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 811-05611
Name of Fund: BlackRock MuniVest Fund, Inc.
Fund Address: P.O. Box 9011
Princeton, NJ 08543-9011
Name and address of agent for service: Robert C. Doll, Jr., Chief Executive
Officer, BlackRock MuniVest Fund, Inc., 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
Date of fiscal year end: 08/31/07
Date of reporting period: 09/01/06 - 08/31/07
Item 1 - Report to Stockholders
EQUITIES FIXED INCOME REAL ESTATE
LIQUIDITY ALTERNATIVES BLACKROCK SOLUTIONS
BlackRock MuniVest Fund, Inc. BLACKROCK
(MVF)
ANNUAL REPORT | AUGUST 31, 2007
NOT FDIC INSURED
MAY LOSE VALUE
NO BANK GUARANTEE
BlackRock MuniVest Fund, Inc.
Proxy Results
During the six-month period ended August 31, 2007, the Common Stock shareholders
of BlackRock MuniVest Fund, Inc. voted on the following proposal, which was
approved at an annual shareholders' meeting on August 16, 2007. This proposal
was part of the reorganization of the Fund's Board of Directors to take effect
on or about November 1, 2007. A description of the proposal and number of shares
voted are as follows:
--------------------------------------------------------------------------------------------------
Shares Voted Shares Withheld
For From Voting
--------------------------------------------------------------------------------------------------
To elect the Fund's Directors: G. Nicholas Beckwith, III 54,772,419 1,265,839
Richard E. Cavanagh 54,782,696 1,255,562
Richard S. Davis 54,769,509 1,268,749
Kent Dixon 54,749,816 1,288,442
Kathleen F. Feldstein 54,748,341 1,289,917
James T. Flynn 54,765,665 1,272,593
Henry Gabbay 54,767,781 1,270,477
Jerrold B. Harris 54,757,285 1,280,973
R. Glenn Hubbard 54,754,696 1,283,562
Karen P. Robards 54,777,419 1,260,839
Robert S. Salomon, Jr. 54,749,135 1,289,123
--------------------------------------------------------------------------------------------------
During the six-month period ended August 31, 2007, the Auction Market Preferred
Stock shareholders (Series A - F) of BlackRock MuniVest Fund, Inc. voted on the
following proposal, which was approved at an annual shareholders' meeting on
August 16, 2007. A description of the proposal and number of shares voted for
each Director are as follows:
-------------------------------------------------------------------------------------------------
Shares Voted Shares Withheld
For From Voting
-------------------------------------------------------------------------------------------------
To elect the Fund's Directors: Frank J. Fabozzi and
W. Carl Kester 12,297 98
-------------------------------------------------------------------------------------------------
2 BLACKROCK MUNIVEST FUND, INC. AUGUST 31, 2007
A Letter to Shareholders
Dear Shareholder
Financial markets embarked on a wild ride during the August reporting period.
Subprime mortgage troubles intensified in the final months of the period,
spawning a widespread credit and liquidity crisis that crept into other areas of
the market. The U.S. Federal Reserve Board (the Fed) and other countries'
central banks stepped in to inject liquidity into the markets and bolster
investor confidence. In August, the Fed cut the discount rate, the rate charged
to banks to borrow money directly from the Fed, from 6.25% to 5.75%. Another
..50% cut in the discount rate came on September 18, along with a .50% cut in the
more widely followed federal funds rate. This brought the target short-term
interest rate, which had remained unchanged at 5.25% for over a year, to 4.75%.
Although heightened volatility has been a recurring theme throughout the past
year, the global economy (excluding the U.S. housing market) remained quite
healthy. In general, equity market fundamentals also held firm -- second-quarter
corporate earnings exceeded expectations (although future earnings could be at
risk if the economy weakens), dividend payouts and share buybacks continued to
grow, and valuations remained attractive. These tailwinds generally prevailed
over such headwinds as a slowing U.S. economy and troubled housing market,
although the more recent credit crunch dampened corporate merger-and-acquisition
activity, a key source of strength for equity markets. Stocks recorded their
second-worst day of the year in August, yet remained comfortably in the black
year-to-date.
Meanwhile, mixed economic signals and the credit market debacle made for a
volatile backdrop for fixed income, with investors fleeing from bonds associated
with the housing and credit markets in favor of higher-quality Treasury issues.
As a result, the 10-year Treasury yield, which touched 5.30% in June (its
highest level in five years), fell to 4.54% by period-end, while prices
correspondingly rose.
Against this backdrop, financial markets posted mixed results for the six- and
12-month periods ended August 31, 2007:
Total Returns as of August 31, 2007 6-month 12-month
=========================================================================================================
U.S. equities (S&P 500 Index) +5.70% +15.13%
---------------------------------------------------------------------------------------------------------
Small cap U.S. equities (Russell 2000 Index) +0.54 +11.36
---------------------------------------------------------------------------------------------------------
International equities (MSCI Europe, Australasia, Far East Index) +5.83 +18.71
---------------------------------------------------------------------------------------------------------
Fixed income (Lehman Brothers U.S. Aggregate Bond Index) +1.54 + 5.26
---------------------------------------------------------------------------------------------------------
Tax-exempt fixed income (Lehman Brothers Municipal Bond Index) -0.57 + 2.30
---------------------------------------------------------------------------------------------------------
High yield bonds (Lehman Brothers U.S. Corporate High Yield 2% Issuer Cap Index) -1.71 + 6.46
---------------------------------------------------------------------------------------------------------
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 market volatility, we encourage you to review your investment
goals with your financial professional and to make portfolio changes, as needed.
For more market insight, we invite you to visit www.blackrock.com/funds. 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,
/s/ Robert C. Doll, Jr.
Robert C. Doll, Jr.
Fund President and Director
BLACKROCK MUNIVEST FUND, INC. AUGUST 31, 2007 3
Fund Summary as of August 31, 2007
Fund Information
Symbol on American Stock Exchange ......................... MVF
Initial Offering Date ..................................... September 29, 1988
Yield on Closing Market Price as of 8/31/07 ($9.35)* ...... 5.52%
Current Monthly Distribution per share of Common Stock** .. $.043
Current Annualized Distribution per share of Common Stock** $.516
Leverage as of 8/31/07*** ................................. 36.58%
--------------------------------------------------------------------------------
* 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.
** The distribution is not constant and is subject to change.
*** As a percentage of managed assets, which is the total assets of the Fund
(including any assets attributable to Auction Market Preferred Stock that
may be outstanding) minus the sum of accrued liabilities (other than debt
representing financial leverage).
The table below summarizes the changes in the Fund's market price and net asset
value per share:
--------------------------------------------------------------------------------
8/31/07 8/31/06 Change High Low
--------------------------------------------------------------------------------
Market Price ........... $ 9.35 $ 9.66 (3.21%) $10.25 $ 8.60
Net Asset Value ........ $ 9.39 $ 9.93 (5.44%) $10.12 $ 9.19
--------------------------------------------------------------------------------
The following charts show the Fund's portfolio composition and credit quality
allocations of the Fund's long-term investments:
Portfolio Composition
Sector 8/31/07 8/31/06
--------------------------------------------------------------------------------
Hospital ............................................. 29% 23%
Industrial & Pollution Control ....................... 16 19
Education ............................................ 9 8
Power ................................................ 8 8
City, County & State ................................. 8 12
Transportation ....................................... 6 7
Tobacco .............................................. 6 5
Tax Revenue .......................................... 6 5
Water & Sewer ........................................ 5 7
Lease Revenue ........................................ 4 4
Housing .............................................. 3 2
--------------------------------------------------------------------------------
Credit Quality Allocations*
Credit Rating 8/31/07 8/31/06
--------------------------------------------------------------------------------
AAA/Aaa .............................................. 33% 34%
AA/Aa ................................................ 17 20
A/A .................................................. 28 24
BBB/Baa .............................................. 18 18
BB/Ba ................................................ 2 2
B/B .................................................. 1 1
N/R (Not Rated) ...................................... 1 1
Other** .............................................. --*** --***
--------------------------------------------------------------------------------
* Using the higher of S&P's or Moody's ratings.
** Includes portfolio holdings in variable rate demand notes.
*** Amount is less than 1%.
4 BLACKROCK MUNIVEST FUND, INC. AUGUST 31, 2007
The Benefits and Risks of Leveraging
BlackRock MuniVest Fund, Inc. utilizes leveraging to seek to enhance the yield
and net asset value of its Common Stock. However, these objectives cannot be
achieved in all interest rate environments. To leverage, the Fund issues
Preferred Stock, which pays dividends at prevailing short-term interest rates,
and invests the proceeds in long-term municipal bonds. The interest earned on
these investments, net of dividends to Preferred Stock, is paid to Common Stock
shareholders in the form of dividends, and the value of these portfolio holdings
is reflected in the per share net asset value of the Fund's Common Stock.
However, in order to benefit Common Stock shareholders, the yield curve must be
positively sloped; that is, short-term interest rates must be lower than
long-term interest rates. At the same time, a period of generally declining
interest rates will benefit Common Stock shareholders. If either of these
conditions change, then the risks of leveraging will begin to outweigh the
benefits.
To illustrate these concepts, assume a fund's Common Stock capitalization of
$100 million and the issuance of Preferred Stock for an additional $50 million,
creating a total value of $150 million available for investment in long-term
municipal bonds. If prevailing short-term interest rates are approximately 3%
and long-term interest rates are approximately 6%, the yield curve has a
strongly positive slope. The fund pays dividends on the $50 million of Preferred
Stock based on the lower short-term interest rates. At the same time, the fund's
total portfolio of $150 million earns the income based on long-term interest
rates. Of course, increases in short-term interest rates would reduce (and even
eliminate) the dividends on the Common Stock.
In this case, the dividends paid to Preferred Stock shareholders are
significantly lower than the income earned on the fund's long-term investments,
and therefore the Common Stock shareholders are the beneficiaries of the
incremental yield. However, if short-term interest rates rise, narrowing the
differential between short-term and long-term interest rates, the incremental
yield pickup on the Common Stock will be reduced or eliminated completely. At
the same time, the market value of the fund's Common Stock (that is, its price
as listed on the American Stock Exchange) may, as a result, decline.
Furthermore, if long-term interest rates rise, the Common Stock's net asset
value will reflect the full decline in the price of the portfolio's investments,
since the value of the fund's Preferred Stock does not fluctuate. In addition to
the decline in net asset value, the market value of the fund's Common Stock may
also decline.
As of August 31, 2007, the Fund's leverage amount, due to Auction Market
Preferred Stock, was 36.58% of total net assets, before the deduction of
Preferred Stock.
As a part of its investment strategy, the Fund may invest in certain securities
whose potential income return is inversely related to changes in a floating
interest rate ("inverse floaters"). In general, income on inverse floaters will
decrease when short-term interest rates increase and increase when short-term
interest rates decrease. Investments in inverse floaters may be characterized as
derivative securities and may subject the Fund to the risks of reduced or
eliminated interest payments and losses of invested principal. In addition,
inverse floaters have the effect of providing investment leverage and, as a
result, the market value of such securities will generally be more volatile than
that of fixed rate, tax-exempt securities. To the extent the Fund invests in
inverse floaters, the market value of the Fund's portfolio and the net asset
value of the Fund's shares may also be more volatile than if the Fund did not
invest in these securities. See Note 1(c) to Financial Statements for details of
municipal bonds held in trust.
Swap Agreements
The Fund 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 or reduce 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 Fund has entered into the swap will default on its obligation to
pay the Fund and the risk that the Fund will not be able to meet its obligations
to pay the other party to the agreement.
BLACKROCK MUNIVEST FUND, INC. AUGUST 31, 2007 5
Schedule of Investments as of August 31, 2007 (in Thousands)
Face
Amount Municipal Bonds Value
===============================================================================
Alabama -- 3.9%
$ 2,550 Camden, Alabama, IDB, Exempt Facilities Revenue
Bonds (Weyerhaeuser Company), Series A, 6.125%
due 12/01/2024 $ 2,716
Huntsville, Alabama, Health Care Authority Revenue
Bonds (a):
3,500 Series A, 5.75% due 6/01/2011 3,773
5,000 Series B, 5.75% due 6/01/2012 5,471
6,500 Prattville, Alabama, IDB, Environmental Improvement
Revenue Bonds (International Paper Company
Projects), AMT, Series A, 4.75% due 12/01/2030 5,616
5,000 Selma, Alabama, IDB, Environmental Improvement
Revenue Refunding Bonds (International Paper
Company Project), Series B, 5.50% due 5/01/2020 5,095
===============================================================================
Arizona -- 1.9%
4,100 Maricopa County, Arizona, IDA, Education Revenue
Bonds (Arizona Charter Schools Project 1), Series A,
6.75% due 7/01/2029 3,972
Pima County, Arizona, IDA, Education Revenue
Bonds (Arizona Charter Schools Project):
2,100 Series E, 7.25% due 7/01/2031 2,233
500 Series I, 6.10% due 7/01/2024 510
1,000 Series I, 6.30% due 7/01/2031 1,024
Pima County, Arizona, IDA, Education Revenue
Refunding Bonds:
1,545 (Arizona Charter Schools Project), Series O,
5% due 7/01/2026 1,416
560 (Arizona Charter Schools Project II), Series A,
6.75% due 7/01/2011 (a) 618
970 (Arizona Charter Schools Project II), Series A,
6.75% due 7/01/2021 1,008
===============================================================================
California -- 20.9%
18,850 California Health Facilities Financing Authority
Revenue Bonds (Kaiser Permanente), Series A,
5.25% due 4/01/2039 18,914
California State, GO:
10,665 5.50% due 4/01/2014 (a) 11,725
10 5.50% due 4/01/2030 11
6,100 California State, GO, Refunding, 5% due 6/01/2037 6,113
California State Public Works Board, Lease
Revenue Bonds:
5,000 (Department of Corrections), Series C, 5.50%
due 6/01/2022 5,294
6,000 (Department of Corrections), Series C, 5.50%
due 6/01/2023 6,353
11,075 (Department of Mental Health -- Coalinga State
Hospital), Series A, 5.125% due 6/01/2029 11,248
11,250 California State, Various Purpose, GO, 5.50%
due 11/01/2033 11,769
5,240 California Statewide Communities Development
Authority, Health Facility Revenue Bonds (Memorial
Health Services), Series A, 6% due 10/01/2023 5,529
1,250 Chula Vista, California, IDR (San Diego Gas and
Electric Company), AMT, Series B, 5%
due 12/01/2027 1,229
Golden State Tobacco Securitization Corporation of
California, Tobacco Settlement Revenue Bonds (a):
10,725 Series A-3, 7.875% due 6/01/2013 12,896
3,750 Series A-4, 7.80% due 6/01/2013 4,496
1,425 Series A-5, 7.875% due 6/01/2013 1,713
10,000 Series B, 5.375% due 6/01/2010 10,436
14,750 Golden State Tobacco Securitization Corporation of
California, Tobacco Settlement Revenue Refunding
Bonds, Senior Series A-1, 5.125% due 6/01/2047 13,044
===============================================================================
Colorado -- 0.6%
Colorado HFA, Revenue Refunding Bonds
(S/F Program), AMT, Senior Series A-2:
560 6.60% due 5/01/2028 575
200 7.50% due 4/01/2031 206
3,000 Colorado Health Facilities Authority Revenue Bonds
(Lutheran Medical Center), Series A, 5.25%
due 6/01/2034 2,883
===============================================================================
Connecticut -- 0.5%
2,810 Mohegan Tribe Indians Gaming Authority,
Connecticut, Public Improvement Revenue
Refunding Bonds (Priority Distribution), 6.25%
due 1/01/2031 2,935
===============================================================================
Florida -- 3.9%
11,250 Highlands County, Florida, Health Facilities Authority,
Hospital Revenue Bonds (Adventist Health System),
Series C, 5.25% due 11/15/2036 11,216
10,320 Orange County, Florida, Health Facilities Authority,
Hospital Revenue Bonds (Adventist Health System),
5.625% due 11/15/2012 (a) 11,261
===============================================================================
Georgia -- 4.5%
1,100 Gainesville, Georgia, Redevelopment Authority,
Educational Facilities Revenue Refunding Bonds
(Riverside Military Academy), 5.125%
due 3/01/2037 1,009
Georgia Municipal Electric Authority, Power Revenue
Refunding Bonds:
250 Series W, 6.60% due 1/01/2018 284
250 Series W, 6.60% due 1/01/2018 (e) 283
4,600 Series Y, 10% due 1/01/2010 (e) 5,242
5,000 Houston County, Georgia, Hospital Authority
Revenue Bonds (Houston Heart Institute Project),
5.25% due 10/01/2035 5,019
Milledgeville-Baldwin County, Georgia, Development
Authority Revenue Bonds (Georgia College and
State University Foundation) (a):
4,390 5.50% due 9/01/2014 4,862
3,500 5.625% due 9/01/2014 3,903
Portfolio Abbreviations
To simplify the listings of BlackRock MuniVest Fund, Inc.'s portfolio holdings
in the Schedule of Investments, we have abbreviated the names of many of the
securities according to the list at right.
AMT Alternative Minimum Tax (subject to)
DRIVERS Derivative Inverse Tax-Exempt Receipts
EDA Economic Development Authority
GO General Obligation Bonds
HDA Housing Development Authority
HFA Housing Finance Agency
IDA Industrial Development Authority
IDB Industrial Development Board
IDR Industrial Development Revenue Bonds
M/F Multi-Family
PCR Pollution Control Revenue Bonds
RIB Residual Interest Bonds
S/F Single-Family
VRDN Variable Rate Demand Notes
6 BLACKROCK MUNIVEST FUND, INC. AUGUST 31, 2007
Schedule of Investments (continued) (in Thousands)
Face
Amount Municipal Bonds Value
===============================================================================
Georgia (concluded)
$ 4,785 Monroe County, Georgia, Development Authority,
PCR, Refunding (Oglethorpe Power Corporation --
Scherer), Series A, 6.80% due 1/01/2011 $ 5,186
===============================================================================
Idaho -- 0.1%
330 Idaho Housing Agency, S/F Mortgage Revenue
Refunding Bonds, AMT, Series E-2, 6.90%
due 1/01/2027 338
===============================================================================
Illinois -- 11.7%
5,000 Chicago, Illinois, O'Hare International Airport,
General Airport Revenue Refunding Bonds, Third
Lien, AMT, Series A, 5.75% due 1/01/2019 (c) 5,257
11,200 Chicago, Illinois, O'Hare International Airport
Revenue Bonds, Third Lien, AMT, Series B-2, 6%
due 1/01/2029 (n) 12,001
75 Chicago, Illinois, S/F Mortgage Revenue Bonds, AMT,
Series C, 7% due 3/01/2032 (d)(k) 77
10,000 Hodgkins, Illinois, Environmental Improvement
Revenue Bonds (Metro Biosolids Management LLC
Project), AMT, 6% due 11/01/2023 10,129
2,140 Illinois Development Finance Authority Revenue
Bonds (Community Rehabilitation Providers
Facilities), Series A, 6.50% due 7/01/2022 2,254
465 Illinois Development Finance Authority, Revenue
Refunding Bonds (Community Rehabilitation
Providers Facilities), Series A, 6% due 7/01/2015 471
2,500 Illinois HDA, Homeowner Mortgage Revenue
Refunding Bonds, AMT, Sub-Series A-2, 4.90%
due 8/01/2037 2,354
455 Illinois HDA, Revenue Refunding Bonds (M/F Program),
Series 5, 6.75% due 9/01/2023 460
2,694 Illinois State Finance Authority, Revenue Bonds
(Community Rehabilitation Providers Facilities),
4.625% due 7/01/2027 2,330
13 Kane and De Kalb Counties, Illinois, Community Unit
School District Number 302, GO, DRIVERS, Series
283, 7.182% due 2/01/2018 (f)(m) 15
McLean and Woodford Counties, Illinois, Community
Unit School District Number 005, GO, Refunding (i):
1,005 6.25% due 12/01/2014 1,100
845 6.375% due 12/01/2016 929
18,550 Metropolitan Pier and Exposition Authority, Illinois,
Dedicated State Tax Revenue Refunding Bonds
(McCormick Place Expansion Project), Series B,
5.75% due 6/15/2023 (c) 19,953
Regional Transportation Authority, Illinois,
Revenue Bonds:
3,500 Series A, 7.20% due 11/01/2020 (h) 4,227
4,000 Series C, 7.75% due 6/01/2020 (f) 5,127
Will County, Illinois, School District Number 122
(New Lenox Elementary), GO, Series A (i):
395 6.50% due 11/01/2010 (a) 425
505 6.50% due 11/01/2013 543
===============================================================================
Indiana -- 8.5%
18,350 Indiana Health and Educational Facilities Financing
Authority, Hospital Revenue Bonds (Clarian Health
Obligation), Series A, 5.25% due 2/15/2040 18,124
4,290 Indiana State HFA, S/F Mortgage Revenue Refunding
Bonds, Series A, 6.80% due 1/01/2017 (j) 4,393
8,195 Indiana Transportation Finance Authority, Highway
Revenue Bonds, Series A, 6.80% due 12/01/2016 9,479
15,335 Indianapolis, Indiana, Local Public Improvement Bond
Bank, Revenue Refunding Bonds, Series D, 6.75%
due 2/01/2014 17,096
===============================================================================
Kansas -- 0.7%
3,805 Sedgwick and Shawnee Counties, Kansas, S/F
Mortgage Revenue Bonds (Mortgage-Backed
Securities Program), AMT, Series A-4, 5.95%
due 12/01/2033 (d) 3,850
===============================================================================
Kentucky -- 3.4%
20,100 Louisville and Jefferson County, Kentucky,
Metropolitan Government Health System, Revenue
Refunding Bonds (Norton Healthcare, Inc.), 5.25%
due 10/01/2036 19,659
===============================================================================
Louisiana -- 3.1%
Louisiana Public Facilities Authority, Hospital Revenue
Bonds (Franciscan Missionaries of Our Lady Health
System, Inc.), Series A:
6,220 5% due 8/15/2033 6,044
11,660 5.25% due 8/15/2036 11,675
===============================================================================
Maine -- 0.3%
Portland, Maine, Housing Development Corporation,
Senior Living Revenue Bonds (Avesta Housing
Development Corporation Project), Series A:
775 5.70% due 8/01/2021 784
1,190 6% due 2/01/2034 1,216
===============================================================================
Maryland -- 0.5%
3,250 Maryland State Community Development
Administration, Department of Housing and
Community Development, Residential Revenue
Refunding Bonds, AMT, Series D, 4.90%
due 9/01/2042 3,034
===============================================================================
Massachusetts -- 8.8%
2,035 Boston, Massachusetts, Water and Sewer Commission
Revenue Bonds, 9.25% due 1/01/2011 (e) 2,323
3,010 Massachusetts Bay Transportation Authority, Revenue
Refunding Bonds (General Transportation System),
Series A, 7% due 3/01/2019 3,614
3,000 Massachusetts State, HFA, Housing Revenue Bonds,
AMT, Series A, 5.20% due 12/01/2037 2,959
3,955 Massachusetts State, HFA, Housing Revenue
Refunding Bonds, AMT, Series D, 4.85%
due 6/01/2040 3,662
30,000 Massachusetts State Water Resource Authority
Revenue Bonds, Series A, 6.50%
due 7/15/2019 (e) 34,900
3,480 Massachusetts State Water Resource Authority,
Revenue Refunding Bonds, Series A, 6%
due 8/01/2010 (a)(f) 3,730
===============================================================================
Michigan -- 8.5%
2,500 Delta County, Michigan, Economic Development
Corporation, Environmental Improvement Revenue
Refunding Bonds (Mead Westvaco-Escanaba),
Series A, 6.25% due 4/15/2012 (a) 2,765
BLACKROCK MUNIVEST FUND, INC. AUGUST 31, 2007 7
Schedule of Investments (continued) (in Thousands)
Face
Amount Municipal Bonds Value
===============================================================================
Michigan (concluded)
Macomb County, Michigan, Hospital Finance
Authority, Hospital Revenue Bonds (Mount Clemens
General Hospital), Series B:
$ 3,715 5.75% due 11/15/2025 $ 3,625
4,250 5.875% due 11/15/2034 4,112
Michigan State Hospital Finance Authority, Hospital
Revenue Refunding Bonds, Series A:
1,900 (Crittenton Hospital), 5.625% due 3/01/2027 1,952
2,000 (Oakwood Obligated Group), 5% due 7/15/2025 1,986
Michigan State Hospital Finance Authority, Revenue
Refunding Bonds:
7,205 (Henry Ford Health System), Series A, 5.25%
due 11/15/2032 7,246
17,100 (Henry Ford Health System), Series A, 5%
due 11/15/2038 16,474
2,750 (Henry Ford Health System), Series A, 5.25%
due 11/15/2046 2,720
1,000 (Sinai Hospital), 6.70% due 1/01/2026 1,002
7,500 Michigan Tobacco Settlement Financing Authority,
Tobacco Settlement Asset-Backed Revenue Bonds,
Senior Series A, 6% due 6/01/2048 7,527
===============================================================================
Minnesota -- 1.5%
7,235 Minneapolis, Minnesota, Health Care System
Revenue Bonds (Allina Health System), Series A,
5.75% due 11/15/2032 7,450
1,405 Saint Cloud, Minnesota, Health Care Revenue
Refunding Bonds (Saint Cloud Hospital Obligation
Group), Series A, 6.25% due 5/01/2017 (i) 1,498
===============================================================================
Mississippi -- 6.3%
Lowndes County, Mississippi, Solid Waste Disposal
and PCR, Refunding (Weyerhaeuser
Company Project):
9,160 Series A, 6.80% due 4/01/2022 10,498
4,500 Series B, 6.70% due 4/01/2022 5,105
20,705 Mississippi Business Finance Corporation, Mississippi,
PCR, Refunding (System Energy Resources Inc.
Project), 5.875% due 4/01/2022 20,907
===============================================================================
Missouri -- 0.5%
2,600 Missouri State Development Finance Board,
Infrastructure Facilities Revenue Refunding Bonds
(Branson), Series A, 5.50% due 12/01/2032 2,504
195 Missouri State Housing Development Commission,
S/F Mortgage Revenue Bonds (Homeowner Loan),
AMT, Series A, 7.50% due 3/01/2031 (d) 204
===============================================================================
Montana -- 1.1%
6,000 Forsyth, Montana, PCR, Refunding (Portland General
Electric Company), Series A, 5.20% due 5/01/2033 6,087
===============================================================================
Nebraska -- 0.0%
135 Nebraska Investment Finance Authority, S/F Housing
Revenue Bonds, AMT, Series C, 6.30%
due 9/01/2028 (d)(k) 136
===============================================================================
Nevada -- 0.2%
Nevada Housing Division Revenue Bonds, AMT:
1,105 (Multi-Unit Housing), Issue B,
7.45% due 10/01/2017 (b) 1,107
5 (S/F Program), Series A, 6.55%
due 10/01/2012 (j) 5
===============================================================================
New Hampshire -- 0.5%
2,675 New Hampshire Health and Education Facilities
Authority, Revenue Refunding Bonds (Elliot
Hospital), Series B, 5.60% due 10/01/2022 2,762
===============================================================================
New Jersey -- 6.1%
New Jersey EDA, Cigarette Tax Revenue Bonds:
9,080 5.50% due 6/15/2024 9,228
2,885 5.75% due 6/15/2029 2,988
2,855 5.50% due 6/15/2031 2,906
6,695 5.75% due 6/15/2034 6,957
5,980 Tobacco Settlement Financing Corporation of New
Jersey, Asset-Backed Revenue Bonds, 7%
due 6/01/2013 (a) 6,939
7,500 Tobacco Settlement Financing Corporation of New
Jersey, Revenue Refunding Bonds, Series 1A, 5%
due 6/01/2041 6,487
===============================================================================
New Mexico -- 0.6%
3,300 Farmington, New Mexico, PCR, Refunding (Public
Service Company of New Mexico -- San Juan
Project), Series A, 5.80% due 4/01/2022 3,320
===============================================================================
New York -- 1.7%
400 Metropolitan Transportation Authority, New York,
Dedicated Tax Fund, Revenue Refunding Bonds,
VRDN, Series B, 3.90% due 11/01/2022 (i)(l) 400
1,125 New York City, New York, City Transitional Finance
Authority Revenue Bonds, RIB, Series 283, 8.18%
due 11/15/2015 (m) 1,295
New York City, New York, GO:
6,480 Series F, 5.25% due 1/15/2033 6,681
20 Series I, 6.25% due 4/15/2017 (n) 20
965 New York City, New York, GO, Refunding, Series A,
6.375% due 5/15/2014 (f) 1,037
400 New York State Local Government Assistance
Corporation, Revenue Refunding Bonds, Sub-Lien,
VRDN, Series 4V, 3.87% due 4/01/2022 (i)(l) 400
===============================================================================
North Carolina -- 0.7%
4,105 Gaston County, North Carolina, Industrial Facilities
and Pollution Control Financing Authority, Revenue
Bonds (National Gypsum Company Project), AMT,
5.75% due 8/01/2035 4,155
===============================================================================
Oklahoma -- 2.1%
7,825 Oklahoma State Development Finance Authority,
Revenue Refunding Bonds (Saint John Health
System), 5% due 2/15/2042 7,698
4,500 Tulsa County, Oklahoma, Industrial Authority, Health
Care Revenue Refunding Bonds (Saint Francis
Health System), Series B, 5% due 12/15/2036 (h) 4,530
===============================================================================
Pennsylvania -- 4.3%
2,440 Pennsylvania State Higher Education Assistance
Agency Revenue Bonds, Capital Acquisition,
6.125% due 12/15/2010 (a)(c) 2,622
6,250 Pennsylvania State Higher Educational Facilities
Authority Revenue Bonds (University of
Pennsylvania Medical Center Health System),
Series A, 6% due 1/15/2031 6,640
Philadelphia, Pennsylvania, Authority for Industrial
Development, Senior Living Revenue Bonds:
1,000 (Arbor House Inc. Project), Series E, 6.10%
due 7/01/2033 1,028
1,355 (Rieder House Project), Series A, 6.10%
due 7/01/2033 1,393
8 BLACKROCK MUNIVEST FUND, INC. AUGUST 31, 2007
Schedule of Investments (continued) (in Thousands)
Face
Amount Municipal Bonds Value
===============================================================================
Pennsylvania (concluded)
$ 9,280 Sayre, Pennsylvania, Health Care Facilities Authority,
Revenue Bonds (Guthrie Healthcare System),
Series B, 7.125% due 12/01/2011 (a) $ 11,087
Sayre, Pennsylvania, Health Care Facilities Authority,
Revenue Refunding Bonds (Guthrie Healthcare
System), Series A:
1,340 6.25% due 12/01/2011 (a) 1,482
410 6.25% due 12/01/2018 438
===============================================================================
South Carolina -- 3.7%
1,000 Georgetown County, South Carolina, Environmental
Improvement Revenue Refunding Bonds
(International Paper Company Project), AMT,
Series A, 5.55% due 12/01/2029 988
3,500 Lexington County, South Carolina, Health Services
District Inc., Hospital Revenue Refunding and
Improvement Bonds, 5.50% due 11/01/2013 (a) 3,812
Lexington County, South Carolina, Health Services
District Inc., Hospital Revenue Refunding Bonds:
6,500 5% due 11/01/2032 6,354
2,150 5% due 11/01/2036 2,086
2,450 Medical University Hospital Authority, South Carolina,
Hospital Facilities Revenue Refunding Bonds,
6.50% due 8/15/2012 (a) 2,759
5,000 Richland County, South Carolina, Environmental
Improvement Revenue Refunding Bonds
(International Paper), AMT, 6.10% due 4/01/2023 5,171
===============================================================================
South Dakota -- 0.4%
2,605 South Dakota State Health and Educational Facilities
Authority Revenue Bonds (Sanford Health), 5%
due 11/01/2040 2,574
===============================================================================
Tennessee -- 1.1%
2,000 McMinn County, Tennessee, IDB, Solid Waste Revenue
Bonds (Recycling Facility -- Calhoun Newsprint),
AMT, 7.40% due 12/01/2022 2,010
4,120 Shelby County, Tennessee, Health, Educational and
Housing Facility Board, Hospital Revenue
Refunding Bonds (Methodist Healthcare), 6.50%
due 9/01/2012 (a) 4,644
===============================================================================
Texas -- 16.1%
7,290 Austin, Texas, Convention Center Revenue Bonds
(Convention Enterprises Inc.), First Tier, Series A,
6.70% due 1/01/2011 (a) 7,960
3,055 Brazos River Authority, Texas, PCR, Refunding (TXU
Energy Company LLC Project), AMT, Series A,
7.70% due 4/01/2033 3,342
Brazos River, Texas, Harbor Navigation District,
Brazoria County Environmental Revenue Refunding
Bonds (Dow Chemical Company Project):
11,460 AMT, Series A-7, 6.625% due 5/15/2033 12,100
8,470 Series B-2, 4.95% due 5/15/2033 7,976
3,000 Gregg County, Texas, Health Facilities Development
Corporation, Hospital Revenue Bonds (Good
Shepherd Medical Center Project), 6.875%
due 10/01/2010 (a)(g) 3,300
10,250 Guadalupe-Blanco River Authority, Texas, Sewage
and Solid Waste Disposal Facility Revenue Bonds
(E. I. du Pont de Nemours and Company Project),
AMT, 6.40% due 4/01/2026 10,350
6,000 Gulf Coast Waste Disposal Authority, Texas, Revenue
Refunding Bonds (International Paper Company),
AMT, Series A, 6.10% due 8/01/2024 6,179
5,500 Harris County-Houston Sports Authority, Texas,
Revenue Refunding Bonds, Senior Lien, Series G,
5.75% due 11/15/2020 (c) 5,853
1,790 Houston, Texas, Industrial Development Corporation
Revenue Bonds (Air Cargo), AMT, 6.375%
due 1/01/2023 1,854
155 Mansfield, Texas, Independent School District, GO,
Refunding, 6.625% due 2/15/2015 165
9,355 Matagorda County, Texas, Navigation District
Number 1, Revenue Refunding Bonds (Centerpoint
Energy Project), 5.60% due 3/01/2027 9,366
5,225 Midway, Texas, Independent School District, GO,
Refunding, 6.125% due 8/15/2014 5,548
2,700 Port Corpus Christi, Texas, Revenue Refunding Bonds
(Celanese Project), Series A, 6.45% due 11/01/2030 2,820
5,000 Red River Authority, Texas, PCR, Refunding (Celanese
Project), AMT, Series B, 6.70% due 11/01/2030 5,295
3,930 Sabine River Authority, Texas, PCR, Refunding (TXU
Electric Company Project/TXU Energy Company LLC),
Series C, 5.20% due 5/01/2028 3,586
7,850 Tarrant County, Texas, Cultural Education Facilities
Financing Corporation Revenue Bonds (Texas
Health Resources), Series B, 5% due 11/15/2042 7,684
===============================================================================
Vermont -- 0.2%
1,000 Vermont Educational and Health Buildings Financing
Agency, Developmental and Mental Health
Revenue Bonds (Howard Center for Human
Services), Series A, 6.375% due 6/15/2022 1,034
===============================================================================
Virginia -- 0.6%
1,425 Chesterfield County, Virginia, IDA, PCR (Virginia
Electric and Power Company), Series A, 5.875%
due 6/01/2017 1,508
2,250 Fairfax County, Virginia, EDA, Residential Care
Facilities, Mortgage Revenue Refunding Bonds
(Goodwin House, Inc.), 5.125% due 10/01/2042 2,006
===============================================================================
Washington -- 3.5%
3 Energy Northwest, Washington, Electric Revenue
Refunding Bonds, DRIVERS, Series 255, 7.68%
due 7/01/2018 (h)(m) 3
2,370 Seattle, Washington, Housing Authority Revenue
Bonds (Replacement Housing Project), 6.125%
due 12/01/2032 2,389
408 Washington State, GO, Trust Receipts, Class R,
Series 6, 7.609% due 1/01/2014 (i)(m) 449
14,319 Washington State Public Power Supply System,
Revenue Refunding Bonds (Nuclear Project
Number 1), Series B, 7.125% due 7/01/2016 17,419
===============================================================================
Wisconsin -- 1.7%
1,765 Milwaukee, Wisconsin, Revenue Bonds (Air Cargo),
AMT, 6.50% due 1/01/2025 1,838
5,000 Wisconsin State Health and Educational Facilities
Authority, Mortgage Revenue Bonds (Hudson
Memorial Hospital), 5.70% due 1/15/2029 (j) 5,180
3,040 Wisconsin State Health and Educational Facilities
Authority Revenue Bonds (SynergyHealth Inc.), 6%
due 11/15/2032 3,113
===============================================================================
BLACKROCK MUNIVEST FUND, INC. AUGUST 31, 2007 9
Schedule of Investments (continued) (in Thousands)
Face
Amount Municipal Bonds Value
===============================================================================
U.S. Virgin Islands -- 1.4%
$ 8,000 Virgin Islands Government Refinery Facilities, Revenue
Refunding Bonds (Hovensa Coker Project), AMT,
6.50% due 7/01/2021 $ 8,395
-------------------------------------------------------------------------------
Total Municipal Bonds
(Cost -- $761,066) -- 136.1% 788,131
===============================================================================
===============================================================================
Municipal Bonds Held in Trust (q)
===============================================================================
Illinois -- 7.7%
14,000 Chicago, Illinois, O'Hare International Airport,
General Airport Revenue Refunding Bonds, Third Lien,
AMT, Series A, 5.75% due 1/01/2020 (c) 14,720
17,080 Chicago, Illinois, O'Hare International Airport
Revenue Bonds, Third Lien, AMT, Series B-2, 6%
due 1/01/2027 (c) 18,331
Kane and De Kalb Counties, Illinois, Community Unit
School District Number 302, GO (f):
2,975 5.75% due 2/01/2018 3,297
2,710 5.75% due 2/01/2019 3,004
4,780 5.75% due 2/01/2021 5,298
===============================================================================
Massachusetts -- 3.5%
20,000 Massachusetts State School Building Authority,
Dedicated Sales Tax Revenue Bonds, Series A, 5%
due 8/15/2030 (i) 20,514
===============================================================================
New York -- 7.5%
13,500 New York City, New York, City Transitional Finance
Authority Revenue Bonds, Future Tax Secured,
Series B, 6.25% due 11/15/2018 14,522
26,750 New York State Dormitory Authority, State University
Educational Facilities, Revenue Refunding Bonds,
Series 1989, 6% due 5/15/2010 (a)(c) 28,629
===============================================================================
Oregon -- 1.2%
6,610 Portland, Oregon, Sewer System Revenue Bonds,
Series A, 5.75% due 8/01/2010 (a)(f) 6,992
===============================================================================
Texas -- 6.4%
20,970 Harris County, Texas, Health Facilities Development
Corporation, Revenue Refunding Bonds (School
Health Care System), Series B, 5.75%
due 7/01/2027 (e) 23,868
12,500 San Antonio, Texas, Electric and Gas Revenue Bonds,
Series A, 5.75% due 2/01/2010 (a) 13,095
===============================================================================
Washington -- 9.0%
Energy Northwest, Washington, Electric Revenue
Refunding Bonds:
11,660 (Columbia Generating Station),
Series A, 5.75% due 7/01/2018 (c) 12,543
7,015 (Columbia Generating Station),
Series B, 6% due 7/01/2018 (h) 7,622
14,700 (Project Number 1), Series B, 6%
due 7/01/2017 (c) 16,023
15,385 Washington State, Various Purpose, GO, Series B, 6%
due 1/01/2010 (a)(i) 16,172
-------------------------------------------------------------------------------
Total Municipal Bonds Held in Trust
(Cost -- $201,037) -- 35.3% 204,630
===============================================================================
===============================================================================
Shares
Held Short-Term Securities
===============================================================================
7,923 Merrill Lynch Institutional Tax-Exempt Fund,
3.75% (o)(p) 7,923
-------------------------------------------------------------------------------
Total Short-Term Securities
(Cost -- $7,923) -- 1.4% 7,923
===============================================================================
Total Investments (Cost -- $970,026*) -- 172.8% 1,000,684
Other Assets Less Liabilities -- 1.9% 11,063
Liability for Trust Certificates, including
Interest Expense Payable -- (16.9%) (98,186)
Preferred Stock, at Redemption Value -- (57.8%) (334,482)
----------
Net Assets Applicable to Common Stock -- 100.0% $ 579,079
==========
10 BLACKROCK MUNIVEST FUND, INC. AUGUST 31, 2007
Schedule of Investments (concluded) (in Thousands)
* The cost and unrealized appreciation (depreciation) of investments as of
August 31, 2007, as computed for federal income tax purposes, were as
follows:
Aggregate cost ............................................. $ 875,324
=========
Gross unrealized appreciation .............................. $ 39,953
Gross unrealized depreciation .............................. (12,196)
---------
Net unrealized appreciation ................................ $ 27,757
=========
(a) Prerefunded.
(b) FNMA Collateralized.
(c) MBIA Insured.
(d) FNMA/GNMA Collateralized.
(e) Escrowed to maturity.
(f) FGIC Insured.
(g) Radian Insured.
(h) AMBAC Insured.
(i) FSA Insured.
(j) FHA Insured.
(k) FHLMC Collateralized.
(l) Security may have a maturity of more than one year at time of issuance,
but has variable rate and demand features that qualify it as a short-term
security. The rate disclosed is that currently in effect. This rate
changes periodically based upon prevailing market rates.
(m) The rate disclosed is that currently in effect. This rate changes
periodically and inversely based upon prevailing market rates.
(n) XL Capital Insured.
(o) Investments in companies considered to be an affiliate of the Fund, for
purposes of Section 2(a)(3) of the Investment Company Act of 1940, were as
follows:
--------------------------------------------------------------------------
Net Dividend
Affiliate Activity Income
--------------------------------------------------------------------------
Merrill Lynch Institutional Tax-Exempt Fund 7,501 $342
--------------------------------------------------------------------------
(p) Represents the current yield as of August 31, 2007.
(q) Securities represent underlying bonds transferred to a separate
securitization trust established in a tender option bond transaction in
which the Fund may have acquired the residual interest certificates. These
securities serve as collateral in a financing transaction. See note 1(c)
to financial statements for details of municipal bonds held in trust.
o Forward interest rate swaps outstanding as of August 31, 2007 were as
follows:
-------------------------------------------------------------------------
Notional Unrealized
Amounts Depreciation
-------------------------------------------------------------------------
Pay a fixed rate of 4.0025% and receive
a floating rate based on 1-week Bond
Market Association Rate
Broker, Goldman Sachs
Expires October 2017 $ 8,750 $ (169)
Pay a fixed rate of 3.983% and receive
a floating rate based on 1-week (SIFMA)
Municipal Swap Index Rate
Broker, JPMorgan Chase
Expires November 2017 $25,000 (440)
Pay a fixed rate of 4.117% and receive
a floating rate based on 1-week (SIFMA)
Municipal Swap Index Rate
Broker, JPMorgan Chase
Expires November 2027 $16,250 (102)
Pay a fixed rate of 4.357% and receive
a floating rate based on 1-week (SIFMA)
Municipal Swap Index rate
Broker, JPMorgan Chase
Expires November 2027 $17,250 (614)
-------------------------------------------------------------------------
Total $ (1,325)
============
See Notes to Financial Statements.
BLACKROCK MUNIVEST FUND, INC. AUGUST 31, 2007 11
Statement of Net Assets
As of August 31, 2007
===================================================================================================================================
Assets
-----------------------------------------------------------------------------------------------------------------------------------
Investments in unaffiliated securities, at value (identified cost -- $962,103,015) . $ 992,761,474
Investments in affiliated securities, at value (identified cost -- $7,923,006) ..... 7,923,006
Cash ............................................................................... 20,503
Receivables:
Interest ....................................................................... $ 13,507,646
Securities sold ................................................................ 10,589,337 24,096,983
-------------
Prepaid expenses ................................................................... 11,879
--------------
Total assets ....................................................................... 1,024,813,845
--------------
===================================================================================================================================
Liabilities
-----------------------------------------------------------------------------------------------------------------------------------
Trust certificates ................................................................. 97,603,890
Unrealized depreciation on forward interest rate swaps ............................. 1,325,162
Payables:
Securities purchased ........................................................... 8,504,101
Dividends to Common Stock shareholders ......................................... 2,652,477
Interest expense and fees ...................................................... 582,309
Investment adviser ............................................................. 423,729
Other affiliates ............................................................... 6,872 12,169,488
-------------
Accrued expenses ................................................................... 154,881
--------------
Total liabilities .................................................................. 111,253,421
--------------
===================================================================================================================================
Preferred Stock
-----------------------------------------------------------------------------------------------------------------------------------
Preferred Stock, at redemption value, par value $.10 per share; 10,000,000 shares
authorized (2,000 Series A Shares, 2,000 Series B Shares, 2,000 Series C Shares,
2,000 Series D Shares, 3,000 Series E Shares and 2,360 Series F Shares) of
AMPS* authorized, issued and outstanding at $25,000 per share
liquidation preference ........................................................... 334,481,836
--------------
===================================================================================================================================
Net Assets Applicable to Common Stock
-----------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common Stock .............................................. $ 579,078,588
==============
===================================================================================================================================
Analysis of Net Assets Applicable to Common Stock
-----------------------------------------------------------------------------------------------------------------------------------
Common Stock, par value $.10 per share; 150,000,000 shares authorized
(61,685,521 shares issued and outstanding) ....................................... $ 6,168,552
Paid-in capital in excess of par ................................................... 567,772,977
Undistributed investment income -- net ............................................. $ 5,076,193
Accumulated realized capital losses -- net ......................................... (29,272,431)
Unrealized appreciation -- net ..................................................... 29,333,297
-------------
Total accumulated earnings -- net .................................................. 5,137,059
--------------
Total -- Equivalent to $9.39 net asset value per share of Common Stock
(market price -- $9.35) .......................................................... $ 579,078,588
==============
* Auction Market Preferred Stock.
See Notes to Financial Statements.
12 BLACKROCK MUNIVEST FUND, INC. AUGUST 31, 2007
Statement of Operations
For the Year Ended August 31, 2007
===================================================================================================================================
Investment Income
-----------------------------------------------------------------------------------------------------------------------------------
Interest ........................................................................... $ 54,580,420
Dividends from affiliates .......................................................... 342,205
-------------
Total income ....................................................................... 54,922,625
-------------
===================================================================================================================================
Expenses
-----------------------------------------------------------------------------------------------------------------------------------
Investment advisory fees ........................................................... $ 4,738,588
Interest expense and fees .......................................................... 3,887,805
Commission fees .................................................................... 845,251
Accounting services ................................................................ 261,509
Transfer agent fees ................................................................ 96,130
Professional fees .................................................................. 91,159
Printing and shareholder reports ................................................... 61,848
Custodian fees ..................................................................... 44,395
Pricing fees ....................................................................... 30,821
Directors' fees and expenses ....................................................... 30,160
Listing fees ....................................................................... 14,687
Other .............................................................................. 62,960
-------------
Total expenses before reimbursement ................................................ 10,165,313
Reimbursement of expenses .......................................................... (19,265)
-------------
Total expenses after reimbursement ................................................. 10,146,048
-------------
Investment income -- net ........................................................... 44,776,577
-------------
===================================================================================================================================
Realized & Unrealized Gain (Loss) -- Net
-----------------------------------------------------------------------------------------------------------------------------------
Realized gain (loss) on:
Investments -- net ............................................................. 3,061,655
Forward interest rate swaps -- net ............................................. (1,035,331) 2,026,324
-------------
Change in unrealized appreciation/depreciation on:
Investments -- net ............................................................. (35,262,132)
Forward interest rate swaps -- net ............................................. (509,987) (35,772,119)
-------------------------------
Total realized and unrealized loss -- net .......................................... (33,745,795)
-------------
===================================================================================================================================
Dividends to Preferred Stock Shareholders
-----------------------------------------------------------------------------------------------------------------------------------
Investment income -- net ............................................................ (12,083,580)
-------------
Net Decrease in Net Assets Resulting from Operations ................................ $ (1,052,798)
=============
See Notes to Financial Statements.
BLACKROCK MUNIVEST FUND, INC. AUGUST 31, 2007 13
Statements of Changes in Net Assets
For the Year Ended
August 31,
-------------------------------
Increase (Decrease) in Net Assets: 2007 2006
===================================================================================================================================
Operations
-----------------------------------------------------------------------------------------------------------------------------------
Investment income -- net ........................................................... $ 44,776,577 $ 43,135,016
Realized gain -- net ............................................................... 2,026,324 5,325,206
Change in unrealized appreciation/depreciation -- net .............................. (35,772,119) (19,895,286)
Dividends to Preferred Stock shareholders .......................................... (12,083,580) (10,449,162)
-------------------------------
Net increase (decrease) in net assets resulting from operations .................... (1,052,798) 18,115,774
-------------------------------
===================================================================================================================================
Dividends to Common Stock Shareholders
-----------------------------------------------------------------------------------------------------------------------------------
Investment income -- net ........................................................... (32,123,465) (36,781,273)
-------------------------------
Net decrease in net assets resulting from dividends to Common Stock shareholders ... (32,123,465) (36,781,273)
-------------------------------
===================================================================================================================================
Capital Stock Transactions
-----------------------------------------------------------------------------------------------------------------------------------
Value of shares issued to Common Stock shareholders in reinvestment of dividends ... 2,642,853 715,039
-------------------------------
Net increase in net assets resulting from capital stock transactions ............... 2,642,853 715,039
-------------------------------
===================================================================================================================================
Net Assets Applicable to Common Stock
-----------------------------------------------------------------------------------------------------------------------------------
Total decrease in net assets applicable to Common Stock ............................ (30,533,410) (17,950,460)
Beginning of year .................................................................. 609,611,998 627,562,458
-------------------------------
End of year* ....................................................................... $ 579,078,588 $ 609,611,998
===============================
* Undistributed investment income -- net ....................................... $ 5,076,193 $ 4,506,661
===============================
See Notes to Financial Statements.
14 BLACKROCK MUNIVEST FUND, INC. AUGUST 31, 2007
Financial Highlights
The following per share data
and ratios have been derived For the Year Ended August 31,
from information provided in ----------------------------------------------------------------
the financial statements. 2007 2006 2005 2004 2003
===================================================================================================================================
Per Share Operating Performance
-----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year ................. $ 9.93 $ 10.23 $ 9.91 $ 9.54 $ 9.76
----------------------------------------------------------------
Investment income -- net*** ........................ .73 .70 .74 .72 .72
Realized and unrealized gain (loss) -- net ......... (.55) (.23) .35 .36 (.26)
Less dividends to Preferred Stock
shareholders from investment
income -- net .................................. (.20) (.17) (.10) (.04) (.05)
----------------------------------------------------------------
Total from investment operations ................... (.02) .30 .99 1.04 .41
----------------------------------------------------------------
Less dividends to Common Stock
shareholders from investment
income -- net .................................. (.52) (.60) (.67) (.66) (.63)
----------------------------------------------------------------
Offering costs resulting from the issuance
of Preferred Stock ............................. -- -- --++ (.01) --
----------------------------------------------------------------
Net asset value, end of year ....................... $ 9.39 $ 9.93 $ 10.23 $ 9.91 $ 9.54
----------------------------------------------------------------
Market price per share, end of year ................ $ 9.35 $ 9.66 $ 10.15 $ 9.30 $ 8.80
================================================================
===================================================================================================================================
Total Investment Return+
-----------------------------------------------------------------------------------------------------------------------------------
Based on net asset value per share ................. (.30%) 3.27% 10.64% 11.60% 4.79%
================================================================
Based on market price per share .................... 2.05% 1.26% 16.97% 13.53% 3.56%
================================================================
===================================================================================================================================
Ratios Based on Average Net Assets Applicable to Common Stock
-----------------------------------------------------------------------------------------------------------------------------------
Expenses, net of reimbursement and
excluding interest expense and fees* ........... 1.02% 1.04% 1.02% .94% .95%
================================================================
Expenses, net of reimbursement* .................... 1.66% 1.60% 1.45% 1.23% 1.24%
================================================================
Total expenses* .................................... 1.66% 1.60% 1.45% 1.23% 1.24%
================================================================
Total investment income -- net* .................... 7.33% 7.11% 7.38% 7.37% 7.33%
================================================================
Amount of dividends to Preferred Stock
shareholders ................................... 1.98% 1.72% 1.02% .43% .50%
================================================================
Investment income -- net, to Common Stock
shareholders ................................... 5.35% 5.39% 6.36% 6.94% 6.83%
================================================================
===================================================================================================================================
Ratios Based on Average Net Assets Applicable to Preferred Stock
-----------------------------------------------------------------------------------------------------------------------------------
Dividends to Preferred Stock shareholders .......... 3.59% 3.13% 1.90% .95% 1.11%
================================================================
===================================================================================================================================
Supplemental Data
-----------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common Stock,
end of year (in thousands) ..................... $579,079 $609,612 $627,562 $607,842 $585,022
================================================================
Preferred Stock outstanding at liquidation
preference, end of year (in thousands) ......... $334,000 $334,000 $334,000 $334,000 $275,000
================================================================
Portfolio turnover ................................. 39% 56% 49% 40% 38%
================================================================
===================================================================================================================================
Leverage
-----------------------------------------------------------------------------------------------------------------------------------
Asset coverage per $1,000 .......................... $ 2,734 $ 2,825 $ 2,879 $ 2,820 $ 3,127
================================================================
===================================================================================================================================
Dividends Per Share on Preferred Stock Outstanding
-----------------------------------------------------------------------------------------------------------------------------------
Series A -- Investment income -- net ............... $ 897 $ 750 $ 477 $ 244 $ 266
================================================================
Series B -- Investment income -- net ............... $ 917 $ 822 $ 458 $ 238 $ 278
================================================================
Series C -- Investment income -- net ............... $ 917 $ 803 $ 485 $ 239 $ 269
================================================================
Series D -- Investment income -- net ............... $ 906 $ 773 $ 478 $ 242 $ 306
================================================================
Series E -- Investment income -- net ............... $ 888 $ 770 $ 464 $ 229 $ 269
================================================================
Series F** -- Investment income -- net ............. $ 910 $ 781 $ 485 -- --
================================================================
* Do not reflect the effect of dividends to Preferred Stock shareholders.
** Series F was issued on August 31, 2004.
*** Based on average shares outstanding.
+ 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.
++ Amount is less than $(.01) per share.
See Notes to Financial Statements.
BLACKROCK MUNIVEST FUND, INC. AUGUST 31, 2007 15
Notes to Financial Statements
1. Significant Accounting Policies:
BlackRock MuniVest Fund, Inc. (the "Fund") is registered under the Investment
Company Act of 1940, as amended, as a non-diversified, closed-end management
investment company. The Fund's financial statements are prepared in conformity
with U.S. generally accepted accounting principles, which may require the use of
management accruals and estimates. Actual results may differ from these
estimates. The Fund determines and makes available for publication the net asset
value of its Common Stock on a daily basis. The Fund's Common Stock shares are
listed on the American Stock Exchange under the symbol MVF. The following is a
summary of significant accounting policies followed by the Fund.
(a) Valuation of investments -- Municipal bonds are traded primarily in the
over-the-counter ("OTC") markets and are valued at the last available bid price
in the OTC market or on the basis of values as obtained by a pricing service.
Pricing services use valuation matrixes that incorporate both dealer-supplied
valuations and valuation models. The procedures of the pricing service and its
valuations are reviewed by the officers of the Fund under the general direction
of the Board of Directors. Such valuations and procedures are reviewed
periodically by the Board of Directors of the Fund. Financial futures contracts
and options thereon, which are traded on exchanges, are valued at their closing
prices as of the close of such exchanges. Options written or purchased are
valued at the last sale price in the case of exchange-traded options. In the
case of options traded in the OTC market, valuation is the last asked price
(options written) or the last bid price (options purchased). Swap agreements are
valued by quoted fair values received daily by the Fund's pricing service.
Investments in open-end investment companies are valued at their net asset value
each business day. Securities and other assets for which market quotations are
not readily available are valued at fair value as determined in good faith by or
under the direction of the Board of Directors of the Fund. Such valuations and
procedures will be reviewed periodically by the Board of Directors of the Fund.
(b) Derivative financial instruments -- The Fund may engage in various portfolio
investment strategies both to increase the return of the Fund and to hedge, or
protect, its exposure to interest rate movements and movements in the securities
markets. Losses may arise due to changes in the value of the contract due to an
unfavorable change in the price of the underlying security or index, or if the
counterparty does not perform under the contract. The counterparty for certain
instruments may pledge cash or securities as collateral.
o Financial futures contracts -- The Fund may purchase or sell financial
futures contracts and options on such financial futures contracts.
Financial 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 Fund deposits and maintains as
collateral such initial margin as required by the exchange on which the
transaction is effected. Pursuant to the contract, the Fund 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 recorded by the Fund as unrealized gains or
losses. When the contract is closed, the Fund 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.
o Options -- The Fund may write covered call options and purchase call and
put options. When the Fund writes an option, an amount equal to the
premium received by the Fund is reflected as an asset and an equivalent
liability. The amount of the liability is subsequently marked-to-market
reflecting 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 Fund enters into a closing
transaction), the Fund 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 paid or received).
Written and purchased options are non-income producing investments.
o Forward interest rate swaps -- The Fund may enter into forward interest
rate swaps. In a forward interest rate swap, the Fund and the counterparty
agree to make periodic net payments on a specified notional contract
amount, commencing on a specified future effective date, unless terminated
earlier. When the agreement is closed, the Fund records a realized gain or
loss in an amount equal to the value of the agreement.
16 BLACKROCK MUNIVEST FUND, INC. AUGUST 31, 2007
Notes to Financial Statements (continued)
o Swaps -- The Fund may enter into swap agreements, which are OTC contracts
in which the Fund and a counterparty agree to make periodic net payments
on a specified notional amount. The net payments can be made for a set
period of time or may be triggered by a predetermined credit event. The
net periodic payments may be based on a fixed or variable interest rate;
the change in market value of a specified security, basket of securities,
or index; or the return generated by a security. These periodic payments
received or made by the Fund are recorded in the accompanying Statement of
Operations as realized gains or losses, respectively. Gains or losses are
also realized upon termination of the swap agreements. Swaps are
marked-to-market daily and changes in value are recorded as unrealized
appreciation (depreciation). Risks include changes in the returns of the
underlying instruments, failure of the counterparties to perform under the
contracts' terms and the possible lack of liquidity with respect to the
swap agreements.
(c) Municipal bonds held in trust -- The Fund invests in leveraged residual
certificates ("TOB Residuals") issued by tender option bond trusts ("TOBs"). A
TOB is established by a third party sponsor forming a special purpose entity,
into which the Fund, or an agent on behalf of the Fund, transfers municipal
securities. A TOB typically issues two classes of beneficial interests:
short-term floating rate certificates, which are sold to third party investors,
and residual certificates, which are generally issued to the Fund which made the
transfer or to affiliates of the Fund. The transfer of the municipal securities
to a TOB does not qualify for sale treatment under Statement of Financial
Accounting Standards No. 140 "Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities," therefore the municipal
securities deposited into a TOB are presented in the Fund's schedule of
investments and the proceeds from the transaction are reported as a liability
for trust certificates of the Fund. Similarly, proceeds from residual
certificates issued to affiliates, if any, from the transaction are included in
the liability for trust certificates. Interest income from the underlying
security is recorded by the Fund on an accrual basis. Interest expense incurred
on the secured borrowing and other expenses related to remarketing,
administration and trustee services to a TOB are reported as expenses of the
Fund. The floating rate certificates have interest rates that generally reset
weekly and their holders have the option to tender certificates to the TOB for
redemption at par at each reset date. The residual interests held by the Fund
include the right of the Fund (1) to cause the holders of a proportional share
of the floating rate certificates to tender their certificates at par, and (2)
to transfer a corresponding share of the municipal securities from the TOB to
the Fund. At August 31, 2007, the aggregate value of the underlying municipal
securities transferred to TOBs was $204,629,901, the related liability for trust
certificates was $97,603,890 and the range of interest rates on the liability
for trust certificates was 3.682% to 3.734%.
Financial transactions executed through TOBs generally will underperform the
market for fixed rate municipal bonds in a rising interest rate environment, but
tend to outperform the market for fixed rate bonds when interest rates decline
or remain relatively stable. Should short-term interest rates rise, the Fund's
investment in TOB Residuals likely will adversely affect the Fund's investment
income -- net and distributions to shareholders. Fluctuations in the market
value of municipal securities deposited into the TOB may adversely affect the
Fund's net asset value per share.
While the Fund's investment policies and restrictions expressly permit
investments in inverse floating rate securities such as TOB Residuals, they
generally do not allow the Fund to borrow money for purposes of making
investments. The Fund's management believes that the Fund's restrictions on
borrowings do not apply to the secured borrowings deemed to have occurred for
accounting purposes.
(d) Income taxes -- It is the Fund'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.
(e) Security transactions and investment income -- Security 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.
Interest income is recognized on the accrual basis. The Fund amortizes all
premiums and discounts on debt securities.
(f) Dividends and distributions -- Dividends from net investment income are
declared and paid monthly. Distributions of capital gains are recorded on the
ex-dividend dates.
(g) Recent accounting pronouncements -- In July 2006, the Financial Accounting
Standards Board ("FASB") issued Interpretation No. 48 ("FIN 48") "Accounting for
Uncertainty in Income Taxes -- an interpretation of FASB Statement No. 109." FIN
48 prescribes the minimum recognition threshold a tax position must meet in
connection with accounting for uncertainties in income tax positions taken or
expected to be
BLACKROCK MUNIVEST FUND, INC. AUGUST 31, 2007 17
Notes to Financial Statements (continued)
taken by an entity, including mutual funds, before being measured and recognized
in the financial statements. Adoption of FIN 48 is required for the last net
asset value calculation in the first required financial statement reporting
period for fiscal years beginning after December 15, 2006. The impact on the
Fund's financial statements, if any, is currently being assessed.
In September 2006, Statement of Financial Accounting Standards No. 157, "Fair
Value Measurements" ("FAS 157"), was issued and is effective for fiscal years
beginning after November 15, 2007. FAS 157 defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. At this time, management is evaluating the implication of FAS 157
and its impact on the Fund's financial statements, if any, has not been
determined.
In addition, in February 2007, Statement of Financial Accounting Standards No.
159, "The Fair Value Option for Financial Assets and Financial Liabilities"
("FAS 159"), was issued and is effective for fiscal years beginning after
November 15, 2007. Early adoption is permitted as of the beginning of a fiscal
year that begins on or before November 15, 2007, provided the entity also elects
to apply the provisions of FAS 157. FAS 159 permits entities to choose to
measure many financial instruments and certain other items at fair value that
are not currently required to be measured at fair value. FAS 159 also
establishes presentation and disclosure requirements designed to facilitate
comparisons between entities that choose different measurement attributes for
similar types of assets and liabilities. At this time, management is evaluating
the implications of FAS 159 and its impact on the Fund's financial statements,
if any, has not been determined.
2. Investment Advisory Agreement and Transactions with Affiliates:
On September 29, 2006, BlackRock, Inc. and Merrill Lynch & Co., Inc. ("Merrill
Lynch") combined Merrill Lynch's investment management business, Merrill Lynch
Investment Managers, L.P. ("MLIM") and its affiliates, including Fund Asset
Management, L.P. ("FAM"), with BlackRock, Inc. to create a new independent
company. Merrill Lynch has a 49.8% economic interest and a 45% voting interest
in the combined company and The PNC Financial Services Group, Inc. has
approximately a 34% economic and voting interest. The new company operates under
the BlackRock name and is governed by a board of directors with a majority of
independent members.
On August 15, 2006, shareholders of the Fund approved a new Investment Advisory
Agreement with BlackRock Advisors, Inc. BlackRock Advisors, Inc. was reorganized
into a limited liability company and renamed BlackRock Advisors, LLC (the
"Manager"). The new Investment Advisory Agreement between the Fund and the
Manager became effective on September 29, 2006. Prior to September 29, 2006, FAM
was the manager. The general partner of FAM is an indirect, wholly owned
subsidiary of Merrill Lynch, which is the limited partner.
The Manager is responsible for the management of the Fund's portfolio and
provides the necessary personnel, facilities, equipment and certain other
services necessary to the operations of the Fund. For such services, the Fund
pays a monthly fee at an annual rate of .50% of the Fund's average daily net
assets, including net assets acquired from the sale of Preferred Stock. The
Manager (and previously FAM) has agreed to reimburse its management fee by the
amount of management fees the Fund pays to the Manager (and previously FAM)
indirectly through its investment in the Merrill Lynch Institutional Tax-Exempt
Fund. For the period September 1, 2006 to September 29, 2006, FAM reimbursed the
Fund in the amount of $1,469. For the period September 30, 2006 to August 31,
2007, the Manager reimbursed the Fund in the amount of $17,796.
In addition, the Manager has entered into a Sub-Advisory Agreement with
BlackRock Investment Management, LLC ("BIM"), an affiliate of the Manager, under
which the Manager pays BIM for services it provides a monthly fee that is a
percentage of the management fee paid by the Fund to the Manager.
For the year ended August 31, 2007, the Fund reimbursed FAM and the Manager $988
and $16,104, respectively, for certain accounting services.
Prior to September 29, 2006, certain officers and/or directors of the Fund were
officers and/or directors of FAM, Merrill Lynch and/or MLIM.
Commencing September 29, 2006, certain officers and/or directors of the Fund are
officers and/or directors of BlackRock, Inc. or its affiliates.
3. Investments:
Purchases and sales of investments, excluding short-term securities, for the
year ended August 31, 2007 were $401,058,986 and $398,163,459, respectively.
18 BLACKROCK MUNIVEST FUND, INC. AUGUST 31, 2007
Notes to Financial Statements (concluded)
4. Capital Stock Transactions:
Common Stock
At August 31, 2007, the Fund had one class of shares of Common Stock, par value
$.10 per share, of which 150,000,000 shares were authorized.
Shares issued and outstanding for the years ended August 31, 2007 and August 31,
2006 increased by 267,589 and 71,644 respectively, as a result of dividend
reinvestments.
Preferred Stock
Shares of Auction Market Preferred Stock are redeemable shares of Preferred
Stock of the Fund with a liquidation preference of $25,000 per share plus
accrued and unpaid dividends, that entitle their holders to receive cash
dividends at an annual rate that may vary for the successive dividend periods
for each series. The Fund is authorized to issue 10,000,000 shares of Preferred
Stock. The yields in effect at August 31, 2007 were as follows: Series A, 4.10%;
Series B, 3.58%; Series C, 3.95%; Series D, 3.78%; Series E, 3.60%; and Series
F, 4.00%.
The Fund pays commissions to certain broker-dealers at the end of each auction
at an annual rate ranging from .25% to .375% calculated on the proceeds of each
auction. For the year ended August 31, 2007, Merrill Lynch, Pierce, Fenner &
Smith Incorporated, an affiliate of the Manager, received $331,125 as
commissions.
5. Distributions to Shareholders:
The Fund paid a tax-exempt income dividend to holders of Common Stock in the
amount of $.043000 per share on October 1, 2007 to shareholders of record on
September 14, 2007.
The tax character of distributions paid during the fiscal years ended August 31,
2007 and August 31, 2006 was as follows:
--------------------------------------------------------------------------------
8/31/2007 8/31/2006
--------------------------------------------------------------------------------
Distributions paid from:
Tax-exempt income .............................. $44,207,045 $47,230,435
--------------------------
Total distributions .............................. $44,207,045 $47,230,435
==========================
As of August 31, 2007, the components of accumulated earnings on a tax basis
were as follows:
-----------------------------------------------------------------------------
Undistributed tax-exempt income -- net ...................... $ 3,243,931
Undistributed long-term capital gains -- net ................ --
Total undistributed earnings -- net ......................... 3,243,931
Capital loss carryforward ................................... (13,312,422)*
Unrealized gains -- net ..................................... 15,205,550**
Total accumulated earnings -- net ........................... $ 5,137,059
============
* On August 31, 2007, the Fund had a net capital loss carryforward of
$13,312,422, all of which expires in 2009. This amount will be available
to offset like amounts of any future taxable gains.
** The difference between book-basis and tax-basis net unrealized gains is
attributable primarily to the tax deferral of losses on wash sales, the
tax deferral of losses on straddles and the difference between the book
and tax treatment of residual interests in tender option bond trusts.
BLACKROCK MUNIVEST FUND, INC. AUGUST 31, 2007 19
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors of BlackRock MuniVest Fund, Inc.:
We have audited the accompanying statement of net assets, including the schedule
of investments, of BlackRock MuniVest Fund, Inc. as of August 31, 2007, and the
related statement of operations for the year then ended, the statements of
changes in net assets for each of the two years in the period then ended, and
the financial highlights for each of the five years in the period then ended.
These financial statements and financial highlights are the responsibility of
the Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. The Fund
is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audits included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Fund's internal control over
financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. Our procedures included confirmation
of securities owned as of August 31, 2007, by correspondence with the custodian
and brokers; where replies were not received from brokers, we performed other
auditing procedures. We believe that our audits provide a reasonable basis for
our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
BlackRock MuniVest Fund, Inc. as of August 31, 2007, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and its financial highlights for each of
the five years in the period then ended, in conformity with accounting
principles generally accepted in the United States of America.
Deloitte & Touche LLP
Princeton, New Jersey
October 26, 2007
Important Tax Information (Unaudited)
All of the net investment income distributions paid by BlackRock MuniVest Fund,
Inc. during the taxable year ended August 31, 2007 qualify as tax-exempt
interest dividends for federal income tax purposes.
20 BLACKROCK MUNIVEST FUND, INC. AUGUST 31, 2007
Automatic Dividend Reinvestment Plan
How the Plan Works -- The Fund offers a Dividend Reinvestment Plan (the "Plan")
under which income and capital gains dividends paid by the Fund are
automatically reinvested in additional shares of Common Stock of the Fund. The
Plan is administered on behalf of the shareholders by The Bank of New York (the
"Plan Agent"). Under the Plan, whenever the Fund declares a dividend,
participants in the Plan will receive the equivalent in shares of Common Stock
of the Fund. The Plan Agent will acquire the shares for the participant's
account either (i) through receipt of additional unissued but authorized shares
of the Fund ("newly issued shares") or (ii) by purchase of outstanding shares of
Common Stock on the open market on the New York Stock Exchange or elsewhere. If,
on the dividend payment date, the Fund's net asset value per share is equal to
or less than the market price per share plus estimated brokerage commissions (a
condition often referred to as a "market premium"), the Plan Agent will invest
the dividend amount in newly issued shares. If the Fund's net asset value per
share is greater than the market price per share (a condition often referred to
as a "market discount"), the Plan Agent will invest the dividend amount by
purchasing on the open market additional shares. If the Plan Agent is unable to
invest the full dividend amount in open market purchases, or if the market
discount shifts to a market premium during the purchase period, the Plan Agent
will invest any uninvested portion in newly issued shares. The shares acquired
are credited to each shareholder's account. The amount credited is determined by
dividing the dollar amount of the dividend by either (i) when the shares are
newly issued, the net asset value per share on the date the shares are issued or
(ii) when shares are purchased in the open market, the average purchase price
per share.
Participation in the Plan -- Participation in the Plan is automatic, that is, a
shareholder is automatically enrolled in the Plan when he or she purchases
shares of Common Stock of the Fund unless the shareholder specifically elects
not to participate in the Plan. Shareholders who elect not to participate will
receive all dividend distributions in cash. Shareholders who do not wish to
participate in the Plan must advise the Plan Agent in writing (at the address
set forth below) that they elect not to participate in the Plan. Participation
in the Plan is completely voluntary and may be terminated or resumed at any time
without penalty by writing to the Plan Agent.
Benefits of the Plan -- The Plan provides an easy, convenient way for
shareholders to make additional, regular investments in the Fund. The Plan
promotes a long-term strategy of investing at a lower cost. All shares acquired
pursuant to the Plan receive voting rights. In addition, if the market price
plus commissions of the Fund's shares is above the net asset value, participants
in the Plan will receive shares of the Fund for less than they could otherwise
purchase them and with a cash value greater than the value of any cash
distribution they would have received. However, there may not be enough shares
available in the market to make distributions in shares at prices below the net
asset value. Also, since the Fund does not redeem shares, the price on resale
may be more or less than the net asset value.
Plan Fees -- There are no enrollment fees or brokerage fees for participating in
the Plan. The Plan Agent's service fees for handling the reinvestment of
distributions are paid for by the Fund. However, brokerage commissions may be
incurred when the Fund purchases shares on the open market and shareholders will
pay a pro rata share of any such commissions.
Tax Implications -- The automatic reinvestment of dividends and distributions
will not relieve participants of any federal, state or local income tax that may
be payable (or required to be withheld) on such dividends. Therefore, income and
capital gains may still be realized even though shareholders do not receive
cash. The value of shares acquired pursuant to the Plan will generally be
excluded from gross income to the extent that the cash amount reinvested would
be excluded from gross income. If, when the Fund's shares are trading at a
market premium, the Fund issues shares pursuant to the Plan that have a greater
fair market value than the amount of cash reinvested, it is possible that all or
a portion of the discount from the market value (which may not exceed 5% of the
fair market value of the Fund's shares) could be viewed as a taxable
distribution. If the discount is viewed as a taxable distribution, it is also
possible that the taxable character of this discount would be allocable to all
the shareholders, including shareholders who do not participate in the Plan.
Thus, shareholders who do not participate in the Plan might be required to
report as ordinary income a portion of their distributions equal to their
allocable share of the discount.
Contact Information -- All correspondence concerning the Plan, including any
questions about the Plan, should be directed to the Plan Agent at The Bank of
New York, Church Street Station, P.O. Box 11258, New York, NY 10286-1258,
Telephone: 800-432-8224.
BLACKROCK MUNIVEST FUND, INC. AUGUST 31, 2007 21
Officers and Directors
Number of
Funds and
Portfolios in
Position(s) Length of Fund Complex Other Public
Name, Address Held with Time Overseen by Directorships
and Year of Birth Fund Served Principal Occupation(s) During Past 5 Years Director Held by Director
====================================================================================================================================
Interested Director
------------------------------------------------------------------------------------------------------------------------------------
Robert C. Doll, Jr.* Fund 2005 to Vice Chairman and Director of BlackRock, 120 Funds None
P.O. Box 9011 President present Inc., Global Chief Investment Officer for 161 Portfolios
Princeton, NJ 08543-9011 and Equities, Chairman of the BlackRock Retail
1954 Director Operating Committee, and member of the
BlackRock Executive Committee since 2006;
President of the funds advised by Merrill
Lynch Investment Managers, L.P. ("MLIM") and
its affiliates ("MLIM/FAM-advised funds")
from 2005 to 2006 and Chief Investment
Officer thereof from 2001 to 2006; President
of MLIM and Fund Asset Management, L.P.
("FAM") from 2001 to 2006; Co-Head (Americas
Region) thereof from 2000 to 2001 and Senior
Vice President from 1999 to 2001; President
and Director of Princeton Services, Inc.
("Princeton Services") and President of
Princeton Administrators, L.P. ("Princeton
Administrators") from 2001 to 2006; Chief
Investment Officer of OppenheimerFunds, Inc.
in 1999 and Executive Vice President thereof
from 1991 to 1999.
---------------------------------------------------------------------------------------------------------
* Mr. Doll is a director, trustee or member of an advisory board of certain other investment
companies for which BlackRock Advisors, LLC and its affiliates act as investment adviser. Mr.
Doll is an "interested person," as defined in the Investment Company Act, of the Fund based on
his current and former positions with BlackRock, Inc. and its affiliates. Directors serve until
their resignation, removal or death, or until December 31 of the year in which they turn 72. As
Fund President, Mr. Doll serves at the pleasure of the Board of Directors.
22 BLACKROCK MUNIVEST FUND, INC. AUGUST 31, 2007
Officers and Directors (continued)
Number of
Funds and
Portfolios in
Position(s) Length of Fund Complex Other Public
Name, Address Held with Time Overseen by Directorships
and Year of Birth Fund Served Principal Occupation(s) During Past 5 Years Director Held by Director
====================================================================================================================================
Independent Directors*
------------------------------------------------------------------------------------------------------------------------------------
Ronald W. Forbes** Director 1988 to Professor Emeritus of Finance, School of 46 Funds None
P.O. Box 9095 present Business, State University of New York at 48 Portfolios
Princeton, NJ 08543-9095 Albany since 2000 and Professor thereof from
1940 1989 to 2000; International Consultant,
Urban Institute, Washington, D.C. from 1995
to 1999.
------------------------------------------------------------------------------------------------------------------------------------
Cynthia A. Montgomery Director 1994 to Professor, Harvard Business School since 46 Funds Newell Rubbermaid,
P.O. Box 9095 present 1989; Associate Professor, J.L. Kellogg 48 Portfolios Inc. (manufacturing)
Princeton, NJ 08543-9095 Graduate School of Management, Northwestern
1952 University from 1985 to 1989; Associate
Professor, Graduate School of Business
Administration, University of Michigan from
1979 to 1985; Director, Harvard Business
School Publishing since 2005; Director,
McLean Hospital since 2005.
------------------------------------------------------------------------------------------------------------------------------------
Jean Margo Reid Director 2004 to Self-employed consultant since 2001; Counsel 46 Funds None
P.O. Box 9095 present of Alliance Capital Management (investment 48 Portfolios
Princeton, NJ 08543-9095 adviser) in 2000; General Counsel, Director
1945 and Secretary of Sanford C. Bernstein & Co.,
Inc. (investment adviser/broker-dealer) from
1997 to 2000; Secretary, Sanford C.
Bernstein Fund, Inc. from 1994 to 2000;
Director and Secretary of SCB, Inc. since
1998; Director and Secretary of SCB
Partners, Inc. since 2000; Director of
Covenant House from 2001 to 2004.
------------------------------------------------------------------------------------------------------------------------------------
Roscoe S. Suddarth Director 2000 to President, Middle East Institute, from 1995 46 Funds None
P.O. Box 9095 present to 2001; Foreign Service Officer, United 48 Portfolios
Princeton, NJ 08543-9095 States Foreign Service, from 1961 to 1995
1935 and Career Minister from 1989 to 1995;
Deputy Inspector General, U.S. Department of
State, from 1991 to 1994; U.S. Ambassador to
the Hashemite Kingdom of Jordan from 1987 to
1990.
------------------------------------------------------------------------------------------------------------------------------------
Richard R. West Director 1988 to Professor of Finance from 1984 to 1995, Dean 46 Funds Bowne & Co., Inc.
P.O. Box 9095 present from 1984 to 1993 and since 1995 Dean 48 Portfolios (financial printers);
Princeton, NJ 08543-9095 Emeritus of New York University's Leonard N. Vornado Realty
1938 Stern School of Business Administration. Trust (real estate
company);
Alexander's, Inc.
(real estate company)
------------------------------------------------------------------------------------------------------------------------------------
* Directors serve until their resignation, removal or death, or until December 31 of the year in
which they turn 72.
** Chairman of the Board of Directors and the Audit Committee.
------------------------------------------------------------------------------------------------------------------------------------
BLACKROCK MUNIVEST FUND, INC. AUGUST 31, 2007 23
Officers and Directors (concluded)
Position(s) Length of
Name, Address Held with Time
and Year of Birth Fund Served Principal Occupation(s) During Past 5 Years
====================================================================================================================================
Fund Officers*
------------------------------------------------------------------------------------------------------------------------------------
Donald C. Burke Vice 1993 to Managing Director of BlackRock, Inc. since 2006; Managing Director of Merrill Lynch
P.O. Box 9011 President present Investment Managers, L.P. ("MLIM") and Fund Asset Management, L.P. ("FAM") in 2006;
Princeton, NJ 08543-9011 and and First Vice President of MLIM and FAM from 1997 to 2005 and Treasurer thereof from
1960 Treasurer 1999 to 1999 to 2006; Vice President of MLIM and FAM from 1990 to 1997.
present
------------------------------------------------------------------------------------------------------------------------------------
Karen Clark Fund Chief 2007 to Managing Director of BlackRock, Inc. and Chief Compliance Officer of certain
P.O. Box 9011 Compliance present BlackRock-advised funds since 2007; Director of BlackRock, Inc. from 2005 to 2007;
Princeton, NJ 08543-9011 Officer Principal and Senior Compliance Officer, State Street Global Advisors, from 2001 to
1965 2005; Principal Consultant, PricewaterhouseCoopers, LLP from 1998 to 2001; and
Branch Chief, Division of Investment Management and Office of Compliance
Inspections and Examinations, U.S. Securities and Exchange Commission, from 1993
to 1998.
------------------------------------------------------------------------------------------------------------------------------------
Alice A. Pellegrino Fund 2004 to Director of BlackRock, Inc. from 2006 to 2007; Director (Legal Advisory) of MLIM
P.O. Box 9011 Secretary 2007 from 2002 to 2006; Vice President of MLIM from 1999 to 2002; Attorney associated
Princeton, NJ 08543-9011 with MLIM from 1997 to 1999; Secretary of MLIM, FAM, FAM Distributors, Inc. and
1960 Princeton Services from 2004 to 2006.
------------------------------------------------------------------------------------------------------------------------------------
Howard Surloff Fund 2007 to Managing Director of BlackRock, Inc. and General Counsel of U.S. Funds at
P.O. Box 9011 Secretary present BlackRock, Inc. since 2006; General Counsel (U.S.), Goldman Sachs Asset Management
Princeton, NJ 08543-9011 from 1993 to 2006.
1965
---------------------------------------------------------------------------------------------------------
* Officers of the Fund serve at the pleasure of the Board of Directors.
------------------------------------------------------------------------------------------------------------------------------------
Custodian
The Bank of New York
100 Church Street
New York, NY 10286
Transfer Agents
Common Stock:
The Bank of New York
101 Barclay Street -- 11 East
New York, NY 10286
Preferred Stock:
The Bank of New York
101 Barclay Street -- 7 West
New York, NY 10286
24 BLACKROCK MUNIVEST FUND, INC. AUGUST 31, 2007
Dividend Policy
The Fund's dividend policy is to distribute all or a portion of its net
investment income to its shareholders on a monthly basis. In order to provide
shareholders with a more stable level of dividend distributions, the Fund may at
times pay out less than the entire amount of net investment income earned in any
particular month and may at times in any particular month pay out such
accumulated but undistributed income in addition to net investment income earned
in that month. As a result, the dividends paid by the Fund for any particular
month may be more or less than the amount of net investment income earned by the
Fund during such month. The Fund's current accumulated but undistributed net
investment income, if any, is disclosed in the Statement of Net Assets, which
comprises part of the financial information included in this report.
Availability of Quarterly Schedule of Investments
The Fund files its 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. The Fund's Forms N-Q are available on the SEC's Web site at
http://www.sec.gov. The Fund's Forms N-Q may also be reviewed and copied at the
SEC's Public Reference Room in Washington, DC. Information on the operation of
the Public Reference Room may be obtained by calling 1-800-SEC-0330
Electronic Delivery
Electronic copies of most financial reports and prospectuses are available on
the Fund's Web site. Shareholders can sign up for e-mail notifications of
quarterly statements, annual and semi-annual reports and prospectuses by
enrolling in the Fund's electronic delivery program.
Shareholders Who Hold Accounts with Investment Advisers, Banks or Brokerages:
Please contact your financial advisor to enroll. Please note that not all
investment advisers, banks or brokerages may offer this service.
BLACKROCK MUNIVEST FUND, INC. AUGUST 31, 2007 25
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 non-public 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 non-public 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 Web sites.
BlackRock does not sell or disclose to non-affiliated third parties any
non-public personal information about its Clients, except as permitted by law or
as is necessary to respond to regulatory requests or to service Client accounts.
These non-affiliated 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 non-public
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 non-public
personal information of its Clients, including procedures relating to the proper
storage and disposal of such information.
26 BLACKROCK MUNIVEST FUND, INC. AUGUST 31, 2007
BlackRock MuniVest Fund, Inc. seeks to provide shareholders with as high a level
of current income exempt from federal income taxes as is consistent with its
investment policies and prudent investment management by investing primarily in
a portfolio of long-term, investment grade municipal obligations, the interest
on which is exempt from federal income taxes in the opinion of bond counsel to
the issuer.
This report, including the financial information herein, is transmitted to the
shareholders of BlackRock MuniVest Fund, Inc. for their information. It is not a
prospectus, circular or representation intended for use in the purchase of
shares of the Fund or any securities mentioned in the report. Past performance
results shown in this report should not be considered a representation of future
performance. The Fund has leveraged its Common Stock and intends to remain
leveraged by issuing Preferred Stock to provide the Common Stock shareholders
with a potentially higher rate of return. Leverage creates risks for Common
Stock shareholders, including the likelihood of greater volatility of net asset
value and market price of shares of the Common Stock, and the risk that
fluctuations in the short-term dividend rates of the Preferred Stock may affect
the yield to Common Stock shareholders. Statements and other information herein
are as dated and are subject to change.
A description of the policies and procedures that the Fund uses to determine how
to vote proxies relating to portfolio securities is available (1) without
charge, upon request, by calling toll-free 1-800-441-7762; (2) at
www.blackrock.com; and (3) on the Securities and Exchange Commission's Web site
at http://www.sec.gov. Information about how the Fund voted proxies relating to
securities held in the Fund's portfolio during the most recent 12-month period
ended June 30 is available (1) at www.blackrock.com and (2) on the Securities
and Exchange Commission's Web site at http://www.sec.gov.
BlackRock MuniVest Fund, Inc.
P.O. Box 9011
Princeton, NJ 08543-9011
BLACKROCK
#10787-8/07
Item 2 - Code of Ethics - The registrant has adopted a code of ethics, as of
the end of the period covered by this report, applicable to the
registrant's principal executive officer, principal financial
officer and principal accounting officer, or persons performing
similar functions. During the period covered by this report, there
have been no amendments to or waivers granted under the code of
ethics. A copy of the code of ethics is available without charge at
www.blackrock.com.
Item 3 - Audit Committee Financial Expert - The registrant's board of
directors or trustees, as applicable (the "board of directors") has
determined that (i) the registrant has the following audit committee
financial experts serving on its audit committee and (ii) each audit
committee financial expert is independent: (1) Ronald W. Forbes, (2)
Richard R. West, and (3) Edward D. Zinbarg (retired as of December
31, 2006).
Under applicable securities laws, a person determined to be an audit
committee financial expert will not be deemed an "expert" for any
purpose, including without limitation for the purposes of Section 11
of the Securities Act of 1933, as a result of being designated or
identified as an audit committee financial expert. The designation
or identification as an audit committee financial expert does not
impose on such person any duties, obligations, or liabilities
greater than the duties, obligations, and liabilities imposed on
such person as a member of the audit committee and board of
directors in the absence of such designation or identification.
Item 4 - Principal Accountant Fees and Services
------------------------------------------------------------------------------------------------------------------------------------
(a) Audit Fees (b) Audit-Related Fees(1) (c) Tax Fees(2) (d) All Other Fees(3)
------------------------------------------------------------------------------------------------------------------------------------
Current Previous Current Previous Current Previous Current Previous
Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year
Entity Name End End End End End End End End
------------------------------------------------------------------------------------------------------------------------------------
BlackRock
MuniVest Fund, Inc. $55,350 $30,500 $3,500 $3,500 $6,100 $6,000 $1,042 $0
------------------------------------------------------------------------------------------------------------------------------------
1 The nature of the services include assurance and related services reasonably
related to the performance of the audit of financial statements not included in
Audit Fees.
2 The nature of the services include tax compliance, tax advice and tax
planning.
3 The nature of the services include a review of compliance procedures and
attestation thereto.
(e)(1) Audit Committee Pre-Approval Policies and Procedures:
The registrant's audit committee (the "Committee") has adopted
policies and procedures with regard to the pre-approval of services.
Audit, audit-related and tax compliance services provided to the
registrant on an annual basis require specific pre-approval by the
Committee. The Committee also must approve other non-audit services
provided to the registrant and those non-audit services provided to
the registrant's affiliated service providers that relate directly
to the operations and the financial reporting of the registrant.
Certain of these non-audit services that the Committee believes are
a) consistent with the SEC's auditor independence rules and b)
routine and recurring services that will not impair the independence
of the independent accountants may be approved by the Committee
without consideration on a specific case-by-case basis ("general
pre-approval"). However, such services will only be deemed
pre-approved provided that any individual project does not exceed
$5,000 attributable to the registrant or $50,000 for all of the
registrants the Committee oversees. Any proposed services exceeding
the pre-approved cost levels will require specific pre-approval by
the Committee, as will any other services not subject to general
pre-approval (e.g., unanticipated but permissible services). The
Committee is informed of each service approved subject to general
pre-approval at the next regularly scheduled in-person board
meeting.
(e)(2) None of the services described in each of Items 4(b) through
(d) were approved by the audit committee pursuant to paragraph
(c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(f) Not Applicable
(g) Affiliates' Aggregate Non-Audit Fees:
--------------------------------------------------------------------
Current Fiscal Previous Fiscal
Entity Name Year End Year End
--------------------------------------------------------------------
BlackRock MuniVest Fund, Inc. $295,142 $3,108,000
--------------------------------------------------------------------
(h) The registrant's audit committee has considered and determined
that the provision of non-audit services that were rendered to the
registrant's investment adviser (not including any non-affiliated
sub-adviser whose role is primarily portfolio management and is
subcontracted with or overseen by the registrant's investment
adviser), and any entity controlling, controlled by, or under common
control with the investment adviser that provides ongoing services
to the registrant that were not pre-approved pursuant to paragraph
(c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with
maintaining the principal accountant's independence.
Regulation S-X Rule 2-01(c)(7)(ii) - $284,500, 0%
Item 5 - Audit Committee of Listed Registrants - The following individuals
are members of the registrant's separately-designated standing audit
committee established in accordance with Section 3(a)(58)(A) of the
Exchange Act (15 U.S.C. 78c(a)(58)(A)):
Ronald W. Forbes
Cynthia A. Montgomery
Jean Margo Reid
Roscoe S. Suddarth
Richard R. West
Edward D. Zinbarg (retired as of December 31, 2006)
Item 6 - Schedule of Investments - The registrant's Schedule of Investments
is included as part of the Report to Stockholders filed under Item 1
of this form.
Item 7 - Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies - The registrant has delegated the
voting of proxies relating to Fund portfolio securities to its
investment adviser, BlackRock Advisors, LLC and its sub-adviser, as
applicable. The Proxy Voting Policies and Procedures of the adviser
and sub-adviser are attached hereto as Exhibit 99.PROXYPOL.
Information about how a Fund voted proxies relating to securities
held in the Fund's portfolio during the most recent 12 month period
ended June 30 is available without charge (1) at www.blackrock.com
and (2) on the Commission's web site at http://www.sec.gov.
Proxy Voting Policies and Procedures
For BlackRock Advisors, LLC
And Its Affiliated SEC Registered Investment Advisers
September 30, 2006
Table of Contents
Page
----
Introduction.................................................................
Scope of Committee Responsibilities..........................................
Special Circumstances........................................................
Voting Guidelines............................................................
Boards of Directors....................................................
Auditors...............................................................
Compensation and Benefits..............................................
Capital Structure......................................................
Corporate Charter and By-Laws..........................................
Corporate Meetings.....................................................
Investment Companies...................................................
Environmental and Social Issues........................................
Notice to Clients............................................................
Proxy Voting Policies and Procedures
These Proxy Voting Policies and Procedures ("Policy") for BlackRock
Advisors, LLC and its affiliated U.S. registered investment advisers(1)
("BlackRock") reflect our duty as a fiduciary under the Investment Advisers Act
of 1940 (the "Advisers Act") to vote proxies in the best interests of our
clients. BlackRock serves as the investment manager for investment companies,
other commingled investment vehicles and/or separate accounts of institutional
and other clients. The right to vote proxies for securities held in such
accounts belongs to BlackRock's clients. Certain clients of BlackRock have
retained the right to vote such proxies in general or in specific
circumstances.(2) Other clients, however, have delegated to BlackRock the right
to vote proxies for securities held in their accounts as part of BlackRock's
authority to manage, acquire and dispose of account assets.
When BlackRock votes proxies for a client that has delegated to BlackRock
proxy voting authority, BlackRock acts as the client's agent. Under the Advisers
Act, an investment adviser is a fiduciary that owes each of its clients a duty
of care and loyalty with respect to all services the adviser undertakes on the
client's behalf, including proxy voting. BlackRock is therefore subject to a
fiduciary duty to vote proxies in a manner BlackRock believes is consistent with
the client's best interests,(3) whether or not the client's proxy voting is
subject to the fiduciary standards of the Employee Retirement Income Security
Act of 1974 ("ERISA").(4) When voting proxies for client accounts (including
investment companies), BlackRock's primary objective is to make voting decisions
solely in the best interests of clients and ERISA clients' plan beneficiaries
and participants. In fulfilling its obligations to clients, BlackRock will seek
to act in a manner that it believes is most likely to enhance the economic value
of the underlying securities held in client accounts.(5) It is imperative that
BlackRock considers the interests of its clients, and not the interests of
BlackRock, when voting proxies and that real (or perceived) material conflicts
that may arise between BlackRock's interest and those of BlackRock's clients are
properly addressed and resolved.
----------
(1) The Policy does not apply to BlackRock Asset Management U.K. Limited and
BlackRock Investment Managers International Limited, which are U.S. registered
investment advisers based in the United Kingdom.
(2) In certain situations, a client may direct BlackRock to vote in accordance
with the client's proxy voting policies. In these situations, BlackRock will
seek to comply with such policies to the extent it would not be inconsistent
with other BlackRock legal responsibilities.
(3) Letter from Harvey L. Pitt, Chairman, SEC, to John P.M. Higgins, President,
Ram Trust Services (February 12, 2002) (Section 206 of the Investment Advisers
Act imposes a fiduciary responsibility to vote proxies fairly and in the best
interests of clients); SEC Release No. IA-2106 (February 3, 2003).
(4) DOL Interpretative Bulletin of Sections 402, 403 and 404 of ERISA at 29
C.F.R. 2509.94-2.
(5) Other considerations, such as social, labor, environmental or other
policies, may be of interest to particular clients. While BlackRock is cognizant
of the importance of such considerations, when voting proxies it will generally
take such matters into account only to the extent that they have a direct
bearing on the economic value of the underlying securities. To the extent that a
BlackRock client desires to pursue a particular social, labor, environmental or
other agenda through the proxy votes made for its securities held through
BlackRock as investment adviser, BlackRock encourages the client to consider
retaining direct proxy voting authority or to appoint independently a special
proxy voting fiduciary other than BlackRock.
1
Advisers Act Rule 206(4)-6 was adopted by the SEC in 2003 and requires,
among other things, that an investment adviser that exercises voting authority
over clients' proxy voting adopt policies and procedures reasonably designed to
ensure that the adviser votes proxies in the best interests of clients,
discloses to its clients information about those policies and procedures and
also discloses to clients how they may obtain information on how the adviser has
voted their proxies.
In light of such fiduciary duties, the requirements of Rule 206(4)-6, and
given the complexity of the issues that may be raised in connection with proxy
votes, BlackRock has adopted these policies and procedures. BlackRock's Equity
Investment Policy Oversight Committee, or a sub-committee thereof (the
"Committee"), addresses proxy voting issues on behalf of BlackRock and its
clients.(6) The Committee is comprised of senior members of BlackRock's
Portfolio Management Group and advised by BlackRock's Legal and Compliance
Department.
----------
(6) Subject to the Proxy Voting Policies of Merrill Lynch Bank & Trust Company
FSB, the Committee may also function jointly as the Proxy Voting Committee for
Merrill Lynch Bank & Trust Company FSB trust accounts managed by personnel
dually-employed by BlackRock.
2
I. Scope of Committee Responsibilities
The Committee shall have the responsibility for determining how to address
proxy votes made on behalf of all BlackRock clients, except for clients who have
retained the right to vote their own proxies, either generally or on any
specific matter. In so doing, the Committee shall seek to ensure that proxy
votes are made in the best interests of clients, and that proxy votes are
determined in a manner free from unwarranted or inappropriate influences. The
Committee shall also oversee the overall administration of proxy voting for
BlackRock accounts.(7)
The Committee shall establish BlackRock's proxy voting guidelines, with
such advice, participation and research as the Committee deems appropriate from
portfolio managers, proxy voting services or other knowledgeable interested
parties. As it is anticipated that there will not necessarily be a "right" way
to vote proxies on any given issue applicable to all facts and circumstances,
the Committee shall also be responsible for determining how the proxy voting
guidelines will be applied to specific proxy votes, in light of each issuer's
unique structure, management, strategic options and, in certain circumstances,
probable economic and other anticipated consequences of alternative actions. In
so doing, the Committee may determine to vote a particular proxy in a manner
contrary to its generally stated guidelines.
The Committee may determine that the subject matter of certain proxy
issues are not suitable for general voting guidelines and requires a
case-by-case determination, in which case the Committee may elect not to adopt a
specific voting guideline applicable to such issues. BlackRock believes that
certain proxy voting issues - such as approval of mergers and other significant
corporate transactions - require investment analysis akin to investment
decisions, and are therefore not suitable for general guidelines. The Committee
may elect to adopt a common BlackRock position on certain proxy votes that are
akin to investment decisions, or determine to permit portfolio managers to make
individual decisions on how best to maximize economic value for the accounts for
which they are responsible (similar to normal buy/sell investment decisions made
by such portfolio managers).(8)
While it is expected that BlackRock, as a fiduciary, will generally seek
to vote proxies over which BlackRock exercises voting authority in a uniform
manner for all BlackRock clients, the Committee, in conjunction with the
portfolio manager of an account, may determine that the specific circumstances
of such account require that such account's proxies be voted differently due to
such account's investment objective or other factors that differentiate it from
other accounts. In addition, on proxy votes that are akin to investment
decisions, BlackRock believes portfolio managers may from time to time
----------
(7) The Committee may delegate day-to-day administrative responsibilities to
other BlackRock personnel and/or outside service providers, as appropriate.
(8) The Committee will normally defer to portfolio managers on proxy votes that
are akin to investment decisions except for proxy votes that involve a material
conflict of interest, in which case it will determine, in its discretion, the
appropriate voting process so as to address such conflict.
3
legitimately reach differing but equally valid views, as fiduciaries for
BlackRock's clients, on how best to maximize economic value in respect of a
particular investment.
The Committee will also be responsible for ensuring the maintenance of
records of each proxy vote, as required by Advisers Act Rule 204-2.(9) All
records will be maintained in accordance with applicable law. Except as may be
required by applicable legal requirements, or as otherwise set forth herein, the
Committee's determinations and records shall be treated as proprietary,
nonpublic and confidential.
The Committee shall be assisted by other BlackRock personnel, as may be
appropriate. In particular, the Committee has delegated to the BlackRock
Operations Department responsibility for monitoring corporate actions and
ensuring that proxy votes are submitted in a timely fashion. The Operations
Department shall ensure that proxy voting issues are promptly brought to the
Committee's attention and that the Committee's proxy voting decisions are
appropriately disseminated and implemented.
To assist BlackRock in voting proxies, the Committee may retain the
services of a firm providing such services. BlackRock has currently retained
Institutional Shareholder Services ("ISS") in that role. ISS is an independent
adviser that specializes in providing a variety of fiduciary-level proxy-related
services to institutional investment managers, plan sponsors, custodians,
consultants, and other institutional investors. The services provided to
BlackRock may include, but are not limited to, in-depth research, voting
recommendations (which the Committee is not obligated to follow), vote
execution, and recordkeeping.
----------
(9) The Committee may delegate the actual maintenance of such records to an
outside service provider. Currently, the Committee has delegated the maintenance
of such records to Institutional Shareholder Services.
4
II. Special Circumstances
Routine Consents. BlackRock may be asked from time to time to consent to
an amendment to, or grant a waiver under, a loan agreement, partnership
agreement, indenture or other governing document of a specific financial
instrument held by BlackRock clients. BlackRock will generally treat such
requests for consents not as "proxies" subject to these Proxy Voting Policies
and Procedures but as investment matters to be dealt with by the responsible
BlackRock investment professionals would, provided that such consents (i) do not
relate to the election of a board of directors or appointment of auditors of a
public company, and (ii) either (A) would not otherwise materially affect the
structure, management or control of a public company, or (B) relate to a company
in which BlackRock clients hold only interests in bank loans or debt securities
and are consistent with customary standards and practices for such instruments.
Securities on Loan. Registered investment companies that are advised by
BlackRock as well as certain of our advisory clients may participate in
securities lending programs. Under most securities lending arrangements,
securities on loan may not be voted by the lender (unless the loan is recalled).
BlackRock believes that each client has the right to determine whether
participating in a securities lending program enhances returns, to contract with
the securities lending agent of its choice and to structure a securities lending
program, through its lending agent, that balances any tension between loaning
and voting securities in a matter that satisfies such client. If client has
decided to participate in a securities lending program, BlackRock will therefore
defer to the client's determination and not attempt to seek recalls solely for
the purpose of voting routine proxies as this could impact the returns received
from securities lending and make the client a less desirable lender in a
marketplace. Where a client retains a lending agent that is unaffiliated with
BlackRock, BlackRock will generally not seek to vote proxies relating to
securities on loan because BlackRock does not have a contractual right to recall
such loaned securities for the purpose of voting proxies. Where BlackRock or an
affiliate acts as the lending agent, BlackRock will also generally not seek to
recall loaned securities for proxy voting purposes, unless the portfolio manager
responsible for the account or the Committee determines that voting the proxy is
in the client's best interest and requests that the security be recalled.
Voting Proxies for Non-US Companies. While the proxy voting process is
well established in the United States, voting proxies of non-US companies
frequently involves logistical issues which can affect BlackRock's ability to
vote such proxies, as well as the desirability of voting such proxies. These
issues include (but are not limited to): (i) untimely notice of shareholder
meetings, (ii) restrictions on a foreigner's ability to exercise votes, (iii)
requirements to vote proxies in person, (iv) "shareblocking" (requirements that
investors who exercise their voting rights surrender the right to dispose of
their holdings for some specified period in proximity to the shareholder
meeting), (v) potential difficulties in translating the proxy, and (vi)
requirements to provide local agents with unrestricted powers of attorney to
facilitate voting instructions.
5
As a consequence, BlackRock votes proxies of non-US companies only on a
"best-efforts" basis. In addition, the Committee may determine that it is
generally in the best interests of BlackRock clients not to vote proxies of
companies in certain countries if the Committee determines that the costs
(including but not limited to opportunity costs associated with shareblocking
constraints) associated with exercising a vote generally are expected to
outweigh the benefit the client will derive by voting on the issuer's proposal.
If the Committee so determines in the case of a particular country, the
Committee (upon advice from BlackRock portfolio managers) may override such
determination with respect to a particular issuer's shareholder meeting if the
Committee believes the benefits of seeking to exercise a vote at such meeting
outweighs the costs, in which case BlackRock will seek to vote on a best-efforts
basis.
Securities Sold After Record Date. With respect to votes in connection
with securities held on a particular record date but sold from a client account
prior to the holding of the related meeting, BlackRock may take no action on
proposals to be voted on in such meeting.
Conflicts of Interest. From time to time, BlackRock may be required to
vote proxies in respect of an issuer that is an affiliate of BlackRock (a
"BlackRock Affiliate"), or a money management or other client of BlackRock (a
"BlackRock Client").(10) In such event, provided that the Committee is aware of
the real or potential conflict, the following procedures apply:
o The Committee intends to adhere to the voting guidelines set forth
herein for all proxy issues including matters involving BlackRock
Affiliates and BlackRock Clients. The Committee may, in its
discretion for the purposes of ensuring that an independent
determination is reached, retain an independent fiduciary to advise
the Committee on how to vote or to cast votes on behalf of
BlackRock's clients; and
o if the Committee determines not to retain an independent fiduciary,
or does not desire to follow the advice of such independent
fiduciary, the Committee shall determine how to vote the proxy after
consulting with the BlackRock Legal and Compliance Department and
concluding that the vote cast is in the client's best interest
notwithstanding the conflict.
----------
(10) Such issuers may include investment companies for which BlackRock provides
investment advisory, administrative and/or other services.
6
III. Voting Guidelines
The Committee has determined that it is appropriate and in the best
interests of BlackRock's clients to adopt the following voting guidelines, which
represent the Committee's usual voting position on certain recurring proxy
issues that are not expected to involve unusual circumstances. With respect to
any particular proxy issue, however, the Committee may elect to vote differently
than a voting guideline if the Committee determines that doing so is, in the
Committee's judgment, in the best interest of its clients. The guidelines may be
reviewed at any time upon the request of any Committee member and may be amended
or deleted upon the vote of a majority of voting Committee members present at a
Committee meeting for which there is a quorum.
7
A. Boards of Directors
These proposals concern those issues submitted to shareholders relating to
the composition of the Board of Directors of companies other than investment
companies. As a general matter, the Committee believes that a company's Board of
Directors (rather than shareholders) is most likely to have access to important,
nonpublic information regarding a company's business and prospects, and is
therefore best-positioned to set corporate policy and oversee management. The
Committee therefore believes that the foundation of good corporate governance is
the election of qualified, independent corporate directors who are likely to
diligently represent the interests of shareholders and oversee management of the
corporation in a manner that will seek to maximize shareholder value over time.
In individual cases, the Committee may look at a Director nominee's history of
representing shareholder interests as a director of other companies, or other
factors to the extent the Committee deems relevant.
The Committee's general policy is to vote:
--------------------------------------------------------------------------------
# VOTE and DESCRIPTION
--------------------------------------------------------------------------------
A.1 FOR nominees for director of United States companies in uncontested
elections, except for nominees who
o have missed at least two meetings and, as a result, attended less
than 75% of meetings of the Board of Directors and its committees
the previous year, unless the nominee missed the meeting(s) due to
illness or company business
o voted to implement or renew a "dead-hand" poison pill
o ignored a shareholder proposal that was approved by either a
majority of the shares outstanding in any year or by the majority of
votes cast for two consecutive years
o failed to act on takeover offers where the majority of the
shareholders have tendered their shares
o are corporate insiders who serve on the audit, compensation or
nominating committees or on a full Board that does not have such
committees composed exclusively of independent directors
o on a case-by-case basis, have served as directors of other companies
with allegedly poor corporate governance
o sit on more than six boards of public companies
--------------------------------------------------------------------------------
A.2 FOR nominees for directors of non-U.S. companies in uncontested elections,
except for nominees from whom the Committee determines to withhold votes
due to the nominees' poor records of representing shareholder interests,
on a case-by-case basis
--------------------------------------------------------------------------------
A.3 FOR proposals to declassify Boards of Directors, except where there exists
a legitimate purpose for classifying boards
--------------------------------------------------------------------------------
A.4 AGAINST proposals to classify Boards of Directors, except where there
exists a legitimate purpose for classifying boards
--------------------------------------------------------------------------------
8
--------------------------------------------------------------------------------
A.5 AGAINST proposals supporting cumulative voting
--------------------------------------------------------------------------------
A.6 FOR proposals eliminating cumulative voting
--------------------------------------------------------------------------------
A.7 FOR proposals supporting confidential voting
--------------------------------------------------------------------------------
A.8 FOR proposals seeking election of supervisory board members
--------------------------------------------------------------------------------
A.9 AGAINST shareholder proposals seeking additional representation of women
and/or minorities generally (i.e., not specific individuals) to a Board of
Directors
--------------------------------------------------------------------------------
A.10 AGAINST shareholder proposals for term limits for directors
--------------------------------------------------------------------------------
A.11 FOR shareholder proposals to establish a mandatory retirement age for
directors who attain the age of 72 or older
--------------------------------------------------------------------------------
A.12 AGAINST shareholder proposals requiring directors to own a minimum amount
of company stock
--------------------------------------------------------------------------------
A.13 FOR proposals requiring a majority of independent directors on a Board of
Directors
--------------------------------------------------------------------------------
A.14 FOR proposals to allow a Board of Directors to delegate powers to a
committee or committees
--------------------------------------------------------------------------------
A.15 FOR proposals to require audit, compensation and/or nominating committees
of a Board of Directors to consist exclusively of independent directors
--------------------------------------------------------------------------------
A.16 AGAINST shareholder proposals seeking to prohibit a single person from
occupying the roles of chairman and chief executive officer
--------------------------------------------------------------------------------
A.17 FOR proposals to elect account inspectors
--------------------------------------------------------------------------------
A.18 FOR proposals to fix the membership of a Board of Directors at a specified
size
--------------------------------------------------------------------------------
A.19 FOR proposals permitting shareholder ability to nominate directors
directly
--------------------------------------------------------------------------------
A.20 AGAINST proposals to eliminate shareholder ability to nominate directors
directly
--------------------------------------------------------------------------------
A.21 FOR proposals permitting shareholder ability to remove directors directly
--------------------------------------------------------------------------------
A.22 AGAINST proposals to eliminate shareholder ability to remove directors
directly
--------------------------------------------------------------------------------
9
B. Auditors
These proposals concern those issues submitted to shareholders related to
the selection of auditors. As a general matter, the Committee believes that
corporate auditors have a responsibility to represent the interests of
shareholders and provide an independent view on the propriety of financial
reporting decisions of corporate management. While the Committee will generally
defer to a corporation's choice of auditor, in individual cases, the Committee
may look at an auditors' history of representing shareholder interests as
auditor of other companies, to the extent the Committee deems relevant.
The Committee's general policy is to vote:
--------------------------------------------------------------------------------
B.1 FOR approval of independent auditors, except for
o auditors that have a financial interest in, or material association
with, the company they are auditing, and are therefore believed by
the Committee not to be independent
o auditors who have rendered an opinion to any company which in the
Committee's opinion is either not consistent with best accounting
practices or not indicative of the company's financial situation
o on a case-by-case basis, auditors who in the Committee's opinion
provide a significant amount of non-audit services to the company
--------------------------------------------------------------------------------
B.2 FOR proposals seeking authorization to fix the remuneration of auditors
--------------------------------------------------------------------------------
B.3 FOR approving internal statutory auditors
--------------------------------------------------------------------------------
B.4 FOR proposals for audit firm rotation, except for proposals that would
require rotation after a period of less than 5 years
--------------------------------------------------------------------------------
10
C. Compensation and Benefits
These proposals concern those issues submitted to shareholders related to
management compensation and employee benefits. As a general matter, the
Committee favors disclosure of a company's compensation and benefit policies and
opposes excessive compensation, but believes that compensation matters are
normally best determined by a corporation's board of directors, rather than
shareholders. Proposals to "micro-manage" a company's compensation practices or
to set arbitrary restrictions on compensation or benefits will therefore
generally not be supported.
The Committee's general policy is to vote:
--------------------------------------------------------------------------------
C.1 IN ACCORDANCE WITH THE RECOMMENDATION OF ISS on compensation plans if the
ISS recommendation is based solely on whether or not the company's plan
satisfies the allowable cap as calculated by ISS. If the recommendation of
ISS is based on factors other than whether the plan satisfies the
allowable cap the Committee will analyze the particular proposed plan.
This policy applies to amendments of plans as well as to initial
approvals.
--------------------------------------------------------------------------------
C.2 FOR proposals to eliminate retirement benefits for outside directors
--------------------------------------------------------------------------------
C.3 AGAINST proposals to establish retirement benefits for outside directors
--------------------------------------------------------------------------------
C.4 FOR proposals approving the remuneration of directors or of supervisory
board members
--------------------------------------------------------------------------------
C.5 AGAINST proposals to reprice stock options
--------------------------------------------------------------------------------
C.6 FOR proposals to approve employee stock purchase plans that apply to all
employees. This policy applies to proposals to amend ESPPs if the plan as
amended applies to all employees.
--------------------------------------------------------------------------------
C.7 FOR proposals to pay retirement bonuses to directors of Japanese companies
unless the directors have served less than three years
--------------------------------------------------------------------------------
C.8 AGAINST proposals seeking to pay outside directors only in stock
--------------------------------------------------------------------------------
C.9 FOR proposals seeking further disclosure of executive pay or requiring
companies to report on their supplemental executive retirement benefits
--------------------------------------------------------------------------------
C.10 AGAINST proposals to ban all future stock or stock option grants to
executives
--------------------------------------------------------------------------------
C.11 AGAINST option plans or grants that apply to directors or employees of
"related companies" without adequate disclosure of the corporate
relationship and justification of the option policy
--------------------------------------------------------------------------------
C.12 FOR proposals to exclude pension plan income in the calculation of
earnings used in determining executive bonuses/compensation
--------------------------------------------------------------------------------
11
D. Capital Structure
These proposals relate to various requests, principally from management,
for approval of amendments that would alter the capital structure of a company,
such as an increase in authorized shares. As a general matter, the Committee
will support requests that it believes enhance the rights of common shareholders
and oppose requests that appear to be unreasonably dilutive.
The Committee's general policy is to vote:
--------------------------------------------------------------------------------
D.1 AGAINST proposals seeking authorization to issue shares without preemptive
rights except for issuances up to 10% of a non-US company's total
outstanding capital
--------------------------------------------------------------------------------
D.2 FOR management proposals seeking preemptive rights or seeking
authorization to issue shares with preemptive rights
--------------------------------------------------------------------------------
D.3 FOR management proposals approving share repurchase programs
--------------------------------------------------------------------------------
D.4 FOR management proposals to split a company's stock
--------------------------------------------------------------------------------
D.5 FOR management proposals to denominate or authorize denomination of
securities or other obligations or assets in Euros
--------------------------------------------------------------------------------
D.6 FOR proposals requiring a company to expense stock options (unless the
company has already publicly committed to do so by a certain date).
--------------------------------------------------------------------------------
12
E. Corporate Charter and By-Laws
These proposals relate to various requests for approval of amendments to a
corporation's charter or by-laws, principally for the purpose of adopting or
redeeming "poison pills". As a general matter, the Committee opposes poison pill
provisions.
The Committee's general policy is to vote:
--------------------------------------------------------------------------------
E.1 AGAINST proposals seeking to adopt a poison pill
--------------------------------------------------------------------------------
E.2 FOR proposals seeking to redeem a poison pill
--------------------------------------------------------------------------------
E.3 FOR proposals seeking to have poison pills submitted to shareholders for
ratification
--------------------------------------------------------------------------------
E.4 FOR management proposals to change the company's name
--------------------------------------------------------------------------------
13
F. Corporate Meetings
These are routine proposals relating to various requests regarding the
formalities of corporate meetings.
The Committee's general policy is to vote:
--------------------------------------------------------------------------------
F.1 AGAINST proposals that seek authority to act on "any other business that
may arise"
--------------------------------------------------------------------------------
F.2 FOR proposals designating two shareholders to keep minutes of the meeting
--------------------------------------------------------------------------------
F.3 FOR proposals concerning accepting or approving financial statements and
statutory reports
--------------------------------------------------------------------------------
F.4 FOR proposals approving the discharge of management and the supervisory
board
--------------------------------------------------------------------------------
F.5 FOR proposals approving the allocation of income and the dividend
--------------------------------------------------------------------------------
F.6 FOR proposals seeking authorization to file required documents/other
formalities
--------------------------------------------------------------------------------
F.7 FOR proposals to authorize the corporate board to ratify and execute
approved resolutions
--------------------------------------------------------------------------------
F.8 FOR proposals appointing inspectors of elections
--------------------------------------------------------------------------------
F.9 FOR proposals electing a chair of the meeting
--------------------------------------------------------------------------------
F.10 FOR proposals to permit "virtual" shareholder meetings over the Internet
--------------------------------------------------------------------------------
F.11 AGAINST proposals to require rotating sites for shareholder meetings
--------------------------------------------------------------------------------
14
G. Investment Companies
These proposals relate to proxy issues that are associated solely with
holdings of shares of investment companies, including, but not limited to,
investment companies for which BlackRock provides investment advisory,
administrative and/or other services. As with other types of companies, the
Committee believes that a fund's Board of Directors (rather than its
shareholders) is best-positioned to set fund policy and oversee management.
However, the Committee opposes granting Boards of Directors authority over
certain matters, such as changes to a fund's investment objective, that the
Investment Company Act of 1940 envisions will be approved directly by
shareholders.
The Committee's general policy is to vote:
--------------------------------------------------------------------------------
G.1 FOR nominees for director of mutual funds in uncontested elections, except
for nominees who
o have missed at least two meetings and, as a result, attended less
than 75% of meetings of the Board of Directors and its committees
the previous year, unless the nominee missed the meeting due to
illness or fund business
o ignore a shareholder proposal that was approved by either a majority
of the shares outstanding in any year or by the majority of votes
cast for two consecutive years
o are interested directors who serve on the audit or nominating
committees or on a full Board that does not have such committees
composed exclusively of independent directors
o on a case-by-case basis, have served as directors of companies with
allegedly poor corporate governance
--------------------------------------------------------------------------------
G.2 FOR the establishment of new series or classes of shares
--------------------------------------------------------------------------------
G.3 AGAINST proposals to change a fund's investment objective to
nonfundamental
--------------------------------------------------------------------------------
G.4 FOR proposals to establish a master-feeder structure or authorizing the
Board to approve a master-feeder structure without a further shareholder
vote
--------------------------------------------------------------------------------
G.5 AGAINST a shareholder proposal for the establishment of a director
ownership requirement
--------------------------------------------------------------------------------
G.6 FOR classified boards of closed-end investment companies
--------------------------------------------------------------------------------
15
H. Environmental and Social Issues
These are shareholder proposals to limit corporate conduct in some manner
that relates to the shareholder's environmental or social concerns. The
Committee generally believes that annual shareholder meetings are inappropriate
forums for the discussion of larger social issues, and opposes shareholder
resolutions "micromanaging" corporate conduct or requesting release of
information that would not help a shareholder evaluate an investment in the
corporation as an economic matter. While the Committee is generally supportive
of proposals to require corporate disclosure of matters that seem relevant and
material to the economic interests of shareholders, the Committee is generally
not supportive of proposals to require disclosure of corporate matters for other
purposes.
The Committee's general policy is to vote:
--------------------------------------------------------------------------------
H.1 AGAINST proposals seeking to have companies adopt international codes of
conduct
--------------------------------------------------------------------------------
H.2 AGAINST proposals seeking to have companies provide non-required reports
on:
o environmental liabilities;
o bank lending policies;
o corporate political contributions or activities;
o alcohol advertising and efforts to discourage drinking by minors;
o costs and risk of doing business in any individual country;
o involvement in nuclear defense systems
--------------------------------------------------------------------------------
H.3 AGAINST proposals requesting reports on Maquiladora operations or on CERES
principles
--------------------------------------------------------------------------------
H.4 AGAINST proposals seeking implementation of the CERES principles
--------------------------------------------------------------------------------
16
Notice to Clients
BlackRock will make records of any proxy vote it has made on behalf of a
client available to such client upon request.(11) BlackRock will use its best
efforts to treat proxy votes of clients as confidential, except as it may decide
to best serve its clients' interests or as may be necessary to effect such votes
or as may be required by law.
BlackRock encourage clients with an interest in particular proxy voting
issues to make their views known to BlackRock, provided that, in the absence of
specific written direction from a client on how to vote that client's proxies,
BlackRock reserves the right to vote any proxy in a manner it deems in the best
interests of its clients, as it determines in its sole discretion.
These policies are as of the date indicated on the cover hereof. The
Committee may subsequently amend these policies at any time, without notice.
----------
(11) Such request may be made to the client's portfolio or relationship manager
or addressed in writing to Secretary, BlackRock Equity Investment Policy
Oversight Committee, Legal and Compliance Department, BlackRock Inc., 40 East
52nd Street, New York, New York 10022.
17
Item 8 - Portfolio Managers of Closed-End Management Investment Companies -
as of August 31, 2007.
(a)(1) BlackRock MuniVest Fund, Inc. is managed by a team of
investment professionals comprised of Fred K. Stuebe, Director at
BlackRock, Theodore R. Jaeckel, Jr., CFA, Managing Director at
BlackRock, and Walter O'Connor, Managing Director at BlackRock. Each
is a member of BlackRock's municipal tax-exempt management group.
Mr. Jaeckel and Mr. O'Connor are responsible for setting the Fund's
overall investment strategy and overseeing the management of the
Fund. Mr. Stuebe is the Fund's lead portfolio manager and is
responsible for the day-to-day management of the Fund's portfolio
and the selection of its investments. Messrs. Jaeckel and O'Connor
have been members of the Fund's management team since 2006 and Mr.
Stuebe has been the Fund's portfolio manager since 1989.
Mr. Jaeckel joined BlackRock in 2006. Prior to joining BlackRock, he
was a Managing Director (Municipal Tax-Exempt Fund Management) of
Merrill Lynch Investment Managers, L.P. ("MLIM") from 2005 to 2006
and a Director of MLIM from 1997 to 2005. He has been a portfolio
manager with BlackRock or MLIM since 1991.
Mr. O'Connor joined BlackRock in 2006. Prior to joining BlackRock,
he was a Managing Director (Municipal Tax-Exempt Fund Management) of
MLIM from 2003 to 2006 and was a Director of MLIM from 1997 to 2002.
He has been a portfolio manager with BlackRock or MLIM since 1991.
Mr. Stuebe joined BlackRock in 2006. Prior to joining BlackRock, he
was a Director (Municipal Tax-Exempt Fund Management) of MLIM from
2000 to 2006. He has 25 years of experience investing in Municipal
Bonds as a portfolio manager on behalf of registered investment
companies. He has been a portfolio manager with BlackRock or MLIM
since 1989.
(a)(2) As of August 31, 2007:
----------------------------------------------------------------------------------------------------------------------
(iii) Number of Other Accounts and
(ii) Number of Other Accounts Managed Assets for Which Advisory Fee is
and Assets by Account Type Performance-Based
----------------------------------------------------------------------------------------------------------------------
Other Other
(i) Name of Registered Other Pooled Registered Other Pooled
Portfolio Investment Investment Other Investment Investment Other
Manager Companies Vehicles Accounts Companies Vehicles Accounts
----------------------------------------------------------------------------------------------------------------------
Fred K. Stuebe 7 0 0 0 0 0
$ 2,243,018,545 $0 $0 $0 $0 $0
----------------------------------------------------------------------------------------------------------------------
Walter O'Connor 80 0 0 0 0 0
$26,974,570,555 $0 $0 $0 $0 $0
----------------------------------------------------------------------------------------------------------------------
Theodore R. Jaeckel, Jr. 80 1 0 0 1 0
$26,974,570,555 $24,757,202 $0 $0 $24,757,202 $0
----------------------------------------------------------------------------------------------------------------------
(iv) Potential Material Conflicts of Interest
BlackRock has built a professional working environment, firm-wide
compliance culture and compliance procedures and systems designed to
protect against potential incentives that may favor one account over
another. BlackRock has adopted policies and procedures that address
the allocation of investment opportunities, execution of portfolio
transactions, personal trading by employees and other potential
conflicts of interest that are designed to ensure that all client
accounts are treated equitably over time. Nevertheless, BlackRock
furnishes investment management and advisory services to numerous
clients in addition to the Fund, and BlackRock may, consistent with
applicable law, make investment recommendations to other clients or
accounts (including accounts which are hedge funds or have
performance or higher fees paid to BlackRock, or in which portfolio
managers have a personal interest in the receipt of such fees),
which may be the same as or different from those made to the Fund.
In addition, BlackRock, its affiliates and any officer, director,
stockholder or employee may or may not have an interest in the
securities whose purchase and sale BlackRock recommends to the Fund.
BlackRock, or any of its affiliates, or any officer, director,
stockholder, employee or any member of their families may take
different actions than those recommended to the Fund by BlackRock
with respect to the same securities. Moreover, BlackRock may refrain
from rendering any advice or services concerning securities of
companies of which any of BlackRock's (or its affiliates') officers,
directors or employees are directors or officers, or companies as to
which BlackRock or any of its affiliates or the officers, directors
and employees of any of them has any substantial economic interest
or possesses material non-public information. Each portfolio manager
also may manage accounts whose investment strategies may at times be
opposed to the strategy utilized for the Fund. In this connection,
it should be noted that certain portfolio managers currently manage
certain accounts that are subject to performance fees. In addition,
certain portfolio managers assist in managing certain hedge funds
and may be entitled to receive a portion of any incentive fees
earned on such funds and a portion of such incentive fees may be
voluntarily or involuntarily deferred. Additional portfolio managers
may in the future manage other such accounts or funds and may be
entitled to receive incentive fees.
As a fiduciary, BlackRock owes a duty of loyalty to its clients and
must treat each client fairly. When BlackRock purchases or sells
securities for more than one account, the trades must be allocated
in a manner consistent with its fiduciary duties. BlackRock attempts
to allocate investments in a fair and equitable manner among client
accounts, with no account receiving preferential treatment. To this
end, BlackRock has adopted a policy that is intended to ensure that
investment opportunities are allocated fairly and equitably among
client accounts over time. This policy also seeks to achieve
reasonable efficiency in client transactions and provide BlackRock
with sufficient flexibility to allocate investments in a manner that
is consistent with the particular investment discipline and client
base.
(a)(3) As of August 31, 2007:
Portfolio Manager Compensation
Compensation Program
The elements of total compensation for portfolio managers on
BlackRock's municipal team include a fixed base salary, annual
performance-based cash and stock compensation (cash and stock bonus)
and other benefits. BlackRock has balanced these components of pay
to provide these portfolio managers with a powerful incentive to
achieve consistently superior investment performance. By design,
compensation levels for these portfolio managers fluctuate--both up
and down--with the relative investment performance of the portfolios
that they manage.
Base compensation
Like that of many asset management firms, base salaries
represent a relatively small portion of a portfolio manager's total
compensation. This approach serves to enhance the motivational value
of the performance-based (and therefore variable) compensation
elements of the compensation program.
Performance-Based Compensation
BlackRock believes that the best interests of investors are
served by recruiting and retaining exceptional asset management
talent and managing their compensation within a consistent and
disciplined framework that emphasizes pay for performance in the
context of an intensely competitive market for talent. To that end,
BlackRock and its affiliates portfolio manager incentive
compensation is based on a formulaic compensation program.
BlackRock's formulaic portfolio manager compensation program
includes: investment performance relative to a subset of general,
closed-end, leveraged municipal debt funds over 1-, 3- and 5-year
performance periods and a measure of operational efficiency.
Portfolio managers are compensated based on the pre-tax performance
of the products they manage. If a portfolio manager's tenure is less
than 5 years, performance periods will reflect time in position.
Portfolio managers are compensated based on products they manage. A
discretionary element of portfolio manager compensation may include
consideration of: financial results, expense control, profit
margins, strategic planning and implementation, quality of client
service, market share, corporate reputation, capital allocation,
compliance and risk control, leadership, workforce diversity,
supervision, technology and innovation. All factors are considered
collectively by BlackRock management.
Long-Term Retention and Incentive Plan (LTIP)
The LTIP is a long-term incentive plan that seeks to reward
certain key employees. The plan provides for the grant of awards
that are expressed as an amount of cash that, if properly vested and
subject to the attainment of certain performance goals, will be
settled in cash and/or in BlackRock, Inc. common stock.
Cash Bonus
Performance-based compensation is distributed to portfolio
managers in a combination of cash and stock. Typically, the cash
bonus, when combined with base salary, represents more than 60% of
total compensation for portfolio managers.
Stock Bonus
A portion of the dollar value of the total annual
performance-based bonus is paid in restricted shares of BlackRock
stock. Paying a portion of annual bonuses in stock puts compensation
earned by a portfolio manager for a given year "at risk" based on
the company's ability to sustain and improve its performance over
future periods. The ultimate value of stock bonuses is dependent on
future BlackRock stock price performance. As such, the stock bonus
aligns each portfolio manager's financial interests with those of
the BlackRock shareholders and encourages a balance between
short-term goals and long-term strategic objectives. Management
strongly believes that providing a significant portion of
competitive performance-based compensation in stock is in the best
interests of investors and shareholders. This approach ensures that
portfolio managers participate as shareholders in both the "downside
risk" and "upside opportunity" of the company's performance.
Portfolio managers therefore have a direct incentive to protect
BlackRock's reputation for integrity.
Other Compensation Programs
Portfolio managers who meet relative investment performance
and financial management objectives during a performance year are
eligible to participate in a deferred cash program. Awards under
this program are in the form of deferred cash that may be
benchmarked to a menu of BlackRock mutual funds (including their own
fund) during a five-year vesting period. The deferred cash program
aligns the interests of participating portfolio managers with the
investment results of BlackRock products and promotes continuity of
successful portfolio management teams.
Other Benefits
Portfolio managers are also eligible to participate in
broad-based plans offered generally to employees of BlackRock and
its affiliates, including broad-based retirement, 401(k), health,
and other employee benefit plans.
(a)(4) Beneficial Ownership of Securities. As of August 31, 2007,
none of Messrs. Stuebe, Jaeckel or O'Connor beneficially owned any
stock issued by the Fund.
Item 9 - Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers - Not Applicable due to no such
purchases during the period covered by this report.
Item 10 - Submission of Matters to a Vote of Security Holders - The
registrant's Nominating Committee will consider nominees to the
Board recommended by shareholders when a vacancy becomes available.
Shareholders who wish to recommend a nominee should send nominations
which include biographical information and set forth the
qualifications of the proposed nominee to the registrant's
Secretary. There have been no material changes to these procedures.
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 and 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 - See Item 2
12(a)(2) - Certifications - Attached hereto
12(a)(3) - Not Applicable
12(b) - Certifications - Attached hereto
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
By: /s/ Robert C. Doll, Jr.
------------------------------
Robert C. Doll, Jr.,
Chief Executive Officer (principal executive officer) of
BlackRock MuniVest Fund, Inc.
Date: October 22, 2007
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ Robert C. Doll, Jr.
------------------------------
Robert C. Doll, Jr.,
Chief Executive Officer (principal executive officer) of
BlackRock MuniVest Fund, Inc.
Date: October 22, 2007
By: /s/ Donald C. Burke
------------------------------
Donald C. Burke,
Chief Financial Officer (principal financial officer) of
BlackRock MuniVest Fund, Inc.
Date: October 22, 2007