- --------------------------------------------------------------------------------
THE BLACKROCK CALIFORNIA INVESTMENT QUALITY MUNICIPAL TRUST INC.
SEMI-ANNUAL REPORT TO SHAREHOLDERS
REPORT OF INVESTMENT ADVISER
- --------------------------------------------------------------------------------
May 31, 1996
Dear Trust Shareholder:
After posting strong returns during 1995, the fixed income markets have
given back much of their gains in 1996 in response to a strengthening U.S.
economy. Accelerating economic growth has raised concerns about an increased
inflationary environment, which could erode the value of fixed income
investments. The stronger economy also has led some market participants to
consider the possibility that the Federal Reserve may increase interest rates to
thwart inflation threats after three interest rate reductions over the past
twelve months.
Despite the pick-up in economic growth, we believe that current inflationary
fears will subside. Commodity prices have risen but manufacturers will have
difficulty passing along the increased costs of raw materials to consumers,
whose debt levels as a percentage of disposable income are at the highest point
since the recessionary highs of 1990. We believe that the overleveraged consumer
will have to retrench, restricting future economic expansion and creating a
positive environment for bonds in the latter half of this year.
The following semi-annual report provides detailed market commentary and a
review of portfolio management activity. We believe that BlackRock's duration
controlled management style and risk management capabilities will allow each
of our Trusts to achieve its long-term investment objective.
We look forward to maintaining your respect and confidence and to serving
your financial needs in the coming years.
Sincerely,
Laurence D. Fink Ralph L. Schlosstein
Chairman President
1
<PAGE>
May 31, 1996
Dear Shareholder:
We are pleased to present the semi-annual report for The BlackRock
California Investment Quality Municipal Trust Inc. ("the Trust") for the six
months ended April 30, 1996. 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 "RAA". The
Trust's investment objective is to provide high current income that is exempt
from regular federal and California income taxes 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) municipal debt securities issued by local municipalities
throughout California.
The table below summarizes the performance of the Trust's stock price and
net asset value over the period:
------------------------------------------------
4/30/96 10/31/95 Change High Low
- --------------------------------------------------------------------------------
Stock Price $12.375 $12.625 (1.98%) $13.25 $12.375
- --------------------------------------------------------------------------------
Net Asset Value (NAV) $13.59 $13.85 (1.88%) $14.520 $13.430
- --------------------------------------------------------------------------------
The Fixed Income Markets
The domestic fixed income markets witnessed two profoundly different
environments during the past six months, providing an exciting and challenging
environment in which to manage the Trust. The Treasury market rally of 1995
continued through the middle of February 1996, as market demand for fixed income
securities remained strong due to a combination of moderate economic growth, low
absolute levels of inflation and two reductions of the Fed funds target rate.
The rally halted during mid-February, however, as data indicating accelerating
economic growth, in conjunction with a sharp rise in commodity prices, rekindled
inflationary concerns. Positive news for the economy which may indicate
increased levels of inflation can cause bond yields to rise and prices to fall.
The March 8 release of the February employment report, which showed a
surprisingly strong gain of 705,000 new jobs (subsequently revised downward to
624,000), produced the largest one-day price decline in U.S. bond prices in over
seven years. For the first quarter of 1996, economic growth as measured by GDP
grew 2.8%, which represented a strong rebound from the 0.5% gain posted in the
fourth quarter of 1995.
Municipal bond performance mirrored that of its Treasury counterparts, as
yields declined through early 1996 before rising with the taxable bond market's
reversal in February. Municipals lagged the Treasury market in the fourth
quarter of 1995 for three main reasons: 1) supply increased in response to the
lower interest rate environment; 2) the tremendous performance of the U.S. stock
market may have weakened seasonal demand from municipal bond coupon payments and
redemptions; and 3) the specter of tax reform throughout 1995 increased investor
concerns over the tax-free advantage of municipal income, which could be reduced
by tax reform exempting all investment income from taxation. During the first
quarter of 1996, however, municipals outperformed taxable fixed income
securities as the probability of impending tax reform decreased significantly,
thereby increasing demand from both retail investors and institutions such as
property & casualty insurance companies.
Positive supply and demand technical conditions provided for the California
municipal bond market's outperformance of the national market during the past
six months. Below-average new issue supply, coupled with the maturity of $4
billion in
2
<PAGE>
California state warrants and seasonal coupon payments, provided strong demand
for California municipals. We remain positive on the California municipal
market's performance for the remainder of the year, as the state economy
continues to show positive signs of growth.
BlackRock believes that municipal bonds have the potential to continue to
outperform Treasury securities for the remainder of 1996. The recent rise in
interest rates has put a substantial new issuance calendar on hold as
municipalities wait for interest rates to come down, creating favorable supply
and demand conditions. Additionally, the decreased probability of significant
tax reform being enacted should continue to attract investors to the municipal
bond market.
The Trust's Portfolio and Investment Strategy
The Trust's portfolio is actively managed to diversify exposure to various
sectors, issuers, revenue sources and security types. BlackRock's investment
strategy emphasizes a relative value approach, which allows the Trust to
capitalize upon changing market conditions by rotating municipal sectors,
credits and coupons.
Additionally, the Trust employs leverage at about 35% of total assets to
enhance its income by borrowing at short term municipal rates and investing the
proceeds in longer maturity issues which have higher yields. The degree to which
the Trust can benefit from its use of leverage may affect its ability to pay
high monthly income. During the first four months of 1996, the steepening of the
municipal yield curve, a result of longer maturity municipal bond yields rising
significantly while shorter maturities did not, widened the yield spread between
short and long municipals and resulted in more profitable leverage for the
Trust.
Since the third quarter of 1995, the Trust has been favoring 10- to 20-year
callable premium coupon bonds over par bonds and non-callable alternatives. Due
to their defensive structure, premium bonds characteristically outperform par
bonds in a rising interest rate environment. As anticipated, premium coupon
bonds posted significant outperformance relative to par bonds as rates rose
between February and April. The Trust has maintained its emphasis on higher
credit quality, consistently holding over half of its assets in AAA/AAA-rated
bonds. In order to pick up additional yield, the balance of the portfolio has a
concentration in A/BBB rated bonds, which generally offer a substantial yield
spread over AAA municipals. As the yield advantage of owning A/BBB bonds
narrows, the Trust expects to scale back its weighting and increase allocation
to higher credit bonds.
The following charts compare the Trust's current and October 31, 1995 asset
composition and credit quality allocations:
Sector Breakdown
- --------------------------------------------------------------------------------
Sector April 30, 1996 October 31, 1995
- --------------------------------------------------------------------------------
Lease 19% 10%
- --------------------------------------------------------------------------------
Power 19% 23%
- --------------------------------------------------------------------------------
City, County & State 14% 9%
- --------------------------------------------------------------------------------
Transportation 13% 16%
- --------------------------------------------------------------------------------
University 10% 10%
- --------------------------------------------------------------------------------
Housing 10% 10%
- --------------------------------------------------------------------------------
Miscellaneous Revenue 5% 9%
- --------------------------------------------------------------------------------
Water & Sewer 5% 9%
- --------------------------------------------------------------------------------
Utility 5% -
- --------------------------------------------------------------------------------
Hospital - 2%
- --------------------------------------------------------------------------------
Pollution Control - 2%
- --------------------------------------------------------------------------------
3
<PAGE>
- --------------------------------------------------------------------------------
Standard & Poor's/Moody's
Credit Rating April 30, 1996 October 31, 1995
- --------------------------------------------------------------------------------
AAA/Aaa 38% 41%
- --------------------------------------------------------------------------------
AA/Aa 15% 14%
- --------------------------------------------------------------------------------
A/A 35% 38%
- --------------------------------------------------------------------------------
BBB/Baa 12% 7%
- --------------------------------------------------------------------------------
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
California 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,
Robert Kapito Kevin Klingert
Vice Chairman and Managing Director and
Portfolio Manager Portfolio Manager
BlackRock Financial Management, Inc. BlackRock Financial Management, Inc.
- --------------------------------------------------------------------------------
The BlackRock California Investment Quality Municipal Trust Inc.
- --------------------------------------------------------------------------------
Symbol on American Stock Exchange: RAA
- --------------------------------------------------------------------------------
Initial Offering Date: May 28, 1993
- --------------------------------------------------------------------------------
Closing Stock Price as of 4/30/96: $12.375
- --------------------------------------------------------------------------------
Net Asset Value as of 4/30/96: $13.59
- --------------------------------------------------------------------------------
Yield on Closing Stock Price as of 4/30/96 ($12.375)1: 6.36%
- --------------------------------------------------------------------------------
Current Monthly Distribution per Share2: $0.0656
- --------------------------------------------------------------------------------
Current Annualized Distribution per Share2: $0.7872
- --------------------------------------------------------------------------------
1Yield on Closing Stock Price is calculated by dividing the current annualized
distribution per share by the closing stock price per share.
2The distribution is not constant and is subject to change.
4
<PAGE>
<TABLE>
- -----------------------------------------------------------------------------------------------------------------------------
The BlackRock California Investment
Quality Municipal Trust Inc.
Portfolio of Investments
April 30, 1996
(Unaudited)
- -----------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Principal Option
Amount Call Value
Rating* (000) Description Provisions+ (Note 1)
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
LONG-TERM INVESTMENTS-153.4%
A $1,000 California St., G.O., 5.75%, 3/01/19 ...................................... 3/05 at 101 $ 965,330
California St. Hsg. Fin. Agcy. Rev., Home Mtge.,
A 995 Ser. B-1, 6.45%, 2/01/11 ................................................ 8/04 at 102 1,004,273
AA- 1,000 Ser. G, 7.20%, 8/01/14 .................................................. 8/04 at 102 1,045,310
California St. Pub. Wks. Brd. Lease Rev.,
AAA 1,000 Dept. of Corrections, Ser. B, 5.375%, 12/01/19, MBIA .................... 12/03 at 102 921,550
A- 1,000 Dept. of Corrections, Ser. A, 6.875%, 11/01/14 .......................... 11/04 at 102 1,077,470
A- 1,000 St. Univ. Proj., Ser. A, 6.10%, 10/01/06 ................................ 10/04 at 102 1,062,070
AAA 1,000 St. Univ. Proj., Ser. A, 6.40%, 12/01/16, AMBAC ......................... 12/02 at 102 1,042,900
BBB- 1,385 Foothill/Eastern Trans. Agcy., Ser. A, Zero Coupon, 1/01/04 ............... No Opt. Call 859,393
AA 1,150 Los Angeles Harbor Dept. Rev., Ser. B, 6.00%, 8/01/13 ..................... 8/06 at 101 1,142,329
AA 1,000 Los Angeles Pub. Wks. Fin. Auth. Rev., Regl. Park & Open Space
Dist. A, 6.00%, 10/01/15 ................................................ 10/04 at 102 981,810
A 1,000 MSR Pub. Pwr. Agcy., San Juan Proj., Ser. C, 6.875%, 7/01/19 .............. 1/97 at 102 1,018,410
BBB- 1,000 Sacramento Pwr. Auth. Cogeneration Proj. Rev., 6.50%, 7/01/09 ............. 7/06 at 102 1,013,750
AAA 1,000 Sacramento Utility Dist. Elec. Rev., Ser. E, 5.70%, 5/15/12, MBIA ......... 5/03 at 102 984,270
AAA 1,000 San Diego Ind. Dev. Rev., Ser. A, 5.90%, 6/01/18, AMBAC ................... 6/03 at 102 987,730
San Francisco City & Cnty.,
AAA 1,000 Arpt. Comn. Rev., Intl. Arpt., Ser. 6, 6.125%, 5/01/09, AMBAC ........... 5/04 at 102 1,032,320
AAA 1,000 Sewer Rev., Ser. A, 5.95%, 10/01/25, FGIC ................................. 10/03 at 102 993,180
BBB 750 San Joaquin Hills Trans. Corridor Agcy., Toll Rd. Rev., 6.75%, 1/01/32 .. 1/03 at 102 764,783
Southern California Pub. Pwr. Auth. Transm. Proj. Rev.,
AAA 1,000 5.50%, 7/01/20, MBIA .................................................... 7/02 at 100 924,510
A+ 1,000 6.125%, 7/01/18 ......................................................... 7/02 at 102 998,040
Univ. of California Rev.,
AAA 1,000 Ser. D, 6.10%, 9/01/10, MBIA ............................................ 9/02 at 102 1,029,560
A- 1,135 Ser. B, 6.30%, 9/01/13 .................................................. 9/03 at 102 1,143,183
-----------
Total long-term investments (cost $20,561,102) ............................ 20,992,171
-----------
Total Investments-153.4% (cost $20,561,102) ............................... 20,992,171
Other assets in excess of liabilities-1.4% ................................ 191,448
Liquidation value of preferred stock-(54.8)% .............................. (7,500,000)
-----------
Net Assets Applicable to Common Shareholders-100% ......................... $13,683,619
===========
<FN>
- ----------
*Rating: using the higher of Standard & Poor's, Moody's or Fitch's rating.
+Option call provisions: date (month/year) and prices of the earliest optional
call on redemption. There may be other call provisions at varying prices at
later dates.
</FN>
</TABLE>
<TABLE>
- -----------------------------------------------------------------------------------------------------------------
Key to Abbreviations
<S> <C> <C> <C>
AMBAC -American Municipal Bond Assurance Corporation G.O. -General Obligation Bond
FGIC -Financial Guaranty Insurance Company MBIA -Municipal Bond Insurance Association
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements.
5
<PAGE>
Left Col.
- --------------------------------------------------------------------------------
The BlackRock California Investment
Quality Municipal Trust Inc.
Statement of Assets and Liabilities
April 30, 1996
(Unaudited)
- --------------------------------------------------------------------------------
Assets
Investments, at value (cost $20,561,102) (Note 1) ............... $20,992,171
Receivable for investments sold ................................. 955,786
Interest receivable ............................................. 357,058
Deferred organization expenses and other assets ................. 6,406
-----------
22,311,421
-----------
Liabilities
Bank overdraft .................................................. 70,114
Payable for investments purchased ............................... 1,014,783
Advisory fee payable (Note 2) ................................... 5,918
Dividends payable-preferred stock ............................... 4,500
Dividends payable-common stock .................................. 3,525
Administration fee payable (Note 2) ............................. 1,691
Other accrued expenses .......................................... 27,271
-----------
1,127,802
-----------
Net Investment Assets ........................................... $21,183,619
===========
Net investment assets were comprised of:
Common stock:
Par value (Note 4) .......................................... $ 10,071
Paid-in capital in excess of par ............................ 13,897,103
Preferred stock (Note 4) ...................................... 7,500,000
-----------
21,407,174
Undistributed net investment income ........................... 171,104
Accumulated net realized loss ................................. (825,728)
Net unrealized appreciation ................................... 431,069
-----------
Net investment assets, April 30, 1996 ......................... $21,183,619
===========
Net assets applicable to common shareholders .................... $13,683,619
===========
Net asset value per share:
($13,683,619 + 1,007,093 shares of common
stock issued and outstanding) ................................. $13.59
======
Right Col.
- --------------------------------------------------------------------------------
The BlackRock California Investment
Quality Municipal Trust Inc.
Statement of Operations
Six Months Ended April 30, 1996
(Unaudited)
- --------------------------------------------------------------------------------
Net Investment Income
Income
Interest and discount earned ................................... $ 640,755
---------
Expenses
Investment advisory ............................................ 37,962
Auction agent .................................................. 16,000
Administration ................................................. 10,846
Reports to shareholders ........................................ 7,500
Directors ...................................................... 6,000
Transfer agent ................................................. 5,000
Audit .......................................................... 5,000
Legal .......................................................... 1,000
Custodian ...................................................... 500
Miscellaneous .................................................. 13,986
---------
Total expenses ................................................. 103,794
---------
Net investment income ............................................ 536,961
---------
Realized and Unrealized Gain (Loss)
on Investments (Note 3)
Net realized gain on investments ................................. 22,054
Net change in unrealized appreciation depreciation
on investments ................................................. (289,825)
---------
Net loss on investments .......................................... (267,771)
---------
Net Increase In Net Investment
Assets Resulting from Operations $ 269,190
=========
See Notes to Financial Statements.
6
<PAGE>
- --------------------------------------------------------------------------------
The BlackRock California Investment Quality Municipal Trust Inc.
Statements of Changes in Net Investment Assets
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the For the
Six months Year
Ended Ended
Increase (Decrease) in Net Investment Assets April 30, 1996 October 31, 1995
-------------- ----------------
<S> <C> <C>
Operations:
Net investment income ..................................................... $ 536,961 $ 1,062,204
Net realized gain on investments .......................................... 22,054 156,926
Net change in unrealized appreciation (depreciation) on investments ....... (289,825) 1,963,267
----------- -----------
Net increase in net investment assets resulting from operations ........... 269,190 3,182,397
Dividends and distributions:
To common shareholders from net investment income ......................... (382,270) (792,752)
To preferred shareholders from net investment income ...................... (129,998) (269,472)
To common shareholders in excess of net realized gains on investments ..... (14,099) -
To preferred shareholders in excess of net realized gains on investments .. (4,883) -
----------- -----------
Total increase (decrease) ............................................... (262,060) 2,120,173
Net Investment Assets
Beginning of period ......................................................... 21,445,679 19,325,506
----------- -----------
End of period ............................................................... $21,183,619 $21,445,679
=========== ===========
</TABLE>
See Notes to Financial Statements.
7
<PAGE>
- --------------------------------------------------------------------------------
The BlackRock California Investment Quality Municipal Trust Inc.
Financial Highlights
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the For the Period
Six months Year Ended October 31, June 4, 1993*
Ended ---------------------- Through
PER SHARE OPERATING PERFORMANCE: April 30, 1996 1995 1994 October 31, 1993
-------------- ---- ---- ----------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period ...................................... $ 13.85 $ 11.74 $ 14.73 $ 14.10
-------- -------- -------- --------
Net investment income ................................................... .53 1.05 1.04 .31
Net realized and unrealized gain (loss) on investments .................. (.27) 2.12 (3.01) .83
-------- -------- -------- --------
Net increase (decrease) from investment operations ........................ .26 3.17 (1.97) 1.14
-------- -------- -------- --------
Dividends and Distributions:
Dividends from net investment income to:
Common shareholders ................................................... (.38) (.79) (.79) (.20)
Preferred shareholders ................................................ (.13) (.27) (.18) (.04)
-------- -------- -------- --------
Distributions in excess of net realized gains on investments:
Common shareholders ................................................... (.01) - - -
Preferred shareholders ................................................ -*** - - -
-------- -------- -------- --------
Distributions from capital gains to:
Common shareholders ................................................... - - (.03) -
Preferred shareholders ................................................ - - (.01) -
-------- -------- -------- --------
Total dividends and distributions ....................................... (.52) (1.06) (1.01) (.24)
-------- -------- -------- --------
Capital charge with respect to issuance of common and preferred stock ..... - - (.01) (.27)
-------- -------- -------- --------
Net asset value, end of period** .......................................... $ 13.59 $ 13.85 $ 11.74 $ 14.73#
======== ======== ======== ========
Per share market value, end of period** ................................... $ 12.375 $ 12.625 $ 10.625 $ 14.00
======== ======== ======== ========
TOTAL INVESTMENT RETURN+: ................................................. 1.06% 26.86% (18.85)% .68%
RATIOS TO AVERAGE NET ASSETS OF COMMON SHAREHOLDERS++:
Expenses .................................................................. 1.48%+++ 1.52% 1.25% 1.07%+++
Net investment income ..................................................... 7.64%+++ 8.24% 7.81% 5.31%+++
SUPPLEMENTAL DATA:
Average net assets of common shareholders (in thousands) .................. $ 14,141 $ 12,892 $ 13,362 $ 14,504
Portfolio turnover rate ................................................... 51% 149% 184% 13%
Net assets of common shareholders, end of period (in thousands) ........... $ 13,684 $ 13,946 $ 11,826 $ 14,836
Asset coverage per share of preferred stock, end of period ................ $ 70,612 $ 71,485 $128,837 $148,910
Preferred stock outstanding (in thousands) ................................ $ 7,500 $ 7,500 $ 7,500 $ 7,500
<FN>
- -----------------
*Commencement of investment operations.
**Net asset value and market value are published in The Wall Street Journal
each Monday.
***Actual amount paid to preferred shareholder was $0.00 per common share.
#Netasset value immediately after the closing of the first public offering was
$14.01.
+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 and expenses applicable to both
the common and preferred shares relative to the average net assets of
common shareholders. Ratios do not reflect the effect of dividend payments
to preferred shareholders.
+++Annualized.
The information above represents the unaudited operating performance for a
share of common stock outstanding, total investment return, ratios to average
net assets and other supplemental data for the period indicated. This
information has been determined based upon financial information provided in
the financial statements and market value data for the Trust's common stock.
</FN>
</TABLE>
See Notes to Financial Statements.
8
<PAGE>
Left Col.
- --------------------------------------------------------------------------------
The BlackRock California Investment
Quality Municipal Trust Inc.
Notes to Financial Statements
(Unaudited)
- --------------------------------------------------------------------------------
Note 1. Accounting
Policies
The BlackRock California Investment Quality Municipal Trust Inc. (the "Trust")
was organized in Maryland on April 12, 1993 as a non-diversified closed-end
management investment company. The Trust had no transactions until May 27, 1993
when it sold 7,093 shares of common stock for $100,012 to BlackRock Financial
Management, Inc., (the "Adviser"). Investment operations commenced on June 4,
1993.
The Trust's investment objective is to provide high current income exempt from
regular federal and California state income taxes 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.
Option Selling/Purchasing: When the Trust sells or purchases an option, an
amount equal to the premium received or paid by the Trust is recorded as a
liability or an asset and is
Right Col.
subsequently adjusted to the current market value of the option written or
purchased. Premiums received or paid from writing or purchasing options which
expire unexercised are treated by the Trust on the expiration date as realized
gains or losses. The difference between the premium and the amount paid or
received on effecting a closing purchase or sale transaction, including
brokerage commissions, is also treated as a realized gain or loss. If an option
is exercised, the premium paid or received is added to the proceeds from the
sale or cost of the purchase in determining whether the Trust has realized a
gain or a loss on investment transactions. The Trust, as writer of an option,
may have no control over whether the underlying securities may be sold (call) or
purchased (put) and as a result bears the market risk of an unfavorable change
in the price of the security underlying the written option.
Financial Futures Contracts: A futures contract is an agreement between two
parties to buy and sell a financial instrument for a set price on a future date.
Initial margin deposits are made upon entering into futures contracts and can be
either cash or securities. During the period the futures contract is open,
changes in the value of the contract are recognized as unrealized gains or
losses by "marking-to-market" on a daily basis to reflect the market value of
the contract at the end of each day's trading. Variation margin payments are
made or received, depending upon whether unrealized gains or losses are
incurred. When the contract is closed, the Trust records a realized gain or loss
equal to the difference between the proceeds from (or cost of) the closing
transaction and the Trust's basis in the contract.
Financial futures contracts, when used by the Trust, help in maintaining a
targeted duration. Duration is a measure of the price sensitivity of a security
or a portfolio to relative changes in interest rates. For instance, a duration
of "one" means that a portfolio's or a security's price would be expected to
change by approximately one percent with a one percent change in interest rates,
while a duration of "five" would imply that the price would move approximately
five percent in relation to a one percent change in interest rates. Futures
contracts can be sold to effectively shorten an otherwise longer duration
portfolio. In the same sense, futures contracts can be purchased to lengthen a
portfolio that is shorter than its duration target. Thus, by buying or selling
futures contracts, the Trust can effectively "hedge" more volatile positions so
that changes in interest rates do not change the duration of the portfolio
unexpectedly.
The Trust may invest in financial futures contracts primarily for the purpose
of hedging its existing portfolio securities or
9
<PAGE>
securities the Trust intends to purchase against fluctuations in value caused by
changes in prevailing market interest rates. Should interest rates move
unexpectedly, the Trust may not achieve the anticipated benefits of the
financial futures contracts and may realize a loss. The use of futures
transactions involves the risk of imperfect correlation in movements in the
price of futures contracts, interest rates and the underlying hedged assets. The
Trust is also at risk of not being able to enter into a closing transaction for
the futures contract because of an illiquid secondary market. In addition, since
futures are used to shorten or lengthen a portfolio's duration, there is a risk
that the portfolio may have temporarily performed better without the hedge or
that the Trust may lose the opportunity to realize appreciation in the market
price of underlying positions.
Short Sales: The Trust may make short sales of securities as a method of hedging
potential price declines in similar securities owned. When the Trust makes a
short sale, it may borrow the security sold short and deliver it to the
broker-dealer through which it made the short sale as collateral for its
obligation to deliver the security upon conclusion of the sale. The Trust may
have to pay a fee to borrow the particular securities and may be obligated to
pay over any payments received on such borrowed securities. A gain, limited to
the price at which the Trust sold the security short, or a loss, unlimited as to
dollar amount, will be recognized upon the termination of a short sale if the
market price is greater or less than the proceeds originally received.
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.
Right Col.
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.
Reclassification of Capital Accounts: The Trust accounts and reports for
permanent differences between financial and tax reporting in accordance with the
American Institute of Certified Public Accountants' Statement of Position, 93-2:
Determination, Disclosure and Financial Statement Presentation of Income,
Capital Gain and Return of Capital Distributions by Investment Companies. The
effect of adopting the statement for the six months ended April 30, 1996 was to
increase accumulated net realized loss and increase undistributed net investment
income by $3,486. Net investment income, net realized gains and net assets were
not affected by this change.
Note 2. Agreements
The Trust has an Investment Advisory Agreement with the Adviser and an
Administration Agreement with Prudential Mutual Fund Management, Inc. ("PMF"),
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 PMF 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. PMF pays occupancy and certain clerical and
accounting costs of the Trust. The Trust bears all other costs and expenses.
On February 28, 1995, the advisor was acquired by PNC Bank, N.A. As a result,
the Adviser is a wholly-owned corporate subsidiary of PNC Asset Management
Group, Inc., the holding company for PNC's asset management businesses.
Note 3. Portfolio
Securities
Purchases and sales of investment securities, other than short-term investments,
for the period ended April 30, 1996 aggregated $11,294,819 and $10,943,935,
respectively.
10
<PAGE>
The federal income tax basis of the Trust's investments at April 30, 1996 was
substantially the same as the basis for financial reporting and, accordingly,
net unrealized appreciation for federal income tax purposes, was $431,069 (gross
unrealized appreciation-$516,577; gross unrealized depreciation-$85,508).
For federal income tax purposes, the Trust had a capital loss carryforward at
October 31, 1995 of approximately $848,000 which will expire in 2002. Such
carryforward amount is after realization of approximately $134,000 in net
taxable gains recognized during the fiscal year ended October 31, 1995.
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
1,007,093 shares outstanding at April 30, 1996, the Adviser owned 7,093 shares.
As of April 30, 1996 there were 300 shares at preferred stock series W7
outstanding.
Offering costs ($104,994) incurred in connection with the underwriting of the
Trust's common stock have been charged to paid-in capital in excess of par of
the common stock.
The Trust may classify or reclassify any unissued shares of common stock into
one or more series of preferred stock. On July 29, 1993 the Trust reclassified
150 shares of common stock and issued a series of Auction Market Preferred Stock
("Preferred Stock") Series W7. 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 Preferred Stock into two
shares and simultaneously reduce each share's liquidation preference from
$50,000 to $25,000 plus any accumulated but unpaid dividends. The stock split
occurred on July 24, 1995.
Underwriting discounts ($112,500) and offering costs ($75,344) incurred in
connection with the Preferred Stock offering have been charged to paid-in
capital in excess of par of the common stock.
Dividends on Series W7 are cumulative at a rate which is reset every 7 days
based on the results of an auction. Dividend rates ranged from 3.00% to 4.99%
during the period ended April 30, 1996.
Right Col.
The Trust may not declare dividends or make other distributions on shares of
common stock or purchase any such shares if, at the time of the declaration,
distribution, or purchase, asset coverage with respect to the outstanding
Preferred Stock would be less than 200%.
The Preferred Stock is redeemable at the option of the Trust, in whole or in
part, on any dividend payment date at $25,000 per share plus any accumulated or
unpaid dividends whether or not declared. The Preferred Stock is also subject to
mandatory redemption at $25,000 per share plus any accumulated or unpaid
dividends, whether or not declared if certain requirements relating to the
composition of the assets and liabilities of the Trust as set forth in the
Articles of Incorporation are not satisfied.
The holders of Preferred Stock have voting rights equal to the holders of
common stock (one vote per share) and will vote together with holders of shares
of common stock as a single class. However, holders of Preferred Stock are also
entitled to elect two of the Trust's directors. In addition, the Investment
Company Act of 1940 requires that along with approval by stockholders that might
otherwise be required, the approval of the holders of a majority of any
outstanding preferred shares, voting separately as a class would be required to
(a) adopt any plan of reorganization that would adversely affect the preferred
shares and (b) take any action requiring a vote of security holders, including,
among other things, changes in the Trust's subclassification as a closed-end
investment company or changes in its fundamental investment restrictions.
Note 5. Dividends
Subsequent to April 30, 1996, the Board of Directors of the Trust declared a
dividend from undistributed earnings of $0.0656 per common share payable May 31,
1996 to shareholders of record on May 15, 1996.
For the period May 1, 1996 to May 31, 1996, dividends declared on Preferred
Stock totalled $22,684 in aggregate for the outstanding Preferred Stock.
11
<PAGE>
Note 6. Quarterly Data
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase/
Net realized and decrease in
unrealized net investment Dividends
Net investment gains (losses) on assets resulting Common shares Preferred shares*
income investments from operations Period
Per Per Per Per Per Share price of end
Quarterly Total Common Common Common Common Common Common stock net asset
period income Amount share Amount share Amount share Amount share Amount share High Low value
--------- ------ ------------- -------------- -------------- -------------- ------------ -------------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
May 1, 1994
to July 31, 1994 $302,866 $260,859 $.26 $ 377,218 $ .37 $ 638,077 $ .63 $198,193 $.20 $48,416 $.05 $12 $11 1/4 $12.97
August 1, 1994
to October 31, 1994 307,462 263,751 .26 (1,232,502) 1.22) (968,751) (.96) 198,190 .20 54,767 .05 11 3/4 9 7/8 11.74
November 1, 1994
to January 31, 1995 314,677 272,661 .27 505,599 .50 778,260 .77 198,190 .19 68,381 .07 11 1/2 10 1/4 12.25
February 1, 1995
to April 30, 1995 312,600 264,234 .26 708,162 .71 972,396 .97 198,196 .20 67,596 .07 12 1/2 11 3/8 12.95
May 1, 1995
to July 31, 1995 313,879 264,454 .26 190,799 .19 455,253 .45 198,180 .20 70,985 .07 12 3/4 12 13.14
August 1, 1995
to October 31, 1995 316,413 260,855 .26 715,633 .72 976,488 .98 198,186 .20 62,510 .06 12 7/8 12 1/8 13.85
November 1, 1995
to January 31, 1996 19,850 267,498 .26 547,277 .54 814,775 .80 198,192 .20 71,425 .07 13 1/4 12 1/2 14.39
February 1, 1996
to April 30, 1996 320,905 269,463 .27 (815,048) (.81) 545,585) (.54) 198,177 .19 63,456 .06 13 1/8 12 3/8 13.59
- ------------------------------------------------------------------------------------------------------------------------------------
<FN>
*For the six months ended April 30, 1996 the average annualized rate paid to preferred shareholders was 3.62%.
</FN>
</TABLE>
12
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK CALIFORNIA INVESTMENT QUALITY MUNICIPAL TRUST INC.
ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
There have been no material changes in the Trust's investment objectives or
policies that have not been approved by the shareholders, or to its charter or
by-laws, or in the principal risk factors associated with investment in the
Trust. There have been no changes in the persons who are primarily responsible
for the day-to-day management of the Trust's portfolio.
The Annual Meeting of Trust Shareholders was held May 8, 1996 to vote on the
following matters:
(1) To elect the following two Directors to serve as follows:
Director Class Term Expiring
----- ---- --------
Frank J. Fabozzi* ..................... II 3 years 1999
Ralph L. Schlosstein .................. II 3 years 1999
*Represents the preferred shareholders.
Directors whose term of office continues beyond this meeting are Andrew F.
Brimmer, Richard E. Cavanagh, Kent Dixon, Laurence D. Fink, James Grosfeld and
James Clayburn LaForce, Jr.
(2) To ratify the selection of Deloitte & Touche LLP as independent public
accountants of the Trust for the fiscal year ending October31, 1996.
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>
Frank J. Fabozzi ...................... 286 - -
Ralph L. Schlosstein ..................
Ratification of Deloitte & Touche LLP . 746,578 3,333 3,220
</TABLE>
- --------------------------------------------------------------------------------
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 Boston EquiServe (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 effect 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.
13
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK CALIFORNIA INVESTMENT QUALITY MUNICIPAL TRUST INC.
INVESTMENT SUMMARY
- --------------------------------------------------------------------------------
The Trust's Investment Objective
The BlackRock California Investment Quality Municipal Trust's investment
objective is to provide high current income exempt from regular Federal and
California income tax consistent with the preservation of capital.
Who Manages the Trust?
BlackRock Financial Management, Inc. ("BlackRock" or the "Adviser") is the
investment adviser for the Trust. BlackRock is a registered investment adviser
specializing in fixed income securities. Currently, BlackRock manages over $41
billion of assets across the government, mortgage, corporate and municipal
sectors. These assets are managed on behalf of institutional and individual
investors in 21 closed-end funds traded on eitherthe New York or American Stock
Exchanges, several open-end funds and over 80 separate accounts for various
clients in the U.S. and overseas. BlackRock is a subsidiary of PNC Asset
Management Group which is a division of PNC Bank, N.A., one of the nation's
largest banking organizations.
What Can the Trust Invest In?
Under normal conditions, the Trust expects to continue to manage its assets so
that at least 80% of its investments are rated investment grade ("BBB" by
Standard & Poor's and "Baa" by Moody's Investor Services) and up to 20% of its
assets may instead be deemed to be of equivalent credit quality by the Adviser.
The Trust intends to invest substantially all of the assets in a portfolio of
investment grade California Municipal Obligations, which include debt
obligations issued by or on behalf of California, 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 regular
Federal and California income tax. California 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 California 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 California 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 reinvested in
additional shares of the fund through the Trust's transfer agent, Boston
Financial Data Services. 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
14
<PAGE>
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 and California income tax consistent
with the preservation of capital, there can be no assurance that this objective
will be achieved.
Dividend Considerations. The income and dividends paid by the Trust are likely
to vary over time as fixed income market conditions change. Future dividends may
be higher or lower than the dividend the Trust is currently paying.
Leverage. The Trust utilizes leverage through preferred stock, which involves
special risks. The Trust's net asset value and market value may be more volatile
due to its use of leverage.
Market Price of Shares. The shares of closed-end investment companies such as
the Trust trade on the American Stock Exchange (AMEX symbol: RAA) and as such
are subject to supply and demand influences. As a result, shares may trade at a
discount or a premium to their net asset value.
Investment Grade Municipal Obligations. The value of municipal debt securities
generally varies inversely with changes in prevailing market interest rates.
Depending on the amount of call protection that the securities in the Trust
have, the Trust may be subject to certain reinvestment risks in environments of
declining interest rates.
Illiquid Securities. The Trust may invest in securities that are illiquid,
although under current market conditions the Trust expects to do so to only a
limited extent. These securities involve special risks.
Antitakeover Provisions. Certain antitakeover provisions will make a change in
the Trust's business or management more difficult without the approval of the
Trust's Board of Directors and may have the effect of depriving shareholders of
an opportunity to sell their shares at a premium above the prevailing market
price.
15
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK CALIFORNIA 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 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.
16
<PAGE>
- --------------------------------------------------------------------------------
BLACKROCK FINANCIAL MANAGEMENT, INC.
SUMMARY OF CLOSED-END FUNDS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Taxable Trusts
- ---------------------------------------------------------------------------------------------------------
Stock Maturity
Perpetual Trusts Symbol Date
------ --------
<S> <C> <C>
The BlackRock Income Trust Inc. BKT N/A
The BlackRock North American Government Income Trust Inc. BNA N/A
Term Trusts
The BlackRock 1998 Term Trust Inc. BBT 12/98
The BlackRock 1999 Term Trust Inc. BNN 12/99
The BlackRock Target Term Trust Inc. BTT 12/00
The BlackRock 2001 Term Trust Inc. BLK 06/01
The BlackRock Strategic Term Trust Inc. BGT 12/02
The BlackRock Investment Quality Term Trust Inc. BQT 12/04
The BlackRock Advantage Term Trust Inc. BAT 12/05
The BlackRock Broad Investment Grade 2009 Term Trust Inc. BCT 12/09
Tax-Exempt Trusts
- ---------------------------------------------------------------------------------------------------------
Stock Maturity
Perpetual Trusts Symbol Date
------ --------
The BlackRock Investment Quality Municipal Trust Inc. BKN N/A
The BlackRock California Investment Quality Municipal Trust Inc. RAA N/A
The BlackRock Florida Investment Quality Municipal Trust RFA N/A
The BlackRock New Jersey Investment Quality Municipal Trust Inc. RNJ N/A
The BlackRock New York Investment Quality Municipal Trust Inc. RNY N/A
Term Trusts
The BlackRock Municipal Target Term Trust Inc. BMN 12/06
The BlackRock Insured Municipal 2008 Term Trust Inc. BRM 12/08
The BlackRock California Insured Municipal 2008 Term Trust Inc. BFC 12/08
The BlackRock Florida Insured Municipal 2008 Term Trust BRF 12/08
The BlackRock New York Insured Municipal 2008 Term Trust Inc. BLN 12/08
The BlackRock Insured Municipal Term Trust Inc. BMT 12/10
</TABLE>
If you would like further information
please call BlackRock at (800) 227-7BFM (7236)
or consult with your financial advisor.
17
<PAGE>
- --------------------------------------------------------------------------------
BLACKROCK FINANCIAL MANAGEMENT, INC.
AN OVERVIEW
- --------------------------------------------------------------------------------
BlackRock Financial Management (BlackRock) is a registered investment
adviser which specializes in managing high quality fixed income securities, both
taxable and tax exempt. BlackRock currently manages over $41 billion of assets
across the government, mortgage, corporate and municipal sectors. These assets
are managed on behalf of many individual investors in twenty-one closed-end
funds traded on either the New York or American stock exchanges, and several
open-end funds and on behalf of more than 80 institutional clients in the United
States and overseas. BlackRock's institutional investor base includes Chrysler
Corporation Master Retirement Trust, General Retirement System of the City of
Detroit, State Treasurer of Florida, Ford Motor Company Pension Plan, General
Electric Pension Trust and Unisys Corporation Master Trust.
BlackRock was formed in April 1988 by fixed income professionals who sought
to create an asset management firm specializing in managing fixed income
securities for individuals and institutional investors. The professionals at
BlackRock have extensive experience creating, analyzing and trading a variety of
fixed income instruments, including the most complex structured securities. In
fact, individuals at BlackRock are responsible for many of the major innovations
in the mortgage-backed and asset-backed securities markets, including the
creation of the CMO, the floating rate CMO, the senior/subordinated pass-through
and the multi-class asset-backed security.
BlackRock is unique among asset management and advisory firms in the
significant emphasis it places on the development of proprietary analytical
capabilities. A quarter of the professionals at BlackRock work full-time in the
design, maintenance and use of such systems which are otherwise not generally
available to investors. BlackRock's proprietary analytical tools are used for
evaluating, investing in and designing investment strategies and portfolios of
fixed income securities, including mortgage securities, corporate debt
securities or tax-exempt securities and a variety of hedging instruments.
BlackRock has developed investment products which respond to investors'
needs and has been responsible for several major innovations in closed-end
funds. BlackRock introduced the first closed-end mortgage fund, the first
taxable and tax-exempt closed-end funds to offer a finite term, the first
closed-end fund to achieve a AAAf rating by Standard & Poor's, and the first
closed-end fund to invest primarily in North American Government securities.
BlackRock's closed-end funds currently have dividend reinvestment plans which
are designed to provide an ongoing source of demand for the stock in the
secondary market. BlackRock manages a ladder of alternative investment vehicles,
with each fund having specific investment objectives and policies.
In view of our continued desire to provide a high level of service to all
our shareholders, BlackRock maintains a toll-free number for your questions. The
number is (800) 227-7BFM (7236). We encourage you to call us with any questions
you may have about your BlackRock funds and thank you for the continued trust
you place in our abilities.
If you would like further information
please do not hesitate to call BlackRock at (800) 227-7BFM
18
<PAGE>
Left Col.
BlackRock
Directors
Laurence D. Fink, Chairman
Andrew F. Brimmer
Richard E. Cavanagh
Kent Dixon
Frank J. Fabozzi
James Grosfeld
James Clayburn La Force, Jr.
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 Mutual Fund Management, Inc.
One Seaport Plaza
New York, NY 10292
Custodian
State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171
Transfer Agent
Boston EquiServe L.P.
150 Royall Street
Canton, MA 02021
(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
919 Third Avenue
New York, NY 10022
The accompanying financial statements as of
April 30, 1996 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 California Investment
Quality Municipal Trust Inc.
c/o Prudential Mutual Fund Management, Inc.
32nd Floor
One Seaport Plaza
New York, NY 10292
(800) 227-7BFM
09247U-10-7
09247U-20-6
Right Col.
The BlackRock
California
Investment Quality
Municipal Trust Inc.
- ---------------------------------------
Semi-Annual Report
April 30, 1996
