N-CSR 1 d93196dncsr.htm BLACKROCK MULTI-SECTOR INCOME TRUST BlackRock Multi-Sector Income 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: 811-22774

Name of Fund:   BlackRock Multi-Sector Income Trust (BIT)

Fund Address:   100 Bellevue Parkway, Wilmington, DE 19809

Name and address of agent for service: John M. Perlowski, Chief Executive Officer, BlackRock Multi-Sector

            Income 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: 10/31/2015

Date of reporting period: 10/31/2015


Item 1 – Report to Stockholders


OCTOBER 31, 2015

 

 

ANNUAL REPORT

 

    LOGO

 

BlackRock Credit Allocation Income Trust (BTZ)

BlackRock Floating Rate Income Trust (BGT)

BlackRock Multi-Sector Income Trust (BIT)

 

Not FDIC Insured • May Lose Value • No Bank Guarantee


Table of Contents     

 

     Page  

The Markets in Review

    3   

Annual Report:

 

Trust Summaries

    4   

The Benefits and Risks of Leveraging

    10   

Derivative Financial Instruments

    10   
Financial Statements:  

Schedules of Investments

    11   

Statements of Assets and Liabilities

    61   

Statements of Operations

    63   

Statements of Changes in Net Assets

    64   

Statements of Cash Flows

    66   

Financial Highlights

    67   

Notes to Financial Statements

    70   

Report of Independent Registered Public Accounting Firm

    83   

Important Tax Information

    83   

Disclosure of Investment Advisory Agreements and Sub-Advisory Agreement

    84   

Automatic Dividend Reinvestment Plan

    88   

Officers and Trustees

    89   

Additional Information

    92   

 

 

LOGO

 

                
2    ANNUAL REPORT    OCTOBER 31, 2015   


The Markets in Review

 

Dear Shareholder,

Diverging monetary policies and shifting economic outlooks across regions were the overarching themes driving financial markets during the 12-month period ended October 31, 2015. U.S. economic growth was picking up considerably toward the end of 2014, while the broader global economy showed signs of slowing. Investors favored the stability of U.S. assets despite expectations that the Federal Reserve (the “Fed”) would eventually be inclined to raise short-term interest rates, while international markets struggled even as the European Central Bank and the Bank of Japan eased monetary policy. Oil prices plummeted in late 2014 due to a global supply-and-demand imbalance, fueling a sell-off in energy-related assets and emerging markets. U.S. Treasury bonds benefited as their persistently low yields had become attractive as compared to the even lower yields on international sovereign debt.

Equity markets reversed in early 2015, with international markets outperforming the United States as global risks temporarily abated, and the U.S. economy hit a soft patch amid a harsh winter and a west coast port strike. High valuations took their toll on U.S. stocks, while bond yields fell to extreme lows. (Bond prices rise as yields fall.) In contrast, economic reports in Europe and Asia began to improve, and accommodative policies from central banks in those regions helped international equities rebound. Oil prices stabilized, providing some relief for emerging market stocks, although a stronger U.S. dollar posed another significant headwind for the asset class.

U.S. economic growth regained momentum in the second quarter, helping U.S. stocks resume an upward path; however, the improving data underscored the likelihood that the Fed would raise short-term rates before the end of 2015 and bond yields moved swiftly higher. The month of June brought a sharp, but temporary, sell-off across most asset classes as Greece’s long-brewing debt troubles came to an impasse. These concerns abated when the Greek parliament passed a series of austerity and reform measures in July. But the market’s calm was short-lived. Signs of weakness in China’s economy sparked extreme levels of volatility in Chinese equities despite policymakers’ attempts to stabilize the market.

Higher volatility spread through markets globally in the third quarter as further evidence of deceleration in China stoked worries about overall global growth. Weakening Chinese demand caused oil prices to slide once again and ignited another steep sell-off in emerging markets. Speculation as to whether the Fed would raise rates at its September meeting further fueled global volatility. Ultimately, the Fed postponed the rate hike, but this brought little relief in the markets as the central bank’s decision reinforced investors’ concerns about the state of the global economy. Stock markets finished the third quarter with the worst performance since 2011. High yield bonds also declined, while higher quality assets, including U.S. Treasury bonds, municipal bonds and investment grade credit benefited from investors seeking shelter amid global uncertainty.

The period ended with a strong October rally in risk assets. Given the recent scarcity of evidence of global growth, equity markets had become more reliant on central banks to drive performance. Although October brought generally soft economic data and lower growth estimates, global equities powered higher as China’s central bank provided more stimulus, the European Central Bank poised for more easing and soft U.S. data pushed back expectations for a Fed rate hike. Treasury bonds declined in October while all other asset classes benefited from investors’ increased risk appetite.

At BlackRock, we believe investors need to think globally, extend their scope across a broad array of asset classes and be prepared to move freely as market conditions change over time. 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 October 31, 2015  
    6-month     12-month  

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

    0.77     5.20

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

    (4.12     0.34   

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

    (6.44     (0.07

Emerging market equities
(MSCI Emerging Markets Index)

    (17.75     (14.53

3-month Treasury bills
(BofA Merrill Lynch
3-Month U.S. Treasury
Bill Index)

    0.01        0.02   

U.S. Treasury securities
(BofA Merrill Lynch
10-Year U.S. Treasury Index)

    (0.02     3.57   

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

    (0.10     1.96   

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

    1.58        2.87   

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

    (3.38     (1.91
Past performance is no guarantee of future results. Index performance is shown for illustrative purposes only. You cannot invest directly in an index.    

 

                
   THIS PAGE NOT PART OF YOUR FUND REPORT       3


Trust Summary as of October 31, 2015    BlackRock Credit Allocation Income Trust

 

Trust Overview

BlackRock Credit Allocation Income Trust’s (BTZ) (the “Trust”) investment objective is to provide current income, current gains and capital appreciation. The Trust seeks to achieve its investment objective by investing, under normal market conditions, at least 80% of its assets in credit-related securities, including, but not limited to, investment grade corporate bonds, high yield bonds (commonly referred to as “junk” bonds), bank loans, preferred securities or convertible bonds or derivatives with economic characteristics similar to these credit-related securities. 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”)

  BTZ

Initial Offering Date

  December 27, 2006

Current Distribution Rate on Closing Market Price as of October 31, 2015 ($12.53)1

  7.71%

Current Monthly Distribution per Common Share2

  $0.0805

Current Annualized Distribution per Common Share2

  $0.9660

Economic Leverage as of October 31, 20153

  31%

 

  1   

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 consists of income, net realized gains and/or a return of capital. Past performance does not guarantee future results.

 

  2   

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.

 

  3   

Represents reverse repurchase agreements as a percentage of total managed assets, which is the total assets of the Trust (including any assets attributable to any borrowings) minus the sum of liabilities (other than borrowings representing financial leverage). For a discussion of leveraging techniques utilized by the Trust, please see The Benefits and Risks of Leveraging on page 10.

 

Performance and Portfolio Management Commentary

Returns for the 12 months ended October 31, 2015 were as follows:

 

    Returns Based On  
     Market Price     NAV3  

BTZ1

    (0.33 )%      0.48

Lipper Corporate BBB-Rated Debt Funds (Leveraged)2

    1.05        (0.28

 

  1   

All returns reflect reinvestment of dividends and/or distributions.

 

  2   

Average return.

 

  3  

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

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

What factors influenced performance?

 

 

The Trust’s performance was helped by its positions in lower-quality bonds, which outperformed higher-rated issues during the period. The Trust maintained an allocation to capital securities, which benefited performance. (Capital securities are dividend-paying securities that combine some features of both corporate bonds and preferred stocks, while generally providing higher yields to compensate for being less senior in the issuer’s capital structure.)

 

 

The Trust’s yield curve positioning, which was geared for a flattening of the curve between the 10- and 30-year segments, was beneficial given the outperformance of longer-term bonds. Security selection in the utilities sector also aided performance.

 

 

Throughout the year, swap spreads faced tremendous pressure and in October they turned negative, largely due to technical pressures. After years of building reserves, official institutions (particularly Asian and

   

Middle Eastern) started selling treasuries in July. With no new source of demand, dealers were forced to sell inventory which caused U.S. Treasuries to cheapen. Swaps broke down as a hedge versus other spread products (credit spreads widened while swaps tightened). This breakdown in credit hedge triggered unwinds and further tightening pressure. In addition, quarter end funding and uncertainty over a rate hike by the Federal Reserve added pressure in October as well. As a result, swaps had a negative impact on performance.

Describe recent portfolio activity.

 

 

During the 12-month period, the investment advisor became more cautious with regard to corporate bonds due to rising credit risk and an increase in activities that benefit stockholders over bond investors.

 

 

Believing the U.S. Federal Reserve would begin raising interest rates, the investment advisor decreased the Trust’s duration (interest-rate sensitivity) during the period, and the Trust remained positioned for a flattening of the yield curve (outperformance for longer-term bonds).

 

 

Additionally, the Trust reduced its allocation to the industrial sector due to rising new-issue supply, and it increased its weighting in the financials sector. Within financials, the investment advisor sought opportunities lower in the capital structure among subordinated and preferred securities.

Describe portfolio positioning at period end.

 

 

Within the industrials sector, the Trust was overweight in the communications, energy and transportation subsectors, and it was underweight in the technology, capital goods and consumer subsectors. The Trust was underweight in financials and neutral in utilities.

 

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.

 

                
4    ANNUAL REPORT    OCTOBER 31, 2015   


     BlackRock Credit Allocation Income Trust

 

 

Market Price and Net Asset Value Per Share Summary

 

      10/31/15     

10/31/14

     Change      High      Low  

Market Price

   $ 12.53       $ 13.54         (7.46 )%     $ 13.65       $ 12.06   

Net Asset Value

   $ 14.33       $ 15.36         (6.71 )%     $ 15.41       $ 14.18   

 

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

 

LOGO

 

Overview of the Trust’s Total Investments
Portfolio Composition   10/31/15    

10/31/141

 

Corporate Bonds

    76     78

Preferred Securities

    19        16   

Asset-Backed Securities

    4        3   

Municipal Bonds

    1        1   

Foreign Agency Obligations

           1   

U.S. Treasury Obligations

           1   

Other

    2       3  

 

  1   

Information has been revised to conform to current year presentation.

 

  2   

Includes a less than 1% holding in each of the following investment types: Foreign Agency Obligations, Options Purchased, Options Written, U.S. Sponsored-Agency Securities and Short-Term Securities.

 

  3   

Includes a less than 1% holding in each of the following investment types: Options Purchased, Options Written, U.S. Sponsored-Agency Securities and Short-Term Securities.

 

Credit Quality Allocation4,5   10/31/15    

10/31/141

 

AAA/Aaa6

    1     2

AA/Aa

    2        2   

A

    19        17   

BBB/Baa

    48        45   

BB/Ba

    18        21   

B

    9        9   

CCC/Caa

    1        2   

N/R

    2        2   

 

  4   

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.

 

  5   

Excludes Short-Term Securities, Options Purchased and Options Written.

 

  6   

The investment advisor evaluates the credit quality of not-rated investments based upon certain factors including, but not limited to, credit ratings for similar investments and financial analysis of sectors, individual investments and/or issuer. Using this approach, the investment advisor has deemed U.S. Government Sponsored Agency Securities and U.S. Treasury Obligations as AAA/Aaa.

 

 

                
   ANNUAL REPORT    OCTOBER 31, 2015    5


Trust Summary as of October 31, 2015    BlackRock Floating Rate Income Trust

 

Trust Overview

BlackRock Floating Rate Income Trust’s (BGT) (the “Trust”) primary investment objective is to provide a high level of current income. The Trust’s secondary investment objective is to seek the preservation of capital. The Trust seeks to achieve its investment objectives by investing primarily, under normal conditions, at least 80% of its assets in floating and variable rate instruments of U.S. and non-U.S. issuers, including a substantial portion of its assets in global floating and variable rate securities including senior secured floating rate loans made to corporate and other business entities. Under normal market conditions, the Trust expects that the average effective duration of its portfolio will be no more than 1.5 years. 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 objectives will be achieved.

 

Trust Information

Symbol on NYSE

   BGT

Initial Offering Date

   August 30, 2004

Current Distribution Rate on Closing Market Price as of October 31, 2015 ($12.77)1

   5.48%

Current Monthly Distribution per Common Share2

   $0.0583

Current Annualized Distribution per Common Share2

   $0.6996

Economic Leverage as of October 31, 20153

   24%

 

  1   

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 consists of income, net realized gains and/or a return of capital. Past performance does not guarantee future results.

 

  2   

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.

 

  3   

Represents bank borrowings outstanding as a percentage of total managed assets, which is the total assets of the Trust (including any assets attributable to any borrowings) minus the sum of liabilities (other than borrowings representing financial leverage). For a discussion of leveraging techniques utilized by the Trust, please see The Benefits and Risks of Leveraging on page 10.

 

Performance and Portfolio Management Commentary

 

Returns for the 12 months ended October 31, 2015 were as follows:

 

    Returns Based On  
     Market Price     NAV3  

BGT1

    3.08     3.54

Lipper Loan Participation Funds2

    (2.06     (0.65

 

  1   

All returns reflect reinvestment of dividends and/or distributions.

 

  2   

Average return.

 

  3  

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

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

What factors influenced performance?

 

 

After marginally declining in late 2014, the market for floating rate loan interests (i.e. bank loans) recovered to provide a modest positive return for the full 12-month period. Given the positive returns experienced, the Trust’s use of leverage added to performance for the period. The Trust’s loan holdings in the healthcare and technology sectors were among the top performers over the period, while exposure to collateralized loan obligations (“CLOs”) also added to returns.

 

 

During the period, oil prices experienced a significant decline and most commodity prices came under pressure as well. As a result, prices for the Trust’s holdings within the energy sector fell notably during the period and detracted from returns. The metals & mining sector, while a smaller

   

component of the market, declined as well. The electric segment, and in particular Texas Utilities, was also a detractor. Finally, the Trust’s modest position in equities was a negative contributor.

Describe recent portfolio activity.

 

 

Throughout the 12-month period, the Trust maintained its focus on the higher quality segments of the loan market in terms of loan structure, liquidity and overall credit quality. The Trust has concentrated its investments in strong companies with stable cash flows and high quality collateral, with the ability to meet interest obligations and ultimately return principal. From a sector perspective, the Trust added to names in the pharmaceuticals and health care sectors, where increased merger and acquisition activity has led to some attractive investment opportunities.

Describe portfolio positioning at period end.

 

 

At period end, the Trust held 93% of its total portfolio in bank loans, with the remainder primarily in corporate bonds and CLOs. The Trust continued to favor loans rated B where the investment advisor was comfortable with credit quality, in view of the incremental income they offered versus BB loans. Additionally, the Trust held a modest position in CCC-rated loans, with a focus on names that have shown consistent credit improvement. In general, the Trust maintained a bias toward more liquid loans, which have held up better during recent market volatility. Top portfolio holdings included Valeant Pharmaceuticals (pharmaceuticals), First Data (IT services), and Level 3 Communications (diversified telecommunication services).

 

 

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    ANNUAL REPORT    OCTOBER 31, 2015   


     BlackRock Floating Rate Income Trust

 

 

Market Price and Net Asset Value Per Share Summary                              

 

      10/31/15     

10/31/14

     Change      High      Low  

Market Price

   $ 12.77       $ 13.18         (3.11 )%     $ 13.73       $ 12.27   

Net Asset Value

   $ 14.18       $ 14.57         (2.68 )%     $ 14.69       $ 14.12   

 

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

 

LOGO

 

Overview of the Trust’s Total Investments
Portfolio Composition    10/31/15    

10/31/141

 

Floating Rate Loan Interests

     93     93

Asset-Backed Securities

     4        2   

Corporate Bonds

     3        4   

Common Stocks

     2      1   

Other

     3       4  

 

  1   

Information has been revised to conform to current year presentation.

 

  2   

Includes a less that 1% holding in Common Stocks.

 

  3  

Includes a less than 1% holding in each of the following investment types: Non-Agency Mortgage — Backed Securities, Other Interests, Investment Companies, Warrants, Short-Term Securities and Options Purchased.

 

  4   

Includes a less than 1% holding in each of the following investment types: Non-Agency Mortgage-Backed Securities, Other Interests, Warrants and Options Purchased.

Credit Quality Allocation5,6    10/31/15    

10/31/141

 

A

     1       

BBB/Baa

     8        7

BB/Ba

     45        38   

B

     39        43   

CCC/Caa

     3        4   

N/R

     4        8   

 

  5   

For financial reporting purposes, credit quality ratings shown above reflect the highest rating assigned by either S&P’s 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.

 

  6  

Excludes Short-Term Securities and Options Purchased.

 

 

                
   ANNUAL REPORT    OCTOBER 31, 2015    7


Trust Summary as of October 31, 2015    BlackRock Multi-Sector Income Trust

 

Trust Overview

BlackRock Multi-Sector Income Trust’s (BIT) (the “Trust”) primary investment objective is to seek high current income, with a secondary objective of capital appreciation. The Trust seeks to achieve its investment objectives by investing, under normal market conditions, at least 80% of its assets in loan and debt instruments and other investments with similar economic characteristics. 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

  BIT

Initial Offering Date

  February 27, 2013

Current Distribution Rate on Closing Market Price as of October 31, 2015 ($16.31)1

  8.59%

Current Monthly Distribution per Common Share2

  $0.1167

Current Annualized Distribution per Common Share2

  $1.4004

Economic Leverage as of October 31, 20153

  41%

 

  1   

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 consists of income, net realized gains and/or a return of capital. Past performance does not guarantee future results.

 

  2   

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.

 

  3   

Represents reverse repurchase agreements as a percentage of total managed assets, which is the total assets of the Trust (including any assets attributable to any borrowings) minus the sum of liabilities (other than borrowings representing financial leverage). For a discussion of leveraging techniques utilized by the Trust, please see The Benefits and Risks of Leveraging on page 10.

 

Performance and Portfolio Management Commentary

 

Returns for the 12 months ended October 31, 2015 were as follows:

 

    Returns Based On  
     Market Price     NAV3  

BIT1

    0.06     3.87 %4 

Lipper General Bond Funds2

    (1.69     (0.29

 

  1   

All returns reflect reinvestment of dividends and/or distributions.

 

  2   

Average return.

 

  3  

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

 

  4   

For financial reporting purposes, the market value of certain investments were adjusted as of report date. Accordingly, the net asset value (“NAV”) per share and total return performance based on net asset value presented herein are different than the information previously published on October 31, 2015.

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

What factors influenced performance?

 

 

The Trust’s positions in non-agency mortgage-backed securities (“MBS”), high yield corporate bonds, commercial mortgage-backed securities (“CMBS”) and asset-backed securities (“ABS”) were the most significant contributors to performance. The Trust also received positive contributions from its allocation to senior bank loans, as well as from both its stance

   

with respect to duration (a measure of interest rate sensitivity) and yield curve positioning.

 

 

The main detractors from the Trust’s performance were its allocations to emerging market debt and investment grade corporate bonds.

Describe recent portfolio activity.

 

 

During the period, the Trust rotated its exposure to sectors that trade at a yield spread versus U.S. Treasuries by reducing allocations to high yield corporate bonds, investment grade corporate bonds and CMBS, while increasing exposure to non-agency MBS and ABS. The net effect of this rotation was a reduction in credit risk. In addition, sensitivity to interest rates was reduced by lowering the Trust’s effective duration. Both macroeconomic and technical market factors contributed to the decision to reduce risk within the Trust, including historically tight credit spreads, an increase in market volatility and the prospect of a higher interest rate environment.

Describe portfolio positioning at period end.

 

 

The Trust maintained diversified exposure to non-government spread sectors, including high yield and investment grade corporate bonds, as well as to structured credits including CMBS, ABS and non-agency MBS.

 

 

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    ANNUAL REPORT    OCTOBER 31, 2015   


     BlackRock Multi-Sector Income Trust

 

 

Market Price and Net Asset Value Per Share Summary                              

 

      10/31/15      10/31/14      Change      High      Low  

Market Price

   $ 16.31       $ 17.79         (8.32 )%     $ 17.98       $ 15.15   

Net Asset Value

   $ 18.91       $ 19.87         (4.83 )%     $ 19.90       $ 18.77   

 

Market Price and Net Asset Value History Since Inception

 

LOGO

 

  1   

Commencement of operations.

 

Overview of the Trust’s Total Investments
Portfolio Composition   10/31/15     10/31/141  

Corporate Bonds

    33     35

Non-Agency Mortgage-Backed Securities

    25        29   

Asset-Backed Securities

    21        15   

Preferred Securities

    13        14   

Floating Rate Loan Interests

    5        5   

Foreign Agency Obligations

    2        1   

Short-Term Securities

    1        1   

Other2

             

 

  1   

Information has been revised to conform to current year presentation.

 

  2   

Includes a less than 1% holding in each of the following investment types: Options Purchased and Options Written.

Credit Quality Allocation3,4   10/31/15     10/31/141  

A

    3     3

BBB/Baa

    17        17   

BB/Ba

    28        25   

B

    12        17   

CCC/Caa

    19        21   

CC/Ca

    5        5   

N/R

    16        12   

 

  3   

For financial reporting purposes, credit quality ratings shown above reflect the highest rating assigned by either S&P’s 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.

 

  4   

Excludes Short-Term Securities, Options Purchased and Options Written.

 

 

                
   ANNUAL REPORT    OCTOBER 31, 2015    9


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, these objectives cannot 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 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 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.

Leverage also generally causes greater changes in the Trusts’ NAVs, market prices and dividend rates than comparable portfolios without leverage. In a declining market, leverage is likely to cause a greater decline in the net asset value and market price of the Trusts’ shares than if the Trusts were not leveraged. In addition, the Trusts 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 the Trusts’ ability to invest in certain types of securities or use certain types of hedging strategies. The Trusts incur expenses in connection with the use of leverage, all of which are borne by shareholders and may reduce income to the shareholders. 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 advisor will be higher than if the Trusts did not use leverage.

Each Trust may utilize leverage through a credit facility or reverse repurchase agreements 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. BIT is permitted to use economic leverage (which includes leverage attributable to reverse repurchase agreements) of 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 its credit facility, 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 values not less than the value of a Trust’s obligations under the reverse repurchase agreement (including accrued interest), then such transaction is not considered a senior security and is not subject to the foregoing limitations and requirements under the 1940 Act.

 

 

Derivative Financial Instruments     

 

The Trusts may invest in various derivative financial instruments. Derivative financial instruments are used to obtain exposure to a security, index and/or market without owning or taking physical custody of securities 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. Derivative financial instruments also 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

derivative financial instrument. The Trusts’ ability to use a derivative financial instrument successfully depends on the investment advisor’s ability to predict pertinent market movements accurately, which cannot be assured. The use of derivative financial 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 are discussed in detail in the Notes to Financial Statements.

 

 

                
10    ANNUAL REPORT    OCTOBER 31, 2015   


Schedule of Investments October 31, 2015

  

BlackRock Credit Allocation Income Trust (BTZ)

(Percentages shown are based on Net Assets)

 

Asset-Backed Securities (a)   

Par  

(000)

    Value  

Asset-Backed Securities — 5.8%

  

 

ACAS CLO Ltd., Class C (b):

      

Series 2014-1A, 3.22%, 7/18/26

     USD        750      $ 726,187   

Series 2014-2A, 3.52%, 1/15/27

       1,000        980,188   

ALM Loan Funding (b):

      

Series 2012-5A, Class BR, 3.31%, 10/18/27

       2,000        1,962,600   

Series 2013-7R2A, Class B, 2.89%, 4/24/24

       3,000        2,968,766   

ALM XII Ltd., Series 2015-12A, Class B, 3.57%, 4/16/27 (b)

       1,000        995,000   

ALM XIV Ltd., Series 2014-14A (b):

      

Class B, 3.24%, 7/28/26

       5,000        4,912,841   

Class C, 3.74%, 7/28/26

       5,000        4,623,522   

Anchorage Capital CLO Ltd., 3.32%, 4/28/26 (b)

       1,000        972,012   

Apidos CDO, Series 2012-9AR, Class CR, 3.22%, 7/15/23 (b)

       1,000        990,600   

Apidos CLO XVII, Series 2014-17A, Class B, 3.17%, 4/17/26 (b)

       1,000        974,251   

Apidos CLO XVIII, Series 2014-18A, Class C, 3.97%, 7/22/26 (b)

       1,300        1,215,857   

Atlas Senior Loan Fund V Ltd., Series 2014-1A (b):

      

Class C, 3.32%, 7/16/26

       1,000        999,990   

Class D, 3.77%, 7/16/26

       2,000        1,828,801   

Atlas Senior Loan Fund VI Ltd., Series 2014-6A, Class D, 3.99%, 10/15/26 (b)

       3,000        2,779,176   

Atrium CDO Corp., Series 5A, Class A4, 0.72%, 7/20/20 (b)

       9,000        8,681,002   

Babson CLO Ltd., Series 2014-3A (b):

      

Class C1, 3.32%, 1/15/26

       1,500        1,490,250   

Class D1, 3.82%, 1/15/26

       1,000        927,500   

Battalion CLO VII Ltd., Series 2014-7A, Class C, 4.22%, 10/17/26 (b)

       1,000        926,590   

Benefit Street Partners CLO IV Ltd., Series 2014-IVA, Class B, 3.12%, 7/20/26 (b)

       1,250        1,221,875   

Benefit Street Partners CLO VI Ltd., Series 2015-VIA, Class B, 3.37%, 4/18/27 (b)

       1,000        985,000   

BlueMountain CLO Ltd., Series 2011-1A, Class D, 4.32%, 8/16/22 (b)

       2,000        2,003,664   

Bowman Park CLO Ltd., Series 2014-1A, Class D2, 4.28%, 11/23/25 (b)

       1,000        951,827   

Carlyle Global Market Strategies CLO Ltd., Class C (b):

      

Series 2014-5A, 4.47%, 10/16/25

       1,000        993,862   

Series 2015-1A, 3.44%, 4/20/27

       1,000        993,727   

CIFC Funding Ltd., Series 2014-3A (b):

      

Class C1, 3.12%, 7/22/26

       1,500        1,446,690   

Class D, 3.72%, 7/22/26

       1,071        974,311   

Dryden 34 Senior Loan Fund, Series 2014-34A, Class C, 3.12%, 10/15/26 (b)

       750        729,820   

GoldenTree Loan Opportunities IX Ltd., Series 2014-9A, Class D, 3.79%, 10/29/26 (b)

       1,000        928,929   

Highbridge Loan Management 4-2014 Ltd., Series 4A-2014, Class B, 3.29%, 7/28/25 (b)

       1,000        962,727   
Asset-Backed Securities (a)   

Par  

(000)

    Value  

Asset-Backed Securities (continued)

  

 

ING IM CLO Ltd., Series 2012-4A, Class C, 4.82%, 10/15/23 (b)

     USD        1,000      $ 984,662   

LCM XVIII LP, Series 18A, Class C1, 3.47%, 4/20/27 (b)

       1,000        982,675   

Limerock CLO III LLC, Series 2014-3A, Class C, 3.89%, 10/20/26 (b)

       1,000        905,137   

Madison Park Funding Ltd. (b):

      

Series 2012-10A, Class D, 4.57%, 1/20/25

       3,000        2,970,535   

Series 2012-8AR, Class CR, 3.10%, 4/22/22

       1,350        1,350,259   

Series 2012-8AR, Class DR, 4.15%, 4/22/22

       1,500        1,474,758   

Series 2014-14A, Class D, 3.89%, 7/20/26

       2,000        1,873,189   

Madison Park Funding IX Ltd., Series 2012-9AR, Class C1R, 3.17%, 8/15/22 (b)

       1,000        997,714   

Madison Park Funding XIII Ltd., Series 2014-13A, Class C, 3.07%, 1/19/25 (b)

       1,000        972,234   

Madison Park Funding XV Ltd., Series 2014-15A, Class B1, 3.55%, 1/27/26 (b)

       2,400        2,399,951   

Madison Park Funding XVI Ltd., Series 2015-16A, Class B, 3.30%, 4/20/26 (b)

       1,000        987,800   

Octagon Investment Partners XX Ltd., Series 2014-1A, Class C, 3.11%, 8/12/26 (b)

       750        724,101   

Octagon Loan Funding Ltd., Series 2014-1A, Class D, 3.97%, 11/18/26 (b)

       1,500        1,382,283   

OZLM VII Ltd., Series 2014-7A, Class C, 3.92%, 7/17/26 (b)

       1,500        1,379,154   

OZLM VIII Ltd., Series 2014-8A, Class B, 3.29%, 10/17/26 (b)

       900        871,457   

OZLM XI Ltd., Series 2015-11A, Class B, 3.30%, 1/30/27 (b)

       2,750        2,704,857   

Regatta IV Funding Ltd., Series 2014-1A (b):

      

Class C, 3.25%, 7/25/26

       1,500        1,453,592   

Class D, 3.80%, 7/25/26

       1,000        898,879   

Regatta V Funding Ltd., Series 2014-1A (b):

      

Class B, 3.32%, 10/25/26

       1,000        973,051   

Class C, 3.77%, 10/25/26

       1,000        899,408   

Silver Spring CLO Ltd., Series 2014-1A, Class D, 3.77%, 10/15/26 (b)

       750        646,133   

SLM Student Loan Trust, Series 2004-B, Class A2, 0.54%, 6/15/21

       1,745        1,736,554   

Sound Point CLO Ltd., Series 2014-3A, Class D, 3.92%, 1/23/27 (b)

       1,000        911,632   

Symphony CLO Ltd., Series 2012-10AR, Class CR, 3.17%, 7/23/23 (b)

       1,000        1,004,672   

Symphony CLO XV Ltd., Series 2014-15A (b):

      

Class C, 3.52%, 10/17/26

       1,500        1,483,125   

Class D, 4.07%, 10/17/26

       1,000        965,000   

Venture XIII CLO Ltd., Series 2013-13A, Class D, 3.88%, 6/10/25 (b)

       800        749,141   

Voya CLO Ltd., Class C (b):

      

Series 2014-3A, 3.92%, 7/25/26

       1,250        1,131,252   
 
Portfolio Abbreviations

 

ABS    Asset-Backed Security      FKA    Formerly Known As    OTC    Over-the-Counter
ADS    American Depositary Shares      GBP    British Pound    PIK    Payment-In-Kind
ARB    Airport Revenue Bonds      IDR    Indonesian Rupiah    PLN    Polish Zloty
AUD    Australian Dollar      JIBAR    Johannesburg Interbank Agreed Rate    RB    Revenue Bonds
BRL    Brazilian Real      JPY    Japanese Yen    REMIC    Real Estate Mortgage Investment Conduit
CAD    Canadian Dollar      KLIBOR    Kuala Lumpur Interbank Offered Rate    RUB    Russian Ruble
CLO    Collateralized Loan Obligation      KRW    South Korean Won    SEK    Swedish Krona
CLP    Chilean Peso      LIBOR    London Interbank Offered Rate    TRY    Turkish Lira
CNRR    Chinese Repo Rate      MXIBTIIE    Mexico Interbank TIIE 28 Day    TWD    Taiwan Dollar
CNY    Chinese Renminbi      MXN    Mexican Peso    USD    U.S. Dollar
DIP    Debtor-In-Possession      MYR    Malaysian Ringgit    ZAR    South African Rand
EUR    Euro      NZD    New Zealand Dollar      

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    OCTOBER 31, 2015    11


Schedule of Investments (continued)

  

BlackRock Credit Allocation Income Trust (BTZ)

 

Asset-Backed Securities (a)   

Par  

(000)

    Value  

Asset-Backed Securities (continued)

  

 

Voya CLO Ltd., Class C (b) (continued):

      

Series 2014-4A, 4.32%, 10/14/26

     USD        1,000      $ 952,637   

WhiteHorse IX Ltd., Series 2014-9A, Class C, 3.02%, 7/17/26 (b)

             1,500        1,404,816   
Total Asset-Backed Securities — 5.8%                      89,318,223   
      
                          
Corporate Bonds                      

Aerospace & Defense — 0.6%

      

Huntington Ingalls Industries, Inc.:

      

7.13%, 3/15/21

       2,000        2,090,000   

5.00%, 12/15/21 (b)

       536        557,440   

TransDigm, Inc.:

      

6.00%, 7/15/22

       4,585        4,630,850   

6.50%, 7/15/24

       2,140        2,177,450   
      

 

 

 
                       9,455,740   

Air Freight & Logistics — 0.2%

      

XPO Logistics, Inc. (b):

      

7.88%, 9/01/19

       1,548        1,557,675   

6.50%, 6/15/22

       1,576        1,406,580   
      

 

 

 
                       2,964,255   

Airlines — 1.1%

      

American Airlines Group, Inc.,
4.63%, 3/01/20 (b)

       692        685,945   

Continental Airlines Pass-Through Trust:

      

Series 2009-2, Class B, 9.25%, 11/10/18

       2,166        2,360,467   

Series 2012-3, Class C, 6.13%, 4/29/18

       2,040        2,102,016   

Delta Air Lines Pass-Through Trust, Series 2002-1, Class G-1, 6.72%, 7/02/24

       3,200        3,639,748   

Turkish Airlines 2015-1 Class A Pass Through Trust, 4.20%, 9/15/28 (b)

       3,029        2,930,774   

United Airlines Pass-Through Trust, Series 2014-1, Class B, 4.75%, 10/11/23

       3,999        4,016,284   

Virgin Australia Trust, Series 2013-1, Class B, 6.00%, 4/23/22 (b)

       1,326        1,349,279   
      

 

 

 
                       17,084,513   

Auto Components — 1.3%

      

Goodyear Tire & Rubber Co., 6.50%, 3/01/21

       1,600        1,700,000   

Icahn Enterprises LP/Icahn Enterprises Finance Corp.:

      

3.50%, 3/15/17

       265        268,101   

4.88%, 3/15/19

       3,950        4,040,060   

6.00%, 8/01/20

       3,108        3,243,975   

5.88%, 2/01/22

       3,816        3,930,480   

Schaeffler Finance BV, 4.75%, 5/15/21 (b)

       2,470        2,513,225   

Schaeffler Holding Finance BV (b)(c):

      

6.25%, (6.25% Cash) 11/15/19

       1,112        1,173,160   

6.75%, (6.75% Cash) 11/15/22

       2,417        2,640,572   

ZF North America Capital, Inc., 4.50%, 4/29/22 (b)

       291        292,999   
      

 

 

 
                       19,802,572   

Automobiles — 0.5%

  

General Motors Co.:

      

4.88%, 10/02/23

       1,875        1,967,072   

7.45%, 7/16/31

       3,660        4,697,724   

6.25%, 10/02/43

       940        1,037,945   
      

 

 

 
                       7,702,741   

Banks — 5.0%

  

Associated Banc-Corp, 5.13%, 3/28/16 (d)

       7,430        7,522,266   

CIT Group, Inc.:

      

4.25%, 8/15/17

       4,600        4,703,500   
Corporate Bonds   

Par  

(000)

    Value  

Banks (continued)

  

CIT Group, Inc. (continued):

      

5.25%, 3/15/18

     USD        4,030      $ 4,226,462   

6.63%, 4/01/18 (b)

       335        360,963   

5.50%, 2/15/19 (b)

       5,147        5,462,254   

5.00%, 8/01/23

       660        691,350   

City National Corp., 5.25%, 9/15/20 (d)

       2,900        3,261,636   

Cooperatieve Centrale Raiffeisen-Boerenleenbank BA, 3.95%, 11/09/22 (d)

       3,775        3,816,593   

Credit Suisse Group AG, 6.50%, 8/08/23 (b)

       12,000        13,140,000   

Discover Bank, 8.70%, 11/18/19

       748        888,200   

Fifth Third Bancorp, 5.10% (a)(e)

       5,000        4,593,750   

HSBC Finance Corp., 6.68%, 1/15/21 (d)

       5,150        5,989,192   

Royal Bank of Scotland Group PLC, 6.00%, 12/19/23

       10,080        10,943,029   

Wells Fargo & Co. (d):

      

3.45%, 2/13/23

       2,325        2,331,756   

4.13%, 8/15/23

       4,000        4,162,764   

5.61%, 1/15/44

       4,119        4,670,176   
      

 

 

 
                       76,763,891   

Biotechnology — 0.2%

  

Amgen, Inc., 4.40%, 5/01/45 (d)

             3,050        2,824,690   

Building Products — 0.4%

  

Building Materials Corp. of America (b):

      

6.75%, 5/01/21

       2,700        2,863,350   

6.00%, 10/15/25

       2,828        3,004,750   

Masonite International Corp., 5.63%, 3/15/23 (b)

       610        637,450   
      

 

 

 
                       6,505,550   

Capital Markets — 3.1%

  

E*Trade Financial Corp., 5.38%, 11/15/22

       1,348        1,441,279   

Goldman Sachs Group, Inc. (d):

      

6.25%, 9/01/17

       625        678,345   

7.50%, 2/15/19

       5,165        6,019,719   

5.25%, 7/27/21

       1,175        1,311,070   

5.75%, 1/24/22

       5,500        6,302,494   

6.25%, 2/01/41

       15,000        18,147,945   

Morgan Stanley (d):

      

5.63%, 9/23/19

       6,770        7,543,053   

5.50%, 7/28/21

       2,695        3,050,508   

UBS AG, 5.88%, 7/15/16

       3,450        3,560,524   
      

 

 

 
                       48,054,937   

Chemicals — 1.3%

  

Ashland, Inc., 3.88%, 4/15/18

       1,745        1,803,894   

Axalta Coating Systems US Holdings, Inc./Axalta Coating Systems Dutch Holding BV,
7.38%, 5/01/21 (b)

       617        652,478   

Basell Finance Co. BV, 8.10%, 3/15/27 (b)(d)

       6,000        7,686,924   

CF Industries, Inc., 5.38%, 3/15/44

       2,500        2,468,767   

Chemours Co., 7.00%, 5/15/25 (b)

       434        323,330   

Huntsman International LLC:

      

4.88%, 11/15/20

       1,075        1,011,199   

5.13%, 11/15/22 (b)

       2,495        2,320,350   

NOVA Chemicals Corp., 5.25%, 8/01/23 (b)

       2,277        2,329,826   

Platform Specialty Products Corp.,
6.50%, 2/01/22 (b)

       1,372        1,166,200   
      

 

 

 
                       19,762,968   

Commercial Services & Supplies — 3.1%

  

ADS Waste Holdings, Inc., 8.25%, 10/01/20

       1,003        1,051,896   

Aviation Capital Group Corp. (b):

      

7.13%, 10/15/20 (d)

       31,000        36,037,500   

6.75%, 4/06/21

       7,850        8,890,125   

Brand Energy & Infrastructure Services, Inc., 8.50%, 12/01/21 (b)

       301        272,405   
 

 

See Notes to Financial Statements.

 

                
12    ANNUAL REPORT    OCTOBER 31, 2015   


Schedule of Investments (continued)

  

BlackRock Credit Allocation Income Trust (BTZ)

 

Corporate Bonds   

Par  

(000)

    Value  

Commercial Services & Supplies (continued)

  

Mobile Mini, Inc., 7.88%, 12/01/20

     USD        2,480      $ 2,579,200   
      

 

 

 
                       48,831,126   

Communications Equipment — 0.3%

  

CommScope Technologies Finance LLC,
6.00%, 6/15/25 (b)

       2,242        2,275,630   

CommScope, Inc., 5.50%, 6/15/24 (b)

       254        251,460   

Harris Corp., 5.05%, 4/27/45

       1,790        1,753,584   

Plantronics, Inc., 5.50%, 5/31/23 (b)

       423        430,403   
      

 

 

 
                       4,711,077   

Construction & Engineering — 0.3%

      

AECOM Co.:

      

5.75%, 10/15/22

       333        346,320   

5.88%, 10/15/24 (b)

       2,311        2,386,107   

BlueLine Rental Finance Corp., 7.00%, 2/01/19 (b)

       413        416,614   

Safway Group Holding LLC/Safway Finance Corp., 7.00%, 5/15/18 (b)

       568        583,620   

Weekley Homes LLC/Weekley Finance Corp., 6.00%, 2/01/23

       825        792,000   
      

 

 

 
                       4,524,661   

Construction Materials — 0.5%

  

Allegion US Holding Co., Inc., 5.75%, 10/01/21

       1,907        2,002,350   

HD Supply, Inc.:

      

7.50%, 7/15/20 (d)

       2,905        3,093,825   

5.25%, 12/15/21 (b)

       3,278        3,441,900   
      

 

 

 
                       8,538,075   

Consumer Finance — 2.9%

  

Ally Financial, Inc.:

      

5.13%, 9/30/24

       855        900,914   

4.63%, 3/30/25

       136        137,020   

8.00%, 11/01/31

       5,705        6,917,313   

Capital One Bank USA NA, 3.38%, 2/15/23 (d)

       11,610        11,360,698   

Countrywide Financial Corp., 6.25%, 5/15/16 (d)

       8,069        8,284,224   

Discover Financial Services, 3.85%, 11/21/22

       3,252        3,225,587   

Experian Finance PLC, 2.38%, 6/15/17 (b)(d)

       2,550        2,559,624   

Navient Corp., 6.25%, 1/25/16

       11,620        11,721,675   
      

 

 

 
                       45,107,055   

Containers & Packaging — 0.5%

  

Beverage Packaging Holdings Luxembourg II SA, 5.63%, 12/15/16 (b)

       904        904,000   

Crown Americas LLC/Crown Americas Capital Corp. III, 6.25%, 2/01/21

       3,128        3,249,210   

Sealed Air Corp. (b):

      

6.50%, 12/01/20

       2,330        2,603,775   

5.13%, 12/01/24

       649        666,848   

5.50%, 9/15/25

       835        880,925   
      

 

 

 
                       8,304,758   

Diversified Consumer Services — 0.3%

  

Service Corp. International, 4.50%, 11/15/20

             4,382        4,480,595   

Diversified Financial Services — 10.2%

  

AerCap Ireland Capital, Ltd./AerCap Global Aviation Trust:

      

4.63%, 10/30/20

       1,619        1,677,689   

4.63%, 7/01/22

       518        529,008   

Air Lease Corp., 3.75%, 2/01/22

       5,000        4,948,735   

Aircastle Ltd., 6.25%, 12/01/19

       3,937        4,301,172   

Bank of America Corp. (d):

      

3.75%, 7/12/16

       5,525        5,631,400   

5.00%, 5/13/21

       17,100        18,793,635   

5.70%, 1/24/22

       2,590        2,961,994   

Bank of America NA, 5.30%, 3/15/17 (d)

       13,440        14,100,845   
Corporate Bonds   

Par  

(000)

    Value  

Diversified Financial Services (continued)

  

Barclays PLC, 4.38%, 9/11/24

     USD        2,100      $ 2,062,578   

Citigroup, Inc. (d):

      

4.45%, 1/10/17

       4,800        4,980,048   

8.50%, 5/22/19

       464        560,186   

6.68%, 9/13/43

       4,125        5,163,316   

Deutsche Bank AG, 4.50%, 4/01/25

       3,985        3,872,085   

Ford Motor Credit Co. LLC:

      

8.00%, 12/15/16

       4,000        4,279,300   

5.88%, 8/02/21

       9,420        10,737,660   

General Motors Financial Co., Inc.:

      

6.75%, 6/01/18

       1,700        1,858,947   

4.38%, 9/25/21

       2,260        2,344,721   

4.25%, 5/15/23

       1,681        1,708,585   

ING Bank NV, 5.00%, 6/09/21 (b)(d)

       8,000        8,903,408   

Intesa Sanpaolo SpA, 3.13%, 1/15/16

       5,450        5,473,217   

Jefferies Finance LLC/JFIN Co-Issuer Corp., 7.38%, 4/01/20 (b)

       1,705        1,670,900   

Leucadia National Corp., 5.50%, 10/18/23

       4,000        3,989,852   

Moody’s Corp., 6.06%, 9/07/17

       20,000        20,618,360   

MSCI, Inc., 5.75%, 8/15/25 (b)

       738        778,221   

Mubadala GE Capital Ltd., 3.00%, 11/10/19 (b)

       5,000        4,978,550   

Pershing Square Holdings Ltd., 5.50%, 7/15/22 (b)

       5,500        5,170,000   

Resparcs Funding LP I, 8.00% (e)(f)(g)

       4,000        1,397,600   

Reynolds Group Issuer, Inc.:

      

9.00%, 4/15/19

       370        378,325   

7.88%, 8/15/19

       2,480        2,569,900   

9.88%, 8/15/19

       147        154,718   

5.75%, 10/15/20

       3,142        3,267,680   

6.88%, 2/15/21

       105        109,725   

Royal Bank of Scotland Group PLC:

      

6.10%, 6/10/23

       2,500        2,719,543   

5.13%, 5/28/24

       5,250        5,382,856   
      

 

 

 
                       158,074,759   

Diversified Telecommunication Services — 5.1%

  

AT&T, Inc.:

      

6.30%, 1/15/38 (d)

       12,000        13,341,528   

4.30%, 12/15/42

       265        229,734   

4.35%, 6/15/45

       367        317,775   

CenturyLink, Inc.:

      

5.63%, 4/01/20

       1,375        1,376,568   

6.45%, 6/15/21

       285        287,138   

Frontier Communications Corp.:

      

6.25%, 9/15/21

       980        875,140   

7.63%, 4/15/24

       1,384        1,238,680   

6.88%, 1/15/25

       475        410,446   

11.00%, 9/15/25 (b)

       797        835,352   

Level 3 Financing, Inc.:

      

5.38%, 8/15/22

       2,250        2,289,375   

5.13%, 5/01/23 (b)

       1,183        1,196,309   

5.38%, 1/15/24 (b)(h)

       754        763,425   

5.38%, 5/01/25 (b)

       2,455        2,461,137   

Telefonica Emisiones SAU, 3.19%, 4/27/18

       6,550        6,718,001   

Verizon Communications, Inc. (d):

      

5.15%, 9/15/23

       8,775        9,780,668   

6.40%, 9/15/33

       9,475        10,950,845   

7.35%, 4/01/39

       7,825        9,998,871   

6.55%, 9/15/43

       13,225        15,830,695   
      

 

 

 
                       78,901,687   

Electric Utilities — 3.8%

  

CMS Energy Corp., 5.05%, 3/15/22

       9,900        10,984,555   

Duke Energy Corp., 3.55%, 9/15/21 (d)

       3,650        3,776,542   

Great Plains Energy, Inc., 5.29%, 6/15/22 (i)

       5,550        6,149,988   
 

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    OCTOBER 31, 2015    13


Schedule of Investments (continued)

  

BlackRock Credit Allocation Income Trust (BTZ)

 

Corporate Bonds   

Par  

(000)

    Value  

Electric Utilities (continued)

  

Midland Cogeneration Venture LP, 5.25%, 3/15/25 (b)

     USD        4,552      $ 4,729,342   

NiSource Finance Corp., 6.80%, 1/15/19 (d)

       3,075        3,496,241   

Oncor Electric Delivery Co. LLC (d):

      

4.10%, 6/01/22

       4,150        4,345,610   

5.30%, 6/01/42

       2,750        2,996,026   

Progress Energy, Inc., 7.00%, 10/30/31 (d)

       12,000        15,257,772   

Puget Energy, Inc.:

      

6.00%, 9/01/21

       275        315,647   

5.63%, 7/15/22

       5,550        6,270,496   
      

 

 

 
                       58,322,219   

Electrical Equipment — 0.1%

      

GrafTech International Ltd., 6.38%, 11/15/20

             1,950        1,111,500   

Electronic Equipment, Instruments & Components — 0.3%

  

Jabil Circuit, Inc., 8.25%, 3/15/18

       2,600        2,918,500   

Nielsen Finance LLC/Nielsen Finance Co., 5.00%, 4/15/22 (b)

       475        482,719   

Sanmina Corp., 4.38%, 6/01/19 (b)

       1,415        1,443,300   
      

 

 

 
                       4,844,519   

Energy Equipment & Services — 0.7%

  

Energy Transfer Partners LP, 5.20%, 2/01/22

       10,200        10,148,592   

Genesis Energy LP/Genesis Energy Finance Corp.:

      

5.75%, 2/15/21

       293        273,955   

6.75%, 8/01/22

       375        365,625   

Transocean, Inc., 6.00%, 3/15/18 (d)

       540        506,520   
      

 

 

 
                       11,294,692   

Food & Staples Retailing — 1.6%

  

CVS Health Corp.:

      

4.75%, 12/01/22 (b)

       289        315,002   

5.00%, 12/01/24 (b)

       183        203,267   

5.13%, 7/20/45

       3,879        4,158,618   

Family Tree Escrow LLC (b):

      

5.25%, 3/01/20

       335        349,238   

5.75%, 3/01/23

       4,623        4,871,486   

H.J. Heinz Finance Co., 7.13%, 8/01/39 (b)

       4,415        5,643,491   

Rite Aid Corp.:

      

6.75%, 6/15/21

       541        580,899   

6.13%, 4/01/23 (b)

       2,974        3,204,485   

Wal-Mart Stores, Inc., 5.25%, 9/01/35 (d)

       5,150        5,929,277   
      

 

 

 
                       25,255,763   

Food Products — 1.2%

  

Barry Callebaut Services NV, 5.50%, 6/15/23 (b)

       835        886,837   

Kellogg Co., Series B, 7.45%, 4/01/31 (d)

       3,425        4,403,139   

Mondelez International, Inc.:

      

6.50%, 8/11/17

       4,450        4,835,864   

6.13%, 8/23/18

       4,840        5,354,559   

Post Holdings, Inc. (b):

      

7.75%, 3/15/24

       1,502        1,599,630   

8.00%, 7/15/25

       743        806,155   

Smithfield Foods, Inc., 5.88%, 8/01/21 (b)

       715        750,750   
      

 

 

 
                       18,636,934   

Gas Utilities — 0.1%

  

Targa Resources Partners LP/Targa Resources Partners Finance Corp., 6.88%, 2/01/21

             1,265        1,271,325   

Health Care Equipment & Supplies — 0.6%

  

DJO Finco Inc./DJO Finance LLC/DJO Finance Corp., 8.13%, 6/15/21 (b)

       2,065        2,049,513   

Mallinckrodt International Finance SA / Mallinckrodt CB LLC (b):

      

4.88%, 4/15/20

       517        495,674   

5.75%, 8/01/22

       1,370        1,302,349   
Corporate Bonds  

Par  

(000)

    Value  

Health Care Equipment & Supplies (continued)

  

Mallinckrodt International Finance SA / Mallinckrodt CB LLC (b) (continued):

     

5.63%, 10/15/23

    USD        1,099      $ 1,037,181   

Medtronic, Inc., 4.63%, 3/15/45 (d)

      4,565        4,799,034   
     

 

 

 
                      9,683,751   

Health Care Providers & Services — 4.2%

  

Acadia Healthcare Co., Inc., 5.13%, 7/01/22

      435        429,563   

Amsurg Corp., 5.63%, 7/15/22

      1,856        1,823,520   

CHS/Community Health Systems, Inc.:

     

5.13%, 8/15/18

      1,620        1,650,375   

6.88%, 2/01/22

      1,111        1,119,332   

DaVita HealthCare Partners, Inc.:

     

5.13%, 7/15/24

      1,990        2,019,850   

5.00%, 5/01/25

      1,871        1,857,338   

HCA, Inc.:

     

3.75%, 3/15/19 (d)

      4,364        4,440,370   

6.50%, 2/15/20 (d)

      10,421        11,658,494   

7.50%, 2/15/22

      2,214        2,546,100   

5.88%, 3/15/22

      340        374,000   

4.75%, 5/01/23

      676        692,900   

HealthSouth Corp.:

     

5.13%, 3/15/23

      512        503,040   

5.75%, 11/01/24

      889        889,000   

Hologic, Inc., 5.25%, 7/15/22 (b)

      805        840,219   

Tenet Healthcare Corp.:

     

6.25%, 11/01/18

      736        783,840   

4.75%, 6/01/20

      1,450        1,471,750   

6.00%, 10/01/20

      3,645        3,936,600   

4.50%, 4/01/21

      73        73,000   

4.38%, 10/01/21

      7,335        7,316,662   

8.13%, 4/01/22

      4,907        5,189,152   

6.75%, 6/15/23

      1,758        1,744,815   

UnitedHealth Group, Inc., 6.88%, 2/15/38 (d)

      10,000        13,420,100   
     

 

 

 
                      64,780,020   

Health Care Technology — 0.2%

  

Amgen, Inc., 5.15%, 11/15/41 (d)

            3,450        3,563,160   

Hotels, Restaurants & Leisure — 0.9%

  

CDW LLC/CDW Finance Corp.:

     

6.00%, 8/15/22

      1,380        1,481,071   

5.00%, 9/01/23

      306        317,475   

5.50%, 12/01/24

      2,458        2,574,755   

ESH Hospitality, Inc., 5.25%, 5/01/25 (b)

      688        690,546   

Jarden Corp., 5.00%, 11/15/23 (b)

      398        408,945   

MGM Resorts International, 6.00%, 3/15/23

      1,374        1,394,610   

New Red Finance, Inc., 6.00%, 4/01/22 (b)

      2,215        2,317,444   

Pinnacle Entertainment, Inc., 6.38%, 8/01/21

      1,586        1,689,090   

RHP Hotel Properties LP/RHP Finance Corp., 5.00%, 4/15/23

      607        626,727   

Sabre GLBL, Inc., 5.38%, 4/15/23 (b)

      594        602,910   

Six Flags Entertainment Corp., 5.25%, 1/15/21 (b)

      1,718        1,782,425   
     

 

 

 
                      13,885,998   

Household Durables — 1.2%

  

Beazer Homes USA, Inc., 6.63%, 4/15/18

      1,960        2,023,700   

Brookfield Residential Properties, Inc./Brookfield Residential US Corp., 6.13%, 7/01/22 (b)

      1,647        1,618,177   

K. Hovnanian Enterprises, Inc., 7.25%, 10/15/20 (b)

      398        374,120   

KB Home, 7.25%, 6/15/18

      1,990        2,129,300   

Shea Homes LP / Shea Homes Funding Corp. (b):

     

5.88%, 4/01/23

      910        952,088   

6.13%, 4/01/25

      920        963,700   

Standard Pacific Corp., 8.38%, 1/15/21

      3,015        3,576,694   
 

 

See Notes to Financial Statements.

 

                
14    ANNUAL REPORT    OCTOBER 31, 2015   


Schedule of Investments (continued)

  

BlackRock Credit Allocation Income Trust (BTZ)

 

Corporate Bonds   

Par  

(000)

    Value  

Household Durables (continued)

  

Taylor Morrison Communities, Inc./Monarch Communities, Inc., 5.25%, 4/15/21 (b)

     USD        767      $ 772,753   

Toll Brothers Finance Corp., 4.88%, 11/15/25

       96        95,880   

TRI Pointe Holdings, Inc.:

      

4.38%, 6/15/19

       920        914,250   

5.88%, 6/15/24

       625        625,000   

United Rentals North America, Inc.:

      

7.38%, 5/15/20

       2,025        2,149,031   

7.63%, 4/15/22

       1,853        2,010,709   
      

 

 

 
                       18,205,402   

Household Products — 0.2%

  

Spectrum Brands, Inc.:

      

6.38%, 11/15/20

       810        864,675   

6.63%, 11/15/22

       1,110        1,212,675   

5.75%, 7/15/25 (b)

       1,002        1,068,383   
      

 

 

 
                       3,145,733   

Independent Power and Renewable Electricity Producers — 0.7%

  

Calpine Corp.:

      

6.00%, 1/15/22 (b)

       1,548        1,626,948   

5.38%, 1/15/23

       2,109        2,016,731   

5.88%, 1/15/24 (b)

       823        860,035   

5.50%, 2/01/24

       1,749        1,661,550   

5.75%, 1/15/25

       1,064        1,008,140   

Dynegy, Inc., 6.75%, 11/01/19

       2,195        2,189,513   

QEP Resources, Inc., 5.38%, 10/01/22

       1,927        1,734,300   
      

 

 

 
                       11,097,217   

Insurance — 5.4%

  

American International Group, Inc., 6.40%, 12/15/20 (d)

       8,710        10,284,594   

Aon Corp., 5.00%, 9/30/20 (d)

       7,700        8,493,247   

Aon PLC, 4.25%, 12/12/42 (d)

       6,500        5,913,401   

Forethought Financial Group, Inc., 8.63%, 4/15/21 (b)

       3,400        3,899,790   

Manulife Financial Corp., 4.90%, 9/17/20 (d)

       10,425        11,355,014   

MPL 2 Acquisition Canco, Inc., 9.88%, 8/15/18 (b)

       1,455        1,527,750   

Northwestern Mutual Life Insurance Co., 6.06%, 3/30/40 (b)(d)

       12,000        14,464,164   

Principal Financial Group, Inc., 8.88%, 5/15/19

       2,825        3,427,092   

Prudential Financial, Inc., 6.63%, 12/01/37 (d)

       10,000        12,559,130   

XLIT Ltd., 5.75%, 10/01/21 (d)

       10,085        11,374,962   
      

 

 

 
                       83,299,144   

Internet Software & Services — 0.0%

  

Netflix, Inc., 5.50%, 2/15/22 (b)

             563        593,965   

IT Services — 0.8%

  

Fidelity National Information Services, Inc., 5.00%, 10/15/25

       1,935        2,000,627   

First Data Corp. (b):

      

6.75%, 11/01/20

       1,768        1,863,030   

8.25%, 1/15/21

       250        262,188   

5.38%, 8/15/23

       1,854        1,886,445   

7.00%, 12/01/23 (h)

       6,385        6,496,737   
      

 

 

 
                       12,509,027   

Life Sciences Tools & Services — 0.9%

  

Life Technologies Corp., 6.00%, 3/01/20 (d)

             12,000        13,569,276   

Media — 7.0%

  

21st Century Fox America, Inc., 6.15%, 3/01/37 (d)

       9,575        11,023,832   

A&E Television Networks LLC, 3.11%, 8/22/19

       5,000        5,079,000   

Altice Financing SA, 6.63%, 2/15/23 (b)

       1,313        1,316,283   

Altice Finco SA, 7.63%, 2/15/25 (b)

       96        90,960   
Corporate Bonds   

Par  

(000)

    Value  

Media (continued)

  

Altice SA (b):

      

7.75%, 5/15/22

     USD        2,425      $ 2,334,062   

7.63%, 2/15/25

       1,515        1,393,042   

Altice US Finance I Corp., 5.38%, 7/15/23 (b)

       2,919        2,954,028   

AMC Networks, Inc.:

      

7.75%, 7/15/21

       1,330        1,426,425   

4.75%, 12/15/22

       685        687,569   

CCO Safari II LLC (b):

      

6.38%, 10/23/35

       479        493,412   

6.48%, 10/23/45

       4,584        4,753,571   

6.83%, 10/23/55

       3,540        3,587,040   

Cinemark USA, Inc., 5.13%, 12/15/22

       349        350,745   

Clear Channel Worldwide Holdings, Inc., 6.50%, 11/15/22

       10,205        10,604,237   

COX Communications, Inc., 8.38%, 3/01/39 (b)(d)

       5,000        5,718,440   

CSC Holdings LLC, 8.63%, 2/15/19

       4,005        4,255,312   

DIRECTV Holdings LLC/DIRECTV Financing Co., Inc., 5.00%, 3/01/21 (d)

       8,575        9,374,104   

DISH DBS Corp., 5.88%, 11/15/24

       2,462        2,354,903   

Gray Television, Inc., 7.50%, 10/01/20

       543        566,729   

Grupo Televisa SAB, 5.00%, 5/13/45 (d)

       3,345        3,016,769   

Intelsat Jackson Holdings SA, 5.50%, 8/01/23

       2,909        2,398,107   

Interpublic Group of Cos., Inc., 3.75%, 2/15/23

       6,025        5,911,423   

Live Nation Entertainment, Inc., 7.00%, 9/01/20 (b)

       463        490,780   

NAI Entertainment Holdings/NAI Entertainment Holdings Finance Corp., 5.00%, 8/01/18 (b)

       1,471        1,518,807   

Neptune Finco Corp., 6.63%, 10/15/25 (b)

       1,436        1,511,390   

Numericable Group SA, 6.00%, 5/15/22 (b)

       8,520        8,541,300   

Outfront Media Capital LLC/Outfront Media Capital Corp.:

      

5.25%, 2/15/22

       249        255,848   

5.63%, 2/15/24

       122        126,957   

Sirius XM Radio, Inc., 4.25%, 5/15/20 (b)

       2,300        2,328,750   

Time Warner Cable, Inc., 6.55%, 5/01/37 (d)

       3,519        3,526,182   

Tribune Media Co., 5.88%, 7/15/22 (b)

       1,403        1,441,582   

Unitymedia Hessen GmbH & Co. KG/Unitymedia NRW GmbH, 5.50%, 1/15/23 (b)

       1,000        1,027,800   

Univision Communications, Inc. (b):

      

5.13%, 5/15/23

       5,293        5,240,070   

5.13%, 2/15/25

       999        981,518   

Virgin Media Secured Finance PLC, 5.38%, 4/15/21 (b)

       1,255        1,317,330   
      

 

 

 
                       107,998,307   

Metals & Mining — 2.3%

  

Alcoa, Inc., 5.13%, 10/01/24

       1,903        1,886,349   

AngloGold Ashanti Holdings PLC, 5.13%, 8/01/22

       5,000        4,559,375   

ArcelorMittal, 6.13%, 6/01/18

       2,575        2,581,437   

Commercial Metals Co., 4.88%, 5/15/23

       2,194        1,941,690   

Constellium NV:

      

4.63%, 5/15/21

     EUR        490        434,835   

5.75%, 5/15/24 (b)

     USD        1,178        848,160   

First Quantum Minerals Ltd. (b):

      

7.00%, 2/15/21

       303        224,220   

7.25%, 5/15/22

       912        665,190   

Freeport-McMoRan, Inc.:

      

7.13%, 11/01/27 (d)

       8,500        7,626,310   

5.40%, 11/14/34

       5,225        3,685,245   

Novelis, Inc., 8.75%, 12/15/20

       3,247        3,255,117   

Southern Copper Corp., 5.88%, 4/23/45

       3,870        3,382,991   

Steel Dynamics, Inc.:

      

5.13%, 10/01/21

       1,105        1,096,713   

6.38%, 8/15/22

       1,430        1,469,325   
 

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    OCTOBER 31, 2015    15


Schedule of Investments (continued)

  

BlackRock Credit Allocation Income Trust (BTZ)

 

Corporate Bonds   

Par  

(000)

    Value  

Metals & Mining (continued)

  

Steel Dynamics, Inc. (continued):

      

5.25%, 4/15/23

     USD        163      $ 158,518   

Wise Metals Group LLC/Wise Alloys Finance Corp., 8.75%, 12/15/18 (b)

       2,785        2,631,825   
      

 

 

 
                       36,447,300   

Multi-Utilities — 1.3%

  

CenterPoint Energy, Inc. (d):

      

5.95%, 2/01/17

       9,000        9,469,665   

6.50%, 5/01/18

       9,675        10,694,581   
      

 

 

 
                       20,164,246   

Multiline Retail — 0.2%

  

Dufry Finance SCA, 5.50%, 10/15/20 (b)

             3,460        3,598,400   

Offshore Drilling & Other Services — 0.1%

  

Sensata Technologies BV (b):

      

5.63%, 11/01/24

       695        707,163   

5.00%, 10/01/25

       1,418        1,384,322   
      

 

 

 
                       2,091,485   

Oil, Gas & Consumable Fuels — 14.1%

  

Access Midstream Partners LP/ACMP Finance Corp.:

      

6.13%, 7/15/22

       1,668        1,707,410   

4.88%, 5/15/23

       343        309,591   

Anadarko Petroleum Corp., 6.38%, 9/15/17

       75        80,758   

Antero Resources Finance Corp., 5.38%, 11/01/21

       378        347,760   

Bonanza Creek Energy, Inc.:

      

6.75%, 4/15/21

       778        560,160   

5.75%, 2/01/23

       1,245        834,150   

California Resources Corp.:

      

5.00%, 1/15/20

       495        360,112   

5.50%, 9/15/21

       1,894        1,302,125   

6.00%, 11/15/24

       5,517        3,751,560   

Chesapeake Energy Corp., 6.88%, 11/15/20

       493        334,007   

Concho Resources, Inc.:

      

5.50%, 10/01/22

       166        166,623   

5.50%, 4/01/23

       1,079        1,084,395   

CONSOL Energy, Inc., 5.88%, 4/15/22

       5,691        3,599,557   

Continental Resources, Inc.:

      

5.00%, 9/15/22

       7,000        6,291,250   

4.50%, 4/15/23

       469        414,369   

Denbury Resources, Inc., 5.50%, 5/01/22

       604        422,800   

El Paso LLC:

      

7.80%, 8/01/31

       197        199,593   

7.75%, 1/15/32

       4,586        4,641,596   

El Paso Natural Gas Co. LLC, 8.63%, 1/15/22

       2,345        2,781,993   

El Paso Pipeline Partners Operating Co. LLC, 6.50%, 4/01/20

       5,075        5,519,164   

Enbridge Energy Partners LP, 9.88%, 3/01/19 (d)

       6,000        7,123,584   

Energy Transfer Equity LP:

      

7.50%, 10/15/20

       1,028        1,105,306   

5.88%, 1/15/24

       2,788        2,700,945   

Energy Transfer Partners LP, 6.13%, 12/15/45

       3,579        3,212,346   

Enterprise Products Operating LLC:

      

4.90%, 5/15/46

       5,375        4,926,429   

Series N, 6.50%, 1/31/19 (d)

       12,000        13,413,072   

EP Energy LLC/Everest Acquisition Finance, Inc., 9.38%, 5/01/20

       3,290        2,862,300   

Hilcorp Energy I LP/Hilcorp Finance Co., 5.00%, 12/01/24 (b)

       3,666        3,317,730   

Kinder Morgan Energy Partners LP:

      

6.85%, 2/15/20 (d)

       12,000        13,102,728   

4.25%, 9/01/24

       2,170        1,937,784   

5.40%, 9/01/44

       3,615        2,970,041   
Corporate Bonds   

Par  

(000)

    Value  

Oil, Gas & Consumable Fuels (continued)

  

Laredo Petroleum, Inc., 7.38%, 5/01/22

     USD        231      $ 228,113   

Linn Energy LLC/Linn Energy Finance Corp., 6.25%, 11/01/19

       597        140,295   

Marathon Petroleum Corp., 3.50%, 3/01/16 (d)

       4,600        4,638,654   

MarkWest Energy Partners LP/MarkWest Energy Finance Corp., 4.88%, 6/01/25

       1,144        1,069,640   

MEG Energy Corp. (b):

      

6.50%, 3/15/21

       3,839        3,368,722   

7.00%, 3/31/24

       3,533        3,056,045   

Midcontinent Express Pipeline LLC, 6.70%, 9/15/19 (b)

       3,500        3,395,000   

Nexen, Inc., 6.40%, 5/15/37 (d)

       4,615        5,390,020   

NGPL PipeCo LLC, 9.63%, 6/01/19 (b)

       902        845,625   

Noble Energy, Inc., 5.63%, 5/01/21

       3,448        3,496,238   

Oasis Petroleum, Inc.:

      

7.25%, 2/01/19 (d)

       915        873,825   

6.50%, 11/01/21

       1,025        873,812   

ONEOK Partners LP, 8.63%, 3/01/19 (d)

       10,000        11,486,090   

Paramount Resources Ltd., 6.88%, 6/30/23 (b)

       600        528,000   

PDC Energy, Inc., 7.75%, 10/15/22

       1,225        1,231,125   

Peabody Energy Corp., 6.00%, 11/15/18

       2,120        371,000   

Petrobras International Finance Co. SA, 3.88%, 1/27/16

       12,550        12,518,625   

Petroleos Mexicanos (d):

      

3.50%, 1/30/23

       5,000        4,642,500   

4.88%, 1/18/24

       2,000        1,998,400   

Petroleum Geo-Services ASA, 7.38%, 12/15/18 (b)

       3,980        3,228,775   

Pioneer Natural Resources Co., 6.88%, 5/01/18

       1,665        1,811,863   

Plains All American Pipeline LP/PAA Finance Corp.:

      

4.70%, 6/15/44

       1,498        1,290,173   

4.90%, 2/15/45

       2,102        1,867,261   

Range Resources Corp.:

      

5.00%, 8/15/22

       32        28,478   

5.00%, 3/15/23

       75        66,563   

Regency Energy Partners LP/Regency Energy Finance Corp., 4.50%, 11/01/23

       4,351        3,993,396   

Rockies Express Pipeline LLC, 6.88%, 4/15/40 (b)

       580        551,000   

RSP Permian, Inc., 6.63%, 10/01/22

       789        781,110   

Ruby Pipeline LLC, 6.00%, 4/01/22 (b)

       10,000        10,477,310   

Sabine Pass Liquefaction LLC:

      

5.63%, 4/15/23

       7,393        7,194,313   

5.75%, 5/15/24

       2,869        2,768,585   

Sabine Pass LNG LP, 7.50%, 11/30/16

       5,965        6,155,134   

Sanchez Energy Corp., Series WI, 6.13%, 1/15/23

       1,141        827,225   

SandRidge Energy, Inc.:

      

8.13%, 10/16/22

       114        29,925   

7.50%, 2/16/23

       622        157,444   

Seventy Seven Energy, Inc., 6.50%, 7/15/22

       469        141,873   

SM Energy Co., 6.50%, 1/01/23

       322        317,298   

Summit Midstream Holdings LLC/Summit Midstream Finance Corp., 7.50%, 7/01/21

       1,614        1,565,580   

Tesoro Logistics LP/Tesoro Logistics Finance Corp., 6.25%, 10/15/22 (b)

       1,519        1,579,760   

Western Gas Partners LP, 5.38%, 6/01/21 (d)

       5,125        5,430,640   

Whiting Petroleum Corp.:

      

5.00%, 3/15/19

       1,672        1,588,400   

5.75%, 3/15/21

       1,171        1,087,566   

Williams Cos., Inc.:

      

3.70%, 1/15/23

       5,283        4,312,196   

4.55%, 6/24/24

       1,813        1,517,370   

8.75%, 3/15/32

       2,478        2,431,136   

5.75%, 6/24/44

       685        501,336   
 

 

See Notes to Financial Statements.

 

                
16    ANNUAL REPORT    OCTOBER 31, 2015   


Schedule of Investments (continued)

  

BlackRock Credit Allocation Income Trust (BTZ)

 

Corporate Bonds   

Par  

(000)

    Value  

Oil, Gas & Consumable Fuels (continued)

  

Williams Partners LP, 5.10%, 9/15/45 (d)

     USD        5,075      $ 3,904,964   

WPX Energy, Inc., 5.25%, 9/15/24

       856        710,480   
      

 

 

 
                       217,850,121   

Paper & Forest Products — 2.1%

  

 

Clearwater Paper Corp., 4.50%, 2/01/23

       532        508,060   

International Paper Co.:

      

7.50%, 8/15/21 (d)

       9,675        11,702,686   

8.70%, 6/15/38

       4,000        5,464,100   

7.30%, 11/15/39 (d)

       10,000        12,036,190   

Louisiana-Pacific Corp., 7.50%, 6/01/20

       2,130        2,236,500   
      

 

 

 
                       31,947,536   

Pharmaceuticals — 3.7%

  

 

AbbVie, Inc. (d):

      

2.90%, 11/06/22

       5,675        5,491,800   

4.70%, 5/14/45

       3,255        3,115,790   

Actavis Funding SCS:

      

3.45%, 3/15/22

       4,610        4,580,247   

3.85%, 6/15/24

       6,000        5,970,540   

3.80%, 3/15/25

       1,650        1,635,048   

4.75%, 3/15/45

       1,450        1,386,652   

Endo Finance LLC/Endo Finco, Inc. (b):

      

7.25%, 12/15/20

       241        249,134   

7.75%, 1/15/22

       499        517,713   

6.00%, 7/15/23

       1,514        1,514,000   

6.00%, 2/01/25

       1,601        1,588,992   

Forest Laboratories, Inc. (b):

      

4.38%, 2/01/19

       2,924        3,076,238   

5.00%, 12/15/21

       1,631        1,762,716   

Grifols Worldwide Operations Ltd., 5.25%, 4/01/22

       1,613        1,669,455   

Merck & Co., Inc., 6.50%, 12/01/33 (d)

       6,420        8,479,453   

Valeant Pharmaceuticals International (b):

      

6.75%, 8/15/18

       6,955        6,712,270   

5.38%, 3/15/20

       1,668        1,451,160   

7.00%, 10/01/20

       382        353,350   

6.38%, 10/15/20

       3,180        2,846,100   

7.50%, 7/15/21

       273        249,113   

5.63%, 12/01/21

       1,737        1,506,847   

5.50%, 3/01/23

       979        822,360   

5.88%, 5/15/23

       2,513        2,115,632   

6.13%, 4/15/25

       476        400,435   
      

 

 

 
                       57,495,045   

Professional Services — 0.5%

  

 

Ceridian HCM Holding, Inc., 11.00%, 3/15/21 (b)

       1,755        1,544,400   

Dun & Bradstreet Corp., 3.25%, 12/01/17

       5,750        5,859,256   
      

 

 

 
                       7,403,656   

Real Estate Investment Trusts (REITs) — 2.8%

  

 

AvalonBay Communities, Inc., 6.10%, 3/15/20 (d)

       10,000        11,409,510   

DDR Corp.:

      

4.75%, 4/15/18

       2,140        2,257,019   

7.88%, 9/01/20

       2,650        3,212,219   

ERP Operating LP, 5.75%, 6/15/17 (d)

       10,000        10,661,230   

Felcor Lodging LP, 5.63%, 3/01/23

       999        1,033,965   

HCP, Inc., 5.38%, 2/01/21 (d)

       3,450        3,799,030   

Host Hotels & Resorts LP, Series D, 3.75%, 10/15/23 (d)

       3,600        3,479,404   

iStar Financial, Inc.:

      

4.00%, 11/01/17

       825        806,437   

5.00%, 7/01/19

       580        567,675   

UDR, Inc., 4.25%, 6/01/18 (d)

       5,225        5,501,779   
      

 

 

 
                       42,728,268   
Corporate Bonds   

Par  

(000)

    Value  

Real Estate Management & Development — 0.8%

  

 

Lennar Corp.:

      

4.75%, 11/15/22

     USD        1,805      $ 1,805,000   

4.88%, 12/15/23

       816        812,940   

Northwest Florida Timber Finance LLC, 4.75%, 3/04/29 (b)(d)

       4,485        3,937,130   

Realogy Corp., 7.63%, 1/15/20 (b)(d)

       5,090        5,351,066   

Realogy Group LLC / Realogy Co-Issuer Corp. (b):

      

4.50%, 4/15/19

       803        827,090   

5.25%, 12/01/21 (d)

       344        356,900   
      

 

 

 
                       13,090,126   

Road & Rail — 1.1%

  

 

Hertz Corp.:

      

4.25%, 4/01/18

       983        995,287   

6.75%, 4/15/19

       1,167        1,197,634   

5.88%, 10/15/20

       925        957,375   

7.38%, 1/15/21

       310        322,592   

Norfolk Southern Corp., 6.00%, 3/15/05 (d)

       12,700        13,834,085   
      

 

 

 
                       17,306,973   

Semiconductors & Semiconductor Equipment — 0.3%

  

 

Micron Technology, Inc., 5.25%, 1/15/24 (b)

       1,115        1,067,613   

NXP BV/NXP Funding LLC (b):

      

4.13%, 6/15/20

       1,154        1,177,080   

5.75%, 2/15/21

       1,655        1,729,475   

4.63%, 6/15/22

       490        499,800   
      

 

 

 
                       4,473,968   

Software — 0.5%

  

 

Infor US, Inc., 6.50%, 5/15/22 (b)

       2,425        2,297,688   

Italics Merger Sub, Inc., 7.13%, 7/15/23 (b)

       557        552,538   

Nuance Communications, Inc., 5.38%, 8/15/20 (b)

       4,435        4,523,700   
      

 

 

 
                       7,373,926   

Specialty Retail — 1.3%

  

 

AutoNation, Inc., 6.75%, 4/15/18

       6,125        6,783,143   

L Brands, Inc.:

      

7.00%, 5/01/20

       3,050        3,494,171   

6.88%, 11/01/35 (b)

       1,514        1,572,668   

Penske Automotive Group, Inc., 5.38%, 12/01/24

       2,750        2,791,250   

VF Corp., 5.95%, 11/01/17 (d)

       5,000        5,448,850   
      

 

 

 
                       20,090,082   

Textiles Apparel & Shoes — 0.1%

  

 

Springs Industries, Inc., 6.25%, 6/01/21

             1,674        1,665,630   

Textiles, Apparel & Luxury Goods — 0.1%

  

 

Levi Strauss & Co., 5.00%, 5/01/25

       699        707,738   

William Carter Co., 5.25%, 8/15/21

       1,406        1,460,482   
      

 

 

 
                       2,168,220   

Thrifts & Mortgage Finance — 0.1%

  

 

Radian Group, Inc., 5.25%, 6/15/20

             1,475        1,473,156   

Tobacco — 2.3%

  

 

Altria Group, Inc., 10.20%, 2/06/39 (d)

       13,392        22,137,873   

Reynolds American, Inc.:

      

3.50%, 8/04/16 (b)

       8,375        8,506,245   

3.25%, 11/01/22

       970        965,106   

4.85%, 9/15/23

       1,120        1,212,051   

5.85%, 8/15/45

       2,335        2,590,288   
      

 

 

 
                       35,411,563   

Trading Companies & Distributors — 0.4%

  

 

Doric Nimrod Air Alpha Pass-Through Trust, Series 2013-1 (b):

      

Class A, 5.25%, 5/30/25

       2,604        2,708,507   
 

 

See Notes to Financial Statements.

 

                
   ANNUAL REPORT    OCTOBER 31, 2015    17


Schedule of Investments (continued)

  

BlackRock Credit Allocation Income Trust (BTZ)

 

Corporate Bonds   

Par  

(000)

    Value  

Trading Companies & Distributors (continued)

  

 

Doric Nimrod Air Alpha Pass-Through Trust, Series 2013-1 (b) (continued):

      

Class B, 6.13%, 11/30/21

     USD        3,116      $ 3,217,266   
      

 

 

 
                       5,925,773   

Transportation Infrastructure — 1.0%

  

 

CEVA Group PLC (b):

      

4.00%, 5/01/18

       3,310        2,945,900   

7.00%, 3/01/21

       1,067        964,301   

Penske Truck Leasing Co. LP/PTL Finance Corp., 4.88%, 7/11/22 (b)

       10,500        11,029,820   
      

 

 

 
                       14,940,021   

Wireless Telecommunication Services — 5.6%

  

 

America Movil SAB de CV (d):

      

2.38%, 9/08/16

       12,495        12,605,781   

3.13%, 7/16/22

       1,275        1,261,679   

American Tower Corp.:

      

4.50%, 1/15/18

       6,500        6,823,908   

5.05%, 9/01/20

       500        543,525   

5.90%, 11/01/21 (d)

       3,770        4,187,614   

4.00%, 6/01/25

       4,225        4,175,229   

Crown Castle International Corp., 5.25%, 1/15/23

       1,380        1,485,225   

Crown Castle Towers LLC (b):

      

5.50%, 1/15/37

       4,000        4,103,650   

4.17%, 8/15/37

       3,000        3,068,622   

6.11%, 1/15/40

       4,555        5,030,380   

Digicel Group Ltd., 7.13%, 4/01/22 (b)

       370        305,250   

Digicel Ltd., 6.00%, 4/15/21 (b)

       1,285        1,156,500   

SBA Communications Corp., 4.88%, 7/15/22

       1,445        1,477,440   

SBA Tower Trust, 5.10%, 4/15/42 (b)

       13,975        14,268,943   

Sprint Communications, Inc. (b):

      

9.00%, 11/15/18

       5,290        5,815,667   

7.00%, 3/01/20

       9,302        9,767,100   

Sprint Corp.:

      

7.88%, 9/15/23

       2,715        2,511,375   

7.13%, 6/15/24

       1,755        1,541,109   

T-Mobile USA, Inc.:

      

6.63%, 4/28/21

       2,680        2,773,800   

6.73%, 4/28/22

       2,495        2,576,088   

6.84%, 4/28/23

       645        665,963   
      

 

 

 
                       86,144,848   
Total Corporate Bonds — 107.5%        1,665,253,945   
      
                          
Foreign Agency Obligations                      

Brazilian Government International Bond, 5.00%, 1/27/45

       5,000