--------------------------------------------------------------------------------
THE BLACKROCK BROAD INVESTMENT GRADE 2009 TERM TRUST INC.
CONSOLIDATED SEMI-ANNUAL REPORT TO SHAREHOLDERS
REPORT OF INVESTMENT ADVISOR
--------------------------------------------------------------------------------
May 31, 2000
Dear Shareholder:
The Federal Reserve continued to aggressively tighten in an attempt to
achieve its objective of a soft-landing for the explosive U.S. economy. As a
result, the Federal Reserve tightened short-term rates by 0.75% during the
period and raised rates by another 0.50% at the May FOMC meeting to 6.50%. In
the first four months of the new millennium we have been witness to
unprecedented volatility in both the Treasury yield curve and the spread
sectors. The Treasury curve inverted sharply as expectations of continued Fed
tightening in the wake of an insatiable U.S. economy, while anticipation of a
significant buyback at the long end of the maturity spectrum led to lower yields
on long Treasuries. The yield curve inversion along with the premium placed on
the dwindling outstanding Treasuries caused a dramatic underperformance of
spread sectors relative to the performance of the Treasury sectors, especially
in the 10- to 30-year part of the curve.
At this juncture, the general implication for spread product is negative,
but the potential for spread widening is more limited. Most of the negatives for
high quality spread product in terms of relative supply differentials between
Treasuries and non-Treasuries as well as equity market volatility have been
priced into the market. Given current market conditions, we maintain a
significant overweight in high quality spread product. Treasuries are fully
valued even considering the strong technicals in the market. While near-term
volatility is virtually guaranteed by an active Federal Reserve, a successful
soft landing of the economy would ultimately result in a healthier U.S. economy.
This report contains a summary of market conditions during the semi-annual
period and a review of portfolio strategy by your Trust's managers in addition
to the Trust's unaudited financial statements and a detailed list of the
portfolio's holdings. Continued thanks for your confidence in BlackRock. We
appreciate the opportunity to help you achieve your long-term investment goals.
Sincerely,
/s/ Laurence D. Fink /s/ Ralph L. Schlosstein
-------------------- ------------------------
Laurence D. Fink Ralph L. Schlosstein
Chairman President
1
<PAGE>
May 31, 2000
Dear Shareholder:
We are pleased to present the unaudited consolidated semi-annual report for
The BlackRock Broad Investment Grade 2009 Term Trust Inc. (the "Trust") for the
six months ended April 30, 2000. 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 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. All of the Trust's
assets must be rated "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>
--------------------------------------------------------------------------------------------------------------------
4/30/00 10/31/99 CHANGE HIGH LOW
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
STOCK PRICE $11.00 $11.4375 (3.83)% $11.875 $10.9375
--------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE (NAV) $13.25 $13.64 (2.86)% $13.74 $12.94
--------------------------------------------------------------------------------------------------------------------
10-YEAR U.S. TREASURY NOTE 6.22% 6.02% 3.32% 6.79% 5.77%
--------------------------------------------------------------------------------------------------------------------
</TABLE>
THE FIXED INCOME MARKETS
The dynamic expansion of the U.S. economy continues undaunted by Federal
Reserve Chairman Greenspan's attempt to brake the economy, short of stalling it
into a recession. The labor markets remain tight, growth remains strong with 5%+
annualized growth rates and inflation pressures continue to be offset by
increased productivity. However, the Fed remains cautious, in their February
minutes it was noted that: "Other members acknowledged that the Committee might
need to move more aggressively at a later meeting should imbalances continue to
build and inflation expectations clearly begin to pick up." At the Federal
Reserve meeting in November, February and March the Fed raised the discount rate
by 0.25% at each meeting and a 0.50% increased was made in May to bring the
current discount rate to 6.50%.
The Treasury Yield curve experienced a complex set of dynamics, which has
inverted the curve and may continue to invert the curve for the foreseeable
future. The yields on the short-end of the curve increased sharply during the
period in response to three Federal Reserves increases to the discount rate and
perceived future Fed actions in the coming months. The long-end of the curve is
reacting to the "official" announcement that the Treasury will buy back $30
billion of Treasuries with maturities ranging 10 to 30 years. With a decreasing
supply of available Treasuries, a balanced budget, and an unchanged demand for
longer maturity Treasuries, we would anticipate this condition to continue. This
condition is further augmented by Treasury auction activity, as they reduce the
available bonds on the long end of the curve they continue to add supply in the
1-10 year range through periodic auctions. For the semi-annual period, the yield
of the 10-year Treasury security rose from 6.02% on October 31, 1999 to 6.22% on
April 30, 2000.
Investment grade corporate securities encountered difficulty as fixed
income investors sought the credit quality and liquidity of Treasuries. For the
semi-annual period, corporates as measured by Merrill Lynch U.S. Corporate
Master Index returned 0.07%, under performing the Lehman Brothers Aggregate
Index's 1.42%. Supply has been manageable year to date with $8.5 billion in new
issuance versus $110 billion in 1999, and $101 billion in 1998. Fundamentally
the corporate market appears healthy, with companies reporting strong earnings
for the fourth quarter. The negatives in the corporate
2
<PAGE>
market are from stock market volatility, poor liquidity, increased leverage and
deteriorating credit quality, which has increased uncertainty in the market.
With the uncertainty of future Fed action in the market, lower current yields
could cloud the supply picture and lead to an acceleration in issuance.
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, 1999 asset
composition.
--------------------------------------------------------------------------------
SECTOR BREAKDOWN
--------------------------------------------------------------------------------
COMPOSITION APRIL 30, 2000 OCTOBER 31, 1999
--------------------------------------------------------------------------------
Agency Multiple Class Mortgage Pass-Throughs 22% 21%
--------------------------------------------------------------------------------
Interest-Only Mortgage-Backed Securities 19% 15%
--------------------------------------------------------------------------------
Corporate Bonds 18% 18%
--------------------------------------------------------------------------------
Adjustable & Inverse-Floating Rate Mortgages 15% 9%
--------------------------------------------------------------------------------
Commercial Mortgage-Backed Securities 7% 14%
--------------------------------------------------------------------------------
Municipal Bonds 6% 5%
--------------------------------------------------------------------------------
Principal-Only Mortgage-Backed Securities 6% 3%
--------------------------------------------------------------------------------
Asset Backed Securities 4% 4%
--------------------------------------------------------------------------------
U.S. Gov't Securities 3% 10%
--------------------------------------------------------------------------------
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 of December 31, 2009. The
Trust decreased its exposure in U.S. Treasuries and commercial mortgaged-backed
securities and reallocated assets to higher yielding spread products as yields
on Mortgages and other spread product increased relative to Treasuries. The
Trust modestly increased its exposure to mortgage pass-throughs securities and
increased its holding in adjustable and inverse floating rate mortgages which
appear attractively valued and match the cash flow objectives of the portfolio.
The Trust also purchased IOs (Interest-Only securities) as a defensive strategy.
IOs help to protect the value of a portfolio in a rising interest rate
environment by appreciating when mortgages extend. Although rates have trended
up recently, and spreads have widened significantly, BlackRock believes that
longer-term spreads will tighten and benefit the Trust.
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 yours,
/s/ Robert S. Kapito /s/ Michael P. Lustig
----------------------------------- ---------------------------------------
Robert S. Kapito Michael P. Lustig
Vice Chairman and Portfolio Manager Managing Director and Portfolio Manager
BlackRock Advisors, Inc. BlackRock Advisors, 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 4/30/00: $11.00
--------------------------------------------------------------------------------
Net Asset Value as of 4/30/00: $13.25
--------------------------------------------------------------------------------
Yield on Closing Stock Price as of 4/30/00 ($11.00)1: 7.50%
--------------------------------------------------------------------------------
Current Monthly Distribution per Share2: $ 0.06875
--------------------------------------------------------------------------------
Current Annualized Distribution per Share2: $ 0.82500
--------------------------------------------------------------------------------
1 Yield on Closing Stock Price is calculated by dividing the current annualized
distribution per share by the closing stock price per share.
2 Distribution is not constant and is subject to change.
4
<PAGE>
--------------------------------------------------------------------------------
THE BLACKROCK BROAD INVESTMENT
GRADE 2009 TERM TRUST INC.
CONSOLIDATED PORTFOLIO OF INVESTMENTS
APRIL 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
RATING* (000) DESCRIPTION (NOTE 1)
--------------------------------------------------------------------------------
LONG-TERM INVESTMENTS--134.4%
MORTGAGE PASS THROUGH--0.6%
$ 275 Federal National Mortgage
Association, 6.50%, 7/01/29 .................. $ 256,583
----------
AGENCY MULTIPLE CLASS MORTGAGE
PASS-THROUGHS--29.5%
Federal Home Loan Mortgage Corp.,
Multiclass Mortgage Participation
Certificates,
2,168+ Series 1510, Class 1510-G,
5/15/13 .................................... 2,114,363
400 Series 1534, Class 1534-IG,
2/15/10 .................................... 337,624
600+ Series 1601, Class 1601-SD,
10/15/08 ................................... 592,500
Federal National Mortgage Association,
REMIC Pass-Through Certificates,
638 Trust 1992-43, Class 43-E,
4/25/22 .................................... 629,157
1,000+ Trust 1993-49, Class 49-H,
4/25/13 .................................... 967,880
129 Trust 1993-69, Class 69-Z,
1/25/22 .................................... 120,391
3,053+ Trust 1993-79, Class 79-PK,
4/25/22 .................................... 2,905,987
2,646+ Trust 1993-87, Class 87-J,
4/25/22 .................................... 2,397,011
692+ Trust 1993-214, Class 214-SK,
12/25/08 ................................... 669,368
2,166 Trust 1993-223, Class 223-PT,
10/25/23 ................................... 254,095
500+ Trust 1994-13, Class 13-SJ,
2/25/09 .................................... 530,775
-----------
11,519,151
-----------
ADJUSTABLE & INVERSE FLOATING
RATE MORTGAGES--20.4%
AAA 462 Citicorp Mortgage Securities, Inc.,
Series 1993-14, Class A-4,
11/25/23 ................................... 154,425
Federal Home Loan Mortgage Corp.,
Multiclass Mortgage
Participation Certificates,
242 Series 1506, Class 1506-S,
5/15/08 .................................... 217,493
458 Series 1580, Class 1580-SD,
9/15/08 .................................... 414,130
194 Series 1592, Class 1592-TB,
5/15/23 .................................... 105,558
1,025+ Series 1626, Class 1626-SA,
12/15/08 ................................... 691,199
232+ Series 1637, Class 1637-LE,
12/15/23 ................................... 179,207
500 Series 1688, Class 1688-S,
12/15/13 458,125
Federal National Mortgage Association,
REMIC Pass-Through Certificates,
46 Trust 1992-174, Class 174-S,
9/25/22 .................................... 89,843
858+ Trust 1992-190, Class 190-S,
11/25/07 ................................... 730,364
1,000+ Trust 1993-156, Class 156-SE,
10/25/19 ................................... 893,790
605 Trust 1993-173, Class 173-SA,
9/25/08 .................................... 451,354
589 Trust 1993-191, Class 191-SD,
10/25/08 ................................... 476,728
600+ Trust 1993-197, Class 197-SB,
10/25/08 ................................... 478,686
550 Trust 1993-202, Class 202-VB,
11/25/23 ................................... 463,089
838 Trust 1993-209, Class 209-SG,
8/25/08 .................................... 752,254
498 Trust 1993-214, Class 214-SH,
12/25/08 ................................... 337,343
121 Trust 1994-37, Class 37-SC,
3/25/24 .................................... 117,527
AAA 1,175 Residential Funding Mortgage Securities, Inc.,
Series 1993-S23, Class A12,
6/25/08 .................................... 983,551
-----------
7,994,666
-----------
INTEREST ONLY MORTGAGE-BACKED
SECURITIES--25.1%
AAA 13,966 Credit Suisse First Boston Mortgage
Securities Corp.,
Series 1997-C1, Class AX,
6/20/29** .................................. 1,132,946
Federal Home Loan Mortgage Corp.,
Multiclass Mortgage
Participation Certificates,
9 Series 65, Class 65-I,
8/15/20 .................................... 191,219
3 Series 141, Class 141-H,
5/15/21 .................................... 74,394
2,062 Series 1353, Class 1353-S,
8/15/07 .................................... 171,475
2,750 Series 1645, Class 1645-IB,
9/15/08 .................................... 395,038
2,085 Series 1900, Class 1900-SV,
8/15/08 .................................... 137,106
20,978 Series 1995, Class 1995-SB,
10/15/27 ................................... 29,789
See Notes to Consolidated Financial Statements.
5
<PAGE>
--------------------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
RATING* (000) DESCRIPTION (NOTE 1)
--------------------------------------------------------------------------------
INTEREST ONLY MORTGAGE-BACKED
SECURITIES (CONTINUED)
$ 2,697 Series 2039, Class 2039-PI,
2/15/12 .................................... $ 413,463
600 Series 2049, Class 2049-LC,
10/15/23 ................................... 151,500
968 Series 2061, Class 2061-JR,
9/20/22 .................................... 197,374
2,477 Series 2075, Class 2075-IB,
12/15/21 ................................... 450,490
2,500 Series 2140, Class 2140-UK,
9/15/11 .................................... 409,375
Federal National Mortgage Association,
REMIC Pass-Through Certificates,
3 Trust G-21, Class 21-L,
7/25/21 .................................... 63,819
119 Trust G93-25, Class 25-J,
12/25/19 ................................... 297,572
4,000 Trust 1993-138, Class 138-JK,
5/25/19 .................................... 312,280
12,000 Trust 1993-191, Class 191-S,
10/25/07 ................................... 63,756
2,256 Trust 1993-194, Class 194-PV,
6/25/08 .................................... 227,041
9,757 Trust 1993-208, Class 208-S,
2/25/23 .................................... 164,648
1,117 Trust 1994-39, Class 39-PE,
1/25/23 .................................... 113,565
2,277 Trust 1994-42, Class 42-SO,
3/25/23 .................................... 208,625
1,500+ Trust 1996-20, Class 20-SB,
10/25/08 ................................... 376,875
1,574 Trust 1996-20, Class 20-SL,
9/25/08 .................................... 342,428
1,250 Trust 1997-50, Class 50-HK,
8/25/27 .................................... 384,911
48,213 Trust 1997-81, Class 81-SD,
12/18/27 ................................... 117,728
1,500+ Trust 1997-90, Class 90-M,
1/25/28 .................................... 452,490
1,223 Trust 1998-30, Class 30-QG,
12/18/25 ................................... 366,888
1,981 Trust 1998-43, Class 43-YI,
7/18/28 .................................... 305,871
AAA 6,450 First Union-Lehman Brothers-
Bank of America,
Series 1998-C2, Class IO,
5/18/28 .................................... 231,531
AAA 22,609 GMAC Commercial Mortgage
Securities Inc.,
Series 1998-C2, Class X,
8/15/23 .................................... 850,845
Government National Mortgage Association,
9,290 Trust 1997-27, Class 27-SD,
6/17/09 .................................... 197,413
927 Trust 1998-24, Class 24-IB,
5/20/23 .................................... 206,278
Aaa 5,836 Merrill Lynch Mortgage Investors, Inc.,
Series 1997-C2, Class IO,
12/10/29 ................................... 370,353
AAA 1,647 PNC Mortgage Securities Corp.,
Series 1998-8, Class 4X,
10/25/13 ................................... 268,712
AAA 14,690 Residential Funding Mortgage
Securities, Inc.,
Series 1998-S19, Class A8,
8/25/28 .................................... 119,356
NR 137 Salomon Brothers Mortgage
Securities Inc. VI,
Series 1987-3, Class B,
10/23/17 ................................... 34,588
-----------
9,831,742
-----------
PRINCIPAL ONLY MORTGAGE-
BACKED SECURITIES--8.5%
Federal Home Loan Mortgage Corp.,
Multiclass Mortgage
Participation Certificates,
205 Series 1700, Class 1700-GA,
2/15/24 .................................... 155,908
936+ Series 1857, Class 1857-PK,
11/15/23 ................................... 745,024
Federal National Mortgage Association,
REMIC Pass-Through Certificates,
306 Trust 1994-25, Class 25-C,
11/25/23 ................................... 237,494
1,341+ Trust 1994-46, Class 46-D,
11/25/23 ................................... 1,029,794
559 Trust 1996-54, Class 54-A,
4/25/21 .................................... 468,645
683 Trust 1996-54, Class 54-G,
4/25/23 .................................... 396,186
66 Trust 1997-85, Class 85-LE,
10/25/23 ................................... 41,992
AAA 198 PaineWebber Mortgage
Acceptance Corp. IV,
Series 1993-5, Class A-14,
6/25/08 .................................... 156,644
NR 137 Salomon Brothers Mortgage
Securities Inc. VI,
Series 1987-3, Class A,
10/23/17 ................................... 114,122
-----------
3,345,809
-----------
COMMERCIAL MORTGAGE-BACKED
SECURITIES--9.1%
BBB 500 DLJ Mortgage Acceptance Corp.,
Series 1997-CF1, Class B1,
7.91%, 4/15/07** ........................... 458,485
Merrill Lynch Mortgage Investors, Inc.,
BBB 500 Series 1995-C1, Class D,
7.556%, 5/25/15 ............................ 489,257
BBB 500 Series 1996-C1, Class D,
7.42%, 4/25/28 ............................. 470,980
See Notes to Consolidated Financial Statements.
6
<PAGE>
--------------------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
RATING* (000) DESCRIPTION (NOTE 1)
--------------------------------------------------------------------------------
COMMERCIAL MORTGAGE-BACKED
SECURITIES (CONTINUED)
AAA $ 750 New York City Mortgage Loan
Trust, Multifamily,
Series 1996, Class A-2,
6.75%, 6/25/11** ........................... $ 687,187
AAA 1,000 Prudential Securities Secured
Financing Corp.,
Series 1998-C1, Class A1-B,
6.506%, 7/15/08 ............................ 928,972
A 342 Resolution Trust Corp.,
Series 1994-C2, Class D,
8.00%, 4/25/25 ............................. 338,309
AAA 193 Structured Asset Securities Corp.,
Series 1996-CFL, Class B,
6.303%, 2/25/28 ............................ 191,922
-----------
3,565,112
-----------
ASSET-BACKED SECURITIES--5.0%
AAA 1,230 Chase Credit Card Master Trust,
Series 1997-5, Class A,
6.194%, 8/15/05 ............................ 1,197,242
NR 252 Global Rated Eligible Asset Trust,
Series 1998-A, Class A-1,
7.33%, 3/15/06@/@@ ......................... 75,624
Aa2 428 Pegasus Aviation Lease Securitization,
Series 1999-1, Class A-1,
6.30%, 3/25/29** ........................... 411,562
Structured Mortgage Asset
Residential Trust,
NR 612 Series 1997-2,
8.24%, 3/15/06@/@@ ......................... 134,549
NR 674 Series 1997-3,
8.57%, 4/15/06@/@@ ......................... 148,382
-----------
1,967,359
-----------
U.S. GOVERNMENT AND AGENCY
SECURITIES--3.8%
Aaa 617 Small Business Administration
Participation Certificates,
Series 1998-10, Class 10-A,
6.12%, 2/01/08 ............................. 559,130
U.S. Treasury Notes,
AAA 535+ 5.875%, 10/31/01 ............................. 528,730
AAA 385 6.625%, 5/15/07 .............................. 387,526
-----------
1,475,386
-----------
TAXABLE MUNICIPAL BONDS--7.6%
A+ 500 Fresno California Pension Obligation,
Series 1994, 7.80%, 6/01/14 .................. 487,680
AAA 500 Kern County California Pension
Obligation, 6.98%, 8/15/09 ................... 481,165
Los Angeles County California
Pension Obligation,
AAA 1,000 Series A, 8.62%, 6/30/06 ..................... 1,053,520
AAA 500 Series D, 6.97%, 6/30/08 ..................... 482,760
AAA 500 Orleans Parish Louisiana School
Board, Series A, 6.60%, 2/01/08 .............. 472,665
-----------
2,977,790
-----------
CORPORATE BONDS--24.8%
FINANCE & BANKING--9.1%
A3 500 AmSouth Bancorporation,
6.75%, 11/01/25 .............................. 470,435
A+ 600 Equitable Life Assured Society,
6.95%, 12/01/05** ............................ 565,476
A 400 Lehman Brothers Holding, Inc.,
Series A, 6.75%, 9/24/01 ..................... 394,859
A+ 500 Metropolitan Life Insurance Co.,
6.30%, 11/01/03** ............................ 481,020
Aa3 1,000 Morgan Stanley Group, Inc.,
10.00%, 6/15/08 .............................. 1,132,660
BBB+ 500 PaineWebber Group, Inc.,
8.875%, 3/15/05 .............................. 517,214
-----------
3,561,664
-----------
INDUSTRIALS--8.3%
A2 100 American Airlines, Inc., Secured
Equipment Trust,
Series 1990-M, 10.44%, 3/04/07 ............... 110,771
A1 1,000+ Dow Capital BV,
9.20%, 6/01/10 ............................... 1,095,870
A+ 500 Ralcorp Holdings, Inc.,
8.75%, 9/15/04 ............................... 521,785
A3 500 Ralston Purina Co.,
9.25%, 10/15/09 .............................. 546,818
BBB- 500 Seagram Joseph E. & Sons, Inc.,
7.00%, 4/15/08 ............................... 460,590
AA- 500 TCI Communications, Inc.,
8.25%, 1/15/03 ............................... 508,005
-----------
3,243,839
-----------
UTILITIES--2.5%
A 500 Alltel Corp.,
7.50%, 3/01/06 .................................. 491,310
Baa2 500 Ohio Edison Co.,
8.625%, 9/15/03 ................................. 504,380
-----------
995,690
-----------
YANKEE--4.9%
BBB- 500 Empresa Electric Guacolda SA,
7.95%, 4/30/03** ................................ 474,937
BBB+ 170 Empresa Electric Pehuenche,
7.30%, 5/01/03 .................................. 164,573
A- 500 Israel Electric Corp., Ltd.,
7.25%, 12/15/06** ............................... 479,170
Baa2 1,000 Petrozuata Finance Inc.,
Series A, 7.63%, 4/01/09** ...................... 788,660
-----------
1,907,340
-----------
9,708,533
-----------
See Notes to Consolidated Financial Statements.
7
<PAGE>
--------------------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
RATING* (000) DESCRIPTION (NOTE 1)
--------------------------------------------------------------------------------
CALL OPTIONS PURCHASED--0.0%
$5,000 Interest Rate Swap, 5.60% over
3 month LIBOR, expires 8/7/00 ............. $ 2
------------
Total long-term investments
(cost $55,318,618) 52,642,133
------------
SHORT-TERM INVESTMENT--1.0%
DISCOUNT NOTE
A-1+ 400 Federal Home Loan Bank,
5.88%, 5/01/00
(cost $400,000) 400,000
------------
Total investments--135.4%
(cost $55,718,618) 53,042,133
Liabilities in excess of other
assets--(35.4)% (13,874,627)
------------
NET ASSETS--100% $ 39,167,506
============
---------------
* Using the higher of Standard & Poor's, Moody's or Fitch's rating.
** Security is exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from registration
to qualified institutional buyers.
+ Entire or partial principal amount pledged as collateral for reverse
repurchase agreements or financial futures contracts.
@ Illiquid securities representing 0.92% of net assets.
@@ Security is restricted as to public resale. The securities were acquired in
1997 and have an aggregate current cost of $498,520.
--------------------------------------------------------------------------------
KEY TO ABBREVIATIONS
LIBOR -- London InterBank Offer Rate.
REMIC -- Real Estate Mortgage Investment Conduit.
--------------------------------------------------------------------------------
See Notes to Consolidated Financial Statements.
8
<PAGE>
--------------------------------------------------------------------------------
THE BLACKROCK BROAD INVESTMENT
GRADE 2009 TERM TRUST INC.
CONSOLIDATED STATEMENT OF
ASSETS AND LIABILITIES
APRIL 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
ASSETS
Investments, at value
(cost $55,718,618) (Note 1) ............................ $ 53,042,133
Cash ..................................................... 71,486
Interest receivable ...................................... 747,946
Interest rate cap, at value
(amortized cost $71,419) (Notes 1 & 3) ................. 99,623
Other assets ............................................. 112,432
------------
54,073,620
------------
LIABILITIES
Reverse repurchase agreements (Note 4) ................... 14,730,875
Interest payable ......................................... 62,035
Investment advisory fee payable (Note 2) ................. 17,964
Administration fee payable (Note 2) ...................... 4,899
Other accrued expenses ................................... 90,341
------------
14,906,114
------------
NET ASSETS ............................................... $ 39,167,506
------------
Net assets were comprised of:
Common stock:
Par value (Note 5) ................................... $ 29,571
Paid-in capital in excess of par ..................... 40,614,255
------------
40,643,826
------------
Undistributed net investment income .................... 2,343,577
Accumulated net realized loss .......................... (1,171,616)
Net unrealized depreciation ............................ (2,648,281)
------------
Net assets, April 30, 2000 ............................. $ 39,167,506
============
Net asset value per share:
($39,167,506 / 2,957,093 shares of
common stock issued and outstanding) ................... $13.25
======
--------------------------------------------------------------------------------
THE BLACKROCK BROAD INVESTMENT
GRADE 2009 TERM TRUST INC.
CONSOLIDATED STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 2000
(UNAUDITED)
--------------------------------------------------------------------------------
NET INVESTMENT INCOME
Income
Interest earned (net of premium
amortization of $896,590 and interest
expense of $474,482) .................................... $ 1,826,594
------------
Operating Expenses
Investment advisory ..................................... 108,136
Administration .......................................... 29,492
Reports to shareholders ................................. 15,000
Legal ................................................... 13,500
Independent accountants ................................. 12,500
Custodian ............................................... 8,000
Directors ............................................... 6,500
Transfer agent .......................................... 6,500
Miscellaneous ........................................... 7,152
------------
Total operating expenses ................................ 206,780
------------
Net investment income before excise tax ................... 1,619,814
Excise tax ................................................ 101,499
------------
Net investment income ..................................... 1,518,315
------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Net realized loss on:
Investments ............................................. (93,091)
------------
Net change in unrealized appreciation
(depreciation) on:
Investments ............................................. (1,426,018)
Interest rate cap ....................................... 43,433
------------
(1,382,585)
------------
Net loss on investments ................................... (1,475,676)
------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS ................................. $ 42,639
============
See Notes to Consolidated Financial Statements.
9
<PAGE>
--------------------------------------------------------------------------------
THE BLACKROCK BROAD INVESTMENT
GRADE 2009 TERM TRUST INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
SIX MONTHS ENDED APRIL 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
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 ................................................ $ 42,639
-----------
Decrease in investments ..................................... 1,342,925
Net realized loss ........................................... 93,091
Increase in unrealized depreciation ......................... 1,382,585
Decrease in interest rate cap ............................... 2,825
Decrease in interest receivable ............................. 38,805
Increase in other assets .................................... (112,431)
Increase in interest payable ................................ 15,066
Increase in accrued expenses and other
liabilities ............................................... 11,409
-----------
Total adjustments ........................................... 2,774,275
-----------
Net cash flows provided by operating activities ............. $ 2,816,914
===========
INCREASE (DECREASE) IN CASH
Net cash flows provided by operating activities$ ............ $ 2,816,914
-----------
Cash flows used for financing activities:
Decrease in reverse repurchase agreements ................. (1,573,075)
Cash dividends paid ....................................... (1,219,686)
-----------
Net cash flows used for financing activities ................ (2,792,761)
-----------
Net increase in cash ...................................... 24,153
Cash at beginning of period ............................... 47,333
Cash at end of period ..................................... $ 71,486
===========
--------------------------------------------------------------------------------
THE BLACKROCK BROAD INVESTMENT
GRADE 2009 TERM TRUST INC.
CONSOLIDATED STATEMENTS OF CHANGES
IN NET ASSETS (UNAUDITED)
--------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED
APRIL 30, OCTOBER 31,
2000 1999
---------- ----------
INCREASE (DECREASE) IN
NET ASSETS
Operations:
Net investment income ................ $ 1,518,315 $ 2,756,986
Net realized gain (loss) ............. (93,091) 308,615
Net change in unrealized
depreciation ....................... (1,382,585) (4,602,605)
------------ ------------
Net increase (decrease) in net
assets resulting from
operations ......................... 42,639 (1,537,004)
Dividends from
net investment income .............. (1,219,686) (2,513,313)
------------ ------------
Total decrease ....................... (1,177,047) (4,050,317)
NET ASSETS
Beginning of period .................... 40,344,553 44,394,870
------------ ------------
End of period (including
undistributed net investment
income of $2,343,577 and
$2,044,948, respectively) ............ $ 39,167,506 $ 40,344,553
============ ============
See Notes to Consolidated Financial Statements.
10
<PAGE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------
THE BLACKROCK BROAD INVESTMENT GRADE 2009 TERM TRUST INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (UNAUDITED)
-----------------------------------------------------------------------------------------------------------------------
SIX MONTHS YEAR ENDED OCTOBER 31,
ENDED APRIL 30, ------------------------------------------------------------
2000 1999 1998 1997 1996 1995
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period ..... $ 13.64 $ 15.01 $ 14.48 $ 13.46 $ 13.40 $ 11.94
-------- -------- -------- -------- -------- --------
Net investment income
(net of interest expense of
$0.16, $0.33, $0.36, $0.36,
$0.35, and $0.68) .................... .51 .93 1.20 1.10 1.00 .85
Net realized and unrealized gain
(loss) on investments .................. (.49) (1.45) .23 .82 (.03) 1.60
-------- -------- -------- -------- -------- --------
Net increase (decrease) from
investment operations .................. .02 (.52) 1.43 1.92 .97 2.45
-------- -------- -------- -------- -------- --------
Dividends and distributions:
Dividends from net investment income ... (.41) (.85) (.90) (.90) (.91) (.85)
Distributions from paid-in capital ..... -- -- -- -- -- (.14)
-------- -------- -------- -------- -------- --------
Total dividends and distributions ........ (.41) (.85) (.90) (.90) (.91) (.99)
-------- -------- -------- -------- -------- --------
Net asset value, end of period* .......... $ 13.25 $ 13.64 $ 15.01 $ 14.48 $ 13.46 $ 13.40
======== ======== ======== ======== ======== ========
Per share market value, end of period* ... $ 11.00 $ 11.44 $ 13.25 $ 12.13 $ 11.00 $ 11.13
======== ======== ======== ======== ======== ========
TOTAL INVESTMENT RETURN+ ................. (.26%) (7.68%) 17.15% 19.05% 6.67% 22.43%
RATIOS TO AVERAGE NET ASSETS:
Operating expenses ....................... 1.05%+++ 1.03% 1.01% 1.02% 1.12% 1.00%
Operating expenses and interest expense .. 3.51%+++ 3.33% 3.44% 3.65% 3.81% 6.42%
Operating expenses, interest expense,
and excise taxes ....................... 4.04%+++ 3.49% 3.51% 3.65% 3.81% 6.42%
Net investment income .................... 7.89%+++ 6.58% 8.13% 8.03% 7.59% 6.78%
SUPPLEMENTALDATA:
Average net assets (in thousands) ........ $ 38,678 $ 41,909 $ 43,482 $ 40,416 $ 38,786 $ 37,080
Portfolio turnover ....................... 21% 25% 25% 36% 58% 116%
Net assets, end of period (in thousands) . $ 39,168 $ 40,345 $ 44,395 $ 42,810 $ 39,805 $ 39,634
Reverse repurchase agreements outstanding,
end of period (in thousands) ........... $ 14,731 $ 16,304 $ 19,770 $ 20,363 $ 18,081 $ 18,489
Asset coverage++ ......................... $ 3,659 $ 3,475 $ 3,246 $ 3,102 $ 3,209 $ 3,144
</TABLE>
----------
* Net asset value and market value are published in BARRON'S on Saturday and
THE WALL STREET JOURNAL on Monday.
+ 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
return for period less than one full year is not annualized.
++ Per $1,000 of reverse repurchase agreements outstanding.
+++ Annualized
The information above represents the unaudited operating performance data for a
share of common stock outstanding, total investment return, ratios to average
net assets and other supplemental data for the periods indicated. This
information has been determined based upon financial information provided in the
financial statements and market value data for the Trust's shares.
See Notes to Consolidated Financial Statements.
11
<PAGE>
--------------------------------------------------------------------------------
THE BLACKROCK BROAD INVESTMENT
GRADE 2009 TERM TRUST INC.
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------
NOTE 1. ORGANIZATION The BlackRock Broad Investment Grade 2009 Term Trust
& ACCOUNTING Inc. (the "Trust"), a Maryland corporation, is a
POLICIES 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.
On December 3, 1999, the Trust transferred a substantial portion of its total
assets to a 100% owned regulated investment company subsidiary called BCT
Subsidiary, Inc. These consolidated financial statements include the operations
of both the Trust and its wholly-owned subsidiary after elimination of all
intercompany transactions and balances.
The following is a summary of significant accounting policies followed by the
Trust.
SECURITIES VALUATION: The Trust values mortgage-backed and asset-backed
securities, interest rate swaps, caps, floors and non-exchange traded options
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. Futures contracts are 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 or
disposition.
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.
12
<PAGE>
Option selling and purchasing is used by the Trust to effectively "hedge"
positions, or collections of 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 are efficient 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 swap. However, the Trust closely monitors swaps and 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 in a manner similar to more generic options described above.
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 port-
13
<PAGE>
folio. 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.
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.
14
<PAGE>
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.
FEDERAL INCOME TAXES: It is the Trust's intention to continue to meet the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute sufficient 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.
Income distributions and capital gain distributions are determined in
accordance with income tax regulations which may differ from generally accepted
accounting principles.
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.
DEFERRED COMPENSATION PLAN: Under a deferred compensation plan approved by the
Board of Directors on February 24, 2000, non-interested Directors may elect to
defer receipt of all or a portion of their annual compensation.
Deferred amounts earn a return as though equivalent dollar amounts had been
invested in common shares of other BlackRock funds selected by the Directors.
This has the same economic effect as if the Directors had invested the deferred
amounts in such other BlackRock funds.
The deferred compensation plan is not funded and obligations thereunder
represent general unsecured claims against the general assets of the Trust. The
Trust may, however, elect to invest in common shares of those funds selected by
the Directors in order to match its deferred compensation obligations.
NOTE 2. AGREEMENTS The Trust has an Investment Advisory Agreement with
BlackRock Advisors, Inc. (the "Advisor"), which is a
wholly-owned subsidiary of BlackRock, Inc., which in
turn is an indirect majority-owned subsidiary of PNC
Financial Services Group, Inc. The Trust has an
Administration Agreement with Princeton Administrators,
L.P. (the "Administrator"), an indirect wholly-owned
affiliate of Merrill Lynch & Co., Inc.
The investment advisory fee paid to the Advisor is computed weekly and
payable monthly at an annual rate of 0.55% 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
period ended April 30, 2000 aggregated $11,575,743 and
$12,901,456, 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, 2000, the Trust held 15% of its net 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. 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, that 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, 2000 was
$55,747,536, and accordingly, net unrealized depreciation for federal income tax
purposes was $2,705,403 (gross unrealized appreciation--$640,615, gross
unrealized depreciation--$3,346,018).
15
<PAGE>
For Federal income tax purposes, the Trust had a capital loss carryforward at
October 31, 1999 of approximately $930,000 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.
The Trust holds an interest rate cap. Under this agreement, the Trust
receives the excess, if any, of a floating rate over a fixed rate. The Trust
paid a transaction fee for the agreement. Details of the cap are as follows:
NOTIONAL VALUE AT
AMOUNT FIXED FLOATING TERMINATION AMORTIZED APRIL 30, UNREALIZED
(000) RATE RATE DATE COST 2000 APPRECIATION
-------- ----- ------------- ----------- --------- --------- ------------
$5,000 6.00% 3 month LIBOR 2/19/02 $71,419 $99,623 $28,204
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 for
the period ended April 30, 2000 was approximately $15,989,978 at a weighted
average interest rate of approximately 5.93%. The maximum amount of reverse
repurchase agreements outstanding at any month-end during the period was
$18,226,081 as of January 31, 2000 which was 40% 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 period
ended April 30, 2000.
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, 2000, the Adviser owned 7,093 shares.
NOTE 6. DIVIDENDS Subsequent to April 30, 2000, the Board of Directors of
the Trust declared dividends from undistributed
earnings of $0.06875 per share payable May 31, 2000 to
shareholders of record on May 15, 2000.
16
<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
reinvested by State Street Bank and Trust Company (the "Plan Agent") in Trust
shares pursuant to the Plan. Shareholders who do not participate in the Plan
will receive all distributions in cash paid by check in United States dollars
mailed directly to the shareholders of record (or if the shares are held in
street or other nominee name, then to the nominee) by the transfer agent, as
dividend disbursing agent.
The Plan Agent serves as agent for the shareholders in administering the
Plan. After the Trust declares a dividend or determines to make a capital gain
distribution, the Plan Agent will, as agent for the participants, receive the
cash payment and use it to buy Trust shares in the open market on the American
Stock Exchange or elsewhere, for the participants' accounts. The Trust will not
issue any new shares in connection with 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 or local income taxes that
may be payable on such dividends or distributions.
The Trust reserves the right to amend or terminate the Plan as applied to
any dividend or distribution paid subsequent to written notice of the change
sent to all shareholders of the Trust at least 90 days before the record date
for the dividend or distribution. The Plan also may be amended or terminated by
the Plan Agent upon at least 90 days' written notice to all shareholders of the
Trust. All correspondence concerning the Plan should be directed to the Plan
Agent at (800) 699-1BFM. The addresses are on the front of this report.
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THE BLACKROCK BROAD INVESTMENT GRADE 2009 TERM TRUST INC.
ADDITIONAL INFORMATION
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ANNUAL MEETING OF TRUST SHAREHOLDERS. There have been no material changes
in the Trust's investment objectives or policies that have not been approved by
the shareholders or to its charter or by-laws or in the principal risk factors
associated with investment in the Trust. There have been no changes in the
persons who are primarily responsible for the day-to-day management of the
Trust's portfolio.
The Annual Meeting of Trust Shareholders was held May 18, 2000 to vote on
the following matters:
(1) To elect three Directors as follows:
DIRECTOR CLASS TERM EXPIRING
-------- ----- ---- --------
Andrew F. Brimmer ........ III 3 years 2003
Kent Dixon ............... III 3 years 2003
Laurence D. Fink ......... III 3 years 2003
Directors whose term of office continues beyond this meeting are
Richard E. Cavanagh, Frank J. Fabozzi, James Clayburn LaForce, Jr.,
Walter F. Mondale and Ralph L. Schlosstein.
(2) To ratify the selection of Deloitte &Touche LLP as independent public
accountants of the Trust for the fiscal year ending October 31, 2000.
Shareholders elected the Directors and ratified the selection of Deloitte
& Touche LLP. The results of the voting was as follows:
VOTES FOR VOTES AGAINST ABSTENTIONS
--------- ------------- -----------
Andrew F. Brimmer ............. 2,407,536 -- 49,599
Kent Dixon .................... 2,412,586 -- 44,549
Laurence D. Fink .............. 2,412,586 -- 44,549
Ratification of
Deloitte & Touche LLP ....... 2,416,756 2,462 37,917
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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 BlackRock Broad Investment Grade 2009 Term 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 Advisors, Inc. ("BlackRock") is an SEC-registered investment advisor.
As of March 31, 2000, the Advisor and its affiliates (together, "BlackRock")
managed $173 billion on behalf of taxable and tax-exempt clients worldwide.
Strategies include fixed income, equity and cash and may incorporate both
domestic and international securities. Domestic fixed income strategies utilize
the government, mortgage, corporate and municipal bond sectors. BlackRock
manages twenty-two closed-end funds that are traded on either the New York or
American stock exchanges, and a $29 billion family of funds. BlackRock manages
over 590 accounts, 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 ADVISOR'S INVESTMENT STRATEGY?
The Advisor will seek to meet the Trust's investment objective by managing the
assets of the Trust so as to return the initial offering price ($15 per share)
at maturity. The Advisor will implement a conservative strategy that will seek
to closely match the maturity of the assets of the portfolio with the future
return of the initial investment 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 Advisor will attempt to purchase securities with call
protection or maturities as close to the Trust's maturity date as possible.
Securities with call protection should provide the portfolio with some degree of
protection against reinvestment risk during times of lower prevailing interest
rates. Since the Trust's primary goal is to return the initial offering price at
maturity, any cash that the Trust receives prior to its maturity date (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 Advisor 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
Advisor 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 advisor. The Trust
pays monthly dividends which are typically paid on the last business day of the
month. For shares held in the shareholder's name,
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dividends may be reinvested in additional 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 THE 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. The Advisor's portfolio managers continuously
monitor and regularly review the Trust's use of leverage and the Trust may
reduce, or unwind, the amount of leverage employed should the Advisor consider
that reduction to be in the best interests of the shareholders.
SPECIAL CONSIDERATIONS AND RISK FACTORS RELEVANT TO TERM TRUSTS
THE TRUST IS INTENDED TO BE A LONG-TERM INVESTMENT AND IS NOT A SHORT-TERM
TRADING VEHICLE.
RETURN OF INITIAL INVESTMENT. Although the objective of the Trust is to return
its initial offering price upon termination, there can be no assurance that this
objective will be achieved.
DIVIDEND CONSIDERATIONS. The income and dividends paid by the Trust are likely
to decline to some extent over the term of the Trust due to the anticipated
shortening of the dollar-weighted average maturity of the Trust's assets.
INTEREST-ONLY SECURITIES (IO). The yield to maturity on an IO class is extremely
sensitive to the rate of principal payments (including prepayments) on the
related underlying Mortgage Assets, and a rapid rate of principal payments may
have a material adverse effect on such security's yield to maturity. If the
underlying Mortgage Assets experience greater than anticipated prepayments of
principal, the Trust may fail to recoup fully its initial investment in these
securities even if the securities are rated AAA by S&P or Aaa by Moody's.
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 than 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.
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THE BLACKROCK BROAD INVESTMENT GRADE 2009 TERM TRUST INC.
GLOSSARY
--------------------------------------------------------------------------------
ADJUSTABLE RATE MORTGAGE- Mortgage instruments with interest rates that
BACKED SECURITIES (ARMS): 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 Mortgage-backed securities which separate
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.
COMMERCIAL MORTGAGE Mortgage-backed securities secured or backed
BACKED SECURITIES (CMBS): by mortgage loans on commercial properties.
DISCOUNT: When a fund's net asset value is greater than
its stock price the fund is said to be
trading at a discount.
DIVIDEND: Income generated by securities in a portfolio
and distributed to shareholders after the
deduction of expenses. This Trust declares
and pays dividends 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 Administration, 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 Administration, 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, FNMA and
FHLMC.
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INTEREST-ONLY SECURITIES: Mortgage securities including CMBS 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 Mortgage instruments with coupons that adjust
MORTGAGE: at periodic intervals according to a formula
which sets inversely with a market level
interest rate index.
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.
NET ASSET VALUE (NAV): Net asset value is the total market value of
all securities and other assets held by the
Trust, plus income accrued on its
investments, minus any liabilities including
accrued expenses, divided by the total number
of outstanding shares. It is the underlying
value of a single share on a given day. Net
asset value for the Trust is calculated
weekly and published in BARRON'S on Saturday
and THE WALL STREET JOURNAL on Monday.
PRINCIPAL-ONLY SECURITIES: Mortgage securities that receive only the
principal cash flows from an underlying pool
of mortgage loans or underlying pass-through
securities. Also known as STRIPS.
PROJECT LOANS: Mortgages for multi-family, low- to
middle-income housing.
PREMIUM: When a fund's stock price is greater than its
net asset value, the fund 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, FNMA 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 distributions from underlying
mortgage-backed securities. IO's and PO's are
examples of strips.
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BLACKROCK ADVISORS, INC.
SUMMARY OF CLOSED-END FUNDS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TAXABLE TRUSTS
----------------------------------------------------------------------------------------------
STOCK MATURITY
PERPETUAL TRUSTS SYMBOL DATE
------ ------
<S> <C> <C>
The BlackRock Income Trust Inc. BKT N/A
The BlackRock North American Government Income Trust Inc. BNA N/A
The BlackRock High Yield Trust BHY N/A
TERM TRUSTS
The BlackRock Target Term Trust Inc. BTT 12/00
The BlackRock 2001 Term Trust Inc. BTM 06/01
The BlackRock Strategic Term Trust Inc. BGT 12/02
The BlackRock Investment Quality Term Trust Inc. BQT 12/04
The BlackRock Advantage Term Trust Inc. BAT 12/05
The BlackRock Broad Investment Grade 2009 Term Trust Inc. BCT 12/09
TAX-EXEMPT TRUSTS
----------------------------------------------------------------------------------------------
STOCK MATURITY
PERPETUAL TRUSTS SYMBOL DATE
------ ------
The BlackRock Investment Quality Municipal Trust Inc. BKN N/A
The BlackRock California Investment Quality Municipal Trust Inc. RAA N/A
The BlackRock Florida Investment Quality Municipal Trust RFA N/A
The BlackRock New Jersey Investment Quality Municipal Trust Inc. RNJ N/A
The BlackRock New York Investment Quality Municipal Trust Inc. RNY N/A
The BlackRock Pennsylvania Strategic Municipal Trust BPS N/A
The BlackRock Strategic Municipal Trust BSD N/A
TERM TRUSTS
The BlackRock Municipal Target Term Trust Inc. BMN 12/06
The BlackRock Insured Municipal 2008 Term Trust Inc. BRM 12/08
The BlackRock California Insured Municipal 2008 Term Trust Inc. BFC 12/08
The BlackRock Florida Insured Municipal 2008 Term Trust BRF 12/08
The BlackRock New York Insured Municipal 2008 Term Trust Inc. BLN 12/08
The BlackRock Insured Municipal Term Trust Inc. BMT 12/10
</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
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------------------
BLACKROCK
------------------
DIRECTORS
Laurence D. Fink, CHAIRMAN
Andrew F. Brimmer
Richard E. Cavanagh
Kent Dixon
Frank J. Fabozzi
James Clayburn La Force, Jr.
Walter F. Mondale
Ralph L. Schlosstein
OFFICERS
Ralph L. Schlosstein, PRESIDENT
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 ADVISOR
BlackRock Advisors, Inc.
400 Bellevue Parkway
Wilmington, DE 19809
(800) 227-7BFM
ADMINISTRATOR
Princeton Administrators, L.P.
P.O. Box 9095
Princeton, NJ 08543-9095
(800) 543-6217
CUSTODIAN AND TRANSFER AGENT
State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171
(800) 699-1BFM
INDEPENDENT ACCOUNTANTS
Deloitte & Touche LLP
Two World Financial Center
New York, NY 10281-1434
LEGAL COUNSEL
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, NY 10022
LEGAL COUNSEL - INDEPENDENT DIRECTORS
Debevoise & Plimpton
875 Third Avenue
New York, NY 10022
The accompanying financial statements as of April 30, 2000 were not audited
and accordingly, no opinion is expressed on them.
This report is for shareholder information. This is not a prospectus intended
for use in the purchase or sale of any securities.
THE BLACKROCK BROAD INVESTMENT GRADE 2009 TERM TRUST INC.
c/o Princeton Administrators, L.P.
P.O. Box 9095
Princeton, NJ 08543-9095
(800) 543-6217
[Logo] Printed on recycled paper 092472-10-6
THE BLACKROCK
BROAD INVESTMENT
GRADE 2009
TERM TRUST INC.
=========================
SEMI-ANNUAL REPORT
APRIL 30, 2000
[GRAPHIC]
