- -------------------------------------------------------------------------------
THE BLACKROCK BROAD INVESTMENT GRADE 2009 TERM TRUST INC.
SEMI-ANNUAL REPORT TO SHAREHOLDERS
REPORT OF INVESTMENT ADVISER
- --------------------------------------------------------------------------------
May 31, 1998
Dear Shareholder:
Domestic bonds provided investors with modest total returns during the
past six months, as interest rates generally fell. Supporting the bond market
was favorable inflation news and the belief that the Federal Reserve is unlikely
to raise short-term interest rates in the immediate future.
U.S. economic growth has remained relatively robust, spurred by lower
interest rates and strong consumer demand. However, the economic weakness of
Asia looms large. While the fallout from the Asian fiscal crisis probably has
yet to materialize in the U.S., we expect a "slowdown" in Asia's economies to
slow U.S. growth in 1998. While we expect that interest rates will be fairly
stable in the near-term, our longer-term outlook for the bond market remains
optimistic, based on the fundamentally favorable backdrop of low inflation, a
currently high level of real yields, and declining Treasury borrowing.
As you may know, the five investment management firms that comprised the
PNC Asset Management Group have consolidated under BlackRock, resulting in a
$118 billion money management firm. We look forward to using our global
investment management expertise to present exciting investment opportunities to
closed-end fund shareholders in the future.
This report contains comments from your Trust's managers regarding the
markets and portfolio in addition to the Trust's financial statements and a
detailed portfolio listing. We thank you for your continued investment in the
Trust.
Sincerely,
/s/Laurence D. Fink /s/Ralph L. Schlosstein
- ------------------- -----------------------
Laurence D. Fink Ralph L. Schlosstein
Chairman President
1
<PAGE>
May 31, 1998
Dear Shareholder:
We are pleased to present the semi-annual report for The BlackRock Broad
Investment Grade 2009 Term Trust Inc. ("the Trust") for the six months ended
April 30, 1998. 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
current income. Although there can be no guarantee, BlackRock is confident that
the Trust can achieve its investment objectives.
The Trust seeks its objective 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 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:
<TABLE>
<CAPTION>
---------------------------------------------------------------------
4/30/98 10/31/97 Change High Low
<S> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------
Stock Price $12.6875 $12.125 4.64% $13.125 $12.125
- ---------------------------------------------------------------------------------------------------------------------
Net Asset Value (NAV) $14.62 $14.48 0.97% $14.82 $14.41
- ---------------------------------------------------------------------------------------------------------------------
10-Year U.S.Treasury Note 5.67% 5.83% (0.16%) 5.96% 5.36%
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
THE FIXED INCOME MARKETS
The first four months of 1998 have witnessed continued rapid expansion of
the U.S. economy. GDP growth is estimated at an annual rate of 4.2%, far
exceeding the historical non-inflationary level of 2%. Despite the strong
economic growth, inflation stayed surprisingly subdued. After rising only 1.7%
in 1997, inflation inched higher at a 0.2% annual rate for the first quarter of
1998. One explanation for the absence of inflation in the U.S. economy stems
from the aftermath of the Asian crisis. U.S. exports to Asia have slowed, while
the strength of the dollar caused cheaper Asian imports to flood the U.S. market
and exert downward price pressure on domestic goods.
The Treasury market rallied during the fourth quarter of 1997 and into
1998 before giving back some gains during the past few months. For the
semi-annual period, the yield of the 10-year Treasury security fell from 5.83%
on October 31, 1997 to 5.67% on April 30, 1998. The strong performance of the
Treasury market was in response to moderating economic growth, low inflation and
a "flight to quality" from investors seeking a safe haven in U.S. Treasury
securities. Continued expectations that the Asian crisis will slow economic
growth and force the Fed to leave the Federal funds rate unchanged provided
additional support to the bond market. With Treasury supply waning due to
surplus in the federal budget and increased foreign demand for Treasuries due to
their U.S. government backing and relatively attractive yields, we anticipate a
positive environment for Treasuries for the balance of 1998.
2
<PAGE>
In light of declining interest rates and faster prepayment speeds during
the period, mortgages modestly underperformed the broader investment grade bond
market. As measured by the Lehman Brothers Mortgage Index, mortgages posted a
3.48% total return versus 3.58% for the Lehman Brothers Aggregate Index.
Mortgage rates fell below the critical 7% threshold for the first time since
January 1994, causing concerns that increased refinancing activity would
negatively impact the performance of mortgage securities. Accordingly, lower
coupon securities generally outperformed more prepayment-sensitive higher-coupon
issues. The financial turmoil in Asia caused a decline in perceived corporate
bond credit quality ratings and as a result corporate bonds underperformed
Treasuries in 1997 for only the second time in the past decade. For the
semi-annual period, corporates as measured by Merrill Lynch U.S. Corporate
Master Index returned 3.57%, essentially flat to the Lehman Brothers Aggregate
Index's 3.58%. Lower interest rates brought a substantial amount of new
corporate supply during the first quarter of 1998, contributing to the modest
performance of corporates.
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, 1997 asset
composition:
================================================================================
COMPOSITION APRIL 30, 1998 OCTOBER 31, 1997
================================================================================
Agency Multiple Class
Mortgage Pass-Throughs 26% 26%
- --------------------------------------------------------------------------------
Corporate Bonds 19% 19%
- --------------------------------------------------------------------------------
Inverse-Floating Rate Mortgages 17% 17%
- --------------------------------------------------------------------------------
Commercial Mortgage-Backed Securities 16% 15%
- --------------------------------------------------------------------------------
U.S. Gov't Securities 8% 7%
- --------------------------------------------------------------------------------
Municipal Bonds 5% 5%
- --------------------------------------------------------------------------------
Asset Backed Securities 3% 3%
- --------------------------------------------------------------------------------
Interest Only Mortgage-Backed Securities 3% 3%
- --------------------------------------------------------------------------------
Principal Only Mortgage-Backed Securities 3% 2%
- --------------------------------------------------------------------------------
Mortgage Pass-Throughs -- 2%
- --------------------------------------------------------------------------------
Non-Agency Multiple Class
Mortgage Pass-Throughs -- 1%
================================================================================
We continued to focus on securities with final maturity dates (or "bullet"
maturities) that match the Trust's termination date. Accordingly, the Trust
modestly increased its exposure to U.S. Treasuries and Commercial Mortgage
Backed Securities over the period. Additionally, the Trust was a net seller of
mortgage-backed securities, whose cash flows and maturity dates can change in
response to interest rate movements. Mortgage bonds tend to prepay when interest
rates fall, which forces the bondholder to reinvest cash flows at lower yields.
Conversely, the average maturities of mortgage bonds can extend when interest
rates rise. Specifically, the Trust eliminated its positions in mortgage
pass-throughs and private label CMOs.
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 Director 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 4/30/98: $12.6875
- --------------------------------------------------------------------------------
Net Asset Value as of 4/30/98: $14.62
- --------------------------------------------------------------------------------
Yield on Closing Stock Price as of 4/30/98 ($12.6875)1: 7.09%
- --------------------------------------------------------------------------------
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
APRIL 30, 1998 (UNAUDITED)
================================================================================
PRINCIPAL
AMOUNT VALUE
RATINGS* (000) DESCRIPTION (NOTE 1)
- --------------------------------------------------------------------------------
LONG-TERM INVESTMENTS--140.3%
MULTIPLE CLASS MORTGAGE
PASS-THROUGHS--60.2%
FEDERAL HOME LOAN MORTGAGE
Corp., Multiclass Mortgage
Participation Certificates,
$3,878 Series 1353, Class 1353-S,
8/15/07 (I) ..................... $412,651
397 Series 1472, Class 1472-SA,
3/15/08 (ARM) ................... 375,731
881++ Series 1506, Class 1506-S,
5/15/08 (ARM) ................... 884,829
2,168++ Series 1510, Class 1510-G,
5/15/13 ......................... 2,305,299
314 Series 1543, Class 1543-KB,
9/15/22 (ARM) ................... 277,678
3,000+ Series 1596, Class 1596-D,
10/15/13 ........................ 3,059,520
481 Series 1619, Class 1619-SA,
2/15/22 (ARM) ................... 448,013
1,025 Series 1626, Class 1626-SA,
12/15/08 (ARM) .................. 810,406
331 Series 1637, Class 1637-LE,
12/15/23 (ARM) .................. 302,459
2,550++ Series 1645, Class 1645-IB,
9/15/08 (I) ..................... 574,439
Federal National Mortgage
Association, REMIC
Pass-Through
Certificates,
104 Trust 1992-174, Class 174-S,
9/25/22 (ARM) ................... 201,196
858 Trust 1992-190, Class 190-S,
11/25/07 (ARM) .................. 836,506
208 Trust 1992-205, Class 205-SA,
8/25/21 (ARM) ................... 212,857
1,000++ Trust 1993-49, Class 49-H,
4/25/13 ......................... 1,057,730
3,053+ Trust 1993-79, Class 79-PK,
4/25/22 ......................... 3,093,392
2,646+ Trust 1993-87, Class 87-J,
4/25/22 ......................... 2,575,696
4,000++ Trust 1993-138, Class 138-JK,
5/25/19 (I) ..................... 738,880
1,000 Trust 1993-156, Class 156-SE,
10/25/19 (ARM) .................. 1,018,700
296 Trust 1993-182, Class 182-J,
9/25/23 ......................... 291,719
589+ Trust 1993-191, Class 191-SD,
10/25/08 (ARM) .................. 470,948
1,388 Trust 1993-202, Class 202-VB,
11/25/23 (ARM) .................. 1,245,719
3,591 Trust 1993-223, Class 223-PT,
10/25/23 (I) .................... 550,566
1,177++ Trust 1994-13, Class 13-SM,
2/25/09 (ARM) ................... 1,067,327
748++ Trust 1994-37, Class 37-SC,
3/25/24 (ARM) ................... 703,693
2,103 Trust 1994-39, Class 39-PE,
1/15/23 (I) ..................... 294,464
1,500++ Trust 1996-20, Class 20-SB,
10/25/08 (I) .................... 582,656
1,250 Trust 1997-50, Class 50-HK,
8/25/27 (I). .................... 461,719
1,500++ Trust 1997-90, Class 90-M,
1/25/28 (I) ..................... 607,031
119 Trust G93-25, Class 25-J,
12/25/19 (I) .................... 396,212
246 Trust G93-27, Class 27-SE,
8/25/23 (ARM) ..................... 168,789
----------
26,026,825
==========
COMMERCIAL MORTGAGE-BACKED
SECURITIES--23.1%
BBB+ 500 Citibank, New York N.A.,
Multifamily Mortgage,
Series 1994-1, Class M2,
8.00%, 1/25/19** .................. 522,812
AAA 4,458 CS First Boston Mortgage
Securities Corp.,
Series 1997-C1, Class AX,
4/20/22** (l/O) ................... 489,023
BBB 500 DLJ Mortgage Acceptance
Corp., Series 1997-CF1,
7.91%, 11/25/07** ................. 524,600
BBB+ 750 FDIC REMIC Trust, Mortgage
Pass-Through Certificates,
Series 1994-C1, Class II-F,
8.70%, 9/25/25 .................... 790,046
AAA 500 GS Mortgage Securities Corp.,
Series 1996-PL, Class A2,
7.41%, 2/15/27 .................... 528,662
LTC Commercial Mortgage
Pass-Through Certificates,
A+ 500 Series 1994-1, Class 1-D,
10.00%, 6/15/26 ................. 520,469
AAA 452 Series 1996-1, Class 1-A,
7.06%, 4/15/28** ................ 458,835
Merrill Lynch Mortgage
Investors Inc.,
BBB 500 Series 1995-C1, Class D,
7.964%, 5/25/15 ................. 517,074
BBB 500 Series 1996-C1, Class D,
7.42%, 4/25/28 .................. 509,380
AAA 5,978 Series 1997-C2, Class IO,
1.292%, 12/10/29 (l/O) .......... 484,790
See Notes to Financial Statements.
5
<PAGE>
================================================================================
PRINCIPAL
AMOUNT VALUE
RATINGS* (000) DESCRIPTION (NOTE 1)
- --------------------------------------------------------------------------------
BBB 500 Morgan Stanley Capital 1 Inc.,
Series 1995-GAL1, Class D,
8.25%, 8/15/27** .................. 528,479
AAA 750 New York City Mortgage
Loan Trust, Multifamily
Mortgage Pass-Through,
Class A-2,
6.75%, 6/25/11** .................. 764,766
BBB+ 600 Nomura Asset Capital Corp.,
Series 1993-M1, Class A3,
7.64%, 11/25/03** ................. 614,156
PaineWebber Mortgage
Acceptance Corp. IV,
BBB 750 Series 1995-M1, Class D,
7.30%, 1/15/07** ................ 760,803
BBB 500 Series 1995-M2, Class D,
7.20%, 12/01/03** ............... 506,506
A 461 Resolution Trust Corp.,
Series 1994-C2, Class D,
8.00%, 4/25/25 .................... 466,192
Aa2 474 Salomon Brothers Mortgage
Securities VII,
Series 1997-TZH, Class A1,
7.15%, 3/25/25** .................. 492,263
AAA 500 Structured Asset Securities
Corp., Series
1996-CFL, Class B,
6.303%, 2/25/28 ................... 496,930
----------
9,975,786
==========
CORPORATE BONDS--27.0%
FINANCE & BANKING--9.1%
A3 500 Amsouth Bancorporation,
6.75%, 11/01/25 ................... 512,665
A 600 Equitable Life Assured Society,
6.95%, 12/01/05 ................... 614,949
BB+ 500 Macsaver Financial Services Inc.,
7.875%, 8/01/03 ................... 479,178
A1 500 Metropolitan Life Insurance Co.,
6.30%, 11/01/03** ................. 497,505
A+ 1,000 Morgan Stanley Group, Inc.,
10.00%, 6/15/08 ................... 1,258,280
BBB+ 500 PaineWebber Group, Inc.,
8.875%, 3/15/05 ................... 560,900
----------
3,923,477
----------
CORPORATE BONDS
INDUSTRIALS--8.2%
A3 100@American Airlines Inc., Secured
Equipment Trust,
Series 1990-M,
10.44%, 3/04/07 ................... 124,253
A1 1,000 Dow Capital BV,
9.20%, 6/01/10 .................... 1,197,290
A2 500 Ralcorp Holdings, Inc.,
8.75%, 9/15/04 .................... 565,590
A- 500 Ralston Purina Co.,
9.25%, 10/15/09 ................... 597,210
A2 500 Seagram Joseph E & Sons Inc.,
7.00%, 4/15/08 .................... 515,875
BBB- $ 500 Tele-Communications Inc.,
8.25%, 1/15/03 .................... $ 536,390
----------
3,536,608
----------
CORPORATE BONDS
UTILITIES--4.6%
BBB- 500 360 Communications Co.,
7.50%, 3/01/06 ..................... 530,310
BBB- 373 Mobile Energy Services Co. L.L.C.,
8.665%, 1/01/17 ................... 395,395
BBB- 500 NRG Energy Inc.,
7.625%, 2/01/06** ................. 521,193
Baa2 500 Ohio Edison Co.,
8.625%, 9/15/03 ................... 549,415
----------
1,996,313
----------
CORPORATE BONDS
SOVEREIGN & PROVINCIAL--5.1%
BBB- 500 Empresa Electric Guacolda SA,
7.95%, 4/30/03** .................. 503,568
BBB+ 170 Empresa Electric Pehuhuenche,
7.30%, 5/01/03 .................... 171,943
A3 500 Israel Electric Corp. LTD.,
7.25%, 12/15/06** ................. 511,765
Baa1 1,000 Petrozuata Finance Inc.,
7.63%, 4/01/09** .................. 1,013,750
----------
2,201,026
----------
ASSET BACKED SECURITIES--3.9%
Structured Mortgage Asset
Residential Trust,**
A 670 Series 1997-2,
8.24%, 3/15/06 .................. 676,044
A 708 Series 1997-3,
8.57%, 4/15/06 .................. 720,209
A 281 Series 1997-4,
7.85%, 4/15/05 .................. 282,636
----------
1,678,889
----------
STRIPPED MORTGAGE-BACKED
SECURITIES--8.2%
Federal Home Loan
Mortgage Corp.,
1,963 Series 65, Class 65-I ,
8/15/20 (I/O) ................... 470,522
819 Series 141, Class 141-H,
5/15/21 (I/O) ................... 227,266
2,571++ Series 1900, Class 1900-SV,
8/15/08 (I/O) ................... 447,579
48,963 Series 1995, Class 1995-SB,
10/15/27 (I/O) .................. 122,407
Federal National Mortgage
Association,
61 Trust G-21, Class 21-L,
7/25/21 (I/O) ................... 148,375
3,267++ Trust 1994-42, Class 42-SO,
3/25/23 (I/O) ................... 447,555
1,341+ Trust 1994-46, Class 46-D,
11/25/23 (P/O) .................. 830,106
See Notes to Financial Statements.
6
<PAGE>
================================================================================
PRINCIPAL
AMOUNT VALUE
RATINGS* (000) DESCRIPTION (NOTE 1)
- --------------------------------------------------------------------------------
$ 615 Trust 1997-85, Class 85-LE,
10/25/23 (P/O) .................. $ 508,144
61,353 Trust 1997-81, Class 81-SD,
12/18/27 (I) .................... 86,278
Salomon Brothers Mortgage
Securities Inc. VI,
243 Series 1987-3, CIass A,
10/23/17 (P/O) .................. 196,785
243 Series 1987-3 Class B,
10/23/17 (I/O) .................. 76,258
----------
3,561,275
----------
U.S. GOVERNMENT & AGENCY
SECURITIES--10.4%
625 Small Business Administration
Participation Certificate,
Series 1998-10, Class 10-A,
6.12%, 2/01/08 .................... 617,530
U.S. Treasury Bonds,
1,500++ 6.375%, 8/15/27 ................... 1,578,285
U.S. Treasury Notes,
700 5.50%, 2/15/08 .................... 690,592
1,230+ 5.75%, 11/30/02 ................... 1,233,075
385 6.625%, 5/15/07 ................... 408,219
----------
4,527,701
----------
TAXABLE MUNICIPAL BONDS--7.5%
AA- 500 Fresno California Pension
Obligation, Series 1994,
7.80%, 6/01/14 .................. 556,015
AAA 500 Kern County California
Pension Obligation,
6.98%, 8/15/09. ................. 516,845
Los Angeles County California
Pension Obligation,
AAA 1,000 Series A, 8.62%, 6/30/06 .......... 1,144,890
AAA 500 Series D, 6.97%, 6/30/08 .......... 522,010
AAA 500 Orleans Parish Louisiana
School Board, Series A,
6.60%, 2/01/08 .................. 502,250
----------
3,242,010
----------
Total Long-Term Investments
(cost $58,441,635) .............. 60,669,910
----------
SHORT-TERM INVESTMENTS--(0.1%)
CALL OPTION WRITTEN--(0.1%)
$25,000 Interest Rate Swap,
3 month LIBOR over 5.25%
expires 12/01/98
(premium received $81,250)......... $ (28,700)
Total investments, net of outstanding
call option written--140.2%
(cost $58,360,385) .............. 60,641,210
Liabilities in excess of other
assets--(40.2%) ................. (17,398,520)
----------
NET ASSETS--100% ................... $43,242,690
===========
* Using the higher of Standard & Poor's or Moody's rating.
** Private placements restricted as to resale.
+ Partial principal amount pledged as collateral for reverse
repurchase agreements.
++ Entire principal amount pledged as collateral for reverse
repurchase agreements.
@ Entire principal amount pledged as collateral for futures
transactions.
================================================================================
KEY TO ABBREVIATIONS
ARM --Adjustable Rate Mortgage.
I --Denotes a CMO with Interest Only Characteristics.
I/O --Interest Only.
LIBOR --London InterBank Offer Rate.
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
APRIL 30, 1998 (UNAUDITED)
================================================================================
ASSETS
Investments, at value
(cost $58,441,635) (Note 1) ................................ $ 60,669,910
Cash .......................................................... 91,448
Receivable for investments sold ............................... 981,839
Interest receivable ........................................... 720,998
Interest rate cap, at value
(amortized cost $122,710) (Notes 1 & 3) .................... 61,640
Deferred organization expenses and other
assets (Note 1) ............................................ 4,163
------------
62,529,998
------------
LIABILITIES
Reverse repurchase agreements (Note 4) ........................ 19,095,250
Interest payable .............................................. 111,044
Swap option written, at value
(premium received $81,250) (Note 1) ......................... 28,700
Investment advisory fee payable (Note 2) ...................... 19,690
Due to broker--variation margin
(Notes 1 and 3) ............................................. 6,100
Administration fee payable (Note 2) ........................... 5,370
Unrealized depreciation on interest rate swaps
(Notes 1 and 3) ............................................. 4,999
Other accrued expenses ........................................ 16,155
------------
19,287,308
------------
NET ASSETS .................................................... $ 43,242,690
============
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 ........................ 1,363,309
Accumulated net realized loss .............................. (1,526,530)
Net unrealized appreciation ................................ 2,676,937
------------
Net assets, April 30, 1998 ................................. $ 43,242,690
============
NET ASSET VALUE PER SHARE:
($43,242,690 / 2,957,093 shares of
common stock issued and outstanding) ....................... $ 14.62
============
================================================================================
THE BLACKROCK BROAD INVESTMENT
GRADE 2009 TERM TRUST INC.
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1998 (UNAUDITED)
================================================================================
NET INVESTMENT INCOME
Income
Interest earned (including net amortization of
premium of $313,751 and net of interest
expense of $542,906) ..................................... $ 2,095,380
-----------
Operating Expenses
Investment advisory ........................................ 118,107
Administration ............................................. 32,211
Reports to shareholders .................................... 16,500
Custodian .................................................. 9,500
Audit ...................................................... 9,500
Directors .................................................. 7,500
Transfer agent ............................................. 4,000
Legal ...................................................... 800
Miscellaneous .............................................. 30,710
-----------
Total operating expenses ................................... 228,828
-----------
Net investment income ......................................... 1,866,552
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (NOTE 3)
Net realized gain (loss) on:
Investments and options .................................... 440,715
Futures .................................................... (97,195)
-----------
343,520
-----------
Net change in unrealized appreciation (depreciation) on:
Investments and options .................................... (506,734)
Interest rate cap .......................................... (24,631)
Futures .................................................... 84,119
-----------
(447,246)
-----------
Net loss on investments ....................................... (103,726)
-----------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS ................................................. $ 1,762,826
===========
See Notes to Financial Statements.
8
<PAGE>
================================================================================
THE BLACKROCK BROAD INVESTMENT
GRADE 2009 TERM TRUST INC.
STATEMENT OF CASH FLOWS
SIX MONTHS ENDED APRIL 30, 1998 (UNAUDITED)
================================================================================
INCREASE (DECREASE) IN CASH
Cash flows provided by operating activities:
Interest purchased, net of interest received .............. $ 2,938,760
Operating expense paid .................................... (254,211)
Interest expense paid ..................................... (485,822)
Purchase of short-term portfolio investments
including options, net .................................. 386,791
Purchase of long-term portfolio investments ............... (8,272,153)
Proceeds from disposition of long-term portfolio
investments ............................................. 8,371,752
Variation margin on futures ............................... (8,752)
-----------
Net cash flows provided by operating activities ........... 2,676,365
-----------
Cash flows used for financing activities:
Decrease in reverse repurchase agreements ................. (1,267,750)
Cash dividends paid ....................................... (1,355,867)
-----------
Net cash flows used for financing activities .............. (2,623,617)
-----------
Net increase in cash ......................................... 52,748
Cash at beginning of period .................................. 38,700
-----------
Cash at end of period ........................................ $ 91,448
===========
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 ......... $ 1,762,826
-----------
Decrease in investments ...................................... 1,908,492
Net realized gain on investments, options and futures ........ (343,520)
Decrease in unrealized appreciation .......................... 447,246
Increase in interest receivable .............................. (13,277)
Increase in receivable for investments sold .................. (981,839)
Decrease in interest rate cap ................................ (15,979)
Decrease in deferred organization expenses
and other assets .......................................... 1,115
Decrease in payable for investments purchased ................ (119,285)
Increase in interest payable ................................. 57,084
Decrease in accrued expenses and other liabilities ........... (26,498)
-----------
Total adjustments ......................................... 913,539
-----------
Net cash flows provided by operating activities .............. $ 2,676,365
===========
<PAGE>
================================================================================
THE BLACKROCK BROAD INVESTMENT
GRADE 2009 TERM TRUST INC.
STATEMENTS OF CHANGES IN
NET ASSETS (UNAUDITED)
================================================================================
SIX MONTHS
ENDED YEAR ENDED
INCREASE (DECREASE) IN APRIL 30, OCTOBER 31,
NET ASSETS 1998 1997
---------- --------------
Operations:
Net investment income ............... $ 1,866,552 $ 3,244,398
Net realized gain on
investments, options and
futures ........................... 343,520 69,840
Net unrealized appreciation
(depreciation) on
investments, options,
interest rate caps
and futures ....................... (447,246) 2,352,346
------------ ------------
Net increase in net
assets resulting from
operations ........................ 1,762,826 5,666,584
Dividends from
net investment income ............... (1,330,601) (2,661,232)
------------ ------------
Total increase ...................... 432,225 3,005,352
NET ASSETS
Beginning of period .................... 42,810,465 39,805,113
------------ ------------
End of period .......................... $ 43,242,690 $ 42,810,465
============ ============
See Notes to Financial Statements.
9
<PAGE>
================================================================================
THE BLACKROCK BROAD INVESTMENT GRADE 2009 TERM TRUST INC.
FINANCIAL HIGHLIGHTS (UNAUDITED)
================================================================================
<TABLE>
<CAPTION>
FOR THE
PERIOD
JUNE 25,
SIX MONTHS YEAR ENDED OCTOBER 31, 1993* TO
ENDED ------------------------------------------- OCTOBER 31,
PER SHARE OPERATING PERFORMANCE: April 30, 1998 1997 1996 1995 1994 1993
------------- ----- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ...... $ 14.48 $ 13.46 $ 13.40 $ 11.94 $ 14.56 $ 14.10
-------- -------- -------- -------- -------- --------
Net investment income (net of interest
expense of $0.18, $0.36, $0.35,
$0.68, $0.34 and $0.02) ................. 0.63 1.10 1.00 0.85 0.95 0.28
Net realized and unrealized gain (loss)
on investments .......................... (0.04) 0.82 (0.03) 1.60 (2.48) 0.52
-------- -------- -------- -------- -------- --------
Net increase (decrease) from investment
operations .............................. 0.59 1.92 0.97 2.45 (1.53) 0.80
-------- -------- -------- -------- -------- --------
Dividends from net investment income ...... (0.45) (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 ......... (0.45) (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** .......... $ 14.62 $ 14.48 $ 13.46 $ 13.40 $ 11.94 $ 14.56#
======== ======= ======= ======= ======== ========
Per share market value, end of period** ... $ 12.69 $ 12.13 $ 11.00 $ 11.13 $ 10.00 $ 13.75
======== ======= ======= ======= ======== ========
TOTAL INVESTMENT RETURN+ .................. 8.39% 19.05% 6.67% 22.43% (20.41%) (0.60%)
RATIOS TO AVERAGE NET ASSETS:
Operating Expenses @ ...................... 1.07%++ 1.02% 1.12% 1.00% 1.04% 0.97%++
Net investment income ..................... 8.76%++ 8.03% 7.59% 6.78% 7.31% 5.66%++
SUPPLEMENTAL DATA:
Average net assets (in thousands) ......... $ 42,948 $40,416 $38,786 $37,080 $38,468 $41,195
Portfolio turnover 13% 36% 58% 116% 41% 27%
Net assets, end of period (in thousands) .. $ 43,243 $42,810 $39,805 $39,634 $35,320 $43,051
Reverse repurchase agreements outstanding,
end of period (in thousands) ............ $ 19,095 $20,363 $18,081 $18,489 $16,003 $18,375
Asset coverage+++ ......................... $ 3,264 $ 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 3.62%++, 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 price on the first day and a sale at the current market
price on the last day of the period reported. Dividends and distributions,
if any, are assumed for purposes of this calculation, to be reinvested at
prices obtained under the Trust's dividend reinvestment plan. Total
investment return does not reflect brokerage commissions. Total investment
returns for less than one full year are not annualized.
++ Annualized.
+++ Per $1,000 of reverse repurchase agreements outstanding.
The information above represents the unaudited operating performance 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 (UNAUDITED)
================================================================================
NOTE 1. ACCOUNTING The BlackRock Broad Investment Grade 2009 Term Trust
POLICIES Inc. (the "Trust"), a Maryland corporation, is a
diversified, closed-end management investment
company. 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
11
<PAGE>
price would move approximately five percent in relation to a one percent change
in interest rates.
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.
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.
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
12
<PAGE>
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 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.
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.
13
<PAGE>
Interest rate floors are used by the Trust to both manage the duration of the
portfolio and its exposure to changes in short-term interest rates. Selling
interest rate floors reduces the portfolio's duration, making it less sensitive
to changes in interest rates from a market value perspective. The Trust's
leverage provides extra income in a period of falling rates. Selling floors
reduces some of that advantage by partially monetizing it as an up front payment
which the Trust receives.
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 Invest- ment Advisory Agreement with
BlackRock Financial Management, Inc. (the "Adviser"),
a wholly-owned corporate subsidiary of BlackRock Advisors, Inc., which is an
indirect majority-owned subsidiary of PNCBank, N.A., 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 continuous 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 Purchases and sales of investment securities, other
SECURITIES than short-term investments and dollar rolls, for the
six months ended April 30, 1998 aggregated $8,152,868
and $9,353,591, 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 April 30, 1998, the Trust held 24.0% of its
portfolio assets in securities restricted as to resale.
14
<PAGE>
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. succeeded
to rights and duties of Sears) or mortgage related securities containing loans
or mortgages originated by PNC Bank or its affiliates, including Midland Loan
Services, Inc. It is possible under certain circumstances, PNC Mortgage
Securities Corp. or its affiliates, including Midland Loan Services, Inc. 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, including Midland Loan Services, Inc.
The federal income tax basis of the Trust's investments at April 30,1998
was substantially the same as the basis for financial reporting and,
accordingly, net unrealized appreciation for federal income tax purposes was
$2,718,082 (gross unrealized appreciation--$3,065,764, gross unrealized
depreciation--$347,682).
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.
Details of open financial futures contracts at April 30, 1998 are as
follows:
VALUE AT
NUMBER OF EXPIRATION VALUE AT APRIL 30, UNREALIZED
CONTRACTS TYPE DATE TRADE DATE 1998 DEPRECIATION
- --------- ---- --------- ---------- ------------- -------------
Short Position:
8 Eurodollar Jun. 98 $1,873,158 $1,883,200 $ (10,042)
8 Eurodollar Sep. 98 1,877,758 1,885,800 (8,042)
8 Eurodollar Dec. 98 1,875,558 1,885,100 (9,542)
---------
$ (27,626)
=========
During the six months ended April 30, 1998, the Trust entered into an
interest rate cap. Under this agreement, the Trust receives the excess, if any,
of three-month LIBOR over the fixed rate of 6.00%. The Trust paid a transaction
fee for the agreement. Details of the cap are as follows:
NOTIONAL VALUE AT
AMOUNT FIXED FLOATING TERMINATION COST/ APRIL 30, UNREALIZED
(000) RATE RATE DATE PREMIUM 1998 DEPRECIATION
- -------- ------ ------------- ---------- ----------- --------- --------------
$5,000 6.00% 3 month LIBOR 2/19/02 $122,710 $61,640 $ (61,070)
Details of open interest rate swaps at April 30, 1998 are as follows:
NOTIONAL UNREALIZED
AMOUNT FIXED FLOATING TERMINATION APPRECIATION
(000) TYPE RATE RATE DATE (DEPRECIATION)
- --------- --------------- ------- ------------- --------- --------------
$(10,000) Interest rate 6.421 3 month LIBOR 7/27/01 $(104,972)
14,550 Interest rate 6.365 3 month LIBOR 7/27/00 99,973
---------
$ (4,999)
=========
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 six months ended April 30, 1998 was approximately $19,457,113 at a
weighted average interest rate of approximately 5.50%. The maximum amount of
reverse repurchase agreements outstanding at any month-end during the period was
$20,464,250 as of November 30, 1997 which was 32% 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 six months ended April 30, 1998.
NOTE 5. CAPITAL There are 200 million shares of $.01 par value common
stock authorized. Of the 2,957,093 shares outstanding
at April 30, 1998, the Adviser owned 7,093 shares.
NOTE 6. DIVIDENDS Subsequent to April 30, 1998, the Board of Directors
of the Trust declared a dividend from undistributed
earnings of $0.075 per share payable May 29, 1998 to shareholders of record on
May 15, 1998.
15
<PAGE>
================================================================================
THE BLACKROCK BROAD INVESTMENT GRADE 2009 TERM TRUST INC.
DIVIDEND REINVESTMENT PLAN
================================================================================
Pursuant to the Trust's Dividend Reinvestment Plan (the "Plan"),
shareholders may elect to have all distributions of dividends and capital gains
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.
================================================================================
ADDITIONAL INFORMATION
================================================================================
There have been no material changes in the Trust's investment objectives
or policies that have not been approved by the shareholders or to its charter or
by-laws or in the principal risk factors associated with investment in the
Trust. There have been no changes in the persons who are primarily responsible
for the day-to-day management of the Trust's portfolio.
The Annual Meeting of Trust Shareholders was held May 6, 1998 to vote on
the following matters:
<TABLE>
<CAPTION>
(1) To elect three Directors as follows:
DIRECTOR CLASS TERM EXPIRING
-------- ----- ---- --------
<S> <C> <C> <C>
Richard E. Cavanagh .................................. I 3 years 2000
James Grosfeld ....................................... I 3 years 2000
James Clayburn La Force, Jr. ......................... I 3 years 2000
Directors whose term of office continues beyond this meeting are
Andrew F.Brimmer, Kent Dixon, Laurence D. Fink, Frank J. Fabozzi,
Ralph L. Schlosstein and Walter F. Mondale.
(2) To ratify the selection of Deloitte & Touche LLP as independent public
accountants of the Trust for the fiscal year ending October 31, 1998.
Shareholders elected the three Directors and ratified the selection of
Deloitte & Touche LLP. The results of the voting was as follows:
VOTES FOR VOTES AGAINST ABSTENTIONS
-------- ----------- ----------
<S> <C> <C> <C>
Richard E. Cavanagh .................................. 2,342,102 0 34,070
James Grosfeld ....................................... 2,339,589 0 36,583
James Clayburn La Force, Jr. ......................... 2,337,989 0 38,183
Ratification of Deloitte &Touche LLP ................. 2,322,083 19,965 34,124
</TABLE>
16
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================================================================================
THE BLACKROCK BROAD INVESTMENT GRADE 2009 TERM TRUST INC.
INVESTMENT SUMMARY
================================================================================
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") is an SEC-registered
investment adviser. BlackRock and its affiliates currently manage over $118
billion on behalf of taxable and tax-exempt clients worldwide. Strategies
include fixed income, equity and cash and may incorporate both domestic and
international securities. Domestic fixed income strategies utilize the
government, mortgage, corporate and municipal bond sectors. BlackRock manages
twenty-one closed-end funds that are traded on either the New York or American
stock exchanges, and a $23 billion family of open-end equity and bond funds.
Current institutional clients number 334, domiciled in the United States and
overseas.
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
17
<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.
18
<PAGE>
================================================================================
THE BLACKROCK BROAD INVESTMENT GRADE 2009 TERM TRUST INC.
GLOSSARY
================================================================================
ADJUSTABLE RATE MORTGAGE-BACKED Mortgage instruments with interest rates
SECURITIES (ARMS): 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-backed securities which separate
MORTGAGE OBLIGATIONS (CMOS): 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.
INVERSE-FLOATING RATE MORTGAGES: Mortgage instruments with coupons that
adjust at periodic intervals according to a
formula which sets inversely with a market
level interest rate index.
19
<PAGE>
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.
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
AGREEMENTS: sells securities and agrees to repurchase
them 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 Arrangements in which a pool of assets is
SECURITIES: 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.
20
<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
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 Inc. 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 Inc. 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.
21
<PAGE>
================================================================================
BLACKROCK FINANCIAL MANAGEMENT, INC.
AN OVERVIEW
================================================================================
BlackRock Financial Management, Inc. ("BlackRock") is an SEC-registered
investment adviser. BlackRock and its affiliates currently manage over $118
billion on behalf of taxable and tax-exempt clients worldwide. Strategies
include fixed income, equity and cash and may incorporate both domestic and
international securities. BlackRock manages twenty-one closed-end funds that are
traded on either the New York or American stock exchanges, and a $23 billion
family of open-end equity and bond funds. Current institutional clients number
334, domiciled in the United States and overseas.
BlackRock's fixed income product was introduced in 1988 by a team of
highly seasoned fixed income professionals. These professionals had extensive
experience creating, analyzing and trading a variety of fixed income
instruments, including the most complex structured securities. In fact, several
individuals at BlackRock were responsible for developing many of the major
innovations in the mortgage-backed and asset-backed securities markets,
including the creation of the first CMO, the floating rate CMO, the
senior/subordinated pass-through and the multi-class asset-backed security.
BlackRock is unique among asset management and advisory firms in the
emphasis it places on the development of proprietary analytical capabilities.
Over one quarter of the firm's professionals is dedicated to the design,
maintenance and use of these systems, which are not otherwise available to
investors. BlackRock's proprietary analytical tools are used for evaluating, and
designing fixed income investment strategies for client portfolios. Securities
purchased include mortgages, corporate bonds, municipal bonds and a variety of
hedging instruments.
BlackRock has developed investment products that respond to investors'
needs and has been responsible for several major innovations in closed-end
funds. In fact, BlackRock introduced the first closed-end mortgage fund, the
first taxable and tax-exempt closed-end funds to offer a finite term, the first
closed-end fund to achieve a AAA rating by Standard & Poor's, and the first
closed-end fund to invest primarily in North American Government securities.
Currently, BlackRock's closed-end funds have dividend reinvestment plans, which
are designed to provide ongoing demand for the stock in the secondary market.
BlackRock manages a wide range of investment vehicles, each having specific
investment objectives and policies.
In view of our continued desire to provide a high level of service to all
our shareholders, BlackRock maintains a toll-free number for your questions. The
number is (800) 227-7BFM (7236). We encourage you to call us with any questions
that you may have about your BlackRock funds and we thank you for the continued
trust that you place in our abilities.
IF YOU WOULD LIKE FURTHER INFORMATION
PLEASE DO NOT HESITATE TO CALL BLACKROCK AT (800) 227-7BFM
22
<PAGE>
23
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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
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) 543-6217
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
The accompanying financial statements as of April 30, 1998 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 BROAD INVESTMENT GRADE 2009
TERM TRUST INC.
c/o Princeton Administrators, L.P.
P.O.Box 9095
Princeton, NJ 08543-9095
(800) 227-7BFM
Printed on recycled paper 092472-10-6
THE BLACKROCK
BROAD INVESTMENT
GRADE 2009
TERM TRUST INC.
================================================================================
SEMI-ANNUAL REPORT
APRIL 30, 1998
