BLACKROCK 1999 TERM TRUST INC, N-30D, 1996-08-23

BLACKROCK 1999 TERM TRUST INC
N-30D, 1996-08-23

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

July 31, 1996

Dear Trust Shareholder:

After posting strong returns during 1995, the fixed income markets have
given back much of their gains in 1996 in response to a strengthening U.S.
economy. Accelerating economic growth has raised concerns about an increased
inflationary environment, which could erode the value of fixed income
investments. The stronger economy also has led some market participants to
consider the possibility that the Federal Reserve may increase interest rates to
thwart inflation threats after three interest rate reductions over the past
twelve months.

Despite the pick-up in economic growth, we believe that current inflationary
fears will subside. Commodity prices have risen but manufacturers will have
difficulty passing along the increased costs of raw materials to consumers,
whose debt levels as a percentage of disposable income are at the highest point
since the recessionary highs of 1990. We believe that the overleveraged consumer
will have to retrench, restricting future economic expansion and creating a
positive environment for bonds in the latter half of this year.

The following semi-annual report provides detailed market commentary and a
review of portfolio management activity. We believe that BlackRock's duration
controlled management style and risk management capabilities will allow each of
our Trusts to achieve its long-term investment objective.

We look forward to maintaining your respect and confidence and to serving
your financial needs in the coming years.

Sincerely,

Laurence D. Fink Ralph L. Schlosstein
Chairman President

1
<PAGE>

July 31, 1996

Dear Shareholder:

We are pleased to present the semi-annual report for The BlackRock 1999 Term
Trust Inc. ("the Trust") for the six months ended June 30, 1996. We would like
to take this opportunity to review the Trust's stock price and net asset value
(NAV) performance, summarize market developments and discuss recent portfolio
management activity.

The Trust is a diversified, actively managed closed-end bond fund whose
shares are traded on the New York Stock Exchange under the symbol "BNN". The
Trust's investment objective is to return $10 per share (its initial offering
price) to shareholders on or about December 31, 1999 while providing high
current income. 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), asset-backed securities 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 (the market value of its assets per share) over the period:

--------------------------------------------------------
6/30/96 12/31/95 Change High Low
- --------------------------------------------------------------------------------
Stock Price $8.50 $8.125 4.62% $8.50 $8.00
- --------------------------------------------------------------------------------
Net Asset Value (NAV) $9.29 $9.27 0.22% $9.39 $9.16
- --------------------------------------------------------------------------------

The Fixed Income Markets

The domestic fixed income markets witnessed two profoundly different
environments during the past six months, providing an exciting and challenging
environment in which to manage the Trust. The Treasury market rally of 1995
continued through the middle of February 1996, as market demand for fixed income
securities remained strong due to a combination of moderate economic growth, low
absolute levels of inflation and two reductions of the Fed funds target rate.
The rally halted during mid-February, however, as data indicating accelerating
economic growth rekindled inflationary concerns. The strengthening of the
economy continued throughout the second quarter, leading market participants to
become more resolute in their belief that the Federal Reserve will tighten
monetary policy during the second half of 1996, which would result in rising
interest rates. These fears translated into a sharp rise in bond yields across
the Treasury yield curve, resulting in the fixed income markets rescinding much
of their 1995 gains.

Interest rate movements reflected the change in investor sentiment toward
fixed income securities. Interest rates across the Treasury yield curve fell
dramatically through mid-February, as evidenced by the decline in yield levels
on the 10-year Treasury. Continuing the bond market rally of 1995, the yield of
the 10-year Treasury fell to 5.52% on January 19, its lowest yield since October
1993. However, data released during February suggesting renewed economic vigor
placed pressure on bond prices, as the possibility of a stronger economy
dampened investor expectations that interest rates would continue to fall. These
fears translated into a sharp rise in bond yields across the Treasury yield
curve. The yield of the ten-year Treasury ended the semi-annual period at 6.71%,
a net increase of 114 basis points (1.14%) during the first half of 1996.

<PAGE>

The mortgage-backed securities (MBS) market outperformed Treasuries for the
period, as rising interest rates coupled with a reduction in prepayment risk
provided investors an opportunity to fundamentally reassess mortgages after
1995's Treasury market rally. Still, many investors remained on the sidelines,
convinced that even historically wide mortgage yield spreads offered inadequate
compensation for the perceived risks of owning mortgages. As a result of this
narrow participation, MBS performance in 1996 has been good but somewhat short
of expectations given the sharp rise in interest rates.

Corporate bond performance relative to Treasuries was hampered by a heavy
new net issue supply, which expanded above 1995 levels despite the rising
interest rate environment of 1996. However, the yield premium, or "spread",
offered by corporate bonds remained narrow throughout the period. Corporate
yield spreads are not expected to widen significantly, as a subsiding of
recessionary fears in response to the strengthening U.S. economy is expected to
support corporate bond prices.

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 December 31, 1995 asset
composition.

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The BlackRock 1999 Term Trust Inc.
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Composition June 30, 1996 December 31, 1995
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Corporate Bonds 47% 22%
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Stripped Mortgage-Backed Securities 11% 9%
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Asset-Backed Securities 8% 4%
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Mortgage Pass-Throughs 8% 24%
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Adjustable Rate Mortgages 7% 12%
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Agency Multiple Class Mortgage Pass-Throughs 7% 9%
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Non Agency Multiple Class Mortgage Pass-Throughs 6% 5%
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Municipal Securities 5% 4%
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U.S. Government Securities 1% 2%
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Commercial Mortgage-Backed Securities 0% 0%
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CMO Residuals 0% 1%
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Taxable Zero Coupon Bonds 0% 8%
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Rating % of Corporates
----------------------------------------
Credit Rating June 30, 1996 December 31, 1995
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AAA or equivalent 1% 0%
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AA or equivalent 9% 23%
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A or equivalent 64% 41%
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BBB or equivalent 26% 36%
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The Trust maintained its focus on the primary investment objective of
returning $10 per share to investors on or about its termination date. In
conjunction with this objective, the Trust has been reducing its holdings which
are subject to cash flow risk or which can extend beyond the Trust's scheduled
maturity date. BlackRock has been

3
<PAGE>

opportunistically selling bonds with these characteristics, or "tail risk", and
emphasized securities offering attractive yield spreads over Treasury
securities, cash flows prior to the Trust's termination date and fixed
maturities approximating the Trust's termination date. To that end, the Trust
further increased its allocation to investment grade corporate bonds, which now
comprise approximately 47% of portfolio assets. Corporate bonds allow the Trust
to both match the maturity date of the bond with the Trust's scheduled
termination date by providing a definite maturity value when they mature and a
more defined cash flow. The Trust also increased its exposure to asset-backed
securities (ABS), which are generally collateralized by auto or credit card
loans. ABS offer attractive yields relative to comparable duration securities in
addition to more predictable cash flows than mortgage-backed securities.

The increased corporate bond and asset-backed security positions were
accompanied by a corresponding decrease in securities which offer less
predictable income streams and maturity dates. Specifically, the Trust has sold
mortgage-backed securities such as agency pass-throughs and collateralized
mortgage-backed obligations, which have characteristics that are typically more
sensitive to interest rate movements than most fixed maturity securities. For
example, the maturity of a mortgage bond can extend if interest rates rise;
conversely, a sharp decline in interest rates can cause a mortgage bond to
prepay, which exposes the Trust to reinvestment risk in a lower interest rate
environment. Over the semi-annual period, this strategy has worked to the
Trust's benefit, as mortgages outperformed most sectors of the taxable fixed
income market. The Trust expects to continue its tail risk reduction strategy as
the Trust's maturity date approaches.

We look forward to continuing to manage the Trust to benefit from the
opportunities available to investors in the fixed income markets. BlackRock
remains confident in the Trust's ability to return its initial offering price at
its scheduled termination date. We thank you for your investment in The
BlackRock 1999 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,

Robert S. Kapito Michael P. Lustig
Vice Chairman and Portfolio Manager Vice President and Portfolio Manager
BlackRock Financial Management, Inc. BlackRock Financial Management, Inc.

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1Yield on Closing Stock Price is calculated by dividing the current annualized
distribution per share by the closing stock price per share.
2Distribution not constant and is subject to change.

<PAGE>

(LEFT COLUMN)

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The BlackRock 1999 Term Trust Inc.
Portfolio of Investments
June 30, 1996
(Unaudited)
- --------------------------------------------------------------------------------
Principal
Amount Value
Rating* (000) Description (Note 1)
- --------------------------------------------------------------------------------
LONG-TERM INVESTMENTS-145.3%
Mortgage Pass-Throughs-13.0%
Federal Home Loan Mortgage
Corporation,
$ 946(DD) 8.25%, 6/01/09 .......................... $ 972,117
9,281(DD) 9.50%, 2/01/02 - 3/01/02,
15 Year ............................... 9,747,432
Federal National Mortgage
Association,
1,260(DD) 7.516%, 7/01/99, Multifamily ............ 1,282,120
330(DD) 8.50%, 5/01/03 - 9/01/07,
15 Year ............................... 341,928
5,988(DD) 8.775%, 8/01/99, Multifamily ............ 6,270,682
3,085 9.00%, 6/01/22 .......................... 3,218,514
Government National Mortgage
Association,
2,452(DD) 7.00%, 12/20/23,
1 Year CMT (ARM) ...................... 2,486,697
1,823(DD) 7.125%, 4/20/25,
1 Year CMT (ARM) ...................... 1,853,055
------------
26,172,545
------------
Multiple Class Mortgage
Pass-Throughs-27.9%
CBA Mortgage Corporation,
AAA 3,000 Series 1993-C1, Class A-2,
12/25/03 .............................. 3,044,474
BBB 3,000 Series 1993-C1, Class D,
12/25/03 .............................. 2,970,587
Federal Home Loan Mortgage
Corporation, Multiclass
Mortgage Participation
Certificates,
3,204 Series 172, Class 172-H,
5/15/20 ............................... 3,239,917
6,439(DD) Series 1127, Class 1127-F,
3/15/06 ............................... 6,611,643
3,482(DD) Series 1234, Class 1234-H,
5/15/99, (ARM) ........................ 3,564,935
6,220(DD) Series 1329, Class 1329-SA,
8/15/99, (ARM) ........................ 6,313,509
517 Series 1330, Class 1330-I,
9/15/99, (ARM) ........................ 513,342
144 Series 1330, Class 1330-M,
9/15/99, (ARM) ........................ 1,007,077
593 Series 1352, Class 1352-G,
9/15/97, (ARM) ........................ 584,424
492 Series 1444, Class 1444-K,
1/15/00, (ARM) ........................ 430,714
3,000 Series 1505, Class 1505-ID,
9/15/15, (I) .......................... 427,500

(RIGHT COLUMN)

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Principal
Amount Value
Rating* (000) Description (Note 1)
- --------------------------------------------------------------------------------
Federal National Mortgage
Association, REMIC
Pass-Through Certificates,
$ 188 Series G93- 9, Class SB,
7/25/22, (ARM) ........................ $ 169,227
4,530 Trust G93-33, Class P,
9/25/14, (I) .......................... 609,731
7,370(DD) Trust 269, Class 1,
8/01/22 ............................... 7,713,147
119 Trust 1989-91, Class 91-E,
6/25/15 ............................... 119,961
391 Trust 1991-146, Class 146-SB,
10/25/06, (ARM) ....................... 401,648
2,052(DD) Trust 1992-3, Class 3-S,
1/25/99, (ARM) ........................ 2,316,398
888 Trust 1992-106, Class 106-S,
6/25/99, (ARM) ........................ 939,245
469 Trust 1993-193, Class 193-PC,
9/25/23 ............................... 416,706
26,883 Trust 1993-199, Class 199-SC,
10/25/14, (ARM) ....................... 169,095
19,804 Trust 1993-226, Class 226-SB,
5/25/19 ............................... 594,135
2,137 Trust 1994-44, Class 44-T,
2/25/08, (I) .......................... 40,072
5,893 Government National Mortgage
Association, Trust 1994-1,
Class 1-PL, 6/16/24, (I) ................ 1,021,518
AAA 5,510 Merrill Lynch Trust, Trust XXXVI,
Class C, 10/01/17 ....................... 5,714,362
AAA 3,233 Residential Funding Mortgage
Securities, Series 1992-S1,
Class A6, 1/25/22 ....................... 3,313,963
BBB 3,818 Wilshire Liquidating Trust 2001,
1996-1, Class 4, 9/01/01 ................ 3,723,146
------------
55,970,476
------------

Corporate Bonds-68.2%
Finance & Banking-28.6%
A+ 3,000 American Express,
11.625%, 12/12/00 ....................... 3,244,800
Aa3 3,350 Associates Corporation North
America, 6.75%, 10/15/99 ................ 3,357,705
A2 4,200 Citicorp, 9.75%, 8/01/99 .................. 4,551,834
AAA 2,000 General Electric Capital
Corporation, 8.125%, 2/01/99 ............ 2,076,702
A3 3,000 Hartford National Corporation,
9.85%, 6/01/99 .......................... 3,225,870
A2 3,000 Household Finance Corporation,
6.65%, 5/26/98 .......................... 3,006,853

See Notes to Financial Statements.

<PAGE>

(LEFT COLUMN)

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Principal
Amount Value
Rating* (000) Description (Note 1)
- --------------------------------------------------------------------------------
Finance & Banking-(con't)
A2 $ 4,000 International Lease Finance
Corporation, 6.30%, 11/01/99 ............ $ 3,943,770
Baa3 2,000 Meditrust, 7.25%, 8/16/99 ................. 1,982,379
A1 3,000 Merrill Lynch & Company
Incorporated, 7.75%, 3/01/99 ............ 3,079,159
A1 2,000 Morgan Stanley Group
Incorporated, 5.625%, 3/01/99 ........... 1,949,760
Baa3 2,000 New American Capital Inc.,
Series C, 6.91016%, 4/12/00 ............. 2,010,000
Aa3 3,000 Norwest Corporation,
7.70%, 11/15/97 ......................... 3,055,980
PaineWebber Group Incorporated,
Baa1 3,500 6.31%, 7/22/99 .......................... 3,426,126
Baa1 2,189 7.00%, 3/01/00 .......................... 2,177,897
Baa1 2,000 Salomon Inc.,
7.43%, 12/30/98 ......................... 2,025,287
A2 3,000 Sears Overseas Finance,
Zero Coupon, 7/12/98 .................... 2,630,634
A2 4,000 Security Pacific Corporation,
9.75%, 5/15/99 .......................... 4,313,500
A3 5,000 Shawmut National Corporation,
8.625%, 12/15/99 ........................ 5,252,300
Smith Barney Holdings Incorporated,
A2 500 6.00%, 3/15/97 .......................... 499,445
A2 1,500 7.875%, 10/01/99 ........................ 1,547,490
------------
57,357,491
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Corporate Bonds-
Industrials-30.1%
A 4,400 Alco Capital Resource
Incorporated, 6.83%, 5/10/99 ............ 4,400,046
A1 1,895 Anheuser Busch Cos. Incorporated,
8.75%, 12/01/99 ......................... 2,009,742
A1 5,000(DD) Bass America Incorporated,
6.75%, 8/01/99 .......................... 5,006,450
Aa2 2,000 California Petroleum Transport
Corporation, 7.30%, 4/01/99 ............. 2,033,936
Ford Motor Credit Company,
A1 1,000 8.00%, 1/15/99 .......................... 1,032,830
A1 5,000 8.40%, 3/26/99 .......................... 5,222,000
A3 5,000 General Motors Acceptance Corp.,
6.125%, 9/18/98 ......................... 4,946,618
A2 1,885 Kern River Funding, Series A
144A, 6.42%, 3/31/01 .................... 1,856,622
Baa2 3,000 MCN Investment Corporation,
5.84%, 2/01/99 .......................... 2,937,131
Baa2 4,000 Nabisco Brands Incorporated,
8.30%, 4/15/99 .......................... 4,134,480
A2 2,000 National Fuel Gas Company,
5.58%, 3/01/99 .......................... 1,945,520
Baa3 3,000 News America Holdings
Incorporated, 9.125%,
10/15/99 ................................ 3,190,519
Baa3 2,000 Occidental Petroleum Corporation,
6.08%, 11/26/99 ......................... 1,948,540
Ba1 2,750 Pulte Home Corporation,
10.125%, 7/15/99 ........................ 2,953,665

(RIGHT COLUMN)

Ba1 $ 3,600 Tci Communications, 7.25%,
6/15/99 ................................. $ 3,608,388
A1 3,000 Texaco Capital Incorporated,
9.00%, 12/15/99 ......................... 3,212,070
A3 1,000 Textron Financial Corporation,
7.125%, 10/05/99 ........................ 1,009,345
A 3,000 TTX Company, 6.28%, 6/28/99 ............... 2,961,014
Baa2 2,500 Union Oil Company, 8.40%,
1/15/99 ................................. 2,596,063
A1 4,000 Walt Disney Corporation, 7.125%,
10/20/99 ................................ 3,389,044
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60,394,023
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Corporate Bonds-
Utilities-7.3%
A1 4,750 Alabama Power Company,
6.375%, 8/01/99 ......................... 4,713,663
A2 4,000 Atlanta Gas Light Company,
7.30%, 12/10/99 ......................... 4,082,132
Aa2 2,650 Duke Power Company,
8.00%, 11/01/99 ......................... 2,755,182
A3 3,040 Puget Sound Power & Light
Company, 7.875%, 10/01/97 ............... 3,095,380
------------
14,646,357
------------
Corporate Bonds-
Yankees-2.2%
A3 1,272 Nova Corporation of Alberta,
7.25%, 7/06/99 .......................... 1,284,936
Baa3 3,000 Republic of Colombia,
8.75%, 10/06/99 ......................... 3,087,254
------------
4,372,190
------------
Asset-Backed Securities-11.4%
AAA 3,267(DD) Banc One Auto Grantor Trust,
Series 1996-A, Class A,
6.10%, 10/15/02 ......................... 3,265,452
AAA 3,886(DD) Daimler Benz Auto Grantor Trust,
Series 1995-A, Class A,
5.85%, 5/15/02 .......................... 3,870,132
AAA 5,000(DD) Dayton Hudson Credit Card Trust,
Series 1995-1, Class A,
6.10%, 2/25/02 .......................... 4,964,844
AAA 3,979(DD) Ford Credit Grantor Trust,
Series 1995-B, Class A,
5.90%, 10/15/00 ......................... 3,954,876
BBB 6,732 Telmex Trust 96, 5.9375%, 4/1/97 .......... 6,732,450
------------
22,787,754
------------
Stripped Mortgage-Backed
Securities-15.3%
Federal Home Loan Mortgage
Corporation, Multiclass
Mortgage Participation
Certificates,
56(DD) Series G-2, Class M,
7/25/18 (I/O) ......................... 1,078,114
31 Series 201, Class 201-C,
2/15/23 (I/O) ......................... 866,333

See Notes to Financial Statements.

6
<PAGE>

(LEFT COLUMN)

Stripped Mortgage-Backed
Securities-con't
Federal Home Loan Mortgage
Corporation, Multiclass
Mortgage Participation
Certificates,
$ 45(DD) Series 1105, Class 1105-D,
3/15/16 (I/O) ......................... $ 1,066,114
30 Series 1195, Class 1195-H,
3/15/05 (I/O) ......................... 341,286
2,723(DD) Series 1359, Class 1359-C,
9/15/99 (P/O) ......................... 2,334,637
6,334 Series 1440, Class 1440-PK,
8/15/18 (I/O) ......................... 771,944
6,482 Series 1473, Class 1473- JA,
2/15/05 (I/O) ......................... 485,740
Federal National Mortgage
Association, REMIC
Pass-Through Certificates,
12,000(DD) Trust 1993-152, Class 152-C,
6/25/22 (P/O) ......................... 10,380,000
2,196(DD) Trust 225, Class 1,
2/01/23 (P/O) ......................... 1,579,990
48 Trust 1990-119, Class
119-G, 10/25/20 (I/O) ................. 897,968
70(DD) Trust 1991-7, Class 7-K,
2/25/21 (I/O) ......................... 2,065,089
3,248(DD) Trust 1992-59, Class 59-A,
8/25/06 (P/O) ......................... 2,886,626
8,429 Trust 1992-203, Class 203-JA,
6/25/05 (I/O) ......................... 364,455
3,128(DD) Trust 1993-236, Class 236-C,
10/25/23 (P/O) ........................ 2,205,055
8,444 Trust 1994-15, Class 15-N,
9/25/15 (I/O) ......................... 643,822
AAA 10,000(DD) Merrill Lynch Trust, Trust XLIII,
Class F, 8/27/15 (I/O) .................. 2,326,750
AAA 42,574 Sears Mortgage Corporation,
Series 1992-7, Class X,
5/25/22 (I/O) ........................... 459,006
------------
30,752,929
------------
Collateralized Mortgage Obligation
Residuals**-0.0%
12 Federal Home Loan Mortgage
Corporation, Series 1115,
Class 1115-R, 8/15/06 ................... 80,000
------------
U.S Government Securities-1.7%
United States Treasury Notes,
2,950 5.00%, 2/15/99 .......................... 2,861,972
550 6.375%, 5/15/99 ......................... 551,204
------------
3,413,176
------------

(RIGHT COLUMN)

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*Using the higher of Standard & Poor's or Moody's rating.
**Illiquid securities representing 0.03% of portfolio assets.
(D)(Partial) principal amount pledged as collateral for reverse repurchase
agreements.
(DD)Entire principal amount pledged as collateral for reverse repurchase
agreements.
@(Partial) principal amount pledged as collateral for futures transactions.

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Key to Abbreviations
ARM -Adjustable Rate Mortgage
CMO -Collateralized Mortgage Obligation
I -Denotes CMO with interest only characteristics
I/O -Interest Only
P -Denotes CMO with principal only characteristics.
P/O -Principal Only
REMIC -Real Estate Mortgage Investment Conduit
- --------------------------------------------------------------------------------

See Notes to Financial Statements.

<PAGE>

(Left Column)

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The BlackRock 1999 Term Trust Inc.
Statement of Assets and Liabilities
June 30, 1996
(Unaudited)
- --------------------------------------------------------------------------------

Assets
Investments, at value (cost $296,431,043) (Note 1) .............. $292,797,434
Cash ............................................................ 3,157,520
Interest receivable ............................................. 3,470,467
Receivable for investments sold ................................. 824,327
Deferred organization expenses and other assets ................. 1,331
------------
300,251,079
------------
Liabilities
Reverse repurchase agreements (Note 4) .......................... 95,878,013
Payable for investments purchased ............................... 3,138,958
Dividends payable ............................................... 131,584
Advisory fee payable (Note 2) ................................... 65,630
Administration fee payable (Note 2) ............................. 16,408
Other accrued expenses .......................................... 339,429
------------
99,570,022
------------

Net Assets ...................................................... $200,681,057
============
Net assets were comprised of:
Common stock, at par (Note 5) ................................. $ 216,106
Paid-in capital in excess of par .............................. 203,028,542
------------
203,244,648
Undistributed net investment income ........................... 7,895,449
Accumulated net realized losses ............................... (6,825,431)
Net unrealized depreciation ................................... (3,633,609)
------------
Net assets, June 30, 1996 ..................................... $200,681,057
============
Net asset value per share:
($200,681,057 / 21,610,583 shares of
common stock issued and outstanding) .......................... $9.29
=====

(Right Column)

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The BlackRock 1999 Term Trust Inc.
Statement of Operations
Six Months Ended June 30, 1996
(Unaudited)
- --------------------------------------------------------------------------------

Net Investment Income
Income
Interest (net of premium amortization of
$3,670,386 and net of interest expense of
$2,638,526) .................................................. $ 7,378,923
-----------
Operating expenses
Investment advisory ............................................ 400,464
Administration ................................................. 100,116
Custodian ...................................................... 45,000
Directors ...................................................... 27,000
Reports to shareholders ........................................ 60,000
Transfer agent ................................................. 5,000
Audit .......................................................... 9,000
Miscellaneous .................................................. 55,099
-----------
Total operating expenses ..................................... 701,679
-----------
Net investment income ............................................ 6,677,244
-----------
Realized and Unrealized Gain (Loss) on
Investments (Note 3)
Net realized gain (loss) on:
Investments .................................................... 2,048,447
Futures ........................................................ (586,723)
Short sales .................................................... (1,377,344)
-----------
84,380
-----------
Net change in unrealized appreciation
(depreciation) on:
Investments .................................................... (3,436,949)
Futures ........................................................ (641,302)
Short sales .................................................... 1,464,524
-----------
(2,613,727)
-----------
Net loss on investments ........................................ (2,529,347)
-----------
Net Increase In Net Assets Resulting
from Operations ................................................ $ 4,147,897
===========

See Notes to Financial Statements.

<PAGE>

Left Column

- --------------------------------------------------------------------------------
The BlackRock 1999 Term Trust Inc.
Statement of Cash Flows
Six Months Ended June 30, 1996
(Unaudited)
- --------------------------------------------------------------------------------

Increase (Decrease) in Cash
Cash flows provided by operating activities:
Interest received ............................................. $13,926,470
Operating expenses paid and excise taxes ...................... (678,198)
Interest expense paid ......................................... (3,097,099)
Sale of short-term portfolio
investments, net ............................................ 304,766
Purchase of long-term portfolio investments ................... (262,180,265)
Proceeds from disposition of long-term
portfolio investments ....................................... 257,338,263
Variation margin on futures ................................... (1,111,068)
Other ......................................................... 91,777
-----------
Net cash flows provided by operating activities ............... 4,594,646
-----------
Cash flows used for financing activities:
Increase in reverse repurchase agreements ..................... 3,016,888
Cash dividends paid ........................................... (4,458,458)
-----------
Net cash flows used for financing activities .................. (1,441,570)
-----------
Net increase in cash ............................................ 3,153,076
Cash at beginning of period ..................................... 4,444
-----------
Cash at end of period ........................................... $ 3,157,520
===========

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 ............................................... $ 4,147,897
-----------
Increase in investments ......................................... (1,388,843)
Net realized gain ............................................... (84,380)
Decrease in unrealized appreciation ............................. 2,613,727
Decrease in interest receivable ................................. 238,635
Increase in receivable for investments sold ..................... (824,327)
Decrease in deposits with brokers for short sales ............... 7,215,000
Decrease in variation margin .................................... 116,955
Decrease in other assets ........................................ 68,296
Decrease in securities sold short ............................... (7,212,180)
Increase in payable for investments purchased ................... 138,958
Decrease in interest payable .................................... (458,573)
Increase in accrued expenses and other liabilities .............. 23,481
-----------
Total adjustments ............................................... 446,749
-----------
Net cash flows provided by operating activities ................. 4,594,646
===========

Right Column

- --------------------------------------------------------------------------------
The BlackRock 1999 Term Trust Inc.
Statements of Changes
in Net Assets
(Unaudited)
- --------------------------------------------------------------------------------

Six Months
Ended Year Ended
June 30, December 31,
1996 1995
----------- ------------
Increase (Decrease)
in Net Assets

Operations:

Net investment income ........................ $ 6,677,244 $ 13,722,658

Net realized gain (loss) on
investments, futures and
short sales ................................ 84,380 (158,034)

Net change in unrealized
appreciation
(depreciation) on
investments, futures and
short sales ................................ (2,613,727) 16,715,341
------------ ------------
Net increase in net assets
resulting from operations .................. 4,147,897 30,279,965

Dividends from net investment
income ....................................... (3,779,645) (11,886,169)
------------ ------------
Total increase ................................. 368,252 18,393,796

Net Assets

Beginning of period ............................ 200,312,805 181,919,009
------------ ------------
End of period .................................. $200,681,057 $200,312,805
============ ============

See Notes to Financial Statements.

9
<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,
PER SHARE OPERATING PERFORMANCE: 1996 1995 1994 1993 1992
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period .......................... $ 9.27 $ 8.42 $ 9.26 $ 9.40 $ 9.45
-------- -------- -------- -------- --------
Net investment income (net of $.12, $.33, $.15, $.01 and
$.00, respectively, of interest expense) .................. .31 .63 .72 .73 .01
Net realized and unrealized gain (loss) on investments ...... (.12) .77 (.93) (.19) (.02)
-------- -------- -------- -------- --------
Net increase (decrease) from investment operations ............ .19 1.40 (.21) .54 (.01)
-------- -------- -------- -------- --------
Dividends from net investment income .......................... (.17) (.55) (.63) (.68) -
-------- -------- -------- -------- --------
Capital charge with respect to issuance of shares ............. - - - - (.04)
-------- -------- -------- --------
Net asset value, end of period** .............................. $ 9.29 $ 9.27 $ 8.42 $ 9.26 $ 9.40#
======== ======== ======== ======== =========
Market value, end of period** ................................. $ 8.50 $ 8.13 $ 7.50 $ 9.50 $ 10.00
======== ======== ======== ========
TOTAL INVESTMENT RETURN(D): ................................... 7.15% 15.25% (14.88%) 1.74% 5.82%

RATIOS TO AVERAGE NET ASSETS:
Operating expenses@ ........................................... .70%(DD) .74% 0.71% 0.79% 0.91%(DD)
Net investment income ......................................... 6.71%(DD) 7.12% 8.17% 7.74% 3.35%(DD)

SUPPLEMENTAL DATA:
Average net assets (in thousands) ............................. $200,214 $192,717 $189,828 $202,158 $178,963
Portfolio turnover ............................................ 79% 165% 109% 62% 0%
Net assets, end of period (in thousands) ...................... $200,681 $200,313 $181,919 $200,126 $178,629
Reverse repurchase agreements outstanding, end of
period (in thousands) ....................................... $ 95,878 $ 92,861 $ 79,443 $ 47,100 -
Asset coverage(DDD) ........................................... $ 3,093 $ 3,157 $ 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 operating expenses, including interest expense, to average
net assets were 3.35%, 4.40%, 2.46%, 1.36%, and 0.0% for the periods
indicated above, respectively. The ratios of operating expenses, including
interest expense and excise tax, to average net assets were 3.35%, 4.47%,
2.49%, 1.36%, 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.
(DD)Annualized.
(DDD)Per $1,000 of reverse repurchase agreement outstanding.
</FN>
</TABLE>

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.

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 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.

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

Right Column

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.

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.

Option selling and purchasing is used by the Trust to effectively hedge more
volatile positions so that changes in interest rates do not change the duration
of the portfolio unexpectedly. In general, the Trust uses options to hedge a

<PAGE>

Left Column

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.

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. 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

Right Column

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. 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

<PAGE>

Left Column

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, 1996.

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 its 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.

Note 2. Agreements

The Trust has an Investment Advisory Agreement with BlackRock Financial
Management, Inc. (the "Adviser") a wholly-owned corporate subsidiary of PNC
Asset Management Group, Inc., the holding company for PNC's asset management
business, and an Administration Agreement with 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.

Right Column

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.

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,
1996 aggregated $262,319,223 and $244,143,956, 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, 1996, the Trust held
0.03% of its portfolio in illiquid securities.

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. It is possible under
certain circumstances PNC Mortgage Securities Corp.or its affiliates could have
interests that are in conflict with the holders of these mortgage backed
securities and such holders could have rights against PNC Mortgage Securities
Corp. or its affiliates.

The federal income tax basis of the Trust's investments at June 30, 1996 was
substantially the same as the basis for financial reporting and, accordingly,
net unrealizeddepreciation for federal income tax purposes was $3,633,609 (gross
unrealized appreciation-$1,708,382; gross unrealized depreciation-$5,341,991).

For federal income tax purposes, the Trust had a capital loss carryforward
at December 31, 1995 of approximately $6,269,000 of which $4,284,000 expires in
2001 and $1,985,000 expires in 2002. Such carryforward amount is after
realization of approximately $574,000 in taxable gains recognized during the
year ended December 31, 1995. Accordingly, no capital gains distribution is
expected to be paid to shareholders until net gains have been realized in excess
of such amounts.

<PAGE>

Left 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 the value of which at least equals the principal amount
of the reverse repurchase transaction, including accrued interest.

The average daily balance of reverse repurchase agreements outstanding
during the six months ended June 30, 1996 was approximately $95,231,000 at a
weighted average interest rate of approximately 5.57%. The maximum amount of
reverse repurchase agreements outstanding at any month-end during the six months
ended June 30, 1996 was $120,413,969 as of January 31, 1996 which was 29% of
total assets. The amount of reverse repurchase agreements outstanding at June
30, 1996 was $95,878,013, which was 32% of total assets.

Dollar Rolls: The Trust may enter into dollar rolls in which the Trust sells
securities for delivery in the current month and simultaneously contracts to
repurchase substantially

Right Column

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 dollar rolls during the six months ended June
30, 1996.

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, 1996, the Adviser owned 10,583 shares.

Note 6. Dividends

On July 1, 1996 the Board of Directors of the Trust declared a dividend from
undistributed earnings of $0.0333 per share payable July 31, 1996 to
shareholders of record on July 15, 1996.

Note 7. Subsequent
Event

On July 19, 1996 the Trust transferred approximately 71% of its total assets to
a 100% owned regulated investment company subsidiary called BNN Subsidiary, Inc.

Note 8. Quarterly Data

- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and
unrealized Net increase (decrease)
gains (losses) in net assets Dividends Period
Net Investment on investments, resulting from and and
Quarterly Total Income short sales and futures operations distributions Share price net assets
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,
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 $97/8 $81/8 $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 81/8 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 85/8 75/8 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 81/8 71/8 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 83/8 73/8 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 77/8 8.98

July 1,
1995 to
September 30,
1995 3,679,565 3,368,830 0.15 1,661,736 0.08 5,030,566 0.23 2,431,144 0.11 81/4 73/4 9.10

October 1,
1995 to
December 31,
1995 4,669,971 4,121,832 0.19 2,809,832 0.13 6,931,66 0.32 3,241,562 0.15 83/8 8 9.27

January 1,
1996 to
March 31,
1996 5,287,663 3,471,143 0.16 (2,199,782) (0.10) 1,271,361 0.06 1,620,786 0.08 81/2 8 9.25

April 1,
1996 to
June 30,
1996 4,729,785 3,206,101 0.15 (329,565) (0.02) 2,876,536 0.13 2,158,859 0.09 81/2 81/8 9.29
- ------------------------------------------------------------------------------------------------------------------------------------
</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.

- --------------------------------------------------------------------------------
ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------

There have been no material changes in the investment objectives 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 8, 1996 to vote on the
following matters:

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

Director Class Term Expiring
-------- ----- ---- --------
Andrew F. Brimmer ...... III 3 years 1999
Kent Dixon ............. III 3 years 1999
Laurence D. Fink ....... III 3 years 1999

Directors whose term of office continues beyond this meeting are Richard
E. Cavanagh, Frank J. Fabozzi, James Grosfeld, James Clayburn LaForce,
Jr. and Ralph L. Schlosstein.

(2) To ratify the selection of Deloitte & Touche LLP as independent public
accountants of the Trust for the fiscal year ending December31, 1996.

(3) To modify the investment restriction prohibiting investing for the
purpose of exercising control over the management of a company.

Shareholders elected the three Directors, ratified the selection of Deloitte &
Touche LLP and approved the modification of the investment restriction
prohibiting investing for the purpose of exercising control over the management
of a company. The results of the voting was as follows:

Votes for Votes Against Abstentions
--------- ------------- -----------
<S> <C> <C> <C>

Andrew F. Brimmer .............................. 10,895,844 - 457,249
Kent Dixon ..................................... 10,899,293 - 453,800
Laurence D. Fink ............................... 10,899,256 - 453,837
Ratification of Deloitte & Touche LLP .......... 10,855,440 109,841 387,812
Investment restriction ......................... 8,592,005 385,638 774,894

</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
approximately $41 billion of assets across the government, mortgage, corporate
and municipal sectors. These assets are managed on behalf of institutional and
individual investors in 21 closed-end funds traded either on the New York Stock
Exchange or American Stock Exchange, 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,
one of the nation's largest banking organizations.

What Can the Trust Invest In?

The Trust may invest in all fixed income securities rated investment grade or
higher ("AAA", "AA", "A" or "BBB"). Examples of securities in which the Trust
may invest include U.S. government and government agency securities, zero coupon
securities, mortgage-backed securities, corporate debt securities, asset-backed
securities, U.S. dollar-denominated foreign debt securities and municipal
securities. Under current market conditions, BlackRock expects that the primary
investments of the Trust will be U.S. government securities, securities backed
by government agencies (such as mortgage-backed securities) 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, 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

<PAGE>

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 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, State Street
Bank & Trust Company. Investors who wish to hold shares in a brokerage account
should check with their financial advisor to determine whether their brokerage
firm offers dividend reinvestment services.

Leverage Considerations in a Term Trust

Under current market conditions, leverage increases the income earned by the
Trust. The Trust employs leverage primarily through the 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
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 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
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
marketprice.

<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
Agreements:

In a reverse repurchase agreement, the Trust 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
Securities:

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
- --------------------------------------------------------------------------------
Taxable Trusts
- --------------------------------------------------------------------------------
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>

Tax-Exempt Trusts
- --------------------------------------------------------------------------------
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 approximately $41 billion of
assets across the government, mortgage, corporate and municipal sectors. These
assets are managed on behalf of institutional and individual investors in 21
closed-end funds traded either on the New York Stock Exchange or American Stock
Exchange, 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
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 & 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, 1996 were not audited and, accordingly,
no opinion is expressed on them.

This report is for shareholder information.
This is not a prospectus intended for use in the
purchase or sale of any securities.

The BlackRock 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, 1996