BLACKROCK 1999 TERM TRUST INC, N-30D, 1998-08-28

BLACKROCK 1999 TERM TRUST INC
N-30D, 1998-08-28

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

July 31, 1998

Dear Shareholder:

Domestic bonds provided investors with modest total returns during the
past six months, as interest rates generally fell. Supporting the bond market
was favorable inflation news and the belief that the Federal Reserve is unlikely
to raise short-term interest rates in the immediate future.

U.S. economic growth has slowed of late after a robust first quarter of
1998. We expect the fallout from the Asian fiscal crisis to quash any
significant rebound in U.S. growth for the remainder of the year. While we
expect that interest rates will be fairly stable in the near-term, our
longer-term outlook for the bond market remains optimistic, based on the
fundamentally favorable backdrop of low inflation, a currently high level of
real yields, and declining Treasury borrowing.

As you may know, the five investment management firms that comprised the
PNC Asset Management Group have consolidated under BlackRock, resulting in
BlackRock Inc., a $119 billion money management firm. We look forward to using
our global investment management expertise to present exciting investment
opportunities to closed-end fund shareholders in the future.

This report contains comments from your Trust's managers regarding the
markets and portfolio in addition to the Trust's financial statements and a
detailed portfolio listing. We thank you for your continued investment in the
Trust.

Sincerely,

/s/ Laurence D. Fink /s/ Ralph L. Schlosstein
- -------------------- ------------------------
Laurence D. Fink Ralph L. Schlosstein
Chairman President

<PAGE>

July 31, 1998

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, 1998. We would
like to take this opportunity to review the Trust's stock price and net asset
value (NAV) performance, summarize market developments and discuss recent
portfolio management activity.

The Trust is a diversified, actively managed closed-end bond fund whose
shares are traded on the 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. Although there can be no guarantee, BlackRock is confident that
the Trust can achieve its investment objectives. The Trust seeks these
objectives by investing in investment grade fixed income securities, including
corporate debt securities, mortgage-backed securities backed by U.S. Government
agencies (such as Fannie Mae, Freddie Mac or Ginnie Mae), asset-backed
securities and commercial mortgage-backed securities. All of the Trust's assets
must be rated at least "BBB" by Standard & Poor's or "Baa" by Moody's at time of
purchase or be issued or guaranteed by the U.S. Government or its agencies.

The table below summarizes the performance of the Trust's stock price and
NAV (the market value of its assets per share) over the period:

<TABLE>
<CAPTION>
-------------------------------------------------------
6/30/98 12/31/97 CHANGE HIGH LOW
<S> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------
STOCK PRICE $9.5625 $9.3750 2.00% $9.6250 $9.3750
- --------------------------------------------------------------------------------------------
NET ASSET VALUE (NAV) $9.97 $9.88 0.09% $9.97 $9.88
- --------------------------------------------------------------------------------------------
5-YEAR U.S. TREASURY NOTE 5.47% 5.71% (0.24%) 5.79% 5.21%
- --------------------------------------------------------------------------------------------
</TABLE>

THE FIXED INCOME MARKETS

After an extremely strong first quarter of 1998, U.S. economic growth
slowed during the past three months. Despite the strong economic growth of the
past year, inflation stayed surprisingly subdued. One explanation for the
absence of inflation in the U.S. economy stems from the aftermath of the Asian
financial crisis. U.S. exports to Asia have slowed, while the strength of the
dollar caused cheap Asian imports to flood the U.S. market and exert downward
price pressure on domestic goods.

Yields of U.S. Treasury securities have remained in a fairly narrow range
during the period. For example, the yield of the 10-Year Treasury posted a net
decline of 29 basis points (0.29%), beginning 1998 at 5.74% and closing on June
30, 1998 at 5.45%. The past six months represented a continuation of strong
Treasury performance, which has been due to moderating economic growth, low
inflation and a "flight to quality" from investors seeking a safe haven in U.S.
Treasury securities. Continued expectations that the Asian crisis will slow
economic growth and that the Fed will adopt an easing bias provided additional
support to the bond market. With Treasury supply waning due to a surplus in the
federal budget and an increased foreign demand for Treasuries due to their U.S.
government backing and relatively attractive yields, we anticipate a positive
environment for Treasuries for the balance of 1998.

<PAGE>

In light of declining interest rates and faster prepayment speeds during
the period, mortgages modestly underperformed the broader investment grade bond
market. As measured by the LEHMAN BROTHERS MORTGAGE INDEX, mortgages posted a
3.37% total return versus 3.92% for the LEHMAN BROTHERS AGGREGATE INDEX.
Mortgage rates fell below the critical 7% threshold for the first time since
January 1994, causing concerns that increased refinancing activity would
negatively impact the performance of mortgage securities. Accordingly, lower
coupon securities generally outperformed more prepayment-sensitive higher-coupon
issues. The financial turmoil in Asia caused a decline in perceived corporate
bond credit quality ratings and as a result corporate bonds underperformed
Treasuries during both the first and second quarters. Lower interest rates
brought a flood of new corporate supply during the first quarter of 1998,
contributing to the modest performance of corporates.

THE TRUST'S PORTFOLIO AND INVESTMENT STRATEGY

BlackRock actively manages the Trust's portfolio holdings consistent with
BlackRock's overall market outlook and the Trust's investment objectives. The
following chart compares the Trust's current and December 31, 1997 asset
composition.

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------
THE BLACKROCK 1999 TERM TRUST INC.
------------------------------------------------------------------------------------------
COMPOSITION JUNE 30, 1998 DECEMBER 31, 1997
------------------------------------------------------------------------------------------
<S> <C> <C>
Corporate Bonds 50% 45%
------------------------------------------------------------------------------------------
Municipal Securities 10% 8%
------------------------------------------------------------------------------------------
Agency Multiple Class Mortgage Pass-Throughs 8% 7%
------------------------------------------------------------------------------------------
Asset-Backed Securities 5% 8%
------------------------------------------------------------------------------------------
Adjustable Rate Mortgages 6% 0%
------------------------------------------------------------------------------------------
Principal Only Mortgage-Backed Securities 5% 9%
------------------------------------------------------------------------------------------
Mortgage Pass-Throughs 4% 3%
------------------------------------------------------------------------------------------
Interest Only Mortgage-Backed Securities 4% 4%
------------------------------------------------------------------------------------------
U.S. Government Securities 4% 6%
------------------------------------------------------------------------------------------
CMO Residuals 3% 1%
------------------------------------------------------------------------------------------
Non Agency Multiple Class Mortgage Pass-Throughs 1% 4%
------------------------------------------------------------------------------------------
Inverse Floating Rate Mortgages 0% 4%
------------------------------------------------------------------------------------------
Certificate of Deposit 0% 1%
------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------
RATING % OF CORPORATES
---------------------------------------
CREDIT RATING JUNE 30, 1998 DECEMBER 31, 1997
------------------------------------------------------------------------------------------
<S> <C> <C>
AA or equivalent 6% 6%
------------------------------------------------------------------------------------------
A or equivalent 60% 67%
------------------------------------------------------------------------------------------
BBB or equivalent 34% 27%
------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

In accordance with the Trust's primary investment objective of returning
the initial offer price upon maturity, the Trust's portfolio management activity
focused on adding securities which offered both attractive yield spreads over
Treasury securities and a maturity date matching the Trust's termination date of
December 31, 1999. Additionally, the Trust has been active in reducing positions
in bonds which have maturity dates or potential cash flows after the Trust's
termination date. The Trust added to its investment grade corporate bond and
municipal security positions, both of which offer defined cash flows and
maturity dates. Additionally, the Trust purchased short maturity adjustable rate
mortgages (ARMs) which offered good value in the short duration sector. To
finance these purchases, the Trust selectively sold select mortgage pass-through
securities, as their maturities may extend past the Trust's termination date in
a rising interest rate environment.

We look forward to managing the Trust to benefit from the opportunities
available in the fixed income markets and to meet its investment objectives. 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,

/s/ Robert S. Kapito /s/ Michael P. Lustig
- -------------------- ---------------------
Robert S. Kapito Michael P. Lustig
Vice Chairman and Portfolio Manager Director and Portfolio Manager
BlackRock Financial Management, Inc. BlackRock Financial Management, Inc.

- --------------------------------------------------------------------------------
THE BLACKROCK 1999 TERM TRUST INC.
- --------------------------------------------------------------------------------
Symbol on New York Stock Exchange: BNN
- --------------------------------------------------------------------------------
Initial Offering Date: December 23, 1992
- --------------------------------------------------------------------------------
Closing Stock Price as of 6/30/98: $9.563
- --------------------------------------------------------------------------------
Net Asset Value as of 6/30/98: $9.97
- --------------------------------------------------------------------------------
Yield on Closing Stock Price as of 6/30/98 (9.563)1: 4.18%
- --------------------------------------------------------------------------------
Current Monthly Distribution per Share2: $0.0333
- --------------------------------------------------------------------------------
Current Annualized Distribution per Share2: $0.40
- --------------------------------------------------------------------------------

- ------------
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.

4
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK 1999 TERM TRUST INC.
PORTFOLIO OF INVESTMENTS
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
RATING* (000) DESCRIPTION (NOTE 1)
- --------------------------------------------------------------------------------
MORTGAGE PASS-THROUGHS--7.1%
Federal Home Loan Mortgage Corp.,
$5,344 5.50%, 9/01/99,
5 year Multifamily ....................... $ 5,333,368
1,450 6.54%, 12/01/99,
Multifamily (ARM) ......................... 1,447,281
2,525 Federal Housing Administration,
Massachusetts Hsg. Fin. Agcy.,
Series C, 6.85%, 4/01/19 ................... 2,519,091
5,869 Federal National Mortgage Association,
8.775%, 8/01/99, Multifamily ............... 5,920,151
-----------
15,219,891
-----------
MULTIPLE CLASS MORTGAGE
PASS-THROUGHS--17.0%
AAA 562 Citicorp Mortgage Securities, Inc.,
Series 1993-11, Class A-1,
1/25/06 .................................... 560,829
AAA 1,940 Countrywide Funding Corp.,
Series 1995-4, Class A-3,
9/25/25 .................................... 1,936,076
Federal Home Loan Mortgage Corp.,
Multiclass Mortgage
Participation Certificates,
1,374+ Series 1025, Class 1025-F, 6/15/05 ........ 1,374,085
3,349+ Series 1234, Class 1234-H,
5/15/99 (ARM) ............................. 3,387,667
3,206+ Series 1296, Class 1296-H,
7/15/99 ................................... 3,312,266
2,121+ Series 1329, Class 1329-SA,
8/15/99 (ARM) ............................. 2,162,758
517 Series 1330, Class 1330-I,
9/15/99 (ARM) ............................. 518,218
805 Series 1330, Class 1330-M,
9/15/99 (I) ............................... 402,189
1,073 Series 1444, Class 1444-K,
1/15/00 (ARM) ............................. 1,074,558
3,056 Series 1444, Class 1444,
1/15/00 (ARM) ............................. 3,080,301
1,864 Series 1505, Class 1505-ID,
9/15/15 (I) ............................... 96,538
8,971+ Series 1887, Class 1887-S,
7/15/99 (I) ............................... 672,884
5,397+ Series 1970, Class 1970-PA,
7/15/08 ................................... 5,424,277
2,836 Series 1987, Class 1987-SP,
3/15/12 ................................... 2,882,572
1,680++ Series 1998, Class 1998-S,
3/17/07 ................................... 1,767,540
Federal National Mortgage Association,
REMIC Pass-Through Certificates,
888 Trust 1992-106, Class 106-S,
6/25/99 (ARM) ......................... 903,995
852 Trust 1992-176, Class-176-FA,
10/25/99 (ARM) ........................ 845,686
3,194 Trust 1992-199, Class 199-50,
11/25/99 .............................. 3,030,046
497 Trust 1993-193, Class 193-PC,
9/25/23 ............................... 472,428
1,984 Trust 1993-199, Class 199-SC,
10/25/14 .............................. 1,885
2,598 Trust 1993-G33, Class 33-PI,
9/25/14 (I) ........................... 106,804
2,734 Trust 1994-8, Class 8-TA,
9/17/13 (I) ........................... 118,558
2,193 Trust 1997-59, Class 59-PI,
5/18/10 (I) ........................... 174,064
2,367++ Government National Mortgage
Association, REMIC Pass-Through
Certificate, 1997-8 SE, 4/16/17 (I) ..... 2,426,601
-----------
36,732,825
-----------
COMMERCIAL MORTGAGE-BACKED
SECURITIES--2.4%
A 2,000 Carolina First SBL Trust,
Series 1196, Class B,
3/18/27 ................................ 2,001,250
AAA 3,255 CBA Mortgage Corp.,
Series 1993-C1, Class A-2,
12/25/03 ............................... 3,269,755
-----------
5,271,005
-----------
CORPORATE BONDS--59.8%
FINANCE & BANKING--27.2%
Aa3 3,350 Associates Corp. of
North America, 6.75%, 10/15/99 ......... 3,384,304
A1 4,000 BankAmerica,
9.75%, 5/15/99 ......................... 4,129,260
A1 4,200 Citicorp, 9.75%, 8/01/99 .................. 4,370,982
Fleet Financial Group,
A3 5,000 8.625%, 12/15/99 ....................... 5,180,307
A3 3,000 9.85%, 6/01/99 ......................... 3,107,130
A1 2,500 Goldman Sachs Group LP,
6.875%, 9/15/99 ........................ 2,523,300
International Lease Finance Corp.,
A1 1,100 6.09%, 11/08/99 ........................ 1,103,850
A1 4,000 6.30%, 11/01/99 ........................ 4,023,920
Baa1 5,000 Lehman Brothers Holdings
Inc., 6.71%, 10/12/99 .................. 5,046,500
Baa3 2,000 Meditrust, 7.25%, 8/16/99 ................. 2,015,880
AA- 5,000 Paccar Financial Corp.,
5.84%, 6/15/99 ......................... 5,005,450

See Notes to Financial Statements.

5
<PAGE>

- -------------------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
RATING* (000) DESCRIPTION (NOTE 1)
- --------------------------------------------------------------------------------
CORPORATE BONDS
FINANCE & BANKING--CONTINUED
Baa1 $3,500 PaineWebber Group Inc.,
6.31%, 7/22/99 ......................... $ 3,508,086
Salomon Smith Barney Holdings, Inc.,
A2 1,500 7.875%, 10/01/99 ....................... 1,533,645
A2 529 7.98%, 3/01/00 ......................... 545,214
Baa1 5,000 Transamerica Finance Corp.,
5.97%, 12/09/99 ........................ 4,996,400
Aa3 3,000 Travelers Group Inc.,
7.75%, 6/15/99 ......................... 3,054,000
A2 5,000 Union Planters National Bank,
6.47%, 10/29/99 ........................ 5,031,895
------------
58,560,123
------------
CORPORATE BONDS
INDUSTRIALS--26.9%
A1 1,895 Anheuser Busch Companies Inc.,
8.75%, 12/01/99 ........................ 1,969,341
A1 5,000 Bass America Inc.,
6.75%, 8/01/99 ......................... 5,042,100
AA- 5,000 Boeing Capital Corp.,
6.30%, 12/23/99 ........................ 5,035,750
AA 2,000 California Petroleum Transport
Corp., 7.30%, 4/01/99 .................. 2,018,445
A2 5,000 Chrysler Financial Corp.,
9.50%, 12/15/99 ........................ 5,244,800
A3 4,400 IKON Capital Inc.,
6.83%, 5/10/99 .......................... 4,410,330
A2 1,455 Kern River Funding Corp.,
Series A, 6.42%, 3/31/01 ............... 1,277,474
BBB+ 3,000 MCN Investment Corp.,
5.84%, 2/01/99 ......................... 2,997,630
BB+ 7,000 NWCG Holding Corp.,
Series B, Zero Coupon, 6/15/99 ......... 6,595,190
Baa2 2,000 Occidental Petroleum Corp.,
6.08%, 11/26/99 ........................ 2,002,800
BBB- 2,750 Pulte Home Corp.,
10.125%, 7/15/99 ....................... 2,848,368
A2 5,000 Sears Roebuck & Co.,
7.75%, 10/25/99 ........................ 5,116,750
A1 3,000 Texaco Capital Inc.,
9.00%, 12/15/99 ........................ 3,129,060
A3 1,000 Textron Financial Corp.,
7.125%, 10/05/99 ....................... 1,011,792
A+ 3,000 TTX Co.,
6.28%, 6/28/99 ......................... 3,009,900
Baa1 2,500 Union Oil Co.,
8.40%, 1/15/99 ......................... 2,534,275
A2 4,000 Walt Disney Corp.,
1.50%, 10/20/99 ........................ 3,779,537
------------
58,023,542
------------
CORPORATE BONDS
UTILITIES--5.1%
A1 4,750 Alabama Power Co.,
6.375%, 8/01/99 ........................ 4,779,308
A2 4,000 Atlanta Gas Light Co.,
7.30%, 12/10/99 ........................ 4,075,065
Baa1 2,000 Potomac Capital Investment
Corp., 6.73%, 8/09/99 .................. 2,010,922
-----------
10,865,295
-----------
CORPORATE BONDS
YANKEE--0.6%
A3 1,272 Nova Corp. of Alberta,
7.25%, 7/06/99 ......................... 1,286,895
-----------
Total corporate bonds ..................... 128,735,855
-----------
ASSET-BACKED SECURITIES--7.5%
AAA 967 Banc One Auto Grantor Trust,
Series 1996-A, Class A,
6.10%, 10/15/02 ........................ 968,200
AAA 2,228 Chevy Chase Auto Receivables,
Series 1997-1, Class A,
6.50%, 10/15/03 ........................ 2,243,368
AAA 1,223 Fifth Third Bank Auto Grantor Trust,
Series 1996-B, Class A,
6.45%, 3/15/02 ......................... 1,228,403
AAA 1,202 Ford Credit Grantor Trust,
Series 1995-B, Class A,
5.90%, 10/15/00 ........................ 1,203,054
AAA 8,225 Prime Credit Card Master Trust,
Series 1992-2, Class A2,
7.45%, 11/15/02 ........................ 8,411,485
AAA 2,000 Standard Credit Card Master Trust,
Series 1995-3, Class A,
7.85%, 2/07/02 ......................... 2,072,062
-----------
16,126,572
-----------
STRIPPED MORTGAGE-BACKED
SECURITIES--8.5%
Federal Home Loan Mortgage Corp.,
2 Series 1195, Class 1195-H,
3/15/05 (I/O) ......................... 3,108
6,005++ Series 1359, Class 1359-C,
9/15/99 (P/O) ......................... 5,747,492
2,690 Series 1440, Class 1440-PK,
8/15/18 (I/O) ......................... 216,577
1,451 Series 1473, Class 1473-JA,
2/15/05 (I/O) ......................... 60,020

See Notes to Financial Statements.

<PAGE>

- --------------------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
RATING* (000) DESCRIPTION (NOTE 1)
- --------------------------------------------------------------------------------
STRIPPED MORTGAGE-BACKED
SECURITIES--CONTINUED
$ 831 Series 1719, Class 1719-C,
4/15/99 (P/O) ......................... $ 811,498
8,971 Series 1887, Class 1887-J,
7/15/99 (P/O) ......................... 8,594,941
Federal National Mortgage Association,
949 Series 1992-59, Class 59-A,
8/25/06 (P/O) ......................... 920,442
1,201 Trust 1992-62, Class 192-H,
5/25/99 (P/O) ......................... 1,156,894
320 Trust 1992-203, Class 203-JA,
6/25/05 (I/O) ......................... 15,318
212+ Trust 1993-217, Class 217-B,
11/25/22 (P/O) ........................ 210,529
7,021 Trust 1993-226, Class 226-SB,
5/25/19 (I/O) ......................... 221,299
1,512 Trust 1994-15, Class 15-N,
9/25/15 (I/O) ......................... 25,541
AAA 22,249 Sears Mortgage Corp.,
Series 1992-7, Class 7-X,
5/25/22 (I/O) ......................... 180,774
-----------
18,164,433
-----------
U.S GOVERNMENT SECURITIES--4.4%
United States Treasury Notes,
3,000++ 5.75%, 9/30/99 ......................... 3,007,980
4,265++ 6.00%, 8/15/99 ......................... 4,287,007
1,715++ 6.25%, 5/31/99 ......................... 1,725,993
550++ 6.375%, 5/15/99 ........................ 553,955
-----------
9,574,935
-----------
TAXABLE MUNICIPAL BONDS--11.7%
AAA 2,000 Alameda County California, Pension,
Series A, 7.35%, 12/01/99 .............. 2,043,180
Aaa 2,295 Essex County New Jersey,
Zero Coupon, 11/15/99 .................. 2,123,495
AAA 1,500 Long Beach California, Pension,
6.26%, 9/01/99 ......................... 1,508,760
A3 500 Los Angeles County California, Pension,
Series A, 7.81%, 6/30/99 ............... 508,745
A3 5,000 New York, G.O., Series G,
6.23%, 2/01/99 ......................... 5,012,400
Baa1 3,000 New York St. Dorm. Auth. Rev.,
6.32%, 4/01/99 ......................... 3,010,290
Baa1 1,550 New York St. Dorm. Auth.,
Pension Reserve,
6.45%, 10/01/99 ........................ 1,561,299
AAA 497 North Slope Borough Alaska,
Series A, Zero Coupon, 6/30/99 ......... 469,684
AAA 5,000 Oakland California, Pension,
Series A, 6.20%, 12/15/99 .............. 5,032,500
AAA 3,000 Ventura County California, Pension,
5.92%, 11/01/99 ........................ 3,007,230
AAA 1,000 Western Minnesota Muni.
Pwr. Agcy. Supply, Series A,
6.05%, 1/01/99 ......................... 1,001,680
-----------
25,279,263
-----------
Total long-term investments--118.4%
(cost $254,527,786) .................... 255,104,779
Liabilities in excess of
other assets--(18.4%) .................. (39,560,388)
------------
NET ASSETS--100% ......................... $215,544,391
============

- ---------------------
* Using the higher of Standard & Poor's or Moody's rating.
+ Partial principal amount pledged as collateral for reverse repurchase
agreements. See Note 4.
++ Entire principal amount pledged as collateral for reverse repurchase
agreements. See Note 4.

- --------------------------------------------------------------------------------
KEY TO ABBREVATIONS
ARM -- Adjustable Rate Mortgage.
CMO -- COllateralized Mortgage Obligation.
G.O. -- General Obligation.
I -- Denotes a CMO with Interest only characteristics.
I/O -- Interest Only.
P/O -- Principal Only.
REMIC -- Real Estate Mortgage Investment Conduit.
- --------------------------------------------------------------------------------

See Notes to Financial Statements.

<PAGE>

- --------------------------------------------------------------------------------
THE BLACKROCK 1999 TERM TRUST INC.
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1998 (UNAUDITED)
- -------------------------------------------------------------------------------

ASSETS
Investments, at value (cost $254,527,786)
(Note 1) .............................. $255,104,779
Interest receivable ...................... 3,184,873
-------------
258,289,652
-------------
LIABILITIES
Reverse repurchase agreements (Note 4) ... 42,374,506
Interest payable ......................... 161,948
Investment advisory fee payable (Note 2) . 78,058
Due to custodian ......................... 26,625
Administration fee payable (Note 2) ...... 19,514
Other accrued expenses ................... 84,610
-------------
42,745,261
-------------
NET ASSETS ............................... $215,544,391
=============
Net assets were comprised of:
Common stock, at par (Note 5) ......... $ 216,106
Paid-in capital in excess of par ...... 202,688,145
-------------
202,904,251
Undistributed net investment income ... 18,961,958
Accumulated net realized losses ....... (6,898,811)
Net unrealized appreciation ........... 576,993
-------------
Net assets, June 30, 1998 ............. $215,544,391
=============

Net asset value per share:
($215,544,391 / 21,610,583 shares of
common stock issued and outstanding) .. $9.97
======

- --------------------------------------------------------------------------------
THE BLACKROCK 1999 TERM TRUST INC.
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1998 (UNAUDITED)
- -------------------------------------------------------------------------------

NET INVESTMENT INCOME
Income
Interest (net of premium amortization of
$553,854 and net of interest expense of
$2,013,924) .......................... $ 9,298,029
------------

Operating expenses
Investment advisory .................... 449,411
Administration ......................... 106,648
Reports to shareholders ................ 78,000
Custodian .............................. 31,000
Registration ........................... 25,000
Audit .................................. 20,000
Directors .............................. 15,000
Transfer agent ......................... 5,000
Miscellaneous .......................... 6,975
------------
Total operating expenses ............. 737,034
------------
Net investment income ..................... 8,560,995
------------

REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (NOTE 3)
Net realized loss on:
Investments ............................ (323,321)
Short Sales ............................ (102,539)
------------
(425,860)
------------
Net change in unrealized appreciation on:
Investments ............................ (1,829,014)
Short sales ............................ 86,644
------------
(1,742,370)
------------
Net loss on investments ................ (2,168,230)
------------

NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS ........................ $ 6,392,765
============

See Notes to Financial Statements.

<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK 1999 TERM TRUST INC.
STATEMENT OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
INCREASE (DECREASE) IN CASH
Cash flows provided by operating activities:
Interest received ............................ $11,817,799
Operating expenses and excise taxes paid ..... (1,505,844)
Interest expense paid ........................ (2,164,148)
Sales of short-term portfolio
investments, net ........................... 5,000,000
Purchase of long-term portfolio investments .. (21,477,519)
Proceeds from disposition of long-term
portfolio investments ...................... 54,715,153
-----------
Net cash flows provided by
operating activities ........................ 46,385,441
-----------
Cash flows used for financing activities:

Decrease in reverse repurchase agreements .... (45,229,156)
Cash dividends paid .......................... (4,317,712)
-----------
Net cash flows used for financing activities . (49,546,868)
-----------
Net decrease in cash ............................ (3,161,427)
Cash at beginning of period ..................... 3,134,802
-----------
Cash at end of period ........................... $ (26,625)
===========

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 ............................... $ 6,392,765
-----------
Decrease in investments ......................... 37,964,995
Net realized loss ............................... 425,860
Decrease in unrealized appreciation ............. 1,742,370
Decrease in interest receivable ................. 505,843
Decrease in receivable for investments sold ..... 692
Decrease in deposits with brokers for
short sales .................................. 15,318,750
Decrease in securities sold short ............... (15,046,800)
Decrease in interest payable .................... (976,224)
Increase in accrued expenses and
other liabilities ............................ 57,190
-----------
Total adjustments ............................ 39,992,676
-----------
Net cash flows provided by operating activities . $46,385,441
===========
- --------------------------------------------------------------------------------
THE BLACKROCK 1999 TERM TRUST INC.
STATEMENTS OF CHANGES
IN NET ASSETS (UNAUDITED)
- --------------------------------------------------------------------------------

SIX MONTHS
ENDED YEAR ENDED
JUNE 30, DECEMBER 31,
1998 1997
-------------- ----------------
INCREASE (DECREASE) IN
NET ASSETS

Operations:

Net investment income ...... $ 8,560,995 12,261,094

Net realized gain (loss) on
investments ............. (425,860) 184,591

Net change in unrealized
appreciation on
investment .............. (1,742,370) 2,935,103
------------ ------------
Net increase in net assets
resulting from
operations .............. 6,392,765 15,380,788

Dividends from net investment
income ..................... (4,317,712) (7,915,823)
------------ ------------
Total increase ................ 2,075,053 7,464,965

NET ASSETS

Beginning of period ........... 213,469,338 206,004,373
------------ ------------

End of period ................. $215,544,391 $213,469,338
============ ============

See Notes to Financial Statements.

9
<PAGE>

- --------------------------------------------------------------------------------
THE BLACKROCK 1999 TERM TRUST INC.
FINANCIAL HIGHLIGHTS (UNAUDITED)
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDED DECEMBER 31,
ENDED ---------------------------------------------
JUNE 30, 1998 1997 1996 1995 1994 1993
------------- ----- ----- ----- ---- ------
PER SHARE OPERATING PERFORMANCE:
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ................ $ 9.88 $ 9.53 $ 9.27 $ 8.42 $ 9.26 $ 9.40
------- ------- ------ ------ ------- -------
Net investment income (net of $0.09, $0.30, $0.26,
$0.33, $0.15 and $0.01, respectively,
of interest expense) ........................... 0.40 0.57 0.64 0.63 0.72 0.73
Net realized and unrealized gain (loss) .......... (0.11) 0.15 0.03 0.77 (0.93) (0.19)
------- ------- ------ ------ ------- -------
Net increase (decrease) from investment operations .. 0.29 0.72 0.67 1.40 (0.21) 0.54
------- ------- ------ ------ ------- -------
Dividends from net investment income ................ (0.20) (0.37) (0.41) (0.55) (0.63) (0.68)
------- ------- ------ ------ ------- -------
Net asset value, end of period* ..................... $ 9.97 $ 9.88 $ 9.53 $ 9.27 $ 8.42 $ 9.26
======= ======= ====== ====== ======= =======
Market value, end of period* ........................ $ 9.57 $ 9.38 $ 8.88 $ 8.14 $ 7.50 $ 9.50
======= ======= ====== ====== ======= =======
TOTAL INVESTMENT RETURN+ ............................ 3.05% 5.86% 14.21% 15.25% (14.88%) 1.74%
======= ======= ====== ====== ======= =======

RATIOS TO AVERAGE NET ASSETS:
Operating expenses@ ................................. 0.68%# 0.68% 0.65% 0.74% 0.71% 0.79%
Net investment income ............................... 8.05%# 5.86% 6.86% 7.12% 8.17% 7.74%

SUPPLEMENTAL DATA:
Average net assets (in thousands) ................... $214,444 $208,747 $201,998 $192,717 $189,828 $202,158
Portfolio turnover 8% 76% 106% 165% 109% 62%
Net assets, end of period (in thousands) ............ $215,544 $213,469 $206,004 $200,313 $181,919 $200,126
Reverse repurchase agreements outstanding, end of
period (in thousands) ............................ $ 42,374 $ 87,604 $ 94,960 $ 92,861 $ 79,443 $ 47,100
Asset coverage++ .................................... $ 5,087 $ 3,437 $ 3,169 $ 3,157 $ 3,290 $ 5,249

</TABLE>

- --------
# Annualized.
* Net asset value and market value are published in THE WALL STREET JOURNAL
each Monday.
@ The ratios of operating expenses, including interest expense, to average
net assets were 2.58%#, 3.65%, 3.42%, 4.40%, 2.46% and 1.36% for the
periods indicated above, respectively. The ratios of operating expenses,
including interest expense and excise tax, to average net assets were
2.58%#, 3.77%, 3.47%, 4.47%, 2.49% and 1.36%, for the periods indicated
above, respectively.
+ Total investment return is calculated assuming a purchase of common stock
at the current market price on the first day and a sale at the current
market price on the last day of 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 returns for
periods of less than one full year are not annualized.
++ 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.

See Notes to Financial Statements.

10
<PAGE>

- --------------------------------------------------------------------------------
THE BLACKROCK 1999 TERM TRUST INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------

NOTE 1. ORGANIZATION & 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 60 days or less are valued at amortized
cost, if their term to maturity from date of purchase is 60 days or less.
Short-term securities with a term to maturity greater than 60 days from the date
of purchase are valued at current market quotations until maturity.

In connection with transactions in repurchase agreements, the Trust's
custodian takes possession of the underlying collateral securities, the value of
which at least equals the principal amount of the repurchase transaction,
including accrued interest. To the extent that any repurchase transaction
exceeds one business day, the value of the collateral is marked-to-market on a
daily basis to ensure the adequacy of the collateral. If the seller defaults and
the value of the collateral declines or if bankruptcy proceedings are commenced
with respect to the seller of the security, realization of the collateral by the
Trust may be delayed or limited.

OPTION SELLING/PURCHASING: When the Trust sells or purchases an option, an
amount equal to the premium received or paid by the Trust is recorded as a
liability or an asset and is subsequently adjusted to the current market value
of the option written or purchased. Premiums received or paid from writing or
purchasing options which expire unexercised are treated by the Trust on the
expiration date as realized gains or losses. The difference between the premium
and the amount paid or received on effecting a closing purchase or sale
transaction, including brokerage commissions, is also treated as a realized gain
or loss. If an option is exercised, the premium paid or received is added to the
proceeds from the sale or cost of the purchase in determining whether the Trust
has realized a gain or a loss on investment transactions. The Trust, as writer
of an option, may have no control over whether the underlying securities may be
sold (call) or purchased (put) and as a result bears the market risk of an
unfavorable change in the price of the security underlying the written option.

Options, when used by the Trust, help in maintaining a targeted duration.
Duration is a measure of the price sensitivity of a security or a portfolio to
relative changes in interest rates. For instance, a duration of "one" means that
a portfolio's or a security's price would be expected to change by approximately
one percent with a one percent change in interest rates, while a duration of
five would imply that the price would move approximately five percent in
relation to a one percent change in interest rates.

Option selling and purchasing is used by the Trust to effectively hedge
positions so that changes in interest rates do not change the duration of the
portfolio unexpectedly. In general, the Trust uses options to hedge a long or
short position or an overall portfolio that is longer or shorter than the
benchmark security. A call option gives the purchaser of the option the right
(but not obligation) to buy, and obligates the seller to sell (when the option
is exercised), the

<PAGE>

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. 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 secur-ity short, or a loss, unlimited as
to dollar amount, will be recognized upon the termination of a short sale if the
market price is less or greater 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.

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 substan-

<PAGE>

tially all of its taxable income to shareholders. Therefore, no federal income
tax provision is required.

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.

Income distributions and capital gain distributions are determined in
accordance with income tax regulations which may differ from generally accepted
accounting principles.

ESTIMATES: The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

NOTE 2. AGREEMENTS

The Trust has an Investment Advisory Agreement with BlackRock Financial
Management, Inc. (the "Adviser") a wholly-owned corporate subsidiary of
BlackRock Advisors, Inc., which is an indirect majority-owned subsidiary of PNC
Bank, N.A., and an Administration Agreement with Prudential Investments Fund
Management LLC ("PIFM"), 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 PIFM 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. PIFM 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, 1998 aggregated $21,477,519
and $54,768,403, 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, 1998, the Trust did
not hold any 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, including Midland Loan
Services. It is possible under certain circumstances PNC Mortgage Securities
Corp. or its affiliates, including Midland Loan Services could have interests
that are in conflict with the holders of these mortgage backed securities and,
such holders could have rights against PNC Mortgage Securities Corp. or its
affiliates, including Midland Loan Services.

The federal income tax basis of the Trust's investments at June 30, 1998 was
substantially the same as the basis for financial reporting and, accordingly,
net unrealized appreciation for federal income tax purposes was $576,993 (gross
unrealized appreciation -- $2,555,092; gross unrealized depreciation --
$1,978,099).

For federal income tax purposes, the Trust had a capital loss carryforward at
December 31, 1997 of approximately $6,473,000 which will expire at the
termination of the Trust. Accordingly, no capital gains distribution is expected
to be paid to shareholders until net gains have been realized in excess of such
amounts.

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, 1998 was approximately $35,155,758 at a weighted
average interest rate of approximately 5.73%. The maximum amount of reverse
repurchase agreements outstanding at any month-end during the six months ended
June 30, 1998 was $91,067,287 as of January 31, 1998 which was 42.4% of total
assets.

<PAGE>

DOLLAR ROLLS: The Trust may enter into dollar rolls in which the Trust sells
securities for delivery in the current month and simultaneously contracts to
repurchase substantially similar (same type, coupon and maturity) securities on
a specified future date. During the roll period the Trust forgoes principal and
interest paid on the securities. The Trust will be compensated by the interest
earned on the cash proceeds of the initial sale and by the lower repurchase
price at the future date. The Trust did not enter into dollar rolls during the
six months ended June 30, 1998.

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, 1998, the Adviser owned 10,583 shares.

NOTE 6. DIVIDENDS

Subsequent to June 30,1998, The Board of Directors of the Trust declared a
dividend from undistributed earnings of $.0333 per share payable July 31, 1998
to shareholders of record on July 15, 1998.

<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 other material changes in the Trust's investment
objectives or policies that have not been approved by the shareholders, or to
its charter or by-laws, or in the principal risk factors associated with
investment in the Trust. There have been no changes in the persons who are
primarily responsible for the day-to-day management of the Trust's portfolio.

The Annual Meeting of Trust Shareholders was held May 6, 1998 to vote on
the following matters:

(1) To elect three Directors as follows:

DIRECTOR CLASS TERM EXPIRING
-------- ----- ----- --------
Frank J. Fabozzi ......... II 3 years 2001
Ralph L. Schlosstein ..... II 3 years 2001
Walter F.Mondale ......... II 3 years 2001

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

(2) To ratify the selection of Deloitte & Touche LLP as independent public
accountants of the Trust for the fiscal year ending December 31, 1998.

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

VOTES FOR VOTES AGAINST ABSTENTIONS
--------- ------------- -----------

Frank J. Fabozzi ....... 18,208,252 0 2,398,937
Ralph L. Schlosstein ... 18,224,294 0 2,382,895
Walter F.Mondale ....... 18,165,263 0 2,441,926
Ratification of
Deloitte & Touche LLP .. 19,842,903 236,330 527,956

<PAGE>

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

THE TRUST'S INVESTMENT OBJECTIVE

The BlackRock 1999 TermTrust Inc.'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") is an SEC-registered
investment adviser. BlackRock and its affiliates currently manage over $119
billion on behalf of taxable and tax-exempt clients worldwide. Strategies
include fixed income, equity and cash and may incorporate both domestic and
international securities. Domestic fixed income strategies utilize the
government, mortgage, corporate and municipal bond sectors.BlackRock manages
twenty-one closed-end funds that are traded on either the New York or American
stock exchanges, and a $23 billion family of open-end equity and bond funds.
Current institutional clients number 334, domiciled in the United States and
overseas.

WHAT CAN THE TRUST INVEST IN?

The Trust may invest in all fixed income securities rated investment grade or
higher ("AAA", "AA", "A" or "BBB"). Examples of securities in which the Trust
may invest include U.S. government and government agency securities, zero coupon
securities, mortgage-backed securities, corporate debt securities, asset-backed
securities, U.S. dollar-denominated foreign debt securities and municipal
securities. Under current market conditions, BlackRock expects that the primary
investments of the Trust will be U.S. government securities, securities backed
by government agencies (such as mortgage-backed securities) 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
331/3% 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, State Street
Bank and Trust Co. 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 331/3% of total assets.

Leverage also increases the duration (or price volatility of the net assets) of
the Trust, which can improve the performance of the 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 market
price.

<PAGE>
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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>

INVERSE-FLOATING RATE
MORTGAGES: Mortgage instruments with coupons that adjust at
periodic intervals according to a formula which
sets inversely with a market level interest rate
index.

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.

19
<PAGE>

BLACKROCK

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

OFFICERS
Ralph L. Schlosstein, PRESIDENT
Scott Amero, VICE PRESIDENT
Keith T. Anderson, VICE PRESIDENT
Michael C. Huebsch, VICE PRESIDENT
Robert S. Kapito, VICE PRESIDENT
Richard M. Shea, VICE PRESIDENT/TAX
Henry Gabbay, TREASURER
James Kong, ASSISTANT TREASURER
Karen H. Sabath, SECRETARY

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

ADMINISTRATOR
Prudential Investments Fund Management LLC
Gateway Center Three
100 Mulberry Street
Newark, NJ 01702-4077

CUSTODIAN AND TRANSFER AGENT
State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171
(800) 699-1BFM

INDEPENDENT AUDITORS
Deloitte & Touche LLP
Two World Financial Center
New York, NY 10281-1434

LEGAL COUNSEL
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, NY 10022

The accompanying financial statements as of June 30, 1998 were not audited
and, accordingly, no opinion is expressed on them.

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

THE BLACKROCK 1999 TERM TRUST INC.
c/o Prudential Investments Fund Management LLC
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
(800) 227-7BFM

[LOGO] Printed on recycled paper 09247T-10-0

THE BLACKROCK
1999 TERM
TRUST INC.
-----------------------------
SEMI-ANNUAL REPORT
JUNE 30, 1998
[GRAPHIC]