UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT
COMPANIES
Investment Company Act file number 811-21280
Name of Fund: BlackRock Preferred Opportunity Trust (BPP)
Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809
Name and address of agent for service: Donald C. Burke, Chief Executive Officer, BlackRock Preferred Opportunity Trust, 800 Scudders Mill Road, Plainsboro, NJ, 08536. Mailing address: P.O. Box 9011, Princeton, NJ, 08543-9011
Registrant’s telephone number, including area code: (800) 882-0052, Option 4
Date of fiscal year end: 12/31/2008
Date of reporting period: 01/01/2008 – 06/30/2008
Item 1 – Report to Stockholders EQUITIES FIXED INCOME REAL ESTATE LIQUIDITY ALTERNATIVES BLACKROCK SOLUTIONS Semi-Annual Report JUNE 30, 2008 | (UNAUDITED) BlackRock Global Floating Rate Income Trust (BGT) BlackRock High Income Shares (HIS) BlackRock Preferred Opportunity Trust (BPP) NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE Table of Contents Page 3 Semi-Annual Report: 4 7 7 Financial Statements: 8 25 26 27 28 29 32 Disclosure of Investment Advisory Agreement and Subadvisory Agreement 38 41 42 2 SEMI-ANNUAL REPORT JUNE 30, 2008 THIS PAGE NOT PART OF YOUR FUND REPORT Dear Shareholder Throughout the past year, investors were overwhelmed by lingering credit and financial market troubles, surging oil prices and more recently, renewed inflation concerns. Healthy nonfinancial corporate profits and robust exporting activity remained among the few bright spots, helping the economy to grow at a modest, but still positive, pace. The Federal Reserve Board (the “Fed”) has been aggressive in its attempts to stoke economic growth and ease financial market instability. In addition to slashing the target federal funds rate 325 basis points (3.25%) between September 2007 and April 2008, the central bank introduced the new Term Securities Lending Facility, granted broker-dealers access to the discount window and used its own balance sheet to help negotiate the sale of Bear Stearns. As widely anticipated, the end of the period saw a pause in Fed action, as the central bank held the target rate steady at 2.0% amid rising inflationary pressures. As the Fed’s bold response to the financial crisis helped ease credit turmoil and investor anxiety, U.S. equity markets sank sharply over the last six months, notwithstanding a brief rally in the spring. International markets were not immune to the tumult, with most regions also registering declines. Treasury securities also traded in a volatile fashion, but generally rallied (yields fell as prices correspondingly rose), with investors continuing to seek safety as part of a broader flight to quality. The yield on 10-year Treasury issues, which fell to 3.34% in March 2008, climbed up to the 4.20% range in mid-June as investors temporarily shifted out of Treasury issues in favor of riskier assets (such as stocks and other high-quality fixed income sectors), then reversed course and declined to 3.99% by period-end when credit fears re-emerged. Tax-exempt issues eked out gains for the reporting period, but underperformed their taxable counterparts, as the group continued to be pressured by problems among municipal bond insurers and the breakdown in the market for auction rate securities. The major benchmark indexes generated results that largely reflected heightened investor risk aversion: Total Returns as of June 30, 2008 6-month 12-month U.S. equities (S&P 500 Index) (11.91 )% (13.12 )% Small cap U.S. equities (Russell 2000 Index) (9.37 )% (16.19 )% International equities (MSCI Europe, Australasia, Far East Index) (10.96 )% (10.61 )% Fixed income (Lehman Brothers U.S. Aggregate Index) 1.13 % 7.12 % Tax-exempt fixed income (Lehman Brothers Municipal Bond Index) 0.02 % 3.23 % High yield bonds (Lehman Brothers U.S. Corporate High Yield 2% Issuer Capped Index) (1.08 )% (1.74 )% Past performance is no guarantee of future results. Index performance shown for illustrative purposes only. You cannot invest directly in an index. As you navigate today’s volatile markets, we encourage you to review your investment goals with your financial professional and to make portfolio changes, as needed. For more up-to-date commentary on the economy and financial markets, we invite you to visit www.blackrock.com/funds. As always, we thank you for entrusting BlackRock with your investment assets, and we look forward to continuing to serve you in the months and years ahead. Sincerely, Rob Kapito 3 Investment Objective BlackRock Global Floating Rate Income Trust (BGT) (the “Trust”) seeks to provide a high level of current income and to seek the preservation of capital. Performance For the six months ended June 30, 2008, the Trust returned (2.21)% based on market price and (2.82)% based on net asset value (“NAV”). For the same period, the closed-end Lipper Loan Participation Funds category posted an average return of (4.17)% on a NAV basis. All returns reflect reinvestment of dividends. The Trust was conservatively positioned in an adverse market for floating-rate loans, which aided relative performance. The Trust’s allocations to high yield (15% at 3/31/08) and investment-grade corporates (7.5% at 3/31/08) also aided relative performance as those sectors outperformed loans. During the period, the Trust’s discount to NAV narrowed modestly, which accounts for the difference between performance based on price and performance based on NAV. The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results. Trust Information Symbol on New York Stock Exchange BGT Initial Offering Date August 30, 2004 Yield on Closing Market Price as of June 30, 2008 ($14.83)1 8.50% Current Monthly Distribution per Share2 $0.105 Current Annualized Distribution per Share2 $1.26 Leverage as of June 30, 20083 38% 1 Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results. 2 The distribution is not constant and is subject to change. A portion of the distribution may be deemed a tax return of capital or net realized gain at fiscal year-end. 3 As a percentage of total managed assets, which is the total assets of the Trust (including any assets attributable to any borrowing that may be outstanding) minus the sum of accrued liabilities (other than debt representing financial leverage). The table below summarizes the changes in the Trust’s market price and net asset value per share: 6/30/08 12/31/07 Change High Low Market Price $14.83 $15.78 (6.02)% $16.54 $13.37 Net Asset Value $16.54 $17.71 (6.61)% $17.76 $15.69 The following charts show the portfolio composition of the Trust’s long-term investments and credit quality allocations of the Trust’s corporate bond investments: Portfolio Composition 6/30/08 12/31/07 Floating Rate Loan Interests 79 % 74 % Corporate Bonds 13 14 Foreign Government Obligations 8 12 Credit Quality4 Credit Rating 6/30/08 12/31/07 A/A 21 % — BBB/Baa 24 39 % BB/Ba 17 26 B/B 20 27 CCC/Caa 9 8 CC/Ca 1 — Not Rated 8 — 4 Using the higher of Standard & Poor’s or Moody’s Investors Service ratings. 4 SEMI-ANNUAL REPORT JUNE 30, 2008 Trust Summary as of June 30, 2008 BlackRock High Income Shares Investment Objective BlackRock High Income Shares (HIS) (the “Trust”) seeks to provide a high level of current income and, to a lesser extent, seek capital appreciation, by investing in a diversified portfolio of below investment grade securities. Performance For the six months ended June 30, 2008, the Trust returned (0.05)% based on market price and (2.00)% based on NAV. For the same period, the closed-end Lipper High Current Yield Funds (Leveraged) category posted an average return of (8.34)% on a NAV basis. All returns reflect reinvestment of dividends. The Trust was conservatively positioned in an adverse market, which aided relative performance. The Trust also was moderately leveraged relative to its peers (17% at 3/31/08), which also aided relative results. During the period, the Trust’s discount to NAV narrowed modestly, which accounts for the difference between performance based on price and performance based on NAV. The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results. Trust Information Symbol on New York Stock Exchange HIS Initial Offering Date August 10, 1988 Yield on Closing Market Price as of June 30, 2008 ($2.05)1 10.65% Current Monthly Distribution per Share2 $0.0182 Current Annualized Distribution per Share2 $0.2184 Leverage as of June 30, 20083 15% 1 Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results. 2 The distribution is not constant and is subject to change. 3 As a percentage of total managed assets, which is the total assets of the Trust (including any assets attributable to any borrowing that may be outstanding) minus the sum of accrued liabilities (other than debt representing financial leverage). The table below summarizes the changes in the Trust’s market price and net asset value per share: 6/30/08 12/31/07 Change High Low Market Price $2.05 $2.14 (4.21)% $2.28 $1.85 Net Asset Value $2.32 $2.47 (6.07)% $2.47 $2.25 The following charts show the portfolio composition of the Trust’s long-term investments and credit quality allocations of the Trust’s corporate bond investments: Portfolio Composition 6/30/08 12/31/07 Corporate Bonds 88 % 93 % Floating Rate Loan Interests 9 5 Perferred Stocks 2 2 Capital Trusts 1 — Credit Quality4 Credit Rating 6/30/08 12/31/07 BBB/Baa 4 % 1 % BB/Ba 22 21 B/B 55 54 CCC/Caa 16 21 Not Rated 3 3 4 Using the higher of Standard & Poor’s or Moody’s Investors Service ratings. SEMI-ANNUAL REPORT JUNE 30, 2008 5 Trust Summary as of June 30, 2008 BlackRock Preferred Opportunity Trust Investment Objective BlackRock Preferred Opportunity Trust (BPP) (the “Trust”) seeks to provide a high level of current income consistent with capital preservation. Performance For the six months ended June 30, 2008, the Trust returned 5.09% based on market price and (6.62)% based on NAV. For the same period, the closed-end Lipper Income & Preferred Stock Funds category posted an average return of (9.44)% on a NAV basis. All returns reflect reinvestment of dividends. The Trust was 65% invested in the banking and insurance sector, which makes up most of the market. This detracted from performance as the financial sector came under pressure during the period. The Trust maintained an underweight to $25 par preferreds, which we believed would underperform. This generally hurt relative performance, but began to aid results later in the period as these securities’ prices began to drop. Additionally, many of the funds in the Lipper category also are equity funds, and equities underperformed preferreds during the period. The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results. Trust Information Symbol on New York Stock Exchange BPP Initial Offering Date February 28, 2003 Yield on Closing Market Price as of June 30, 2008 ($17.55)1 8.55% Current Monthly Distribution per Share2 $0.125 Current Annualized Distribution per Share2 $1.50 Leverage as of June 30, 20083 39% 1 Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results. 2 The distribution is not constant and is subject to change. 3 As a percentage of total managed assets, which is the total assets of the Trust (including any assets attributable to any borrowing that may be outstanding) minus the sum of accrued liabilities (other than debt representing financial leverage). The table below summarizes the changes in the Trust’s market price and net asset value per share: 6/30/08 12/31/07 Change High Low Market Price $17.55 $17.31 1.39% $19.90 $15.62 Net Asset Value $17.54 $19.47 (9.91)% $20.18 $17.53 The following charts show the portfolio composition and credit quality allocations of the Trust’s long-term investments: Portfolio Composition4 6/30/08 12/31/07 Financials 89 % 85 % Consumer Discretionary 4 5 Energy 3 3 Utilities 1 2 Materials 1 1 Industrials 1 2 Telecommunication Services 1 1 Information Technology — 1 4 For Trust compliance purposes, the Trust’s sector and industry classifications refer to any one or more of the Standard Industry Codes as defined by the SEC. This definition may not apply for purposes of this report, which may combine sector and industry sub-classifications for reporting ease. Preferred, Trust Preferred and Corporate Bond Breakdown5 Credit Rating 6/30/08 12/31/07 AA/Aa 23 % 26 % A 44 39 BBB/Baa 26 24 BB/Ba 5 5 B 2 6 5 Using the higher of Standard & Poor’s or Moody’s Investors Service ratings. 6 SEMI-ANNUAL REPORT JUNE 30, 2008 The Trusts utilize leveraging through borrowings or issuance of short-term debt securities. The concept of leveraging is based on the premise that the cost of assets to be obtained from leverage will be based on short-term interest rates, or dividends on Preferred Shares, which normally will be lower than the income earned by each Trust on its longer-term portfolio investments. To the extent that the total assets of each Trust (including the assets obtained from leverage) are invested in higher-yielding portfolio investments, each Trust’s Common Shareholders will be the beneficiaries of the incremental yield. Leverage creates risks for holders of Common Shares including the likelihood of greater NAV and market price volatility. In addition, there is the risk that fluctuations in interest rates on borrowings (or in the dividend rates on any Preferred Shares) may reduce the Common Shares’ yield and negatively impact its NAV and market price. If the income derived from securities purchased with assets received from leverage exceeds the cost of leverage, each Trust’s net income will be greater than if leverage had not been used. Conversely, if the income from the securities purchased is not sufficient to cover the cost of leverage, each Trust’s net income will be less than if leverage had not been used, and therefore the amount available for distribution to Common Shareholders will be reduced. As of June 30, 2008, the Trusts incurred leverage as a percentage of managed assets, as set forth in the table below. BGT’s leverage is from borrowings through a credit facility and its issuance of Preferred Shares. HIS’s leverage is from borrowings through a credit facility. BPP’s leverage is from reverse repurchase agreements and its issuance of Preferred Shares. The Trusts are subject to certain leverage limitations, including limitations under the Investment Company Act of 1940. As of June 30, 2008, the Trusts were in compliance with those leverage limitations. Leverage as of BlackRock Global Floating Rate Income Trust (BGT) 38% BlackRock High Income Shares (HIS) 15% BlackRock Preferred Opportunity Trust (BPP) 39% 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 or market without owning or taking physical custody of securities. Swap agreements involve the risk that the party with whom the Trust has entered into the swap will default on its obligation to pay the Trust and the risk that the Trust will not be able to meet its obligations to pay the other party to the agreement. SEMI-ANNUAL REPORT JUNE 30, 2008 7 BlackRock Global Floating Rate Income Trust (BGT) (Percentages shown are based on Net Assets) Corporate Bonds Par Value Air Freight & Logistics—0.0% Park-Ohio Industries, Inc., 8.375%, 11/15/14 $ 125 $ 100,000 Auto Components—0.1% The Goodyear Tire & Rubber Co., 6.678%, 12/01/09 (a) 60 59,550 Lear Corp., 8.75%, 12/01/16 100 78,000 Metaldyne Corp., 10%, 11/01/13 120 62,400 199,950 Building Products—0.0% CPG International I, Inc., 10.50%, 7/01/13 90 75,150 Momentive Performance Materials, Inc. 11.50%, 12/01/16 130 96,850 172,000 Capital Markets—1.3% E*Trade Financial Corp., 12.50%, 11/30/17 (b) 2,500 2,687,500 Marsico Parent Co., LLC, 10.625%, 1/15/16 (b) 1,501 1,350,900 Marsico Parent Holdco, LLC, 12.50%, 7/15/16 (b)(c) 537 482,973 Marsico Parent Superholdco, LLC, 14.50%, 1/15/18 (b)(c) 360 318,349 4,839,722 Chemicals—0.6% American Pacific Corp., 9%, 2/01/15 125 122,187 Ames True Temper, Inc., 6.713%, 1/15/12 (a) 1,100 946,000 Chemtura Corp., 6.875%, 6/01/16 10 8,650 Hercules, Inc., 6.75%, 10/15/29 750 727,500 Ineos Group Holdings Plc, 7.875%, 2/15/16 (b) EUR 225 229,379 Key Plastics LLC, 11.75%, 3/15/13 (b) $ 625 281,250 2,314,966 Commercial Banks—0.7% TuranAlem Finance B.V., 4.283%, 1/22/09 (a)(b) 3,000 2,850,000 Commercial Services & Supplies—0.1% DI Finance Series B, 9.50%, 2/15/13 307 307,000 Containers & Packaging—0.2% Berry Plastics Holding Corp.: 6.651%, 9/15/14 (a) 500 400,000 8.875%, 9/15/14 110 95,150 Impress Holdings BV, 5.838%, 9/15/13 (a)(b) 150 136,500 631,650 Diversified Telecommunication Services—0.9% Cincinnati Bell, Inc., 7.25%, 7/15/13 310 302,250 Qwest Communications International, Inc., 6.176%, 2/15/09 (a) 784 780,080 Qwest Corp., 6.026%, 6/15/13 (a) 2,500 2,387,500 Wind Acquisition Finance SA, 10.75%, 12/01/15 (b) 150 157,500 3,627,330 Electrical Equipment—0.0% Superior Essex Communications LLC, 9%, 4/15/12 140 142,800 Electronic Equipment & Instruments—0.3% Sanmina-SCI Corp.: 6.75%, 3/01/13 55 49,362 8.125%, 3/01/16 1,065 958,500 1,007,862 Energy Equipment & Services—0.1% Compagnie Generale de Geophysique-Veritas: 7.50%, 5/15/15 70 69,825 7.75%, 5/15/17 50 50,063 Corporate Bonds Par Value Energy Equipment & Services (concluded) Grant Prideco, Inc. Series B, 6.125%, 8/15/15 $ 40 $ 40,621 SemGroup LP, 8.75%, 11/15/15 (b) 220 213,400 373,909 Health Care Equipment & Supplies—0.4% ReAble Therapeutics Finance LLC, 10.875%, 11/15/14 (b) 1,500 1,500,000 Health Care Providers & Services—0.1% Tenet Healthcare Corp., 6.50%, 6/01/12 250 235,625 Hotels, Restaurants & Leisure—0.1% American Real Estate Partners LP, 7.125%, 2/15/13 140 127,050 Greektown Holdings, LLC, 10.75%, 12/01/13 (b)(d)(e) 122 90,280 Universal City Florida Holding Co. I, 7.623%, 5/01/10 (a) 80 77,200 Wynn Las Vegas LLC, 6.625%, 12/01/14 20 18,300 312,830 Household Durables—0.0% Berkline/BenchCraft, LLC, 4.50%, 11/03/12 (c)(d)(e)(f) 400 — Independent Power Producers & Energy Traders—0.0% AES Ironwood LLC, 8.875%, 11/30/25 86 89,598 Machinery—0.1% Sunstate Equipment Co. LLC, 10.50%, 4/01/13 (b) 210 165,900 Synventive Molding Solutions Sub-Series A, 14%, 1/14/11 800 360,000 525,900 Media—1.0% Affinion Group, Inc., 10.125%, 10/15/13 50 50,125 Cablevision Systems Corp. Series B, 7.133%, 4/01/09 (a) 100 100,000 Charter Communications: Holdings I, LLC, 11%, 10/01/15 445 329,856 Holdings II, LLC, 10.25%, 9/15/10 625 604,575 EchoStar DBS Corp.,: 6.375%, 10/01/11 135 130,275 7%, 10/01/13 158 150,495 7.125%, 2/01/16 230 212,175 Nielsen Finance LLC, 10%, 8/01/14 410 413,075 R.H. Donnelley Corp., 8.875%, 10/15/17 (b) 16 9,520 R.H. Donnelley, Inc., 11.75%, 5/15/15 (b) 575 517,095 Rainbow National Services LLC, 8.75%, 9/01/12 (b) 750 761,250 Windstream Regatta Holdings, Inc., 11%, 12/01/17 (b) 977 674,130 3,952,571 Metals & Mining—0.3% AK Steel Corp., 7.75%, 6/15/12 495 496,238 Foundation PA Coal Co., 7.25%, 8/01/14 505 505,000 Freeport-McMoRan Copper & Gold, Inc., 5.883%, 4/01/15 (a) 250 252,465 1,253,703 Oil, Gas & Consumable Fuels—7.9% Chaparral Energy, Inc., 8.50%, 12/01/15 135 117,112 Morgan Stanley Bank AG for OAO Gazprom, 9.625%, 3/01/13 14,430 15,931,442 Pemex Project Funding Master Trust,: 9.375%, 12/02/08 404 413,090 6.058%, 10/15/09 (g) 12,700 12,750,800 SandRidge Energy, Inc., 6.416%, 4/01/14 (a)(b) 1,400 1,373,887 Whiting Petroleum Corp., 7.25%, 5/01/13 300 297,750 30,884,081 Paper & Forest Products—1.4% Abitibi-Consolidated, Inc., 6.276%, 6/15/11 (a) 1,000 490,000 Portfolio Abbreviations To simplify the listings of portfolio holdings in the Schedules of Investments, the names and descriptions of many of the securities have been abbreviated according to the list on the right. CORTS Corporate Backed Trust Securities EUR Euro GBP British Pound MXN Mexican Peso PPLUS Preferred Plus REIT Real Estate Investment Trust SATURNS Structured Asset Trust Unit Repackagings See Notes to Financial Statements. 8 SEMI-ANNUAL REPORT JUNE 30, 2008 Schedule of Investments (continued) BlackRock Global Floating Rate Income Trust (BGT) (Percentages shown are based on Net Assets) Corporate Bonds Par Value Paper & Forest Products (concluded) Ainsworth Lumber Co. Ltd.: 6.551%, 10/01/10 (a) $ 900 $ 414,000 7.25%, 10/01/12 100 46,000 Bowater, Inc., 5.776%, 3/15/10 (a) 2,040 1,723,800 Domtar Corp., 7.125%, 8/15/15 20 19,050 NewPage Corp. 9.123%, 5/01/12 (a) 1,500 1,507,500 Verso Paper Holdings LLC, Series B, 6.623%, 8/01/14 (a) 1,215 1,117,800 5,318,150 Pharmaceuticals—0.4% Angiotech Pharmaceuticals, Inc., 6.432%, 12/01/13 (a) 1,750 1,522,500 Real Estate Management & Development—1.3% Rouse Co. LP, 5.375%, 11/26/13 6,350 5,070,640 Road & Rail—0.0% Avis Budget Car Rental LLC, 5.176%, 5/15/14 (a) 150 116,250 Semiconductors & Semiconductor Equipment—0.0% Freescale Semiconductor, Inc.: 8.875%, 12/15/14 60 48,750 9.125%, 12/15/14 (c) 75 58,312 107,062 Specialty Retail—0.3% AutoNation, Inc.: 4.713%, 4/15/13 (a) 70 59,150 7%, 4/15/14 60 53,400 General Nutrition Centers, Inc., 7.199%, 3/15/14 (a)(c) 500 416,936 Lazy Days’ R.V. Center, Inc., 11.75%, 5/15/12 380 262,200 Michaels Stores, Inc., 10%, 11/01/14 210 181,912 973,598 Tobacco—0.5% Reynolds American, Inc., 7.625%, 6/01/16 2,000 2,083,626 Wireless Telecommunication Services—1.3% Centennial Communications Corp., 8.541%, 1/01/13 (a) 1,250 1,206,250 iPCS, Inc., 4.998%, 5/01/13 (a) 1,755 1,579,500 Nordic Telephone Co. Holdings ApS, 10.107%, 5/01/16 (g) EUR 1,500 2,326,259 5,112,009 Total Corporate Bonds—19.4% 75,625,332 Foreign Government Obligations Brazilian Government International Bond: 8.551%, 6/29/09 $ 9,435 9,953,925 10.25%, 6/17/13 475 581,163 Colombia Government International Bond, 8.541%,3/17/13 (a)(g) 1,200 1,272,000 Costa Rica Government International Bond, 9.335%, 5/15/09 (g) 3,200 3,323,200 Islamic Republic of Pakistan, 6.75%, 2/19/09 (g) 1,600 1,566,486 Malaysia Government International Bond, 8.75%, 6/01/09 800 834,206 Mexican Bonos Series M, 9%, 12/22/11 MXN 13,520 1,328,521 Republic of Venezuela, 6.18%, 4/20/11 (a)(g) $ 4,000 3,588,000 South Africa Government International Bond, 7.375%, 4/25/12 2,400 2,532,000 Turkey Government International Bond, 7%, 9/26/16 2,735 2,618,762 Ukraine Government International Bond: 6.391%, 8/05/09 (a)(b) 16,100 16,180,500 6.875%, 3/04/11 (b) 2,800 2,744,000 Uruguay Government International Bond, 6.875%, 1/19/16 EUR 950 1,491,994 Total Foreign Government Obligations—12.3% 48,014,757 Floating Rate Loan Interests Par Value Aerospace & Defense—1.5% DynCorp Term Loan C, 4.625%, 6/28/12 $ 870 $ 831,421 Hawker Beechcraft Acquisition Co. LLC: Letter of Credit, 2.596%, 3/31/14 187 175,990 Term Loan B, 4.801%, 3/31/14 3,215 3,012,368 IAP Worldwide Services, Inc. First Lien Term Loan, 9.00%, 12/20/12 1,042 841,971 Wesco Aircraft Hardware Corp. First Lien Term Loan, 4.95%, 9/25/13 972 941,502 5,803,252 Airlines—0.5% US Airways Group, Inc. Term Loan B, 4.883%, 3/22/14 1,980 1,294,920 United Air Lines, Inc. Term Loan B, 4.31%—4.938%, 1/30/14 718 532,764 1,827,684 Auto Components—2.8% Allison Transmission Term Loan B, 5.23%—5.74%, 8/07/14 5,982 5,325,625 Dana Corp. Term Loan B, 6.75%, 1/31/15 2,522 2,299,903 Delphi Automotive Systems: Delay Draw Term Loan, 8.50%, 12/31/08 184 172,226 Term Loan, 8.50%, 12/31/08 1,407 1,311,387 GPX International Tire Corp. Term Loan B, 9.72%—11.00%, 4/06/12 896 627,232 Mark IV Industries First Lien Term Loan, 7.14%—8.26%, 6/01/11 863 630,070 Metaldyne Corp.: Letter of Credit, 3.146%—6.50%, 1/15/12 103 67,760 Term Loan B, 6.563%, 1/15/14 706 460,765 10,894,968 Beverages—0.3% Culligan International Second Lien Term Loan, 9.214%—9.615%, 4/24/13 EUR 1,000 787,228 Le-Nature’s, Inc. Term Loan B, 9.50%, 12/28/12 (d)(e) $ 1,000 570,000 1,357,228 Biotechnology—0.2% Talecris Biotherapeutics, Inc. First Lien Term Loan, 6.18%, 11/13/14 965 883,067 Building Products—2.5% Armstrong World Term Loan B, 4.233%, 10/02/13 194 187,955 Building Material Corp. of America First Lien Term Loan, 5.688%, 2/22/14 2,462 2,177,056 Custom Building Products Second Lien Term Loan, 7.801%, 4/29/12 1,500 1,200,000 Lafarge Roofing SA: Term Loan B, 4.506%, 5/01/15 230 155,104 Term Loan B, 6.856%, 5/01/15 EUR 845 888,717 Term Loan C, 4.756%, 5/01/16 $ 230 155,104 Term Loan C, 7.106%, 5/01/16 EUR 842 885,562 Masonite International: Term Loan, 4.63%—4.92%, 4/06/13 $ 241 223,041 Term Loan B, 4.63%—5.046%, 4/06/13 242 223,421 Momentive Performance Materials, Inc., Term Loan B, 4.689%, 12/04/13 2,473 2,258,446 United Subcontractors Inc. First Lien Term Loan, 7.25%—7.566%, 12/27/12 2,265 1,325,484 9,679,890 Capital Markets—0.1% Marsico Parent Company, LLC Term Loan B, 5.50%—7.25%, 11/14/14 497 417,900 Chemicals—9.4% Brenntag AG: Second Lien Term Loan, 5.794%, 1/19/13 392 365,236 Second Lien Term Loan, 7.794%, 7/17/15 1,000 802,500 Term Loan B, 6.793%, 11/24/37 EUR 500 738,223 Term Loan B2, 5.794%, 1/24/13 $ 1,607 1,494,764 See Notes to Financial Statements. SEMI-ANNUAL REPORT JUNE 30, 2008 9 Schedule of Investments (continued) BlackRock Global Floating Rate Income Trust (BGT) (Percentages shown are based on Net Assets) Floating Rate Loan Interests Par Value Chemicals (concluded) British Vita Plc Mezzanine, 10.205%, 7/22/13 EUR 1,945 $ 2,312,636 Cognis Deutschland: Term Loan A, 6.961%, 11/17/13 803 1,153,431 Term Loan B, 6.961%, 11/16/13 196 282,473 Flint Group Term Loan, 4.88%, 12/20/14 $ 1,000 868,333 Huish Detergents, Inc. First Lien Term Loan, 4.81%, 4/15/14 1,250 1,125,000 Ineos Group Plc: Term Loan A, 4.664%—4.635%, 2/20/13 1,523 1,378,605 Term Loan B, 4.885%, 2/20/15 1,715 1,543,500 Term Loan C, 5.385%, 2/20/14 1,715 1,543,500 Innophos Holdings, Inc. Term Loan B, 4.81%, 8/13/10 2,318 2,271,818 Invista: Term Loan, 4.301%, 4/29/11 1,227 1,172,233 Term Loan B1, 4.301%, 4/29/11 2,315 2,211,450 Lucite International Finance Plc, 13.805%, 7/03/14 (c) EUR 1,067 1,075,646 MacDermid, Inc. Term Loan C, 7.204%, 12/15/13 1,796 2,545,267 Nalco Co. Tranche B Term Loan, 4.23%—4.92%, 11/04/10 $ 1,629 1,608,472 PQ Corp.: First Lien Term Loan, 6.15%, 5/29/15 2,000 1,877,500 Second Lien Term Loan, 9.40%, 5/29/16 2,250 1,957,500 Rockwood Specialties Group, Inc. Tranche D Term Loan, 4.399%, 12/10/12 2,775 2,668,812 Viridian Group Plc Term Loan: 9.766%, 4/20/12 EUR 1,787 2,511,532 8.744%, 12/21/12 GBP 1,800 3,137,138 36,645,569 Commercial Services & Supplies—3.7% Aramark Corp.: Letter of Credit, 5.198%, 1/30/14 $ 184 174,127 Term Loan B, 4.571%, 1/30/14 2,907 2,740,875 Brickman Group, Inc. Term Loan, 4.801%, 1/30/14 1,036 959,109 EnviroSolutions Term Loan B, 8.25%, 7/01/12 2,000 1,790,000 Euramax International Plc Second Lien Term Loan, 10.978%, 6/29/13 1,214 813,571 John Maneely Co. Term Loan B, 5.966%—6.020%, 12/15/13 1,766 1,645,030 Kion GmbH: Term Loan B, 4.563%, 3/15/15 250 232,125 Term Loan C, 5.063%, 3/15/16 250 232,125 Language Line Services Term Loan B1, 6.06%, 11/14/11 605 566,376 Sirva Worldwide Tranche B Term Loan, 6.21%, 12/01/10 (d)(e) 322 144,937 Synagro Technologies, Inc.: Second Lien Term Loan, 7.44%, 10/01/14 500 355,000 Term Loan B, 4.69%—4.70%, 3/31/14 1,496 1,292,361 Thermo Fluids, Inc. Term Loan, 5.88%—6.39%, 6/27/13 1,192 834,694 West Corp. Term Loan, 4.858%—5.295%, 10/31/13 2,955 2,701,801 14,482,131 Communications Equipment—1.3% Alltel Corp.: Term Loan B2, 5.55%, 5/16/15 1,492 1,481,661 Term Loan B3, 5.564%, 5/18/15 3,482 3,457,208 4,938,869 Computers & Peripherals—1.3% Intergraph Corp. Term Loan: 4.646%, 5/15/14 1,168 1,119,021 8.646%, 11/15/14 750 723,750 Reynolds and Reynolds Co. First Lien Term Loan, 4.383%, 10/31/12 3,627 3,446,387 5,289,158 Floating Rate Loan Interests Par Value Construction & Engineering—0.9% Brand Energy & Infrastructure Services, Inc.: Letter of Credit, 2.688%, 2/15/14 $ 500 $ 456,875 Term Loan B, 5.00%—5.188%, 2/15/14 992 907,181 Term Loan B, 8.688%—8.938%, 2/15/15 500 445,625 Grupo Ferrovial SA (BAA) Second Lien Term Loan, 9.935%, 4/07/11 GBP 982 1,713,596 3,523,277 Construction Materials—0.3% Headwaters, Inc. Term Loan B-1, 4.49%, 4/30/11 $ 1,312 1,253,437 Containers & Packaging—3.7% Atlantis Plastics Second Lien Term Loan, 12.25%, 3/22/12 (d)(e) 500 125,000 Consolidated Container Co. LLC Second Lien Term Loan, 7.983%—8.399%, 10/15/14 550 250,250 Graham Packaging Co. LP Term Loan B, 4.875%—5.00%, 4/15/11 3,139 3,006,139 Graphic Packaging International Corp. Term Loan B, 5.542%, 5/16/14 1,990 1,917,449 Mivisa Envases SAU Term Loan B, 7.376%, 6/03/15 EUR 1,000 1,376,665 Owens-Illinois, Inc. Term Loan D, 5.972%, 6/14/13 1,915 2,743,726 Pregis Corp. Term Loan B, 7.454%, 9/30/12 486 689,021 SCA Packaging Second Lien Term Loan, 8.18%, 3/07/15 $ 500 150,000 Smurfit Kappa Group: Term Loan B1, 6.349%—6.836%, 7/16/14 EUR 750 1,097,915 Term Loan C1, 6.599%—7.086%, 7/16/15 750 1,097,915 Smurfit-Stone Container Corp. Term Loan B, 4.50%, 11/01/11 $ 140 135,686 Solo Cup Co. Term Loan, 5.96%—6.59%, 2/27/11 (b) 1,810 1,771,101 14,360,867 Distributors—0.3% Keystone Automotive Operations, Inc. Term Loan B, 5.95%—6.399%, 1/15/12 1,672 1,329,693 Diversified Consumer Services—0.7% Coinmach Laundry Corp. Term Loan B, 5.70%—7.00%, 11/15/14 3,000 2,760,000 Diversified Financial Services—1.0% JG Wentworth Manufacturing Term Loan B, 4.921%, 4/15/14 3,800 3,135,000 Professional Services Term Loan, 5.14%, 10/31/12 752 676,849 3,811,849 Diversified Telecommunication Services—6.5% Cavalier Telephone Term Loan B, 10.50%, 12/15/12 388 318,262 Country Road Communications Second Lien Term Loan, 10.24%, 7/15/13 500 485,000 Eircom Group Plc: Second Lien Term Loan, 8.981%, 2/14/16 EUR 1,000 1,413,468 Term Loan B, 6.606%, 8/14/14 3,000 4,400,743 Term Loan C, 6.856%, 8/14/13 3,000 4,404,994 Iowa Telecom Term Loan B, 4.43%—4.54%, 11/23/11 $ 2,000 1,930,000 TDC A/S ex-Tele Danmark AS: Term Loan, 6.59%, 4/06/15 EUR 1,091 1,671,217 Term Loan B, 6.34%, 4/06/14 911 1,395,810 Time Warner Telecom Term Loan B, 4.49%, 2/23/14 $ 1,484 1,419,995 Wind Telecomunicazione SpA: Term Loan A, 6.225%—6.645%, 9/22/12 EUR 1,307 1,952,391 Term Loan B, 7.17%, 9/22/13 2,000 3,039,749 Term Loan C, 7.744%, 9/22/14 2,000 3,039,749 25,471,378 Electric Utilities—0.3% Astoria Generating Company Acquisitions, LLC First Lien Term Loan, 4.43%, 2/23/13 $ 444 427,522 TPF Generation Holdings LLC: First Lien Term Loan, 4.801%, 11/28/13 742 715,592 Letter of Credit, 2.596%, 11/28/13 150 144,991 See Notes to Financial Statements. 10 SEMI-ANNUAL REPORT JUNE 30, 2008 Schedule of Investments (continued) BlackRock Global Floating Rate Income Trust (BGT) (Percentages shown are based on Net Assets) Floating Rate Loan Interests Par Value Electric Utilities (concluded) Revolving Credit, 2.596%, 11/28/13 $ 47 $ 45,452 1,333,557 Electrical Equipment—0.4% Electrical Components International Holdings Second Lien Term Loan, 9.46%, 5/05/14 500 225,000 Generac Power Systems, Inc. First Lien Term Loan, 5.184%, 11/15/13 1,479 1,226,693 1,451,693 Electronic Equipment & Instruments—1.6% Deutsch Connectors Second Lien Term Loan, 7.384%, 1/27/16 500 415,000 Flextronics International Ltd.: Delay Draw Term Loan, 7.455%, 10/01/14 223 203,218 Delay Draw Term Loan, 4.963%, 10/05/14 549 500,449 Term Loan B, 4.95%, 10/01/14 1,931 1,757,747 Term Loan B2, 6.50%, 10/01/14 774 704,667 SafeNet, Inc. Second Lien Term Loan, 8.96%, 5/11/15 2,000 1,660,000 Tinnerman Palnut Second Lien Term Loan, 11.85%, 11/01/11 2,119 1,059,771 6,300,852 Energy Equipment & Services—1.1% Dresser, Inc.: First Lien Term Loan, 4.983%, 5/15/14 974 935,446 Second Lien Term Loan, 8.469%, 5/15/15 1,500 1,442,812 MEG Energy Corp. Term Loan B, 4.80%, 4/03/13 488 466,451 Trinidad Energy Services Term Loan, 4.959%, 4/15/11 1,467 1,379,450 4,224,159 Food & Staples Retailing—4.0% Advantage Sales & Marketing Term Loan B, 4.48%—4.70%, 4/15/13 973 911,594 Alliance Boots Plc Term Loan B, 7.087%, 7/09/15 GBP 2,500 4,531,421 Bolthouse Farms, Inc.: First Lien Term Loan, 5.00%, 11/29/12 $ 977 945,731 Second Lien Term Loan, 8.301%, 11/29/12 500 471,875 DS Waters LP Term Loan B, 6.459%, 3/31/12 1,000 930,000 Dole Food Co., Inc.: Letter of Credit, 2.58%, 4/12/13 138 128,731 Term Loan B, 4.75%—6.25%, 4/12/13 305 283,129 Term Loan C, 4.875%—6.25%, 4/04/13 1,017 943,762 IGLO Birds Eye: Mezzanine, 13.951%, 11/02/15 GBP 382 698,123 Term Loan B, 7.018%, 10/27/19 EUR 500 758,145 Term Loan C, 7.393%, 10/27/15 488 741,031 McJunkin Corp. Term Loan B, 6.051%, 1/30/14 $ 985 965,711 Roundy’s, Inc. Term Loan B, 5.23%, 10/22/11 1,369 1,311,691 Sturm Foods, Inc.: First Lien Term Loan, 5.438%, 1/30/14 (c) 1,855 1,567,639 Second Lien Term Loan, 8.938%, 6/30/14 750 455,000 15,643,583 Food Products—2.7% Fresh Start Bakeries: First Lien Term Loan, 4.938%, 9/29/13 496 451,587 Second Lien Term Loan, 8.438%, 3/29/14 500 430,000 Jetro Holdings, Inc. Term Loan, 5.05%, 5/11/14 1,453 1,358,672 OSI Industries Term Loan B, 4.671%—4.801%, 9/02/11 3,358 3,308,691 United Biscuits Finance Plc Term Loan B: 6.829%, 12/14/14 EUR 534 768,562 7.962%, 1/23/15 GBP 1,651 2,959,895 Weetabix Food Co. Term Loan, 13.968%, 7/26/14 (c) 612 1,079,275 10,356,682 Floating Rate Loan Interests Par Value Gaming—0.1% Golden Nugget, Inc., Delay Draw Term Loan, 4.47%, 6/30/13 $ 272 $ 248,182 Health Care Equipment & Supplies—3.7% Arizant, Inc. Term Loan B, 5.178%, 7/14/10 2,840 2,755,064 Bausch & Lomb, Inc.: Delay Draw Term Loan, 6.051%, 4/26/15 300 293,994 Term Loan B, 6.051%, 4/26/15 1,196 1,170,097 Biomet, Inc. Term Loan B: 5.801%, 12/28/14 497 486,714 7.954%, 3/25/15 EUR 2,553 3,899,866 Molnlycke HealthCare AB: Second Lien Term Loan, 8.214%, 10/09/16 500 629,782 Term Loan B, 6.374%, 4/09/15 1,500 2,150,608 Term Loan C, 6.726%, 4/09/16 1,382 1,982,300 Select Medical Term Loan B, 4.63%—6.25%, 2/24/12 $ 965 893,933 14,262,358 Health Care Providers & Services—3.6% CCS Medical First Lien Term Loan, 5.93%, 10/31/12 718 607,416 Capio AB Term Loan C, 7.212%, 4/15/16 EUR 1,500 2,267,217 Community Health Systems, Inc.: Delay Draw Term Loan, 0.50%, 6/18/14 $ 233 220,166 Term Loan B, 4.733%—4.899%, 6/18/14 4,573 4,304,892 HealthSouth Corp. Term Loan B, 5.29%, 3/12/14 2,402 2,265,863 National Renal Institutes Term Loan B, 5.051%, 4/07/13 465 402,503 Surgical Care Affiliates Term Loan B, 5.051%, 12/26/14 497 430,327 US Oncology Holdings, Inc. Term Loan B, 5.446%—5.649%, 8/20/11 2,746 2,633,173 Vanguard Health Systems Term Loan B, 5.051%, 9/23/11 972 935,144 14,066,701 Hotels, Restaurants & Leisure—4.0% Golden Nugget, Inc.: Term Loan, 4.49%, 5/30/14 477 434,318 Term Loan Second Lien, 5.74%, 11/30/14 1,000 690,000 Green Valley Ranch Gaming LLC Term Loan,: 4.644%—4.671%, 1/29/12 475 403,837 5.894%, 8/30/14 1,500 945,000 Harrah’s Entertainment, Inc.: Term Loan B2, 5.801%—5.906%, 1/29/15 5,386 4,911,443 Term Loan B3, 5.801%—5.906%, 1/29/15 908 828,459 Harrah’s Operating Term Loan B, 5.801%, 1/31/15 316 289,458 OSI Restaurant Partners, Inc.: Revolving Credit, 2.596%, 5/15/14 39 33,370 Term Loan B, 5.125%, 5/15/14 403 344,551 Penn National Gaming, Inc. Term Loan B, 4.23%, 10/03/12 2,500 2,415,625 QCE LLC Second Lien Term Loan, 8.551%, 11/05/13 2,500 2,068,750 Travelport, Inc. Standby Letter of Credit, 4.946%, 8/31/13 46 42,001 Universal City Development Term Loan B, 4.21%—4.47%, 6/09/11 925 897,691 Wembley, Inc.: First Lien Term Loan, 6.63%—7.19%, 8/12/12 972 632,432 Second Lien Term Loan, 6.93%—7.19%, 2/12/13 1,500 487,500 15,424,435 Household Durables—0.8% American Residential Services Second Lien Term Loan, 12%, 4/17/15 (f) 2,000 1,971,658 Berkline Corp. First Lien Term Loan, 8.488%, 11/10/11 (f) 94 4,735 Josten’s, Inc. Term Loan B, 5.171%, 10/04/11 1,300 1,277,368 3,253,761 Household Products—0.3% VJCS Acquisition Term Loan B, 4.788%—5.23%, 4/30/14 1,100 1,003,750 See Notes to Financial Statements. SEMI-ANNUAL REPORT JUNE 30, 2008 11 Schedule of Investments (continued) BlackRock Global Floating Rate Income Trust (BGT) (Percentages shown are based on Net Assets) Floating Rate Loan Interests Par Value IT Services—3.0% Activant Solutions Term Loan B, 4.688%—4.75%, 5/02/13 $ 465 $ 411,340 Affiliated Computer Services Term Loan B, 4.483%, 3/20/13 731 707,254 Audio Visual Services Corp. Second Lien Term Loan, 8.20%, 9/15/14 1,000 890,000 Ceridian Corp. Term Loan, 5.48%, 11/07/14 2,000 1,865,000 First Data Corp.: Term Loan B, 5.231%—5.552%, 9/24/14 2,484 2,277,804 Term Loan B2, 5.552%, 9/24/14 500 458,500 Term Loan B3, 5.551%, 9/24/14 997 915,611 RedPrairie Corp. Term Loan: 5.688%, 7/31/12 980 921,200 9.27%, 1/31/13 1,250 1,075,000 SunGard Data Systems, Inc. Term Loan B, 4.508%, 2/28/14 2,425 2,293,066 11,814,775 Independent Power Producers & Energy Traders—3.4% The AES Corp. Term Loan, 7.00%—7.19%, 8/10/11 1,500 1,477,500 Mirant Corp. Term Loan B, 4.131%, 1/26/13 1,348 1,299,942 TXU Corp.: Term Loan B-1, 5.948%—6.30%, 10/10/14 498 461,160 Term Loan B-2, 5.948%—6.478%, 10/14/29 1,736 1,606,127 Term Loan B-3, 6.234%—6.478%, 10/10/14 8,942 8,263,410 13,108,139 Industrial Conglomerates—0.1% Trimas Corp.: Letter of Credit, 2.553%, 8/02/11 93 88,359 Term Loan B, 5.157%, 8/02/13 399 376,190 464,549 Insurance—0.7% Alliant Insurance Services Term Loan B, 5.801%, 10/23/14 992 932,950 Conseco Term Loan B, 4.483%, 10/10/13 736 639,250 Sedgwick Claims Management Service, Inc. Term Loan B, 4.946%, 3/03/13 1,069 1,021,832 2,594,032 Internet & Catalog Retail—0.4% FTD Flowers Term Loan, 4.233%, 7/28/13 406 390,433 Oriental Trading: First Lien Term Loan, 4.74%—4.90%, 7/31/13 955 790,767 Second Lien Term Loan, 8.39%, 1/31/14 500 358,334 1,539,534 Leisure Equipment & Products—0.8% 24 Hour Fitness Term Loan B, 4.99%—7.22%, 6/08/12 977 918,850 Kerasotes Showplace Theatres LLC Term Loan B, 4.688%, 11/01/11 555 533,263 True Temper Sports, Inc. Term Loan B, 4.631%, 3/15/11 233 218,274 Wallace Theater Corp. First Lien Term Loan, 6.56%, 8/09/09 1,631 1,501,434 3,171,821 Life Sciences Tools & Services—0.2% Quintiles Transnational Term Loan B, 4.81%, 3/21/13 977 942,066 Machinery—3.4% Blount, Inc. US Term Loan B, 4.209%, 8/09/10 597 573,484 Chart Industries, Inc. Term Loan B, 4.483%—4.50%, 10/17/12 222 215,555 Invensys Plc: Term Loan, 7.909%, 12/09/10 GBP 451 889,450 Term Loan A, 4.71%, 12/15/10 $ 952 943,412 Lincoln Industrials: Delay Draw Term Loan, 5.40%, 7/11/14 270 253,800 First Lien Term Loan, 5.40%, 7/11/14 720 676,800 Floating Rate Loan Interests Par Value Machinery (concluded) NACCO Materials Handling Group Term Loan B, 4.483%, 3/21/13 $ 490 $ 436,100 Navistar International Transportation Corp.: Revolving Credit, 2.45%—6.149%, 6/30/12 1,333 1,258,333 Term Loan, 6.149%—6.292%, 6/30/12 3,666 3,460,417 OshKosh Truck Corp. Term Loan B, 4.20%—4.43%, 11/30/13 2,443 2,286,942 Standard Steel: Delay Draw Term Loan, 4.89%—4.99%, 6/21/12 82 74,063 First Lien Term Loan, 5.31%—6.75%, 6/21/12 408 367,500 Stolle Machinery First Lien Term Loan, 5.50%, 9/14/12 982 923,550 Wastequip: Delay Draw Term Loan, 5.051%, 1/17/13 287 234,602 Term Loan B, 5.051%, 1/17/13 683 557,179 13,151,187 Marine—1.2% Dockwise Shipping BV: Second Lien Term Loan, 7.196%, 10/26/16 1,650 1,435,500 Term Loan B, 5.071%—5.571%, 4/26/15 1,733 1,622,217 Term Loan C, 5.571%—5.676%, 4/26/16 1,733 1,622,217 4,679,934 Media—30.4% Acosta, Inc. Term Loan, 4.74%, 2/28/14 1,473 1,390,851 Affinion Group, Inc., Term Loan, 9.267%, 3/01/12 975 812,906 Alix Partners Term Loan B, 4.71%, 10/30/13 931 894,210 Atlantic Broadband Finance Term Loan B, 5.06%, 2/27/14 1,960 1,888,317 Bresnan Telecommunications Second Lien Term Loan, 7.37%—7.52%, 3/31/14 250 230,000 Cablevision Systems Corp., Term Loan, 4.225%, 3/28/13 4,407 4,180,216 Casema NV (Essent Kablecom): Term Loan B, 6.967%, 11/02/14 EUR 1,625 2,455,693 Term Loan C, 7.467%, 11/02/15 1,625 2,455,693 Catalina Marketing Group Term Loan, 5.801%, 10/01/14 $ 2,489 2,331,239 Cequel Communications LLC Term Loan B, 4.728%—6.00%, 11/05/13 6,912 6,464,916 Charter Communications, Inc. Term Loan B, 4.90%, 4/30/14 4,970 4,354,407 Choice Cable Second Lien Term Loan, 10.25%, 1/28/12 692 553,846 Cinemark Term Loan, 4.43%—5.75%, 10/05/13 1,105 1,050,738 ClientLogic Holding Corp. Term Loan B, 4.88%—6.50%, 1/30/14 1,451 1,132,483 Cumulus Media Term Loan B, 4.131%—4.233%, 5/21/14 1,472 1,301,460 Dex Media West Term Loan B2, 7%, 10/22/14 2,000 1,943,750 DirecTV Holdings LLC Term Loan C, 5.25%, 4/13/13 1,700 1,687,675 Discovery Communications Term Loan B, 4.696%, 5/15/13 1,989 1,943,290 Education Media and Publishing: First Lien Term Loan B, 6.475%, 11/14/14 2,636 2,412,273 Second Lien Term Loan, 11.975%, 11/14/14 6,916 5,740,362 Emmis Operating Co. Term Loan B, 4.671%, 11/02/13 480 422,269 Formula One Group Term Loan B, 7.093%, 12/31/13 964 916,071 GateHouse Media Operating, Inc.: Delay Draw Term Loan, 4.65%—4.72%, 9/15/14 591 415,153 Term Loan B, 4.65%, 9/15/14 1,385 972,419 Gray Communications Systems, Inc. Term Loan B, 4.19%, 9/18/14 2,241 1,994,530 HIT Entertainment Ltd.: First Lien Term Loan, 4.79%, 8/31/12 1,098 977,265 Second Lien Term Loan, 8.29%, 2/24/13 1,000 830,000 Hanley-Wood LLC Term Loan B, 4.938%—4.96%, 3/07/14 1,990 1,549,712 See Notes to Financial Statements. 12 SEMI-ANNUAL REPORT JUNE 30, 2008 Schedule of Investments (continued) BlackRock Global Floating Rate Income Trust (BGT) (Percentages shown are based on Net Assets) Floating Rate Loan Interests Par Value Media (concluded) Hargray Communications Group: First Lien Term Loan, 4.946%, 6/18/14 $ 1,000 $ 912,500 Second Lien Term Loan, 8.196%, 6/18/14 500 420,000 Idearc, Inc. Term Loan B, 4.39%—4.80%, 11/15/14 1,712 1,365,018 Insight Midwest Holdings LLC Term Loan B, 4.69%, 4/06/14 2,700 2,589,014 Kabel Deutschland GmbH Term Loan, 6.14%, 6/01/12 EUR 4,000 5,825,487 Liberty Cablevision of Puerto Rico Term Loan B, 4.776%, 3/01/13 $ 1,485 1,291,950 Local TV LLC Term Loan, 4.80%, 5/15/13 750 650,625 Mediacom Broadband Group Tranche A Term Loan, 3.95%—3.99%, 3/31/10 1,057 1,014,788 Mediacom Communications Term Loan D, 4.20%—4.24%, 1/31/15 1,477 1,351,912 Mediacom LLC Term Loan C, 4.20%—4.24%, 1/31/15 2,442 2,233,681 Metro-Goldwyn-Mayer Studios, Inc. Term Loan B, 6.051%, 4/30/11 2,932 2,394,178 Multicultural Radio Broadcasting Inc. Term Loan, 5.42%—6.75%, 12/15/12 349 315,845 NTL Cable Plc: Second Lien Term Loan, 8.267%, 7/17/13 GBP 1,500 2,690,843 Term Loan, 7.657%, 11/19/37 2,029 3,716,862 National Cinemedia LLC Term Loan B, 4.54%, 2/28/15 $ 1,000 913,393 New Vision Television: First Lien Term Loan, 9.19%, 10/26/14 1,500 1,170,000 Term Loan B, 5.69%, 10/21/13 825 743,065 Term Loan B, 5.69%, 10/21/13 169 152,424 New Wave Communications: Delay Draw Term Loan, 5.88%—8.00%, 6/30/13 236 216,530 Term Loan B, 5.983%, 6/30/13 931 875,140 Nexstar Broadcasting Group: Term Loan, 4.446%, 10/01/12 1,892 1,759,935 Term Loan B, 4.649%, 10/01/12 1,791 1,665,779 Nielsen Finance LLC Term Loan B, 4.734%, 8/15/13 3,936 3,664,219 PagesJaunes Group: Term Loan, 8.722%, 1/11/17 EUR 500 649,463 Term Loan B, 6.722%, 1/11/15 968 1,276,793 Term Loan C, 7.222%, 1/11/16 968 1,276,793 Penton Media Term Loan: 4.733%—5.149%, 2/15/13 $ 1,110 927,633 7.899%, 2/15/14 1,000 715,000 ProSiebenSat 1 Media AG: Term Loan B, 6.77%—7.075%, 6/28/15 EUR 500 571,302 Term Loan C, 6.77%—7.02%, 6/28/15 1,000 1,142,605 Quebecor Media, Inc. Term Loan B, 4.713%, 1/17/13 $ 733 707,466 San Juan Cable Term Loan B, 9.47%, 3/15/13 1,687 1,497,560 Thomson Learning Inc.: Term Loan, 4.88%—4.98%, 6/30/14 1,985 1,797,418 Term Loan B2, 6.42%, 7/05/14 3,750 3,731,250 United Pan Europe Communications Term Loan M, 6.437%, 11/19/37 EUR 3,766 5,367,734 Univision Communications, Inc. First Lien Term Loan, 4.631%—5.149%, 9/30/14 $ 2,202 1,805,101 Wallace Theater Corp. Second Lien Term Loan, 10.31%, 8/09/09 2,500 2,200,000 Yell Group Plc Term Loan B, 6.374%, 4/30/11 EUR 2,500 3,595,943 118,496,993 Metals & Mining—0.4% Algoma Steel Term Loan B, 4.99%, 6/14/14 $ 708 667,866 Compass Minerals Group, Inc. Term Loan, 3.99%—6.59%, 12/22/12 782 753,150 1,421,016 Multi-Utilities—1.2% Coleto Creek: Letter of Credit, 2.596%, 7/31/13 127 115,923 Term Loan B, 5.446%, 7/31/13 1,807 1,644,809 Floating Rate Loan Interests Par Value Multi-Utilities (concluded) MACH Gen LLC: Letter of Credit, 2.446%, 2/22/14 $ 70 $ 67,887 Term Loan, 4.638%, 2/22/14 670 647,062 NE Energy: Letter of Credit, 5.196%, 10/03/13 158 148,760 Second Lien Term Loan, 7.313%, 10/31/14 750 667,500 Term Loan B, 5.31%, 10/31/13 1,290 1,210,916 4,502,857 Multiline Retail—0.4% Neiman Marcus Group, Inc. Term Loan, 4.422%, 4/06/13 1,439 1,369,680 Oil, Gas & Consumable Fuels—1.5% Big West Oil & Gas: Delay Draw Term Loan, 4.483%, 5/15/14 425 396,844 Term Loan B, 4.483%, 5/15/14 440 410,850 CR Gas Storage: Bridge Loan, 4.232%, 5/08/11 28 27,708 Delay Draw Term Loan, 4.229, 5/08/13 50 48,777 Term Loan, 4.534%, 5/08/13 454 436,286 Term Loan B, 4.198%, 5/08/13 75 72,007 Coffeyville Resources LLC: Letter of Credit, 2.691%, 12/21/13 324 305,676 Term Loan B, 5.448%—7.00%, 12/21/13 1,052 991,936 Drummond Oil Term Loan B, 4%, 2/15/12 1,500 1,455,000 MAPCO, Inc. Term Loan, 5.14%—5.29%, 4/28/11 799 751,471 Western Refining Co. LP Term Loan B, 4.64%, 3/15/14 919 854,936 5,751,491 Other—1.0% Avio Holding SpA Term Loan, 8.718%, 9/25/16 1,017 932,481 Clarke American Corp. Term Loan B, 5.198%, 3/12/13 1,982 1,655,377 Jarden Corp. Term Loan B3, 5.20%—5.301%, 1/24/12 1,243 1,144,222 3,732,080 Paper & Forest Products—1.8% Boise Cascade Holdings LLC Second Lien Term Loan, 6.313%, 2/05/15 997 997,321 Cenveo, Inc.: Delay Draw Term Loan, 4.551%, 9/07/13 11 10,490 Term Loan C, 4.551%, 9/07/13 233 218,694 Georgia-Pacific Corp. First Lien Term Loan B, 4.399%—4.74%, 2/14/13 4,267 4,023,070 NewPage Corp., Term Loan B, 6.563%, 12/07/14 1,492 1,480,187 Verso Paper Holdings LLC, Term Loan B, 8.709%, 2/01/13 336 318,920 7,048,682 Personal Products—0.7% American Safety Razor Co. Second Lien Term Loan, 8.74%—8.895%, 1/25/14 1,500 1,380,000 Prestige Brands Term Loan B1, 4.733%—5.163%, 10/06/10 1,522 1,491,946 2,871,946 Pharmaceuticals—1.6% Pharmaceutical Technologies & Services (PTS) Term Loan, 6.978%, 4/15/14 EUR 2,475 3,429,165 Warner Chilcott: Term Loan B, 4.696%—4.884%, 1/18/12 $ 1,915 1,856,841 Term Loan C, 4.696%—4.884%, 1/30/13 824 799,039 6,085,045 Real Estate Management & Development—2.0% Capital Automotive REIT Term Loan B, 4.21%, 12/16/10 2,000 1,928,750 Enclave First Lien Term Loan, 6.14%, 3/01/12 2,000 1,735,154 Georgian Towers Term Loan, 6.14%, 3/01/12 2,000 1,694,494 Pivotal Promontory Second Lien Term Loan, 12%, 8/11/11 (d)(e) 750 112,500 See Notes to Financial Statements. SEMI-ANNUAL REPORT JUNE 30, 2008 13 Schedule of Investments (continued) BlackRock Global Floating Rate Income Trust (BGT) (Percentages shown are based on Net Assets) Floating Rate Loan Interests Par Value Real Estate Management & Development (concluded) Realogy Corp. Term Loan B, 5.475%, 9/22/14 $ 1,980 $ 1,677,343 Yellowstone Club Term Loan B, 4.756%, 10/15/10 735 601,813 7,750,054 Road & Rail—0.8% Rail America, Inc.: Term Loan, 4.93%, 10/05/08 1,750 1,715,000 Term Loan B, 0%, 6/23/09 1,500 1,485,000 3,200,000 Semiconductors & Semiconductor Equipment—0.2% Marvell Technology Group Term Loan B, 4.983%, 11/15/09 731 702,600 Software—0.4% Bankruptcy Management Solutions, Inc.: First Lien Term Loan, 6.49%, 7/06/12 982 901,444 Second Lien Term Loan, 8.733%, 7/06/13 491 365,981 CCC Information Services, Inc. Term Loan B, 5.06%, 2/10/13 413 403,180 1,670,605 Specialty Retail—2.3% ADESA, Inc. Term Loan B, 5.06%, 10/30/13 2,477 2,234,384 Burlington Coat Factory Warehouse Corp. Term Loan B, 4.90%, 4/15/13 516 428,764 Claire’s Stores Term Loan B, 5.399%—5.446%, 5/24/14 741 536,472 Orchard Supply Hardware Term Loan B, 4.42%, 12/21/13 1,500 1,320,000 Petco Animal Supplies, Inc. Term Loan, 4.733%—5.149%, 10/31/12 394 362,283 Rent-A-Center Term Loan B, 4.47%—7.15%, 6/30/12 1,256 1,212,467 Sensata Technologies: Term Loan, 6.847%, 4/27/13 EUR 1,470 2,088,821 Term Loan B, 4.663%, 4/27/13 $ 972 898,840 9,082,031 Telecommunications—0.1% Knology, Inc. Term Loan B, 4.934%, 3/15/12 495 465,300 Textiles, Apparel & Luxury Goods—0.4% Hanesbrands, Inc. First Lien Term Loan, 4.133%—4.657%, 10/15/13 1,000 966,250 Renfro Corp. Term Loan B, 5.79%—7.25%, 9/30/13 476 381,333 Warnaco, Inc. Term Loan, 4.114%—5.50%, 1/31/13 310 291,714 1,639,297 Trading Companies & Distributors—0.3% Beacon Sales Co. Term Loan B, 4.649%—5.75%, 10/31/13 1,228 1,040,837 Wireless Telecommunication Services—1.2% Centennial Cellular Operating Co. Term Loan, 4.801%, 2/09/11 2,169 2,113,802 IPC Systems Second Lien Term Loan, 7.946%, 5/31/15 500 350,000 NG Wireless: Delay Draw Term Loan, 0.50%, 11/12/37 140 133,356 Term Loan, 5.131%—6.75%, 7/31/14 609 579,144 NTELOS Inc. Term Loan B, 5.27%, 8/14/11 1,686 1,646,726 4,823,028 Total Floating Rate Loan Interests—119.5% 465,419,509 Common Stock Shares Value Capital Markets—0.1% E*Trade Financial Corp. (e) 121,011 $ 379,975 Total Common Stock—0.1% 379,975 Preferred Stock Capital Markets—0.0% Marsico Parent Superholdco, LLC, 16.75% (b) 100 88,000 Total Preferred Stock—0.0% 88,000 Warrant (h) Machinery—0.0% Synventive Molding Solutions (expires 1/15/13) 2 — Total Warrant—0.0% — Other Interests (i) Health Care Providers & Services—0.0% Critical Care Systems International, Inc. (f) 947 318 Household Durables—0.0% Berkline Benchcraft Equity LLC (f) 6,155 0 Total Other Interests—0.0% 318 Total Long-Term Investments (Cost—$621,053,869)—151.3% 589,527,891 Short-Term Securities Par Government Agency Note—8.9% Federal Home Loan Bank, 2.07%, 7/07/08 $ 34,700 34,688,028 Government National Bills—0.2% U.S. Treasury Bills, 1.81%, 7/17/08 600 599,519 Total Short-Term Securities (Cost—$35,287,547)—9.1% 35,287,547 Options Purchased Contracts Call Options Purchased Marsico Parent Superholdco LLC, expiring December 2019 at $942.86 26 44,850 Total Options Purchased (Cost—$25,422)—0.0% 44,850 Total Investments (Cost—$656,366,838*)—160.4% 624,860,288 Preferred Shares, at Redemption Value—(15.1)% (58,832,181 ) Liabilities in Excess of Other Assets—(45.3)% (176,507,773 ) Net Assets Applicable to Common Shareholders—100.0% $ 389,520,334 See Notes to Financial Statements. 14 SEMI-ANNUAL REPORT JUNE 30, 2008 Schedule of Investments (concluded) BlackRock Global Floating Rate Income Trust (BGT) * The cost and unrealized appreciation (depreciation) of investments as of June 30, 2008, as computed for federal income tax purposes, were as follows: Aggregate cost $ 656,434,716 Gross unrealized appreciation $ 11,958,282 Gross unrealized depreciation (43,532,710 ) Net unrealized depreciation $ (31,574,428 ) (a) Variable rate security. Rate shown is as of report date. (b) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration to qualified institutional investors. Unless otherwise indicated, these securities are considered to be liquid. (c) Represents a payment-in-kind security which may pay interest/dividends in additional face/shares. (d) Issuer filed for bankruptcy or is in default of interest payments. (e) Non-income producing security. (f) Security is fair valued. (g) Restricted securities as to resale, representing 6.4% of net assets were as follows: Issue Acquisition Date(s) Cost Value Colombia Government International Bond, 8.541%, 3/17/13 2/15/06 $ 1,311,778 $ 1,272,000 Costa Rica Government International Bond, 9.335%, 5/15/09 8/30/04 2,037,019 2,077,000 11/01/04 1,223,523 1,246,200 Islamic Republic of Pakistan, 6.75%, 2/19/09 8/27/04 1,003,034 979,054 10/27/04 602,834 587,432 Nordic Telephone Co. Holdings ApS, 10.107%, 5/01/16 4/26/06 1,867,951 2,326,259 Pemex Project Funding Master Trust, 6.058%, 10/15/09 8/27/04 4,559,005 4,518,000 10/27/04 2,734,538 2,710,800 12/15/04 5,583,800 5,522,000 Republic of Venezuela, 6.18%, 4/20/11 10/26/04 3,715,461 3,588,000 Total $ 24,638,943 $ 24,826,745 (h) Warrants entitle the Trust to purchase a predetermined number of shares of common stock and are non-income producing. The purchase price and number of shares are subject to adjustment under certain conditions until the expiration date. (i) Other interests represent beneficial interest in liquidation trusts and other reorganization entities and are non-income producing. • For Trust compliance purposes, the Trust’s industry classifications refer to any one or more of the industry sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by Trust management. This definition may not apply for purposes of this report, which may combine industry sub-classifications for reporting ease. • Forward foreign currency contracts as of June 30,2008 were as follows: Currency Purchased Currency Sold Settlement Date Unrealized EUR 21,300,000 $ 32,882,642 July 2008 $ 612,974 GBP 1,400,000 $ 2,725,915 July 2008 57,489 $ 128,976,939 EUR 81,963,132 July 2008 84,657 $ 3,158,024 GBP 1,621,000 July 2008 (64,760 ) $ 18,149,643 GBP 9,302,500 July 2008 (345,079 ) $ 1,041,616 MXN 11,028,000 July 2008 (23,982 ) Total Unrealized Appreciation on Forward Foreign Currency Contracts $ 321,299 • Swaps outstanding as of June 30, 2008 were as follows: Notional Amount (000) Unrealized Appreciation (Depreciation) Sold credit default protection on Pagesjaunes Group and receive 2.10% Broker, Lehman Brothers Special Finance Expires March 2012 EUR 2,000 $ (268,889 ) Sold credit default protection on BAA Ferovial Junior Term Loan and receive 2.0% Broker, Deutsche Bank A.G. London Expires June 2012 GBP 1,800 (209,857 ) Sold credit default protection LCDX Index receive 5.25% Broker, UBS Warburg Expires June 2013 EUR 2,012 (60,626 ) Bought credit default protection on LCDX Index and pay 3.25% Broker, UBS Warburg Expires June 2013 $ 2,250 29,012 Bought credit default protection on LCDX Index and pay 3.25% Broker, Morgan Stanley Capital Services, Inc. Expires June 2013 $ 2,000 45,788 Total $ (464,572 ) • Effective January 1, 2008, the Trust adopted Financial Accounting Standards Board Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (“FAS 157”). FAS 157 clarifies the definition of fair value, establishes a framework for measuring fair values and requires additional disclosures about the use of fair value measurements. Various inputs are used in determining the fair value of investments, which are as follows: • Level 1 - price quotations in active markets/exchanges for identical securities • Level 2 - other observable inputs (including, but not limited to: quoted prices for similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks, and default rates) or other market-corroborated inputs) • Level 3 - unobservable inputs based on the best information available in the circumstance, to the extent observable inputs are not available (including the Trust’s own assumption used in determining the fair value of investments) The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. For information about the Trust's policy regarding valuation of investments and other significant accounting policies, please refer to Note 1 of the Notes to Financial Statements. The following table summarizes the inputs used as of June 30, 2008 in determining the fair valuation of the Trust's investments: Valuation Investments in Other Level 1 $ 379,975 $ 321,299 Level 2 622,458,752 (419,722 ) Level 3 1,976,711 — Total $ 624,815,438 $ (98,423 ) * Other financial instruments are swaps, forward foreign currency contracts and options. The following is a reconciliation of investments for unobservable inputs (Level 3) were used in determining fair value: Investments in Balance, as of December 31, 2007 $ — Accrued discounts/premiums — Realized gain (loss) — Change in unrealized appreciation (depreciation) (98,204 ) Net purchases (sales) 2,074,915 Net transfers in/out of Level 3 — Balance, as of June 30, 2008 $ 1,976,711 See Notes to Financial Statements. SEMI-ANNUAL REPORT JUNE 30, 2008 15 Schedule of Investments June 30, 2008 (Unaudited) BlackRock High Income Shares (HIS) (Percentages shown are based on Net Assets) Corporate Bonds Par Value Aerospace & Defense—1.6% CHC Helicopter Corp., 7.375%, 5/01/14 $ 680 $ 705,500 DRS Technologies, Inc.: 6.875%, 11/01/13 170 170,000 7.625%, 2/01/18 170 179,775 Hawker Beechcraft Acquisitions Co. LLC, 8.875%, 4/01/15 140 141,750 Hexcel Corp., 6.75%, 2/01/15 405 393,862 L-3 Communications Corp., 5.875%, 1/15/15 140 129,150 TransDigm, Inc., 7.75%, 7/15/14 300 296,250 2,016,287 Airlines—0.2% American Airlines, Inc. Series 99-1, 7.324%, 4/15/11 280 258,300 Auto Components—2.3% Allison Transmission, Inc. (a): 11%, 11/01/15 130 116,350 11.25%, 11/01/15 (c) 745 640,700 The Goodyear Tire & Rubber Co.: 7.857%, 8/15/11 150 149,062 8.625%, 12/01/11 607 613,070 Lear Corp., 8.75%, 12/01/16 540 421,200 Meritor Automotive Inc., 6.80%, 2/15/09 22 21,642 Metaldyne Corp., 10%, 11/01/13 935 486,200 Stanadyne Corp. Series 1, 10%, 8/15/14 525 509,250 2,957,474 Automobiles—1.0% Ford Capital BV, 9.50%, 6/01/10 1,330 1,083,950 Ford Motor Co., 8.90%, 1/15/32 300 192,000 1,275,950 Building Products—1.4% CPG International I, Inc., 10.50%, 7/01/13 540 450,900 Momentive Performance Materials, Inc., 11.50%, 12/01/16 945 704,025 Ply Gem Industries, Inc., 11.75%, 6/15/13 (a) 635 582,612 1,737,537 Chemicals—3.5% American Pacific Corp., 9%, 2/01/15 400 391,000 Ames True Temper, Inc., 6.713%, 1/15/12 (b) 1,070 920,200 Chemtura Corp., 6.875%, 6/01/16 60 51,900 Hexion U.S. Finance Corp.: 7.176%, 11/15/14 (b) 275 228,250 9.75%, 11/15/14 250 226,250 Huntsman International LLC, 7.375%, 1/01/15 500 437,500 Innophos, Inc., 8.875%, 8/15/14 1,170 1,170,000 Key Plastics LLC, 11.75%, 3/15/13 (a) 205 92,250 MacDermid, Inc., 9.50%, 4/15/17 (a) 755 683,275 Terra Capital, Inc. Series B, 7%, 2/01/17 265 259,700 4,460,325 Commercial Services & Supplies—3.9% Aramark Corp., 8.50%, 2/01/15 145 142,100 Casella Waste Systems, Inc., 9.75%, 2/01/13 400 398,000 DI Finance Series B, 9.50%, 2/15/13 904 904,000 FTI Consulting, Inc., 7.75%, 10/01/16 275 281,875 PNA Intermediate Holding Corp., 9.676%, 2/15/13 (b)(c) 450 447,750 Sally Holdings LLC: 9.25%, 11/15/14 90 86,400 10.50%, 11/15/16 529 503,873 Waste Services, Inc., 9.50%, 4/15/14 800 808,000 West Corp.: 9.50%, 10/15/14 375 337,500 11%, 10/15/16 1,195 1,009,775 4,919,273 Communications Equipment—0.8% Nortel Networks Ltd.: 6.963%, 7/15/11 (b) 945 893,025 10.75%, 7/15/16 (a) 150 148,500 1,041,525 Corporate Bonds Par Value Construction Materials—1.2% Nortek Holdings, Inc., 10%, 12/01/13 (a) $ 1,580 $ 1,508,900 Containers & Packaging—5.8% Berry Plastics Holding Corp.: 6.651%, 9/15/14 (b) 375 300,000 8.875%, 9/15/14 695 601,175 Crown Americas LLC, 7.75%, 11/15/15 255 255,000 Graphic Packaging International Corp., 9.50%, 8/15/13 65 62,075 Impress Holdings BV, 5.838%, 9/15/13 (a)(b) 775 705,250 Jefferson Smurfit Corp. US, 7.50%, 6/01/13 1,000 825,000 Owens-Brockway Glass Container, Inc., 8.25%, 5/15/13 2,600 2,665,000 Pregis Corp., 12.375%, 10/15/13 1,034 1,000,395 Smurfit-Stone Container Enterprises, Inc., 8%, 3/15/17 1,140 912,000 7,325,895 Diversified Financial Services—3.1% Axcan Intermediate Holdings, Inc., 12.75%, 3/01/16 (a) 240 240,000 Ford Motor Credit Co LLC: 8.625%, 11/01/10 140 118,763 5.46%, 1/13/12 (b) 290 206,126 7.80%, 6/01/12 1,500 1,160,109 GMAC LLC: 6.875%, 8/28/12 710 486,192 4.882%, 12/01/14 (a) 560 361,404 6.75%, 12/01/14 405 267,480 8%, 11/01/31 675 439,140 Leucadia National Corp., 8.125%, 9/15/15 600 603,000 3,882,214 Diversified Telecommunication Services—5.5% Broadview Networks Holdings, Inc., 11.375%, 9/01/12 440 394,900 Cincinnati Bell, Inc., 7.25%, 7/15/13 2,085 2,032,875 Qwest Capital Funding, Inc., 7%, 8/03/09 230 229,425 Qwest Communications International, Inc., 7.50%, 2/15/14 910 864,500 Qwest Corp., 6.026%, 6/15/13 (b) 850 811,750 Wind Acquisition Finance SA, 10.75%, 12/01/15 (a) 1,100 1,155,000 Windstream Corp.: 8.125%, 8/01/13 855 852,863 8.625%, 8/01/16 645 643,388 6,984,701 Electric Utilities—1.5% Edison Mission Energy, 7.50%, 6/15/13 35 34,737 Elwood Energy LLC, 8.159%, 7/05/26 462 444,806 Homer City Funding LLC Series B, 8.734%, 10/01/26 150 160,627 NSG Holdings LLC, 7.75%, 12/15/25 (a) 565 556,525 Salton Sea Funding Corp. Series E, 8.30%, 5/30/11 619 666,775 1,863,470 Electrical Equipment—1.0% Coleman Cable, Inc., 9.875%, 10/01/12 400 376,000 Superior Essex Communications LLC, 9%, 4/15/12 830 846,600 1,222,600 Electronic Equipment & Instruments—0.8% NXP BV, 5.463%, 10/15/13 (b) 440 387,200 Sanmina-SCI Corp.: 6.75%, 3/01/13 80 71,800 8.125%, 3/01/16 645 580,500 1,039,500 Energy Equipment & Services—2.1% Compagnie Generale de Geophysique-Veritas: 7.50%, 5/15/15 135 134,662 7.75%, 5/15/17 220 220,275 Grant Prideco, Inc. Series B, 6.125%, 8/15/15 100 101,552 North American Energy Partners, Inc., 8.75%, 12/01/11 1,560 1,575,600 SemGroup LP, 8.75%, 11/15/15 (a) 615 596,550 2,628,639 See Notes to Financial Statements. 16 SEMI-ANNUAL REPORT JUNE 30, 2008 Schedule of Investments (continued) BlackRock High Income Shares (HIS) (Percentages shown are based on Net Assets) Corporate Bonds Par Value Food & Staples Retailing—0.6% Rite Aid Corp.: 8.125%, 5/01/10 $ 250 $ 252,500 7.50%, 3/01/17 680 549,100 801,600 Food Products—0.8% Del Monte Corp., 8.625%, 12/15/12 1,010 1,025,150 Gas Utilities—0.3% El Paso Natural Gas Co., 8.375%, 6/15/32 50 55,835 Targa Resources, Inc., 8.50%, 11/01/13 345 338,100 393,935 Health Care Equipment & Supplies—2.8% Biomet, Inc.: 10.375%, 10/15/17 (c) 120 127,200 11.625%, 10/15/17 120 127,200 Catalent Pharma Solutions, Inc., 9.50%, 4/15/15 610 545,950 Hologic, Inc., 2%, 12/15/37 (d) 395 333,775 ReAble Therapeutics Finance LLC, 10.875%, 11/15/14 (a) 2,400 2,400,000 3,534,125 Health Care Providers & Services—2.1% Community Health Systems, Inc. Series WI, 8.875%, 7/15/15 250 251,562 Omnicare, Inc. Series OCR, 3.25%, 12/15/35 (d) 360 269,100 Tenet Healthcare Corp.: 6.375%, 12/01/11 125 119,688 6.50%, 6/01/12 1,735 1,635,238 United Surgical Partners International, Inc., 8.875%, 5/01/17 416 386,880 2,662,468 Hotels, Restaurants & Leisure—5.0% American Real Estate Partners LP, 7.125%, 2/15/13 85 77,137 Caesars Entertainment, Inc., 7.875%, 3/15/10 500 455,000 Gaylord Entertainment Co.: 8%, 11/15/13 1,000 960,000 6.75%, 11/15/14 450 409,500 Great Canadian Gaming Corp., 7.25%, 2/15/15 (a) 1,390 1,348,300 Greektown Holdings, LLC, 10.75%, 12/01/13 (a)(e)(f) 649 480,260 Harrah’s Operating Co., Inc., 10.75%, 2/01/18 (a)(c) 1,470 1,018,568 Pinnacle Entertainment, Inc., 7.50%, 6/15/15 210 160,650 Seneca Gaming Corp. Series B, 7.25%, 5/01/12 630 590,625 Travelport LLC, 7.307%, 9/01/14 (b) 170 136,000 Tropicana Entertainment LLC Series WI, 9.625%, 12/15/14 (e)(f) 415 197,125 Virgin River Casino Corp., 9%, 1/15/12 585 415,350 Wynn Las Vegas LLC, 6.625%, 12/01/14 100 91,500 6,340,015 Household Durables—0.6% Jarden Corp., 7.50%, 5/01/17 690 600,300 The Yankee Candle Co., Inc., 9.75%, 2/15/17 165 118,800 719,100 IT Services—1.9% First Data Corp., 9.875%, 9/24/15 (a) 495 430,650 SunGard Data Systems, Inc., 9.125%, 8/15/13 310 313,100 iPayment, Inc., 9.75%, 5/15/14 335 283,075 iPayment Investors LP, 12.75%, 7/15/14 (a)(c) 1,416 1,389,947 2,416,772 Independent Power Producers & Energy Traders—3.3% AES Red Oak LLC Series B, 9.20%, 11/30/29 1,250 1,290,625 Energy Future Holding Corp., 11.25%, 11/01/17 (a)(c) 1,600 1,608,000 NRG Energy, Inc.: 7.25%, 2/01/14 100 95,500 7.375%, 2/01/16 570 536,512 Texas Competitive Electric Holdings Co. LLC (a): 10.25%, 11/01/15 290 284,200 10.50%, 11/01/16 (c) 430 421,400 4,236,237 Corporate Bonds Par Value Industrial Conglomerates—1.9% Sequa Corp. (a): 11.75%, 12/01/15 $ 1,150 $ 1,023,500 13.50%, 12/01/15 (c) 1,450 1,361,432 2,384,932 Insurance—0.8% Alliant Holdings I, Inc., 11%, 5/01/15 (a) 800 696,000 USI Holdings Corp., 6.551%, 11/15/14 (a)(b) 310 258,850 954,850 Leisure Equipment & Products—0.5% Easton-Bell Sports, Inc., 8.375%, 10/01/12 430 339,700 Quiksilver, Inc., 6.875%, 4/15/15 350 297,500 637,200 Machinery—2.8% AGY Holding Corp., 11%, 11/15/14 (a) 890 829,925 Accuride Corp., 8.50%, 2/01/15 340 249,900 RBS Global, Inc., 8.875%, 9/01/16 370 345,950 Sunstate Equipment Co. LLC, 10.50%, 4/01/13 (a) 1,720 1,358,800 Terex Corp.: 7.375%, 1/15/14 175 172,375 8%, 11/15/17 545 540,913 3,497,863 Marine—0.2% Navios Maritime Holdings, Inc., 9.50%, 12/15/14 (a) 254 259,715 Media—13.8% Affinion Group, Inc.: 10.125%, 10/15/13 730 731,825 11.50%, 10/15/15 315 314,212 CMP Susquehanna Corp., 9.875%, 5/15/14 (a) 865 605,500 Cablevision Systems Corp. Series B, 7.133%, 4/01/09 (b) 750 750,000 Charter Communications Holdings I, LLC, 11%, 10/01/15 1,255 927,300 Charter Communications Holdings II, LLC, 10.25%, 9/15/10 2,530 2,446,487 Charter Communications Operating, LLC, 8.375%, 4/30/14 (a) 500 473,750 Dex Media West LLC, 9.875%, 8/15/13 1,213 1,091,700 DirecTV Holdings LLC: 8.375%, 3/15/13 300 309,000 7.625%, 5/15/16 (a) 1,000 985,000 EchoStar DBS Corp.: 7%, 10/01/13 152 144,780 7.125%, 2/01/16 325 299,812 Harland Clarke Holdings Corp.: 7.426%, 5/15/15 (b) 160 118,400 9.50%, 5/15/15 (a) 190 155,800 Network Communications, Inc., 10.75%, 12/01/13 830 630,800 Nielsen Finance LLC: 10%, 8/01/14 885 891,637 10%, 8/01/14 (a) 895 922,969 ProtoStar I Ltd., 12.50%, 10/15/12 (a)(b)(d) 1,382 1,340,759 R.H. Donnelley Corp. (a): 11.75%, 5/15/15 871 783,540 8.875%, 10/15/17 4 2,380 Rainbow National Services LLC, 10.375%, 9/01/14 (a) 1653 1,756,313 Sinclair Broadcast Group, Inc. Class A, 4.875%, 7/15/18 225 202,219 Sirius Satellite Radio, Inc., 9.625%, 8/01/13 90 72,900 TL Acquisitions, Inc., 10.50%, 1/15/15 (a) 1,570 1,358,050 Windstream Regatta Holdings, Inc., 11%, 12/01/17 (a) 304 209,760 17,524,893 Metals & Mining—4.1% AK Steel Corp., 7.75%, 6/15/12 415 416,038 Aleris International, Inc.: 9%, 12/15/14 (c) 200 156,000 10%, 12/15/16 680 498,100 SEMI-ANNUAL REPORT JUNE 30, 2008 17 Schedule of Investments (continued) BlackRock High Income Shares (HIS) (Percentages shown are based on Net Assets) Corporate Bonds Par Value Metals & Mining (concluded) FMG Finance Property Ltd. (a): 10%, 9/01/13 $ 240 $ 263,400 10.625%, 9/01/16 735 856,275 Freeport-McMoRan Copper & Gold, Inc.: 5.883%, 4/01/15 (b) 430 434,240 8.375%, 4/01/17 1,720 1,814,600 Ryerson, Inc. (a): 10.248%, 11/01/14 (b) 180 169,200 12%, 11/01/15 125 124,063 Steel Dynamics, Inc., 7.375%, 11/01/12 (a) 230 230,000 Vedanta Resources Plc, 9.50%, 7/18/18 (a) 295 297,798 5,259,714 Multiline Retail—0.3% Neiman Marcus Group, Inc., 9%, 10/15/15 (c) 345 332,394 Oil, Gas & Consumable Fuels—7.6% Atlas Energy Resources LLC, 10.75%, 2/01/18 (a) 575 598,000 Berry Petroleum Co., 8.25%, 11/01/16 275 279,125 Chaparral Energy, Inc., 8.50%, 12/01/15 100 86,750 Chesapeake Energy Corp.: 6.375%, 6/15/15 350 330,750 6.625%, 1/15/16 235 225,600 7.25%, 12/15/18 650 632,125 Compton Petroleum Finance Corp., 7.625%, 12/01/13 245 240,712 Connacher Oil and Gas Ltd., 10.25%, 12/15/15 (a) 605 638,275 Corral Finans AB, 4.291%, 4/15/10 (a)(c) 920 829,378 Denbury Resources, Inc., 7.50%, 12/15/15 75 74,625 EXCO Resources, Inc., 7.25%, 1/15/11 1,115 1,095,487 Encore Acquisition Co., 6%, 7/15/15 130 122,200 Forest Oil Corp.: 7.25%, 6/15/19 550 528,000 7.25%, 6/15/19 (a) 485 465,600 OPTI Canada, Inc., 8.25%, 12/15/14 980 975,100 PetroHawk Energy Corp., 7.875%, 6/01/15 (a) 300 292,875 Sabine Pass LNG LP, 7.50%, 11/30/16 210 189,000 SandRidge Energy, Inc., 8%, 6/01/18 (a) 455 457,275 Whiting Petroleum Corp.: 7.25%, 5/01/12 150 148,875 7.25%, 5/01/13 1,155 1,146,338 9,356,090 Paper & Forest Products—2.6% Abitibi-Consolidated, Inc., 8.85%, 8/01/30 80 30,000 Bowater Canada Finance Corp., 7.95%, 11/15/11 85 59,075 Bowater, Inc.: 9%, 8/01/09 270 250,087 5.776%, 3/15/10 (b) 350 295,750 Domtar Corp.: 7.875%, 10/15/11 100 100,500 7.125%, 8/15/15 160 152,400 NewPage Corp.: 10%, 5/01/12 1,260 1,275,750 12%, 5/01/13 435 439,350 Norske Skog Canada Ltd., 7.375%, 3/01/14 175 129,500 Verso Paper Holdings LLC Series B: 8.709%, 8/01/14 465 454,538 6.623%, 8/01/14 (b) 130 119,600 3,306,550 Pharmaceuticals—0.4% Angiotech Pharmaceuticals, Inc., 6.432%, 12/01/13 (b) 630 548,100 Real Estate Management & Development—1.0% Realogy Corp.: 10.50%, 4/15/14 680 472,600 11%, 4/15/14 (c) 1,045 616,550 12.375%, 4/15/15 325 159,250 1,248,400 Corporate Bonds Par Value Road & Rail—0.0% Avis Budget Car Rental LLC, 5.176%, 5/15/14 (b) $ 70 $ 54,250 Semiconductors & Semiconductor Equipment—0.9% Amkor Technology, Inc.: 7.75%, 5/15/13 160 148,400 9.25%, 6/01/16 155 147,637 Freescale Semiconductor, Inc.: 8.875%, 12/15/14 260 211,250 9.125%, 12/15/14 (c) 360 279,900 Spansion, Inc., 5.807%, 6/01/13 (a)(b) 550 401,500 1,188,687 Software—0.1% BMS Holdings, Inc., 9.954%, 2/15/12 (a)(b)(c) 188 131,923 Specialty Retail—6.1% Asbury Automotive Group, Inc., 7.625%, 3/15/17 240 193,200 AutoNation, Inc.: 4.713%, 4/15/13 (b) 360 304,200 7%, 4/15/14 360 320,400 General Nutrition Centers, Inc.: 7.199%, 3/15/14 (b)(c) 800 660,500 10.75%, 3/15/15 990 846,450 Group 1 Automotive, Inc., 2.25%, 6/15/36 (d) 400 234,000 Lazy Days R.V. Center, Inc., 11.75%, 5/15/12 2,307 1,591,830 Michaels Stores, Inc.: 10%, 11/01/14 830 718,987 11.375%, 11/01/16 490 389,550 Rent-A-Center, Inc. Series B, 7.50%, 5/01/10 1,910 1,847,925 United Auto Group, Inc., 7.75%, 12/15/16 710 621,250 7,728,292 Thrifts & Mortgage Finance—0.0% Residential Capital LLC, 8.50%, 5/15/10 (a) 81 68,040 Wireless Telecommunication Services—7.5% American Tower Corp., 7.125%, 10/15/12 1,000 1,010,000 Centennial Communications Corp.: 8.541%, 1/01/13 (b) 650 627,250 8.125%, 2/01/14 645 638,550 Cricket Communications, Inc., 10.875%, 11/01/14 540 519,750 Digicel Group Ltd. (a): 8.875%, 1/15/15 590 556,812 9.125%, 1/15/15 (c) 1,320 1,240,800 FiberTower Corp., 9%, 11/15/12 (d) 300 220,500 iPCS, Inc., 4.998%, 5/01/13 (b) 280 252,000 MetroPCS Wireless, Inc., 9.25%, 11/01/14 1,415 1,361,937 Nordic Telephone Co. Holdings ApS, 8.875%, 5/01/16 (a) 1980 1,940,400 Rural Cellular Corp., 8.25%, 3/15/12 350 358,750 Sprint Capital Corp., 7.625%, 1/30/11 835 820,388 9,547,137 Total Corporate Bonds—103.7% 131,281,022 Floating Rate Loan Interests Auto Components—0.5% Dana Corp. Term Loan B, 6.75%, 1/31/15 575 523,980 Delphi Automotive Systems: Delay Draw Term Loan, 8.50%, 12/31/08 37 34,445 Term Loan, 8.50%, 12/31/08 82 75,944 634,369 Automobiles—0.5% Ford Motor Term Loan B, 5.46%, 12/15/13 425 342,019 General Motors Corp. Term Loan B, 5.163%, 11/29/13 375 312,656 654,675 Building Products—1.0% Building Material Corp. of America First Lien Term Loan, 5.688%, 2/22/14 249 220,448 See Notes to Financial Statements. 18 SEMI-ANNUAL REPORT JUNE 30, 2008 Schedule of Investments (continued) BlackRock High Income Shares (HIS) (Percentages shown are based on Net Assets) Floating Rate Loan Interests Par Value Building Products (concluded) Masonite International: Term Loan, 4.63%-5.046%, 4/06/13 $ 498 $ 460,383 Term Loan B, 4.63%-5.046%, 4/06/13 501 462,534 1,143,365 Chemicals—1.0% PQ Corp. Second Lien Term Loan, 9.30%, 5/29/16 1,500 1,305,000 Communications Equipment—0.6% Alltel Corp. Term Loan B1, 5.232%, 5/16/15 748 737,621 Health Care Providers & Services—0.5% Rotech Healthcare, Inc. Term Loan B, 10.832%, 9/26/11 748 650,960 Hotels, Restaurants & Leisure—1.0% Travelport, Inc. Term Loan, 10.095%, 3/20/12 (c) 1,671 1,329,202 Household Products—0.2% Spectrum Brands, Inc.: Letter of Credit, 2.309%, 4/15/13 13 12,986 Term Loan B-1, 6.475%, 4/15/13 271 257,161 270,147 Independent Power Producers & Energy Traders—1.3% TXU Corp.: Term Loan B-2, 6.478%-6.596%, 10/14/29 248 230,025 Term Loan B-3, 6.234%-6.478%, 10/10/14 1,488 1,375,699 1,605,724 Machinery—0.1% Rexnord Corp. Term Loan, 9.676%, 3/02/13 (c) 170 133,518 Media—3.0% Education Media and Publishing: First Lien Term Loan B, 6.456%, 11/14/14 1,098 1,005,114 Second Lien Term Loan, 11.956%, 11/14/14 2,528 2,098,603 Thomson Learning, Inc. Term Loan B 2, 4.98%, 7/05/14 750 746,250 3,849,967 Oil, Gas & Consumable Fuels—0.8% Abbot Group Plc Bridge Loan, 0%, 3/15/18 1,000 980,000 Paper & Forest Products—0.3% Verso Paper Holdings LLC Term Loan B, 8.709%, 2/01/13 421 399,713 Total Floating Rate Loan Interests—10.8% 13,694,261 Common Stocks Shares Containers & Packaging—0.2% Owens-Illinois, Inc. (f) 4,745 197,819 Machinery—0.0% Goss Holdings Inc. Class B (f) 64,467 1 Common Stocks Shares Value Wireless Telecommunication Services—0.0% Crown Castle International Corp. (f) 495 $ 19,171 Total Common Stocks—0.2% 216,991 Preferred Securities Par Diversified Financial Services—0.7% Citigroup, Inc., 8.40%, 4/29/49 (b) $ 1,000 950,611 Total Capital Trusts—0.7% 950,611 Preferred Stocks Shares Containers & Packaging—0.4% Smurfit-Stone Container Corp., 7% (c)(d) 30,000 525,000 Electrical Equipment—0.0% Superior Essex Holding Corp. Series A, 9.50% 60,000 60,000 Independent Power Producers & Energy Traders—0.9% NTG Energy, Inc., 4% 500 1,090,625 Media—0.2% Emmis Communications Corp. Class A, 6.25% (d) 10,300 257,500 Wireless Telecommunication Services—0.5% Crown Castle International Corp., 6.25% (d) 10,000 573,750 Total Preferred Stocks—2.0% 2,506,875 Total Preferred Securities—2.7% 3,457,486 Other Interests (g) Beneficial Health Care Providers & Services—0.0% Critical Care Systems International, Inc. 4,737 1,592 Total Other Interests—0.0% 1,592 Total Long-Term Investments (Cost $161,076,736) 148,651,352 Short-Term Securities Par Government Agency Note—ST—0.9% Federal Home Loan Bank, 2%, 7/01/08 $ 1,200 1,200,000 Total Short-Term Securities (Cost—$1,200,000)—0.9% 1,200,000 Total Investments (Cost—$162,276,736*)—118.3% 149,851,352 Liabilities in Excess of Other Assets—(18.3)% (23,221,609 ) Net Assets—100.0% $ 126,629,743 * Aggregate cost $ 162,316,745 Gross unrealized appreciation $ 1,595,795 Gross unrealized depreciation (14,061,188 ) Net unrealized appreciation $ (12,465,393 ) (a) Security exempt from registration under Rule 144a of the Securities Act of 1933. These securities may be resold in transactions exempt from registration to qualified institutional investors. Unless otherwise indicated, these securities are considered to be liquid. (b) Variable rate security. Rate shown is as of report date. (c) Represents a payment-in-kind security which may pay interest/dividends in additional face/shares. (d) Convertible security. (e) Issuer filed for bankruptcy or is in default of interest payments. (f) Non-income producing security. (g) Other interests represent beneficial interest in liquidation trusts and other reorganization entities and are non-income producing. • For Trust compliance purposes, the Trust’s industry classifications refer to any one or more of the industry sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by Trust management. This definition may not apply for purposes of this report, which may combine industry sub-classifications for reporting ease. See Notes to Financial Statements. SEMI-ANNUAL REPORT JUNE 30, 2008 19 Schedule of Investments (concluded) BlackRock High Income Shares (HIS) (Percentages shown are based on Net Assets) • Effective January 1, 2008, the Trust adopted Financial Accounting Standards Board Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (“FAS 157”). FAS 157 clarifies the definition of fair value, establishes a framework for measuring fair values and requires additional disclosures about the use of fair value measurements. Various inputs are used in determining the fair value of investments, which are as follows: • Level 1 - price quotations in active markets/exchanges for identical securities • Level 2 - other observable inputs (including, but not limited to: quoted prices for similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks, and default rates) or other market-corroborated inputs) • Level 3 - unobservable inputs based on the best information available in the circumstance, to the extent observable inputs are not available (including the Fund’s own assumption used in determining the fair value of investments) The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. For information about the Trust’s policy regarding valuation of investments and other significant accounting policies, please refer to Note 1 of the Notes to Financial Statements. The following table summarizes the inputs used as of June 30, 2008 in determining the fair valuation of the Trust’s investments: Valuation Investments in Level 1 $ 216,990 Level 2 149,632,770 Level 3 1,592 Total $ 149,851,352 The following is a reconciliation of investments for unobservable inputs (Level 3) were used in determining fair value: Investments in Balance, as of December 31, 2007 $ 1,592 Accrued discounts/premiums — Realized gain (loss) — Change in unrealized appreciation (depreciation) — Net purchases (sales) — Net transfers in/out of Level 3 — Balance, as of June 30, 2008 $ 1,592 See Notes to Financial Statements. 20 SEMI-ANNUAL REPORT JUNE 30, 2008 Schedule of Investments June 30, 2008 (Unaudited) BlackRock Preferred Opportunity Trust (BPP) (Percentages shown are based on Net Assets) Corporate Bonds Par Value Aerospace & Defense—0.1% CHC Helicopter Corp., 7.375%, 5/01/14 $ 90 $ 93,375 Hexcel Corp., 6.75%, 2/01/15 170 165,325 258,700 Auto Components—0.1% Lear Corp., 8.75%, 12/01/16 350 273,000 Metaldyne Corp., 10%, 11/01/13 125 65,000 338,000 Building Products—0.6% C8 Capital SPV Ltd., 6.64% (a)(b)(c) 1,945 1,802,859 CPG International I, Inc., 10.50%, 7/01/13 260 217,100 2,019,959 Capital Markets—2.2% Credit Suisse Guernsey Ltd., 5.86% (b)(c) 3,880 3,234,554 Lehman Brothers Holdings, Inc.: 4.476%, 9/15/22 (b) 650 629,787 6.875%, 7/17/37 3,875 3,335,592 7,199,933 Chemicals—0.2% American Pacific Corp., 9%, 2/01/15 200 195,500 Chemtura Corp., 6.875%, 6/01/16 30 25,950 Key Plastics LLC, 11.75%, 3/15/13 (a) 630 283,500 504,950 Commercial Banks—20.0% BNP Paribas, 7.195% (a)(b)(c)(d) 12,175 11,009,353 Bank of Ireland (a)(b)(c): Capital Funding II, LP, 5.571% 4,015 2,709,442 Capital Funding III, LP, 6.107% 4,275 3,203,471 Barclays Bank Plc, 7.434% (a)(b)(c) 580 544,027 CBA Capital Trust I, 5.805% (a)(c) 5,000 4,345,389 Credit Agricole SA, 6.637% (a)(b)(c)(e) 16,385 13,645,199 Lloyds TSB Bank Plc, 6.90% (c) 6,399 5,887,080 RESPARCS Funding LP I, 8% (c) 4,000 3,664,000 Royal Bank of Scotland Group Plc (b)(c): 7.65% 1,960 1,906,857 Series MTN, 7.64% 3,700 3,383,017 Societe Generale, 5.922% (a)(b)(c)(e) 6,575 5,587,461 Standard Chartered Bank, 7.014% (a)(b)(c) 2,950 2,540,711 Sumitomo Mitsui Banking Corp., 5.625% (a)(b)(c) 5,000 4,487,175 SunTrust Preferred Capital I, 5.853% (b)(c) 2,050 1,491,375 64,404,557 Commercial Services & Supplies—0.0% FTI Consulting, Inc., 7.75%, 10/01/16 100 102,500 Containers & Packaging—0.1% Impress Holdings BV, 5.916%, 9/15/13 (a)(b) 240 218,400 Diversified Financial Services—6.9% Bank of America Corp. Series K, 8% (b)(c) 12,575 11,781,140 JPMorgan Chase (e): Capital XXI Series U, 3.80%, 2/02/37 (b) 7,730 5,952,687 Capital XXV, 6.80%, 10/01/37 5,075 4,555,244 22,289,071 Diversified Telecommunication Services—0.3% Qwest Corp., 6.026%, 6/15/13 (b) 460 439,300 Wind Acquisition Finance SA, 10.75%, 12/01/15 (a) 420 441,000 880,300 Electric Utilities—0.7% PPL Capital Funding, 6.70%, 3/30/67 (b) 2,675 2,281,871 Energy Equipment & Services—0.2% Compagnie Generale de Geophysique-Veritas, 7.50%, 5/15/15 70 69,825 Grant Prideco, Inc. Series B, 6.125%, 8/15/15 100 101,552 SemGroup LP, 8.75%, 11/15/15 (a) 350 339,500 510,877 Corporate Bonds Par Value Gas Utilities—0.1% Targa Resources, Inc., 8.50%, 11/01/13 $ 420 $ 411,600 Hotels, Restaurants & Leisure—0.2% American Real Estate Partners LP, 7.125%, 2/15/13 415 376,612 Greektown Holdings, LLC, 10.75%, 12/01/13 (a)(f)(g) 362 267,880 Wynn Las Vegas LLC, 6.625%, 12/01/14 40 36,600 681,092 Insurance—36.7% AXA SA, 6.379% (a)(b)(c) 7,150 5,734,657 The Allstate Corp. (b): 6.50%, 5/15/57 (e) 6,350 5,548,147 Series B, 6.125%, 5/15/67 5,200 4,717,960 American International Group, Inc.: 8.175%, 5/15/58 (a)(b) 8,390 7,895,905 6.25%, 3/15/87 5,555 4,348,260 Chubb Corp., 6.375%, 3/29/67 (b)(e) 9,025 8,255,574 Everest Reinsurance Holdings, Inc., 6.60%, 5/01/67 (b) 7,135 5,090,566 Genworth Financial, Inc., 6.15%, 11/15/66 (b) 1,475 1,159,468 Kingsway America, Inc., 7.50%, 2/01/14 9,000 7,875,000 Liberty Mutual Group, Inc. (a)(b): 7%, 3/15/37 5,025 4,232,869 10.75%, 6/15/88 3,875 3,710,313 Lincoln National Corp. (b): 7%, 5/17/66 3,370 3,069,622 6.05%, 4/20/67 2,500 2,107,920 MetLife, Inc., 6.40%, 12/15/66 (e) 6,375 5,566,134 Nationwide Life Global Funding I, 6.75%, 5/15/67 4,850 3,841,423 PartnerRe Finance II, 6.44%, 12/01/66 (b) 2,850 2,263,949 Progressive Corp., 6.70%, 6/15/37 (b) 5,775 5,063,947 Prudential Plc, 6.50% (c) 6,000 5,104,200 QBE Capital Funding II LP, 6.797% (a)(b)(c) 4,250 3,562,835 Reinsurance Group of America, 6.75%, 12/15/65 (b) 1,300 1,022,252 Swiss Re Capital I LP, 6.854% (a)(b)(c)(e) 9,425 8,310,305 The Travelers Cos., Inc., 6.25%, 3/15/67 (b)(e) 11,350 9,751,262 White Mountains Re Group Ltd., 7.506% (a)(b)(c) 2,600 1,970,280 ZFS Finance (USA) (a)(b): Trust IV, 5.875%, 5/09/32 650 592,891 Trust V, 6.50%, 5/09/67 (e) 8,765 7,650,145 118,445,884 Machinery—0.1% AGY Holding Corp., 11%, 11/15/14 (a) 460 428,950 Marine—0.1% Navios Maritime Holdings, Inc., 9.50%, 12/15/14 211 215,747 Media—2.1% Affinion Group, Inc.: 10.125%, 10/15/13 475 476,187 11.50%, 10/15/15 230 229,425 CMP Susquehanna Corp., 9.875%, 5/15/14 110 77,000 Comcast Holdings Corp., 2%, 11/15/29 (h) 110 4,290,000 Dex Media West LLC, 9.875%, 8/15/13 1,050 945,000 R.H. Donnelley, Inc., 11.75%, 5/15/15 (a) 169 152,280 Windstream Regatta Holdings, Inc., 11%, 12/01/17 (a) 902 622,380 6,792,272 Metals & Mining—0.5% Freeport-McMoRan Copper & Gold, Inc.: 5.883%, 4/01/15 (b) 200 201,972 8.375%, 4/01/17 1,400 1,477,000 1,678,972 Multi-Utilities—0.2% Puget Sound Energy, Inc. Series A, 6.974%, 6/01/67 (b) 925 800,125 Oil, Gas & Consumable Fuels—3.0% Chesapeake Energy Corp., 6.875%, 11/15/20 30 28,200 Compton Petroleum Finance Corp., 7.625%, 12/01/13 80 78,600 Conoco Funding Co., 6.35%, 10/15/11 3,000 3,172,668 EXCO Resources, Inc., 7.25%, 1/15/11 75 73,687 See Notes to Financial Statements. SEMI-ANNUAL REPORT JUNE 30, 2008 21 Schedule of Investments (continued) BlackRock Preferred Opportunity Trust (BPP) (Percentages shown are based on Net Assets) Corporate Bonds Par Value Oil, Gas & Consumable Fuels (concluded) OPTI Canada, Inc., 8.25%, 12/15/14 $ 550 $ 547,250 Plains All American Pipeline LP, 6.50%, 5/01/18 (a) 1,540 1,534,256 Sabine Pass LNG LP, 7.50%, 11/30/16 350 315,000 TransCanada PipeLines Ltd., 6.35%, 5/15/67 (b) 4,325 3,734,508 Whiting Petroleum Corp., 7.25%, 5/01/13 55 54,588 9,538,757 Paper & Forest Products—0.7% International Paper Co., 8.70%, 6/15/38 1,900 1,913,840 NewPage Corp., 10%, 5/01/12 270 273,375 2,187,215 Real Estate Investment Trusts (REITs)—0.5% Rouse Co. LP, 5.375%, 11/26/13 2,000 1,597,052 Specialty Retail—0.4% Lazy Days’ R.V. Center, Inc., 11.75%, 5/15/12 1,199 827,310 Michaels Stores, Inc., 10%, 11/01/14 560 485,100 1,312,410 Thrifts & Mortgage Finance—0.2% Washington Mutual Preferred Funding Delaware, 6.534% (a)(b)(c) 1,400 621,628 Wireless Telecommunication Services—0.3% Nordic Telephone Co. Holdings ApS, 8.875%, 5/01/16 (a) 845 828,100 Total Corporate Bonds—76.5% 246,548,922 Capital Trusts Capital Markets—2.2% State Street Capital Trust III, 8.25% (b)(c) 1,920 1,957,075 State Street Capital Trust IV, 3.776%, 6/01/67 (b) 6,725 5,163,045 7,120,120 Commercial Banks—9.0% Abbey National Capital Trust I, 8.963% (b)(c) 1,425 1,560,761 BB&T Capital Trust IV, 6.82%, 6/12/77 (b)(e) 9,150 7,774,938 Barclays Bank Plc, 5.926% (a)(b)(c) 3,185 2,715,334 FCB/NC Capital Trust I, 8.05%, 3/01/28 1,100 1,129,997 Huntington Capital III, 6.65%, 5/15/37 (b) 1,925 1,212,167 NBP Capital Trust III, 7.375% (c) 2,000 1,844,000 Regions Financing Trust II, 6.625%, 5/15/47 (b) 2,800 1,913,814 Wachovia Corp. Series K, 7.98% (b)(c)(e) 9,200 8,449,280 Westpac Capital Trust IV, 5.256% (a)(b)(c) 3,000 2,452,740 29,053,031 Diversified Financial Services—8.2% Bank of America Corp. Series M, 8.125% (b)(c)(e) 7,500 7,089,450 Citigroup, Inc., 8.40% (b)(c)(e) 11,450 10,884,485 JPMorgan Chase & Co., 7.90% (b)(c)(e) 7,000 6,563,480 JPMorgan Chase Capital XXIII, 3.676%, 5/15/77 (b) 2,670 2,041,850 26,579,265 Insurance—5.4% AFC Capital Trust I Series B, 8.207%, 2/03/27 4,500 3,748,509 American General Institutional Capital A, 7.57%, 12/01/45 (a)(e) 9,605 8,745,708 Mangrove Bay Pass-Through Trust, 6.102%, 7/15/33 (a)(b) 5,000 3,053,150 Zenith National Insurance Capital Trust I, 8.55%, 8/01/28 (a) 1,800 1,723,500 17,270,867 Thrifts & Mortgage Finance—0.4% Webster Capital Trust IV, 7.65%, 6/15/37 (b) 1,925 1,249,146 Total Capital Trusts—25.2% 81,272,429 Preferred Stocks Shares Value Capital Markets—1.2% The Bear Stearns Cos., Inc. Series E, 6.15% 75,000 $ 2,840,250 Lehman Brothers Holdings Inc. Series D, 5.67% 31,100 935,177 3,775,427 Commercial Banks—10.0% Banesto Holdings, Ltd. Series A, 10.50% 30,000 908,439 Barclays Bank Plc, 8.125% 100,000 2,459,000 First Republic Preferred Capital Corp., 7.25% 120,000 2,314,800 HSBC USA, Inc. Series H, 6.50% 50,000 1,027,500 NB Capital Corp. Series DEP, 8.35% 255,200 6,038,032 Santander Finance Preferred SA Unipersonal: 6.50% 258,000 5,443,800 6.80% 85,000 1,872,661 SunTrust Real Estate Investment Trust, 9% 30 2,820,000 Union Planter Preferred Funding Corp., 7.75% (a) 60 3,628,125 Wachovia Corp. Series J, 8% 261,800 5,869,556 32,381,913 Diversified Financial Services—3.7% Bank of America Corp. Series H, 8.20% 140,000 3,473,400 Citigroup, Inc.: Series AA, 8.125% 245,000 5,488,000 Series T, 6.50% (h) 65,000 2,827,500 11,788,900 Electric Utilities—0.4% Alabama Power Co., 6.50% 50,000 1,225,000 Electrical Equipment—0.2% Superior Essex Holding Corp. Series A, 9.50% 787,326 787,326 Insurance—8.1% Arch Capital Group Ltd. Series A, 8% 117,414 2,734,572 Aspen Insurance Holdings Ltd., 7.401% (b) 115,000 2,484,000 Endurance Specialty Holdings Ltd. Series A, 7.75% 172,400 3,551,440 MetLife, Inc. Series B, 6.50% 274,500 5,874,300 PartnerRe Ltd. Series C, 6.75% 209,400 4,284,324 Prudential Plc, 6.50% 62,000 1,147,000 RenaissanceRe Holding Ltd. Series D, 6.60% 210,000 4,019,400 Zurich RegCaPS Funding Trust, 6.58% (a)(b) 2,000 1,940,625 26,035,661 Real Estate Investment Trusts (REITs)—2.0% BRE Properties, Inc. Series D, 6.75% 20,000 413,200 Public Storage: Series F, 6.45% 20,000 384,600 Series M, 6.625% 35,000 695,450 Sovereign Real Estate Investment Corp., 12% (a) 3,180 3,084,600 Weingarten Realty Investors Series F, 6.50% 95,000 1,895,250 6,473,100 Thrifts & Mortgage Finance—5.1% Fannie Mae, 8.25% 190,000 4,360,500 Freddie Mac: Series Q, 3.85% (b) 202,000 7,108,380 Series U, 5.90% 100,000 1,974,000 Series Y, 6.55% 85,300 1,676,145 Series Z, 8.375% (a) 60,000 1,458,000 16,577,025 Total Preferred Stocks—30.7% 99,044,352 Trust Preferreds Par Capital Markets—1.3% Deutsche Bank Contingent Capital Trust V, 8.05% (c) $ 2,062 1,974,599 Structured Asset Trust Unit Repackagings (SATURNS): Credit Suisse First Boston (USA), Inc. Debenture Backed Series 2003-13, 6.25%, 7/15/32 278 224,984 See Notes to Financial Statements. 22 SEMI-ANNUAL REPORT JUNE 30, 2008 Schedule of Investments (continued) BlackRock Preferred Opportunity Trust (BPP) (Percentages shown are based on Net Assets) Trust Preferreds Par Value Capital Markets (concluded) Goldman Sachs Group, Inc. Debenture Backed Series 2003-06, 6%, 2/15/33 $ 2,573 $ 2,065,763 4,265,346 Commercial Banks—0.6% Fifth Third Capital Trust VII, 8.875%, 5/15/68 (b) 537 449,600 Keycorp Capital V, 5.875%, 7/30/33 2,550 1,370,809 1,820,409 Diversified Financial Services—0.1% PPLUS Trust Certificates Series VAL-1 Class A, 7.25%, 4/15/32 277 259,947 Food Products—0.7% Corporate-Backed Trust Certificates, Kraft Foods, Inc. Debenture Backed Series 2003-11, 5.875%, 11/01/31 2,500 2,156,654 Insurance—0.9% Everest Re Capital Trust, 6.20%, 3/29/34 750 558,474 Financial Security Assurance Holdings Ltd., 5.60%, 7/15/03 380 212,099 PLC Capital Trust IV, 7.25%, 9/25/32 460 390,816 The Phoenix Cos., Inc., 7.45%, 1/15/32 1,985 1,297,281 2,458,670 Media—3.5% Comcast Corp.: 7%, 9/15/55 1,250 1,156,671 6.625%, 5/15/56 11,750 10,019,680 Corporate-Backed Trust Certificates, News America Debenture Backed Series 2002-9, 8.125%, 12/01/45 180 171,609 11,347,960 Oil, Gas & Consumable Fuels—1.1% Nexen, Inc., 7.35%, 11/01/43 3,875 3,682,089 Thrifts & Mortgage Finance—2.6% Countrywide Capital V, 7%, 11/01/66 750 516,015 Countrywide Financial Corp., 6.75%, 4/01/33 10,900 7,819,690 8,335,705 Trust Preferreds Par Value Wireless Telecommunication Services—0.5% Structured Repackaged Asset-Backed Trust Securities, Sprint Capital Corp. Debenture Backed Series 2004-2, 6.50%, 11/15/28 $ 2,586 $ 1,687,344 Total Trust Preferreds—11.3% 36,014,124 Exchange-Traded Funds Shares UltraShort Financials ProShares 106,000 16,602,780 UltraShort Real Estate ProShares 70,000 7,350,000 Total Exchange-Traded Funds—7.4% 23,952,780 Total Long-Term Investments 486,832,607 Short-Term Securities Par U.S. Government Obligations—10.5% Federal Home Loan Bank, 2%, 7/01/08 $ 33,900 33,900,000 Total Short-Term Securities 33,900,000 Total Investments 520,732,607 Liabilities in Excess of Other Assets—(27.3)% (87,882,567 ) Preferred Shares, at Redemption Value—(34.3)% (110,453,189 ) Net Assets Applicable to Common Shareholders—100.0% $ 322,396,851 * The cost and unrealized appreciation (depreciation) of investments as of June 30, 2008, as computed for federal income tax purposes, were as follows: Aggregate cost $ 592,154,353 Gross unrealized appreciation $ 3,152,092 Gross unrealized depreciation (74,573,838 ) Net unrealized depreciation $ (71,421,746 ) (a) Security exempt from registration under Rule 144a of the Securities Act of 1933. These securities may be resold in transactions exempt from registration to qualified institutional investors. Unless otherwise indicated, these securities are considered to be liquid. (b) Variable rate security. Rate shown is as of report date. (c) Security is perpetual in nature and has no stated maturity date. (d) All or a portion of security, pledged as collateral in connection with open financial future contracts. (e) All or a portion of security, pledged as collateral for reverse repurchase agreements. Counterparty Interest Trade Maturity Net Closing Face Barclay’s Bank PLC 3.53% 6/26/08 5/15/09 $ 3,819,587 $ 3,703,735 Barclay’s Bank PLC 3.43% 6/09/08 5/15/09 37,985,103 36,800,000 Barclay’s Bank PLC 3.53% 6/26/08 5/15/09 551,786 535,050 Barclay’s Bank PLC 3.44% 6/26/08 5/15/09 513,335 498,150 Barclay’s Bank PLC 3.44% 6/06/08 5/15/09 25,999,430 25,183,647 Barclay’s Bank PLC 3.53% 6/10/08 5/15/09 33,143,630 32,083,442 Total $ 102,012,871 $ 98,804,024 (f) Issuer filed for bankruptcy or is in default of interest payments. (g) Non-income producing security. (h) Convertible security. • Financial futures contracts purchased as of June 30, 2008 were as follows: Contracts Issue Expiration Face Unrealized 584 2-Year U.S. Treasury Bond September 2008 $ 122,707,943 $ 634,683 302 10-Year U.S. Treasury Bond September 2008 $ 34,117,089 $ 287,317 Total $ 922,000 See Notes to Financial Statements. SEMI-ANNUAL REPORT JUNE 30, 2008 23 Schedule of Investments (concluded) BlackRock Preferred Opportunity Trust (BPP) • Financial futures contracts sold as of June 30, 2008 were as follows: Contracts Issue Expiration Face Unrealized 1,581 20-Year U.S. Treasury Bond September 2008 $ 179,858,504 $ (2,895,215 ) • For Trust compliance purposes, the Trust’s industry classifications refer to anyone or more of the industry classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by Trust management. This definition may not apply for purposes of this report, which may combine industry sub-classifications for reporting ease. • Swaps outstanding as of June 30, 2008 were as follows: Notional Unrealized Bought credit default protection on Capital One Financial Corp. and pay 4.175% Broker, Citibank N.A. Expires March 2013 $ 2,000 $ (5,839 ) Bought credit default protection on Capital One Financial Corp. and pay 4.2% Broker, Deutsche Bank AG London Expires March 2013 $ 1,000 (3,839 ) Bought credit default protection on American Express Company and pay 2.11% Broker, Deutsche Bank AG London Expires March 2013 $ 4,000 (60,744 ) Bought credit default protection on Lehman Brothers Holdings, Inc. and pay 4.95% Broker, Deutsche Bank AG London Expires March 2013 $ 2,000 (152,266 ) Bought credit default protection on Dow Jones CDX North America Investment Grade Index Series 10 and pay 1.55% Broker, Goldman Sachs Capital Markets, LP. Expires June 2013 $ 5,000 16,820 Bought credit default protection on Down Jones CDX North America Investment Grade Index and pay 1.55% Broker, Morgan Stanley Capital Services Inc. Expires June 2013 $ 11,250 231,846 Bought credit default protection on Dow Jones CDX North America Investment Grade High Volatility INdex 10. V1 and pay 3.5% Broker, Lehman Brothers Special Finance Expires June 2013 $ 2,800 (3,699 ) Bought credit default protection on Kimco Realty Corp. and pay 2.4% Broker, Goldman Sachs Capital Markets, LP. Expires March 2018 $ 3,000 (156,387 ) Bought credit default protection on Mack-Cali Realty, L.P. and pay 3.1% Broker, Goldman Sachs Capital Markets, LP. Expires March 2018 $ 1,000 (79,253 ) Bought credit default protection on ERP Operating Limited Partnership and pay 2.35% Broker, Goldman Sachs Capital Markets, LP. Expires March 2018 $ 3,000 (147,039 ) Total $ (360,400 ) • Effective January 1, 2008, the Trust adopted Financial Accounting Standards Board Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” (“FAS 157”). FAS 157 clarifies the definition of fair value, establishes a framework for measuring fair values and requires additional disclosures about the use of fair value measurements. Various inputs are used in determining the fair value of investments, which are as follows: • Level 1 - price quotations in active markets/exchanges for identical securities • Level 2 - other observable inputs (including, but not limited to: quoted prices for similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks, and default rates) or other market-corroborated inputs) • Level 3 - unobservable inputs based on the best information available in the circumstance, to the extent observable inputs are not available (including the Trust’s own assumption used in determining the fair value of investments) The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. For information about the Trust’s policy regarding valuation of investments and other significant accounting policies, please refer to Note 1 of the Notes to Financial Statements. The following table summarizes the inputs used as of June 30, 2008 in determining the fair valuation of the Trust’s investments: Valuation Investments in Other Level 1 $ 119,634,752 $ (1,973,215 ) Level 2 401,097,855 (360,400 ) Level 3 — — Total $ 520,732,607 $ (2,333,615 ) * Other financial instruments are swaps and futures. See Notes to Financial Statements. 24 SEMI-ANNUAL REPORT JUNE 30, 2008 June 30, 2008 (Unaudited) BlackRock BlackRock BlackRock Assets Investments at value – unaffiliated 1 $ 624,860,288 $ 149,851,352 $ 520,732,607 Cash 1,484,864 9,910 543,689 Foreign currency at value2 6,475,743 945 — Investments sold receivable 7,805,447 1,484,728 23,107,467 Unrealized appreciation on swaps 74,800 — 248,666 Unrealized appreciation on foreign currency contracts 755,120 — — Interest receivable 8,930,659 3,102,528 5,571,382 Swaps receivable 9,237 — — Swap premiums paid 52,787 — — Margin variation receivable — — 107,650 Dividends receivable 26,653 8,250 651,759 Commitment fees receivable 4,261 — — Principal paydown receivable 3,115,118 170,308 — Prepaid expenses 99,355 22,164 74,193 Other assets 419,954 61,574 63,088 Total assets 654,114,286 154,711,759 551,100,501 Liabilities Unrealized depreciation on swaps 539,372 — 609,066 Loan payable 184,650,000 23,000,000 — Unrealized on unfunded loan commitment — 263 — Reverse repurchase agreements — — 98,804,024 Unrealized depreciation on foreign currency contracts 433,821 — — Swaps premiums received — — 363,051 Investments purchased payable 19,251,150 4,629,148 17,635,312 Interest expense payable 101,946 143,715 181,958 Income dividends payable – Common Shares 108,248 40,042 101,716 Investment advisory fees payable 291,035 93,015 294,275 Swaps payable 4,221 — 27,069 Officer’s and Directors’/Trustees’ fees payable 59,184 12,030 65,233 Other affiliates payable 5,231 1,059 4,764 Other accrued expenses 137,944 162,744 162,933 Other liabilities 179,619 — 1,060 Total liabilities 205,761,771 28,082,016 118,250,461 Preferred Shares $0.001 par value per share at $25,000 per share liquidation preference3 58,832,181 — 110,453,189 Net assets applicable to Common Shares $ 389,520,334 $ 126,629,743 $ 322,396,851 Net Assets Applicable to Common Shareholders Consist of Common Shares, par value4 per share5 $ 23,545 $ — $ 18,386 Paid-in capital in excess of par 437,531,709 378,596,310 432,672,444 Undistributed (distributions in excess of) net investment income 3,414,097 1,624,164 (484,710 ) Accumulated net realized loss (19,945,609 ) (241,165,296 ) (36,309,727 ) Net unrealized appreciation/depreciation (31,503,408 ) (12,425,435 ) (73,499,542 ) Net assets applicable to Common Shareholders $ 389,520,334 $ 126,629,743 $ 322,396,851 Net asset value per common share5 $ 16.54 $ 2.32 $ 17.54 1 Investments at cost – unaffiliated $ 656,366,838 $ 162,276,736 $ 591,898,534 2 Foreign currency at cost $ 6,405,233 $ 732 — 3 Preferred Shares outstanding 2,352 — 4,416 4 Par Value Per Share $ 0.001 $ — $ 0.001 5 Common Shares outstanding 23,545,239 54,620,873 18,385,837 See Notes to Financial Statements. SEMI-ANNUAL REPORT JUNE 30, 2008 25 Six Months Ended June 30, 2008 (Unaudited) BlackRock BlackRock BlackRock Investment Income Interest $ 24,762,900 $ 7,863,236 $ 15,153,607 Dividends 1,831 74,128 5,141,150 Total income 24,764,731 7,937,364 20,294,757 Expenses Investment advisory 2,314,874 583,263 1,823,847 Commissions for Preferred Shares 186,571 — 228,185 Accounting services 40,315 11,588 41,798 Professional 96,706 40,312 65,720 Transfer agent 14,320 7,088 11,616 Registration 15,516 14,025 5,591 Printing 41,705 931 49,668 Officer and Directors/Trustees 17,563 6,553 19,258 Custodian 30,279 9,771 24,405 Borrowing 106,216 59,247 — Miscellaneous 3,617 — 16,822 Total expenses excluding interest expense 2,867,682 732,778 2,286,910 Interest expense 344,883 577,268 221,969 Total expenses 3,212,565 1,310,046 2,508,879 Less fees waived by advisor (581,197 ) — — Less fees paid indirectly (9,553 ) (555 ) (1,042 ) Net expenses 2,621,815 1,309,491 2,507,837 Net investment income 22,142,916 6,627,873 17,786,920 Realized and Unrealized Gain (Loss) Net realized gain (loss) from: Investments (6,527,711 ) (5,980,555 ) (10,528,313 ) Futures and swaps 144,820 — 2,327,708 Foreign currency (9,842,627 ) (4 ) — (16,225,518 ) (5,980,559 ) (8,200,605 ) Net change in unrealized appreciation/depreciation on: Investments (18,051,514 ) (4,145,274 ) (27,043,346 ) Futures and swaps (282,663 ) — (2,462,807 ) Foreign currency 3,799,158 67 — (14,535,019 ) (4,145,207 ) (29,506,153 ) Total Realized and Unrealized Loss (30,760,537 ) (10,125,766 ) (37,706,758 ) Dividends to Preferred Shareholders From Net investment income (4,703,281 ) — (4,209,154 ) Net Decrease in Net Assets Applicable to Common Shareholders Resulting from Operations $ (13,320,902 ) $ (3,497,893 ) $ (24,128,992 ) See Notes to Financial Statements. 26 SEMI-ANNUAL REPORT JUNE 30, 2008 BlackRock BlackRock Increase (Decrease) in Net Assets Applicable to Common Shareholders Six Months Year Ended Six Months Year Ended Operations Net investment income $ 22,142,916 $ 47,903,772 $ 6,627,873 $ 12,884,718 Net realized loss (16,225,518 ) (10,326,522 ) (5,980,559 ) (1,962,158 ) Net change in unrealized appreciation/depreciation (14,535,019 ) (22,345,656 ) (4,145,207 ) (9,438,736 ) Dividends to Preferred Shareholders from net investment income (4,703,281 ) (12,723,631 ) — — Net increase (decrease) in net assets applicable to Common Shareholders resulting from operations (13,320,902 ) 2,507,963 (3,497,893 ) 1,483,824 Dividends and Distributions From Net investment income (14,244,870 ) (26,833,571 ) (4,970,500 ) (12,923,299 ) Tax return of capital — (8,473,282 ) — — Decrease in net assets resulting from dividends and distributions to shareholders (14,244,870 ) (35,306,853 ) (4,970,500 ) (12,923,299 ) Capital Share Transactions Reinvestment of common dividends — 820,433 — — Net Assets Applicable to Common Shareholders Total decrease in net assets (27,565,772 ) (31,978,457 ) (8,468,393 ) (11,439,475 ) Beginning of period 417,086,106 449,064,563 135,098,136 146,537,611 End of period $ 389,520,334 $ 417,086,106 $ 126,629,743 $ 135,098,136 End of period undistributed (distributions in excess of) net investment income $ 3,414,097 $ 219,332 $ 1,624,164 $ (33,209 ) BlackRock Increase (Decrease) in Net Assets Applicable to Common Shareholders Six Months Ended Year Ended Operations Net investment income $ 17,786,920 $ 37,729,277 Net realized loss (8,200,605 ) (24,690,221 ) Net change in unrealized appreciation/depreciation (29,506,153 ) (61,889,014 ) Dividends and distributions to Preferred Shareholders from: Net investment income (4,209,154 ) (11,458,715 ) Net realized gain — (87,490 ) Net decrease in net assets applicable to Common Shareholders resulting from operations (24,128,992 ) (60,396,163 ) Dividends and Distributions From Net investment income (11,491,148 ) (29,219,599 ) Net realized gain — (312,510 ) Tax return of capital — (2,820,986 ) Decrease in net assets resulting from dividends and distributions to shareholders (11,491,148 ) (32,353,095 ) Capital Share Transactions Reinvestment of common dividends — 770,755 Net Assets Applicable to Common Shareholders Total decrease in net assets (35,620,140 ) (91,978,503 ) Beginning of period 358,016,991 449,995,494 End of period $ 322,396,851 $ 358,016,991 End of period distributions in excess of net investment income $ (484,710 ) $ (2,571,328 ) See Notes to Financial Statements. SEMI-ANNUAL REPORT JUNE 30, 2008 27 Six Months Ended June 30, 2008 (Unaudited) BlackRock Cash Provided by Operating Activities Net decrease in net assets resulting from operations $ (3,497,893 ) Adjustments to reconcile net decrease in net assets resulting from operations to net cash from operating activities Decrease in receivables 582,136 Increase in prepaid expenses and other assets (51,293 ) Decrease in other liabilities (92,693 ) Net realized and unrealized loss 10,125,784 Amortization of premium and discount on investments (474,585 ) Proceeds from sales and paydowns of long-term securities 48,119,313 Purchases of long-term securities (26,139,713 ) Net proceeds from sales of short-term investments 320,028 Cash provided by operating activities 28,891,084 Cash Used for Financing Activities Cash receipts from borrowings 14,000,000 Cash payments from borrowings (37,000,000 ) Cash dividends paid to shareholders (5,924,601 ) Cash used for financing activities (28,924,601 ) Cash impact from foreign currency fluctuations Cash impact from foreign currency fluctuations 67 Cash Net decrease in cash (33,450 ) Cash at beginning of period 44,305 Cash at end of period $ 10,855 Cash Flow Information Cash paid for interest $ 641,279 See Notes to Financial Statements. 28 SEMI-ANNUAL REPORT JUNE 30, 2008 Six Months Year Ended December 31, Period 2007 2006 2005 Per Share Operating Performance Net asset value, beginning of period $ 17.71 $ 19.11 $ 19.13 $ 19.21 $ 19.10 2 Net investment income 0.94 3 2.03 1.99 1.64 0.33 Net realized and unrealized gain (loss) (1.29 ) (1.39 ) (0.06 ) (0.17 ) 0.35 Dividends and distributions to Preferred Shareholders from: Net investment income (0.20 ) (0.54 ) (0.48 ) (0.33 ) (0.04 ) Net realized gain — — (0.01 ) — 4 — Net increase (decrease) from investment operations (0.55 ) 0.10 1.44 1.14 0.64 Dividends and distributions to Common Shareholders from: Net investment income (0.61 ) (1.14 ) (1.44 ) (1.22 ) (0.37 ) Net realized gain — — (0.02 ) — 4 — Tax return of capital — (0.36 ) — — — Total dividends and distributions to Common Shareholders (0.61 ) (1.50 ) (1.46 ) (1.22 ) (0.37 ) Capital charge with respect to issuance of: Common shares — — — — (0.04 ) Preferred shares — — — — (0.12 ) Total capital charges — — — — (0.16 ) Net asset value, end of period $ 16.54 $ 17.71 $ 19.11 $ 19.13 $ 19.21 Market price, end of period $ 14.83 $ 15.78 $ 19.27 $ 17.16 $ 18.63 Total Investment Return5 Based on net asset value (2.82 )%6 0.98 % 7.93 % 6.63 % 2.57 %6 Based on market price (2.21 )%6 (10.92 )% 21.31 % (1.34 )% (5.00 )%6 Ratios to Average Net Assets Applicable to Common Shareholders Total expenses after fees waived and paid indirectly and excluding interest expense7 1.15 %8 1.16 % 1.19 % 1.15 % 0.97 %8 Total expenses after fees waived and paid indirectly7 1.33 %8 1.33 % 1.43 % 1.23 % 0.97 %8 Total expenses after fees waived and before fees paid indirectly7 1.33 %8 1.33 % 1.43 % 1.23 % 0.97 %8 Total expenses7 1.62 %8 1.67 % 1.75 % 1.56 % 1.26 %8 Net investment income7 11.20 %8 10.83 % 10.38 % 8.52 % 5.04 %8 Dividends to Preferred Shareholders 2.38 %8 2.88 % 2.51 % 1.71 % 0.62 %8 Net investment income, to Common Shareholders 8.82 %8 7.95 % 7.87 % 6.81 % 4.42 %8 Supplemental Data Net assets applicable to Common Shareholders, end of period (000) $ 389,520 $ 417,086 $ 449,065 $ 449,219 $ 451,126 Preferred Shares outstanding, at liquidation preference, end of period (000) $ 58,800 $ 243,450 $ 243,450 $ 243,450 $ 243,450 Amount of loan outstanding, end of period (000) $ 184,650 — — — — Average amount of loan outstanding during the period $ 20,415 — — — — Portfolio turnover 17 % 41 % 50 % 46 % 11 % Asset coverage end of period $ 190,641 $ 67,849 $ 73,810 $ 71,139 $ 71,330 1 Commencement of operations. 2 Net asset value, beginning of period, reflects a deduction of $0.90 per share sales charge from the initial offering price of $20.00 per share. 3 Based on average shares outstanding. 4 Amount is less than ($0.01) per share. 5 Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Total investment returns exclude the effects of sales charges. 6 Aggregate total investment return. 7 Do not reflect the effect of dividends to Preferred Shareholders. 8 Annualized. See Notes to Financial Statements. SEMI-ANNUAL REPORT JUNE 30, 2008 29 Financial Highlights BlackRock High Income Shares (HIS) Six Months Year Ended December 31, 2007 2006 2005 2004 2003 Per Share Operating Performance Net asset value, beginning of period $ 2.47 $ 2.68 $ 2.61 $ 2.87 $ 2.86 $ 2.42 Net investment income 0.12 1 0.24 0.22 0.24 0.28 0.32 Net realized and unrealized gain (loss) (0.18 ) (0.21 ) 0.08 (0.23 ) 0.03 0.40 Net increase (decrease) from investment operations (0.06 ) 0.03 0.30 0.01 0.31 0.72 Dividends to shareholders from net investment income (0.09 ) (0.24 ) (0.23 ) (0.27 ) (0.30 ) (0.28 ) Net asset value, end of period $ 2.32 $ 2.47 $ 2.68 $ 2.61 $ 2.87 $ 2.86 Market price, end of period $ 2.05 $ 2.14 $ 2.55 $ 2.33 $ 2.90 $ 2.87 Total Investment Return2 Based on net asset value (2.00 )%3 1.58 % 12.32 % 0.43 % 11.46 % 31.10 % Based on market price (0.05 )%3 (7.51 )% 19.70 % (11.28 )% 12.24 % 37.23 % Ratios to Average Net Assets Total expenses after fees paid indirectly and excluding interest expense 1.14 %4 1.27 % 1.34 % 1.37 % 1.39 % 1.46 % Total expenses after fees paid indirectly 2.04 %4 3.55 % 3.77 % 3.04 % 2.23 % 2.21 % Total expenses 2.04 %4 3.56 % 3.78 % 3.04 % 2.23 % 2.21 % Net investment income 9.54 %4 8.89 % 8.42 % 8.82 % 9.70 % 11.99 % Supplemental Data Net assets, end of period (000) $ 126,630 $ 135,098 $ 146,538 $ 142,457 $ 155,298 $ 154,298 Amount of loans outstanding, end of period (000) $ 23,000 $ 46,000 $ 62,000 $ 66,000 $ 69,000 $ 68,000 Average amount of loans outstanding during the period (000) $ 27,440 $ 55,868 $ 62,838 $ 65,992 $ 64,081 $ 60,604 Portfolio turnover 19 % 69 % 83 % 115 % 56 % 93 % Asset coverage, end of period (000) $ 6,506 $ 3,937 $ 3,364 $ 3,158 $ 3,251 $ 3,269 1 Based on average shares outstanding. 2 Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Total investment returns exclude the effects of sales charges. 3 Aggregate total investment return. 4 Annualized. See Notes to Financial Statements. 30 SEMI-ANNUAL REPORT JUNE 30, 2008 Financial Highlights BlackRock Preferred Opportunity Trust (BPP) Six Months Year Ended December 31, Period 2007 2006 2005 2004 Per Share Operating Performance Net asset value, beginning of period $ 19.47 $ 24.52 $ 24.43 $ 25.88 $ 25.58 $ 23.88 2 Net investment income 0.97 3 2.05 2.05 2.11 2.22 1.72 Net realized and unrealized gain (loss) (2.04 ) (4.72 ) 0.62 (0.82 ) 0.33 1.93 Less dividends to Preferred Shareholders from: Net investment income (0.23 ) (0.62 ) (0.46 ) (0.26 ) (0.16 ) (0.10 ) Net realized gain — — (0.12 ) (0.13 ) (0.02 ) — Net increase (decrease) from investment operations (1.30 ) (3.29 ) 2.09 0.90 2.37 3.55 Less dividends and distributions to Common Shareholders: Net investment income (0.63 ) (1.59 ) (1.58 ) (1.74 ) (2.00 ) (1.66 ) Net realized gain — (0.02 ) (0.42 ) (0.61 ) (0.07 ) — Tax return of capital — (0.15 ) — — — — Total dividends and distributions to Common Shareholders (0.63 ) (1.76 ) (2.00 ) (2.35 ) (2.07 ) (1.66 ) Capital charge with respect to issuance of: Common Shares — — — — — (0.05 ) Auction Preferred Shares — — — — — (.14 ) Total captial charges — — — — — (.19 ) Net asset value, end of period $ 17.54 $ 19.47 $ 24.52 $ 24.43 $ 25.88 $ 25.58 Market price per share, end of period $ 17.55 $ 17.31 $ 26.31 $ 24.20 $ 25.39 $ 24.83 Total Investment Return4 Based on net asset value (6.62 )%5 (13.86 )% 8.89 % 3.81 % 10.15 % 14.65 %5 Based on market price 5.09 %5 (28.62 )% 17.98 % 4.83 % 11.01 % 6.28 %5 Ratios to Average Net Assets of Common Shareholders Total expenses after fees waived and paid indirectly and excluding interest expense6 1.29 %7 1.24 % 1.25 % 1.22 % 1.19 % 1.16 %7 Total expenses after fees waived and paid indirectly6 1.41 %7 1.45 % 1.62 % 1.51 % 1.44 % 1.52 %7 Total expenses after fees waived and before fees paid indirectly6 1.41 %7 1.45 % 1.62 % 1.51 % 1.44 % 1.52 %7 Total expenses6 1.41 %7 1.46 % 1.62 % 1.51 % 1.44 % 1.52 %7 Net investment income6 10.03 %7 8.90 % 8.46 % 8.37 % 8.66 % 8.35 %7 Dividends to Preferred Stock shareholders 2.37 %7 2.70 % 1.89 % 1.27 % 0.62 % 0.48 %7 Net investment income, to Common Shareholders 7.66 %7 6.20 % 6.58 % 7.10 % 8.04 % 7.87 %7 Supplemental Data Net assets applicable to Common Shares, end of period (000) $ 322,397 $ 358,017 $ 449,995 $ 447,190 $ 473,809 $ 468,243 Preferred Shares outstanding at liquidation preference, end of period (000) $ 110,400 $ 220,800 $ 220,800 $ 220,800 $ 220,800 $ 220,841 Portfolio turnover 51 % 97 % 91 % 77 % 88 % 98 % Asset coverage per Preferred Share, end of period $ 98,007 $ 65,554 $ 75,965 $ 75,642 $ 78,650 $ 78,021 1 Commencement of operations. 2 Net asset value, beginning of period, reflects a deduction of $1.12 per share sales charge from the initial offering price of $25.00 per share. 3 Based on average shares outstanding. 4 Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Total investment returns exclude the effects of sales charges. 5 Aggregate total investment return. 6 Do not reflect the effect of dividends to Preferred Shareholders. 7 Annualized. See Notes to Financial Statements. SEMI-ANNUAL REPORT JUNE 30, 2008 31 1. Significant Accounting Policies: BlackRock High Income Shares (“High Income”), a Massachusetts business trust, is registered as a diversified, closed-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”). BlackRock Global Floating Rate Income Trust (“Global”) and BlackRock Preferred Opportunity Trust (“Preferred Opportunity”) are organized as Delaware statutory trusts and are registered as non-diversified and diversified, respectively, closed-end management investment companies under the 1940 Act. Global, High Income and Preferred Opportunity are individually referred to as a “Trust” and collectively as the “Trusts”. The Trusts’ financial statements are prepared in conformity with accounting principles generally accepted in the United States of America. The following is a summary of significant accounting policies followed by the Trusts: Valuation of Investments: The Trusts value their bond investments on the basis of last available bid price or current market quotations provided by dealers or pricing services selected under the supervision each Trust’s respective Board of Directors or Trustees (the “Board”). Financial futures contracts traded on exchanges are valued at their last sale price. Swap agreements are valued by quoted fair values received daily by the Trusts’ pricing service or through brokers. Short-term securities are valued at amortized cost. Floating rate loan interests are valued at the mean between the last available bid prices from one or more brokers or dealers as obtained from a pricing service. In determining the value of a particular investment, pricing services may use certain information with respect to transactions in such investments, quotations from dealers, pricing matrixes, market transactions in comparable investments, various relationships observed in the market between investments and calculated yield measures based on valuation technology commonly employed in the market for such investments. Equity investments traded on a recognized securities exchange or the NASDAQ Global Market System are valued at the last reported sale price that day or the NASDAQ official closing price, if applicable. For equity investments traded on more than one exchange, the last reported sale price on the exchange where the stock is primarily traded is used. Equity investments traded on a recognized exchange for which there were no sales on that day are valued at the last available bid price. If no bid price is available, the prior day’s price will be used, unless it is determined that such prior day’s price no longer reflects the fair value of the security. Exchange-traded options are valued at the mean between the last bid and ask prices at the close of the options market in which the options trade. An exchange-traded option for which there is no mean price is valued at the last bid price. If no bid price is available, the prior day’s price will be used unless it is determined that the prior day’s price no longer reflects the fair value of the option. Over-the-counter options are valued by an independent pricing service using a mathematical model which incorporates a number of market data factors. In the event that application of these methods of valuation results in a price for an investment which is deemed not to be representative of the market value of such investment, the investment will be valued by a method approved by the Board as reflecting fair value (“Fair Value Assets”). When determining the price for Fair Value Assets, the investment advisor and/or sub-advisor seeks 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 subadvisor deems relevant. The pricing of all Fair Value Assets is subsequently reported to the Board or a committee thereof. Generally, trading in foreign securities is substantially completed each day at various times prior to the close of business on the New York Stock Exchange (“NYSE”). The values of such securities used in computing the net assets of each Trust are determined as of such times. Foreign currency exchange rates will be determined as of the close of business on the NYSE. Occasionally, events affecting the values of such securities and such exchange rates may occur between the times at which they are determined and the close of business on the NYSE that may not be reflected in the computation of the Trust’s net assets. If events (for example, a company announcement, market volatility or a natural disaster) occur during such periods that are expected to materially affect the value of such securities, those securities may be valued at their fair value as determined in good faith by the Board or by the investment advisor using a pricing service and/or procedures approved by the Board. Derivative Financial Instruments: The Trusts may engage in various Trust investment strategies to increase the return of the Trusts and to hedge, or protect, its exposure to interest rate movements and movements in the securities markets. Losses may arise if the value of the contract decreases due to an unfavorable change in the price of the underlying security, or if the counterparty does not perform under the contract. • Financial futures contracts — Each Trust may purchase or sell financial futures contracts and options on such financial futures contracts. Futures contracts are contracts for delayed delivery of securities at a specific future date and at a specific price or yield. Upon entering into a contract, the Trust deposits and maintains as collateral such initial margin as required by the exchange on which the transaction is effected. Pursuant to the contract, the Trust agrees to receive from, or pay, to the broker an amount of cash equal to the daily fluctuation in value of the contract. Such receipts or payments are known as variation margin and are recognized by the Trust as unrealized gains or losses. When the contract is closed, the Trust records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. • Forward foreign currency contracts — Each Trust may enter into forward foreign currency contracts as a hedge against either specific transactions or Trust positions. Forward currency contracts, when used by the Trust, help to manage the overall exposure to the foreign currency backing some of the investments held by the Trust. The contract is marked-to-market daily and the change in market value is recorded by the Trust as an unrealized gain or loss. When the contract is closed, the Trust records 32 SEMI-ANNUAL REPORT JUNE 30, 2008 Notes to Financial Statements (continued) a realized gain or loss equal to the difference between the value at the time it was opened and the value at the time it was closed. • Options — Each Trust may purchase and write call and put options. When the Trust writes an option, an amount equal to the premium received by the Trust is reflected as an asset and an equivalent liability. The amount of the liability is subsequently marked-to-market to reflect the current market value of the option written. When a security is purchased or sold through an exercise of an option, the related premium paid (or received) is added to (or deducted from) the basis of the security acquired or deducted from (or added to) the proceeds of the security sold. When an option expires (or the Trust enters into a closing transaction), the Trust realizes a gain or loss on the option to the extent of the premiums received or paid (or gain or loss to the extent the cost of the closing transaction exceeds the premium received or paid). A call option gives the purchaser of the option the right (but not the obligation) to buy, and obligates the seller to sell (when the option is exercised), the underlying position at the exercise price at any time or at a specified time during the option period. A put option gives the holder the right to sell and obligates the writer to buy the underlying position at the exercise price at any time or at a specified time during the option period. • Swaps — Each Trust may enter into swap agreements, in which the Trust and a counterparty agree to make periodic net payments on a specified notional amount. These periodic payments received or made by the Trust are recorded in the accompanying Statement of Operations as realized gains or losses, respectively. Gains or losses are realized upon termination of the swap agreements. Swaps are marked-to-market daily and changes in value are recorded as unrealized appreciation (depreciation). When the swap is terminated, the 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. Credit default swaps — Credit default swaps are agreements in which one party pays fixed periodic payments to a counterparty in consideration for a guarantee from the counterparty to make a specific payment should a negative credit event take place. Interest rate swaps — Interest rate swaps are agreements 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. In more complex swaps, the notional principal amount may decline (or amortize) over time. Total return swaps — Total return swaps are agreements in which one party commits to pay interest in exchange for a market-linked return. To the extent the total return of the security or index underlying the transaction exceeds or falls short of the offsetting interest rate obligation, the Trust will receive a payment from or make a payment to the counterparty. Foreign Currency Transactions: Foreign currency amounts are translated into United States dollars on the following basis: (i) market value of investment securities, assets and liabilities at the current rate of exchange; and (ii) purchases and sales of investment securities, income and expenses at the rates of exchange prevailing on the respective dates of such transactions. The Trust reports foreign currency related transactions as components of realized gains for financial reporting purposes, whereas such components are treated as ordinary income for federal income tax purposes. Capital Trusts/Trust Preferred Stock: These securities are typically issued by corporations, generally in the form of interest-bearing notes with preferred securities characteristics, or by an affiliated business trust of a corporation, generally in the form of beneficial interests in subordinated debentures or similarly structured securities. The securities can be structured as either fixed or adjustable coupon securities that can have either a perpetual or stated maturity date. Dividends can be deferred without creating an event of default or acceleration, although maturity cannot take place unless all cumulative payment obligations have been met. The deferral of payments does not affect the purchase or sale of these securities in the open market. Payments on these securities are treated as interest rather than dividends for Federal income tax purposes. These securities can have a rating that is slightly below that of the issuing company’s senior debt securities. Floating Rate Loans: Certain Trusts may invest in floating rate loans, which are generally non-investment grade, made by banks, other financial institutions and privately and publicly offered corporations. Floating rate loans are senior in the debt structure of a corporation. Floating rate loans generally pay interest at rates that are periodically determined by reference to a base lending rate plus a premium. The base lending rates are generally (i) the lending rate offered by one or more European banks, such as LIBOR (London InterBank Offered Rate), (ii) the prime rate offered by one or more U.S. banks or (iii) the certificate of deposit rate. The Trust considers these investments to be investments in debt securities for purposes of its investment policies. The Trust earns and/or pays facility and other fees on floating rate loans. Other fees earned/paid include commitment, amendment, consent, commissions and prepayment penalty fees. Facility, amendment and consent fees are typically amortized as premium and/or accreted as discount over the term of the loan. Commitment, commission and various other fees are recorded as income or expense. Prepayment penalty fees are recorded as gains or losses. When the Trust buys a floating rate loan it may receive a facility fee and when it sells a floating rate loan it may pay a facility fee. On an ongoing basis, the Trust may receive a commitment fee based on the undrawn portion of the underlying line of credit portion of a floating rate loan. In certain circumstances, the Trust may receive a prepayment penalty fee upon the prepayment of a floating rate loan by a borrower. Other fees received by the Trust may include covenant waiver fees and covenant modification fees. The Trust may invest in multiple series or tranches of a loan. A different series or tranche may have varying terms and carry different associated risks. Floating rate loans are usually freely callable at the issuer’s option. The Trust may invest in such loans in the form of participations in loans (“Participations”) and assignments of all or a portion of loans from third SEMI-ANNUAL REPORT JUNE 30, 2008 33 Notes to Financial Statements (continued) parties. Participations typically will result in the Trust having a contractual relationship only with the lender, not with the borrower. The Trust will have the right to receive payments of principal, interest and any fees to which it is entitled only from the lender selling the Participation and only upon receipt by the lender of the payments from the borrower. In connection with purchasing Participations, the Trust generally will have no right to enforce compliance by the borrower with the terms of the loan agreement relating to the loans, nor any rights of offset against the borrower, and the Trust may not benefit directly from any collateral supporting the loan in which it has purchased the Participation. As a result, the Trust will assume the credit risk of both the borrower and the lender that is selling the Participation. The Trust’s investments in loan participation interests involve the risk of insolvency of the financial intermediaries who are parties to the transactions. In the event of the insolvency of the lender selling the Participation, the Trust may be treated as a general creditor of the lender and may not benefit from any offset between the lender and the borrower. Preferred Stock: Certain Trusts may invest in preferred stocks. Preferred stock has a preference over common stock in liquidation (and generally in receiving dividends as well) but is subordinated to the liabilities of the issuer in all respects. As a general rule, the market value of preferred stock with a fixed dividend rate and no conversion element varies inversely with interest rates and perceived credit risk, while the market price of convertible preferred stock generally also reflects some element of conversion value. Because preferred stock is junior to debt securities and other obligations of the issuer, deterioration in the credit quality of the issuer will cause greater changes in the value of a preferred stock than in a more senior debt security with similar stated yield characteristics. Unlike interest payments on debt securities, preferred stock dividends are payable only if declared by the issuer’s board of directors. Preferred stock also may be subject to optional or mandatory redemption provisions. Reverse Repurchase Agreements: The Trusts may enter into reverse repurchase agreements with qualified third party broker-dealers. Interest on the value of the reverse repurchase agreements issued and outstanding is based upon competitive market rates at the time of issuance and is included within the related liability on the Statements of Assets and Liabilities. At the time the Trust enters into a reverse repurchase agreement, it identifies for segregation certain liquid securities having a value not less than the repurchase price, including accrued interest, of the reverse repurchase agreement. The Trust may utilize reverse repurchase agreements when it is anticipated that the interest income to be earned from the investment of the proceeds of the transaction is greater than the interest expense of the transaction. Reverse repurchase agreements involve the risk that the market value of the securities retained in lieu of sale by a Trust may decline below the price of the securities the Trust has sold but is obligated to repurchase. In the event the buyer of securities under a reverse repurchase agreement files for bankruptcy or becomes insolvent, such buyer or its trustee or receiver may receive an extension of time to determine whether to enforce a Trust’s obligations to repurchase the securities and the Trust’s use of the proceeds of the reverse repurchase agreement may effectively be restricted pending such decision. Segregation: In cases in which the 1940 Act and the interpretive positions of the Securities and Exchange Commission (“SEC”) require that the Trusts segregate assets in connection with certain investments (e.g., futures) or certain borrowings, each Trust will, consistent with certain interpretive letters issued by the SEC, designate on its books and records cash or other liquid debt securities having a market value at least equal to the amount that would otherwise be required to be physically segregated. Investment Transactions and Investment Income: Investment transactions are recorded on the dates the transactions are entered into (the trade dates). Realized gains and losses on security transactions are determined on the identified cost basis. Dividend income is recorded on the ex-dividend dates. Dividends from foreign securities where the ex-dividend date may have passed are subsequently recorded when the Trusts have determined the ex-dividend dates. Interest income is recognized on the accrual basis. The Trusts amortize all premiums and discounts on debt securities. Dividends and Distributions: Dividends to Common Shareholders from net investment income are declared and paid monthly. Distributions of capital gains are recorded on the ex-dividend dates. Dividends and distributions to Preferred Shareholders are accrued and determined as described in Note 5. If the total dividends and distributions made in any tax year exceeds net investment income and accumulated realized capital gains, a portion of the total distribution may be treated as a tax return of capital. Income Taxes: It is each of the Trust’s policy to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its taxable income to its shareholders. Therefore, no federal income tax provision is required. Under the applicable foreign tax laws, withholding taxes may be imposed on interest, dividends and capital gains at various rates. The Trusts file U.S. federal and various state and local tax returns. No income tax returns are currently under examination. The statute of limitations on the Trusts’ U.S. federal tax returns remains open for the years ended December 31, 2004 through December 31, 2006. The statute of limitations on the Trusts’ state and local tax returns may remain open for an additional year depending upon the jurisdiction. Deferred Compensation and BlackRock Closed-End Share Equivalent Investment Plan: Under the deferred compensation plan approved by the Trust’s Board, non-interested Directors/Trustees (“Independent Directors”) may defer a portion of their annual complex-wide compensation. Deferred amounts earn an approximate return as though equivalent dollar amounts had been invested in common shares of other certain BlackRock Closed-End Trusts selected by the Independent Directors. This has approximately the same economic effect for the Independent Directors as if the Independent Directors had invested the deferred amounts directly in other certain BlackRock Closed-End Trusts. The deferred compensation plan is not funded and obligations thereunder represent general unsecured claims against the general assets of the Trust. The Trust may, however, elect to invest in common stock of other certain BlackRock Closed-End Funds selected by the Independent Directors in order 34 SEMI-ANNUAL REPORT JUNE 30, 2008 Notes to Financial Statements (continued) to match its deferred compensation obligations. Investments to cover the Trusts’ deferred compensation liability, if any, are included in other assets on the Statement of Assets and Liabilities. Recent Accounting Pronouncement: In March 2008, Statement of Financial Accounting Standards No. 161, “Disclosures about Derivative Instruments and Hedging Activities – an amendment of FASB Statement No. 133” (“FAS 161”) was issued and is effective for fiscal years beginning after November 15, 2008. FAS 161 is intended to improve financial reporting for derivative instruments by requiring enhanced disclosure that enables investors to understand how and why an entity uses derivatives, how derivatives are accounted for, and how derivative instruments affect an entity’s results of operations and financial position. The impact on the Trusts’ financial statement disclosures, if any, is currently being assessed. Other: Expenses directly related to one of the Trusts are charged to that Trust. Other operating expenses shared by several funds are pro-rated among those funds on the basis of relative net assets or other appropriate methods. 2. Investment Advisory Agreement and Other Transactions with Affiliates: Each Trust has an Investment Advisory Agreement (“the Agreements”) with BlackRock Advisors, LLC (the “Advisor”), an indirect, wholly owned subsidiary of BlackRock, Inc. Merrill Lynch & Co., Inc. (“Merrill Lynch”) and The PNC Financial Services Group, Inc. are principal owners of BlackRock, Inc. The Agreements for the Trusts cover both investment advisory and administration services. The Advisor is responsible for the management of the Trust’s portfolio and provides the necessary personnel, facilities, equipment and certain other services necessary to the operations of the Trust. The investment advisory fee paid to the Advisor is computed weekly and payable monthly based on an annual rate equal to 0.75% of Global’s and 0.65% of Preferred Opportunity’s average weekly managed assets. “Managed assets” means the total assets of a Trust (including any assets attributable to any borrowing that may be outstanding) minus the sum of accrued liabilities (other than debt representing financial leverage). The investment advisory fee paid to the Advisor is computed weekly and payable monthly based on an annual rate equal to 0.75% of the first $200 million of High Income’s average weekly managed assets and 0.50% thereafter. The Advisor has voluntarily agreed to waive a portion of the investment advisory fees or other expenses on Global as a percentage of its average weekly managed assets as follows: 0.20% for the first five years of the Trust’s operations (through August 30, 2009), 0.15% in year six (through August 30, 2010), 0.10% in year seven (through August 30, 2011) and 0.05% in year eight (through August 30, 2012). The Advisor has entered into a separate sub-advisory agreement with BlackRock Financial Management, Inc. (“BFM”), an affiliate of the Advisor, under which the Advisor pays BFM for services it provides, a monthly fee that is a percentage of the investment advisory fee paid by each Trust to the Advisor. For the six months ended June 30, 2008 the Trusts reimbursed the Advisor for certain accounting services, which is included in accounting services in the Statement of Operations as follows: Reimbursement Global $ 5,231 High Income $ 1,059 Preferred $ 4,764 3. Investments: Purchases and sales of investments (including paydowns and payups), excluding short-term securities, for the six months ended June 30, 2008, were as follows: BlackRock BlackRock BlackRock Total Purchases $ 103,776,955 $ 29,838,861 $ 266,878,948 Total Sales $ 120,565,334 $ 49,769,974 $ 292,157,837 4. Capital Share Transactions: There are an unlimited number of $0.001 par value common shares authorized for Global and Preferred Opportunity. There are an unlimited number of no par value shares authorized for High Income. At June 30, 2008, the shares owned by affiliates of the Advisor of Global were 7,551. During the six months ended June 30, 2008 and the year ended December 31, 2007, the Trusts issued the following additional shares under their respective dividend reinvestment plans: June 30, 2008 December 31, 2007 Global — 42,574 High Income — — Preferred Opportunity — 30,981 As of June 30, 2008, Global and Preferred Opportunity have 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. Series Shares Global T7 784 W7 784 R7 784 Preferred Opportunity T7 1,472 W7 1,472 R7 1,472 On May 19, 2008, the Trust announced the following redemptions of Preferred Shares at a price of $25,000 per share plus any accrued and unpaid dividends through the redemption date: SEMI-ANNUAL REPORT JUNE 30, 2008 35 Notes to Financial Statements (continued) Global Series Redemption Shares to Aggregate T7 6/11/2008 2,462 $61,550,000 W7 6/12/2008 2,462 $61,550,000 R7 6/13/2008 2,462 $61,550,000 Preferred Opportunity Series Redemption Shares to Aggregate T7 6/11/2008 1,472 $36,800,000 W7 6/12/2008 1,472 $36,800,000 R7 6/13/2008 1,472 $36,800,000 The Trust financed the Preferred Shares redemptions with cash received from reverse repurchase agreements. Dividends on seven-day Preferred Shares are cumulative at a rate that is reset every seven days based on the results of an auction. If the Preferred Shares fail to clear the auction on an auction date, the Trusts are required to pay the maximum applicable rate on the Preferred Shares to holders of such shares for successive dividend periods until such time as the shares are successfully auctioned. The maximum applicable rate on Preferred Shares for Global is the higher of 125% of the 7-day Telerate/BBA LIBOR rate or 125% over the 7-day Telerate/BBA LIBOR rate and for Preferred Opportunity is 150% of the Interest Equivalent of the 30-day commercial paper rate. During the six months ended June 30, 2008, Preferred Shares of the Trusts were successfully auctioned at each auction date until February 13, 2008. The dividend ranges on the Preferred Shares for Global and Preferred Opportunity for the six months ended June 30, 2008 were as follows: Series Low High Average Global T7 3.55 % 5.60 % 4.111 % W7 3.55 5.00 4.093 R7 3.549 5.00 4.083 Preferred Opportunity T7 3.32 5.50 4.022 W7 3.22 5.25 3.966 R7 3.231 5.00 3.987 Since February 13, 2008, the Preferred Shares of the Trusts failed to clear any of their auctions. As a result, the Preferred Shares dividend rates were reset to the maximum applicable rate, which ranged from 3.22% to 4.65%. A failed auction is not an event of default for the Trust but it is a liquidity event for the holders of the Preferred Shares. A failed auction occurs when there are more sellers of a Trust’s Preferred Shares than buyers. It is impossible to predict how long this imbalance will last. A successful auction for the Trust’s Preferred Shares may not occur for some time, if ever, and even if liquidity does resume, holders of Preferred Shares may not have the ability to sell the Preferred Shares at its liquidation preference. Global and Preferred Opportunity may not declare dividends or make other distributions on Common Shares or purchase any such shares if, at the time of the declaration, distribution or purchase, asset coverage with respect to the outstanding Preferred Shares is less than 200%. The Preferred Shares are redeemable at the option of Global and Preferred Opportunity, in whole or in part, on any dividend payment date at $25,000 per share plus any accumulated or unpaid dividends whether or not declared. The Preferred 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 the Trust, as set forth in the Trust’s Statement of Preferences, are not satisfied. The holders of Preferred Shares have voting rights equal to the holders of Common Shares (one vote per share) and will vote together with holders of Common Shares (one vote per share) as a single class. However, holders of Preferred Shares, voting as a separate class, are also entitled to elect two Trustees for Global and Preferred Opportunity. 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 the Trust’s subclassification as a closed-end investment company or change its fundamental investment restrictions or (c) change its business so as to cease to be an investment company. 5. Short-Term Borrowings: Global and High Income are a party to a revolving credit and security agreement funded by a commercial paper asset securitization program with Citicorp North America, Inc. (“Citicorp”), as Agent, certain secondary backstop lenders and certain asset securitization conduits, as lenders (the “Lenders”). The agreement was renewed for one year and has a maximum limit of $190,000,000 for Global and $80,000,000 for High Income. Under the Citicorp administered program, the conduits will fund advances to the Trusts through highly rated commercial paper. The Trusts have granted a security interest in substantially all of its assets to, and in favor of, the Lenders as security for its obligations to the Lenders. The interest rate on the Trusts borrowings is based on the interest rate carried by the commercial paper plus a program fee. In addition, the Trusts pay a liquidity fee to the secondary backstop lenders and the agent. These amounts are shown on the Statement of Operations as borrowing costs. For the six months ended June 30, 2008, the Global Floating Rate Income Trust’s daily weighted average interest rate was 3.31%. 6. Reverse Repurchase Agreements: For the six months ended June 30, 2008, Global Floating Rate Income Trust’s average amount outstanding was approximately $453,000 and the daily weighted average interest rate was 2.25%. For the six months ended June 30, 2008, Preferred Opportunity Trust’s average amount outstanding was approximately $12,773,000 and the daily weighted average interest rate was 3.44%. 36 SEMI-ANNUAL REPORT JUNE 30, 2008 Notes to Financial Statements (concluded) 7. Capital Loss Carryforward: As of December 31, 2007, the following Trusts had a capital loss carryforward available to offset future realized capital gains through the indicated expiration dates: Capital Loss Expires Global $ 3,268,804 2015 High Income $ 35,363,213 2008 55,878,284 2009 102,576,339 2010 28,467,396 2011 2,339,279 2012 7,043,976 2014 $ 231,668,487 Preferred Opportunity $ 18,184,893 2015 8. Subsequent Events: Each Trust paid a monthly distribution to holders of Common Shares on July 31, 2008 to shareholders of record on July 15, 2008. The per share amounts were as follows: Common Dividend Global $ 0.105000 High Income $ 0.018200 Preferred Opportunity $ 0.125000 The dividends declared on Preferred Shares for the period July 1, 2008 to July 31, 2008 for Global and Preferred Opportunity were as follows: Series Dividends Global T7 $ 74,762 W7 $ 58,831 R7 $ 60,893 Preferred Opportunity T7 $ 124,631 W7 $ 124,207 R7 $ 98,580 SEMI-ANNUAL REPORT JUNE 30, 2008 37 The Board of Trustees (collectively, the “Board,” the members of which are referred to as “Trustees”) of the BlackRock Global Floating Rate Income Trust (“BGT”), BlackRock High Income Shares (“HIS”) and BlackRock Preferred Opportunity Trust (“BPP”), and together with HIS and BGT, the “Funds”) met in April and May 2008 to consider approving the continuation of each Fund’s investment advisory agreement (each, an “Advisory Agreement”) with BlackRock Advisors, LLC (the “Advisor”), each Fund’s investment adviser. The Board also considered the approval of each Fund’s subadvisory agreement (each, a “Subadvisory Agreement” and, together with the “Advisory Agreement,” the “Agreements”) between the Advisor and BlackRock Financial Management, Inc. (the “Subadvisor”). The Advisor and the Subadvisor are collectively referred to herein as the “Advisors” and, together with BlackRock, Inc., “BlackRock.” Activities and Composition of the Board The Board of Trustees of each Fund consists of thirteen individuals, eleven of whom are not “interested persons” of the Funds as defined in the Investment Company Act of 1940 (the “1940 Act”) (the “Independent Trustees”). The Trustees are responsible for the oversight of the operations of the Funds and perform the various duties imposed on the directors of investment companies by the 1940 Act. The Independent Trustees have retained independent legal counsel to assist them in connection with their duties. The Chairman of the Board is an Independent Trustee. The Board has established four standing committees: an Audit Committee, a Governance and Nominating Committee, a Compliance Committee and a Performance Oversight Committee. Advisory Agreement and Subadvisory Agreement Upon the consummation of the combination of BlackRock, Inc.’s investment management business with Merrill Lynch & Co., Inc.’s investment management business, including Merrill Lynch Investment Managers, L.P., and certain affiliates, each Fund entered into an Advisory Agreement and a Subadvisory Agreement, each with an initial two-year term. Consistent with the 1940 Act, after the Advisory Agreement’s and Subadvisory Agreement’s respective initial two-year term, the Board is required to consider the continuation of each Fund’s Advisory Agreement and Subadvisory Agreement on an annual basis. In connection with this process, the Board assessed, among other things, the nature, scope and quality of the services provided to each Fund by the personnel of BlackRock and its affiliates, including investment advisory services, administrative services, secondary market support services, oversight of fund accounting and custody, and assistance in meeting legal and regulatory requirements. The Board also received and assessed information regarding the services provided to each Fund by certain unaffiliated service providers. Throughout the year, the Board also considered a range of information in connection with its oversight of the services provided by BlackRock and its affiliates. Among the matters the Board considered were: (a) investment performance for one-, three- and five-year periods, as applicable, against peer funds, as well as senior management and portfolio managers’ analysis of the reasons for underperformance, if applicable; (b) fees, including advisory, administration and other fees paid to BlackRock and its affiliates by each Fund, as applicable; (c) Fund operating expenses paid to third parties; (d) the resources devoted to and compliance reports relating to each Fund’s investment objective, policies and restrictions; (e) each Fund’s compliance with its Code of Ethics and compliance policies and procedures; (f) the nature, cost and character of non-investment management services provided by BlackRock and its affiliates; (g) BlackRock’s and other service providers’ internal controls; (h) BlackRock’s implementation of the proxy voting guidelines approved by the Board; (i) execution quality; (j) valuation and liquidity procedures; and (k) reviews of BlackRock’s business, including BlackRock’s response to the increasing scale of its business. Board Considerations in Approving the Advisory Agreement and Subadvisory Agreement To assist the Board in its evaluation of the Agreements, the Trustees received information from BlackRock in advance of the April 22, 2008 meeting which detailed, among other things, the organization, business lines and capabilities of the Advisors, including: (a) the responsibilities of various departments and key personnel and biographical information relating to key personnel; (b) financial statements for BlackRock; (c) the advisory and/or administrative fees paid by each Fund to the Advisors, including comparisons, compiled by Lipper, Inc., (“Lipper”), an independent third party, with the management fees, which include advisory and administration fees, of funds with similar investment objectives (“Peers”); (d) the profitability of BlackRock and certain industry profitability analyses for advisers to registered investment companies; (e) the expenses of BlackRock in providing various services; (f) non-investment advisory reimbursements, if applicable, and “fallout” benefits to BlackRock; (g) economies of scale, if any, generated through the Advisors’ management of all of the BlackRock closed-end funds (the “Fund Complex”); (h) the expenses of each Fund, including comparisons of respective Fund’s expense ratios (both before and after any fee waivers) with the expense ratios of its Peers; (i) an internal comparison of management fees classified by Lipper, if applicable; and (j) each Fund’s performance for the past one-, three- and five-year periods, as applicable, as well as each Fund’s performance compared to its Peers. The Board also considered other matters it deemed important to the approval process, where applicable, such as payments made to BlackRock or its affiliates relating to the distribution of Fund shares, services related to the valuation and pricing of Fund portfolio holdings, and direct and indirect benefits to BlackRock and its affiliates from their relationship with the Funds. In addition to the foregoing materials, independent legal counsel to the Independent Trustees provided a legal memorandum outlining, among other things, the duties of the Board under the 1940 Act, as well as the general principles of relevant law in reviewing and approving advisory contracts, the requirements of the 1940 Act in such matters, an adviser’s fiduciary duty with respect to advisory agreements and compensation, and the standards used by courts in determining whether investment company boards of directors have fulfilled their duties and the factors to be considered by boards in voting on advisory agreements. 38 SEMI-ANNUAL REPORT JUNE 30, 2008 Disclosure of Investment Advisory Agreement and Subadvisory Agreement (continued) The Independent Trustees reviewed this information and discussed it with independent legal counsel prior to the meeting on April 22, 2008. At the Board meeting on April 22, 2008, BlackRock made a presentation to and responded to questions from the Board. Following the meeting on April 22, 2008, the Board presented BlackRock with questions and requests for additional information. BlackRock responded to these requests with additional written materials provided to the Trustees prior to the meetings on May 29 and 30, 2008. At the Board meetings on May 29 and 30, 2008, BlackRock responded to further questions from the Board. In connection with BlackRock’s presentations, the Board considered each Agreement and, in consultation with independent legal counsel, reviewed the factors set out in judicial decisions and SEC statements relating to the renewal of the Agreements. Matters Considered by the Board In connection with its deliberations with respect to the Agreements, the Board considered all factors it believed relevant with respect to each Fund, including the following: the nature, extent and quality of the services provided by the Advisors; the investment performance of each Fund; the costs of the services to be provided and profits to be realized by the Advisors and their affiliates from their relationship with the Funds; the extent to which economies of scale would be realized as the Fund Complex grows; and whether BlackRock realizes other benefits from its relationship with the Funds. A. Nature, Extent and Quality of the Services: In evaluating the nature, extent and quality of the Advisors’ services, the Board reviewed information concerning the types of services that the Advisors provide and are expected to provide to each Fund, narrative and statistical information concerning each Fund’s performance record and how such performance compares to each Fund’s Peers, information describing BlackRock’s organization and its various departments, the experience and responsibilities of key personnel and available resources. The Board noted the willingness of the personnel of BlackRock to engage in open, candid discussions with the Board. The Board further considered the quality of the Advisors’ investment process in making portfolio management decisions. In addition to advisory services, the Trustees considered the quality of the administrative and non-investment advisory services provided to the Funds. The Advisors and their affiliates provided each Fund with such administrative and other services, as applicable (in addition to any such services provided by others for the Funds), and officers and other personnel as are necessary for the operations of the respective Fund. In addition to investment management services, the Advisors and their affiliates provided each Fund with services such as: preparing shareholder reports and communications, including annual and semi-annual financial statements and the Funds’ websites; communications with analysts to support secondary market trading; assisting with daily accounting and pricing; preparing periodic filings with regulators and stock exchanges; overseeing and coordinating the activities of other service providers; administering and organizing Board meetings and preparing the Board materials for such meetings; providing legal and compliance support (such as helping to prepare proxy statements and responding to regulatory inquiries); and performing other Fund administrative tasks necessary for the operation of the respective Fund (such as tax reporting and fulfilling regulatory filing requirements). The Board considered the Advisors’ policies and procedures for assuring compliance with applicable laws and regulations. B. The Investment Performance of the Funds and BlackRock: As previously noted, the Board received performance information regarding each Fund and its Peers. Among other things, the Board received materials reflecting each Fund’s historic performance and each Fund’s performance compared to its Peers. More specifically, each Fund’s one-, three- and five-year total returns (as applicable) were evaluated relative to its Peers (including the Peers’ median performance). The Board reviewed a narrative and statistical analysis of the Lipper data that was prepared by BlackRock, which analyzed various factors that affect Lipper rankings. The Board noted that in general HIS performed better than its Peers in that the Fund’s performance was at or above the median in at least two of the one-, three- and five-year periods reported. The Board noted that in general BPP and BGT performed better than their respective Peers in that each Fund’s performance was at or above the median of its respective Peers in at least two of the one-year, three-year and since inception periods reported. After considering this information, the Boards concluded that the performance of each Fund, in light of and after considering the other facts and circumstances applicable to each Fund, supports a conclusion that each Fund’s Agreements should be renewed. C. Consideration of the Advisory Fees and the Cost of the Services and Profits to be Realized by BlackRock and its Affiliates from their Relationship with the Funds: In evaluating the management fees and expenses that each Fund is expected to bear, the Board considered each Fund’s current management fee structure and each Fund’s expense ratios in absolute terms as well as relative to the fees and expense ratios of its applicable Peers. The Board, among other things, reviewed comparisons of each Fund’s gross management fees before and after any applicable reimbursements and fee waivers and total expense ratios before and after any applicable waivers with those of applicable Peers. The Board also reviewed a narrative analysis of the Peer rankings prepared by Lipper and summarized by BlackRock at the request of the Board. This summary placed the Peer rankings into context by analyzing various factors that affect these comparisons. The Board noted that BGT and BPP paid contractual management fees lower than or equal to the median contractual fees paid by each Fund’s respective Peers. This comparison was made without giving effect to any expense reimbursements or fee waivers. The Board noted that, although HIS paid contractual management fees higher than the median of its Peers, such fees were no more than 5 basis points greater than the median amount and therefore considered not to be materially higher than its Peers. This comparison was made without giving effect to any expense reimbursements or fee waivers. SEMI-ANNUAL REPORT JUNE 30, 2008 39 Disclosure of Investment Advisory Agreement and Subadvisory Agreement (concluded) The Board also compared the management fees charged and services provided by the Advisors to closed-end funds in general versus other types of clients (such as open-end investment companies and separately managed institutional accounts) in similar investment categories. The Board noted certain differences in services provided and costs incurred by the Advisor with respect to closed-end funds compared to these other types of clients and the reasons for such differences. In connection with the Board’s consideration of the fees and expense information, the Board reviewed the considerable investment management experience of the Advisors and considered the high level of investment management, administrative and other services provided by the Advisors. In light of these factors and the other facts and circumstances applicable to each Fund, the Board concluded that the fees paid and level of expenses incurred by each Fund under its Agreements support a conclusion that each Fund’s Agreements should be renewed. D. Profitability of BlackRock: The Board also considered BlackRock’s profitability in conjunction with its review of fees. The Board reviewed BlackRock’s profitability with respect to the Fund Complex and other fund complexes managed by the Advisors. In reviewing profitability, the Board recognized that one of the most difficult issues in determining profitability is establishing a method of allocating expenses. The Board also reviewed BlackRock’s assumptions and methodology of allocating expenses, noting the inherent limitations in allocating costs among various advisory products. The Board also recognized that individual fund or product line profitability of other advisors is generally not publicly available. The Board recognized that profitability may be affected by numerous factors including, among other things, the types of funds managed, expense allocations and business mix, and therefore comparability of profitability is somewhat limited. Nevertheless, to the extent available, the Board considered BlackRock’s operating margin compared to the operating margin estimated by BlackRock for a leading investment management firm whose operations consist primarily of advising closed-end funds. The comparison indicated that BlackRock’s operating margin was approximately the same as the operating margin of such firm. In evaluating the reasonableness of the Advisors’ compensation, the Board also considered any other revenues paid to the Advisors, including partial reimbursements paid to the Advisors for certain non-investment advisory services, if applicable. The Board noted that these payments were less than the Advisors’ costs for providing these services. The Board also considered indirect benefits (such as soft dollar arrangements) that the Advisors and their affiliates are expected to receive, which are attributable to their management of the Fund. The Board concluded that BlackRock’s profitability, in light of all the other facts and circumstances applicable to each Fund, supports a conclusion that each Fund’s Agreements should be renewed. E. Economies of Scale: In reviewing each Fund’s fees and expenses, the Board examined the potential benefits of economies of scale, and whether any economies of scale should be reflected in the Fund’s fee structure, for example through the use of breakpoints for the Fund or the Fund Complex. In this regard, the Board reviewed information provided by BlackRock, noting that most closed-end fund complexes do not have fund-level breakpoints because closed-end funds generally do not experience substantial growth after their initial public offering and each fund is managed independently consistent with its own investment objectives. The Board noted that only three closed-end funds in the Fund Complex have breakpoints in their fee structures, including HIS. Information provided by Lipper also revealed that only one closed-end fund complex used a complex-level breakpoint structure. The Board found, based on its review of comparable funds, that each Fund’s management fee is appropriate in light of the scale of the Fund. F. Other Factors: In evaluating fees, the Board also considered indirect benefits or profits the Advisors or their affiliates may receive as a result of their relationships with the Funds (“fall-out benefits”). The Trustees, including the Independent Trustees, considered the intangible benefits that accrue to the Advisors and their affiliates by virtue of their relationships with the Funds, including potential benefits accruing to the Advisors and their affiliates as a result of participating in offerings of the Funds’ shares, potentially stronger relationships with members of the broker-dealer community, increased name recognition of the Advisors and their affiliates, enhanced sales of other investment funds and products sponsored by the Advisors and their affiliates and increased assets under management which may increase the benefits realized by the Advisors from soft dollar arrangements with broker-dealers. The Board also considered the unquantifiable nature of these potential benefits. Conclusion with Respect to the Agreements In reviewing the Agreements, the Trustees did not identify any single factor discussed above as all-important or controlling and different Trustees may have attributed different weights to the various factors considered. The Trustees, including the Independent Trustees, unanimously determined that each of the factors described above, in light of all the other factors and all of the facts and circumstances applicable to each respective Fund, was acceptable for each Fund and supported the Trustees’ conclusion that the terms of each Agreement were fair and reasonable, that each Fund’s fees are reasonable in light of the services provided to the respective Fund and that each Agreement should be approved. 40 SEMI-ANNUAL REPORT JUNE 30, 2008 Richard E. Cavanagh, Chairman of the Board and Trustee Karen P. Robards, Vice Chair of the Board, Chair of the Audit Committee and Trustee G. Nicholas Beckwith, III, Trustee Richard S. Davis, Trustee Kent Dixon, Trustee Kathleen F. Feldstein, Trustee James T. Flynn, Trustee Henry Gabbay, Trustee Jerrold B. Harris, Trustee R. Glenn Hubbard, Trustee W. Carl Kester, Trustee Robert S. Salomon, Jr., Trustee Donald C. Burke, Trust President and Chief Executive Officer Anne F. Ackerley, Vice President Neal J. Andrews, Chief Financial Officer Jay M. Fife, Treasurer Brian P. Kindelan, Chief Compliance Officer of the Trusts Howard Surloff, Secretary Custodian State Street Bank and Trust Company Boston, MA 02101 Transfer Agents For All Trusts Computershare Trust Companies, N.A. Canton, MA 02021 Preferred Shares: For Global and Preferred Opportunity BNY Mellon Shareowner Services Jersey City, N.J. 07310 Accounting Agent State Street Bank and Trust Company Princeton, NJ 08540 Independent Registered Public Accounting Firm Deloitte & Touche LLP Princeton, NJ 08540 Legal Counsel Skadden, Arps, Slate, Meagher & Flom LLP New York, NY 10036 Fund Address BlackRock Closed-End Funds c/o BlackRock Advisors, LLC 100 Bellevue Parkway Wilmington, DE 19809 SEMI-ANNUAL REPORT JUNE 30, 2008 41 Availability of Quarterly Schedule of Investments Each Trust files their complete schedule of portfolio holdings with the Securities and Exchange Commission (“SEC”) for the first and third quarters of each fiscal year on Form N-Q. Each Trust’s Forms N-Q are available on the SEC’s website at http://www.sec.gov and may also be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling (800) SEC-0330. Each Trust’s Forms N-Q may also be obtained upon request and without charge by calling (800) 441-7762. Electronic Delivery Electronic copies of most financial reports are available on the Trusts’ website or shareholders can sign up for e-mail notifications of quarterly statements, annual and semi-annual reports and prospectuses by enrolling in the Trusts’ electronic delivery program. Shareholders Who Hold Accounts with Investment Advisors, Banks or Brokerages: Please contact your financial advisor to enroll. Please note that not all investment advisors, banks or brokerages may offer this service. General Information 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 it 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) 441-7762 Quarterly performance, semi-annual and annual reports and other information regarding each Trust 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 each Trust and does not, and is not intended to, incorporate BlackRock’s website into this report. 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 nonpublic 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. 42 SEMI-ANNUAL REPORT JUNE 30, 2008 Additional Information (concluded) Deposit Securities Effective May 30, 2008, following approval by the Fund’s Board and the applicable ratings agencies, the definition of “Deposited Securities” in the Fund’s Articles Supplementary was amended as follows in order to facilitate the redemption of the Fund’s Preferred Stock. The following phrase was added to the definition of “Deposit Securities” found in the Fund’s Articles Supplementary: ; provided, however, that solely in connection with any redemption of AMPS, the term Deposit Securities shall include (i) any committed financing pursuant to a credit agreement, reverse repurchase agreement facility or similar credit arrangement, in each case which makes available to the Corporation, no later than the day preceding the applicable redemption date, cash in an amount not less than the aggregate amount due to Holders by reason of the redemption of their shares of AMPS on such redemption date; and (ii) cash amounts due and payable to the Corporation out of a sale of its securities if such cash amount is not less than the aggregate amount due to Holders by reason of the redemption of their shares of AMPS on such redemption date and such sale will be settled not later than the day preceding the applicable redemption date. SEMI-ANNUAL REPORT JUNE 30, 2008 43 This report is transmitted to shareholders only. It is not a prospectus. Past performance results shown in this report should not be considered a representation of future performance. The Trusts have leveraged their Common Shares, which creates risks for Common Shareholders, including the likelihood of greater volatility of net asset value and market price of the Common Shares and the risk that fluctuations in the short-term dividend rates of the Preferred Shares, currently set at the maximum reset rate as a result of failed auctions, may affect the yield to Common Shareholders. Statements and other information herein are as dated and are subject to change. 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 (800) 411-7762; (2) at www.blackrock.com; and (3) on the Securities and Exchange Commission’s website at http://www.sec.gov. Information about how each Trust voted proxies relating to securities held in each Trust’s portfolio during the most recent 12-month period ended June 30 is available upon request and without charge (1) at www.blackrock.com or by calling (800) 441-7762 and (2) on the Securities and Exchange Commission’s website at http://www.sec.gov. #CEF-SEMI-5-0608 2 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. 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. 3
President, BlackRock Advisors, LLC
June 30, 2008
(000)
(000)
(000)
(000)
(000)
(000)
(000)
(000)
(000)
(000)
(000)
(000)
(000)
(000)
Appreciation
(Depreciation)
Inputs
Securities
Financial
Instruments*
Securities
(000)
(000)
(000)
(000)
(000)
(000)
(000)
(000)
Interest
(000)
Inputs
Securities
Securities
(000)
(000)
(000)
(000)
(000)
(000)
(Cost—$557,998,534)—151.1%
(000)
(Cost—$33,900,000)—10.5%
(Cost—$591,898,534*)—161.6%
Rate
Date
Date
Amount
Amount
Date
Value
Appreciation
Date
Value
Appreciation
Amount
(000)
Appreciation
(Depreciation)
Inputs
Securities
Financial
Instruments*
Global
Floating Rate
Income Trust
(BGT)
High
Income
Shares
(HIS)
Preferred
Opportunity
Trust
(BPP)
Global
Floating Rate
Income Trust
(BGT)
High
Income
Shares
(HIS)
Preferred
Opportunity
Trust
(BPP)
Global Floating Rate
Income Trust (BGT)
High Income Shares
(HIS)
Ended
June 30, 2008
(Unaudited)
December 31,
2007
Ended
June 30, 2008
(Unaudited)
December 31,
2007
Preferred Opportunity Trust (BPP)
June 30, 2008
(Unaudited)
December 31,
2007
High Income
Shares (HIS)
Ended
June 30, 2008
(Unaudited)
August 30, 20041
through
December 31, 2004
Ended
June 30, 2008
(Unaudited)
Ended
June 30, 2008
(Unaudited)
February 28, 20031
Through
December 31, 2003
From Advisor
Global Floating
Rate Income
Trust
High Income
Shares
Preferred
Opportunity
Trust
Date
be Redeemed
Price
Date
be Redeemed
Price
Carryforward
Amount
Per Share
Declared
Frank J. Fabozzi, Trustee
Common Shares:Item 2 – Code of Ethics – Not Applicable to this semi-annual report Item 3 – Audit Committee Financial Expert – Not Applicable to this semi-annual report Item 4 – Principal Accountant Fees and Services – Not Applicable to this semi-annual report Item 5 – Audit Committee of Listed Registrants – Not Applicable to this semi-annual report Item 6 – Investments (a) The registrant’s Schedule of Investments is included as part of the Report to Stockholders filed under Item 1 of this form. (b) Not Applicable due to no such divestments during the semi-annual period covered since the previous Form N-CSR filing. Item 7 – Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies – Not Applicable to this semi-annual report Item 8 – Portfolio Managers of Closed-End Management Investment Companies – Not Applicable to this semi-annual report Item 9 – Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers – Not Applicable Item 10 – Submission of Matters to a Vote of Security Holders – The registrant’s Nominating and Governance Committee will consider nominees to the board of directors 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. Item 11 – Controls and Procedures 11(a) – The registrant’s principal executive and principal financial officers or persons performing similar functions have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”)) are effective as of a date within 90 days of the filing of this report based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended. 11(b) – There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting. Item 12 – Exhibits attached hereto 12(a)(1) – Code of Ethics – Not Applicable to this semi-annual report 12(a)(2) – Certifications – Attached hereto 12(a)(3) – Not Applicable 12(b) – Certifications – Attached hereto BlackRock Preferred Opportunity Trust By: /s/ Donald C. Burke Donald C. Burke Chief Executive Officer of BlackRock Preferred Opportunity Trust Date: August 22, 2008 By: /s/ Donald C. Burke Donald C. Burke Chief Executive Officer (principal executive officer) of BlackRock Preferred Opportunity Trust Date: August 22, 2008 By: /s/ Neal J. Andrews Neal J. Andrews Chief Financial Officer (principal financial officer) of BlackRock Preferred Opportunity Trust Date: August 22, 2008