- --------------------------------------------------------------------------------
THE BLACKROCK BROAD INVESTMENT GRADE 2009 TERM TRUST INC.
ANNUAL REPORT TO SHAREHOLDERS
REPORT OF INVESTMENT ADVISER
- --------------------------------------------------------------------------------
November 30, 1997
Dear Trust Shareholder:
U.S. fixed income investors have been rewarded with solid total returns
over the past twelve months, as moderate economic growth and low inflation drove
Treasury yields below year-end 1996 levels by October 31, 1997.
The economy has shown some signs of slowing, which BlackRock expects may
persist as early indicators suggest that holiday spending may be tepid. We do
not see immediate signs of inflationary pressure nor do we anticipate an
imminent change in monetary policy by the Federal Reserve. Our long-term outlook
for the bond market remains optimistic, based on the fundamentally favorable
backdrop of slower economic growth, low inflation and declining Treasury
borrowing.
This report contains detailed market and portfolio strategy commentary by
your Trust's managers in addition to the Trust's audited financial statements
and a detailed portfolio listing. We thank you for your continued investment in
the Trust and wish you a successful new year.
Sincerely,
/s/Laurence D. Fink /s/Ralph L. Schlosstein
- ------------------------ ---------------------------
Laurence D. Fink Ralph L. Schlosstein
Chairman President
1
<PAGE>
November 30, 1997
Dear Shareholder:
We are pleased to present the annual report for The BlackRock Broad
Investment Grade 2009 Term Trust Inc. ("the Trust") for the fiscal year ended
October 31, 1997. 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 diversified, actively managed closed-end bond fund whose
shares are traded on the American Stock Exchange under the symbol "BCT". The
Trust's investment objective is to return $15 per share (its initial offering
price) to shareholders on or about December 31, 2009 while providing high
monthly income. Although there can be no guarantee, BlackRock is confident that
the Trust can achieve its investment objectives. The Trust seeks these
objectives by investing in investment grade fixed income securities, including
corporate debt securities, mortgage-backed securities backed by U.S. Government
agencies (such as Fannie Mae, Freddie Mac or Ginnie Mae) and commercial
mortgage-backed securities. Historically, the Trust has been primarily invested
in corporate debt securities and collateralized mortgage obligations (CMOs). All
of the Trust's assets must be rated at least "BBB" by Standard & Poor's or "Baa"
by Moody's at the time of purchase or be issued or guaranteed by the U.S.
government or its agencies.
The table below summarizes the performance of the Trust's stock price and
NAV over the period:
------------------------------------------------------
10/31/97 10/31/96 Change High Low
- --------------------------------------------------------------------------------
STOCK PRICE $12.125 $11.00 10.23% $12.3125 $10.875
- --------------------------------------------------------------------------------
NET ASSET VALUE (NAV) $14.48 $13.46 7.58% $14.49 $13.20
- --------------------------------------------------------------------------------
THE FIXED INCOME MARKETS
The first half of the Trust's fiscal year was characterized by increased
concern over potential inflationary pressures. Bond prices fell and yields rose
between mid-December 1996 and mid-April 1997, as economic data indicated a very
strong economy. Although inflationary measures such as commodity, producer and
consumer prices generally remained relatively stable, labor markets remained
strong throughout the period (with the unemployment rate consistently hovering
near historically low levels), which suggested future wage pressures and higher
inflation. In an effort to subdue this growth and pre-emptively fight inflation,
the Federal Reserve raised the Federal funds rate by 25 basis points (1/4%) to
5.50% at their March 25 FOMC policy meeting. During the second quarter, however,
signs of more moderate economic growth began to appear. Lower factory orders,
decreased consumer spending and higher inventories, in addition to continued
benign inflationary forces, soothed investor fears over inflation. Accordingly,
the Federal Reserve left interest rates unchanged at their May 20, July 2 and
September 30 policy meetings.
U.S. Treasury yields reflected investor expectations of Federal Reserve
policy activity. The yield of the 10-year note rose from a period low of 6.04%
in late November 1996 to 6.98% in mid-April 1997 in response to Federal Reserve
Chairman Alan Greenspan's warning of excessive equity market euphoria and in
anticipation of a Federal funds rate increase. As economic data softened,
however, the yield of the 10-year fell over 100 basis points from 6.98% to close
at 5.83% on October 31, 1997. Foreign investors also contributed to the strong
demand for U.S. Treasuries, as the Asian market volatility led foreign and
domestic investors to look to U.S. government securities as a safe haven. For
the 12 month period ended October 31, 1997, the 10-year Treasury rallied,
posting a net decline of 51 basis points (0.51%).
2
<PAGE>
During the period, mortgage-backed securities (MBS), as measured by the
Lehman Mortgage Index, modestly outperformed the broader investment grade
domestic bond market (Lehman Aggregate Index) on a total return basis by 9.12%
vs. 8.89%. Demand for mortgage securities was largely concentrated in the first
half of 1997, when MBS decisively outperformed Treasuries due to low interest
rate volatility and relatively stable mortgage prepayment activity. Recently,
MBS have fallen out of favor, as declining interest rates have heightened
prepayment fears and increased interest rate volatility has had a negative
impact on valuations of mortgage securities. Further, as corporate bond prices
have fallen, yields in the corporate sector have increased, offering investors
an alternative to MBS which also yields more than Treasuries. With the U.S.
economy remaining firm, domestic corporate bond fundamentals remain fairly
positive. At newly wider spread levels, we primarily see value in higher rated
and improving domestic credits.
THE TRUST'S PORTFOLIO AND INVESTMENT STRATEGY
BlackRock actively manages the Trust's portfolio holdings consistent with
BlackRock's overall market outlook and the Trust's investment objectives. The
following chart compares the Trust's current and October 31, 1996 asset
composition.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
COMPOSITION OCTOBER 31, 1997 OCTOBER 31, 1996
<S> <C> <C>
- -------------------------------------------------------------------------------------------------
Agency Multiple Class Mortgage Pass-Throughs 26% 30%
- -------------------------------------------------------------------------------------------------
Corporate Bonds 19% 23%
- -------------------------------------------------------------------------------------------------
Adjustable Rate Mortgage Securities 17% 13%
- -------------------------------------------------------------------------------------------------
Commercial Mortgage-Backed Securities 15% 16%
- -------------------------------------------------------------------------------------------------
U.S. Gov't Securities 7% 2%
- -------------------------------------------------------------------------------------------------
Stripped Mortgage-Backed Securities 5% 7%
- -------------------------------------------------------------------------------------------------
Municipal Bonds 5% 5%
- -------------------------------------------------------------------------------------------------
Asset Backed Securities 3% --
- -------------------------------------------------------------------------------------------------
Mortgage Pass-Throughs 2% 3%
- -------------------------------------------------------------------------------------------------
Non-Agency Multiple Class Mortgage Pass-Throughs 1% 1%
- -------------------------------------------------------------------------------------------------
</TABLE>
Over the past year, the Trust reduced its overall exposure to residential
mortgage-backed securities, as fundamental conditions in that market have
worsened. Mortgages performed well over the first half of 1997 when interest
rate volatility remained low and the rate at which homeowners were prepaying
their mortgages remained fairly constant. As interest rate volatility increased
and mortgages became less favorable towards the middle of the year, the Trust
began to take profits and reallocate the proceeds. We believe that the
environment for mortgages will continue to worsen and that the mortgage market
is at risk for sustained underperformance versus Treasuries in the current low
interest rate levels. In particular, the Trust's collateralized mortgage
obligation (CMO), mortgage pass-through and stripped mortgage-backed security
holdings were reduced.
The Trust also scaled back its exposure to the corporate bond market from
23% to 19% over the past twelve months. The corporate bond sector outperformed
comparable maturity Treasuries during the third quarter by a slender margin,
capping a year of generally good performance. In October, however, yield spreads
on domestic corporate bonds began to widen as prices dropped. The Trust
redeployed these assets into U.S. Treasury securities and will look to
opportunistically re-enter the corporate and mortgage markets.
3
<PAGE>
We look forward to continuing to manage the Trust to benefit from the
opportunities available to investors in the fixed income markets as well as to
maintain the Trust's ability to meet its investment objectives. We thank you for
your investment in the BlackRock Broad Investment Grade 2009 Term Trust Inc.
Please feel free to contact our marketing center at (800) 227-7BFM (7236) if you
have specific questions which were not addressed in this report. Sincerely,
/s/Robert S. Kapito /s/Michael P. Lustig
- ---------------------- ----------------------
Robert S. Kapito Michael P. Lustig
Vice Chairman and Portfolio Manager Principal and Portfolio Manager
BlackRock Financial Management, Inc. BlackRock Financial Management, Inc.
================================================================================
THE BLACKROCK BROAD INVESTMENT GRADE 2009 TERM TRUST INC.
- --------------------------------------------------------------------------------
Symbol on American Stock Exchange: BCT
- --------------------------------------------------------------------------------
Initial Offering Date: June 17, 1993
- --------------------------------------------------------------------------------
Closing Stock Price as of 10/31/97: $12.125
- --------------------------------------------------------------------------------
Net Asset Value as of 10/31/97: $14.480
- --------------------------------------------------------------------------------
Yield on Closing Stock Price as of 10/31/97 ($12.125)1: 7.42%
- --------------------------------------------------------------------------------
Current Monthly Distribution per Share2: $0.0750
- --------------------------------------------------------------------------------
Current Annualized Distribution per Share2: $0.9000
================================================================================
- ------------
1 Yield on closing stock price is calculated by dividing the current annualized
distribution per share by the closing stock price per share.
2 The distribution is not constant and is subject to change.
4
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK BROAD INVESTMENT
GRADE 2009 TERM TRUST INC.
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1997
================================================================================
PRINCIPAL
RATINGS* AMOUNT VALUE
(UNAUDITED) (000) DESCRIPTION (NOTE 1)
- --------------------------------------------------------------------------------
LONG-TERM INVESTMENTS--145.7%
MORTGAGE PASS-THROUGHS--2.5%
Federal Housing Administration,
$1,006 CLC Alzheimer Care Center,
8.25%, 12/25/37 ..................... $1,077,884
----------
MULTIPLE CLASS MORTGAGE
PASS-THROUGHS--62.7%
AAA 744 Community Program Loan Trust,
Series 1987-A, Class A4,
4.50%, 10/01/18 ....................... 666,719
Federal Home Loan Mortgage
Corporation, Multiclass Mortgage
Participation Certificates (REMIC),
4,380 Series 1353, Class 1353-S,
8/l5/07 (ARM) ....................... 524,199
397++ Series 1472, Class 1472-SA,
3/15/08, (ARM) ...................... 379,321
1,010++ Series 1506, Class 1506-S,
5/15/08 (ARM) ....................... 978,179
2,168++ Series 1510, Class 1510-G,
5/15/13 ............................. 2,281,105
3,000+ Series 1596, Class 1596-D,
10/15/13 ............................ 3,026,070
481 Series 1619, Class 1619-SA,
2/15/22 (ARM) ....................... 455,971
1,025 Series 1626, Class 1626-SA,
12/15/08 (ARM) ...................... 829,799
331 Series 1637, Class 1637-LE,
12/15/23 (ARM) ...................... 287,238
1,142+ Series 1669, Class 1669-MB,
2/15/24 (ARM) ....................... 1,006,716
Federal National Mortgage
Association, REMIC Pass-Through
Certificates,
121 Trust 1992-174, Class 174-S,
9/25/22 (ARM) ....................... 267,524
714 Trust 1993-2, Class 2-SA,
1/25/23 (ARM) ....................... 719,626
1,000++ Trust 1993-49, Class 49-H,
4/25/13 ............................. 1,046,410
3,053+ Trust 1993-79, Class 79-PK,
4/25/22 ............................. 3,100,017
2,646++ Trust 1993-87, Class 87-J,
4/25/22 ............................. 2,586,412
4,000++ Trust 1993-138, Class 138-JK,
5/25/19 (I) ......................... 889,080
1,000+ Trust 1993-156, Class 156-SE,
10/25/19 (ARM) ...................... 1,012,500
296 Trust 1993-182, Class 182-J,
9/25/23 ............................. 282,304
614++ Trust 1993-183, Class 183-SE,
10/25/23 (ARM) ...................... 535,672
589++ Trust 1993-191, Class 191-SD,
10/25/08 (ARM) ...................... 469,163
1,627+ Trust 1993-202, Class 202-VB,
11/25/23 (ARM) ...................... 1,468,742
1,177++ Trust 1994-13, Class 13-SM,
2/25/09 (ARM) ....................... 1,029,875
748++ Trust 1994-37, Class 37-SC,
3/25/24 (ARM) ....................... 675,200
1,500 Trust 1996-20, Class 20-SB,
10/25/08 (ARM) ...................... 577,969
2,355 Trust 1997-30, Class 30-I,
1/25/23 (l) ......................... 662,269
1,250 Trust 1997-50, Class 50-HK,
8/25/27 (I) ......................... 494,336
1,190 Trust G93-25, Class 25-J,
12/25/19 (I) ........................ 443,511
246 Trust G93-27, Class 27-SE,
8/25/23 (ARM) ....................... 138,031
-----------
26,833,958
-----------
COMMERCIAL MORTGAGE BACKED
SECURITIES--22.4%
BBB+ 500 Citibank, New York N.A., 144A,
Multifamily Mortgage,
Series 1994-1, Class M2,
8.00%, 1/25/19 ...................... 524,063
Aaa 4,488 CS First Boston Mortgage
Securities Corporation,
Series 1997-C1, Class AX, 144A,
4/20/22 ............................. 516,870
BBB 500 DLJ Mortgage Acceptance
Corporation, Series 1997-CF1, 144A,
8.82%, 11/25/07 ..................... 532,545
BBB+ 750 FDIC Remic Trust, Mortgage
Pass-Through Certificates,
Series 1994-C1, Class II-F,
8.70%, 9/25/25 ...................... 804,151
AAA 500 GS Mortgage Securities Corporation,
Series 1996-PL, Class A2,
7.4l%, 2/15/27 ...................... 523,606
LTC Commercial Mortgage
Pass-Through Certificates,
A 500 Series 1994-1, Class l-D,
10.00%, 6/15/26 ..................... 527,813
AAA 456 Series 1996-1, Class 1-A, 144A,
7.06%, 4/15/28 ...................... 462,439
Merrill Lynch Mortgage Investors
Incorporated,
BBB 500 Series 1995-C1, Class D,
7.97%, 5/25/15 ....................... 526,814
See Notes to Financial Statements
5
<PAGE>
================================================================================
PRINCIPAL
RATINGS* AMOUNT VALUE
(UNAUDITED) (000) DESCRIPTION (NOTE 1)
- --------------------------------------------------------------------------------
BBB $ 500 Series 1996-C1, Class D,
7.42%, 4/25/28 ...................... $ 515,917
BBB 500 Morgan Stanley Capital 1
Incorporated, Commercial
Mortgage Pass-Through,
Series 1995-GA 1, Class D, 144A,
8.25%, 8/15/27 ...................... 534,465
AAA 750 New York City Mortgage Loan Trust,
Multifamily Mortgage Pass-Through
Class A-2, 144A,
6.75%, 6/25/11 ...................... 752,109
BBB 600 Nomura Asset Capital Corporation,
Series 1993-M1, Class A3, 144A,
7.64%, 11/25/03 ..................... 618,600
PaineWebber Mortgage
Acceptance Corporation IV,
BBB 750 Series 1995-M1, Class D, 144A,
7.30%, 1/15/07 ...................... 763,575
BBB 500 Series 1995-M2, Class D, 144A,
7.20%, 12/1/03 ...................... 506,808
A 465 Resolution Trust Corporation,
Series 1994-C2, Class D,
8.00%, 4/25/25 ...................... 476,504
Aa2 492 Salomon Brothers Mortgage
Securities VII,
Series 1997-TZH, Class A1, 144A,
7.15%, 3/25/22 ...................... 509,421
AAA 500 Structured Asset Securities
Corporation, Series
1996-CFL, Class B,
6.303%, 2/25/28 ..................... 496,277
----------
9,591,977
----------
CORPORATE BONDS--29.2%
FINANCE & BANKING--9.2%
A3 500 Amsouth Bancorporation,
6.75%, 11/01/25 ..................... 509,012
A 600 Equitable Life Assured Society,
6.95%, 12/01/05 ..................... 608,897
BBB- 500 Macsaver Financial Services
Incorporated,
7.875%, 8/01/03 ..................... 510,485
A1 500 Metropolitan Life Insurance Co., 144A,
6.30%, 11/01/03 493,254
A+ 1,000 Morgan Stanley Group Incorporated,
10.00%, 6/15/08 ..................... 1,249,820
BBB+ 500 PaineWebber Group Incorporated,
8.875%, 3/15/05 ..................... 563,090
----------
3,934,558
----------
CORPORATE BONDS (CONT'D)
INDUSTRIALS--9.4%
A3 100 American Airlines Inc. Secured
Equipment Trust, Series 1990-M,
10.44%, 3/04/07 ..................... 123,690
BBB- 500@Burlington Industries Incorporated,
7.25%, 9/15/05 ...................... 497,624
A1 1,000 Dow Capital BV,
9.20%, 6/01/10 ...................... 1,195,210
A+ 500 Ralcorp Holdings, Incorporated,
8.75%, 9/15/04 ...................... 567,255
A- 500 Ralston Purina Co., Debenture
9.25%, 10/15/09 ..................... 599,920
A 500 Seagram Joseph E & Sons Inc.,
7.00%, 4/15/08 ...................... 517,360
BBB- 500 Tele-Communications Inc.,
8.25% 1/15/03 ....................... 530,705
----------
4,031,764
----------
CORPORATE BONDS (CONT'D)
UTILITIES--4.6%
BBB- 500 360 Communications Co.,
7.50%, 3/01/06 ...................... 515,450
BBB- 379 Mobile Energy Services Co. L.L.C.,
8.665%, 1/01/17 ..................... 401,629
BBB- 500 NRG Energy Incorporated, 144A,
7.625%, 2/01/06 ..................... 523,135
Baa2 500 Ohio Edison Company,
8.625%, 9/15/03 ..................... 545,628
----------
1,985,842
----------
CORPORATE BONDS (CONT'D)
SOVEREIGN & PROVINCIAL--6.0%
BBB- 500 Empresa Electric Guacolda Sa, 144A,
7.95%, 4/30/03 ...................... 508,151
BBB+ 500 Empresa Electric Pehuhuenche,
7.30%, 5/01/03 ...................... 502,540
A3 500 Israel Electric Corp. LTD., 144A
7.25%, 12/15/06 ..................... 518,925
BBB- 1,000 Petrozuata Finance Inc., 144A
7.63%, 4/01/09 ...................... 1,025,000
----------
2,554,616
----------
ASSET BACKED SECURITIES--4.1%
Structured Mortgage Asset
Residential Trust,
AAA 710 Series 1997-2, 144A
8.24%, 3/15/06 ...................... 714,909
AAA 732 Series 1997-3, 144A
8.724%, 4/15/06 ..................... 743,463
AAA 293 Series 1997-4, 144A
7.85%, 4/l5/05 ...................... 295,241
----------
1,753,613
----------
STRIPPED MORTGAGE-BACKED
SECURITIES--7.6%
Federal Home Loan
Mortgage Corporation
2,286 Series 65, Class 65-I,
8/15/20 (I/O) ....................... 573,505
912 Series 141, Class 141-H,
5/15/21 (I/O) ....................... 264,675
2,571++ Series 1900, Class 1900-SV,
8/15/08 (I/O) ....................... 538,170
48,963 Series 1995, Class 1995-SB,
10/15/27 (I/O) ...................... 145,360
Federal National Mortgage
Association,
72 Trust G-21, Class 21-L,
7/25/21 (I/O) ....................... 172,677
6
<PAGE>
================================================================================
PRINCIPAL
RATINGS* AMOUNT VALUE
(UNAUDITED) (000) DESCRIPTION (NOTE 1)
- --------------------------------------------------------------------------------
$3,517++ Trust 1994-42, Series 42-SO,
3/25/23 (I/O) ....................... $ 507,746
1,341+ Trust 1994-46, Class 46-D,
11/25/23 (P/O), ..................... 724,569
Salomon Brothers Mortgage
Securities Inc. VI,
284 Series 1987-3, Class A,
10/23/17 (P/O) ...................... 224,319
291 Series 1987-3, Class B,
10/23/17 (I/O) ...................... 101,713
-----------
3,252,734
-----------
U.S. GOVERNMENT SECURITIES--9.7%
994 Small Business Administration
Participation Certificate,
Series 1995-10,
Class 10-C, 7.35%, 8/01/05 ............ 1,039,057
3,000 U.S. Treasury Notes,
6.375%, 8/15/27 ....................... 3,091,860
-----------
4,130,917
-----------
MUNICIPAL BONDS--7.5%
AA- 500 Fresno California Pension
Obligation, Taxable, Series 1994,
7.80%, 6/01/14 ...................... 552,100
AAA 500 Kern County California
Pension Obligation, Taxable,
6.98%, 8/15/09 ........................ 511,380
Los Angeles County California
Pension, Taxable,
AAA 1,000 Series A, 8.62%, 6/30/06 .............. 1,138,290
AAA 500 Series D, 6.97%, 6/30/08 .............. 516,705
AAA 500 Orleans Parish Louisiana
School Board, Taxable,
Ref., Series A,
6.60%, 2/01/08 ........................ 496,585
-----------
3,215,060
-----------
Total Long-Term Investments
(cost $58,881,320) .................... 62,362,923
-----------
CONTRACTS # SHORT-TERM INVESTMENTS--0.5%
PUT OPTION PURCHASED--0.0%
15 U.S. Treasury Note, 6.625%,
5/31/07 @ 100, expiring 3/19/98
(cost $223,828) ....................... 19,020
REPURCHASE AGREEMENT-0.5%
210 State Street Bank 5.30%
dated 10/31/97, due 11/3/97 in
the amount of $210,093 (cost
$210,000, collateralized by
$215,000 United States Treasury
Note, 5.25%, due 12/31/97,
value including accrued
interest--$215,093) ................... 210,000
-----------
Total Short-Term Investments
(cost $433,828) 229,020
-----------
Total Investments--146.2%
(cost $59,315,148) .................... 62,591,943
Liabilities in excess of other
assets--(46.2%) ..................... (19,781,478)
-----------
NET ASSETS--100% ........................ $42,810,465
===========
* Using the higher of Standard & Poor's or Moody's Rating.
Partial principal amount pledged as collateral for reverse
repurchase agreements.
Entire principal amount pledged as collateral for reverse
repurchase agreements.
@ Partial principal amount pledged as collateral for futures
transactions.
# One contract equals 100,000 face value.
- --------------------------------------------------------------------------------
Key to Abbreviations
ARM --Adjustable Rate Mortgage.
I --Denotes a CMO with interest only characteristics.
I/O --Interest Only.
P/O --Principal Only.
REMIC --Real Estate Mortgage Investment Conduit.
- --------------------------------------------------------------------------------
See Notes to Financial Statements
7
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK BROAD INVESTMENT
GRADE 2009 TERM TRUST INC.
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1997
- --------------------------------------------------------------------------------
ASSETS
Investments, at value
(cost $59,315,148) (Note 1) ............................. $62,591,943
Cash ....................................................... 38,700
Interest receivable ........................................ 707,721
Interest rate cap, at value
(amortized cost $138,689) (Notes 1 & 3) ................. 102,250
Deferred organization expenses and other
assets .................................................. 5,278
-----------
63,445,892
-----------
LIABILITIES
Reverse repurchase agreements (Note 4) ..................... 20,363,000
Payable for investments purchased .......................... 119,285
Dividends payable .......................................... 25,266
Interest payable ........................................... 53,960
Advisory fee payable (Note 2) .............................. 19,772
Administration fee payable (Note 2) ........................ 5,382
Unrealized depreciation on interest rate swaps
(Notes 1 and 3) .......................................... 4,427
Variation margin payable on open futures
contracts (Notes 1 and 3) ............................... 1,776
Other accrued expenses ..................................... 42,559
-----------
20,635,427
-----------
NET ASSETS ................................................. $42,810,465
===========
Net assets were comprised of:
Common stock:
Par value (Note 5) ................................... $ 29,571
Paid-in capital in excess of par ..................... 40,699,403
-----------
............................................................ 40,728,974
Undistributed net investment income ..................... 827,358
Accumulated net realized loss ........................... (1,870,050)
Net unrealized appreciation ............................. 3,124,183
-----------
Net assets, October 31, 1997 ............................ $42,810,465
===========
Net asset value per share:
($42,810,465 / 2,957,093 shares of
common stock issued and outstanding) .................... $14.48
======
- -------------------------------------------------------------------------------
THE BLACKROCK BROAD INVESTMENT
GRADE 2009 TERM TRUST INC.
STATEMENT OF OPERATIONS
YEAR ENDED OCTOBER 31, 1997
- -------------------------------------------------------------------------------
NET INVESTMENT INCOME
Income
Interest earned (including net amortization of
premium of $915,305 and net of interest
expense of $1,062,448) ............................... $ 3,657,293
-----------
Operating Expenses
Investment advisory ..................................... 222,951
Administration .......................................... 60,805
Reports to shareholders ................................. 26,648
Audit ................................................... 25,500
Custodian ............................................... 19,554
Directors ............................................... 11,360
Transfer agent .......................................... 8,779
Legal ................................................... 3,941
Miscellaneous ........................................... 33,357
-----------
Total operating expenses ................................ 412,895
-----------
Net investment income ...................................... 3,244,398
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (NOTE 3)
Net realized gain (loss) on:
Investments ............................................. 916,852
Short sales ............................................. 172
Futures ................................................. (847,184)
-----------
69,840
-----------
Net change in unrealized appreciation (depreciation) on:
Investments ............................................. 2,258,858
Interest rate cap ....................................... (36,439)
Futures ................................................. 129,927
-----------
2,352,346
-----------
Net gain on investments .................................... 2,422,186
-----------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS .............................................. $ 5,666,584
===========
8
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK BROAD INVESTMENT
GRADE 2009 TERM TRUST INC.
STATEMENT OF CASH FLOWS
YEAR ENDED OCTOBER 31, 1997
- --------------------------------------------------------------------------------
INCREASE (DECREASE) IN CASH
Cash flows provided by operating activities:
Interest purchased, net of interest received ............ $ 4,841,451
Operating expense paid .................................. (397,869)
Interest expense paid ................................... (1,044,584)
Purchase of long-term portfolio investments ............. (24,369,828)
Proceeds from disposition of long-term portfolio
investments .......................................... 21,322,742
Other ................................................... 54,783
------------
Net cash flows provided by operating activities ......... 406,695
------------
Cash flows used for financing activities:
Increase in reverse repurchase agreements ............... 2,282,000
Cash dividends paid ..................................... (2,670,253)
------------
Net cash flows used for financing activities ............ (388,253)
------------
Net increase in cash ....................................... 18,442
Cash at beginning of year .................................. 20,258
------------
Cash at end of year ........................................ $ 38,700
============
RECONCILIATION OF NET INCREASE IN
NET ASSETS RESULTING FROM OPERATIONS
TO NET CASH FLOWS PROVIDED BY
OPERATING ACTIVITIES
Net increase in net assets resulting from operations ....... $ 5,666,584
------------
Increase in investments .................................... (2,958,893)
Net realized gain on investments, short
sales and futures ........................................ (69,840)
Increase in unrealized appreciation ........................ (2,352,346)
Decrease in interest receivable ............................ 121,710
Increase in interest rate cap .............................. (138,689)
Decrease in deferred organization expenses
and other assets ........................................ 6,368
Increase in payable for investments purchased .............. 119,285
Increase in interest payable ............................... 17,864
Decrease in accrued expenses and other liabilities (5,348)
------------
Total adjustments ....................................... (5,259,889)
------------
Net cash flows provided by operating activities ............ $ 406,695
------------
- --------------------------------------------------------------------------------
THE BLACKROCK BROAD INVESTMENT
GRADE 2009 TERM TRUST INC.
STATEMENTS OF CHANGES IN
NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INCREASE (DECREASE) IN YEAR ENDED OCTOBER 31,
NET ASSETS ----------------------------
1997 1996
---- ----
<S> <C> <C>
Operations:
Net investment income ............... $ 3,244,398 $ 2,942,432
Net realized gain on
investments, short sales
and futures ...................... 69,840 89,681
Net unrealized appreciation
(depreciation) on
investments, interest rate
cap and futures .................. 2,352,346 (163,059)
----------- -----------
Net increase in net
assets resulting from
operations ....................... 5,666,584 2,869,054
Dividends from
net investment income ............... (2,661,232) (2,698,240)
----------- -----------
Total increase ...................... 3,005,352 170,814
NET ASSETS
Beginning of year ...................... 39,805,113 39,634,299
----------- -----------
End of year ............................ $42,810,465 $39,805,113
=========== ===========
</TABLE>
See Notes to Financial Statements.
9
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK BROAD INVESTMENT GRADE 2009 TERM TRUST INC.
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Period
June 25,
Year Ended October 31, 1993* to
--------------------------- October 31,
PER SHARE OPERATING PERFORMANCE: 1997 1996 1995 1994 1993
------ ----- ----- ------ -----
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period .............................. $ 13.46 $ 13.40 $ 11.94 $ 14.56 $ 14.10
------- -------- -------- ------ --------
Net investment income (net of interest expense of
$.36, $.35, $.68, $.34 and $.02) .............................. 1.10 1.00 0.85 0.95 0.28
Net realized and unrealized gain (loss) on investments ......... 0.82 (0.03) 1.60 (2.48) 0.52
------- -------- -------- ------ --------
Net increase (decrease) from investment operations ................ 1.92 0.97 2.45 (1.53) 0.80
------- -------- -------- ------ --------
Dividends from net investment income .............................. (0.90) (0.91) (0.85) (0.95) (0.27)
Distributions from realized capital gains ......................... -- -- -- (0.02) --
Distributions from paid-in capital ................................ -- -- (0.14) (0.09) --
------- -------- -------- ------ --------
Total dividends and distributions ................................. (0.90) (0.91) (0.99) (1.06) (0.27)
------- -------- -------- ------ --------
Capital charge with respect to issuance of shares ................. -- -- -- (0.03) (0.07)
------- -------- -------- ------ --------
Net asset value, end of period** .................................. $ 14.48 $ 13.46 $ 13.40 $ 11.94 $ 14.56#
======= ======== ======== ====== ========
Per share market value, end of period** ........................... $12.125 $ 11.00 $ 11.125 $ 10.00 $ 13.75
======= ======== ======== ====== ========
TOTAL INVESTMENT RETURN+........................................... 19.05% 6.67% 22.43% (20.41%) (0.60%)
RATIOS TO AVERAGE NET ASSETS:
Operating Expenses @ .............................................. 1.02% 1.12% 1.00% 1.04% 0.97%++
Net investment income ............................................. 8.03% 7.59% 6.78% 7.31% 5.66%++
SUPPLEMENTAL DATA:
Average net assets (in thousands) ................................. $40,416 $38,786 $37,080 $38,468 $41,195
Portfolio turnover ................................................ 36% 58% 116% 41% 27%
Net assets, end of period (in thousands) .......................... $42,810 $39,805 $39,634 $35,320 $43,051
Reverse repurchase agreements outstanding, end of
period (in thousands) ........................................... $20,363 $18,081 $18,489 $16,003 $18,375
Asset coverage+++.................................................. $ 3,102 $ 3,209 $ 3,144 $ 3,207 $ 3,343
</TABLE>
- ----------------
* Commencement of investment operations.
** 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 $14.03.
@ The ratios of operating expenses, including interest expense, to average
net assets were 3.65%, 3.81%, 6.42%, 3.65%, and 1.31% for the periods
indicated above, respectively.
+ Total investment return is calculated assuming a purchase of common stock
at the current market value on the first day and a sale at the current
market price on the last day of the period reported. Dividends and
distributions, if any, are assumed for purposes of this calculation, to be
reinvested at prices obtained under the Trust's dividend reinvestment
plan. Total investment return does not reflect brokerage commissions.
Total investment returns for less than one full year are not annualized.
++ Annualized.
+++ Per $1,000 of reverse repurchase agreements outstanding.
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 each of the periods indicated. This
information has been determined based upon financial information provided in the
financial statements and market value data for the Trust's shares.
See Notes to Financial Statements.
10
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK BROAD INVESTMENT
GRADE 2009 TERM TRUST INC.
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NOTE 1. ACCOUNTING POLICIES
The BlackRock Broad Investment Grade 2009 Term Trust Inc. (the "Trust"), a
Maryland corporation, is a diversified, closed-end management investment
company. The Trust had no transactions until June 16, 1993, when it sold 7,093
shares of common stock for $100,012 to BlackRock Financial Management, Inc.
Investment operations commenced on June 25, 1993. The investment objective of
the Trust is to manage a portfolio of fixed income securities that will return
$15 per share to investors on or shortly before December 31, 2009 while
providing high monthly income. The ability of issuers of debt securities held by
the Trust to meet their obligations may be affected by economic developments in
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: The Trust values mortgage-backed, asset-backed securities
and other debt securities on the basis of current market quotations provided by
dealers or pricing services approved by the Trust's Board of Directors. In
determining the value of a particular security, pricing services may use certain
information with respect to transactions in such securities, quotations from
dealers, market transactions in comparable securities, various relationships
observed in the market between securities, and calculated yield measures based
on valuation technology commonly employed in the market for such securities.
Exchange-traded options are valued at their last sales price as of the close of
options trading on the applicable exchanges. In the absence of a last sale,
options are valued at the average of the quoted bid and asked prices as of the
close of business. A futures contract is valued at the last sale price as of the
close of the commodities exchange on which it trades unless the Trust's Board of
Directors determines that such price does not reflect its fair value, in which
case it will be valued at its fair value as determined by the Trust's Board of
Directors. Any securities or other assets for which such current market
quotations are not readily available are valued at fair value as determined in
good faith under procedures established by and under the general supervision and
responsibility of the Trust's Board of Directors.
Short-term securities which mature in 60 days or less are valued at
amortized cost, if their term to maturity from date of purchase is 60 days or
less. Short-term securities with a term to maturity greater than 60 days from
the date of purchase are valued at current market quotations until maturity.
In connection with transactions in repurchase agreements, the Trust's
custodian takes possession of the underlying collateral securities, the value of
which at least equals the principal amount of the repurchase transaction,
including accrued interest. To the extent that any repurchase transaction
exceeds one business day, the value of the collateral is marked-to-market on a
daily basis to ensure the adequacy of the collateral. If the seller defaults and
the value of the collateral declines or if bankruptcy proceedings are commenced
with respect to the seller of the security, realization of the collateral by the
Trust may be delayed or limited.
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.
Options, when used by the Trust, help in maintaining a targeted duration.
Duration is a measure of the price sensitivity of a security or a portfolio to
relative changes in interest rates. For instance, a duration of "one" means that
a portfolio's or a security's price would be expected to change by approximately
one percent with a one percent change in interest rates, while a duration of
five would imply that the price would move approximately five percent in
relation to a one percent change in interest rates.
11
<PAGE>
Option selling and purchasing is used by the Trust to effectively hedge more
volatile positions so that changes in interest rates do not change the duration
of the portfolio unexpectedly. In general, the Trust uses options to hedge a
long or short position or an overall portfolio that is longer or shorter than
the benchmark security. A call option gives the purchaser of the option the
right (but not obligation) to buy, and obligates the seller to sell (when the
option is exercised), the underlying position at the exercise price at any time
or at a specified time during the option period. A put option gives the holder
the right to sell and obligates the writer to buy the underlying position at the
exercise price at any time or at a specified time during the option period. Put
options can be purchased to effectively hedge a position or a portfolio against
price declines if a portfolio is long. In the same sense, call options can be
purchased to hedge a portfolio that is shorter than its benchmark against price
changes. The trust can also sell (or write) covered call options and put options
to hedge portfolio positions.
The main risk that is associated with purchasing options is that the option
expires without being exercised. In this case, the option expires worthless and
the premium paid for the option is considered the loss. The risk associated with
writing call options is that the Trust may forego the opportunity for a profit
if the market value of the underlying position increases and the option is
exercised. The risk in writing put options is that the Trust may incur a loss if
the market value of the underlying position decreases and the option is
exercised. In addition, as with futures contracts, the Trust risks not being
able to enter into a closing transaction for the written option as the result of
an illiquid market.
SWAP OPTIONS: Swap options are similar to options on securities except that
instead of selling or purchasing the right to buy or sell a security, the writer
or purchaser of the swap option is granting or buying the right to enter into a
previously agreed upon interest rate swap agreement at any time before the
expiration of the option. Premiums received or paid from writing or purchasing
options are recorded as liabilities or assets and are 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 commission, 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 loss on investment transactions.
The main risk that is associated with purchasing swap options is that the
swap option expires without being exercised. In this case, the option expires
worthless and the premium paid for the swap option is considered the loss. The
main risk that is associated with the writing of a swap option is the market
risk of an unfavorable change in the value of the interest rate swap underlying
the written swap option.
Swap options may be used by the Trust to manage the duration of the Trust's
portfolio reflecting the view of the Trust's management in the direction of
interest rates.
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 the proceeds from (or cost of) the closing
transaction and the Trust's basis in the contract.
Financial futures contracts, when used by the Trust, help in maintaining a
targeted duration. Futures contracts can be sold to effectively shorten an
otherwise longer duration portfolio. In the same sense, futures contracts can be
purchased to lengthen a portfolio that is shorter than its duration target.
Thus, by buying or selling futures contracts, the Trust can effectively "hedge"
more volatile positions so that changes in interest rates do not change the
duration of the portfolio unexpectedly.
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
12
<PAGE>
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. The Trust is also at risk of not being able to
enter into a closing transaction for the futures contract because of an illiquid
secondary market. In addition, since futures are used to shorten or lengthen a
portfolio's duration, there is a risk that the portfolio may have temporarily
performed better without the hedge or that the Trust may lose the opportunity to
realize appreciation in the market price of the underlying positions.
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 security 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 LENDING: The Trust may lend its portfolio securities to qualified
institutions. The loans are secured by collateral at least equal, at all times,
to the market value of the securities loaned. The Trust may bear the risk of
delay in recovery of, or even loss of rights in, the securities loaned should
the borrower of the securities fail financially. The Trust receives compensation
for lending its securities in the form of interest on the loan. The Trust also
continues to receive interest on the securities loaned, and any gain or loss in
the market price of the securities loaned that may occur during the term of the
loan will be for the account of the Trust. The Trust did not engage in
securities lending during the year ended October 31, 1997.
INTEREST RATE SWAPS: In an interest rate swap, one investor pays a floating rate
of interest on a notional principal amount and receives a fixed rate of interest
on the same notional principal amount for a specified period of time.
Alternatively, an investor may pay a fixed rate and receive a floating rate.
Rate swaps were conceived as asset/liability management tools. In more complex
swaps, the notional principal amount may decline (or amortize) over time.
During the term of the swap, changes in the value of the swap are recognized
as unrealized gains or losses by "marking-to-market" to reflect the market value
of the swap. When the swap is terminated, the Trust will record a realized gain
or loss equal to the difference between the proceeds from (or cost of) the
closing transaction and the Trust's basis in the contract, if any.
The Trust is exposed to credit loss in the event of non-performance by the
other party to the interest rate swap. However, the Trust does not anticipate
non-performance by any counterparty.
INTEREST RATE CAPS: Interest rate caps are similar to interest rate swaps,
except that one party agrees to pay a fee, while the other party pays the
excess, if any, of a floating rate over a specified fixed or floating rate.
Interest rate caps are intended to both manage the duration of the Trust's
portfolio and its exposure to changes in short term rates. Owning interest rate
caps reduces the portfolio's duration, making it less sensitive to changes in
interest rates from a market value perspective. The effect on income involves
protection from rising short term rates, which the Trust experiences primarily
in the form of leverage.
The Trust is exposed to credit loss in the event of non-performance by the
other party to the interest rate cap. However, the Trust does not anticipate
non-performance by any counterparty.
Transactions fees paid or received by the Trust are recognized as assets or
liabilities and amortized or accreted into interest expense or income over the
life of the interest rate cap. The asset or liability is subsequently adjusted
to the current market value of the interest rate cap purchased or sold. Changes
in the value of the interest rate cap are recognized as unrealized gains and
losses.
INTEREST RATE FLOORS: Interest rate floors are similar to interest rate swaps,
except that one party agrees to pay a fee, while the other party pays the
deficiency, if any, of a floating rate under a specified fixed or floating rate.
Interest rate floors are used by the Trust to both manage the duration of
the portfolio and its exposure to changes in
13
<PAGE>
short-term interest rates. Owning interest rate floors reduces the portfolio's
duration, making it less sensitive to changes in interest rates from a market
value perspective. The effect on income involves protection from falling short
term rates, which the Trust experiences primarily in the form of leverage.
The Trust is exposed to credit loss in the event of non-performance by the
other party to the interest rate floor. However, the Trust does not anticipate
non-performance by any counterparty.
Transactions fees paid or received by the Trust are recognized as assets or
liabilities and amortized or accreted into interest expense or income over the
life of the interest rate floor. The asset or liability is subsequently adjusted
to the current market value of the interest rate floor purchased or sold.
Changes in the value of the interest rate floor are recognized as unrealized
gains and losses.
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 accretes discount or amortizes premium on securities
purchased using the interest method.
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 amounts of its taxable income to shareholders. Therefore,
no Federal income tax provision is required. As part of a tax planning strategy,
the Trust intends to retain a portion of its taxable income and pay an excise
tax on the undistributed amounts.
DIVIDENDS AND DISTRIBUTIONS: The Trust declares and pays dividends and
distributions monthly first from net investment income, then from realized
short-term capital gains and other sources, if necessary. Net long-term capital
gains, if any, in excess of loss carryforwards may be distributed annually.
Dividends and distributions are recorded on the ex-dividend date.
DEFERRED ORGANIZATION EXPENSES: A total of $30,000 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.
ESTIMATES: The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
NOTE 2. AGREEMENTS
The Trust has an Investment Advisory Agreement with BlackRock Financial
Management, Inc. (the "Adviser"), a wholly-owned corporate subsidiary of 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 fee paid to the Adviser is computed weekly and payable
monthly at an annual rate of 0.55% of the Trust's average weekly net assets. The
administration fee paid to the Administrator is also computed weekly and payable
monthly at an annual rate of 0.15% of the Trust's average weekly net assets.
Pursuant to the agreements, the Adviser provides contin-
uous supervision of the investment portfolio and pays the compensation of
officers of the Trust. The Administrator pays occupancy and certain clerical and
accounting costs of the Trust. The Trust bears all other costs and expenses.
NOTE 3. PORTFOLIO SECURITIES
Purchases and sales of investment securities, other than short-term investments
and dollar rolls, for the year ended October 31, 1997 aggregated $24,489,113 and
$21,408,616, respectively.
The Trust may invest in securities which are not readily marketable,
including those which are restricted as to disposition under securities law
("restricted securities"). At October 31, 1997, the Trust held 16.9% of its
portfolio assets in securities restricted as to resale.
The Trust may from time to time purchase in the secondary market certain
mortgage pass-through securities packaged or master serviced by PNC Mortgage
Securities Corp. (or Sears Mortgage if PNC Mortgage Securities Corp.
14
<PAGE>
succeeded to rights and duties of Sears) or mortgage related securities
containing loans or mortgages originated by PNCBank or its affiliates.It is
possible under certain circumstances, PNC Mortgage Securities Corp. or its
affiliates could have interests that are in conflict with the holders of these
mortgage backed securities, and such holders could have rights against PNC
Mortgage Securities Corp. or its affiliates.
The federal income tax basis of the Trust's investments at October 31, 1997
was substantially the same as the basis for financial reporting and,
accordingly, net unrealized appreciation for federal income tax purposes was
$3,276,795 (gross unrealized appreciation--$3,678,868, gross unrealized
depreciation--$402,073).
For Federal income tax purposes, the Trust had a capital loss carryforward
at October 31, 1997 of approximately $2,000,000 which will expire in 2003.
Accordingly, no capital gain distribution is expected to be paid to shareholders
until net gains have been realized in excess of such amount.
At October 31, 1997 the Trust entered into financial futures contracts.
Details of open contracts at October 31, 1997 are as follows:
VALUE AT
NUMBER OF EXPIRATION VALUE AT OCTOBER 31, UNREALIZED
CONTRACTS TYPE DATE TRADE DATE 1997 DEPRECIATION
--------- ---- --------- --------- --------- -----------
Short Position:
10 yr. U.S.
30 T-Note Dec. 97 $3,269,865 $3,352,500 $ (82,635)
8 Eurodollar Dec. 97 1,873,158 1,880,200 (7,042)
8 Eurodollar Mar. 98 1,879,858 1,884,900 (5,042)
8 Eurodollar Jun. 98 1,877,758 1,883,700 (5,942)
8 Eurodollar Sep. 98 1,875,558 1,882,300 (6,742)
8 Eurodollar Dec. 98 1,880,858 1,885,300 (4,442)
----------
$ (111,845)
==========
The Trust entered into an interest rate swap agreement which settled on July
28, 1997 with a notional amount of $10,000,000. Under the agreement, the Trust
will pay interest to the counterparty on the notional amount at a rate of 6.421%
and will receive from the counterparty interest on the notional amount at the 3
month LIBOR rate. The agreement terminates on July 27, 2001. At October 31, 1997
the unrealized depreciation was $62,594.
The Trust entered into an interest rate swap agreement which settled on July
28, 1997 with a notional amount of $14,550,000. Under the agreement, the Trust
will pay interest to the counterparty on the notional amount at the 3 month
LIBOR rate and will receive from the counterparty interest on the notional
amount at a rate of 6.365%. The agreement terminates on July 27, 2000. At
October 31, 1997 the unrealized appreciation was $58,167.
The Trust entered into an interest rate cap which settled onFebruary 19,
1997 with a notional amount of $5 million. Under this agreement, the Trust
receives the excess, if any, of three-month LIBOR over the fixed rate of 6.00%.
The agreement terminates onFebruary 19, 2002. At October 31, 1997 unrealized
depreciation was $36,439.
NOTE 4. BORROWINGS
REVERSE REPURCHASE AGREEMENTS: The Trust may enter into reverse repurchase
agreements with qualified, third party broker-dealers as determined by and under
the direction of the Trust's Board of Directors. Interest on the value of
reverse repurchase agreements issued and outstanding is based upon competitive
market rates at the time of issuance. At the time the Trust enters into a
reverse repurchase agreement, it will establish and maintain a segregated
account with the lender, the value of which at least equals the principal amount
of the reverse repurchase transactions including accrued interest.
The average daily balance of reverse repurchase agreements outstanding
during the year ended October 31, 1997 was approximately $18,907,494 at a
weighted average interest rate of approximately 5.55%. The maximum amount of
reverse repurchase agreements outstanding at any month-end during the period was
$20,840,625 as of June 30, 1997 which was 33.0% of total assets.
DOLLAR ROLLS: The Trust may enter into dollar rolls in which the Trust sells
securities for delivery in the current month and simultaneously contracts to
repurchase substantially similar (same type, coupon and maturity) securities on
a specified future date. During the roll period the Trust forgoes principal and
interest paid on the securities. The Trust will be compensated by the interest
earned on the cash proceeds of the initial sale and by the lower repurchase
price at the future date. The Trust did not enter into any dollar roll
transactions during the year ended October 31, 1997.
15
<PAGE>
NOTE 5. CAPITAL
There are 200 million shares of $.01 par value common stock authorized. Of the
2,957,093 shares outstanding at October 31, 1997, the Adviser owned 7,093
shares.
Offering costs ($280,662) incurred in connection with the underwriting of
the Trust's shares have been charged to paid-in capital in excess of par.
NOTE 6. DIVIDENDS
Subsequent to October 31, 1997, the Board of Directors of the Trust declared a
dividend from undistributed earnings of $0.075 per share payable November 28,
1997 to shareholders of record on November 14, 1997.
16
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK BROAD INVESTMENT GRADE 2009 TERM TRUST INC.
REPORT OF INDEPENDENT AUDITORS
- --------------------------------------------------------------------------------
The Shareholders and Board of Directors of
The BlackRock Broad Investment Grade 2009 Term Trust Inc.:
We have audited the accompanying statement of assets and liabilities,
including the portfolio of investments, of The BlackRock Broad Investment Grade
2009 Term Trust Inc. as of October 31, 1997 and the related statements of
operations and of cash flows for the year then ended and of changes in net
assets for each of the two years in the period then ended, and financial
highlights for each of the four years in the period then ended and the period
June 25, 1993 (commencement of investment operations) to October 31, 1993. 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 October
31, 1997 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 Broad
Investment Grade 2009 Term Trust Inc. at October 31, 1997 and the results of its
operations, its cash flows, the changes in its net assets and the financial
highlights for the respective stated periods in conformity with generally
accepted accounting principles.
/s/Deloitte & Touche LLP
- ------------------------
Deloitte & Touche LLP
New York, New York
December 12, 1997
17
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK BROAD INVESTMENT GRADE 2009 TERM TRUST INC.
TAX INFORMATION
- --------------------------------------------------------------------------------
We wish to advise you as to the federal tax status of dividends and
distributions paid by the Trust during its fiscal year ended October 31, 1997.
During the fiscal year ended October 31, 1997, the Trust paid dividends
totalling $.90 per share all of which is taxable as ordinary income. For federal
income tax purposes, the aggregate of any dividends and short-term capital gains
distributions you received are reportable in your 1997 federal income tax return
as ordinary income.Further, we wish to advise you that your income dividends do
not qualify for the dividends received deduction.
For the purpose of preparing your 1997 annual federal income tax return,
however, you should report the amounts as reflected on the appropriate Form 1099
DIV which will be mailed to you in January 1998.
- --------------------------------------------------------------------------------
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 pursuant to the Plan. Shareholders who do not participate in the
Plan will receive all distributions in cash paid by check in United States
dollars mailed directly to the shareholders of record (or if the shares are held
in street or other nominee name, then to the nominee) by the 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 American
Stock Exchange or elsewhere, for the participants' accounts. The Trust will not
issue any new shares under the Plan.
Participants in the Plan may withdraw from the Plan upon written notice to
the Plan Agent and will receive certificates for whole Trust shares and a cash
payment 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, state and or local income taxes
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) 669-1BFM. The address is on the front of
this report.
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ADDITIONAL INFORMATION
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There have been no material changes in the Trust's investment objectives or
policies that have not been approved by the shareholders, or to its charter or
by-laws, or in the principal risk factors associated with investment in the
Trust. There have been no changes in the persons who are primarily responsible
for the day-to-day management of the Trust's portfolio.
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THE BLACKROCK BROAD INVESTMENT GRADE 2009 TERM TRUST INC.
INVESTMENT SUMMARY
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THE TRUST'S INVESTMENT OBJECTIVE
The Trust's investment objective is to manage a portfolio of fixed income
securities that will return $15 per share (the initial public offering price per
share) to investors on or about December 31, 2009 while providing high monthly
income.
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 over $50
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, which trade on either the New York Stock or
American Stock exchanges, several open-end funds and separate accounts for more
than 125 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 may invest in all fixed income securities rated investment grade or
higher ("AAA", "AA", "A" or "BBB"). Examples of securities in which the Trust
may invest include U.S. government and government agency securities, zero coupon
securities, mortgage-backed securities, corporate debt securities, asset-backed
securities, U.S. dollar-denominated foreign debt securities and municipal
securities. Under current market conditions, BlackRock expects that the primary
investments of the Trust will be U.S. government securities, securities backed
by government agencies (such as mortgage-backed securities), corporate debt
securities and privately issued mortgage-backed securities.
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 Adviser 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 on or about December 31, 2009. 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 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 assets in
relation to market conditions, interest rate changes and, importantly, the
remaining term to maturity of the Trust.
In addition to seeking the return of the initial offering price, the Trust also
seeks to provide high monthly income 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
331/3% of the total assets) to enhance the income of the portfolio. In order to
maintain competitive yields as the Trust approaches maturity and depending on
market conditions, the Adviser will attempt to purchase securities with call
protection or maturities as close to the Trust's maturity date as possible.
Securities with call protection should provide the portfolio with some degree of
protection against reinvestment risk during times of lower prevailing interest
rates. Since the Trust's primary goal is to return the initial offering price at
maturity, any cash that the Trust receives prior to its maturity date (i.e. cash
from early and regularly scheduled payments of principal on mortgage-backed
securities) 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. However, the Adviser will attempt to maintain a
yield which is competitive with a comparable maturity Treasury at the same point
on the curve (i.e. if the Trust has three years left until its maturity, the
Adviser will attempt to maintain a yield at a spread over a 3-year Treasury). 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.
HOW ARE THE TRUST'S SHARES PURCHASED AND SOLD? DOES THE TRUST PAY DIVIDENDS
REGULARLY?
The Trust's shares are traded on the American 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 adviser. 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
19
<PAGE>
shares of the Trust through the Trust's transfer agent, State Street Bank &
Trust Company. Investors who wish to hold shares in a brokerage account should
check with their financial adviser 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 use of reverse
repurchase agreements and dollar rolls. 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 331/3% 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 Trust 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 reverse repurchase agreements and
dollar rolls, 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 American Stock Exchange (AMEX symbol: BCT) 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.
MORTGAGE-BACKED AND ASSET-BACKED SECURITIES. The cash flow and yield
characteristics of these securities differ from traditional debt securities. The
major differences typically include more frequent payments and the possibility
of prepayments which will change the yield to maturity of the security.
CORPORATE DEBT SECURITIES. The value of corporate debt securities generally
varies inversely with changes in prevailing market interest rates. The Trust may
be subject to certain reinvestment risks in environments of declining interest
rates.
ZERO COUPON SECURITIES. Such securities receive no cash flows prior to maturity;
therefore, interim price movement on the securities are generally more sensitive
to interest rate movements then securities that make periodic coupon payments.
These securities appreciate in value over time and can play an important role in
helping the Trust achieve its primary objectives.
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. These securities involve special risks.
NON-U.S. SECURITIES. The Trust may invest less than 10% of its total assets in
non-U.S. dollar-denominated securities which involve special risks such as
currency, political and economic risks, although under current market conditions
the Trust does not do so.
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.
20
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THE BLACKROCK BROAD INVESTMENT GRADE 2009 TERM TRUST INC.
GLOSSARY
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ADJUSTABLE RATE
MORTGAGE-BACKED
SECURITIES (ARMS): Mortgage instruments with interest rates that
adjust at periodic intervals at a fixed amount
over the market levels of interest rates as
reflected in specified indexes. ARMS are backed by
mortgage loans secured by real property.
ASSET-BACKED SECURITIES: Securities backed by various types of receivables
such as automobile and credit card receivables.
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.
COLLATERALIZED
MORTGAGE OBLIGATIONS (CMOS): Mortgage-backed securities which separate mortgage
pools into short-, medium-, and long- term
securities with different priorities for receipt
of principal and interest. Each class is paid a
fixed or floating rate of interest at regular
intervals. Also known as multiple-class mortgage
pass-throughs.
DISCOUNT: When a fund's net asset value is greater than its
stock price the Trust 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
on a monthly basis.
DIVIDEND REINVESTMENT: Shareholders may elect to have all dividends and
distributions of capital gains automatically
reinvested into additional shares of the Trust.
FHA: Federal Housing Association, a government agency
that facilitates a secondary mortgage market by
providing an agency that guarantees timely payment
of interest and principal on mortgages.
FHLMC: Federal Home Loan Mortgage Corporation, a publicly
owned, federally chartered corporation that
facilitates a secondary mortgage market by
purchasing mortgages from lenders such as savings
institutions and reselling them to investors by
means of mortgage-backed securities. Obligations
of FHLMC are not guaranteed by the U.S.
government, however; they are backed by FHLMC's
authority to borrow from the U.S. government. Also
known as Freddie Mac.
FNMA: Federal National Mortgage Association, a publicly
owned, federally chartered corporation that
facilitates a secondary mortgage market by
purchasing mortgages from lenders such as savings
institutions and reselling them to investors by
means of mortgage-backed securities. Obligations
of FNMA are not guaranteed by the U.S. government,
however; they are backed by FNMA's authority to
borrow from the U.S. government. Also known as
Fannie Mae.
GNMA: Government National Mortgage Association, a U.S.
government agency that facilitates a secondary
mortgage market by providing an agency that
guarantees timely payment of interest and
principal on mortgages. GNMA's obligations are
supported by the full faith and credit of the U.S.
Treasury. Also known as Ginnie Mae.
GOVERNMENT SECURITIES: Securities issued or guaranteed by the U.S.
government, or one of its agencies or
instrumentalities, such as GNMA (Government
National Mortgage Association), FNMA (Federal
National Mortgage Association) and FHLMC (Federal
Home Loan Mortgage Corporation).
INTEREST-ONLY
SECURITIES (I/O): Mortgage securities that receive only the interest
cash flows from an underlying pool of mortgage
loans or underlying pass-through securities. Also
known as a strip.
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.
21
<PAGE>
MORTGAGE DOLLAR ROLLS: A mortgage dollar roll is a transaction in which
the Trust sells mortgage-backed securities for
delivery in the current month and simultaneously
contracts to repurchase substantially similar
(although not the same) securities on a specified
future date. During the "roll" period, the Trust
does not receive principal and interest payments
on the securities, but is compensated for giving
up these payments by the difference in the current
sales price (for which the security is sold) and
lower price that the Trust pays for the similar
security at the end date as well as the interest
earned on the cash proceeds of the initial sale.
MORTGAGE PASS-THROUGHS: Mortgage-backed securities issued by Fannie Mae,
Freddie Mac or Ginnie Mae. Multiple-Class
Pass-Throughs: Collateralized Mortgage
Obligations. Net Asset Value (NAV): Net asset
value is the total market value of all securities
held by the Trust, plus income accrued on its
investments, minus any liabilities including
accrued expenses, divided by the total number of
outstanding shares. It is the underlying value of
a single share on a given day. Net asset value for
the Trust is calculated weekly and published in
Barron's on Saturday and The Wall Street Journal
each Monday.
PRINCIPAL-ONLY
SECURITIES (P/O): Mortgage securities that receive only the
principal cash flows from an underlying pool of
mortgage loans or underlying pass-through
securities. Also known as a strip.
PROJECT LOANS: Mortgages for multi-family, low- to middle-income
housing. Premium: When a Trust's stock price is
greater than its net asset value, the Trust is
said to be trading at a premium.
REMIC: A real estate mortgage investment conduit is a
multiple-class security backed by mortgage-backed
securities or whole mortgage loans and formed as a
trust, corporation, partnership, or segregated
pool of assets that elects to be treated as a
REMIC for federal tax purposes. Generally, Fannie
Mae REMICs are formed as trusts and are backed by
mortgage-backed securities.
RESIDUALS: Securities issued in connection with
collateralized mortgage obligations that generally
represent the excess cash flow from the mortgage
assets underlying the CMO after payment of
principal and interest on the other CMO securities
and related administrative expenses. Reverse
Repurchase In a reverse repurchase agreement, the
Trust sells securities and agrees to repurchase
them Agreements: at a mutually agreed date and
price. During this time, the Trust continues to
receive the principal and interest payments from
that security. At the end of the term, the Trust
receives the same securities that were sold for
the same initial dollar amount plus interest on
the cash proceeds of the initial sale.
STRIPPED MORTGAGE-BACKED
SECURITIES: Arrangements in which a pool of assets is
separated into two classes that receive different
proportions of the interest and principal
distribution from underlying mortgage-backed
securities. IO's and PO's are examples of strips.
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BLACKROCK FINANCIAL MANAGEMENT, INC.
SUMMARY OF CLOSED-END FUNDS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TAXABLE TRUSTS
- ------------------------------------------------------------------------------------------------------------------------------------
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
TAX-EXEMPT TRUSTS
- ------------------------------------------------------------------------------------------------------------------------------------
MATURITY
PERPETUAL TRUSTS STOCK SYMBOL DATE
---------- ------
The BlackRock Investment Quality Municipal Trust Inc. BKN N/A
The BlackRock California Investment Quality Municipal Trust Inc. RAA N/A
The BlackRock Florida Investment Quality Municipal Trust RFA N/A
The BlackRock New Jersey Investment Quality Municipal Trust Inc. RNJ N/A
The BlackRock New York Investment Quality Municipal Trust Inc. RNY N/A
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 do not hesitate to
call BlackRock at (800) 227-7BFM (7236) or consult with your financial advisor.
23
<PAGE>
BLACKROCK
DIRECTORS
Laurence D. Fink, Chairman
Andrew F. Brimmer
Richard E. Cavanagh
Kent Dixon
Frank J. Fabozzi
James Grosfeld
James Clayburn La Force, Jr.
Walter F. Mondale
Ralph L. Schlosstein
OFFICERS
Ralph L. Schlosstein, President
Scott Amero, Vice President
Keith T. Anderson, Vice President
Michael C. Huebsch, Vice President
Robert S. Kapito, Vice President
Richard M. Shea, Vice President/Tax
Henry Gabbay, Treasurer
James Kong, Assistant Treasurer
Frank Smith, Assistant Treasurer
Karen H. Sabath, Secretary
INVESTMENT ADVISER
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
INDEPENDENT AUDITORS
Deloitte & Touche LLP
Two World Financial Center
New York, NY 10281-1434
LEGAL COUNSEL
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, NY 10022
This report is for shareholder information. This is not a prospectus intended
for use in the purchase or sale of any securities.
THE BLACKROCK BROAD INVESTMENT GRADE 2009
TERM TRUST INC.
c/o Princeton Administrators, L.P.
P.O.Box 9095
Princeton, NJ 08543-9095
(800) 227-7BFM
[LOGO] Printed on recycled paper 092472-10-6
================================================================================
THE BLACKROCK
BROAD INVESTMENT
GRADE 2009
TERM TRUST INC.
================================================================================
ANNUAL REPORT
OCTOBER 31, 1997
[GRAPHIC]
