The information in the above Financial Highlights represents the operating performance for a common share outstanding, total investment returns, ratios to average net assets and other supplemental data for each period indicated. This information has been determined based upon financial information provided in the financial statements and market price data for the Trust’s common shares.
See Notes to Financial Statements.
NOTES TO FINANCIAL STATEMENTS
Note 1. Organization & Accounting Policies
BAT Subsidiary, Inc. (“BATS”) and BQT Subsidiary, Inc. (“BQTS”) (collectively, the “Trusts”), each a Maryland corporation, are diversified closed-end management investment companies. BATS and BQTS were incorporated solely for the purpose of receiving a substantial portion of the assets of The BlackRock Advantage Term Trust Inc. (“BAT”) and The BlackRock Investment Quality Term Trust Inc. (“BQT”), respectively, and as such, are a wholly owned subsidiary of BAT and BQT, respectively. Accordingly, BATS and BQTS are not publicly traded.
The Boards of Directors of BATS and BQTS each adopted a Plan of Liquidation and Dissolution (each a “Plan”) effective December 18, 2003 and December 19, 2002, respectively. Pursuant to the terms of each Plan, the respective Board of Directors shall oversee the complete liquidation and winding up of BATS and BQTS in an orderly fashion prior to December 31, 2005, and December 31, 2004, respectively.
The following is a summary of significant accounting policies followed by the Trusts.
Investment Valuation: The Trusts value most of their investments on the basis of current market quotations provided by dealers or pricing services selected under the supervision of each Trust’s Board of Directors (the “Board”). In determining the value of a particular security, pricing services may use certain information with respect to transactions in such investments, quotations from dealers, market transactions in comparable investments, various relationships observed in the market between investments, and calculated yield measures based on valuation technology commonly employed in the market for such investments. Exchange traded options are valued at their last sales price as of the close of options trading on applicable exchanges. In the absence of a last sale, options are valued at the average of the quoted bid and asked prices as of the close of business. A futures contract is valued at the last sale price as of the close of the commodities exchange on which it trades. Short-term securities may be valued at amortized cost. Securities or other assets for which such current market quotations are not readily available are valued at fair value as determined in good faith under procedures established by, and under the general supervision and responsibility of, each Trust’s Board.
Investment Transactions and Investment Income: Investment transactions are recorded on trade date. Realized and unrealized gains and losses are calculated on the identified cost basis. Each Trust also records interest income on an accrual basis and amortizes premium and/or accretes discount on securities purchased using the interest method.
Repurchase Agreements: In connection with transactions in repurchase agreements, a Trust’s custodian takes possession of the underlying collateral securities, the value of which at least equals the principal amount of the repurchase transaction, including accrued interest. To the extent that any repurchase transaction exceeds one business day, the value of the collateral is marked-to-market on a daily basis to ensure the adequacy of the collateral. If the seller defaults and the value of the collateral declines or if bankruptcy proceedings are commenced with respect to the seller of the security, realization of the collateral by a Trust may be delayed or limited.
Option Writing/Purchasing: When a Trust writes or purchases an option, an amount equal to the premium received or paid by the Trust is recorded as a liability or an asset and is subsequently adjusted to the current market value of the option written or purchased. Premiums received or paid from writing or purchasing options which expire unexercised are treated by the Trust on the expiration date as realized gains or losses. The difference between the premium and the amount paid or received on effecting a closing purchase or sale transaction, including brokerage commissions, is also treated as a realized gain or loss. If an option is exercised, the premium paid or received is added to the cost of the purchase or proceeds from the sale in determining whether a Trust has realized a gain or a loss on investment transactions. A Trust, as writer of an option, may have no control over whether the underlying securities may be sold (call) or purchased (put) and as a result bears the market risk of an unfavorable change in the price of the security underlying the written option.
Options, when used by the Trusts, help in maintaining a targeted duration. Duration is a measure of the price sensitivity of a security or a portfolio to relative changes in interest rates. For instance, a duration of “one” means that a portfolio’s or a security’s price would be expected to change by approximately one percent with a one percent change in interest rates, while a duration of five would imply that the price would move approximately five percent in relation to a one percent change in interest rates.
Option writing and purchasing may be used by the Trusts as an attempt to manage the duration of positions, or collections of positions, so that changes in interest rates do not adversely affect the targeted duration of the portfolio unexpectedly. A call option gives the purchaser of the option the right (but not obligation) to buy, and obligates the seller to sell (when the option is exercised), the underlying position at the exercise price at any time or at a specified time during the option period. A put option gives the holder the right to sell and obligates the writer to buy the underlying position at the exercise price at any time or at a specified time during the option period. Put or call options can be purchased or sold to effectively help manage the targeted duration of the portfolio.
The main risk that is associated with purchasing options is that the option expires without being exercised. In this case, the option expires worthless and the premium paid for the option is considered the loss. The risk associated with writing call options is that a Trust may forgo the opportunity for a profit if the market value of the underlying position increases and the option is exercised. The risk in writing put options is that a Trust may incur a loss if the market value of the underlying position decreases and the option is exercised. In addition, the Trust risks not being able to enter into a closing transaction for the written option as the result of an illiquid market.
Interest Rate Swaps: In an interest rate swap, one investor pays a floating rate of interest on a notional principal amount and receives a fixed rate of interest on the same notional principal amount for a specified period of time. Alternatively, an investor may pay a fixed rate and receive a floating rate. Interest rate swaps are efficient as asset/liability management tools. In more complex swaps, the notional principal amount may decline (or amortize) over time.
12
During the term of the swap, changes in the value of the swap are recognized as unrealized gains or losses by “marking-to-market” to reflect the market value of the swap. When the swap is terminated, a Trust will record a realized gain or loss equal to the difference between the proceeds from (or cost of) the closing transaction and the Trust’s basis in the contract, if any.
The Trusts are exposed to credit loss in the event of non-performance by the other party to the swap. However, the Trusts closely monitor swaps and do not anticipate non-performance by any counterparty.
Swap Options: Swap options are similar to options on securities except that instead of selling or purchasing the right to buy or sell a security, the writer or purchaser of the swap option is granting or buying the right to enter into a previously agreed upon interest rate swap agreement at any time before the expiration of the option. Premiums received or paid from writing or purchasing options are recorded as liabilities or assets and are subsequently adjusted to the current market value of the option written or purchased. Premiums received or paid from writing or purchasing options which expire unexercised are treated by a Trust on the expiration date as realized gains or losses. The difference between the premium and the amount paid or received on effecting a closing purchase or sale transaction, including brokerage commission, is also treated as a realized gain or loss. If an option is exercised, the premium paid or received is added to the cost of the purchase or proceeds from the sale in determining whether a Trust has realized a gain or loss on investment transactions.
The main risk that is associated with purchasing swap options is that the swap option expires without being exercised. In this case, the option expires worthless and the premium paid for the swap option is considered the loss. The main risk that is associated with the writing of a swap option is the market risk of an unfavorable change in the value of the interest rate swap underlying the written swap option.
Swap options may be used by the Trusts to manage the duration of the Trusts’ portfolios in a manner similar to more generic options described above.
Interest Rate Caps: Interest rate caps are similar to interest rate swaps, except that one party agrees to pay a fee, while the other party pays the excess, if any, of a floating rate over a specified fixed or floating rate.
Interest rate caps are intended to both manage the duration of the Trusts’ portfolios and their exposure to changes in short-term interest rates. Owning interest rate caps reduces a portfolio’s duration, making it less sensitive to changes in interest rates from a market value perspective. The effect on income involves protection from rising short-term interest rates, which the Trusts experience primarily in the form of leverage.
The Trusts are exposed to credit loss in the event of non-performance by the other party to the interest rate cap. However, the Trusts do not anticipate non-performance by any counterparty.
Transaction fees paid or received by the Trusts are recognized as assets or liabilities and amortized or accreted into interest expense or income over the life of the interest rate cap. The asset or liability is subsequently adjusted to the current market value of the interest rate cap purchased or sold. Changes in the value of the interest rate cap are recognized as unrealized gains and losses.
Interest Rate Floors: Interest rate floors are similar to interest rate swaps, except that one party agrees to pay a fee, while the other party pays the deficiency, if any, of a floating rate under a specified fixed or floating rate.
Interest rate floors are used by the Trusts to both manage the duration of the portfolios and their exposure to changes in short-term interest rates. Selling interest rate floors reduces a portfolio’s duration, making it less sensitive to changes in interest rates from a market value perspective. The Trusts’ leverage provides extra income in a period of falling rates. Selling floors reduces some of that extra income by partially monetizing it as an up front payment which the Trusts receive.
The Trusts are exposed to credit loss in the event of non-performance by the other party to the interest rate floor. However, the Trusts do not anticipate non-performance by any counterparty.
Transaction fees paid or received by the Trusts are recognized as assets or liabilities and amortized or accreted into interest expense or income over the life of the interest rate floor. The asset or liability is subsequently adjusted to the current market value of the interest rate floor purchased or sold. Changes in the value of the interest rate floor are recognized as unrealized gains and losses.
Financial Futures Contracts: A futures contract is an agreement between two parties to buy and sell a financial instrument for a set price on a future date. Initial margin deposits are made upon entering into futures contracts and can be either cash or securities. During the period the futures contract is open, changes in the value of the contract are recognized as unrealized gains or losses by “marking-to-market” on a daily basis to reflect the market value of the contract at the end of each day’s trading. Variation margin payments are made or received, depending upon whether unrealized gains or losses are incurred. When the contract is closed, a Trust records a realized gain or loss equal to the difference between the proceeds from (or cost of) the closing transaction and the Trust’s basis in the contract.
Financial futures contracts, when used by the Trusts, help in maintaining a targeted duration. Futures contracts can be sold to effectively shorten an otherwise longer duration portfolio. In the same sense, futures contracts can be purchased to lengthen a portfolio that is shorter than its duration target. Thus, by buying or selling futures contracts, the Trusts may attempt to manage the duration of positions so that changes in interest rates do not change the duration of the portfolio unexpectedly.
Short Sales: The Trusts may make short sales of securities as a method of managing potential price declines in similar securities owned. When a Trust makes a short sale, it may borrow the security sold short and deliver it to the broker-dealer through which it made the short sale as collateral for its obligation to deliver the security upon conclusion of the sale. The Trusts may have to pay a fee to borrow the particular securities and may be obligated to pay over any payments received on such borrowed securities. A gain, limited to the price at which the Trust sold the security short, or a loss, unlimited as to dollar amount, will be recognized upon the termination of a short sale if the market price is greater or less than the proceeds originally received.
13
Security Lending: The Trusts may lend their portfolio securities to qualified institutions. The loans are secured by collateral at least equal, at all times, to the market value of the securities loaned. The Trusts may bear the risk of delay in recovery of, or even loss of rights in, the securities loaned should the borrower of the securities fail financially. The Trusts receive compensation for lending their securities in the form of interest on the loan. The Trusts also continue to receive interest on the securities loaned, and any gain or loss in the market price of the securities loaned that may occur during the term of the loan will be for the accounts of the Trusts. The Trusts did not enter into any security lending transactions during the period ended June 30, 2004.
Segregation: In cases in which the Investment Company Act of 1940, as amended, and the interpretive positions of the Securities and Exchange Commission (“SEC”) require that each Trust segregate assets in connection with certain investments (e.g., when issued securities, reverse repurchase agreements or futures contracts), each Trust will, consistent with certain interpretive letters issued by the SEC, designate on its books and records cash or other liquid debt securities having a market value at least equal to the amount that would otherwise be required to be physically segregated.
Federal Income Taxes: It is each Trust’s intention to continue to be treated as a regulated investment company under the Internal Revenue Code and to distribute sufficient amounts of its taxable income to it’s parent. Therefore, no Federal income tax provisions are required. As part of a tax planning strategy, each Trust intends to retain a portion of its taxable income and pay an excise tax on the undistributed amounts.
Estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Note 2. Agreements
Each Trust has an Investment Management Agreement with BlackRock Advisors, Inc. (the “Advisor”), a wholly owned subsidiary of BlackRock, Inc., which in turn is an indirect, majority owned subsidiary of The PNC Financial Services Group, Inc. Each Trust has an Administration Agreement with the Advisor.
Each Trust reimburses its respective parent for its pro rata share of applicable expenses, including investment advisory and administrative fees, in an amount equal to the proportionate amount of average net assets which are held by each Trust relative to the average net assets of its respective parent.
Note 3. Portfolio Securities
Purchases and sales of investment securities, other than short-term investments, dollar rolls and U.S. government securities, for the six months ended June 30, 2004, aggregated as follows:
Trust | | Purchases | | Sales | |
| |
| |
| |
| BATS | | $ | 4,758,714 | | $ | 6,417,725 | |
| BQTS | | 144,332,039 | | 314,054,706 | |
Purchases and sales of U.S. government securities for the six months ended June 30, 2004, aggregated as follows:
| Trust | | Purchases | | Sales | |
| |
| |
| |
| BATS | | $ | 1,096,813 | | $ | — | |
| BQTS | | | — | | | 5,400,000 | |
A Trust may from time to time purchase in the secondary market certain mortgage pass-through securities packaged or master serviced by affiliates or mortgage related securities containing loans or mortgages originated by PNC Bank or its affiliates, including Midland Loan Services, Inc., all of which are affiliates of the advisor. It is possible, under certain circumstances, that Midland Loan Services, Inc., or its affiliates, could have interests that are in conflict with the holders of these mortgage backed securities, and such holders could have rights against Midland Loan Services, Inc. or its affiliates.
At June 30, 2004, the total cost of securities for Federal income tax purposes and the aggregate gross unrealized appreciation and depreciation for securities held by each Trust were as follows:
| Trust | | Cost | | Appreciation | | Depreciation | | Net | |
| |
| |
| |
| |
| |
| BATS | | $ | 83,727,441 | | $ | 7,334,110 | | $ | 217,130 | | $ | 7,116,980 | |
| BQTS | | | 249,155,440 | | | 18,561,176 | | 3,943,541 | | | 14,617,635 | |
For Federal income tax purposes, the Trusts had capital loss carryforwards as follows:
| | | Capital Loss | | | | | | Capital Loss | | | |
| | | Carryforward | | | | | | Carryforward | | | |
| | | Amount at | | | | | | Amount at | | | |
| Trust | | September 30, 2003 | | Expires | | Trust | | July 31, 2003 | | Expires | |
| |
| |
| |
| |
| |
| |
| BATS | | $ | 80,454 | | 2008 | | BQTS | | $ | 7,677,667 | | 2010 | |
| | | | 127,941 | | 2009 | | | | 8,412,381 | | 2011 | |
| | | 20,771 | | 2010 | | | |
| | | |
| | |
| | | | | | $ | 16,090,048 | | | |
| | | $ | 229,166 | | | | | |
|
| | | |
| | |
| | | | | | | | | | |
| | | | | | | | | | | | | |
14
Accordingly, no capital gain distributions are expected to be paid to shareholders of a Trust until that Trust has net realized capital gains in excess of its carryforward amounts. The tax year ends for BATS and BQTS are September 30th and July 31st, respectively.
Details of open financial futures contracts at June 30, 2004, were as follows:
| | | | | | | | | | | | Unrealized | |
| | Number of | | | | Expiration | | Value at Trade | | Value at | | Appreciation | |
| | Contracts | | Type | | Date | | Date | | June 30, 2004 | | (Depreciation) | |
| |
| |
| |
| |
| |
| |
| |
| Long Position: | | | | | | | | | | | | |
| BQTS | 814 | | 10 Yr. U.S. T-Note | | Sept ‘04 | | $ | 88,981,322 | | $ | 88,993,093 | | $ | 11,771 | |
| | | | | | | | | | | | | |
|
| |
| Short Position: | | | | | | | | | | | | | | | |
| BQTS | 500 | | 5 Yr. U.S. T-Note | | Sept ‘04 | | | 54,280,025 | | | 54,343,746 | | | (63,721 | ) |
| | 1000 | | 30 Yr. U.S. T-Bond | | Sept ‘04 | | | 105,895,990 | | 106,375,000 | | (479,010 | ) |
| | | | | | | | | | | | |
| |
| | | | | | | | | | | | | | $ | (542,731 | ) |
| | | | | | | | | | | | | |
|
| |
Note 4. Borrowings
Reverse Repurchase Agreements: The Trusts may enter into reverse repurchase agreements with qualified, third party broker-dealers as determined by and under the direction of each Trust’s Board. Interest on the value of reverse repurchase agreements issued and outstanding is based upon competitive market rates at the time of issuance. At the time a Trust enters into a reverse repurchase agreement, it will establish and maintain a segregated account with the lender, containing liquid investment grade securities having a value not less than the repurchase price, including accrued interest of the reverse repurchase agreement. Details of open reverse repurchase agreements and their respective underlying collateral at June 30, 2004, were as follows:
| | | Corresponding | | | | | | | | | | | | | | | | |
| | | Underlying | | | | | | | | | | | | | | | | |
| | | Collateral | | | | | | | | | Maturity | | Net Closing | | | |
Trust | | (See chart below) | | Counter Party | | Rate | | Trade Date | | Date | | Amount | | Par | |
| |
| |
| |
| |
| |
| |
| |
| |
| BATS | | 1 | | Barclays Capital, Inc. | | 0.60 | % | | 6/30/04 | | 7/01/04 | | $ | 1,112,644 | | $ | 1,112,625 | |
| | | 2 | | Citigroup Global Markets, Inc. | | 1.20 | | | 6/30/04 | | 7/01/04 | | | 1,473,612 | | | 1,473,563 | |
| | | 3 | | Citigroup Global Markets, Inc. | | 1.40 | | | 6/30/04 | | 7/01/04 | | | 780,030 | | | 780,000 | |
| | | 4 | | Lehman Brothers | | 1.13 | | | 6/21/04 | | 7/08/04 | | | 4,389,704 | | 4,387,500 | |
| | | | | | | | | | | | | | | | |
| |
| | | | | | | | | | | | | | | | $ | 7,753,688 | |
| | | | | | | | | | | | | | | | |
|
| |
Details of underlying collateral for open reverse repurchase agreements at June 30, 2004 were as follows:
| | | Corresponding | | | | | | | | | | | | | | |
| | | Reverse | | | | | | | | | | | | | | |
| | | Repurchase | | | | | | | | | | | | | | |
| | | Agreement | | | | | | | Maturity | | | | | | | |
| Trust | | (See chart above) | | Description | | Rate | | Date | | Original Face | | Current Face | | Market Value | |
| |
| |
| |
| |
| |
| |
| |
| |
| BATS | | 1 | | U.S. Treasury Notes | | 4.00 | % | | 2/15/04 | | $ | 1,150,000 | | $ | 1,150,000 | | $ | 1,095,916 | |
| | | 2 | | U.S. Treasury Notes | | 3.50 | | | 11/15/06 | | | 1,450,000 | | | 1,450,000 | | | 1,468,748 | |
| | 3 | | U.S. Treasury Bonds | | 0.00 | | | 8/15/05 | | | 800,000 | | | 800,000 | | | 780,770 | |
| | | 4 | | U.S. Treasury Bonds | | 0.00 | | | 8/15/05 | | | 4,500,000 | | | 4,500,000 | | 4,391,829 | |
| | | | | | | | | | | | | | | | | |
| |
| | | | | | | | | | | | | | | | | | $ | 7,737,263 | |
| | | | | | | | | | | | | | | | | |
|
| |
The average daily balance and weighted average interest rate of reverse repurchase agreements during the six months ended June 30, 2004, were as follows:
| | | Average Daily | | Weighted Average | |
| Trust | | Balance | | Interest Rate | |
| |
| |
| |
| BATS | | $ | 7,753,159 | | 1.04 | % | |
| BQTS | | | 36,543,739 | | 1.14 | % | |
Dollar Rolls: The Trusts may enter into dollar rolls in which a Trust sells securities for delivery in the current month and simultaneously contracts to repurchase substantially similar (same type, coupon and maturity) securities on a specified future date. During the roll period the Trusts forgo principal and interest paid on the securities. The Trusts will be compensated by the interest earned on the cash proceeds of the initial sale and/or by the lower repurchase price at the future date. The Trusts did not enter into any dollar roll transactions during the six months ended June 30, 2004.
15
Note 5. Distributions to Shareholders
The tax character of distributions paid during the six months ended June 30, 2004 and the year ended December 31, 2003 were as follows:
| | Six months ended June 30, 2004 | |
| |
| |
| | Ordinary | | Long-term | | Total | |
| Distributions Paid From: | Income | | Capital Gains | | Distributions | |
| |
| |
| |
| |
| BATS | $ | — | | $ | — | | $ | — | |
| BQTS | | 6,017,826 | | | — | | | 6,017,826 | |
| | | Year ended December 31, 2003 | |
| | |
| |
| | | Ordinary | | Long-term | | Return of | | Total | |
| | | Income | | Capital Gains | | Capital | | Distributions | |
| | |
| |
| |
| |
| |
| BATS | | $ | 17,530,801 | | $ | — | | $ | — | | $ | 17,530,801 | |
| BQTS | | | 18,000,000 | | | — | | | — | | | 18,000,000 | |
As of June 30, 2004, the components of distributable earnings on a tax basis were as follows:
| | | Undistributed | | Undistributed | | Unrealized | |
| | | Ordinary | | Long-term | | Net | |
| | | Income | | Gains | | Appreciation | |
| | |
| |
| |
| |
| BATS | | $ | 2,465,171 | | $ | — | | $ | 7,116,980 | |
| BQTS | | | — | | | — | | | 14,617,635 | |
Note 6. Capital
There are 200 million shares of $0.01 par value common shares authorized for each Trust. BAT and BQT owned all of the shares outstanding at June 30, 2004, for their respective subsidiary.
16
BAT Subsidiary, Inc. and BQT Subsidiary, Inc.
| Directors | Custodian |
| Ralph L. Schlosstein, Chairman | State Street Bank and Trust Company |
| Andrew F. Brimmer | 225 Franklin Street |
| Richard E. Cavanagh | Boston, MA 02110 |
| Kent Dixon | |
| Frank J. Fabozzi | Transfer Agent |
| Robert S. Kapito | EquiServe Trust Company, N.A. |
| James Clayburn La Force, Jr. | 250 Royall Street |
| Walter F. Mondale | Canton, MA 02021 |
| | (800) 699-1BFM |
| Officers | |
| Robert S. Kapito, President | Independent Accountants |
| Henry Gabbay, Treasurer | Deloitte & Touche LLP |
| Anne Ackerley, Vice President | 200 Berkeley Street |
| Richard M. Shea, Vice President/Tax | Boston, MA 02116 |
| James Kong, Assistant Treasurer | |
| Vincent B. Tritto, Secretary | Legal Counsel |
| Brian P. Kindelan, Assistant Secretary | Skadden, Arps, Slate, Meagher & Flom LLP |
| | Four Times Square |
| Investment Advisor | New York, NY 10036 |
| BlackRock Advisors, Inc. | |
| 100 Bellevue Parkway | Legal Counsel – Independent Directors |
| Wilmington, DE 19809 | Debevoise & Plimpton LLP |
| (800) 227-7BFM | 919 Third Avenue |
| | New York, NY 10022 |
| | |
| | This report is for shareholder information. This is not a prospectus |
| | intended for use in the purchase or sale of Trust shares. |
| | Statements and other information contained in this report are as |
| | dated and are subject to change. |
The Trusts have delegated to the Advisor the voting of proxies relating to their voting securities pursuant to the Advisor’s proxy voting policies and procedures. You may obtain a copy of these proxy voting procedures, without charge, by calling (800) 699-1236. These policies and procedures are also available on the website of the Securities and Exchange Commission at http://www.sec.gov.
| This report is for shareholder information. This is not a prospectus intended for use in the purchase or sale of Trust shares. Statements and other information contained in this report are as dated and are subject to change. | | |
Item 2. Code of Ethics.
Not applicable for semi-annual reports.
Item 3. Audit Committee Financial Expert.
Not applicable for semi-annual reports.
Item 4. Principal Accountant Fees and Services.
Not applicable for semi-annual reports.
Item 5. Audit Committee of Listed Registrants.
Not applicable for semi-annual reports.
Item 6. Schedule of Investments.
Not applicable for reports for periods ending on or before July 9, 2004.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies.
Not applicable for semi-annual reports.
Item 8. Purchases of Equity Securities by Closed-End Management Company and
Affiliated Purchasers.
Not applicable.
Item 9. Submission of Matters to a Vote of Security Holders.
Not applicable.
Item 10. Controls and Procedures.
(a) The Registrant's principal executive officer and principal financial officer have evaluated the Registrant's disclosure controls and procedures within 90 days of this filing and have concluded that the Registrant's disclosure controls and procedures are effective, as of a date, in ensuring that information required to be disclosed by the registrant in this Form N-CSR was recorded, processed, summarized, and reported timely.
(b) The Registrant's principal executive officer and principal financial officer are aware of no changes in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal half-year that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting.
Item 11. Exhibits.
(a)(1) Not applicable.
(a)(2) Separate certifications of Principal Executive and Financial Officers pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
(a)(3) Not applicable.
(b) Certification of Principal Executive and Financial Officers pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
SIGNATURES
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.
| (Registrant) | The BlackRock BAT Subsidiary Inc. |
| |
|
| By: | /s/ Henry Gabbay | |
| |
| |
| Name: | Henry Gabbay | |
| Title: | Treasurer | |
| Date: | September 8, 2004 | |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| By: | /s/ Robert S. Kapito | |
| |
| |
| Name: | Robert S. Kapito | |
| Title: | Principal Executive Officer | |
| Date: | September 8, 2004 | |
| By: | /s/ Henry Gabbay | |
| |
| |
| Name: | Henry Gabbay | |
| Title: | Principal Financial Officer | |
| Date: | September 8, 2004 | |
