UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM N-CSR

 

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES

 

Investment Company Act file number 811-21126

 

Name of Fund: BlackRock Municipal Income Trust II (BLE)

 

Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809

 

Name and address of agent for service: Anne F. Ackerley, Chief Executive Officer, BlackRock Municipal Income Trust II, 55 East 52nd Street, New York, NY 10055

 

Registrant’s telephone number, including area code: (800) 882-0052, Option 4

 

Date of fiscal year end: 08/31/2010

 

Date of reporting period: 08/31/2010

 

Item 1 – Report to Stockholders

 


 

 

(BLACKROCK LOGO)

August 31, 2010

Annual Report

BlackRock Insured Municipal Income Trust (BYM)

BlackRock Insured Municipal Income Investment Trust (BAF)

BlackRock Municipal Bond Trust (BBK)

BlackRock Municipal Bond Investment Trust (BIE)

BlackRock Municipal Income Trust II (BLE)

BlackRock MuniHoldings Insured Investment Fund (MFL)

BlackRock MuniVest Fund, Inc. (MVF)

 

Not FDIC Insured § No Bank Guarantee § May Lose Value




 


 

Table of Contents


 

 

 




 

 

Page




 

 

 

Dear Shareholder

 

3

Annual Report:

 

 

Trust Summaries

 

4

The Benefits and Risks of Leveraging

 

11

Derivative Financial Instruments

 

11

Financial Statements:

 

 

Schedules of Investments

 

12

Statements of Assets and Liabilities

 

39

Statements of Operations

 

40

Statements of Changes in Net Assets

 

41

Statements of Cash Flows

 

44

Financial Highlights

 

45

Notes to Financial Statements

 

49

Report of Independent Registered Public Accounting Firm

 

56

Important Tax Information

 

56

Disclosure of Investment Advisory Agreements and Sub-Advisory Agreements

 

57

Automatic Dividend Reinvestment Plans

 

61

Officers and Trustees

 

62

Additional Information

 

65


 

 

 

 


2

ANNUAL REPORT

AUGUST 31, 2010

 




 


 

Dear Shareholder

The global economic recovery continues, although global and US economic statistics show that the pace of economic growth has slowed. The sovereign debt crisis in Europe, slowing growth in China and concerns over the possibility that the United States and other developed markets are heading for a double-dip recession have all acted to depress investor sentiment. Despite broadening evidence of a slowdown in global economic activity, market volatility has normalized from the extreme levels seen in recent months. In the United States, economic data continues to be mixed, but it is our view that the preponderance of data suggests that the recovery is continuing. The critical issue for investors remains the question of whether the economy will experience a double-dip recession. We are on the optimistic side of this debate and would point out that while the recovery has been slow, we have made significant progress.

Global equity markets have moved unevenly higher since bottoming out in early 2009 as investors were enticed by depressed valuations, improved corporate earnings, and their desire for higher yields. Several significant downturns, however, have occurred — primarily as a result of mixed economic data and concerns about the possibility of prolonged deflation (especially in Europe). As the period drew to a close, equity markets lost ground on weaker-than-expected economic data, most notably from the United States. International equities posted negative returns on both a six- and 12-month basis while US equities posted negative returns over the six months, but were still showing positive returns on a 12-month basis as the domestic economic recovery had been more pronounced and credit-related issues held European markets down. Within the United States, smaller cap stocks continue to outperform large caps year-to-date.

In fixed income markets, yields have fluctuated significantly over the past year as economic data has been mixed. Risk aversion and credit issues have kept interest rates low and US Treasury yields have fallen significantly as investors favored “safe haven” assets. As the period drew to a close, Treasuries modestly outperformed the spread sectors of the market (those driven by changes in credit risk). Corporate credit spreads benefited from the low rate environment and high yield fixed income remains attractive due to low default rates and better-than-expected results on European bank stress tests. Meanwhile, tax-exempt municipal bonds slightly outperformed US investment grade bonds on a 12-month basis, but underperformed year-to-date as investors rotated to the relative safety of Treasuries.

Regarding cash investments, yields on money market securities remain near all-time lows (producing returns only marginally above zero percent), with the Federal Open Market Committee reiterating that economic circumstances are likely to necessitate an accommodative interest rate stance for an “extended period.”

Against this backdrop, the major market averages posted the following returns:

 

 

 

 

 

 

 

 

Total Returns as of August 31, 2010

 

6-month

 

12-month

 









US large cap equities (S&P 500 Index)

 

(4.04

)%

 

4.91

%

 









US small cap equities (Russell 2000 Index)

 

(3.60

)

 

6.60

 

 









International equities (MSCI Europe, Australasia, Far East Index)

 

(3.04

)

 

(2.34

)

 









3-month Treasury bill (BofA Merrill Lynch 3-Month Treasury Bill Index)

 

0.07

 

 

0.14

 

 









US Treasury securities (BofA Merrill Lynch 10-Year US Treasury Index)

 

11.49

 

 

11.58

 

 









US investment grade bonds (Barclays Capital US Aggregate Bond Index)

 

5.81

 

 

9.18

 

 









Tax-exempt municipal bonds (Barclays Capital Municipal Bond Index)

 

5.42

 

 

9.78

 

 









US high yield bonds (Barclays Capital US Corporate High Yield 2% Issuer Capped Index)

 

6.62

 

 

21.40

 

 










 

 

 

Past performance is no guarantee of future results. Index performance shown for illustrative purposes only. You cannot invest directly in an index.

Although conditions have improved over the past couple of years, investors across the globe continue to face uncertainty about the future direction of economic growth. Through periods of uncertainty, as ever, BlackRock’s full resources are dedicated to the management of our clients’ assets. For additional market perspective and investment insight, visit www.blackrock.com/shareholdermagazine, where you’ll find the most recent issue of our award-winning Shareholder® magazine, as well as its quarterly companion newsletter, Shareholder Perspectives. We thank you for entrusting BlackRock with your investments, and we look forward to your continued partnership in the months and years ahead.

 

Sincerely,

-s- Rob Kapito

Rob Kapito

President, BlackRock Advisors, LLC


 

 

 

 


 

THIS PAGE NOT PART OF YOUR FUND REPORT

3




 

 


 

 

Trust Summary as of August 31, 2010

BlackRock Insured Municipal Income Trust


 


Trust Overview


BlackRock Insured Municipal Income Trust’s (BYM) (the “Trust”) investment objective is to provide current income exempt from federal income taxes, including the alternative minimum tax. The Trust seeks to achieve its investment objective by investing, under normal circumstances, at least 80% of its assets in municipal bonds exempt from federal income taxes, including the alternative minimum tax, and investing, under normal circumstances, at least 80% of its assets in municipal bonds that are covered by insurance guaranteeing the timely payment of principal at maturity and interest when due. The Trust also invests at least 80% of its assets in municipal bonds of the highest investment grade quality at the time of investment. The Trust may invest directly in such securities or synthetically through the use of derivatives. Due to the repeal of the Florida intangible personal property tax, the Board approved an amended policy in September 2008, allowing the Trust the flexibility to invest in municipal obligations regardless of geographical location.

          No assurance can be given that the Trust’s investment objective will be achieved.

 


Performance


For the 12 months ended August 31, 2010, the Trust returned 18.42% based on market price and 14.74% based on net asset value (“NAV”). For the same period, the closed-end Lipper Insured Municipal Debt Funds (Leveraged) category posted an average return of 23.80% based on market price and 15.41% based on NAV. All returns reflect reinvestment of dividends. The Trust’s premium to NAV, which widened during the period, accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV. Given the attractiveness of municipal bonds coupled with low yields on cash equivalents, we maintained a low cash balance and fully invested posture. The Trust benefited from its modestly long duration as interest rates declined. The Trust’s exposure to the longer end of the yield curve contributed to performance as yields generally declined in the 10- to 30-year range during the period. Holdings of insured bonds with lower quality underlying credits also aided results as credit spreads generally tightened over the period. The Trust’s performance was negatively impacted by its exposure to certain lower quality Texas- and California-issued zero-coupon bonds as spreads widened in this sector. Holdings of bonds with shorter maturities and premium coupon bonds with short call dates also detracted as the shorter end of the yield curve underperformed longer-dated issues.

 

 

 

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.


 


Trust Information



 

 

 

Symbol on New York Stock Exchange (“NYSE”)

 

BYM

Initial Offering Date

 

October 31, 2002

Yield on Closing Market Price as of August 31, 2010 ($15.26)1

 

5.82%

Tax Equivalent Yield2

 

8.95%

Current Monthly Distribution per Common Share3

 

$0.074

Current Annualized Distribution per Common Share3

 

$0.888

Leverage as of August 31, 20104

 

36%





 

 

 

 

1

Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results.

 

 

 

 

2

Tax equivalent yield assumes the maximum federal tax rate of 35%.

 

 

 

 

3

A change in the distribution rate was declared on September 1, 2010. The Monthly Distribution per Common Share was increased to $0.077. The Yield on Closing Market Price, Current Monthly Distribution per Common Share and Current Annualized Distribution per Common Share do not reflect the new distribution rate. The new distribution rate is not constant and is subject to change in the future.

 

 

 

 

4

Represents Auction Market Preferred Shares (“Preferred Shares”) and tender option bond trusts (“TOBs”) as a percentage of total managed assets, which is the total assets of the Trust, including any assets attributable to Preferred Shares and TOBs, minus the sum of accrued liabilities. For a discussion of leveraging techniques utilized by the Trust, please see The Benefits and Risks of Leveraging on page 11.

The table below summarizes the changes in the Trust’s market price and NAV per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 













 

 

8/31/10

 

8/31/09

 

Change

 

High

 

Low

 


















Market Price

 

$

15.26

 

$

13.69

 

 

11.47

%

$

15.49

 

$

12.78

 

Net Asset Value

 

$

14.64

 

$

13.55

 

 

8.04

%

$

14.72

 

$

13.54

 


















The following charts show the sector and credit quality allocations of the Trust’s long-term investments:

 

 

 

 

 

 

 

 









Sector Allocations

 

 

 

 

 

 

 









 

 

 

 

 

 

 

 

 

 

8/31/10

 

8/31/09

 









Utilities

 

24

%

 

25

%

 

County/City/Special District/School District

 

21

 

 

19

 

 

Transportation

 

21

 

 

25

 

 

State

 

15

 

 

15

 

 

Health

 

7

 

 

7

 

 

Tobacco

 

6

 

 

6

 

 

Education

 

3

 

 

2

 

 

Corporate

 

2

 

 

 

 

Housing

 

1

 

 

1

 

 









 

 

 

 

 

 

 

 









Credit Quality Allocations5

 

 

 

 

 

 

 









 

 

 

 

 

 

 

 

 

 

8/31/10

 

8/31/09

 









AAA/Aaa

 

57

%

 

56

%

 

AA/Aa

 

24

 

 

19

 

 

A

 

12

 

 

15

 

 

BBB/Baa

 

5

 

 

8

 

 

Not Rated6

 

2

 

 

2

 

 










 

 

 

 

5

Using the higher of Standard & Poor’s (“S&P’s”) or Moody’s Investors Service (“Moody’s”) ratings.

 

 

 

 

6

The investment advisor has deemed certain of these non-rated securities to be of investment grade quality. As of August 31, 2010 and August 31, 2009, the market value of these securities was $10,513,600 representing 2% and $10,859,100 representing 2%, respectively, of the Trust’s long-term investments.


 

 

 

 


4

ANNUAL REPORT

AUGUST 31, 2010

 




 

 


 

 

Trust Summary as of August 31, 2010

BlackRock Insured Municipal Income Investment Trust


 


Trust Overview


BlackRock Insured Municipal Income Investment Trust’s (BAF) (the “Trust”) investment objective is to provide current income exempt from federal income tax, including the alternative minimum tax and Florida intangible property tax.The Trust seeks to achieve its investment objective by investing, under normal circumstances, at least 80% of its assets in municipal bonds exempt from federal income taxes, including the alternative minimum tax, and investing, under normal market conditions, at least 80% of its managed assets in municipal bonds that are covered by insurance guaranteeing the timely payment of principal at maturity and interest when due. The Trust also invests at least 80% of its assets in municipal bonds of the highest investment grade quality at the time of investment. The Trust may invest directly in such securities or synthetically through the use of derivatives. Due to the repeal of the Florida intangible personal property tax, the Board approved an amended policy in September 2008, allowing the Trust the flexibility to invest in municipal obligations regardless of geographical location.

          No assurance can be given that the Trust’s investment objective will be achieved.

 


Performance


For the 12 months ended August 31, 2010, the Trust returned 27.70% based on market price and 13.93% based on NAV. For the same period, the closed-end Lipper Insured Municipal Debt Funds (Leveraged) category posted an average return of 23.80% based on market price and 15.41% based on NAV. All returns reflect reinvestment of dividends. The Trust moved from a discount to NAV to a premium by period end, which accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV. The Trust’s exposure to premium coupon bonds with short call dates detracted from performance as securities on the shorter end of the yield curve underperformed longer-dated issues in the declining interest rate environment. Exposure to zero-coupon bonds also detracted as retail investors shunned them in favor of current coupon bonds. However, the Trust’s holdings of health and utilities bonds with maturities of 20 years and longer contributed positively to performance as each of these sectors outperformed the broader market and bonds with longer maturities benefited from declining yields.

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.

 

 

 




Trust Information

 

 




 

 

 

Symbol on NYSE

 

BAF

Initial Offering Date

 

October 31, 2002

Yield on Closing Market Price as of August 31, 2010 ($15.64)1

 

5.64%

Tax Equivalent Yield2

 

8.68%

Current Monthly Distribution per Common Share3

 

$0.0735

Current Annualized Distribution per Common Share3

 

$0.8820

Leverage as of August 31, 20104

 

36%





 

 

 

 

1

Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results.

 

 

 

 

2

Tax equivalent yield assumes the maximum federal tax rate of 35%.

 

 

 

 

3

The distribution is not constant and is subject to change.

 

 

 

 

4

Represents Preferred Shares and TOBs as a percentage of total managed assets, which is the total assets of the Trust, including any assets attributable to Preferred Shares and TOBs, minus the sum of accrued liabilities. For a discussion of leveraging techniques utilized by the Trust, please see The Benefits and Risks of Leveraging on page 11.

The table below summarizes the changes in the Trust’s market price and NAV per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 













 

 

8/31/10

 

8/31/09

 

Change

 

High

 

Low

 


















Market Price

 

$

15.64

 

$

13.01

 

 

20.22

%

$

15.76

 

$

12.67

 

Net Asset Value

 

$

15.08

 

$

14.06

 

 

7.25

%

$

15.10

 

$

13.99

 


















The following charts show the sector and credit quality allocations of the Trust’s long-term investments:

 

 

 

 

 

 

 

 









Sector Allocations

 

 

 

 

 

 

 









 

 

 

 

 

 

 

 

 

 

8/31/10

 

8/31/09

 









County/City/Special District/School District

 

36

%

 

46

%

 

Utilities

 

27

 

 

27

 

 

Transportation

 

15

 

 

7

 

 

State

 

11

 

 

9

 

 

Health

 

10

 

 

10

 

 

Housing

 

1

 

 

1

 

 









 

 

 

 

 

 

 

 









Credit Quality Allocations5

 

 

 

 

 

 

 









 

 

 

 

 

 

 

 

 

 

8/31/10

 

8/31/09

 









AAA/Aaa

 

59

%

 

44

%

 

AA/Aa

 

25

 

 

29

 

 

A

 

13

 

 

20

 

 

Not Rated6

 

3

 

 

7

 

 










 

 

 

 

5

Using the higher of S&P’s or Moody’s ratings.

 

 

 

 

6

The investment advisor has deemed certain of these non-rated securities to be of investment grade quality. As of August 31, 2010 and August 31, 2009, the market value of these securities was $5,171,100 representing 3% and $7,552,594 representing 4%, respectively, of the Trust’s long-term investments.


 

 

 

 


 

ANNUAL REPORT

AUGUST 31, 2010

5



 

 


 

 

Trust Summary as of August 31, 2010

BlackRock Municipal Bond Trust


 


Trust Overview


BlackRock Municipal Bond Trust’s (BBK) (the “Trust”) investment objective is to provide current income exempt from regular federal income tax. The Trust seeks to achieve its investment objective by investing primarily in municipal bonds exempt from regular federal income taxes (except that the interest may be subject to the federal alternative minimum tax). The Trust invests, under normal market conditions, at least 80% of its assets in municipal bonds that are investment grade quality. The Trust may invest directly in such securities or synthetically through the use of derivatives.

          No assurance can be given that the Trust’s investment objective will be achieved.

 


Performance


For the 12 months ended August 31, 2010, the Trust returned 22.90% based on market price and 24.13% based on NAV. For the same period, the closed-end Lipper General Municipal Debt Funds (Leveraged) category posted an average return of 23.82% based on market price and 18.86% based on NAV. All returns reflect reinvestment of dividends. The Trust’s premium to NAV, which narrowed during the period, accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV. The Trust’s high duration and low cash balance resulted in positive capital appreciation as interest rates declined. Many of the Trust’s holdings began the period with depressed valuations resulting from their underperformance during the periods of dislocations in the credit market, which positioned them for more upward price movement potential as the market continued its recovery. Among these holdings were lower quality bonds, which outperformed as credit spreads tightened, and long-term bonds, which benefited from declining yields. We purchased a number of new issues structured with the goal of creating greater potential for price appreciation in response to declining interest rates. The Trust’s increased exposure to the health and housing sectors also added to performance as these sectors performed well during the period. Conversely, the Trust’s holdings on the shorter end of the yield curve, including premium coupon bonds with short call dates, pre-refunded bonds, and other short maturity issues, detracted from performance as they underperformed longer-dated issues. Exposure to zero-coupon bonds detracted from performance as investors favored current coupon bonds.

 

 

 

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.


 


Trust Information



 

 

 

 

Symbol on NYSE

 

BBK

 

Initial Offering Date

 

April 30, 2002

 

Yield on Closing Market Price as of August 31, 2010 ($15.79)1

 

6.46%

 

Tax Equivalent Yield2

 

9.94%

 

Current Monthly Distribution per Common Share3

 

$0.085

 

Current Annualized Distribution per Common Share3

 

$1.020

 

Leverage as of August 31, 20104

 

35%

 



 

 

 

 

1

Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results.

 

 

 

 

2

Tax equivalent yield assumes the maximum federal tax rate of 35%.

 

 

 

 

3

A change in the distribution rate was declared on September 1, 2010. The Monthly Distribution per Share was increased to $0.086. The Yield on Closing Market Price, Current Monthly Distribution per Share and Current Annualized Distribution per Share do not reflect the new distribution rate. The new distribution rate is not constant and is subject to further change in the future.

 

 

 

 

4

Represents Preferred Shares and TOBs as a percentage of total managed assets, which is the total assets of the Trust, including any assets attributable to Preferred Shares and TOBs, minus the sum of accrued liabilities. For a discussion of leveraging techniques utilized by the Trust, please see The Benefits and Risks of Leveraging on page 11.

The table below summarizes the changes in the Trust’s market price and NAV per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


















 

 

8/31/10

 

8/31/09

 

Change

 

High

 

Low

 













Market Price

 

$

15.79

 

$

13.80

 

 

14.42

%

$

15.83

 

$

13.25

 

Net Asset Value

 

$

15.29

 

$

13.23

 

 

15.57

%

$

15.29

 

$

13.23

 


















The following charts show the sector and credit quality allocations of the Trust’s long-term investments:

 

 

 

 

 

 

 

 

 

 











Sector Allocations

 

 

 

 

 

 

 

 

 











 

 

 

 

 

 

 

 

 

 

 

 

8/31/10

 

8/31/09

 







Health

 

 

23

%

 

 

31

%

 

State

 

 

15

 

 

 

10

 

 

Housing

 

 

14

 

 

 

16

 

 

County/City/Special District/School District

 

 

13

 

 

 

13

 

 

Education

 

 

10

 

 

 

5

 

 

Transportation

 

 

9

 

 

 

7

 

 

Corporate

 

 

8

 

 

 

8

 

 

Utilities

 

 

5

 

 

 

7

 

 

Tobacco

 

 

3

 

 

 

3

 

 











 

 

 

 

 

 

 

 

 

 











Credit Quality Allocations5

 

 

 

 

 

 

 

 

 











 

 

 

 

 

 

 

 

 

 

 

 

8/31/10

 

8/31/09

 







AAA/Aaa

 

 

26

%

 

 

25

%

 

AA/Aa

 

 

20

 

 

 

20

 

 

A

 

 

22

 

 

 

24

 

 

BBB/Baa

 

 

20

 

 

 

17

 

 

BB/Ba

 

 

1

 

 

 

1

 

 

B

 

 

3

 

 

 

4

 

 

CCC/Caa

 

 

1

 

 

 

 

 

Not Rated6

 

 

7

 

 

 

9

 

 












 

 

 

 

5

Using the higher of S&P’s or Moody’s ratings.

 

 

 

 

6

The investment advisor has deemed certain of these non-rated securities to be of investment grade quality. As of August 31, 2010 and August 31, 2009, the market value of these securities was $6,207,616 representing 3% and $4,472,353 representing 2%, respectively, of the Trust’s long-term investments.


 

 

 

 


6

ANNUAL REPORT

AUGUST 31, 2010

 




 

 


 

 

Trust Summary as of August 31, 2010

BlackRock Municipal Bond Investment Trust


 


Trust Overview


BlackRock Municipal Bond Investment Trust’s (BIE) (the “Trust”) investment objective is to provide current income exempt from regular federal income tax and Florida intangible personal property tax. The Trust seeks to achieve its investment objective by investing primarily in municipal bonds exempt from federal income taxes (except that the interest may be subject to the federal alternative minimum tax). Under normal market conditions, the Trust invests at least 80% of its assets in municipal bonds that are investment grade quality at the time of investment. The Trust may invest directly in such securities or synthetically through the use of derivatives. Due to the repeal of the Florida intangible personal property tax, the Board approved an amended policy in September 2008, allowing the Trust the flexibility to invest in municipal obligations regardless of geographical location.

          No assurance can be given that the Trust’s investment objective will be achieved.

 


Performance


For the 12 months ended August 31, 2010, the Trust returned 26.02% based on market price and 16.80% based on NAV. For the same period, the closed-end Lipper General Municipal Debt Funds (Leveraged) category posted an average return of 23.82% based on market price and 18.86% based on NAV. All returns reflect reinvestment of dividends. The Trust moved from a discount to NAV to a premium by period end, which accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV. The Trust’s exposure to premium coupon bonds with short call dates detracted from performance as securities on the shorter end of the yield curve underperformed longer dated issues in the declining interest rate environment. Exposure to zero-coupon bonds also detracted as retail investors shunned them in favor of current coupon bonds. However, the Trust’s holdings of health, transportation and housing bonds with maturities of 20 years and longer contributed positively to performance as each of these sectors outperformed the broader market and bonds with longer maturities benefited from declining yields.

 

 

 

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.


 


Trust Information



 

 

 

 

Symbol on NYSE

 

BIE

 

Initial Offering Date

 

April 30, 2002

 

Yield on Closing Market Price as of August 31, 2010 ($15.60)1

 

6.06%

 

Tax Equivalent Yield2

 

9.32%

 

Current Monthly Distribution per Common Share3

 

$0.0788

 

Current Annualized Distribution per Common Share3

 

$0.9456

 

Leverage as of August 31, 20104

 

40%

 






 

 

 

 

1

Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results.

 

 

 

 

2

Tax equivalent yield assumes the maximum federal tax rate of 35%.

 

 

 

 

3

The distribution is not constant and is subject to change.

 

 

 

 

4

Represents Preferred Shares and TOBs as a percentage of total managed assets, which is the total assets of the Trust, including any assets attributable to Preferred Shares and TOBs, minus the sum of accrued liabilities. For a discussion of leveraging techniques utilized by the Trust, please see The Benefits and Risks of Leveraging on page 11.

The table below summarizes the changes in the Trust’s market price and NAV per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


















 

 

8/31/10

 

8/31/09

 

Change

 

High

 

Low

 


















Market Price

 

$

15.60

 

$

13.20

 

 

18.18

%

$

15.77

 

$

12.65

 

Net Asset Value

 

$

15.51

 

$

14.16

 

 

9.53

%

$

15.51

 

$

14.08

 


















The following charts show the sector and credit quality allocations of the Trust’s long-term investments:

 

 

 

 

 

 

 

 









Sector Allocations

 

 

 

 

 

 

 










 

 

 

 

 

 

 

 

 

 

 

 

8/31/10

 

8/31/09

 







Health

 

 

22

%

 

 

22

%

 

County/City/Special District/School District

 

 

19

 

 

 

20

 

 

Utilities

 

 

18

 

 

 

21

 

 

Transportation

 

 

18

 

 

 

13

 

 

Education

 

 

8

 

 

 

10

 

 

State

 

 

8

 

 

 

8

 

 

Housing

 

 

5

 

 

 

5

 

 

Corporate

 

 

1

 

 

 

1

 

 

Tobacco

 

 

1

 

 

 

 

 











 

 

 

 

 

 

 

 

 

 











Credit Quality Allocations5

 

 

 

 

 

 

 

 

 











 

 

 

 

 

 

 

 

 

 

 

 

8/31/10

 

8/31/09

 







AAA/Aaa

 

 

14

%

 

 

16

%

 

AA/Aa

 

 

64

 

 

 

45

 

 

A

 

 

17

 

 

 

27

 

 

BBB/Baa

 

 

4

 

 

 

3

 

 

BB/Ba

 

 

 

 

 

1

 

 

Not Rated

 

 

1

 

 

 

8

6

 












 

 

 

 

5

Using the higher of S&P’s or Moody’s ratings.

 

 

 

 

6

The investment advisor has deemed certain of these non-rated securities to be of investment grade quality. As of August 31, 2009, the market value of these securities was $2,503,826 representing 3% of the Trust’s long-term investments.


 

 

 

 


 

ANNUAL REPORT

AUGUST 31, 2010

7




 

 



 

 

Trust Summary as of August 31, 2010

BlackRock Municipal Income Trust II


 


Trust Overview


BlackRock Municipal Income Trust II’s (BLE) (the “Trust”) investment objective is to provide current income exempt from regular federal income tax. The Trust seeks to achieve its investment objective by investing primarily in municipal bonds exempt from federal income taxes (except that the interest may be subject to the federal alternative minimum tax). The Trust invests, under normal market conditions, at least 80% of its assets in municipal bonds that are investment grade quality at the time of investment. The Trust may invest directly in such securities or synthetically through the use of derivatives.

          No assurance can be given that the Trust’s investment objective will be achieved.

 


Performance


For the 12 months ended August 31, 2010, the Trust returned 21.42% based on market price and 22.83% based on NAV. For the same period, the closed-end Lipper General Municipal Debt Funds (Leveraged) category posted an average return of 23.82% based on market price and 18.86% based on NAV. All returns reflect reinvestment of dividends. The Trust’s premium to NAV, which narrowed during the period, accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV. The Trust’s high duration and low cash balance resulted in positive capital appreciation during the period. Many of the Trust’s holdings began the period with depressed valuations resulting from their underperform-ance during the periods of dislocations in the credit market, which positioned them for more upward price movement potential as the market continued its recovery. Among these holdings were lower quality bonds, which outperformed as credit spreads tightened, and long-term bonds, which benefited from declining yields. The Trust’s increased exposure to the health and transportation sectors also aided performance as these sectors performed well during the period. Conversely, the Trust’s holdings on the shorter end of the yield curve, including premium coupon bonds with short call dates, pre-refunded bonds, and other short maturity issues, detracted from performance as they underperformed longer-dated issues. Exposure to zero-coupon bonds detracted from performance as retail investors shunned them in favor of current coupon bonds.

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.

 


Trust Information



 

 

 

 

Symbol on NYSE Amex

 

BLE

 

Initial Offering Date

 

July 30, 2002

 

Yield on Closing Market Price as of August 31, 2010 ($15.22)1

 

6.39%

 

Tax Equivalent Yield2

 

9.83%

 

Current Monthly Distribution per Common Share3

 

$0.081

 

Current Annualized Distribution per Common Share3

 

$0.972

 

Leverage as of August 31, 20104

 

36%

 






 

 

 

 

1

Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results.

 

 

 

 

2

Tax equivalent yield assumes the maximum federal tax rate of 35%.

 

 

 

 

3

A change in the distribution rate was declared on September 1, 2010. The Monthly Distribution per Share was increased to $0.082. The Yield on Closing Market Price, Current Monthly Distribution per Share and Current Annualized Distribution per Share do not reflect the new distribution rate. The new distribution rate is not constant and is subject to further change in the future.

 

 

 

 

4

Represents Preferred Shares and TOBs as a percentage of total managed assets, which is the total assets of the Trust, including any assets attributable to Preferred Shares and TOBs, minus the sum of accrued liabilities. For a discussion of leveraging techniques utilized by the Trust, please see The Benefits and Risks of Leveraging on page 11.

The table below summarizes the changes in the Trust’s market price and NAV per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


















 

 

8/31/10

 

8/31/09

 

Change

 

High

 

Low

 













Market Price

 

$

15.22

 

$

13.45

 

 

13.16

%

$

15.22

 

$

12.72

 

Net Asset Value

 

$

14.63

 

$

12.78

 

 

14.48

%

$

14.63

 

$

12.78

 


















The following charts show the sector and credit quality allocations of the Trust’s long-term investments:

 

 

 

 

 

 

 

 

 

 



Sector Allocations

 

 

 

 

 

 

 

 

 











 

 

 

 

 

 

 

 

 

 

 

 

8/31/10

 

8/31/09

 







Health

 

 

19

%

 

 

20

%

 

State

 

 

17

 

 

 

15

 

 

County/City/Special District

 

 

12

 

 

 

8

 

 

Corporate

 

 

11

 

 

 

11

 

 

Transportation

 

 

11

 

 

 

12

 

 

Utilities

 

 

13

 

 

 

12

 

 

Education

 

 

7

 

 

 

10

 

 

Housing

 

 

6

 

 

 

8

 

 

Tobacco

 

 

4

 

 

 

4

 

 











 

 

 

 

 

 

 

 

 

 











Credit Quality Allocations5

 

 

 

 

 

 

 

 

 











 

 

 

 

 

 

 

 

 

 

 

 

8/31/10

 

8/31/09

 







AAA/Aaa

 

 

18

%

 

 

22

%

 

AA/Aa

 

 

21

 

 

 

12

 

 

A

 

 

30

 

 

 

26

 

 

BBB/Baa

 

 

17

 

 

 

23

 

 

BB/Ba

 

 

1

 

 

 

1

 

 

B

 

 

6

 

 

 

6

 

 

CCC/Caa

 

 

1

 

 

 

1

 

 

Not Rated6

 

 

6

 

 

 

9

 

 












 

 

 

 

5

Using the higher of S&P’s or Moody’s ratings.

 

 

 

 

6

The investment advisor has deemed certain of these non-rated securities to be of investment grade quality. As of August 31, 2010 and August 31, 2009, the market value of these securities was $13,839,185 representing 3% and $16,290,531 representing 4%, respectively, of the Trust’s long-term investments.


 

 

 

 


8

ANNUAL REPORT

AUGUST 31, 2010

 




 

 


 

 

Trust Summary as of August 31, 2010

BlackRock MuniHoldings Insured Investment Fund


 


Trust Overview


BlackRock MuniHoldings Insured Investment Fund’s (MFL) (the “Trust”) investment objective is to provide shareholders with current income exempt from federal income tax and to provide shareholders with the opportunity to own shares the value of which is exempt from Florida intangible personal property tax. The Trust seeks to achieve its investment objective by investing primarily in long-term, investment grade municipal obligations exempt from federal income taxes (except that the interest may be subject to the federal alternative minimum tax). Under normal market conditions, the Trust invests at least 80% of its assets in municipal obligations with remaining maturities of one year or more that are covered by insurance guaranteeing the timely payment of principal at maturity and interest at the time of investment. The Trust may invest directly in such securities or synthetically through the use of derivatives. Due to the repeal of the Florida intangible personal property tax, the Board approved an amended policy in September 2008, allowing the Trust the flexibility to invest in municipal obligations regardless of geographical location.

No assurance can be given that the Trust’s investment objective will be achieved.

 


Performance


For the 12 months ended August 31, 2010, the Trust returned 23.46% based on market price and 15.22% based on NAV. For the same period, the closed-end Lipper Insured Municipal Debt Funds (Leveraged) category posted an average return of 23.80% based on market price and 15.41% based on NAV. All returns reflect reinvestment of dividends. The Trust’s discount to NAV, which narrowed during the period, accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV. The Trust’s exposure to premium coupon bonds with short call dates detracted from performance as securities on the shorter end of the yield curve underperformed longer-dated issues in the declining interest rate environment. However, the Trust’s holdings of health, transportation and utility bonds with maturities of 20 years and longer contributed positively to performance as each of these sectors outperformed the broader market and bonds with longer maturities benefited from declining yields.

 

 

 

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.


 

 

 

 



Trust Information

 

 

 



 

 

 

 

Symbol on NYSE

 

MFL

 

Initial Offering Date

 

September 26, 1997

 

Yield on Closing Market Price as of August 31, 2010 ($14.65)1

 

5.98%

 

Tax Equivalent Yield2

 

9.20%

 

Current Monthly Distribution per Common Share3

 

$0.073

 

Current Annualized Distribution per Common Share3

 

$0.876

 

Leverage as of August 31, 20104

 

38%

 






 

 

 

 

1

Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results.

 

 

 

 

2

The equivalent yield assumes the maximum federal tax rate of 35%.

 

 

 

 

3

A change in the distribution rate was declared on September 1, 2010. The Monthly Distribution per Common Share was increased to $0.075. The Yield on Closing Market Price, Current Monthly Distribution per Common Share and Current Annualized Distribution per Common Share do not reflect the new distribution rate. The new distribution rate is not constant and is subject to change in the future.

 

 

 

 

4

Represents Preferred Shares and TOBs as a percentage of total managed assets, which is the total assets of the Trust, including any assets attributable to Preferred Shares and TOBs, minus the sum of accrued liabilities. For a discussion of leveraging techniques utilized by the Trust, please see The Benefits and Risks of Leveraging on page 11.

The table below summarizes the changes in the Trust’s market price and NAV per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


















 

 

8/31/10

 

8/31/09

 

Change

 

High

 

Low

 


















Market Price

 

$

14.65

 

$

12.63

 

 

15.99

%

$

14.76

 

$

12.24

 

Net Asset Value

 

$

14.69

 

$

13.57

 

 

8.25

%

$

14.69

 

$

13.57

 


















The following charts show the sector and credit quality allocations of the Trust’s long-term investments:

 

 

 

 

 

 

 

 

 

 











Sector Allocations

 

 

 

 

 

 

 

 

 











 

 

 

 

 

 

 

 

 

 

 

 

8/31/10

 

8/31/09

 







Transportation

 

 

27

%

 

 

21

%

 

Utilities

 

 

26

 

 

 

32

 

 

County/City/Special District/School District

 

 

18

 

 

 

21

 

 

State

 

 

12

 

 

 

6

 

 

Health

 

 

11

 

 

 

10

 

 

Housing

 

 

4

 

 

 

4

 

 

Education

 

 

2

 

 

 

6

 

 











 

 

 

 

 

 

 

 

 

 











Credit Quality Allocations5

 

 

 

 

 

 

 

 

 











 

 

 

 

 

 

 

 

 

 

 

 

8/31/10

 

8/31/09

 







AAA/Aaa

 

 

64

%

 

 

56

%

 

AA/Aa

 

 

24

 

 

 

16

 

 

A

 

 

11

 

 

 

25

 

 

Not Rated6

 

 

1

 

 

 

3

 

 












 

 

 

 

5

Using the higher of S&P’s or Moody’s ratings.

 

 

 

 

6

The investment advisor has deemed certain of these non-rated securities to be of investment grade quality. As of August 31, 2010 and August 31, 2009, the market value of these securities was $5,793,997 representing 1% and $20,244,144 representing 3%, respectively, of the Trust’s long-term investments.


 

 

 

 


 

ANNUAL REPORT

AUGUST 31, 2010

9




 

 



 

 

Trust Summary as of August 31, 2010

BlackRock MuniVest Fund, Inc.


 


Trust Overview


BlackRock MuniVest Fund, Inc.’s (MVF) (the “Trust”) investment objective is to provide shareholders with as high a level of current income exempt from federal income taxes as is consistent with its investment policies and prudent investment management. The Trust seeks to achieve its investment objective by investing at least 80% of its assets in municipal obligations exempt from federal income taxes (except that the interest may be subject to the federal alternative minimum tax). The Trust invests, under normal market conditions, primarily in long term municipal obligations rated investment grade at the time of investment and invests primarily in long term municipal obligations with maturities of more than ten years at the time of investment. The Trust may invest directly in such securities or synthetically through the use of derivatives.

          No assurance can be given that the Trust’s investment objective will be achieved.

 


Performance


For the 12 months ended August 31, 2010, the Trust returned 24.69% based on market price and 19.31% based on NAV. For the same period, the closed-end Lipper General Municipal Debt Funds (Leveraged) category posted an average return of 23.82% based on market price and 18.86% based on NAV.All returns reflect reinvestment of dividends. The Trust moved from a discount to NAV to a premium by period end, which accounts for the difference between performance based on price and performance based on NAV.The following discussion relates to performance based on NAV.The Trust benefited from its overall high duration (sensitivity to interest rates) as bond prices appreciated as yields declined.The Trust’s bias toward the longer end of the yield curve contributed to performance as falling interest rates had a greater positive effect on longer-dated issues. In addition, exposure to lower quality underlying credits aided performance as credit spreads generally tightened over the period. Conversely, the Trust’s exposure to bonds structured with premium coupons, short calls and/or short maturities detracted from performance as the shorter end of the yield curve underperformed longer-dated issues.

 

 

 

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.


 


Trust Information



 

 

 

 

Symbol on NYSE Amex

 

MVF

 

Initial Offering Date

 

September 29, 1988

 

Yield on Closing Market Price as of August 31, 2010 ($10.38)1

 

6.47%

 

Tax Equivalent Yield2

 

9.95%

 

Current Monthly Distribution per Common Share3

 

$0.056

 

Current Annualized Distribution per Common Share3

 

$0.672

 

Leverage as of August 31, 20104

 

40%

 






 

 

 

 

1

Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results.

 

 

 

 

2

Tax equivalent yield assumes the maximum federal tax rate of 35%.

 

 

 

 

3

A change in the distribution rate was declared on September 1, 2010. The Monthly Distribution per Common Share was increased to $0.057. The Yield on Closing Market Price, Current Monthly Distribution per Common Share and Current Annualized Distribution per Common Share do not reflect the new distribution rate. The new distribution rate is not constant and is subject to change in the future.

 

 

 

 

4

Represents Preferred Shares and TOBs as a percentage of total managed assets, which is the total assets of the Trust, including any assets attributable to Preferred Shares and TOBs, minus the sum of accrued liabilities. For a discussion of leveraging techniques utilized by the Trust, please see The Benefits and Risks of Leveraging on page 11.

 

 

 

The table below summarizes the changes in the Trust’s market price and NAV per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 













 

 

8/31/10

 

8/31/09

 

Change

 

High

 

Low

 













Market Price

 

$

10.38

 

$

8.91

 

 

16.50

%

$

10.68

 

$

8.76

 

Net Asset Value

 

$

10.01

 

$

8.98

 

 

11.47

%

$

10.01

 

$

8.98

 


















The following charts show the sector and credit quality allocations of the Trust’s long-term investments:

 

 

 

 

 

 

 

 

 

 











Sector Allocations

 

 

 

 

 

 

 

 

 











 

 

 

 

 

 

 

 

 

 

 

 

8/31/10

 

8/31/09

 











Health

 

 

22

%

 

 

20

%

 

Corporate

 

 

17

 

 

 

13

 

 

Transportation

 

 

13

 

 

 

11

 

 

Utilities

 

 

12

 

 

 

15

 

 

County/City/Special District/School District

 

 

10

 

 

 

10

 

 

State

 

 

8

 

 

 

15

 

 

Education

 

 

7

 

 

 

6

 

 

Housing

 

 

7

 

 

 

5

 

 

Tobacco

 

 

4

 

 

 

5

 

 











 

 

 

 

 

 

 

 

 

 











Credit Quality Allocations5

 

 

 

 

 

 

 

 

 











 

 

 

 

 

 

 

 

 

 

 

 

8/31/10

 

8/31/09

 







AAA/Aaa

 

 

23

%

 

 

26

%

 

AA/Aa

 

 

35

 

 

 

28

 

 

A

 

 

23

 

 

 

28

 

 

BBB/Baa

 

 

15

 

 

 

15

 

 

B

 

 

1

 

 

 

1

 

 

Not Rated6

 

 

3

 

 

 

2

 

 












 

 

 

 

5

Using the higher of S&P’s or Moody’s ratings.

 

 

 

 

6

The investment advisor has deemed certain of these non-rated securities to be of investment grade quality. As of August 31, 2010 and August 31, 2009, the market value of these securities was $21,938,423 representing 2% and $16,779,679 representing 2%, respectively, of the Trust’s long-term investments.


 

 

 

 


10

ANNUAL REPORT

AUGUST 31, 2010

 




 


 

The Benefits and Risks of Leveraging

The Trusts may utilize leverage to seek to enhance the yield and NAV of their Common Shares. However, these objectives cannot be achieved in all interest rate environments.

To leverage, all the Trusts issue Preferred Shares, which pay dividends at prevailing short-term interest rates, and invest the proceeds in long-term municipal bonds. In general, the concept of leveraging is based on the premise that the financing cost of assets to be obtained from leverage will be based on short-term interest rates, which normally will be lower than the income earned by each Trust on its longer-term portfolio investments. To the extent that the total assets of each Trust (including the assets obtained from leverage) are invested in higher-yielding portfolio investments, each Trust’s Common Shareholders will benefit from the incremental net income.

To illustrate these concepts, assume a Trust’s Common Shares capitalization is $100 million and it issues Preferred Shares for an additional $50 million, creating a total value of $150 million available for investment in long-term municipal bonds. If prevailing short-term interest rates are 3% and long-term interest rates are 6%, the yield curve has a strongly positive slope. In this case, the Trust pays dividends on the $50 million of Preferred Shares based on the lower short-term interest rates. At the same time, the securities purchased by the Trust with assets received from the Preferred Shares issuance earn income based on long-term interest rates. In this case, the dividends paid to Preferred Shareholders are significantly lower than the income earned on the Trust’s long-term investments, and therefore the Common Shareholders are the beneficiaries of the incremental net income.

If short-term interest rates rise, narrowing the differential between short-term and long-term interest rates, the incremental net income pickup on the Common Shares will be reduced or eliminated completely. Furthermore, if prevailing short-term interest rates rise above long-term interest rates of 6%, the yield curve has a negative slope. In this case, the Trust pays dividends on the higher short-term interest rate whereas the Trust’s total portfolio earns income based on lower long-term interest rates.

Furthermore, the value of the Trust’s portfolio investments generally varies inversely with the direction of long-term interest rates, although other factors can influence the value of portfolio investments. In contrast, the redemption value of the Trust’s Preferred Shares do not fluctuate in relation to interest rates. As a result, changes in interest rates can influence the Trust’s NAV positively or negatively in addition to the impact on Trust performance from leverage from Preferred Shares discussed above.

The Trusts may also leverage their assets through the use of tender option bond (“TOB”) programs, as described in Note 1 of the Notes to Financial Statements. TOB investments generally will provide the Trusts with economic benefits in periods of declining short-term interest rates, but expose the Trusts to risks during periods of rising short-term interest rates similar to those associated with Preferred Shares issued by the Trusts, as described above. Additionally, fluctuations in the market value of municipal bonds deposited into the TOB trust may adversely affect each Trust’s NAVs per share.

The use of leverage may enhance opportunities for increased returns to the Trusts and Common Shareholders, but as described above, it also creates risks as short- or long-term interest rates fluctuate. Leverage also will generally cause greater changes in each Trust’s NAV, market price and dividend rate than a comparable portfolio without leverage. If the income derived from securities purchased with assets received from leverage exceeds the cost of leverage, each Trust’s net income will be greater than if leverage had not been used. Conversely, if the income from the securities purchased is not sufficient to cover the cost of leverage, the Trusts’ net income will be less than if leverage had not been used, and therefore the amount available for distribution to Common Shareholders will be reduced. Each Trust may be required to sell portfolio securities at inopportune times or at distressed values in order to comply with regulatory requirements applicable to the use of leverage or as required by the terms of leverage instruments, which may cause a Trust to incur losses. The use of leverage may limit each Trust’s ability to invest in certain types of securities or use certain types of hedging strategies, such as in the case of certain restrictions imposed by ratings agencies that rate preferred shares issued by the Trust. Each Trust will incur expenses in connection with the use of leverage, all of which are borne by the Common Shareholders and may reduce income to the Common Shares.

Under the Investment Company Act of 1940, the Trusts are permitted to issue Preferred Shares in an amount up to 50% of their total managed assets at the time of issuance. Under normal circumstances, each Trust anticipates that the total economic leverage from Preferred Shares and/or TOBs will not exceed 50% of its total managed assets at the time such leverage is incurred. As of August 31, 2010, the Trusts had economic leverage from Preferred Shares and/or TOBs as a percentage of their total managed assets as follows:

 

 

 

 

 






 

 

Percent of
Leverage

 






BYM

 

36

%

 

BAF

 

36

%

 

BBK

 

35

%

 

BIE

 

40

%

 

BLE

 

36

%

 

MFL

 

38

%

 

MVF

 

40

%

 







 


 

Derivative Financial Instruments

The Trusts may invest in various derivative instruments, including financial futures contracts, as specified in Note 2 of the Notes to Financial Statements, which may constitute forms of economic leverage. Such instruments are used to obtain exposure to a market without owning or taking physical custody of securities or to hedge market and/or interest rate risks. Such derivative instruments involve risks, including the imperfect correlation between the value of a derivative instrument and the underlying asset, possible default of the counterparty to the transaction or illiquidity of the derivative instrument. Each Trust’s ability to successfully use a derivative instrument depends on the investment advisor’s ability to accurately predict pertinent market movements, which cannot be assured. The use of derivative instruments may result in losses greater than if they had not been used, may require a Trust to sell or purchase portfolio securities at inopportune times or for distressed values, may limit the amount of appreciation a Trust can realize on an investment, may result in lower distributions paid to shareholders, or may cause the Trusts to hold a security that they might otherwise sell. The Trusts’ investments in these instruments are discussed in detail in the Notes to Financial Statements.

 

 

 

 


 

ANNUAL REPORT

AUGUST 31, 2010

11



 

 


 

 

Schedule of Investments August 31, 2010

BlackRock Insured Municipal Income Trust (BYM)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par  
(000)

 

Value

 









Alabama — 1.0%

 

 

 

 

 

 

 

Birmingham Special Care Facilities Financing Authority,
RB, Children’s Hospital (AGC), 6.00%, 6/01/39

 

$

1,495

 

$

1,673,503

 

County of Jefferson Alabama, RB, Series A, 4.75%,
1/01/25

 

 

2,800

 

 

2,202,172

 

 

 

 

 

 



 

 

 

 

 

 

 

3,875,675

 









Arizona — 0.6%

 

 

 

 

 

 

 

State of Arizona, COP, Department of Administration,
Series A (AGM):

 

 

 

 

 

 

 

5.00%, 10/01/27

 

 

1,500

 

 

1,594,455

 

5.25%, 10/01/28

 

 

650

 

 

697,522

 

 

 

 

 

 



 

 

 

 

 

 

 

2,291,977

 









California — 28.6%

 

 

 

 

 

 

 

Arcadia Unified School District California, GO, CAB,
Election of 2006, Series A (AGM), 4.96%, 8/01/39 (a)

 

 

2,000

 

 

335,520

 

California Health Facilities Financing Authority,
Refunding RB, St. Joseph Health System, Series A,
5.75%, 7/01/39

 

 

625

 

 

669,619

 

California Infrastructure & Economic Development Bank,
RB, Bay Area Toll Bridges, First Lien, Series A (AMBAC),
5.00%, 1/01/28 (b)

 

 

10,100

 

 

12,580,661

 

Coast Community College District California, GO,
Refunding, CAB, Election of 2002, Series C (AGM):

 

 

 

 

 

 

 

5.58%, 8/01/31 (c)

 

 

7,450

 

 

6,525,604

 

5.40%, 8/01/36 (a)

 

 

4,200

 

 

896,154

 

Fresno Unified School District California, GO, Election
of 2001, Series E (AGM), 5.00%, 8/01/30

 

 

1,100

 

 

1,155,044

 

Golden State Tobacco Securitization Corp. California,
RB, Series 2003-A-1 (b):

 

 

 

 

 

 

 

6.63%, 6/01/13

 

 

6,500

 

 

7,563,140

 

6.75%, 6/01/13

 

 

14,500

 

 

16,921,065

 

Los Angeles Municipal Improvement Corp., RB,
Series B1 (NPFGC), 4.75%, 8/01/37

 

 

4,000

 

 

4,002,680

 

Metropolitan Water District of Southern California, RB,
Series B-1 (NPFGC), 5.00%, 10/01/33

 

 

17,500

 

 

18,177,425

 

Monterey Peninsula Community College District, GO,
CAB, Series C (AGM) (a):

 

 

 

 

 

 

 

5.15%, 8/01/31

 

 

13,575

 

 

4,014,670

 

5.16%, 8/01/32

 

 

14,150

 

 

3,848,517

 

Orange County Sanitation District, COP, Series B (AGM),
5.00%, 2/01/31

 

 

2,500

 

 

2,689,975

 

Sacramento Unified School District California, GO,
Election of 2002 (NPFGC), 5.00%, 7/01/30

 

 

2,700

 

 

2,812,617

 

San Francisco City & County Public Utilities Commission,
Refunding RB, Series A (AGM), 5.00%, 11/01/31

 

 

15,000

 

 

15,226,800

 


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par  
(000)

 

Value

 









California (concluded)

 

 

 

 

 

 

 

San Joaquin Hills Transportation Corridor Agency
California, Refunding RB, CAB, Series A (NPFGC),
5.50%, 1/15/31 (a)

 

$

53,000

 

$

10,150,030

 

San Jose Unified School District Santa Clara County
California, GO, Election of 2002, Series B (NPFGC),
5.00%, 8/01/29

 

 

2,350

 

 

2,478,545

 

 

 

 

 

 



 

 

 

 

 

 

 

110,048,066

 









District of Columbia — 2.5%

 

 

 

 

 

 

 

District of Columbia Tobacco Settlement Financing Corp.,
Refunding RB, Asset-Backed, 6.75%, 5/15/40

 

 

9,500

 

 

9,425,235

 









Florida — 12.9%

 

 

 

 

 

 

 

Broward County School Board Florida, COP, Series A
(AGM), 5.25%, 7/01/33

 

 

2,000

 

 

2,110,140

 

City of Tallahassee Florida, RB (NPFGC), 5.00%,
10/01/32

 

 

3,000

 

 

3,145,620

 

County of Broward Florida, RB, Series A, 5.25%,
10/01/34

 

 

950

 

 

1,013,042

 

County of Duval Florida, COP, Master Lease Program
(AGM), 5.00%, 7/01/33

 

 

2,800

 

 

2,871,456

 

County of Miami-Dade Florida, RB:

 

 

 

 

 

 

 

CAB, Sub-Series A (NPFGC), 5.25%, 10/01/38 (a)

 

 

25,520

 

 

4,233,768

 

Jackson Health System (AGC), 5.75%, 6/01/39

 

 

2,300

 

 

2,498,260

 

Water & Sewer System (AGM), 5.00%, 10/01/39

 

 

10,100

 

 

10,690,143

 

County of Miami-Dade Florida, Refunding RB (AGM),
5.00%, 7/01/35

 

 

1,300

 

 

1,334,658

 

Florida Housing Finance Corp., RB, Homeowner
Mortgage, Series 3 (Ginnie Mae), 5.45%, 7/01/33

 

 

4,320

 

 

4,514,616

 

Florida State Department of Environmental Protection,
RB, Series B (NPFGC), 5.00%, 7/01/27

 

 

7,500

 

 

8,080,725

 

Miami-Dade County School Board, COP, Refunding,
Series B (AGC), 5.25%, 5/01/31

 

 

2,385

 

 

2,534,706

 

Orange County School Board, COP, Series A (AGC),
5.50%, 8/01/34

 

 

5,590

 

 

6,108,249

 

Sarasota County Public Hospital District, RB, Sarasota
Memorial Hospital Project, Series A, 5.63%, 7/01/39

 

 

300

 

 

318,291

 

 

 

 

 

 



 

 

 

 

 

 

 

49,453,674

 









Georgia — 0.2%

 

 

 

 

 

 

 

Gwinnett County Hospital Authority, Refunding RB,
Gwinnett Hospital System, Series D (AGM), 5.50%,
7/01/41

 

 

900

 

 

944,199

 










 


Portfolio Abbreviations


To simplify the listings of portfolio holdings in the Schedules of Investments, the names and descriptions of many of the securities have been abbreviated according to the following list:

 

 

ACA

ACA Financial Guaranty Corp.

AGC

Assured Guaranty Corp.

AGM

Assured Guaranty Municipal Corp.

AMBAC

American Municipal Bond Assurance Corp.

AMT

Alternative Minimum Tax (subject to)

ARB

Airport Revenue Bonds

ARS

Auction Rate Securities

BHAC

Berkshire Hathaway Assurance Corp.

CAB

Capital Appreciation Bonds

CIFG

CDC IXIS Financial Guaranty

COP

Certificates of Participation

EDA

Economic Development Authority

EDC

Economic Development Corp.

ERB

Education Revenue Bonds

FHA

Federal Housing Administration

GARB

General Airport Revenue Bonds

GO

General Obligation Bonds

HDA

Housing Development Authority

HFA

Housing Finance Agency

HRB

Housing Revenue Bonds

IDA

Industrial Development Authority

IDB

Industrial Development Board

IDRB

Industrial Development Revenue Bonds

ISD

Independent School District

MRB

Mortgage Revenue Bonds

NPFGC

National Public Finance Guarantee Corp.

PILOT

Payment in Lieu of Taxes

PSF-GTD

Permanent School Fund Guaranteed

RB

Revenue Bonds

SBPA

Stand-by Bond Purchase Agreement

S/F

Single Family

VRDN

Variable Rate Demand Notes


 

 

 

 

See Notes to Financial Statements.

 

 


12

ANNUAL REPORT

AUGUST 31, 2010

 




 

 


 

 

Schedule of Investments (continued)

BlackRock Insured Municipal Income Trust (BYM)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par  
(000)

 

Value

 









Illinois — 4.9%

 

 

 

 

 

 

 

Chicago Board of Education Illinois, GO, Refunding,
Chicago School Reform Board, Series A (NPFGC),
5.50%, 12/01/26

 

$

2,500

 

$

2,950,825

 

City of Chicago Illinois, RB, Series A (AGC), 5.00%,
1/01/38

 

 

7,310

 

 

7,609,856

 

County of Cook Illinois, GO, Refunding, Series A, 5.25%,
11/15/33

 

 

1,475

 

 

1,597,278

 

Illinois Municipal Electric Agency, RB, Series A (NPFGC),
5.25%, 2/01/27

 

 

4,800

 

 

5,144,880

 

State of Illinois, RB, Build Illinois, Series B, 5.25%,
6/15/34

 

 

1,400

 

 

1,480,640

 

 

 

 

 

 



 

 

 

 

 

 

 

18,783,479

 









Indiana — 0.7%

 

 

 

 

 

 

 

Indiana Municipal Power Agency, RB:

 

 

 

 

 

 

 

Series A (NPFGC), 5.00%, 1/01/37

 

 

2,050

 

 

2,113,796

 

Series B, 5.75%, 1/01/34

 

 

450

 

 

490,599

 

 

 

 

 

 



 

 

 

 

 

 

 

2,604,395

 









Iowa — 1.4%

 

 

 

 

 

 

 

Iowa Finance Authority, RB, Series A (AGC), 5.63%,
8/15/37

 

 

5,000

 

 

5,511,450

 









Kentucky — 0.4%

 

 

 

 

 

 

 

Kentucky State Property & Buildings Commission,
Refunding RB, Project No. 93 (AGC), 5.25%, 2/01/29

 

 

1,500

 

 

1,680,600

 









Louisiana — 2.1%

 

 

 

 

 

 

 

State of Louisiana, RB, Series A (AGM), 5.00%, 5/01/31

 

 

7,500

 

 

8,005,800

 









Michigan — 2.7%

 

 

 

 

 

 

 

City of Detroit Michigan, RB:

 

 

 

 

 

 

 

Senior Lien, Series A (NPFGC), 5.00%, 7/01/30

 

 

1,000

 

 

1,001,310

 

Senior Lien, Series A (NPFGC), 5.00%, 7/01/34

 

 

2,660

 

 

2,669,576

 

System, Second Lien, Series A (BHAC), 5.50%,
7/01/36

 

 

2,900

 

 

3,071,796

 

System, Second Lien, Series B (NPFGC), 5.00%,
7/01/36

 

 

400

 

 

402,992

 

City of Detroit Michigan, Refunding RB, Second Lien,
Series E (BHAC), 5.75%, 7/01/31

 

 

3,000

 

 

3,282,330

 

 

 

 

 

 



 

 

 

 

 

 

 

10,428,004

 









Nevada — 6.7%

 

 

 

 

 

 

 

County of Clark Nevada, RB:

 

 

 

 

 

 

 

Las Vegas-McCarran International Airport, Series A
(AGC), 5.25%, 7/01/39

 

 

4,100

 

 

4,298,522

 

Subordinate Lien, Series A2 (BHAC), 5.00%,
7/01/30

 

 

2,500

 

 

2,596,900

 

System, Subordinate Lien, Series C (AGM), 5.00%,
7/01/26

 

 

1,650

 

 

1,781,884

 

Truckee Meadows Water Authority, RB, Series A (AGM) (b):

 

 

 

 

 

 

 

5.00%, 7/01/11

 

 

10,000

 

 

10,397,700

 

5.13%, 7/01/11

 

 

6,500

 

 

6,765,265

 

 

 

 

 

 



 

 

 

 

 

 

 

25,840,271

 









New York — 0.4%

 

 

 

 

 

 

 

New York State Dormitory Authority, ERB, Series B,
5.75%, 3/15/36

 

 

1,300

 

 

1,506,986

 









Ohio — 0.3%

 

 

 

 

 

 

 

Ohio Higher Educational Facility Commission,
Refunding RB, Summa Health System, 2010 Project
(AGC), 5.25%, 11/15/40

 

 

1,125

 

 

1,164,094

 









Pennsylvania — 1.4%

 

 

 

 

 

 

 

City of Philadelphia Pennsylvania, RB, Third Series
(AGM), 5.13%, 8/01/11 (b)

 

 

5,200

 

 

5,424,692

 









Puerto Rico — 1.6%

 

 

 

 

 

 

 

Puerto Rico Sales Tax Financing Corp., RB, First
Sub-Series A, 6.38%, 8/01/39

 

 

5,300

 

 

5,964,991

 










 

 

 

 

 

 

 

 

Municipal Bonds

 

Par  
(000)

 

Value

 









Rhode Island — 0.8%

 

 

 

 

 

 

 

Rhode Island Health & Educational Building Corp.,
Refunding RB, Public Schools Financing Program,
Series E (AGC), 6.00%, 5/15/29

 

$

2,625

 

$

2,991,004

 









South Carolina — 2.7%

 

 

 

 

 

 

 

South Carolina Transportation Infrastructure Bank, RB,
Junior Lien, Series B (AMBAC), 5.13%, 10/01/11 (b)

 

 

10,000

 

 

10,513,600

 









Tennessee — 5.5%

 

 

 

 

 

 

 

Knox County Health Educational & Housing Facilities
Board Tennessee, Refunding RB (AGM), Series A (a):

 

 

 

 

 

 

 

CAB, 5.84%, 1/01/22

 

 

11,705

 

 

6,385,897

 

CAB, 5.88%, 1/01/23

 

 

9,260

 

 

4,736,768

 

CAB, 5.90%, 1/01/24

 

 

8,500

 

 

4,083,230

 

CAB, 5.91%, 1/01/25

 

 

6,850

 

 

3,094,761

 

CAB, 5.93%, 1/01/26

 

 

5,000

 

 

2,116,550

 

Covenant, 4.79%, 1/01/41

 

 

3,000

 

 

608,730

 

 

 

 

 

 



 

 

 

 

 

 

 

21,025,936

 









Texas — 27.6%

 

 

 

 

 

 

 

City of Houston Texas, RB, Senior Lien, Series A, 5.50%,
7/01/34

 

 

4,165

 

 

4,575,461

 

City of San Antonio Texas, Refunding RB (NPFGC):

 

 

 

 

 

 

 

5.13%, 5/15/29

 

 

9,250

 

 

10,102,850

 

5.13%, 5/15/34

 

 

10,000

 

 

10,843,300

 

Coppell ISD Texas, GO, Refunding, CAB (PSF-GTD),
5.64%, 8/15/30 (a)

 

 

10,030

 

 

4,488,626

 

County of Harris Texas, GO (NPFGC) (a):

 

 

 

 

 

 

 

5.56%, 8/15/25

 

 

7,485

 

 

4,467,946

 

5.59%, 8/15/28

 

 

10,915

 

 

5,542,637

 

County of Harris Texas, Refunding RB, Senior Lien,
Toll Road (AGM), 5.00%, 8/15/30

 

 

5,510

 

 

5,819,552

 

Harris County-Houston Sports Authority, Refunding RB
(NPFGC) (a):

 

 

 

 

 

 

 

CAB, Junior Lien, Series H, 5.92%, 11/15/38

 

 

5,785

 

 

650,234

 

CAB, Junior Lien, Series H, 5.94%, 11/15/39

 

 

6,160

 

 

636,328

 

Third Lien, Series A-3, 5.97%, 11/15/38

 

 

26,890

 

 

3,022,436

 

Third Lien, Series A-3, 5.98%, 11/15/39

 

 

27,675

 

 

2,789,640

 

Lewisville ISD Texas, GO, Refunding, CAB, School
Building (NPFGC), 4.67%, 8/15/24 (a)

 

 

5,315

 

 

2,861,118

 

Mansfield ISD Texas, GO, School Building (PSF-GTD),
5.00%, 2/15/33

 

 

2,980

 

 

3,214,794

 

North Texas Tollway Authority, Refunding RB, First Tier:

 

 

 

 

 

 

 

CAB, System (AGC), 5.33%, 1/01/29 (a)

 

 

5,000

 

 

1,975,450

 

CAB, System (AGC), 5.45%, 1/01/30 (a)

 

 

955

 

 

352,643

 

Series A, 6.00%, 1/01/28

 

 

625

 

 

705,250

 

System (NPFGC), 5.75%, 1/01/40

 

 

23,050

 

 

24,476,334

 

Texas State Turnpike Authority, RB, First Tier, Series A
(AMBAC), 5.00%, 8/15/42

 

 

20,000

 

 

19,791,600

 

 

 

 

 

 



 

 

 

 

 

 

 

106,316,199

 









Washington — 6.4%

 

 

 

 

 

 

 

Chelan County Public Utility District No. 1, RB, Chelan
Hydro System, Series C (AMBAC), 5.13%, 7/01/33

 

 

3,655

 

 

3,728,100

 

County of King Washington, Refunding RB (AGM),
5.00%, 1/01/36

 

 

2,200

 

 

2,317,568

 

Port of Seattle Washington, RB, Series A (NPFGC),
5.00%, 4/01/31

 

 

4,500

 

 

4,542,795

 

State of Washington, GO, Various Purpose, Series 02-A
(AGM), 5.00%, 7/01/25

 

 

5,000

 

 

5,170,200

 

Washington Health Care Facilities Authority, RB:

 

 

 

 

 

 

 

MultiCare Health Care, Series C (AGC), 5.50%,
8/15/43

 

 

6,600

 

 

6,964,848

 

Providence Health & Services, Series A, 5.00%,
10/01/39

 

 

1,000

 

 

1,038,540

 

Providence Health & Services, Series A, 5.25%,
10/01/39

 

 

675

 

 

714,028

 

 

 

 

 

 



 

 

 

 

 

 

 

24,476,079

 










 

 

 

 

See Notes to Financial Statements.

 

 


 

ANNUAL REPORT

AUGUST 31, 2010

13




 

 


 

 

Schedule of Investments (continued)

BlackRock Insured Municipal Income Trust (BYM)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par  
(000)

 

Value

 









Wisconsin — 0.4%

 

 

 

 

 

 

 

Wisconsin Health & Educational Facilities Authority, RB,
Ascension Health Senior Credit Group, 5.00%,
11/15/33

 

$

1,500

 

$

1,558,320

 









Total Municipal Bonds — 111.8%

 

 

 

 

 

429,834,726

 









 

 

 

 

 

 

 

 


 

 

 

 

 

 

 

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (d)

 

 

 

 

 

 

 









Arizona — 0.4%

 

 

 

 

 

 

 

Phoenix Civic Improvement Corp., RB, Junior Lien,
Series A, 5.00%, 7/01/34

 

 

1,300

 

 

1,407,939

 









California — 10.6%

 

 

 

 

 

 

 

California State University, RB, Systemwide, Series A
(AGM), 5.00%, 11/01/33

 

 

3,379

 

 

3,549,390

 

California State University, Refunding RB, Systemwide,
Series A (AGM), 5.00%, 11/01/32

 

 

8,000

 

 

8,382,560

 

Foothill-De Anza Community College District, GO,
Election of 1999, Series C (NPFGC), 5.00%, 8/01/36

 

 

7,500

 

 

7,770,525

 

Los Angeles Community College District California, GO,
Election of 2001, Series A (AGM), 5.00%, 8/01/32

 

 

5,000

 

 

5,296,250

 

San Diego Community College District California, GO,
Election of 2002, 5.25%, 8/01/33

 

 

449

 

 

491,913

 

San Diego County Water Authority, COP, Refunding,
Series 2008-A (AGM), 5.00%, 5/01/33

 

 

4,870

 

 

5,181,924

 

University of California, RB, Series C (NPFGC), 4.75%,
5/15/37

 

 

10,000

 

 

10,152,000

 

 

 

 

 

 



 

 

 

 

 

 

 

40,824,562

 









District of Columbia — 0.3%

 

 

 

 

 

 

 

District of Columbia, RB, Series A, 5.50%, 12/01/30

 

 

1,080

 

 

1,264,259

 









Florida — 3.8%

 

 

 

 

 

 

 

City of Tallahassee Florida, RB (NPFGC), 5.00%,
10/01/37

 

 

5,000

 

 

5,189,950

 

Florida State Board of Education, GO, Series D, 5.00%,
6/01/37

 

 

2,999

 

 

3,220,665

 

Orange County School Board, COP, Series A (NPFGC),
5.00%, 8/01/30

 

 

6,000

 

 

6,255,360

 

 

 

 

 

 



 

 

 

 

 

 

 

14,665,975

 









Hawaii — 2.7%

 

 

 

 

 

 

 

Honolulu City & County Board of Water Supply, RB,
Series A (NPFGC), 5.00%, 7/01/33

 

 

10,000

 

 

10,373,200

 









Illinois — 7.7%

 

 

 

 

 

 

 

Illinois State Toll Highway Authority, RB, Series B, 5.50%,
1/01/33

 

 

4,499

 

 

5,011,994

 

Metropolitan Pier & Exposition Authority, RB, McCormick
Place Expansion Project, Series A (NPFGC), 5.00%,
12/15/28

 

 

24,010

 

 

24,648,906

 

 

 

 

 

 



 

 

 

 

 

 

 

29,660,900

 









Massachusetts — 3.7%

 

 

 

 

 

 

 

Massachusetts School Building Authority, RB, Series A
(AGM), 5.00%, 8/15/30

 

 

12,987

 

 

14,051,391

 









Nevada — 1.8%

 

 

 

 

 

 

 

City of Las Vegas Nevada, GO, Limited Tax, Performing
Arts Center, 6.00%, 4/01/39

 

 

4,197

 

 

4,727,671

 

Clark County Water Reclamation District, GO, Series B,
5.75%, 7/01/34

 

 

2,024

 

 

2,313,216

 

 

 

 

 

 



 

 

 

 

 

 

 

7,040,887

 










 

 

 

 

 

 

 

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (d)

 

Par  
(000)

 

Value

 









New York — 4.5%

 

 

 

 

 

 

 

Erie County Industrial Development Agency, RB, City
School District of Buffalo Project, Series A (AGM),
5.75%, 5/01/28

 

$

4,494

 

$

5,048,871

 

Metropolitan Transportation Authority, RB, Series A
(NPFGC), 5.00%, 11/15/31

 

 

7,002

 

 

7,466,053

 

Triborough Bridge & Tunnel Authority, RB, General,
Series A-2, 5.25%, 11/15/34

 

 

4,500

 

 

4,956,030

 

 

 

 

 

 



 

 

 

 

 

 

 

17,470,954

 









Ohio — 0.2%

 

 

 

 

 

 

 

State of Ohio, RB, Cleveland Clinic Health, Series B,
5.50%, 1/01/34

 

 

620

 

 

674,777

 









South Carolina — 0.2%

 

 

 

 

 

 

 

South Carolina State Public Service Authority, RB,
Santee Cooper, Series A, 5.50%, 1/01/38

 

 

600

 

 

669,972

 









Texas — 2.7%

 

 

 

 

 

 

 

Northside ISD Texas, GO, School Building (PSF-GTD),
5.13%, 6/15/29

 

 

9,500

 

 

10,447,005

 









Utah — 1.4%

 

 

 

 

 

 

 

Utah Transit Authority, RB, Series A (AGM), 5.00%,
6/15/36

 

 

5,000

 

 

5,397,450

 









Virginia — 0.1%

 

 

 

 

 

 

 

Fairfax County IDA Virginia, Refunding RB, Health Care,
Inova Health System, Series A, 5.50%, 5/15/35

 

 

400

 

 

437,280

 









Washington — 1.0%

 

 

 

 

 

 

 

Central Puget Sound Regional Transit Authority, RB,
Series A (AGM), 5.00%, 11/01/32

 

 

3,494

 

 

3,777,846

 









Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 41.1%

 

 

 

 

 

158,164,397

 









Total Long-Term Investments
(Cost — $568,697,435) — 152.9%

 

 

 

 

 

587,999,123

 









 

 

 

 

 

 

 

 









 

 

 

 

 

 

 

 

Short-Term Securities

 

 

 

 

 

 

 









New York — 0.4%

 

 

 

 

 

 

 

City of New York New York, GO, VRDN, Sub-Series A-6
(AGM Insurance, Dexia Credit Local SBPA), 0.28%,
9/01/10 (e)

 

 

1,700

 

 

1,700,000

 









 

 

 

 

 

 

 

 

 

 

 

 

Shares

 

 

 

 









Money Market Fund — 2.5%

 

 

 

 

 

 

 

FFI Institutional Tax-Exempt Fund, 0.22% (f)(g)

 

 

9,416,737

 

 

9,416,737

 









Total Short-Term Securities
(Cost — $11,116,737) — 2.9%

 

 

 

 

 

11,116,737

 









Total Investments (Cost — $579,814,172*) — 155.8%

 

 

 

 

 

599,115,860

 

Other Assets Less Liabilities — 1.0%

 

 

 

 

 

3,666,478

 

Liability for Trust Certificates, Including Interest
Expense and Fees Payable — (21.1)%

 

 

 

 

 

(80,964,933

)

Preferred Shares, at Redemption Value — (35.7)%

 

 

 

 

 

(137,254,585

)

 

 

 

 

 



 

Net Assets Applicable to Common Shares — 100.0%

 

 

 

 

$

384,562,820

 

 

 

 

 

 



 


 

 

 

 

See Notes to Financial Statements.

 

 


14

ANNUAL REPORT

AUGUST 31, 2010

 




 

 


 

 

Schedule of Investments (concluded)

BlackRock Insured Municipal Income Trust (BYM)


 

 

*

The cost and unrealized appreciation (depreciation) of investments as of August 31, 2010, as computed for federal income tax purposes, were as follows:


 

 

 

 

 

Aggregate cost

 

$

499,166,652

 

 

 



 

Gross unrealized appreciation

 

$

36,401,492

 

Gross unrealized depreciation

 

 

(17,366,796

)

 

 



 

Net unrealized appreciation

 

$

19,034,696

 

 

 



 


 

 

(a)

Represents a zero-coupon bond. Rate shown reflects the current yield as of report date.

 

 

(b)

US government securities, held in escrow, are used to pay interest on this security as well as to retire the bond in full at the date indicated, typically at a premium to par.

 

 

(c)

Represents a step-up bond that pays an initial coupon rate for the first period and then a higher coupon rate for the following periods. Rate shown reflects the current yield as of report date.

 

 

(d)

Securities represent bonds transferred to a tender option bond trust in exchange for which the Trust acquired residual interest certificates. These securities serve as collateral in a financing transaction. See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to tender option bond trusts.

 

 

(e)

Variable rate security. Rate shown is as of report date and maturity shown is the date the principal owed can be recovered through demand.

 

 

(f)

Investments in companies considered to be an affiliate of the Trust during the year, for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:


 

 

 

 

 

 

 

 

 

 

 

 

 

 















Affiliate

 

Shares Held at
August 31,
2009

 

Net
Activity

 

Shares Held at
August 31,
2010

 

Income

 











FFI Institutional
Tax-Exempt Fund

 

 

4,401,744

 

 

5,014,993

 

 

9,416,737

 

 

$7,910

 
















 

 

(g)

Represents the current yield as of report date.


 

 

 

Fair Value Measurements — Various inputs are used in determining the fair value of investments, which are as follows:

 

 

 

Level 1 — price quotations in active markets/exchanges for identical assets and liabilities

 

 

 

 

Level 2 — other observable inputs (including, but not limited to: quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs)

 

 

 

 

Level 3 — unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the Trust’s own assumptions used in determining the fair value of investments)

 

 

 

 

The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. For information about the Trust’s policy regarding valuation of investments and other significant accounting policies, please refer to Note 1 of the Notes to Financial Statements.

The following table summarizes the inputs used as of August 31, 2010 in determining the fair valuation of the Trust’s investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 















Valuation Inputs

 

Level 1

 

Level 2

 

Level 3

 

Total

 











Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments in Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-Term Investments1

 

 

 

$

587,999,123

 

 

 

$

587,999,123

 

Short-Term Securities

 

$

9,416,737

 

 

1,700,000

 

 

 

 

11,116,737

 

 

 













Total

 

$

9,416,737

 

$

589,699,123

 

 

 

$

599,115,860

 

 

 














 

 

1

See above Schedule of Investments for values in each state or political subdivision.


 

 

 

 

See Notes to Financial Statements.

 

 


 

ANNUAL REPORT

AUGUST 31, 2010

15



 

 


 

 

Schedule of Investments August 31, 2010

BlackRock Insured Municipal Income Investment Trust (BAF)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par  
(000)

 

Value

 









Alabama — 1.7%

 

 

 

 

 

 

 

Birmingham Special Care Facilities Financing Authority,
RB, Children’s Hospital (AGC):

 

 

 

 

 

 

 

6.13%, 6/01/34

 

$

1,000

 

$

1,121,760

 

6.00%, 6/01/39

 

 

1,000

 

 

1,119,400

 

 

 

 

 

 



 

 

 

 

 

 

 

2,241,160

 









Arizona — 0.5%

 

 

 

 

 

 

 

State of Arizona, COP, Department of Administration,
Series A (AGM):

 

 

 

 

 

 

 

5.25%, 10/01/28

 

 

465

 

 

498,996

 

5.00%, 10/01/29

 

 

125

 

 

130,848

 

 

 

 

 

 



 

 

 

 

 

 

 

629,844

 









California — 11.6%

 

 

 

 

 

 

 

California State Public Works Board, RB, Various Capital
Projects, Series G-1 (AGC), 5.25%, 10/01/24

 

 

2,000

 

 

2,147,780

 

County of Sacramento California, RB, Senior Series A
(AGC), 5.50%, 7/01/41

 

 

1,400

 

 

1,506,778

 

Los Angeles Community College District California, GO,
Election of 2001, Series A (NPFGC), 5.00%, 8/01/32

 

 

1,000

 

 

1,058,010

 

Los Angeles Municipal Improvement Corp., Refunding RB,
Real Property, Series B (AGC), 5.50%, 4/01/39

 

 

3,810

 

 

4,112,400

 

Oxnard Union High School District, GO, Refunding,
Election of 2004, Series A (AGM), 5.00%, 8/01/40

 

 

1,000

 

 

1,046,940

 

San Diego Public Facilities Financing Authority,
Refunding RB, Series B (AGC), 5.38%, 8/01/34

 

 

1,125

 

 

1,237,365

 

San Jacinto Unified School District, GO, Election of 2006
(AGM), 5.25%, 8/01/32

 

 

1,000

 

 

1,049,570

 

State of California, GO, Various Purpose (AGM), 5.00%,
6/01/32

 

 

3,000

 

 

3,095,100

 

 

 

 

 

 



 

 

 

 

 

 

 

15,253,943

 









Colorado — 1.2%

 

 

 

 

 

 

 

Colorado Health Facilities Authority, RB, Hospital,
NCMC Inc. Project, Series B (AGM), 6.00%, 5/15/26

 

 

1,425

 

 

1,647,428

 









Florida — 14.8%

 

 

 

 

 

 

 

City of Miami Florida, RB (NPFGC), 5.25%, 1/01/28

 

 

5,035

 

 

5,434,628

 

City of Sunrise Florida, Refunding RB (AMBAC), 5.00%,
10/01/28

 

 

5,000

 

 

5,171,100

 

Village Center Community Development District, RB,
Series A (NPFGC), 5.00%, 11/01/32

 

 

10,000

 

 

8,891,900

 

 

 

 

 

 



 

 

 

 

 

 

 

19,497,628

 









Georgia — 3.3%

 

 

 

 

 

 

 

Georgia Higher Education Facilities Authority, RB, USG
Real Estate III, Series A (AGC), 5.00%, 6/15/38

 

 

850

 

 

883,975

 

Gwinnett County Hospital Authority, Refunding RB,
Gwinnett Hospital System, Series D (AGM), 5.50%,
7/01/41

 

 

1,350

 

 

1,416,298

 

Metropolitan Atlanta Rapid Transit Authority, RB, Third
Indenture, Series B (AGM), 5.00%, 7/01/34

 

 

1,890

 

 

2,024,095

 

 

 

 

 

 



 

 

 

 

 

 

 

4,324,368

 









Illinois — 12.8%

 

 

 

 

 

 

 

Chicago Board of Education Illinois, GO, Refunding,
Chicago School Reform Board, Series A (NPFGC),
5.50%, 12/01/26

 

 

900

 

 

1,062,297

 

Chicago Transit Authority, RB, Federal Transit
Administration Section 5309, Series A (AGC),
6.00%, 6/01/26

 

 

1,300

 

 

1,544,387

 

City of Chicago Illinois, GO, Refunding, Projects,
Series A (AGM):

 

 

 

 

 

 

 

5.00%, 1/01/28

 

 

920

 

 

1,007,538

 

5.00%, 1/01/29

 

 

1,425

 

 

1,546,567

 

5.00%, 1/01/30

 

 

570

 

 

614,927

 


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par  
(000)

 

Value

 









Illinois (concluded)

 

 

 

 

 

 

 

City of Chicago Illinois, General, Third Lien RB:

 

 

 

 

 

 

 

Airport, Series A (NPFGC), 5.00%, 1/01/33

 

$

1,000

 

$

1,013,470

 

Series C (AGM), 5.25%, 1/01/30

 

 

1,000

 

 

1,074,730

 

Series C (AGM), 5.25%, 1/01/35

 

 

820

 

 

870,250

 

City of Chicago Illinois, Refunding RB, Second Lien
(NPFGC), 5.50%, 1/01/30

 

 

1,000

 

 

1,153,140

 

Illinois Municipal Electric Agency, RB, Series A (NPFGC):

 

 

 

 

 

 

 

5.25%, 2/01/28

 

 

1,560

 

 

1,670,261

 

5.25%, 2/01/35

 

 

1,250

 

 

1,305,950

 

State of Illinois, RB:

 

 

 

 

 

 

 

(AGM), 5.00%, 6/15/27

 

 

1,000

 

 

1,045,790

 

Build Illinois, Series B, 5.25%, 6/15/28

 

 

1,750

 

 

1,916,075

 

Village of Schaumburg Illinois, GO, Series B (NPFGC),
5.00%, 12/01/38

 

 

1,000

 

 

1,028,430

 

 

 

 

 

 



 

 

 

 

 

 

 

16,853,812

 









Indiana — 2.0%

 

 

 

 

 

 

 

Indianapolis Local Public Improvement Bond Bank,
Refunding RB, Waterworks Project, Series A (AGC),
5.50%, 1/01/38

 

 

2,415

 

 

2,689,344

 









Iowa — 0.9%

 

 

 

 

 

 

 

Iowa Finance Authority, Refunding RB, Iowa Health
System (AGC), 5.25%, 2/15/29

 

 

1,125

 

 

1,229,243

 









Kentucky — 0.8%

 

 

 

 

 

 

 

Kentucky Municipal Power Agency, RB, Prairie State
Project, Series A (BHAC), 5.25%, 9/01/42

 

 

1,000

 

 

1,056,280

 









Louisiana — 2.6%

 

 

 

 

 

 

 

Louisiana State Citizens Property Insurance Corp., RB,
Series C-3 (AGC), 6.13%, 6/01/25

 

 

2,510

 

 

2,876,460

 

New Orleans Aviation Board Louisiana, Refunding RB
(AGC), Restructuring GARB:

 

 

 

 

 

 

 

Series A-1, 6.00%, 1/01/23

 

 

375

 

 

441,641

 

Series A-2, 6.00%, 1/01/23

 

 

150

 

 

176,657

 

 

 

 

 

 



 

 

 

 

 

 

 

3,494,758

 









Maine — 0.9%

 

 

 

 

 

 

 

City of Portland Maine, RB, General (AGM), 5.25%,
1/01/35

 

 

1,095

 

 

1,165,551

 









Michigan — 15.9%

 

 

 

 

 

 

 

City of Detroit Michigan, RB:

 

 

 

 

 

 

 

Second Lien, Series B (AGM), 6.25%, 7/01/36

 

 

1,700

 

 

1,901,603

 

Second Lien, Series B (AGM), 7.00%, 7/01/36

 

 

200

 

 

235,618

 

Second Lien, Series B (NPFGC), 5.50%, 7/01/29

 

 

1,790

 

 

1,901,571

 

Senior Lien, Series B (AGM), 7.50%, 7/01/33

 

 

1,500

 

 

1,840,260

 

Senior Lien, Series B (BHAC), 5.50%, 7/01/35

 

 

4,750

 

 

5,073,285

 

System, Second Lien, Series A (BHAC), 5.50%,
7/01/36

 

 

2,330

 

 

2,468,029

 

City of Detroit Michigan, Refunding RB:

 

 

 

 

 

 

 

Second Lien, Series E (BHAC), 5.75%, 7/01/31

 

 

2,300

 

 

2,516,453

 

Senior Lien, Series C-1 (AGM), 7.00%, 7/01/27

 

 

1,800

 

 

2,155,374

 

Michigan State Building Authority, RB, Facilities Program,
Series H (AGM), 5.00%, 10/15/26

 

 

365

 

 

396,722

 

Michigan State Building Authority, Refunding RB,
Facilities Program, Series I (AGC):

 

 

 

 

 

 

 

5.25%, 10/15/24

 

 

565

 

 

634,766

 

5.25%, 10/15/25

 

 

300

 

 

333,747

 

Royal Oak Hospital Finance Authority Michigan,
Refunding RB, William Beaumont Hospital, 8.25%,
9/01/39

 

 

1,205

 

 

1,462,412

 

 

 

 

 

 



 

 

 

 

 

 

 

20,919,840

 









Minnesota — 5.0%

 

 

 

 

 

 

 

City of Minneapolis Minnesota, Refunding RB, Fairview
Health Services, Series B (AGC), 6.50%, 11/15/38

 

 

5,680

 

 

6,535,862

 










 

 

 

 

See Notes to Financial Statements.

 





16

ANNUAL REPORT

AUGUST 31, 2010

 




 

 


 

 

Schedule of Investments (continued)

BlackRock Insured Municipal Income Investment Trust (BAF)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par  
(000)

 

Value

 









Mississippi — 1.6%

 

 

 

 

 

 

 

Mississippi Development Bank Special Obligation,
Refunding RB, Jackson Mississippi Water and Sewer
System (AGM), 5.00%, 9/01/34

 

$

2,000

 

$

2,061,320

 









Nevada — 3.0%

 

 

 

 

 

 

 

County of Clark Nevada, RB:

 

 

 

 

 

 

 

Las Vegas-McCarran International Airport, Series A
(AGC), 5.25%, 7/01/39

 

 

2,295

 

 

2,406,124

 

Subordinate Lien, Series A-2 (NPFGC), 5.00%,
7/01/36

 

 

1,540

 

 

1,558,634

 

 

 

 

 

 



 

 

 

 

 

 

 

3,964,758

 









New Jersey — 4.9%

 

 

 

 

 

 

 

New Jersey EDA, RB, School Facilities Construction,
Series Z (AGC), 6.00%, 12/15/34

 

 

1,000

 

 

1,158,350

 

New Jersey Health Care Facilities Financing Authority,
RB, Virtua Health (AGC), 5.50%, 7/01/38

 

 

1,300

 

 

1,423,565

 

New Jersey State Housing & Mortgage Finance Agency,
RB, S/F Housing, Series CC, 5.25%, 10/01/29

 

 

1,575

 

 

1,662,869

 

New Jersey Transportation Trust Fund Authority, RB,
Transportation System, Series A (AGC), 5.50%,
12/15/38

 

 

2,000

 

 

2,239,700

 

 

 

 

 

 



 

 

 

 

 

 

 

6,484,484

 









New York — 2.9%

 

 

 

 

 

 

 

New York City Transitional Finance Authority,
Fiscal 2009, RB:

 

 

 

 

 

 

 

Series S-3, 5.25%, 1/15/39

 

 

900

 

 

980,667

 

Series S-4 (AGC), 5.50%, 1/15/29

 

 

2,465

 

 

2,847,075

 

 

 

 

 

 



 

 

 

 

 

 

 

3,827,742

 









Ohio — 0.5%

 

 

 

 

 

 

 

Ohio Higher Educational Facility Commission,
Refunding RB, Summa Health System, 2010 Project
(AGC), 5.25%, 11/15/40

 

 

625

 

 

646,719

 









Pennsylvania — 0.8%

 

 

 

 

 

 

 

Pennsylvania Turnpike Commission, Refunding RB,
Sub-Series B-1 (AGM), 5.00%, 12/01/37

 

 

1,000

 

 

1,058,370

 









Puerto Rico — 1.2%

 

 

 

 

 

 

 

Puerto Rico Sales Tax Financing Corp., RB, First
Sub-Series A, 6.38%, 8/01/39

 

 

1,350

 

 

1,519,384

 









Texas — 19.8%

 

 

 

 

 

 

 

City of Austin Texas, Refunding RB, Series A (AGM):

 

 

 

 

 

 

 

5.00%, 11/15/28

 

 

705

 

 

781,641

 

5.00%, 11/15/29

 

 

895

 

 

984,312

 

City of Dallas Texas, Refunding RB (AGC), 5.25%,
8/15/38

 

 

800

 

 

849,256

 

City of Houston Texas, Refunding RB, Combined,
First Lien, Series A (AGC):

 

 

 

 

 

 

 

6.00%, 11/15/35

 

 

2,600

 

 

3,058,380

 

6.00%, 11/15/36

 

 

2,215

 

 

2,601,894

 

5.38%, 11/15/38

 

 

1,000

 

 

1,112,620

 

Frisco ISD Texas, GO, School Building (AGC):

 

 

 

 

 

 

 

5.38%, 8/15/39

 

 

1,415

 

 

1,566,957

 

5.50%, 8/15/41

 

 

3,365

 

 

3,755,138

 

Harris County Health Facilities Development Corp.,
Refunding RB, Memorial Hermann Healthcare System,
Series B, 7.13%, 12/01/31

 

 

500

 

 

580,225

 

Lower Colorado River Authority, Refunding RB, LCRA
Transmission Services Project (AGC), 5.50%, 5/15/36

 

 

1,270

 

 

1,379,614

 

Lubbock Cooper ISD Texas, GO, School Building (AGC),
5.75%, 2/15/42

 

 

500

 

 

550,555

 

North Texas Tollway Authority, RB, System, First Tier,
Series K-1 (AGC), 5.75%, 1/01/38

 

 

1,500

 

 

1,665,300

 


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par  
(000)

 

Value

 









Texas (concluded)

 

 

 

 

 

 

 

North Texas Tollway Authority, Refunding RB, System
First Tier Series A:

 

 

 

 

 

 

 

(AGC), 5.75%, 1/01/40

 

$

1,500

 

$

1,646,340

 

(BHAC), 5.75%, 1/01/48

 

 

1,250

 

 

1,367,412

 

(NPFGC), 5.13%, 1/01/28

 

 

2,895

 

 

3,069,858

 

Tarrant County Cultural Education Facilities
Finance Corp., Refunding RB, Christus Health,
Series A (AGC), 6.50%, 7/01/37

 

 

1,000

 

 

1,123,590

 

 

 

 

 

 



 

 

 

 

 

 

 

26,093,092

 









Utah — 1.3%

 

 

 

 

 

 

 

City of Riverton Utah, RB, IHC Health Services Inc.,
5.00%, 8/15/41

 

 

1,625

 

 

1,696,484

 









Virginia — 0.9%

 

 

 

 

 

 

 

Virginia Public School Authority, RB, School Financing,
6.50%, 12/01/35

 

 

1,000

 

 

1,183,390

 









Total Municipal Bonds — 110.9%

 

 

 

 

 

146,074,804

 









 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (a)

 

 

 

 

 

 

 









Alabama — 1.2%

 

 

 

 

 

 

 

Mobile Board of Water & Sewer Commissioners, RB
(NPFGC), 5.00%, 1/01/31

 

 

1,500

 

 

1,555,275

 









California — 2.0%

 

 

 

 

 

 

 

San Diego Community College District California, GO,
Election of 2002 (AGM), 5.00%, 5/01/30

 

 

2,500

 

 

2,689,050

 









District of Columbia — 0.7%

 

 

 

 

 

 

 

District of Columbia Water & Sewer Authority, RB,
Series A, 6.00%, 10/01/35

 

 

760

 

 

875,530

 









Florida — 32.1%

 

 

 

 

 

 

 

City of Jacksonville Florida, RB (NPFGC):

 

 

 

 

 

 

 

5.00%, 10/01/31

 

 

9,500

 

 

9,596,525

 

Better Jacksonville, 5.00%, 10/01/27

 

 

3,930

 

 

4,076,314

 

County of Pinellas Florida, RB (AGM), 5.00%, 10/01/32

 

 

9,500

 

 

9,743,740

 

Florida State Board of Education, GO, Public Education,
Series A (AGM), 5.00%, 6/01/27

 

 

9,000

 

 

9,574,650

 

Palm Beach County School District, COP, Refunding,
Series D (AGM), 5.00%, 8/01/28

 

 

9,190

 

 

9,359,372

 

 

 

 

 

 



 

 

 

 

 

 

 

42,350,601

 









Illinois — 5.0%

 

 

 

 

 

 

 

Chicago Transit Authority, Refunding RB, Federal Transit
Administration Section 5309 (AGM), 5.00%, 6/01/28

 

 

2,999

 

 

3,231,513

 

Illinois State Toll Highway Authority, RB, Series B, 5.50%,
1/01/33

 

 

2,999

 

 

3,341,330

 

 

 

 

 

 



 

 

 

 

 

 

 

6,572,843

 









Kentucky — 0.8%

 

 

 

 

 

 

 

Kentucky State Property & Building Commission,
Refunding RB, Project No. 93 (AGC), 5.25%, 2/01/27

 

 

898

 

 

1,012,388

 









Nevada — 1.7%

 

 

 

 

 

 

 

Clark County Water Reclamation District, GO, Limited Tax,
6.00%, 7/01/38

 

 

2,000

 

 

2,288,280

 









Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 43.5%

 

 

 

 

 

57,343,967

 









Total Long-Term Investments
(Cost — $192,233,839) — 154.4%

 

 

 

 

 

203,418,771

 










 

 

 

 

See Notes to Financial Statements.

 

 





 

ANNUAL REPORT

AUGUST 31, 2010

17




 

 


 

 

Schedule of Investments (concluded)

BlackRock Insured Municipal Income Investment Trust (BAF)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Short-Term Securities

 

Shares

 

Value

 









FFI Institutional Tax-Exempt Fund, 0.22% (b)(c)

 

 

1,211,264

 

$

1,211,264

 









Total Short-Term Securities
(Cost — $1,211,264) — 0.9%

 

 

 

 

 

1,211,264

 









Total Investments (Cost — $193,445,103*) — 155.3%

 

 

 

 

 

204,630,035

 

Other Assets Less Liabilities — 1.2%

 

 

 

 

 

1,642,833

 

Liability for Trust Certificates, Including Interest
Expense and Fees Payable — (24.4)%

 

 

 

 

 

(32,224,905

)

Preferred Shares, at Redemption Value — (32.1)%

 

 

 

 

 

(42,275,531

)

 

 

 

 

 



 

Net Assets Applicable to Common Shares — 100.0%

 

 

 

 

$

131,772,432

 

 

 

 

 

 



 


 

 


*

The cost and unrealized appreciation (depreciation) of investments as of August 31, 2010, as computed for federal income tax purposes, were as follows:


 

 

 

 

 

Aggregate cost

 

$

161,510,112

 

 

 



 

Gross unrealized appreciation

 

$

12,308,678

 

Gross unrealized depreciation

 

 

(1,385,019

)

 

 



 

Net unrealized appreciation

 

$

10,923,659

 

 

 



 


 

 

(a)

Securities represent bonds transferred to a tender option bond trust in exchange for which the Trust acquired residual interest certificates. These securities serve as collateral in a financing transaction. See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to tender option bond trusts.

 

 

(b)

Investments in companies considered to be an affiliate of the Trust during the year, for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:


 

 

 

 

 

 

 

 

 

 

 

 

 

 



Affiliate

 

Shares Held at
August 31,
2009

 

Net
Activity

 

Shares Held at
August 31,
2010

 

Income

 











BIF Florida Municipal Money Fund

 

 

5

 

 

(5

)

 

 

 

 

FFI Institutional Tax-Exempt Fund

 

 

9,202,751

 

 

(7,991,487

)

 

1,211,264

 

$

9,940

 
















 

 

 

(c)

Represents the current yield as of report date.

 

 

 

Fair Value Measurements — Various inputs are used in determining the fair value of investments, which are as follows:

 

 

 

 

Level 1 — price quotations in active markets/exchanges for identical assets and liabilities

 

 

 

 

Level 2 — other observable inputs (including, but not limited to: quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs)

 

 

 

 

Level 3 — unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the Trust’s own assumptions used in determining the fair value of investments)

 

 

 

 

The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. For information about the Trust’s policy regarding valuation of investments and other significant accounting policies, please refer to Note 1 of the Notes to Financial Statements.

 

 

 

 

The following table summarizes the inputs used as of August 31, 2010 in determining the fair valuation of the Trust’s investments:


 

 

 

 

 

 

 

 

 

 

 

 

 

 











Valuation Inputs

 

Level 1

 

Level 2

 

Level 3

 

Total

 











Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments in Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-Term Investments1

 

 

 

$

203,418,771

 

 

 

$

203,418,771

 

Short-Term Securities

 

$

1,211,264

 

 

 

 

 

 

1,211,264

 

 

 













Total

 

$

1,211,264

 

$

203,418,771

 

 

 

$

204,630,035

 

 

 













 

 

 

 

 

1

See above Schedule of Investments for values in each state or political subdivision.


 

 

 

 

See Notes to Financial Statements.

 





18

ANNUAL REPORT

AUGUST 31, 2010

 



 

 


 

Schedule of Investments August 31, 2010

BlackRock Municipal Bond Trust (BBK)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par  
(000)

 

Value

 







Alabama — 3.8%

 

 

 

 

 

 

 

Birmingham Special Care Facilities Financing Authority,
RB, Children’s Hospital (AGC):

 

 

 

 

 

 

 

6.00%, 6/01/34

 

$

1,150

 

$

1,289,449

 

6.00%, 6/01/39

 

 

450

 

 

503,730

 

Hoover City Board of Education, GO, Refunding, 4.25%,
2/15/40

 

 

4,350

 

 

4,249,820

 

 

 

 

 

 



 

 

 

 

 

 

 

6,042,999

 









Arizona — 5.8%

 

 

 

 

 

 

 

City of Goodyear Arizona, GO (AGM), 4.25%, 7/01/37

 

 

1,135

 

 

1,136,442

 

Mohave County Unified School District No. 20 Kingman,
GO, School Improvement Project of 2006, Series C (AGC),
5.00%, 7/01/26

 

 

200

 

 

223,422

 

Pima County IDA, Refunding IDRB, Tucson Electric Power,
5.75%, 9/01/29

 

 

900

 

 

930,744

 

Salt Verde Financial Corp., RB, Senior:

 

 

 

 

 

 

 

5.00%, 12/01/32

 

 

1,500

 

 

1,447,185

 

5.00%, 12/01/37

 

 

2,065

 

 

1,961,791

 

San Luis Facility Development Corp., RB, Senior Lien,
Regional Detention Center Project:

 

 

 

 

 

 

 

6.25%, 5/01/15

 

 

300

 

 

292,248

 

7.00%, 5/01/20

 

 

300

 

 

292,782

 

7.25%, 5/01/27

 

 

600

 

 

569,418

 

Scottsdale IDA, RB, Scottsdale Healthcare, Series C (AGC),
5.00%, 9/01/35

 

 

1,000

 

 

1,018,920

 

State of Arizona, COP, Department of Administration,
Series A (AGM), 5.00%, 10/01/29

 

 

750

 

 

785,085

 

University Medical Center Corp. Arizona, RB, 6.50%,
7/01/39

 

 

500

 

 

546,265

 

 

 

 

 

 



 

 

 

 

 

 

 

9,204,302

 









Arkansas — 0.2%

 

 

 

 

 

 

 

Benton County Public Facilities Board, Refunding RB,
BCCSO Project, Series A, 5.75%, 6/01/30

 

 

300

 

 

316,932

 









California — 14.0%

 

 

 

 

 

 

 

California County Tobacco Securitization Agency, RB, CAB,
Stanislaus, Sub-Series C, 6.30%, 6/01/55 (a)

 

 

4,500

 

 

55,935

 

California HFA, RB, Home Mortgage, Series G, AMT, 5.05%,
2/01/29

 

 

2,835

 

 

2,704,080

 

Carlsbad Unified School District, GO, Election of 2006,
Series B, 6.09%, 5/01/34 (b)

 

 

1,000

 

 

639,980

 

Dinuba Unified School District, GO, Election of 2006 (AGM):

 

 

 

 

 

 

 

5.63%, 8/01/31

 

 

250

 

 

271,992

 

5.75%, 8/01/33

 

 

500

 

 

541,650

 

Hartnell Community College District California, GO, CAB,
Election of 2002, Series D, 7.47%, 8/01/34 (b)

 

 

1,650

 

 

894,531

 

Norwalk-La Mirada Unified School District California, GO,
Refunding, CAB, Election of 2002, Series E (AGC),
6.47%, 8/01/38 (a)

 

 

8,000

 

 

1,523,360

 

San Diego Community College District California, GO, CAB,
Election of 2002, 6.24%, 8/01/33 (b)

 

 

2,800

 

 

1,813,644

 

State of California, GO, Refunding:

 

 

 

 

 

 

 

(CIFG), 4.50%, 8/01/28

 

 

2,000

 

 

1,982,920

 

Veterans, AMT, 5.05%, 12/01/36

 

 

1,000

 

 

979,970

 

State of California, GO, Various Purpose:

 

 

 

 

 

 

 

5.75%, 4/01/31

 

 

2,000

 

 

2,210,760

 

6.00%, 3/01/33

 

 

2,050

 

 

2,336,610

 

6.50%, 4/01/33

 

 

1,950

 

 

2,285,673

 

5.50%, 3/01/40

 

 

2,350

 

 

2,522,537

 

Val Verde Unified School District California, Special Tax
Bonds, Refunding, Junior Lien, 6.25%, 10/01/28

 

 

1,585

 

 

1,600,660

 

 

 

 

 

 



 

 

 

 

 

 

 

22,364,302

 










 

 

 

 

 

 

 

 

Municipal Bonds

 

Par  
(000)

 

Value

 







Colorado — 0.8%

 

 

 

 

 

 

 

Colorado Health Facilities Authority, RB, Catholic Health
Initiatives, Series D, 6.25%, 10/01/33

 

$

1,070

 

$

1,215,295

 









Connecticut — 0.8%

 

 

 

 

 

 

 

Connecticut State Health & Educational Facility
Authority, RB, Fairfield University, New Money,
Series O, 5.00%, 7/01/35

 

 

1,200

 

 

1,259,832

 









District of Columbia — 7.7%

 

 

 

 

 

 

 

District of Columbia, Refunding RB, Friendship Public
Charter School Inc. (ACA), 5.25%, 6/01/33

 

 

595

 

 

541,319

 

District of Columbia, Tax Allocation Bonds, Gallery Place
Project (AGM), 5.40%, 7/01/31

 

 

6,000

 

 

6,139,680

 

District of Columbia Tobacco Settlement Financing Corp.,
Refunding RB, Asset-Backed, 6.75%, 5/15/40

 

 

5,580

 

 

5,536,085

 

 

 

 

 

 



 

 

 

 

 

 

 

12,217,084

 









Florida — 5.9%

 

 

 

 

 

 

 

Miami Beach Health Facilities Authority, RB, Mount
Sinai Medical Center of Florida, 6.75%, 11/15/21

 

 

1,255

 

 

1,315,930

 

Palm Beach County Housing Finance Authority, HRB,
Indian Trace Apartments, Series A, AMT (AGM),
5.63%, 1/01/44

 

 

7,255

 

 

7,318,771

 

Stevens Plantation Community Development District,
Special Assessment Bonds, Series A, 7.10%,
5/01/35

 

 

940

 

 

784,026

 

 

 

 

 

 



 

 

 

 

 

 

 

9,418,727

 









Georgia — 1.1%

 

 

 

 

 

 

 

Albany-Dougherty Inner City Authority, RB, Albany State
University Projects (AGC), 4.75%, 7/01/40

 

 

1,125

 

 

1,143,506

 

Cobb County Development Authority, Refunding RB, KSU
Sports and Recreation Park, Series A (AGC), 4.75%,
7/15/35

 

 

600

 

 

611,820

 

 

 

 

 

 



 

 

 

 

 

 

 

1,755,326

 









Idaho — 1.6%

 

 

 

 

 

 

 

Idaho Health Facilities Authority, RB, St. Luke’s Regional
Medical Center (AGM), 5.00%, 7/01/35 (c)

 

 

500

 

 

515,245

 

Idaho Health Facilities Authority, Refunding RB, Trinity
Health Group, Series B, 6.25%, 12/01/33

 

 

1,750

 

 

1,969,363

 

 

 

 

 

 



 

 

 

 

 

 

 

2,484,608

 









Illinois — 7.7%

 

 

 

 

 

 

 

Illinois Finance Authority, RB:

 

 

 

 

 

 

 

MJH Education Assistance IV LLC, Sub-Series B,
5.38%, 6/01/35 (d)(e)

 

 

425

 

 

114,767

 

Roosevelt University Project, 6.50%, 4/01/44

 

 

1,000

 

 

1,067,740

 

Rush University Medical Center, Series C,
6.63%, 11/01/39

 

 

650

 

 

720,122

 

Illinois Finance Authority, Refunding RB, Series A:

 

 

 

 

 

 

 

Friendship Village Schaumburg, 5.63%, 2/15/37

 

 

210

 

 

174,485

 

Lake Forest Hospital, 5.75%, 7/01/29

 

 

4,000

 

 

4,125,880

 

OSF Healthcare System, 6.00%, 5/15/39

 

 

1,050

 

 

1,094,593

 

Village of Bolingbrook Illinois, GO, Refunding, Series B
(NPFGC), 6.22%, 1/01/36 (a)

 

 

23,065

 

 

4,922,302

 

 

 

 

 

 



 

 

 

 

 

 

 

12,219,889

 









Indiana — 1.8%

 

 

 

 

 

 

 

County of Monroe Indiana, Multifamily Housing
Revenue Bond Pass-Through Certificates, RB, Series 1,
Canterbury House Apartments, Mandatory Put Bonds,
AMT, 5.90%, 12/01/34 (f)

 

 

1,850

 

 

1,878,971

 

Indiana Finance Authority, Refunding RB, Improvement,
U.S. Steel Corp., 6.00%, 12/01/26

 

 

1,000

 

 

1,058,370

 

 

 

 

 

 



 

 

 

 

 

 

 

2,937,341

 










 

 

 

 

See Notes to Financial Statements.


 

ANNUAL REPORT

AUGUST 31, 2010

19




 

 


 

Schedule of Investments (continued)

BlackRock Municipal Bond Trust (BBK)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par  
(000)

 

Value

 







Iowa — 1.3%

 

 

 

 

 

 

 

Iowa Higher Education Loan Authority, Refunding RB,
Private College Facility:

 

 

 

 

 

 

 

5.75%, 9/01/30

 

$

1,000

 

$

1,027,550

 

6.00%, 9/01/39

 

 

1,000

 

 

1,035,190

 

 

 

 

 

 



 

 

 

 

 

 

 

2,062,740

 









Kansas — 3.3%

 

 

 

 

 

 

 

Kansas Development Finance Authority, RB, University of
Kansas Tenant, Series O, 4.75%, 6/15/41

 

 

700

 

 

719,712

 

Wichita Airport Authority, RB, Special, Cessna Citation
Service Center, Series A, AMT, 6.25%, 6/15/32

 

 

5,000

 

 

4,489,950

 

 

 

 

 

 



 

 

 

 

 

 

 

5,209,662

 









Kentucky — 0.3%

 

 

 

 

 

 

 

Kentucky Economic Development Finance Authority, RB,
Louisville Arena, Sub-Series A-1 (AGC), 6.00%,
12/01/38

 

 

500

 

 

545,840

 









Louisiana — 0.3%

 

 

 

 

 

 

 

New Orleans Aviation Board, Refunding RB, Passenger
Facility Charge, Series A, 5.13%, 1/01/36

 

 

400

 

 

406,648

 









Maryland — 3.6%

 

 

 

 

 

 

 

County of Frederick Maryland, Special Tax Bonds,
Urbana Community Development Authority,
Sub-Series B, 6.25%, 7/01/30

 

 

2,806

 

 

2,806,028

 

Maryland Health & Higher Educational Facilities
Authority, Refunding RB, Doctor’s Community Hospital,
5.63%, 7/01/30

 

 

2,900

 

 

2,929,203

 

 

 

 

 

 



 

 

 

 

 

 

 

5,735,231

 









Michigan — 4.3%

 

 

 

 

 

 

 

Michigan State Building Authority, Refunding RB,
Facilities Program, Series I, 6.25%, 10/15/38

 

 

1,250

 

 

1,410,975

 

Michigan State Hospital Finance Authority,
Refunding RB:

 

 

 

 

 

 

 

Henry Ford Health System, Series A, 5.25%,
11/15/46

 

 

1,065

 

 

1,032,390

 

Hospital, Henry Ford Health, 5.75%, 11/15/39

 

 

2,000

 

 

2,072,080

 

Royal Oak Hospital Finance Authority Michigan,
Refunding RB, William Beaumont Hospital, 8.25%,
9/01/39

 

 

1,950

 

 

2,366,559

 

 

 

 

 

 



 

 

 

 

 

 

 

6,882,004

 









Minnesota — 4.3%

 

 

 

 

 

 

 

City of Minneapolis Minnesota, Refunding RB, Fairview
Health Services, Series B (AGC), 6.50%, 11/15/38

 

 

5,350

 

 

6,156,138

 

Minnesota Higher Education Facilities Authority, RB,
Gustavus Adolphus Child & Family Services, Inc.,
Series 7-B, 4.75%, 10/01/35

 

 

625

 

 

639,800

 

 

 

 

 

 



 

 

 

 

 

 

 

6,795,938

 









Mississippi — 2.9%

 

 

 

 

 

 

 

Mississippi Development Bank Special Obligation, RB,
Jackson County Limited Tax Note (AGC), 5.50%,
7/01/32

 

 

1,750

 

 

1,904,210

 

University of Southern Mississippi, RB, Campus Facilities
Improvements Project, 5.38%, 9/01/36

 

 

2,500

 

 

2,747,750

 

 

 

 

 

 



 

 

 

 

 

 

 

4,651,960

 









Montana — 1.8%

 

 

 

 

 

 

 

Montana Facility Finance Authority, Refunding RB,
Sisters of Leavenworth, Series A, 4.75%, 1/01/40

 

 

2,750

 

 

2,857,030

 









Multi-State — 7.3%

 

 

 

 

 

 

 

Centerline Equity Issuer Trust, 7.20%, 11/15/52 (g)(h)

 

 

10,500

 

 

11,598,720

 









Nebraska — 0.3%

 

 

 

 

 

 

 

Douglas County Hospital Authority No. 2, RB, Health
Facilities, Immanuel Obligation Group, 5.50%, 1/01/30

 

 

425

 

 

446,811

 










 

 

 

 

 

 

 

 

Municipal Bonds

 

Par  
(000)

 

Value

 







Nevada — 1.1%

 

 

 

 

 

 

 

City of Las Vegas Nevada, Special Assessment Bonds,
Summerlin Area, 5.65%, 6/01/23

 

$

1,320

 

$

1,159,000

 

County of Clark Nevada, Refunding RB, Alexander
Dawson School Nevada Project, 5.00%, 5/15/29

 

 

575

 

 

585,522

 

 

 

 

 

 



 

 

 

 

 

 

 

1,744,522

 









New Jersey — 13.7%

 

 

 

 

 

 

 

Middlesex County Improvement Authority, RB,
Subordinate, Heldrich Center Hotel, Series B,
6.25%, 1/01/37

 

 

915

 

 

137,159

 

New Jersey EDA, RB:

 

 

 

 

 

 

 

Cigarette Tax, 5.50%, 6/15/24

 

 

3,710

 

 

3,694,418

 

Cigarette Tax (Radian), 5.50%, 6/15/31

 

 

1,500

 

 

1,475,070

 

Continental Airlines Inc. Project, AMT, 7.20%,
11/15/30 (f)

 

 

3,000

 

 

3,019,770

 

Motor Vehicle Surcharge, Series A (NPFGC),
5.00%, 7/01/27

 

 

1,000

 

 

1,034,080

 

New Jersey EDA, Refunding RB, First Mortgage,
Winchester, Series A, 5.80%, 11/01/31

 

 

1,500

 

 

1,520,325

 

New Jersey EDA, Special Assessment Bonds, Refunding,
Kapkowski Road Landfill Project, 6.50%, 4/01/28

 

 

7,500

 

 

8,415,000

 

New Jersey Educational Facilities Authority,
Refunding RB, University of Medicine & Dentistry,
Series B:

 

 

 

 

 

 

 

7.13%, 12/01/23

 

 

630

 

 

761,298

 

7.50%, 12/01/32

 

 

800

 

 

939,632

 

New Jersey State Housing & Mortgage Finance Agency,
RB, Series AA, 6.50%, 10/01/38

 

 

810

 

 

897,318

 

 

 

 

 

 



 

 

 

 

 

 

 

21,894,070

 









New York — 8.3%

 

 

 

 

 

 

 

Albany Industrial Development Agency, RB, New
Covenant Charter School Project, Series A, 7.00%,
5/01/35 (d)(e)

 

 

455

 

 

182,009

 

 

 

 

 

 

 

 

 

Long Island Power Authority, Refunding RB, Series A,
6.25%, 4/01/33

 

 

300

 

 

354,357

 

 

 

 

 

 

 

 

 

Metropolitan Transportation Authority, Refunding RB,
Series A, 5.13%, 1/01/29

 

 

1,500

 

 

1,582,950

 

New York City Housing Development Corp., RB, Series A,
AMT, 5.50%, 11/01/34

 

 

3,000

 

 

3,032,550

 

New York City Industrial Development Agency, RB:

 

 

 

 

 

 

 

American Airlines Inc., JFK International Airport,
AMT, 7.75%, 8/01/31 (f)

 

 

3,165

 

 

3,330,498

 

Queens Baseball Stadium, PILOT (AGC),
6.50%, 1/01/46

 

 

700

 

 

793,737

 

New York Liberty Development Corp., Refunding RB,
Second Priority, Bank of America Tower at One Bryant
Park Project, 6.38%, 7/15/49

 

 

800

 

 

857,328

 

New York State Dormitory Authority, RB:

 

 

 

 

 

 

 

5.83%, 7/01/39 (b)

 

 

700

 

 

609,483

 

Rochester Institute of Technology, Series A, 6.00%,
7/01/33

 

 

1,000

 

 

1,126,850

 

University of Rochester, Series A, 5.13%, 7/01/39

 

 

250

 

 

268,432

 

Port Authority of New York & New Jersey, Refunding RB,
Consolidated, 152nd Series, AMT, 5.75%, 11/01/30

 

 

1,000

 

 

1,121,800

 

 

 

 

 

 



 

 

 

 

 

 

 

13,259,994

 










 

 

 

 

See Notes to Financial Statements.


20

ANNUAL REPORT

AUGUST 31, 2010

 




 

 


 

Schedule of Investments (continued)

BlackRock Municipal Bond Trust (BBK)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par  
(000)

 

Value

 







North Carolina — 6.2%

 

 

 

 

 

 

 

City of Charlotte North Carolina, Refunding RB, Series A,
5.50%, 7/01/34

 

$

225

 

$

246,262

 

Gaston County Industrial Facilities & Pollution Control
Financing Authority North Carolina, RB, Exempt
Facilities, National Gypsum Co. Project, AMT, 5.75%,
8/01/35

 

 

2,945

 

 

2,374,642

 

North Carolina Capital Facilities Finance Agency, RB,
Duke Energy Carolinas, Series B, 4.38%, 10/01/31 (c)

 

 

3,475

 

 

3,508,777

 

North Carolina Medical Care Commission, RB, WakeMed,
Series A (AGC), 5.88%, 10/01/38

 

 

1,000

 

 

1,057,600

 

North Carolina Medical Care Commission, Refunding RB:

 

 

 

 

 

 

 

Caromont Health (AGC), 4.50%, 2/15/30

 

 

750

 

 

755,040

 

Caromont Health (AGC), 4.63%, 2/15/35

 

 

1,000

 

 

1,004,620

 

University Health System, Series D, 6.25%,
12/01/33

 

 

800

 

 

888,024

 

 

 

 

 

 



 

 

 

 

 

 

 

9,834,965

 









Ohio — 0.5%

 

 

 

 

 

 

 

County of Lucas Ohio, GO, Various Purpose, 5.00%,
10/01/40

 

 

400

 

 

423,416

 

Ohio Higher Educational Facility Commission,
Refunding RB, Summa Health System, 2010 Project
(AGC), 5.25%, 11/15/40

 

 

400

 

 

413,900

 

 

 

 

 

 



 

 

 

 

 

 

 

837,316

 









Oklahoma — 1.1%

 

 

 

 

 

 

 

Tulsa Airports Improvement Trust, RB, Series A,
Mandatory Put Bonds, AMT, 7.75%, 6/01/35 (f)

 

 

1,725

 

 

1,768,401

 









Oregon — 2.2%

 

 

 

 

 

 

 

City of Portland Oregon, Multifamily Housing Revenue
Bond Pass-Through Certificates, RB, Series 6, Pacific
Tower Apartments, AMT, 6.05%, 11/01/34

 

 

520

 

 

527,254

 

Oregon Health & Science University, RB, Series A,
5.75%, 7/01/39

 

 

1,250

 

 

1,339,237

 

Oregon State Facilities Authority, Refunding RB, Limited
College Project, Series A:

 

 

 

 

 

 

 

5.00%, 10/01/34

 

 

850

 

 

860,039

 

5.25%, 10/01/40

 

 

750

 

 

768,855

 

 

 

 

 

 



 

 

 

 

 

 

 

3,495,385

 









Pennsylvania — 2.7%

 

 

 

 

 

 

 

Delaware River Port Authority, RB, Series D (AGC),
5.00%, 1/01/40

 

 

2,600

 

 

2,734,472

 

Pennsylvania Economic Development Financing
Authority, RB, Reliant Energy, Series A, AMT, 6.75%,
12/01/36

 

 

1,455

 

 

1,508,559

 

 

 

 

 

 



 

 

 

 

 

 

 

4,243,031

 









Puerto Rico — 1.9%

 

 

 

 

 

 

 

Puerto Rico Sales Tax Financing Corp., RB, First
Sub-Series A, 5.75%, 8/01/37

 

 

2,000

 

 

2,137,920

 

Puerto Rico Sales Tax Financing Corp., Refunding RB,
CAB, Series A (NPFGC), 5.76%, 8/01/41 (a)

 

 

5,000

 

 

837,150

 

 

 

 

 

 



 

 

 

 

 

 

 

2,975,070

 









Rhode Island — 2.5%

 

 

 

 

 

 

 

Rhode Island Health & Educational Building Corp., RB,
Hospital Financing, LifeSpan Obligation, Series A
(AGC), 7.00%, 5/15/39

 

 

1,000

 

 

1,185,160

 

Rhode Island Housing & Mortgage Finance Corp., RB,
Homeownership Opportunity, Series 54, AMT, 4.85%,
10/01/41

 

 

1,500

 

 

1,476,735

 

Rhode Island Turnpike & Bridge Authority, RB, Series A,
5.00%, 12/01/35

 

 

400

 

 

417,924

 

State of Rhode Island, COP, Series C, School for the Deaf
(AGC), 5.38%, 4/01/28

 

 

900

 

 

989,811

 

 

 

 

 

 



 

 

 

 

 

 

 

4,069,630

 










 

 

 

 

 

 

 

 

Municipal Bonds

 

Par  
(000)

 

Value

 







South Carolina — 1.5%

 

 

 

 

 

 

 

County of Florence South Carolina, RB, McLeod
Regional Medical Center, Series A, 5.00%, 11/01/37

 

$

2,300

 

$

2,343,930

 









Tennessee — 0.3%

 

 

 

 

 

 

 

Memphis-Shelby County Sports Authority Inc.,
Refunding RB, Memphis Arena Project, Series A,
5.38%, 11/01/28

 

 

525

 

 

571,919

 









Texas — 15.0%

 

 

 

 

 

 

 

Harris County Health Facilities Development Corp.,
Refunding RB, Memorial Hermann Healthcare System,
Series B:

 

 

 

 

 

 

 

7.13%, 12/01/31

 

 

500

 

 

580,225

 

7.25%, 12/01/35

 

 

1,750

 

 

2,027,445

 

Harris County Housing Finance Corp., Multifamily
Housing Revenue Bond Pass-Through Certificates, RB,
Series 9, Copperwood Ranch Apartments, Mandatory
Put Bonds, AMT, 5.95%, 11/01/35 (f)

 

 

2,440

 

 

2,490,874

 

Harris County-Houston Sports Authority, Refunding RB,
CAB, Senior Lien, Series G (NPFGC), 6.17%,
11/15/41 (a)

 

 

11,690

 

 

1,424,660

 

Lower Colorado River Authority, Refunding RB (NPFGC),
5.00%, 5/15/13 (i)

 

 

15

 

 

16,769

 

Matagorda County Navigation District No. 1 Texas,
Refunding RB, Central Power & Light Co. Project,
Series A, 6.30%, 11/01/29

 

 

1,500

 

 

1,667,400

 

San Antonio Energy Acquisition Public Facility Corp.,
RB, Gas Supply, 5.50%, 8/01/24

 

 

1,620

 

 

1,742,618

 

Texas Private Activity Bond Surface Transportation Corp.,
RB, Senior Lien, LBJ Infrastructure, 7.00%, 6/30/40

 

 

2,000

 

 

2,177,740

 

Texas State Turnpike Authority, RB (AMBAC):

 

 

 

 

 

 

 

CAB, 6.08%, 8/15/35 (a)

 

 

50,000

 

 

10,816,000

 

First Tier, Series A, 5.00%, 8/15/42

 

 

1,000

 

 

989,580

 

 

 

 

 

 



 

 

 

 

 

 

 

23,933,311

 









Washington — 1.0%

 

 

 

 

 

 

 

Washington Health Care Facilities Authority, RB,
MultiCare Health System, Series B (AGC), 6.00%,
8/15/39

 

 

1,400

 

 

1,541,862

 









Wisconsin — 1.7%

 

 

 

 

 

 

 

Wisconsin Health & Educational Facilities Authority, RB,
Aurora Health Care, 6.40%, 4/15/33

 

 

1,350

 

 

1,389,474

 

Wisconsin Housing & EDA, Refunding RB, Series A, AMT,
4.75%, 9/01/33

 

 

1,340

 

 

1,340,697

 

 

 

 

 

 



 

 

 

 

 

 

 

2,730,171

 









Wyoming — 0.8%

 

 

 

 

 

 

 

County of Sweetwater Wyoming, Refunding RB, Idaho
Power Co. Project, 5.25%, 7/15/26

 

 

1,200

 

 

1,306,476

 









Total Municipal Bonds — 141.4%

 

 

 

 

 

225,179,274

 









 

 

 

 

 

 

 

 










 

 

 

 

 

 

 

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (j)

 

 

 

 

 

 

 









Colorado — 2.5%

 

 

 

 

 

 

 

Colorado Health Facilities Authority, RB, Catholic Health,
Series C-7 (AGM), 5.00%, 9/01/36

 

 

3,750

 

 

3,884,963

 









Massachusetts — 1.0%

 

 

 

 

 

 

 

Massachusetts Water Resources Authority, Refunding RB,
General, Series A, 5.00%, 8/01/41

 

 

1,450

 

 

1,529,591

 









New York — 4.1%

 

 

 

 

 

 

 

New York City Municipal Water Finance Authority, RB:

 

 

 

 

 

 

 

Fiscal 2009, Series A, 5.75%, 6/15/40

 

 

450

 

 

518,035

 

Series FF-2, 5.50%, 6/15/40

 

 

405

 

 

460,765

 

New York City Municipal Water Finance Authority,
Refunding RB, Series A, 4.75%, 6/15/30

 

 

3,000

 

 

3,178,170

 


 

 

 

 

See Notes to Financial Statements.


 

ANNUAL REPORT

AUGUST 31, 2010

21




 

 


 

Schedule of Investments (concluded)

BlackRock Municipal Bond Trust (BBK)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (j)

 

Par  
(000)

 

Value

 







New York (concluded)

 

 

 

 

 

 

 

New York State Dormitory Authority, RB, New York
University, Series A, 5.00%, 7/01/38

 

$

2,199

 

$

2,339,865

 

 

 

 

 

 



 

 

 

 

 

 

 

6,496,835

 









Ohio — 2.1%

 

 

 

 

 

 

 

County of Montgomery Ohio, RB, Catholic Health,
Series C-1 (AGM), 5.00%, 10/01/41

 

 

1,260

 

 

1,297,888

 

Ohio Higher Educational Facility Commission,
Refunding RB, Hospital, Cleveland Clinic Health,
Series A, 5.25%, 1/01/33

 

 

2,000

 

 

2,119,600

 

 

 

 

 

 



 

 

 

 

 

 

 

3,417,488

 









Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 9.7%

 

 

 

 

 

15,328,877

 









Total Long-Term Investments
(Cost — $229,478,065) — 151.1%

 

 

 

 

 

240,508,151

 









 



 

 

 

 

 

 

 

 

Short-Term Securities

 

Shares

 

 

 

 








FFI Institutional Tax-Exempt Fund, 0.22% (k)(l)

 

 

4,831,353

 

 

4,831,353

 









Total Short-Term Securities
(Cost — $4,831,353) — 3.0%

 

 

 

 

 

4,831,353

 









Total Investments (Cost — $234,309,418*) — 154.1%

 

 

 

 

 

245,339,504

 

Other Assets Less Liabilities — 0.7%

 

 

 

 

 

1,186,968

 

Liability for Trust Certificates, Including Interest
Expense and Fees Payable — (4.6)%

 

 

 

 

 

(7,404,377

)

Preferred Shares, at Redemption Value — (50.2)%

 

 

 

 

 

(79,906,002

)

 

 

 

 

 



 

Net Assets Applicable to Common Shares — 100.0%

 

 

 

 

$

159,216,093

 

 

 

 

 

 



 


 

 



 

*

The cost and unrealized appreciation (depreciation) of investments as of August 31, 2010, as computed for federal income tax purposes, were as follows:


 

 

 

 

 

 

 

Aggregate cost

 

$

226,120,518

 

 

 

 



 

 

Gross unrealized appreciation

 

$

15,057,911

 

 

Gross unrealized depreciation

 

 

(3,238,073

)

 

 

 



 

 

Net unrealized appreciation

 

$

11,819,838

 

 

 

 



 


 

 

(a)

Represents a zero-coupon bond. Rate shown reflects the current yield as of report date.

 

 

(b)

Represents a step-up bond that pays an initial coupon rate for the first period and then a higher coupon rate for the following periods. Rate shown reflects the current yield as of report date.

 

 

(c)

When-issued security. Unsettled when-issued transactions were as follows:


 

 

 

 

 

 

 

 

 

 









 

Counterparty

 

Value

 

Unrealized
Appreciation

 

 







 

Citigroup Global Markets

 

$

515,245

 

$

10,455

 

 

Wells Fargo Bank

 

$

3,508,777

 

$

33,777

 

 










 

 

(d)

Issuer filed for bankruptcy and/or is in default of interest payments.

 

 

(e)

Non-income producing security.

 

 

(f)

Variable rate security. Rate shown is as of report date.

 

 

(g)

Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration to qualified institutional investors.

 

 

(h)

Security represents a beneficial interest in a trust. The collateral deposited into the trust is federally tax-exempt revenue bonds issued by various state or local governments, or their respective agencies or authorities. The security is subject to remarketing prior to its stated maturity.

 

 

(i)

US government securities, held in escrow, are used to pay interest on this security as well as to retire the bond in full at the date indicated, typically at a premium to par.

 

 

(j)

Securities represent bonds transferred to a tender option bond trust in exchange for which the Trust acquired residual interest certificates. These securities serve as collateral in a financing transaction. See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to tender option bond trusts.

 

 

(k)

Investments in companies considered to be an affiliate of the Trust during the year, for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 















 

Affiliate

 

Shares Held at
August 31,
2009

 


Net
Activity

 

Shares Held at
August 31,
2010

 

Income

 

 











 

FFI Institutional Tax-Exempt Fund

 

 

3,400,718

 

 

1,430,635

 

 

4,831,353

 

$

5,177

 

 
















 

 

 

(l)

Represents the current yield as of report date.

 

 

 

Fair Value Measurements — Various inputs are used in determining the fair value of investments, which are as follows:

 

 

 

 

Level 1 — price quotations in active markets/exchanges for identical assets and liabilities

 

 

 

 

Level 2 — other observable inputs (including, but not limited to: quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs)

 

 

 

 

Level 3 — unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the Trust’s own assumptions used in determining the fair value of investments)

 

 

 

 

The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. For information about the Trust’s policy regarding valuation of investments and other significant accounting policies, please refer to Note 1 of the Notes to Financial Statements.

 

 

 

 

The following table summarizes the inputs used as of August 31, 2010 in determining the fair valuation of the Trust’s investments:


 

 

 

 

 

 

 

 

 

 

 

 

 

 











Valuation Inputs

 

Level 1

 

Level 2

 

Level 3

 

Total

 











Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments in Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-Term Investments1

 

 

 

$

240,508,151

 

 

 

$

240,508,151

 

Short-Term Securities

 

$

4,831,353

 

 

 

 

 

 

4,831,353

 

 

 













Total

 

$

4,831,353

 

$

240,508,151

 

 

 

$

245,339,504

 

 

 














 

 

 

 

1

See above Schedule of Investments for values in each state or political subdivision.


 

 

 

 

See Notes to Financial Statements.


22

ANNUAL REPORT

AUGUST 31, 2010

 




 

 


 

 

Schedule of Investments August 31, 2010

BlackRock Municipal Bond Investment Trust (BIE)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par  
(000)

 

Value

 









Arizona — 2.3%

 

 

 

 

 

 

 

Maricopa County Pollution Control Corp., Refunding RB,
Southern California Edison Co., Series A, 5.00%,
6/01/35

 

$

375

 

$

387,547

 

Phoenix Civic Improvement Corp., RB, Junior Lien,
Series A, 5.00%, 7/01/40 (a)

 

 

465

 

 

477,699

 

Pima County IDA, Refunding IDRB, Tucson Electric
Power, 5.75%, 9/01/29

 

 

330

 

 

341,273

 

 

 

 

 

 



 

 

 

 

 

 

 

1,206,519

 









California — 18.1%

 

 

 

 

 

 

 

Bay Area Toll Authority, Refunding RB, San Francisco
Bay Area, Series F-1, 5.63%, 4/01/44

 

 

720

 

 

809,834

 

California Health Facilities Financing Authority,
Refunding RB, Series A:

 

 

 

 

 

 

 

Catholic Healthcare West, 6.00%, 7/01/39

 

 

120

 

 

132,073

 

St. Joseph Health System, 5.75%, 7/01/39

 

 

730

 

 

782,115

 

California State Public Works Board, RB:

 

 

 

 

 

 

 

Department of General Services, Buildings 8 & 9,
Series A, 6.25%, 4/01/34

 

 

1,100

 

 

1,198,153

 

Various Capital Projects, Sub-Series I-1, 6.38%,
11/01/34

 

 

340

 

 

376,254

 

Grossmont Union High School District, GO, Election of
2008, Series B, 4.75%, 8/01/45

 

 

1,190

 

 

1,177,136

 

Los Angeles Department of Airports, Refunding RB,
Senior, Los Angeles International Airport, Series A,
5.00%, 5/15/35

 

 

1,460

 

 

1,532,037

 

Los Angeles Department of Water & Power, RB, Power
System, Sub-Series A-1, 5.25%, 7/01/38

 

 

1,500

 

 

1,634,415

 

San Diego Regional Building Authority California, RB,
County Operations Center & Annex, Series A, 5.38%,
2/01/36

 

 

850

 

 

925,191

 

State of California, GO, Various Purpose, 6.00%,
3/01/33

 

 

685

 

 

780,770

 

 

 

 

 

 



 

 

 

 

 

 

 

9,347,978

 









Colorado — 3.5%

 

 

 

 

 

 

 

City & County of Denver Colorado, Refunding RB,
Series A, 5.25%, 11/15/36

 

 

1,095

 

 

1,168,168

 

Colorado Health Facilities Authority, Refunding RB,
Catholic Healthcare, Series A, 5.50%, 7/01/34

 

 

580

 

 

632,896

 

 

 

 

 

 



 

 

 

 

 

 

 

1,801,064

 









District of Columbia — 1.4%

 

 

 

 

 

 

 

District of Columbia Water & Sewer Authority, RB,
Series A, 5.25%, 10/01/29

 

 

640

 

 

709,210

 









Florida — 1.2%

 

 

 

 

 

 

 

County of St. John’s Florida, RB, CAB (AMBAC), 5.40%,
6/01/32 (b)

 

 

765

 

 

238,412

 

New River Community Development District, Special
Assessment Bonds, Series B, 5.00%, 5/01/13 (c)(d)

 

 

750

 

 

358,875

 

 

 

 

 

 



 

 

 

 

 

 

 

597,287

 









Georgia — 5.0%

 

 

 

 

 

 

 

Metropolitan Atlanta Rapid Transit Authority, RB,
Third Series, 5.00%, 7/01/39

 

 

1,300

 

 

1,403,909

 

Municipal Electric Authority of Georgia, Refunding RB,
Project One, Sub-Series D, 6.00%, 1/01/23

 

 

1,000

 

 

1,184,230

 

 

 

 

 

 



 

 

 

 

 

 

 

2,588,139

 









 

 

 

 

 

 

 

 

Municipal Bonds

 

Par  
(000)

 

Value

 









Illinois — 6.6%

 

 

 

 

 

 

 

County of Cook Illinois, GO, Refunding, Series A, 5.25%,
11/15/33

 

$

900

 

$

974,610

 

Illinois Finance Authority, Refunding RB, Series A:

 

 

 

 

 

 

 

Northwestern Memorial Hospital, 6.00%, 8/15/39

 

 

1,000

 

 

1,118,140

 

OSF Healthcare System, 6.00%, 5/15/39

 

 

525

 

 

547,297

 

State of Illinois, RB, Build Illinois, Series B, 5.25%,
6/15/34

 

 

730

 

 

772,048

 

 

 

 

 

 



 

 

 

 

 

 

 

3,412,095

 









Indiana — 2.5%

 

 

 

 

 

 

 

Indiana Municipal Power Agency, RB, Series B, 6.00%,
1/01/39

 

 

1,190

 

 

1,320,674

 









Kansas — 1.9%

 

 

 

 

 

 

 

Kansas Development Finance Authority, Refunding RB,
Adventist Health, 5.50%, 11/15/29

 

 

900

 

 

995,022

 









Kentucky — 4.1%

 

 

 

 

 

 

 

Kentucky Economic Development Finance Authority,
Refunding RB, Owensboro Medical Health System,
Series A, 6.38%, 6/01/40

 

 

350

 

 

374,199

 

Louisville & Jefferson County Metropolitan Government
Parking Authority, RB, Series A, 5.75%, 12/01/34

 

 

800

 

 

902,680

 

Louisville & Jefferson County Metropolitan Government,
Refunding RB, Jewish Hospital & St. Mary’s HealthCare,
6.13%, 2/01/37

 

 

775

 

 

831,412

 

 

 

 

 

 



 

 

 

 

 

 

 

2,108,291

 









Massachusetts — 3.5%

 

 

 

 

 

 

 

Massachusetts Health & Educational Facilities Authority,
Refunding RB, Partners Healthcare System, Series B,
5.25%, 7/01/29

 

 

1,500

 

 

1,508,730

 

Massachusetts State College Building Authority, RB,
Series A, 5.50%, 5/01/39

 

 

250

 

 

277,415

 

 

 

 

 

 



 

 

 

 

 

 

 

1,786,145

 









Michigan — 2.3%

 

 

 

 

 

 

 

Michigan State Building Authority, Refunding RB,
Facilities Program, Series I, 6.00%, 10/15/38

 

 

500

 

 

555,915

 

Royal Oak Hospital Finance Authority Michigan,
Refunding RB, William Beaumont Hospital, 8.25%,
9/01/39

 

 

530

 

 

643,219

 

 

 

 

 

 



 

 

 

 

 

 

 

1,199,134

 









Multi-State — 6.4%

 

 

 

 

 

 

 

Centerline Equity Issuer Trust, 7.20%, 11/15/52 (e)(f)

 

 

3,000

 

 

3,313,920

 









Nebraska — 0.3%

 

 

 

 

 

 

 

Lancaster County Hospital Authority No. 1, RB,
Immanuel Obligation Group, 5.63%, 1/01/40

 

 

170

 

 

176,421

 









Nevada — 9.5%

 

 

 

 

 

 

 

City of Las Vegas Nevada, GO, Limited Tax, Performing
Arts Center, 6.00%, 4/01/34

 

 

1,000

 

 

1,131,630

 

County of Clark Nevada, GO, Refunding, Transportation,
Series A, 5.00%, 12/01/29

 

 

730

 

 

785,932

 

County of Clark Nevada, RB:

 

 

 

 

 

 

 

Motor Vehicle Fuel Tax, 5.00%, 7/01/28

 

 

1,130

 

 

1,216,818

 

Series B, 5.75%, 7/01/42

 

 

1,630

 

 

1,772,120

 

 

 

 

 

 



 

 

 

 

 

 

 

4,906,500

 










 

 

 

 

See Notes to Financial Statements.

 

 





 

ANNUAL REPORT

AUGUST 31, 2010

23




 

 


 

 

Schedule of Investments (continued)

BlackRock Municipal Bond Investment Trust (BIE)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par  
(000)

 

Value

 









New Jersey — 5.7%

 

 

 

 

 

 

 

New Jersey EDA, Refunding RB, School Facilities
Construction, Series AA, 5.50%, 12/15/29

 

$

750

 

$

850,462

 

New Jersey State Housing & Mortgage Finance Agency,
RB, S/F Housing, Series CC, 5.25%, 10/01/29

 

 

620

 

 

654,590

 

New Jersey Transportation Trust Fund Authority, RB,
Transportation System, Series A, 5.88%, 12/15/38

 

 

695

 

 

782,987

 

Tobacco Settlement Financing Corp. New Jersey,
Refunding RB, Series 1A, 4.50%, 6/01/23

 

 

715

 

 

671,957

 

 

 

 

 

 



 

 

 

 

 

 

 

2,959,996

 









New York — 6.5%

 

 

 

 

 

 

 

City of Troy New York, Refunding RB, Rensselaer
Polytechnic, Series A, 5.13%, 9/01/40

 

 

955

 

 

989,399

 

New York City Transitional Finance Authority, RB,
Fiscal 2009, Series S-3, 5.25%, 1/15/39

 

 

1,000

 

 

1,089,630

 

New York Liberty Development Corp., Refunding RB,
Second Priority, Bank of America Tower at One
Bryant Park Project, 6.38%, 7/15/49

 

 

325

 

 

348,290

 

Triborough Bridge & Tunnel Authority, RB, General,
Series A-2, 5.38%, 11/15/38

 

 

840

 

 

932,467

 

 

 

 

 

 



 

 

 

 

 

 

 

3,359,786

 









North Carolina — 2.3%

 

 

 

 

 

 

 

North Carolina Capital Facilities Finance Agency, RB,
Duke Energy Carolinas, Series B, 4.38%, 10/01/31 (a)

 

 

1,200

 

 

1,211,664

 









Pennsylvania — 2.7%

 

 

 

 

 

 

 

Pennsylvania Economic Development Financing
Authority, RB, American Water Co. Project, 6.20%,
4/01/39

 

 

300

 

 

331,917

 

Pennsylvania Turnpike Commission, RB:

 

 

 

 

 

 

 

Sub-Series B, 5.25%, 6/01/39

 

 

425

 

 

448,757

 

Sub-Series C (AGC), 6.25%, 6/01/38

 

 

500

 

 

595,750

 

 

 

 

 

 



 

 

 

 

 

 

 

1,376,424

 









Texas — 10.3%

 

 

 

 

 

 

 

City of Houston Texas, RB, Senior Lien, Series A, 5.50%,
7/01/39

 

 

315

 

 

344,493

 

Conroe ISD Texas, GO, School Building, Series A, 5.75%,
2/15/35

 

 

470

 

 

521,601

 

Harris County Health Facilities Development Corp.,
Refunding RB, Memorial Hermann Healthcare System,
Series B, 7.13%, 12/01/31

 

 

250

 

 

290,113

 

Lower Colorado River Authority, RB, 5.75%, 5/15/28

 

 

450

 

 

488,061

 

North Texas Tollway Authority, RB, System, First Tier,
Series K-1 (AGC), 5.75%, 1/01/38

 

 

500

 

 

555,100

 

Tarrant County Cultural Education Facilities
Finance Corp., RB:

 

 

 

 

 

 

 

Ascension Health Senior Credit Group,
5.00%, 11/15/29

 

 

875

 

 

919,748

 

Scott & White Healthcare, 6.00%, 8/15/45

 

 

1,020

 

 

1,100,029

 

Texas Private Activity Bond Surface Transportation Corp.,
RB, Senior Lien, Note Mobility, 6.88%, 12/31/39

 

 

1,000

 

 

1,093,880

 

 

 

 

 

 



 

 

 

 

 

 

 

5,313,025

 









Utah — 1.3%

 

 

 

 

 

 

 

City of Riverton Utah, RB, IHC Health Services Inc.,
5.00%, 8/15/41

 

 

640

 

 

668,154

 









Virginia — 1.7%

 

 

 

 

 

 

 

Virginia Public School Authority, RB, School Financing,
6.50%, 12/01/35

 

 

750

 

 

887,542

 









West Virginia — 1.1%

 

 

 

 

 

 

 

West Virginia EDA, Refunding RB, Appalachian Power Co.,
Amos Project, Series A, 5.38%, 12/01/38 (g)

 

 

580

 

 

592,099

 









 

 

 

 

 

 

 

 

Municipal Bonds

 

Par  
(000)

 

Value

 









Wyoming — 1.4%

 

 

 

 

 

 

 

County of Sweetwater Wyoming, Refunding RB, Idaho
Power Co. Project, 5.25%, 7/15/26

 

$

655

 

$

713,118

 









Total Municipal Bonds — 101.6%

 

 

 

 

 

52,550,207

 









 

 

 

 

 

 

 

 


 

 

 

 

 

 

 

 

 

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (h)

 

 

 

 

 

 

 









California — 19.3%

 

 

 

 

 

 

 

California Educational Facilities Authority, RB, University
of Southern California, Series A, 5.25%, 10/01/39

 

 

1,005

 

 

1,102,636

 

Grossmont Union High School District, GO, Election of
2008, Series B, 5.00%, 8/01/40

 

 

1,300

 

 

1,346,228

 

Los Angeles Community College District California, GO,
Election of 2008:

 

 

 

 

 

 

 

Series A, 6.00%, 8/01/33

 

 

2,079

 

 

2,406,989

 

Series C, 5.25%, 8/01/39

 

 

1,410

 

 

1,532,599

 

Los Angeles Unified School District California, GO,
Series I, 5.00%, 1/01/34

 

 

200

 

 

209,888

 

San Diego Public Facilities Financing Authority,
Refunding RB, Series B, 5.50%, 8/01/39

 

 

2,234

 

 

2,465,832

 

University of California, RB, Series O, 5.75%, 5/15/34

 

 

810

 

 

937,802

 

 

 

 

 

 



 

 

 

 

 

 

 

10,001,974

 









District of Columbia — 3.6%

 

 

 

 

 

 

 

District of Columbia, RB, Series A, 5.50%, 12/01/30

 

 

735

 

 

860,398

 

District of Columbia Water & Sewer Authority, RB,
Series A, 5.50%, 10/01/39

 

 

899

 

 

991,788

 

 

 

 

 

 



 

 

 

 

 

 

 

1,852,186

 









Florida — 6.9%

 

 

 

 

 

 

 

Jacksonville Economic Development Commission, RB,
Mayo Clinic Jacksonville, Series B, 5.50%, 11/15/36

 

 

3,510

 

 

3,594,977

 









Illinois — 7.7%

 

 

 

 

 

 

 

Illinois Finance Authority, RB, University of Chicago,
Series B, 6.25%, 7/01/38

 

 

1,500

 

 

1,780,395

 

Illinois State Toll Highway Authority, RB, Series B, 5.50%,
1/01/33

 

 

1,999

 

 

2,227,553

 

 

 

 

 

 



 

 

 

 

 

 

 

4,007,948

 









Nevada — 3.3%

 

 

 

 

 

 

 

Clark County Water Reclamation District, GO, Limited
Tax, 6.00%, 7/01/38

 

 

1,500

 

 

1,716,210

 









New Hampshire — 1.3%

 

 

 

 

 

 

 

New Hampshire Health & Education Facilities Authority,
Refunding RB, Dartmouth College, 5.25%, 6/01/39

 

 

585

 

 

651,924

 









New Jersey — 2.1%

 

 

 

 

 

 

 

New Jersey Transportation Trust Fund Authority, RB,
Transportation System, Series A (AGM), 5.00%,
12/15/32

 

 

1,000

 

 

1,065,230

 









New York — 6.0%

 

 

 

 

 

 

 

New York City Municipal Water Finance Authority, RB:

 

 

 

 

 

 

 

Fiscal 2009, Series A, 5.75%, 6/15/40

 

 

750

 

 

863,391

 

Series FF-2, 5.50%, 6/15/40

 

 

990

 

 

1,126,316

 

New York State Dormitory Authority, ERB, Series B,
5.25%, 3/15/38

 

 

1,000

 

 

1,104,870

 

 

 

 

 

 



 

 

 

 

 

 

 

3,094,577

 









Ohio — 1.7%

 

 

 

 

 

 

 

County of Allen Ohio, Refunding RB, Catholic Healthcare,
Series A, 5.25%, 6/01/38

 

 

840

 

 

882,454

 









South Carolina — 2.2%

 

 

 

 

 

 

 

South Carolina State Public Service Authority, RB,
Santee Cooper, Series A, 5.50%, 1/01/38

 

 

1,005

 

 

1,122,203

 










 

 

 

 

See Notes to Financial Statements.

 





24

ANNUAL REPORT

AUGUST 31, 2010

 




 

 


 

 

Schedule of Investments (concluded)

BlackRock Municipal Bond Investment Trust (BIE)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (h)

 

Par  
(000)

 

Value

 









Texas — 5.3%

 

 

 

 

 

 

 

City of San Antonio Texas, Refunding RB, Series A,
5.25%, 2/01/31

 

$

1,050

 

$

1,176,181

 

Harris County Cultural Education Facilities Finance Corp.,
RB, Hospital, Texas Children’s Hospital Project, 5.50%,
10/01/39

 

 

1,450

 

 

1,545,947

 

 

 

 

 

 



 

 

 

 

 

 

 

2,722,128

 









Virginia — 1.0%

 

 

 

 

 

 

 

Fairfax County IDA Virginia, Refunding RB, Health Care,
Inova Health System, Series A, 5.50%, 5/15/35

 

 

460

 

 

502,872

 









Wisconsin — 1.8%

 

 

 

 

 

 

 

Wisconsin Health & Educational Facilities Authority,
Refunding RB, Froedtert & Community Health Inc.,
5.25%, 4/01/39

 

 

890

 

 

933,618

 









Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 62.2%

 

 

 

 

 

32,148,301

 









Total Long-Term Investments
(Cost — $78,906,667) — 163.8%

 

 

 

 

 

84,698,508

 









 

 

 

 

 

 

 

 


 

 

 

 

 

 

 

 

Short-Term Securities

 

Shares

 

 

 

 









FFI Institutional Tax-Exempt Fund, 0.22% (i)(j)

 

 

1,698,254

 

 

1,698,254

 









Total Short-Term Securities
(Cost — $1,698,254) — 3.3%

 

 

 

 

 

1,698,254

 









Total Investments (Cost — $80,604,921*) — 167.1%

 

 

 

 

 

86,396,762

 

Liabilities in Excess of Other Assets — (1.1)%

 

 

 

 

 

(553,426

)

Liability for Trust Certificates, Including Interest
Expense and Fees Payable — (31.5)%

 

 

 

 

 

(16,284,433

)

Preferred Shares, at Redemption Value — (34.5)%

 

 

 

 

 

(17,851,341

)

 

 

 

 

 



 

Net Assets Applicable to Common Shares — 100.0%

 

 

 

 

$

51,707,562

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 










 

 

*

The cost and unrealized appreciation (depreciation) of investments as of August 31, 2010, as computed for federal income tax purposes, were as follows:


 

 

 

 

 

Aggregate cost

 

$

64,524,891

 

 

 



 

Gross unrealized appreciation

 

$

6,193,653

 

Gross unrealized depreciation

 

 

(597,614

)

 

 



 

Net unrealized appreciation

 

$

5,596,039

 

 

 



 


 

 

(a)

When-issued security. Unsettled when-issued transactions were as follows:


 

 

 

 

 

 

 

 







Counterparty

 

Value

 

Unrealized
Appreciation

 







Barclays Capital

 

$

477,699

 

$

12,699

 

Wells Fargo Bank

 

$

1,211,664

 

$

11,664

 










 

 

(b)

Represents a zero-coupon bond. Rate shown reflects the current yield as of report date.

 

 

(c)

Issuer filed for bankruptcy and/or is in default of interest payments.

 

 

(d)

Non-income producing security.

 

 

(e)

Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration to qualified institutional investors.

 

 

(f)

Security represents a beneficial interest in a trust. The collateral deposited into the trust is federally tax-exempt revenue bonds issued by various state or local governments, or their respective agencies or authorities. The security is subject to remarketing prior to its stated maturity.

 

 

(g)

Variable rate security. Rate shown is as of report date.

 

 

(h)

Securities represent bonds transferred to a tender option bond trust in exchange for which the Trust acquired residual interest certificates. These securities serve as collateral in a financing transaction. See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to tender option bond trusts.

 

 

(i)

Investments in companies considered to be an affiliate of the Trust during the year, for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:


 

 

 

 

 

 

 

 

 

 

 

 

 

 















Affiliate

 

Shares Held at
August 31,
2009

 

Net
Activity

 

Shares Held at
August 31,
2010

 

Income

 











CMA Florida Municipal Money Fund

 

 

2

 

 

(2

)

 

 

 

 

FFI Institutional Tax-Exempt Fund

 

 

 

 

1,698,254

 

 

1,698,254

 

$

3,755

 
















 

 

 

(j)

Represents the current yield as of report date.

 

 

 

Fair Value Measurements — Various inputs are used in determining the fair value of investments, which are as follows:

 

 

 

 

Level 1 — price quotations in active markets/exchanges for identical assets and liabilities

 

 

 

 

Level 2 — other observable inputs (including, but not limited to: quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs)

 

 

 

 

Level 3 — unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the Trust’s own assumptions used in determining the fair value of investments)

 

 

 

The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. For information about the Trust’s policy regarding valuation of investments and other significant accounting policies, please refer to Note 1 of the Notes to Financial Statements.

 

 

The following table summarizes the inputs used as of August 31, 2010 in determining the fair valuation of the Trust’s investments:


 

 

 

 

 

 

 

 

 

 

 

 

 

 















Valuation Inputs

 

Level 1

 

Level 2

 

Level 3

 

Total

 











Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments in Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-Term Investments1

 

 

 

$

84,698,508

 

 

 

$

84,698,508

 

Short-Term Securities

 

$

1,698,254

 

 

 

 

 

 

1,698,254

 

 

 













Total

 

$

1,698,254

 

$

84,698,508

 

 

 

$

86,396,762

 

 

 














 

 

 

 

1

See above Schedule of Investments for values in each state or political subdivision.


 

 

 

 

See Notes to Financial Statements.

 

 





 

ANNUAL REPORT

AUGUST 31, 2010

25




 

 


 

 

Schedule of Investments August 31, 2010

BlackRock Municipal Income Trust II (BLE)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par  
(000)

 

Value

 









Arizona — 4.6%

 

 

 

 

 

 

 

Maricopa County Pollution Control Corp., Refunding RB,
Southern California Edison Co., Series A, 5.00%,
6/01/35

 

$

1,870

 

$

1,932,570

 

Pima County IDA, RB, American Charter Schools
Foundation, Series A, 5.63%, 7/01/38

 

 

1,000

 

 

978,990

 

Pima County IDA, Refunding IDRB, Tucson Electric
Power, 5.75%, 9/01/29

 

 

1,210

 

 

1,251,333

 

Salt River Project Agricultural Improvement & Power
District, RB, Series A, 5.00%, 1/01/38

 

 

2,135

 

 

2,301,786

 

Salt Verde Financial Corp., RB, Senior:

 

 

 

 

 

 

 

5.00%, 12/01/32

 

 

5,635

 

 

5,436,592

 

5.00%, 12/01/37

 

 

3,990

 

 

3,790,580

 

 

 

 

 

 



 

 

 

 

 

 

 

15,691,851

 









California — 20.3%

 

 

 

 

 

 

 

Bay Area Toll Authority, Refunding RB, San Francisco
Bay Area, Series F-1, 5.63%, 4/01/44

 

 

2,480

 

 

2,789,430

 

California County Tobacco Securitization Agency, RB,
CAB, Stanislaus, Sub-Series C, 6.30%, 6/01/55 (a)

 

 

9,710

 

 

120,695

 

California HFA, RB, AMT, Home Mortgage:

 

 

 

 

 

 

 

Series G, 5.50%, 8/01/42

 

 

8,105

 

 

8,017,709

 

Series K, 5.50%, 2/01/42

 

 

2,860

 

 

2,929,012

 

California State Public Works Board, RB, Various Capital
Projects, Sub-Series I-1, 6.38%, 11/01/34

 

 

1,280

 

 

1,416,486

 

California Statewide Communities Development
Authority, RB, Health Facility, Memorial Health
Services, Series A, 5.50%, 10/01/33

 

 

5,000

 

 

5,151,550

 

Los Angeles Department of Airports, RB, Series A,
5.25%, 5/15/39

 

 

860

 

 

918,110

 

Los Angeles Department of Airports, Refunding RB,
Senior, Los Angeles International Airport, Series A,
5.00%, 5/15/40

 

 

6,500

 

 

6,794,515

 

Los Angeles Unified School District California, GO:

 

 

 

 

 

 

 

Series D, 5.00%, 7/01/27

 

 

2,375

 

 

2,598,226

 

Series I, 5.00%, 7/01/26

 

 

1,250

 

 

1,378,363

 

Series I, 5.00%, 7/01/27

 

 

1,750

 

 

1,914,482

 

San Francisco City & County Public Utilities
Commission, RB, Series B, 5.00%, 11/01/39

 

 

10,340

 

 

11,126,460

 

San Francisco City & County Redevelopment Agency,
Special Tax Bonds, District No. 6, Mission Bay South
Public Improvements, 6.63%, 8/01/27

 

 

3,120

 

 

3,167,549

 

State of California, GO, Various Purpose:

 

 

 

 

 

 

 

6.00%, 3/01/33

 

 

2,760

 

 

3,145,876

 

6.50%, 4/01/33

 

 

10,670

 

 

12,506,734

 

University of California, RB, Limited Project, Series B,
4.75%, 5/15/38

 

 

5,095

 

 

5,170,712

 

 

 

 

 

 



 

 

 

 

 

 

 

69,145,909

 









Colorado — 2.3%

 

 

 

 

 

 

 

City of Colorado Springs Colorado, RB, Subordinate
Lien, Improvement, Series C (AGM), 5.00%,
11/15/45

 

 

1,375

 

 

1,438,305

 

Colorado Health Facilities Authority, Refunding RB,
Series A:

 

 

 

 

 

 

 

Catholic Healthcare, 5.50%, 7/01/34

 

 

2,330

 

 

2,542,496

 

Sisters of Leavenworth, 5.00%, 1/01/40

 

 

2,400

 

 

2,468,352

 

Park Creek Metropolitan District Colorado,
Refunding RB, Senior, Limited Tax, Property Tax,
5.50%, 12/01/37

 

 

1,375

 

 

1,382,219

 

 

 

 

 

 



 

 

 

 

 

 

 

7,831,372

 









Connecticut — 0.5%

 

 

 

 

 

 

 

Connecticut State Health & Educational Facility
Authority, RB, Ascension Health Senior Credit,
5.00%, 11/15/40

 

 

1,505

 

 

1,583,124

 









 

 

 

 

 

 

 

 

Municipal Bonds

 

Par  
(000)

 

Value

 









District of Columbia — 6.3%

 

 

 

 

 

 

 

District of Columbia, Refunding RB, Friendship Public
Charter School Inc. (ACA), 5.25%, 6/01/33

 

$

1,265

 

$

1,150,872

 

District of Columbia Tobacco Settlement
Financing Corp., Refunding RB, Asset-Backed:

 

 

 

 

 

 

 

6.50%, 5/15/33

 

 

7,500

 

 

7,215,525

 

6.75%, 5/15/40

 

 

11,500

 

 

11,409,495

 

Metropolitan Washington Airports Authority, RB,
First Senior Lien, Series A:

 

 

 

 

 

 

 

5.00%, 10/01/39

 

 

550

 

 

579,524

 

5.25%, 10/01/44

 

 

865

 

 

924,209

 

 

 

 

 

 



 

 

 

 

 

 

 

21,279,625

 









Florida — 5.9%

 

 

 

 

 

 

 

City of Leesburg Florida, RB, Leesburg Regional Medical
Center Project, 5.50%, 7/01/32

 

 

1,470

 

 

1,471,147

 

County of Miami-Dade Florida, RB, Miami International
Airport, Series A, AMT (AGC), 5.25%, 10/01/38

 

 

2,855

 

 

2,930,486

 

County of Miami-Dade Florida, Refunding RB, Miami
International Airport, Series A-1, 5.38%, 10/01/41

 

 

1,255

 

 

1,312,090

 

County of Orange Florida, Refunding RB (Syncora),
4.75%, 10/01/32

 

 

905

 

 

917,851

 

Live Oak Community Development District No. 1,
Special Assessment Bonds, Series A, 6.30%,
5/01/34

 

 

3,115

 

 

3,203,715

 

Miami Beach Health Facilities Authority, RB, Mount
Sinai Medical Center of Florida, 6.75%, 11/15/21

 

 

4,145

 

 

4,346,240

 

Stevens Plantation Community Development District,
Special Assessment Bonds, Series A, 7.10%,
5/01/35

 

 

1,960

 

 

1,634,777

 

Sumter County IDA Florida, RB, North Sumter Utility Co.,
LLC Project, AMT, 6.90%, 10/01/34

 

 

4,270

 

 

4,271,025

 

 

 

 

 

 



 

 

 

 

 

 

 

20,087,331

 









Georgia — 0.3%

 

 

 

 

 

 

 

De Kalb Private Hospital Authority, Refunding RB,
Children’s Healthcare, 5.25%, 11/15/39

 

 

915

 

 

966,899

 









Guam — 0.8%

 

 

 

 

 

 

 

Territory of Guam, GO, Series A:

 

 

 

 

 

 

 

6.00%, 11/15/19

 

 

695

 

 

727,693

 

6.75%, 11/15/29

 

 

995

 

 

1,092,082

 

7.00%, 11/15/39

 

 

680

 

 

758,397

 

 

 

 

 

 



 

 

 

 

 

 

 

2,578,172

 









Illinois — 6.1%

 

 

 

 

 

 

 

Illinois Finance Authority, RB, MJH Education
Assistance IV LLC, Sub-Series B, 5.38%,
6/01/35 (b)(c)

 

 

900

 

 

243,036

 

Illinois Finance Authority, Refunding RB:

 

 

 

 

 

 

 

Central DuPage Health, Series B, 5.50%,
11/01/39

 

 

1,750

 

 

1,863,908

 

Friendship Village Schaumburg, Series A, 5.63%,
2/15/37

 

 

455

 

 

378,050

 

OSF Healthcare System, Series A, 6.00%, 5/15/39

 

 

1,430

 

 

1,490,732

 

Illinois Sports Facilities Authority, RB, State Tax
Supported (AMBAC), 5.50%, 6/15/30

 

 

15,000

 

 

16,013,700

 

State of Illinois, RB, Build Illinois, Series B, 5.25%,
6/15/34

 

 

685

 

 

724,456

 

 

 

 

 

 



 

 

 

 

 

 

 

20,713,882

 










 

 

 

 

See Notes to Financial Statements.

 





26

ANNUAL REPORT

AUGUST 31, 2010

 




 

 


 

 

Schedule of Investments (continued)

BlackRock Municipal Income Trust II (BLE)
(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par  
(000)

 

Value

 









Indiana — 2.4%

 

 

 

 

 

 

 

Indiana Finance Authority, RB, Sisters of St. Francis
Health, 5.25%, 11/01/39

 

$

915

 

$

955,534

 

Indiana Health Facility Financing Authority,
Refunding RB:

 

 

 

 

 

 

 

Ascension Health, Series F, 5.38%, 11/15/25

 

 

2,095

 

 

2,185,148

 

Methodist Hospital Inc., 5.38%, 9/15/22

 

 

3,675

 

 

3,590,622

 

Indiana Municipal Power Agency, RB, Series B, 6.00%,
1/01/39

 

 

1,200

 

 

1,331,772

 

 

 

 

 

 



 

 

 

 

 

 

 

8,063,076

 









Kansas — 0.5%

 

 

 

 

 

 

 

Kansas Development Finance Authority, Refunding RB,
Sisters of Leavenworth, Series A, 5.00%, 1/01/40

 

 

1,820

 

 

1,878,804

 









Kentucky — 0.3%

 

 

 

 

 

 

 

Kentucky Economic Development Finance Authority,
Refunding RB, Owensboro Medical Health System,
Series A, 6.38%, 6/01/40

 

 

1,105

 

 

1,181,400

 









Maryland — 0.4%

 

 

 

 

 

 

 

Maryland EDC, RB, Transportation Facilities Project,
Series A, 5.75%, 6/01/35

 

 

475

 

 

497,330

 

Maryland Health & Higher Educational Facilities
Authority, RB, Union Hospital of Cecil County Issue,
5.63%, 7/01/32

 

 

1,000

 

 

1,016,350

 

 

 

 

 

 



 

 

 

 

 

 

 

1,513,680

 









Massachusetts — 0.6%

 

 

 

 

 

 

 

Massachusetts Health & Educational Facilities Authority,
Refunding RB, Partners Healthcare, Series J1, 5.00%,
7/01/39

 

 

1,955

 

 

2,018,283

 









Michigan — 0.7%

 

 

 

 

 

 

 

Michigan State Hospital Finance Authority,
Refunding RB, Henry Ford Health System, Series A,
5.25%, 11/15/46

 

 

2,305

 

 

2,234,421

 









Missouri — 1.7%

 

 

 

 

 

 

 

370/Missouri Bottom Road/Taussig Road Transportation
Development District, RB, 7.20%, 5/01/33

 

 

6,000

 

 

5,964,660

 









Multi-State — 3.9%

 

 

 

 

 

 

 

Centerline Equity Issuer Trust (d)(e):

 

 

 

 

 

 

 

5.75%, 5/15/15

 

 

1,000

 

 

1,060,780

 

6.00%, 5/15/15

 

 

5,000

 

 

5,285,900

 

6.00%, 5/15/19

 

 

3,500

 

 

3,773,035

 

6.30%, 5/15/19

 

 

3,000

 

 

3,246,450

 

 

 

 

 

 



 

 

 

 

 

 

 

13,366,165

 









Nebraska — 0.9%

 

 

 

 

 

 

 

Lancaster County Hospital Authority No. 1, RB,
Immanuel Obligation Group, 5.63%, 1/01/40

 

 

1,245

 

 

1,292,024

 

Sarpy County Hospital Authority No. 1, RB, Immanuel
Obligation Group, 5.63%, 1/01/40

 

 

1,635

 

 

1,685,734

 

 

 

 

 

 



 

 

 

 

 

 

 

2,977,758

 









Nevada — 0.7%

 

 

 

 

 

 

 

County of Clark Nevada, Refunding RB, Alexander
Dawson School Nevada Project, 5.00%, 5/15/29

 

 

2,465

 

 

2,510,109

 









New Jersey — 11.1%

 

 

 

 

 

 

 

New Jersey EDA, RB:

 

 

 

 

 

 

 

Cigarette Tax, 5.75%, 6/15/34

 

 

3,810

 

 

3,751,402

 

Cigarette Tax (Radian), 5.50%, 6/15/31

 

 

4,825

 

 

4,744,809

 

Continental Airlines Inc. Project, AMT, 7.20%,
11/15/30 (f)

 

 

10,100

 

 

10,166,559

 

Kapkowski Road Landfill Project, Series 1998B,
AMT, 6.50%, 4/01/31

 

 

10,000

 

 

10,752,600

 

New Jersey EDA, Special Assessment Bonds, Refunding,
Kapkowski Road Landfill Project, 6.50%, 4/01/28

 

 

7,475

 

 

8,386,950

 

 

 

 

 

 



 

 

 

 

 

 

 

37,802,320

 










 

 

 

 

 

 

 

 

Municipal Bonds

 

Par  
(000)

 

Value

 









New Mexico — 1.8%

 

 

 

 

 

 

 

New Mexico Income Housing Authority, RB, Villa Del Oso
Apartments Project, Series A, 6.00%, 1/01/13 (g)

 

$

5,200

 

$

5,968,040

 









New York — 3.2%

 

 

 

 

 

 

 

Albany Industrial Development Agency, RB, New
Covenant Charter School Project, Series A, 7.00%,
5/01/35 (b)(c)

 

 

985

 

 

394,020

 

New York City Industrial Development Agency, RB,
American Airlines Inc., JFK International Airport, AMT,
7.75%, 8/01/31 (f)

 

 

6,700

 

 

7,050,343

 

New York Liberty Development Corp., Refunding RB,
Second Priority, Bank of America Tower at One Bryant
Park Project, 6.38%, 7/15/49

 

 

1,335

 

 

1,430,666

 

Port Authority of New York & New Jersey, RB, Continental
Airlines Inc. and Eastern Air Lines Inc. Project,
LaGuardia, AMT, 9.00%, 12/01/10

 

 

2,075

 

 

2,078,776

 

 

 

 

 

 



 

 

 

 

 

 

 

10,953,805

 









North Carolina — 3.5%

 

 

 

 

 

 

 

Gaston County Industrial Facilities & Pollution Control
Financing Authority North Carolina, RB, Exempt
Facilities, National Gypsum Co. Project, AMT, 5.75%,
8/01/35

 

 

7,500

 

 

6,047,475

 

North Carolina Capital Facilities Finance Agency, RB,
Duke Energy Carolinas, Series B, 4.38%,
10/01/31 (h)

 

 

1,760

 

 

1,777,107

 

North Carolina Capital Facilities Finance Agency,
Refunding RB, Duke Energy Carolinas, Series B,
4.63%, 11/01/40 (h)

 

 

1,760

 

 

1,765,562

 

North Carolina Medical Care Commission, RB, Duke
University Health System, Series A:

 

 

 

 

 

 

 

5.00%, 6/01/39

 

 

685

 

 

718,599

 

5.00%, 6/01/42

 

 

1,525

 

 

1,594,143

 

 

 

 

 

 



 

 

 

 

 

 

 

11,902,886

 









Ohio — 2.3%

 

 

 

 

 

 

 

Buckeye Tobacco Settlement Financing Authority, RB,
Asset-Backed, Senior Series A-2, 6.50%, 6/01/47

 

 

1,190

 

 

949,191

 

County of Allen Ohio, Refunding RB, Catholic Healthcare,
Series A, 5.25%, 6/01/38

 

 

3,405

 

 

3,577,089

 

County of Montgomery Ohio, Refunding RB, Catholic
Healthcare, Series A, 5.00%, 5/01/39

 

 

3,025

 

 

3,194,612

 

 

 

 

 

 



 

 

 

 

 

 

 

7,720,892

 









Oklahoma — 1.2%

 

 

 

 

 

 

 

Tulsa Airports Improvement Trust, RB, Series A,
Mandatory Put Bonds, AMT, 7.75%, 6/01/35 (f)

 

 

3,925

 

 

4,023,753

 









Pennsylvania — 5.2%

 

 

 

 

 

 

 

Allegheny County Hospital Development Authority,
Refunding RB, Health System, West Penn, Series A,
5.38%, 11/15/40

 

 

2,765

 

 

2,097,640

 

Pennsylvania Economic Development Financing
Authority, RB:

 

 

 

 

 

 

 

Amtrak Project, Series A, AMT, 6.38%, 11/01/41

 

 

5,175

 

 

5,262,509

 

Aqua Pennsylvania Inc. Project, 5.00%, 11/15/40

 

 

2,065

 

 

2,177,006

 

Reliant Energy, Series A, AMT, 6.75%, 12/01/36

 

 

6,130

 

 

6,355,645

 

Pennsylvania Turnpike Commission, RB, Sub-Series D,
5.13%, 12/01/40

 

 

1,700

 

 

1,783,487

 

 

 

 

 

 



 

 

 

 

 

 

 

17,676,287

 










 

 

 

 

See Notes to Financial Statements.


 

ANNUAL REPORT

AUGUST 31, 2010

27




 

 


 

 

Schedule of Investments (continued)

BlackRock Municipal Income Trust II (BLE)
(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par  
(000)

 

Value

 









Puerto Rico — 7.9%

 

 

 

 

 

 

 

Commonwealth of Puerto Rico, GO, Refunding, Public
Improvement, Series C, 6.00%, 7/01/39

 

$

3,220

 

$

3,488,065

 

Puerto Rico Sales Tax Financing Corp., RB:

 

 

 

 

 

 

 

CAB, Series A, 6.48%, 8/01/31 (a)

 

 

11,700

 

 

3,439,215

 

CAB, Series A, 6.55%, 8/01/32 (a)

 

 

8,600

 

 

2,345,994

 

CAB, Series A, 6.57%, 8/01/33 (a)

 

 

13,600

 

 

3,453,176

 

CAB, Series A, 6.60%, 8/01/34 (a)

 

 

5,500

 

 

1,309,605

 

CAB, Series A, 6.61%, 8/01/35 (a)

 

 

14,055

 

 

3,137,357

 

CAB, Series A, 6.63%, 8/01/36 (a)

 

 

12,875

 

 

2,685,725

 

First Sub-Series A, 6.50%, 8/01/44

 

 

6,100

 

 

6,920,511

 

 

 

 

 

 



 

 

 

 

 

 

 

26,779,648

 









South Carolina — 2.6%

 

 

 

 

 

 

 

County of Greenwood South Carolina, RB, Facilities,
Self Memorial Hospital:

 

 

 

 

 

 

 

5.50%, 10/01/26

 

 

2,280

 

 

2,302,116

 

5.50%, 10/01/31

 

 

3,250

 

 

3,273,237

 

South Carolina Jobs, EDA, Refunding RB:

 

 

 

 

 

 

 

Palmetto Health Alliance, Series A, 6.25%, 8/01/31

 

 

2,640

 

 

2,729,126

 

Palmetto Health, Series C, 6.88%, 8/01/13 (g)

 

 

550

 

 

647,895

 

 

 

 

 

 



 

 

 

 

 

 

 

8,952,374

 









Tennessee — 3.8%

 

 

 

 

 

 

 

Knox County Health Educational & Housing Facilities
Board Tennessee, Refunding RB, CAB, Series A (AGM),
5.77%, 1/01/21 (a)

 

 

20,405

 

 

11,891,830

 

Rutherford County Health & Educational Facilities Board,
RB, Ascension Health Senior Credit Group, 5.00%,
11/15/40

 

 

1,120

 

 

1,175,541

 

 

 

 

 

 



 

 

 

 

 

 

 

13,067,371

 









Texas — 20.2%

 

 

 

 

 

 

 

Brazos River Authority, RB, TXU Electric, Series A, AMT,
8.25%, 10/01/30

 

 

2,400

 

 

1,164,024

 

Brazos River Authority, Refunding RB, TXU Electric Co.
Project, Series C, Mandatory Put Bonds, AMT, 5.75%,
5/01/36 (f)

 

 

1,350

 

 

1,289,250

 

City of Dallas Texas, Refunding RB, 5.00%, 10/01/35

 

 

1,650

 

 

1,805,826

 

City of Houston Texas, RB, Senior Lien, Series A, 5.50%,
7/01/39

 

 

1,675

 

 

1,831,830

 

City of Houston Texas, Refunding RB, Combined,
First Lien, Series A (AGC), 6.00%, 11/15/35

 

 

9,145

 

 

10,757,263

 

Gulf Coast Waste Disposal Authority, Refunding RB,
Series A, AMT, 6.10%, 8/01/24

 

 

10,000

 

 

10,154,400

 

Harris County-Houston Sports Authority, Refunding RB,
Third Lien, Series A-3 (NPFGC), 5.96%, 11/15/36 (a)

 

 

25,375

 

 

4,332,781

 

Lower Colorado River Authority, Refunding RB (NPFGC):

 

 

 

 

 

 

 

5.00%, 5/15/13 (g)

 

 

35

 

 

39,066

 

5.00%, 5/15/13 (g)

 

 

30

 

 

33,537

 

5.00%, 5/15/31

 

 

1,235

 

 

1,264,393

 

Series A, 5.00%, 5/15/13 (g)

 

 

5

 

 

5,590

 

North Texas Tollway Authority, RB, Toll, 2nd Tier, Series F,
6.13%, 1/01/31

 

 

6,790

 

 

7,361,039

 

San Antonio Energy Acquisition Public Facility Corp.,
RB, Gas Supply, 5.50%, 8/01/24

 

 

3,600

 

 

3,872,484

 

Tarrant County Cultural Education Facilities
Finance Corp., RB, Scott & White Healthcare,
6.00%, 8/15/45

 

 

4,410

 

 

4,756,009

 

Texas Private Activity Bond Surface Transportation Corp.,
RB, Senior Lien:

 

 

 

 

 

 

 

LBJ Infrastructure, 7.00%, 6/30/40

 

 

4,710

 

 

5,128,578

 

Note Mobility, 6.88%, 12/31/39

 

 

4,200

 

 

4,594,296

 

Texas State Turnpike Authority, RB (AMBAC):

 

 

 

 

 

 

 

CAB, 6.08%, 8/15/36 (a)

 

 

35,000

 

 

7,014,000

 

CAB, 6.09%, 8/15/37 (a)

 

 

10,000

 

 

1,859,200

 

First Tier, Series A, 5.00%, 8/15/42

 

 

1,575

 

 

1,558,589

 

 

 

 

 

 



 

 

 

 

 

 

 

68,822,155

 










 

 

 

 

 

 

 

 

Municipal Bonds

 

Par  
(000)

 

Value

 







Utah — 1.2%

 

 

 

 

 

 

 

City of Riverton Utah, RB, IHC Health Services Inc.,
5.00%, 8/15/41

 

$

3,960

 

$

4,134,200

 









Virginia — 4.8%

 

 

 

 

 

 

 

City of Norfolk Virginia, Refunding RB,
Series B (AMBAC), 5.50%, 2/01/31

 

 

1,460

 

 

1,461,825

 

Halifax County IDA, Refunding RB, Old Dominion Electric
Co-op Project, AMT (AMBAC), 5.63%, 6/01/28

 

 

9,000

 

 

9,409,410

 

Tobacco Settlement Financing Corp. Virginia,
Refunding RB, Senior Series B1, 5.00%, 6/01/47

 

 

3,205

 

 

2,153,536

 

Virginia HDA, RB, Sub-Series H-1 (NPFGC), 5.35%,
7/01/31

 

 

3,180

 

 

3,208,938

 

 

 

 

 

 



 

 

 

 

 

 

 

16,233,709

 









Wisconsin — 2.0%

 

 

 

 

 

 

 

Wisconsin Health & Educational Facilities Authority, RB:

 

 

 

 

 

 

 

Ascension Health Senior Credit Group, 5.00%,
11/15/30

 

 

1,790

 

 

1,882,919

 

Ascension Health Senior Credit Group, 5.00%,
11/15/33

 

 

910

 

 

945,381

 

Aurora Health Care, 6.40%, 4/15/33

 

 

3,930

 

 

4,044,913

 

 

 

 

 

 



 

 

 

 

 

 

 

6,873,213

 









Wyoming — 1.6%

 

 

 

 

 

 

 

County of Sweetwater Wyoming, Refunding RB, Idaho
Power Co. Project, 5.25%, 7/15/26

 

 

3,355

 

 

3,652,689

 

Wyoming Municipal Power Agency, RB, Series A:

 

 

 

 

 

 

 

5.50%, 1/01/33

 

 

800

 

 

857,184

 

5.50%, 1/01/38

 

 

750

 

 

797,798

 

 

 

 

 

 



 

 

 

 

 

 

 

5,307,671

 









Total Municipal Bonds — 131.6%

 

 

 

 

 

447,804,845

 









 

 

 

 

 

 

 

 









 

 

 

 

 

 

 

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (i)

 

 

 

 

 

 

 









Alabama — 0.8%

 

 

 

 

 

 

 

Alabama Special Care Facilities Financing Authority-
Birmingham, Refunding RB, Ascension Health Senior
Credit, Series C-2, 5.00%, 11/15/36

 

 

2,519

 

 

2,611,238

 









California — 2.3%

 

 

 

 

 

 

 

California Educational Facilities Authority, RB, University
of Southern California, Series A, 5.25%, 10/01/39

 

 

2,850

 

 

3,126,878

 

Los Angeles Community College District California, GO,
Election of 2001, Series A (AGM), 5.00%, 8/01/32

 

 

2,530

 

 

2,679,903

 

San Diego Community College District California, GO,
Election of 2002, 5.25%, 8/01/33

 

 

1,840

 

 

2,016,845

 

 

 

 

 

 



 

 

 

 

 

 

 

7,823,626

 









Colorado — 2.1%

 

 

 

 

 

 

 

Colorado Health Facilities Authority, RB (AGM),
Catholic Health:

 

 

 

 

 

 

 

Series C-3, 5.10%, 10/01/41

 

 

4,230

 

 

4,384,353

 

Series C-7, 5.00%, 9/01/36

 

 

2,710

 

 

2,807,533

 

 

 

 

 

 



 

 

 

 

 

 

 

7,191,886

 









Connecticut — 3.2%

 

 

 

 

 

 

 

Connecticut State Health & Educational Facility
Authority, RB, Yale University:

 

 

 

 

 

 

 

Series T-1, 4.70%, 7/01/29

 

 

5,170

 

 

5,594,870

 

Series X-3, 4.85%, 7/01/37

 

 

5,130

 

 

5,473,505

 

 

 

 

 

 



 

 

 

 

 

 

 

11,068,375

 









Georgia — 1.5%

 

 

 

 

 

 

 

Private Colleges & Universities Authority, Refunding RB,
Emory University, Series C, 5.00%, 9/01/38

 

 

4,638

 

 

4,992,944

 










 

 

 

 

See Notes to Financial Statements.


28

ANNUAL REPORT

AUGUST 31, 2010

 




 

 


 

 

Schedule of Investments (concluded)

BlackRock Municipal Income Trust II (BLE)
(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (i)

 

Par  
(000)

 

Value

 









Massachusetts — 1.0%

 

 

 

 

 

 

 

Massachusetts Water Resources Authority, Refunding
RB, General, Series A, 5.00%, 8/01/41

 

$

3,150

 

$

3,322,903

 









New Hampshire — 0.7%

 

 

 

 

 

 

 

New Hampshire Health & Education Facilities Authority,
Refunding RB, Dartmouth College, 5.25%, 6/01/39

 

 

2,219

 

 

2,473,968

 









New York — 4.3%

 

 

 

 

 

 

 

New York City Municipal Water Finance Authority, RB,
Series FF-2, 5.50%, 6/15/40

 

 

1,710

 

 

1,945,454

 

New York State Dormitory Authority, ERB, Series F,
5.00%, 3/15/35

 

 

9,284

 

 

9,744,536

 

New York State Environmental Facilities Corp., RB,
Revolving Funds, New York City Municipal Water
Project, Series B, 5.00%, 6/15/31

 

 

2,850

 

 

2,923,844

 

 

 

 

 

 



 

 

 

 

 

 

 

14,613,834

 









Virginia — 1.9%

 

 

 

 

 

 

 

University of Virginia, Refunding RB, General, 5.00%,
6/01/40

 

 

5,910

 

 

6,431,557

 









Washington — 3.5%

 

 

 

 

 

 

 

Central Puget Sound Regional Transit Authority, RB,
Series A (AGM), 5.00%, 11/01/32

 

 

3,029

 

 

3,275,214

 

State of Washington, GO, Various Purpose, Series E,
5.00%, 2/01/34

 

 

8,113

 

 

8,833,421

 

 

 

 

 

 



 

 

 

 

 

 

 

12,108,635

 









Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 21.3%

 

 

 

 

 

72,638,966

 









Total Long-Term Investments
(Cost — $500,095,761) — 152.9%

 

 

 

 

 

520,443,811

 









 

 

 

 

 

 

 

 









 

 

 

 

 

 

 

 

Short-Term Securities

 

Shares

 

 

 

 









FFI Institutional Tax-Exempt Fund, 0.22% (j)(k)

 

 

9,440,330

 

 

9,440,330

 









Total Short-Term Securities
(Cost — $9,440,330) — 2.8%

 

 

 

 

 

9,440,330

 









Total Investments (Cost — $509,536,091*) — 155.7%

 

 

 

 

 

529,884,141

 

Other Assets Less Liabilities– 0.3%

 

 

 

 

 

971,932

 

Liability for Trust Certificates, Including Interest
Expense and Fees Payable — (11.5)%

 

 

 

 

 

(39,278,037

)

Preferred Shares, at Redemption Value — (44.5)%

 

 

 

 

 

(151,308,998

)

 

 

 

 

 



 

Net Assets Applicable to Common Shares — 100.0%

 

 

 

 

$

340,269,038

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 










 

 

*

The cost and unrealized appreciation (depreciation) of investments as of August 31, 2010, as computed for federal income tax purposes, were as follows:


 

 

 

 

 

 

 

Aggregate cost

 

$

469,512,336

 

 

 

 



 

 

Gross unrealized appreciation

 

$

27,881,929

 

 

Gross unrealized depreciation

 

 

(6,762,561

)

 

 

 



 

 

Net unrealized appreciation

 

$

21,119,368

 

 

 

 



 


 

 

(a)

Represents a zero-coupon bond. Rate shown reflects the current yield as of report date.

 

 

(b)

Issuer filed for bankruptcy and/or is in default of interest payments.

 

 

(c)

Non-income producing security.

 

 

(d)

Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration to qualified institutional investors.

 

 

(e)

Security represents a beneficial interest in a trust. The collateral deposited into the trust is federally tax-exempt revenue bonds issued by various state or local governments, or their respective agencies or authorities. The security is subject to remarketing prior to its stated maturity.

 

 

(f)

Variable rate security. Rate shown is as of report date.

 

 

(g)

US government securities, held in escrow, are used to pay interest on this security as well as to retire the bond in full at the date indicated, typically at a premium to par.

 

 

(h)

When-issued security. Unsettled when-issued transactions were as follows:


 

 

 

 

 

 

 

 

 

 







 

Counterparty

 

Value

 

Unrealized
Appreciation

 

 









 

Wells Fargo Bank

 

$

3,542,669

 

$

22,669

 

 










 

 

(i)

Securities represent bonds transferred to a tender option bond trust in exchange for which the Trust acquired residual interest certificates. These securities serve as collateral in a financing transaction. See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to tender option bond trusts.

 

 

(j)

Investments in companies considered to be an affiliate of the Trust, during the year, for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:


 

 

 

 

 

 

 

 

 

 

 

 

 

 











Affiliate

 

Shares Held at
August 31,
2009

 

Net
Activity

 

Shares Held at
August 31,
2010

 

Income

 















FFI Institutional Tax-Exempt Fund

 

 

13,805,067

 

 

(4,364,737

)

 

9,440,330

 

$

14,380

 
















 

 

 

(k)

Represents the current yield as of report date.

 

 

 

Fair Value Measurements — Various inputs are used in determining the fair value of investments, which are as follows:

 

 

 

 

Level 1 — price quotations in active markets/exchanges for identical assets and liabilities

 

 

 

 

Level 2 — other observable inputs (including, but not limited to: quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs)

 

 

 

 

Level 3 — unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the Trust’s own assumptions used in determining the fair value of investments)

 

 

 

 

The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. For information about the Trust’s policy regarding valuation of investments and other significant accounting policies, please refer to Note 1 of the Notes to Financial Statements.

 

 

 

 

The following table summarizes the inputs used as of August 31, 2010 in determining the fair valuation of the Trust’s investments:


 

 

 

 

 

 

 

 

 

 

 

 

 

 











Valuation Inputs

 

Level 1

 

Level 2

 

Level 3

 

Total

 











Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments in Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-Term Investments1

 

 

 

$

520,443,811

 

 

 

$

520,443,811

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Short-Term Securities

 

$

9,440,330

 

 

 

 

 

 

9,440,330

 

 

 













Total

 

$

9,440,330

 

$

520,443,811

 

 

 

$

529,884,141

 

 

 














 

 

1

See above Schedule of Investments for values in each state or political subdivision.


 

 

 

 

See Notes to Financial Statements.


 

ANNUAL REPORT

AUGUST 31, 2010

29




 

 


 

 

Schedule of Investments August 31, 2010

BlackRock MuniHoldings Insured Investment Fund (MFL)
(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par  
(000)

 

Value

 









Alabama — 3.2%

 

 

 

 

 

 

 

Birmingham Special Care Facilities Financing Authority,
RB, Children’s Hospital (AGC):

 

 

 

 

 

 

 

6.13%, 6/01/34

 

$

4,980

 

$

5,586,365

 

6.00%, 6/01/39

 

 

10,995

 

 

12,307,803

 

 

 

 

 

 



 

 

 

 

 

 

 

17,894,168

 









Arizona — 2.6%

 

 

 

 

 

 

 

State of Arizona, COP, Department of Administration,
Series A (AGM):

 

 

 

 

 

 

 

5.25%, 10/01/24

 

 

10,260

 

 

11,460,215

 

5.25%, 10/01/28

 

 

2,240

 

 

2,403,766

 

5.00%, 10/01/29

 

 

585

 

 

612,366

 

 

 

 

 

 



 

 

 

 

 

 

 

14,476,347

 









California — 15.1%

 

 

 

 

 

 

 

California State Public Works Board, RB, Various Capital
Projects, Series G-1 (AGC), 5.25%, 10/01/24

 

 

5,000

 

 

5,369,450

 

California State University, RB, Systemwide, Series A
(AGM), 5.00%, 11/01/39

 

 

4,000

 

 

4,167,720

 

County of Sacramento California, RB, Senior Series A
(AGC), 5.50%, 7/01/41

 

 

6,600

 

 

7,103,382

 

Los Angeles Community College District California, GO,
Election of 2001, Series A (NPFGC), 5.00%, 8/01/32

 

 

10,000

 

 

10,580,100

 

Los Angeles Municipal Improvement Corp.,
Refunding RB, Real Property, Series B (AGC), 5.50%,
4/01/39

 

 

2,980

 

 

3,216,523

 

Los Angeles Unified School District California, GO,
Series D, 5.25%, 7/01/25

 

 

3,485

 

 

3,941,988

 

Manteca Financing Authority California, RB, Manteca
Sewer (AGC):

 

 

 

 

 

 

 

5.63%, 12/01/33

 

 

2,450

 

 

2,691,497

 

5.75%, 12/01/36

 

 

3,285

 

 

3,616,161

 

Oxnard Union High School District, GO, Refunding,
Election of 2004, Series A (AGM), 5.00%, 8/01/40

 

 

6,750

 

 

7,066,845

 

San Diego Public Facilities Financing Authority,
Refunding RB, Series B (AGC), 5.38%, 8/01/34

 

 

4,690

 

 

5,158,437

 

San Jacinto Unified School District, GO, Election of
2006 (AGM), 5.25%, 8/01/32

 

 

3,000

 

 

3,148,710

 

State of California, GO, Various Purpose:

 

 

 

 

 

 

 

(AGC), 5.50%, 11/01/39

 

 

15,000

 

 

16,034,100

 

(AGM), 5.00%, 6/01/32

 

 

11,245

 

 

11,601,466

 

 

 

 

 

 



 

 

 

 

 

 

 

83,696,379

 









Colorado — 1.2%

 

 

 

 

 

 

 

Colorado Health Facilities Authority, RB, Hospital,
NCMC Inc. Project, Series B (AGM), 6.00%, 5/15/26

 

 

5,925

 

 

6,849,833

 









District of Columbia — 0.8%

 

 

 

 

 

 

 

District of Columbia, Refunding RB, Georgetown
University, Series D (BHAC), 5.50%, 4/01/36

 

 

1,730

 

 

1,910,180

 

District of Columbia Water & Sewer Authority, RB,
Series A (NPFGC), 5.00%, 10/01/38

 

 

2,545

 

 

2,654,282

 

 

 

 

 

 



 

 

 

 

 

 

 

4,564,462

 









Florida — 23.4%

 

 

 

 

 

 

 

Alachua County School Board, RB (AMBAC), 5.25%,
7/01/29

 

 

1,625

 

 

1,689,399

 

Broward County Educational Facilities Authority, RB,
Educational Facilities, Nova Southeastern University
(AGC), 5.00%, 4/01/31

 

 

4,200

 

 

4,296,264

 

City of Sunrise Florida, Refunding RB (AMBAC), 5.20%,
10/01/22

 

 

2,250

 

 

2,464,943

 

County of Lee Florida, RB, Series A, AMT (AGM), 6.00%,
10/01/29

 

 

19,925

 

 

20,152,145

 


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par  
(000)

 

Value

 









Florida (concluded)

 

 

 

 

 

 

 

County of Miami-Dade Florida, RB, Series A, AMT:

 

 

 

 

 

 

 

(AGM), 5.00%, 10/01/33

 

$

3,505

 

$

3,515,830

 

(AGM), 5.13%, 10/01/35

 

 

10,605

 

 

10,661,631

 

Miami International Airport (AGM), 5.50%,
10/01/41

 

 

11,400

 

 

11,866,944

 

Miami International Airport (NPFGC), 6.00%,
10/01/29

 

 

8,000

 

 

8,090,240

 

County of Osceola Florida, RB, Series A (NPFGC), 5.50%,
10/01/27

 

 

5,560

 

 

5,728,301

 

County of St. John’s Florida, RB (AGM):

 

 

 

 

 

 

 

5.00%, 10/01/31

 

 

3,200

 

 

3,385,472

 

5.00%, 10/01/35

 

 

710

 

 

731,797

 

5.00%, 10/01/37

 

 

5,280

 

 

5,523,144

 

Florida Housing Finance Corp., HRB, Waverly Apartments,
Series C-1, AMT (AGM), 6.30%, 7/01/30

 

 

2,055

 

 

2,098,361

 

Florida Housing Finance Corp., RB, Homeowner
Mortgage, Series 11, AMT (AGM), 5.95%, 1/01/32

 

 

5,640

 

 

5,644,850

 

Florida Housing Finance Corp., Refunding RB, AMT,
Homeowner Mortgage:

 

 

 

 

 

 

 

Series 2 (NPFGC), 5.75%, 7/01/14

 

 

640

 

 

641,350

 

Series 2 (NPFGC), 5.90%, 7/01/29

 

 

6,965

 

 

7,048,719

 

Series 4 (AGM), 6.25%, 7/01/22

 

 

535

 

 

571,059

 

Jacksonville Port Authority, RB, AMT (AGC), 6.00%,
11/01/38

 

 

6,740

 

 

6,941,796

 

Miami-Dade County Housing Finance Authority Florida,
MRB, Marbrisa Apartments Project, Series 2A, AMT
(AGM), 6.00%, 8/01/26

 

 

2,185

 

 

2,230,994

 

Miami-Dade County IDA, RB, Airis Miami II LLC Project,
AMT (AMBAC), 6.00%, 10/15/19

 

 

3,370

 

 

3,329,055

 

St. Lucie West Services District, RB (NPFGC):

 

 

 

 

 

 

 

5.25%, 10/01/34

 

 

1,720

 

 

1,774,816

 

5.00%, 10/01/38

 

 

4,470

 

 

4,548,046

 

St. Lucie West Services District, Refunding RB,
Senior Lien (NPFGC), 6.00%, 10/01/22

 

 

3,250

 

 

3,327,123

 

Village Center Community Development District, RB,
Series A (NPFGC):

 

 

 

 

 

 

 

5.38%, 11/01/34

 

 

10,775

 

 

9,972,262

 

5.13%, 11/01/36

 

 

1,750

 

 

1,544,795

 

Volusia County IDA, RB, Student Housing, Stetson
University Project, Series A (CIFG), 5.00%, 6/01/35

 

 

1,740

 

 

1,577,188

 

 

 

 

 

 



 

 

 

 

 

 

 

129,356,524

 









Georgia — 8.1%

 

 

 

 

 

 

 

Augusta-Richmond County Georgia, RB (AGM), 5.25%,
10/01/39

 

 

4,350

 

 

4,581,289

 

City of Atlanta Georgia, RB, General, Subordinate Lien,
Series C (AGM), 5.00%, 1/01/33

 

 

14,700

 

 

15,038,394

 

County of Fulton Georgia, RB (NPFGC), 5.25%, 1/01/35

 

 

3,825

 

 

4,145,306

 

Georgia Higher Education Facilities Authority, RB, USG
Real Estate III, Series A (AGC), 5.00%, 6/15/38

 

 

4,050

 

 

4,211,878

 

Gwinnett County Hospital Authority, Refunding RB,
Gwinnett Hospital System, Series D (AGM), 5.50%,
7/01/41

 

 

6,445

 

 

6,761,514

 

Metropolitan Atlanta Rapid Transit Authority, RB, Third
Indenture, Series B (AGM), 5.00%, 7/01/34

 

 

9,240

 

 

9,895,578

 

 

 

 

 

 



 

 

 

 

 

 

 

44,633,959

 









Illinois — 11.9%

 

 

 

 

 

 

 

Chicago Board of Education Illinois, GO, Refunding,
Chicago School Reform Board, Series A (NPFGC),
5.50%, 12/01/26

 

 

3,745

 

 

4,420,336

 

Chicago Transit Authority, RB, Federal Transit
Administration Section 5309, Series A (AGC),
6.00%, 6/01/26

 

 

6,315

 

 

7,502,157

 


 

 

 

 

See Notes to Financial Statements.


30

ANNUAL REPORT

AUGUST 31, 2010

 




 

 


 

 

Schedule of Investments (continued)

BlackRock MuniHoldings Insured Investment Fund (MFL)
(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par  
(000)

 

Value

 









Illinois (concluded)

 

 

 

 

 

 

 

City of Chicago Illinois, GO, Refunding, Projects,
Series A (AGM):

 

 

 

 

 

 

 

5.00%, 1/01/28

 

$

4,415

 

$

4,835,087

 

5.00%, 1/01/29

 

 

6,845

 

 

7,428,947

 

5.00%, 1/01/30

 

 

2,730

 

 

2,945,179

 

City of Chicago Illinois, RB, Third Lien:

 

 

 

 

 

 

 

General Airport, Series A (NPFGC), 5.00%,
1/01/33

 

 

5,500

 

 

5,574,085

 

General, Series C (AGM), 5.25%, 1/01/35

 

 

4,905

 

 

5,205,578

 

City of Chicago Illinois, Refunding RB:

 

 

 

 

 

 

 

General, Third Lien, Series C (AGC), 5.25%,
1/01/23

 

 

3,975

 

 

4,504,311

 

Second Lien (NPFGC), 5.50%, 1/01/30

 

 

4,075

 

 

4,699,045

 

Illinois Municipal Electric Agency, RB, Series A (NPFGC),
5.25%, 2/01/35

 

 

5,000

 

 

5,223,800

 

State of Illinois, RB:

 

 

 

 

 

 

 

(AGM), 5.00%, 6/15/27

 

 

3,000

 

 

3,137,370

 

Build Illinois, Series B, 5.25%, 6/15/26

 

 

5,625

 

 

6,255,900

 

Village of Schaumburg Illinois, GO, Series B (NPFGC),
5.00%, 12/01/38

 

 

3,785

 

 

3,892,608

 

 

 

 

 

 



 

 

 

 

 

 

 

65,624,403

 









Indiana — 2.8%

 

 

 

 

 

 

 

Indianapolis Local Public Improvement Bond Bank,
Refunding RB, Waterworks Project, Series A (AGC),
5.50%, 1/01/38

 

 

14,105

 

 

15,707,328

 









Iowa — 1.1%

 

 

 

 

 

 

 

Iowa Finance Authority, Refunding RB, Iowa Health
System (AGC), 5.25%, 2/15/29

 

 

5,500

 

 

6,009,630

 









Kentucky — 1.6%

 

 

 

 

 

 

 

Kentucky Municipal Power Agency, RB, Prairie State
Project, Series A (BHAC), 5.25%, 9/01/42

 

 

4,070

 

 

4,299,060

 

Kentucky State Property & Buildings Commission,
Refunding RB, Project No. 93 (AGC), 5.25%, 2/01/28

 

 

4,000

 

 

4,497,080

 

 

 

 

 

 



 

 

 

 

 

 

 

8,796,140

 









Louisiana — 1.4%

 

 

 

 

 

 

 

Louisiana State Citizens Property Insurance Corp., RB,
Series C-3 (AGC), 6.13%, 6/01/25

 

 

5,475

 

 

6,274,350

 

New Orleans Aviation Board Louisiana, Refunding RB
(AGC), Restructuring GARB:

 

 

 

 

 

 

 

Series A-1, 6.00%, 1/01/23

 

 

500

 

 

588,855

 

Series A-2, 6.00%, 1/01/23

 

 

720

 

 

847,951

 

 

 

 

 

 



 

 

 

 

 

 

 

7,711,156

 









Maine — 1.0%

 

 

 

 

 

 

 

City of Portland Maine, RB, General (AGM), 5.25%,
1/01/35

 

 

5,235

 

 

5,572,291

 









Maryland — 0.8%

 

 

 

 

 

 

 

Maryland Health & Higher Educational Facilities
Authority, Refunding RB, University of Maryland
Medical System:

 

 

 

 

 

 

 

5.00%, 7/01/34

 

 

2,225

 

 

2,298,670

 

5.13%, 7/01/39

 

 

2,225

 

 

2,310,507

 

 

 

 

 

 



 

 

 

 

 

 

 

4,609,177

 









Michigan — 15.2%

 

 

 

 

 

 

 

City of Detroit Michigan, RB:

 

 

 

 

 

 

 

Second Lien, Series B (AGM), 6.25%, 7/01/36

 

 

6,320

 

 

7,069,489

 

Second Lien, Series B (AGM), 7.00%, 7/01/36

 

 

850

 

 

1,001,376

 

Second Lien, Series B (NPFGC), 5.50%, 7/01/29

 

 

7,490

 

 

7,956,852

 

Senior Lien, Series B (AGM), 7.50%, 7/01/33

 

 

6,600

 

 

8,097,144

 

System, Second Lien, Series A (BHAC), 5.50%,
7/01/36

 

 

20,540

 

 

21,756,789

 

City of Detroit Michigan, Refunding RB:

 

 

 

 

 

 

 

Second Lien, Series E (BHAC), 5.75%, 7/01/31

 

 

6,000

 

 

6,564,660

 

Senior Lien, Series C-1 (AGM), 7.00%, 7/01/27

 

 

9,055

 

 

10,842,729

 


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par  
(000)

 

Value

 









Michigan (concluded)

 

 

 

 

 

 

 

Michigan State Building Authority, RB, Facilities Program,
Series H (AGM), 5.00%, 10/15/26

 

$

1,760

 

$

1,912,962

 

Michigan State Building Authority, Refunding RB,
Facilities Program, Series I (AGC):

 

 

 

 

 

 

 

5.25%, 10/15/22

 

 

6,150

 

 

7,068,994

 

5.25%, 10/15/24

 

 

2,755

 

 

3,095,187

 

5.25%, 10/15/25

 

 

1,435

 

 

1,596,423

 

Royal Oak Hospital Finance Authority Michigan,
Refunding RB, William Beaumont Hospital, 8.25%,
9/01/39

 

 

5,780

 

 

7,014,724

 

 

 

 

 

 



 

 

 

 

 

 

 

83,977,329

 









Minnesota — 2.1%

 

 

 

 

 

 

 

City of Minneapolis Minnesota, Refunding RB, Fairview
Health Services, Series B (AGC), 6.50%, 11/15/38

 

 

9,900

 

 

11,391,732

 









Nevada — 5.9%

 

 

 

 

 

 

 

County of Clark Nevada, RB:

 

 

 

 

 

 

 

Las Vegas-McCarran International Airport, Series A
(AGC), 5.25%, 7/01/39

 

 

16,005

 

 

16,779,962

 

Subordinate Lien, Series A-2 (NPFGC), 5.00%,
7/01/36

 

 

15,500

 

 

15,687,550

 

 

 

 

 

 



 

 

 

 

 

 

 

32,467,512

 









New Jersey — 2.2%

 

 

 

 

 

 

 

New Jersey EDA, RB, School Facilities Construction,
Series Z (AGC), 6.00%, 12/15/34

 

 

4,350

 

 

5,038,823

 

New Jersey Health Care Facilities Financing Authority,
RB, Virtua Health (AGC), 5.50%, 7/01/38

 

 

6,500

 

 

7,117,825

 

 

 

 

 

 



 

 

 

 

 

 

 

12,156,648

 









New York — 1.9%

 

 

 

 

 

 

 

New York City Transitional Finance Authority,
Fiscal 2009, RB:

 

 

 

 

 

 

 

Series S-3, 5.25%, 1/15/39

 

 

5,625

 

 

6,129,169

 

Series S-4 (AGC), 5.50%, 1/15/29

 

 

4,000

 

 

4,620,000

 

 

 

 

 

 



 

 

 

 

 

 

 

10,749,169

 









Ohio — 1.5%

 

 

 

 

 

 

 

Ohio Higher Educational Facility Commission,
Refunding RB, Summa Health System, 2010 Project
(AGC), 5.25%, 11/15/40

 

 

7,725

 

 

7,993,444

 









Pennsylvania — 1.7%

 

 

 

 

 

 

 

Pennsylvania Turnpike Commission, Refunding RB,
Sub-Series B-1 (AGM), 5.00%, 12/01/37

 

 

9,000

 

 

9,525,330

 









Puerto Rico — 1.3%

 

 

 

 

 

 

 

Puerto Rico Sales Tax Financing Corp., RB, First
Sub-Series A, 6.38%, 8/01/39

 

 

6,610

 

 

7,439,357

 









South Carolina — 0.3%

 

 

 

 

 

 

 

City of Spartanburg South Carolina, RB, System (AGC),
5.00%, 6/01/39

 

 

1,700

 

 

1,821,771

 









Texas — 19.7%

 

 

 

 

 

 

 

City of Austin Texas, Refunding RB, Series A (AGM):

 

 

 

 

 

 

 

5.00%, 11/15/28

 

 

3,360

 

 

3,725,266

 

5.00%, 11/15/29

 

 

4,255

 

 

4,679,606

 

City of Dallas Texas, Refunding RB (AGC), 5.25%,
8/15/38

 

 

4,000

 

 

4,246,280

 

City of Houston Texas, Refunding RB, Combined,
First Lien, Series A (AGC):

 

 

 

 

 

 

 

6.00%, 11/15/35

 

 

12,700

 

 

14,939,010

 

6.00%, 11/15/36

 

 

9,435

 

 

11,083,011

 

5.38%, 11/15/38

 

 

5,000

 

 

5,563,100

 

County of Bexar Texas, RB, Venue Project, Motor Vehicle
Rental (BHAC), 5.00%, 8/15/39

 

 

4,120

 

 

4,346,559

 

Harris County Health Facilities Development Corp.,
Refunding RB, Memorial Hermann Healthcare System,
Series B, 7.25%, 12/01/35

 

 

1,500

 

 

1,737,810

 


 

 

 

 

See Notes to Financial Statements.


 

ANNUAL REPORT

AUGUST 31, 2010

31




 

 


 

 

Schedule of Investments (continued)

BlackRock MuniHoldings Insured Investment Fund (MFL)
(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par  
(000)

 

Value

 









Texas (concluded)

 

 

 

 

 

 

 

Lower Colorado River Authority, Refunding RB, LCRA
Transmission Services Project (AGC), 5.50%,
5/15/36

 

$

5,325

 

$

5,784,601

 

Lubbock Cooper ISD Texas, GO, School Building (AGC),
5.75%, 2/15/42

 

 

2,300

 

 

2,532,553

 

North Texas Tollway Authority, RB, System, First Tier,
Series K-1 (AGC), 5.75%, 1/01/38

 

 

12,400

 

 

13,766,480

 

North Texas Tollway Authority, Refunding RB, System,
First Tier, Series A:

 

 

 

 

 

 

 

(AGC), 5.75%, 1/01/40

 

 

7,000

 

 

7,682,920

 

(BHAC), 5.75%, 1/01/48

 

 

7,500

 

 

8,204,475

 

(NPFGC), 5.13%, 1/01/28

 

 

17,500

 

 

18,557,000

 

Tarrant County Cultural Education Facilities
Finance Corp., Refunding RB, Christus Health,
Series A (AGC), 6.50%, 7/01/37

 

 

1,770

 

 

1,988,754

 

 

 

 

 

 



 

 

 

 

 

 

 

108,837,425

 









Utah — 1.5%

 

 

 

 

 

 

 

City of Riverton Utah, RB, IHC Health Services Inc.,
5.00%, 8/15/41

 

 

7,795

 

 

8,137,902

 









Virginia — 0.9%

 

 

 

 

 

 

 

Virginia Public School Authority, RB, School Financing,
6.50%, 12/01/35

 

 

4,300

 

 

5,088,577

 









Total Municipal Bonds — 129.2%

 

 

 

 

 

715,087,993

 









 

 

 

 

 

 

 

 









 

 

 

 

 

 

 

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (a)

 

 

 

 

 

 

 









Alabama — 1.2%

 

 

 

 

 

 

 

Mobile Board of Water & Sewer Commissioners, RB
(NPFGC), 5.00%, 1/01/31

 

 

6,500

 

 

6,739,525

 









California — 2.9%

 

 

 

 

 

 

 

California State University, Refunding RB, Systemwide,
Series A (AGM), 5.00%, 11/01/32

 

 

7,960

 

 

8,340,647

 

Los Angeles Unified School District California, GO,
Series I, 5.00%, 1/01/34

 

 

2,400

 

 

2,518,656

 

San Diego Community College District California, GO,
Election of 2002 (AGM), 5.00%, 5/01/30

 

 

5,000

 

 

5,378,100

 

 

 

 

 

 



 

 

 

 

 

 

 

16,237,403

 









District of Columbia — 0.7%

 

 

 

 

 

 

 

District of Columbia Water & Sewer Authority, RB,
Series A, 6.00%, 10/01/35

 

 

3,381

 

 

3,893,806

 









Florida — 5.9%

 

 

 

 

 

 

 

City of Jacksonville Florida, RB, Better Jacksonville
(NPFGC), 5.00%, 10/01/27

 

 

10,000

 

 

10,372,300

 

Hillsborough County Aviation Authority, RB, Series A,
AMT (AGC), 5.50%, 10/01/38

 

 

10,657

 

 

11,115,299

 

Lee County HFA, RB, Multi-County Program, Series A-2,
AMT (Ginnie Mae), 6.00%, 9/01/40

 

 

5,595

 

 

6,297,228

 

Manatee County HFA, RB, Series A, AMT (Ginnie Mae),
5.90%, 9/01/40

 

 

4,253

 

 

4,614,206

 

 

 

 

 

 



 

 

 

 

 

 

 

32,399,033

 









Illinois — 1.5%

 

 

 

 

 

 

 

Chicago Transit Authority, Refunding RB, Federal Transit
Administration Section 5309 (AGM), 5.00%, 6/01/28

 

 

7,737

 

 

8,337,303

 









Indiana — 1.9%

 

 

 

 

 

 

 

Indiana Health & Educational Facilities Financing
Authority, Refunding RB, St. Francis, Series E (AGM),
5.25%, 5/15/41

 

 

9,850

 

 

10,382,688

 










 

 

 

 

 

 

 

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (a)

 

Par  
(000)

 

Value

 









Kentucky — 0.1%

 

 

 

 

 

 

 

Kentucky State Property & Building Commission,
Refunding RB, Project No. 93 (AGC), 5.25%,
2/01/27

 

$

404

 

$

455,575

 









Nevada — 2.7%

 

 

 

 

 

 

 

Clark County Water Reclamation District, GO:

 

 

 

 

 

 

 

Limited Tax, 6.00%, 7/01/38

 

 

8,000

 

 

9,153,120

 

Series B, 5.50%, 7/01/29

 

 

5,008

 

 

5,702,654

 

 

 

 

 

 



 

 

 

 

 

 

 

14,855,774

 









New Jersey — 3.0%

 

 

 

 

 

 

 

New Jersey State Housing & Mortgage Finance Agency,
RB, S/F Housing, Series CC, 5.25%, 10/01/29

 

 

7,532

 

 

7,952,215

 

New Jersey Transportation Trust Fund Authority, RB,
Transportation System, Series A (AGM), 5.00%,
12/15/32

 

 

8,000

 

 

8,521,840

 

 

 

 

 

 



 

 

 

 

 

 

 

16,474,055

 









New York — 3.7%

 

 

 

 

 

 

 

New York City Municipal Water Finance Authority, RB,
Series FF-2, 5.50%, 6/15/40

 

 

4,994

 

 

5,682,775

 

New York State Dormitory Authority, ERB, Series B,
5.25%, 3/15/38

 

 

13,500

 

 

14,915,745

 

 

 

 

 

 



 

 

 

 

 

 

 

20,598,520

 









Texas — 2.4%

 

 

 

 

 

 

 

City of San Antonio Texas, Refunding RB, Series A,
5.25%, 2/01/31

 

 

12,027

 

 

13,475,677

 









Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 26.0%

 

 

 

 

 

143,849,359

 









Total Long-Term Investments
(Cost — $810,453,372) — 155.2%

 

 

 

 

 

858,937,352

 









 

 

 

 

 

 

 

 









 

 

 

 

 

 

 

 

Short-Term Securities

 

Shares

 

 

 

 









FFI Institutional Tax-Exempt Fund, 0.22% (b)(c)

 

 

32,301,054

 

 

32,301,054

 









Total Short-Term Securities
(Cost — $32,301,054) — 5.9%

 

 

 

 

 

32,301,054

 









Total Investments (Cost — $842,754,426*) — 161.1%

 

 

 

 

 

891,238,406

 

Other Assets Less Liabilities — 1.4%

 

 

 

 

 

7,917,946

 

Liability for Trust Certificates, Including Interest
Expense and Fees Payable — (12.9)%

 

 

 

 

 

(71,126,857

)

Preferred Shares, at Redemption Value — (49.6)%

 

 

 

 

 

(274,662,962

)

 

 

 

 

 



 

Net Assets Applicable to Common Shares — 100.0%

 

 

 

 

$

553,366,533

 

 

 

 

 

 



 


 

 

 

 

See Notes to Financial Statements.


32

ANNUAL REPORT

AUGUST 31, 2010

 




 

 


 

 

Schedule of Investments (concluded)

BlackRock MuniHoldings Insured Investment Fund (MFL)


 

 

*

The cost and unrealized appreciation (depreciation) of investments as of August 31, 2010, as computed for federal income tax purposes, were as follows:


 

 

 

 

 

 

 

Aggregate cost

 

$

771,856,944

 

 

 

 



 

 

Gross unrealized appreciation

 

$

49,788,949

 

 

Gross unrealized depreciation

 

 

(1,475,204

)

 

 

 



 

 

Net unrealized appreciation

 

$

48,313,745

 

 

 

 



 


 

 

(a)

Securities represent bonds transferred to a tender option bond trust in exchange for which the Trust acquired residual interest certificates. These securities serve as collateral in a financing transaction. See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to tender option bond trusts.

 

 

(b)

Investments in companies considered to be an affiliate of the Trust during the year, for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:


 

 

 

 

 

 

 

 

 

 

 

 

 

 











Affiliate

 

Shares Held at
August 31,
2009

 

Net
Activity

 

Shares Held at
August 31,
2010

 

Income

 















FFI Institutional Tax-Exempt Fund

 

 

27,005,779

 

 

5,295,275

 

 

32,301,054

 

$

39,365

 
















 

 

 

(c)

Represents the current yield as of report date.

 

 

 

Fair Value Measurements — Various inputs are used in determining the fair value of investments, which are as follows:

 

 

 

 

Level 1 — price quotations in active markets/exchanges for identical assets and liabilities

 

 

 

 

Level 2 — other observable inputs (including, but not limited to: quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs)

 

 

 

 

Level 3 — unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the Trust’s own assumptions used in determining the fair value of investments)

 

 

 

 

The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. For information about the Trust’s policy regarding valuation of investments and other significant accounting policies, please refer to Note 1 of the Notes to Financial Statements.

 

 

 

 

The following table summarizes the inputs used as of August 31, 2010 in determining the fair valuation of the Trust’s investments:


 

 

 

 

 

 

 

 

 

 

 

 

 

 











Valuation Inputs

 

Level 1

 

Level 2

 

Level 3

 

Total

 











Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments in Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-Term Investments1

 

 

 

$

858,937,352

 

 

 

$

858,937,352

 

Short-Term Securities

 

$

32,301,054

 

 

 

 

 

 

32,301,054

 

 

 













Total

 

$

32,301,054

 

$

858,937,352

 

 

 

$

891,238,406

 

 

 














 

 

 

 

1

See above Schedule of Investments for values in each state or political subdivision.


 

 

 

 

See Notes to Financial Statements.


 

ANNUAL REPORT

AUGUST 31, 2010

33




 

 


 

 

Schedule of Investments August 31, 2010

BlackRock MuniVest Fund, Inc. (MVF)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par  
(000)

 

Value

 









Alabama — 2.5%

 

 

 

 

 

 

 

Camden IDB Alabama, RB, Weyerhaeuser Co. Project,
Series A, 6.13%, 12/01/13 (a)

 

$

2,550

 

$

2,992,450

 

Prattville IDB Alabama, RB, International Paper Co.
Project, Series A, AMT, 4.75%, 12/01/30

 

 

6,500

 

 

5,879,055

 

Selma IDB Alabama, Refunding RB, International
Paper Co. Project, Series B, 5.50%, 5/01/20

 

 

5,000

 

 

5,126,150

 

Selma IDB, RB, Gulf Opportunity Zone, International
Paper, 5.80%, 5/01/34

 

 

1,850

 

 

1,949,160

 

 

 

 

 

 



 

 

 

 

 

 

 

15,946,815

 









Arizona — 3.2%

 

 

 

 

 

 

 

Maricopa County IDA Arizona, RB, Arizona Charter
Schools Project, Series A, 6.75%, 7/01/29

 

 

4,100

 

 

2,858,151

 

Maricopa County Pollution Control Corp., Refunding RB,
Southern California Edison Co., Series A, 5.00%,
6/01/35

 

 

3,400

 

 

3,513,764

 

Phoenix Civic Improvement Corp., RB, Junior Lien,
Series A, 5.00%, 7/01/40 (b)

 

 

2,000

 

 

2,054,620

 

Pima County IDA, RB, Arizona Charter Schools Project,
Series E, 7.25%, 7/01/31

 

 

2,005

 

 

2,030,163

 

Pima County IDA, Refunding RB:

 

 

 

 

 

 

 

Arizona Charter Schools Project, Series I, 6.10%,
7/01/13 (a)(c)

 

 

110

 

 

125,598

 

Arizona Charter Schools Project, Series I, 6.30%,
7/01/13 (a)(c)

 

 

230

 

 

263,895

 

Arizona Charter Schools Project, Series I, 6.10%,
7/01/24 (c)

 

 

380

 

 

376,466

 

Arizona Charter Schools Project, Series I, 6.30%,
7/01/31 (c)

 

 

755

 

 

737,477

 

Arizona Charter Schools Project, Series O, 5.00%,
7/01/26

 

 

1,545

 

 

1,344,057

 

Charter Schools II, Series A, 6.75%, 7/01/21

 

 

920

 

 

925,391

 

Salt Verde Financial Corp., RB, Senior, 5.00%,
12/01/37

 

 

5,000

 

 

4,750,100

 

State of Arizona, COP, Department of Administration,
Series A (AGM), 5.25%, 10/01/28

 

 

700

 

 

751,177

 

 

 

 

 

 



 

 

 

 

 

 

 

19,730,859

 









California — 10.1%

 

 

 

 

 

 

 

California HFA, RB, Home Mortgage, Series K, AMT,
5.50%, 2/01/42

 

 

3,730

 

 

3,820,005

 

California Health Facilities Financing Authority,
Refunding RB, Series A:

 

 

 

 

 

 

 

Catholic Healthcare West, 6.00%, 7/01/34

 

 

1,055

 

 

1,168,413

 

St. Joseph Health System, 5.75%, 7/01/39

 

 

5,000

 

 

5,356,950

 

California State Public Works Board, RB:

 

 

 

 

 

 

 

Department of Corrections, Series C, 5.50%,
6/01/22

 

 

5,000

 

 

5,198,150

 

Department of Corrections, Series C, 5.50%,
6/01/23

 

 

6,000

 

 

6,232,380

 

Department of Mental Health, Coalinga, Series A,
5.13%, 6/01/29

 

 

10,460

 

 

10,542,529

 

California Statewide Communities Development
Authority, RB, Health Facility, Memorial Health
Services, Series A, 6.00%, 10/01/23

 

 

5,240

 

 

5,567,395

 

Golden State Tobacco Securitization Corp. California,
RB, Asset-Backed, Series A-3, 7.88%,
6/01/13 (a)

 

 

10,725

 

 

12,780,768

 

Los Angeles Department of Airports, RB, Series A,
5.25%, 5/15/39

 

 

1,200

 

 

1,281,084

 

State of California, GO, Various Purpose, 6.50%,
4/01/33

 

 

9,700

 

 

11,369,758

 

 

 

 

 

 



 

 

 

 

 

 

 

63,317,432

 










 

 

 

 

 

 

 

 

Municipal Bonds

 

Par  
(000)

 

Value

 









Colorado — 1.0%

 

 

 

 

 

 

 

Colorado Health Facilities Authority, RB, Catholic Health
Initiatives, Series D, 6.25%, 10/01/33

 

$

2,500

 

$

2,839,475

 

Colorado Health Facilities Authority, Refunding RB,
Evangelical Lutheran, Series A, 5.25%, 6/01/34

 

 

3,000

 

 

2,995,710

 

Colorado Housing & Finance Authority, Refunding RB,
S/F Program, Senior Series A-2, AMT:

 

 

 

 

 

 

 

6.60%, 5/01/28

 

 

375

 

 

389,122

 

7.50%, 4/01/31

 

 

140

 

 

148,581

 

 

 

 

 

 



 

 

 

 

 

 

 

6,372,888

 









Connecticut — 0.4%

 

 

 

 

 

 

 

Mohegan Tribe of Indians of Connecticut, RB, Public
Improvement, Priority Distribution, 6.25%, 1/01/31

 

 

2,810

 

 

2,342,922

 









District of Columbia — 0.2%

 

 

 

 

 

 

 

Metropolitan Washington Airports Authority, RB,
First Senior Lien, Series A:

 

 

 

 

 

 

 

5.00%, 10/01/39

 

 

415

 

 

437,277

 

5.25%, 10/01/44

 

 

650

 

 

694,493

 

 

 

 

 

 



 

 

 

 

 

 

 

1,131,770

 









Florida — 6.5%

 

 

 

 

 

 

 

County of Miami-Dade Florida, GO, Building Better
Communities Program:

 

 

 

 

 

 

 

Series B, 6.38%, 7/01/28

 

 

4,630

 

 

5,449,788

 

Series B-1, 5.63%, 7/01/38

 

 

5,000

 

 

5,443,250

 

County of Miami-Dade Florida, Refunding RB, Miami
International Airport:

 

 

 

 

 

 

 

AMT (AGC), 5.00%, 10/01/40

 

 

10,000

 

 

10,082,600

 

Series A-1, 5.38%, 10/01/41

 

 

10,290

 

 

10,758,092

 

Hillsborough County IDA, RB, H. Lee Moffitt Cancer
Center Project, Series A, 5.25%, 7/01/37

 

 

5,500

 

 

5,521,505

 

Miami-Dade County IDA, RB, Waste Management Inc.
Project, Series 1, Mandatory Put Bonds, AMT, 7.00%,
12/01/18 (d)

 

 

3,200

 

 

3,238,528

 

 

 

 

 

 



 

 

 

 

 

 

 

40,493,763

 









Georgia — 3.0%

 

 

 

 

 

 

 

DeKalb County Hospital Authority Georgia, RB, DeKalb
Medical Center Inc. Project, 6.13%, 9/01/40

 

 

3,570

 

 

3,698,199

 

DeKalb Private Hospital Authority, Refunding RB,
Children’s Healthcare, 5.25%, 11/15/39

 

 

3,335

 

 

3,524,161

 

Gainesville Redevelopment Authority, Refunding RB,
Riverside Military Academy, 5.13%, 3/01/37

 

 

1,100

 

 

790,438

 

Monroe County Development Authority Georgia,
Refunding RB, Oglethorpe Power Corp.-Scherer,
Series A, 6.80%, 1/01/11

 

 

4,785

 

 

4,864,239

 

Municipal Electric Authority of Georgia, RB, Series W:

 

 

 

 

 

 

 

6.60%, 1/01/18

 

 

4,565

 

 

5,398,843

 

6.60%, 1/01/18 (e)

 

 

250

 

 

286,290

 

 

 

 

 

 



 

 

 

 

 

 

 

18,562,170

 









Idaho — 0.0%

 

 

 

 

 

 

 

Idaho Housing & Finance Association, Refunding RB,
S/F Mortgage, Senior Series E-2, AMT, 6.90%, 1/01/27

 

 

90

 

 

90,179

 









Illinois — 10.6%

 

 

 

 

 

 

 

City of Chicago Illinois, ARB, General, Third Lien,
Series B-2, AMT (NPFGC), 6.00%, 1/01/27

 

 

17,080

 

 

18,069,444

 

City of Chicago Illinois, RB, Series C, AMT (Ginnie Mae),
7.00%, 3/01/32

 

 

60

 

 

61,724

 

Illinois Finance Authority, RB:

 

 

 

 

 

 

 

Advocate Health Care Network, Series D, 6.50%,
11/01/38

 

 

9,700

 

 

11,069,834

 

Community Rehabilitation Providers Facilities,
Series A, 6.50%, 7/01/22

 

 

2,140

 

 

2,144,066

 


 

 

 

 

See Notes to Financial Statements.

 





34

ANNUAL REPORT

AUGUST 31, 2010

 




 

 


 

 

Schedule of Investments (continued)

BlackRock MuniVest Fund, Inc. (MVF)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par  
(000)

 

Value

 









Illinois (concluded)

 

 

 

 

 

 

 

Illinois Finance Authority, Refunding RB, Series A:

 

 

 

 

 

 

 

Northwestern Memorial Hospital, 6.00%, 8/15/39

 

$

9,000

 

$

10,063,260

 

OSF Healthcare System, 6.00%, 5/15/39

 

 

5,200

 

 

5,420,844

 

Regional Transportation Authority, RB:

 

 

 

 

 

 

 

Series A (AMBAC), 7.20%, 11/01/20

 

 

3,500

 

 

4,379,235

 

Series C (NPFGC), 7.75%, 6/01/20

 

 

4,000

 

 

5,291,800

 

Village of Hodgkins Illinois, RB, MBM Project, AMT,
6.00%, 11/01/23

 

 

10,000

 

 

10,008,400

 

 

 

 

 

 



 

 

 

 

 

 

 

66,508,607

 









Indiana — 5.2%

 

 

 

 

 

 

 

Indiana Health & Educational Facilities Financing
Authority, RB, Clarian Health Obligation, Series A,
5.25%, 2/15/40

 

 

8,980

 

 

9,043,219

 

Indiana Transportation Finance Authority, RB, Series A,
6.80%, 12/01/16

 

 

8,195

 

 

9,405,484

 

Indianapolis Local Public Improvement Bond Bank,
Refunding RB, Series D, 6.75%, 2/01/14

 

 

12,875

 

 

14,006,455

 

 

 

 

 

 



 

 

 

 

 

 

 

32,455,158

 









Kansas — 0.4%

 

 

 

 

 

 

 

Sedgwick & Shawnee Counties Kansas, RB, Mortgage-
Backed Securities Program, Series A-4, AMT
(Ginnie Mae), 5.95%, 12/01/33

 

 

2,145

 

 

2,271,298

 









Kentucky — 1.2%

 

 

 

 

 

 

 

Kentucky Economic Development Finance Authority,
Refunding RB, Owensboro Medical Health System,
Series A, 6.38%, 6/01/40

 

 

2,000

 

 

2,138,280

 

Kentucky Housing Corp., RB, Series E, 4.75%, 7/01/35

 

 

4,585

 

 

4,646,852

 

Louisville & Jefferson County Metropolitan Sewer
District, RB, Series A (AGC), 4.25%, 5/15/38

 

 

470

 

 

472,430

 

 

 

 

 

 



 

 

 

 

 

 

 

7,257,562

 









Maine — 1.1%

 

 

 

 

 

 

 

Maine Health & Higher Educational Facilities Authority,
RB, Series A, 5.00%, 7/01/39

 

 

5,000

 

 

5,262,200

 

Portland New Public Housing Authority Maine,
Refunding RB, Senior Living, Series A:

 

 

 

 

 

 

 

5.70%, 8/01/21

 

 

775

 

 

793,786

 

6.00%, 2/01/34

 

 

1,190

 

 

1,194,831

 

 

 

 

 

 



 

 

 

 

 

 

 

7,250,817

 









Maryland — 1.5%

 

 

 

 

 

 

 

Maryland Community Development Administration,
RB, AMT, 5.10%, 9/01/37

 

 

1,835

 

 

1,870,562

 

Maryland Community Development Administration,
Refunding RB, Residential, Series D, AMT, 4.90%,
9/01/42

 

 

3,250

 

 

3,255,363

 

Maryland Health & Higher Educational Facilities
Authority, Refunding RB, University of Maryland
Medical System:

 

 

 

 

 

 

 

5.00%, 7/01/34

 

 

2,100

 

 

2,169,531

 

5.13%, 7/01/39

 

 

2,100

 

 

2,180,703

 

 

 

 

 

 



 

 

 

 

 

 

 

9,476,159

 










 

 

 

 

 

 

 

 

Municipal Bonds

 

Par  
(000)

 

Value

 









Massachusetts — 5.3%

 

 

 

 

 

 

 

Boston Water & Sewer Commission, RB, 9.25%,
1/01/11 (e)

 

$

985

 

$

1,012,718

 

Massachusetts Bay Transportation Authority, Refunding
RB, General Transportation System, Series A, 7.00%,
3/01/19

 

 

3,010

 

 

3,766,202

 

Massachusetts HFA, HRB, Series A, AMT, 5.20%,
12/01/37

 

 

3,000

 

 

3,057,870

 

Massachusetts HFA, RB, S/F, Series 130, AMT, 5.00%,
12/01/32

 

 

2,500

 

 

2,513,125

 

Massachusetts HFA, Refunding HRB, Series D, AMT,
4.85%, 6/01/40

 

 

3,000

 

 

2,921,880

 

Massachusetts Water Resources Authority, RB, Series A,
6.50%, 7/15/19 (e)

 

 

16,000

 

 

19,759,040

 

 

 

 

 

 



 

 

 

 

 

 

 

33,030,835

 









Michigan — 4.8%

 

 

 

 

 

 

 

City of Detroit Michigan, RB, Second Lien,
Series B (AGM):

 

 

 

 

 

 

 

6.25%, 7/01/36

 

 

2,500

 

 

2,796,475

 

7.00%, 7/01/36

 

 

1,250

 

 

1,472,612

 

Michigan State Hospital Finance Authority,
Refunding RB:

 

 

 

 

 

 

 

Henry Ford Health System, Series A, 5.25%,
11/15/46

 

 

7,950

 

 

7,706,571

 

Hospital, Sinai Hospital, 6.70%, 1/01/26

 

 

1,000

 

 

981,410

 

McLaren Health Care, 5.75%, 5/15/38

 

 

7,285

 

 

7,696,967

 

Trinity Health Credit, Series A, 6.00%, 12/01/20

 

 

4,200

 

 

4,270,434

 

Royal Oak Hospital Finance Authority Michigan,
Refunding RB, William Beaumont Hospital, 8.25%,
9/01/39

 

 

4,100

 

 

4,975,842

 

 

 

 

 

 



 

 

 

 

 

 

 

29,900,311

 









Mississippi — 5.2%

 

 

 

 

 

 

 

County of Lowndes Mississippi, Refunding RB,
Weyerhaeuser Co. Project:

 

 

 

 

 

 

 

Series A, 6.80%, 4/01/22

 

 

9,160

 

 

10,199,568

 

Series B, 6.70%, 4/01/22

 

 

4,500

 

 

4,965,975

 

Mississippi Business Finance Corp., Refunding RB,
System Energy Resource Inc. Project:

 

 

 

 

 

 

 

5.88%, 4/01/22

 

 

15,000

 

 

15,000,300

 

5.90%, 5/01/22

 

 

2,250

 

 

2,250,045

 

 

 

 

 

 



 

 

 

 

 

 

 

32,415,888

 









Nevada — 0.9%

 

 

 

 

 

 

 

County of Clark Nevada, RB, Series B, 5.75%, 7/01/42

 

 

5,000

 

 

5,435,950

 









New Hampshire — 0.4%

 

 

 

 

 

 

 

New Hampshire Health & Education Facilities Authority,
Refunding RB, Elliot Hospital, Series B, 5.60%,
10/01/22

 

 

2,525

 

 

2,570,930

 









New Jersey — 5.6%

 

 

 

 

 

 

 

New Jersey EDA, RB, Cigarette Tax:

 

 

 

 

 

 

 

5.50%, 6/15/24

 

 

9,080

 

 

9,041,864

 

5.75%, 6/15/29

 

 

2,885

 

 

2,852,082

 

5.75%, 6/15/34

 

 

3,695

 

 

3,638,171

 

New Jersey EDA, Refunding RB, School Facilities
Construction, Series AA, 5.25%, 12/15/33

 

 

10,000

 

 

10,956,800

 

New Jersey State Housing & Mortgage Finance
Agency, RB, Series AA, 6.38%, 10/01/28

 

 

1,520

 

 

1,707,446

 

Tobacco Settlement Financing Corp. New Jersey, RB,
7.00%, 6/01/13 (a)

 

 

5,980

 

 

7,034,274

 

 

 

 

 

 



 

 

 

 

 

 

 

35,230,637

 










 

 

 

 

See Notes to Financial Statements.

 

 





 

ANNUAL REPORT

AUGUST 31, 2010

35




 

 


 

 

Schedule of Investments (continued)

BlackRock MuniVest Fund, Inc. (MVF)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par  
(000)

 

Value

 









New York — 3.5%

 

 

 

 

 

 

 

Metropolitan Transportation Authority, RB, Series 2008-C:

 

 

 

 

 

 

 

6.25%, 11/15/23

 

$

3,245

 

$

3,948,873

 

6.50%, 11/15/28

 

 

14,925

 

 

17,893,284

 

 

 

 

 

 



 

 

 

 

 

 

 

21,842,157

 









North Carolina — 0.7%

 

 

 

 

 

 

 

City of Charlotte North Carolina, Refunding RB, Series A,
5.50%, 7/01/34

 

 

800

 

 

875,600

 

Gaston County Industrial Facilities & Pollution Control
Financing Authority North Carolina, RB, Exempt
Facilities, National Gypsum Co. Project, AMT, 5.75%,
8/01/35

 

 

4,105

 

 

3,309,985

 

 

 

 

 

 



 

 

 

 

 

 

 

4,185,585

 









Ohio — 3.4%

 

 

 

 

 

 

 

Buckeye Tobacco Settlement Financing Authority, RB,
Asset-Backed, Senior Series A-2, 6.50%, 6/01/47

 

 

15,930

 

 

12,706,405

 

Ohio Higher Educational Facility Commission,
Refunding RB, Kenyon College Project, 5.25%, 7/01/44

 

 

8,000

 

 

8,517,840

 

 

 

 

 

 



 

 

 

 

 

 

 

21,224,245

 









Pennsylvania — 1.6%

 

 

 

 

 

 

 

Delaware County IDA Pennsylvania, RB, Water Facilities,
Aqua Pennsylvania Inc. Project, Series A, AMT
(NPFGC), 5.00%, 11/01/38

 

 

1,500

 

 

1,526,535

 

Delaware County IDA Pennsylvania, Refunding RB,
Water Facilities, Aqua Pennsylvania Inc. Project,
Series B, AMT (NPFGC), 5.00%, 11/01/36

 

 

2,000

 

 

2,039,060

 

Delaware River Port Authority, RB, Series D, 5.00%,
1/01/40

 

 

195

 

 

204,017

 

Lycoming County Authority, Refunding RB, Susquehanna
Health System Project, Series A, 5.75%, 7/01/39

 

 

3,950

 

 

4,079,402

 

Philadelphia Authority for Industrial Development, RB:

 

 

 

 

 

 

 

Arbor House Inc. Project, Series E, 6.10%, 7/01/33

 

 

1,000

 

 

1,000,730

 

Rieder House Project, Series A, 6.10%, 7/01/33

 

 

1,355

 

 

1,355,989

 

 

 

 

 

 



 

 

 

 

 

 

 

10,205,733

 









Puerto Rico — 2.7%

 

 

 

 

 

 

 

Puerto Rico Sales Tax Financing Corp., RB, First Sub-
Series A, 6.38%, 8/01/39

 

 

13,000

 

 

14,631,110

 

Puerto Rico Sales Tax Financing Corp., Refunding RB,
CAB, Series A (NPFGC), 5.70%, 8/01/41 (f)

 

 

15,000

 

 

2,511,450

 

 

 

 

 

 



 

 

 

 

 

 

 

17,142,560

 









South Carolina — 1.0%

 

 

 

 

 

 

 

County of Georgetown South Carolina, Refunding RB,
International Paper Co. Project, Series A, AMT, 5.55%,
12/01/29

 

 

1,000

 

 

1,002,610

 

County of Richland South Carolina, Refunding RB,
International Paper Co. Project, AMT, 6.10%, 4/01/23

 

 

5,000

 

 

5,138,550

 

 

 

 

 

 



 

 

 

 

 

 

 

6,141,160

 









Texas — 14.2%

 

 

 

 

 

 

 

Brazos River Authority, Refunding RB, Texas Utility Co.,
Series, AMT, 7.70%, 4/01/33

 

 

3,055

 

 

1,435,850

 

Brazos River Harbor Navigation District, Refunding RB,
Dow Chemical Co. Project, Series A7, AMT, 6.63%,
5/15/33

 

 

11,460

 

 

11,789,246

 

City of Houston Texas, RB, Senior Lien, Series A, 5.50%,
7/01/34

 

 

8,335

 

 

9,156,414

 

Guadalupe-Blanco River Authority, RB, EI du Pont de
Nemours & Co. Project, AMT, 6.40%, 4/01/26

 

 

10,250

 

 

10,267,630

 

Gulf Coast Waste Disposal Authority, Refunding RB,
Series A, AMT, 6.10%, 8/01/24

 

 

4,000

 

 

4,061,760

 


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par  
(000)

 

Value

 









Texas (concluded)

 

 

 

 

 

 

 

Harris County Health Facilities Development Corp.,
Refunding RB, Memorial Hermann Healthcare System,
Series B:

 

 

 

 

 

 

 

7.13%, 12/01/31

 

$

3,500

 

$

4,061,575

 

7.25%, 12/01/35

 

 

5,400

 

 

6,256,116

 

Harris County-Houston Sports Authority, Refunding RB,
Senior Lien, Series G (NPFGC), 5.75%, 11/15/20

 

 

4,495

 

 

4,484,257

 

Houston Industrial Development Corp., RB, Senior, Air
Cargo, AMT, 6.38%, 1/01/23

 

 

1,790

 

 

1,790,573

 

La Vernia Higher Education Finance Corp., RB, KIPP Inc.,
6.25%, 8/15/39

 

 

925

 

 

966,199

 

Matagorda County Navigation District No. 1 Texas,
Refunding RB, CenterPoint Energy Project, 5.60%,
3/01/27 (d)

 

 

9,355

 

 

9,481,012

 

North Texas Tollway Authority, Refunding RB, First Tier,
Series A, 6.25%, 1/01/39

 

 

3,500

 

 

3,900,890

 

Tarrant County Cultural Education Facilities
Finance Corp., RB, Scott & White Healthcare,
6.00%, 8/15/45

 

 

5,000

 

 

5,392,300

 

Texas Private Activity Bond Surface Transportation Corp.,
RB, Senior Lien:

 

 

 

 

 

 

 

LBJ Infrastructure, 7.00%, 6/30/40

 

 

10,000

 

 

10,888,700

 

Note Mobility, 6.88%, 12/31/39

 

 

4,710

 

 

5,152,175

 

 

 

 

 

 



 

 

 

 

 

 

 

89,084,697

 









U.S. Virgin Islands — 1.3%

 

 

 

 

 

 

 

United States Virgin Islands, Refunding RB, Senior
Secured, Hovensa Coker Project, AMT, 6.50%,
7/01/21

 

 

8,000

 

 

8,155,520

 









Vermont — 0.2%

 

 

 

 

 

 

 

Vermont Educational & Health Buildings Financing
Agency, RB, Developmental & Mental Health, Series A,
6.38%, 6/15/22

 

 

1,000

 

 

1,001,110

 









Virginia — 4.3%

 

 

 

 

 

 

 

Chesterfield County IDA, Refunding RB, Virginia
Electric & Power Co., Series A, 5.88%, 6/01/17

 

 

1,425

 

 

1,461,908

 

City of Norfolk Virginia, Refunding RB, Series B
(AMBAC), 5.50%, 2/01/31

 

 

4,225

 

 

4,230,281

 

County of Spotsylvania Virginia, RB (AGM), 5.00%,
6/01/37

 

 

575

 

 

617,481

 

Fairfax County EDA, Refunding RB, Goodwin House Inc.:

 

 

 

 

 

 

 

5.13%, 10/01/37

 

 

2,000

 

 

1,981,120

 

5.13%, 10/01/42

 

 

7,015

 

 

6,879,330

 

Tobacco Settlement Financing Corp. Virginia, Refunding
RB, Senior Series B1, 5.00%, 6/01/47

 

 

15,000

 

 

10,078,950

 

Virginia HDA, Refunding RB, Sub-Series A3, AMT, 5.05%,
7/01/26

 

 

1,325

 

 

1,371,322

 

 

 

 

 

 



 

 

 

 

 

 

 

26,620,392

 









Washington — 4.6%

 

 

 

 

 

 

 

Energy Northwest, Refunding RB, Series B, 7.13%,
7/01/16

 

 

14,320

 

 

18,551,846

 

Seattle Housing Authority Washington, HRB,
Replacement Housing Projects, 6.13%, 12/01/32

 

 

2,265

 

 

2,214,989

 

Washington Health Care Facilities Authority, Refunding
RB, Catholic Health Initiatives, Series D, 6.38%,
10/01/36

 

 

7,000

 

 

7,951,930

 

 

 

 

 

 



 

 

 

 

 

 

 

28,718,765

 









West Virginia — 0.4%

 

 

 

 

 

 

 

West Virginia Hospital Finance Authority, Refunding RB,
Charleston, Series A, 5.63%, 9/01/32

 

 

2,500

 

 

2,645,550

 










 

 

 

 

See Notes to Financial Statements.

 





36

ANNUAL REPORT

AUGUST 31, 2010

 




 

 


 

 

Schedule of Investments (continued)

BlackRock MuniVest Fund, Inc. (MVF)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par  
(000)

 

Value

 









Wisconsin — 1.7%

 

 

 

 

 

 

 

City of Milwaukee Wisconsin, RB, Senior, Air Cargo, AMT,
6.50%, 1/01/25

 

$

1,605

 

$

1,607,391

 

Wisconsin Health & Educational Facilities Authority,
MRB, Hudson Memorial Hospital (FHA), 5.70%,
1/15/29

 

 

4,500

 

 

4,738,950

 

Wisconsin Health & Educational Facilities Authority, RB,
SynergyHealth Inc., 6.00%, 11/15/32

 

 

3,040

 

 

3,155,642

 

Wisconsin Housing & EDA, Refunding RB, Series A, AMT,
5.63%, 3/01/31

 

 

1,350

 

 

1,417,190

 

 

 

 

 

 



 

 

 

 

 

 

 

10,919,173

 









Wyoming — 0.8%

 

 

 

 

 

 

 

County of Sweetwater Wyoming, Refunding RB, Idaho
Power Co. Project, 5.25%, 7/15/26

 

 

4,500

 

 

4,899,285

 









Total Municipal Bonds — 109.5%

 

 

 

 

 

684,578,882

 









 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (g)

 

 

 

 

 

 

 









Arizona — 0.6%

 

 

 

 

 

 

 

Phoenix Civic Improvement Corp., RB, Junior Lien,
Series A, 5.00%, 7/01/34

 

 

3,500

 

 

3,790,605

 









California — 5.3%

 

 

 

 

 

 

 

Los Angeles Community College District California, GO,
Election of 2008, Series A, 6.00%, 8/01/33

 

 

9,586

 

 

11,097,610

 

University of California, RB, Series O, 5.25%, 5/15/39

 

 

20,000

 

 

22,068,800

 

 

 

 

 

 



 

 

 

 

 

 

 

33,166,410

 









Connecticut — 2.1%

 

 

 

 

 

 

 

Connecticut State Health & Educational Facility
Authority, RB, Yale University, Series Z-3, 5.05%,
7/01/42

 

 

12,000

 

 

13,045,200

 









District of Columbia — 1.3%

 

 

 

 

 

 

 

District of Columbia Water & Sewer Authority, RB,
Series A, 5.50%, 10/01/39

 

 

7,495

 

 

8,264,895

 









Florida — 4.0%

 

 

 

 

 

 

 

County of Miami-Dade Florida, RB, Water & Sewer
System (AGM), 5.00%, 10/01/39

 

 

14,747

 

 

15,608,479

 

Miami-Dade County Expressway Authority, RB, Series A
(AGC), 5.00%, 7/01/35

 

 

8,900

 

 

9,235,619

 

 

 

 

 

 



 

 

 

 

 

 

 

24,844,098

 









Illinois — 3.4%

 

 

 

 

 

 

 

City of Chicago Illinois, Refunding RB, Second Lien
(AGM), 5.25%, 11/01/33

 

 

1,330

 

 

1,451,136

 

Illinois Finance Authority, RB, University of Chicago,
Series B, 6.25%, 7/01/38

 

 

10,000

 

 

11,869,300

 

Illinois State Toll Highway Authority, RB, Series B, 5.50%,
1/01/33

 

 

6,999

 

 

7,796,436

 

 

 

 

 

 



 

 

 

 

 

 

 

21,116,872

 









Kentucky — 6.7%

 

 

 

 

 

 

 

Kentucky Economic Development Finance Authority,
Refunding RB, St. Elizabeth, Series A, 5.50%, 5/01/39

 

 

8,003

 

 

8,542,246

 

Kentucky Housing Corp., Refunding RB, Series L, AMT,
5.25%, 1/01/38

 

 

7,220

 

 

7,490,894

 

Lexington-Fayette Urban County Airport Board,
Refunding RB, Series A, 5.00%, 7/01/27

 

 

7,001

 

 

7,731,979

 

Louisville & Jefferson County Metropolitan Government
Parking Authority, RB, Series A, 5.38%, 12/01/39

 

 

9,195

 

 

9,884,073

 

Louisville & Jefferson County Metropolitan Sewer District,
RB, Series A (AGC), 4.25%, 5/15/38

 

 

8,003

 

 

8,044,083

 

 

 

 

 

 



 

 

 

 

 

 

 

41,693,275

 









 

 

 

 

 

 

 

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (g)

 

Par  
(000)

 

Value

 









Maryland — 0.8%

 

 

 

 

 

 

 

Maryland State Transportation Authority, RB,
Transportation Facility Project (AGM), 5.00%,
7/01/41

 

$

4,710

 

$

5,102,861

 









Nevada — 2.9%

 

 

 

 

 

 

 

Clark County Water Reclamation District, GO, Series B,
5.75%, 7/01/34

 

 

15,789

 

 

18,043,081

 









New York — 4.9%

 

 

 

 

 

 

 

New York City Municipal Water Finance Authority, RB:

 

 

 

 

 

 

 

Series DD, 5.00%, 6/15/37

 

 

24,199

 

 

25,786,449

 

Series FF-2, 5.50%, 6/15/40

 

 

4,154

 

 

4,727,113

 

 

 

 

 

 



 

 

 

 

 

 

 

30,513,562

 









North Carolina — 3.0%

 

 

 

 

 

 

 

North Carolina Capital Facilities Finance Agency,
Refunding RB:

 

 

 

 

 

 

 

Duke University Project, Series A, 5.00%, 10/01/41

 

 

12,678

 

 

13,469,171

 

Wake Forest University, 5.00%, 1/01/38

 

 

5,000

 

 

5,369,450

 

 

 

 

 

 



 

 

 

 

 

 

 

18,838,621

 









Ohio — 3.7%

 

 

 

 

 

 

 

County of Allen Ohio, Refunding RB, Catholic Healthcare,
Series A, 5.25%, 6/01/38

 

 

2,870

 

 

3,015,050

 

County of Montgomery Ohio, Refunding RB, Catholic
Healthcare, Series A, 5.50%, 5/01/34

 

 

5,470

 

 

6,010,983

 

Ohio Higher Educational Facility Commission,
Refunding RB, Hospital, Cleveland Clinic Health,
Series A, 5.25%, 1/01/33

 

 

4,400

 

 

4,663,120

 

State of Ohio, RB, Cleveland Clinic Health, Series B,
5.50%, 1/01/34

 

 

8,500

 

 

9,250,975

 

 

 

 

 

 



 

 

 

 

 

 

 

22,940,128

 









Oregon — 2.1%

 

 

 

 

 

 

 

Oregon State Housing & Community Services
Department, RB, Housing, Series A, AMT, 4.95%,
7/01/30

 

 

13,000

 

 

13,134,643

 









South Carolina — 0.5%

 

 

 

 

 

 

 

South Carolina State Housing Finance & Development
Authority, Refunding RB, Series B-1, 5.55%, 7/01/39

 

 

3,259

 

 

3,412,284

 









Texas — 8.1%

 

 

 

 

 

 

 

Harris County Health Facilities Development Corp.,
Refunding RB, School Health Care System, Series B,
5.75%, 7/1/27

 

 

20,970

 

 

26,419,893

 

Houston Higher Education Finance Corp., RB, Rice
University Project, Series A, 5.00%, 5/15/40

 

 

10,000

 

 

10,931,897

 

Texas Department of Housing & Community Affairs,
MRB, Series B, AMT (Ginnie Mae), 5.25%, 9/01/32

 

 

7,129

 

 

7,305,867

 

Texas State University Systems, Refunding RB (AGM),
5.00%, 3/15/30

 

 

5,667

 

 

6,012,217

 

 

 

 

 

 



 

 

 

 

 

 

 

50,669,874

 









Virginia — 1.2%

 

 

 

 

 

 

 

Fairfax County IDA Virginia, Refunding RB, Health Care,
Inova Health System, Series A, 5.50%, 5/15/35

 

 

2,099

 

 

2,295,722

 

Virginia Small Business Financing Authority, Refunding
RB, Sentara Healthcare, 5.00%, 11/01/40

 

 

5,002

 

 

5,251,632

 

 

 

 

 

 



 

 

 

 

 

 

 

7,547,354

 









Washington — 4.3%

 

 

 

 

 

 

 

Central Puget Sound Regional Transit Authority, RB,
Series A:

 

 

 

 

 

 

 

5.00%, 11/01/36

 

 

6,000

 

 

6,434,100

 

(AGM), 5.00%, 11/01/32

 

 

14,007

 

 

15,143,811

 

Central Puget Sound Regional Transportation Authority,
Washington, RB, Series A, 5.00%, 11/01/34

 

 

5,000

 

 

5,361,750

 

 

 

 

 

 



 

 

 

 

 

 

 

26,939,661

 










 

 

 

 

See Notes to Financial Statements.

 

 





 

ANNUAL REPORT

AUGUST 31, 2010

37




 

 


 

 

Schedule of Investments (concluded)

BlackRock MuniVest Fund, Inc. (MVF)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (g)

 

Par  
(000)

 

Value

 









Wisconsin — 1.0%

 

 

 

 

 

 

 

Wisconsin Health & Educational Facilities Authority,
Refunding RB, Froedtert & Community Health Inc.,
5.25%, 4/01/39

 

$

6,099

 

$

6,398,952

 









Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 55.9%

 

 

 

 

 

349,462,376

 









Total Long-Term Investments
(Cost — $970,772,749) — 165.4%

 

 

 

 

 

1,034,041,258

 









 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

Short-Term Securities

 

Shares

 

 

 

 









FFI Institutional Tax-Exempt Fund, 0.22% (h)(i)

 

 

4,494,923

 

 

4,494,923

 









Total Short-Term Securities
(Cost — $4,494,923) — 0.7%

 

 

 

 

 

4,494,923

 









Total Investments (Cost — $975,267,672*) — 166.1%

 

 

 

 

 

1,038,536,181

 

Other Assets Less Liabilities — 1.6%

 

 

 

 

 

9,745,340

 

Liability for Trust Certificates, Including Interest
Expense and Fees Payable — (28.7)%

 

 

 

 

 

(179,235,090

)

Preferred Shares, at Redemption Value — (39.0)%

 

 

 

 

 

(243,851,199

)

 

 

 

 

 



 

Net Assets Applicable to Common Shares — 100.0%

 

 

 

 

$

625,195,232

 

 

 

 

 

 



 


 

 


 

*

The cost and unrealized appreciation (depreciation) of investments as of August 31, 2010, as computed for federal income tax purposes, were as follows:


 

 

 

 

 

Aggregate cost

 

$

798,680,293

 

 

 



 

Gross unrealized appreciation

 

$

72,464,358

 

Gross unrealized depreciation

 

 

(11,728,316

)

 

 



 

Net unrealized appreciation

 

$

60,736,042

 

 

 



 


 

 

(a)

US government securities, held in escrow, are used to pay interest on this security as well as to retire the bond in full at the date indicated, typically at a premium to par.

 

 

(b)

When-issued security. Unsettled when-issued transactions were as follows:


 

 

 

 

 

 

 

 







Counterparty

 

Value

 

Unrealized
Appreciation

 







Barclays Capital

 

$

2,054,620

 

$

54,620

 










 

 

(c)

Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration to qualified institutional investors.

 

 

(d)

Variable rate security. Rate shown is as of report date.

 

 

(e)

Security is collateralized by Municipal or US Treasury obligations.

 

 

(f)

Represents a zero-coupon bond. Rate shown reflects the current yield as of report date.

 

 

(g)

Securities represent bonds transferred to a tender option bond trust in exchange for which the Trust acquired residual interest certificates. These securities serve as collateral in a financing transaction. See Note 1 of Notes to Financial Statements for details of municipal bonds transferred to tender option bond trusts.

 

 

(h)

Investments in companies considered to be an affiliate of the Trust during the year, for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:


 

 

 

 

 

 

 

 

 

 

 

 

 

 











Affiliate

 

Shares Held at
August 31,
2009

 

Net
Activity

 

Shares Held at
August 31,
2010

 

Income

 











FFI Institutional Tax-Exempt Fund

 

 

4,104,364

 

 

390,559

 

 

4,494,923

 

$

24,306

 
















 

 

 

(i)

Represents the current yield as of report date.

 

 

 

Fair Value Measurements — Various inputs are used in determining the fair value of investments, which are as follows:

 

 

 

 

Level 1 — price quotations in active markets/exchanges for identical assets and liabilities

 

 

 

 

Level 2 — other observable inputs (including, but not limited to: quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs)

 

 

 

 

Level 3 — unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the Trust’s own assumptions used in determining the fair value of investments)

 

 

 

 

The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. For information about the Trust’s policy regarding valuation of investments and other significant accounting policies, please refer to Note 1 of the Notes to Financial Statements.

 

 

 

 

The following table summarizes the inputs used as of August 31, 2010 in determining the fair valuation of the Trust’s investments:


 

 

 

 

 

 

 

 

 

 

 

 

 

 











Valuation Inputs

 

Level 1

 

Level 2

 

Level 3

 

Total

 











Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments in Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-Term Investments1

 

 

 

$

1,034,041,258

 

 

 

$

1,034,041,258

 

Short-Term Securities

 

$

4,494,923

 

 

 

 

 

 

4,494,923

 

 

 













Total

 

$

4,494,923

 

$

1,034,041,258

 

 

 

$

1,038,536,181

 

 

 














 

 

 

 

1

See above Schedule of Investments for values in each state or political subdivision.


 

 

 

 

See Notes to Financial Statements.

 





38

ANNUAL REPORT

AUGUST 31, 2010

 




 


 

Statements of Assets and Liabilities


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

August 31, 2010

 

BlackRock
Insured Municipal
Income Trust
(BYM)

 

BlackRock
Insured Municipal
Income
Investment Trust
(BAF)

 

BlackRock
Municipal
Bond Trust
(BBK)

 

BlackRock
Municipal Bond
Investment Trust
(BIE)

 

BlackRock
Municipal
Income Trust II
(BLE)

 

BlackRock
MuniHoldings
Insured
Investment Fund
(MFL)

 

BlackRock
MuniVest
Fund, Inc.
(MVF)

 

















Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
























Investments at value — unaffiliated1

 

$

589,699,123

 

$

203,418,771

 

$

240,508,151

 

$

84,698,508

 

$

520,443,811

 

$

858,937,352

 

$

1,034,041,258

 

Investments at value — affiliated2

 

 

9,416,737

 

 

1,211,264

 

 

4,831,353

 

 

1,698,254

 

 

9,440,330

 

 

32,301,054

 

 

4,494,923

 

Interest receivable

 

 

5,528,252

 

 

2,409,279

 

 

2,874,397

 

 

889,790

 

 

6,617,084

 

 

10,731,935

 

 

13,738,635

 

Investments sold receivable

 

 

1,412,386

 

 

792,098

 

 

8,003,093

 

 

1,322,953

 

 

70,000

 

 

4,064,010

 

 

2,040,000

 

Income receivable — affiliated

 

 

197

 

 

53

 

 

75

 

 

16

 

 

178

 

 

341

 

 

367

 

Prepaid expenses

 

 

36,755

 

 

20,906

 

 

14,539

 

 

3,799

 

 

35,962

 

 

44,702

 

 

43,001

 

Other assets

 

 

49,989

 

 

12,612

 

 

19,253

 

 

4,178

 

 

45,353

 

 

87,347

 

 

93,838

 

 

 






















Total assets

 

 

606,143,439

 

 

207,864,983

 

 

256,250,861

 

 

88,617,498

 

 

536,652,718

 

 

906,166,741

 

 

1,054,452,022

 

 

 






















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
























Accrued Liabilities
























Bank overdraft

 

 

 

 

 

 

 

 

 

 

 

 

272

 

 

293

 

Income dividends payable — Common Shares

 

 

1,944,361

 

 

642,297

 

 

885,097

 

 

262,717

 

 

1,884,120

 

 

2,750,451

 

 

3,497,897

 

Investments purchased payable

 

 

985,543

 

 

773,217

 

 

8,614,905

 

 

2,440,036

 

 

3,520,000

 

 

3,681,291

 

 

2,000,000

 

Investment advisory fees payable

 

 

253,516

 

 

86,420

 

 

113,234

 

 

39,047

 

 

222,275

 

 

371,739

 

 

434,924

 

Officer’s and Trustees’ fees payable

 

 

52,374

 

 

14,321

 

 

21,120

 

 

5,435

 

 

47,601

 

 

90,424

 

 

97,246

 

Interest expense and fees payable

 

 

50,421

 

 

28,641

 

 

5,229

 

 

8,601

 

 

25,600

 

 

59,140

 

 

115,244

 

Other affiliates payable

 

 

1,838

 

 

625

 

 

748

 

 

255

 

 

1,628

 

 

2,698

 

 

3,134

 

Other accrued expenses payable

 

 

123,469

 

 

75,235

 

 

89,285

 

 

26,672

 

 

121,021

 

 

113,514

 

 

137,007

 

 

 






















Total accrued liabilities

 

 

3,411,522

 

 

1,620,756

 

 

9,729,618

 

 

2,782,763

 

 

5,822,245

 

 

7,069,529

 

 

6,285,745

 

 

 






















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
























Other Liabilities
























Trust certificates3

 

 

80,914,512

 

 

32,196,264

 

 

7,399,148

 

 

16,275,832

 

 

39,252,437

 

 

71,067,717

 

 

179,119,846

 

 

 






















Total Liabilities

 

 

84,326,034

 

 

33,817,020

 

 

17,128,766

 

 

19,058,595

 

 

45,074,682

 

 

78,137,246

 

 

185,405,591

 

 

 






















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
























Preferred Shares at Redemption Value
























$25,000 per share liquidation preference,
plus unpaid dividends4,5

 

 

137,254,585

 

 

42,275,531

 

 

79,906,002

 

 

17,851,341

 

 

151,308,998

 

 

274,662,962

 

 

243,851,199

 

 

 






















Net Assets Applicable to Common Shareholders

 

$

384,562,820

 

$

131,772,432

 

$

159,216,093

 

$

51,707,562

 

$

340,269,038

 

$

553,366,533

 

$

625,195,232

 

 

 






















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
























Net Assets Applicable to Common Shareholders Consist of
























Paid-in capital6,7,8

 

$

372,948,343

 

$

123,991,446

 

$

148,046,076

 

$

47,247,493

 

$

330,535,384

 

$

524,579,061

 

$

566,918,036

 

Undistributed net investment income

 

 

6,872,762

 

 

2,351,959

 

 

2,996,707

 

 

800,253

 

 

5,957,971

 

 

9,074,078

 

 

14,225,505

 

Accumulated net realized loss

 

 

(14,559,973

)

 

(5,755,905

)

 

(2,856,776

)

 

(2,132,025

)

 

(16,572,367

)

 

(28,770,586

)

 

(19,216,818

)

Net unrealized appreciation/ depreciation

 

 

19,301,688

 

 

11,184,932

 

 

11,030,086

 

 

5,791,841

 

 

20,348,050

 

 

48,483,980

 

 

63,268,509

 

 

 






















Net Assets Applicable to Common Shareholders

 

$

384,562,820

 

$

131,772,432

 

$

159,216,093

 

$

51,707,562

 

$

340,269,038

 

$

553,366,533

 

$

625,195,232

 

 

 






















Net asset value per Common Share

 

$

14.64

 

$

15.08

 

$

15.29

 

$

15.51

 

$

14.63

 

$

14.69

 

$

10.01

 

 

 






















1 Investments at cost — unaffiliated

 

$

570,397,435

 

$

192,233,839

 

$

229,478,065

 

$

78,906,667

 

$

500,095,761

 

$

810,453,372

 

$

970,772,749

 

 

 






















2 Investments at cost — affiliated

 

$

9,416,737

 

$

1,211,264

 

$

4,831,353

 

$

1,698,254

 

$

9,440,330

 

$

32,301,054

 

$

4,494,923

 

 

 






















3 Represents short-term floating rate certificates issued by tender option bond trusts.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4 Preferred Shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Par value $0.001 per share

 

 

5,490

 

 

1,691

 

 

3,196

 

 

714

 

 

6,052

 

 

 

 

 

 

 






















Par value $0.10 per share

 

 

 

 

 

 

 

 

 

 

 

 

10,986

 

 

9,753

 

 

 






















5 Preferred Shares authorized

 

 

unlimited

 

 

unlimited

 

 

unlimited

 

 

unlimited

 

 

unlimited

 

 

1 million

 

 

10 million

 

 

 






















6 Common Shares outstanding

 

 

26,275,144

 

 

8,738,733

 

 

10,412,910

 

 

3,333,976

 

 

23,260,729

 

 

37,677,410

 

 

62,462,451

 

 

 






















7 Par value per Common Share

 

$

0.001

 

$

0.001

 

$

0.001

 

$

0.001

 

$

0.001

 

$

0.10

 

$

0.10

 

 

 






















8 Common Shares authorized

 

 

unlimited

 

 

unlimited

 

 

unlimited

 

 

unlimited

 

 

unlimited

 

 

unlimited

 

 

150 million

 

 

 























 

 

 

 

See Notes to Financial Statements.

 

 


 

ANNUAL REPORT

AUGUST 31, 2010

39




 


 

Statements of Operations


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended August 31, 2010

 

BlackRock
Insured Municipal
Income Trust
(BYM)

 

BlackRock
Insured Municipal
Income
Investment Trust
(BAF)

 

BlackRock
Municipal
Bond Trust
(BBK)

 

BlackRock
Municipal Bond
Investment Trust
(BIE)

 

BlackRock
Municipal
Income Trust II
(BLE)

 

BlackRock
MuniHoldings
Insured
Investment Fund
(MFL)

 

BlackRock
MuniVest
Fund, Inc.
(MVF)

 

















Investment Income
























Interest

 

$

29,076,445

 

$

9,647,761

 

$

13,454,852

 

$

4,047,431

 

$

28,461,083

 

$

41,819,688

 

$

52,684,744

 

Income — affiliated

 

 

12,527

 

 

11,111

 

 

6,973

 

 

4,106

 

 

18,608

 

 

45,672

 

 

31,036

 

 

 






















Total income

 

 

29,088,972

 

 

9,658,872

 

 

13,461,825

 

 

4,051,537

 

 

28,479,691

 

 

41,865,360

 

 

52,715,780

 

 

 






















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
























Expenses
























Investment advisory

 

 

3,149,269

 

 

1,085,737

 

 

1,514,683

 

 

516,903

 

 

2,783,443

 

 

4,689,786

 

 

4,937,846

 

Commissions for Preferred Shares

 

 

148,176

 

 

39,572

 

 

90,180

 

 

19,014

 

 

225,866

 

 

409,644

 

 

367,162

 

Accounting services

 

 

93,222

 

 

46,599

 

 

44,582

 

 

21,581

 

 

81,168

 

 

196,528

 

 

281,279

 

Professional

 

 

59,485

 

 

46,167

 

 

48,205

 

 

19,372

 

 

66,001

 

 

80,523

 

 

90,073

 

Printing

 

 

59,141

 

 

16,237

 

 

23,649

 

 

6,582

 

 

42,777

 

 

38,825

 

 

42,273

 

Officer and Trustees

 

 

50,058

 

 

16,536

 

 

19,730

 

 

6,316

 

 

43,401

 

 

69,322

 

 

77,318

 

Transfer agent

 

 

33,519

 

 

19,394

 

 

26,587

 

 

18,785

 

 

39,035

 

 

69,173

 

 

90,182

 

Custodian

 

 

29,633

 

 

13,113

 

 

17,538

 

 

8,775

 

 

29,555

 

 

40,663

 

 

41,150

 

Registration

 

 

9,400

 

 

9,330

 

 

9,478

 

 

9,330

 

 

10,037

 

 

13,073

 

 

26,862

 

Miscellaneous

 

 

85,109

 

 

45,477

 

 

59,389

 

 

41,298

 

 

85,728

 

 

108,653

 

 

124,008

 

 

 






















Total expenses excluding interest expense and fees

 

 

3,717,012

 

 

1,338,162

 

 

1,854,021

 

 

667,956

 

 

3,407,011

 

 

5,716,190

 

 

6,078,153

 

Interest expense and fees1

 

 

502,691

 

 

212,252

 

 

44,417

 

 

102,115

 

 

267,518

 

 

427,083

 

 

1,130,433

 

 

 






















Total expenses

 

 

4,219,703

 

 

1,550,414

 

 

1,898,438

 

 

770,071

 

 

3,674,529

 

 

6,143,273

 

 

7,208,586

 

Less fees waived by advisor

 

 

(335,957

)

 

(119,232

)

 

(310,940

)

 

(107,036

)

 

(257,782

)

 

(391,989

)

 

(6,771

)

 

 






















Total expenses after fees waived

 

 

3,883,746

 

 

1,431,182

 

 

1,587,498

 

 

663,035

 

 

3,416,747

 

 

5,751,284

 

 

7,201,815

 

 

 






















Net investment income

 

 

25,205,226

 

 

8,227,690

 

 

11,874,327

 

 

3,388,502

 

 

25,062,944

 

 

36,114,076

 

 

45,513,965

 

 

 






















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
























Realized and Unrealized Gain (Loss)
























Net realized gain (loss) from:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments

 

 

690,550

 

 

(3,140,813

)

 

3,705,839

 

 

23,124

 

 

(1,537,580

)

 

5,242,601

 

 

6,302,090

 

Financial futures contracts

 

 

(74,301

)

 

15,682

 

 

(56,745

)

 

5,532

 

 

157,452

 

 

60,655

 

 

(143,455

)

 

 






















 

 

 

616,249

 

 

(3,125,131

)

 

3,649,094

 

 

28,656

 

 

(1,380,128

)

 

5,303,256

 

 

6,158,635

 

 

 






















Net change in unrealized appreciation/ depreciation on investments

 

 

25,550,335

 

 

11,392,593

 

 

16,824,854

 

 

4,203,415

 

 

42,483,321

 

 

33,786,326

 

 

54,194,616

 

 

 






















Total realized and unrealized gain

 

 

26,166,584

 

 

8,267,462

 

 

20,473,948

 

 

4,232,071

 

 

41,103,193

 

 

39,089,582

 

 

60,353,251

 

 

 






















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
























Dividends to Preferred Shareholders From
























Net investment income

 

 

(558,436

)

 

(172,818

)

 

(326,106

)

 

(73,259

)

 

(619,323

)

 

(1,120,623

)

 

(1,128,079

)

 

 






















Net Increase in Net Assets Applicable to Common Shareholders Resulting from Operations

 

$

50,813,374

 

$

16,322,334

 

$

32,022,169

 

$

7,547,314

 

$

65,546,814

 

$

74,083,035

 

$

104,739,137

 

 

 























 

 

 

 

1

Related to tender option bond trusts.


 

 

 

 

See Notes to Financial Statements.


40

ANNUAL REPORT

AUGUST 31, 2010

 




 


 

Statements of Changes in Net Assets


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BlackRock Insured Municipal
Income Trust (BYM)

 

BlackRock Insured Municipal
Income Investment Trust (BAF)

 

BlackRock Municipal
Bond Trust (BBK)

 

 

 


 


 



Increase (Decrease) in Net Assets Applicable to
Common Shareholders:

 

Year Ended August 31,

 

Year Ended August 31,

 

Year Ended August 31,

 

 


 


 



 

2010

 

2009

 

2010

 

2009

 

2010

 

2009

 





















Operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Net investment income

 

$

25,205,226

 

$

23,833,237

 

$

8,227,690

 

$

7,960,492

 

$

11,874,327

 

$

11,803,804

 

Net realized gain (loss)

 

 

616,249

 

 

(5,672,531

)

 

(3,125,131

)

 

(1,547,291

)

 

3,649,094

 

 

(4,209,349

)

Net change in unrealized appreciation/depreciation

 

 

25,550,335

 

 

(8,812,693

)

 

11,392,593

 

 

(873,684

)

 

16,824,854

 

 

(4,343,179

)

Dividends to Preferred Shareholders from net investment income

 

 

(558,436

)

 

(2,513,122

)

 

(172,818

)

 

(744,761

)

 

(326,106

)

 

(1,349,183

)

 

 






 






 







Net increase in net assets applicable to Common Shareholders resulting from operations

 

 

50,813,374

 

 

6,834,891

 

 

16,322,334

 

 

4,794,756

 

 

32,022,169

 

 

1,902,093

 

 

 






 






 







 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Dividends to Common Shareholders From





















Net investment income

 

 

(22,281,818

)

 

(19,779,705

)

 

(7,442,276

)

 

(6,275,413

)

 

(10,597,613

)

 

(9,386,250

)

 

 






 






 







 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Capital Share Transactions





















Reinvestment of common dividends

 

 

697,165

 

 

146,402

 

 

67,819

 

 

 

 

761,779

 

 

397,817

 

 

 






 






 







 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Net Assets Applicable to Common Shareholders





















Total increase (decrease) in net assets applicable to Common Shareholders

 

 

29,228,721

 

 

(12,798,412

)

 

8,947,877

 

 

(1,480,657

)

 

22,186,335

 

 

(7,086,340

)

Beginning of year

 

 

355,334,099

 

 

368,132,511

 

 

122,824,555

 

 

124,305,212

 

 

137,029,758

 

 

144,116,098

 

 

 






 






 







End of year

 

$

384,562,820

 

$

355,334,099

 

$

131,772,432

 

$

122,824,555

 

$

159,216,093

 

$

137,029,758

 

 

 






 






 







Undistributed net investment income

 

$

6,872,762

 

$

4,543,136

 

$

2,351,959

 

$

1,739,363

 

$

2,996,707

 

$

2,048,688

 

 

 






 






 








 

 

 

 

See Notes to Financial Statements.


 

ANNUAL REPORT

AUGUST 31, 2010

41



 


 

Statements of Changes in Net Assets (continued)


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BlackRock Municipal Bond
Investment Trust (BIE)

 

BlackRock Municipal
Income Trust II (BLE)

 

BlackRock MuniHoldings Insured
Investment Fund (MFL)

 

 

 


 


 



Increase (Decrease) in Net Assets Applicable to
Common Shareholders:

 

Year Ended August 31,

 

Year Ended August 31,

 

Year Ended August 31,

 

 


 


 



 

2010

 

2009

 

2010

 

2009

 

2010

 

2009

 





















Operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Net investment income

 

$

3,388,502

 

$

3,449,366

 

$

25,062,944

 

$

25,241,928

 

$

36,114,076

 

$

35,460,295

 

Net realized gain (loss)

 

 

28,656

 

 

(2,150,945

)

 

(1,380,128

)

 

(6,728,654

)

 

5,303,256

 

 

(14,166,063

)

Net change in unrealized appreciation/depreciation

 

 

4,203,415

 

 

(388,109

)

 

42,483,321

 

 

(15,458,538

)

 

33,786,326

 

 

12,563,335

 

Dividends to Preferred Shareholders from net
investment income

 

 

(73,259

)

 

(437,198

)

 

(619,323

)

 

(2,784,279

)

 

(1,120,623

)

 

(4,979,410

)

 

 






 






 







Net increase in net assets applicable to Common
Shareholders resulting from operations

 

 

7,547,314

 

 

473,114

 

 

65,546,814

 

 

270,457

 

 

74,083,035

 

 

28,878,157

 

 

 






 






 







 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Dividends to Common Shareholders From

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Net investment income

 

 

(3,052,054

)

 

(2,802,003

)

 

(22,569,858

)

 

(19,376,940

)

 

(31,867,551

)

 

(26,563,835

)

 

 






 






 







 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Capital Share Transactions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Reinvestment of common dividends

 

 

9,559

 

 

 

 

1,222,581

 

 

287,025

 

 

138,384

 

 

 

 

 






 






 







 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Net Assets Applicable to Common Shareholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Total increase (decrease) in net assets applicable to
Common Shareholders

 

 

4,504,819

 

 

(2,328,889

)

 

44,199,537

 

 

(18,819,458

)

 

42,353,868

 

 

2,314,322

 

Beginning of year

 

 

47,202,743

 

 

49,531,632

 

 

296,069,501

 

 

314,888,959

 

 

511,012,665

 

 

508,698,343

 

 

 






 






 







End of year

 

$

51,707,562

 

$

47,202,743

 

$

340,269,038

 

$

296,069,501

 

$

553,366,533

 

$

511,012,665

 

 

 






 






 







Undistributed net investment income

 

$

800,253

 

$

606,918

 

$

5,957,971

 

$

4,090,516

 

$

9,074,078

 

$

6,117,351

 

 

 






 






 








 

 

 

 

See Notes to Financial Statements.

 





42

ANNUAL REPORT

AUGUST 31, 2010

 




 


 

Statements of Changes in Net Assets (concluded)


 

 

 

 

 

 

 

 

 

 

BlackRock MuniVest
Fund, Inc. (MVF)

 

 

 



 

 

Year Ended August 31,

 

 

 



Increase (Decrease) in Net Assets Applicable to Common Shareholders:

 

2010

 

2009

 









Operations

 

 

 

 

 

 

 









Net investment income

 

$

45,513,965

 

$

43,460,100

 

Net realized gain

 

 

6,158,635

 

 

122,896

 

Net change in unrealized appreciation/depreciation

 

 

54,194,616

 

 

(2,052,514

)

Dividends to Preferred Shareholders from net investment income

 

 

(1,128,079

)

 

(3,867,803

)

 

 







Net increase in net assets applicable to Common Shareholders resulting from operations

 

 

104,739,137

 

 

37,662,679

 

 

 







 

 

 

 

 

 

 

 









Dividends to Common Shareholders From

 

 

 

 

 

 

 









Net investment income

 

 

(40,403,913

)

 

(33,322,841

)

 

 







 

 

 

 

 

 

 

 









Capital Share Transactions

 

 

 

 

 

 

 









Reinvestment of common dividends

 

 

4,970,652

 

 

522,169

 

 

 







 

 

 

 

 

 

 

 









Net Assets Applicable to Common Shareholders

 

 

 

 

 

 

 









Total increase in net assets applicable to Common Shareholders

 

 

69,305,876

 

 

4,862,007

 

Beginning of year

 

 

555,889,356

 

 

551,027,349

 

 

 







End of year

 

$

625,195,232

 

$

555,889,356

 

 

 







Undistributed net investment income

 

$

14,225,505

 

$

10,445,419

 

 

 








 

 

 

 

See Notes to Financial Statements.

 

 





 

ANNUAL REPORT

AUGUST 31, 2010

43




 


 

Statements of Cash Flows


 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended August 31, 2010

 

BlackRock
Insured Municipal
Income Trust
(BYM)

 

BlackRock
Insured Municipal
Income
Investment Trust
(BAF)

 

BlackRock
Municipal Bond
Investment Trust
(BIE)

 

BlackRock
MuniVest
Fund, Inc.
(MVF)

 











Cash Provided by (Used for) Operating Activities

 

 

 

 

 

 

 

 

 

 















Net increase in net assets resulting from operations, excluding dividends to Preferred Shareholders

 

$

51,371,810

 

$

16,495,152

 

$

7,620,573

 

$

105,867,216

 

Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by (used for) operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

(Increase) decrease in interest receivable

 

 

(299,762

)

 

(67,240

)

 

45,636

 

 

(301,527

)

(Increase) decrease in prepaid expenses

 

 

10,802

 

 

(4,609

)

 

5,807

 

 

8,849

 

(Increase) decrease in other assets

 

 

1,861

 

 

1,162

 

 

(56

)

 

(37,820

)

(Increase) decrease in income receivable — affiliated

 

 

55

 

 

13

 

 

12

 

 

(95

)

Decrease in interest expense and fees payable

 

 

(116,404

)

 

(104,363

)

 

(3,341

)

 

(227,829

)

Increase (decrease) in Officer’s and Trustees’ fees payable

 

 

(1,110

)

 

(255

)

 

632

 

 

39,329

 

Increase (decrease) in other affiliates payable

 

 

 

 

(16

)

 

(7

)

 

2

 

Increase in investment advisory fees payable

 

 

46,887

 

 

14,973

 

 

7,010

 

 

40,910

 

Increase (decrease) in other accrued expenses payable

 

 

(6,382

)

 

(5,511

)

 

(14,590

)

 

10,912

 

Net realized and unrealized gain on investments

 

 

(26,504,024

)

 

(8,250,618

)

 

(4,226,596

)

 

(60,458,886

)

Amortization of premium and accretion and discount on investments

 

 

(4,415,958

)

 

(12,824

)

 

(113,457

)

 

1,338,398

 

Proceeds from sales of long-term investments

 

 

72,624,619

 

 

48,364,740

 

 

36,254,665

 

 

243,462,227

 

Purchases of long-term investments

 

 

(90,473,368

)

 

(60,500,899

)

 

(39,303,871

)

 

(280,055,152

)

Net (purchases) sales of short-term securities

 

 

(2,514,993

)

 

7,991,492

 

 

(1,698,252

)

 

(390,559

)

 

 













Net cash provided by (used for) operating activities

 

 

(275,967

)

 

3,921,197

 

 

(1,425,835

)

 

9,295,975

 

 

 













 

 

 

 

 

 

 

 

 

 

 

 

 

 















Cash Provided by (Used for) Financing Activities

 

 

 

 

 

 

 

 

 















Cash receipts from trust certificates

 

 

22,188,516

 

 

3,498,907

 

 

4,709,085

 

 

87,772,017

 

Cash payments for trust certificates

 

 

 

 

 

 

(255,000

)

 

(60,965,152

)

Cash dividends paid to Common Shareholders

 

 

(21,436,735

)

 

(7,304,240

)

 

(3,025,778

)

 

(35,063,129

)

Cash dividends paid to Preferred Shareholders

 

 

(561,571

)

 

(176,608

)

 

(73,185

)

 

(1,125,710

)

Increase in bank overdraft

 

 

 

 

 

 

 

 

(293

)

 

 













Cash provided by (used for) financing activities

 

 

190,210

 

 

(3,981,941

)

 

1,355,122

 

 

(9,382,267

)

 

 













 

 

 

 

 

 

 

 

 

 

 

 

 

 















Cash

 

 

 

 

 

 

 

 

 

 

 

 

 















Net decrease in cash

 

 

(85,757

)

 

(60,744

)

 

(70,713

)

 

(86,292

)

Cash at beginning of year

 

 

85,757

 

 

60,744

 

 

70,713

 

 

86,292

 

 

 













Cash at end of year

 

 

 

 

 

 

 

 

 

 

 













 

 

 

 

 

 

 

 

 

 

 

 

 

 















Cash Flow Information

 

 

 

 

 

 

 

 

 

 

 

 

 















Cash paid during the year for interest

 

$

619,095

 

$

316,615

 

$

105,456

 

$

1,358,262

 

 

 













 

 

 

 

 

 

 

 

 

 

 

 

 

 















Noncash Financing Activities

 

 

 

 

 

 

 

 

 

 

 

 

 















Capital shares issued in reinvestment of dividends paid to Common Shareholders

 

$

697,165

 

$

67,819

 

$

9,559

 

$

4,970,652

 

 

 













          A Statement of Cash Flows is presented when a Trust had a significant amount of borrowing during the period, based on the average borrowing outstanding in relation to total assets.

 

 

 

 

See Notes to Financial Statements.

 





44

ANNUAL REPORT

AUGUST 31, 2010

 




 


 

Financial Highlights


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BlackRock Insured
Municipal Income Trust (BYM)

 

BlackRock Insured
Municipal Income Investment Trust (BAF)

 

 

 


 



 

 

Year Ended August 31,

 

Year Ended August 31,

 

 

 


 



 

 

2010

 

2009

 

2008

 

2007

 

2006

 

2010

 

2009

 

2008

 

2007

 

2006

 























Per Share Operating Performance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

































Net asset value, beginning of year

 

$

13.55

 

$

14.04

 

$

14.82

 

$

15.54

 

$

15.61

 

$

14.06

 

$

14.23

 

$

14.68

 

$

15.24

 

$

15.26

 

 

 















 
















Net investment income

 

 

0.96

1

 

0.91

1

 

1.04

1

 

1.03

 

 

1.03

 

 

0.94

1

 

0.91

1

 

0.99

1

 

1.01

 

 

1.02

 

Net realized and unrealized gain (loss)

 

 

1.00

 

 

(0.55

)

 

(0.83

)

 

(0.67

)

 

(0.09

)

 

0.95

 

 

(0.27

)

 

(0.46

)

 

(0.56

)

 

(0.07

)

Dividends and distributions to Preferred Shareholders from:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net investment income

 

 

(0.02

)

 

(0.10

)

 

(0.26

)

 

(0.28

)

 

(0.26

)

 

(0.02

)

 

(0.09

)

 

(0.28

)

 

(0.31

)

 

(0.26

)

Net realized gain

 

 

 

 

 

 

 

 

(0.02

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 















 
















Net increase (decrease) from investment operations

 

 

1.94

 

 

0.26

 

 

(0.05

)

 

0.06

 

 

0.68

 

 

1.87

 

 

0.55

 

 

0.25

 

 

0.14

 

 

0.69

 

 

 















 
















Dividends and distributions to Common Shareholders from:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net investment income

 

 

(0.85

)

 

(0.75

)

 

(0.73

)

 

(0.73

)

 

(0.75

)

 

(0.85

)

 

(0.72

)

 

(0.70

)

 

(0.70

)

 

(0.71

)

Net realized gain

 

 

 

 

 

 

 

 

(0.05

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 















 
















Total dividends and distributions to Common Shareholders

 

 

(0.85

)

 

(0.75

)

 

(0.73

)

 

(0.78

)

 

(0.75

)

 

(0.85

)

 

(0.72

)

 

(0.70

)

 

(0.70

)

 

(0.71

)

 

 















 
















Net asset value, end of year

 

$

14.64

 

$

13.55

 

$

14.04

 

$

14.82

 

$

15.54

 

$

15.08

 

$

14.06

 

$

14.23

 

$

14.68

 

$

15.24

 

 

 















 
















Market price, end of year

 

$

15.26

 

$

13.69

 

$

13.19

 

$

14.35

 

$

14.65

 

$

15.64

 

$

13.01

 

$

12.42

 

$

13.55

 

$

13.88

 

 

 















 
















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

































Total Investment Return2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

































Based on net asset value

 

 

14.74

%

 

2.83

%

 

(0.16

)%

 

0.48

%

 

4.92

%

 

13.93

%

 

5.36

%

 

2.22

%

 

1.17

%

 

5.16

%

 

 















 
















Based on market price

 

 

18.42

%

 

10.58

%

 

(3.13

)%

 

3.20

%

 

0.07

%

 

27.70

%

 

11.70

%

 

(3.35

)%

 

2.54

%

 

(4.48

)%

 

 















 
















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

































Ratios to Average Net Assets Applicable to Common Shareholders

 

 

 

 

 

 

 

 

































Total expenses3

 

 

1.15

%

 

1.38

%

 

1.24

%

 

1.12

%

 

1.18

%

 

1.23

%

 

1.60

%

 

1.33

%

 

1.19

%

 

1.23

%

 

 















 
















Total expenses after fees waived and before fees paid indirectly3

 

 

1.06

%

 

1.20

%

 

0.98

%

 

0.80

%

 

0.84

%

 

1.14

%

 

1.40

%

 

1.05

%

 

0.87

%

 

0.92

%

 

 















 
















Total expenses after fees waived and paid indirectly3

 

 

1.06

%

 

1.20

%

 

0.98

%

 

0.80

%

 

0.84

%

 

1.14

%

 

1.40

%

 

1.05

%

 

0.86

%

 

0.90

%

 

 















 
















Total expenses after fees waived and paid indirectly and excluding interest expense and fees3,4

 

 

0.92

%

 

0.93

%

 

0.86

%

 

0.80

%

 

0.84

%

 

0.97

%

 

0.98

%

 

0.91

%

 

0.86

%

 

0.90

%

 

 















 
















Net investment income3

 

 

6.85

%

 

7.23

%

 

7.08

%

 

6.67

%

 

6.75

%

 

6.54

%

 

7.04

%

 

6.71

%

 

6.70

%

 

6.79

%

 

 















 
















Dividends to Preferred Shareholders

 

 

0.15

%

 

0.76

%

 

1.80

%

 

1.79

%

 

1.69

%

 

0.14

%

 

0.66

%

 

1.92

%

 

2.05

%

 

1.74

%

 

 















 
















Net investment income to Common Shareholders

 

 

6.70

%

 

6.47

%

 

5.28

%

 

4.88

%

 

5.06

%

 

6.40

%

 

6.38

%

 

4.79

%

 

4.65

%

 

5.05

%

 

 















 
















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

































Supplemental Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

































 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net assets applicable to Common Shareholders, end of year (000)

 

$

384,563

 

$

355,334

 

$

368,133

 

$

388,275

 

$

407,338

 

$

131,772

 

$

122,825

 

$

124,305

 

$

128,215

 

$

133,106

 

 

 















 
















Preferred Shares outstanding at $25,000 liquidation preference, end of year (000)

 

$

137,250

 

$

137,250

 

$

149,925

 

$

228,975

 

$

228,975

 

$

42,275

 

$

42,275

 

$

44,375

 

$

76,000

 

$

76,000

 

 

 















 
















Portfolio turnover

 

 

13

%

 

18

%

 

39

%

 

17

%

 

60

%

 

26

%

 

45

%

 

29

%

 

13

%

 

9

%

 

 















 
















Asset coverage per Preferred Share at $25,000 liquidation preference, end of year

 

$

95,049

 

$

89,725

 

$

86,398

 

$

67,402

 

$

69,485

 

$

102,926

 

$

97,637

 

$

95,044

 

$

67,187

 

$

68,792

 

 

 















 

















 

 

 

 

1

Based on average common shares outstanding.

 

 

 

 

2

Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Where applicable, total investment returns exclude the effects of any sales charges and include the reinvestment of dividends and distributions.

 

 

 

 

3

Do not reflect the effect of dividends to Preferred Shareholders.

 

 

 

 

4

Interest expense and fees relate to tender option bond trusts. See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to tender option bond trusts.


 

 

 

 

See Notes to Financial Statements.

 

 





 

ANNUAL REPORT

AUGUST 31, 2010

45




 


 

Financial Highlights


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BlackRock Municipal
Bond Trust (BBK)

 

BlackRock Municipal
Bond Investment Trust (BIE)

 

 

 


 



 

 

Year Ended August 31,

 

Year Ended August 31,

 

 

 


 



 

 

2010

 

2009

 

2008

 

2007

 

2006

 

2010

 

2009

 

2008

 

2007

 

2006

 

































Per Share Operating Performance

 

 

 

 

 

 

 

 

































Net asset value, beginning of year

 

$

13.23

 

$

13.96

 

$

15.57

 

$

16.35

 

$

16.36

 

$

14.16

 

$

14.86

 

$

15.45

 

$

16.22

 

$

16.31

 

 

 















 
















Net investment income

 

 

1.14

1

 

1.14

1

 

1.23

1

 

1.20

 

 

1.21

 

 

1.02

1

 

1.03

1

 

1.16

1

 

1.15

 

 

1.17

 

Net realized and unrealized gain (loss)

 

 

1.97

 

 

(0.83

)

 

(1.48

)

 

(0.63

)

 

0.18

 

 

1.27

 

 

(0.76

)

 

(0.51

)

 

(0.67

)

 

(0.06

)

Dividends and distributions to Preferred Shareholders from:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net investment income

 

 

(0.03

)

 

(0.13

)

 

(0.28

)

 

(0.32

)

 

(0.25

)

 

(0.02

)

 

(0.13

)

 

(0.30

)

 

(0.32

)

 

(0.27

)

Net realized gain

 

 

 

 

 

 

(0.03

)

 

 

 

(0.02

)

 

 

 

 

 

 

 

 

 

 

 

 















 
















Net increase (decrease) from investment operations

 

 

3.08

 

 

0.18

 

 

(0.56

)

 

0.25

 

 

1.12

 

 

2.27

 

 

0.14

 

 

0.35

 

 

0.16

 

 

0.84

 

 

 















 
















Dividends and distributions to Common Shareholders from:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net investment income

 

 

(1.02

)

 

(0.91

)

 

(0.95

)

 

(1.03

)

 

(1.04

)

 

(0.92

)

 

(0.84

)

 

(0.94

)

 

(0.93

)

 

(0.93

)

Net realized gain

 

 

 

 

 

 

(0.10

)

 

 

 

(0.09

)

 

 

 

 

 

 

 

 

 

 

 

 















 
















Total dividends and distributions to Common Shareholders

 

 

(1.02

)

 

(0.91

)

 

(1.05

)

 

(1.03

)

 

(1.13

)

 

(0.92

)

 

(0.84

)

 

(0.94

)

 

(0.93

)

 

(0.93

)

 

 















 
















Net asset value, end of year

 

$

15.29

 

$

13.23

 

$

13.96

 

$

15.57

 

$

16.35

 

$

15.51

 

$

14.16

 

$

14.86

 

$

15.45

 

$

16.22

 

 

 















 
















Market price, end of year

 

$

15.79

 

$

13.80

 

$

13.89

 

$

16.50

 

$

17.89

 

$

15.60

 

$

13.20

 

$

14.28

 

$

15.82

 

$

16.70

 

 

 















 
















































Total Investment Return2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

































Based on net asset value

 

 

24.13

%

 

2.52

%

 

(3.77

)%

 

1.09

%

 

7.18

%

 

16.80

%

 

2.43

%

 

2.34

%

 

0.95

%

 

5.40

%

 

 















 
















Based on market price

 

 

22.90

%

 

7.48

%

 

(9.65

)%

 

(2.09

)%

 

11.55

%

 

26.02

%

 

(0.64

)%

 

(3.95

)%

 

0.40

%

 

10.97

%

 

 















 
















































Ratios to Average Net Assets Applicable to Common Shareholders

 

 

 

 

 

 

 

 

































Total expenses3

 

 

1.29

%

 

1.51

%

 

1.39

%

 

1.28

%

 

1.37

%

 

1.57

%

 

1.71

%

 

1.54

%

 

1.43

%

 

1.47

%

 

 















 
















Total expenses after fees waived and before fees paid indirectly3

 

 

1.08

%

 

1.19

%

 

1.01

%

 

0.84

%

 

0.88

%

 

1.35

%

 

1.36

%

 

1.13

%

 

0.98

%

 

1.00

%

 

 















 
















Total expenses after fees waived and paid indirectly3

 

 

1.08

%

 

1.19

%

 

1.01

%

 

0.83

%

 

0.86

%

 

1.35

%

 

1.36

%

 

1.13

%

 

0.96

%

 

0.98

%

 

 















 
















Total expenses after fees waived and paid indirectly and excluding interest expense and fees3,4

 

 

1.05

%

 

1.10

%

 

0.98

%

 

0.83

%

 

0.86

%

 

1.15

%

 

1.25

%

 

1.09

%

 

0.96

%

 

0.98

%

 

 















 
















Net investment income3

 

 

8.08

%

 

9.67

%

 

8.25

%

 

7.36

%

 

7.58

%

 

6.92

%

 

7.98

%

 

7.52

%

 

7.22

%

 

7.28

%

 

 















 
















Dividends to Preferred Shareholders

 

 

0.22

%

 

1.11

%

 

1.87

%

 

1.94

%

 

1.57

%

 

0.15

%

 

1.01

%

 

1.99

%

 

2.01

%

 

1.70

%

 

 















 
















Net investment income to Common Shareholders

 

 

7.86

%

 

8.56

%

 

6.38

%

 

5.42

%

 

6.01

%

 

6.77

%

 

6.97

%

 

5.53

%

 

5.21

%

 

5.58

%

 

 















 
















































Supplemental Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

































Net assets applicable to Common Shareholders, end of year (000)

 

$

159,216

 

$

137,030

 

$

144,116

 

$

159,900

 

$

166,895

 

$

51,708

 

$

47,203

 

$

49,532

 

$

51,384

 

$

53,798

 

 

 















 
















Preferred Shares outstanding at $25,000 liquidation preference, end of year (000)

 

$

79,900

 

$

79,900

 

$

80,500

 

$

90,500

 

$

90,500

 

$

17,850

 

$

17,850

 

$

26,175

 

$

29,775

 

$

29,775

 

 

 















 
















Portfolio turnover

 

 

51

%

 

46

%

 

27

%

 

14

%

 

85

%

 

47

%

 

71

%

 

30

%

 

23

%

 

6

%

 

 















 
















Asset coverage per Preferred Share at $25,000 liquidation preference, end of year

 

$

74,819

 

$

67,877

 

$

69,766

 

$

69,176

 

$

71,114

 

$

97,421

 

$

91,112

 

$

72,318

 

$

68,149

 

$

70,173

 

 

 















 

















 

 

 

 

1

Based on average common shares outstanding.

 

 

 

 

2

Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Where applicable, total investment returns exclude the effects of sales charges and include the reinvestment of dividends and distributions.

 

 

 

 

3

Do not reflect the effect of dividends to Preferred Shareholders.

 

 

 

 

4

Interest expense and fees relate to tender option bond trusts. See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to tender option bond trusts.


 

 

 

 

See Notes to Financial Statements.

 





46

ANNUAL REPORT

AUGUST 31, 2010

 




 


 

Financial Highlights


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BlackRock Municipal
Income Trust II (BLE)

 

BlackRock MuniHoldings
Insured Investment Fund (MFL)

 

 

 


 



 

 

Year Ended August 31,

 

Year Ended August 31,

 

 

 


 



 

 

2010

 

2009

 

2008

 

2007

 

2006

 

2010

 

2009

 

2008

 

2007

 

2006

 























Per Share Operating Performance

 

 

 

 

 

 

 

 

 

 

 

































Net asset value, beginning of year

 

$

12.78

 

$

13.60

 

$

15.08

 

$

15.82

 

$

15.75

 

$

13.57

 

$

13.50

 

$

14.09

 

$

14.75

 

$

15.32

 

 

 















 
















Net investment income

 

 

1.08

1

 

1.09

1

 

1.17

1

 

1.17

 

 

1.18

 

 

0.96

1

 

0.94

1

 

1.01

1

 

1.07

1

 

1.04

1

Net realized and unrealized gain (loss)

 

 

1.77

 

 

(0.95

)

 

(1.50

)

 

(0.66

)

 

0.18

 

 

1.04

 

 

(0.03

)

 

(0.61

)

 

(0.66

)

 

(0.47

)

Dividends to Preferred Shareholders from net investment income

 

 

(0.03

)

 

(0.12

)

 

(0.30

)

 

(0.32

)

 

(0.28

)

 

(0.03

)

 

(0.13

)

 

(0.32

)

 

(0.35

)

 

(0.30

)

 

 















 
















Net increase (decrease) from investment operations

 

 

2.82

 

 

0.02

 

 

(0.63

)

 

0.19

 

 

1.08

 

 

1.97

 

 

0.78

 

 

0.08

 

 

0.06

 

 

0.27

 

 

 















 
















Dividends to Common Shareholders from net investment income

 

 

(0.97

)

 

(0.84

)

 

(0.85

)

 

(0.93

)

 

(1.01

)

 

(0.85

)

 

(0.71

)

 

(0.67

)

 

(0.72

)

 

(0.84

)

 

 















 
















Net asset value, end of year

 

$

14.63

 

$

12.78

 

$

13.60

 

$

15.08

 

$

15.82

 

$

14.69

 

$

13.57

 

$

13.50

 

$

14.09

 

$

14.75

 

 

 















 
















Market price, end of year

 

$

15.22

 

$

13.45

 

$

13.27

 

$

15.05

 

$

17.22

 

$

14.65

 

$

12.63

 

$

11.61

 

$

12.86

 

$

14.37

 

 

 















 
















































Total Investment Return2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

































Based on net asset value

 

 

22.83

%

 

1.54

%

 

(4.15

)%

 

1.02

%

 

7.04

%

 

15.22

%

 

7.36

%

 

1.16

%

 

0.59

%

 

2.10

%

 

 















 
















Based on market price

 

 

21.42

%

 

9.52

%

 

(6.29

)%

 

(7.38

)%

 

16.66

%

 

23.46

%

 

16.19

%

 

(4.68

)%

 

(5.76

)%

 

(3.24

)%

 

 















 
















































Ratios to Average Net Assets Applicable to Common Shareholders

 

 

 

 

 

 

 

 

 

 

 

































Total expenses3

 

 

1.16

%

 

1.36

%

 

1.24

%

 

1.12

%

 

1.18

%

 

1.17

%

 

1.32

%

 

1.54

%

 

1.54

%

 

1.46

%

 

 















 
















Total expenses after fees waived and before fees paid indirectly3

 

 

1.08

%

 

1.19

%

 

1.07

%

 

0.90

%

 

0.94

%

 

1.09

%

 

1.20

%

 

1.42

%

 

1.46

%

 

1.38

%

 

 















 
















Total expenses after fees waived and paid indirectly3

 

 

1.08

%

 

1.19

%

 

1.07

%

 

0.89

%

 

0.94

%

 

1.09

%

 

1.20

%

 

1.42

%

 

1.46

%

 

1.38

%

 

 















 
















Total expenses after fees waived and paid indirectly and excluding interest expense and fees3,4

 

 

0.99

%

 

1.05

%

 

1.00

%

 

0.89

%

 

0.94

%

 

1.01

%

 

1.07

%

 

1.13

%

 

1.12

%

 

1.12

%

 

 















 
















Net investment income3

 

 

7.89

%

 

9.69

%

 

8.09

%

 

7.43

%

 

7.66

%

 

6.85

%

 

7.48

%

 

7.23

%

 

7.30

%

 

7.08

%

 

 















 
















Dividends to Preferred Shareholders

 

 

0.20

%

 

1.07

%

 

2.04

%

 

2.01

%

 

1.78

%

 

0.21

%

 

1.05

%

 

2.31

%

 

2.40

%

 

2.00

%

 

 















 
















Net investment income to Common Shareholders

 

 

7.69

%

 

8.62

%

 

6.05

%

 

5.42

%

 

5.88

%

 

6.64

%

 

6.43

%

 

4.92

%

 

4.90

%

 

5.08

%

 

 















 
















































Supplemental Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

































Net assets applicable to Common Shareholders, end of year (000)

 

$

340,269

 

$

296,070

 

$

314,889

 

$

347,563

 

$

362,608

 

$

553,367

 

$

511,013

 

$

508,698

 

$

530,903

 

$

555,494

 

 

 















 
















Preferred Shares outstanding at $25,000 liquidation preference, end of year (000)

 

$

151,300

 

$

151,300

 

$

166,050

 

$

205,550

 

$

205,550

 

$

274,650

 

$

274,650

 

$

296,125

 

$

363,250

 

$

363,250

 

 

 















 
















Portfolio turnover

 

 

29

%

 

19

%

 

21

%

 

12

%

 

68

%

 

38

%

 

40

%

 

25

%

 

22

%

 

43

%

 

 















 
















Asset coverage per Preferred Share at $25,000 liquidation preference, end of year

 

$

81,226

 

$

73,923

 

$

72,419

 

$

67,279

 

$

69,110

 

$

75,371

 

$

71,516

 

$

67,958

 

$

61,555

 

$

63,240

 

 

 















 

















 

 

 

 

1

Based on average common shares outstanding.

 

 

 

 

2

Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Where applicable, total investment returns exclude the effects of sales charges and include the reinvestment of dividends and distributions.

 

 

 

 

3

Do not reflect the effect of dividends to Preferred Shareholders.

 

 

 

 

4

Interest expense and fees relate to tender option bond trusts. See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to tender option bond trusts.


 

 

 

 

See Notes to Financial Statements.

 

 





 

ANNUAL REPORT

AUGUST 31, 2010

47




 


 

Financial Highlights


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BlackRock MuniVest Fund, Inc. (MVF)

 

 

 


 

 

Year Ended August 31,

 

 

 


 

 

2010

 

2009

 

2008

 

2007

 

2006

 













Per Share Operating Performance

 

 

 

 

 

 

 

 

 

 

 


















Net asset value, beginning of year

 

$

8.98

 

$

8.91

 

$

9.39

 

$

9.93

 

$

10.23

 

 

 


Net investment income1

 

 

0.73

 

 

0.70

 

 

0.67

 

 

0.73

 

 

0.70

 

Net realized and unrealized gain (loss)

 

 

0.97

 

 

(0.03

)

 

(0.45

)

 

(0.55

)

 

(0.23

)

Dividends to Preferred Shareholders from net investment income

 

 

(0.02

)

 

(0.06

)

 

(0.18

)

 

(0.20

)

 

(0.17

)

 

 


Net increase (decrease) from investment operations

 

 

1.68

 

 

0.61

 

 

0.04

 

 

(0.02

)

 

0.30

 

 

 


Dividends to Common Shareholders from net investment income

 

 

(0.65

)

 

(0.54

)

 

(0.52

)

 

(0.52

)

 

(0.60

)

 

 


Net asset value, end of year

 

$

10.01

 

$

8.98

 

$

8.91

 

$

9.39

 

$

9.93

 

 

 
















Market price, end of year

 

$

10.38

 

$

8.91

 

$

8.33

 

$

9.35

 

$

9.66

 

 

 
















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


















Total Investment Return2

 

 

 

 

 

 

 

 

 


















Based on net asset value

 

 

19.31

%

 

8.18

%

 

0.51

%

 

(0.30

)%

 

3.27

%

 

 
















Based on market price

 

 

24.69

%

 

14.81

%

 

(5.63

)%

 

2.05

%

 

1.26

%

 

 
















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


















Ratios to Average Net Assets Applicable to Common Shareholders

 

 


















Total expenses3

 

 

1.22

%

 

1.53

%

 

1.58

%

 

1.66

%

 

1.60

%

 

 
















Total expenses after fees waived and before fees paid indirectly3

 

 

1.22

%

 

1.50

%

 

1.58

%

 

1.66

%

 

1.60

%

 

 
















Total expenses after fees waived and paid indirectly and excluding interest expense and fees3,4

 

 

1.03

%

 

1.14

%

 

1.10

%

 

1.02

%

 

1.04

%

 

 
















Net investment income3

 

 

7.71

%

 

8.74

%

 

7.34

%

 

7.33

%

 

7.11

%

 

 
















Dividends to Preferred Shareholders

 

 

0.19

%

 

0.78

%

 

1.94

%

 

1.98

%

 

1.72

%

 

 
















Net investment income to Common Shareholders

 

 

7.52

%

 

7.96

%

 

5.40

%

 

5.35

%

 

5.39

%

 

 
















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


















Supplemental Data

 

 


















Net assets applicable to Common Shareholders, end of year (000)

 

$

625,195

 

$

555,889

 

$

551,027

 

$

579,079

 

$

609,612

 

 

 
















Preferred Shares outstanding at $25,000 liquidation preference, end of year (000)

 

$

243,825

 

$

243,825

 

$

275,700

 

$

334,000

 

$

334,000

 

 

 
















Portfolio turnover

 

 

25

%

 

31

%

 

41

%

 

39

%

 

56

%

 

 
















Asset coverage per Preferred Share at $25,000 liquidation preference, end of year

 

$

89,106

 

$

81,999

 

$

74,993

 

$

68,380

 

$

70,654

 

 

 

















 

 

 

 

1

Based on average shares outstanding.

 

 

 

 

2

Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Where applicable, total investment returns exclude the effects of sales charges and include the reinvestment of dividends and distributions.

 

 

 

 

3

Do not reflect the effect of dividends to Preferred Shareholders.

 

 

 

 

4

Interest expense and fees relate to tender option bond trusts. See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to tender option bond trusts.


 

 

 

 

See Notes to Financial Statements.

 





48

ANNUAL REPORT

AUGUST 31, 2010

 




 


 

Notes to Financial Statements

1. Organization and Significant Accounting Policies:

BlackRock Insured Municipal Income Trust (“BYM”), BlackRock Insured Municipal Income Investment Trust (“BAF”) (collectively the “Insured Trusts”), BlackRock Municipal Bond Trust (“BBK”), BlackRock Municipal Bond Investment Trust (“BIE”) (collectively the “Bond Trusts”) and BlackRock Municipal Income Trust II (“BLE”) are organized as Delaware statutory trusts. BlackRock MuniHoldings Insured Investment Fund (“MFL”) and BlackRock MuniVest Fund, Inc. (“MVF”) are organized as a Massachusetts business trust and as a Maryland corporation, respectively. BYM, BAF, BBK, BIE, BLE, MFL and MVF are referred to herein collectively as the “Trusts” and individually as a “Trust.” BYM, BBK and BLE are registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as diversified, closed-end management investment companies. BAF, BIE, MFL and MVF are registered under the 1940 Act as non-diversified, closed-end management investment companies. The Trusts’ financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“US GAAP”), which may require management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates. The Trusts determine and make available for publication the net asset value of their Common Shares on a daily basis.

The following is a summary of significant accounting policies followed by the Trusts:

Valuation: The Trusts’ fair value their financial instruments at market value using independent dealers or pricing services under policies approved by each Trust’s Board of Directors/Trustees (the “Board”). Municipal investments (including commitments to purchase such investments on a “when-issued” basis) are valued on the basis of prices provided by dealers or pricing services. In determining the value of a particular investment, pricing services may use certain information with respect to transactions in such investments, quotations from dealers, pricing matrixes, market transactions in comparable investments and information with respect to various relationships between investments. Financial futures contracts traded on exchanges are valued at their last sale price. Short-term securities with remaining maturities of 60 days or less may be valued at amortized cost, which approximates fair value. Investments in open-end investment companies are valued at net asset value each business day.

In the event that application of these methods of valuation results in a price for an investment which is deemed not to be representative of the market value of such investment or is not available, the investment will be valued in accordance with a policy approved by the Board as reflecting fair value (“Fair Value Assets”). When determining the price for Fair Value Assets, the investment advisor and/or the sub-advisor seeks to determine the price that each Trust might reasonably expect to receive from the current sale of that asset in an arm’s-length transaction. Fair value determinations shall be based upon all available factors that the investment advisor and/or sub-advisor deems relevant. The pricing of all Fair Value Assets is subsequently reported to the Board or a committee thereof.

Forward Commitments and When-Issued Delayed Delivery Securities: The Trusts may purchase securities on a when-issued basis and may purchase or sell securities on a forward commitment basis. Settlement of such transactions normally occurs within a month or more after the purchase or sale commitment is made. The Trusts may purchase securities under such conditions with the intention of actually acquiring them, but may enter into a separate agreement to sell the securities before the settlement date. Since the value of securities purchased may fluctuate prior to settlement, the Trusts may be required to pay more at settlement than the security is worth. In addition, the purchaser is not entitled to any of the interest earned prior to settlement. When purchasing a security on a delayed delivery basis, the Trusts assume the rights and risks of ownership of the security, including the risk of price and yield fluctuations. In the event of default by the counterparty, the Trusts’ maximum amount of loss is the unrealized appreciation of unsettled when-issued transactions, which is shown on the Schedules of Investments, if any.

Municipal Bonds Transferred to Tender Option Bond Trusts: The Trusts leverage their assets through the use of tender option bond trusts (“TOBs”). A TOB is established by a third party sponsor forming a special purpose entity, into which one or more funds, or an agent on behalf of the funds, transfers municipal bonds. Other funds managed by the investment advisor may also contribute municipal bonds to a TOB into which a Trust has contributed bonds. A TOB typically issues two classes of beneficial interests: short-term floating rate certificates, which are sold to third party investors, and residual certificates (“TOB Residuals”), which are generally issued to the participating funds that made the transfer. The TOB Residuals held by a Trust include the right of a Trust (1) to cause the holders of a proportional share of the short-term floating rate certificates to tender their certificates at par, including during instances of a rise in short-term interest rates, and (2) to transfer, within seven days, a corresponding share of the municipal bonds from the TOB to a Trust. The TOB may also be terminated without the consent of a Trust upon the occurrence of certain events as defined in the TOB agreements. Such termination events may include the bankruptcy or default of the municipal bond, a substantial downgrade in credit quality of the municipal bond, the inability of the TOB to obtain quarterly or annual renewal of the liquidity support agreement, a substantial decline in market value of the municipal bond or the inability to remarket the short-term floating rate certificates to third party investors.

The cash received by the TOB from the sale of the short-term floating rate certificates, less transaction expenses, is paid to a Trust, which typically invests the cash in additional municipal bonds. Each Trust’s transfer of the municipal bonds to a TOB is accounted for as a secured borrowing, therefore the municipal bonds deposited into a TOB are presented in the Trusts’ Schedules of Investments and the proceeds from the issuance of the short-term floating rate certificates are shown as trust certificates in the Statements of Assets and Liabilities.

Interest income from the underlying municipal bonds is recorded by the Trusts on an accrual basis. Interest expense incurred on the secured borrowing and other expenses related to remarketing, administration and trustee services to a TOB are shown as interest expense and fees in the Statements

 

 

 

 


 

ANNUAL REPORT

AUGUST 31, 2010

49




 


 

Notes to Financial Statements (continued)

of Operations. The short-term floating rate certificates have interest rates that generally reset weekly and their holders have the option to tender certificates to the TOB for redemption at par at each reset date. At August 31, 2010, the aggregate value of the underlying municipal bonds transferred to TOBs, the related liability for trust certificates and the range of interest rates on the liability for trust certificates were as follows:

 

 

 

 

 

 

 

 

 

 

 









 

 

Underlying
Municipal
Bonds
Transferred to
TOBs

 

Liability
for Trust
Certificates

 

Range of
Interest
Rates

 









BYM

 

$

158,164,397

 

$

80,914,512

 

 

0.29% – 0.35%

 

BAF

 

$

57,343,967

 

$

32,196,264

 

 

0.30% – 0.40%

 

BBK

 

$

15,328,877

 

$

7,399,148

 

 

0.28% – 0.35%

 

BIE

 

$

32,148,301

 

$

16,275,832

 

 

0.29% – 0.31%

 

BLE

 

$

72,638,966

 

$

39,252,437

 

 

0.26% – 0.35%

 

MFL

 

$

143,849,359

 

$

71,067,717

 

 

0.29% – 0.45%

 

MVF

 

$

349,462,376

 

$

179,119,846

 

 

0.26% – 0.40%

 












For the year ended August 31, 2010, the Trusts’ average trust certificates outstanding and the daily weighted average interest rate, including fees, were as follows:

 

 

 

 

 

 

 

 







 

 

Average
Trust Certificates
Outstanding

 

Daily Weighted
Average
Interest Rate

 







BYM

 

$

67,322,669

 

 

0.75%

 

BAF

 

$

29,367,683

 

 

0.72%

 

BBK

 

$

6,232,025

 

 

0.71%

 

BIE

 

$

12,722,064

 

 

0.80%

 

BLE

 

$

37,020,265

 

 

0.72%

 

MFL

 

$

51,200,898

 

 

0.83%

 

MVF

 

$

153,486,307

 

 

0.74%

 









Should short-term interest rates rise, the Trusts’ investments in TOBs may adversely affect the Trusts’ net investment income and distributions to shareholders. Also, fluctuations in the market values of municipal bonds deposited into the TOB may adversely affect the Trusts’ net asset values per share.

Zero-Coupon Bonds: The Trusts may invest in zero-coupon bonds, which are normally issued at a significant discount from face value and do not provide for periodic interest payments. Zero-coupon bonds may experience greater volatility in market value than similar maturity debt obligations which provide for regular interest payments.

Segregation and Collateralization: In cases in which the 1940 Act and the interpretive positions of the Securities and Exchange Commission (“SEC”) require that the Trusts either deliver collateral or segregate assets in connection with certain investments (e.g., financial futures contracts) the Trusts will, consistent with SEC rules and/or certain interpretive letters issued by the SEC, segregate collateral or designate on their books and records cash or other liquid securities having a market value at least equal to the amount that would otherwise be required to be physically segregated. Furthermore, based on requirements and agreements with certain exchanges and third party broker-dealers, each party has requirements to deliver/deposit securities as collateral for certain investments.

Investment Transactions and Investment Income: For financial reporting purposes, investment transactions are recorded on the dates the transactions are entered into (the trade dates). Realized gains and losses on investment transactions are determined on the identified cost basis. Dividend income is recorded on the ex-dividend dates. Interest income, including amortization of premium and accretion of discount on debt securities, is recognized on the accrual basis.

Dividends and Distributions: Dividends from net investment income are declared and paid monthly. Distributions of capital gains are recorded on the ex-dividend dates. The amount and timing of dividends and distributions are determined in accordance with federal income tax regulations, which may differ from US GAAP. Dividends and distributions to Preferred Shareholders are accrued and determined as described in Note 7.

Income Taxes: It is each Trust’s policy to comply with the requirements of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies and to distribute substantially all of its taxable income to its shareholders. Therefore, no federal income tax provision is required.

The Trusts file US federal and various state and local tax returns. No income tax returns are currently under examination. The statute of limitations on the Trusts’ US federal tax returns remains open for each of the four years ended August 31, 2010. The statutes of limitations on the Trusts’ state and local tax returns may remain open for an additional year depending upon the jurisdiction. There are no uncertain tax positions that require recognition of a tax liability.

Deferred Compensation and BlackRock Closed-End Share Equivalent Investment Plan: Under the deferred compensation plan approved by each Trust’s Board, non-interested Directors/Trustees (“Independent Trustees”) may defer a portion of their annual complex-wide compensation. Deferred amounts earn an approximate return as though equivalent dollar amounts had been invested in common shares of certain other BlackRock Closed-End Funds selected by the Independent Trustees. This has approximately the same economic effect for the Independent Trustees as if the Independent Trustees had invested the deferred amounts directly in certain other BlackRock Closed-End Funds.

The deferred compensation plan is not funded and obligations thereunder represent general unsecured claims against the general assets of each Trust. Each Trust may, however, elect to invest in common shares of certain other BlackRock Closed-End Funds selected by the Independent Trustees in order to match its deferred compensation obligations. Investments to cover each Trust’s deferred compensation liability, if any, are included in other assets in the Statements of Assets and Liabilities. Dividends and distributions from the BlackRock Closed-End Fund investments under the plan are included in income — affiliated in the Statements of Operations.

Other: Expenses directly related to a Trust are charged to that Trust. Other operating expenses shared by several funds are pro rated among those funds on the basis of relative net assets or other appropriate methods. The Trusts have an arrangement with the custodians whereby fees may be reduced by credits earned on uninvested cash balances, which if applicable

 

 

 

 


50

ANNUAL REPORT

AUGUST 31, 2010

 




 


 

Notes to Financial Statements (continued)

are shown as fees paid indirectly in the Statements of Operations. The custodians impose fees on overdrawn cash balances, which can be offset by accumulated credits earned or may result in additional custody charges.

2. Derivative Financial Instruments:

The Trusts engage in various portfolio investment strategies using derivative contracts both to increase the returns of the Trusts and to economically hedge, or protect, their exposure to certain risks such as interest rate risk. These contracts may be transacted on an exchange.

Losses may arise if the value of the contract decreases due to an unfavorable change in the market rates or value of the underlying instrument or if the counterparty does not perform under the contract. Counterparty risk related to exchange-traded financial futures contracts is minimal because of the protection against defaults provided by the exchange on which they trade.

Financial Futures Contracts: The Trusts purchase or sell financial futures contracts and options on financial futures contracts to gain exposure to, or economically hedge against, changes in interest rates (interest rate risk). Financial futures contracts are contracts for delayed delivery of securities at a specific future date and at a specific price or yield. Pursuant to the contract, the Trusts agree to receive from or pay to the broker an amount of cash equal to the daily fluctuation in value of the contract. Such receipts or payments are known as margin variation and are recognized by the Trusts as unrealized gains or losses. When the contract is closed, the Trusts record a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. The use of financial futures transactions involves the risk of an imperfect correlation in the movements in the price of financial futures contracts, interest rates and the underlying assets.

Derivative Instruments Categorized by Risk Exposure:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



The Effect of Derivative Instruments on the Statements of Operations
Year Ended August 31, 2010*

 



 

 

Net Realized Gain (Loss) from

 



 

 

BYM

 

BAF

 

BBK

 

BIE

 

BLE

 

MFL

 

MVF

 



Interest rate contracts:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial futures contracts

 

$

(74,301

)

$

15,682

 

$

(56,745

)

$

5,532

 

$

157,452

 

$

60,655

 

$

(143,455

)

 

 























 

 

 

 

*

As of August 31, 2010, there were no financial futures contracts outstanding.

For the year ended August 31, 2010, the average quarterly balance of outstanding derivative financial instruments was as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BYM

 

BAF

 

BBK

 

BIE

 

BLE

 

MFL

 

MVF

 

















Financial futures contracts:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average number of contracts purchased

 

 

6

 

 

3

 

 

2

 

 

1

 

 

57

 

 

9

 

 

11

 

Average number of contracts sold

 

 

56

 

 

2

 

 

27

 

 

1

 

 

51

 

 

10

 

 

126

 

Average notional value of contracts purchased

 

$

632,512

 

$

287,506

 

$

258,755

 

$

86,252

 

$

6,557,547

 

$

1,035,020

 

$

1,236,274

 

Average notional value of contracts sold

 

$

6,695,710

 

$

274,144

 

$

3,282,999

 

$

121,842

 

$

6,080,853

 

$

1,187,955

 

$

15,125,313

 

 

 






















3. Investment Advisory Agreement and Other Transactions with Affiliates:

The PNC Financial Services Group, Inc. (“PNC”), Bank of America Corporation (“BAC”) and Barclays Bank PLC (“Barclays”) are the largest stockholders of BlackRock, Inc. (“BlackRock”). Due to the ownership structure, PNC is an affiliate of the Trusts for 1940 Act purposes, but BAC and Barclays are not.

Each Trust entered into an Investment Advisory Agreement with BlackRock Advisors, LLC (the “Manager”), the Trusts’ investment advisor, an indirect, wholly owned subsidiary of BlackRock, to provide investment advisory and administration services.

The Manager is responsible for the management of each Trust’s portfolio and provides the necessary personnel, facilities, equipment and certain other services necessary to the operations of each Trust. For such services, each Trust pays the Manager a monthly fee at the following annual rates of the Trust’s average weekly net assets except MFL and MVF, which are based upon average daily net assets as follows:

 

 

 

 

 






BYM

 

 

0.55

%

BAF

 

 

0.55

%

BBK

 

 

0.65

%

BIE

 

 

0.65

%

BLE

 

 

0.55

%

MFL

 

 

0.55

%

MVF

 

 

0.50

%






Average weekly net assets and average daily net assets are the average weekly value or the average daily value of each Trust’s total assets minus the sum of its accrued liabilities.

The Manager voluntarily agreed to waive a portion of the investment advisory fee with respect to the Insured Trusts, as a percentage of average weekly net assets, at an annual rate of 0.10% through October 2009 and 0.05% through October 2010. With respect to the Bond Trusts, the waiver, as a percentage of average weekly net assets is 0.15% through April 2010, 0.10%

 

 

 

 


 

ANNUAL REPORT

AUGUST 31, 2010

51




 


 

Notes to Financial Statements (continued)

through April 2011 and 0.05% through April 2012. With respect to BLE, the waiver, as a percentage of average weekly assets, is 0.05% through July 2012. With respect to MFL, the Manager voluntarily agreed to waive its investment advisory fees on the proceeds of Preferred Shares and TOBs that exceed 35% of net assets applicable to Common Shareholders. For the year ended August 31, 2010, the Manager waived the following amounts, which are included in fees waived by advisor in the Statements of Operations:

 

 

 

 

 






BYM

 

$

333,781

 

BAF

 

$

115,296

 

BBK

 

$

309,360

 

BIE

 

$

105,542

 

BLE

 

$

253,040

 

MFL

 

$

381,203

 






The Manager voluntarily agreed to waive its investment advisory fees by the amount of investment advisory fees each Trust pays to the Manager indirectly through each Trust’s investment in affiliated money market funds; however, the Manager does not waive its investment advisory fees by the amount of investment advisory fees paid through each Trust’s investment in other affiliated investment companies, if any. These amounts are included in fees waived by advisor in the Statements of Operations. For the year ended August 31, 2010, the amounts waived were as follows:

 

 

 

 

 






BYM

 

$

2,176

 

BAF

 

$

3,936

 

BBK

 

$

1,580

 

BIE

 

$

1,494

 

BLE

 

$

4,742

 

MFL

 

$

10,786

 

MVF

 

$

6,771

 






The Manager entered into sub-advisory agreements with BlackRock Financial Management, Inc. (“BFM”), an affiliate of the Manager, with respect to the Insured Trusts, Bond Trusts and BLE, and BlackRock Investment Management, LLC (“BIM”), an affiliate of the Manager, with respect to MFL and MVF, under which the Manager pays BFM and BIM for services they provide, a monthly fee that is a percentage of the investment advisory fees paid by each Trust to the Manager.

For the year ended August 31, 2010, each Trust reimbursed the Manager for certain accounting services, which are included in accounting services in the Statements of Operations. The reimbursements were as follows:

 

 

 

 

 






BYM

 

$

10,789

 

BAF

 

$

3,718

 

BBK

 

$

4,405

 

BIE

 

$

1,490

 

BLE

 

$

9,566

 

MFL

 

$

16,006

 

MVF

 

$

18,624

 






Certain officers and/or directors of the Trusts are officers and/or directors of BlackRock or its affiliates. The Trusts reimburse the Manager for compensation paid to the Trusts’ Chief Compliance Officer.

4. Investments:

Purchases and sales of investments excluding short-term securities for the year ended August 31, 2010, were as follows:

 

 

 

 

 

 

 

 









 

 

Purchases

 

Sales

 







BYM

 

$

87,657,912

 

$

73,195,036

 

BAF

 

$

60,784,583

 

$

48,966,559

 

BBK

 

$

116,836,993

 

$

120,518,026

 

BIE

 

$

41,743,907

 

$

36,975,133

 

BLE

 

$

161,061,546

 

$

142,957,091

 

MFL

 

$

355,823,168

 

$

313,856,879

 

MVF

 

$

279,619,652

 

$

244,351,259

 









5. Income Tax Information:

Reclassifications: US GAAP requires that certain components of net assets be adjusted to reflect permanent differences between financial and tax reporting. These reclassifications have no effect on net assets or net asset values per share. The following permanent differences as of August 31, 2010 attributable to amortization methods on fixed income securities, distributions received from regulated investment companies and the sale of bonds received from tender option bond trusts were reclassified to the following accounts:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 















 

 

BYM

 

BBK

 

BIE

 

BLE

 

MFL

 

MVF

 















Undistributed net investment income

 

$

(35,346

)

$

(2,589

)

$

(69,854

)

$

(6,308

)

$

(169,175

)

$

(201,887

)

Accumulated net realized gain (loss)

 

$

35,346

 

$

2,589

 

$

69,854

 

$

6,308

 

$

169,175

 

$

201,887

 





















The tax character of distributions paid during the years ended August 31, 2010 and August 31, 2009 was as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

















 

 

BYM

 

BAF

 

BBK

 

BIE

 

BLE

 

MFL

 

MVF

 

















Tax-exempt income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8/31/10

 

$

22,840,254

 

$

7,615,094

 

$

10,923,719

 

$

3,125,313

 

$

23,189,181

 

$

32,988,174

 

$

41,531,992

 

8/31/09

 

 

22,292,827

 

 

7,020,174

 

 

10,735,433

 

 

3,239,201

 

 

22,161,219

 

 

31,445,738

 

 

37,190,644

 
























Ordinary income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8/31/09

 

 

 

 

 

 

 

 

 

 

 

 

97,507

 

 

 
























Total distributions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8/31/10

 

$

22,840,254

 

$

7,615,094

 

$

10,923,719

 

$

3,125,313

 

$

23,189,181

 

$

32,988,174

 

$

41,531,992

 

 

 






















8/31/09

 

$

22,292,827

 

$

7,020,174

 

$

10,735,433

 

$

3,239,201

 

$

22,161,219

 

$

31,543,245

 

$

37,190,644

 

 

 























 

 

 

 


52

ANNUAL REPORT

AUGUST 31, 2010

 




 


 

Notes to Financial Statements (continued)

As of August 31, 2010, the tax components of accumulated net earnings were as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

















 

 

BYM

 

BAF

 

BBK

 

BIE

 

BLE

 

MFL

 

MVF

 

















Undistributed tax-exempt income

 

$

6,034,152

 

$

2,156,870

 

$

2,379,265

 

$

624,508

 

$

5,389,262

 

$

8,587,124

 

$

13,713,923

 

Undistributed ordinary income

 

 

5,507

 

 

1,048

 

 

18,993

 

 

317

 

 

7,756

 

 

5,555

 

 

6,112

 

Capital loss carryforwards

 

 

(13,401,506

)

 

(1,946,495

)

 

(2,997,799

)

 

(1,359,089

)

 

(14,510,781

)

 

(28,039,269

)

 

(7,618,622

)

Net unrealized gains*

 

 

18,976,324

 

 

7,569,563

 

 

11,769,558

 

 

5,194,333

 

 

18,847,417

 

 

48,234,062

 

 

52,175,783

 

 

 






















Total

 

$

11,614,477

 

$

7,780,986

 

$

11,170,017

 

$

4,460,069

 

$

9,733,654

 

$

28,787,472

 

$

58,277,196

 

 

 























 

 

 

 

*

The differences between book-basis and tax-basis net unrealized gains were attributable primarily to the tax deferral of losses on wash sales, the tax deferral of losses on straddles, amortization methods for premiums and discounts on fixed income securities, the accrual of income on securities in default, the deferral of post-October capital losses for tax purposes, the timing and recognition of partnership income, the treatment of residual interests in tender option bond trusts and the deferral of compensation to trustees and directors.

As of August 31, 2010, the Funds had capital loss carryforwards available to offset future realized capital gains through the indicated expiration dates:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

















Expires August 31,

 

BYM

 

BAF

 

BBK

 

BIE

 

BLE

 

MFL

 

MVF

 

















2012

 

 

 

 

 

 

 

 

 

$

5,097,889

 

$

1,836,991

 

 

 

2013

 

 

 

$

178,996

 

 

 

 

 

 

 

 

7,986,138

 

 

 

2015

 

$

1,544,099

 

 

 

 

 

$

30,026

 

 

 

 

 

 

 

2016

 

 

3,217,765

 

 

250,838

 

$

772,344

 

 

 

 

1,648,836

 

 

 

 

 

2017

 

 

6,430,212

 

 

 

 

2,225,455

 

 

 

 

3,397,830

 

 

6,481,433

 

$

7,618,622

 

2018

 

 

2,209,430

 

 

1,516,661

 

 

 

 

1,329,063

 

 

4,366,226

 

 

11,734,707

 

 

 

 

 






















Total

 

$

13,401,506

 

$

1,946,495

 

$

2,997,799

 

$

1,359,089

 

$

14,510,781

 

$

28,039,269

 

$

7,618,622

 

 

 






















6. Concentration, Market and Credit Risk:

Each Trust invests a substantial amount of its assets in issuers located in a single state or limited number of states. Please see the Schedules of Investments for concentrations in specific states.

Many municipalities insure repayment of their bonds, which may reduce the potential for loss due to credit risk. The market value of these bonds may fluctuate for other reasons, including market perception of the value of such insurance, and there is no guarantee that the insurer will meet its obligation.

In the normal course of business, the Trusts invest in securities and enter into transactions where risks exist due to fluctuations in the market (market risk) or failure of the issuer of a security to meet all its obligations (issuer credit risk). The value of securities held by the Trusts may decline in response to certain events, including those directly involving the issuers whose securities are owned by the Trusts; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency and interest rate and price fluctuations. Similar to issuer credit risk, the Trusts may be exposed to counterparty credit risk, or the risk that an entity with which the Trusts have unsettled or open transactions may fail to or be unable to perform on its commitments. The Trusts manage counterparty credit risk by entering into transactions only with counterparties that they believe have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties. Financial assets, which potentially expose the Trusts to market, issuer and counterparty credit risks, consist principally of financial instruments and receivables due from counterparties. The extent of the Trusts’ exposure to market, issuer and counterparty credit risks with respect to these financial assets is generally approximated by their value recorded in the Trusts’ Statements of Assets and Liabilities, less any collateral held by the Trusts.

As of August 31, 2010, BYM invested a significant portion of its assets in the Utilities, County/City/Special District/School District and Transportation sectors. BAF invested a significant portion of its assets in the County/City/ Special District/School District and Utilities sectors. BBK, BIE and MVF each invested a significant portion of their assets in the Health sector and MFL invested a significant portion of its assets in the Transportation and Utilities sectors. Changes in economic conditions affecting the County/City/Special District/School District, Education, Health, State, Transportation and Utilities sectors would have a greater impact on the Trusts and could affect the value, income and/or liquidity of positions in such securities.

7. Capital Share Transactions:

The Insured Trusts, the Bond Trusts and BLE are authorized to issue an unlimited number of shares, including Preferred Shares, par value $0.001 per share, all of which were initially classified as Common Shares. Each Board is authorized, however, to reclassify any unissued shares without approval of Common Shareholders.

MFL is authorized to issue an unlimited number of shares, including 1 million Preferred Shares, par value $0.10 per share.

MVF is authorized to issue 160 million shares, 150 million of which were initial classified as Common Shares, par value $0.10 per share and 10 million of which were classified as Preferred Shares, par value $0.10 per share.

 

 

 

 


 

ANNUAL REPORT

AUGUST 31, 2010

53




 


 

Notes to Financial Statements (continued)

Common Shares

Shares issued and outstanding during the years ended August 31, 2010 and August 31, 2009 increased by the following amounts as a result of dividend reinvestment:

 

 

 

 

 

 

 

 







 

 

Year Ended August 31,

 

 

 


 

 

2010

 

2009

 







BYM

 

 

49,706

 

 

11,216

 

BAF

 

 

4,686

 

 

 

BBK

 

 

54,302

 

 

32,485

 

BIE

 

 

639

 

 

 

BLE

 

 

90,383

 

 

23,758

 

MFL

 

 

9,752

 

 

 

MVF

 

 

526,507

 

 

60,788

 









Preferred Shares

The Preferred Shares are redeemable at the option of each Trust, in whole or in part, on any dividend payment date at their liquidation preference per share plus any accumulated and unpaid dividends whether or not declared. The Preferred Shares are also subject to mandatory redemption at their liquidation preference plus any accumulated and unpaid dividends, whether or not declared, if certain requirements relating to the composition of the assets and liabilities of a Trust, as set forth in each Trust’s Articles Supplementary/Statement of Preferences/Certificate of Designation (the “Governing Instrument”) are not satisfied.

From time to time in the future, each Trust may effect repurchases of its Preferred Shares at prices below their liquidation preference as agreed upon by the Trust and seller. Each Trust also may redeem its Preferred Shares from time to time as provided in the applicable Governing Instrument. Each Trust intends to effect such redemptions and/or repurchases to the extent necessary to maintain applicable asset coverage requirements or for such other reasons as the Board may determine.

The holders of Preferred Shares have voting rights equal to the holders of Common Shares (one vote per share) and will vote together with holders of Common Shares (one vote per share) as a single class. However, the holders of Preferred Shares, voting as a separate class, are also entitled to elect two Trustees for each Trust. In addition, the 1940 Act requires that along with approval by shareholders 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, (b) change a Trust’s sub-classification as a closed-end investment company or change its fundamental investment restrictions or (c) change its business so as to cease to be an investment company.

The Trusts had the following series of Preferred Shares outstanding, effective yields and reset frequency as of August 31, 2010:

 

 

 

 

 

 

 

 

 

 

 

 

 











 

 

Series

 

Preferred
Shares

 

Effective
Yield

 

Reset
Frequency
Days

 











BYM

 

 

M-7

 

1,830

 

 

0.46%

 

7

 

 

 

 

 

R-7

 

1,830

 

 

0.46%

 

7

 

 

 

 

 

F-7

 

1,830

 

 

0.46%

 

7

 

 

 

BAF

 

 

M-7

 

1,691

 

 

0.46%

 

7

 

 

BBK

 

 

T-7

 

1,598

 

 

0.46%

 

7

 

 

 

 

 

R-7

 

1,598

 

 

0.46%

 

7

 

 

 

BIE

 

 

W-7

 

714

 

 

0.46%

 

7

 

 

BLE

 

 

M-7

 

1,513

 

 

0.46%

 

7

 

 

 

 

 

T-7

 

1,513

 

 

0.46%

 

7

 

 

 

 

 

W-7

 

1,513

 

 

0.46%

 

7

 

 

 

 

 

R-7

 

1,513

 

 

0.46%

 

7

 

 

 

MFL

 

 

A

 

1,584

 

 

0.46%

 

7

 

 

 

 

 

B

 

2,642

 

 

0.46%

 

7

 

 

 

 

 

C

 

2,601

 

 

0.46%

 

7

 

 

 

 

 

D

 

1,633

 

 

0.46%

 

7

 

 

 

 

 

E

 

2,526

 

 

0.46%

 

7

 

 

 

MVF

 

 

A

 

1,460

 

 

0.25%

 

28

 

 

 

 

 

B

 

1,460

 

 

0.25%

 

28

 

 

 

 

 

C

 

1,460

 

 

0.24%

 

28

 

 

 

 

 

D

 

1,460

 

 

0.29%

 

28

 

 

 

 

 

E

 

2,190

 

 

0.25%

 

7

 

 

 

 

 

F

 

1,723

 

 

1.52%

 

7

 

 














Dividends on seven-day and 28-day Preferred Shares are cumulative at a rate which is reset every seven or 28 days, respectively, based on the results of an auction. If the Preferred Shares fail to clear the auction on an auction date, each Trust is required to pay the maximum applicable rate on the Preferred Shares to holders of such shares for successive dividend periods until such time as the shares are successfully auctioned. The maximum applicable rate on all series of Preferred Shares (except for MVF) is the higher of 110% of AA commercial paper rate or 110% of 90% of the Kenny S&P 30-Day High Grade Index rate divided by 1.00 minus the marginal tax rate. The maximum applicable rate on the Preferred Shares for MVF for Series A, B, C, D and E is 110% of the interest equivalent of the 60-day commercial paper rate and for Series F is the higher of 110% plus or times (i) the Telerate/BBA LIBOR or (ii) 90% of the Kenny S&P 30-day High Grade Index rate divided by 1.00 minus the marginal tax rate. The low, high and average dividend rates on the Preferred Shares for each Trust for the year ended August 31, 2010 were as follows:

 

 

 

 

 

 

 

 

 

 











 

 

Series

 

Low

 

High

 

Average

 











BYM

 

M-7

 

0.24%

 

0.56%

 

0.41%

 

 

 

R-7

 

0.24%

 

0.56%

 

0.41%

 

 

 

F-7

 

0.24%

 

0.56%

 

0.41%

 

 

BAF

 

M-7

 

0.24%

 

0.56%

 

0.41%

 

BBK

 

T-7

 

0.26%

 

0.53%

 

0.41%

 

 

 

R-7

 

0.24%

 

0.56%

 

0.41%

 

 

BIE

 

W-7

 

0.26%

 

0.53%

 

0.41%

 

 

BLE

 

M-7

 

0.24%

 

0.56%

 

0.41%

 

 

 

T-7

 

0.26%

 

0.53%

 

0.41%

 

 

 

W-7

 

0.26%

 

0.53%

 

0.41%

 

 

 

R-7

 

0.24%

 

0.56%

 

0.40%

 












 

 

 

 


54

ANNUAL REPORT

AUGUST 31, 2010

 




 


 

Notes to Financial Statements (concluded)


 

 

 

 

 

 

 

 

 

 

 

 

 

 











 

 

Series

 

Low

 

High

 

Average

 











MFL

 

 

A-7

 

0.26%

 

0.52%

 

0.41%

 

 

 

 

B-7

 

0.24%

 

0.56%

 

0.41%

 

 

 

 

C-7

 

0.24%

 

0.56%

 

0.41%

 

 

 

 

D-7

 

0.26%

 

0.53%

 

0.41%

 

 

 

 

E-7

 

0.24%

 

0.56%

 

0.41%

 

 

MVF

 

 

A

 

0.15%

 

0.39%

 

0.25%

 

 

 

 

B

 

0.13%

 

0.45%

 

0.24%

 

 

 

 

C

 

0.14%

 

0.45%

 

0.24%

 

 

 

 

D

 

0.14%

 

0.42%

 

0.25%

 

 

 

 

E

 

0.13%

 

0.45%

 

0.25%

 

 

 

 

F

 

1.34%

 

1.57%

 

1.47%

 












Since February 13, 2008, the Preferred Shares of the Trusts failed to clear any of their auctions. As a result, the Preferred Shares dividend rates were reset to the maximum applicable rate, which ranged from 0.13% to 1.57% for the year ended August 31, 2010. A failed auction is not an event of default for the Trusts but it has a negative impact on the liquidity of Preferred Shares. A failed auction occurs when there are more sellers of a Trust’s auction rate preferred shares than buyers. It is impossible to predict how long this imbalance will last. A successful auction for the Trusts’ Preferred Shares may not occur for some time, if ever, and even if liquidity does resume, holders of the Preferred Shares may not have the ability to sell the Preferred Shares at their liquidation preference.

The Trusts may not declare dividends or make other distributions on Common Shares or purchase any such shares if, at the time of the declaration, distribution or purchase, asset coverage with respect to the outstanding Preferred Shares is less than 200%.

The Trusts pay commissions of 0.15% on the aggregate principal amount of all shares that fail to clear their auctions and 0.25% on the aggregate principal amount of all shares that successfully clear their auctions. Certain broker dealers have individually agreed to reduce commissions for failed auctions.

During the year ended August 31, 2009, the Trusts announced the following redemptions of Preferred Shares at a price of $25,000 per share plus any accrued and unpaid dividends through the redemption date:

 

 

 

 

 

 

 

 

 

 

 

 

 

 















 

 

 

Series

 

 

Redemption
Date

 

 

Shares
Redeemed

 

 

Aggregate
Principal

 















BYM

 

 

M-7

 

 

7/14/09

 

 

169

 

$

4,225,000

 

 

 

 

R-7

 

 

7/10/09

 

 

169

 

$

4,225,000

 

 

 

 

F-7

 

 

7/13/09

 

 

169

 

$

4,225,000

 

 

BAF

 

 

M-7

 

 

7/14/09

 

 

84

 

$

2,100,000

 

 

BBK

 

 

T-7

 

 

7/08/09

 

 

12

 

$

300,000

 

 

 

 

R-7

 

 

7/10/09

 

 

12

 

$

300,000

 

 

BIE

 

 

W-7

 

 

7/09/09

 

 

333

 

$

8,325,000

 

 

BLE

 

 

M-7

 

 

7/14/09

 

 

147

 

$

3,675,000

 

 

 

 

T-7

 

 

7/08/09

 

 

148

 

$

3,700,000

 

 

 

 

W-7

 

 

7/09/09

 

 

147

 

$

3,675,000

 

 

 

 

R-7

 

 

7/10/09

 

 

148

 

$

3,700,000

 

 

MFL

 

 

A

 

 

7/08/09

 

 

124

 

$

3,100,000

 

 

 

 

B

 

 

7/06/09

 

 

207

 

$

5,175,000

 

 

 

 

C

 

 

7/07/09

 

 

203

 

$

5,075,000

 

 

 

 

D

 

 

7/09/09

 

 

128

 

$

3,200,000

 

 

 

 

E

 

 

7/06/09

 

 

197

 

$

4,925,000

 
















 

 

 

 

 

 

 

 

 

 

 

 

 

 















 

 

 

Series

 

 

Redemption
Date

 

 

Shares
Redeemed

 

 

Aggregate
Principal

 















MVF

 

 

A

 

 

6/29/09

 

 

191

 

$

4,775,000

 

 

 

 

B

 

 

7/06/09

 

 

191

 

$

4,775,000

 

 

 

 

C

 

 

7/13/09

 

 

191

 

$

4,775,000

 

 

 

 

D

 

 

7/20/09

 

 

191

 

$

4,775,000

 

 

 

 

E

 

 

6/29/09

 

 

286

 

$

7,150,000

 

 

 

 

F

 

 

7/08/09

 

 

225

 

$

5,625,000

 















The Trusts financed the Preferred Share redemptions with cash received from TOB transactions.

Preferred Shares issued and outstanding remained constant during the year ended August 31, 2010 for all Trusts.

8. Subsequent Events:

Management’s evaluation of the impact of all subsequent events on the Trusts’ financial statements was completed through the date the financial statements were issued and the following items were noted:

Each Trust paid a net investment income dividend on October 1, 2010 to Common Shareholders of record on September 15, 2010 as follows:

 

 

 

 

 





 

 

Common
Dividend
Per Share

 





BYM

 

$

0.0770

 

BAF

 

$

0.0735

 

BBK

 

$

0.0860

 

BIE

 

$

0.0788

 

BLE

 

$

0.0820

 

MFL

 

$

0.0750

 

MVF

 

$

0.0570

 






The dividends declared on Preferred Shares for the period September 1, 2010 to September 30, 2010 were as follows:

 

 

 

 

 

 

 

 









 

 

 

Series

 

 

Dividends
Declared

 









BYM

 

 

M-7

 

$

16,113

 

 

 

 

R-7

 

$

16,115

 

 

 

 

F-7

 

$

16,188

 

 

BAF

 

 

M-7

 

$

14,889

 

 

BBK

 

 

T-7

 

$

13,891

 

 

 

 

R-7

 

$

14,072

 

 

BIE

 

 

W-7

 

$

6,272

 

 

BLE

 

 

M-7

 

$

13,324

 

 

 

 

T-7

 

$

13,152

 

 

 

 

W-7

 

$

13,290

 

 

 

 

R-7

 

$

13,324

 

 

MFL

 

 

A-7

 

$

13,769

 

 

 

 

B-7

 

$

23,371

 

 

 

 

C-7

 

$

22,902

 

 

 

 

D-7

 

$

14,346

 

 

 

 

E-7

 

$

22,244

 

 

MVF

 

 

A

 

$

7,829

 

 

 

 

B

 

$

7,587

 

 

 

 

C

 

$

7,793

 

 

 

 

D

 

$

7,583

 

 

 

 

E

 

$

11,490

 

 

 

 

F

 

$

52,542

 










 

 

 

 


 

ANNUAL REPORT

AUGUST 31, 2010

55



 


 

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Trustees/Directors of
BlackRock Insured Municipal Income Trust,
BlackRock Insured Municipal Income Investment Trust,
BlackRock Municipal Bond Trust,
BlackRock Municipal Bond Investment Trust,
BlackRock Municipal Income Trust II,
BlackRock MuniHoldings Insured Investment Fund,
and BlackRock MuniVest Fund, Inc. (collectively, the “Trusts”):

We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of BlackRock Insured Municipal Income Trust, BlackRock Insured Municipal Income Investment Trust, BlackRock Municipal Bond Trust, BlackRock Municipal Bond Investment Trust, BlackRock Municipal Income Trust II, BlackRock MuniHoldings Insured Investment Fund, and BlackRock MuniVest Fund, Inc. as of August 31, 2010, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, and for BlackRock Insured Municipal Income Trust, BlackRock Insured Municipal Income Investment Trust, BlackRock Municipal Bond Investment Trust, and BlackRock MuniVest Fund, Inc. the statement of cash flows for the year then ended. These financial statements and financial highlights are the responsibility of the Trusts’ management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Trusts are not required to have, nor were we engaged to perform an audit of their internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Trusts’ internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of August 31, 2010, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial positions of the Trusts as of August 31, 2010, the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, and for BlackRock Insured Municipal Income Trust, BlackRock Insured Municipal Income Investment Trust, BlackRock Municipal Bond Investment Trust, and BlackRock MuniVest Fund, Inc. the statement of cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

Deloitte & Touche LLP
Princeton, New Jersey
October 29, 2010

 


Important Tax Information (Unaudited)


All of the net investment income distributions paid by BYM, BAF, BBK, BIE, BLE, MFL and MVF during the taxable year ended August 31, 2010 qualify as tax-exempt interest dividends for federal income tax purposes.

 

 

 

 





56

ANNUAL REPORT

AUGUST 31, 2010

 




 


 

Disclosure of Investment Advisory Agreements and Sub-Advisory Agreements

The Board of Directors and the Board of Trustees, as the case may be (each, a “Board,” and, collectively, the “Boards,” and the members of which are referred to as “Board Members”) of each of BlackRock Insured Municipal Income Trust (“BYM”), BlackRock Insured Municipal Income Investment Trust (“BAF”), BlackRock Municipal Bond Trust (“BBK”), BlackRock Municipal Bond Investment Trust (“BIE”), BlackRock Municipal Income Trust II (“BLE”), BlackRock MuniHoldings Insured Investment Fund (“MFL”) and BlackRock MuniVest Fund, Inc. (“MVF” and, together with BYM, BAF, BBK, BIE, BLE and MFL, each, a “Trust,” and, collectively, the “Trusts”) met on April 8, 2010 and May 13 – 14, 2010 to consider the approval of each Trust’s investment advisory agreement (each, an “Advisory Agreement”) with BlackRock Advisors, LLC (the “Manager”), each Trust’s investment advisor. Each Board also considered the approval of the sub-advisory agreement (each, a “Sub-Advisory Agreement”) between the Manager and BlackRock Financial Management, Inc. or BlackRock Investment Management, LLC, as applicable (each, a “Sub-Advisor”), with respect to its Trust. The Manager and the Sub-Advisors are referred to herein as “BlackRock.” The Advisory Agreements and the Sub-Advisory Agreements are referred to herein as the “Agreements.”

Activities and Composition of the Board

The Board of each Trust consists of ten individuals, eight of whom are not “interested persons” of such Trust as defined in the Investment Company Act of 1940 (the “1940 Act”) (the “Independent Board Members”). The Board Members are responsible for the oversight of the operations of each Trust and perform the various duties imposed on the directors of investment companies by the 1940 Act. The Independent Board Members have retained independent legal counsel to assist them in connection with their duties. The Chairman of the Boards is an Independent Board Member. The Boards have established five standing committees: an Audit Committee, a Governance and Nominating Committee, a Compliance Committee, a Performance Oversight Committee and an Executive Committee, each of which is composed of Independent Board Members (except for the Executive Committee, which also has one interested Board Member) and is chaired by an Independent Board Member. The Boards also have two ad hoc committees, the Joint Product Pricing Committee, which consists of Independent Board Members and the directors/trustees of the boards of certain other BlackRock-managed funds, who are not “interested persons” of their respective funds, and the Ad Hoc Committee on Auction Market Preferred Shares.

The Agreements

Pursuant to the 1940 Act, the Boards are required to consider the continuation of the Agreements on an annual basis. In connection with this process, the Boards assessed, among other things, the nature, scope and quality of the services provided to the Trusts by the personnel of BlackRock and its affiliates, including investment management, administrative and shareholder services, oversight of fund accounting and custody, marketing services and assistance in meeting applicable legal and regulatory requirements.

From time to time throughout the year, each Board, acting directly and through its committees, considered at each of its meetings factors that are relevant to its annual consideration of the renewal of the Agreements, including the services and support provided by BlackRock to the respective Trust and its shareholders. Among the matters the Board considered were: (a) investment performance for one-, three- and five-year periods, as applicable, against peer funds, and applicable benchmarks, if any, as well as senior management’s and portfolio managers’ analysis of the reasons for any over performance or underperformance against a Trust’s peers and/or benchmark, as applicable; (b) fees, including advisory and other amounts paid to BlackRock and its affiliates by each Trust for services such as call center and fund accounting; (c) each Trust’s operating expenses; (d) the resources devoted to and compliance reports relating to each Trust’s investment objective, policies and restrictions; (e) each Trust’s compliance with its Code of Ethics and compliance policies and procedures; (f) the nature, cost and character of non-investment management services provided by BlackRock and its affiliates; (g) BlackRock’s and other service providers’ internal controls; (h) BlackRock’s implementation of the proxy voting policies approved by the Boards; (i) execution quality of portfolio transactions; (j) BlackRock’s implementation of each Trust’s valuation and liquidity procedures; (k) an analysis of contractual and actual management fees for products with similar investment objectives across the open-end fund, closed-end fund and institutional account product channels, as applicable; and (l) periodic updates on BlackRock’s business.

Board Considerations in Approving the Agreements

The Approval Process: Prior to the April 8, 2010 meeting, the Boards requested and received materials specifically relating to the Agreements. The Boards are engaged in a process with BlackRock to periodically review the nature and scope of the information provided to better assist their deliberations. The materials provided in connection with the April meeting included: (a) information independently compiled and prepared by Lipper, Inc. (“Lipper”) on Trust fees and expenses, and the investment performance of each Trust as compared with a peer group of funds as determined by Lipper and a customized peer group selected by BlackRock, as applicable (collectively, “Peers”); (b) information on the profitability of the Agreements to BlackRock and a discussion of fall-out benefits to BlackRock and its affiliates and significant shareholders; (c) a general analysis provided by BlackRock concerning investment advisory fees charged to other clients, such as institutional clients and open-end funds, under similar investment mandates; (d) the impact of economies of scale; (e) a summary of aggregate amounts paid by each Trust to BlackRock and; (f) if applicable, a comparison of management fees to similar BlackRock closed-end funds, as classified by Lipper.

At an in-person meeting held on April 8, 2010, the Boards reviewed materials relating to their consideration of the Agreements. As a result of the discussions that occurred during the April 8, 2010 meeting, the Boards presented BlackRock with questions and requests for additional information and BlackRock responded to these requests with additional written information in advance of the May 13 – 14, 2010 Board meeting.

At an in-person meeting held on May 13 – 14, 2010, each Trust’s Board, including the Independent Board Members, unanimously approved the continuation of the Advisory Agreement between the Manager and each respective Trust and the Sub-Advisory Agreement between the Manager and the Sub-Advisor with respect to each Trust, each for a one-year term ending June 30, 2011. In approving the continuation of the Agreements, the Boards considered: (a) the nature, extent and quality of the services provided by BlackRock; (b) the investment performance of each Trust and BlackRock;

 

 

 

 





 

ANNUAL REPORT

AUGUST 31, 2010

57




 


 

Disclosure of Investment Advisory Agreements and Sub-Advisory Agreements (continued)

(c) the advisory fee and the cost of the services and profits to be realized by BlackRock and its affiliates from their relationship with each Trust; (d) economies of scale; and (e) other factors deemed relevant by the Board Members.

The Boards also considered other matters they deemed important to the approval process, such as services related to the valuation and pricing of each Trust’s portfolio holdings, direct and indirect benefits to BlackRock and its affiliates and significant shareholders from their relationship with each Trust and advice from independent legal counsel with respect to the review process and materials submitted for the Boards’ review. The Boards noted the willingness of BlackRock personnel to engage in open, candid discussions with the Boards. The Boards did not identify any particular information as controlling, and each Board Member may have attributed different weights to the various items considered.

A. Nature, Extent and Quality of the Services Provided by BlackRock: The Boards, including the Independent Board Members, reviewed the nature, extent and quality of services provided by BlackRock, including the investment advisory services and the resulting performance of each Trust. Throughout the year, the Boards compared each Trust’s performance to the performance of a comparable group of closed-end funds, and the performance of a relevant benchmark, if any. The Boards met with BlackRock’s senior management personnel responsible for investment operations, including the senior investment officers. The Boards also reviewed the materials provided by each Trust’s portfolio management team discussing each Trust’s performance and each Trust’s investment objective, strategies and outlook.

The Boards considered, among other factors, the number, education and experience of BlackRock’s investment personnel generally and each Trust’s portfolio management team, investments by portfolio managers in the funds they manage, BlackRock’s portfolio trading capabilities, BlackRock’s use of technology, BlackRock’s commitment to compliance, BlackRock’s credit analysis capabilities, BlackRock’s risk analysis capabilities and BlackRock’s approach to training and retaining portfolio managers and other research, advisory and management personnel. The Boards also reviewed a general description of BlackRock’s compensation structure with respect to each Trust’s portfolio management team and BlackRock’s ability to attract and retain high-quality talent.

In addition to advisory services, the Boards considered the quality of the administrative and non-investment advisory services provided to each Trust. BlackRock and its affiliates and significant shareholders provide each Trust with certain administrative and other services (in addition to any such services provided to each Trust by third parties) and officers and other personnel as are necessary for the operations of each Trust. In addition to investment advisory services, BlackRock and its affiliates provide each Trust with other services, including: (i) preparing disclosure documents, such as the prospectus and the statement of additional information in connection with the initial public offering and periodic shareholder reports; (ii) preparing communications with analysts to support secondary market trading of each Trust; (iii) assisting with daily accounting and pricing; (iv) preparing periodic filings with regulators and stock exchanges; (v) overseeing and coordinating the activities of other service providers; (vi) organizing Board meetings and preparing the materials for such Board meetings; (vii) providing legal and compliance support; and (viii) performing other administrative functions necessary for the operation of each Trust, such as tax reporting, fulfilling regulatory filing requirements, and call center services. The Boards reviewed the structure and duties of BlackRock’s fund administration, accounting, legal and compliance departments and considered BlackRock’s policies and procedures for assuring compliance with applicable laws and regulations.

B. The Investment Performance of the Trusts and BlackRock: The Boards, including the Independent Board Members, also reviewed and considered the performance history of each Trust. In preparation for the April 8, 2010 meeting, the Boards were provided with reports, independently prepared by Lipper, which included a comprehensive analysis of each Trust’s performance. The Boards also reviewed a narrative and statistical analysis of the Lipper data that was prepared by BlackRock, which analyzed various factors that affect Lipper’s rankings. In connection with their review, the Boards received and reviewed information regarding the investment performance of each Trust as compared to a representative group of similar funds as determined by Lipper and to all funds in each Trust’s applicable Lipper category and in the case of BBK, BIE, BLE and MVF, a customized peer group selected by BlackRock. The Boards were provided with a description of the methodology used by Lipper to select peer funds. The Boards regularly review the performance of each Trust throughout the year.

The Board of BAF noted that BAF performed below the median of its Lipper Performance Composite in the one- and three-year periods reported, but that BAF performed better than or equal to the median of its Lipper Performance Composite in the five-year period reported. The Board of BAF and BlackRock reviewed the reasons for BAF’s underperformance during the one- and three-year periods compared with its Peers. The Board of BAF was informed that, among other things, while BAF’s portfolio managers have reduced BAF’s Florida exposure, BAF remains over-weighted in Florida holdings versus its Peers, which has hindered BAF’s performance, as the state of Florida continues to have budget deficit concerns and a very weak housing market.

The Board of BAF and BlackRock discussed BlackRock’s strategy for improving BAF’s performance and BlackRock’s commitment to providing the resources necessary to assist BAF’s portfolio managers and to improve BAF’s performance, in part through the repositioning of BAF’s portfolio.

The Boards of BYM, BBK, BLE and MVF noted that, in general, BYM, BBK, BLE and MVF performed better than their respective Peers in that the performance of BYM was at or above the median of its Lipper Performance Composite in each of the one-, three- and five-year periods reported and that the performance of each of BBK, BLE and MVF were at or above the median of their Customized Lipper Peer Group Composite in each of the one-, three- and five-year periods reported.

The Boards of BIE and MFL noted that, in general, BIE and MFL performed better than their respective Peers in that the performance of BIE was at or above the median of its Customized Lipper Peer Group Composite in two of the one-, three- and five-year periods reported and that the performance of MFL was at or above the median of its Lipper Performance Composite in two of the one-, three- and five-year periods reported.

 

 

 

 





58

ANNUAL REPORT

AUGUST 31, 2010

 




 


 

Disclosure of Investment Advisory Agreements and Sub-Advisory Agreements (continued)

The Boards noted that BlackRock has made changes to the organization of the overall fixed income group management structure designed to result in a strengthened leadership team with clearer accountability.

C. Consideration of the Advisory Fees and the Cost of the Services and Profits to be Realized by BlackRock and its Affiliates from their Relationship with the Trusts: The Boards, including the Independent Board Members, reviewed each Trust’s contractual advisory fee rate compared with the other funds in its Lipper category. The Boards also compared each Trust’s total expenses, as well as actual management fees, to those of other funds in its Lipper category. The Boards considered the services provided and the fees charged by BlackRock to other types of clients with similar investment mandates, including separately managed institutional accounts.

The Boards received and reviewed statements relating to BlackRock’s financial condition and profitability with respect to the services it provided each Trust. The Boards were also provided with a profitability analysis that detailed the revenues earned and the expenses incurred by BlackRock for services provided to each Trust. The Boards reviewed BlackRock’s profitability with respect to each Trust and other funds the Boards currently oversee for the year ended December 31, 2009 compared to available aggregate profitability data provided for the year ended December 31, 2008. The Boards reviewed BlackRock’s profitability with respect to other fund complexes managed by the Manager and/or its affiliates. The Boards reviewed BlackRock’s assumptions and methodology of allocating expenses in the profitability analysis, noting the inherent limitations in allocating costs among various advisory products. The Boards recognized that profitability may be affected by numerous factors including, among other things, fee waivers and expense reimbursements by the Manager, the types of funds managed, expense allocations and business mix, and the difficulty of comparing profitability as a result of those factors.

The Boards noted that, in general, individual fund or product line profitability of other advisors is not publicly available. Nevertheless, to the extent such information was available, the Boards considered BlackRock’s overall operating margin, in general, compared to the operating margin for leading investment management firms whose operations include advising closed-end funds, among other product types. That data indicates that operating margins for BlackRock with respect to its registered funds are generally consistent with margins earned by similarly situated publicly traded competitors. In addition, the Boards considered, among other things, certain third party data comparing BlackRock’s operating margin with that of other publicly traded asset management firms. That third party data indicates that larger asset bases do not, in themselves, translate to higher profit margins.

In addition, the Boards considered the cost of the services provided to each Trust by BlackRock, and BlackRock’s and its affiliates’ profits relating to the management and distribution of each Trust and the other funds advised by BlackRock and its affiliates. As part of their analysis, the Boards reviewed BlackRock’s methodology in allocating its costs to the management of each Trust. The Boards also considered whether BlackRock has the financial resources necessary to attract and retain high-quality investment management personnel to perform its obligations under the Agreements and to continue to provide the high quality of services that is expected by the Boards.

The Board of each Trust noted that its Trust’s contractual management fee rate was lower than or equal to the median contractual management fee rate paid by the Trust’s Peers, in each case, before taking into account any expense reimbursements or fee waivers.

D. Economies of Scale: The Boards, including the Independent Board Members, considered the extent to which economies of scale might be realized as the assets of each Trust increase. The Boards also considered the extent to which each Trust benefits from such economies and whether there should be changes in the advisory fee rate or structure in order to enable each Trust to participate in these economies of scale, for example through the use of breakpoints in the advisory fee based upon the asset level of each Trust.

The Boards noted that most closed-end fund complexes do not have fund level breakpoints because closed-end funds generally do not experience substantial growth after the initial public offering and each fund is managed independently consistent with its own investment objectives. The Boards noted that only one closed-end fund in the Fund Complex has breakpoints in its fee structure. Information provided by Lipper also revealed that only one closed-end fund complex with total closed-end fund nets assets exceeding $10 billion, as of December 31, 2009, used a complex level breakpoint structure.

E. Other Factors Deemed Relevant by the Board Members: The Boards, including the Independent Board Members, also took into account other ancillary or “fall-out” benefits that BlackRock or its affiliates and significant shareholders may derive from their respective relationships with the Trusts, both tangible and intangible, such as BlackRock’s ability to leverage its investment professionals who manage other portfolios, an increase in BlackRock’s profile in the investment advisory community, and the engagement of BlackRock’s affiliates and significant shareholders as service providers to each Trust, including for administrative and distribution services. The Boards also considered BlackRock’s overall operations and its efforts to expand the scale of, and improve the quality of, its operations. The Boards also noted that BlackRock may use and benefit from third party research obtained by soft dollars generated by certain mutual fund transactions to assist in managing all or a number of its other client accounts. The Boards further noted that BlackRock completed the acquisition of a complex of exchange-traded funds (“ETFs”) on December 1, 2009, and that BlackRock’s funds may invest in such ETFs without any offset against the management fees payable by the funds to BlackRock.

In connection with its consideration of the Agreements, the Boards also received information regarding BlackRock’s brokerage and soft dollar practices. The Boards received reports from BlackRock which included information on brokerage commissions and trade execution practices throughout the year.

The Boards noted the competitive nature of the closed-end fund marketplace, and that shareholders are able to sell their respective Trust shares in the secondary market if they believe that the Trust’s fees and expenses are too high or if they are dissatisfied with the performance of the Trust.

 

 

 

 





 

ANNUAL REPORT

AUGUST 31, 2010

59




 


 

Disclosure of Investment Advisory Agreements and Sub-Advisory Agreements (concluded)

Conclusion

The Boards, including the Independent Board Members, unanimously approved the continuation of the Advisory Agreement between the Manager and each Trust for a one-year term ending June 30, 2011 and the Sub-Advisory Agreement between the Manager and the applicable Sub-Advisor, with respect to each Trust, for a one-year term ending June 30, 2011. As part of its approval, each Board considered the discussions of BlackRock’s fee structure, as it applies to its respective Trust, being conducted by the ad hoc Joint Product Pricing Committee. Based upon its evaluation of all of the aforementioned factors in their totality, the Boards, including the Independent Board Members, were satisfied that the terms of the Agreements were fair and reasonable and in the best interest of each Trust and its shareholders. In arriving at a decision to approve the Agreements, the Boards did not identify any single factor or group of factors as all-important or controlling, but considered all factors together, and different Board Members may have attributed different weights to the various factors considered. The Independent Board Members were also assisted by the advice of independent legal counsel in making this determination. The contractual fee arrangements for each Trust reflect the results of several years of review by the Board Members and predecessor Board Members, and discussions between such Board Members (and predecessor Board Members) and BlackRock. Certain aspects of the arrangements may be the subject of more attention in some years than in others, and the Board Members’ conclusions may be based in part on their consideration of these arrangements in prior years.

 

 

 

 





60

ANNUAL REPORT

AUGUST 31, 2010

 




 


 

Automatic Dividend Reinvestment Plans

Pursuant to each Trust’s Dividend Reinvestment Plan (the “Plan”), common shareholders are automatically enrolled to have all distributions of dividends and capital gains reinvested by BNY Mellon Shareowner Services for MFL and MVF and Computershare Trust Company, N.A. for BYM, BAF, BBK, BIE and BLE (individually, the “Plan Agent” or together, the “Plan Agents”) in the respective Trust’s shares pursuant to the Plan. Shareholders who do not participate in the Plan will receive all distributions in cash paid by check and 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 Plan Agent, which serves as agent for the shareholders in administering the Plan.

After the Trusts declare a dividend or determine to make a capital gain distribution, the Plan Agent will acquire shares for the participants’ accounts, depending upon the following circumstances, either (i) through receipt of unissued but authorized shares from the Trust (“newly issued shares”) or (ii) by purchase of outstanding shares on the open market, on the Trust’s primary exchange (“open-market purchases”). If, on the dividend payment date, the net asset value per share (“NAV”) is equal to or less than the market price per share plus estimated brokerage commissions (such condition often referred to as a “market premium”), the Plan Agent will invest the dividend amount in newly issued shares on behalf of the participants. The number of newly issued shares to be credited to each participant’s account will be determined by dividing the dollar amount of the dividend by the NAV on the date the shares are issued. However, if the NAV is less than 95% of the market price on the payment date, the dollar amount of the dividend will be divided by 95% of the market price on the payment date. If, on the dividend payment date, the NAV is greater than the market value per share plus estimated brokerage commissions (such condition often referred to as a “market discount”), the Plan Agent will invest the dividend amount in shares acquired on behalf of the participants in open-market purchases. If the Plan Agents are unable to invest the full dividend amount in open market purchases, or if the market discount shifts to a market premium during the purchase period, the Plan Agents will invest any un-invested portion in newly issued shares.

Participation in the Plan is completely voluntary and may be terminated or resumed at any time without penalty by notice if received and processed by the Plan Administrator prior to the dividend record date; otherwise such termination or resumption will be effective with respect to any subsequently declared dividend or other distribution.

The Plan Agent’s fees for the handling of the reinvestment of dividends and distributions will be paid by each Fund. However, each participant will pay a pro rata share of brokerage commissions incurred with respect to the Plan Agent’s open market purchases in connection with the reinvestment of dividends and distributions. The automatic reinvestment of dividends and distributions will not relieve participants of any federal income tax that may be payable on such dividends or distributions.

Each Trust reserves the right to amend or terminate the Plan. There is no direct service charge to participants in the Plan; however, each Trust reserves the right to amend the Plan to include a service charge payable by the participants. Participants that request a sale of shares through Computershare Trust Company, N.A. are subject to a $2.50 sales fee and a $0.15 per share sold brokerage commission. Participants that request a sale of shares through BNY Mellon Shareowner Services are subject to a $0.02 per share sold brokerage commission. All correspondence concerning the Plan should be directed to the respective Plan Agent: BNY Mellon Shareowner Services, P.0. Box 358035, Pittsburgh, PA 15252-8035, Telephone: (866) 216-0242 for shareholders of MFL and MVF or Computershare Trust Company, N.A., P.O. Box 43078, Providence, RI 02940-3078, Telephone: (800) 699-1BFM or overnight correspondence should be directed to the Plan Agent at 250 Royall Street, Canton, MA 02021 for shareholders of BYM, BAF, BBK, BIE and BLE.

 

 

 

 





 

ANNUAL REPORT

AUGUST 31, 2010

61



 


 

Officers and Trustees


 

 

 

 

 

 

 

 

 

 

 

Name, Address
and Year of Birth

 

Position(s)
Held with
Trusts

 

Length
of Time
Served as
a Trustee2

 

Principal Occupation(s) During Past Five Years

 

Number of BlackRock-
Advised Registered
Investment Companies
(“RICs”) Consisting of
Investment Portfolios
(“Portfolios”) Overseen

 

Public
Directorships












Non-Interested Trustees1

 

 

 

 












Richard E. Cavanagh
55 East 52nd Street
New York, NY 10055
1946

 

Chairman of the
Board and Trustee

 

Since
1994

 

Trustee, Aircraft Finance Trust from 1999 to 2009; Director, The Guardian Life Insurance Company of America since 1998; Trustee, Educational Testing Service from 1997 to 2009 and Chairman thereof from 2005 to 2009; Senior Advisor, The Fremont Group since 2008 and Director thereof since 1996; Adjunct Lecturer, Harvard University since 2007; President and Chief Executive Officer, The Conference Board, Inc. (global business research organization) from 1995 to 2007.

 

100 RICs consisting of 98 Portfolios

 

Arch Chemical (chemical and allied products)












Karen P. Robards
55 East 52nd Street
New York, NY 10055
1950

 

Vice Chair of
the Board, Chair
of the Audit
Committee and
Trustee

 

Since
2007

 

Partner of Robards & Company, LLC (financial advisory firm) since 1987; Co-founder and Director of the Cooke Center for Learning and Development (a not-for-profit organization) since 1987; Director of Care Investment Trust, Inc. (health care real estate investment trust) from 2007 to 2010; Director of Enable Medical Corp. from 1996 to 2005; Investment Banker at Morgan Stanley from 1976 to 1987.

 

100 RICs consisting of 98 Portfolios

 

AtriCure, Inc. (medical devices)












Frank J. Fabozzi
55 East 52nd Street
New York, NY 10055
1948

 

Trustee and
Member of the
Audit Committee

 

Since
1988

 

Consultant/Editor of The Journal of Portfolio Management since 2006; Professor in the Practice of Finance and Becton Fellow, Yale University, School of Management since 2006; Adjunct Professor of Finance and Becton Fellow, Yale University from 1994 to 2006.

 

100 RICs consisting of 98 Portfolios

 

None












Kathleen F. Feldstein
55 East 52nd Street
New York, NY 10055
1941

 

Trustee

 

Since
2005

 

President of Economics Studies, Inc. (private economic consulting firm) since 1987; Chair, Board of Trustees, McLean Hospital from 2000 to 2008 and Trustee Emeritus thereof since 2008; Member of the Board of Partners Community Healthcare, Inc. from 2005 to 2009; Member of the Corporation of Partners HealthCare since 1995; Trustee, Museum of Fine Arts, Boston since 1992; Member of the Visiting Committee to the Harvard University Art Museum since 2003; Director, Catholic Charities of Boston since 2009.

 

100 RICs consisting of 98 Portfolios

 

The McClatchy Company (publishing)












James T. Flynn
55 East 52nd Street
New York, NY 10055
1939

 

Trustee and
Member of the
Audit Committee

 

Since
2007

 

Chief Financial Officer of JPMorgan & Co., Inc. from 1990 to 1995.

 

100 RICs consisting of 98 Portfolios

 

None












Jerrold B. Harris
55 East 52nd Street
New York, NY 10055
1942

 

Trustee

 

Since
2007

 

Trustee, Ursinus College since 2000; Director, Troemner LLC (scientific equipment) since 2000; Director of Delta Waterfowl Foundation since 2001; President and Chief Executive Officer, VWR Scientific Products Corporation from 1990 to 1999.

 

100 RICs consisting of 98 Portfolios

 

BlackRock Kelso Capital Corp. (business development company)













 

 

 

 





62

ANNUAL REPORT

AUGUST 31, 2010

 




 


 

Officers and Trustees (continued)


 

 

 

 

 

 

 

 

 

 

 

 

Name, Address
and Year of Birth

 

Position(s)
Held with
Trusts

 

Length
of Time
Served as
a Trustee2

 

Principal Occupation(s) During Past Five Years

 

Number of BlackRock-
Advised Registered
Investment Companies
(“RICs”) Consisting of
Investment Portfolios
(“Portfolios”) Overseen

 

Public
Directorships












Non-Interested Trustees1 (concluded)












R. Glenn Hubbard
55 East 52nd Street
New York, NY 10055
1958

 

Trustee

 

Since
2004

 

Dean, Columbia Business School since 2004; Columbia faculty member since 1988; Co-Director, Columbia Business School’s Entrepreneurship Program from 1997 to 2004; Chairman, U.S. Council of Economic Advisers under the President of the United States from 2001 to 2003; Chairman, Economic Policy Committee of the OECD from 2001 to 2003.

 

100 RICs consisting of 98 Portfolios

 

ADP (data and information services); KKR Financial Corporation (finance); Metropolitan Life Insurance Company (insurance)












W. Carl Kester
55 East 52nd Street
New York, NY 10055
1951

 

Trustee and
Member of the
Audit Committee

 

Since
2007

 

George Fisher Baker Jr. Professor of Business Administration, Harvard Business School; Deputy Dean for Academic Affairs since 2006; Unit Head, Finance, Harvard Business School from 2005 to 2006; Senior Associate Dean and Chairman of the MBA Program of Harvard Business School, from 1999 to 2005; Member of the faculty of Harvard Business School since 1981; Independent Consultant since 1978.

 

100 RICs consisting of 98 Portfolios

 

None

 

 


 

 

1

Trustees serve until their resignation, removal or death, or until December 31 of the year in which they turn 72.

 

 

 

 

 

 

 

 

 

 

 

 

 

2

Date shown is the earliest date a person has served for any of the Trusts covered by this annual report. Following the combination of Merrill Lynch Investment Managers, L.P. (“MLIM”) and BlackRock, Inc. (“BlackRock”) in September 2006, the various legacy MLIM and legacy BlackRock Fund boards were realigned and consolidated into three new Fund boards in 2007. As a result, although the chart shows certain trustees as joining the Trust’s board in 2007, each director first became a member of the board of directors of other legacy MLIM or legacy BlackRock Funds as follows: Richard E. Cavanagh, 1994; Frank J. Fabozzi, 1988; Kathleen F. Feldstein, 2005; James T. Flynn, 1996; Jerrold B. Harris, 1999; R. Glenn Hubbard, 2004; W. Carl Kester, 1995 and Karen P. Robards, 1998.


 

 

 

 

 

 

 

 

 

 

 

 


Interested Trustees3


Richard S. Davis
55 East 52nd Street
New York, NY 10055
1945

 

President4
and Trustee

 

Since
2007

 

Managing Director, BlackRock, Inc. since 2005; Chief Executive Officer, State Street Research & Management Company from 2000 to 2005; Chairman of the Board of Trustees, State Street Research Mutual Funds from 2000 to 2005.

 

170 RICs consisting of 291 Portfolios

 

None

 

 

 

 

 

 

 

 

 

 

 

 


Henry Gabbay
55 East 52nd Street
New York, NY 10055
1947

 

Trustee

 

Since
2007

 

Consultant, BlackRock, Inc. from 2007 to 2008; Managing Director, BlackRock, Inc. from 1989 to 2007; Chief Administrative Officer, BlackRock Advisors, LLC from 1998 to 2007; President of BlackRock Funds and BlackRock Bond Allocation Target Shares from 2005 to 2007; Treasurer of certain closed-end funds in the BlackRock fund complex from 1989 to 2006.

 

170 RICs consisting of 291 Portfolios

 

None

 

 











 

 

3

Mr. Davis is an “interested person,” as defined in the Investment Company Act of 1940, of the Trusts based on his position with BlackRock, Inc. and its affiliates. Mr. Gabbay is an “interested person” of the Trusts based on his former positions with BlackRock, Inc. and its affiliates as well as his ownership of BlackRock, Inc. and The PNC Financial Services Group, Inc. securities. Trustees serve until their resignation, removal or death, or until December 31 of the year in which they turn 72.

 

 

 

 

 

4

For MFL.


 

 

 

 





 

ANNUAL REPORT

AUGUST 31, 2010

63




 


 

Officers and Trustees (concluded)


 

 

 

 

 

 

 

 

Name, Address
and Year of Birth

 

Position(s)
Held with
Trusts

 

Length
of Time
Served

 

Principal Occupation(s) During Past Five Years








Trusts Officers1


Anne Ackerley
55 East 52nd Street
New York, NY 10055
1962

 

President and
Chief Executive
Officer

 

Since
20092

 

Managing Director of BlackRock, Inc. since 2000; Vice President of the BlackRock-advised Funds from 2007 to 2009; Chief Operating Officer of BlackRock’s Global Client Group (GCG) since 2009; Chief Operating Officer of BlackRock’s US Retail Group from 2006 to 2009; Head of BlackRock’s Mutual Fund Group from 2000 to 2006.









Brendan Kyne
55 East 52nd Street
New York, NY 10055
1977

 

Vice
President

 

Since
2009

 

Managing Director of BlackRock, Inc. since 2010; Director of BlackRock, Inc. from 2008 to 2009; Head of Product Development and Management for BlackRock’s US Retail Group since 2009, co-head thereof from 2007 to 2009; Vice President of BlackRock, Inc. from 2005 to 2008.









Neal Andrews
55 East 52nd Street
New York, NY 10055
1966

 

Chief
Financial
Officer

 

Since
2007

 

Managing Director of BlackRock, Inc. since 2006; Senior Vice President and Line of Business Head of Fund Accounting and Administration at PNC Global Investment Servicing (US) Inc. from 1992 to 2006.









Jay Fife
55 East 52nd Street
New York, NY 10055
1970

 

Treasurer

 

Since
2007

 

Managing Director of BlackRock, Inc. since 2007 and Director in 2006; Assistant Treasurer of the Merrill Lynch Investment Managers, L.P. (“MLIM”) and Fund Asset Management, L.P.-advised funds from 2005 to 2006; Director of MLIM Fund Services Group from 2001 to 2006.









Brian Kindelan
55 East 52nd Street
New York, NY 10055
1959

 

Chief
Compliance
Officer

 

Since
2007

 

Chief Compliance Officer of the BlackRock-advised funds since 2007; Managing Director and Senior Counsel of BlackRock, Inc. since 2005.









Howard Surloff
55 East 52nd Street
New York, NY 10055
1965

 

Secretary

 

Since
2007

 

Managing Director of BlackRock, Inc. and General Counsel of US Funds at BlackRock, Inc. since 2006; General Counsel (US) of Goldman Sachs Asset Management, L.P. from 1993 to 2006.

 

 







 

 

1

Officers of the Trusts serve at the pleasure of the Board of Trustees.

 

 

 

 

 

 

 

 

 

 

2

Ms. Ackerley has been President for all Trusts except MFL and Chief Executive Officer of the Trusts since 2009 and was Vice President from 2007 to 2009.





Investment Advisor

BlackRock Advisors, LLC
Wilmington, DE 19809

Sub-Advisors

BlackRock Investment
Management, LLC3
Plainsboro, NJ 08536

BlackRock Financial
Management, Inc.4
New York, NY 10055

Custodians

The Bank of New York Mellon3
New York, NY 10286

State Street Bank and
Trust Company4
Boston, MA 02111

Transfer Agents

Common Shares:

BNY Mellon Shareowner Services3
Jersey City, NJ 07310

Computershare Trust Company, N.A.4
Providence, RI 02940

Auction Agents

Preferred Shares:

The Bank of New York Mellon
New York, NY 10286

Accounting Agent

State Street Bank and
Trust Company
Princeton, NJ 08540

Independent Registered Public Accounting Firm

Deloitte & Touche LLP
Princeton, NJ 08540

Legal Counsel

Skadden, Arps, Slate,
Meagher & Flom LLP
New York, NY 10036

Address of the Trusts

100 Bellevue Parkway
Wilmington, DE 19809

 

 

3

For MFL and MVF.

 

 

4

For BYM, BAF, BBK, BIE and BLE.


 

 

 

 





64

ANNUAL REPORT

AUGUST 31, 2010

 




 


 

Additional Information


 


Fund Certification


Certain Trusts are listed for trading on the New York Stock Exchange (“NYSE”) and have filed with the NYSE their annual chief executive officer certification regarding compliance with the NYSE’s listing standards. The Trusts filed with the SEC the certification of their chief executive officer and chief financial officer required by section 302 of the Sarbanes-Oxley Act.

 


Dividend Policy


The Trusts’ dividend policy is to distribute all or a portion of their net investment income to their shareholders on a monthly basis. In order to provide shareholders with a more stable level of dividend distributions, the Trusts may at times pay out less than the entire amount of net investment income earned in any particular month and may at times in any particular month pay out such accumulated but undistributed income in addition to net investment income earned in that month. As a result, the dividends paid by the Trusts for any particular month may be more or less than the amount of net investment income earned by the Trusts during such month. The Trusts’ current accumulated but undistributed net investment income, if any, is disclosed in the Statements of Assets and Liabilities, which comprises part of the financial information included in this report.

 


General Information


On July 29, 2010, the Manager announced that a derivative complaint had been filed by shareholders of BYM, BAF and BIE on July 27, 2010 in the Supreme Court of the State of New York, New York County. The complaint names the Manager, BlackRock, Inc. and certain of the directors, officers and portfolio managers of BYM, BAF and BIE as defendants. The complaint alleges, among other things, that the parties named in the complaint breached fiduciary duties owed to BYM, BAF and BIE and their Common Shareholders by redeeming auction-market preferred shares, auction rate preferred securities, auction preferred shares and auction rate securities (collectively, “AMPS”) at their liquidation preference. The complaint seeks unspecified damages for losses purportedly suffered by BYM, BAF and BIE as a result of the prior redemptions and injunctive relief preventing BYM, BAF and BIE from redeeming AMPS at their liquidation preference in the future. The Manager, BlackRock, Inc. and the other parties named in the complaint believe that the claims asserted in the complaint are without merit and intend to vigorously defend themselves in the litigation.

On August 11, 2010, the Manager announced that a derivative complaint had been filed by shareholders of MFL on August 3, 2010 in the Supreme Court of the State of New York, New York County. The complaint names the Manager, BlackRock, Inc. and certain of the directors, officers and portfolio managers of MFL as defendants. The complaint alleges, among other things, that the parties named in the complaint breached fiduciary duties owed to MFL and its Common Shareholders by redeeming AMPS at their liquidation preference. The complaint seeks unspecified damages for losses purportedly suffered by MFL as a result of the prior redemptions and injunctive relief preventing MFL from redeeming AMPS at their liquidation preference in the future. The Manager, BlackRock, Inc. and the other parties named in the complaint believe that the claims asserted in the complaint are without merit and intend to vigorously defend themselves in the litigation.

On September 27, 2010, the Manager announced that the directors of MVF had received a demand letter sent on behalf of certain of MVF’s Common Shareholders. The demand letter alleged that the Manager and MVF’s officers and Board of Directors (the “Board”) breached fiduciary duties owed to MVF and its Common Shareholders by redeeming at par certain of MVF’s Preferred Shares, and demanded that the Board take action to remedy those alleged breaches. In response to the demand letter, the Board established a Demand Review Committee (the “Committee”) of the independent Directors to investigate the claims made in the demand letter with the assistance of independent counsel. Based upon its investigation, the Committee recommended that the Board reject the demand specified in the demand letter. After reviewing the findings of the Committee, the Board unanimously adopted the Committee’s recommendation and unanimously voted to reject the demand.

The Trusts do not make available copies of their Statements of Additional Information because the Trusts’ shares are not continuously offered, which means that the Statement of Additional Information of each Trust has not been updated after completion of the respective Trust’s offerings and the information contained in each Trust’s Statement of Additional Information may have become outdated.

Other than the revisions discussed in the Board of Approvals on page 66, there were no material changes in the Trusts’ investment objectives or policies or to the Trusts’ charter or by-laws that would delay or prevent a change of controls of the Trusts that were not approved by the shareholders or in the principal risk factors associated with investment in the Trusts. There have been no changes in the persons who are primarily responsible for the day-to-day management of the Trusts’ portfolio.

Quarterly performance, semi-annual and annual reports and other information regarding the Trusts may be found on BlackRock’s website, which can be accessed at http://www.blackrock.com. This reference to BlackRock’s website is intended to allow investors public access to information regarding the Trusts and does not, and is not intended to, incorporate BlackRock’s website into this report.

 

 

 

 





 

ANNUAL REPORT

AUGUST 31, 2010

65




 


 

Additional Information (continued)

 


General Information (concluded)


Electronic Delivery

Electronic copies of most financial reports are available on the Trusts’ websites or shareholders can sign up for e-mail notifications of quarterly statements, annual and semi-annual reports by enrolling in the Trusts’ electronic delivery program.

Shareholders Who Hold Accounts with Investment Advisors, Banks or Brokerages:

Please contact your financial advisor to enroll. Please note that not all investment advisors, banks or brokerages may offer this service.

Householding

The Trusts will mail only one copy of shareholder documents, including annual and semi-annual reports and proxy statements, to shareholders with multiple accounts at the same address. This practice is commonly called “householding” and is intended to reduce expenses and eliminate duplicate mailings of shareholder documents. Mailings of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please call (800) 441-7762.

Availability of Quarterly Schedule of Investments

Each Trust files its complete schedule of portfolio holdings with the Securities and Exchange Commission (“SEC”) for the first and third quarters of each fiscal year on Form N-Q. The Trusts’ Forms N-Q are available on the SEC’s website at http://www.sec.gov and may also be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling (800) SEC-0330. Each Trust’s Forms N-Q may also be obtained upon request and without charge by calling (800) 441-7762.

Availability of Proxy Voting Policies and Procedures

A description of the policies and procedures that the Trusts use to determine how to vote proxies relating to portfolio securities is available (1) without charge, upon request, by calling (800) 441-7762; (2) at http://www.blackrock.com; and (3) on the SEC’s website at http://www.sec.gov.

Availability of Proxy Voting Record

Information about how the Trusts voted proxies relating to securities held in the Trusts’ portfolios during the most recent 12-month period ended June 30 is available upon request and without charge (1) at http://www.blackrock.com or by calling (800) 441-7762 and (2) on the SEC’s website at http://www.sec.gov.

 


Board Approvals


On September 1, 2010, the Board of Directors/Trustees (the “Boards”) of BYM, BAF and MFL (the “Insured Funds”) approved changes to certain investment policies of the Insured Funds.

Historically, under normal market conditions, each Insured Fund has been required to invest at least 80% of its assets in municipal bonds either (i) insured under an insurance policy purchased by the Insured Fund or (ii) insured under an insurance policy obtained by the issuer of the municipal bond or any other party. In September 2008, the Insured Funds adopted an amended investment policy of purchasing only municipal bonds insured by insurance providers with claims-paying abilities rated investment grade at the time of investment (the “Insurance Policy”).

Following the onset of the credit and liquidity crises, the claims-paying ability rating of most of the municipal bond insurance providers has been lowered by the rating agencies. These downgrades have called into question the long-term viability of the municipal bond insurance market, which has the potential to severely limit the ability of BlackRock Advisors, LLC, the Insured Fund’s investment advisor (the “Manager”), to manage the Insured Funds under the Insurance Policy.

As a result, on September 1, 2010, the Manager recommended, and the Boards approved, the removal of the Insurance Policy. As a result of this investment policy change, the Insured Funds will not be required to dispose of assets currently held within the Insured Funds. The Insured Funds will maintain, and have no current intention to amend, their investment policy of, under normal market conditions, generally investing in municipal obligations rated investment grade at the time of investment.

 

 

 

 





66

ANNUAL REPORT

AUGUST 31, 2010

 




 


 

Additional Information (concluded)

 


Board Approvals (concluded)


As each Insured Fund increases the amount of its assets that are invested in municipal obligations that are not insured, each Insured Fund’s shareholders will be exposed to the risk of the failure of such securities’ issuers to pay interest and repay principal and will not have the benefit of protection provided under municipal bond insurance policies. As a result, shareholders will be more dependent on the analytical ability of the Manager to evaluate the credit quality of issuers of municipal obligations in which each Insured Fund invests. The Boards believe that the amended investment policy is in the best interests of each Insured Fund and its shareholders because it believes that the potential benefits from increased flexibility outweigh the potential increase in risk from the lack of insurance policies provided by weakened insurance providers. Of course, the new investment policy cannot assure that each Insured Fund will achieve its investment objective.

As disclosed in each Insured Fund’s prospectus, each Insured Fund is required to provide shareholders 60 days notice of a change to the Insurance Policy. Accordingly, a notice describing the changes discussed above was mailed to shareholders of record as of September 1, 2010. The new investment policy is expected to take effect on November 9, 2010. After the amended policy takes effect, the Manager anticipates that it will gradually reposition each Insured Fund’s portfolios over time, and that during such period, each Insured Fund may continue to hold a substantial portion of its assets in insured municipal bonds. At this time, it is uncertain how long it may take to reposition each Insured Fund’s portfolio once the amended policy takes effect, and the Insured Funds may continue to be subject to risks associated with investing a substantial portion of their assets in insured municipal bonds until the repositioning is complete. No action is required by shareholders of the Insured Funds in connection with this change.

In connection with this change in non-fundamental policy, each of the Insured Funds will undergo a name change to reflect its new portfolio characteristics. The new names of the Insured Funds will be announced at or prior to the expiration of the 60-day notice period. Each Insured Fund will continue to trade on New York Stock Exchange under its current ticker symbol.

The approved changes will not alter any Insured Fund’s investment objective.

 


BlackRock Privacy Principles


BlackRock is committed to maintaining the privacy of its current and former fund investors and individual clients (collectively, “Clients”) and to safeguarding their non-public personal information. The following information is provided to help you understand what personal information BlackRock collects, how we protect that information and why in certain cases we share such information with select parties.

If you are located in a jurisdiction where specific laws, rules or regulations require BlackRock to provide you with additional or different privacy-related rights beyond what is set forth below, then BlackRock will comply with those specific laws, rules or regulations.

BlackRock obtains or verifies personal non-public information from and about you from different sources, including the following: (i) information we receive from you or, if applicable, your financial intermediary, on applications, forms or other documents; (ii) information about your transactions with us, our affiliates, or others; (iii) information we receive from a consumer reporting agency; and (iv) from visits to our websites.

BlackRock does not sell or disclose to non-affiliated third parties any non-public personal information about its Clients, except as permitted by law or as is necessary to respond to regulatory requests or to service Client accounts. These non-affiliated third parties are required to protect the confidentiality and security of this information and to use it only for its intended purpose.

We may share information with our affiliates to service your account or to provide you with information about other BlackRock products or services that may be of interest to you. In addition, BlackRock restricts access to non-public personal information about its Clients to those BlackRock employees with a legitimate business need for the information. BlackRock maintains physical, electronic and procedural safeguards that are designed to protect the non-public personal information of its Clients, including procedures relating to the proper storage and disposal of such information.

 

 

 

 





 

ANNUAL REPORT

AUGUST 31, 2010

67



This report is transmitted to shareholders only. It is not a prospectus. Past performance results shown in this report should not be considered a representation of future performance. The Trusts have leveraged their Common Shares, which creates risks for Common Shareholders, including the likelihood of greater volatility of net asset value and market price of the Common Shares, and the risk that fluctuations in the short-term dividend rates of the Preferred Shares, currently set at the maximum reset rate as a result of failed auctions, may reduce the Common Shares’ yield. Statements and other information herein are as dated and are subject to change.

 

 

(GO PAPERLESS LOGO)

 

 

 

#CEF-NTL-7-8/10

(BLACKROCK LOGO)


Item 2 –

Code of Ethics – The registrant (or the “Fund”) has adopted a code of ethics, as of the end of the period covered by this report, applicable to the registrant’s principal executive officer, principal financial officer and principal accounting officer, or persons performing similar functions. During the period covered by this report, there have been no amendments to or waivers granted under the code of ethics. A copy of the code of ethics is available without charge at www.blackrock.com.

 

 

Item 3 –

Audit Committee Financial Expert – The registrant’s board of directors or trustees, as applicable (the “board of directors”), has determined that (i) the registrant has the following audit committee financial experts serving on its audit committee and (ii) each audit committee financial expert is independent:

 

Kent Dixon (retired effective December 31, 2009)

 

Frank J. Fabozzi

 

James T. Flynn

 

W. Carl Kester

 

Karen P. Robards

 

 

 

The registrant’s board of directors has determined that W. Carl Kester and Karen P. Robards qualify as financial experts pursuant to Item 3(c)(4) of Form N-CSR.

 

 

 

Prof. Kester has a thorough understanding of generally accepted accounting principles, financial statements and internal control over financial reporting as well as audit committee functions. Prof. Kester has been involved in providing valuation and other financial consulting services to corporate clients since 1978. Prof. Kester’s financial consulting services present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised by the registrant’s financial statements.

 

 

 

Ms. Robards has a thorough understanding of generally accepted accounting principles, financial statements and internal control over financial reporting as well as audit committee functions. Ms. Robards has been President of Robards & Company, a financial advisory firm, since 1987. Ms. Robards was formerly an investment banker for more than 10 years where she was responsible for evaluating and assessing the performance of companies based on their financial results. Ms. Robards has over 30 years of experience analyzing financial statements. She also is a member of the audit committee of one publicly held company and a non-profit organization.

 

 

 

Under applicable securities laws, a person determined to be an audit committee financial expert will not be deemed an “expert” for any purpose, including without limitation for the purposes of Section 11 of the Securities Act of 1933, as a result of being designated or identified as an audit committee financial expert. The designation or identification as an audit committee financial expert does not impose on such person any duties, obligations, or liabilities greater than the duties, obligations, and liabilities imposed on such person as a member of the audit committee and board of directors in the absence of such designation or identification. The designation or identification as an audit committee financial expert does not affect the duties, obligations, or liability of any other member of the audit committee or board of directors.

 


Item 4 –

Principal Accountant Fees and Services

 

 

(a) Audit Fees

(b) Audit-Related Fees1

(c) Tax Fees2

(d) All Other Fees3

Entity Name

Current Fiscal Year End

Previous Fiscal Year End

Current Fiscal Year End

Previous Fiscal Year End

Current Fiscal Year End

Previous Fiscal Year End

Current Fiscal Year End

Previous Fiscal Year End

 

 

 

 

 

 

 

 

 

BlackRock Municipal Income Trust II

$30,200

$30,200

$3,500

$3,500

$6,100

$6,100

$0

$1,028

1 The nature of the services include assurance and related services reasonably related to the performance of the audit of financial statements not included in Audit Fees.

2 The nature of the services include tax compliance, tax advice and tax planning.

3 The nature of the services include a review of compliance procedures and attestation thereto.

 

 

    

(e)(1) Audit Committee Pre-Approval Policies and Procedures:

 

 

 

The registrant’s audit committee (the “Committee”) has adopted policies and procedures with regard to the pre-approval of services. Audit, audit-related and tax compliance services provided to the registrant on an annual basis require specific pre-approval by the Committee. The Committee also must approve other non-audit services provided to the registrant and those non-audit services provided to the registrant’s affiliated service providers that relate directly to the operations and the financial reporting of the registrant. Certain of these non-audit services that the Committee believes are a) consistent with the SEC’s auditor independence rules and b) routine and recurring services that will not impair the independence of the independent accountants may be approved by the Committee without consideration on a specific case-by-case basis (“general pre-approval”). The term of any general pre-approval is 12 months from the date of the pre-approval, unless the Committee provides for a different period. Tax or other non-audit services provided to the registrant which have a direct impact on the operation or financial reporting of the registrant will only be deemed pre-approved provided that any individual project does not exceed $10,000 attributable to the registrant or $50,000 per project. For this purpose, multiple projects will be aggregated to determine if they exceed the previously mentioned cost levels.

 

 

 

Any proposed services exceeding the pre-approved cost levels will require specific pre-approval by the Committee, as will any other services not subject to general pre-approval (e.g., unanticipated but permissible services). The Committee is informed of each service approved subject to general pre-approval at the next regularly scheduled in-person board meeting. At this meeting, an analysis of such services is presented to the Committee for ratification. The Committee may delegate to the Committee Chairman the authority to approve the provision of and fees for any specific engagement of permitted non-audit services, including services exceeding pre-approved cost levels.

 

 

 

(e)(2) None of the services described in each of Items 4(b) through (d) were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.

 

 

 

(f) Not Applicable

 


 

(g) Affiliates’ Aggregate Non-Audit Fees:

 

Entity Name

Current Fiscal Year End

Previous Fiscal Year End

 

 

 

BlackRock Municipal Income Trust II

$20,377

$413,128

 

 

(h) The registrant’s audit committee has considered and determined that the provision of non-audit services that were rendered to the registrant’s investment adviser (not including any non-affiliated sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by the registrant’s investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant’s independence.

 

 

 

Regulation S-X Rule 2-01(c)(7)(ii) – $10,777, 0%

 

 

Item 5 –

Audit Committee of Listed Registrants –

 

    

(a)

The following individuals are members of the registrant’s separately-designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(58)(A)):

 

 

 

 

 

Kent Dixon (retired effective December 31, 2009)

 

 

Frank J. Fabozzi

 

 

James T. Flynn

 

 

W. Carl Kester

 

 

Karen P. Robards

 

 

 

 

(b)

Not Applicable

 

Item 6 –

Investments

 

(a) The registrant’s Schedule of Investments is included as part of the Report to Stockholders filed under Item 1 of this Form.

 

(b) Not Applicable due to no such divestments during the semi-annual period covered since the previous Form N-CSR filing.

 

 

Item 7 –

Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies – The board of directors has delegated the voting of proxies for the Fund securities to the Fund’s investment adviser (“Investment Adviser”) pursuant to the Investment Adviser’s proxy voting guidelines. Under these guidelines, the Investment Adviser will vote proxies related to Fund securities in the best interests of the Fund and its stockholders. From time to time, a vote may present a conflict between the interests of the Fund’s stockholders, on the one hand, and those of the Investment Adviser, or any affiliated person of the Fund or the Investment Adviser, on the other. In such event, provided that the Investment Adviser’s Equity Investment Policy Oversight Committee, or a sub-committee thereof (the “Oversight Committee”) is aware of the real or potential conflict or material non-routine matter and if the Oversight Committee does not reasonably believe it is able to follow its general voting guidelines (or if the particular proxy matter is not addressed in the guidelines) and vote impartially, the Oversight Committee may retain an independent fiduciary to advise the Oversight Committee on how to vote or to cast votes on behalf of the Investment Adviser’s clients. If the Investment Adviser determines not to retain an independent fiduciary, or does not desire to follow the advice of such independent fiduciary, the Oversight Committee shall

 


 

determine how to vote the proxy after consulting with the Investment Adviser’s Portfolio Management Group and/or the Investment Adviser’s Legal and Compliance Department and concluding that the vote cast is in its client’s best interest notwithstanding the conflict. A copy of the Fund’s Proxy Voting Policy and Procedures are attached as Exhibit 99.PROXYPOL. Information on how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available without charge, (i) at www.blackrock.com and (ii) on the SEC’s website at http://www.sec.gov.

 

 

Item 8 –

Portfolio Managers of Closed-End Management Investment Companies – as of August 31, 2010.

 

    

(a)(1)

The registrant (or “Fund”) is managed by a team of investment professionals comprised of Theodore R. Jaeckel, Jr., CFA, Managing Director at BlackRock, Inc. and Walter O’Connor, Managing Director at BlackRock, Inc. Each is a member of BlackRock, Inc.’s municipal tax-exempt management group. Each is jointly responsible for the day-to-day management of the registrant’s portfolio, which includes setting the registrant’s overall investment strategy, overseeing the management of the registrant and/or selection of its investments. Messrs. Jaeckel and O’Connor have been members of the registrant’s portfolio management team since 2006 and 2006, respectively.

 

Portfolio Manager

Biography

Theodore R. Jaeckel, Jr.

Managing Director at BlackRock, Inc. since 2006; Managing Director of Merrill Lynch Investment Managers, L.P. (“MLIM”) from 2005 to 2006; Director of MLIM from 1997 to 2005.

Walter O’Connor

Managing Director of BlackRock, Inc. since 2006; Managing Director of MLIM from 2003 to 2006; Director of MLIM from 1998 to 2003.

 

 

(a)(2)

As of August 31, 2010:

 

 

(ii) Number of Other Accounts Managed

and Assets by Account Type

(iii) Number of Other Accounts and

Assets for Which Advisory Fee is

Performance-Based

(i) Name of

Portfolio Manager

Other

Registered

Investment

Companies

Other Pooled

Investment

Vehicles

Other

Accounts

Other

Registered

Investment

Companies

Other Pooled

Investment

Vehicles

Other

Accounts 

Theodore R. Jaeckel, Jr.

73

0

0

0

0

0

 

$21.60 Billion

$0

$0

$0

$0

$0

Walter O’Connor

72

0

0

0

0

0

 

$20.63 Billion

$0

$0

$0

$0

$0

 

 

(iv)

Potential Material Conflicts of Interest

 

    

BlackRock, Inc., individually and together with its affiliates (“BlackRock”), has built a professional working environment, firm-wide compliance culture and compliance procedures and systems designed to protect against potential incentives that may favor one account over another. BlackRock has adopted policies and procedures that address the allocation of investment opportunities, execution of portfolio transactions, personal trading by employees and other potential conflicts of interest that are designed to ensure that all client accounts are treated equitably over time. Nevertheless, BlackRock furnishes investment management and advisory services to numerous

 


    

clients in addition to the Fund, and BlackRock may, consistent with applicable law, make investment recommendations to other clients or accounts (including accounts which are hedge funds or have performance or higher fees paid to BlackRock, or in which portfolio managers have a personal interest in the receipt of such fees), which may be the same as or different from those made to the Fund.  In addition, BlackRock, its affiliates and significant shareholders and any officer, director, stockholder or employee may or may not have an interest in the securities whose purchase and sale BlackRock recommends to the Fund.  BlackRock, or any of its affiliates or significant shareholders, or any officer, director, stockholder, employee or any member of their families may take different actions than those recommended to the Fund by BlackRock with respect to the same securities.  Moreover, BlackRock may refrain from rendering any advice or services concerning securities of companies of which any of BlackRock’s (or its affiliates’ or significant shareholders’) officers, directors or employees are directors or officers, or companies as to which BlackRock or any of its affiliates or significant shareholders or the officers, directors and employees of any of them has any substantial economic interest or possesses material non-public information.  Each portfolio manager also may manage accounts whose investment strategies may at times be opposed to the strategy utilized for a fund.  In this connection, it should be noted that a portfolio manager may currently manage certain accounts that are subject to performance fees.  In addition, a portfolio manager may assist in managing certain hedge funds and may be entitled to receive a portion of any incentive fees earned on such funds and a portion of such incentive fees may be voluntarily or involuntarily deferred.  Additional portfolio managers may in the future manage other such accounts or funds and may be entitled to receive incentive fees.

 

 

 

As a fiduciary, BlackRock owes a duty of loyalty to its clients and must treat each client fairly.  When BlackRock purchases or sells securities for more than one account, the trades must be allocated in a manner consistent with its fiduciary duties.  BlackRock attempts to allocate investments in a fair and equitable manner among client accounts, with no account receiving preferential treatment.  To this end, BlackRock has adopted a policy that is intended to ensure that investment opportunities are allocated fairly and equitably among client accounts over time.  This policy also seeks to achieve reasonable efficiency in client transactions and provide BlackRock with sufficient flexibility to allocate investments in a manner that is consistent with the particular investment discipline and client base.

 

 

(a)(3)

As of August 31, 2010:

 

    

Portfolio Manager Compensation Overview

 

 

 

BlackRock’s financial arrangements with its portfolio managers, its competitive compensation and its career path emphasis at all levels reflect the value senior management places on key resources. Compensation may include a variety of components and may vary from year to year based on a number of factors. The principal components of compensation include a base salary, a performance-based discretionary bonus, participation in various benefits programs and one or more of the incentive compensation programs established by BlackRock such as its Long-Term Retention and Incentive Plan.

 


    

Base compensation. Generally, portfolio managers receive base compensation based on their seniority and/or their position with the firm. Senior portfolio managers who perform additional management functions within the portfolio management group or within BlackRock may receive additional compensation for serving in these other capacities.

 

 

 

Discretionary Incentive Compensation

 

 

 

Discretionary incentive compensation is a function of several components: the performance of BlackRock, Inc., the performance of the portfolio manager’s group within BlackRock, the investment performance, including risk-adjusted returns, of the firm’s assets under management or supervision by that portfolio manager relative to predetermined benchmarks, and the individual’s seniority, role within the portfolio management team, teamwork and contribution to the overall performance of these portfolios and BlackRock.  In most cases, including for the portfolio managers of the Fund, these benchmarks are the same as the benchmark or benchmarks against which the performance of the Fund or other accounts managed by the portfolio managers are measured.  BlackRock’s Chief Investment Officers determine the benchmarks against which the performance of funds and other accounts managed by each portfolio manager is compared and the period of time over which performance is evaluated.  With respect to the portfolio managers, such benchmarks for the Fund include a combination of market-based indices (e.g., Barclays Capital Municipal Bond Index), certain customized indices and certain fund industry peer groups.

 

 

 

BlackRock’s Chief Investment Officers make a subjective determination with respect to the portfolio managers’ compensation based on the performance of the funds and other accounts managed by each portfolio manager relative to the various benchmarks noted above.  Performance is measured on both a pre-tax and after-tax basis over various time periods including 1, 3, 5 and 10-year periods, as applicable. 

 

 

 

Distribution of Discretionary Incentive Compensation

 

 

 

Discretionary incentive compensation is distributed to portfolio managers in a combination of cash and BlackRock, Inc. restricted stock units which vest ratably over a number of years. The BlackRock, Inc. restricted stock units, if properly vested, will be settled in BlackRock, Inc. common stock. Typically, the cash bonus, when combined with base salary, represents more than 60% of total compensation for the portfolio managers. Paying a portion of annual bonuses in stock puts compensation earned by a portfolio manager for a given year “at risk” based on BlackRock’s ability to sustain and improve its performance over future periods.

 

 

 

Long-Term Retention and Incentive Plan (“LTIP”) — From time to time long-term incentive equity awards are granted to certain key employees to aid in retention, align their interests with long-term shareholder interests and motivate performance.  Equity awards are generally granted in the form of BlackRock, Inc. restricted stock units that, once vested, settle in BlackRock, Inc. common stock. Messrs. O’Connor and Jaeckel have each received awards under the LTIP.

 

 

 

Deferred Compensation Program — A portion of the compensation paid to eligible BlackRock employees may be voluntarily deferred into an account that tracks the performance of certain of the firm’s investment products. Each participant in the deferred compensation program is permitted to allocate his deferred amounts among the various investment options. Messrs. O’Connor and Jaeckel have each participated in the deferred compensation program.

 


    

Other compensation benefits. In addition to base compensation and discretionary incentive compensation, portfolio managers may be eligible to receive or participate in one or more of the following:

 

 

 

Incentive Savings Plans — BlackRock, Inc. has created a variety of incentive savings plans in which BlackRock employees are eligible to participate, including a 401(k) plan, the BlackRock Retirement Savings Plan (RSP), and the BlackRock Employee Stock Purchase Plan (ESPP). The employer contribution components of the RSP include a company match equal to 50% of the first 6% of eligible pay contributed to the plan capped at $4,000 per year, and a company retirement contribution equal to 3-5% of eligible compensation.  The RSP offers a range of investment options, including registered investment companies managed by the firm. BlackRock contributions follow the investment direction set by participants for their own contributions or, absent employee investment direction, are invested into a balanced portfolio.  The ESPP allows for investment in BlackRock common stock at a 5% discount on the fair market value of the stock on the purchase date.  Annual participation in the ESPP is limited to the purchase of 1,000 shares or a dollar value of $25,000.  Each portfolio manager is eligible to participate in these plans.

 

 

(a)(4)

Beneficial Ownership of Securities – As of August 31, 2010.    

 

Portfolio Manager

Dollar Range of Equity Securities of the Fund Beneficially Owned

Walter O’Connor

None

Theodore R. Jaeckel, Jr.

None

 

 

(b) Not Applicable

 

 

Item 9 –

Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers – Not Applicable due to no such purchases during the period covered by this report.

 

 

Item 10 –

Submission of Matters to a Vote of Security Holders – On October 25, 2010, the Board of Trustees of the Fund amended and restated in its entirety the bylaws of the Fund (the "Amended and Restated Bylaws"). The Amended and Restated Bylaws were deemed effective as of October 28, 2010 and set forth, among other things, the processes and procedures that shareholders of the Fund must follow, and specifies additional information that shareholders of the Fund must provide, when proposing trustee nominations at any annual meeting or special meeting in lieu of an annual meeting or other business to be considered at an annual meeting or special meeting.

 

 

Item 11 –

Controls and Procedures

 

 

11(a) –

The registrant’s principal executive and principal financial officers or persons performing similar functions have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”)) are effective as of a date within 90 days of the filing of this report based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended.

 


11(b) –

There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

 

 

Item 12 –

Exhibits attached hereto

 

 

12(a)(1) –

Code of Ethics – See Item 2

 

 

12(a)(2) –

Certifications – Attached hereto

 

 

12(a)(3) –

Not Applicable

 

 

12(b) –

Certifications – Attached hereto

 


    

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

 

BlackRock Municipal Income Trust II

   
  By: /s/ Anne F. Ackerley  
    Anne F. Ackerley
    Chief Executive Officer of
    BlackRock Municipal Income Trust II
   
  Date: November 5, 2010
   
  Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
   
  By: /s/ Anne F. Ackerley  
    Anne F. Ackerley
    Chief Executive Officer (principal executive officer) of
    BlackRock Municipal Income Trust II
   
  Date: November 5, 2010
   
  By: /s/ Neal J. Andrews  
    Neal J. Andrews
    Chief Financial Officer (principal financial officer) of
    BlackRock Municipal Income Trust II
     
  Date: November 5, 2010