--------------------------------------------------------------------------------
THE BLACKROCK INVESTMENT QUALITY MUNICIPAL TRUST INC.
SEMI-ANNUAL REPORT TO SHAREHOLDERS
REPORT OF INVESTMENT ADVISOR
--------------------------------------------------------------------------------
May 31, 2000
Dear Shareholder:
The Federal Reserve continued to aggressively tighten in an attempt to
achieve its objective of a soft-landing for the explosive U.S. economy. As a
result, the Federal Reserve tightened short-term rates by 0.75% during the
period and raised rates by another 0.50% at the May FOMC meeting to 6.50%. In
the first four months of the new millennium we have been witness to
unprecedented volatility in both the Treasury yield curve and the spread
sectors. The Treasury curve inverted sharply as expectations of continued Fed
tightening in the wake of an insatiable U.S. economy, while anticipation of a
significant buyback at the long end of the maturity spectrum led to lower
yields on long Treasuries. The yield curve inversion along with the premium
placed on the dwindling outstanding Treasuries caused a dramatic
underperformance of spread sectors relative to the performance of the Treasury
sectors, especially in the 10- to 30-year part of the curve.
At this juncture, the general implication for spread product is negative,
but the potential for spread widening is more limited. Most of the negatives
for high quality spread product in terms of relative supply differentials
between Treasuries and non-Treasuries as well as equity market volatility have
been priced into the market. Given current market conditions, we maintain a
significant overweight in high quality spread product. Treasuries are fully
valued even considering the strong technicals in the market. While near-term
volatility is virtually guaranteed by an active Federal Reserve, a successful
soft landing of the economy would ultimately result in a healthier U.S.
economy.
This report contains a summary of market conditions during the semi-annual
period and a review of portfolio strategy by your Trust's managers in addition
to the Trust's unaudited 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>
May 31, 2000
Dear Shareholder:
We are pleased to present the unaudited semi-annual report for The
BlackRock Investment Quality Municipal Trust Inc. (the "Trust") for the six
months ended April 30, 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 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 six months:
-------------------------------------------------------
4/30/00 10/31/99 CHANGE HIGH LOW
--------------------------------------------------------------------------------
STOCK PRICE $12.50 $13.125 (4.76%) $13.25 $11.5625
--------------------------------------------------------------------------------
NET ASSET VALUE (NAV) $13.74 $13.95 (1.51%) $14.12 $13.55
--------------------------------------------------------------------------------
THE FIXED INCOME MARKETS
The dynamic expansion of the U.S. economy continues undaunted by Federal
Reserve Chairman Greenspan's attempt to brake the economy, short of stalling it
into a recession. The labor markets remain tight, growth remains strong with
5%+ annualized growth rates and inflation pressures continue to be offset by
increased productivity. However, the Fed remains cautious, in their February
minutes it was noted that: "Other members acknowledged that the Committee might
need to move more aggressively at a later meeting should imbalances continue to
build and inflation expectations clearly begin to pick up." At the Federal
Reserve meeting in November, February and March the Fed raised the discount
rate by 0.25% at each meeting and a 0.50% increase was made in May to bring the
current discount rate to 6.50%.
The Treasury Yield curve experienced a complex set of dynamics, which has
inverted the curve and may continue to invert the curve for the foreseeable
future. The yields on the short-end of the curve increased sharply during the
period in response to three Federal Reserves increases to the discount rate and
perceived future Fed actions in the coming months. The long-end of the curve is
reacting to the "official" announcement that the Treasury will buy back $30
billion of Treasuries with maturities ranging 10 to 30 years. With a decreasing
supply of available Treasuries, a balanced budget, and an unchanged demand for
longer maturity Treasuries, we would anticipate this condition to continue.
This condition is further augmented by Treasury auction activity, as they
reduce the available bonds on the long end of the curve they continue to add
supply in the 1-10 year range through periodic auctions. For the semi-annual
period, the yield of the 10-year Treasury security rose from 6.02% on October
31, 1999 to 6.22% on April 30, 2000.
Municipal bonds outperformed the taxable domestic bond market during the
past six months, returning 2.63% (as measured by the LEHMAN MUNICIPAL INDEX)
versus the LEHMAN AGGREGATE INDEX'S 1.42% on a pre-tax basis. Overall, the tone
in the market during the period was extremely positive as the result of
continued strong demand from individual/retail investors coupled with a
slowdown in new issuance. During 1999, households increased their holdings of
individual municipal bonds by over $40 billion while mutual funds saw net
outflows. Offsetting the large amount of mutual fund outflows during the first
quarter of 2000 was a 43% decline in overall new municipal bond issuance led by
a 90% drop in refunding volume. Refunding volume was down due to the relatively
higher interest rates experienced during the first quarter 2000 when compared
to the first quarter 1999, while new money issuance has declined because the
strong economy has led to full coffers at most municipalities. Currently,
municipal bonds across the entire maturity spectrum are at their most
attractive relationships to their Treasury market counterparts.
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. During the period, the Trust issued $16,550,000 in additional preferred
shares. At the end of the semi-annual period, the Trust's leverage amount was
39% of total assets.
As municipal credit spreads remained tight during the reporting period, we
continued to emphasize higher rated securities over the lower rated investment
grade sector. We believe that credit spreads will return to more historical
levels in the near future and as such the Trust should be rewarded for its
higher credit quality bias. The Trust has continued its bias towards premium
coupon securities over discount priced securities, as premium coupons 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 APRIL 30, 2000 OCTOBER 31, 1999
--------------------------------------------------------------------------------
Transportation 25% 23%
--------------------------------------------------------------------------------
City, County & State 14% 15%
--------------------------------------------------------------------------------
Hospital 14% 13%
--------------------------------------------------------------------------------
Industrial & Pollution Control 10% 10%
--------------------------------------------------------------------------------
Housing 7% 5%
--------------------------------------------------------------------------------
Power 7% 8%
--------------------------------------------------------------------------------
University/School 7% 7%
--------------------------------------------------------------------------------
Lease Revenue 6% 6%
--------------------------------------------------------------------------------
Water & Sewer 5% 5%
--------------------------------------------------------------------------------
Resource Recovery 2% 2%
--------------------------------------------------------------------------------
Special District 2% 2%
--------------------------------------------------------------------------------
Tax Revenue 1% 4%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CREDIT RATING* APRIL 30, 2000 OCTOBER 31, 1999
--------------------------------------------------------------------------------
AAA/Aaa 61% 63%
--------------------------------------------------------------------------------
AA/Aa 14% 10%
--------------------------------------------------------------------------------
A/A 14% 13%
--------------------------------------------------------------------------------
BBB/Baa/NR 11% 14%
--------------------------------------------------------------------------------
----------
* 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 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 4/30/00: $12.50
--------------------------------------------------------------------------------
Net Asset Value as of 4/30/00: $13.74
--------------------------------------------------------------------------------
Yield on Closing Stock Price as of 4/30/00 ($12.50)(1): 6.90%
--------------------------------------------------------------------------------
Current Monthly Distribution per Share(2): $ 0.0719
--------------------------------------------------------------------------------
Current Annualized Distribution per Share(2): $ 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) Distribution is not constant and is subject to change.
4
<PAGE>
--------------------------------------------------------------------------------
THE BLACKROCK INVESTMENT QUALITY MUNICIPAL TRUST INC.
PORTFOLIO OF INVESTMENTS APRIL 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL
AMOUNT OPTION CALL VALUE
RATING* (000) DESCRIPTION PROVISIONS+ (NOTE 1)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
AAA LONG-TERM INVESTMENTS-160.8%
ALASKA-5.1%
Aa2 $12,000 Alaska St. Hsg. Fin. Corp. Rev., Ser. A, 5.875%, 12/01/24, MBIA .................... 12/05 @ 102 $11,642,640
AA -----------
AAA CALIFORNIA-14.7%
AAA 1,220 California Hsg. Fin. Agcy. Rev., Home Mtg., Ser. C, 5.65%, 8/01/14 ................. 2/04 @ 102 1,222,769
AAA 5,770 California St. G.O., 5.00%, 10/01/14 ............................................... 10/07 @ 101 5,539,027
AAA 3,000 Foothill Eastern Corridor Agcy. Toll Road Rev., 5.00%, 1/15/16, MBIA ............... 1/10 @ 101 2,815,590
AAA 15,460 Los Angeles Cnty. Asset Leasing Corp. Rev., 5.95%, 12/01/07, AMBAC ................. No Opt. Call 16,497,521
University of California Rev., Research Fac., Ser. B,
AAA 2,000++ 6.10%, 9/01/03 ................................................................... N/A 2,118,800
AAA 3,305++ 6.20%, 9/01/03 ................................................................... N/A 3,511,397
AAA 2,000++ 6.25%, 9/01/03 ................................................................... N/A 2,127,940
-----------
33,833,044
-----------
COLORADO-14.4%
AAA 3,100 Arapahoe Cnty. Cap. Impvt. Hwy. Rev., Trust Fund, Ser. E, Zero Coupon, 8/31/04 ..... ETM 2,473,025
Denver City & Cnty. Arpt. Rev.,
AAA 1,000 Ser. A, 5.60%, 11/15/20, MBIA .................................................... 11/05 @ 102 960,980
A+ 3,000 Ser. C, 6.50%, 11/15/06 .......................................................... 11/02 @ 102 3,094,500
A+ 1,120 Ser. C, 6.65%, 11/15/05 .......................................................... 11/02 @ 102 1,162,818
AAA 3,705++ Ser. D, 7.00%, 11/15/01 .......................................................... N/A 3,822,374
BBB+ 14,085 Ser. D, 7.00%, 11/15/25 .......................................................... 11/01 @ 100 14,167,397
E-470 Pub. Hwy. Auth. Rev., Ser. B,
AAA 3,000 Zero Coupon, 9/01/11, MBIA ....................................................... No Opt. Call 1,599,240
AAA 10,000 Zero Coupon, 9/01/18, MBIA ....................................................... No Opt. Call 3,329,700
AAA 2,250++ 6.90%, 8/31/05 ................................................................... N/A 2,494,980
-----------
33,105,014
-----------
CONNECTICUT-1.1%
Baa3 3,000 Mashantucket Western Pequot Tribe, Spl. Rev., 5.50%, 9/01/28 ....................... 9/09 101 2,536,650
-----------
DISTRICT OF COLUMBIA-2.1%
District of Columbia G.O., Ser. E, CAPMAC,
AAA 70++ 6.00%, 6/01/03 ................................................................... N/A 73,215
AAA 1,830 6.00%, 6/01/09 ................................................................... 6/03 @ 102 1,882,356
AAA 3,000 Washington D.C. Convention Ctr. Auth., Ded. Tax Rev., 5.25%, 10/01/17, AMBAC ..... 10/08 @ 101 2,778,750
-----------
4,734,321
-----------
FLORIDA-2.4%
AAA 1,705 Florida Hsg. Fin. Agcy. Rev., Sngl. Fam. Mtg., Ser. 1994-A, 6.55%, 7/01/14, GNMA ... 1/05 @ 102 1,755,195
Baa3 4,000 Santa Rosa Bay Bridge Auth. Rev., 6.25%, 7/01/28 ................................... 7/06 @ 102 3,696,440
-----------
5,451,635
-----------
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 @ 102 2,580,930
-----------
ILLINOIS-6.9%
AAA 2,500 Chicago Waste Wtr. Transmission Rev., 5.125%, 1/01/25, FGIC ........................ 1/06 @ 102 2,168,950
AAA 5,050 Chicago Wtr. Rev., 5.25%, 11/01/23, FGIC ........................................... 11/07 @ 102 4,489,096
Illinois Edl. Fac. Auth. Rev., Loyola Univ., FGIC,
AAA 4,000++ 5.45%, 7/01/05 ................................................................... N/A 4,026,840
AAA 5,000++ 5.70%, 7/01/05 ................................................................... N/A 5,084,900
-----------
15,769,786
-----------
INDIANA-3.4%
BBB 7,595 Indianapolis Arpt. Auth. Rev., Spl. Fac., Fed. Express Corp. Proj., 7.10%, 1/15/17 . 7/04 @ 102 7,794,521
-----------
KENTUCKY-7.8%
AAA 2,850 Boone Cnty. P.C.R., 5.50%, 1/01/24, MBIA ........................................... 1/04 @ 102 2,687,920
AAA 15,000 Kentucky St. Tpke. Auth., Econ. Dev. Road Rev., 5.75%, 7/01/13, AMBAC .............. 7/03 @ 102 15,200,250
-----------
17,888,170
-----------
LOUISIANA-6.6%
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 15,070,176
-----------
</TABLE>
See Notes to Financial Statements.
5
<PAGE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL
AMOUNT OPTION CALL VALUE
RATING* (000) DESCRIPTION PROVISIONS+ (NOTE 1)
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MARYLAND-5.7%
Aa2 $ 9,595 Maryland St. Dept. Hsg. & Comn. Dev. Admin., Sngl. Fam. Prog.,
Ser. 2, 6.55%, 4/01/26 ............................................................ 4/05 @ 102 $ 9,756,772
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 3,249,168
-----------
13,005,940
-----------
MASSACHUSETTS-2.3%
AAA 6,000 Massachusetts St. Hlth. & Edl. Fac. Auth. Rev., Hallmark Hlth.
Sys., Ser. A, 5.00%, 7/01/21, FSA ................................................. 7/08 @ 101 5,186,880
-----------
MICHIGAN-3.9%
AAA 4,000 Greater Detroit Res. Rec. Auth. Rev., Ser. A, 6.25%, 12/13/08, AMBAC ............... No Opt. Call 4,240,520
AAA 5,000 River Rouge Sch. Dist., 5.625%, 5/01/22, FSA ....................................... 5/03 @ 101.5 4,813,650
-----------
9,054,170
-----------
MISSOURI-1.6%
Lake of the Ozarks Cmnty. Brdg. Corp., Brdg. Sys. Rev.,
BBB- 2,000 5.25%, 12/01/14 .................................................................. 12/08 @ 102 1,754,780
BBB- 2,500 5.25%, 12/01/26 .................................................................. 12/08 @ 102 2,049,100
-----------
3,803,880
-----------
NEVADA-1.7%
AAA 3,750 Washoe Cnty. Arpt. Auth., Arpt. Sys. Impvt. Rev., Ser. B, 5.80%, 7/01/09, MBIA ..... 7/03 @ 102 3,832,088
-----------
NEW JERSEY-5.7%
AAA 2,000 Delaware River Port Auth. PA & NJ Port Dist. Proj., Ser. B, 5.70%, 1/01/22, FSA .... 1/10 @ 100 1,965,560
AAA 4,000 New Jersey St. Tpk. Auth., Tpk. Rev., Ser. A, 5.75%, 1/01/16, MBIA ................. 1/10 @ 100 4,036,000
AA 7,000 New Jersey St. Transp. Trust Fund Auth. Rev., Ser. A, Transp. Sys., 6.00%, 6/15/19 . 6/10 @ 100 7,128,940
-----------
13,130,500
-----------
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 1,917,070
-----------
NEW YORK-30.4%
AAA 5,400 Metropolitan Trans. Auth. Commuter Fac. Rev., Ser. A, 5.75%, 7/01/21, MBIA ......... 7/07 @ 101.5 5,308,416
New York City G.O.,
A 4,140 Ser. A, 6.00%, 8/01/05 ........................................................... No Opt. Call 4,279,021
AAA 3,000 Ser. D, 5.60%, 11/01/05, AMBAC ................................................... No Opt. Call 3,065,880
A 7,000 Ser. E, 6.50%, 2/15/06 ........................................................... No Opt. Call 7,400,680
A- 6,440++ Ser. H, 7.20%, 2/01/02 ........................................................... N/A 6,785,055
A 560 Ser. H, 7.20%, 2/01/13 ........................................................... 2/02 @ 101.5 587,793
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 4,063,600
A 1,000 6.00%, 1/01/15 ................................................................. 1/04 @ 102 999,130
AAA 9,375 New York City Mun. Wtr. Fin. Auth., Wtr. & Swr. Rev., Ser. A,
5.125%, 6/15/22, AMBAC... 6/07 @ 101 8,343,562
AA+ 10,000 New York City Transitional Fin. Auth. Rev., Ser. B, 6.00%, 11/15/21 ................ 5/10 @ 101 10,132,800
AAA 3,000++ New York St. Dorm. Auth. Rev., St. Univ. Edl. Fac., Ser. B, 6.10%, 5/15/04 ......... N/A 3,175,080
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 2,048,351
AAA 5,000++ New York St. Med. Care Fac. Rev., NY Hosp., Ser. A, 6.60%, 2/15/05, AMBAC .......... N/A 5,417,300
AAA 5,550 New York St. Twy. Auth., Svc. Contract Rev., Ser. B, 5.375%, 4/01/14, MBIA ......... 4/08 @ 101 5,460,035
AAA 2,620 New York St. Urban Dev. Corp. Rev., Correctional Fac., 5.625%, 1/01/07, AMBAC ...... 1/03 @ 102 2,670,776
-----------
69,737,479
-----------
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 5,506,600
-----------
OHIO-0.7%
NR 485 Cleveland Cuyahoga Cnty. Port Auth. Rev., Port Dev. Proj., 6.00%, 3/01/07 .......... No Opt. Call 473,923
AAA 1,220 Ohio St. Higher Edl. Fac. Com., Univ. Dayton Proj., 5.35%, 12/01/17, AMBAC ......... 12/07 @ 101 1,179,288
-----------
1,653,211
-----------
OREGON-2.3%
BBB- 5,600 Klamath Falls Oregon Elec. Rev., Sr. Lien-Klamath Cogen, 5.50%, 1/01/07 ............ No Opt. Call 5,327,224
-----------
PENNSYLVANIA-11.7%
AAA 10,100 Lehigh Cnty. Gen. Purpose Auth. Rev., St. Lukes Hosp. Bethlehem Proj.,
5.50%, 11/15/13, AMBAC ........................................................... 11/03 @ 102 9,973,346
AAA 7,000 Montgomery Cnty. Ed. & Hlth. Care Auth., Holy Redeemer, 5.25%, 10/01/23, AMBAC ..... 10/07 @ 101 6,242,530
AAA 4,000 Pennsylvania Intergovernmental Coop. Auth. Spl. Tax Rev., Philadelphia Fdg. Prog.,
5.50%, 6/15/20, FGIC ............................................................. 6/06 @ 100 3,812,240
AAA 1,500 Pennsylvania St. G.O., First Ser., 5.375%, 5/15/09, FGIC ........................... 5/06 @ 101.5 1,519,080
</TABLE>
See Notes to Financial Statements.
6
<PAGE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL
AMOUNT OPTION CALL VALUE
RATING* (000) DESCRIPTION PROVISIONS+ (NOTE 1)
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Pennsylvania St. Higher Edl. Fac. Auth., Hlth. Svcs. Rev., Ser. A,
A $ 3,300 5.75%, 1/01/17 ................................................................... 1/06 @ 101 $ 2,824,437
A 2,750 5.875%, 1/01/15 .................................................................. 1/06 @ 101 2,429,350
------------
26,800,983
------------
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 3,383,796
AAA 2,000 Rhode Island St. Hlth. & Edl. Bldg. Corp. Rev., Hosp. Fin.,
5.50%, 5/15/16, MBIA ..... ....................................................... 5/07 @ 102 1,929,300
------------
5,313,096
------------
TENNESSEE-3.5%
A 7,800 Maury Cnty. Ind. Dev. Brd., P.C.R., Saturn Corp. Proj., 6.50%, 9/01/24 ............. 9/04 @ 102 7,938,918
------------
TEXAS-4.7%
Dallas Cnty. Util., Ser. A, AMBAC,
AAA 6,085 Zero Coupon, 2/15/19 ............................................................. 2/05 @ 44.538 1,862,801
AAA 3,800 Zero Coupon, 2/15/20 ............................................................. 2/05 @ 41.799 1,073,462
Baa1 5,500 Dallas Ft. Worth Intl. Arpt. Fac. Impt. Rev., Amer. Airlines Inc.,
6.375%, 5/01/35 .................................................................. 11/09 @ 101 5,161,640
A3 2,640 Sabine River Auth., P.C.R., Coll-Texas Utilities Elec. Proj.,
Ser. B, 8.25%, 10/01/20 .......................................................... 10/00 @ 102 2,720,494
------------
10,818,397
------------
UTAH-2.5%
Intermountain Pwr. Agcy., Pwr. Supply Rev.,
A+ 1,800 Ser. 86-B, 5.00%, 7/01/16 ........................................................ 6/00 @ 100 1,614,726
AAA 4,450 Ser. F, 5.00%, 7/01/13, AMBAC .................................................... 6/00 @ 100 4,197,818
------------
5,812,544
------------
WASHINGTON-13.0%
AA 6,900 Seattle G.O., 5.40%, 1/01/08 ....................................................... 1/03 @ 102 6,941,676
AA 2,650 Seattle Wtr. Sys. Rev., 5.50%, 6/01/18 ............................................. 6/03 @ 102 2,578,477
Washington St. G.O.,
AA+ 4,000 Ser. A, 5.375%, 7/01/21 .......................................................... 7/06 @ 100 3,724,440
AA+ 1,000 Ser. B, 6.00%, 1/01/25 ........................................................... 1/10 @ 100 999,380
Washington St. Pub. Pwr. Supply Sys. Rev.,
AAA 13,395 Nuclear Proj. No. 1, 5.75%, 7/01/11, MBIA ........................................ 7/06 @ 102 13,568,599
AAA 2,000 Nuclear Proj. No. 2, 5.55%, 7/01/10, FGIC ........................................ 7/03 @ 102 1,992,340
------------
29,804,912
------------
TOTAL LONG-TERM INVESTMENTS (COST $369,811,210)..................................... 369,050,779
------------
SHORT-TERM INVESTMENTS**-0.8%
800 NEW YORK-0.3%
A-1+ New York City Mun. Wtr. Fin. Auth. Rev., Ser. G, 5.90%, 5/01/00, FRDD .............. 800,000
TEXAS-0.5%
A-1+ 1,075 Harris Cnty. Hlth. Fac. Dev. Corp. Rev., St. Lukes Episcopal Hosp.,
6.00%, 5/01/00, FRDD ............................................................. 1,075,000
------------
TOTAL SHORT-TERM INVESTMENTS (COST $1,875,000)...................................... 1,875,000
------------
TOTAL INVESTMENTS-161.6% (COST $371,686,210)........................................ 370,925,779
Other assets in excess of liabilities-2.2% ......................................... 5,116,229
Liquidation value of preferred stock-(63.8)% ....................................... (146,550,000)
------------
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS-100% .................................. $229,492,008
============
</TABLE>
----------
* Using the higher of Standard & Poor's, Moody's or Fitch's rating.
** For purposes of amortized cost valuation, the maturity date of these
instruments is considered to be the earlier of the next date on which the
security can be redeemed at par, or the next date on which the rate of
interest is adjusted.
+ 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>
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
THE FOLLOWING ABBREVIATIONS ARE USED IN PORTFOLIO DESCRIPTIONS:
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
APRIL 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
ASSETS
Investments, at value (cost $371,686,210) (Note 1) . $370,925,779
Cash ................................................. 9,887
Interest receivable .................................. 7,003,054
Other assets ......................................... 22,970
------------
377,961,690
------------
LIABILITIES
Dividends payable-common stock ....................... 1,201,240
Offering costs payable-preferred stock ............... 295,000
Investment advisory fee payable (Note 2) ............. 109,525
Dividends payable-preferred stock .................... 91,721
Administration fee payable (Note 2) .................. 46,939
Other accrued expenses ............................... 175,257
------------
1,919,682
------------
NET INVESTMENT ASSETS ................................ $376,042,008
============
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 ................. 478,181
Accumulated net realized loss ....................... (2,000,813)
Net unrealized depreciation ......................... (760,431)
------------
Net investment assets, April 30, 2000 ................ $376,042,008
============
Net assets applicable to common shareholders ......... $229,492,008
============
Net asset value per common share:
($229,492,008 (division sign) 16,707,093 shares of
common stock issued and outstanding) ............... $ 13.74
============
--------------------------------------------------------------------------------
THE BLACKROCK INVESTMENT
QUALITY MUNICIPAL TRUST INC.
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
NET INVESTMENT INCOME
Income
Interest and discount earned ........... $10,558,626
-----------
Expenses
Investment advisory .................... 640,078
Administration ......................... 274,319
Auction agent .......................... 177,500
Reports to shareholders ................ 76,000
Custodian .............................. 56,000
Legal .................................. 36,000
Independent accountants ................ 28,000
Directors .............................. 27,500
Transfer agent ......................... 14,500
Registration ........................... 12,000
Miscellaneous .......................... 31,118
-----------
Total expenses ......................... 1,373,015
-----------
Net investment income .................... 9,185,611
-----------
REALIZED AND UNREALIZED LOSS
ON INVESTMENTS
Net realized loss on investments ......... (1,607,310)
Net change in unrealized depreciation
on investments ......................... (799,417)
-----------
Net loss on investments .................. (2,406,727)
-----------
NET INCREASE IN NET INVESTMENT ASSETS
RESULTING FROM OPERATIONS ................ $6,778,884
==========
See Notes to Financial Statements.
8
<PAGE>
--------------------------------------------------------------------------------
THE BLACKROCK INVESTMENT QUALITY MUNICIPAL TRUST INC.
STATEMENTS OF CHANGES IN NET INVESTMENT ASSETS (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS YEAR
ENDED ENDED
APRIL 30, 2000 OCTOBER 31,1999
---------------- ----------------
INCREASE (DECREASE) IN NET INVESTMENT ASSETS
<S> <C> <C>
OPERATIONS:
Net investment income ............................................................ $ 9,185,611 $ 18,196,259
Net realized loss on investments ................................................. (1,607,310) (312,281)
Net change in unrealized depreciation on investments ............................. (799,417) (26,729,799)
------------ -------------
Net increase (decrease) in net investment assets resulting from operations ..... 6,778,884 (8,845,821)
------------ -------------
DIVIDENDS AND DISTRIBUTIONS:
To common shareholders from net investment income ................................ (7,207,182) (14,414,299)
To common shareholders from net realized gain on investments ..................... - (2,504,280)
To preferred shareholders from net investment income ............................. (2,695,072) (4,036,417)
To preferred shareholders from net realized gain on investments .................. - (703,888)
------------ -------------
Total dividends and distributions .............................................. (9,902,254) (21,658,884)
------------ -------------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from additional issuance of preferred shares ........................ 16,080,131 --
------------ -------------
Total increase (decrease) ...................................................... 12,956,761 (30,504,705)
------------ -------------
NET INVESTMENT ASSETS
Beginning of period ............................................................... 363,085,247 393,589,952
------------ -------------
End of period (including undistributed net investment income of $478,181 and
$1,194,824, respectively) ........................................................ $376,042,008 $ 363,085,247
============ =============
</TABLE>
See Notes to Financial Statements.
9
<PAGE>
--------------------------------------------------------------------------------
THE BLACKROCK INVESTMENT QUALITY MUNICIPAL TRUST INC.
FINANCIAL HIGHLIGHTS (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
APRIL 30, 2000 1999 1998 1997 1996 1995
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
PER COMMON SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period .............. $ 13.95 $ 15.78 $ 15.32 $ 14.52 $ 14.18 $ 12.05
-------- -------- -------- -------- -------- --------
Net investment income ............................ .55 1.09 1.08 1.08 1.09 1.10
Net realized and unrealized gain
(loss) on investments ........................... (.14) (1.63) .70 .80 .34 2.16
-------- -------- -------- -------- -------- --------
Net increase (decrease) from investment
operations ...................................... .41 (.54) 1.78 1.88 1.43 3.26
-------- -------- -------- -------- -------- --------
Dividends and distributions:
Dividends from net investment income to:
Common shareholders ............................. (.43) (.86) (.81) (.78) (.79) (.82)
Preferred shareholders .......................... (.16) (.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 ............. (.59) (1.29) (1.32) (1.08) (1.09) (1.13)
-------- -------- -------- -------- -------- --------
Capital change with respect to issuance
of preferred shares ............................. (.03) -- -- -- -- --
-------- -------- -------- -------- -------- --------
Net asset value, end of period* ................... $ 13.74 $ 13.95 $ 15.78 $ 15.32 $ 14.52 $ 14.18
======== ======== ======== ======== ======== ========
Per share market value, end of period* ............ $ 12.50 $ 13.13 $ 15.44 $ 13.38 $ 12.44 $ 12.00
======== ======== ======== ======== ======== ========
TOTAL INVESTMENT RETURN+ .......................... (1.47)% (9.03)% 23.81% 14.39% 10.41% 24.01%
======== ======== ======== ======== ======== ========
RATIOS TO AVERAGE NET ASSETS OF COMMON
SHAREHOLDERS:
Expenses++ ........................................ 1.16%+++ 1.05% 1.04% 1.07% 1.12% 1.16%
Net investment income before preferred
stock dividends++ ............................... 7.99%+++ 7.21% 6.95% 7.42% 7.57% 8.36%
Preferred stock dividends ......................... 2.34%+++ 1.60% 1.53% 1.88% 1.97% 2.34%
Net investment income available to
common shareholders ............................. 5.65%+++ 5.61% 5.42% 5.54% 5.60% 6.02%
SUPPLEMENTAL DATA:
Average net assets of common shareholders
(in thousands) .................................. $231,303 $252,536 $259,280 $243,947 $238,540 $219,740
Portfolio turnover ................................ 7% 26% 46% 160% 164% 182%
Net assets of common shareholders,
end of period (in thousands) .................... $229,492 $233,085 $263,590 $255,926 $242,547 $236,990
Preferred stock outstanding (in thousands) ........ $146,550 $130,000 $130,000 $130,000 $130,000 $130,000
Asset coverage per share of preferred
stock, end of period ............................ $ 64,149 $ 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 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 period reported. Dividends and distributions,
if any, are assumed for purposes of this calculation to be reinvested at
prices obtained under the Trust's dividend reinvestment plan. Total
investment return does not reflect brokerage commissions. Total investment
returns for periods less than one full year are not annualized
++ 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.
+++ Annualized.
The information above represents the unaudited operating performance data for a
share of common stock outstanding, total investment return, ratios to average
net assets and other supplemental data for the periods indicated. This
information has been determined based upon financial information provided in
the financial statements and market value data for the Trust's common shares.
See Notes to Financial Statements.
10
<PAGE>
--------------------------------------------------------------------------------
THE BLACKROCK INVESTMENT
QUALITY MUNICIPAL TRUST INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------
NOTE 1. ORGANIZATION & ACCOUNTING POLICIES
The BlackRock Invest ment 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
the date of purchase are valued at current market quotations 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.
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 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 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
11
<PAGE>
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 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 investment securities, other than SECURITIES short-term
investments, for the period ended April 30, 2000, aggregated $37,317,202 and
$23,794,433, respectively.
The Federal income tax basis of the Trust's investments at April 30, 2000
was $371,767,432, and accordingly, net unrealized depreciation was $841,653
(gross unrealized appreciation-$8,006,662, gross unrealized
depreciation-$8,848,315). HERE IT IS(gross unrealized appreciation-$8,006,662,
gross unrealized depreciation-$8,848,315).
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. 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
April 30, 2000, the Advisor owned 7,205 shares. As of April 30, 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
perferred 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 period ended
April 30, 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 AND DISTRIBUTIONS
Subsequent to April 30, 2000, the Board of Directors of the Trust declared a
dividend from undistributed earnings of $0.0719 per common share payable June 1,
2000, to shareholders of record on May 15, 2000.
For the period May 1, 2000 to May 31, 2000, dividends declared on
Preferred Stock totalled $563,752 in aggregate for the two outstanding Preferred
Stock series.
12
<PAGE>
--------------------------------------------------------------------------------
THE BLACKROCK INVESTMENT QUALITY MUNICIPAL TRUST INC.
DIVIDEND REINVESTMENT PLAN
--------------------------------------------------------------------------------
Pursuant to the Trust's Dividend Reinvestment Plan (the "Plan"),
shareholders 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.
13
<PAGE>
--------------------------------------------------------------------------------
THE BLACKROCK INVESTMENT QUALITY MUNICIPAL TRUST INC.
ADDITIONAL INFORMATION
--------------------------------------------------------------------------------
ANNUAL MEETING OF TRUST SHAREHOLDERS. There have been no material changes
in the Trust's investment objectives or policies that have not been approved by
the shareholders or to its charter or by-laws or in the principal risk factors
associated with investment in the Trust. There have been no changes in the
persons who are primarily responsible for the day-to-day management of the
Trust's portfolio.
The Annual Meeting of Trust Shareholders was held May 18, 2000 to vote on
the following matters:
(1) To elect two Directors as follows:
DIRECTOR CLASS TERM EXPIRING
----- ---- --------
Richard E. Cavanagh ............ I 3 years 2003
James Clayburn La Force, Jr. ... I 3 years 2003
Directors whose term of office co beyond this meeting are Andrew F.
Brimmer, Kent Dixon, Frank J. Fabozzi, Laurence D. Fink, Walter
Mondale and Ralph L. Schlosstein.
(2) To ratify the selection of Deloit Touche LLP as independent public
accountants of the Trust for the year ending October 31, 2000.
Shareholders elected the two Directors and ratified the selection of
Deloitte & Touche LLP. The results of the voting was as follows:
VOTES VOTES
FOR* AGAINST* ABSTENTIONS*
---------- -------- ------------
Richard E. Cavanagh 4,600 -- --
James Clayburn La Force, Jr. 14,000,011 -- 263,556
Ratification of Deloitte & Touche LLP 14,067,716 41,126 154,725
----------
* The votes represent common and preferred shareholders voting as a single
class except for the election of Richard E. Cavanagh who was elected by
preferred shareholders.
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 March 31, 2000, the Advisor and its affiliates (together,
"BlackRock") managed $173 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 $29 billion family of open-end funds.
BlackRock manages over 590 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 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
TAX-EXEMPT TRUSTS
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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 March 31, 2000, the Advisor and its affiliates (together,
"BlackRock") managed $173 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 $29 billion family of open-end funds. BlackRock manages over
590 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
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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
Karen H. Sabath, 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
The accompanying financial statements as of April 30, 2000 were not
audited and accordingly, no opinion is expressed on them.
This report is for shareholder information. This is not a prospectus
intended for use in the purchase or sale of any securities.
THE BLACKROCK INVESTMENT QUALITY
MUNICIPAL TRUST INC.
c/o Princeton Administrators, L.P.
P.O. Box 9095
Princeton, NJ 08543-9095
(800) 543-6217
[RECYCLE LOGO] Printed on recycled paper 09247D-105
09247D-204
09247D-303
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BlackRock
THE ---------
INVESTMENT QUALITY
MUNICIPAL TRUST INC.
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SEMI-ANNUAL REPORT
APRIL 30, 2000
