- -------------------------------------------------------------------------------
THE BLACKROCK INVESTMENT QUALITY MUNICIPAL TRUST INC.
SEMI-ANNUAL REPORT TO SHAREHOLDERS
REPORT OF INVESTMENT ADVISER
- -------------------------------------------------------------------------------
May 30, 1997
Dear Trust Shareholder:
Domestic bond investors have experienced higher interest rates in the face
of a resilient stock market and stronger economic growth over the past six
months. However, as a pre-emptive strike at inflation, the Federal Reserve
raised the Federal funds target rate one-quarter of a point at their March
policy meeting.
BlackRock expects that both production and consumption will continue to be
strong in the coming months. However, the combined effects of higher interest
rates and already rising consumer debt should lead to more moderate economic
growth later in 1997. Despite inflation remaining relatively low, strong
consumer confidence and robust industrial activity suggest that the potential
for future inflation exists. Therefore, BlackRock currently maintains a cautious
fundamental outlook for bonds. While we believe that one or two additional
interest rate increases by the Fed may still be necessary to temper economic
growth, it does not appear that 1997 will be a repeat of the dramatic rise in
short term interest rates that the market witnessed in 1994.
This report provides the Trust's portfolio managers an opportunity to
provide you with detailed market commentary and review the major themes that
have occurred in the portfolio over the past six months. We hope that you find
this report informative and look forward to serving your financial needs in the
future.
Sincerely,
/s/Laurence D. Fink /s/Ralph L. Schlosstein
- ------------------- -----------------------
Laurence D. Fink Ralph L. Schlosstein
Chairman President
1
<PAGE>
May 30, 1997
Dear Shareholder:
We are pleased to present the semi-annual report for The BlackRock
Investment Quality Municipal Trust Inc. ("the Trust") for the six months ended
April 30, 1997. We would like to take this opportunity to review the Trust's
stock price and net asset value (NAV) performance, summarize developments in the
fixed income markets 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 "BKN". The
Trust's investment objective is to provide high current income that is exempt
from regular Federal income tax consistent with the preservation of capital. The
Trust seeks to achieve this objective by investing in investment grade (rated
"AAA" to "BBB" by a major rating agency or of equivalent quality) tax-exempt
general obligation and revenue bonds issued by city, county and state
municipalities throughout the United States.
The table below summarizes the changes in the Trust's stock price and net
asset value over the period:
- --------------------------------------------------------------------------------
4/30/97 10/31/96 CHANGE HIGH LOW
- --------------------------------------------------------------------------------
STOCK PRICE $12.625 $12.4375 1.51% $13.00 $12.25
- --------------------------------------------------------------------------------
NET ASSET VALUE (NAV) $14.41 $14.52 (0.76%) $14.85 $14.18
- --------------------------------------------------------------------------------
THE FIXED INCOME MARKETS
Stronger economic data and accompanying inflation fears caused U.S.
Treasury yields to rise during the six month period between November 1, 1996 and
April 30, 1997. After reaching their lowest levels since March of 1996, Treasury
yields began rising in December after Federal Reserve Chairman Alan Greenspan's
commentary on "irrational exuberance" in the financial markets. Although
inflationary measures such as commodity, producer and consumer prices remained
relatively stable, tight labor markets and strong consumer confidence led the
Federal Reserve to raise the Federal funds rate by 25 basis points (1/4%) at
their March 25, 1997 monetary policy meeting to pre-emptively fight inflation.
Hints of moderating economic growth during April proved to be a more
accommodating environment for bonds, as Treasury yields fell towards month-end
in response to a strong dollar, rising stock market and optimism for a
balanced-budget agreement.
For the six month period, the yield of the 10-year Treasury note rose
0.37% to end April 1997 at 6.71%. However, the 10-year's yield reached a high of
6.98% in mid-April before falling the last two weeks of the month as the
likelihood for another interest rate hike by the Federal Reserve at the May
meeting decreased. The 10-year municipal general obligation's yield rose only 15
basis points to end the period at 5.05%.
Municipal bonds outperformed their taxable counterparts over the past six
months, with longer maturity municipals generally outperforming shorter maturity
issues. The municipal market, as measured by the Lehman Brothers Municipal Bond
Index, posted a 2.01% total return from November 1, 1996 through April 1997 as
compared against the Lehman Aggregate Index's return of 1.71% over the same
period. Investor demand for longer dated municipal issues was particularly
pronounced during the first quarter of 1997, in part because of a 10% decline in
new issuance due to a higher interest rate environment. Additionally, rising
interest rates created increased demand from fixed income investors searching
for attractive after-tax yields and as a potential shelter from the volatility
of the equity markets.
Looking ahead, BlackRock will seek to take advantage of potential price
weakness in short and intermediate maturity municipals. We believe that new
municipal supply will remain low and that strong investor demand should provide
a favorable environment for municipal bonds in the coming months.
2
<PAGE>
THE TRUST'S PORTFOLIO AND INVESTMENT STRATEGY
The Trust's portfolio is actively managed to diversify exposure to various
sectors, issuers, revenue sources and security types. BlackRock's investment
strategy emphasizes a relative value approach, which allows the Trust to
capitalize upon changing market conditions by rotating municipal sectors,
credits and coupons.
Additionally, the Trust employs leverage at about 35% of total assets to
enhance its income by borrowing at short term municipal rates and investing the
proceeds in longer maturity issues which have higher yields. The degree to which
the Trust can benefit from its use of leverage may affect its ability to pay
high monthly income.
The Trust has been emphasizing premium callable bonds, which have
performed extremely well as market demand has increased for bonds with a
defensive structure. As a result of their strong performance, the Trust may seek
to reduce its exposure to premiums and reallocate into par bonds. Additionally,
the Trust is currently seeking opportunities to reduce its exposure to lower
rated investment grade credits (BBB and A), as the yield differential (or
"spread") between lower and higher rated credits has narrowed. Due to this
narrowing of credit spreads, which reduces the amount of extra yield investors
receive by buying a lower rated credit, the Trust now favors moving into higher
credit bonds because of the relatively small yield give-up.
The following charts compare the Trust's current and October 31, 1996
asset composition and credit quality allocations:
SECTOR BREAKDOWN
- --------------------------------------------------------------------------------
SECTOR APRIL 30, 1997 OCTOBER 31, 1996
- --------------------------------------------------------------------------------
Power 21% 12%
- --------------------------------------------------------------------------------
Transportation 20% 22%
- --------------------------------------------------------------------------------
University/School 10% 8%
- --------------------------------------------------------------------------------
Industrial 10% 9%
- --------------------------------------------------------------------------------
Hospital 8% 9%
- --------------------------------------------------------------------------------
Lease Revenue 7% 12%
- --------------------------------------------------------------------------------
City, County & State 6% 8%
- --------------------------------------------------------------------------------
Housing 5% 6%
- --------------------------------------------------------------------------------
Tax Revenue 5% 1%
- --------------------------------------------------------------------------------
Pollution Control 4% 7%
- --------------------------------------------------------------------------------
Miscellaneous Revenue 2% 4%
- --------------------------------------------------------------------------------
Resource Recovery 1% 1%
- --------------------------------------------------------------------------------
Utility 1% --
- --------------------------------------------------------------------------------
Water & Sewer -- 1%
- --------------------------------------------------------------------------------
3
<PAGE>
- --------------------------------------------------------------------------------
STANDARD & POOR'S/MOODY'S/FITCH'S
CREDIT RATING APRIL 30, 1997 OCTOBER 31, 1996
- --------------------------------------------------------------------------------
AAA/Aaa 57% 43%
- --------------------------------------------------------------------------------
AA/Aa 4% 6%
- --------------------------------------------------------------------------------
A/A 14% 21%
- --------------------------------------------------------------------------------
BBB/Baa 25% 30%
- --------------------------------------------------------------------------------
We look forward to continuing to manage the Trust to benefit from the
opportunities available to investors in the investment grade municipal market.
We thank you for your investment and continued interest in The BlackRock
Investment Quality Municipal Trust Inc. Please feel free to call our marketing
center at (800) 227-7BFM (7236) if you have any specific questions which were
not addressed in this report.
Sincerely yours,
/s/Robert Kapito /s/Kevin Klingert
- ------------------- ------------------
Robert Kapito Kevin Klingert
Vice Chairman and Portfolio Manager Managing Director and Portfolio Manager
BlackRock Financial Management, Inc. BlackRock Financial Management, Inc.
- --------------------------------------------------------------------------------
THE BLACKROCK INVESTMENT QUALITY MUNICIPAL TRUST INC.
- --------------------------------------------------------------------------------
Symbol on New York Stock Exchange: BKN
- --------------------------------------------------------------------------------
Initial Offering Date: February 19, 1993
- --------------------------------------------------------------------------------
Closing Stock Price as of 4/30/97: $12.625
- --------------------------------------------------------------------------------
Net Asset Value as of 4/30/97: $14.41
- --------------------------------------------------------------------------------
Yield on Closing Stock Price as of 4/30/97 ($12.625)1: 6.24%
- --------------------------------------------------------------------------------
Current Monthly Distribution per Share2: $0.065625
- --------------------------------------------------------------------------------
Current Annualized Distribution per Share2: $0.7875
- --------------------------------------------------------------------------------
1Yield on Closing Stock Price is calculated by dividing the current annualized
distribution per share by the closing stock price per share.
2The Distribution is not constant and is subject to change.
4
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK INVESTMENT QUALITY MUNICIPAL TRUST INC.
PORTFOLIO OF INVESTMENTS
APRIL 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OPTION
AMOUNT CALL VALUE
RATING* (000) DESCRIPTION PROVISIONS++ (NOTE 1)
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
LONG-TERM INVESTMENTS--151.8%
ALABAMA--2.2%
Baa1 $5,000 Courtland Indl. Dev. Brd. Indl. Dev. Rev., Champion Intl. Corp., 7.20%,
12/01/13 ............................................................ 5/02 at 103 $ 5,395,150
-------------
CALIFORNIA -- 11.8%
AAA 15,460 Los Angeles Cnty. Asset Leasing Corp. Rev., 5.95%, 12/01/07, AMBAC .... No Opt. Call 16,727,102
AAA 4,750 Los Angeles Cnty. Met. Trans. Auth., Sales Tax Rev., Ser. A,
5.00%, 7/01/21, FGIC ................................................ 7/03 at 100 4,208,120
University of California Rev., Research Facs., Ser. B,
A 2,000 6.10%, 9/01/10 ...................................................... 9/03 at 102 2,053,900
A 3,305 6.20%, 9/01/11 ...................................................... 9/03 at 102 3,393,673
A 2,000 6.25%, 9/01/12 ...................................................... 9/03 at 102 2,033,720
-------------
28,416,515
-------------
COLORADO -- 11.7%
Arapahoe Cnty. Cap. Impvt. Hwy. Rev., Trust Fund, Ser. E,
Baa 3,100 Zero Coupon, 8/31/04 ................................................ No Opt. Call 2,011,187
Baa 2,000 Zero Coupon, 8/31/07 ................................................ 8/05 at 89.239 1.060,260
Baa 2,250 6.90%, 8/31/15 ...................................................... 8/05 at 103 2,387,835
Denver City & Cnty. Arpt. Rev.,
Baa 1,120 Ser. C, 6.65%, 11/15/05 ............................................. 11/02 at 102 1,177,366
Baa 3,000 Ser. C, 6.50%, 11/15/06 ............................................. 11/02 at 102 3,117,240
Baa 17,790 Ser. D, 7.00%, 11/15/25 ............................................. 11/01 at 100 18,456,413
-------------
28,210,301
-------------
DISTRICT OF COLUMBIA -- 0.8%
AAA 1,900 District of Columbia, G.O., Ser. E, 6.00%, 6/01/09, CAPMAC ............ 6/03 at 102 1,936,537
-------------
FLORIDA -- 5.2%
AAA 1,780 Florida Hsg. Fin. Agcy. Rev., Sngl. Fam. Mtg., Ser. 1994-A, 6.55%,
7/01/14 ............................................................. 1/05 at 102 1,842,353
Baa3 6,000 Martin Cnty. Indl. Dev. Auth., Indiantown Cogeneration Proj., Ser. A,
7.875%, 12/15/25 .................................................... 12/04 at 102 6,693,300
BBB 4,000 Santa Rosa Bay Bridge Auth. Florida Rev., 6.25%, 7/01/28 .............. 7/06 at 102 3,956,640
-------------
12,492,293
-------------
GEORGIA -- 3.6%
AAA 6,000 Georgia Mun. Pwr. & Elec. Auth., Ser. T, 6.50%, 1/01/99+++, FGIC ...... No Opt.Call 6,198,600
AA+ 2,250 Georgia St. Hsg. & Fin. Auth. Rev., Sngl. Fam. Mtg., Ser. C, 7.00%,
12/01/15, FHA ....................................................... 12/04 at 102 2,361,105
-------------
8,559,705
-------------
ILLINOIS -- 5.7%
AAA 4,650 Chicago O'Hare Int'l. Arpt. Spl. Fac. Rev., Luthansa Airlines Proj.,
7.125%, 5/01/18 ..................................................... 5/01 at 102 4,992,194
Illinois Edl. Facs. Auth. Rev., Loyola Univ., FGIC,
AAA 5,000 4.125%+, 7/01/13 .................................................... 7/03 at 102 4,891,250
AAA 4,000 5.45%+, 7/01/14 ..................................................... 7/03 at 102 3,849,480
-------------
13,732,924
-------------
INDIANA -- 3.8%
Baa2 8,595 Indianapolis Arpt. Auth. Rev., Spl. Facs. Fed. Express Corp. Proj.,
7.10%, 1/15/17 ...................................................... 7/04 at 102 9,201,721
-------------
KENTUCKY -- 6.1%
AAA 15,000 Kentucky St. Tpke. Auth., Econ. Dev. Road Rev., 3.95%+, 7/01/13, AMBAC 7/03 at 102 14,756,700
-------------
</TABLE>
See Notes to Financial Statements.
5
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OPTION
AMOUNT CALL VALUE
RATING* (000) DESCRIPTION PROVISIONS++ (NOTE 1)
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
LOUISIANA -- 12.8%
AAA $14,400 Louisiana Pub. Facs. Auth. Hosp. Rev., Our Lady of the Lake Regl.
Med. Ctr., 4.19%+, 12/01/22, FSA .................................... 12/03 at 102 $ 13,696,272
AAA 7,860 Louisiana Stadium & Expo Dist., Ser. B, 6.375%, 7/01/25, FGIC ......... 7/05 at 102 8,217,159
AAA 8,860 Louisiana Stadium & Expo Dist., Htl., Ocpcy. Tax, 6.00%, 7/01/16, FGIC 7/06 at 102 8,962,953
-------------
30,876,384
-------------
MARYLAND -- 6.2%
Aa 9,940 Maryland St. Dept. Hsg. & Comn. Dev. Admin., Sngl. Fam. Prog., Ser. 2,
6.55%, 4/01/26 ...................................................... 4/05 at 102 10,146,851
A- 1,500 Maryland St. Energy Fin. Admin., Bld. Wst. Disp. Rev.,
Wheelabrator Wtr. Proj., 6.45%, 12/01/16 ............................ 12/06 at 102 1,543,050
AAA 3,175 Northeast Waste Disp. Auth. Rev., Sld. Wst., Montgomery Cnty.
Res. Rec. Proj., Ser. A, 6.30%, 7/01/16, MBIA ....................... 7/03 at 102 3,239,770
-------------
14,929,671
-------------
MASSACHUSETTS -- 10.9%
AAA 23,000 Massachusetts Mun. Whsl Elec. Co. Pwr.Supply Sys. Rev., Ser. A,
5.45%, 7/01/18, AMBAC ............................................... 7/03 at 102 21,404,260
A1 4,850 New England Ed. LnMktg Corp. Ser. F, 5.625%, 7/01/04 .................. No Opt. Call 4,872,941
-------------
26,277,201
-------------
MISSOURI -- 0.4%
NR 1,000 Lake of The Ozarks Comn. Bridge, 6.25%, 12/01/16 ...................... 12/06 at 102 977,550
-------------
NEVADA -- 9.4%
Clark Cnty. Sch. Dist., Bldg. &Renovation Ser. B, FGIC
AAA 10,000 5.50%, 6/15/15 ...................................................... 6/07 at 101 9,684,300
AAA 9,215 5.625%, 6/15/13 ..................................................... 6/07 at 101 9,157,406
AAA 3,750 Washoe Cnty. Arpt. Auth., Arpt. Sys. Impvt. Rev., Ser. B, 5.80%,
7/01/09, MBIA ....................................................... 7/03 at 102 3,830,475
-------------
22,672,181
-------------
NEW YORK -- 21.8%
New York City, G.O.,
Baa1 4,140 Ser. A, 6.00%, 8/01/05 .............................................. No Opt. Call 4,228,762
Baa1 7,000 Ser. E, 6.50%, 2/15/06 .............................................. No Opt. Call 7,348,320
Baa1 7,000 Ser. H, 7.20%, 2/01/13 .............................................. 2/02 at 101.5 7,574,280
New York City Ind. Dev. Agcy. Spec. Fac. Rev., Term. One Group
Assoc. Proj.,
A 4,000 6.00%, 1/01/08 ...................................................... 1/04 at 102 4,103,200
A 1,000 6.00%, 1/01/15 ...................................................... 1/04 at 102 990,060
A 7,000 6.00%, 1/01/19 ...................................................... 1/04 at 102 6,907,040
AAA 8,000 New York St. ThruwayAuth. Service Contract Rev., LocalHwy &Bridge,
5.75%, 4/01/13, MBIA ................................................ 4/04 at 102 8,033,760
AAA 2,620 New York St. Urban Dev. Corp. Rev., Correctional Facs, 5.625%,
1/01/07, AMBAC ...................................................... 1/03 at 102 2,706,224
Baa1 3,000 New York St. Dorm. Auth. Rev., St. Univ. Edl. Facs., Ser. B, 6.10%,
5/15/09 ............................................................. 5/04 at 102 3,065,070
Baa 1,955 New York St. Hsg. Fin. Agcy. Rev., Hlth. Facs. of New York City,
Ser. A, 6.375%, 11/01/04 ............................................ No Opt. Call 2,045,380
AAA 5,000 New York St. Med. Care Facs. Rev., New York Hosp., Ser. A, 6.60%,
2/15/09, AMBAC ...................................................... 2/05 at 102 5,456,750
-------------
52,458,846
-------------
NORTH CAROLINA -- 6.6%
North Carolina Eastn. Mun. Pwr. Agcy. Rev., Ser. B, CAPMAC,
AAA 5,300 6.00%, 1/01/22 ...................................................... No Opt. Call 5,350,774
AAA 2,500 6.00%, 1/01/26 ...................................................... No Opt. Call 2,531,000
AAA 5,000 7.00%, 1/01/08 ...................................................... No Opt. Call 5,656,700
A3 2,150 North Carolina Mun. Pwr, Agcy, Elec. Rev., Catawba No. 1, 7.50%,
1/01/17 ............................................................. 1/98 at 102 2,224,949
-------------
15,763,423
-------------
</TABLE>
See Notes to Financial Statements.
6
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OPTION
AMOUNT CALL VALUE
RATING* (000) DESCRIPTION PROVISIONS++ (NOTE 1)
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
OHIO -- 0.4%
NR $ 1,000 CLEVELAND CUYAHOGA CNTY, OHIO PORT AUTH., REV.,
PORT DEV. PROJ.
6.00%, 3/01/07 ..................................................... NO OPT. CALL $ 976,380
-------------
PENNSYLVANIA -- 5.6%
AAA 10,100 Lehigh Cnty. Gen. Purpose Auth. Rev., St. Lukes Hosp. Bethlehem Proj.,
4.00%+, 11/15/13, AMBAC ............................................. 11/03 at 102 9,684,284
AAA 4,000 Pennsylvania Intergovernmental Coop. Auth., Spl. Tax Rev.,Philadelphia
Fdg. Prog., 5.50%, 6/15/20, FGIC .................................... 6/06 at 100 3,823,400
-------------
13,507,684
-------------
RHODE ISLAND -- 2.5%
AA+ 3,785 Rhode Island Hsg. & Mtg. Fin., Homeownership Oppty., Ser. 15-B,
6.75%, 10/01/17 ..................................................... 4/04 at 102 3,937,081
AAA 2,000 Rhode Island St Hlth. & Edu, Bldg. Corp., Rev., Hosp. Fin. 5.50%,
5/15/16, MBIA ....................................................... 5/07 at 102 1,926,600
-------------
5,863,681
-------------
TENNESSEE -- 3.7%
A3 8,500 Maury Cnty. Ind. Dev. Brd. Poll. Ctrl. Rev., Saturn Corp. Proj.,
6.50%, 9/01/24 ...................................................... 9/04 at 102 8,864,310
-------------
TEXAS -- 8.2%
Baa1 9,800 Brazos River Auth. Poll. Ctrl. Rev., Coll-Texas Utilities Co. Proj.,
8.25%, 1/01/19 ...................................................... 1/99 at 102 10,435,922
A3 3,625 Matagorda Cnty, Nav. Dist. No. 1 Rev., Coll-Houston Light &Pwr, Ser. B
7.70%, 2/01/19 ...................................................... 2/98 at 102 3,766,230
A2 2,500 Port of Bay City Auth. Matagorda Cnty, Rev., Hoechst Celanese
Corp. Proj.,
6.50%, 5/01/26 ...................................................... 5/06 at 102 2,589,175
Baa1 2,640 Sabine River Auth. Poll, Ctrl, Rev., Coll-Texas Utilities Elec. Proj.,
Ser. B, 8.25%, 10/01/20 ............................................. 10/00 at 102 2,900,304
-------------
19,691,631
-------------
UTAH -- 2.4%
AAA 4,450 Intermountain Pwr. Agcy, Rev, Pwr, Supply, Ser. F, 5.00%, 7/01/13,
AMBAC ............................................................... 6/97 at 100 4,052,215
A1 1,800 IntermountainPwr. Agcy. Fst.Crossover Ser. 86 B, 5.00%, 7/01/16 ....... 6/97 at 100 1,603,674
-------------
5,655,889
-------------
WASHINGTON -- 8.5%
Washington St. Pub. Pwr. Supply Sys. Rev.,
AAA 13,395 Nuclear Proj. No. 1, 5.75%, 7/01/11, MBIA ........................... 7/06 at 102 13,420,852
AAA 2,000 Nuclear Proj. No. 2, 5.55%, 7/01/10, FGIC ........................... 7/03 at 102 1,940,660
AAA 5,000 Nuclear Proj. No. 1, Ser. A, 6.25%, 7/01/17, MBIA ................... 7/02 at 102 5,070,900
-------------
20,432,412
-------------
WEST VIRGINIA -- 1.5%
A2 3,500 Braxton Cnty. Sld. Wst. Auth., Weyerhaeuser Co. Proj., 6.50%, 4/01/25 . 4/05 at 102 3,630,865
-------------
Total Long-Term Investments (cost $359,186,261) 365,279,954
-------------
SHORT-TERM INVESTMENTS** -- 1.3%
A1+ 3,200 Washington St HlthCare Fac. Auth. Rev., 3.95%, 5/01/97, FRDD 3,200,000
-------------
TOTAL INVESTMENTS-- 153.1% (COST $362,386,261) 368,479,954
Other assets in excess of liabilities-- 0.9% 2,204,528
Liquidation value of preferred stock-- (54.0)% (130,000,000)
-------------
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS-- 100% $240,684,482
=============
</TABLE>
- ----------------
* Rating: Using the higher of Standard & Poor's, Moody's or Fitch's rating.
** For purposes of amortized cost valuation, the maturity date of these
instruments is considered to be the earlier of the next date on which the
security can be redeemed at par or the next date on which the rate of
interest is adjusted.
+ These bonds contain embedded caps. See glossary for definition.
++ Option call provisions: date (month/year) and prices of the earliest call or
redemption. There may be other call provisions at varying prices at later
dates.
+++ This bond is prerefunded. See glossary for definition.
- --------------------------------------------------------------------------------
THE FOLLOWING ABBREVIATIONS ARE USED IN PORTFOLIO DESCRIPTIONS:
AMBAC -- American Municipal Bond Assurance Corporation
CAPMAC -- Capital Markets Assurance Corporation
FHA -- Federal Housing Administration
FGIC -- Financial Guaranty Insurance Company
FRDD -- Floating Rate Daily Demand**
FSA -- Financial Security Assurance
G.O. -- General Obligation Bond
MBIA -- Municipal Bond Insurance Association
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
7
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK INVESTMENT
QUALITY MUNICIPAL TRUST INC.
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
ASSETS
Investments, at value
(cost $362,386,261) (Note 1) .................. $368,479,954
Cash ............................................ 21,114
Receivable for investments sold ................. 3,871,553
Interest receivable ............................. 6,722,132
Deferred organization expenses and other assets . 28,065
------------
379,122,818
------------
LIABILITIES
Payable for investments purchased ............... 7,849,593
Dividends payable--common stock ................. 193,723
Dividends payable--preferred stock .............. 13,901
Investment Advisory fee payable (Note 2) ........ 107,685
Administration fee payable (Note 2) ............. 46,151
Other accrued expenses .......................... 227,283
------------
8,438,336
------------
NET INVESTMENT ASSETS $370,684,482
============
Net investment assets were comprised of:
Common stock:
Par value (Note 4) .......................... $ 167,071
Paid-in capital in excess of par ............ 232,077,765
Preferred stock (Note 4) ...................... 130,000,000
------------
362,244,836
Undistributed net investment income ........... 952,205
Accumulated net realized gain ................. 1,393,748
Net unrealized appreciation ................... 6,093,693
------------
Net investment assets, April 30, 1997 ......... $370,684,482
============
Net assets applicable to common
shareholders ................................ $240,684,482
============
Net asset value per common share:
($240,684,482 / 16,707,093 shares of
common stock issued and outstanding) ........ $14.41
======
- --------------------------------------------------------------------------------
THE BLACKROCK INVESTMENT
QUALITY MUNICIPAL TRUST INC.
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
NET INVESTMENT INCOME
Income
Interest and discount earned $10,434,128
-----------
Expenses
Investment advisory 650,394
Administration 278,740
Auction agent 181,181
Custodian 48,000
Reports to shareholders 35,000
Directors 28,000
Audit 19,000
Transfer agent 10,000
Legal 5,000
Miscellaneous 58,331
-----------
Total expenses 1,313,646
-----------
Net investment income 9,120,482
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (NOTE 3)
Net realized gain on investments 1,462,413
Net change in unrealized appreciation
on investments (3,302,831)
-----------
Net loss on investments (1,840,418)
-----------
NET INCREASE IN NET INVESTMENT ASSETS
RESULTING FROM OPERATIONS $ 7,280,064
===========
See Notes to Financial Statements.
8
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK INVESTMENT QUALITY MUNICIPAL TRUST INC.
STATEMENTS OF CHANGES IN
NET INVESTMENT ASSETS (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS YEAR
ENDED ENDED
APRIL 30, OCTOBER 31,
1997 1996
--------- ---------
<S> <C> <C>
INCREASE (DECREASE) IN NET INVESTMENT ASSETS
OPERATIONS:
Net investment income ........................................................ $ 9,120,482 $ 18,067,373
Net realized gain on investments ............................................. 1,462,413 5,454,251
Net change in unrealized appreciation on investments ......................... (3,302,831) 140,869
------------ ------------
Net increase in net investment assets resulting from operations .............. 7,280,064 23,662,493
------------ ------------
DIVIDENDS AND DISTRIBUTIONS:
To common shareholders from net investment income ............................ (6,522,266) (13,156,544)
To common shareholders from net realized gain on investments ................. (266,228 (239,692)
To common shareholders in excess of net realized gain on investments ......... (55,965) --
To preferred shareholders from net investment income ......................... (2,195,913) (4,619,604)
To preferred shareholders from net realized gain on investments .............. (84,500) (89,343)
To preferred shareholders in excess of net realized gain on investments ...... (18,070) --
------------ ------------
Total dividends and distributions ............................................ (9,142,942) (18,105,183)
------------ ------------
Total increase (decrease) ................................................ (1,862,878) 5,557,310
NET INVESTMENT ASSETS
Beginning of period ............................................................. 372,547,360 366,990,050
------------ ------------
End of period ................................................................... $370,684,482 $372,547,360
============ ============
</TABLE>
See Notes to Financial Statements.
9
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK INVESTMENT QUALITY MUNICIPAL TRUST INC.
FINANCIAL HIGHLIGHTS (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE PERIOD
ENDED
SIX MONTHS FEBRUARY 26,
ENDED YEAR ENDED OCTOBER 31, 1993*
APRIL 30, ------------------------------- TO OCTOBER 31,
PER SHARE OPERATING PERFORMANCE: 1997 1996 1995 1994 1993
--------- ---- ---- ---- --------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 14.52 $ 14.18 $ 12.05 $ 14.76 $ 14.10
------- ------- ------- ------- -------
Net investment income 0.55 1.09 1.10 1.06 0.66
Net realized and unrealized gain (loss) on investments (0.11) 0.34 2.16 (2.64) 0.74
------- ------- ------- ------- -------
Net increase (decrease) from investment operations 0.44 1.43 3.26 (1.58) 1.40
------- ------- ------- ------- -------
Dividends and Distributions:
Dividends from net investment income to:
Common shareholders (0.39) (0.79) (0.82) (0.90) (0.45)
Preferred shareholders (0.13) (0.28) (0.31) (0.21) (0.11)
Distributions from net realized gain on investments to:
Common shareholders (0.02) (0.01) -- -- --
Preferred shareholders (0.01) (0.01) -- -- --
Distributions in excess of net realized gain on
investments to:
Common shareholders *** -- -- -- --
Preferred shareholders *** -- -- -- --
------- ------- ------- ------- -------
Total dividends and distributions (0.55) (1.09) (1.13) (1.11) (0.56)
------- ------- ------- ------- -------
Capital charge with respect to issuance of shares -- -- -- (0.02) (0.18)
------- ------- ------- ------- -------
Net asset value, end of period** $ 14.41 $ 14.52 $ 14.18 $ 12.05 $ 14.76#
======= ======= ======= ======= =======
Per share market value, end of period** $12.625 $ 12.44 $ 12.00 $10.375 $14.125
======= ======= ======= ======= =======
TOTAL INVESTMENT RETURN+ 4.69% 10.41% 24.01% (20.98)% 3.36%
======= ======= ======= ======= =======
RATIOS TO AVERAGE NET ASSETS OF COMMON
SHAREHOLDERS:+++
Expenses 1.08%++ 1.12% 1.16% 1.14% 1.04%++
Net investment income before preferred stock dividends 7.50%++ 7.57% 8.36% 7.80% 6.86%++
Preferred stock dividends 1.89%++ 1.97% 2.34% 1.55% 1.11%++
Net investment income available to common shareholders 5.61%++ 5.60% 6.02% 6.25% 5.75%++
------- ------- ------- ------- -------
SUPPLEMENTAL DATA:
Average net assets of common shareholders (in thousands) $243,074 $238,540 $219,740 $226,935 $236,810
Portfolio turnover 86% 164% 182% 210% 110%
Net assets of common shareholders, end of period
(in thousands) $240,684 $242,547 $236,990 $201,343 $246,631
Preferred stock outstanding (in thousands) $130,000 $130,000 $130,000 $130,000 $130,000
Asset coverage per share of preferred stock,
end of period## $ 71,285 $ 71,644 $ 70,575 $127,440 $144,858
</TABLE>
- -----------------
* Commencement of investment operations.
** Net asset value and market value are published in THE WALL STREET JOURNAL
each Monday.
*** Actual amount paid to common shareholders for the six months ended April
30, 1997 was $0.00335 per share, and the actual amount paid to preferred
shareholders was $0.00108 per common share.
# Net asset value immediately after the closing of the first public offering
was $14.05. ## A stock split occurred on July 24, 1995 (Note 4).
+ Total investment return is calculated assuming a purchase of common stock
at the current market price on the first day and a sale at the current
market price on the last day of the period reported. Dividends and
distributions, if any, are assumed for purposes of this calculation, to be
reinvested at prices obtained under the Trust's dividend reinvestment plan.
Total investment return does not reflect brokerage commissions. Total
investment returns for periods of less than one year are not annualized.
++ Annualized.
+++ Ratios are calculated on the basis of income, expenses and preferred stock
dividends applicable to both the common and preferred stock relative to the
average net assets of common shareholders.
The information above represents the unaudited operating performance data for a
share of common stock outstanding, total investment return, ratios to average
net assets and other supplemental data for the periods indicated. This
information has been determined based upon financial information provided in the
financial statements and market value data for the Trust's shares.
See Notes to Financial Statements.
10
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK INVESTMENT
QUALITY MUNICIPAL TRUST INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
- --------------------------------------------------------------------------------
NOTE 1. ACCOUNTING The BlackRock Investment Quality Municipal Trust
POLICIES Trust Inc. (the "Trust") was organized in Maryland
on November 19, 1992 as a diversified, closed-
end management investment company. The Trust had no transactions until February
16, 1993 when it sold 7,093 shares of common stock for $100,012 to BlackRock
Financial Management, Inc. (the "Adviser"). Investment operations commenced on
February 26, 1993.
The Trust's investment objective is to manage a diversified portfolio of
investment-grade securities to achieve high current income exempt from regular
Federal income tax consistent with the preservation of capital. 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: Municipal securities (including commitments to purchase
such securities on a "when-issued" basis) are valued on the basis of prices
provided by dealers or pricing services which uses information with respect to
transactions in bonds, quotations from bond dealers, market transactions in
comparable securities and various relationships between securities in
determining values. 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 amortized cost, if their term to maturity from date of purchase is 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.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on the trade date. Realized gains and losses are calculated on the
identified cost basis. Interest income is recorded on the accrual basis and the
Trust amortizes premium and accretes original issue discount on securities
purchased using the interest method.
FEDERAL INCOME TAXES: It is the Trust's intention to continue to meet the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute sufficient net income to shareholders. For this
reason and because substantially all of the Trust's gross income consists of
tax-exempt interest, no Federal income tax provision is required.
DIVIDENDS AND DISTRIBUTIONS: The Trust declares and pays dividends and
distributions to common shareholders monthly from net investment income, net
realized short-term capital gains and other sources, if necessary. Net long-term
capital gains, if any, in excess of loss carryforwards may be distributed
annually. Dividends and distributions are recorded on the ex-dividend date.
Dividends and distributions to preferred shareholders are accrued and determined
as described in Note 4.
DEFERRED ORGANIZATION EXPENSES: A total of $65,000 was incurred in connection
with the organization of the Trust. These costs have been deferred and are being
amortized ratably over a period of sixty months from the date the Trust
commenced investment operations.
ESTIMATES: The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
NOTE 2. AGREEMENTS The Trust has an 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 businesses and an Administration Agreement with Princeton
Administrators, L.P. (the "Administrator"), an indirect wholly-owned subsidiary
of Merrill Lynch & Co., Inc.
The investment fee paid to the Adviser is computed weekly and payable monthly at
an annual rate of 0.35% of the Trust's average weekly net investment assets. The
administration fee paid to the Administrator is also computed weekly and payable
monthly at an annual rate of 0.15% of the Trust's average weekly net investment
assets.
11
<PAGE>
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. The Administrator pays occupancy and certain
clerical and accounting costs of the Trust. The Trust bears all other costs and
expenses.
NOTE 3. PORTFOLIO Purchases and sales of investment securities,
SECURITIES other than short-term investments, for the six
months ended April 30, 1997 aggregated
$317,934,596 and $315,419,511, respectively.
The federal income tax basis of the Trust's investments at April 30, 1997 was
$362,467,483, and accordingly, net unrealized appreciation was $6,012,471 (gross
unrealized appreciation--$7,963,902, gross unrealized depreciation--$1,951,431).
NOTE 4. CAPITAL There are 200 million shares of $.01 par value
common stock authorized. Of the 16,707,093 common
shares outstanding at April 30, 1997, the Adviser
owned 7,093 shares. As of April 30, 1997, there were 5,200 shares of Preferred
Stock outstanding as follows: Series T7--2,600 and Series T28--2,600.
Offering costs ($1,046,346) incurred in connection with the underwriting of
the Trust's common stock have been charged to paid-in capital in excess of par
of the common stock.
The Trust may classify or reclassify any unissued shares of common stock into
one or more series of preferred stock. On April 1, 1993, the Trust reclassified
2,600 shares of common stock and issued 2 series of Auction Market Preferred
Stock ("Preferred Stock") as follows: Series T7--1,300 shares, Series T28--1,300
shares. The Preferred Stock had a liquidation value of $50,000 per share plus
any accumulated but unpaid dividends. On May 16, 1995 shareholders approved a
proposal to split each share of the Trust's Auction Market Preferred Stock into
two shares and simultaneously reduce each share's liquidation preference from
$50,000 to $25,000 per share plus any accumulated but unpaid dividends. The
stock split occurred on July 24, 1995.
The underwriting discount ($1,950,000) and offering costs ($328,828) incurred
in connection with the Preferred Stock offering have been charged to paid-in
capital in excess of par of the common stock.
Dividends on Series T7 are cumulative at a rate which is reset every 7 days
based on the results of an auction. Dividends on Series T28 are also cumulative
at a rate which is reset every 28 days based on the results of an auction.
Dividend rates ranged from 3.30% to 4.99% during the six months ended April 30,
1997.
The Trust may not declare dividends or make other distributions on shares of
common stock or purchase any such shares if, at the time of the declaration,
distribution, or purchase, asset coverage with respect to the outstanding
Preferred Stock would be less than 200%.
The Preferred Stock is redeemable at the option of the Trust, in whole or in
part, on any dividend payment date at $25,000 per share plus any accumulated or
unpaid dividends whether or not declared. The Preferred Stock is also subject to
mandatory redemption at $25,000 per share plus any accumulated or unpaid
dividends, whether or not declared, if certain requirements relating to the
composition of the assets and liabilities of the Trust as set forth in the
Articles of Incorporation are not satisfied.
The holders of Preferred Stock have voting rights equal to the holders of
common stock (one vote per share) and will vote together with holders of shares
of common stock as a single class. However, holders of Preferred Stock are also
entitled to elect two of the Trust's directors. In addition, the Investment
Company Act of 1940 requires that, along with approval by stockholders that
might otherwise be required, the approval of the holders of a majority of any
outstanding preferred shares, voting separately as a class would be required to
(a) adopt any plan of reorganization that would adversely affect the preferred
shares, and (b) take any action requiring a vote of security holders, including,
among other things, changes in the Trust's subclassification as a closed-end
investment company or changes in its fundamental investment restrictions.
NOTE 5. DIVIDENDS Subsequent to April 30, 1997, the Board of
AND DISTRIBUTIONS Directors of the Trust declared a dividend from
undistributed earnings of $0.065625 per common
share payable May 30, 1997 to shareholders of record on May 15, 1997.
For the period May 1 through May 31, 1997 dividends declared on Preferred
Stock totalled $391,187 in aggregate for the two outstanding Preferred Stock
series.
12
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK INVESTMENT QUALITY MUNICIPAL TRUST INC.
DIVIDEND REINVESTMENT PLAN
- --------------------------------------------------------------------------------
Pursuant to the Trust's Dividend Reinvestment Plan (the "Plan"),
shareholders will automatically have all distributions of dividends and capital
gains reinvested by State Street Bank and Trust Company (the "Plan Agent") in
Trust shares. 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 for the participants' accounts. The Trust will not issue shares
under the Plan.
Participants in the Plan may withdraw from the Plan upon written notice to
the Plan Agent and will receive certificates for whole Trust shares and a cash
payment 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 address is on the front of
this report.
- --------------------------------------------------------------------------------
ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
There have been no material changes in the Trust's investment objectives
or policies that have not been approved by the shareholders, or to its charter
or by-laws, or in the principal risk factors associated with investment in the
Trust. There have been no changes in the persons who are primarily responsible
for the day-to-day management of the Trust's portfolio.
The Annual Meeting of Trust Shareholders was held April 15, 1997 to vote
on the following matters: (1)To elect four Directors to serve as follows:
DIRECTOR CLASS TERM EXPIRING
------- ----- ---- -------
Richard E.Cavanagh ........... I 3 years 2000
James Grosfeld ............... I 3 years 2000
James Clayburn LaForce, Jr. .. I 3 years 2000
Walter F. Mondale ............ II 3 years 2000
Directors whose term of office continues beyond this meeting are Andrew F.
Brimmer, Kent Dixon, Laurence D. Fink, Frank J. Fabozzi, and Ralph L.
Schlosstein.
(2)To ratify the selection of Deloitte & Touche LLP as independent public
accountants of the Trust for the fiscal year ending October 31, 1997.
Shareholders elected the four Directors and ratified the selection of Deloitte &
Touche LLP. The results of the voting was as follows:
VOTES FOR VOTES AGAINST ABSTENTIONS
--------- ------------- -----------
Richard E.Cavanagh .......... 3,342 0 21
James Grosfeld .............. 11,390,421 0 92,179
James Clayburn LaForce, Jr. . 11,389,721 0 92,879
Walter F. Mondale ........... 11,376,445 0 106,155
Ratification of Deloitte &
Touche LLP ................ 11,350,222 25,489 106,888
13
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK INVESTMENT QUALITY MUNICIPAL TRUST INC.
INVESTMENT SUMMARY
- --------------------------------------------------------------------------------
THE TRUST'S INVESTMENT OBJECTIVE
The BlackRock Investment Quality Municipal Trust's investment objective is to
provide high current income exempt from regular Federal income tax consistent
with the preservation of capital.
WHO MANAGES THE TRUST?
BlackRock Financial Management, Inc. ("BlackRock" or the "Adviser") is the
investment adviser for the Trust. BlackRock is a registered investment adviser
specializing in fixed income securities. Currently, BlackRock manages over $48
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 on either the New York or American Stock
Exchanges, several open-end funds and over 100 separate accounts for various
clients in the U.S. and overseas. BlackRock is a subsidiary of PNC Asset
Management Group which is a division of PNC Bank, N.A., one of the nation's
largest banking organizations.
WHAT CAN THE TRUST INVEST IN?
Under normal conditions, the Trust expects to continue to manage its assets so
that at least 80% of its investments are rated investment grade ("BBB" by
Standard & Poor's and "Baa" by Moody's Investor Services) and up to 20% of its
assets may instead be deemed to be of equivalent credit quality by the Adviser.
Examples of the types of securities that the Trust may invest in include general
obligation bonds, which are backed by the full taxing power of the municipality
(states, counties and cities), and revenue bonds, which are backed by a revenue
source associated with the issuing municipality or by a special tax. Revenue
bonds include those that are backed by revenues generated by universities,
hospitals, housing developments, utilities, public facilities, toll roads,
airports, etc.
WHAT IS THE ADVISER'S INVESTMENT STRATEGY?
The Adviser will manage the assets of the Trust in accordance with the Trust's
investment objective and policies to seek to achieve its objective by investing
in municipal debt securities that are diversified both geographically and
according to revenue source. As such, the Adviser actively manages the assets in
relation to market conditions and interest rate changes. In seeking the
investment objective, the Trust does not expect to invest more than 25% of its
total assets in municipals that are issued by the same state. Depending on yield
and portfolio allocation considerations, the Adviser may choose to invest a
portion of the Trust's assets in securities which pay interest that is subject
to AMT (alternative minimum tax).
Under current market conditions the use of leverage increases the income earned
by the Trust. The Trust employs leverage primarily through the issuance of
preferred stock. Preferred stockholders will receive dividends based on
short-term rates in exchange for allowing the Trust to borrow additional assets.
These assets will be invested in longer-term assets which typically offer higher
interest rates and the difference between the cost of the dividends paid to
preferred stockholders and the interest earned on the longer-term securities
will provide higher income levels for common stockholders in most interest rate
environments. The Trust issued preferred stock to leverage the portfolio at
approximately 35% of total assets. To protect the common stockholders from
increases in the cost of the preferred stock dividends, the Trust invests in
securities called "additional interest bonds" or "embedded caps", which can help
to limit the risk of increasing costs of leverage in a rising interest rate or
flattening yield curve environment. These bonds pay additional interest when
short-term municipal interest rates rise above a predetermined rate, or "cap".
These securities are used, when available in the marketplace, to attempt to
offset increases in the interest paid to preferred stockholders and may allow
the Trust to maintain dividend levels to common stockholders in interest rate
environments where the yield curve is either flat or inverted. See "Leverage
Considerations in the Trust" below.
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.
14
<PAGE>
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 andTrust 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 THE TRUST
Leverage increases the duration (or price sensitivity of the net assets with
respect to changes in interest rates) of the Trust, which can improve the
performance of the Trust in a declining rate environment, but can cause net
assets to decline faster in a rapidly rising interest rate environment. The
Trust may reduce, or unwind, the amount of leverage employed should BlackRock
consider that reduction to be in the best interests of the Trust. BlackRock's
portfolio managers continuously monitor and regularly review the Trust's use of
leverage and maintain the ability to unwind the leverage if that course is
chosen. As mentioned above, the Trust will attempt to maintain a percentage of
its investments in additional interest bonds which may help protect the Trust's
income from increases in the cost of leverage.
SPECIAL CONSIDERATIONS AND RISK FACTORS RELEVANT TO THE TRUST
THE TRUST IS INTENDED TO BE A LONG-TERM INVESTMENT AND IS NOT A SHORT-TERM
TRADING VEHICLE.
INVESTMENT OBJECTIVE. Although the objective of the Trust is to provide high
current income exempt from regular Federal income tax consistent with the
preservation of capital, there can be no assurance that this objective will be
achieved.
DIVIDEND CONSIDERATIONS. The income and dividends paid by the Trust are likely
to vary over time as fixed income market conditions change. Future dividends may
be higher or lower than the dividend the Trust is currently paying.
LEVERAGE. The Trust utilizes leverage through preferred stock, 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 (NYSE symbol: BKN) 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.
INVESTMENT GRADE MUNICIPAL OBLIGATIONS. The value of municipal debt securities
generally varies inversely with changes in prevailing market interest rates.
Depending on the amount of call protection that the securities in the Trust
have, the Trust may be subject to certain reinvestment risks in environments of
declining interest rates.
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.
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.
15
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK INVESTMENT QUALITY MUNICIPAL TRUST INC.
GLOSSARY
- --------------------------------------------------------------------------------
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.
DISCOUNT:
When a fund's net asset value is greater than its stock price the fund is said
to be trading at a discount.
DIVIDEND:
Income generated by securities in a portfolio and distributed to shareholders
after the deduction of expenses. This Trust declares and pays dividends to
common shareholders on a monthly basis.
DIVIDEND REINVESTMENT:
Shareholders may elect to have all dividends and distributions of capital gains
automatically reinvested into additional shares of the Trust.
EMBEDDED CAP BONDS:
Also known as additional interest municipal bonds. These securities are intended
to protect the income that a fund earns through leverage from significant
increases in short-term rates. The coupon on these bonds will increase if short
term rates rise significantly.
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.
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.
PREMIUM:
When a fund's stock price is greater than its net asset value, the fund is said
to be trading at a premium.
PREREFUNDED BONDS:
These securities are collateralized by U.S. Government securities which are held
in escrow and are used to pay principal and interest on the tax exempt issue and
retire the bond in full at the date indicated, typically at a premium to par.
16
<PAGE>
- --------------------------------------------------------------------------------
BLACKROCK FINANCIAL MANAGEMENT, INC.
SUMMARY OF CLOSED-END FUNDS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TAXABLE TRUSTS
- ---------------------------------------------------------------------------------------------------------------------------
STOCK MATURITY
PERPETUAL TRUSTS SYMBOL DATE
------ --------
<S> <C> <C>
The BlackRock Income Trust Inc. BKT N/A
The BlackRock North American Government Income Trust Inc. BNA N/A
TERM TRUSTS
The BlackRock 1998 Term Trust Inc. BBT 12/98
The BlackRock 1999 Term Trust Inc. BNN 12/99
The BlackRock Target Term Trust Inc. BTT 12/00
The BlackRock 2001 Term Trust Inc. BLK 06/01
The BlackRock Strategic Term Trust Inc. BGT 12/02
The BlackRock Investment Quality Term Trust Inc. BQT 12/04
The BlackRock Advantage Term Trust Inc. BAT 12/05
The BlackRock Broad Investment Grade 2009 Term Trust Inc. BCT 12/09
TAX EXEMPT TRUSTS
- ---------------------------------------------------------------------------------------------------------------------------
STOCK MATURITY
PERPETUAL TRUSTS SYMBOL DATE
------ --------
The BlackRock Investment Quality Municipal Trust Inc. BKN N/A
The BlackRock California Investment Quality Municipal Trust Inc. RAA N/A
The BlackRock Florida Investment Quality Municipal Trust RFA N/A
The BlackRock New Jersey Investment Quality Municipal Trust Inc. RNJ N/A
The BlackRock New York Investment Quality Municipal Trust Inc. RNY N/A
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)
OR CONSULT WITH YOUR FINANCIAL ADVISOR.
17
<PAGE>
- --------------------------------------------------------------------------------
BLACKROCK FINANCIAL MANAGEMENT, INC.
AN OVERVIEW
- --------------------------------------------------------------------------------
BlackRock Financial Management (BlackRock) is a registered investment
adviser which specializes in managing high quality fixed income securities, both
taxable and tax exempt. BlackRock currently manages over $48 billion of assets
across the government, mortgage, corporate and municipal sectors. These assets
are managed on behalf of many individual investors in twenty-one closed-end
funds traded on either the New York or American stock exchanges, and several
open-end funds and on behalf of more than 100 institutional clients in the
United States and overseas.
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 markets, 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 a 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.
IF YOU WOULD LIKE FURTHER INFORMATION
PLEASE DO NOT HESITATE TO CALL BLACKROCK AT (800) 227-7BFM
18
<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
Keith T. Anderson, VICE PRESIDENT
Michael C. Huebsch, VICE PRESIDENT
Robert S. Kapito, VICE PRESIDENT
Kevin Klingert, VICE PRESIDENT
Richard M. Shea, VICE PRESIDENT/TAX
Henry Gabbay, TREASURER
James Kong, ASSISTANT TREASURER
Karen H. Sabath, SECRETARY
INVESTMENT ADVISER
BlackRock Financial Management, Inc.
345 Park Avenue
New York, NY 10154
(800) 227-7BFM
ADMINISTRATOR
Princeton Administrators, L.P.
P.O. Box 9095
Princeton, NJ 08543-9095
(800) 688-0928
CUSTODIAN AND TRANSFER AGENT
State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171
(800) 699-1BFM
AUCTION AGENT
Bankers Trust Company
4 Albany Street
New York, NY 10006
INDEPENDENT AUDITORS
Deloitte & Touche LLP
Two World Financial Center
New York, NY 10281-1434
LEGAL COUNSEL
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, NY 10022
The accompanying financial statements as of April 30, 1997 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 INVESTMENT QUALITY MUNICIPAL
TRUST INC.
c/o Princeton Administrators, L.P.
P.O. Box 9095
Princeton, NJ 08543-9095
(800) 227-7BFM
09247D-105
09247D-204
09247D-303
[RECYCLE LOGO] Printed on recycled paper
THE BLACKROCK
INVESTMENT QUALITY
MUNICIPAL TRUST INC.
================================================================================
SEMI-ANNUAL REPORT
APRIL 30, 1997
[GRAPHIC]
