0001193125-18-292914.txt : 20181004 0001193125-18-292914.hdr.sgml : 20181004 20181004103513 ACCESSION NUMBER: 0001193125-18-292914 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 21 CONFORMED PERIOD OF REPORT: 20180731 FILED AS OF DATE: 20181004 DATE AS OF CHANGE: 20181004 EFFECTIVENESS DATE: 20181004 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BlackRock Municipal 2030 Target Term Trust CENTRAL INDEX KEY: 0001528437 IRS NUMBER: 000000000 STATE OF INCORPORATION: DE FISCAL YEAR END: 0430 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-22603 FILM NUMBER: 181107159 BUSINESS ADDRESS: STREET 1: 100 BELLEVUE PARKWAY CITY: WILMINGTON STATE: DE ZIP: 19809-3700 BUSINESS PHONE: (800) 882-0052 MAIL ADDRESS: STREET 1: 100 BELLEVUE PARKWAY CITY: WILMINGTON STATE: DE ZIP: 19809-3700 FORMER COMPANY: FORMER CONFORMED NAME: BlackRock Municipal Target Term Trust DATE OF NAME CHANGE: 20120625 FORMER COMPANY: FORMER CONFORMED NAME: BlackRock Municipal 2027 Term Trust DATE OF NAME CHANGE: 20110823 N-CSR 1 d584807dncsr.htm BLACKROCK MUNICIPAL 2030 TARGET TERM TRUST BlackRock Municipal 2030 Target Term Trust

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: 811-22603

Name of Fund:  BlackRock Municipal 2030 Target Term Trust (BTT)

Fund Address:   100 Bellevue Parkway, Wilmington, DE 19809

Name and address of agent for service: John M. Perlowski, Chief Executive Officer, BlackRock Municipal 2030 Target Term Trust, 55 East 52nd Street, New York, NY 10055

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

Date of fiscal year end: 07/31/2018

Date of reporting period: 07/31/2018


Item 1 – Report to Stockholders

 


JULY 31, 2018

 

ANNUAL REPORT

  LOGO

 

BlackRock California Municipal Income Trust (BFZ)

BlackRock Florida Municipal 2020 Term Trust (BFO)

BlackRock Municipal 2030 Target Term Trust (BTT)

BlackRock Municipal Income Investment Trust (BBF)

BlackRock New York Municipal Income Trust (BNY)

 

Not FDIC Insured • May Lose Value • No Bank Guarantee


The Markets in Review

Dear Shareholder,

In the 12 months ended July 31, 2018, the strongest corporate profits in seven years drove the equity market higher, while rising interest rates constrained bond returns. Though the market’s appetite for risk remained healthy, risk-taking was tempered somewhat, as shorter-term, higher-quality securities led the bond market, and U.S. equities outperformed most international stock markets.

Strong equity performance worldwide was driven by synchronized economic growth across the most influential economies. However, volatility in emerging market stocks rose, as U.S.-China trade relations and debt concerns weighed heavily on the Chinese stock market, while Turkey became embroiled in a currency crisis shortly after the end of the reporting period.

Short-term U.S. Treasury interest rates rose the fastest, while longer-term rates slightly increased, leading to a negative return for long-term U.S. Treasuries and a substantial flattening of the yield curve. Many investors are concerned with the flattening yield curve as a harbinger of recession, but given the extraordinary monetary measures in the last decade, we believe a more accurate barometer for the economy is the returns along the risk spectrums in stock and bond markets. Although the fundamentals in credit markets remained relatively solid, investment-grade bonds declined slightly, and high-yield bonds posted modest returns.

In response to rising growth and inflation, the U.S. Federal Reserve (the “Fed”) increased short-term interest rates three times during the reporting period. The Fed also reduced its $4.3 trillion balance sheet by approximately $180 billion during the reporting period, gradually reversing the unprecedented stimulus measures it enacted after the financial crisis. Meanwhile, the European Central Bank announced that its bond-purchasing program would conclude at the end of the year, while also expressing its commitment to low interest rates. In contrast, the Bank of Japan continued to expand its balance sheet through bond purchasing while lowering its expectations for inflation.

The U.S. economy continued to gain momentum despite the Fed’s modest reduction of economic stimulus; unemployment declined to 3.9%, wages increased, and the number of job openings reached a record high. Strong economic performance may justify a more rapid pace of rate hikes in 2018, as the headline inflation rate and investors’ expectations for inflation have already surpassed the Fed’s target of 2.0%.

While U.S. monetary policy is seeking to restrain economic growth and inflation, fiscal policy has produced new sources of growth that could nourish the economy for the next few years. Corporate tax cuts and repatriation of capital held abroad could encourage a virtuous cycle of business spending. Lower individual tax rates coupled with the robust job market may refresh consumer spending.

We continue to believe the primary risks to economic expansion are trade protectionism, rapidly rising interest rates, and geopolitical tension. Given the deflationary forces of technology and globalization, a substantial increase in inflation is unlikely to materialize as long as the unemployment rate remains above 3.0%. However, we are closely monitoring trade protectionism and the rise of populism in Western nations. In particular, the outcome of trade negotiations between the United States and China is likely to influence the global growth trajectory and set the tone for free trade in many other nations.

In this environment, investors need to think globally, extend their scope across a broad array of asset classes, and be nimble as market conditions change. We encourage you to talk with your financial advisor and visit blackrock.com for further insight about investing in today’s markets.

Sincerely,

 

LOGO

Rob Kapito

President, BlackRock Advisors, LLC

LOGO

Rob Kapito

President, BlackRock Advisors, LLC

 

Total Returns as of July 31, 2018
     6-month   12-month

U.S. large cap equities
(S&P 500® Index)

  0.70%   16.24%

U.S. small cap equities
(Russell 2000® Index)

  6.75   18.73

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

  (5.12)   6.40

Emerging market equities
(MSCI Emerging Markets Index)

  (11.94)   4.36

3-month Treasury bills
(ICE BofAML 3-Month
U.S. Treasury Bill Index)

  0.85   1.43

U.S. Treasury securities
(ICE BofAML 10-Year
U.S. Treasury Index)

  (0.95)   (3.66)

U.S. investment grade bonds
(Bloomberg Barclays U.S.
Aggregate Bond Index)

  (0.45)   (0.80)

Tax-exempt municipal bonds
(S&P Municipal Bond Index)

  1.20   1.21

U.S. high yield bonds
(Bloomberg Barclays
U.S. Corporate High Yield
2% Issuer Capped Index)

  0.65   2.60
Past performance is no guarantee of future results. Index performance is shown for illustrative purposes only. You cannot invest directly in an index.
 

 

 

2    THIS PAGE IS NOT PART OF YOUR FUND REPORT


Table of Contents

 

      Page  

The Markets in Review

     2  

Annual Report:

  

Municipal Market Overview

     4  

The Benefits and Risks of Leveraging

     5  

Derivative Financial Instruments

     5  

Trust Summaries

     6  

Financial Statements:

  

Schedules of Investments

     16  

Statements of Assets and Liabilities

     45  

Statements of Operations

     46  

Statements of Changes in Net Assets

     47  

Statements of Cash Flows

     50  

Financial Highlights

     51  

Notes to Financial Statements

     56  

Report of Independent Registered Public Accounting Firm

     67  

Disclosure of Investment Advisory Agreements

     68  

Automatic Dividend Reinvestment Plans

     72  

Trustee and Officer Information

     73  

Additional Information

     76  

Glossary of Terms Used in this Report

     78  

 

 

     3  


Municipal Market Overview  For the Reporting Period Ended July 31, 2018

 

Municipal Market Conditions

Municipal bonds experienced positive performance during the period despite rising interest rates resulting from continued Fed monetary policy normalization, firmer economic data, and the anticipated impacts of fiscal stimulus. Ongoing reassurance from the Fed that rates would be increased gradually and would likely remain low overall resulted in continued demand for fixed income investments. More specifically, investors favored the tax-exempt income, diversification, quality, and value of municipal bonds amid fiscal policy uncertainty, which saw tax reform ultimately lower the top individual tax rate just 2.6% while eliminating deductions and increasing demand for tax shelter. During the 12 months ended July 31, 2018, municipal bond funds experienced net inflows of approximately $24 billion (based on data from the Investment Company Institute).

 

For the same 12-month period, total new issuance was moderate from a historical perspective at $370 billion (well below the $408 billion issued in the prior 12-month period), but displayed significant month to month volatility. Notably, issuance in December posted the highest monthly total on record at $56 billion, as issuers rushed deals to market ahead of the expected elimination of the tax-exemption for advanced refunding bonds and possibly private activity bonds (PABs). Ultimately, the final version of the Tax Cuts and Jobs Act left PABs unchanged, though the elimination of advanced refundings has suppressed supply in 2018, providing a powerful technical tailwind.   S&P Municipal Bond Index
  Total Returns as of July 31, 2018
    6 months: 1.20%
  12 months: 1.21%
   

A Closer Look at Yields

 

LOGO

From July 31, 2017 to July 31, 2018, yields on AAA-rated 30-year municipal bonds increased by 27 basis points (“bps”) from 2.74% to 3.01%, while 10-year rates increased by 50 bps from 1.95% to 2.45% and 5-year rates increased by 76 bps from 1.21% to 1.97% (as measured by Thomson Municipal Market Data). The municipal yield curve bear flattened over the 12-month period with the spread between 2- and 30-year maturities flattening by 41 bps, however remained a significant 72 bps steeper than the corresponding U.S. Treasury curve.

During the same time period, on a relative basis, tax-exempt municipal bonds strongly outperformed U.S. Treasuries with the greatest outperformance experienced in the front and intermediate portions of the yield curve. The relative positive performance of municipal bonds was driven largely by a supply/demand imbalance within the municipal market as investors sought income and incremental yield in an environment where opportunities became increasingly scarce. The asset class is known for its lower relative volatility and preservation of principal with an emphasis on income as tax rates rise.

Financial Conditions of Municipal Issuers

The majority of municipal credits remain strong, despite well-publicized problems among a few issuers. Four of the five states with the largest amount of debt outstanding — California, New York, Texas and Florida — continue to exhibit improved credit fundamentals. However, several states with the largest unfunded pension liabilities are faced with elevated borrowing costs and difficult budgetary decisions. Across the country on the local level, property values support credit stability. Revenue bonds continue to drive performance as investors continue to seek higher yield bonds in the tobacco sector. BlackRock maintains the view that municipal bond defaults will remain minimal and in the periphery while the overall market is fundamentally sound. We continue to advocate careful credit research and believe that a thoughtful approach to structure and security selection remains imperative amid uncertainty in a modestly improving economic environment.

The opinions expressed are those of BlackRock as of July 31, 2018, and are subject to change at any time due to changes in market or economic conditions. The comments should not be construed as a recommendation of any individual holdings or market sectors. Investing involves risk including loss of principal. Bond values fluctuate in price so the value of your investment can go down depending on market conditions. Fixed income risks include interest-rate and credit risk. Typically, when interest rates rise, there is a corresponding decline in bond values. Credit risk refers to the possibility that the bond issuer will not be able to make principal and interest payments. There may be less information on the financial condition of municipal issuers than for public corporations. The market for municipal bonds may be less liquid than for taxable bonds. Some investors may be subject to Alternative Minimum Tax (“AMT”). Capital gains distributions, if any, are taxable.

The Standard & Poor’s Municipal Bond Index, a broad, market value-weighted index, seeks to measure the performance of the U.S. municipal bond market. All bonds in the index are exempt from U.S. federal income taxes or subject to the AMT. Past performance is no guarantee of future results. Index performance is shown for illustrative purposes only. It is not possible to invest directly in an index.

 

 

4    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


The Benefits and Risks of Leveraging

 

The Trusts may utilize leverage to seek to enhance the distribution rate on, and net asset value (“NAV”) of, their common shares (“Common Shares”). However, there is no guarantee that these objectives can be achieved in all interest rate environments.

In general, the concept of leveraging is based on the premise that the financing cost of leverage, which is based on short-term interest rates, is normally lower than the income earned by a Trust on its longer-term portfolio investments purchased with the proceeds from leverage. To the extent that the total assets of the Trusts (including the assets obtained from leverage) are invested in higher-yielding portfolio investments, the Trusts’ shareholders benefit from the incremental net income. The interest earned on securities purchased with the proceeds from leverage is paid to shareholders in the form of dividends, and the value of these portfolio holdings is reflected in the per share NAV.

To illustrate these concepts, assume a Trust’s Common Shares capitalization is $100 million and it utilizes leverage for an additional $30 million, creating a total value of $130 million available for investment in longer-term income securities. If prevailing short-term interest rates are 3% and longer-term interest rates are 6%, the yield curve has a strongly positive slope. In this case, a Trust’s financing costs on the $30 million of proceeds obtained from leverage are based on the lower short-term interest rates. At the same time, the securities purchased by a Trust with the proceeds from leverage earn income based on longer-term interest rates. In this case, a Trust’s financing cost of leverage is significantly lower than the income earned on a Trust’s longer-term investments acquired from such leverage proceeds, and therefore the holders of Common Shares (“Common Shareholders”) are the beneficiaries of the incremental net income.

However, in order to benefit Common Shareholders, the return on assets purchased with leverage proceeds must exceed the ongoing costs associated with the leverage. If interest and other costs of leverage exceed the Trusts’ return on assets purchased with leverage proceeds, income to shareholders is lower than if the Trusts had not used leverage. Furthermore, the value of the Trusts’ portfolio investments generally varies inversely with the direction of long-term interest rates, although other factors can influence the value of portfolio investments. In contrast, the value of the Trusts’ obligations under their respective leverage arrangements generally does not fluctuate in relation to interest rates. As a result, changes in interest rates can influence the Trusts’ NAVs positively or negatively. Changes in the future direction of interest rates are very difficult to predict accurately, and there is no assurance that the Trusts’ intended leveraging strategy will be successful.

The use of leverage also generally causes greater changes in each Trust’s NAV, market price and dividend rates than comparable portfolios without leverage. In a declining market, leverage is likely to cause a greater decline in the NAV and market price of a Trust’s Common Shares than if the Trust were not leveraged. In addition, each Trust may be required to sell portfolio securities at inopportune times or at distressed values in order to comply with regulatory requirements applicable to the use of leverage or as required by the terms of leverage instruments, which may cause the Trusts to incur losses. The use of leverage may limit a Trust’s ability to invest in certain types of securities or use certain types of hedging strategies. Each Trust incurs expenses in connection with the use of leverage, all of which are borne by Common Shareholders and may reduce income to the Common Shares. Moreover, to the extent the calculation of the Trusts’ investment advisory fees includes assets purchased with the proceeds of leverage, the investment advisory fees payable to the Trusts’ investment adviser will be higher than if the Trusts did not use leverage.

To obtain leverage, each Trust has issued Variable Rate Demand Preferred Shares (“VRDP Shares”), Variable Rate Muni Term Preferred Shares (“VMTP Shares”), Remarketable Variable Rate Muni Term Preferred Shares (“RVMTP Shares”) (collectively, “Preferred Shares”) and/or leveraged its assets through the use of tender option bond trusts (“TOB Trusts”) as described in the Notes to Financial Statements.

Under the Investment Company Act of 1940, as amended (the “1940 Act”), each Trust is permitted to issue debt up to 33 1/3% of its total managed assets or equity securities (e.g., Preferred Shares) up to 50% of its total managed assets. A Trust may voluntarily elect to limit its leverage to less than the maximum amount permitted under the 1940 Act. In addition, a Trust may also be subject to certain asset coverage, leverage or portfolio composition requirements imposed by the Preferred Shares’ governing instruments or by agencies rating the Preferred Shares, which may be more stringent than those imposed by the 1940 Act.

If a Trust segregates or designates on its books and records cash or liquid assets having a value not less than the value of a Trust’s obligations under the TOB Trust (including accrued interest), then the TOB Trust is not considered a senior security and is not subject to the foregoing limitations and requirements imposed by the 1940 Act.

Derivative Financial Instruments

The Trusts may invest in various derivative financial instruments. These instruments are used to obtain exposure to a security, commodity, index, market, and/or other assets without owning or taking physical custody of securities, commodities and/or other referenced assets or to manage market, equity, credit, interest rate, foreign currency exchange rate, commodity and/or other risks. Derivative financial instruments may give rise to a form of economic leverage and involve risks, including the imperfect correlation between the value of a derivative financial instrument and the underlying asset, possible default of the counterparty to the transaction or illiquidity of the instrument. BTT may use economic leverage of up to 100% of its net assets (50% of its total managed assets). The Trusts’ successful use of a derivative financial instrument depends on the investment adviser’s ability to predict pertinent market movements accurately, which cannot be assured. The use of these instruments may result in losses greater than if they had not been used, may limit the amount of appreciation a Trust can realize on an investment and/or may result in lower distributions paid to shareholders. The Trusts’ investments in these instruments, if any, are discussed in detail in the Notes to Financial Statements.

 

 

THE BENEFITS AND RISKS OF LEVERAGING      5  


Trust Summary  as of July 31, 2018    BlackRock California Municipal Income Trust

 

Trust Overview

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

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

Trust Information

 

Symbol on New York Stock Exchange (“NYSE”)

  BFZ

Initial Offering Date

  July 27, 2001

Yield on Closing Market Price as of July 31, 2018 ($12.75)(a)

  4.42%

Tax Equivalent Yield(b)

  9.63%

Current Monthly Distribution per Common Share(c)

  $0.0470

Current Annualized Distribution per Common Share(c)

  $0.5640

Economic Leverage as of July 31, 2018(d)

  41%

 

  (a)

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

 
  (b)

Tax equivalent yield assumes the maximum marginal U.S. federal and state tax rate of 54.10%, which includes the 3.8% Medicare tax. Actual tax rates will vary based on income, exemptions and deductions. Lower taxes will result in lower tax equivalent yields.

 
  (c)

The distribution rate is not constant and is subject to change. A portion of the distribution may be deemed a return of capital or net realized gain.

 
  (d)

Represents VMTP Shares and TOB Trusts as a percentage of total managed assets, which is the total assets of the Trust, including any assets attributable to VMTP Shares and TOB Trusts, minus the sum of accrued liabilities. For a discussion of leveraging techniques utilized by the Trust, please see The Benefits and Risks of Leveraging on page 5.

 

Performance

Returns for the 12 months ended July 31, 2018 were as follows:

 

    Returns Based On  
     Market Price      NAV  

BFZ(a)(b)

    (8.95 )%       1.41

Lipper California Municipal Debt Funds(c)

    (6.07      1.15  

 

  (a) 

All returns reflect reinvestment of dividends and/or distributions at actual reinvestment prices.

 
  (b) 

The Trust’s discount to NAV widened during the period, which accounts for the difference between performance based on market price and performance based on NAV.

 
  (c) 

Average return. Returns reflect reinvestment of dividends and/or distributions at NAV on the ex-dividend as calculated by Lipper.

 

Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.

Past performance is not indicative of future results.

The following discussion relates to the Trust’s absolute performance based on NAV:

 

 

The U.S. municipal bond market posted a narrow gain in the 12-month period, with the contribution from yield offsetting negative price performance. Although tax-exempt issues sold off sharply in early 2018 due to a spike in U.S. Treasury yields, the market was supported by the improving fundamentals of state and local issuers, as well as low new-issue supply from January onward. Short-term bonds, which have above-average sensitivity to Fed policy, generally lagged longer-term issues.

 

 

After a period of outperformance, California municipal bonds trailed the national market over the past 12 months due to the combination of richer valuations, tighter yield spreads, and significant new-issue supply.

 

 

Income was the primary driver of the Trust’s positive return, as it offset the effects of falling bond prices and the amortization of bond premiums. (When a bond’s price trades at a premium over its face value, the difference is amortized over time. A premium occurs when the price of the bond has increased due to a decline in interest rates.)

 

 

Holdings that were purchased in a higher-rate environment and that have lower duration characteristics contributed to performance. These positions generate generous income and are less sensitive to the negative effects of rising interest rates. (Duration is a measure of interest rate sensitivity.)

 

 

The Trust sought to manage interest rate risk using U.S. Treasury futures. Since Treasury yields rose (as prices fell), this aspect of the Trust’s positioning had a positive impact on returns.

 

 

The Trust’s use of leverage, while amplifying the effect of falling prices, contributed to performance by augmenting portfolio income. However, the cost of leverage increased due to rising short-term rates.

 

 

On the negative side, the Trust’s positions in shorter-term bonds detracted from performance. Higher-quality investment-grade holdings (those rated AA and AAA), which fared worse than those rated below investment grade, also detracted from performance. Strong inflows into high-yield products fueled greater price appreciation for lower-rated issues. Believing this translated to minimal value in high-yield California municipal bonds, the investment adviser maintained an underweight in this area.

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

 

 

6    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Trust Summary  as of July 31, 2018 (continued)    BlackRock California Municipal Income Trust

 

Market Price and Net Asset Value Per Share Summary

 

     07/31/18     07/31/17      Change      High      Low  

Market Price

  $ 12.75     $ 14.71        (13.32 )%     $ 14.81      $ 12.73  

Net Asset Value

    14.81       15.34        (3.46      15.48        14.66  

Market Price and Net Asset Value History For the Past Five Years

 

LOGO

Overview of the Trust’s Total Investments *

 

SECTOR ALLOCATION

 

Sector

  07/31/18     07/31/17  

County/City/Special District/School District

    29     29

Transportation

    18       13  

Education

    16       13  

Health

    12       12  

Utilities

    12       21  

State

    9       7  

Tobacco

    4       5  

Housing(b)

           

For Trust compliance purposes, the Trust’s sector classifications refer to one or more of the sector sub-classifications used by one or more widely recognized market indexes or rating group indexes, and/or as defined by the investment adviser. These definitions may not apply for purposes of this report, which may combine such sector sub-classifications for reporting ease.

CALL /MATURITY SCHEDULE (c)

 

Calendar Year Ended December 31,

       

2018

    2

2019

    22  

2020

    3  

2021

    9  

2022

    5  

 

  (c)

Scheduled maturity dates and/or bonds that are subject to potential calls by issuers over the next five years.

 
  *

Excludes short-term securities.

 

CREDIT QUALITY ALLOCATION (a)

 

Credit Rating

  07/31/18     07/31/17  

AAA/Aaa

    7     9

AA/Aa

    72       71  

A

    14       13  

BBB/Baa

    1       (b)  

BB/Ba

    1       1  

B

    1       4  

N/R

    4       2  

 

  (a)

For financial reporting purposes, credit quality ratings shown above reflect the highest rating assigned by either Standard & Poor’s (“S&P”) or Moody’s Investors Service (“Moody’s”) if ratings differ. These rating agencies are independent, nationally recognized statistical rating organizations and are widely used. Investment grade ratings are credit ratings of BBB/Baa or higher. Below investment grade ratings are credit ratings of BB/Ba or lower. Investments designated N/R are not rated by either rating agency. Unrated investments do not necessarily indicate low credit quality. Credit quality ratings are subject to change.

 
  (b)

Represents less than 1% of the Trust’s total investments.

 
 

 

 

TRUST SUMMARY      7  


Trust Summary  as of July 31, 2018    BlackRock Florida Municipal 2020 Term Trust

 

Trust Overview

BlackRock Florida Municipal 2020 Term Trust’s (BFO) (the “Trust”) investment objectives are to provide current income exempt from regular U.S. federal income tax and Florida intangible personal property tax and to return $15.00 per common share (the initial offering price per share) to holders of common shares on or about December 31, 2020. The Trust seeks to achieve its investment objectives by investing at least 80% of its assets in municipal bonds exempt from U.S. federal income taxes (except that the interest may be subject to the federal alternative minimum tax) and Florida intangible personal property tax. The Trust invests at least 80% of its assets in municipal bonds that are investment grade quality, or are considered by the Trust’s investment adviser to be of comparable quality, at the time of investment. The Trust actively manages the maturity of its bonds to seek to have a dollar-weighted average effective maturity approximately equal to the Trust’s maturity date. The Trust may invest directly in such securities or synthetically through the use of derivatives. Effective January 1, 2007, the Florida intangible personal property tax was repealed.

There is no assurance that the Trust will achieve its investment objective of returning $15.00 per share.

On June 6, 2018, the Board of Trustees approved a proposal, effective December 31, 2018, to change the Trust’s fiscal year end from July 31 to December 31.

Trust Information

 

Symbol on NYSE

  BFO

Initial Offering Date

  September 30, 2003

Termination Date (on or about)

  December 31, 2020

Yield on Closing Market Price as of July 31, 2018 ($14.21)(a)

  2.20%

Tax Equivalent Yield(b)

  3.72%

Current Monthly Distribution per Common Share(c)

  $0.0260

Current Annualized Distribution per Common Share(c)

  $0.3120

 

  (a) 

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

 
  (b) 

Tax equivalent yield assumes the maximum marginal U.S. federal tax rate of 40.80%, which includes the 3.8% Medicare tax. Actual tax rates will vary based on income, exemptions and deductions. Lower taxes will result in lower tax equivalent yields.

 
  (c)

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

 

Performance

Returns for the 12 months ended July 31, 2018 were as follows:

 

    Returns Based On  
     Market Price      NAV  

BFO(a)(b)

    (3.42 )%       (0.02 )% 

Lipper Other States Municipal Debt Funds(c)

    (7.04      0.69

 

  (a) 

All returns reflect reinvestment of dividends and/or distributions at actual reinvestment prices.

 
  (b) 

The Trust moved from neither a premium nor discount to a discount to NAV during the period, which accounts for the difference between performance based on market price and performance based on NAV.

 
  (c) 

Average return. Returns reflect reinvestment of dividends and/or distributions at NAV on the ex-dividend as calculated by Lipper.

 

Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.

Past performance is not indicative of future results.

The following discussion relates to the Trust’s absolute performance based on NAV:

 

 

Since the Trust is scheduled to terminate on or about December 31, 2020, its holdings therefore consist of short-term securities with minimal sensitivity to market movements and attractive yields relative to prevailing interest rates. Although short-term bonds faced the headwind of interest-rate increases by the Fed, the Trust was less vulnerable to broader price weakness due to its short duration (lower interest-rate sensitivity).

 

 

At a time of falling prices, the income generated by bonds held in the portfolio made the largest contribution to returns.

 

 

Although yields rose during the period, reinvestment had an adverse effect on the Trust’s income as the proceeds of higher-yielding bonds that matured or were called needed to be reinvested at lower prevailing rates.

 

 

Negative amortization of the premium on short-term bonds was a drag on performance. (When a bond’s price trades at a premium over its face value, the difference is amortized over time. A premium occurs when the price of the bond has increased due to a decline in interest rates.)

 

 

The Trust’s largest sector concentrations were in utilities, county/city/special district/school district and healthcare.

 

 

Cash equivalents made up nearly 8% of the portfolio at the end of the period, reflecting the limited opportunities to pick up yield by investing in one-and two-year notes. The investment adviser believed yields on the front end of the yield curve were low relative to the more liquid cash equivalents, indicating that investors were not being properly compensated for holding one- and two-year issues relative to cash. This position had no significant impact to Trust performance.

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

 

 

8    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Trust Summary  as of July 31, 2018 (continued)    BlackRock Florida Municipal 2020 Term Trust

 

Market Price and Net Asset Value Per Share Summary

 

     07/31/18     07/31/17      Change      High      Low  

Market Price

  $ 14.21     $ 15.05        (5.58 )%     $ 15.18      $ 13.46  

Net Asset Value

    14.71       15.05        (2.26      15.08        14.66  

Market Price and Net Asset Value History For the Past Five Years

 

LOGO

Overview of the Trust’s Total Investments *

 

SECTOR ALLOCATION

 

Sector   07/31/18     07/31/17  

Utilities

    22     16

County/City/Special District/School District

    20       35  

Health

    19       18  

Transportation

    16       11  

State

    11       11  

Corporate

    7       4  

Education

    5       5  

Housing(b)

           

For Trust compliance purposes, the Trust’s sector classifications refer to one or more of the sector sub-classifications used by one or more widely recognized market indexes or rating group indexes, and/or as defined by the investment adviser. These definitions may not apply for purposes of this report, which may combine such sector sub-classifications for reporting ease.

CALL/MATURITY SCHEDULE (d)

 

Calendar Year Ended December 31,

       

2018

    11

2019

    11  

2020

    67  

2021

    1  

2022

    7  

 

  (d)

Scheduled maturity dates and/or bonds that are subject to potential calls by issuers over the next five years.

 
  *

Excludes short-term securities.

 

CREDIT QUALITY ALLOCATION (a)

 

Credit Rating   07/31/18     07/31/17  

AAA/Aaa

    1     1

AA/Aa

    54       56  

A

    31       28  

BBB/Baa(b)

           

B

    2        

N/R(c)

    12       15  

 

  (a)

For financial reporting purposes, credit quality ratings shown above reflect the highest rating assigned by either S&P or Moody’s if ratings differ. These rating agencies are independent, nationally recognized statistical rating organizations and are widely used. Investment grade ratings are credit ratings of BBB/Baa or higher. Below investment grade ratings are credit ratings of BB/Ba or lower. Investments designated N/R are not rated by either rating agency. Unrated investments do not necessarily indicate low credit quality. Credit quality ratings are subject to change.

 
  (b)

Represents less than 1% of the Trust’s total investments.

 
  (c)

The investment adviser evaluates the credit quality of unrated investments based upon certain factors including, but not limited to, credit ratings for similar investments and financial analysis of sectors and individual investments. Using this approach, the investment adviser has deemed certain of these unrated securities as investment grade quality. As of July 31, 2018 and July 31, 2017, the market value of unrated securities deemed by the investment adviser to be investment grade represents 2% and 4%, respectively, of the Trust’s total investments.

 
 

 

 

TRUST SUMMARY      9  


Trust Summary  as of July 31, 2018    BlackRock Municipal 2030 Target Term Trust

 

Trust Overview

BlackRock Municipal 2030 Target Term Trust’s (BTT) (the “Trust”) investment objectives are to provide current income exempt from regular U.S. federal income tax (but which may be subject to the federal alternative minimum tax in certain circumstances) and to return $25.00 per common share (the initial offering price per share) to holders of common shares on or about December 31, 2030. The Trust seeks to achieve its investment objectives by investing at least 80% of its assets in municipal bonds exempt from U.S. federal income taxes (except that the interest may be subject to the federal alternative minimum tax). The Trust invests at least 80% of its assets in municipal bonds that are investment grade quality, or are considered by the Trust’s investment adviser to be of comparable quality, at the time of investment. The Trust actively manages the maturity of its bonds to seek to have a dollar weighted average effective maturity approximately equal to the Trust’s maturity date. The Trust may invest directly in such securities or synthetically through the use of derivatives.

There is no assurance that the Trust will achieve its investment objective of returning $25.00 per share.

Trust Information

 

Symbol on NYSE

  BTT

Initial Offering Date

  August 30, 2012

Termination Date (on or about)

  December 31, 2030

Current Distribution Rate on Closing Market Price as of July 31, 2018 ($21.43)(a)

  3.49%

Tax Equivalent Yield(b)

  5.90%

Current Monthly Distribution per Common Share(c)

  $0.0624

Current Annualized Distribution per Common Share(c)

  $0.7488

Economic Leverage as July 31, 2018(d)

  38%

 

  (a)

Current Distribution Rate on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. The current distribution rate may consist of income, net realized gains and/or a return of capital. See the financial highlights for the actual sources and character of distributions. Past performance does not guarantee future results.

 
  (b)

Tax equivalent yield assumes the maximum marginal U.S. federal tax rate of 40.80%, which includes the 3.8% Medicare tax. Actual tax rates will vary based on income, exemptions and deductions. Lower taxes will result in lower tax equivalent yields.

 
  (c)

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

 
  (d)

Represents RVMTP Shares and TOB Trusts as a percentage of total managed assets, which is the total assets of the Trust, including any assets attributable to RVMTP Shares and TOB Trusts, minus the sum of accrued liabilities. For a discussion of leveraging techniques utilized by the Trust, please see The Benefits and Risks of Leveraging on page 5.

 

Performance

Returns for the 12 months ended July 31, 2018 were as follows:

 

    Returns Based On  
     Market Price      NAV  

BTT(a)(b)

    (3.73 )%       3.04

Lipper General & Insured Municipal Debt Funds (Leveraged)(c)

    (4.84      1.88  

 

  (a) 

All returns reflect reinvestment of dividends and/or distributions at actual reinvestment prices.

 
  (b) 

The Trust’s discount to NAV widened during the period, which accounts for the difference between performance based on market price and performance based on NAV.

 
  (c) 

Average return. Returns reflect reinvestment of dividends and/or distributions at NAV on the ex-dividend as calculated by Lipper.

 

Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.

Past performance is not indicative of future results.

The following discussion relates to the Trust’s absolute performance based on NAV:

 

 

The U.S. municipal bond market posted a narrow gain in the 12-month period, with the contribution from yield offsetting negative price performance. Although tax-exempt issues sold off sharply in early 2018 due to a spike in U.S. Treasury yields, the market was supported by the improving fundamentals of state and local issuers, as well as low new-issue supply from January onward.

 

 

The Trust’s allocation to state-taxed backed bonds added value, primarily due to its positions in New Jersey issues. New Jersey bonds outpaced the national market due in part to investors’ positive reaction to legislation that redirected roughly $1 billion annually in lottery proceeds to the state’s pension funds. Yield spreads on New Jersey bonds compressed, contributing to the positive returns.

 

 

The Trust’s allocation to the health care sector also made a significant contribution to performance.

 

 

Positions in higher-yielding, lower-rated bonds performed well and outpaced the overall market. The category was boosted by improving credit fundamentals and the combination of strong investor demand and limited new-issue supply.

 

 

The Trust’s holdings in short- and intermediate-term bonds, which are more sensitive to Fed policy than longer-term issues, detracted from performance.

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

 

 

10    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Trust Summary  as of July 31, 2018 (continued)    BlackRock Municipal 2030 Target Term Trust

 

Market Price and Net Asset Value Per Share Summary

 

    

07/31/18

    

07/31/17

     Change      High      Low  

Market Price

  $ 21.43      $ 23.14        (7.39 )%     $ 23.27      $ 20.98  

Net Asset Value

    23.62        23.83        (0.88      24.57        23.30  

Market Price and Net Asset Value History For the Past Five Years

 

LOGO

 

Overview of the Trust’s Total Investments *

 

SECTOR ALLOCATION

 

Sector

  07/31/18     07/31/17  

Transportation

    23     25

Health

    19       19  

County/City/Special District/School District

    15       14  

Education

    12       13  

State

    10       12  

Corporate

    8       8  

Utilities

    7       6  

Housing

    3       1  

Tobacco

    3       2  

For Trust compliance purposes, the Trust’s sector classifications refer to one or more of the sector sub-classifications used by one or more widely recognized market indexes or rating group indexes, and/or as defined by the investment adviser. These definitions may not apply for purposes of this report, which may combine such sector sub-classifications for reporting ease.

CALL/MATURITY SCHEDULE (d)

 

Calendar Year Ended December 31,

       

2018

    2

2019

     

2020

    4  

2021

    1  

2022

    30  

 

  (d) 

Scheduled maturity dates and/or bonds that are subject to potential calls by issuers over the next five years.

 
  *

Excludes short-term securities.

 

CREDIT QUALITY ALLOCATION (a)

 

Credit Rating

  07/31/18     07/31/17  

AAA/Aaa

    3     4

AA/Aa

    32       30  

A

    37       36  

BBB/Baa

    17       17  

BB/Ba

    2       2  

B

    1       2  

CCC/Caa

          (b)  

N/R(c)

    8       9  

 

  (a) 

For financial reporting purposes, credit quality ratings shown above reflect the highest rating assigned by either S&P or Moody’s if ratings differ. These rating agencies are independent, nationally recognized statistical rating organizations and are widely used. Investment grade ratings are credit ratings of BBB/Baa or higher. Below investment grade ratings are credit ratings of BB/Ba or lower. Investments designated N/R are not rated by either rating agency. Unrated investments do not necessarily indicate low credit quality. Credit quality ratings are subject to change.

 
  (b) 

Represents less than 1% of total investments.

 
  (c) 

The investment adviser evaluates the credit quality of unrated investments based upon certain factors including, but not limited to, credit ratings for similar investments and financial analysis of sectors and individual investments. Using this approach, the investment adviser has deemed certain of these unrated securities as investment grade quality. As of July 31, 2018 and July 31, 2017, the market value of unrated securities deemed by the investment adviser to be investment grade represents less than 1% of the Trust’s total investments.

 
 

 

 

TRUST SUMMARY      11  


Trust Summary  as of July 31, 2018    BlackRock Municipal Income Investment Trust

 

Trust Overview

BlackRock Municipal Income Investment Trust’s (BBF) (the “Trust”) investment objective is to provide current income exempt from regular U.S. federal income tax. The Trust seeks to achieve its investment objective by investing at least 80% of its assets in municipal bonds, the interest of which is exempt from U.S. federal income taxes. The Trust invests at least 80% of its assets in municipal bonds that are investment grade quality, or are considered by the Trust’s investment adviser to be of comparable quality, at the time of investment. The Trust may invest directly in such securities or synthetically through the use of derivatives.

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

Trust Information

 

Symbol on NYSE

  BBF

Initial Offering Date

  July 27, 2001

Yield on Closing Market Price as of July 31, 2018 ($13.37)(a)

  5.43%

Tax Equivalent Yield(b)

  9.17%

Current Monthly Distribution per Common Share(c)

  $0.0605

Current Annualized Distribution per Common Share(c)

  $0.7260

Economic Leverage as of July 31, 2018(d)

  42%

 

  (a)

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

 
  (b)

Tax equivalent yield assumes the maximum marginal U.S. federal tax rate of 40.80%, which includes the 3.8% Medicare tax. Actual tax rates will vary based on income, exemptions and deductions. Lower taxes will result in lower tax equivalent yields.

 
  (c)

The distribution rate is not constant and is subject to change. A portion of the distribution may be deemed a return of capital or net realized gain.

 
  (d)

Represents VRDP Shares and TOB Trusts as a percentage of total managed assets, which is the total assets of the Trust, including any assets attributable to VRDP Shares and TOB Trusts, minus the sum of accrued liabilities. For a discussion of leveraging techniques utilized by the Trust, please see The Benefits and Risks of Leveraging on page 5.

 

Performance

Returns for the 12 months ended July 31, 2018 were as follows:

 

    Returns Based On  
     Market Price      NAV  

BBF(a)(b)

    (7.08 )%       1.65

Lipper General & Insured Municipal Debt Funds (Leveraged)(c)

    (4.84      1.88  

 

  (a) 

All returns reflect reinvestment of dividends and/or distributions at actual reinvestment prices.

 
  (b) 

The Trust moved from a premium to NAV to a discount during the period, which accounts for the difference between performance based on market price and performance based on NAV.

 
  (c) 

Average return. Returns reflect reinvestment of dividends and/or distributions at NAV on the ex-dividend as calculated by Lipper.

 

Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.

Past performance is not indicative of future results.

The following discussion relates to the Trust’s absolute performance based on NAV:

 

 

The U.S. municipal bond market posted a narrow gain in the 12-month period, with the contribution from yield offsetting negative price performance. Although tax-exempt issues sold off sharply in early 2018 due to a spike in U.S. Treasury yields, the market was supported by the improving fundamentals of state and local issuers, as well as low new-issue supply from January onward.

 

 

Positions in bonds with maturities of 20 years and above made a strong contribution to the Trust’s return. Longer-term bonds, in addition to generating stronger price performance than other market segments, also provided higher income.

 

 

Positions in BBB rated and non-investment grade securities, particularly those in the tobacco sector, were additive to results. Pre-refunded securities further aided performance, as they provide much higher income than what was available in the marketplace.

 

 

The Trust sought to manage interest rate risk using U.S. Treasury futures. Since Treasury yields rose (as prices fell), this aspect of the Trust’s positioning had a positive impact on returns.

 

 

The Trust’s use of leverage, while amplifying the impact of weak price performance, was a net contributor since it provided additional income. However, the cost of leverage increased due to rising short-term interest rates.

 

 

The Trust’s allocation to higher-quality securities detracted from performance relative to lower-rated issues, as the latter category provided higher income and stronger price performance.

 

 

Positions in bonds with shorter and intermediate maturities, which lagged those with longer-dated maturities, also detracted from performance.

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

 

 

12    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Trust Summary  as of July 31, 2018 (continued)    BlackRock Municipal Income Investment Trust

 

Market Price and Net Asset Value Per Share Summary

 

     07/31/18      07/31/17      Change      High      Low  

Market Price

  $ 13.37      $ 15.27        (12.44 )%     $ 15.43      $ 12.75  

Net Asset Value

    13.87        14.48        (4.21      14.58        13.79  

Market Price and Net Asset Value History For the Past Five Years

 

LOGO

Overview of the Trust’s Total Investments *

 

SECTOR ALLOCATION

 

Sector   07/31/18     07/31/17  

County/City/Special District/School District

    22     23

Transportation

    19       21  

Health

    16       15  

Utilities

    13       14  

State

    9       9  

Education

    9       10  

Tobacco

    7       5  

Housing

    3       1  

Corporate

    2       2  

For Trust compliance purposes, the Trust’s sector classifications refer to one or more of the sector sub-classifications used by one or more widely recognized market indexes or rating group indexes, and/or as defined by the investment adviser. These definitions may not apply for purposes of this report, which may combine such sector sub-classifications for reporting ease.

CALL/MATURITY SCHEDULE (c)

 

Calendar Year Ended December 31,

       

2018

    9

2019

    27  

2020

    10  

2021

    13  

2022

    2  

 

  (c) 

Scheduled maturity dates and/or bonds that are subject to potential calls by issuers over the next five years.

 
  *

Excludes short-term securities.

 

CREDIT QUALITY ALLOCATION (a)

 

Credit Rating   07/31/18     07/31/17  

AAA/Aaa

    7     9

AA/Aa

    43       49  

A

    17       16  

BBB/Baa

    16       14  

BB/Ba

    4       3  

B

    3       3  

N/R(b)

    10       6  

 

  (a) 

For financial reporting purposes, credit quality ratings shown above reflect the highest rating assigned by either S&P or Moody’s if ratings differ. These rating agencies are independent, nationally recognized statistical rating organizations and are widely used. Investment grade ratings are credit ratings of BBB/Baa or higher. Below investment grade ratings are credit ratings of BB/Ba or lower. Investments designated N/R are not rated by either rating agency. Unrated investments do not necessarily indicate low credit quality. Credit quality ratings are subject to change.

 
  (b) 

The investment adviser evaluates the credit quality of unrated investments based upon certain factors including, but not limited to, credit ratings for similar investments and financial analysis of sectors and individual investments. Using this approach, the investment adviser has deemed certain of these unrated securities as investment grade quality. As of July 31, 2018 and July 31, 2017, the market value of unrated securities deemed by the investment adviser to be investment grade represents 1% and less than 1%, respectively, of the Trust’s total investments.

 
 

 

 

TRUST SUMMARY      13  


Trust Summary  as of July 31, 2018    BlackRock New York Municipal Income Trust

 

Trust Overview

BlackRock New York Municipal Income Trust’s (BNY) (the “Trust”) investment objective is to provide current income exempt from regular U.S. federal income tax and New York State and New York City personal income taxes. The Trust seeks to achieve its investment objective by investing primarily in municipal bonds exempt from U.S. federal income taxes (except that the interest may be subject to the federal alternative minimum tax) and New York State and New York City personal income taxes. The Trust invests at least 80% of its assets in municipal bonds that are investment grade quality, or are considered by the Trust’s investment adviser to be of comparable quality, at the time of investment. The Trust may invest directly in such securities or synthetically through the use of derivatives.

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

Trust Information

 

Symbol on NYSE

  BNY

Initial Offering Date

  July 27, 2001

Yield on Closing Market Price as of July 31, 2018 ($12.53)(a)

  4.26%

Tax Equivalent Yield(b)

  8.46%

Current Monthly Distribution per Common Share(c)

  $0.0445

Current Annualized Distribution per Common Share(c)

  $0.5340

Economic Leverage as of July 31, 2018(d)

  40%

 

  (a)

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

 
  (b)

Tax equivalent yield assumes the maximum marginal U.S. federal and state tax rate of 49.62%, which includes the 3.8% Medicare tax. Actual tax rates will vary based on income, exemptions and deductions. Lower taxes will result in lower tax equivalent yields.

 
  (c)

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

 
  (d)

Represents VMTP Shares and TOB Trusts as a percentage of total managed assets, which is the total assets of the Trust, including any assets attributable to VMTP Shares and TOB Trusts, minus the sum of accrued liabilities. For a discussion of leveraging techniques utilized by the Trust, please see The Benefits and Risks of Leveraging on page 5.

 

Performance

Returns for the 12 months ended July 31, 2018 were as follows:

 

    Returns Based On  
     Market Price      NAV  

BNY(a)(b)

    (14.61 )%       1.13

Lipper New York Municipal Debt Funds(c)

    (5.96      0.65  

 

  (a) 

All returns reflect reinvestment of dividends and/or distributions at actual reinvestment prices.

 
  (b) 

The Trust moved from a premium to NAV to a discount during the period, which accounts for the difference between performance based on market price and performance based on NAV.

 
  (c) 

Average return. Returns reflect reinvestment of dividends and/or distributions at NAV on the ex-dividend as calculated by Lipper.

 

Performance results may include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.

Past performance is not indicative of future results.

The following discussion relates to the Trust’s absolute performance based on NAV:

 

 

The U.S. municipal bond market posted a narrow gain in the 12-month period, with the contribution from yield offsetting negative price performance. Although tax-exempt issues sold off sharply in early 2018 due to a spike in U.S. Treasury yields, the market was supported by the improving fundamentals of state and local issuers, as well as low new-issue supply from January onward. Short-term bonds, which have above-average sensitivity to Fed policy, generally lagged longer-term issues.

 

 

New York municipal bonds underperformed the national market. New issuance in the state was relatively robust compared to the nation as a whole, which contributed to the weaker performance. Unfortunately, much of the new issuance was concentrated in several large issuers in which the Trust already had positions, thereby limiting the opportunity set. New York’s overall economic trends continued to improve, albeit at a rate slightly below that national level. However, the state continued to enjoy a broad and diverse economic base. One area of potential concern was the capping of deductibility of state and local taxes due to recently enacted federal tax-reform policies, which may reduce New York’s ability to raise taxes in the future.

 

 

Given that bond prices declined somewhat, the Trust’s return was primarily derived from income. The Trust’s use of leverage, while amplifying the impact of weak price performance, provided additional income and was therefore a net contributor. However, the cost of leverage increased due to rising short-term rates.

 

 

The Trust sought to manage interest rate risk using U.S. Treasury futures. Since Treasury yields rose (as prices fell), this aspect of the Trust’s positioning had a positive impact on returns.

 

 

Investments in lower-rated bonds (those rated A and below), which outpaced higher-quality issues, contributed positively. From a sector perspective, the Trust’s allocation to education and transportation issues made the largest contributions.

 

 

The Trust’s positions in bonds with two- to five-year maturities hurt performance, as this area lagged the rest of the market. This allocation is largely comprised of advance-refunded bonds that the Trust purchased in a higher-yield environment.

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

 

 

14    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Trust Summary  as of July 31, 2018 (continued)    BlackRock New York Municipal Income Trust

 

Market Price and Net Asset Value Per Share Summary

 

     07/31/18     07/31/17      Change      High      Low  

Market Price

  $ 12.53     $ 15.37        (18.48 )%     $ 15.50      $ 12.49  

Net Asset Value

    14.52       15.04        (3.46      15.20        14.37  

Market Price and Net Asset Value History For the Past Five Years

LOGO

Overview of the Trust’s Total Investments *

 

SECTOR ALLOCATION

 

Sector

  07/31/18     07/31/17  

County/City/Special District/School District

    22     20

Transportation

    21       23  

Education

    19       20  

State

    11       10  

Utilities

    11       12  

Health

    8       9  

Corporate

    3       2  

Tobacco

    3       2  

Housing

    2       2  

For Trust compliance purposes, the Trust’s sector classifications refer to one or more of the sector sub-classifications used by one or more widely recognized market indexes or rating group indexes, and/or as defined by the investment adviser. These definitions may not apply for purposes of this report, which may combine such sector sub-classifications for reporting ease.

CALL/MATURITY SCHEDULE (c)

 

Calendar Year Ended December 31,

       

2018

    4

2019

    7  

2020

    5  

2021

    15  

2022

    15  

 

  (c) 

Scheduled maturity dates and/or bonds that are subject to potential calls by issuers over the next five years.

 
  *

Excludes short-term securities.

 

CREDIT QUALITY ALLOCATION (a)

 

Credit Rating

  07/31/18     07/31/17  

AAA/Aaa

    17     16

AA/Aa

    35       40  

A

    30       28  

BBB/Baa

    7       6  

BB/Ba

    2       1  

B

    1       1  

N/R(b)

    8       8  

 

  (a) 

For financial reporting purposes, credit quality ratings shown above reflect the highest rating assigned by either S&P or Moody’s if ratings differ. These rating agencies are independent, nationally recognized statistical rating organizations and are widely used. Investment grade ratings are credit ratings of BBB/Baa or higher. Below investment grade ratings are credit ratings of BB/Ba or lower. Investments designated N/R are not rated by either rating agency. Unrated investments do not necessarily indicate low credit quality. Credit quality ratings are subject to change.

 
  (b) 

The investment adviser evaluates the credit quality of unrated investments based upon certain factors including, but not limited to, credit ratings for similar investments and financial analysis of sectors and individual investments. Using this approach, the investment adviser has deemed certain of these unrated securities as investment grade quality. As of July 31, 2018 and July 31, 2017, the market value of unrated securities deemed by the investment adviser to be investment grade represents 4% of the Trust’s total investments.

 
 

 

 

TRUST SUMMARY      15  


Schedule of Investments

July 31, 2018

  

BlackRock California Municipal Income Trust (BFZ)

(Percentages shown are based on Net Assets)

 

Security   Par
(000)
    Value  

Municipal Bonds — 97.6%

 

California — 96.0%  
County/City/Special District/School District — 23.3%  

Butte-Glenn Community College District, GO, Election of 2002, Series C, 5.50%, 08/01/19(a)

  $ 7,425     $ 7,732,246  

California Municipal Finance Authority, ARB, Senior Lien-Linxs APM Project, AMT, 5.00%, 12/31/43

    3,500       3,920,805  

City of San Jose California Hotel Tax, RB, Convention Center Expansion & Renovation Project:

   

6.13%, 05/01/31

    500       554,990  

6.50%, 05/01/36

    1,210       1,355,140  

6.50%, 05/01/42

    2,225       2,491,889  

County of Kern California, COP, Capital Improvements Projects, Series A (AGC), 6.00%, 02/01/19(a)

    2,000       2,047,340  

County of Los Angeles Metropolitan Transportation Authority, Refunding RB, Series A, 5.00%, 07/01/38

    4,815       5,624,739  

County of Riverside California Public Financing Authority, RB, Capital Facilities Project, 5.25%, 11/01/45

    8,990       10,380,573  

County of San Joaquin California Transportation Authority, Refunding RB, Limited Tax, Measure K, Series A(a):

   

5.50%, 03/01/21

    5,270       5,791,677  

6.00%, 03/01/21

    2,880       3,201,379  

Evergreen Elementary School District, GO, Election of 2006, Series B (AGC), 5.13%, 08/01/33

    2,500       2,586,075  

Los Angeles Unified School District, GO, Election of 2008, Series B-1, 5.25%, 07/01/42

    12,500       14,904,500  

Modesto Irrigation District, COP, Capital Improvements, Series A, 5.75%, 10/01/29

    3,035       3,117,977  

Oak Grove School District, GO, Election of 2008, Series A, 5.50%, 08/01/33

    1,315       1,367,140  

Pico Rivera Public Financing Authority, RB, 5.75%, 09/01/19(a)

    2,000       2,092,720  

Sacramento Area Flood Control Agency, Refunding, Consolidated Capital Assessment District, 5.00%, 10/01/41

    8,000       9,138,160  

San Jose California Financing Authority, Refunding LRB, Civic Center Project, Series A, 5.00%, 06/01/32

    3,375       3,789,247  

San Leandro California Unified School District, GO, Election of 2010, Series A, 5.75%, 08/01/41

    3,060       3,387,512  

Santa Clarita Public Finance Authority, RB, Streetlights Acquisition And Retrofit Program, Series A, 5.00%, 09/01/43

    3,205       3,667,289  

Santa Monica Public Financing Authority, RB, Downtown Fire Station Project, 5.00%, 07/01/42

    1,250       1,438,963  

Torrance Unified School District California, GO, Election of 2008, Measure Z, 6.00%, 08/01/19(a)

    4,000       4,185,240  

Tustin California School District, GO, Election of 2008, Series B, 5.25%, 08/01/21(a)

    3,445       3,814,752  

Washington Township Health Care District, GO, Election of 2004, Series B, 5.50%, 08/01/38

    1,625       1,891,012  

West Contra Costa California Unified School District, GO:

   

Election of 2010, Series A (AGM), 5.25%, 08/01/21(a)

    4,460       4,938,692  

Election of 2012, Series A, 5.50%, 08/01/39

    2,500       2,874,350  

Series D, 4.00%, 08/01/41

    3,475       3,626,475  
   

 

 

 
    109,920,882  
Education — 11.8%  

California Educational Facilities Authority, Refunding RB, San Francisco University:

   

6.13%, 10/01/21(a)

    3,075       3,494,369  

6.13%, 10/01/36

    3,205       3,617,740  

California Municipal Finance Authority, RB, Emerson College, 5.75%, 01/01/22(a)

    2,500       2,834,400  
Security   Par
(000)
    Value  
Education (continued)  

California Municipal Finance Authority, Refunding RB, Emerson College, Series B:

   

5.00%, 01/01/34

  $ 695     $ 789,318  

5.00%, 01/01/36

    750       846,600  

5.00%, 01/01/37

    630       708,983  

5.00%, 01/01/42

    1,000       1,119,390  

California State University, Refunding RB, Systemwide, Series A:

   

5.00%, 11/01/33

    5,640       6,571,108  

5.00%, 11/01/39

    8,420       9,895,773  

5.00%, 11/01/42

    5,300       6,109,999  

5.00%, 11/01/43(b)

    5,000       5,861,900  

University of California, Refunding RB:

   

Limited Project, Series O, 5.00%, 05/15/40

    3,500       4,067,105  

Limited Project, Series O, 5.00%, 05/15/43

    4,180       4,834,337  

Series AR, 5.00%, 05/15/38

    4,250       4,880,658  
   

 

 

 
    55,631,680  
Health — 10.9%  

ABAG Finance Authority for Nonprofit Corps., Refunding RB, Sharp Healthcare, Series B, 6.25%, 08/01/19(a)

    4,975       5,217,681  

California Health Facilities Financing Authority, RB:

   

Adventist Health System West, Series A, 5.75%, 09/01/19(a)

    6,710       7,017,385  

Cedars Sinai Medical Center, Series A, 5.00%, 08/15/34

    5,475       6,340,597  

Children’s Hospital, Series A, 5.25%, 11/01/41

    8,500       9,369,720  

Sutter Health, Series B, 6.00%, 08/15/20(a)

    6,015       6,560,861  

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

   

Catholic Healthcare West, 6.00%, 07/01/19(a)

    5,550       5,786,153  

Dignity Health, 6.00%, 07/01/19(a)

    4,520       4,712,326  

Sutter Health, 5.00%, 11/15/37

    2,000       2,302,760  

California Statewide Communities Development Authority, Refunding RB, Trinity Health Credit Group Composite Issue, 5.00%, 12/01/41

    4,000       4,396,880  
   

 

 

 
    51,704,363  
State — 12.2%  

Orange County Community Facilities District, Special Tax Bonds, Village of Esencia, Series A, 5.25%, 08/15/45

    2,500       2,759,250  

State of California, GO, Refunding, Various Purposes:

   

5.00%, 09/01/35

    10,115       11,753,731  

5.00%, 11/01/37

    4,690       5,496,117  

State of California, GO, Various Purposes:

   

6.00%, 04/01/19(a)

    4,245       4,378,972  

6.00%, 04/01/38

    7,755       7,978,732  

State of California Public Works Board, LRB:

   

Department of Education, Riverside Campus Project, Series B, 6.50%, 04/01/19(a)

    9,000       9,313,650  

Various Capital Projects, Series I, 5.50%, 11/01/33

    4,940       5,703,773  

Various Capital Projects, Sub-Series I-1, 6.38%, 11/01/19(a)

    5,025       5,336,751  

State of California Public Works Board, RB, Department of Corrections & Rehabilitation, Series F, 5.25%, 09/01/33

    4,335       4,933,664  
   

 

 

 
    57,654,640  
Tobacco — 5.2%  

County of California Tobacco Securitization Agency, Refunding RB, Asset-Backed, Merced County, Series A, 5.25%, 06/01/45

    1,135       1,143,206  

Golden State Tobacco Securitization Corp., Refunding RB, Series A-1, 5.00%, 06/01/47

    17,470       17,933,829  

Tobacco Securitization Authority of Northern California, Refunding RB, Asset-Backed Bonds, Series A-1, 5.38%, 06/01/38

    2,000       2,010,760  
 

 

 

16    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Schedule of Investments  (continued)

July 31, 2018

  

BlackRock California Municipal Income Trust (BFZ)

(Percentages shown are based on Net Assets)

 

Security   Par
(000)
    Value  
Tobacco (continued)  

Tobacco Securitization Authority of Southern California, Refunding RB, Tobacco Settlement, Asset-Backed, Senior Series A-1:

   

5.00%, 06/01/37

  $ 2,500     $ 2,513,450  

5.13%, 06/01/46

    885       889,761  
   

 

 

 
    24,491,006  
Transportation — 18.9%  

City & County of San Francisco California Airports Commission, ARB, Second Series E:

   

6.00%, 05/01/19(a)

    520       538,143  

6.00%, 05/01/39

    6,230       6,439,764  

City of Los Angeles California Department of Airports, ARB, AMT:

   

Sub-Series A, 5.00%, 05/15/42

    3,325       3,736,735  

Los Angeles International Airport, Sub-Series B, 5.00%, 05/15/34

    3,425       3,859,324  

Subordinate, Los Angeles International Airport, Series B, 5.00%, 05/15/31

    100       113,717  

Subordinate, Los Angeles International Airport, Series B, 5.00%, 05/15/41

    4,000       4,454,640  

Subordinate, Los Angeles International Airport, Series B, 5.00%, 05/15/46

    6,400       7,104,256  

City of Los Angeles California Department of Airports, RB, AMT, Series C, 5.00%, 05/15/44(b)

    3,215       3,626,359  

City of Los Angeles California Department of Airports, Refunding ARB, Los Angeles International Airport, Senior, Series A:

   

5.00%, 05/15/34

    6,650       6,824,696  

5.00%, 05/15/40

    4,760       5,026,417  

City of San Jose California, Refunding ARB, Norman Y Mineta San Jose International Airport SJC, AMT:

   

Series A, 5.00%, 03/01/41

    3,850       4,323,281  

Series A-1, 5.75%, 03/01/34

    3,875       4,214,101  

Series A-1, 6.25%, 03/01/34

    2,650       2,941,023  

County of Sacramento California Airport System Revenue, Refunding RB, Series B, 5.00%, 07/01/38

    1,500       1,752,780  

County of Sacramento California Airport System Revenue, Refunding ARB, Senior Series A, 5.00%, 07/01/41

    12,500       14,192,625  

County of Sacramento California Airport System Revenue, Refunding RB, AMT, Series C, 5.00%, 07/01/36

    6,395       7,371,964  

County of San Diego Regional Airport Authority, ARB, Subordinate, Series B, AMT:

   

5.00%, 07/01/37

    1,000       1,128,680  

5.00%, 07/01/42

    6,360       7,141,898  

Port of Los Angeles California Harbor Department, Refunding RB, Series A, AMT, 5.00%, 08/01/44

    4,135       4,614,660  
   

 

 

 
    89,405,063  
Utilities — 13.7%  

City of Chula Vista California, Refunding RB, San Diego Gas & Electric, Series D, 5.88%, 01/01/34

    6,555       6,777,936  

City of Los Angeles California Department of Water & Power, Refunding RB, Water System, Series A, 5.25%, 07/01/39

    4,000       4,341,320  

City of Los Angeles California Wastewater System, Refunding RB, Series A, 5.00%, 06/01/19(a)

    2,000       2,061,580  

City of Petaluma California Wastewater Revenue, Refunding RB, 6.00%, 05/01/21(a)

    5,625       6,289,088  

City of Richmond California Wastewater Revenue, Refunding RB, Series A, 5.00%, 08/01/42

    1,750       2,021,215  

City of San Francisco California Public Utilities Commission Water Revenue, RB, Sub-Series A, 5.00%, 11/01/37

    5,000       5,467,550  
Security   Par
(000)
    Value  
Utilities (continued)  

Dublin-San Ramon Services District Water Revenue, Refunding RB, 6.00%, 02/01/21(a)

  $ 2,425     $ 2,687,700  

El Dorado Irrigation District/El Dorado County Water Agency, Refunding RB, Series A (AGM), 5.25%, 03/01/39

    10,000       11,351,400  

Los Angeles Department of Water, Refunding RB, Series A, 5.25%, 07/01/44

    3,000       3,513,150  

Los Angeles Department of Water & Power System Revenue, RB, Series B, 5.00%, 07/01/38

    6,000       6,873,720  

Los Angeles Department of Water & Power System Revenue, Refunding RB, Series A, 5.00%, 07/01/33

    8,905       10,205,219  

Yorba Linda Water District, Refunding RB, Series A, 5.00%, 10/01/38

    2,570       2,990,246  
   

 

 

 
    64,580,124  
   

 

 

 

Total Municipal Bonds in California

 

    453,387,758  
   

 

 

 
Multi-State — 0.4%  
Housing — 0.4%            

Centerline Equity Issuer Trust(c):

   

Series A-4-2, 6.00%, 05/15/19

    1,000       1,030,460  

Series B-3-2, 6.30%, 05/15/19

    1,000       1,032,670  
   

 

 

 

Total Municipal Bonds in Multi-State

 

    2,063,130  
   

 

 

 
Puerto Rico — 1.2%  
Tobacco — 1.2%  

Children’s Trust Fund, Refunding RB, Tobacco Settlement Asset-Backed Bonds:

   

5.50%, 05/15/39

    2,910       2,928,973  

5.63%, 05/15/43

    2,765       2,789,111  
   

 

 

 

Total Municipal Bonds in Puerto Rico

 

    5,718,084  
   

 

 

 

Total Municipal Bonds — 97.6%
(Cost — $446,163,520)

 

    461,168,972  
   

 

 

 

Municipal Bonds Transferred to Tender Option Bond Trusts(d)

 

California — 70.5%  
County/City/Special District/School District — 24.3%  

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

    5,000       5,150,925  

Los Angeles Community College District California, GO, Election of 2008, Series C, 5.25%, 08/01/20(a)(e)

    12,902       13,851,395  

Los Angeles Community College District California, GO, Refunding, Go, Refunding, Election of 2008, Series A, 6.00%, 08/01/19(a)

    20,131       21,053,671  

Palomar Community College Distric, GO, Election of 2006, Series C, 5.00%, 08/01/44

    15,140       17,300,705  

San Diego California Community College District, GO, Election of 2002, 5.25%, 08/01/19(a)

    10,484       10,883,211  

San Francisco California Bay Area Rapid Transit District, GO, Election 2016, Green Bond, Series A, 5.00%, 08/01/47

    10,615       12,169,352  

San Joaquin California Delta Community College District, GO, Election of 2004, Series C, 5.00%, 08/01/39

    14,505       16,364,523  

San Jose Unified School District, GO, Series C, 4.00%, 08/01/39

    6,100       6,310,450  

Santa Monica Community College District, GO, Election of 2016, Series A, 5.00%, 08/01/43

    10,000       11,828,800  
   

 

 

 
    114,913,032  
Education — 15.9%  

University of California, RB:

   

Limited Project, Series M, 5.00%, 05/15/42

    10,000       11,442,400  

Series AM, 5.25%, 05/15/44

    5,000       5,729,625  

Series O, 5.75%, 05/15/19(a)

    12,303       12,727,166  
 

 

 

SCHEDULES OF INVESTMENTS      17  


Schedule of Investments  (continued)

July 31, 2018

  

BlackRock California Municipal Income Trust (BFZ)

(Percentages shown are based on Net Assets)

 

Security   Par
(000)
    Value  
Education (continued)  

University of California, Refunding RB:

   

Series A, 5.00%, 11/01/43

  $ 11,791     $ 13,370,149  

Series AI, 5.00%, 05/15/38

    14,225       15,917,728  

Series I, 5.00%, 05/15/40

    14,065       15,997,794  
   

 

 

 
    75,184,862  
Health — 9.4%  

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

   

5.00%, 11/15/41

    11,620       13,114,158  

5.00%, 08/15/52

    9,695       10,545,981  

California Statewide Communities Development Authority, RB, Kaiser Permanente, Series A, 5.00%, 04/01/42

    18,960       20,648,198  
   

 

 

 
    44,308,337  
State — 2.5%  

University of California, Refunding RB, Series AR,
5.00%, 05/15/41

    10,165       11,610,360  
   

 

 

 
Transportation — 11.8%  

City & County of San Francisco California Airports Commission, Refunding RB, San Francisco International Airport, Series B, AMT, 5.00%, 05/01/41

    8,720       9,707,802  

City of Los Angeles California Department of Airports, ARB, AMT:

   

Los Angeles International Airport, Sub-Series A, 5.00%, 05/15/42

    22,710       25,274,757  

Series D, 5.00%, 05/15/41

    18,632       20,788,006  
   

 

 

 
    55,770,565  
Utilities — 6.6%  

County of Orange California Water District, COP, Refunding, 5.00%, 08/15/19(a)

    10,480       10,872,319  

Los Angeles Department of Water, Refunding RB, Series A, 5.00%, 07/01/46

    6,412       7,292,477  

San Diego Public Facilities Financing Authority Sewer, Refunding RB, Senior Series A, 5.25%, 05/15/19(a)

    12,460       12,841,650  
   

 

 

 
    31,006,446  
   

 

 

 

Total Municipal Bonds Transferred to Tender Option Bond Trusts — 70.5%
(Cost — $327,312,876)

 

    332,793,602  
   

 

 

 

Total Long-Term Investments — 168.1%
(Cost — $773,476,396)

 

    793,962,574  
   

 

 

 
Security       
Shares
    Value  
Short-Term Securities — 1.3%  

BlackRock Liquidity Funds, MuniCash, Institutional Class,
0.85%(f)(g)

    6,190,589     $ 6,191,827  
   

 

 

 

Total Short-Term Securities — 1.3%
(Cost — $6,191,217)

 

    6,191,827  
   

 

 

 

Total Investments — 169.4%
(Cost — $779,667,613)

 

    800,154,401  

Other Assets Less Liabilities — 0.3%

 

    1,316,693  

Liability for TOB Trust Certificates, Including Interest Expense and Fees Payable — (33.4)%

 

    (157,763,871

VMTP Shares at Liquidation Value — (36.3)%

 

    (171,300,000
   

 

 

 

Net Assets Applicable to Common Shares — 100.0%

 

  $ 472,407,223  
   

 

 

 

 

(a) 

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

(b) 

When-issued security.

(c) 

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

(d) 

Represent bonds transferred to a TOB Trust in exchange of cash and residual certificates received by the Trust. These bonds serve as collateral in a secured borrowing. See Note 4 of the Notes to Financial Statements for details.

(e) 

All or a portion of security is subject to a recourse agreement. The aggregate maximum potential amount the Trust could ultimately be required to pay under the agreement, which expires on May 18, 2020, is $6,798,086. See Note 4 of the Notes to Financial Statements for details.

(f) 

Annualized 7-day yield as of period end.

 
(g) 

During the year ended July 31, 2018, investments in issuers considered to be an affiliate of the Trust for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:

 

Affiliate    Shares
Held at
07/31/17
     Net
Activity
     Shares
Held at
07/31/18
     Value at
07/31/18
     Income      Net
Realized
Gain (Loss)
 (a)
     Change in
Unrealized
Appreciation
(Depreciation)
 

BlackRock Liquidity Funds, MuniCash, Institutional Class

     252,116        5,938,473        6,190,589      $ 6,191,827      $ 18,572      $ 570      $ 585  
           

 

 

    

 

 

    

 

 

    

 

 

 

 

  (a) 

Includes net capital gain distributions, if applicable.

 

For Trust compliance purposes, the Trust’s sector classifications refer to one or more of the sector sub-classifications used by one or more widely recognized market indexes or rating group indexes, and/or as defined by the investment adviser. These definitions may not apply for purposes of this report, which may combine such sector sub-classifications for reporting ease.

 

 

18    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Schedule of Investments  (continued)

July 31, 2018

  

BlackRock California Municipal Income Trust (BFZ)

 

Derivative Financial Instruments Outstanding as of Period End

Futures Contracts

 

Description    Number of
Contracts
       Expiration
Date
       Notional
Amount (000)
       Value/
Unrealized
Appreciation
(Depreciation)
 

Short Contracts:

                 

10-Year U.S. Treasury Note

     107          09/19/18        $ 12,778        $ 57,202  

Long U.S. Treasury Bond

     144          09/19/18          20,588          (45,674

5-Year U.S. Treasury Note

     31          09/28/18          3,507          9,555  
                 

 

 

 
                  $ 21,083  
                 

 

 

 

Derivative Financial Instruments Categorized by Risk Exposure

As of year end, the fair values of derivative financial instruments located in the Statements of Assets and Liabilities were as follows:

 

      Commodity
Contracts
     Credit
Contracts
     Equity
Contracts
     Foreign
Currency
Exchange
Contracts
     Interest
Rate
Contracts
     Other
Contracts
     Total  

Assets — Derivative Financial Instruments

                    

Futures contracts

                    

Net unrealized appreciation(a)

   $      $      $      $      $ 66,757      $      $ 66,757  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Liabilities — Derivative Financial Instruments

                    

Futures contracts

                    

Net unrealized depreciation(a)

   $      $      $      $      $ 45,674      $      $ 45,674  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

  (a) 

Includes cumulative appreciation (depreciation) on futures contracts, if any, as reported in the Schedule of Investments. Only current day’s variation margin is reported within the Statements of Assets and Liabilities.

 

For the year ended July 31, 2018, the effect of derivative financial instruments in the Statements of Operations was as follows:

 

      Commodity
Contracts
     Credit
Contracts
     Equity
Contracts
     Foreign
Currency
Exchange
Contracts
     Interest
Rate
Contracts
     Other
Contracts
     Total  

Net Realized Gain (Loss) from:

                    

Futures contracts

   $      $      $      $      $ 1,806,023      $      $ 1,806,023  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net Change in Unrealized Appreciation (Depreciation) on:

                    

Futures contracts

   $      $      $      $      $ 77,945      $      $ 77,945  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Average Quarterly Balances of Outstanding Derivative Financial Instruments

 

Futures contracts:

        

Average notional value of contracts — short

   $ 30,998,912  

For more information about the Trust’s investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.

 

 

SCHEDULES OF INVESTMENTS      19  


Schedule of Investments  (continued)

July 31, 2018

  

BlackRock California Municipal Income Trust (BFZ)

 

Fair Value Hierarchy as of Period End

Various inputs are used in determining the fair value of investments and derivative financial instruments. For information about the Trust’s policy regarding valuation of investments and derivative financial instruments, refer to the Notes to Financial Statements.

The following tables summarize the Trust’s investments and derivative financial instruments categorized in the disclosure hierarchy:

 

      Level 1        Level 2        Level 3        Total  

Assets:

                 

Investments:

                 

Long-Term Investments(a)

   $        $ 793,962,574        $        $ 793,962,574  

Short-Term Securities

     6,191,827                            6,191,827  
  

 

 

      

 

 

      

 

 

      

 

 

 
   $ 6,191,827        $ 793,962,574        $        $ 800,154,401  
  

 

 

      

 

 

      

 

 

      

 

 

 

Derivative Financial Instruments(b)

                 

Assets:

                 

Interest rate contracts

   $ 66,757        $        $        $ 66,757  

Liabilities:

                 

Interest rate contracts

     (45,674                          (45,674
  

 

 

      

 

 

      

 

 

      

 

 

 
   $ 21,083        $        $             —        $ 21,083  
  

 

 

      

 

 

      

 

 

      

 

 

 

 

  (a) 

See above Schedule of Investments for values in each sector.

 
  (b) 

Derivative financial instruments are futures contracts which are valued at the unrealized appreciation (depreciation) on the instrument.

 

The Trust may hold assets and/or liabilities in which the fair value approximates the carrying amount for financial statement purposes. As of period end, such assets and/or liabilities are categorized within the disclosure hierarchy as follows:

 

      Level 1        Level 2        Level 3        Total  

Liabilities:

                 

TOB Trust Certificates

   $        $ (157,125,868      $        $ (157,125,868

VMTP Shares at Liquidation Value

              (171,300,000                 (171,300,000
  

 

 

      

 

 

      

 

 

      

 

 

 
   $             —        $ (328,425,868      $             —        $ (328,425,868
  

 

 

      

 

 

      

 

 

      

 

 

 

During the year ended July 31, 2018, there were no transfers between levels.

See notes to financial statements.

 

 

20    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Schedule of Investments

July 31, 2018

  

BlackRock Florida Municipal 2020 Term Trust (BFO)

(Percentages shown are based on Net Assets)

 

Security   Par
(000)
    Value  

Municipal Bonds — 93.7%

 

Florida — 93.2%  
Corporate — 6.7%  

Citizens Property Insurance Corp., RB, Senior Secured, Series A-1, 5.00%, 06/01/20

  $ 3,140     $ 3,322,999  

County of Palm Beach Florida Solid Waste Authority, Refunding RB, 5.00%, 10/01/20

    2,000       2,138,260  
   

 

 

 
    5,461,259  
County/City/Special District/School District — 18.8%  

City of Jacksonville Florida, RB, Series B, 5.00%, 10/01/20

    760       812,881  

City of Jacksonville Florida, Refunding RB:

   

Better Jacksonville Sales Tax, 5.00%, 10/01/20

    4,000       4,274,760  

Brooks Rehabilitation Project, 5.00%, 11/01/20

    400       426,684  

County of Broward Florida School Board, COP, Refunding, Series A, 5.00%, 07/01/20

    2,000       2,121,000  

Florida State Board of Education, GO, Refunding, Capital Outlay, Series B, 5.00%, 06/01/20

    485       503,576  

Indian River County School Board, COP, Refunding, Series A, 5.00%, 07/01/20

    1,000       1,060,500  

Miami-Dade County School Board Foundation, Inc., COP, Refunding, Series A, 5.00%, 05/01/20

    1,250       1,318,912  

Palm Beach County School District, COP, Refunding Series B, 5.00%, 08/01/20

    3,000       3,188,730  

Stevens Plantation Florida Imports Project Dependent Special District, RB, 6.38%, 05/01/13(a)(b)

    2,425       1,697,500  
   

 

 

 
    15,404,543  
Education — 4.3%  

City of Tampa Florida, Refunding RB, Florida Revenue The University of Tampa Project, 5.00%, 04/01/20

    795       835,958  

Florida Atlantic University Traffic and Parking Services Revenue, Refunding RB, Series A, 5.00%, 07/01/20

    1,150       1,219,138  

Florida State Higher Educational Facilities Financial Authority, Refunding RB, University of Tampa Project, Series A, 5.00%, 04/01/20

    1,000       1,051,520  

Volusia County School Board, COP, Refunding Series A (BAM), 5.00%, 08/01/20

    350       372,019  
   

 

 

 
    3,478,635  
Health — 18.1%  

County of Brevard Florida Health Facilities Authority, Refunding RB, 5.00%, 04/01/20

    500       526,185  

County of Highlands Florida Health Facilities Authority, Refunding RB, Hospital, Adventist Health, Series I, 5.00%, 11/15/20

    2,155       2,245,316  

County of Orange Florida Health Facilities Authority, Refunding RB, Mayflower Retirement Center, 3.50%, 06/01/19

    200       203,270  

County of Palm Beach Florida Health Facilities Authority, Refunding RB:

   

Acts Retirement-Life Communities, Inc., 4.00%, 11/15/20

    2,000       2,093,480  

Acts Retirement-Life Communities, Inc., 5.00%, 11/15/22

    4,735       5,208,500  

Bethesda Healthcare System Project, Series A (AGM), 5.00%, 07/01/20(c)

    1,285       1,366,006  

Halifax Hospital Medical Center, Refunding RB, 5.00%, 06/01/20

    590       621,536  

Miami Beach Health Facilities Authority, Refunding RB, 5.00%, 11/15/20

    150       159,344  

South Miami Health Facilities Authority, Refunding RB, Baptist Health South Florida Obligated Group, 5.00%, 08/15/20

    2,250       2,391,907  
   

 

 

 
    14,815,544  
Security   Par
(000)
    Value  
Housing — 0.2%  

County of Lee Florida HFA, RB, S/F Housing, Multi-County Program, Series A-2, AMT (Ginnie Mae, Fannie Mae & Freddie Mac), 6.00%, 09/01/40

  $ 75     $ 75,472  

County of Manatee Florida HFA, RB, S/F Housing, Series A, AMT (Ginnie Mae, Fannie Mae & Freddie Mac), 5.90%, 09/01/40

    90       91,289  
   

 

 

 
    166,761  
State — 9.8%  

Florida Municipal Loan Council, RB, Series D (AGM):

   

5.00%, 10/01/19

    1,050       1,089,869  

4.00%, 10/01/20

    1,105       1,152,747  

4.00%, 10/01/21

    500       528,765  

Florida Municipal Loan Council, Refunding RB:

   

CAB, Series A (NPFGC), 0.00%, 04/01/20(d)

    1,500       1,417,890  

Series B-2 (AGM), 4.00%, 10/01/20

    655       680,892  

State of Florida Department of Environmental Protection, Refunding RB, Series A, 5.00%, 07/01/20

    3,000       3,183,840  
   

 

 

 
    8,054,003  
Transportation — 14.6%  

City of Jacksonville Florida Port Authority, Refunding RB, AMT, 4.00%, 11/01/20

    865       891,434  

County of Broward Florida Fuel System, RB, Lauderdale Fuel Facilities, Series A (AGM), AMT, 5.00%, 04/01/20

    160       168,460  

County of Broward Florida Port Facilities, Refunding RB, Series B, AMT, 5.00%, 09/01/20

    2,500       2,654,700  

County of Hillsborough Aviation Authority, Refunding ARB, Tampa International Airport, Series A, 5.00%, 10/01/18

    3,400       3,420,502  

County of Miami-Dade Florida, Refunding RB, Series A, AMT, 5.00%, 10/01/20

    1,375       1,466,424  

County of Miami-Dade Florida Expressway Authority, Refunding RB, Toll System, Series A, 5.00%, 07/01/20

    1,500       1,590,750  

County of Miami-Dade Florida Transit System Sales Surtax, Refunding RB, 5.00%, 07/01/20

    550       583,275  

Greater Orlando Aviation Authority, Refunding RB, Series C, 5.00%, 10/01/20

    1,130       1,207,371  
   

 

 

 
    11,982,916  
Utilities — 20.7%  

City of Fort Lauderdale Florida Water & Sewer Revenue, Refunding RB, 5.00%, 09/01/20

    2,970       3,171,990  

City of Gainesville Florida Utilities System Revenue, VRDN, Refunding RB, Series B, 1.50%, 10/01/42(f)

    3,500       3,500,000  

City of Miami Beach Florida, RB, 5.00%, 09/01/20

    250       265,890  

City of North Miami Florida Beach Water Revenue, RB, 5.00%, 08/01/20

    1,200       1,275,492  

County of Miami-Dade Florida Water & Sewer System, Refunding RB, Series B (AGM), 5.25%, 10/01/19

    4,000       4,172,800  

Florida Governmental Utility Authority, RB, Golden Gate Utility System (AGM), 5.00%, 07/01/19(c)

    510       525,948  

Florida Governmental Utility Authority, Refunding RB (AGM):

   

4.00%, 10/01/20

    500       521,605  

Lehigh Utility, 5.00%, 10/01/20

    635       675,964  

Florida Municipal Power Agency, RB, 5.00%, 10/01/20

    500       533,355  

Orlando Utilities Commission, VRDN, RB, Series 2, 1.60%, 10/01/33(f)

    1,700       1,700,000  

Town of Davie Florida, Refunding RB, Nova Southeastern University Project, Series B, 5.00%, 04/01/20

    530       557,666  
   

 

 

 
    16,900,710  
   

 

 

 

Total Municipal Bonds in Florida

 

    76,264,371  
   

 

 

 
 

 

 

SCHEDULES OF INVESTMENTS      21  


Schedule of Investments  (continued)

July 31, 2018

  

BlackRock Florida Municipal 2020 Term Trust (BFO)

(Percentages shown are based on Net Assets)

 

Security   Par
(000)
    Value  
Guam — 0.5%  
Utilities — 0.5%  

Guam Government Waterworks Authority, RB, 5.25%, 07/01/20

  $ 100     $ 105,736  

Guam Power Authority, Refunding RB, Series A (AGM), 5.00%, 10/01/20

    310       329,592  
   

 

 

 

Total Municipal Bonds in Guam

 

    435,328  
 

 

 

 

Total Municipal Bonds — 93.7%
(Cost — $76,276,168)

 

    76,699,699  
 

 

 

 
     Shares         
Short-Term Securities — 5.3%  

BlackRock Liquidity Funds, MuniCash, Institutional Class, 0.85%(g)(h)

    4,311,666       4,312,529  
   

 

 

 

Total Short-Term Securities — 5.3%
(Cost — $4,312,092)

 

    4,312,529  
   

 

 

 

Total Investments — 99.0%
(Cost — $80,588,260)

 

    81,012,228  

Other Assets Less Liabilities — 1.0%

 

    796,980  
   

 

 

 

Net Assets Applicable to Common Shares — 100.0%

 

  $ 81,809,208  
   

 

 

 

 

(a) 

Non-income producing security.

(b) 

Issuer filed for bankruptcy and/or is in default.

(c) 

Security is collateralized by municipal bonds or U.S. Treasury obligations.

(d) 

Zero-coupon bond.

(e) 

Variable or floating rate security, which interest rate adjusts periodically based on changes in current interest rates and prepayments on the underlying pool of assets. Rate shown is the rate in effect as of period end.

(f) 

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

(g) 

Annualized 7-day yield as of period end.

 
(h) 

During the year ended July 31, 2018, investments in issuers considered to be an affiliate of the Trust for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:

 

Affiliate    Shares
Held at
07/31/17
     Net
Activity
     Shares
Held at
07/31/18
     Value at
07/31/18
     Income      Net
Realized
Gain (Loss)
 (a)
     Change in
Unrealized
Appreciation
(Depreciation)
 

BlackRock Liquidity Funds, MuniCash, Institutional Class

     2,171,482        2,140,184        4,311,666      $ 4,312,529      $ 20,584      $ 433      $ (113
           

 

 

    

 

 

    

 

 

    

 

 

 

 

  (a)

Includes net capital gain distributions, if applicable.

 

For Trust compliance purposes, the Trust’s sector classifications refer to one or more of the sector sub-classifications used by one or more widely recognized market indexes or rating group indexes, and/or as defined by the investment adviser. These definitions may not apply for purposes of this report, which may combine such sector sub-classifications for reporting ease.

Fair Value Hierarchy as of Period End

Various inputs are used in determining the fair value of investments. For information about the Trust’s policy regarding valuation of investments, refer to the Notes to Financial Statements.

The following tables summarize the Trust’s investments categorized in the disclosure hierarchy:

 

      Level 1        Level 2        Level 3        Total  

Assets:

                 

Investments:

                 

Long-Term Investments(a)

   $        $ 76,699,699        $        $ 76,699,699  

Short-Term Securities

     4,312,529                            4,312,529  
  

 

 

      

 

 

      

 

 

      

 

 

 
   $ 4,312,529        $ 76,699,699        $             —        $ 81,012,228  
  

 

 

      

 

 

      

 

 

      

 

 

 

 

  (a) 

See above Schedule of Investments for values in each sector.

 

During the year ended July 31, 2018, there were no transfers between levels.

See notes to financial statements.

 

 

22    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Schedule of Investments

July 31, 2018

  

BlackRock Municipal 2030 Target Term Trust (BTT)

(Percentages shown are based on Net Assets)

 

Security   Par
(000)
    Value  

Municipal Bonds — 131.9%

 

Alabama — 2.3%  

Alabama Federal Aid Highway Finance Authority, RB, Series A:

   

5.00%, 09/01/33

  $ 3,985     $ 4,673,090  

5.00%, 09/01/34

    3,500       4,095,175  

Alabama Special Care Facilities Financing Authority-Birmingham, Refunding RB, Children’s Hospital of Albama, 5.00%, 06/01/30

    10,000       11,233,100  

Birmingham-Jefferson Civic Center Authority, Special Tax Bonds, Series A(a):

   

5.00%, 07/01/31

    1,100       1,270,885  

5.00%, 07/01/32

    1,150       1,323,374  

5.00%, 07/01/33

    1,600       1,833,904  

County of Jefferson Alabama Sewer Revenue, Refunding RB, CAB, Senior Lien-Warrants, Series B (AGM)(b):

   

0.00%, 10/01/31

    7,375       3,898,499  

0.00%, 10/01/32

    6,295       3,083,480  

0.00%, 10/01/33

    1,275       584,358  

Homewood Educational Building Authority, Refunding RB, Educational Facilities, Samford University, Series A:

   

5.00%, 12/01/33

    1,010       1,134,796  

5.00%, 12/01/34

    1,380       1,540,452  

University of South Alabama, Refunding RB, AGM:

   

5.00%, 11/01/29

    1,105       1,274,960  

5.00%, 11/01/30

    2,000       2,299,700  
   

 

 

 
    38,245,773  
Alaska — 0.1%  

Northern Tobacco Securitization Corp., Refunding RB, Tobacco Settlement, Asset-Backed, Series A, 4.63%, 06/01/23

    1,360       1,361,686  
   

 

 

 
Arizona — 2.2%  

Arizona Health Facilities Authority, Refunding RB, Phoenix Children’s Hospital:

   

Series A, 5.00%, 02/01/34

    6,340       6,740,688  

Series B, 5.00%, 02/01/33

    1,810       1,912,030  

City of Phoenix Arizona IDA, RB, Facility:

   

Candeo Schools, Inc. Project, 6.00%, 07/01/23

    430       466,206  

Eagle College Preparatory Project, Series A, 4.50%, 07/01/22

    400       411,256  

Eagle College Preparatory Project, Series A, 5.00%, 07/01/33

    1,000       1,021,320  

Legacy Traditional Schools Project, Series A, 5.75%, 07/01/24(c)

    750       806,707  

City of Phoenix Arizona IDA, Refunding RB, Downtown Phoenix Student Housing, Series A:

   

5.00%, 07/01/29

    175       198,709  

5.00%, 07/01/31

    175       196,980  

County of Maricopa IDA, Refunding RB, Banner Health, Series A, 5.00%, 01/01/31

    16,280       18,815,936  

County of Pima Arizona IDA, Refunding RB, Tucson Electric Power Co. Project, Series A, 4.00%, 09/01/29

    6,000       6,275,820  
   

 

 

 
    36,845,652  
California — 11.5%  

Alameda Corridor Transportation Authority, Refunding RB, CAB, Sub-Lien, Series A (AMBAC), 0.00%, 10/01/30(b)

    10,530       6,411,928  

Azusa Unified School District, GO, Refunding, (AGM), 4.00%, 08/01/31

    4,825       5,183,594  

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

   

5.00%, 11/15/32

    1,600       1,878,864  

5.00%, 11/15/33

    1,855       2,166,770  
Security   Par
(000)
    Value  
California (continued)  

California Health Facilities Financing Authority, Refunding RB, Sutter Health, Series A, 5.00%, 11/15/32

  $ 1,700     $ 1,996,293  

California Municipal Finance Authority, RB:

   

Biola University, 4.00%, 10/01/33

    2,500       2,568,025  

Senior, S/F Housing, Caritas Affordable Housing, Inc. Project, Series A, 5.00%, 08/15/30

    1,000       1,101,080  

California Municipal Finance Authority, Refunding RB, Eisenhower Medical Center, Series A:

   

5.00%, 07/01/30

    1,200       1,352,448  

5.00%, 07/01/31

    1,050       1,179,087  

California Pollution Control Financing Authority, RB, Poseidon Resources (Channel Side) LP Desalination Project, AMT, 5.00%, 07/01/30(c)

    13,845       14,838,794  

California Statewide Communities Development Authority, RB, Eskaton Properties, Inc., 5.25%, 11/15/34

    2,500       2,705,700  

City of Long Beach California Harbor Revenue, RB, AMT, Series A:

   

5.00%, 05/15/31

    1,200       1,390,128  

5.00%, 05/15/32

    1,800       2,076,156  

5.00%, 05/15/33

    675       775,751  

5.00%, 05/15/34

    1,650       1,890,801  

City of San Jose California, Refunding ARB, Norman Y Mineta San Jose International Airport SJC, Series A, AMT:

   

5.00%, 03/01/30

    500       575,555  

5.00%, 03/01/31

    1,500       1,720,545  

5.00%, 03/01/32

    1,000       1,142,970  

5.00%, 03/01/33

    975       1,111,247  

5.00%, 03/01/34

    1,250       1,420,637  

5.00%, 03/01/35

    2,000       2,266,600  

County of San Diego Regional Airport Authority, ARB, AMT, Sub-Series B, 5.00%, 07/01/33

    1,000       1,142,780  

El Camino Community College District, GO, CAB, Election of 2002, Series C(b):

   

0.00%, 08/01/30

    9,090       6,314,459  

0.00%, 08/01/31

    12,465       8,314,404  

0.00%, 08/01/32

    17,435       11,133,817  

Golden State Tobacco Securitization Corp., Refunding RB, Series A-1, 5.00%, 06/01/29

    14,500       16,601,340  

Los Angeles California Unified School District, GO, Election of 2008, Series A, 4.00%, 07/01/33

    3,000       3,189,870  

Los Angeles Regional Airports Improvement Corp., Refunding RB, LAXFuel Corp., Los Angeles International, AMT, 5.00%, 01/01/32

    4,110       4,348,709  

M-S-R Energy Authority, RB, Series C, 6.13%, 11/01/29

    2,500       3,100,400  

Monterey Peninsula Community College District, GO, Refunding, CAB(b):

   

0.00%, 08/01/30

    3,500       2,368,940  

0.00%, 08/01/31

    5,940       3,817,816  

Oakland Unified School District/Alameda County, GO, Refunding, 5.00%, 08/01/30

    1,800       2,127,222  

Oakland Unified School District/Alameda County, GO, Refunding Series C, 5.00%, 08/01/30

    1,300       1,553,474  

Poway Unified School District, GO, Election of 2008, Series A(b):

   

0.00%, 08/01/30

    10,000       6,768,400  

0.00%, 08/01/32

    12,500       7,659,375  

Riverside Public Financing Authority, Tax Allocation Bonds, University Corridor/Sycamore Canyon Merged Redevelopment Project, Series C (NPFGC), 4.50%, 08/01/30

    10,000       10,019,500  
 

 

 

SCHEDULES OF INVESTMENTS      23  


Schedule of Investments  (continued)

July 31, 2018

  

BlackRock Municipal 2030 Target Term Trust (BTT)

(Percentages shown are based on Net Assets)

 

Security   Par
(000)
    Value  
California (continued)  

San Bernardino Community College District, GO, Refunding, Series A:

   

4.00%, 08/01/31

  $ 10,660     $ 11,329,448  

4.00%, 08/01/32

    12,010       12,723,754  

State of California, GO, Refunding:

   

5.00%, 08/01/30

    10,000       11,940,900  

Various Purpose, 4.00%, 09/01/34

    10,000       10,660,900  

Washington Township Health Care District, Refunding RB, Series B, 3.00%, 07/01/28

    1,000       970,660  
   

 

 

 
    191,839,141  
Colorado — 2.2%  

Central Platte Valley Metropolitan District, GO, Series A:

   

5.13%, 12/01/29

    700       774,200  

5.50%, 12/01/29

    750       843,270  

City of Lakewood Colorado Plaza Metropolitan District No. 1, Refunding, Tax Allocation Bonds(c):

   

4.00%, 12/01/23

    1,000       1,029,220  

4.10%, 12/01/24

    5,080       5,209,540  

4.20%, 12/01/25

    5,280       5,388,768  

4.50%, 12/01/30

    4,305       4,357,134  

Colorado Health Facilities Authority, Refunding RB:

   

Covenant Retirement Communities, Series A, 4.50%, 12/01/33

    4,595       4,647,475  

Covenant Retirement Communities, Series A, 5.00%, 12/01/33

    3,000       3,202,860  

NCMC, Inc. Project, 4.00%, 05/15/30

    2,860       3,020,503  

Copperleaf Metropolitan District No. 2, GO, Refunding, 5.25%, 12/01/30

    500       523,840  

Park Creek Metropolitan District, Refunding, Tax Allocation Bonds, Senior Limited Property, Series A:

   

5.00%, 12/01/27

    1,500       1,722,630  

5.00%, 12/01/28

    1,500       1,721,550  

5.00%, 12/01/30

    1,350       1,540,741  

5.00%, 12/01/31

    1,500       1,708,740  

Tallyns Reach Metropolitan District No. 3, GO, Refunding, 5.00%, 12/01/33

    503       531,108  
   

 

 

 
    36,221,579  
Connecticut — 1.3%  

State of Connecticut, GO:

   

Series A, 5.00%, 04/15/33

    7,000       7,826,630  

Series D, 4.00%, 08/15/29

    11,500       11,981,505  

State of Connecticut Health & Educational Facilities Authority, RB, Sacred Heart University Issue, Series I-1:

   

5.00%, 07/01/31

    400       457,444  

5.00%, 07/01/35

    400       451,472  
   

 

 

 
    20,717,051  
Delaware — 0.3%  

County of Kent Delaware, RB, CHF-Dover, LLC-Delaware State University Project, Series A:

   

4.00%, 07/01/22

    230       241,992  

4.00%, 07/01/23

    570       601,994  

5.00%, 07/01/24

    705       782,078  

5.00%, 07/01/25

    805       899,507  

5.00%, 07/01/26

    850       951,158  

5.00%, 07/01/27

    890       999,417  

5.00%, 07/01/28

    935       1,045,835  
   

 

 

 
    5,521,981  
District of Columbia — 0.5%  

District of Columbia, Refunding RB, Kipp Charter School, Series A, 6.00%, 07/01/23(d)

    1,700       2,012,341  
Security   Par
(000)
    Value  
District of Columbia (continued)  

Metropolitan Washington Airports Authority, Refunding RB, AMT:

   

5.00%, 10/01/32

  $ 2,750     $ 3,161,565  

5.00%, 10/01/33

    1,270       1,452,435  

5.00%, 10/01/34

    2,000       2,280,480  
   

 

 

 
    8,906,821  
Florida — 9.1%  

City of Lakeland Florida, Refunding RB, Lakeland Regional Health System, 5.00%, 11/15/30

    3,750       4,272,863  

City of Tampa Florida, Refunding RB, H. Lee Moffitt Cancer Center Project, Series A, 4.00%, 09/01/33

    10,000       10,330,600  

County of Alachua Florida Health Facilities Authority, RB, East Ridge Retirement Village, Inc. Project, 6.00%, 11/15/29

    5,000       5,319,050  

County of Broward Florida, ARB, AMT:

   

5.00%, 10/01/30

    2,290       2,640,599  

5.00%, 10/01/31

    2,000       2,295,880  

5.00%, 10/01/33

    2,000       2,278,780  

5.00%, 10/01/34

    1,500       1,705,260  

County of Broward Florida, RB, Fort Lauderdale Fuel Facilities, Series A, AMT (AGM):

   

5.00%, 04/01/30

    600       650,208  

5.00%, 04/01/33

    740       798,586  

County of Martin Florida IDA, Refunding RB, Indiantown Cogeneration, L.P. Project, AMT, 4.20%, 12/15/25(c)

    5,250       5,335,785  

County of Miami-Dade Florida, Refunding RB, Series B, 4.00%, 04/01/32

    6,690       7,023,095  

County of Miami-Dade Florida School Board, COP, Refunding, Series A, 5.00%, 05/01/32

    9,000       10,123,110  

County of Orange Florida Tourist Development Tax Revenue, Refunding RB:

   

5.00%, 10/01/30

    11,470       13,936,738  

4.00%, 10/01/31

    16,485       17,461,901  

County of Palm Beach Florida Health Facilities Authority, Refunding RB, Acts Retirement-Life Communities, Inc. Obligated Group, 5.00%, 11/15/32

    19,790       21,998,366  

County of St. Johns Florida Water & Sewer Revenue, Refunding RB, CAB, Series B(b):

   

0.00%, 06/01/30

    2,000       1,367,400  

0.00%, 06/01/31

    1,295       848,769  

0.00%, 06/01/32

    2,495       1,567,309  

Double Branch Community Development District, Refunding, Special Assessment Bonds, Senior Lien, Series A-1, 4.13%, 05/01/31

    1,200       1,230,900  

Greater Orlando Aviation Authority, Refunding RB, Jet Blue Airways Corp. Project, AMT, 5.00%, 11/15/26

    2,000       2,142,880  

Jacksonville Florida Port Authority, Refunding RB, AMT:

   

4.50%, 11/01/30

    2,895       3,031,499  

4.50%, 11/01/31

    3,200       3,349,568  

4.50%, 11/01/32

    2,300       2,403,799  

Miami Beach Health Facilities Authority, Refunding RB, Mont Sinai Medical Center, 5.00%, 11/15/30

    1,000       1,083,930  

Reedy Creek Improvement District, GO, Series A, 5.25%, 06/01/30

    3,825       4,356,751  

Village Community Development District No. 10, Special Assessment Bonds, Sumter County:

   

4.50%, 05/01/23

    2,000       2,123,000  

5.00%, 05/01/32

    5,475       5,988,226  

Village Community Development District No. 5, Refunding, Special Assessment Bonds, Sumter County:

   

Phase I, 3.50%, 05/01/28

    1,955       1,970,269  

Phase I, 3.50%, 05/01/28

    3,685       3,713,780  

Phase II, 4.00%, 05/01/33

    1,135       1,153,637  

Phase II, 4.00%, 05/01/34

    2,355       2,394,705  
 

 

 

24    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Schedule of Investments  (continued)

July 31, 2018

  

BlackRock Municipal 2030 Target Term Trust (BTT)

(Percentages shown are based on Net Assets)

 

Security   Par
(000)
    Value  
Florida (continued)  

Village Community Development District No. 6, Refunding, Special Assessment Bonds, Sumter County,
4.00%, 05/01/29

  $ 5,895     $ 6,047,268  
   

 

 

 
    150,944,511  
Illinois — 13.2%  

Chicago Board of Education, GO, Refunding Dedicated Revenues:

   

Series C, 5.00%, 12/01/30

    7,025       7,377,233  

Series F, 5.00%, 12/01/22

    4,760       4,982,006  

Chicago Midway International Airport, Refunding ARB, 2nd Lien, Series A, AMT, 5.00%, 01/01/33

    5,000       5,436,200  

Chicago Transit Authority, Refunding RB:

   

Section 5307, Urbanized Area Formula Funds, 5.00%, 06/01/26

    2,000       2,266,780  

Section 5337, State of Good Repair Formula Funds, 5.00%, 06/01/26

    1,000       1,137,120  

City of Chicago Illinois, GO, Project, Series A, 5.00%, 01/01/33

    10,000       10,258,000  

City of Chicago Illinois, RB, Wastewater Transmission, 2nd Lien:

   

4.00%, 01/01/31

    10,375       10,447,210  

4.00%, 01/01/32

    10,790       10,841,037  

4.00%, 01/01/33

    11,220       11,255,231  

4.00%, 01/01/35

    9,135       9,149,159  

City of Chicago Illinois, Refunding ARB, O’Hare International Airport Passenger Facility Charge, Series B, AMT, 4.00%, 01/01/27

    5,000       5,172,500  

City of Chicago Illinois Motor Fuel Tax Revenue, Refunding RB (AGM), 5.00%, 01/01/30

    730       784,677  

City of Chicago O’Hare International Airport, Refunding GARB, Senior Lien, Series B, 5.00%, 01/01/33

    6,000       6,772,080  

City of St. Charles Illinois, GO, Refunding, Corporate Purpose:

   

4.00%, 12/01/30

    1,620       1,704,127  

4.00%, 12/01/31

    1,715       1,801,196  

Counties of Kane McHenry Cook & De Kalb Unit School District No. 300, GO, Refunding, Series A, 5.00%, 01/01/30

    6,350       7,222,236  

County of Cook Illinois, GO, Refunding, Series C, 4.00%, 11/15/29

    19,750       20,513,930  

Illinois Finance Authority, Refunding RB:

   

DePaul University, Series A, 5.00%, 10/01/30

    1,000       1,141,500  

DePaul University, Series A, 4.00%, 10/01/31

    1,000       1,040,250  

DePaul University, Series A, 4.00%, 10/01/32

    1,000       1,036,640  

Lutheran Home & Services Obligated Group, 5.00%, 05/15/22

    3,185       3,319,375  

Lutheran Home & Services Obligated Group, 5.50%, 05/15/27

    4,350       4,620,831  

Lutheran Home & Services Obligated Group, 5.50%, 05/15/30

    4,900       5,164,355  

Presence Health Network, Series C, 5.00%, 02/15/30

    12,000       13,893,360  

Rush University Medical Center, Series A, 5.00%, 11/15/31

    8,415       9,402,669  

Rush University Medical Center, Series A, 5.00%, 11/15/32

    2,075       2,310,492  

Rush University Medical Center, Series A, 5.00%, 11/15/33

    2,125       2,359,302  

The Peoples Gas Light & Coke Company Project, 4.00%, 02/01/33

    11,000       11,272,470  

The University of Chicago Medical Centre, Series B, 5.00%, 08/15/30

    3,205       3,653,444  

Illinois State Toll Highway Authority, Refunding RB, Senior, Series A, 4.00%, 12/01/31

    20,000       20,886,800  
Security   Par
(000)
    Value  
Illinois (continued)  

Metropolitan Pier & Exposition Authority, Refunding RB, McCormick Place Expansion Project:

   

5.00%, 12/15/28

  $ 1,200     $ 1,333,560  

5.00%, 12/15/30

    1,385       1,526,408  

Winnebago & Boone Counties School District No. 205 Rockford, GO:

   

4.00%, 02/01/29

    9,080       9,397,437  

4.00%, 02/01/30

    9,835       10,042,125  
   

 

 

 
    219,521,740  
Indiana — 3.2%  

City of Valparaiso Indiana, RB, Exempt Facilities, Pratt Paper LLC Project, AMT, 5.88%, 01/01/24

    1,650       1,832,160  

City of Whiting Indiana, RB, BP Products North America, Inc. Project, AMT, 5.00%, 03/01/46(e)

    8,500       9,414,175  

Indiana Finance Authority, Refunding RB:

   

Community Health Network Project, Series A, 4.00%, 05/01/35

    22,565       23,004,115  

Earlham College Project, 5.00%, 10/01/32

    11,255       11,537,163  

VRDN, Indiana University Health Obligated Group (Wells Fargo Bank NA), 1.35%, 12/01/31(k)

    4,500       4,500,000  

Northern Indiana Commuter Transportation District, RB:

   

5.00%, 07/01/32

    1,000       1,127,170  

5.00%, 07/01/33

    1,400       1,571,794  
   

 

 

 
    52,986,577  
Iowa — 0.9%  

Iowa Finance Authority, Refunding RB, Midwestern Disaster Area, Iowa Fertilizer Co. Project:

   

5.50%, 12/01/22

    60       60,492  

5.25%, 12/01/25

    14,345       15,318,021  
   

 

 

 
    15,378,513  
Kansas — 0.1%  

Wyandotte County-Kansas City Unified Government Utility System Revenue, RB, Series A, 5.00%, 09/01/33

    1,370       1,538,935  
   

 

 

 
Kentucky — 0.6%  

Countyof Louisville/Jefferson Metropolitan Government, Refunding RB, Norton Healthcare, Inc., Series A, 5.00%, 10/01/32

    7,300       8,237,174  

Kentucky Public Transportation Infrastructure Authority, RB, CAB, 1st Tier-DownTown Crossing Project:

   

Series B, 0.00%, 07/01/30(b)

    1,230       721,666  

Convertible Series C, 6.40%, 07/01/33(f)

    1,500       1,419,900  
   

 

 

 
    10,378,740  
Louisiana — 3.0%  

City of Ruston Louisiana, RB (AGM):

   

5.00%, 06/01/29

    1,060       1,202,178  

5.00%, 06/01/30

    1,000       1,131,900  

5.00%, 06/01/31

    1,020       1,151,519  

5.00%, 06/01/32

    1,225       1,378,419  

Louisiana Public Facilities Authority, Refunding RB:

   

5.00%, 05/15/29

    1,235       1,393,426  

5.00%, 05/15/30

    990       1,114,087  

3.00%, 05/15/31

    2,225       2,119,891  

5.00%, 05/15/32

    1,485       1,658,106  

5.00%, 05/15/33

    2,175       2,420,644  

Entergy Louisiana, Series B, 3.50%, 06/01/30

    5,990       6,030,013  

Louisiana Stadium & Exposition District, Refunding RB, Senior, Series A, 5.00%, 07/01/30

    3,000       3,352,080  

Port New Orleans Board of Commissioners, Refunding RB, Series B, AMT:

   

5.00%, 04/01/31

    300       323,211  

5.00%, 04/01/32

    1,000       1,073,330  

5.00%, 04/01/33

    1,575       1,684,872  
 

 

 

SCHEDULES OF INVESTMENTS      25  


Schedule of Investments  (continued)

July 31, 2018

  

BlackRock Municipal 2030 Target Term Trust (BTT)

(Percentages shown are based on Net Assets)

 

Security   Par
(000)
    Value  
Louisiana (continued)  

State of Louisiana, GO, Series A, 4.00%, 05/15/30

  $ 6,540     $ 6,853,135  

Terrebonne Levee & Conservation District, RB, Sales Tax, 5.00%, 07/01/29

    1,925       2,142,429  

Tobacco Settlement Financing Corp., Refunding RB, Asset-Backed, Series A:

   

5.25%, 05/15/31

    3,425       3,656,804  

5.25%, 05/15/32

    4,375       4,739,306  

5.25%, 05/15/33

    4,750       5,108,435  

5.25%, 05/15/35

    1,500       1,615,560  
   

 

 

 
    50,149,345  
Maryland — 1.8%  

City of Baltimore Maryland, Refunding RB, Convention Center Hotel, 5.00%, 09/01/31

    1,250       1,421,837  

County of Anne Arundel Maryland Consolidated, Special Taxing District, Special Tax Bonds, Villages At Two Rivers Project:

   

4.20%, 07/01/24

    700       698,530  

4.90%, 07/01/30

    1,315       1,327,716  

County of Howard Maryland Housing Commission, RB, Woodfield Oxford Square Apartments, 5.00%, 12/01/33

    1,765       2,007,246  

Maryland EDC, RB, Purple Line Light Rail Project, Series D, AMT, 5.00%, 03/31/30

    1,325       1,491,009  

Maryland EDC, Refunding RB, CNX Marine Terminals, Inc., 5.75%, 09/01/25

    3,225       3,359,386  

Maryland Health & Higher Educational Facilities Authority, Refunding RB:

   

Charlestown Community, Series A, 5.00%, 01/01/31

    2,865       3,212,324  

Charlestown Community, Series A, 5.00%, 01/01/32

    3,010       3,365,993  

Charlestown Community, Series A, 5.00%, 01/01/33

    3,165       3,527,646  

LifeBridge Health Issue, 5.00%, 07/01/31

    1,000       1,146,960  

LifeBridge Health Issue, 5.00%, 07/01/32

    500       571,390  

Lifebridge Health Issue, 5.00%, 07/01/33

    385       434,538  

LifeBridge Health Issue, 5.00%, 07/01/33

    1,000       1,138,610  

LifeBridge Health Issue, 5.00%, 07/01/34

    775       879,850  

Meritus Medical Center, 5.00%, 07/01/29

    2,200       2,439,492  

Meritus Medical Center, 5.00%, 07/01/31

    1,400       1,542,380  

Meritus Medical Center, 5.00%, 07/01/33

    1,200       1,314,288  
   

 

 

 
    29,879,195  
Massachusetts — 1.4%  

Massachusetts Development Finance Agency, RB, Emmanuel College Issue, Series A, 5.00%, 01/01/33

    1,070       1,188,545  

Massachusetts Development Finance Agency, Refunding RB, Series A:

   

Emmanuel College Issue, 5.00%, 10/01/31

    3,635       4,043,683  

Emmanuel College Issue, 5.00%, 10/01/33

    1,285       1,419,822  

5.00%, 01/01/32

    2,020       2,274,985  

5.00%, 01/01/33

    1,500       1,682,925  

5.00%, 01/01/34

    2,085       2,333,928  

5.00%, 01/01/35

    2,000       2,230,280  

Massachusetts Educational Financing Authority, Refunding RB, Series K, AMT, 5.25%, 07/01/29

    6,820       7,268,211  
   

 

 

 
    22,442,379  
Michigan — 1.5%  

Michigan Finance Authority, Refunding RB:

   

MidMichigan Health, 5.00%, 06/01/33

    2,750       3,049,860  

Oakwood Obligation Group, 5.00%, 08/15/30

    2,105       2,328,383  
Security   Par
(000)
    Value  
Michigan (continued)  

Michigan State Hospital Finance Authority, Refunding RB, Trinity Health Credit Group, Series C, 4.00%, 12/01/32

  $ 8,195     $ 8,444,210  

Michigan State Housing Development Authority, RB, M/F Housing, Series A, 3.55%, 10/01/33

    1,825       1,820,693  

Saginaw Valley State University, Refunding RB, Series A:

   

5.00%, 07/01/31

    2,070       2,336,347  

5.00%, 07/01/32

    1,430       1,608,664  

State of Michigan, Refunding RB, GAN, 5.00%, 03/15/27

    3,750       4,425,000  
   

 

 

 
    24,013,157  
Minnesota — 0.3%  

Sartell-St Stephen Independent School District No. 748, GO, Series B(b):

   

0.00%, 02/01/30

    3,915       2,642,469  

0.00%, 02/01/31

    2,190       1,414,893  

0.00%, 02/01/32

    1,450       898,304  
   

 

 

 
    4,955,666  
Mississippi — 1.3%  

Mississippi Development Bank, Refunding RB, Municipal Energy Agency of Mississippi, Series A (AGM):

   

5.00%, 03/01/30

    2,280       2,573,892  

5.00%, 03/01/31

    1,595       1,794,853  

5.00%, 03/01/32

    2,000       2,243,440  

5.00%, 03/01/33

    1,275       1,425,629  

State of Mississippi, RB, Series E, 5.00%, 10/15/33

    12,225       13,638,332  
   

 

 

 
    21,676,146  
Missouri — 0.7%  

City of St. Louis Missouri IDA, Refunding RB, Ballpark Village Development Project, Series A, 3.88%, 11/15/29

    1,105       1,123,387  

Missouri State Health & Educational Facilities Authority, Refunding RB:

   

CoxHealth, Series A, 4.00%, 11/15/33

    2,010       2,074,702  

St. Louis College of Pharmacy, 5.00%, 05/01/30

    3,000       3,302,580  

The Children’s Mercy Hospital, 5.00%, 05/15/31

    1,175       1,324,002  

The Children’s Mercy Hospital, 4.00%, 05/15/32

    1,680       1,747,217  

The Children’s Mercy Hospital, 4.00%, 05/15/33

    2,000       2,073,080  
   

 

 

 
    11,644,968  
Nebraska — 1.1%  

Central Plains Nebraska Energy Project, RB:

   

Energy Project No. 3, 5.00%, 09/01/27

    5,000       5,467,700  

Gas Project No. 3, 5.00%, 09/01/32

    4,500       4,920,930  

Public Power Generation Agency, Refunding RB, Whelan Energy Center Unit 2, Series A, 5.00%, 01/01/32

    7,630       8,623,121  
   

 

 

 
    19,011,751  
Nevada — 0.0%  

Nevada Department of Business & Industry, RB, Series A, 5.00%, 07/15/27(c)

    335       353,281  
   

 

 

 
New Hampshire — 0.3%  

New Hampshire State Turnpike System, RB, Series C, 4.00%, 08/01/33

    4,350       4,502,728  
   

 

 

 
New Jersey — 17.8%  

Casino Reinvestment Development Authority, Refunding RB:

   

5.00%, 11/01/21

    2,465       2,653,572  

5.00%, 11/01/22

    1,890       2,053,750  

County of Gloucester New Jersey Pollution Control Financing Authority, Refunding RB, Keystone Urban Renewal Project, Series A, AMT, 5.00%, 12/01/24

    1,500       1,616,985  
 

 

 

26    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Schedule of Investments  (continued)

July 31, 2018

  

BlackRock Municipal 2030 Target Term Trust (BTT)

(Percentages shown are based on Net Assets)

 

Security   Par
(000)
    Value  
New Jersey (continued)  

New Jersey EDA, RB:

   

Continental Airlines, Inc. Project, AMT, 5.25%, 09/15/29

  $ 12,230     $ 13,292,298  

Continental Airlines, Inc. Project, Series A, AMT, 5.63%, 11/15/30

    1,740       1,968,027  

Continental Airlines, Inc. Project, Series B, AMT, 5.63%, 11/15/30

    1,315       1,487,331  

Foundation Academy Charter School Project, Series A, 4.00%, 07/01/29

    350       353,000  

Private Activity Bond, The Goethals Bridge Replacement Project, AMT, 5.00%, 01/01/28

    4,705       5,164,490  

Series DDD, 5.00%, 06/15/35

    2,000       2,182,340  

State Government Buildings Project, Series A,
5.00%, 06/15/32

    4,500       4,981,995  

State Government Buildings Project, Series C,
5.00%, 06/15/32

    3,600       3,985,596  

New Jersey EDA, Refunding RB:

   

Cigarette Tax, 5.00%, 06/15/23

    13,000       14,041,430  

Cigarette Tax, 5.00%, 06/15/26

    10,610       11,311,427  

Cigarette Tax, 4.25%, 06/15/27

    16,500       16,979,820  

Continental Airlines, Inc. Project, AMT, 5.75%, 09/15/27

    6,200       6,840,646  

Provident Group — Montclaire Properties LLC (AGM), 5.00%, 06/01/30

    1,500       1,706,205  

Provident Group — Montclaire Properties LLC (AGM), 5.00%, 06/01/31

    1,750       1,980,510  

Provident Group — Montclaire Properties LLC (AGM), 4.00%, 06/01/32

    2,125       2,191,980  

Provident Group-Monteclair Properites LLC (AGM), 5.00%, 06/01/28

    1,000       1,147,420  

Series BBB, 5.50%, 06/15/29

    10,000       11,471,000  

Sub-Series A, 4.00%, 07/01/32

    9,855       9,884,072  

New Jersey EDA, Refunding, Special Assessment Bonds, Kapkowski Road Landfill Project, 5.75%, 04/01/31

    5,000       5,549,450  

New Jersey Health Care Facilities Financing Authority, Refunding RB:

   

Princeton HealthCare System, 5.00%, 07/01/29

    2,900       3,376,847  

Princeton HealthCare System, 5.00%, 07/01/30

    2,400       2,785,344  

RWJ Barnabas Health Obligated Group, Series A,
5.00%, 07/01/30

    11,245       12,921,067  

St. Joseph Health System, 5.00%, 07/01/28

    1,500       1,656,495  

St. Joseph Health System, 5.00%, 07/01/29

    1,250       1,374,963  

St. Joseph Health System Obligated Group Issue,
5.00%, 07/01/30

    1,100       1,205,996  

New Jersey Higher Education Student Assistance Authority, RB, Senior Student Loan, AMT:

   

Series 1A, 5.00%, 12/01/23

    3,475       3,863,748  

Series 1A, 5.00%, 12/01/24

    6,000       6,734,760  

Series 1A, 5.00%, 12/01/25

    5,500       6,211,095  

Series 1A, 5.00%, 12/01/26

    2,250       2,522,047  

Series A, 4.00%, 12/01/32

    2,500       2,544,700  

Series A, 4.00%, 12/01/33

    2,000       2,034,120  

Series A, 4.00%, 12/01/34

    1,000       1,017,060  

Series A, 4.00%, 12/01/35

    1,000       1,014,600  

New Jersey Housing & Mortgage Finance Agency, Refunding RB, S/F Housing, Series BB, AMT, 3.80%, 10/01/32

    13,230       13,172,053  

New Jersey Transportation Trust Fund Authority, RB:

   

Federal Highway Reimbursement Revenue Notes, Series A, 5.00%, 06/15/31

    2,250       2,255,130  

Federal Highway Reimbursement Revenue Notes, Series A-2, 5.00%, 06/15/30

    5,000       5,011,400  

Transportation Program, Series AA, 5.25%, 06/15/27

    4,225       4,722,029  
Security   Par
(000)
    Value  
New Jersey (continued)  

Transportation Program, Series AA, 5.25%, 06/15/28

  $ 4,500     $ 5,008,905  

Transportation System, CAB, Series A,
0.00%, 12/15/28(b)

    31,000       20,454,730  

Transportation System, Series AA, 4.00%, 06/15/30

    13,315       13,514,991  

Transportation System, Series C, 5.25%, 06/15/32

    10,000       10,937,200  

Transportation System, Series D, 5.00%, 06/15/32

    5,000       5,389,150  

New Jersey Transportation Trust Fund Authority, Refunding RB, Federal Highway Reimbursement Revenue Notes,
5.00%, 06/15/30

    6,600       7,328,310  

Newark Housing Authority, Refunding RB, Newark Redevelopment Project (NPFGC), 5.25%, 01/01/27

    5,000       5,750,700  

South Jersey Transportation Authority, Refunding RB, Transportation System, Series A:

   

5.00%, 11/01/33

    500       547,310  

5.00%, 11/01/34

    500       545,250  

Tobacco Settlement Financing Corp., Refunding RB, Series A:

   

5.00%, 06/01/30

    16,740       19,157,256  

5.00%, 06/01/32

    5,620       6,380,892  

Township of Irvington New Jersey, GO, Refunding, Series A (AGM):

   

5.00%, 07/15/30

    2,000       2,230,400  

5.00%, 07/15/31

    1,450       1,613,690  
   

 

 

 
    296,125,582  
New Mexico — 1.0%  

New Mexico Educational Assistance Foundation, RB, Education Loan, AMT:

   

Series A-1, 3.75%, 09/01/31

    6,250       6,335,625  

Series A-2, 3.80%, 11/01/32

    5,850       5,922,949  

Series A-2, 3.80%, 09/01/33

    5,000       5,050,400  
   

 

 

 
    17,308,974  
New York — 3.1%  

Build NYC Resource Corp., Refunding RB, Pratt Paper, Inc. Project, AMT, 4.50%, 01/01/25(c)

    900       982,602  

County of Nassau New York, GOL, Series A (AGM):

   

5.00%, 04/01/34

    4,165       4,809,992  

5.00%, 04/01/35

    4,385       5,048,275  

New York City Housing Development Corp., VRDN, RB, M/F Housing, Series C-4, 1.33%, 05/01/57(k)

    14,000       14,000,000  

New York City Transitional Finance Authority Future Tax Secured Revenue, RB, Series A-2, 5.00%, 08/01/33

    9,780       11,345,778  

New York Transportation Development Corp., RB, LaGuardia Airport Terminal B Redevelopment Project, Series A, AMT:

   

4.00%, 07/01/32

    5,500       5,613,190  

4.00%, 07/01/33

    6,000       6,107,460  

New York Transportation Development Corp., Refunding ARB, American Airlines, Inc., AMT, 5.00%, 08/01/31

    3,465       3,626,746  
   

 

 

 
    51,534,043  
North Carolina — 0.4%  

North Carolina Medical Care Commission, Refunding RB, Mission Health Combined Group:

   

4.00%, 10/01/31

    1,250       1,284,162  

5.00%, 10/01/32

    3,700       3,832,682  

4.00%, 10/01/33

    1,500       1,539,915  
   

 

 

 
    6,656,759  
Ohio — 1.1%  

County of Butler Ohio, Refunding RB, UC Health:

   

5.00%, 11/15/30

    1,225       1,408,309  

5.00%, 11/15/31

    2,500       2,861,075  

5.00%, 11/15/32

    2,200       2,506,372  
 

 

 

SCHEDULES OF INVESTMENTS      27  


Schedule of Investments  (continued)

July 31, 2018

  

BlackRock Municipal 2030 Target Term Trust (BTT)

(Percentages shown are based on Net Assets)

 

Security   Par
(000)
    Value  
Ohio (continued)  

County of Franklin Ohio, RB, Health Care Facilities Improvement, OPRS Communities, Series A:

   

5.25%, 07/01/28

  $ 500     $ 508,420  

5.63%, 07/01/32

    1,000       1,019,550  

County of Hamilton Ohio Sales Tax Revenue, Refunding RB, Series A, 5.00%, 12/01/30

    4,500       5,209,155  

Ohio Air Quality Development Authority, Refunding RB, AMT, 3.95%, 11/01/32(e)(g)(h)

    1,500       832,500  

State of Ohio, RB, Portsmouth Bypass Project, AMT (AGM):

   

5.00%, 12/31/29

    1,625       1,807,162  

5.00%, 12/31/30

    2,400       2,661,168  
   

 

 

 
    18,813,711  
Oklahoma — 0.8%  

Norman Regional Hospital Authority, Refunding RB:

   

5.00%, 09/01/27

    2,100       2,388,036  

5.00%, 09/01/28

    2,000       2,265,160  

5.00%, 09/01/29

    2,150       2,425,221  

5.00%, 09/01/30

    5,130       5,767,249  
   

 

 

 
    12,845,666  
Oregon — 0.5%  

Oregon Health & Science University, Refunding RB, Series B, 5.00%, 07/01/35

    7,390       8,412,998  
   

 

 

 
Pennsylvania — 22.0%  

Allentown Neighborhood Improvement Zone Development Authority, RB, City Center Project(c):

   

5.00%, 05/01/23

    640       687,706  

5.00%, 05/01/28

    835       933,254  

Allentown Neighborhood Improvement Zone Development Authority, Refunding RB, Series A:

   

5.00%, 05/01/27

    6,750       7,153,447  

5.00%, 05/01/28

    5,000       5,280,800  

5.00%, 05/01/29

    3,745       3,944,534  

5.00%, 05/01/30

    5,300       5,567,120  

Chester County Health & Education Facilities Authority, Refunding RB, Series A:

   

Main Line Health System, 5.00%, 10/01/31

    1,350       1,564,880  

Main Line Health System, 5.00%, 10/01/32

    1,450       1,675,765  

Main Line Health System, 5.00%, 10/01/33

    2,300       2,648,174  

Simpson Senior Services Project, 5.00%, 12/01/30

    2,180       2,255,537  

City of Philadelphia Pennsylvania, GO, Refunding:

   

(AGM), 5.00%, 08/01/30

    9,235       10,626,992  

Series A, 5.00%, 08/01/30

    4,500       5,121,360  

Commonwealth Financing Authority, RB, Tobacco Master Settlement Payment:

   

5.00%, 06/01/30

    3,500       3,980,165  

5.00%, 06/01/32

    6,000       6,764,160  

Commonwealth of Pennsylvania, GO, Refunding, , 1st Series, 4.00%, 01/01/30

    7,000       7,331,030  

County of Beaver Pennsylvania IDA, Refunding RB, First Energy Nuclear Energy Project(e):

   

Series A, 4.00%, 01/01/35

    9,765       5,419,575  

Series B, 3.50%, 12/01/35(g)(h)

    890       493,950  

County of Berks IDA, Refunding RB, Tower Health Project:

   

5.00%, 11/01/29

    2,000       2,272,380  

5.00%, 11/01/30

    2,000       2,263,860  

5.00%, 11/01/34

    2,500       2,793,950  

5.00%, 11/01/35

    3,325       3,704,815  

County of Bucks Pennsylvania IDA, VRDN, Refunding RB, Grand View Hospital, Series A, 1.45%, 07/01/34(k)

    10,385       10,385,000  
Security   Par
(000)
    Value  
Pennsylvania (continued)  

County of Cumberland Pennsylvania Municipal Authority, Refunding RB:

   

Asbury Pennsylvania Obligated Group, 5.00%, 01/01/22

  $ 615     $ 648,677  

Asbury Pennsylvania Obligated Group, 5.25%, 01/01/27

    1,275       1,327,823  

Asbury Pennsylvania Obligated Group, 5.25%, 01/01/32

    3,350       3,451,002  

Diakon Lutheran Social Ministries Project, 5.00%, 01/01/29

    1,300       1,430,715  

Diakon Lutheran Social Ministries Project, 5.00%, 01/01/30

    2,675       2,934,234  

Diakon Lutheran Social Ministries Project, 5.00%, 01/01/32

    1,510       1,662,948  

County of Dauphin General Authority, Refunding RB, Pinnacle Health System Project, Series A, 4.00%, 06/01/31

    2,275       2,355,399  

County of Delaware Authority, Refunding RB, Cabrini University:

   

5.00%, 07/01/26

    1,180       1,302,248  

5.00%, 07/01/28

    800       882,168  

5.00%, 07/01/29

    1,365       1,497,569  

5.00%, 07/01/30

    1,435       1,568,670  

County of Delaware Pennsylvania Authority, Refunding RB, Villanova University:

   

4.00%, 12/01/30

    1,000       1,058,810  

4.00%, 12/01/31

    1,000       1,056,560  

County of Lancaster Hospital Authority, Refunding RB, University of Pennsylvania Health System Obligation, Series A, 3.00%, 08/15/30

    2,535       2,462,398  

County of Montgomery Higher Education & Health Authority, Refunding RB, Thomas Jefferson University:

   

5.00%, 09/01/31

    1,750       2,017,908  

5.00%, 09/01/32

    1,315       1,507,779  

County of Montgomery Pennsylvania IDA, Refunding RB:

   

Acts Retirement-Life Communities, Inc. Obligated Group, 5.00%, 11/15/26

    2,500       2,696,175  

Acts Retirement-Life Communities, Inc. Obligated Group, 5.00%, 11/15/33

    15,015       16,667,701  

Albert Einstein Healthcare Network, Series A, 5.25%, 01/15/29

    3,250       3,542,597  

Albert Einstein Healthcare Network, Series A, 5.25%, 01/15/30

    6,185       6,723,342  

Whitemarsh Continuing Care Retirement Community Project, 5.00%, 01/01/30

    2,000       2,026,180  

County of Northampton Pennsylvania General Purpose Authority, RB, St. Luke’s Hospital of Bethlehem, Series A, 5.00%, 08/15/33

    12,660       13,590,130  

County of Northampton Pennsylvania General Purpose Authority, Refunding RB, Lafayette College, 5.00%, 11/01/34

    4,000       4,624,200  

County of Westmoreland Municipal Authority, Refunding RB (BAM):

   

5.00%, 08/15/27

    1,500       1,721,790  

5.00%, 08/15/30

    4,000       4,625,600  

5.00%, 08/15/31

    17,010       19,597,731  

5.00%, 08/15/32

    17,945       20,598,707  

Geisinger Authority, Refunding RB, Geisinger Health System, Series A-2:

   

5.00%, 02/15/32

    4,000       4,582,280  

5.00%, 02/15/34

    1,750       1,992,060  
 

 

 

28    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Schedule of Investments  (continued)

July 31, 2018

  

BlackRock Municipal 2030 Target Term Trust (BTT)

(Percentages shown are based on Net Assets)

 

Security   Par
(000)
    Value  
Pennsylvania (continued)  

Pennsylvania Economic Development Financing Authority, RB:

   

PA Bridges Finco LP, AMT, 5.00%, 12/31/34

  $ 16,500     $ 18,113,205  

Pennsylvania Bridge Finco LP, 5.00%, 12/31/29

    5,000       5,565,350  

Pennsylvania Rapid Bridge Replacement Project, AMT, 5.00%, 12/31/30

    13,100       14,533,271  

Pennsylvania Economic Development Financing Authority, Refunding RB, University of Pittsburgh Medical Center:

   

5.00%, 03/15/30

    5,250       6,017,812  

5.00%, 03/15/31

    4,500       5,140,665  

Pennsylvania Higher Educational Facilities Authority, RB:

   

Series AT-1, 5.00%, 06/15/30

    7,910       9,005,377  

Shippensburg University Student Services, 5.00%, 10/01/30

    5,250       5,510,872  

Pennsylvania Higher Educational Facilities Authority, Refunding RB:

   

Drexel University, 5.00%, 05/01/30

    425       481,155  

Drexel University, 5.00%, 05/01/31

    1,000       1,128,450  

Drexel University, 5.00%, 05/01/32

    1,750       1,968,383  

Drexel University, 5.00%, 05/01/33

    3,320       3,722,185  

Drexel University, 5.00%, 05/01/35

    1,000       1,115,330  

La Salle University, 4.00%, 05/01/32

    3,000       2,956,140  

Pennsylvania Housing Finance Agency, Refunding RB, Series 125-A, AMT, 3.40%, 10/01/32

    9,000       8,801,370  

Pennsylvania Turnpike Commission, RB, Sub-Series B-1:

   

5.00%, 06/01/31

    3,000       3,368,250  

5.00%, 06/01/32

    4,075       4,561,962  

5.00%, 06/01/33

    4,000       4,461,880  

Pennsylvania Turnpike Commission, Refunding RB:

   

Motor License Fund, Enhanced Turnpike, 5.00%, 12/01/30

    5,000       5,676,850  

Subordinate, Series B-2 (AGM), 5.00%, 06/01/34

    5,000       5,658,600  

Turnpike Subordinate Revenue, Second Series, 5.00%, 12/01/32

    1,000       1,121,020  

Turnpike Subordinate Revenue, Second Series, 5.00%, 12/01/33

    1,815       2,026,974  

Turnpike Subordinate Revenue, Second Series, 5.00%, 12/01/34

    1,500       1,668,885  

Turnpike Subordinate Revenue, Second Series, 5.00%, 12/01/35

    2,005       2,224,006  

Philadelphia Gas Works Co., Refunding RB, General Ordinance, Series 14-T, 5.00%, 10/01/30

    425       483,816  

State Public School Building Authority, RB, School District of Philadelphia Project:

   

5.00%, 04/01/27

    4,130       4,426,286  

5.00%, 04/01/28

    8,000       8,548,080  

5.00%, 04/01/29

    6,000       6,391,740  

5.00%, 04/01/30

    5,500       5,841,440  

Township of East Hempfield Pennsylvania IDA, RB, Student Services, Inc. Student Housing Project:

   

5.00%, 07/01/30

    1,280       1,365,350  

5.00%, 07/01/30

    825       890,918  

Wayne County Hospital & Health Facilities Authority, RB, Wayne Memorial Hospital Project, Series A:

   

5.00%, 07/01/31

    355       407,767  

4.00%, 07/01/33

    440       453,988  
   

 

 

 
    366,659,232  
Rhode Island — 1.6%  

Rhode Island Health & Educational Building Corp., RB, Hospital Financing, LifeSpan Obligation, 5.00%, 05/15/30

    1,500       1,659,645  
Security   Par
(000)
    Value  
Rhode Island (continued)  

Rhode Island Housing & Mortgage Finance Corp., RB, S/F Housing, Homeownership Opportunity Bonds, Series 68-B, 3.00%, 10/01/31

  $ 13,500     $ 12,986,055  

Tobacco Settlement Financing Corp., Refunding RB, Series A:

   

5.00%, 06/01/28

    2,750       3,063,940  

5.00%, 06/01/29

    4,500       4,978,710  

5.00%, 06/01/30

    4,215       4,636,289  
   

 

 

 
    27,324,639  
South Carolina — 0.1%  

South Carolina Jobs EDA, Refunding RB, The Lutheran Homes of South Carolina, Inc., 5.00%, 05/01/28

    2,000       2,090,860  
   

 

 

 
Tennessee — 0.5%  

Chattanooga-Hamilton County Hospital Authority, Refunding RB, Erlanger Health System, Series A, 5.00%, 10/01/31

    6,210       6,750,891  

Counties of Nashville & Davidson Tennessee Metropolitan Government Health & Educational Facilities Board, RB, Vanderbilt University Medical Center, Series A, 5.00%, 07/01/31

    1,300       1,469,208  

County of Memphis-Shelby Industrial Development Board, Refunding, Tax Allocation Bonds, Graceland Project, Series A, 4.75%, 07/01/27

    605       639,189  
   

 

 

 
    8,859,288  
Texas — 17.6%  

Central Texas Regional Mobility Authority, RB, Senior Lien, Series A:

   

5.00%, 01/01/30

    1,600       1,779,424  

5.00%, 01/01/31

    1,175       1,302,911  

5.00%, 01/01/33

    1,500       1,653,525  

Central Texas Turnpike System, Refunding RB, Series C:

   

5.00%, 08/15/32

    12,500       13,654,250  

5.00%, 08/15/33

    14,000       15,252,720  

City of Houston Texas, Refunding RB, Series B-2, AMT, 5.00%, 07/15/20

    5,970       6,278,350  

City of Houston Texas Airport System, Refunding ARB, United Airlines, Inc. Terminal E Project, AMT, 5.00%, 07/01/29

    2,665       2,881,238  

City of Houston Texas Airport System Revenue, Refunding RB, Series D, 5.00%, 07/01/33(a)

    7,000       8,160,040  

City of Houston Texas Combined Utility System Revenue, Refunding RB, First Lien, Series B:

   

5.25%, 11/15/33

    10,000       11,784,000  

5.00%, 11/15/34

    19,815       22,765,255  

Clifton Higher Education Finance Corp., RB, Idea Public Schools, 6.00%, 08/15/33

    1,650       1,854,320  

Clifton Higher Education Finance Corp., Refunding RB, Series A:

   

Idea Public Schools (PSF- GTD), 4.00%, 08/15/31

    1,250       1,329,475  

Idea Public Schools (PSF- GTD), 4.00%, 08/15/33

    1,200       1,263,192  

Uplift Education, 3.10%, 12/01/22

    775       776,852  

Uplift Education, 3.95%, 12/01/32

    1,800       1,804,194  

County of Harris Texas, Refunding RB, Toll Road, Senior Lien, Series C, 4.00%, 08/15/33

    12,325       12,871,244  

County of Harris Texas Cultural Education Facilities Finance Corp., RB, 1st Mortgage, Brazos Presbyterian Homes, Inc. Project, Series B:

   

5.75%, 01/01/28

    500       549,270  

6.38%, 01/01/33

    460       515,435  
 

 

 

SCHEDULES OF INVESTMENTS      29  


Schedule of Investments  (continued)

July 31, 2018

  

BlackRock Municipal 2030 Target Term Trust (BTT)

(Percentages shown are based on Net Assets)

 

Security   Par
(000)
    Value  
Texas (continued)  

County of Harris Texas Cultural Education Facilities Finance Corp., Refunding RB, Series A:

   

Brazos Presbyterian Homes, Inc. Project, 5.00%, 01/01/33

  $ 1,090     $ 1,135,453  

YMCA of the Greater Houston Area, 5.00%, 06/01/28

    1,150       1,227,050  

YMCA of the Greater Houston Area, 5.00%, 06/01/33

    3,000       3,170,910  

County of Matagorda Texas Navigation District No. 1, Refunding RB:

   

Series A (AMBAC), 4.40%, 05/01/30

    31,120       33,026,100  

Series B (AMBAC), AMT, 4.55%, 05/01/30

    10,000       10,704,800  

Series B-2, 4.00%, 06/01/30

    12,995       13,351,193  

County of Midland Texas Fresh Water Supply District No. 1, RB, CAB, City of Midland Project, Series A(b):

   

0.00%, 09/15/31

    6,235       3,916,016  

0.00%, 09/15/32

    15,135       9,022,276  

County of Tarrant Texas Cultural Education Facilities Finance Corp., RB, Baylor Health Care System Project, Series A:

   

4.00%, 11/15/31

    5,500       5,701,025  

4.00%, 11/15/32

    15,420       15,941,967  

County of Tarrant Texas Cultural Education Facilities Finance Corp., Refunding RB, Trinity Terrace Project, Series A-1, 5.00%, 10/01/29

    1,000       1,084,200  

Leander ISD, GO, CAB, Refunding, Series D (PSF-GTD)(b):

   

0.00%, 08/15/31

    1,200       735,744  

0.00%, 08/15/32

    2,000       1,164,720  

0.00%, 08/15/33

    4,485       2,481,864  

New Hope Cultural Education Facilities Corp., RB, Series A:

   

Station 1 LLC Texas A&M University Project, 5.00%, 04/01/29

    2,290       2,478,444  

Stephenville LLC Tarleton State University Project, 5.38%, 04/01/28

    1,150       1,254,915  

Stephenville LLC Tarleton State University Project, 5.00%, 04/01/29

    725       785,828  

New Hope Cultural Education Facilities Corp., Refunding RB, 1st Mortgage, Morningside Ministries Project, 6.25%, 01/01/33

    1,600       1,767,424  

New Hope Cultural Education Facilities Finance Corp., RB, Jubilee Academic Center Project, Series A(c):

   

3.63%, 08/15/22

    295       292,973  

4.25%, 08/15/27

    450       450,756  

North Texas Tollway Authority, Refunding RB, 1st Tier, Series A, 5.00%, 01/01/35

    5,750       6,526,192  

Red River Health Facilities Development Corp., RB, Wichita Falls Retirement Foundation Project:

   

4.70%, 01/01/22

    520       537,207  

5.50%, 01/01/32

    1,000       1,045,760  

Socorro Independent School District, GO, Refunding Series B, 4.00%, 08/15/34

    3,000       3,208,890  

Texas Municipal Gas Acquisition & Supply Corp. III, RB, Natural Gas Utility Improvements:

   

5.00%, 12/15/30

    13,000       14,056,900  

5.00%, 12/15/31

    25,000       26,990,000  

Texas Public Finance Authority, Refunding RB, Midwestern State University:

   

4.00%, 12/01/29

    2,000       2,125,160  

4.00%, 12/01/30

    2,000       2,111,620  

4.00%, 12/01/31

    1,650       1,738,391  
Security   Par
(000)
    Value  
Texas (continued)  

Texas Transportation Commission State Highway Fund, Refunding RB, 1st Tier:

   

5.00%, 10/01/22

  $ 5,000     $ 5,598,400  

Series A, 5.00%, 04/01/22

    5,000       5,538,450  

University of Texas System, Refunding RB, Financing System, Series C, 5.00%, 08/15/20

    7,410       7,897,282  
   

 

 

 
    293,543,605  
Vermont — 0.2%  

Vermont EDA, Refunding, MRB, Wake Robin Corp. Project, 5.40%, 05/01/33

    2,400       2,538,816  
   

 

 

 
Virginia — 0.8%  

County of Fairfax Virginia EDA, RB, Vinson Hall LLC, Series A, 5.00%, 12/01/32

    2,000       2,143,640  

County of Hanover Virginia EDA, Refunding RB, Covenant Woods, Series A:

   

4.50%, 07/01/30

    3,000       3,073,410  

4.50%, 07/01/32

    1,100       1,122,110  

Dulles Town Center Community Development Authority, Refunding, Special Assessment, Dulles Town Center Project, 4.25%, 03/01/26

    500       500,315  

Virginia College Building Authority, RB, Green Bonds, Marymount University Project, Series B, 5.25%, 07/01/30(c)

    2,000       2,177,340  

Virginia Small Business Financing Authority, RB, Senior Lien, Express Lanes LLC, AMT, 5.00%, 07/01/34

    3,940       4,182,862  
   

 

 

 
    13,199,677  
Washington — 3.7%  

Grant & Douglas Counties School District No. 144-101 Quincy, GO, 4.00%, 12/01/34

    7,475       7,875,436  

Greater Wenatchee Regional Events Center Public Facilities District, Refunding RB, Series A:

   

3.50%, 09/01/18

    1,025       1,025,318  

5.00%, 09/01/27

    1,000       1,025,530  

5.25%, 09/01/32

    1,850       1,891,440  

Port of Seattle Washington, Refunding RB, Intermediate Lien, AMT, Series C:

   

5.00%, 05/01/33

    6,695       7,591,393  

5.00%, 05/01/34

    6,000       6,783,840  

Port of Seattle Washington Industrial Development Corp., Refunding RB, Special Facilities, Delta Airline, Inc. Project, AMT, 5.00%, 04/01/30

    5,000       5,427,500  

State of Washington, GO, Various Purpose, Series A, 5.00%, 08/01/33

    11,925       13,875,214  

Washington Biomedical Research Properties 3.2, RB, Series A:

   

5.00%, 01/01/31

    1,000       1,145,510  

5.00%, 01/01/32

    1,140       1,302,017  

Washington Health Care Facilities Authority, Refunding RB, MultiCare Health System, Series B, 5.00%, 08/15/35

    9,485       10,895,325  

Washington State Housing Finance Commission, Refunding RB, Emerald Heights Project:

   

5.00%, 07/01/28

    1,000       1,090,240  

5.00%, 07/01/33

    1,100       1,185,712  
   

 

 

 
    61,114,475  
West Virginia — 0.2%  

West Virginia Hospital Finance Authority, RB, West Virginia University Health System, Series A:

   

5.00%, 06/01/31

    1,950       2,213,250  

5.00%, 06/01/33

    1,100       1,239,491  
   

 

 

 
    3,452,741  
 

 

 

30    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Schedule of Investments  (continued)

July 31, 2018

  

BlackRock Municipal 2030 Target Term Trust (BTT)

(Percentages shown are based on Net Assets)

 

Security   Par
(000)
    Value  
Wisconsin — 1.6%  

Public Finance Authority, Refunding RB, AMT:

   

National Gypsum Co., 5.25%, 04/01/30

  $ 6,690     $ 7,136,357  

Waste Management, Inc. Project, 2.63%, 11/01/25

    3,000       2,911,860  

Wisconsin Airport Facilities, Senior Obligated Group, Series B, 5.25%, 07/01/28

    2,250       2,422,642  

Wisconsin Health & Educational Facilities Authority, Refunding RB, Marquette University, 4.00%, 10/01/32

    4,520       4,672,234  

Wisconsin Housing & Economic Development Authority, Refunding RB, S/F Housing, Series D, 3.00%, 09/01/32

    9,000       8,677,980  
   

 

 

 
    25,821,073  
   

 

 

 

Total Municipal Bonds — 131.9%
(Cost — $2,179,192,365)

 

    2,195,339,455  
   

 

 

 

Municipal Bonds Transferred to Tender Option Bond Trusts(i)

 

Colorado — 5.0%  

City & County of Denver Colorado, Refunding ARB, Department of Aviation, Series A, AMT(j):

   

4.25%, 11/15/29

    33,820       35,601,739  

4.25%, 11/15/30

    35,210       37,064,969  

4.25%, 11/15/31

    8,085       8,510,942  

4.25%, 11/15/32

    2,230       2,347,483  
   

 

 

 
    83,525,133  
Florida — 5.8%  

County of Broward Florida, ARB, Series Q-1(j):

   

4.00%, 10/01/29

    17,200       17,787,466  

4.00%, 10/01/30

    18,095       18,713,034  

4.00%, 10/01/31

    18,820       19,462,797  

4.00%, 10/01/32

    19,575       20,243,584  

4.00%, 10/01/33

    20,355       21,050,224  
   

 

 

 
    97,257,105  
Iowa — 2.6%  

Iowa State Board of Regents, RB, University of Iowa Hospitals & Clinics:

   

4.00%, 09/01/28

    3,375       3,521,679  

4.00%, 09/01/29

    6,524       6,808,580  

4.00%, 09/01/30

    6,324       6,599,888  

4.00%, 09/01/31

    8,649       9,025,933  

4.00%, 09/01/32

    7,749       8,086,819  

4.00%, 09/01/33

    9,374       9,782,442  
   

 

 

 
    43,825,341  
Nevada — 1.1%  

Clark County Nevada, 4.00%, 11/01/34

    17,710       18,637,261  
   

 

 

 
Pennsylvania — 2.8%  

Commonwealth of Pennsylvania, GO, 1st Series, 5.00%, 03/01/32(j)

    20,000       22,873,599  

Lehigh County Pennsylvania General Purpose Hospital, 4.00%, 07/01/33

    22,285       22,925,540  
   

 

 

 
    45,799,139  
Texas — 9.6%  

City of San Antonio Texas Public Facilities Corp., Refunding LRB, Convention Center Refinancing & Expansion Project:

   

4.00%, 09/15/30

    15,000       15,514,992  

4.00%, 09/15/31

    19,475       20,143,631  

4.00%, 09/15/32

    18,075       18,695,565  

4.00%, 09/15/33

    11,000       11,377,661  

4.00%, 09/15/34

    11,885       12,293,045  

4.00%, 09/15/35

    4,500       4,654,497  
Security   Par
(000)
    Value  
Texas (continued)  

Dallas Fort Worth International Airport, Refunding RB, AMT(j):

   

Series E, 4.00%, 11/01/32

  $ 6,915     $ 7,281,745  

Series E, 4.13%, 11/01/35

    10,435       10,988,432  

Series F, 5.00%, 11/01/29

    12,820       13,499,923  

Series F, 5.00%, 11/01/30

    15,565       16,390,507  

Series F, 5.00%, 11/01/31

    10,000       10,530,361  

Series F, 5.00%, 11/01/32

    17,170       18,080,630  
   

 

 

 
    159,450,989  
   

 

 

 

Total Municipal Bonds Transferred to Tender Option Bond Trusts — 26.9%
(Cost — $439,573,597)

 

    448,494,968  
   

 

 

 

Total Long-Term Investments — 158.8%
(Cost — $2,618,765,962)

 

    2,643,834,423  
   

 

 

 
     Shares         
Short-Term Securities — 1.6%  

BlackRock Liquidity Funds, MuniCash, Institutional Class, 0.85%(l)(m)

    26,798,334       26,803,694  
   

 

 

 

Total Short-Term Securities — 1.6%
(Cost — $26,801,014)

 

    26,803,694  
   

 

 

 

Total Investments — 160.4%
(Cost — $2,645,566,976)

 

    2,670,638,117  

Other Assets Less Liabilities — 0.4%

 

    7,001,488  

Liability for TOB Trust Certificates, Including Interest Expense and Fees Payable — (15.8)%

 

    (262,830,626

RVMTP Shares at Liquidation Value, Net of Deferred Offering Costs — (45.0)%

 

    (749,611,379
   

 

 

 

Net Assets Applicable to Common Shares — 100.0%

 

  $ 1,665,197,600  
   

 

 

 

 

(a) 

When-issued security.

(b) 

Zero-coupon bond.

(c) 

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

(d) 

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

(e) 

Variable or floating rate security, which interest rate adjusts periodically based on changes in current interest rates and prepayments on the underlying pool of assets. Rate shown is the rate in effect as of period end.

(f) 

Step-up bond that pays an initial coupon rate for the first period and then a higher coupon rate for the following periods. Rate as of period end.

(g) 

Issuer filed for bankruptcy and/or is in default.

(h) 

Non-income producing security.

(i) 

Represent bonds transferred to a TOB Trust in exchange of cash and residual certificates received by the Trust. These bonds serve as collateral in a secured borrowing. See Note 4 of the Notes to Financial Statements for details.

(j) 

All or a portion of security is subject to a recourse agreement. The aggregate maximum potential amount the Trust could ultimately be required to pay under the agreement, which expires between November 1, 2018 to March 1, 2026, is $180,165,689. See Note 4 of the Notes to Financial Statements for details.

(k) 

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

(l) 

Annualized 7-day yield as of period end.

 

 

 

SCHEDULES OF INVESTMENTS      31  


Schedule of Investments  (continued)

July 31, 2018

  

BlackRock Municipal 2030 Target Term Trust (BTT)

 

(m) 

During the year ended July 31, 2018, investments in issuers considered to be an affiliate of the Trust for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:

 

Affiliate    Shares
Held at
07/31/17
     Net
Activity
     Shares
Held at
07/31/18
     Value at
07/31/18
     Income      Net
Realized
Gain (Loss)
 (a)
     Change in
Unrealized
Appreciation
(Depreciation)
 

BlackRock Liquidity Funds, MuniCash, Institutional Class

     47,738,777        (20,940,443      26,798,334      $ 26,803,694      $ 362,061      $ 6,739      $ (11,820
           

 

 

    

 

 

    

 

 

    

 

 

 

 

  (a) 

Includes net capital gain distributions, if applicable.

 

Fair Value Hierarchy as of Period End

Various inputs are used in determining the fair value of investments. For information about the Trust’s policy regarding valuation of investments, refer to the Notes to Financial Statements.

The following tables summarize the Trust’s investments categorized in the disclosure hierarchy:

 

      Level 1        Level 2        Level 3        Total  

Assets:

 

Investments:

 

Long-Term Investments(a)

   $        $ 2,643,834,423        $             —        $ 2,643,834,423  

Short-Term Securities

     26,803,694                            26,803,694  
  

 

 

      

 

 

      

 

 

      

 

 

 
   $ 26,803,694        $ 2,643,834,423        $        $ 2,670,638,117  
  

 

 

      

 

 

      

 

 

      

 

 

 

 

  (a) 

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

 

The Trust may hold assets and/or liabilities in which the fair value approximates the carrying amount for financial statement purposes. As of period end, such assets and/or liabilities are categorized within the disclosure hierarchy as follows:

 

      Level 1        Level 2        Level 3        Total  

Liabilities:

 

TOB Trust Certificates

   $             —        $ (261,819,915      $             —        $ (261,819,915

RVMTP Shares at Liquidation Value

              (750,000,000                 (750,000,000
  

 

 

      

 

 

      

 

 

      

 

 

 
   $        $ (1,011,819,915      $        $ (1,011,819,915
  

 

 

      

 

 

      

 

 

      

 

 

 

During the year ended July 31, 2018, there were no transfers between levels.

See notes to financial statements.

 

 

32    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Schedule of Investments

July 31, 2018

  

BlackRock Municipal Income Investment Trust (BBF)

(Percentages shown are based on Net Assets)

 

Security   Par
(000)
    Value  

Municipal Bonds — 109.5%

 

Alabama — 0.3%  

City of Selma Alabama IDB, RB, Gulf Opportunity Zone, International Paper Co. Project, Series A, 5.38%, 12/01/35

  $ 420     $ 461,450  
   

 

 

 
Arizona — 1.1%  

Arizona IDA, Refunding RB, Basis Schools, Inc. Projects, Series A, 5.38%, 07/01/50(a)

    1,185       1,235,718  

City of Phoenix Arizona IDA, Refunding RB, Basis Schools, Inc. Projects, Series A, 5.00%, 07/01/35(a)

    275       283,577  
   

 

 

 
    1,519,295  
California — 13.9%  

California Health Facilities Financing Authority, Refunding RB, Catholic Healthcare West, Series A, 6.00%, 07/01/19(b)

    1,010       1,052,975  

California School Finance Authority, RB, Alliance For College-Ready Public School Projects, Series A, 5.00%, 07/01/51(a)

    1,200       1,271,820  

California Statewide Communities Development Authority, RB, Lancer Educational student Housing Project, Series A,
5.00%, 06/01/46(a)

    1,220       1,283,660  

California Statewide Communities Development Authority, Refunding RB, Lancer Educational student Housing Project, Series A, 5.00%, 06/01/36(a)

    990       1,047,747  

Golden State Tobacco Securitization Corp., Refunding RB, Series A-1:

   

Asset-Backed, Senior, 5.13%, 06/01/47

    425       426,594  

5.25%, 06/01/47

    475       493,815  

Kern Community College District, GO, Safety, Repair & Improvement, Series C, 5.50%, 11/01/33

    1,185       1,382,871  

Regents of the University of California Medical Center Pooled Revenue, Refunding RB, Series J:

   

5.25%, 05/15/23(b)

    2,165       2,513,543  

5.25%, 05/15/38

    615       692,595  

State of California, GO, Various Purposes, 6.00%, 03/01/33

    1,960       2,094,985  

State of California Public Works Board, LRB, Various Capital Projects, Series I:

   

5.50%, 11/01/31

    2,100       2,426,928  

5.50%, 11/01/33

    1,500       1,731,915  

State of California Public Works Board, RB, Department of Corrections & Rehabilitation, Series F, 5.25%, 09/01/33

    610       694,241  

Tobacco Securitization Authority of Southern California, Refunding RB, Tobacco Settlement, Asset-Backed, Senior Series A-1, 5.00%, 06/01/37

    2,025       2,035,894  

Township of Washington California Health Care District, GO, Election of 2004, Series B, 5.50%, 08/01/40

    460       533,913  
   

 

 

 
    19,683,496  
Colorado — 2.9%  

Centerra Metropolitan District No. 1, Tax Allocation Bonds,
5.00%, 12/01/47(a)

    250       254,430  

City & County of Denver Colorado Airport System, ARB, Sub-System, Series B, 5.25%, 11/15/32

    1,750       1,981,297  

Colorado Health Facilities Authority, Refunding RB, Series A:

   

Catholic Health Initiative, 5.50%, 07/01/34

    1,675       1,718,852  

Frasier Meadows Retirement Community Project, 5.25%, 05/15/37

    210       229,274  
   

 

 

 
    4,183,853  
Connecticut — 0.4%  

Connecticut Housing Finance Authority, Refunding RB, S/F Housing, Sub-Series B-1, 4.00%, 05/15/45

    515       520,304  
   

 

 

 
Delaware — 0.8%  

County of Kent Delaware, RB, CHF Dover LLC, Delaware State University Project, Series A, 5.00%, 07/01/58

    1,040       1,101,620  
   

 

 

 
Security   Par
(000)
    Value  
Florida — 6.5%  

Celebration Pointe Community Development District, Special Assessment Bonds, County of Alachua Florida(a):

   

5.00%, 05/01/32

  $ 225     $ 239,333  

5.00%, 05/01/48

    555       577,289  

City of Jacksonville Florida, Refunding RB, Series A, 5.25%, 10/01/33

    370       418,799  

County of Miami-Dade Florida, RB, Seaport Department, Series A, 6.00%, 10/01/38

    5,675       6,539,302  

Lakewood Ranch Stewardship District, Special Assessment Bonds, Lakewood National & Polo Run Projects:

   

5.25%, 05/01/37

    180       190,595  

5.38%, 05/01/47

    185       195,625  

Reedy Creek Florida Improvement District, GO, Series A,
5.25%, 06/01/32

    875       994,061  
   

 

 

 
    9,155,004  
Georgia — 0.6%  

City of Atlanta Georgia Water & Wastewater Revenue, Refunding RB, Series B, 3.50%, 11/01/43

    330       320,803  

County of Georgia Housing & Finance Authority, RB, S/F, Series A:

   

3.95%, 12/01/43

    370       371,080  

4.00%, 12/01/48

    195       195,135  
   

 

 

 
    887,018  
Idaho — 0.5%  

Idaho Health Facilities Authority, Refunding RB, St. Luke’s Health System Project, Series A(c):

   

4.00%, 03/01/43

    190       188,818  

4.00%, 03/01/38

    375       375,300  

4.00%, 03/01/48

    190       189,343  
   

 

 

 
    753,461  
Illinois — 20.2%  

Chicago Board of Education, GO:

   

Dedicated Revenues, Series H, 5.00%, 12/01/46

    215       219,814  

Project, Series C, 5.25%, 12/01/35

    700       728,595  

Refunding Dedicated Revenues, Series D, 5.00%, 12/01/27

    400       422,256  

Refunding Dedicated Revenues, Series F, 5.00%, 12/01/23

    290       304,778  

Refunding Dedicated Revenues, Series G, 5.00%, 12/01/34

    215       222,938  

City of Chicago Illinois O’Hare International Airport, GARB, 3rd Lien, Series C, 6.50%, 01/01/21(b)

    4,545       5,044,995  

City of Chicago Illinois Transit Authority, RB:

   

5.25%, 12/01/31

    560       602,392  

Sales Tax Receipts, 5.25%, 12/01/36

    1,500       1,601,730  

Sales Tax Receipts, 5.25%, 12/01/40

    1,750       1,866,392  

County of Cook Illinois Community College District No. 508, GO, City College of Chicago:

   

5.50%, 12/01/38

    580       612,242  

5.25%, 12/01/43

    2,660       2,767,517  

Illinois Finance Authority, RB:

   

Carle Foundation, Series A, 6.00%, 08/15/41

    1,750       1,926,365  

Rush University Medical Center, Series B,
7.25%, 11/01/18(b)

    1,600       1,623,280  

Illinois Finance Authority, Refunding RB, Northwestern Memorial Hospital, Series A, 6.00%, 08/15/19(b)

    2,900       3,033,661  

Metropolitan Pier & Exposition Authority, RB, Series A, McCormick Place Expansion Project:

   

Bonds, 0.00%, 12/15/56(d)

    2,165       324,274  

Bonds, 5.00%, 06/15/57

    590       628,102  

5.50%, 06/15/53

    280       303,590  
 

 

 

SCHEDULES OF INVESTMENTS      33  


Schedule of Investments  (continued)

July 31, 2018

  

BlackRock Municipal Income Investment Trust (BBF)

(Percentages shown are based on Net Assets)

 

Security   Par
(000)
    Value  
Illinois (continued)  

Metropolitan Pier & Exposition Authority, Refunding RB, McCormick Place Expansion Project:

   

Bonds, Series B, 0.00%, 12/15/54(d)

  $ 3,020     $ 503,223  

Series B-2, 5.00%, 06/15/50

    125       127,338  

Railsplitter Tobacco Settlement Authority, RB(b):

   

5.50%, 06/01/21

    1,055       1,161,302  

6.00%, 06/01/21

    300       334,347  

State of Illinois, GO:

   

5.25%, 02/01/31

    730       774,260  

5.25%, 02/01/32

    1,500       1,585,650  

5.50%, 07/01/33

    1,500       1,590,495  

5.50%, 07/01/38

    340       357,887  
   

 

 

 
    28,667,423  
Indiana — 3.7%  

County of Allen Indiana, RB, StoryPoint Fort Wayne Project, Series A-1(a):

   

6.63%, 01/15/34

    125       134,487  

6.75%, 01/15/43

    185       198,779  

6.88%, 01/15/52

    375       403,695  

Indiana Finance Authority, Refunding RB, Marquette Project,
4.75%, 03/01/32

    500       511,375  

Indiana Municipal Power Agency, RB, Series B, 6.00%, 01/01/19(b)

    3,400       3,465,246  

Town of Chesterton Indiana, RB, StoryPoint Chesterton Project, Series A-1, 6.38%, 01/15/51(a)

    520       542,911  
   

 

 

 
    5,256,493  
Iowa — 1.2%  

Iowa Finance Authority, Refunding RB, Iowa Fertilizer Co. Project:

   

Series B, 5.25%, 12/01/50(e)

    905       961,617  

Midwestern Disaster Area, 5.50%, 12/01/22

    5       5,041  

Midwestern Disaster Area, 5.25%, 12/01/25

    625       667,393  
   

 

 

 
    1,634,051  
Kansas — 2.2%  

City of Lenexa Kansas, Refunding RB, Lakeview Village, Inc., Series A, 5.00%, 05/15/43

    475       503,006  

Kansas Development Finance Authority, Refunding RB, Adventist Health System:

   

5.50%, 11/15/19(b)

    55       57,588  

5.50%, 11/15/29

    2,445       2,576,468  
   

 

 

 
    3,137,062  
Louisiana — 1.5%  

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

    1,095       1,195,116  

Tobacco Settlement Financing Corp., Refunding RB, Asset-Backed, Series A, 5.50%, 05/15/29

    915       947,437  
   

 

 

 
    2,142,553  
Maine — 0.5%  

Maine Health & Higher Educational Facilities Authority, RB, Maine General Medical Center, 7.50%, 07/01/32

    680       753,902  
   

 

 

 
Maryland — 0.4%  

City of Baltimore Maryland, Refunding RB, East Baltimore Research Park, Series A, 4.50%, 09/01/33

    135       139,990  

City of Baltimore Maryland, Tax Allocation Bonds, Center/West Development, Series A, 5.38%, 06/01/36

    415       422,262  
   

 

 

 
    562,252  
Security   Par
(000)
    Value  
Massachusetts — 2.4%  

Massachusetts Development Finance Agency, RB:

   

Emerson College Issue, Series A, 5.00%, 01/01/47

  $ 790     $ 860,666  

UMass Boston Student Housing Project, 5.00%, 10/01/41

    500       542,480  

UMass Boston Student Housing Project, 5.00%, 10/01/48

    875       944,877  

Massachusetts Development Finance Agency, Refunding RB:

   

Emerson College Issue, 5.00%, 01/01/45

    375       401,933  

Trustees of Deerfield Academy, 5.00%, 10/01/40

    375       399,026  

Metropolitan Boston Transit Parking Corp., Refunding RB,
5.25%, 07/01/36

    300       325,152  
   

 

 

 
    3,474,134  
Michigan — 3.2%  

City of Lansing Michigan, RB, Board of Water & Light Utilities System, Series A, 5.50%, 07/01/41

    1,400       1,532,174  

Michigan State Building Authority, Refunding RB, Facilities Program Series:

   

6.00%, 10/15/18(b)

    910       918,700  

6.00%, 10/15/18(b)

    540       545,162  

6.00%, 10/15/38

    50       50,455  

Royal Oak Hospital Finance Authority Michigan, Refunding RB, William Beaumont Hospital, Series V, 8.25%, 09/01/18(b)

    825       829,595  

State of Michigan Housing Development Authority, RB, Series A, 4.05%, 10/01/48

    735       733,692  
   

 

 

 
    4,609,778  
Montana — 0.1%  

City of Kalispell Montana, Refunding RB, Immanuel Lutheran Corporation Project, Series A, 5.25%, 05/15/37

    125       131,363  
   

 

 

 
Nevada — 4.0%  

City of Las Vegas Nevada, GO, Limited Tax, Performing Arts Center, 6.00%, 04/01/19(b)

    2,600       2,677,818  

County of Clark Nevada Airport System, ARB, Series B,
5.75%, 07/01/42

    2,825       2,987,805  
   

 

 

 
    5,665,623  
New Jersey — 7.1%  

Casino Reinvestment Development Authority, Refunding RB,
5.25%, 11/01/39

    265       284,043  

New Jersey EDA, Refunding RB, School Facilities Construction, Series AA:

   

5.50%, 06/15/19(b)

    500       517,200  

5.50%, 12/15/29

    250       256,425  

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

    1,545       1,564,343  

New Jersey Transportation Trust Fund Authority, RB, Transportation System:

   

Series A, 5.88%, 12/15/38

    1,990       2,015,333  

Series AA, 5.50%, 06/15/39

    2,245       2,410,007  

Tobacco Settlement Financing Corp., Refunding RB:

   

Series A, 5.00%, 06/01/36

    475       530,461  

Series A, 5.00%, 06/01/46

    1,515       1,664,197  

Series A, 5.25%, 06/01/46

    390       436,687  

Sub-Series B, 5.00%, 06/01/46

    380       407,102  
   

 

 

 
    10,085,798  
New York — 3.9%  

Counties of New York Tobacco Trust IV, Refunding RB, Settlement Pass-Through Turbo, Series A,
6.25%, 06/01/41(a)

    900       934,209  

Hudson Yards Infrastructure Corp., RB, Senior, Fiscal 2012:

   

5.75%, 02/15/21(b)

    1,005       1,105,610  

5.75%, 02/15/47

    615       669,194  

Metropolitan Transportation Authority, RB, Series A,
5.25%, 11/15/21(b)

    500       555,975  
 

 

 

34    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Schedule of Investments  (continued)

July 31, 2018

  

BlackRock Municipal Income Investment Trust (BBF)

(Percentages shown are based on Net Assets)

 

Security   Par
(000)
    Value  
New York (continued)  

Metropolitan Transportation Authority, Refunding RB, Series C-1, 5.25%, 11/15/56

  $ 425     $ 479,379  

New York Liberty Development Corp., Refunding RB, 2nd Priority, Bank of America Tower at One Bryant Park Project, Class 3, 6.38%, 07/15/49

    1,480       1,559,565  

Westchester New York Tobacco Asset Securitization, Refunding RB, Tobacco Settlement Bonds, Sub-Series C, 4.00%, 06/01/42

    275       269,189  
   

 

 

 
    5,573,121  
Ohio — 3.8%  

Buckeye Tobacco Settlement Financing Authority, RB, Asset-Backed, Senior Turbo Term, Series A-2:

   

5.75%, 06/01/34

    225       225,562  

5.88%, 06/01/47

    1,000       1,008,600  

County of Allen Ohio Hospital Facilities Revenue, Refunding RB, Catholic Healthcare Partners, Series A, 5.25%, 06/01/20(b)

    2,405       2,557,285  

State of Ohio Turnpike Commission, RB, Junior Lien, Infrastructure Projects, Series A-1, 5.25%, 02/15/31

    1,385       1,548,624  
   

 

 

 
    5,340,071  
Oklahoma — 1.9%  

Oklahoma Development Finance Authority, RB:

   

OU Medicine Project, Series B, 5.25%, 08/15/48

    560       629,210  

Provident Oklahoma Education Resources, Inc., Cross Village Student Housing Project, Series A, 5.25%, 08/01/57

    1,110       1,088,189  

Tulsa County Industrial Authority, Refunding RB, Montereau, Inc. Project, 5.25%, 11/15/45

    850       934,949  
   

 

 

 
    2,652,348  
Oregon — 0.2%  

County of Clackamas Oregon School District No. 12 North Clackamas, GO, CAB, Series A, 0.00%, 06/15/38(d)

    575       257,324  
   

 

 

 
Pennsylvania — 4.1%  

Allentown Neighborhood Improvement Zone Development Authority, RB, City Center Project, 5.00%, 05/01/42(a)

    420       452,323  

County of Montgomery Higher Education & Health Authority, Refunding RB, Thomas Jefferson University, Series A,
4.00%, 09/01/49

    70       69,998  

Pennsylvania Economic Development Financing Authority, RB, American Water Co. Project, 6.20%, 04/01/39

    800       822,560  

Pennsylvania Housing Finance Agency, RB, S/F Housing Mortgage, Series 123-B, 4.00%, 10/01/42

    1,000       1,014,590  

Pennsylvania Turnpike Commission, RB, Series A(b):

   

5.63%, 12/01/20

    1,200       1,305,996  

5.63%, 12/01/20

    445       484,307  

Township of Bristol Pennsylvania School District, GO, 5.25%, 06/01/37

    1,530       1,693,098  
   

 

 

 
    5,842,872  
Puerto Rico — 1.2%  

Children’s Trust Fund, Refunding RB, Tobacco Settlement Asset-Backed Bonds:

   

5.50%, 05/15/39

    305       306,989  

5.63%, 05/15/43

    1,420       1,432,382  
   

 

 

 
    1,739,371  
Rhode Island — 2.2%  

Tobacco Settlement Financing Corp., Refunding RB, Series B:

   

4.50%, 06/01/45

    2,870       2,922,234  

5.00%, 06/01/50

    125       130,425  
   

 

 

 
    3,052,659  
Security   Par
(000)
    Value  
South Carolina — 3.7%  

County of Charleston South Carolina, RB, Special Source, 5.25%, 12/01/38

  $ 1,825     $ 2,088,658  

State of South Carolina Public Service Authority, RB, Series E, 5.50%, 12/01/53

    1,500       1,623,420  

State of South Carolina Public Service Authority, Refunding RB:

   

Series A, 5.00%, 12/01/50

    210       223,335  

Series E, 5.25%, 12/01/55

    1,230       1,330,036  
   

 

 

 
    5,265,449  
Texas — 11.0%  

Central Texas Regional Mobility Authority, Refunding RB, Senior Lien, 6.00%, 01/01/21(b)

    2,560       2,805,171  

City of Beaumont Texas, GO, Certificates of Obligation, 5.25%, 03/01/37

    1,140       1,270,678  

County of Tarrant Texas Cultural Education Facilities Finance Corp., RB, Scott & White Healthcare, 6.00%, 08/15/20(b)

    2,710       2,942,220  

Del Mar College District, GOL, Series B, 4.00%, 08/15/48(c)

    850       861,934  

Lower Colorado River Authority, Refunding RB:

   

5.50%, 05/15/19(b)

    5       5,150  

5.50%, 05/15/19(b)

    80       82,406  

5.50%, 05/15/19(b)

    5       5,150  

5.50%, 05/15/33

    1,910       1,965,467  

North Texas Tollway Authority, RB, Special Projects, Series A, 5.50%, 09/01/21(b)

    1,500       1,658,430  

North Texas Tollway Authority, Refunding RB, 1st Tier, Series K-1 (AGC), 5.75%, 01/01/19(b)

    1,250       1,272,713  

Red River Texas Education Financing Corp., RB, Texas Christian University Project, 5.25%, 03/15/38

    520       579,842  

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

    2,005       2,128,648  
   

 

 

 
    15,577,809  
Virginia — 3.4%  

Ballston Quarter Community Development Authority, Tax Allocation Bonds, Series A:

   

5.00%, 03/01/26

    240       247,665  

5.13%, 03/01/31

    470       488,664  

City of Lexington Virginia IDA, RB, Washington & Lee University, 5.00%, 01/01/43

    425       461,733  

County of Fairfax Virginia IDA, Refunding RB, Health Care-Inova Health(b):

   

5.50%, 05/15/19

    475       489,668  

5.50%, 05/15/19

    885       912,683  

State of Virginia Public School Authority, RB, Fluvanna County School Financing, 6.50%, 12/01/18(b)

    1,200       1,220,640  

Tobacco Settlement Financing Corp., Refunding RB, Senior Series B-1, 5.00%, 06/01/47

    1,010       1,009,970  
   

 

 

 
    4,831,023  
Wisconsin — 0.6%  

Public Finance Authority, Refunding RB, Mery’s Wood at Marylhurst Projects, 5.25%, 05/15/52(a)

    735       795,748  
   

 

 

 

Total Municipal Bonds — 109.5%
(Cost — $146,916,877)

 

    155,313,728  
   

 

 

 

Municipal Bonds Transferred to Tender Option Bond Trusts(f)

 

California — 20.6%  

California Educational Facilities Authority, RB, University of Southern California, Series B, 5.25%, 10/01/18(b)(g)

    2,999       3,018,427  

Fremont Union High School District, GO, Refunding Series A, 4.00%, 08/01/46

    1,840       1,919,157  
 

 

 

SCHEDULES OF INVESTMENTS      35  


Schedule of Investments  (continued)

July 31, 2018

  

BlackRock Municipal Income Investment Trust (BBF)

(Percentages shown are based on Net Assets)

 

Security   Par
(000)
    Value  
California (continued)  

Grossmont California Union High School District, GO, Election of 2008, Series B, 5.00%, 08/01/20(b)

  $ 3,700     $ 3,953,117  

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

    600       618,111  

Los Angeles Community College District California, GO, Election of 2008, Series C, 5.25%, 08/01/20(b)(g)

    4,041       4,337,956  

Los Angeles Community College District California, GO, Refunding, Go, Refunding, Election of 2008, Series A, 6.00%, 08/01/19(b)

    5,977       6,251,288  

San Diego Public Facilities Financing Authority Water, RB, Series B, 5.50%, 08/01/19(b)

    6,448       6,709,849  

University of California, RB, Series O, 5.75%, 05/15/19(b)

    2,310       2,390,224  
   

 

 

 
    29,198,129  
District of Columbia — 3.5%  

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

    2,129       2,233,636  

District of Columbia Water & Sewer Authority, Refunding RB, Senior Lien, Series A, 5.50%, 10/01/18(b)

    2,698       2,716,291  
   

 

 

 
    4,949,927  
Georgia — 0.7%  

County of Dalton Whitfield Joint Development Authority, RB, Hamilton Health Care System Obligation, 4.00%, 08/15/48

    1,025       1,046,199  
   

 

 

 
Idaho — 1.4%  

Idaho State Building Authority, RB, State Office Campus Project, Series A, 4.00%, 09/01/48

    1,900       1,971,811  
   

 

 

 
Illinois — 1.0%  

State of Illinois Toll Highway Authority, RB, Series C, 5.00%, 01/01/38

    1,244       1,369,602  
   

 

 

 
Iowa — 1.1%  

Iowa Finance Authority, Refunding RB, UnityPoint Health, Series E, 4.00%, 08/15/46

    1,605       1,609,125  
   

 

 

 
Nevada — 1.5%  

County of Clark Nevada Water Reclamation District, GO, Series B, 5.50%, 07/01/19(b)

    1,994       2,066,669  
   

 

 

 
New Hampshire — 1.2%  

New Hampshire Health & Education Facilities Authority, RB, Dartmouth College, 5.25%, 06/01/19(b)(g)

    1,680       1,730,996  
   

 

 

 
New Jersey — 3.9%  

New Jersey Transportation Trust Fund Authority, RB, Transportation System:

   

Series A (AMBAC) (AGM), 5.00%, 12/15/32

    3,000       3,006,450  

Series B, 5.25%, 06/15/36(g)

    2,481       2,586,282  
   

 

 

 
    5,592,732  
New York — 12.2%  

City of New York Municipal Water Finance Authority, Refunding RB:

   

Series FF, 5.00%, 06/15/45

    2,499       2,720,436  

Water & Sewer System, 2nd General Resolution, Series FF-2, 5.50%, 06/15/40

    2,985       3,082,321  

City of New York Transitional Finance Authority, BARB, Fiscal 2009, Series S-3, 5.25%, 01/15/39

    2,500       2,539,762  

New York Liberty Development Corp., ARB, 1 World Trade Center Port Authority Consolidated Bonds, 5.25%, 12/15/43

    3,375       3,694,957  

New York Liberty Development Corp., Refunding RB, 4 World Trade Center Project, 5.75%, 11/15/51(g)

    1,980       2,199,868  

State of New York Dormitory Authority, ERB, Personal Income Tax, Series B, 5.25%, 03/15/19(b)

    3,000       3,070,860  
   

 

 

 
    17,308,204  
Security   Par
(000)
    Value  
North Carolina — 0.8%  

North Carolina Housing Finance Agency, RB, Series 39-B, 4.00%, 01/01/48

  $ 1,089     $ 1,093,175  
   

 

 

 
Pennsylvania — 2.7%  

Pennsylvania Turnpike Commission, RB, Sub-Series A, 5.50%, 12/01/42

    1,514       1,729,228  

Pennsylvania Turnpike Commission, Refunding RB, Sub Series B-2 (AGM), 5.00%, 06/01/35

    1,830       2,063,490  
   

 

 

 
    3,792,718  
Rhode Island — 1.6%  

Rhode Island Health & Educational Building Corp., RB, Series A, 4.00%, 09/15/47

    2,207       2,234,086  
   

 

 

 
Texas — 5.3%  

City of San Antonio Texas Public Service Board, Refunding RB, Series A, 5.25%, 02/01/19(b)(g)

    3,074       3,130,748  

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

    4,200       4,381,881  
   

 

 

 
    7,512,629  
Virginia — 1.2%  

Hampton Roads Transportation Accountability Commission, RB, Transportation Fund, Senior Lien, Series A, 5.50%, 07/01/57(g)

    1,473       1,752,144  
   

 

 

 
West Virginia — 1.2%  

Morgantown Utility Board Inc., RB, Series B, 4.00%, 12/01/48(g)

    1,671       1,678,977  
   

 

 

 

Total Municipal Bonds Transferred to Tender Option Bond Trusts — 59.9%
(Cost — $82,455,834)

 

    84,907,123  
   

 

 

 

Total Long-Term Investments — 169.4%
(Cost — $229,372,711)

 

    240,220,851  
   

 

 

 
     Shares         
Short-Term Securities — 0.4%  

BlackRock Liquidity Funds, MuniCash, Institutional Class, 0.85%(h)(i)

    569,880       569,994  
   

 

 

 

Total Short-Term Securities — 0.4%
(Cost — $569,994)

 

    569,994  
   

 

 

 

Total Investments — 169.8%
(Cost — $229,942,705)

 

    240,790,845  

Other Assets Less Liabilities — 1.4%

 

    1,958,525  

Liability for TOB Trust Certificates, Including Interest Expense and Fees Payable — (34.7)%

 

    (49,228,114

VRDP Shares at Liquidity Value, Net of Deferred Offering Cost — (36.5)%

 

    (51,712,896
   

 

 

 

Net Assets Applicable to Common Shares — 100.0%

 

  $ 141,808,360  
   

 

 

 

 

(a) 

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

(b) 

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

(c) 

When-issued security.

(d) 

Zero-coupon bond.

(e) 

Variable or floating rate security, which interest rate adjusts periodically based on changes in current interest rates and prepayments on the underlying pool of assets. Rate shown is the rate in effect as of period end.

 

 

 

36    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Schedule of Investments  (continued)

July 31, 2018

  

BlackRock Municipal Income Investment Trust (BBF)

 

(f) 

Represent bonds transferred to a TOB Trust in exchange of cash and residual certificates received by the Trust. These bonds serve as collateral in a secured borrowing. See Note 4 of the Notes to Financial Statements for details.

(g) 

All or a portion of security is subject to a recourse agreement. The aggregate maximum potential amount the Trust could ultimately be required to pay under the agreements, which expire between September 6, 2018 to June 1, 2026, is $13,886,759. See Note 4 of the Notes to Financial Statements for details.

(h) 

Annualized 7-day yield as of period end.

(i) 

During the year ended July 31, 2018, investments in issuers considered to be an affiliate of the Trust for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:

 

Affiliate    Shares
Held at
07/31/17
     Net
Activity
     Shares
Held at
07/31/18
     Value at
07/31/18
     Income      Net
Realized
Gain (Loss)
 (a)
     Change in
Unrealized
Appreciation
(Depreciation)
 

BlackRock Liquidity Funds, MuniCash, Institutional Class

            569,880        569,880      $ 569,994      $ 4,667      $ 53      $  
           

 

 

    

 

 

    

 

 

    

 

 

 

 

  (a) 

Includes net capital gain distributions, if applicable.

 

Derivative Financial Instruments Outstanding as of Period End

Futures Contracts

 

Description    Number of
Contracts
       Expiration
Date
       Notional
Amount (000)
       Value/
Unrealized
Appreciation
(Depreciation)
 

Short Contracts:

                 

10-Year U.S. Treasury Note

     10          09/19/18        $ 1,194        $ 6,085  

Long U.S. Treasury Bond

     25          09/19/18          3,574          10,199  

5-Year U.S. Treasury Note

     13          09/28/18          1,471          1,875  
                 

 

 

 
                  $ 18,159  
                 

 

 

 

Derivative Financial Instruments Categorized by Risk Exposure

As of period end, the fair values of derivative financial instruments located in the Statements of Assets and Liabilities were as follows:

 

      Commodity
Contracts
     Credit
Contracts
     Equity
Contracts
     Foreign
Currency
Exchange
Contracts
     Interest
Rate
Contracts
     Other
Contracts
     Total  

Assets — Derivative Financial Instruments

                    

Futures contracts

                    

Net unrealized appreciation(a)

   $      $      $      $      $ 18,159      $      $ 18,159  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

  (a) 

Includes cumulative appreciation (depreciation) on futures contracts if any, as reported in the Schedule of Investments. Only current day’s variation margin is reported within the Statements of Assets and Liabilities.

 

For the year ended July 31, 2018, the effect of derivative financial instruments in the Statements of Operations was as follows:

 

      Commodity
Contracts
     Credit
Contracts
     Equity
Contracts
     Foreign
Currency
Exchange
Contracts
     Interest
Rate
Contracts
     Other
Contracts
     Total  

Net Realized Gain (Loss) from:

                    

Futures contracts

   $      $      $      $      $ 440,452      $      $ 440,452  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net Change in Unrealized Appreciation (Depreciation) on:

                    

Futures contracts

   $      $      $      $      $ 29,920      $      $ 29,920  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Average Quarterly Balances of Outstanding Derivative Financial Instruments

 

Futures contracts:

        

Average notional value of contracts — short

   $ 7,234,641  

For more information about the Trust’s investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements.

 

 

SCHEDULES OF INVESTMENTS      37  


Schedule of Investments  (continued)

July 31, 2018

  

BlackRock Municipal Income Investment Trust (BBF)

 

Fair Value Hierarchy as of Period End

Various inputs are used in determining the fair value of investments and derivative financial instruments. For information about the Trust’s policy regarding valuation of investments and derivative financial instruments, refer to the Notes to Financial Statements.

The following tables summarize the Trust’s investments and derivative financial instruments categorized in the disclosure hierarchy:

 

      Level 1        Level 2        Level 3        Total  

Assets:

 

Investments:

 

Long-Term Investments(a)

   $        $ 240,220,851        $             —        $ 240,220,851  

Short-Term Securities

     569,994                            569,994  
  

 

 

      

 

 

      

 

 

      

 

 

 
   $ 569,994        $ 240,220,851        $        $ 240,790,845  
  

 

 

      

 

 

      

 

 

      

 

 

 

Derivative Financial Instruments(b)

 

Assets:

 

Interest rate contracts

   $ 18,159        $        $        $ 18,159  
  

 

 

      

 

 

      

 

 

      

 

 

 

 

  (a) 

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

 
  (b) 

Derivative financial instruments are futures contracts which are valued at the unrealized appreciation (depreciation) on the instrument.

 

The Trust may hold assets and/or liabilities in which the fair value approximates the carrying amount for financial statement purposes. As of period end, such assets and/or liabilities are categorized within the disclosure hierarchy as follows:

 

      Level 1        Level 2        Level 3        Total  

Liabilities:

 

TOB Trust Certificates

   $             —        $ (49,042,815      $             —        $ (49,042,815

VRDP Shares at Liquidation Value

              (52,000,000                 (52,000,000
  

 

 

      

 

 

      

 

 

      

 

 

 
   $        $ (101,042,815      $        $ (101,042,815
  

 

 

      

 

 

      

 

 

      

 

 

 

During the year ended July 31, 2018, there were no transfers between levels.

See notes to financial statements.

 

 

38    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Schedule of Investments

July 31, 2018

  

BlackRock New York Municipal Income Trust (BNY)

(Percentages shown are based on Net Assets)

 

Security   Par
(000)
    Value  

Municipal Bonds — 134.5%

 

New York — 130.0%  
Corporate — 4.8%  

Build NYC Resource Corp., Refunding RB, Pratt Paper, Inc. Project, AMT, 5.00%, 01/01/35(a)

  $ 280     $ 300,440  

City of New York Industrial Development Agency, Refunding RB, Transportation Infrastructure Properties LLC, Series A, AMT:

   

5.00%, 07/01/22

    650       713,018  

5.00%, 07/01/28

    795       847,232  

County of Essex New York Industrial Development Agency, RB, International Paper Co. Project, Series A, AMT, 6.63%, 09/01/32

    550       552,167  

County of Onondaga New York Industrial Development Agency, RB, Bristol-Meyers Squibb Co. Project, AMT, 5.75%, 03/01/24(a)

    1,000       1,158,120  

New York Liberty Development Corp., Refunding RB, Goldman Sachs Headquarters, 5.25%, 10/01/35

    3,195       3,925,696  

Niagara Area Development Corp., Refunding RB, Solid Waste Disposal Facility, Covanta Energy Project, Series A, AMT, 5.25%, 11/01/42

    1,500       1,512,000  
   

 

 

 
      9,008,673  
County/City/Special District/School District — 26.2%  

City of New York, GO, Refunding, Series E:

   

5.50%, 08/01/25

    1,115       1,294,526  

5.00%, 08/01/30

    1,000       1,112,920  

City of New York, GO:

   

Series A-1, 4.75%, 08/15/25

    750       751,957  

Series A-1, 5.00%, 08/01/35

    1,000       1,078,970  

Series D, 5.38%, 06/01/32

    25       25,089  

Series G-1, 6.25%, 12/15/31

    15       15,271  

Sub-Series D-1, Fiscal 2014, 5.00%, 08/01/31

    690       774,697  

Sub-Series G-1, 6.25%, 12/15/18(b)

    485       493,939  

Sub-Series G-1, 5.00%, 04/01/28

    630       690,820  

Sub-Series G-1, 5.00%, 04/01/29

    750       821,572  

Sub-Series I-1, 5.38%, 04/01/19(b)

    465       477,350  

Sub-Series I-1, 5.38%, 04/01/36

    65       66,586  

Refunding Series I, 5.00%, 08/01/30

    1,000       1,102,950  

City of New York Convention Center Development Corp., RB, CAB, Sub Lien, Hotel Unit Fee, Series B (AGM), 0.00%, 11/15/55(c)

    2,000       419,960  

City of New York Convention Center Development Corp., Refunding RB, Hotel Unit Fee Secured, 5.00%, 11/15/45

    3,700       4,152,621  

City of New York Industrial Development Agency, RB, PILOT:

   

CAB, Yankee Stadium Project, Series A (AGC), 4.75%, 03/01/42

    1,960       750,974  

CAB, Yankee Stadium Project, Series A (AGC),
0.00%, 03/01/45(c)

    1,500       496,905  

(AMBAC), 5.00%, 01/01/39

    3,000       3,040,500  

Queens Baseball Stadium (AGC), 0.00%, 01/01/39(c)

    150       152,858  

Queens Baseball Stadium (AMBAC), 5.00%, 01/01/46

    175       177,538  

City of New York Convention Center Development Corp., Refunding RB, Hotel Unit Fee Secured, 5.00%, 11/15/40

    2,975       3,357,525  

City of New York Industrial Development Agency, RB, PILOT, Yankee Stadium Project (NPFGC):

   

4.75%, 03/01/46

    350       350,238  

5.00%, 03/01/46

    500       502,830  

County of Erie New York Fiscal Stability Authority, RB, Sales Tax and State Aid Secured Refunding Bonds, Series D:

   

5.00%, 09/01/35

    115       134,156  

5.00%, 09/01/36

    105       122,126  

5.00%, 09/01/37

    115       133,558  

5.00%, 09/01/38

    180       208,737  

5.00%, 09/01/39

    140       161,868  
Security   Par
(000)
    Value  
County/City/Special District/School District (continued)  

County of Nassau New York, GO:

   

Series A, 5.00%, 01/15/31

  $ 1,000     $ 1,146,720  

Refunding Series B, 5.00%, 04/01/32

    835       950,614  

Hudson Yards Infrastructure Corp., RB, Senior, Fiscal 2012:

   

5.75%, 02/15/21(b)

    125       137,514  

5.75%, 02/15/47

    75       81,609  

Hudson Yards Infrastructure Corp., Refunding RB, Series A:

   

2nd Indenture, 5.00%, 02/15/45

    1,225       1,386,602  

Fiscal 2017, 5.00%, 02/15/42

    2,020       2,291,306  

5.00%, 02/15/37

    215       245,257  

New York Liberty Development Corp., Refunding RB:

   

2nd Priority, Bank of America Tower at One Bryant Park Project, Class 2, 5.63%, 07/15/47

    2,000       2,110,960  

2nd Priority, Bank of America Tower at One Bryant Park Project, Class 3, 6.38%, 07/15/49

    1,200       1,264,512  

3 World Trade Center Project, Class 2,
5.38%, 11/15/40(a)

    480       527,827  

4 World Trade Center Project, 5.00%, 11/15/31

    860       936,187  

4 World Trade Center Project, 5.00%, 11/15/44

    7,655       8,269,926  

7 World Trade Center Project, Class 1, 4.00%, 09/15/35

    1,935       2,023,178  

7 World Trade Center Project, Class 2, 5.00%, 09/15/43

    1,420       1,532,365  

7 World Trade Center Project, Class 3, 5.00%, 03/15/44

    2,070       2,227,134  

World Trade Center Project, 5.75%, 11/15/51

    1,340       1,491,755  
   

 

 

 
      49,492,507  
Education — 29.9%  

Amherst Development Corp., Refunding RB:

   

Daemen College Project, 5.00%, 10/01/43

    380       410,472  

Daemen College Project, 5.00%, 10/01/48

    290       311,999  

University at Buffalo Foundation Faculty-Student Housing Corp., Series A (AGM), 4.63%, 10/01/20(b)

    1,100       1,169,256  

Build NYC Resource Corp., RB, Inwood Academy for Leadership Charter School Project, Series A, 5.13%, 05/01/38(a)

    660       674,942  

Build NYC Resource Corp., Refunding RB:

   

City University New York-Queens College Student Residences, LLC Project, Series A, 5.00%, 06/01/38

    250       278,250  

Manhattan College Project, 5.00%, 08/01/35

    525       593,555  

City of New York Trust for Cultural Resources, RB, Juilliard School, Series A, 5.00%, 01/01/39

    750       760,590  

City of New York Trust for Cultural Resources, Refunding RB, Series A:

   

American Museum of Natural History, 5.00%, 07/01/37

    225       252,713  

Carnegie Hall, 4.75%, 12/01/39

    2,000       2,064,860  

City of New York Trust for Cultural Resources, Refunding RB, Museum of Modern Art, Series 1A, 5.00%, 10/01/18(b)

    1,000       1,006,230  

City of Troy New York Capital Resource Corp., Refunding RB, Rensselaer Polytechnic Institute Project:

   

Series A, 5.13%, 09/01/40

    3,135       3,291,625  

Series B, 4.00%, 08/01/35

    470       484,128  

City of Yonkers New York Industrial Development Agency, RB, Sarah Lawrence College Project, Series A, 6.00%, 06/01/19(b)

    625       647,900  

Counties of Buffalo & Erie New York Industrial Land Development Corp., Refunding RB, The Charter School for Applied Technologies Project, Series A, 5.00%, 06/01/35

    245       264,789  

County of Cattaraugus New York, RB, St. Bonaventure University Project, 5.00%, 05/01/34

    170       184,360  

County of Dutchess New York Industrial Development Agency, RB, Bard College Civic Facility, Series A-2, 4.50%, 08/01/36

    2,155       2,015,938  
 

 

 

SCHEDULES OF INVESTMENTS      39  


Schedule of Investments  (continued)

July 31, 2018

  

BlackRock New York Municipal Income Trust (BNY)

(Percentages shown are based on Net Assets)

 

Security   Par
(000)
    Value  
Education (continued)  

County of Dutchess New York Local Development Corp., Refunding RB, Vassar College Project:

   

5.00%, 07/01/42

  $ 395     $ 450,079  

4.00%, 07/01/46

    745       766,955  

County of Monroe New York Industrial Development Corp., RB, University of Rochester Project, Series A, 5.00%, 07/01/21(b)

    1,900       2,076,909  

County of Monroe New York Industrial Development Corp., Refunding RB:

   

Nazareth College of Rochester Project, 4.00%, 10/01/47

    125       122,879  

University of Rochester Project, Series A, 5.00%, 07/01/23(b)

    320       366,000  

County of Nassau New York Industrial Development Agency, Refunding RB, New York Institute of Technology Project, Series A, 4.75%, 03/01/20(b)

    1,165       1,221,479  

County of Orange New York Funding Corp., Refunding RB, Mount St. Mary College Project, Series A:

   

5.00%, 07/01/37

    360       381,611  

5.00%, 07/01/42

    220       232,626  

County of St. Lawrence New York Industrial Development Agency, RB, Clarkson University Project, 5.38%, 09/01/41

    750       815,625  

County of Tompkins New York Development Corp., RB, Ithaca College Project (AGM), 5.50%, 01/01/21(b)

    700       761,943  

Geneva Development Corp., Refunding RB, Hobart & William Smith Colleges, 5.25%, 09/01/44

    500       558,380  

State of New York Dormitory Authority, RB:

   

Convent of the Sacred Heart (AGM), 5.25%, 11/01/24

    155       168,917  

Convent of the Sacred Heart (AGM), 5.63%, 11/01/32

    750       818,715  

Convent of the Sacred Heart (AGM), 5.75%, 11/01/40

    210       229,702  

New York University Mount Sinai School of Medicine, 5.13%, 07/01/19(b)

    2,000       2,064,040  

New York University, Series 1 (AMBAC), 5.50%, 07/01/40

    1,440       1,881,317  

New York University, Series B, 5.00%, 07/01/37

    1,250       1,372,162  

Series B, 5.75%, 03/15/19(b)

    600       616,146  

State University Dormitory Facilities, Series A,
5.00%, 07/01/19(b)

    750       773,865  

State University Dormitory Facilities, Series A, 5.00%, 07/01/41

    2,000       2,155,420  

Teachers College, Series B, 5.00%, 07/01/42

    1,225       1,328,953  

Touro College & University System, Series A, 5.25%, 01/01/34

    800       875,072  

Touro College & University System, Series A, 5.50%, 01/01/39

    2,000       2,199,620  

University of Rochester, Series A, 5.13%, 07/01/19(b)

    740       764,383  

University of Rochester, Series A, 5.75%, 07/01/19(b)

    565       586,809  

University of Rochester, Series A, 5.13%, 07/01/39

    110       113,400  

University of Rochester, Series A, 5.75%, 07/01/39

    85       88,218  

State of New York Dormitory Authority, Refunding RB:

   

3rd General Resolution, State University Educational Facilities Issue, Series A, 5.00%, 05/15/29

    2,000       2,203,840  

Barnard College, Series A, 5.00%, 07/01/33

    530       602,817  

Brooklyn Law School, 5.75%, 07/01/33

    475       488,286  

Columbia University, Series B, 5.00%, 10/01/38

    735       864,242  

Cornell University, Series A, 5.00%, 07/01/40

    800       846,536  

Culinary Institute of America, 5.00%, 07/01/42

    300       320,277  

Fordham University, 5.00%, 07/01/44

    850       941,477  

Icahn School of Medicine at Mount Sinai, Series A, 5.00%, 07/01/35

    1,380       1,530,227  

New York University, Series A, 5.00%, 07/01/37

    1,790       1,964,937  

Rochester Institute of Technology, 5.00%, 07/01/42

    1,790       1,949,543  

Skidmore College, Series A, 5.00%, 07/01/28

    75       81,049  

Skidmore College, Series A, 5.25%, 07/01/29

    85       92,654  
Security   Par
(000)
    Value  
Education (continued)  

St. John’s University, Series A, 5.00%, 07/01/37

  $ 835     $ 931,927  

State University Dormitory Facilities, Series A, 5.25%, 07/01/30

    2,355       2,678,341  

State University Dormitory Facilities, Series A, 5.25%, 07/01/32

    445       505,435  

State University Dormitory Facilities, Series A, 5.00%, 07/01/46

    810       918,913  

Teachers College, 5.50%, 03/01/19(b)

    450       460,440  

St. John’s Univerisity, Series A, 5.00%, 07/01/34

    250       280,175  

Town of Hempstead New York Local Development Corp., Refunding RB:

   

Adelphi University Project, 5.00%, 10/01/35

    415       465,095  

Hofstra University Project, 5.00%, 07/01/47

    120       134,753  
   

 

 

 
      56,463,796  
Health — 13.5%  

County of Dutchess New York Local Development Corp., RB, Health Quest Systems, Inc., Series B, 4.00%, 07/01/41

    2,650       2,662,428  

County of Dutchess New York Local Development Corp., Refunding RB, Health Quest System, Inc., Series A, 5.75%, 07/01/40

    300       324,021  

County of Genesee New York Industrial Development Agency, Refunding RB, United Memorial Medical Center Project, 5.00%, 12/01/27

    430       430,271  

County of Monroe New York Industrial Development Corp., RB, Rochester General Hospital Project:

   

4.00%, 12/01/41

    200       200,554  

5.00%, 12/01/46

    320       350,054  

Series A, 5.00%, 12/01/32

    240       261,180  

County of Monroe New York Industrial Development Corp., Refunding RB, Unity Hospital of Rochester Project (FHA), 5.50%, 08/15/40

    1,650       1,790,828  

County of Nassau New York Local Economic Assistance Corp., Refunding RB, Winthrop University Hospital Association Project, 5.00%, 07/01/42

    2,800       2,950,192  

County of Suffolk New York EDC, RB, Catholic Health Services, Series C, 5.00%, 07/01/32

    230       250,974  

County of Westchester New York Healthcare Corp., Refunding RB, Senior Lien:

   

Remarketing, Series A, 5.00%, 11/01/30

    3,130       3,325,155  

Series B, 6.00%, 11/01/20(b)

    435       475,955  

Series B, 6.00%, 11/01/30

    65       69,880  

County of Westchester New York Local Development Corp., Refunding RB, Kendal On Hudson Project:

   

5.00%, 01/01/28

    675       730,694  

5.00%, 01/01/34

    1,250       1,337,113  

State of New York Dormitory Authority, RB:

   

New York State Association for Retarded Children, Inc., Series A, 6.00%, 07/01/19(b)

    500       520,200  

New York State Association for Retarded Children, Inc., Series B (AMBAC), 6.00%, 07/01/19(b)

    200       208,080  

New York University Hospitals Center, Series A,
6.00%, 07/01/20(b)

    500       540,015  

North Shore-Long Island Jewish Obligated Group, Series D, 4.25%, 05/01/39

    500       522,155  

State of New York Dormitory Authority, Refunding RB:

   

Memorial Sloan-Kettering Cancer Center, Series 1, 5.00%, 07/01/42

    915       1,041,069  

Miriam Osborn Memorial Home Association, 5.00%, 07/01/29

    290       296,716  

Mount Sinai Hospital, Series A, 5.00%, 07/01/26

    1,385       1,464,499  

North Shore-Long Island Jewish Obligated Group, Series A, 5.00%, 05/01/21(b)

    1,750       1,902,845  

North Shore-Long Island Jewish Obligated Group, Series A, 5.00%, 05/01/21(b)

    1,000       1,087,340  
 

 

 

40    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Schedule of Investments  (continued)

July 31, 2018

  

BlackRock New York Municipal Income Trust (BNY)

(Percentages shown are based on Net Assets)

 

Security   Par
(000)
    Value  
Health (continued)  

North Shore-Long Island Jewish Obligated Group, Series A, 5.00%, 05/01/43

  $ 1,430     $ 1,562,332  

North Shore-Long Island Jewish Obligated Group, Series E, 5.50%, 05/01/33

    1,100       1,129,623  
   

 

 

 
      25,434,173  
Housing — 2.7%  

City of New York Housing Development Corp., RB, M/F Housing, Fund Grant Program, New York City Housing Authority Program, Series B1:

   

5.25%, 07/01/32

    1,140       1,253,065  

5.00%, 07/01/33

    500       542,030  

City of New York Housing Development Corp., Refunding RB, M/F Housing, 8 Spruce Street, Class F, 4.50%, 02/15/48

    925       961,029  

County of Onondaga New York Trust for Cultural Resources, Refunding RB, Abby Lane Housing Corporation Project, 5.00%, 05/01/40

    355       389,478  

State of New York HFA, RB:

   

Affordable Housing, Series E (SONYMA), 4.15%, 11/01/47

    495       507,177  

M/F Housing, Highland Avenue Senior Apartments, Series A, AMT (SONYMA), 5.00%, 02/15/39

    1,440       1,445,227  
   

 

 

 
      5,098,006  
State — 15.2%  

City of New York Transitional Finance Authority, RB, Future Tax Secured, 5.00%, 02/01/32

    5,000       5,627,350  

City of New York Transitional Finance Authority, Refunding RB, Fiscal 2018:

   

Series S-1, 5.00%, 07/15/35

    505       579,078  

Series S-2, 5.00%, 07/15/35

    505       579,078  

City of New York Transitional Finance Authority Building Aid Revenue, RB, Series S-3, 5.25%, 07/15/36

    665       791,018  

City of New York Transitional Finance Authority Future Tax Secured, RB:

   

Fiscal 2012, Sub-Series E-1, 5.00%, 02/01/42

    2,500       2,709,800  

Sub-Series E-1, 5.00%, 02/01/38

    1,850       2,103,413  

Sub-Series F-1, 5.00%, 05/01/39

    1,775       2,019,915  

State of New York Dormitory Authority, RB:

   

General Purpose, Series B, 5.00%, 03/15/42

    4,380       4,762,900  

General Purpose, Series C, 5.00%, 03/15/34

    2,185       2,342,167  

Group 4, Series A, 5.00%, 03/15/45

    1,160       1,331,668  

Series A, 5.00%, 03/15/36

    1,360       1,554,670  

Series A, 5.00%, 02/15/42

    1,500       1,693,380  

State of New York Dormitory Authority, Refunding RB, School Districts Financing Program, Series A (AGM), 5.00%, 10/01/18(b)

    395       397,461  

State of New York Urban Development Corp., RB, State Personal Income Tax, Series C:

   

5.00%, 03/15/30

    885       990,775  

5.00%, 03/15/32

    1,000       1,114,870  
   

 

 

 
      28,597,543  
Tobacco — 3.3%  

Counties of New York Tobacco Trust IV, Refunding RB, Settlement Pass-Through Turbo, Series A,
6.25%, 06/01/41(a)

    1,000       1,038,010  

Counties of New York Tobacco Trust VI, Refunding RB:

   

Settlement Pass-Through Turbo, Series C, 4.00%, 06/01/51

    1,500       1,411,110  

Tobacco Settlement Pass-Through, Series A-2B, 5.00%, 06/01/51

    1,470       1,532,754  

Tobacco Settlement Pass-Through, Series B, 5.00%, 06/01/45

    130       138,479  
Security   Par
(000)
    Value  
Tobacco (continued)  

County of Chautauqua New York Tobacco Asset Securitization Corp., Refunding RB, Asset-Backed, 4.75%, 06/01/39

  $ 150     $ 151,435  

County of Niagara New York Tobacco Asset Securitization Corp., Refunding RB, Asset-Backed:

   

5.25%, 05/15/34

    250       269,462  

5.25%, 05/15/40

    110       117,619  

Westchester New York Tobacco Asset Securitization, Refunding RB, Tobacco Settlement Bonds, Sub-Series C, 4.00%, 06/01/42

    725       709,681  

Westchester Tobacco Asset Securitization, Refunding RB, Tobacco Settlement Bonds, Sub-Series C, 5.13%, 06/01/51

    870       905,348  
   

 

 

 
      6,273,898  
Transportation — 30.5%  

Buffalo & Fort Erie Public Bridge Authority, RB, Toll Bridge System, 5.00%, 01/01/42

    535       604,266  

Metropolitan Transportation Authority, RB:

   

Series A-1, 5.25%, 11/15/23(b)

    540       629,078  

Series C, 6.50%, 11/15/28

    195       197,755  

Series D, 5.25%, 11/15/21(b)

    220       244,629  

Series E, 5.00%, 11/15/38

    4,000       4,406,680  

Sub-Series A-1, 5.00%, 11/15/45

    715       791,991  

Metropolitan Transportation Authority, Refunding RB:

   

Green Bonds, Climate Bond Certified, Sub-Series B-2, 4.00%, 11/15/34

    750       792,285  

Green Bonds, Series A-1, 5.00%, 11/15/41

    855       953,419  

Green Bonds, Series A-1, 5.25%, 11/15/56

    750       840,907  

Series D, 5.25%, 11/15/21(b)

    780       867,321  

Series D, 5.25%, 11/15/23(b)

    910       1,060,114  

Series F, 5.00%, 11/15/30

    2,000       2,210,520  

Series F, 5.00%, 11/15/35

    500       562,550  

Transportation, Series D, 5.00%, 11/15/20(b)

    800       860,616  

Metropolitan Transportation Authority Hudson Rail Yards Trust Obligations, Refunding RB, Series A:

   

5.00%, 11/15/56

    2,695       2,912,729  

5.00%, 11/15/51

    230       244,580  

New York Transportation Development Corp., ARB, LaGuardia Airport Terminal B Redevelopment Project, Series A, AMT:

   

5.00%, 07/01/46

    3,115       3,335,075  

5.25%, 01/01/50

    4,445       4,812,735  

(AGM), 4.00%, 07/01/41

    800       806,272  

New York Transportation Development Corp., Refunding ARB, American Airlines, Inc., AMT, 5.00%, 08/01/31

    2,305       2,412,597  

Port Authority of New York & New Jersey, ARB, JFK International Air Terminal LLC, Special Project, AMT (NPFGC):

   

Series 6, 5.75%, 12/01/22

    6,000       6,262,560  

Series 8, 6.00%, 12/01/42

    1,000       1,090,610  

Port Authority of New York & New Jersey, Refunding ARB:

   

178th Series, AMT, 5.00%, 12/01/33

    750       829,193  

179th Series, 5.00%, 12/01/38

    575       643,868  

Consolidated, 177th Series, AMT, 4.00%, 01/15/43

    640       650,701  

Consolidated, 178th Series, AMT, 5.00%, 12/01/43

    500       547,615  

Consolidated, 195th Series, AMT, 5.00%, 04/01/36

    750       838,852  

State of New York Thruway Authority, RB, Junior Lien, Series A, 5.25%, 01/01/56

    920       1,034,531  

State of New York Thruway Authority, Refunding RB, General:

   

2nd Highway & Bridge Trust, Series A, 5.00%, 04/01/32

    2,500       2,751,525  

Series I, 5.00%, 01/01/27

    1,000       1,092,960  

Series I, 5.00%, 01/01/37

    1,760       1,907,294  

Series I, 5.00%, 01/01/42

    280       302,764  

Series J, 5.00%, 01/01/41

    2,000       2,203,720  

Series K, 5.00%, 01/01/32

    2,575       2,913,484  
 

 

 

SCHEDULES OF INVESTMENTS      41  


Schedule of Investments  (continued)

July 31, 2018

  

BlackRock New York Municipal Income Trust (BNY)

(Percentages shown are based on Net Assets)

 

Security   Par
(000)
    Value  
Transportation (continued)  

Triborough Bridge & Tunnel Authority, RB:

   

Series A, 5.00%, 11/15/42

  $ 1,000     $ 1,143,460  

Series B, 5.00%, 11/15/40

    350       398,192  

Series B, 5.00%, 11/15/45

    310       351,162  

Triborough Bridge & Tunnel Authority, Refunding RB, General:

   

CAB, Series B, 5.00%, 11/15/32

    1,700       1,034,110  

MTA Bridges & Tunnels, Series C-2, 5.00%, 11/15/42

    555       639,982  

Series A, 5.25%, 11/15/45

    590       677,963  

Series A, 5.00%, 11/15/50

    500       556,745  
   

 

 

 
      57,417,410  
Utilities — 7.2%  

City of New York Municipal Water Finance Authority, Refunding RB, Water & Sewer System, 2nd General Resolution:

   

Fiscal 2011, Series BB, 5.00%, 06/15/31

    1,000       1,058,550  

Fiscal 2015, Series HH, 5.00%, 06/15/39

    1,000       1,119,340  

Long Island Power Authority, RB, General, Electric Systems:

   

5.00%, 09/01/42

    490       554,891  

Series A (AGM), 5.00%, 05/01/21(b)

    500       543,670  

Series C (CIFG), 5.25%, 09/01/29

    2,000       2,393,440  

Long Island Power Authority, Refunding RB, Electric System:

   

Series A, 5.75%, 04/01/19(b)

    4,000       4,116,120  

Series B, 5.00%, 09/01/41

    200       224,542  

Series B, 5.00%, 09/01/46

    250       279,735  

State of New York Environmental Facilities Corp., RB, Green Bond, Series C, 5.00%, 08/15/36

    525       612,538  

State of New York Environmental Facilities Corp., Refunding RB, Revolving Funds, New York City Municipal Water, Series B, 5.00%, 06/15/36

    350       379,131  

Utility Debt Securitization Authority, Refunding RB, Restructuring, Series E, 5.00%, 12/15/41

    2,000       2,231,600  
   

 

 

 
      13,513,557  
   

 

 

 

Total Municipal Bonds in New York

 

    251,299,563  
   

 

 

 
Puerto Rico — 1.2%  
Tobacco — 1.2%  

Children’s Trust Fund, Refunding RB, Tobacco Settlement Asset-Backed Bonds, 5.63%, 05/15/43

    2,220       2,239,358  
   

 

 

 

Total Municipal Bonds — 134.5%
(Cost — $242,413,370)

 

    253,538,921  
   

 

 

 

Municipal Bonds Transferred to Tender Option Bond Trusts(d)

 

New York — 30.2%  
County/City/Special District/School District — 10.2%  

City of New York, GO:

   

Sub-Series G-1, 5.00%, 04/01/29

    4,370       4,784,232  

Sub-Series I-1, 5.00%, 03/01/36

    1,500       1,675,612  

City of New York Convention Center Development Corp., Refunding RB, Hotel Unit Fee Secured, 5.00%, 11/15/32

    1,200       1,379,688  

Hudson Yards Infrastructure Corp., RB, Fiscal 2012, Series A, 5.75%, 02/15/47(e)

    1,250       1,366,909  

New York Liberty Development Corp., ARB, 1 World Trade Center Port Authority Consolidated Bonds, 5.25%, 12/15/43

    6,495       7,110,739  

New York Liberty Development Corp., Refunding RB, 7 World Trade Center Project, Class 1, 5.00%, 09/15/40

    2,610       2,853,583  
   

 

 

 
      19,170,763  
Education — 2.1%  

City of New York Trust for Cultural Resources, Refunding RB, Wildlife Conservation Society, Series A, 5.00%, 08/01/33

    3,527       3,927,597  
   

 

 

 
Security   Par
(000)
    Value  
State — 3.6%  

City of New York Transitional Finance Authority, BARB, Fiscal 2009, Series S-3, 5.25%, 01/15/39

  $ 660     $ 670,497  

City of New York Transitional Finance Authority, RB, Future Tax Secured:

   

Sub-Series D-1, 5.00%, 11/01/38

    825       896,099  

Sub-Series F-1, 5.00%, 05/01/38

    1,424       1,624,216  

Sales Tax Asset Receivable Corp., Refunding RB, Fiscal 2015, Series A:

   

5.00%, 10/15/31

    750       860,043  

4.00%, 10/15/32

    1,000       1,079,690  

State of New York Dormitory Authority, RB, General Purpose, Series C, 5.00%, 03/15/41

    1,500       1,602,397  
   

 

 

 
      6,732,942  
Transportation — 3.3%  

Port Authority of New York & New Jersey, Refunding ARB:

   

194th Series, 5.25%, 10/15/55

    1,455       1,657,342  

Consolidated, Series 169th, 5.00%, 10/15/26

    1,500       1,624,245  

State of New York Thruway Authority, Refunding RB, Transportation, Personal Income Tax, Series A, 5.00%, 03/15/31

    1,180       1,282,990  

Triborough Bridge & Tunnel Authority, Refunding RB, General, Series A, 5.00%, 11/15/46

    1,500       1,692,428  
   

 

 

 
      6,257,005  
Utilities — 11.0%  

City of New York Municipal Water Finance Authority, Refunding RB, Water & Sewer System, 2nd General Resolution:

   

Fiscal 2011, Series HH, 5.00%, 06/15/32

    5,310       5,750,305  

Fiscal 2012, Series BB, 5.00%, 06/15/44

    3,511       3,808,796  

Series FF-2, 5.50%, 06/15/40

    810       836,409  

Utility Debt Securitization Authority, Refunding RB:

   

5.00%, 12/15/41

    6,868       7,655,573  

Restructuring, Series A, 5.00%, 12/15/35

    2,000       2,302,670  

Restructuring, Series B, 4.00%, 12/15/35

    370       392,139  
   

 

 

 
      20,745,892  
   

 

 

 

Total Municipal Bonds Transferred to Tender Option Bond Trusts — 30.2%
(Cost — $54,215,652)

 

    56,834,199  
   

 

 

 

Total Long-Term Investments — 164.7%
(Cost — $296,629,022)

 

    310,373,120  
   

 

 

 
     Shares         
Short-Term Securities — 1.1%  

BlackRock Liquidity Funds, MuniCash, Institutional Class, 0.85%(f)(g)

    2,136,343       2,136,771  
   

 

 

 

Total Short-Term Securities — 1.1%
(Cost — $2,136,512)

 

    2,136,771  
   

 

 

 

Total Investments — 165.8%
(Cost — $298,765,534)

 

    312,509,891  

Other Assets Less Liabilities — 1.3%

 

    2,403,292  

Liability for TOB Trust Certificates, Including Interest Expense and Fees Payable — (17.0)%

 

    (31,961,071

VMTP Shares, at Liquidation Value — (50.1)%

 

    (94,500,000
   

 

 

 

Net Assets Applicable to Common Shares — 100.0%

 

  $ 188,452,112  
   

 

 

 
 

 

 

42    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Schedule of Investments  (continued)

July 31, 2018

   BlackRock New York Municipal Income Trust (BNY)

 

 

(a) 

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

(b) 

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

(c) 

Zero-coupon bond.

(d) 

Represent bonds transferred to a TOB Trust in exchange of cash and residual certificates received by the Trust. These bonds serve as collateral in a secured borrowing. See Note 4 of the Notes to Financial Statements for details.

(e) 

All or a portion of security is subject to a recourse agreement. The aggregate maximum potential amount the Trust could ultimately be required to pay under the agreement, which expires on February 15, 2019, is $661,933. See Note 4 of the Notes to Financial Statements for details.

(f) 

Annualized 7-day yield as of period end.

(g) 

During the year ended July 31, 2018, investments in issuers considered to be an affiliate of the Trust for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:

 

Affiliate    Shares
Held at
07/31/17
     Net
Activity
     Shares
Held at
07/31/18
     Value at
07/31/18
     Income      Net
Realized
Gain (Loss)
 (a)
     Change in
Unrealized
Appreciation
(Depreciation)
 

BlackRock Liquidity Funds, MuniCash, Institutional Class

     2,541,341        (404,998      2,136,343      $ 2,136,771      $ 16,411      $ 45      $ 20  
           

 

 

    

 

 

    

 

 

    

 

 

 

 

  (a) 

Includes net capital gain distributions, if applicable.

 

For Trust compliance purposes, the Trust’s sector classifications refer to one or more of the sector sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by the investment adviser. These definitions may not apply for purposes of this report, which may combine such sector sub-classifications for reporting ease.

Derivative Financial Instruments Outstanding as of Period End

Futures Contracts

 

Description    Number of
Contracts
       Expiration
Date
       Notional
Amount (000)
       Value/
Unrealized
Appreciation
(Depreciation)
 

Short Contracts:

                 

10-Year U.S. Treasury Note

     29          09/19/18        $ 3,463        $ 6,438  

Long U.S. Treasury Bond

     52          09/19/18          7,434          (29,241

5-Year U.S. Treasury Note

     39          09/28/18          4,412          3,943  
                 

 

 

 
                  $ (18,860
                 

 

 

 

Derivative Financial Instruments Categorized by Risk Exposure

As of year end, the fair values of derivative financial instruments located in the Statements of Assets and Liabilities were as follows:

 

      Commodity
Contracts
     Credit
Contracts
     Equity
Contracts
     Foreign
Currency
Exchange
Contracts
     Interest
Rate
Contracts
     Other
Contracts
     Total  

Assets — Derivative Financial Instruments

                    

Futures contracts

                    

Net unrealized appreciation(a)

   $      $      $      $      $ 10,381      $      $ 10,381  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Liabilities — Derivative Financial Instruments

                    

Futures contracts

                    

Net unrealized depreciation(a)

   $      $      $      $      $ 29,241      $      $ 29,241  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

  (a) 

Includes cumulative appreciation (depreciation) on futures contracts if any, as reported in the Schedule of Investments. Only current day’s variation margin is reported within the Statements of Assets and Liabilities.

 

 

 

SCHEDULES OF INVESTMENTS      43  


Schedule of Investments  (continued)

July 31, 2018

  

BlackRock New York Municipal Income Trust (BNY)

 

For the year ended July 31, 2018, the effect of derivative financial instruments in the Statements of Operations were as follows:

 

      Commodity
Contracts
     Credit
Contracts
     Equity
Contracts
     Foreign
Currency
Exchange
Contracts
     Interest
Rate
Contracts
     Other
Contracts
     Total  

Net Realized Gain (Loss) from:

                    

Futures contracts

   $      $      $      $      $ 871,590      $      $ 871,590  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
Net Change in Unrealized Appreciation (Depreciation) on:                                                 

Futures contracts

   $      $      $      $      $ 12,815      $      $ 12,815  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Average Quarterly Balances of Outstanding Derivative Financial Instruments

 

Futures contracts:

 

Average notional value of contracts — short

   $ 16,560,482  

For more information about the Trust’s investment risks regarding derivative financial instruments, refer to the Notes to Financial Statements

Fair Value Hierarchy as of Period End

Various inputs are used in determining the fair value of investments and derivative financial instruments. For information about the Trust’s policy regarding valuation of investments and derivative financial instruments, refer to the Notes to Financial Statements.

The following tables summarize the Trust’s investments and derivative financial instruments categorized in the disclosure hierarchy:

 

      Level 1        Level 2        Level 3        Total  

Assets:

 

Investments:

 

Long-Term Investments(a)

   $        $ 310,373,120        $             —        $ 310,373,120  

Short-Term Securities

     2,136,771                            2,136,771  
  

 

 

      

 

 

      

 

 

      

 

 

 
   $ 2,136,771        $ 310,373,120        $        $ 312,509,891  
  

 

 

      

 

 

      

 

 

      

 

 

 

Derivative Financial Instruments(b)

 

Assets:

 

Interest rate contracts

   $ 10,381        $             —        $             —        $ 10,381  

Liabilities:

 

Interest rate contracts

     (29,241                          (29,241
  

 

 

      

 

 

      

 

 

      

 

 

 
   $ (18,860      $        $        $ (18,860
  

 

 

      

 

 

      

 

 

      

 

 

 

 

  (a) 

See above Schedule of Investments for values in each sector.

 
  (b) 

Derivative financial instruments are futures contracts which are valued at the unrealized appreciation (depreciation) on the instrument.

 

The Trust may hold assets and/or liabilities in which the fair value approximates the carrying amount for financial statement purposes. As of period end, such assets and/or liabilities are categorized within the disclosure hierarchy as follows:

 

      Level 1        Level 2        Level 3        Total  

Liabilities:

 

TOB Trust Certificates

   $             —        $ (31,865,024      $             —        $ (31,865,024

VMTP Shares at Liquidation Value

              (94,500,000                 (94,500,000
  

 

 

      

 

 

      

 

 

      

 

 

 
   $        $ (126,365,024      $        $ (126,365,024
  

 

 

      

 

 

      

 

 

      

 

 

 

During the year ended July 31, 2018, there were no transfers between levels.

See notes to financial statements.

 

 

44    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Statements of Assets and Liabilities

July 31, 2018

 

     BFZ     BFO     BTT     BBF     BNY  

ASSETS

 

Investments at value — unaffiliated(a)

  $ 793,962,574     $ 76,699,699     $ 2,643,834,423     $ 240,220,851     $ 310,373,120  

Investments at value — affiliated(b)

    6,191,827       4,312,529       26,803,694       569,994       2,136,771  

Cash pledged for futures contracts

    309,000                   47,850       125,250  

Receivables:

 

Investments sold

    12,361,640             395,000       1,572,108       20,000  

Interest — unaffiliated

    10,499,776       920,372       26,128,761       2,927,314       3,300,169  

Dividends — affiliated

    3,855       3,329       31,652       682       1,372  

Variation margin on futures contracts

    202                   54       50  

Prepaid expenses

    21,268       4,860       40,397       16,472       16,980  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total assets

    823,350,142       81,940,789       2,697,233,927       245,355,325       315,973,712  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

ACCRUED LIABILITIES

 

Bank overdraft

    265,599             1,105,685       91,298       148,057  

Payables:

 

Investments purchased

    19,442,773             12,650,153       1,621,169        

Income dividend distributions

    1,499,435       8,377       4,399,548       618,689       577,435  

Interest expense and fees

    638,003             1,010,711       185,299       96,047  

Investment advisory fees

    395,045       34,441       907,636       117,783       160,188  

Trustees’ and Officer’s fees

    81,767       10,935       15,545       34,801       33,854  

Variation margin on futures contracts

    33,168                   5,162       12,837  

Other accrued expenses

    161,261       77,828       515,755       117,053       128,158  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total accrued liabilities

    22,517,051       131,581       20,605,033       2,791,254       1,156,576  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

OTHER LIABILITIES

 

TOB Trust Certificates

    157,125,868             261,819,915       49,042,815       31,865,024  

RVMTP Shares, at liquidation value of $5,000,000 per share, net of deferred offering costs(c)

                749,611,379              

VMTP Shares, at liquidation value of $100,000 per share(c)

    171,300,000                         94,500,000  

VRDP Shares, at liquidation value of $100,000 per share, net of deferred offering costs(c)

                      51,712,896        
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total other liabilities

    328,425,868             1,011,431,294       100,755,711       126,365,024  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities

    350,942,919       131,581       1,032,036,327       103,546,965       127,521,600  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS

  $ 472,407,223     $ 81,809,208     $ 1,665,197,600     $ 141,808,360     $ 188,452,112  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS CONSIST OF

 

Paid-in capital(d)

  $ 446,985,849     $ 80,721,328     $ 1,671,158,205     $ 134,884,737     $ 180,169,188  

Undistributed (distributions in excess of ) net investment income

    (307,812     1,486,042       6,241,370       294,524       796,400  

Accumulated net realized gain (loss)

    5,221,315       (822,130     (37,273,116     (4,237,200     (6,238,973

Net unrealized appreciation (depreciation)

    20,507,871       423,968       25,071,141       10,866,299       13,725,497  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS

  $ 472,407,223     $ 81,809,208     $ 1,665,197,600     $ 141,808,360     $ 188,452,112  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net asset value per Common Share

  $ 14.81     $ 14.71     $ 23.62     $ 13.87     $ 14.52  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(a) Investments at cost — unaffiliated

  $ 773,476,396     $ 76,276,168     $ 2,618,765,962     $ 229,372,711     $ 296,629,022  

(b) Investments at cost — affiliated

  $ 6,191,217     $ 4,312,092     $ 26,801,014     $ 569,994     $ 2,136,512  

(c) Preferred Shares outstanding, unlimited number of shares authorized, par value $0.001 per share

    1,713             150       520       945  

(d) Common Shares outstanding, unlimited number of shares authorized, par value $0.001 per share

    31,902,885       5,562,128       70,505,571       10,226,259       12,976,074  

See notes to financial statements.

 

 

FINANCIAL STATEMENTS      45  


 

Statements of Operations

Year Ended July 31, 2018

 

     BFZ     BFO     BTT     BBF     BNY  

INVESTMENT INCOME

 

Interest — unaffiliated

  $ 32,365,637     $ 2,245,933     $ 88,949,997     $ 11,798,025     $ 12,457,300  

Dividends — affiliated

    18,572       20,584       362,061       4,667       16,411  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total investment income

    32,384,209       2,266,517       89,312,058       11,802,692       12,473,711  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EXPENSES

 

Investment advisory

    4,746,393       412,398       10,651,887       1,415,940       1,908,488  

Professional

    69,991       43,728       150,465       96,742       61,565  

Trustees and Officer

    46,068       7,931       155,815       13,936       18,519  

Accounting services

    38,010       16,070       242,986       24,673       50,264  

Transfer agent

    31,856       15,622       82,882       22,750       21,460  

Custodian

    31,057       4,149       99,732       12,315       15,411  

Printing

    12,401       9,158       23,017       9,989       10,321  

Registration

    12,372       9,418       27,083       9,457       9,514  

Rating agency

    41,752             42,744       41,540       41,621  

Miscellaneous

    33,139       17,326       147,796       12,397       17,737  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total expenses excluding interest expense, fees and amortization of offering costs

    5,063,039       535,800       11,624,407       1,659,739       2,154,900  

Interest expense, fees and amortization of offering costs(a)

    6,533,002             17,977,197       2,006,714       2,533,808  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total expenses

    11,596,041       535,800       29,601,604       3,666,453       4,688,708  

Less fees waived and/or reimbursed by the Manager

    (1,918     (2,193     (40,170     (367     (1,643
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total expenses after fees waived and/or reimbursed

    11,594,123       533,607       29,561,434       3,666,086       4,687,065  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net investment income

    20,790,086       1,732,910       59,750,624       8,136,606       7,786,646  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

REALIZED AND UNREALIZED GAIN (LOSS)

 

Net realized gain (loss) from:

 

Investments — unaffiliated

    5,246,942       (6,395     5,209,199       818,527       (39,358

Investments — affiliated

    487       91       (612     25       (797

Futures contracts

    1,806,023                   440,452       871,590  

Capital gain distributions from investment companies — affiliated

    83       342       7,351       28       842  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
    7,053,535       (5,962     5,215,938       1,259,032       832,277  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net change in unrealized appreciation (depreciation) on:

 

Investments — unaffiliated

    (23,467,912     (1,753,597     (19,486,480     (7,374,152     (7,085,633

Investments — affiliated

    585       (113     (11,820           20  

Futures contracts

    77,945                   29,920       12,815  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
    (23,389,382     (1,753,710     (19,498,300     (7,344,232     (7,072,798
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net realized and unrealized loss

    (16,335,847     (1,759,672     (14,282,362     (6,085,200     (6,240,521
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

NET INCREASE (DECREASE) IN NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS RESULTING FROM OPERATIONS

  $ 4,454,239     $ (26,762   $ 45,468,262     $ 2,051,406     $ 1,546,125  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(a) 

Related to TOB Trusts, VMTP Shares, RVMTP Shares and/or VRDP Shares.

See notes to financial statements.

 

 

46    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Statements of Changes in Net Assets

 

    BFZ           BFO  
    Year Ended July 31,           Year Ended July 31,  
     2018     2017            2018     2017  

INCREASE (DECREASE) IN NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS

 

     

OPERATIONS

 

     

Net investment income

  $ 20,790,086     $ 23,246,708       $ 1,732,910     $ 2,049,298  

Net realized gain (loss)

    7,053,535       1,860,585         (5,962     (12,932

Net change in unrealized appreciation (depreciation)

    (23,389,382     (32,786,071       (1,753,710     (2,249,356
 

 

 

   

 

 

     

 

 

   

 

 

 

Net increase (decrease) in net assets applicable to Common Shareholders resulting from operations

    4,454,239       (7,678,778       (26,762     (212,990
 

 

 

   

 

 

     

 

 

   

 

 

 

DISTRIBUTIONS TO COMMON SHAREHOLDERS(a)

 

     

From net investment income

    (21,374,933     (24,497,552       (1,846,627     (2,313,845
 

 

 

   

 

 

     

 

 

   

 

 

 

CAPITAL SHARE TRANSACTIONS

 

     

Reinvestment of common distributions

          168,908                
 

 

 

   

 

 

     

 

 

   

 

 

 

NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS

 

     

Total decrease in net assets applicable to Common Shareholders

    (16,920,694     (32,007,422       (1,873,389     (2,526,835

Beginning of year

    489,327,917       521,335,339         83,682,597       86,209,432  
 

 

 

   

 

 

     

 

 

   

 

 

 

End of year

  $ 472,407,223     $ 489,327,917       $ 81,809,208     $ 83,682,597  
 

 

 

   

 

 

     

 

 

   

 

 

 

Undistributed (distributions in excess of) net investment income, end of year

  $ (307,812   $ 440,099       $ 1,486,042     $ 1,753,909  
 

 

 

   

 

 

     

 

 

   

 

 

 

 

(a) 

Distributions for annual periods determined in accordance with U.S. federal income tax regulations.

See notes to financial statements.

 

 

FINANCIAL STATEMENTS      47  


Statements of Changes in Net Assets  (continued)

 

    BTT           BBF  
    Year Ended July 31,           Year Ended July 31,  
     2018     2017            2018     2017  

INCREASE (DECREASE) IN NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS

         

OPERATIONS

 

     

Net investment income

  $ 59,750,624     $ 63,438,956       $ 8,136,606     $ 8,544,549  

Net realized gain

    5,215,938       9,467,222         1,259,032       1,422,765  

Net change in unrealized appreciation (depreciation)

    (19,498,300     (115,077,489       (7,344,232     (11,227,481
 

 

 

   

 

 

     

 

 

   

 

 

 

Net increase (decrease) in net assets applicable to Common Shareholders resulting from operations

    45,468,262       (42,171,311       2,051,406       (1,260,167
 

 

 

   

 

 

     

 

 

   

 

 

 

DISTRIBUTIONS TO COMMON SHAREHOLDERS(a)

 

     

From net investment income

    (60,111,851     (67,107,203       (8,338,505     (8,870,587
 

 

 

   

 

 

     

 

 

   

 

 

 

CAPITAL SHARE TRANSACTIONS

 

     

Reinvestment of common distributions

                  105,235       155,550  
 

 

 

   

 

 

     

 

 

   

 

 

 

NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS

 

     

Total decrease in net assets applicable to Common Shareholders

    (14,643,589     (109,278,514       (6,181,864     (9,975,204

Beginning of year

    1,679,841,189       1,789,119,703         147,990,224       157,965,428  
 

 

 

   

 

 

     

 

 

   

 

 

 

End of year

  $ 1,665,197,600     $ 1,679,841,189       $ 141,808,360     $ 147,990,224  
 

 

 

   

 

 

     

 

 

   

 

 

 

Undistributed net investment income, end of year

  $ 6,241,370     $ 6,565,561       $ 294,524     $ 719,665  
 

 

 

   

 

 

     

 

 

   

 

 

 

 

(a) 

Distributions for annual periods determined in accordance with U.S. federal income tax regulations.

See notes to financial statements.

 

 

48    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Statements of Changes in Net Assets  (continued)

 

    BNY  
    Year Ended July 31,  
     2018     2017  

INCREASE (DECREASE) IN NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS

   

OPERATIONS

 

Net investment income

  $ 7,786,646     $ 8,672,909  

Net realized gain

    832,277       1,528,894  

Net change in unrealized appreciation (depreciation)

    (7,072,798     (12,496,534
 

 

 

   

 

 

 

Net increase (decrease) in net assets applicable to Common Shareholders resulting from operations

    1,546,125       (2,294,731
 

 

 

   

 

 

 

DISTRIBUTIONS TO COMMON SHAREHOLDERS(a)

 

From net investment income

    (8,310,969     (9,330,442
 

 

 

   

 

 

 

CAPITAL SHARE TRANSACTIONS

 

Reinvestment of common distributions

    188,434       239,234  
 

 

 

   

 

 

 

NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS

 

Total decrease in net assets applicable to Common Shareholders

    (6,576,410     (11,385,939

Beginning of year

    195,028,522       206,414,461  
 

 

 

   

 

 

 

End of year

  $ 188,452,112     $ 195,028,522  
 

 

 

   

 

 

 

Undistributed net investment income, end of year

  $ 796,400     $ 1,360,372  
 

 

 

   

 

 

 

 

(a) 

Distributions for annual periods determined in accordance with U.S. federal income tax regulations.

See notes to financial statements.

 

 

FINANCIAL STATEMENTS      49  


 

Statements of Cash Flows

Year Ended July 31, 2018

 

     BFZ     BTT     BBF     BNY  

CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES

 

Net increase in net assets resulting from operations

  $ 4,454,239     $ 45,468,262     $ 2,051,406     $ 1,546,125  

Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by (used for) operating activities:

       

Proceeds from sales of long-term investments

    359,910,191       602,143,887       78,933,663       28,678,651  

Purchases of long-term investments

    (349,086,567     (713,468,970     (78,143,823     (30,876,805

Net proceeds from sales (purchases) of short-term securities

    (5,938,538     20,941,746       (569,969     404,810  

Amortization of premium and accretion of discount on investments and other fees

    6,299,610       15,760,731       708,141       1,808,985  

Net realized (gain) loss on investments

    (5,247,429     (5,208,587     (818,552     40,155  

Net unrealized depreciation on investments

    23,467,327       19,498,300       7,374,152       7,085,613  
(Increase) Decrease in Assets:  

Receivables:

       

Interest — unaffiliated

    704,885       (1,906,990     20,748       (195,252

Dividends — affiliated

    (1,633     2,066       (640     615  

Variation margin on futures contracts

    27,501             5,665       13,794  

Prepaid expenses

    (267     (2,368     (546     (550
Increase (Decrease) in Liabilities:  

Payables:

 

Investment advisory fees

    (409,285     (821,865     (119,569     (161,413

Interest expense and fees

    142,731       511,070       74,330       32,323  

Trustees’ and Officer’s

    (180     (6,229     14       66  

Variation margin on futures contracts

    33,168             5,162       12,837  

Other accrued expenses

    (30,565     (25,596     (37,317     (24,198
 

 

 

   

 

 

   

 

 

   

 

 

 

Net cash provided by (used for) operating activities

    34,325,188       (17,114,543     9,482,865       8,365,756  
 

 

 

   

 

 

   

 

 

   

 

 

 

CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES

 

Proceeds from TOB Trust Certificates

    39,277,581       77,704,999       8,670,005       2,748,595  

Repayments of TOB Trust Certificates

    (52,014,745           (9,654,788     (2,930,770

Proceeds from Loan for TOB Trust Certificates

    882,588             1,949,896       799,386  

Repayments of Loan for TOB Trust Certificates

    (882,588           (1,949,896     (799,386

Cash dividends paid to Common Shareholders

    (21,773,720     (60,774,603     (8,354,159     (8,322,914

Increase (decrease) in bank overdraft

    8,696       152,877       (208,035     6,333  

Amortization of deferred offering costs

          31,270       6,112        
 

 

 

   

 

 

   

 

 

   

 

 

 

Net cash provided by (used for) financing activities

    (34,502,188     17,114,543       (9,540,865     (8,498,756
 

 

 

   

 

 

   

 

 

   

 

 

 

CASH

 

Net increase (decrease) in restricted and unrestricted cash

    (177,000           (58,000     (133,000

Restricted and unrestricted cash at beginning of year

    486,000             105,850       258,250  
 

 

 

   

 

 

   

 

 

   

 

 

 

Restricted and unrestricted cash at end of year

  $ 309,000           $ 47,850     $ 125,250  
 

 

 

   

 

 

   

 

 

   

 

 

 

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

 

Cash paid during the year for interest expense

  $ 6,390,271     $ 17,434,857     $ 1,926,272     $ 2,501,485  
 

 

 

   

 

 

   

 

 

   

 

 

 

NON-CASH FINANCING ACTIVITIES

 

Capital shares issued in reinvestment of distributions paid to Common Shareholders

                105,235       188,434  
 

 

 

   

 

 

   

 

 

   

 

 

 

RECONCILIATION OF RESTRICTED AND UNRESTRICTED CASH AT THE END OF YEAR TO THE STATEMENTS OF ASSETS AND LIABILITIES

       

Cash pledged:

       

Futures contracts

  $ 309,000           $ 47,850     $ 125,250  
 

 

 

   

 

 

   

 

 

   

 

 

 

RECONCILIATION OF RESTRICTED AND UNRESTRICTED CASH AT THE BEGINNING OF YEAR TO THE STATEMENTS OF ASSETS AND LIABILITIES

       

Cash pledged:

       

Futures contracts

  $ 486,000           $ 105,850     $ 258,250  
 

 

 

   

 

 

   

 

 

   

 

 

 

See notes to financial statements.

 

 

50    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Financial Highlights

(For a share outstanding throughout each period)

 

    BFZ  
    Year Ended July 31,  
     2018      2017      2016      2015      2014  

Net asset value, beginning of year

  $ 15.34      $ 16.35      $ 15.84      $ 15.83      $ 14.50  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net investment income(a)

    0.65        0.73        0.83        0.83        0.87  

Net realized and unrealized gain (loss)

    (0.51      (0.97      0.54        0.05        1.39  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net increase (decrease) from investment operations

    0.14        (0.24      1.37        0.88        2.26  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Distributions to Common Shareholders from net investment income(b)

    (0.67      (0.77      (0.86      (0.87      (0.93
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net asset value, end of year

  $ 14.81      $ 15.34      $ 16.35      $ 15.84      $ 15.83  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Market price, end of year

  $ 12.75      $ 14.71      $ 16.76      $ 14.65      $ 14.41  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total Return Applicable to Common Shareholders(c)

 

Based on net asset value

    1.41      (1.22 )%       8.92      5.96      16.48
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Based on market price

    (8.95 )%       (7.59 )%       20.72      7.66      12.80
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Ratios to Average Net Assets Applicable to Common Shareholders

 

Total expenses

    2.41      2.14      1.68      1.53      1.59
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total expenses after fees waived and paid indirectly

    2.41      2.14      1.68      1.53      1.59
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total expenses after fees waived and paid indirectly and excluding interest expense, fees and amortization of offering costs(d)

    1.05      1.07      1.04      1.00      1.03
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net investment income to Common Shareholders

    4.33      4.73      5.17      5.20      5.78
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Supplemental Data

 

Net assets applicable to Common Shareholders, end of year (000)

  $ 472,407      $ 489,328      $ 521,335      $ 504,967      $ 504,531  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

VMTP Shares outstanding at $100,000 liquidation value, end of year (000)

  $ 171,300      $ 171,300      $ 171,300      $ 171,300      $ 171,300  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Asset coverage per VMTP Shares at $100,000 liquidation value, end of year

  $ 375,778      $ 385,656      $ 404,341      $ 394,785      $ 394,531  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Borrowings outstanding, end of year (000)

  $ 157,126      $ 169,863      $ 183,691      $ 155,533      $ 106,698  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Portfolio turnover rate

    45      38      30      37      25
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

(a) 

Based on average Common Shares outstanding.

(b) 

Distributions for annual periods determined in accordance with U.S. federal income tax regulations.

(c) 

Total returns based on market price, which can be significantly greater or less than the net asset value, may result in substantially different returns. Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions at actual reinvestment prices.

(d) 

Interest expense, fees and amortization of offering costs related to TOBs and/or VMTP Shares. See Note 4 and Note 10 of the Notes to Financial Statements for details.

See notes to financial statements.

 

 

FINANCIAL HIGHLIGHTS      51  


Financial Highlights  (continued)

(For a share outstanding throughout each period)

 

    BFO  
    Year Ended July 31,  
     2018     2017     2016     2015     2014  

Net asset value, beginning of year

  $ 15.05     $ 15.50     $ 15.37     $ 15.42     $ 15.31  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net investment income(a)

    0.31       0.37       0.46       0.42       0.47  

Net realized and unrealized gain (loss)

    (0.32     (0.40     0.05       (0.03     0.25  

Distributions to AMPS Shareholders from net investment income

                      (0.00 )(b)      (0.00 )(b) 
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net increase (decrease) from investment operations

    (0.01     (0.03     0.51       0.39       0.72  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Distributions to Common Shareholders from net investment income(c)

    (0.33     (0.42     (0.38     (0.44     (0.61
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net asset value, end of year

  $ 14.71     $ 15.05     $ 15.50     $ 15.37     $ 15.42  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Market price, end of year

  $ 14.21     $ 15.05     $ 15.21     $ 14.82     $ 15.16  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Return Applicable to Common Shareholders(d)

 

Based on net asset value

    (0.02 )%      (0.20 )%      3.41     2.59     4.84
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Based on market price

    (3.42 )%      1.70     5.24     0.62     4.36
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Ratios to Average Net Assets Applicable to Common Shareholders

 

Total expenses

    0.65 %(e)      0.64     0.64     0.68 %(f)      0.74 %(f) 
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total expenses after fees waived and paid indirectly

    0.65 %(e)      0.64     0.64     0.68 %(f)      0.74 %(f) 
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total expenses after fees waived and paid indirectly and excluding interest expense, fees and amortization of offering costs(g)

    0.65 %(e)      0.64     0.64     0.68 %(f)(h)      0.74 %(f)(h) 
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net investment income

    2.10 %(e)      2.43     3.00     2.69 %(f)      3.05 %(f) 
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Distributions to AMPS Shareholders

                0.00     0.01
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net investment income to Common Shareholders

    2.10 %(e)      2.43     3.00     2.69     3.04
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Supplemental Data

 

Net assets applicable to Common Shareholders, end of year (000)

  $ 81,809     $ 83,683     $ 86,209     $ 85,510     $ 85,748  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

AMPS outstanding at $25,000 liquidation preference, end of year (000)

  $     $     $     $     $ 625  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Asset coverage per AMPS at $25,000 liquidation preference, end of year

  $     $     $     $     $ 3,454,938  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Borrowings outstanding, end of year (000)

  $     $     $     $ 134     $ 190  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Portfolio turnover rate

    16         7     14     1
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(a) 

Based on average Common Shares outstanding.

(b) 

Amount is greater than $(0.005) per share.

(c) 

Distributions for annual periods determined in accordance with U.S. federal income tax regulations.

(d) 

Total returns based on market price, which can be significantly greater or less than the net asset value, may result in substantially different returns. Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions at actual reinvestment prices.

(e) 

Excludes 0.01% of expenses incurred indirectly as a result of investments in underlying funds.

(f) 

Does not reflect the effect of distributions to Auction Market Preferred Shares (“AMPS”) Shareholders.

(g) 

Interest expense and fees related to TOB Trusts. See Note 4 of the Notes to Financial Statements for details.

(h) 

The total expense ratio after fees waived and paid indirectly and excluding interest expense, fees, amortization of offering costs, liquidity and remarketing fees as follows:

 

    Year Ended July 31,    

 

 
     2015            2014         

Expense ratios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . .

    0.67       0.73  
 

 

 

     

 

 

   

See notes to financial statements.

 

 

52    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Financial Highlights  (continued)

(For a share outstanding throughout each period)

 

    BTT  
    Year Ended July 31,  
     2018      2017     2016      2015      2014  

Net asset value, beginning of year

  $ 23.83      $ 25.38     $ 22.73      $ 21.99      $ 18.75  
 

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Net investment income(a)

    0.85        0.90       1.03        1.09        1.12  

Net realized and unrealized gain (loss)

    (0.21      (1.50     2.58        0.61        3.23  
 

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Net increase (decrease) from investment operations

    0.64        (0.60     3.61        1.70        4.35  
 

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 
Distributions to Common Shareholders:(b)                                 

From net investment income

    (0.85      (0.95     (0.96      (0.96      (1.09

From return of capital

                               (0.02
 

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Total distributions to Common Shareholders

    (0.85      (0.95     (0.96      (0.96      (1.11
 

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Net asset value, end of year

  $ 23.62      $ 23.83     $ 25.38      $ 22.73      $ 21.99  
 

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Market price, end of year

  $ 21.43      $ 23.14     $ 24.24      $ 20.80      $ 19.57  
 

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Total Return Applicable to Common Shareholders(c)

 

Based on net asset value

    3.04      (2.14 )%      16.57      8.32      24.50
 

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Based on market price

    (3.73 )%       (0.51 )%      21.67      11.37      12.78
 

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Ratios to Average Net Assets Applicable to Common Shareholders

 

Total expenses

    1.76      1.49 %(d)      1.17      1.14      1.22
 

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Total expenses after fees waived and paid indirectly

    1.76      1.49 %(d)      1.09      1.06      1.21
 

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Total expenses after fees waived and paid indirectly and excluding interest expense, fees and amortization of offering costs(e)

    0.69      0.68 %(d)      0.61      0.62      0.72
 

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Net investment income to Common Shareholders

    3.55      3.80 %(d)      4.30      4.77      5.61
 

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Supplemental Data

 

Net assets applicable to Common Shareholders, end of year (000)

  $ 1,665,198      $ 1,679,841     $ 1,789,120      $ 1,602,414      $ 1,550,376  
 

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

RVMTP Shares outstanding at $5,000,000 liquidation value, end of year (000)

  $ 750,000      $ 750,000     $ 750,000      $ 750,000      $ 750,000  
 

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Asset coverage per RVMTP Shares at $5,000,000 liquidation value, end of year

  $ 16,101,317      $ 16,198,941     $ 16,927,465      $ 15,682,760      $ 15,335,837  
 

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Borrowings outstanding, end of year (000)

  $ 261,820      $ 184,115     $ 184,115      $ 184,120      $ 184,120  
 

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Portfolio turnover rate

    23      32     42      12      6
 

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

 

(a) 

Based on average Common Shares outstanding.

(b) 

Distributions for annual periods determined in accordance with U.S. federal income tax regulations.

(c) 

Total returns based on market price, which can be significantly greater or less than the net asset value, may result in substantially different returns. Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions at actual reinvestment prices.

(d) 

Excludes 0.01% of expenses incurred indirectly as a result of investments in underlying funds.

(e) 

Interest expense, fees and amortization of offering costs related to TOB Trusts and/or RVMTP Shares. See Note 4 and Note 10 of the Notes to Financial Statements for details.

See notes to financial statements.

 

 

FINANCIAL HIGHLIGHTS      53  


Financial Highlights  (continued)

(For a share outstanding throughout each period)

 

    BBF  
    Year Ended July 31,  
     2018      2017      2016     2015     2014  

Net asset value, beginning of year

  $ 14.48      $ 15.47      $ 15.14     $ 15.09     $ 13.89  
 

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

Net investment income(a)

    0.80        0.84        0.84       0.87       0.87  

Net realized and unrealized gain (loss)

    (0.59      (0.96      0.36       0.05       1.20  
 

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

Net increase (decrease) from investment operations

    0.21        (0.12      1.20       0.92       2.07  
 

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

Distributions to Common Shareholders from net investment income(b)

    (0.82      (0.87      (0.87     (0.87     (0.87
 

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

Net asset value, end of year

  $ 13.87      $ 14.48      $ 15.47     $ 15.14     $ 15.09  
 

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

Market price, end of year

  $ 13.37      $ 15.27      $ 16.00     $ 13.44     $ 13.48  
 

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

Total Return Applicable to Common Shareholders(c)

 

Based on net asset value

    1.65      (0.65 )%       8.40     6.76     16.06
 

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

Based on market price

    (7.08 )%       1.30      26.29     6.09     15.49
 

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

Ratios to Average Net Assets Applicable to Common Shareholders

 

Total expenses

    2.53      2.16      2.01 %(d)      1.76     1.85
 

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

Total expenses after fees waived and paid indirectly

    2.53      2.16      2.01 %(d)      1.76     1.85
 

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

Total expenses after fees waived and paid indirectly and excluding interest expense, fees and amortization of offering costs(e)

    1.15      1.13      1.45 %(d)(f)      1.50 %(f)      1.56 %(f) 
 

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

Net investment income to Common Shareholders

    5.63      5.72      5.50     5.65     6.09
 

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

Supplemental Data

 

Net assets applicable to Common Shareholders, end of year (000)

  $ 141,808      $ 147,990      $ 157,965     $ 101,509     $ 101,163  
 

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

VRDP Shares outstanding at $100,000 liquidation value, end of year (000)

  $ 52,000      $ 52,000      $ 52,000     $ 34,200     $ 34,200  
 

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

Asset coverage per VRDP Shares at $100,000 liquidation value, end of year

  $ 372,708      $ 384,597      $ 403,780     $ 396,809     $ 395,798  
 

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

Borrowings outstanding, end of year (000)

  $ 49,043      $ 50,028      $ 47,193     $ 29,682     $ 29,682  
 

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

Portfolio turnover rate

    31      39      17     11     22
 

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

 

(a) 

Based on average Common Shares outstanding.

(b) 

Distributions for annual periods determined in accordance with U.S. federal income tax regulations.

(c) 

Total returns based on market price, which can be significantly greater or less than the net asset value, may result in substantially different returns. Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions at actual reinvestment prices.

(d) 

Includes reorganization costs associated with the Trust’s reorganization in 2016. Without these costs, total expenses, total expenses after fees waived and/or paid indirectly and total expenses after fees waived and/or paid indirectly and excluding interest expense, fees and amortization of offering costs would have been 1.83%, 1.83% and 1.26%, respectively, for the year ended July 31, 2016.

(e) 

Interest expense, fees and amortization of offering costs related to TOBs and/or VRDP Shares. See Note 4 and Note 10 of the Notes to Financial Statements for details.

(f) 

The total expense ratio after fees waived and paid indirectly and excluding interest expense, fees, amortization of offering costs, liquidity and remarketing fees were as follows:

 

    Year Ended July 31,  
     2016            2015            2014         

Expense ratios

    1.38       1.17       1.19  
 

 

 

     

 

 

     

 

 

   

See notes to financial statements.

 

 

54    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Financial Highlights  (continued)

(For a share outstanding throughout each period)

 

    BNY  
    Year Ended July 31,  
     2018      2017      2016      2015      2014  

Net asset value, beginning of year

  $ 15.04      $ 15.94      $ 14.97      $ 14.68      $ 13.47  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net investment income(a)

    0.60        0.67        0.75        0.79        0.81  

Net realized and unrealized gain (loss)

    (0.48      (0.85      1.02        0.33        1.23  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net increase (decrease) from investment operations

    0.12        (0.18      1.77        1.12        2.04  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Distributions to Common Shareholders from net investment income(b)

    (0.64      (0.72      (0.80      (0.83      (0.83
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net asset value, end of year

  $ 14.52      $ 15.04      $ 15.94      $ 14.97      $ 14.68  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Market price, end of year

  $ 12.53      $ 15.37      $ 16.71      $ 14.54      $ 13.79  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total Return Applicable to Common Shareholders(c)

 

Based on net asset value

    1.13      (0.93 )%       12.13      8.00      15.98
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Based on market price

    (14.61 )%       (3.43 )%       21.02      11.67      11.51
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Ratios to Average Net Assets Applicable to Common Shareholders

 

Total expenses

    2.45      2.15      1.75      1.73      1.82
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total expenses after fees waived and paid indirectly

    2.45      2.14      1.75      1.73      1.82
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total expenses after fees waived and paid indirectly and excluding interest expense, fees and amortization of offering costs(d)

    1.12      1.12      1.11      1.12      1.13
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net investment income to Common Shareholders

    4.06      4.45      4.89      5.24      5.89
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Supplemental Data

 

Net assets applicable to Common Shareholders, end of year (000)

  $ 188,452      $ 195,029      $ 206,414      $ 193,299      $ 189,548  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

VMTP Shares outstanding at $100,000 liquidation value, end of year (000)

  $ 94,500      $ 94,500      $ 94,500      $ 94,500      $ 94,500  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Asset coverage per VMTP Shares at $100,000 liquidation value, end of year

  $ 299,420      $ 306,379      $ 318,428      $ 304,549      $ 300,580  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Borrowings outstanding, end of year (000)

  $ 31,865      $ 32,047      $ 31,780      $ 28,961      $ 28,461  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Portfolio turnover rate

    9      16      14      11      26
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

(a) 

Based on average Common Shares outstanding.

(b) 

Distributions for annual periods determined in accordance with U.S. federal income tax regulations.

(c) 

Total returns based on market price, which can be significantly greater or less than the net asset value, may result in substantially different returns. Where applicable, excludes the effects of any sales charges and assumes the reinvestment of distributions at actual reinvestment prices.

(d) 

Interest expense, fees and amortization of offering costs related to TOB Trusts and/or VMTP Shares. See Note 4 and Note 10 of the Notes to Financial Statements for details.

See notes to financial statements.

 

 

FINANCIAL HIGHLIGHTS      55  


Notes to Financial Statements

 

1.

ORGANIZATION

The following are registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as closed-end management investment companies and are referred to herein collectively as the “Trusts”, or individually as a “Trust”:

 

Trust Name   Herein Referred To As   
Organized
   Diversification
Classification

BlackRock California Municipal Income Trust

  BFZ    Delaware    Diversified

BlackRock Florida Municipal 2020 Term Trust

  BFO    Delaware    Non-diversified

BlackRock Municipal 2030 Target Term Trust

  BTT    Delaware    Diversified

BlackRock Municipal Income Investment Trust

  BBF    Delaware    Diversified

BlackRock New York Municipal Income Trust

  BNY    Delaware    Diversified

The Board of Trustees of the Trusts are collectively referred to throughout this report as the “Board of Trustees” or the “Board,” and the trustees thereof are collectively referred to throughout this report as “Trustees”. The Trusts determine and make available for publication the NAVs of their Common Shares on a daily basis. On June 6, 2018, the Board approved a proposal, effective December 31, 2018, to change BFO’s fiscal year-end from July 31 to December 31.

The Trusts, together with certain other registered investment companies advised by BlackRock Advisors, LLC (the “Manager”) or its affiliates, are included in a complex of closed-end funds referred to as the Closed-End Complex.

 

2.

SIGNIFICANT ACCOUNTING POLICIES

The financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”), which may require management to make estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. Each Trust is considered an investment company under U.S. GAAP and follows the accounting and reporting guidance applicable to investment companies. Below is a summary of significant accounting policies:

Investment Transactions and Income Recognition: For financial reporting purposes, investment transactions are recorded on the dates the transactions are entered into (the “trade dates”). Realized gains and losses on investment transactions are determined on the identified cost basis. Dividend income and is recorded on the ex-dividend date. Interest income, including amortization and accretion of premiums and discounts on debt securities, is recognized on an accrual basis.

Segregation and Collateralization: In cases where a Trust enters into certain investments (e.g., futures contracts) or certain borrowings (e.g., TOB Trust transactions) that would be treated as “senior securities” for 1940 Act purposes, a Trust may segregate or designate on its books and records cash or liquid assets having a market value at least equal to the amount of its future obligations under such investments or borrowings. Doing so allows the investment or borrowing to be excluded from treatment as a “senior security.” Furthermore, if required by an exchange or counterparty agreement, the Trusts may be required to deliver/deposit cash and/or securities to/with an exchange, or broker-dealer or custodian as collateral for certain investments or obligations.

Distributions: Distributions from net investment income are declared monthly and paid monthly. Distributions of capital gains are recorded on the ex-dividend date and made at least annually. The character and timing of distributions are determined in accordance with U.S. federal income tax regulations, which may differ from U.S. GAAP. Distributions to Preferred Shareholders are accrued and determined as described in Note 10.

Deferred Compensation Plan: Under the Deferred Compensation Plan (the “Plan”) approved by each Trust’s Board, the independent Trustees (“Independent Trustees”) may defer a portion of their annual complex-wide compensation. Deferred amounts earn an approximate return as though equivalent dollar amounts had been invested in common shares of certain other BlackRock Closed-End Funds selected by the Independent Trustees. This has the same economic effect for the Independent Trustees as if the Independent Trustees had invested the deferred amounts directly in certain other BlackRock Closed-End Funds.

The Plan is not funded and obligations thereunder represent general unsecured claims against the general assets of each Trust, if applicable. Deferred compensation liabilities are included in the Trustees’ and Officer’s fees payable in the Statements of Assets and Liabilities and will remain as a liability of the Trusts until such amounts are distributed in accordance with the Plan.

Recent Accounting Standards: In March 2017, the Financial Accounting Standards Board issued Accounting Standards Update “Premium Amortization of Purchased Callable Debt Securities” which amends the amortization period for certain purchased callable debt securities. Under the new guidance, the premium amortization of purchased callable debt securities that have explicit, non-contingent call features and are callable at fixed prices will be amortized to the earliest call date. The guidance will be applied on a modified retrospective basis and is effective for fiscal years, and their interim periods, beginning after December 15, 2018. Management is currently evaluating the impact of this guidance to the Trusts.

Indemnifications: In the normal course of business, a Trust enters into contracts that contain a variety of representations that provide general indemnification. A Trust’s maximum exposure under these arrangements is unknown because it involves future potential claims against a Trust, which cannot be predicted with any certainty.

Other: Expenses directly related to a Trust are charged to that Trust. Other operating expenses shared by several funds, including other funds managed by the Manager, are prorated among those funds on the basis of relative net assets or other appropriate methods.

 

 

56    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Notes to Financial Statements  (continued)

 

 

3.

INVESTMENT VALUATION AND FAIR VALUE MEASUREMENTS

Investment Valuation Policies: The Trusts’ investments are valued at fair value (also referred to as “market value” within the financial statements) as of the close of trading on the New York Stock Exchange (“NYSE”) (generally 4:00 p.m., Eastern time). U.S. GAAP defines fair value as the price the Trusts would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. The Trusts determine the fair values of their financial instruments using various independent dealers or pricing services under policies approved by the Board. The BlackRock Global Valuation Methodologies Committee (the “Global Valuation Committee”) is the committee formed by management to develop global pricing policies and procedures and to oversee the pricing function for all financial instruments.

Fair Value Inputs and Methodologies: The following methods and inputs are used to establish the fair value of each Trust’s assets and liabilities:

 

   

Municipal investments (including commitments to purchase such investments on a “when-issued” basis) are valued on the basis of prices provided by dealers or pricing services. In determining the value of a particular investment, pricing services may use certain information with respect to transactions in such investments, quotations from dealers, pricing matrixes, market transactions in comparable investments and information with respect to various relationships between investments.

 

   

Investments in open-end U.S. mutual funds are valued at NAV each business day.

 

   

Futures contracts traded on exchanges are valued at their last sale price.

If events (e.g., a company announcement, market volatility or a natural disaster) occur that are expected to materially affect the value of such investments, or in the event that the application of these methods of valuation results in a price for an investment that is deemed not to be representative of the market value of such investment, or if a price is not available, the investment will be valued by the Global Valuation Committee, or its delegate, in accordance with a policy approved by the Board as reflecting fair value (“Fair Valued Investments”). The fair valuation approaches that may be used by the Global Valuation Committee will include market approach, income approach and cost approach. Valuation techniques such as discounted cash flow, use of market comparables and matrix pricing are types of valuation approaches and are typically used in determining fair value. When determining the price for Fair Valued Investments, the Global Valuation Committee, or its delegate, seeks to determine the price that each Trust might reasonably expect to receive or pay from the current sale or purchase of that asset or liability in an arm’s-length transaction. Fair value determinations shall be based upon all available factors that the Global Valuation Committee, or its delegate, deems relevant and consistent with the principles of fair value measurement. The pricing of all Fair Valued Investments is subsequently reported to the Board or a committee thereof on a quarterly basis.

Fair Value Hierarchy: Various inputs are used in determining the fair value of investments and derivative financial instruments. These inputs to valuation techniques are categorized into a fair value hierarchy consisting of three broad levels for financial statement purposes as follows:

 

   

Level 1 — Unadjusted price quotations in active markets/exchanges for identical assets or liabilities that each Trust has the ability to access

 

   

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

 

   

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

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the fair value hierarchy classification is determined based on the lowest level input that is significant to the fair value measurement in its entirety. Investments classified within Level 3 have significant unobservable inputs used by the Global Valuation Committee in determining the price for Fair Valued Investments. Level 3 investments include equity or debt issued by privately held companies or funds. There may not be a secondary market, and/or there are a limited number of investors. Level 3 investments may also be adjusted to reflect illiquidity and/or non-transferability, with the amount of such discount estimated by the Global Valuation Committee in the absence of market information.

Changes in valuation techniques may result in transfers into or out of an assigned level within the hierarchy. In accordance with each Trust’s policy, transfers between different levels of the fair value hierarchy are deemed to have occurred as of the beginning of the reporting period. The categorization of a value determined for investments and derivative financial instruments is based on the pricing transparency of the investments and derivative financial instruments and is not necessarily an indication of the risks associated with investing in those securities.

 

4.

SECURITIES AND OTHER INVESTMENTS

Zero-Coupon Bonds: Zero-coupon bonds are normally issued at a significant discount from face value and do not provide for periodic interest payments. These bonds may experience greater volatility in market value than other debt obligations of similar maturity which provide for regular interest payments.

Forward Commitments and When-Issued Delayed Delivery Securities: Certain Trusts may purchase securities on a when-issued basis and may purchase or sell securities on a forward commitment basis. Settlement of such transactions normally occurs within a month or more after the purchase or sale commitment is made. A Trust may purchase securities under such conditions with the intention of actually acquiring them, but may enter into a separate agreement to sell the securities before the settlement date. Since the value of securities purchased may fluctuate prior to settlement, a Trust may be required to pay more at settlement than the security is worth. In addition, a Trust is not entitled to any of the interest earned prior to settlement. When purchasing a security on a delayed delivery basis, a Trust assumes the rights and risks of ownership of the security, including the risk of price and yield fluctuations. In the event of default by the counterparty, a Trust’s maximum amount of loss is the unrealized appreciation of unsettled when-issued transactions.

 

 

NOTES TO FINANCIAL STATEMENTS      57  


Notes to Financial Statements  (continued)

 

Municipal Bonds Transferred to TOB Trusts: Certain Trusts leverage their assets through the use of “TOB Trust” transactions. The Trusts transfer municipal bonds into a special purpose trust (a “TOB Trust”). A TOB Trust issues two classes of beneficial interests: short-term floating rate interests (“TOB Trust Certificates”), which are sold to third party investors, and residual inverse floating rate interests (“TOB Residuals”), which are issued to the participating trusts that contributed the municipal bonds to the TOB Trust. The TOB Trust Certificates have interest rates that reset weekly and their holders have the option to tender such certificates to the TOB Trust for redemption at par and any accrued interest at each reset date. The TOB Residuals held by a Trust provide the Trust with the right to cause the holders of a proportional share of the TOB Trust Certificates to tender their certificates to the TOB Trust at par plus accrued interest. The Trusts may withdraw a corresponding share of the municipal bonds from the TOB Trust. Other trusts managed by the investment adviser may also contribute municipal bonds to a TOB Trust into which a Trust has contributed bonds. If multiple BlackRock-advised funds participate in the same TOB Trust, the economic rights and obligations under the TOB Residuals will be shared among the trusts ratably in proportion to their participation in the TOB Trust.

TOB Trusts are supported by a liquidity facility provided by a third party bank or other financial institution (the “Liquidity Provider”) that allows the holders of the TOB Trust Certificates to tender their certificates in exchange for payment of par plus accrued interest on any business day. The tendered TOB Trust Certificates are remarketed by a Remarketing Agent. In the event of a failed remarketing, the TOB Trust may draw upon a loan from the Liquidity Provider to purchase the tendered TOB Trust Certificates. Any loans made by the Liquidity Provider will be secured by the purchased TOB Trust Certificates held by the TOB Trust and will be subject to an increased interest rate based on number of days the loan is outstanding.

The TOB Trust may be collapsed without the consent of a Trust, upon the occurrence of a termination event, as defined in the TOB Trust agreement. Upon the occurrence of a termination event, a TOB Trust would be liquidated with the proceeds applied first to any accrued fees owed to the trustee of the TOB Trust, the Remarketing Agent and the Liquidity Provider. Upon certain termination events, TOB Trust Certificates holders will be paid before the TOB Residuals holders (i.e., the Trusts) whereas in other termination events, TOB Trust Certificates holders and TOB Residuals holders will be paid pro rata.

While a Trust’s investment policies and restrictions expressly permit investments in inverse floating rate securities, such as TOB Residuals, they restrict the ability of a Trust to borrow money for purposes of making investments. Each Trust’s transfer of the municipal bonds to a TOB Trust is considered a secured borrowing for financial reporting purposes. The cash received by the TOB Trust from the sale of the TOB Trust Certificates, less certain transaction expenses, is paid to a Trust. A Trust typically invests the cash received in additional municipal bonds.

Accounting for TOB Trusts: The municipal bonds deposited into a TOB Trust are presented in a Trust’s Schedule of Investments and the TOB Trust Certificates are shown in Other Liabilities in the Statements of Assets and Liabilities. Any loans drawn by the TOB Trust pursuant to the liquidity facility to purchase tendered TOB Trust Certificates are shown as Loan for TOB Trust Certificates. The carrying amount of a Trust’s payable to the holder of the TOB Trust Certificates, as reported in the Statements of Assets and Liabilities as TOB Trust Certificates, approximates its fair value.

Interest income, including amortization and accretion of premiums and discounts, from the underlying municipal bonds is recorded by a Trust on an accrual basis. Interest expense incurred on the TOB Trust transaction and other expenses related to remarketing, administration, trustee, liquidity and other services to a TOB Trust are shown as interest expense, fees and amortization of offering costs in the Statements of Operations. Fees paid upon creation of the TOB Trust are recorded as debt issuance costs and are amortized to interest expense, fees and amortization of offering costs in the Statements of Operations to the expected maturity of the TOB Trust. In connection with the restructurings of the TOB Trusts to non-bank sponsored TOB Trusts, a Trust incurred non-recurring, legal and restructuring fees, which are recorded as interest expense, fees and amortization of deferred offering costs in the Statements of Operations. Amounts recorded within interest expense, fees and amortization of offering costs in the Statements of Operations are:

 

     Interest
Expense
     Liquidity
Fees
     Other
Expenses
     Total  

BFZ

  $ 1,968,828      $ 790,366      $ 228,414      $ 2,987,608  

BTT

    2,782,957        914,627        759,207        4,456,791  

BBF

    620,406        227,454        85,205        933,065  

BNY

    378,138        156,567        41,700        576,405  

For the year ended July 31, 2018, the following table is a summary of each Trust’s TOB Trusts:

 

     Underlying
Municipal Bonds
Transferred to
TOB Trusts
 (a)
     Liability for
TOB Trust
Certificates
 (b)
     Range of
Interest Rates
on TOB Trust
Certificates at
Period End
     Average
TOB Trust
Certificates
Outstanding
     Daily Weighted
Average Rate
of Interest and
Other Expenses
on TOB Trusts
 

BFZ

  $ 332,793,602      $ 157,125,868        0.90% — 1.14%      $ 166,565,100        1.79

BTT

    448,494,968        261,819,915        0.94% — 1.09%        232,195,956        1.92  

BBF

    84,907,123        49,042,815        0.90% — 1.14%        51,713,388        1.80  

BNY

    56,834,199        31,865,024        0.96% — 1.09%        31,927,379        1.81  

 

  (a) 

The municipal bonds transferred to a TOB Trust are generally high grade municipal bonds. In certain cases, when municipal bonds transferred are lower grade municipal bonds, the TOB Trust transaction may include a credit enhancement feature that provides for the timely payment of principal and interest on the bonds to the TOB Trust by a credit enhancement provider in the event of default of the municipal bond. The TOB Trust would be responsible for the payment of the credit enhancement fee and the trusts, as TOB Residuals holders, would be responsible for reimbursement of any payments of principal and interest made by the credit enhancement provider. The maximum potential amounts owed by the trusts, for such reimbursements, as applicable, are included in the maximum potential amounts disclosed for recourse TOB Trusts.

 
  (b) 

TOB Trusts may be structured on a non-recourse or recourse basis. When a Trust invests in TOB Trusts on a non-recourse basis, the Liquidity Provider may be required to make a payment under the liquidity facility to allow the TOB Trust to repurchase TOB Trust Certificates. The Liquidity Provider will be reimbursed from the liquidation of bonds held in the TOB Trust. If the trust invests in a TOB Trust on a recourse basis, the trust enters into a reimbursement agreement with the Liquidity Provider where the trust is required to reimburse

 

 

 

58    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Notes to Financial Statements  (continued)

 

  the Liquidity Provider for any shortfall between the amount paid by the Liquidity Provider and proceeds received from liquidation of municipal bonds held in the TOB Trust (the “Liquidation Shortfall”). As a result, if the trust invests in a recourse TOB Trust, the trust will bear the risk of loss with respect to any Liquidation Shortfall. If multiple funds participate in any such TOB Trust, these losses will be shared ratably, including the maximum potential amounts owed by the trust at July 31, 2018, in proportion to their participation in the TOB Trust. The recourse TOB Trusts are identified in the Schedule of Investments including the maximum potential amounts owed by the trust at July 31, 2018.  

For the year ended July 31, 2018, the following table is a summary of each Trust’s Loan for TOB Trust Certificates:

 

     Loans
Outstanding
at Period End
     Range of
Interest Rates
on Loans at
Period End
     Average
Loans
Outstanding
     Daily Weighted
Average Rate
of Interest and
Other Expenses
on Loans
 

BFZ

  $           $ 3,948      0.82

BBF

                  32,569      0.78  

BNY

                  8,760      0.78  

 

5.

DERIVATIVE FINANCIAL INSTRUMENTS

The Trusts engage in various portfolio investment strategies using derivative contracts both to increase the returns of the Trusts and/or to manage their exposure to certain risks such as credit risk, equity risk, interest rate risk, foreign currency exchange rate risk, commodity price risk or other risks (e.g., inflation risk). Derivative financial instruments categorized by risk exposure are included in the Schedules of Investments. These contracts may be transacted on an exchange or over-the-counter (“OTC”).

Futures Contracts: Futures contracts are purchased or sold to gain exposure to, or manage exposure to, changes in interest rates (interest rate risk), and changes in the value of equity securities (equity risk) or foreign currencies (foreign currency exchange rate risk).

Futures contracts are agreements between the Trusts and a counterparty to buy or sell a specific quantity of an underlying instrument at a specified price and on a specified date. Depending on the terms of a contract, it is settled either through physical delivery of the underlying instrument on the settlement date or by payment of a cash amount on the settlement date. Upon entering into a futures contract, the Trusts are required to deposit initial margin with the broker in the form of cash or securities in an amount that varies depending on a contract’s size and risk profile. The initial margin deposit must then be maintained at an established level over the life of the contract. Amounts pledged, which are considered restricted, are included in cash pledged for futures contracts in the Statements of Assets and Liabilities.

Securities deposited as initial margin are designated in the Schedules of Investments and cash deposited, if any, is shown as cash pledged for futures contracts in the Statements of Assets and Liabilities. Pursuant to the contract, the Trusts agree to receive from or pay to the broker an amount of cash equal to the daily fluctuation in market value of the contract (“variation margin”). Variation margin is recorded as unrealized appreciation (depreciation) and, if any, shown as variation margin receivable (or payable) on futures contracts in the Statements of Assets and Liabilities. When the contract is closed, a realized gain or loss is recorded in the Statements of Operations equal to the difference between the notional amount of the contract at the time it was opened and the notional amount at the time it was closed. The use of futures contracts involves the risk of an imperfect correlation in the movements in the price of futures contracts and interest, foreign currency exchange rates or underlying assets.

 

6.

INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES

The PNC Financial Services Group, Inc. is the largest stockholder and an affiliate of BlackRock, Inc. (“BlackRock”) for 1940 Act purposes.

Investment Advisory: Each Trust entered into an Investment Advisory Agreement with the Manager, the Trusts’ investment adviser, an indirect, wholly-owned subsidiary of BlackRock, to provide investment advisory and administrative services. The Manager is responsible for the management of each Trust’s portfolio and provides the personnel, facilities, equipment and certain other services necessary to the operations of each Trust.

For such services, each Trust, except BTT, pays the Manager a monthly fee at an annual rate equal to the following percentages of the average weekly value of each Trust’s managed assets:

 

     BFZ      BFO      BBF      BNY  

Investment advisory fees

    0.58      0.50      0.57      0.60

For purposes of calculating these fees, for each Trust except for BTT, “managed assets” mean the total assets of the Trust minus the sum of its accrued liabilities (other than the aggregate indebtedness constituting financial leverage).

For such services, BTT pays the Manager a monthly fee at an annual rate equal to 0.40% of the average daily value of the Trust’s managed assets.

For purposes of calculating these fees for BTT, “managed assets” means the total assets of the Trust (including any assets attributable to money borrowed for investment purposes) minus the sum of its accrued liabilities (other than money borrowed for investment purposes).

Expense Waivers: With respect to each Trust, the Manager voluntarily agreed to waive its investment advisory fees by the amount of investment advisory fees each Trust pays to the Manager indirectly through its investment in affiliated money market funds (the “affiliated money market fund waiver”). These amounts are included in fees waived and/or reimbursed by the Manager in the Statements of Operations. For the year ended July 31, 2018, the amounts waived were as follows:

 

     BFZ      BFO      BTT      BBF      BNY  

Amounts waived

  $ 1,918      $ 2,193      $ 40,170      $ 367      $ 1,643  

 

 

NOTES TO FINANCIAL STATEMENTS      59  


Notes to Financial Statements  (continued)

 

The Manager contractually agreed to waive its investment advisory fee with respect to any portion of each Trust’s assets invested in affiliated equity and fixed-income mutual funds and affiliated exchange-traded funds that have a contractual management fee through June 30, 2019. The agreement can be renewed for annual periods thereafter, and may be terminated on 90 days’ notice, each subject to approval by a majority of the Trusts’ Independent Trustees. For the year ended July 31, 2018, there were no fees waived by the Manager.

Trustees and Officers: Certain Trustees and/or officers of the Trusts are trustees and/or officers of BlackRock or its affiliates. The Trusts reimburse the Manager for a portion of the compensation paid to the Trusts’ Chief Compliance Officer, which is included in Trustees and Officer in the Statements of Operations.

 

7.

PURCHASES AND SALES

For the year ended July 31, 2018, purchases and sales of investments excluding short-term securities, were as follows:

 

     BFZ      BFO      BTT      BBF      BNY  

Purchases

  $ 362,710,356      $ 13,091,205      $ 676,552,586      $ 76,510,779      $ 29,843,925  

Sales

    372,271,831        17,658,834        601,457,664        78,752,449        28,678,651  

 

8.

INCOME TAX INFORMATION

It is each Trust’s policy to comply with the requirements of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies, and to distribute substantially all of its taxable income to its shareholders. Therefore, no U.S. federal income tax provision is required.

Each Trust files U.S. federal and various state and local tax returns. No income tax returns are currently under examination. The statute of limitations on each Trust’s U.S. federal tax returns generally remains open for each of the four years ended July 31, 2018. The statutes of limitations on each Trust’s state and local tax returns may remain open for an additional year depending upon the jurisdiction.

Management has analyzed tax laws and regulations and their application to the Trusts as of July 31, 2018, inclusive of the open tax return years, and does not believe that there are any uncertain tax positions that require recognition of a tax liability in the Trusts’s financial statements.

U.S. GAAP requires that certain components of net assets be adjusted to reflect permanent differences between financial and tax reporting. These reclassifications have no effect on net assets or net asset values per share. As of period end, the following permanent differences attributable to amortization methods on fixed-income securities, non-deductible expenses, the expiration of capital loss carryforwards, distributions received from a regulated investment company, the sale of bonds received from tender option bond trusts and the retention of tax-exempt income were reclassified to the following accounts:

 

     BFZ     BFO     BTT     BBF     BNY  

Paid-in capital

  $     $ 93,900     $ (31,270   $ (6,933,155   $ (1,480,575

Undistributed (distributions in excess of ) net investment income

    (163,064     (154,150     37,036       (223,242     (39,649

Accumulated net realized gain (loss)

    163,064       60,250       (5,766     7,156,397       1,520,224  

The tax character of distributions paid was as follows:

 

     BFZ      BFO      BTT      BBF      BNY  

Tax-exempt income(a)

             

7/31/2018

  $ 24,915,719      $ 1,846,627      $ 73,569,689      $ 9,397,956      $ 10,229,776  

7/31/2017

    27,289,661        2,313,845        77,303,688        9,707,999        10,868,814  

Ordinary income(b)

             

7/31/2018

    2,214               31,299        5,666        38,574  

7/31/2017

    742               8,726               2,342  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

             

7/31/2018

  $ 24,917,933      $ 1,846,627      $ 73,600,988      $ 9,403,622      $ 10,268,350  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

7/31/2017

  $ 27,290,403      $ 2,313,845      $ 77,312,414      $ 9,707,999      $ 10,871,156  
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

  (a) 

The Trusts designate these amounts paid during the fiscal year ended July 31, 2018, as exempt-interest dividends.

 
  (b) 

Ordinary income consists primarily of taxable income recognized from market discount. Additionally, all ordinary income distributions are comprised of interest-related dividends for non-U.S. residents and are eligible for exemption from U.S. withholding tax for nonresident aliens and foreign corporations.

 

 

 

60    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Notes to Financial Statements  (continued)

 

As of period end, the tax components of accumulated net earnings (losses) were as follows:

 

     BFZ      BFO     BTT     BBF     BNY  

Undistributed tax-exempt income

  $      $ 1,500,268     $     $     $ 289,942  

Undistributed ordinary income

    176,961        273       5,765       2,149       2,945  

Capital loss carryforwards

           (826,427     (24,254,453     (3,152,042     (5,420,542

Undistributed long-term capital gains

    6,149,804                           

Net unrealized gains(a)

    19,094,609        413,766       18,288,083       10,073,516       13,410,579  
 

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 
  $ 25,421,374      $ 1,087,880     $ (5,960,605   $ 6,923,623     $ 8,282,924  
 

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

 

  (a)

The difference between book-basis and tax-basis net unrealized gains was attributable primarily to the tax deferral of losses on wash sales, amortization and accretion methods of premiums and discounts on fixed income securities, the realization for tax purposes of unrealized gains/(losses) on certain futures contracts, the treatment of residual interests in TOB trusts and the deferral of compensation to Trustees.

 
  (b) 

The Trust has elected to defer certain qualified late-year losses and recognize such losses in the next taxable year.

 

As of July 31, 2018, the Trusts had capital loss carryforwards available to offset future realized capital gains through the indicated expiration dates as follows:

 

Expires July 31,    BFO      BTT      BBF      BNY  

No expiration date(a)

   $ 826,427      $ 24,254,453      $ 2,500,578      $ 3,437,611  

2019

                   651,464        1,982,931  
  

 

 

    

 

 

    

 

 

    

 

 

 
   $ 826,427      $ 24,254,453      $ 3,152,042      $ 5,420,542  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

  (a) 

Must be utilized prior to losses subject to expiration.

 

During the year ended July 31, 2018, the Funds listed below utilized the following amounts of their respective capital loss carryforward:

 

BFZ

  $ 1,442,647  

BTT

    6,795,857  

BBF

    1,275,359  

BNY

    834,518  

As of July 31, 2018, gross unrealized appreciation and depreciation for investments and derivatives based on cost for U.S. federal income tax purposes were as follows:

 

     BFZ     BFO     BTT     BBF     BNY  

Tax cost

  $ 622,947,407     $ 80,588,280     $ 2,389,513,479     $ 181,233,577     $ 267,202,221  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross unrealized appreciation

  $ 22,401,737     $ 1,252,706     $ 52,103,114     $ 11,012,822     $ 14,472,101  

Gross unrealized depreciation

    (2,320,611     (828,758     (32,798,391     (498,369     (1,029,455
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net unrealized appreciation

  $ 20,081,126     $ 423,948     $ 19,304,723     $ 10,514,453     $ 13,442,646  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

The Tax Cuts and Jobs Act (the “Act”) was enacted on December 22, 2017. Certain provisions of the Act were effective upon enactment with the remainder becoming effective for tax years beginning after December 31, 2017. Although the Act does not amend any provisions directly related to the qualification or taxation of regulated investment companies (“RICs”), the Act does change the taxation of entities in which some RICs invest, the tax treatment of income derived from those entities and the taxation of RIC shareholders. While management does not anticipate significant impact to the Trusts or to their shareholders, there is uncertainty in the application of certain provisions in the Act. Specifically, provisions in the Act may increase the amount of or accelerate the recognition of taxable income and may limit the deductibility of certain expenses by RICs. Until full clarity around these provisions is obtained, the impact on the Trusts’ financial statements, if any, cannot be fully determined.

 

9.

PRINCIPAL RISKS

Many municipalities insure repayment of their bonds, which may reduce the potential for loss due to credit risk. The market value of these bonds may fluctuate for other reasons, including market perception of the value of such insurance, and there is no guarantee that the insurer will meet its obligation.

Inventories of municipal bonds held by brokers and dealers may decrease, which would lessen their ability to make a market in these securities. Such a reduction in market making capacity could potentially decrease a Trust’s ability to buy or sell bonds. As a result, a Trust may sell a security at a lower price, sell other securities to raise cash, or give up an investment opportunity, any of which could have a negative impact on performance. If a Trust needed to sell large blocks of bonds, those sales could further reduce the bonds’ prices and impact performance.

In the normal course of business, certain Trusts invest in securities or other instruments and may enter into certain transactions, and such activities subject each Trust to various risks, including among others, fluctuations in the market (market risk) or failure of an issuer to meet all of its obligations. The value of securities or other instruments may also be affected by various factors, including, without limitation: (i) the general economy; (ii) the overall market as well as local, regional or global political and/or social instability; (iii) regulation, taxation or international tax treaties between various countries; or (iv) currency, interest rate and price fluctuations.

Each Trust may be exposed to prepayment risk, which is the risk that borrowers may exercise their option to prepay principal earlier than scheduled during periods of declining interest rates, which would force each Trust to reinvest in lower yielding securities. Each Trust may also be exposed to reinvestment risk, which is the risk that income from each Trust’s portfolio will decline if each Trust invests the proceeds from matured, traded or called fixed-income securities at market interest rates that are below each Trust portfolio’s current earnings rate.

 

 

NOTES TO FINANCIAL STATEMENTS      61  


Notes to Financial Statements  (continued)

 

The Trusts may hold a significant amount of bonds subject to calls by the issuers at defined dates and prices. When bonds are called by issuers and the Trusts reinvest the proceeds received, such investments may be in securities with lower yields than the bonds originally held, and correspondingly, could adversely impact the yield and total return performance of a Trust.

There is no assurance that BFO will achieve its investment objective and BFO may return less than $15.00 per share. As BFO approaches its scheduled termination date, it is expected that the maturity of BFO’s portfolio securities will shorten, which is likely to reduce BFO’s income and distributions to shareholders.

There is no assurance that BTT will achieve its investment objective and BTT may return less than $25.00 per share. As BTT approaches its scheduled termination date, it is expected that the maturity of BTT’s portfolio securities will shorten, which is likely to reduce BTT’s income and distributions to shareholders.

A Trust structures and “sponsors” the TOB Trusts in which it holds TOB Residuals and has certain duties and responsibilities, which may give rise to certain additional risks including, but not limited to, compliance, securities law and operational risks.

Should short-term interest rates rise, the Trusts’ investments in the TOB Trusts may adversely affect the Trusts’ net investment income and dividends to Common Shareholders. Also, fluctuations in the market value of municipal bonds deposited into the TOB Trust may adversely affect the Trusts’ NAVs per share.

The SEC and various federal banking and housing agencies have adopted credit risk retention rules for securitizations (the “Risk Retention Rules”). The Risk Retention Rules would require the sponsor of a TOB Trust to retain at least 5% of the credit risk of the underlying assets supporting the TOB Trust’s municipal bonds. The Risk Retention Rules may adversely affect the Trusts’ ability to engage in TOB Trust transactions or increase the costs of such transactions in certain circumstances.

TOB Trusts constitute an important component of the municipal bond market. Any modifications or changes to rules governing TOB Trusts may adversely impact the municipal market and the Trusts, including through reduced demand for and liquidity of municipal bonds and increased financing costs for municipal issuers. The ultimate impact of any potential modifications on the TOB Trust market and the overall municipal market is not yet certain.

Counterparty Credit Risk: The Trusts may be exposed to counterparty credit risk, or the risk that an entity may fail to or be unable to perform on its commitments related to unsettled or open transactions. The Trusts manage counterparty credit risk by entering into transactions only with counterparties that the Manager believes have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties. Financial assets, which potentially expose the Trusts to market, issuer and counterparty credit risks, consist principally of financial instruments and receivables due from counterparties. The extent of the Trusts’ exposure to market, issuer and counterparty credit risks with respect to these financial assets is approximately their value recorded in the Statements of Assets and Liabilities, less any collateral held by the Trusts.

A derivative contract may suffer a mark-to-market loss if the value of the contract decreases due to an unfavorable change in the market rates or values of the underlying instrument. Losses can also occur if the counterparty does not perform under the contract.

With exchange-traded futures, there is less counterparty credit risk to the Trusts since the exchange or clearinghouse, as counterparty to such instruments, guarantees against a possible default. The clearinghouse stands between the buyer and the seller of the contract; therefore, credit risk is limited to failure of the clearinghouse. While offset rights may exist under applicable law, a Trust does not have a contractual right of offset against a clearing broker or clearinghouse in the event of a default (including the bankruptcy or insolvency). Additionally, credit risk exists in exchange-traded futures with respect to initial and variation margin that is held in a clearing broker’s customer accounts. While clearing brokers are required to segregate customer margin from their own assets, in the event that a clearing broker becomes insolvent or goes into bankruptcy and at that time there is a shortfall in the aggregate amount of margin held by the clearing broker for all its clients, typically the shortfall would be allocated on a pro rata basis across all the clearing broker’s customers, potentially resulting in losses to the Trusts.

Concentration Risk: Each of BFZ, BFO and BNY invests a substantial amount of its assets in issuers located in a single state or limited number of states. This may subject each Trust to the risk that economic, political or social issues impacting a particular state or group of states could have an adverse and disproportionate impact on the income from, or the value or liquidity of, the Trusts’ respective portfolios. Investment percentages in specific states or U.S. territories are presented in the Schedules of Investments.

As of period end, BFZ invested a significant portion of its assets in securities in the county, city, special district and school district sectors. Changes in economic conditions affecting such sectors would have a greater impact on BFZ and could affect the value, income and/or liquidity of positions in such securities.

The Trusts invest a significant portion of their assets in fixed-income securities and/or use derivatives tied to the fixed-income markets. Changes in market interest rates or economic conditions may affect the value and/or liquidity of such investments. Interest rate risk is the risk that prices of bonds and other fixed-income securities will increase as interest rates fall and decrease as interest rates rise.

 

10.

CAPITAL SHARE TRANSACTIONS

Each Trust is authorized to issue an unlimited number of shares, all of which were initially classified as Common Shares. The par value for each Trust’s Common Shares is $0.001. The Board is authorized, however, to reclassify any unissued Common Shares to Preferred Shares without the approval of Common Shareholders.

Common Shares

For the years shown, shares issued and outstanding increased by the following amounts as a result of dividend reinvestment:

 

Year Ended July 31,   BFZ      BBF      BNY  

2018

           7,282        12,500  

2017

    10,394        10,545        15,306  

For the years ended July 31, 2018 and July 31, 2017, shares issued and outstanding remained constant for BFO and BTT.

 

 

62    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Notes to Financial Statements  (continued)

 

Preferred Shares

Each Trust’s Preferred Shares rank prior to the Trust’s Common Shares as to the payment of dividends by the Trust and distribution of assets upon dissolution or liquidation of a Trust. The 1940 Act prohibits the declaration of any dividend on a Trust’s Common Shares or the repurchase of a Trust’s Common Shares if a Trust fails to maintain asset coverage of at least 200% of the liquidation preference of the Trust’s outstanding Preferred Shares. In addition, pursuant to the Preferred Shares’ governing instruments, a Trust is restricted from declaring and paying dividends on classes of shares ranking junior to or on parity with the Trust’s Preferred Shares or repurchasing such shares if a Trust fails to declare and pay dividends on the Preferred Shares, redeem any Preferred Shares required to be redeemed under the Preferred Shares’ governing instruments or comply with the basic maintenance amount requirement of the ratings agencies rating the Preferred Shares.

The holders of Preferred Shares have voting rights equal to the voting rights of the holders of Common Shares (one vote per share) and will vote together with holders of Common Shares (one vote per share) as a single class on certain matters. However, the holders of Preferred Shares, voting as a separate class, are also entitled to elect two Trustees to the Board of each Trust. The holders of Preferred Shares are also entitled to elect the full Board of Trustees if dividends on the Preferred Shares are not paid for a period of two years. The holders of Preferred Shares are also generally entitled to a separate class vote to amend the Preferred Share governing documents. In addition, the 1940 Act requires the approval of the holders of a majority of any outstanding Preferred Shares, voting as a separate class, to (a) adopt any plan of reorganization that would adversely affect the Preferred Shares, (b) change a Trust’s sub-classification as a closed-end investment company or change its fundamental investment restrictions or (c) change its business so as to cease to be an investment company.

VRDP Shares

BBF has issued Series W-7 VRDP Shares, $100,000 liquidation preference per share, in privately negotiated offerings and sales. The VRDP Shares were offered to qualified institutional buyers as defined pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). The VRDP Shares include a liquidity feature are currently in a special rate period, as described below.

As of period end, the VRDP Shares outstanding of BBF were as follows:

 

     Issue
Date
     Shares
Issued
     Aggregate
Principal
     Maturity
Date
 

BBF

    09/15/11        342      $ 34,200,000        10/01/41  

BBF

    05/16/16        178        17,800,000        10/01/41  

Redemption Terms: BBF is required to redeem its VRDP Shares on the maturity date, unless earlier redeemed or repurchased. Six months prior to the maturity date, BBF is required to begin to segregate liquid assets with the Trust’s custodian to fund the redemption. In addition, BBF is required to redeem certain of its outstanding VRDP Shares if it fails to comply with certain asset coverage, basic maintenance amount or leverage requirements.

Subject to certain conditions, the VRDP Shares may also be redeemed, in whole or in part, at any time at the option of BBF. The redemption price per VRDP Share is equal to the liquidation preference per share plus any outstanding unpaid dividends.

Liquidity Feature: BBF entered into a fee agreement with the liquidity provider that requires a per annum liquidity fee payable to the liquidity provider. These fees, if applicable, are shown as liquidity fees in the Statements of Operations.

The initial fee agreement between BBF and the liquidity provider was for a 364 day term and was scheduled to expire on September 14, 2012. The fee agreement was subsequently renewed for additional terms. The most recent extension is scheduled to expire on October 21, 2019, unless renewed or terminated in advance.

In the event the fee agreement is not renewed or is terminated in advance, and BBF does not enter into a fee agreement with an alternate liquidity provider, the VRDP Shares will be subject to mandatory purchase by the liquidity provider prior to the termination of the fee agreement. In the event of such mandatory purchase, BBF is required to redeem the VRDP Shares six months after the purchase date. Immediately after such mandatory purchase, BBF is required to begin to segregate liquid assets with its custodian to fund the redemption. There is no assurance BBF will replace such redeemed VRDP Shares with any other preferred shares or other form of leverage.

Remarketing: BBF may incur remarketing fees of 0.10% on the aggregate principal amount of all the Trust’s VRDP Shares, which, if any, are included in remarketing fees on Preferred Shares in the Statements of Operations. During any special rate period (as described below), BBF may incur no remarketing fees.

Dividends: Dividends on the VRDP Shares are payable monthly at a variable rate set weekly by the remarketing agent. Such dividend rates are generally based upon a spread over a base rate and cannot exceed a maximum rate. In the event of a failed remarketing, the dividend rate of the VRDP Shares will be reset to a maximum rate. The maximum rate is determined based on, among other things, the long-term preferred share rating assigned to the VRDP Shares and the length of time that the VRDP Shares fail to be remarketed. At the date of issuance, the VRDP Shares were assigned long-term ratings of Aaa from Moody’s and AAA from Fitch. Subsequent to the issuance of the VRDP Shares, Moody’s completed a review of its methodology for rating securities issued by registered closed-end funds. As of period end, the VRDP Shares were assigned a long-term rating of Aa1 from Moody’s under its new ratings methodology. The VRDP Shares continue to be assigned a long-term rating of AAA from Fitch.

For the year ended July 31, 2018, the annualized dividend rate for the BBF’s VRDP Shares was 2.05%.

Ratings: The short-term ratings on the VRDP Shares are directly related to the short-term ratings of the liquidity provider for such VRDP Shares. Changes in the credit quality of the liquidity provider could cause a change in the short-term credit ratings of the VRDP Shares as rated by Moody’s, Fitch and/or S&P. A change in the short-term credit rating of the liquidity provider or the VRDP Shares may adversely affect the dividend rate paid on such shares, although the dividend rate paid on the VRDP Shares is not directly based upon either short-term rating. The liquidity provider may be terminated prior to the scheduled termination date if the liquidity provider fails to maintain short-term debt ratings in one of the two highest rating categories.

 

 

NOTES TO FINANCIAL STATEMENTS      63  


Notes to Financial Statements  (continued)

 

Special Rate Period: On October 22, 2015, BBF commenced a three-year special rate period ending April 18, 2018 with respect to its VRDP Shares, during which the VRDP Shares were not subject to any remarketing and the dividend rate was not based on a predetermined methodology. The special rate period has been extended for an additional one year term and is currently set to expire on April 17, 2019. Prior to April 17, 2019, the holder of the VRDP Shares and BBF may mutually agree to extend the special rate period. If the special rate period is not extended, the VRDP Shares will revert to remarketable securities upon the termination of the special rate period and will be remarketed and available for purchase by qualified institutional buyers.

During the special rate period, the liquidity and fee agreements will remain in effect and the VRDP Shares will remain subject to mandatory redemption by BBF on the maturity date. The VRDP Shares will not be remarketed or subject to optional or mandatory tender events during the special rate period. During the special rate period, BBF is required to comply with the same asset coverage, basic maintenance amount and leverage requirements for the VRDP Shares as is required when the VRDP Shares are not in a special rate period. BBF will not pay any fees to the liquidity provider and remarketing agent during the special rate period. BBF will also pay dividends monthly based on the sum of the Securities Industry and Financial Markets Association (“SIFMA”) Municipal Swap Index rate and a percentage per annum based on the long-term ratings assigned to the VRDP Shares.

If BBF redeems the VRDP Shares prior to end of the special rate period and the VRDP Shares have long-term ratings above A1/A+ and its equivalent by all ratings agencies then rating the VRDP Shares, then such redemption may be subject to a redemption premium payable to the holder of the VRDP Shares based on the time remaining in the special rate period, subject to certain exceptions for redemptions that are required to comply with minimum asset coverage requirements.

For the year ended July 31, 2018, VRDP Shares issued and outstanding of BBF remained constant.

VMTP Shares

BFZ and BNY (collectively, the “VMTP Trusts”) have issued Series W-7 VMTP Shares, $100,000 liquidation preference per share, in privately negotiated offerings and sales of VMTP Shares exempt from registration under the Securities Act. The VMTP Shares are subject to certain restrictions on transfer, and VMTP Trusts may also be required to register the VMTP Shares for sale under the Securities Act under certain circumstances. In addition, amendments to the VMTP governing documents generally require the consent of the holders of VMTP Shares.

As of period end, the VMTP Shares outstanding of each Trust were as follows:

 

     Issue
Date
     Shares
Issued
     Aggregate
Principal
    

Term

Redemption

Date

 

BFZ

    03/22/12        1,713      $ 171,300,000        03/30/19  

BNY

    03/22/12        945        94,500,000        03/30/19  

Redemption Terms: Each VMTP Trust is required to redeem its VMTP Shares on the term redemption date, unless earlier redeemed or repurchased or unless extended. There is no assurance that the term of a Trust’s VMTP Shares will be extended further or that a Trust’s VMTP Shares will be replaced with any other preferred shares or other form of leverage upon the redemption or repurchase of the VMTP Shares. Six months prior to the term redemption date, each VMTP Trust is required to begin to segregate liquid assets with the Trusts’ custodian to fund the redemption. In addition, each VMTP Trust is required to redeem certain of its outstanding VMTP Shares if it fails to comply with certain asset coverage, basic maintenance amount or leverage requirements.

Subject to certain conditions, a Trust’s VMTP Shares may be redeemed, in whole or in part, at any time at the option of each VMTP Trust. The redemption price per VMTP Share is equal to the liquidation preference per share plus any outstanding unpaid dividends and applicable redemption premium. If the Trusts redeems the VMTP Shares prior to the term redemption date and the VMTP Shares have long-term ratings above A1/A+ or its equivalent by the ratings agencies then rating the VMTP Shares, then such redemption may be subject to a prescribed redemption premium (up to 3% of the liquidation preference) payable to the holder of the VMTP Shares based on the time remaining until the term redemption date, subject to certain exceptions for redemptions that are required to comply with minimum asset coverage requirements.

Dividends: Dividends on the VMTP Shares are declared daily and payable monthly at a variable rate set weekly at a fixed rate spread to the SIFMA Municipal Swap Index. The fixed spread is determined based on the long-term preferred share rating assigned to the VMTP Shares by the ratings agencies then rating the VMTP Shares. At the date of issuance, the VMTP Shares were assigned long-term ratings of Aaa from Moody’s and AAA from Fitch. Subsequent to the issuance of the VMTP Shares, Moody’s completed a review of its methodology for rating securities issued by registered closed-end funds. As of period end, the VMTP Shares were assigned a long-term rating of Aa2 from Moody’s under its new rating methodology. The VMTP Shares continue to be assigned a long-term rating of AAA from Fitch. The dividend rate on the VMTP Shares is subject to a step-up spread if the Trusts fail to comply with certain provisions, including, among other things, the timely payment of dividends, redemptions or gross-up payments, and complying with certain asset coverage and leverage requirements.

For the year ended July 31, 2018, the average annualized dividend rates for the VMTP Shares were as follows:

 

     BFZ      BNY  

Rate

    2.07      2.07

For the year ended July 31, 2018, VMTP Shares issued and outstanding of BFZ and BNY remained constant.

RVMTP Shares

BTT has issued Series W-7 RVMTP Shares, $5,000,000 liquidation preference per share, in privately negotiated offerings and sales of RVMTP Shares exempt from registration under the Securities Act. The RVMTP Shares are subject to certain restrictions on transfer outside of a remarketing. Amendments to the RVMTP governing documents generally require the consent of the holders of RVMTP Shares.

 

 

64    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Notes to Financial Statements  (continued)

 

As of period end, the RVMTP Shares outstanding of BTT were as follows:

 

     Issue
Date
     Shares
Issued
    

Aggregate

Principal

     Term
Redemption
Date
 

BTT

    01/10/2013        50      $ 250,000,000        12/31/2030  
    01/30/2013        50        250,000,000        12/31/2030  
      02/20/2013        50        250,000,000        12/31/2030  

Redemption Terms: BTT is required to redeem its RVMTP Shares on the term redemption date or within six months of an unsuccessful remarketing, unless earlier redeemed or repurchased. There is no assurance that BTT’s RVMTP Shares will be replaced with any other preferred shares or other form of leverage upon the redemption or repurchase of the RVMTP Shares. In addition, BTT is required to redeem certain of its outstanding RVMTP Shares if it fails to comply with certain asset coverage, basic maintenance amount or leverage requirements.

Subject to certain conditions, BTT’s RVMTP Shares may be redeemed, in whole or in part, at any time at the option of BTT. The redemption price per RVMTP Share is equal to the liquidation preference per share plus any outstanding unpaid dividends. The RVMTP Shares are subject to certain restrictions on transfer outside of a remarketing. The RVMTP Shares are subject to remarketing upon 90 days’ notice by holders of the RVMTP Shares and 30 days’ notice by BTT. Each remarketing must be at least six months apart from the last remarketing. A holder of RVMTP Shares may submit notice of remarketing only if such holder requests a remarketing of at least the lesser of (i) $100,000,000 of RVMTP Shares or (ii) all of the RVMTP Shares held by such holder.

Dividends: Dividends on the RVMTP Shares are declared daily and payable monthly at a variable rate set weekly at a fixed rate spread to the SIFMA Municipal Swap Index. The initial fixed rate spread was agreed upon by the initial purchaser and BTT on the initial date of issuance for the RVMTP Shares. The initial fixed rate spread may be adjusted at each remarketing or upon the agreement of BTT and all of the holders of the RVMTP Shares. In the event that all of the RVMTP Shares submitted for remarketing are not successfully remarketed, a failed remarketing would occur, and all holders would retain their RVMTP Shares. In the event of a failed remarketing, the fixed rate spread would be set at the fixed rate spread applicable to such failed remarketing. BTT has the right to reject any fixed spread determined at a remarketing, and such rejection would result in a failed remarketing and the fixed rate spread would be set at the fixed rate spread applicable to such failed remarketing. The fixed rate spread applicable due to a failed remarketing depends on whether the remarketing was pursuant to a mandatory or non-mandatory tender. In the case of a failed remarketing following a mandatory tender, the failed remarketing spread would be the sum of the last applicable spread in effect immediately prior to the failed remarketing date for such failed remarketing plus 0.75%. In the case of a failed remarketing not associated with a mandatory tender, the failed remarketing spread would be the sum of the last applicable spread in effect immediately prior to the failed remarketing date for such failed remarketing plus 0.25%.

For the year ended July 31, 2018, the average annualized dividend rate for the RVMTP Shares was 1.80%.

Remarketing: In the event of a failed remarketing that is not subsequently cured, BTT will be required to redeem the RVMTP Shares subject to such failed remarketing on a date that is approximately six months from the remarketing date for such failed remarketing, provided that no redemption of any RVMTP Share may occur within one year of the date of issuance of such RVMTP Share. At the date of issuance and as of period end, the RVMTP Shares were assigned long-term ratings of Aa1 from Moody’s and AAA from Fitch. The dividend rate on the RVMTP Shares is subject to a step-up spread if BTT fails to comply with certain provisions, including, among other things, the timely payment of dividends, redemptions or gross-up payments, and complying with certain asset coverage and leverage requirements.

During the year ended July 31, 2018, no RVMTP Shares were tendered for remarketing.

For the year ended July 31, 2018, RVMTP Shares issued and outstanding of BTT remained constant.

Offering Costs: The Trusts incurred costs in connection with the issuance of VRDP, VMTP and RVMTP Shares, which were recorded as a direct deduction from the carrying value of the related debt liability and will be amortized over the life of the VRDP, VMTP and RVMTP Shares with the exception of upfront fees paid to the liquidity provider which were amortized over the life of the liquidity agreement. Amortization of these costs is included in interest expense, fees and amortization of offering costs in the Statements of Operations.

Financial Reporting: The VRDP, VMTP and RVMTP Shares are considered debt of the issuer; therefore, the liquidation preference, which approximates fair value of the VRDP, VMTP and RVMTP Shares, is recorded as a liability in the Statements of Assets and Liabilities net of deferred offering costs. Unpaid dividends are included in interest expense and fees payable in the Statements of Assets and Liabilities, and the dividends accrued and paid on the VRDP, VMTP and RVMTP Shares are included as a component of interest expense, fees and amortization of offering costs in the Statements of Operations. The VRDP, VMTP and RVMTP Shares are treated as equity for tax purposes. Dividends paid to holders of the VRDP, VMTP and RVMTP Shares are generally classified as tax-exempt income for tax-reporting purposes. Dividends and amortization of deferred offering costs on VRDP, VMTP and RVMTP Shares are included in interest expense, fees and amortization of offering costs in the Statements of Operations:

 

     Dividends
Accrued
     Deferred
Offering Costs
Amortization
 

BFZ

  $ 3,545,394      $  

BTT

    13,489,136        31,270  

BBF

    1,067,537        6,112  

BNY

    1,957,403         

 

 

NOTES TO FINANCIAL STATEMENTS      65  


Notes to Financial Statements  (continued)

 

 

11.

SUBSEQUENT EVENTS

Management’s evaluation of the impact of all subsequent events on the Trusts’ financial statements was completed through the date the financial statements were issued and the following items were noted:

 

     Common Dividend
Per Share
           Preferred Shares (c)  
     Paid (a)      Declared (b)            Shares      Series      Declared  

BFZ

  $ 0.0470      $ 0.0470         VMTP        W-7      $ 346,401  

BFO

    0.0260        0.0260         N/A        N/A        N/A  

BTT

    0.0624        0.0624         RVMTP        W-7        1,344,658  

BBF

    0.0605        0.0605         VRDP        W-7        114,785  

BNY

    0.0445        0.0445               VMTP        W-7        191,097  

 

  (a) 

Net investment income dividend paid on September 4, 2018 to Common Shareholders of record on August 15, 2018.

 
  (b) 

Net investment income dividend declared on September 4, 2018, payable to Common Shareholders of record on September 14, 2018.

 
  (c) 

Dividends declared for period August 1, 2018 to August 31, 2018.

 

 

 

66    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Report of Independent Registered Public Accounting Firm   

 

To the Shareholders and Board of Trustees of BlackRock California Municipal Income Trust, BlackRock Florida Municipal 2020 Term Trust, BlackRock Municipal 2030 Target Term Trust, BlackRock Municipal Income Investment Trust, and BlackRock New York Municipal Income Trust:

Opinion on the Financial Statements and Financial Highlights

We have audited the accompanying statements of assets and liabilities of BlackRock California Municipal Income Trust, BlackRock Florida Municipal 2020 Term Trust, BlackRock Municipal 2030 Target Term Trust, BlackRock Municipal Income Investment Trust, and BlackRock New York Municipal Income Trust (the “Funds”), including the schedules of investments, as of July 31, 2018, the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended, the statements of cash flows for BlackRock California Municipal Income Trust, BlackRock Municipal 2030 Target Term Trust, BlackRock Municipal Income Investment Trust, and BlackRock New York Municipal Income Trust for the year then ended, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Funds as of July 31, 2018, and the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended, and the results of their cash flows for BlackRock California Municipal Income Trust, BlackRock Municipal 2030 Target Term Trust, BlackRock Municipal Income Investment Trust, and BlackRock New York Municipal Income Trust for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements and financial highlights are the responsibility of the Funds’ management. Our responsibility is to express an opinion on the Funds’ financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Funds in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Funds are not required to have, nor were we engaged to perform, an audit of their internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Funds’ internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities owned as of July 31, 2018, by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.

Deloitte & Touche LLP

Boston, Massachusetts

September 20, 2018

We have served as the auditor of one or more BlackRock investment companies since 1992.

 

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM      67  


Disclosure of Investment Advisory Agreements  

 

The Board of Trustees (the “Board,” the members of which are referred to as “Board Members”) of BlackRock California Municipal Income Trust (“BFZ”), BlackRock Florida Municipal 2020 Term Trust (“BFO”), BlackRock Municipal Income Investment Trust (“BBF”), BlackRock New York Municipal Income Trust (“BNY”) and BlackRock Municipal 2030 Target Term Trust (“BTT” and together with BFZ, BFO, BBF and BNY, each a “Trust,” and, collectively, the “Trusts”) met in person on April 24, 2018 (the “April Meeting”) and June 6-7, 2018 (the “June Meeting”) to consider the approval of each Trust’s investment advisory agreement (each, an “Agreement,” and collectively, the “Agreements”) with BlackRock Advisors, LLC (the “Manager”), each Trust’s investment advisor. The Manager is referred to herein as “BlackRock”.

Activities and Composition of the Board

On the date of the June Meeting, the Board of each Trust consisted of ten individuals, eight of whom were not “interested persons” of the Trust as defined in the Investment Company Act of 1940, as amended (the “1940 Act”) (the “Independent Board Members”). The Board Members are responsible for the oversight of the operations of its Trust and perform the various duties imposed on the directors of investment companies by the 1940 Act. The Independent Board Members have retained independent legal counsel to assist them in connection with their duties. The Chair of each Board is an Independent Board Member. Each Board has established five standing committees: an Audit Committee, a Governance and Nominating Committee, a Compliance Committee, a Performance Oversight Committee, and an Executive Committee, each of which is chaired by an Independent Board Member and composed of Independent Board Members (except for the Executive Committee, which also has one interested Board Member).

The Agreements

Pursuant to the 1940 Act, each Board is required to consider the continuation of the Agreement for its Trust on an annual basis. Each Board has four quarterly meetings per year, each typically extending for two days, and additional in-person and telephonic meetings throughout the year, as needed. Each Board also has a fifth one-day meeting to consider specific information surrounding the consideration of renewing the Agreement for its Trust. Each Board’s consideration of the Agreement for its Trust is a year-long deliberative process, during which the Board assessed, among other things, the nature, extent and quality of the services provided to its Trust by BlackRock, BlackRock’s personnel and affiliates, including, as applicable; investment management, accounting, administrative, and shareholder services; oversight of the Trust’s service providers; marketing; risk management and oversight; legal and compliance services; and ability to meet applicable legal and regulatory requirements.

Each Board, acting directly and through its committees, considers at each of its meetings, and from time to time as appropriate, factors that are relevant to its annual consideration of the renewal of the Agreement for its Trust, including the services and support provided by BlackRock to the Trust and its shareholders. BlackRock also furnished additional information to each Board in response to specific questions from the Board. This additional information is discussed further below in the section titled “Board Considerations in Approving the Agreements.” Among the matters each Board considered were: (a) investment performance for one-year, three-year, five-year, ten-year, and/or since inception periods, as applicable, against peer funds, applicable benchmarks, and performance metrics, as applicable, as well as senior management’s and portfolio managers’ analysis of the reasons for any over-performance or underperformance relative to its peers, benchmarks, and other performance metrics, as applicable; (b) leverage management, as applicable; (c) fees, including advisory, administration, if applicable, paid to BlackRock and its affiliates by the Trust for services; (d) Trust operating expenses and how BlackRock allocates expenses to the Trust; (e) the resources devoted to, risk oversight of, and compliance reports relating to, implementation of the Trust’s investment objective(s), policies and restrictions, and meeting regulatory requirements; (f) the Trust’s adherence to its compliance policies and procedures; (g) the nature, character and scope of non-investment management services provided by BlackRock and its affiliates and the estimated cost of such services; (h) BlackRock’s and other service providers’ internal controls and risk and compliance oversight mechanisms; (i) BlackRock’s implementation of the proxy voting policies approved by the Board; (j) execution quality of portfolio transactions; (k) BlackRock’s implementation of the Trust’s valuation and liquidity procedures; (l) an analysis of management fees for products with similar investment mandates across the open-end fund, closed-end fund, sub-advised mutual fund, collective investment trust, and institutional separate account product channels, as applicable, and the similarities and differences between these products and the services provided as compared to the Trust; (m) BlackRock’s compensation methodology for its investment professionals and the incentives and accountability it creates, along with investment professionals’ investments in the fund(s) they manage; and (n) periodic updates on BlackRock’s business.

The Board of each of BFZ, BFO, BBF and BNY considered BlackRock’s efforts during the past several years with regard to the redemption of outstanding auction rate preferred securities. Each of BFZ, BFO, BBF and BNY has redeemed all of its outstanding auction rate preferred securities.

Board Considerations in Approving the Agreements

The Approval Process: Prior to the April Meeting, each Board requested and received materials specifically relating to the Agreement for its Trust. Each Board is continuously engaged in a process with its independent legal counsel and BlackRock to review the nature and scope of the information provided to better assist its deliberations. The materials provided in connection with the April Meeting included, among other things: (a) information independently compiled and prepared by Broadridge Financial Solutions, Inc. (“Broadridge”), based on Lipper classifications, regarding the Trusts’ fees and expenses as compared with a peer group of funds as determined by Broadridge (“Expense Peers”) and the investment performance of the Trusts’ as compared with a peer group of funds (“Performance Peers”) and other metrics, as applicable; (b) information on the composition of the Expense Peers and Performance Peers, and a description of the Broadridge’s methodology; (c) information on the estimated profits realized by BlackRock and its affiliates pursuant to each Trust’s Agreement and a discussion of fall-out benefits to BlackRock and its affiliates; (d) a general analysis provided by BlackRock concerning investment management fees received in connection with other types of investment products, such as institutional accounts, sub-advised mutual funds, closed-end funds, and open-end funds, under similar investment mandates, as applicable; (e) review of non-management fees; (f) the existence and impact and sharing of potential economies of scale, if any, and the sharing of potential economies of scale with each Trust; (g) a summary of aggregate amounts paid by each Trust to BlackRock; and (h) various additional information requested by each Board as appropriate regarding BlackRock’s and the operations of its Trust.

At the April Meeting, each Board reviewed materials relating to its consideration of the Agreement for its Trust. As a result of the discussions that occurred during the April Meeting, and as a culmination of each Board’s year-long deliberative process, each Board presented BlackRock with questions and requests for additional information. BlackRock responded to these requests with additional written information in advance of the June Meeting.

 

 

68    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Disclosure of Investment Advisory Agreements  (continued)

 

At the June Meeting, each Board considered, among other things: (a) the nature, extent and quality of the services provided by BlackRock; (b) the investment performance of the Trust as compared with Performance Peers and other metrics, as applicable; (c) the advisory fee and the estimated cost of the services and estimated profits realized by BlackRock and its affiliates from their relationship with the Trust; (d) the Trust’s fees and expenses compared to Expense Peers; (e) the sharing of potential economies of scale; (f) fall-out benefits to BlackRock and its affiliates as a result of BlackRock’s relationship with the Trust; and (g) other factors deemed relevant by the Board Members.

Each Board also considered other matters it deemed important to the approval process, such as other payments made to BlackRock or its affiliates relating to securities lending and cash management, services related to the valuation and pricing of Trust portfolio holdings, and advice from independent legal counsel with respect to the review process and materials submitted for the Board’s review. Each Board noted the willingness of BlackRock personnel to engage in open, candid discussions with the Board. Each Board did not identify any particular information as determinative, and each Board Member may have attributed different weights to the various items considered.

A. Nature, Extent and Quality of the Services Provided by BlackRock: Each Board, including the Independent Board Members, reviewed the nature, extent and quality of services provided by BlackRock, including the investment advisory services and the resulting performance of its Trust. Throughout the year, each Board compared its Trust’s performance to the performance of a comparable group of closed-end funds, relevant benchmark, and performance metrics, as applicable. Each Board met with BlackRock’s senior management personnel responsible for investment activities, including the senior investment officers. Each Board also reviewed the materials provided by its Trust’s portfolio management team discussing the Trust’s performance and the Trust’s investment objective(s), strategies and outlook.

Each Board considered, among other factors, with respect to BlackRock: the number, education and experience of investment personnel generally and its Trust’s portfolio management team; BlackRock’s research capabilities; investments by portfolio managers in the funds they manage; portfolio trading capabilities; use of technology; commitment to compliance; credit analysis capabilities; risk analysis and oversight capabilities; and the approach to training and retaining portfolio managers and other research, advisory and management personnel. Each Board also considered BlackRock’s overall risk management program, including the continued efforts of BlackRock and its affiliates to address cybersecurity risks and the role of BlackRock’s Risk & Quantitative Analysis Group. Each Board engaged in a review of BlackRock’s compensation structure with respect to its Trust’s portfolio management team and BlackRock’s ability to attract and retain high-quality talent and create performance incentives.

In addition to investment advisory services, each Board considered the quality of the administrative and other non-investment advisory services provided to its Trust. BlackRock and its affiliates provide each Trust with certain administrative, shareholder, and other services (in addition to any such services provided to its Trust by third parties) and officers and other personnel as are necessary for the operations of the Trust. In particular, BlackRock and its affiliates provide each Trust with administrative services including, among others: (i) responsibility for disclosure documents, such as the prospectus and the statement of additional information in connection with the initial public offering and periodic shareholder reports; (ii) preparing communications with analysts to support secondary market trading of the Trust; (iii) oversight of daily accounting and pricing; (iv) responsibility for periodic filings with regulators and stock exchanges; (v) overseeing and coordinating the activities of other service providers including, among others, the Trust’s custodian, fund accountant, transfer agent, and auditor; (vi) organizing Board meetings and preparing the materials for such Board meetings; (vii) providing legal and compliance support; (viii) furnishing analytical and other support to assist the Board in its consideration of strategic issues such as the merger, consolidation or repurposing of certain closed-end funds; and (ix) performing administrative functions necessary for the operation of the Trust, such as tax reporting, expense management, fulfilling regulatory filing requirements, and shareholder call center and other services. The Board reviewed the structure and duties of BlackRock’s fund administration, shareholder services, and legal & compliance departments and considered BlackRock’s policies and procedures for assuring compliance with applicable laws and regulations.

B. The Investment Performance of the Trusts and BlackRock: Each Board, including the Independent Board Members, also reviewed and considered the performance history of its Trust. In preparation for the April Meeting, each Board was provided with reports independently prepared by Broadridge, which included a comprehensive analysis of its Trust’s performance as of December 31, 2017. The performance information is based on net asset value (NAV), and utilizes Lipper data. Lipper’s methodology calculates a fund’s total return assuming distributions are reinvested on the ex-date at a fund’s ex-date NAV. Broadridge ranks funds in quartiles, ranging from first to fourth, where first is the most desirable quartile position and fourth is the least desirable. In connection with its review, each Board received and reviewed information regarding the investment performance of its Trust as compared to its Performance Peers and a custom peer group of funds as defined by BlackRock (“Customized Peer Group”) for BFZ, BBF and BNY and the performance of BTT as compared with its custom benchmark. Each Board and its Performance Oversight Committee regularly review, and meet with Trust management to discuss, the performance of the Trust throughout the year.

In evaluating performance, each Board recognized that the performance data reflects a snapshot of a period as of a particular date and that selecting a different performance period could produce significantly different results. Further, each Board recognized that it is possible that long-term performance can be impacted by even one period of significant outperformance or underperformance, so that a single investment theme has the ability to affect long-term performance disproportionately.

The Board of BFZ noted that for the one-, three- and five-year periods reported, BFZ ranked in the fourth, third and third quartiles, respectively, against its Customized Peer Group Composite. BlackRock believes that the Customized Peer Group Composite is an appropriate performance metric for BFZ. The Composite measures a blend of total return and yield. The Board and BlackRock reviewed BFZ’s underperformance during the applicable periods. The Board was informed that, among other things, the portfolio management team’s higher quality bias and a lower relative duration posture were the primary detractors from performance.

The Board and BlackRock discussed BlackRock’s strategy for improving BFZ’s investment performance. Discussions covered topics such as performance attribution, BFZ’s investment personnel, and the resources appropriate to support BFZ’s investment processes.

The Board of BFO noted that for each of the one-, three- and five-year periods reported, BFO ranked in the fourth quartile against its Performance Universe Composite. BlackRock believes that the Composite is an appropriate performance metric for the Trust. The Composite measures a blend of total return and yield. The Board noted that BFO has a targeted maturity, and as such, has managed to achieve the specific maturity goal. The peer funds within the Performance Universe generally do not have a similar specific maturity goal.

 

 

DISCLOSURE OF INVESTMENT ADVISORY AGREEMENTS      69  


Disclosure of Investment Advisory Agreements  (continued)

 

The Board of BBF noted that for the one-, three- and five-year periods reported, BBF ranked in third, fourth, and fourth quartiles, respectively, against its Customized Peer Group Composite. BlackRock believes that the Customized Peer Group Composite is an appropriate performance metric for BBF. The Composite measures a blend of total return and yield. The Board and BlackRock reviewed BBF’s underperformance during the applicable periods. The Board was informed that, among other things, BBF’s lower relative duration posture was the primary detractor from performance over the three-year period. BBF’s overweight relative duration posture and positions in longer-dated bonds were the primary detractors from performance over the five-year period.

The Board and BlackRock discussed BlackRock’s strategy for improving BBF’s investment performance. Discussions covered topics such as performance attribution, BBF’s investment personnel, and the resources appropriate to support BBF’s investment processes.

The Board noted that for each of the one-, three- and five-year periods reported, BNY ranked in the second quartile against its Customized Peer Group Composite. BlackRock believes that the Customized Peer Group Composite is an appropriate performance metric for BNY. The Composite measures a blend of total return and yield.

The Board of BTT noted that for each of the one-, three- and five-year periods reported, BTT underperformed its customized benchmark. BlackRock believes that performance relative to the customized benchmark is an appropriate performance metric for BTT. The Board and BlackRock reviewed BTT’s underperformance during the applicable periods. The Board noted that BTT’s overweight duration positioning was the primary detractor from performance during these periods.

The Board and BlackRock discussed BlackRock’s strategy for improving BTT’s investment performance. Discussions covered topics such as performance attribution, BTT’s investment personnel, and the resources appropriate to support BTT’s investment processes.

C. Consideration of the Advisory/Management Fees and the Estimated Cost of the Services and Estimated Profits Realized by BlackRock and its Affiliates from their Relationship with the Trusts: Each Board, including the Independent Board Members, reviewed its Trust’s contractual management fee rate compared with those of its Expense Peers. The contractual management fee rate represents a combination of the advisory fee and any administrative fees, before taking into account any reimbursements or fee waivers. Each Board also compared its Trust’s total expense ratio, as well as its actual management fee rate as a percentage of total assets, to those of its Expense Peers. The total expense ratio represents a fund’s total net operating expenses, excluding any investment related expenses. The total expense ratio gives effect to any expense reimbursements or fee waivers that benefit a fund, and the actual management fee rate gives effect to any management fee reimbursements or waivers that benefit a fund. Each Board considered the services provided and the fees charged by BlackRock and its affiliates to other types of clients with similar investment mandates, as applicable, including institutional accounts and sub-advised mutual funds (including mutual funds sponsored by third parties).

Each Board received and reviewed statements relating to BlackRock’s financial condition. Each Board reviewed BlackRock’s profitability methodology and was also provided with an estimated profitability analysis that detailed the revenues earned and the expenses incurred by BlackRock for services provided to its Trust. Each Board reviewed BlackRock’s estimated profitability with respect to its Trust and other funds the Board currently oversees for the year ended December 31, 2017 compared to available aggregate estimated profitability data provided for the prior two years. Each Board reviewed BlackRock’s estimated profitability with respect to certain other U.S. fund complexes managed by the Manager and/or its affiliates. Each Board reviewed BlackRock’s assumptions and methodology of allocating expenses in the estimated profitability analysis, noting the inherent limitations in allocating costs among various advisory products. Each Board recognized that profitability may be affected by numerous factors including, among other things, fee waivers and expense reimbursements by the Manager, the types of funds managed, precision of expense allocations and business mix. As a result, calculating and comparing profitability at individual fund levels is difficult.

Each Board noted that, in general, individual fund or product line profitability of other advisors is not publicly available. Each Board reviewed BlackRock’s overall operating margin, in general, compared to that of certain other publicly-traded asset management firms. Each Board considered the differences between BlackRock and these other firms, including the contribution of technology at BlackRock, BlackRock’s expense management, and the relative product mix.

In addition, each Board considered the estimated cost of the services provided to its Trust by BlackRock, and BlackRock’s and its affiliates’ estimated profits relating to the management of the Trust and the other funds advised by BlackRock and its affiliates. As part of its analysis, each Board reviewed BlackRock’s methodology in allocating its costs of managing its Trust, to the Trust. Each Board considered whether BlackRock has the financial resources necessary to attract and retain high quality investment management personnel to perform its obligations under the Agreement for its Trust and to continue to provide the high quality of services that is expected by the Board. Each Board further considered factors including but not limited to BlackRock’s commitment of time, assumption of risk, and liability profile in servicing its Trust in contrast to what is required of BlackRock with respect to other products with similar investment mandates across the open-end fund, closed-end fund, sub-advised mutual fund, collective investment trust, and institutional separate account product channels, as applicable.

The Board of each of BFZ, BBF and BNY noted that its Trust’s contractual management fee rate ranked in the second quartile, and that the actual management fee rate and total expense ratio each ranked in the second quartile, relative to the Expense Peers.

The Board of each of BFO and BTT noted that its Trust’s contractual management fee rate ranked in the first quartile, and that the actual management fee rate and total expense ratio each ranked in the first quartile relative to the Expense Peers.

D. Economies of Scale: Each Board, including the Independent Board Members, considered the extent to which economies of scale might be realized as the assets of its Trust increase. Each Board also considered the extent to which its Trust benefits from such economies in a variety of ways, and whether there should be changes in the advisory fee rate or breakpoint structure in order to enable the Trust to more fully participate in these economies of scale. Each Board considered the Trust’s asset levels and whether the current fee was appropriate.

Based on each Board’s review and consideration of the issue, each Board concluded that most closed-end funds do not have fund level breakpoints because closed-end funds generally do not experience substantial growth after the initial public offering. They are typically priced at scale at a fund’s inception.

E. Other Factors Deemed Relevant by the Board Members: Each Board, including the Independent Board Members, also took into account other ancillary or “fall-out” benefits that BlackRock or its affiliates may derive from BlackRock’s respective relationships with its Trust, both tangible and intangible, such as BlackRock’s ability to

 

 

70    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Disclosure of Investment Advisory Agreements  (continued)

 

leverage its investment professionals who manage other portfolios and risk management personnel, an increase in BlackRock’s profile in the investment advisory community, and the engagement of BlackRock’s affiliates as service providers to the Trust, including for administrative, securities lending and cash management services. Each Board also considered BlackRock’s overall operations and its efforts to expand the scale of, and improve the quality of, its operations. Each Board also noted that, subject to applicable law, BlackRock may use and benefit from third party research obtained by soft dollars generated by certain registered fund transactions to assist in managing all or a number of its other client accounts.

In connection with its consideration of the Agreement for its Trust, each Board also received information regarding BlackRock’s brokerage and soft dollar practices. Each Board received reports from BlackRock which included information on brokerage commissions and trade execution practices throughout the year.

Each Board noted the competitive nature of the closed-end fund marketplace, and that shareholders are able to sell their Trust shares in the secondary market if they believe that the Trust’s fees and expenses are too high or if they are dissatisfied with the performance of the Trust.

Each Board also considered the various notable initiatives and projects BlackRock performed in connection with its closed-end fund product line. These initiatives included the completion of the redemption of auction rate preferred securities for all of the BlackRock closed-end funds; developing equity shelf programs; efforts to eliminate product overlap with fund mergers; ongoing services to manage leverage that has become increasingly complex; periodic evaluation of share repurchases and other support initiatives for certain BlackRock funds; and continued communications efforts with shareholders, fund analysts and financial advisers. With respect to the latter, the Independent Board Members noted BlackRock’s continued commitment to supporting the secondary market for the common shares of its closed-end funds through a comprehensive secondary market communication program designed to raise investor and analyst awareness and understanding of closed-end funds. BlackRock’s support services included, among other things: sponsoring and participating in conferences; communicating with closed-end fund analysts covering the BlackRock funds throughout the year; providing marketing and product updates for the closed-end funds; and maintaining and enhancing its closed-end fund website.

Conclusion

Each Board, including the Independent Board Members, unanimously approved the continuation of the Agreement between the Manager and its Trust for a one-year term ending June 30, 2019. Based upon its evaluation of all of the aforementioned factors in their totality, as well as other information, each Board, including the Independent Board Members, was satisfied that the terms of the Agreement for its Trust were fair and reasonable and in the best interest of the Trust and its shareholders. In arriving at its decision to approve the Agreement for its Trust, each Board did not identify any single factor or group of factors as, all-important or controlling, but considered all factors together, and different Board Members may have attributed different weights to the various factors considered. The Independent Board Members were also assisted by the advice of independent legal counsel in making this determination.

 

 

DISCLOSURE OF INVESTMENT ADVISORY AGREEMENTS      71  


Automatic Dividend Reinvestment Plans

 

Pursuant to each Trust’s Dividend Reinvestment Plan (the “Reinvestment Plan”), Common Shareholders are automatically enrolled to have all distributions of dividends and capital gains and other distributions reinvested by Computershare Trust Company, N.A. (the “Reinvestment Plan Agent”) in the respective Trust’s Common shares pursuant to the Reinvestment Plan. Shareholders who do not participate in the Reinvestment 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 name or other nominee name, then to the nominee) by the Reinvestment Plan Agent, which serves as agent for the shareholders in administering the Reinvestment Plan.

After BFZ, BBF, and BNY declare a dividend or determine to make a capital gain or other distribution, the Reinvestment Plan Agent will acquire shares for the participants’ accounts, depending upon the following circumstances, either (i) through receipt of unissued but authorized shares from the Trusts (“newly issued shares”) or (ii) by purchase of outstanding shares on the open market or on the Trust’s primary exchange (“open-market purchases”). If, on the dividend payment date, the net asset value per share (“NAV”) is equal to or less than the market price per share plus estimated brokerage commissions (such condition often referred to as a “market premium”), the Reinvestment Plan Agent will invest the dividend amount in newly issued shares acquired 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 dividend payment date, the dollar amount of the dividend will be divided by 95% of the market price on the dividend payment date. If, on the dividend payment date, the NAV is greater than the market price per share plus estimated brokerage commissions (such condition often referred to as a “market discount”), the Reinvestment Plan Agent will invest the dividend amount in shares acquired on behalf of the participants in open-market purchases. If the Reinvestment Plan Agent is unable to invest the full dividend amount in open-market purchases, or if the market discount shifts to a market premium during the purchase period, the Reinvestment Plan Agent will invest any un-invested portion in newly issued shares. Investments in newly issued shares made in this manner would be made pursuant to the same process described above and the date of issue for such newly issued shares will substitute for the dividend payment date.

After BFO and BTT declare a dividend or determine to make a capital gain or other distribution, the Reinvestment Plan Agent will acquire shares for the participants’ accounts by the purchase of outstanding shares on the open market or on BFO’s or BTT’s primary exchange (“open-market purchases”). BFO and BTT will not issue any new shares under the Reinvestment Plan.

You may elect not to participate in the Reinvestment Plan and to receive all dividends in cash by contacting the Reinvestment Plan Agent, at the address set forth below.

Participation in the Reinvestment Plan is completely voluntary and may be terminated or resumed at any time without penalty by notice if received and processed by the Reinvestment Plan Agent prior to the dividend record date. Additionally, the Reinvestment Plan Agent seeks to process notices received after the record date but prior to the payable date and such notices often will become effective by the payable date. Where late notices are not processed by the applicable payable date, such termination or resumption will be effective with respect to any subsequently declared dividend or other distribution.

The Reinvestment Plan Agent’s fees for the handling of the reinvestment of distributions will be paid by each Trust. However, each participant will pay a pro rata share of brokerage commissions incurred with respect to the Reinvestment Plan Agent’s open-market purchases in connection with the reinvestment of all distributions. The automatic reinvestment of all distributions will not relieve participants of any U.S. federal, state or local income tax that may be payable on such dividends or distributions.

Each Trust reserves the right to amend or terminate the Reinvestment Plan. There is no direct service charge to participants in the Reinvestment Plan; however, each Trust reserves the right to amend the Reinvestment Plan to include a service charge payable by the participants. Participants that request a sale of shares are subject to a $2.50 sales fee and a $0.15 per share fee. Per share fees include any applicable brokerage commissions the Reinvestment Plan Agent is required to pay. All correspondence concerning the Reinvestment Plan should be directed to Computershare Trust Company, N.A. through the internet at http://www.computershare.com/blackrock, or in writing to Computershare, P.O. Box 505000, Louisville, KY 40233, Telephone: (800) 699-1236. Overnight correspondence should be directed to the Reinvestment Plan Agent at Computershare, 462 South 4th Street, Suite 1600, Louisville, KY 40202.

 

 

72    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Trustee and Officer Information

 

Independent Trustees (a)
         

Name

Year of Birth (b)

  

Position(s) Held

(Length of Service) (c)

   Principal Occupation(s) During Past Five Years   

Number of BlackRock-Advised

Registered Investment Companies

(“RICs”) Consisting of

Investment Portfolios

(“Portfolios”) Overseen (d)

   Public Company and
Other Investment
Company Directorships
During Past Five Years

Richard E. Cavanagh

1946

  

Chair of the Board and Trustee

(Since 2007)

   Director, The Guardian Life Insurance Company of America since 1998; Board Chair, Volunteers of America (a not-for-profit organization) since 2015 (board member since 2009); Director, Arch Chemical (chemical and allied products) from 1999 to 2011; Trustee, Educational Testing Service from 1997 to 2009 and Chairman thereof from 2005 to 2009; Senior Advisor, The Fremont Group since 2008 and Director thereof since 1996; Faculty Member/Adjunct Lecturer, Harvard University since 2007; President and Chief Executive Officer, The Conference Board, Inc. (global business research organization) from 1995 to 2007.    73 RICs consisting of 73 Portfolios    None

Karen P. Robards

1950

  

Vice Chair of the Board and Trustee

(Since 2007)

   Principal of Robards & Company, LLC (consulting and private investing) since 1987; Co-founder and Director of the Cooke Center for Learning and Development (a not-for-profit organization) since 1987; Investment Banker at Morgan Stanley from 1976 to 1987.    73 RICs consisting of 73 Portfolios   

Greenhill & Co., Inc.; AtriCure, Inc.

(medical devices) from 2000 until 2017

Michael J. Castellano

1946

  

Trustee

(Since 2011)

   Chief Financial Officer of Lazard Group LLC from 2001 to 2011; Chief Financial Officer of Lazard Ltd from 2004 to 2011; Director, Support Our Aging Religious (non-profit) from 2009 to June 2015 and since 2017; Director, National Advisory Board of Church Management at Villanova University since 2010; Trustee, Domestic Church Media Foundation since 2012; Director, CircleBlack Inc. (financial technology company) since 2015.    73 RICs consisting of 73 Portfolios    None

Cynthia L. Egan

1955

  

Trustee

(Since 2016)

   Advisor, U.S. Department of the Treasury from 2014 to 2015; President, Retirement Plan Services for T. Rowe Price Group, Inc. from 2007 to 2012; executive positions within Fidelity Investments from 1989 to 2007.    73 RICs consisting of 73 Portfolios    Unum (insurance); The Hanover Insurance Group (insurance); Envestnet (investment platform) from 2013 until 2016

Frank J. Fabozzi

1948

  

Trustee

(Since 2007)

   Editor of and Consultant for The Journal of Portfolio Management since 2006; Professor of Finance, EDHEC Business School since 2011; Visiting Professor, Princeton University from 2013 to 2014 and since 2016; Professor in the Practice of Finance and Becton Fellow, Yale University School of Management from 2006 to 2011.    73 RICs consisting of 73 Portfolios    None

R. Glenn Hubbard

1958

  

Trustee

(Since 2007)

   Dean, Columbia Business School since 2004; Faculty member, Columbia Business School since 1988.    73 RICs consisting of 73 Portfolios    ADP (data and information services); Metropolitan Life Insurance Company (insurance)

W. Carl Kester

1951

  

Trustee

(Since 2007)

   George Fisher Baker Jr. Professor of Business Administration, Harvard Business School since 2008, Deputy Dean for Academic Affairs from 2006 to 2010, Chairman of the Finance Unit, from 2005 to 2006, Senior Associate Dean and Chairman of the MBA Program from 1999 to 2005; Member of the faculty of Harvard Business School since 1981.    73 RICs consisting of 73 Portfolios    None

 

 

TRUSTEE AND OFFICER INFORMATION      73  


Trustee and Officer Information  (continued)

 

Independent Trustees (a) (continued)
         

Name

Year of Birth (b)

  

Position(s) Held

(Length of Service) (c)

  Principal Occupation(s) During Past Five Years   

Number of BlackRock-Advised

Registered Investment Companies

(“RICs”) Consisting of

Investment Portfolios

(“Portfolios”) Overseen (d)

   Public Company and
Other Investment
Company Directorships
During Past Five Years

Catherine A. Lynch

1961

  

Trustee

(Since 2016)

  Chief Executive Officer, Chief Investment Officer and various other positions, National Railroad Retirement Investment Trust from 2003 to 2016; Associate Vice President for Treasury Management, The George Washington University from 1999 to 2003; Assistant Treasurer, Episcopal Church of America from 1995 to 1999.    73 RICs consisting of 73 Portfolios    None
         Interested Trustees (a)(e)          
         

Name

Year of Birth (b)

  

Position(s) Held

(Length of Service) (c)

  Principal Occupation(s) During Past Five Years   

Number of BlackRock-Advised

Registered Investment Companies

(“RICs”) Consisting of
Investment Portfolios

(“Portfolios”) Overseen (d)

   Public Company and
Investment Company
Directorships During
Past Five Years

Robert Fairbairn

1965

  

Trustee

(Since 2018)

  Senior Managing Director of BlackRock, Inc. since 2010; oversees BlackRock's Strategic Partner Program and Strategic Product Management Group; Member of BlackRock’s Global Executive and Global Operating Committees; Co-Chair of BlackRock's Human Capital Committee; Global Head of BlackRock's Retail and iShares® businesses from 2012 to 2016.    130 RICs consisting of 317 Portfolios    None

John M. Perlowski

1964

  

Trustee

(Since 2015);

President and Chief Executive Officer

(Since 2010)

  Managing Director of BlackRock, Inc. since 2009; Head of BlackRock Global Accounting and Product Services since 2009; Advisory Director of Family Resource Network (charitable foundation) since 2009.    130 RICs consisting of 317 Portfolios    None

(a) The address of each Trustee is c/o BlackRock, Inc., 55 East 52nd Street, New York, NY 10055.

(b) Each Independent Trustee will serve until his or her successor is elected and qualifies, or until his or her earlier death, resignation, retirement or removal, or until December 31 of the year in which he or she turns 75. The maximum age limitation may be waived as to any Trustee by action of a majority of the Trustees upon finding of good cause therefor.

(c) Following the combination of Merrill Lynch Investment Managers, L.P. (“MLIM”) and BlackRock, Inc. (“BlackRock”) in September 2006, the various legacy MLIM and legacy BlackRock fund boards were realigned and consolidated into three new fund boards in 2007. As a result, although the chart shows certain Independent Trustees as joining the Board in 2007, each Trustee first became a member of the boards of other legacy MLIM or legacy BlackRock funds as follows: Richard E. Cavanagh, 1994; Frank J. Fabozzi, 1988; R. Glenn Hubbard, 2004; W. Carl Kester, 1995 and Karen P. Robards, 1998.

(d) For purposes of this chart, "RICs" refers to investment companies registered under the 1940 Act and "Portfolios" refers to the investment programs of the BlackRock-advised funds. The Closed-End Complex is comprised of 73 RICs consisting of 73 Portfolios. Mr. Fairbairn and Mr. Perlowski are also board members of the BlackRock Equity-Bond Complex and the BlackRock Equity-Liquidity Complex.

(e) Mr. Fairbairn and Mr. Perlowski are both "interested persons," as defined in the 1940 Act, of the Trust based on their positions with BlackRock and its affiliates. Mr. Fairbairn and Mr. Perlowski are also board members of the BlackRock Equity-Bond Complex and the BlackRock Equity-Liquidity Complex. Interested Trustees serve until their resignation, removal or death, or until December 31 of the year in which they turn 72. The maximum age limitation may be waived as to any Trustee by action of a majority of the Trustees upon a finding of good cause therefor.

 

 

74    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Trustee and Officer Information  (continued)

 

Officers Who Are Not Trustees (a)
     

Name

Year of Birth (b)

  

Position(s) Held

(Length of Service)

   Principal Occupation(s) During Past Five Years

Jonathan Diorio

1980

  

Vice President

(Since 2015)

   Managing Director of BlackRock, Inc. since 2015; Director of BlackRock, Inc. from 2011 to 2015.

Neal J. Andrews

1966

  

Chief Financial Officer

(Since 2007)

   Managing Director of BlackRock, Inc. since 2006.

Jay M. Fife

1970

  

Treasurer

(Since 2007)

   Managing Director of BlackRock, Inc. since 2007.

Charles Park

1967

  

Chief Compliance Officer

(Since 2014)

   Anti-Money Laundering Compliance Officer for the BlackRock-advised Funds in the Equity-Bond Complex, the Equity-Liquidity Complex and the Closed-End Complex from 2014 to 2015; Chief Compliance Officer of BlackRock Advisors, LLC and the BlackRock-advised Funds in the Equity-Bond Complex, the Equity-Liquidity Complex and the Closed-End Complex since 2014; Principal of and Chief Compliance Officer for iShares® Delaware Trust Sponsor LLC since 2012 and BlackRock Fund Advisors (“BFA”) since 2006; Chief Compliance Officer for the BFA-advised iShares® exchange traded funds since 2006; Chief Compliance Officer for BlackRock Asset Management International Inc. since 2012.

Janey Ahn

1975

  

Secretary

(Since 2012)

   Managing Director of BlackRock, Inc. since 2018; Director of BlackRock, Inc. from 2009 to 2017.

(a) The address of each Officer is c/o BlackRock, Inc., 55 East 52nd Street, New York, NY 10055.

(b) Officers of the Trust serve at the pleasure of the Board.

 

Investment Adviser

BlackRock Advisors, LLC

Wilmington, DE 19809

Accounting Agent and Custodian

State Street Bank and Trust Company

Boston, MA 02111

Transfer Agent

Computershare Trust Company, N.A.

Canton, MA 02021

VRDP Tender and Paying Agent, VMTP Tender and Paying Agent and RVMTP Redemption and Paying Agent

The Bank of New York Mellon

New York, NY 10286

VRDP Liquidity Provider

Barclays Bank PLC

New York, NY 10019

VRDP Remarketing Agent

Barclays Capital, Inc.

New York, NY 10019

Independent Registered Public Accounting Firm

Deloitte & Touche LLP

Boston, MA 02116

Legal Counsel

Skadden, Arps, Slate, Meagher & Flom LLP

Boston, MA 02116

Address of the Trusts

100 Bellevue Parkway

Wilmington, DE 19809

 

 

 

TRUSTEE AND OFFICER INFORMATION      75  


Additional Information

 

Section 19(a) Notices

BFZ’s and BBF’s amounts and sources of distributions reported are estimates and are being provided to you pursuant to regulatory requirements and are not being provided for tax reporting purposes. The actual amounts and sources for tax reporting purposes will depend upon each Trust’s investment experience during the remainder of the fiscal year and may be subject to changes based on tax regulations. Each Trust will provide a Form 1099-DIV each calendar year that will tell you how to report these distributions for U.S. federal income tax purposes.

 

    Total Fiscal Year to Date
Cumulative Distributions by Character
    Percentage of Fiscal Year to Date
Cumulative Distributions by Character
 
     Net
Investment
Income
    Net Realized
Capital Gains
Short Term
    Net Realized
Capital Gains
Long Term
    Return of
Capital
    Total Per
Common
Share
    Net
Investment
Income
    Net Realized
Capital Gains
Short Term
    Net Realized
Capital Gains
Long Term
    Return of
Capital
    Total Per
Common
Share
 

BFZ

  $ 0.652621     $     $     $ 0.017379     $ 0.670000       97     0     0     3     100

BBF

    0.794383                   0.021117       0.815500       97     0     0     3     100

BFZ and BBF estimate that each has distributed more than its income and net realized capital gains; therefore, a portion of your distribution may be a return of capital. A return of capital may occur, for example, when some or all of the money that you invested in the Fund is paid back to you. A return of capital does not necessarily reflect the Fund’s investment performance and should not be confused with ‘yield’ or ‘income’. When distributions exceed total return performance, the difference will reduce the Fund’s net asset value per share.

Section 19(a) notices for the Trusts, as applicable, are available on the BlackRock website at http:// www.blackrock.com.

Proxy Results

The Annual Meeting of Shareholders was held on July 30, 2018 for shareholders of record on May 31, 2018, to elect trustee nominees for each Trust. There were no broker non-votes with regard to any of the Trusts.

Shareholders elected the Class II Trustees & Class III Trustee as follows:

 

  

 

  Robert Fairbairn     Catherine A. Lynch     Karen P. Robards     Frank J. Fabozzi  (a)  
     Votes For     Votes Withheld     Votes For     Votes Withheld     Votes For     Votes Withheld     Votes For     Votes Withheld  

BFZ

    29,318,870       655,783       29,395,095       579,558       29,395,456       579,197       1,713       0  

BFO

    4,962,425       218,911       4,962,425       218,911       4,962,425       218,911       4,823,897       357,439  

BTT

    66,453,479       1,102,181       66,498,266       1,057,394       66,488,275       1,067,385       150       0  

BBF

    9,277,541       376,056       9,285,127       368,470       9,265,201       388,396       520       0  

BNY

    11,229,238       414,307       11,512,464       131,081       11,509,287       134,258       945       0  

For the Trusts listed above, Trustees whose term of office continued after the Annual Meeting of Shareholders because they were not up for election are Michael J. Castellano, Richard E. Cavanagh, Cynthia L. Egan, R. Glenn Hubbard, W. Carl Kester and John M. Perlowski.

 

  (a) 

Voted on by holders of Preferred Shares only for BFZ, BTT, BBF, and BNY.

 

Trust Certification

Certain Trusts are listed for trading on the NYSE and have filed with the NYSE their annual chief executive officer certification regarding compliance with the NYSE’s listing standards. The Trusts filed with the SEC the certification of its chief executive officer and chief financial officer required by section 302 of the Sarbanes-Oxley Act.

Dividend Policy

Each Trust’s dividend policy is to distribute all or a portion of its net investment income to its shareholders on a monthly basis. In order to provide shareholders with a more stable level of distributions, the Trusts may at times pay out less than the entire amount of net investment income earned in any particular month and may at times in any particular month pay out such accumulated but undistributed income in addition to net investment income earned in that month. As a result, the distributions paid by the Trusts for any particular month may be more or less than the amount of net investment income earned by the Trusts during such month. The Trusts’ current accumulated but undistributed net investment income, if any, is disclosed in the Statements of Assets and Liabilities, which comprises part of the financial information included in this report.

General Information

The Trusts do not make available copies of their Statements of Additional Information because the Trusts’ shares are not continuously offered, which means that the Statement of Additional Information of each Trust has not been updated after completion of the respective Trust’s offerings and the information contained in each Trust’s Statement of Additional Information may have become outdated.

During the period, there were no material changes in the Trusts’ investment objectives or policies or to the Trusts’ charters or by-laws that would delay or prevent a change of control of the Trusts that were not approved by the shareholders or in the principal risk factors associated with investment in the Trusts. Except as disclosed on page 76, there have been no changes in the persons who are primarily responsible for the day-to-day management of the Trusts’ portfolios.

Quarterly performance, semi-annual and annual reports, current net asset value and other information regarding the Trusts may be found on BlackRock’s website, which can be accessed at http://www.blackrock.com. Any reference to BlackRock’s website in this report is intended to allow investors public access to information regarding the Trusts and does not, and is not intended to, incorporate BlackRock’s website in this report.

 

 

76    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


Additional Information  (continued)

 

Electronic Delivery

Shareholders can sign up for e-mail notifications of quarterly statements, annual and semi-annual shareholder reports by enrolling in the electronic delivery program. Electronic copies of shareholder reports are available on BlackRock’s website.

To enroll in electronic delivery:

Shareholders Who Hold Accounts with Investment Advisers, Banks or Brokerages:

Please contact your financial advisor. Please note that not all investment advisers, banks or brokerages may offer this service.

Householding

The Trusts will mail only one copy of shareholder documents, annual and semi-annual reports and proxy statements, to shareholders with multiple accounts at the same address. This practice is commonly called “householding” and is intended to reduce expenses and eliminate duplicate mailings of shareholder documents. Mailings of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please call the Trusts at (800) 882-0052.

Availability of Quarterly Schedule of Investments

The Trusts file their complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The Trusts’ Forms N-Q are available on the SEC’s website at http://www.sec.gov and may also be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room or how to access documents on the SEC’s website without charge may be obtained by calling (800) SEC-0330. The Trusts’ Forms N-Q may also be obtained upon request and without charge by calling (800) 882-0052.

Availability of Proxy Voting Policies and Procedures

A description of the policies and procedures that the Trusts use to determine how to vote proxies relating to portfolio securities is available upon request and without charge (1) by calling (800) 882-0052; (2) at http://www.blackrock.com; and (3) on the SEC’s website at http://www.sec.gov.

Availability of Proxy Voting Record

Information about how the Trusts voted proxies relating to securities held in the Trusts’ portfolios during the most recent 12-month period ended June 30 is available upon request and without charge (1) at http://www.blackrock.com; or by calling (800) 882-0052; and (2) on the SEC’s website at http://www.sec.gov.

Availability of Trust Updates

BlackRock will update performance and certain other data for the Trusts on a monthly basis on its website in the “Closed-end Funds” section of http://www.blackrock.com as well as certain other material information as necessary from time to time. Investors and others are advised to check the website for updated performance information and the release of other material information about the Trusts. This reference to BlackRock’s website is intended to allow investors public access to information regarding the Trusts and does not, and is not intended to, incorporate BlackRock’s website in this report.

BlackRock Privacy Principles

BlackRock is committed to maintaining the privacy of its current and former fund investors and individual clients (collectively, “Clients”) and to safeguarding their non-public personal information. The following information is provided to help you understand what personal information BlackRock collects, how we protect that information and why in certain cases we share such information with select parties.

If you are located in a jurisdiction where specific laws, rules or regulations require BlackRock to provide you with additional or different privacy-related rights beyond what is set forth below, then BlackRock will comply with those specific laws, rules or regulations.

BlackRock obtains or verifies personal non-public information from and about you from different sources, including the following: (i) information we receive from you or, if applicable, your financial intermediary, on applications, forms or other documents; (ii) information about your transactions with us, our affiliates, or others; (iii) information we receive from a consumer reporting agency; and (iv) from visits to our websites.

BlackRock does not sell or disclose to non-affiliated third parties any non-public personal information about its Clients, except as permitted by law or as is necessary to respond to regulatory requests or to service Client accounts. These non-affiliated third parties are required to protect the confidentiality and security of this information and to use it only for its intended purpose.

We may share information with our affiliates to service your account or to provide you with information about other BlackRock products or services that may be of interest to you. In addition, BlackRock restricts access to non-public personal information about its Clients to those BlackRock employees with a legitimate business need for the information. BlackRock maintains physical, electronic and procedural safeguards that are designed to protect the non-public personal information of its Clients, including procedures relating to the proper storage and disposal of such information.

 

 

ADDITIONAL INFORMATION      77  


Glossary of Terms Used in this Report

 

Portfolio Abbreviations
AGC    Assured Guarantee Corp.
AGM    Assured Guaranty Municipal Corp.
AMBAC    American Municipal Bond Assurance Corp.
AMT    Alternative Minimum Tax (subject to)
ARB    Airport Revenue Bonds
BAM    Build America Mutual Assurance Co.
BARB    Building Aid Revenue Bonds
CAB    Capital Appreciation Bonds
CIFG    CIFG Assurance North America, Inc.
COP    Certificates of Participation
EDA    Economic Development Authority
EDC    Economic Development Corp.
ERB    Education Revenue Bonds
FHA    Federal Housing Administration
GAN    Grant Anticipation Notes
GARB    General Airport Revenue Bonds
GO    General Obligation Bonds
HFA    Housing Finance Agency
IDA    Industrial Development Authority
IDB    Industrial Development Board
ISD    Independent School District
LRB    Lease Revenue Bonds
M/F    Multi-Family
MRB    Mortgage Revenue Bonds
NPFGC    National Public Finance Guarantee Corp.
PILOT    Payment in Lieu of Taxes
PSF-GTD    Permanent School Fund Guaranteed
RB    Revenue Bonds
S/F    Single-Family
SONYMA    State of New York Mortgage Agency
VRDN    Variable Rate Demand Notes
 

 

 

78    2018 BLACKROCK ANNUAL REPORT TO SHAREHOLDERS


This report is intended for current holders. It is not a prospectus. Past performance results shown in this report should not be considered a representation of future performance. The Trusts have leveraged their Common Shares, which creates risks for Common Shareholders, including the likelihood of greater volatility of net asset value and market price of the Common Shares, and the risk that fluctuations in short-term interest rates may reduce the Common Shares’ yield. Statements and other information herein are as dated and are subject to change.

 

LOGO

 

CEF-BK6-7/18-AR    LOGO


Item 2 –

Code of Ethics – The registrant (or the “Fund”) has adopted a code of ethics, as of the end of the period covered by this report, applicable to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. During the period covered by this report, the code of ethics was amended to update certain information and to make other non-material changes. During the period covered by this report, there have been no waivers granted under the code of ethics. The registrant undertakes to provide a copy of the code of ethics to any person upon request, without charge, who calls 1-800-882-0052, option 4.

 

Item 3 –

Audit Committee Financial Expert – The registrant’s board of directors (the “board of directors”), has determined that (i) the registrant has the following audit committee financial experts serving on its audit committee and (ii) each audit committee financial expert is independent:

Michael Castellano

Frank J. Fabozzi

W. Carl Kester

Catherine A. Lynch

Karen P. Robards

The registrant’s board of directors has determined that W. Carl Kester and Karen P. Robards qualify as financial experts pursuant to Item 3(c)(4) of Form N-CSR.

Prof. Kester has a thorough understanding of generally accepted accounting principles, financial statements and internal control over financial reporting as well as audit committee functions. Prof. Kester has been involved in providing valuation and other financial consulting services to corporate clients since 1978. Prof. Kester’s financial consulting services present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised by the registrant’s financial statements.

Ms. Robards has a thorough understanding of generally accepted accounting principles, financial statements and internal control over financial reporting as well as audit committee functions. Ms. Robards has been Principal of Robards & Company, a financial advisory firm, since 1987. Ms. Robards was formerly an investment banker for more than 10 years where she was responsible for evaluating and assessing the performance of companies based on their financial results. Ms. Robards has over 30 years of experience analyzing financial statements. She also is a member of the audit committee of one publicly held company and a non-profit organization.

Under applicable securities laws, a person determined to be an audit committee financial expert will not be deemed an “expert” for any purpose, including without limitation for the purposes of Section 11 of the Securities Act of 1933, as a result of being designated or identified as an audit committee financial expert. The designation or identification as an audit committee financial expert does not impose on such person any duties, obligations, or liabilities greater than the duties, obligations, and liabilities imposed on such person as a member of the audit committee and board of directors in the absence of such designation or identification. The designation or identification of a person as an audit committee financial expert does not affect the duties, obligations, or liability of any other member of the audit committee or board of directors.

 

2


Item 4 –

Principal Accountant Fees and Services

The following table presents fees billed by Deloitte & Touche LLP (“D&T”) in each of the last two fiscal years for the services rendered to the Fund:

 

         
     (a) Audit Fees   (b) Audit-Related  Fees1   (c) Tax Fees2   (d) All Other Fees
Entity Name       Current
    Fiscal Year    
End
  Previous
    Fiscal Year    
End
  Current
    Fiscal Year    
End
  Previous
    Fiscal Year    
End
  Current
    Fiscal Year    
End
  Previous
    Fiscal Year    
End
  Current
    Fiscal Year    
End
  Previous
    Fiscal Year    
End
BlackRock Municipal 2030 Target Term Trust   $32,334   $32,334   $0   $0   $13,400   $13,362   $0   $0

The following table presents fees billed by D&T that were required to be approved by the registrant’s audit committee (the “Committee”) for services that relate directly to the operations or financial reporting of the Fund and that are rendered on behalf of BlackRock Advisors, LLC (“Investment Adviser” or “BlackRock”) and entities controlling, controlled by, or under common control with BlackRock (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) that provide ongoing services to the Fund (“Affiliated Service Providers”):

 

     
                 Current Fiscal Year End                            Previous Fiscal Year End             

(b) Audit-Related Fees1

  $0   $0

(c) Tax Fees2

  $0   $0

(d) All Other Fees3

  $2,274,000   $2,129,000

1 The nature of the services includes assurance and related services reasonably related to the performance of the audit or review of financial statements not included in Audit Fees, including accounting consultations, agreed-upon procedure reports, attestation reports, comfort letters, out-of-pocket expenses and internal control reviews not required by regulators.

2 The nature of the services includes tax compliance and/or tax preparation, including services relating to the filing or amendment of federal, state or local income tax returns, regulated investment company qualification reviews, taxable income and tax distribution calculations.

3 Non-audit fees of $2,274,000 and $2,129,000 for the current fiscal year and previous fiscal year, respectively, were paid to the Fund’s principal accountant in their entirety by BlackRock, in connection with services provided to the Affiliated Service Providers of the Fund and of certain other funds sponsored and advised by BlackRock or its affiliates for a service organization review and an accounting research tool subscription. These amounts represent aggregate fees paid by BlackRock and were not allocated on a per fund basis.

(e)(1) Audit Committee Pre-Approval Policies and Procedures:

The Committee has adopted policies and procedures with regard to the pre-approval of services. Audit, audit-related and tax compliance services provided to the registrant on an annual basis require specific pre-approval by the Committee. The Committee also must approve other non-audit services provided to the registrant and those non-audit services provided to the Investment Adviser and Affiliated Service Providers that relate directly to the operations and the financial reporting of the registrant. Certain of these non-audit services that the Committee believes are (a) consistent with the SEC’s auditor independence rules and (b) routine and recurring services that will not impair the independence of the independent accountants may be approved by the Committee without consideration on a specific case-by-case basis (“general pre-approval”). The term of any general pre-approval is 12 months from the date of the pre-approval, unless the Committee provides for a different period. Tax or other non-audit services provided to the registrant which have a direct impact on the operations or financial reporting of the registrant will only be deemed pre-approved provided that any individual project does not exceed $10,000 attributable to the registrant or

 

3


$50,000 per project. For this purpose, multiple projects will be aggregated to determine if they exceed the previously mentioned cost levels.

Any proposed services exceeding the pre-approved cost levels will require specific pre-approval by the Committee, as will any other services not subject to general pre-approval (e.g., unanticipated but permissible services). The Committee is informed of each service approved subject to general pre-approval at the next regularly scheduled in-person board meeting. At this meeting, an analysis of such services is presented to the Committee for ratification. The Committee may delegate to the Committee Chairman the authority to approve the provision of and fees for any specific engagement of permitted non-audit services, including services exceeding pre-approved cost levels.

(e)(2) None of the services described in each of Items 4(b) through (d) were approved by the Committee pursuant to the de minimis exception in paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.

(f) Not Applicable

(g) The aggregate non-audit fees, defined as the sum of the fees shown under “Audit-Related Fees,” “Tax Fees” and “All Other Fees,” paid to the accountant for services rendered by the accountant to the registrant, the Investment Adviser and the Affiliated Service Providers were:

 

Entity Name  

    Current Fiscal Year         

End

 

    Previous Fiscal Year    

End

BlackRock Municipal 2030 Target Term Trust   $13,400   $13,362

Additionally, the amounts billed by D&T in connection with services provided to the Affiliated Service Providers of the Fund and of other funds sponsored or advised by BlackRock or its affiliates during the current and previous fiscal years for a service organization review and an accounting research tool subscription were:

 

Current Fiscal    
Year End    
  Previous Fiscal    
Year End    
$2,274,000       $2,129,000    

These amounts represent aggregate fees paid by BlackRock and were not allocated on a per fund basis.

(h) The Committee has considered and determined that the provision of non-audit services that were rendered to the Investment Adviser, and the Affiliated Service Providers that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant’s independence.

 

Item 5 –

Audit Committee of Listed Registrants

 

  (a)

The following individuals are members of the registrant’s separately-designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(58)(A)):

 

4


Michael Castellano

Frank J. Fabozzi

W. Carl Kester

Catherine A. Lynch

Karen P. Robards

 

  (b)

Not Applicable

 

Item 6 –

Investments

(a) The registrant’s Schedule of Investments is included as part of the Report to Stockholders filed under Item 1 of this Form.

(b) Not Applicable due to no such divestments during the semi-annual period covered since the previous Form N-CSR filing.

 

Item 7 –

Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies – The board of directors has delegated the voting of proxies for the Fund’s portfolio securities to the Investment Adviser pursuant to the Investment Adviser’s proxy voting guidelines. Under these guidelines, the Investment Adviser will vote proxies related to Fund securities in the best interests of the Fund and its stockholders. From time to time, a vote may present a conflict between the interests of the Fund’s stockholders, on the one hand, and those of the Investment Adviser, or any affiliated person of the Fund or the Investment Adviser, on the other. In such event, provided that the Investment Adviser’s Equity Investment Policy Oversight Committee, or a sub-committee thereof (the “Oversight Committee”) is aware of the real or potential conflict or material non-routine matter and if the Oversight Committee does not reasonably believe it is able to follow its general voting guidelines (or if the particular proxy matter is not addressed in the guidelines) and vote impartially, the Oversight Committee may retain an independent fiduciary to advise the Oversight Committee on how to vote or to cast votes on behalf of the Investment Adviser’s clients. If the Investment Adviser determines not to retain an independent fiduciary, or does not desire to follow the advice of such independent fiduciary, the Oversight Committee shall determine how to vote the proxy after consulting with the Investment Adviser’s Portfolio Management Group and/or the Investment Adviser’s Legal and Compliance Department and concluding that the vote cast is in its client’s best interest notwithstanding the conflict. A copy of the Fund’s Proxy Voting Policy and Procedures are attached as Exhibit 99.PROXYPOL. Information on how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available without charge, (i) at www.blackrock.com and (ii) on the SEC’s website at http://www.sec.gov.

 

Item 8 –

Portfolio Managers of Closed-End Management Investment Companies

(a)(1) As of the date of filing this Report:

The registrant is managed by a team of investment professionals comprised of Theodore R. Jaeckel, Jr., CFA, Managing Director at BlackRock, and Phillip Soccio, CFA, Director at BlackRock. Each is a member of BlackRock’s municipal tax-exempt management group. Each is jointly responsible for the day-to-day management of the registrant’s portfolio, which includes setting the registrant’s overall investment strategy, overseeing the management of

 

5


the registrant and/or selection of its investments. Messrs. Jaeckel and Soccio have been members of the registrant’s portfolio management team since 2012.

 

 Portfolio Manager   Biography
 Theodore R. Jaeckel, Jr., CFA  

Managing Director of BlackRock since 2006; Managing Director of Merrill Lynch Investment Managers, L.P. (“MLIM”) from 2005 to 2006; Director of MLIM from 1997 to 2005.

 Phillip Soccio, CFA  

Director of BlackRock since 2009; Vice President of BlackRock from 2005 to 2008.

(a)(2) As of July 31, 2018:

 

    

(ii) Number of Other Accounts Managed

and Assets by Account Type

 

(iii) Number of Other Accounts and

Assets for Which Advisory Fee is

Performance-Based

(i) Name of

Portfolio Manager

 

Other

Registered

    Investment    

Companies

 

    Other Pooled    

Investment

Vehicles

 

Other

    Accounts    

 

Other

Registered

    Investment    

Companies

 

    Other Pooled    

Investment

Vehicles

 

Other

    Accounts    

Theodore R. Jaeckel, Jr., CFA   36   0   0   0   0   0
    $23.04 Billion   $0   $0   $0   $0   $0
Phillip Soccio, CFA   18   0   0   0   0   0
    $4.63 Billion   $0   $0   $0   $0   $0

(iv)    Portfolio Manager Potential Material Conflicts of Interest

BlackRock has built a professional working environment, firm-wide compliance culture and compliance procedures and systems designed to protect against potential incentives that may favor one account over another. BlackRock has adopted policies and procedures that address the allocation of investment opportunities, execution of portfolio transactions, personal trading by employees and other potential conflicts of interest that are designed to ensure that all client accounts are treated equitably over time. Nevertheless, BlackRock furnishes investment management and advisory services to numerous clients in addition to the Fund, and BlackRock may, consistent with applicable law, make investment recommendations to other clients or accounts (including accounts which are hedge funds or have performance or higher fees paid to BlackRock, or in which portfolio managers have a personal interest in the receipt of such fees), which may be the same as or different from those made to the Fund. In addition, BlackRock, Inc., its affiliates and significant shareholders and any officer, director, shareholder or employee may or may not have an interest in the securities whose purchase and sale BlackRock recommends to the Fund. BlackRock, Inc., or any of its affiliates or significant shareholders, or any officer, director, shareholder, employee or any member of their families may take different actions than those recommended to the Fund by BlackRock with respect to the same securities. Moreover, BlackRock may refrain from rendering any advice or services concerning securities of companies of which any of BlackRock, Inc.’s (or its affiliates’ or significant shareholders’) officers, directors or employees are directors or officers, or companies as to which BlackRock, Inc. or any of its affiliates or significant shareholders or the officers, directors and employees of any of them has any substantial economic interest or possesses material non-public information. Certain portfolio managers also may manage accounts whose investment strategies may at times

 

6


be opposed to the strategy utilized for a fund. It should also be noted that a portfolio manager may be managing hedge fund and/or long only accounts, or may be part of a team managing hedge fund and/or long only accounts, subject to incentive fees. Such portfolio managers may therefore be entitled to receive a portion of any incentive fees earned on such accounts. Currently, the portfolio managers of this Fund are not entitled to receive a portion of incentive fees of other accounts.

As a fiduciary, BlackRock owes a duty of loyalty to its clients and must treat each client fairly. When BlackRock purchases or sells securities for more than one account, the trades must be allocated in a manner consistent with its fiduciary duties. BlackRock attempts to allocate investments in a fair and equitable manner among client accounts, with no account receiving preferential treatment. To this end, BlackRock, Inc. has adopted policies that are intended to ensure reasonable efficiency in client transactions and provide BlackRock with sufficient flexibility to allocate investments in a manner that is consistent with the particular investment discipline and client base, as appropriate.

(a)(3) As of July 31, 2018:

Portfolio Manager Compensation Overview

The discussion below describes the portfolio managers’ compensation as of July 31, 2018.

BlackRock’s financial arrangements with its portfolio managers, its competitive compensation and its career path emphasis at all levels reflect the value senior management places on key resources. Compensation may include a variety of components and may vary from year to year based on a number of factors. The principal components of compensation include a base salary, a performance-based discretionary bonus, participation in various benefits programs and one or more of the incentive compensation programs established by BlackRock.

Base compensation. Generally, portfolio managers receive base compensation based on their position with the firm.

Discretionary Incentive Compensation. Discretionary incentive compensation is a function of several components: the performance of BlackRock, Inc., the performance of the portfolio manager’s group within BlackRock, the investment performance, including risk-adjusted returns, of the firm’s assets under management or supervision by that portfolio manager relative to predetermined benchmarks, and the individual’s performance and contribution to the overall performance of these portfolios and BlackRock. In most cases, these benchmarks are the same as the benchmark or benchmarks against which the performance of the Funds or other accounts managed by the portfolio managers are measured. Among other things, BlackRock’s Chief Investment Officers make a subjective determination with respect to each portfolio manager’s compensation based on the performance of the Funds and other accounts managed by each portfolio manager relative to the various benchmarks. Performance of fixed income funds is measured on a pre-tax and/or after-tax basis over various time periods including 1-, 3- and 5- year periods, as applicable. With respect to these portfolio managers, such benchmarks for the Fund and other accounts are: a combination of market-based indices (e.g., Standard & Poor’s Municipal Bond Index), certain customized indices and certain fund industry peer groups.

 

7


Distribution of Discretionary Incentive Compensation. Discretionary incentive compensation is distributed to portfolio managers in a combination of cash, deferred BlackRock, Inc. stock awards, and/or deferred cash awards that notionally track the return of certain BlackRock investment products.

Portfolio managers receive their annual discretionary incentive compensation in the form of cash. Portfolio managers whose total compensation is above a specified threshold also receive deferred BlackRock, Inc. stock awards annually as part of their discretionary incentive compensation. Paying a portion of discretionary incentive compensation in the form of deferred BlackRock, Inc. stock puts compensation earned by a portfolio manager for a given year “at risk” based on BlackRock’s ability to sustain and improve its performance over future periods. In some cases, additional deferred BlackRock, Inc. stock may be granted to certain key employees as part of a long-term incentive award to aid in retention, align interests with long-term shareholders and motivate performance. Deferred BlackRock, Inc. stock awards are generally granted in the form of BlackRock, Inc. restricted stock units that vest pursuant to the terms of the applicable plan and, once vested, settle in BlackRock, Inc. common stock. The portfolio managers of this Fund have deferred BlackRock, Inc. stock awards.

For certain portfolio managers, a portion of the discretionary incentive compensation is also distributed in the form of deferred cash awards that notionally track the returns of select BlackRock investment products they manage, which provides direct alignment of portfolio manager discretionary incentive compensation with investment product results. Deferred cash awards vest ratably over a number of years and, once vested, settle in the form of cash. Only portfolio managers who manage specified products and whose total compensation is above a specified threshold are eligible to participate in the deferred cash award program.

Other Compensation Benefits. In addition to base salary and discretionary incentive compensation, portfolio managers may be eligible to receive or participate in one or more of the following:

Incentive Savings Plans — BlackRock, Inc. has created a variety of incentive savings plans in which BlackRock, Inc. employees are eligible to participate, including a 401(k) plan, the BlackRock Retirement Savings Plan (RSP), and the BlackRock Employee Stock Purchase Plan (ESPP). The employer contribution components of the RSP include a company match equal to 50% of the first 8% of eligible pay contributed to the plan capped at $5,000 per year, and a company retirement contribution equal to 3-5% of eligible compensation up to the Internal Revenue Service limit ($275,000 for 2018). The RSP offers a range of investment options, including registered investment companies and collective investment funds managed by the firm. BlackRock, Inc. contributions follow the investment direction set by participants for their own contributions or, absent participant investment direction, are invested into a target date fund that corresponds to, or is closest to, the year in which the participant attains age 65. The ESPP allows for investment in BlackRock, Inc. common stock at a 5% discount on the fair market value of the stock on the purchase date. Annual participation in the ESPP is limited to the purchase of 1,000 shares of common stock or a dollar value of $25,000 based on its fair market value on the purchase date. All of the eligible portfolio managers are eligible to participate in these plans.

 

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(a)(4) Beneficial Ownership of Securities – As of July 31, 2018.

 

Portfolio Manager    Dollar Range of Equity Securities
of the Fund Beneficially Owned
Theodore R. Jaeckel, Jr., CFA        $10,001 - $50,000
Phillip Soccio, CFA    $10,001 - $50,000

(b) Not Applicable

 

Item 9 –

Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers – Not Applicable due to no such purchases during the period covered by this report.

 

Item 10 –

Submission of Matters to a Vote of Security Holders – There have been no material changes to these procedures.

 

Item 11 –

Controls and Procedures

(a) – The registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”)) are effective as of a date within 90 days of the filing of this report based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended.

(b) – There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

 

Item 12 –

Disclosure of Securities Lending Activities for Closed-End Management Investment Companies – Not Applicable

 

Item 13 –

Exhibits attached hereto

(a)(1) – Code of Ethics – See Item 2

(a)(2) – Certifications – Attached hereto

(a)(3) – Not Applicable

(a)(4) – Not Applicable

(b) – Certifications – Attached hereto

 

9


  Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
  BlackRock Municipal 2030 Target Term Trust
  By:       /s/ John M. Perlowski                            
    John M. Perlowski
    Chief Executive Officer (principal executive officer) of
    BlackRock Municipal 2030 Target Term Trust
  Date: October 4, 2018
  Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
  By:   /s/ John M. Perlowski                            
    John M. Perlowski
    Chief Executive Officer (principal executive officer) of
    BlackRock Municipal 2030 Target Term Trust
  Date: October 4, 2018
  By:   /s/ Neal J. Andrews                            
    Neal J. Andrews
    Chief Financial Officer (principal financial officer) of
    BlackRock Municipal 2030 Target Term Trust
  Date: October 4, 2018

 

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EX-99.CERT 2 d584807dex99cert.htm CERTIFICATION PURSUANT TO SECTION 302 Certification Pursuant to Section 302

EX-99. CERT

CERTIFICATION PURSUANT TO RULE 30a-2(a) UNDER THE 1940 ACT AND SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

 

 

I, John M. Perlowski, Chief Executive Officer (principal executive officer) of BlackRock Municipal 2030 Target Term Trust, certify that:

1.         I have reviewed this report on Form N-CSR of BlackRock Municipal 2030 Target Term Trust;

2.         Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.         Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

4.         The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

a)         designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)         designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)         evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and

d)         disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.         The registrant’s other certifying officer(s) and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)         all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

b)         any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: October 4, 2018
/s/ John M. Perlowski        
John M. Perlowski
Chief Executive Officer (principal executive officer) of BlackRock Municipal 2030 Target Term Trust


EX-99. CERT

CERTIFICATION PURSUANT TO RULE 30a-2(a) UNDER THE 1940 ACT AND SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

 

 

I, Neal J. Andrews, Chief Financial Officer (principal financial officer) of BlackRock Municipal 2030 Target Term Trust, certify that:

1.        I have reviewed this report on Form N-CSR of BlackRock Municipal 2030 Target Term Trust;

2.        Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.        Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

4.        The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

a)        designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)        designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)        evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and

d)        disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.        The registrant’s other certifying officer(s) and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)        all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

b)        any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: October 4, 2018
/s/ Neal J. Andrews        
Neal J. Andrews
Chief Financial Officer (principal financial officer) of BlackRock Municipal 2030 Target Term Trust
EX-99.906CERT 3 d584807dex99906cert.htm CERTIFICATION PURSUANT TO SECTION 906 Certification Pursuant to Section 906

Exhibit 99.906CERT

Certification Pursuant to Rule 30a-2(b) under the 1940 Act and

Section 906 of the Sarbanes-Oxley Act of 2002

Pursuant to 18 U.S.C. § 1350, the undersigned officer of BlackRock Municipal 2030 Target Term Trust (the “Registrant”), hereby certifies, to the best of his knowledge, that the Registrant’s Report on Form N-CSR for the period ended July 31, 2018 (the “Report”) fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934, as amended, and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

 

Date: October 4, 2018
/s/ John M. Perlowski        
John M. Perlowski
Chief Executive Officer (principal executive officer) of
BlackRock Municipal 2030 Target Term Trust

Pursuant to 18 U.S.C. § 1350, the undersigned officer of BlackRock Municipal 2030 Target Term Trust (the “Registrant”), hereby certifies, to the best of his knowledge, that the Registrant’s Report on Form N-CSR for the period ended July 31, 2018 (the “Report”) fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934, as amended, and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

 

Date: October 4, 2018
/s/ Neal J. Andrews        
Neal J. Andrews
Chief Financial Officer (principal financial officer) of
BlackRock Municipal 2030 Target Term Trust

 

This certification is being furnished pursuant to Rule 30a-2(b) under the Investment Company Act of 1940, as amended, and 18 U.S.C. § 1350 and is not being filed as part of the Form N-CSR with the Securities and Exchange Commission.

EX-99.PROXY.POL 4 d584807dex99proxypol.htm CLOSED-END FUND PROXY VOTING POLICY Closed-End Fund Proxy Voting Policy

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 U.S. Registered Funds

The Boards of Trustees/Directors (“Directors”) of the closed-end funds advised by BlackRock Advisors, LLC (“BlackRock”) (the “Funds”) have the responsibility for the oversight of voting proxies relating to portfolio securities of the Funds, and have determined that it is in the best interests of the Funds and their shareholders to delegate that responsibility to BlackRock as part of BlackRock’s authority to manage, acquire and dispose of account assets, all as contemplated by the Funds’ respective investment management agreements.

BlackRock has adopted guidelines and procedures (together and as from time to time amended, the “BlackRock Proxy Voting Guidelines”) governing proxy voting by accounts managed by BlackRock.

BlackRock will cast votes on behalf of each of the Funds on specific proxy issues in respect of securities held by each such Fund in accordance with the BlackRock Proxy Voting Guidelines; provided that in the case securities held by the Funds of closed-end funds that have or propose to adopt classified boards, BlackRock will typically (a) vote in favor of proposals to adopt classification and against proposals to eliminate classification, and (b) not vote against directors as a result of their adoption of a classified board structure.

BlackRock will report on an annual basis to the Directors on (1) all proxy votes that BlackRock has made on behalf of the Funds in the preceding year together with a certification from the Funds’ Chief Compliance Officer that all votes were in accordance with the BlackRock Proxy Voting Guidelines, and (2) any changes to the BlackRock Proxy Voting Guidelines that have not previously been reported.

 

 

Closed-End Fund Proxy Voting Policy

September 21, 2015

   Page 1 of 1
EX-99.CORP.GOV 5 d584807dex99corpgov.htm GLOBAL CORPORATE GOVERNANCE & ENGAGEMENT PRINCIPLES Global Corporate Governance & Engagement Principles

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Contents       

Introduction to BlackRock

     2  

Philosophy on corporate governance

     2  

Corporate governance, engagement and voting

     3  

- Boards and directors

     4  

- Auditors and audit-related issues

     5  

- Capital structure, mergers, asset sales and other special transactions

     6  

- Remuneration and benefits

     6  

- Social, ethical, and environmental issues

     7  

- General corporate governance matters

     7  

BlackRock’s oversight of its corporate governance activities

     8  

- Oversight

     8  

- Vote execution

     8  

- Conflicts management

     9  

- Voting guidelines

     10  

- Reporting

     11  

 

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Introduction to BlackRock

BlackRock is the world’s preeminent asset management firm and a premier provider of global investment management, risk management and advisory services to institutional and individual clients around the world. BlackRock offers a wide range of investment strategies and product structures to meet clients’ needs, including individual and institutional separate accounts, mutual funds, closed-end funds, and other pooled investment vehicles and the industry-leading iShares exchange traded funds. Through BlackRock Solutions®, we offer risk management, strategic advisory and enterprise investment system services to a broad base of clients.

Philosophy on corporate governance

BlackRock’s corporate governance program is focused on protecting and enhancing the economic value of the companies in which it invests on behalf of clients. We do this through engagement with boards and management of investee companies and, for those clients who have given us authority, through voting at shareholder meetings.

We believe that there are certain fundamental rights attached to share ownership. Companies and their boards should be accountable to shareholders and structured with appropriate checks and balances to ensure that they operate in shareholders’ interests. Effective voting rights are central to the rights of ownership and there should be one vote for one share. Shareholders should have the right to elect, remove and nominate directors, approve the appointment of the auditor and to amend the corporate charter or by-laws. Shareholders should be able to vote on matters that are material to the protection of their investment including but not limited to changes to the purpose of the business, dilution levels and pre-emptive rights, the distribution of income and the capital structure. In order to exercise these rights effectively, we believe shareholders have the right to sufficient and timely information to be able to take an informed view of the proposals, and of the performance of the company and management.

Our focus is on the board of directors, as the agent of shareholders, which should set the company’s strategic aims within a framework of prudent and effective controls which enables risk to be assessed and managed. The board should provide direction and leadership to the management and oversee management’s performance. Our starting position is to be supportive of boards in their oversight efforts on our behalf and we would generally expect to support the items of business they put to a vote at shareholder meetings. Votes cast against or withheld from resolutions proposed by the board are a signal that we are concerned that the directors or management have either not acted in the interests of shareholders or have not responded adequately to shareholder concerns regarding strategy or performance.

These principles set out our approach to engaging with companies, provide guidance on our position on corporate governance and outline how our views might be reflected in our voting decisions. Corporate governance practices vary internationally and our expectations in relation to individual companies are based on the legal and regulatory framework of each market. However, as noted above, we do believe that there are some overarching principles of corporate governance that apply globally. We assess voting matters on a case-by-case basis and in light of each company’s unique circumstances. We are interested to understand from the company’s reporting its approach to corporate governance, particularly where it is different from the usual market practice, and how it benefits shareholders.

 

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BlackRock also believes that shareholders have responsibilities in relation to monitoring and providing feedback to companies, sometimes known as stewardship. These ownership responsibilities include, in our view, engaging with management or board members on corporate governance matters, voting proxies in the best long-term economic interests of shareholders and engaging with regulatory bodies to ensure a sound policy framework consistent with promoting long-term shareholder value creation. Institutional shareholders also have responsibilities to their clients to have appropriate resources and oversight structures. Our own approach to oversight in relation to our corporate governance activities is set out in the section below titled “BlackRock’s oversight of its corporate governance activities”.

Corporate governance, engagement and voting

We recognize that accepted standards of corporate governance differ between markets but we believe that there are sufficient common threads globally to identify an overarching set of principles. The primary objective of our corporate governance activities is the protection and enhancement of the value of our clients’ investments in public corporations. Thus, these principles focus on practices and structures that we consider to be supportive of long-term value creation. We discuss below the principles under six key themes. In our regional and market-specific voting guidelines we explain how these principles inform our voting decisions in relation to specific resolutions that may appear on the agenda of a shareholder meeting in the relevant market.

The six key themes are:

 

u  

Boards and directors

 

u  

Auditors and audit-related issues

 

u  

Capital structure, mergers, asset sales and other special transactions

 

u  

Remuneration and benefits

 

u  

Social, ethical and environmental issues

 

u  

General corporate governance matters

At a minimum we would expect companies to observe the accepted corporate governance standard in their domestic market or to explain why doing so is not in the interests of shareholders. Where company reporting and disclosure is inadequate or the approach taken is inconsistent with our view of what is in the best interests of shareholders, we will engage with the company and/or use our vote to encourage a change in practice. In making voting decisions, we take into account research from proxy advisors, other internal and external research, information published by the company or provided through engagement and the views of our equity portfolio managers.

BlackRock views engagement as an important activity; engagement provides BlackRock with the opportunity to improve our understanding of investee companies and their governance structures, so that our voting decisions may be better informed. Engagement also allows us to share our philosophy and approach to investment and corporate governance with companies to enhance their understanding of our objectives. There are a range of approaches we may take in engaging companies depending on the nature of the issue under consideration, the company and the market.

 

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Boards and directors

The performance of the board is critical to the economic success of the company and to the protection of shareholders’ interests. Board members serve as agents of shareholders in overseeing the strategic direction and operation of the company. For this reason, BlackRock focuses on directors in many of its engagements and sees the election of directors as one of its most important responsibilities in the proxy voting context.

We expect the board of directors to promote and protect shareholder interests by:

 

u  

establishing an appropriate corporate governance structure;

 

u  

supporting and overseeing management in setting strategy;

 

u  

ensuring the integrity of financial statements;

 

u  

making decisions regarding mergers, acquisitions and disposals;

 

u  

establishing appropriate executive compensation structures; and

 

u  

addressing business issues including social, ethical and environmental issues when they have the potential to materially impact company reputation and performance.

There should be clear definitions of the role of the board, the sub-committees of the board and the senior management such that the responsibilities of each are well understood and accepted. Companies should report publicly the approach taken to governance (including in relation to board structure) and why this approach is in the interest of shareholders. We will engage with the appropriate directors where we have concerns about the performance of the board or the company, the broad strategy of the company or the performance of individual board members. Concerns about directors may include their role on the board of a different company where that board has performed poorly and failed to protect shareholder interests.

BlackRock believes that directors should stand for re-election on a regular basis. We assess directors nominated for election or re-election in the context of the composition of the board as a whole. There should be detailed disclosure of the relevant credentials of the individual directors in order that shareholders can assess the caliber of an individual nominee. We expect there to be a sufficient number of independent directors on the board to ensure the protection of the interests of all shareholders. Common impediments to independence may include but are not limited to:

 

u  

current employment at the company or a subsidiary;

 

u  

former employment within the past several years as an executive of the company;

 

u  

providing substantial professional services to the company and/or members of the company’s management;

 

u  

having had a substantial business relationship in the past three years;

 

u  

having, or representing a shareholder with, a substantial shareholding in the company;

 

u  

being an immediate family member of any of the aforementioned; and

 

u  

interlocking directorships.

 

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BlackRock believes that the operation of the board is enhanced when there is a clearly independent, senior non-executive director to lead it. Where the chairman is also the CEO or is otherwise not independent the company should have an independent lead director. The role of this director is to enhance the effectiveness of the independent members of the board through shaping the agenda, ensuring adequate information is provided to the board and encouraging independent participation in board deliberations. The lead independent board director should be available to shareholders if they have concerns that they wish to discuss.

To ensure that the board remains effective, regular reviews of board performance should be carried out and assessments made of gaps in skills or experience amongst the members. BlackRock believes it is beneficial for new directors to be brought onto the board periodically to refresh the group’s thinking and to ensure both continuity and adequate succession planning. In identifying potential candidates, boards should take into consideration the diversity of experience and expertise of the current directors and how that might be augmented by incoming directors. We believe that directors are in the best position to assess the optimal size for the board, but we would be concerned if a board seemed too small to have an appropriate balance of directors or too large to be effective.

There are matters for which the board has responsibility that may involve a conflict of interest for executives or for affiliated directors. BlackRock believes that shareholders’ interests are best served when the independent members of the board form a sub-committee to deal with such matters. In many markets, these sub-committees of the board specialize in audit, director nominations and compensation matters. An ad hoc committee might also be formed to decide on a special transaction, particularly one with a related party.

Auditors and audit-related issues

BlackRock recognizes the critical importance of financial statements which should provide a complete and accurate picture of a company’s financial condition. We will hold the members of the audit committee or equivalent responsible for overseeing the management of the audit function. We take particular note of cases involving significant financial restatements or ad hoc notifications of material financial weakness.

The integrity of financial statements depends on the auditor being free of any impediments to being an effective check on management. To that end, we believe it is important that auditors are, and are seen to be, independent. Where the audit firm provides services to the company in addition to the audit, the fees earned should be disclosed and explained. Audit committees should also have in place a procedure for assuring annually the independence of the auditor.

 

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Capital structure, mergers, asset sales and other special transactions

The capital structure of a company is critical to its owners, the shareholders, as it impacts the value of their investment and the priority of their interest in the company relative to that of other equity or debt investors. Pre-emption rights are a key protection for shareholders against the dilution of their interests.

In assessing mergers, asset sales or other special transactions, BlackRock’s primary consideration is the long-term economic interests of shareholders. Boards proposing a transaction need to clearly explain the economic and strategic rationale behind it. We will review a proposed transaction to determine the degree to which it enhances long-term shareholder value. We would prefer that proposed transactions have the unanimous support of the board and have been negotiated at arm’s length. We may seek reassurance from the board that executive and/or board members’ financial interests in a given transaction have not affected their ability to place shareholders’ interests before their own. Where the transaction involves related parties, we would expect the recommendation to support it to come from the independent directors and would prefer only non-conflicted shareholders to vote on the proposal.

BlackRock believes that shareholders have a right to dispose of company shares in the open market without unnecessary restriction. In our view, corporate mechanisms designed to limit shareholders’ ability to sell their shares are contrary to basic property rights. Such mechanisms can serve to protect and entrench interests other than those of the shareholders. We believe that shareholders are broadly capable of making decisions in their own best interests. We would expect any so-called ‘shareholder rights plans’ being proposed by a board to be subject to shareholder approval on introduction and periodically thereafter for continuation.

Remuneration and benefits

BlackRock expects a company’s board of directors to put in place a compensation structure that incentivizes and rewards executives appropriately and is aligned with shareholder interests, particularly long-term shareholder returns. We would expect the compensation committee to take into account the specific circumstances of the company and the key individuals the board is trying to incentivize. We encourage companies to ensure that their compensation packages incorporate appropriate and challenging performance conditions consistent with corporate strategy and market practice. We use third party research, in addition to our own analysis, to evaluate existing and proposed compensation structures. We hold members of the compensation committee or equivalent accountable for poor compensation practices or structures.

BlackRock believes that there should be a clear link between variable pay and company performance as reflected in returns to shareholders. We are not supportive of one-off or special bonuses unrelated to company or individual performance. We support incentive plans that pay out rewards earned over multiple and extended time periods. We believe consideration should be given to building claw back provisions into incentive plans such that executives would be required to repay rewards where they were not justified by actual performance. Compensation committees should guard against contractual arrangements that would entitle executives to material compensation for early termination of their contract. Finally, pension contributions should be reasonable in light of market practice.

 

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Outside directors should be compensated in a manner that does not risk compromising their independence or aligning their interests too closely with those of the management, whom they are charged with overseeing.

Social, ethical, and environmental issues

Our fiduciary duty to clients is to protect and enhance their economic interest in the companies in which we invest on their behalf. It is within this context that we undertake our corporate governance activities. We believe that well-managed companies will deal effectively with the social, ethical and environmental (“SEE”) aspects of their businesses.

BlackRock expects companies to identify and report on the material, business-specific SEE risks and opportunities and to explain how these are managed. This explanation should make clear how the approach taken by the company best serves the interests of shareholders and protects and enhances the long-term economic value of the company. The key performance indicators in relation to SEE matters should also be disclosed and performance against them discussed, along with any peer group benchmarking and verification processes in place. This helps shareholders assess how well management is dealing with the SEE aspects of the business. Any global standards adopted should also be disclosed and discussed in this context.

We may vote against the election of directors where we have concerns that a company might not be dealing with SEE issues appropriately. Sometimes we may reflect such concerns by supporting a shareholder proposal on the issue, where there seems to be either a significant potential threat or realized harm to shareholders’ interests caused by poor management of SEE matters. In deciding our course of action, we will assess whether the company has already taken sufficient steps to address the concern and whether there is a clear and material economic disadvantage to the company if the issue is not addressed.

More commonly, given that these are often not voting issues, we will engage directly with the board or management. The trigger for engagement on a particular SEE concern is our assessment that there is potential for material economic ramifications for shareholders.

We do not see it as our role to make social, ethical or political judgments on behalf of clients. We expect investee companies to comply, at a minimum, with the laws and regulations of the jurisdictions in which they operate. They should explain how they manage situations where such laws or regulations are contradictory or ambiguous.

General corporate governance matters

BlackRock believes that shareholders have a right to timely and detailed information on the financial performance and viability of the companies in which they invest. In addition, companies should also publish information on the governance structures in place and the rights of shareholders to influence these. The reporting and disclosure provided by companies helps shareholders assess whether the economic interests of shareholders have been protected and the quality of the board’s oversight of management. BlackRock believes shareholders should have the right to vote on key corporate governance matters, including on changes to governance mechanisms, to submit proposals to the shareholders’ meeting and to call special meetings of shareholders.

 

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BlackRock’s oversight of its corporate governance activities

Oversight

BlackRock holds itself to a very high standard in its corporate governance activities, including in relation to executing proxy votes. This function is executed by a team of dedicated BlackRock employees without sales responsibilities (the “Corporate Governance Group”), and which is considered an investment function. BlackRock maintains three regional oversight committees (“Corporate Governance Committees”) for the Americas, Europe, the Middle East and Africa (EMEA) and Asia-Pacific, consisting of senior BlackRock investment professionals. All of the regional Corporate Governance Committees report to a Global Corporate Governance Oversight Committee, which is a risk-focused committee composed of senior representatives of the active and index equity investment businesses, the Deputy General Counsel, the Global Executive Committee member to whom the Corporate Governance Group reports and the head of the Corporate Governance Group. The Corporate Governance Committees review and approve amendments to their respective proxy voting guidelines (“Guidelines”) and grant authority to the Global Head of Corporate Governance (“Global Head”), a dedicated BlackRock employee without sales responsibilities, to vote in accordance with the Guidelines. The Global Head leads the Corporate Governance Group to carry out engagement, voting and vote operations in a manner consistent with the relevant Corporate Governance Committee’s mandate. The Corporate Governance Group engages companies in conjunction with the portfolio managers in discussions of significant governance issues, conducts research on corporate governance issues and participates in industry discussions to keep abreast of the field of corporate governance. The Corporate Governance Group, or vendors overseen by the Corporate Governance Group, also monitor upcoming proxy votes, execute proxy votes and maintain records of votes cast. The Corporate Governance Group may refer complicated or particularly controversial matters or discussions to the appropriate investors and/or regional Corporate Governance Committees for their review, discussion and guidance prior to making a voting decision. BlackRock’s Equity Policy Oversight Committee (EPOC) is informed of certain aspects of the work of the Global Corporate Governance Oversight Committee and the Corporate Governance Group.

Vote execution

BlackRock carefully considers proxies submitted to funds and other fiduciary accounts (“Funds”) for which it has voting authority. BlackRock votes (or refrains from voting) proxies for each Fund for which it has voting authority based on BlackRock’s evaluation of the best long-term economic interests of shareholders, in the exercise of its independent business judgment, and without regard to the relationship of the issuer of the proxy (or any dissident shareholder) to the Fund, the Fund’s affiliates (if any), BlackRock or BlackRock’s affiliates.

When exercising voting rights, BlackRock will normally vote on specific proxy issues in accordance with its Guidelines for the relevant market. The Guidelines are reviewed regularly and are amended consistent with changes in the local market practice, as developments in corporate governance occur, or as otherwise deemed advisable by BlackRock’s Corporate Governance Committees. The Corporate Governance Committees may, in the exercise of their business judgment, conclude that the Guidelines do not cover the specific matter upon which a proxy vote is requested or that an exception to the Guidelines would be in the best long-term economic interests of BlackRock’s clients.

 

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In the uncommon circumstance of there being a vote with respect to fixed income securities or the securities of privately held issuers the decision generally will be made by a Fund’s portfolio managers and/or the Corporate Governance Group based on their assessment of the particular transactions or other matters at issue.

In certain markets, proxy voting involves logistical issues which can affect BlackRock’s ability to vote such proxies, as well as the desirability of voting such proxies. These issues include but are not limited to: (i) untimely notice of shareholder meetings; (ii) restrictions on a foreigner’s ability to exercise votes; (iii) requirements to vote proxies in person; (iv) “share- blocking” (requirements that investors who exercise their voting rights surrender the right to dispose of their holdings for some specified period in proximity to the shareholder meeting); (v) potential difficulties in translating the proxy; and (vi) requirements to provide local agents with unrestricted powers of attorney to facilitate voting instructions. We are not supportive of impediments to the exercise of voting rights such as shareblocking or overly burdensome administrative requirements.

As a consequence, BlackRock votes proxies in these markets only on a “best-efforts” basis. In addition, the Corporate Governance Committees may determine that it is generally in the best interests of BlackRock clients not to vote proxies of companies in certain countries if the committee determines that the costs (including but not limited to opportunity costs associated with shareblocking constraints) associated with exercising a vote are expected to outweigh the benefit the client would derive by voting on the issuer’s proposal.

While it is expected that BlackRock, as a fiduciary, will generally seek to vote proxies over which BlackRock exercises voting authority in a uniform manner for all BlackRock clients, the relevant Corporate Governance Committee, in conjunction with the portfolio manager of an account, may determine that the specific circumstances of such an account require that such account’s proxies be voted differently due to such account’s investment objective or other factors that differentiate it from other accounts. In addition, BlackRock believes portfolio managers may from time to time legitimately reach differing but equally valid views, as fiduciaries for their funds and the client assets in those Funds, on how best to maximize economic value in respect of a particular investment. Accordingly, portfolio managers retain full discretion to vote the shares in the Funds they manage based on their analysis of the economic impact of a particular ballot item.

Conflicts management

BlackRock maintains policies and procedures that are designed to prevent undue influence on BlackRock’s proxy voting activity that might stem from any relationship between the issuer of a proxy (or any dissident shareholder) and BlackRock, BlackRock’s affiliates, a Fund or a Fund’s affiliates. Some of the steps BlackRock has taken to prevent conflicts include, but are not limited to:

 

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BlackRock has adopted a proxy voting oversight structure whereby the Corporate Governance Committees oversee the voting decisions and other activities of the Corporate Governance Group, and particularly its activities with respect to voting in the relevant region of each Corporate Governance Committee’s jurisdiction.

 

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The Corporate Governance Committees have adopted Guidelines for each region, which set forth the firm’s views with respect to certain corporate governance and other issues that typically arise in the proxy voting context. The Corporate Governance Committees receive periodic reports regarding the specific votes cast by the Corporate

 

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Governance Group and regular updates on material process issues, procedural changes and other matters of concern to the Corporate Governance Committees.

 

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BlackRock’s Global Corporate Governance Oversight Committee oversees the Global Head, the Corporate Governance Group and the Corporate Governance Committees. The Global Corporate Governance Oversight Committee conducts a review, at least annually, of the proxy voting process to ensure compliance with BlackRock’s risk policies and procedures.

 

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BlackRock maintains a reporting structure that separates the Global Head and Corporate Governance Group from employees with sales responsibilities. In addition, BlackRock maintains procedures intended to ensure that all engagements with corporate issuers or dissident shareholders are managed consistently and without regard to BlackRock’s relationship with the issuer of the proxy or dissident shareholder. Within the normal course of business, the Global Head or Corporate Governance Group may engage directly with BlackRock clients, and with employees with sales responsibilities, in discussions regarding general corporate governance policy matters, and to otherwise ensure that proxy-related client service levels are met. The Global Head or Corporate Governance Group does not discuss any specific voting matter with a client prior to the disclosure of the vote decision to all applicable clients after the shareholder meeting has taken place, except if the client is acting in the capacity as issuer of the proxy or dissident shareholder and is engaging through the established procedures independent of the client relationship.

 

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In certain instances, BlackRock may determine to engage an independent fiduciary to vote proxies as a further safeguard to avoid potential conflicts of interest or as otherwise required by applicable law. The independent fiduciary may either vote such proxies or provide BlackRock with instructions as to how to vote such proxies. In the latter case, BlackRock votes the proxy in accordance with the independent fiduciary’s determination. Use of an independent fiduciary has been adopted for voting the proxies related to any company that is affiliated with BlackRock or any company that includes BlackRock employees on its board of directors.

With regard to the relationship between securities lending and proxy voting, BlackRock’s approach is driven by our clients’ economic interests. The evaluation of the economic desirability of recalling loans involves balancing the revenue producing value of loans against the likely economic value of casting votes. Based on our evaluation of this relationship, we believe that generally the likely economic value of casting most votes is less than the securities lending income, either because the votes will not have significant economic consequences or because the outcome of the vote would not be affected by BlackRock recalling loaned securities in order to ensure they are voted. Periodically, BlackRock analyzes the process and benefits of voting proxies for securities on loan, and will consider whether any modification of its proxy voting policies or procedures is necessary in light of future conditions. In addition, BlackRock may in its discretion determine that the value of voting outweighs the cost of recalling shares, and thus recall shares to vote in that instance.

Voting guidelines

The issue-specific voting Guidelines published for each region/country in which we vote are intended to summarize BlackRock’s general philosophy and approach to issues that may commonly arise in the proxy voting context in each market where we invest. These Guidelines are not intended to be exhaustive. BlackRock applies the Guidelines on a case-by-case basis, in the context of the individual circumstances of each company and the specific issue under review.

 

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As such, these Guidelines do not provide a guide to how BlackRock will vote in every instance. Rather, they share our view about corporate governance issues generally, and provide insight into how we typically approach issues that commonly arise on corporate ballots.

Reporting

We report our proxy voting activity directly to clients and publically as required. In addition, we publish for clients a more detailed discussion of our corporate governance activities, including engagement with companies and with other relevant parties.

 

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