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: 811-07250

           The BlackRock Broad Investment Grade 2009 Term Trust Inc.
--------------------------------------------------------------------------------
               (Exact name of registrant as specified in charter)

          100 Bellevue Parkway, Wilmington, DE                        19809
--------------------------------------------------------------------------------
         (Address of principal executive offices)                   (Zip code)

                           Robert S. Kapito, President
           The BlackRock Broad Investment Grade 2009 Term Trust Inc.
                    40 East 52nd Street, New York, NY 10022
--------------------------------------------------------------------------------
                     (Name and address of agent for service)


Registrant's telephone number, including area code: (302) 797-2449

Date of fiscal year end: 10/31/03

Date of reporting period: 4/30/03




ITEM 1.  REPORTS TO STOCKHOLDERS.
The Trust's semi-annual report transmitted to shareholders pursuant to Rule
30e-1 under the Investment Company Act of 1940 is as follows:



BlackRock
Closed-End Funds

Semi-Annual Report

APRIL 30, 2003 (UNAUDITED)


BlackRock Broad Investment Grade 2009 Term Trust (BCT)

BlackRock Core Bond Trust (BHK)

BlackRock High Yield Trust (BHY)

BlackRock Income Opportunity Trust (BNA)

BlackRock Income Trust (BKT)

BlackRock Strategic Bond Trust (BHD)


                                                                [BLACKROCK LOGO]

NOT FDIC INSURED
MAY LOSE VALUE
NO BANK GUARANTEE





                                TABLE OF CONTENTS



Letter to Shareholders ....................................................   1

Trust Summaries ...........................................................   2

Portfolios of Investments .................................................   8

Financial Statements

   Statements of Assets and Liabilities ...................................  33

   Statements of Operations ...............................................  35

   Statements of Cash Flows ...............................................  37

   Statements of Changes in Net Assets ....................................  39

Financial Highlights ......................................................  42

Notes to Financial Statements .............................................  48

Dividend Reinvestment Plans ...............................................  56

Additional Information ....................................................  56







--------------------------------------------------------------------------------

                        PRIVACY PRINCIPLES OF THE TRUSTS

     The Trusts are committed to maintaining the privacy of shareholders and to
safeguarding their non-public personal information. The following information is
provided to help you understand what personal information the Trusts collect,
how we protect that information and why, in certain cases, we may share
information with select other parties.

     Generally, the Trusts do not receive any non-public personal information
relating to their shareholders, although certain non-public personal information
of shareholders may become available to the Trusts. The Trusts do not disclose
any non-public personal information about their 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 Trusts restrict access to non-public personal information about their
shareholders to BlackRock employees with a legitimate business need for the
information. The Trusts maintain physical, electronic and procedural safeguards
designed to protect the non-public personal information of their shareholders.

--------------------------------------------------------------------------------




                             LETTER TO SHAREHOLDERS

                                                                    May 31, 2003

Dear Shareholder:

         We are pleased to report that during the semi-annual period, the Trusts
continued to provide monthly income, as well as the opportunity to invest in
various portfolios of fixed income securities. This report contains the Trusts'
unaudited financial statements and a listing of the portfolios' holdings.

         The portfolio management team continuously monitors the fixed income
markets and adjusts the portfolios in order to gain exposure to various issuers
and security types. This strategy enables the Trusts to move among different
sectors, credits and coupons to capitalize on changing market conditions.

         The following table shows the Trusts' yields, closing market prices per
share and net asset values ("NAV") per share as of April 30, 2003.



-------------------------------------------------------------------------------------------------
                       TRUST                                   YIELD(1)    MARKET PRICE     NAV
-------------------------------------------------------------------------------------------------
                                                                                 
BlackRock Broad Investment Grade 2009 Term Trust (BCT)            5.49%       $16.40      $16.98
-------------------------------------------------------------------------------------------------
BlackRock Core Bond Trust (BHK)                                   8.06         14.88       15.31
-------------------------------------------------------------------------------------------------
BlackRock High Yield Trust (BHY)                                 11.30         10.29        6.55
-------------------------------------------------------------------------------------------------
BlackRock Income Opportunity Trust (BNA)                          7.52         11.17       12.27
-------------------------------------------------------------------------------------------------
BlackRock Income Trust (BKT)                                      7.59          8.07        7.55
-------------------------------------------------------------------------------------------------
BlackRock Strategic Bond Trust (BHD)                              9.83         14.65       14.27
-------------------------------------------------------------------------------------------------


(1) Yield is based on market price.


         BlackRock, Inc. ("BlackRock"), a world leader in asset management, has
a proven commitment to fixed income. As of March 31, 2003, BlackRock managed
$187 billion in bonds, including 16 open-end and 44 closed-end bond funds.
BlackRock is recognized for its emphasis on risk management and proprietary
analytics and for its reputation managing money for the world's largest
institutional investors. BlackRock Advisors, Inc., which manages the Trusts, is
a wholly owned subsidiary of BlackRock, Inc.

         On behalf of BlackRock, we thank you for your continued trust and
assure you that we remain committed to excellence in managing your assets.


Sincerely,


/s/ Laurence D. Fink                              /s/ Ralph L. Schlosstein

Laurence D. Fink                                  Ralph L. Schlosstein
Chief Executive Officer                           President
BlackRock Advisors, Inc.                          BlackRock Advisors, Inc.





                                       1


TRUST SUMMARIES (unaudited)
APRIL 30, 2003

------------------------------------------------
BlackRock Broad Investment Grade 2009 Term Trust
------------------------------------------------


                                TRUST INFORMATION
--------------------------------------------------------------------------------
Symbol on American Stock Exchange:                                     BCT
--------------------------------------------------------------------------------
Initial Offering Date:                                            June 17, 1993
--------------------------------------------------------------------------------
Closing Market Price as of 4/30/03:                                  $16.40
--------------------------------------------------------------------------------
Net Asset Value as of 4/30/03:                                       $16.98
--------------------------------------------------------------------------------
Yield on Closing Market Price as of 4/30/03 ($16.40):(1)               5.49%
--------------------------------------------------------------------------------
Current Monthly Distribution per Share:(2)                           $ 0.075
--------------------------------------------------------------------------------
Current Annualized Distribution per Share:(2)                        $ 0.900
--------------------------------------------------------------------------------

(1) Yield on closing market price is calculated by dividing the current
    annualized distribution per share by the closing market price.

(2) The distribution is not constant and is subject to change.


The table below summarizes the changes in the Trust's market price and NAV:

               -----------------------------------------------------------------
                   4/30/03      10/31/02     CHANGE         HIGH          LOW
--------------------------------------------------------------------------------
MARKET PRICE       $16.40        $16.18        1.36%        $16.55      $15.84
-------------------------------------------------------------------------------
NAV                $16.98        $17.33       (2.02)%       $17.38      $16.86
--------------------------------------------------------------------------------


The following charts show the Trust's asset composition and credit quality
allocations:

--------------------------------------------------------------------------------
                                SECTOR BREAKDOWN
--------------------------------------------------------------------------------
COMPOSITION                                     APRIL 30, 2003  OCTOBER 31, 2002
--------------------------------------------------------------------------------
U.S. Government and Agency Securities                49%               36%
--------------------------------------------------------------------------------
Agency Multiple Class Mortgage Pass-Throughs         14                18
--------------------------------------------------------------------------------
Inverse Floating Rate Mortgages                      13                18
--------------------------------------------------------------------------------
Corporate Bonds                                       9                10
--------------------------------------------------------------------------------
Interest Only Mortgage-Backed Securities              7                 8
--------------------------------------------------------------------------------
Taxable Municipal Bonds                               5                 5
--------------------------------------------------------------------------------
Mortgage Pass-Throughs                                2                 2
--------------------------------------------------------------------------------
Commercial Mortgage-Backed Securities                 1                 1
--------------------------------------------------------------------------------
Asset-Backed Securities                              --                 2
--------------------------------------------------------------------------------


--------------------------------------------------------------------------------
                            RATING % OF CORPORATES*
--------------------------------------------------------------------------------
CREDIT RATING                                   APRIL 30, 2003  OCTOBER 31, 2002
--------------------------------------------------------------------------------
AAA/Aaa                                               10%                8%
--------------------------------------------------------------------------------
AA/Aa                                                 22                19
--------------------------------------------------------------------------------
A                                                     40                42
--------------------------------------------------------------------------------
BBB/Baa                                               28                30
--------------------------------------------------------------------------------
BB/Ba                                                 --                 1
--------------------------------------------------------------------------------

----------
*   Using the higher of Standard & Poor's ("S&P"), Moody's Investors Service
    ("Moody's") or Fitch Ratings ("Fitch") rating. Corporate bonds represented
    approximately 11.4% and 13.3% of net assets on April 30, 2003 and October
    31, 2002, respectively.




                                       2



TRUST SUMMARIES (unaudited)
APRIL 30, 2003

-------------------------
BlackRock Core Bond Trust
-------------------------


                                TRUST INFORMATION
--------------------------------------------------------------------------------
Symbol on New York Stock Exchange:                                  BHK
--------------------------------------------------------------------------------
Initial Offering Date:                                       November 27, 2001
--------------------------------------------------------------------------------
Closing Market Price as of 4/30/03:                               $14.88
--------------------------------------------------------------------------------
Net Asset Value as of 4/30/03:                                    $15.31
--------------------------------------------------------------------------------
Yield on Closing Market Price as of 4/30/03 ($14.88):(1)            8.06%
--------------------------------------------------------------------------------
Current Monthly Distribution per Share:(2)                        $ 0.10
--------------------------------------------------------------------------------
Current Annualized Distribution per Share:(2)                     $ 1.20
--------------------------------------------------------------------------------

(1) Yield on closing market price is calculated by dividing the current
    annualized distribution per share by the closing market price.

(2) The distribution is not constant and is subject to change.


The table below summarizes the changes in the Trust's market price and NAV:

                 ---------------------------------------------------------------
                   4/30/03      10/31/02      CHANGE         HIGH          LOW
--------------------------------------------------------------------------------
MARKET PRICE        $14.88       $13.82        7.67%        $14.95       $13.45
--------------------------------------------------------------------------------
NAV                 $15.31       $14.33        6.84%        $15.31       $14.36
--------------------------------------------------------------------------------


The following charts show the Trust's asset composition and credit quality
allocations:

--------------------------------------------------------------------------------
                                SECTOR BREAKDOWN
--------------------------------------------------------------------------------
COMPOSITION                                   APRIL 30, 2003    OCTOBER 31, 2002
--------------------------------------------------------------------------------
Corporate Bonds                                    48%                44%
--------------------------------------------------------------------------------
Mortgage Pass-Throughs                             26                 28
--------------------------------------------------------------------------------
U.S. Government and Agency Securities              12                 17
--------------------------------------------------------------------------------
Foreign Government Bonds                            8                  3
--------------------------------------------------------------------------------
Commercial Mortgage-Backed Securities               3                  6
--------------------------------------------------------------------------------
Interest Only Mortgage-Backed Securities            2                  2
--------------------------------------------------------------------------------
Taxable Municipal Bonds                             1                 --
--------------------------------------------------------------------------------


--------------------------------------------------------------------------------
                             RATING % OF CORPORATES*
--------------------------------------------------------------------------------
CREDIT RATING                                 APRIL 30, 2003    OCTOBER 31, 2002
--------------------------------------------------------------------------------
AAA/Aaa                                            11%                14%
--------------------------------------------------------------------------------
AA/Aa                                               6                  6
--------------------------------------------------------------------------------
A                                                  23                 20
--------------------------------------------------------------------------------
BBB/Baa                                            18                 18
--------------------------------------------------------------------------------
BB/Ba                                              12                 10
--------------------------------------------------------------------------------
B                                                  27                 29
--------------------------------------------------------------------------------
CCC/Caa                                             3                  1
--------------------------------------------------------------------------------
Not Rated                                          --                  2
--------------------------------------------------------------------------------

----------
*   Using the higher of S&P's, Moody's or Fitch's rating. Corporate bonds
    represented approximately 67.8% and 62.1% of net assets on April 30, 2003
    and October 31, 2002, respectively.




                                       3



TRUST SUMMARIES (unaudited)
APRIL 30, 2003

--------------------------
BlackRock High Yield Trust
--------------------------


                                TRUST INFORMATION
--------------------------------------------------------------------------------
Symbol on New York Stock Exchange:                                    BHY
--------------------------------------------------------------------------------
Initial Offering Date:                                         December 23, 1998
--------------------------------------------------------------------------------
Closing Market Price as of 4/30/03:                                 $10.29
--------------------------------------------------------------------------------
Net Asset Value as of 4/30/03:                                      $ 6.55
--------------------------------------------------------------------------------
Yield on Closing Market Price as of 4/30/03 ($10.29):(1)             11.30%
--------------------------------------------------------------------------------
Current Monthly Distribution per Share:(2)                          $ 0.096875
--------------------------------------------------------------------------------
Current Annualized Distribution per Share:(2)                       $ 1.162500
--------------------------------------------------------------------------------

(1) Yield on closing market price is calculated by dividing the annualized
    distribution per share as of April 30, 2003 by the closing market price.

(2) Effective June 2, 2003, the monthly distribution per share has been changed
    to $0.0905. The distribution is not constant and is subject to change.


The table below summarizes the changes in the Trust's market price and NAV:

                 ---------------------------------------------------------------
                   4/30/03     10/31/02       CHANGE         HIGH           LOW
--------------------------------------------------------------------------------
MARKET PRICE       $10.29        $8.68        18.55%        $10.50         $7.91
--------------------------------------------------------------------------------
NAV                $ 6.55        $6.13         6.85%        $ 6.55         $6.02
--------------------------------------------------------------------------------


The following chart shows the Trust's credit quality allocations:

--------------------------------------------------------------------------------
                             RATING % OF CORPORATES*
--------------------------------------------------------------------------------
CREDIT RATING                              APRIL 30, 2003       OCTOBER 31, 2002
--------------------------------------------------------------------------------
BBB/Baa                                         --%                    4%
--------------------------------------------------------------------------------
BB/Ba                                           16                    18
--------------------------------------------------------------------------------
B                                               60                    62
--------------------------------------------------------------------------------
CCC/Caa                                         18                    10
--------------------------------------------------------------------------------
CC/Ca                                            1                     3
--------------------------------------------------------------------------------
C                                                1                    --
--------------------------------------------------------------------------------
Not Rated                                        4                     3
--------------------------------------------------------------------------------

----------
*   Using the higher of S&P's, Moody's or Fitch's rating. Corporate bonds
    represented approximately 140.9% and 144.5% of net assets on April 30, 2003
    and October 31, 2002, respectively.




                                       4



TRUST SUMMARIES (unaudited)
APRIL 30, 2003

----------------------------------
BlackRock Income Opportunity Trust
----------------------------------


                                TRUST INFORMATION
--------------------------------------------------------------------------------
Symbol on New York Stock Exchange:                                    BNA
--------------------------------------------------------------------------------
Initial Offering Date:                                         December 20, 1991
--------------------------------------------------------------------------------
Closing Market Price as of 4/30/03:                                 $11.17
--------------------------------------------------------------------------------
Net Asset Value as of 4/30/03:                                      $12.27
--------------------------------------------------------------------------------
Yield on Closing Market Price as of 4/30/03 ($11.17):(1)              7.52%
--------------------------------------------------------------------------------
Current Monthly Distribution per Share:(2)                          $ 0.07
--------------------------------------------------------------------------------
Current Annualized Distribution per Share:(2)                       $ 0.84
--------------------------------------------------------------------------------

(1) Yield on closing market price is calculated by dividing the current
    annualized distribution per share by the closing market price.

(2) The distribution is not constant and is subject to change.


The table below summarizes the changes in the Trust's market price and NAV:

                 ---------------------------------------------------------------
                    4/30/03      10/31/02       CHANGE        HIGH          LOW
--------------------------------------------------------------------------------
MARKET PRICE        $11.17        $10.50         6.38%       $11.20       $10.37
--------------------------------------------------------------------------------
NAV                 $12.27        $11.83         3.72%       $12.27       $11.65
--------------------------------------------------------------------------------


The following charts show the Trust's asset composition and credit quality
allocations:

--------------------------------------------------------------------------------
                                SECTOR BREAKDOWN
--------------------------------------------------------------------------------
COMPOSITION                                  APRIL 30, 2003     OCTOBER 31, 2002
--------------------------------------------------------------------------------
Corporate Bonds                                   52%                 30%
--------------------------------------------------------------------------------
Mortgage Pass-Throughs                            37                  55
--------------------------------------------------------------------------------
U.S. Government and Agency Securities              5                   7
--------------------------------------------------------------------------------
Federal Housing Administration                     3                   4
--------------------------------------------------------------------------------
Interest Only Mortgage-Backed Securities           1                   1
--------------------------------------------------------------------------------
Inverse Floating Rate Mortgages                    1                   1
--------------------------------------------------------------------------------
Principal Only Mortgage-Backed Securities          1                   2
--------------------------------------------------------------------------------


--------------------------------------------------------------------------------
                             RATING % OF CORPORATES*
--------------------------------------------------------------------------------
CREDIT RATING                                APRIL 30, 2003     OCTOBER 31, 2002
--------------------------------------------------------------------------------
AAA/Aaa                                            9%                 14%
--------------------------------------------------------------------------------
AA/Aa                                             12                   8
--------------------------------------------------------------------------------
A                                                 21                  21
--------------------------------------------------------------------------------
BBB/Baa                                           21                  13
--------------------------------------------------------------------------------
BB/Ba                                             16                  24
--------------------------------------------------------------------------------
B                                                 20                  20
--------------------------------------------------------------------------------
CCC/Caa                                            1                  --
--------------------------------------------------------------------------------

----------
*   Using the higher of S&P's, Moody's or Fitch's rating. Corporate bonds
    represented approximately 73.4% and 40.9% of net assets on April 30, 2003
    and October 31, 2002, respectively.




                                       5



TRUST SUMMARIES (unaudited)
APRIL 30, 2003

----------------------
BlackRock Income Trust
----------------------


                                TRUST INFORMATION
--------------------------------------------------------------------------------
Symbol on New York Stock Exchange:                                      BKT
--------------------------------------------------------------------------------
Initial Offering Date:                                             July 22, 1988
--------------------------------------------------------------------------------
Closing Market Price as of 4/30/03:                                    $8.07
--------------------------------------------------------------------------------
Net Asset Value as of 4/30/03:                                         $7.55
--------------------------------------------------------------------------------
Yield on Closing Market Price as of 4/30/03 ($8.07):(1)                 7.59%
--------------------------------------------------------------------------------
Current Monthly Distribution per Share:(2)                             $0.051042
--------------------------------------------------------------------------------
Current Annualized Distribution per Share:(2)                          $0.612504
--------------------------------------------------------------------------------

(1) Yield on closing market price is calculated by dividing the current
    annualized distribution per share by the closing market price.

(2) The distribution is not constant and is subject to change.


The table below summarizes the changes in the Trust's market price and NAV:

                ----------------------------------------------------------------
                    4/30/03      10/31/02     CHANGE         HIGH          LOW
--------------------------------------------------------------------------------
MARKET PRICE         $8.07         $8.07        --          $8.17         $7.80
--------------------------------------------------------------------------------
NAV                  $7.55         $8.13      (7.13)%       $8.09         $7.48
--------------------------------------------------------------------------------


The following chart shows the Trust's asset composition:

                                SECTOR BREAKDOWN
--------------------------------------------------------------------------------
COMPOSITION                                     APRIL 30, 2003  OCTOBER 31, 2002
--------------------------------------------------------------------------------
Mortgage Pass-Throughs                                43%              48%
--------------------------------------------------------------------------------
U.S. Government and Agency Securities                 20               16
--------------------------------------------------------------------------------
Principal Only Mortgage-Backed Securities             11                8
--------------------------------------------------------------------------------
Inverse Floating Rate Mortgages                        8                9
--------------------------------------------------------------------------------
Interest Only Mortgage-Backed Securities               8                8
--------------------------------------------------------------------------------
FHA Project Loans                                      4                5
--------------------------------------------------------------------------------
Agency Multiple Class Mortgage Pass-Throughs           2                2
--------------------------------------------------------------------------------
Commercial Mortgage-Backed Securities                  2                2
--------------------------------------------------------------------------------
Non-Agency Multiple Class Mortgage Pass-Throughs       1                1
--------------------------------------------------------------------------------
Adjustable Rate Mortgage Securities                   --                1
--------------------------------------------------------------------------------
Other                                                  1               --
--------------------------------------------------------------------------------




                                       6


TRUST SUMMARIES (unaudited)
APRIL 30, 2003

------------------------------
BlackRock Strategic Bond Trust
------------------------------


                                TRUST INFORMATION
--------------------------------------------------------------------------------
Symbol on New York Stock Exchange:                                    BHD
--------------------------------------------------------------------------------
Initial Offering Date:                                         February 26, 2002
--------------------------------------------------------------------------------
Closing Market Price as of 4/30/03:                                 $14.65
--------------------------------------------------------------------------------
Net Asset Value as of 4/30/03:                                      $14.27
--------------------------------------------------------------------------------
Yield on Closing Market Price as of 4/30/03 ($14.65):(1)              9.83%
--------------------------------------------------------------------------------
Current Monthly Distribution per Share:(2)                          $ 0.12
--------------------------------------------------------------------------------
Current Annualized Distribution per Share:(2)                       $ 1.44
--------------------------------------------------------------------------------

(1) Yield on closing market price is calculated by dividing the annualized
    distribution per share as of April 30, 2003 by the closing market price.

(2) Effective June 2, 2003, the monthly distribution per share has been changed
    to $0.13. The distribution is not constant and is subject to change.


The table below summarizes the changes in the Trust's market price and NAV:

                ----------------------------------------------------------------
                   4/30/03      10/31/02       CHANGE         HIGH          LOW
--------------------------------------------------------------------------------
MARKET PRICE        $14.65       $12.35        18.62%        $14.70       $12.41
--------------------------------------------------------------------------------
NAV                 $14.27       $12.63        12.98%        $14.27       $12.91
--------------------------------------------------------------------------------


The following chart shows the Trust's credit quality allocations:

--------------------------------------------------------------------------------
                             RATING % OF CORPORATES*
--------------------------------------------------------------------------------
CREDIT RATING                             APRIL 30, 2003        OCTOBER 31, 2002
--------------------------------------------------------------------------------
AAA/Aaa                                         1%                     1%
--------------------------------------------------------------------------------
AA/Aa                                           4                      6
--------------------------------------------------------------------------------
A                                              11                     10
--------------------------------------------------------------------------------
BBB/Baa                                        10                     12
--------------------------------------------------------------------------------
BB/Ba                                          27                     29
--------------------------------------------------------------------------------
B                                              44                     41
--------------------------------------------------------------------------------
CCC/Caa                                         2                     --
--------------------------------------------------------------------------------
Not Rated                                       1                      1
--------------------------------------------------------------------------------

----------
*   Using the higher of S&P's, Moody's or Fitch's rating. Corporate bonds
    represented approximately 142.0% and 143.4% of net assets on April 30, 2003
    and October 31, 2002, respectively.




                                       7



CONSOLIDATED PORTFOLIO OF INVESTMENTS (UNAUDITED)
APRIL 30, 2003

------------------------------------------------
BlackRock Broad Investment Grade 2009 Term Trust
------------------------------------------------



             PRINCIPAL
              AMOUNT
  RATING(1)    (000)                         DESCRIPTION                                                               VALUE
---------------------------------------------------------------------------------------------------------------------------------
                                                                                                           
                        LONG-TERM INVESTMENTS--130.8%
                        MORTGAGE PASS-THROUGHS--2.5%
                        Federal National Mortgage Assoc.,
              $1,085      5.50%, 1/01/17 - 2/01/17 ................................................................ $  1,129,219
                 108      6.50%, 7/01/29 ..........................................................................      112,965
                                                                                                                    ------------
                        Total Mortgage Pass-Throughs ..............................................................    1,242,184
                                                                                                                    ------------
                        AGENCY MULTIPLE CLASS MORTGAGE PASS-THROUGHS--17.6%
                        Federal Home Loan Mortgage Corp.,
               2,168      Ser. 1510, Class G, 5/15/13 .............................................................    2,438,068
                 400      Ser. 1534, Class IG, 2/15/10 ............................................................      417,860
                 253      Ser. 1601, Class SD, 10/15/08 ...........................................................      258,403
                        Federal National Mortgage Assoc.,
                 405      Ser. 13, Class SJ, 2/25/09 ..............................................................      420,193
                 180      Ser. 43, Class E, 4/25/22 ...............................................................      192,767
               1,000      Ser. 49, Class H, 4/25/13 ...............................................................    1,137,290
                  30      Ser. 69, Class Z, 1/25/22 ...............................................................       30,506
               3,146      Ser. 87, Class J, 4/25/22 ...............................................................    3,222,794
                 629      Ser. 214, Class SK, 12/25/08 ............................................................      721,506
                                                                                                                    ------------
                        Total Agency Multilple Class Mortgage Pass-Throughs .......................................    8,839,387
                                                                                                                    ------------
                        INVERSE FLOATING RATE MORTGAGES--17.2%
    AAA          462    Citicorp Mortgage Securities, Inc., Ser. 14, Class A-4, 11/25/23 ..........................      549,245
    AAA          550    Countrywide Funding Corp., Ser. 2, Class A-12S, 2/25/09 ...................................      574,923
    AAA          723    Countrywide Mortgage-Backed Securities, Inc., Ser. D, Class A-15, 1/25/09 .................      733,815
                        Federal Home Loan Mortgage Corp.,
                 336      Ser. 1425, Class SB, 12/15/07 ...........................................................      430,945
                 193      Ser. 1506, Class S, 5/15/08 .............................................................      221,905
                 255      Ser. 1515, Class S, 5/15/08 .............................................................      273,866
                  37      Ser. 1580, Class SD, 9/15/08 ............................................................       37,712
                 232      Ser. 1618, Class SA, 11/15/08 ...........................................................      240,370
                 395      Ser. 1621, Class SH, 11/15/22 ...........................................................      422,538
                 445      Ser. 1626, Class SA, 12/15/08 ...........................................................      447,634
                 329      Ser. 1661, Class SB, 1/15/09 ............................................................      355,204
                 481      Ser. 1688, Class S, 12/15/13 ............................................................      512,700
                        Federal National Mortgage Assoc.,
                   8      Ser. 156, Class SE, 10/25/19 ............................................................        7,683
                 528      Ser. 187, Class SB, 10/25/07 ............................................................      627,376
                 381      Ser. 190, Class S, 11/25/07 .............................................................      483,462
                 433      Ser. 191, Class SD, 10/25/08 ............................................................      515,306
                 354      Ser. 202, Class VB, 11/25/23 ............................................................      396,146
                 453      Ser. 214, Class SH, 12/25/08 ............................................................      502,420
    AAA          600    PaineWebber Mortgage Acceptance Corp., Ser. 6, Class A-9, 4/25/09 .........................      624,750
                        Residential Funding Mortgage Securities I, Inc.,
    AAA          323      Ser. S23, Class A-12, 6/25/08 ...........................................................      330,300
    AAA          334      Ser. S23, Class A-16, 6/25/08 ...........................................................      342,810
                                                                                                                    ------------
                        Total Inverse Floating Rate Mortgages .....................................................    8,631,110
                                                                                                                    ------------
                        INTEREST ONLY MORTGAGE-BACKED SECURITIES--9.2%
                            Federal Home Loan Mortgage Corp.,
                   3      Ser. 65, Class I, 8/15/20 ...............................................................       54,947
                   1      Ser. 141, Class H, 5/15/21 ..............................................................        2,384
                   4      Ser. 1114, Class J, 7/15/06 .............................................................       42,797
                   3      Ser. 1285, Class M, 5/15/07 .............................................................       31,441
               1,321      Ser. 1645, Class IB, 9/15/08 ............................................................      121,814
               1,465      Ser. 2063, Class PU, 10/15/26 ...........................................................       37,081
               3,177      Ser. 2081, Class S, 5/15/25 .............................................................       45,674
               1,889      Ser. 2306, Class PM, 5/15/26 ............................................................       47,232
               3,224      Ser. 2370, Class EI, 2/15/21 ............................................................       26,197
               5,308      Ser. 2376, Class MI, 7/15/11 ............................................................      106,168
               2,137      Ser. 2417, Class EI, 3/15/12 ............................................................       34,916
               1,728      Ser. 2462, Class NI, 8/15/21 ............................................................      196,608
               3,235      Ser. 2513, Class BI, 12/15/15 ...........................................................      256,747
               3,100      Ser. 2542, Class IY, 5/15/16 ............................................................      232,500




                       See Notes to Financial Statements.


                                       8





             PRINCIPAL
              AMOUNT
  RATING(1)    (000)                         DESCRIPTION                                                               VALUE
---------------------------------------------------------------------------------------------------------------------------------
                                                                                                           
                        INTEREST ONLY MORTGAGE-BACKED SECURITIES--(CONT'D)
             $ 2,688      Ser. 2543, Class IJ, 10/15/12 ........................................................... $    284,802
               4,000      Ser. 2543, Class IM, 9/15/12 ............................................................      425,792
               5,419      Ser. 2572, Class IT, 5/15/19 ............................................................      614,666
                        Federal National Mortgage Assoc.,
                   1      Ser. G-21, Class L, 7/25/21 .............................................................       21,967
                   9      Ser. 8, Class HA, 1/25/08 ...............................................................      130,225
               1,357      Ser. 9, Class IB, 5/25/27 ...............................................................       15,266
               2,117      Ser. 14, Class PI, 4/25/12 ..............................................................       23,822
                 918      Ser. 20, Class SL, 9/25/08 ..............................................................      168,121
               5,007      Ser. 22, Class SE, 11/25/23 .............................................................        9,261
                 517      Ser. 29, Class BE, 5/25/28 ..............................................................        4,771
                 597      Ser. 30, Class QG, 12/18/25 .............................................................        7,278
                 243      Ser. 39, Class PE, 1/25/23 ..............................................................       20,641
                 898      Ser. 42, Class SO, 3/25/23 ..............................................................       56,756
                  23      Ser. 49, Class L, 4/25/13 ...............................................................      197,653
                  23      Ser. 51, Class K, 4/25/07 ...............................................................      290,760
                   3      Ser. 72, Class H, 7/25/06 ...............................................................       37,991
               4,272      Ser. 80, Class PI, 9/25/23 ..............................................................      202,898
               2,000      Ser. 82, Class IR, 9/25/12 ..............................................................      231,250
               1,463      Ser. 90, Class M, 1/25/28 ...............................................................      242,557
                  15      Ser. 174, Class S, 9/25/22 ..............................................................       43,900
                 458      Ser. 194, Class PV, 6/25/08 .............................................................       34,603
               3,334      Ser. 208, Class S, 2/25/23 ..............................................................      162,512
                 508      Ser. 223, Class PT, 10/25/23 ............................................................       50,150
                 267    PNC Mortgage Securities Corp., Ser. 8, Class 4-X, 10/25/13 ................................        9,934
                 446    Residential Funding Mortgage Securities I, Inc., Ser. S44, Class A-4, 11/25/23 ............        3,412
               9,549    Structured Asset Securities Corp., Ser. ALS1, Class 3AX, 5/25/29 ..........................       25,364
              30,900    Vendee Mortgage Trust, Ser. 1, Class 1IO, 10/15/31 ........................................       62,766
                                                                                                                    ------------
                        Total Interest Only Mortgage-Backed Securities ............................................    4,615,624
                                                                                                                    ------------
                        PRINCIPAL ONLY MORTGAGE-BACKED SECURITIES--0.1%
    Aaa           66    Salomon Brothers Mortgage Securities Inc. VI, Ser. 3, Class A, 10/23/17 ...................       66,045
                                                                                                                    ------------
                        COMMERCIAL MORTGAGE-BACKED SECURITIES--1.7%
    AAA          750    New York City Mortgage Loan Trust, Multifamily, Ser. 1996, Class A-2, 6.75%, 6/25/11(2)....      853,693
                                                                                                                    ------------
                        ASSET-BACKED SECURITIES--0.1%
    NR           239    Global Rated Eligible Asset Trust, Ser. A, Class 1, 7.33%, 3/15/06(2,4,5) .................       10,745
                        Structured Mortgage Asset Residential Trust,(4,5,6)
    NR           578      Ser. 2, 8.24%, 3/15/06 ..................................................................       17,331
    NR           640      Ser. 3, 8.724%, 4/15/06 .................................................................       19,212
                                                                                                                    ------------
                        Total Asset-Backed Securities .............................................................       47,288
                                                                                                                    ------------
                        U.S. GOVERNMENT AND AGENCY SECURITIES--64.0%
                 240    Small Business Investment Companies, Ser. P10A-1, 6.12%, 2/01/08 ..........................      253,549
             27,0003    U.S. Treasury Bond, Zero Coupon, 11/15/09 .................................................   21,190,248
                        U.S. Treasury Notes,
               1,450      3.50%, 11/15/06 .........................................................................    1,511,512
              5,4253      4.375%, 8/15/12 .........................................................................    5,664,253
                 500      5.00%, 8/15/11 ..........................................................................      547,500
               1,700      5.75%, 11/15/05 .........................................................................    1,868,339
                 550      6.00%, 8/15/09 ..........................................................................      636,668
                 385      6.625%, 5/15/07 .........................................................................      446,299
                                                                                                                    ------------
                        Total U.S. Government and Agency Securities ...............................................   32,118,368
                                                                                                                    ------------
                        CORPORATE BONDS--11.4%
                        CHEMICAL--2.4%
    A-         1,000    Dow Capital BV, 9.20%, 6/01/10 ............................................................    1,223,950
                                                                                                                    ------------
                        CONSUMER PRODUCTS--1.1%
   BBB+          500    Ralcorp Holdings, Inc., 8.75%, 9/15/04 ....................................................      545,715
                                                                                                                    ------------
                        ENERGY--2.2%
    A            500    Alltel Corp., 7.50%, 3/01/06 ..............................................................      565,540
   BBB+          500    Israel Electric Corp., Ltd., 7.25%, 12/15/06 (Israel)(2)...................................      538,965
                                                                                                                    ------------
                                                                                                                       1,104,505
                                                                                                                    ------------
                        FINANCE & BANKING--4.6%
    A+           500    Metropolitan Life Insurance Co., 6.30%, 11/01/03(2)........................................      512,111
    AA-       1,0003    Morgan Stanley Group, Inc., 10.00%, 6/15/08 ...............................................    1,257,350
    AAA          500    UBS PaineWebber Group, Inc., 8.875%, 3/15/05 ..............................................      560,000
                                                                                                                    ------------
                                                                                                                       2,329,461
                                                                                                                    ------------




                       See Notes to Financial Statements.


                                       9





             PRINCIPAL
              AMOUNT
  RATING(1)    (000)                         DESCRIPTION                                                               VALUE
---------------------------------------------------------------------------------------------------------------------------------
                                                                                                           
                        TRANSPORTATION--0.1%
   Caa2       $  100    American Airlines, Inc., 10.44%, 3/04/07 .................................................. $     31,500
                                                                                                                    ------------
                        UTILITIES--1.0%
   BBB+          500    Ohio Edison Co., 8.625%, 9/15/03 ..........................................................      512,769
                                                                                                                    ------------
                        Total Corporate Bonds .....................................................................    5,747,900
                                                                                                                    ------------
                        TAXABLE MUNICIPAL BONDS--7.0%
    AAA          500    Fresno California Pension Obligation, 7.80%, 6/01/14 ......................................      619,075
    AAA          500    Kern County California Pension Obligation, 6.98%, 8/15/09 .................................      584,340
                        Los Angeles County California Pension Obligation,
    AAA        1,000      Ser. A, 8.62%, 6/30/06 ..................................................................    1,176,380
    AAA          500      Ser. D, 6.97%, 6/30/08 ..................................................................      582,185
    AAA          500    Orleans Parish Louisiana School Board, Ser. A, 6.60%, 2/01/08 .............................      562,600
                                                                                                                    ------------
                        Total Taxable Municipal Bonds .............................................................    3,524,580
                                                                                                                    ------------
                        Total Long-Term Investments (cost $64,689,325) ............................................   65,686,179
                                                                                                                    ------------
                        SHORT-TERM INVESTMENT--3.6%
                        DISCOUNT NOTE--3.6%
               1,800    Federal Home Loan Bank, 1.25%, 5/01/03 (cost $1,800,000) ..................................    1,800,000
                                                                                                                    ------------
                        TOTAL INVESTMENTS--134.4% (cost $66,489,325) ..............................................   67,486,179
                        LIABILITIES IN EXCESS OF OTHER ASSETS--(34.4)%
                        (17,288,606)
                        NET ASSETS--100% .......................................................................... $ 50,197,573
                                                                                                                    ------------


----------
(1) Using the higher of S&P's, Moody's or Fitch's rating.

(2) Security is not registered under the Securities Act of 1933. These
    securities may be resold in transactions in accordance with Rule 144A under
    that Act, to qualified institutional buyers. As of April 30, 2003, the Trust
    held 3.8% of its net assets, with a current market value of $1,915,514, in
    securities restricted as to resale.

(3) Entire or partial principal amount pledged as collateral for reverse
    repurchase agreements or financial futures contracts.

(4) Security is fair valued.

(5) Illiquid securities representing 0.09% of net assets.

(6) Security is restricted as to public resale. The security was acquired in
    1997 and has a current cost of $105,042.









                       See Notes to Financial Statements.


                                       10



PORTFOLIO OF INVESTMENTS (UNAUDITED)
APRIL 30, 2003

-------------------------
BlackRock Core Bond Trust
-------------------------



             PRINCIPAL
              AMOUNT
  RATING(1)    (000)                         DESCRIPTION                                                               VALUE
---------------------------------------------------------------------------------------------------------------------------------
                                                                                                           
                        LONG-TERM INVESTMENTS--142.6%
                        MORTGAGE PASS-THROUGHS--37.1%
                        Federal Home Loan Mortgage Corp.,
             $   252      7.00%, 9/01/31 .......................................................................... $    266,404
               7,500      5.50%, TBA ..............................................................................    7,710,352
              44,000      6.00%, TBA ..............................................................................   46,021,250
              57,800      6.50%, TBA ..............................................................................   60,355,847
                        Federal National Mortgage Assoc., TBA
               8,000      5.00% ...................................................................................    8,245,000
              12,600      5.50% ...................................................................................   13,039,625
               5,900      6.00% ...................................................................................    6,141,578
               2,000      7.00% ...................................................................................    2,113,750
               9,200    Government National Mortgage Assoc., 5.50%, TBA ...........................................    9,496,125
                                                                                                                    ------------
                        Total Mortgage Pass-Throughs ..............................................................  153,389,931
                                                                                                                    ------------
                        INTEREST ONLY MORTGAGE-BACKED SECURITIES--2.8%
                        Federal Home Loan Mortgage Corp.,
              10,167      Ser. 2471, Class UI, 1/15/26 ............................................................      767,078
              33,102      Ser. 2496, Class ID, 9/15/26 ............................................................    2,953,277
               8,918      Ser. 2553, Class IT, 10/15/22 ...........................................................    1,323,741
               6,467      Ser. 2579, Class HI, 8/15/17 ............................................................      824,586
                        Federal National Mortgage Assoc.,
               9,700      Ser. 16, Class IW, 11/25/12 .............................................................      982,125
               6,100      Ser. 70, Class IN, 5/25/15 ..............................................................      808,250
               3,685    Residential Funding Mortgage Securities I, Inc., Ser. S6, Class A6, 4/25/17 ...............    3,758,700
                                                                                                                    ------------
                        Total Interest Only Mortgage-Backed Securities ............................................   11,417,757
                                                                                                                    ------------
                        COMMERCIAL MORTGAGE-BACKED SECURITIES--4.7%
    AAA        2,560    Capco America Securitization Corp., Ser. D7, Class A1B, 6.26%, 10/15/30 ...................    2,875,878
   Caa1        1,099    Citicorp Mortgage Securities, Inc., Ser. 8, Class B1, 6.50%, 7/25/08 ......................    1,044,335
    AAA        1,900    GMAC Commercial Mortgage Securities, Inc., Ser. C2, Class A2, 6.945%, 9/15/33 .............    2,185,000
    AAA        1,677    Heller Financial Commercial Mortgage Asset Co., Ser. PH1, Class A2, 6.847%, 5/15/31 .......    1,929,858
                        Morgan Stanley Capital I, Inc.,
    AAA        2,125    Ser. FNV1, Class A2, 6.53%, 3/15/31 .......................................................    2,413,702
    AAA        1,470      Ser. HF2, Class A2, 6.48%, 11/15/30 .....................................................    1,651,264
                        Residential Funding Mortgage Securities I, Inc.,
    AAA        1,843      Ser. S6, Class A7, 6.00%, 4/25/17 .......................................................    1,885,669
    AAA        4,621      Ser. S29, Class A6, 6.50%, 12/26/31 .....................................................      306,139
    AAA        3,500    Salomon Brothers Mortgage Securities VII, Ser. C1, Class A2, 7.52%, 12/18/09 ..............    4,145,859
    AAA        1,043    Washington Mutual Mortgage Securitization Corp., Ser. 12, Class A, 6.50%, 5/25/32 .........    1,070,715
                                                                                                                    ------------
                        Total Commercial Mortgage-Backed Securities ...............................................   19,508,419
                                                                                                                    ------------
                        U.S. GOVERNMENT AND AGENCY SECURITIES--17.1%
               1,050    Resolution Funding Corp., Zero Coupon, 7/15/18 - 10/15/18 .................................      472,008
               9,950(2) U.S. Treasury Bond, Zero Coupon, 11/15/21 .................................................    3,820,760
                        U.S. Treasury Bonds,
               9,060(2)   3.875%, 2/15/13 .........................................................................    9,072,032
              10,390(2)   5.375%, 2/15/31 .........................................................................   11,337,277
               7,325(2)   6.00%, 2/15/26 ..........................................................................    8,461,518
               5,215      6.75%, 8/15/26 ..........................................................................    6,572,527
               6,865(2)   8.125%, 8/15/19 .........................................................................    9,629,233
                 285      8.50%, 2/15/20 ..........................................................................      413,561
               5,310(2)   10.375%, 11/15/12 .......................................................................    7,035,750
               3,330      12.00%, 8/15/13 .........................................................................    4,800,401
                        U.S. Treasury Notes,
               1,590(2)   1.625%, 1/31/05 .........................................................................    1,596,025
               2,005      3.00%, 2/15/08 ..........................................................................    2,025,676
               1,515(2)   4.00%, 11/15/12 .........................................................................    1,534,351
               3,445(2)   5.00%, 8/15/11 ..........................................................................    3,772,275
                                                                                                                    ------------
                        Total U.S. Government and Agency Securities ...............................................   70,543,394
                                                                                                                    ------------




                       See Notes to Financial Statements.


                                       11





             PRINCIPAL
              AMOUNT
  RATING(1)    (000)                         DESCRIPTION                                                               VALUE
---------------------------------------------------------------------------------------------------------------------------------
                                                                                                           
                        CORPORATE BONDS--67.8%
                        AEROSPACE & DEFENSE--2.1%
    B-       $ 3,000    BE Aerospace, Inc., Ser. B, 8.00%, 3/01/08 ................................................ $  1,950,000
                        Lockheed Martin Corp.,
   BBB+        1,485      7.20%, 5/01/36 ..........................................................................    1,741,255
   BBB+        1,000      7.25%, 5/15/06 ..........................................................................    1,126,750
   BBB+        1,275      7.75%, 5/01/26 ..........................................................................    1,560,588
   BBB+          475      8.50%, 12/01/29 .........................................................................      621,211
                        Northrop Grumman Corp.,
   BBB-          380      7.125%, 2/15/11 .........................................................................      444,560
   BBB-          250      7.75%, 2/15/31 ..........................................................................      311,572
   BBB-        1,000    Raytheon Co., 6.55%, 3/15/10 ..............................................................    1,106,210
                                                                                                                    ------------
                                                                                                                       8,862,146
                                                                                                                    ------------
                        AUTOMOTIVE--2.7%
    B1         3,000    Collins & Aikman Products Co., 10.75%, 12/31/11 ...........................................    3,135,000
     B         2,000    CSK Auto, Inc., 12.00%, 6/15/06 ...........................................................    2,170,000
    A3           940    DaimlerChrysler NA Holding Corp., 4.75%, 1/15/08 ..........................................      967,298
    B3         3,000    Delco Remy Intl., Inc., 11.00%, 5/01/09 ...................................................    1,590,000
    B+         2,000    Sonic Automotive, Inc., Ser. D, 11.00%, 8/01/08 ...........................................    2,130,000
    B+         1,000    TRW Automotive, Inc., 9.375%, 2/15/13(3) ..................................................    1,090,000
                                                                                                                    ------------
                                                                                                                      11,082,298
                                                                                                                    ------------
                        BASIC MATERIAL--0.5%
    B+         2,000    Oregon Steel Mills, Inc., 10.00%, 7/15/09 .................................................    1,980,000
                                                                                                                    ------------
                        BUILDING & DEVELOPMENT--1.4%
    B-         2,000    Ainsworth Lumber Co. Ltd., 12.50%, 7/15/07 (Canada) .......................................    2,200,000
    BB         3,000    Hovnanian Enterprises, Inc., 10.50%, 10/01/07 .............................................    3,390,000
                                                                                                                    ------------
                                                                                                                       5,590,000
                                                                                                                    ------------
                        CHEMICAL--3.3%
    B-         3,000    Avecia Group PLC, 11.00%, 7/01/09 (United Kingdom) ........................................    2,670,000
                        Dow Chemical Co.,
    A-         1,650      5.97%, 1/15/09 ..........................................................................    1,713,887
    A-         1,460      7.375%, 11/01/29 ........................................................................    1,624,443
    A-           175      6.00%, 10/01/12 .........................................................................      185,500
    BB         4,000    Lyondell Chemical Co., Ser. B, 9.875%, 5/01/07 ............................................    4,100,000
    B-         3,000    Resolution Performance Products, Inc., 13.50%, 11/15/10 ...................................    3,210,000
                                                                                                                    ------------
                                                                                                                      13,503,830
                                                                                                                    ------------
                        CONGLOMERATES--1.3%
    AAA        1,980    General Electric Co., 5.00%, 2/01/13 ......................................................    2,045,777
     A           225    Honeywell Intl., Inc., 6.875%, 10/03/05 ...................................................      244,040
                        Tyco Intl. Group SA, (Luxembourg)
   BBB-          930      5.80%, 8/01/06 ..........................................................................      920,700
   BBB-        2,239      6.375%, 2/15/06 .........................................................................    2,227,805
                                                                                                                    ------------
                                                                                                                       5,438,322
                                                                                                                    ------------
                        CONSUMER PRODUCTS--5.6%
    BB+        3,000    American Greetings Corp., 11.75%, 7/15/08 .................................................    3,435,000
     A         1,025    Avery Dennison Corp., 4.875%, 1/15/13 .....................................................    1,044,209
     B         3,000    Elizabeth Arden, Inc., Ser. B, 11.75%, 2/01/11 ............................................    3,300,000
                        General Mills, Inc.,
   BBB+          510      5.125%, 2/15/07 .........................................................................      545,371
   BBB+        1,765      6.00%, 2/15/12 ..........................................................................    1,946,453
                        Kellogg Co., Ser. B,
    BBB          725      6.00%, 4/01/06 ..........................................................................      792,227
    BBB          690      6.60%, 4/01/11 ..........................................................................      785,458
                        Kraft Foods, Inc.,
    A3           400      5.25%, 6/01/07 ..........................................................................      420,386
    A3         3,050      5.625%, 11/01/11 ........................................................................    3,195,136
    A3           275      6.25%, 6/01/12 ..........................................................................      299,360
                        Kroger Co.,
    BBB          650      6.80%, 4/01/11 ..........................................................................      724,672
    BBB          550      Ser. B, 7.70%, 6/01/29 ..................................................................      627,754
    BB-        3,000    Levi Strauss & Co., 12.25%, 12/15/12(3) ...................................................    2,520,000
    B2         3,000    National Wine & Spirits, Inc., 10.125%, 1/15/09 ...........................................    2,730,000
    B-         1,000    Pantry, Inc., The, 10.25%, 10/15/07 .......................................................      995,000
                                                                                                                    ------------
                                                                                                                      23,361,026
                                                                                                                    ------------





                       See Notes to Financial Statements.


                                       12





             PRINCIPAL
              AMOUNT
  RATING(1)    (000)                         DESCRIPTION                                                               VALUE
---------------------------------------------------------------------------------------------------------------------------------
                                                                                                           
                        CONTAINERS & GLASS--0.6%
     B       $ 1,000    Crown European Holdings SA, 10.875%, 3/01/13 (France)(3) .................................. $  1,050,000
    BB         1,500    Owens-Brockway Glass Container, Inc., 8.75%, 11/15/12 .....................................    1,575,000
                                                                                                                    ------------
                                                                                                                       2,625,000
                                                                                                                    ------------
                        ECOLOGICAL SERVICES & EQUIPMENT--1.3%
    B+         5,000    Allied Waste NA, Inc., Ser. B, 10.00%, 8/01/09 ............................................    5,337,500
                                                                                                                    ------------
                        ELECTRONICS--1.2%
    B+         2,000    FIMEP SA, 10.50%, 2/15/13 (France)(3) .....................................................    2,190,000
   CCC-        2,500    Knowles Electronics Holdings, Inc., 13.125%, 10/15/09 .....................................    1,825,000
     B         1,000    Stoneridge, Inc., 11.50%, 5/01/12 .........................................................    1,090,000
                                                                                                                    ------------
                                                                                                                       5,105,000
                                                                                                                    ------------
                        ENERGY--7.8%
                        Amerada Hess Corp.,
    BBB          625      7.125%, 3/15/33 .........................................................................      673,530
    BBB          350      7.30%, 8/15/31 ..........................................................................      389,405
    BBB+         765(2) Anadarko Petroleum Corp., 5.375%, 3/01/07 .................................................      822,699
    B2         3,500    Baytex Energy Ltd., 10.50%, 2/15/11 (Canada) ..............................................    3,832,500
    B+         1,000    Calpine Canada Energy Finance ULC, 8.50%, 5/01/08 (Canada) ................................      740,000
    BB-        1,250    Chesapeake Energy Corp., 9.00%, 8/15/12 ...................................................    1,393,750
    BB         1,000    Compagnie Generale De Geophysique SA, 10.625%, 11/15/07 (France) ..........................    1,000,000
    A-         1,000    Conoco Funding Co., 5.45%, 10/15/06 (Canada) ..............................................    1,092,175
    A-         1,220    Conoco, Inc., 6.95%, 4/15/29 ..............................................................    1,419,776
    A-           950    ConocoPhillips, 5.90%, 10/15/32 ...........................................................      971,005
    BBB          550    Devon Energy, Corp., 7.95%, 4/15/32 .......................................................      689,279
    BBB          140    Devon Financing Corp. ULC, 7.875%, 9/30/31 ................................................      173,785
   BBB+        1,500    Dominion Resources, Inc., Ser. E, 6.75%, 12/15/32 .........................................    1,632,744
     B         3,000    Dresser, Inc., 9.375%, 4/15/11 ............................................................    3,120,000
                        DTE Energy Co.,
    BBB          250      6.00%, 6/01/04 ..........................................................................      260,650
    BBB          660      6.45%, 6/01/06 ..........................................................................      725,226
    A-         1,165    Duke Energy Corp., 5.625%, 11/30/12 .......................................................    1,219,198
    B+           265    El Paso Natural Gas Co., 8.375%, 6/15/32(3) ...............................................      238,500
   BBB+          805    Exelon Corp., 6.75%, 5/01/11 ..............................................................      914,420
   Baa2          530    FirstEnergy Corp., Ser. C, 7.375%, 11/15/31 ...............................................      580,275
    A1         1,520    Florida Power Corp., 4.80%, 3/01/13 .......................................................    1,537,693
                        Kinder Morgan Energy Partners LP,
   BBB+          870      7.30%, 8/15/33 ..........................................................................    1,028,775
   BBB+          185      7.75%, 3/15/32 ..........................................................................      226,840
    BBB          930    Kinder Morgan, Inc., 7.25%, 3/01/28 .......................................................      992,874
    BB-        2,000    Leviathan Gas Pipeline Partners LP, Ser. B, 10.375%, 6/01/09 ..............................    2,165,000
   BBB+          360    Occidental Petroleum Corp., 7.20%, 4/01/28 ................................................      421,829
   BBB+          350    Oncor Electric Delivery Co., 7.25%, 1/15/33(3) ............................................      392,711
   Baa1        1,650    Petroleos Mexicanos, 9.375%, 12/02/08 (Mexico) ............................................    1,963,500
    BBB          110    Progress Energy, Inc., 5.85%, 10/30/08 ....................................................      119,735
    A-           500    Texas Eastern Transmission LP, 7.00%, 7/15/32 .............................................      560,952
    A3           725    Virginia Electric & Power Co., Ser. A, 5.75%, 3/31/06 .....................................      790,672
                                                                                                                    ------------
                                                                                                                      32,089,498
                                                                                                                    ------------
                        FINANCE & BANKING--14.3%
    AA+        1,000 2  American General Instl. Capital A, 7.57%, 12/01/45(3) .....................................    1,234,965
    AAA        1,550 2  Asif Global Financing XVIII, 3.85%, 11/26/07(3) ...........................................    1,576,118
                        Bank of America Corp.,
    Aa3          150      7.40%, 1/15/11 ..........................................................................      177,702
    Aa3          640      7.80%, 2/15/10 ..........................................................................      770,536
    Aa2          325    Bank One NA, 3.70%, 1/15/08 ...............................................................      331,991
    Aa3          800    Barclays Bank PLC, 6.86%, 9/29/49 (United Kingdom)(3) .....................................      884,608
                        Citigroup, Inc.,
    AA+        1,060      5.75%, 5/10/06 ..........................................................................    1,157,711
    AA         1,700      5.875%, 2/22/33 .........................................................................    1,747,194
    AA         2,465      7.25%, 10/01/10 .........................................................................    2,916,963
    Aa3          290    Credit Suisse First Boston USA, Inc., 6.125%, 11/15/11 ....................................      313,906
                        Federal Home Loan Mortgage Corp.,
    AAA        1,875      3.50%, 4/01/08 ..........................................................................    1,889,887
    AAA        3,370      4.875%, 3/15/07 .........................................................................    3,651,159
    AAA        3,515      7.00%, 3/15/10 ..........................................................................    4,229,986





                       See Notes to Financial Statements.


                                       13





             PRINCIPAL
              AMOUNT
  RATING(1)    (000)                         DESCRIPTION                                                               VALUE
---------------------------------------------------------------------------------------------------------------------------------
                                                                                                           
                        FINANCE & BANKING--(CONT'D)
                        Federal National Mortgage Assoc.,
    AAA      $ 1,450      5.00%, 1/15/07 .......................................................................... $  1,576,237
    AAA        6,630(2)   6.00%, 5/15/08 - 5/15/11 ................................................................    7,554,626
    AAA          635      7.25%, 1/15/10 ..........................................................................      771,385
    A1           610    FleetBoston Financial Corp., Ser. T, 4.20%, 11/30/07 ......................................      627,451
                        Ford Motor Credit Co.,
    A3         3,355      7.375%, 10/28/09 - 2/01/11 ..............................................................    3,427,893
    A3           505      7.875%, 6/15/10 .........................................................................      520,760
                        General Electric Capital Corp., Ser. A,
    AAA          620      5.875%, 2/15/12 .........................................................................      680,591
    AAA        2,775      6.00%, 6/15/12 ..........................................................................    3,052,347
    AAA          580      6.125%, 2/22/11 .........................................................................      647,396
                        General Motors Acceptance Corp.,
    A2         2,969      6.875%, 9/15/11 .........................................................................    3,001,011
    A2         1,130      8.00%, 11/01/31 .........................................................................    1,158,189
                        Goldman Sachs Group, Inc.,
    Aa3          370      6.125%, 2/15/33 .........................................................................      381,174
    AA-          355      6.60%, 1/15/12 ..........................................................................      401,161
    AA-          190      6.875%, 1/15/11 .........................................................................      217,729
    AA-          135      7.35%, 10/01/09 .........................................................................      158,868
     A         1,760    Household Finance Corp., 6.375%, 8/01/10 - 11/27/12 .......................................    1,934,278
    Aa2        1,750    ING Bank NV, 5.125%, 5/01/15 (Netherlands)(3) .............................................    1,769,010
    A-           550    John Deere Capital Corp., 5.10%, 1/15/13 ..................................................      564,485
     A         1,155    JP Morgan Chase & Co., 6.75%, 2/01/11 .....................................................    1,312,632
                        Lehman Brothers Holdings, Inc.,
     A           295      4.00%, 1/22/08 ..........................................................................      300,962
    A+           810      6.25%, 5/15/06 ..........................................................................      887,502
                        MetLife, Inc.,
     A           300      6.125%, 12/01/11 ........................................................................      334,547
     A         1,175      6.50%, 12/15/32 .........................................................................    1,264,961
                        Morgan Stanley,
    Aa3          130      5.30%, 3/01/13 ..........................................................................      133,609
    AA-          285      6.75%, 4/15/11 ..........................................................................      323,756
    A+         1,000    Prudential Funding LLC, 6.60%, 5/15/08(3) .................................................    1,104,853
                        Sears Roebuck Acceptance Corp.,
   BBB+          725      6.75%, 8/15/11 ..........................................................................      740,898
   BBB+          960      7.00%, 6/01/32 ..........................................................................      973,824
    AAA        1,875    Tiaa Global Markets, Inc., 3.875%, 1/22/08(3) .............................................    1,995,000
    Aa3          610    U.S. Bancorp, Ser. N, 3.95%, 8/23/07 ......................................................      627,932
                                                                                                                    ------------
                                                                                                                      59,327,793
                                                                                                                    ------------
                        FOREST PRODUCTS--1.9%
    Ba2        3,425    Caraustar Industries, Inc., 9.875%, 4/01/11 ...............................................    3,527,750
    BBB          725    International Paper Co., 5.30%, 4/01/15(3) ................................................      729,207
                        Weyerhaeuser Co.,
    BBB          160      6.00%, 8/01/06 ..........................................................................      170,826
    BBB          400      6.125%, 3/15/07 .........................................................................      436,237
    BBB          900      6.875%, 12/15/33 ........................................................................      964,908
    BBB        1,060      6.95%, 10/01/27 .........................................................................    1,104,637
    BBB          745      7.375%, 3/15/32 .........................................................................      841,180
                                                                                                                    ------------
                                                                                                                       7,774,745
                                                                                                                    ------------
                        HEALTH CARE--2.0%
    AA           425    Bristol-Myers Squibb Co., 4.75%, 10/01/06 .................................................      449,438
    B-         3,000    Hanger Orthopedic Group, Inc., 11.25%, 6/15/09 ............................................    3,247,500
   Caa2        2,000    HealthSouth Corp., 7.625%, 6/01/12 ........................................................    1,290,000
    AAA          500    Pharmacia Corp., 6.50%, 12/01/18 ..........................................................      582,500
    B-         2,000    United Surgical Partners Intl., Inc., 10.00%, 12/15/11 ....................................    2,120,000
    A-           525    Wellpoint Health Networks, Inc., 6.375%, 6/15/06 ..........................................      576,337
                                                                                                                    ------------
                                                                                                                       8,265,775
                                                                                                                    ------------
                        HOTELS & CASINO--1.2%
    B+         1,000    Circus & Eldorado Joint Venture, 10.125%, 3/01/12 .........................................      945,000
    Ba3        3,000    HMH Properties, Inc., Ser. A, 7.875%, 8/01/05 .............................................    3,030,000
     B         1,000    Resorts Intl. Hotel & Casino, Inc., 11.50%, 3/15/09 .......................................      870,000
                                                                                                                    ------------
                                                                                                                       4,845,000
                                                                                                                    ------------





                       See Notes to Financial Statements.


                                       14





             PRINCIPAL
              AMOUNT
  RATING(1)    (000)                         DESCRIPTION                                                               VALUE
---------------------------------------------------------------------------------------------------------------------------------
                                                                                                           
                        INDUSTRIAL EQUIPMENT--1.2%
     B       $ 3,000    Terex Corp., 9.25%, 7/15/11 ............................................................... $  3,195,000
    B+         2,000    United Rentals, Inc., Ser. B, 9.25%, 1/15/09 ..............................................    1,910,000
                                                                                                                    ------------
                                                                                                                       5,105,000
                                                                                                                    ------------
                        LEISURE--0.7%
    BB+        3,000    Royal Caribbean Cruises Ltd., 8.125%, 7/28/04 (Liberia) ...................................    3,075,000
                                                                                                                    ------------
                        MEDIA--5.8%
    B1         4,000    Alliance Atlantis Communications, Inc., 13.00%, 12/15/09 (Canada) .........................    4,560,000
                        AOL Time Warner, Inc.,
   BBB+           80      6.125%, 4/15/06 .........................................................................       86,489
   BBB+          525      7.625%, 4/15/31 .........................................................................      573,246
   CCC-        4,000    Charter Communications Holdings LLC, 10.75%, 10/01/09 .....................................    2,660,000
                        Comcast Cable Communications, Inc.,
    BBB          450      6.75%, 1/30/11 ..........................................................................      482,203
    BBB        1,050      6.875%, 6/15/09 .........................................................................    1,160,250
    BBB        4,175    Comcast Corp., 5.50%, 3/15/11 .............................................................    4,303,173
    BB-        4,000    EchoStar DBS Corp., 10.375%, 10/01/07 .....................................................    4,480,000
                        Time Warner, Inc.,
   BBB+           90      6.625%, 5/15/29 .........................................................................       88,566
   BBB+          260      6.875%, 6/15/18 .........................................................................      278,284
   BBB+        4,380      7.57%, 2/01/24 ..........................................................................    4,710,658
   BBB+          360    Turner Broadcasting Systems, Inc., 8.375%, 7/01/13 ........................................      419,850
                                                                                                                    ------------
                                                                                                                      23,802,719
                                                                                                                    ------------
                        REAL ESTATE--0.9%
   BBB+          775    AvalonBay Communities, Inc., 8.25%, 7/15/08 ...............................................      928,270
                        ERP Operating LP,
    A-         1,950      5.20%, 4/01/13 ..........................................................................    1,976,715
    A-           825      6.95%, 3/02/11 ..........................................................................      919,543
                                                                                                                    ------------
                                                                                                                       3,824,528
                                                                                                                    ------------
                        TELECOMMUNICATION--4.6%
   AA-           170    Ameritech Capital Funding Corp., 6.45%, 1/15/18 ...........................................      176,038
   BBB+        1,320    AT&T Corp., 8.50%, 11/15/31 ...............................................................    1,438,800
    A-         1,000    British Telecommunications PLC, 8.875%, 12/15/30 (United Kingdom) .........................    1,321,947
   BBB+        1,060    Deutsche Telekom Intl. Finance BV, 8.50%, 6/15/10 (Netherlands) ...........................    1,294,472
                        Nextel Communications, Inc.,
    B+         2,000      9.375%, 11/15/09 ........................................................................    2,150,000
    B+         3,000      9.50%, 2/01/11 ..........................................................................    3,255,000
   CCC+        3,000    Rural Cellular Corp., Ser. B, 9.625%, 5/15/08 .............................................    2,550,000
    AA-        2,030    SBC Communications, Inc., 6.25%, 3/15/11 ..................................................    2,277,115
    A+           805    Verizon Global Funding Corp., 7.75%, 12/01/30 - 6/15/32 ...................................      994,973
    AA           375    Verizon Maryland, Inc., 6.125%, 3/01/12 ...................................................      408,143
    AA         1,750    Verizon New Jersey, Inc., Ser. A, 5.875%, 1/17/12 .........................................    1,899,800
    Aa3          790    Verizon Pennsylvania, Inc., Ser. A, 5.65%, 11/15/11 .......................................      827,953
     A           350    Vodafone Group PLC, 6.25%, 11/30/32 (United Kingdom) ......................................      371,000
                                                                                                                    ------------
                                                                                                                      18,965,241
                                                                                                                    ------------
                        TRANSPORTATION--2.0%
   BBB-          362    American Airlines, Inc., Ser. 1, 6.855%, 10/15/10 .........................................      300,184
   BBB+        1,400    Burlington Northern Santa Fe Corp., 5.90%, 7/01/12 ........................................    1,522,080
   BBB+        1,410    Canadian National Railway Co., 6.90%, 7/15/28 (Canada) ....................................    1,626,717
    BBB        1,450    Canadian Pacific Railway Ltd., 6.25%, 10/15/11 (Canada) ...................................    1,615,724
    A-           636    Continental Airlines, Inc., Ser. A, 6.545%, 2/02/19 .......................................      540,487
   Baa1          375    Norfolk Southern Corp., 7.05%, 5/01/37 ....................................................      432,440
     B         2,000    Pacer Intl., Inc., Ser. B, 11.75%, 6/01/07 ................................................    2,120,000
                                                                                                                    ------------
                                                                                                                       8,157,632
                                                                                                                    ------------
                        OTHER--5.4%
    A-        20,300    Traded Custody Receipts, Floating Coupon, 9/15/11(3) ......................................   22,309,700
                                                                                                                    ------------
                        TOTAL CORPORATE BONDS .....................................................................  280,427,753
                                                                                                                    ------------
                        TAXABLE MUNICIPAL BONDS--1.4%
                        California Dept. of Wtr. Res. Pwr. Sply.,
    A-         5,000      3.585%, 5/01/04 .........................................................................    5,070,800
    A-           650      3.975%, 5/01/05 .........................................................................      663,280
                                                                                                                    ------------
                        Total Taxable Municipal Bonds .............................................................    5,734,080
                                                                                                                    ------------





                       See Notes to Financial Statements.


                                       15





             PRINCIPAL
              AMOUNT
  RATING(1)    (000)                         DESCRIPTION                                                               VALUE
---------------------------------------------------------------------------------------------------------------------------------
                                                                                                           
                        FOREIGN GOVERNMENT BONDS--11.8%
    Aaa      $19,503    Bundesobligation, 4.50%, 8/17/07 (Germany) ................................................ $ 22,956,677
                        Canada Government (Canada)
    AAA        7,545      4.50%, 9/01/07 ..........................................................................    5,324,644
    AAA       12,790      5.25%, 6/01/12 ..........................................................................    9,137,626
                        Kingdom of Sweden (Sweden)
    Aaa       17,740      5.00%, 1/28/09 ..........................................................................    2,253,241
    Aaa       22,455      8.00%, 8/15/07 ..........................................................................    3,174,419
                        United Mexican States (Mexico)
   Baa2          350      4.625%, 10/08/08 ........................................................................      354,725
   Baa2       24,000      6.625%, 3/03/15 .........................................................................    4,174,000
   Baa2        1,225      8.30%, 8/15/31 ..........................................................................    1,386,081
                                                                                                                    ------------
                        Total Foreign Government Bonds ............................................................   48,761,413
                                                                                                                    ------------
                        Total Long-Term Investments (cost $572,125,325) ...........................................  589,782,747
                                                                                                                    ------------

                        SHORT-TERM INVESTMENTS--3.6%
                        U.S. GOVERNMENT SECURITIES--1.2%
                        U.S. Treasury Bills,
               4,000      1.09%, 7/31/03 - 8/07/03 ................................................................    3,988,470
                 200      1.115%, 5/22/03 .........................................................................      199,870
                 500      1.155%, 5/01/03 .........................................................................      500,000
                                                                                                                    ------------
                        Total U.S. Government Securities ..........................................................    4,688,340
                                                                                                                    ------------
                        DISCOUNT NOTES--2.4%
               9,200    Federal Home Loan Bank, 1.25%, 5/01/03 ....................................................    9,200,000
                 800    Federal Home Loan Mortgage Corp., Ser. RB, 1.14%, 7/03/03 .................................      798,404
                                                                                                                    ------------
                        Total Discount Notes ......................................................................    9,998,404
                                                                                                                    ------------
                        Total Short-Term Investments (cost $14,686,744) ...........................................   14,686,744
                                                                                                                    ------------
                        TOTAL INVESTMENTS--146.1% (cost $586,812,069) .............................................  604,469,491
                        LIABILITIES IN EXCESS OF OTHER ASSETS--(46.1)% ............................................ (190,721,376)
                                                                                                                    ------------
                        NET ASSETS--100% .......................................................................... $413,698,115
                                                                                                                    ============


----------
(1) Using the higher of S&P's, Moody's or Fitch's rating.
(2) Entire or partial principal amount pledged as collateral for reverse
    repurchase agreements or financial futures contracts.
(3) Security is not registered under the Securities Act of 1933. These
    securities may be resold in transactions in accordance with Rule 144A under
    that Act, to qualified institutional buyers. As of April 30, 2003, the Trust
    held 9.4% of its net assets, with a current market value of $39,084,672, in
    securities restricted as to resale.









                       See Notes to Financial Statements.


                                       16



PORTFOLIO OF INVESTMENTS (UNAUDITED)
APRIL 30, 2003

--------------------------
BlackRock High Yield Trust
--------------------------



             PRINCIPAL
              AMOUNT
  RATING(1)    (000)                         DESCRIPTION                                                               VALUE
---------------------------------------------------------------------------------------------------------------------------------
                                                                                                           
                        LONG-TERM INVESTMENTS--140.9%
                        CORPORATE BONDS--140.9%
                        AEROSPACE & DEFENSE--2.8%
    B-       $ 1,000    BE Aerospace, Inc., 9.50%, 11/01/08 ....................................................... $    715,000
    NR         1,500    Condor Systems Inc., Ser. B, 11.88%, 5/01/09(2) ...........................................      450,000
                                                                                                                    ------------
                                                                                                                       1,165,000
                                                                                                                    ------------
                        AUTOMOTIVE--6.4%
     B         1,000    CSK Auto, Inc., 12.00%, 6/15/06 ...........................................................    1,085,000
    B3         1,000    Delco Remy Intl., Inc., 11.00%, 5/01/09 ...................................................      530,000
    B+         1,000    Sonic Automotive, Inc., Ser. D, 11.00%, 8/01/08 ...........................................    1,065,000
                                                                                                                    ------------
                                                                                                                       2,680,000
                                                                                                                    ------------
                        BASIC MATERIALS--1.2%
    NR         2,000    Golden Northwest Aluminum Inc., 12.00%, 12/15/06 ..........................................      120,000
    NR           376    Republic Engineered Products LLC, 10.00%, 8/16/09(3) ......................................      376,470
    NR         2,000    Republic Technologies Intl. LLC, 13.75%, 7/15/092 .........................................       20,000
                                                                                                                    ------------
                                                                                                                         516,470
                                                                                                                    ------------
                        BUILDING & DEVELOPMENT--11.2%
    B-         1,500    Ainsworth Lumber Co. Ltd., 12.50%, 7/15/07 (Canada) .......................................    1,650,000
    Ba1        1,000    D.R. Horton, Inc., 10.50%, 4/01/05 ........................................................    1,095,000
     D           500    Encompass Services Corp., 10.50%, 5/01/09(2) ..............................................       10,000
    BB         1,000    Hovnanian Enterprises, Inc., 10.50%, 10/01/07 .............................................    1,130,000
    B2         1,000    MMI Products Inc., Ser. B, 11.25%, 4/15/07 ................................................      760,000
                                                                                                                    ------------
                                                                                                                       4,645,000
                                                                                                                    ------------
                        CHEMICAL--7.9%
    B-           250    Avecia Group PLC, 11.00%, 7/01/09 (United Kingdom) ........................................      222,500
    Ba2        1,000    Hercules Inc., 11.13%, 11/15/07 ...........................................................    1,140,000
    B+         1,000    Lyondell Chemical Co., 10.88%, 5/01/09 ....................................................    1,000,000
    CCC        1,750    Mississippi Chemical Corp., 7.25%, 11/15/17 ...............................................      175,000
    Ba3        1,000    Solutia, Inc., 11.25%, 7/15/09 ............................................................      760,000
                                                                                                                    ------------
                                                                                                                       3,297,500
                                                                                                                    ------------
                        CONGLOMERATES--2.3%
     B-          500    MSX Intl., Inc., 11.38%, 1/15/08 ..........................................................      255,000
    NR         1,200    Nebco Evans Holding Co., 12.375%, 7/15/07(2,3) ............................................            0
     B         1,000    Penhall Intl., Inc., 12.00%, 8/01/06 ......................................................      700,000
                                                                                                                    ------------
                                                                                                                         955,000
                                                                                                                    ------------
                        CONSUMER PRODUCTS--26.7%
    BB+        1,000    American Greetings Corp., 11.75%, 7/15/08 .................................................    1,145,000
     B         1,000    Elizabeth Arden, Inc., Ser. B, 11.75%, 2/01/11 ............................................    1,100,000
    BB-        1,000    Levi Strauss & Co., 11.63%, 1/15/08 .......................................................      850,000
    NR         1,000    Mattress Discounters Corp., 12.63%, 7/15/07(2) ............................................      180,000
    B3           464    National Vision Inc., 12.00%, 3/30/09 .....................................................      301,343
   CCC+        1,760    O'Sullivan Industries Inc., 13.38%, 10/15/09 ..............................................    1,548,800
    B-         1,100    Pantry, Inc., The, 10.25%, 10/15/07 .......................................................    1,094,500
                        Revlon Consumer Products Corp.,
   CCC-        2,000      8.63%, 2/01/08 ..........................................................................      900,000
   CCC+        1,000      12.00%, 12/01/05 ........................................................................      950,000
     B         1,000    Salton, Inc., 12.25%, 4/15/08 .............................................................    1,035,000
    B+         1,000    Sbarro, Inc., 11.00%, 9/15/09 .............................................................      970,000
    B-         1,000    St. John Knits Intl., Inc., 12.50%, 7/01/09 ...............................................    1,065,000
                                                                                                                    ------------
                                                                                                                      11,139,643
                                                                                                                    ------------
                        CONTAINERS & GLASS--4.7%
     B         1,000    Radnor Holdings Inc., 11.00%, 3/15/10(4) ..................................................    1,000,000
   CCC+        1,500    U.S. Can Co., Ser. B, 12.38%, 10/01/10 ....................................................      960,000
                                                                                                                    ------------
                                                                                                                       1,960,000
                                                                                                                    ------------
                        ECOLOGICAL SERVICES & EQUIPMENT--2.5%
    B+         1,000    Allied Waste NA, Inc., Ser. B, 10.00%, 8/01/09 ............................................    1,067,500
                                                                                                                    ------------





                       See Notes to Financial Statements.


                                       17





             PRINCIPAL
              AMOUNT
  RATING(1)    (000)                         DESCRIPTION                                                               VALUE
---------------------------------------------------------------------------------------------------------------------------------
                                                                                                           
                        ELECTRONICS--12.3%
     B       $ 1,788    Asat Finance LLC, 12.50%, 11/01/06 ........................................................ $  1,430,080
    B3         1,000    Communications & Power Industry Inc., 12.00%, 8/01/05 .....................................    1,000,000
   CCC-        2,500    Knowles Electronics Holdings, Inc., 13.125%, 10/15/09 .....................................    1,825,000
     B           825    ON Semiconductor Corp., 12.00%, 3/15/104 ..................................................      891,000
                                                                                                                    ------------
                                                                                                                       5,146,080
                                                                                                                    ------------
                        ENERGY--8.4%
    B-         1,000    AES Corp., 8.38%, 8/15/07 .................................................................      900,000
    B+         1,000    Calpine Corp., 10.50%, 5/15/06 ............................................................      845,000
    B-         1,000    Mission Energy Holding Co., 13.50%, 7/15/08 ...............................................      660,000
    B3         1,000    Orion Power Holdings Inc., 12.00%, 5/01/10 ................................................    1,085,000
                                                                                                                    ------------
                                                                                                                       3,490,000
                                                                                                                    ------------
                        FARMING & AGRICULTURE--0.8%
    NR         1,000    Precision Partners Inc., 12.00%, 3/15/09(2) ...............................................      330,000
                                                                                                                    ------------
                        FINANCE & BANKING--12.9%
    NR           500    Ameriserve Finance Capital Corp., 12.00%, 9/15/06(2,4) ....................................       25,000
    Ba2        1,000    Capital Guardian High Yield, CBO, Ltd., Ser. 1A, 11.45%, 5/24/13(4) .......................      622,200
    BB         1,000    Fairfax Financial Holdings Ltd., 6.88%, 4/15/08 ...........................................      850,000
    Ba3        2,500    First Dominion Funding II, Ser. 1A, 11.61%, 4/25/14(4) ....................................    1,037,500
   CCC+        1,000    Madison River Capital Corp., 13.25%, 3/01/10 ..............................................      850,000
    B1         2,000    Zais Investment Grade Ltd., Class C, Pay-in-Kind, 9.95%, 9/23/14(4) .......................    2,000,000
                                                                                                                    ------------
                                                                                                                       5,384,700
                                                                                                                    ------------
                        FOREST PRODUCTS--2.4%
    B+         1,000    FiberMark Inc., 10.75%, 4/15/11 ...........................................................    1,010,000
                                                                                                                    ------------
                        HEALTH CARE--4.9%
    B-         1,000    Concentra Operating Corp., Ser. B, 13.00%, 8/15/09 ........................................    1,110,000
    B-         1,000    Medquest Inc., Ser. B, 11.88%, 8/15/12 ....................................................      925,000
                                                                                                                    ------------
                                                                                                                       2,035,000
                                                                                                                    ------------
                        INDUSTRIAL EQUIPMENT--1.4%
    CC         2,000    National Equipment Services Inc., Ser. D, 10.00%, 11/30/04 ................................      600,000
                                                                                                                    ------------
                        MEDIA--14.0%
    B1         2,000    Alliance Atlantis Communications, Inc., 13.00%, 12/15/09 (Canada) .........................    2,280,000
                        Charter Communications Holdings LLC,
   CCC-        1,000      10.75%, 10/01/09 ........................................................................      665,000
   CCC-        1,000      11.13%, 1/15/11 .........................................................................      665,000
    B-         1,000    WRC Media Corp., 12.75%, 11/15/09 .........................................................    1,025,000
   Caa1          980    XM Satellite Radio Inc., 14.00%, 3/15/10 ..................................................      921,200
    NR           607    Ziff Davis Media Inc., Ser. B, 13.00%, 8/12/09 ............................................      303,525
                                                                                                                    ------------
                                                                                                                       5,859,725
                                                                                                                    ------------
                        TELECOMMUNICATION--6.2%
     C         1,500    Allegiance Telecom Inc., 12.88%, 5/15/08 (Canada)(2) ......................................      330,000
    NR         2,000    Asia Global Crossing Ltd., 13.38%, 10/15/10 (United Kingdom)(2) ...........................      250,000
    B+         1,000    Nextel Communications Inc., 12.00%, 11/01/08 ..............................................    1,080,000
    NR         1,000    Northeast Optic, 12.75%, 8/15/08(2) .......................................................       70,000
    NR           600    PF.Net Communications, Inc., 13.75%, 5/15/10(2) ...........................................            0
    B3         1,000    Time Warner Telecom LLC, 9.75%, 7/15/08 ...................................................      840,000
                                                                                                                    ------------
                                                                                                                       2,570,000
                                                                                                                    ------------
                        TRANSPORTATION--11.9%
                        Amtran Inc.,
    CCC        2,000      9.63%, 12/15/05 .........................................................................      600,000
    CCC        1,000      10.50%, 8/01/04 .........................................................................      400,000
     B         2,000    Pacer Intl., Inc., Ser. B, 11.75%, 6/01/07 ................................................    2,120,000
    B1         1,000    Sea Containers Ltd., Ser B, 10.75%, 10/15/06 (United Kingdom) .............................      780,000
    BB-        1,000    TFM SA de CV, 12.50%, 6/15/12 (Mexico) ....................................................    1,050,000
                                                                                                                    ------------
                                                                                                                       4,950,000
                                                                                                                    ------------
                        Total Corporate Bonds--140.9% (cost $77,043,025) ..........................................   58,801,618
                                                                                                                    ------------






                       See Notes to Financial Statements.


                                       18





  RATING(1)   SHARES                         DESCRIPTION                                                               VALUE
---------------------------------------------------------------------------------------------------------------------------------
                                                                                                           
                        PREFERRED STOCK--0.0%
                        TELECOMMUNICATION--0.0%
   NR          1,098    Adelphia Business Solutions, Inc., Ser. B, 12.88%, 10/15/07 (cost $925,576)2 .............. $          0
                                                                                                                    ------------

               UNITS    WARRANTS--0.0%
               -----
               1,000    Mattress Discounters Corp., Expires 7/15/072 ..............................................            0
                 600    PF.Net Communications, Inc., Expires 5/15/102 .............................................            0
               2,000    Republic Technologies Intl. Inc., Expires 7/15/092 ........................................            0
                                                                                                                    ------------
                                                                                                                               0
                                                                                                                    ------------
                        TOTAL WARRANTS (cost $377,115) ............................................................            0
                                                                                                                    ------------

                        TOTAL INVESTMENTS--140.9% (cost $78,345,716) ..............................................   58,801,618
                        LIABILITIES IN EXCESS OF OTHER ASSETS--(40.9)% ............................................  (17,078,034)
                                                                                                                    ------------
                        NET ASSETS--100% .......................................................................... $ 41,723,584
                                                                                                                    ============


----------
(1) Using the higher of S&P's, Moody's or Fitch's rating.
(2) Issuer is technically in default.
(3) Security is fair valued.
(4) Security is not registered under the Securities Act of 1933. These
    securities may be resold in transactions in accordance with Rule 144A under
    that Act, to qualified institutional buyers. As of April 30, 2003, the Trust
    held 13.4% of its net assets, with a current market value of $5,575,700, in
    securities restricted as to resale.








                       See Notes to Financial Statements.


                                       19



PORTFOLIO OF INVESTMENTS (UNAUDITED)
APRIL 30, 2003

----------------------------------
BlackRock Income Opportunity Trust
----------------------------------



             PRINCIPAL
              AMOUNT
  RATING(1)    (000)                         DESCRIPTION                                                               VALUE
---------------------------------------------------------------------------------------------------------------------------------
                                                                                                           
                        LONG-TERM INVESTMENTS--140.2%
                        MORTGAGE PASS-THROUGHS--51.8%
            $ 49,273(2) Federal Home Loan Mortgage Corp., 6.50%, 1/01/26 - 11/01/32 ............................... $ 51,450,965
                        Federal National Mortgage Assoc.,
             109,469(2)   5.50%, 12/01/13 - 2/01/33 ...............................................................  113,025,632
              50,321(2)   6.00%, 12/01/09 - 11/01/32 ..............................................................   52,599,725
               1,173      7.00%, 2/01/24 - 1/01/29 ................................................................    1,244,342
                 408    Government National Mortgage Assoc., 8.00%, 4/15/24 - 11/15/25 ............................      446,820
                                                                                                                    ------------
                        Total Mortgage Pass-Throughs ..............................................................  218,767,484
                                                                                                                    ------------
                        FEDERAL HOUSING ADMINISTRATION--4.4%
                        GMAC Projects,
               1,314      Ser. 37, 7.43%, 10/01/22 ................................................................    1,419,271
                 631      Ser. 44, 7.43%, 8/01/22 .................................................................      681,235
                        Merrill Projects,
               1,044      Ser. 29, 7.43%, 6/01/22 .................................................................    1,127,271
              10,266      Ser. 42, 7.43%, 9/01/22 .................................................................   11,089,000
               2,017    Reilly Project, Series B-11, 7.40%, 4/01/21 ...............................................    2,175,867
               2,051    Westmore Project 8240, 7.25%, 4/01/21 .....................................................    2,203,103
                                                                                                                    ------------
                        Total Federal Housing Administration ......................................................   18,695,747
                                                                                                                    ------------
                        NON-AGENCY MULTIPLE CLASS MORTGAGE PASS-THROUGH--0.1%
   AAA           353    Summit Mortgage Trust, Ser. 1, Class B1, 12/28/12(3) ......................................      356,696
                                                                                                                    ------------
                        ADJUSTABLE RATE MORTGAGE SECURITIES--0.1%
                 280    Federal National Mortgage Assoc., Ser. 256, Class F, 11/25/23 .............................      253,428
                                                                                                                    ------------
                        INVERSE FLOATING RATE MORTGAGES--1.0%
                        Federal Home Loan Mortgage Corp.,
                 844      Ser. 1601, Class SE, 10/15/08 ...........................................................      855,276
               1,000(2)   Ser. 1611, Class JC, 8/15/23 ............................................................    1,120,000
                        Federal National Mortgage Assoc.,
               1,808(2)   Ser. 23, Class PS, 4/25/23 ..............................................................    1,985,320
                 196      Ser. 87, Class S, 8/25/21 ...............................................................      246,165
                 101      Ser. 145, Class S, 10/25/06 .............................................................      126,841
                                                                                                                    ------------
                        Total Inverse Floating Rate Mortgages .....................................................    4,333,602
                                                                                                                    ------------
                        INTEREST ONLY MORTGAGE-BACKED SECURITIES--1.3%
                        BA Mortgage Securities, Inc.,
               1,596      Ser. 1, Class A7, 3/25/29 ...............................................................        9,228
                 179      Ser. 1, Class X, 7/25/26 ................................................................          954
                 264      Ser. 1, Class 2X, 5/28/13 ...............................................................        3,915
              27,030    Countrywide Home Loans, Inc., Ser. 6, Class X, 6/25/13 ....................................       59,127
                        Federal Home Loan Mortgage Corp.,
               1,192      Ser. 1223, Class H, 3/15/22 .............................................................      224,958
                 856      Ser. 1254, Class Z, 4/15/22 .............................................................      186,727
                 105      Ser. 1644, Class DA, 12/15/23 ...........................................................          362
               6,975      Ser. 1809, Class SC, 12/15/23 ...........................................................      207,073
               1,899      Ser. 1831, Class PG, 3/15/11 ............................................................      235,509
               1,957      Ser. 2080, Class PL, 1/15/27 ............................................................       52,592
                 253      Ser. 2137, Class CI, 10/15/26 ...........................................................        3,644
                        Federal National Mortgage Assoc.,
                  15      Ser. G46, Class H, 12/25/09 .............................................................      241,218
                 307      Ser. G92-5, Class H, 1/25/22 ............................................................       61,279
               1,681      Ser. 7, Class PH, 4/25/11 ...............................................................      139,747
              10,300      Ser. 16, Class IW, 11/25/12 .............................................................    1,042,875
               1,727      Ser. 50, Class SI, 4/25/23 ..............................................................       42,638
               6,400      Ser. 70, Class IN, 5/25/15 ..............................................................      848,000
              10,546    G.E. Capital Mortgage Services, Inc., Ser. 11, Class A5, 7/25/29 ..........................      148,303
              17,582    GMAC Commercial Mortgage Securities Inc., Ser. C2, Class X, 5/15/35 .......................      540,199
              14,434    Goldman Sachs Mortgage Securities Corp., Ser. 5, Class IO, 6/19/27(3) .....................      322,513





                       See Notes to Financial Statements.


                                       20





             PRINCIPAL
              AMOUNT
  RATING(1)    (000)                         DESCRIPTION                                                               VALUE
---------------------------------------------------------------------------------------------------------------------------------
                                                                                                           
                        INTEREST ONLY MORTGAGE-BACKED SECURITIES--(CONT'D)
            $    580    Government National Mortgage Assoc., Ser. 3, Class E, 6/16/25 ............................. $     98,530
               9,339    Hanover Grantor Trust, Ser. A, Class 1IO, 8/28/27(3) ......................................       70,044
               4,162    Morgan Stanley Capital 1, Inc., Ser. HF1, Class X, 7/15/29(3) .............................      175,809
              13,285    Prudential Home Mortgage Securities Co., Ser. 5, Class A9, 2/25/24 ........................            0
                        Residential Asset Securitization Trust,
              14,022      Ser. A3, Class X, 5/25/29 ...............................................................       78,876
              11,932      Ser. A5, Class A2, 9/25/30 ..............................................................      514,563
                 521    Residential Funding Mortgage Securities I Inc., Ser. S30, Class A7, 12/25/28 ..............        4,072
              18,958    Salomon Brothers Mortgage Securities VII Inc., Ser. 1, Class IO, 3/25/22 ..................       29,622
              33,031    Vendee Mortgage Trust, Ser. 1, Class IO, 2/15/27 ..........................................      216,764
                                                                                                                    ------------
                        Total Interest Only Mortgage-Backed Securities ............................................    5,559,141
                                                                                                                    ------------
                        PRINCIPAL ONLY MORTGAGE-BACKED SECURITIES--0.8%
                        Federal Home Loan Mortgage Corp.,
                 426(2)   Ser. 1739, Class B, 2/15/24 .............................................................      400,989
                 130      Ser. 1857, Class PB, 12/15/08 ...........................................................      128,911
                        Federal National Mortgage Assoc.,
               1,154(2)   Ser. 26, Class L, 3/25/23 ...............................................................    1,134,189
                 285      Ser. 279, Class 1, 7/01/26 ..............................................................      255,008
    AAA        5,490    Fund America Investors Corp., Ser. C, Class B, 4/29/30 ....................................    1,276,843
                                                                                                                    ------------
                        Total Principal Only Mortgage-Backed Securities ...........................................    3,195,940
                                                                                                                    ------------
                        U.S. GOVERNMENT AND AGENCY SECURITIES--6.5%
              14,968    Overseas Private Investment Corp., 4.30% - 7.35%, 5/29/12 .................................   16,260,093
               2,366    Small Business Administration, Ser. 20K-1, 6.95%, 11/01/16 ................................    2,634,080
                        U.S. Treasury Notes,
               1,800      3.25%, 8/15/07 ..........................................................................    1,849,079
               2,100      4.00%, 11/15/12 .........................................................................    2,126,823
               4,200(2)   4.875%, 2/15/12 .........................................................................    4,553,392
                                                                                                                    ------------
                        Total U.S. Government and Agency Securities ...............................................   27,423,467
                                                                                                                    ------------
                        CORPORATE BONDS--73.4%
                        AEROSPACE & DEFENSE--1.6%
    B-         1,235    BE Aerospace, Inc., 9.50%, 11/01/08 .......................................................      815,100
    BB-        1,500    L-3 Communications Corp., 7.625%, 6/15/12 .................................................    1,653,750
   BBB+        1,250    Lockheed Martin Corp., 8.50%, 12/01/29 ....................................................    1,634,766
   BBB-        1,000    Northrop Grumman Corp., 7.125%, 2/15/11 ...................................................    1,169,895
   BBB-        1,200    Raytheon Co., 6.15%, 11/01/08 .............................................................    1,324,648
                                                                                                                    ------------
                                                                                                                       6,598,159
                                                                                                                    ------------
                        AUTOMOTIVE--2.3%
     B         2,000    Asbury Automotive Group, Inc., 9.00%, 6/15/12 .............................................    1,880,000
    BB+        1,500    Autonation, Inc., 9.00%, 8/01/08 ..........................................................    1,627,500
    BB+        2,000    Briggs & Stratton Corp., 8.875%, 3/15/11 ..................................................    2,230,000
    B+         3,715    Dura Operating Corp., Ser. B, 8.625%, 4/15/12 .............................................    3,826,450
                                                                                                                    ------------
                                                                                                                       9,563,950
                                                                                                                    ------------
                        BASIC MATERIAL--1.4%
    BB         3,000    AK Steel Corp., 7.875%, 2/15/09 ...........................................................    2,662,500
     A         2,000    Alcoa, Inc., 7.375%, 8/01/10 ..............................................................    2,353,913
    B+         1,000    Oregon Steel Mills, Inc., 10.00%, 7/15/09                                                        990,000
                                                                                                                    ------------
                                                                                                                       6,006,413
                                                                                                                    ------------
                        BUILDING & DEVELOPMENT--0.9%
    B-         1,000    Ainsworth Lumber Co. Ltd., 12.50%, 7/15/07 (Canada) .......................................    1,100,000
    Ba1        2,500    D.R. Horton, Inc., 10.50%, 4/01/05 ........................................................    2,737,500
                                                                                                                    ------------
                                                                                                                       3,837,500
                                                                                                                    ------------
                        CHEMICAL--1.9%
    B-           500    Avecia Group PLC, 11.00%, 7/01/09 (United Kingdom) ........................................      445,000
                        Dow Chemical Co.,
    A-           750      5.75%, 12/15/08 .........................................................................      794,905
    A-         1,400      6.00%, 10/01/12 .........................................................................    1,484,000
    BB         3,000    Lyondell Chemical Co., 11.125%, 7/15/12 ...................................................    3,225,000
     B         1,750    Noveon, Inc., Ser. B, 11.00%, 2/28/11 .....................................................    1,960,000
                                                                                                                    ------------
                                                                                                                       7,908,905
                                                                                                                    ------------
                        CONGLOMERATES--1.2%
    AAA        3,650    General Electric Co., 5.00%, 2/01/13 ......................................................    3,771,256
     A         1,300    Honeywell, Inc., 6.125%, 11/01/11 .........................................................    1,447,169
                                                                                                                    ------------
                                                                                                                       5,218,425
                                                                                                                    ------------





                       See Notes to Financial Statements.


                                       21





             PRINCIPAL
              AMOUNT
  RATING(1)    (000)                         DESCRIPTION                                                               VALUE
---------------------------------------------------------------------------------------------------------------------------------
                                                                                                           
                        CONSUMER PRODUCTS--8.8%
     B      $  1,875    American Seafoods Group LLC, 10.125%, 4/15/10 ............................................. $  2,015,625
     A         2,000    Avery Dennison Corp., 4.875%, 1/15/13 .....................................................    2,037,480
     B         2,000    Buffets, Inc., 11.25%, 7/15/10 ............................................................    1,950,000
                        General Mills, Inc.,
   BBB+          550      5.125%, 2/15/07 .........................................................................      588,145
   BBB+        1,700      6.00%, 2/15/12 ..........................................................................    1,874,771
                        Kellogg Co., Ser. B,
    BBB          700      6.00%, 4/01/06 ..........................................................................      764,908
    BBB        2,000      6.60%, 4/01/11 ..........................................................................    2,276,690
    A-         3,000    Kohls Corp., 6.30%, 3/01/11 ...............................................................    3,374,647
    A3         2,000    Kraft Foods, Inc., 5.625%, 11/01/11 .......................................................    2,095,171
   BBB-        1,000    Kroger Co., 5.50%, 2/01/13 ................................................................    1,025,931
    BB-        2,000    Levi Strauss & Co., 12.25%, 12/15/123 .....................................................    1,680,000
    AA-        3,000    Procter & Gamble Co., 6.875%, 9/15/09 .....................................................    3,561,734
     B         2,000    Roundys, Inc., Ser. B, 8.875%, 6/15/12 ....................................................    2,050,000
    BBB        2,495    Safeway, Inc., 6.50%, 3/01/11 .............................................................    2,742,903
    A+         2,000    Unilever Capital Corp., 7.125%, 11/01/10 ..................................................    2,376,297
    AA         3,000    Wal-Mart Stores, Inc., 6.875%, 8/10/09 ....................................................    3,529,022
    BB+        3,000    Yum! Brands, Inc., 8.875%, 4/15/11 ........................................................    3,487,500
                                                                                                                    ------------
                                                                                                                      37,430,824
                                                                                                                    ------------
                        CONTAINERS & GLASS--1.8%
    B+         1,500    Crown European Holdings SA, 9.50%, 3/01/11 (France)3 ......................................    1,597,500
    BB         2,250    Owens-Brockway Glass Container, Inc., 8.875%, 2/15/09 .....................................    2,413,125
                        Plastipak Holdings, Inc.,
    B+         1,590      10.75%, 9/01/11 .........................................................................    1,717,200
    B+           685      10.75%, 9/01/113 ........................................................................      739,800
     B         1,240    Stone Container Corp., 9.25%, 2/01/08 .....................................................    1,370,200
                                                                                                                    ------------
                                                                                                                       7,837,825
                                                                                                                    ------------
                        ECOLOGICAL SERVICES & EQUIPMENT--1.3%
    B+         3,000    Allied Waste NA, Inc., Ser. B, 10.00%, 8/01/09 ............................................    3,202,500
     B         2,250    Casella Waste Systems, Inc., 9.75%, 2/01/133 ..............................................    2,430,000
                                                                                                                    ------------
                                                                                                                       5,632,500
                                                                                                                    ------------
                        ELECTRONICS--0.5%
    B-         1,750    Chippac Int. Ltd., Ser. B, 12.75%, 8/01/09 ................................................    1,960,000
                                                                                                                    ------------
                        ENERGY--7.8%
    BBB        2,000    Amerada Hess Corp., 6.65%, 8/15/11 ........................................................    2,237,768
   BBB+          600    Anadarko Petroleum Corp., 5.375%, 3/01/07 .................................................      645,254
    B2           500    Baytex Energy Ltd., 10.50%, 2/15/11 (Canada) ..............................................      547,500
    BB-        2,500    Chesapeake Energy Corp., 9.00%, 8/15/12 ...................................................    2,787,500
    A-         3,000    Conoco Funding Co., 6.35%, 10/15/11 .......................................................    3,399,647
   BBB+        2,000    Dominion Resources, Inc., 5.70%, 9/17/12 ..................................................    2,125,668
     B         2,500    Dresser, Inc., 9.375%, 4/15/11 ............................................................    2,600,000
    BBB        1,500    DTE Energy Co., 7.05%, 6/01/11 ............................................................    1,728,503
     B           400    El Paso Corp., 7.875%, 6/15/123 ...........................................................      351,000
   BBB+        3,000    Exelon Corp., 6.75%, 5/01/11 ..............................................................    3,407,777
   Baa2        1,500    FirstEnergy Corp., Ser. C, 7.375%, 11/15/31 ...............................................    1,642,286
   BBB+        1,250    Kinder Morgan Energy Partners LP, 7.30%, 8/15/33 ..........................................    1,478,125
    BBB        1,000    Kinder Morgan, Inc., 6.50%, 9/01/12 .......................................................    1,110,149
    BB-        2,500    Leviathan Gas Pipeline Partners LP, Ser. B, 10.375%, 6/01/09 ..............................    2,706,250
    BBB        1,800    Occidental Petroleum Corp., 6.75%, 1/15/12 ................................................    2,056,077
                        Progress Energy, Inc.,
    BBB        1,800      6.75%, 3/01/06 ..........................................................................    1,973,010
    BBB        2,000      7.10%, 3/01/11 ..........................................................................    2,289,215
                                                                                                                    ------------
                                                                                                                      33,085,729
                                                                                                                    ------------
                        FINANCE & BANKING--18.0%
    Aa3        2,450    Bank of America Corp., 7.80%, 2/15/10 .....................................................    2,949,709
    Aa3        1,400(2) Bank One Corp., 6.50%, 2/01/06 ............................................................    1,552,991
    Aa3        2,000    Barclays Bank PLC, 6.86%, 6/15/32 (United Kingdom)3 .......................................    2,211,520
     A           500    Bear Stearns Co., Inc., 6.50%, 5/01/06 ....................................................      555,239
    Aa2        6,000    Citigroup, Inc., 5.625%, 8/27/12 ..........................................................    6,472,398
                        Credit Suisse First Boston USA, Inc.,
    Aa3          700(2)   6.125%, 11/15/11 ........................................................................      757,705
    Aa3        1,000      7.125%, 7/15/32 .........................................................................    1,164,829





                       See Notes to Financial Statements.


                                       22





             PRINCIPAL
              AMOUNT
  RATING(1)    (000)                         DESCRIPTION                                                               VALUE
---------------------------------------------------------------------------------------------------------------------------------
                                                                                                           
                        FINANCE & BANKING--(CONT'D)
                        Federal Home Loan Mortgage Corp.,
    AAA     $  4,000(2)   4.875%, 3/15/07 ......................................................................... $  4,333,720
    AAA        4,000(2)   6.875%, 9/15/10 .........................................................................    4,795,200
    AAA        8,000(2) Federal National Mortgage Assoc., 4.375%, 10/15/06 - 9/15/12 ..............................    8,319,720
    A3         3,000(2) Ford Motor Credit Co., 6.875%, 2/01/06 ....................................................    3,113,936
    AAA        3,000    General Electric Capital Corp., Ser. A, 6.75%, 3/15/32 ....................................    3,472,642
                        General Motors Acceptance Corp.,
    A2           700      6.75%, 1/15/06 ..........................................................................      732,984
    A2         4,000      6.875%, 8/28/12 .........................................................................    4,072,138
    AA-        1,000    Goldman Sachs Group, Inc., 6.60%, 1/15/12 .................................................    1,130,030
     A         3,650    Household Finance Corp., 6.375%, 10/15/11 - 11/27/12 ......................................    4,030,270
    A-         2,000    John Deere Capital Corp., 5.10%, 1/15/13 ..................................................    2,052,672
                        JP Morgan Chase & Co.,
    A+         2,100      5.25%, 5/30/07 ..........................................................................    2,266,176
     A         1,000      6.75%, 2/01/11 ..........................................................................    1,136,478
    AAA        3,000    KFW Intl. Finance, Inc., 5.25%, 6/28/06 ...................................................    3,288,636
    Ba1        1,000    Labranche & Co., Inc., 12.00%, 3/02/07 ....................................................    1,095,000
                        Lehman Brothers Holdings, Inc.,
    A+           850      6.25%, 5/15/06 ..........................................................................      931,330
    A+         1,500      6.625%, 1/18/12 .........................................................................    1,707,022
     A         2,000    MetLife, Inc., 5.375%, 12/15/12 ...........................................................    2,102,303
                        Morgan Stanley,
    Aa3          600      5.80%, 4/01/07 ..........................................................................      658,781
    AA-        1,600      6.75%, 4/15/11 ..........................................................................    1,817,575
    AA         2,000    Northern Trust Co., 6.30%, 3/07/11 ........................................................    2,256,534
   BBB+        2,000    Sears Roebuck Acceptance Corp., 6.75%, 8/15/11 ............................................    2,043,857
    AA-        2,000    UBS Preferred Funding Trust I, 8.622%, 10/29/49 ...........................................    2,524,200
    Aa2        2,000    Wells Fargo Bank, 7.55%, 6/21/10 ..........................................................    2,415,320
                                                                                                                    ------------
                                                                                                                      75,960,915
                                                                                                                    ------------
                        FOREST PRODUCTS--1.8%
    Ba2        2,000    Caraustar Industries, Inc., 9.875%, 4/01/11 ...............................................    2,060,000
    BB+        2,500    Tembec Industries, Inc., 8.50%, 2/01/11 (Canada) ..........................................    2,587,500
                        Weyerhaeuser Co.,
    BBB        1,550      5.95%, 11/01/08 .........................................................................    1,679,586
    BBB        1,000      6.75%, 3/15/12 ..........................................................................    1,121,274
                                                                                                                    ------------
                                                                                                                       7,448,360
                                                                                                                    ------------
                        HEALTH CARE--1.4%
    AA         1,000    Bristol Myers Squibb Co., 5.75%, 10/01/11 .................................................    1,086,540
    B-         1,200    Concentra Operating Corp., Ser. B, 13.00%, 8/15/09 ........................................    1,332,000
   Caa2        3,000    HealthSouth Corp., 7.00%, 6/15/084 ........................................................    1,935,000
    BB+        1,500    Omnicare, Inc., Ser. B, 8.125%, 3/15/11 ...................................................    1,627,500
                                                                                                                    ------------
                                                                                                                       5,981,040
                                                                                                                    ------------
                        HOTELS & CASINO--4.8%
    B+         2,100    Argosy Gaming Co., 10.75%, 6/01/09 ........................................................    2,310,000
    B+         2,000    Boyd Gaming Corp., 8.75%, 4/15/12 .........................................................    2,140,000
     B         2,000    Extended Stay America, Inc., 9.875%, 6/15/11 ..............................................    2,055,000
     B         1,700    Hammons John Q. Hotels LP, Ser. B, 8.875%, 5/15/12 ........................................    1,759,500
     B         1,500    Herbst Gaming, Inc., Ser. B, 10.75%, 9/01/08 ..............................................    1,646,250
    Ba3        1,500    HMH Properties, Inc., Ser. B, 7.875%, 8/01/08 .............................................    1,485,000
    BB+        1,000    MGM Mirage, Inc., 9.75%, 6/01/07 ..........................................................    1,120,000
    BB-        2,200    Mohegan Tribal Gaming Authority, 8.75%, 1/01/09 ...........................................    2,337,500
    BB+        2,000    Park Place Entertainment Corp., 8.875%, 9/15/08 ...........................................    2,160,000
   BBB-        3,000    Starwood Hotels & Resorts, 7.875%, 5/01/12 ................................................    3,157,500
                                                                                                                    ------------
                                                                                                                      20,170,750
                                                                                                                    ------------
                        INDUSTRIAL EQUIPMENT--1.0%
    B+         2,010    Manitowoc, Inc., 10.50%, 8/01/12 ..........................................................    2,130,600
    BB-        2,000    United Rentals NA, Inc., 10.75%, 4/15/08(3) ...............................................    2,150,000
                                                                                                                    ------------
                                                                                                                       4,280,600
                                                                                                                    ------------
                        LEISURE--0.4%
    B          1,500    Six Flags, Inc., 9.50%, 2/01/09 ...........................................................    1,543,125
                                                                                                                    ------------
                        MEDIA--5.0%
    B1         2,000    Alliance Atlantis Communications, Inc., 13.00%, 12/15/09 (Canada) .........................    2,280,000
                        AOL Time Warner, Inc.,
   BBB+        2,000      7.70%, 5/01/32 ..........................................................................    2,224,467
   BBB+        3,000      9.125%, 1/15/13 .........................................................................    3,669,000





                       See Notes to Financial Statements.


                                       23





             PRINCIPAL
              AMOUNT
  RATING(1)    (000)                         DESCRIPTION                                                               VALUE
---------------------------------------------------------------------------------------------------------------------------------
                                                                                                           
                        MEDIA--(CONT'D)
   CCC-      $ 3,000    Charter Communications Holdings LLC, 10.75%, 10/01/09 ...................................... $ 1,995,000
                        Comcast Cable Communications, Inc.,
    BBB        1,000      6.75%, 1/30/11 ...........................................................................   1,071,563
    BBB        1,800      8.875%, 5/01/17 ..........................................................................   2,288,359
    BB-        3,000    EchoStar DBS Corp., 10.375%, 10/01/07 ......................................................   3,360,000
     B         1,000    Quebecor Media, Inc., 11.125%, 7/15/11 (Canada) ............................................   1,130,000
    B-         3,000    WRC Media Corp., 12.75%, 11/15/09 ..........................................................   3,075,000
                                                                                                                    ------------
                                                                                                                      21,093,389
                                                                                                                    ------------
                        REAL ESTATE--0.5%
   BBB+        1,000    Avalonbay Communities, Inc., 6.625%, 9/15/11 ...............................................   1,112,109
   BBB+          800    EOP Operating LP, 7.00%, 7/15/11 ...........................................................     896,099
                                                                                                                    ------------
                                                                                                                       2,008,208
                                                                                                                    ------------
                        TECHNOLOGY--0.5%
    BB+        2,000    Seagate Technology Holdings, 8.00%, 5/15/09 ................................................   2,150,000
                                                                                                                    ------------

                        TELECOMMUNICATION--3.9%
   BBB+        2,000    Deutsche Telekom Intl. Finance BV, 8.50%, 6/15/10 (Netherlands) ............................   2,442,400
    B3         1,340    Dobson Communications Corp., 10.875%, 7/01/10 ..............................................   1,407,000
    B+         2,000    Nextel Communications, Inc., 9.95%, 2/15/08 ................................................   2,100,000
    Ba3        3,000    PanAmSat Corp., 8.50%, 2/01/12 .............................................................   3,240,000
                        SBC Communications, Inc.,
    AA-          450      5.875%, 8/15/12 ..........................................................................     495,190
    AA-        1,000      6.25%, 3/15/11 ...........................................................................   1,121,732
    A+         1,000    Verizon Global Funding Corp., 7.75%, 6/15/32 ...............................................   1,239,757
    Aa3        3,000    Verizon Pennsylvania, Inc., Ser. A, 5.65%, 11/15/11 ........................................   3,144,126
     A         1,000    Vodafone Group PLC, 7.75%, 2/15/10 (United Kingdom) ........................................   1,210,540
                                                                                                                    ------------
                                                                                                                      16,400,745
                                                                                                                    ------------
                        TRANSPORTATION--1.9%
   BBB+        1,000    Burlington Northern Santa Fe Corp., 5.90%, 7/01/12 .........................................   1,087,200
   BBB+        1,000    Canadian National Railway Co., 6.375%, 10/15/11 (Canada) ...................................   1,126,363
    BBB        1,475    Canadian Pacific Railway Ltd., 6.25%, 10/15/11 (Canada) ....................................   1,643,581
     B         2,000    RailAmerica Transp. Corp., 12.875%, 8/15/10 ................................................   2,180,000
    BBB        2,000    Union Pacific Corp., 6.125%, 1/15/12 .......................................................   2,204,988
                                                                                                                    ------------
                                                                                                                       8,242,132
                                                                                                                    ------------
                        OTHER--4.7%
    A3        17,520 2  Targeted Return Index Securities Trust, Ser. 10-2002, Floating Coupon, 1/15/12(3) ..........  19,934,606
                                                                                                                    ------------
                        Total Corporate Bonds ...................................................................... 310,294,100
                                                                                                                    ------------
                        FOREIGN GOVERNMENT BONDS--0.8%
   Baa2        3,000    United Mexican States, 8.00%, 9/24/22 (Mexico) .............................................   3,315,000
                                                                                                                    ------------
                        TOTAL LONG-TERM INVESTMENTS (cost $572,542,044) ............................................ 592,194,605
                                                                                                                    ------------
                        SHORT-TERM INVESTMENT--1.8%
                        DISCOUNT NOTE--1.8%
               7,800    Federal Home Loan Bank, 1.25%, 5/01/03 (cost $7,800,000) ...................................   7,800,000
                                                                                                                    ------------
                        Total investments before outstanding option written (cost $580,342,044) ....................$599,994,605
                                                                                                                    ------------








                       See Notes to Financial Statements.


                                       24





             NOTIONAL
              AMOUNT
               (000)                         DESCRIPTION                                                               VALUE
---------------------------------------------------------------------------------------------------------------------------------
                                                                                                          
                        OUTSTANDING OPTION WRITTEN--(0.1)%
                        CALL OPTION--(0.1)%
              $3,000    Interest Rate Swap, 5.50%, over 3 month LIBOR, expires 5/06/03 (premium received $56,660)  $    (323,740)
                                                                                                                   -------------
                        TOTAL INVESTMENTS, NET OF OUTSTANDING OPTION WRITTEN--141.9% .............................   599,670,865
                        OTHER LIABILITIES IN EXCESS OF OTHER ASSETS--(41.9)% .....................................  (177,142,546)
                                                                                                                   -------------
                        NET ASSETS--100% ......................................................................... $ 422,528,319
                                                                                                                   =============


----------
(1) Using the higher of S&P's, Moody's or Fitch's rating.
(2) Entire or partial principal amount pledged as collateral for reverse
    repurchase agreements or financial futures contracts.
(3) Security is not registered under the Securities Act of 1933. These
    securities may be resold in transactions in accordance with Rule 144A under
    that Act, to qualified institutional buyers. As of April 30, 2003, the Trust
    held 7.6% of its net assets, with a current market value of $32,019,488, in
    securities restricted as to resale.
(4) Issuer is technically in default.










                       See Notes to Financial Statements.



                                       25



PORTFOLIO OF INVESTMENTS (UNAUDITED)
APRIL 30, 2003

----------------------
BlackRock Income Trust
----------------------



             PRINCIPAL
              AMOUNT
  RATING(1)    (000)                         DESCRIPTION                                                               VALUE
---------------------------------------------------------------------------------------------------------------------------------
                                                                                                           
                        LONG-TERM INVESTMENTS--121.9%
                        MORTGAGE PASS-THROUGHS--52.0%
                        Federal Home Loan Mortgage Corp.,
             $40,470(2)   5.50%, 10/01/16 - 5/01/17 ............................................................... $ 42,080,683
                 271      6.50%, 5/01/29 - 5/01/30 ................................................................      283,308
                  68      7.50%, 2/01/23 ..........................................................................       73,504
                 253      8.00%, 11/01/15 .........................................................................      268,692
                 245      8.50%, 10/01/06 - 3/01/08 ...............................................................      261,324
                 554      9.00%, 9/01/20 ..........................................................................      618,550
                        Federal National Mortgage Assoc.,
              97,777(2)   5.50%, 12/01/13 - 9/01/17 ...............................................................  101,678,868
              32,338(2)   6.00%, 11/01/31 - 10/01/32 ..............................................................   33,646,603
              24,324(2)   6.50%, 2/01/26 - 5/01/31 ................................................................   25,407,794
              31,002(2)   7.00%, 6/01/26 - 2/01/32 ................................................................   32,767,532
               5,336      7.50%, 11/01/14 - 9/01/23 ...............................................................    6,106,048
               1,171      8.00%, 5/01/08 - 5/01/22 ................................................................    1,267,112
                  16      9.50%, 1/01/19 - 6/01/20 ................................................................       17,325
                        Government National Mortgage Assoc.,
                 250      7.00%, 10/15/17 .........................................................................      267,135
               1,974      7.50%, 8/15/21 - 12/15/23 ...............................................................    2,121,681
               1,391      8.00%, 10/15/22 - 2/15/29 ...............................................................    1,511,782
                 127      9.00%, 6/15/18 - 9/15/21 ................................................................      141,219
                                                                                                                    ------------
                        Total Mortgage Pass-Throughs ..............................................................  248,519,160
                                                                                                                    ------------
                        FEDERAL HOUSING ADMINISTRATION--5.4%
                        GMAC Projects,
               2,002      Ser. 33, 7.43%, 9/01/21 .................................................................    2,162,718
               1,940      Ser. 46, 7.43%, 3/01/22 .................................................................    2,095,487
               1,093      Ser. 51, 7.43%, 2/01/23 .................................................................    1,180,399
               2,221      Ser. 56, 7.43%, 11/01/22 ................................................................    2,399,082
                 490    Merrill Project, Ser. 54, 7.43%, 2/01/23 ..................................................      529,058
                 923    Reilly Project, Ser. 41, 8.767%, 12/01/18 .................................................      966,930
                        USGI Projects,
                 466      Ser. 87, 7.43%, 12/01/22 ................................................................      503,590
               1,920      Ser. 99, 7.43%, 10/01/23 ................................................................    2,074,162
               2,482      Ser. 6302, 7.43%, 12/01/21 ..............................................................    2,682,452
               3,894      Polaris, Ser. 982, 7.43%, 11/01/21 ......................................................    4,206,094
               6,307      Yorkville, Ser. 6094, 7.43%, 6/01/21 ....................................................    6,811,502
                                                                                                                    ------------
                        Total Federal Housing Administration ......................................................   25,611,474
                                                                                                                    ------------
                        AGENCY MULTIPLE CLASS MORTGAGE PASS-THROUGHS--3.2%
                        Federal Home Loan Mortgage Corp.,
              10,192      Ser. T11, Class A9, 3.068%, 1/25/28 .....................................................    9,477,280
                 784      Ser. 19, Class F, 8.50%, 3/15/20 ........................................................      828,513
                        Federal National Mortgage Assoc.,
                 977      Ser. 12, Class G, 4.50%, 2/25/20 ........................................................      996,867
               1,173      Ser. 43, Class E, 7.50%, 4/25/22 ........................................................    1,254,914
               2,500    Government National Mortgage Assoc., Ser. 33, Class PB, 6.50%, 7/20/31 ....................    2,649,686
                                                                                                                    ------------
                        Total Agency Multiple Class Mortgage Pass-Throughs ........................................   15,207,260
                                                                                                                    ------------
                        NON-AGENCY MULTIPLE CLASS MORTGAGE PASS-THROUGHS--0.9%
    AAA        2,822    Bank One, Ser. 1, Class 2A, 3/15/15 .......................................................    2,878,668
    AAA          561    Prudential Home Mortgage Securities Co., Ser. 35, Class A12, 6.75%, 9/25/08 ...............      559,474
    AAA        1,158    Summit Mortgage Trust, Ser. 1, Class B1, 12/28/12(3) ......................................    1,070,087
                                                                                                                    ------------
                        Total Non-Agency Multiple Class Mortgage Pass-Throughs ....................................    4,508,229
                                                                                                                    ------------
                        ADJUSTABLE RATE MORTGAGE SECURITIES--0.2%
                        Federal National Mortgage Assoc.,
                 430      Ser. 38, Class F, 8.325%, 4/25/21 .......................................................      403,991
                 631      Ser. 256, Class F, 2.844%, 11/25/23 .....................................................      570,213
                                                                                                                    ------------
                        Total Adjustable Rate Mortgage Securities .................................................      974,204
                                                                                                                    ------------





                       See Notes to Financial Statements.


                                       26





             PRINCIPAL
              AMOUNT
  RATING(1)    (000)                         DESCRIPTION                                                               VALUE
---------------------------------------------------------------------------------------------------------------------------------
                                                                                                           
                        INVERSE FLOATING RATE MORTGAGES--10.0%
    AAA     $  6,460    Countrywide Mortgage-Backed Securities, Inc., Ser. D, Class A15, 1/25/09 .................. $  6,552,896
                        Federal Home Loan Mortgage Corp.,
                 157      Ser. 1160, Class F, 10/15/21 ............................................................      198,967
                 294      Ser. 1580, Class SD, 9/15/08 ............................................................      297,857
                 915      Ser. 1601, Class SE, 10/15/08 ...........................................................      927,510
                 517      Ser. 1608, Class SC, 11/15/23 ...........................................................      520,674
               1,457(2)   Ser. 1616, Class SB, 11/15/08 ...........................................................    1,544,584
               4,328      Ser. 1688, Class S, 12/15/13 ............................................................    4,614,302
              10,536      Ser. 2575, Class QS, 9/15/31 ............................................................   10,671,077
                        Federal National Mortgage Assoc.,
                 102      Ser. 19, Class SB, 1/25/24 ..............................................................      102,341
                 436      Ser. 38, Class SA, 4/25/21 ..............................................................      458,805
               3,109      Ser. 79, Class SE, 1/25/22 ..............................................................    3,184,279
                 428      Ser. 87, Class S, 8/25/21 ...............................................................      537,870
               1,920      Ser. 93, Class S, 5/25/08 ...............................................................    2,035,472
                 204      Ser. 129, Class SE, 8/25/08 .............................................................      214,046
                 206      Ser. 145, Class S, 10/25/06 .............................................................      258,158
               1,651      Ser. 170, Class SC, 9/25/08 .............................................................    1,695,385
               4,327      Ser. 196, Class SC, 10/25/08 ............................................................    4,575,732
               2,173      Ser. 214, Class S, 12/25/08 .............................................................    2,278,190
               1,358      Ser. 214, Class SH, 12/25/08 ............................................................    1,507,259
               2,562      Ser. 247, Class SN, 12/25/23 ............................................................    2,851,265
    AAA        1,911    Kidder Peabody Acceptance Corp., Ser. 1, Class A6, 8/25/23 ................................    1,927,602
    AAA          649    Residential Funding Mortgage Securities Inc., Ser. S36, Class A13, 10/25/08 ...............      681,383
                                                                                                                    ------------
                        Total Inverse Floating Rate Mortgages .....................................................   47,635,654
                                                                                                                    ------------
                        INTEREST ONLY MORTGAGE-BACKED SECURITIES--10.0%
                        American Housing Trust,
                 489      Ser. III, Class 4, 3/25/19 ..............................................................        9,999
                 115      Ser. VII, Class 2, 11/25/20 .............................................................      340,000
                        BA Mortgage Securities, Inc.,
                 405      Ser. 1, Class X, 7/25/26 ................................................................        2,150
                 300      Ser. 1, Class 2X, 5/28/13 ...............................................................        4,457
             104,801    Commercial Mortgage Acceptance Corp., Ser. ML1, Class IO, 12/15/30 ........................    2,489,033
              38,360    Credit Suisse First Boston Mortgage Securities Corp. Trust, Ser. C1, Class AX, 6/20/29(3) .    2,140,039
                        Federal Home Loan Mortgage Corp.,
               1,387      Ser. G-13, Class PP, 5/25/21 ............................................................       50,778
              41,587      Ser. G-60, Class HS, 4/25/24 ............................................................    2,339,260
              11,543      Ser. 204, Class IO, 5/01/29 .............................................................    1,460,651
                  22      Ser. 1494, Class PL, 3/15/22 ............................................................       37,301
               2,384      Ser. 1706, Class IA, 10/15/23 ...........................................................      254,786
                 622      Ser. 1720, Class PK, 1/15/24 ............................................................       88,587
              18,484      Ser. 1809, Class SC, 12/15/23 ...........................................................      548,743
              20,310      Ser. 1914, Class PC, 12/15/11 ...........................................................      258,751
              22,106      Ser. 2002, Class HJ, 10/15/08 ...........................................................      951,772
                 763      Ser. 2037, Class IB, 12/15/26 ...........................................................       21,660
               3,042      Ser. 2050, Class PI, 12/15/11 ...........................................................      132,043
               1,708      Ser. 2063, Class PI, 4/15/12 ............................................................       52,292
               5,434      Ser. 2080, Class PL, 1/15/27 ............................................................      146,046
                  27      Ser. 2099, Class JB, 9/15/22 ............................................................      359,527
               2,029      Ser. 2138, Class PI, 3/15/11 ............................................................       36,885
               8,630      Ser. 2289, Class S, 2/15/31 .............................................................    1,159,665
                 457      Ser. 2296, Class IO, 8/15/27 ............................................................          594
               6,762      Ser. 2296, Class SA, 3/15/16 ............................................................      458,578
               7,359      Ser. 2358, Class IB, 7/15/21 ............................................................       55,191
               6,240      Ser. 2444, Class ST, 9/15/29 ............................................................      438,732
               9,078      Ser. 2512, Class QS, 10/15/22 ...........................................................      453,911
               5,101      Ser. 2513, Class BI, 12/15/15 ...........................................................      404,883
               4,545      Ser. 2542, Class MX, 5/15/22 ............................................................      721,182
               5,028      Ser. 2543, Class IM, 9/15/12 ............................................................      535,200
              11,648      Ser. 2545, Class NI, 3/15/22 ............................................................    1,565,167






                       See Notes to Financial Statements.


                                       27





             PRINCIPAL
              AMOUNT
  RATING(1)    (000)                         DESCRIPTION                                                               VALUE
---------------------------------------------------------------------------------------------------------------------------------
                                                                                                           
                        INTEREST ONLY MORTGAGE-BACKED SECURITIES--(CONT'D)
                        Federal National Mortgage Assoc.,
            $      3      Ser. G-50, Class G, 12/25/21 ............................................................ $     49,796
                 790      Ser. G92-5, Class H, 1/25/22 ............................................................      157,575
                   2      Ser. G92-12, Class C, 2/25/22 ...........................................................       41,409
               2,679      Ser. G92-60, Class SB, 10/25/22 .........................................................       61,061
               3,050      Ser. W4, Class IO, 12/25/28 .............................................................      304,968
              12,851      Ser. 2, Class ID, 3/25/23 ...............................................................       16,063
              28,816      Ser. 16, Class PI, 11/25/12 .............................................................    2,845,549
               2,898      Ser. 19, Class PI, 8/25/12 ..............................................................       48,903
              48,277      Ser. 23, Class ES, 10/25/22 .............................................................    5,124,842
              11,048      Ser. 33, Class SG, 3/25/09 ..............................................................      975,359
              13,508      Ser. 37, Class SE, 10/25/22 .............................................................      171,147
               3,454      Ser. 50, Class SI, 4/25/23 ..............................................................       85,275
               3,955      Ser. 62, Class IC, 7/25/15 ..............................................................      475,781
               5,597      Ser. 62, Class IL, 3/25/24 ..............................................................      574,563
              12,371      Ser. 68, Class SC, 1/25/24 ..............................................................    1,136,575
               7,989      Ser. 82, Class IR, 9/25/12 ..............................................................      923,679
              49,725      Ser. 90, Class M, 1/25/28 ...............................................................    8,246,945
               8,070      Ser. 199, Class SB, 10/25/23 ............................................................      791,874
               6,157      Ser. 301, Class 2, 4/01/29 ..............................................................      758,048
              11,935      Ser. 302, Class 2, 6/01/29 ..............................................................    1,564,555
                 249    First Boston Mortgage Securities Corp., Ser. C, Class IO, 4/25/17 .........................       46,701
              37,916    GMAC Commercial Mortgage Securities, Inc., Ser. C1, Class X, 7/15/29 ......................    2,400,132
              28,694    Goldman Sachs Mortgage Securities Corp., Ser. 5, Class IO, 6/19/27(3) .....................      641,131
               1,632    Government National Mortgage Assoc., Ser. 7, Class PS, 1/20/28 ............................      182,016
              17,779    Hanover Grantor Trust, Ser. A, Class 1IO, 8/28/27(3) ......................................      133,344
                 305    Kidder Peabody Acceptance Corp., Ser. B, Class A2, 4/22/18 ................................       81,944
               7,874    Merrill Lynch Mortgage Investors, Inc., Ser. C2, Class IO, 6/15/21 ........................      182,089
              13,005    Morgan Stanley Capital 1, Inc., Ser. HF1, Class X, 7/15/293 ...............................      549,361
              24,675    Prudential Home Mortgage Securities Co., Ser. 5, Class A9, 2/25/24 ........................            0
                  65    Prudential Securities Inc., Ser. 15, Class 1G, 5/20/21 ....................................       26,302
               4,500    Residential Accredit Loans, Inc., Ser. QS7, Class A1, 4/25/33 .............................      736,875
              30,340    Small Business Administration, Ser. 1, Class IO, 4/01/15 ..................................      360,289
             285,951    Vendee Mortgage Trust, Ser. 2, Class 1IO, 5/15/29 .........................................      357,439
                                                                                                                    ------------
                        Total Interest Only Mortgage-Backed Securities ............................................   47,569,453
                                                                                                                    ------------
                        PRINCIPAL ONLY MORTGAGE-BACKED SECURITIES--13.3%
    AAA          342    Chase Mortgage Finance Corp., Ser. A, Class AP, 1/25/10 ...................................      284,121
    AAA          235    Collateralized Mortgage Obligation Trust, Ser. 29, Class A, 5/23/17 .......................      214,693
                        Countrywide Home Loan Mortgage Certificates,
    AAA        1,585      Ser. J2, Class A30, 4/25/33 .............................................................    1,394,800
    AAA        1,322      Ser. 11, Class A14, 5/25/33 .............................................................    1,209,756
    AAA        4,199      Ser. 11, Class A28, 5/25/33 .............................................................    3,842,303
                        Drexel Burnham Lambert, Inc.,
    AAA           90      Ser. K, Class 1, 9/23/17 ................................................................       81,411
    AAA        1,005      Ser. V, Class 1, 9/01/18 ................................................................      934,973
                        Federal Home Loan Mortgage Corp.,
               1,061      Ser. T-8, Class A10, 11/15/28 ...........................................................      817,273
                 634      Ser. 1418, Class M, 11/15/22 ............................................................      526,202
               3,077      Ser. 1571, Class G, 8/15/23 .............................................................    2,480,152
               7,271      Ser. 1691, Class B, 3/15/24 .............................................................    6,606,564
                 955      Ser. 1739, Class B, 2/15/24 .............................................................      898,608
                 288      Ser. 1750, Class PC, 3/15/24 ............................................................      286,716
                 532      Ser. 1857, Class PB, 12/15/08 ...........................................................      526,874
               1,506      Ser. 1896, Class PA, 11/15/23 ...........................................................    1,483,420
                        Federal National Mortgage Assoc.,
               1,428      Ser. G93-2, Class KB, 1/25/23 ...........................................................    1,298,233
               1,468      Ser. W4, Class PO, 2/25/29 ..............................................................    1,212,529
                 120      Ser. 5, Class PV, 11/25/23 ..............................................................      119,839
                 166      Ser. 7, Class J, 2/25/21 ................................................................      150,037
               6,137      Ser. 13, Class PR, 3/25/32 ..............................................................    5,705,686
               3,148      Ser. 26, Class L, 3/25/23 ...............................................................    3,092,713
               2,589      Ser. 82, Class PO, 12/25/32 .............................................................    2,466,072
               1,609      Ser. 273, Class 1, 7/01/26 ..............................................................    1,509,594
                 734      Ser. 279, Class 1, 7/01/26 ..............................................................      657,623
              24,949      Ser. 328, Class1, 11/01/32 ..............................................................   22,110,564





                       See Notes to Financial Statements.


                                       28





             PRINCIPAL
              AMOUNT
  RATING(1)    (000)                         DESCRIPTION                                                               VALUE
---------------------------------------------------------------------------------------------------------------------------------
                                                                                                           
                        PRINCIPAL ONLY MORTGAGE-BACKED SECURITIES--(CONT'D)
    AAA     $    467    First Union Residential Securitization Trust, Ser. A, Class 1-APO, 3/25/15 ................ $    430,516
    AAA       11,786    Fund America Investors Corp., Ser. C, Class B, 4/29/30 ....................................    2,741,364
    AAA          150    Housing Security Inc., Ser. D, Class D8, 6/25/23 ..........................................      139,750
    AAA          110    Structured Mortgage Asset Residential Trust, Ser. 3C, Class CX, 4/25/24 ...................       99,670
                                                                                                                    ------------
                        Total Principal Only Mortgage-Backed Securities ...........................................   63,322,056
                                                                                                                    ------------
                        COMMERCIAL MORTGAGE-BACKED SECURITIES--2.4%
    AAA       10,250    New York City Mortgage Loan Trust, Ser. 1996, Class A2, 6.75%, 6/25/11(3) .................   11,667,135
                                                                                                                    ------------
                        U.S. GOVERNMENT AND AGENCY SECURITIES--24.4%
              13,607    Overseas Private Investment Corp., 4.30% - 7.35%, 5/29/12 .................................   14,781,903
                        Small Business Administration,
               1,763      Ser. 20C-1, 7.15%, 3/01/17 ..............................................................    1,974,757
               2,843      Ser. 20E-1, 7.60%, 5/01/16 ..............................................................    3,226,310
               3,518      Ser. 20F-1, 7.55%, 6/01/16 ..............................................................    3,967,576
               2,223      Ser. 20G-1, 7.70%, 7/01/16 ..............................................................    2,518,714
               2,884      Ser. 20H-1, 7.25%, 8/01/16 ..............................................................    3,231,871
               4,480      Ser. 20K-1, 6.95%, 11/01/16 .............................................................    4,987,438
               2,105    Small Business Investment Companies, Ser. P10A-1, 6.12%, 2/01/08 ..........................    2,227,169
                        U.S. Treasury Bonds,
             155,700(2)   Zero Coupon, 11/15/24 ...................................................................   50,674,901
               8,325(2)   8.00%, 11/15/21 .........................................................................   11,678,085
                        U.S. Treasury Notes,
               3,000(2)   3.875%, 2/15/13 .........................................................................    3,003,984
              14,000(2)   4.00%, 11/15/12 .........................................................................   14,178,822
                                                                                                                    ------------
                        Total U.S. Government and Agency Securities ...............................................  116,451,530
                                                                                                                    ------------
                        COLLATERALIZED MORTGAGE OBLIGATION RESIDUALS--0.1%
                  45    FBC Mortgage Securities Trust 16, CMO, Ser. A1, 7/01/17(4) ................................      399,200
                                                                                                                    ------------
                        Total Long-Term Investments (cost $578,980,223) ...........................................  581,865,355
                                                                                                                    ------------
                        SHORT-TERM INVESTMENT--2.6%
                        DISCOUNT NOTE--2.6%
              12,700    Federal Home Loan Bank, 1.25%, 5/01/03 (cost $12,700,000) .................................   12,700,000
                                                                                                                    ------------
                        Total investments before investment sold short and outstanding option written
                        (cost $591,680,223) .......................................................................  594,565,355
                                                                                                                    ------------
                        INVESTMENT SOLD SHORT--(3.5)%
              15,750    U.S. Treasury Notes, 4.375%, 8/15/12 (proceeds $16,213,984) ...............................  (16,444,606)
                                                                                                                    ------------


             NOTIONAL
              AMOUNT
              (000)
             --------
                                                                                                           
                        OUTSTANDING OPTION WRITTEN--(0.2)%
                        CALL OPTION--(0.2)%
             $11,000    Interest Rate Swap, 5.50%, over 3 month LIBOR, expires 5/06/03 (premium received $207,753)    (1,187,046)
                                                                                                                    ------------
                        Total investments, net of investment sold short and outstanding option written--120.8% ....  576,933,703
                        Other liabilities in excess of other assets--(20.8)% ......................................  (99,475,468)
                                                                                                                    ------------
                        NET ASSETS--100% .......................................................................... $477,458,235
                                                                                                                    ============


----------
(1) Using the higher of S&P's, Moody's or Fitch's rating.
(2) Entire or partial principal amount pledged as collateral for reverse
    repurchase agreements or financial futures contracts.
(3) Security is not registered under the Securities Act of 1933. These
    securities may be resold in transactions in accordance with Rule 144A under
    that Act, to qualified institutional buyers. As of April 30, 2003, the Trust
    held 3.4% of its net assets, with a current market value of $16,201,097, in
    securities restricted as to resale.
(4) Illiquid security representing 0.1% of net assets.







                       See Notes to Financial Statements.


                                       29



PORTFOLIO OF INVESTMENTS (UNAUDITED)
APRIL 30, 2003

------------------------------
BlackRock Strategic Bond Trust
------------------------------



             PRINCIPAL
              AMOUNT
  RATING(1)    (000)                         DESCRIPTION                                                               VALUE
---------------------------------------------------------------------------------------------------------------------------------
                                                                                                           
                        LONG-TERM INVESTMENTS--144.0%
                        CORPORATE BONDS--142.0%
                        AEROSPACE & DEFENSE--4.4%
    B-      $  2,000(2) BE Aerospace, Inc., 9.50%, 11/01/08 ....................................................... $  1,320,000
    BBB        1,000    Lockheed Martin Corp., 8.20%, 12/01/09 ....................................................    1,225,369
   BBB-          650(2) Raytheon Co., 6.55%, 3/15/10 ..............................................................      719,036
    A+         1,000(2) United Technologies Corp., 6.35%, 3/01/11 .................................................    1,130,995
                                                                                                                    ------------
                                                                                                                       4,395,400
                                                                                                                    ------------
                        AUTOMOTIVE--15.8%
    BB+        2,000(2) Autonation, Inc., 9.00%, 8/01/08 ..........................................................    2,170,000
    B1         2,000(2) Collins & Aikman Products Co., 10.75%, 12/31/11 ...........................................    2,090,000
    A3         1,000(2) Daimler Chrysler NA Holding Corp., 7.30%, 1/15/12 .........................................    1,141,141
    BB         2,000    Dana Corp., 10.125%, 3/15/10 ..............................................................    2,220,000
    B3         2,000(2) Delco Remy Intl., Inc., 11.00%, 5/01/09 ...................................................    1,060,000
     B         2,000    Dura Operating Corp., Ser. D, 9.00%, 5/01/09 ..............................................    1,840,000
    B+         2,000(2) Sonic Automotive, Inc., Ser. D, 11.00%, 8/01/08 ...........................................    2,130,000
    B+         1,000    TRW Automotive, Inc., 9.375%, 2/15/13(3) ..................................................    1,090,000
     B         2,000    United Auto Group Inc., 9.625%, 3/15/12 ...................................................    2,095,000
                                                                                                                    ------------
                                                                                                                      15,836,141
                                                                                                                    ------------
                        BASIC MATERIAL--2.1%
   BB-         2,000(2) Century Aluminum Co., 11.75%, 4/15/08 .....................................................    2,055,000
                                                                                                                    ------------
                        BUILDING & DEVELOPMENT--5.3%
    BB         1,000(2) Beazer Homes USA, Inc., 8.625%, 5/15/11 ...................................................    1,080,000
    B-         2,000    Great Lakes Dredge & Dock Corp., 11.25%, 8/15/08 ..........................................    2,120,000
    Ba1        2,000    Schuler Homes, Inc., 9.375%, 7/15/09 ......................................................    2,095,000
                                                                                                                    ------------
                                                                                                                       5,295,000
                                                                                                                    ------------
                        CHEMICAL--5.4%
    BB         2,000    Lyondell Chemical Co., Ser. B, 9.875%, 5/01/07 ............................................    2,050,000
     B         1,796    Noveon, Inc., Ser. B, 11.00%, 2/28/11 .....................................................    2,011,520
    B-         1,250    Resolution Performance Products, Inc., 13.50%, 11/15/10 ...................................    1,337,500
                                                                                                                    ------------
                                                                                                                       5,399,020
                                                                                                                    ------------
                        CONGLOMERATES--4.5%
     A           325    Honeywell Intl., Inc., 7.50%, 3/01/10 .....................................................      389,409
     B         1,500    MDP Acquisitions PLC, 9.625%, 10/01/12 (Ireland)(3) .......................................    1,620,000
     B         2,000    Penhall Intl., Inc., 12.00%, 8/01/06 ......................................................    1,400,000
   BBB-        1,132(2) Tyco Intl. Group SA, 6.375%, 2/15/06 (Luxembourg) .........................................    1,126,340
                                                                                                                    ------------
                                                                                                                       4,535,749
                                                                                                                    ------------
                        CONSUMER PRODUCTS--7.8%
    B-         2,000    Friendly Ice Cream Corp., 10.50%, 12/01/07 ................................................    2,010,000
   BBB+        1,000(2) General Mills, Inc., 5.125%, 2/15/07 ......................................................    1,069,354
    BBB          575(2) Kellogg Co., Ser. B, 6.00%, 4/01/06 .......................................................      628,318
    BB-        2,000    Levi Strauss & Co., 12.25%, 12/15/12(3) ...................................................    1,680,000
    B-           500    Pantry, Inc., The, 10.25%, 10/15/07 .......................................................      497,500
    B+         2,000    Sbarro, Inc., 11.00%, 9/15/09 .............................................................    1,940,000
                                                                                                                    ------------
                                                                                                                       7,825,172
                                                                                                                    ------------
                        CONTAINERS & GLASS--3.0%
     B         1,000    Crown European Holdings SA, 10.875%, 3/01/13 (France)(3) ..................................    1,050,000
    B+         1,800    Plastipak Holdings, Inc., 10.75%, 9/01/11 .................................................    1,944,000
                                                                                                                    ------------
                                                                                                                       2,994,000
                                                                                                                    ------------
                        ECOLOGICAL SERVICES & EQUIPMENT--3.8%
    B+         2,000(2) Allied Waste NA, Inc., Ser. B, 10.00%, 8/01/09 ............................................    2,135,000
     B         1,500    Casella Waste Systems, Inc., 9.75%, 2/01/13(3) ............................................    1,620,000
                                                                                                                    ------------
                                                                                                                       3,755,000
                                                                                                                    ------------
                        ELECTRONICS--4.4%
    B+         2,000    FIMEP SA, 10.50%, 2/15/13 (France)(3) .....................................................    2,190,000
    Ba2        2,000(2) Flextronics Intl. Ltd., 9.875%, 7/01/10 (Singapore) .......................................    2,220,000
                                                                                                                    ------------
                                                                                                                       4,410,000
                                                                                                                    ------------





                       See Notes to Financial Statements.


                                       30





             PRINCIPAL
              AMOUNT
  RATING(1)    (000)                         DESCRIPTION                                                               VALUE
---------------------------------------------------------------------------------------------------------------------------------
                                                                                                           
                        ENERGY--18.9%
   BBB+     $  1,000(2) Anadarko Petroleum Corp., 5.375%, 3/01/07 ................................................. $  1,075,424
    B+         2,000(2) Calpine Corp., 10.50%, 5/15/06 ............................................................    1,690,000
    BB         2,000(2) Compagnie Generale De Geophysique SA, 10.625%, 11/15/07 (France) ..........................    2,000,000
    A-         1,000(2) Conoco, Inc., 6.95%, 4/15/29 ..............................................................    1,163,751
     B         2,000(2) Dresser, Inc., 9.375%, 4/15/11 ............................................................    2,080,000
    BBB          250(2) DTE Energy Co., 7.05%, 6/01/11 ............................................................      288,084
                        El Paso Corp.,
     B           165      7.75%, 1/15/32 ..........................................................................      127,050
     B            85      7.80%, 8/01/31 ..........................................................................       65,450
    BB-        1,000    GulfTerra Energy Partners L.P., Ser. B, 8.50%, 6/01/11 ....................................    1,070,000
   BBB+          250(2) Exelon Corp., 6.75%, 5/01/11 ..............................................................      283,981
   Baa2          325(2) FirstEnergy Corp., Ser. C, 7.375%, 11/15/31 ...............................................      355,829
    B+         2,000    Hanover Equipment Trust, Ser. A, 8.50%, 9/01/08 ...........................................    2,040,000
    BB-        1,000    Leviathan Gas Pipeline Partners LP, Ser. B, 10.375%, 6/01/09 ..............................    1,082,500
    BBB          250    Occidental Petroleum Corp., 6.75%, 1/15/12 ................................................      285,566
    BBB        1,000(2) Progress Energy, Inc., 6.75%, 3/01/06 .....................................................    1,096,117
     B         2,000    Swift Energy Co., 10.25%, 8/01/09 .........................................................    2,100,000
    BB-        2,000    Western Gas Resources, Inc., 10.00%, 6/15/09 ..............................................    2,180,000
                                                                                                                    ------------
                                                                                                                      18,983,752
                                                                                                                    ------------
                        FINANCE & BANKING--16.9%
    A+           500(2) Allstate Corp., 7.875%, 5/01/05 ...........................................................      557,728
    Aa3        1,000(2) Bank One Corp., 6.50%, 2/01/06 ............................................................    1,109,280
    Aa3          650(2) Barclays Bank PLC, 8.55%, 9/29/49 (United Kingdom)3 .......................................      809,900
     A           325(2) Bear Stearns Co., Inc., 6.50%, 5/01/06 ....................................................      360,906
    B+         2,000(2) Bluewater Finance Ltd., 10.25%, 2/15/12 (United Kingdom) ..................................    2,007,000
    AA+        3,000(2) Citigroup, Inc., 5.75%, 5/10/06 ...........................................................    3,276,540
                        Ford Motor Credit Co.,
    A3           750(2)   5.80%, 1/12/09 ..........................................................................      709,781
    A3         2,000(2)   6.875%, 2/01/06 .........................................................................    2,075,957
                        General Motors Acceptance Corp.,
    A2           250(2)   6.75%, 1/15/06 ..........................................................................      261,780
    A2           900(2)   6.875%, 9/15/11 .........................................................................      909,703
    A2           300(2)   8.00%, 11/01/31 .........................................................................      307,484
    AAA          850(2) KFW Intl. Finance, Inc., 5.25%, 6/28/06 ...................................................      931,780
    Ba1        1,000    Labranche & Co., Inc., 12.00%, 3/02/07 ....................................................    1,095,000
    A+         1,000(2) Lehman Brothers Holdings, Inc., 6.25%, 5/15/06 ............................................    1,095,682
     A           325(2) MetLife, Inc., 6.125%, 12/01/11 ...........................................................      362,426
   BBB+        1,000    Sears Roebuck Acceptance Corp., 6.75%, 8/15/11 ............................................    1,021,929
                                                                                                                    ------------
                                                                                                                      16,892,876
                                                                                                                    ------------
                        FOREST PRODUCTS--3.1%
    Ba2        2,000(2) Caraustar Industries, Inc., 9.875%, 4/01/11 ...............................................    2,060,000
    BBB        1,000(2) Weyerhaeuser Co., 6.125%, 3/15/07 .........................................................    1,090,593
                                                                                                                    ------------
                                                                                                                       3,150,593
                                                                                                                    ------------
                        HEALTH CARE--6.7%
     D         2,000    HealthSouth Corp., 6.875%, 6/15/05 ........................................................    1,300,000
    B-         2,000    Insight Health Services Corp., Ser. B, 9.875%, 11/01/11 ...................................    1,860,000
    B+         2,000    Matria Healthcare, Inc., Ser. B, 11.00%, 5/01/08 ..........................................    1,960,000
    B-         1,500    United Surgical Partners Intl., Inc., 10.00%, 12/15/11 ....................................    1,590,000
                                                                                                                    ------------
                                                                                                                       6,710,000
                                                                                                                    ------------
                        HOTELS & CASINO--2.9%
    BB+        2,000    Park Place Entertainment Corp., 7.875%, 3/15/10 ...........................................    2,065,000
     B         1,000    Resorts Intl. Hotel & Casino, Inc., 11.50%, 3/15/09 .......................................      870,000
                                                                                                                    ------------
                                                                                                                       2,935,000
                                                                                                                    ------------
                        INDUSTRIAL EQUIPMENT--4.0%
    BB-        2,000    Mail Well I Corporation, 9.625%, 3/15/12 ..................................................    2,060,000
    B+         2,000(2) United Rentals, Inc., Ser. B, 9.25%, 1/15/09 ..............................................    1,910,000
                                                                                                                    ------------
                                                                                                                       3,970,000
                                                                                                                    ------------





                       See Notes to Financial Statements.


                                       31





             PRINCIPAL
              AMOUNT
  RATING(1)    (000)                         DESCRIPTION                                                               VALUE
---------------------------------------------------------------------------------------------------------------------------------
                                                                                                           
                        LEISURE--1.5%
   BB+      $  1,500    Royal Caribbean Cruises Ltd., 8.75%, 2/02/11 (Liberia) .................................... $  1,522,500
                                                                                                                    ------------
                        MEDIA--13.4%
    NR         2,000(2) Adelphia Communications Corporation, Ser. B, 10.50%, 7/15/04(4) ...........................      990,000
    B1         1,500(2) Alliance Atlantis Communications, Inc., 13.00%, 12/15/09 (Canada) .........................    1,710,000
   BBB+        1,000(2) AOL Time Warner, Inc., 7.70%, 5/01/32 .....................................................    1,112,233
   CCC-        2,000    Charter Communications Holdings LLC, 11.125%, 1/15/11 .....................................    1,330,000
    BBB        1,000    Comcast Cable Communications, Inc., 6.875%, 6/15/09 .......................................    1,105,000
    BB-        2,000    EchoStar DBS Corp., 10.375%, 10/01/07 .....................................................    2,240,000
    B-         2,000    Nextmedia Operating, Inc., 10.75%, 7/01/11 ................................................    2,215,000
    A-         1,000(2) Viacom, Inc., 6.625%, 5/15/11 .............................................................    1,145,111
    B-         1,500    WRC Media Corp., 12.75%, 11/15/09 .........................................................    1,537,500
                                                                                                                    ------------
                                                                                                                      13,384,844
                                                                                                                    ------------
                        REAL ESTATE--2.5%
    A-           500(2) ERP Operating LP, 6.95%, 3/02/11 ..........................................................      557,298
                        Felcore Lodging LP,
    Ba3        1,000      8.50%, 6/01/11 ..........................................................................      967,500
    Ba3        1,000      9.50%, 9/15/08 ..........................................................................      997,500
                                                                                                                    ------------
                                                                                                                       2,522,298
                                                                                                                    ------------
                        TECHNOLOGY--2.1%
    BB+        2,000    Unisys Corp., 8.125%, 6/01/06 .............................................................    2,145,000
                                                                                                                    ------------
                        TELECOMMUNICATION--8.2%
   BBB+          900(2) AT&T Corp., 6.50%, 11/15/06 ...............................................................      964,676
    B3         1,000    Crown Castle Int'l. Corp., 10.75%, 8/01/11 ................................................    1,035,000
    Ba3        2,000    PanAmSat Corp., 8.50%, 2/01/12 ............................................................    2,160,000
   CCC+          450    Qwest Capital Funding, Inc., 5.875%, 8/03/04 ..............................................      418,500
    Aa3        2,000(2) Verizon New England, Inc., 6.50%, 9/15/11 .................................................    2,261,075
     A         1,000(2) Vodafone Group PLC, 7.75%, 2/15/10 (United Kingdom) .......................................    1,210,540
                        Worldcom, Inc.,
    NR           400      7.375%, 1/15/06(3,4) ....................................................................      112,000
    NR           200      8.00%, 5/15/06(4) .......................................................................       56,000
                                                                                                                    ------------
                                                                                                                       8,217,791
                                                                                                                    ------------
                        TRANSPORTATION--5.3%
   BBB+          500    Canadian National Railway Co., 6.90%, 7/15/28 (Canada) ....................................      576,850
   Baa1          400    Norfolk Southern Corp., 7.05%, 5/01/37 ....................................................      461,269
     B         2,000    Pacer Intl., Inc., Ser. B, 11.75%, 6/01/07 ................................................    2,120,000
     B         2,000    RailAmerica Transp. Corp., 12.875%, 8/15/10 ...............................................    2,180,000
                                                                                                                    ------------
                                                                                                                       5,338,119
                                                                                                                    ------------
                        Total Corporate Bonds .....................................................................  142,273,255
                                                                                                                    ------------

                        FOREIGN GOVENMENT BONDS--1.1%
    Baa2       1,000    United Mexican States, 8.125%, 12/30/19 (Mexico) ..........................................    1,130,000
                                                                                                                    ------------
                        SUPRANATIONAL--0.9%
    AAA          850(2) European Investment Bank, 4.875%, 9/06/06 .................................................      919,861
                                                                                                                    ------------

                        TOTAL INVESTMENTS--144.0% (COST $143,798,660) .............................................  144,323,116
                        LIABILITIES IN EXCESS OF OTHER ASSETS--(44.0)% ............................................  (44,098,269)
                                                                                                                    ------------

                        NET ASSETS--100% .......................................................................... $100,224,847
                                                                                                                    ------------


----------
(1) Using the higher of S&P's, Moody's or Fitch's rating.
(2) Entire or partial principal amount pledged as collateral for reverse
    repurchase agreements or financial futures contracts.
(3) Security is not registered under the Securities Act of 1933. These
    securities may be resold in transactions in accordance with Rule 144A under
    that Act, to qualified institutional buyers. As of April 30, 2003, the Trust
    held 10.0% of its net assets, with a current market value of $10,071,100, in
    securities restricted as to resale.
(4) Issuer is technically in default.







                       See Notes to Financial Statements.


                                       32



STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED)
APRIL 30, 2003
--------------------------------------------------------------------------------



                                                                          Broad Investment
                                                                             Grade 2009          Core
Assets                                                                      Term Trust(1)      Bond Trust
                                                                          ----------------   -------------
                                                                                    
Investments at value(2) ..............................................     $  67,486,179     $ 604,469,491
Cash .................................................................            75,072           267,764
Receivable from investments sold .....................................           142,795        33,363,149
Variation margin receivable ..........................................            39,188           499,366
Collateral deposited with brokers ....................................                --                --
Receivable for closed forward foreign currency contracts, net ........                --           102,514
Interest receivable ..................................................           825,961         9,556,326
Unrealized appreciation on interest rate swaps .......................                --                --
Other assets .........................................................            10,547            20,603
                                                                           -------------     -------------
                                                                              68,579,742       648,279,213
                                                                           -------------     -------------

Liabilities
Reverse repurchase agreements ........................................        18,166,250        52,728,594
Payable to custodian .................................................                --                --
Payable for investments purchased ....................................                --       181,314,682
Loan payable .........................................................                --                --
Investments sold short at value(3) ...................................                --                --
Outstanding options written at value(4) ..............................                --                --
Interest payable .....................................................             4,348               100
Interest rate floors at value ........................................                --                --
Payable for open forward foreign currency contracts ..................                --           232,302
Unrealized depreciation on interest rate swaps and purchase commitment                --                --
Variation margin payable .............................................                --                --
Investment advisory fee payable ......................................            22,668           216,107
Administration fee payable ...........................................             6,182                --
Deferred Directors/Trustees fees .....................................             9,500            13,524
Other accrued expenses ...............................................           173,221            75,789
                                                                           -------------     -------------
                                                                              18,382,169       234,581,098
                                                                           -------------     -------------
Net Assets ...........................................................     $  50,197,573     $ 413,698,115
                                                                           =============     =============
Composition of Net Assets:
  Par value ..........................................................     $      29,571     $      27,019
  Paid-in capital in excess of par ...................................        40,240,039       386,206,969
  Cost of shares held in treasury(5) .................................                --                --
  Undistributed (distributions in excess of) net investment income ...         7,769,200        (3,746,782)
  Accumulated net realized gain (loss) ...............................         1,208,563        13,661,944
  Net unrealized appreciation (depreciation) .........................           950,200        17,073,033
  Accumulated net realized and unrealized foreign currency loss ......                --           475,932
                                                                           -------------     -------------
Net assets, April 30, 2003 ...........................................     $  50,197,573     $ 413,698,115
                                                                           =============     =============
Net asset value per common share(6) ..................................            $16.98            $15.31
                                                                                  ======            ======

(1)Consolidated Statement of Assets and Liabilities
(2)Investments at cost                                                     $  66,489,325     $ 586,812,069
(3)Proceeds received                                                                  --                --
(4)Premium received                                                                   --                --
(5)Shares held in treasury                                                            --                --
(6)Common shares issued and outstanding                                        2,957,093        27,018,774







                       See Notes to Financial Statements.


                                       33



--------------------------------------------------------------------------------




                                   INCOME
               HIGH              OPPORTUNITY            INCOME             STRATEGIC
            YIELD TRUST             TRUST                TRUST            BOND TRUST
           ------------         ------------        ------------         ------------
                                                                
           $ 58,801,618         $599,994,605        $594,565,355         $144,323,116
                     --              103,912             349,511               58,472
                     --            2,974,659           1,278,602                   --
                     --            1,445,063                  --                   --
                     --            1,180,000          16,464,688                   --
                     --                   --                  --                   --
              2,420,967            7,652,624           5,454,311            3,834,357
                     --            1,146,903                  --                   --
                 51,781               76,914              85,796                2,933
           ------------         ------------        ------------         ------------
             61,274,366          614,574,680         618,198,263          148,218,878
           ------------         ------------        ------------         ------------


                     --          187,816,125         110,819,750           47,747,000
                130,057                   --                  --                   --
                     --            2,946,894                  --                   --
             19,250,000                   --                  --                   --
                     --                   --          16,444,606                   --
                     --              323,740           1,187,046                   --
                 28,690              536,147           1,523,155                   --
                     --                   --           1,626,107                   --
                     --                   --                  --                   --
                     --               11,220           8,474,732                   --
                     --                   38             103,380                   --
                 51,575              204,004             253,933               65,021
                  4,912               34,001              78,133                   --
                 14,185               69,232              84,681                2,933
                 71,363              104,960             144,505              179,077
           ------------         ------------        ------------         ------------
             19,550,782          192,046,361         140,740,028           47,994,031
           ------------         ------------        ------------         ------------
           $ 41,723,584         $422,528,319        $477,458,235         $100,224,847
           ------------         ------------        ------------         ------------

           $      6,367         $    344,497        $    632,471         $      7,026
             93,758,505          406,532,068         563,097,029          100,127,403
                     --          (17,377,850)                 --                   --
                (70,114)           5,340,133           8,842,687            1,377,247
            (32,427,076)           9,827,500         (86,680,931)          (1,811,285)
            (19,544,098)          18,057,969          (8,433,021)             524,456
                     --             (195,998)                 --                   --
           ------------         ------------        ------------         ------------
           $ 41,723,584         $422,528,319        $477,458,235         $100,224,847
           ------------         ------------        ------------         ------------
                  $6.55               $12.27               $7.55               $14.27
                  =====               ======               =====               ======


           $ 78,345,716         $580,342,044        $591,680,223         $143,798,660
                     --                   --          16,810,234                   --
                     --               56,660             207,753                   --
                     --            1,757,400                  --                   --
              6,367,294           34,449,693          63,247,058            7,025,735








                                       34



STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE SIX MONTHS ENDED APRIL 30, 2003
--------------------------------------------------------------------------------



                                                                   BROAD INVESTMENT
                                                                      GRADE 2009           CORE
INVESTMENT INCOME                                                    TERM TRUST(1)      BOND TRUST
                                                                   ----------------    ------------
                                                                                 
  Interest income ..............................................     $  2,267,041      $ 14,561,365
                                                                     ------------      ------------
EXPENSES
  Investment advisory ..........................................          138,035         1,519,509
  Administration ...............................................           37,646                --
  Transfer agent ...............................................            5,380             8,305
  Custodian ....................................................           33,703            71,335
  Reports to shareholders ......................................           28,287            47,965
  Directors/Trustees fees ......................................            7,109            23,542
  Registration .................................................            1,175            15,620
  Independent accountants ......................................           24,697            21,502
  Interest expense .............................................          131,598           180,954
  Excise tax ...................................................          219,172                --
  Legal ........................................................            9,663            13,885
  Miscellaneous ................................................           11,751            54,133
                                                                     ------------      ------------
    Total expenses .............................................          648,216         1,956,750
    Less fees waived by Advisor ................................               --                --
    Less fees paid indirectly ..................................               --            (4,390)
                                                                     ------------      ------------
    Net expenses ...............................................          648,216         1,952,360
                                                                     ------------      ------------
Net investment income ..........................................        1,618,825        12,609,005
                                                                     ------------      ------------

REALIZED AND UNREALIZED GAIN (LOSS) Net realized gain (loss) on:
    Investments ................................................         (127,696)        8,567,737
    Foreign currency ...........................................               --           573,241
    Futures ....................................................          322,209         5,078,583
    Interest rate caps .........................................               --                --
    Interest rate swaps ........................................               --                --
    Options written ............................................               --                --
    Short sales ................................................               --                --
                                                                     ------------      ------------
                                                                          194,513        14,219,561
                                                                     ------------      ------------
Net change in unrealized appreciation/depreciation on:
    Investments ................................................       (1,409,314)       15,838,819
    Foreign currency ...........................................               --           (49,074)
    Futures ....................................................         (119,548)          (81,596)
    Interest rate caps .........................................               --                --
    Interest rate floors .......................................               --                --
    Interest rate swaps ........................................               --                --
    Options written ............................................               --           134,580
    Short sales ................................................               --                --
                                                                     ------------      ------------
                                                                       (1,528,862)       15,842,729
                                                                     ------------      ------------
Net gain (loss) on investments .................................       (1,334,349)       30,062,290
                                                                     ------------      ------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ...........     $    284,476      $ 42,671,295
                                                                     ============      ============


----------
(1) Consolidated Statement of Operations.




                       See Notes to Financial Statements.


                                       35





                            INCOME
        HIGH              OPPORTUNITY           INCOME              STRATEGIC
     YIELD TRUST             TRUST               TRUST             BOND TRUST
    ------------         ------------        ------------         ------------
                                                         
    $  4,262,804         $ 16,474,347        $ 21,284,662         $  6,268,135
    ------------         ------------        ------------         ------------

         308,225            1,218,930           1,560,470              515,550
          29,355              203,155             480,145                   --
          10,909               17,035              43,141                7,831
          15,762              102,040              86,904               25,055
          29,753               67,383              61,985               14,828
           5,950               26,633              32,351                6,229
          11,157               15,620              24,049               11,157
          17,209               54,465              54,103               20,426
         186,714              849,627             857,092              366,074
              --                   --                  --                   --
          12,397               44,902              21,660                6,089
          10,916               76,704              87,481               13,577
    ------------         ------------        ------------         ------------
         638,347            2,676,494           3,309,381              986,816
              --                   --                  --             (137,480)
          (1,382)              (2,863)             (6,094)              (6,112)
    ------------         ------------        ------------         ------------
         636,965            2,673,631           3,303,287              843,224
    ------------         ------------        ------------         ------------
       3,625,839           13,800,716          17,981,375            5,424,911
    ------------         ------------        ------------         ------------


      (2,083,995)          (1,268,598)            920,149           (1,494,577)
              --             (195,998)                 --                   --
              --           10,871,248             (65,475)                  --
              --                   --              (1,317)                  --
              --                5,570            (882,431)                  --
              --               64,050             234,850                   --
              --              (27,844)           (162,481)                  --
    ------------         ------------        ------------         ------------
      (2,083,995)           9,448,428              43,295           (1,494,577)
    ------------         ------------        ------------         ------------

       4,784,614           16,220,556          (8,646,770)          12,621,690
              --              168,091                  --                   --
              --           (2,262,090)         (1,162,947)                  --
              --                   --             354,083                   --
              --                   --             381,599                   --
              --             (969,381)           (439,203)                  --
              --             (157,822)           (578,680)                  --
              --              599,240            (230,622)                  --
    ------------         ------------        ------------         ------------
       4,784,614           13,598,594         (10,322,540)          12,621,690
    ------------         ------------        ------------         ------------
       2,700,619           23,047,022         (10,279,245)          11,127,113
    ------------         ------------        ------------         ------------
    $  6,326,458         $ 36,847,738        $  7,702,130         $ 16,552,024
    ============         ============        ============         ============







                                       36



STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE SIX MONTHS ENDED APRIL 30, 2003
--------------------------------------------------------------------------------



RECONCILIATION OF NET INCREASE (DECREASE)                               BROAD INVESTMENT
   IN NET ASSETS RESULTING FROM OPERATIONS TO                              GRADE 2009           CORE
   NET CASH FLOWS PROVIDED BY (USED FOR)                                  TERM TRUST(1)      BOND TRUST
   OPERATING ACTIVITIES                                                 ----------------    ------------

                                                                                      
Net increase in net assets resulting from operations ................     $    284,476      $ 42,671,295
                                                                          ------------      ------------
Decrease (increase) in investments ..................................        5,505,802        (5,899,816)
Net realized loss (gain) ............................................         (194,513)      (14,219,561)
Decrease (increase) in unrealized appreciation/depreciation .........        1,528,862       (15,842,729)
Decrease in interest rate caps ......................................               --                --
Increase in interest rate floors ....................................               --                --
Decrease in interest rate swaps and purchase commitments ............               --                --
Decrease (increase) in receivable for investments sold ..............         (142,795)       (2,055,612)
Increase in receivable for forward foreign currency contracts .......               --          (102,514)
Decrease (increase) in variation margin receivable ..................          (15,626)          (89,091)
Decrease (increase) in collateral deposited with brokers ............               --                --
Decrease (increase) in interest receivable ..........................           39,201        (1,672,899)
Decrease (increase) in other assets .................................           (1,384)           (8,094)
Decrease in payable for investments purchased .......................               --        (3,196,129)
Increase (decrease) in payable for forward foreign currency contracts               --           103,042
Decrease in variation margin payable ................................               --                --
Increase (decrease) in interest payable .............................          (12,975)              (48)
Increase (decrease) in outstanding options written ..................               --          (334,219)
Increase (decrease) in investments sold short .......................               --                --
Increase (decrease) in investment advisory fee payable ..............           (1,361)           (4,694)
Decrease in administration fee payable ..............................             (371)               --
Increase in deferred Directors/Trustees fees ........................            1,823             4,428
Increase (decrease) in other accrued expenses .......................         (158,318)          (35,753)
                                                                          ------------      ------------
  Total adjustments .................................................        6,548,345       (43,353,689)
                                                                          ------------      ------------
Net cash flows provided by (used for) operating activities ..........     $  6,832,821      $   (682,394)
                                                                          ============      ============

INCREASE (DECREASE) IN CASH AND FOREIGN CURRENCY
Net cash flows provided by (used for) operating activities ..........     $  6,832,821      $   (682,394)
                                                                          ------------      ------------
Cash flows provided by (used for) financing activities:
  Increase (decrease) in reverse repurchase agreements ..............       (5,502,937)       17,326,094
  Cash dividends paid ...............................................       (1,330,536)      (16,211,242)
                                                                          ------------      ------------
Net cash flows provided by (used for) financing activities ..........       (6,833,473)        1,114,852
                                                                          ------------      ------------
Effect of changes in exchange rate ..................................               --                --
                                                                          ------------      ------------
  Net increase (decrease) in cash ...................................             (652)          432,458
  Cash at beginning of period .......................................           75,724          (164,694)
                                                                          ------------      ------------
  Cash at end of period .............................................     $     75,072      $    267,764
                                                                          ============      ============


----------
(1) Consolidated Statement of Cash Flows.




                       See Notes to Financial Statements.


                                       37



--------------------------------------------------------------------------------



                             INCOME
          HIGH             OPPORTUNITY            INCOME            STRATEGIC
      YIELD TRUST             TRUST                TRUST           BOND TRUST
     -------------        ------------        ------------         ------------

                                                          
     $  6,326,458         $ 36,847,738        $  7,702,130         $ 16,552,024
     ------------         ------------        ------------         ------------
          175,007          (18,213,420)         83,353,851           (3,797,110)
        2,083,995           (9,448,428)            (43,295)           1,494,577
       (4,784,614)         (13,598,594)         10,322,540          (12,621,690)
               --                   --                  20                   --
               --                   --            (560,474)                  --
               --              980,601             449,403                   --
               --           98,916,946          18,402,695                   --
               --                   --                  --                   --
               --             (756,221)            296,214                   --
               --           (1,180,000)            769,687                   --
         (108,956)          (1,857,398)          1,368,150             (149,088)
              488               16,537              (5,500)                (476)
               --          (98,621,183)         (1,460,612)                  --
               --                   --                  --                   --
               --                   38             103,380                   --
          (11,874)             256,256            (763,696)             (35,552)
               --               90,022             330,080                   --
               --          (73,551,740)         16,444,606                   --
           (2,379)              (2,181)            (25,901)               1,787
             (226)                (363)             (7,476)                  --
            1,593                8,037              11,006                1,182
            8,101             (190,923)           (103,353)              17,978
     ------------         ------------        ------------         ------------
       (2,638,865)        (117,152,014)        128,881,325          (15,088,392)
     ------------         ------------        ------------         ------------
     $  3,687,593         $(80,304,276)       $136,583,455         $  1,463,632
     ============         ============        ============         ============


     $  3,687,593         $(80,304,276)       $136,583,455         $  1,463,632
     ------------         ------------        ------------         ------------

               --          102,112,338         (94,972,514)           3,523,625
       (3,555,578)         (21,799,162)        (41,629,035)          (4,921,483)
     ------------         ------------        ------------         ------------
       (3,555,578)          80,313,176        (136,601,549)           1,397,858
     ------------         ------------        ------------         ------------
               --                3,681                  --                   --
     ------------         ------------        ------------         ------------
          132,015               12,581             (18,094)              65,774
         (262,072)              91,331             367,605               (7,302)
     ------------         ------------        ------------         ------------
     $   (130,057)        $    103,912        $    349,511         $     58,472
     ============         ============        ============         ============








                                       38



STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED APRIL 30, 2003 (UNAUDITED) AND FOR THE PERIOD(1) ENDED
OCTOBER 31, 2002
--------------------------------------------------------------------------------



                                                             BROAD INVESTMENT GRADE
                                                                2009 TERM TRUST(2)                CORE BOND TRUST
                                                        -----------------------------    ------------------------------
                                                            2003             2002             2003             2002
                                                       -------------    -------------    -------------    -------------

                                                                                              
INCREASE (DECREASE) IN NET ASSETS

OPERATIONS:
  Net investment income ............................   $   1,618,825    $   5,953,008    $  12,609,005    $  26,838,280
  Net realized gain (loss) .........................         194,513        2,180,535       14,219,561           78,567
  Net change in unrealized appreciation/depreciation      (1,528,862)      (2,064,590)      15,842,729        1,070,052
                                                       -------------    -------------    -------------    -------------
Net increase in net assets resulting
  from operations ..................................         284,476        6,068,953       42,671,295       27,986,899
                                                       -------------    -------------    -------------    -------------

DIVIDENDS AND DISTRIBUTIONS:
  From net investment income .......................      (1,330,536)      (2,291,473)     (16,211,242)     (26,838,280)
  From net realized gains ..........................              --               --               --               --
  Tax return of capital distributions ..............              --               --               --               --
  In excess of net investment income ...............              --               --               --         (179,545)
                                                       -------------    -------------    -------------    -------------
    Total dividends and distributions ..............      (1,330,536)      (2,291,473)     (16,211,242)     (27,017,825)
                                                       -------------    -------------    -------------    -------------

CAPITAL SHARE TRANSACTIONS:
  Net proceeds from the issuance of common shares ..              --               --               --      357,484,731
  Net proceeds from the underwriters'
    overallotment option exercised .................              --               --               --       28,650,000
  Trust shares issued in conjunction with
    reinvestment of dividends ......................              --               --               --          134,257
  Cost of Trust shares reacquired ..................              --               --               --               --
                                                       -------------    -------------    -------------    -------------
    Net proceeds from capital share transactions ...              --               --               --      386,268,988
                                                       -------------    -------------    -------------    -------------
      Total increase (decrease) ....................      (1,046,060)       3,777,480       26,460,053      387,238,062
                                                       -------------    -------------    -------------    -------------

NET ASSETS
Beginning of period ................................      51,243,633       47,466,153      387,238,062               --
                                                       -------------    -------------    -------------    -------------
End of period ......................................   $  50,197,573    $  51,243,633    $ 413,698,115    $ 387,238,062
                                                       =============    =============    =============    =============
End of period undistributed (distributions in
  excess of) net investment income .................   $   7,769,200    $   7,480,911    $  (3,746,782)   $    (144,545)


----------
(1) Commencement of investment operations for Core Bond was November 30, 2001.
    This information includes the initial investment by BlackRock Funding, Inc.
    The other Trusts' statements are for a full year.
(2) Consolidated Statement of Changes in Net Assets.




                       See Notes to Financial Statements.


                                       39





             HIGH YIELD TRUST                     INCOME OPPORTUNITY TRUST                       INCOME TRUST
    ---------------------------------        ---------------------------------        ---------------------------------
         2003                2002                 2003                2002                 2003                2002
    ------------         ------------        ------------         ------------        ------------         ------------




                                                                                            
    $  3,625,839         $  7,613,863        $ 13,800,716         $ 39,603,548        $ 17,981,375         $ 62,183,766
      (2,083,995)          (8,468,860)          9,448,428           (6,747,774)             43,295           28,398,002
       4,784,614            2,224,397          13,598,594            5,135,503         (10,322,540)         (50,286,165)
    ------------         ------------        ------------         ------------        ------------         ------------

       6,326,458            1,369,400          36,847,738           37,991,277           7,702,130           40,295,603
    ------------         ------------        ------------         ------------        ------------         ------------


      (3,625,839)          (7,613,863)        (13,434,708)         (25,885,698)        (44,475,823)         (35,876,922)
              --                   --          (8,364,454)                  --                  --                   --
              --             (584,069)                 --                   --                  --                   --
         (70,114)                  --                  --                   --                  --                   --
    ------------         ------------        ------------         ------------        ------------         ------------
      (3,695,953)          (8,197,932)        (21,799,162)         (25,885,698)        (44,475,823)         (35,876,922)
    ------------         ------------        ------------         ------------        ------------         ------------


              --                   --                  --                   --                  --                   --


              --                   --                  --                   --                  --                   --

         140,375              261,647                  --                   --           2,846,788              202,011
              --                   --                  --           (2,381,796)                 --                   --
    ------------         ------------        ------------         ------------        ------------         ------------
         140,375              261,647                  --           (2,381,796)          2,846,788              202,011
    ------------         ------------        ------------         ------------        ------------         ------------
       2,770,880           (6,566,885)         15,048,576            9,723,783         (33,926,905)           4,620,692
    ------------         ------------        ------------         ------------        ------------         ------------


      38,952,704           45,519,589         407,479,743          397,755,960         511,385,140          506,764,448
    ------------         ------------        ------------         ------------        ------------         ------------
    $ 41,723,584         $ 38,952,704        $422,528,319         $407,479,743        $477,458,235         $511,385,140
    ============         ============        ============         ============        ============         ============

    $    (70,114)        $         --        $  5,340,133         $  4,974,125        $  8,842,687         $ 35,337,135








                                       40



STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED APRIL 30, 2003 (UNAUDITED) AND FOR THE PERIOD(1) ENDED
OCTOBER 31, 2002
--------------------------------------------------------------------------------




                                                              STRATEGIC BOND TRUST
                                                         ------------------------------
                                                              2003             2002
                                                         -------------    -------------

                                                                    
INCREASE (DECREASE) IN NET ASSETS

OPERATIONS:
  Net investment income ..............................   $   5,424,911    $   6,886,556
  Net realized loss ..................................      (1,494,577)        (316,708)
  Net change in unrealized appreciation/depreciation .      12,621,690      (12,097,234)
                                                         -------------    -------------
Net increase (decrease) in net assets resulting
  from operations ....................................      16,552,024       (5,527,386)
                                                         -------------    -------------
DIVIDENDS FROM NET INVESTMENT INCOME .................      (5,053,253)      (5,890,967)
                                                         -------------    -------------

CAPITAL SHARE TRANSACTIONS:
  Net proceeds from the issuance of common shares ....              --       99,920,015
  Trust shares issued in conjunction with reinvestment
    of dividends .....................................         131,770           92,644
                                                         -------------    -------------
    Net proceeds from capital share transactions .....         131,770      100,012,659
                                                         -------------    -------------
      Total increase .................................      11,630,541       88,594,306
                                                         -------------    -------------

NET ASSETS
Beginning of period ..................................      88,594,306               --
                                                         -------------    -------------
End of period ........................................   $ 100,224,847    $  88,594,306
                                                         =============    =============
End of period undistributed net investment income ....   $   1,377,247    $   1,005,589


----------
(1) Commencement of investment operations for Strategic Bond was February 28,
    2002. This information includes the initial investment by BlackRock Funding,
    Inc.






                       See Notes to Financial Statements.


                                       41



CONSOLIDATED FINANCIAL HIGHLIGHTS

------------------------------------------------
BlackRock Broad Investment Grade 2009 Term Trust
------------------------------------------------



                                         SIX MONTHS ENDED                           YEAR ENDED OCTOBER 31,
                                          APRIL 30, 2003     ----------------------------------------------------------------------
                                            (UNAUDITED)         2002           2001           2000           1999           1998
                                         ----------------    ----------     ----------     ----------     ----------     ----------
                                                                                                         
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period(1) .     $  17.33         $  16.05       $  13.64       $  13.64       $  15.01       $  14.48
                                              --------         --------       --------       --------       --------       --------
Investment operations:
  Net investment income .................         0.55             2.01           1.17           0.91           0.93           1.20
  Net realized and unrealized gain (loss)        (0.45)            0.04           2.01          (0.09)         (1.45)          0.23
                                              --------         --------       --------       --------       --------       --------
Net increase (decrease) from
  investment operations .................         0.10             2.05           3.18           0.82          (0.52)          1.43
                                              --------         --------       --------       --------       --------       --------
Dividends from net investment income ....        (0.45)           (0.77)         (0.77)         (0.82)         (0.85)         (0.90)
                                              --------         --------       --------       --------       --------       --------
Net asset value, end of period(1) .......     $  16.98         $  17.33       $  16.05       $  13.64       $  13.64       $  15.01
                                              ========         ========       ========       ========       ========       ========
Market value, end of period(1) ..........     $  16.40         $  16.18       $  14.39       $  11.94       $  11.44       $  13.25
                                              ========         ========       ========       ========       ========       ========
TOTAL INVESTMENT RETURN(2) ..............         4.18%           18.34%         27.66%         12.11%         (7.68)%        17.15%
                                              ========         ========       ========       ========       ========       ========
RATIOS TO AVERAGE NET ASSETS:
Total expenses ..........................         2.58%(3)         2.50%          3.52%          4.36%          3.49%          3.51%
Net expenses ............................         2.58%(3)         2.50%          3.52%          4.36%          3.49%          3.51%
Net expenses excluding interest expense
  and excise tax ........................         1.19%(3)         1.16%          1.16%          1.31%          1.03%          1.01%
Net investment income ...................         6.45%(3)        12.22%          7.93%          6.83%          6.58%          8.13%
SUPPLEMENTALDATA:
Average net assets (000) ................     $ 50,611         $ 48,731       $ 43,701       $ 39,425       $ 41,909       $ 43,482
Portfolio turnover ......................           12%              35%            19%            36%            25%            25%
Net assets, end of period (000) .........     $ 50,198         $ 51,244       $ 47,466       $ 40,321       $ 40,345       $ 44,395
Reverse repurchase agreements
  outstanding, end of period (000) ......     $ 18,166         $ 23,669       $ 13,373       $ 18,850       $ 16,304       $ 19,770
Asset coverage(4) .......................     $  3,763         $  3,165       $  4,550       $  3,139       $  3,475       $  3,246


----------
(1) Net asset value and market value are published in BARRON'S on Saturday and
    THE WALL STREET JOURNAL on Monday.
(2) Total investment return is calculated assuming a purchase of a 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, if
    any, are assumed for purposes of this calculation to be reinvested at prices
    obtained under the Trust's dividend reinvestment plan. Total investment
    returns do not reflect brokerage commissions. Total investment returns for
    less than a full year are not annualized. Past performance is not a
    guarantee of future results.
(3) Annualized.
(4) Per $1,000 of reverse repurchase agreements outstanding.

The information above represents the unaudited operating performance for a share
outstanding, total investment returns, ratios to average net assets and other
supplemental data for each period indicated. This information has been
determined based upon financial information provided in the financial statements
and market value data for the Trust's shares.





                       See Notes to Financial Statements.


                                       42



FINANCIAL HIGHLIGHTS

-------------------------
BlackRock Core Bond Trust
-------------------------



                                                                   SIX MONTHS       FOR THE PERIOD
                                                                     ENDED       NOVEMBER 30, 2001(1)
                                                                 APRIL 30, 2003        THROUGH
                                                                  (UNAUDITED)      OCTOBER 31, 2002
                                                                 --------------  -------------------
                                                                                 
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period(2) ......................      $   14.33          $   14.33
                                                                    ---------          ---------
Investment operations:
   Net investment income .....................................           0.47               0.99
   Net realized and unrealized gain ..........................           1.11               0.04
                                                                    ---------          ---------
Net increase from investment operations ......................           1.58               1.03
                                                                    ---------          ---------
Dividends and distributions from net investment income .......          (0.60)             (1.00)
                                                                    ---------          ---------
Capital charges with respect to issuance of shares ...........          (0.60)             (0.03)
                                                                    ---------          ---------
Net asset value, end of period(2) ............................      $   15.31          $   14.33
                                                                    =========          =========
Market value, end of period(2) ...............................      $   14.88          $   13.82
                                                                    =========          =========

TOTAL INVESTMENT RETURN(3) ...................................          12.23%             (1.02)%
                                                                    =========          =========
RATIOS TO AVERAGE NET ASSETS:(4)
Total expenses ...............................................           0.99%              1.04%
Net expenses .................................................           0.99%              1.04%
Net expenses excluding interest expense ......................           0.90%              0.93%
Net investment income ........................................           6.40%              7.67%
SUPPLEMENTAL DATA:
Average net assets (000) .....................................      $ 397,596          $ 380,277
Portfolio turnover ...........................................            208%               419%
Net assets, end of period (000) ..............................      $ 413,698          $ 387,238
Reverse repurchase agreements outstanding, end of period (000)      $  52,729          $ 165,215
Asset coverage(5) ............................................      $   8,846          $   3,342


----------
(1) Commencement of investment operations. This information includes the initial
    investments by BlackRock Funding, Inc. Net asset value immediately after the
    closing of the public offering was $14.30.
(2) Net asset value and market value are published in BARRON'S on Saturday and
    THE WALL STREET JOURNAL on Monday.
(3) Total investment return is calculated assuming a purchase of a 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, if
    any, are assumed for purposes of this calculation to be reinvested at prices
    obtained under the Trust's dividend reinvestment plan. Total investment
    returns do not reflect brokerage commissions. Total investment returns for
    less than a full year are not annualized. Past performance is not a
    guarantee of future results.
(4) Annualized.
(5) Per $1,000 of reverse repurchase agreements outstanding.

The information above represents the unaudited operating performance for a share
outstanding, total investment returns, ratios to average net assets and other
supplemental data for each period indicated. This information has been
determined based upon financial information provided in the financial statements
and market value data for the Trust's shares.






                       See Notes to Financial Statements.


                                       43



FINANCIAL HIGHLIGHTS

--------------------------------------------------------------------------------



                                                                                                               FOR THE PERIOD
                                                                                                             DECEMBER 23, 1998(1)
                                                  SIX MONTHS ENDED            YEAR ENDED OCTOBER 31,               THROUGH
                                                   APRIL 30, 2003   ----------------------------------------     OCTOBER 31,
                                                     (UNAUDITED)       2002          2001           2000            1999
                                                     ----------     ----------     ----------     ---------- ------------------
                                                                                                    
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period(2) ..........     $   6.13       $   7.20       $  10.60       $  13.58       $  15.00
                                                       --------       --------       --------       --------       --------
Investment operations:
   Net investment income .........................         0.57           1.20           1.32           1.66           1.29
   Net realized and unrealized gain (loss) .......         0.43          (0.98)         (3.13)         (3.02)         (1.52)
                                                       --------       --------       --------       --------       --------
Net increase (decrease) from investment operations         1.00           0.22          (1.81)         (1.36)         (0.23)
                                                       --------       --------       --------       --------       --------
Dividends and distributions:
   From net investment income ....................        (0.58)         (1.20)         (1.48)         (1.62)         (1.17)
   Tax return of capital .........................           --          (0.09)         (0.11)            --             --
                                                       --------       --------       --------       --------       --------
Total dividends and distributions ................        (0.58)         (1.29)         (1.59)         (1.62)         (1.17)
                                                       --------       --------       --------       --------       --------
Capital charge with respect to issuance of shares            --             --             --             --          (0.02)
                                                       --------       --------       --------       --------       --------
Net asset value, end of period(2) ................     $   6.55       $   6.13       $   7.20       $  10.60       $  13.58
                                                       ========       ========       ========       ========       ========
Market value, end of period(2) ...................     $  10.29       $   8.68       $   9.18       $  11.88       $  12.50
                                                       ========       ========       ========       ========       ========

TOTAL INVESTMENT RETURN(3) .......................        26.28%          7.97%        (11.31)%         8.23%         (9.68)%
                                                       ========       ========       ========       ========       ========
RATIOS TO AVERAGE NET ASSETS:
Total expenses ...................................       3.22%(4)         3.47%          4.90%          5.29%         4.16%(4)
Net expenses .....................................       3.22%(4)         3.47%          4.90%          5.29%         4.08%(4)
Net expenses excluding interest expense ..........       2.27%(4)         2.20%          2.03%          1.99%         1.98%(4)
Net investment income ............................      18.32%(4)        16.29%         14.23%         13.12%        10.34%(4)
SUPPLEMENTAL DATA:
Average net assets (000) .........................     $ 39,917       $ 46,751       $ 58,553       $ 79,602       $ 92,116
Portfolio turnover ...............................           22%           147%            71%            92%           121%
Net assets, end of period (000) ..................     $ 41,724       $ 38,953       $ 45,520       $ 66,867       $ 85,652
Loan outstanding, end of period (000) ............     $ 19,250       $ 19,250       $ 23,000       $ 33,000       $ 41,000
Asset coverage(5) ................................     $  3,167       $  3,024       $  2,983       $  3,032       $  3,094


----------
(1) Commencement of investment operations. This information includes the initial
    investment by BlackRock Financial Management, Inc.
(2) Net asset value and market value are published in BARRON'S on Saturday and
    THE WALL STREET JOURNAL on Monday.
(3) Total investment return is calculated assuming a purchase of a 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, if
    any, 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 less than a full year are not annualized. Past performance is
    not a guarantee of future results.
(4) Annualized.
(5) Per $1,000 of loan outstanding.

The information above represents the unaudited operating performance for a share
outstanding, total investment returns, ratios to average net assets and other
supplemental data for each period indicated. This information has been
determined based upon financial information provided in the financial statements
and market value data for the Trust's shares.






                       See Notes to Financial Statements.


                                       44



FINANCIAL HIGHLIGHTS

----------------------------------
BlackRock Income Opportunity Trust
----------------------------------



                                            SIX MONTHS ENDED                    YEAR ENDED OCTOBER 31,
                                             APRIL 30, 2003   ---------------------------------------------------------
                                              (UNAUDITED)       2002        2001         2000        1999        1998
                                            ----------------  --------    --------     --------    --------    --------
                                                                                             
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period(1) ..     $  11.83       $  11.47    $  11.03     $  11.45    $  11.88    $  12.47
                                               --------       --------    --------     --------    --------    --------
Investment operations:
   Net investment income .................         0.40           1.15        0.87         0.70        0.84        0.78
   Net realized and unrealized gain (loss)         0.67          (0.05)       0.34        (0.31)      (0.46)      (0.53)
                                               --------       --------    --------     --------    --------    --------
Net increase from investment operations ..         1.07           1.10        1.21         0.39        0.38        0.25
                                               --------       --------    --------     --------    --------    --------
Dividends and distributions:
   From net investment income ............        (0.39)         (0.75)      (0.23)       (0.39)      (0.84)      (0.84)
   From net realized gains ...............        (0.24)            --          --        (0.04)         --          --
   Tax return of capital .................           --             --       (0.54)       (0.41)         --          --
                                               --------       --------    --------     --------    --------    --------
Total dividends and distributions ........        (0.63)         (0.75)      (0.77)       (0.84)      (0.84)      (0.84)
                                               --------       --------    --------     --------    --------    --------
Increase resulting from Trust shares
   repurchased ...........................           --           0.01       0.002         0.03        0.03          --
                                               --------       --------    --------     --------    --------    --------
Net asset value, end of period(1) ........     $  12.27       $  11.83    $  11.47     $  11.03    $  11.45    $  11.88
                                               ========       ========    ========     ========    ========    ========
Market value, end of period(1) ...........     $  11.17       $  10.50    $  10.41     $   9.75    $   9.69    $   9.88
                                               ========       ========    ========     ========    ========    ========

TOTAL INVESTMENT RETURN(3) ...............        12.68%          8.44%      15.09%        9.82%       6.70%       1.34%
                                               ========       ========    ========     ========    ========    ========
RATIOS TO AVERAGE NET ASSETS:
Total expenses ...........................         1.32%(4)       1.40%       3.62%        3.76%       3.18%       3.01%
Net expenses .............................         1.32%(4)       1.40%       3.62%        3.76%       3.18%       3.01%
Net expenses excluding interest expense ..         0.90%(4)       0.93%       1.01%        0.88%       0.85%       0.88%
Net investment income ....................         6.79%(4)      10.04%       7.76%        6.14%       7.14%       6.39%
SUPPLEMENTAL DATA:
Average net assets (000) .................     $409,677       $394,495    $388,478     $396,157    $426,283    $444,051
Portfolio turnover .......................           36%           153%         83%          82%        186%        153%
Net assets, end of period (000) ..........     $422,528       $407,480    $397,756     $383,651    $406,178    $430,107
Reverse repurchase agreements outstanding,
   end of period (000) ...................     $187,816       $ 85,704    $136,385     $178,033    $149,346    $173,520
Asset coverage(5) ........................     $  3,250       $  5,755    $  3,916     $  3,155    $  3,720    $  3,479


----------
(1) Net asset value and market value published in BARRON'S on Saturday and THE
    WALL STREET JOURNAL on Monday.
(2) Less than $0.005 per share.
(3) Total investment return is calculated assuming a purchase of a 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, if
    any, 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
    less than a full year are not annualized. Past performance is not a
    guarantee of future results.
(4) Annualized.
(5) Per $1,000 of reverse repurchase agreements outstanding.

The information above represents the unaudited operating performance for a share
outstanding, total investment returns, ratios to average net assets and other
supplemental data for each period indicated. This information has been
determined based upon financial information provided in the financial statements
and market value data for the Trust's shares.






                       See Notes to Financial Statements.


                                       45



FINANCIAL HIGHLIGHTS

----------------------
BlackRock Income Trust
----------------------



                                           SIX MONTHS ENDED                      YEAR ENDED OCTOBER 31,
                                            APRIL 30, 2003    ------------------------------------------------------------
                                             (UNAUDITED)         2002         2001         2000         1999         1998
                                           ----------------    --------     --------     --------     --------     --------
                                                                                                 
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period(1) ..     $   8.13        $   8.06     $   7.23     $   7.31     $   7.94     $   8.12
                                               --------        --------     --------     --------     --------     --------
Investment operations:
   Net investment income .................         0.28            0.99         0.56         0.50         0.73         0.62
   Net realized and unrealized gain (loss)        (0.15)          (0.35)        0.83        (0.02)       (0.80)       (0.24)
                                               --------        --------     --------     --------     --------     --------
Net increase (decrease) from
   investment operations .................         0.13            0.64         1.39         0.48        (0.07)        0.38
                                               --------        --------     --------     --------     --------     --------
Dividends from net investment income .....        (0.71)          (0.57)       (0.56)       (0.56)       (0.56)       (0.56)
                                               --------        --------     --------     --------     --------     --------
Net asset value, end of period(1) ........     $   7.55        $   8.13     $   8.06     $   7.23     $   7.31     $   7.94
                                               ========        ========     ========     ========     ========     ========
Market value, end of period(1) ...........     $   8.07        $   8.07     $   7.26     $   6.38     $   6.13     $   6.94
                                               ========        ========     ========     ========     ========     ========
TOTAL INVESTMENT RETURN(2) ...............         9.47%          15.35%       23.23%       14.01%       (4.04)%       9.29%
                                               ========        ========     ========     ========     ========     ========
RATIOS TO AVERAGE NET ASSETS:
Total expense ............................         1.38%(3)        2.05%        2.54%        2.78%        3.03%        3.33%
Net expenses .............................         1.38%(3)        2.05%        2.54%        2.78%        3.03%        3.33%
Net expenses excluding interest expense ..         1.02%(3)        1.03%        1.03%        1.05%        1.01%        1.01%
Net investment income ....................         7.49%(3)       12.28%        7.43%        7.11%        9.54%        7.74%
SUPPLEMENTAL DATA:
Average net assets (000) .................     $484,124        $506,533     $470,185     $448,027     $482,685     $506,858
Portfolio turnover .......................           32%            125%          32%         114%         144%         214%
Net assets, end of period (000) ..........     $477,458        $511,385     $506,764     $454,510     $459,399     $499,075
Reverse repurchase agreements outstanding,
   end of period (000) ...................     $110,820        $205,792     $118,634     $ 64,460     $186,451     $198,336
Asset coverage(4) ........................     $  5,308        $  3,485     $  5,272     $  8,095     $  3,478     $  3,520


----------
(1) Net asset value and market value are published in BARRON'S on Saturday and
    THE WALL STREET JOURNAL on Monday.
(2) Total investment return is calculated assuming a purchase of a 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, if
    any, are assumed for purposes of this calculation to be reinvested at prices
    obtained under the Trust's dividend reinvestment plan. Total investment
    returns do not reflect brokerage commissions. Total investment returns for
    less than a full year are not annualized. Past performance is not a
    guarantee of future results.
(3) Annualized.
(4) Per $1,000 of reverse repurchase agreements outstanding.

The information above represents the unaudited operating performance for a share
outstanding, total investment returns, ratios to average net assets and other
supplemental data for each period indicated. This information has been
determined based upon financial information provided in the financial statements
and market value data for the Trust's shares.






                       See Notes to Financial Statements.


                                       46



FINANCIAL HIGHLIGHTS

------------------------------
BlackRock Strategic Bond Trust
------------------------------



                                                                                  FOR THE PERIOD
                                                              SIX MONTHS ENDED  FEBRUARY 28, 2002(1)
                                                               APRIL 30, 2003        THROUGH
                                                                 (UNAUDITED)     OCTOBER 31, 2002
                                                              ----------------  -------------------
                                                                                
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period(2) ......................   $  12.63             $  14.33
                                                                 --------             --------
Investment operations:
   Net investment income .....................................       0.77                 0.98
   Net realized and unrealized loss ..........................       1.59                (1.77)
                                                                 --------             --------
Net increase from investment operations ......................       2.36                (0.79)
                                                                 --------             --------
Dividends from net investment income .........................         --                (0.84)
                                                                 --------             --------
Capital charges with respect to issuance of shares ...........      (0.72)               (0.07)
                                                                 --------             --------
Net asset value, end of period(2) ............................   $  14.27             $  12.63
                                                                 ========             ========
Market value, end of period(2) ...............................   $  14.65             $  12.35
                                                                 ========             ========
TOTAL INVESTMENT RETURN(3) ...................................      25.05%              (12.34)%
                                                                 ========             ========
RATIOS TO AVERAGE NET ASSETS:(4)
Total expenses ...............................................       2.11%                2.57%
Net expenses .................................................       1.80%                2.26%
Net expenses excluding interest expense ......................       1.02%                1.25%
Net investment income ........................................      11.60%               10.68%
SUPPLEMENTAL DATA:
Average net assets (000) .....................................   $ 94,271             $ 95,675
Portfolio turnover ...........................................         19%                  22%
Net assets, end of period (000) ..............................   $100,225             $ 88,594
Reverse repurchase agreements outstanding, end of period (000)   $ 47,747             $ 44,223
Asset coverage(5) ............................................   $  3,099             $  3,003


----------
(1) Commencement of investment operations. This information includes the initial
    investments by BlackRock Funding, Inc. Net asset value immediately after the
    closing of the public offering was $14.25.
(2) Net asset value and market value are published in BARRON'S on Saturday and
    THE WALL STREET JOURNAL on Monday.
(3) Total investment return is calculated assuming a purchase of a 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, if
    any, are assumed for purposes of this calculation to be reinvested at prices
    obtained under the Trust's dividend reinvestment plan. Total investment
    returns do not reflect brokerage commissions. Total investment returns for
    less than a full year are not annualized. Past performance is not a
    guarantee of future results.
(4) Annualized.
(5) Per $1,000 of reverse repurchase agreements outstanding.

The information above represents the unaudited operating performance for a share
outstanding, total investment returns, ratios to average net assets and other
supplemental data for each period indicated. This information has been
determined based upon financial information provided in the financial statements
and market value data for the Trust's shares.






                       See Notes to Financial Statements.


                                       47



NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------

NOTE 1. ORGANIZATION & ACCOUNTING  POLICIES

The BlackRock Broad  Investment  Grade 2009 Term Trust Inc.  ("Broad  Investment
Grade"), BlackRock Core Bond Trust ("Core Bond"), The BlackRock High Yield Trust
("High Yield"),  BlackRock Income Opportunity Trust ("Income Opportunity"),  The
BlackRock Income Trust Inc. ("Income Trust") and BlackRock  Strategic Bond Trust
("Strategic  Bond")  are  registered  as  diversified,   closed-end   management
investment companies under the Investment Company Act of 1940, as amended. Broad
Investment Grade, Income Opportunity and Income Trust are Maryland corporations.
Core Bond,  High Yield and Strategic  Bond are  organized as Delaware  statutory
trusts.

   On December 3, 1999, Broad Investment Grade transferred a substantial portion
of its total  assets to a 100% owned  regulated  investment  company  subsidiary
called BCT  Subsidiary,  Inc. The  financial  statements  and these notes to the
financial statements for Broad Investment Grade are consolidated and include the
operations of both Broad  Investment Grade and its wholly owned subsidiary after
elimination of all intercompany transactions and balances.

The following is a summary of significant  accounting  policies  followed by the
Trusts.

SECURITIES VALUATION:  The Trusts value most of their securities on the basis of
current market quotations provided by dealers or pricing services selected under
the supervision of each Trust's Board of  Directors/Trustees  (the "Board").  In
determining the value of a particular security, pricing services may use certain
information  with respect to  transactions in such  securities,  quotations from
dealers,  market transactions in comparable  securities,  various  relationships
observed in the market between  securities,  and calculated yield measures based
on valuation  technology  commonly  employed in the market for such  securities.
Exchange  traded options are valued at their last sales price as of the close of
options trading on applicable exchanges.  In the absence of a last sale, options
are valued at the average of the quoted bid and asked  prices as of the close of
business. A futures contract is valued at the last sale price as of the close of
the commodities exchange on which it trades. Short-term securities may be valued
at amortized  cost.  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, each Trust's Board.

SECURITIES  TRANSACTIONS  AND INVESTMENT  INCOME:  Securities  transactions  are
recorded on trade date.  Realized and unrealized gains and losses are calculated
on the  identified  cost basis.  Each Trust also records  interest  income on an
accrual  basis and  amortizes  premium  and/or  accretes  discount on securities
purchased using the interest method.

REPURCHASE AGREEMENTS: In connection with transactions in repurchase agreements,
a Trust's  custodian takes possession of the underlying  collateral  securities,
the  value of which at least  equals  the  principal  amount  of the  repurchase
transaction,  including  accrued  interest.  To the extent  that any  repurchase
transaction   exceeds  one  business  day,  the  value  of  the   collateral  is
marked-to-market  on a daily basis to ensure the adequacy of the collateral.  If
the seller  defaults and the value of the  collateral  declines or if bankruptcy
proceedings   are  commenced  with  respect  to  the  seller  of  the  security,
realization of the collateral by a Trust may be delayed or limited.

OPTION SELLING/PURCHASING:  When a Trust sells or purchases an option, an amount
equal to the premium received or paid by the Trust is recorded as a liability or
an asset and is subsequently  adjusted to the current market value of the option
written or  purchased.  Premiums  received  or paid from  writing or  purchasing
options which expire unexercised are treated by the Trust on the expiration date
as realized gains or losses.  The difference  between the premium and the amount
paid or received on effecting a closing purchase or sale transaction,  including
brokerage commissions,  is also treated as a realized gain or loss. If an option
is  exercised,  the premium paid or received is added to the  proceeds  from the
sale or cost of the purchase in determining  whether a Trust has realized a gain
or a loss on investment transactions.  A Trust, as writer of an option, may have
no  control  over  whether  the  underlying  securities  may be sold  (call)  or
purchased  (put) and as a result bears the market risk of an unfavorable  change
in the price of the security underlying the written option.

   Options,  when used by the Trusts,  help in maintaining a targeted  duration.
Duration is a measure of the price  sensitivity  of a security or a portfolio to
relative changes in interest rates. For instance, a duration of "one" means that
a portfolio's or a security's price would be expected to change by approximately
one percent  with a one percent  change in interest  rates,  while a duration of
five  would  imply  that the price  would  move  approximately  five  percent in
relation to a one percent change in interest rates.

   Option  selling  and  purchasing  may be used by the  Trusts as an attempt to
manage the duration of positions,  or collections of positions,  so that changes
in interest rates do not adversely affect the targeted duration of the portfolio
unexpectedly. A call option gives the purchaser of the option the right (but not
obligation)  to buy,  and  obligates  the  seller to sell  (when  the  option is
exercised),  the  underlying  position at the exercise price at any time or at a
specified time during the option period. A put option gives the holder the right
to sell and obligates the writer to buy the underlying  position at the exercise
price at any time or at a specified time during the option  period.  Put or call
options  can be  purchased  or sold to  effectively  help  manage  the  targeted
duration of the portfolio.

   The main risk that is associated with  purchasing  options is that the option
expires without being exercised.  In this case, the option expires worthless and
the premium paid for the option is considered the loss. The risk associated with
writing call options is that a Trust may forgo the  opportunity  for a profit if
the  market  value  of the  underlying  position  increases  and the  option  is
exercised.  The risk in writing  put options is that a Trust may incur a loss if
the  market  value  of the  underlying  position  decreases  and the  option  is
exercised.  In addition,  as with futures  contracts,  the Trust risks not being
able to enter into a closing transaction for the written option as the result of
an illiquid market.

INTEREST RATE SWAPS: In an interest rate swap, one investor pays a floating rate
of interest on a notional principal amount and receives a fixed rate of interest
on  the  same  notional  principal  amount  for  a  specified  period  of  time.
Alternatively, an investor may pay a fixed rate



                                       48



and  receive  a  floating   rate.   Interest   rate  swaps  are   efficient   as
asset/liability  management tools. In more complex swaps, the notional principal
amount may decline (or amortize) over time.

   During the term of the swap,  changes in the value of the swap are recognized
as unrealized gains or losses by "marking-to-market" to reflect the market value
of the swap. When the swap is terminated, a Trust will record a realized gain or
loss equal to the difference  between the proceeds from (or cost of) the closing
transaction and the Trust's basis in the contract, if any.

   The Trusts are exposed to credit loss in the event of  non-performance by the
other party to the swap.  However,  the Trusts closely  monitor swaps and do not
anticipate non-performance by any counterparty.

SWAP  OPTIONS:  Swap  options are similar to options on  securities  except that
instead of selling or purchasing the right to buy or sell a security, the writer
or  purchaser of the swap option is granting or buying the right to enter into a
previously  agreed  upon  interest  rate swap  agreement  at any time before the
expiration of the option.  Premiums  received or paid from writing or purchasing
options are recorded as liabilities or assets and are  subsequently  adjusted to
the current market value of the option written or purchased.  Premiums  received
or paid from writing or purchasing  options which expire unexercised are treated
by a Trust on the expiration  date as realized  gains or losses.  The difference
between the  premium  and the amount  paid or  received  on  effecting a closing
purchase or sale transaction, including brokerage commission, is also treated as
a realized gain or loss. If an option is exercised, the premium paid or received
is added to the proceeds  from the sale or cost of the  purchase in  determining
whether a Trust has realized a gain or loss on investment transactions.

   The main risk that is  associated  with  purchasing  swap options is that the
swap option expires  without being  exercised.  In this case, the option expires
worthless and the premium paid for the swap option is considered  the loss.  The
main risk that is  associated  with the  writing of a swap  option is the market
risk of an unfavorable  change in the value of the interest rate swap underlying
the written swap option.

   Swap  options may be used by the Trusts to manage the duration of the Trusts'
portfolios in a manner similar to more generic options described above.

INTEREST  RATE CAPS:  Interest  rate caps are  similar to  interest  rate swaps,
except  that one party  agrees to pay a fee,  while  the  other  party  pays the
excess, if any, of a floating rate over a specified fixed or floating rate.

   Interest  rate caps are  intended to both manage the  duration of the Trusts'
portfolios and their exposure to changes in short-term  interest  rates.  Owning
interest rate caps reduces a portfolio's duration, making them less sensitive to
changes in interest rates from a market value perspective.  The effect on income
involves  protection from rising  short-term  interest  rates,  which the Trusts
experience primarily in the form of leverage.

   The Trusts are exposed to credit loss in the event of  non-performance by the
other party to the  interest  rate cap.  However,  the Trusts do not  anticipate
non-performance by any counterparty.

   Transactions  fees paid or received by the Trusts are recognized as assets or
liabilities  and amortized or accreted into interest  expense or income over the
life of the interest rate cap. The asset or liability is  subsequently  adjusted
to the current market value of the interest rate cap purchased or sold.  Changes
in the value of the interest rate cap are  recognized  as  unrealized  gains and
losses.

INTEREST  RATE FLOORS:  Interest rate floors are similar to interest rate swaps,
except  that one party  agrees to pay a fee,  while  the  other  party  pays the
deficiency, if any, of a floating rate under a specified fixed or floating rate.

   Interest  rate floors are used by the Trusts to both  manage the  duration of
the  portfolios  and their  exposure to changes in  short-term  interest  rates.
Selling  interest  rate floors  reduces a  portfolios  duration,  making it less
sensitive  to changes in interest  rates from a market  value  perspective.  The
Trusts'  leverage  provides extra income in a period of falling  rates.  Selling
floors reduces some of that advantage by partially  monetizing it as an up front
payment which the Trusts receive.

   The Trusts are exposed to credit loss in the event of  non-performance by the
other party to the interest rate floor.  However,  the Trusts do not  anticipate
non-performance by any counterparty.

   Transactions  fees paid or received by the Trusts are recognized as assets or
liabilities  and amortized or accreted into interest  expense or income over the
life of the interest rate floor. The asset or liability is subsequently adjusted
to the  current  market  value of the  interest  rate floor  purchased  or sold.
Changes in the value of the interest  rate floor are  recognized  as  unrealized
gains and losses.

FINANCIAL  FUTURES  CONTRACTS:  A futures  contract is an agreement  between two
parties to buy and sell a financial instrument for a set price on a future date.
Initial margin deposits are made upon entering into futures contracts and can be
either  cash or  securities.  During the period the  futures  contract  is open,
changes in the value of the  contract  are  recognized  as  unrealized  gains or
losses by  "marking-to-market"  on a daily basis to reflect the market  value of
the contract at the end of each day's  trading.  Variation  margin  payments are
made or  received,  depending  upon  whether  unrealized  gains  or  losses  are
incurred.  When the contract is closed,  a Trust records a realized gain or loss
equal to the  difference  between  the  proceeds  from (or cost of) the  closing
transaction and the Trust's basis in the contract.

   Financial futures contracts,  when used by the Trusts,  help in maintaining a
targeted  duration.  Futures  contracts  can be sold to  effectively  shorten an
otherwise longer duration portfolio. In the same sense, futures contracts can be
purchased  to lengthen a portfolio  that is shorter  than its  duration  target.
Thus, by buying or selling futures  contracts,  the Trusts may attempt to manage
the duration of  positions  so that changes in interest  rates do not change the
duration of the portfolio unexpectedly.

FORWARD CURRENCY  CONTRACTS:  The Trusts enter into forward  currency  contracts
primarily to facilitate  settlement of purchases and sales of foreign securities
and to help manage the overall exposure to foreign currency.  A forward contract
is a commitment to purchase or sell a foreign currency at a future date (usually
the security  transaction  settlement date) at a negotiated forward rate. In the
event that a secu-



                                       49



rity fails to settle within the normal settlement  period,  the forward currency
contract  is  renegotiated  at a new  rate.  The gain or loss  arising  from the
difference between the settlement value of the original and renegotiated forward
contracts  is isolated  and is  included in net  realized  gains  (losses)  from
foreign  currency  transactions.  Risks may  arise as a result of the  potential
inability of the counterparties to meet the terms of their contract.

   Forward  currency  contracts,  when used by the  Trusts,  help to manage  the
overall exposure to the foreign currency backing some of the investments held by
the Trusts. Forward currency contracts are not meant to be used to eliminate all
of the exposure to the foreign  currency,  rather they allow the Trusts to limit
their exposure to foreign currency within a narrow band to the objectives of the
Trusts.

FOREIGN  CURRENCY  TRANSLATION:  Foreign  currency  amounts are translated  into
United States dollars on the following basis:

   (i)  market value of investment securities,  other assets and liabilities--at
        the New York City noon rates of exchange.

   (ii) purchases and sales of investment  securities,  income and  expenses--at
        the  rates  of  exchange  prevailing  on the  respective  dates  of such
        transactions.

   The Trusts  isolate  that portion of the results of  operations  arising as a
result of changes in the foreign  exchange rates from the  fluctuations  arising
from changes in the market prices of securities  held at period end.  Similarly,
the Trusts  isolate  the effect of  changes in foreign  exchange  rates from the
fluctuations  arising from changes in the market prices of portfolio  securities
sold during the period.

   Net realized  and  unrealized  foreign  exchange  gains and losses  including
realized  foreign exchange gains and losses from sales and maturities of foreign
portfolio securities, maturities of foreign reverse repurchase agreements, sales
of foreign  currencies,  currency gains or losses realized between the trade and
settlement dates on securities transactions,  the difference between the amounts
of interest  and  discount  recorded on the  Trusts'  books and the U.S.  dollar
equivalent  amounts actually received or paid and changes in unrealized  foreign
exchange gains and losses in the value of portfolio  securities and other assets
and liabilities arising as a result of changes in the exchange rate.

   Foreign security and currency transactions may involve certain considerations
and risks not  typically  associated  with those of domestic  origin,  including
unanticipated  movements  in the value of the foreign  currency  relative to the
U.S. dollar.

SHORT  SALES:  The  Trusts  may make short  sales of  securities  as a method of
managing  potential  price declines in similar  securities  owned.  When a Trust
makes a short sale,  it may borrow the security sold short and deliver it to the
broker-dealer  through  which  it made  the  short  sale as  collateral  for its
obligation to deliver the security upon  conclusion of the sale.  The Trusts may
have to pay a fee to borrow the  particular  securities  and may be obligated to
pay over any payments received on such borrowed  securities.  A gain, limited to
the price at which the Trust sold the security short, or a loss, unlimited as to
dollar amount,  will be recognized  upon the  termination of a short sale if the
market price is greater or less than the proceeds originally received.

SECURITY  LENDING:  The Trusts may lend their portfolio  securities to qualified
institutions.  The loans are secured by collateral at least equal, at all times,
to the market value of the  securities  loaned.  The Trusts may bear the risk of
delay in recovery of, or even loss of rights in, the  securities  loaned  should
the borrower of the securities fail financially. The Trusts receive compensation
for lending  their  securities  in the form of interest on the loan.  The Trusts
also continue to receive interest on the securities loaned, and any gain or loss
in the market price of the  securities  loaned that may occur during the term of
the loan will be for the  accounts of the Trusts.  The Trusts did not enter into
any security lending transactions during the six months ended April 30, 2003.

SEGREGATION:  In cases in which the Investment  Company Act of 1940, as amended,
and the interpretive positions of the Securities and Exchange Commission ("SEC")
require that each Trust segregate assets in connection with certain  investments
(e.g.,  when  issued  securities,   reverse  repurchase  agreements  or  futures
contracts), each Trust will, consistent with certain interpretive letters issued
by the SEC,  designate  on its  books  and  records  cash or other  liquid  debt
securities  having a  market  value at least  equal  to the  amount  that  would
otherwise be required to be physically segregated.

FEDERAL INCOME TAXES: It is each Trust's (excluding Strategic Bond) intention to
continue,  and  Strategic  Bond  intends to elect,  to be treated as a regulated
investment company under the Internal Revenue Code and to distribute  sufficient
amounts of their taxable income to  shareholders.  Therefore,  no Federal income
tax  provisions  are  required.  As  part  of a  tax  planning  strategy,  Broad
Investment  Grade  intends to retain a portion of its taxable  income and pay an
excise tax on the undistributed amounts.

DIVIDENDS  AND  DISTRIBUTIONS:  Each  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.

   Income  distributions  and  capital  gain  distributions  are  determined  in
accordance  with  income  tax  regulations  which  may  differ  from  accounting
principles generally accepted in the United States of America.

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 these
estimates.

DEFERRED  COMPENSATION  PLAN:  Under  the  revised  deferred  compensation  plan
approved  by each  Trust's  Board,  non-interested  Trustees  may elect to defer
receipt of all or a portion of their annual compensation. As of January 1, 2003,
the Board  elected to  require  its  members to defer a portion of their  annual
complex compensation  pursuant to the plan. Deferred amounts earn an approximate
return as though equivalent dollar amounts had been invested in common shares of
other BlackRock Trusts selected by the Directors/Trustees.

   The  deferred  compensation  plan is not  funded and  obligations  thereunder
represent general unsecured claims against the general assets of the Trust. Each
Trust may, however, elect to invest in common shares of those Trusts selected by
the Directors/Trustees in order to match its deferred compensation obligations.



                                       50



NOTE 2. AGREEMENTS

Each Trust has an Investment Management Agreement with BlackRock Advisors,  Inc.
(the "Advisor"), which is a wholly owned subsidiary of BlackRock, Inc. BlackRock
Financial Management, Inc., a wholly owned subsidiary of BlackRock, Inc., serves
as  sub-advisor  to both Core Bond and  Strategic  Bond.  BlackRock,  Inc. is an
indirect,  majority owned subsidiary of The PNC Financial  Services Group,  Inc.
The investment  management agreement on Core Bond and Strategic Bond covers both
investment advisory and administration  services.  Broad Investment Grade has an
Administration Agreement with Princeton Administrators,  L.P. ("Princeton"),  an
indirect wholly owned affiliate of Merrill Lynch & Co., Inc. High Yield,  Income
Opportunity  and Income Trust have an  Administration  Agreement with Prudential
Investments  LLC   ("Prudential"),   an  indirect  wholly  owned  subsidiary  of
Prudential Financial, Inc.

   Each Trust's  investment  advisory fee paid to the Advisor is computed weekly
and payable monthly based on an annual rate, 0.55% for Broad  Investment  Grade,
0.60% for Income Opportunity and 0.65% for Income Trust, of each Trust's average
net assets and 0.55% for Core Bond, 1.05% for High Yield and 0.75% for Strategic
Bond, of each Trust's average weekly managed assets. The Advisor has voluntarily
agreed to waive a portion of the  investment  advisory fees or other expenses on
Strategic  Bond as a percentage of its average weekly managed assets as follows:
0.20% for the first 5 years of the Trust's operations, 0.15% in year 6, 0.10% in
year 7 and 0.05% in year 8.

   The  administration  fee paid to each Trust's  respective  administrator,  on
other than Core Bond and Strategic  Bond, is computed weekly and payable monthly
based on an annual  rate,  0.15% for Broad  Investment  Grade,  0.10% for Income
Opportunity  and 0.20% of the first  $500  million  and 0.15% on any  excess for
Income Trust,  of each Trust's average net assets and 0.10% for High Yield based
on its average weekly managed assets.

   Pursuant to the agreements,  the Advisor provides  continuous  supervision of
the investment portfolio and pays the compensation of officers of each Trust who
are  affiliated  persons of the Advisor.  The Advisor pays occupancy and certain
clerical and  accounting  costs for Core Bond and Strategic  Bond.  Each Trust's
respective  administrator  pays  occupancy and certain  clerical and  accounting
costs of their  respective  Trust(s).  Each  Trust  bears  all  other  costs and
expenses,  which include  reimbursements to the Advisor for certain  operational
support services provided to each Trust.

   Pursuant to the terms of their  custody  agreements,  Core Bond,  High Yield,
Income  Opportunity,  Income Trust and Strategic Bond received  earnings credits
from its  custodian for positive  cash  balances  maintained,  which are used to
offset  custody  fees during the six months  ended April 30,  2003,  the amounts
earned were $4,390, $1,382, $2,863, $6,094 and $6,112, respectively.

NOTE 3. PORTFOLIO  SECURITIES

Purchases and sales of investment securities, other than short-term investments,
dollar rolls and U.S. government securities,  for the six months ended April 30,
2003, aggregated as follows:

TRUST                                    PURCHASES             SALES
-----                                 --------------      ---------------
Broad Investment Grade                $    2,793,709      $    10,778,554
Core Bond                              1,093,538,346        1,050,553,478
High Yield                                12,358,553           12,848,350
Income Opportunity                       244,183,901          184,572,814
Income Trust                              65,856,647           83,410,882
Strategic Bond                            25,405,635           23,286,165

Purchases and sales of U.S. government securities for the six months ended April
30, 2003, aggregated as follows:

TRUST                                    PURCHASES             SALES
-----                                 --------------      ---------------
Broad Investment Grade                $    5,144,969      $            --
Core Bond                                243,923,419          266,608,529
High Yield                                        --                   --
Income Opportunity                         5,983,552           19,938,516
Income Trust                             130,038,105          122,103,351
Strategic Bond                             1,940,222            3,130,971

   The Trust may from time to time  purchase  in the  secondary  market  certain
mortgage  pass-through  securities  packaged or master serviced by affiliates or
mortgage related securities  containing loans or mortgages originated by PNCBank
or its affiliates,  including  Midland Loan Services,  Inc. It is possible under
certain  circumstances,  that PNC Mortgage  Securities  Corp. or its affiliates,
including Midland Loan Services, Inc., could have interests that are in conflict
with the holders of these  mortgage  backed  securities,  and such holders could
have rights against PNC Mortgage  Securities Corp. or its affiliates,  including
Midland Loan Services, Inc.

   At April 30,  2003,  the total  cost of  securities  for  Federal  income tax
purposes and the aggregate gross/net  unrealized  appreciation/depreciation  for
securities held by each Trust were as follows:



TRUST                          COST         APPRECIATION      DEPRECIATION           NET
-----                     ------------      ------------      ------------      ------------
                                                                    
Broad Investment Grade    $ 66,508,995      $  1,304,156      $    326,972      $    977,184
Core Bond                  586,812,069        22,486,965         4,829,543        17,657,422
High Yield                  78,346,743         3,566,520        23,111,645       (19,545,125)
Income Opportunity         580,342,044        25,157,150         5,504,589        19,652,561
Income Trust               591,719,044        31,266,170        28,419,859         2,846,311
Strategic Bond             143,798,660         5,946,949         5,422,493           524,456




                                       51



   For Federal  income tax  purposes,  the  following  Trusts had  capital  loss
carryforwards at October 31, 2002:



                              CAPITAL LOSS                                         CAPITAL LOSS
TRUST                     CARRYFORWARDS AMOUNT    EXPIRES         TRUST        CARRYFORWARDS AMOUNT      EXPIRES
-----                     --------------------    -------     --------------   --------------------      -------
                                                                                           
Broad Investment Grade        $   472,280          2003       Income Trust          $10,359,634           2003
                                   85,817          2008                              27,373,194           2004
                              -----------
                              $   558,097                                            33,107,952           2007
                              ===========
High Yield                    $ 3,443,603          2007                               1,352,206           2008
                                3,270,311          2008                              13,940,898           2009
                                                                                    -----------
                               15,159,280          2009                             $86,133,884
                                                                                    ===========
                                8,468,860          2010       Strategic Bond        $   316,708           2010
                              -----------                                           ===========
                              $30,342,054
                              ===========


   Accordingly,  no  capital  gain  distributions  are  expected  to be  paid to
shareholders  of a Trust  until that  Trust has net  realized  capital  gains in
excess of its carryforward amounts.

   Details  of open  financial  futures  contracts  at April 30,  2003,  were as
follows:



                          NUMBER OF                         EXPIRATION        VALUE AT          VALUE AT        UNREALIZED
TRUST                     CONTRACTS          TYPE              DATE          TRADE DATE      APRIL 30, 2003    DEPRECIATION
-----                     ---------   ------------------    ----------     -------------     --------------    ------------
                                                                                             
LONG POSITION:
Broad Investment Grade        66      10 Yr. U.S. T-Note     Jun. '03      $   7,644,904       $ 7,598,250     $   (46,654)
                                                                                                               -----------
Core Bond                     27      10 Yr. U.S. T-Note     Jun. '03          3,106,266         3,092,344     $   (13,922)
                           1,109      30 Yr. U.S. T-Bond     Jun. '03        126,610,509       125,420,969      (1,189,540)
                                                                                                               -----------
                                                                                                               $(1,203,462)
                                                                                                               ===========
Income Opportunity         1,233      10 Yr. U.S. T-Note     Jun. '03        142,711,378       141,949,125     $  (762,253)
                           1,261      30 Yr. U.S. T-Bond     Jun. '03        144,436,146       143,793,407        (642,739)
                                                                                                               -----------
                                                                                                               $(1,404,992)
                                                                                                               ===========
Income Trust                 296      10 Yr. U.S. T-Note     Jun. '03         34,286,235        34,077,000     $  (209,235)
                                                                                                               -----------
SHORT POSITION:
Core Bond                    653       5 Yr. U.S. T-Note     Jun. '03         73,837,578        73,972,656     $  (135,078)
                                                                                                                ----------
Income Opportunity         1,001       5 Yr. U.S. T-Note     Jun. '03        112,794,327       113,863,750     $(1,069,423)
                                                                                                               -----------
Income Trust                 204      30 Yr. U.S. T-Bond     Jun. '03         23,006,571        23,262,375     $  (255,804)
                              30          Eurodollar         Jun. '04          7,346,137         7,367,625         (21,488)
                              30          Eurodollar         Sep. '04          7,316,513         7,341,375         (24,862)
                              30          Eurodollar         Dec. '04          7,289,138         7,312,125         (22,987)
                              30          Eurodollar         Mar. '05          7,266,638         7,287,375         (20,737)
                              25          Eurodollar         Jun. '05          6,036,781         6,053,125         (16,344)
                              25          Eurodollar         Sep. '05          6,021,156         6,035,625         (14,469)
                              25          Eurodollar         Dec. '05          6,006,156         6,019,063         (12,907)
                              25          Eurodollar         Mar. '06          5,992,407         6,005,000         (12,593)
                                                                                                               -----------
                                                                                                               $  (402,191)
                                                                                                               ===========


   Details  of open  forward  currency  contracts  at April  30,  2003,  were as
follows:



                                                                 VALUE AT         VALUE AT         UNREALIZED
                               SETTLEMENT       CONTRACT        SETTLEMENT        APRIL 30,       APPRECIATION
TRUST AND FOREIGN CURRENCY        DATE         TO RECEIVE          DATE             2003         (DEPRECIATION)
--------------------------     ----------     -------------    -----------       -----------     --------------
                                                                                     
Core Bond
   BOUGHT:
   Euro                          5/13/03        5,935,723e     $ 6,291,865       $ 6,633,688        $ 341,823
   Swedish Krona                 5/14/03        7,088,380kr        855,051           866,445           11,394
                                                                                                     --------
                                                                                                    $ 353,217
                                                                                                     ========

   SOLD:
   Canadian Dollar               5/12/03       20,693,686$     $14,033,260       $14,420,700        $(387,440)
   Swedish Krona                 5/14/03       50,391,090kr      5,961,453         6,159,532         (198,079)
                                                                                                     --------
                                                                                                    $(585,519)
                                                                                                     ========




                                       52



   Income Trust held one interest rate cap.  Under the  agreement,  Income Trust
receives the excess,  if any, of a floating rate over a fixed rate. Income Trust
paid a transaction fee for each cap.  Transaction fees are amortized through the
termination  of the  agreement.  Details of the cap at April 30,  2003,  were as
follows:



  NOTIONAL                                                               VALUE AT
   AMOUNT       FIXED        FLOATING       TERMINATION     AMORTIZED    APRIL 30,     UNREALIZED
    (000)       RATE           RATE            DATE           COST         2003       DEPRECIATION
 ---------     ------     -------------     -----------     ---------    ---------    ------------
                                                                      
 $100,000       7.75%     3-month LIBOR        5/4/03        $2,423         --          $(2,423)
                                                             ======       ======        =======


   Income Trust held one interest rate floor. Under the agreement,  Income Trust
pays the excess,  if any,  of a fixed rate over a floating  rate.  Income  Trust
received a transaction fee for the floor. Transaction fees are amortized through
the  termination  of the  agreement.  Details of the interest rate floor held at
April 30, 2003, were as follows:



  NOTIONAL                                                               VALUE AT
   AMOUNT       FIXED        FLOATING       TERMINATION     AMORTIZED    APRIL 30,     UNREALIZED
    (000)       RATE           RATE            DATE           COST         2003       DEPRECIATION
 ---------     ------     -------------     -----------     ---------    ----------   ------------
                                                                    
 $35,000        6.00%     1-month LIBOR      1/25/05        $596,250     $1,626,107   $(1,029,857)
                                                            ========     ==========   ===========


   Details of open interest rate swaps at April 30, 2003, were as follows:



                         NOTIONAL                                                        UNREALIZED
                          AMOUNT         FIXED         FLOATING        TERMINATION      APPRECIATION
TRUST                      (000)         RATE            RATE             DATE         (DEPRECIATION)
-----                   --------       ---------     -------------     -----------     --------------
                                                                          
Income Opportunity      $ 10,000       4.47% (a)     3-month LIBOR      11/04/12         $  (270,265)
                           7,000       5.23% (a)     3-month LIBOR      11/04/21            (295,267)
                          26,000       5.46% (a)     3-month LIBOR      10/28/22          (1,840,418)
                           9,000       5.71% (b)     3-month LIBOR       5/22/06             904,864
                          47,000       5.73% (b)     3-month LIBOR       5/04/06           2,647,989
                                                                                         -----------
                                                                                         $ 1,146,903
                                                                                         ===========

Income Trust            $ 24,000       3.55% (b)     3-month LIBOR      10/24/06            $841,526
                         162,000       4.22% (b)     3-month LIBOR       5/04/06           4,441,003
                          32,000       5.46% (a)     3-month LIBOR      10/17/12          (3,379,213)
                          24,000       6.04% (a)     3-month LIBOR      11/15/21          (3,468,213)
                          46,300       6.07% (a)     3-month LIBOR       8/28/22          (6,899,635)
                                                                                         -----------
                                                                                         $(8,464,532)
                                                                                         ===========


----------
(a) Trust pays fixed  interest rate and receives  floating  rate.
(b) Trust pays floating interest rate and receives fixed rate.








                                       53



   Transactions  in options  written during the six months ended April 30, 2003,
were as follows:



                                                               CONTRACTS/
                                                                NOTIONAL
                                                                 AMOUNT           PREMIUM
TRUST                                                             (000)           RECEIVED
---------                                                      ----------        ----------

                                                                            
CORE BOND
   Options outstanding at October 31, 2002                           138          $ 199,639
   Options expired                                                  (138)          (199,639)
                                                                --------          ---------
   Options outstanding at April 30, 2003                              --                $--
                                                                ========          =========

INCOME OPPORTUNITY
   Options outstanding at October 31, 2002                      $  6,000          $ 124,460
   Options terminated in closing purchase transactions            (3,000)           (67,800)
                                                                --------          ---------
   Options outstanding at April 30, 2003                        $  3,000          $  56,660
                                                                ========          =========

INCOME TRUST
   Options outstanding at October 31, 2002                      $ 22,000          $ 456,353
   Options terminated in closing purchase transactions           (11,000)          (248,600)
                                                                --------          ---------
   Options outstanding at April 30, 2003                        $ 11,000          $ 207,753
                                                                ========          =========


NOTE 4.  BORROWINGS

REVERSE  REPURCHASE  AGREEMENTS:  The Trusts may enter into  reverse  repurchase
agreements with qualified, third-party broker-dealers as determined by and under
the direction of the Trusts' Board.  Interest on the value of reverse repurchase
agreements issued and outstanding is based upon competitive  market rates at the
time  of  issuance.  At the  time a  Trust  enters  into  a  reverse  repurchase
agreement,  it will establish and maintain a segregated account with the lender,
containing  liquid  investment grade securities having a value not less than the
repurchase  price,   including  accrued  interest  of  the  reverse   repurchase
agreement.

   The average  daily  balance and  weighted  average  interest  rate of reverse
repurchase  agreements  during  the six months  ended  April 30,  2003,  were as
follows:

                            AVERAGE DAILY       WEIGHTED AVERAGE
TRUST                         BALANCE             INTEREST RATE
-----                      --------------       -----------------
Broad Investment Grade      $ 19,884,350               1.33%
Core Bond                     36,555,171               1.00
Income Opportunity           129,194,462               1.33
Income Trust                 131,038,100               1.32
Strategic Bond                44,339,122               1.66

DOLLAR  ROLLS:  The Trusts may enter into  dollar  rolls in which a Trust  sells
securities  for delivery in the current  month and  simultaneously  contracts to
repurchase  substantially similar (same type, coupon and maturity) securities on
a specified  future date.  During the roll period the Trusts forgo principal and
interest paid on the securities.  The Trusts will be compensated by the interest
earned on the cash  proceeds of the initial sale and/or by the lower  repurchase
price at the future date.

LOAN  PAYABLE:  High Yield has a $32  million  committed  credit  facility  (the
"facility").  Under the terms of the  facility,  the Trust borrows at the London
Interbank  Offered Rate  ("LIBOR")  plus  facility and  administrative  fees. In
addition,  the Trust pays a liquidity fee on the unused portion of the facility.
The Trust may  borrow  up to  331/3%  of its  total  assets up to the  committed
amount.  In  accordance  with the  terms of the debt  agreement,  the  Trust has
pledged its portfolio assets as collateral for the borrowing.

   For the six months ended April 30, 2003, High Yield borrowed a daily weighted
average balance of $19,250,000 at a weighted average interest rate at 1.96%.






                                       54



NOTE 5. CAPITAL

There are 200  million of $0.01 par value  common  shares  authorized  for Broad
Investment Grade,  Income  Opportunity and Income Trust.  There are an unlimited
number of $0.001 par value common shares  authorized  for Core Bond,  High Yield
and Strategic  Bond. At April 30, 2003,  the common shares  outstanding  and the
shares owned by affiliates of the Advisor of each Trust were:

                              COMMON SHARES                COMMON SHARES
TRUST                          OUTSTANDING                     OWNED
------                        -------------                -------------
Broad Investment Grade          2,957,093                      7,093
Core Bond                      27,018,774                      9,425
High Yield                      6,367,294                         --
Income Opportunity             34,449,693                         --
Income Trust                   63,247,058                         --
Strategic Bond                  7,025,735                      9,425

   During the six months  ended April 30,  2003,  High Yield,  Income  Trust and
Strategic Bond issued 15,326, 372,241 and 9,581 shares, respectively,  under the
terms of each Trust's Dividend Reinvestment Plan.

NOTE 6. DIVIDENDS

Subsequent to April 30, 2003, the Board of each of the Trusts declared dividends
from  undistributed   earnings  per  common  share  payable  May  30,  2003,  to
shareholders of record on May 15, 2003. The per share common dividends  declared
were as follows:

                             COMMON DIVIDEND
TRUST                           PER SHARE
-----                        ---------------
Broad Investment Grade           $0.075000
Core Bond                         0.100000
High Yield                        0.096875
Income Opportunity                0.070000
Income Trust                      0.051042
Strategic Bond                    0.120000

NOTE 7. COMMITMENT

On October 9, 1997,  Income  Opportunity  and Income  Trust each  entered into a
commitment  to purchase  an  aggregate  of up to  $22,000,000  and  $20,000,000,
respectively,  of Overseas  Private  Investment  Corp.  securities  prior to the
commitment  expiration  on  September  30, 2003.  As of April 30,  2003,  Income
Opportunity  and Income Trust have purchased such  securities with market values
of  $16,260,093  and  $14,781,903,  respectively.  As of  April  30,  2003,  the
remaining  outstanding  commitments of Income  Opportunity and Income Trust were
$8,975,780 and $8,159,800, respectively.

NOTE 8.  SUBSEQUENT  EVENT

On May 22,  2003,  the Boards of High Yield and  Strategic  Bond voted to change
each Trust's monthly  distribution  per share,  effective with the  distribution
declared on June 2, 2003, to $0.0905 and $0.13, respectively.






                                       55



                           DIVIDEND REINVESTMENT PLANS
--------------------------------------------------------------------------------

   Pursuant to each Trust's respective Dividend  Reinvestment Plan (the "Plan"),
shareholders of Broad Investment Grade,  Income Opportunity and Income Trust may
elect,  while  shareholders  of Core  Bond,  High Yield and  Strategic  Bond are
automatically enrolled, to have all distributions of dividends and capital gains
reinvested by EquiServe Trust Company, N.A. (the "Plan Agent") in the respective
Trust's shares pursuant to the Plan.  Shareholders who do not participate in the
Plan will receive all distributions in cash paid by check and 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 Plan Agent,  which  serves as agent for the
shareholders in administering the Plan.

   After Broad  Investment  Grade and/or  Income  Opportunity  Trust  declares a
dividend or determines to make a capital gain distribution,  the Plan Agent will
acquire  shares for the  participants'  account,  by the purchase of outstanding
shares on the open market,  on the Trust's primary  exchange or elsewhere ("open
market purchases"). The Trust will not issue any new shares under the Plan.

   After Core Bond,  High Yield,  Income Trust and/or  Strategic Bond declares a
dividend or determines to make a capital gain distribution,  the Plan Agent will
acquire shares for the participants'  account,  depending upon the circumstances
described  below,  either (i) through receipt of unissued but authorized  shares
from the Trust ("newly issued shares") or (ii) by open market purchases.  If, on
the dividend payment date, the NAV is equal to or less than the market price per
share plus estimated  brokerage  commissions  (such  condition being referred to
herein as "market  premium"),  the Plan Agent will invest the dividend amount in
newly issued  shares on behalf of the  participants.  The number of newly issued
shares to be  credited  to each  participant's  account  will be  determined  by
dividing the dollar amount of the dividend by the NAV on the date the shares are
issued.  However, if the NAV is less than 95% of the market price on the payment
date,  the dollar  amount of the  dividend  will be divided by 95% of the market
price on the payment date. If, on the dividend  payment date, the NAV is greater
than the  market  value per share plus  estimated  brokerage  commissions  (such
condition  being referred to herein as "market  discount"),  the Plan Agent will
invest the dividend amount in shares  acquired on behalf of the  participants in
open-market purchases.

   The Plan Agent's fees for the handling of the  reinvestment  of dividends and
distributions will be paid by each 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.

   Each Trust  reserves  the right to amend or terminate  the Plan.  There is no
direct service charge to participants in the Plan; however,  each Trust reserves
the  right  to  amend  the Plan to  include  a  service  charge  payable  by the
participants.  All correspondence  concerning the Plan should be directed to the
Plan Agent at 150 Royall Street, Canton, MA 02021 or (800) 699-1BFM.


                             ADDITIONAL INFORMATION
--------------------------------------------------------------------------------

      The Joint Annual  Meeting of  Shareholders  was held on May 22,  2003,  to
elect a certain number of Directors/Trustees for each of the following Trusts to
three year terms, unless otherwise indicated, expiring in 2006:

BROAD INVESTMENT GRADE
----------------------

      Elected  the Class III  Directors  and in  accordance  with  Maryland  law
elected Walter F. Mondale, for the remainder of his term, as follows:

DIRECTOR                        VOTES FOR     VOTES WITHHELD
--------                        ---------     --------------
Andrew F. Brimmer               2,755,165         33,798
Kent Dixon                      2,756,365         32,598
Robert S. Kapito                2,756,665         32,298
Walter F. Mondale(1)            2,741,445         47,518

CORE BOND
---------

      Elected the Class II Trustees as follows:

TRUSTEE                         VOTES FOR     VOTES WITHHELD
-------                        ----------     --------------
Frank J. Fabozzi               26,044,831         154,361
Walter F. Mondale              25,961,379         237,813
Ralph L. Schlosstein           26,047,238         151,954

----------
(1) Walter F. Mondale's term will expire in 2005.




                                       56



HIGH YIELD
----------

      Elected the Class I Trustees as follows:

TRUSTEE                         VOTES FOR     VOTES WITHHELD
-------                         ---------     --------------
Richard E. Cavanagh             6,052,239         57,124
James Clayburn La Force, Jr.    6,047,853         61,510

INCOME OPPORTUNITY
------------------

      Elected the Class II Directors and in accordance with Maryland law elected
Robert S. Kapito, for the remainder of his term, as follows:

DIRECTOR                        VOTES FOR     VOTES WITHHELD
--------                       ----------     --------------
Frank J. Fabozzi               31,940,094         248,935
Robert S. Kapito(2)            31,945,672         243,357
Walter F. Mondale              31,855,311         333,718
Ralph L. Schlosstein           31,950,515         238,514

INCOME TRUST
------------

      Elected the Class II Directors and in accordance with Maryland law elected
Robert S. Kapito, for the remainder of his term, as follows:

DIRECTOR                        VOTES FOR     VOTES WITHHELD
--------                       ----------     --------------
Frank J. Fabozzi               58,207,702         677,691
Robert S. Kapito2              58,219,376         666,017
Walter F. Mondale              57,970,768         914,625
Ralph L. Schlosstein           58,222,291         663,102

STRATEGIC BOND
--------------

      Elected the Class II Trustees as follows:

TRUSTEE                         VOTES FOR     VOTES WITHHELD
-------                         ---------     --------------
Frank J. Fabozzi                6,752,233         52,587
Walter F. Mondale               6,726,221         78,599
Ralph L. Schlosstein            6,750,877         53,943

----------
(2) Robert S. Kapito's term will expire in 2004.







                                       57















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                           BlackRock Closed-End Funds


Directors/Trustees
   Ralph L. Schlosstein, CHAIRMAN
   Andrew F. Brimmer
   Richard E. Cavanagh
   Kent Dixon
   Frank J. Fabozzi
   Robert S. Kapito
   James Clayburn La Force, Jr.
   Walter F. Mondale

Officers
   Robert S. Kapito, PRESIDENT
   Henry Gabbay, TREASURER
   Anne Ackerley, VICE PRESIDENT
   Richard M. Shea, VICE PRESIDENT/TAX
   James Kong, ASSISTANT TREASURER
   Vincent B. Tritto, SECRETARY
   Brian P. Kindelan, ASSISTANT SECRETARY

Investment Advisor
   BlackRock Advisors, Inc.
   100 Bellevue Parkway
   Wilmington, DE 19809
   (800) 227-7BFM

Sub-Advisor(1)
   BlackRock Financial Management, Inc.
   40 East 52nd Street
   New York, NY 10022

Custodian
   State Street Bank and Trust Company
   One Heritage Drive
   North Quincy, MA 02171

Transfer Agent
   EquiServe Trust Company, N.A.
   150 Royall Street
   Canton, MA 02021
   (800) 699-1BFM

Independent Accountants
   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 Directors/Trustees
   Debevoise & Plimpton
   919 Third Avenue
   New York, NY 10022

   This report is for shareholder information. This is not a prospectus intended
for  use in  the  purchase  or  sale  of  Trust  shares.  Statements  and  other
information contained in this report are as dated and are subject to change.

--------------------------------------------------------------------------------

                                                                        
BlackRockAdvisors, Inc.(2)            Princeton Administrators, L.P.(2)       Prudential Investments LLC(2)
100 Bellevue Parkway                  P.O. Box 9095                           Gateway Center Three
Wilmington, DE 19809                  Princeton, NJ 08543-9095                100 Mulberry Street
(800) 227-7BFM                        (800) 543-6217                          Newark, NJ 07102-4077
     BlackRock Core Bond Trust             BlackRock Broad Investment Grade   (800) 227-7BFM
     BlackRock Strategic Bond Trust          2009 Term Trust                       BlackRock High Yield Trust
                                                                                   BlackRock Income Opportunity Trust
                                                                                   BlackRock Income Trust


----------
(1)  For BlackRock Core Bond Trust and BlackRock Strategic Bond Trust only.
(2)  Provides administrative services for the Trust(s) listed directly below its
     name.

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 contact the Trusts at (800) 227-7BFM.


















This report is for shareholder information. This is not a prospectus intended
for use in the purchase or sale of Trust shares. Statements and other
information contained in this report are as dated and are subject to change.



                                                                [BLACKROCK LOGO]




ITEM 2.  CODE OF ETHICS.

Not applicable for semi-annual reports.


ITEM 3.  AUDIT COMMITTEE FINANCIAL EXPERT.

Not applicable for semi-annual reports.


ITEM 4.  PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Not applicable for semi-annual reports.


ITEM 5.  AUDIT COMMITTEE OF LISTED REGISTRANTS.

Not applicable for semi-annual reports.


ITEM 6.  [RESERVED.]


ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.

Not applicable for semi-annual reports.


ITEM 8.  [RESERVED.]


ITEM 9.  CONTROLS AND PROCEDURES.

The Trust's principal executive officer and principal financial officer have
concluded that the Trust's disclosure controls and procedures are sufficient to
ensure that information required to be disclosed by the Trust in this Form N-CSR
was recorded, processed, summarized and reported within the time periods
specified in the Securities and Exchange Commission's rules and forms, based
upon such officers' evaluation of these controls and procedures as of a date
within 90 days of the filing date of the report.

There were no significant changes or corrective actions with regard to
significant deficiencies or material weaknesses in the Trust's internal controls
or in other factors that could significantly affect the Trust's internal
controls subsequent to the date of their evaluation.


ITEM 10.  EXHIBITS.

(a) Code of Ethics - Not applicable for semi-annual reports.

(b)(1) Certification of Principal Executive Officer.

(b)(2) Certification of Principal Financial Officer.






                                   SIGNATURES

         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.

(Registrant)   The BlackRock Broad Investment Grade 2009 Term Trust Inc.

By:      /s/ Henry Gabbay
         ---------------------------
Name:    Henry Gabbay
Title:   Treasurer
Date:    6/30/03

         Pursuant to the requirements of the Securities Exchange Act of 1934 and
the Investment Company Act of 1940, this report has been signed by the following
persons on behalf of the registrant and in the capacities and on the dates
indicated.

By:      /s/ Robert S. Kapito
         ---------------------------
Name:    Robert S. Kapito
Title:   Principal Executive Officer
Date:    6/30/03

By:      /s/ Henry Gabbay
         ---------------------------
Name:    Henry Gabbay
Title:   Principal Financial Officer
Date:    6/30/03