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 811-21178

 

Name of Fund: BlackRock Municipal Income Quality Trust (BYM)

 

Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809

 

Name and address of agent for service: John M. Perlowski, Chief Executive Officer, BlackRock Municipal Income Quality Trust, 55 East 52nd Street, New York, NY 10055

 

Registrant’s telephone number, including area code: (800) 882-0052, Option 4

 

Date of fiscal year end: 08/31/2011

 

Date of reporting period: 02/28/2011

 

Item 1 – Report to Stockholders

 


 

 

(BLCKROCK LOGO)

February 28, 2011


 

Semi-Annual Report (Unaudited)

 

BlackRock Municipal Income Quality Trust (BYM)

 

BlackRock Municipal Income Investment Quality Trust (BAF)

 

BlackRock Municipal Bond Trust (BBK)

 

BlackRock Municipal Bond Investment Trust (BIE)

 

BlackRock Municipal Income Trust II (BLE)

 

BlackRock MuniHoldings Investment Quality Fund (MFL)

 

BlackRock MuniVest Fund, Inc. (MVF)


 

Not FDIC Insured • No Bank Guarantee • May Lose Value




 

 

 


 

 

 

Table of Contents

 

 

 

 

 


 

 

Page


 

 

 

Dear Shareholder

 

3

Semi-Annual Report:

 

 

Municipal Market Overview

 

4

Trust Summaries

 

5

The Benefits and Risks of Leveraging

 

12

Derivative Financial Instruments

 

12

Financial Statements:

 

 

Schedules of Investments

 

13

Statements of Assets and Liabilities

 

42

Statements of Operations

 

43

Statements of Changes in Net Assets

 

44

Statements of Cash Flows

 

46

Financial Highlights

 

47

Notes to Financial Statements

 

54

Officers and Trustees

 

61

Additional Information

 

62


 

 

 


2

SEMI-ANNUAL REPORT

FEBRUARY 28, 2011




 


 

Dear Shareholder

Over the past 12 months, we have seen a sluggish, stimulus-driven economic recovery at long last gain real traction, accelerate, and transition into a consumption-driven expansion. For the most part, 2010 was plagued with widely fluctuating economic data, but as the year drew to a close, it became clear that cyclical stimulus had beaten out structural problems as economic data releases generally became more positive and financial markets showed signs of continuing improvement. Although the sovereign debt crises and emerging market inflation that troubled the global economy in 2010 remain a challenge, overall investor sentiment considerably improved. Near the end of the period, geopolitical tensions across the Middle East North Africa (“MENA”) region along with rising oil prices introduced new cause for concern about the future of the global economy. As of this writing, economic news remains fairly positive although we face additional uncertainties related to the aftermath of the devastating earthquake in Japan, with particular focus on the damage to nuclear power plants.

In the United States, strength from the corporate sector and increasing consumer spending have been key drivers of economic growth, while the housing and labor markets have been the heaviest burdens. While housing has yet to show any meaningful sign of improvement, labor statistics have delivered a mixed bag month after month, but became increasingly encouraging toward the end of the period when the unemployment rate fell to its lowest level since April 2009.

Global equity markets experienced uneven growth and high volatility over the course of 2010, but ended the year strong. Following a strong start to 2011, stocks lost their momentum on the back of geopolitical events in the MENA region and a sharp rise in oil prices. Overall, equities posted strong returns for the 12-month period. US stocks outpaced most international markets and small cap stocks outperformed large caps as investors moved into higher-risk assets.

Fixed income markets saw yields trend lower over most of 2010, until the fourth quarter brought an abrupt reversal in sentiment and risk tolerance that drove yields sharply upward (pushing bond prices down) through year end. Improving economic data continued to pressure fixed income yields in 2011; however, escalating geopolitical risks have acted as a counterweight, restoring relative stability to yield movements. Nevertheless, the yield curve remained steep and higher-risk sectors outperformed the fixed income market.

The tax-exempt municipal market enjoyed a powerful rally during the period of low interest rates in 2010; however, when the yield trend reversed, the market was dealt an additional blow as it became evident that the Build America Bond program would expire at year end. In addition, negative headlines regarding fiscal challenges faced by state and local governments damaged investor confidence and further heightened volatility in the municipal market. Tax-exempt mutual funds experienced heavy outflows, resulting in wider quality spreads and further downward pressure on municipal bond prices. These headwinds began to abate as the period came to a close and municipals finally posted gains in February, following a five-month run of negative performance.

Cash investments, as represented by the 3-month Treasury bill, returned only a fraction over 0% for the 12-month period as short-term interest rates remained low. Yields on money market securities remain near all-time lows.

 

 

 

 

 

 

 

 

Total returns as of February 28, 2011

 

6-month

 

12-month

 


US large cap equities (S&P 500 Index)

 

27.73

%

 

22.57

%

 









US small cap equities (Russell 2000 Index)

 

37.55

 

 

32.60

 

 









International equities (MSCI Europe, Australasia, Far East Index)

 

23.77

 

 

20.00

 

 









3-month Treasury bill (BofA Merrill Lynch 3-Month Treasury Bill Index)

 

0.07

 

 

0.14

 

 









US Treasury securities (BofA Merrill Lynch 10-Year US Treasury Index)

 

(6.04

)

 

4.76

 

 









US investment grade bonds (Barclays Capital US Aggregate Bond Index)

 

(0.83

)

 

4.93

 

 









Tax-exempt municipal bonds (Barclays Capital Municipal Bond Index)

 

(3.51

)

 

1.72

 

 









US high yield bonds (Barclays Capital US Corporate High Yield 2% Issuer Capped Index)

 

10.05

 

 

17.34

 

 









Past performance is no guarantee of future results. Index performance shown for illustrative purposes only. You cannot invest directly in an index.

While no one can peer into a crystal ball and eliminate the uncertainties presented by the economic landscape and financial markets, BlackRock can offer investors the next best thing: partnership with the world’s largest asset management firm and a unique global perspective that allows us to identify trends early and capitalize on market opportunities. For additional market perspective and investment insight, visit www.blackrock.com/shareholdermagazine, where you’ll find the most recent issue of our award-winning Shareholder® magazine, as well as its quarterly companion newsletter, Shareholder Perspectives. As always, we thank you for entrusting BlackRock with your investments, and we look forward to your continued partnership in the months and years ahead.

Sincerely,

-s- Rob Kopito

Rob Kopito
President, BlackRock Advisors, LLC

 

 

 

 


 

THIS PAGE NOT PART OF YOUR FUND REPORT

 

3




 


 

Municipal Market Overview

 


As of February 28, 2011


The municipal market began the six-month period with yields at historic lows as investor concerns were focused on the possibility of deflation and a double-dip in the US economy. However, as these fears soon abated, yields began drifting higher in October, and ultimately, a “perfect storm” of negative events resulted in the worst quarterly performance that the municipal market has seen since the Fed tightening cycle of 1994. Treasury yields lost their support as concerns about the US deficit raised questions over the willingness of foreign investors to continue to purchase Treasury securities, at least at the previous historically low yields. Municipal valuations also suffered a quick and severe setback as it became evident that the Build America Bond (“BAB”) program would expire at year-end. The program had opened the taxable market to municipal issuers, which had successfully alleviated supply pressure in the traditional tax-exempt marketplace, bringing down yields in that space.

(LINE GRAPH)

The financial media has been replete with interviews, articles and presentations publicizing the stress experienced in municipal finance, resulting in a loss of confidence among retail investors who buy individual bonds or mutual funds. From the middle of November through year-end, funds specializing in tax-exempt bonds witnessed weekly outflows averaging over $2.5 billion. Long-term and high-yield funds saw the greatest redemptions, followed by state-specific funds to a lesser but still significant degree. Demand usually is strong at the beginning of a new year against a backdrop of low new-issue supply, but the mutual fund outflows continued into February, putting additional upward pressure on municipal yields. Political uncertainty surrounding the midterm elections and the approach taken by the new Congress on issues such as income tax rates and alternative minimum tax (and the previously mentioned BAB non-extension) exacerbated the situation. All these conditions, combined with the seasonal illiquidity surrounding year-end holidays and dealers closing their fiscal books, sapped willing market participation from the trading community.

As demand for municipal securities from traditional retail investors was declining and trading desk liquidity was being curtailed, there was no comparable reduction in supply. As it became evident that the BAB program would be retired, issuers rushed deals to market both in the taxable municipal space and, to a lesser degree, in the traditional tax-exempt space. This imbalance in the supply/demand technicals provided the classic market action, leading to wider quality spreads and higher bond yields. The municipal curve steepened as the issuance was concentrated in longer (greater than 20-year) maturities. Curve steepening that began in October accelerated in November, spurred on by Treasury weakness, heavy supply and record outflows. As measured by Thomson Municipal Market Data, yields on AAA-rated municipals rose nearly 103 basis points (“bps”) for maturities 25 years and longer from August 31, 2010, to February 28, 2011. The spread between two-year and 30-year maturities widened from 332 bps to 398 bps over the period.

The fundamental picture for municipalities will be subject to scrutiny for months to come, as the challenges to state and local budgets are real and need to be addressed with significant cuts to expenses and tax revenue increases. The debates around austerity measures needed to succeed in balancing these budgets are not over whether action needs to be taken, but over degree, approach and political will to accomplish these needs. The attention shone upon municipal finance has the potential to improve this market for the future if these efforts result in greater means toward disclosure and accuracy (and timeliness) of reporting. Early tests to judge progress will come soon as California, Illinois and Puerto Rico need to take austerity measures and access financing in the municipal market to address relatively immediate fiscal imbalances. BlackRock favors a more constructive outlook for the municipal market as the typical, and this year particularly atypical, weakness passes.

 

 

 


4

SEMI-ANNUAL REPORT

FEBRUARY 28, 2011




 

 


 

 

Trust Summary as of February 28, 2011

BlackRock Municipal Income Quality Trust


 


Trust Overview


Effective November 9, 2010, BlackRock Insured Municipal Income Trust changed its name to BlackRock Municipal Income Quality Trust.

BlackRock Municipal Income Quality Trust’s (BYM) (the “Trust”) investment objective is to provide current income exempt from federal income taxes, including the alternative minimum tax. The Trust seeks to achieve its investment objective by investing, under normal circumstances, at least 80% of its assets in municipal bonds exempt from federal income taxes, including the alternative minimum tax. The Trust also invests primarily in municipal bonds that are investment grade quality at the time of investment. The Trust may invest directly in such securities or synthetically through the use of derivatives.

 

 

 

No assurance can be given that the Trust’s investment objective will be achieved.


 


Performance


Effective November 9, 2010, the Trust’s investment policy was changed by the removal of the insurance investment policy that required at least 80% of its assets to be invested in insured municipal securities. Accordingly, the Trust was moved from the Lipper Insured Municipal Debt Funds (Leveraged) category into the Lipper General Municipal Debt Funds (Leveraged) category. For the six months ended February 28, 2011, the Trust returned (9.53)% based on market price and (7.89)% based on net asset value (“NAV”). For the same period, the closed-end Lipper General Municipal Debt Funds (Leveraged) category posted an average return of (10.86)% based on market price and (7.86)% based on NAV, and the closed-end Lipper Insured Municipal Debt Funds (Leveraged) category posted an average return of (11.51)% based on market price and (6.90)% based on NAV. All returns reflect reinvestment of dividends. The Trust’s premium to NAV, which narrowed during the period, accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV. The Trust’s performance was negatively impacted by its long duration during a period of rising rates. The Trust’s holdings of longer maturity bonds also detracted from performance as the municipal yield curve bear-steepened (long rates increased more than short rates). Conversely, the Trust’s performance was positively impacted by its holdings of pre-refunded bonds and securities with higher coupons that are priced to shorter call dates. These types of securities performed well due to their shorter duration as municipal rates rose sharply. In addition, the Trust benefited from its holdings in the housing sector, which had strong performance over the period.

 

 

 

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.


 


Trust Information



 

 

 

 

Symbol on New York Stock Exchange (“NYSE”)

 

BYM

 

Initial Offering Date

 

October 31, 2002

 

Yield on Closing Market Price as of February 28, 2011 ($13.34)1

 

6.93%

 

Tax Equivalent Yield2

 

10.66%

 

Current Monthly Distribution per Common Share3

 

$0.077

 

Current Annualized Distribution per Common Share3

 

$0.924

 

Leverage as of February 28, 20114

 

39%

 






 

 

 

 

1

Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results.

 

 

 

 

2

Tax equivalent yield assumes the maximum federal tax rate of 35%.

 

 

 

 

3

The distribution rate is not constant and is subject to change.

 

 

 

 

4

Represents Auction Market Preferred Shares (“Preferred Shares”) and tender option bond trusts (“TOBs”) as a percentage of total managed assets, which is the total assets of the Trust, including any assets attributable to Preferred Shares and TOBs, minus the sum of accrued liabilities. For a discussion of leveraging techniques utilized by the Trust, please see The Benefits and Risks of Leveraging on page 12.

The table below summarizes the changes in the Trust’s market price and NAV per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 













 

 

2/28/11

 

8/31/10

 

Change

 

High

 

Low

 













Market Price

 

$

13.34

 

$

15.26

 

 

(12.58

)%

$

15.42

 

$

11.71

 

Net Asset Value

 

$

13.03

 

$

14.64

 

 

(11.00

)%

$

14.69

 

$

12.20

 


















The following charts show the sector and credit quality allocations of the Trust’s long-term investments:

 


Sector Allocations



 

 

 

 

 

 

 

 

 

 

2/28/11

 

8/31/10

 







Transportation

 

23

%

 

21

%

 

Utilities

 

21

 

 

24

 

 

County/City/Special District/School District

 

21

 

 

21

 

 

State

 

15

 

 

15

 

 

Health

 

7

 

 

7

 

 

Tobacco

 

6

 

 

6

 

 

Education

 

3

 

 

3

 

 

Corporate

 

2

 

 

2

 

 

Housing

 

2

 

 

1

 

 










 


Credit Quality Allocations5



 

 

 

 

 

 

 

 

 

 

2/28/11

 

8/31/10

 







AAA/Aaa

 

25

%

 

57

%

 

AA/Aa

 

54

 

 

24

 

 

A

 

12

 

 

12

 

 

BBB/Baa

 

9

 

 

5

 

 

Not Rated

 

 

 

2

6

 










 

 

 

 

5

Using the higher of Standard & Poor’s (“S&P’s”) or Moody’s Investors Service (“Moody’s”) ratings.

 

 

 

 

6

The investment advisor has deemed certain of these non-rated securities to be of investment grade quality. As of August 31, 2010, the market value of these securities was $10,513,600 representing 2% of the Trust’s long-term investments.


 

 

 

 


 

SEMI-ANNUAL REPORT

FEBRUARY 28, 2011

5




 

 


 

Trust Summary as of February 28, 2011

BlackRock Municipal Income Investment Quality Trust


 


Trust Overview


Effective November 9, 2010, BlackRock Insured Municipal Income Investment Trust changed its name to BlackRock Municipal Income Investment Quality Trust.

BlackRock Municipal Income Investment Quality Trust’s (BAF) (the “Trust”) investment objective is to provide current income exempt from federal income tax, including the alternative minimum tax and Florida intangible property tax. The Trust seeks to achieve its investment objective by investing, under normal circumstances, at least 80% of its assets in municipal bonds exempt from federal income taxes, including the alternative minimum tax. The Trust also invests primarily in municipal bonds that are investment grade quality at the time of investment. The Trust may invest directly in such securities or synthetically through the use of derivatives. Due to the repeal of the Florida intangible personal property tax, the Board approved an amended policy in September 2008, allowing the Trust the flexibility to invest in municipal obligations regardless of geographical location.

 

 

 

No assurance can be given that the Trust’s investment objective will be achieved.


 


Performance


Effective November 9, 2010, the Trust’s investment policy was changed by the removal of the insurance investment policy that required at least 80% of its assets to be invested in insured municipal securities. Accordingly, the Trust was moved from the Lipper Insured Municipal Debt Funds (Leveraged) category into the Lipper General Municipal Debt Funds (Leveraged) category. For the six months ended February 28, 2011, the Trust returned (13.50)% based on market price and (7.61)% based on NAV. For the same period, the closed-end Lipper General Municipal Debt Funds (Leveraged) category posted an average return of (10.86)% based on market price and (7.86)% based on NAV, and the closed-end Lipper Insured Municipal Debt Funds (Leveraged) category posted an average return of (11.51)% based on market price and (6.90)% based on NAV. All returns reflect reinvestment of dividends. The Trust moved from a premium to NAV to a discount by period end, which accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV. The Trust’s holdings of high-quality essential service bonds with premium coupons (6% or higher) benefited performance, as they held their value better than lower-coupon bonds in the rising interest rate environment. Conversely, exposure to longer-duration and longer-maturity bonds detracted from performance as the long end of the yield curve steepened during the period. Additionally, holdings in health care and transportation hindered performance as both sectors underperformed the broad municipal market.

 

 

 

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.


 


Trust Information



 

 

 

 

Symbol on NYSE

 

BAF

 

Initial Offering Date

 

October 31, 2002

 

Yield on Closing Market Price as of February 28, 2011 ($13.10)1

 

6.82%

 

Tax Equivalent Yield2

 

10.49%

 

Current Monthly Distribution per Common Share3

 

$0.0745

 

Current Annualized Distribution per Common Share3

 

$0.8940

 

Leverage as of February 28, 20114

 

37%

 






 

 

 

 

1

Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results.

 

 

 

 

2

Tax equivalent yield assumes the maximum federal tax rate of 35%.

 

 

 

 

3

The distribution rate is not constant and is subject to change.

 

 

 

 

4

Represents Preferred Shares and TOBs as a percentage of total managed assets, which is the total assets of the Trust, including any assets attributable to Preferred Shares and TOBs, minus the sum of accrued liabilities. For a discussion of leveraging techniques utilized by the Trust, please see The Benefits and Risks of Leveraging on page 12.

The table below summarizes the changes in the Trust’s market price and NAV per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 













 

 

2/28/11

 

8/31/10

 

Change

 

High

 

Low

 













Market Price

 

$

13.10

 

$

15.64

 

 

(16.24

)%

$

15.92

 

$

11.92

 

Net Asset Value

 

$

13.49

 

$

15.08

 

 

(10.54

)%

$

15.08

 

$

12.76

 


















The following charts show the sector and credit quality allocations of the Trust’s long-term investments:

 


Sector Allocations



 

 

 

 

 

 

 

 

 

 

2/28/11

 

8/31/10

 







County/City/Special District/School District

 

33

%

 

36

%

 

Utilities

 

26

 

 

27

 

 

Transportation

 

15

 

 

15

 

 

Health

 

12

 

 

10

 

 

State

 

11

 

 

11

 

 

Education

 

1

 

 

 

 

Housing

 

1

 

 

1

 

 

Tobacco

 

1

 

 

 

 










 


Credit Quality Allocations5



 

 

 

 

 

 

 

 

 

 

2/28/11

 

8/31/10

 







AAA/Aaa

 

8

%

 

59

%

 

AA/Aa

 

79

 

 

25

 

 

A

 

9

 

 

13

 

 

BBB/Baa

 

4

 

 

 

 

Not Rated

 

 

 

36

 

 










 

 

 

 

5

Using the higher of S&P’s or Moody’s ratings.

 

 

 

 

6

The investment advisor has deemed certain of these non-rated securities to be of investment grade quality. As of August 31, 2010, the market value of these securities was $5,171,100 representing 3% of the Trust’s long-term investments.


 

 

 


6

SEMI-ANNUAL REPORT

FEBRUARY 28, 2011




 

 


 

Trust Summary as of February 28, 2011

BlackRock Municipal Bond Trust


 


Trust Overview


BlackRock Municipal Bond Trust’s (BBK) (the “Trust”) investment objective is to provide current income exempt from regular federal income tax. The Trust seeks to achieve its investment objective by investing primarily in municipal bonds exempt from regular federal income taxes (except that the interest may be subject to the federal alternative minimum tax). The Trust invests, under normal market conditions, at least 80% of its assets in municipal bonds that are investment grade quality. The Trust may invest directly in such securities or synthetically through the use of derivatives.

 

 

 

No assurance can be given that the Trust’s investment objective will be achieved.


 


Performance


For the six months ended February 28, 2011, the Trust returned (10.59)% based on market price and (8.61)% based on NAV. For the same period, the closed-end Lipper General Municipal Debt Funds (Leveraged) category posted an average return of (10.86)% based on market price and (7.86)% based on NAV. All returns reflect reinvestment of dividends. The Trust’s premium to NAV, which narrowed during the period, accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV. The Trust’s exposure to the long end of the yield curve and holdings of low-coupon, long-duration bonds during a period of rising rates had a negative impact on performance. The Trust’s exposure to Puerto Rico credits and the health sector also detracted from performance, as did holdings of lower-quality credits, where spreads widened amid the backdrop of poor relative performance across the municipal market. Conversely, the Trust benefited from its holdings of tax-backed credits (state, county, city and school district) as well as its exposure to corporate-backed credits, which experienced some buy-side demand from non-traditional cross-over buyers.

 

 

 

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.


 


Trust Information



 

 

 

 

Symbol on NYSE

 

BBK

 

Initial Offering Date

 

April 30, 2002

 

Yield on Closing Market Price as of February 28, 2011 ($13.61)1

 

7.58%

 

Tax Equivalent Yield2

 

11.66%

 

Current Monthly Distribution per Common Share3

 

$0.086

 

Current Annualized Distribution per Common Share3

 

$1.032

 

Leverage as of February 28, 20114

 

38%

 






 

 

 

 

1

Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results.

 

 

 

 

2

Tax equivalent yield assumes the maximum federal tax rate of 35%.

 

 

 

 

3

A change in the distribution rate was declared on March 1, 2011. The Monthly Distribution per Common Share was increased to $0.0885. The Yield on Closing Market Price, Current Monthly Distribution per Common Share and Current Annualized Distribution per Common Share do not reflect the new distribution rate. The new distribution rate is not constant and is subject to further change in the future.

 

 

 

 

4

Represents Preferred Shares and TOBs as a percentage of total managed assets, which is the total assets of the Trust, including any assets attributable to Preferred Shares and TOBs, minus the sum of accrued liabilities. For a discussion of leveraging techniques utilized by the Trust, please see The Benefits and Risks of Leveraging on page 12.

The table below summarizes the changes in the Trust’s market price and NAV per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 













 

 

2/28/11

 

8/31/10

 

Change

 

High

 

Low

 













Market Price

 

$

13.61

 

$

15.79

 

 

(13.81

)%

$

16.00

 

$

12.20

 

Net Asset Value

 

$

13.47

 

$

15.29

 

 

(11.90

)%

$

15.30

 

$

12.70

 


















The following charts show the sector and credit quality allocations of the Trust’s long-term investments:

 


Sector Allocations



 

 

 

 

 

 

 

 

 

 

2/28/11

 

8/31/10

 







Health

 

24

%

 

23

%

 

Housing

 

15

 

 

14

 

 

State

 

14

 

 

15

 

 

County/City/Special District/School District

 

11

 

 

13

 

 

Corporate

 

10

 

 

8

 

 

Education

 

10

 

 

10

 

 

Transportation

 

9

 

 

9

 

 

Utilities

 

5

 

 

5

 

 

Tobacco

 

2

 

 

3

 

 










 


Credit Quality Allocations5



 

 

 

 

 

 

 

 

 

 

2/28/11

 

8/31/10

 







AAA/Aaa

 

8

%

 

26

%

 

AA/Aa

 

40

 

 

20

 

 

A

 

19

 

 

22

 

 

BBB/Baa

 

19

 

 

20

 

 

BB/Ba

 

5

 

 

1

 

 

B

 

3

 

 

3

 

 

CCC/Caa

 

1

 

 

1

 

 

Not Rated6

 

5

 

 

7

 

 










 

 

 

 

5

Using the higher of S&P’s or Moody’s ratings.

 

 

 

 

6

The investment advisor has deemed certain of these non-rated securities to be of investment grade quality. As of February 28, 2011 and August 31, 2010, the market value of these securities was $4,946,681 representing 2% and $6,207,616 representing 3%, respectively, of the Trust’s long-term investments.


 

 

 

 


 

SEMI-ANNUAL REPORT

FEBRUARY 28, 2011

7




 

 


 

Trust Summary as of February 28, 2011

BlackRock Municipal Bond Investment Trust


 


Trust Overview


BlackRock Municipal Bond Investment Trust’s (BIE) (the “Trust”) investment objective is to provide current income exempt from regular federal income tax and Florida intangible personal property tax. The Trust seeks to achieve its investment objective by investing primarily in municipal bonds exempt from federal income taxes (except that the interest may be subject to the federal alternative minimum tax). Under normal market conditions, the Trust invests at least 80% of its assets in municipal bonds that are investment grade quality at the time of investment. The Trust may invest directly in such securities or synthetically through the use of derivatives. Due to the repeal of the Florida intangible personal property tax, the Board approved an amended policy in September 2008, allowing the Trust the flexibility to invest in municipal obligations regardless of geographical location.

 

 

 

No assurance can be given that the Trust’s investment objective will be achieved.


 


Performance


For the six months ended February 28, 2011, the Trust returned (13.80)% based on market price and (9.43)% based on NAV. For the same period, the closed-end Lipper General Municipal Debt Funds (Leveraged) category posted an average return of (10.86)% based on market price and (7.86)% based on NAV. All returns reflect reinvestment of dividends. The Trust moved from a premium to NAV to a discount by period end, which accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV. Exposure to longer-duration and longer-maturity bonds detracted from the Trust’s performance as the long end of the yield curve steepened during the period. Additionally, holdings in health care and transportation hindered performance as both sectors underperformed the broad municipal market. Conversely, exposure to housing and corporate-backed bonds aided performance as both sectors outperformed the broad municipal market. The Trust’s holdings of high-quality essential service bonds with premium coupons (6% or higher) also benefited performance, as they held their value better than lower-coupon bonds in the rising interest rate environment.

 

 

 

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.


 


Trust Information



 

 

 

 

Symbol on NYSE

 

BIE

 

Initial Offering Date

 

April 30, 2002

 

Yield on Closing Market Price as of February 28, 2011 ($13.00)1

 

7.27%

 

Tax Equivalent Yield2

 

11.18%

 

Current Monthly Distribution per Common Share3

 

$0.0788

 

Current Annualized Distribution per Common Share3

 

$0.9456

 

Leverage as of February 28, 20114

 

43%

 






 

 

 

 

1

Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results.

 

 

 

 

2

Tax equivalent yield assumes the maximum federal tax rate of 35%.

 

 

 

 

3

A change in the distribution rate was declared on March 1, 2011. The Monthly Distribution per Common Share was increased to $0.081. The Yield on Closing Market Price, Current Monthly Distribution per Common Share and Current Annualized Distribution per Common Share do not reflect the new distribution rate. The new distribution rate is not constant and is subject to further change in the future.

 

 

 

 

4

Represents Preferred Shares and TOBs as a percentage of total managed assets, which is the total assets of the Trust, including any assets attributable to Preferred Shares and TOBs, minus the sum of accrued liabilities. For a discussion of leveraging techniques utilized by the Trust, please see The Benefits and Risks of Leveraging on page 12.

The table below summarizes the changes in the Trust’s market price and NAV per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 













 

 

2/28/11

 

8/31/10

 

Change

 

High

 

Low

 













Market Price

 

$

13.00

 

$

15.60

 

 

(16.67

)%

$

15.76

 

$

12.14

 

Net Asset Value

 

$

13.58

 

$

15.51

 

 

(12.44

)%

$

15.51

 

$

12.76

 


















The following charts show the sector and credit quality allocations of the Trust’s long-term investments:

 


Sector Allocations



 

 

 

 

 

 

 

 

 

 

2/28/11

 

8/31/10

 







Health

 

23

%

 

22

%

 

Utilities

 

19

 

 

18

 

 

Transportation

 

18

 

 

18

 

 

County/City/Special District/School District

 

17

 

 

19

 

 

State

 

8

 

 

8

 

 

Education

 

8

 

 

8

 

 

Housing

 

5

 

 

5

 

 

Corporate

 

1

 

 

1

 

 

Tobacco

 

1

 

 

1

 

 










 


Credit Quality Allocations5



 

 

 

 

 

 

 

 

 

 

2/28/11

 

8/31/10

 







AAA/Aaa

 

10

%

 

14

%

 

AA/Aa

 

66

 

 

64

 

 

A

 

18

 

 

17

 

 

BBB/Baa

 

5

 

 

4

 

 

BB/Ba

 

1

 

 

 

 

Not Rated

 

 

 

1

 

 










 

 

 

 

5

Using the higher of S&P’s or Moody’s ratings.


 

 

 


8

SEMI-ANNUAL REPORT

FEBRUARY 28, 2011




 

 


 

Trust Summary as of February 28, 2011

BlackRock Municipal Income Trust II


 


Trust Overview


BlackRock Municipal Income Trust II’s (BLE) (the “Trust”) investment objective is to provide current income exempt from regular federal income tax. The Trust seeks to achieve its investment objective by investing primarily in municipal bonds exempt from federal income taxes (except that the interest may be subject to the federal alternative minimum tax). The Trust invests, under normal market conditions, at least 80% of its assets in municipal bonds that are investment grade quality at the time of investment. The Trust may invest directly in such securities or synthetically through the use of derivatives.

 

 

 

No assurance can be given that the Trust’s investment objective will be achieved.


 


Performance


For the six months ended February 28, 2011, the Trust returned (11.27)% based on market price and (6.98)% based on NAV. For the same period, the closed-end Lipper General Municipal Debt Funds (Leveraged) category posted an average return of (10.86)% based on market price and (7.86)% based on NAV. All returns reflect reinvestment of dividends. The Trust moved from a premium to NAV to a discount by period end, which accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV. At the beginning of the period, the Trust’s longer duration stance was beneficial as rates declined and credit spreads tightened; however, the sharp reversal of these trends mid-period resulted in an overall negative impact on performance for the period. In addition, the Trust’s emphasis on lower-quality bonds hurt performance as credit spreads widened over the period. Contributing positively to performance was the Trust’s reduced exposure to the tobacco sector, which was the worst performing sector for the period. Additionally, a general reduction of capital appreciation bond (“CAB”) holdings proved beneficial in the rising rate environment as CABs are highly sensitive to interest rate fluctuations.

 

 

 

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.


 


Trust Information



 

 

 

 

Symbol on NYSE Amex

 

BLE

 

Initial Offering Date

 

July 30, 2002

 

Yield on Closing Market Price as of February 28, 2011 ($13.02)1

 

7.70%

 

Tax Equivalent Yield2

 

11.85%

 

Current Monthly Distribution per Common Share3

 

$0.0835

 

Current Annualized Distribution per Common Share3

 

$1.0020

 

Leverage as of February 28, 20114

 

38%

 






 

 

 

 

1

Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results.

 

 

 

 

2

Tax equivalent yield assumes the maximum federal tax rate of 35%.

 

 

 

 

3

The distribution rate is not constant and is subject to change.

 

 

 

 

4

Represents Preferred Shares and TOBs as a percentage of total managed assets, which is the total assets of the Trust, including any assets attributable to Preferred Shares and TOBs, minus the sum of accrued liabilities. For a discussion of leveraging techniques utilized by the Trust, please see The Benefits and Risks of Leveraging on page 12.

The table below summarizes the changes in the Trust’s market price and NAV per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 













 

 

2/28/11

 

8/31/10

 

Change

 

High

 

Low

 













Market Price

 

$

13.02

 

$

15.22

 

 

(14.45

)%

$

15.35

 

$

11.87

 

Net Asset Value

 

$

13.12

 

$

14.63

 

 

(10.32

)%

$

14.63

 

$

12.41

 


















The following charts show the sector and credit quality allocations of the Trust’s long-term investments:

 


Sector Allocations



 

 

 

 

 

 

 

 

 

 

2/28/11

 

8/31/10

 







Health

 

20

%

 

19

%

 

State

 

18

 

 

17

 

 

Utilities

 

12

 

 

13

 

 

Corporate

 

11

 

 

11

 

 

Transportation

 

11

 

 

11

 

 

County/City/Special District/School District

 

10

 

 

12

 

 

Education

 

8

 

 

7

 

 

Housing

 

6

 

 

6

 

 

Tobacco

 

4

 

 

4

 

 










 


Credit Quality Allocations5



 

 

 

 

 

 

 

 

 

 

2/28/11

 

8/31/10

 







AAA/Aaa

 

13

%

 

18

%

 

AA/Aa

 

28

 

 

21

 

 

A

 

29

 

 

30

 

 

BBB/Baa

 

15

 

 

17

 

 

BB/Ba

 

5

 

 

1

 

 

B

 

4

 

 

6

 

 

CCC/Caa

 

1

 

 

1

 

 

Not Rated6

 

5

 

 

6

 

 










 

 

 

 

5

Using the higher of S&P’s or Moody’s ratings.

 

 

 

 

6

The investment advisor has deemed certain of these non-rated securities to be of investment grade quality. As of February 28, 2011 and August 31, 2010, the market value of these securities was $7,192,827 representing 1% and $13,839,185 representing 3%, respectively, of the Trust’s long-term investments.


 

 

 

 


 

SEMI-ANNUAL REPORT

FEBRUARY 28, 2011

9




 

 


 

Trust Summary as of February 28, 2011

BlackRock MuniHoldings Investment Quality Fund


 


Trust Overview


Effective November 9, 2010, BlackRock MuniHoldings Insured Investment Fund changed its name to BlackRock MuniHoldings Investment Quality Fund.

BlackRock MuniHoldings Investment Quality Fund’s (MFL) (the “Trust”) investment objective is to provide shareholders with current income exempt from federal income tax and to provide shareholders with the opportunity to own shares the value of which is exempt from Florida intangible personal property tax. The Trust seeks to achieve its investment objective by investing primarily in long-term, investment grade municipal obligations exempt from federal income taxes (except that the interest may be subject to the federal alternative minimum tax). Under normal market conditions, the Trust invests at least 80% of its assets in municipal obligations with remaining maturities of one year or more. The Trust may invest directly in such securities or synthetically through the use of derivatives. Due to the repeal of the Florida intangible personal property tax, the Board approved an amended policy in September 2008, allowing the Trust the flexibility to invest in municipal obligations regardless of geographical location.

 

 

 

No assurance can be given that the Trust’s investment objective will be achieved.


 


Performance


Effective November 9, 2010, the Trust’s investment policy was changed by the removal of the insurance investment policy that required at least 80% of its assets to be invested in insured municipal securities. Accordingly, the Trust was moved from the Lipper Insured Municipal Debt Funds (Leveraged) category into the Lipper General Municipal Debt Funds (Leveraged) category. For the six months ended February 28, 2011, the Trust returned (10.49)% based on market price and (8.76)% based on NAV. For the same period, the closed-end Lipper General Municipal Debt Funds (Leveraged) category posted an average return of (10.86)% based on market price and (7.86)% based on NAV, and the closed-end Lipper Insured Municipal Debt Funds (Leveraged) category posted an average return of (11.51)% based on market price and (6.90)% based on NAV. All returns reflect reinvestment of dividends. The Trust’s discount to NAV, which widened during the period, accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV. Exposure to longer-duration and longer-maturity bonds detracted from the Trust’s performance as the long end of the yield curve steepened during the period. Additionally, holdings in health care and transportation hindered performance as both sectors underperformed the broad municipal market. Conversely, exposure to housing bonds aided performance as that sector outperformed the broad municipal market. The Trust’s holdings of high-quality essential service bonds with premium coupons (6% or higher) also benefited performance, as they held their value better than lower-coupon bonds in the rising interest rate environment.

 

 

 

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.


 


Trust Information



 

 

 

 

Symbol on NYSE

 

MFL

 

Initial Offering Date

 

September 26, 1997

 

Yield on Closing Market Price as of February 28, 2011 ($12.68)1

 

7.10%

 

Tax Equivalent Yield2

 

10.92%

 

Current Monthly Distribution per Common Share3

 

$0.075

 

Current Annualized Distribution per Common Share3

 

$0.900

 

Leverage as of February 28, 20114

 

41%

 






 

 

 

 

1

Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results.

 

 

 

 

2

The equivalent yield assumes the maximum federal tax rate of 35%.

 

 

 

 

3

A change in the distribution rate was declared on March 1, 2011. The Monthly Distribution per Common Share was increased to $0.0765. The Yield on Closing Market Price, Current Monthly Distribution per Common Share and Current Annualized Distribution per Common Share do not reflect the new distribution rate. The new distribution rate is not constant and is subject to change in the future.

 

 

 

 

4

Represents Preferred Shares and TOBs as a percentage of total managed assets, which is the total assets of the Trust, including any assets attributable to Preferred Shares and TOBs, minus the sum of accrued liabilities. For a discussion of leveraging techniques utilized by the Trust, please see The Benefits and Risks of Leveraging on page 12.

The table below summarizes the changes in the Trust’s market price and NAV per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 













 

 

2/28/11

 

8/31/10

 

Change

 

High

 

Low

 













Market Price

 

$

12.68

 

$

14.65

 

 

(13.45

)%

$

14.87

 

$

11.68

 

Net Asset Value

 

$

12.96

 

$

14.69

 

 

(11.78

)%

$

14.69

 

$

12.23

 


















The following charts show the sector and credit quality allocations of the Trust’s long-term investments:

 


Sector Allocations



 

 

 

 

 

 

 

 

 

 

2/28/11

 

8/31/10

 







Utilities

 

26

%

 

26

%

 

Transportation

 

24

 

 

27

 

 

County/City/Special District/School District

 

18

 

 

18

 

 

Health

 

12

 

 

11

 

 

State

 

11

 

 

12

 

 

Housing

 

5

 

 

4

 

 

Education

 

3

 

 

2

 

 

Tobacco

 

1

 

 

 

 










 


Credit Quality Allocations5



 

 

 

 

 

 

 

 

 

 

2/28/11

 

8/31/10

 







AAA/Aaa

 

6

%

 

64

%

 

AA/Aa

 

82

 

 

24

 

 

A

 

8

 

 

11

 

 

BBB/Baa

 

3

 

 

 

 

Not Rated6

 

1

 

 

1

 

 










 

 

 

 

5

Using the higher of S&P’s or Moody’s ratings.

 

 

 

 

6

The investment advisor has deemed certain of these non-rated securities to be of investment grade quality. As of February 28, 2011 and August 31, 2010, the market value of these securities was $3,022,118 representing 1% and $5,793,997 representing 1%, respectively, of the Trust’s long-term investments.


 

 

 


10

SEMI-ANNUAL REPORT

FEBRUARY 28, 2011




 

 


 

Trust Summary as of February 28, 2011

BlackRock MuniVest Fund, Inc.


 


Trust Overview


BlackRock MuniVest Fund, Inc.’s (MVF) (the “Trust”) investment objective is 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. The Trust seeks to achieve its investment objective by investing at least 80% of its assets in municipal obligations exempt from federal income taxes (except that the interest may be subject to the federal alternative minimum tax). The Trust invests, under normal market conditions, primarily in long term municipal obligations rated investment grade at the time of investment and invests primarily in long term municipal obligations with maturities of more than ten years at the time of investment. The Trust may invest directly in such securities or synthetically through the use of derivatives.

 

 

 

No assurance can be given that the Trust’s investment objective will be achieved


 


Performance


For the six months ended February 28, 2011, the Trust returned (9.59)% based on market price and (7.91)% based on NAV. For the same period, the closed-end Lipper General Municipal Debt Funds (Leveraged) category posted an average return of (10.86)% based on market price and (7.86)% based on NAV. All returns reflect reinvestment of dividends. The Trust’s premium to NAV, which narrowed during the period, accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV. At the beginning of the period, the Trust benefited from tightening credit quality spreads driven by generous investor cash flows into tax-exempt mutual funds. Spreads were pushed even tighter by heightened demand from taxable investors for corporate-backed municipal debt due to its attractive valuation relative to the corporate sector. In this environment of strong demand, we were able to sell lower-quality securities that had outperformed and had previously been very limited in their liquidity. Toward the end of the period, the Trust’s position in cash and cash equivalents proved beneficial when the municipal market saw net cash flows into mutual funds turn dramatically negative. However, as municipal rates rose on credit concerns and the Build America Bonds program neared its expiration, while long-term investment rates (i.e., rates on US Treasuries and other fixed income securities) were generally increasing, the Trust’s longer duration stance had an overall negative impact on performance.

 

 

 

The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.


 

 

 

 

 






Trust Information

 

 

 

 







 

 

 

 

 

Symbol on NYSE Amex

 

MVF

 

Initial Offering Date

 

September 29, 1988

 

Yield on Closing Market Price as of February 28, 2011 ($9.04)1

 

 

7.83%

 

Tax Equivalent Yield2

 

 

12.05%

 

Current Monthly Distribution per Common Share3

 

 

$0.059

 

Current Annualized Distribution per Common Share3

 

 

$0.708

 

Leverage as of February 28, 20114

 

 

43%

 







 

 

 

 

1

Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results.

 

 

 

 

2

Tax equivalent yield assumes the maximum federal tax rate of 35%.

 

 

 

 

3

The distribution rate is not constant and is subject to change.

 

 

 

 

4

Represents Preferred Shares and TOBs as a percentage of total managed assets, which is the total assets of the Trust, including any assets attributable to Preferred Shares and TOBs, minus the sum of accrued liabilities. For a discussion of leveraging techniques utilized by the Trust, please see The Benefits and Risks of Leveraging on page 12.

The table below summarizes the changes in the Trust’s market price and NAV per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

















 

 

 

2/28/11

 

8/31/10

 

Change

 

High

 

Low

 

















 

Market Price

 

$

9.04

 

$

10.38

 

 

(12.91)

%

$

10.45

 

$

8.53

 

Net Asset Value

 

$

8.88

 

$

10.01

 

 

(11.29)

%

$

10.03

 

$

8.45

 

















 

The following charts show the sector and credit quality allocations of the Trust’s long-term investments:

 


Sector Allocations



 

 

 

 

 

 

 

 

 

 

2/28/11

 

8/31/10

 






Health

 

24

%

 

22

%

 

Corporate

 

16

 

 

17

 

 

Transportation

 

15

 

 

13

 

 

Utilities

 

11

 

 

12

 

 

County/City/Special District/School District

 

10

 

 

10

 

 

State

 

8

 

 

8

 

 

Education

 

7

 

 

7

 

 

Housing

 

7

 

 

7

 

 

Tobacco

 

2

 

 

4

 

 










 


Credit Quality Allocations5



 

 

 

 

 

 

 

 

 

 

2/28/11

 

8/31/10

 









AAA/Aaa

 

18

%

 

23

%

 

AA/Aa

 

41

 

 

35

 

 

A

 

23

 

 

23

 

 

BBB/Baa

 

15

 

 

15

 

 

B

 

 

 

1

 

 

Not Rated6

 

3

 

 

3

 

 










 

 

 

 

5

Using the higher of S&P’s or Moody’s ratings.

 

 

 

 

6

The investment advisor has deemed certain of these non-rated securities to be of investment grade quality. As of February 28, 2011 and August 31, 2010, the market value of these securities was $12,857,530 representing 1% and $21,938,423 representing 2%, respectively, of the Trust’s long-term investments.


 

 

 

 


 

SEMI-ANNUAL REPORT

FEBRUARY 28, 2011

11




 


 

The Benefits and Risks of Leveraging

The Trusts may utilize leverage to seek to enhance the yield and NAV of their common shares (“Common Shares”). However, these objectives cannot be achieved in all interest rate environments.

To leverage, the Trusts issue preferred shares (“Preferred Shares”), which pay dividends at prevailing short-term interest rates, and invest the proceeds in long-term municipal bonds. In general, the concept of leveraging is based on the premise that the financing cost of assets to be obtained from leverage, which will be based on short-term interest rates, will normally be lower than the income earned by each Trust on its longer-term portfolio investments. To the extent that the total assets of each Trust (including the assets obtained from leverage) are invested in higher-yielding portfolio investments, each Trust’s holders of Common Shares (“Common Shareholders”) will benefit from the incremental net income.

To illustrate these concepts, assume a Trust’s Common Shares capitalization is $100 million and it issues Preferred Shares 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 3% and long-term interest rates are 6%, the yield curve has a strongly positive slope. In this case, the Trust pays dividends on the $50 million of Preferred Shares based on the lower short-term interest rates.At the same time, the securities purchased by the Trust with assets received from the Preferred Shares issuance earn income based on long-term interest rates. In this case, the dividends paid to holders of Preferred Shares (“Preferred Shareholders”) are significantly lower than the income earned on the Trust’s long-term investments, and therefore the Common Shareholders are the beneficiaries of the incremental net income.

If short-term interest rates rise, narrowing the differential between short-term and long-term interest rates, the incremental net income pickup on the Common Shares will be reduced or eliminated completely. Furthermore, if prevailing short-term interest rates rise above long-term interest rates of 6%, the yield curve has a negative slope. In this case, the Trust pays interest expense on the higher short-term interest rate whereas the Trust’s total portfolio earns income based on lower long-term interest rates.

Furthermore, the value of the Trusts’ portfolio investments generally varies inversely with the direction of long-term interest rates, although other factors can influence the value of portfolio investments. In contrast, the redemption value of the Trusts’ Preferred Shares and/or debt securities does not fluctuate in relation to interest rates. As a result, changes in interest rates can influence the Trusts’ NAV positively or negatively in addition to the impact on Trust performance from leverage from Preferred Shares discussed above.

The Trusts may also leverage their assets through the use of TOBs, as described in Note 1 of the Notes to Financial Statements. TOB investments generally will provide the Trusts with economic benefits in periods of declining short-term interest rates, but expose the Trusts to risks during periods of rising short-term interest rates similar to those associated with Preferred Shares issued by the Trusts, as described above. Additionally, fluctuations in the market value of municipal bonds deposited into the TOB may adversely affect each Trust’s NAV per share.

The use of leverage may enhance opportunities for increased returns to the Trusts and Common Shareholders, but as described above, it also creates risks as short or long-term interest rates fluctuate. Leverage also will generally cause greater changes in the Trusts’ NAVs, market prices and dividend rates than comparable portfolios without leverage. If the income derived from securities purchased with assets received from leverage exceeds the cost of leverage, each Trust’s net income will be greater than if leverage had not been used. Conversely, if the income from the securities purchased is not sufficient to cover the cost of leverage, the Trusts’ net income will be less than if leverage had not been used, and therefore the amount available for distribution to Common Shareholders will be reduced. Each Trust may be required to sell portfolio securities at inopportune times or at distressed values in order to comply with regulatory requirements applicable to the use of leverage or as required by the terms of leverage instruments, which may cause a Trust to incur losses. The use of leverage may limit each Trust’s ability to invest in certain types of securities or use certain types of hedging strategies, such as in the case of certain restrictions imposed by ratings agencies that rate Preferred Shares issued by the Trust. Each Trust will incur expenses in connection with the use of leverage, all of which are borne by the Common Shareholders and may reduce income to the Common Shares.

Under the Investment Company Act of 1940, the Trusts are permitted to issue Preferred Shares in an amount up to 50% of their total managed assets at the time of issuance. Under normal circumstances, each Trust anticipates that the total economic leverage from Preferred Shares and/or TOBs will not exceed 50% of its total managed assets at the time such leverage is incurred. As of February 28, 2011, the Trusts had economic leverage from Preferred Shares and/or TOBs as a percentage of their total managed assets as follows:

 

 

 

 

 






 

 

 

Percent of Leverage

 






BYM

 

 

39%

 

BAF

 

 

37%

 

BBK

 

 

38%

 

BIE

 

 

43%

 

BLE

 

 

38%

 

MFL

 

 

41%

 

MVF

 

 

43%

 







 


 

Derivative Financial Instruments

The Trusts may invest in various derivative instruments, including financial futures contracts, as specified in Note 2 of the Notes to Financial Statements, which may constitute forms of economic leverage. Such instruments are used to obtain exposure to a market without owning or taking physical custody of securities or to hedge market and/or interest rate risks. Such derivative instruments involve risks, including the imperfect correlation between the value of a derivative instrument and the underlying asset, possible default of the counterparty to the transaction or illiquidity of the derivative instrument. Each Trust’s ability to use a derivative instrument successfully depends on the investment advisor’s ability to predict pertinent market movements accurately, which cannot be assured. The use of derivative instruments may result in losses greater than if they had not been used, may require a Trust to sell or purchase portfolio investments at inopportune times or for distressed values, may limit the amount of appreciation a Trust can realize on an investment, may result in lower distributions paid to shareholders or may cause the Trusts to hold an investment that they might otherwise sell. The Trusts’ investments in these instruments are discussed in detail in the Notes to Financial Statements.

 

 

 


12

SEMI-ANNUAL REPORT

FEBRUARY 28, 2011




 

 


 

Schedule of Investments February 28, 2011 (Unaudited)

BlackRock Municipal Income Quality Trust (BYM)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

 

 

Par 

 

 

 

Municipal Bonds

 

(000)

 

Value

 









Alabama — 3.9%

 

 

 

 

 

 

 

Alabama State Docks Department, Refunding RB,
6.00%, 10/01/40

 

$

3,800

 

$

3,742,848

 

Birmingham Airport Authority, RB (AGM), 5.50%,
7/01/40

 

 

5,800

 

 

5,651,230

 

Birmingham Special Care Facilities Financing Authority,
RB, Children’s Hospital (AGC), 6.00%, 6/01/39

 

 

1,495

 

 

1,556,609

 

County of Jefferson Alabama, RB, Series A, 4.75%,
1/01/25

 

 

2,800

 

 

2,301,124

 

 

 

 

 

 




 

 

 

 

 

 

13,251,811

 









Arizona — 0.6%

 

 

 

 

 

 

 

State of Arizona, COP, Department of Administration,
Series A (AGM):

 

 

 

 

 

 

 

5.00%, 10/01/27

 

 

1,500

 

 

1,504,080

 

5.25%, 10/01/28

 

 

650

 

 

658,034

 

 

 

 

 

 




 

 

 

 

 

 

2,162,114

 









California — 30.1%

 

 

 

 

 

 

 

California Health Facilities Financing Authority,
Refunding RB, St. Joseph Health System, Series A,
5.75%, 7/01/39

 

 

625

 

 

625,356

 

California Infrastructure & Economic Development
Bank, RB, Bay Area Toll Bridges, First Lien, Series A
(AMBAC), 5.00%, 1/01/28 (a)

 

 

10,100

 

 

11,328,564

 

Coast Community College District California, GO,
Refunding, CAB, Election of 2002, Series C (AGM):

 

 

 

 

 

 

 

5.58%, 8/01/13 (b)

 

 

7,450

 

 

6,009,319

 

5.40%, 8/01/36 (c)

 

 

4,200

 

 

743,022

 

Fresno Unified School District California, GO, Election of
2001, Series E (AGM), 5.00%, 8/01/30

 

 

1,100

 

 

1,047,420

 

Golden State Tobacco Securitization Corp. California,
RB, Series 2003-A-1 (a):

 

 

 

 

 

 

 

6.63%, 6/01/13

 

 

6,500

 

 

7,320,560

 

6.75%, 6/01/13

 

 

14,500

 

 

16,370,790

 

Los Angeles Municipal Improvement Corp., RB, Series B1
(NPFGC), 4.75%, 8/01/37

 

 

4,000

 

 

3,406,840

 

Metropolitan Water District of Southern California, RB,
Series B-1 (NPFGC), 5.00%, 10/01/33

 

 

17,500

 

 

17,600,450

 

Monterey Peninsula Community College District, GO,
CAB, Series C (AGM) (c):

 

 

 

 

 

 

 

5.15%, 8/01/31

 

 

13,575

 

 

3,358,862

 

5.16%, 8/01/32

 

 

14,150

 

 

3,230,728

 

Orange County Sanitation District, COP, Series B (AGM),
5.00%, 2/01/31

 

 

2,500

 

 

2,526,700

 

Sacramento Unified School District California, GO,
Election of 2002 (NPFGC), 5.00%, 7/01/30

 

 

2,700

 

 

2,666,871

 


 

 

 

 

 

 

 

 

 

 

Par 

 

 

 

 

Municipal Bonds

 

(000)

 

Value

 









California (concluded)

 

 

 

 

 

 

 

San Diego Unified School District California, GO, CAB,
Election of 2008, Series C, 6.86%, 7/01/38 (c)

 

$

2,000

 

$

329,980

 

San Francisco City & County Public Utilities Commission,
Refunding RB, Series A (AGM), 5.00%, 11/01/31

 

 

15,000

 

 

15,007,800

 

San Joaquin Hills Transportation Corridor Agency
California, Refunding RB, CAB, Series A (NPFGC),
5.50%, 1/15/31 (c)

 

 

53,000

 

 

9,086,850

 

San Jose Unified School District Santa Clara County
California, GO, Election of 2002, Series B (NPFGC),
5.00%, 8/01/29

 

 

2,350

 

 

2,359,165

 

 

 

 

 

 




 

 

 

 

 

 

103,019,277

 









Colorado — 0.3%

 

 

 

 

 

 

 

Regional Transportation District, COP, Series A,
5.38%, 6/01/31

 

 

960

 

 

965,126

 









District of Columbia — 2.6%

 

 

 

 

 

 

 

District of Columbia Tobacco Settlement Financing
Corp., Refunding RB, Asset-Backed, 6.75%, 5/15/40

 

 

9,500

 

 

8,925,250

 









Florida — 14.6%

 

 

 

 

 

 

 

Broward County School Board Florida, COP, Series A
(AGM), 5.25%, 7/01/33

 

 

2,000

 

 

1,896,600

 

City of Tallahassee Florida, RB (NPFGC), 5.00%,
10/01/32

 

 

3,000

 

 

2,918,760

 

County of Broward Florida, RB, Series A, 5.25%,
10/01/34

 

 

5,950

 

 

5,986,712

 

County of Duval Florida, COP, Master Lease Program
(AGM), 5.00%, 7/01/33

 

 

2,800

 

 

2,631,272

 

County of Miami-Dade Florida, RB:

 

 

 

 

 

 

 

CAB, Sub-Series A (NPFGC), 5.25%, 10/01/38 (c)

 

 

25,520

 

 

3,538,858

 

Jackson Health System (AGC), 5.75%, 6/01/39

 

 

2,300

 

 

2,321,735

 

Water & Sewer System (AGM), 5.00%, 10/01/39

 

 

10,100

 

 

9,584,799

 

County of Miami-Dade Florida, Refunding RB (AGM),
5.00%, 7/01/35

 

 

1,300

 

 

1,231,620

 

Florida Housing Finance Corp., RB, Homeowner
Mortgage, Series 3 (Ginnie Mae), 5.45%, 7/01/33

 

 

4,020

 

 

4,039,055

 

Florida State Department of Environmental Protection,
RB, Series B (NPFGC), 5.00%, 7/01/27

 

 

7,500

 

 

7,582,200

 

Miami-Dade County School Board, COP, Refunding,
Series B (AGC), 5.25%, 5/01/31

 

 

2,385

 

 

2,401,814

 

Orange County School Board, COP, Series A (AGC),
5.50%, 8/01/34

 

 

5,590

 

 

5,604,702

 

Sarasota County Public Hospital District, RB, Sarasota
Memorial Hospital Project, Series A, 5.63%, 7/01/39

 

 

300

 

 

297,663

 

 

 

 

 

 




 

 

 

 

 

 

50,035,790

 










 


Portfolio Abbreviations


To simplify the listings of portfolio holdings in the Schedules of Investments, the names and descriptions of many of the securities have been abbreviated according to the following list:

 

 

ACA

ACA Financial Guaranty Corp.

AGC

Assured Guaranty Corp.

AGM

Assured Guaranty Municipal Corp.

AMBAC

American Municipal Bond Assurance Corp.

AMT

Alternative Minimum Tax (subject to)

ARB

Airport Revenue Bonds

BHAC

Berkshire Hathaway Assurance Corp.

CAB

Capital Appreciation Bonds

CIFG

CDC IXIS Financial Guaranty

COP

Certificates of Participation

EDA

Economic Development Authority

EDC

Economic Development Corp.

ERB

Education Revenue Bonds

FHA

Federal Housing Administration

GARB

General Airport Revenue Bonds

GO

General Obligation Bonds

HDA

Housing Development Authority

HFA

Housing Finance Agency

HRB

Housing Revenue Bonds

IDA

Industrial Development Authority

IDB

Industrial Development Board

IDRB

Industrial Development Revenue Bonds

ISD

Independent School District

MRB

Mortgage Revenue Bonds

NPFGC

National Public Finance Guarantee Corp.

PILOT

Payment in Lieu of Taxes

PSF-GTD

Permanent School Fund Guaranteed

RB

Revenue Bonds

SBPA

Stand-by Bond Purchase Agreement

S/F

Single-Family

VRDN

Variable Rate Demand Notes


 

 

 

 

See Notes to Financial Statements.

 

 





 

SEMI-ANNUAL REPORT

FEBRUARY 28, 2011

13




 

 


Schedule of Investments (continued)

BlackRock Municipal Income Quality Trust (BYM)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

 

 

Par 

 

 

 

Municipal Bonds

 

(000)

 

Value

 









Georgia — 2.6%

 

 

 

 

 

 

 

City of Atlanta Georgia, Refunding RB, General, Series C,
6.00%, 1/01/30

 

$

7,500

 

$

8,155,875

 

Gwinnett County Hospital Authority, Refunding RB,
Gwinnett Hospital System, Series D (AGM), 5.50%,
7/01/41

 

 

900

 

 

853,002

 

 

 

 

 

 




 

 

 

 

 

 

9,008,877

 









Hawaii — 1.4%

 

 

 

 

 

 

 

Hawaii State Harbor, RB, Series A, 5.50%, 7/01/35

 

 

5,000

 

 

4,843,250

 









Illinois — 5.3%

 

 

 

 

 

 

 

Chicago Board of Education Illinois, GO, Refunding,
Chicago School Reform Board, Series A (NPFGC),
5.50%, 12/01/26

 

 

2,500

 

 

2,550,050

 

Chicago Park District, GO, Harbor Facilities, Series C,
5.25%, 1/01/40

 

 

600

 

 

584,304

 

City of Chicago Illinois, RB, Series A (AGC), 5.00%,
1/01/38

 

 

7,310

 

 

6,838,651

 

County of Cook Illinois, GO, Refunding, Series A,
5.25%, 11/15/33

 

 

1,475

 

 

1,449,911

 

Illinois Municipal Electric Agency, RB, Series A (NPFGC),
5.25%, 2/01/27

 

 

4,800

 

 

4,853,328

 

Railsplitter Tobacco Settlement Authority, RB, 6.00%,
6/01/28

 

 

710

 

 

693,535

 

State of Illinois, RB, Build Illinois, Series B, 5.25%,
6/15/34

 

 

1,400

 

 

1,350,664

 

 

 

 

 

 




 

 

 

 

 

 

18,320,443

 









Indiana — 2.1%

 

 

 

 

 

 

 

Indiana Municipal Power Agency, RB:

 

 

 

 

 

 

 

Series A (NPFGC), 5.00%, 1/01/37

 

 

2,050

 

 

1,901,355

 

Series B, 5.75%, 1/01/34

 

 

450

 

 

453,591

 

Indianapolis Local Public Improvement Bond Bank,
Refunding RB, Waterworks Project, Series A:

 

 

 

 

 

 

 

(AGC), 5.50%, 1/01/38

 

 

2,000

 

 

2,051,020

 

(NPFGC), 5.50%, 7/01/20

 

 

2,630

 

 

2,912,146

 

 

 

 

 

 




 

 

 

 

 

 

7,318,112

 









Iowa — 1.5%

 

 

 

 

 

 

 

Iowa Finance Authority, RB, Series A (AGC), 5.63%,
8/15/37

 

 

5,000

 

 

5,011,550

 









Kentucky — 0.5%

 

 

 

 

 

 

 

Kentucky State Property & Buildings Commission,
Refunding RB, Project No. 93 (AGC), 5.25%, 2/01/29

 

 

1,500

 

 

1,537,050

 









Louisiana — 2.2%

 

 

 

 

 

 

 

State of Louisiana, RB, Series A (AGM), 5.00%, 5/01/31

 

 

7,500

 

 

7,557,225

 









Michigan — 2.8%

 

 

 

 

 

 

 

City of Detroit Michigan, RB:

 

 

 

 

 

 

 

Senior Lien, Series A (NPFGC), 5.00%, 7/01/30

 

 

1,000

 

 

903,330

 

Senior Lien, Series A (NPFGC), 5.00%, 7/01/34

 

 

2,480

 

 

2,263,223

 

System, Second Lien, Series A (BHAC), 5.50%,
7/01/36

 

 

2,900

 

 

2,856,906

 

System, Second Lien, Series B (NPFGC), 5.00%,
7/01/36

 

 

100

 

 

87,876

 

City of Detroit Michigan, Refunding RB, Second Lien,
Series E (BHAC), 5.75%, 7/01/31

 

 

3,000

 

 

3,048,180

 

Kalamazoo Hospital Finance Authority, RB, Bronson
Methodist Hospital (AGM), 5.25%, 5/15/36

 

 

465

 

 

427,265

 

 

 

 

 

 




 

 

 

 

 

 

9,586,780

 









Nebraska — 1.3%

 

 

 

 

 

 

 

Nebraska Investment Finance Authority, Refunding RB,
Series A:

 

 

 

 

 

 

 

5.90%, 9/01/36

 

 

2,450

 

 

2,507,232

 

6.05%, 9/01/41

 

 

1,860

 

 

1,882,766

 

 

 

 

 

 




 

 

 

 

 

 

4,389,998

 










 

 

 

 

 

 

 

 

 

 

Par 

 

 

 

Municipal Bonds

 

(000)

 

Value

 









Nevada — 1.6%

 

 

 

 

 

 

 

County of Clark Nevada, RB:

 

 

 

 

 

 

 

Las Vegas-McCarran International Airport, Series A
(AGC), 5.25%, 7/01/39

 

$

4,100

 

$

3,841,823

 

System, Subordinate Lien, Series C (AGM),
5.00%, 7/01/26

 

 

1,650

 

 

1,625,580

 

 

 

 

 

 




 

 

 

 

 

 

5,467,403

 









New York — 2.4%

 

 

 

 

 

 

 

New York City Transitional Finance Authority, RB, Fiscal
2009, Series S-4, 5.50%, 1/15/33

 

 

1,950

 

 

2,002,533

 

New York State Dormitory Authority, ERB, Series B,
5.75%, 3/15/36

 

 

1,300

 

 

1,383,382

 

Port Authority of New York & New Jersey, Refunding RB,
Consolidated, 140th Series, 5.00%, 12/01/34

 

 

5,000

 

 

4,965,250

 

 

 

 

 

 




 

 

 

 

 

 

8,351,165

 









North Carolina — 0.7%

 

 

 

 

 

 

 

North Carolina Medical Care Commission, RB, Novant
Health Obligation, Series A, 4.75%, 11/01/43

 

 

2,875

 

 

2,438,345

 









Ohio — 0.5%

 

 

 

 

 

 

 

County of Lucas Ohio, Refunding RB, Promedica
Healthcare, Series A, 6.50%, 11/15/37

 

 

610

 

 

645,649

 

Ohio Higher Educational Facility Commission,
Refunding RB, Summa Health System, 2010 Project
(AGC), 5.25%, 11/15/40

 

 

1,125

 

 

1,042,661

 

 

 

 

 

 




 

 

 

 

 

 

1,688,310

 









Puerto Rico — 1.6%

 

 

 

 

 

 

 

Puerto Rico Sales Tax Financing Corp., RB, First
Sub-Series A, 6.38%, 8/01/39

 

 

5,300

 

 

5,486,295

 









Rhode Island — 0.8%

 

 

 

 

 

 

 

Rhode Island Health & Educational Building Corp.,
Refunding RB, Public Schools Financing Program,
Series E (AGC), 6.00%, 5/15/29

 

 

2,625

 

 

2,799,825

 









South Carolina — 1.4%

 

 

 

 

 

 

 

South Carolina State Ports Authority, RB, 5.25%,
7/01/40

 

 

5,000

 

 

4,854,000

 









Tennessee — 4.1%

 

 

 

 

 

 

 

Knox County Health Educational & Housing Facilities
Board Tennessee, Refunding RB, CAB, Series A (AGM) (c):

 

 

 

 

 

 

 

5.88%, 1/01/23

 

 

9,260

 

 

4,757,418

 

5.90%, 1/01/24

 

 

8,500

 

 

4,101,930

 

5.91%, 1/01/25

 

 

6,850

 

 

3,108,119

 

5.93%, 1/01/26

 

 

5,000

 

 

2,125,000

 

 

 

 

 

 




 

 

 

 

 

 

14,092,467

 









Texas — 27.8%

 

 

 

 

 

 

 

City of Houston Texas, RB, Senior Lien, Series A,
5.50%, 7/01/34

 

 

4,165

 

 

4,199,694

 

City of San Antonio Texas, Refunding RB (NPFGC):

 

 

 

 

 

 

 

5.13%, 5/15/29

 

 

9,250

 

 

9,296,805

 

5.13%, 5/15/34

 

 

10,000

 

 

10,030,000

 

Comal ISD, GO, School Building (PSF-GTD), 5.00%,
2/01/36

 

 

2,500

 

 

2,525,975

 

Coppell ISD Texas, GO, Refunding, CAB (PSF-GTD),
5.64%, 8/15/30 (c)

 

 

10,030

 

 

3,792,243

 

County of Harris Texas, GO (NPFGC) (c):

 

 

 

 

 

 

 

5.57%, 8/15/25

 

 

7,485

 

 

3,936,811

 

5.60%, 8/15/28

 

 

10,915

 

 

4,742,895

 

County of Harris Texas, Refunding RB, Senior Lien,
Toll Road (AGM), 5.00%, 8/15/30

 

 

5,510

 

 

5,515,290

 

Harris County-Houston Sports Authority, Refunding RB
(NPFGC) (c):

 

 

 

 

 

 

 

CAB, Junior Lien, Series H, 5.93%, 11/15/38

 

 

5,785

 

 

593,830

 

CAB, Junior Lien, Series H, 5.94%, 11/15/39

 

 

6,160

 

 

582,490

 

Third Lien, Series A-3, 5.97%, 11/15/38

 

 

26,890

 

 

2,687,924

 

Third Lien, Series A-3, 5.98%, 11/15/39

 

 

27,675

 

 

2,559,937

 


 

 

 

See Notes to Financial Statements.

 




14

SEMI-ANNUAL REPORT

FEBRUARY 28, 2011




 

 


 

Schedule of Investments (continued)

BlackRock Municipal Income Quality Trust (BYM)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par 
(000)

 

Value

 







Texas (concluded)

 

 

 

 

 

 

 

Lewisville ISD Texas, GO, Refunding, CAB, School
Building (NPFGC), 4.67%, 8/15/24 (c)

 

$

3,815

 

$

1,947,214

 

Mansfield ISD Texas, GO, School Building (PSF-GTD),
5.00%, 2/15/33

 

 

2,980

 

 

3,050,864

 

North Texas Tollway Authority, Refunding RB, First Tier:

 

 

 

 

 

 

 

Series A, 6.00%, 1/01/28

 

 

625

 

 

655,994

 

System, (NPFGC), 5.75%, 1/01/40

 

 

23,050

 

 

22,019,204

 

Texas State Turnpike Authority, RB, First Tier, Series A
(AMBAC), 5.00%, 8/15/42

 

 

20,000

 

 

17,085,400

 

 

 

 

 

 




 

 

 

 

 

 

95,222,570

 









Washington — 5.2%

 

 

 

 

 

 

 

Chelan County Public Utility District No. 1, RB, Chelan
Hydro System, Series C (AMBAC), 5.13%, 7/01/33

 

 

3,655

 

 

3,657,339

 

County of King Washington, Refunding RB (AGM),
5.00%, 1/01/36

 

 

2,200

 

 

2,184,380

 

Port of Seattle Washington, RB, Series A (NPFGC),
5.00%, 4/01/31

 

 

4,500

 

 

4,460,400

 

Washington Health Care Facilities Authority, RB:

 

 

 

 

 

 

 

MultiCare Health Care, Series C (AGC), 5.50%,
8/15/43

 

 

6,400

 

 

6,120,512

 

Providence Health & Services, Series A, 5.00%,
10/01/39

 

 

1,000

 

 

885,110

 

Providence Health & Services, Series A, 5.25%,
10/01/39

 

 

675

 

 

620,798

 

 

 

 

 

 



 

 

 

 

 

 

 

17,928,539

 









Wisconsin — 0.4%

 

 

 

 

 

 

 

Wisconsin Health & Educational Facilities Authority, RB,

 

 

 

 

 

 

 

Ascension Health Senior Credit Group, 5.00%,

 

 

 

 

 

 

 

11/15/33

 

 

1,500

 

 

1,381,380

 









Total Municipal Bonds — 118.3%

 

 

 

 

 

405,642,952

 










 

 

 

 

 

 

 

 









 

Municipal Bonds Transferred to
Tender Option Bond Trusts (d)

 

 

 

 

 

 

 









Arizona — 0.4%

 

 

 

 

 

 

 

Phoenix Civic Improvement Corp., RB, Junior Lien,
Series A, 5.00%, 7/01/34

 

 

1,300

 

 

1,311,388

 









California — 10.9%

 

 

 

 

 

 

 

California State University, RB, Systemwide, Series A
(AGM), 5.00%, 11/01/33

 

 

3,379

 

 

3,202,755

 

California State University, Refunding RB, Systemwide,
Series A (AGM), 5.00%, 11/01/32

 

 

8,000

 

 

7,682,320

 

Foothill-De Anza Community College District, GO,
Election of 1999, Series C (NPFGC), 5.00%, 8/01/36

 

 

7,500

 

 

7,320,450

 

Los Angeles Community College District California, GO,
Election of 2001, Series A (AGM), 5.00%, 8/01/32

 

 

5,000

 

 

4,890,450

 

San Diego Community College District California, GO,
Election of 2002, 5.25%, 8/01/33

 

 

449

 

 

452,607

 

San Diego County Water Authority, COP, Refunding,
Series 2008-A (AGM), 5.00%, 5/01/33

 

 

4,870

 

 

4,736,075

 

University of California, RB, Series C (NPFGC), 4.75%,
5/15/37

 

 

10,000

 

 

8,964,400

 

 

 

 

 

 



 

 

 

 

 

 

 

37,249,057

 









District of Columbia — 0.3%

 

 

 

 

 

 

 

District of Columbia, RB, Series A, 5.50%, 12/01/30

 

 

1,080

 

 

1,162,242

 










 

 

 

 

 

 

 

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (d)

 

Par 
(000)

 

Value

 







Florida — 4.0%

 

 

 

 

 

 

 

City of Tallahassee Florida, RB (NPFGC), 5.00%,
10/01/37

 

$

5,000

 

$

4,787,150

 

Florida State Board of Education, GO, Series D,
5.00%, 6/01/37

 

 

2,999

 

 

2,994,075

 

 

 

 

 

 

 

 

 

Orange County School Board, COP, Series A (NPFGC),
5.00%, 8/01/30

 

 

6,000

 

 

5,911,800

 

 

 

 

 

 




 

 

 

 

 

 

13,693,025

 









Hawaii — 2.9%

 

 

 

 

 

 

 

Honolulu City & County Board of Water Supply, RB,

 

 

 

 

 

 

 

Series A (NPFGC), 5.00%, 7/01/33

 

 

10,000

 

 

10,042,100

 









Illinois — 8.2%

 

 

 

 

 

 

 

Illinois State Toll Highway Authority, RB, Series B,
5.50%, 1/01/33

 

 

4,499

 

 

4,514,114

 

Metropolitan Pier & Exposition Authority, RB, McCormick
Place Expansion Project, Series A (NPFGC),
5.00%, 12/15/28

 

 

24,010

 

 

23,564,375

 

 

 

 

 

 




 

 

 

 

 

 

28,078,489

 









Massachusetts — 3.8%

 

 

 

 

 

 

 

Massachusetts School Building Authority, RB, Series A
(AGM), 5.00%, 8/15/30

 

 

12,987

 

 

13,158,069

 









Nevada — 1.9%

 

 

 

 

 

 

 

City of Las Vegas Nevada, GO, Limited Tax, Performing
Arts Center, 6.00%, 4/01/39

 

 

4,197

 

 

4,391,419

 

Clark County Water Reclamation District, GO, Series B,
5.75%, 7/01/34

 

 

2,024

 

 

2,157,979

 

 

 

 

 

 




 

 

 

 

 

 

6,549,398

 









New York — 4.8%

 

 

 

 

 

 

 

Erie County Industrial Development Agency, RB, City
School District of Buffalo Project, Series A (AGM),
5.75%, 5/01/28

 

 

4,494

 

 

4,801,911

 

Metropolitan Transportation Authority, RB, Series A
(NPFGC), 5.00%, 11/15/31

 

 

7,002

 

 

6,992,433

 

Triborough Bridge & Tunnel Authority, RB, General,
Series A-2, 5.25%, 11/15/34

 

 

4,500

 

 

4,559,445

 

 

 

 

 

 




 

 

 

 

 

 

16,353,789

 









Ohio — 0.2%

 

 

 

 

 

 

 

State of Ohio, RB, Cleveland Clinic Health, Series B,
5.50%, 1/01/34

 

 

620

 

 

620,732

 









South Carolina — 0.2%

 

 

 

 

 

 

 

South Carolina State Public Service Authority, RB,
Santee Cooper, Series A, 5.50%, 1/01/38

 

 

600

 

 

621,978

 









Texas — 2.8%

 

 

 

 

 

 

 

Northside ISD Texas, GO, School Building (PSF-GTD),
5.13%, 6/15/29

 

 

9,500

 

 

9,755,913

 









Utah — 1.5%

 

 

 

 

 

 

 

Utah Transit Authority, RB, Series A (AGM), 5.00%,
6/15/36

 

 

5,000

 

 

5,014,800

 









Virginia — 0.1%

 

 

 

 

 

 

 

Fairfax County IDA Virginia, Refunding RB, Health Care,
Inova Health System, Series A, 5.50%, 5/15/35

 

 

400

 

 

403,364

 









Washington — 1.0%

 

 

 

 

 

 

 

Central Puget Sound Regional Transit Authority, RB,
Series A (AGM), 5.00%, 11/01/32

 

 

3,494

 

 

3,529,596

 









Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 43.0%

 

 

 

 

 

147,543,940

 









Total Long-Term Investments
(Cost — $576,752,468) — 161.3%

 

 

 

 

 

553,186,892

 










 

 

 

 

See Notes to Financial Statements.

 

 


 

SEMI-ANNUAL REPORT

FEBRUARY 28, 2011

15




 

 


 

Schedule of Investments (concluded)

BlackRock Municipal Income Quality Trust (BYM)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Short-Term Securities

 

Par 
(000)

 

Value

 







New York — 0.5%

 

 

 

 

 

 

 

City of New York New York, GO, VRDN, Sub-Series A-6
(AGM Insurance, Dexia Credit Local SBPA), 0.23%,
3/01/11 (e)

 

$

1,700

 

$

1,700,000

 










 

 

 

 

 

 

 

 

 

 

Shares

 

 

 


Money Market Fund — 0.7%

 

 

 

 

 

 

 

FFI Institutional Tax-Exempt Fund, 0.13% (f)(g)

 

 

2,376,259

 

 

2,376,259

 









Total Short-Term Securities

 

 

 

 

 

 

 

(Cost — $4,076,259) — 1.2%

 

 

 

 

 

4,076,259

 









Total Investments (Cost — $580,828,727*) — 162.5%

 

 

 

 

 

557,263,151

 

Other Assets Less Liabilities — 1.1%

 

 

 

 

 

3,821,897

 

Liability for Trust Certificates, Including
Interest Expense and Fees Payable — (23.6)%

 

 

 

 

 

(80,966,277

)

Preferred Shares, at Redemption Value — (40.0)%

 

 

 

 

 

(137,256,220

)

 

 

 

 

 




Net Assets Applicable to Common Shares — 100.0%

 

 

 

 

$

342,862,551

 

 

 

 

 

 













 

 

*

The cost and unrealized appreciation (depreciation) of investments as of February 28, 2011, as computed for federal income tax purposes, were as follows:

 

 

 

 

 

 

 

Aggregate cost

 

$

500,494,695

 

 

 




Gross unrealized appreciation

 

$

10,332,280

 

Gross unrealized depreciation

 

 

(34,478,336

)

 

 




Net unrealized depreciation

 

$

(24,146,056

)

 

 





 

 

(a)

US government securities, held in escrow, are used to pay interest on this security as well as to retire the bond in full at the date indicated, typically at a premium to par.

 

 

(b)

Represents a step-up bond that pays an initial coupon rate for the first period and then a higher coupon rate for the following periods. Rate shown reflects the current yield as of report date.

 

 

(c)

Represents a zero-coupon bond. Rate shown reflects the current yield as of report date.

 

 

(d)

Securities represent bonds transferred to a TOB in exchange for which the Trust acquired residual interest certificates. These securities serve as collateral in a financing transaction. See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs.

 

 

(e)

Variable rate security. Rate shown is as of report date and maturity shown is the date the principal owed can be recovered through demand.

 

 

(f)

Investments in companies considered to be an affiliate of the Trust during the period, for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:


 

 

 

 

 

 

 

 

 

 

 

 

 

 











Affiliate

 

Shares Held at
August 31,
2010

 

Net
Activity

 

Shares Held at
February 28,
2011

 

Income

 











FFI Institutional
Tax-Exempt Fund

 

 

9,416,737

 

 

(7,040,478

)

 

2,376,259

 

$

6,948

 
















 

 

(g)

Represents the current yield as of report date.

 

Financial futures contracts sold as of February 28, 2011 were as follows:


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 













Contracts

 

Issue

 

Exchange

 

Expiration

 

Notional
Value

 

Unrealized
Depreciation

 













195

 

 

10-Year U.S. Treasury Note

 

 

Chicago
Board of Trade

 

 

June
2011

 

$

23,110,176

 

$

(103,964

)



















 

 

Fair Value Measurements — Various inputs are used in determining the fair value of investments and derivatives. These inputs are summarized in three broad levels for financial statement purposes as follows:

 

 

 

 

Level 1 — price quotations in active markets/exchanges for identical assets and liabilities

 

 

Level 2 — other observable inputs (including, but not limited to: quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs)

 

 

Level 3 — unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the Trust’s own assumptions used in determining the fair value of investments and derivatives)

The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. For information about the Trust’s policy regarding valuation of investments and derivatives and other significant accounting policies, please refer to Note 1 of the Notes to Financial Statements.

The following tables summarize the inputs used as of February 28, 2011 in determining the fair valuation of the Trust’s investments and derivatives:

 

 

 

 

 

 

 

 

 

 

 

 

 

 











Valuation Inputs

 

Level 1

 

Level 2

 

Level 3

 

Total

 











Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments in
Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-Term
Investments1

 

 

 

$

553,186,892

 

 

 

$

553,186,892

 

Short-Term
Securities

 

$

2,376,259

 

 

1,700,000

 

 

 

 

4,076,259

 

 

 













Total

 

$

2,376,259

 

$

554,886,892

 

 

 

$

557,263,151

 

 

 














 

 

1

See above Schedule of Investments for values in each state or political subdivision.


 

 

 

 

 

 

 

 

 

 

 

 

 

 















 

 

Derivative Financial Instruments2

 











Valuation Inputs

 

Level 1

 

Level 2

 

Level 3

 

Total

 











Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate
contracts

 

$

(103,964

)

 

 

 

 

$

(103,964

)

 

 














 

 

2

Derivative financial instruments are financial futures contracts, which are shown at the unrealized appreciation/depreciation on the instrument.


 

 

 

See Notes to Financial Statements.

 

 




16

SEMI-ANNUAL REPORT

FEBRUARY 28, 2011




 

 


 

 

Schedule of Investments February 28, 2011 (Unaudited)

BlackRock Municipal Income Investment Quality Trust (BAF)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par 
(000)

 

Value

 







Alabama — 2.2%

 

 

 

 

 

 

 

Birmingham Airport Authority, RB (AGM), 5.00%,
7/01/25

 

$

520

 

$

522,662

 

Birmingham Special Care Facilities Financing Authority,
RB, Children’s Hospital (AGC):

 

 

 

 

 

 

 

6.13%, 6/01/34

 

 

1,000

 

 

1,059,990

 

6.00%, 6/01/39

 

 

1,000

 

 

1,041,210

 

 

 

 

 

 




 

 

 

 

 

 

2,623,862

 









Arizona — 0.4%

 

 

 

 

 

 

 

State of Arizona, COP, Department of Administration,
Series A (AGM), 5.25%, 10/01/28

 

 

465

 

 

470,747

 









California — 12.3%

 

 

 

 

 

 

 

California Educational Facilities Authority, RB, University
of Southern California, Series A, 5.25%, 10/01/38

 

 

2,155

 

 

2,179,093

 

California Health Facilities Financing Authority,
Refunding RB, Sutter Health, Series B, 6.00%,
8/15/42

 

 

1,120

 

 

1,109,024

 

County of Sacramento California, RB, Senior Series A
(AGC), 5.50%, 7/01/41

 

 

1,400

 

 

1,373,554

 

Los Angeles Community College District California, GO:

 

 

 

 

 

 

 

Election of 2001, Series A (NPFGC), 5.00%,
8/01/32

 

 

1,000

 

 

975,560

 

Election of 2008, Series C, 5.25%, 8/01/39

 

 

1,000

 

 

985,430

 

Los Angeles Department of Water & Power, RB, Power
System, Sub-Series A-1, 5.25%, 7/01/38

 

 

1,175

 

 

1,163,132

 

Los Angeles Municipal Improvement Corp., Refunding
RB, Real Property, Series B (AGC), 5.50%, 4/01/39

 

 

3,810

 

 

3,693,300

 

Oxnard Union High School District, GO, Refunding,
Election of 2004, Series A (AGM), 5.00%, 8/01/40

 

 

1,000

 

 

890,240

 

San Diego Public Facilities Financing Authority,
Refunding RB, Series B (AGC), 5.38%, 8/01/34

 

 

1,125

 

 

1,145,160

 

San Jacinto Unified School District, GO, Election of
2006 (AGM), 5.25%, 8/01/32

 

 

1,000

 

 

968,710

 

 

 

 

 

 




 

 

 

 

 

 

14,483,203

 









Colorado — 1.6%

 

 

 

 

 

 

 

Colorado Health Facilities Authority, RB, Hospital,
NCMC Inc. Project, Series B (AGM), 6.00%, 5/15/26

 

 

1,425

 

 

1,531,818

 

Regional Transportation District, COP, Series A, 5.00%,
6/01/25

 

 

300

 

 

300,417

 

 

 

 

 

 




 

 

 

 

 

 

1,832,235

 









Florida — 12.6%

 

 

 

 

 

 

 

City of Jacksonville Florida, RB (NPFGC), 5.00%,
10/01/31

 

 

5,000

 

 

4,968,000

 

City of Miami Florida, RB (NPFGC), 5.25%, 1/01/28

 

 

1,660

 

 

1,664,615

 

Village Center Community Development District, RB,
Series A (NPFGC), 5.00%, 11/01/32

 

 

10,000

 

 

8,178,100

 

 

 

 

 

 




 

 

 

 

 

 

14,810,715

 









Georgia — 4.2%

 

 

 

 

 

 

 

Augusta-Richmond County Georgia, RB (AGM), 5.25%,
10/01/39

 

 

1,000

 

 

1,000,600

 

City of Atlanta Georgia, Refunding RB, General, Series C,
6.00%, 1/01/30

 

 

2,500

 

 

2,718,625

 

Gwinnett County Hospital Authority, Refunding RB,
Gwinnett Hospital System, Series D (AGM), 5.50%,
7/01/41

 

 

1,350

 

 

1,279,503

 

 

 

 

 

 




 

 

 

 

 

 

4,998,728

 










 

 

 

 

 

 

 

 

Municipal Bonds

 

Par 
(000)

 

Value

 







Illinois — 11.5%

 

 

 

 

 

 

 

Chicago Board of Education Illinois, GO, Refunding,

 

 

 

 

 

 

 

Chicago School Reform Board, Series A (NPFGC),
5.50%, 12/01/26

 

$

745

 

$

759,915

 

Chicago Transit Authority, RB, Federal Transit

 

 

 

 

 

 

 

Administration Section 5309, Series A (AGC),
6.00%, 6/01/26

 

 

1,300

 

 

1,405,196

 

City of Chicago Illinois, GO, Refunding, Projects,
Series A (AGM):

 

 

 

 

 

 

 

5.00%, 1/01/29

 

 

1,425

 

 

1,353,878

 

5.00%, 1/01/30

 

 

570

 

 

538,057

 

City of Chicago Illinois, RB, General, Third Lien,
Series C (AGM):

 

 

 

 

 

 

 

5.25%, 1/01/30

 

 

1,000

 

 

1,001,330

 

5.25%, 1/01/35

 

 

820

 

 

798,196

 

City of Chicago Illinois, Refunding RB, Second Lien
(NPFGC), 5.50%, 1/01/30

 

 

1,000

 

 

1,023,080

 

Illinois Municipal Electric Agency, RB, Series A (NPFGC):

 

 

 

 

 

 

 

5.25%, 2/01/28

 

 

1,560

 

 

1,572,558

 

5.25%, 2/01/35

 

 

1,250

 

 

1,216,750

 

Railsplitter Tobacco Settlement Authority, RB:

 

 

 

 

 

 

 

5.50%, 6/01/23

 

 

915

 

 

874,072

 

6.00%, 6/01/28

 

 

260

 

 

253,971

 

State of Illinois, RB:

 

 

 

 

 

 

 

(AGM), 5.00%, 6/15/27

 

 

1,000

 

 

996,620

 

Build Illinois, Series B, 5.25%, 6/15/28

 

 

1,750

 

 

1,762,723

 

 

 

 

 

 




 

 

 

 

 

 

13,556,346

 









Indiana — 4.2%

 

 

 

 

 

 

 

Indiana Finance Authority, Refunding RB, Trinity Health,
Series B, 4.50%, 12/01/37

 

 

3,000

 

 

2,451,960

 

Indianapolis Local Public Improvement Bond Bank,

 

 

 

 

 

 

 

Refunding RB, Waterworks Project, Series A (AGC),
5.50%, 1/01/38

 

 

2,415

 

 

2,476,607

 

 

 

 

 

 




 

 

 

 

 

 

4,928,567

 









Iowa — 0.9%

 

 

 

 

 

 

 

Iowa Finance Authority, Refunding RB, Iowa Health
System (AGC), 5.25%, 2/15/29

 

 

1,125

 

 

1,110,814

 









Louisiana — 4.7%

 

 

 

 

 

 

 

East Baton Rouge Sewerage Commission, RB, Series A,
5.25%, 2/01/39

 

 

2,250

 

 

2,257,132

 

Louisiana State Citizens Property Insurance Corp., RB,
Series C-3 (AGC), 6.13%, 6/01/25

 

 

2,510

 

 

2,748,425

 

New Orleans Aviation Board Louisiana, Refunding GARB,
Restructuring (AGC):

 

 

 

 

 

 

 

Series A-1, 6.00%, 1/01/23

 

 

375

 

 

414,143

 

Series A-2, 6.00%, 1/01/23

 

 

150

 

 

165,657

 

 

 

 

 

 




 

 

 

 

 

 

5,585,357

 









Maine — 0.9%

 

 

 

 

 

 

 

City of Portland Maine, RB, General (AGM), 5.25%,
1/01/35

 

 

1,095

 

 

1,091,967

 









Michigan — 16.6%

 

 

 

 

 

 

 

City of Detroit Michigan, RB:

 

 

 

 

 

 

 

Second Lien, Series B (AGM), 6.25%, 7/01/36

 

 

1,700

 

 

1,804,074

 

Second Lien, Series B (AGM), 7.00%, 7/01/36

 

 

200

 

 

223,666

 

Second Lien, Series B (NPFGC), 5.50%, 7/01/29

 

 

1,790

 

 

1,731,020

 

Senior Lien, Series B (AGM), 7.50%, 7/01/33

 

 

1,500

 

 

1,772,175

 

Senior Lien, Series B (BHAC), 5.50%, 7/01/35

 

 

4,750

 

 

4,724,398

 

System, Second Lien, Series A (BHAC), 5.50%,
7/01/36

 

 

2,330

 

 

2,295,376

 

City of Detroit Michigan, Refunding RB, Second Lien:

 

 

 

 

 

 

 

Series C-1 (AGM), 7.00%, 7/01/27

 

 

1,800

 

 

2,069,424

 

Series E (BHAC), 5.75%, 7/01/31

 

 

2,300

 

 

2,336,938

 

Michigan State Building Authority, RB, Facilities Program,
Series H (AGM), 5.00%, 10/15/26

 

 

365

 

 

365,485

 


 

 

 

 

See Notes to Financial Statements.


 

SEMI-ANNUAL REPORT

FEBRUARY 28, 2011

17



 

 


 

Schedule of Investments (continued)

BlackRock Municipal Income Investment Quality Trust (BAF)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par 
(000)

 

Value

 







Michigan (concluded)

 

 

 

 

 

 

 

Michigan State Building Authority, Refunding RB,
Facilities Program, Series I (AGC):

 

 

 

 

 

 

 

5.25%, 10/15/24

 

$

565

 

$

584,374

 

5.25%, 10/15/25

 

 

300

 

 

306,495

 

Royal Oak Hospital Finance Authority Michigan,
Refunding RB, William Beaumont Hospital, 8.25%,
9/01/39

 

 

1,205

 

 

1,344,611

 

 

 

 

 

 




 

 

 

 

 

 

19,558,036

 









Minnesota — 5.1%

 

 

 

 

 

 

 

City of Minneapolis Minnesota, Refunding RB, Fairview
Health Services, Series B (AGC), 6.50%, 11/15/38

 

 

5,680

 

 

5,999,670

 









Nevada — 1.8%

 

 

 

 

 

 

 

County of Clark Nevada, RB, Las Vegas-McCarran
International Airport, Series A (AGC), 5.25%, 7/01/39

 

 

2,295

 

 

2,150,484

 









New Jersey — 5.1%

 

 

 

 

 

 

 

New Jersey EDA, RB, School Facilities Construction,
Series Z (AGC), 6.00%, 12/15/34

 

 

1,000

 

 

1,052,550

 

New Jersey Health Care Facilities Financing Authority,
RB, Virtua Health (AGC), 5.50%, 7/01/38

 

 

1,300

 

 

1,320,748

 

New Jersey State Housing & Mortgage Finance Agency,
RB, S/F Housing, Series CC, 5.25%, 10/01/29

 

 

1,575

 

 

1,573,063

 

New Jersey Transportation Trust Fund Authority, RB,
Transportation System, Series A (AGC), 5.50%,
12/15/38

 

 

2,000

 

 

2,050,780

 

 

 

 

 

 




 

 

 

 

 

 

5,997,141

 









New York — 4.3%

 

 

 

 

 

 

 

New York City Municipal Water Finance Authority, RB,
Second General Resolution, Series EE, 5.38%,
6/15/43

 

 

1,545

 

 

1,566,614

 

New York City Transitional Finance Authority, RB,
Fiscal 2009:

 

 

 

 

 

 

 

Series S-3, 5.25%, 1/15/39

 

 

900

 

 

906,291

 

Series S-4 (AGC), 5.50%, 1/15/29

 

 

2,465

 

 

2,573,682

 

 

 

 

 

 




 

 

 

 

 

 

5,046,587

 









Ohio — 0.5%

 

 

 

 

 

 

 

Ohio Higher Educational Facility Commission, Refunding
RB, Summa Health System, 2010 Project (AGC),
5.25%, 11/15/40

 

 

625

 

 

579,256

 









Pennsylvania — 0.8%

 

 

 

 

 

 

 

Pennsylvania Turnpike Commission, Refunding RB,
Sub-Series B-1 (AGM), 5.00%, 12/01/37

 

 

1,000

 

 

932,940

 









Puerto Rico — 2.2%

 

 

 

 

 

 

 

Puerto Rico Highway & Transportation Authority,
Refunding RB, Series CC (AGM), 5.50%, 7/01/30

 

 

1,170

 

 

1,167,145

 

Puerto Rico Sales Tax Financing Corp., RB, First
Sub-Series A, 6.38%, 8/01/39

 

 

1,350

 

 

1,397,453

 

 

 

 

 

 




 

 

 

 

 

 

2,564,598

 









Texas — 21.4%

 

 

 

 

 

 

 

Austin Community College District, RB, Educational
Facilities Project, Round Rock Campus, 5.25%,
8/01/33

 

 

2,000

 

 

2,012,120

 

City of Austin Texas, Refunding RB, Series A (AGM):

 

 

 

 

 

 

 

5.00%, 11/15/28

 

 

705

 

 

717,436

 

5.00%, 11/15/29

 

 

895

 

 

904,541

 

City of Houston Texas, Refunding RB, Combined,
First Lien, Series A (AGC):

 

 

 

 

 

 

 

6.00%, 11/15/35

 

 

2,600

 

 

2,822,378

 

6.00%, 11/15/36

 

 

2,215

 

 

2,399,753

 

5.38%, 11/15/38

 

 

1,000

 

 

1,020,200

 


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par 
(000)

 

Value

 







Texas (concluded)

 

 

 

 

 

 

 

Dallas Area Rapid Transit, Refunding RB, Senior Lien,
5.25%, 12/01/38

 

$

1,500

 

$

1,511,280

 

Frisco ISD Texas, GO, School Building (AGC):

 

 

 

 

 

 

 

5.38%, 8/15/39

 

 

1,415

 

 

1,440,470

 

5.50%, 8/15/41

 

 

3,365

 

 

3,465,849

 

Harris County Health Facilities Development Corp.,
Refunding RB, Memorial Hermann Healthcare System,
Series B, 7.13%, 12/01/31

 

 

500

 

 

542,810

 

Lubbock Cooper ISD Texas, GO, School Building (AGC),
5.75%, 2/15/42

 

 

500

 

 

512,495

 

North Texas Tollway Authority, RB, System, First Tier,
Series K-1 (AGC), 5.75%, 1/01/38

 

 

1,500

 

 

1,510,215

 

North Texas Tollway Authority, Refunding RB, System,
First Tier:

 

 

 

 

 

 

 

(AGM), 6.00%, 1/01/43

 

 

1,000

 

 

1,029,860

 

Series A (AGC), 5.75%, 1/01/40

 

 

1,500

 

 

1,507,440

 

Series A (NPFGC), 5.13%, 1/01/28

 

 

2,895

 

 

2,864,226

 

Tarrant County Cultural Education Facilities Finance
Corp., Refunding RB, Christus Health, Series A (AGC),
6.50%, 7/01/37

 

 

1,000

 

 

1,031,440

 

 

 

 

 

 




 

 

 

 

 

 

25,292,513

 









Utah — 1.3%

 

 

 

 

 

 

 

City of Riverton Utah, RB, IHC Health Services Inc.,
5.00%, 8/15/41

 

 

1,625

 

 

1,521,439

 









Virginia — 0.9%

 

 

 

 

 

 

 

Virginia Public School Authority, RB, School Financing,
6.50%, 12/01/35

 

 

1,000

 

 

1,094,710

 









Total Municipal Bonds — 115.5%

 

 

 

 

 

136,229,915

 










 

 

 

 

 

 

 

 


 

Municipal Bonds Transferred to

 

 

 

 

 

 

 

Tender Option Bond Trusts (a)

 

 

 

 

 

 

 









Alabama — 1.3%

 

 

 

 

 

 

 

Mobile Board of Water & Sewer Commissioners, RB
(NPFGC), 5.00%, 1/01/31

 

 

1,500

 

 

1,498,020

 









California — 2.1%

 

 

 

 

 

 

 

San Diego Community College District California, GO,
Election of 2002 (AGM), 5.00%, 5/01/30

 

 

2,500

 

 

2,481,550

 









District of Columbia — 0.7%

 

 

 

 

 

 

 

District of Columbia Water & Sewer Authority, RB,
Series A, 6.00%, 10/01/35

 

 

760

 

 

825,081

 









Florida — 26.5%

 

 

 

 

 

 

 

City of Jacksonville Florida, RB, Better Jacksonville
(NPFGC), 5.00%, 10/01/27

 

 

3,930

 

 

3,956,370

 

County of Pinellas Florida, RB (AGM), 5.00%, 10/01/32

 

 

9,500

 

 

9,076,328

 

Florida State Board of Education, GO, Public Education,
Series A (AGM), 5.00%, 6/01/27

 

 

9,000

 

 

9,108,450

 

Palm Beach County School District, COP, Refunding,
Series D (AGM), 5.00%, 8/01/28

 

 

9,190

 

 

9,147,359

 

 

 

 

 

 




 

 

 

 

 

 

31,288,507

 









Illinois — 5.0%

 

 

 

 

 

 

 

Chicago Transit Authority, Refunding RB, Federal
Transit Administration Section 5309 (AGM),
5.00%, 6/01/28

 

 

2,999

 

 

2,832,783

 

Illinois State Toll Highway Authority, RB, Series B,
5.50%, 1/01/33

 

 

2,999

 

 

3,009,410

 

 

 

 

 

 




 

 

 

 

 

 

5,842,193

 










 

 

 

See Notes to Financial Statements.


18

SEMI-ANNUAL REPORT

FEBRUARY 28, 2011




 

 


 

Schedule of Investments (concluded)

BlackRock Municipal Income Investment Quality Trust (BAF)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (a)

 

Par 
(000)

 

Value

 









Kentucky — 0.8%

 

 

 

 

 

 

 

Kentucky State Property & Building Commission,
Refunding RB, Project No. 93 (AGC), 5.25%, 2/01/27

 

$

898

 

$

931,964

 









Nevada — 1.8%

 

 

 

 

 

 

 

Clark County Water Reclamation District, GO, Limited
Tax, 6.00%, 7/01/38

 

 

2,000

 

 

2,144,320

 









Total Municipal Bonds Transferred to

 

 

 

 

 

 

 

Tender Option Bond Trusts — 38.2%

 

 

 

 

 

45,011,635

 









Total Long-Term Investments

 

 

 

 

 

 

 

(Cost — $183,499,520) — 153.7%

 

 

 

 

 

181,241,550

 









 

 

 

 

 

 

 

 


 

 

 

 

 

 

 

 

Short-Term Securities

 

Shares

 

 

 

 









FFI Institutional Tax-Exempt Fund, 0.13% (b)(c)

 

 

5,323,892

 

 

5,323,892

 









Total Short-Term Securities
(Cost — $5,323,892) — 4.5%

 

 

 

 

 

5,323,892

 









Total Investments (Cost — $188,823,412*) — 158.2%

 

 

 

 

 

186,565,442

 

Liabilities in Excess of Other Assets — (0.4)%

 

 

 

 

 

(480,374

)

Liability for Trust Certificates, Including
Interest Expense and Fees Payable — (22.0)%

 

 

 

 

 

(25,887,547

)

Preferred Shares, at Redemption Value — (35.8)%

 

 

 

 

 

(42,278,454

)

 

 

 

 

 




Net Assets Applicable to Common Shares — 100.0%

 

 

 

 

$

117,919,067

 

 

 

 

 

 













 

 

*

The cost and unrealized appreciation (depreciation) of investments as of February 28, 2011, as computed for federal income tax purposes, were as follows:


 

 

 

 

 

Aggregate cost

 

$

163,232,643

 

 

 




Gross unrealized appreciation

 

$

2,730,254

 

Gross unrealized depreciation

 

 

(5,263,721

)

 

 




Net unrealized depreciation

 

$

(2,533,467

)

 

 





 

 

(a)

Securities represent bonds transferred to a TOB in exchange for which the Trust acquired residual interest certificates. These securities serve as collateral in a financing transaction. See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs.

 

 

(b)

Investments in companies considered to be an affiliate of the Trust during the period, for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:


 

 

 

 

 

 

 

 

 

 

 

 

 

 















Affiliate

 

Shares Held at
August 31,
2010

 

Net
Activity

 

Shares Held at
February 28,
2011

 

Income

 











FFI Institutional
Tax-Exempt Fund

 

 

1,211,264

 

 

4,112,628

 

 

5,323,892

 

$

2,595

 
















 

 

(c)

Represents the current yield as of report date.

 

 

Financial futures contracts sold as of February 28, 2011 were as follows:


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
















Contracts

 

Issue

 

Exchange

 

Expiration

 

Notional
Value

 

Unrealized
Depreciation

 













      47

 

10-Year U.S.

 

Chicago

 

 

June 2011

 

$

5,570,145

 

$

(25,058

)

 

 

Treasury Note

 

Board of Trade

 

 

 

 

 

 

 

 

 

 

















 

 

 

Fair Value Measurements — Various inputs are used in determining the fair value of investments and derivatives. These inputs are summarized in three broad levels for financial statement purposes as follows:

 

 

 

 

Level 1 — price quotations in active markets/exchanges for identical assets and liabilities

 

 

 

 

Level 2 — other observable inputs (including, but not limited to: quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs)

 

 

 

 

Level 3 — unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the Trust’s own assumptions used in determining the fair value of investments and derivatives)

The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. For information about the Trust’s policy regarding valuation of investments and derivatives and other significant accounting policies, please refer to Note 1 of the Notes to Financial Statements.

The following tables summarize the inputs used as of February 28, 2011 in determining the fair valuation of the Trust’s investments and derivatives:

 

 

 

 

 

 

 

 

 

 

 

 

 

 















Valuation Inputs

 

Level 1

 

Level 2

 

Level 3

 

Total

 















Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments in

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-Term
Investments1

 

 

 

$

181,241,550

 

 

 

$

181,241,550

 

Short-Term
Securities

 

$

5,323,892

 

 

 

 

 

 

5,323,892

 

 

 













Total

 

$

5,323,892

 

$

181,241,550

 

 

 

$

186,565,442

 

 

 














 

 

1

See above Schedule of Investments for values in each state or political subdivision.


 

 

 

 

 

 

 

 

 

 

 

 

 

 















 

 

Derivative Financial Instruments2

 





Valuation Inputs

 

Level 1

 

Level 2

 

Level 3

 

Total

 











Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate
contracts

 

$

(25,058

)

 

 

 

 

$

(25,058

)

 

 














 

 

2

Derivative financial instruments are financial futures contracts, which are shown at the unrealized appreciation/depreciation on the instrument.


 

 

 

 

See Notes to Financial Statements.

 

 





 

SEMI-ANNUAL REPORT

FEBRUARY 28, 2011

19




 

 


 

 

Schedule of Investments February 28, 2011 (Unaudited)

BlackRock Municipal Bond Trust (BBK)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 









Alabama — 3.4%

 

 

 

 

 

 

 

Birmingham Special Care Facilities Financing Authority, RB, Children’s Hospital (AGC):

 

 

 

 

 

 

 

6.00%, 6/01/34

 

$

1,150

 

$

1,205,522

 

6.00%, 6/01/39

 

 

450

 

 

468,544

 

Hoover City Board of Education, GO, Refunding, 4.25%, 2/15/40

 

 

3,750

 

 

3,131,550

 

 

 

 

 

 




 

 

 

 

 

 

4,805,616

 









Arizona — 4.8%

 

 

 

 

 

 

 

Arizona State University, RB, Series D, 5.50%, 7/01/26

 

 

200

 

 

211,662

 

Mohave County Unified School District No. 20 Kingman, GO, School Improvement Project of 2006, Series C (AGC), 5.00%, 7/01/26

 

 

200

 

 

205,338

 

Pima County IDA, Refunding IDRB, Tucson Electric Power, 5.75%, 9/01/29

 

 

900

 

 

872,802

 

Salt Verde Financial Corp., RB, Senior:

 

 

 

 

 

 

 

5.00%, 12/01/32

 

 

1,500

 

 

1,297,680

 

5.00%, 12/01/37

 

 

2,065

 

 

1,733,712

 

San Luis Facility Development Corp., RB, Senior Lien, Regional Detention Center Project:

 

 

 

 

 

 

 

6.25%, 5/01/15

 

 

300

 

 

289,518

 

7.00%, 5/01/20

 

 

300

 

 

286,317

 

7.25%, 5/01/27

 

 

600

 

 

561,066

 

State of Arizona, COP, Department of Administration, Series A (AGM), 5.00%, 10/01/29

 

 

750

 

 

748,163

 

University Medical Center Corp. Arizona, RB, 6.50%, 7/01/39

 

 

500

 

 

509,600

 

 

 

 

 

 




 

 

 

 

 

 

6,715,858

 









California — 15.3%

 

 

 

 

 

 

 

California County Tobacco Securitization Agency, RB, CAB, Stanislaus, Sub-Series C, 6.30%, 6/01/55 (a)

 

 

4,500

 

 

25,875

 

California HFA, RB, Home Mortgage, Series G, AMT, 5.05%, 2/01/29

 

 

2,285

 

 

2,129,186

 

California Health Facilities Financing Authority, Refunding RB, Sutter Health, Series B, 5.88%, 8/15/31

 

 

1,900

 

 

1,908,835

 

Carlsbad Unified School District, GO, Election of 2006, Series B, 6.09%, 5/01/34 (b)

 

 

1,000

 

 

568,640

 

Dinuba Unified School District, GO, Election of 2006 (AGM):

 

 

 

 

 

 

 

5.63%, 8/01/31

 

 

250

 

 

258,715

 

5.75%, 8/01/33

 

 

500

 

 

517,855

 

Hartnell Community College District California, GO, CAB, Election of 2002, Series D, 7.46%, 8/01/34 (b)

 

 

1,650

 

 

803,847

 

Norwalk-La Mirada Unified School District California, GO, Refunding, CAB, Election of 2002, Series E (AGC), 6.47%, 8/01/38 (a)

 

 

8,000

 

 

1,212,320

 

Palomar Community College District, GO, CAB, Election of 2006, Series B:

 

 

 

 

 

 

 

6.09%, 8/01/30 (a)

 

 

1,500

 

 

397,860

 

7.57%, 8/01/39 (b)

 

 

2,000

 

 

708,220

 

San Diego Community College District California, GO, CAB, Election of 2002, 6.24%, 8/01/19 (b)

 

 

2,800

 

 

1,592,080

 

State of California, GO, Refunding:

 

 

 

 

 

 

 

(CIFG), 4.50%, 8/01/28

 

 

500

 

 

452,200

 

Veterans, AMT, 5.05%, 12/01/36

 

 

1,000

 

 

865,550

 

State of California, GO, Various Purpose:

 

 

 

 

 

 

 

5.75%, 4/01/31

 

 

2,000

 

 

2,063,800

 

6.00%, 3/01/33

 

 

2,050

 

 

2,151,721

 

6.50%, 4/01/33

 

 

1,950

 

 

2,115,594

 

5.50%, 3/01/40

 

 

2,350

 

 

2,326,453

 

Val Verde Unified School District California, Special Tax Bonds, Refunding, Junior Lien, 6.25%, 10/01/28

 

 

1,585

 

 

1,459,674

 

 

 

 

 

 




 

 

 

 

 

 

21,558,425

 










 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 







Colorado — 1.9%

 

 

 

 

 

 

 

Colorado Health Facilities Authority, RB, Catholic Health Initiatives, Series D, 6.25%, 10/01/33

 

$

1,070

 

$

1,120,547

 

Sand Creek Metropolitan District, GO, Refunding, Limited Tax, Series B:

 

 

 

 

 

 

 

4.75%, 12/01/35

 

 

1,000

 

 

879,510

 

5.00%, 12/01/40

 

 

800

 

 

720,136

 

 

 

 

 

 




 

 

 

 

 

 

2,720,193

 









Delaware — 0.8%

 

 

 

 

 

 

 

County of Sussex Delaware, RB, NRG Energy, Inc., Indian River Project, 6.00%, 10/01/40

 

 

1,200

 

 

1,168,356

 









District of Columbia — 6.3%

 

 

 

 

 

 

 

District of Columbia, Refunding RB, Friendship Public Charter School Inc. (ACA), 5.25%, 6/01/33

 

 

595

 

 

452,140

 

District of Columbia, Tax Allocation Bonds, Gallery Place Project (AGM), 5.40%, 7/01/31

 

 

6,000

 

 

6,019,560

 

District of Columbia Tobacco Settlement Financing Corp., Refunding RB, Asset-Backed, 6.75%, 5/15/40

 

 

2,500

 

 

2,348,750

 

 

 

 

 

 




 

 

 

 

 

 

8,820,450

 









Florida — 6.4%

 

 

 

 

 

 

 

Miami Beach Health Facilities Authority, RB, Mount Sinai Medical Center of Florida, 6.75%, 11/15/21

 

 

1,180

 

 

1,196,024

 

Palm Beach County Housing Finance Authority, HRB, Indian Trace Apartments, Series A, AMT (AGM), 5.63%, 1/01/44

 

 

7,255

 

 

7,121,145

 

Stevens Plantation Community Development District, Special Assessment Bonds, Series A, 7.10%,

 

 

 

 

 

 

 

5/01/35

 

 

940

 

 

721,817

 

 

 

 

 

 




 

 

 

 

 

 

9,038,986

 









Idaho — 1.7%

 

 

 

 

 

 

 

Idaho Health Facilities Authority, RB, St. Luke’s Regional Medical Center (AGM), 5.00%, 7/01/35

 

 

500

 

 

474,350

 

Idaho Health Facilities Authority, Refunding RB, Trinity Health Group, Series B, 6.25%, 12/01/33

 

 

1,750

 

 

1,845,358

 

 

 

 

 

 




 

 

 

 

 

 

2,319,708

 









Illinois — 10.6%

 

 

 

 

 

 

 

Illinois Finance Authority, RB:

 

 

 

 

 

 

 

MJH Education Assistance IV LLC, Sub-Series B, 5.38%, 6/01/35 (c)(d)

 

 

425

 

 

114,104

 

Navistar International, Recovery Zone, 6.50%, 10/15/40

 

 

1,285

 

 

1,298,608

 

Roosevelt University Project, 6.50%, 4/01/44

 

 

1,000

 

 

1,001,880

 

Rush University Medical Center, Series C, 6.63%, 11/01/39

 

 

650

 

 

665,346

 

Illinois Finance Authority, Refunding RB, Series A:

 

 

 

 

 

 

 

Friendship Village Schaumburg, 5.63%, 2/15/37

 

 

210

 

 

160,220

 

Lake Forest Hospital, 5.75%, 7/01/29

 

 

4,000

 

 

4,040,240

 

OSF Healthcare System, 6.00%, 5/15/39

 

 

1,050

 

 

976,017

 

Railsplitter Tobacco Settlement Authority, RB:

 

 

 

 

 

 

 

6.25%, 6/01/24

 

 

1,000

 

 

1,002,050

 

6.00%, 6/01/28

 

 

1,150

 

 

1,123,331

 

Village of Bolingbrook Illinois, GO, Refunding, Series B (NPFGC), 6.22%, 1/01/36 (a)

 

 

23,065

 

 

4,465,615

 

 

 

 

 

 




 

 

 

 

 

 

14,847,411

 









Indiana — 2.0%

 

 

 

 

 

 

 

County of Monroe Indiana, Multifamily Housing Revenue Bond Pass-Through Certificates, RB, Series 1, Canterbury House Apartments, Mandatory Put Bonds, AMT, 5.90%, 12/01/34 (e)

 

 

1,835

 

 

1,845,753

 

Indiana Finance Authority, Refunding RB, Improvement, U.S. Steel Corp., 6.00%, 12/01/26

 

 

1,000

 

 

988,460

 

 

 

 

 

 




 

 

 

 

 

 

2,834,213

 










 

 

 

See Notes to Financial Statements.


20

SEMI-ANNUAL REPORT

FEBRUARY 28, 2011




 

 


 

 

Schedule of Investments (continued)

BlackRock Municipal Bond Trust (BBK)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 







Iowa — 1.1%

 

 

 

 

 

 

 

Iowa Higher Education Loan Authority, Refunding RB, Private College Facility:

 

 

 

 

 

 

 

5.75%, 9/01/30

 

$

500

 

$

501,810

 

6.00%, 9/01/39

 

 

1,000

 

 

1,005,750

 

 

 

 

 

 




 

 

 

 

 

 

1,507,560

 









Kansas — 3.5%

 

 

 

 

 

 

 

Kansas Development Finance Authority, RB, University of Kansas Tenant, Series O, 4.75%, 6/15/41

 

 

700

 

 

632,457

 

Wichita Airport Authority, RB, Special, Cessna Citation Service Center, Series A, AMT, 6.25%, 6/15/32

 

 

5,000

 

 

4,308,450

 

 

 

 

 

 




 

 

 

 

 

 

4,940,907

 









Kentucky — 0.4%

 

 

 

 

 

 

 

Kentucky Economic Development Finance Authority, RB, Louisville Arena, Sub-Series A-1 (AGC), 6.00%, 12/01/38

 

 

500

 

 

509,655

 









Louisiana — 2.2%

 

 

 

 

 

 

 

Louisiana Local Government Environmental Facilities & Community Development Authority, RB, Westlake Chemical Corp., Series A-1, 6.50%, 11/01/35

 

 

1,050

 

 

1,068,722

 

Louisiana Public Facilities Authority, Refunding RB, Entergy Gulf States Louisiana, LLC Project, Series A, 5.00%, 9/01/28

 

 

2,000

 

 

1,967,920

 

 

 

 

 

 




 

 

 

 

 

 

3,036,642

 









Maryland — 2.1%

 

 

 

 

 

 

 

Maryland EDC, Refunding RB, CNX Marine Terminals, Inc., 5.75%, 9/01/25

 

 

500

 

 

467,915

 

Maryland Health & Higher Educational Facilities Authority, Refunding RB, Doctor’s Community Hospital, 5.63%, 7/01/30

 

 

2,900

 

 

2,477,876

 

 

 

 

 

 




 

 

 

 

 

 

2,945,791

 









Michigan — 3.8%

 

 

 

 

 

 

 

Michigan State Building Authority, Refunding RB, Facilities Program, Series I, 6.25%, 10/15/38

 

 

1,250

 

 

1,315,637

 

Michigan State Hospital Finance Authority, Refunding RB:

 

 

 

 

 

 

 

Henry Ford Health System, Series A, 5.25%, 11/15/46

 

 

1,065

 

 

888,306

 

Hospital, Henry Ford Health, 5.75%, 11/15/39

 

 

1,000

 

 

928,540

 

Royal Oak Hospital Finance Authority Michigan, Refunding RB, William Beaumont Hospital, 8.25%, 9/01/39

 

 

1,950

 

 

2,175,927

 

 

 

 

 

 




 

 

 

 

 

 

5,308,410

 









Minnesota — 4.0%

 

 

 

 

 

 

 

City of Minneapolis Minnesota, Refunding RB, Fairview Health Services, Series B (AGC), 6.50%, 11/15/38

 

 

5,350

 

 

5,651,098

 









Mississippi — 3.1%

 

 

 

 

 

 

 

Mississippi Development Bank Special Obligation, RB, Jackson County Limited Tax Note (AGC), 5.50%, 7/01/32

 

 

1,750

 

 

1,780,292

 

University of Southern Mississippi, RB, Campus Facilities Improvements Project, 5.38%, 9/01/36

 

 

2,500

 

 

2,522,925

 

 

 

 

 

 




 

 

 

 

 

 

4,303,217

 









Montana — 1.8%

 

 

 

 

 

 

 

Montana Facility Finance Authority, Refunding RB, Sisters of Leavenworth, Series A, 4.75%, 1/01/40

 

 

2,750

 

 

2,489,988

 









Multi-State — 8.1%

 

 

 

 

 

 

 

Centerline Equity Issuer Trust, 7.20%, 11/15/52 (f)(g)

 

 

10,500

 

 

11,416,230

 










 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 







Nebraska — 2.0%

 

 

 

 

 

 

 

Douglas County Hospital Authority No. 2, RB, Health Facilities, Immanuel Obligation Group, 5.50%, 1/01/30

 

$

425

 

$

415,705

 

Nebraska Investment Finance Authority, Refunding RB, Series A:

 

 

 

 

 

 

 

5.90%, 9/01/36

 

 

1,200

 

 

1,228,032

 

6.05%, 9/01/41

 

 

1,165

 

 

1,179,260

 

 

 

 

 

 




 

 

 

 

 

 

2,822,997

 









Nevada — 1.2%

 

 

 

 

 

 

 

City of Las Vegas Nevada, Special Assessment Bonds, Summerlin Area, 5.65%, 6/01/23

 

 

1,315

 

 

1,095,145

 

County of Clark Nevada, Refunding RB, Alexander Dawson School Nevada Project, 5.00%, 5/15/29

 

 

575

 

 

538,994

 

 

 

 

 

 




 

 

 

 

 

 

1,634,139

 









New Jersey — 14.3%

 

 

 

 

 

 

 

Middlesex County Improvement Authority, RB, Subordinate, Heldrich Center Hotel, Series B, 6.25%, 1/01/37 (c)(d)

 

 

915

 

 

91,500

 

New Jersey EDA, RB:

 

 

 

 

 

 

 

Cigarette Tax, 5.50%, 6/15/24

 

 

3,710

 

 

3,419,878

 

Cigarette Tax (Radian), 5.50%, 6/15/31

 

 

1,500

 

 

1,288,350

 

Continental Airlines Inc. Project, AMT, 7.20%, 11/15/30 (e)

 

 

3,000

 

 

3,004,680

 

New Jersey EDA, Refunding RB, First Mortgage, Winchester, Series A, 5.80%, 11/01/31

 

 

1,500

 

 

1,423,770

 

New Jersey EDA, Special Assessment Bonds, Refunding, Kapkowski Road Landfill Project, 6.50%, 4/01/28

 

 

7,500

 

 

7,488,675

 

New Jersey Educational Facilities Authority, Refunding RB:

 

 

 

 

 

 

 

College of New Jersey, Series D (AGM), 5.00%, 7/01/35

 

 

1,000

 

 

987,450

 

University of Medicine & Dentistry, Series B, 7.13%, 12/01/23

 

 

630

 

 

708,492

 

University of Medicine & Dentistry, Series B, 7.50%, 12/01/32

 

 

800

 

 

878,944

 

New Jersey State Housing & Mortgage Finance Agency, RB, Series AA, 6.50%, 10/01/38

 

 

810

 

 

872,167

 

 

 

 

 

 




 

 

 

 

 

 

20,163,906

 









New Mexico — 1.5%

 

 

 

 

 

 

 

Village of Los Ranchos de Albuquerque New Mexico, Refunding RB, Albuquerque Academy Project, 4.50%, 9/01/40

 

 

2,500

 

 

2,108,325

 









New York — 7.9%

 

 

 

 

 

 

 

Albany Industrial Development Agency, RB, New Covenant Charter School Project, Series A, 7.00%, 5/01/35 (c)(d)

 

 

455

 

 

136,486

 

Hudson Yards Infrastructure Corp., RB, Series A, 5.00%, 2/15/47

 

 

500

 

 

419,205

 

New York City Housing Development Corp., RB, Series A, AMT, 5.50%, 11/01/34

 

 

3,000

 

 

2,968,410

 

New York City Industrial Development Agency, RB:

 

 

 

 

 

 

 

American Airlines Inc., JFK International Airport, AMT, 7.75%, 8/01/31 (e)

 

 

3,165

 

 

3,228,933

 

Queens Baseball Stadium, PILOT (AGC), 6.50%, 1/01/46

 

 

700

 

 

727,776

 

New York Liberty Development Corp., Refunding RB, Second Priority, Bank of America Tower at One Bryant Park Project, 6.38%, 7/15/49

 

 

800

 

 

795,944

 

New York State Dormitory Authority, RB:

 

 

 

 

 

 

 

The New School (AGM), 5.50%, 7/01/43

 

 

1,550

 

 

1,555,487

 

Rochester Institute of Technology, Series A, 6.00%, 7/01/33

 

 

1,000

 

 

1,056,970

 

University of Rochester, Series A, 5.13%, 7/01/39

 

 

250

 

 

245,400

 

 

 

 

 

 




 

 

 

 

 

 

11,134,611

 










 

 

 

 

See Notes to Financial Statements.

 

 





 

SEMI-ANNUAL REPORT

FEBRUARY 28, 2011

21




 

 



 

 

Schedule of Investments (continued)

BlackRock Municipal Bond Trust (BBK)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 







North Carolina — 8.2%

 

 

 

 

 

 

 

City of Charlotte North Carolina, Refunding RB, Series A,
5.50%, 7/01/34

 

$

225

 

$

228,265

 

Gaston County Industrial Facilities & Pollution Control
Financing Authority North Carolina, RB, Exempt
Facilities, National Gypsum Co. Project, AMT, 5.75%,
8/01/35

 

 

2,945

 

 

2,218,498

 

North Carolina Capital Facilities Finance Agency, RB,
Duke Energy Carolinas, Series B, 4.38%, 10/01/31

 

 

2,475

 

 

2,283,410

 

North Carolina Medical Care Commission, RB, Series A:

 

 

 

 

 

 

 

Novant Health Obligation, 4.75%, 11/01/43

 

 

4,000

 

 

3,392,480

 

WakeMed, (AGC), 5.88%, 10/01/38

 

 

1,000

 

 

1,015,910

 

North Carolina Medical Care Commission, Refunding RB,
Caromont Health (AGC):

 

 

 

 

 

 

 

4.50%, 2/15/30

 

 

750

 

 

673,620

 

4.63%, 2/15/35

 

 

1,000

 

 

876,760

 

University Health System, Series D, 6.25%, 12/01/33

 

 

800

 

 

835,856

 

 

 

 

 

 




 

 

 

 

 

 

11,524,799

 









Oklahoma — 1.3%

 

 

 

 

 

 

 

Tulsa Airports Improvement Trust, RB, Series A,
Mandatory Put Bonds, AMT, 7.75%, 6/01/35 (e)

 

 

1,725

 

 

1,763,416

 









Oregon — 2.1%

 

 

 

 

 

 

 

City of Portland Oregon, Multifamily Housing Revenue
Bond Pass-Through Certificates, RB, Series 6, Pacific
Tower Apartments, AMT, 6.05%, 11/01/34

 

 

515

 

 

515,438

 

Oregon Health & Science University, RB, Series A,
5.75%, 7/01/39

 

 

1,250

 

 

1,273,925

 

Oregon State Facilities Authority, Refunding RB, Limited
College Project, Series A:

 

 

 

 

 

 

 

5.00%, 10/01/34

 

 

850

 

 

769,207

 

5.25%, 10/01/40

 

 

500

 

 

461,955

 

 

 

 

 

 




 

 

 

 

 

 

3,020,525

 









Pennsylvania — 3.0%

 

 

 

 

 

 

 

Delaware River Port Authority, RB, Series D (AGC),
5.00%, 1/01/40

 

 

2,600

 

 

2,515,032

 

Pennsylvania Economic Development Financing
Authority, RB, Aqua Pennsylvania Inc. Project, Series B,
4.50%, 12/01/42

 

 

2,000

 

 

1,758,080

 

 

 

 

 

 




 

 

 

 

 

 

4,273,112

 









Puerto Rico — 1.9%

 

 

 

 

 

 

 

Puerto Rico Sales Tax Financing Corp., RB, First
Sub-Series A, 5.75%, 8/01/37

 

 

2,000

 

 

1,975,800

 

Puerto Rico Sales Tax Financing Corp., Refunding RB,
CAB, Series A (NPFGC), 5.75%, 8/01/41 (a)

 

 

5,000

 

 

666,350

 

 

 

 

 

 




 

 

 

 

 

 

2,642,150

 









Rhode Island — 2.4%

 

 

 

 

 

 

 

Rhode Island Health & Educational Building Corp., RB,
Hospital Financing, LifeSpan Obligation, Series A
(AGC), 7.00%, 5/15/39

 

 

1,000

 

 

1,099,760

 

Rhode Island Housing & Mortgage Finance Corp., RB,
Homeownership Opportunity, Series 54, AMT, 4.85%,
10/01/41

 

 

1,500

 

 

1,322,205

 

State of Rhode Island, COP, Series C, School for the
Deaf (AGC), 5.38%, 4/01/28

 

 

900

 

 

925,209

 

 

 

 

 

 




 

 

 

 

 

 

3,347,174

 









South Carolina — 0.9%

 

 

 

 

 

 

 

County of Florence South Carolina, RB, McLeod
Regional Medical Center, Series A, 5.00%, 11/01/37

 

 

1,350

 

 

1,210,923

 









Tennessee — 0.2%

 

 

 

 

 

 

 

Memphis-Shelby County Sports Authority Inc.,
Refunding RB, Memphis Arena Project, Series A,
5.38%, 11/01/28

 

 

275

 

 

276,777

 










 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 









Texas — 14.9%

 

 

 

 

 

 

 

Harris County Health Facilities Development Corp.,
Refunding RB, Memorial Hermann Healthcare
System, Series B:

 

 

 

 

 

 

 

7.13%, 12/01/31

 

$

500

 

$

542,810

 

7.25%, 12/01/35

 

 

1,750

 

 

1,895,162

 

Harris County Housing Finance Corp., Multifamily
Housing Revenue Bond Pass-Through Certificates,
RB, Series 9, Copperwood Ranch Apartments,
Mandatory Put Bonds, AMT, 5.95%, 11/01/35 (e)

 

 

2,420

 

 

2,441,901

 

Harris County-Houston Sports Authority, Refunding RB,
CAB, Senior Lien, Series G (NPFGC), 6.17%,
11/15/41 (a)

 

 

11,690

 

 

1,071,155

 

Love Field Airport Modernization Corp., RB, Southwest
Airlines Co. Project, 5.25%, 11/01/40

 

 

2,500

 

 

2,222,450

 

Lower Colorado River Authority, Refunding RB (NPFGC),
5.00%, 5/15/13 (h)

 

 

15

 

 

16,376

 

Matagorda County Navigation District No. 1 Texas,
Refunding RB, Central Power & Light Co. Project,
Series A, 6.30%, 11/01/29

 

 

1,500

 

 

1,545,810

 

Texas Private Activity Bond Surface Transportation Corp.,
RB, Senior Lien, LBJ Infrastructure Group LLC, LBJ
Freeway Managed Lanes Project, 7.00%, 6/30/40

 

 

2,000

 

 

2,028,440

 

Texas State Turnpike Authority, RB (AMBAC):

 

 

 

 

 

 

 

CAB, 6.08%, 8/15/35 (a)

 

 

50,000

 

 

8,592,500

 

First Tier, Series A, 5.00%, 8/15/42

 

 

750

 

 

640,703

 

 

 

 

 

 




 

 

 

 

 

 

20,997,307

 









Virginia — 0.5%

 

 

 

 

 

 

 

Henrico County EDA, RB, Bon Secours Health,
Series B-1 (AGC), 4.50%, 11/01/42

 

 

860

 

 

715,967

 









Washington — 1.0%

 

 

 

 

 

 

 

Washington Health Care Facilities Authority, RB,
MultiCare Health System, Series B (AGC),
6.00%, 8/15/39

 

 

1,400

 

 

1,431,052

 









Wisconsin — 1.8%

 

 

 

 

 

 

 

Wisconsin Health & Educational Facilities Authority, RB,
Aurora Health Care, 6.40%, 4/15/33

 

 

1,350

 

 

1,362,946

 

Wisconsin Housing & EDA, Refunding RB, Series A, AMT,
4.75%, 9/01/33

 

 

1,340

 

 

1,217,578

 

 

 

 

 

 




 

 

 

 

 

 

2,580,524

 









Wyoming — 0.9%

 

 

 

 

 

 

 

County of Sweetwater Wyoming, Refunding RB, Idaho
Power Co. Project, 5.25%, 7/15/26

 

 

1,200

 

 

1,237,248

 









Total Municipal Bonds — 149.3%

 

 

 

 

 

209,823,666

 










 

 

 

 

 

 

 

 









 

 

 

 

 

 

 

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (i)

 

 

 

 

 

 

 









Colorado — 2.5%

 

 

 

 

 

 

 

Colorado Health Facilities Authority, RB, Catholic Health,
Series C-7 (AGM), 5.00%, 9/01/36

 

 

3,750

 

 

3,504,225

 









Massachusetts — 1.0%

 

 

 

 

 

 

 

Massachusetts Water Resources Authority, Refunding RB,
General, Series A, 5.00%, 8/01/41

 

 

1,450

 

 

1,450,623

 









New York — 4.3%

 

 

 

 

 

 

 

New York City Municipal Water Finance Authority, RB:

 

 

 

 

 

 

 

Fiscal 2009, Series A, 5.75%, 6/15/40

 

 

450

 

 

474,776

 

Series FF-2, 5.50%, 6/15/40

 

 

405

 

 

416,807

 

New York City Municipal Water Finance Authority,
Refunding RB, Series A, 4.75%, 6/15/30

 

 

3,000

 

 

2,973,600

 

New York State Dormitory Authority, RB, New York
University, Series A, 5.00%, 7/01/38

 

 

2,199

 

 

2,147,937

 

 

 

 

 

 




 

 

 

 

 

 

6,013,120

 










 

 

 

See Notes to Financial Statements.




22

SEMI-ANNUAL REPORT

FEBRUARY 28, 2011




 

 


 

 

Schedule of Investments (concluded)

BlackRock Municipal Bond Trust (BBK)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (i)

 

Par
(000)

 

Value

 







Ohio — 2.2%

 

 

 

 

 

 

 

County of Montgomery Ohio, RB, Catholic Health,
Series C-1 (AGM), 5.00%, 10/01/41

 

$

1,260

 

$

1,153,291

 

Ohio Higher Educational Facility Commission,
Refunding RB, Hospital, Cleveland Clinic Health,
Series A, 5.25%, 1/01/33

 

 

2,000

 

 

1,934,260

 

 

 

 

 

 




 

 

 

 

 

 

3,087,551

 









Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 10.0%

 

 

 

 

 

14,055,519

 









Total Long-Term Investments
(Cost — $233,041,707) — 159.3%

 

 

 

 

 

223,879,185

 









 

 

 

 

 

 

 

 

 


 

Short-Term Securities

 

Shares

 

 

 

 








FFI Institutional Tax-Exempt Fund, 0.13% (j)(k)

 

 

1,592,687

 

 

1,592,687

 









Total Short-Term Securities
(Cost — $1,592,687) — 1.1%

 

 

 

 

 

1,592,687

 









Total Investments (Cost — $234,634,394*) — 160.4%

 

 

 

 

 

225,471,872

 

Other Assets Less Liabilities — 1.7%

 

 

 

 

 

2,421,499

 

Liability for Trust Certificates, Including
Interest Expense and Fees Payable — (5.3)%

 

 

 

 

 

(7,405,015

)

Preferred Shares, at Redemption Value — (56.8)%

 

 

 

 

 

(79,904,531

)

 

 

 

 

 




Net Assets Applicable to Common Shares — 100.0%

 

 

 

 

$

140,583,825

 

 

 

 

 

 





 

 

 


*

The cost and unrealized appreciation (depreciation) of investments as of February 28, 2011, as computed for federal income tax purposes, were as follows:


 

 

 

 

 

Aggregate cost

 

$

226,514,765

 

 

 




Gross unrealized appreciation

 

$

5,625,658

 

Gross unrealized depreciation

 

 

(14,067,699

)

 

 




Net unrealized depreciation

 

$

(8,442,041

)

 

 





 

 

(a)

Represents a zero-coupon bond. Rate shown reflects the current yield as of report date.

 

 

(b)

Represents a step-up bond that pays an initial coupon rate for the first period and then a higher coupon rate for the following periods. Rate shown reflects the current yield as of report date.

 

 

(c)

Issuer filed for bankruptcy and/or is in default of interest payments.

 

 

(d)

Non-income producing security.

 

 

(e)

Variable rate security. Rate shown is as of report date.

 

 

(f)

Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration to qualified institutional investors.

 

 

(g)

Security represents a beneficial interest in a trust. The collateral deposited into the trust is federally tax-exempt revenue bonds issued by various state or local governments, or their respective agencies or authorities. The security is subject to remarketing prior to its stated maturity.

 

 

(h)

US government securities, held in escrow, are used to pay interest on this security as well as to retire the bond in full at the date indicated, typically at a premium to par.

 

 

(i)

Securities represent bonds transferred to a TOB in exchange for which the Trust acquired residual interest certificates. These securities serve as collateral in a financing transaction. See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs.

 

 

(j)

Investments in companies considered to be an affiliate of the Trust during the period, for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:


 

 

 

 

 

 

 

 

 

 

 

 

 

 















Affiliate

 

Shares Held at
August 31,
2010

 

Net
Activity

 

Shares Held at
February 28,
2011

 

Income

 











FFI Institutional
Tax-Exempt Fund

 

 

4,831,353

 

 

(3,238,666

)

 

1,592,687

 

$

2,086

 
















 

 

(k)

Represents the current yield as of report date.


 

 

Financial futures contracts sold as of February 28,2011 were as follows:


 

 

 

 

 

 

 

 

 

 

 

 

 

 















Contracts

 

Issue

 

Exchange

 

Expiration

 

Notional
Value

 

Unrealized
Depreciation

 













79

 

30-Year U.S.
Treasury Bond

 

Chicago
Board of Trade

 

June
2011

 

$

9,412,037

 

$

(95,119

)
















 

 

Fair Value Measurements — Various inputs are used in determining the fair value of investments and derivatives. These inputs are summarized in three broad levels for financial statements purposes as follows:


 

 

 

 

Level 1 — price quotations in active markets/exchanges for identical assets and liabilities

 

 

 

 

Level 2 — other observable inputs (including, but not limited to: quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs)

 

 

 

 

Level 3 — unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the Trust’s own assumptions used in determining the fair value of investments and derivatives)

The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. For information about the Trust’s policy regarding valuation of investments and derivatives and other significant accounting policies, please refer to Note 1 of the Notes to Financial Statements.

The following tables summarize the inputs used as of February 28, 2011 in determining the fair valuation of the Trust’s investments and derivatives:

 

 

 

 

 

 

 

 

 

 

 

 

 

 











Valuation Inputs

 

Level 1

 

Level 2

 

Level 3

 

Total

 











Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments in
Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-Term
Investments1

 

 

 

$

223,879,185

 

 

 

$

223,879,185

 

Short-Term
Securities

 

$

1,592,687

 

 

 

 

 

 

1,592,687

 

 

 













Total

 

$

1,592,687

 

$

223,879,185

 

 

 

$

225,471,872

 

 

 














 

 

 

 

1

See above Schedule of Investments for values in each state or political subdivision.


 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

 

Derivative Financial Instruments2


Valuation Inputs

 

Level 1

 

Level 2

 

Level 3

 

Total

 











Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate
contracts

 

$

(95,119

)

 

 

 

 

$

(95,119

)

 

 














 

 

 

 

2

Derivative financial instruments are financial futures contracts, which are shown at the unrealized appreciation/depreciation on the instrument.


 

 

 

See Notes to Financial Statements.




SEMI-ANNUAL REPORT

FEBRUARY 28, 2011

23




 

 


 

 

Schedule of Investments February 28, 2011 (Unaudited)

BlackRock Municipal Bond Investment Trust (BIE)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 







Arizona — 0.7%

 

 

 

 

 

 

 

Pima County IDA, Refunding IDRB, Tucson Electric Power, 5.75%, 9/01/29

 

$

330

 

$

320,027

 









California — 20.2%

 

 

 

 

 

 

 

Bay Area Toll Authority, Refunding RB, San Francisco Bay Area, Series F-1, 5.63%, 4/01/44

 

 

720

 

 

729,058

 

California Educational Facilities Authority, RB, University of Southern California, Series A, 5.25%, 10/01/38

 

 

700

 

 

707,826

 

California Health Facilities Financing Authority, Refunding RB, Series A:

 

 

 

 

 

 

 

Catholic Healthcare West, 6.00%, 7/01/39

 

 

120

 

 

120,300

 

St. Joseph Health System, 5.75%, 7/01/39

 

 

730

 

 

730,416

 

California State Public Works Board, RB:

 

 

 

 

 

 

 

Department of General Services, Buildings 8 & 9, Series A, 6.25%, 4/01/34

 

 

1,100

 

 

1,115,235

 

Various Capital Projects, Sub-Series I-1, 6.38%, 11/01/34

 

 

340

 

 

348,605

 

Grossmont Union High School District, GO, Election of 2008, Series B, 4.75%, 8/01/45

 

 

965

 

 

814,663

 

Los Angeles Department of Airports, Refunding RB, Senior, Los Angeles International Airport, Series A, 5.00%, 5/15/35

 

 

1,460

 

 

1,389,059

 

Los Angeles Department of Water & Power, RB, Power System, Sub-Series A-1, 5.25%, 7/01/38

 

 

1,660

 

 

1,643,234

 

San Diego Regional Building Authority California, RB, County Operations Center & Annex, Series A, 5.38%, 2/01/36

 

 

850

 

 

843,616

 

State of California, GO, Various Purpose, 6.00%, 3/01/33

 

 

685

 

 

718,990

 

 

 

 

 

 




 

 

 

 

 

 

9,161,002

 









Colorado — 3.7%

 

 

 

 

 

 

 

City & County of Denver Colorado, Refunding RB, Series A, 5.25%, 11/15/36

 

 

1,095

 

 

1,075,202

 

Colorado Health Facilities Authority, Refunding RB, Catholic Healthcare, Series A, 5.50%, 7/01/34

 

 

580

 

 

579,194

 

 

 

 

 

 




 

 

 

 

 

 

1,654,396

 









Delaware — 1.4%

 

 

 

 

 

 

 

County of Sussex Delaware, RB, NRG Energy, Inc., Indian River Project, 6.00%, 10/01/40

 

 

655

 

 

637,728

 









District of Columbia — 1.5%

 

 

 

 

 

 

 

District of Columbia Water & Sewer Authority, RB, Series A, 5.25%, 10/01/29

 

 

640

 

 

670,131

 









Florida — 0.4%

 

 

 

 

 

 

 

County of St. John’s Florida, RB, CAB (AMBAC), 5.40%, 6/01/32 (a)

 

 

565

 

 

164,144

 









Georgia — 2.4%

 

 

 

 

 

 

 

Municipal Electric Authority of Georgia, Refunding RB, Project One, Sub-Series D, 6.00%, 1/01/23

 

 

1,000

 

 

1,104,670

 









Illinois — 8.4%

 

 

 

 

 

 

 

Chicago Park District, GO, Harbor Facilities, Series C, 5.25%, 1/01/40

 

 

710

 

 

691,426

 

County of Cook Illinois, GO, Refunding, Series A, 5.25%, 11/15/33

 

 

900

 

 

884,691

 

Illinois Finance Authority, RB, Navistar International, Recovery Zone, 6.50%, 10/15/40

 

 

270

 

 

272,859

 

Illinois Finance Authority, Refunding RB, Series A:

 

 

 

 

 

 

 

Northwestern Memorial Hospital, 6.00%, 8/15/39

 

 

1,000

 

 

1,032,080

 

OSF Healthcare System, , 6.00%, 5/15/39

 

 

525

 

 

488,008

 

Railsplitter Tobacco Settlement Authority, RB:

 

 

 

 

 

 

 

5.50%, 6/01/23

 

 

365

 

 

348,674

 

6.00%, 6/01/28

 

 

105

 

 

102,565

 

 

 

 

 

 




 

 

 

 

 

 

3,820,303

 










 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 







Indiana — 2.7%

 

 

 

 

 

 

 

Indiana Municipal Power Agency, RB, Series B, 6.00%, 1/01/39

 

$

1,190

 

$

1,232,745

 









Kansas — 2.0%

 

 

 

 

 

 

 

Kansas Development Finance Authority, Refunding RB, Adventist Health, 5.50%, 11/15/29

 

 

900

 

 

913,608

 









Kentucky — 4.2%

 

 

 

 

 

 

 

Kentucky Economic Development Finance Authority, Refunding RB, Owensboro Medical Health System, Series A, 6.38%, 6/01/40

 

 

350

 

 

328,230

 

Louisville & Jefferson County Metropolitan Government Parking Authority, RB, Series A, 5.75%, 12/01/34

 

 

800

 

 

838,016

 

Louisville & Jefferson County Metropolitan Government, Refunding RB, Jewish Hospital & St. Mary’s HealthCare, 6.13%, 2/01/37

 

 

775

 

 

749,107

 

 

 

 

 

 




 

 

 

 

 

 

1,915,353

 









Louisiana — 0.9%

 

 

 

 

 

 

 

Louisiana Local Government Environmental Facilities & Community Development Authority, RB, Westlake Chemical Corp., Series A-1, 6.50%, 11/01/35

 

 

380

 

 

386,775

 









Maryland — 1.1%

 

 

 

 

 

 

 

Maryland EDC, Refunding RB, CNX Marine Terminals, Inc., 5.75%, 9/01/25

 

 

525

 

 

491,311

 









Massachusetts — 3.6%

 

 

 

 

 

 

 

Massachusetts Development Finance Agency, Refunding RB, Trustees of Deerfield Academy, 5.00%, 10/01/40

 

 

375

 

 

379,830

 

Massachusetts Health & Educational Facilities Authority, Refunding RB, Partners Healthcare System, Series B, 5.25%, 7/01/29

 

 

1,000

 

 

998,760

 

Massachusetts State College Building Authority, RB, Series A, 5.50%, 5/01/39

 

 

250

 

 

256,430

 

 

 

 

 

 




 

 

 

 

 

 

1,635,020

 









Michigan — 4.7%

 

 

 

 

 

 

 

Kalamazoo Hospital Finance Authority, Refunding RB, Bronson Methodist Hospital, 5.50%, 5/15/36

 

 

1,060

 

 

1,001,965

 

Michigan State Building Authority, Refunding RB, Facilities Program, Series I, 6.00%, 10/15/38

 

 

500

 

 

518,520

 

Royal Oak Hospital Finance Authority Michigan, Refunding RB, William Beaumont Hospital, 8.25%, 9/01/39

 

 

530

 

 

591,406

 

 

 

 

 

 




 

 

 

 

 

 

2,111,891

 









Multi-State — 7.2%

 

 

 

 

 

 

 

Centerline Equity Issuer Trust, 7.20%, 11/15/52 (b)(c)

 

 

3,000

 

 

3,261,780

 









Nebraska — 0.4%

 

 

 

 

 

 

 

Lancaster County Hospital Authority No. 1, RB, Immanuel Obligation Group, 5.63%, 1/01/40

 

 

170

 

 

165,147

 









Nevada — 8.4%

 

 

 

 

 

 

 

City of Las Vegas Nevada, GO, Limited Tax, Performing Arts Center, 6.00%, 4/01/34

 

 

1,000

 

 

1,054,940

 

County of Clark Nevada, RB:

 

 

 

 

 

 

 

Motor Vehicle Fuel Tax, 5.00%, 7/01/28

 

 

1,130

 

 

1,130,689

 

Series B, 5.75%, 7/01/42

 

 

1,630

 

 

1,629,854

 

 

 

 

 

 




 

 

 

 

 

 

3,815,483

 









New Jersey — 4.7%

 

 

 

 

 

 

 

New Jersey EDA, Refunding RB, School Facilities Construction, Series AA, 5.50%, 12/15/29

 

 

750

 

 

775,155

 

New Jersey State Housing & Mortgage Finance Agency, RB, S/F Housing, Series CC, 5.25%, 10/01/29

 

 

620

 

 

619,237

 

New Jersey Transportation Trust Fund Authority, RB, Transportation System, Series A, 5.88%, 12/15/38

 

 

695

 

 

721,535

 

 

 

 

 

 




 

 

 

 

 

 

2,115,927

 










 

 

 

See Notes to Financial Statements.


24

SEMI-ANNUAL REPORT

FEBRUARY 28, 2011




 

 


 

 

Schedule of Investments (continued)

BlackRock Municipal Bond Investment Trust (BIE)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 







New York — 7.2%

 

 

 

 

 

 

 

City of Troy New York, Refunding RB, Rensselaer Polytechnic, Series A, 5.13%, 9/01/40

 

$

955

 

$

885,973

 

New York City Municipal Water Finance Authority, RB, Second General Resolution, Series EE, 5.38%, 6/15/43

 

 

205

 

 

207,868

 

New York City Transitional Finance Authority, RB, Fiscal 2009, Series S-3, 5.25%, 1/15/39

 

 

1,000

 

 

1,006,990

 

New York Liberty Development Corp., Refunding RB, Second Priority, Bank of America Tower at One Bryant Park Project, 6.38%, 7/15/49

 

 

325

 

 

323,352

 

Triborough Bridge & Tunnel Authority, RB, General, Series A-2, 5.38%, 11/15/38

 

 

840

 

 

852,902

 

 

 

 

 

 




 

 

 

 

 

 

3,277,085

 









North Carolina — 2.7%

 

 

 

 

 

 

 

North Carolina Medical Care Commission, RB, Novant Health Obligation, Series A, 4.75%, 11/01/43

 

 

1,450

 

 

1,229,774

 









Pennsylvania — 2.8%

 

 

 

 

 

 

 

Pennsylvania Economic Development Financing Authority, RB, American Water Co. Project, 6.20%, 4/01/39

 

 

300

 

 

312,159

 

Pennsylvania Turnpike Commission, RB:

 

 

 

 

 

 

 

Sub-Series B, 5.25%, 6/01/39

 

 

425

 

 

405,135

 

Sub-Series C (AGC), 6.25%, 6/01/38

 

 

500

 

 

530,575

 

 

 

 

 

 




 

 

 

 

 

 

1,247,869

 









Texas — 8.3%

 

 

 

 

 

 

 

Conroe ISD Texas, GO, School Building, Series A, 5.75%, 2/15/35

 

 

470

 

 

495,305

 

Harris County Health Facilities Development Corp., Refunding RB, Memorial Hermann Healthcare System, Series B, 7.13%, 12/01/31

 

 

250

 

 

271,405

 

Lower Colorado River Authority, RB, 5.75%, 5/15/28

 

 

450

 

 

467,140

 

North Texas Tollway Authority, RB, System, First Tier, Series K-1 (AGC), 5.75%, 1/01/38

 

 

500

 

 

503,405

 

Tarrant County Cultural Education Facilities Finance Corp., RB, Scott & White Healthcare, 6.00%, 8/15/45

 

 

1,020

 

 

1,029,496

 

Texas Private Activity Bond Surface Transportation Corp., RB, Senior Lien, NTE Mobility Partners LLC, North Tarrant Express Managed Lanes Project, 6.88%, 12/31/39

 

 

1,000

 

 

1,009,150

 

 

 

 

 

 




 

 

 

 

 

 

3,775,901

 









Utah — 1.3%

 

 

 

 

 

 

 

City of Riverton Utah, RB, IHC Health Services Inc., 5.00%, 8/15/41

 

 

640

 

 

599,213

 









Virginia — 1.8%

 

 

 

 

 

 

 

Virginia Public School Authority, RB, School Financing, 6.50%, 12/01/35

 

 

750

 

 

821,033

 









West Virginia — 1.2%

 

 

 

 

 

 

 

West Virginia EDA, Refunding RB, Appalachian Power Co., Amos Project, Series A, 5.38%, 12/01/38 (d)

 

 

580

 

 

540,850

 









Total Municipal Bonds — 103.9%

 

 

 

 

 

47,069,166

 










 

 

 

 

 

 

 

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (e)

 

Par
(000)

 

Value

 







California — 20.2%

 

 

 

 

 

 

 

California Educational Facilities Authority, RB, University of Southern California, Series A, 5.25%, 10/01/39

 

$

1,005

 

$

1,015,603

 

Grossmont Union High School District, GO, Election of 2008, Series B, 5.00%, 8/01/40

 

 

1,300

 

 

1,191,580

 

Los Angeles Community College District California, GO, Election of 2008:

 

 

 

 

 

 

 

Series A, 6.00%, 8/01/33

 

 

2,079

 

 

2,224,906

 

Series C, 5.25%, 8/01/39

 

 

1,410

 

 

1,389,456

 

Los Angeles Unified School District California, GO, Series I, 5.00%, 1/01/34

 

 

200

 

 

190,820

 

San Diego Public Facilities Financing Authority, Refunding RB, Series B, 5.50%, 8/01/39

 

 

2,234

 

 

2,268,772

 

University of California, RB, Series O, 5.75%, 5/15/34

 

 

810

 

 

849,334

 

 

 

 

 

 




 

 

 

 

 

 

9,130,471

 









District of Columbia — 3.8%

 

 

 

 

 

 

 

District of Columbia, RB, Series A, 5.50%, 12/01/30

 

 

735

 

 

790,970

 

District of Columbia Water & Sewer Authority, RB, Series A, 5.50%, 10/01/39

 

 

899

 

 

931,479

 

 

 

 

 

 




 

 

 

 

 

 

1,722,449

 









Florida — 7.7%

 

 

 

 

 

 

 

Jacksonville Economic Development Commission, RB, Mayo Clinic Jacksonville, Series B, 5.50%, 11/15/36

 

 

3,510

 

 

3,509,684

 









Illinois — 8.1%

 

 

 

 

 

 

 

Illinois Finance Authority, RB, University of Chicago, Series B, 6.25%, 7/01/38

 

 

1,500

 

 

1,647,720

 

Illinois State Toll Highway Authority, RB, Series B, 5.50%, 1/01/33

 

 

2,000

 

 

2,006,273

 

 

 

 

 

 




 

 

 

 

 

 

3,653,993

 









Nevada — 3.5%

 

 

 

 

 

 

 

Clark County Water Reclamation District, GO, Limited Tax, 6.00%, 7/01/38

 

 

1,500

 

 

1,608,240

 









New Hampshire — 1.3%

 

 

 

 

 

 

 

New Hampshire Health & Education Facilities Authority, Refunding RB, Dartmouth College, 5.25%, 6/01/39

 

 

585

 

 

599,631

 









New Jersey — 2.2%

 

 

 

 

 

 

 

New Jersey Transportation Trust Fund Authority, RB, Transportation System, Series A (AGM), 5.00%, 12/15/32

 

 

1,000

 

 

1,001,640

 









New York — 6.2%

 

 

 

 

 

 

 

New York City Municipal Water Finance Authority, RB:

 

 

 

 

 

 

 

Fiscal 2009, Series A, 5.75%, 6/15/40

 

 

750

 

 

791,294

 

Series FF-2, 5.50%, 6/15/40

 

 

990

 

 

1,018,861

 

New York State Dormitory Authority, ERB, Series B, 5.25%, 3/15/38

 

 

1,000

 

 

1,007,800

 

 

 

 

 

 




 

 

 

 

 

 

2,817,955

 









Ohio — 1.8%

 

 

 

 

 

 

 

County of Allen Ohio, Refunding RB, Catholic Healthcare, Series A, 5.25%, 6/01/38

 

 

840

 

 

795,707

 









South Carolina — 2.3%

 

 

 

 

 

 

 

South Carolina State Public Service Authority, RB, Santee Cooper, Series A, 5.50%, 1/01/38

 

 

1,005

 

 

1,041,813

 









Texas — 5.6%

 

 

 

 

 

 

 

City of San Antonio Texas, Refunding RB, Series A, 5.25%, 2/01/31

 

 

1,050

 

 

1,096,035

 

Harris County Cultural Education Facilities Finance Corp., RB, Hospital, Texas Children’s Hospital Project, 5.50%, 10/01/39

 

 

1,450

 

 

1,431,396

 

 

 

 

 

 




 

 

 

 

 

 

2,527,431

 










 

 

 

 

See Notes to Financial Statements.

 

 





 

SEMI-ANNUAL REPORT

FEBRUARY 28, 2011

25




 

 


 

 

Schedule of Investments (concluded)

BlackRock Municipal Bond Investment Trust (BIE)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (e)

 

Par
(000)

 

Value

 







Virginia — 1.0%

 

 

 

 

 

 

 

Fairfax County IDA Virginia, Refunding RB, Health Care, Inova Health System, Series A, 5.50%, 5/15/35

 

$

460

 

$

463,869

 









Wisconsin — 1.8%

 

 

 

 

 

 

 

Wisconsin Health & Educational Facilities Authority, Refunding RB, Froedtert & Community Health Inc., 5.25%, 4/01/39

 

 

890

 

 

818,852

 









Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 65.5%

 

 

 

 

 

29,691,735

 









Total Long-Term Investments
(Cost — $76,772,880) — 169.4%

 

 

 

 

 

76,760,901

 










 

 

 

 

 

 

 

 


 

 

 

 

 

 

 

 

Short-Term Securities

 

Shares

 

 

 

 








FFI Institutional Tax-Exempt Fund, 0.13% (f)(g)

 

 

1,965,149

 

 

1,965,149

 









Total Short-Term Securities
(Cost — $1,965,149) — 4.3%

 

 

 

 

 

1,965,149

 









Total Investments (Cost — $78,738,029*) — 173.7%

 

 

 

 

 

78,726,050

 

Other Assets Less Liabilities — 1.6%

 

 

 

 

 

714,160

 

Liability for Trust Certificates, Including Interest Expense and Fees Payable — (35.9)%

 

 

 

 

 

(16,285,810

)

Preferred Shares, at Redemption Value — (39.4)%

 

 

 

 

 

(17,851,005

)

 

 

 

 

 




Net Assets Applicable to Common Shares — 100.0%

 

 

 

 

$

45,303,395

 

 

 

 

 

 





 

 

 


*

The cost and unrealized appreciation (depreciation) of investments as of February 28, 2011, as computed for federal income tax purposes, were as follows:


 

 

 

 

 

Aggregate cost

 

$

62,665,287

 

 

 




Gross unrealized appreciation

 

$

1,572,211

 

Gross unrealized depreciation

 

 

(1,787,280

)

 

 




Net unrealized depreciation

 

$

(215,069

)

 

 





 

 

(a)

Represents a zero-coupon bond. Rate shown reflects the current yield as of report date.

 

 

(b)

Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration to qualified institutional investors.

 

 

(c)

Security represents a beneficial interest in a trust. The collateral deposited into the trust is federally tax-exempt revenue bonds issued by various state or local governments, or their respective agencies or authorities. The security is subject to remarketing prior to its stated maturity.

 

 

(d)

Variable rate security. Rate shown is as of report date.

 

 

(e)

Securities represent bonds transferred to a TOB in exchange for which the Trust acquired residual interest certificates. These securities serve as collateral in a financing transaction. See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs.

 

 

(f)

Investments in companies considered to be an affiliate of the Trust during the period, for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:


 

 

 

 

 

 

 

 

 

 

 

 

 

 















Affiliate

 

Shares Held at
August 31,

2010

 

Net
Activity

 

Shares Held at
February 28,

2011

 

Income

 











FFI Institutional Tax-Exempt Fund

 

 

1,698,254

 

 

266,895

 

 

1,965,149

 

$

462

 
















 

 

(g)

Represents the current yield as of report date.

 

 

Financial futures contracts sold as of February 28,2011 were as follows:


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


















Contracts

 

Issue

 

Exchange

 

Expiration

 

Notional
Value

 

Unrealized
Depreciation

 













34

 

 

10-Year U.S.
Treasury Note

 

 

Chicago
Board of Trade

 

 

June
2011

 

$

4,029,467

 

$

(18,127

)



















 

 

 

Fair Value Measurements — Various inputs are used in determining the fair value of investments and derivatives. These inputs are summarized in three broad levels for financial statements purposes as follows:

 

 

 

 

Level 1 — price quotations in active markets/exchanges for identical assets and liabilities

 

 

 

 

Level 2 — other observable inputs (including, but not limited to: quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs)

 

 

 

 

Level 3 — unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the Trust’s own assumptions used in determining the fair value of investments and derivatives)

The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. For information about the Trust’s policy regarding valuation of investments and derivatives and other significant accounting policies, please refer to Note 1 of the Notes to Financial Statements.

The following tables summarize the inputs used as of February 28, 2011 in determining the fair valuation of the Trust’s investments and derivatives:

 

 

 

 

 

 

 

 

 

 

 

 

 

 











Valuation Inputs

 

Level 1

 

Level 2

 

Level 3

 

Total

 











Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments in Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-Term Investments1

 

 

 

$

76,760,901

 

 

 

$

76,760,901

 

Short-Term Securities

 

$

1,965,149

 

 

 

 

 

 

1,965,149

 

 

 













Total

 

$

1,965,149

 

$

76,760,901

 

 

 

$

78,726,050

 

 

 














 

 

 

 

1

See above Schedule of Investments for values in each state or political subdivision.

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

 

Derivative Financial Instruments2
















Valuation Inputs

 

Level 1

 

Level 2

 

Level 3

 

Total

 











Liabilities:

 

 

 

 

 

 

 

 

 

Interest rate contracts

 

$

(18,127

)

 

 

 

 

$

(18,127

)

 

 














 

 

 

 

2

Derivative financial instruments are financial futures contracts, which are shown at the unrealized appreciation/depreciation on the instrument.


 

 

 

See Notes to Financial Statements.


26

SEMI-ANNUAL REPORT

FEBRUARY 28, 2011




 

 


 

 

Schedule of Investments February 28, 2011 (Unaudited)

BlackRock Municipal Income Trust II (BLE)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 







Arizona — 3.4%

 

 

 

 

 

 

 

Salt River Project Agricultural Improvement & Power
District, RB, Series A, 5.00%, 1/01/38

 

$

2,135

 

$

2,125,478

 

Salt Verde Financial Corp., RB, Senior:

 

 

 

 

 

 

 

5.00%, 12/01/32

 

 

5,635

 

 

4,874,951

 

5.00%, 12/01/37

 

 

3,990

 

 

3,349,884

 

 

 

 

 

 




 

 

 

 

 

 

10,350,313

 









Arkansas — 0.5%

 

 

 

 

 

 

 

County of Little River Arkansas, Refunding RB,
Georgia-Pacific Corp. Project, AMT, 5.60%, 10/01/26

 

 

1,825

 

 

1,667,064

 









California — 21.2%

 

 

 

 

 

 

 

Bay Area Toll Authority, Refunding RB, San Francisco Bay
Area, Series F-1, 5.63%, 4/01/44

 

 

2,480

 

 

2,511,198

 

California County Tobacco Securitization Agency, RB,
CAB, Stanislaus, Sub-Series C, 6.30%, 6/01/55 (a)

 

 

9,710

 

 

55,833

 

California HFA, RB, AMT, Home Mortgage:

 

 

 

 

 

 

 

Series G, 5.50%, 8/01/42

 

 

7,270

 

 

7,174,109

 

Series K, 5.50%, 2/01/42

 

 

2,535

 

 

2,573,684

 

California Health Facilities Financing Authority,
Refunding RB, Sutter Health, Series B, 6.00%,
8/15/42

 

 

3,500

 

 

3,465,700

 

California State Public Works Board, RB, Various Capital
Projects, Sub-Series I-1, 6.38%, 11/01/34

 

 

1,280

 

 

1,312,397

 

California Statewide Communities Development
Authority, RB, Health Facility, Memorial Health
Services, Series A, 5.50%, 10/01/33

 

 

5,000

 

 

5,014,400

 

Los Angeles Department of Airports, RB, Series A,
5.25%, 5/15/39

 

 

860

 

 

837,709

 

Los Angeles Department of Airports, Refunding RB,
Senior, Los Angeles International Airport, Series A,
5.00%, 5/15/40

 

 

6,500

 

 

6,074,315

 

Los Angeles Unified School District California, GO:

 

 

 

 

 

 

 

Series D, 5.00%, 7/01/27

 

 

2,375

 

 

2,374,834

 

Series I, 5.00%, 7/01/26

 

 

1,250

 

 

1,256,687

 

San Francisco City & County Public Utilities Commission,
RB, Series B, 5.00%, 11/01/39

 

 

10,340

 

 

9,988,026

 

San Francisco City & County Redevelopment Agency,
Special Tax Bonds, District No. 6, Mission Bay South
Public Improvements, 6.63%, 8/01/27

 

 

3,120

 

 

3,096,694

 

State of California, GO, Various Purpose:

 

 

 

 

 

 

 

6.00%, 3/01/33

 

 

2,760

 

 

2,896,951

 

6.50%, 4/01/33

 

 

10,670

 

 

11,576,096

 

University of California, RB, Limited Project, Series B,
4.75%, 5/15/38

 

 

5,095

 

 

4,545,351

 

 

 

 

 

 




 

 

 

 

 

 

64,753,984

 









Colorado — 2.3%

 

 

 

 

 

 

 

City of Colorado Springs Colorado, RB, Subordinate Lien,
Improvement, Series C (AGM), 5.00%, 11/15/45

 

 

1,375

 

 

1,333,049

 

Colorado Health Facilities Authority, Refunding RB:

 

 

 

 

 

 

 

Catholic Healthcare, Series A, 5.50%, 7/01/34

 

 

2,330

 

 

2,326,761

 

Sisters of Leavenworth, Series A, 5.00%, 1/01/40

 

 

2,400

 

 

2,169,624

 

Park Creek Metropolitan District Colorado, Refunding RB,
Senior, Limited Tax, Property Tax, 5.50%, 12/01/37

 

 

1,375

 

 

1,195,274

 

 

 

 

 

 




 

 

 

 

 

 

7,024,708

 









Connecticut — 0.5%

 

 

 

 

 

 

 

Connecticut State Health & Educational Facility
Authority, RB, Ascension Health Senior Credit,
5.00%, 11/15/40

 

 

1,505

 

 

1,429,073

 










 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 







Delaware — 1.7%

 

 

 

 

 

 

 

County of Sussex Delaware, RB, NRG Energy, Inc., Indian
River Project, 6.00%, 10/01/40

 

$

1,240

 

$

1,207,301

 

Delaware State EDA, RB, Exempt Facilities, Indian River
Power, 5.38%, 10/01/45

 

 

4,430

 

 

3,848,164

 

 

 

 

 

 




 

 

 

 

 

 

5,055,465

 









District of Columbia — 6.7%

 

 

 

 

 

 

 

District of Columbia, Refunding RB, Friendship Public
Charter School Inc. (ACA), 5.25%, 6/01/33

 

 

1,265

 

 

961,274

 

District of Columbia Tobacco Settlement Financing Corp.,
Refunding RB, Asset-Backed:

 

 

 

 

 

 

 

6.50%, 5/15/33

 

 

7,500

 

 

7,243,050

 

6.75%, 5/15/40

 

 

11,500

 

 

10,804,250

 

Metropolitan Washington Airports Authority, RB, First
Senior Lien, Series A:

 

 

 

 

 

 

 

5.00%, 10/01/39

 

 

550

 

 

517,352

 

5.25%, 10/01/44

 

 

865

 

 

816,854

 

 

 

 

 

 




 

 

 

 

 

 

20,342,780

 









Florida — 5.5%

 

 

 

 

 

 

 

City of Leesburg Florida, RB, Leesburg Regional Medical
Center Project, 5.50%, 7/01/32

 

 

1,440

 

 

1,287,086

 

County of Miami-Dade Florida, RB, Miami International
Airport, Series A, AMT (AGC), 5.25%, 10/01/38

 

 

2,855

 

 

2,574,896

 

County of Miami-Dade Florida, Refunding RB, Miami
International Airport, Series A-1, 5.38%, 10/01/41

 

 

1,255

 

 

1,162,105

 

County of Orange Florida, Refunding RB (Syncora),
4.75%, 10/01/32

 

 

905

 

 

818,735

 

Live Oak Community Development District No. 1,
Special Assessment Bonds, Series A, 6.30%,
5/01/34

 

 

3,115

 

 

3,092,136

 

Miami Beach Health Facilities Authority, RB, Mount
Sinai Medical Center of Florida, 6.75%, 11/15/21

 

 

3,900

 

 

3,952,962

 

Mid-Bay Bridge Authority, RB, Series A, 7.25%,
10/01/40

 

 

2,500

 

 

2,483,475

 

Stevens Plantation Community Development District,
Special Assessment Bonds, Series A, 7.10%,
5/01/35

 

 

1,960

 

 

1,505,065

 

 

 

 

 

 




 

 

 

 

 

 

16,876,460

 









Georgia — 1.0%

 

 

 

 

 

 

 

DeKalb Private Hospital Authority, Refunding RB,
Children’s Healthcare, 5.25%, 11/15/39

 

 

915

 

 

874,466

 

Private Colleges & Universities Authority, Refunding RB,
Emory University, Series C, 5.00%, 9/01/38

 

 

2,150

 

 

2,127,790

 

 

 

 

 

 




 

 

 

 

 

 

3,002,256

 









Guam — 0.8%

 

 

 

 

 

 

 

Territory of Guam, GO, Series A:

 

 

 

 

 

 

 

6.00%, 11/15/19

 

 

695

 

 

696,328

 

6.75%, 11/15/29

 

 

995

 

 

1,026,561

 

7.00%, 11/15/39

 

 

680

 

 

708,220

 

 

 

 

 

 




 

 

 

 

 

 

2,431,109

 









Hawaii — 0.5%

 

 

 

 

 

 

 

State of Hawaii, Refunding RB, Series A, 5.25%,
7/01/30

 

 

1,480

 

 

1,474,554

 









Illinois — 9.5%

 

 

 

 

 

 

 

Illinois Finance Authority, RB:

 

 

 

 

 

 

 

MJH Education Assistance IV LLC, Sub-Series B,
5.38%, 6/01/35 (b)(c)

 

 

900

 

 

241,632

 

Navistar International, Recovery Zone, 6.50%,
10/15/40

 

 

1,675

 

 

1,692,738

 

Illinois Finance Authority, Refunding RB:

 

 

 

 

 

 

 

Central DuPage Health, Series B, 5.50%, 11/01/39

 

 

1,750

 

 

1,686,352

 

Friendship Village Schaumburg, Series A, 5.63%,
2/15/37

 

 

455

 

 

347,142

 

Illinois Sports Facilities Authority, RB, State Tax
Supported (AMBAC), 5.50%, 6/15/30

 

 

15,000

 

 

15,260,250

 


 

 

 

See Notes to Financial Statements.




SEMI-ANNUAL REPORT

FEBRUARY 28, 2011

27




 

 


 

 

Schedule of Investments (continued)

BlackRock Municipal Income Trust II (BLE)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 







Illinois (concluded)

 

 

 

 

 

 

 

Metropolitan Pier & Exposition Authority, Refunding RB
(AGM), McCormick Place Extension Project:

 

 

 

 

 

 

 

CAB, Series B, 6.23%, 6/15/43 (a)

 

$

10,340

 

$

1,163,353

 

Series B, 5.00%, 6/15/50

 

 

3,430

 

 

2,927,608

 

Series B-2, 5.00%, 6/15/50

 

 

2,725

 

 

2,258,889

 

Railsplitter Tobacco Settlement Authority, RB:

 

 

 

 

 

 

 

5.50%, 6/01/23

 

 

1,470

 

 

1,404,247

 

6.00%, 6/01/28

 

 

1,255

 

 

1,225,897

 

State of Illinois, RB, Build Illinois, Series B, 5.25%,
6/15/34

 

 

685

 

 

660,861

 

 

 

 

 

 




 

 

 

 

 

 

28,868,969

 









Indiana — 2.9%

 

 

 

 

 

 

 

Indiana Finance Authority, RB, Sisters of St. Francis
Health, 5.25%, 11/01/39

 

 

915

 

 

841,415

 

Indiana Finance Authority, Refunding RB, Ascension
Health Senior Credit, Series B-5, 5.00%, 11/15/36

 

 

1,500

 

 

1,366,605

 

Indiana Health Facility Financing Authority,
Refunding RB:

 

 

 

 

 

 

 

Ascension Health, Series F, 5.38%, 11/15/25

 

 

2,095

 

 

2,131,558

 

Methodist Hospital Inc., 5.38%, 9/15/22

 

 

3,675

 

 

3,359,428

 

Indiana Municipal Power Agency, RB, Series B, 6.00%,
1/01/39

 

 

1,200

 

 

1,243,104

 

 

 

 

 

 




 

 

 

 

 

 

8,942,110

 









Kansas — 0.6%

 

 

 

 

 

 

 

Kansas Development Finance Authority, Refunding RB,
Sisters of Leavenworth, Series A, 5.00%, 1/01/40

 

 

1,820

 

 

1,714,058

 









Kentucky — 0.3%

 

 

 

 

 

 

 

Kentucky Economic Development Finance Authority,
Refunding RB, Owensboro Medical Health System,
Series A, 6.38%, 6/01/40

 

 

1,105

 

 

1,036,269

 









Louisiana — 1.2%

 

 

 

 

 

 

 

Louisiana Local Government Environmental Facilities &
Community Development Authority, RB, Westlake
Chemical Corp., Series A-1, 6.50%, 11/01/35

 

 

3,650

 

 

3,715,079

 









Maryland — 1.5%

 

 

 

 

 

 

 

Maryland EDC, RB, Transportation Facilities Project,
Series A, 5.75%, 6/01/35

 

 

475

 

 

426,327

 

Maryland EDC, Refunding RB, CNX Marine Terminals,
Inc., 5.75%, 9/01/25

 

 

1,000

 

 

935,830

 

Maryland Health & Higher Educational Facilities
Authority, RB, Union Hospital of Cecil County Issue,
5.63%, 7/01/32

 

 

1,000

 

 

1,001,260

 

Maryland Health & Higher Educational Facilities
Authority, Refunding RB, Charlestown Community,
6.25%, 1/01/41

 

 

2,400

 

 

2,321,112

 

 

 

 

 

 




 

 

 

 

 

 

4,684,529

 









Massachusetts — 1.3%

 

 

 

 

 

 

 

Massachusetts Bay Transportation Authority, Refunding
RB, Senior Series A, 5.25%, 7/01/29

 

 

2,000

 

 

2,199,040

 

Massachusetts Health & Educational Facilities Authority,
Refunding RB, Partners Healthcare, Series J1,
5.00%, 7/01/39

 

 

1,955

 

 

1,850,153

 

 

 

 

 

 




 

 

 

 

 

 

4,049,193

 









Michigan — 1.1%

 

 

 

 

 

 

 

Kalamazoo Hospital Finance Authority, Refunding RB,
Bronson Methodist Hospital, 5.50%, 5/15/36

 

 

1,500

 

 

1,417,875

 

Michigan State Hospital Finance Authority, Refunding
RB, Henry Ford Health System, Series A, 5.25%,
11/15/46

 

 

2,305

 

 

1,922,577

 

 

 

 

 

 




 

 

 

 

 

 

3,340,452

 










 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 







Missouri — 2.1%

 

 

 

 

 

 

 

370/Missouri Bottom Road/Taussig Road
Transportation Development District, RB, 7.20%,
5/01/33

 

$

6,000

 

$

5,434,440

 

Missouri State Health & Educational Facilities Authority,
RB, Senior Living Facilities, Lutheran Senior Home,
5.50%, 2/01/42

 

 

1,135

 

 

973,807

 

 

 

 

 

 




 

 

 

 

 

 

6,408,247

 









Multi-State — 4.3%

 

 

 

 

 

 

 

Centerline Equity Issuer Trust (d)(e):

 

 

 

 

 

 

 

5.75%, 5/15/15

 

 

1,000

 

 

1,050,640

 

6.00%, 5/15/15

 

 

5,000

 

 

5,237,300

 

6.00%, 5/15/19

 

 

3,500

 

 

3,647,385

 

6.30%, 5/15/19

 

 

3,000

 

 

3,138,900

 

 

 

 

 

 




 

 

 

 

 

 

13,074,225

 









Nebraska — 0.9%

 

 

 

 

 

 

 

Lancaster County Hospital Authority No. 1, RB,
Immanuel Obligation Group, 5.63%, 1/01/40

 

 

1,245

 

 

1,209,455

 

Sarpy County Hospital Authority No. 1, RB, Immanuel
Obligation Group, 5.63%, 1/01/40

 

 

1,635

 

 

1,536,344

 

 

 

 

 

 




 

 

 

 

 

 

2,745,799

 









Nevada — 0.8%

 

 

 

 

 

 

 

County of Clark Nevada, Refunding RB, Alexander
Dawson School Nevada Project, 5.00%, 5/15/29

 

 

2,465

 

 

2,310,642

 









New Jersey — 9.9%

 

 

 

 

 

 

 

New Jersey EDA, RB:

 

 

 

 

 

 

 

Cigarette Tax, 5.75%, 6/15/34

 

 

3,810

 

 

3,270,047

 

Continental Airlines Inc. Project, AMT, 7.20%,
11/15/30 (f)

 

 

10,100

 

 

10,115,756

 

Kapkowski Road Landfill Project, Series 1998B,
AMT, 6.50%, 4/01/31

 

 

10,000

 

 

9,507,500

 

New Jersey EDA, Special Assessment Bonds, Refunding,
Kapkowski Road Landfill Project, 6.50%, 4/01/28

 

 

7,475

 

 

7,463,713

 

 

 

 

 

 




 

 

 

 

 

 

30,357,016

 









New Mexico — 1.9%

 

 

 

 

 

 

 

New Mexico Income Housing Authority, RB, Villa Del
Oso Apartments Project, Series A, 6.00%, 1/01/13 (g)

 

 

5,200

 

 

5,807,048

 









New York — 4.1%

 

 

 

 

 

 

 

Albany Industrial Development Agency, RB, New
Covenant Charter School Project, Series A, 7.00%,
5/01/35 (b)(c)

 

 

985

 

 

295,471

 

Metropolitan Transportation Authority, Refunding RB,
Transportation, Series D, 5.25%, 11/15/40

 

 

1,325

 

 

1,263,639

 

New York City Industrial Development Agency, RB,
American Airlines Inc., JFK International Airport, AMT,
7.75%, 8/01/31 (f)

 

 

6,700

 

 

6,835,340

 

New York Liberty Development Corp., Refunding RB,
Second Priority, Bank of America Tower at One Bryant
Park Project, 6.38%, 7/15/49

 

 

1,335

 

 

1,328,232

 

Port Authority of New York & New Jersey, RB, JFK
International Air Terminal:

 

 

 

 

 

 

 

6.00%, 12/01/36

 

 

1,410

 

 

1,377,330

 

6.00%, 12/01/42

 

 

1,375

 

 

1,330,945

 

 

 

 

 

 




 

 

 

 

 

 

12,430,957

 










 

 

 

See Notes to Financial Statements.




28

SEMI-ANNUAL REPORT

FEBRUARY 28, 2011




 

 


 

 

Schedule of Investments (continued)

BlackRock Municipal Income Trust II (BLE)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 







North Carolina — 2.8%

 

 

 

 

 

 

 

Gaston County Industrial Facilities & Pollution Control
Financing Authority North Carolina, RB, Exempt

 

 

 

 

 

 

 

Facilities, National Gypsum Co. Project, AMT, 5.75%,
8/01/35

 

$

7,500

 

$

5,649,825

 

North Carolina Capital Facilities Finance Agency,
Refunding RB, Duke Energy Carolinas, Series B,
4.63%, 11/01/40

 

 

1,760

 

 

1,565,186

 

North Carolina Medical Care Commission, RB, Duke
University Health System, Series A, 5.00%, 6/01/42

 

 

1,525

 

 

1,435,452

 

 

 

 

 

 




 

 

 

 

 

 

8,650,463

 









Ohio — 2.0%

 

 

 

 

 

 

 

County of Allen Ohio, Refunding RB, Catholic Healthcare,
Series A, 5.25%, 6/01/38

 

 

3,405

 

 

3,225,454

 

County of Montgomery Ohio, Refunding RB, Catholic
Healthcare, Series A, 5.00%, 5/01/39

 

 

3,025

 

 

2,789,111

 

 

 

 

 

 




 

 

 

 

 

 

6,014,565

 









Oklahoma — 1.3%

 

 

 

 

 

 

 

Tulsa Airports Improvement Trust, RB, Series A,
Mandatory Put Bonds, AMT, 7.75%, 6/01/35 (f)

 

 

3,925

 

 

4,012,410

 









Pennsylvania — 3.3%

 

 

 

 

 

 

 

Allegheny County Hospital Development Authority,
Refunding RB, Health System, West Penn, Series A,
5.38%, 11/15/40

 

 

2,000

 

 

1,281,540

 

Pennsylvania Economic Development Financing
Authority, RB:

 

 

 

 

 

 

 

Amtrak Project, Series A, AMT, 6.38%, 11/01/41

 

 

5,175

 

 

5,182,814

 

Aqua Pennsylvania Inc. Project, 5.00%, 11/15/40

 

 

2,065

 

 

1,996,628

 

Pennsylvania Turnpike Commission, RB, Sub-Series D,
5.13%, 12/01/40

 

 

1,700

 

 

1,583,533

 

 

 

 

 

 




 

 

 

 

 

 

10,044,515

 









Puerto Rico — 7.9%

 

 

 

 

 

 

 

Commonwealth of Puerto Rico, GO, Refunding, Public
Improvement, Series C, 6.00%, 7/01/39

 

 

3,220

 

 

3,125,847

 

Puerto Rico Sales Tax Financing Corp., RB:

 

 

 

 

 

 

 

CAB, Series A, 6.48%, 8/01/31 (a)

 

 

11,700

 

 

3,124,368

 

CAB, Series A, 6.55%, 8/01/32 (a)

 

 

8,600

 

 

2,130,564

 

CAB, Series A, 6.57%, 8/01/33 (a)

 

 

13,600

 

 

3,143,232

 

CAB, Series A, 6.60%, 8/01/34 (a)

 

 

5,500

 

 

1,190,750

 

CAB, Series A, 6.61%, 8/01/35 (a)

 

 

14,055

 

 

2,823,649

 

CAB, Series A, 6.63%, 8/01/36 (a)

 

 

11,875

 

 

2,217,538

 

First Sub-Series A, 6.50%, 8/01/44

 

 

6,100

 

 

6,339,913

 

 

 

 

 

 




 

 

 

 

 

 

24,095,861

 









South Carolina — 3.8%

 

 

 

 

 

 

 

County of Greenwood South Carolina, RB, Facilities,
Self Memorial Hospital:

 

 

 

 

 

 

 

5.50%, 10/01/26

 

 

2,280

 

 

2,280,684

 

5.50%, 10/01/31

 

 

3,250

 

 

3,190,915

 

South Carolina Jobs-EDA, Refunding RB, Palmetto
Health Alliance, Series A, 6.25%, 8/01/31

 

 

2,640

 

 

2,627,777

 

South Carolina State Ports Authority, RB, 5.25%,
7/01/40

 

 

3,595

 

 

3,490,026

 

 

 

 

 

 




 

 

 

 

 

 

11,589,402

 









Tennessee — 3.9%

 

 

 

 

 

 

 

Knox County Health Educational & Housing Facilities
Board Tennessee, Refunding RB, CAB, Series A (AGM),
5.77%, 1/01/21 (a)

 

 

20,405

 

 

11,943,455

 










 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 







Texas — 17.5%

 

 

 

 

 

 

 

Brazos River Authority, RB, TXU Electric, Series A, AMT,
8.25%, 10/01/30

 

$

2,400

 

$

767,976

 

Brazos River Authority, Refunding RB, TXU Electric Co.
Project, Series C, Mandatory Put Bonds, AMT, 5.75%,
5/01/36 (f)

 

 

1,350

 

 

1,255,500

 

City of Dallas Texas, Refunding RB, 5.00%, 10/01/35

 

 

1,650

 

 

1,667,474

 

City of Houston Texas, RB, Senior Lien, Series A, 5.50%,
7/01/39

 

 

1,675

 

 

1,675,871

 

City of Houston Texas, Refunding RB, Combined, First
Lien, Series A (AGC), 6.00%, 11/15/35

 

 

9,145

 

 

9,927,172

 

Gulf Coast Waste Disposal Authority, Refunding RB,
Series A, AMT, 6.10%, 8/01/24

 

 

10,000

 

 

10,029,100

 

Harris County-Houston Sports Authority, Refunding RB,
Third Lien, Series A-3 (NPFGC), 5.96%, 11/15/36 (a)

 

 

25,375

 

 

2,995,011

 

Lower Colorado River Authority, Refunding RB
(NPFGC) (g):

 

 

 

 

 

 

 

5.00%, 5/15/13

 

 

35

 

 

38,171

 

5.00%, 5/15/13

 

 

30

 

 

32,753

 

Series A, 5.00%, 5/15/13

 

 

5

 

 

5,459

 

North Texas Tollway Authority, RB, Toll, 2nd Tier, Series F,
6.13%, 1/01/31

 

 

6,790

 

 

6,881,394

 

San Antonio Energy Acquisition Public Facility Corp., RB,
Gas Supply, 5.50%, 8/01/24

 

 

3,600

 

 

3,593,412

 

Tarrant County Cultural Education Facilities Finance
Corp., RB, Scott & White Healthcare, 6.00%, 8/15/45

 

 

4,410

 

 

4,451,057

 

Texas Private Activity Bond Surface Transportation Corp.,
RB, Senior Lien:

 

 

 

 

 

 

 

LBJ Infrastructure Group LLC, LBJ Freeway Managed
Lanes Project, 7.00%, 6/30/40

 

 

4,710

 

 

4,776,976

 

NTE Mobility Partners LLC, North Tarrant Express
Managed Lanes Project, 6.88%, 12/31/39

 

 

4,200

 

 

4,238,430

 

Texas State Turnpike Authority, RB, First Tier, Series A
(AMBAC), 5.00%, 8/15/42

 

 

1,390

 

 

1,187,435

 

 

 

 

 

 




 

 

 

 

 

 

53,523,191

 









Utah — 1.2%

 

 

 

 

 

 

 

City of Riverton Utah, RB, IHC Health Services Inc.,
5.00%, 8/15/41

 

 

3,960

 

 

3,707,629

 









Virginia — 2.9%

 

 

 

 

 

 

 

City of Norfolk Virginia, Refunding RB, Series B (AMBAC),
5.50%, 2/01/31

 

 

1,240

 

 

1,152,109

 

Halifax County IDA, Refunding RB, Old Dominion Electric
Co-op Project, AMT (AMBAC), 5.63%, 6/01/28

 

 

5,000

 

 

5,097,000

 

Virginia HDA, RB, Sub-Series H-1 (NPFGC), 5.35%,
7/01/31

 

 

2,490

 

 

2,492,689

 

 

 

 

 

 




 

 

 

 

 

 

8,741,798

 









Washington — 0.7%

 

 

 

 

 

 

 

Washington Health Care Facilities Authority, RB, Swedish
Health Services, Series A, 6.75%, 11/15/41 (h)

 

 

2,190

 

 

2,259,795

 









Wisconsin — 2.1%

 

 

 

 

 

 

 

Wisconsin Health & Educational Facilities Authority, RB:

 

 

 

 

 

 

 

Ascension Health Senior Credit Group, 5.00%,
11/15/30

 

 

1,790

 

 

1,701,556

 

Ascension Health Senior Credit Group, 5.00%,
11/15/33

 

 

910

 

 

838,037

 

Aurora Health Care, 6.40%, 4/15/33

 

 

3,930

 

 

3,967,689

 

 

 

 

 

 




 

 

 

 

 

 

6,507,282

 









Wyoming — 1.6%

 

 

 

 

 

 

 

County of Sweetwater Wyoming, Refunding RB, Idaho
Power Co. Project, 5.25%, 7/15/26

 

 

3,355

 

 

3,459,139

 

Wyoming Municipal Power Agency, RB, Series A:

 

 

 

 

 

 

 

5.50%, 1/01/33

 

 

800

 

 

811,768

 

5.50%, 1/01/38

 

 

750

 

 

752,910

 

 

 

 

 

 




 

 

 

 

 

 

5,023,817

 









Total Municipal Bonds — 137.5%

 

 

 

 

 

420,006,542

 










 

 

 

See Notes to Financial Statements.




SEMI-ANNUAL REPORT

FEBRUARY 28, 2011

29




 

 


 

 

Schedule of Investments (continued)

BlackRock Municipal Income Trust II (BLE)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (i)

 

Par
(000)

 

Value

 







Alabama — 0.8%

 

 

 

 

 

 

 

Alabama Special Care Facilities Financing Authority-
Birmingham, Refunding RB, Ascension Health Senior
Credit, Series C-2, 5.00%, 11/15/36

 

$

2,519

 

$

2,392,955

 









California — 2.4%

 

 

 

 

 

 

 

California Educational Facilities Authority, RB, University
of Southern California, Series A, 5.25%, 10/01/39

 

 

2,850

 

 

2,880,067

 

Los Angeles Community College District California, GO,
Election of 2001, Series A (AGM), 5.00%, 8/01/32

 

 

2,530

 

 

2,474,568

 

San Diego Community College District California, GO,
Election of 2002, 5.25%, 8/01/33

 

 

1,840

 

 

1,855,691

 

 

 

 

 

 




 

 

 

 

 

 

7,210,326

 









Colorado — 2.1%

 

 

 

 

 

 

 

Colorado Health Facilities Authority, RB (AGM),
Catholic Health:

 

 

 

 

 

 

 

Series C-3, 5.10%, 10/01/41

 

 

4,230

 

 

3,933,477

 

Series C-7, 5.00%, 9/01/36

 

 

2,710

 

 

2,532,387

 

 

 

 

 

 




 

 

 

 

 

 

6,465,864

 









Connecticut — 3.4%

 

 

 

 

 

 

 

Connecticut State Health & Educational Facility
Authority, RB, Yale University:

 

 

 

 

 

 

 

Series T-1, 4.70%, 7/01/29

 

 

5,170

 

 

5,293,253

 

Series X-3, 4.85%, 7/01/37

 

 

5,130

 

 

5,131,898

 

 

 

 

 

 




 

 

 

 

 

 

10,425,151

 









Georgia — 1.5%

 

 

 

 

 

 

 

Private Colleges & Universities Authority, Refunding RB,
Emory University, Series C, 5.00%, 9/01/38

 

 

4,638

 

 

4,590,517

 









Massachusetts — 1.0%

 

 

 

 

 

 

 

Massachusetts Water Resources Authority, Refunding
RB, General, Series A, 5.00%, 8/01/41

 

 

3,150

 

 

3,151,355

 









New Hampshire — 0.7%

 

 

 

 

 

 

 

New Hampshire Health & Education Facilities Authority,
Refunding RB, Dartmouth College, 5.25%, 6/01/39

 

 

2,219

 

 

2,275,522

 









New York — 4.5%

 

 

 

 

 

 

 

New York City Municipal Water Finance Authority, RB,
Series FF-2, 5.50%, 6/15/40

 

 

1,710

 

 

1,759,851

 

New York State Dormitory Authority, ERB, Series F,
5.00%, 3/15/35

 

 

9,284

 

 

9,194,276

 

New York State Environmental Facilities Corp., RB,
Revolving Funds, New York City Municipal Water
Project, Series B, 5.00%, 6/15/31

 

 

2,850

 

 

2,868,639

 

 

 

 

 

 




 

 

 

 

 

 

13,822,766

 









Virginia — 2.0%

 

 

 

 

 

 

 

University of Virginia, Refunding RB, General, 5.00%,
6/01/40

 

 

5,910

 

 

6,006,628

 









Washington — 3.7%

 

 

 

 

 

 

 

Central Puget Sound Regional Transit Authority, RB,
Series A (AGM), 5.00%, 11/01/32

 

 

3,029

 

 

3,059,993

 

State of Washington, GO, Various Purpose, Series E,
5.00%, 2/01/34

 

 

8,113

 

 

8,192,336

 

 

 

 

 

 




 

 

 

 

 

 

11,252,329

 









Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 22.1%

 

 

 

 

 

67,593,413

 









Total Long-Term Investments
(Cost — $502,560,543) — 159.6%

 

 

 

 

 

487,599,955

 










 

 

 

 

 

 

 

 

Short-Term Securities

 

 

Shares

 

 

Value

 









FFI Institutional Tax-Exempt Fund, 0.13% (j)(k)

 

 

4,910,889

 

$

4,910,889

 









Total Short-Term Securities
(Cost — $4,910,889) — 1.6%

 

 

 

 

 

4,910,889

 









Total Investments (Cost — $507,471,432*) — 161.2%

 

 

 

 

 

492,510,844

 

Other Assets Less Liabilities — 1.2%

 

 

 

 

 

3,686,182

 

Liability for Trust Certificates, Including

 

 

 

 

 

 

 

Interest Expense and Fees Payable — (12.9)%

 

 

 

 

 

(39,282,372

)

Preferred Shares, at Redemption Value — (49.5)%

 

 

 

 

 

(151,309,510

)

 

 

 

 

 




Net Assets Applicable to Common Shares — 100.0%

 

 

 

 

$

305,605,144

 

 

 

 

 

 





 

 

 


*

The cost and unrealized appreciation (depreciation) of investments as of February 28, 2011, as computed for federal income tax purposes, were as follows:


 

 

 

 

 

Aggregate cost

 

$

467,400,876

 

 

 




Gross unrealized appreciation

 

$

8,280,053

 

Gross unrealized depreciation

 

 

(22,422,522

)

 

 




Net unrealized depreciation

 

$

(14,142,469

)

 

 





 

 

(a)

Represents a zero-coupon bond. Rate shown reflects the current yield as of report date.

 

 

(b)

Issuer filed for bankruptcy and/or is in default of interest payments.

 

 

(c)

Non-income producing security.

 

 

(d)

Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration to qualified institutional investors.

 

 

(e)

Security represents a beneficial interest in a trust. The collateral deposited into the trust is federally tax-exempt revenue bonds issued by various state or local governments, or their respective agencies or authorities. The security is subject to remarketing prior to its stated maturity.

 

 

(f)

Variable rate security. Rate shown is as of report date.

 

 

(g)

US government securities, held in escrow, are used to pay interest on this security as well as to retire the bond in full at the date indicated, typically at a premium to par.

 

 

(h)

When-issued security. Unsettled when-issued transactions were as follows:


 

 

 

 

 

 

 

 









Counterparty

 

Value

 

Unrealized
Appreciation

 








Citigroup Global Markets

 

$

2,259,795

 

$

11,651

 










 

 

(i)

Securities represent bonds transferred to a TOB in exchange for which the Trust acquired residual interest certificates. These securities serve as collateral in a financing transaction. See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs.

 

 

(j)

Investments in companies considered to be an affiliate of the Trust during the period, for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:


 

 

 

 

 

 

 

 

 

 

 

 

 

 











Affiliate

 

Shares Held at
August 31,
2010

 

Net
Activity

 

Shares Held at
February 28,
2011

 

Income

 











FFI Institutional
Tax-Exempt Fund

 

 

9,440,330

 

 

(4,529,441

)

 

4,910,889

 

$

5,195

 
















 

 

(k)

Represents the current yield as of report date.

 

 

Financial futures contracts sold as of February 28,2011 were as follows:


 

 

 

 

 

 

 

 

 

 

 

 

 

 













Contracts

 

Issue

 

Exchange

 

Expiration

 

Notional
Value

 

Unrealized
Depreciation

 













228

 

10-Year U.S.
Treasury Note

 

Chicago
Board of Trade

 

June
2011

 

$

27,021,129

 

$

(121,558

)














 

 

 

See Notes to Financial Statements.




30

SEMI-ANNUAL REPORT

FEBRUARY 28, 2011




 

 


 

 

Schedule of Investments (concluded)

BlackRock Municipal Income Trust II (BLE)


 

 

 

Fair Value Measurements — Various inputs are used in determining the fair value of investments and derivatives. These inputs are summarized in three broad levels for financial statement purposes as follows:

 

 

 

Level 1 — price quotations in active markets/exchanges for identical assets and liabilities

 

 

 

 

Level 2 — other observable inputs (including, but not limited to: quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs)

 

 

 

 

Level 3 — unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the Trust’s own assumptions used in determining the fair value of investments and derivatives)

 

 

 

 

The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. For information about the Trust’s policy regarding valuation of investments and derivatives and other significant accounting policies, please refer to Note 1 of the Notes to Financial Statements.

 

 

 

 

The following tables summarize the inputs used as of February 28, 2011 in determining the fair valuation of the Trust’s investments and derivatives:

 

 

 

 

 

 

 

 

 

 

 

 

 

 











Valuation Inputs

 

Level 1

 

Level 2

 

Level 3

 

Total

 











Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments in
Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-Term
Investments1

 

 

 

$

487,599,955

 

 

 

$

487,599,955

 

Short-Term
Securities

 

$

4,910,889

 

 

 

 

 

 

4,910,889

 

 

 













Total

 

$

4,910,889

 

$

487,599,955

 

 

 

$

492,510,844

 

 

 














 

 

 

 

1

See above Schedule of Investments for values in each state or political subdivision.


 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

 

Derivative Financial Instruments2


Valuation Inputs

 

Level 1

 

Level 2

 

Level 3

 

Total

 











Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate
contracts

 

$

(121,558

)

 

 

 

 

$

(121,558

)

 

 














 

 

 

 

2

Derivative financial instruments are financial futures contracts, which are shown at the unrealized appreciation/depreciation on the instrument.


 

 

 

See Notes to Financial Statements.




SEMI-ANNUAL REPORT

FEBRUARY 28, 2011

31




 

 



 

 

Schedule of Investments February 28, 2011 (Unaudited)

BlackRock MuniHoldings Investment Quality Fund (MFL)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 









Alabama — 3.9%

 

 

 

 

 

 

 

Birmingham Airport Authority, RB (AGM), 5.00%,
7/01/25

 

$

2,480

 

$

2,492,698

 

Birmingham Special Care Facilities Financing Authority,
RB, Children’s Hospital (AGC):

 

 

 

 

 

 

 

6.13%, 6/01/34

 

 

4,980

 

 

5,278,750

 

6.00%, 6/01/39

 

 

10,995

 

 

11,448,104

 

 

 

 

 

 




 

 

 

 

 

 

19,219,552

 









Arizona — 2.6%

 

 

 

 

 

 

 

State of Arizona, COP, Department of Administration,
Series A (AGM):

 

 

 

 

 

 

 

5.25%, 10/01/24

 

 

10,260

 

 

10,603,402

 

5.25%, 10/01/28

 

 

2,240

 

 

2,267,687

 

 

 

 

 

 




 

 

 

 

 

 

12,871,089

 









California — 19.9%

 

 

 

 

 

 

 

California Educational Facilities Authority, RB, University
of Southern California, Series A, 5.25%, 10/01/38

 

 

8,920

 

 

9,019,726

 

California Health Facilities Financing Authority,
Refunding RB, Sutter Health, Series B, 6.00%,
8/15/42

 

 

5,370

 

 

5,317,374

 

California State Public Works Board, RB, Various Capital
Projects, Series G-1 (AGC), 5.25%, 10/01/24

 

 

5,000

 

 

5,203,100

 

California State University, RB, Systemwide, Series A
(AGM), 5.00%, 11/01/39

 

 

4,000

 

 

3,669,720

 

County of Sacramento California, RB, Senior Series A
(AGC), 5.50%, 7/01/41

 

 

6,600

 

 

6,475,326

 

Los Angeles Community College District California, GO:

 

 

 

 

 

 

 

Election of 2001, Series A (NPFGC), 5.00%,
8/01/32

 

 

10,000

 

 

9,755,600

 

Election of 2008, Series C, 5.25%, 8/01/39

 

 

7,150

 

 

7,045,824

 

Los Angeles Department of Water & Power, RB, Power
System, Sub-Series A-1, 5.25%, 7/01/38

 

 

5,000

 

 

4,949,500

 

Los Angeles Municipal Improvement Corp., Refunding
RB, Real Property, Series B (AGC), 5.50%, 4/01/39

 

 

2,980

 

 

2,888,723

 

Los Angeles Unified School District California, GO,
Series D, 5.25%, 7/01/25

 

 

3,485

 

 

3,587,912

 

Manteca Financing Authority California, RB, Manteca
Sewer (AGC):

 

 

 

 

 

 

 

5.63%, 12/01/33

 

 

2,450

 

 

2,503,263

 

5.75%, 12/01/36

 

 

3,285

 

 

3,336,607

 

Oxnard Union High School District, GO, Refunding,
Election of 2004, Series A (AGM), 5.00%, 8/01/40

 

 

6,750

 

 

6,009,120

 

San Diego Community College District California, GO,
Election of 2002 (AGM), 5.00%, 5/01/30

 

 

5,000

 

 

4,963,100

 

San Diego Public Facilities Financing Authority,
Refunding RB, Series B (AGC), 5.38%, 8/01/34

 

 

4,690

 

 

4,774,045

 

San Jacinto Unified School District, GO, Election of 2006
(AGM), 5.25%, 8/01/32

 

 

3,000

 

 

2,906,130

 

State of California, GO, Various Purpose (AGC), 5.50%,
11/01/39

 

 

15,000

 

 

15,039,750

 

 

 

 

 

 




 

 

 

 

 

 

97,444,820

 









Colorado — 1.6%

 

 

 

 

 

 

 

Colorado Health Facilities Authority, RB, Hospital,
NCMC Inc. Project, Series B (AGM), 6.00%, 5/15/26

 

 

5,925

 

 

6,369,138

 

Regional Transportation District, COP, Series A, 5.00%,
6/01/25

 

 

1,425

 

 

1,426,981

 

 

 

 

 

 




 

 

 

 

 

 

7,796,119

 









District of Columbia — 0.7%

 

 

 

 

 

 

 

District of Columbia, Refunding RB, Georgetown
University, Series D (BHAC), 5.50%, 4/01/36

 

 

775

 

 

800,180

 

District of Columbia Water & Sewer Authority, RB,
Series A (NPFGC), 5.00%, 10/01/38

 

 

2,545

 

 

2,492,649

 

 

 

 

 

 




 

 

 

 

 

 

3,292,829

 










 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 









Florida — 21.9%

 

 

 

 

 

 

 

City of Sunrise Florida, Refunding RB (AMBAC),
5.20%, 10/01/22

 

$

1,225

 

$

1,293,686

 

County of Lee Florida, RB, Series A, AMT (AGM),
6.00%, 10/01/29

 

 

19,925

 

 

20,022,433

 

County of Miami-Dade Florida, RB, AMT, Miami
International Airport, Series A:

 

 

 

 

 

 

 

(AGM), 5.50%, 10/01/41

 

 

11,260

 

 

10,474,728

 

(NPFGC), 6.00%, 10/01/29

 

 

8,000

 

 

8,083,760

 

Series A (AGM), 5.13%, 10/01/35

 

 

8,605

 

 

7,724,192

 

County of Osceola Florida, RB, Series A (NPFGC),
5.50%, 10/01/27

 

 

5,560

 

 

5,604,258

 

County of St. John’s Florida, RB (AGM):

 

 

 

 

 

 

 

5.00%, 10/01/31

 

 

1,340

 

 

1,338,231

 

5.00%, 10/01/37

 

 

2,655

 

 

2,523,843

 

Florida Housing Finance Corp., HRB, Waverly
Apartments, Series C-1, AMT (AGM), 6.30%, 7/01/30

 

 

2,055

 

 

2,075,529

 

Florida Housing Finance Corp., RB, Homeowner
Mortgage, Series 11, AMT (AGM), 5.95%, 1/01/32

 

 

5,500

 

 

5,501,430

 

Florida Housing Finance Corp., Refunding RB, AMT,
Homeowner Mortgage:

 

 

 

 

 

 

 

Series 2 (NPFGC), 5.75%, 7/01/14

 

 

525

 

 

526,050

 

Series 2 (NPFGC), 5.90%, 7/01/29

 

 

6,700

 

 

6,775,576

 

Series 4 (AGM), 6.25%, 7/01/22

 

 

510

 

 

516,309

 

Jacksonville Port Authority, RB, AMT (AGC), 6.00%,
11/01/38

 

 

6,740

 

 

6,776,531

 

Manatee County Housing Finance Authority, RB,
Series A, AMT (Ginnie Mae), 5.90%, 9/01/40

 

 

2,540

 

 

2,659,431

 

Miami-Dade County Housing Finance Authority Florida,
MRB, Marbrisa Apartments Project, Series 2A, AMT
(AGM), 6.00%, 8/01/26

 

 

2,185

 

 

2,206,326

 

Miami-Dade County IDA, RB, Airis Miami II LLC Project,
AMT (AMBAC), 6.00%, 10/15/19

 

 

3,195

 

 

3,002,118

 

St. Lucie West Services District, RB (NPFGC):

 

 

 

 

 

 

 

5.25%, 10/01/34

 

 

1,720

 

 

1,534,360

 

5.00%, 10/01/38

 

 

4,125

 

 

3,488,842

 

St. Lucie West Services District, Refunding RB, Senior
Lien (NPFGC), 6.00%, 10/01/22

 

 

3,250

 

 

3,325,790

 

Village Center Community Development District, RB,
Series A (NPFGC):

 

 

 

 

 

 

 

5.38%, 11/01/34

 

 

10,775

 

 

8,935,600

 

5.13%, 11/01/36

 

 

1,750

 

 

1,380,277

 

Volusia County IDA, RB, Student Housing, Stetson
University Project, Series A (CIFG), 5.00%, 6/01/35

 

 

1,740

 

 

1,387,580

 

 

 

 

 

 




 

 

 

 

 

 

107,156,880

 









Georgia — 6.1%

 

 

 

 

 

 

 

Augusta-Richmond County Georgia, RB (AGM),
5.25%, 10/01/39

 

 

4,350

 

 

4,352,610

 

City of Atlanta Georgia, RB, General, Series A (AGM),
5.00%, 1/01/40

 

 

2,735

 

 

2,579,597

 

County of Fulton Georgia, RB (NPFGC), 5.25%, 1/01/35

 

 

7,575

 

 

7,574,470

 

Gwinnett County Hospital Authority, Refunding RB,
Gwinnett Hospital System, Series D (AGM), 5.50%,
7/01/41

 

 

6,445

 

 

6,108,442

 

Metropolitan Atlanta Rapid Transit Authority, RB, Third
Indenture, Series B (AGM), 5.00%, 7/01/34

 

 

9,240

 

 

9,294,239

 

 

 

 

 

 




 

 

 

 

 

 

29,909,358

 










 

 

 

See Notes to Financial Statements.

 




32

SEMI-ANNUAL REPORT

FEBRUARY 28, 2011




 

 



 

 

Schedule of Investments (continued)

BlackRock MuniHoldings Investment Quality Fund (MFL)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 









Illinois — 13.5%

 

 

 

 

 

 

 

Chicago Board of Education Illinois, GO, Refunding,
Chicago School Reform Board, Series A (NPFGC),
5.50%, 12/01/26

 

$

3,745

 

$

3,819,975

 

Chicago Transit Authority, RB, Federal Transit
Administration Section 5309, Series A (AGC),
6.00%, 6/01/26

 

 

6,315

 

 

6,826,010

 

City of Chicago Illinois, GO, Refunding, Projects,
Series A (AGM):

 

 

 

 

 

 

 

5.00%, 1/01/29

 

 

6,845

 

 

6,503,366

 

5.00%, 1/01/30

 

 

2,730

 

 

2,577,011

 

City of Chicago Illinois, RB, Third Lien:

 

 

 

 

 

 

 

General Airport, Series A (NPFGC), 5.00%, 1/01/33

 

 

5,000

 

 

4,525,000

 

General, Series C (AGM), 5.25%, 1/01/35

 

 

4,905

 

 

4,774,576

 

City of Chicago Illinois, Refunding RB:

 

 

 

 

 

 

 

General, Third Lien, Series C (AGC), 5.25%,
1/01/23

 

 

3,975

 

 

4,148,986

 

Second Lien (NPFGC), 5.50%, 1/01/30

 

 

4,075

 

 

4,169,051

 

Illinois Finance Authority, RB, University of Chicago,
Series B, 5.50%, 7/01/37

 

 

10,000

 

 

10,371,800

 

Illinois Municipal Electric Agency, RB, Series A (NPFGC),
5.25%, 2/01/35

 

 

4,150

 

 

4,039,610

 

Railsplitter Tobacco Settlement Authority, RB:

 

 

 

 

 

 

 

5.50%, 6/01/23

 

 

4,365

 

 

4,169,754

 

6.00%, 6/01/28

 

 

1,245

 

 

1,216,128

 

State of Illinois, RB:

 

 

 

 

 

 

 

(AGM), 5.00%, 6/15/27

 

 

3,000

 

 

2,989,860

 

Build Illinois, Series B, 5.25%, 6/15/26

 

 

5,625

 

 

5,703,862

 

 

 

 

 

 




 

 

 

 

 

 

65,834,989

 









Indiana — 3.0%

 

 

 

 

 

 

 

Indianapolis Local Public Improvement Bond Bank,
Refunding RB, Waterworks Project, Series A (AGC),
5.50%, 1/01/38

 

 

14,105

 

 

14,464,819

 









Iowa — 1.1%

 

 

 

 

 

 

 

Iowa Finance Authority, Refunding RB, Iowa Health
System (AGC), 5.25%, 2/15/29

 

 

5,500

 

 

5,430,645

 









Kentucky — 0.5%

 

 

 

 

 

 

 

Kentucky State Property & Buildings Commission,
Refunding RB, Project No. 93 (AGC), 5.25%, 2/01/28

 

 

2,500

 

 

2,588,325

 









Louisiana — 1.8%

 

 

 

 

 

 

 

East Baton Rouge Sewerage Commission, RB, Series A,
5.25%, 2/01/34

 

 

1,370

 

 

1,384,097

 

Louisiana State Citizens Property Insurance Corp., RB,
Series C-3 (AGC), 6.13%, 6/01/25

 

 

5,475

 

 

5,995,070

 

New Orleans Aviation Board Louisiana, Refunding GARB
(AGC), Restructuring:

 

 

 

 

 

 

 

Series A-1, 6.00%, 1/01/23

 

 

500

 

 

552,190

 

Series A-2, 6.00%, 1/01/23

 

 

720

 

 

795,154

 

 

 

 

 

 




 

 

 

 

 

 

8,726,511

 









Maine — 0.8%

 

 

 

 

 

 

 

City of Portland Maine, RB, General (AGM), 5.25%,
1/01/35

 

 

3,735

 

 

3,724,654

 









Maryland — 0.4%

 

 

 

 

 

 

 

Maryland Health & Higher Educational Facilities
Authority, Refunding RB, University of Maryland
Medical System, 5.13%, 7/01/39

 

 

2,225

 

 

2,090,566

 










 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 









Michigan — 16.7%

 

 

 

 

 

 

 

City of Detroit Michigan, RB:

 

 

 

 

 

 

 

Second Lien, Series B (AGM), 6.25%, 7/01/36

 

$

6,320

 

$

6,706,910

 

Second Lien, Series B (AGM), 7.00%, 7/01/36

 

 

850

 

 

950,581

 

Second Lien, Series B (NPFGC), 5.50%, 7/01/29

 

 

7,490

 

 

7,243,204

 

Senior Lien, Series B (AGM), 7.50%, 7/01/33

 

 

6,600

 

 

7,797,570

 

System, Second Lien, Series A (BHAC), 5.50%,
7/01/36

 

 

20,540

 

 

20,234,776

 

City of Detroit Michigan, Refunding RB:

 

 

 

 

 

 

 

Second Lien, Series E (BHAC), 5.75%, 7/01/31

 

 

6,000

 

 

6,096,360

 

Senior Lien, Series C-1 (AGM), 7.00%, 7/01/27

 

 

9,055

 

 

10,410,352

 

Kalamazoo Hospital Finance Authority, RB, Bronson
Methodist Hospital (AGM), 5.25%, 5/15/36

 

 

3,235

 

 

2,972,480

 

Michigan State Building Authority, RB, Facilities Program,
Series H (AGM), 5.00%, 10/15/26

 

 

1,760

 

 

1,762,341

 

Michigan State Building Authority, Refunding RB,
Facilities Program, Series I (AGC):

 

 

 

 

 

 

 

5.25%, 10/15/22

 

 

6,150

 

 

6,550,303

 

5.25%, 10/15/24

 

 

2,755

 

 

2,849,469

 

5.25%, 10/15/25

 

 

1,435

 

 

1,466,068

 

Royal Oak Hospital Finance Authority Michigan,
Refunding RB, William Beaumont Hospital, 8.25%,
9/01/39

 

 

5,780

 

 

6,449,671

 

 

 

 

 

 




 

 

 

 

 

 

81,490,085

 









Minnesota — 2.1%

 

 

 

 

 

 

 

City of Minneapolis Minnesota, Refunding RB, Fairview
Health Services, Series B (AGC), 6.50%, 11/15/38

 

 

9,900

 

 

10,457,172

 









Nebraska — 1.0%

 

 

 

 

 

 

 

Nebraska Investment Finance Authority, Refunding RB,
Series A:

 

 

 

 

 

 

 

5.90%, 9/01/36

 

 

3,650

 

 

3,735,264

 

6.05%, 9/01/41

 

 

1,350

 

 

1,366,524

 

 

 

 

 

 




 

 

 

 

 

 

5,101,788

 









Nevada — 5.8%

 

 

 

 

 

 

 

County of Clark Nevada, RB:

 

 

 

 

 

 

 

Las Vegas-McCarran International Airport, Series A
(AGC), 5.25%, 7/01/39

 

 

15,005

 

 

14,060,135

 

Subordinate Lien, Series A-2 (NPFGC), 5.00%,
7/01/36

 

 

15,500

 

 

14,053,385

 

 

 

 

 

 




 

 

 

 

 

 

28,113,520

 









New Jersey — 2.3%

 

 

 

 

 

 

 

New Jersey EDA, RB, School Facilities Construction,
Series Z (AGC), 6.00%, 12/15/34

 

 

4,350

 

 

4,578,592

 

New Jersey Health Care Facilities Financing Authority,
RB, Virtua Health (AGC), 5.50%, 7/01/38

 

 

6,500

 

 

6,603,740

 

 

 

 

 

 




 

 

 

 

 

 

11,182,332

 









New York — 5.3%

 

 

 

 

 

 

 

New York City Municipal Water Finance Authority, RB:

 

 

 

 

 

 

 

Second General Resolution, Series EE, 5.38%,
6/15/43

 

 

6,705

 

 

6,798,803

 

Series FF-2, 5.50%, 6/15/40

 

 

4,000

 

 

4,117,720

 

New York City Municipal Water Finance Authority,
Refunding RB, Series D, 5.00%, 6/15/37

 

 

5,000

 

 

4,941,950

 

New York City Transitional Finance Authority, Fiscal
2009, RB:

 

 

 

 

 

 

 

Series S-3, 5.25%, 1/15/39

 

 

5,625

 

 

5,664,319

 

Series S-4 (AGC), 5.50%, 1/15/29

 

 

4,000

 

 

4,176,360

 

 

 

 

 

 




 

 

 

 

 

 

25,699,152

 










 

 

 

 

See Notes to Financial Statements.

 

 





 

SEMI-ANNUAL REPORT

FEBRUARY 28, 2011

33




 

 



 

 

Schedule of Investments (continued)

BlackRock MuniHoldings Investment Quality Fund (MFL)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 









Ohio — 1.5%

 

 

 

 

 

 

 

Ohio Higher Educational Facility Commission,
Refunding RB, Summa Health System, 2010 Project
(AGC), 5.25%, 11/15/40

 

$

7,725

 

$

7,159,607

 









Pennsylvania — 2.7%

 

 

 

 

 

 

 

Pennsylvania Turnpike Commission, Refunding RB,
Sub-Series B-1 (AGM), 5.00%, 12/01/37

 

 

9,000

 

 

8,396,460

 

Pittsburgh & Allegheny County Sports & Exhibition
Authority, Refunding RB, Regional Asset District
Sales Tax (AGM), 5.00%, 2/01/31

 

 

4,895

 

 

4,888,685

 

 

 

 

 

 




 

 

 

 

 

 

13,285,145

 









Puerto Rico — 2.2%

 

 

 

 

 

 

 

Puerto Rico Highway & Transportation Authority,
Refunding RB, Series CC (AGM), 5.50%, 7/01/30

 

 

4,000

 

 

3,990,240

 

Puerto Rico Sales Tax Financing Corp., RB, First
Sub-Series A, 6.38%, 8/01/39

 

 

6,610

 

 

6,842,341

 

 

 

 

 

 




 

 

 

 

 

 

10,832,581

 









Texas — 19.4%

 

 

 

 

 

 

 

City of Austin Texas, Refunding RB, Series A (AGM):

 

 

 

 

 

 

 

5.00%, 11/15/28

 

 

3,360

 

 

3,419,270

 

5.00%, 11/15/29

 

 

4,255

 

 

4,300,358

 

City of Dallas Texas, Refunding RB (AGC), 5.25%,
8/15/38

 

 

3,350

 

 

3,236,569

 

City of Houston Texas, Refunding RB, Combined,
First Lien, Series A (AGC):

 

 

 

 

 

 

 

6.00%, 11/15/35

 

 

12,700

 

 

13,786,231

 

6.00%, 11/15/36

 

 

9,435

 

 

10,221,973

 

5.38%, 11/15/38

 

 

5,000

 

 

5,101,000

 

Dallas Area Rapid Transit, Refunding RB, Senior Lien,
5.25%, 12/01/38

 

 

6,500

 

 

6,548,880

 

Harris County Health Facilities Development Corp.,
Refunding RB, Memorial Hermann Healthcare
System, Series B, 7.25%, 12/01/35

 

 

1,500

 

 

1,624,425

 

Lower Colorado River Authority, Refunding RB, LCRA
Transmission Services Project (AGC), 5.50%,
5/15/36

 

 

3,295

 

 

3,329,400

 

Lubbock Cooper ISD Texas, GO, School Building (AGC),
5.75%, 2/15/42

 

 

2,300

 

 

2,357,477

 

North Texas Tollway Authority, RB, System, First Tier,
Series K-1 (AGC), 5.75%, 1/01/38

 

 

12,400

 

 

12,484,444

 

North Texas Tollway Authority, Refunding RB, System,
First Tier:

 

 

 

 

 

 

 

(AGM), 6.00%, 1/01/43

 

 

5,555

 

 

5,720,872

 

Series A (AGC), 5.75%, 1/01/40

 

 

7,000

 

 

7,034,720

 

Series A (NPFGC), 5.13%, 1/01/28

 

 

14,150

 

 

13,999,586

 

Tarrant County Cultural Education Facilities Finance
Corp., Refunding RB, Christus Health, Series A (AGC),
6.50%, 7/01/37

 

 

1,770

 

 

1,825,649

 

 

 

 

 

 




 

 

 

 

 

 

94,990,854

 









Utah — 1.5%

 

 

 

 

 

 

 

City of Riverton Utah, RB, IHC Health Services Inc.,
5.00%, 8/15/41

 

 

7,795

 

 

7,298,225

 









Virginia — 1.0%

 

 

 

 

 

 

 

Virginia Public School Authority, RB, School Financing,
6.50%, 12/01/35

 

 

4,300

 

 

4,707,253

 









Total Municipal Bonds — 139.3%

 

 

 

 

 

680,868,870

 










 

 

 

 

 

 

 

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (a)

 

Par
(000)

 

Value

 









Alabama — 1.3%

 

 

 

 

 

 

 

Mobile Board of Water & Sewer Commissioners, RB
(NPFGC), 5.00%, 1/01/31

 

$

6,500

 

$

6,491,420

 









California — 3.0%

 

 

 

 

 

 

 

California State University, Refunding RB, Systemwide,
Series A (AGM), 5.00%, 11/01/32

 

 

7,960

 

 

7,643,908

 

Los Angeles Unified School District California, GO,
Series I, 5.00%, 1/01/34

 

 

2,400

 

 

2,289,840

 

San Diego Community College District California, GO,
Election of 2002 (AGM), 5.00%, 5/01/30

 

 

5,000

 

 

4,963,100

 

 

 

 

 

 

 



 

 

 

 

 

 

14,896,848

 









District of Columbia — 0.8%

 

 

 

 

 

 

 

District of Columbia Water & Sewer Authority, RB,
Series A, 6.00%, 10/01/35

 

 

3,381

 

 

3,669,441

 









Florida — 5.1%

 

 

 

 

 

 

 

City of Jacksonville Florida, RB, Better Jacksonville
(NPFGC), 5.00%, 10/01/27

 

 

10,000

 

 

10,067,100

 

Hillsborough County Aviation Authority, RB, Series A,
AMT (AGC), 5.50%, 10/01/38

 

 

10,657

 

 

9,968,923

 

Lee County Housing Finance Authority, RB, Multi-County
Program, Series A-2, AMT (Ginnie Mae), 6.00%,
9/01/40

 

 

4,785

 

 

5,054,013

 

 

 

 

 

 




 

 

 

 

 

 

25,090,036

 









Illinois — 1.5%

 

 

 

 

 

 

 

Chicago Transit Authority, Refunding RB, Federal Transit
Administration Section 5309 (AGM), 5.00%, 6/01/28

 

 

7,737

 

 

7,308,580

 









Indiana — 1.9%

 

 

 

 

 

 

 

Indiana Health & Educational Facilities Financing
Authority, Refunding RB, St. Francis, Series E (AGM),
5.25%, 5/15/41

 

 

9,850

 

 

9,294,854

 









Kentucky — 0.1%

 

 

 

 

 

 

 

Kentucky State Property & Building Commission,
Refunding RB, Project No. 93 (AGC), 5.25%, 2/01/27

 

 

404

 

 

419,384

 









Nevada — 2.8%

 

 

 

 

 

 

 

Clark County Water Reclamation District, GO:

 

 

 

 

 

 

 

Limited Tax, 6.00%, 7/01/38

 

 

8,000

 

 

8,577,280

 

Series B, 5.50%, 7/01/29

 

 

5,008

 

 

5,264,380

 

 

 

 

 

 




 

 

 

 

 

 

13,841,660

 









New Jersey — 3.2%

 

 

 

 

 

 

 

New Jersey State Housing & Mortgage Finance Agency,
RB, S/F Housing, Series CC, 5.25%, 10/01/29

 

 

7,532

 

 

7,522,854

 

New Jersey Transportation Trust Fund Authority, RB,
Transportation System, Series A (AGM), 5.00%,
12/15/32

 

 

8,000

 

 

8,013,120

 

 

 

 

 

 




 

 

 

 

 

 

15,535,974

 









New York — 3.8%

 

 

 

 

 

 

 

New York City Municipal Water Finance Authority, RB,
Series FF-2, 5.50%, 6/15/40

 

 

4,994

 

 

5,140,618

 

New York State Dormitory Authority, ERB, Series B,
5.25%, 3/15/38

 

 

13,500

 

 

13,605,300

 

 

 

 

 

 




 

 

 

 

 

 

18,745,918

 









Texas — 2.6%

 

 

 

 

 

 

 

City of San Antonio Texas, Refunding RB, Series A,
5.25%, 2/01/31

 

 

12,027

 

 

12,557,427

 









Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 26.1%

 

 

 

 

 

127,851,542

 









Total Long-Term Investments
(Cost — $819,977,712) — 165.4%

 

 

 

 

 

808,720,412

 










 

 

 

See Notes to Financial Statements.

 




34

SEMI-ANNUAL REPORT

FEBRUARY 28, 2011




 

 



 

 

Schedule of Investments (concluded)

BlackRock MuniHoldings Investment Quality Fund (MFL)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Short-Term Securities

 

Shares

 

Value

 









FFI Institutional Tax-Exempt Fund, 0.13% (b)(c)

 

 

13,487,527

 

$

13,487,527

 









Total Short-Term Securities
(Cost — $13,487,527) — 2.8%

 

 

 

 

 

13,487,527

 









Total Investments (Cost — $833,465,239*) — 168.2%

 

 

 

 

 

822,207,939

 

Other Assets Less Liabilities — 2.0%

 

 

 

 

 

9,719,958

 

Liability for Trust Certificates, Including
Interest Expense and Fees Payable — (14.0)%

 

 

 

 

 

(68,464,588

)

Preferred Shares, at Redemption Value — (56.2)%

 

 

 

 

 

(274,663,843

)

 

 

 

 

 




Net Assets Applicable to Common Shares — 100.0%

 

 

 

 

$

488,799,466

 

 

 

 

 

 





 

 

 


*

The cost and unrealized appreciation (depreciation) of investments as of February 28, 2011, as computed for federal income tax purposes, were as follows:


 

 

 

 

 

Aggregate cost

 

$

765,322,314

 

 

 




Gross unrealized appreciation

 

$

10,370,873

 

Gross unrealized depreciation

 

 

(21,885,307

)

 

 




Net unrealized depreciation

 

$

(11,514,434

)

 

 





 

 

(a)

Securities represent bonds transferred to a TOB in exchange for which the Trust acquired residual interest certificates. These securities serve as collateral in a financing transaction. See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs.

 

 

(b)

Investments in companies considered to be an affiliate of the Trust during the period, for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:


 

 

 

 

 

 

 

 

 

 

 

 

 

 











Affiliate

 

Shares Held at
August 31,
2010

 

Net
Activity

 

Shares Held at
February 28,
2011

 

Income

 











FFI Institutional
Tax-Exempt Fund

 

 

32,301,054

 

 

(18,813,527

)

 

13,487,527

 

$

18,710

 
















 

 

(c)

Represents the current yield as of report date.

 

 

Financial futures contracts sold as of February 28, 2011 were as follows:


 

 

 

 

 

 

 

 

 

 

 

 

 

 















Contracts

 

Issue

 

Exchange

 

Expiration

 

Notional
Value

 

Unrealized
Depreciation

 















363

 

10-Year U.S.
Treasury Note

 

Chicago
Board of Trade

 

June
2011

 

$

43,020,482

 

$

(193,533

)
















 

 

Fair Value Measurements — Various inputs are used in determining the fair value of investments and derivatives. These inputs are summarized in three broad levels for financial statement purposes as follows:

 

 

 

 

Level 1 — price quotations in active markets/exchanges for identical assets and liabilities

 

 

Level 2 — other observable inputs (including, but not limited to: quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs)

 

 

Level 3 — unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the Trust’s own assumptions used in determining the fair value of investments and derivatives)

The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. For information about the Trust’s policy regarding valuation of investments and derivatives and other significant accounting policies, please refer to Note 1 of the Notes to Financial Statements.

The following tables summarize the inputs used as of February 28, 2011 in determining the fair valuation of the Trust’s investments and derivatives:

 

 

 

 

 

 

 

 

 

 

 

 

 

 















Valuation Inputs

 

Level 1

 

Level 2

 

Level 3

 

Total

 















Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments in Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-Term Investments1

 

 

 

$

808,720,412

 

 

 

$

808,720,412

 

Short-Term Securities

 

$

13,487,527

 

 

 

 

 

 

13,487,527

 

 

 













Total

 

$

13,487,527

 

$

808,720,412

 

 

 

$

822,207,939

 

 

 














 

 

 

 

1

See above Schedule of Investments for values in each state or political subdivision.


 

 

 

 

 

 

 

 

 

 

 

 

 

 





 

 

Derivative Financial Instruments2

 











Valuation Inputs

 

Level 1

 

Level 2

 

Level 3

 

Total

 











Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate contracts

 

$

(193,533

)

 

 

 

 

$

(193,533

)

 

 














 

 

 

 

2

Derivative financial instruments are financial futures contracts, which are shown at the unrealized appreciation/depreciation on the instrument.


 

 

 

 

See Notes to Financial Statements.

 

 





 

SEMI-ANNUAL REPORT

FEBRUARY 28, 2011

35




 

 



 

 

Schedule of Investments February 28, 2011 (Unaudited)

BlackRock MuniVest Fund, Inc. (MVF)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 









Alabama — 3.7%

 

 

 

 

 

 

 

Alabama State Docks Department, Refunding RB,
6.00%, 10/01/40

 

$

7,610

 

$

7,495,546

 

Camden IDB Alabama, RB, Weyerhaeuser Co.
Project, Series A, 6.13%, 12/01/13 (a)

 

 

2,550

 

 

2,904,118

 

Prattville IDB Alabama, RB, International Paper Co.
Project, Series A, AMT, 4.75%, 12/01/30

 

 

4,000

 

 

3,433,720

 

Selma IDB Alabama, Refunding RB, International
Paper Co. Project, Series B, 5.50%, 5/01/20

 

 

5,000

 

 

5,016,900

 

Selma IDB, RB, Gulf Opportunity Zone, International
Paper, 5.80%, 5/01/34

 

 

1,850

 

 

1,831,223

 

 

 

 

 

 




 

 

 

 

 

 

20,681,507

 









Arizona — 3.2%

 

 

 

 

 

 

 

Maricopa County IDA Arizona, RB, Arizona Charter
Schools Project, Series A, 6.75%, 7/01/29

 

 

4,100

 

 

2,707,025

 

Maricopa County Pollution Control Corp., Refunding RB,
Southern California Edison Co., Series A, 5.00%,
6/01/35

 

 

3,300

 

 

3,174,171

 

Phoenix Civic Improvement Corp., RB, Junior Lien,
Series A, 5.00%, 7/01/40

 

 

2,000

 

 

1,796,220

 

Pima County IDA, RB, Arizona Charter Schools Project,
Series E, 7.25%, 7/01/31

 

 

2,005

 

 

1,968,188

 

Pima County IDA, Refunding RB:

 

 

 

 

 

 

 

Arizona Charter Schools Project, Series I, 6.10%,
7/01/13 (a)(b)

 

 

110

 

 

122,353

 

Arizona Charter Schools Project, Series I, 6.30%,
7/01/13 (a)(b)

 

 

230

 

 

256,887

 

Arizona Charter Schools Project, Series O, 5.00%,
7/01/26

 

 

1,455

 

 

1,157,031

 

Arizona Charter Schools, Series I, 6.10%,
7/01/24 (b)

 

 

380

 

 

347,841

 

Arizona Charter Schools, Series I, 6.30%,
7/01/31 (b)

 

 

755

 

 

662,973

 

Charter Schools II, Series A, 6.75%, 7/01/21

 

 

920

 

 

910,809

 

Salt Verde Financial Corp., RB, Senior, 5.00%,
12/01/37

 

 

5,000

 

 

4,197,850

 

State of Arizona, COP, Department of Administration,
Series A (AGM), 5.25%, 10/01/28

 

 

650

 

 

658,034

 

 

 

 

 

 




 

 

 

 

 

 

17,959,382

 









California — 11.7%

 

 

 

 

 

 

 

California HFA, RB, Home Mortgage, Series K, AMT,
5.50%, 2/01/42

 

 

3,350

 

 

3,401,121

 

California Health Facilities Financing Authority,
Refunding RB:

 

 

 

 

 

 

 

Catholic Healthcare West, Series A, 6.00%,
7/01/34

 

 

1,055

 

 

1,065,919

 

St. Joseph Health System, Series A, 5.75%,
7/01/39

 

 

5,000

 

 

5,002,850

 

Sutter Health, Series B, 6.00%, 8/15/42

 

 

5,600

 

 

5,545,120

 

California State Public Works Board, RB:

 

 

 

 

 

 

 

Department of Corrections, Series C, 5.50%,
6/01/22

 

 

5,000

 

 

5,092,750

 

Department of Corrections, Series C, 5.50%,
6/01/23

 

 

6,000

 

 

6,078,840

 

Department of Mental Health, Coalinga, Series A,
5.13%, 6/01/29

 

 

10,435

 

 

9,669,384

 

California Statewide Communities Development
Authority, RB, Health Facility, Memorial Health
Services, Series A, 6.00%, 10/01/23

 

 

5,240

 

 

5,424,605

 


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 









California (concluded)

 

 

 

 

 

 

 

Golden State Tobacco Securitization Corp. California,
RB, Asset-Backed, Series A-3, 7.88%, 6/01/13 (a)

 

$

10,725

 

$

12,347,586

 

Los Angeles Department of Airports, RB, Series A,
5.25%, 5/15/39

 

 

1,200

 

 

1,168,896

 

State of California, GO, Various Purpose, 6.50%,
4/01/33

 

 

9,700

 

 

10,523,724

 

 

 

 

 

 




 

 

 

 

 

 

65,320,795

 









Colorado — 1.1%

 

 

 

 

 

 

 

Colorado Health Facilities Authority, RB, Catholic Health
Initiatives, Series D, 6.25%, 10/01/33

 

 

2,500

 

 

2,618,100

 

Colorado Health Facilities Authority, Refunding RB,
Evangelical Lutheran, Series A, 5.25%, 6/01/34

 

 

3,000

 

 

2,751,150

 

Colorado Housing & Finance Authority, Refunding RB,
S/F Program, Senior Series A-2, AMT:

 

 

 

 

 

 

 

6.60%, 5/01/28

 

 

355

 

 

358,266

 

7.50%, 4/01/31

 

 

130

 

 

135,607

 

Regional Transportation District, COP, Series A, 5.38%,
6/01/31

 

 

385

 

 

387,056

 

 

 

 

 

 




 

 

 

 

 

 

6,250,179

 









Connecticut — 0.4%

 

 

 

 

 

 

 

Mohegan Tribe of Indians of Connecticut, RB, Public
Improvement, Priority Distribution, 6.25%, 1/01/31

 

 

2,810

 

 

2,151,364

 









Delaware — 0.3%

 

 

 

 

 

 

 

County of Sussex Delaware, RB, NRG Energy, Inc.,
Indian River Project, 6.00%, 10/01/40

 

 

1,500

 

 

1,460,445

 









District of Columbia — 0.2%

 

 

 

 

 

 

 

Metropolitan Washington Airports Authority, RB,
First Senior Lien, Series A:

 

 

 

 

 

 

 

5.00%, 10/01/39

 

 

415

 

 

390,366

 

5.25%, 10/01/44

 

 

650

 

 

613,821

 

 

 

 

 

 




 

 

 

 

 

 

1,004,187

 









Florida — 6.0%

 

 

 

 

 

 

 

County of Miami-Dade Florida, GO Building Better
Communities Program:

 

 

 

 

 

 

 

Series B, 6.38%, 7/01/28

 

 

4,630

 

 

5,101,936

 

Series B-1, 5.63%, 7/01/38

 

 

5,000

 

 

5,085,200

 

County of Miami-Dade Florida, Refunding RB, Miami
International Airport:

 

 

 

 

 

 

 

AMT (AGC), 5.00%, 10/01/40

 

 

10,000

 

 

8,622,600

 

Series A-1, 5.38%, 10/01/41

 

 

10,290

 

 

9,528,334

 

Hillsborough County IDA, RB, H. Lee Moffitt Cancer
Center Project, Series A, 5.25%, 7/01/37

 

 

5,500

 

 

4,916,945

 

 

 

 

 

 




 

 

 

 

 

 

33,255,015

 









Georgia — 2.1%

 

 

 

 

 

 

 

DeKalb County Hospital Authority Georgia, RB, DeKalb
Medical Center Inc. Project, 6.13%, 9/01/40

 

 

3,570

 

 

3,307,426

 

DeKalb Private Hospital Authority, Refunding RB,
Children’s Healthcare, 5.25%, 11/15/39

 

 

3,335

 

 

3,187,259

 

Municipal Electric Authority of Georgia, RB, Series W:

 

 

 

 

 

 

 

6.60%, 1/01/18

 

 

4,540

 

 

5,208,742

 

6.60%, 1/01/18 (c)

 

 

250

 

 

279,253

 

 

 

 

 

 




 

 

 

 

 

 

11,982,680

 










 

 

 

See Notes to Financial Statements.

 




36

SEMI-ANNUAL REPORT

FEBRUARY 28, 2011




 

 



 

 

Schedule of Investments (continued)

BlackRock MuniVest Fund, Inc. (MVF)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 









Hawaii — 0.9%

 

 

 

 

 

 

 

Hawaii State Harbor, RB, Series A, 5.50%, 7/01/35

 

$

5,000

 

$

4,843,250

 









Idaho — 0.0%

 

 

 

 

 

 

 

Idaho Housing & Finance Association, Refunding RB,
S/F Mortgage, Senior Series E-2, AMT, 6.90%,
1/01/27

 

 

50

 

 

50,063

 









Illinois — 11.6%

 

 

 

 

 

 

 

City of Chicago Illinois, ARB, General, Third Lien,
Series B-2, AMT (NPFGC), 6.00%, 1/01/27

 

 

17,080

 

 

17,242,260

 

Illinois Finance Authority, RB:

 

 

 

 

 

 

 

Advocate Health Care Network, Series D, 6.50%,
11/01/38

 

 

9,700

 

 

10,231,463

 

Community Rehabilitation Providers Facilities,
Series A, 6.50%, 7/01/22

 

 

2,140

 

 

2,073,168

 

Illinois Finance Authority, Refunding RB, Series A:

 

 

 

 

 

 

 

Northwestern Memorial Hospital, 6.00%, 8/15/39

 

 

9,000

 

 

9,288,720

 

OSF Healthcare System, 6.00%, 5/15/39

 

 

5,200

 

 

4,833,608

 

Railsplitter Tobacco Settlement Authority, RB, 6.00%,
6/01/28

 

 

2,145

 

 

2,095,257

 

Regional Transportation Authority, RB:

 

 

 

 

 

 

 

Series A (AMBAC), 7.20%, 11/01/20

 

 

3,290

 

 

3,888,780

 

Series C (NPFGC), 7.75%, 6/01/20

 

 

4,000

 

 

4,805,840

 

Village of Hodgkins Illinois, RB, MBM Project, AMT,
6.00%, 11/01/23

 

 

10,000

 

 

10,000,100

 

 

 

 

 

 




 

 

 

 

 

 

64,459,196

 









Indiana — 4.8%

 

 

 

 

 

 

 

Indiana Health & Educational Facilities Financing
Authority, RB, Clarian Health Obligation, Series A,
5.25%, 2/15/40

 

 

8,980

 

 

7,752,613

 

Indiana Transportation Finance Authority, RB, Series A,
6.80%, 12/01/16

 

 

7,280

 

 

8,205,361

 

Indianapolis Local Public Improvement Bond Bank,
Refunding RB, Series D, 6.75%, 2/01/14

 

 

10,210

 

 

10,973,912

 

 

 

 

 

 




 

 

 

 

 

 

26,931,886

 









Kansas — 0.3%

 

 

 

 

 

 

 

Sedgwick & Shawnee Counties Kansas, RB,
Mortgage-Backed Securities Program, Series A-4,
AMT (Ginnie Mae), 5.95%, 12/01/33

 

 

1,885

 

 

1,955,725

 









Kentucky — 1.2%

 

 

 

 

 

 

 

County of Owen Kentucky, RB, Kentucky American
Water Co., Series B, 5.63%, 9/01/39

 

 

1,000

 

 

970,310

 

Kentucky Economic Development Finance Authority,
RB, Owensboro Medical Health System, Series A,
6.50%, 3/01/45

 

 

4,000

 

 

3,796,160

 

Kentucky Economic Development Finance Authority,
Refunding RB, Owensboro Medical Health System,
Series A, 6.38%, 6/01/40

 

 

2,000

 

 

1,875,600

 

 

 

 

 

 




 

 

 

 

 

 

6,642,070

 









Louisiana — 0.5%

 

 

 

 

 

 

 

Louisiana Local Government Environmental Facilities &
Community Development Authority, RB, Westlake
Chemical Corp., Series A-1, 6.50%, 11/01/35

 

 

2,615

 

 

2,661,625

 










 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 









Maine — 1.2%

 

 

 

 

 

 

 

Maine Health & Higher Educational Facilities Authority,
RB, Series A, 5.00%, 7/01/39

 

$

5,000

 

$

4,718,000

 

Portland New Public Housing Authority Maine, Refunding
RB, Senior Living, Series A:

 

 

 

 

 

 

 

5.70%, 8/01/21

 

 

775

 

 

765,390

 

6.00%, 2/01/34

 

 

1,190

 

 

1,086,565

 

 

 

 

 

 




 

 

 

 

 

 

6,569,955

 









Maryland — 1.9%

 

 

 

 

 

 

 

Maryland Community Development Administration,
RB, AMT, 5.10%, 9/01/37

 

 

1,835

 

 

1,716,239

 

Maryland Community Development Administration,
Refunding RB, Residential, Series D, AMT, 4.90%,
9/01/42

 

 

3,250

 

 

2,889,640

 

Maryland Health & Higher Educational Facilities
Authority, Refunding RB:

 

 

 

 

 

 

 

Charlestown Community, 6.25%, 1/01/41

 

 

2,000

 

 

1,934,260

 

University of Maryland Medical System, 5.00%,
7/01/34

 

 

2,100

 

 

1,973,244

 

University of Maryland Medical System, 5.13%,
7/01/39

 

 

2,100

 

 

1,973,118

 

 

 

 

 

 




 

 

 

 

 

 

10,486,501

 









Massachusetts — 6.5%

 

 

 

 

 

 

 

Massachusetts Bay Transportation Authority, Refunding
RB, General Transportation System, Series A, 7.00%,
3/01/19

 

 

3,010

 

 

3,635,809

 

Massachusetts HFA, HRB, Series A, AMT, 5.20%,
12/01/37

 

 

3,000

 

 

2,737,650

 

Massachusetts HFA, RB, S/F, Series 130, AMT, 5.00%,
12/01/32

 

 

2,500

 

 

2,306,550

 

Massachusetts HFA, Refunding HRB, Series D, AMT,
4.85%, 6/01/40

 

 

3,000

 

 

2,616,900

 

Massachusetts HFA, Refunding RB, Series C, AMT,
5.35%, 12/01/42

 

 

6,550

 

 

5,922,641

 

Massachusetts Water Resources Authority, RB, Series A,
6.50%, 7/15/19 (c)

 

 

16,000

 

 

19,287,200

 

 

 

 

 

 




 

 

 

 

 

 

36,506,750

 









Michigan — 4.0%

 

 

 

 

 

 

 

City of Detroit Michigan, RB, Second Lien,
Series B (AGM):

 

 

 

 

 

 

 

6.25%, 7/01/36

 

 

2,500

 

 

2,653,050

 

7.00%, 7/01/36

 

 

1,250

 

 

1,397,913

 

Michigan State Hospital Finance Authority,
Refunding RB:

 

 

 

 

 

 

 

Henry Ford Health System, Series A, 5.25%,
11/15/46

 

 

7,950

 

 

6,631,015

 

McLaren Health Care, 5.75%, 5/15/38

 

 

7,285

 

 

7,274,291

 

Royal Oak Hospital Finance Authority Michigan,
Refunding RB, William Beaumont Hospital, 8.25%,
9/01/39

 

 

4,100

 

 

4,575,026

 

 

 

 

 

 




 

 

 

 

 

 

22,531,295

 










 

 

 

 

See Notes to Financial Statements.

 

 





 

SEMI-ANNUAL REPORT

FEBRUARY 28, 2011

37




 

 



 

 

Schedule of Investments (continued)

BlackRock MuniVest Fund, Inc. (MVF)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 









Mississippi — 5.6%

 

 

 

 

 

 

 

County of Lowndes Mississippi, Refunding RB,
Weyerhaeuser Co. Project:

 

 

 

 

 

 

 

Series A, 6.80%, 4/01/22

 

$

9,160

 

$

9,484,630

 

Series B, 6.70%, 4/01/22

 

 

4,500

 

 

4,625,505

 

Mississippi Business Finance Corp., Refunding RB,
System Energy Resource Inc. Project:

 

 

 

 

 

 

 

5.88%, 4/01/22

 

 

15,000

 

 

14,719,200

 

5.90%, 5/01/22

 

 

2,250

 

 

2,211,008

 

 

 

 

 

 




 

 

 

 

 

 

31,040,343

 









Nevada — 0.9%

 

 

 

 

 

 

 

County of Clark Nevada, RB, Series B, 5.75%, 7/01/42

 

 

5,000

 

 

4,999,550

 









New Hampshire — 0.4%

 

 

 

 

 

 

 

New Hampshire Health & Education Facilities Authority,
Refunding RB, Elliot Hospital, Series B, 5.60%,
10/01/22

 

 

2,400

 

 

2,417,688

 









New Jersey — 5.8%

 

 

 

 

 

 

 

Delaware River Port Authority, RB, Series D, 5.00%,
1/01/40

 

 

195

 

 

188,627

 

New Jersey EDA, RB, Cigarette Tax:

 

 

 

 

 

 

 

5.50%, 6/15/24

 

 

9,080

 

 

8,369,944

 

5.75%, 6/15/29

 

 

2,885

 

 

2,586,893

 

5.75%, 6/15/34

 

 

3,695

 

 

3,171,345

 

New Jersey EDA, Refunding RB, School Facilities
Construction, Series AA, 5.25%, 12/15/33

 

 

10,000

 

 

9,855,400

 

New Jersey State Housing & Mortgage Finance Agency,
RB, Series AA, 6.38%, 10/01/28

 

 

1,450

 

 

1,538,276

 

Tobacco Settlement Financing Corp. New Jersey, RB,
7.00%, 6/01/13 (a)

 

 

5,980

 

 

6,792,562

 

 

 

 

 

 




 

 

 

 

 

 

32,503,047

 









New York — 4.2%

 

 

 

 

 

 

 

Metropolitan Transportation Authority, RB, Series 2008C:

 

 

 

 

 

 

 

6.25%, 11/15/23

 

 

3,245

 

 

3,652,572

 

6.50%, 11/15/28

 

 

14,925

 

 

16,624,659

 

Port Authority of New York & New Jersey, RB, JFK
International Air Terminal, 6.00%, 12/01/36

 

 

3,165

 

 

3,091,667

 

 

 

 

 

 




 

 

 

 

 

 

23,368,898

 









North Carolina — 1.3%

 

 

 

 

 

 

 

Gaston County Industrial Facilities & Pollution Control
Financing Authority North Carolina, RB, Exempt
Facilities, National Gypsum Co. Project, AMT, 5.75%,
8/01/35

 

 

4,105

 

 

3,092,337

 

North Carolina Medical Care Commission, RB, Novant
Health Obligation, Series A, 4.75%, 11/01/43

 

 

5,000

 

 

4,240,600

 

 

 

 

 

 




 

 

 

 

 

 

7,332,937

 









Ohio — 3.0%

 

 

 

 

 

 

 

County of Butler Ohio, RB, UC Health, 5.50%,
11/01/40

 

 

4,000

 

 

3,348,840

 

County of Franklin Ohio, GO, Various Purpose,
5.00%, 12/01/31

 

 

4,000

 

 

4,134,000

 

County of Lucas Ohio, Refunding RB, Promedica
Healthcare, Series A, 6.50%, 11/15/37

 

 

1,915

 

 

2,026,913

 

Ohio Higher Educational Facility Commission,
Refunding RB, Kenyon College Project,
5.25%, 7/01/44

 

 

8,000

 

 

7,453,520

 

 

 

 

 

 




 

 

 

 

 

 

16,963,273

 










 

 

 

 

 

 

 

 

Municipal Bonds

 

Par
(000)

 

Value

 









Pennsylvania — 1.6%

 

 

 

 

 

 

 

Chester County IDA, RB, Aqua Pennsylvania Inc. Project,
Series A, AMT (NPFGC), 5.00%, 2/01/40

 

$

530

 

$

479,777

 

Lycoming County Authority, Refunding RB, Susquehanna
Health System Project, Series A, 5.75%, 7/01/39

 

 

3,950

 

 

3,610,932

 

Pennsylvania Economic Development Financing
Authority, Refunding RB, Aqua Pennsylvania Inc.
Project, Series A, AMT, 5.00%, 12/01/34

 

 

2,780

 

 

2,565,523

 

Philadelphia Authority for Industrial Development, RB:

 

 

 

 

 

 

 

Arbor House Inc. Project, Series E, 6.10%, 7/01/33

 

 

1,000

 

 

912,590

 

Rieder House Project, Series A, 6.10%, 7/01/33

 

 

1,355

 

 

1,236,560

 

 

 

 

 

 




 

 

 

 

 

 

8,805,382

 









Puerto Rico — 2.8%

 

 

 

 

 

 

 

Puerto Rico Sales Tax Financing Corp., RB, First
Sub-Series A, 6.38%, 8/01/39

 

 

13,000

 

 

13,456,950

 

Puerto Rico Sales Tax Financing Corp., Refunding RB,
CAB, Series A (NPFGC), 5.69%, 8/01/41 (d)

 

 

15,000

 

 

1,999,050

 

 

 

 

 

 




 

 

 

 

 

 

15,456,000

 









South Carolina — 1.1%

 

 

 

 

 

 

 

County of Georgetown South Carolina, Refunding RB,
International Paper Co. Project, Series A, AMT, 5.55%,
12/01/29

 

 

1,000

 

 

957,230

 

County of Richland South Carolina, Refunding RB,
International Paper Co. Project, AMT, 6.10%, 4/01/23

 

 

5,000

 

 

5,013,150

 

 

 

 

 

 




 

 

 

 

 

 

5,970,380

 









Texas — 13.1%

 

 

 

 

 

 

 

Brazos River Authority, Refunding RB, Texas Utility Co.,
Series, AMT, 7.70%, 4/01/33

 

 

3,055

 

 

947,050

 

Brazos River Harbor Navigation District, Refunding RB,
Dow Chemical Co. Project, Series A7, AMT, 6.63%,
5/15/33

 

 

11,460

 

 

11,469,626

 

City of Houston Texas, RB, Senior Lien, Series A, 5.50%,
7/01/34

 

 

8,335

 

 

8,404,431

 

Gulf Coast Waste Disposal Authority, Refunding RB,
Series A, AMT, 6.10%, 8/01/24

 

 

4,000

 

 

4,011,640

 

Harris County Health Facilities Development Corp.,
Refunding RB, Memorial Hermann Healthcare System,
Series B:

 

 

 

 

 

 

 

7.13%, 12/01/31

 

 

3,500

 

 

3,799,670

 

7.25%, 12/01/35

 

 

5,400

 

 

5,847,930

 

Houston Industrial Development Corp., RB, Senior,
Air Cargo, AMT, 6.38%, 1/01/23

 

 

1,785

 

 

1,634,221

 

La Vernia Higher Education Finance Corp., RB, KIPP Inc.,
6.25%, 8/15/39

 

 

925

 

 

908,082

 

Love Field Airport Modernization Corp., RB, Southwest
Airlines Co. Project, 5.25%, 11/01/40

 

 

3,600

 

 

3,200,328

 

Matagorda County Navigation District No. 1 Texas,
Refunding RB, CenterPoint Energy Project, 5.60%,
3/01/27 (e)

 

 

9,355

 

 

9,166,310

 

North Texas Tollway Authority, Refunding RB, First Tier,
Series A, 6.25%, 1/01/39

 

 

3,500

 

 

3,540,670

 

Tarrant County Cultural Education Facilities Finance
Corp., RB, Scott & White Healthcare, 6.00%, 8/15/45

 

 

5,000

 

 

5,046,550

 

Texas Private Activity Bond Surface Transportation Corp.,
RB, Senior Lien:

 

 

 

 

 

 

 

LBJ Infrastructure Group LLC, LBJ Freeway Managed
Lanes Project, 7.00%, 6/30/40

 

 

10,000

 

 

10,142,200

 

NTE Mobility Partners LLC, North Tarrant Express
Managed Lanes Project, 6.88%, 12/31/39

 

 

4,710

 

 

4,753,096

 

 

 

 

 

 




 

 

 

 

 

 

72,871,804

 










 

 

 

See Notes to Financial Statements.

 




38

SEMI-ANNUAL REPORT

FEBRUARY 28, 2011




 

 



 

 

Schedule of Investments (continued)

BlackRock MuniVest Fund, Inc. (MVF)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds

 

 

Par
(000)

 

 

Value

 









U.S. Virgin Islands — 1.4%

 

 

 

 

 

 

 

United States Virgin Islands, Refunding RB, Senior
Secured, Hovensa Coker Project, AMT, 6.50%,
7/01/21

 

$

8,000

 

$

8,000,160

 









Vermont — 0.2%

 

 

 

 

 

 

 

Vermont Educational & Health Buildings Financing
Agency, RB, Developmental & Mental Health, Series A,
6.38%, 6/15/22

 

 

1,000

 

 

928,070

 









Virginia — 3.0%

 

 

 

 

 

 

 

Chesterfield County IDA, Refunding RB, Virginia Electric &
Power Co., Series A, 5.88%, 6/01/17

 

 

1,425

 

 

1,456,706

 

City of Norfolk Virginia, Refunding RB, Series B (AMBAC),
5.50%, 2/01/31

 

 

3,550

 

 

3,298,376

 

City of Portsmouth Virginia, GO, Refunding, Series D,
5.00%, 7/15/34

 

 

3,105

 

 

3,155,984

 

Fairfax County EDA, Refunding RB, Goodwin House Inc.:

 

 

 

 

 

 

 

5.13%, 10/01/37

 

 

2,000

 

 

1,716,860

 

5.13%, 10/01/42

 

 

7,015

 

 

5,898,984

 

Virginia HDA, Refunding RB, Sub-Series A3, AMT, 5.05%,
7/01/26

 

 

1,325

 

 

1,314,440

 

 

 

 

 

 




 

 

 

 

 

 

16,841,350

 









Washington — 4.9%

 

 

 

 

 

 

 

Energy Northwest, Refunding RB, Series B, 7.13%,
7/01/16

 

 

14,320

 

 

17,830,834

 

Seattle Housing Authority Washington, HRB,
Replacement Housing Projects, 6.13%, 12/01/32

 

 

2,230

 

 

1,992,840

 

Washington Health Care Facilities Authority,
Refunding RB, Catholic Health Initiatives,
Series D, 6.38%, 10/01/36

 

 

7,000

 

 

7,331,310

 

 

 

 

 

 




 

 

 

 

 

 

27,154,984

 









West Virginia — 0.4%

 

 

 

 

 

 

 

West Virginia Hospital Finance Authority, Refunding RB,
Charleston, Series A, 5.63%, 9/01/32

 

 

2,500

 

 

2,381,750

 









Wisconsin — 1.6%

 

 

 

 

 

 

 

City of Milwaukee Wisconsin, RB, Senior, Air Cargo, AMT,
6.50%, 1/01/25

 

 

1,485

 

 

1,366,052

 

Wisconsin Health & Educational Facilities Authority,
MRB, Hudson Memorial Hospital (FHA), 5.70%,
1/15/29

 

 

4,500

 

 

4,489,695

 

Wisconsin Health & Educational Facilities Authority, RB,
SynergyHealth Inc., 6.00%, 11/15/32

 

 

3,040

 

 

3,056,142

 

 

 

 

 

 




 

 

 

 

 

 

8,911,889

 









Wyoming — 0.8%

 

 

 

 

 

 

 

County of Sweetwater Wyoming, Refunding RB, Idaho
Power Co. Project, 5.25%, 7/15/26

 

 

4,500

 

 

4,639,680

 









Total Municipal Bonds — 113.7%

 

 

 

 

 

634,291,055

 









 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (f)

 

Par
(000)

 

Value

 









Arizona — 0.6%

 

 

 

 

 

 

 

Phoenix Civic Improvement Corp., RB, Junior Lien,
Series A, 5.00%, 7/01/34

 

$

3,500

 

$

3,530,660

 









California — 5.4%

 

 

 

 

 

 

 

Los Angeles Community College District California, GO,
Election of 2008, Series A, 6.00%, 8/01/33

 

 

9,586

 

 

10,258,102

 

University of California, RB, Series O, 5.25%, 5/15/39

 

 

20,000

 

 

19,766,200

 

 

 

 

 

 




 

 

 

 

 

 

30,024,302

 









Connecticut — 2.2%

 

 

 

 

 

 

 

Connecticut State Health & Educational Facility Authority,
RB, Yale University, Series Z-3, 5.05%, 7/01/42

 

 

12,000

 

 

12,174,720

 









District of Columbia — 1.4%

 

 

 

 

 

 

 

District of Columbia Water & Sewer Authority, RB,
Series A, 5.50%, 10/01/39

 

 

7,495

 

 

7,762,320

 









Florida — 4.0%

 

 

 

 

 

 

 

County of Miami-Dade Florida, RB, Water & Sewer
System (AGM), 5.00%, 10/01/39

 

 

14,747

 

 

13,994,608

 

Miami-Dade County Expressway Authority, RB, Series A
(AGC), 5.00%, 7/01/35

 

 

8,900

 

 

8,466,570

 

 

 

 

 

 




 

 

 

 

 

 

22,461,178

 









Illinois — 3.5%

 

 

 

 

 

 

 

City of Chicago Illinois, Refunding RB, Second Lien
(AGM), 5.25%, 11/01/33

 

 

1,330

 

 

1,315,569

 

Illinois Finance Authority, RB, University of Chicago,
Series B, 6.25%, 7/01/38

 

 

10,000

 

 

10,984,800

 

Illinois State Toll Highway Authority, RB, Series B,
5.50%, 1/01/33

 

 

6,999

 

 

7,021,955

 

 

 

 

 

 




 

 

 

 

 

 

19,322,324

 









Kentucky — 5.6%

 

 

 

 

 

 

 

Kentucky Economic Development Finance Authority,
Refunding RB, St. Elizabeth, Series A, 5.50%, 5/01/39

 

 

8,003

 

 

7,866,923

 

Kentucky Housing Corp., Refunding RB, Series L, AMT,
5.25%, 1/01/38

 

 

7,160

 

 

6,842,239

 

Lexington-Fayette Urban County Airport Board,
Refunding RB, Series A, 5.00%, 7/01/27

 

 

7,001

 

 

7,188,461

 

Louisville & Jefferson County Metropolitan Government
Parking Authority, RB, Series A, 5.38%, 12/01/39

 

 

9,195

 

 

9,120,980

 

 

 

 

 

 




 

 

 

 

 

 

31,018,603

 









Maryland — 0.8%

 

 

 

 

 

 

 

Maryland State Transportation Authority, RB,
Transportation Facility Project (AGM), 5.00%,
7/01/41

 

 

4,710

 

 

4,729,782

 









Nevada — 3.0%

 

 

 

 

 

 

 

Clark County Water Reclamation District, GO, Series B,
5.75%, 7/01/34

 

 

15,789

 

 

16,832,237

 









New York — 5.0%

 

 

 

 

 

 

 

New York City Municipal Water Finance Authority, RB:

 

 

 

 

 

 

 

Series DD, 5.00%, 6/15/37

 

 

24,199

 

 

23,848,513

 

Series FF-2, 5.50%, 6/15/40

 

 

4,154

 

 

4,276,129

 

 

 

 

 

 




 

 

 

 

 

 

28,124,642

 










 

 

 

 

See Notes to Financial Statements.

 

 





 

SEMI-ANNUAL REPORT

FEBRUARY 28, 2011

39




 

 



 

 

Schedule of Investments (continued)

BlackRock MuniVest Fund, Inc. (MVF)

 

(Percentages shown are based on Net Assets)


 

 

 

 

 

 

 

 

Municipal Bonds Transferred to
Tender Option Bond Trusts (f)

 

Par
(000)

 

Value

 









North Carolina — 3.2%

 

 

 

 

 

 

 

North Carolina Capital Facilities Finance Agency,
Refunding RB:

 

 

 

 

 

 

 

Duke University Project, Series A, 5.00%, 10/01/41

 

$

12,678

 

$

12,658,032

 

Wake Forest University, 5.00%, 1/01/38

 

 

5,000

 

 

5,006,100

 

 

 

 

 

 




 

 

 

 

 

 

17,664,132

 









Ohio — 3.8%

 

 

 

 

 

 

 

County of Allen Ohio, Refunding RB, Catholic
Healthcare, Series A, 5.25%, 6/01/38

 

 

2,870

 

 

2,718,665

 

County of Montgomery Ohio, Refunding RB,
Catholic Healthcare, Series A, 5.50%, 5/01/34

 

 

5,470

 

 

5,494,560

 

Ohio Higher Educational Facility Commission,
Refunding RB, Hospital, Cleveland Clinic Health,
Series A, 5.25%, 1/01/33

 

 

4,400

 

 

4,255,372

 

State of Ohio, RB, Cleveland Clinic Health, Series B,
5.50%, 1/01/34

 

 

8,500

 

 

8,510,030

 

 

 

 

 

 




 

 

 

 

 

 

20,978,627

 









Oregon — 2.2%

 

 

 

 

 

 

 

Oregon State Housing & Community Services
Department, HRB, Series A, AMT, 4.95%, 7/01/30

 

 

13,000

 

 

12,161,609

 









South Carolina — 0.6%

 

 

 

 

 

 

 

South Carolina State Housing Finance & Development
Authority, Refunding RB, Series B-1, 5.55%, 7/01/39

 

 

3,189

 

 

3,201,143

 









Texas — 8.3%

 

 

 

 

 

 

 

Harris County Health Facilities Development Corp.,
Refunding RB, School Health Care System, Series B,
5.75%, 7/01/27 (c)

 

 

20,970

 

 

24,375,109

 

Houston Higher Education Finance Corp., RB, Rice
University Project, Series A, 5.00%, 5/15/40

 

 

10,000

 

 

10,094,878

 

Texas Department of Housing & Community Affairs,
MRB, Series B, AMT (Ginnie Mae), 5.25%, 9/01/32

 

 

6,586

 

 

6,324,202

 

Texas State University Systems, Refunding RB (AGM),
5.00%, 3/15/30

 

 

5,667

 

 

5,704,165

 

 

 

 

 

 




 

 

 

 

 

 

46,498,354

 









Virginia — 1.2%

 

 

 

 

 

 

 

Fairfax County IDA Virginia, Refunding RB, Health Care,
Inova Health System, Series A, 5.50%, 5/15/35

 

 

2,099

 

 

2,117,663

 

Virginia Small Business Financing Authority, Refunding
RB, Sentara Healthcare, 5.00%, 11/01/40

 

 

5,002

 

 

4,828,800

 

 

 

 

 

 




 

 

 

 

 

 

6,946,463

 









Washington — 4.5%

 

 

 

 

 

 

 

Central Puget Sound Regional Transit Authority, RB,
Series A:

 

 

 

 

 

 

 

5.00%, 11/01/36

 

 

5,500

 

 

5,502,557

 

(AGM), 5.00%, 11/01/32

 

 

14,007

 

 

14,148,680

 

Central Puget Sound Regional Transportation Authority,
Washington, RB, Series A, 5.00%, 11/01/34

 

 

5,500

 

 

5,502,558

 

 

 

 

 

 




 

 

 

 

 

 

25,153,795

 









Wisconsin — 1.0%

 

 

 

 

 

 

 

Wisconsin Health & Educational Facilities Authority,
Refunding RB, Froedtert & Community Health Inc.,
5.25%, 4/01/39

 

 

6,099

 

 

5,612,357

 









Total Municipal Bonds Transferred to
Tender Option Bond Trusts — 56.3%

 

 

 

 

 

314,197,248

 









Total Long-Term Investments
(Cost — $950,715,778) — 170.0%

 

 

 

 

 

948,488,303

 










 

 

 

 

 

 

 

 

Short-Term Securities

 

Shares

 

Value

 









FFI Institutional Tax-Exempt Fund, 0.13% (g)(h)

 

 

8,773,646

 

$

8,773,646

 









Total Short-Term Securities
(Cost — $8,773,646) — 1.6%

 

 

 

 

 

8,773,646

 









Total Investments (Cost — $959,489,424*) — 171.6%

 

 

 

 

 

957,261,949

 

Other Assets Less Liabilities — 3.2%

 

 

 

 

 

18,021,683

 

Liability for Trust Certificates, Including
Interest Expense and Fees Payable — (31.1)%

 

 

 

 

 

(173,579,492

)

Preferred Shares, at Redemption Value — (43.7)%

 

 

 

 

 

(243,846,821

)

 

 

 

 

 




Net Assets Applicable to Common Shares — 100.0%

 

 

 

 

$

557,857,319

 

 

 

 

 

 




 

 

 

 

 

 

 

 










 

 

*

The cost and unrealized appreciation (depreciation) of investments as of February 28, 2011, as computed for federal income tax purposes, were as follows:


 

 

 

 

 

 

 

 

Aggregate cost

 

 

 

 

$

788,694,994

 

 

 

 

 

 




Gross unrealized appreciation

 

 

 

 

$

28,531,800

 

Gross unrealized depreciation

 

 

 

 

 

(33,415,792

)

 

 

 

 

 




Net unrealized depreciation

 

 

 

 

$

(4,883,992

)

 

 

 

 

 





 

 

(a)

US government securities, held in escrow, are used to pay interest on this security as well as to retire the bond in full at the date indicated, typically at a premium to par.

 

 

(b)

Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration to qualified institutional investors.

 

 

(c)

Security is collateralized by Municipal or US Treasury obligations.

 

 

(d)

Represents a zero-coupon bond. Rate shown reflects the current yield as of report date.

 

 

(e)

Variable rate security. Rate shown is as of report date.

 

 

(f)

Securities represent bonds transferred to a TOB in exchange for which the Trust acquired residual interest certificates. These securities serve as collateral in a financing transaction. See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs.

 

 

(g)

Investments in companies considered to be an affiliate of the Trust during the period, for purposes of Section 2 (a)(3) of the Investment Company Act of 1940, as amended, were as follows:


 

 

 

 

 

 

 

 

 

 

 

 

 

 











Affiliate

 

Shares Held at
August 31,
2010

 

Net
Activity

 

Shares Held at
February 28,
2011

 

Income

 











FFI Institutional
Tax-Exempt Fund

 

 

4,494,923

 

 

4,278,723

 

 

8,773,646

 

$

10,410

 
















 

 

(h)

Represents the current yield as of report date.

 

 

Financial futures contracts sold as of February 28, 2011 were as follows:


 

 

 

 

 

 

 

 

 

 

 

 

 

 













Contracts

 

Issue

 

Exchange

 

Expiration

 

Notional
Value

 

Unrealized
Depreciation

 













300

 

10-Year U.S.
Treasury Note

 

Chicago
Board of Trade

 

June
2011

 

$

35,554,118

 

$

(159,945

)
















 

 

 

See Notes to Financial Statements.

 




40

SEMI-ANNUAL REPORT

FEBRUARY 28, 2011




 

 



 

 

Schedule of Investments (concluded)

BlackRock MuniVest Fund, Inc. (MVF)


 

 

 

Fair Value Measurements — Various inputs are used in determining the fair value of investments and derivatives. These inputs are summarized in three broad levels for financial statement purposes as follows:

 

 

 

 

Level 1 — price quotations in active markets/exchanges for identical assets and liabilities

 

 

 

 

Level 2 — other observable inputs (including, but not limited to: quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs)

 

 

 

 

Level 3 — unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the Trust’s own assumptions used in determining the fair value of investments and derivatives)

The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. For information about the Trust’s policy regarding valuation of investments and derivatives and other significant accounting policies, please refer to Note 1 of the Notes to Financial Statements.

The following tables summarize the inputs used as of February 28, 2011 in determining the fair valuation of the Trust’s investments and derivatives:

 

 

 

 

 

 

 

 

 

 

 

 

 

 















Valuation Inputs

 

Level 1

 

Level 2

 

Level 3

 

Total

 















Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments in Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-Term Investments1

 

 

 

$

948,488,303

 

 

 

$

948,488,303

 

Short-Term Securities

 

$

8,773,646

 

 

 

 

 

 

8,773,646

 

 

 













Total

 

$

8,773,646

 

$

948,488,303

 

 

 

$

957,261,949

 

 

 














 

 

 

 

1

See above Schedule of Investments for values in each state or political subdivision.


 

 

 

 

 

 

 

 

 

 

 

 

 

 















 

 

Derivative Financial Instruments2

 





Valuation Inputs

 

Level 1

 

Level 2

 

Level 3

 

Total

 











Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate contracts

 

$

(159,945

)

 

 

 

 

$

(159,945

)

 

 














 

 

 

 

2

Derivative financial instruments are financial futures contracts, which are shown at the unrealized appreciation/depreciation on the instrument.


 

 

 

 

See Notes to Financial Statements.

 

 





 

SEMI-ANNUAL REPORT

FEBRUARY 28, 2011

41




 


 

Statements of Assets and Liabilities


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

February 28, 2011 (Unaudited)

 

BlackRock
Municipal Income
Quality Trust
(BYM)

 

BlackRock
Municipal Income
Investment
Quality Trust
(BAF)

 

BlackRock
Municipal
Bond Trust
(BBK)

 

BlackRock
Municipal Bond
Investment Trust
(BIE)

 

BlackRock
Municipal
Income Trust II
(BLE)

 

BlackRock
MuniHoldings
Investment
Quality Fund
(MFL)

 

BlackRock
MuniVest
Fund, Inc.
(MVF)

 
























Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
























Investments at value — unaffiliated1

 

$

554,886,892

 

$

181,241,550

 

$

223,879,185

 

$

76,760,901

 

$

487,599,955

 

$

808,720,412

 

$

948,488,303

 

Investments at value — affiliated2

 

 

2,376,259

 

 

5,323,892

 

 

1,592,687

 

 

1,965,149

 

 

4,910,889

 

 

13,487,527

 

 

8,773,646

 

Cash pledged as collateral for financial futures contracts

 

 

375,000

 

 

95,000

 

 

265,000

 

 

70,000

 

 

440,000

 

 

670,000

 

 

580,000

 

Cash

 

 

 

 

 

 

 

 

 

 

35,624

 

 

262,263

 

 

 

Interest receivable

 

 

5,612,918

 

 

2,212,304

 

 

3,174,577

 

 

960,364

 

 

6,643,726

 

 

10,899,982

 

 

13,356,419

 

Investments sold receivable

 

 

140,000

 

 

 

 

85,000

 

 

1,508,452

 

 

1,089,497

 

 

1,326,341

 

 

16,172,419

 

Income receivable — affiliated

 

 

196

 

 

49

 

 

75

 

 

16

 

 

178

 

 

326

 

 

354

 

Prepaid expenses

 

 

36,755

 

 

20,906

 

 

14,539

 

 

3,799

 

 

35,962

 

 

44,702

 

 

43,001

 

Other assets

 

 

53,440

 

 

13,618

 

 

20,703

 

 

4,470

 

 

48,590

 

 

91,216

 

 

98,830

 

 

 






















Total assets

 

 

563,481,460

 

 

188,907,319

 

 

229,031,766

 

 

81,273,151

 

 

500,804,421

 

 

835,502,769

 

 

987,512,972

 

 

 






















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
























Accrued Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
























Bank overdraft

 

 

 

 

 

 

24,983

 

 

18,000

 

 

 

 

 

 

218

 

Income dividends payable — Common Shares

 

 

2,025,708

 

 

651,300

 

 

897,776

 

 

262,799

 

 

1,944,883

 

 

2,827,800

 

 

3,704,960

 

Investment advisory fees payable

 

 

233,085

 

 

77,295

 

 

94,951

 

 

33,007

 

 

188,131

 

 

309,131

 

 

372,542

 

Officer’s and Trustees’ fees payable

 

 

55,691

 

 

15,485

 

 

22,703

 

 

5,915

 

 

50,633

 

 

93,671

 

 

100,844

 

Interest expense and fees payable

 

 

51,765

 

 

21,281

 

 

5,867

 

 

9,978

 

 

29,935

 

 

64,529

 

 

128,545

 

Margin variation payable

 

 

21,328

 

 

5,141

 

 

14,812

 

 

3,719

 

 

60,562

 

 

284,283

 

 

32,813

 

Other affiliates payable

 

 

2,901

 

 

992

 

 

1,182

 

 

409

 

 

2,550

 

 

4,314

 

 

5,010

 

Investments purchased payable

 

 

 

 

2,021,413

 

 

 

 

1,497,166

 

 

2,248,144

 

 

 

 

7,932,736

 

Other accrued expenses payable

 

 

57,699

 

 

50,625

 

 

81,988

 

 

11,926

 

 

112,492

 

 

35,073

 

 

80,217

 

Other liabilities

 

 

 

 

 

 

 

 

 

 

 

 

20,600

 

 

 

 

 






















Total accrued liabilities

 

 

2,448,177

 

 

2,843,532

 

 

1,144,262

 

 

1,842,919

 

 

4,637,330

 

 

3,639,401

 

 

12,357,885

 

 

 






















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
























Other Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
























Trust certificates3

 

 

80,914,512

 

 

25,866,266

 

 

7,399,148

 

 

16,275,832

 

 

39,252,437

 

 

68,400,059

 

 

173,450,947

 

 

 






















Total Liabilities

 

 

83,362,689

 

 

28,709,798

 

 

8,543,410

 

 

18,118,751

 

 

43,889,767

 

 

72,039,460

 

 

185,808,832

 

 

 






















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
























Preferred Shares at Redemption Value

 
























$25,000 per share liquidation preference, plus unpaid dividends4,5

 

 

137,256,220

 

 

42,278,454

 

 

79,904,531

 

 

17,851,005

 

 

151,309,510

 

 

274,663,843

 

 

243,846,821

 

 

 






















Net Assets Applicable to Common Shareholders

 

$

342,862,551

 

$

117,919,067

 

$

140,583,825

 

$

45,303,395

 

$

305,605,144

 

$

488,799,466

 

$

557,857,319

 

 

 






















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
























Net Assets Applicable to Common Shareholders Consist of

 
























Paid-in capital6,7,8

 

$

373,408,964

 

$

124,044,616

 

$

148,424,387

 

$

47,263,422

 

$

330,974,923

 

$

524,961,561

 

$

570,081,570

 

Undistributed net investment income

 

 

6,876,864

 

 

2,397,003

 

 

3,374,921

 

 

925,447

 

 

6,609,704

 

 

9,759,032

 

 

14,985,856

 

Accumulated net realized loss

 

 

(13,753,737

)

 

(6,239,524

)

 

(1,957,842

)

 

(2,855,368

)

 

(16,897,337

)

 

(34,470,294

)

 

(24,822,687

)

Net unrealized appreciation/ depreciation

 

 

(23,669,540

)

 

(2,283,028

)

 

(9,257,641

)

 

(30,106

)

 

(15,082,146

)

 

(11,450,833

)

 

(2,387,420

)

 

 






















Net Assets Applicable to Common Shareholders

 

$

342,862,551

 

$

117,919,067

 

$

140,583,825

 

$

45,303,395

 

$

305,605,144

 

$

488,799,466

 

$

557,857,319

 

 

 






















Net asset value per Common Share

 

$

13.03

 

$

13.49

 

$

13.47

 

$

13.58

 

$

13.12

 

$

12.96

 

$

8.88

 

 

 






















1

Investments at cost — unaffiliated

 

$

578,452,468

 

$

183,499,520

 

$

233,041,707

 

$

76,772,880

 

$

502,560,543

 

$

819,977,712

 

$

950,715,778

 

 

 

 






















2

Investments at cost — affiliated

 

$

2,376,259

 

$

5,323,892

 

$

1,592,687

 

$

1,965,149

 

$

4,910,889

 

$

13,487,527

 

$

8,773,646

 

 

 

 






















3

Represents short-term floating rate certificates issued by TOBs.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4

Preferred Shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Par value $0.001 per share

 

 

5,490

 

 

1,691

 

 

3,196

 

 

714

 

 

6,052

 

 

 

 

 

 

 

 






















 

Par value $0.10 per share

 

 

 

 

 

 

 

 

 

 

 

 

10,986

 

 

9,753

 

 

 

 






















5

Preferred Shares authorized

 

 

unlimited

 

 

unlimited

 

 

unlimited

 

 

unlimited

 

 

unlimited

 

 

1 million

 

 

10 million

 

 

 

 






















6

Common Shares outstanding

 

 

26,307,892

 

 

8,742,277

 

 

10,439,257

 

 

3,335,018

 

 

23,292,010

 

 

37,704,227

 

 

62,795,938

 

 

 

 






















7

Par value per Common Share

 

$

0.001

 

$

0.001

 

$

0.001

 

$

0.001

 

$

0.001

 

$

0.10

 

$

0.10

 

 

 

 






















8

Common Shares authorized

 

 

unlimited

 

 

unlimited

 

 

unlimited

 

 

unlimited

 

 

unlimited

 

 

unlimited

 

 

150 million

 

 

 

 























 

 

 

See Notes to Financial Statements.

 

 


42

SEMI-ANNUAL REPORT

FEBRUARY 28, 2011




 


 

Statements of Operations


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended
February 28, 2011 (Unaudited)

 

BlackRock
Municipal Income
Quality Trust
(BYM)

 

BlackRock
Municipal Income
Investment
Quality Trust
(BAF)

 

BlackRock
Municipal
Bond Trust
(BBK)

 

BlackRock
Municipal Bond
Investment Trust
(BIE)

 

BlackRock
Municipal
Income Trust II
(BLE)

 

BlackRock
MuniHoldings
Investment
Quality Fund
(MFL)

 

BlackRock
MuniVest
Fund, Inc.
(MVF)

 

















Investment Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
























Interest

 

$

14,574,014

 

$

4,753,335

 

$

6,767,017

 

$

2,118,083

 

$

14,247,308

 

$

21,151,083

 

$

26,876,185

 

Income — affiliated

 

 

9,068

 

 

3,110

 

 

2,812

 

 

627

 

 

7,143

 

 

22,693

 

 

14,622

 

 

 






















Total income

 

 

14,583,082

 

 

4,756,445

 

 

6,769,829

 

 

2,118,710

 

 

14,254,451

 

 

21,173,776

 

 

26,890,807

 

 

 






















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
























Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
























Investment advisory

 

 

1,572,885

 

 

524,666

 

 

757,702

 

 

264,007

 

 

1,390,812

 

 

2,339,378

 

 

2,502,583

 

Professional

 

 

104,804

 

 

42,869

 

 

38,613

 

 

28,360

 

 

55,136

 

 

120,343

 

 

115,835

 

Commissions for Preferred Shares

 

 

64,869

 

 

18,139

 

 

44,571

 

 

9,243

 

 

110,315

 

 

193,589

 

 

172,723

 

Accounting services

 

 

27,177

 

 

16,462

 

 

20,041

 

 

7,611

 

 

30,971

 

 

50,454

 

 

51,546

 

Printing

 

 

25,550

 

 

9,007

 

 

10,870

 

 

4,144

 

 

23,471

 

 

17,574

 

 

20,236

 

Officer and Trustees

 

 

19,971

 

 

6,879

 

 

9,027

 

 

2,781

 

 

19,710

 

 

29,549

 

 

33,456

 

Transfer agent

 

 

14,545

 

 

9,095

 

 

12,216

 

 

8,931

 

 

17,973

 

 

34,889

 

 

42,863

 

Custodian

 

 

12,998

 

 

6,280

 

 

8,619

 

 

3,859

 

 

14,228

 

 

20,174

 

 

20,075

 

Registration

 

 

4,180

 

 

4,428

 

 

4,598

 

 

4,528

 

 

4,898

 

 

6,150

 

 

12,558

 

Miscellaneous

 

 

35,025

 

 

22,887

 

 

27,878

 

 

19,768

 

 

39,023

 

 

52,836

 

 

61,082

 

 

 






















Total expenses excluding interest expense and fees

 

 

1,882,004

 

 

660,712

 

 

934,135

 

 

353,232

 

 

1,706,537

 

 

2,864,936

 

 

3,032,957

 

Interest expense and fees1

 

 

312,670

 

 

98,316

 

 

28,038

 

 

66,992

 

 

149,012

 

 

295,659

 

 

730,123

 

 

 






















Total expenses

 

 

2,194,674

 

 

759,028

 

 

962,173

 

 

420,224

 

 

1,855,549

 

 

3,160,595

 

 

3,763,080

 

Less fees waived by advisor

 

 

(51,917

)

 

(17,658

)

 

(117,202

)

 

(40,765

)

 

(127,861

)

 

(209,835

)

 

(3,482

)

 

 






















Total expenses after fees waived

 

 

2,142,757

 

 

741,370

 

 

844,971

 

 

379,459

 

 

1,727,688

 

 

2,950,760

 

 

3,759,598

 

 

 






















Net investment income

 

 

12,440,325

 

 

4,015,075

 

 

5,924,858

 

 

1,739,251

 

 

12,526,763

 

 

18,223,016

 

 

23,131,209

 

 

 






















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
























Realized and Unrealized Gain (Loss)

 
























Net realized gain (loss) from investments

 

 

806,236

 

 

(483,619

)

 

921,267

 

 

(723,343

)

 

(324,970

)

 

(5,699,708

)

 

(5,594,442

)

 

 






















Net change in unrealized appreciation/ depreciation on:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments

 

 

(42,867,264

)

 

(13,442,902

)

 

(20,192,608

)

 

(5,803,820

)

 

(35,308,638

)

 

(59,741,280

)

 

(65,495,984

)

Financial futures contracts

 

 

(103,964

)

 

(25,058

)

 

(95,119

)

 

(18,127

)

 

(121,558

)

 

(193,533

)

 

(159,945

)

 

 






















 

 

 

(42,971,228

)

 

(13,467,960

)

 

(20,287,727

)

 

(5,821,947

)

 

(35,430,196

)

 

(59,934,813

)

 

(65,655,929

)

 

 






















Total realized and unrealized loss

 

 

(42,164,992

)

 

(13,951,579

)

 

(19,366,460

)

 

(6,545,290

)

 

(35,755,166

)

 

(65,634,521

)

 

(71,250,371

)

 

 






















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
























Dividends and Distributions to Preferred Shareholders From

 
























Net investment income

 

 

(287,188

)

 

(88,724

)

 

(165,936

)

 

(37,328

)

 

(315,988

)

 

(574,148

)

 

(566,805

)

Net realized gain

 

 

 

 

 

 

(671

)

 

 

 

 

 

 

 

(333

)

 

 






















Total dividends and distributions to Preferred Shareholders

 

 

(287,188

)

 

(88,724

)

 

(166,607

)

 

(37,328

)

 

(315,988

)

 

(574,148

)

 

(567,138

)

 

 






















Net Decrease in Net Assets Applicable to Common Shareholders Resulting from Operations

 

$

(30,011,855

)

$

(10,025,228

)

$

(13,608,209

)

$

(4,843,367

)

$

(23,544,391

)

$

(47,985,653

)

$

(48,686,300

)

 

 























 

 

 

 

1

Related to TOBs.


 

 

 

 

See Notes to Financial Statements.





 

SEMI-ANNUAL REPORT

FEBRUARY 28, 2011

43




 


Statements of Changes in Net Assets


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BlackRock Municipal
Income Quality Trust (BYM)

 

BlackRock Municipal Income
Investment Quality Trust (BAF)

 

 

 


 


Increase (Decrease) in Net Assets Applicable to Common Shareholders:

 

Six Months
Ended
February 28,
2011
(Unaudited)

 

Year Ended
August 31,
2010

 

Six Months
Ended
February 28,
2011
(Unaudited)

 

Year Ended
August 31,
2010

 















Operations

 

 

 

 

 

 

 

 

 

 

 

 

 















Net investment income

 

$

12,440,325

 

$

25,205,226

 

$

4,015,075

 

$

8,227,690

 

Net realized gain (loss)

 

 

806,236

 

 

616,249

 

 

(483,619

)

 

(3,125,131

)

Net change in unrealized appreciation/depreciation

 

 

(42,971,228

)

 

25,550,335

 

 

(13,467,960

)

 

11,392,593

 

Dividends to Preferred Shareholders from net investment income

 

 

(287,188

)

 

(558,436

)

 

(88,724

)

 

(172,818

)

 

 






 







Net increase (decrease) in net assets applicable to Common Shareholders resulting from operations

 

 

(30,011,855

)

 

50,813,374

 

 

(10,025,228

)

 

16,322,334

 

 

 






 







 

 

 

 

 

 

 

 

 

 

 

 

 

 















Dividends to Common Shareholders From

 

 

 

 

 

 

 

 

 

 

 

 

 















Net investment income

 

 

(12,149,035

)

 

(22,281,818

)

 

(3,881,307

)

 

(7,442,276

)

 

 






 







 

 

 

 

 

 

 

 

 

 

 

 

 

 















Capital Share Transactions

 

 

 

 

 

 

 

 

 

 

 

 

 















Reinvestment of common dividends

 

 

460,621

 

 

697,165

 

 

53,170

 

 

67,819

 

 

 






 







 

 

 

 

 

 

 

 

 

 

 

 

 

 















Net Assets Applicable to Common Shareholders

 

 

 

 

 

 

 

 

 

 

 

 

 















Total increase (decrease) in net assets applicable to Common Shareholders

 

 

(41,700,269

)

 

29,228,721

 

 

(13,853,365

)

 

8,947,877

 

Beginning of period

 

 

384,562,820

 

 

355,334,099

 

 

131,772,432

 

 

122,824,555

 

 

 






 







End of period

 

$

342,862,551

 

$

384,562,820

 

$

117,919,067

 

$

131,772,432

 

 

 






 







Undistributed net investment income

 

$

6,876,864

 

$

6,872,762

 

$

2,397,003

 

$

2,351,959

 

 

 






 








 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BlackRock Municipal
Bond Trust (BBK)

 

BlackRock Municipal Bond
Investment Trust (BIE)

 

 

 


 


Increase (Decrease) in Net Assets Applicable to Common Shareholders:

 

Six Months
Ended
February 28,
2011
(Unaudited)

 

Year Ended
August 31,
2010

 

Six Months
Ended
February 28,
2011
(Unaudited)

 

Year Ended
August 31,
2010

 















Operations

 

 

 

 

 

 

 

 

 

 

 

 

 















Net investment income

 

$

5,924,858

 

$

11,874,327

 

$

1,739,251

 

$

3,388,502

 

Net realized gain (loss)

 

 

921,267

 

 

3,649,094

 

 

(723,343

)

 

28,656

 

Net change in unrealized appreciation/depreciation

 

 

(20,287,727

)

 

16,824,854

 

 

(5,821,947

)

 

4,203,415

 

Dividends and distributions to Preferred Shareholders from:

 

 

 

 

 

 

 

 

 

 

 

 

 

Net investment income

 

 

(165,936

)

 

(326,106

)

 

(37,328

)

 

(73,259

)

Net realized gain

 

 

(671

)

 

 

 

 

 

 

 

 






 







Net increase (decrease) in net assets applicable to Common Shareholders resulting from operations

 

 

(13,608,209

)

 

32,022,169

 

 

(4,843,367

)

 

7,547,314

 

 

 






 







 

 

 

 

 

 

 

 

 

 

 

 

 

 















Dividends and Distributions to Common Shareholders From

 

 

 

 

 

 

 

 

 

 

 

 

 















Net investment income

 

 

(5,380,708

)

 

(10,597,613

)

 

(1,576,729

)

 

(3,052,054

)

Net realized gain

 

 

(21,662

)

 

 

 

 

 

 

 

 






 







Decrease in net assets resulting from dividends and distributions to Common Shareholders

 

 

(5,402,370

)

 

(10,597,613

)

 

(1,576,729

)

 

(3,052,054

)

 

 






 





















Capital Share Transactions

 

 

 

 

 

 

 

 

 

 

 

 

 















Reinvestment of common dividends and distributions

 

 

378,311

 

 

761,779

 

 

15,929

 

 

9,559

 

 

 






 







 

 

 

 

 

 

 

 

 

 

 

 

 

 















Net Assets Applicable to Common Shareholders

 

 

 

 

 

 

 

 

 

 

 

 

 















Total increase (decrease) in net assets applicable to Common Shareholders

 

 

(18,632,268

)

 

22,186,335

 

 

(6,404,167

)

 

4,504,819

 

Beginning of period

 

 

159,216,093

 

 

137,029,758

 

 

51,707,562

 

 

47,202,743

 

 

 






 







End of period

 

$

140,583,825

 

$

159,216,093

 

$

45,303,395

 

$

51,707,562

 

 

 






 







Undistributed net investment income

 

$

3,374,921

 

$

2,996,707

 

$

925,447

 

$

800,253

 

 

 






 








 

 

 

See Notes to Financial Statements.


44

SEMI-ANNUAL REPORT

FEBRUARY 28, 2011




 


 

Statements of Changes in Net Assets (concluded)


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BlackRock Municipal
Income Trust II (BLE)

 

 

BlackRock MuniHoldings
Investment Quality Fund (MFL)

 

 

 



 



Increase (Decrease) in Net Assets Applicable to Common Shareholders:

 

Six Months
Ended
February 28,
2011
(Unaudited)

 

Year Ended
August 31,
2010

 

 

Six Months
Ended
February 28,
2011
(Unaudited)

 

Year Ended
August 31,
2010

 












Operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 
















Net investment income

 

$

12,526,763

 

$

25,062,944

 

 

$

18,223,016

 

$

36,114,076

 

Net realized gain (loss)

 

 

(324,970

)

 

(1,380,128

)

 

 

(5,699,708

)

 

5,303,256

 

Net change in unrealized appreciation/depreciation

 

 

(35,430,196

)

 

42,483,321

 

 

 

(59,934,813

)

 

33,786,326

 

Dividends to Preferred Shareholders from net investment income

 

 

(315,988

)

 

(619,323

)

 

 

(574,148

)

 

(1,120,623

)

 

 







 







Net increase (decrease) in net assets applicable to Common Shareholders resulting from operations

 

 

(23,544,391

)

 

65,546,814

 

 

 

(47,985,653

)

 

74,083,035

 

 

 







 







 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
















Dividends to Common Shareholders From

 

 

 

 

 

 

 

 

 

 

 

 

 

 
















Net investment income

 

 

(11,559,042

)

 

(22,569,858

)

 

 

(16,963,914

)

 

(31,867,551

)

 

 

 






 







 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
















Capital Share Transactions

 

 

 

 

 

 

 

 

 

 

 

 

 

 
















Reinvestment of common dividends

 

 

439,539

 

 

1,222,581

 

 

 

382,500

 

 

138,384

 

 

 







 







 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
















Net Assets Applicable to Common Shareholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 
















Total increase (decrease) in net assets applicable to Common Shareholders

 

 

(34,663,894

)

 

44,199,537

 

 

 

(64,567,067

)

 

42,353,868

 

Beginning of period

 

 

340,269,038

 

 

296,069,501

 

 

 

553,366,533

 

 

511,012,665

 

 

 







 







End of period

 

$

305,605,144

 

$

340,269,038

 

 

$

488,799,466

 

$

553,366,533

 

 

 







 







Undistributed net investment income

 

$

6,609,704

 

$

5,957,971

 

 

$

9,759,032

 

$

9,074,078

 

 

 







 








 

 

 

 

 

 

 

 

 

 

BlackRock MuniVest
Fund, Inc. (MVF)

 

 

 



Increase (Decrease) in Net Assets Applicable to Common Shareholders:

 

Six Months
Ended
February 28,
2011
(Unaudited)

 

Year Ended
August 31,
2010

 









Operations

 

 

 

 

 

 

 









Net investment income

 

$

23,131,209

 

$

45,513,965

 

Net realized gain (loss)

 

 

(5,594,442

)

 

6,158,635

 

Net change in unrealized appreciation/depreciation

 

 

(65,655,929

)

 

54,194,616

 

Dividends and distributions to Preferred Shareholders from:

 

 

 

 

 

 

 

Net investment income

 

 

(566,805

)

 

(1,128,079

)

Net realized gain

 

 

(333

)

 

 

 

 







Net increase (decrease) in net assets applicable to Common Shareholders resulting from operations

 

 

(48,686,300

)

 

104,739,137

 

 

 







 

 

 

 

 

 

 

 









Dividends and Distributions to Common Shareholders From

 

 

 

 

 

 

 









Net investment income

 

 

(21,804,053

)

 

(40,403,913

)

Net realized gain

 

 

(11,094

)

 

 

 

 







Decrease in net assets resulting from dividends and distributions to Common Shareholders

 

 

(21,815,147

)

 

(40,403,913

)

 

 







 

 

 

 

 

 

 

 









Capital Share Transactions

 

 

 

 

 

 

 









Reinvestment of common dividends and distributions

 

 

3,163,534

 

 

4,970,652

 

 

 







 

 

 

 

 

 

 

 









Net Assets Applicable to Common Shareholders

 

 

 

 

 

 

 









Total increase (decrease) in net assets applicable to Common Shareholders

 

 

(67,337,913

)

 

69,305,876

 

Beginning of period

 

 

625,195,232

 

 

555,889,356

 

 

 







End of period

 

$

557,857,319

 

$

625,195,232

 

 

 







Undistributed net investment income

 

$

14,985,856

 

$

14,225,505

 

 

 








 

 

 

 

See Notes to Financial Statements.

 

 





 

SEMI-ANNUAL REPORT

FEBRUARY 28, 2011

45




 


 

Statements of Cash Flows


 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended February 28, 2011 (Unaudited)

 

BlackRock
Municipal Income
Quality Trust
(BYM)

 

BlackRock
Municipal Income
Investment
Quality Trust
(BAF)

 

BlackRock
Municipal Bond
Investment Trust
(BIE)

 

BlackRock
MuniVest
Fund, Inc.
(MVF)

 















Cash Provided by Operating Activities

 

 

 

 

 

 

 

 

 

 

 

 

 















Net decrease in net assets resulting from operations, excluding dividends to Preferred Shareholders

 

$

(29,724,667

)

$

(9,936,504

)

$

(4,806,039

)

$

(48,119,162

)

Adjustments to reconcile net decrease in net assets resulting from operations to net cash provided by operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

(Increase) decrease in interest receivable

 

 

(84,666

)

 

196,975

 

 

(70,574

)

 

382,216

 

Increase in other assets

 

 

(3,451

)

 

(1,006

)

 

(292

)

 

(4,992

)

Decrease in income receivable — affiliated

 

 

1

 

 

4

 

 

 

 

13

 

Increase in cash pledged as collateral for financial futures contracts

 

 

(375,000

)

 

(95,000

)

 

(70,000

)

 

(580,000

)

Decrease in investment advisory fees payable

 

 

(20,431

)

 

(9,125

)

 

(6,040

)

 

(62,382

)

Increase (decrease) in interest expense and fees payable

 

 

1,344

 

 

(7,360

)

 

1,377

 

 

13,301

 

Increase in other affiliates payable

 

 

1,063

 

 

367

 

 

154

 

 

1,876

 

Decrease in other accrued expenses payable

 

 

(65,770

)

 

(24,610

)

 

(14,746

)

 

(56,790

)

Increase in margin variation payable

 

 

21,328

 

 

5,141

 

 

3,719

 

 

32,813

 

Increase in Officer’s and Trustees’ fees payable

 

 

3,317

 

 

1,164

 

 

480

 

 

3,598

 

Net realized and unrealized gain on investments

 

 

42,064,479

 

 

13,927,527

 

 

6,527,643

 

 

71,095,417

 

Amortization of premium and accretion of discount on investments

 

 

(1,799,085

)

 

158,645

 

 

45,997

 

 

564,421

 

Proceeds from sales of long-term investments

 

 

57,978,023

 

 

35,150,650

 

 

10,427,013

 

 

77,124,711

 

Purchases of long-term investments

 

 

(63,144,343

)

 

(25,019,307

)

 

(10,191,415

)

 

(71,431,277

)

Net proceeds from sales (purchases) of short-term securities

 

 

7,040,478

 

 

(4,112,628

)

 

(266,895

)

 

(4,278,723

)

 

 













Cash provided by operating activities

 

 

11,892,620

 

 

10,234,933

 

 

1,580,382

 

 

24,685,040

 

 

 













 

 

 

 

 

 

 

 

 

 

 

 

 

 















Cash Used for Financing Activities

 

 

 

 

 

 

 

 

 

 

 

 

 















Cash receipts from trust certificates

 

 

 

 

 

 

 

 

2,656,376

 

Cash payments on trust certificates

 

 

 

 

(6,329,998

)

 

 

 

(8,325,275

)

Cash dividends paid to Common Shareholders

 

 

(11,607,067

)

 

(3,819,134

)

 

(1,560,718

)

 

(18,444,550

)

Cash dividends paid to Preferred Shareholders

 

 

(285,553

)

 

(85,801

)

 

(37,664

)

 

(571,516

)

Increase (decrease) in custodian bank payable

 

 

 

 

 

 

18,000

 

 

(75

)

 

 













Cash used for financing activities

 

 

(11,892,620

)

 

(10,234,933

)

 

(1,580,382

)

 

(24,685,040

)

 

 













 

 

 

 

 

 

 

 

 

 

 

 

 

 















Cash

 

 

 

 

 

 

 

 

 

 

 

 

 















Net change in cash

 

 

 

 

 

 

 

 

 

Cash at beginning of period

 

 

 

 

 

 

 

 

 

 

 













Cash at end of period

 

 

 

 

 

 

 

 

 

 

 













 

 

 

 

 

 

 

 

 

 

 

 

 

 















Cash Flow Information

 

 

 

 

 

 

 

 

 

 

 

 

 















Cash paid during the period for interest and fees

 

$

311,326

 

$

105,676

 

$

65,615

 

$

716,822

 

 

 













 

 

 

 

 

 

 

 

 

 

 

 

 

 















Noncash Financing Activities

 

 

 

 

 

 

 

 

 

 

 

 

 















Capital shares issued in reinvestment of dividends paid to Common Shareholders

 

$

460,621

 

$

53,170

 

$

15,929

 

$

3,163,534

 

 

 














 

 

 

A Statement of Cash Flows is presented when a Trust had a significant amount of borrowing during the period, based on the average borrowing outstanding in relation to average total assets.


 

 

 

See Notes to Financial Statements.

 




46

SEMI-ANNUAL REPORT

FEBRUARY 28, 2011




 

 



 

 

Financial Highlights

BlackRock Municipal Income Quality Trust (BYM)


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months
Ended
February 28,
2011
(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended August 31,

 

 


 

 

2010

 

2009

 

2008

 

2007

 

2006

 















Per Share Operating Performance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Net asset value, beginning of period

 

$

14.64

 

$

13.55

 

$

14.04

 

$

14.82

 

$

15.54

 

$

15.61

 

 

 



















Net investment income

 

 

0.47

1

 

0.96

1

 

0.91

1

 

1.04

1

 

1.03

 

 

1.03

 

Net realized and unrealized gain (loss)

 

 

(1.61

)

 

1.00

 

 

(0.55

)

 

(0.83

)

 

(0.67

)

 

(0.09

)

Dividends and distributions to Preferred Shareholders from:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net investment income

 

 

(0.01

)

 

(0.02

)

 

(0.10

)

 

(0.26

)

 

(0.28

)

 

(0.26

)

Net realized gain

 

 

 

 

 

 

 

 

 

 

(0.02

)

 

 

 

 



















Net increase (decrease) from investment operations

 

 

(1.15

)

 

1.94

 

 

0.26

 

 

(0.05

)

 

0.06

 

 

0.68

 

 

 



















Dividends and distributions to Common Shareholders from:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net investment income

 

 

(0.46

)

 

(0.85

)

 

(0.75

)

 

(0.73

)

 

(0.73

)

 

(0.75

)

Net realized gain

 

 

 

 

 

 

 

 

 

 

(0.05

)

 

 

 

 



















Total dividends and distributions to Common Shareholders

 

 

(0.46

)

 

(0.85

)

 

(0.75

)

 

(0.73

)

 

(0.78

)

 

(0.75

)

 

 



















Net asset value, end of period

 

$

13.03

 

$

14.64

 

$

13.55

 

$

14.04

 

$

14.82

 

$

15.54

 

 

 



















Market price, end of period

 

$

13.34

 

$

15.26

 

$

13.69

 

$

13.19

 

$

14.35

 

$

14.65

 

 

 



















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Total Investment Return2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Based on net asset value

 

 

(7.89

)%3

 

14.74

%

 

2.83

%

 

(0.16

)%

 

0.48

%

 

4.92

%

 

 



















Based on market price

 

 

(9.53

)%3

 

18.42

%

 

10.58

%

 

(3.13

)%

 

3.20

%

 

0.07

%

 

 



















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Ratios to Average Net Assets Applicable to Common Shareholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Total expenses4

 

 

1.23

%5

 

1.15

%

 

1.38

%

 

1.24

%

 

1.12

%

 

1.18

%

 

 



















Total expenses after fees waived and before fees paid indirectly4

 

 

1.21

%5

 

1.06

%

 

1.20

%

 

0.98

%

 

0.80

%

 

0.84

%

 

 



















Total expenses after fees waived and paid indirectly4

 

 

1.21

%5

 

1.06

%

 

1.20

%

 

0.98

%

 

0.80

%

 

0.84

%

 

 



















Total expenses after fees waived and paid indirectly and excluding interest expense and fees4,6

 

 

1.03

%5

 

0.92

%

 

0.93

%

 

0.86

%

 

0.80

%

 

0.84

%

 

 



















Net investment income4

 

 

7.00

%5

 

6.85

%

 

7.23

%

 

7.08

%

 

6.67

%

 

6.75

%

 

 



















Dividends to Preferred Shareholders

 

 

0.16

%5

 

0.15

%

 

0.76

%

 

1.80

%

 

1.79

%

 

1.69

%

 

 



















Net investment income to Common Shareholders

 

 

6.84

%5

 

6.70

%

 

6.47

%

 

5.28

%

 

4.88

%

 

5.06

%

 

 



















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Supplemental Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Net assets applicable to Common Shareholders, end of period (000)

 

$

342,863

 

$

384,563

 

$

355,334

 

$

368,133

 

$

388,275

 

$

407,338

 

 

 



















Preferred Shares outstanding at $25,000 liquidation preference, end of period (000)

 

$

137,250

 

$

137,250

 

$

137,250

 

$

149,925

 

$

228,975

 

$

228,975

 

 

 



















Portfolio turnover

 

 

10

%

 

13

%

 

18

%

 

39

%

 

17

%

 

60

%

 

 



















Asset coverage per Preferred Share at $25,000 liquidation preference, end of period

 

$

87,453

 

$

95,049

 

$

89,725

 

$

86,398

 

$

67,402

 

$

69,485

 

 

 




















 

 

 

 

1

Based on average Common Shares outstanding.

 

 

 

 

2

Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Where applicable, total investment returns exclude the effects of any sales charges and include the reinvestment of dividends and distributions.

 

 

 

 

3

Aggregate total investment return.

 

 

 

 

4

Do not reflect the effect of dividends to Preferred Shareholders.

 

 

 

 

5

Annualized.

 

 

 

 

6

Interest expense and fees relate to TOBs. See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs.


 

 

 

 

See Notes to Financial Statements.

 

 





 

SEMI-ANNUAL REPORT

FEBRUARY 28, 2011

47




 

 



 

 

Financial Highlights

BlackRock Municipal Income Investment Quality Trust (BAF)


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months
Ended
February 28,
2011
(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended August 31,

 

 

 

 



 

 

 

2010

 

2009

 

2008

 

2007

 

2006

 















Per Share Operating Performance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Net asset value, beginning of period

 

$

15.08

 

$

14.06

 

$

14.23

 

$

14.68

 

$

15.24

 

$

15.26

 

 

 



















Net investment income

 

 

0.46

1

 

0.94

1

 

0.91

1

 

0.99

1

 

1.01

 

 

1.02

 

Net realized and unrealized gain (loss)

 

 

(1.60

)

 

0.95

 

 

(0.27

)

 

(0.46

)

 

(0.56

)

 

(0.07

)

Dividends to Preferred Shareholders from net investment income

 

 

(0.01

)

 

(0.02

)

 

(0.09

)

 

(0.28

)

 

(0.31

)

 

(0.26

)

 

 



















Net increase (decrease) from investment operations

 

 

(1.15

)

 

1.87

 

 

0.55

 

 

0.25

 

 

0.14

 

 

0.69

 

 

 



















Dividends to Common Shareholders from net investment income

 

 

(0.44

)

 

(0.85

)

 

(0.72

)

 

(0.70

)

 

(0.70

)

 

(0.71

)

 

 



















Net asset value, end of period

 

$

13.49

 

$

15.08

 

$

14.06

 

$

14.23

 

$

14.68

 

$

15.24

 

 

 



















Market price, end of period

 

$

13.10

 

$

15.64

 

$

13.01

 

$

12.42

 

$

13.55

 

$

13.88

 

 

 



















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Total Investment Return2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Based on net asset value

 

 

(7.61

)%3

 

13.93

%

 

5.36

%

 

2.22

%

 

1.17

%

 

5.16

%

 

 



















Based on market price

 

 

(13.50

)%3

 

27.70

%

 

11.70

%

 

(3.35

)%

 

2.54

%

 

(4.48

)%

 

 



















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Ratios to Average Net Assets Applicable to Common Shareholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Total expenses4

 

 

1.24

%5

 

1.23

%

 

1.60

%

 

1.33

%

 

1.19

%

 

1.23

%

 

 



















Total expenses after fees waived and before fees paid indirectly4

 

 

1.21

%5

 

1.14

%

 

1.40

%

 

1.05

%

 

0.87

%

 

0.92

%

 

 



















Total expenses after fees waived and paid indirectly4

 

 

1.21

%5

 

1.14

%

 

1.40

%

 

1.05

%

 

0.86

%

 

0.90

%

 

 



















Total expenses after fees waived and paid indirectly and excluding interest expense and fees4,6

 

 

1.05

%5

 

0.97

%

 

0.98

%

 

0.91

%

 

0.86

%

 

0.90

%

 

 



















Net investment income4

 

 

6.57

%5

 

6.54

%

 

7.04

%

 

6.71

%

 

6.70

%

 

6.79

%

 

 



















Dividends to Preferred Shareholders

 

 

0.14

%5

 

0.14

%

 

0.66

%

 

1.92

%

 

2.05

%

 

1.74

%

 

 



















Net investment income to Common Shareholders

 

 

6.43

%5

 

6.40

%

 

6.38

%

 

4.79

%

 

4.65

%

 

5.05

%

 

 



















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Supplemental Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Net assets applicable to Common Shareholders, end of period (000)

 

$

117,919

 

$

131,772

 

$

122,825

 

$

124,305

 

$

128,215

 

$

133,106

 

 

 



















Preferred Shares outstanding at $25,000 liquidation preference, end of period (000)

 

$

42,275

 

$

42,275

 

$

42,275

 

$

44,375

 

$

76,000

 

$

76,000

 

 

 



















Portfolio turnover

 

 

14

%

 

26

%

 

45

%

 

29

%

 

13

%

 

9

%

 

 



















Asset coverage per Preferred Share at $25,000 liquidation preference, end of period

 

$

94,735

 

$

102,926

 

$

97,637

 

$

95,044

 

$

67,187

 

$

68,792

 

 

 




















 

 

 

 

1

Based on average Common Shares outstanding.

 

 

 

 

2

Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Where applicable, total investment returns exclude the effects of any sales charges and include the reinvestment of dividends and distributions.

 

 

 

 

3

Aggregate total investment return.

 

 

 

 

4

Do not reflect the effect of dividends to Preferred Shareholders.

 

 

 

 

5

Annualized.

 

 

 

 

6

Interest expense and fees relate to TOBs. See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs.


 

 

 

See Notes to Financial Statements.

 




48

SEMI-ANNUAL REPORT

FEBRUARY 28, 2011




 

 



 

 

Financial Highlights

BlackRock Municipal Bond Trust (BBK)


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months
Ended
February 28,
2011
(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended August 31,

 

 

 

 


 

 

 

 

2010

 

2009

 

2008

 

2007

 

2006

 





















Per Share Operating Performance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Net asset value, beginning of period

 

$

15.29

 

$

13.23

 

$

13.96

 

$

15.57

 

$

16.35

 

$

16.36

 

 

 



















Net investment income

 

 

0.57

1

 

1.14

1

 

1.14

1

 

1.23

1

 

1.20

 

 

1.21

 

Net realized and unrealized gain (loss)

 

 

(1.85

)

 

1.97

 

 

(0.83

)

 

(1.48

)

 

(0.63

)

 

0.18

 

Dividends and distributions to Preferred Shareholders from:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net investment income

 

 

(0.02

)

 

(0.03

)

 

(0.13

)

 

(0.28

)

 

(0.32

)

 

(0.25

)

Net realized gain

 

 

2

 

 

 

 

 

(0.03

)

 

 

 

(0.02

)

 

 



















Net increase (decrease) from investment operations

 

 

(1.30

)

 

3.08

 

 

0.18

 

 

(0.56

)

 

0.25

 

 

1.12

 

 

 



















Dividends and distributions to Common Shareholders from:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net investment income

 

 

(0.52

)

 

(1.02

)

 

(0.91

)

 

(0.95

)

 

(1.03

)

 

(1.04

)

Net realized gain

 

 

2

 

 

 

 

 

(0.10

)

 

 

 

(0.09

)

 

 



















Total dividends and distributions to Common Shareholders

 

 

(0.52

)

 

(1.02

)

 

(0.91

)

 

(1.05

)

 

(1.03

)

 

(1.13

)

 

 



















Net asset value, end of period

 

$

13.47

 

$

15.29

 

$

13.23

 

$

13.96

 

$

15.57

 

$

16.35

 

 

 



















Market price, end of period

 

$

13.61

 

$

15.79

 

$

13.80

 

$

13.89

 

$

16.50

 

$

17.89

 

 

 



















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Total Investment Return3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Based on net asset value

 

 

(8.61

)%4

 

24.13

%

 

2.52

%

 

(3.77

)%

 

1.09

%

 

7.18

%

 

 



















Based on market price

 

 

(10.59

)%4

 

22.90

%

 

7.48

%

 

(9.65

)%

 

(2.09

)%

 

11.55

%

 

 



















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Ratios to Average Net Assets Applicable to Common Shareholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Total expenses5

 

 

1.27

%6

 

1.29

%

 

1.51

%

 

1.39

%

 

1.28

%

 

1.37

%

 

 



















Total expenses after fees waived and before fees paid indirectly5

 

 

1.15

%6

 

1.08

%

 

1.19

%

 

1.01

%

 

0.84

%

 

0.88

%

 

 



















Total expenses after fees waived and paid indirectly5

 

 

1.15

%6

 

1.08

%

 

1.19

%

 

1.01

%

 

0.83

%

 

0.86

%

 

 



















Total expenses after fees waived and paid indirectly and excluding interest expense and fees5,7

 

 

1.11

%6

 

1.05

%

 

1.10

%

 

0.98

%

 

0.83

%

 

0.86

%

 

 



















Net investment income5

 

 

8.09

%6

 

8.08

%

 

9.67

%

 

8.25

%

 

7.36

%

 

7.58

%

 

 



















Dividends to Preferred Shareholders

 

 

0.23

%6

 

0.22

%

 

1.11

%

 

1.87

%

 

1.94

%

 

1.57

%

 

 



















Net investment income to Common Shareholders

 

 

7.86

%6

 

7.86

%

 

8.56

%

 

6.38

%

 

5.42

%

 

6.01

%

 

 



















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Supplemental Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Net assets applicable to Common Shareholders, end of period (000)

 

$

140,584

 

$

159,216

 

$

137,030

 

$

144,116

 

$

159,900

 

$

166,895

 

 

 



















Preferred Shares outstanding at $25,000 liquidation preference, end of period (000)

 

$

79,900

 

$

79,900

 

$

79,900

 

$

80,500

 

$

90,500

 

$

90,500

 

 

 



















Portfolio turnover

 

 

15

%

 

51

%

 

46

%

 

27

%

 

14

%

 

85

%

 

 



















Asset coverage per Preferred Share at $25,000 liquidation preference, end of period (000)

 

$

68,989

 

$

74,819

 

$

67,877

 

$

69,766

 

$

69,176

 

$

71,114

 

 

 




















 

 

 

 

1

Based on average Common Shares outstanding.

 

 

 

 

2

Amount is less than $(0.01) per share.

 

 

 

 

3

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. Where applicable, total investment returns exclude the effects of any sales charges and include the reinvestment of dividends and distributions.

 

 

 

 

4

Aggregate total investment return.

 

 

 

 

5

Do not reflect the effect of dividends to Preferred Shareholders.

 

 

 

 

6

Annualized.

 

 

 

 

7

Interest expense and fees relate to TOBs. See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs.


 

 

 

 

See Notes to Financial Statements.

 

 





 

SEMI-ANNUAL REPORT

FEBRUARY 28, 2011

49




 

 



 

 

Financial Highlights

BlackRock Municipal Bond Investment Trust (BIE)


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months
Ended
February 28,
2011
(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended August 31,

 

 

 

 


 

 

 

 

2010

 

2009

 

2008

 

2007

 

2006

 





















Per Share Operating Performance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Net asset value, beginning of period

 

$

15.51

 

$

14.16

 

$

14.86

 

$

15.45

 

$

16.22

 

$

16.31

 

 

 



















Net investment income

 

 

0.52

1

 

1.02

1

 

1.03

1

 

1.16

1

 

1.15

 

 

1.17

 

Net realized and unrealized gain (loss)

 

 

(1.97

)

 

1.27

 

 

(0.76

)

 

(0.51

)

 

(0.67

)

 

(0.06

)

Dividends to Preferred Shareholders from net investment income

 

 

(0.01

)

 

(0.02

)

 

(0.13

)

 

(0.30

)

 

(0.32

)

 

(0.27

)

 

 



















Net increase (decrease) from investment operations

 

 

(1.46

)

 

2.27

 

 

0.14

 

 

0.35

 

 

0.16

 

 

0.84

 

 

 



















Dividends to Common Shareholders from net investment income

 

 

(0.47

)

 

(0.92

)

 

(0.84

)

 

(0.94

)

 

(0.93

)

 

(0.93

)

 

 



















Net asset value, end of period

 

$

13.58

 

$

15.51

 

$

14.16

 

$

14.86

 

$

15.45

 

$

16.22

 

 

 



















Market price, end of period

 

$

13.00

 

$

15.60

 

$

13.20

 

$

14.28

 

$

15.82

 

$

16.70

 

 

 



















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Total Investment Return2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Based on net asset value

 

 

(9.43

)%3

 

16.80

%

 

2.43

%

 

2.34

%

 

0.95

%

 

5.40

%

 

 



















Based on market price

 

 

(13.80

)%3

 

26.02

%

 

(0.64

)%

 

(3.95

)%

 

0.40

%

 

10.97

%

 

 



















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Ratios to Average Net Assets Applicable to Common Shareholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Total expenses4

 

 

1.77

%5

 

1.57

%

 

1.71

%

 

1.54

%

 

1.43

%

 

1.47

%

 

 



















Total expenses after fees waived and before fees paid indirectly4

 

 

1.60

%5

 

1.35

%

 

1.36

%

 

1.13

%

 

0.98

%

 

1.00

%

 

 



















Total expenses after fees waived and paid indirectly4

 

 

1.60

%5

 

1.35

%

 

1.36

%

 

1.13

%

 

0.96

%

 

0.98

%

 

 



















Total expenses after fees waived and paid indirectly and excluding interest expense and fees4,6

 

 

1.32

%5

 

1.15

%

 

1.25

%

 

1.09

%

 

0.96

%

 

0.98

%

 

 



















Net investment income4

 

 

7.34

%5

 

6.92

%

 

7.98

%

 

7.52

%

 

7.22

%

 

7.28

%

 

 



















Dividends to Preferred Shareholders

 

 

0.16

%5

 

0.15

%

 

1.01

%

 

1.99

%

 

2.01

%

 

1.70

%

 

 



















Net investment income to Common Shareholders

 

 

7.18

%5

 

6.77

%

 

6.97

%

 

5.53

%

 

5.21

%

 

5.58

%

 

 







































Supplemental Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Net assets applicable to Common Shareholders, end of period (000)

 

$

45,303

 

$

51,708

 

$

47,203

 

$

49,532

 

$

51,384

 

$

53,798

 

 

 



















Preferred Shares outstanding at $25,000 liquidation preference, end of period (000)

 

$

17,850

 

$

17,850

 

$

17,850

 

$

26,175

 

$

29,775

 

$

29,775

 

 

 



















Portfolio turnover

 

 

11

%

 

47

%

 

71

%

 

30

%

 

23

%

 

6

%

 

 



















Asset coverage per Preferred Share at $25,000 liquidation preference, end of period (000)

 

$

88,452

 

$

97,421

 

$

91,112

 

$

72,318

 

$

68,149

 

$

70,173

 

 

 




















 

 

 

 

1

Based on average Common Shares outstanding.

 

 

 

 

2

Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Where applicable, total investment returns exclude the effects of any sales charges and include the reinvestment of dividends and distributions.

 

 

 

 

3

Aggregate total investment return.

 

 

 

 

4

Do not reflect the effect of dividends to Preferred Shareholders.

 

 

 

 

5

Annualized.

 

 

 

 

6

Interest expense and fees relate to TOBs. See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs.


 

 

 

See Notes to Financial Statements.

 




50

SEMI-ANNUAL REPORT

FEBRUARY 28, 2011




 

 


 

 

Financial Highlights

BlackRock Municipal Income Trust II (BLE)


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months
Ended
February 28,
2011
(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended August 31,

 

 

 

 


 

 

 

 

2010

 

2009

 

2008

 

2007

 

2006

 





















Per Share Operating Performance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Net asset value, beginning of period

 

$

14.63

 

$

12.78

 

$

13.60

 

$

15.08

 

$

15.82

 

$

15.75

 

 

 



















Net investment income

 

 

0.54

1

 

1.08

1

 

1.09

1

 

1.17

1

 

1.17

 

 

1.18

 

Net realized and unrealized gain (loss)

 

 

(1.54

)

 

1.77

 

 

(0.95

)

 

(1.50

)

 

(0.66

)

 

0.18

 

Dividends to Preferred Shareholders from net investment income

 

 

(0.01

)

 

(0.03

)

 

(0.12

)

 

(0.30

)

 

(0.32

)

 

(0.28

)

 

 



















Net increase (decrease) from investment operations

 

 

(1.01

)

 

2.82

 

 

0.02

 

 

(0.63

)

 

0.19

 

 

1.08

 

 

 



















Dividends to Common Shareholders from net investment income

 

 

(0.50

)

 

(0.97

)

 

(0.84

)

 

(0.85

)

 

(0.93

)

 

(1.01

)

 

 



















Net asset value, end of period

 

$

13.12

 

$

14.63

 

$

12.78

 

$

13.60

 

$

15.08

 

$

15.82

 

 

 



















Market price, end of period

 

$

13.02

 

$

15.22

 

$

13.45

 

$

13.27

 

$

15.05

 

$

17.22

 

 

 



















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Total Investment Return2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Based on net asset value

 

 

(6.98

)%3

 

22.83

%

 

1.54

%

 

(4.15

)%

 

1.02

%

 

7.04

%

 

 



















Based on market price

 

 

(11.27

)%3

 

21.42

%

 

9.52

%

 

(6.29

)%

 

(7.38

)%

 

16.66

%

 

 



















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Ratios to Average Net Assets Applicable to Common Shareholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Total expenses4

 

 

1.17

%5

 

1.16

%

 

1.36

%

 

1.24

%

 

1.12

%

 

1.18

%

 

 



















Total expenses after fees waived and before fees paid indirectly4

 

 

1.09

%5

 

1.08

%

 

1.19

%

 

1.07

%

 

0.90

%

 

0.94

%

 

 



















Total expenses after fees waived and paid indirectly4

 

 

1.09

%5

 

1.08

%

 

1.19

%

 

1.07

%

 

0.89

%

 

0.94

%

 

 



















Total expenses after fees waived and paid indirectly and excluding interest expense and fees4,6

 

 

1.00

%5

 

0.99

%

 

1.05

%

 

1.00

%

 

0.89

%

 

0.94

%

 

 



















Net investment income4

 

 

7.91

%5

 

7.89

%

 

9.69

%

 

8.09

%

 

7.43

%

 

7.66

%

 

 



















Dividends to Preferred Shareholders

 

 

0.20

%5

 

0.20

%

 

1.07

%

 

2.04

%

 

2.01

%

 

1.78

%

 

 



















Net investment income to Common Shareholders

 

 

7.71

%5

 

7.69

%

 

8.62

%

 

6.05

%

 

5.42

%

 

5.88

%

 

 



















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Supplemental Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Net assets applicable to Common Shareholders, end of period (000)

 

$

305,605

 

$

340,269

 

$

296,070

 

$

314,889

 

$

347,563

 

$

362,608

 

 

 



















Preferred Shares outstanding at $25,000 liquidation preference, end of period (000)

 

$

151,300

 

$

151,300

 

$

151,300

 

$

166,050

 

$

205,550

 

$

205,550

 

 

 



















Portfolio turnover

 

 

10

%

 

29

%

 

19

%

 

21

%

 

12

%

 

68

%

 

 



















Asset coverage per Preferred Share at $25,000 liquidation preference, end of period

 

$

75,498

 

$

81,226

 

$

73,923

 

$

72,419

 

$

67,279

 

$

69,110

 

 

 




















 

 

 

 

1

Based on average Common Shares outstanding.

 

 

 

 

2

Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Where applicable, total investment returns exclude the effects of any sales charges and include the reinvestment of dividends and distributions.

 

 

 

 

3

Aggregate total investment return.

 

 

 

 

4

Do not reflect the effect of dividends to Preferred Shareholders.

 

 

 

 

5

Annualized.

 

 

 

 

6

Interest expense and fees relate to TOBs. See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs.


 

 

 

 

See Notes to Financial Statements.


 

SEMI-ANNUAL REPORT

FEBRUARY 28, 2011

51




 

 


 

 

Financial Highlights

BlackRock MuniHoldings Investment Quality Fund (MFL)


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months
Ended
February 28,
2011
(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended August 31,

 

 

 

 


 

 

 

2010

 

2009

 

2008

 

2007

 

2006

 





















Per Share Operating Performance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Net asset value, beginning of period

 

$

14.69

 

$

13.57

 

$

13.50

 

$

14.09

 

$

14.75

 

$

15.32

 

 

 



















Net investment income1

 

 

0.48

 

 

0.96

 

 

0.94

 

 

1.01

 

 

1.07

 

 

1.04

 

Net realized and unrealized gain (loss)

 

 

(1.74

)

 

1.04

 

 

(0.03

)

 

(0.61

)

 

(0.66

)

 

(0.47

)

Dividends to Preferred Shareholders from net investment income

 

 

(0.02

)

 

(0.03

)

 

(0.13

)

 

(0.32

)

 

(0.35

)

 

(0.30

)

 

 



















Net increase (decrease) from investment operations

 

 

(1.28

)

 

1.97

 

 

0.78

 

 

0.08

 

 

0.06

 

 

0.27

 

 

 



















Dividends to Common Shareholders from net investment income

 

 

(0.45

)

 

(0.85

)

 

(0.71

)

 

(0.67

)

 

(0.72

)

 

(0.84

)

 

 



















Net asset value, end of period

 

$

12.96

 

$

14.69

 

$

13.57

 

$

13.50

 

$

14.09

 

$

14.75

 

 

 



















Market price, end of period

 

$

12.68

 

$

14.65

 

$

12.63

 

$

11.61

 

$

12.86

 

$

14.37

 

 

 



















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Total Investment Return2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Based on net asset value

 

 

(8.76

)%3

 

15.22

%

 

7.36

%

 

1.16

%

 

0.59

%

 

2.10

%

 

 



















Based on market price

 

 

(10.49

)%3

 

23.46

%

 

16.19

%

 

(4.68

)%

 

(5.76

)%

 

(3.24

)%

 

 



















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Ratios to Average Net Assets Applicable to Common Shareholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Total expenses4

 

 

1.24

%5

 

1.17

%

 

1.32

%

 

1.54

%

 

1.54

%

 

1.46

%

 

 



















Total expenses after fees waived and before fees paid indirectly4

 

 

1.16

%5

 

1.09

%

 

1.20

%

 

1.42

%

 

1.46

%

 

1.38

%

 

 



















Total expenses after fees waived and paid indirectly4

 

 

1.16

%5

 

1.09

%

 

1.20

%

 

1.42

%

 

1.46

%

 

1.38

%

 

 



















Total expenses after fees waived and excluding interest expense and fees4,6

 

 

1.04

%5

 

1.01

%

 

1.07

%

 

1.13

%

 

1.12

%

 

1.12

%

 

 



















Net investment income4

 

 

7.16

%5

 

6.85

%

 

7.48

%

 

7.23

%

 

7.30

%

 

7.08

%

 

 



















Dividends to Preferred Shareholders

 

 

0.22

%5

 

0.21

%

 

1.05

%

 

2.31

%

 

2.40

%

 

2.00

%

 

 



















Net investment income to Common Shareholders

 

 

6.94

%5

 

6.64

%

 

6.43

%

 

4.92

%

 

4.90

%

 

5.08

%

 

 



















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Supplemental Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Net assets applicable to Common Shareholders, end of period (000)

 

$

488,799

 

$

553,367

 

$

511,013

 

$

508,698

 

$

530,903

 

$

555,494

 

 

 



















Preferred Shares outstanding at $25,000 liquidation preference, end of period (000)

 

$

274,650

 

$

274,650

 

$

274,650

 

$

296,125

 

$

363,250

 

$

363,250

 

 

 



















Portfolio turnover

 

 

13

%

 

38

%

 

40

%

 

25

%

 

22

%

 

43

%

 

 



















Asset coverage per Preferred Share at $25,000 liquidation preference, end of period

 

$

69,494

 

$

75,371

 

$

71,516

 

$

67,958

 

$

61,555

 

$

63,240

 

 

 




















 

 

 

 

1

Based on average Common Shares outstanding.

 

 

 

 

2

Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Where applicable, total investment returns exclude the effects of any sales charges and include the reinvestment of dividends and distributions.

 

 

 

 

3

Aggregate total investment return.

 

 

 

 

4

Do not reflect the effect of dividends to Preferred Shareholders.

 

 

 

 

5

Annualized.

 

 

 

 

6

Interest expense and fees relate to TOBs. See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs.


 

 

 

See Notes to Financial Statements.


52

SEMI-ANNUAL REPORT

FEBRUARY 28, 2011




 

 


 

 

Financial Highlights

BlackRock MuniVest Fund, Inc. (MVF)


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months
Ended
February 28,
2011
(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended August 31,

 

 

 

 


 

 

 

2010

 

2009

 

2008

 

2007

 

2006

 





















Per Share Operating Performance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Net asset value, beginning of period

 

$

10.01

 

$

8.98

 

$

8.91

 

$

9.39

 

$

9.93

 

$

10.23

 

 

 



















Net investment income1

 

 

0.37

 

 

0.73

 

 

0.70

 

 

0.67

 

 

0.73

 

 

0.70

 

Net realized and unrealized gain (loss)

 

 

(1.14

)

 

0.97

 

 

(0.03

)

 

(0.45

)

 

(0.55

)

 

(0.23

)

Dividends and distributions to Preferred Shareholders from:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net investment income

 

 

(0.01

)

 

(0.02

)

 

(0.06

)

 

(0.18

)

 

(0.20

)

 

(0.17

)

Net realized gain

 

 

2

 

 

 

 

 

 

 

 

 

 

 

 



















Net increase (decrease) from investment operations

 

 

(0.78

)

 

1.68

 

 

0.61

 

 

0.04

 

 

(0.02

)

 

0.30

 

 

 



















Dividends and distributions to Common Shareholders from:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net investment income

 

 

(0.35

)

 

(0.65

)

 

(0.54

)

 

(0.52

)

 

(0.52

)

 

(0.60

)

Net realized gain

 

 

2

 

 

 

 

 

 

 

 

 

 

 

 



















Total dividends and distributions to Common Shareholders

 

 

(0.35

)

 

(0.65

)

 

(0.54

)

 

(0.52

)

 

(0.52

)

 

(0.60

)

 

 



















Net asset value, end of period

 

$

8.88

 

$

10.01

 

$

8.98

 

$

8.91

 

$

9.39

 

$

9.93

 

 

 



















Market price, end of period

 

$

9.04

 

$

10.38

 

$

8.91

 

$

8.33

 

$

9.35

 

$

9.66

 

 

 



















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Total Investment Return3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Based on net asset value

 

 

(7.91

)%4

 

19.31

%

 

8.18

%

 

0.51

%

 

(0.30

)%

 

3.27

%

 

 



















Based on market price

 

 

(9.59

)%4

 

24.69

%

 

14.81

%

 

(5.63

)%

 

2.05

%

 

1.26

%

 

 



















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Ratios to Average Net Assets Applicable to Common Shareholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Total expenses5

 

 

1.30

%6

 

1.22

%

 

1.53

%

 

1.58

%

 

1.66

%

 

1.60

%

 

 



















Total expenses after fees waived and before fees paid indirectly5

 

 

1.29

%6

 

1.22

%

 

1.50

%

 

1.58

%

 

1.66

%

 

1.60

%

 

 



















Total expenses after fees waived and paid indirectly and excluding interest expense and fees5,7

 

 

1.04

%6

 

1.03

%

 

1.14

%

 

1.10

%

 

1.02

%

 

1.04

%

 

 



















Net investment income5

 

 

7.96

%6

 

7.71

%

 

8.74

%

 

7.34

%

 

7.33

%

 

7.11

%

 

 



















Dividends to Preferred Shareholders

 

 

0.19

%6

 

0.19

%

 

0.78

%

 

1.94

%

 

1.98

%

 

1.72

%

 

 



















Net investment income to Common Shareholders

 

 

7.77

%6

 

7.52

%

 

7.96

%

 

5.40

%

 

5.35

%

 

5.39

%

 

 



















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Supplemental Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 





















Net assets applicable to Common Shareholders, end of period (000)

 

$

557,857

 

$

625,195

 

$

555,889

 

$

551,027

 

$

579,079

 

$

609,612

 

 

 



















Preferred Shares outstanding at $25,000 liquidation preference, end of period (000)

 

$

243,825

 

$

243,825

 

$

243,825

 

$

275,700

 

$

334,000

 

$

334,000

 

 

 



















Portfolio turnover

 

 

8

%

 

25

%

 

31

%

 

41

%

 

39

%

 

56

%

 

 



















Asset coverage per Preferred Share at $25,000 liquidation preference, end of period (000)

 

$

82,201

 

$

89,106

 

$

81,999

 

$

74,993

 

$

68,380

 

$

70,654

 

 

 




















 

 

 

 

1

Based on average Common Shares outstanding.

 

 

 

 

2

Amount is less than $(0.01) per share.

 

 

 

 

3

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. Where applicable, total investment returns exclude the effects of any sales charges and include the reinvestment of dividends and distributions.

 

 

 

 

4

Aggregate total investment return.

 

 

 

 

5

Do not reflect the effect of dividends to Preferred Shareholders.

 

 

 

 

6

Annualized.

 

 

 

 

7

Interest expense and fees relate to TOBs. See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs.


 

 

 

 

See Notes to Financial Statements.


 

SEMI-ANNUAL REPORT

FEBRUARY 28, 2011

53




 


 

Notes to Financial Statements (Unaudited)

1. Organization and Significant Accounting Policies:

BlackRock Municipal Income Quality Trust (“BYM”), BlackRock Municipal Income Investment Quality Trust (“BAF”), BlackRock Municipal Bond Trust (“BBK”), BlackRock Municipal Bond Investment Trust (“BIE”) (BBK and BIE collectively the “Bond Trusts”) and BlackRock Municipal Income Trust II (“BLE”) are organized as Delaware statutory trusts. BlackRock MuniHoldings Investment Quality Fund (“MFL”) and BlackRock MuniVest Fund, Inc. (“MVF”) are organized as a Massachusetts business trust and as a Maryland corporation, respectively. BYM, BAF, BBK, BIE, BLE, MFL and MVF are referred to herein collectively as the “Trusts” and individually as a “Trust.” BYM, BBK and BLE are registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as diversified, closed-end management investment companies. BAF, BIE, MFL and MVF are registered under the 1940 Act as non-diversified, closed-end management investment companies. The Trusts’ financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“US GAAP”), which may require management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates. Each Trust’s Board of Directors/Trustees are collectively referred to throughout this report as the “Board of Trustees” or the “Board.” The Trusts determine and make available for publication the net asset values of their Common Shares on a daily basis.

The following is a summary of significant accounting policies followed by the Trusts:

Valuation: US GAAP defines fair value as the price the Trusts would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The Trusts fair value their financial instruments at market value using independent dealers or pricing services under policies approved by the Board. Municipal investments (including commitments to purchase such investments on a “when-issued” basis) are valued on the basis of prices provided by dealers or pricing services. In determining the value of a particular investment, pricing services may use certain information with respect to transactions in such investments, quotations from dealers, pricing matrixes, market transactions in comparable investments and information with respect to various relationships between investments. Financial futures contracts traded on exchanges are valued at their last sale price. Investments in open-end investment companies are valued at net asset value each business day. Short-term securities with remaining maturities of 60 days or less may be valued at amortized cost, which approximates fair value.

In the event that application of these methods of valuation results in a price for an investment which is deemed not to be representative of the market value of such investment or is not available, the investment will be valued in accordance with a policy approved by the Board as reflecting fair value (“Fair Value Assets”). When determining the price for Fair Value Assets, the investment advisor and/or the sub-advisor seeks to determine the price that each Trust might reasonably expect to receive from the current sale of that asset in an arm’s-length transaction. Fair value determinations shall be based upon all available factors that the investment advisor and/or sub-advisor deems relevant. The pricing of all Fair Value Assets is subsequently reported to the Board or a committee thereof.

Forward Commitments and When-Issued Delayed Delivery Securities: The Trusts may purchase securities on a when-issued basis and may purchase or sell securities on a forward commitment basis. Settlement of such transactions normally occurs within a month or more after the purchase or sale commitment is made. The Trusts may purchase securities under such conditions with the intention of actually acquiring them, but may enter into a separate agreement to sell the securities before the settlement date. Since the value of securities purchased may fluctuate prior to settlement, the Trusts may be required to pay more at settlement than the security is worth. In addition, the Trusts are not entitled to any of the interest earned prior to settlement. When purchasing a security on a delayed delivery basis, the Trusts assume the rights and risks of ownership of the security, including the risk of price and yield fluctuations. In the event of default by the counterparty, the Trusts’ maximum amount of loss is the unrealized appreciation of unsettled when-issued transactions, which is shown in the Schedules of Investments, if any.

Municipal Bonds Transferred to TOBs: The Trusts leverage their assets through the use of TOBs. A TOB is established by a third party sponsor forming a special purpose entity, into which one or more funds, or an agent on behalf of the funds, transfers municipal bonds. Other funds managed by the investment advisor may also contribute municipal bonds to a TOB into which a Trust has contributed bonds. A TOB typically issues two classes of beneficial interests: short-term floating rate certificates, which are sold to third party investors, and residual certificates (“TOB Residuals”), which are generally issued to the participating funds that made the transfer. The TOB Residuals held by a Trust include the right of a Trust (1) to cause the holders of a proportional share of the short-term floating rate certificates to tender their certificates at par, including during instances of a rise in short-term interest rates, and (2) to transfer, within seven days, a corresponding share of the municipal bonds from the TOB to a Trust. The TOB may also be terminated without the consent of a Trust upon the occurrence of certain events as defined in the TOB agreements. Such termination events may include the bankruptcy or default of the municipal bond, a substantial downgrade in credit quality of the municipal bond, the inability of the TOB to obtain quarterly or annual renewal of the liquidity support agreement, a substantial decline in market value of the municipal bond or the inability to remarket the short-term floating rate certificates to third party investors. During the six months ended February 28, 2011, no TOBs that the Trusts participated in were terminated without the consent of the Trusts.

The cash received by the TOB from the sale of the short-term floating rate certificates, less transaction expenses, is paid to a Trust, which typically invests the cash in additional municipal bonds. Each Trust’s transfer of the municipal bonds to a TOB is accounted for as a secured borrowing, therefore the municipal bonds deposited into a TOB are presented in the Trusts’ Schedules of Investments and the proceeds from the issuance of the short-term floating rate certificates are shown as trust certificates in the Statements of Assets and Liabilities.

Interest income, including amortization and accretion of premiums and discounts, from the underlying municipal bonds is recorded by the Trusts 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 shown as interest expense and fees in the Statements of Operations. The short-term floating rate certificates have interest rates that generally

 

 

 


54

SEMI-ANNUAL REPORT

FEBRUARY 28, 2011




 


 

Notes to Financial Statements (continued)

reset weekly and their holders have the option to tender certificates to the TOB for redemption at par at each reset date. At February 28, 2011, the aggregate value of the underlying municipal bonds transferred to TOBs, the related liability for trust certificates and the range of interest rates on the liability for trust certificates were as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 









 

 

Underlying
Municipal
Bonds
Transferred to
TOBs

 

Liability
for Trust
Certificates

 

Range of
Interest
Rates

 









BYM

 

 

$

147,543,940

 

 

 

$

80,914,512

 

 

0.26% – 0.36

%

 

BAF

 

 

$

45,011,635

 

 

 

$

25,866,266

 

 

0.26% – 0.36

%

 

BBK

 

 

$

14,055,519

 

 

 

$

7,399,148

 

 

0.22% – 0.56

%

 

BIE

 

 

$

29,691,735

 

 

 

$

16,275,832

 

 

0.26% – 0.33

%

 

BLE

 

 

$

67,593,413

 

 

 

$

39,252,437

 

 

0.22% – 0.43

%

 

MFL

 

 

$

127,851,542

 

 

 

$

68,400,059

 

 

0.26% – 0.41

%

 

MVF

 

 

$

314,197,248

 

 

 

$

173,450,947

 

 

0.22% – 0.40

%

 









For the six months ended February 28, 2011, the Trusts’ average trust certificates outstanding and the daily weighted average interest rate, including fees, were as follows:

 

 

 

 

 

 

 

 

 

 







 

 

Average
Trust Certificates
Outstanding

 

Daily Weighted
Average
Interest Rate

 







BYM

 

 

$

80,914,512

 

 

0.78

%

 

BAF

 

 

$

26,915,437

 

 

0.74

%

 

BBK

 

 

$

7,399,148

 

 

0.76

%

 

BIE

 

 

$

16,275,832

 

 

0.83

%

 

BLE

 

 

$

39,252,437

 

 

0.77

%

 

MFL

 

 

$

70,025,603

 

 

0.85

%

 

MVF

 

 

$

179,790,502

 

 

0.82

%

 







Should short-term interest rates rise, the Trusts’ investments in TOBs may adversely affect the Trusts’ net investment income and distributions to shareholders. Also, fluctuations in the market values of municipal bonds deposited into the TOB may adversely affect the Trusts’ net asset values per share.

Zero-Coupon Bonds: The Trusts may invest in zero-coupon bonds, which are normally issued at a significant discount from face value and do not provide for periodic interest payments. Zero-coupon bonds may experience greater volatility in market value than similar maturity debt obligations which provide for regular interest payments.

Segregation and Collateralization: In cases in which the 1940 Act and the interpretive positions of the Securities and Exchange Commission (“SEC”) require that the Trusts either deliver collateral or segregate assets in connection with certain investments (e.g., financial futures contracts), the Trusts will, consistent with SEC rules and/or certain interpretive letters issued by the SEC, segregate collateral or designate on their books and records cash or other liquid securities having a market value at least equal to the amount that would otherwise be required to be physically segregated. Furthermore, based on requirements and agreements with certain exchanges and third party broker-dealers, each party has requirements to deliver/deposit securities as collateral for certain investments.

Investment Transactions and Investment Income: For financial reporting purposes, investment transactions are recorded on the dates the transactions are entered into (the trade dates). Realized gains and losses on investment transactions are determined on the identified cost basis. Dividend income is recorded on the ex-dividend dates. Interest income, including amortization and accretion of premiums and discounts on debt securities, is recognized on the accrual basis.

Dividends and Distributions: Dividends from net investment income are declared and paid monthly. Distributions of capital gains are recorded on the ex-dividend dates. The amount and timing of dividends and distributions are determined in accordance with federal income tax regulations, which may differ from US GAAP. Dividends and distributions to Preferred Shareholders are accrued and determined as described in Note 6.

Income Taxes: It is each Trust’s policy to comply with the requirements of the Internal Revenue Code of 1986, as amended, 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.

Each Trust files US federal and various state and local tax returns. No income tax returns are currently under examination. The statute of limitations on each Trust’s US federal tax return remains open for each of the four years ended August 31, 2010. The statutes of limitations on each Trust’s state and local tax returns may remain open for an additional year depending upon the jurisdiction. Management does not believe there are any uncertain tax positions that require recognition of a tax liability.

Deferred Compensation and BlackRock Closed-End Share Equivalent Investment Plan: Under the deferred compensation plan approved by each Trust’s Board, non-interested Trustees (“Independent Trustees”) may defer a portion of their annual complex-wide compensation. Deferred amounts earn an approximate return as though equivalent dollar amounts had been invested in Common Shares of certain other BlackRock Closed-End Funds selected by the Independent Trustees. This has approximately the same economic effect for the Independent Trustees as if the Independent Trustees had invested the deferred amounts directly in certain other BlackRock Closed-End Funds.

The deferred compensation plan is not funded and obligations thereunder represent general unsecured claims against the general assets of each Trust. Each Trust may, however, elect to invest in Common Shares of certain other BlackRock Closed-End Funds selected by the Independent Trustees in order to match its deferred compensation obligations. Investments to cover each Trust’s deferred compensation liability, if any, are included in other assets in the Statements of Assets and Liabilities. Dividends and distributions from the BlackRock Closed-End Fund investments under the plan, if any, are included in income — affiliated in the Statements of Operations.

Other: Expenses directly related to a Trust are charged to that Trust. Other operating expenses shared by several funds are pro rated among those funds on the basis of relative net assets or other appropriate methods. The Trusts have an arrangement with the custodians whereby fees may be reduced by credits earned on uninvested cash balances, which if applicable are shown as fees paid indirectly in the Statements of Operations. The custodians impose fees on overdrawn cash balances, which can be offset by accumulated credits earned or may result in additional custody charges.

 

 

 

 


 

SEMI-ANNUAL REPORT

FEBRUARY 28, 2011

55




 


 

Notes to Financial Statements (continued)

2. Derivative Financial Instruments:

The Trusts engage in various portfolio investment strategies using derivative contracts both to increase the returns of the Trusts and to economically hedge, or protect, their exposure to certain risks such as interest rate risk. These contracts may be transacted on an exchange.

Losses may arise if the value of the contract decreases due to an unfavorable change in the market rates or values of the underlying instrument or if the counterparty does not perform under the contract. Counterparty risk related to exchange-traded financial futures contracts is deemed to be minimal due to the protection against defaults provided by the exchange on which these contracts trade.

Financial Futures Contracts: The Trusts purchase or sell financial futures contracts and options on financial futures contracts to gain exposure to, or economically hedge against, changes in interest rates (interest rate risk). Financial futures contracts are agreements between a Trust and the counter-party to buy or sell a specific quantity of an underlying instrument at a specified price and at a specified date. Depending on the terms of the particular contract, futures contracts are settled either through physical delivery of the underlying instrument on the settlement date or by payment of a cash settlement amount on settlement date. Pursuant to the contract, the Trusts agree 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 margin variation and are recorded by the Trusts as unrealized appreciation or depreciation. When the contract is closed, the Trusts record 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. The use of financial futures contracts involves the risk of an imperfect correlation in the movements in the price of financial futures contracts, interest rates and the underlying assets.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative Instruments Categorized by Risk Exposure:

 

 


Fair Values of Derivative Instruments as of February 28, 2011

 


 

 

Liability Derivatives

 

 

 


 

 

 

 

BYM

 

BAF

 

BBK

 

BIE

 

BLE

 

MFL

 

MVF

 

 

 


 

 

Statements of Assets and
Liabilities Location

 

Value

 


Interest rate contracts

 

 

Net unrealized appreciation/depreciation*

 

$

103,964

 

$

25,058

 

$

95,119

 

$

18,127

 

$

121,558

 

$

193,533

 

$

159,945

 



 

 

*

Includes cumulative appreciation/depreciation of financial futures contracts as reported in the Schedules of Investments. Only current day’s margin variation is reported within the Statements of Assets and Liabilities.


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Effect of Derivative Instruments in the Statements of Operations
Six Months Ended February 28, 2011


 

 

Net Change in Unrealized Appreciation/Depreciation on

 

 


 

 

BYM

 

BAF

 

BBK

 

BIE

 

BLE

 

MFL

 

MVF

 

















Interest rate contracts:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial futures contracts

 

$

(103,964

)

$

(25,058

)

$

(95,119

)

$

(18,127

)

$

(121,558

)

$

(193,533

)

$

(159,945

)
























For the six months ended February 28, 2011, the average quarterly balances of outstanding derivative financial instruments were as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

















 

 

BYM

 

BAF

 

BBK

 

BIE

 

BLE

 

MFL

 

MVF

 

















Financial futures contracts:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average number of contracts sold

 

 

98

 

 

24

 

 

40

 

 

17

 

 

114

 

 

182

 

 

150

 

Average notional value of contracts sold

 

$

11,555,088

 

$

2,785,073

 

$

4,706,019

 

$

2,014,733

 

$

13,510,565

 

$

21,510,241

 

$

17,777,059

 
























3. Investment Advisory Agreement and Other Transactions with Affiliates:

The PNC Financial Services Group, Inc. (“PNC”), Bank of America Corporation (“BAC”) and Barclays Bank PLC (“Barclays”) are the largest stockholders of BlackRock, Inc. (“BlackRock”). Due to the ownership structure, PNC is an affiliate of the Trusts for 1940 Act purposes, but BAC and Barclays are not.

Each Trust entered into an Investment Advisory Agreement with BlackRock Advisors, LLC (the “Manager”), the Trusts’ investment advisor, an indirect, wholly owned subsidiary of BlackRock, to provide investment advisory and administration services. The Manager is responsible for the management of each Trust’s portfolio and provides the necessary personnel, facilities, equipment and certain other services necessary to the operations of each Trust. For such services, each Trust pays the Manager a monthly fee at the following annual rates of each Trust’s average weekly net assets except MFL and MVF, which are based on average daily net assets as follows:

 

 

 

 

 


BYM

 

 

0.55

%

BAF

 

 

0.55

%

BBK

 

 

0.65

%

BIE

 

 

0.65

%

BLE

 

 

0.55

%

MFL

 

 

0.55

%

MVF

 

 

0.50

%







 

 

 


56

SEMI-ANNUAL REPORT

FEBRUARY 28, 2011




 


 

Notes to Financial Statements (continued)

Average weekly net assets and average daily net assets are the average weekly or the average daily value of each Trust’s total assets minus the sum of its accrued liabilities.

The Manager voluntarily agreed to waive a portion of the investment advisory fee with respect to BYM and BAF, as a percentage of average weekly net assets, at an annual rate of 0.05% through October 2010. With respect to the Bond Trusts, the waiver, as a percentage of average weekly net assets is 0.10% through April 2011 and 0.05% through April 2012. With respect to BLE, the waiver, as a percentage of average weekly assets, is 0.05% through July 2012. With respect to MFL, the Manager voluntarily agreed to waive its investment advisory fees on the proceeds of Preferred Shares and TOBs that exceed 35% of net assets applicable to Common Shareholders. For the six months ended February 28, 2011, the Manager waived the following amounts, which are included in fees waived by advisor in the Statements of Operations:

 

 

 

 

 





 

BYM

 

$

48,091

 

BAF

 

$

16,941

 

BBK

 

$

99,292

 

BIE

 

$

34,604

 

BLE

 

$

126,438

 

MFL

 

$

204,079

 





 

The Manager voluntarily agreed to waive its investment advisory fees by the amount of investment advisory fees each Trust pays to the Manager indirectly through its investment in affiliated money market funds, however the Manager does not waive its investment advisory fees by the amount of investment advisory fees paid through each Trust’s investment in other affiliated investment companies, if any. These amounts are included in fees waived by advisor in the Statements of Operations. For the six months ended February 28, 2011, the amounts waived were as follows:

 

 

 

 

 





 

BYM

 

$

3,826

 

BAF

 

$

717

 

BBK

 

$

17,910

 

BIE

 

$

6,161

 

BLE

 

$

1,423

 

MFL

 

$

5,756

 

MVF

 

$

3,482

 





 

The Manager entered into sub-advisory agreements with BlackRock Financial Management, Inc. (“BFM”), an affiliate of the Manager, with respect to BYM, BAF, the Bond Trusts and BLE, and BlackRock Investment Management, LLC (“BIM”), an affiliate of the Manager, with respect to MFL and MVF. The Manager pays BFM and BIM, for services they provide, a monthly fee that is a percentage of the investment advisory fees paid by each Trust to the Manager.

For the period September 1, 2010 through December 31, 2010, each Trust reimbursed the Manager for certain accounting services, which are included in accounting services in the Statements of Operations. The reimbursements were as follows:

 

 

 

 

 





 

BYM

 

$

1,735

 

BAF

 

$

634

 

BBK

 

$

784

 

BIE

 

$

276

 

BLE

 

$

1,694

 

MFL

 

$

2,759

 

MVF

 

$

3,220

 





 

Effective January 1, 2011, the Trusts no longer reimburse the Manager for accounting services.

Certain officers and/or trustees of the Trusts are officers and/or directors of BlackRock or its affiliates. The Trusts reimburse the Manager for compensation paid to the Trusts’ Chief Compliance Officer.

4. Investments:

Purchases and sales of investments, excluding short-term securities, for the six months ended February 28, 2011, were as follows:

 

 

 

 

 

 

 

 








 

 

 

Purchases

 

Sales

 








 

BYM

 

$

62,158,800

 

$

56,705,637

 

BAF

 

$

26,267,503

 

$

34,358,552

 

BBK

 

$

35,870,412

 

$

33,916,728

 

BIE

 

$

9,248,545

 

$

10,612,512

 

BLE

 

$

52,969,946

 

$

51,053,331

 

MFL

 

$

124,514,969

 

$

108,424,312

 

MVF

 

$

77,364,013

 

$

91,257,130

 








 

5. Concentration, Market and Credit Risk:

Each Trust invests a substantial amount of its assets in issuers located in a single state or limited number of states. Please see the Schedules of Investments for concentrations in specific states.

Many municipalities insure repayment of their bonds, which may reduce the potential for loss due to credit risk. The market value of these bonds may fluctuate for other reasons, including market perception of the value of such insurance, and there is no guarantee that the insurer will meet its obligation.

In the normal course of business, the Trusts invest in securities and enter into transactions where risks exist due to fluctuations in the market (market risk) or failure of the issuer of a security to meet all its obligations (issuer credit risk). The value of securities held by the Trusts may decline in response to certain events, including those directly involving the issuers whose securities are owned by the Trusts; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency and interest rate and price fluctuations. Similar to issuer credit risk, the Trusts may be exposed to counterparty credit risk, or the risk that an entity with which the Trusts have unsettled or open transactions may fail to or be unable to perform on its commitments. The Trusts manage counterparty credit risk by entering into transactions only with counterparties that they believe have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties. Financial assets,

 

 

 

 


 

SEMI-ANNUAL REPORT

FEBRUARY 28, 2011

57




 


 

Notes to Financial Statements (continued)

which potentially expose the Trusts to market, issuer and counterparty credit risks, consist principally of financial instruments and receivables due from counterparties. The extent of the Trusts’ exposure to market, issuer and counterparty credit risks with respect to these financial assets is generally approximated by their value recorded in the Trusts’ Statements of Assets and Liabilities, less any collateral held by the Trusts.

As of February 28, 2011, BYM invested a significant portion of its assets in securities in the Transportation, Utilities and County/City/Special District/School District sectors. BAF invested a significant portion of its assets in securities in the County/City/Special District/School District and Utilities sectors. BBK, BIE, BLE and MVF each invested a significant portion of its assets in securities in the Health sector and MFL invested a significant portion of its assets in securities in the Utilities and Transportation sectors. Changes in economic conditions affecting the County/City/Special District/School District, Health, Transportation and Utilities sectors would have a greater impact on the Trusts and could affect the value, income and/or liquidity of positions in such securities.

6. Capital Share Transactions:

Each Trust except for MFL and MVF is authorized to an unlimited number of shares including Preferred Shares, par value $0.001 per share, all of which were initially classified as Common Shares. Each Board is authorized, however, to reclassify any unissued shares without approval of Common Shareholders.

MFL is authorized to issue an unlimited number of shares including 1 million Preferred Shares, par value $0.10 per share.

MVF is authorized to issue 160 million shares, 150 million of which were initially classified as Common Shares, par value $0.10 per share and 10 million of which were classified as Preferred Shares, par value $0.10 per share.

Common Shares

For the periods shown, shares issued and outstanding increased by the following amounts as a result of dividend reinvestment:

 

 

 

 

 

 

 

 








 

 

 

Six Months
Ended
February 28,
2011

 

Year Ended
August 31,
2010

 








 

BYM

 

 

32,748

 

 

49,706

 

BAF

 

 

3,544

 

 

4,686

 

BBK

 

 

26,347

 

 

54,302

 

BIE

 

 

1,042

 

 

639

 

BLE

 

 

31,281

 

 

90,383

 

MFL

 

 

26,817

 

 

9,752

 

MVF

 

 

333,487

 

 

526,507

 








 

Preferred Shares

The Preferred Shares are redeemable at the option of each Trust, in whole or in part, on any dividend payment date at their liquidation preference per share plus any accumulated and unpaid dividends whether or not declared. The Preferred Shares are also subject to mandatory redemption at their liquidation preference plus any accumulated and unpaid dividends, whether or not declared, if certain requirements relating to the composition of the assets and liabilities of a Trust, as set forth in each Trust’s Articles Supplementary/Statement of Preferences/Certificate of Designation (the “Governing Instrument”) are not satisfied.

From time to time in the future, each Trust may effect repurchases of its Preferred Shares at prices below their liquidation preference as agreed upon by the Trust and seller. Each Trust also may redeem its Preferred Shares from time to time as provided in the applicable Governing Instrument. Each Trust intends to effect such redemptions and/or repurchases to the extent necessary to maintain applicable asset coverage requirements or for such other reasons as the Board may determine.

The holders of Preferred Shares have voting rights equal to the holders of Common Shares (one vote per share) and will vote together with holders of Common Shares (one vote per share) as a single class. However, the holders of Preferred Shares, voting as a separate class, are also entitled to elect two Trustees for each Trust. In addition, the 1940 Act requires that along with approval by shareholders that might otherwise be required, the approval of the holders of a majority of any outstanding Preferred Shares, voting separately as a class would be required to (a) adopt any plan of reorganization that would adversely affect the Preferred Shares, (b) change a Trust’s sub-classification as a closed-end investment company or change its fundamental investment restrictions or (c) change its business so as to cease to be an investment company.

The Trusts had the following series of Preferred Shares outstanding, effective yields and reset frequency as of February 28, 2011:

 

 

 

 

 

 

 

 

 

 

 

 

 

 














 

 

 

Series

 

Preferred
Shares

 

Effective
Yield

 

Reset
Frequency
Days

 














 

BYM

 

 

M-7

 

 

1,830

 

 

0.43

%

7

 

 

 

 

 

R-7

 

 

1,830

 

 

0.40

%

7

 

 

 

 

 

F-7

 

 

1,830

 

 

0.40

%

7

 

 

BAF

 

 

M-7

 

 

1,691

 

 

0.43

%

7

 

 

BBK

 

 

T-7

 

 

1,598

 

 

0.43

%

7

 

 

 

 

 

R-7

 

 

1,598

 

 

0.40

%

7

 

 

BIE

 

 

W-7

 

 

714

 

 

0.41

%

7

 

 

BLE

 

 

M-7

 

 

1,513

 

 

0.43

%

7

 

 

 

 

 

T-7

 

 

1,513

 

 

0.43

%

7

 

 

 

 

 

W-7

 

 

1,513

 

 

0.41

%

7

 

 

 

 

 

R-7

 

 

1,513

 

 

0.40

%

7

 

 

MFL

 

 

A

 

 

1,584

 

 

0.43

%

7

 

 

 

 

 

B

 

 

2,642

 

 

0.40

%

7

 

 

 

 

 

C

 

 

2,601

 

 

0.43

%

7

 

 

 

 

 

D

 

 

1,633

 

 

0.41

%

7

 

 

 

 

 

E

 

 

2,526

 

 

0.40

%

7

 

 

MVF

 

 

A

 

 

1,460

 

 

0.23

%

28

 

 

 

 

 

B

 

 

1,460

 

 

0.25

%

28

 

 

 

 

 

C

 

 

1,460

 

 

0.25

%

28

 

 

 

 

 

D

 

 

1,460

 

 

0.25

%

28

 

 

 

 

 

E

 

 

2,190

 

 

0.25

%

7

 

 

 

 

 

F

 

 

1,723

 

 

1.49

%

7

 

 














 


 

 

 


58

SEMI-ANNUAL REPORT

FEBRUARY 28, 2011




 


 

Notes to Financial Statements (continued)

Dividends on seven-day and 28-day Preferred Shares are cumulative at a rate which is reset every seven or 28 days, respectively, based on the results of an auction. If the Preferred Shares fail to clear the auction on an auction date, each Trust is required to pay the maximum applicable rate on the Preferred Shares to holders of such shares for successive dividend periods until such time as the shares are successfully auctioned. The maximum applicable rate on all series of Preferred Shares (except MVF) is the higher of 110% of the AA commercial paper rate or 110% of 90% of the Kenny S&P 30-Day High Grade Index rate divided by 1.00 minus the marginal tax rate. The maximum applicable rate on the Preferred Shares for MVF for Series A, B, C, D and E is 110% of the interest equivalent of the 60-day commercial paper rate and for Series F is the higher of 110% plus or times (i) the Telerate/BBA LIBOR or (ii) 90% of the Kenny S&P 30-Day High Grade Index rate divided by 1.00 minus the marginal tax rate. The low, high and average dividend rates on the Preferred Shares for each Trust for the six months ended February 28, 2011 were as follows:

 

 

 

 

 

 

 

 

 

 

 











 

 

Series

 

Low

 

High

 

Average

 












BYM

 

 

M-7

 

0.37

%

0.50

%

0.42

%

 

 

 

R-7

 

0.37

%

0.50

%

0.42

%

 

 

 

F-7

 

0.37

%

0.50

%

0.42

%

BAF

 

 

M-7

 

0.37

%

0.50

%

0.42

%

BBK

 

 

T-7

 

0.37

%

0.50

%

0.42

%

 

 

 

R-7

 

0.37

%

0.50

%

0.42

%

BIE

 

 

W-7

 

0.37

%

0.50

%

0.42

%

BLE

 

 

M-7

 

0.37

%

0.50

%

0.42

%

 

 

 

T-7

 

0.37

%

0.50

%

0.42

%

 

 

 

W-7

 

0.37

%

0.50

%

0.42

%

 

 

 

R-7

 

0.37

%

0.50

%

0.42

%

MFL

 

 

A

 

0.37

%

0.50

%

0.42

%

 

 

 

B

 

0.37

%

0.50

%

0.42

%

 

 

 

C

 

0.37

%

0.50

%

0.42

%

 

 

 

D

 

0.37

%

0.50

%

0.42

%

 

 

 

E

 

0.37

%

0.50

%

0.42

%

MVF

 

 

A

 

0.22

%

0.28

%

0.25

%

 

 

 

B

 

0.24

%

0.28

%

0.25

%

 

 

 

C

 

0.23

%

0.31

%

0.26

%

 

 

 

D

 

0.23

%

0.29

%

0.25

%

 

 

 

E

 

0.23

%

0.28

%

0.25

%

 

 

 

F

 

1.43

%

1.56

%

1.48

%












Since February 13, 2008, the Preferred Shares of the Trusts failed to clear any of their auctions. As a result, the Preferred Shares dividend rates were reset to the maximum applicable rate, which ranged from 0.22% to 1.56% for the six months ended February 28, 2011. A failed auction is not an event of default for the Trusts but it has a negative impact on the liquidity of Preferred Shares. A failed auction occurs when there are more sellers of a Trust’s auction rate preferred shares than buyers. A successful auction for the Trusts’ Preferred Shares may not occur for some time, if ever, and even if liquidity does resume, Preferred Shareholders may not have the ability to sell the Preferred Shares at their liquidation preference.

The Trusts may not declare dividends or make other distributions on Common Shares or purchase any such shares if, at the time of the declaration, distribution or purchase, asset coverage with respect to the outstanding Preferred Shares is less than 200%.

The Trusts pay commissions of 0.15% on the aggregate principal amount of all shares that fail to clear their auctions and 0.25% on the aggregate principal amount of all shares that successfully clear their auctions. Certain broker dealers have individually agreed to reduce commissions for failed auctions.

Preferred Shares issued and outstanding remained constant during the six months ended February 28, 2011 and the year ended August 31, 2010.

7. Capital Loss Carryforwards:

As of August 31, 2010, the Trusts had capital loss carryforwards available to offset future realized capital gains through the indicated expiration dates as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

















Expires August 31,

 

BYM

 

BAF

 

BBK

 

BIE

 

BLE

 

MFL

 

MVF

 
























2012

 

 

 

 

 

 

 

 

 

$

5,097,889

 

$

1,836,991

 

 

 

2013

 

 

 

$

178,996

 

 

 

 

 

 

 

 

7,986,138

 

 

 

2015

 

$

1,544,099

 

 

 

 

 

$

30,026

 

 

 

 

 

 

 

2016

 

 

3,217,765

 

 

250,838

 

$

772,344

 

 

 

 

1,648,836

 

 

 

 

 

2017

 

 

6,430,212

 

 

 

 

2,225,455

 

 

 

 

3,397,830

 

 

6,481,433

 

$

7,618,622

 

2018

 

 

2,209,430

 

 

1,516,661

 

 

 

 

1,329,063

 

 

4,366,226

 

 

11,734,707

 

 

 

 

 






















Total

 

$

13,401,506

 

$

1,946,495

 

$

2,997,799

 

$

1,359,089

 

$

14,510,781

 

$

28,039,269

 

$

7,618,622

 

 

 






















Under the recently enacted Regulated Investment Company Modernization Act of 2010, capital losses incurred by the Trusts after August 31, 2011 will not be subject to expiration. In addition, these losses must be utilized prior to the losses incurred in pre-enactment taxable years.

 

 

 

 


 

SEMI-ANNUAL REPORT

FEBRUARY 28, 2011

59




 


 

Notes to Financial Statements (concluded)

8. Subsequent Events:

Management’s evaluation of the impact of all subsequent events on the Trusts’ financial statements was completed through the date the financial statements were issued and the following items were noted:

Each Trust paid a net investment income dividend on April 1, 2011 to Common Shareholders of record on March 15, 2011 as follows:

 

 

 

 

 





 

 

Common
Dividend
Per Share

 





BYM

 

$

0.0770

 

BAF

 

$

0.0745

 

BBK

 

$

0.0885

 

BIE

 

$

0.0810

 

BLE

 

$

0.8350

 

MFL

 

$

0.0765

 

MVF

 

$

0.0590

 






The dividends declared on Preferred Shares for the period March 1, 2011 to March 31, 2011 were as follows:

 

 

 

 

 

 

 

 







 

 

Series

 

Dividends
Declared

 







BYM

 

 

M-7

 

$

15,136

 

 

 

 

R-7

 

$

15,141

 

 

 

 

F-7

 

$

15,141

 

 

BAF

 

 

M-7

 

$

13,987

 

 

BBK

 

 

T-7

 

$

13,217

 

 

 

 

R-7

 

$

13,221

 

 

BIE

 

 

W-7

 

$

5,914

 

 

BLE

 

 

M-7

 

$

12,956

 

 

 

 

T-7

 

$

12,073

 

 

 

 

W-7

 

$

12,533

 

 

 

 

R-7

 

$

12,518

 

 

MFL

 

 

A

 

$

13,102

 

 

 

 

B

 

$

21,857

 

 

 

 

C

 

$

21,514

 

 

 

 

D

 

$

13,525

 

 

 

 

E

 

$

20,899

 

 

MVF

 

 

A

 

$

6,886

 

 

 

 

B

 

$

7,246

 

 

 

 

C

 

$

7,845

 

 

 

 

D

 

$

7,704

 

 

 

 

E

 

$

10,846

 

 

 

 

F

 

$

53,164

 










 

 

 


60

SEMI-ANNUAL REPORT

FEBRUARY 28, 2011




 


 

Officers and Trustees


 

Richard E. Cavanagh, Chairman of the Board and Trustee

Karen P. Robards, Vice Chair of the Board, Chair of the Audit Committee and Trustee

Richard S. Davis, President1 and Trustee

Frank J. Fabozzi, Trustee and Member of the Audit Committee

Kathleen F. Feldstein, Trustee

James T. Flynn, Trustee and Member of the Audit Committee

Henry Gabbay, Trustee

Jerrold B. Harris, Trustee

R. Glenn Hubbard, Trustee

W. Carl Kester, Trustee and Member of the Audit Committee

John M. Perlowski, President2 and Chief Executive Officer

Brendan Kyne, Vice President

Anne F. Ackerley, Vice President

Neal Andrews, Chief Financial Officer

Jay Fife, Treasurer

Brian Kindelan, Chief Compliance Officer

Ira Shapiro, Secretary


 

 

 

 

1

President for MFL.

 

 

 

 

2

President for all Trusts except MFL.


 

Investment Advisor

BlackRock Advisors, LLC

Wilmington, DE 19809

 

Sub-Advisors

BlackRock Investment Management, LLC3

Plainsboro, NJ 08536

 

BlackRock Financial Management, Inc.4

New York, NY 10055

 

Custodians

The Bank of New York Mellon3

New York, NY 10286

 

State Street Bank and Trust Company4

Boston, MA 02111

 

Transfer Agents

Common Shares:

BNY Mellon Shareowner Services3

Jersey City, NJ 07310

 

Computershare Trust Company, N.A.4

Providence, RI 02940

 

Auction Agent

Preferred Shares:

The Bank of New York Mellon

New York, NY 10286

 

Accounting Agent

State Street Bank and Trust Company

Princeton, NJ 08540

 

Independent Registered Public Accounting Firm

Deloitte & Touche LLP

Princeton, NJ 08540

 

Legal Counsel

Skadden, Arps, Slate, Meagher & Flom LLP

New York, NY 10036

 

Address of the Trusts

100 Bellevue Parkway

Wilmington, DE 19809

 


 

 

 

 

3

For MFL and MVF.

 

 

 

 

4

For BYM, BAF, BBK, BIE and BLE.


 


 

Effective February 11, 2011, John M. Perlowski became President (except for MFL) and Chief Executive Officer of the Trusts.

 

Effective November 10, 2010, Ira Shapiro became Secretary of the Trusts.

 



 

 

 

 


 

SEMI-ANNUAL REPORT

FEBRUARY 28, 2011

61




 


 

Additional Information


 


Proxy Results


The Annual Meeting of Shareholders was held on September 2, 2010 for shareholders of record on July 6, 2010, to elect trustee/director nominees for each Trust/Fund. Due to a lack of quorum of Preferred Shares, action on the proposal regarding the Preferred Shares nominees’ election for MFL and MVF was subsequently adjourned to October 5, 2010; and action on the proposal regarding Preferred Shares nominees’ election for MFL was additionally adjourned to November 2, 2010. There were no broker non-votes with regard to any of the Trusts/Funds.

Approved the Class III Trustees as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 









 

 

Richard E. Cavanagh

 

Kathleen F. Feldstein

 

Henry Gabbay

 

 

 


 


 


 

 

 

Votes For

 

Votes
Withheld

 

Abstain

 

Votes For

 

Votes
Withheld

 

Abstain

 

Votes For

 

Votes
Withheld

 

Abstain

 





















BYM

 

22,753,383

 

440,001

 

0

 

22,608,872

 

584,512

 

0

 

22,728,667

 

464,717

 

0

 

BAF

 

7,681,253

 

102,632

 

0

 

7,668,953

 

114,932

 

0

 

7,681,253

 

102,632

 

0

 

BBK

 

9,312,298

 

333,968

 

0

 

9,274,549

 

371,717

 

0

 

9,292,784

 

353,482

 

0

 

BIE

 

2,872,562

 

67,434

 

0

 

2,872,793

 

67,203

 

0

 

2,872,562

 

67,434

 

0

 

BLE

 

19,640,429

 

652,517

 

0

 

19,626,543

 

666,403

 

0

 

19,647,436

 

645,510

 

0

 





















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Jerrold B. Harris

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Votes For

 

Votes
Withheld

 

Abstain

 

 

 

 

 

 

 

 

 

 

 

 

 








 

 

 

 

 

 

 

 

 

 

 

 

 

BYM

 

22,691,012

 

502,372

 

0

 

 

 

 

 

 

 

 

 

 

 

 

 

BAF

 

7,681,210

 

102,675

 

0

 

 

 

 

 

 

 

 

 

 

 

 

 

BBK

 

9,332,764

 

313,502

 

0

 

 

 

 

 

 

 

 

 

 

 

 

 

BIE

 

2,872,562

 

67,434

 

0

 

 

 

 

 

 

 

 

 

 

 

 

 

BLE

 

19,644,062

 

648,884

 

0

 

 

 

 

 

 

 

 

 

 

 

 

 






















For the Trusts listed above, Trustees whose term of office continued after the Annual Meeting of Shareholders because they were not up for election are Richard S. Davis, Frank J. Fabozzi, James T. Flynn, R. Glenn Hubbard, W. Carl Kester and Karen P. Robards.

Approved the Directors as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 









 

 

Richard E. Cavanagh

 

Richard S. Davis

 

Frank J. Fabozzi

 

 

 


 


 


 

 

 

Votes For

 

Votes
Withheld

 

Abstain

 

Votes For

 

Votes
Withheld

 

Abstain

 

Votes For

 

Votes
Withheld

 

Abstain

 





















MFL1

 

31,560,448

 

674,782

 

0

 

31,534,312

 

700,918

 

0

 

2,809

 

3

 

0

 

MVF

 

53,974,547

 

2,802,813

 

0

 

53,965,422

 

2,811,938

 

0

 

2,861

 

304

 

728

 





















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Kathleen F. Feldstein

 

James T. Flynn

 

Henry Gabbay

 

 

 


 


 


 

 

 

Votes For

 

Votes
Withheld

 

Abstain

 

Votes For

 

Votes
Withheld

 

Abstain

 

Votes For

 

Votes
Withheld

 

Abstain

 





















MFL

 

31,508,571

 

726,659

 

0

 

31,533,324

 

701,906

 

0

 

31,540,378

 

694,852

 

0

 

MVF

 

54,054,546

 

2,722,814

 

0

 

53,978,687

 

2,798,673

 

0

 

53,954,342

 

2,823,018

 

0

 





















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Jerrold B. Harris

 

R. Glenn Hubbard

 

W. Carl Kester

 

 

 


 


 


 

 

 

Votes For

 

Votes
Withheld

 

Abstain

 

Votes For

 

Votes
Withheld

 

Abstain

 

Votes For

 

Votes
Withheld

 

Abstain

 





















MFL1

 

31,521,029

 

714,201

 

0

 

31,463,801

 

771,429

 

0

 

2,809

 

3

 

0

 

MVF

 

53,955,639

 

2,821,721

 

0

 

53,947,919

 

2,829,441

 

0

 

2,861

 

304

 

728

 





















 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Karen P. Robards

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Votes For

 

Votes
Withheld

 

Abstain

 

 

 

 

 

 

 

 

 

 

 

 

 








 

 

 

 

 

 

 

 

 

 

 

 

 

MFL

 

31,526,790

 

708,440

 

0

 

 

 

 

 

 

 

 

 

 

 

 

 

MVF

 

54,149,279

 

2,628,081

 

0

 

 

 

 

 

 

 

 

 

 

 

 

 





















 

 

 

 

1

Due to the lack of a quorum of Preferred Shares, MFL was unable to act on the election of the two directors reserved for election solely by the Preferred Shareholders for the Fund. Accordingly, Frank J. Fabozzi and W. Carl Kester will remain in office and continue to serve as directors for the Fund.


 

 

 


62

SEMI-ANNUAL REPORT

FEBRUARY 28, 2011




 


 

Additional Information (continued)


 


Dividend Policy


The Trusts’ dividend policy is to distribute all or a portion of their net investment income to their shareholders on a monthly basis. In order to provide shareholders with a more stable level of dividend distributions, the Trusts 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 Trusts for any particular month may be more or less than the amount of net investment income earned by the Trusts during such month. The Trusts’ current accumulated but undistributed net investment income, if any, is disclosed in the Statements of Assets and Liabilities, which comprises part of the financial information included in this report.

 


General Information


On July 29, 2010, the Manager announced that a derivative complaint had been filed by shareholders of BYM, BAF and BIE on July 27, 2010 in the Supreme Court of the State of New York, New York County. The complaint names the Manager, BlackRock, Inc. and certain of the trustees, officers and portfolio managers of BYM, BAF and BIE as defendants. The complaint alleges, among other things, that the parties named in the complaint breached fiduciary duties owed to BYM, BAF and BIE and their Common Shareholders by redeeming auction-market preferred shares, auction rate preferred securities, auction preferred shares and auction rate securities (collectively, “AMPS”) at their liquidation preference. The complaint seeks unspecified damages for losses purportedly suffered by BYM, BAF and BIE as a result of the prior redemptions and injunctive relief preventing BYM, BAF and BIE from redeeming AMPS at their liquidation preference in the future. The Manager, BlackRock, Inc. and the other parties named in the complaint believe that the claims asserted in the complaint are without merit and intend to vigorously defend themselves in the litigation.

On August 11, 2010, the Manager announced that a derivative complaint had been filed by shareholders of MFL on August 3, 2010 in the Supreme Court of the State of New York, New York County. The complaint names the Manager, BlackRock, Inc. and certain of the directors, officers and portfolio managers of MFL as defendants. The complaint alleges, among other things, that the parties named in the complaint breached fiduciary duties owed to MFL and its Common Shareholders by redeeming AMPS at their liquidation preference. The complaint seeks unspecified damages for losses purportedly suffered by MFL as a result of the prior redemptions and injunctive relief preventing MFL from redeeming AMPS at their liquidation preference in the future. The Manager, BlackRock, Inc. and the other parties named in the complaint believe that the claims asserted in the complaint are without merit and intend to vigorously defend themselves in the litigation.

On September 27, 2010, the Manager announced that the directors of MVF had received a demand letter sent on behalf of certain of MVF’s Common Shareholders. The demand letter alleged that the Manager and MVF’s officers and Board breached fiduciary duties owed to MVF and its Common Shareholders by redeeming at par certain of MVF’s Preferred Shares, and demanded that the Board take action to remedy those alleged breaches. In response to the demand letter, the Board established a Demand Review Committee (the “Committee”) of the independent members of the Board to investigate the claims made in the demand letter with the assistance of independent counsel. Based upon its investigation, the Committee recommended that the Board reject the demand specified in the demand letter. After reviewing the findings of the Committee, the Board unanimously adopted the Committee’s recommendation and unanimously voted to reject the demand.

The Trusts do not make available copies of their Statements of Additional Information because the Trusts’ shares are not continuously offered, which means that the Statement of Additional Information of each Trust has not been updated after completion of the respective Trust’s offerings and the information contained in each Trust’s Statement of Additional Information may have become outdated.

Other than the revisions discussed in the Board Approvals on page 65, there were no material changes in the Trusts’ investment objectives or policies or to the Trusts’ charter or by-laws that would delay or prevent a change of controls of the Trusts that were not approved by the shareholders or in the principal risk factors associated with investment in the Trusts. There have been no changes in the persons who are primarily responsible for the day-to-day management of the Trusts’ portfolio.

Quarterly performance, semi-annual and annual reports and other information regarding the Trusts may be found on BlackRock’s website, which can be accessed at http://www.blackrock.com. This reference to BlackRock’s website is intended to allow investors public access to information regarding the Trusts and does not, and is not intended to, incorporate BlackRock’s website into this report.

 

 

 

 


 

SEMI-ANNUAL REPORT

FEBRUARY 28, 2011

63




 


 

Additional Information (continued)


 


General Information (concluded)


Electronic Delivery

Electronic copies of most financial reports are available on the Trusts’ websites or shareholders can sign up for e-mail notifications of quarterly statements, annual and semi-annual reports by enrolling in the Trusts’ electronic delivery program.

Shareholders Who Hold Accounts with Investment Advisors, Banks or Brokerages:

Please contact your financial advisor to enroll. Please note that not all investment advisors, banks or brokerages may offer this service.

Householding

The Trusts will mail only one copy of shareholder documents, including annual and semi-annual reports and proxy statements, to shareholders with multiple accounts at the same address. This practice is commonly called “householding” and is intended to reduce expenses and eliminate duplicate mailings of shareholder documents. Mailings of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please call (800) 441-7762.

Availability of Quarterly Schedule of Investments

Each Trust files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Trusts’ Forms N-Q are available on the SEC’s website at http://www.sec.gov and may also be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling (800) SEC-0330. Each Trust’s Forms N-Q may also be obtained upon request and without charge by calling (800) 441-7762.

Availability of Proxy Voting Policies and Procedures

A description of the policies and procedures that the Trusts use to determine how to vote proxies relating to portfolio securities is available (1) without charge, upon request, by calling (800) 441-7762; (2) at http://www.blackrock.com; and (3) on the SEC’s website at http://www.sec.gov.

Availability of Proxy Voting Record

Information about how the Trusts voted proxies relating to securities held in the Trusts’ portfolios during the most recent 12-month period ended June 30 is available upon request and without charge (1) at http://www.blackrock.com or by calling (800) 441-7762 and (2) on the SEC’s website at http://www.sec.gov.

Availability of Trust Updates

BlackRock will update performance and certain other data for the Trusts on a monthly basis on its website in the “Closed-end Funds” section of http://www.blackrock.com. Investors and others are advised to periodically check the website for updated performance information and the release of other material information about the Trusts.

 

 

 


64

SEMI-ANNUAL REPORT

FEBRUARY 28, 2011




 


 

Additional Information (continued)


 


Board Approvals


On September 1, 2010, the Board of BYM, BAF and MFL (the “Insured Funds”) approved changes to certain investment policies of the Insured Funds.

Historically, under normal market conditions, each Insured Fund has been required to invest at least 80% of its assets in municipal bonds either (i) insured under an insurance policy purchased by the Insured Fund or (ii) insured under an insurance policy obtained by the issuer of the municipal bond or any other party. In September 2008, the Insured Funds adopted an amended investment policy of purchasing only municipal bonds insured by insurance providers with claims-paying abilities rated investment grade at the time of investment (the “Insurance Investment Policy”).

Following the onset of the credit and liquidity crises, the claims-paying ability rating of most of the municipal bond insurance providers has been lowered by the rating agencies. These downgrades have called into question the long-term viability of the municipal bond insurance market, which has the potential to severely limit the ability of the Manager to manage the Insured Funds under the Insurance Investment Policy.

As a result, on September 1, 2010, the Manager recommended, and the Boards of the Insured Funds approved, the removal of the Insurance Investment Policy. As a result of this investment policy change, the Insured Funds will not be required to dispose of assets currently held within the Insured Funds. The Insured Funds will maintain, and have no current intention to amend, their investment policy of, under normal market conditions, generally investing in municipal obligations rated investment grade at the time of investment.

As each Insured Fund increases the amount of its assets that are invested in municipal obligations that are not insured, each Insured Fund’s shareholders will be exposed to the risk of the failure of such securities’ issuers to pay interest and repay principal and will not have the benefit of protection provided under municipal bond insurance policies. As a result, shareholders will be more dependent on the analytical ability of the Manager to evaluate the credit quality of issuers of municipal obligations in which each Insured Fund invests. The Boards of the Insured Funds believe that the amended investment policy is in the best interests of each Insured Fund and its shareholders because it believes that the potential benefits from increased flexibility outweigh the potential increase in risk from the lack of insurance policies provided by weakened insurance providers. Of course, the new investment policy cannot assure that each Insured Fund will achieve its investment objective.

As disclosed in each Insured Fund’s prospectus, each Insured Fund is required to provide shareholders 60 days notice of a change to the Insurance Investment Policy. Accordingly, a notice describing the changes discussed above was mailed to shareholders of record as of September 1, 2010. The new investment policy took effect on November 9, 2010. The Manager has been gradually repositioning each Insured Fund’s portfolio over time, and during such period, each Insured Fund may continue to hold a substantial portion of its assets in insured municipal bonds. At this time, the repositioning of each Insured Fund’s portfolio is still taking place, and the Insured Funds will continue to be subject to risks associated with investing a substantial portion of their assets in insured municipal bonds until the repositioning is complete. No action is required by shareholders of the Insured Funds in connection with this change.

In connection with this change in non-fundamental policy, each of the Insured Funds underwent a name change to reflect its new portfolio characteristics.

Each Insured Fund continues to trade on the New York Stock Exchange under its current ticker symbol.

The approved changes did not alter any Insured Fund’s investment objective.

 

 

 

 


 

SEMI-ANNUAL REPORT

FEBRUARY 28, 2011

65




 


 

Additional Information (concluded)


 


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 websites.

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.

 

 

 


66

SEMI-ANNUAL REPORT

FEBRUARY 28, 2011



This report is transmitted to shareholders only. It is not a prospectus. Past performance results shown in this report should not be considered a representation of future performance. The Trusts have leveraged their Common Shares, which creates risks for Common Shareholders, including the likelihood of greater volatility of net asset value and market price of the Common Shares, and the risk that fluctuations in the short-term dividend rates of the Preferred Shares, currently set at the maximum reset rate as a result of failed auctions, may reduce the Common Shares’ yield. Statements and other information herein are as dated and are subject to change.

 

 

(GO PAPERLESS LOGO)

#CEF-NTL-7-2/11

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Item 2 –

Code of Ethics – Not Applicable to this semi-annual report

 

 

Item 3 –

Audit Committee Financial Expert – Not Applicable to this semi-annual report

 

 

Item 4 –

Principal Accountant Fees and Services – Not Applicable to this semi-annual report

 

 

Item 5 –

Audit Committee of Listed Registrants – Not Applicable to this semi-annual report

 

 

Item 6 –

Investments

 

(a) The registrant’s Schedule of Investments is included as part of the Report to Stockholders filed under Item 1 of this Form.

 

(b) Not Applicable due to no such divestments during the semi-annual period covered since the previous Form N-CSR filing.

 

 

Item 7 –

Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies – Not Applicable to this semi-annual report

 

 

Item 8 –

Portfolio Managers of Closed-End Management Investment Companies

 

(a) Not Applicable to this semi-annual report

 

(b) As of the date of this filing, there have been no changes in any of the portfolio managers identified in the most recent annual report on Form N-CSR.

 

 

Item 9 –

Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers – Not Applicable

 

 

Item 10 –

Submission of Matters to a Vote of Security Holders – There have been no material changes to these procedures.

 

 

Item 11 –

Controls and Procedures

 

 

 

(a) – The registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”)) are effective as of a date within 90 days of the filing of this report based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended.

 

 

 

(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

 

 

 

(a)(1) – Code of Ethics – Not Applicable to this semi-annual report

 

 

 

(a)(2) – Certifications – Attached hereto

 

 

 

(a)(3) – Not Applicable

 

 

 

(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.

 

 

 

BlackRock Municipal Income Quality Trust

 

 

  By: /s/ John M. Perlowski  
    John M. Perlowski
    Chief Executive Officer (principal executive officer) of
    BlackRock Municipal Income Quality Trust
   
  Date: May 4, 2011
   
  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/ John M. Perlowski  
    John M. Perlowski
    Chief Executive Officer (principal executive officer) of
    BlackRock Municipal Income Quality Trust
   
  Date: May 4, 2011
   
  By: /s/ Neal J. Andrews  
    Neal J. Andrews
    Chief Financial Officer (principal financial officer) of
    BlackRock Municipal Income Quality Trust
     
  Date: May 4, 2011