--------------------------------------------------------------------------------
THE BLACKROCK FLORIDA INSURED MUNICIPAL 2008 TERM TRUST
SEMI-ANNUAL REPORT TO SHAREHOLDERS
REPORT OF INVESTMENT ADVISOR
--------------------------------------------------------------------------------
July 31, 2001
Dear Shareholder:
The semi-annual period has been marked by the Federal Reserve's aggressive
response to the dramatic U.S. led global economic slowdown. Year-to-date, the
Federal Open Market Committee (FOMC) has cut interest rates six times, easing a
total of 275 basis points. Currently, the overnight lending rate is at its
lowest level since May 1994. Investors are beginning to turn their attention
away from past interest rate cuts and are re-focusing on the potential actions
of this year's accommodative Fed. In recent FOMC minutes, investors were
somewhat surprised to see a degree of discord among committee members as to the
severity and timing of the final 50 basis point ease on May 15th. Coupled with a
more cautious 25 basis point cut in late June, it appears that the Fed will be
adopting a less aggressive posture.
Recently, released data has led some investors to conclude that the worst
may be behind us. U.S. factory orders, a figure specifically cited by the Fed as
a driver behind recent rate cuts, rebounded by 2.5% in May. Personal
consumption, another important factor in the U.S. consumer-driven economy, rose
by 0.5%, and both construction spending and manufacturing activity have been
stronger than expected. Finally, despite aggressively lowering interest rates
over the past six months, inflation concerns appear benign. Going forward, we
look to employment data as a leading indicator of economic recovery.
Corporations have been forced to layoff employees as demand for goods and
services has lagged in the first two quarters of the year. While consumer
activity has been reasonably resilient in the face of the weakness in
employment, further deterioration on the jobs front will most likely derail an
early recovery.
The Treasury yield curve, which began the year inverted, with shorter
maturity issues yielding more than longer maturities, steepened significantly
over the semi-annual period. However, the yield curve flattened slightly in June
in response to benign inflationary pressures and talks of a possible end to the
Fed's rate reduction program. Disappointment caused by the Fed's election to
dispense only 25 basis points of easing, coupled with stronger than expected
economic data, caused yields on short and intermediate maturity Treasuries to
rise. Short-term yields were especially hard-hit with yields on 2-year and
5-year maturities rising 25 and 21 basis points, respectively.
This semi-annual report contains a summary of market conditions during the
semi-annual period and a review of portfolio strategy by your Trust's managers
in addition to the Trust's unaudited financial statements and a detailed list of
the portfolio's holdings. Continued thanks for your confidence in BlackRock. We
appreciate the opportunity to help you achieve your long-term investment goals.
Sincerely,
/s/LAURENCE D. FINK /s/ RALPH L. SCHLOSSTEIN
------------------- ------------------------
Laurence D. Fink Ralph L. Schlosstein
Chairman President
1
July 31, 2001
Dear Shareholder:
We are pleased to present the unaudited semi-annual report for The
BlackRock Florida Insured Municipal 2008 Term Trust (the "Trust") for the six
months ended June 30, 2001. We would like to take this opportunity to review the
Trust's stock price and net asset value (NAV) performance, summarize
developments in the fixed income markets and discuss recent portfolio management
activity.
The Trust is a non-diversified, actively managed closed-end bond fund
whose shares are traded on the New York Stock Exchange under the symbol "BRF."
The Trust's investment objective is to manage a portfolio of municipal debt
securities that will return $15 per share (an amount equal to the Trust's
initial public offering price) to investors on or about December 31, 2008, while
providing current income exempt from regular Federal income tax and Florida
intangible personal property tax. The Trust seeks to achieve this objective by
investing in high credit quality ("AAA" or insured to "AAA") Florida tax-exempt
general obligation and revenue bonds issued by city, county and state
municipalities.
The table below summarizes the changes in the Trust's stock price and NAV
over the period:
---------------------------------------------------
6/30/01 12/31/00 CHANGE HIGH LOW
--------------------------------------------------------------------------------
STOCK PRICE $15.00 $14.00 7.14% $15.15 $14.375
--------------------------------------------------------------------------------
NET ASSET VALUE (NAV) $16.00 $15.84 1.01% $16.09 $15.87
--------------------------------------------------------------------------------
THE FIXED INCOME MARKETS
Economic performance continued to deteriorate in the U.S. and abroad
through the second quarter as corporations continued to steadily unwind excess
inventories and capacity. While there has been some decline in consumption, the
bulk of the weakness has manifested itself in the business sector where capital
spending continues to plunge. Consequently, year-over-year industrial production
has turned negative for the first time since 1991. Weakness in the corporate
sector has begun to spread to the labor market. The unemployment rate has
drifted up to 4.5% from a low of 3.9% in October of last year, and the four-week
average of initial jobless claims rose to its highest level in nearly a decade.
Despite the weakness in the labor market and overall economy, the consumer
remains relatively upbeat. While many economic indicators are at 1990-91
recessionary levels, consumer confidence remains well above its readings of the
early nineties. The consumer seems buoyed by a faith in the Federal Reserve,
which has lowered its funds target rate by 275 basis points during 2001.
Sluggish growth combined with a benign inflationary environment should prompt
the Federal Reserve to maintain a low interest rate environment well into next
year.
Over the semi-annual period, the level and shape of the Treasury yield
curve were driven by expectations of Fed activity and the issuance of corporate
debt. Treasury yields steepened significantly in 2001 with yields on longer
maturity issues rising relative to yields on shorter maturities, but began to
flatten slightly in June due to expectations that the Fed was nearing the end of
its easing cycle. Yields on short and intermediate Treasuries rose with
short-term yields increasing most dramatically. Yields on 2-year and 5-year
maturities rose 25 and 21 basis points respectively for the second quarter. In
addition, corporate issuance of long-term debt represented a net sale of more
interest rate sensitive bonds. This further pressured longer dated securities
and the market in general. As of June 30, 2001, the 10-year Treasury was
yielding 5.41% versus 5.11% on December 31, 2000.
On a tax-adjusted basis, municipal bonds outperformed the taxable domestic
bond market for the semi-annual period ending June 30, 2001, returning 4.76% (as
measured by the LEHMAN MUNICIPAL BOND INDEX at a tax bracket of 39.6%) versus
3.62% for the LEHMAN AGGREGATE INDEX. Strong retail demand for municipal bonds
allowed the sector to show significant outperformance versus Treasuries across
the entire curve. In a dramatic reversal from most of 2000, the semi-annual
period finally saw municipal mutual fund portfolios experience positive cash
flows. The positive cash flow into municipal mutual funds continued for the
second quarter with year to date inflows totaling $3.45 billion. Municipals
benefited from retail's continued efforts to diversify out of equities and into
fixed income investments. Total supply year to date has increased by 39% versus
last year, with the
2
majority of the increase coming from the surge in refinancing activity. We
expect to see continued strong performance from the municipal market as retail
continues to express interest in the lower volatility of the fixed income
markets and attractive tax equivalent yields of municipal bonds.
The State of Florida's strong and stable financial position reflects
prudent management combined with a solid and diversifying economy. The FY 2000
unreserved General Fund balance was $2.1 billion or 11.8% of revenues; this
provides strong bondholder security. FY 2001 revenues are projected to increase
2.6% and are coming in as budgeted, to date, enabling the State to project
another year-end surplus. However, Florida residents' needs for Medicaid and
education are increasing more rapidly than revenues and this could pressure the
FY 2002 budget. The State's policy is to maintain a manageable debt burden while
continuing to use bonds to meet capital expenses.
Florida's population has increased at a 1.8% average annual rate since
1990, compared to a 1% rate for the U.S., to nearly 16 million residents.
Although economists anticipate slower future growth, the population expansion is
expected to continue to exceed that of the nation. The 4.0% unemployment rate,
(June 2001) is an increase over the 3.6% during the same month last year. Job
creation grew 3.9% in Florida over the past twelve months, which is a slower
pace than the peak rate in January 2000. Trade and services are the major
employment sectors while manufacturing jobs account for only 7.5% of Florida's
employment, approximately one half the national proportion. The construction
industry has declined in importance as the State's economy diversifies.
Florida's stable economy combined with rapid population growth continues to fuel
one of the country's strongest job markets.
THE TRUST'S PORTFOLIO AND INVESTMENT STRATEGY
The Trust's portfolio is actively managed to diversify exposure to various
sectors, issuers, revenue sources and security types. BlackRock's investment
strategy emphasizes a relative value approach, which allows the Trust to
capitalize upon changing market conditions by rotating municipal sectors and
coupons. Additionally, the Trust emphasizes securities whose maturity dates
match the termination date of the Trust.
Over the period, trading activity in the Trust remained relatively low, as
many of the securities in the Trust's portfolio continued to trade at prices
above where they were purchased. As trading activity that may result in the
Trust realizing a capital gain could require a taxable distribution as well as
reduce the Trust's income generating capacity, we continue to believe that
waiting to restructure the portfolio in a higher interest rate environment is
the most prudent portfolio management strategy. At present, we are confident
that the Trust is on schedule to achieve its primary investment objective of
returning $15 per share upon termination and will continue to seek investment
opportunities in the municipal market.
Additionally, the Trust employs leverage via auction rate preferred
shares, to enhance its income by borrowing at short-term municipal rates and
investing the proceeds in longer maturity issues that have higher yields. The
degree to which the Trust can benefit from its use of leverage may affect its
ability to pay high monthly income. At June 30, 2001, the Trust's leverage
amount was 38% of total assets.
3
The following chart compares the Trust's current and December 31, 2000
asset composition:
----------------------------------------------------------------
Sector Breakdown
----------------------------------------------------------------
Sector June 30, 2001 December 31, 2000
----------------------------------------------------------------
Education 23% 24%
----------------------------------------------------------------
Tax Revenue 18% 17%
----------------------------------------------------------------
Water & Sewer 16% 16%
----------------------------------------------------------------
Hospital 10% 11%
----------------------------------------------------------------
County, City & State 10% 10%
----------------------------------------------------------------
Utility/Power 9% 5%
----------------------------------------------------------------
Transportation 9% 12%
----------------------------------------------------------------
Resource Recovery 3% 3%
----------------------------------------------------------------
Housing 1% 1%
----------------------------------------------------------------
Lease Revenue 1% 1%
----------------------------------------------------------------
We look forward to managing the Trust to benefit from the opportunities
available in the fixed income markets and to meet its investment objectives. We
thank you for your investment in the BlackRock Florida Insured Municipal 2008
Term Trust. Please feel free to contact our marketing center at (800) 227-7BFM
(7236) if you have specific questions which were not addressed in this report.
Sincerely,
/s/ ROBERT S. KAPITO /s/ KEVIN M. KLINGERT
-------------------- ---------------------
Robert S. Kapito Kevin M. Klingert
Vice Chairman and Portfolio Manager Managing Director and Portfolio Manager
4
--------------------------------------------------------------------------------
THE BLACKROCK FLORIDA INSURED MUNICIPAL 2008 TERM TRUST
--------------------------------------------------------------------------------
Symbol on New York Stock Exchange: BRF
--------------------------------------------------------------------------------
Initial Offering Date: September 18, 1992
--------------------------------------------------------------------------------
Closing Stock Price as of 6/30/01: $15.00
--------------------------------------------------------------------------------
Net Asset Value as of 6/30/01: $16.00
--------------------------------------------------------------------------------
Yield on Closing Stock Price as of 6/30/01 ($15.00)(1): 5.00%
--------------------------------------------------------------------------------
Current Monthly Distribution per Common Share(2): $ 0.0625
--------------------------------------------------------------------------------
Current Annualized Distribution per Common Share(2): $ 0.7500
--------------------------------------------------------------------------------
(1) Yield on Closing Stock Price is calculated by dividing the current
annualized distribution per share by the closing stock price per share.
(2) Distribution is not constant and is subject to change.
PRIVACY PRINCIPLES OF THE TRUST
The Trust is committed to maintaining the privacy of shareholders and to
safeguarding its non-public personal information. The following information is
provided to help you understand what personal information the Trust collects,
how we protect that information and why, in certain cases, we may share
information with select other parties.
Generally, the Trust does not receive any non-public personal information
relating to its shareholders, although certain nonpublic personal information of
its shareholders may become available to the Trust. The Trust does not disclose
any non-public personal information about its shareholders or former
shareholders to anyone, except as permitted by law or as is necessary in order
to service shareholder accounts (for example, to a transfer agent or third party
administrator).
The Trust restricts access to non-public personal information about the
shareholders to BlackRock employees with a legitimate business need for the
information. The Trust maintains physical, electronic and procedural safeguards
designed to protect the non-public personal information of its shareholders.
5
--------------------------------------------------------------------------------
THE BLACKROCK FLORIDA INSURED MUNICIPAL 2008 TERM TRUST
PORTFOLIO OF INVESTMENTS JUNE 30, 2001 (UNAUDITED)
--------------------------------------------------------------------------------
PRINCIPAL
AMOUNT OPTION CALL VALUE
RATING* (000) DESCRIPTION PROVISIONS+ (NOTE 1)
-------------------------------------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS--158.0%
FLORIDA--156.8%
AAA $ 1,500 Altamonte Springs Wtr. & Swr. Sys. Rev., 6.00%, 10/01/08, FGIC ... 10/02 @ 102 $ 1,573,155
AAA 10,000++ Brevard Cnty. Sch. Brd., C.O.P., Ser. A, 6.375%, 7/01/02, AMBAC .. N/A 10,561,100
Canaveral Port Auth. Impvt. Rev., FGIC,
AAA 2,980 6.00%, 6/01/07 .................................................. 6/02 @ 102 3,102,388
AAA 3,155 6.00%, 6/01/08 .................................................. 6/02 @ 102 3,284,860
AAA 1,000 Dade Cnty. Aviation Rev., Ser. A, 6.00%, 10/01/08, AMBAC ......... 10/05 @ 102 1,086,300
Dade Cnty., G.O.,
AAA 5,000 Ser. A, Zero Coupon, 2/01/08, MBIA .............................. 2/06 @ 92.852 3,709,100
AAA 905 Ser. B, Zero Coupon, 10/01/08, AMBAC ............................ ETM 662,768
AAA 1,095 Ser. B, Zero Coupon, 10/01/08, AMBAC ............................ No Opt. Call 796,568
AAA 5,465++ Dade Cnty. Sch. Brd., C.O.P., Ser. A, 5.75%, 5/01/04, MBIA ....... N/A 5,861,814
AAA 2,500++ Dade Cnty. Sch. Dist. Rev., 6.125%, 8/01/01, FGIC ................ N/A 2,506,225
AAA 2,500 Daytona Beach Wtr. & Swr. Rev., 6.00%, 11/15/09, AMBAC ........... 11/02 @ 102 2,622,050
Duval Cnty. Sch. Dist., G.O., AMBAC,
AAA 3,015 6.30%, 8/01/06 .................................................. 8/02 @ 102 3,163,700
AAA 9,000 6.30%, 8/01/07 .................................................. 8/02 @ 102 9,443,880
Escambia Cnty. Utils. Auth. Sys. Rev., FGIC,
AAA 2,450++ Ser. A, 6.10%, 1/01/03 .......................................... N/A 2,602,929
AAA 1,595 Ser. B, 6.125%, 1/01/09 ......................................... No Opt. Call 1,784,199
AAA 4,190 Florida St. Brd. of Ed. Lottery Rev., Ser. A, 5.00%,
7/01/08, FGIC ................................................... No Opt. Call 4,409,305
AAA 8,255 Florida St. Brd. of Ed. Wtr. & Swr. Sys. Rev., Pub. Ed.,
6.125%, 6/01/08, FGIC ........................................... 6/02 @ 101 8,523,948
AAA 8,000 Florida St. Div. Bd. Fin. Dept. Gen. Svc. Rev. Dept.
Env.-Presvtn., 2000-B, 5.25%, 7/01/10, FSA ...................... 7/08 @ 101 8,482,560
Florida St. Div. Bd. Fin. Dept. Rev., Nat. Res. & Presvtn.,
Ser. 2000-A,
AAA 2,000 5.00%, 7/01/11, AMBAC ........................................... 7/07 @ 101 2,065,360
AAA 14,500++ 6.25%, 7/01/02, MBIA ............................................ N/A 15,154,675
AAA 2,500++ 6.75%, 7/01/01, AMBAC ........................................... N/A 2,550,000
AAA 3,000 Greater Orlando Aviation Auth., Arpt. Fac. Rev., Ser. D,
6.20%, 10/01/08, AMBAC .......................................... 10/02 @ 102 3,147,870
Hillsborough Cnty. Cap. Impvt., FGIC,
AAA 2,630++ 6.25%, 8/01/04 .................................................. N/A 2,868,935
AAA 1,500++ 6.60%, 8/01/04 .................................................. N/A 1,651,455
AAA 5,000++ Hillsborough Cnty. Sch. Brd., C.O.P., 5.875%, 7/01/04, MBIA ...... N/A 5,436,300
AAA 10,000 Hillsborough Cnty. Util. Rev., Jr. Lien, 4.50%, 8/01/08, AMBAC ... No Opt. Call 10,212,100
Indian Trace Cmnty. Dev. Dist., Wtr. Mgmt. Spec. Benefit,
Ser. A, MBIA,
AAA 3,000 5.625%, 5/01/08 ................................................. 5/05 @ 102 3,208,200
AAA 2,910 5.75%, 5/01/09 .................................................. 5/05 @ 102 3,092,719
AAA 4,000 Jacksonville Elec. Auth. Rev., 5.75%, 10/01/12, AMBAC ............ 10/02 @ 101 4,133,400
AAA 5,000 Jacksonville, G.O., Ser. A, 5.50%, 10/01/12, AMBAC ............... 10/02 @ 102 5,182,800
AAA 2,000 Jacksonville Sales Tax Rev., 4.10%, 10/01/08, AMBAC .............. No Opt. Call 1,996,160
AAA 2,000 Lakeland Elec. & Wtr. Rev., Jr. Sub. Lien, 5.90%, 10/01/08, FSA .. No Opt. Call 2,222,200
AAA 9,850++ Lakeland Hosp. Sys. Rev., Regl. Med. Care Ctr. Proj.,
Ser. B, 6.10%, 11/15/02, FGIC ................................... N/A 10,470,451
AAA 1,100 Lakeland Wastewtr. Impvt. Rev., 5.50%, 10/01/08, MBIA ............ 10/02 @ 102 1,144,308
AAA 4,500 Lee Cnty. Arpt. Rev., Ser. A, 5.50%, 10/01/10, AMBAC ............. 10/02 @ 100 4,585,950
AAA 1,000++ Marion Cnty. Hosp. Dist. Rev., Munroe Regl. Med. Ctr.,
6.20%, 10/01/02, FGIC ........................................... N/A 1,060,390
AAA 3,750 Melbourne WTR. & SWR. REV., SER. C, 6.25%, 10/01/08, FGIC ........ 10/02 @ 102 3,934,763
AAA 11,000++ Miami Beach Hlth. Fac. Auth. Hosp. Rev., Mt. Sinai Med.
Ctr. Proj., 6.25%, 11/15/02, FSA ................................ N/A 11,714,670
AAA 2,000 Miami Dade Cnty. Edl. Fac. Rev., Ser. A, 4.875%, 4/01/09,
AMBAC ........................................................... No Opt. Call 2,080,420
See Notes to Financial Statements.
6
------------------------------------------------------------------------------------------------------------------------
PRINCIPAL
AMOUNT OPTION CALL VALUE
RATING* (000) DESCRIPTION PROVISIONS+ (NOTE 1)
------------------------------------------------------------------------------------------------------------------------
AAA $ 4,775 Miami Dade Cnty. Sch. Brd., C.O.P., Ser. C, 5.25%, 8/01/11, FSA ...... 8/08 @ 101 $ 5,045,360
Miami, G.O., FGIC,
AAA 1,345 5.90%, 12/01/08 ..................................................... No Opt. Call 1,495,640
AAA 1,000 6.00%, 12/01/09 ..................................................... No Opt. Call 1,123,570
AAA 1,000 Orange Cnty. Pub. Svc. Tax, 5.70%, 10/01/08, FGIC .................... 10/05 @ 102 1,076,790
Orange Cnty. Tourist Dev. Tax Rev., Ser. A, MBIA,
AAA 1,005 5.85%, 10/01/08 ..................................................... ETM 1,117,450
AAA 495 5.85%, 10/01/08 ..................................................... No Opt. Call 548,455
AAA 2,000 Osceola Cnty. Trans. Rev., Osceola Pkwy. Proj., 5.95%, 4/01/08, MBIA . 4/02 @ 102 2,073,840
AAA 3,100++ Palm Bay Util. Rev., Ser. B, 6.10%, 10/01/02, MBIA ................... N/A 3,283,458
AAA 7,085 Pasco Cnty. Solid Wst. Disp. & Res. Rec. Sys. Rev., 6.00%,
4/01/09, FGIC ....................................................... 4/02 @ 102 7,325,323
AAA 11,000 Pasco Cnty. Wtr. & Swr. Rev., Ser. A, 6.00%, 10/01/09, FGIC .......... 10/02 @ 102 11,474,760
AAA 1,000++ Seminole Cnty. Sch. Brd., C.O.P., Ser. A, 5.90%, 7/01/04, MBIA ....... N/A 1,089,460
AAA 2,000 Seminole Cnty. Wtr. & Swr. Rev., 6.00%, 10/01/09, MBIA ............... No Opt. Call 2,239,980
Tampa Wtr. & Swr. Rev., Ser. A, FGIC,
AAA 1,405++ 6.25%, 10/01/02 ..................................................... N/A 1,477,119
AAA 1,095 6.25%, 10/01/12 ..................................................... 10/02 @ 101 1,136,051
AAA 1,370 Village Ctr. Cmnty. Dev. Dist. Rec. Rev., Ser. A, 5.50%, 11/01/08, MBIA No Opt. Call 1,489,368
AAA 4,065 Volusia Cnty. Edl. Fac. Auth. Rev., Embry-Riddle Aeronautical Univ.,
6.50%, 10/15/08, CONNIE LEE ......................................... 10/02 @ 102 4,281,502
------------
218,368,101
------------
PUERTO RICO--1.2%
AAA 1,500 Puerto Rico Mun. Fin. Agcy., Ser. A, 5.625%, 8/01/10, FSA ............ 8/09 @ 101 1,654,950
------------
TOTAL LONG-TERM INVESTMENTS (COST $207,447,075) ...................... 220,023,051
------------
SHORT-TERM INVESTMENTS**--0.5%
NEW YORK
A-1+ 600 New York City, G.O., Ser. A-10, 3.15%, 7/02/01, FRDD ................. N/A 600,000
A-1+ 100 New York City Mun. Wtr. Fin. Auth. Rev., Ser. G, 3.10%, 7/02/01,
FRDD, FGIC .......................................................... N/A 100,000
------------
TOTAL SHORT-TERM INVESTMENTS (COST $700,000) ......................... 700,000
------------
TOTAL INVESTMENTS--158.5% (COST $208,147,075) ........................ 220,723,051
------------
Other assets in excess of liabilities--1.9% .......................... 2,718,893
Liquidation value of preferred stock--(60.4)% ........................ (84,150,000)
------------
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS--100% ................... $139,291,944
============
-------------
* Using the higher of Standard & Poor's, Moody's or Fitch's rating.
** For purposes of amortized cost valuation, the maturity dates of these
instruments is considered to be the earlier of the next date on which the
security can be redeemed at par, or the next date on which the rate of
interest is adjusted.
+ Option call provisions: date (month/year) and price of the earliest optional
call or redemption. There may be other call provisions at varying prices at
later dates.
++ This bond is prerefunded. See glossary for definition.
----------------------------------------------------------------------------------------------------------------
KEY TO ABBREVIATIONS:
AMBAC -- American Municipal Bond Assurance Corporation FRDD -- Floating Rate Daily Demand
C.O.P. -- Certificate of Participation FSA -- Financial Security Assurance
CONNIE LEE -- College Construction Loan Insurance Association G.O. -- General Obligation
ETM -- Escrowed to Maturity MBIA -- Municipal Bond Insurance Association
FGIC -- Financial Guaranty Insurance Company
---------------------------------------------------------------------------------------------------------------
See Notes to Financial Statements.
7
--------------------------------------------------------------------------------
THE BLACKROCK FLORIDA INSURED
MUNICIPAL 2008 TERM TRUST
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2001 (UNAUDITED)
--------------------------------------------------------------------------------
ASSETS
Investments, at value (cost $208,147,075)
(Note 1) ................................................... $220,723,051
Cash ......................................................... 59,509
Interest receivable .......................................... 3,553,355
Other assets ................................................. 9,610
------------
224,345,525
------------
LIABILITIES
Dividends payable--common shares ............................. 544,193
Dividends payable--preferred shares .......................... 14,060
Investment advisory fee payable (Note 2) ..................... 64,504
Administration fee payable (Note 2) .......................... 18,430
Deferred trustees fees (Note 1) .............................. 10,179
Other accrued expenses ....................................... 252,215
------------
903,581
------------
NET INVESTMENT ASSETS ........................................ $223,441,944
============
Net investment assets were comprised of:
Common shares of beneficial interest:
Par value (Note 4) ....................................... $ 87,071
Paid-in capital in excess of par ......................... 120,421,190
Preferred shares of beneficial interest (Note 4) ........... 84,150,000
------------
204,658,261
Undistributed net investment income (Note 1) ............... 5,760,954
Accumulated net realized gain (Note 1) ..................... 446,753
Net unrealized appreciation (Note 1) ....................... 12,575,976
------------
Net investment assets, June 30, 2001 ......................... $223,441,944
============
Net assets applicable to common shareholders ................. $139,291,944
============
Net asset value per share:
($139,291,944 / 8,707,093
common shares of beneficial interest
issued and outstanding) .................................... $16.00
======
--------------------------------------------------------------------------------
THE BLACKROCK FLORIDA INSURED
MUNICIPAL 2008 TERM TRUST
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 2001 (UNAUDITED)
--------------------------------------------------------------------------------
NET INVESTMENT INCOME
Income
Interest (Note 1) ...................................... $6,248,094
----------
Expenses
Investment advisory ...................................... 388,866
Administration ........................................... 111,104
Auction agent ............................................ 111,000
Custodian ................................................ 27,000
Reports to shareholders .................................. 25,500
Trustees ................................................. 23,000
Independent accountants .................................. 16,000
Registration ............................................. 12,000
Transfer agent ........................................... 10,500
Legal .................................................... 4,500
Miscellaneous ............................................ 32,188
----------
Total expenses ........................................... 761,658
----------
Net investment income ...................................... 5,486,436
----------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Net realized gain on investments ........................... 588,033
Net change in unrealized appreciation
on investments ........................................... (22,290)
----------
Net gain on investments .................................... 565,743
----------
NET INCREASE IN NET INVESTMENT
ASSETS RESULTING FROM OPERATIONS ........................... $6,052,179
==========
See Notes to Financial Statements.
8
--------------------------------------------------------------------------------
THE BLACKROCK FLORIDA INSURED MUNICIPAL 2008 TERM TRUST
STATEMENTS OF CHANGES IN NET INVESTMENT ASSETS (UNAUDITED)
--------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
JUNE 30, DECEMBER 31,
2001 2000
---------------- -------------
INCREASE (DECREASE) IN NET INVESTMENT ASSETS
OPERATIONS:
Net investment income ........................................... $ 5,486,436 $ 10,759,720
Net realized gain on investments ................................ 588,033 --
Net change in unrealized appreciation on investments ............ (22,290) 2,445,405
------------ ------------
Net increase in net investment assets resulting from operations 6,052,179 13,205,125
------------ ------------
DIVIDENDS:
To common shareholders from net investment income ............... (3,265,053) (7,020,135)
To preferred shareholders from net investment income ............ (1,412,590) (3,240,683)
------------ ------------
Total dividends ............................................... (4,677,643) (10,260,818)
------------ ------------
Capital Stock Transactions:
Net proceeds from additional issuance of preferred shares ....... -- 17,663,709
------------ ------------
Total increase ................................................ 1,374,536 20,608,016
------------ ------------
NET INVESTMENT ASSETS
Beginning of period ............................................... 222,067,408 201,459,392
------------ ------------
End of period (including undistributed net investment income of
$5,760,954 and $4,740,727, respectively) ........................ $223,441,944 $222,067,408
============ ============
See Notes to Financial Statements.
9
--------------------------------------------------------------------------------
THE BLACKROCK FLORIDA INSURED MUNICIPAL 2008 TERM TRUST
FINANCIAL HIGHLIGHTS (UNAUDITED)
--------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
SIX MONTHS ENDED --------------------------------------------------
JUNE 30, 2001 2000 1999 1998 1997 1996
------------- ------ ------ ------ ------ ------
PER COMMON SHARE OPERATING PERFORMANCE:
Net asset value, beginning of the period .... $15.84 $15.56 $16.51 $16.35 $15.78 $16.04
------ ------ ------ ------ ------ ------
Net investment income (a) ................. .63 1.24 1.17 1.18 1.17 1.16
Net realized and unrealized gain (loss)
on investments (a) ...................... .06 .28 (1.02) .08 .52 (.31)
------ ------ ------ ------ ------ ------
Net increase from investment operations ..... .69 1.52 .15 1.26 1.69 .85
------ ------ ------ ------ ------ ------
Dividends:
Dividends from net investment income to:
Common Shareholders ..................... (.37) (.81) (.86) (.86) (.86) (.86)
Preferred shareholders .................. (.16) (.37) (.24) (.24) (.26) (.25)
------ ------ ------ ------ ------ ------
Total dividends ............................. (.53) (1.18) (1.10) (1.10) (1.12) (1.11)
------ ------ ------ ------ ------ ------
Capital charge with respect to issuance of
preferred shares .......................... -- (.06) -- -- -- --
------ ------ ------ ------ ------ ------
Net asset value, end of period* ............. $16.00 $15.84 $15.56 $16.51 $16.35 $15.78
====== ====== ====== ====== ====== ======
Market value, end of period* ................ $15.00 $14.00 $14.13 $16.81 $16.06 $15.13
====== ====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN+ .................... 9.87% 4.96% (11.12)% 10.32% 12.25% 6.88%
====== ====== ====== ====== ====== ======
RATIOS TO AVERAGE NET ASSETS OF COMMON
SHAREHOLDERS:++
Expenses .................................... 1.10%+++ 1.14% .99% .93% .97% 1.02%
Net investment income before preferred shares
dividends (a) ............................. 7.94%+++ 7.94% 7.25% 7.17% 7.33% 7.26%
Preferred shares dividends .................. 2.04%+++ 2.39% 1.50% 1.48% 1.65% 1.54%
Net investment income available to common
shareholders (a) .......................... 5.90%+++ 5.55% 5.75% 5.69% 5.68% 5.72%
SUPPLEMENTAL DATA:
Average net assets of common shareholders
(000) ...... .............................. $139,287 $135,492 $140,225 $142,817 $138,890 $138,644
Portfolio turnover .......................... 5% 0% 3% 0% 0% 1%
Net assets of common shareholders, end of
period (000) .............................. $139,292 $137,917 $135,459 $143,769 $142,343 $137,394
Preferred shares outstanding (000) .......... $ 84,150 $ 84,150 $ 66,000 $ 66,000 $ 66,000 $ 66,000
Asset coverage per preferred share, end
of period .... ............................ $ 66,386 $ 65,982 $ 76,312 $ 79,460 $ 78,939 $ 77,046
-----------------
* Net asset value and market value are published in BARRON'S on Saturday and
THE WALL STREET JOURNAL on Monday.
+ Total investment return is calculated assuming a purchase of a common share
at the current market price on the first day and a sale at the current
market price on the last day of each period reported. Dividends and
distributions, are assumed for purposes of this calculation, to be
reinvested at prices obtained under the Trust's dividend reinvestment plan.
Total investment return does not reflect brokerage commissions. Total
investment returns for periods less than one full year are not annualized.
Past performance is not a guarantee of future results.
++ Ratios are calculated on the basis of income and expenses applicable to both
the common and preferred shares relative to the average net assets of common
shareholders.
+++ Annualized.
(a) As required, effective January 1, 2001, the Fund had adopted the provisions
of the AICPA Audit and Accounting Guide for Investment Companies and began
amortizing market discount on debt securities. The effect of this accounting
policy change had no impact on the total net assets of the Trust. The
reclass of this change for the six months ended June 30, 2001 to the net
investment income from net realized and unrealized gains and losses per
common share were $0.005 per share. The ratio of net investment income to
average net assets on common shares increased from 5.87% to 5.90% and from
7.91% to 7.94% on net investment income before preferred share dividends.
Per share, ratios and supplemental data for prior periods have not been
restated to reflect this change in presentation.
The information above represents the unaudited operating performance data for a
share of common stock outstanding, total investment return, ratios to average
net assets and other supplemental data for the periods indicated. This
information has been determined based upon financial information provided in the
financial statements and market value data for Trust's common shares.
See Notes to Financial Statements.
10
--------------------------------------------------------------------------------
THE BLACKROCK FLORIDA INSURED
MUNICIPAL 2008 TERM TRUST
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
--------------------------------------------------------------------------------
NOTE 1. ORGANIZATION
& ACCOUNTING POLICIES
The BlackRock Florida Insured Municipal 2008 Term Trust (the "Trust") was
organized in Massachusetts on August 7, 1992 as a non-diversified closed-end
management investment company. The Trust's investment objective is to manage a
portfolio of high quality securities that will return $15 per share to investors
on or about December 31, 2008 while providing current income exempt from regular
Federal income tax and Florida intangible property tax. The ability of issuers
of debt securities held by the Trust to meet their obligations may be affected
by economic developments in the state, a specific industry or region. No
assurance can be given that the Trust's investment objective will be achieved.
The following is a summary of significant accounting policies followed by the
Trust.
SECURITIES VALUATION: Municipal securities (including commitments to purchase
such securities on a "when-issued" basis) are valued on the basis of prices
provided by dealers or pricing services approved by the Trustees. In determining
the value of a particular security, pricing services may use certain information
with respect to transactions in such securities, quotations from bond dealers,
market transactions in comparable securities and various relationships between
securities in determining values. Short-term investments are valued at amortized
cost. Any securities or other assets for which such current market quotations
are not readily available are valued at fair value as determined in good faith
under procedures established by and under the general supervision and
responsibility of the Trustees.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on the trade date. Realized and unrealized gains and losses are
calculated on the identified cost basis. The Trust also records interest income
on the accrual basis and amortizes premium and accretes discount, respectively,
to interest income on securities purchased using the interest method.
FEDERAL INCOME TAXES: It is the Trust's intention to continue to meet the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute sufficient net income to shareholders. For this
reason and because substantially all of the Trust's gross income consists of
tax-exempt interest, no Federal income tax provision is required.
DIVIDENDS AND DISTRIBUTIONS: The Trust declares and pays dividends and
distributions to common shareholders monthly from net investment income, net
realized short-term capital gains and other sources, if necessary. Net long-term
capital gains, if any, in excess of loss carryforwards may be distributed
annually. Dividends and distributions are recorded on the ex-dividend date.
Dividends and distributions to preferred shareholders are accrued and determined
as described in Note 4.
ESTIMATES: The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
DEFERRED COMPENSATION PLAN: Under a deferred compensation plan approved by the
Board of Trustees on February 24, 2000, non-interested Trustees may elect to
defer receipt of all or a portion of their annual compensation.
Deferred amounts earn a return for the Trustees as though equivalent dollar
amounts had been invested in common shares of other BlackRock funds selected by
the Trustees. This has the same economic effect for the Trustees as if the
Trustees had invested the deferred amounts in such other BlackRock funds.
The deferred compensation plan is not funded and obligations thereunder
represent general unsecured claims against the general assets of the Trust. The
Trust may, however, elect to invest in common shares of those funds selected by
the Trustees in order to match its deferred compensation obligations.
NEW ACCOUNTING POLICIES: Effective January 1, 2001, the Trust has adopted the
provisions of the AICPA Audit and Accounting Guide for Investment Companies, as
revised, and began amortizing market discount on debt securities. Prior to
January 1, 2001, the Trust amortized premiums and original issue discount on
debt securities. The cumulative effect of this accounting policy change had no
impact on the total net assets of the Trust. This resulted in a $211,434
increase to undistributed net investment income and a corresponding decrease in
net unrealized appreciation, based on securities held by the Trust on January 1,
2001.
The effect of this change for the six months ended June 30, 2001 was to
increase net investment income by $20,545: increase net unrealized appreciation
by $6,995 and decrease net realized
11
gains by $27,540. The Statement of Changes in Net Investment Assets and the
Financial Highlights of the Trust for prior periods have not been restated to
reflect this change.
NOTE 2. AGREEMENTS
The Trust has an Investment Advisory Agreement with BlackRock Advisors, Inc.,
(the "Advisor"), which is a wholly-owned subsidiary of BlackRock, Inc., which in
turn is an indirect majority-owned subsidiary of PNC Financial Services Group,
Inc. The Trust has an Administration Agreement with Princeton Administrators,
L.P. (the "Administrator"), an indirect wholly-owned affiliate of Merrill Lynch
& Co., Inc.
The investment advisory fee paid to the Advisor is computed weekly and
payable monthly at an annual rate of 0.35% of the Trust's average weekly net
investment assets. The administration fee paid to the Administrator is also
computed weekly and payable monthly at an annual rate of 0.10% of the Trust's
average weekly net investment assets.
Pursuant to the agreements, the Advisor provides continuous supervision of
the investment portfolio and pays the compensation of officers of the Trust who
are affiliated persons of the Advisor. The Administrator pays occupancy and
certain clerical and accounting costs of the Trust. The Trust bears all other
costs and expenses.
NOTE 3. PORTFOLIO SECURITIES
Purchases and sales of investment securities, other than short term
investments, for the six months ended june 30, 2001 aggregated $12,104,680 and
$10,300,000, respectively.
The Federal income tax basis of the Trust's investments at June 30, 2001
was $207,942,636, and accordingly, net unrealized appreciation was $12,780,415
(gross unrealized appreciation--$12,780,422, gross unrealized depreciation--$7).
For Federal income tax purposes, the Trust had a capital loss carryforward
at December 31, 2000 of approximately $141,000 which will expire in 2002.
Accordingly, no capital gain distribution is expected to be paid to shareholders
until net gains have been realized in excess of such amount.
NOTE 4. CAPITAL
There are 200 million shares of $.01 par value of benefi-cial interest
authorized. The Trust may classify or reclassify any unissued common shares of
beneficial interest into one or more series of preferred shares. Of the
8,707,093 common shares outstanding at June 30, 2001, the Advisor owned 7,093
shares. As of June 30, 2001, there were 3,366 Series R7 preferred shares
outstanding, which includes 726 shares issued on March 10, 2000.
On March 10, 2000, the Trust reclassified 726 common shares and issued an
additional 726 shares of Series R7 preferred shares. The additional shares
issued have identical rights and features of the existing Series R7 preferred
shares. Estimated offering costs of $304,791 and underwriting discounts of
$181,500 have been charged to paid-in capital in excess of par of the common
shares.
Dividends on Series R7 shares are cumulative at a rate which is reset every
7 days based on the results of an auction. Dividend rates ranged from 2.75% to
4.05% during the six months ended June 30, 2001.
The Trust may not declare dividends or make other distributions to 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 would be less than 200%.
The preferred shares are redeemable at the option of the Trust, in whole or
in part, on any dividend payment date at $25,000 per share plus any accumulated
or unpaid dividends whether or not declared. The preferred shares are also
subject to mandatory redemption at $25,000 per share plus any accumulated or
unpaid dividends, whether or not declared if certain requirements relating to
the composition of the assets and liabilities of the Trust as set forth in the
Declaration of Trust are not satisfied.
The holders of preferred shares have voting rights equal to the holders of
common stock (one vote per share) and will vote together with holders of common
shares as a single class. However, holders of preferred shares are also entitled
to elect two of the Trust's trustees. In addition, the Investment Company Act of
1940 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, and (b) take
any action requiring a vote of security holders, including, among other things,
changes in the Trust's subclassification as a closed-end investment company or
changes in its fundamental investment restrictions.
NOTE 5. DIVIDENDS
Subsequent to June 30, 2001, the Board of Trustees of the Trust declared a
dividend from undistributed earnings of $0.0625 per common share payable August
1, 2001 to shareholders of record on July 16, 2001.
For the period July 1, 2001 to July 31, 2001 dividends declared on
preferred shares totalled $182,606 in aggregate for the outstanding preferred
share series.
12
--------------------------------------------------------------------------------
THE BLACKROCK FLORIDA INSURED MUNICIPAL 2008 TERM TRUST
DIVIDEND REINVESTMENT PLAN
--------------------------------------------------------------------------------
Pursuant to the Trust's Dividend Reinvestment Plan (the "Plan"), common
shareholders may elect to have all distributions of dividends and capital gains
reinvested by State Street Bank and Trust Company (the "Plan Agent") in Trust
shares pursuant to the Plan. Shareholders who elect not to participate in the
Plan will receive all distributions in cash paid by check in United States
dollars mailed directly to the shareholders of record (or if the shares are held
in street or other nominee name, then to the nominee) by the transfer agent, as
dividend disbursing agent.
The Plan Agent serves as agent for the shareholders in administering the
Plan. After the Trust declares a dividend or determines to make a capital gain
distribution, the Plan Agent will, as agent for the participants, receive the
cash payment and use it to buy Trust shares in the open market on the New York
Stock Exchange or elsewhere for the participants' accounts. The Trust will not
issue any new shares under the Plan.
Participants in the Plan may withdraw from the Plan upon written notice to
the Plan Agent and will receive certificates for whole Trust shares and a cash
payment for any fraction of a Trust share.
The Plan Agent's fees for the handling of the reinvestment of dividends and
distributions will be paid by the Trust. However, each participant will pay a
pro rata share of brokerage commissions incurred with respect to the Plan
Agent's open market purchases in connection with the reinvestment of dividends
and distributions. The automatic reinvestment of dividends and distributions
will not relieve participants of any federal income tax that may be payable on
such dividends or distributions.
The Trust reserves the right to amend or terminate the Plan as applied to
any dividend or distribution paid subsequent to written notice of the change
sent to all shareholders of the Trust at least 90 days before the record date
for the dividend or distribution. The Plan also may be amended or terminated by
the Plan Agent upon at least 90 days written notice to all shareholders of the
Trust. All correspondence concerning the Plan should be directed to the Plan
Agent at (800) 699-1BFM. The address is on the front of this report.
13
--------------------------------------------------------------------------------
THE BLACKROCK FLORIDA INSURED MUNICIPAL 2008 TERM TRUST
ADDITIONAL INFORMATION
--------------------------------------------------------------------------------
Quarterly performance and other information regarding the Trust may be
found on BlackRock's website, which can be accessed at
http://www.blackrock.com/funds/cefunds.html. This reference to BlackRock's
website is intended to allow investors public access to quarterly information
regarding the Trust and is not intended to incorporate BlackRock's website into
this report.
ANNUAL MEETING OF TRUST SHAREHOLDERS. There have been no material changes
in the Trust's investment objectives or policies that have not been approved by
the shareholders or to its charter or by-laws or in the principal risk factors
associated with investment in the Trust. There have been no changes in the
persons who are primarily responsible for the day-to-day management of the
Trust's portfolio.
The Annual Meeting of Trust Shareholders was held May 24, 2001 to vote on
the following matter:
(1) To elect three Trustees as follows:
TRUSTEE: CLASS TERM EXPIRING
------- ----- ----- -------
Frank J. Fabozzi ................. II 3 years 2004
Walter F. Mondale ................ II 3 years 2004
Ralph L. Schlosstein ............. II 3 years 2004
Trustees whose term of office continues beyond this meeting are Andrew
F. Brimmer, Richard E. Cavanagh, Kent Dixon, Laurence D. Fink and James
Clayburn La Force, Jr.
Shareholders elected the three Trustees. The results of the voting were
as follows:
VOTES FOR* VOTES AGAINST* ABSTENTIONS*
---------- -------------- ------------
Frank J. Fabozzi ........... 3,191 -- --
Walter F. Mondale .......... 8,165,317 -- 134,692
Ralph L. Schlosstein ....... 8,181,203 -- 118,806
--------------
* The votes represent common and preferred shareholders voting as a single
class except for Frank J. Fabozzi who was voted on and elected by the
preferred shareholders only.
14
--------------------------------------------------------------------------------
THE BLACKROCK FLORIDA INSURED MUNICIPAL 2008 TERM TRUST
INVESTMENT SUMMARY
--------------------------------------------------------------------------------
THE TRUST'S INVESTMENT OBJECTIVE
The BlackRock Florida Insured Municipal 2008 Term Trust's investment objective
is to provide current income exempt from Federal income tax and Florida
intangible personal property tax, and to return $15 per share (the initial
public offering price per share) to investors on or about December 31, 2008.
WHO MANAGES THE TRUST?
BlackRock Advisors, Inc. (the "Advisor") manages the Trust. The Advisor is a
wholly-owned subsidiary of BlackRock, Inc. ("BlackRock"), which is one of the
largest publicly traded investment management firms in the United States with
$213 billion of assets under management as of June 30, 2001. BlackRock manages
assets on behalf of more than 3,300 institutions and 200,000 individuals
worldwide, including nine of the ten largest companies in the U.S. as determined
by Fortune Magazine, through a variety of equity, fixed income, liquidity and
alternative investment separate accounts and mutual funds, including the
BLACKROCK FUNDS and BLACKROCK PROVIDENT INSTITUTIONAL FUNDS. In addition,
BlackRock provides risk management and technology services to a growing number
of institutional investors under the BLACKROCK SOLUTIONS name. Clients are
served from BlackRock's headquarters in New York City, as well as offices in
Wilmington, DE, Edinburgh, Scotland, Tokyo, Japan, and Hong Kong. BlackRock is a
member of The PNC Financial Services Group, Inc. ("PNC"), one of the largest
diversified financial services organizations in the United States, and is
majority-owned by PNC and by BlackRock employees.
WHAT CAN THE TRUST INVEST IN?
The Trust intends to invest at least 80% of its total assets in Florida
municipal obligations insured as to the timely payment of both principal and
interest. The Trust may invest up to 20% of its total assets in uninsured
Florida municipal obligations which are rated Aaa by Moody's or AAA by S&P, or
are determined by the Advisor to be of comparable credit quality (guaranteed,
escrowed or backed in trust).
WHAT IS THE ADVISOR'S INVESTMENT STRATEGY?
The Advisor will seek to meet the Trust's investment objective by managing the
assets of the Trust so as to return the initial offering price ($15 per share)
at maturity. The Advisor will implement a conservative strategy that will seek
to closely match the maturity or call provisions of the assets of the portfolio
with the future return of the initial investment at the end of 2008. At the
Trust's termination, BlackRock expects that the value of the securities which
have matured, combined with the value of the securities that are sold or called,
if any, will be sufficient to return the initial offering price to investors. On
a continuous basis, the Trust will seek its objective by actively managing its
portfolio of Florida municipal obligations and retaining a small amount of
income each year.
In addition to seeking the return of the initial offering price, the Advisor
also seeks to provide current income exempt from Federal income tax and Florida
intangible personal tax to investors. The portfolio managers will attempt to
achieve this objective by investing in securities that provide competitive
income. In addition, leverage will be used to enhance the income of the
portfolio. In order to maintain competitive yields as the Trust approaches
maturity and depending on market conditions, the Advisor will attempt to
purchase securities with call protection or maturities as close to the Trust's
maturity date as possible. Securities with call protection should provide the
portfolio with some degree of protection against reinvestment risk during times
of lower prevailing interest rates. Since the Trust's primary goal is to return
the initial offering price at maturity, any cash that the Trust receives prior
to its maturity date will be reinvested in securities with maturities which
coincide with the remaining term of the Trust. Since shorter-term securities
typically yield less than longer-term securities, this strategy will likely
result in a decline in the Trust's income over time. It is important to note
that the Trust will be managed so as to preserve the integrity of the return of
the initial offering price. If market conditions, such as high interest rate
volatility, force a choice between current income and risking the return of the
initial offering price, it is likely that the return of the initial offering
price will be emphasized.
15
HOW ARE THE TRUST'S SHARES PURCHASED AND SOLD? DOES THE TRUST PAY DIVIDENDS
REGULARLY?
The Trust's common shares are traded on the New York Stock Exchange which
provides investors with liquidity on a daily basis. Orders to buy or sell shares
of the Trust must be placed through a registered broker or financial advisor.
The Trust pays monthly dividends which are typically paid on the first business
day of the month. For shares held in the shareholder's name, dividends may be
reinvested in additional shares of the Trust through the Trust's transfer agent,
State Street Bank and Trust Company. Investors who wish to hold shares in a
brokerage account should check with their financial advisor to determine whether
their brokerage firm offers dividend reinvestment services.
LEVERAGE CONSIDERATIONS IN A TERM TRUST
Under current market conditions, leverage increases the income earned by the
Trust. The Trust employs leverage primarily through the issuance of preferred
stock. Leverage permits the Trust to borrow money at short-term rates and
reinvest that money in longer-term assets which typically offer higher interest
rates. The difference between the cost of the borrowed funds and the income
earned on the proceeds that are invested in longer term assets is the benefit to
the Trust from leverage.
Leverage also increases the duration (or price volatility of the net assets) of
the Trust, which can improve the performance of the Trust in a declining rate
environment, but can cause net assets to decline faster than the market in a
rapidly rising rate environment. The Advisor's portfolio managers continuously
monitor and regularly review the Trust's use of leverage and the Trust may
reduce, or unwind, the amount of leverage employed should the Advisor consider
that reduction to be in the best interests of the shareholders.
SPECIAL CONSIDERATIONS AND RISK FACTORS RELEVANT TO TERM TRUSTS
THE TRUST IS INTENDED TO BE A LONG-TERM INVESTMENT AND IS NOT A SHORT-TERM
TRADING VEHICLE.
RETURN OF INITIAL INVESTMENT. Although the objective of the Trust is to return
its initial offering price upon termination, there can be no assurance that this
objective will be achieved.
DIVIDEND CONSIDERATIONS. The income and dividends paid by the Trust are likely
to decline to some extent over the term of the Trust due to the anticipated
shortening of the dollar-weighted average maturity of the Trust's assets.
LEVERAGE. The Trust utilizes leverage through the issuance of preferred stock
which involves special risks. The Trust's net asset value and market value may
be more volatile due to its use of leverage.
MARKET PRICE OF SHARES. The shares of closed-end investment companies such as
the Trust trade on the New York Stock Exchange (NYSE symbol: BRF) and as such
are subject to supply and demand influences. As a result, shares may trade at a
discount or a premium to their net asset value.
ILLIQUID SECURITIES. The Trust may invest in securities that are illiquid,
although under current market conditions the Trust expects to do so to only a
limited extent. Investing in these securities involves special risks.
ANTITAKEOVER PROVISIONS. Certain antitakeover provisions will make a change in
the Trust's business or management more difficult without the approval of the
Trustees and may have the effect of depriving shareholders of an opportunity to
sell their shares at a premium above the prevailing market price.
MUNICIPAL OBLIGATIONS. Municipal obligations include debt obligations issued by
states, cities, and local authorities, and possessions and certain territories
of the United States to obtain funds for various public purposes, including the
construction of public facilities, the refinancing of outstanding obligations
and the obtaining of funds for general operating expenses and for loans to other
public institutions and facilities. The value of municipal debt securities
generally varies inversely with changes in prevailing market interest rates.
Depending on the amount of call protection that the securities in the Trust
have, the Trust may be subject to certain reinvestment risks in environments of
declining interest rates.
ALTERNATIVE MINIMUM TAX (AMT). The Trust may invest in securities subject to
AMT. The Trust currently holds no securities that are subject to AMT.
16
--------------------------------------------------------------------------------
THE BLACKROCK FLORIDA INSURED MUNICIPAL 2008 TERM TRUST
GLOSSARY
--------------------------------------------------------------------------------
CLOSED-END FUND: Investment vehicle which initially offers a fixed
number of shares and trades on a stock exchange.
The fund invests in a portfolio of securities in
accordance with its stated investment objectives
and policies.
DISCOUNT: When a fund's net asset value is greater than its
stock price the fund is said to be trading at a
discount.
DIVIDEND: Income generated by securities in a portfolio and
distributed to shareholders after the deduction of
expenses. The Trust declares and pays dividends to
common shareholders on a monthly basis.
DIVIDEND REINVESTMENT: Shareholders may have all dividends and
distributions of capital gains automatically
reinvested into additional shares of a fund.
MARKET PRICE: Price per share of a security trading in the
secondary market. For a closed-end fund, this is
the price at which one share of the fund trades on
the stock exchange. If you were to buy or sell
shares, you would pay or receive the market price.
NET ASSET VALUE (NAV): Net asset value is the total market value of all
securities and other assets held by the Trust, plus
income accrued on its investments, minus any
liabilities including accrued expenses, divided by
the total number of outstanding common shares. It
is the underlying value of a single common share on
a given day. Net asset value for the Trust is
calculated weekly and published in BARRON'S on
Saturday and THE WALL STREET JOURNAL on Monday.
PREMIUM: When a fund's stock price is greater than its net
asset value, the fund is said to be trading at a
premium.
PREREFUNDED BONDS: These securities are collateralized by U.S.
Government securities which are held in escrow and
are used to pay principal and interest on the tax
exempt issue and retire the bond in full at the
date indicated, typically at a premium to par.
17
-------------------------------------------------------------------------------
BLACKROCK ADVISORS, INC.
SUMMARY OF CLOSED-END FUNDS
-------------------------------------------------------------------------------
TAXABLE TRUSTS
-------------------------------------------------------------------------------
STOCK MATURITY
PERPETUAL TRUSTS SYMBOL DATE
----- -----
The BlackRock Income Trust Inc. BKT N/A
The BlackRock North American Government Income Trust Inc. BNA N/A
The BlackRock High Yield Trust BHY N/A
TERM TRUSTS
The BlackRock Strategic Term Trust Inc. BGT 12/02
The BlackRock Investment Quality Term Trust Inc. BQT 12/04
The BlackRock Advantage Term Trust Inc. BAT 12/05
The BlackRock Broad Investment Grade 2009 Term Trust Inc. BCT 12/09
TAX-EXEMPT TRUSTS
------------------------------------------------------------------------------------------------
STOCK MATURITY
PERPETUAL TRUSTS SYMBOL DATE
----- -----
The BlackRock Investment Quality Municipal Trust Inc. BKN N/A
The BlackRock California Investment Quality Municipal Trust Inc. RAA N/A
The BlackRock Florida Investment Quality Municipal Trust RFA N/A
The BlackRock New Jersey Investment Quality Municipal Trust Inc. RNJ N/A
The BlackRock New York Investment Quality Municipal Trust Inc. RNY N/A
The BlackRock Pennsylvania Strategic Municipal Trust BPS N/A
The BlackRock Strategic Municipal Trust Inc. BSD N/A
BlackRock California Municipal Income Trust BFZ N/A
BlackRock Municipal Income Trust BRK N/A
BlackRock New York Municipal Income Trust BNY N/A
BlackRock New Jersey Municipal Income Trust BNJ N/A
BlackRock Florida Municipal Income Trust BBF N/A
TERM TRUSTS
The BlackRock Municipal Target Term Trust Inc. BMN 12/06
The BlackRock Insured Municipal 2008 Term Trust Inc. BRM 12/08
The BlackRock California Insured Municipal 2008 Term Trust Inc. BFC 12/08
The BlackRock Florida Insured Municipal 2008 Term Trust BRF 12/08
The BlackRock New York Insured Municipal 2008 Term Trust Inc. BLN 12/08
The BlackRock Insured Municipal Term Trust Inc. BMT 12/10
IF YOU WOULD LIKE FURTHER INFORMATION PLEASE CALL BLACKROCK AT
(800) 227-7BFM (7236) OR CONSULT WITH YOUR FINANCIAL ADVISOR.
18
--------------------------------------------------------------------------------
BLACKROCK ADVISORS, INC.
AN OVERVIEW
--------------------------------------------------------------------------------
BlackRock Advisors, Inc. (the "Advisor") manages the Trust. The Advisor is
a wholly-owned subsidiary of BlackRock, Inc. ("BlackRock"), which is one of the
largest publicly traded investment management firms in the United States with
$213 billion of assets under management as of June 30, 2001. BlackRock manages
assets on behalf of more than 3,300 institutions and 200,000 individuals
worldwide, including nine of the ten largest companies in the U.S. as determined
by FORTUNE MAGAZINE, through a variety of equity, fixed income, liquidity and
alternative investment separate accounts and mutual funds, including the
BLACKROCK FUNDS and BLACKROCK PROVIDENT INSTITUTIONAL FUNDS. In addition,
BlackRock provides risk management and technology services to a growing number
of institutional investors under the BLACKROCK SOLUTIONS name. Clients are
served from BlackRock's headquarters in New York City, as well as offices in
Wilmington, DE, Edinburgh, Scotland, Tokyo, Japan, and Hong Kong. BlackRock is a
member of The PNC Financial Services Group, Inc. ("PNC"), one of the largest
diversified financial services organizations in the United States, and is
majority-owned by PNC and by BlackRock employees.
BlackRock's fixed income product was introduced in 1988 by a team of highly
seasoned fixed income professionals. These professionals had extensive
experience creating, analyzing and trading a variety of fixed income
instruments, including the most complex structured securities. In fact, several
individuals at BlackRock were responsible for developing many of the major
innovations in the mortgage-backed and asset-backed securities markets,
including the creation of the first CMO, the floating rate CMO, the
senior/subordinated pass-through and the multi-class asset-backed security.
BlackRock is unique among asset management and advisory firms in the
emphasis it places on the development of proprietary analytical capabilities.
Over one quarter of the firm's professionals are dedicated to the design,
maintenance and use of these systems, which are not otherwise available to
investors. BlackRock's proprietary analytical tools are used for evaluating, and
designing fixed income investment strategies for client portfolios. Securities
purchased include mortgages, corporate bonds, municipal bonds and a variety of
hedging instruments.
BlackRock has developed investment products that respond to investors'
needs and has been responsible for several major innovations in closed-end
funds. In fact, BlackRock introduced the first closed-end mortgage fund, the
first taxable and tax-exempt closed-end funds to offer a finite term, the first
closed-end fund to achieve a AAA rating by Standard & Poor's, and the first
closed-end fund to invest primarily in North American Government securities.
Currently, BlackRock's closed-end funds have dividend reinvestment plans, which
are designed to provide ongoing demand for the stock in the secondary market.
BlackRock manages a wide range of investment vehicles, each having specific
investment objectives and policies.
In view of our continued desire to provide a high level of service to all
our shareholders, BlackRock maintains a toll-free number for your questions. The
number is (800) 227-7BFM (7236). We encourage you to call us with any questions
that you may have about your BlackRock funds and we thank you for the continued
trust that you place in our abilities.
IF YOU WOULD LIKE FURTHER INFORMATION
PLEASE DO NOT HESITATE TO CALL BLACKROCK AT (800) 227-7BFM
19
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BLACKROCK
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TRUSTEES
Laurence D. Fink, CHAIRMAN
Andrew F. Brimmer
Richard E. Cavanagh
Kent Dixon
Frank J. Fabozzi
James Clayburn La Force, Jr.
Walter F. Mondale
Ralph L. Schlosstein
OFFICERS THE BLACKROCK
Ralph L. Schlosstein, PRESIDENT FLORIDA INSURED
Keith T. Anderson, VICE PRESIDENT MUNICIPAL 2008
Michael C. Huebsch, VICE PRESIDENT TERM TRUST
Robert S. Kapito, VICE PRESIDENT ==============================
Kevin M. Klingert, VICE PRESIDENT SEMI-ANNUAL REPORT
Richard M. Shea, VICE PRESIDENT/TAX JUNE 30, 2001
Henry Gabbay, TREASURER
James Kong, ASSISTANT TREASURER
Anne Ackerley, SECRETARY
INVESTMENT ADVISOR
BlackRock Advisors, Inc.
100 Bellevue Parkway
Wilmington, DE 19809
(800) 227-7BFM
ADMINISTRATOR
Princeton Administrators, L.P.
P.O. Box 9095
Princeton, NJ 08543-9095
(800) 543-6217
CUSTODIAN AND TRANSFER AGENT
State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171
800) 699-1BFM
AUCTION AGENT
Deutsche Bank
4 Albany Street
New York, NY 10006
INDEPENDENT AUDITORS
Deloitte & Touche LLP
200 Berkeley Street
Boston, MA 02116
LEGAL COUNSEL
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, NY 10036
LEGAL COUNSEL - INDEPENDENT TRUSTEES
Debevoise & Plimpton
919 Third Avenue
New York, NY 10022
The accompanying financial statements
as of June 30, 2001 were not audited and
accordingly, no opinion is expressed on
them. This report is for shareholder
information.
This is not a prospectus intended for
use in the purchase or sale of any
securities.
Statements and other information
contained in this report are as dated and
are subject to change.
THE BLACKROCK FLORIDA INSURED
MUNICIPAL 2008 TERM TRUST
c/o Princeton Administrators, L.P.
P.O. Box 9095, Princeton, NJ 08543-9095
(800) 543-6217
09247H 10 6
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