- --------------------------------------------------------------------------------
THE BLACKROCK FLORIDA INVESTMENT QUALITY MUNICIPAL TRUST
SEMI-ANNUAL REPORT TO SHAREHOLDERS
REPORT OF INVESTMENT ADVISER
- --------------------------------------------------------------------------------
May 31, 1998
Dear Shareholder:
Domestic bonds provided investors with modest total returns during the
past six months, as interest rates generally fell. Supporting the bond market
was favorable inflation news and the belief that the Federal Reserve is unlikely
to raise short-term interest rates in the immediate future.
U.S. economic growth has remained relatively robust, spurred by lower
interest rates and strong consumer demand. However, the economic weakness of
Asia looms large. While the fallout from the Asian fiscal crisis probably has
yet to materialize in the U.S., we expect a "slowdown" in Asia's economies to
slow U.S. growth in 1998. While we expect that interest rates will be fairly
stable in the near-term, our longer-term outlook for the bond market remains
optimistic, based on the fundamentally favorable backdrop of low inflation, a
currently high level of real yields, and declining Treasury borrowing.
As you may know, the five investment management firms that comprised the
PNC Asset Management Group have consolidated under BlackRock, resulting in a
$118 billion money management firm. We look forward to using our global
investment management expertise to present exciting investment opportunities to
closed-end fund shareholders in the future.
This report contains comments from your Trust's managers regarding the
markets and portfolio in addition to the Trust's financial statements and a
detailed portfolio listing. We thank you for your continued investment in the
Trust.
Sincerely,
/s/ Laurence D. Fink /s/ Ralph L. Schlosstein
- -------------------- ------------------------
Laurence D. Fink Ralph L. Schlosstein
Chairman President
1
<PAGE>
May 31, 1998
Dear Shareholder:
We are pleased to present the semi-annual report for The BlackRock Florida
Investment Quality Municipal Trust ("the Trust") for the six months ended April
30, 1998. We would like to take this opportunity to review the Trust's stock
price and net asset value (NAV) performance, summarize market developments and
discuss recent portfolio management activity.
The Trust is a non-diversified, actively managed closed-end bond fund
whose shares are traded on the American Stock Exchange under the symbol "RFA".
The Trust's investment objective is to provide high current income that is
exempt from both regular federal income tax and Florida intangible personal
property tax consistent with the preservation of capital. The Trust seeks to
achieve its objective by investing in investment grade (rated "AAA" to "BBB" by
a major rating agency or of equivalent quality) municipal debt securities issued
by local municipalities throughout Florida.
The table below summarizes the performance of the Trust's stock price and
net asset value (the market value of its bonds per share) over the six months:
----------------------------------------------------------
4/30/98 10/31/97 CHANGE HIGH LOW
- --------------------------------------------------------------------------------
STOCK PRICE $13.87 $13.31 4.23% $14.37 $13.0625
- --------------------------------------------------------------------------------
NET ASSET VALUE (NAV) $15.17 $14.86 2.09% $15.51 $14.77
- --------------------------------------------------------------------------------
Additionally, on June 1, 1998, the Trust's Board of Directors announced an
increase in the Trust's monthly dividend effective with the July 31, 1998
payment. The new dividend rate was increased from $0.06 to $0.0663 monthly, or
from $0.720 to $0.796 annually.
THE FIXED INCOME MARKETS
The first four months of 1998 have witnessed continued rapid expansion of
the U.S. economy. GDP growth is estimated at an annual rate of 4.2%, far
exceeding the historical non-inflationary level of 2%. Despite the strong
economic growth, inflation stayed surprisingly subdued. After rising only 1.7%
in 1997, inflation inched higher at a 0.2% annual rate for the first quarter of
1998. One explanation for the absence of inflation in the U.S. economy stems
from the aftermath of the Asian crisis. U.S. exports to Asia have slowed, while
the strength of the dollar caused cheaper Asian imports to flood the U.S. market
and exert downward price pressure on domestic goods.
The Treasury market rallied during the fourth quarter of 1997 and into
1998 before giving back some gains during the past few months. For the
semi-annual period, the yield of the 10-year Treasury security fell from 5.83%
on October 31, 1997 to 5.67% on April 30, 1998. The strong performance of the
Treasury market was in response to moderating economic growth, low inflation and
a "flight to quality" from investors seeking a safe haven in U.S. Treasury
securities. Continued expectations that the Asian crisis will slow economic
growth and force the Fed to leave the Federal funds rate unchanged provided
additional support to the bond market. With Treasury supply waning due to
surplus in the federal budget and increased foreign demand for Treasuries due to
their U.S. government backing and relatively attractive yields, we anticipate a
positive environment for Treasuries for the balance of 1998.
Municipal bonds underperformed the taxable domestic bond market during the
past six months, returning 2.77% (as measured by the Lehman Municipal Index)
versus the Lehman Aggregate Index's 3.58% on a pre-tax basis. The main forces
2
<PAGE>
behind municipal bond underperformance were increased municipal bond supply
(fueled by the lowest municipal interest rates since the 1960s) and retail
investors focus on the equity markets. We believe that municipals are
attractively valued versus Treasuries and our outlook for municipal securities
is favorable. The robust economy continues to strengthen the credit quality of
most issuers, and we expect that the attractive taxable equivalent yields
offered by municipal securities should bring investors back into the market.
Florida's economy remains strong, particularly in the trade and service
sector, and the State is projecting 1998's growth rate to be 2.3%. This growth
is in part fueled by the increasing population, which grew nearly 2% in 1996 to
over 14 million residents. Additionally, the tourism industry has rebounded,
particularly in Dade County. Lastly, Florida's fiscal year 1998 revenues, which
are heavily dependent on sales tax receipts, are ahead of projections; the
surplus could exceed last year's combined reserve fund of $1 billion.
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 semi-annual period, the Trust's leverage amount was
33% of total assets. During the past six months, the Trust's borrowing costs
have remained favorable.
Within the municipal market, we find the best relative value on the yield
curve to be in the 14 to 17 year sector of the yield curve, which we believe
offers the most attractive taxable equivalent yields for the least amount of
incremental duration. Additionally, the Trust has been emphasizing higher rated
credits (AA- and AAA-rated issues) over lower rated credits (BBB and A) to take
advantage of historically narrow credit spreads between higher and lower rated
bonds.
The following charts compare the Trust's current and October 31, 1997
asset composition and credit quality allocations:
SECTOR BREAKDOWN
-----------------------------------------------------------------------
SECTOR APRIL 30, 1998 OCTOBER 31, 1997
-----------------------------------------------------------------------
Lease Revenue 19% 11%
-----------------------------------------------------------------------
Power 17% 17%
-----------------------------------------------------------------------
Transportation 16% 16%
-----------------------------------------------------------------------
City, County & State 13% 8%
-----------------------------------------------------------------------
School 12% 12%
-----------------------------------------------------------------------
Sales Tax 6% 6%
-----------------------------------------------------------------------
Water & Sewer 4% 4%
-----------------------------------------------------------------------
Hospital 4% 4%
-----------------------------------------------------------------------
University 4% 4%
-----------------------------------------------------------------------
Housing 3% 4%
-----------------------------------------------------------------------
Other 2% 2%
-----------------------------------------------------------------------
Miscellaneous Revenue -- 4%
-----------------------------------------------------------------------
Building -- 4%
-----------------------------------------------------------------------
Special tax -- 4%
-----------------------------------------------------------------------
3
<PAGE>
-----------------------------------------------------------------------
STANDARD & POOR'S/MOODY'S/FITCH'S
CREDIT RATING APRIL 30, 1998 OCTOBER 31, 1997
-----------------------------------------------------------------------
AAA/Aaa 53% 53%
-----------------------------------------------------------------------
AA/Aa 16% 16%
------------------------------------------------------------------------
A/A 18% 18%
------------------------------------------------------------------------
BBB/Baa 13% 13%
------------------------------------------------------------------------
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 Florida
Investment Quality Municipal Trust. 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 Kapito /s/ Kevin Klingert
- ----------------- --------------------------------------
Robert Kapito Kevin Klingert
Vice Chairman and Portfolio Manager Managing Director and Portfolio Manager
BlackRock Financial Management, Inc. BlackRock Financial Management, Inc.
- --------------------------------------------------------------------------------
THE BLACKROCK FLORIDA INVESTMENT QUALITY MUNICIPAL TRUST
- --------------------------------------------------------------------------------
Symbol on American Stock Exchange: RFA
- --------------------------------------------------------------------------------
Initial Offering Date: May 28, 1993
- --------------------------------------------------------------------------------
Closing Stock Price as of 4/30/98: $13.875
- --------------------------------------------------------------------------------
Net Asset Value as of 4/30/98: $15.17
- --------------------------------------------------------------------------------
Yield on Closing Stock Price as of 4/30/98 ($13.875)1: 5.19%
- --------------------------------------------------------------------------------
Current Monthly Distribution per Share2: $0.06
- --------------------------------------------------------------------------------
Current Annualized Distribution per Share2: $0.72
- --------------------------------------------------------------------------------
1 Yield on Closing Stock Price is calculated by dividing the current annualized
distribution per share by the closing stock price per share.
2 The distribution is not constant and is subject to change.
4
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
THE BLACKROCK FLORIDA INVESTMENT QUALITY MUNICIPAL TRUST
PORTFOLIO OF INVESTMENTS APRIL 30, 1998 (UNAUDITED)
- ---------------------------------------------------------------------------------------------------------------------
PRINCIPAL
AMOUNT OPTION CALL VALUE
RATING* (000) DESCRIPTION PROVISIONS+ (Note 1)
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
LONG-TERM INVESTMENTS--145.6%
FLORIDA--120.8%
Boynton Beach Util. Sys. Rev., FGIC,
AAA $ 170 6.25%, 11/01/20, ETM ............................................. No Opt. Call $ 192,314
AAA 830 6.25%, 11/01/20 .................................................. 11/02 at 102 891,503
A1 1,000 Brevard Cnty. Hlth. Fac., Holmes Regl. Med. Ctr., 5.75%, 10/01/13 .. 10/03 at 102 1,038,370
AAA 1,000 Brevard Cnty. Sch. Brd., C.O.P., Ser. B, 5.50%, 7/01/21, AMBAC ..... 7/06 at 102 1,020,520
AAA 1,000 Collier Cnty. Sch. Brd., C.O.P., 5.00%, 2/15/16, FSA ............... 2/06 at 101 972,250
AAA 1,000 Dade Cnty. Aviation Rev., Miami Int'l Arpt., Ser. C, 5.75%, 10/01/25,
MBIA ............................................................. 10/05 at 102 1,045,250
AAA 1,000 Dade Cnty. Sch. Brd., C.O.P., Ser. A, 6.00%, 5/01/14, MBIA ......... 5/04 at 101 1,067,010
AAA 1,000 Dade Cnty. Spl. Oblig., Ser. B, Zero Coupon, 10/01/08, AMBAC++ ..... N/A 438,840
AAA 1,000 First Florida Gov. Fin. Comn. Rev., Gainsville, Hollywood
& St. Petersburg, 5.75%, 7/01/16, AMBAC .......................... 7/06 at 101 1,049,480
AAA 800 Florida Hsg. Fin. Agcy., Sngl. Fam. Mtge., Ser. A, 6.25%, 7/01/11,
GNMA ............................................................. 7/04 at 102 854,672
AA+ 1,000 Florida St. Brd. of Ed., Pub. Ed., Ser. B, 5.875%, 6/01/24 ......... 6/05 at 101 1,036,070
AA 1,000 Florida St. Brd. of Ed., Ser. C, 5.85%, 6/01/18 .................... 6/03 at 101 1,030,600
AAA 500 Florida St. Dept. of Corrections, C.O.P., Okeechobee Correctional
Fac., 6.25%, 3/01/15, AMBAC ..................................... 3/05 at 102 551,715
AA+ 1,000 Florida St. Dept. of Trans., 5.80%, 7/01/21 ........................ 7/05 at 101 1,038,140
AAA 1,000 Florida St. Div. of Bond Fin. Dept., Gen. Svcs. Rev., Dept.
of Environ. Preservation, Ser. A, 5.75%, 7/01/11, AMBAC .......... 7/05 at 101 1,061,470
AAA 1,000 Jacksonville Cap. Impvt. Rev., Gator Bowl Proj., 5.50%, 10/01/14,
AMBAC ............................................................. 10/04 at 101 1,036,440
AAA 1,000 Lee Cnty. Trans. Fac. Rev., 5.75%, 10/01/22, MBIA .................. 10/05 at 102 1,044,490
A- 1,000 Orlando & Orange Cnty. Expwy., 5.95%, 7/01/23 ...................... 7/01 at 102 1,019,970
AA- 1,000 Orlando Utils. Comn. Wtr. & Elec. Rev., Ser. D, 5.50%, 10/01/20 .... 10/99 at 100 1,002,210
AAA 1,000 Seminole Cnty. Sch. Brd., C.O.P., Ser. A, 6.125%, 7/01/04, MBIA++ .. N/A 1,104,510
AAA 1,000 Sunrise Florida Util. Sys. Rev., Ser. A, 5.75%, 10/01/06, AMBAC++ .. N/A 1,089,840
Baa2 1,000 Volusia Cnty. Ed. Fac. Auth. Rev., 6.125%, 10/15/16 ................ 10/06 at 102 1,058,470
-----------
20,644,134
-----------
PUERTO RICO--24.8%
Puerto Rico Elec. Pwr. Auth. Rev.,
BBB+ 1,000 SER. T, 6.375%, 7/01/04++ ........................................ N/A 1,123,600
BBB+ 1,000 Ser. U, 6.00%, 7/01/14 ........................................... 7/04 at 102 1,078,580
Puerto Rico Pub. Bldg. Auth., Gtd. Pub. Ed. & Hlth. Fac., Ser. M,
A 1,000 5.50%, 7/01/21 ................................................... 7/03 at 101.5 1,009,260
A 1,000 5.75%, 7/01/15 ................................................... 7/03 at 101.5 1,031,780
-----------
4,243,220
-----------
Total Long-Term Investments (cost $22,859,615) ..................... 24,887,354
-----------
</TABLE>
See Notes to Financial Statements.
5
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
RATING* (000) DESCRIPTION (Note 1)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
SHORT-TERM INVESTMENTS**--1.7%
A-1+ $ 200 Hillsborough Cnty. Ind. Dev. Auth., P.C.R., Tampa Elec. Co.,
Gannon, 4.05%, 5/01/98, FRDD ................................... $ 200,000
A-1+ 100 Saint Lucie Cnty., P.C.R., 4.20%, 5/01/98, FRDD .................. 100,000
-----------
Total Short-Term Investments (cost $300,000) ..................... 300,000
-----------
TOTAL INVESTMENTS--147.3% (COST $23,159,615) ..................... 25,187,354
Other assets in excess of liabilities--2.4% ...................... 407,914
Liquidation value of preferred stock--(49.7)% .................... (8,500,000)
-----------
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS--100% ............... $17,095,268
===========
</TABLE>
- ----------
* Rating: using the higher of Standard & Poor's, Moody's or Fitch's rating.
** For purposes of amortized cost valuation, the maturity date of these
instruments is considered to be the earlier of the next date on which the
security can be redeemed at par or the next date on which the rate of
interest is adjusted.
+ Option call Provisions: date (month/year) and prices of the earliest option
call on redemption. There may be other call provisions at varying prices at
later dates.
++ This bond is prerefunded. See Glossary for definitions.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
THE FOLLOWING ABBREVIATIONS ARE USED IN PORTFOLIO DESCRIPTIONS:
<S> <C> <C> <C>
AMBAC -- American Municipal Bond Assurance Corporation FRDD -- Floating Rate Daily Demand
C.O.P. -- Certificate of Participation FSA -- Financial Security Assurance
FGIC -- Financial Guaranty Insurance Company GNMA -- Government National Mortgage Association
ETM -- Escrowed to maturity MBIA -- Municipal Bond Insurance Association
P.C.R.-- Pollution Control Revenue
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
6
<PAGE>
- ----------------------------------------------------------------
THE BLACKROCK FLORIDA INVESTMENT
QUALITY MUNICIPAL TRUST
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1998 (UNAUDITED)
- ----------------------------------------------------------------
ASSETS
Investments, at value (cost $23,159,615) (Note 1) $ 25,187,354
Cash ............................................ 90,878
Interest receivable ............................. 369,506
------------
25,647,738
------------
LIABILITIES
Advisory fee payable (Note 2) ................... 7,433
Dividends payable-preferred stock ............... 6,113
Administration fee payable (Note 2) ............. 2,124
Other accrued expenses .......................... 36,800
------------
52,470
------------
NET INVESTMENT ASSETS ........................... $ 25,595,268
============
Net investment assets were comprised of:
Common stock:
Par value (Note 4) .......................... $ 11,271
Paid-in capital in excess of par ............ 15,585,445
Preferred stock (Note 4) ...................... 8,500,000
------------
24,096,716
Undistributed net investment income ........... 168,572
Accumulated net realized loss ................. (697,759)
Net unrealized appreciation ................... 2,027,739
------------
Net investment assets, April 30, 1998 ......... $ 25,595,268
============
Net assets applicable to common shareholders .. $ 17,095,268
============
Net asset value per share:
($17,095,268 / 1,127,093 shares of
common stock issued and outstanding) .......... $15.17
======
- ------------------------------------------------------------------
THE BLACKROCK FLORIDA INVESTMENT
QUALITY MUNICIPAL TRUST
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1998 (UNAUDITED)
- ------------------------------------------------------------------
NET INVESTMENT INCOME
Income
Interest and discount earned ..................... $702,164
--------
Expenses
Investment advisory .............................. 44,328
Administration ................................... 12,665
Auction agent .................................... 10,500
Shareholder reports .............................. 7,000
Directors ........................................ 7,000
Audit ............................................ 5,000
Transfer agent ................................... 4,000
Legal ............................................ 3,500
Custodian ........................................ 1,000
Miscellaneous .................................... 10,901
--------
Total expenses ................................... 105,894
--------
Net investment income .............................. 596,270
--------
UNREALIZED GAIN
ON INVESTMENTS (NOTE 3)
Net change in unrealized appreciation
on investments ................................... 313,093
--------
NET INCREASE IN NET INVESTMENT
ASSETS RESULTING FROM OPERATIONS ................... $909,363
========
See Notes to Financial Statements.
7
<PAGE>
- -------------------------------------------------------------------------------
THE BLACKROCK FLORIDA INVESTMENT QUALITY MUNICIPAL TRUST
STATEMENTS OF CHANGES IN NET INVESTMENT ASSETS (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS YEAR
ENDED ENDED
APRIL 30, OCTOBER 31,
1998 1997
----- -----
<S> <C> <C>
INCREASE (DECREASE) IN NET INVESTMENT ASSETS
Operations:
Net investment income ................................................. $ 596,270 $ 1,200,029
Net realized gain on investments ...................................... -- 39,699
Net change in unrealized appreciation on investments .................. 313,093 677,912
------------ ------------
Net increase in net investment assets resulting from operations ....... 909,363 1,917,640
Dividends and distributions:
To common shareholders from net investment income ..................... (405,714) (806,563)
To preferred shareholders from net investment income .................. (153,455) (310,486)
To common shareholders in excess of net realized gain on investments .. -- (4,875)
To preferred shareholders in excess of net realized gain on investments -- (1,819)
------------ ------------
Total dividends and distributions ..................................... (559,169) (1,123,743)
------------ ------------
Total increase ...................................................... 350,194 793,897
NET INVESTMENT ASSETS
Beginning of period ...................................................... 25,245,074 24,451,177
------------ ------------
End of period ............................................................ $ 25,595,268 $ 25,245,074
============ ============
</TABLE>
See Notes to Financial Statements.
8
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK FLORIDA INVESTMENT QUALITY MUNICIPAL TRUST
FINANCIAL HIGHLIGHTS (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE PERIOD
SIX MONTHS FOR THE YEAR ENDED OCTOBER 31, JUNE 4, 1993*
ENDED --------------------------------------------- THROUGH
PER SHARE OPERATING PERFORMANCE: APRIL 30,1998 1997 1996 1995 1994 OCTOBER 31, 1993
------------- ----- ----- ----- ----- ----------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ....... $ 14.86 $ 14.15 $ 14.01 $ 11.69 $ 14.77 $ 14.10
-------- -------- -------- -------- ------- --------
Net investment income .................... .53 1.06 1.03 1.05 .98 .31
Net realized and unrealized gain (loss)
on investments ................... .28 .65 .13 2.36 (3.02) .86
-------- -------- -------- -------- ------- --------
Net increase (decrease) from investment
operations ........................... .81 1.71 1.16 3.41 (2.04) 1.17
-------- -------- -------- -------- ------- --------
Dividends and distributions:
Dividends from net investment income to:
Common shareholders .................... (.36) (.72) (.73) (.79) (.79) (.20)
Preferred shareholders ................. (.14) (.28) (.28) (.30) (.20) (.05)
Distributions from capital gains to:
Common shareholders .................... -- -- -- -- (.04) --
Preferred shareholders ................. -- -- -- -- (.01) --
Distributions in excess of net realized gain
on investments to:
Common shareholders .................... -- *** (.01) -- -- --
Preferred shareholders ................. -- *** *** -- -- --
-------- -------- -------- ------- -------- --------
Total dividends and distributions ...... (.50) (1.00) (1.02) (1.09) (1.04) (.25)
-------- -------- -------- ------- -------- --------
Capital charge with respect to issuance of
common and preferred stock ................ -- -- -- -- -- (.25)
-------- -------- -------- -------- -------- --------
Net asset value, end of period** ........... $ 15.17 $ 14.86 $ 14.15 $ 14.01 $ 11.69 $ 14.77#
======== ======== ======== ======== ======== ========
Per share market value, end of period** .... $ 13.875 $13.3125 $ 12.25 $ 12.625 $ 10.375 $ 14.00
======== ======== ======== ======== ======== ========
TOTAL INVESTMENT RETURN+: .................. 6.96% 14.95% 2.92% 29.29% (20.98%) .63%
RATIOS TO AVERAGE NET ASSETS OF COMMON
SHAREHOLDERS++:
Expenses ................................... 1.25%+++ 1.26% 1.46% 1.44% 1.50% 1.12%+++
Net investment income before preferred stock
dividends ................................ 7.01%+++ 7.43% 7.41% 7.96% 7.34% 5.40%+++
Preferred stock dividends .................. 1.80%+++ 1.92% 1.97% 2.28% 1.48% 0.80%+++
Net investment income available to common
shareholders ............................. 5.21%+++ 5.51% 5.44% 5.68% 5.86% 4.60%+++
SUPPLEMENTAL DATA:
Average net assets of common shareholders
(in thousands) ........................... $ 17,149 $16,150 $ 15,699 $ 14,759 $ 15,015 $ 15,791
Portfolio turnover rate .................... 0% 5% 73% 112% 206% 13%
Net assets of common shareholders, end of
period in thousands) ...................... $ 17,095 $16,745 $ 15,951 $ 15,788 $ 13,174 $ 16,644
Asset coverage per share of preferred stock,
end of period## .......................... $ 75,298 $74,253 $ 71,915 $ 71,437 $127,494 $147,907
Preferred stock outstanding (in thousands) . $ 8,500 $ 8,500 $ 8,500 $ 8,500 $ 8,500 $ 8,500
</TABLE>
- -----------
* Commencement of investment operations.
** Net asset value and market value are published in The Wall Street Journal
each Monday.
*** Actual amount paid to common shareholders for the year ended October 31,
1997 was $0.004325, and the actual amount paid to preferred shareholders
was $0.000185 per common share. Actual amount paid to preferred
shareholders for the year ended October 31, 1996 was $0.0030 per common
share.
# Net asset value immediately after the closing of the first public offering
was $14.01.
## A stock split occurred on July 24, 1995 (Note 4).
+ Total investment return is calculated assuming a purchase of common stock
at the current market value on the first day and a sale at the current
market price on the last day of each period reported. Dividends and
distributions are assumed for purposes of this calculation to be reinvested
at prices obtained under the Trust's dividend reinvestment plan. This
calculation does not reflect brokerage commissions. Total investment
returns for periods of less than one year are not annualized.
++ Ratios are calculated on the basis of income, expenses and preferred stock
dividends applicable to both the common and preferred shares 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.
9
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK FLORIDA INVESTMENT
QUALITY MUNICIPAL TRUST
NOTES TO FINANCIAL STATEMENTS(UNAUDITED)
- --------------------------------------------------------------------------------
NOTE 1. ACCOUNTING The BlackRock Florida Invest-
POLICIES ment Quality Municipal Trust
(the "Trust") was organized in Massachusetts on April 15, 1993 as a
non-diversified closed-end management investment company. The Trust's investment
objective is to provide high current income exempt from regular federal income
tax and Florida intangible personal property 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 the
state, 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 a pricing service which uses information with respect to
transactions in bonds, quotations from bond dealers, market transactions in
comparable securities and various relationships between securities in
determining values. Any securities or other assets for which such current market
quotations are not readily available are valued at fair value as determined in
good faith under procedures established by and under the general supervision and
responsibility of the Trust's Board of Directors.
Short-term securities which mature in more than 60 days are valued at current
market quotations. Short-term securities which mature in 60 days or less are
valued at amortized cost, if their term to maturity from date of purchase is 60
days or less, or by amortizing their value on the 61st day prior to maturity, if
their original term to maturity from date of purchase exceeded 60 days.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on the trade date. Realized 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 discounts or amortizes
premium on securities purchased using the interest method.
FEDERAL INCOME TAXES: For federal income tax purposes, the Trust is treated as a
separate taxpaying entity. It is the intent of the Trust to continue to meet the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its net income to shareholders. For this
reason and because substantially all of the Trust's gross income consists of
tax-exempt interest, no federal income tax provision is required.
DIVIDENDS AND DISTRIBUTIONS: The Trust declares and pays dividends and
distributions to common shareholders monthly from net investment income, net
realized short-term capital gains and other sources, if necessary. Net long-term
capital gains, if any, in excess of loss carryforwards may be distributed
annually. Dividends and distributions are recorded on the ex-dividend date.
Dividends and distributions to preferred shareholders are accrued and determined
as described in Note 4.
DEFERRED ORGANIZATION EXPENSES: A total of $16,000 was incurred in connection
with the organization of the Trust. These costs have been deferred and are being
amortized ratably over a period of sixty months from the date the Trust
commenced investment operations.
ESTIMATES: The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
NOTE 2. AGREEMENTS The Trust has an Investment
Advisory Agreement with
BlackRock Financial Management, Inc. (the "Adviser"), a wholly-owned corporate
subsidiary of BlackRock Advisors, Inc., which is an indirect majority-owned
subsidiary of PNC Bank, N.A., and an Administration Agreement with Prudential
Investments Fund Management LLC ("PIFM"), an indirect, wholly-owned subsidiary
of The Prudential Insurance Company of America.
The investment fee paid to the Adviser is computed weekly and payable monthly
at an annual rate of 0.35% of the Trust's average weekly net investment assets.
The administration fee paid to PIFM is also computed weekly and payable monthly
at an annual rate of 0.10% of the Trust's average weekly net investment assets.
Pursuant to the agreements, the Adviser provides continuous supervision of
the investment portfolio and pays the compensation of officers of the Trust who
are affiliated persons of the Adviser. PIFM pays occupancy and certain clerical
and accounting costs of the Trust. The Trust bears all other costs and expenses.
10
<PAGE>
NOTE 3. PORTFOLIO Sales of investment securit-
SECURITIES ies other than short-term
investments, for the six
months ended April 30, 1998 aggregated $40,000. There were no purchases for the
same period.
The federal income tax basis of the Trust's investments at April 30, 1998 was
substantially the same as for financial reporting purposes and, accordingly, net
and gross unrealized appreciation was $2,027,739.
For federal income tax purposes, the Trust had a capital loss carryforward at
October 31, 1997 of approximately $698,000 which will expire in 2002.
Accordingly, no capital gain distribution is expected to be paid to shareholders
until net gains have been realized in excess of such amount.
NOTE 4. CAPITAL There are 200 million
shares of $.01 par value
common stock authorized. Of the 1,127,093 shares outstanding at April 30, 1998,
the Adviser owned 7,093 shares. As of April 30, 1998 there were 340 shares at
Preferred Stock Series R7 outstanding.
The Trust may classify or reclassify any unissued shares of common stock
into one or more series of preferred stock. On July 29, 1993 the Trust
reclassified 170 shares of common stock and issued a series of Auction Market
Preferred Stock ("Preferred Stock") Series R7. The Preferred Stock had a
liquidation value of $50,000 per share plus any accumulated but unpaid
dividends. On May 16, 1995 shareholders approved a proposal to split each share
of the Trust's Auction Rate Municipal Preferred Stock into two shares and
simultaneously reduce each share's liquidation preference from $50,000 to
$25,000. The stock split occurred on July 24, 1995.
Dividends on Series R7 are cumulative at a rate which is reset every 7 days
based on the results of an auction. Dividend rates ranged from 3.40% to 4.20%
during the six months ended April 30, 1998.
The Trust may not declare dividends or make other distributions on shares of
common stock or purchase any such shares if, at the time of the declaration,
distribution, or purchase, asset coverage with respect to the outstanding
Preferred Stock would be less than 200%.
The Preferred Stock is redeemable at the option of the Trust, in whole or in
part, on any dividend payment date at $25,000 per share plus any accumulated or
unpaid dividends whether or not declared. The Preferred Stock is also subject to
mandatory redemption at $25,000 per share plus any accumulated or unpaid
dividends, whether or not declared if certain requirements relating to the
composition of the assets and liabilities of the Trust as set forth in the
Articles of Incorporation are not satisfied.
The holders of Preferred Stock have voting rights equal to the holders of
common stock (one vote per share) and will vote together with holders of shares
of common stock as a single class. However, holders of Preferred Stock are also
entitled to elect two of the Trust's directors. In addition, the Investment
Company Act of 1940 requires that along with approval by stockholders that might
otherwise be required, the approval of the holders of a majority of any
outstanding preferred shares, voting separately as a class would be required to
(a) adopt any plan of reorganization that would adversely affect the preferred
shares and (b) take any action requiring a vote of security holders, including,
among other things, changes in the Trust's subclassification as a closed-end
investment company or changes in its fundamental investment restriction
NOTE 5. DIVIDENDS Subsequent to April 30,
1998, the Board of
Directors of the Trust declared dividends from undistributed earnings of $0.0600
per common share payable May 29, 1998 to shareholders of record on May 15, 1998.
For the period May 1, 1998 through May 31, 1998 dividends declared on
Preferred Stock totalled $26,402 in aggregate for the outstanding Preferred
Stock.
11
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK FLORIDA INVESTMENT QUALITY MUNICIPAL TRUST
DIVIDEND REINVESTMENT PLAN
- --------------------------------------------------------------------------------
Pursuant to the Trust's Dividend Reinvestment Plan (the "Plan"),
shareholders will automatically have all distributions of dividends and capital
gains reinvested by State Street Bank and Trust Company (the "Plan Agent") in
Trust shares pursuant to the Plan unless an election is made to receive such
amounts in cash. The Plan Agent will affect purchases of shares under the Plan
in the open market. 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 American
Stock Exchange or elsewhere, for the participants' accounts. The Trust will not
issue any new shares in connection with the Plan.
Participants in the Plan may withdraw from the Plan upon written notice to
the Plan Agent and will receive certificates for whole Trust shares and a cash
payment for any fraction of a Trust share.
The Plan Agent's fees for the handling of the reinvestment of dividends
and distributions will be paid by the Trust. However, each participant will pay
a pro rata share of brokerage commissions incurred with respect to the Plan
Agent's open market purchases in connection with the reinvestment of dividends
and distributions. The automatic reinvestment of dividends and distributions
will not relieve participants of any federal, state or local income taxes that
may be payable on such dividends or distributions.
Experience under the Plan may indicate that changes are desirable.
Accordingly, the Trust reserves the right to amend or terminate the Plan as
applied to any dividend or distribution paid subsequent to written notice of the
change sent to all shareholders of the Trust at least 90 days before the record
date for the dividend or distribution. The Plan also may be amended by the Plan
Agent upon at least 90 days' written notice to all shareholders of the Trust.
The Plan may be terminated by the Plan Agent or the Trust upon at least 30 days
written notice to all shareholders of the Trust. All correspondence concerning
the Plan should be directed to the Plan Agent at (800) 699-1BFM. The addresses
are on the front of this report.
- --------------------------------------------------------------------------------
ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
There have been no material changes in the Trust's investment objectives
or policies that have not been approved by the shareholders or to its charter or
by-laws or in the principal risk factors associated with investment in the
Trust. There have been no changes in the persons who are primarily responsible
for the day-to-day management of the Trust's portfolio.
The Annual Meeting of Trust Shareholders was held May 6, 1998 to vote on
the following matters:
(1) To elect two Directors as follows:
DIRECTOR CLASS TERM EXPIRING
------- ----- ----- --------
James Grosfeld ........................ I 3 years 2000
James Clayburn La Force, Jr ........... I 3 years 2000
Directors whose term of office continues beyond this meeting are Andrew
F.Brimmer, Kent Dixon, Laurence D. Fink, Walter F. Mondale, Richard E.
Cavanagh, Frank J. Fabozzi, and Ralph L. Schlosstein.
(2) To ratify the selection of Deloitte & Touche LLP as independent public
accountants of the Trust for the fiscal year ending October 31, 1998.
Shareholders elected the two Directors and ratified the selection of
Deloitte & Touche LLP. The results of the voting was as follows:
<TABLE>
<CAPTION>
VOTES FOR VOTES AGAINST ABSTENTIONS
-------- ----------- ----------
<S> <C> <C> <C>
James Grosfeld ........................ 913,135 0 8,598
James Clayburn La Force, Jr. .......... 914,535 0 7,198
Ratification of Deloitte & Touche LLP . 908,821 5,113 7,800
</TABLE>
12
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK FLORIDA INVESTMENT QUALITY MUNICIPAL TRUST
INVESTMENT SUMMARY
- --------------------------------------------------------------------------------
THE TRUST'S INVESTMENT OBJECTIVE
The BlackRock Florida Investment Quality Municipal Trust's investment objective
is to provide high current income exempt from regular Federal income tax and to
provide an exemption from Florida intangible personal property taxes consistent
with the preservation of capital.
WHO MANAGES THE TRUST?
BlackRock Financial Management, Inc. ("BlackRock") is an SEC-registered
investment adviser. BlackRock and its affiliates currently manage over $118
billion on behalf of taxable and tax-exempt clients worldwide. Strategies
include fixed income, equity and cash and may incorporate both domestic and
international securities. Domestic fixed income strategies utilize the
government, mortgage, corporate and municipal bond sectors. BlackRock manages
twenty-one closed-end funds that are traded on either the New York or American
stock exchanges, and a $23 billion family of open-end equity and bond funds.
Current institutional clients number 334, domiciled in the United States and
overseas.
WHAT CAN THE TRUST INVEST IN?
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 and "Baa" by Moody's Investor Services) and up to 20% of
its assets may instead be deemed to be of equivalent credit quality by the
Adviser. The Trust intends to invest substantially all of the assets in a
portfolio of investment grade Florida Municipal Obligations, which include debt
obligations issued by the State of Florida, its political subdivisions, agencies
and instrumentalities and by other qualifying issuers that pay interest which,
in the opinion of the bond counsel of the issuer, is exempt from federal income
tax. Florida Municipal Obligations are issued to obtain funds for various public
functions, including the construction of public facilities, the refinancing of
outstanding obligations, the obtaining of funds for general operating expenses
and for loans to other public institutions and facilities.
WHAT IS THE ADVISER'S INVESTMENT STRATEGY?
The Adviser will manage the assets of the Trust in accordance with the Trust's
investment objective and policies to seek to achieve its objective by investing
in investment grade Florida Municipal Obligations. The Adviser actively manages
the assets in relation to market conditions and interest rate changes. Depending
on yield and portfolio allocation considerations, the Adviser may choose to
invest a portion of the Trust's assets in securities which pay interest that is
subject to AMT (alternative minimum tax). The Trust intends to emphasize
investments in Florida Municipal Obligations with long-term maturities and
expects to maintain an average portfolio maturity of 15-20 years, but the
average maturity may be shortened or lengthened from time to time depending on
market conditions.
Under current market conditions the use of leverage increases the income earned
by the Trust. The Trust employs leverage primarily through the issuance of
preferred stock. Preferred stockholders will receive dividends based on
short-term rates in exchange for allowing the Trust to borrow additional assets.
These assets will be invested in longer-term assets which typically offer higher
interest rates and the difference between the cost of the dividends paid to
preferred stockholders and the interest earned on the longer-term securities
will provide higher income levels for common stockholders in most interest rate
environments. The Trust issued preferred stock to leverage the portfolio at
approximately 35% of total assets. See "Leverage Considerations in the Trust"
below.
HOW ARE THE TRUST'S SHARES PURCHASED AND SOLD? DOES THE TRUST PAY DIVIDENDS
REGULARLY?
The Trust's shares are traded on the American Stock Exchange which provides
investors with liquidity on a daily basis. Orders to buy or sell shares of the
Trust must be placed through a registered broker or financial advisor. The Trust
pays monthly dividends which are typically paid on the last business day of the
month. For shares held in the shareholder's name, dividends may be
13
<PAGE>
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 fund in a declining rate environment, but can cause net
assets to decline faster in a rapidly rising interest rate environment. The
Trust may reduce, or unwind, the amount of leverage employed should BlackRock
consider that reduction to be in the best interests of the Trust. BlackRock's
portfolio managers continuously monitor and regularly review the Trust's use of
leverage and maintain the ability to unwind the leverage if that course is
chosen.
SPECIAL CONSIDERATIONS AND RISK FACTORS RELEVANT TO THE TRUST
THE TRUST IS INTENDED TO BE A LONG-TERM INVESTMENT AND IS NOT A SHORT-TERM
TRADING VEHICLE.
INVESTMENT OBJECTIVE. Although the objective of the Trust is to provide high
current income exempt from regular Federal income tax and to provide an
exemption from Florida intangible personal property taxes consistent with the
preservation of capital, there can be no assurance that this objective will be
achieved.
DIVIDEND CONSIDERATIONS. The income and dividends paid by the Trust are likely
to vary over time as fixed income market conditions change. Future dividends may
be higher or lower than the dividend the Trust is currently paying.
LEVERAGE. The Trust utilizes leverage through preferred stock, which involves
special risks. The Trust's net asset value and market value may be more volatile
due to its use of leverage.
MARKET PRICE OF SHARES. The shares of closed-end investment companies such as
the Trust trade on the American Stock Exchange (AMEX symbol: RFA) 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.
14
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK FLORIDA INVESTMENT QUALITY MUNICIPAL TRUST
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 the Trust.
MARKET PRICE: Price per share of a security trading in the
secondary market. For a closed-end fund, this
is the price at which one share of the fund
trades on the stock exchange. If you were to
buy or sell shares, you would pay or receive
the market price.
NET ASSET VALUE (NAV): Net asset value is the total market value of
all securities and other assets held by the
Trust, plus income accrued on its investments,
minus any liabilities including accrued
expenses, divided by the total number of
outstanding shares. It is the underlying value
of a single share on a given day. Net asset
value for the Trust is calculated weekly and
published in BARRON'S on Saturday and THE NEW
YORK TIMES or THE WALL STREET JOURNAL each
Monday.
PREMIUM: When a fund's stock price is greater than its
net asset value, the fund is said to be trading
at a premium.
PREREFUNDED BONDS: These securities are collateralized by U.S.
Government securities which are held in escrow
and are used to pay principal and interest on
the tax exempt issue and retire the bond in
full at the date indicated, typically at a
premium to par.
15
<PAGE>
[LOGO]
DIRECTORS
Laurence D. Fink, CHAIRMAN
Andrew F. Brimmer
Richard E. Cavanagh
Kent Dixon
Frank J. Fabozzi
James Grosfeld
James Clayburn La Force, Jr.
Walter F. Mondale
Ralph L. Schlosstein
OFFICERS
Ralph L. Schlosstein, PRESIDENT
Keith T. Anderson, VICE PRESIDENT
Michael C. Huebsch, VICE PRESIDENT
Robert S. Kapito, VICE PRESIDENT
Kevin Klingert, VICE PRESIDENT
Richard M. Shea, VICE PRESIDENT/TAX
Henry Gabbay, TREASURER
James Kong, ASSISTANT TREASURER
Karen H. Sabath, SECRETARY
INVESTMENT ADVISER
BlackRock Financial Management, Inc.
345 Park Avenue
New York, NY 10154
(800) 227-7BFM
ADMINISTRATOR
Prudential Investments Fund Management LLC
Gateway Center Three
100 Mulberry Street
Newark, N.J. 07102-4077
CUSTODIAN AND TRANSFER AGENT
State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171
(800) 699-1BFM
AUCTION AGENT
Bankers Trust Company
4 Albany Street
New York, NY 10006
INDEPENDENT AUDITORS
Deloitte & Touche LLP
Two World Financial Center
New York, NY 10281-1434
LEGAL COUNSEL
Skadden, Arps, Slate, Meagher & Flom, LLP
919 Third Avenue
New York, NY 10022
The accompanying financial statements as of April 30, 1998 were not audited
and, accordingly, no opinion is expressed on them.
This report is for shareholder information. This is not a prospectus
intended for use in the purchase or sale of any securities.
THE BLACKROCK FLORIDA INVESTMENT
QUALITY MUNICIPAL TRUST
c/o Prudential Investments Fund Management LLC
Gateway Center Three
100 Mulberry Street
Newark, N.J. 07102-4077
(800) 227-7BFM
[RECYCLE LOGO] Printed on recycled paper 09247B-10-9
THE BLACKROCK
FLORIDA
INVESTMENT QUALITY
MUNICIPAL TRUST
==============================
SEMI-ANNUAL REPORT
APRIL 30, 1998
[GRAPHIC]
