- --------------------------------------------------------------------------------
THE BLACKROCK CALIFORNIA INVESTMENT QUALITY MUNICIPAL TRUST INC.
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
California Investment Quality Municipal Trust Inc. ("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 "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 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 California.
The table below summarizes the changes in the Trust's stock price and net
asset value over the past year:
- --------------------------------------------------------------------------------
4/30/98 10/31/97 CHANGE HIGH LOW
- --------------------------------------------------------------------------------
STOCK PRICE $15.75 $15.00 5.00% $16.125 $14.875
- --------------------------------------------------------------------------------
NET ASSET VALUE (NAV) $14.95 $14.77 1.22% $15.29 $14.73
- --------------------------------------------------------------------------------
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
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.
2
<PAGE>
California's economy has recovered. Today's growth industries include
entertainment, high technology, biotechnology and small start-up businesses that
have recently contributed to the state's fiscal viability. Additionally, the
construction industry is booming, as building is occurring in both the
commercial and residential sectors. A growing population has resulted in
significantly increased revenues, stabilizing the State's financial position to
such a degree that California maintains a balanced budget. The State's job
growth continues to exceed that of the U.S. These positive trends may result in
an upgrade of the State's credit rating to the AA category. The Asian economic
turmoil's impact on the California economy is currently being offset by
increased trade with Mexico.
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
- --------------------------------------------------------------------------------
University 20% 20%
- --------------------------------------------------------------------------------
Transportation 20% 20%
- --------------------------------------------------------------------------------
Lease 12% 11%
- --------------------------------------------------------------------------------
District 10% --
- --------------------------------------------------------------------------------
Housing 9% 10%
- --------------------------------------------------------------------------------
Power 9% 10%
- --------------------------------------------------------------------------------
City, County & State 5% 5%
- --------------------------------------------------------------------------------
Water & Sewer 5% 5%
- --------------------------------------------------------------------------------
Student Loans 5% 5%
- --------------------------------------------------------------------------------
Industrial 5% 5%
- --------------------------------------------------------------------------------
Sales Tax -- 5%
- --------------------------------------------------------------------------------
Miscellaneous Revenue -- 4%
================================================================================
3
<PAGE>
================================================================================
STANDARD & POOR'S/MOODY'S/FITCH'S
CREDIT RATING APRIL 30, 1998 OCTOBER 31, 1997
- --------------------------------------------------------------------------------
AAA/Aaa 50% 52%
- --------------------------------------------------------------------------------
AA/Aa 20% 21%
- --------------------------------------------------------------------------------
A/A 21% 22%
- --------------------------------------------------------------------------------
BBB/Baa 9% 5%
================================================================================
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,
/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 CALIFORNIA INVESTMENT QUALITY MUNICIPAL TRUST INC.
- --------------------------------------------------------------------------------
Symbol on American Stock Exchange: RAA
- --------------------------------------------------------------------------------
Initial Offering Date: May 28, 1993
- --------------------------------------------------------------------------------
Closing Stock Price as of 4/30/98: $15.75
- --------------------------------------------------------------------------------
Net Asset Value as of 4/30/98: $14.95
- --------------------------------------------------------------------------------
Yield on Closing Stock Price as of 4/30/98 ($15.75)1: 5.57%
- --------------------------------------------------------------------------------
Current Monthly Distribution per Share2: $0.073125
- --------------------------------------------------------------------------------
Current Annualized Distribution per Share2: $0.8775
================================================================================
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>
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THE BLACKROCK CALIFORNIA INVESTMENT QUALITY MUNICIPAL TRUST INC.
PORTFOLIO OF INVESTMENTS APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT OPTION CALL VALUE
RATING* (000) DESCRIPTION PROVISIONS (NOTE 1)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
LONG-TERM INVESTMENTS--146.3%
California Educational Facilities Auth. Rev.,
AAA $1,000 Santa Clara Univ., 5.00%, 9/01/15, MBIA ........................ 9/06 at 102 $ 974,900
AAA 1,000 Student Loan Program, Series A, 6.00%, 3/01/16, MBIA ........... 3/07 at 102 1,045,670
A1 1,000 California St., G.O., 3/01/19 .................................... 3/05 at 101 1,078,211
California St. Hsg. Fin. Agcy. Rev., Home Mtge.,
Aa2 945 Ser. B-1, 6.45%, 2/01/11 ....................................... 8/04 at 102 1,001,369
Aa2 1,000 Ser. G, 7.20%, 8/01/14 ......................................... 8/04 at 102 1,093,710
California St. Pub. Wks. Brd. Lease Rev.,
Aaa 1,000 Dept. of Corrections, Ser. A, 6.875%, 11/01/04 ................. N/A 1,153,460
A 1,000 St. Univ. Proj., Ser. A, 6.10%, 10/01/06 ....................... 10/04 at 102 1,093,120
AAA 1,000 St. Univ. Proj., Ser. A., 6.40%, 12/01/02, AMBAC N/A 1,102,750
Baa 1,385 Foothill / Eastern Trans. Agcy., Ser. A, Zero Coupon, 1/01/04 .... No Opt. Call 1,044,595
AAA 1,000 Los Angeles Cnty. Special Tax, Ser. A, 5.50%, 9/01/14, FSA ....... No Opt. Call 1,040,620
AA 1,150 Los Angeles Harbor Dept. Rev., Ser. B, 6.00%, 8/01/13 ............ 8/06 at 101 1,232,984
AAA 1,000 Los Angeles Met. Trans. Auth. Sales Tax Rev., 6.00%, 7/01/26, MBIA 7/06 at 101 1,064,050
AA 1,000 Los Angeles Pub. Wks. Fin. Auth. Rev., Regl. Park & Open Space,
Dist. A, 6.00%, 10/01/04 ....................................... N/A 1,100,600
BBB- 1,000 Sacramento Pwr. Auth., Cogeneration Proj. Rev., 6.50%, 7/01/09 ... 7/06 at 102 1,086,170
AAA 1,000 San Diego Ind. Dev. Rev., Ser. A, 5.90%, 6/01/18, AMBAC .......... 6/03 at 102 1,051,150
San Francisco City & Cnty.,
AAA 1,000 Arpt. Comn. Rev., Intl. Arpt., Ser. 6, 6.125%, 5/01/09, AMBAC .. 5/04 at 102 1,086,970
AAA 1,000 Sewer Rev., Ser. A, 5.95%, 10/01/25, FGIC ...................... 10/03 at 102 1,053,090
AAA 1,000 Southern California Pub. Pwr. Auth. Transmission Proj. Rev.,
5.50%, 7/01/20, MBIA ........................................... 7/02 at 100 1,007,520
Univ. of California Rev.,
AAA 1,000 Ser. D, 6.10%, 9/01/02 , MBIA ................................. N/A 1,086,870
A 1,135 Ser. B, 6.30%, 9/01/03 ......................................... N/A 1,254,255
AAA 370 West Basin Municipal Water Dist. Rev., C.O.P.,
Ser. A, 5.50%, 8/01/22, AMBAC .................................. 8/07 at 101 376,967
----------
Total long-term investments (cost $20,184,899) ................... 22,029,031
-----------
SHORT-TERM INVESTMENTS**--1.3%
A-1+ 100 California St. Hlth. Fac. Fin. Auth.
Rev., Sutter Hlth. Sys. Proj., Ser. A, 4.10%, 5/01/98, FRDD .... N/A 100,000
A-1+ 100 Orange Cnty. Sanitation Dists., C.O.P.
4.10%, 5/01/98, FRDD ........................................... N/A 100,000
-----------
Total short-term investments (cost $200,000) ..................... 200,000
-----------
TOTAL INVESTMENTS--147.6% (cost $20,384,899) ..................... 22,229,031
Other assets in excess of liabilities--2.2% ...................... 327,018
Liquidation value of preferred stock--(49.8)% .................... (7,500,000)
-----------
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS--100% ............... $15,056,049
===========
</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 optional
call on redemption. There may be other call provisions at varying prices at
later dates.
++ This bond is prerefunded. See Glossary for definitions.
- --------------------------------------------------------------------------------
KEY TO ABBREVIATIONS
AMBAC -- American Municipal Bond FSA -- Financial Security Assurance
Assurance Corporation G.O. -- General Obligation Bond
C.O.P. -- Certificate of Participation MBIA -- Municipal Bond Insurance
FGIC -- Financial Guaranty Insurance Association
Company
FRDD -- Floating Rate Daily Demand
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
5
<PAGE>
- ---------------------------------------------------------
THE BLACKROCK CALIFORNIA INVESTMENT
QUALITY MUNICIPAL TRUST INC.
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1998 (UNAUDITED)
- ---------------------------------------------------------
ASSETS
Investments, at value (cost $20,384,899)
(Note 1) .................................. $22,229,031
Cash ........................................ 45,439
Interest receivable ......................... 306,642
Deferred organization expenses and other
assets .................................... 300
-----------
22,581,412
-----------
LIABILITIES
Advisory fee payable (Note 2) ............... 6,550
Administration fee payable (Note 2) ......... 1,872
Dividends payable-preferred stock ........... 719
Other accrued expenses ...................... 16,222
-----------
25,363
-----------
NET INVESTMENT ASSETS ....................... $22,556,049
===========
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 ....... 123,448
Accumulated net realized loss ............. (818,705)
Net unrealized appreciation ............... 1,844,132
-----------
Net investment assets, April 30, 1998 ..... $22,556,049
===========
Net assets applicable to common
shareholders ............................ $15,056,049
===========
Net asset value per share:
($15,056,049 / 1,007,093 shares of common
stock issued and outstanding) ............. $14.95
======
- ---------------------------------------------------------
THE BLACKROCK CALIFORNIA INVESTMENT
QUALITY MUNICIPAL TRUST INC.
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1998 (UNAUDITED)
- ---------------------------------------------------------
NET INVESTMENT INCOME
Income
Interest and discount earned ................ $ 632,837
----------
Expenses
Investment advisory ....................... 39,453
Administration ............................ 11,272
Auction agent ............................. 9,500
Directors ................................. 6,000
Transfer agent ............................ 4,000
Audit ..................................... 4,000
Legal ..................................... 4,000
Reports to shareholders ................... 3,000
Custodian ................................. 1,500
Miscellaneous ............................. 10,484
----------
Total expenses ............................ 93,209
----------
Net investment income ....................... 539,628
----------
UNREALIZED GAIN ON
INVESTMENTS (NOTE 3)
Net change in unrealized appreciation
on investments ............................ 205,636
----------
NET INCREASE IN NET INVESTMENT
ASSETS RESULTING FROM OPERATIONS ............ $ 745,264
==========
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>
INCREASE (DECREASE) IN NET INVESTMENT ASSETS SIX MONTHS YEAR
ENDED ENDED
APRIL 30, 1998 OCTOBER 31, 1997
-------------- ----------------
<S> <C> <C>
Operations:
Net investment income ............................................................ $ 539,628 $ 1,080,949
Net realized gain on investments -- 1,100
Net change in unrealized appreciation on investments ............................. 205,636 618,624
----------- -----------
Net increase in net investment assets resulting from operations .................. 745,264 1,700,673
Dividends and distributions:
To common shareholders from net investment income ................................ (441,821) (876,796)
To preferred shareholders from net investment income ............................. (120,868) (245,735)
To common shareholders in excess of net realized gains on investments ............ -- (564)
To preferred shareholders in excess of net realized gains on investments ......... -- (186)
----------- -----------
Total dividends and distributions ................................................ (562,689) (1,123,281)
----------- -----------
Total increase ................................................................. 182,575 577,392
NET INVESTMENT ASSETS
Beginning of period ................................................................. 22,373,474 21,796,082
----------- -----------
End of period ....................................................................... $22,556,049 $22,373,474
=========== ===========
</TABLE>
See Notes to Financial Statements.
7
<PAGE>
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THE BLACKROCK CALIFORNIA INVESTMENT QUALITY MUNICIPAL TRUST INC.
FINANCIAL HIGHLIGHTS (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE PERIOD
JUNE 4, 1993*
SIX MONTHS YEAR ENDED OCTOBER 31, THROUGH
ENDED --------------------------------------------- OCTOBER 31,
PER SHARE OPERATING PERFORMANCE: APRIL 30,1998 1997 1996 1995 1994 1993
----------- ---- ---- ---- ---- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 14.77 $ 14.20 $ 13.85 $ 11.74 $ 14.73 $ 14.10
------- ------- ------- ------- ------- -------
Net investment income .54 1.07 1.08 1.05 1.04 .31
Net realized and unrealized gain
(loss) on investments .20 .61 .33 2.12 (3.01) .83
------- ------- ------- ------- ------- -------
Net increase (decrease) from
investment operations .74 1.68 1.41 3.17 (1.97) 1.14
------- ------- ------- ------- ------- -------
Dividends and Distributions:
Dividends from net investment income to:
Common shareholders (.44) (.87) (.80) (.79) (.79) (.20)
Preferred shareholders (.12) (.24) (.25) (.27) (.18) (.40)
Distributions from capital gains to:
Common shareholders -- -- -- -- (.03) --
Preferred shareholders -- -- -- -- (.01) --
Distributions in excess of net realized
gains on investments to:
Common shareholders -- *** (.01) -- -- --
Preferred shareholders -- *** *** -- -- --
------- ------- ------- ------- ------- -------
Total dividends and distributions (.56) (1.11) (1.06) (1.06) (1.01) (.24)
------- ------- ------- ------- ------- -------
Capital charge with respect to issuance of
common and preferred stock -- -- -- -- (.01) (.27)
------- ------- ------- ------- ------- -------
Net asset value, end of period** $ 14.95 $ 14.77 $ 14.20 $ 13.85 $ 11.74 $ 14.73#
======= ======= ======= ======= ======= =======
Per share market value, end of period** $ 15.75 $ 15.00 $ 13.50 $12.625 $10.625 $ 14.00
======= ======= ======= ======= ======= =======
TOTAL INVESTMENT RETURN+: 8.02% 17.98% 13.80% 26.86% (18.85)% .68%
RATIOS TO AVERAGE NET ASSETS OF
COMMON SHAREHOLDERS++:
Expenses 1.24%+++ 1.32% 1.42% 1.52% 1.25% 1.07%+++
Net investment income before preferred
stock dividends 7.18%+++ 7.48% 7.78% 8.24% 7.81% 5.31%+++
Preferred stock dividends 1.61%+++ 1.70% 1.82% 2.09% 1.36% 0.73%+++
Net investment income available to common
shareholders 5.57%+++ 5.78% 5.96% 6.15% 6.45% 4.58%+++
SUPPLEMENTAL DATA:
Average net assets of common shareholders
(in thousands) $ 15,169 $ 14,445 $ 13,996 $ 12,892 $ 13,362 $ 14,504
Portfolio turnover rate 4% 28% 72% 149% 184% 13%
Net assets of common shareholders, end of
period (in thousands) $ 15,056 $ 14,873 $ 14,296 $ 13,946 $ 11,826 $ 14,836
Asset coverage per share of preferred stock,
end of period## $ 75,187 $ 74,583 $ 72,654 $ 71,485 $128,837 $148,910
Preferred stock outstanding (in thousands) $ 7,500 $ 7,500 $ 7,500 $ 7,500 $ 7,500 $ 7,500
</TABLE>
- ----------
* Commencement of investment operations.
** Net asset value and market value are published in The Wall Street Journal
each Monday.
*** Actual amount paid for the year ended October 31, 1997 to common share-
holders was $0.00056 per share and to preferred shareholders was $0.00018
per common share. Actual amount paid to preferred shareholders for the year
ended October 31, 1996 was $0.0048 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, ratio 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.
See Notes to Financial Statements.
8
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK CALIFORNIA INVESTMENT
QUALITY MUNICIPAL TRUST INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
NOTE 1. ACCOUNTING The BlackRock California Investment Quality Muni-
POLICIES cipal Trust Inc. (the "Trust") was organized in
Maryland on April 12, 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 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.
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.
9
<PAGE>
NOTE 3. PORTFOLIO There were no purchases Securities and sales of
investment securities, other than short-term
investments, for the six months ended April 30, 1998.
The federal income tax basis of the Trust's investments at April 30, 1998 was
substantially the same as the basis for financial reporting purposes and,
accordingly, net and gross unrealized appreciation was $1,844,132.
For federal income tax purposes, the Trust had a capital loss carryforward at
October 31, 1997 of approximately $817,000 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 1,007,093 shares
outstanding at April 30, 1998, the Adviser owned 7,093 shares. As of April 30,
1998 there were 300 shares of Preferred Stock Series W7 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
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.
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 3.10% to 3.76%
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 restrictions.
NOTE 5. DIVIDENDS Subsequent to April 30, 1998, the Board of Direc-
tors of the Trust declared a dividend from
undistributed earnings of $.073125 per common share payable May 29, 1998 to
shareholders of record on May 15, 1998.
For the period May 1, 1998 to May 31, 1998, dividends declared on Preferred
Stock totalled $22,309 in aggregate for the outstanding Preferred Stock.
10
<PAGE>
- --------------------------------------------------------------------------------
THE BLACKROCK CALIFORNIA INVESTMENT QUALITY MUNICIPAL TRUST INC.
DIVIDEND INVESTMENT 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 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 shares.
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.
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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 .......................... 631,662 0 2,338
James Clayburn La Force, Jr. ............ 631,449 0 2,550
Ratification of Deloitte &Touche LLP .... 619,495 5,704 8,801
</TABLE>
11
<PAGE>
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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") 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 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 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, 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.
12
<PAGE>
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 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.
13
<PAGE>
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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.
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.
14
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
BLACKROCK FINANCIAL MANAGEMENT, INC.
SUMMARY OF CLOSED-END FUNDS
- --------------------------------------------------------------------------------
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
</TABLE>
<TABLE>
<CAPTION>
TAX-EXEMPT TRUSTS
- ---------------------------------------------------------------------------------------------------------------------------
STOCK MATURITY
PERPETUAL TRUSTS SYMBOL DATE
------ ------
<S> <C> <C>
The BlackRock Investment Quality Municipal Trust Inc. BKN N/A
The BlackRock California Investment Quality Municipal Trust Inc. RAA N/A
The BlackRock Florida Investment Quality Municipal Trust Inc. 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 Inc. 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.
15
<PAGE>
BLACKROCK
DIRECTORS
Laurence D. Fink, CHAIRMAN
Andrew F. Brimmer
Richard E. Cavanagh
Kent Dixon
Frank J. Fabozzi
James Grosfeld
James Clayburn La Force, Jr.
Walter F. Mondale
Ralph L. Schlosstein
OFFICERS
Ralph L. Schlosstein, PRESIDENT
Keith T. Anderson, VICE PRESIDENT
Michael C. Huebsch, VICE PRESIDENT
Robert S. Kapito, VICE PRESIDENT
Kevin Klingert, VICE PRESIDENT
Richard M. Shea, VICE PRESIDENT/TAX
Henry Gabbay, TREASURER
James Kong, ASSISTANT TREASURER
Karen H. Sabath, SECRETARY
INVESTMENT ADVISER
BlackRock Financial Management, Inc.
345 Park Avenue
New York, NY 10154
(800) 227-7BFM
ADMINISTRATOR
Prudential Investments Fund Management LLC
Gateway Center Three
100 Mulberry Street
Newark, NJ 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 CALIFORNIA INVESTMENT
QUALITY MUNICIPAL TRUST INC.
c/o Prudential Investments Fund Management LLC
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
(800) 227-7BFM
[LOGO]Printed on recycled paper 09247U-10-7
09247U-20-6
THE BLACKROCK
CALIFORNIA
INVESTMENT QUALITY
MUNICIPAL TRUST INC.
====================
SEMI-ANNUAL REPORT
APRIL 30, 1998
[GRAPHIC]
