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 unaudited operating performance data for a
share of beneficial interest 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
(UNAUDITED)
- ----------------------------------------------
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 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 substan-
10
<PAGE>
tially 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
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.
Note 2. Agreements The Trust has an
Investment Advisory
Agreement with
BlackRock Financial
Manage-
ment, Inc. (the "Adviser") a wholly-owned corporate subsidiary
of PNC Asset Management Group, Inc., the holding company for
PNC's asset management business and an Administration Agreement with Princeton
Administrators, L.P. (the "Administrator"), an indirect wholly owned subsidiary
of Merrill Lynch & Co., Inc.
The investment advisory fee paid to the Adviser is computed weekly and
payable monthly at an annual rate of 0.35% of the Trust's average weekly net
investment assets. The administration fee paid to the Administrator is also
computed weekly and payable monthly at an annual rate of 0.10% of the Trust's
average weekly net investment assets.
Pursuant to the agreements, the Adviser provides continuous supervision of
the investment portfolio and pays the compensation of officers of the Trust who
are affiliated persons of the Adviser. The Administrator pays occupancy and
certain clerical and accounting costs of the Trust. The Trust bears all other
costs and expenses.
Note 3. Portfolio Purchases and sales of
Securities investment securities,
other than short- term
investments, for the
six
months ended June 30, 1996, aggregated $3,503,608 and $2,498,788, respectively.
The federal income tax basis of the Trust's investments at June 30, 1996 was
substantially the same as the basis for financial reporting, and accordingly,
unrealized appreciation was $11,339,655 (both 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 of beneficial
interest authorized. Of the 8,707,093 common shares outstanding at June 30,
1996, the Adviser owned 7,093 shares. As of June 30, 1996, there were 2,640
Series R7 preferred shares outstanding.
The Trust may classify or reclassify any unissued shares of beneficial
interest into one or more series of preferred stock. On November 23, 1992, the
Trust reclassified 1,320 shares of beneficial interest 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 2.50% to 3.90%
for the six months ended June 30, 1996.
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 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 any accumulated but unpaid dividends. The stock split occurred on
July 24, 1995.
11
<PAGE>
Note 5. Dividends Subsequent to June 30,
1996, the Board of
Trustees of the Trust
declared a dividend
from
undistributed earnings of $.07188 per common share payable July 31, 1996 to
shareholders of record on July 15, 1996.
For the period July 1, 1996 to July 31, 1996 dividends declared on Preferred
Stock totalled $204,702 in aggregate for the outstanding Preferred Stock series.
<TABLE>
<CAPTION>
Note 6. Quarterly Data
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............ 2,857,395 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
January 1, 1996 to
March 31, 1996........... 2,852,793 2,509,958 .29 (4,117,756) (.48)
April 1, 1996 to
June 30, 1996............ 2,861,707 2,515,117 .29 (1,139,616) (.13)
<CAPTION>
Note 6. Quarterly Data
NET INCREASE (DECREASE) IN NET
INVESTMENT ASSETS RESULTING FROM DIVIDENDS AND DISTRIBUTIONS
OPERATIONS COMMON SHARES PREFERRED SHARES*
PER PER
COMMON COMMON
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 .22 527,536
January 1, 1996 to
March 31, 1996........... (1,607,798) (.19 ) 1,877,572 .21 578,291
April 1, 1996 to
June 30, 1996............ 1,375,501 .16 1,877,576 .22 520,261
<CAPTION>
Note 6. Quarterly Data
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
January 1, 1996 to
March 31, 1996........... .07 15.500 14.750 15.58
April 1, 1996 to
June 30, 1996............ .06 15.000 13.750 15.45
</TABLE>
- --------------
* For the period ended June 30, 1996, the average annualized rate paid to
preferred shareholders was 3.33%.
12
<PAGE>
- --------------------------------------------------------------------------------
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.
The Annual Meeting of Trust Shareholders was held May 8, 1996 to vote on the
following matters:
(1) To elect three Trustees to serve as follows:
<TABLE>
<CAPTION>
DIRECTOR CLASS TERM EXPIRING
- ------------------------------------------------------------------ ----- -------- --------
<S> <C> <C> <C>
Andrew F. Brimmer................................................. III 3 years 1999
Kent Dixon........................................................ III 3 years 1999
Laurence D. Fink.................................................. III 3 years 1999
Trustees whose term of office continues beyond this meeting are Richard E. Cavanagh, Frank J.
Fabozzi, James Grosfeld, James Clayburn LaForce, Jr. and Ralph L. Schlosstein.
</TABLE>
(2) To ratify the selection of Deloitte & Touche LLP as independent public
accountants of the Trust for the fiscal year ending December 31, 1996.
(3) To modify the investment restriction prohibiting investing for the
purpose of exercising control over the management of a company.
Shareholders elected the three Trustees, ratified the selection of Deloitte &
Touche LLP and approved the modification of the investment restriction
prohibiting investing for the purpose of exercising control over the management
of a company. The results of the voting was as follows:
<TABLE>
<CAPTION>
VOTES FOR VOTES AGAINST ABSTENTIONS
--------- ------------- -----------
<S> <C> <C> <C>
Andrew F. Brimmer.......................................... 4,388,573 -- 142,634
Kent Dixon................................................. 4,395,573 -- 135,634
Laurence D. Fink........................................... 4,395,573 -- 135,634
Ratification of Deloitte & Touche LLP...................... 4,364,723 38,525 127,959
Investment restriction..................................... 3,526,441 131,613 297,197
</TABLE>
- --------------------------------------------------------------------------------
THE BLACKROCK FLORIDA INSURED MUNICIPAL 2008 TERM TRUST
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 and 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.
13
<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 $41 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., one of the
nation's largest banking organizations.
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.
14
<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 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.
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
AMT. The Trust currently holds no securities that are subject to AMT.
15
<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>
16
<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.
17
<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 $41 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.
18
<PAGE>
TRUSTEES
Laurence D. Fink, Chairman
Andrew F. Brimmer
Richard E. Cavanagh
Kent Dixon
Frank J. Fabozzi
James Grosfeld
James Clayburn La Force, Jr.
Ralph L. Schlosstein
OFFICERS THE [LOGO]
Ralph L. Schlosstein, President
Keith T. Anderson, Vice President FLORIDA INSURED
Michael C. Huebsch, Vice President
Robert S. Kapito, Vice President MUNICIPAL 2008
Kevin Klingert, Vice President
Richard M. Shea, Vice President/Tax TERM TRUST
Henry Gabbay, Treasurer
James Kong, Assistant Treasurer ----------------------------------
Karen H. Sabath, Secretary
Semi-Annual Report
INVESTMENT ADVISER June 30, 1996
BlackRock Financial Management, Inc.
345 Park Avenue
New York, NY 10154
(800) 227-7BFM
ADMINISTRATOR
Princeton Administrators, L.P.
P.O. Box 9095
Princeton, NJ 08543-9095
(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
LEGAL COUNSEL [ARTWORK]
Skadden, Arps, Slate,
Meagher & Flom
919 Third Avenue
New York, NY 10022
The accompanying financial
statements as of June 30, 1996
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 FLORIDA INSURED
MUNICIPAL 2008 TERM TRUST
c/o Princeton Administrators, L.P.
P.O. Box 9095
Princeton, NJ 08543-9095
(800) 227-7BFM
09247H 10 6
09247H 20 5
