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| | | | | | For the period
April 30, 20021
through
August 31, 2002 | |
| | Six Months Ended
February 28, 2007
(unaudited) | | Year Ended August 31, | | |
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| | | 2006 | | 2005 | | 2004 | | 2003 | | |
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PER COMMON SHARE OPERATING PERFORMANCE: | | | | | | | | | | | | | | | | | | | |
Net asset value, beginning of period | | $ | 16.35 | | $ | 16.34 | | $ | 15.47 | | $ | 14.46 | | $ | 14.90 | | $ | 14.33 | 2 |
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Investment operations: | | | | | | | | | | | | | | | | | | | |
Net investment income | | | 0.55 | | | 1.10 | | | 1.10 | | | 1.09 | | | 1.09 | | | 0.27 | |
Net realized and unrealized gain (loss) | | | 0.14 | | | 0.04 | | | 0.80 | | | 0.86 | | | (0.44 | ) | | 0.65 | |
Dividends and distributions to preferred shareholders from: | | | | | | | | | | | | | | | | | | | |
Net investment income | | | (0.13 | ) | | (0.26 | ) | | (0.16 | ) | | (0.07 | ) | | (0.08 | ) | | (0.03 | ) |
Net realized gains | | | (0.02 | ) | | — | | | — | | | — | | | (0.02 | ) | | — | |
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Net increase from investment operations | | | 0.54 | | | 0.88 | | | 1.74 | | | 1.88 | | | 0.55 | | | 0.89 | |
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Dividends and distributions to common shareholders from: | | | | | | | | | | | | | | | | | | | |
Net investment income | | | (0.43 | ) | | (0.87 | ) | | (0.87 | ) | | (0.87 | ) | | (0.85 | ) | | (0.21 | ) |
Net realized gains | | | (0.05 | ) | | — | | | — | | | — | | | (0.10 | ) | | — | |
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Total dividends and distributions | | | (0.48 | ) | | (0.87 | ) | | (0.87 | ) | | (0.87 | ) | | (0.95 | ) | | (0.21 | ) |
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Capital charges with respect to issuance of: | | | | | | | | | | | | | | | | | | | |
Common shares | | | — | | | — | | | — | | | — | | | — | | | (0.02 | ) |
Preferred shares | | | — | | | — | | | — | | | — | | | (0.04 | ) | | (0.09 | ) |
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Total capital charges | | | — | | | — | | | — | | | — | | | (0.04 | ) | | (0.11 | ) |
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Net asset value, end of period | | $ | 16.41 | | $ | 16.35 | | $ | 16.34 | | $ | 15.47 | | $ | 14.46 | | $ | 14.90 | |
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Market price, end of period | | $ | 19.26 | | $ | 18.45 | | $ | 17.30 | | $ | 15.34 | | $ | 14.40 | | $ | 15.20 | |
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TOTAL INVESTMENT RETURNS:3 | | | | | | | | | | | | | | | | | | | |
At net asset value4 | | | 3.05 | % | | 5.30 | % | | 11.52 | % | | 13.28 | % | | 3.41 | % | | 5.53 | % |
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At market price | | | 7.18 | % | | 12.23 | % | | 19.07 | % | | 12.79 | % | | 0.94 | % | | 2.81 | % |
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RATIOS TO AVERAGE NET ASSETS OF COMMON SHAREHOLDERS:5 | | | | | | | | | | | | | | | | | | | |
Expenses after fees waived and paid indirectly | | | 1.04 | %6 | | 1.15 | % | | 1.18 | % | | 1.25 | % | | 1.17 | % | | 1.12 | %6 |
Expenses after fees waived and before fees paid indirectly | | | 1.13 | %6 | | 1.22 | % | | 1.20 | % | | 1.26 | % | | 1.17 | % | | 1.12 | %6 |
Expenses before fees waived and paid indirectly | | | 1.59 | %6 | | 1.68 | % | | 1.67 | % | | 1.73 | % | | 1.64 | % | | 1.54 | %6 |
Net investment income after fees waived and paid indirectly and before preferred share dividends | | | 6.83 | %6 | | 6.83 | % | | 6.90 | % | | 7.15 | % | | 7.23 | % | | 5.70 | %6 |
Preferred share dividends | | | 1.58 | %6 | | 1.60 | % | | 1.00 | % | | 0.47 | % | | 0.53 | % | | 0.54 | %6 |
Net investment income available to common shareholders | | | 5.25 | %6 | | 5.23 | % | | 5.90 | % | | 6.68 | % | | 6.70 | % | | 5.16 | %6 |
SUPPLEMENTAL DATA: | | | | | | | | | | | | | | | | | | | |
Average net assets of common shareholders (000) | | $ | 25,241 | | $ | 24,769 | | $ | 24,303 | | $ | 23,273 | | $ | 22,896 | | $ | 21,321 | |
Portfolio turnover | | | 7 | % | | 5 | % | | 5 | % | | 14 | % | | 18 | % | | 8 | % |
Net assets applicable to common shareholders, end of period (000) | | $ | 25,272 | | $ | 25,097 | | $ | 24,966 | | $ | 23,527 | | $ | 21,944 | | $ | 22,545 | |
Preferred shares value outstanding, end of period (000) | | $ | 13,525 | | $ | 13,525 | | $ | 13,525 | | $ | 13,525 | | $ | 13,525 | | $ | 13,525 | |
Asset coverage per preferred share, end of period | | $ | 71,728 | | $ | 71,404 | | $ | 71,158 | | $ | 68,490 | | $ | 65,562 | | $ | 66,674 | |
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 shares.
See Notes to Financial Statements.
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NOTES TO FINANCIAL STATEMENTS (Unaudited) |
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Note 1. Organization & Accounting Policies
BlackRock Insured Municipal Income Trust (“Insured Municipal”), BlackRock California Insured Municipal Income Trust (“California Insured”), BlackRock Florida Insured Municipal Income Trust (“Florida Insured”), BlackRock New York Insured Municipal Income Trust (“New York Insured”) (collectively the “Insured Trusts”), BlackRock Municipal Bond Trust (“Municipal Bond”), BlackRock California Municipal Bond Trust (“California Bond”), BlackRock Florida Municipal Bond Trust (“Florida Bond”), BlackRock Maryland Municipal Bond Trust (“Maryland Bond”), BlackRock New Jersey Municipal Bond Trust (“New Jersey Bond”), BlackRock New York Municipal Bond Trust (“New York Bond”), BlackRock Virginia Municipal Bond Trust (“Virginia Bond”) (collectively the “Bond Trusts”), BlackRock Municipal Income Trust II (“Municipal Income II”), BlackRock California Municipal Income Trust II (“California Income II”) and BlackRock New York Municipal Income Trust II (“New York Income II”) (collectively the “Income II Trusts”) (all, collectively the “Trusts”) are organized as Delaware statutory trusts. Insured Municipal, Municipal Bond and Municipal Income II are registered as diversified, closed-end management investment companies under the Investment Company Act of 1940, as amended (the “1940 Act”). California Insured, California Bond, California Income II, Florida Insured, Florida Bond, Maryland Bond, New Jersey Bond, New York Insured, New York Bond, New York Income II and Virginia Bond are registered as non-diversified, closed-end management investment companies under the 1940 Act.
Under the Trusts’ organizational documents, their officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trusts. In addition, in the normal course of business, the Trusts enter into contracts with their vendors and others that provide for general indemnifications. The Trusts’ maximum exposure under these arrangements are unknown as this would involve future claims that may be made against the Trusts. However, based on experience, the Trusts consider the risk of loss from such claims to be remote.
The following is a summary of significant accounting policies followed by the Trusts.
Investments Valuation: Municipal investments (including commitments to purchase such investments on a “when-issued” basis) are valued on the basis of prices provided by dealers or pricing services selected under the supervision of each Trust’s Board of Trustees (each, a “Board”). In determining the value of a particular investment, pricing services may use certain information with respect to transactions in such investments, quotations from bond dealers, market transactions in comparable investments and various relationships between investments. Swap quotations are provided by dealers selected under supervision of the Board. 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. Investments in open-end investment companies are valued at net asset value per share. Any investments or other assets for which such current market quotations are not readily available are valued at fair value (“Fair Value Assets”) as determined in good faith under procedures established by, and under the general supervision and responsibility of, each Trust’s Board. The investment advisor and/or sub-advisor will submit its recommendations regarding the valuation and/or valuation methodologies for Fair Value Assets to a valuation committee. The valuation committee may accept, modify or reject any recommendations. The pricing of all Fair Value Assets shall be subsequently reported to the Board.
When determining the price for a Fair Value Asset, the investment advisor and/or sub-advisor shall seek to determine the price that the Trust might reasonably expect to receive from the current sale of that asset in an arm’s-length transaction. Fair value determinations shall be based upon all available factors that the investment advisor and/or sub-advisor deems relevant.
In September 2006, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards No. 157, Fair Value Measurements (“FAS 157”), which is effective for fiscal years beginning after November 15, 2007. FAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. At this time, management is evaluating the implications of FAS 157 and its impact on the Trusts’ financial statements, if any, has not been determined.
In addition, in February 2007, FASB issued Statement of Financial Accounting Standard No. 159, The Fair Value Option for Financial Assets and Financial Liabilities (“FAS 159”), which is effective for fiscal years beginning after November 15, 2007. Early adoption is permitted as of the beginning of a fiscal year that begins on or before November 15, 2007, provided the entity also elects to apply the provisions of FAS 157. FAS 159 permits entities to choose to measure many financial instruments and certain other items at fair value that are not currently required to be measured at fair value. FAS 159 also establishes presentation and disclosure requirements designed to facilitate comparisons between entities that choose different measurement attributes for similar types of assets and liabilities. At this time, management is evaluating the implications of FAS 159 and its impact on the Trusts’ financial statements, if any, has not been determined.
Investment Transactions and Investment Income: Investment transactions are recorded on trade date. The cost of investments sold and the related gain or loss is determined by use of the specific identification method, generally first-in, first-out, for both financial reporting and federal income tax purposes. Each Trust also records interest income on an accrual basis and amortizes premium and/or accretes discount on securities purchased using the interest method.
Financial Futures Contracts: A futures contract is an agreement between two parties to buy and sell a financial instrument for a set price on a future date. Initial margin deposits are made upon entering into futures contracts and can be either cash or securities. During the period the futures contract is open, changes in the value of the contract are recognized as unrealized gains or losses by “marking-to-market” on a daily basis to reflect the market value of the contract at the end of each day’s trading. Variation margin payments are made or received, depending upon whether unrealized gains or losses are incurred. When the contract is closed, the Trust records a realized gain or loss equal to the difference between the proceeds from (or cost of) the closing transaction and the Trust’s basis in the contract.
Financial futures contracts, when used by the 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.
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Forward Starting Swaps: Forward starting swaps are an agreement for an interest rate swap asset or liability to be created or sold in the future. Interest rate swaps are an agreement in which one party 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, a party may pay a fixed rate and receive a floating rate. The Trusts close each forward starting swap before the accrual date specified in the agreement and therefore never enter into the interest rate swap underlying each forward starting swap.
During the term of the swap, changes in the value of the swap are recognized as unrealized gains or losses by “marking-to-market” daily based upon quotations from market makers 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.
Entering into these agreements involves, to varying degrees, elements of credit and market risk in excess of the amounts recognized on the Statements of Assets and Liabilities. Such risks involve the possibility that there will be no liquid market for these agreements, that the counter-party to the agreement may default on its obligation to perform and that there may be unfavorable changes in the fluctuation of interest and/or exchange rates. However, the Advisor of the Trusts monitor swaps and do not anticipate non-performance by any counterparty.
Segregation: In cases in which the 1940 Act, and the interpretive positions of the Securities and Exchange Commission (the “Commission”) require that each Trust segregate assets in connection with certain investments (e.g., when-issued securities, forward starting swaps or futures contracts), each Trust will, consistent with certain interpretive letters issued by the Commission, designate on its books and records cash or other liquid securities having a market value at least equal to the amount that would otherwise be required to be physically segregated.
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 net income and net realized capital gains, if any, to shareholders. Therefore, no federal income tax or excise tax provisions have been recorded.
On July 13, 2006, FASB released FASB Interpretation No. 48 (“FIN 48”), Accounting for Uncertainty in Income Taxes. FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions taken in the course of preparing the Trusts’ tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Tax benefits of positions not deemed to meet the more-likely-than-not threshold would be booked as a tax expense in the current year and recognized as: a liability for unrecognized tax benefits; a reduction of an income tax refund receivable; a reduction of deferred tax asset; an increase in deferred tax liability; or a combination thereof. Adoption of FIN 48 is required for the last net asset value calculation in the first required financial statement reporting period for fiscal years beginning after December 15, 2006. At this time, management is evaluating the implications of FIN 48 and its impact on the Trusts’ financial statements has not been determined.
Dividends and Distributions: Each Trust declares and pays dividends and distributions to common shareholders monthly from net investment income, net realized short-term capital gains and other sources, if necessary. Net long-term capital gains, if any, in excess of loss carryforwards may be distributed in accordance with the 1940 Act. Dividends and distributions are recorded on the ex-dividend date. Income distributions and capital gain distributions are determined in accordance with income tax regulations which may differ from accounting principles generally accepted in the United States of America. Dividends and distributions to preferred shareholders are accrued and determined as described in Note 5.
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 these estimates and such differences may be material.
Deferred Compensation and BlackRock Closed-End Share Equivalent Investment Plan: Under the deferred compensation plan approved by each Trust’s Board, non-interested Trustees (“Independent Trustees”) are required to defer a portion of their annual complex-wide compensation. Deferred amounts earn an approximate return as though equivalent dollar amounts had been invested in common shares of other BlackRock closed-end trusts selected by the Independent Trustees. These amounts are shown on the Statements of Assets and Liabilities as “Investments in affiliates”. This has approximately the same economic effect for the Independent Trustees as if the Independent Trustees had invested the deferred amounts directly in such Trusts.
The deferred compensation plan is not funded and obligations thereunder represent general unsecured claims against the general assets of the Trust. Each Trust may, however, elect to invest in common shares of those Trusts selected by the Independent Trustees in order to match its deferred compensation obligations.
Other: Expenses that are directly related to one of the Trusts are charged directly to that Trust. Other operating expenses are generally prorated to the Trusts on the basis of relative net assets of all the BlackRock Closed-End Funds.
Note 2. Agreements and Other Transactions with Affiliates and Related Parties
Each Trust has an Investment Management Agreement with BlackRock Advisors, LLC (the“Advisor”), a wholly owned subsidiary of BlackRock, Inc. BlackRock Financial Management, Inc.(“BFM”), a wholly owned subsidiary of BlackRock, Inc., serves as sub-advisor to each Trust. BlackRock, Inc. may be presumed an affiliate of Merrill Lynch & Co., Inc. (“Merrill Lynch”) and The PNC Financial Services Group, Inc. (“PNC”). The investment management agreement covers both investment advisory and administration services.
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Each Trust’s investment advisory fee paid to the Advisor is computed weekly, accrued daily and payable monthly based on an annual rate, 0.55% for the Insured Trusts and Income II Trusts and 0.65% for the Bond Trusts, of each Trust’s average weekly managed assets. Investments in affiliated money market funds are excluded from the average weekly managed assets used to calculate the investment advisory fee. For the period September 30, 2006 through November 15, 2006, the Bond Trusts’ investment advisory fee was reduced to 0.55% of each Trust’s weekly managed assets. “Managed assets” means the total assets of a Trust (including any assets attributable to any preferred shares that may be outstanding) minus the sum of accrued liabilities (other than debt representing financial leverage). The Advisor has voluntarily agreed to waive a portion of the investment advisory fee or other expenses of each Trust. With respect to the Insured Trusts, the waiver, as a percentage of managed assets, is as follows: 0.20% for the first 5 years of each Trust’s operations, 0.15% in year 6, 0.10% in year 7, and 0.05% in year 8. With respect to the Bond Trusts, the waiver, as a percentage of managed assets, is as follows: 0.30% for the first 5 years of each Trust’s operations, 0.25% in year 6, 0.20% in year 7, 0.15% in year 8, 0.10% in year 9 and 0.05% in year 10. With respect to the Income II Trusts, the waiver, as a percentage of managed assets, is as follows: 0.15% for the first 5 years of each Trust’s operations, 0.10% in year 6 through year 7, and 0.05% in year 8 through year 10.
The Advisor pays BFM fees for its sub-advisory services.
Pursuant to the agreements, the Advisor provides continuous supervision of the investment portfolio and pays the compensation of officers of each Trust who are affiliated persons of the Advisor, as well as occupancy and certain clerical and accounting costs of each Trust. Each Trust bears all other costs and expenses, which include reimbursements to the Advisor for costs of employees that provide pricing, secondary market support, and compliance services to each Trust. For the six months ended February 28, 2007, the Trusts reimbursed the Advisor the following amounts, which are included in miscellaneous expenses in the Statements of Operations:
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Trust | | Amount | | Trust | | Amount | |
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Insured Municipal | | | $ | 11,976 | | | Florida Bond | | | $ | 1,525 | | |
Municipal Bond | | | | 4,728 | | | Maryland Bond | | | | 960 | | |
Municipal Income II | | | | 10,143 | | | New Jersey Bond | | | | 638 | | |
California Insured | | | | 2,383 | | | New York Insured | | | | 1,730 | | |
California Bond | | | | 1,525 | | | New York Bond | | | | 982 | | |
California Income II | | | | 3,494 | | | New York Income II | | | | 2,239 | | |
Florida Insured | | | | 4,007 | | | Virginia Bond | | | | 732 | | |
Pursuant to the terms of the custody agreement, each Trust received earnings credits from its custodian for positive cash balances maintained, which are used to offset custody fees. These credits are shown on the Statements of Operations as “fees paid indirectly”.
Investments in companies considered to be an affiliate of the Trusts, for purposes of Section 2(a)(3) of the 1940 Act, were as follows:
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Trust | | Portfolio Company | | Net
Activity
(000) | | | Dividend/
Interest
Income | |
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Insured Municipal | | Merrill Lynch Institutional Tax Exempt Fund | | 6,300 | | | | | $ | 1,492 | | |
Municipal Bond | | Merrill Lynch Institutional Tax Exempt Fund | | 9,300 | | | | | | 2,128 | | |
Municipal Income II | | Merrill Lynch Institutional Tax Exempt Fund | | 10,700 | | | | | | 1,975 | | |
California Insured | | CMA California Mun. Money Fund | | 4,200 | | | | | | 1,411 | | |
California Bond | | CMA California Mun. Money Fund | | 3,400 | | | | | | 1,021 | | |
California Income II | | CMA California Mun. Money Fund | | 200 | | | | | | 67 | | |
Florida Insured | | CMA Florida Mun. Money Fund | | 1,800 | | | | | | 451 | | |
Florida Bond | | CMA Florida Mun. Money Fund | | 900 | | | | | | 221 | | |
Maryland Bond | | Merrill Lynch Institutional Tax Exempt Fund | | 300 | | | | | | 85 | | |
New Jersey Bond | | CMA New Jersey Mun. Money Fund | | 200 | | | | | | 50 | | |
New York Bond | | CMA New York Mun. Money Fund | | 600 | | | | | | 153 | | |
New York Income II | | CMA New York Mun. Money Fund | | 600 | | | | | | 289 | | |
Note 3. Portfolio Securities
Purchases and sales of investment securities, other than short-term investments and U.S. government securities, for the six months ended February 28, 2007 were as follows:
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Trust | | Purchases | | Sales | | | Trust | | Purchases | | Sales | |
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Insured Municipal | | $ | 64,563,811 | | $ | 40,574,364 | | | Florida Bond | | $ | 5,376,976 | | $ | 6,400,660 | |
Municipal Bond | | | 16,952,605 | | | 25,256,845 | | | Maryland Bond | | | 704,102 | | | 275,416 | |
Municipal Income II | | | 27,525,617 | | | 37,457,283 | | | New Jersey Bond | | | 7,886,823 | | | 7,040,401 | |
California Insured | | | 13,928,381 | | | 14,207,271 | | | New York Insured | | | 17,506,433 | | | 13,547,641 | |
California Bond | | | 6,075,156 | | | 8,650,857 | | | New York Bond | | | 10,395,846 | | | 10,083,931 | |
California Income II | | | 20,793,485 | | | 25,749,238 | | | New York Income II | | | 12,049,786 | | | 10,944,789 | |
Florida Insured | | | 6,433,156 | | | 5,803,309 | | | Virginia Bond | | | 2,934,456 | | | 2,674,697 | |
There were no purchases or sales of U.S. government securities for the six months ended February 28, 2007.
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Details of open forward starting swap agreements at February 28, 2007 were as follows:
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| | Notional | | | | | | | | | | | | | Unrealized | |
| | Amount | | Fixed | | Counter | | | | Effective | | Termination | | Appreciation | |
Trust | | (000) | | Rate(a) | | Party | | Floating Rate | | Date | | Date | | (Depreciation) | |
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Insured Municipal | | $ | 22,500,000 | | 3.955 | % | | Citibank | | 1-week BMA Municipal Swap Index | | 03/21/07 | | 03/21/32 | | $ | (301,010 | ) |
| | | 20,000,000 | | 3.988 | | | JP Morgan | | 1-week BMA Municipal Swap Index | | 05/04/07 | | 05/04/27 | | | (437,480 | ) |
| | | 22,300,000 | | 3.815 | | | CITSW | | 1-week BMA Municipal Swap Index | | 03/14/07 | | 03/14/27 | | | 5,339 | |
| | | 16,500,000 | | 4.258 | | | CITSW | | 1-week BMA Municipal Swap Index | | 03/20/07 | | 03/20/37 | | | (918,170 | ) |
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Municipal Bond | | $ | 48,700,000 | | 3.847 | % | | JP Morgan | | 1-week BMA Municipal Swap Index | | 04/27/07 | | 04/27/17 | | $ | (908,469 | ) |
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| | | | | | | | | | | | | | | | $ | (908,469 | ) |
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Municipal Income II | | $ | 27,000,000 | | 3.757 | % | | JP Morgan | | 1-week BMA Municipal Swap Index | | 05/04/07 | | 05/04/16 | | $ | (359,705 | ) |
| | | 18,500,000 | | 3.955 | | | Citibank | | 1-week BMA Municipal Swap Index | | 03/21/07 | | 03/21/32 | | | (247,497 | ) |
| | | 18,700,000 | | 3.815 | | | CITSW | | 1-week BMA Municipal Swap Index | | 03/14/07 | | 03/14/27 | | | 4,477 | |
| | | 14,000,000 | | 4.258 | | | CITSW | | 1-week BMA Municipal Swap Index | | 03/20/07 | | 03/20/37 | | | (779,054 | ) |
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| | | | | | | | | | | | | | | | $ | (1,381,779 | ) |
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California Insured | | $ | 5,000,000 | | 3.955 | % | | Citibank | | 1-week BMA Municipal Swap Index | | 03/21/07 | | 03/21/32 | | $ | (66,890 | ) |
| | | 4,250,000 | | 3.988 | | | JP Morgan | | 1-week BMA Municipal Swap Index | | 05/04/07 | | 05/04/27 | | | (92,965 | ) |
| | | 4,800,000 | | 3.815 | | | CITSW | | 1-week BMA Municipal Swap Index | | 03/14/07 | | 03/14/27 | | | 1,149 | |
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| | | | | | | | | | | | | | | | $ | (158,706 | ) |
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California Bond | | $ | 3,000,000 | | 3.955 | % | | Citibank | | 1-week BMA Municipal Swap Index | | 03/21/07 | | 03/21/32 | | $ | (40,135 | ) |
| | | 2,500,000 | | 3.988 | | | JP Morgan | | 1-week BMA Municipal Swap Index | | 05/04/07 | | 05/04/27 | | | (54,685 | ) |
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|
| |
| | | | | | | | | | | | | | | | $ | (94,820 | ) |
| | | | | | | | | | | | | | | |
|
| |
California Income II | | $ | 7,750,000 | | 3.955 | % | | Citibank | | 1-week BMA Municipal Swap Index | | 03/21/07 | | 03/21/32 | | $ | (103,680 | ) |
| | | 7,000,000 | | 3.988 | | | JP Morgan | | 1-week BMA Municipal Swap Index | | 05/04/07 | | 05/04/27 | | | (153,118 | ) |
| | | 7,900,000 | | 3.815 | | | CITSW | | 1-week BMA Municipal Swap Index | | 03/14/07 | | 03/14/27 | | | 1,891 | |
| | | 5,900,000 | | 4.258 | | | CITSW | | 1-week BMA Municipal Swap Index | | 03/20/07 | | 03/20/37 | | | (328,316 | ) |
| | | | | | | | | | | | | | | |
|
| |
| | | | | | | | | | | | | | | | $ | (583,223 | ) |
| | | | | | | | | | | | | | | |
|
| |
Florida Insured | | $ | 6,750,000 | | 3.955 | % | | Citibank | | 1-week BMA Municipal Swap Index | | 03/21/07 | | 03/21/32 | | $ | (90,302 | ) |
| | | 6,000,000 | | 3.988 | | | JP Morgan | | 1-week BMA Municipal Swap Index | | 05/04/07 | | 05/04/27 | | | (131,244 | ) |
| | | 5,000,000 | | 4.258 | | | CITSW | | 1-week BMA Municipal Swap Index | | 03/20/07 | | 03/20/37 | | | (278,234 | ) |
| | | | | | | | | | | | | | | |
|
| |
| | | | | | | | | | | | | | | | $ | (499,780 | ) |
| | | | | | | | | | | | | | | |
|
| |
Florida Bond | | $ | 2,000,000 | | 3.988 | % | | JP Morgan | | 1-week BMA Municipal Swap Index | | 05/04/07 | | 05/04/27 | | $ | (43,748 | ) |
| | | 1,700,000 | | 4.258 | | | CITSW | | 1-week BMA Municipal Swap Index | | 03/20/07 | | 03/20/37 | | | (94,599 | ) |
| | | | | | | | | | | | | | | |
|
| |
| | | | | | | | | | | | | | | | $ | (138,347 | ) |
| | | | | | | | | | | | | | | |
|
| |
Maryland Bond | | $ | 1,250,000 | | 3.988 | % | | JP Morgan | | 1-week BMA Municipal Swap Index | | 05/04/07 | | 05/04/27 | | $ | (27,343 | ) |
| | | 1,000,000 | | 4.258 | | | CITSW | | 1-week BMA Municipal Swap Index | | 03/20/07 | | 03/20/37 | | | (55,646 | ) |
| | | | | | | | | | | | | | | |
|
| |
| | | | | | | | | | | | | | | | $ | (82,989 | ) |
| | | | | | | | | | | | | | | |
|
| |
New Jersey Bond | | $ | 1,850,000 | | 4.123 | % | | JP Morgan | | 1-week BMA Municipal Swap Index | | 04/27/07 | | 04/27/37 | | $ | (69,157 | ) |
| | | | | | | | | | | | | | | |
|
| |
| | | | | | | | | | | | | | | | $ | (69,157 | ) |
| | | | | | | | | | | | | | | |
|
| |
New York Insured | | $ | 10,000,000 | | 4.123 | % | | JP Morgan | | 1-week BMA Municipal Swap Index | | 04/27/07 | | 04/27/37 | | $ | (299,059 | ) |
| | | | | | | | | | | | | | | |
|
| |
| | | | | | | | | | | | | | | | $ | (299,059 | ) |
| | | | | | | | | | | | | | | |
|
| |
New York Bond | | $ | 1,400,000 | | 4.258 | % | | CITSW | | 1-week BMA Municipal Swap Index | | 03/20/07 | | 03/20/37 | | $ | (77,905 | ) |
| | | | | | | | | | | | | | | |
|
| |
| | | | | | | | | | | | | | | | $ | (77,905 | ) |
| | | | | | | | | | | | | | | |
|
| |
New York | | $ | 3,500,000 | | 3.955 | % | | Citibank | | 1-week BMA Municipal Swap Index | | 03/21/07 | | 03/21/32 | | $ | (46,823 | ) |
Income II | | | 3,300,000 | | 3.815 | | | CITSW | | 1-week BMA Municipal Swap Index | | 03/14/07 | | 03/14/27 | | | 790 | |
| | | 2,500,000 | | 4.258 | | | CITSW | | 1-week BMA Municipal Swap Index | | 03/20/07 | | 03/20/37 | | | (139,117 | ) |
| | | | | | | | | | | | | | | |
|
| |
| | | | | | | | | | | | | | | | $ | (185,150 | ) |
| | | | | | | | | | | | | | | |
|
| |
Virginia Bond | | $ | 1,000,000 | | 4.258 | % | | CITSW | | 1-week BMA Municipal Swap Index | | 03/20/07 | | 03/20/37 | | $ | (55,646 | ) |
| | | 1,250,000 | | 3.955 | | | Citibank | | 1-week BMA Municipal Swap Index | | 03/21/07 | | 03/21/32 | | | (16,723 | ) |
| | | 1,000,000 | | 3.988 | | | JP Morgan | | 1-week BMA Municipal Swap Index | | 05/04/07 | | 05/04/27 | | | (21,874 | ) |
| | | | | | | | | | | | | | | |
|
| |
| | | | | | | | | | | | | | | | $ | (94,243 | ) |
| | | | | | | | | | | | | | | |
|
| |
(a) Trust pays fixed interest rate and receives floating interest rate.
BMA—Bond Market Association.
81
Note 4. Income Tax Information
The tax character of distributions paid during the year ended August 31, 2006 was as follows:
| | | | | | | | | | |
| | Year ended August 31, 2006 | |
| |
| |
Distributions Paid From: | | Tax-exempt
Income | | Long-term
Capital Gains | | Total
Distributions | |
| |
| |
| |
| |
Insured Municipal | | $ | 26,384,051 | | | $ | — | | | | $ | 26,384,051 | | |
Municipal Bond | | | 13,118,892 | | | | 1,155,649 | | | | | 14,274,541 | | |
Municipal Income II | | | 29,295,428 | | | | — | | | | | 29,295,428 | | |
California Insured | | | 5,051,269 | | | | — | | | | | 5,051,269 | | |
California Bond | | | 4,086,285 | | | | — | | | | | 4,086,285 | | |
California Income II | | | 8,259,033 | | | | — | | | | | 8,259,033 | | |
Florida Insured | | | 8,504,736 | | | | — | | | | | 8,504,736 | | |
Florida Bond | | | 4,000,290 | | | | — | | | | | 4,000,290 | | |
Maryland Bond | | | 2,263,598 | | | | — | | | | | 2,263,598 | | |
New Jersey Bond | | | 2,694,470 | | | | 183,005 | | | | | 2,877,475 | | |
New York Insured | | | 6,153,508 | | | | — | | | | | 6,153,508 | | |
New York Bond | | | 3,193,912 | | | | — | | | | | 3,193,912 | | |
New York Income II | | | 4,751,203 | | | | — | | | | | 4,751,203 | | |
Virginia Bond | | | 1,727,354 | | | | — | | | | | 1,727,354 | | |
For Federal income tax purposes, the following Trusts had capital loss carryforwards as of their last respective tax year-end (the Bond Trusts have a tax year-end of October 31st, the Insured Trusts have a tax year-end of September 30th and the Income II Trusts have a tax year-end of June 30th). These amounts may be used to offset future realized capital gains, if any:
| | | | | | | | | | | | | | | | |
Trust | | Capital Loss
Carryforward Amount | | Expires | | Trust | | Capital Loss
Carryforward Amount | | Expires |
| |
| |
| |
| |
| |
|
Insured Municipal | | | $ | 100,796 | | | 2012 | | Florida Insured | | | $ | 1,331,546 | | | 2013 |
| | |
|
| | | | | | | |
|
| | | |
Municipal Income II | | | $ | 5,770,550 | | | 2013 | | Florida Bond | | | $ | 215,418 | | | 2012 |
| | |
|
| | | | | | | |
|
| | | |
California Insured | | | $ | 8,282 | | | 2012 | | Maryland Bond | | | $ | 91,148 | | | 2012 |
| | | | | | | | | | | |
|
| | | |
| | | | 1,371,749 | | | 2013 | | | | | | | | | |
| | |
|
| | | | | | | | | | | | |
| | | $ | 1,380,031 | | | | | New York Insured | | | $ | 103 | | | 2012 |
| | |
|
| | | | | | | | | | | | |
| | | | | | | | | | | | | 140,352 | | | 2013 |
| | | | | | | | | | | |
|
| | | |
| | | | | | | | | | | | $ | 140,455 | | | |
| | | | | | | | | | | |
|
| | | |
California Bond | | | $ | 789,872 | | | 2012 | | | | | | | | | |
| | |
|
| | | | | | | | | | | | |
California Income II | | | $ | 1,441 | | | 2011 | | New York Bond | | | $ | 273,288 | | | 2012 |
| | | | | | | | | | | |
|
| | | |
| | | | 1,163,822 | | | 2012 | | | | | | | | | |
| | | | 3,357,448 | | | 2013 | | New York Income II | | | $ | 59,598 | | | 2013 |
| | |
|
| | | | | | | |
|
| | | |
| | | $ | 4,522,711 | | | | | | | | | | | | |
| | |
|
| | | | | | | | | | | | |
| | | | | | | | | Virginia Bond | | | $ | 55,551 | | | 2012 |
| | | | | | | | | | | |
|
| | | |
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 capital loss carryforward amounts.
82
Note 5. Capital
There are an unlimited number of $0.001 par value common shares of beneficial interest authorized for each Trust. Each Trust may classify or reclassify any unissued common shares into one or more series of Auction Market Preferred Shares (“preferred shares”).
During the six months ended February 28, 2007 and the year ended August 31, 2006, the following Trusts issued additional shares under their respective dividend reinvestment plan:
| | | | | | | |
Trust | | February 28, 2007 | | August 31, 2006 | |
| |
| |
| |
Insured Municipal | | — | | | 27,142 | | |
Municipal Bond | | 31,733 | | | 64,035 | | |
Municipal Income II | | 70,719 | | | 136,465 | | |
California Insured | | — | | | 2,293 | | |
California Bond | | 10,136 | | | 14,609 | | |
California Income II | | 2,069 | | | — | | |
Florida Insured | | — | | | 5,166 | | |
Florida Bond | | 5,131 | | | 6,311 | | |
Maryland Bond | | 4,344 | | | 7,206 | | |
New Jersey Bond | | 5,175 | | | 10,753 | | |
New York Insured | | — | | | 10,476 | | |
New York Bond | | 11,231 | | | 17,055 | | |
Virginia Bond | | 4,612 | | | 7,680 | | |
As of February 28, 2007, each Trust had the following series of preferred shares outstanding as listed in the table below. The preferred shares have a liquidation value of $25,000 per share plus any accumulated unpaid dividends.
| | | | | | | | | | | | | | | |
Trust | | Series | | Shares | | Trust | | Series | | Shares | |
| |
| |
| |
| |
| |
| |
Insured Municipal | | M7 | | | 3,053 | | | California Income II | | T7 | | | 1,439 | | |
| | R7 | | | 3,053 | | | | | R7 | | | 1,439 | | |
| | F7 | | | 3,053 | | | Florida Insured | | M7 | | | 3,040 | | |
Municipal Bond | | T7 | | | 1,810 | | | Florida Bond | | W7 | | | 1,191 | | |
| | R7 | | | 1,810 | | | Maryland Bond | | R7 | | | 720 | | |
Municipal Income II | | M7 | | | 2,055 | | | New Jersey Bond | | M7 | | | 809 | | |
| | T7 | | | 2,056 | | | New York Insured | | R7 | | | 2,240 | | |
| | W7 | | | 2,055 | | | New York Bond | | T7 | | | 968 | | |
| | R7 | | | 2,056 | | | New York Income II | | W7 | | | 1,786 | | |
California Insured | | F7 | | | 1,860 | | | Virginia Bond | | R7 | | | 541 | | |
California Bond | | F7 | | | 1,199 | | | | | | | | | | |
Dividends on seven-day preferred shares are cumulative at a rate which is reset every seven days based on the results of an auction. The dividend ranges and average on the preferred shares for each of the Trusts for the six months ended February 28, 2007 were as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Trust | | Series | | Low | | High | | Average | | Trust | | Series | | Low | | High | | Average | |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
Insured Municipal | | M7 | | | 3.00 | % | | 3.90 | % | | 3.42 | % | | California Income II | | T7 | | | 2.90 | % | | 3.95 | % | | 3.28 | % | |
| | R7 | | | 2.95 | | | 4.70 | | | 3.34 | | | | | R7 | | | 2.90 | | | 4.00 | | | 3.21 | | |
| | F7 | | | 3.00 | | | 4.20 | | | 3.35 | | | Florida Insured | | M7 | | | 3.22 | | | 3.95 | | | 3.48 | | |
Municipal Bond | | T7 | | | 3.09 | | | 3.90 | | | 3.49 | | | Florida Bond | | W7 | | | 3.14 | | | 3.95 | | | 3.46 | | |
| | R7 | | | 3.19 | | | 3.90 | | | 3.51 | | | Maryland Bond | | R7 | | | 2.00 | | | 3.90 | | | 3.41 | | |
Municipal Income II | | M7 | | | 2.89 | | | 4.00 | | | 3.41 | | | New Jersey Bond | | M7 | | | 2.90 | | | 3.90 | | | 3.26 | | |
| | T7 | | | 3.25 | | | 3.75 | | | 3.50 | | | New York Insured | | R7 | | | 2.80 | | | 5.00 | | | 3.13 | | |
| | W7 | | | 3.24 | | | 4.00 | | | 3.51 | | | New York Bond | | T7 | | | 2.81 | | | 3.61 | | | 3.18 | | |
| | R7 | | | 3.29 | | | 3.58 | | | 3.50 | | | New York Income II | | W7 | | | 2.50 | | | 4.00 | | | 3.18 | | |
California Insured | | F7 | | | 2.60 | | | 3.90 | | | 3.17 | | | Virginia Bond | | R7 | | | 2.50 | | | 4.50 | | | 3.36 | | |
California Bond | | F7 | | | 2.89 | | | 3.90 | | | 3.35 | | | | | | | | | | | | | | | | |
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 preferred shares would be less than 200%.
The 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 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.
83
The holders of preferred shares have voting rights equal to the holders of common shares (one vote per share) and will vote together with holders of common shares as a single class. However, holders of preferred shares, voting as a separate class, are also entitled to elect two Trustees for each Trust. In addition, the 1940 Act requires that along with approval by shareholders that might otherwise be required, the approval of the holders of a majority of any outstanding preferred shares, voting separately as a class would be required to (a) adopt any plan of reorganization that would adversely affect the preferred shares, (b) change a Trust’s 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.
Note 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 states 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 principle 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 for 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.
Note 7. Subsequent Events
Subsequent to February 28, 2007, the Board of each Trust declared dividends from undistributed earnings per common share payable April 2, 2007, to shareholders of record on March 15, 2007. The per share common dividends declared were as follows:
| | | | | | | | | | | | | | |
Trust | | Common Dividend
Per Share | | | Trust | | Common Dividend
Per Share | |
| |
| | |
| |
| |
Insured Municipal | | | $ | 0.061000 | | | | Florida Bond | | | $ | 0.077808 | | |
Municipal Bond | | | | 0.085000 | | | | Maryland Bond | | | | 0.071350 | | |
Municipal Income II | | | | 0.076000 | | | | New Jersey Bond | | | | 0.078582 | | |
California Insured | | | | 0.058000 | | | | New York Insured | | | | 0.058000 | | |
California Bond | | | | 0.077000 | | | | New York Bond | | | | 0.077099 | | |
California Income II | | | | 0.065500 | | | | New York Income II | | | | 0.062500 | | |
Florida Insured | | | | 0.058000 | | | | Virginia Bond | | | | 0.072428 | | |
The dividends declared on preferred shares for the period March 1, 2007 to March 31, 2007 for each of the Trusts were as follows:
| | | | | | | | | | | | | | | | | | | | |
Trust | | Series | | Dividends
Declared | | | Trust | | Series | | Dividends
Declared | |
| |
| |
| | |
| |
| |
| |
Insured Municipal | | | M7 | | | $ | 201,529 | | | | California Income II | | | T7 | | | $ | 88,642 | | |
| | | R7 | | | | 238,561 | | | | | | | R7 | | | | 104,774 | | |
| | | F7 | | | | 197,041 | | | | Florida Insured | | | M7 | | | | 203,011 | | |
Municipal Bond | | | T7 | | | | 120,184 | | | | Florida Bond | | | W7 | | | | 99,008 | | |
| | | R7 | | | | 150,990 | | | | Maryland Bond | | | R7 | | | | 55,224 | | |
Municipal Income II | | | M7 | | | | 137,336 | | | | New Jersey Bond | | | M7 | | | | 48,475 | | |
| | | T7 | | | | 137,505 | | | | New York Insured | | | R7 | | | | 164,282 | | |
| | | W7 | | | | 171,038 | | | | New York Bond | | | T7 | | | | 57,122 | | |
| | | R7 | | | | 171,799 | | | | New York Income II | | | W7 | | | | 131,432 | | |
California Insured | | | F7 | | | | 108,773 | | | | Virginia Bond | | | R7 | | | | 40,099 | | |
California Bond | | | F7 | | | | 71,844 | | | | | | | | | | | | | |
84
|
DIVIDEND REINVESTMENT PLANS |
|
Pursuant to each Trust’s Dividend Reinvestment Plan (the “Plan”), common shareholders are automatically enrolled to have all distributions of dividends and capital gains reinvested by Computershare Trust Company, N.A. (the “Plan Agent”) in the respective Trust’s shares pursuant to the Plan. Shareholders who do not participate in the Plan will receive all distributions in cash paid by check and mailed directly to the shareholders of record (or if the shares are held in street or other nominee name, then to the nominee) by the Plan Agent, which serves as agent for the shareholders in administering the Plan.
After a Trust declares a dividend or determines to make a capital gain distribution, the Plan Agent will acquire shares for the participants’ accounts, depending upon the circumstances described below, either (i) through receipt of unissued but authorized shares from the Trust (“newly issued shares”) or (ii) by purchase of outstanding shares on the open market, on the Trust’s primary exchange or elsewhere (“open-market purchases”). If, on the dividend payment date, the net asset value per share (“NAV”) is equal to or less than the market price per share plus estimated brokerage commissions (such condition 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.
85
Shareholder Meetings
A Joint Special Meeting of Shareholders was held on November 15, 2006 for shareholders of record as of September 29, 2006, to approve a new Investment Management Agreement for each of the following Trusts:
Approved the Investment Management Agreement as follows:
| | | | | | | |
| Votes For | | Votes Against | | Votes Abstain |
|
| |
| |
|
Municipal Bond | 5,125,063 | | 264,473 | | | 262,780 | |
California Bond | 1,607,321 | | 47,428 | | | 192,723 | |
Florida Bond | 1,662,531 | | 97,712 | | | 72,516 | |
Maryland Bond | 1,080,534 | | 34,146 | | | 39,477 | |
New Jersey Bond | 1,238,651 | | 51,222 | | | 41,940 | |
New York Bond | 1,359,572 | | 60,892 | | | 86,967 | |
Virginia Bond | 876,831 | | 18,148 | | | 59,756 | |
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 objective or policies or to any Trust’s charters or by-laws that were not approved by the shareholders or in the principle risk factors associated with investment in the Trusts.
Quarterly performance 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.
Certain officers of the Trusts listed on the inside back cover of this Report to Shareholders are also officers of the Advisor or Sub-Advisor. They serve in the following capacities for the Advisor or Sub-Advisor: Robert S. Kapito—Director and Vice Chairman of the Advisor and the Sub-Advisor, Donald Burke, Anne Ackerley, Bartholomew Battista, Vincent Tritto and Brian Kindelan—Managing Directors of the Advisor and the Sub-Advisor, Neal Andrews and James Kong—Managing Directors of the Sub-Advisor.
Important Information Regarding the BlackRock Closed-End Funds Semi-Annual Investor Update
The Semi-Annual Investor Update (“Update”) is available on the Internet and may be accessed through BlackRock’s website at http://www1.blackrock.com. The Update provides information on the fixed income markets and summaries of BlackRock closed-end funds’ investment objectives and strategies. It also contains recent news regarding the BlackRock closed-end funds.
Historically, BlackRock provided this information in materials mailed with the Funds’ semi-annual report. However, we believe that making this information available through BlackRock’s website allows us to communicate more fully and efficiently with the Funds’ shareholders.
If you would like to receive a hard copy of the BlackRock Closed-End Funds Semi-Annual Investor Update, please call (800) 699-1BFM.
86
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BlackRock Closed-End Funds
| |
Trustees
Ralph L. Schlosstein, Chairman
Andrew F. Brimmer, Lead Trustee1
Richard E. Cavanagh, Lead Trustee2
Kent Dixon
Frank J. Fabozzi
Kathleen F. Feldstein
R. Glenn Hubbard
Robert S. Kapito3 Officers
Robert S. Kapito, President
Donald C. Burke, Treasurer
Bartholomew Battista, Chief Compliance Officer
Anne Ackerley, Vice President
Neal Andrews, Assistant Treasurer
Jay Fife, Assistant Treasurer
Spencer Fleming, Assistant Treasurer
James Kong, Assistant Treasurer
Robert Mahar, Assistant Treasurer
Vincent B. Tritto, Secretary
Brian P. Kindelan, Assistant Secretary Investment Advisor
BlackRock Advisors, Inc.
100 Bellevue Parkway
Wilmington, DE 19809
(800) 227-7BFM Sub-Advisor
BlackRock Financial Management, Inc.
40 East 52nd Street
New York, NY 10022 Accounting Agent and Custodian
State Street Bank and Trust Company
2 Avenue De Lafayette
Boston, MA 02111 | Transfer Agent
Computershare Trust Company, N.A.
250 Royall Street
Canton, MA 02021
(800) 699-1BFM Auction Agent4
Bank of New York
101 Barclay Street, 7 West
New York, NY 10286 Auction Agent5
Deutsche Bank Trust Company Americas
60 Wall Street, 27th Floor
New York, NY 10286 Independent Registered Public Accounting Firm
Deloitte & Touche LLP
200 Berkeley Street
Boston, MA 02116 Legal Counsel
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, NY 10036 Legal Counsel – Independent Trustees
Debevoise & Plimpton LLP
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. BlackRock Closed-End Funds
c/o BlackRock Advisors, LLC.
100 Bellevue Parkway
Wilmington, DE 19809
(800) 227-7BFM |
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1 | Retired, effective December 31, 2006 |
2 | Effective as of January 1, 2007 |
3 | Resigned, effective December 31, 2006 |
4 | For the Insured Trusts and Bond Trusts. |
5 | For the Income II Trusts. |
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.
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 policies and procedures, without charge, by calling (800) 699-1BFM. These policies and procedures are also available on the website of the Securities and Exchange Commission (the “Commission”) at http://www.sec.gov.
Information on how proxies relating to the Trusts’ voting securities were voted (if any) by the Advisor during the most recent 12-month period ended June 30th is available, upon request, by calling (800) 699-1BFM or on the website of the Commission at http://www.sec.gov.
The Trusts file their complete schedule of portfolio holdings for the first and third quarters of their respective fiscal years with the Commission on Form N-Q. Each Trust’s Form N-Q will be available on the Commission’s website at http://www.sec.gov. Each Trust’s Form N-Q, may be reviewed and copied at the Commission’s Public Reference Room in Washington, D.C. Information regarding the operation of the Public Reference Room may be obtained by calling (800) SEC-0330. Each Trust’s Form N-Q may also be obtained upon request without charge by calling (800) 699-1BFM.
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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-SEMI-1
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.
The Registrant’s Schedule of Investments is included as part of the Report to Shareholders filed under Item 1 of this form.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable for semi-annual reports.
Item 8. Portfolio Managers of Closed-End Management Investment Companies
(a) Not applicable for semi-annual reports.
(b) Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Companies and Affiliated Purchasers.
Not applicable because no such purchases were made during the period covered by this report.
Item 10. Submission of Matters to a Vote of Security Holders.
No matters were voted on by shareholders during the period covered by this report.
Item 11. Controls and Procedures.
(a) The Registrant’s principal executive and principal financial officers have evaluated the Registrant’s disclosure controls and procedures within 90 days of this filing and have concluded, as of that date, that the Registrant’s disclosure controls and procedures were reasonably designed to ensure that information required to be disclosed by the Registrant in this Form N-CSR was recorded, processed, summarized, and reported within the required time periods and that information required to be disclosed by the Registrant in this Form N-CSR was accumulated and communicated to the Registrant’s management, including its principle executive and principle financial officers, as appropriate to allow timely decisions regarding required disclosure.
(b) There were no changes in the Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940 (17 CFR 270.30a-3(d)) that occurred during the Registrant’s last fiscal half-year that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting.
Item 12. 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 attached as EX-99.CERT.
(a) (3) Not applicable.
(b) Certification of Principal Executive and Financial Officers pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 furnished as EX-99.906CERT.
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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)___BlackRock Florida Municipal Bond Trust__________
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By: | /s/ Donald C. Burke |
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Name: | Donald C. Burke |
Title: | Treasurer |
Date: | May 3, 2007 |
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.
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By: | /s/ Robert S. Kapito |
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Name: | Robert S. Kapito |
Title: | Principal Executive Officer |
Date: | May 3, 2007 |
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By: | /s/ Donald C. Burke |
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Name: | Donald C. Burke |
Title: | Principal Financial Officer |
Date: | May 3, 2007 |
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