BLACKROCK 1999 TERM TRUST INC, N-30D, 1995-08-25

BLACKROCK 1999 TERM TRUST INC
N-30D, 1995-08-25

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--------------------------------------------------------------------------------
THE BLACKROCK 1999 TERM TRUST INC.
SEMI-ANNUAL REPORT TO SHAREHOLDERS
REPORT OF INVESTMENT ADVISER
--------------------------------------------------------------------------------

July 14, 1995

Dear Shareholder:

The fixed income markets benefitted from extremely bullish sentiment and
rallied during the semi-annual period between January 1, 1995 and June 30, 1995.
The U.S. economy appears to have responded to the Fed's vigilance toward
inflation with low absolute levels of inflation and moderate rates of growth.
This scenario is suggestive of a "soft landing" for the economy, which has
sparked a significant Treasury market rally and resulted in overall strength in
most fixed income markets. Closed-end bond funds responded to the broader
markets by staging a significant rebound during the first six months of 1995
from their all-time low stock prices during the fourth quarter of 1994.

BlackRock Financial Management, Inc. your Trust's investment adviser, is
pleased to report that its acquisition by PNC Bank, N.A. ("PNC") was officially
completed on February 28, 1995. PNC is a commercial bank whose principal office
is in Pittsburgh, Pennsylvania and is wholly-owned by PNC Bank Corp., a bank
holding company. The merger was structured to assure continuity of performance
and service through stability of our organization. BlackRock retains its name
and continues to operate out of its New York office. All members of BlackRock's
management team have signed long-term employment contracts and will continue to
be responsible for managing BlackRock's business so that shareholders will
notice no changes in the management of the Trust.

You will note several enhancements to the Trust's semi-annual report
designed to improve the report's usefulness to you. The letter to shareholders
which reviews the markets and Trust's investment strategy over the semi-annual
period is provided by the Trust's portfolio managers. In addition, we have
included an investment summary section which provides a synopsis of the Trust's
investment objectives and guidelines and reviews its investment strategy. We
appreciate your investment in The BlackRock 1999 Term Trust Inc. and look
forward to continuing to serve your financial needs.

Sincerely,

Laurence D. Fink Ralph L. Schlosstein
Chairman President

<PAGE>

July 14, 1995

Dear Shareholder:

The dramatic rally in the capital markets changed the market landscape for
fixed income investors over the six month period ending June 30, 1995. As we
present this semi-annual report for The BlackRock 1999 Term Trust Inc. (BNN or
"the Trust"), we are pleased to review the strong performance of the Trust, from
both a Net Asset Value (NAV) and stock price perspective as well as to discuss
the opportunities available to the Trust in the current market environment.

The Trust's shares are traded on the New York Stock Exchange under the
symbol BNN. BNN is a diversified closed-end bond fund whose investment objective
is to manage a portfolio of investment grade fixed income securities that will
return $10 per share (the initial offering price) to investors on or about
December 31, 1999 while providing high monthly income. As of the last fiscal
period-end, the Trust's NAV has appreciated in price by 6.5%, having ranged from
$8.43 to $9.03. Over the same time period, the stock price of the Trust has
risen 11.7%, having ranged from $7.38 to $9.00. BlackRock believes that the
Trust is well positioned to meet its targeted termination value.

It is important to evaluate the performance of the Trust in the context of
the closed-end fund marketplace. Investors who endured the market slump of 1994
and opted to "Hold" or acquire more shares of the Trust during the tumultuous
last months of the year witnessed a substantial increase in both NAV and share
price during the first half of 1995 as the market environment for fixed income
securities improved. As the closed-end bond market continues to lag the overall
market rally, many bond funds continue to trade at discounts despite the
appreciation of both NAV and stock price since the lows of last year. As the NAV
of the Trust draws closer to its termination value, a narrowing of its stock
price discount to NAV is expected to reflect such NAV growth.

The Fixed Income Markets

As the economy showed signs of a slowdown early this year, market
participants endlessly debated the direction of monetary policy and hotly
contested the likelihood that a "soft landing" for the economy had been
achieved. As economic reports grew increasingly pessimistic, the specter of
inflation diminished. With investor confidence in the value of fixed income
securities renewed, market demand increasingly accelerated.

While attuned to the possibility of a rejuvenated economy during the third
and fourth quarters of 1995, and the possibility of accompanying inflationary
pressure, BlackRock believes that the fixed income markets offer many pockets of
value to investors in the coming months. We believe that the Federal Reserve
will remain biased toward ease, which was echoed by Mr. Greenspan when he
acknowledged a better inflation environment by commenting in June that the
forces driving inflation "are very clearly easing". As such, BlackRock expects
continued solid performance of fixed income securities and continued decline in
interest rates, albeit modestly, over the balance of the year.

While fixed income markets in general have performed exceptionally well over
the last six months, falling yields and sustained high levels of interest rate
volatility together have created a less favorable environment for investors in
many mortgage-backed securities relative to other fixed income sectors. Due to
the ability of mortgage holders to refinance their mortgage at any time, the
"optionality of mortgage-backed securities", and the experience of investors who
witnessed unprecedented levels of mortgage refinancing in 1992 and 1993, lower
levels of interest rates have ignited fears of a similar acceleration in
prepayments. In some cases mortgage-backed security prices built in fast
prepayment expectations far in excess of actual prepayment experience, which
remained slow for the first months of the year. This presented selected
purchasing opportunities in those sectors of the mortgage market that are less
vulnerable to prepayment risk and reduce the likelihood of reinvesting cash
proceeds at lower yields.

Selected areas of the mortgage market continue to hold good relative value
for investors, even in light of the less favorable environment as described
above. These sectors include issues that have more stable cash flows and are
therefore less exposed to high levels of interest rate volatility and
accelerated prepayments. For example, seasoned mortgage pass-throughs are
fixed-rate issues which are relatively older than other pools on the market.
Because they have weathered several refinancing

<PAGE>

cycles, prepayments on these securities are expected to be more predictable and
to accelerate less in a declining rate environment. In addition, five and seven
year "balloon" mortgages are attractive. While a security backed by a balloon
mortgage amortizes in the same way as a thirty-year generic mortgage loan, the
balloon mortgage pays down entirely on the balloon date, e.g., five or seven
years after issue. This shorter time horizon to maturity significantly increases
the predictability of its income stream.

As demand increased for fixed income securities which offered strong cash
flow stability, corporate securities outperformed their counterparts in the
mortgage sector over the last five months, although new issuance has increased
supply. In particular, corporates which do not give the issuer the right to
redeem such securities prior to their maturity dates (non-callable) benefited
from their reduced exposure to volatility and continued strong corporate profits
(as evidenced by the astounding strength of the stock market). While a slowdown
in earnings and the prospects of a slower economy may put pressure on the
corporate market, significant demand from investors who seek to avoid the
volatility of mortgage product is expected to continue. Therefore, relatively
defensive purchases in the finance and non-cyclical industrial (e.g. food and
chemical) sectors which offer high credit quality and reduced exposure to
slowing economic growth appear attractive at this time.

The Trust's Portfolio and Investment Strategy

Reflecting the current and projected earnings level of the Trust's
portfolio, the Board of Directors for Trust voted at the end of June to reduce
the Trust's monthly dividend to $0.0375 per share from $0.04792 per share
effective with the July 1995 dividend. Based on the current stock price of
$8.13, this represents a current yield of 5.54% on an annualized basis. The
dividend is being set in accordance with the Trust's investment objective to
manage a portfolio of investment grade fixed income securities that will return
$10 per share (the initial offering price) to investors on or about December 31,
1999 while providing high monthly income.

Over the life of a term trust, dividends are expected to decline as assets
are reinvested in shorter maturity securities. Two other factors have put
pressure on the dividends of the Trust: (i) the bond market rally, which
resulted in a reduction in bond yields and (ii) a flatter yield curve, which has
resulted in a sharp reduction in the amount of income which the Trust earns from
leverage.

The Trust is now utilizing its broadened investment authority to purchase
investment grade corporate bonds, capturing opportunities to invest in
securities with a higher degree of cash flow stability and call protection. As
such restructuring develops over the remaining life of the Trust, the Trust
expects to own securities that have more cash flow predictability in a wide
array of interest rate environments versus its existing portfolio of prepayment
sensitive securities.

The current investment strategy for the Trust emphasizes the following
themes:

* Continue to target securities consistent with the Trust's maturity date.

-Increase allocation to securities which mature on or before the
termination date.

* De-emphasize mortgage securities with highest exposure to accelerating
prepayments and interest rate volatility.

-Maintain minimal exposure to mortgage derivatives which, although
high yielding, have very unpredictable cash flows and have very
little liquidity in the current market.

-Continue to invest in the mortgage securities where yield advantage
provides adequate compensation for cash flow risk.

-Focus investments on seasoned pass-throughs which have weathered
several refinancing cycles.

-Increase allocation to multifamily mortgage securities with "balloon"
dates to mitigate cash flow variability.

* Increase allocation to corporate bonds upon opportunity.

The following chart compares the Trust's portfolio composition as of June
30, 1995 and December 31, 1994. Consistent with the above themes, BlackRock
modified the Trust's allocation by adding to its adjustable rate mortgages and
corporate bond holdings as it decreased its mortgage pass through holdings.

<PAGE>

--------------------------------------------------------------------------------
The BlackRock 1999 Term Trust Inc.
--------------------------------------------------------------------------------
Composition June 30, 1995 December 31, 1994
--------------------------------------------------------------------------------
Mortgage Pass-Throughs 30% 55%
--------------------------------------------------------------------------------
Taxable Zero Coupon Bonds 15% 14%
--------------------------------------------------------------------------------
U.S. Government Securities 15% 8%
--------------------------------------------------------------------------------
Adjustable Rate Mortgages 12% 2%
--------------------------------------------------------------------------------
Agency Multiple Class Mortgage Pass-Throughs 10% 12%
--------------------------------------------------------------------------------
Stripped Mortgage-Backed Securities 6% 1%
--------------------------------------------------------------------------------
Corporate Bonds 4% 0%
--------------------------------------------------------------------------------
Municipal Securities 4% 1%
--------------------------------------------------------------------------------
Non Agency Multiple Class Mortgage Pass-Throughs 3% 1%
--------------------------------------------------------------------------------
CMO Residuals 1% 1%
--------------------------------------------------------------------------------
Asset-Backed Securities 0% 2%
--------------------------------------------------------------------------------
Commercial Mortgage-Backed Securities 0% 3%
--------------------------------------------------------------------------------

We look forward to managing the Trust in the coming months to benefit from
the many opportunities available to investors in the investment grade fixed
income markets as well as to position the Trust such that its exposure to
interest rate volatility is reduced.

Robert S. Kapito Keith T. Anderson
Vice Chairman and Portfolio Manager Managing Director and Portfolio Manager
BlackRock Financial Management, Inc. BlackRock Financial Management, Inc.

1Yield on Closing Stock Price is calculated by dividing the current annualized
distribution per share by the closing stock price per share.

2The distribution is not constant and is subject to change.

3New dividend rate effective with July 1995 payment.

<PAGE>
(Left column)

--------------------------------------------------------------------------------
The BlackRock 1999 Term Trust Inc.
Portfolio of Investments
June 30, 1995
(Unaudited)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Value
(000) Description (Note 1)
--------------------------------------------------------------------------------
<S> <C> <C>
LONG-TERM INVESTMENTS-146.3%
Mortgage Pass-Throughs-62.7%
Federal Home Loan Mortgage
Corporation,
$ 5,661 7.00%, 07/01/99-01/01/00,
5 Year..................................... $ 6,928,604
1,288 8.00%, 03/01/99, 7 Year...................... 1,320,687
14,448 8.00%, 07/01/08.............................. 14,890,648
1,129\d\d 8.25%, 06/01/08.............................. 1,157,909
12,723\d 9.50%, 02/01/02-03/01/02,
15 Year.................................... 13,303,663
4,769 9.50%, 05/01/21.............................. 5,011,423
Federal National Mortgage
Association,
4,842 8.50%, 10/01/09, 15 Year..................... 5,015,773
4,158 8.50%, 11/01/24.............................. 4,288,126
9,800 9.00%, 08/01/24-05/01/25..................... 10,207,292
4,061\d\d 10.00%, 03/15/18............................. 4,405,708
Government National Mortgage
Association,
14,681 6.50%, 05/20/25,
1 Year CMT (ARM)........................... 14,850,522
20,210 7.00%, 11/20/24,
1 Year CMT (ARM)........................... 20,604,150
18,628 9.00%, 11/15/17.............................. 19,685,839
------------
121,670,344
------------
Multiple Class Mortgage
Pass-Throughs-18.3%
3,000 CBA Mortgage Corporation,
Series 1993-C1, Class A-2,
12/25/03................................... 3,068,992
450 Chase Mortgage Finance
Corporation,
Series 1992-B, Class A-7,
08/25/23................................... 450,187
Federal Home Loan Mortgage
Corporation, Multiclass
Mortgage Participation
Certificates,
6,293 Series 172, Class 172-H,
05/15/20................................... 6,451,976
175 Series G-2, Class M, 07/25/18 (I)............ 1,745,030
2,000 Series 1093, Class 1093-F,
06/15/06................................... 1,999,908

</TABLE>

(Right column)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Value
(000) Description (Note 1)
--------------------------------------------------------------------------------
<S> <C> <C>
Federal Home Loan Mortgage
Corporation, Multiclass
Mortgage Participation
Certificates,
$ 6,655\d Series 1127, Class 1127-F,
03/15/06................................... $ 6,824,164
3,000 Series 1505, Class 1505-ID,
09/15/15 (I)............................... 583,351
Federal National Mortgage
Association, REMIC
Pass-Through Certificates,
296 Trust 1989-91, Class 91-E,
06/25/15................................... 300,663
64 Trust 1990-119, Class
119-G, 10/25/20 (I)........................ 798,224
901 Trust 1991-146, Class
146-SB, 10/25/06........................... 896,603
2,539 Trust 1992-3, Class 3-S,
01/25/99................................... 2,857,909
200 Trust 1992-31, Class 31-K,
10/25/20 (I)............................... 980,000
1,295 Trust 1992-199, Class
199-S, 11/25/99............................ 1,131,787
653 Trust 1993-193, Class
193-PC, 09/25/23........................... 563,760
7,130 Government National
Mortgage Association,
Trust 1994-1, Class 1-PL,
06/16/24 (I)................................. 1,476,117
100 Merril Lynch
Trust XLIII, Class F,
08/27/15 (I)................................. 2,472,344
2,362 Rural Housing Trust, Series
1987-1 Class D, 04/01/26..................... 2,303,965
50,975 Sears Mortgage Corporation,
Series 1992-7, Class X,
05/25/22 (I)................................. 621,256
------------
35,526,236
------------
Corporate Bonds-6.5%
3,000 American Express, A+*,
11.63%, 12/12/00............................. 3,399,300
3,000 Household Finance Corporation, A*,
6.65%, 05/26/98.............................. 3,019,500
3,000 Norwest Corporation, AA-*,
7.70%, 11/15/97.............................. 3,094,590

</TABLE>

See Notes to Financial Statements.

<PAGE>
(Left column)

--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Value
(000) Description (Note 1)
--------------------------------------------------------------------------------
<S> <C> <C>
Corporate Bonds-(Con't)
$ 3,040 Puget Sound Power & Light
Company, A-*,
7.88%, 10/01/97.............................. $ 3,138,704
------------
12,652,094
------------
Stripped Mortgage-Backed
Securities-8.9%
11,918 Federal Home Loan Mortgage
Corporation, Series 1473, Class JA,
02/15/05 (I/O)............................... 1,015,751
Federal National Mortgage
Association,
3,595 Trust 6, Class 2, 01/01/17 (I/O)............. 862,901
11,601 Trust 33, Class 2,
12/01/17 (I/O)............................. 2,925,559
9,801 Trust 95, Class 2,
10/01/20 (I/O)............................. 2,511,500
2,818 Trust 225, Class 1,
02/01/23 (P/O)............................. 2,197,845
5,301 Trust 1989-28, Class 28-B,
03/25/17 (P/O)............................. 4,300,750
91 Trust 1991-7, Class 7-K,
02/25/21 (I/O)............................. 1,954,611
18,218 Trust 1992-203, Class 203-JA,
06/25/05 (I/O)............................. 1,135,774
5,772 Trust 1994-44, Class T-44,
02/25/08 (I/O)............................. 324,670
------------
17,229,361
------------
Collateralized Mortgage Obligation
Residual**-0.1%
23 Federal Home Loan Mortgage
Corporation, Series 1115,
Class 1115-R, 08/15/06....................... 187,500
------------
U.S. Government Securities-21.1%
U.S. Treasury Notes,
4,000\d\d 6.13%, 05/31/97.............................. 4,020,640
18,000\d\d 6.75%, 05/31/99.............................. 18,472,500
15,215\d 6.88%, 03/31/00.............................. 15,747,525
2,375 7.88%, 11/15/04.............................. 2,645,156
------------
40,885,821
------------
Taxable Zero Coupon Bonds-22.4%
Financing Corporation
(FICO Strips),
5,311 08/08/99..................................... 4,147,838
3,667 11/02/99..................................... 2,823,883

</TABLE>

(Right column)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Value
(000) Description (Note 1)
--------------------------------------------------------------------------------
<S> <C> <C>
Financing Corporation
(FICO Strips),
$ 4,775 02/03/00..................................... $ 3,628,093
6,782 03/26/00..................................... 5,093,418
7,300 06/06/00..................................... 5,421,053
28,725\d U.S. Treasury Strip, 11/15/99.................. 22,250,672
------------
43,364,957
------------
Municipal Bonds-6.3%
8,000 Alameda Cnty. California Pension
Oblig., Series A,
7.35%, 12/01/99.............................. 8,257,120
750 Los Angeles Waste Wtr. Sys. Rev.,
Series A, 5.70%, 06/01/20.................... 712,695
375 Massachusetts Bay Trans. Auth.
Rev., Gen. Trans. Sys., Series A,
5.50%, 03/01/22.............................. 344,347
2,680 Massachusetts St. Hsg. Fin.
Agcy., Series C,
6.85%, 04/01/19.............................. 2,525,900
500 Metro Washington D.C. Arpt.
Auth. Rev., Series A,
5.25%, 10/01/22.............................. 448,075
------------
12,288,137
------------
Total long-term investments
(cost $286,472,727).......................... 283,804,450
------------
SHORT-TERM INVESTMENT-1.6%
Repurchase Agreement
3,175 Lehman Brothers Inc., 6.15%,
dated 6/29/95, due 7/3/95 in
the amount of $3,176,627
(collateralized, by $3,170,000
U.S. Treasury Bond, 6.25%,
2/15/03, value including
accrued interest-$3,317,504)................. 3,175,000
------------
Total investments before
investments sold short-147.9%
(cost $289,647,727).......................... 286,979,450
------------
INVESTMENTS SOLD SHORT-(6.4%)
U.S. Treasury Bonds,
10,000 7.50%, 11/15/24.............................. (11,064,100)
1,250 7.63%, 02/15/24.............................. (1,411,712)
------------
Total investments sold short
(proceeds $10,936,522)....................... (12,475,812)
------------
</TABLE>

See Notes to Financial Statements.

<PAGE>

(Left column)

</TABLE>

(Right column)

* Using the higher of Standard & Poor's or Moody's rating.

** Illiquid securities representing 0.1% of portfolio assets.

\d (Partial) principal amount pledged as collateral for reverse repurchase
agreements.

\d\d Entire principal amount pledged as collateral for reverse repurchase
agreements.

-----------------------------------------------------------------
Key to Abbreviations

ARM - Adjustable Rate Mortgage
CMO - Collateralized Mortgage Obligation
CMT - Constant Maturity Treasury
I - Denotes CMO with interest only characteristics
I/O - Interest Only
P - Denotes CMO with principal only characteristics
REMIC - Real Estate Mortgage Investment Conduit
-----------------------------------------------------------------

See Notes to Financial Statements.

<PAGE>
(Left column)

--------------------------------------------------------------------------------
The BlackRock 1999 Term Trust Inc.
Statement of Assets and Liabilities
June 30, 1995
(Unaudited)
--------------------------------------------------------------------------------

Assets
Investments, at value (cost $289,647,727) (Note 1)............. $286,979,450
Cash........................................................... 355,463
Deposits with brokers for investments
sold short (Note 1).......................................... 12,737,500
Interest receivable............................................ 2,970,530
Deferred organization expenses and other assets................ 84,065
------------
303,127,008
------------
Liabilities
Reverse repurchase agreements (Note 4)......................... 84,759,000
Investments sold short, at value
(proceeds $10,936,522) (Note 1).............................. 12,475,812
Payable for investments purchased.............................. 11,067,237
Distribution payable........................................... 234,694
Interest payable............................................... 133,072
Advisory fee payable (Note 2).................................. 64,108
Administration fee payable (Note 2)............................ 16,027
Other accrued expenses......................................... 353,777
------------
109,103,727
------------
Net Assets..................................................... $194,023,281
============
Net assets were comprised of:
Common stock, at par (Note 5)................................ $ 216,106
Paid-in capital in excess of par............................. 203,159,272
------------
203,375,378
Undistributed net investment income.......................... 3,049,164
Accumulated net realized losses.............................. (8,193,694)
Net unrealized depreciation.................................. (4,207,567)
------------
Net assets, June 30, 1995.................................... $194,023,281
============
Net asset value per share:
($194,023,281 / 21,610,583 shares of
common stock issued and outstanding)......................... $8.98
=====

(right column)

--------------------------------------------------------------------------------
The BlackRock 1999 Term Trust Inc.
Statement of Operations
Six Months Ended June 30, 1995
(Unaudited)
--------------------------------------------------------------------------------
Net Investment Income

Income
Interest (net of interest expense of $2,565,616)............. $ 6,933,323
------------
Operating expenses
Investment advisory.......................................... 376,090
Administration............................................... 94,022
Custodian.................................................... 43,000
Directors.................................................... 31,000
Reports to shareholders...................................... 30,000
Legal........................................................ 21,000
Transfer agent............................................... 10,000
Audit........................................................ 9,000
Miscellaneous................................................ 87,215
------------
Total operating expenses................................. 701,327
------------
Net investment income.......................................... 6,231,996
------------
Realized and Unrealized Gain (Loss) on
Investments (Note 3)
Net realized gain (loss) on:
Investments.................................................. 2,476,668
Futures...................................................... (325,324)
Short sales.................................................. (3,593,261)
------------
(1,441,917)
------------
Net change in unrealized appreciation
(depreciation) on:
Investments.................................................. 14,325,514
Futures...................................................... 91,122
Short sales.................................................. (888,980)
------------
13,527,656
------------
Net gain on investments...................................... 12,085,739
------------
Net Increase In Net Assets Resulting
from Operations.............................................. $18,317,735
============

See Notes to Financial Statements.

<PAGE>
(left column)

--------------------------------------------------------------------------------
The BlackRock 1999 Term Trust Inc.
Statement of Cash Flows
Six Months Ended June 30, 1995
(Unaudited)
--------------------------------------------------------------------------------

Increase (Decrease) in Cash
Cash flows provided by operating activities:
Interest received............................................ $ 10,252,206
Operating expenses paid and excise taxes..................... (663,909)
Interest expense paid........................................ (3,170,658)
Purchase of short-term portfolio
investments, net........................................... (3,175,000)
Purchase of long-term portfolio investments.................. (285,609,265)
Proceeds from disposition of long-term
portfolio investments...................................... 283,291,881
Other........................................................ 53,879
------------
Net cash flows provided by operating activities.............. 979,134
------------
Cash flows used for financing activities:
Increase in reverse repurchase agreements................. 5,315,627
Cash dividends paid.......................................... (6,217,569)
------------
Net cash flows used for financing activities................. (901,942)
------------
Net increase in cash........................................... 77,192
Cash at beginning of period.................................... 278,271
------------
Cash at end of period......................................... $ 355,463
============
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.............................................. $ 18,317,735
------------
Increase in investments........................................ (8,403,283)
Net realized loss.............................................. 1,441,917
Increase in unrealized appreciation............................ (13,527,656)
Increase in interest receivable................................ (562,384)
Decrease in receivable for investments sold.................... 24,146,888
Decrease in deposits with brokers for
short sales.................................................. 18,770,250
Decrease in variation margin................................... 40,798
Decrease in other assets....................................... 30,398
Decrease in securities sold short.............................. (18,612,388)
Decrease in payable for investments
purchased.................................................... (20,118,998)
Decrease in interest payable................................... (605,042)
Increase in accrued expenses and
other liabilities............................................ 60,899
------------
Total adjustments............................................ (17,338,601)
------------
Net cash flows provided by operating activities................ $ 979,134
============

(Right column)

--------------------------------------------------------------------------------
The BlackRock 1999 Term Trust Inc.
Statements of Changes
in Net Assets
(Unaudited)
--------------------------------------------------------------------------------
Six Months Year Ended
Ended December 31,
June 30, 1995 1994
------------- ------------
Increase (Decrease)
in Net Assets
Operations:
Net investment income.................... $ 6,231,996 $ 15,507,187
Net realized loss on
investments, futures,
short sales............................ (1,441,917) (1,893,949)
Net change in unrealized
appreciation
(depreciation) on
investments, futures,
short sales............................ 13,527,656 (18,203,510)
------------ ------------
Net increase (decrease) in
net assets resulting from
operations............................. 18,317,735 (4,590,272)
Dividends from net investment
income................................... (6,213,463) (13,616,371)
------------ ------------
Total increase (decrease).................. 12,104,272 (18,206,643)
Net Assets
Beginning of period........................ 181,919,009 200,125,652
------------ ------------
End of period.............................. $194,023,281 $181,919,009
============ ============

See Notes to Financial Statements.

<PAGE>

--------------------------------------------------------------------------------
The BlackRock 1999 Term Trust Inc.
Financial Highlights
(Unaudited)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
December 23,
Six Months 1992*
Ended Year Ended December 31, Through
June 30, -------------------------- December 31,
1995 1994 1993 1992
---- ---- ---- ----
PER SHARE OPERATING PERFORMANCE:

<S> <C> <C> <C> <C>
Net asset value, beginning of period........................... $ 8.42 $ 9.26 $ 9.40 $ 9.45
-------- -------- -------- --------
Net investment income (net of $.12, $.15, $.01 and $.00,
respectively, of interest expense)......................... .29 .72 .73 .01
Net realized and unrealized gain (loss) on investments....... .56 (.93) (.19) (.02)
-------- -------- -------- --------
Net increase (decrease) from investment operations............. .85 (.21) .54 (.01)
-------- -------- -------- --------
Dividends from net investment income........................... (.29) (.63) (.68) -
-------- -------- -------- --------
Capital charge with respect to issuance of shares.............. - - - (.04)
-------- -------- -------- --------
Net asset value, end of period**............................... $ 8.98 $ 8.42 $ 9.26 $ 9.40#
======== ======== ======== ========
Market value, end of period**.................................. $ 8.38 $ 7.50 $ 9.50 $ 10.00
======== ======== ======== ========
TOTAL INVESTMENT RETURN\d:..................................... 15.69% (14.88%) 1.74% 5.82%
RATIOS TO AVERAGE NET ASSETS:
Operating expenses@............................................ 0.75%\d\d 0.71% 0.79% 0.91%\d\d
Net investment income.......................................... 6.64%\d\d 8.17% 7.74% 3.35%\d\d
SUPPLEMENTAL DATA:
Average net assets (in thousands).............................. $189,144 $189,828 $202,158 $178,963
Portfolio turnover............................................. 87% 109% 62% 0%
Net assets, end of period (in thousands)....................... $194,023 $181,919 $200,126 $178,629
Reverse repurchase agreements outstanding, end of
period (in thousands).......................................... $ 84,759 $ 79,443 $ 47,100 -
Asset coverage\d\d\d........................................... $ 3,289 $ 3,290 $ 5,249 -

<FN>
-------------
* Commencement of investment operations.

** Net asset value and market value published in The Wall Street Journal
each Monday.

# Net asset value immediately after the closing of the first public
offering was $9.41.

@ The ratios of expenses, including excise tax, to average net assets were
0.75%, 0.74%, 0.79%, and 0.91% for the periods indicated above,
respectively.

\d 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 each period reported. Dividends are
assumed, for purposes of this calculation, to be reinvested at prices
obtained under the Trust's dividend reinvestment plan. This calculation
does not reflect brokerage commissions. Total investment return for
periods of less than one full year are not annualized.

\d\d Annualized.

\d\d\d Per $1,000 of reverse repurchase agreement outstanding.

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 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.

</FN>

</TABLE>
See Notes to Financial Statements.

<PAGE>
(Left column)

--------------------------------------------------------------------------------
The BlackRock 1999 Term Trust Inc.
Notes to Financial Statements
(Unaudited)
--------------------------------------------------------------------------------

Note 1. Accounting Policies

The BlackRock 1999 Term Trust Inc. (the "Trust"), a Maryland corporation is a
diversified closed-end management investment company. The Trust had no
transactions until December 14, 1992, when it sold 10,583 shares of common stock
for $100,010 to BlackRock Financial Management, Inc. (the "Adviser"). Investment
operations commenced on December 23, 1992.

The investment objective of the Trust is to manage a portfolio of
investment grade fixed income securities that will return $10 per share (the
initial public offering price per share) to investors on or about December 31,
1999 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 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
determine 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.

(Right column)

Short-term securities which mature in more than 60 days are valued at
current market quotations. Short-term securities which mature in 60 days or less
are valued at amortized cost, if their term to maturity from date of purchase
was 60 days or less, or by amortizing their value on the 61st day prior to
maturity, if their original term to maturity from date of purchase exceeded 60
days.

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.

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, depend-

<PAGE>
(left column)

ing 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. 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. 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 underlying
positions.

Short Sales: The Trust may make short sales of securities as a method of hedging
potential price declines in similar securities owned. To complete a short sale,
the Trust may arrange through a broker to borrow the securities to be delivered
to the buyer. The proceeds received by the Trust from the short sale are
retained by the broker until the Trust replaces the borrowed securities. In
borrowing the securities to be delivered to the buyer, the Trust becomes
obligated to replace the securities borrowed at their mar-

(Right column)

ket price at the time of replacement, whatever that price may be. A gain,
limited to the price at which the Trust sold the security short, or a loss,
unlimited as to dollar amount, will be recognized upon the termination of a
short sale if the market price is greater or less than the proceeds originally
received.

Securities Lending: The Trust may lend its portfolio securities to qualified
institutions. The loans are secured by collateral at least equal, at all times,
to the market value of the securities loaned. The Trust may bear the risk of
delay in recovery of, or even loss of rights in, the securities loaned should
the borrower of the securities fail financially. The Trust receives compensation
for lending its securities in the form of interest on the loan. The Trust also
continues to receive interest on the securities loaned, and any gain or loss in
the market price of the securities loaned that may occur during the term of the
loan will be for the account of the Trust. The Trust did not engage in
securities lending during the six months ended June 30, 1995.

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 and 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 substantially all of its taxable income to shareholders. Therefore,
no federal income tax provision is required. As part of a tax planning strategy,
the Trust may 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 net realized
short-term capital gains and other sources, if necessary. Net long-term capital
gains, if any, in excess of loss carryforwards are distributed at least
annually. Dividends and distributions are recorded on the ex-dividend date.

Deferred Organization Expenses: A total of $70,000 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.

<PAGE>
(left column)

Note 2. Agreements

The Trust has an Investment Advisory Agreement with the Adviser and an
Administration Agreement with Prudential Mutual Fund Management, Inc. ("PMF"),
an indirect, wholly-owned subsidiary of The Prudential Insurance Co. of America.

The investment advisory fee paid to the Adviser is computed weekly and
payable monthly at an annual rate of 0.40% of the Trust's average weekly net
assets. The administration fee paid to PMF is also computed weekly and payable
monthly at an annual rate of 0.10% 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 who
are affiliated persons of the Adviser. PMF pays occupancy and certain clerical
and accounting costs of the Trust. The Trust bears all other costs and expenses.

On February 28, 1995, the Adviser was acquired by PNC Bank, N.A. Following
the acquisition, the Adviser has become a wholly-owned corporate subsidiary of
PNC Asset Management Group, Inc., the holding company for PNC's asset management
business.

Note 3. Portfolio Securities

Purchases and sales of investment securities, other than short-term investments
and dollar rolls, for the six months ended June 30, 1995 aggregated $265,490,267
and $258,661,839, respectively.

The Trust may invest up to 40% of its total assets in securities which are
not readily marketable, including those which are restricted as to disposition
under securities law ("restricted securities"). At June 30, 1995, the Trust held
0.1% of its portfolio in illiquid securities.

The federal income tax basis of the Trust's investments at June 30, 1995
was substantially the same as the basis for financial reporting and,
accordingly, net unrealized depreciation for federal income tax purposes was
$4,207,567 (gross unrealized appreciation-$2,650,834; gross unrealized
depreciation-$6,858,401).

For federal income tax purposes, the Trust had a capital loss carryforward
at December 31, 1994 of approximately $6,752,000 of which $4,858,000 expires in
2001 and $1,894,000 expires in 2002. Accordingly, no capital gains distribution
is expected to be paid to shareholders until net gains have been realized in
excess of such amounts.

(Right column)

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 will be 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 containing liquid high grade securities having a value
not less than the repurchase price, including accrued interest, of the reverse
repurchase agreement.

The average daily balance of reverse repurchase agreements outstanding
during the six months ended June 30, 1995 was approximately $85,661,000 at a
weighted average interest rate of approximately 6.04%. The maximum amount of
reverse repurchase agreements outstanding at any month-end during the six months
ended June 30, 1995 was $93,367,809 as of February 28, 1995 which was 32.9% of
total assets. The amount of reverse repurchase agreements outstanding at June
30, 1995 was $84,759,000, which was 28.0% of total assets.

Dollar Rolls: The Trust may enter into dollar rolls in which the Trust sells
securities for delivery in the current month and simultaneously contracts to
repurchase substantially similar (same type, coupon and maturity) securities on
a specified future date. During the roll period the Trust forgoes principal and
interest paid on the securities. The Trust will be compensated by the interest
earned on the cash proceeds of the initial sale and by the lower repurchase
price at the future date.

The average monthly balance of dollar rolls outstanding during the six
months ended June 30, 1995 was approximately $1,043,000. The maximum amount of
dollar rolls outstanding at any month-end during the six months ended June 30,
1995 was $4,176,117 as of January 31, 1995 which was 1.3% of total assets.

Note 5. Capital

There are 200 million shares of $.01 par value common stock authorized. Of the
21,610,583 shares outstanding at June 30, 1995, the Adviser owned 10,583 shares.

Note 6. Dividends

On June 29, 1995 the Board of Directors of the Trust declared a dividend from
undistributed earnings of $0.0375 per share payable July 31, 1995 to
shareholders of record on July 14, 1995.

<PAGE>

Note 7. Quarterly Data

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------------
Net increase
Net realized and (decrease)
unrealized in net assets
Net investment gains (losses) resulting from Dividends and Period end
Quarterly Total income on investments operations Distributions Share prices net asset
period income Amount Per share Amount Per share Amount Per share Amount Per share High Low value
------- ------ ---------------- -------------------- ----------------- ---------------- ------------ -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
January 1,
1993 to
March 31,
1993....... $3,949,563 $3,587,911 $0.17 $ 958,011 $0.04 $4,545,922 $0.21 $2,666,740 $0.11 $10-1/8 9-3/4 $9.49
April 1,
1993 to
June 30,
1993....... 4,703,476 4,302,048 0.20 1,076,434 0.05 5,378,482 0.25 4,000,119 0.19 10 9-3/8 9.55
July 1,
1993 to
September 30,
1993....... 5,217,597 3,966,753 0.18 (1,317,563) (0.06) 2,649,190 0.12 4,000,119 0.19 10 9-3/4 9.49
October 1,
1993 to
December 31,
1993....... 3,368,610 3,783,121 0.18 (4,763,426) (0.22) (980,305) (0.04) 4,000,119 0.19 10 8-7/8 9.26
January 1,
1994 to
March 31,
1994....... 5,061,149 3,185,142 0.15 (8,872,649) (0.41) (5,687,507) (0.26) 3,801,288 0.17 9-7/8 8-1/8 8.82
April 1,
1994 to
June 30,
1994....... 3,785,060 4,945,496 0.23 (5,482,576) (0.26) (537,080) (0.03) 3,403,668 0.16 9 8-1/8 8.64
July 1,
1994 to
September 30,
1994....... 3,461,494 3,131,396 0.14 (513,910) (0.02) 2,617,486 0.12 3,304,684 0.15 8-5/8 7-5/8 8.59
October 1,
1994 to
December 31,
1994....... 4,596,543 4,245,153 0.20 (5,228,324) (0.24) (983,171) (0.04) 3,106,731 0.15 8-1/8 7-1/8 8.42
January 1,
1995 to
March 31,
1995....... 3,703,131 2,529,371 0.12 7,632,725 0.35 10,162,096 0.47 3,106,725 0.14 8-3/8 7-3/8 8.74
April 1,
1995 to
June 30,
1995....... 3,230,192 3,702,625 0.17 4,453,014 0.21 8,155,639 0.38 3,106,738 0.15 9 7-7/8 8.98

</TABLE>

<PAGE>

--------------------------------------------------------------------------------
THE BLACKROCK 1999 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 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 New York
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.

Experience under the Plan may indicate that changes are desirable.
Accordingly, the Trust reserves the right to amend or terminate the Plan as
applied to any dividend or distribution paid subsequent to written notice of the
change sent to all shareholders of the Trust at least 90 days before the record
date for the dividend or distribution. The Plan also may be amended or
terminated by the Plan Agent upon at least 90 days written notice to all
shareholders of the Trust. All correspondence concerning the Plan should be
directed to the Plan Agent at (800) 699-1BFM. The addresses are on the front of
this report.

<PAGE>

--------------------------------------------------------------------------------
THE BLACKROCK 1999 TERM TRUST INC.
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.

At a Special Meeting of Trust Shareholders held on February 15, 1995, the
Shareholders approved the advisory agreement with BlackRock Financial
Management, Inc. The result of the voting is as follows:

Votes For 13,135,977 Votes Against 189,402 Votes Withheld 566,666

The Annual Meeting of Trust Shareholders was held May 16, 1995 to vote on
the following matters:

(1) To broaden the Trust's investment objective to permit investment in
investment grade securities while continuing to maintain the investment
objectives of returning the initial offering price per share on or
about the termination date of the Trust and providing high monthly
income.

(2) To elect three Directors to serve as follows:

Director Class Term Expiring
-------- ----- ---- --------
Frank J. Fabozzi................ II 3 years 1998
Ralph L. Schlosstein............ II 3 years 1998
Richard E. Cavanagh............. I 2 years 1997

Directors whose term of office continues beyond this meeting are Kent
Dixon, Andrew F. Brimmer, James Grosfeld, James Clayburn La Force, Jr.
and Laurence D. Fink.

(3) To ratify the selection of Deloitte & Touche LLP as independent public
accountants of the Trust for the fiscal year ending December 31, 1995.

Shareholders approved the broadening of the investment objectives, elected
the three Directors and ratified the selection of Deloitte & Touche LLP. The
results of the voting was as follows:

Votes For Votes Against Votes Withheld
--------- ------------- --------------
<S> <C> <C> <C>
Broadening of Investment Objectives.. 8,749,050 450,532 619,948
Frank J. Fabozzi..................... 10,701,752 - 511,311
Ralph L. Schlosstein................. 10,697,764 - 515,299
Richard E. Cavanagh.................. 10,702,752 - 510,311
Ratification of Deloitte & Touche LLP 10,545,771 346,674 320,618
</TABLE>

<PAGE>

--------------------------------------------------------------------------------
THE BLACKROCK 1999 TERM TRUST INC.
INVESTMENT SUMMARY
--------------------------------------------------------------------------------

The Trust's Investment Objective

The Trust's investment objective is to manage a portfolio of investment grade
fixed income securities that will return $10 per share (the initial public
offering price per share) to investors on or about December 31, 1999 while
providing high monthly income.

Who Manages the Trust?

BlackRock Financial Management, Inc. ("BlackRock" or the "Adviser") is the
investment adviser for the Trust. BlackRock is a registered investment adviser
specializing in fixed income securities. Currently, BlackRock manages over $32
billion of assets across the government, mortgage, corporate and municipal
sectors. These assets are managed on behalf of institutional and individual
investors in 21 closed-end funds, several open-end funds and separate accounts
for more than 80 clients in the U.S. and overseas. BlackRock is a subsidiary of
PNC Asset Management Group, Inc. which is a division of PNC Bank, the nation's
twelfth largest banking organization.

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) and corporate debt
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 ($10 per share)
at maturity. The Trust will implement a conservative strategy that will seek to
closely match the maturity of the assets of the portfolio with the future return
of the initial investment at the end of 1999. 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 and the value of securities that
are purchased, if any, will be sufficient to return the initial offering price
to investors. On a continuous basis, the Trust will seek its objective by
actively managing its 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 Adviser
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
33-1/3% of 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 yield 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.

<PAGE>

How Are the Trust's Shares Purchased and Sold? Does the Trust Pay Dividends
Regularly?

The Trust's shares are traded on the New York Stock Exchange which provides
investors with liquidity on a daily basis. Orders to buy or sell shares of the
Trust must be placed through a registered broker or financial advisor. The Trust
pays monthly dividends which are typically paid on the last business day of the
month. For shares held in the shareholder's name, dividends may be reinvested in
additional shares of the fund through the Trust's transfer agent, Boston
Financial Data Services. Investors who wish to hold shares in a brokerage
account should check with their financial advisor to determine whether their
brokerage firm offers dividend reinvestment services.

Leverage Considerations in a Term Trust

Under current market conditions, leverage increases the income earned by the
Trust. The Trust employs leverage primarily through the 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 33-1/3% 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 fund in a declining rate
environment, but can cause net assets to decline faster than the market in a
rapidly rising rate environment. BlackRock's portfolio managers continuously
monitor and regularly review the Trust's use of leverage and the Trust may
reduce, or unwind, the amount of leverage employed should BlackRock consider
that reduction to be in the best interests of the shareholders.

Special Considerations and Risk Factors Relevant to Term Trusts

The Trust is intended to be a long-term investment and is not a short-term
trading vehicle.

Return of Initial Investment. Although the objective of the Trust is to return
its initial offering price upon termination, there can be no assurance that this
objective will be achieved.

Dividend Considerations. The income and dividends paid by the Trust are likely
to decline to some extent over the term of the Trust due to the anticipated
shortening of the dollar-weighted average maturity of the Trust's assets.

Leverage. The Trust utilizes leverage through 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 New York Stock Exchange 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 cashflow 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 movements on these 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 objective.

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 up to 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
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.

<PAGE>

--------------------------------------------------------------------------------
THE BLACKROCK 1999 TERM TRUST INC.
GLOSSARY
--------------------------------------------------------------------------------

Adjustable Rate Mortgage-
Backed Securities (ARMs): Mortgage instruments with interest rates that
adjust at periodic intervals at a fixed amount
over the market levels of interest rates as
reflected in specified indexes. ARMS are backed by
mortgage loans secured by real property.

Asset-Backed Securities: Securities backed by various types of receivables
such as automobile and credit card receivables.

Closed-End Fund: Investment vehicle which initially offers a fixed
number of shares and trades on a stock exchange.
The fund invests in a portfolio of securities in
accordance with its stated investment objectives
and policies.

Collateralized
Mortgage Obligations (CMOs): Mortgage-backed securities which separate mortgage
pools into short-, medium-, and long-term
securities with different priorities for receipt
of principal and interest. Each class is paid a
fixed or floating rate of interest at regular
intervals. Also known as multiple-class mortgage
pass-throughs.

Discount: When a fund's net asset value is greater than its
stock price the fund is said to be trading at a
discount.

Dividend: This is 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 distributions
of dividends and 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 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
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).

<PAGE>

Interest-Only Securities (I/O): Mortgage securities that receive only the
interest cash flows from an underlying pool of
mortgage loans or underlying pass-through
securities. Also known as a "Strip."

Market Price: Price per share of a security trading in the
secondary market. For a closed-end fund, this
is the price at which one share of the fund
trades on the stock exchange. If you were to
buy or sell shares, you would pay or receive
the market price.

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 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 New
York Times or 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 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, 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.

Strips: Arrangements in which a pool of assets is
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.

<PAGE>

--------------------------------------------------------------------------------
BlackRock Financial Management, Inc.
Summary of Closed-End Funds
--------------------------------------------------------------------------------

<TABLE>
Taxable Trusts
-------------------------------------------------------------------------------------------------
<CAPTION>
Perpetual Trusts Stock Symbol Maturity
------------ --------
<S> <C> <C>
The BlackRock Income Trust Inc. ..................................... BKT N/A
The BlackRock North American Government Income Trust Inc. ........... BNA N/A

Term Trusts
The BlackRock 1998 Term Trust Inc. .................................. BBT 12/98
The BlackRock 1999 Term Trust Inc. .................................. BNN 12/99
The BlackRock Target Term Trust Inc. ................................ BTT 12/00
The BlackRock 2001 Term Trust Inc. .................................. BLK 06/01
The BlackRock Strategic Term Trust Inc. ............................. BGT 12/02
The BlackRock Investment Quality Term Trust Inc. .................... BQT 12/04
The BlackRock Advantage Term Trust Inc. ............................. BAT 12/05
The BlackRock Broad Investment Grade 2009 Term Trust Inc. ........... BCT 12/09
</TABLE>

<TABLE>
Tax-Exempt Trusts
-------------------------------------------------------------------------------------------------
<CAPTION>
Perpetual Trusts Stock Symbol Maturity
------------ --------
<S> <C> <C>
The BlackRock Investment Quality Municipal Trust Inc. ............... BKN N/A
The BlackRock California Investment Quality Municipal Trust Inc. .... RAA N/A
The BlackRock Florida Investment Quality Municipal Trust ............ RFA N/A
The BlackRock New Jersey Investment Quality Municipal Trust Inc. .... RNJ N/A
The BlackRock New York Investment Quality Municipal Trust Inc. ...... RNY N/A

Term Trusts
The BlackRock Municipal Target Term Trust Inc. ...................... BMN 12/06
The BlackRock Insured Municipal 2008 Term Trust Inc. ................ BRM 12/08
The BlackRock California Insured Municipal 2008 Term Trust Inc. ..... BFC 12/08
The BlackRock Florida Insured Municipal 2008 Term Trust ............. BRF 12/08
The BlackRock New York Insured Municipal 2008 Term Trust Inc. ....... BLN 12/08
The BlackRock Insured Municipal Term Trust Inc. ..................... BMT 12/10
</TABLE>

If you would like further information
please call BlackRock at (800) 227-7BFM (7236)

<PAGE>

--------------------------------------------------------------------------------
BlackRock Financial Management, Inc.
An Overview
--------------------------------------------------------------------------------

BlackRock Financial Management (BlackRock) is a registered investment
adviser which specializes in managing high quality fixed income securities, both
taxable and tax exempt. BlackRock currently manages over $32 billion of assets
across the government, mortgage, corporate and municipal sectors. These assets
are managed on behalf of institutional and individual investors in 21 closed-end
funds, several open-end funds and over 80 institutional clients in the United
States and overseas. BlackRock's institutional investor base includes Chrysler
Corporation Master Retirement Trust, General Retirement System of the City of
Detroit, State Treasurer of Florida, Ford Motor Company Pension Plan, General
Electric Pension Trust and Unisys Corporation Master Trust.

BlackRock was formed in April 1988 by fixed income professionals who sought
to create an asset management firm specializing in managing fixed income
securities for individuals and institutional investors. The professionals at
BlackRock have extensive experience creating, analyzing and trading a variety of
fixed income instruments, including the most complex structured securities. In
fact, individuals at BlackRock are responsible for many of the major innovations
in the mortgage-backed and asset-backed securities market, including the
creation of the CMO, the floating rate CMO, the senior/subordinated pass-through
and the multi-class asset-backed security.

BlackRock is unique among asset management and advisory firms in the
significant emphasis it places on the development of proprietary analytical
capabilities. A quarter of the professionals at BlackRock work full-time in the
design, maintenance and use of such systems which are otherwise not generally
available to investors. BlackRock's proprietary analytical tools are used for
evaluating, investing in and designing investment strategies and portfolios of
fixed income securities, including mortgage securities, corporate debt
securities or tax-exempt securities and a variety of hedging instruments.

BlackRock has developed investment products which respond to investors'
needs and has been responsible for several major innovations in closed-end
funds. BlackRock introduced the first closed-end mortgage fund, the first
taxable and tax-exempt closed-end funds to offer a finite term, the first
closed-end fund to achieve a AAAf rating by Standard & Poor's, and the first
closed-end fund to invest primarily in North American Government securities.
BlackRock's closed-end funds currently have dividend reinvestment plans which
are designed to provide an ongoing source of demand for the stock in the
secondary market. BlackRock manages a ladder of alternative investment vehicles,
with each fund having specific investment objectives and policies.

In view of our continued desire to provide a high level of service to all
our shareholders, BlackRock maintains a toll-free number for your questions. The
number is (800) 227-7BFM (7236). We encourage you to call us with any questions
you may have about your BlackRock funds and thank you for the continued trust
you place in our abilities.

<PAGE>
(Left column)

BlackRock

Directors
Laurence D. Fink, Chairman
Andrew F. Brimmer
Richard E. Cavanagh
Kent Dixon
Frank J. Fabozzi
James Grosfeld
James Clayburn La Force, Jr.
Ralph L. Schlosstein

Officers
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
Kevin J. Mahoney, Assistant Treasurer
Karen H. Sabath, Secretary

Investment Adviser
BlackRock Financial Management, Inc.
345 Park Avenue
New York, NY 10154
(800) 227-7BFM

Administrator
Prudential Mutual Fund Management, Inc.
One Seaport Plaza
New York, NY 10292

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
919 Third Avenue
New York, NY 10022

The accompanying financial statements as of
June 30, 1995 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 1999 Term Trust Inc.
c/o Prudential Mutual Fund Management, Inc.
32nd Floor
One Seaport Plaza
New York, NY 10292 (800) 227-7BFM

09247T-10-0

(Right column)

The BlackRock
1999 Term
Trust Inc.
----------------------------------------

Semi-Annual Report
June 30, 1995