- --------------------------------------------------------------------------------
THE BLACKROCK INVESTMENT QUALITY MUNICIPAL TRUST INC.
ANNUAL REPORT TO SHAREHOLDERS
REPORT OF INVESTMENT ADVISER
- --------------------------------------------------------------------------------
November 30, 1999
Dear Shareholder:
After easing monetary policy three times during the fourth quarter of 1998,
the Federal Reserve reversed its trend by raising the Fed funds target rate 75
basis points (to 5.50%) over the course of 1999 in response to robust GDP, low
unemployment and rising equity prices. U.S. Treasury yields rose significantly
during the past twelve months, with the yield of the 30-year Treasury rising
above 6.00% for the first time since May 1998.
Despite the rise in Treasury yields, continued strong economic growth may
spur the Federal Reserve to proactively fight perceived inflation through
continued monetary policy tightening in 2000. Until the inflation picture
becomes clearer, we expect interest rates to remain largely range-bound.
Accordingly, we will continue to seek the most attractive relative value
opportunities and utilize our proprietary risk management systems to help the
Trust to achieve its investment objectives.
This report contains a summary of market conditions during the annual
period and a review of portfolio strategy by your Trust's managers in addition
to the Trust's audited financial statements and a detailed portfolio list of the
portfolio's holdings. Continued thanks for your confidence in BlackRock. We
appreciate the opportunity to help you achieve your long-term investment goals.
Sincerely,
/s/ Laurence D. Fink /s/ Ralph L. Schlosstein
- -------------------- ------------------------
Laurence D. Fink Ralph L. Schlosstein
Chairman President
1
<PAGE>
November 30, 1999
Dear Shareholder:
We are pleased to present the annual report for The BlackRock Investment
Quality Municipal Trust Inc. ("the Trust") for the fiscal year ended October 31,
1999. 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 NAV
over the past twelve months:
<TABLE>
<CAPTION>
10/31/99 10/31/98 CHANGE HIGH LOW
------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------
STOCK PRICE $ 13.125 $ 15.4375 (14.98)% $ 16.0625 $ 12.9375
- ---------------------------------------------------------------------------------------------
NET ASSET VALUE (NAV) $ 13.95 $ 15.78 (11.60)% $ 15.79 $ 13.87
- ---------------------------------------------------------------------------------------------
</TABLE>
THE FIXED INCOME MARKETS
The U.S. economy sustained its growth during the past twelve months, as
U.S. exports and manufacturing continued to rebound. Additionally, consumer
strength remains an important contributor to economic growth as low unemployment
and rising incomes fuel domestic demand. After lowering interest rates three
times in the second half of 1998, and despite inflation concerns as measured by
CPI and PPI remaining relatively benign, the Federal Reserve adopted a
tightening bias and raised its target for the Federal funds rate from 4.75% to
5.50% between June and November 1999. In a statement accompanying the latest
tightening on November 16, it was indicated that the Fed believes that growth
"continues in excess of the economy's growth potential"; nevertheless, the Fed
reversed their tightening stance by adopting a neutral bias.
After a brief rally in late 1998, Treasury yields rose dramatically during
1999. Over the period, the yield of the 30-year Treasury increased by 100 basis
points, closing at 6.16% on October 31. Bond prices, which move inversely to
their yields, were punished by the constant threat of inflation in response to
the strong economic data and the market's uncertainty over the Fed's policy
throughout the year. Recently, a weaker dollar, higher commodity prices and
strong gains in the U.S. and European equity markets have depressed overall
demand for fixed income securities.
Municipals underperformed the taxable market during the period, posting a
- -1.78% total return as measured by the LEHMAN MUNICIPAL BOND INDEX versus the
LEHMAN AGGREGATE'S 0.53%. For much of the period, intermediate maturity
securities outperformed longer maturity municipal securities. As interest rates
rose to their highest level in four years during the third quarter of 1999,
retail demand for municipal securities has increased dramatically. This rise in
municipal interest rates is directly related to the increase of alternative
taxable investment spreads over Treasuries. Currently municipals are
substantially cheaper then their long-term average valuations as compared to
Treasuries. Unlike the taxable market, which has witnessed a surge of supply by
issuers trying to avoid potential year end market dislocations due to Y2K, the
volume of new municipal issuance is down significantly from 1998's pace,
creating a positive technical environment. We believe that the current market
environment offers some of the most attractive investment opportunities in
municipals in the last few years.
THE TRUST'S PORTFOLIO AND INVESTMENT STRATEGY
In seeking to achieve its investment objectives, the Trust's portfolio is
actively managed to diversify exposure to various
2
<PAGE>
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 via auction rate preferred stock
to enhance its income by borrowing at short-term municipal rates and investing
the proceeds in longer maturity issues that 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. While the amount of preferred shares outstanding has
remained constant, the percentage of leverage utilized by the Trust fluctuates
modestly as the net asset value moves. Over the period, the Trust's borrowing
costs continue to be profitable.
During the period, the Trust sought to take advantage of tight municipal
credit spreads to improve its overall credit profile. Specifically, the Trust
emphasized higher rated securities over lower rated securities. Additionally,
the Trust maintained a defensive coupon structure, which was achieved by adding
premium coupons, which positively contributed to the Trust's total returns as
interest rates rose during the period.
The following charts compare the Trust's current and October 31, 1998 asset
composition and credit quality allocations:
- --------------------------------------------------------------------------------
SECTOR BREAKDOWN
- --------------------------------------------------------------------------------
SECTOR OCTOBER 31, 1999 OCTOBER 31, 1998
- --------------------------------------------------------------------------------
Transportation 23% 18%
- --------------------------------------------------------------------------------
City, County & State 15% 17%
- --------------------------------------------------------------------------------
Hospital 13% 12%
- --------------------------------------------------------------------------------
Industrial & Pollution Control 10% 13%
- --------------------------------------------------------------------------------
Power 8% 8%
- --------------------------------------------------------------------------------
University/School 7% 7%
- --------------------------------------------------------------------------------
Lease Revenue 6% 6%
- --------------------------------------------------------------------------------
Housing 5% 5%
- --------------------------------------------------------------------------------
Water & Sewer 5% 5%
- --------------------------------------------------------------------------------
Tax Revenue 4% 6%
- --------------------------------------------------------------------------------
Resource Recovery 2% 2%
- --------------------------------------------------------------------------------
Special District 2% -
- --------------------------------------------------------------------------------
Miscellaneous Revenue - 1%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CREDIT RATING* OCTOBER 31, 1999 OCTOBER 31, 1998
- --------------------------------------------------------------------------------
AAA/Aaa 65% 58%
- --------------------------------------------------------------------------------
AA/Aa 10% 12%
- --------------------------------------------------------------------------------
A/A 14% 15%
- --------------------------------------------------------------------------------
BBB/Baa 11% 15%
- --------------------------------------------------------------------------------
- ----------
* Using the higher of Standard & Poor's, Moody's or Fitch's rating.
3
<PAGE>
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 S. Kapito /s/ Kevin Klingert
- -------------------- ------------------
Robert S. 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 10/31/99: $13.125
- --------------------------------------------------------------------------------
Net Asset Value as of 10/31/99: $13.95
- --------------------------------------------------------------------------------
Yield on Closing Stock Price as of 10/31/99 ($13.125)1: 6.57 %
- --------------------------------------------------------------------------------
Current Monthly Distribution per Share2: $ 0.0719
- --------------------------------------------------------------------------------
Current Annualized Distribution per Share2: $ 0.8628
- --------------------------------------------------------------------------------
1 Yield on Closing Stock Price is calculated by dividing the current annualized
distribution per share by the closing stock price per share.
2 The Distribution
is not constant and is subject to change.
4
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK INVESTMENT QUALITY MUNICIPAL TRUST INC.
PORTFOLIO OF INVESTMENTS OCTOBER 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL OPTION CALL VALUE
RATING* AMOUNT PROVISIONS+ (NOTE 1)
(UNAUDITED) (000) DESCRIPTION (UNAUDITED)
============= =========== =============================================== ================ ===========
<S> <C> <C> <C> <C>
LONG-TERM INVESTMENTS-153.5%
CALIFORNIA-16.5%
Aa2 $ 1,220 California Hsg. Fin. Agcy. Rev., Home
Mtg., Ser. C, 5.65%, 8/01/14 .............. 2/04 at 102 $ 1,215,620
AA- 5,770 California St. G.O., 5.00%, 10/01/14 ........ 10/07 at 101 5,415,607
AAA 8,000 Foothill Eastern Corridor Agcy. Toll Road Rev.,
5.00%, 1/15/16, MBIA ..................... 1/10 at 101 7,322,880
AAA 15,460 Los Angeles Cnty. Asset Leasing Corp. Rev.,
5.95%, 12/01/07, AMBAC .................... No Opt. Call 16,651,038
University of California Rev., Research Fac.,
Ser. B,
Aaa 2,000++ 6.10%, 9/01/03 ............................ N/A 2,160,400
Aaa 3,305++ 6.20%, 9/01/03 ............................ N/A 3,581,596
Aaa 2,000++ 6.25%, 9/01/03 ............................ N/A 2,170,880
-----------
38,518,021
COLORADO-14.3% -----------
Aaa 3,100 Arapahoe Cnty. Cap. Impvt. Hwy. Rev.,
Trust Fund, Ser. E, Zero Coupon, 8/31/04 ... No Opt. Call 2,440,103
Denver City & Cnty. Arpt. Rev.,
AAA 1,000 Ser. A, 5.60%, 11/15/20, MBIA .............. 11/05 at 102 957,040
BBB+ 3,000 Ser. C, 6.50%, 11/15/06 .................... 11/02 at 102 3,134,280
BBB+ 1,120 Ser. C, 6.65%, 11/15/05 .................... 11/02 at 102 1,176,437
Aaa 3,705+ Ser. D, 7.00%, 11/15/01 .................... N/A 3,888,879
BBB+ 14,085 Ser. D, 7.00%, 11/15/25 .................... 11/01 at 100 14,447,689
E-470 Pub. Hwy. Auth. Rev., Ser. B,
AAA 3,000 Zero Coupon, 9/01/11, MBIA ................. No Opt. Call 1,584,480
AAA 10,000 Zero Coupon, 9/01/18, MBIA ................. No Opt. Call 3,195,900
Aaa 2,250++ 6.90%, 8/31/05 ............................. N/A 2,542,432
-----------
33,367,240
CONNECTICUT-1.1% -----------
BBB- Mashantuchet Western Pequot Tribe, Spl. Rev.,
3,000 5.50%, 9/01/28 ............................. 9/09 at 101 2,639,130
-----------
DISTRICT OF COLUMBIA-2.0%
District of Columbia G.O., Ser. E, CAPMAC,
AAA 70++ 6.00%, 6/01/03 ............................. N/A 74,410
AAA 1,830 6.00%, 6/01/09 ............................. 6/03 at 102 1,890,573
AAA 3,000 Washington D.C. Convention Ctr. Auth., Ded. 2,741,910
Tax Rev., 5.25%, 10/01/17, AMBAC ........... 10/08 at 101 -----------
4,706,893
-----------
FLORIDA-2.5%
AAA 1,735 Florida Hsg. Fin. Agcy. Rev., Sngl. Fam. Mtg.,
Ser. 1994-A, 6.55%, 7/01/14, GNMA .......... 1/05 at 102 1,785,367
BBB 4,000 Santa Rosa Bay Bridge Auth. Rev.,
6.25%, 7/01/28 ............................. 7/06 at 102 3,984,000
-----------
5,769,367
GEORGIA-1.1% -----------
A 3,000 Burke Cnty. Dev. Auth. P.C.R., Pwr. Co.,
Plant Vogtle,
3rd Ser., 5.45%, 5/01/34 ................... 5/04 at 102 2,631,540
-----------
ILLINOIS-9.9%
AAA 2,500 Chicago Waste Wtr. Transmission Rev.,
5.125%, 1/01/25, FGIC ...................... 1/06 at 102 2,167,875
AAA 5,050 Chicago Wtr. Rev., 5.25%, 11/01/23, FGIC ..... 11/07 at 102 4,523,941
AAA 3,000++ Cook Cnty. Cap. Impt.,
5.875%, 11/15/06, FGIC ..................... N/A 3,199,080
AAA 4,165 Cook Cnty. G.O., Ser. A,
5.20%, 11/15/08, MBIA ...................... 11/07 at 101 4,162,668
Illinois Edl. Fac. Auth. Rev., Loyola Univ., FGIC,
AAA 4,000++ 5.45%, 7/01/05 ............................. N/A 4,035,400
AAA 5,000++ 5.70%, 7/01/05 ............................. N/A 5,094,950
-----------
23,183,914
INDIANA-3.5% -----------
BBB 7,595 Indianapolis Arpt. Auth. Rev., Spl. Fac. Fed.
Express Corp. Proj., 7.10%, 1/15/17 .........7/04 at 102 8,131,055
-----------
</TABLE>
See Notes to Financial Statements.
5
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL OPTION CALL VALUE
RATING* AMOUNT PROVISIONS+ (NOTE 1)
(UNAUDITED) (000) DESCRIPTION (UNAUDITED)
============= =========== =============================================== ================ ===========
<S> <C> <C> <C> <C>
KENTUCKY-7.7%
AAA $ 2,850 Boone Cnty. P.C.R., 5.50%, 1/01/24, MBIA ..... 1/04 at 102 $ 2,703,909
AAA 15,000 Kentucky St. Tpke. Auth., Econ. Dev.
Road Rev., 5.75%, 7/01/13, AMBAC ........... 7/03 at 102 15,343,200
-----------
18,047,109
LOUISIANA-7.9% -----------
AAA 14,400++ Louisiana Pub. Fac. Auth. Hosp. Rev.,
Our Lady of the Lake Regl. Med. Ctr.,
5.90%, 12/01/03, FSA ....................... N/A 15,332,976
AAA 2,860++ Louisiana Stadium & Expo Dist., Htl.
Ocpcy. Tax, 6.00%, 7/01/06, FGIC ........... N/A 3,074,786
-----------
18,407,762
-----------
MARYLAND-5.6%
Aa2 9,640 Maryland St. Dept. Hsg. & Comn. Dev. Admin.,
Sngl. Fam. Prog., Ser. 2, 6.55%, 4/01/26.... 4/05 at 102 9,836,271
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 3,235,674
-----------
13,071,945
-----------
MASSACHUSETTS-2.2%
AAA 6,000 Massachusetts St. Hlth. & Edl. Fac. Auth. Rev.,
Hallmark Hlth. Sys.,
Ser. A, 5.00%, 7/01/21, FSA ................ 7/08 at 101 5,159,280
-----------
MICHIGAN-3.9%
AAA 4,000 Greater Detroit Res. Rec. Auth. Rev., Ser. A,
6.25%, 12/13/08, AMBAC ..................... No Opt.Call 4,281,480
AAA 5,000 River Rouge Sch. Dist., 5.625%, 5/01/22, FSA . 5/03 at 101.5 4,752,050
-----------
9,033,530
-----------
MISSOURI-1.7%
Lake of the Ozarks Cmnty. Brdg. Corp.,
Brdg. Sys. Rev.,
NR 2,000 5.25%, 12/01/14 ............................ 12/08 at 102 1,785,220
NR 2,500 5.25%, 12/01/26 ............................ 12/08 at 102 2,100,675
-----------
3,885,895
-----------
NEVADA-1.7%
AAA 3,750 Washoe Cnty. Arpt. Auth., Arpt. Sys. Impvt.
Rev., Ser. B, 5.80%, 7/0 1/09, MBIA ....... 7/03 at 102 3,854,138
-----------
NEW YORK-27.1%
AAA 5,400 Metropolitan Trans. Auth. Commuter Fac. Rev.,
Ser. A, 5.75%, 7/01/2, MBIA ................ 7/07 at 101.5 5,262,192
New York City G.O.,
A 4,140 Ser. A, 6.00%, 8/01/05 ..................... No Opt. Call 4,343,191
AAA 3,000 Ser. D, 5.60%, 11/01/05, AMBAC ............. No Opt. Call 3,107,340
A 7,000 Ser. E, 6.50%, 2/15/06 ..................... No Opt. Call 7,519,540
A 6,440++ Ser. H, 7.20%, 2/01/02 ..................... N/A 6,905,483
A 560 Ser. H, 7.20%, 2/01/13 ..................... 2/02 at 101.5 591,349
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 4,114,800
A 1,000 6.00%, 1/01/15 ............................. 1/04 at 102 994,720
AAA 9,375 New York City Mun. Wtr. Fin. Auth.,
Wtr. & Swr. Rev., Ser. A,
5.125%, 6/15/22, AMBAC ..................... 6/07 at 101 8,291,063
AA+ 4,000 New York City Transitional Fin. Auth. Rev.,
Ser. C, 4.75%, 5/01/23 ..................... 5/08 at 102 3,282,360
AAA 3,000++ New York St. Dorm. Auth. Rev., St. Univ. Edl.
Fac., Ser. B, 6.10%, 5/15/04 ............... N/A 3,228,450
A- 1,955 New York St. Hsg. Fin. Agcy., Hlth. Fac. of
New York City, Ser. A, 6.375%, 11/01/04 .... No Opt. Call 2,035,018
AAA 5,000++ New York St. Med. Care Fac. Rev., Hosp.,
Ser. A, 6.60%, 2/15/05, AMBAC .............. N/A 5,512,750
AAA 5,530 New York St. Twy. Auth., Svc. Contract Rev.,
Ser. B, 5.375%, 4/01/14, MBIA .............. 4/08 at 101 5,335,437
AAA 2,620 New York St. Urban Dev. Corp. Rev.,
Correctional Fac., 5.625%, 1/01/07, AMBAC .. 1/03 at 102 2,692,600
-----------
63,216,293
-----------
NORTH CAROLINA-2.4%
AAA 5,000 North Carolina Eastn. Mun. Pwr. Agcy. Rev.,
Ser. B, 7.00%, 1/01/08, CAPMAC ............. No Opt. Call 5,568,050
-----------
OHIO-0.7%
NR 500 Cleveland Cuyahoga Cnty. Port Auth. Rev.,
Port Dev. Proj., 6.00%, 3/01/07 ............ No Opt. Call 492,305
AAA 1,200 Ohio St. Higher Edl. Fac. Com., Univ. Dayton Proj.,
5.35%, 12/01/17, AMBAC .................... 12/07 at 101 1,171,956
-----------
1,664,261
-----------
OREGON-2.3%
BBB- 5,000 Klamath Falls Oregon Elec. Rev.,
Sr. Lien-Klamath Cogen, 5.50%, 1/01/07 ..... No Opt. Call 5,374,040
-----------
</TABLE>
See Notes to Financial Statements.
6
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL OPTION CALL
RATING* AMOUNT PROVISIONS+ VALUE
(UNAUDITED) (000) DESCRIPTION (UNAUDITED) (NOTE 1)
============= =========== =============================================== ================ ==================
<S> <C> <C> <C> <C>
PENNSYLVANIA-14.1%
AAA $ 6,000 Delaware Valley Regl. Fin. Auth., Ser. A,
5.50%, 8/01/28, AMBAC ...................... No Opt. Call $ 5,630,100
AAA 10,100 Lehigh Cnty. Gen. Purpose Auth. Rev.,
St. Lukes Hosp. Bethlehem Proj.,
5.50%, 11/15/13, AMBAC ..................... 11/03 at 102 9,932,037
AAA 7,000 Montgomery Cnty. Ed. & Hlth. Care Auth.,
Holy Redeemer, 5.25%, 10/01/23, AMBAC ...... 10/07 at 101 6,223,140
AAA 4,000 Pennsylvania Intergovernmental Coop. Auth.
Spl. Tax Rev., Philadelphia Fdg. Prog.,
5.50%, 6/15/20, FGIC ....................... 6/06 at 100 3,755,400
AAA 1,500 Pennsylvania St. G.O., First Ser.,
5.375%, 5/15/09, FGIC ...................... 5/06 at 101.50 1,522,200
Pennsylvania St. Higher Edl. Fac. Auth.,
Hlth. Svcs. Rev., Ser. A,
A 3,300 5.75%, 1/01/17 ............................. 1/06 at 101 3,087,117
A 2,750 5.875%, 1/01/15 ............................ 1/06 at 101 2,620,310
-----------
32,770,304
-----------
RHODE ISLAND-2.3%
AA+ 3,315 Rhode Island Hsg. & Mtg. Fin., Homeownership
Oppty., Ser. 15-B, 6.75%, 10/01/17 ......... 4/04 at 102 3,422,936
AAA 2,000 Rhode Island St. Hlth. & Edl. Bldg.
Corp. Rev., Hosp. Fin., 5.50%, 5/15/16, MBIA 5/07 at 102 1,934,200
------------
5,357,136
------------
TENNESSEE-3.4%
A 7,800 Maury Cnty. Ind. Dev. Brd., P.C.R., Saturn
Corp. Proj., 6.50%, 9/01/24 ................ 9/04 at 102 7,987,746
------------
TEXAS-4.7%
Dallas Cnty. Util. & Cap. Apprec., Ser. A, AMBAC,
AAA 6,085 Zero Coupon, 2/15/19 ....................... 2/05 at 44.538 1,822,032
AAA 3,800 Zero Coupon, 2/15/20 ....................... 2/05 at 41.799 1,049,978
Baa1 5,500 Dallas Fort Worth Intl. Arpt. Fac. Impt. Rev.,
American Airlines Inc., 6.375%, 5/01/35 .... 11/09 at 101 5,266,360
A3 2,640 Sabine River Auth., P.C.R., Coll-Texas
Utilities Elec. Proj.,
Ser. B, 8.25%, 10/01/20 .................... 10/00 at 102 2,756,107
------------
10,894,477
------------
UTAH-2.5%
A+ 1,800 Intermountain Pwr. Agcy. Rev., Fst. Crossover,
Ser. 86 B, 5.00%, 7/01/16 .................. 12/99 at 100 1,607,886
AAA 4,450 Intermountain Pwr. Agcy. Rev., Pwr. Supply,
Ser. F, 5.00%, 7/01/13, AMBAC .............. 12/99 at 100 4,139,212
------------
5,747,098
------------
WASHINGTON-12.4%
AA 6,900 Seattle G.O., 5.40%, 1/01/08 ................. 1/03 at 102 6,952,647
AA 2,650 Seattle Wtr. Sys. Rev., 5.50%, 6/01/18 ....... 6/03 at 102 2,533,638
AA+ 4,000 Washington St. G.O., Ser. A, 5.375%, 7/01/21 . 7/06 at 100 3,675,600
Washington St. Pub. Pwr. Supply Sys. Rev.,
AAA 13,395 Nuclear Proj. No. 1, 5.75%, 7/01/11, MBIA .. 7/06 at 102 13,623,921
AAA 2,000 Nuclear Proj. No. 2, 5.55%, 7/01/10, FGIC .. 7/03 at 102 1,995,740
------------
28,781,546
------------
TOTAL INVESTMENTS-153.5% (COST $357,728,784)......... 357,767,770
Other assets in excess of liabilities-2.3% .......... 5,317,477
Liquidation value of preferred stock-(55.8)% ........ (130,000,000)
-----------
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS-100% ... $ 233,085,247
------------
</TABLE>
- ----------
* Rating: Using the higher of Standard & Poor's, Moody's or Fitch's rating.
+ Option call provisions: date (month/year) and price 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.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
THE FOLLOWING ABBREVIATIONS ARE USED IN PORTFOLIO DESCRIPTIONS:
<S> <C>
AMBAC - American Municipal Bond Assurance Corporation GNMA - Government National Mortgage Association
CAPMAC - Capital Markets Assurance Corporation G.O. - General Obligation Bond
FGIC - Financial Guaranty Insurance Company MBIA - Municipal Bond Insurance Association
FSA - Financial Security Assurance P.C.R. - Pollution Control Revenue
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
7
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK INVESTMENT
QUALITY MUNICIPAL TRUST INC.
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1999
- --------------------------------------------------------------------------------
ASSETS
Investments, at value (cost $357,728,784) (Note 1) . $357,767,770
Interest receivable .................................. 6,660,730
Other assets ......................................... 8,211
------------
364,436,711
------------
LIABILITIES
Due to custodian ..................................... 714,554
Dividends payable-preferred stock .................... 166,912
Investment advisory fee payable (Note 2) ............. 114,194
Administration fee payable (Note 2) .................. 48,941
Other accrued expenses ............................... 306,863
------------
1,351,464
------------
NET INVESTMENT ASSETS ................................ $363,085,247
============
Net investment assets were comprised of:
Common stock:
Par value (Note 4) ................................. $ 167,071
Paid-in capital in excess of par ................... 232,077,869
Preferred stock (Note 4) ............................ 130,000,000
------------
362,244,940
Undistributed net investment income ................. 1,194,824
Accumulated net realized loss ....................... (393,503)
Net unrealized appreciation ......................... 38,986
------------
Net investment assets, October 31, 1999 .............. $363,085,247
============
Net assets applicable to common shareholders ......... $233,085,247
============
Net asset value per common share:
($233,085,247 \d 16,707,093 shares of
common stock issued and outstanding) ............... $ 13.95
============
- --------------------------------------------------------------------------------
THE BLACKROCK INVESTMENT
QUALITY MUNICIPAL TRUST INC.
STATEMENT OF OPERATIONS
YEAR ENDED OCTOBER 31, 1999
- --------------------------------------------------------------------------------
NET INVESTMENT INCOME
Income
Interest and discount earned ........... $20,852,020
-----------
Expenses
Investment advisory .................... 1,364,571
Administration ......................... 584,816
Auction agent .......................... 345,000
Custodian .............................. 68,500
Reports to shareholders ................ 68,500
Directors .............................. 58,500
Transfer agent ......................... 30,000
Audit .................................. 25,000
Legal .................................. 6,000
Miscellaneous .......................... 104,874
-----------
Total expenses ......................... 2,655,761
-----------
Net investment income .................... 18,196,259
-----------
REALIZED AND UNREALIZED LOSS
ON INVESTMENTS (NOTE 3)
Net realized loss on investments ......... (312,281)
Net change in unrealized appreciation
on investments ......................... (26,729,799)
-----------
Net loss on investments .................. (27,042,080)
-----------
NET DECREASE IN NET INVESTMENT ASSETS
RESULTING FROM OPERATIONS ................ $(8,845,821)
===========
See Notes to Financial Statements.
8
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK INVESTMENT QUALITY MUNICIPAL TRUST INC.
STATEMENTS OF CHANGES IN NET INVESTMENT ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
-----------------------------------
1999 1998
---------------- ----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET INVESTMENT ASSETS
OPERATIONS:
Net investment income ........................................................... $ 18,196,259 $ 18,032,133
Net realized gain (loss) on investments ......................................... (312,281) 3,208,243
Net change in unrealized appreciation on investments ............................ (26,729,799) 8,422,329
------------- -------------
Net increase (decrease) in net investment assets resulting from operations ..... (8,845,821) 29,662,705
------------- -------------
DIVIDENDS AND DISTRIBUTIONS:
To common shareholders from net investment income ............................... (14,414,299) (13,554,216)
To common shareholders from net realized gain on investments .................... (2,504,280) (3,343,299)
To preferred shareholders from net investment income ............................ (4,036,417) (3,967,577)
To preferred shareholders from net realized gain on investments ................. (703,888) (1,133,378)
------------- -------------
Total dividends and distributions ............................................... (21,658,884) (21,998,470)
------------- -------------
Total increase (decrease) ..................................................... (30,504,705) 7,664,235
NET INVESTMENT ASSETS
Beginning of year ................................................................ 393,589,952 385,925,717
------------- -------------
End of year ...................................................................... $ 363,085,247 $ 393,589,952
============= =============
</TABLE>
See Notes to Financial Statements.
9
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK INVESTMENT QUALITY MUNICIPAL TRUST INC.
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
---------------------------------------------------------------
1999 1998 1997 1996 1995
------------- ------------ ------------ -----------------------
<S> <C> <C> <C> <C> <C>
PER COMMON SHARE OPERATING PERFORMANCE:
Net asset value, beginning of year ................................ $ 15.78 $ 15.32 $ 14.52 $ 14.18 $ 12.05
------- ------- ------- ------- -------
Net investment income ............................................ 1.09 1.08 1.08 1.09 1.10
Net realized and unrealized gain (loss) on investments ........... (1.63) .70 .80 .34 2.16
------- ------- ------- ------- -------
Net increase (decrease) from investment operations ................ (.54) 1.78 1.88 1.43 3.26
------- ------- ------- ------- -------
Dividends and distributions:
Dividends from net investment income to:
Common shareholders ............................................. (.86) (.81) (.78) (.79) (.82)
Preferred shareholders .......................................... (.24) (.24) (.27) (.28) (.31)
Distributions from net realized gain on investments to:
Common shareholders ............................................. (.15) (.20) (.02) (.01) -
Preferred shareholders .......................................... (.04) (.07) (.01) (.01) -
------- -------- -------- -------- -------
Total dividends and distributions ............................. (1.29) (1.32) (1.08) (1.09) (1.13)
------- -------- -------- -------- -------
Net asset value, end of year* ..................................... $ 13.95 $ 15.78 $ 15.32 $ 14.52 $ 14.18
======= ======== ======== ======== =======
Per share market value, end of year* .............................. $ 13.13 $ 15.44 $ 13.38 $ 12.44 $ 12.00
======= ======== ======== ======== =======
TOTAL INVESTMENT RETURN+ ......................................... (9.03)% 23.81% 14.39% 10.41% 24.01%
======= ======== ======== ======== =======
RATIOS TO AVERAGE NET ASSETS OF COMMON
SHAREHOLDERS:
Expenses++ ...................................................... 1.05% 1.04% 1.07% 1.12% 1.16%
Net investment income before preferred stock dividends++ ........ 7.21% 6.95% 7.42% 7.57% 8.36%
Preferred stock dividends ......................................... 1.60% 1.53% 1.88% 1.97% 2.34%
Net investment income available to common shareholders ............ 5.61% 5.42% 5.54% 5.60% 6.02%
SUPPLEMENTAL DATA:
Average net assets of common shareholders (in thousands) .......... $252,536 $259,280 $243,947 $238,540 $219,740
Portfolio turnover ................................................ 26% 46% 160% 164% 182%
Net assets of common shareholders, end of year (in thousands) ..... $233,085 $263,590 $255,926 $242,547 $236,990
Preferred stock outstanding (in thousands) ........................ $130,000 $130,000 $130,000 $130,000 $130,000
Asset coverage per share of preferred stock, end of year .......... $69,824 $ 75,690 $ 74,241 $ 71,644 $ 70,575
</TABLE>
- ----------
* Net asset value and market value are published in BARRON'S on Saturday and
THE WALL STREET JOURNAL each Monday.
+ Total investment return is calculated assuming a purchase of common stock at
the current market price on the first day and a sale at the current market
price on the last day of the year 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.
++ Ratios are calculated on the basis of income and expenses applicable to both
the common and preferred stock relative to the average net assets of common
shareholders.
The information above represents the audited operating performance for a share
of common stock outstanding, total investment return, ratios to average net
assets and other supplemental data for the years 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
- --------------------------------------------------------------------------------
NOTE 1. ORGANIZATION & ACCOUNTING POLICIES
The BlackRock Investment Quality Municipal Trust Inc. (the "Trust") was
organized in Maryland on November 19, 1992 as a diversified, closed-end
management investment company. The Trust's investment objective is to manage a
portfolio of investment quality securities while providing 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 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 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 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
date of purchase are valued at current market quotation until maturity or
disposition.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on 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 original issue discount or amortizes premium on
securities purchased using the interest method.
FEDERAL INCOME TAXES: It is the Trust's intention to continue to meet the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute sufficient 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.
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.
RECLASSIFICATION OF CAPITAL ACCOUNTS: Effective January 1, 1994, the Trust began
accounting and reporting for permanent differences between financial and tax
reporting in accordance with the American Institute of Certified Public
Accountants' Statement of Position 93-2: Determination, Disclosure and Financial
Statement of Income, Capital Gain and Return of Capital Distributions by
Investment Companies. The effect of adopting the statement for the year ended
October 31, 1999 was to increase paid-in capital in excess of par value, and
increase accumulated net realized loss by $104. Net investment income, net
realized losses and net assets were not affected by this change.
NOTE 2. AGREEMENTS
The Trust has an Investment Advisory Agreement with BlackRock Financial
Management, Inc., (the "Adviser"), a wholly-owned subsidiary of BlackRock
Advisors, Inc., which is a wholly-owned subsidiary of BlackRock, Inc., which in
turn is an indirect majority-owned subsidiary of PNC Bank Corp. The Trust has an
Administration Agreement with Princeton Administrators, L.P. (the
"Administrator"), an indirect wholly-owned affiliate of Merrill Lynch & Co.,
Inc.
The investment 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.
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.
11
<PAGE>
NOTE 3. PORTFOLIO SECURITIES
Purchases and sales of investment securities, other than short-term
investments, for the year ended October 31, 1999, aggregated $99,511,656 and
$101,610,051, respectively.
The federal income tax basis of the Trust's investments at October 31, 1999
was $357,810,006, and accordingly, net unrealized depreciation was $42,236
(gross unrealized appreciation - $9,801,443, gross unrealized depreciation -
$9,843,679).
For Federal income tax purposes, the Trust had a capital loss carryforward
at October 31, 1999 of approximately $315,000 which will expire in 2007.
Accordingly, no capital gain distribution is expected to be paid to shareholders
until net gains have been realized in excess of such amount.
NOTE 4. CAPITAL
There are 200 million shares of $.01 par value common stock authorized. Of
the 16,707,093 common shares outstanding at October 31, 1999, the Adviser owned
7,205 shares. As of October 31, 1999, there were 5,200 shares of Preferred Stock
outstanding as follows: Series T7-2,600 and Series T28-2,600.
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.
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.
Divi-dend rates ranged from 2.95% to 6.00% during the year ended October 31,
1999.
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 AND DISTRIBUTIONS
Subsequent to October 31, 1999, the Board of Directors of the Trust
declared a dividend from undistributed earnings of $0.0719 per common share
payable December 1, 1999, to shareholders of record on November 15, 1999.
For the period November 1, 1999 through November 30, 1999, dividends
declared on Preferred Stock totalled $387,473 in aggregate for the two
outstanding Preferred Stock series.
12
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK INVESTMENT QUALITY MUNICIPAL TRUST INC.
REPORT OF INDEPENDENT AUDITORS
- --------------------------------------------------------------------------------
The Shareholders and Board of Directors of The BlackRock Investment Quality
Municipal Trust Inc.:
We have audited the accompanying statement of assets and liabilities,
including the portfolio of investments, of The BlackRock Investment Quality
Municipal Trust Inc. as of October 31, 1999 and the related statements of
operations for the year then ended and of changes in net investment assets for
each of the two years in the period then ended and the financial highlights for
each of the five years in the period then ended. These financial statements and
the financial highlights are the responsibility of the Trust's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned at October
31, 1999 by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of The BlackRock
Investment Quality Municipal Trust Inc. at October 31, 1999, and the results of
its operations, the changes in its net investment assets and its financial
highlights for the respective stated periods in conformity with generally
accepted accounting principle. [GRAPHIC OMITTED]
/s/ Deloitte & Touche LLP
- -------------------------
Deloitte & Touche LLP
New York, New York
December 13, 1999
13
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK INVESTMENT QUALITY MUNICIPAL TRUST INC.
TAX INFORMATION
- --------------------------------------------------------------------------------
We are required by the Internal Revenue Code to advise you within 60 days
of the Trust's fiscal year end as to the federally exempt interest dividends
received by you during such fiscal year. Accordingly, during the year the Trust
paid Federal tax-exempt dividends of $0.8628 per share to common shareholders
and $776.23 per share to preferred shareholders. Additionally, the following
summarizes the special taxable distributions declared by the Trust during the
fiscal year:
<TABLE>
<CAPTION>
SHORT-TERM LONG-TERM
RECORD PAYABLE CAPITAL CAPITAL GAINS
DATE DATE GAIN 20%
---------- ---------- ------------ --------------
<S> <C> <C> <C> <C>
Common Stock Shareholders ........... 12/15/98 12/31/98 0.084296 0.065603
Preferred Stock Series T-7 .......... 11/10/98 11/12/98 16.18 12.59
Preferred Stock Series T-7 .......... 11/17/98 11/18/98 13.00 10.12
Preferred Stock Series T-7 .......... 11/24/98 11/25/98 16.18 12.59
Preferred Stock Series T-7 .......... 12/01/98 12/02/98 15.17 11.80
Preferred Stock Series T-7 .......... 12/08/98 12/09/98 14.02 10.91
Preferred Stock Series T-7 .......... 12/15/98 12/16/98 1.38 1.08
Preferred Stock Series T-28 ......... 12/08/98 12/09/98 62.19 48.40
Preferred Stock Series T-28 ......... 1/05/99 1/06/99 14.13 10.99
</TABLE>
- --------------------------------------------------------------------------------
DIVIDEND REINVESTMENT PLAN
- --------------------------------------------------------------------------------
Pursuant to the Trust's Dividend Reinvestment Plan (the "Plan"),
shareholders are automatically enrolled to have all distributions of dividends
and capital gains reinvested by State Street Bank and Trust Company (the "Plan
Agent") in Trust shares pursuant to the Plan. Shareholders who elect not to
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 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 income tax that may be payable on
such dividends or distributions.
The Trust reserves the right to amend or terminate the Plan as applied to
any dividend or distribution paid subsequent to written notice of the change
sent to all shareholders of the Trust at least 90 days before the record date
for the dividend or distribution. The Plan also may be amended or terminated by
the Plan Agent upon at least 90 days' written notice to all shareholders of the
Trust. All correspondence concerning the Plan should be directed to the Plan
Agent at (800) 699-1BFM. The address is on the front of this report.
14
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK INVESTMENT QUALITY MUNICIPAL TRUST INC.
ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
There have been no material changes in the Trust's investment objectives or
policies that have not been approved by the shareholders or to its charter or
by-laws or in the principal risk factors associated with investment in the
Trust. There have been no changes in the persons who are primarily responsible
for the day-to-day management of the Trust's portfolio.
YEAR 2000 READINESS DISCLOSURE. The Trust has evaluated its information
technology infrastructure for Year 2000 compliance. Substantially all of the
Trust's information systems are supplied by the Adviser. The Adviser advised the
Trust that it has evaluated whether such systems are year 2000 compliant and
that it expects to incur costs of up to approximately one million dollars to
complete such evaluation and to make any modifications to its systems as may be
necessary to achieve Year 2000 compliance. The Adviser advised the Trust that it
has fully tested its systems for Year 2000 compliance. The Trust may be required
to bear a portion of such cost incurred by the Adviser in this regard. The
Adviser advised the Trust that it does not anticipate any material disruption in
the operations of the Trust as a result of any failure by the Adviser to achieve
Year 2000 compliance. There can be no assurance that the costs will not exceed
the amount referred to above or that the Trust will not experience a disruption
in operations.
The Adviser has advised the Trust that it is continuing to evaluate the
Year 2000 compliance of various suppliers of the Adviser and the Trust. The
Adviser advised the Trust that it has communicated with such suppliers to
determine their Year 2000 compliance status and the extent to which the Adviser
or the Trust could be affected by any supplier's Year 2000 compliance issues. To
date, the Adviser received responses from substantially all such suppliers with
respect to their Year 2000 compliance. However, there can be no assurance that
the systems of such suppliers, who are beyond the Trust's control, will be Year
2000 compliant. In the event that any of the Trust's significant suppliers do
not successfully and timely achieve Year 2000 compliance, the Trust's business
or operations could be adversely affected. The Adviser advised the Trust that it
has prepared a contingency plan for Year 2000 compliance by its suppliers. There
can be no assurance that such contingency plan will be successful in preventing
a disruption of the Trust's operations.
The Trust is designating this disclosure as its Year 2000 readiness
disclosure for all purposes under the Year 2000 Information and Readiness
Disclosure Act and the foregoing information shall constitute a Year 2000
Readiness Statement for purposes of that Act.
15
<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") is an SEC-registered
investment adviser. As of September 30, 1999, BlackRock and its affiliates
managed over $148 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-three closed-end funds that are traded on either the New York or
American stock exchanges, and a $24 billion family of open-end equity and bond
funds. BlackRock manages over 487 accounts, domiciled in the United States and
overseas.
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 at least investment grade ("BBB"
by Standard & Poor's or "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. See "Leverage Considerations in the Trust"
below.
16
<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 first 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. 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.
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.
17
<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 have all dividends and distributions
of capital gains automatically reinvested into
additional shares of a fund.
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 WALL STREET
JOURNAL on 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.
18
<PAGE>
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BLACKROCK FINANCIAL MANAGEMENT, INC.
SUMMARY OF CLOSED-END FUNDS
- --------------------------------------------------------------------------------
TAXABLE TRUSTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
STOCK MATURITY
SYMBOL DATE
PERPETUAL TRUSTS ---------- ---------
<S> <C> <C>
The BlackRock Income Trust Inc. BKT N/A
The BlackRock North American Government Income Trust Inc. BNA N/A
The BlackRock High Yield Trust BHY N/A
TERM TRUSTS
The BlackRock Target Term Trust Inc. BTT 12/00
The BlackRock 2001 Term Trust Inc. BTM 06/01
The BlackRock Strategic Term Trust Inc. BGT 12/02
The BlackRock Investment Quality Term Trust Inc. BQT 12/04
The BlackRock Advantage Term Trust Inc. BAT 12/05
The BlackRock Broad Investment Grade 2009 Term Trust Inc. BCT 12/09
</TABLE>
TAX-EXEMPT TRUSTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
STOCK MATURITY
SYMBOL DATE
PERPETUAL TRUSTS ---------- ---------
<S> <C> <C>
The BlackRock Investment Quality Municipal Trust Inc. BKN N/A
The BlackRock California Investment Quality Municipal Trust Inc. RAA N/A
The BlackRock Florida Investment Quality Municipal Trust RFA N/A
The BlackRock New Jersey Investment Quality Municipal Trust Inc. RNJ N/A
The BlackRock New York Investment Quality Municipal Trust Inc. RNY N/A
The BlackRock Pennsylvania Strategic Municipal Trust BPS N/A
The BlackRock Strategic Municipal Trust BSD N/A
TERM TRUSTS
The BlackRock Municipal Target Term Trust Inc. BMN 12/06
The BlackRock Insured Municipal 2008 Term Trust Inc. BRM 12/08
The BlackRock California Insured Municipal 2008 Term Trust Inc. BFC 12/08
The BlackRock Florida Insured Municipal 2008 Term Trust BRF 12/08
The BlackRock New York Insured Municipal 2008 Term Trust Inc. BLN 12/08
The BlackRock Insured Municipal Term Trust Inc. BMT 12/10
</TABLE>
IF YOU WOULD LIKE FURTHER INFORMATION PLEASE DO NOT HESITATE TO CALL BLACKROCK
AT (800) 227-7BFM (7236) OR CONSULT WITH YOUR FINANCIAL ADVISOR.
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
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) 543-6217
CUSTODIAN AND TRANSFER AGENT
State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171
(800) 699-1BFM
AUCTION AGENT
Deutsche Bank
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
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) 543-6217
09247D-105
Printed on recycled paper 09247D-204
09247D-303
THE BLACKROCK
INVESTMENT QUALITY
MUNICIPAL TRUST INC.
- ----------------------------------------------------------------------------
ANNUAL REPORT
OCTOBER 31, 1999
[GRAPHIC OMITTED]
