December
17, 2020
Bissie K. Bonner, Esq.
Willkie Farr & Gallagher LLP
787 Seventh Avenue
New York, New York 10019-6099
Re: BlackRock 2040 Municipal Target Term Trust, File Nos.
333-250205, 811-23621
Dear Ms. Bonner:
We have reviewed the registration statement for BlackRock 2040
Municipal Target Term
Trust filed on Form N-2 with the Securities and Exchange Commission on November
19, 2020,
and have the comments below. Where a comment is made in one location, it is
applicable to all
similar disclosure appearing elsewhere in the registration statement. All
capitalized terms not
otherwise defined herein have the meaning given to them in the registration
statement.
General
1. Please provide the staff with the ticker symbol for the Trust in the comment
response letter.
2. The staff notes that the filing is materially incomplete at this time.
Please provide the staff
with the fee table, hypothetical expense example, audited financial
statements/notes, auditor
information, the Consent, and any other missing information for review as
soon as
practicable.
Cover Page
3. The last paragraph of the section captioned Investment Strategy states
that over time the
maturity of the Trust s portfolio is expected to shorten in relation to
the remaining term of the
Trust but there is no mention of the Trust s term until the following
page. Please consider
clarifying in the Investment Strategy section that the Trust will
terminate on or about
December 31, 2040.
Bissie K. Bonner
BlackRock 2040 Municipal Target Term Trust
December 17, 2020
Page 2
Prospectus
Prospectus Summary
4. Under the heading Leverage on page 4, the prospectus states that the
Trust may invest in
leveraged residual certificates issued by tender offer bonds ( TOBs ).
Since the Trust has a
policy of investing at least 80% of its Managed Assets in municipal
securities, please explain
to the staff how municipal securities deposited in a TOBs trust are treated
for purposes of this
80% policy. For example, if the Trust transfers municipal bonds to a TOBs
trust, would all
or a portion of those municipal bonds be counted towards the 80% policy?
5. Under the heading Investment Advisor on page 5, the prospectus states
that the Advisor
will receive a fee based on the average daily value of the Trust s Managed
Assets. Please
explain to the staff how derivatives will be valued for purposes of the
determining Managed
Assets" and confirm that the Trust will not use the notional value of its
derivative
investments for purposes of determining Managed Assets.
Summary of Trust Expenses
6. The summary prospectus states on page 2 that the Trust may invest in
securities of other
closed-end or open-end investment companies. Please confirm that the Trust
will include in
the fee table an estimate of acquired fund fees and expenses. See
Instruction 10.a to Item 3
of Form N-2.
7. The prospectus states that the Fund will issue Preferred Shares. Please
confirm that the
expenses associated with issuing Preferred Shares, as well as the interest
on borrowings, will
be estimated in the Trust s fee table and add a line to the fee table for
dividends on Preferred
Shares.
8. Footnote 5 states that the Trust and the Advisor have entered into a Fee
Waiver Agreement.
Please confirm that this agreement will be in effect for at least one year
from the date this
prospectus goes effective.
Special Risk Considerations
9. The section captioned Special Risk Considerations includes a risk factor
on page 13 called
Indexed and Inverse Floating Rate Securities. If the Trust may invest in
floating rate
securities tied to LIBOR as part of its principal investment strategy,
please discuss the
expected discontinuation of LIBOR in this risk factor and explain how it
could affect the
Trust s investments, including (i) if the Trust will invest in instruments
that pay interest at
floating rates based on LIBOR that do not include a fall back provision that
addresses how
interest rates will be determined if LIBOR stops being published, (ii) how
it will affect the
liquidity of these investments, and (iii) how the transition to any
successor rate could impact
the value of investments that reference LIBOR. We note that the Trust has
included a
LIBOR Risk on page 58 of the prospectus under the heading Risks.
Bissie K. Bonner
BlackRock 2040 Municipal Target Term Trust
December 17, 2020
Page 3
10. The section captioned Special Risk Considerations includes a risk
factor on page 18 called
Market Disruption and Geopolitical Risk. If the expected
discontinuation of LIBOR could
impact the value and risk profile of the Trust s portfolio, please
consider adding a discussion
of it in this risk factor.
Statement of Additional Information
Management of the Trust
11. We note that much of the information for this section is currently omitted.
Please ensure that
the amendment includes the information required by Item 18 of Form N-2,
particularly as
concerns the leadership structure of the Board, and why it has been
determined that the
leadership structure is appropriate; the Board's role in risk oversight; a
brief discussion of the
specific experience, qualifications, attributes or skills of each
individual trustee that led to the
conclusion that the individual should serve as a trustee of the Trust; and
any directorships
held by each trustee during the past five years. See Item 18 of Form N-2.
Closing
We note that portions of the filing are incomplete. We may have
additional comments
on such portions when you complete them in a pre-effective amendment, on
disclosures made in
response to this letter, on information supplied supplementally, or on exhibits
added in any pre-
effective amendment.
If you intend to omit certain information from the form of the
prospectus included with
the registration statement that is declared effective in reliance on Rule 430A
under the Securities
Act, please identify the omitted information to us supplementally, preferably
before filing the
final pre-effective amendment.
Please advise us if you have submitted or expect to submit exemptive
applications or a
no-action request in connection with your registration statement.
Response to this letter should be in the form of a pre-effective
amendment filed
pursuant to Rule 472 under the Securities Act. Where no change will be made in
the filing in
response to a comment, please indicate this fact in a supplemental letter and
briefly state the
basis for your position.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
Bissie K. Bonner
BlackRock 2040 Municipal Target Term Trust
December 17, 2020
Page 4
Should you have any questions regarding this letter, please contact me
at (202) 551-6405.
Sincerely,
/s/ Samantha Brutlag
Samantha Brutlag
Attorney
Disclosure Review Office
cc: Michael J. Spratt, Assistant Director
Keith A. OConnell, Branch Chief