--------------------------------------------------------------------------------
THE BLACKROCK INVESTMENT QUALITY MUNICIPAL TRUST INC.
SEMI-ANNUAL REPORT TO SHAREHOLDERS
REPORT OF INVESTMENT ADVISOR
--------------------------------------------------------------------------------
May 31, 2001
Dear Shareholder:
The semi-annual period was marked by the Federal Reserve's aggressive
response to the dramatic U.S. led global economic slowdown. Economic weakness
intensified as Gross Domestic Product ("GDP") growth slowed to a pace of 2% from
3% over the six-month period. The U.S. slowdown was primarily driven by a near
collapse in corporate spending and expansion as profits declined, as well as a
significant reduction of inventories. In the first quarter of 2001, the U.S.
Treasury yield curve steepening of 100 basis points between 2-year and 30-year
Treasuries dominated performance in the fixed income market as the Fed eased the
discount rate 150 basis points over the quarter and then an additional 50 basis
points in April 2001 to 4.50%.
Despite the aggressive Fed easing of interest rates due to concerns that
economic activity may continue to be "unacceptably weak," all high quality
spread sectors outperformed Treasuries over the period.
Since March 2000, there has been an equity market decline of approximately
20%. With no immediate stimulus, this decline will place significant reliance on
monetary policy. Looking forward, we believe the revival of profit growth and
continued robust spending rates by consumers in the face of a negative savings
rate may require a Fed funds rate of 3.5% to 4.0%. A Fed that can move
aggressively as inflationary expectations move down should continue to foster
increased risk tolerances in the market. While the direct beneficiaries of
declining inflation and Treasury surpluses should be short and intermediate
Treasuries, the longer-term beneficiary should be the long-end of the Treasury
market, particularly 15-year to 20-year Treasuries. We believe investors will
more readily embrace high quality spread assets as substitutes for intermediate
Treasuries in the future. We also believe that the GDP growth rate will remain
far below the 5.0% of 2000, as consumers spend less and save more.
This semi-annual report contains a summary of market conditions during the
semi-annual period and a review of portfolio strategy by your Trust's managers
in addition to the Trust's unaudited financial statements and a detailed list of
the portfolio's holdings. Continued thanks for your confidence in BlackRock. We
appreciate the opportunity to help you achieve your long-term investment goals.
Sincerely,
/s/ LAURENCE D. FINK /s/ RALPH L. SCHLOSSTEIN
-------------------- ------------------------
Laurence D. Fink Ralph L. Schlosstein
Chairman President
1
May 31, 2001
Dear Shareholder:
We are pleased to present the unaudited semi-annual report for The
BlackRock Investment Quality Municipal Trust Inc. ("the Trust") for the six
months ended April 30, 2001. We would like to take this opportunity to review
the Trust's stock price and net asset value (NAV) performance, summarize
developments in the fixed income markets and discuss recent portfolio management
activity.
The Trust is a diversified, actively managed closed-end bond fund whose
shares are traded on the New York Stock Exchange under the symbol "BKN." The
Trust's investment objective is to provide high current income that is exempt
from regular Federal income tax consistent with the preservation of capital. The
Trust seeks to achieve this objective by investing in investment grade (rated
"AAA" to "BBB" by a major rating agency or of equivalent quality) tax-exempt
general obligation and revenue bonds issued by city, county and state
municipalities throughout the United States.
The table below summarizes the changes in the Trust's stock price and nav
over the past six months:
---------------------------------------------------------------------
4/30/01 10/31/00 CHANGE HIGH LOW
------------------------------------------------------------------------------------------------------
STOCK PRICE $13.38 $12.125 10.35% $13.875 $11.8125
------------------------------------------------------------------------------------------------------
NET ASSET VALUE (NAV) $14.58 $14.30 1.96% $14.97 $14.24
------------------------------------------------------------------------------------------------------
THE FIXED INCOME MARKETS
Investor hopes for a soft landing quickly turned to fears of a recession as
the U.S. economy rapidly deteriorated over the first part of the period. This
economic weakness intensified in the beginning of 2001 as GDP growth slowed over
the six-month period to 2% from 3%. Increasing pressure on corporate profits
restrained investment spending, subsequently reducing the demand for capital
goods and output. Despite eroding consumer confidence, slower economic growth,
mounting layoffs, and the reduction of over $5 trillion of wealth from the
decline of the equity markets from their early year 2000 highs, the consumer
remains relatively resilient. According to the minutes of the April 18, 2001
Federal Open Market Committee meeting, "Capital investment has continued to
soften and the persistent erosion in current and expected profitability, in
combination with rising uncertainty about the business outlook, seems poised to
dampen capital spending going forward. This potential restraint, together with
the possible effects of earlier reductions in equity wealth on consumption and
the risk of slower growth abroad, threatens to keep the pace of economic
activity unacceptably weak." Over the period, the Federal Reserve aggressively
lowered the discount rate by a total of 2.00% to bring the current discount rate
to 4.50%. Additionally, at the May meeting, the Fed cut rates by 50 basis points
for the fifth time this year.
U.S. Treasury yields began to regain their characteristic slopes in the
beginning of the period after nearly a year of inversion caused by $30 billion
of Treasury buybacks and multiple Federal Reserve tightenings. The 2-year
Treasury note rallied in response to a slumping economy and a volatile equity
market. The markets have been further supported by Fed actions, which cut rates
by 50 basis points on four occasions over the period. The yield curve at the end
of the period reflected expectations of another 100 basis points of easing by
September. As of April 30, 2001, the 10-year Treasury was yielding 5.34% versus
5.75% on October 31, 2000.
On a tax-adjusted basis, municipal bonds outperformed the taxable domestic
bond market for the semi-annual period ending April 30, 2001, returning 7.27%
(as measured by the LEHMAN MUNICIPAL INDEX at a tax bracket of 39.6%) versus the
LEHMAN AGGREGATE INDEX'S 6.22%. Throughout this period, municipals performed in
line with spread products and Treasuries. Municipals benefited from retail's
continued efforts to diversify out of equities and into fixed income
investments. In a dramatic reversal from most of 2000, the semi-annual period
finally saw municipal mutual fund portfolios experience positive cash flows. The
retail market took a renewed interest in municipals driven primarily by the
turmoil experienced in equities, while institutional demand for municipal
securities increased as investors looked for attractive after tax yields vs.
Treasuries without the inherent credit risk associated with corporate bonds. As
a result of falling interest rates during the second half of the period, new
issue supply rose substantially above last year's pace.
2
THE TRUST'S PORTFOLIO AND INVESTMENT STRATEGY
The Trust's portfolio is actively managed to diversify exposure to various
sectors, issuers, revenue sources and security types. BlackRock's investment
strategy emphasizes a relative value approach, which allows the Trust to
capitalize upon changing market conditions by rotating municipal sectors,
credits and coupons.
Additionally, the Trust employs leverage to enhance its income by borrowing
at short-term municipal rates and investing the proceeds in longer maturity
issues that have higher yields. The degree to which the Trust can benefit from
its use of leverage may affect its ability to pay high monthly income. At the
end of the period, the Trust's leverage amount was 37% of total assets.
Municipals outperformed most spread products on a tax-adjusted basis during
the period, except on the short-end of the yield curve. The curve steepened over
the period and the 20-year to 25-year part of the curve remains very steep on a
historical basis. We remain overweight in premium coupon securities in an effort
to avoid market discount problems. Premium coupon securities offer better price
performance during periods of falling interest rates, and similar performance to
discounts when interest rates rise. Retail demand improved at the end of the
period, primarily for bonds 15-years or longer.
The following charts compare the Trust's current and October 31, 2000 asset
composition and credit quality allocations:
----------------------------------------------------------------------
SECTOR BREAKDOWN
----------------------------------------------------------------------
SECTOR APRIL 30, 2001 OCTOBER 31, 2000
----------------------------------------------------------------------
Transportation 18% 20%
----------------------------------------------------------------------
Industrial & Pollution Control 13% 11%
----------------------------------------------------------------------
University/School 13% 13%
----------------------------------------------------------------------
Hospital 12% 12%
----------------------------------------------------------------------
City, County & State 11% 11%
----------------------------------------------------------------------
Housing 9% 9%
----------------------------------------------------------------------
Power 7% 8%
----------------------------------------------------------------------
Lease Revenue 5% 5%
----------------------------------------------------------------------
Tax Revenue 4% 4%
----------------------------------------------------------------------
Other 3% 3%
----------------------------------------------------------------------
Special District 2% 2%
----------------------------------------------------------------------
Water & Sewer 2% 1%
----------------------------------------------------------------------
Resource Recovery 1% 1%
----------------------------------------------------------------------
----------------------------------------------------------------------
CREDIT RATING* APRIL 30, 2001 OCTOBER 31, 2000
----------------------------------------------------------------------
AAA/Aaa 61% 58%
----------------------------------------------------------------------
AA/Aa 12% 11%
----------------------------------------------------------------------
A/A 16% 19%
----------------------------------------------------------------------
BBB/Baa 6% 9%
----------------------------------------------------------------------
BB/Ba 1% --
----------------------------------------------------------------------
Not Rated 4% 3%
----------------------------------------------------------------------
----------------------
* Using the higher of Standard & Poor's, Moody's or Fitch's rating.
3
We look forward to continuing to manage the Trust to benefit from the
opportunities available to investors in the investment grade municipal market.
We thank you for your investment and continued interest in The BlackRock
Investment Quality Municipal Trust Inc. Please feel free to call our marketing
center at (800) 227-7BFM (7236) if you have any specific questions which were
not addressed in this report.
Sincerely,
/s/ ROBERT S. KAPITO /s/ KEVIN M. KLINGERT
-------------------- ---------------------
Robert S. Kapito Kevin M. Klingert
Vice Chairman and Portfolio Manager Managing Director and Portfolio Manager
--------------------------------------------------------------------------------
THE BLACKROCK INVESTMENT QUALITY MUNICIPAL TRUST INC.
--------------------------------------------------------------------------------
Symbol on New York Stock Exchange: BKN
--------------------------------------------------------------------------------
Initial Offering Date: February 19, 1993
--------------------------------------------------------------------------------
Closing Stock Price as of 4/30/01: $13.38
Net Asset Value as of 4/30/01: $14.58
Yield on Closing Stock Price as of 4/30/01 ($13.38)(1): 5.83%
--------------------------------------------------------------------------------
Current Monthly Distribution per Share(2): $ 0.065
--------------------------------------------------------------------------------
Current Annualized Distribution per Share(2): $ 0.780
--------------------------------------------------------------------------------
----------------
(1) Yield on Closing Stock Price is calculated by dividing the current
annualized distribution per share by the closing stock price per share.
(2) Distribution is not constant and is subject to change.
PRIVACY PRINCIPLES OF THE TRUST
The Trust is committed to maintaining the privacy of shareholders and to
safeguarding its non-public personal information. The following information is
provided to help you understand what personal information the Trust collects,
how we protect that information and why, in certain cases, we may share
information with select other parties.
Generally, the Trust does not receive any non-public personal information
relating to its shareholders, although certain nonpublic personal information of
its shareholders may become available to the Trust. The Trust does not disclose
any non-public personal information about its shareholders or former
shareholders to anyone, except as permitted by law or as is necessary in order
to service shareholder accounts (for example, to a transfer agent or third party
administrator).
The Trust restricts access to non-public personal information about the
shareholders to BlackRock employees with a legitimate business need for the
information. The Trust maintains physical, electronic and procedural safeguards
designed to protect the non-public personal information of its shareholders.
4
--------------------------------------------------------------------------------
THE BLACKROCK INVESTMENT QUALITY MUNICIPAL TRUST INC.
PORTFOLIO OF INVESTMENTS APRIL 30, 2001 (UNAUDITED)
--------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
PRINCIPAL
AMOUNT OPTION CALL VALUE
RATING* (000) DESCRIPTION PROVISIONS+ (NOTE 1)
----------------------------------------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS--157.4%
ALABAMA--6.0%
AAA $14,000 University of Alabama Hosp. Rev., Ser. A, 5.875%, 9/01/31, MBIA .... 9/10 @ 101 $ 14,491,260
------------
ALASKA--5.0%
AAA 12,000 Alaska St. Hsg. Fin. Corp. Rev., Ser. A, 5.875%, 12/01/24, MBIA .... 12/05 @ 102 12,185,400
------------
CALIFORNIA--13.2%
Aa2 1,220 California Hsg. Fin. Agcy. Rev., Home Mtg., Ser. C, 5.65%, 8/01/14 . 2/04 @ 102 1,254,062
Aa2 5,770 California St. G.O., 5.625%, 5/01/18 ............................... 5/10 @ 101 5,875,418
AAA 15,460 Los Angeles Cnty. Asset Leasing Corp. Rev., 5.95%, 12/01/07, AMBAC No Opt. Call 17,074,488
University of California Rev., Research Fac., Ser. B,
Aaa 2,000++ 6.10%, 9/01/03 .................................................... N/A 2,160,040
Aaa 3,305++ 6.20%, 9/01/03 .................................................... N/A 3,576,803
Aaa 2,000++ 6.25%, 9/01/03 .................................................... N/A 2,166,700
------------
32,107,511
------------
COLORADO--11.4%
AAA 3,100 Arapahoe Cnty. Cap. Impvt. Hwy. Rev., Trust Fund, Ser. E,
Zero Coupon, 8/31/04 .............................................. ETM 2,726,078
Denver City & Cnty. Arpt. Rev.,
A 3,000 Ser. C, 6.50%, 11/15/06 ........................................... 11/02 @ 102 3,152,610
A 1,120 Ser. C, 6.65%, 11/15/05 ........................................... 11/02 @ 102 1,181,163
Aaa 3,705++ Ser. D, 7.00%, 11/15/01 ........................................... N/A 3,777,211
A 14,085 Ser. D, 7.00%, 11/15/25 ........................................... 11/01 @ 100 14,248,104
AAA 2,250++ E-470 Pub. Hwy. Auth. Rev., Ser. B, 6.90%, 8/31/05 ................. N/A 2,582,145
------------
27,667,311
------------
CONNECTICUT--1.1%
Baa3 3,000 Mashantucket Western Pequot Tribe, Spl. Rev., Ser. A,
5.50%, 9/01/28** .................................................. 9/09 @ 101 2,765,490
------------
DELAWARE--3.0%
NR 7,000 Charter Mac Equity Issuer Trust, Ser. B, 7.60%, 11/30/10** .........No Opt. Call 7,343,630
------------
DISTRICT OF COLUMBIA--0.8%
District of Columbia G.O., Ser. E, CAPMAC, ........................
AAA 70++ 6.00%, 6/01/03 .................................................... N/A 74,734
AAA 1,830 6.00%, 6/01/09 .................................................... 6/03 @ 102 1,916,797
------------
1,991,531
------------
FLORIDA--3.4%
AAA 1,680 Florida Hsg. Fin. Agcy. Rev., Sngl. Fam. Mtg., Ser. 1994-A, .......
6.55%, 7/01/14, GNMA .............................................. 1/05 @ 102 1,766,873
NR 5,000 Hillsborough Cnty. Ind. Dev. Auth. Fac. Rev., National Gypsum,
Ser. A, 7.125%, 4/01/30 ........................................... 4/10 @ 101 2,987,400
BB+ 4,000 Santa Rosa Bay Bridge Auth. Rev., 6.25%, 7/01/28 ................... 7/06 @ 102 3,487,760
------------
8,242,033
------------
See Notes to Financial Statements.
5
----------------------------------------------------------------------------------------------------------------------
PRINCIPAL
AMOUNT OPTION CALL VALUE
RATING* (000) DESCRIPTION PROVISIONS+ (NOTE 1)
----------------------------------------------------------------------------------------------------------------------
HAWAII--1.1%
AAA $ 2,500 Hawaii St. Dept. Budget & Fin. Spl. Purp. Rev., Hawaiian Elec. Co.
Inc., Ser. D, 6.15%, 1/01/20, AMBAC ............................... 1/09 @ 101 $ 2,662,400
------------
ILLINOIS--12.6%
AAA 10,000 Chicago Brd. of Edl., Chicago Sch. Reform, 5.75%, 12/01/27, AMBAC ..12/07 @ 102 10,294,000
AAA 5,000 Chicago Pub. Bldg. Rev., Ser. A, 7.00%, 1/01/20, MBIA .............. ETM 6,006,150
AAA 5,050 Chicago Wtr. Rev., 5.25%, 11/01/23, FGIC ...........................11/07 @ 102 4,900,873
Illinois Edl. Fac. Auth. Rev., Loyola Univ., FGIC,
AAA 4,000++ 5.45%, 7/01/05 .................................................... N/A 4,177,520
AAA 5,000++ 5.70%, 7/01/05 .................................................... N/A 5,253,000
------------
30,631,543
------------
INDIANA--3.3%
BBB 7,595 Indianapolis Arpt. Auth. Rev., Spl. Fac. Fed. Express Corp. Proj.,
7.10%, 1/15/17 .................................................... 7/04 @ 102 8,023,434
------------
KENTUCKY--8.4%
AAA 16,465 Kentucky Econ. Dev. Fin. Sys., Norton Hlth. Care Inc., Ser. B,
Zero Coupon, 10/01/23, MBIA .......................................No Opt. Call 4,511,410
AAA 15,000++ Kentucky St. Tpke. Auth., Econ. Dev. Road Rev., 5.75%, 7/01/03,
AMBAC ............................................................. N/A 15,974,100
------------
20,485,510
------------
LOUISIANA--8.3%
AAA 14,400++ Louisiana Pub. Fac. Auth. Hosp. Rev., Our Lady of the Lake Regl.
Med. Ctr., 5.90%, 12/01/03, FSA ................................... N/A 15,489,216
AAA 4,640 New Orleans Pub. Impt. G.O., 5.875%, 11/01/29, FSA .................11/09 @ 100 4,843,835
------------
20,333,051
------------
MARYLAND--6.9%
Aa2 8,920 Maryland St. Dept. Hsg. & Cmnty. Dev. Admin., Sngl. Fam. Prog.,
Ser. 2, 6.55%, 4/01/26 ............................................4/05 @ 102 9,241,209
NR 4,000 MuniMae Te Bond Subsidiary LLC, Ser. B, , 7.75%, 11/01/10** ........No Opt. Call 4,208,360
AAA 3,175 Northeast Waste Disp. Auth. Rev., Sld. Wst., Montgomery Cnty.
Res. Rec. Proj., Ser. A, 6.30%, 7/01/16, MBIA ..................... 7/03 @ 102 3,322,701
------------
16,772,270
------------
MASSACHUSETTS--1.2%
AAA 3,000 Massachusetts St. Hlth. & Edl. Fac. Auth. Rev., Hallmark Hlth.
Sys., Ser. A, 5.00%, 7/01/21, FSA .................................7/08 @ 101 2,814,630
------------
MICHIGAN--0.8%
AAA 2,000 River Rouge Sch. Dist., 5.625%, 5/01/22, FSA .......................5/03 @ 101.5 2,045,280
------------
MISSOURI--1.6%
LAKE OF THE OZARKS CMNTY. BRDG. CORP., BRDG. SYS. REV.,
BBB- 2,000 5.25%, 12/01/14 ...................................................12/08 @ 102 1,830,800
BBB- 2,500 5.25%, 12/01/26 ...................................................12/08 @ 102 2,162,225
------------
3,993,025
------------
NEVADA--1.6%
AAA 3,750 Washoe Cnty. Arpt. Auth., Arpt. Sys. Impvt. Rev.,
Ser. B, 5.80%, 7/01/09, MBIA ...................................... 7/03 @ 102 3,927,488
------------
See Notes to Financial Statements.
6
------------------------------------------------------------------------------------------------------------------------
PRINCIPAL
AMOUNT OPTION CALL VALUE
RATING* (000) DESCRIPTION PROVISIONS+ (NOTE 1)
------------------------------------------------------------------------------------------------------------------------
NEW JERSEY--3.9%
AAA $ 2,000 Delaware River Port Auth. PA & NJ Port Dist. Proj., Ser. B,
5.70%, 1/01/22, FSA ............................................... 1/10 @ 100 $ 2,055,120
AA 7,000 New Jersey St. Transp. Trust Fund Auth. Rev., Transp. Sys., Ser. A,
6.00%, 6/15/19 .................................................... 6/10 @ 100 7,498,330
------------
9,553,450
------------
NEW MEXICO--0.8%
AAA 1,945 Farmington P.C.R., So. CA. Edison Co., Ser. A, 5.875%, 6/01/23,
MBIA .............................................................. 6/03 @ 102 1,980,146
------------
NEW YORK--17.8%
New York City G.O.,
A+ 4,140 Ser. A, 6.00%, 8/01/05 ............................................ No Opt. Call 4,464,866
A+ 7,000 Ser. E, 6.50%, 2/15/06 ............................................ No Opt. Call 7,720,090
Aaa 7,000++ Ser. H, 7.20%, 2/01/02 ............................................ N/A 7,319,760
New York City Ind. Dev. Agcy. Spec. Fac. Rev., Term.
One Group Assoc. Proj.,
A- 4,000 6.00%, 1/01/08 .................................................... 1/04 @ 102 4,206,240
A- 1,000 6.00%, 1/01/15 .................................................... 1/04 @ 102 1,026,830
AA+ 10,000 New York City Transitional Fin. Auth. Rev., Ser. B, 6.00%, 11/15/21 . 5/10 @ 101 10,831,800
New York St. Dorm. Auth. Rev., Univ. of Rochester, MBIA,
AAA 1,865 Ser. A, Zero Coupon, 7/01/21 ...................................... 7/10 @ 101 1,135,468
AAA 2,030 Ser. A, Zero Coupon, 7/01/23 ...................................... 7/10 @ 101 1,232,859
AAA 3,000++ New York St. Dorm. Auth. Rev., St. Univ. Edl. Fac., Ser. B, 6.10%,
5/15/04 ........................................................... N/A 3,274,770
A 1,955 New York St. Hsg. Fin. Agcy., Hlth. Fac. of New York City, Ser. A,
6.375%, 11/01/04 .................................................. No Opt. Call 2,091,205
------------
43,303,888
------------
NORTH CAROLINA--2.3%
AAA 5,000 North Carolina Eastn. Mun. Pwr. Agcy. Sys. Rev., Ser. B,
7.00%, 1/01/08, CAPMAC ............................................ No Opt. Call 5,690,800
------------
OHIO--0.2%
NR 450 Cleveland Cuyahoga Cnty. Port Auth. Rev., Port Dev. Proj., 6.00%,
3/01/07 ........................................................... No Opt. Call 449,267
------------
OREGON--2.2%
BBB- 5,600 KLAMATH FALLS ELEC. REV., SR. LIEN-KLAMATH COGEN, 5.50%, 1/01/07 .. NO OPT. CALL 5,444,936
------------
PENNSYLVANIA--10.8%
AAA 10,100 Lehigh Cnty. Gen. Purpose Auth. Rev., St. Lukes Hosp. Bethlehem
Proj., 5.50%, 11/15/13, AMBAC ..................................... 11/03 @ 102 10,330,886
AAA 7,000 Montgomery Cnty. Edl. & Hlth. Care Auth., Holy Redeemer,
5.25%, 10/01/23, AMBAC ............................................ 0/07 @ 101 6,793,360
AAA 4,000 Pennsylvania Intergovernmental Coop. Auth. Spl. Tax Rev.,
Philadelphia Fdg. Prog.,
5.50%, 6/15/20, FGIC .............................................. 6/06 @ 100 4,031,960
Pennsylvania St. Higher Edl. Fac. Auth., Hlth. Svcs. Rev., Ser. A,
A 2,300 5.75%, 1/01/17 .................................................... 1/06 @ 101 2,279,967
A 2,750 5.875%, 1/01/15 ................................................... 1/06 @ 101 2,754,125
------------
26,190,298
------------
RHODE ISLAND--2.2%
AA+ 3,190 Rhode Island Hsg. & Mtg. Fin., Homeownership Oppty., Ser. 15-B,
6.75%, 10/01/17 ................................................... 4/04 @ 102 3,337,888
AAA 2,000 Rhode Island St. Hlth. & Edl. Bldg. Corp. Rev., Hosp. Fin., 5.50%,
5/15/16, MBIA ..................................................... 5/07 @ 102 2,024,660
------------
5,362,548
------------
See Notes to Financial Statements.
7
-----------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL
AMOUNT OPTION CALL VALUE
RATING* (000) DESCRIPTION PROVISIONS+ (NOTE 1)
-----------------------------------------------------------------------------------------------------------------------------------
TENNESSEE--5.4%
A $ 7,800 Maury Cnty. Ind. Dev. Brd., P.C.R., Saturn Corp. Proj., 6.50%, 9/01/24 .... 9/04 @ 102 $ 8,110,206
AAA 4,865 Memphis Shelby Cnty. Arpt. Auth. Rev., Ser. D, 6.00%, 3/01/24, AMBAC ...... 3/10 @ 101 5,090,201
------------
13,200,407
------------
TEXAS--6.6%
Dallas Cnty. Util. & Reclam. Dist., Ser. A, AMBAC,
AAA 6,085 Zero Coupon, 2/15/19 ..................................................... 2/05 @ 44.538 2,097,074
AAA 3,800 Zero Coupon, 2/15/20 ..................................................... 2/05 @ 41.799 1,235,684
BBB- 5,500 Dallas Ft. Worth Intl. Arpt. Fac. Impvt. Rev., Amer. Airlines Inc.,
6.375%, 5/01/35 .......................................................... 11/09 @ 101 5,370,365
AAA 6,000 Grapevine G.O., 5.875%, 8/15/24, FGIC ..................................... 8/10 @ 100 6,220,080
Aa1 1,000 Texas St. Wtr. Fin. Asst. G.O., 5.75%, 8/01/22 ............................ 8/10 @ 100 1,034,910
------------
15,958,113
------------
UTAH--2.5%
Intermountain Pwr. Agcy. Pwr. Supply Rev.,
AAA 2,810 5.00%, 7/01/13, AMBAC .................................................... ETM 2,811,068
AAA 1,640 5.00%, 7/01/13, AMBAC .................................................... 7/01 @ 100 1,639,967
A+ 1,145 Ser. 86-B, 5.00%, 7/01/16 ................................................ ETM 1,116,157
A+ 655 Ser. 86-B, 5.00%, 7/01/16 ................................................ 7/01 @ 100 638,501
------------
6,205,693
------------
WASHINGTON--8.8%
WASHINGTON ST. G.O.,
AA+ 4,000 Ser. A, 5.375%, 7/01/21 .................................................. 7/06 @ 100 3,995,560
AA+ 1,000 Ser. B, 6.00%, 1/01/25 ................................................... 1/10 @ 100 1,058,180
Washington St. Pub. Pwr. Supply Sys. Rev.,
AAA 13,395 Nuclear Proj. No. 1, 5.75%, 7/01/11, MBIA ................................ 7/06 @ 102 14,296,082
AAA 2,000 Nuclear Proj. No. 2, 5.55%, 7/01/10, FGIC ................................ 7/03 @ 102 2,046,580
------------
21,396,402
------------
WYOMING--4.2%
A 10,000 Sweetwater Cnty. P.C.R., Idaho Pwr. Co. Proj., Ser. A, 6.05%, 7/15/26 ..... 7/06 @ 102 10,231,700
------------
TOTAL LONG-TERM INVESTMENTS (COST $366,756,561) ........................... 383,450,445
------------
SHORT-TERM INVESTMENTS***--0.4%
CALIFORNIA--0.0%
A-1+ 25 California Statewide Cmnty. Dev. Auth. Rev., John Muir/ Mt. Diablo Hlth.,
4.20%, 5/01/01, FRDD, AMBAC .............................................. N/A 25,000
VMIG1 84 Irvine Impvt. BD. Act of 1915, Spec. Assmt. Dist. 97-17, 4.30%,
5/01/01, FRDD ............................................................ N/A 84,000
------------
109,000
------------
NEW YORK--0.4%
A-1+ 900 New York City Mun. Wtr. Fin. Auth. Rev., Ser. G, 4.25%, 5/01/01, FRDD, FGIC N/A 900,000
------------
See Notes to Financial Statements.
8
-----------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL
AMOUNT OPTION CALL VALUE
RATING* (000) DESCRIPTION PROVISIONS+ (NOTE 1)
-----------------------------------------------------------------------------------------------------------------------------------
TEXAS--0.0%
A-1+ $ 75 Harris Cnty. Hlth. Fac. Dev. Corp. Rev., 4.35%, 5/01/01, FRDD .............. N/A $ 75,000
------------
TOTAL SHORT-TERM INVESTMENTS (COST $1,084,000) ............................. 1,084,000
------------
TOTAL INVESTMENTS--157.8% (COST $367,840,561) .............................. 384,534,445
Other assets in excess of liabilities--2.3% ................................ 5,672,436
Liquidation value of preferred stock--(60.1)% .............................. (146,550,000)
------------
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS--100% ......................... $243,656,881
============
-------------
* Using the higher of Standard & Poor's, Moody's or Fitch's rating.
** Security is exempt from registration under rule 144a of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration to qualified institutional buyers.
*** For purposes of amortized cost valuation, the maturity date of these
instruments is considered to be the earlier of the next date on which the
security can be redeemed at par, or the next date on which the rate of
interest is adjusted.
+ Option call provisions: date (month/year) and price of the earliest optional
call or redemption. There may be other call provisions at varying prices at
later dates.
++ This bond is prerefunded. See glossary for definition.
-----------------------------------------------------------------------
KEY TO ABBREVIATIONS:
AMBAC -- American Municipal Bond Assurance Corporation
CAPMAC -- Capital Markets Assurance Company
ETM -- Escrowed to Maturity
FGIC -- Financial Guaranty Insurance Company
FRDD -- Floating Rate Daily Demand
FSA -- Financial Security Assurance
GNMA -- Government National Mortgage Association
G.O. -- General Obligation
MBIA -- Municipal Bond Insurance Association
P.C.R. -- Pollution Control Revenue
-----------------------------------------------------------------------
See Notes to Financial Statements.
9
--------------------------------------------------------------------------------
THE BLACKROCK INVESTMENT
QUALITY MUNICIPAL TRUST INC.
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 2001 (UNAUDITED)
--------------------------------------------------------------------------------
ASSETS
Investments, at value (cost $367,840,561) (Note 1) $384,534,445
Cash ............................................. 257,633
Interest receivable .............................. 6,935,279
Receivable for investments sold .................. 65,390
Other assets ..................................... 34,970
------------
391,827,717
------------
LIABILITIES
Dividends payable--common stock .................. 1,085,961
Dividends payable--preferred stock ............... 88,354
Offering costs payable--preferred stock .......... 158,744
Investment advisory fee payable (Note 2) ......... 113,317
Administration fee payable (Note 2) .............. 48,564
Deferred directors fees (Note 1) ................. 19,947
Other accrued expenses ........................... 105,949
------------
1,620,836
------------
NET INVESTMENT ASSETS ............................ $390,206,881
============
Net investment assets were comprised of:
Common stock:
Par value (Note 4) ........................... $ 167,071
Paid-in capital in excess of par ............. 231,608,000
Preferred stock (Note 4) ....................... 146,550,000
------------
378,325,071
Undistributed net investment income ............ 708,563
Accumulated net realized loss .................. (5,520,637)
Net unrealized appreciation .................... 16,693,884
------------
Net investment assets, April 30, 2001 ............ $390,206,881
============
Net assets applicable to common shareholders ..... $243,656,881
============
Net asset value per share:
($243,656,881 / 16,707,093 shares of
common stock issued and outstanding) .......... $14.58
======
--------------------------------------------------------------------------------
THE BLACKROCK INVESTMENT
QUALITY MUNICIPAL TRUST INC.
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 2001 (UNAUDITED)
--------------------------------------------------------------------------------
NET INVESTMENT INCOME
Income
Interest and discount earned ......... $11,172,278
-----------
Expenses
Investment advisory .................. 682,680
Administration ....................... 292,577
Auction agent ........................ 191,500
Custodian ............................ 51,500
Directors ............................ 36,000
Reports to shareholders .............. 29,500
Legal ................................ 15,500
Registration ......................... 15,500
Independent accountants .............. 12,500
Transfer agent ....................... 11,500
Miscellaneous ........................ 35,183
-----------
Total expenses ....................... 1,373,940
-----------
Net investment income .................. 9,798,338
-----------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Net realized loss on investments ....... (58,690)
Net change in unrealized appreciation on
investments .......................... 4,435,066
-----------
Net gain on investments ................ 4,376,376
-----------
NET INCREASE IN NET INVESTMENT ASSETS
RESULTING FROM OPERATIONS .............. $14,174,714
===========
See Notes to Financial Statements.
10
--------------------------------------------------------------------------------
THE BLACKROCK INVESTMENT QUALITY MUNICIPAL TRUST INC.
STATEMENTS OF CHANGES IN NET INVESTMENT ASSETS (UNAUDITED)
--------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
APRIL 30, OCTOBER 31,
2001 2000
---------------- -------------
INCREASE (DECREASE) IN NET INVESTMENT ASSETS
OPERATIONS:
Net investment income ........................................... $ 9,798,338 $ 18,877,184
Net realized loss on investments ................................ (58,690) (5,068,444)
Net change in unrealized appreciation on investments ............ 4,435,066 12,219,832
------------- -------------
Net increase in net investment assets resulting from operations 14,174,714 26,028,572
------------- -------------
DIVIDENDS AND DISTRIBUTIONS:
To common shareholders from net investment income ............... (6,515,470) (13,953,202)
To preferred shareholders from net investment income ............ (2,851,760) (5,841,351)
------------- -------------
Total dividends and distributions ............................. (9,367,230) (19,794,553)
------------- -------------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from additional issuance of preferred shares ....... -- 16,080,131
------------- -------------
Total increase ................................................ 4,807,484 22,314,150
------------- -------------
NET INVESTMENT ASSETS
Beginning of period ............................................... 385,399,397 363,085,247
------------- -------------
End of period (including undistributed net investment income
of $708,563 and $277,455, respectively) ......................... $ 390,206,881 $ 385,399,397
============= =============
See Notes to Financial Statements.
11
--------------------------------------------------------------------------------
THE BLACKROCK INVESTMENT QUALITY MUNICIPAL TRUST INC.
FINANCIAL HIGHLIGHTS (UNAUDITED)
--------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
SIX MONTHS ENDED ----------------------------------------------------
APRIL 30, 2001 2000 1999 1998 1997 1996
-------------- ---- ---- ---- ---- ----
PER COMMON SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD .......................... $ 14.30 $ 13.95 $ 15.78 $ 15.32 $ 14.52 $ 14.18
-------- -------- -------- -------- -------- --------
Net investment income ....................................... .59 1.13 1.09 1.08 1.08 1.09
Net realized and unrealized gain (loss) on
investments ............................................... .25 .43 (1.63) .70 .80 .34
-------- -------- -------- -------- -------- --------
Net increase (decrease) from investment operations ............ .84 1.56 (.54) 1.78 1.88 1.43
-------- -------- -------- -------- -------- --------
Dividends and distributions:
Dividends from net investment income to:
Common shareholders ....................................... (.39) (.83) (.86) (.81) (.78) (.79)
Preferred shareholders .................................... (.17) (.35) (.24) (.24) (.27) (.28)
Distributions from net realized gain on investments to:
Common shareholders ....................................... -- -- (.15) (.20) (.02) (.01)
Preferred shareholders .................................... -- -- (.04) (.07) (.01) (.01)
-------- -------- -------- -------- -------- --------
TOTAL DIVIDENDS AND DISTRIBUTIONS ............................. (0.56) (1.18) (1.29) (1.32) (1.08) (1.09)
-------- -------- -------- -------- -------- --------
Capital change with respect to issuance of preferred shares ... -- (.03) -- -- -- --
-------- -------- -------- -------- -------- --------
Net asset value, end of period* ............................... $ 14.58 $ 14.30 $ 13.95 $ 15.78 $ 15.32 $ 14.52
======== ======== ======== ======== ======== ========
Market value, end of period* .................................. $ 13.38 $ 12.13 $ 13.13 $ 15.44 $ 13.38 $ 12.44
======== ======== ======== ======== ======== ========
TOTAL INVESTMENT RETURN+ ...................................... 13.67% (1.27)% (9.03)% 23.81% 14.39% 10.41%
======== ======== ======== ======== ======== ========
RATIOS TO AVERAGE NET ASSETS OF COMMON
SHAREHOLDERS++:
Expenses ...................................................... 1.12%+++ 1.20% 1.05% 1.04% 1.07% 1.12%
Net investment income before preferred stock dividends ........ 8.04%+++ 8.18% 7.21% 6.95% 7.42% 7.57%
Preferred stock dividends ..................................... 2.34%+++ 2.53% 1.60% 1.53% 1.88% 1.97%
Net investment income available to common shareholders ........ 5.70%+++ 5.65% 5.61% 5.42% 5.54% 5.60
SUPPLEMENTAL DATA:
Average net assets of common shareholders (in thousands) ...... $245,708 $230,746 $252,536 $259,280 $243,947 $238,540
Portfolio turnover ............................................ 0% 35% 26% 46% 160% 164%
Net assets of common shareholders, end of period (in thousands) $243,657 $238,849 $233,085 $263,590 $255,926 $242,547
Preferred stock outstanding (in thousands) .................... $146,550 $146,550 $130,000 $130,000 $130,000 $130,000
Asset coverage per share of preferred stock, end of period .... $ 66,565 $ 65,745 $ 69,824 $ 75,690 $ 74,241 $ 71,644
-----------
* Net asset value and market value are published in BARRON'S on Saturday and
THE WALL STREET JOURNAL on Monday.
+ Total investment return is calculated assuming a purchase of common stock at
the current market price on the first day and a
sale at the current market price on the last day of the period reported.
Dividends and distributions, if any, are assumed for purposes of this
calculation to be reinvested at prices obtained under the Trust's dividend
reinvestment plan. Total investment return does not reflect brokerage
commissions. Total investment returns for periods less than one full year
are not annualized.
++ Ratios are calculated on the basis of income and expenses applicable to both
the common and preferred stock relative to the average net assets of common
shareholders.
+++ Annualized.
The information above represents the unaudited operating performance data for a
share of common stock outstanding, total investment return, ratios to average
net assets and other supplemental data for the periods indicated. This
information has been determined based upon financial information provided in the
financial statements and market value data for the Trust's common shares.
See Notes to Financial Statements.
12
--------------------------------------------------------------------------------
THE BLACKROCK INVESTMENT
QUALITY MUNICIPAL TRUST INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------
NOTE 1. ORGANIZATION & ACCOUNTING POLICIES
The BlackRock Investment Quality Municipal Trust Inc. (the "Trust") was
organized in Maryland on November 19, 1992 as a diversified, closed-end
management investment company. The Trust's investment objective is to manage a
portfolio of investment quality securities while providing high current income
exempt from regular Federal income tax consistent with the preservation of
capital. The ability of issuers of debt securities held by the Trust to meet
their obligations may be affected by economic developments in a specific
industry or region. No assurance can be given that the Trust's investment
objective will be achieved.
The following is a summary of significant accounting policies followed by the
Trust.
SECURITIES VALUATION: Municipal securities (including commitments to purchase
such securities on a "when-issued" basis) are valued on the basis of prices
provided by dealers or pricing services approved by the Trust's Board of
Directors. In determining the value of a particular security, pricing services
may use certain information with respect to transactions in such securities,
quotations from bond dealers, market transactions in comparable securities and
various relationships between securities in determining values. Short-term
securities are valued at amortized cost. Any securities or other assets for
which such current market quotations are not readily available are valued at
fair value as determined in good faith under procedures established by and under
the general supervision and responsibility of the Trust's Board of Directors.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on trade date. Realized and unrealized gains and losses are calculated
on the identified cost basis. Interest income is recorded on the accrual basis
and the Trust accretes original issue discount or amortizes premium on
securities purchased using the interest method.
FEDERAL INCOME TAXES: It is the Trust's intention to continue to meet the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute sufficient net income to shareholders. For this
reason and because substantially all of the Trust's gross income consists of
tax-exempt interest, no Federal income tax provision is required.
DIVIDENDS AND DISTRIBUTIONS: The Trust declares and pays dividends and
distributions to common shareholders monthly from net investment income, net
realized short-term capital gains and other sources, if necessary. Net long-term
capital gains, if any, in excess of loss carryforwards may be distributed
annually. Dividends and distributions are recorded on the ex-dividend date.
Dividends and distributions to preferred shareholders are accrued and determined
as described in Note 4.
ESTIMATES: The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
DEFERRED COMPENSATION PLAN: Under a deferred compensation plan approved by the
Board of Directors on February 24, 2000, non-interested Directors may elect to
defer receipt of all or a portion of their annual compensation.
Deferred amounts earn a return for the Directors as though equivalent dollar
amounts had been invested in common shares of other BlackRock funds selected by
the Directors. This has the same economic effect for the Directors as if the
Directors had invested the deferred amounts in such other BlackRock funds.
The deferred compensation plan is not funded and obligations thereunder
represent general unsecured claims against the general assets of the Trust. The
Trust may, however, elect to invest in common shares of those funds selected by
the Directors in order to match its deferred compensation obligations.
NEW ACCOUNTING POLICIES: The Trust will adopt the provisions of the AICPA Audit
and Accounting Guide for Investment Companies, as revised, effective for fiscal
years beginning after December 15, 2000. As required, the Trust will begin
amortizing discounts on debt securities effective November 1, 2001. Prior to
this date, the Trust amortized premiums and original issue discount on debt
securities but did not amortize market discount. The cumulative effect of this
accounting change will have no impact on the total net assets of the Trust. The
impact of this accounting change is anticipated to have an immaterial effect on
the financial statements and will result in an increase to cost of securities
and a corresponding decrease in net unrealized appreciation, based on securities
held as of October 31, 2001.
NOTE 2. AGREEMENTS
The Trust has an Investment Advisory Agreement with BlackRock Advisors, Inc.,
(the "Advisor"), which is a wholly-owned subsidiary of BlackRock, Inc., which in
turn is an indirect, majority-owned subsidiary of PNC Financial Services Group,
Inc. The Trust has an Administration Agreement with
13
Princeton Administrators, L.P. (the "Administrator"), an indirect wholly-owned
affiliate of Merrill Lynch & Co., Inc.
The investment advisory fee paid to the Advisor is computed weekly and
payable monthly at an annual rate of 0.35% of the Trust's average weekly net
investment assets. The administration fee paid to the Administrator is also
computed weekly and payable monthly at an annual rate of 0.15% of the Trust's
average weekly net investment assets, subject to a minimum monthly fee of
$12,500.
Pursuant to the agreements, the Advisor provides continuous supervision of
the investment portfolio and pays the compensation of officers of the Trust who
are affiliated persons of the Advisor. The Administrator pays occupancy and
certain clerical and accounting costs of the Trust. The Trust bears all other
costs and expenses.
NOTE 3. PORTFOLIO SECURITIES
Sales of investment securities, other than short-term investments for the
period ended April 30, 2001 aggregated $1,174,410. There were no purchases,
other than short-term investments, during the period ended April 30, 2001.
The Trust may invest in securities which are not readily marketable,
including those which are restricted as to disposition under securities law
("restricted securities"). At April 30, 2001, the Trust held 6% of its net
assets in securities restricted as to resale.
The Federal income tax basis of the Trust's investments at April 30, 2001 was
$367,921,783, and accordingly, net unrealized appreciation was $16,612,662
(gross unrealized appreciation--$19,999,556, gross unrealized depreciation--
$3,386,894).
For federal income tax purposes, the Trust had a capital loss carryforward at
October 31, 2000 of approximately $5,381,000 of which $312,000 will expire in
2007 and $5,069,000 will expire in 2008. Accordingly, no capital gain
distribution is expected to be paid to shareholders until net gains have been
realized in excess of such amount.
NOTE 4. CAPITAL
There are 200 million shares of $.01 par value common stock authorized. The
Trust may classify or reclassify any unissued shares of common stock into one or
more series of preferred stock. Of the 16,707,093 common shares outstanding at
April 30, 2001, the Advisor owned 7,205 shares. As of April 30, 2001, there were
5,862 shares of preferred stock outstanding as follows: Series T7--3,262 and
Series T28--2,600, which includes 662 shares of series T7 issued on March 10,
2000.
On March 10, 2000, the Trust reclassified 662 shares of common stock and
issued an additional 662 shares of Series T7 preferred stock. The additional
shares issued have identical rights and features of the existing Series T7
preferred stock. Estimated offering cost of $304,369 and underwriting discount
of $165,500 have been charged to paid-in capital in excess of par of the common
shares.
Dividends on Series T7 are cumulative at a rate which is reset every 7 days
based on the results of an auction. Dividends on Series T28 are also cumulative
at a rate which is reset every 28 days based on the results of an auction.
Dividend rates ranged from 2.90% to 5.10% during the period ended April 30,
2001.
The Trust may not declare dividends or make other distributions on shares of
common stock or purchase any such shares if, at the time of the declaration,
distribution, or purchase, asset coverage with respect to the outstanding
preferred stock would be less than 200%.
The preferred stock is redeemable at the option of the Trust, in whole or in
part, on any dividend payment date at $25,000 per share plus any accumulated or
unpaid dividends whether or not declared. The preferred stock is also subject to
mandatory redemption at $25,000 per share plus any accumulated or unpaid
dividends, whether or not declared, if certain requirements relating to the
composition of the assets and liabilities of the Trust as set forth in the
Articles of Incorporation are not satisfied.
The holders of preferred stock have voting rights equal to the holders of
common stock (one vote per share) and will vote together with holders of shares
of common stock as a single class. However, holders of preferred stock are also
entitled to elect two of the Trust's directors. In addition, the Investment
Company Act of 1940 requires that along with approval by stockholders that might
otherwise be required, the approval of the holders of a majority of any
outstanding preferred stock, voting separately as a class would be required to
(a) adopt any plan of reorganization that would adversely affect the preferred
stock, and (b) take any action requiring a vote of security holders, including,
among other things, changes in the Trust's subclassification as a closed-end
investment company or changes in its fundamental investment restrictions.
NOTE 5. DIVIDENDS AND DISTRIBUTIONS
Subsequent to April 30, 2001, the Board of Directors of the Trust declared a
dividend from undistributed earnings of $0.065 per common share payable June 1,
2001, to shareholders of record on May 15, 2001.
For the period May 1, 2001 to May 31, 2001, dividends declared on Preferred
Stock totalled $411,085 in aggregate for the two outstanding preferred stock
series.
14
--------------------------------------------------------------------------------
THE BLACKROCK INVESTMENT QUALITY MUNICIPAL TRUST INC.
DIVIDEND REINVESTMENT PLAN
--------------------------------------------------------------------------------
Pursuant to the Trust's Dividend Reinvestment Plan (the "Plan"), common
shareholders are automatically enrolled to have all distributions of dividends
and capital gains reinvested by State Street Bank and Trust Company (the "Plan
Agent") in Trust shares pursuant to the Plan. Shareholders who elect not to
participate in the Plan will receive all distributions in cash paid by check in
United States dollars mailed directly to the shareholders of record (or if the
shares are held in street or other nominee name, then to the nominee) by the
transfer agent, as dividend disbursing agent.
The Plan Agent serves as agent for the shareholders in administering the
Plan. After the Trust declares a dividend or determines to make a capital gain
distribution, the Plan Agent will, as agent for the participants, receive the
cash payment and use it to buy Trust shares in the open market on the New York
Stock Exchange or elsewhere for the participants' accounts. The Trust will not
issue any new shares under the Plan.
Participants in the Plan may withdraw from the Plan upon written notice to
the Plan Agent and will receive certificates for whole Trust shares and a cash
payment for any fraction of a Trust share.
The Plan Agent's fees for the handling of the reinvestment of dividends and
distributions will be paid by the Trust. However, each participant will pay a
pro rata share of brokerage commissions incurred with respect to the Plan
Agent's open market purchases in connection with the reinvestment of dividends
and distributions. The automatic reinvestment of dividends and distributions
will not relieve participants of any Federal income tax that may be payable on
such dividends or distributions.
The Trust reserves the right to amend or terminate the Plan as applied to any
dividend or distribution paid subsequent to written notice of the change sent to
all shareholders of the Trust at least 90 days before the record date for the
dividend or distribution. The Plan also may be amended or terminated by the Plan
Agent upon at least 90 days' written notice to all shareholders of The Trust.
All correspondence concerning the Plan should be directed to the Plan Agent at
(800) 699-1BFM. The address is on the front of this report.
15
--------------------------------------------------------------------------------
THE BLACKROCK INVESTMENT QUALITY MUNICIPAL TRUST INC.
ADDITIONAL INFORMATION
--------------------------------------------------------------------------------
Quarterly performance and other information regarding the Trust may be found
on BlackRock's website, which can be accessed at
http://www.blackrock.com/funds/cefunds.html. This reference to BlackRock's
website is intended to allow investors public access to quarterly information
regarding the Trust and is not intended to incorporate BlackRock's website into
this report.
ANNUAL MEETING OF TRUST SHAREHOLDERS. There have been no material changes in the
Trust's investment objectives or policies that have not been approved by the
shareholders or to its charter or by-laws or in the principal risk factors
associated with investment in The Trust. There have been no changes in the
persons who are primarily responsible for the day-to-day management of the
Trust's portfolio.
The Annual Meeting of Trust Shareholders was held on May 24, 2001 to vote
on the following matter:
To elect three Directors as follows:
DIRECTOR: CLASS TERM EXPIRING
-------- ----- ----- --------
Frank J. Fabozzi ............... II 3 years 2004
Walter F. Mondale .............. II 3 years 2004
Ralph L. Schlosstein ........... II 3 years 2004
Directors whose term of office continues beyond this meeting are
Andrew F. Brimmer, Richard E. Cavanagh, Kent Dixon, Laurence D. Fink
and James Clayburn La Force, Jr.
Shareholders elected the three Directors. The results of the voting were as
follows:
Votes For* Votes Against* Abstentions*
--------- ------------- -----------
Frank J. Fabozzi ................. 5,650 -- 18
Walter F. Mondale ................ 14,919,675 -- 298,804
Ralph L. Schlosstein ............. 14,979,178 -- 239,301
-------------
* The votes represent common and preferred shareholders voting as a single
class.
16
--------------------------------------------------------------------------------
THE BLACKROCK INVESTMENT QUALITY MUNICIPAL TRUST INC.
INVESTMENT SUMMARY
--------------------------------------------------------------------------------
THE TRUST'S INVESTMENT OBJECTIVE
The BlackRock Investment Quality Municipal Trust's investment objective is to
provide high current income exempt from regular Federal income tax consistent
with the preservation of capital.
WHO MANAGES THE TRUST?
BlackRock Advisors, Inc. (the "Advisor") manages the Trust. The Advisor is a
wholly-owned subsidiary of BlackRock, Inc. ("BlackRock"), which is one of the
largest publicly traded investment management firms in the United States with
$202 billion of assets under management as of March 31, 2001. BlackRock manages
assets on behalf of more than 3,300 institutions and 200,000 individuals
worldwide, including nine of the ten largest companies in the U.S. as determined
by Fortune Magazine, through a variety of equity, fixed income, liquidity and
alternative investment separate accounts and mutual funds, including the
BLACKROCK FUNDS and BLACKROCK PROVIDENT INSTITUTIONAL FUNDS. In addition,
BlackRock provides risk management and technology services to a growing number
of institutional investors under the BLACKROCK SOLUTIONS name. Clients are
served from BlackRock's headquarters in New York City, as well as offices in
Wilmington, DE, Edinburgh, Scotland, Tokyo, Japan, and Hong Kong. BlackRock is a
member of The PNC Financial Services Group, Inc. ("PNC"), one of the largest
diversified financial services organizations in the United States, and is
majority-owned by PNC and by BlackRock employees.
WHAT CAN THE TRUST INVEST IN?
Under normal conditions, the Trust expects to continue to manage its assets so
that at least 80% of its investments are rated at least investment grade ("BBB"
by Standard & Poor's or "Baa" by Moody's Investor Services) and up to 20% of its
assets may instead be deemed to be of equivalent credit quality by the Advisor.
Examples of the types of securities that the Trust may invest in include general
obligation bonds, which are backed by the full taxing power of the municipality
(states, counties and cities), and revenue bonds, which are backed by a revenue
source associated with the issuing municipality or by a special tax. Revenue
bonds include those that are backed by revenues generated by universities,
hospitals, housing developments, utilities, public facilities, toll roads,
airports, etc.
WHAT IS THE ADVISOR'S INVESTMENT STRATEGY?
The Advisor will manage the assets of the Trust in accordance with the Trust's
investment objective and policies to seek to achieve its objective by investing
in municipal debt securities that are diversified both geographically and
according to revenue source. As such, the Advisor actively manages the assets in
relation to market conditions and interest rate changes. In seeking the
investment objective, the Trust does not expect to invest more than 25% of its
total assets in municipals that are issued by the same state. Depending on yield
and portfolio allocation considerations, the Advisor may choose to invest a
portion of the Trust's assets in securities which pay interest that is subject
to AMT (alternative minimum tax).
Under current market conditions the use of leverage increases the income earned
by the Trust. The Trust employs leverage primarily through the issuance of
preferred stock. Preferred stockholders will receive dividends based on
short-term rates in exchange for allowing the Trust to borrow additional assets.
These assets will be invested in longer-term assets which typically offer higher
interest rates and the difference between the cost of the dividends paid to
preferred stockholders and the interest earned on the longer-term securities
will provide higher income levels for common stockholders in most interest rate
environments. See "Leverage Considerations in the Trust" below.
HOW ARE THE TRUST'S SHARES PURCHASED AND SOLD? DOES THE TRUST PAY DIVIDENDS
REGULARLY?
The Trust's common shares are traded on the New York Stock Exchange which
provides investors with liquidity on a daily basis. Orders to buy or sell shares
of The Trust must be placed through a registered broker or financial advisor.
The Trust pays monthly dividends which are typically paid on the first business
day of the month. For shares held in the shareholder's
17
name, dividends may be reinvested in additional shares of the Trust through the
Trust's transfer agent, State Street Bank and Trust Company. Investors who wish
to hold shares in a brokerage account should check with their financial advisor
to determine whether their brokerage firm offers dividend reinvestment services.
LEVERAGE CONSIDERATIONS IN THE TRUST
Leverage increases the duration (or price sensitivity of the net assets with
respect to changes in interest rates) of the Trust, which can improve the
performance of the Trust in a declining rate environment, but can cause net
assets to decline faster than the market in a rapidly rising interest rate
environment. The Trust may reduce, or unwind, the amount of leverage employed
should the Advisor consider that reduction to be in the best interests of the
Trust. The Advisor's portfolio managers continuously monitor and regularly
review the Trust's use of leverage and maintain the ability to unwind the
leverage if that course is chosen.
SPECIAL CONSIDERATIONS AND RISK FACTORS RELEVANT TO THE TRUST
THE TRUST IS INTENDED TO BE A LONG-TERM INVESTMENT AND IS NOT A SHORT-TERM
TRADING VEHICLE.
INVESTMENT OBJECTIVE. Although the objective of the Trust is to provide high
current income exempt from regular Federal income tax consistent with the
preservation of capital, there can be no assurance that this objective will be
achieved.
DIVIDEND CONSIDERATIONS. The income and dividends paid by the Trust are likely
to vary over time as fixed income market conditions change. Future dividends may
be higher or lower than the dividend the Trust is currently paying.
LEVERAGE. The Trust utilizes leverage through the issuance of preferred stock,
which involves special risks. The Trust's net asset value and market value maybe
more volatile due to its use of leverage.
MARKET PRICE OF SHARES. The shares of closed-end investment companies such as
the Trust trade on the New York Stock Exchange (NYSE symbol: BKN) and as such
are subject to supply and demand influences. As a result, shares may trade at a
discount or a premium to their net asset value.
INVESTMENT GRADE MUNICIPAL OBLIGATIONS. The value of municipal debt securities
generally varies inversely with changes in prevailing market interest rates.
Depending on the amount of call protection that the securities in the Trust
have, the Trust may be subject to certain reinvestment risks in environments of
declining interest rates.
ILLIQUID SECURITIES. The Trust may invest in securities that are illiquid,
although under current market conditions the Trust expects to do so to only a
limited extent. These securities involve special risks.
ANTITAKEOVER PROVISIONS. Certain antitakeover provisions will make a change in
the Trust's business or management more difficult without the approval of the
Trust's Board of Directors and may have the effect of depriving shareholders of
an opportunity to sell their shares at a premium above the prevailing market
price.
18
--------------------------------------------------------------------------------
THE BLACKROCK INVESTMENT QUALITY MUNICIPAL TRUST INC.
GLOSSARY
--------------------------------------------------------------------------------
CLOSED-END FUND: Investment vehicle which initially offers a
fixed number of shares and trades on a stock
exchange. The fund invests in a portfolio of
securities in accordance with its stated
investment objectives and policies.
DISCOUNT: When a fund's net asset value is greater than
its stock price the fund is said to be
trading at a discount.
DIVIDEND: Income generated by securities in a portfolio
and distributed to shareholders after the
deduction of expenses. This Trust declares
and pays dividends to common shareholders on
a monthly basis.
DIVIDEND REINVESTMENT: Shareholders may have all dividends and
distributions of capital gains automatically
reinvested into additional shares of a fund.
MARKET PRICE: Price per share of a security trading in the
secondary market. For a closed-end fund, this
is the price at which one share of the fund
trades on the stock exchange. If you were to
buy or sell shares, you would pay or receive
the market price.
NET ASSET VALUE (NAV): Net asset value is the total market value of
all securities and other assets held by the
Trust, plus income accrued on its
investments, minus any liabilities including
accrued expenses, divided by the total number
of outstanding common shares. It is the
underlying value of a single common share on
a given day. Net asset value for the Trust is
calculated weekly and published in BARRON'S
on Saturday and THE WALL STREET JOURNAL on
Monday.
PREMIUM: When a fund's stock price is greater than its
net asset value, the fund is said to be
trading at a premium.
PREREFUNDED BONDS: These securities are collateralized by U.S.
Government securities which are held in
escrow and are used to pay principal and
interest on the tax-exempt issue and retire
the bond in full at the date indicated,
typically at a premium to par.
19
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BLACKROCK
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DIRECTORS
Laurence D. Fink, CHAIRMAN
Andrew F. Brimmer
Richard E. Cavanagh
Kent Dixon
Frank J. Fabozzi
James Clayburn La Force, Jr.
Walter F. Mondale
Ralph L. Schlosstein
OFFICERS THE BLACKROCK
Ralph L. Schlosstein, PRESIDENT INVESTMENT QUALITY
Keith T. Anderson, VICE PRESIDENT MUNICIPAL TRUST INC.
Michael C. Huebsch, VICE PRESIDENT ====================
Robert S. Kapito, VICE PRESIDENT SEMI-ANNUAL REPORT
Kevin Klingert, VICE PRESIDENT APRIL 30, 2001
Richard M. Shea, VICE PRESIDENT/TAX
Henry Gabbay, TREASURER
James Kong, ASSISTANT TREASURER
Anne Ackerley, SECRETARY
INVESTMENT ADVISOR
BlackRock Advisors, Inc.
100 Bellevue Parkway
Wilmington, DE 19809
(800) 227-7BFM
ADMINISTRATOR
Princeton Administrators, L.P.
P.O. Box 9095
Princeton, NJ 08543-9095
(800) 543-6217
CUSTODIAN AND TRANSFER AGENT
State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171
(800) 699-1BFM
AUCTION AGENT
Deutsche Bank
4 Albany Street
New York, NY 10006
INDEPENDENT ACCOUNTANTS
Deloitte & Touche LLP
Two World Financial Center
New York, NY 10281-1434
LEGAL COUNSEL
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, NY 10036
LEGAL COUNSEL -- INDEPENDENT DIRECTORS
Debevoise & Plimpton
875 Third Avenue
New York, NY 10022
The accompanying financial statements
as of April 30, 2001 were not audited and
accordingly, no opinion is expressed on
them.
This report is for shareholder
information. This is not a prospectus
intended for use in the purchase or sale
of any securities.
THE BLACKROCK INVESTMENT QUALITY
MUNICIPAL TRUST INC.
c/o Princeton Administrators, L.P.
P.O. Box 9095
Princeton, NJ 08543-9095
(800) 543-6217
[Logo] Printed on recycled paper 09247D-105
09247D-204 [Logo]BLACKROCK
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