--------------------------------------------------------------------------------
THE BLACKROCK INVESTMENT QUALITY MUNICIPAL TRUST INC.
ANNUAL REPORT TO SHAREHOLDERS
REPORT OF INVESTMENT ADVISOR
--------------------------------------------------------------------------------
November 30, 2000
Dear Shareholder:
The continued trend of economic growth boosted by strong consumer
confidence, a tight labor market and inflation concerns caused the Federal
Reserve to aggressively tighten during the first part of the year. As a result,
the Fed raised the discount rate to 6.50% during the period in an attempt to
achieve its objective of engineering a "soft landing" for the explosive U.S.
economy. The third quarter of 2000 saw a sharp decline in market expectations
for further Fed tightenings amidst evidence of significant deceleration in
growth, peaking inflation pressures and a sharp reversal in the stock market
wealth effect globally.
The reduction in Fed tightening fears and the potential for a slower pace
of Treasury buybacks due to a more expansionary fiscal policy enabled high
quality spread product to outperform Treasuries in the third quarter of 2000.
Looking forward we believe that both consumers and corporations face
significant headwinds that suggest a likely GDP growth rate close to the Fed
target of 3.5%-4.0%. The risk, however, is even slower growth. While consumer
confidence is still high, a sharp reversal of the wealth effect year-to-date,
higher oil prices that have acted as a tax on the consumer and muted employment
growth should lead personal consumption growth to decline to 3.0%. We believe
that the Fed may eventually be required to ease interest rates to ensure a soft
landing. Monetary conditions are restrictive globally; in the absence of a
fiscal stimulus the Fed may have to ease policy moderately. The end scenario is
likely to be favorable to financial assets and the performance of spread assets
versus Treasuries.
This annual 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 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, 2000
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, 2000. 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 securities from municipalities throughout the United States.
The table below summarizes the changes in the Trust's stock price and NAV
over the past year:
--------------------------------------------------------
10/31/00 10/31/99 CHANGE HIGH LOW
--------------------------------------------------------------------------------
STOCK PRICE $ 12.125 $ 13.125 (7.62)% $13.25 $11.5625
--------------------------------------------------------------------------------
NET ASSET VALUE (NAV) $ 14.30 $ 13.95 2.51% $14.41 $13.33
--------------------------------------------------------------------------------
THE FIXED INCOME MARKETS
The rapid expansion of U.S. GDP witnessed throughout much of the period
finally slowed dramatically in the third quarter. After expanding at nearly a
6.0% annualized rate in the first half of the year, growth in the third quarter
slowed to 3.0%. Higher oil prices and declines in global equity markets led to
declines in consumer spending, residential investment and manufacturing
activity. According to the minutes of the October 3, 2000 FOMC meeting, "Recent
data have indicated that the expansion of aggregate demand has moderated to a
pace closer to the enhanced rate of growth of the economy's potential to
produce. The more rapid advances in productivity also continue to help contain
costs and hold down underlying price pressures." The Federal Reserve raised the
discount rate by 0.25% at their meetings in November 1999, February, and March
2000 and raised the discount rate by 0.50% in May 2000 to bring the current
discount rate to 6.50%.
Treasury yields were inverted for much of the period as yields rose on the
short-end of the yield curve in response to the Fed's increases in the discount
rate, and yields on the long-end of the curve fell below the short-end in
reaction to the announcement that the Treasury would buy back $30 billion of
Treasuries with maturities ranging from 10 to 30 years. In the second half of
the period, concerns over rising inflation from a surge in oil prices, weaker
stock markets and signs of slower growth all caused the bond market to price in
a neutral Federal Reserve. This shift in market sentiment caused significant
yield curve disinversion during the third quarter of 2000. As the slower growth
scenario plays out, the curve is likely to steepen further. For the annual
period, the 10-year Treasury fell from 6.02% on October 31, 1999 to 5.75% on
October 31, 2000.
Municipal bonds outperformed the taxable domestic bond market for the year
ending October 31, 2000, returning 8.51% (as measured by the Lehman Municipal
Index) versus the Lehman Aggregate Index's 7.30% on a pre-tax basis. Overall,
the tone in the market for the period was extremely positive as the result of
continued strong demand from individual/retail investors, a slowdown in new
issuance and reduced selling by mutual funds and institutional accounts. Retail
investors, who continue to purchase municipal bonds in an effort to increase
their asset allocation to fixed income and reduce equity exposure, have had a
large impact on the new issuance market. In some instances, individual
investors have purchased 50% of a new issue before institutions are able to buy
bonds. In many cases, new issues have been structured to appeal to individual
investors' tastes rather than institutions. Despite reduced selling by mutual
funds, there has still been a large outflow from mutual funds. However, high
retail demand has offset any adverse effects that may result from the mutual
fund outflows.
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 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. At the end of the annual period, the Trust's leverage amount was
approximately 38% of total assets.
After careful evaluation of the current and anticipated level of the
Trust's net investment income, the Board of Directors voted to reduce the
Trust's monthly dividend from $0.0719 ($0.8628 annualized) to $0.0650 ($0.7800
annualized) effective with the July 2000 dividend. This dividend reduction came
after careful evaluation, particularly of the reduction in income associated
with the increased cost of borrowing as a result of successive Federal Reserve
rate increases.
As municipal credit spreads remained tight during the reporting period, we
continue to be concentrated in higher rated securities over the lower rated
investment grade sector. While some opportunities for higher yields have
emerged, given current market conditions and the state of the yield curve, we
have maintained our bias towards premium coupon securities over discounted
priced securities. Premium coupon securities offer better price performance
during periods of rising interest rates and similar performance to discounts
when interest rates fall.
The following charts compare the Trust's current and October 31, 1999
asset composition and credit quality allocations:
------------------------------------------------------------------------
SECTOR BREAKDOWN
------------------------------------------------------------------------
SECTOR OCTOBER 31, 2000 OCTOBER 31, 1999
------------------------------------------------------------------------
Transportation 20% 23%
------------------------------------------------------------------------
University/School 13% 7%
------------------------------------------------------------------------
Hospital 12% 13%
------------------------------------------------------------------------
City, County & State 11% 15%
------------------------------------------------------------------------
Industrial & Pollution Control 11% 10%
------------------------------------------------------------------------
Housing 9% 5%
------------------------------------------------------------------------
Power 8% 8%
------------------------------------------------------------------------
Lease Revenue 5% 6%
------------------------------------------------------------------------
Tax Revenue 4% 4%
------------------------------------------------------------------------
Other 3% -
------------------------------------------------------------------------
Special District 2% 2%
------------------------------------------------------------------------
Water & Sewer 1% 5%
------------------------------------------------------------------------
Resource Recovery 1% 2%
------------------------------------------------------------------------
------------------------------------------------------------------------
CREDIT RATING* OCTOBER 31, 2000 OCTOBER 31, 1999
------------------------------------------------------------------------
AAA/Aaa 58% 65%
------------------------------------------------------------------------
AA/Aa 11% 10%
------------------------------------------------------------------------
A/A 19% 14%
------------------------------------------------------------------------
BBB/Baa/NR 12% 11%
------------------------------------------------------------------------
----------
* 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,
/s/ ROBERT S. KAPITO /s/ KEVIN M. KLINGERT
-------------------- ---------------------
Robert S. Kapito Kevin M. Klingert
Vice Chairman and Portfolio Manager Managing Director and Portfolio Manager
BlackRock Advisors, Inc. BlackRock Advisors, 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 10/31/00: $12.125
--------------------------------------------------------------------------------
Net Asset Value as of 10/31/00: $ 14.30
--------------------------------------------------------------------------------
Yield on Closing Stock Price as of 10/31/00 ($12.125)(1): 6.43%
--------------------------------------------------------------------------------
Current Monthly Distribution per Share(2): $ 0.065
--------------------------------------------------------------------------------
Current Annualized Distribution per Share(2): $ 0.780
--------------------------------------------------------------------------------
(1) Yield on Closing Stock Price is calculated by dividing the current
annualized distribution per share by the closing stock price per share.
(2) Distribution is not constant and is subject to change.
4
<PAGE>
--------------------------------------------------------------------------------
THE BLACKROCK INVESTMENT QUALITY MUNICIPAL TRUST INC.
PORTFOLIO OF INVESTMENTS OCTOBER 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL OPTION CALL
RATING* AMOUNT PROVISIONS+ Value
(UNAUDITED) (000) DESCRIPTION (UNAUDITED) (Note 1)
==================================================================================================================================
<S> <S> <C> <C> <C>
LONG-TERM INVESTMENTS-159.1%
ALABAMA-5.9%
AAA $14,000 University of Alabama Rev., Hosp., Ser. A, 5.875%, 9/01/31, MBIA ............ 9/10 @ 101 $14,120,820
-----------
ALASKA-5.0%
AAA 12,000 Alaska St. Hsg. Fin. Corp. Rev., Ser. A, 5.875%, 12/01/24, MBIA .............. 12/05 @ 102 12,030,240
-----------
CALIFORNIA-13.4%
Aa2 1,220 California Hsg. Fin. Agcy. Rev., Home Mtg., Ser. C, 5.65%, 8/01/14 ........... 2/04 @ 102 1,249,304
AA 5,770 California St. G.O., 5.625%, 5/01/18 ......................................... 5/10 @ 101 5,940,331
AAA 15,460 Los Angeles Cnty. Asset Leasing Corp. Rev., 5.95%, 12/01/07, AMBAC ........... No Opt. Call 16,982,501
University of California Rev., Research Fac., Ser. B,
Aaa 2,000++ 6.10%, 9/01/03 .............................................................. N/A 2,143,540
Aaa 3,305++ 6.20%, 9/01/03 .............................................................. N/A 3,550,925
Aaa 2,000++ 6.25%, 9/01/03 .............................................................. N/A 2,151,460
-----------
32,018,061
-----------
COLORADO-11.5%
AAA 3,100 Arapahoe Cnty. Cap. Impvt. Hwy. Rev., Trust Fund, Ser. E, Zero
Coupon, 8/31/04 ............................................................. ETM 2,592,065
Denver City & Cnty. Arpt. Rev.,
A 3,000 Ser. C, 6.50%, 11/15/06 ..................................................... 11/02 @ 102 3,142,560
A 1,120 Ser. C, 6.65%, 11/15/05 ..................................................... 11/02 @ 102 1,173,760
Aaa 3,705++ Ser. D, 7.00%, 11/15/01 ..................................................... N/A 3,797,403
A 14,085 Ser. D, 7.00%, 11/15/25 ..................................................... 11/01 @ 100 14,212,469
AAA 2,250++ E-470 Pub. Hwy. Auth. Rev., Ser. B, 6.90%, 8/31/05 .......................... N/A 2,528,910
-----------
27,447,167
-----------
CONNECTICUT-1.1%
Baa3 3,000 Mashantucket Western Pequot Tribe, Spl. Rev., Ser. A, 5.50%, 9/01/28 ......... 9/09 @ 101 2,618,040
----------
DELAWARE-2.9%
NR 7,000 Charter Mac Equity Issuer Trust, Ser. B, 7.60%, 11/30/10** ................... No Opt. Call 6,998,390
----------
DISTRICT OF COLUMBIA-0.8%
District of Columbia G.O., Ser. E, CAPMAC,
AAA 70++ 6.00%, 6/01/03 .............................................................. N/A 73,704
AAA 1,830 6.00%, 6/01/09 .............................................................. 6/03 @ 102 1,910,867
----------
1,984,571
----------
FLORIDA-4.3%
AAA 1,700 Florida Hsg. Fin. Agcy. Rev., Sngl. Fam. Mtg., Ser. 1994-A, 6.55%,
7/01/14, GNMA ............................................................... 1/05 @ 102 1,783,912
BBB+ 5,000 Hillsborough Cnty. Indl. Dev. Auth. Fac. Rev., National Gypsum,
Ser. A, 7.125%, 4/01/30 ..................................................... 4/10 @ 101 4,665,050
Baa3 4,000 Santa Rosa Bay Bridge Auth. Rev., 6.25%, 7/01/28 ............................. 7/06 @ 102 3,807,760
----------
10,256,722
----------
HAWAII-1.1%
AAA 2,500 Hawaii St. Dept. Budget & Fin. Spec. Purp. Rev., Hawaiian Elec. Co. Inc.,
Ser. D, 6.15%, 1/01/20, AMBAC ............................................... 1/09 @ 101 2,599,600
----------
ILLINOIS-12.6%
AAA 10,000 Chicago Illinois Brd. Ed., Chicago Sch. Reform, 5.75%, 12/01/27, AMBAC ....... 12/07 @ 102 10,029,100
AAA 5,000 Chicago Pub. Bldg. Rev., Ser. A, 7.00%, 1/01/20, MBIA ........................ ETM 5,921,000
AAA 5,050 Chicago Wtr. Rev., 5.25%, 11/01/23, FGIC ..................................... 11/07 @ 102 4,092,120
Illinois Edl. Fac. Auth. Rev., Loyola Univ., FGIC,
AAA 4,000++ 5.45%, 7/01/05 .............................................................. N/A 5,166,750
AAA 5,000++ 5.70%, 7/01/05 .............................................................. N/A ----------
29,994,400
----------
INDIANA-3.3%
BBB 7,595 Indianapolis Arpt. Auth. Rev., Spl. Fac. Fed. Express Corp.
Proj., 7.10%, 1/15/17 ..................................................... 7/04 @ 102 7,984,472
----------
KENTUCKY-8.2%
AAA 16,465 Kentucky Econ. Dev. Fin. Sys., Norton Hlth. Care Inc., Ser. B, Zero Coupon,
10/01/23, MBIA .............................................................. No Opt. Call 4,200,551
AAA 15,000 Kentucky St. Tpke. Auth., Econ. Dev. Road Rev., 5.75%, 7/01/13, AMBAC ........ 7/03 @ 102 15,449,100
----------
19,649,651
----------
</TABLE>
See Notes to Financial Statements.
5
<PAGE>
<TABLE>
<CAPTION>
====================================================================================================================================
PRINCIPAL OPTION CALL
RATING* AMOUNT PROVISIONS+ VALUE
(UNAUDITED) (000) DESCRIPTION (UNAUDITED) (NOTE 1)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
LOUISIANA-8.3%
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 $15,206,832
AAA 4,640 New Orleans Pub. Impt. G.O., 5.875%, 11/01/29, FSA .............................. 11/09 @ 100 4,713,544
-----------
19,920,376
-----------
MARYLAND-7.0%
Aa2 8,985 Maryland St. Dept. Hsg. & Comn. Dev. Admin., Sngl. Fam. Prog.,
Ser. 2, 6.55%, 4/01/26 ......................................................... 4/05 @ 102 9,268,297
NR 4,000 MuniMae Te Bond Subsidiary LLC, Ser. B, 7.75%, 11/01/10** ....................... No Opt. Call 4,022,040
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 @ 102 3,295,047
-----------
16,585,384
-----------
MASSACHUSETTS-1.2%
AAA 3,000 Massachusetts St. Hlth. & Edl. Fac. Auth. Rev., Hallmark Hlth. Sys.,
Ser. A, 5.00%, 7/01/21, FSA .................................................... 7/08 @ 101 2,763,480
-----------
MICHIGAN-0.8%
AAA 2,000 River Rouge Sch. Dist., 5.625%, 5/01/22, FSA ................................... 5/03 @ 101.5 2,015,120
-----------
MISSOURI-1.6%
Lake of the Ozarks Cmnty. Brdg. Corp., Brdg. Sys. Rev.,
BBB- 2,000 5.25%, 12/01/14 ................................................................ 12/08 @ 102 1,799,040
BBB- 2,500 5.25%, 12/01/26 ................................................................ 12/08 @ 102 2,114,550
-----------
3,913,590
-----------
NEVADA-1.6%
AAA 3,750 Washoe Cnty. Arpt. Auth., Arpt. Sys. Impvt. Rev., Ser. B, 5.80%, 7/01/09, MBIA .. 7/03 @ 102 3,900,000
-----------
NEW JERSEY-3.9%
AAA 2,000 Delaware River Port Auth. PA & NJ Port Dist. Proj., Ser. B, 5.70%, 1/01/22, FSA . 1/10 @ 100 2,031,580
AA 7,000 New Jersey St. Transp. Trust Fund Auth. Rev., Transp. Sys., Ser. A, 6.00%, 7,340,130
6/15/19 6/10 @ 100 ............................................................. -----------
9,371,710
-----------
NEW MEXICO-0.8%
AAA 1,945 Farmington P.C.R., So. CA. Edison Co., Ser. A, 5.875%, 6/01/23, MBIA ............ 6/03 @ 102 1,962,233
-----------
NEW YORK-17.8%
New York City G.O.,
A 4,140 Ser. A, 6.00%, 8/01/05 ......................................................... No Opt. Call 4,377,222
A 7,000 Ser. E, 6.50%, 2/15/06 ......................................................... No Opt. Call 7,584,290
A 6,440++ Ser. H, 7.20%, 2/01/02 ......................................................... N/A 6,750,150
A 560 Ser. H, 7.20%, 2/01/13 ......................................................... 2/02 @ 101.5 584,534
New York City Ind. Dev. Agcy. Spec. Fac. Rev., Term. One Group Assoc. Proj.,
A- 4,000 6.00%, 1/01/08 ................................................................. 1/04 @ 102 4,172,840
A- 1,000 6.00%, 1/01/15 ................................................................. 1/04 @ 102 1,017,720
AA 10,000 New York City Transitional Fin. Auth. Rev., Ser. B, 6.00%, 11/15/21 ............. 5/10 @ 101 10,490,000
New York St. Dorm. Auth. Rev., Univ. of Rochester, MBIA,
AAA 1,865 Ser. A, Zero Coupon, 7/01/21 ................................................... 7/10 @ 101 1,074,408
AAA 2,030 Ser. A, Zero Coupon, 7/01/23 ................................................... 7/10 @ 101 1,166,397
AAA 3,000++ New York St. Dorm. Auth. Rev., St. Univ. Edl. Fac., Ser. B, 6.10%, 5/15/04 ...... N/A 3,213,540
A 1,955 New York St. Hsg. Fin. Agcy., Hlth. Fac. of New York City, Ser. A, 6.375%, 2,064,265
11/01/04 No Opt. Call ........................................................ -----------
42,495,366
-----------
NORTH CAROLINA-2.4%
AAA 5,000 North Carolina Eastn. Mun. Pwr. Agcy. Sys. Rev., Ser. B, 7.00%, 1/01/08, CAPMAC . No Opt. Call 5,627,800
-----------
OHIO-0.2%
NR 485 Cleveland Cuyahoga Cnty. Port Auth. Rev., Port Dev. Proj., 6.00%, 3/01/07 ....... No Opt. Call 480,223
-----------
OREGON-2.3%
5,600 Klamath Falls Oregon Elec. Rev., Sr. Lien-Klamath Cogen, 5.50%, 1/01/07 ......... No Opt. Call 5,387,256
-----------
PENNSYLVANIA-11.2%
AAA 10,100 Lehigh Cnty. Gen. Purpose Auth. Rev., St. Lukes Hosp. Bethlehem Proj.,
5.50%, 11/15/13, AMBAC ......................................................... 11/03 @ 102 10,228,775
AAA 7,000 Montgomery Cnty. Ed. & Hlth. Care Auth., Holy Redeemer,
5.25%, 10/01/23, AMBAC ......................................................... 10/07 @ 101 6,573,700
AAA 4,000 Pennsylvania Intergovernmental Coop. Auth. Spl. Tax Rev.,
Philadelphia Fdg. Prog., 5.50%, 6/15/20, FGIC .................................. 6/06 @ 100 3,996,640
Pennsylvania St. Higher Edl. Fac. Auth., Hlth. Svcs. Rev., Ser. A,
A 3,300 5.75%, 1/01/17 ................................................................. 1/06 @ 101 3,147,672
A 2,750 5.875%, 1/01/15 ................................................................ 1/06 @ 101 2,674,567
-----------
26,621,354
-----------
</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>
RHODE ISLAND-2.3%
AA+ $ 3,270 Rhode Island Hsg. & Mtg. Fin., Homeownership Oppty., Ser. 15-B,
6.75%, 10/01/17 ........................................................... 4/04 @ 102 $ 3,436,116
AAA 2,000 Rhode Island St. Hlth. & Edl. Bldg. Corp. Rev., Hosp. Fin., 2,002,860
5.50%, 5/15/16, MBIA ...................................................... 5/07 @ 102 ------------
5,438,976
------------
TENNESSEE-5.5%
A 7,800 Maury Cnty. Ind. Dev. Brd., P.C.R., Saturn Corp. Proj., 6.50%, 9/01/24 ...... 9/04 @ 102 8,034,780
AAA 4,865 Memphis Shelby Cnty. Arpt. Auth. Arpt. Rev., Ser. D, 6.00%, 3/01/24, AMBAC .. 3/10 @ 101 5,013,382
------------
13,048,162
------------
TEXAS-6.5%
Dallas Cnty. Util. & Reclam. Dist., Ser. A, AMBAC,
AAA 6,085 Zero Coupon, 2/15/19 ....................................................... 2/05 @ 44.538 2,024,358
AAA 3,800 Zero Coupon, 2/15/20 ....................................................... 2/05 @ 41.799 1,170,400
Baa1 5,500 Dallas Ft. Worth Intl. Arpt. Fac. Impt. Rev., Amer. Airlines Inc., 5,325,925
6.375%, 5/01/35 ........................................................... 11/09 @ 101 6,092,280
AAA 6,000 Grapevine Texas G.O., 5.875%, 8/15/24, FGIC ................................. 8/10 @ 100 1,010,550
Aa1 1,000 Texas St. Wtr. Fin. Asst. G.O., 5.75%, 8/01/22 .............................. 8/10 @ 100 ------------
15,623,513
------------
UTAH-2.6%
Intermountain Pwr. Agcy. Pwr. Supply Rev.,
AAA 2,810 5.00%, 7/01/13, AMBAC ...................................................... ETM 2,782,912
AAA 1,640 5.00%, 7/01/13, AMBAC ...................................................... 11/00 @ 100 1,612,169
A+ 1,800 Ser. 86-B, 5.00%, 7/01/16 .................................................. 12/00 @ 100 1,711,206
------------
6,106,287
------------
WASHINGTON-8.8%
Washington St. G.O.,
AA+ 4,000 Ser. A, 5.375%, 7/01/21 .................................................... 7/06 @ 100 3,861,560
AA+ 1,000 Ser. B, 6.00%, 1/01/25 ..................................................... 1/10 @ 100 1,031,360
Washington St. Pub. Pwr. Supply Sys. Rev.,
AAA 13,395 Nuclear Proj. No. 1, 5.75%, 7/01/11, MBIA .................................. 7/06 @ 102 14,010,098
AAA 2,000 Nuclear Proj. No. 2, 5.55%, 7/01/10, FGIC .................................. 7/03 @ 102 2,026,760
-----------
20,929,778
-----------
WYOMING-4.2%
A 10,000 Sweetwater Cnty. P.C.R., Idaho Pwr. Co. Proj., Ser. A, 6.05%, 7/15/26 ....... 7/06 @ 102 10,084,200
------------
TOTAL LONG-TERM INVESTMENTS (COST $367,718,124).............................. 379,976,942
------------
SHORT-TERM INVESTMENTS***-0.0%
CALIFORNIA-0.0%
A-1+ 25 California Statewide Cmnty. Dev. Auth. Rev., John Muir/Mt. Diablo Hlth.,
4.40%, 11/01/00, FRDD, AMBAC ............................................... N/A 25,000
TEXAS-0.0%
A-1+ 75 Harris Cnty. Hlth. Fac. Dev. Corp. Rev., 4.65%, 11/01/00, FRDD .............. N/A 75,000
------------
TOTAL SHORT-TERM INVESTMENTS (COST $100,000)................................. 100,000
------------
TOTAL INVESTMENTS-159.1% (COST $367,818,124)................................. 380,076,942
Other assets in excess of liabilities-2.2% .................................. 5,322,455
Liquidation value of preferred stock-(61.3)% ................................ (146,550,000)
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS-100% ........................... ------------
$238,849,397
============
</TABLE>
------------
* Using the higher of Standard & Poor's, Moody's or Fitch's rating.
** Security is exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration to qualified institutional buyers.
*** 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.
+ Option call provisions: date (month/year) and price of the earliest
optional 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>
---------------------------------------------------------------------------------------------------------------------
KEY TO ABBREVIATIONS:
<S> <C> <C> <C>
AMBAC -- American Municipal Bond Assurance Corporation FSA -- Financial Security Assurance
CAPMAC -- Capital Markets Assurance Company GNMA -- Government National Mortgage Association
ETM -- Escrowed to maturity G.O. -- General Obligation
FGIC -- Financial Guaranty Insurance Company MBIA -- Municipal Bond Insurance Association
FRDD -- Floating Rate Daily Demand 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, 2000
--------------------------------------------------------------------------------
ASSETS
Investments, at value (cost $367,818,124) (Note 1) . $380,076,942
Interest receivable .................................. 7,385,814
Other assets ......................................... 27,681
------------
387,490,437
------------
LIABILITIES
Dividends payable-common stock ....................... 1,085,961
Dividends payable-preferred stock .................... 234,546
Due to custodian ..................................... 260,986
Offering costs payable-preferred stock ............... 158,744
Investment advisory fee payable (Note 2) ............. 114,374
Administration fee payable (Note 2) .................. 49,017
Deferred directors fees (Note 1) ..................... 9,380
Other accrued expenses ............................... 178,032
------------
2,091,040
------------
NET INVESTMENT ASSETS ................................ $385,399,397
============
Net investment assets were comprised of:
Common stock:
Par value (Note 4) ................................. $ 167,071
Paid-in capital in excess of par ................... 231,608,000
Preferred stock (Note 4) ............................ 146,550,000
------------
378,325,071
Undistributed net investment income ................. 277,455
Accumulated net realized loss ....................... (5,461,947)
Net unrealized appreciation ......................... 12,258,818
------------
Net investment assets, October 31, 2000 .............. $385,399,397
============
Net assets applicable to common shareholders ......... $238,849,397
============
Net asset value per common share:
($238,849,397 /d 16,707,093 shares of
common stock issued and outstanding) ............... $14.30
======
--------------------------------------------------------------------------------
THE BLACKROCK INVESTMENT
QUALITY MUNICIPAL TRUST INC.
STATEMENT OF OPERATIONS
YEAR ENDED OCTOBER 31, 2000
--------------------------------------------------------------------------------
NET INVESTMENT INCOME
Income
Interest and discount earned ........... $21,646,026
-----------
Expenses
Investment advisory .................... 1,313,673
Administration ......................... 563,003
Auction agent .......................... 372,000
Reports to shareholders ................ 113,000
Custodian .............................. 109,500
Independent accountants ................ 58,000
Directors .............................. 55,500
Legal .................................. 54,000
Transfer agent ......................... 28,000
Registration ........................... 24,500
Miscellaneous .......................... 77,666
-----------
Total expenses ......................... 2,768,842
-----------
Net investment income .................... 18,877,184
-----------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Net realized loss on investments ......... (5,068,444)
Net change in unrealized appreciation
on investments .......................... 12,219,832
-----------
Net gain on investments .................. 7,151,388
-----------
NET INCREASE IN NET INVESTMENT ASSETS
RESULTING FROM OPERATIONS ................ $26,028,572
============
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,
-----------------------------------
2000 1999
---------------- ----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET INVESTMENT ASSETS
OPERATIONS:
Net investment income ............................................................ $ 18,877,184 $ 18,196,259
Net realized loss on investments ................................................. (5,068,444) (312,281)
Net change in unrealized appreciation on investments ............................. 12,219,832 (26,729,799)
------------- -------------
Net increase (decrease) in net investment assets resulting from operations ..... 26,028,572 (8,845,821)
------------- -------------
DIVIDENDS AND DISTRIBUTIONS:
To common shareholders from net investment income ................................ (13,953,202) (14,414,299)
To common shareholders from net realized gain on investments ..................... - (2,504,280)
To preferred shareholders from net investment income ............................. (5,841,351) (4,036,417)
To preferred shareholders from net realized gain on investments .................. - (703,888)
------------- -------------
Total dividends and distributions .............................................. (19,794,553) (21,658,884)
------------- -------------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from additional issuance of preferred shares ........................ 16,080,131 -
------------- -------------
Total increase (decrease) ...................................................... 22,314,150 (30,504,705)
------------- -------------
NET INVESTMENT ASSETS
Beginning of year ................................................................. 363,085,247 393,589,952
------------- -------------
End of year (including undistributed net investment income of $277,455 and
$1,194,824, respectively) ........................................................ $ 385,399,397 $ 363,085,247
============= =============
</TABLE>
See Notes to Financial Statements.
9
<PAGE>
--------------------------------------------------------------------------------
THE BLACKROCK INVESTMENT QUALITY MUNICIPAL TRUST INC.
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
------------------------------------------------------------
2000 1999 1998 1997 1996
------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C>
PER COMMON SHARE OPERATING PERFORMANCE:
Net asset value, beginning of year ................................ $ 13.95 $ 15.78 $ 15.32 $ 14.52 $ 14.18
------- ------- ------- ------- --------
Net investment income ............................................ 1.13 1.09 1.08 1.08 1.09
Net realized and unrealized gain (loss) on investments ........... .43 (1.63) .70 .80 .34
------- ------- ------- ------- --------
Net increase (decrease) from investment operations ................ 1.56 (.54) 1.78 1.88 1.43
------- ------- ------- ------- --------
Dividends and distributions:
Dividends from net investment income to:
Common shareholders ............................................. (.83) (.86) (.81) (.78) (.79)
Preferred shareholders .......................................... (.35) (.24) (.24) (.27) (.28)
Distributions from net realized gain on investments to:
Common shareholders ............................................. - (.15) (.20) (.02) (.01)
Preferred shareholders .......................................... - (.04) (.07) (.01) (.01)
------- ------- -------- -------- --------
Total dividends and distributions ............................. (1.18) (1.29) (1.32) (1.08) (1.09)
------- ------- -------- -------- --------
Capital change with respect to issuance of preferred shares ....... (.03) -- -- -- --
------- ------- -------- -------- --------
Net asset value, end of year* ..................................... $ 14.30 $ 13.95 $ 15.78 $ 15.32 $ 14.52
======= ======= ======== ======== ========
Per share market value, end of year* .............................. $ 12.13 $ 13.13 $ 15.44 $ 13.38 $ 12.44
======= ======= ======== ======== ========
TOTAL INVESTMENT RETURN+ .......................................... (1.27)% (9.03)% 23.81% 14.39% 10.41%
======= ======= ======== ======== ========
RATIOS TO AVERAGE NET ASSETS OF COMMON
SHAREHOLDERS:
Expenses++ ........................................................ 1.20% 1.05% 1.04% 1.07% 1.12%
Net investment income before preferred stock dividends++ .......... 8.18% 7.21% 6.95% 7.42% 7.57%
Preferred stock dividends ......................................... 2.53% 1.60% 1.53% 1.88% 1.97%
Net investment income available to common shareholders ............ 5.65% 5.61% 5.42% 5.54% 5.60%
SUPPLEMENTAL DATA:
Average net assets of common shareholders (in thousands) .......... $230,746 $252,536 $259,280 $243,947 $238,540
Portfolio turnover ................................................ 35% 26% 46% 160% 164%
Net assets of common shareholders, end of year (in thousands) ..... $238,849 $233,085 $263,590 $255,926 $242,547
Preferred stock outstanding (in thousands) ........................ $146,550 $130,000 $130,000 $130,000 $130,000
Asset coverage per share of preferred stock, end of year .......... $ 65,745 $69,824 $ 75,690 $ 74,241 $ 71,644
</TABLE>
----------
* Net asset value and market value are published in BARRON'S on Saturday and
THE WALL STREET JOURNAL on 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 data 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 common shares.
See Notes to Financial Statements.
10
<PAGE>
--------------------------------------------------------------------------------
THE BLACKROCK INVESTMENT
QUALITY MUNICIPAL TRUST INC.
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
NOTE 1. ORGANIZATION & The BlackRock Invest
ACCOUNTING ment Quality Municipal
POLICIES 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. Short-term
securities are valued at amortized cost. 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.
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
accounting principles generally accepted in the United States of America
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.
DEFERRED COMPENSATION PLAN: Under a deferred compensation plan approved by the
Board of Directors on February 24, 2000, non-interested Directors may elect to
defer receipt of all or a portion of their annual compensation.
Deferred amounts earn a return for the directors as though equivalent
dollar amounts had been invested in common shares of other BlackRock funds
selected by the Directors. This has the same economic effect for the directors
as if the Directors had invested the deferred amounts in such other BlackRock
funds.
The deferred compensation plan is not funded and obligations thereunder
represent general unsecured claims against the general assets of the Trust. The
Trust may, however, elect to invest in common shares of those funds selected by
the Directors in order to match its deferred compensation obligations.
NOTE 2. AGREEMENTS The Trust has an Investment
Advisory Agreement with BlackRock
Advisors, Inc., (the "Advisor"), which is a wholly-owned subsidiary of
BlackRock, Inc., which in turn is an indirect majority-owned subsidiary of PNC
Financial Services Group, Inc. 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 advisory fee paid to the Advisor 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 Advisor provides continuous supervision
of the investment portfolio and pays the
11
<PAGE>
compensation of officers of the Trust who are affiliated persons of the
Advisor. 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 invest-
SECURITIES ment securities, other than
short-term investments, for the year
ended October 31, 2000, aggregated $143,988,713 and $129,343,524, respectively.
The Federal income tax basis of the Trust's investments at October 31,
2000 was $367,899,345, and accordingly, net unrealized appreciation was
$12,177,597 (gross unrealized appreciation-$14,557,025, gross unrealized
depreciation-$2,379,428).
For federal income tax purposes, the Trust had a capital loss
carryforward at October 31, 2000 of approximately $5,381,000 of which $312,000
will expire in 2007 and $5,069,000 will expire in 2008. 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. The Trust may classify or reclassify any unissued shares of common
stock into one or more series of preferred stock. Of the 16,707,093 common
shares outstanding at October 31, 2000, the Advisor owned 7,205 shares. As of
October 31, 2000, there were 5,862 shares of Preferred Stock outstanding as
follows: Series T7-3,262 and Series T28-2,600, which includes 662 shares of
series T7 issued on March 10, 2000.
On March 10, 2000, the Trust reclassified 662 shares of common stock and
issued an additional 662 shares of Series T-7 preferred stock. The additional
shares issued have identical rights and features of the existing Series T-7
preferred stock. Estimated offering cost of $304,369 and underwriting discount
of $165,500 have been charged to paid-in capital in excess of par of the common
shares.
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 3.30% to 5.90% during the year ended
October 31, 2000.
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 stock, voting separately as a class would be required to
(a) adopt any plan of reorganization that would adversely affect the preferred
stock, 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 October 31,
AND DISTRIBUTIONS 2000, the Board of Directors
of the Trust declared a divi-
dend from undistributed earnings of $0.065 per common share payable December 1,
2000, to shareholders of record on November 15, 2000.
For the period November 1, 2000 to November 30, 2000, dividends declared
on Preferred Stock totalled $496,918 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, 2000 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 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 auditing standards generally
accepted in the United States of America. 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, 2000, by
correspondence with the custodian. 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, 2000, 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 accounting
principles generally accepted in the United States of America.
/s/ Deloitte & Touche LLP
-------------------------
New York, New York
December 8, 2000
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 tax year end as to the federally tax-exempt interest dividends
received by you during such fiscal year. Accordingly, during the year the Trust
paid Federal tax-exempt dividends of $0.8352 per share to common shareholders
and $996.48 per share to preferred shareholders.
--------------------------------------------------------------------------------
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.
--------------------------------------------------------------------------------
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.
14
<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 Advisors, Inc. (the "Advisor") is an SEC-registered investment
advisor. As of September 30, 2000, the Advisor and its affiliates (together,
"BlackRock") managed $191 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-two closed-end funds that are traded on either the New
York or American stock exchanges, and a $28 billion family of open-end funds.
BlackRock managed 670 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
Advisor. 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 ADVISOR'S INVESTMENT STRATEGY?
The Advisor 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 Advisor 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 Advisor 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. See "Leverage Considerations
in the Trust" below.
15
<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 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 the Advisor
consider that reduction to be in the best interests of the Trust. The Advisor'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 the issuance of 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.
16
<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.
17
<PAGE>
--------------------------------------------------------------------------------
BLACKROCK ADVISORS, INC.
SUMMARY OF CLOSED-END FUNDS
--------------------------------------------------------------------------------
TAXABLE TRUSTS
--------------------------------------------------------------------------------
STOCK MATURITY
SYMBOL DATE
PERPETUAL TRUSTS ------ --------
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 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
TAX-EXEMPT TRUSTS
--------------------------------------------------------------------------------
STOCK MATURITY
SYMBOL DATE
PERPETUAL TRUSTS ------ --------
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
IF YOU WOULD LIKE FURTHER INFORMATION PLEASE DO NOT HESITATE TO CALL BLACKROCK
AT (800) 227-7BFM (7236) OR CONSULT WITH YOUR FINANCIAL ADVISOR.
18
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BLACKROCK ADVISORS, INC.
AN OVERVIEW
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BlackRock Advisors, Inc. (the "Advisor") is an SEC-registered investment
advisor. As of September 30, 2000, the Advisor and its affiliates (together,
"BlackRock") managed $191 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. BlackRock manages twenty-two
closed-end funds that are traded on either the New York or American stock
exchanges, and a $28 billion family of open-end funds. BlackRock managed 670
accounts, domiciled in the United States and overseas.
BlackRock's fixed income product was introduced in 1988 by a team of
highly seasoned fixed income professionals. These professionals had extensive
experience creating, analyzing and trading a variety of fixed income
instruments, including the most complex structured securities. In fact, several
individuals at BlackRock were responsible for developing many of the major
innovations in the mortgage-backed and asset-backed securities markets,
including the creation of the first 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
emphasis it places on the development of proprietary analytical capabilities.
Over one quarter of the firm's professionals are dedicated to the design,
maintenance and use of these systems, which are not otherwise available to
investors. BlackRock's proprietary analytical tools are used for evaluating,
and designing fixed income investment strategies for client portfolios.
Securities purchased include mortgages, corporate bonds, municipal bonds and a
variety of hedging instruments.
BlackRock has developed investment products that respond to investors'
needs and has been responsible for several major innovations in closed-end
funds. In fact, 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 AAA rating by Standard & Poor's, and the first
closed-end fund to invest primarily in North American Government securities.
Currently, BlackRock's closed-end funds have dividend reinvestment plans, which
are designed to provide ongoing demand for the stock in the secondary market.
BlackRock manages a wide range of investment vehicles, each having specific
investment objectives and policies.
In view of our continued desire to provide a high level of service to all
our shareholders, BlackRock maintains a toll-free number for your questions.
The number is (800) 227-7BFM (7236). We encourage you to call us with any
questions that you may have about your BlackRock funds and we thank you for the
continued trust that you place in our abilities.
IF YOU WOULD LIKE FURTHER INFORMATION
PLEASE DO NOT HESITATE TO CALL BLACKROCK AT (800) 227-7BFM
19
<PAGE>
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BlackRock
---------
DIRECTORS
Laurence D. Fink, CHAIRMAN
Andrew F. Brimmer
Richard E. Cavanagh
Kent Dixon
Frank J. Fabozzi
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
Anne Ackerley, SECRETARY
INVESTMENT ADVISOR
BlackRock Advisors, Inc.
400 Bellevue Parkway
Wilmington, DE 19809
(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 ACCOUNTANTS
Deloitte & Touche LLP
Two World Financial Center
New York, NY 10281-1434
LEGAL COUNSEL
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, NY 10036
LEGAL COUNSEL - INDEPENDENT DIRECTORS
Debevoise & Plimpton
875 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
---------
BlackRock
THE ---------
INVESTMENT QUALITY
MUNICIPAL TRUST INC.
--------------------
ANNUAL REPORT
OCTOBER 31, 2000
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[RECYCLE LOGO] Printed on recycled paper 09247D-204
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