As of December 31, 2007, the components of distributable earnings on a tax basis were as follows:
The difference between book-basis and tax-basis unrealized gains/losses is attributable to amortization methods of premiums and discounts on fixed income securities, the retention of tax-exempt income, the deferral of post-October capital losses for tax purposes, the tax deferral of losses on wash sales, the timing of recognition of income from partnership investments, deferred compensation to Trustees and other temporary differences.
For federal income tax purposes, the following Trusts had capital loss carryforwards at December 31, 2007, the Trust’s last tax year-end (other than the 2020 Trusts and Strategic Trusts, each of which has a tax year-end of June 30th). These amounts may be used to offset future realized capital gains, if any:
There are 200 million of $0.01 par value common shares authorized for each of the 2008 Trusts and Insured Municipal. There are an unlimited number of $0.001 par value common shares authorized for each of the 2018 Trusts, 2020 Trusts and Strategic Trusts. Each Trust may classify or reclassify any unissued common shares into one or more series of Auction Preferred Shares. At December 31, 2007, the common shares owned by affiliates of the Advisor of each Trust were as follows:
During the years ended December 31, 2007 and 2006, the following Trusts issued additional shares under their respective dividend reinvestment plan:
As of December 31, 2007, each Trust had the following series of Auction Preferred Shares outstanding as listed in the table below. The Auction Preferred Shares have a liquidation value of $25,000 per share plus any accumulated unpaid dividends.
Dividends on seven-day Auction Preferred Shares are cumulative at a rate which is reset every seven days based on the results of an auction. Dividends on 28-day Auction Preferred Shares are cumulative at a rate which resets every 28 days based on the results of an auction. If the Auction Preferred Shares are unable to be remarketed on the remarketing date as part of the auction process, the Trusts would be 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 remarketed. The maximum applicable rate on preferred shares is 110% of the higher of 90% of (i) 90% of the quotient of the Taxable Equivalent of the Short-Term Municipal Bond Rate (ii) the interest equivalent of the 30-day commercial paper rate. During the year ended December 31, 2007, preferred shares of the Trusts were successfully remarketed at each remar-keting date. The dividend ranges and average on the preferred shares for each of the Trusts for the year ended December 31, 2007 were as follows:
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Notes to Financial Statements (continued) |
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Trust | | Series | | Low | | High | | Average | |
| | | | | | | | | | |
Insured Municipal | | | M7 | | | 2.90 | % | | 4.30 | % | | 3.51 | % |
Municipal 2018 | | | W7 | | | 3.10 | | | 4.60 | | | 3.71 | |
| | | R7 | | | 3.40 | | | 4.60 | | | 3.76 | |
Municipal 2020 | | | M7 | | | 3.35 | | | 4.60 | | | 3.77 | |
| | | W7 | | | 3.22 | | | 4.75 | | | 3.75 | |
| | | F7 | | | 3.37 | | | 4.60 | | | 3.74 | |
Strategic Municipal | | | W7 | | | 3.18 | | | 4.72 | | | 3.74 | |
California 2018 | | | M7 | | | 1.90 | | | 4.15 | | | 3.38 | |
Florida 2020 | | | F7 | | | 3.37 | | | 4.60 | | | 3.75 | |
New York 2018 | | | T7 | | | 2.19 | | | 4.20 | | | 3.20 | |
Pennsylvania Strategic | | | W7 | | | 2.75 | | | 4.71 | | | 3.54 | |
| | | | | | | | | | | | | | |
A Trust 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 Auction Preferred Shares would be less than 200%.
The Auction Preferred Shares are redeemable at the option of each Trust, in whole or in part, on any dividend payment date at $25,000 per share plus any accumulated unpaid dividends whether or not declared. The Auction Preferred Shares are also subject to mandatory redemption at $25,000 per share plus any accumulated or unpaid dividends, whether or not declared, if certain requirements relating to the composition of the assets and liabilities of a Trust, as set forth in each Trust’s Declaration of Trust/Articles Supplementary, are not satisfied.
The holders of Auction 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 as a single class. However, holders of Auction 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 Auction Preferred Shares, voting separately as a class would be required to (a) adopt any plan of reorganization that would adversely affect the Auction Preferred Shares (b) change a Trust’s subclassification as a closed-end investment company or change its fundamental investment restrictions and (c) change its business so as to cease to be an investment company.
On June 13, 2006, Insured Municipal 2008 Trust’s Board approved the redemption of all of the 2,060 R28 Auction Preferred Shares outstanding in preparation for its termination on or about December 31, 2008. The shares were redeemed at a price of $25,000 per share plus any accrued and unpaid dividends through the redemption date on July 14, 2006 (an aggregate price of $51,500,000). On June 23, 2006, Insured Municipal 2008 Trust’s Board approved the redemption of all of the 2,060 T28 Auction Preferred Shares outstanding in preparation for its termination on or about December 31, 2008. The shares were redeemed at a price of $25,000 per share plus any accrued and unpaid dividends through the redemption date on July 26, 2006 (an aggregate price of $51,500,000). Management believes that the redemption of the R28 and T28 Auction Preferred Shares will not affect the Insured Municipal 2008 Trust’s ability to satisfy the terms of the remaining Auction Preferred Shares outstanding.
On September 21, 2006, Insured Municipal 2008 Trust’s Board approved the redemption of 3,480 T7 Auction Preferred Shares outstanding in preparation for its termination on or about December 31, 2008. The shares were redeemed at a price of $25,000 per share plus any accrued and unpaid dividends through the redemption date on October 25, 2006 (an aggregate price of $87,000,000). Management believes that the redemption of the T7 Auction Preferred Shares will not affect the Insured Municipal 2008 Trust’s ability to satisfy the terms of the remaining Auction Preferred Shares outstanding.
On September 21, 2006, California Insured 2008 Trust’s Board approved the redemption of all of the 2,622 W7 Auction Preferred Shares outstanding in preparation for its termination on or about December 31, 2008. The shares were redeemed at a price of $25,000 per share plus any accrued and unpaid dividends through the redemption date on October 26, 2006 (an aggregate price of $65,550,000). On September 21, 2006, California Insured 2008 Trust’s Board approved the redemption of all of the 1,560 W28 Auction Preferred Shares outstanding in preparation for its termination on or about December 31, 2008. The shares were redeemed at a price of $25,000 per share plus any accrued and unpaid dividends through the redemption date on November 9, 2006 (an aggregate price of $39,000,000).
On June 6, 2006, Florida Insured 2008 Trust’s Board approved the redemption of 1,200 R7 Auction Preferred Shares outstanding in preparation for its termination on or about December 31, 2008. The shares were redeemed at a price of $25,000 per share plus any accrued and unpaid dividends through the redemption date on July 7, 2006 (an aggregate price of $33,000,000).
On September 21, 2006, Florida Insured 2008 Trust’s Board approved the redemption of all of the 2,166 R7 Auction Preferred Shares outstanding in preparation for its termination on or about December 31, 2008. The shares were redeemed at a price of $25,000 per share plus any accrued and unpaid dividends through the redemption date on October 27, 2006 (an aggregate price of $54,150,000).
On June 9, 2006, New York Insured 2008 Trust’s Board approved the redemption of all of the 1,710 F28 Auction Preferred Shares outstanding in preparation for its termination on or about December 31, 2008. The shares were redeemed at a price of $25,000 per share plus any accrued and unpaid dividends through the redemption date on July 10, 2006 (an aggregate price of $42,750,000).
On September 21, 2006, New York Insured 2008 Trust’s Board approved the redemption of all of the 2,672 F7 Auction Preferred Shares outstanding in preparation for its termination on or about December 31, 2008. The shares were redeemed at a price of $25,000 per share plus any accrued and unpaid dividends through the redemption date on October 23, 2006 (an aggregate price of $66,800,000).
On February 22, 2007 Insured Municipal 2008 Trust’s Board approved the redemption of all of the 1,180 T7 Auction Preferred Shares outstanding in preparation for its termination on or about December 31, 2008. The shares
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| ANNUAL REPORT | DECEMBER 31, 2007 | 61 |
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Notes to Financial Statements (concluded) |
were redeemed at a price of $25,000 per share plus any accrued and unpaid dividends through the redemption date on April 4, 2007 (an aggregate price of $29,500,000). On February 22, 2007, Insured Municipal 2008 Trust’s Board approved the redemption of all of the 2,060 R7 Auction Preferred Shares outstanding in preparation for its termination on or about December 31, 2008. The shares were redeemed at a price of $25,000 per share plus any accrued and unpaid dividends through the redemption date on April 9, 2007 (an aggregate price of $51,500,000).
On February 22, 2007 Insured Municipal Trust’s Board approved the redemption of 1,616 M7 Auction Preferred Shares outstanding in preparation for its termination on or about December 31, 2010. The shares were redeemed at a price of $25,000 per share plus any accrued and unpaid dividends through the redemption date on April 3, 2007 (an aggregate price of $40,400,000). On February 22, 2007, Insured Municipal Trust’s Board approved the redemption of all of the 2,600 M28 Auction Preferred Shares outstanding in preparation for its termination on or about December 31, 2008. The shares were redeemed at a price of $25,000 per share plus any accrued and unpaid dividends through the redemption date on April 10, 2007 (an aggregate price of $65,000,000).
6. Concentration Risk
The Trusts concentrate their investments in securities issued by state agencies, other governmental entities and U.S. Territories. The Trusts are more susceptible to adverse financial, social, environmental, economic, regulatory and political factors that may affect these state agencies, other governmental entities and U.S. Territories, which could seriously affect the ability of these states and their municipal subdivisions to meet continuing obligations for principal and interest payments and therefore could impact the value of the Trusts’ investments and net asset value per share, than if the Trusts were not concentrated in securities issued by state agencies, other governmental entities and U.S. Territories.
Many municipalities insure repayment of their obligations. Although bond insurance reduces the risk of loss due to default by an issuer, such bonds remain subject to the risk that market value may fluctuate for other reasons and there is no assurance that the insurance company will meet its obligations. These securities have been identified in the Portfolios of Investments.
7. Subsequent Events
During the period February 13, 2008 to February 22, 2008, the Auction Preferred Shares of each Trust were not successfully remarketed. As a result, the Auction Preferred Share dividend rates were reset to the maximum applicable rate which ranged from 3.30% to 3.41% for the Trusts during the period. Unsuccessful remarketing during the auction process is not an event of default or credit but rather a liquidity event for the holders of the Auction Preferred Shares.
Each Trust paid a distribution to holders of Common Shares on February 1, 2008 to shareholders of record on January 22, 2008. The per share amounts were as follows:
| | | | |
| | | | | |
Trust | | Common
Dividend
Per Share | |
| | | | |
Insured Municipal 2008 | | $ | 0.047500 | |
Insured Municipal | | | 0.030417 | |
Municipal 2018 | | | 0.075500 | |
Municipal 2020 | | | 0.062250 | |
Strategic Municipal | | | 0.075000 | |
California Insured 2008 | | | 0.052500 | |
California 2018 | | | 0.061250 | |
Florida Insured 2008 | | | 0.020000 | |
Florida 2020 | | | 0.051000 | |
New York Insured 2008 | | | 0.045000 | |
New York 2018 | | | 0.068750 | |
Pennsylvania Strategic | | | 0.060000 | |
| | | | | |
The dividends declared on Auction Preferred Shares for the period January 1, 2008 to January 31, 2008 for each of the Trusts were as follows:
| | | | | | | |
| | | | | | | | |
Trust | | Series | | Dividends
Declared | |
| | | | | | |
Insured Municipal | | | M7 | | $ | 150,228 | |
Municipal 2018 | | | W7 | | | 222,059 | |
| | | R7 | | | 227,590 | |
Municipal 2020 | | | M7 | | | 154,844 | |
| | | W7 | | | 200,380 | |
| | | F7 | | | 161,213 | |
Strategic Municipal | | | W7 | | | 217,347 | |
California 2018 | | | M7 | | | 131,483 | |
Florida 2020 | | | F7 | | | 135,316 | |
New York 2018 | | | T7 | | | 70,989 | |
Pennsylvania Strategic | | | W7 | | | 52,423 | |
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62 | ANNUAL REPORT | DECEMBER 31, 2007 | |
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Report of Independent Registered Public Accounting Firm |
| |
To the Trustees and Shareholders of: |
| BlackRock Insured Municipal 2008 Term Trust Inc. |
| BlackRock Insured Municipal Term Trust Inc. |
| BlackRock Municipal 2018 Term Trust |
| BlackRock Municipal 2020 Term Trust |
| BlackRock Strategic Municipal Trust |
| BlackRock California Insured Municipal 2008 Term Trust Inc. |
| BlackRock California Municipal 2018 Term Trust |
| BlackRock Florida Insured Municipal 2008 Term Trust |
| BlackRock Florida Municipal 2020 Term Trust |
| BlackRock New York Insured Municipal 2008 Term Trust Inc. |
| BlackRock New York Municipal 2018 Term Trust |
| BlackRock Pennsylvania Strategic Municipal Trust |
| (Collectively the “Trusts”) |
We have audited the accompanying statements of assets and liabilities of the Trusts, including the portfolios of investments, as of December 31, 2007, 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 periods presented. 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 audits 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 December 31, 2007, 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 position of the Trusts as of December 31, 2007, 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 their financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America.
Deloitte & Touche LLP
Boston, Massachusetts
February 22, 2008
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| ANNUAL REPORT | DECEMBER 31, 2007 | 63 |
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The Benefits and Risks of Leveraging (unaudited) |
The Trusts utilize leverage to seek to enhance the yield and net asset value of its Common Stock. However, these objectives cannot be achieved in all interest rate environments. To leverage, the Trusts issue Auction Preferred Stock, which pays dividends at prevailing short-term interest rates, and invests the proceeds in long-term municipal bonds. The interest earned on these investments, net of dividends to Auction Preferred Stock, is paid to Common Stock shareholders in the form of dividends, and the value of these Trusts holdings is reflected in the per share net asset value of the Trust’s Common Stock. However, in order to benefit Common Stock shareholders, the yield curve must be positively sloped; that is, short-term interest rates must be lower than long-term interest rates. At the same time, a period of generally declining interest rates will benefit Common Stock shareholders. If either of these conditions change, then the risks of leveraging will begin to outweigh the benefits.
To illustrate these concepts, assume a trust’s Common Stock capitalization of $100 million and the issuance of Auction Preferred Stock 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 approximately 3% and long-term interest rates are approximately 6%, the yield curve has a strongly positive slope. The trust pays dividends on the $50 million of Auction Preferred Stock based on the lower short-term interest rates. At the same time, the trust’s total portfolio of $150 million earns the income based on long-term interest rates. Of course, increases in short-term interest rates would reduce (and even eliminate) the dividends on the Common Stock.
In this case, the dividends paid to Auction Preferred Stock shareholders are significantly lower than the income earned on the trust’s long-term investments and, therefore, the Common Stock shareholders are the beneficiaries of the incremental yield. However, if short-term interest rates rise, narrowing the differential between short-term and long-term interest rates, the incremental yield pickup on the Common Stock will be reduced or eliminated completely. At the same time, the market value of the trust’s Common Stock (that is, its price as listed on the New York Stock Exchange or American Stock Exchange) may, as a result, decline. Furthermore, if long-term interest rates rise, the Common Stock’s net asset value will reflect the full decline in the price of the portfolio’s investments, since the value of the Trust’s Auction Preferred Stock does not fluctuate. In addition to the decline in net asset value, the market value of the trust’s Common Stock may also decline.
As of December 31, 2007 the Trusts had the following leverage amounts, due to Auction Market Preferred Shares (“AMPS”), to total net assets before the deduction of AMPS of:
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Trust | | Leverage % | |
| | | | |
Insured Municipal | | | 20% | |
Municipal 2018 | | | 36% | |
Municipal 2020 | | | 37% | |
Strategic Municipal | | | 37% | |
California 2018 | | | 37% | |
Florida 2020 | | | 37% | |
New York 2018 | | | 35% | |
Pennsylvania Strategic | | | 38% | |
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As a part of its investment strategy, the Trusts may invest in certain securities whose potential income return is inversely related to changes in a floating interest rate (“inverse floaters”). In general, income on inverse floaters will decrease when short-term interest rates increase and increase when short-term interest rates decrease. Investments in inverse floaters may be characterized as derivative securities and may subject the Trusts to the risks of reduced or eliminated interest payments and losses of invested principal. In addition, inverse floaters have the effect of providing investment leverage and, as a result, the market value of such securities will generally be more volatile than that of fixed rate, tax-exempt securities. To the extent a Trust invests in inverse floaters, the market value of the Trust’s portfolio and net asset value of the Trust’s shares may also be more volatile than if the Trust did not invest in these securities.
The Trusts may invest in swap agreements, which are over-the-counter contracts in which one party agrees to make periodic payments based on the change in market value of a specified bond, basket of bonds, or index in return for periodic payments based on a fixed or variable interest rate or the change in market value of a different bond, basket of bonds or index. Swap agreements may be used to obtain exposure to a bond market without owning or taking physical custody of securities. Swap agreements involve the risk that the party with whom each Fund has entered into a swap will default on its obligation to pay the Trust and the risk that the Trust will not be able to meet its obligation to pay the other party to the agreement.
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64 | ANNUAL REPORT | DECEMBER 31, 2007 | |
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Dividend Reinvestment Plan (unaudited) |
Pursuant to each Trust’s Dividend Reinvestment Plan (the “Plan”), common shareholders of the 2008 Trusts and Insured Municipal may elect to have all distributions of dividends and capital gains reinvested by Computershare Trust Company, N.A. (the “Plan Agent”) in the respective Trust’s shares pursuant to the Plan. The common shareholders of the 2018 Trusts, 2020 Trusts and Strategic Trusts are automatically enrolled in 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 a 2008 Trust, Insured Municipal, 2018 and/or 2020 Trust declares a dividend or determines to make a capital gain distribution, the Plan Agent will acquire shares for the participants’ account by the purchase of outstanding shares on the open market, on the Trust’s primary exchange or elsewhere (“open market purchases”). These Trusts will not issue any new shares under the Plan.
After a Strategic Trust declares a dividend or determines to make a capital gain distribution, the Plan Agent will acquire shares for the participants’ account, depending upon the circumstances described below, either (i) through receipt of unissued but authorized shares from the Trust (“newly issued shares”) or (ii) by open market purchases. If, on the dividend payment date, the NAV is equal to or less than the market price per share plus estimated brokerage commissions (such condition being referred to herein as “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 being referred to herein as “market discount”), the Plan Agent will invest the dividend amount in shares acquired on behalf of the participants in open market purchases.
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 Trust. However, each participant will pay a pro rata share of brokerage commissions incurred with respect to the Plan Agent’s open market purchases in connection with the reinvestment of dividends and distributions. The automatic reinvestment of dividends and distributions will not relieve participants of any federal 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 the Plan Agent are subject to a $2.50 sales fee and a $0.15 per share sold brokerage commission. All correspondence concerning the Plan should be directed to the Plan Agent at 250 Royall Street, Canton, MA 02021, or by calling (800) 699-1BFM.
From time to time in the future, the Trusts may effect redemptions and/or repurchases of its Auction Preferred Shares as provided in the applicable constituent instruments or as agreed upon by the Trust and holders of Auction Preferred Shares. The Trusts would generally effect such redemptions and/or repurchases to the extent necessary to maintain applicable asset coverage requirements.
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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 nonpublic 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 nonpublic 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 nonaffiliated third parties any non-public information about its Clients, except as permitted by law or as necessary to service Client accounts. These nonaffiliated 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 nonpublic 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 nonpublic personal information of its Clients, including procedures relating to the proper storage and disposal of such information.
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| ANNUAL REPORT | DECEMBER 31, 2007 | 65 |
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Additional Information (unaudited) |
60 Day Notice
All of the net investment income distributions paid by BlackRock Closed-End Funds (Insured Municipal 2008 (BRM), Insured Municipal (BMT), Municipal 2018 (BPK), California Insured 2008 (BFC), California 2018 (BJZ), Florida Insured 2008 (BRF), New York Insured 2008 (BLN) and New York 2018 (BLH)) during the taxable year ended December 31, 2007 qualify as tax-exempt interest dividends for federal income tax purposes.
Additionally, the following summarizes the taxable per share distributions paid by the Fund during the year:
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| | | | Payable
Date | | Ordinary
Income | | Long-Term
Capital Gains | |
| | | | | | | | | | | | | | | | | |
Insured Municipal 2008 (BRM) | | | | | | | | | | | | | | | |
Common Shareholders | | | 12/31/2007 | | | $ | 0.020091 | | | | | — | | |
Insured Municipal (BMT) | | | | | | | | | | | | | | | |
Common Shareholders | | | 12/31/2007 | | | | — | | | | $ | 0.009172 | | |
Preferred Shareholders | | | | | | | | | | | | | | | |
Series M7 | | | | 12/18/2007 | | | | — | | | | $ | 19.13 | | |
Series M7 | | | | 12/26/2007 | | | | — | | | | $ | 3.55 | | |
Municipal 2018 (BPK) | | | | | | | | | | | | | | | |
Common Shareholders | | | 01/14/2008 | | | $ | 0.028204 | | | | | — | | |
California 2018 (BJZ) | | | | | | | | | | | | | | | |
Common Shareholders | | | 01/14/2008 | | | $ | 0.019612 | | | | | — | | |
New York 2018 (BLH) | | | | | | | | | | | | | | | | |
Common Shareholders | | | 01/14/2008 | | | $ | 0.036331 | | | | | — | | |
The Joint Annual Meeting of Shareholders was held on August 16, 2007 for shareholders of record on June 20, 2007, to elect director or trustee nominees of each Trust. This proposal was part of the reorganization of the Trust’s Boards of Trustees/Directors (the “Boards”) that took effect on or about November 1, 2007. Each Board is organized into three classes; one class of which is elected annually. Each Trustee serves a three-year term concurrent with the class into which he or she is elected.
Approved the Class I Directors/Trustees as follows:
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| | G. Nicholas Beckwith, III | | Kent Dixon | | R. Glenn Hubbard | |
| | | | | | | | | | | | | |
| | Votes For | | Votes
Withheld | | Votes For | | Votes
Withheld | | Votes For | | Votes
Withheld | |
| | | | | | | | | | | | | | |
Insured Municipal 2008 | | 24,672,312 | | 258,862 | | 24,683,384 | | 247,790 | | 24,676,618 | | 254,556 | |
Insured Municipal | | 20,666,271 | | 1,902,985 | | 20,668,921 | | 1,900,335 | | 20,677,173 | | 1,892,083 | |
Municipal 2018 | | 15,341,058 | | 95,192 | | 15,341,633 | | 94,617 | | 15,338,770 | | 97,480 | |
Municipal 2020 | | 18,861,104 | | 469,074 | | 18,856,227 | | 473,951 | | 18,859,528 | | 470,650 | |
Strategic Municipal | | 6,404,338 | | 106,295 | | 6,401,409 | | 109,224 | | 6,404,203 | | 106,430 | |
California Insured 2008 | | 9,611,327 | | 172,970 | | 9,608,827 | | 175,470 | | 9,611,327 | | 172,970 | |
California Municipal 2018 | | 5,821,452 | | 92,556 | | 5,821,452 | | 92,556 | | 5,821,452 | | 92,556 | |
Florida Insured 2008 | | 6,917,185 | | 1,031,523 | | 6,915,185 | | 1,033,523 | | 6,917,185 | | 1,031,523 | |
Florida Municipal 2020 | | 4,971,697 | | 104,771 | | 4,971,200 | | 105,268 | | 4,970,697 | | 105,771 | |
New York Insured 2008 | | 8,964,413 | | 1,474,010 | | 8,964,048 | | 1,474,375 | | 8,962,513 | | 1,475,910 | |
New York Municipal 2018 | | 3,399,564 | | 96,615 | | 3,399,564 | | 96,615 | | 3,399,564 | | 96,615 | |
Pennsylvania Strategic | | 1,886,251 | | 2,617 | | 1,885,651 | | 3,217 | | 1,885,251 | | 3,617 | |
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|
| | W. Carl Kester1 | | Robert S. Salomon, Jr. | | | | | |
| | | | | | | | | | | | | |
| | Votes For | | Votes
Withheld | | Votes For | | Votes
Withheld | | | | | |
| | | | | | | | | | | | | | |
Insured Municipal 2008 | | — | 2 | — | | 24,673,829 | | 257,345 | | | | | |
Insured Municipal | | 2,416 | | 1 | | 20,668,524 | | 1,900,732 | | | | | |
Municipal 2018 | | 2,496 | | 44 | | 15,343,008 | | 93,242 | | | | | |
Municipal 2020 | | 6,412 | | 256 | | 18,854,896 | | 475,282 | | | | | |
Strategic Municipal | | 2,031 | | 139 | | 6,402,158 | | 108,475 | | | | | |
California Insured 2008 | | — | 2 | — | | 9,608,827 | | 175,470 | | | | | |
California Municipal 2018 | | 1,241 | | — | | 5,821,452 | | 92,556 | | | | | |
Florida Insured 2008 | | — | 2 | — | | 6,915,185 | | 1,033,523 | | | | | |
Florida Municipal 2020 | | 1,931 | | — | | 4,971,200 | | 105,268 | | | | | |
New York Insured 2008 | | — | 2 | — | | 8,965,292 | | 1,473,131 | | | | | |
New York Municipal 2018 | | 1,233 | | — | | 3,399,564 | | 96,615 | | | | | |
Pennsylvania Strategic | | 650 | | 16 | | 1,886,651 | | 2,217 | | | | | |
| |
1 | Voted on by holders of Auction Preferred Shares only. |
2 | Appointed by the Board of Directors. |
| | | |
| | | |
66 | ANNUAL REPORT | DECEMBER 31, 2007 | |
|
|
|
Additional Information (unaudited) (continued) |
Approved the Class II Directors/Trustees as follows:
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | Richard S. Davis | | Frank J. Fabozzi1 | | James T. Flynn | |
| | | | | | | | | | | | | |
| | Votes For | | Votes
Withheld | | Votes For | | Votes
Withheld | | Votes For | | Votes
Withheld | |
| | | | | | | | | | | | | | |
Insured Municipal 2008 | | 24,675,159 | | 256,015 | | — | 2 | — | | 24,686,458 | | 244,716 | |
Insured Municipal | | 20,670,321 | | 1,898,935 | | 2,416 | | 1 | | 20,668,921 | | 1,900,335 | |
Municipal 2018 | | 15,343,008 | | 93,242 | | 2,496 | | 44 | | 15,342,258 | | 93,992 | |
Municipal 2020 | | 18,865,354 | | 464,824 | | 6,412 | | 256 | | 18,862,820 | | 467,358 | |
Strategic Municipal | | 6,405,538 | | 105,095 | | 2,031 | | 139 | | 6,404,789 | | 105,844 | |
California Insured 2008 | | 9,611,327 | | 172,970 | | — | 2 | — | | 9,608,827 | | 175,470 | |
California Municipal 2018 | | 5,821,452 | | 92,556 | | 1,241 | | — | | 5,821,452 | | 92,556 | |
Florida Insured 2008 | | 6,917,185 | | 1,031,523 | | — | 2 | — | | 6,915,185 | | 1,033,523 | |
Florida Municipal 2020 | | 4,971,697 | | 104,771 | | 1,931 | | — | | 4,971,200 | | 105,268 | |
New York Insured 2008 | | 8,960,899 | | 1,477,524 | | — | 2 | — | | 8,963,548 | | 1,474,875 | |
New York Municipal 2018 | | 3,399,564 | | 96,615 | | 1,233 | | — | | 3,399,564 | | 96,615 | |
Pennsylvania Strategic | | 1,886,651 | | 2,217 | | 650 | | 16 | | 1,886,651 | | 2,217 | |
| | | | | | | | | | | | | | |
|
| | Karen P. Robards | | | | | | | | | |
| | | | | | | | | | | | | |
| | Votes For | | Votes
Withheld | | | | | | | | | |
| | | | | | | | | | | | | | |
Insured Municipal 2008 | | 24,674,944 | | 256,230 | | | | | | | | | |
Insured Municipal | | 20,668,071 | | 1,901,185 | | | | | | | | | |
Municipal 2018 | | 15,337,708 | | 98,542 | | | | | | | | | |
Municipal 2020 | | 18,856,373 | | 473,805 | | | | | | | | | |
Strategic Municipal | | 6,407,493 | | 103,140 | | | | | | | | | |
California Insured 2008 | | 9,611,327 | | 172,970 | | | | | | | | | |
California Municipal 2018 | | 5,819,727 | | 94,281 | | | | | | | | | |
Florida Insured 2008 | | 6,917,185 | | 1,031,523 | | | | | | | | | |
Florida Municipal 2020 | | 4,971,200 | | 105,268 | | | | | | | | | |
New York Insured 2008 | | 8,966,413 | | 1,472,010 | | | | | | | | | |
New York Municipal 2018 | | 3,399,564 | | 96,615 | | | | | | | | | |
Pennsylvania Strategic | | 1,886,651 | | 2,217 | | | | | | | | | |
Approved the Class III Directors/Trustees as follows:
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
|
| | Richard E. Cavanagh | | Kathleen F. Feldstein | | Henry Gabbay | |
| | | | | | | | | | | | | |
| | Votes For | | Votes
Withheld | | Votes For | | Votes
Withheld | | Votes For | | Votes
Withheld | |
| | | | | | | | | | | | | | |
Insured Municipal 2008 | | 24,676,884 | | 254,290 | | 24,674,940 | | 256,234 | | 24,673,944 | | 257,230 | |
Insured Municipal | | 20,674,369 | | 1,894,887 | | 20,674,287 | | 1,894,969 | | 22,241,429 | | 327,827 | |
Municipal 2018 | | 15,341,233 | | 95,017 | | 15,336,283 | | 99,967 | | 15,337,808 | | 98,442 | |
Municipal 2020 | | 18,864,054 | | 466,124 | | 18,857,544 | | 472,634 | | 18,858,254 | | 471,924 | |
Strategic Municipal | | 6,402,158 | | 108,475 | | 6,406,893 | | 103,740 | | 6,405,538 | | 105,095 | |
California Insured 2008 | | 9,611,327 | | 172,970 | | 9,608,827 | | 175,470 | | 9,608,427 | | 175,870 | |
California Municipal 2018 | | 5,821,452 | | 92,556 | | 5,819,727 | | 94,281 | | 5,819,727 | | 94,281 | |
Florida Insured 2008 | | 6,917,185 | | 1,031,523 | | 6,915,185 | | 1,033,523 | | 7,577,755 | | 370,953 | |
Florida Municipal 2020 | | 4,971,200 | | 105,268 | | 4,971,697 | | 104,771 | | 4,973,397 | | 103,071 | |
New York Insured 2008 | | 8,967,863 | | 1,470,560 | | 8,962,807 | | 1,475,616 | | 10,010,342 | | 428,081 | |
New York Municipal 2018 | | 3,399,564 | | 96,615 | | 3,399,564 | | 96,615 | | 3,399,564 | | 96,615 | |
Pennsylvania Strategic | | 1,886,651 | | 2,217 | | 1,886,251 | | 2,617 | | 1,886,651 | | 2,217 | |
| |
1 | Voted on by holders of Auction Preferred Shares only. |
2 | Appointed by the Board of Directors. |
| | | |
| | | |
| ANNUAL REPORT | DECEMBER 31, 2007 | 67 |
|
|
|
Additional Information (unaudited) (concluded) |
| | | | | | | |
| | | | | | |
| | Jerrold B. Harris | |
| | | | | |
| | Votes For | | Votes
Withheld | |
| | | | | | |
Insured Municipal 2008 | | 24,677,019 | | | 254,155 | | |
Insured Municipal | | 20,667,764 | | | 1,901,492 | | |
Municipal 2018 | | 15,342,608 | | | 93,642 | | |
Municipal 2020 | | 18,859,254 | | | 470,924 | | |
Strategic Municipal | | 6,404,938 | | | 105,695 | | |
California Insured 2008 | | 9,611,327 | | | 172,970 | | |
California Municipal 2018 | | 5,821,452 | | | 92,556 | | |
Florida Insured 2008 | | 6,917,185 | | | 1,031,523 | | |
Florida Municipal 2020 | | 4,971,200 | | | 105,268 | | |
New York Insured 2008 | | 8,963,548 | | | 1,474,875 | | |
New York Municipal 2018 | | 3,399,564 | | | 96,615 | | |
Pennsylvania Strategic | | 1,886,251 | | | 2,617 | | |
Each Trust listed below had an additional proposal (Proposal #2) to amend its respective Declaration of Trust to increase the maximum number of Board Members to 15:
| | | | | | | | | | |
| | | | | | | | | | | |
| | Votes For | | Votes
Against | | Votes
Abstain | |
| | | | | | | | | | | |
Municipal 2018 | | 14,763,786 | | | 332,228 | | | 340,236 | | |
Municipal 2020 | | 18,294,457 | | | 248,678 | | | 787,043 | | |
Strategic Municipal | | 6,318,530 | | | 105,566 | | | 86,537 | | |
California Municipal 2018 | | 5,858,901 | | | 51,198 | | | 3,909 | | |
Florida Insured 2008 | | 6,981,548 | | | 932,868 | | | 34,292 | | |
Florida Municipal 2020 | | 4,947,843 | | | 25,641 | | | 102,984 | | |
New York Municipal 2018 | | 3,345,354 | | | 149,175 | | | 1,650 | | |
Pennsylvania Strategic | | 1,874,026 | | | 2,517 | | | 12,325 | | |
Each Trust listed for trading on the New York Stock Exchange (“NYSE”) has filed with the NYSE its annual chief executive officer certification regarding compliance with the NYSE’s listing standards and each Trust listed for trading on the American Stock Exchange (“AMEX”) has filed with the AMEX its corporate governance certification regarding compliance with the AMEX’s listing standards. All of the Trusts have filed with the Securities and Exchange Commission the certification of its chief executive officer and chief financial officer required by section 302 of the Sarbanes-Oxley Act.
The Trusts do not make available copies of their respective 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 such Trust’s offering and the information contained in each Trust’s Statement of Additional Information may have become outdated.
During the period, there were no material changes in any Trust’s investment objectives or policies or to any Trust’s charters or by-laws that were not approved by the shareholders or in the principal risk factors associated with investment in the Trusts.
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.
| | | |
| | | |
68 | ANNUAL REPORT | DECEMBER 31, 2007 | |
|
|
|
Section 19 Notices (unaudited) |
These amounts are sources of distributions reported are only estimates and are not being provided for tax reporting purposes. The actual amounts and source for tax reporting purposes will depend upon the Trust’s investment expirence during the remainder of its fiscal year end and may be subject to changes based on the tax regulations. The Trust will send you a Form 1099-DIV for the calendar year that will tell you how to report these distributions for federal income tax purposes.
| | | | | | |
| | | | | | | |
Trust | | Net Realized
Capital Gains | |
| | | | | | | |
Insured Municipal 2008 | | | $ | 0.020091 | | |
Insured Municipal | | | | 0.009172 | | |
Florida Municipal 2020 | | | | 0.037186 | | |
| | | |
| | | |
| ANNUAL REPORT | DECEMBER 31, 2007 | 69 |
|
|
|
Officers and Directors (unaudited) |
| | | | | | | | | | |
Name, Address and
Year of Birth | | Position(s) Held
with Fund | | Length of
Time Served | | Principal Occupation(s)
During Past Five Years | | Number of
BlackRock-
Advised Funds
and Portfolios
Overseen | | Public Directorships |
| | | | | | | | | | | |
Non-Interested Directors1 |
| |
G. Nicholas Beckwith, III
40 East 52nd Street
New York, NY 10022
1945 | | Director | | 2007 to present | | Chairman and Chief Executive Officer, Arch Street Management, LLC since 2005; Chairman and CEO, Beckwith Blawnox Property LLC since 2005; Chairman and CEO, Beckwith Clearfield Property LLC since 2005; Chairman and CEO, Beckwith Delmont Property LLC since 2005; Chairman and CEO, Beckwith Erie Property LLC since 2005; Chairman, Penn West Industrial Trucks LLC since 2005; Chairman, President and Chief Executive Officer, Beckwith Machinery Company from 1969 to 2005; Chairman of the Board of Directors, University of Pittsburgh Medical Center since 2002; Board of Directors, Shady Side Hospital Foundation since 1977; Beckwith Institute for Innovation In Patient Care since 1991; Member, Advisory Council on Biology and Medicine, Brown University since 2002; Trustee, Claude Worthington Benedum Foundation since 1977; Board of Trustees, Chatham College, University of Pittsburgh since 2003; Emeritus Trustee, Shady Side Academy since 1977. | | 111 Funds
108 Portfolios | | None |
| |
Richard E. Cavanagh
40 East 52nd Street
New York, NY 10022
1946 | | Director
and Chairman of the
Board of Directors | | 1994 to present | | Trustee, Aircraft Finance Trust (AFT) since 1999; Director, The Guardian Life Insurance Company of America since 1998; Chairman and Trustee, Educational Testing Service (ETS) since 1997; Director, the Fremont Group since 1996; President and Chief Executive Officer of The Conferences Board, Inc. (global business research) from 1995 to 2007. | | 112 Funds
109 Portfolios | | Arch Chemical (chemicals and allied Products) |
| | | | | | | | | | | |
Kent Dixon
40 East 52nd Street
New York, NY 10022
1937 | | Director
and Member of the
Audit Committee | | 1988 to present | | Consultant/Investor since 1988. | | 112 Funds
109 Portfolios | | None |
| | | | | | | | | | | |
Frank J. Fabozzi
40 East 52nd Street
New York, NY 10022
1948 | | Director
and Member of the
Audit Committee | | 1988 to present | | Consultant/Editor of The Journal of Portfolio Management; Yale University, School of Management, Professor in the Practice of Finance and Becton Fellow since 2006; Adjunct Professor of Finance and Becton Fellow from 2005 to 2006; Professor in the practice of Finance from 2003 to 2005; Adjunct Professor of Finance from 1994 to 2003; Author and Editor. | | 112 Funds
109 Portfolios | | None |
| | | | | | | | | | | |
Kathleen F. Feldstein
40 East 52nd Street
New York, NY 10022
1941 | | Director | | 2005 to present | | President of Economic Studies, Inc. (a Belmont MA-based private economic consulting firm) since 1987; Chair, Board of Trustees, McLean Hospital since 2000. Member of the Board of Partners Community Healthcare, Inc. since 2005; Member of the Board of Partners HealthCare and Sherrill House since 1990; Trustee, Museum of Fine Arts, Boston since 1992 and a Member of the Visiting Committee to the Harvard University Art Museum since 2003; Trustee, The Committee for Economic Development (research organization of business leaders and educators) since 1990; Member of the Advisory Board to the International School of Business, Brandeis University since 2002. | | 112 Funds
109 Portfolios | | The McClatchy Company |
| | | | | | | | | | | |
| |
1 | Directors serve until their resignation, removal or death, or until December 31 of the year in which they turn 72. |
| | | |
| | | |
70 | ANNUAL REPORT | DECEMBER 31, 2007 | |
|
|
|
Officers and Directors (unaudited) (continued) |
| | | | | | | | | | |
Name, Address and
Year of Birth | | Position(s) Held
with Fund | | Length of
Time Served | | Principal Occupation(s)
During Past Five Years | | Number of
BlackRock-
Advised Funds
and Portfolios
Overseen | | Public Directorships |
| | | | | | | | | | | |
Non-Interested Directors1 |
| |
James T. Flynn
40 East 52nd Street
New York, NY 10022
1939 | | Director
and Member of the
Audit Committee | | 2007 to present | | Chief Financial Officer of JP Morgan & Co., Inc. from 1990 to 1995 and an employee of JP Morgan in various capacities from 1967 to 1995. | | 111 Funds
108 Portfolios | | None |
| | | | | | | | | | | |
Jerrold B. Harris
40 East 52nd Street
New York, NY 10022
1942 | | Director | | 2007 to present | | President and Chief Executive Officer, VWR Scientific Products Corporation from 1989 to 1999; Trustee, Ursinus College (education) since 2000; Director, Troemner LLC (scientific equipment) since 2000. | | 111 Funds
108 Portfolios | | BlackRock Kelso Capital
Corp. |
| | | | | | | | | | | |
R. Glenn Hubbard
40 East 52nd Street
New York, NY 10022
1958 | | Director | | 2004 to present | | Dean of Columbia Business School since 2004; Columbia faculty member since 1988; Co-director of Columbia Business School’s Entrepreneurship Program 1997 to 2004; Visiting Professor at the John F. Kennedy School of Government at Harvard University and the Harvard Business School since 1985, as well as the University of Chicago since 1994; Deputy Assistant Secretary of the U.S. Treasury Department for Tax Policy from 1991 to 1993; Chairman of the U.S. Council of Economic Advisers under the President of the United States from 2001 to 2003. | | 112 Funds
109 Portfolios | | ADP (data and information services), KKR Financial Corporation, Duke Realty, Metropolitan Life Insurance Company. |
| | | | | | | | | | | |
W. Carl Kester
40 East 52nd Street
New York, NY 10022
1951 | | Director
and Member of the
Audit Committee | | 2007 to present | | Deputy Dean for Academic Affairs, Harvard Business School since 2006; Mizuho Financial Group, Professor of Finance, Harvard Business School; Unit Head, Finance 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. | | 111 Funds
108 Portfolios | | None |
| | | | | | | | | | | |
Karen P. Robards
40 East 52nd Street
New York, NY 10022
1950 | | Director and
Chairperson of the
Audit Committee | | 2007 to present | | Partner of Robards & Company, LLC (financial advisory firm) since 1987; Formerly an investment banker with Morgan Stanley for more than ten years; Director of Enable Medical Corp. from 1996 to 2005; Director of AtriCure, Inc. (medical devices) since 2000; Director of Care Investment Trust, Inc. (healthcare REIT) since 2007; Co-founder and Director of the Cooke Center for Learning and Development (not-for-profit organization) since 1987. | | 111 Funds
108 Portfolios | | AtriCure Inc. (medical devices) Care Investment Trust, Inc. (healthcare REIT) |
| | | | | | | | | | | |
Robert S. Salomon, Jr.
40 East 52nd Street
New York, NY 10022
1936 | | Director
and Member of the
Audit Committee | | 2007 to present | | Principal of STI Management (investment adviser) from 1994 to 2005; Chairman and CEO of Salomon Brothers Asset Management Inc. from 1992 to 1995; Chairman of Salomon Brothers Equity Mutual Funds from 1992 to 1995; regular columnist with Forbes Magazine from 1992 to 2002; Director of Stock Research and U.S. Equity Strategist at Salomon Brothers Inc. from 1975 to 1991; Trustee, Commonfund from 1980 to 2001. | | 111 Funds
108 Portfolios | | None |
| | | | | | | | | | | |
Interested Directors2 |
| | | | | | | | | | | |
Richard S. Davis
40 East 52nd Street
New York, NY 10022
1945 | | Director | | 2007 to present | | 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 (“SSR Funds”) from 2000 to 2005; Senior Vice President, Metropolitan Life Insurance Company from 1999 to 2000; Chairman SSR Realty from 2000 to 2004. | | 184 Funds
289 Portfolios | | None |
| | | | | | | | | | | |
| |
1 | Directors serve until their resignation, removal or death, or until December 31 of the year in which they turn 72. |
2 | Messrs. Davis and Gabbay are both “interested persons,” as defined in the Investment Company Act of 1940, of the Fund based on their positions with BlackRock, Inc. and its affiliates. Directors serve until their resignation, removal or death, or until December 31 of the year in which they turn 72. |
| | | |
| | | |
| ANNUAL REPORT | DECEMBER 31, 2007 | 71 |
|
|
|
Officers and Directors (unaudited) (continued) |
| | | | | | | | | | |
Name, Address and
Year of Birth | | Position(s) Held
with Fund | | Length of
Time Served | | Principal Occupation(s)
During Past Five Years | | Number of
BlackRock-
Advised Funds
and Portfolios
Overseen | | Public Directorships |
| | | | | | | | | | | |
Interested Directors2 |
| | | | | | | | | | | |
Henry Gabbay
40 East 52nd Street
New York, NY 10022
1947 | | Director | | 2007 to present | | Consultant, BlackRock since 2007; 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 Fund complex from 1989 to 2006. | | 183 Funds
288 Portfolios | | None |
| | | | | | | | | | | |
Advisory Board Member: |
| | | | | | | | | | | |
Roscoe S. Suddarth3
40 East 52nd Street
New York, NY 10022
1935 | | Member of the
Advisory Board | | 2007 | | President, Middle East Institute from 1995 to 2001; Foreign Service Officer, United States Foreign Service from 1961 to 1995 and Career Minister from 1989 to 1995; Deputy Inspector General, U.S. Department of State from 1991 to 1994; U.S. Ambassador to the Hashemite Kingdom of Jordan from 1987 to 1990. | | 111 Funds
108 Portfolios | | None |
| | | | | | | | | | | |
| | | | | | | | | | |
Name, Address and
Year of Birth | | Position(s) Held
with Fund | | Length of
Time Served | | Principal Occupation(s)
During Past Five Years | | | | |
| | | | | | | | | | | ] |
Fund Officers 4 | | | | | | | | | | |
| | | | | | | | | | | |
Donald C. Burke
40 East 52nd Street
New York, NY 10022
1960 | | Fund President and
Chief Executive
Officer | | 2007 to present | | Managing Director of BlackRock, Inc. since 2006; Formerly Managing Director of Merrill Lynch Investment (“MLIM”) and Fund Asset Management, L.P. (“FAM”) in 2006; First Vice President thereof from 1997 to 2005; Treasurer thereof from 1999 to 2006 and Vice President thereof from 1990 to 1997. |
| | | | | | | | | | | |
Anne F. Ackerley
40 East 52nd Street
New York, NY 10022
1962 | | Vice President | | 2007 to present | | Managing Director of BlackRock, Inc. since 2000 and First Vice President and Chief Operating Officer of Mergers and Acquisitions Group from 1997 to 2000; First Vice President and Chief Operating Officer of Public Finance Group thereof from 1995 to 1997; Formerly First Vice President of Emerging Markets Fixed Income Research of Merrill Lynch & Co., Inc. from 1994 to 1995. |
| | | | | | | | | | | |
Neal J. Andrews
40 East 52nd Street
New York, NY 10022
1966 | | Chief Financial
Officer | | 2007 to present | | Managing Director of BlackRock, Inc., since 2006; Formerly Senior Vice President and Line of Business Head of Fund Accounting and Administration at PFPC Inc. from 1992 to 2006. |
| | | | | | | | | | | |
Jay M. Fife
40 East 52nd Street
New York, NY 10022
1970 | | Treasurer | | 2007 to present | | Managing Director of BlackRock, Inc. since 2007 and Director in 2006; Formerly Assistant Treasurer of the MLIM/FAM advised funds from 2005 to 2006; Director of MLIM Fund Services Group from 2001 to 2006. |
| | | | | | | | | | | |
Brian P. Kindelan
40 East 52nd Street
New York, NY 10022
1959 | | Chief Compliance
Officer | | 2007 to present | | Chief Compliance Officer of the Funds since 2007; Managing Director and Senior Counsel thereof since January 2005; Director and Senior Counsel of BlackRock Advisors, Inc. from 2001 to 2004 and Vice President and Senior Counsel, thereof, from 1998 to 2000; Senior Counsel of PNC Bank Corp. from 1995 to 1998. |
| | | | | | | | | | | |
Howard Surloff
40 East 52nd Street
New York, NY 10022
1965 | | Secretary | | 2007 to present | | Managing Director of BlackRock, Inc. and General Counsel of U.S. Funds at BlackRock, Inc. since 2006; Formerly General Counsel (U.S.) of Goldman Sachs Asset Management, L.P. from 1993 to 2006. |
| | | | | | | |
| |
2 | Messrs. Davis and Gabbay are both “interested persons,” as defined in the Investment Company Act of 1940, of the Fund based on their positions with BlackRock, Inc. and its affiliates. Directors serve until their resignation, removal or death, or until December 31 of the year in which they turn 72. |
3 | Roscoe Suddarth resigned from the Advisory Board of the Fund, effective December 31, 2007. |
4 | Officers of the Fund serve at the pleasure of the Board of Directors. |
| | | |
| | | |
72 | ANNUAL REPORT | DECEMBER 31, 2007 | |
|
|
|
BlackRock Closed-End Funds |
|
Investment Advisor |
BlackRock Advisors, LLC |
Wilmington, DE 19809 |
(800) 227-7BFM |
|
Sub-Advisor |
BlackRock Financial Management, Inc. |
New York, NY 10022 |
|
Accounting Agent and Custodian |
State Street Bank and Trust Company |
Boston, MA 02111 |
|
Transfer Agent |
Computershare Trust Company, N.A. |
Canton, MA 02021 |
(800) 699-1BFM |
|
Auction Agent1 |
Bank of New York Mellon |
New York, NY 10286 |
|
Auction Agent2 |
Deutsche Bank Trust Company Americas |
New York, NY 10286 |
|
Independent Registered Public Accounting Firm |
Deloitte & Touche LLP |
Boston, MA 02116 |
|
Legal Counsel |
Skadden, Arps, Slate, Meagher & Flom LLP |
New York, NY 10036 |
|
Legal Counsel – Independent Trustees |
Debevoise & Plimpton LLP |
New York, NY 10022 |
| |
| |
1 | For the 2018 Trusts and 2020 Trusts. |
2 | For the Trusts, except the 2018 Trusts and 2020 Trusts. |
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.
BlackRock Closed-End Funds
c/o BlackRock Advisors, LLC
100 Bellevue Parkway
Wilmington, DE 19809
(800) 227-7BFM
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 contact the Trusts at (800)699-1BFM.
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 toll-free 1-(800)-699-1BFM; (2) at www.blackrock.com; and (3) on the Securities and Exchange Commission’s Web site at http://www.sec.gov.
Information about how the Trusts vote proxies relating to securities held in the Trusts’ portfolios during the most recent 12-month period ended June 30 is available (1) at www.blackrock.com and (2) on the Securities and Exchange Commission’s website at http://www.sec.gov.
The Trusts file their complete schedules 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 Web site at http://www.sec.gov. The Trusts’ Forms N-Q 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 1-800-SEC-0330. The Trusts Form N-Q, may also be obtained upon request and without charge by calling 1-(800)-699-1BFM.
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| ANNUAL REPORT | DECEMBER 31, 2007 | |
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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. | |
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CEF-ANN-4-1207 | 
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| 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. |
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| 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
Frank J. Fabozzi
Robert S. Salomon, Jr. (term began effective November 1, 2007)
W. Carl Kester (term began effective November 1, 2007)
James T. Flynn (term began effective November 1, 2007)
Karen P. Robards (term began effective November 1, 2007) 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. |
Item 4 – Principal Accountant Fees and Services
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| | (a) Audit Fees | (b) Audit-Related Fees1 | (c) Tax Fees2 | (d) All Other Fees3 |
| | Current | Previous | Current | Previous | Current | Previous | Current | Previous |
| | Fiscal Year | Fiscal Year | Fiscal Year | Fiscal Year | Fiscal Year | Fiscal Year | Fiscal Year | Fiscal Year |
| Entity Name | End | End | End | End | End | End | End | End |
| |
| BlackRock New | | | | | | | | |
| York Municipal | $26,500 | $26,500 | $1,975 | $1,975 | $6,100 | $8,000 | $1,042 | $400 |
| 2018 Term Trust | | | | | | | | |
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 has polices and procedures (the “Policy”) for the pre-approval by the registrant’s audit committee of Audit, Audit-Related, Tax and Other Services (as each is defined in the Policy) provided by the Fund’s independent auditor (the “Independent Auditor”) to the registrant and other “Covered Entities” (as defined below). The term of any such pre-approval is 12 months from the date of pre-approval, unless the audit committee specifically provides for a different period. The amount of any such pre-approval is set forth in the appendices to the Policy (the “Service Pre-Approval Documents”). At its first meeting of each calendar year, the audit committee will review and re-approve the Policy and approve or re-approve the Service Pre-Approval Documents for that year, together with any changes deemed necessary or desirable by the audit committee. The audit committee may, from time to time, modify the nature of the services pre-approved, the aggregate level of fees pre-approved or both. For the purposes of the Policy, “Covered Services” means (A) all engagements for audit and non-audit services to be provided by the Independent Auditor to the Fund and (B) all engagements for non-audit services related directly to the operations and financial reporting or the Fund to be provided by the Independent Auditor to any Covered Entity, “Covered Entities” means (1) the Advisor or (2) any entity controlling, controlled by or under common control with the Advisor that provides ongoing services to the Fund. In the intervals between the scheduled meetings of the audit committee, the audit committee delegates pre-approval authority under this Policy to the Chairman of the audit committee (the “Chairman”). The Chairman shall report any pre-approval decisions under this Policy to the audit committee at its next scheduled meeting. At each scheduled meeting, the audit committee will review with the Independent Auditor the Covered Services pre-approved by the Chairman pursuant to delegated authority, if any, and the fees related thereto. Based on these reviews, the audit committee can modify, at its discretion, the pre-approval originally granted by the Chairman pursuant to delegated authority. This modification can be to the nature of services pre-approved, the aggregate level of fees approved, or both. Pre-approval of Covered Services by the Chairman pursuant to delegated authority is expected to be the exception rather than the rule and the audit committee may modify or withdraw this delegated authority at any time the audit committee determines that it is appropriate to do so. Fee levels for all Covered Services to be provided by the Independent Auditor and pre-approved under this Policy will be established annually by the audit committee and set forth in the Service Pre-Approval Documents. Any increase in pre-approved fee levels will require specific pre-approval by the audit committee (or the Chairman pursuant to delegated authority). |
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| | The terms and fees of the annual Audit services engagement for the Fund are subject to the specific pre-approval of the audit committee. The audit committee (or the Chairman pursuant to delegated authority) will approve, if necessary, any changes in terms, conditions or fees resulting from changes in audit scope, Fund structure or other matters. In addition to the annual Audit services engagement specifically approved by the audit committee, any other Audit services for the Fund not listed in the Service Pre-Approval Document for the respective period must be specifically pre-approved by the audit committee (or the Chairman pursuant to delegated authority). Audit-Related services are assurance and related services that are not required for the audit, but are reasonably related to the performance of the audit or review of the financial statements of the registrant and, to the extent they are Covered Services, the other Covered Entities (as defined in the Joint Audit Committee Charter) or that are traditionally performed by the Independent Auditor. Audit-Related services that are Covered Services and are not listed in the Service Pre-Approval Document for the respective period must be specifically pre-approved by the audit committee (or the Chairman pursuant to delegated authority). The audit committee believes that the Independent Auditor can provide Tax services to the Covered Entities such as tax compliance, tax planning and tax advice without impairing the auditor’s independence. However, the audit committee will not permit the retention of the Independent Auditor in connection with a transaction initially recommended by the Independent Auditor, the sole business purpose of which may be tax avoidance and the tax treatment of which may not be supported in the Internal Revenue Code and related regulations. Tax services that are Covered Services and are not listed in the Service Pre-Approval Document for the respective period must be specifically pre-approved by the audit committee (or the Chairman pursuant to delegated authority). All Other services that are covered and are not listed in the Service Pre-Approval Document for the respective period must be specifically pre-approved by the audit committee (or the Chairman pursuant to delegated authority). Requests or applications to provide Covered Services that require approval by the audit committee (or the Chairman pursuant to delegated authority) must be submitted to the audit committee or the Chairman, as the case may be, by both the Independent Auditor and the Chief Financial Officer of the respective Covered Entity, and must include a joint statement as to whether, in their view, (a) the request or application is consistent with the rules of the Securities and Exchange Commission (“SEC”) on auditor independence and (b) the requested service is or is not a non-audit service prohibited by the SEC. A request or application submitted to the Chairman between scheduled meetings of the audit committee should include a discussion as to why approval is being sought prior to the next regularly scheduled meeting of the audit committee. (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: |
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| | Current Fiscal Year | Previous Fiscal Year |
| Entity Name | End | End |
| |
| BlackRock New York | | |
| Municipal 2018 Term Trust | $293,617 | $296,575 |
| | (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) – $284,500, 0% |
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| Item 5 – | Audit Committee of Listed Registrants – 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 Exchange Act (15 U.S.C. 78c(a)(58)(A)): Richard E. Cavanagh (not reappointed to audit committee as of November 1, 2007)
Kent Dixon
Frank J. Fabozzi
Robert S. Salomon, Jr. (term began effective November 1, 2007)
W. Carl Kester (term began effective November 1, 2007)
James T. Flynn (term began effective November 1, 2007)
Karen P. Robards (term began effective November 1, 2007) |
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| Item 6 – | Schedule of Investments – The registrant’s Schedule of Investments is included as part of the Report to Stockholders filed under Item 1 of this form. |
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| Item 7 – | Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies – The registrant has delegated the voting of proxies relating to Fund portfolio securities to its investment adviser, BlackRock Advisors, LLC and its sub-adviser, as applicable. The Proxy Voting Policies and Procedures of the adviser and sub-adviser are attached hereto as Exhibit 99.PROXYPOL. Information about how the Fund voted proxies relating to securities held in the Fund’s portfolio during the most recent 12 month period ended June 30 is available without charge (1) at www.blackrock.com and (2) on the Commission’s web site at http://www.sec.gov. |
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| Item 8 – | Portfolio Managers of Closed-End Management Investment Companies – as of December 31, 2007. (a)(1) BlackRock New York Municipal 2018 Term Trust is managed by a team of investment professionals comprised of Theodore R. Jaeckel, Jr., CFA, Managing Director at BlackRock, Walter O’Connor, Managing Director at BlackRock and F. Howard Downs, Director at BlackRock. Each is a member of BlackRock’s municipal tax-exempt management group. Messrs. Jaeckel and O’Connor are responsible for setting the Fund’s overall investment strategy and overseeing the management of the Fund. Mr. Downs is the Fund’s lead portfolio manager and is responsible for the day-to-day management of the Fund’s portfolio and the selection of its investments. Messrs. Jaeckel and O’Connor have been members of the Fund’s management team since 2006 and Mr. Downs has been the Fund’s portfolio manager since 2007. |
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| | Mr. Jaeckel joined BlackRock in 2006. Prior to joining BlackRock, he was a Managing Director (Municipal Tax-Exempt Fund Management) of Merrill Lynch Investment Managers, L.P. (“MLIM”) from 2005 to 2006 and a Director of MLIM from 1997 to 2005. He has been a portfolio manager with BlackRock or MLIM since 1991. Mr. O’Connor joined BlackRock in 2006. Prior to joining BlackRock, he was a Managing Director (Municipal Tax-Exempt Fund Management) of MLIM from 2003 to 2006 and was a Director of MLIM from 1997 to 2002. He has been a portfolio manager with BlackRock or MLIM since 1991. Mr. Downs joined BlackRock in 1999 and is a member of the BlackRock Specialized Asset Management Group, specializing in municipal bonds. Prior to joining BlackRock, he was a Vice President and, in 1990, a founding member of William E. Simon and Sons, Municipal Securities. (a)(2) As of December 31, 2007: |
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| | | | | (iii) Number of Other Accounts and |
| | (ii) Number of Other Accounts Managed | Assets for Which Advisory Fee is |
| | and Assets by Account Type | Performance-Based |
| | Other | | | Other | | |
| (i) Name of | Registered | Other Pooled | | Registered | Other Pooled | |
| Portfolio | Investment | Investment | Other | Investment | Investment | Other |
| Manager | Companies | Vehicles | Accounts | Companies | Vehicles | Accounts |
| |
| F. Howard | | | | | | |
| Downs | 9 | 3 | 30 | 0 | 0 | 0 |
| | $2,342,693,477 | $63,762,272 | $974,587,658 | $0 | $0 | $0 |
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| Walter | | | | | | |
| O’Connor | 80 | 0 | 0 | 0 | 0 | 0 |
| | $28,622,893,405 | $0 | $0 | $0 | $0 | $0 |
| |
| Theodore R. | | | | | | |
| Jaeckel, Jr. | 80 | 1 | 0 | 0 | 1 | 0 |
| | $28,622,893,405 | $23,370,230 | $0 | $0 | $23,370,230 | $0 |
| | (iv) Potential Material Conflicts of Interest BlackRock, Inc. and its affiliates (collectively, herein “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 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 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 |
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| | securities. Moreover, BlackRock may refrain from rendering any advice or services concerning securities of companies of which any of BlackRock’s (or its affiliates’) officers, directors or employees are directors or officers, or companies as to which BlackRock or any of its affiliates 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 the Fund. In this connection, it should be noted that certain portfolio managers, including Mr. Jaeckel, currently manage certain accounts that are subject to performance fees. In addition, certain portfolio managers 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 December 31, 2007: 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 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 and Restricted Stock Program. 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 |
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| | 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 to compare the performance of funds and other accounts managed by each portfolio manager and the period of time over which performance is evaluated. With respect to the portfolio managers, such benchmarks include a combination of market-based indices (e.g. Lehman Brothers 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 manager’s 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 the Company’s ability to sustain and improve its performance over future periods. 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: Long-Term Retention and Incentive Plan (“LTIP”) —The LTIP is a long-term incentive plan that seeks to reward certain key employees. For Mr. Downs, prior to 2006, the plan provided for the grant of awards that were expressed as an amount of cash that, if properly vested and subject to the attainment of certain performance goals, will be settled in cash and/or in BlackRock, Inc. common stock. Beginning in 2006, awards are granted under the LTIP in the form of BlackRock, Inc. restricted stock units that, if properly vested and subject to the attainment of certain performance goals, will be settled in BlackRock, Inc. common stock. Messrs. Downs, Jaeckel and O’Connor have each received awards under the LTIP. Deferred Compensation Program —A portion of the compensation paid to each portfolio manager may be voluntarily deferred by the portfolio manager into an account that tracks the performance of certain of the firm’s investment products. Each portfolio manager is permitted to allocate his deferred amounts among various options, including to certain of the firm’s hedge funds and other unregistered products. Every portfolio manager is eligible to participate in the deferred compensation program. Options and Restricted Stock Awards — Prior to mandatorily deferring a portion of a portfolio manager’s annual bonus in BlackRock, Inc. restricted stock units, the Company granted stock options to key employees, including certain portfolio managers who may still hold unexercised or unvested options. BlackRock, Inc. also granted restricted stock awards designed to |
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| | reward certain key employees as an incentive to contribute to the long-term success of BlackRock. These awards vest over a period of years. Mr. Downs has been granted stock options and/or restricted stock in prior years. 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% of eligible compensation, plus an additional contribution of 2% for any year in which BlackRock has positive net operating income. The RSP offers a range of investment options, including registered investment companies managed by the firm. Company 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 December 31, 2007, none of Messrs. Downs, Jaeckel or O’Connor beneficially owned any stock issued by the Fund. |
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| 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. |
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| Item 10 – | Submission of Matters to a Vote of Security Holders – The registrant’s Nominating and Governance Committee will consider nominees to the Board recommended by shareholders when a vacancy becomes available. Shareholders who wish to recommend a nominee should send nominations which include biographical information and set forth the qualifications of the proposed nominee to the registrant’s Secretary. There have been no material changes to these procedures. |
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| Item 11 – | Controls and Procedures |
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| 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. |
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| 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. |
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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 New York Municipal 2018 Term Trust
| By: | /s/ Donald C. Burke |
| | Donald C. Burke |
| | Chief Executive Officer of |
| | BlackRock New York Municipal 2018 Term Trust |
Date: February 21, 2008
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/ Donald C. Burke |
| | Donald C. Burke |
| | Chief Executive Officer (principal executive officer) of |
| | BlackRock New York Municipal 2018 Term Trust |
Date: February 21, 2008
| By: | /s/ Neal J. Andrews |
| | Neal J. Andrews |
| | Chief Financial Officer (principal financial officer) of |
| | BlackRock New York Municipal 2018 Term Trust |
Date: February 21, 2008
