-------------------------------------------------------------------------------
THE BLACKROCK INSURED MUNICIPAL 2008 TERM TRUST INC.
ANNUAL REPORT TO SHAREHOLDERS
REPORT OF INVESTMENT ADVISOR
-------------------------------------------------------------------------------
January 31, 2001
Dear Shareholder:
The continued trend of economic growth boosted by strong consumer confidence,
a tight labor market and inflation concerns caused the Federal Reserve to
aggressively tighten during the first five months of the year. As a result, the
Fed raised the discount rate to 6.50% during the year in an attempt to achieve
its objective of engineering a "soft landing" for the explosive U.S. economy.
The third quarter of 2000 saw a sharp decline in market expectations for further
Fed tightenings amidst evidence of significant deceleration in growth, peaking
inflation pressures and a sharp reversal in the stock market wealth effect
globally.
During the fourth quarter, investor hopes for a "soft landing" quickly turned
into fears of a recession as the U.S. economy rapidly deteriorated. The effects
of tighter monetary and fiscal conditions, along with higher energy prices,
combined to pull down domestic growth rates. As market expectations transitioned
from Fed tightening to a significant Fed easing, high quality fixed-income
assets, led by the Treasury market, produced strong double-digit returns.
The Federal Reserve has expressed great concern over the economy's quick
downturn. After removing their tightening bias at their December meeting, the
FOMC acted with an aggressive 50 basis point intra-meeting reduction of the Fed
Funds rate on January 3, 2001 and another 50 basis point cut at their meeting on
January 31, 2001. While we think that the Fed's actions could provide a
temporary lift to U.S. investor and consumer sentiment, our intermediate outlook
for the economy remains cautious. The potential for tax cuts in 2001 adds
further uncertainty to the economic forecast. Given that the primary effect of
the stimulus from a tax cut would occur in 2002 and beyond, monetary policy
stimulus will have a greater effect on the U.S. economy near term. Considering
only moderate economic recovery in Europe and anemic growth in Japan, we believe
that enough distress exists within the economic system to warrant additional
easing by the Fed over the coming months.
This report contains a summary of market conditions during the annual period
and a review of portfolio strategy by your Trust's managers in addition to the
Trust's audited financial statements and a detailed list of the portfolio's
holdings. Continued thanks for your confidence in BlackRock. We appreciate the
opportunity to help you achieve your long-term investment goals.
Sincerely,
/s/ Laurence D. Fink /s/ Ralph L. Schlosstein
Laurence D. Fink Ralph L. Schlosstein
Chairman President
1
January 31, 2001
Dear Shareholder:
We are pleased to present the audited annual report for The BlackRock Insured
Municipal 2008 Term Trust Inc. ("the Trust") for the fiscal year ended December
31, 2000. We would like to take this opportunity to review the Trust's stock
price and net asset value (NAV) performance, summarize developments in the fixed
income markets and discuss recent portfolio management activity.
The Trust is a diversified, actively managed closed-end bond fund whose
shares are traded on the New York Stock Exchange under the symbol "BRM." The
Trust's investment objective is to manage a portfolio of municipal debt
securities that will return $15 per share (an amount equal to the Trust's
initial public offering price) to investors on or about December 31, 2008, while
providing current income exempt from regular federal income tax. The Trust seeks
to achieve this objective by investing in high credit quality ("AAA" or insured
to "AAA") tax-exempt general obligation and revenue bonds issued by city, county
and state municipalities throughout the United States.
The table below summarizes the changes in the Trust's stock price and NAV
over the past year:
--------------------------------------------------------------------------------------------------------------------
12/31/00 12/31/99 CHANGE HIGH LOW
--------------------------------------------------------------------------------------------------------------------
STOCK PRICE $14.875 $13.75 8.18% $14.9375 $13.375
--------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE (NAV) $16.62 $16.00 3.88% $16.62 $15.54
--------------------------------------------------------------------------------------------------------------------
THE FIXED INCOME MARKETS
The rapid expansion of U.S. GDP witnessed throughout much of the period
finally slowed dramatically in the third and fourth quarter. After expanding at
nearly a 6.0% annualized rate in the first half of the year, growth in the third
quarter slowed to 3.0%. Higher oil prices and declines in global equity markets
led to declines in consumer spending, residential investment and manufacturing
activity. The Federal Reserve raised the discount rate by 0.25% at each of their
meetings in November 1999, February 2000, and March 2000 and raised the discount
rate by 0.50% in May 2000 to bring the year end discount rate to 6.50%. At their
meeting in December 2000, the Federal Reserve left the discount rate unchanged,
although it moved towards an easing bias, due to an increasing probability of
economic weakness in the foreseeable future.
Treasury yields were inverted for much of the year. Yields rose on the
short-end of the yield curve in response to the Fed's increases in the discount
rate, while yields on the long-end declined below the short-end, particularly in
reaction to the announcement that the Treasury would buy back $30 billion of
Treasuries with maturities ranging from 10 to 30 years. In the second half of
the period, weakening stock markets and signs of slowing growth all caused the
bond market to price in a neutral Federal Reserve. This shift in market
sentiment caused significant yield curve disinversion during the third quarter
of 2000, as yields on the short-end fell relative to yields on the long-end. In
the last two months of 2000, the Treasury market rallied significantly on the
short-end of the curve, and in December the yield curve regained its
characteristic upward slope. For the annual period, the yield on the 10-year
Treasury fell from 6.44% on December 31, 1999 to 5.11% on December 31, 2000.
During the fourth quarter, the municipal yield curve flattened by 12 bps with
2-year yields declining by 35 bps while 30-year yields declined by 47 bps.
Throughout this time frame, municipals continued to outperform taxable spread
product while underperforming versus Treasuries. Municipals benefited from
retail's continued efforts to diversify out of equities and into fixed income
investments as evidenced by the mutual fund industry finally experiencing
positive cash flow in the municipal sector during the fourth quarter.
Institutional demand for municipal securities has also increased as investors
are looking for attractive after tax yields versus Treasuries without the
inherent credit risk associated with corporate bonds.
2
THE TRUST'S PORTFOLIO AND INVESTMENT STRATEGY
The Trust's portfolio is actively managed to diversify exposure to various
sectors, issuers, revenue sources and security types. BlackRock's investment
strategy emphasizes a relative value approach, which allows the Trust to
capitalize upon changing market conditions by rotating municipal sectors and
coupons. Additionally, the Trust emphasizes securities whose maturity dates
match the termination date of the Trust.
Over the year, trading activity in the Trust remained relatively low, as many
of the securities in the Trust's portfolio continued to trade at prices above
where they were purchased. As trading activity that results in the Trust
realizing a capital gain could require a taxable distribution, as well as
reducing the income generating capacity of the Trust, we remain reluctant to
realize capital gains at this time. At present, we are confident that the Trust
is on schedule to achieve its primary investment objective of returning $15 per
share upon termination and will continue to seek investment opportunities in the
municipal market.
Additionally, the Trust employs leverage to enhance its income by borrowing
at short-term municipal rates and investing the proceeds in longer maturity
issues that have higher yields. The degree to which the Trust can benefit from
its use of leverage may affect its ability to pay monthly income. At the end of
the year, the Trust's leverage amount was approximately 37% of total assets.
The following chart compares the Trust's current and December 31, 1999 asset
composition:
SECTOR BREAKDOWN
-------------------------------------------------------------------------------
SECTOR DECEMBER 31, 2000 DECEMBER 31, 1999
-------------------------------------------------------------------------------
County, City & State 25% 22%
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Utility/Power 22% 22%
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Hospital 12% 15%
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Education 11% 11%
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Transportation 7% 6%
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Lease Revenue 5% 6%
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Water & Sewer 5% 6%
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Tax Revenue 5% 5%
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Special District 5% 3%
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Housing 2% 3%
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Industrial & Pollution Control 1% 1%
-------------------------------------------------------------------------------
We look forward to managing the Trust to benefit from the opportunities
available in the fixed income markets and to meet its investment objectives. We
thank you for your investment in the BlackRock Insured Municipal 2008 Term Trust
Inc. Please feel free to contact our marketing center at (800) 227-7BFM (7236)
if you have specific questions which were not addressed in this report.
Sincerely,
/s/ Robert S. Kapito /s/ Kevin M. Klingert
-------------------- ---------------------
Robert S. Kapito Kevin M. Klingert
Vice Chairman and Portfolio Manager Managing Director and Portfolio Manager
BlackRock Advisors, Inc. BlackRock Advisors, Inc.
3
-------------------------------------------------------------------------------
THE BLACKROCK INSURED MUNICIPAL 2008 TERM TRUST INC.
-------------------------------------------------------------------------------
Symbol on New York Stock Exchange: BRM
-------------------------------------------------------------------------------
Initial Offering Date: September 18, 1992
-------------------------------------------------------------------------------
Closing Stock Price as of 12/31/00: $14.875
-------------------------------------------------------------------------------
Net Asset Value as of 12/31/00: $16.62
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Yield on Closing Stock Price as of 12/31/00 ($14.875)(1): 5.34%
-------------------------------------------------------------------------------
Current Monthly Distribution per Common Share(2): $0.06625
-------------------------------------------------------------------------------
Current Annualized Distribution per Common Share(2): $0.7950
-------------------------------------------------------------------------------
---------
(1) Yield on Closing Stock Price is calculated by dividing the current
annualized distribution per share by the closing stock price per share.
(2) Distribution is not constant and is subject to change.
PRIVACY PRINCIPLES OF THE TRUST
The Trust is committed to maintaining the privacy of shareholders and to
safeguarding its non-public personal information. The following information is
provided to help you understand what personal information the Trust collects,
how we protect that information and why, in certain cases, we may share
information with select other parties.
Generally, the Trust does not receive any nonpublic personal information
relating to its shareholders, although certain nonpublic personal information of
its shareholders may become available to the Trust. The Trust does not disclose
any nonpublic personal information about its shareholders or former shareholders
to anyone, except as permitted by law or as is necessary in order to service
shareholder accounts (for example, to a transfer agent or third party
administrator).
The Trust restricts access to nonpublic personal information about the
shareholders to BlackRock employees with a legitimate business need for the
information. The Trust maintains physical, electronic and procedural safeguards
designed to protect the nonpublic personal information of its shareholders.
4
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THE BLACKROCK INSURED MUNICIPAL 2008 TERM TRUST INC.
PORTFOLIO OF INVESTMENTS DECEMBER 31, 2000
-----------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OPTION CALL
RATING* AMOUNT PROVISIONS+ VALUE
(UNAUDITED) (000) DESCRIPTION (UNAUDITED) (NOTE 1)
-----------------------------------------------------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS--157.6%
ALABAMA--0.3%
AAA $ 1,905 Mobile Impvt. Wt., Zero Coupon, 8/15/08, MBIA ........................ 8/02 @ 71.587 $ 1,265,034
-----------
ARIZONA--0.6%
AAA 4,000 Chandler, G.O., Zero Coupon, 7/01/08, FGIC ........................... No Opt. Call 2,858,880
-----------
CALIFORNIA--0.4%
AAA 1,890 California Hlth. Fac. Fin. Auth. Rev., Marin Gen. Hosp.,
Ser. A, 5.75%, 8/01/09, FSA ........................................ 8/03 @ 102 1,990,888
-----------
COLORADO--12.0%
AAA 2,000 E-470 Pub. Hwy. Auth. Rev., Ser. B, Zero Coupon, 9/01/11, MBIA ....... No Opt. Call 1,202,580
AAA 30,205++ Jefferson Cnty. Sch. Dist. No. R-001, G.O., 6.25%, 12/15/02, AMBAC ... N/A 31,715,854
AAA 6,965 Regl. Transn. Dist. C.O.P., Transit Vehicles Proj. Ser. A, 5.00%,
6/01/08, MBIA ...................................................... 6/07 @ 101 7,244,575
AAA 13,285++ Univ. of Colorado, Hosp. Auth. Rev., Ser. A, 6.25%, 11/15/02, AMBAC .. N/A 14,050,349
-----------
54,213,358
-----------
DISTRICT OF COLUMBIA--8.4%
Dist. of Columbia, G.O.,
AAA 2,800 Ser. B, 5.50%, 6/01/09, FSA ........................................ No Opt. Call 3,000,732
AAA 17,950++ Ser. B, 6.30%, 6/01/02, MBIA ....................................... N/A 18,815,728
AAA 10,000 Ser. B-1, 5.50%, 6/01/08, AMBAC .................................... No Opt. Call 10,676,100
AAA 115++ Ser. E, 5.875%, 6/01/03, MBIA ...................................... N/A 121,471
AAA 2,955 Ser. E, 5.875%, 6/01/08, MBIA ...................................... 6/03 @ 102 3,105,262
AAA 2,000 Dist. of Columbia, Hosp. Rev., Children's Hosp.,
Ser. A, 6.25%, 7/15/08, FGIC ....................................... 7/02 @ 102 2,088,240
-----------
37,807,533
-----------
GEORGIA--2.8%
AAA 7,000++ Atlanta, C.O.P., Pretrial Det. Ctr., 6.25%, 12/01/02, MBIA ........... N/A 7,409,430
AAA 5,000 Georgia St., G.O., Ser. E, 5.25%, 2/01/10 ............................ No Opt. Call 5,316,450
-----------
12,725,880
-----------
ILLINOIS--15.3%
AAA 14,205 Chicago O'Hare Intl. Arprt. Rev., Ser. A, 6.25%, 1/01/08, MBIA ....... 1/05 @ 102 15,368,958
AAA 3,105 Chicago Pub. Bldg. Comm. Bldg. Rev., Ser. A, Zero Coupon,
1/01/07, MBIA ...................................................... ETM 2,379,672
Chicago Sch. Fin. Auth., G.O., Ser. A, FGIC,
AAA 13,000 6.25%, 6/01/07 ..................................................... 6/02 @ 102 13,574,340
AAA 9,150 6.25%, 6/01/09 ..................................................... 6/02 @ 102 9,568,338
Aaa 5,980 Cook Cnty. High Sch. Dist. No. 201 J, Sterling Morton Twnsp.,
Zero Coupon, 12/01/09, FGIC ........................................ No Opt. Call 3,949,371
AAA 8,985 Du Page Cnty. Fst. Presv. Dist., Zero Coupon, 11/01/08 ............... No Opt. Call 6,264,073
AAA 10,300++ Illinois Hlth. Fac. Auth. Rev., Alexian Med. Ctr. Proj.,
Ser. A, 6.35%, 1/01/02, MBIA ....................................... N/A 10,723,845
Met. Pier & Expo. Auth. Ded. St. Tax Rev. Auth., Ser. A, FGIC,
AAA 1,570 Zero Coupon, 6/15/08 ............................................... ETM 1,123,837
AAA 8,600 Zero Coupon, 6/15/08 ............................................... No Opt. Call 6,100,668
-----------
69,053,102
-----------
INDIANA--2.3%
Indiana Hlth. Fac. Fin. Auth. Hosp. Rev. & Impvt.,
Ancilla Sys. Inc., MBIA,
AAA 1,805++ Ser. A, 6.25%, 7/01/02 ............................................. N/A 1,893,770
AAA 3,860 Ser. A, 6.25%, 7/01/08 ............................................. 7/02 @ 102 4,044,662
AAA 1,385++ Ser. B, 6.25%, 7/01/02 ............................................. N/A 1,453,114
AAA 2,965 Ser. B, 6.25%, 7/01/08 ............................................. 7/02 @ 102 3,106,846
-----------
10,498,392
-----------
See Notes to Financial Statements.
5
-----------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OPTION CALL
RATING* AMOUNT PROVISIONS+ VALUE
(UNAUDITED) (000) DESCRIPTION (UNAUDITED) (NOTE 1)
-----------------------------------------------------------------------------------------------------------------------------------
>
IOWA--1.0%
AAA $ 140 Iowa Fin. Auth., Sngl. Fam. Mtge. Rev., Ser. F, 6.35%,
7/01/09, AMBAC ..................................................... 1/03 @ 102 $ 145,753
AAA 4,195 Muscatine, Elec. Rev., 5.00%, 1/01/08, FSA ........................... 1/01 @ 100 4,206,284
-----------
4,352,037
-----------
KENTUCKY--0.6%
AAA 3,890 Owensboro, Elec. Lt. & Pwr. Rev., Ser. B, Zero Coupon,
1/01/09, AMBAC ..................................................... No Opt. Call 2,689,196
-----------
LOUISIANA--1.2%
AAA 5,000++ Louisiana Pub. Fac. Auth. Hosp. Rev., Lafayette Gen. Med.
Ctr. Proj., 6.30%, 10/01/02, FSA ................................... N/A 5,268,950
-----------
MASSACHUSETTS--4.8%
AAA 4,465++ Chelsea, Sch. Proj. Loan, 6.00%, 6/15/04, AMBAC ...................... N/A 4,811,172
Massachusetts Bay Trans. Auth. Rev., Ser. B, MBIA,
AAA 200++ 6.00%, 3/01/03 ..................................................... N/A 211,468
AAA 5,800 6.00%, 3/01/10 ..................................................... 3/03 @ 102 6,096,728
AAA 10,000 Massachusetts St. Hsg. Fin. Agcy. Hsg. Proj., Ser. A, 5.95%,
10/01/08, AMBAC .................................................... 4/03 @ 102 10,435,900
-----------
21,555,268
-----------
MICHIGAN--4.5%
Lake Orion, Cmnty. Sch. Dist., AMBAC,
AAA 3,290++ 6.60%, 5/01/05 ..................................................... N/A 3,627,916
AAA 3,285++ 6.70%, 5/01/05 ..................................................... N/A 3,635,279
AAA 8,920++ Michigan St. Bldg. Auth. Rev., Fac. Proj., Ser. IIA, 6.25%,
10/01/02, AMBAC .................................................... N/A 9,407,835
AAA 3,400 Wyandotte, Elec. Rev., 6.25%, 10/01/08, MBIA ......................... No Opt. Call 3,724,734
-----------
20,395,764
-----------
MISSOURI--1.7%
AAA 7,350 Kansas City, Sch. Dist. Bldg. Corp. Leasehold Rev.,
Cap. Impvts. Proj., Ser. A, 6.50%, 2/01/08, FGIC ................... 2/01 @ 102 7,508,613
-----------
NEVADA--4.6%
AAA 6,490++ Clark Cnty. Fld Ctrl., 6.30%, 11/01/01, AMBAC N/A 6,673,408
Director St. Dept. Las Vegas Monorail, AMBAC,
AAA 2,085 Zero Coupon, 1/01/09 ............................................... No Opt. Call 1,432,395
AAA 3,585 Zero Coupon, 1/01/10 ............................................... No Opt. Call 2,337,814
Washoe Cnty. Arpt. Auth. Rev., Ser. B, MBIA,
AAA 3,135 5.70%, 7/01/07 ..................................................... 7/03 @ 102 3,289,461
AAA 2,645 5.75%, 7/01/08 ..................................................... 7/03 @ 102 2,776,483
AAA 4,135++ Washoe Cnty. Sch. Dist., G.O., Ser. A, 6.20%, 10/01/02, AMBAC ........ N/A 4,319,173
-----------
20,828,734
-----------
NEW JERSEY--12.9%
AAA 30,275 New Jersey Econ. Dev. Auth., Mkt. Trans. Fac. Rev.,
Ser. A, 5.80%, 7/01/08, MBIA ....................................... 7/04 @ 102 32,336,122
New Jersey St. G.O., Ser. D, MBIA,
AAA 8,370++ 6.00%, 2/15/03 ..................................................... N/A 8,843,826
AAA 16,125 6.00%, 2/15/09 ..................................................... 2/03 @ 102 16,987,365
-----------
58,167,313
-----------
NEW YORK--12.7%
New York City G.O., MBIA,
AAA 5,000 Ser. E, 6.125%, 8/01/06 ............................................ No Opt. Call 5,467,550
AAA 15,500 Ser. E, 6.20%, 8/01/07 ............................................. No Opt. Call 17,198,025
AAA 5,000 Ser. G, 5.75%, 2/01/08 ............................................. 2/06 @ 101.5 5,390,900
AAA 15,915 New York St., G.O., Ser. F, 5.25%, 9/15/09, MBIA ..................... 9/08 @ 101 16,933,878
New York St. Environ. Fac. Corp., P.C.R., Ser. D,
AAA 5,945 6.50%, 5/15/07 ..................................................... 11/04 @ 102 6,526,659
AAA 2,245 6.50%, 11/15/07 .................................................... 11/04 @ 102 2,464,651
AAA 3,395 New York St. Thruway Auth. Svc. Contract Rev.,
Local Hwy. & Brdg., Ser. A, 5.40%, 1/01/09, MBIA ................... 1/05 @ 102 3,577,583
-----------
57,559,246
-----------
See Notes to Financial Statements.
6
------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OPTION CALL
RATING* AMOUNT PROVISIONS+ VALUE
(UNAUDITED) (000) DESCRIPTION (UNAUDITED) (NOTE 1)
---------------------------------------------------------------------------------------------------------------------------------
NORTH CAROLINA--8.5%
AAA $ 1,000++ Cumberland Cnty. C.O.P., Civic Ctr. Proj., Ser. A, 6.375%,
12/01/04, AMBAC .................................................... N/A $ 1,098,030
North Carolina Eastn. Mun. Pwr. Agcy. Sys. Rev., Ser. B,
AAA 13,500 6.125%, 1/01/09, FGIC .............................................. No Opt. Call 14,942,070
AAA 5,000 7.00%, 1/01/08, CAPMAC ............................................. No Opt. Call 5,723,900
AAA 14,675 7.25%, 1/01/07, CAPMAC ............................................. No Opt. Call 16,764,573
------------
38,528,573
------------
NORTH DAKOTA--1.0%
AAA 4,450++ Bismark Hosp. Rev., St. Alexius Med. Ctr., 6.90%, 5/01/01, AMBAC ..... N/A 4,579,317
------------
OHIO--2.2%
AAA 2,410++ Cleveland, G.O., 6.40%, 11/15/04, MBIA ............................... N/A 2,646,373
AAA 6,095 Hamilton City, Elec. Sys. Rev., Ser. A, 6.125%, 10/15/08, FGIC ....... 10/02 @ 102 6,407,003
AAA 1,000++ Ohio St. Bldg. Auth. Fac. Rev., Juvenile Correctional Proj.,
6.50%, 10/01/04, AMBAC ............................................. N/A 1,099,200
------------
10,152,576
------------
PENNSYLVANIA--12.5%
AAA 4,000 Allegheny Cnty. Hosp. Dev. Auth. Rev., Magee Women's Hosp.,
6.25%, 10/01/08, FGIC .............................................. 10/02 @ 10 24,209,040
Dauphin Cnty. Gen. Auth. Hosp. Rev.,
HAPSCO-Western Pennsylvania Hosp. Proj., MBIA,
AAA 10,000 6.25%, 7/01/08 ..................................................... 7/02 @ 102 10,478,400
AAA 5,000 6.25%, 7/01/08 ..................................................... ETM 5,239,200
AAA 6,600 Erie Cnty. Hosp. Auth. Rev., St. Vincent Hlth. Ctr. Proj.,
Ser. A, 6.25%, 7/01/08, MBIA ....................................... 7/02 @ 102 6,915,744
AAA 3,500 Indiana Cnty. Indl. Dev. Auth. P.C.R.,
New York St. Elec. & Gas Corp., Ser. A, 6.00%,
6/01/06, MBIA ...................................................... No Opt. Call 3,786,895
AAA 6,500 Pennsylvania Hsg. Fin. Agcy. Rev., Rental Hsg., Ser. C, 6.25%,
7/01/07, FNMA ...................................................... 7/02 @ 102 6,745,115
AAA 7,450++ Pennsylvania St., G.O., Ser. A, 6.50%, 11/01/01, FGIC ................ N/A 7,708,515
AAA 10,930++ Pittsburgh, G.O., Ser. D, 6.00%, 9/01/02, AMBAC ...................... N/A 11,457,919
------------
56,540,828
------------
TEXAS--26.9%
AAA 13,000++ Austin Pub. Impvt., G.O., 6.10%, 9/01/02, AMBAC ...................... N/A 13,416,130
Austin Util. Sys. Rev.,
AAA 11,515 Ser. A, Zero Coupon, 11/15/08, MBIA ................................ No Opt. Call 8,050,712
AAA 5,000 Ser. A, Zero Coupon, 11/15/09, AMBAC ............................... No Opt. Call 3,326,250
AAA 5,000 Ser. A, Zero Coupon, 11/15/09, MBIA ................................ No Opt. Call 3,326,250
AAA 7,000 6.25%, 11/15/08, AMBAC ............................................. 11/02 @ 102 7,386,400
AAA 5,000 6.625%, 11/15/08, AMBAC ............................................ No Opt. Call 5,736,950
Baytown, G.O., AMBAC,
AAA 2,385++ 6.40%, 2/01/02 ..................................................... N/A 2,443,290
AAA 2,840 6.40%, 2/01/08 ..................................................... 2/02 @ 100 2,901,287
AAA 9,930 Circle C Mun. Util. Dist. No. 3 Rev., 6.50%, 11/15/09, FGIC .......... 11/01 @ 100 10,118,571
Coppell Indpt. Sch. Dist., MBIA,
AAA 1,430 6.10%, 8/15/09 ..................................................... ETM 1,607,420
AAA 2,495 6.10%, 8/15/09 ..................................................... 8/02 @ 100 2,560,244
AAA 4,390 Houston Indpt. Sch. Dist., Zero Coupon, 8/15/09, AMBAC ............... No Opt. Call 2,954,119
AAA 16,135 Houston Wtr. & Swr. Sys. Rev., Jr. Lien, Ser. C, 6.25%,
12/01/09, MBIA ..................................................... 12/02 @ 102 17,026,781
AAA 6,000 San Antonio Elec. & Gas Rev., Ser. B, Zero Coupon, 2/01/10, FGIC ETM 3,904,320
Texas Mun. Pwr. Agcy. Rev.,
AAA 15,000 Zero Coupon, 9/01/08, AMBAC ........................................ No Opt. Call 10,585,499
AAA 16,175 Zero Coupon, 9/01/09, AMBAC ........................................ No Opt. Call 10,862,321
AAA 7,000 5.00%, 9/01/10, FGIC ............................................... 9/04 @ 100 7,118,790
AAA 5,900 Texas St. Pub. Fin. Auth. Bldg. Rev., Ser. B, 6.25%, 2/01/09, AMBAC .. No Opt. Call 6,623,222
AAA 2,275 Ysleta Indpt. Sch. Dist. Rev., Zero Coupon, 8/15/08, PSFG ............ No Opt. Call 1,608,698
------------
121,557,254
------------
7
See Notes to Financial Statements.
-----------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL OPTION CALL
RATING* AMOUNT PROVISIONS+ VALUE
(UNAUDITED) (000) DESCRIPTION (UNAUDITED) (NOTE 1)
-----------------------------------------------------------------------------------------------------------------------------------
UTAH--3.5%
AAA $ 3,500 Intermountain Pwr. Agcy. Rev., Ser. B, 6.00%, 7/01/07, MBIA .......... No Opt. Call $ 3,815,035
AAA 1,550 Salt Lake Cnty. Mun. Bldg. Auth. Lease Rev., Ser. A, 6.05%,
10/01/08, MBIA ..................................................... 10/04 @ 101 1,653,711
AAA 10,300 Utah St., G.O., Ser. F, 5.00%, 7/01/10 ............................... 7/07 @ 100 10,597,567
------------
16,066,313
------------
WASHINGTON--14.2%
AAA 12,850 King Cnty., G.O., Ser. D, 5.55%, 12/01/08, MBIA ...................... 12/07 @ 102 13,829,170
Snohomish Cnty. Sch. Dist., G.O., MBIA,
AAA 2,235++ 6.10%, 12/01/03 .................................................... N/A 2,393,461
AAA 1,765 6.10%, 12/01/08 .................................................... 12/03 @ 102 1,876,601
Washington St. Hlth. Care Fac. Auth. Rev., MBIA,
AAA 1,010 Catholic Hlth. Initiatives A, 5.30%, 12/01/08 ...................... No Opt. Call 1,057,854
AAA 1,000 Catholic Hlth. Initiatives A, 5.40%, 12/01/10 ...................... 6/10 @ 101 1,054,460
AAA 9,000 Virginia Mason Oblig. Group, 6.30%, 2/15/09 ........................ 2/03 @ 102 9,486,540
Washington St. Pub. Pwr. Supply Sys. Rev.,
AAA 3,000 Nuclear Proj. No. 2, 5.55%, 7/01/10, FGIC .......................... 7/03 @ 102 3,082,260
AAA 13,635 Nuclear Proj. No. 2, Ser. A, 6.25%, 7/01/09, MBIA .................. 7/02 @ 102 14,285,253
AAA 5,550 Nuclear Proj. No. 3, Zero Coupon, 7/01/07, BIGI .................... No Opt. Call 4,098,120
AAA 2,000 Nuclear Proj. No. 3, Zero Coupon, 7/01/08, BIGI .................... No Opt. Call 1,405,520
AAA 11,000 Ser. A, 5.80%, 7/01/07, FSA ........................................ No Opt. Call 11,834,790
------------
64,404,029
------------
WEST VIRGINIA--2.7%
AAA 11,600 West Virginia St. Pkwys. Econ. Dev. & Tourism Auth., 5.70%,
5/15/09, FGIC ...................................................... 5/03 @ 102 12,101,004
------------
TOTAL LONG-TERM INVESTMENTS (COST $663,797,823) ...................... 712,668,082
------------
SHORT-TERM INVESTMENTS**--0.2%
NEW YORK--0.2%
A-1+ 850 Long Island Pwr. Auth. New York Elec. Sys. Rev., Sub. Ser. 5,
Ser. 5, 4.90%, 1/02/01, FRDD ....................................... N/A 850,000
------------
TEXAS--0.0%
A-1+ 85 Harris Cnty. Texas Hlth. Fac. Dev. Corp. Rev.,
St. Lukes Episcopal Hosp. Ser. A, 4.95%, 1/02/01, FRDD ............. N/A 85,000
------------
WASHINGTON--0.0%
A-1+ 50 Washington St. Hlth. Care Fac. Auth. Rev., Sisters of Providence B,
4.90%, 1/02/01, FRDD ............................................... N/A 50,000
------------
TOTAL SHORT-TERM INVESTMENTS (COST $985,000) ......................... 985,000
------------
TOTAL INVESTMENTS--157.8% (COST $664,782,823) ........................ 713,653,082
Other assets in excess of liabilities--2.1% .......................... 9,404,354
Liquidation value of preferred stock--(59.9)% ........................ (271,000,000)
------------
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS--100% ................... $452,057,436
============
----------
* Using the higher of Standard & Poor's, Moody's or Fitch's rating.
** For purposes of amortized cost valuation, the maturity dates of these
instruments is considered to be the earlier of the next date on which the
security can be redeemed at par, or the next date on which the rate of
interest is adjusted.
+ Option call provisions: date (month/year) and price of the earliest
optional call or redemption. There may be other call provisions at varying
prices at later dates.
++ This bond is prerefunded. See glossary for definition.
KEY TO ABBREVIATIONS:
AMBAC-- American Municipal Bond Assurance Corporation FRDD-- Floating Rate Daily Demand**
BIGI-- Bond Investors Guaranty Insurance Company FSA-- Financial Security Assurance
CAPMAC-- Capital Markets Assurance Company G.O.-- General Obligation
C.O.P.-- Certificate of Participation MBIA-- Municipal Bond Insurance Association
ETM-- Escrowed to Maturity P.C.R.-- Pollution Control Revenue
FGIC-- Financial Guaranty Insurance Company PSFG-- Permanent School Fund Guaranty
FNMA-- Federal National Mortgage Association
See Notes to Financial Statements.
8
--------------------------------------------------------------------------------
THE BLACKROCK INSURED
MUNICIPAL 2008 TERM TRUST INC.
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 2000
--------------------------------------------------------------------------------
ASSETS
Investments, at value (cost $664,782,823)
(Note 1) ....................................... $713,653,082
Cash .............................................. 541,887
Interest receivable ............................... 10,763,200
Receivable for investments sold ................... 865,000
Other assets ...................................... 31,949
------------
725,855,118
------------
LIABILITIES
Dividends payable--common stock ................... 1,802,470
Dividends payable--preferred stock ................ 347,616
Offering costs payable--preferred stock ........... 107,873
Advisory fee payable (Note 2) ..................... 214,394
Administration fee payable (Note 2) ............... 61,255
Deferred directors fees (Note 1) .................. 13,713
Other accrued expenses ............................ 250,361
------------
2,797,682
------------
NET INVESTMENT ASSETS ............................. $723,057,436
============
Net investment assets were comprised of:
Common stock:
Par value (Note 4) ........................... $ 272,071
Paid-in capital in excess of par ............. 377,481,620
Preferred stock (Note 4) ....................... 271,000,000
------------
648,753,691
Undistributed net investment income ............ 25,792,372
Accumulated net realized loss .................. (358,886)
Net unrealized appreciation .................... 48,870,259
------------
Net investment assets, December 31, 2000 ....... $723,057,436
============
Net assets applicable to common
shareholders ................................. $452,057,436
============
Net asset value per common share:
($452,057,436 / 27,207,093 shares of
common stock issued and outstanding) ........... $16.62
=======
--------------------------------------------------------------------------------
THE BLACKROCK INSURED
MUNICIPAL 2008 TERM TRUST INC.
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2000
--------------------------------------------------------------------------------
NET INVESTMENT INCOME
Income
Interest and discount earned ................... $39,970,785
-----------
Expenses
Investment advisory ............................ 2,449,544
Administration ................................. 699,870
Auction agent .................................. 687,500
Reports to shareholders ........................ 160,500
Custodian ...................................... 124,000
Legal .......................................... 111,000
Directors ...................................... 74,000
Independent accountants ........................ 51,000
Registration ................................... 32,500
Transfer agent ................................. 30,500
Miscellaneous .................................. 169,136
-----------
Total expenses ................................. 4,589,550
-----------
Net investment income ............................. 35,381,235
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized loss on investments .................. (19,108)
Net change in unrealized appreciation
on investments ............................... 14,541,901
-----------
Net gain on investments ........................... 14,522,793
-----------
NET INCREASE IN NET INVESTMENT
ASSETS RESULTING FROM OPERATIONS .................. $49,904,028
===========
See Notes to Financial Statements.
9
--------------------------------------------------------------------------------
THE BLACKROCK INSURED MUNICIPAL 2008 TERM TRUST INC.
STATEMENTS OF CHANGES IN NET INVESTMENT ASSETS
--------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
2000 1999
------------ -----------
INCREASE (DECREASE) IN NET INVESTMENT ASSETS
OPERATIONS:
Net investment income .................................................... $ 35,381,235 $ 33,039,797
Net realized loss on investments ......................................... (19,108) (33,995)
Net change in unrealized appreciation on investments ..................... 14,541,901 (33,645,451)
----------- -----------
Net increase (decrease) in net investment assets resulting
from operations ..................................................... 49,904,028 (639,649)
----------- -----------
DIVIDENDS:
To common shareholders from net investment income ........................ (21,629,152) (21,629,233)
To preferred shareholders from net investment income ..................... (10,564,692) (6,652,978)
----------- -----------
Total dividends ........................................................ (32,193,844) (28,282,211)
----------- -----------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from additional issuance of preferred shares ................ 64,032,840 --
----------- -----------
Total increase (decrease) ............................................... 81,743,024 (28,921,860)
----------- -----------
NET INVESTMENT ASSETS
Beginning of year ........................................................... 641,314,412 670,236,272
----------- -----------
End of year (including undistributed net investment income of
$25,792,372 and $22,604,981, respectively) ............................... $723,057,436 $641,314,412
============ ============
See Notes to Financial Statements.
10
--------------------------------------------------------------------------------
THE BLACKROCK INSURED MUNICIPAL 2008 TERM TRUST INC.
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
-------------------------------------------------------------------
PER COMMON SHARE OPERATING PERFORMANCE: 2000 1999 1998 1997 1996
------- ------- ------- ------- -------
Net asset value, beginning of the year ....................... $ 16.00 $ 17.06 $ 16.80 $ 15.90 $ 16.08
------- ------- ------- ------- -------
Net investment income ...................................... 1.30 1.21 1.20 1.18 1.17
Net realized and unrealized gain (loss) on investments ..... .54 (1.23) .11 .78 (.27)
------- ------- ------- ------- -------
Net increase (decrease) from investment operations ........... 1.84 (.02) 1.31 1.96 .90
------- ------- ------- ------- -------
Dividends and distributions:
Dividends from net investment income to:
Common shareholders ...................................... (.80) (.80) (.80) (.79) (.79)
Preferred shareholders ................................... (.38) (.24) (.25) (.27) (.25)
Distributions from net realized gain on investments to:
Common shareholders ...................................... -- -- -- -- (.03)
Preferred shareholders ................................... -- -- -- -- (.01)
Distributions in excess of net realized gain on
investments to:
Common shareholders ...................................... -- -- ** ** **
Preferred shareholders ................................... -- -- ** ** **
------- ------- ------- ------- -------
Total dividends and distributions ............................ (1.18) (1.04) (1.05) (1.06) (1.08)
------- ------- ------- ------- -------
Capital charge with respect to issuance of preferred shares .. (.04) -- -- -- --
------- ------- ------- ------- -------
Net asset value, end of year* ................................ $ 16.62 $ 16.00 $ 17.06 $ 16.80 $ 15.90
======= ======= ======== ======== =======
Market value, end of year* ................................... $ 14.88 $ 13.75 $ 16.13 $ 15.25 $ 14.50
======= ======= ======== ======== =======
TOTAL INVESTMENT RETURN+ ..................................... 14.40% (10.14)% 11.21% 10.97% 13.56%
======= ======= ======== ======== =======
RATIOS TO AVERAGE NET ASSETS OF COMMON
SHAREHOLDERS++:
Expenses ..................................................... 1.05% .93% .88% .92% 95%
Net investment income before preferred stock dividends ....... 8.06% 7.30% 7.10% 7.19% 7.32%
Preferred stock dividends .................................... 2.40% 1.47% 1.49% 1.03% 1.64%
Net investment income available to common shareholders ....... 5.66% 5.83% 5.61% 5.56% 5.68%
SUPPLEMENTAL DATA:
Average net assets of common shareholders (in thousands) ..... $438,958 $452,317 $458,993 $444,895 $434,692
Portfolio turnover 3% 1% 0% 11% 8%
Net assets of common shareholders, end of year
(in thousands) ............................................. $452,057 $435,314 $464,236 $457,192 $432,609
Preferred stock outstanding (in thousands) ................... $271,000 $206,000 $206,000 $206,000 $206,000
Asset coverage per share of preferred stock, end of year ..... $ 66,735 $ 77,857 $ 81,361 $ 80,508 $ 77,525
-----------------
* Net asset value and market value are published in BARRON'S on Saturday and
THE WALL STREET JOURNAL on Monday.
** Actual amount paid to common shareholders was $0.005235 , $0.004814 and
$0.00271 for the years ended December 31, 1998, 1997, and 1996,
respectively. Actual amount paid to preferred shareholders was $0.001696,
$0.00154 and $0.00084 per common share for the years ended December 31,
1998, 1997 and 1996, respectively.
+ Total investment return is calculated assuming a purchase of common stock
at the current market price on the first day and a sale at the current
market price on the last day of each year reported. Dividends and
distributions, are assumed for purposes of this calculation, to be
reinvested at prices obtained under the Trust's dividend reinvestment plan.
Total investment return does not reflect brokerage commissions.
++ Ratios are calculated on the basis of income and expenses applicable to
both the common and preferred stock, relative to the average net assets of
common stockholders.
The information above represents the audited operating performance data for a
share of common stock outstanding, total investment return, ratios to average
net assets and other supplemental data for the years indicated. This information
has been determined based upon financial information provided in the financial
statements and market value data for Trust's common shares.
See Notes to Financial Statements.
11
-------------------------------------------------------------------------------
THE BLACKROCK INSURED
MUNICIPAL 2008 TERM TRUST INC.
NOTES TO FINANCIAL STATEMENTS
-------------------------------------------------------------------------------
NOTE 1. ORGANIZATION & The BlackRock Insured
ACCOUNTING Municipal 2008 Term Trust
POLICIES Inc. (the "Trust"), was
orga nized in Maryland on August 7, 1992 as a diversified, closed-end management
investment company. The Trust's investment objective is to manage a diversified
portfolio of high quality securities that will return $15 per share to investors
on or about December 31, 2008 while providing current income exempt from regular
federal income tax. The ability of issuers of debt securities held by the Trust
to meet their obligations may be affected by economic developments in the
specific industry or region. No assurance can be given that the Trust's
investment objective will be achieved.
The following is a summary of significant accounting policies followed by
the Trust:
SECURITIES VALUATION: Municipal securities (including commitments to
purchase such securities on a "when-issued" basis) are valued on the basis of
prices provided by dealers or pricing services approved by the Trust's Board of
Directors. In determining the value of a particular security, pricing services
may use certain information with respect to transactions in such securities,
quotations from bond dealers, market transactions in comparable securities and
various relationships between securities in determining values. Short-term
securities are valued at amortized cost. Any securities or other assets for
which such current market quotations are not readily available are valued at
fair value as determined in good faith under procedures established by and under
the general supervision and responsibility of the Trust's Board of Directors.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on the trade date. Realized and unrealized gains and losses are
calculated on the identified cost basis. Interest income is recorded on the
accrual basis and the Trust amortizes premium and accretes original issue
discount on securities purchased using the interest method.
FEDERAL INCOME TAXES: It is the Trust's intention to continue to meet the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute sufficient net income to shareholders. For this
reason and because substantially all of the Trust's gross income consists of
tax-exempt interest, no Federal income tax provision is required.
DIVIDENDS AND DISTRIBUTIONS: The Trust declares and pays dividends and
distributions to common shareholders monthly from net investment income, net
realized short-term capital gains and other sources, if necessary. Net long-term
capital gains, if any, in excess of loss carryforwards may be distributed
annually. Dividends and distributions are recorded on the ex-dividend date.
Dividends and distributions to preferred shareholders are accrued and determined
as described in Note 4.
ESTIMATES: The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates.
DEFERRED COMPENSATION PLAN: Under a deferred compensation plan approved by
the Board of Directors on February 24, 2000, non-interested Directors may elect
to defer receipt of all or a portion of their annual compensation.
Deferred amounts earn a return for the Directors as though equivalent
dollar amounts had been invested in common shares of other BlackRock funds
selected by the Directors. This has the same economic effect for the Directors
as if the Directors had invested the deferred amounts in such other BlackRock
funds.
The deferred compensation plan is not funded and obligations thereunder
represent general unsecured claims against the general assets of the Trust. The
Trust may, however, elect to invest in common shares of those funds selected by
the Directors in order to match its deferred compensation obligations.
NEW ACCOUNTING POLICIES: The Trust will adopt the provisions of the AICPA Audit
and Accounting Guide for Investment Companies, as revised, effective for fiscal
years beginning after December 15, 2000. As required, the Trust will begin
amortizing discounts on debt securities effective January 1, 2001. Prior to this
date, the Trust amortized premiums and original issue discount on debt
securities but did not amortize market discount. The cumulative effect of this
accounting change will have no impact on the total net assets of the Trust. The
impact of this accounting change is anticipated to have an immaterial effect on
the financial statements and will result in an increase to cost of securities
and a corresponding decrease in net unrealized appreciation, based on securities
held as of December 31, 2000.
NOTE 2. AGREEMENTS The Trust has an Investment
Advisory Agreement with
BlackRock Advisors, Inc., (the "Advisor"), which is a wholly-owned subsidiary of
BlackRock, Inc., which in turn is an indirect majority-owned subsidiary of PNC
Financial Services Group, Inc. The Trust has an Administration Agreement with
Princeton Administrators, L.P. (the "Administrator"), an indirect wholly-owned
affiliate of Merrill Lynch & Co., Inc.
12
The investment advisory fee paid to the Advisor is computed weekly and
payable monthly at an annual rate of 0.35% of the Trust's average weekly net
investment assets. The administration fee paid to the Administrator is also
computed weekly and payable monthly at an annual rate of 0.10% of the Trust's
average weekly net investment assets.
Pursuant to the agreements, the Advisor provides continuous supervision of
the investment portfolio and pays the compensation of officers of the Trust who
are affiliated persons of the Advisor. The Administrator pays occupancy and
certain clerical and accounting costs of the Trust. The Trust bears all other
costs and expenses.
NOTE 3. PORTFOLIO Purchases and sales of
SECURITIES investments, other than
short-term investments, for the year ended December 31, 2000, aggregated
$81,228,238 and $19,385,536, respectively.
The federal income tax basis of the Trust's investments at December 31,
2000, was $665,088,606, and accordingly, gross and net unrealized appreciation
was $48,564,476.
For federal income tax purposes, the Trust had a capital loss carryforward
at December 31, 2000 of approximately $53,000 of which $34,000 will expire in
2007 and $19,000 will expire in 2008. Accordingly, no capital gain distribution
is expected to be paid to shareholders until net gains have been realized in
excess of such amounts.
NOTE 4. CAPITAL There are 200 million shares
of $.01 par value common
stock authorized. The Trust may classify or reclassify any unissued shares of
common stock into one or more series of preferred stock. Of the 27,207,093
common shares outstanding at December 31, 2000, the Advisor owned 7,093 shares.
As of December 31, 2000, there were 10,840 preferred shares outstanding as
follows: Series T28--2,060, Series R28--2,060, Series T7--4,660, and Series
R7--2,060, which includes 2,600 shares of Series T7 issued on March 10, 2000.
On March 10, 2000, the Trust reclassified 2,600 shares of common stock and
issued an additional 2,600 shares of Series T7 preferred shares. The additional
shares issued have identical rights and features of the existing Series T7
preferred shares. Estimated offering costs of $317,160 and underwriting
discounts of $650,000 have been charged to paid-in capital in excess of the
common shares.
Dividends on Series T7 and R7 are cumulative at a rate which is reset every
7 days based on the results of an auction. Dividends on Series T28 are
cumulative at a rate which is reset every 28 days based on the results of an
auction. Series R28 paid dividends monthly at a rate established at the initial
offer- ing through May 17, 1994. Thereafter, rates on Series R28 reset every 28
days based on the results of an auction. Dividend rates ranged from 2.40% to
5.90% during the year ended December 31, 2000.
The Trust may not declare dividends or make other distributions on shares
of common stock or purchase any such shares if, at the time of the declaration,
distribution or purchase, asset coverage with respect to the outstanding
preferred stock would be less than 200%.
The preferred stock is redeemable at the option of the Trust, in whole or
in part, on any dividend payment date at $25,000 per share plus any accumulated
or unpaid dividends whether or not declared. The preferred stock is also subject
to mandatory redemption at $25,000 per share plus any accumulated or unpaid
dividends, whether or not declared if certain requirements relating to the
composition of the assets and liabilities of the Trust as set forth in the
Articles of Incorporation are not satisfied.
The holders of preferred stock have voting rights equal to the holders of
common stock (one vote per share) and will vote together with holders of shares
of common stock as a single class. However, holders of preferred stock are also
entitled to elect two of the Trust's directors. In addition, the Investment
Company Act of 1940 requires that along with approval by stockholders that might
otherwise be required, the approval of the holders of a majority of any
outstanding preferred stock, voting separately as a class would be required to
(a) adopt any plan of reorganization that would adversely affect the preferred
stock, and (b) take any action requiring a vote of security holders, including,
among other things, changes in the Trust's subclassification as a closed-end
investment company or changes in its fundamental investment restrictions.
NOTE 5. DIVIDENDS Subsequent to December
31, 2000, the Board of
Directors of the Trust declared a dividend from undistributed earnings of
$0.06625 per common share payable, February 1, 2001 to shareholders of record on
January 16, 2001.
For the period January 1, 2001 to January 31, 2001 dividends declared on
preferred shares totalled $920,230 in aggregate for the four outstanding
preferred share series.
13
-------------------------------------------------------------------------------
THE BLACKROCK INSURED MUNICIPAL 2008 TERM TRUST INC.
REPORT OF INDEPENDENT AUDITORS
-------------------------------------------------------------------------------
The Shareholders and Board of Directors of
The BlackRock Insured Municipal 2008 Term Trust Inc.:
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of The BlackRock Insured Municipal 2008 Term Trust
Inc., (the "Trust") as of December 31, 2000, and the related statement of
operations for the year then ended, and 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 Trust'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 auditing standards generally accepted
in the United States of America. 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. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned at December 31, 2000 by correspondence with the custodian. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights present
fairly, in all material respects, the financial position of The BlackRock
Insured Municipal 2008 Term Trust Inc. as of December 31, 2000, and the results
of its operations, the changes in its net assets and its financial highlights
for the respective stated periods in conformity with accounting principles
generally accepted in the United States of America.
/s/ Deloitte & Touche LLP
New York, New York
February 9, 2001
14
--------------------------------------------------------------------------------
THE BLACKROCK INSURED MUNICIPAL 2008 TERM TRUST INC.
TAX INFORMATION
--------------------------------------------------------------------------------
We are required by the Internal Revenue Code to advise you within 60 days
of the Trust's tax year end as to the federally tax-exempt interest dividends
received by you during such fiscal year. Accordingly, we are advising you that
all dividends, common and preferred, paid by the Trust during the fiscal year
were federal tax-exempt interest dividends.
For purposes of preparing your annual federal income tax return, you should
report the amounts as reflected on the appropriate form 1099-DIV or substitute
1099 DIV.
--------------------------------------------------------------------------------
DIVIDEND REINVESTMENT PLAN
--------------------------------------------------------------------------------
Pursuant to the Trust's Dividend Reinvestment Plan (the "Plan"), common
shareholders may elect to have all distributions of dividends and capital gains
reinvested by State Street Bank and Trust Company (the "Plan Agent") in Trust
shares pursuant to the Plan. Shareholders who do not participate in the Plan
will receive all distributions in cash paid by check in United States dollars
mailed directly to the shareholders of record (or if the shares are held in
street or other nominee name, then to the nominee) by the transfer agent, as
dividend disbursing agent.
The Plan Agent serves as agent for the shareholders in administering the
Plan. After the Trust declares a dividend or determines to make a capital gain
distribution, the Plan Agent will, as agent for the participants, receive the
cash payment and use it to buy Trust shares in the open market on the New York
Stock Exchange or elsewhere for the participants' accounts. The Trust will not
issue any new shares under the Plan.
Participants in the Plan may withdraw from the Plan upon written notice to
the Plan Agent and will receive certificates for whole Trust shares and a cash
payment for any fraction of a Trust share.
The Plan Agent's fees for the handling of the reinvestment of dividends and
distributions will be paid by the Trust. However, each participant will pay a
pro rata share of brokerage commissions incurred with respect to the Plan
Agent's open market purchases in connection with the reinvestment of dividends
and distributions. The automatic reinvestment of dividends and distributions
will not relieve participants of any federal income tax that may be payable on
such dividends or distributions.
The Trust reserves the right to amend or terminate the Plan as applied to
any dividend or distribution paid subsequent to written notice of the change
sent to all shareholders of the Trust at least 90 days before the record date
for the dividend or distribution. The Plan also may be amended or terminated by
the Plan Agent upon at least 90 days' written notice to all shareholders of the
Trust. All correspondence concerning the Plan should be directed to the Plan
Agent at (800) 699-1BFM. The address is on the front of this report.
--------------------------------------------------------------------------------
ADDITIONAL INFORMATION
--------------------------------------------------------------------------------
There have been no material changes in the Trust's investment objectives or
policies that have not been approved by the shareholders or to its charter or
by-laws or in the principal risk factors associated with investment in the
Trust. There have been no changes in the persons who are primarily responsible
for the day-to-day management of the Trust's portfolio.
Quarterly performance and other information regarding the Trust may be
found on BlackRock's website, which can be accessed at
http://www.blackrock.com/funds/cefunds.html. This reference to BlackRock's
website is intended to allow investors public access to quarterly information
regarding the Trust and is not intended to incorporate BlackRock's website into
this report.
15
--------------------------------------------------------------------------------
THEBLACKROCK INSURED MUNICIPAL 2008 TERM TRUST INC.
INVESTMENT SUMMARY
--------------------------------------------------------------------------------
THE TRUST'S INVESTMENT OBJECTIVE:
The BlackRock Insured Municipal2008 Term Trust's investment objective is to
provide current income exempt from regular Federal income tax and to return $15
per share (the initial public offering price per share) to investors on or about
December 31, 2008.
WHO MANAGES THE TRUST?
BlackRock Advisors, Inc. (the "Advisor") is an SEC-registered investment
advisor. As of December 31, 2000, the Advisor and its affiliates (together,
"BlackRock") managed $204 billion on behalf of taxable and tax-exempt clients
worldwide. Strategies include fixed income, equity and cash and may incorporate
both domestic and international securities. Domestic fixed income strategies
utilize the government, mortgage, corporate and municipal bond sectors.
BlackRock managed twenty-one closed-end funds that are traded on either the New
York or American stock exchanges, and a $26 billion family of open-end funds.
BlackRock's 301 clients are domiciled in the United States and overseas.
WHAT CAN THE TRUST INVEST IN?
The Trust intends to invest at least 80% of its total assets in a diversified
portfolio of municipal obligations insured as to the timely payment of both
principal and interest. The Trust may invest up to 20% of its total assets in
uninsured municipal obligations which are rated Aaa by Moody's or AAA by S&P, or
are determined by the Advisor to be of comparable credit quality (guaranteed,
escrowed or backed in trust).
WHAT IS THE ADVISOR'S INVESTMENT STRATEGY?
The Advisor will seek to meet the Trust's investment objective by managing the
assets of the Trust so as to return the initial offering price ($15 per share)
at maturity. The Advisor will implement a conservative strategy that will seek
to closely match the maturity or call provisions of the assets of the portfolio
with the future return of the initial investment at the end of 2008. At the
Trust's termination, BlackRock expects that the value of the securities which
have matured, combined with the value of the securities that are sold or called,
if any, will be sufficient to return the initial offering price to investors. On
a continuous basis, the Trust will seek its objective by actively managing its
portfolio of municipal obligations and retaining a small portion of its income
each year. In addition to seeking the return of the initial offering price, the
Advisor also seeks to provide current income exempt from regular Federal income
tax to investors. The portfolio managers will attempt to achieve this objective
by investing in securities that provide competitive income.
In addition, leverage will be used to enhance the income of the portfolio. In
order to maintain competitive yields as the Trust approaches maturity and
depending on market conditions, the Advisor will attempt to purchase securities
with call protection or maturities as close to the Trust's maturity date as
possible. Securities with call protection should provide the portfolio with some
degree of protection against reinvestment risk during times of lower prevailing
interest rates. Since the Trust's primary goal is to return the initial offering
price at maturity, any cash that the Trust receives prior to its maturity date
will be reinvested in securities with maturities which coincide with the
remaining term of the Trust. It is important to note that the Trust will be
managed so as to preserve the integrity of the return of the initial offering
price. If market conditions, such as interest rate volatility, force a choice
between current income and risking the return of the initial offering price, it
is likely the return of the initial offering price will be emphasized.
HOW ARE THE TRUST'S SHARES PURCHASED AND SOLD? DOES THE TRUST PAY DIVIDENDS
REGULARLY?
The Trust's common shares are traded on the New York Stock Exchange which
provides investors with liquidity on a daily basis. Orders to buy or sell shares
of the Trust must be placed through a registered broker or financial advisor.
The Trust pays monthly dividends which are typically paid on the first business
day of the month. For shares held in the shareholder's name, dividends may be
reinvested in additional shares of the Trust through the Trust's transfer agent,
State Street Bank and Trust Company. Investors who wish to hold shares in a
brokerage account should check with their financial advisor to determine whether
their brokerage firm offers dividend reinvestment services.
16
LEVERAGE CONSIDERATIONS IN A TERM TRUST
Under current market conditions, leverage increases the income earned by the
Trust. The Trust employs leverage primarily through the issuance of preferred
stock. Leverage permits the Trust to borrow money at short-term rates and
reinvest that money in longer-term assets which typically offer higher interest
rates. The difference between the cost of the borrowed funds and the income
earned on the proceeds that are invested in longer term assets is the benefit to
the Trust from leverage.
Leverage also increases the duration (or price volatility of the net assets) of
the Trust, which can improve the performance of the Trust in a declining rate
environment, but can cause net assets to decline faster than the market in a
rapidly rising rate environment. The Advisor's portfolio managers continuously
monitor and regularly review the Trust's use of leverage and the Trust may
reduce, or unwind, the amount of leverage employed should the Advisor consider
that reduction to be in the best interests of the shareholders.
SPECIAL CONSIDERATIONS AND RISK FACTORS RELEVANT TO TERM TRUSTS
THE TRUST IS INTENDED TO BE A LONG-TERM INVESTMENT AND IS NOT A SHORT-TERM
TRADING VEHICLE.
RETURN OF INITIAL INVESTMENT. Although the objective of the Trust is to return
its initial offering price upon termination, there can be no assurance that this
objective will be achieved.
DIVIDEND CONSIDERATION. The income and dividends paid by the Trust are likely to
decline to some extent over the term of the Trust due to the anticipated
shortening of the dollar-weighted average maturity of the Trust's assets.
LEVERAGE. The Trust utilizes leverage through the issuance of preferred stock,
which involves special risks. The Trust's net asset value and market value may
be more volatile due to its use of leverage.
MARKET PRICE OF SHARES. The shares of closed-end investment companies such as
the Trust trade on the New York Stock Exchange (NYSE symbol: BRM) and as such
are subject to supply and demand influences. As a result, shares may trade at a
discount or a premium to their net asset value.
ILLIQUID SECURITIES. The Trust may invest in securities that are illiquid,
although under current market conditions the Trust expects only to do so to a
limited extent. An investment in these securities involves special risks.
ANTITAKEOVER PROVISIONS. Certain antitakeover provisions will make a change in
the Trust's business or management more difficult without the approval of the
Trust's Board of Directors and may have the effect of depriving shareholders of
an opportunity to sell their shares at a premium above the prevailing market
price.
MUNICIPAL OBLIGATIONS. Municipal obligations include debt obligations issued by
states, cities, and local authorities, and possessions and certain territories
of the United States to obtain funds for various public purposes, including the
construction of public facilities, the refinancing of outstanding obligations
and the obtaining of funds for general operating expenses and for loans to other
public institutions and facilities. The value of municipal debt securities
generally varies inversely with changes in prevailing market interest rates.
Depending on the amount of call protection that the securities in the Trust
have, the Trust may be subject to certain reinvestment risks in environments of
declining interest rates.
ALTERNATIVE MINIMUM TAX (AMT). The Trust may invest in securities subject to
AMT. The Trust currently holds no securities that are subject to AMT.
17
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THE BLACKROCK INSURED MUNICIPAL 2008 TERM TRUST INC.
GLOSSARY
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CLOSED-END FUND: Investment vehicle which initially offers a fixed number of shares
and trades on a stock exchange. The fund invests in a portfolio of
securities in accordance with its stated investment objectives and
policies.
DISCOUNT: When a fund's net asset value is greater than its stock price the fund is said
to be trading at a discount.
DIVIDEND: Income generated by securities in a portfolio and distributed to shareholders
after the deduction of expenses. The Trust declares and pays dividends to
common shareholders on a monthly basis.
DIVIDEND REINVESTMENT: Shareholders may have all dividends and distributions of capital gains
automatically reinvested into additional shares of a fund.
MARKET PRICE: Price per share of a security trading in the secondary market. For a closed-end
fund, this is the price at which one share of the fund trades on the stock
exchange. If you were to buy or sell shares, you would pay or receive the
market price.
NET ASSET VALUE (NAV): Net asset value is the total market value of all securities and other assets
held by the Trust, plus income accrued on its investments, minus any
liabilities including accrued expenses, divided by the total number of
outstanding common shares. It is the underlying value of a single common share
on a given day. Net asset value for the Trust is calculated weekly and
published in BARRON'S on Saturday and THE WALL STREET JOURNAL on Monday.
PREMIUM: When a fund's stock price is greater than its net asset value, the fund is said
to be trading at a premium.
PRE-REFUNDED BONDS: These securities are collateralized by U.S. Government securities which are
held in escrow and are used to pay principal and interest on the tax exempt
issue and retire the bond in full at the date indicated, typically at a premium
to par.
18
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BLACKROCK ADVISORS, INC.
SUMMARY OF CLOSED-END FUNDS
-------------------------------------------------------------------------------
TAXABLE TRUSTS
------------------------------------------------------------------------------------------
STOCK MATURITY
PERPETUAL TRUSTS SYMBOL DATE
------ ------
The BlackRock Income Trust Inc. BKT N/A
The BlackRock North American Government Income Trust Inc. BNA N/A
The BlackRock High Yield Trust BHY N/A
TERM TRUSTS
The BlackRock 2001 Term Trust Inc. BTM 06/01
The BlackRock Strategic Term Trust Inc. BGT 12/02
The BlackRock Investment Quality Term Trust Inc. BQT 12/04
The BlackRock Advantage Term Trust Inc. BAT 12/05
The BlackRock Broad Investment Grade 2009 Term Trust Inc. BCT 12/09
TAX-EXEMPT TRUSTS
--------------------------------------------------------------------------------------
STOCK MATURITY
PERPETUAL TRUSTS SYMBOL DATE
------ ------
The BlackRock Investment Quality Municipal Trust Inc. BKN N/A
The BlackRock California Investment Quality Municipal Trust Inc. RAA N/A
The BlackRock Florida Investment Quality Municipal Trust RFA N/A
The BlackRock New Jersey Investment Quality Municipal Trust Inc. RNJ N/A
The BlackRock New York Investment Quality Municipal Trust Inc. RNY N/A
The BlackRock Pennsylvania Strategic Municipal Trust BPS N/A
The BlackRock Strategic Municipal Trust BSD N/A
TERM TRUSTS
The BlackRock Municipal Target Term Trust Inc. BMN 12/06
The BlackRock Insured Municipal 2008 Term Trust Inc. BRM 12/08
The BlackRock California Insured Municipal 2008 Term Trust Inc. BFC 12/08
The BlackRock Florida Insured Municipal 2008 Term Trust BRF 12/08
The BlackRock New York Insured Municipal 2008 Term Trust Inc. BLN 12/08
The BlackRock Insured Municipal Term Trust Inc. BMT 12/10
IF YOU WOULD LIKE FURTHER INFORMATION PLEASE CALL BLACKROCK AT (800)
227-7BFM (7236) OR CONSULT WITH YOUR FINANCIAL ADVISOR.
19
[LOGO]
DIRECTORS
Laurence D. Fink, CHAIRMAN
Andrew F. Brimmer
Richard E. Cavanagh
Kent Dixon
Frank J. Fabozzi
James Clayburn La Force, Jr.
Walter F. Mondale
Ralph L. Schlosstein
OFFICERS
Ralph L. Schlosstein, PRESIDENT
Keith T. Anderson, VICE PRESIDENT
Michael C. Huebsch, VICE PRESIDENT
Robert S. Kapito, VICE PRESIDENT
Kevin M. Klingert, VICE PRESIDENT
Richard M. Shea, VICE PRESIDENT/TAX
Henry Gabbay, TREASURER
James Kong, ASSISTANT TREASURER
Anne Ackerley, SECRETARY
INVESTMENT ADVISOR
BlackRock Advisors, Inc.
400 Bellevue Parkway
Wilmington, DE 19809
(800) 227-7BFM
ADMINISTRATOR
Princeton Adminstrators, L.P.
P.O. Box 9095
Princeton, NJ 08543-9095
(800) 543-6217
CUSTODIAN AND TRANSFER AGENT
State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171
(800) 699-1BFM
AUCTION AGENT
Deutsche Bank
4 Albany Street
New York, NY 10006
INDEPENDENT AUDITORS
Deloitte & Touche LLP
Two World Financial Center
New York, NY 10281-1434
LEGAL COUNSEL
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, NY 10036
LEGAL COUNSEL -- INDEPENDENT DIRECTORS
Debevoise & Plimpton
875 Third Avenue
New York, NY 10022
This report is for shareholder information.This is not a prospectus intended
for use in the purchase or sale of any securities.
THE BLACKROCK INSURED
MUNICIPAL 2008 TERM TRUST INC.
c/o Princeton Administrators, L.P.
P.O. Box 9095
Princeton, NJ 08543-9095
(800) 543-6217
09247K-10-9
09247K-30-7
09247K-20-8
09247K-40-6
[RECYCLE LOGO] Printed on recycled paper 09247K-50-5
THE [BLACKROCK LOGO]
INSURED MUNICIPAL
2008 TERM
--------------------
ANNUAL REPORT
DECEMBER 31, 2000